Beverly Hills City Council
April 26, 2022

AGENDA REPORT
Meeting Date: April 26, 2022
Item Number:

To: Honorable Mayor & City Council
From: Logan Phillippo, Policy & Management Analyst
Jonathan Gernes, Management Analyst
Subject: APPROVAL OF A LEASE WITH SUN COAST MERCHANDISE CORP. AT 239 SOUTH BEVERLY DRIVE
Attachment: 1. Lease Agreement

RECOMMENDATION
Staff recommends City Council approve a lease agreement by and between the City of Beverly Hills and Sun Coast Merchandise Corp. (the “Tenant”) at 239 South Beverly Drive (“Lease”).

INTRODUCTION
The first and second floor office tenant space at 239 South Beverly Drive is currently vacant. Sun Coast Merchandise Corp. controls Sunscope, a global branding and sourcing company. The lease has an initial monthly base rent of $12,104 per month and $145,248 per year. The base rent will increase by 3% annually beginning one year from the rent commencement date. In addition to the base rent, the Tenant pays a fixed amount per month for its portion of building operating expenses beginning January 2023; that fixed amount for operating expenses is $90.78 per month, which is subject to annual increases of $90.78.

DISCUSSION
Sun Coast Merchandise Corp. operates Sunscope, a custom design, branding and merchandising company that focuses on large scale product sourcing and product innovation. Sunscope operates globally across Asia, Europe and North America, and its custom products range from hard goods to clothing.

The Lease includes the following key terms:
 Tenant shall be allowed to begin its improvements while Landlord completes its own improvements;
D-6
Meeting Date: April 26, 2022

 The Commencement Date is the date Landlord’s improvements are substantially completed, to be no later than May 26, 2022;
 The Rent Commencement Date is four (4) months after the Commencement Date;  The term expires thirty-two (32) months after the Rent Commencement Date;  Initial monthly base rent of $12,104, which increases by 3% on each anniversary of the Rent Commencement Date;
 Initial monthly operating expense fees of $90.78 per month payable with the base rent beginning January 1, 2023, and increasing annually by an additional $90.78 per month;
 Landlord is to complete its own improvements at Landlord’s sole cost;  Tenant improvements are to be performed by the Tenant at the Tenant’s sole cost; and
 A cash security deposit of $12,841.13 to be held by Landlord during the term of the Lease.

FISCAL IMPACT
The Lease will generate $400,531 in revenue from monthly base rent over the initial 32- month term. In addition, over this initial term, Staff estimates the Lease will generate $4,577.07 in revenue for the Tenant’s share of building operating expenses.

The Landlord improvements include the construction of a wall demising the second floor premises from the adjacent tenant space and the completion of a downstairs demising wall separating the premises from the emergency exit.

The Tenant will be required to complete all its planned improvements to the premises at the Tenant’s sole cost and there is no tenant improvement allowance.

The City has a leasing commission agreement with Gilbert Dembo and Associates, Inc.

DBA Dembo Realty earlier approved on August 6, 2019 (Agreement 453-19). The total commission payment is approximately $16,021.24, which will be paid in five installments with 20% due upon the execution of the lease ($3,204.25), and 20% due upon each anniversary of the commencement date.

Funding is available as part of the City Fund operating budget for one-time professional consultant services (48012202-731200).

Gabriella Yap,
Deputy City Manager
Approved By
Attachment 1
B0785-0001\2651492v2.doc

OFFICE LEASE

CITY OF BEVERLY HILLS,
as Landlord
and
SUN COAST MERCHANDISE CORP.,
as Tenant
239 South Beverly Drive
Beverly Hills,
California
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56

TABLE OF CONTENTS
Page
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ARTICLE 1 BASIC LEASE PROVISIONS.............................................................................1

1.1 Effective Date ...........................................................................................1

1.2 Landlord....................................................................................................1

1.3 Tenant .......................................................................................................1

1.4 Premises....................................................................................................1

1.5 [INTENTIONALLY OMITTED].............................................................1

1.6 Term Commencement Date; Initial Term.................................................1

1.7 Rent Commencement Date .......................................................................1

1.8 Base Rent ..................................................................................................1

1.9 Tenant’s Share of Operating and Tax Expenses.......................................2

1.10 Security Deposit........................................................................................2

1.11 Use of Premises.........................................................................................2

1.12 [INTENTIONALLY OMITTED].............................................................2

1.13 Notices ......................................................................................................2

1.14 Broker(s) ...................................................................................................3

1.15 Teant Improvement Allowance…………………………………………..3

1.16 Landlord Work……………….……………………………………..……3

1.17 Lease Guaranty……………….…………………………………………..3
ARTICLE 2 PREMISES ...........................................................................................................3

2.1 Premises....................................................................................................3

2.2 Reservation ...............................................................................................3

2.3 Common Area...........................................................................................3 DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 TABLE OF CONTENTS (cont.)
Page
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ARTICLE 3 TERM ...................................................................................................................3

3.1 Term..........................................................................................................3 ARTICLE 4 POSSESSION AND CONSTRUCTION .............................................................3

4.1 Delivery of Possession..............................................................................3

4.2 Tenant’s Construction...............................................................................4

4.3 Condition of Premises...............................................................................4

4.4 Construction-Related Accessibility Standards..........................................4 ARTICLE 5 RENTAL...............................................................................................................4

5.1 Rent...........................................................................................................4

5.2 Additional Rent.........................................................................................5

5.3 Late Payments...........................................................................................5

5.4 Place of Payment.......................................................................................5 ARTICLE 6 TAXES AND COMMON AREA/PROJECT EXPENSES..................................5

6.1 Possessory Interest Taxes .........................................................................5

6.2 Other Tenant Property Taxes....................................................................5

6.3 Common Area/Project Expenses ..............................................................6 ARTICLE 7 SECURITY DEPOSIT........................................................................................13 ARTICLE 8 TENANT’S CONDUCT OF BUSINESS...........................................................13

8.1 Permitted Use..........................................................................................13

8.2 [INTENTIONALLY OMITTED]...........................................................13

8.3 Tenant’s Signs.........................................................................................13

8.4 Hours and Place for Deliveries...............................................................14 ARTICLE 9 MAINTENANCE, REPAIRS AND ALTERATIONS.......................................14

9.1 Landlord’s Maintenance Obligations......................................................14 DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 TABLE OF CONTENTS (cont.)
Page
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9.2 Landlord’s Right of Entry.......................................................................14

9.3 Tenant’s Maintenance Obligations.........................................................14

9.4 Alterations...............................................................................................15 ARTICLE 10 [INTENTIONALLY OMITTED].......................................................................16 ARTICLE 11 DAMAGE TO TENANT’S PROPERTY; WAIVER.........................................16 ARTICLE 12 INSURANCE......................................................................................................17

12.1 Tenant’s Insurance ..................................................................................17

12.2 Restrictions on Use .................................................................................18

12.3 Additional Insureds.................................................................................18

12.4 Certificate(s) of Insurance.......................................................................18

12.5 Landlord Cure Right ...............................................................................18

12.6 Waiver of Subrogation............................................................................18

12.7 Indemnity ................................................................................................19 ARTICLE 13 DAMAGE...........................................................................................................19

13.1 Insured Casualty......................................................................................19

13.2 Uninsured Casualty.................................................................................20

13.3 Distribution of Insurance Proceeds.........................................................20

13.4 Abatement...............................................................................................21

13.5 Waiver of Termination............................................................................21 ARTICLE 14 EMINENT DOMAIN .........................................................................................21

14.1 Taking .....................................................................................................21

14.2 Total Taking............................................................................................21

14.3 Partial Taking..........................................................................................21

14.4 Award......................................................................................................21 DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 TABLE OF CONTENTS (cont.)
Page
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14.5 Continuation of Lease .............................................................................22 ARTICLE 15 ASSIGNMENT AND SUBLETTING ...............................................................22

15.1 Landlord’s Consent Required .................................................................22

15.2 Procedures...............................................................................................22

15.3 Standard for Consent After Tenant Event of Default .............................22

15.4 No Release; Form ...................................................................................23

15.5 Processing Fees.......................................................................................23

15.6 Transfer Rent ..........................................................................................23 ARTICLE 16 DEFAULTS ........................................................................................................24

16.1 Events of Default ....................................................................................24

16.2 Landlord Remedies.................................................................................24

16.3 Default by Landlord................................................................................25 ARTICLE 17 SUBORDINATION, ATTORNMENT AND ESTOPPEL
CERTIFICATES.................................................................................................25

17.1 Subordination..........................................................................................25

17.2 Attornment ..............................................................................................25

17.3 Estoppel Certificates...............................................................................25

17.4 Subordination of Landlord’s Liens.........................................................26 ARTICLE 18 MATTERS OF RECORD...................................................................................26 ARTICLE 19 UTILITIES AND SERVICES ............................................................................26 ARTICLE 20 MISCELLANEOUS ............................................................................................27

20.1 Hazardous Materials ...............................................................................27

20.2 Notices ....................................................................................................28

20.3 Force Majeure .........................................................................................28 DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 TABLE OF CONTENTS (cont.)
Page
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20.4 Termination and Holding Over...............................................................28

20.5 Miscellaneous Provisions……………………………………………….28
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 TABLE OF CONTENTS (cont.)
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EXHIBITS
EXHIBIT “A” Diagram of Premises
EXHIBIT “A-1” Landlord Work
EXHIBIT “B” Initial Tenant Improvements
EXHIBIT “C” Form of Memorandum of Lease
EXHIBIT “D” Rules and Regulations
EXHIBIT “E” Notice of Lease Term/Rent Dates
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -1-
B0785-0001\2651492v2.doc
LEASE
This Lease (“Lease”) is entered into as of the “Effective Date” (as defined in Article 1.1 below) by and between “Landlord” and “Tenant” (each as defined in Article 1.2 and Article 1.3 below).

ARTICLE 1

BASIC LEASE PROVISIONS

1.1 Effective Date. April 26, 2022.

1.2 Landlord. CITY OF BEVERLY HILLS, a California municipal corporation.

1.3 Tenant. SUN COAST MERCHANDISE CORP., a California corporation.

1.4 Premises. That certain space described on Exhibit “A” attached hereto, which is in the building at 239 South Beverly Drive in the City of Beverly Hills (“Building”). (Article 2.1)

1.5 [INTENTIONALLY OMITTED]

1.6 Term Commencement Date; Initial Term; Landlord’s Work. Landlord shall deliver possession of the Premises to Tenant within two (2) business days after the date of this Lease.

The term of this Lease shall commence on the date (“Term Commencement Date”) on which Landlord’s Work described in Exhibit “A-1” is substantially completed and shall expire three (3) years thereafter (Article 3.1).

Landlord shall substantially complete Landlord’s Work within thirty (30) days after the date of this Lease, subject to delays beyond the control of Landlord.

As used herein, the term “substantially completed” shall mean completed except for socalled “punch list” items consisting of incomplete items that do not materially and adversely affect Tenant’s ability to proceed with or complete Tenant’s initial improvements. Landlord and Tenant shall jointly inspect the Landlord’s Work and create a punch list of such items, which Landlord shall then complete with reasonable diligence, subject to delays beyond Landlord’s control.

1.7 Rent Commencement Date. The Rent Commencement Date shall be four calendar months after the Term Commencement Date. The Term Commencement Date and the Rent Commencement Date shall be memorialized by a letter/notice in the form attached hereto as Exhibit “E” (Articles 3.1 and 5.1).

1.8 Base Rent.

Months After Rent
Commencement
Monthly
Rent
1-8 $12,104.00
9-20 $12,467.12
21-32 $12,841.13
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -2-
B0785-0001\2651492v2.doc
Tenant shall pay the first full month’s Base Rent ($12,104.00) to Landlord on the date Tenant signs and delivers this Lease to Landlord.

1.9 Tenant’s Share of Operating and Tax Expenses: Commencing on the Term Commencement Date, Tenant shall pay Tenant’s Share (hereafter defined) of Operating Expenses (as defined in Article 6.3(a)(i)) and Tax Expenses (as defined in Article 6.3(a)(ii)) for the Project. Landlord and Tenant stipulate and agree that Tenant’s share of actual Operating Expenses and Tax Expenses shall be Forty-Nine and Ninety-Five Hundredths percent (49.95%) of the total Operating Expenses and Tax Expenses for the Project (“Tenant’s Share”) that exceed the Operating Expenses and Tax Expenses for such office space during the calendar year 2022 (“Base Year”), and that there shall be no adjustment in this share calculation as a result of any inaccuracy in the measurement of the Premises or the Project or any re-measurement of the Premises or the Project.

However, notwithstanding the foregoing, until Landlord notifies Tenant in writing that the foregoing shall apply (together with an estimate under Article 6.3(b)), Tenant shall instead pay a fixed amount of as shown below(the “Fixed Amount Pass-Through”) per calendar month (prorated for any partial calendar months) as Tenant’s Share of Operating Expenses and Tax Expenses. Upon Landlord notifying Tenant in writing that the first sentence of this Article shall apply, Tenant shall pay Tenant’s share of Operating Expenses and Tax Expenses as determined in accordance with Article 6.

Period
Monthly
Operating
Expense Payment
1/1/2023 - 12/31/2023 $90.78
1/1/2024 - 12/31/2024 $181.56
1/1/2025 - 12/31/2025 $272.34

1.10 Security Deposit. $12,841.13, which shall be subject to Article 7. (Article 7)

1.11 Use of Premises. The Premises shall be used solely for office purposes.

1.12 [INTENTIONALLY OMITTED]

1.13 Notices. (Article 20.2)
To Landlord: City of Beverly Hills
455 North Rexford Drive
Beverly Hills, California 90210
Attn: City Manager
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -3-
B0785-0001\2651492v2.doc
With a copy to: City of Beverly Hills
455 North Rexford Drive
Beverly Hills, California 90210
Attn: City Attorney
To Tenant: Sun Coast Merchandise Corporation
6405 Randolph Street
Los Angeles, CA 90040

1.14 Broker(s). Dembo Realty, who represents Landlord; Landlord shall pay a commission to said broker pursuant to a separate written agreement between Landlord and such broker.

Tenant’s represents and warrants that Tenant is not represented by a broker, salesperson or finder in connection with this Lease.

1.15 Tenant Improvement Allowance. None.

1.16 Landlord Work. Landlord shall perform the improvements described on Exhibit “A-1”, at Landlord’s cost.

1.17 Lease Guaranty. None.

ARTICLE 2

PREMISES

2.1 Premises. Landlord leases to Tenant and Tenant leases from Landlord, for the “Term” (as defined in Article 3) and upon the covenants and conditions set forth in this Lease, the premises described in Article 1.4 (“Premises”).

2.2 Reservation. Landlord reserves the right to use the exterior walls, floor, roof and plenum in, above and below the Premises for the repair, maintenance, use and replacement of pipes, ducts, utility lines and systems, structural elements serving the Project and for such other purposes as Landlord deems necessary.

2.3 Common Area. Tenant shall have the non-exclusive right to use area outside of the Premises within the Project that are intended for use by all tenants and/or the public, as determined by Landlord from time to time (“Common Area”).

ARTICLE 3
TERM

3.1 Term. The term of this Lease (“Term”) shall commence upon the Term Commencement Date, and shall end on the date described in Article 1.6.

ARTICLE 4

POSSESSION AND INITIAL IMPROVEMENTS

4.1 Delivery of Possession. Landlord shall deliver possession of the Premises as described in Section 1.6 above.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -4-
B0785-0001\2651492v2.doc

4.2 Tenant’s Initial Improvements. Tenant shall diligently prosecute submission of each of the following to Landlord, and in all events shall deliver each of the following to Landlord prior to the commencement of Tenant’s Initial Improvements (as defined in Exhibit “B”): (a) “Final Approved Plans” (as defined in Exhibit “B”) (b) a copy of Tenant’s building permit, if issued by such date; and (c) executed copies of policies of insurance or certificates thereof (as required under Article 12). Tenant shall diligently prosecute Tenant’s Initial Improvements to completion. Tenant shall deliver to Landlord a copy of the certificate of occupancy for the Premises issued by the appropriate governmental agency upon completion of Tenant’s Initial Improvements. Unless identified as by Landlord as having to be removed prior to Lease termination pursuant to Article 20.4, all of Tenant’s Initial Improvements including, but not limited to, light fixtures, floor coverings and partitions, but excluding trade fixtures and signs, shall be deemed to be the property of Landlord upon installation thereof

4.3 Condition of Premises. Tenant acknowledges that: (i) neither Landlord nor any employee, representative or agent of Landlord has made any representation or warranty (express or implied) with respect to the Premises or any other portion of the Project, and (ii) Landlord shall have no obligation to improve or alter the Premises or the Project for the benefit of Tenant, except as set forth in Exhibit “A-1”. Tenant acknowledges that Tenant has thoroughly inspected the Premises and Tenant shall accept the Premises in their current “AS-IS” condition, without representation or warranty, express or implied (subject to Landlord’s obligation to complete the work on Exhibit “A-1”).

4.4 Construction-Related Accessibility Standards. The Premises have not been inspected by a Certified Access Specialist (CASp). A Certified Access Specialist (CASp) can inspect the Premises and determine whether the Premises comply with all of the applicable constructionrelated accessibility standards under state law. Although state law does not require a CASp inspection of the Premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the Premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.

In that regard, the parties agree that in the event Tenant requests a CASp inspection, Tenant shall pay any such inspection fees and the cost of making any such repairs.

ARTICLE 5
RENT

5.1 Rent. Tenant shall pay the Base Rent specified in Article 1.8 in monthly installments, in advance, on or before the first (1st) day of each month, without prior demand and without offset, abatement or deduction, commencing on the Rent Commencement Date as defined in Article 1.7 (except that the first full month of Base Rent, together with the Security Deposit, shall be paid/delivered when Tenant signs and delivers this Lease). Should the Rent Commencement Date be a day other than the first (1st) day of a calendar month, then the monthly installment of Rent for the first partial month shall be prorated based on a 30-day month.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -5-
B0785-0001\2651492v2.doc

5.2 Additional Rent. Tenant shall pay, as “Additional Rent”, without offset, abatement or deduction, all sums required to be paid by Tenant to Landlord pursuant to the terms of this Lease in addition to Base Rent, and Landlord shall have the same rights and remedies for the nonpayment of Additional Rent as it has with respect to the nonpayment of Rent. Unless otherwise set forth herein with respect to a certain payment and except for Base Rent and the Monthly Expense Payment (as defined Article 6.3), Additional Rent shall be due thirty (30) days after delivery to Tenant of an invoice or written demand therefore.

5.3 Late Payments. If any Monthly Rent, or any other sum due, is not received by Landlord from Tenant within five (5) days after the date when due, Tenant shall immediately pay to Landlord a late charge equal to five percent (5%) of such sum due, and Landlord and Tenant agree that this late charge represents a reasonable estimate of the direct and indirect costs, expenses and damages Landlord will incur as a result of Tenant’s late payment (which damages would be impractical and extremely difficult to calculate accurately) and is therefore fair compensation to Landlord for its loss suffered by reason of late payment by Tenant.

5.4 Place of Payment. Tenant shall pay Base Rent and Additional Rent to Landlord at the first address for Landlord specified in Article 1.13, but with the addition of “Attn: Cashier”, or to such other address and/or person as Landlord may from time to time designate in writing to Tenant.

ARTICLE 6

TAXES AND COMMON AREA/PROJECT EXPENSES

6.1 Possessory Interest Taxes. TENANT ACKNOWLEDGES AND AGREES THAT FOR

SO LONG AS THE BUILDING IS OWNED BY THE CITY OR ANY OTHER PUBLIC

ENTITY OR GOVERNMENT, INCLUDING WITHOUT LIMITATION A MUNICIPAL CORPORATION, THIS LEASE AND TENANT’S INTEREST HEREUNDER MAY

CONSTITUTE A POSSESSORY INTEREST SUBJECT TO PROPERTY TAXATION AND

AS A RESULT TENANT MAY BE SUBJECT TO THE PAYMENT OF POSSESSORY INTEREST TAXES LEVIED ON THAT INTEREST. TENANT SHALL PAY SUCH TAXES WHEN DUE, TO THE LEVYING AUTHORITY.

6.2 Other Tenant Property Taxes. Tenant shall pay, prior to delinquency, all taxes, assessments, license fees and public charges levied, assessed or imposed upon its business operation, trade fixtures, merchandise and other personal properly in, on or upon the Premises.

If any such items of property are assessed with property of Landlord, then the assessment shall be equitably divided by Landlord between Landlord and Tenant. If any such taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property or if the assessed value of the Premises or the Project is increased by Tenant’s construction of any Alterations inclusion therein of a value placed upon such personal property or trade fixtures, Tenant shall pay the amount thereof as invoiced to Tenant by Landlord within thirty (30) days following Landlord’s delivery of such invoice together with reasonable evidence of such allocation.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -6-
B0785-0001\2651492v2.doc

6.3 Common Area/Project Expenses.
(a) For the purposes of this Lease, the following terms are defined as follows:
(i) “Operating Expenses” shall consist of all costs of operation, management, ownership, maintenance and repair of the land and Building at 239 South Beverly Drive, in Beverly Hills, California (“Project”) (including Common Area plants and landscaping costs) actually incurred by Landlord and only to the extent attributable to the Project and not to other property owned or operated by Landlord, all as determined in accordance with accepted principles of sound real estate management accounting practice, consistently applied.

Notwithstanding anything to the contrary set forth in this Lease, for purposes of this Lease, Operating Expenses shall not, however, include the following:
(1) costs incurred in connection with the original construction of the Project or in connection with any major change in the Project, such as adding or deleting floors, and costs of the design and construction of tenant improvements to the Premises or the premises of any tenants or other occupants and the amount of any allowances or credits paid to or granted to tenants or other occupants for any such design or construction; (2) depreciation, interest and principal payments on mortgages, bonds and other debt costs, if any, and any bad debt loss, rent loss, or reserves for bad debts or rent loss or any reserves of any kind;
(3) marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original development, subsequent improvement, or original or future leasing of the Project; (4) costs of any items to the extent Landlord receives reimbursement from insurance proceeds (such proceeds to be excluded from Operating Expenses in the year in which received) or from a third party;
(5) costs associated with the operation of the Landlord, as the same are distinguished from the costs of operation of the Project, including accounting, IT, supervision support, legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue, costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants;
(6) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-à-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager (but Operating Expenses shall include prorated wages and benefits of the property manager), above the level of chief engineer (i.e., prorated wages and benefits of the “facilities manager” and amount below that level would be included in Operating Expenses) or above the level of maintenance supervisor (and prorated wages and DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -7-
B0785-0001\2651492v2.doc
benefits of the property manager, chief engineer and maintenance supervisor may be included in Operating Expenses);
(7) late charges, penalties, liquidated damages, and interest or amount paid as ground rental or as rental for the Project by the Landlord; (8) costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants or other occupants in the Project or incurred in renovating or otherwise improving, repairing, decorating, painting or redecorating vacant space for tenants or other occupants of the Project; (9) costs of capital repairs and alterations, capital improvements and equipment and other capital expenses or expenditures, except for those that reduce Operating Expenses and then only to the extent of the actual cost savings achieved (in which case they shall be amortized on a straight line bases over their useful life); (10) any amount paid by Landlord or to the parent organization or a subsidiary or affiliate of the Landlord for supplies and/or services in the Project to the extent the same exceeds the costs of such supplies and/or services rendered by qualified, first-class unaffiliated third parties (using union labor) on a competitive basis; (11) any compensation paid to clerks, attendants or other persons in commercial concessions operated by or on behalf of the Landlord; (12) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment (i) which are not commercially reasonable either as to type or amount, and (ii) which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project (such as equipment leased to alleviate an interruption in utilities, including HVAC); (13) all items and services for which Tenant or any other tenant in the Project is obligated to reimburse Landlord, or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement; (14) electric power costs for which any tenant directly contracts with a public service company;
(15) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art; (16) rent for any office space occupied by Project management personnel;
(17) Landlord's general corporate overhead and general and administrative expenses (as opposed to costs increased by Landlord to operate, maintain, repair, DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -8-
B0785-0001\2651492v2.doc
and insure the Project, it being understood that the sums excluded under this item 17 are also excluded under item 5 above);
(18) costs incurred to comply with applicable Laws with respect to any Hazardous Material (including, without limitation, with respect to the monitoring, testing and reporting relating thereto) either (i) located on or below the surface of the Project, (ii) for asbestos or (iii) located in the Project; or costs incurred to comply with the Americans with Disabilities Act, as amended, when such notices are for conditions existing prior to the Term Commencement Date;
(19) costs arising from Landlord's charitable or political contributions; (20) any above Project standard cleaning, including, but not limited to construction cleanup or special cleanings associated with parties/events, the cost of any training or incentive programs, other than for tenant life safety information services, in-house legal and/or accounting as opposed to office building bookkeeping fees, legal fees and costs, settlements, judgments or awards paid or incurred because of disputes between Landlord and Tenant, Landlord and other tenants or prospective occupants or prospective tenants/occupants or providers of goods and services to the Project, and legal fees and costs concerning the negotiation and preparation of this Lease or any litigation between Landlord and Tenant; (21) any reserves retained by Landlord;
(22) costs for extra or after-hours HVAC, utilities or services which are provided to Tenant and or any occupant of the Project and as to which either (x) Tenant is separately charged, or (y) the same is not offered or made available to Tenant at no charge; (23) costs of any insurance deductibles or premiums with respect to insurance obtained or required to be obtained by Landlord with respect to events clearly caused by tenants or their officers, employees, contractors, or agents (because such costs are required to be paid by the applicable tenant pursuant to its lease); (24) any fee imposed in connection with the management of the Project that is in excess of the lesser of (i) a fair market management fee (based on comparable projects) or (ii) three percent (3%) of the gross revenue of the Project; (25) costs arising from the negligence, illegal acts or willful misconduct of Landlord or the Landlord Parties;
(26) in the event any facilities, services or utilities used in connection with the Project are provided from another building owned or operated by Landlord or vice versa, the costs incurred by Landlord in connection therewith shall be allocated to Operating Expenses by Landlord on a reasonably equitable basis;
(27) costs associated with material portions of the Common Areas dedicated for the exclusive use of other tenants of the Project, except to the extent Tenant is given its pro-rata share (rentable square feet in the Premises in relation to rentable square feet in the Project) of comparable Common Areas;
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(28) advertising and promotional expenses and costs of signs in or on the Project identifying the owner of the Project (except for costs for maintaining Project directories and Project standard suite signage) or other tenants’ signs, any entertainment, dining or travel expenses for any purpose, the costs of any flowers, gifts, balloons, etc. provided to any prospective tenants, Tenant, other tenants, and occupants of the Project, costs reimbursed to Landlord under any warranty carried by Landlord for the Project, which warranties Landlord shall use commercially reasonable efforts to enforce, costs of parties, costs of specialty clubs and services, and costs of magazine and newspaper subscriptions; (29) all assessments and premiums which are not specifically charged to Tenant because of what Tenant has done, which can be paid by Landlord in installments, shall be paid by Landlord in the maximum number of installments permitted by law and shall be included as Operating Expenses in the year in which the assessment or premium installment is actually paid;
(30) costs arising from any voluntary special assessment on the Project by any transit district authority or any other governmental entity having the authority to impose such voluntary assessment;
(31) any “validated” parking for any entity;
(32) costs of any “tap fees” or any sewer or water connection fees for the benefit of any particular tenant in the Project;
(33) costs of management software, computers and computer-related technology used to manage the Project;
(34) the cost of any janitorial, utilities or trash service supplied to any restaurant or retail tenant of the Project (provided that the foregoing shall not exclude from Operating Expenses the cost of janitorial service supplied by Landlord for the Common Areas); (35) the cost of any janitorial services provided to other tenants of the Project if Tenant elects by written notice to Landlord to provide its own janitorial services for the Premises (provided that the foregoing shall not exclude from Operating Expenses the cost of janitorial service supplied by Landlord for the Common Areas); and (36) the cost of any electrical or HVAC provided to other tenants or occupants of the Project to the extent Tenant is paying for its own use of such utilities directly.

Landlord shall (i) not make a profit by charging items to Operating Expenses that are otherwise also charged separately to others, and (ii) Landlord shall not collect Operating Expenses from Tenant and all other tenants/occupants in the Project in an amount in excess of what Landlord incurred for the items included in Operating Expenses plus a fair market management fee . Any refunds or discounts actually received by Landlord for any category of Operating Expenses shall reduce Operating Expenses in the applicable year (pertaining to such category of Operating Expenses).

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(ii) “Tax Expenses” shall include any form of assessment, license fee, license tax, business license fee, transit tax or fee, commercial rental tax, levy, charge, penalty (other than tax penalties, interest or late charges incurred as a result of Landlord’s negligence, inability or unwillingness to make payments when due) tax or similar imposition, imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage, transportation or other improvement or special assessment district thereof, as against any legal or equitable interest of Landlord in the Project and the Premises, or any portion thereof, including, but not limited to, the following:
(1) any tax on Landlord’s right to rent or right to other income from the Premises or as against Landlord’s business of leasing the Premises; (2) any assessment, tax, fee, levy or charge in substitution, partially or totally, of any assessments, taxes, fees, levies and charges that may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies and charges be included within the definition of Tax Expenses for the purposes of this Lease;
(3) any assessment, tax, fee, levy or charge allocable to or measured by the area of the Premises or the rent payable hereunder, including, without limitation, any gross receipts tax or excise tax levied by the state, city or federal government, or any political subdivision thereof, with respect to the receipt of such Rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof; and
(4) any assessment, tax, fee, levy or charge upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

Notwithstanding any provision of this Article to the contrary: (A) Tax Expenses shall not include (I) Landlord’s federal or state net income, franchise, inheritance or estate taxes gift taxes, capital stock taxes, excess profits taxes and other taxes to the extent applicable to Landlord's general or net income (as opposed to rents, receipts or income attributable to operations at the Project), (II) tax penalties incurred as a result of Landlord’s gross negligence, inability or unwillingness to make payments when due; (III) special assessments or special taxes initiated by Landlord as a means of financing improvements to the Project; (IV) any items paid by Tenant under Article 7 of this Lease; or (V) any amounts charged directly to Tenant or other tenants; and (B) there shall be no duplication of items included in Tax Expenses and items included in Operating Expenses.

If the Project is no longer owned by a governmental entity at any time during the Term, then Tenant shall have such rights to reasonably contest the validity or amount of Tax Expenses as are permitted by applicable Laws, at Tenant’s sole cost, and Landlord shall reasonably cooperate with Tenant in connection therewith (at no cost to Landlord), provided that no such contest shall in any manner limit Tenant’s obligation to pay Tenant’s Share of Tax Expenses as and when required under this Lease. Refunds of Tax Expenses shall be credited against Tax Expenses and refunded to Tenant regardless of when received, based on the year to which the refund is DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -11-
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applicable. All special assessments which may be paid in installments shall be paid by Landlord in the maximum number of installments permitted by law and not included in Tax Expenses except in the year in which the assessment is actually paid. Notwithstanding anything to the contrary contained herein, Tenant shall not be required to pay any increase in Tax Expenses resulting from any sale, refinancing or change in ownership in the Project occurring at any time during the Term (except that the foregoing shall not be construed to eliminate or reduce Tenant’s obligation under Article 6.3(a)(ii) to pay Tenant’s Share of the amount by which Tax Expenses in any property tax year after the property tax year in which the current Landlord sells the Project to a non-government entity exceeds Tax Expenses for the tax year in which the current Landlord sells the Project to a non-governmental entity, annualized to reflect taxes and assessments for a full tax year at the rate in effect after the reassessment following the sale or change of ownership to the non-governmental entity).
(b) Subject to Article 1.9 above, Tenant shall pay to Landlord as Additional Rent, in equal monthly installments, in advance, on or before the first (1st) day of each month, without prior demand and without offset, abatement or deduction, an amount per month estimated by Landlord in good faith on a category by category basis (the “Monthly Expense Payment”) for Tenant’s Share of Operating Expenses and Tax Expenses. On an annual basis (each such anniversary of Landlord’s election to no longer use the Fixed Amount Pass-Through), the Monthly Operating Expense Payment and Tax Expense payment payable during the twelve (12) months commencing upon and following such Adjustment Date shall be adjusted to reflect Landlord’s estimate of Tenant’s Share of Operating Costs and Tax Expenses for that twelve (12) month period, however, until Landlord provides a revised estimate, Tenant shall continue to make payments in the amounts previously estimated until Landlord gives Tenant such notice, and in no event, however, shall Tenant pay as Monthly Expense Payments an amount that is more than five percent (5%) greater than the previous year’s payments (which shall be annualized for purposes of such calculation if paid for less than a full calendar year. (c) As soon as reasonably practicable after the anniversary of the Rent Commencement Date and annually thereafter, Landlord shall furnish Tenant a statement on a category-by-category basis with respect to the preceding year, showing actual Operating Expenses (and if applicable under Article 6.3(a) above, actual Tax Expenses) and the total payments made by Tenant with respect thereto. Notwithstanding anything to the contrary contained herein, Tenant shall not be responsible for Tenant's Share of any Operating Expenses or Tax Expenses attributable to any year which are first billed to Tenant more than two (2) calendar years after the earlier of the expiration of the applicable year or the expiration or earlier termination of the Term, provided that in any event Tenant shall be responsible for Tenant's Share of Operating Expenses or Tax Expenses levied by any governmental authority or by any public utility companies at any time following the expiration or earlier termination of the Term which are attributable to any year (provided that Landlord delivers Tenant a bill for such amounts within two (2) years following Landlord's receipt of the bill therefor). Unless Tenant raises any objections to Landlord’s statement within ninety (90) days after it is given to Tenant, such statement shall conclusively be deemed correct and Tenant shall have no right thereafter to dispute such statement or any item therein or the computation of Tenant’s share thereof. In no event shall the payment by Tenant of any Operating Expenses or Tax Expenses, or any amount on account thereof, preclude Tenant from exercising its rights under this Article. If Tenant does object to such statement, Landlord shall provide Tenant and any accountant selected by Tenant DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -12-
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who is a duly licensed CPA with back-up books and records for the figures shown on the statement for Tenant to audit. In connection with the foregoing review, Landlord shall furnish Tenant with such reasonable supporting documentation relating to the subject statement as Tenant may reasonably request and Landlord will provide Tenant with reasonable space for such Tenant review and reasonable use of such available office equipment, but may charge Tenant for photocopies at Landlord's actual cost. If after such audit, Tenant still objects to Landlord's statement, the parties shall negotiate in good faith to resolve any disputes. In the event that following Tenant's review, Tenant and Landlord continue to dispute the amounts shown on Landlord's statement and Landlord and Tenant are unable to resolve such dispute, then either Landlord or Tenant may submit the matter to judicial resolution and the proper amount of the disputed items shown on such statement shall be determined by such judicial resolution. If the resolution of the parties' dispute with regard to the Additional Rent shown on the statement reveals an error in the calculation of Tenant's Share of Operating Expenses or Tax Expenses to be paid for such year, the parties' sole remedy shall be for the parties to make appropriate payments or reimbursements, as the case may be, to each other as are determined to be owing, plus interest at the Interest Rate from the date originally paid or owed. Any such payments shall be made within thirty (30) days following the resolution of such dispute. At Tenant's election, Tenant may treat any overpayments resulting from the foregoing resolution of such parties' dispute as a credit against Rent until such amounts are otherwise paid by Landlord. Tenant shall be responsible for all costs and expenses associated with Tenant's review, and Tenant shall be responsible for all reasonable audit fees of Tenant, as well as attorney's fees and related costs of Tenant (collectively, the "Costs"), provided that if the parties' final resolution of the dispute involves the overstatement by Landlord of Operating Expenses or Tax Expenses for such year in excess of five percent (5%), then Landlord shall be responsible for all Costs. This provision shall survive the termination of this Lease to allow the parties to enforce their respective rights hereunder. Any amounts due Landlord or Tenant shall be paid at the time and in the manner set forth below. Any objection of Tenant to Landlord’s statement and resolution of any dispute shall not postpone the time for the payment of any amounts due Tenant or Landlord based on Landlord’s statement, nor shall any failure of Landlord to deliver Landlord’s statement in a timely manner relieve Tenant of Tenant’s obligation to pay any amounts due Landlord based on Landlord’s statement except as specifically provided above (provided that in the event that such failure continues for a period of six (6) months following receipt of notice from Tenant, Tenant may elect to seek specific performance).

If Tenant’s Share of Operating Expenses and Tax Expenses, as finally determined for any consecutive 12-month period after any anniversary of the Term Commencement Date, exceeds the total payments made by Tenant on account thereof, Tenant shall pay Landlord the deficiency within twenty (20) days after Landlord’s delivery to Tenant of Landlord’s statement (provided however that Tenant’s Share of Operating Expenses and Tax Expenses including such deficiency shall not be more than five percent (5%) greater than Tenant’s Share of Operating Expenses and Tax Expenses of the prior year). If Tenant shall have overpaid, then Tenant’s excess payments shall be credited toward the Rent next due from Tenant under this Lease. For any partial calendar year at the end of the Term, Tenant’s Share of Operating Expenses and Tax Expenses shall be prorated on the basis of a 365-day year by computing Tenant’s Share for the entire year and then prorating such amount for the number of days during such year included in the Term. Notwithstanding the termination of this Lease, Landlord shall pay to Tenant or Tenant shall pay to Landlord, as the case may be, within twenty (20) days after Landlord delivers to DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -13-
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Tenant a final statement for the calendar year in which this Lease terminates, the difference between Tenant’s Share for that year, as finally determined by Landlord, and the total amount previously paid by Tenant on account thereof.

ARTICLE 7

SECURITY DEPOSIT
Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with Landlord the sum specified in Article 1.10 (“Security Deposit”), in cash which shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the term hereof. If Tenant defaults with respect to any provision of this Lease, including, but not limited to the provisions relating to the payment of rent, Landlord may (but shall not be required to) use, apply or retain all or any part of this Security Deposit for the payment of any rent or any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied Tenant shall, within five (5) days after written demand therefor, deposit additional cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount and Tenant’s failure to do so shall be a default under this Lease. Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within ninety (90) days following expiration of the Term. If Landlord transfers its interest in the Premises, Landlord shall transfer the cash Security Deposit to Landlord’s successor in interest. TENANT HEREBY WAIVES THE PROVISIONS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE AND AGREES THAT THE FOREGOING PROVISIONS OF THIS ARTICLE 7 SHALL GOVERN LANDLORD’S USE AND RETURN OF THE SECURITY DEPOSIT.

ARTICLE 8
TENANT’S CONDUCT OF BUSINESS

8.1 Permitted Use. Tenant shall use the Premises solely for the use specified in Article 1.11 and for no other use or purpose. Tenant shall conduct its operations in a manner that shall not disturb other tenants or create a nuisance.

8.2 [INTENTIONALLY OMITTED]

8.3 Tenant’s Signs. Tenant may install a sign (the "Name Sign") above or near their front door that is: (i) materially less prominent than the ground floor tenant’s sign; (ii) approved in advance by Landlord in writing (such approval not be unreasonably withheld), (iii) consists of Tenant’s name or Tenant’s fictitious business name that properly registered and in good standing with the County of Los Angeles; and (iv) complies with applicable laws and governmental approvals. Tenant shall not affix upon the exterior (or interior windows or doors) of the Premises any other sign, advertising placard, name, insignia, trademark, descriptive material or other like item (collectively, the “Exterior Signs”), unless the Exterior Signs: (i) comply with all DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -14-
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governmental requirements, and (ii) are approved by Landlord, in its proprietary capacity (and not as a part of governmental approval), in its sole and absolute discretion. All of the Exterior Signs, including the Name Sign, shall be erected by Tenant at its sole cost and expense, shall be professionally prepared, and Tenant shall maintain all of its Exterior Signs and Name Sign in good condition and repair during the Term. Prior to the expiration, or upon earlier termination of this Lease, as applicable, Tenant shall remove all of its Exterior Signs and Name Sign and restore the areas on which the Exterior Signs and Name Signs were located to their condition prior to the installation of the Exterior Signs, all at Tenant’s sole cost and expense.

8.4 Hours and Place for Deliveries. Except to the extent limited by the size of the doors of the Premises in the rear of the Premises and/or the size of the loading and unloading area, all deliveries (exclusive of United Parcel Service, U.S. Postal Service, Federal Express or other similar overnight or express courier services), loading, unloading and services to the Premises shall be accomplished within the alley serving or adjacent to the Project, if any alley so serves the Project. Deliveries shall occur at such hours as reasonably promulgated by Landlord, and in accordance with Exhibit “D”.

ARTICLE 9

MAINTENANCE, REPAIRS AND ALTERATIONS

9.1 Landlord’s Maintenance Obligations. Landlord shall maintain in good condition and repair: the structural components and foundations, roofs and exterior surfaces of the exterior walls of all the Project (exclusive of doors, door frames, door checks, windows, window frames, storefronts and storefront awnings), Common Areas and the electrical, plumbing, and all other utility lines located outside the Premises or in the Project floor or foundation, and all mechanical, electrical, life safety, plumbing, vertical transportation system, sprinkler systems and HVAC systems which do not exclusively service the Premises and the elevator serving the Premises (collectively, the "Project Systems"), except for improvements made by Tenant and damage caused by Tenant or its agents, contractors, employees, customers, and visitors.

9.2 Landlord’s Right of Entry. Landlord, its agents, contractors, servants and employees may enter the Premises following not less than twenty-four (24) hours prior written notice to Tenant (except in the event of an emergency, in which case no notice shall be required) and Landlord’s good faith efforts to coordinate such entry with Tenant’s on-site management so as to minimize interference with Tenant’s business operations (except in a case of emergency, in which case no notice shall be required): (a) to examine the Premises; (b) to perform any obligation or exercise any right or remedy of Landlord under this Lease; (c) to perform work necessary to comply with laws, ordinances, rules or regulations of any public authority or of any insurance underwriter; and (d) to access the roof for alteration, maintenance and replacement of telecommunication equipment.

New Cingular Wireless PCS, LLC will also be permitted to access the roof, using the existing rooftop access ladder in the Premises, from time to time, upon no less than twentyfour (24) hours prior written notice thereof from Landlord.

9.3 Tenant’s Maintenance Obligations. Except for the portions and components of the Premises to be maintained by Landlord as set forth in Article 9.1, Tenant, at its DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -15-
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expense, shall keep the Premises and all utility facilities and systems exclusively serving the Premises (“Tenant Utility Facilities”) in first-class order, condition and repair; provided, however, that Tenant shall have no right to paint the exterior or interior of the windows or doors without Landlord’s prior written consent. Tenant shall contract with a validly licensed service company for the regular (but not less frequently than quarterly) maintenance, repair and/or replacement (when necessary) of the heating, ventilating and air conditioning equipment serving the Premises (the “HVAC System”) and shall provide Landlord with a copy of such license and the applicable service contract within ten (10) days following execution of the applicable service contract but no later than thirty (30) days following the opening of Tenant’s business. If Landlord makes any repairs which Tenant is obligated to make pursuant to the terms of this Lease, Tenant shall pay the cost of such repairs to Landlord, as Additional Rent, promptly upon receipt of a bill from Landlord for same. Except as otherwise provided in this Lease, there shall be no abatement of Rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from any maintenance, repairs, alterations or improvements made or required to be made by Tenant.

Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect (including, without limitation, Sections 1941 and 1942 of the California Civil Code).

9.4 Alterations. After the initial Tenant Improvements described on Exhibit “B”, Tenant shall not make or cause to be made to the Premises or the Tenant Utility Facilities any addition, renovation, alteration, or reconstruction (collectively, “Alterations”) (i) costing in excess of Twenty-Five Thousand Dollars ($25,000.00), (ii) affecting the exterior appearance of the Project, fire sprinkler systems, exterior walls, the floor slab, or roof of the Premises, (iii) requiring or resulting in any penetration of the roof, demising walls or floor slab of the Premises, (iv) involving structural changes or additions, or (v) increasing the level of services or utilities supplied to the Project, without first obtaining the written consent of Landlord. Tenant shall give Landlord at least thirty (30) days’ prior written notice describing the Alterations in reasonable detail and including comprehensive plans and specifications for any material alterations or improvements, as applicable. Any request for consent to Alterations requiring consent shall be accompanied by three (3) complete sets of plans and specifications for the proposed Alterations suitable for submission to Landlord’s architect for evaluation and a statement of the identity of the contractor who will perform such Alterations. If Landlord’s consent is required for any Alterations, Tenant shall pay all reasonable out-of-pocket costs incurred by Landlord in the evaluation, as applicable, of the plans and specifications, including, but not limited to, Landlord’s general contractor’s, architects’ and engineers’ fees. In addition, as a condition to Landlord’s granting of its consent to any Alterations, Landlord shall have the right to approve the architect, contractors, subcontractors designing or performing such Alterations, which approval shall not be unreasonably delayed, withheld or conditioned and shall be granted or denied within fifteen (15) business days (provided that in any event Project standard subcontractors shall be used for work affecting structural portions, or base building mechanical and fire and life safety systems and utility systems so long as such subcontractors are competitively priced and reasonably available). All Alterations to be performed by Tenant in the Premises, including the delivery, storage and removal of materials, shall be reasonably scheduled through Landlord, and shall be performed in accordance with regulations imposed in good faith by Landlord. All Alterations (whether or not Landlord’s consent is required therefor) shall be completed in a good and workmanlike manner and in accordance with all applicable Laws. All Alterations requiring Landlord’s consent shall be completed in accordance with the approved plans and specifications DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -16-
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therefor. Promptly following the completion of any Alterations where the preparation of “asbuilt” plans would be customary for the particular Alterations performed, Tenant shall deliver to Landlord both a “hard” copy and a copy on CAD diskette of the “as-built” plans and specifications (including all working drawings) for such Alterations. Promptly following the completion of any Alterations for which any governmental permit, approval or sign-off is required under applicable Laws, Tenant shall deliver to Landlord a copy of signed-off permits, inspection cards or other documentation evidencing governmental approval of completion of the work. Unless identified as by Landlord as having to be removed prior to Lease termination pursuant to Article 20.4, All of Tenant’s Alterations including, but not limited to, light fixtures, floor coverings and partitions, but excluding trade fixtures and signs, shall be deemed to be the property of Landlord upon installation thereof. Within thirty (30) days after the completion of any Alterations, Tenant shall deliver to Landlord a set of “as built” plans depicting the Alterations as actually constructed or installed. If Tenant shall make any permitted Alterations, Tenant shall carry “Builder’s All Risk” insurance in an amount reasonably determined by Landlord covering the construction of such Alterations and such other insurance as Landlord may reasonably require. Any Alterations to the Premises which are required by reason of any future law, ordinance, rule, regulation or order of any governmental authority having jurisdiction over the Premises or the Project, or any future change in any such existing law, ordinance, rule, regulation or order, and which does not pertain to the structural portions of the Project or the Project Systems, shall be at the sole cost of Tenant. I Any inspection by Landlord of such Alterations shall in no event constitute Landlord’s approval of the work so performed, nor shall Landlord be responsible for or have any liability with respect to such inspections. If Tenant’s Alterations trigger (i) required improvements for disabled access (ii) required improvements to Project Systems (iii) any other required improvements to any other portion of the Project, such improvements shall be at Tenant’s sole cost.

ARTICLE 10
[INTENTIONALLY OMITTED]
ARTICLE 11
DAMAGE TO TENANT’S PROPERTY; WAIVER
Notwithstanding anything contained in this Lease to the contrary, Landlord or its agents and employees shall not be liable for (a) loss or damage to any property by theft or otherwise, or (b) any injury or damage to person or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Project or from pipes, appliances or plumbing work therein or from the roof, street, sub-surface or from any other place or resulting from dampness or any other cause whatsoever, except to the extent (i) resulting from the gross negligence or willful misconduct of Landlord or its contractors, agents, servants or employees or breach of this Lease by Landlord and (ii) not covered by the insurance maintained by Tenant (or which would not have been so covered if Tenant had maintained the insurance required to be maintained by Tenant pursuant to this Lease). Landlord or its agents shall not be liable for interference with light or other similar intangible property interests. Tenant shall give prompt notice to Landlord in case of fire or accidents in the Premises or the Project and of defects therein or in the fixtures or equipment located therein.

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ARTICLE 12

INSURANCE

12.1 Tenant’s Insurance. Tenant, at its sole cost and expense, commencing on the date Tenant is given access to the Premises, and continuing during the Term, shall procure, pay for and thereafter keep in full force and effect the following types of insurance, in at least the amounts and in the forms specified below:
(a) Commercial General Liability (CGL) with limits no less than Two Million Dollars ($2,000,000.00) per occurrence basis including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than Two Million Dollars ($2,000,000) per occurrence. Tenant shall maintain in force liability insurance, at all times during the term of this Lease and any renewal or extension thereof, which shall insure and indemnify Landlord, the City Council and each member thereof, and every officer and employee of Landlord against liability or financial loss resulting from any suits, claims or actions brought by any person or persons and from all costs and expense of litigation brought against Landlord, the City Council and every member thereof for any injury to persons and/or damage to property in, on or about the Premises by reason of the use or occupation by Tenant or by any other person or persons of the Premises and the activities of Tenant. (b) A policy or policies of Workers Compensation insurance as required by law, with a limit of not less than One Million Dollars ($1,000,000.00). (c) Property Insurance against all risk of loss at full replacement cost with no coinsurance penalty provision at Tenant’s cost and expense, shall be obtained and at all times during the term hereof maintain in effect covering (1) Tenant’s trade fixtures, furnishings, equipment, and inventory of merchandise located in the Premises; and (2) all alterations, additions, and changes made in or to the Premises during the term of this Lease at Tenant’s expense, providing protection to the extent of not less than one hundred percent (100%) of the insurable value of all said items against any peril included under insurance industry practices in the jurisdiction of the Premises within the classification “fire and extended coverage,” together with insurance against vandalism, malicious mischief, and sprinkler leakage or other sprinkler damage, if sprinklers are installed, and including “use and occupancy” and/or “business interruption” coverage. Tenant hereby waives any and all rights of recovery against Landlord for any loss occurring to such items on account of fire or other casualty, and the aforesaid policies of insurance shall contain appropriate provision recognizing this release by Tenant and waiving all right of subrogation by the insurance carrier. The proceeds of such insurance, so long as this Lease remains in effect, shall be used to repair or replace the items so insured in the event of loss on account of fire or other casualty.
(d) Plate Glass Insurance: Plate glass insurance covering all plate glass on the Premises at full replacement value; provided that Tenant shall be permitted to self-insure plate glass insurance.
(e) Insurance covering all of Tenant’s Improvements (Article 4.2) and Tenant’s Alterations (Article 9.4), in an amount not less than their full replacement value from time to time, including replacement cost endorsement, providing protection against any peril included DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -18-
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within the classification Fire and Extended Coverage, sprinkler damage, vandalism, malicious mischief and such other additional perils as covered in an “all risks” standard insurance policy.

Any policy proceeds shall be used for the repair or replacement of the property damaged or destroyed unless this Lease shall cease and terminate under the provisions of Article 14. (f) Business Interruption Insurance: Commercially reasonable business interruption insurance.

12.2 Restrictions on Use. Tenant shall not use or permit the Premises to be used, nor do or permit any act to be done, which may increase the existing rates of insurance upon the building in which the Premises are located, or which may cause the cancellation of any insurance policy covering the Premises. If any act on the part of Tenant or use of the Premises by Tenant shall cause directly or indirectly any increase of Landlord’s insurance expense, the additional expense shall be paid by Tenant to Landlord upon demand. Such payment by Tenant shall not limit Landlord in the exercise of any other rights or remedies. Tenant shall not sell or permit to be kept, used or sold in or about the Premises any article which may be prohibited by California Standard Forms of fire insurance policies. Tenant, at Tenant’s sole expense, shall comply with any and all requirements pertaining to the use of the Premises, of any insurance organization or company, which compliance may be necessary for maintenance of reasonable fire, extended coverage, public liability, and other insurance upon the Premises.

12.3 Additional Insureds. Landlord, the City Council and each member thereof, and every officer and employee of Landlord shall be named as an additional insured on Tenant’s liability and property policies. Said policies shall be issued by an insurer rated in Best’s Insurance Guide with a financial rating of A+ VII or better. Said policies shall provide that the insurance coverage shall not be cancelled or reduced by the insurance carrier without Landlord having been given thirty (30) days’ prior written notice thereof by such carrier. Tenant shall not cancel or reduce said insurance coverage.

12.4 Certificate(s) of Insurance. At all times during the term of this Lease and prior to taking possession of the Premises, Tenant shall maintain on file with Landlord a certificate of insurance (on Landlord’s standard form of Certificate of Insurance) issued by the insurance carrier or carriers and showing that the aforesaid insurance policies are in effect in the amounts above provided and if requested by Landlord, a copy of each insurance policy. Notwithstanding any other provision to the contrary contained in this Lease, Tenant shall not have the right to take possession of the Premises until such certificate or certificates and insurance policies are filed with the City Clerk.

12.5 Landlord Cure Right. If Tenant does not keep the insurance required by this Lease in full force and effect, Landlord may take out the necessary insurance and pay the premium thereon, and the repayment thereof shall be paid by Tenant as Additional Rent within ten (10) days after written demand by Landlord.

12.6 Waiver of Subrogation. Tenant’s insurance shall be primary to coverage available to Landlord. Tenant hereby waives any rights of subrogation against the Landlord.

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12.7 Indemnity. “Landlord” for the purposes of this Article 12 shall mean and include Landlord, the City of Beverly Hills and their respective directors, officers, shareholders, agents and employees. To the fullest extent permitted by law, Tenant covenants with Landlord that Landlord shall not be liable for any damage or liability of any kind or for any injury to or death of persons or damage to property of Tenant or any other person from any cause whatsoever related to the use, occupancy or enjoyment of the Premises by Tenant or any person thereon or holding under Tenant. Tenant shall pay for, defend (with an attorney reasonably approved by Landlord), indemnify, and save Landlord harmless against and from any real or alleged damage or injury and from all claims, judgments, liabilities, losses, costs and expenses, including reasonable attorneys’ fees and costs, arising out of or connected with Tenant’s use of the Premises and its facilities, or any repairs, Alterations or improvements (including original improvements and fixtures specified as Tenant’s Initial Improvements) which Tenant may make or cause to be made upon the Premises, any breach of this Lease by Tenant. The obligations to indemnify set forth in this Article shall include all reasonable attorneys’ fees, litigation costs, investigation costs and court costs and all other costs, expenses and liabilities incurred by the indemnified party from the first notice that any claim or demand is to be made or may be made.

All obligations under this Article shall survive the expiration or termination of this Lease.

ARTICLE 13
DAMAGE

13.1 Insured Casualty. In the case of damage by fire or other perils covered by insurance, the following provisions shall apply:
(a) Within a period of sixty (60) days after all applicable permits have been obtained (which permits Landlord shall promptly apply for and diligently seek), Landlord shall commence such repair, reconstruction and restoration of the Premises and the Project which has been affected by fire or other casualty, and shall diligently prosecute the same to completion; provided, however, that Tenant, at its cost, shall repair and restore all items of Tenant’s Initial Improvements and Tenant’s Alterations and replace its stock in trade, trade fixtures, furniture, furnishings and equipment. Tenant shall commence this work promptly upon delivery of possession of the Premises to Tenant and shall diligently prosecute same to completion. (b) Notwithstanding the foregoing, if destruction of the Premises occurs during the last two (2) years of the Term and the estimated time to repair the Project is more than the lesser of 180 days or one half (1/2) of the remaining Term under the Lease Term (as the same may have been or is so extended by Tenant within 30 days after such a casualty), Landlord and Tenant shall each have the right to terminate this Lease. In each case of a termination under this Article, the termination right shall be exercised by the terminating party giving written notice to the other party within thirty (30) days after the date of destruction. If Landlord terminates this Lease, then Landlord shall be entitled to retain any insurance proceeds payable by reason of such destruction; provided, however, Tenant shall have the right to receive any insurance proceeds which are paid for the unamortized value of any leasehold improvements made to the Premises and paid for by Tenant without reimbursement from Landlord. (c) Notwithstanding anything to the contrary contained herein, if Tenant is unable to reasonably operate its business from the Premises for the use specifically permitted under this DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -20-
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Lease as a result of a casualty at the Premises and Landlord does not commence repairs within ninety (90) days, fails to thereafter prosecute the repairs with reasonable diligence, or fails to complete the repairs within two hundred seventy (270) days after the date of such casualty and the damage was not caused by Tenant or its agents, employees or contractors, then Tenant shall have the right to terminate this Lease by delivering a written termination notice to Landlord, which termination notice shall be delivered to Landlord within thirty (30) days after the applicable event, but before the substantial completion of the restoration work by Landlord. (d) Notwithstanding anything to the contrary contained in this Lease, if, prior to the commencement of any repair or restoration work by Landlord, it is estimated (which estimate shall be delivered to both Landlord and Tenant in a written notice) by an independent and reputable contractor mutually selected by the parties that the damage to the Premises cannot reasonably be completed within two hundred seventy (270) days after the date of damage, then each party shall have the right to terminate the Lease within thirty (30) days after receiving such written estimate provided that such party (and its agents, employees and contractors) did not cause the damage.

13.2 Uninsured Casualty. If the Premises or the Project is materially damaged as a result of any casualty not covered by the insurance specified in Article 12.4, Landlord, within ninety (90) days following the date of such damage, shall commence repair, reconstruction or restoration of the Premises to the extent provided herein and shall diligently prosecute the same to completion, or Landlord may elect within said ninety (90) days not to so repair, reconstruct or restore the damaged property, in which event, at Landlord’s option, this Lease shall cease and terminate upon the expiration of such ninety (90) day period. In the event Landlord elects to restore the Premises, Tenant shall have the same repair, restoration and replacement obligations it has pursuant to Article 13.1(a). Notwithstanding the foregoing, if Tenant is unable to reasonably operate its business from the Premises for the use specifically permitted under this Lease as a result of an uninsured casualty at the Premises and Landlord has elected to restore the Premises but Landlord has not substantially completed such repair or restoration of the Premises within one (1) year after the date of such casualty, then provided neither Tenant nor its agents, employees or contractors caused the damage, Tenant shall have the right to terminate this Lease by delivering a written termination notice to Landlord, which termination notice shall be delivered to Landlord within thirty (30) days after the expiration of such one (1) year period but before the substantial completion of the restoration work by Landlord. Notwithstanding anything to the contrary contained in this Lease, if, prior to the commencement of any repair or restoration work by Landlord, it is estimated (which estimate shall be delivered simultaneously to both Landlord and Tenant in a written notice) by an independent and reputable contractor mutually selected by the parties that the damage to the Premises cannot reasonably be completed within one (1) year after the date of damage, then Tenant and Landlord shall each have the right to terminate the Lease within thirty (30) days after receiving such written estimate.

13.3 Distribution of Insurance Proceeds. In the event of the termination of this Lease pursuant to this Article 13, all proceeds from the insurance carried by Landlord pursuant to Article 12.4 and all insurance covering Tenant’s Initial Improvements and Tenant’s Alterations, but excluding proceeds for trade fixtures, merchandise, signs and other personal property, shall be disbursed and paid to Landlord.

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13.4 Abatement. The Base Rent and Additional Rent payable hereunder shall be abated proportionately with the degree to which Tenant’s use of the Premises is impaired from the time of the occurrence of the casualty until the date on which Tenant again operates its business in the Premises provided that neither Tenant nor its agents, employees or contractors caused the damage. Tenant shall continue the operation of its business on the Premises during any such period to the extent reasonably practicable from the standpoint of prudent business management.

Tenant shall not be entitled to any compensation or damages from Landlord for loss of use of the whole or any part of the Premises or the building of which the Premises are a part, Tenant’s personal property or any inconvenience or annoyance occasioned by such damage, repair, reconstruction or restoration, except to the extent (a) such damage or loss is caused by the negligence or gross misconduct of Landlord, and (b) Tenant has not waived compensation, claims, liabilities or other obligations for such damage or loss pursuant to Article 12.5 above.

13.5 Waiver of Termination. Tenant waives any statutory rights of termination which may arise by reason of any partial or total destruction of the Premises.

ARTICLE 14

EMINENT DOMAIN

14.1 Taking. The term “Taking”, as used in this Article 14, shall mean an appropriation or taking under the power of eminent domain by any public or quasi-public authority or a voluntary sale or conveyance in lieu of condemnation but under threat of condemnation.

14.2 Total Taking. In the event of a Taking of the entire Premises or the entire Common Area, this Lease shall terminate and expire as of the date possession is delivered to the condemning authority and Landlord and Tenant shall each be released from any liability accruing pursuant to this Lease after the date of such termination.

14.3 Partial Taking. If there is a Taking of a material portion of the Premises or the Common Area and, regardless of the amount taken, the Premises is not, in Tenant’s sole but reasonable business judgment, suitable for the continued operation of Tenant’s business, then Tenant may terminate this Lease, upon giving notice in writing of such election to Landlord within thirty (30) days after receipt by Tenant from Landlord of written notice that a portion of the Premises and/or the Common Area has been so appropriated or taken. In each case, the termination of this Lease shall be effective as of the date Tenant is required to vacate all or a portion of the Premises and/or the Common Area.

14.4 Award. The entire award or compensation in any such condemnation proceeding, whether for a total or partial Taking, or for diminution in the value of the leasehold or for the fee, shall belong to and be the property of Landlord. Without derogating the rights of Landlord under the preceding sentence, Tenant shall be entitled to recover from the condemning authority such compensation as may be separately awarded by the condemning authority to Tenant or recoverable from the condemning authority by Tenant in its own right and separately allocated to the taking of trade fixtures and equipment owned by Tenant, the expense of removing and relocating Tenant’s trade fixtures and equipment, interruption or damage to Tenants’ business, the value of Tenant’s leasehold estate, or the unamortized cost of Tenant improvements paid for by Tenant.

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14.5 Continuation of Lease. In the event of a Taking, if Landlord and Tenant elect not to terminate this Lease as provided above (or have no right to so terminate), Landlord agrees, at Landlord’s cost and expense as soon as reasonably possible after the Taking, to restore the Premises and/or the Common Area necessary for Tenant to reasonably operate from the Premises (to the extent of the condemnation proceeds) on the land remaining to a complete unit of like quality and character as existed prior to the Taking and, thereafter, Base Rent and Additional Rent payable by Tenant hereunder shall be reduced on an equitable basis, taking into account the relative value of the portion taken as compared to the portion remaining, and Landlord shall be entitled to receive the total award or compensation in such proceedings.

ARTICLE 15

ASSIGNMENT AND SUBLETTING

15.1 Landlord’s Consent Required. Tenant shall not assign, sublet, enter into franchise, license or concession agreements, change ownership or voting control, mortgage, encumber, pledge, hypothecate or otherwise transfer (including any transfer by operation of law, but excluding Permitted Transfers) all or any part of this Lease or the Premises (collectively “Transfer”) without first procuring the written consent of Landlord in Landlord’s sole and absolute discretion. A sale of fifty percent (50%) or more of the ownership interests in Tenant, whether in one transaction or a related series of transactions, shall constitute an assignment of this Lease. If Tenant requests Landlord’s consent to an assignment of this Lease or subletting of all or part of the Premises, Tenant shall submit to Landlord, in writing, the name of the proposed assignee or subtenant. Landlord’s consent to an assignment or subletting shall not be required if the assignee or subtenant is (a) an “affiliate” (as defined below) of the Tenant, or (b) an entity which acquired all or substantially all the assets or outstanding stock of Tenant through a merger or acquisition, and the assignee or subtenant agrees in writing to be bound by the terms of the Lease. For purposes of this Lease, the term “affiliate” means any person or entity which controls, is controlled by or is under common control with Tenant in each case as shown by reasonable evidence delivered to Landlord ((a) or (b) being hereinafter referred to as a “Permitted Transfer”). Additionally, a transfer of ownership interests in Tenant by reason of the death or divorce of an owner of the Tenant shall not be deemed an assignment or subletting for purposes of this Lease provided Tenant promptly notifies Landlord of the transfer.

15.2 Procedures. Should Tenant desire to enter into a Transfer, Tenant shall request, in writing, Landlord’s consent to the proposed Transfer at least forty-five (45) days before the intended effective date of the proposed Transfer, which request shall include any information reasonably requested by Landlord to evaluate the proposed Transfer. A consent to one (1) Transfer by Landlord shall not be deemed to be a consent to any subsequent Transfer to any other party.

15.3 Standard for Consent After Tenant Event of Default. For purposes of Landlord’s consent after an Event of Default by Tenant and Landlord’s election to keep this Lease in effect, Tenant agrees that Landlord may only refuse its consent to the proposed transfer on reasonable grounds, and (by way of example and without limitation) Tenant agrees that it shall be reasonable for Landlord to withhold its consent if any of the following situations exist or may exist: (a) the proposed transferee’s financial condition, net worth or liquidity is less than the financial condition, net worth or liquidity of Tenant as of the date of the request for transfer or is DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -23-
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inadequate to support all of the financial and other obligations of Tenant under this Lease; (b) the business reputation or character of the proposed transferee is not reasonably acceptable to Landlord; or (c) the proposed transferee is not likely to conduct on the Premises a business of a quality commensurate with the neighborhood.

15.4 No Release; Form. No Transfer whether with or without Landlord’s consent, shall relieve Tenant from its covenants and obligations under this Lease. Any Transfer shall be evidenced by an instrument in form and content satisfactory to Landlord and executed by Tenant and the Transferee.

15.5 Processing Fees. In connection with any request for Landlord’s consent to an assignment or sublease as required under the provisions of this Article, Tenant shall pay a processing fee to Landlord equal to $1,500, adjusted in accordance with the following. The processing fee amount shall be adjusted on each anniversary of the Effective Date (each, an “Adjustment Date”), as set forth below, using these definitions:
(i) The term “Adjustment Index” shall mean the Consumer Price Index for the month of April (the first Adjustment Index shall be the Consumer Price Index for April 2022).
(ii) The term “CPI Increase” shall mean the percentage increase in the Consumer Price Index, calculated by subtracting the Prior Index from the Adjustment Index and then dividing the result by the Prior Index.
(iii) The term “Consumer Price Index” shall mean the Consumer Price Index for All Urban Consumers for the Los Angeles – Long Beach – Anaheim statistical area (CPI-U) (1982-84 =100) (the “Index”) published by the United States Department of Labor, Bureau of Labor Statistics.
(iv) The term “Prior Index” shall mean, on each Adjustment Date, the Consumer Price Index used as the Adjustment Index on the prior Adjustment Date (or in the case of the first adjustment, the Consumer Price Index for the month of April 2022).

On each Adjustment Date, the then-existing processing fee shall be increased (but not decreased) by the CPI Increase (rounded to the nearest hundredth).

If the Consumer Price Index is changed so that the base year differs from that used for the Prior Index, the Index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during the term of this Lease, such other governmental index or computation with which it is replaced shall be used.

15.6 Transfer Rent. If Tenant shall enter into a Transfer hereunder (other than a Permitted Transfer), Tenant shall pay to Landlord one hundred percent (100%]) of any “Transfer Premium” (as hereinafter defined). In the event of a subletting, “Transfer Premium” shall mean all rent, Additional Rent or other consideration payable by such subtenant to Tenant or on behalf of Tenant in connection with the subletting in excess of the rent, Additional Rent and other sums payable by Tenant under this Lease during the term of the sublease on a per square foot basis if DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -24-
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less than all of the Premises is subleased, less the following costs actually incurred and paid by Tenant to secure the sublease to the extent they are reasonable: (i) improvement allowances; (ii) broker’s commissions; and (iii) attorneys’ fees and costs (“Transfer Expenses”). In the event of any Transfer other than a subletting, “Transfer Premium” shall mean any consideration paid by the assignee to Tenant in connection with such Transfer which Landlord reasonably determines is allocable to the leasehold value of this Lease, less such Transfer Expenses. If part of the transfer premium shall be payable by the Transferee or subtenant other than in cash, then Landlord’s share of such non-cash consideration shall be in such form as is reasonably satisfactory to Landlord. Tenant may recover its Transfer Expenses prior to paying any Transfer Premiums to Landlord provided Tenant shall have first provided Landlord with reasonable written evidence of the Transfer Expenses actually paid by Tenant.

ARTICLE 16

DEFAULTS

16.1 Events of Default. The occurrence of any one or more of the following events shall constitute an “Event of Default” by Tenant under this Lease:
(i) failure to pay the Base Rent, any Additional Rent, or the Security Deposit within five (5) days after written notice from Landlord to Tenant; (ii) failure to perform any other of the promises, covenants or agreements of Tenant contained in this Lease for more than thirty (30) days after written notice from Landlord (provided, however, if the default cannot be rectified or cured within such thirty (30) day period, the default shall be deemed to be rectified or cured if Tenant, within such thirty (30) day period, shall have commenced to rectify or cure the default and shall thereafter diligently and continuously prosecute same to completion);
(iii) an assignment or subletting by Tenant without Landlord’s prior written consent when such consent is required by this Lease; or (iv) failure to maintain the insurance required of Tenant under this Lease; and (v) notice from a governmental authority of a violation by Tenant of legal restrictions on hours or noise, whether or not “cured”, more than twice in any twelve (12) month period.

16.2 Landlord Remedies. Any notice required to be given by Landlord above shall be in lieu of, and not in addition to, any notice required under Section 1161 of the Code of Civil Procedure of California or any similar, superseding statute. Upon the occurrence of an Event of Default by Tenant, Landlord may elect to terminate this Lease and to re-enter and take possession of the Premises and remove all persons therefrom, and/or exercise all or any of the rights and remedies afforded Landlord by California law including, but not limited to, the remedies provided under California Civil Code Sections 1951.2 or 1951.4. Pursuant to California Civil Code Section 1951.2, the damages Landlord may recover against Tenant include, but are not limited to, 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 for the same period that the Tenant proves could be reasonably avoided. Pursuant to California Civil Code Section 1951.4, DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 -25-
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Landlord may continue this Lease in effect after Tenant’s breach of this Lease and abandonment of the Premises and recover rent as it becomes due, if Tenant has the right to sublet the Premises or assign this Lease, subject only to reasonable limitations. Landlord hereby agrees that in the event Landlord elects the remedy under California Civil Code Section 1951.4, Landlord will not unreasonably withhold its consent to assignment and subletting by Tenant, and Article 15.3 shall apply.

16.3 Default by Landlord. Landlord shall not be in default hereunder unless Landlord fails to perform the obligations required of Landlord within thirty (30) days after written notice by Tenant to Landlord specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. Notwithstanding any contrary provision contained in this Lease, Landlord shall not be liable under any circumstances for any indirect or consequential damages or any injury or damage to, or interference with, Tenant’s business, including, but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use; provided, that the foregoing is not intended to be a waiver by Tenant of any rights it may have to condemnation awards in the event of a condemnation by Landlord of Tenant’s interest under this Lease or Tenant’s business.

ARTICLE 17

SUBORDINATION, ATTORNMENT AND ESTOPPEL CERTIFICATES

17.1 Subordination. So long as the lienholder agrees in writing to be bound by the obligations of the Landlord arising after the lienholder acquires title to the Premises, and provided such lienholder also executes a commercially reasonable nondisturbance agreement in favor of the Tenant, then upon written request of Landlord, Landlord’s mortgagee, or the beneficiary of a deed of trust of Landlord or a lessor of Landlord, Tenant will subordinate its rights pursuant to this Lease in writing to the lien of any mortgage, deed of trust or the interest of any lease in which Landlord is the lessee and to all advances made or hereafter to be made upon the security thereof.

17.2 Attornment. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Landlord encumbering the Premises, or should a lease in which Landlord is the lessee be terminated, Tenant shall upon the request of the purchaser or lessor attorn to the purchaser or lessor under such lease upon any foreclosure, sale or lease termination and recognize the purchaser or lessor as Landlord under this Lease, provided that the purchaser or lessor shall acquire and accept the Premises subject to this Lease.

17.3 Estoppel Certificates. Upon not less than ten (10) days prior notice from Landlord or Tenant to the other, Landlord or Tenant, as the case maybe shall execute, acknowledge and deliver to the requesting party, a reasonable estoppel certificate certifying that this Lease is unmodified and in full force and effect and that the other party is not in default (or stating how any of the foregoing is not true) and certifying the dates to which rental or other sums due hereunder have been paid in advance (“Estoppel Certificate”).

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17.4 Subordination of Landlord’s Liens. Landlord hereby subordinates all statutory and contractual landlord’s liens to any liens or security interests covering Tenant’s inventory, or financed fixtures, furniture or equipment of Tenant in favor of bona-fide third-party lenders providing financing to Tenant (including purchase-money financing). Additionally, Tenant shall be permitted to remove personal property from the Premises without Landlord’s consent (free and clear of any landlord’s liens) whenever Tenant has not previously received from Landlord a written notice of default which remains uncured.

ARTICLE 18

MATTERS OF RECORD
Tenant agrees that it and all persons in possession or holding under it will conform to and will not violate the terms of any covenants, conditions, restrictions, easements and any other matters currently of record. Tenant acknowledges that Tenant has had an opportunity to obtain and review a title report and title exception documents from a title insurance company selected by Tenant.

ARTICLE 19

UTILITIES AND SERVICES
Tenant shall pay directly to the appropriate utility company all charges for utility services supplied to Tenant that are separately metered. If no such (sub)meter exists, then Tenant shall reimburse Landlord within ten (10) days after written demand from time to time for Tenant’s share utility charges allocable to the Project. In that regard, Tenant is responsible for directly contracting utility services including, but not limited to those shown in the table below.

Service Responsible Party for Directly Contracting
Electric Utility Tenant
Water/Sewer Utility Tenant
Gas Utility Tenant
Trash Pickup Services Tenant
Fire and Life Safety Monitoring Tenant
Janitorial Tenant
Regardless of the entity which supplies any of the utility services, Landlord shall not be liable for any failure or interruption of any utility or service. Except as otherwise provided herein, no failure or interruption of any utility or service shall entitle Tenant to terminate this Lease or discontinue making payments of Rent payable by Tenant under this Lease; provided, however, that Landlord shall use good faith efforts to restore such service to the extent the restoration of the same is not the obligation of Tenant, the utility company or other third party.

Tenant shall be responsible for obtaining its own janitorial services for the Premises.

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ARTICLE 20

MISCELLANEOUS

20.1 Hazardous Materials. During the Term of this Lease, Tenant, at its sole cost and expense, shall comply with all laws relating to the storage, use, handling and disposal of hazardous, toxic or radioactive matter, including, without limitation, petroleum products, asbestos, and those materials identified in Sections 66680 and 66685 of Title 22 of the California Administrative Code, Division 4, Chapter 30 (“Title 22”), as amended from time to time (collectively, “Hazardous Materials”); provided, however, that the foregoing shall not apply to Hazardous Materials in, on or surrounding the Project not released by Tenant or its contractors, employees, agents or customers. Tenant shall notify Landlord and provide to Landlord a copy or copies of any environmental entitlements or inquiries related to the Premises. The clean-up and disposal of any Hazardous Materials released onto or about the Project by Tenant or its agents, contractors or employees shall be performed by Tenant at Tenant’s sole cost and expense and shall be performed in accordance with all applicable laws, rules, regulations and ordinances, pursuant to a site assessment and removal/remediation plan prepared by a licensed and qualified geotechnical engineer and submitted to and approved in writing by Landlord prior to the commencement of any work. The foregoing notwithstanding, Landlord in Landlord’s sole and absolute discretion may elect, by written notice to Tenant, to perform the clean-up and disposal of such Hazardous Materials from the Premises and/or the Project. In such event, Tenant shall pay to Landlord the actual cost of same upon receipt from Landlord of Landlord’s written invoice therefor. Notwithstanding any other term or provision of this Lease, Tenant shall permit Landlord or Landlord’s agents or employees to enter the Premises at any time, upon at least one (1) business day’s notice, to inspect, monitor and/or take emergency or long-term remedial action with respect to Hazardous Materials on or affecting the Premises or to discharge Tenant’s obligations hereunder with respect to such Hazardous Materials when Tenant has failed, after demand by Landlord, to do so. All costs and expenses incurred by Landlord in connection with performing Tenant’s obligations hereunder shall be reimbursed by Tenant to Landlord within thirty (30) days of Tenant’s receipt of written request therefor.

To the Landlord’s knowledge, neither the Project nor the land on which it is located contain any Hazardous Material the presence of which violates applicable law, except that Tenant acknowledges that the Project may contain quantities of Hazardous Materials found in commercial real estate materials. To Landlord’s knowledge, there are no underground storage tanks for petroleum products or Hazardous Materials, active or abandoned, located on the land on which the Project is located. Landlord agrees not to cause any Hazardous Materials to be produced, stored, kept, discharged, or released in or about the Project other than reasonable quantities of such Hazardous Materials as may typically be found in commercial construction or cleaning products or used by retail tenants, and that are used and disposed of in accordance with applicable laws.

Tenant shall defend, indemnify, and hold Landlord harmless from and against any and all claims, liabilities, losses, costs, and expenses (including, without limitation reasonable attorneys’ fees) incurred or suffered by Landlord as a result of Tenant’s or its invitees’, licensees’, contractors’, agents’ or employees’ storage, use, handling, disposal or release of Hazardous Materials in or about the Premises or the Project.

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20.2 Notices. Every notice, demand or request (collectively “Notice”) required hereunder or by law to be given by either party to the other shall be in writing. Notices shall be given by United States certified mail, postage prepaid, return receipt requested, or by same-day or overnight private courier, addressed to the party to be served at the address indicated in Article 1.13 or such other address as the party to be served may from time to time designate in a Notice to the other party. The delivery of a Notice shall be deemed made within 3 days after deposit into the U.S. mail with respect to certified mail or within 1 business day after deposit with an overnight private courier for overnight delivery. Copies of any Notice shall be sent to the addresses, if any, designated for service of copies of Notices in Article 1.13.

20.3 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, governmental restrictions, governmental regulations, governmental controls, judicial orders, enemy or hostile governmental action, civil commotion, fire or other casualty, and other causes (except financial) beyond the reasonable control of the party obligated to perform construction obligations (“Force Majeure” delay), shall delay the deadline for the performance by that party for a period equal to the prevention, delay or stoppage; however, this Article shall not be applied to delay any payments to be made by any party.

20.4 Termination and Holding Over. Upon the expiration or earlier termination of the Term, Tenant shall peaceably and quietly surrender the Premises broom-clean, reasonable wear and tear and any damage to the Premises, which Tenant is not required to repair pursuant to Article 14 or Article 15 excepted. Subject to the foregoing, Tenant, at Tenant’s sole cost, shall remove from the Premises all of Tenant’s trade fixtures, furniture, equipment, signs, and additions, and immediately repair any damage occasioned to the Premises by reason of such removal so as to leave the Premises in a neat and clean condition. Tenant shall additionally, at Tenant’s sole cost, remove all of Tenant’s Initial Improvements and/or Tenant’s Alterations made after Tenant’s Initial Improvements that Landlord identified as having to be removed at the time of approving Tenant’s Initial Improvements or Tenant’s Alterations. Should Tenant hold over in the Premises beyond the expiration or earlier termination of this Lease, the holding over shall not constitute a renewal or extension of this Lease or give Tenant any rights under this Lease. In such event, Landlord may, in its sole discretion, treat Tenant as a tenant at will, subject to all of the terms and conditions in this Lease except that the Base Rent (and any fixed operating expense payments) shall be increased to one hundred fifty percent (150%) of the Base Rent (and fixed operating payments) in effect immediately prior to the expiration or earlier termination of this Lease.

20.5 Miscellaneous Provisions.
(a) There are no oral or written agreements or representations between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all previous negotiations, arrangements, representations, brochures, agreements and understandings, if any, between Landlord and Tenant. No provision of this Lease may be amended except by an agreement in writing signed by Landlord and Tenant,
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(b) Subject to the terms of this Lease, all rights and obligations of Landlord and Tenant under this Lease shall extend to and bind the respective heirs, executors, administrators and the permitted concessionaires, successors, subtenants and assignees of the parties. (c) Any waiver by either party of a breach by the other party of a covenant of this Lease shall not be construed as a waiver of a subsequent breach of the same covenant. (d) Except where another rate of interest is specifically provided for in this Lease, any amount due from either party to the other under this Lease which is not paid when due, shall bear interest at the rate per annum (“Interest Rate”) equal to the prime interest rate published from time to time by the Wall Street Journal plus two (2) percentage points (but in no event to exceed the maximum lawful rate) from the date such amount was originally due to and including the date of payment.
(e) If Tenant or Landlord is a municipal corporation, corporation, partnership or limited liability company, each individual executing this Lease on behalf of the municipal corporation, corporation, partnership or limited liability company (in his/her representative capacity only) represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of the municipal corporation, corporation, partnership or limited liability company and that this Lease is binding upon the municipal corporation, corporation, partnership or limited liability company.
(f) This Lease shall be governed by and construed in accordance with the laws of the State of California without giving effect to the choice of law provisions thereof. (g) Tenant waives any and all rights of redemption granted under any present and future laws in the event Landlord obtains the right to possession of the Premises by reason of the violation by Tenant of any of the covenants and conditions of this Lease or otherwise. (h) In the event that, at any time after the Effective Date of this Lease, either Landlord or Tenant shall institute any action or proceeding against the other relating to the provisions of this Lease or any default hereunder, the party not prevailing in such action or proceeding shall reimburse the prevailing party for its actual attorneys’ fees, and all fees, costs and expenses incurred in connection with such action or proceeding, including, without limitation, any post-judgment fees, costs or expenses incurred on any appeal or in collection of any judgment.
(i) Tenant shall observe faithfully and comply with, and shall cause its employees and invitees to observe faithfully and comply with, reasonable and nondiscriminatory rules and regulations governing the Project as may from time to time be promulgated by Landlord. (j) Should Landlord sell, exchange or assign this Lease (other than a conditional assignment as security for a loan), then Landlord, as transferor, shall be relieved of any and all obligations on the part of Landlord accruing under this Lease from and after the date of such transfer provided that Landlord’s successor in interest shall assume such obligations from and after such date. Written notice of any such transfer shall be given to Tenant.

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(k) Notwithstanding anything contained in this Lease to the contrary, it is expressly understood and agreed that any judgment against Landlord resulting from any default or other claim under this Lease shall be satisfied only out of the net rents, issues, profits and other income actually received from the operation or sale of the Project, and Tenant shall have no claim against Landlord or any of Landlord’s personal assets for satisfaction of any judgment with respect to this Lease.
(l) If any part of the Premises is at any time subject to a first mortgage or a first deed of trust, and this Lease or the rentals due from Tenant hereunder are assigned by Landlord to a mortgagee, trustee or beneficiary (“Assignee” for purposes of this clause (l) only) and Tenant is given written notice of the assignment including the post office address of Assignee, then Tenant shall also give written notice of any default by Landlord to Assignee, specifying the default in reasonable detail and affording Assignee the same amount of time as provided in this Lease for Landlord (starting from the date Assignee receives such notice) to make performance for and on behalf of Landlord. If and when Assignee has made performance on behalf of Landlord, the default shall be deemed cured.
(m) Tenant shall pay all costs for work performed by or on account of it and shall keep the Premises and the Project free and clear of mechanics’ liens or any other liens or stop notices. Tenant shall give Landlord immediate notice of any lien or stop notice filed against the Premises or the Project as a result of any work of improvement performed by or on behalf of Tenant. Tenant shall immediately cause any lien or stop notice to be discharged or removed of record by either paying the amount thereof or recording a statutory lien release bond in an amount equal to one hundred fifty percent (150%) of the amount of said lien or stop notice, or such other amount as may be adequate to cause the lien or stop notice to be released as an encumbrance against the Premises and the Project.
(n) Tenant shall be required to utilize Landlord’s roofing contractor in the event Tenant or Tenant’s Agents desire to penetrate the ceiling of the Premises for any repairs, alterations or improvements permitted to be made to the Premises by Tenant pursuant to the terms of this Lease that might affect the ceiling; provided, however, if Landlord and Tenant reasonably determine that Landlord’s roofing contractor’s rates are not reasonably competitive, Tenant shall have the right to utilize any other licensed and reputable roofing contractor reasonably acceptable to Landlord.
(o) Landlord and Tenant each represents and warrants that it has not had any dealings with any realtors, brokers or agents in connection with the negotiation of this Lease, except as may be specifically set forth in Article 1.14, and Landlord agrees to pay all sums due to its broker described in Article 1.14. Tenant shall defend, indemnify and hold Landlord harmless from any claims, costs, expenses or liabilities for any compensation, commission or charges to other realtors, brokers or agents claiming by, through or on behalf of Tenant with respect to this Lease and/or the negotiation hereof.
(p) All of the exhibits referenced in this Lease are incorporated herein by this reference.

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(q) Notwithstanding anything contained in this Lease to the contrary, Tenant acknowledges that Landlord is acting in its proprietary capacity, is entering into and complying with this Lease, and that nothing contained in this Lease shall require Landlord, in its capacity as a governmental entity, to act in any predetermined manner in connection with its actions as a governmental entity, as opposed to its actions as a contracting party pursuant to this Lease. (r) Provided an Event of Default by Tenant does not occur, Tenant shall have the right of quiet enjoyment of the Premises free from interference by Landlord or by any person or entity claiming rights granted by Landlord.
(s) Tenant shall faithfully observe and comply with the Rules and Regulations attached hereto as Exhibit “D” that Landlord shall from time to time promulgate and/or modify.

The Rules and Regulations (and modification thereto) shall be binding upon the Tenant upon delivery of a copy of them to the Tenant. Landlord shall not be responsible to Tenant for the violation or non-performance by any other tenant or occupant of the Project of their leases or of any of said Rules and Regulations. However, Landlord will not enforce any Rules and Regulations in a discriminatory manner.
(t) If any provision of this Lease is held or adjudicated to be invalid or unenforceable for any reason, each such portion or provision shall be severed from the remaining portions or provisions of this Lease and the remaining portions or provisions shall be unaffected and remain in full force and effect.
(u) Concurrently with the execution and delivery of this Lease, Tenant shall also execute, acknowledge and deliver to Landlord a Memorandum of Lease in the form attached hereto as Exhibit “C” for recording. Landlord’s City Manager may sign such Memorandum on behalf of Landlord. Tenant shall not record this Lease, any notice of other memorandum of this Lease. Upon the expiration or any earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord a termination of such recorded Memorandum of Lease and/or quitclaim deed in the form prepared by Landlord and submitted to Tenant. (v) This Lease may be executed by using DocuSign and may be delivered by Landlord to Tenant to the email address for Tenant set forth below.

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IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease on the day and year first above written.

LANDLORD:

CITY OF BEVERLY HILLS
By:

Lili Bosse, Mayor
ATTEST:

Huma Ahmed, City Clerk
APPROVED AS TO FORM:
_____________________________________
Laurence S. Wiener, City Attorney
APPROVED AS TO CONTENT:
_____________________________________
George Chavez, City Manager
_____________________________________
Sharon L’Heureux Dressel, Risk Manager
TENANT:

SUN COAST MERCHANDISE CORP.,
a California corporation
By: ___________________________
Dilip K. Bhavnani, COO
Email address: [email protected]
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “A”

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EXHIBIT “A”

DIAGRAM OF PREMISES
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “A”

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Demising Wall
to be
Constructed
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “A”

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EXHIBIT “A-1”

LANDLORD WORK

1. Landlord shall construct a rear wall with an emergency exit door in the second floor corridor adjacent to telecomm-tenant room to demise Tenant’s Premises from common emergency exit lobby.

2. Landlord shall complete ground floor wall that separately demises Tenant’s Premises from common emergency exit lobby.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “B”

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EXHIBIT “B”
TENANT’S INITIAL IMPROVEMENTS
A. GENERAL PROCEDURES
Changes to the structure or the systems incorporated or planned in/for the facility necessitated by “Tenant’s Initial Improvements” (as defined in Paragraph F below) shall be first approved by Landlord and at the request of Landlord, shall be designed and performed by Tenant and its architect in consultation with Landlord’s Architect and/or engineers at Tenant’s cost.

Tenant shall prepare all design and working drawings and specifications relating to completion of the initial improvements by Tenant and the letting of contracts relating to Tenant’s Initial Improvements and the supervision and completion of Tenant’s Initial Improvements Tenant must obtain approvals for its work from the applicable building department and all other authorities having jurisdiction (including Landlord) before commencing work. Tenant shall be responsible for payment of all fees and charges incurred in obtaining said approvals and for obtaining a certificate of occupancy.

Tenant shall ensure that all the provisions and conditions contained or imposed in this Exhibit “B” are observed and performed by all designers, contractors and trades engaged by Tenant.

Tenant shall utilize professional designers and contractors. Tenant agrees to utilize plumbing, electrical or mechanical subcontractors reasonably approved by Landlord.

B. PLANS AND SPECIFICATIONS FOR TENANT’S INITIAL

IMPROVEMENTS
So that construction of the Initial Improvements may proceed without delay and in an efficient manner, the following provisions shall apply:

1. Tenant’s Designers; Provision of Drawings. All designers employed by Tenant shall be familiar with the project working drawings to the extent necessary to complete the required architectural, mechanical and electrical working drawings and specifications.

Landlord shall make such relevant drawings that are in Landlord’s possession available for inspection at the address set forth for Landlord elsewhere.

2. Submission of Preliminary Plans and Specifications. Tenant will provide Landlord with three (3) printed sets of preliminary plans and specifications for the Initial Improvements which shall demonstrate design intent and shall be subject to the approval of Landlord prior to Tenant’s preparation of detailed working drawings and design specifications.

The preliminary plans and specifications shall be accompanied by sample boards of finishes or an artistic rendering.

3. Approval of Preliminary Plans and Specifications. Within fifteen (15) business days after receipt of such preliminary plans and specifications, Landlord shall notify Tenant either of its approval thereof or of any changes required by it. If changes are required, DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “B”

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Tenant, within ten (10) business days after being notified of the required changes by Landlord, shall submit amended plans and specifications to Landlord for approval.

4. Submission of Final Plans and Specifications. Within thirty (30) days after Landlord’s approval of Tenant’s preliminary plans and specifications, Tenant shall submit three (3) printed sets of final plans and specifications and such other information as may be necessary for Tenant’s Initial Improvements to be approved.

5. Approval of Final Plans and Specifications. Within ten (10) days after receipt by Landlord of Tenant’s final plans and specifications, Landlord shall notify Tenant of its approval thereof or indicate any changes required, in which case Tenant shall resubmit for approval amended plans and specifications within an additional ten (10) business days after Tenant is notified of the required changes by Landlord.

6. Final Approved Plans. Upon Landlord’s written approval of Tenant’s final plans under Paragraph B.5 above, Tenant shall submit such approved plans to the appropriate governmental authority for plan checking and the issuance of a building permit, together with all necessary fees incidental to the Initial Improvements. If such governmental authority requires any changes or amendments to such plans prior to the issuance of a building permit, Tenant shall, at its sole cost and expense, promptly change such plans pursuant to such governmental request and submit such changed plans to Landlord for its approval. Landlord shall have ten (10) business days within which to approve or disapprove such changed plans. In the event Landlord disapproves such changed plans, Landlord shall provide Tenant with written objections, and Tenant shall have five (5) business days within which to amend such plans and incorporate Landlord’s required changes. Upon Landlord’s approval of the changed plans, Tenant shall promptly resubmit such plans to the appropriate governmental authority for plan checking and the issuance of a building permit as previously set forth in this Paragraph B.6.

Upon Tenant’s receipt of a building permit and any other necessary governmental approvals for the Initial Improvements based upon plans approved by Landlord and such governmental authority (the “Final Approved Plans”), Tenant shall furnish Landlord three (3) printed copies one (1) digital PDF copy and one (1) digital Computer Aided Design (“CAD”) copy of the Final Approved Plans, and shall immediately commence construction of the Initial Improvements and shall diligently pursue such construction to completion in accordance with the Final Approved Plans.

7. Working Drawings and Specifications. Each set of working drawings and specifications shall be of uniform size to a minimum scale of 1/8” to each foot and shall include, but not be limited to, the following:
(1) floor plans;
(2) reflected ceiling plans;
(3) specifications, identification and colors of materials for all plans and work;
(4) interior elevations and finish schedule;
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “B”

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(5) plans and specifications for all electrical, mechanical, and plumbing work, including details and performance information relating to all fixtures, equipment and any underfloor services, including conduit runs to be recessed or buried in the floor; and (6) sign details in compliance to Landlord’s sign criteria (available upon request).

C. GENERAL REQUIREMENTS FOR TENANT’S INITIAL

IMPROVEMENTS

1. Architect, General Contractor and Subcontractor Approval. Tenant shall competitively bid the Tenant Improvements with no less than three (3) reputable, licensed and bonded general contractors. Landlord shall have the right to reasonably approve, the architect and all contractors and subcontractors designing or performing construction of the Tenant Improvements and who will be working in the Project. All contractors and subcontractors who will perform such work must have in force workers’ compensation insurance in the amount required by law and such other employer’s and comprehensive general liability insurance in accordance with the standards set forth in Article 12.1(a) of the Lease (but with a liability limit of not less than Two Million Dollars ($2,000,000.00) for contractors and One Million Dollars ($1,000,000) for subcontractors), and such other insurance as Landlord reasonably deems necessary to supplement the insurance coverage provided for in Article 12.1(a) of the Lease.

2. Workmanship and Materials. The Initial Improvements shall be constructed with good workmanship and with first class materials, which shall all be of a high quality and shall be conforming to the best standards of practice, and shall not be in contravention of the laws, codes or regulations of the municipality or any other authority having jurisdiction.

3. Proof of Insurance. Before commencing Tenant Improvements, Tenant shall furnish written proof to Landlord that the insurance required under Article C1 above has been obtained and is in force. Landlord shall be named as an additional insured in such insurance.

4. Access and Rules. Tenant and its contractors and subcontractors shall be entitled to have access to the Premises through the rear service door wherever possible, in order to execute construction of the Initial Improvements, subject to compliance with all reasonable rules, regulations and stipulations which Landlord or its contractor may make from time to time.

These rules, regulations and stipulations may include, but shall not be limited to, matters relating to:
(a) the handling and storage of material and equipment; (b) hours of work and coordination of activity;
(c) use of the facilities and utilities;
(d) schedule of work;
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(e) deliveries;
(f) clean-up of work and the disposition of refuse; and (g) appearance of construction site.

5. Refuse Removal. Tenant shall at all times keep the Premises and all other areas clear of all waste materials and refuse caused by itself; its suppliers, contractors or by their work. Tenant shall remove all waste materials and refuse directly from the Premises and shall deposit them in places or in receptacles designated by Landlord. Landlord may require Tenant to clean up on a daily basis, and shall be entitled to clean up at Tenant’s expense if Tenant fails to comply with Landlord’s reasonable requirements in this respect.

At the completion of the Initial Improvements, Tenant shall leave the Premises clean and to the satisfaction of Landlord and shall remove all tools, equipment and surplus materials from the Premises and the Project and remove all waste material and refuse from the Premises and deposit them in places or in receptacles designated by Landlord. The final clean-up shall include the cleaning of all lighting fixtures, millwork units, storefronts and space which may be affected by the work.

6. Damage by Tenant. Any damage caused by Tenant’s contractor or subcontractors employed on Tenant’s Initial Improvements to any work of the structure or the systems incorporated in the facility or to any property of Landlord or of other tenants shall be repaired by Landlord’s contractor to the satisfaction of Landlord and Landlord may recover from Tenant the costs so incurred by Landlord.

7. Failure to Perform Work. If Tenant’s contractor neglects to carry out the work properly or fails to perform any work required by or in accordance with the approved plans and specifications, Landlord, after ten (10) days written notice to Tenant and Tenant’s contractor, may, without prejudice to any right or remedy Landlord may have, complete the work, remedy the defaults or make good any deficiencies and recover the costs incurred from Tenant.

8. Security. Tenant shall be entirely responsible for the security of the Premises and all construction areas during construction and Landlord shall not be liable for any loss or damage suffered by Tenant.

9. Fire Protection. Tenant shall maintain and keep on the Premises at all times during construction and the term of the Lease, a suitable portable fire extinguisher for Class A, B and C fires and shall comply with any additional requirements and regulations imposed by the fire marshal and all other appropriate governmental agencies.

10. Indemnification. Tenant shall indemnify, defend and hold harmless Landlord from and against any and all claims, liabilities, losses, costs, expenses and damages arising out of work done by Tenant or its contractors and Tenant shall promptly cause to be removed any liens filed against title to the Premises/Property.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “B”

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11. Performance of Construction. Tenant shall perform its work expeditiously and efficiently and shall complete the same so as to permit Tenant to open for business as soon as reasonably possible.

D. WORK DONE BY LANDLORD FOR TENANT
Except in connection with the Landlord Work, any equipment or work provided by Landlord for or at the request of Tenant, shall be at the expense of Tenant and shall be paid upon request. The cost of such equipment or work shall without limitation include labor, material, applicable taxes, all architectural, engineering and contractor’s fees in connection therewith and a supervision fee equal to ten percent (10%) of the aggregate cost of such equipment or work. Landlord shall not be entitled to a supervision fee for Landlord’s review and approval of the Initial Improvements to the extent the work is conducted by Tenant or Tenant’s contractors, agents and suppliers.

E. NON-COMPLIANCE.

1. Non-Compliance. If Tenant does not comply with the provisions of the Lease or any other agreement relative to the construction or occupation of the Premises, including this Exhibit “B”, Landlord, in addition to and not in lieu of any other rights or remedies, shall have any or all of the following rights at its discretion:
(a) to declare all fees, charges and other sums payable by Tenant to Landlord pursuant to this Exhibit “B” to be rent and to be collectible as rent under the provisions of the Lease; or
(b) to declare and treat Tenant’s noncompliance as a default or breach of covenant under this Lease and exercise any right available under the provisions of this Lease, including the right of termination.

2. Event of Termination. In any event of termination pursuant to the above provision, Landlord may retain for its own use without payment therefor all or any of Tenant’s Initial Improvements which has been commenced, installed or completed to the date of such termination.

F. TENANT’S INITIAL IMPROVEMENTS
Except for the Landlord Work, Tenant will, at its expense, but subject to the provision of this Exhibit “B”, provide, furnish and install within the Premises all finishing, fixturing, architectural, electrical and mechanical work to complete the construction of the Premises in accordance with the preliminary plans and specifications and the Final Approved Plans and to equip the Premises ready for Tenant’s use and occupancy in accordance with the use specifically permitted in Article 1.11 of the Lease (all such work is referred to herein as “Tenant’s Initial Improvements”) including, but not limited to, the following:

1. Signs. Signing, including lighting thereof, in accordance with applicable governmental requirements. Prior written approval for the design must be obtained from Landlord.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “B”

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2. Electrical Installation. The total electrical installation within the Premises shall conform to applicable codes. If the drywall, gypsum board or other material, if any, selected by Landlord to face the demising walls is removed by Tenant for the purpose of installing Tenant’s electrical services or having them inspected, then such gypsum board or other material shall be replaced by Tenant.

3. Telephone Services. All distribution and extensions of telephone conduit within the Premises and all intercom, communication, burglar alarms and signal systems required by Tenant.

4. Plumbing. All plumbing, piping, equipment, fixtures, etc., to the specified project standards established by the Architect required to extend and connect plumbing services from fixtures to point of connection provided by Landlord for water service, including provision for hot water that may be required by Tenant, except that with respect to sewer services, Tenant shall be responsible for coring the slab opening(s) to access the sewer line and for extending the sewer line as necessary to suit Tenant’s requirements. If water inlet service is in excess of those provided (if any) by the base building system are required, Tenant may at the discretion of Landlord, be required to provide metering. If required by applicable building codes or regulations, Tenant shall install any additional washroom fixtures not supplied as Landlord’s Work. If the gypsum board or other material, if any installed to face the demising walls is removed by Tenant for the purpose of installing Tenant’s plumbing services or having them inspected, then such gypsum board or other materials shall be replaced by Tenant.

5. Sprinklers. Modifications and relocation of sprinkler system layout to suit Tenant’s requirements. Any such revision to the sprinkler system layout shall be done by Landlord’s sprinkler consultant/contractor to ensure conformity to insurance underwriting requirements and any work necessitated thereby performed by Landlord’s contractor at Tenant’s expense.

6. Fire Protection. Any firefighting, fire prevention, safety and emergency equipment or lighting in and about the Premises, additional to that included in the base system provided by Landlord, required by any authority having jurisdiction or Tenant’s or Landlord’s insurance provider(s).

7. Interior Finishing. All other work, interior finishes and installation, including, without limiting the generality thereof, interior walls of materials selected by Tenant, faced with dry wall or gypsum board or other materials selected by Tenant, ceilings, if required, floor covering, painting, show window enclosures and display platforms, partitions, special wall and ceiling finishes, trade fixtures and security vaults, and all requirements of licensing, health and other authorities having jurisdiction to the specified project standards established by the Architect. Access panels shall be provided in ceilings where removable tile ceiling systems are not used for access to equipment which may be located above such ceilings.

8. Gas. Natural gas, if available to the Property and serving the Premises, will be provided at a central distribution point. Provided Tenant has received prior written approval of Landlord to use gas upon the Premises, Tenant may provide for additional gas piping and metering to the Premises.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “B”

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9. Additional Capacity. If Tenant requires additional electrical capacity or additional telephone, air handling or air conditioning capacity or any other increased services, Tenant must notify Landlord in writing within the time limit for submitting Tenant’s plans and specifications and Tenant will need to complete such work at its sole cost and expense, subject to Landlord’s review and approval of plans.

10. Specific Restrictions.
(a) Except to the extent required in connection with the approved final plans, under no circumstances shall Tenant or its contractor at any time be permitted to drill or cut conduit, pipe sleeves, chases, duct equipment, openings in the floor, columns, walls or roofs of the Project. Any work of this type required by Tenant must be authorized by the Landlord in writing (which may be evidenced by the approval of the final plans) and if Landlord so elects, performed by Landlord’s contractor at Tenant’s expense. (b) No suspended loads will be permitted from the underside of the roof structure without written approval by Landlord.
(c) Arrangements for the storage and removal of perishable garbage, to the satisfaction of Landlord, must be provided.
(d) Mounting of burglar alarms and signal systems on the exterior walls of the Premises or the Building shall require prior written consent of Landlord. Individual antenna of any nature on the roof of the Building is prohibited.

G. PREVAILING WAGE INDEMNITY
Tenant shall defend, indemnify and hold Landlord harmless from and against any and all claims, liabilities, losses, damages, costs and expenses arising from any failure by Tenant to pay (i) pay prevailing wages for all Tenant Work (but not the Landlord Work) in accordance with Section 1720, et seq. of the California Labor Code; and (ii) otherwise comply with the provisions of Sections 1773.8, 1775, 1776, 1777.5, 1777.6 and 1813 of the California Labor Code and all other applicable laws and regulations with respect to prevailing wages; and (iii) as required by the prevailing wage laws, obtain payment and performance bond(s) for the Tenant Work.

H. PRE-APPROVED TENANT WORK
Notwithstanding any provision to the contrary, the following Tenant Work, consisting of minimal non-structural design and decorating changes, is agreed and deemed approved under the terms of this Exhibit B. Tenant may, at its own cost and expense, and if it so chooses, perform the following Pre-Approved Tenant Work. The Pre-Approved Tenant Work consists as follows:

1. Removal of the non-structural “reception area” room partition on the second floor.

2. Removal, repair and/or replacement of floor covering(s) on the first and second floor, inclusive of the stairwell.

3. Painting of any interior wall with commercial grade paint in any neutral color.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “C”

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EXHIBIT “C”

FORM OF MEMORANDUM OF LEASE
(Attached.)
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “C”

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RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

City of Beverly Hills
455 North Rexford Drive
Beverly Hills, California 90210
Attention: City Clerk

SPACE ABOVE THIS LINE FOR RECORDER'S USE
The undersigned declare that this Memorandum of Lease is exempt from Recording Fees pursuant to California Government Code Section 27383 and exempt from Documentary Transfer Tax pursuant to California Revenue and Taxation Code Section 11922.

MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (this “Memorandum”) is dated as of _______, 2022, and is entered into by and between SUN COAST MERCHANDISE CORP., a California corporation (“Tenant”), and the CITY OF BEVERLY HILLS (“Landlord”).

RECITALS
A. Tenant and Landlord have entered into that certain Office Lease dated April 26, 2022 (the “Lease”), pursuant to which Landlord has agreed to lease and demise to Tenant, and Tenant has agreed to lease and accept from Landlord, a portion (the “Premises”) of that certain building located in the City of Beverly Hills, County of Los Angeles, State of California, at 239 South Beverly Drive. The Premises are more particularly described in the Lease.

B. Landlord and Tenant now desire to enter into this Memorandum to comply with applicable law requiring that municipal leases be recorded.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant agree as follows:

1. Lease. Landlord leases and demises to Tenant, and Tenant hereby leases and accepts from Landlord, the “Premises” described in the Lease for a term, at the rental rates and upon the other terms and conditions set forth in the Lease, which are incorporated herein by this reference.

2. Purpose. This Memorandum is prepared for the purposes of recordation only and in no way modifies the terms and conditions of the Lease.

3. Counterparts. This Memorandum may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall be deemed to be one and the same instrument.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “C”

B0785-0001\2651492v2.doc
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Lease as of the date first written above.

LANDLORD:

CITY OF BEVERLY HILLS
By:

George Chavez, City Manager
TENANT:

SUN COAST MERCHANDISE CORP.,
a California corporation
By: ___________________________
Dilip K. Bhavnani, COO
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “C”

B0785-0001\2651492v2.doc
State of California )
County of Los Angeles )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “C”

B0785-0001\2651492v2.doc
State of California )
County of Los Angeles )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “E”

B0785-0001\2651492v2.doc
EXHIBIT “D”

RULES AND REGULATIONS

1. Except as may be specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice shall he installed or displayed on any part of the outside or inside of the Project (except within the Premises) without the prior written consent of Landlord. Tenant shall not place anything against or near exterior windows or doors which may appear unsightly from outside the Premises or which are visible from the exterior of the Premises (other than approved window coverings, automobiles or other merchandise or displays consistent with Tenant's permitted uses of the Premises). Landlord shall have the right to remove, at Tenant’s expense and with 24 hours’ prior written or oral notice, any sign installed or displayed in violation of this rule.

2. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators or stairways of the Project. The halls, passages, exits, entrances, elevators, escalators and stairways are not open to the general public, but are open, subject to reasonable regulations, to Tenant’s business invitees. Landlord shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of Landlord would be prejudicial to the safety and interest of the Project and its tenants. Neither Tenant nor any employee or invitee of Tenant shall go upon the roof of the Project.

3. Tenant shall cooperate with Landlord in maintaining the Common Areas. All cleaning and janitorial services for the Common Areas shall be provided exclusively through Landlord.

4. At Landlord’s request, as a part of the Tenant Improvements, Tenant shall install new locks in, and re-key, the Premises, and in such event, Tenant shall deliver a copy of a key to all such locks to Landlord upon installation thereof. In addition, upon the termination of its tenancy, Tenant shall deliver to Landlord the keys to all doors and locks in the Premises.

5. All contractors and technicians rendering any service to Tenant shall be referred to Landlord for approval (which approval shall not be unreasonably withheld, conditioned or delayed) and supervision prior to performing any such service. This applies to all work performed in the Project, including but not limited to, installation of telephone and telegraph equipment and electrical devices and installations affecting floors, walls, woodwork, windows, ceilings and any other physical portion of the Project. None of Tenant’s contractors or subcontractors shall be entitled to (1) display identification or other signage at the Project, or (2) use the passenger elevators at the Project.

6. No deliveries shall be made which materially interfere with the operation of the Project.

No outside food vendors shall be permitted within the Project except for making of specific deliveries of previously ordered items to the Premises or the premises of another tenant.

7. Landlord shall have the right to prescribe the weight, size and position of all equipment, materials, furniture or other property brought into the Project. Heavy objects shall, if considered necessary by Landlord, stand on such platforms as determined by Landlord to be necessary to properly distribute the weight, which platforms shall be provided at Tenant’s expense. The DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “D”

B0785-0001\2651492v2.doc
persons employed to move such equipment in or out of the Project must be acceptable to Landlord. Landlord will not be responsible for loss of, or damage to, any such equipment or other property from any cause, and all damage done to the Project by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

8. Except as set forth in the Lease, Tenant shall not use or keep in the Premises any kerosene, gasoline or inflammable or combustible fluid or material other than those limited quantities necessary for the operation or maintenance of equipment. Tenant shall not use or permit to be used in the Premises any foul or noxious gas or substance, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, odors or vibrations, nor shall Tenant bring into or keep in or about the Premises any birds or animals.

9. Tenant shall not use any method of heating or air conditioning other than that installed by Landlord, except for supplemental air conditioning systems installed in accordance with the provisions of the Lease.

10. Tenant agrees to cooperate fully with Landlord to assure the most effective operation of the Project’s heating and air conditioning and to comply with any governmental energy-saving rules, laws or regulations. Tenant shall keep corridor doors closed.

11. Landlord reserves the right, exercisable upon thirty (30) days prior written notice to Tenant, to change the name and/or street address of the Project.

12. Tenant shall close and lock the doors of its Premises before Tenant and its employees leave the Premises. Tenant shall be responsible for any damage or injuries sustained by other tenants or occupants of the Project or by Landlord for noncompliance with this rule.

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

14. Tenant shall not use the Premises for any business or activity other than that specifically provided for in this Lease.

15. Tenant shall not install any radio or television antenna, loudspeaker or other devices on the roof(s) or exterior walls of the Project. Tenant shall not interfere with radio or television broadcasting or reception from or in the Project or elsewhere.

16. Tenant shall not deface the Premises or any part thereof, except in accordance with the provisions of the Lease pertaining to Alterations. Landlord reserves the right to direct electricians as to where and how telephone and telegraph wires are to be introduced to the Premises. Tenant shall not cut or bore holes for wires, except in accordance with the provisions of the Lease pertaining to Alterations. Tenant shall not affix any floor covering to the floor of the Premises in any manner except as approved by Landlord to the extent required by the provisions of the Lease DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “D”

B0785-0001\2651492v2.doc
pertaining to Alterations. Tenant shall repair any damage resulting from noncompliance with this rule.

17. Canvassing, soliciting and distribution of handbills or any other written material, and peddling in the Project are prohibited, and Tenant shall cooperate to prevent such activities.

18. Landlord reserves the right to exclude or expel from the Project any person who, in Landlord’s judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Project.

19. Tenant shall store all its trash and garbage within its Premises or in other facilities provided by Landlord. Tenant shall not place in any trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with reasonable directions issued from time to time by Landlord.

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

21. Tenant’s requirements will be attended to only upon appropriate application to the Project management office by an authorized individual. Employees of Landlord shall not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee of Landlord will admit any person (Tenant or otherwise) to any office without specific instructions from Landlord.

22. There shall be no smoking within the Project or immediately adjacent to Project entrances (except in areas, if any, designated therefor by Landlord).

23. Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant.

24. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease.

25. Upon written notice to Tenant, Landlord reserves the right to rescind any of these Rules and Regulations and to make future Rules and Regulations as, in its judgment, may from time to time be needed for safety, comfort and security, for care and cleanliness of the Project and for the preservation of good order therein which Rules and Regulations shall not be unreasonably or discriminatorily modified or enforced in a manner which shall materially interfere with the conduct of Tenant’s Permitted Use from the Premises or Tenant’s use of or access to the Premises. Tenant agrees to abide by all such Rules and Regulations herein above stated and any additional rules and regulations which are adopted and of which Tenant has received written notice.

26. Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s employees, agents, customers, invitees and guests.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “D”

B0785-0001\2651492v2.doc

27. Landlord reserves the right to charge as additional Rent to Tenant, any extra costs incurred by Landlord as a result of Tenant’s violation of these Rules and Regulations.

DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “E”

B0785-0001\2651492v2.doc
EXHIBIT “E”

NOTICE OF LEASE TERM/RENT DATES
To: Suns Coast Merchandise Corp.
239 South Beverly Drive
Beverly Hills, CA 90212
Re: Office Lease dated April 26, 2022 between the City of Beverly Hills (“Landlord”), and Sun Coast Merchandise Corp. (“Tenant”) for Premises in the building at 239 South Beverly Drive, Beverly Hills, California.

Ladies and Gentlemen:

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

1. Landlord delivered possession of the premises on _______, 2022.

2. The Term Commencement Date is _______. (Article 1.7)

3. The Rent Commencement Date is _______. (Article 1.7)

4. The Initial Term shall end on _______. (Article 1.6)

5. Your rent checks should be made payable to City of Beverly Hills at 455 North Rexford Drive, Attn: Cashier, Beverly Hills, California 90210. Tenant is also highly encouraged to use Landlord’s online payment portal, CommercialCafé, at https://tenantportal.beverlyhills.org/.

Landlord:

CITY OF BEVERLY HILLS
By: __________________
Print Name: ______________
Title: __________________
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Exhibit “E”

B0785-0001\2651492v2.doc
Agreed to and Accepted
as of _______, 2022.

Tenant:

SUN COAST MERCHANDISE CORP.

By: ______________________
Print Name: ________________
Title: _____________________
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 B0785-0001\2651492v2.doc
DocuSign Envelope ID: 20DA17F5-2396-4224-803E-400A08B73A56 Certificate Of Completion
Envelope Id: 20DA17F523964224803E400A08B73A56 Status: Sent Subject: Please DocuSign: Lease with Sun Coast Merchandise Corp. at 239 South Beverly Drive Source Envelope:

Document Pages: 61 Signatures: 3 Envelope Originator:

Certificate Pages: 3 Initials: 0 Jonathan Gernes
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
455 N. Rexford Drive
Beverly Hills, CA 90210
[email protected]
IP Address: 104.175.193.255
Record Tracking
Status: Original
4/20/2022 4:58:35 PM
Holder: Jonathan Gernes
[email protected]
Location: DocuSign
Signer Events Signature Timestamp
Bruce Galloway for
[email protected]
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Signed by link sent to [email protected]
Using IP Address: 208.87.234.201
Sent: 4/21/2022 9:19:43 AM
Resent: 4/21/2022 9:19:44 AM
Viewed: 4/21/2022 9:35:31 AM
Signed: 4/21/2022 9:35:43 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Dilip Bhavnani
[email protected]
Coo
Sun Coast Merchandise Corp.

Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Signed by link sent to [email protected]
Using IP Address: 75.104.87.25
Sent: 4/21/2022 9:19:43 AM
Resent: 4/21/2022 9:19:44 AM
Viewed: 4/21/2022 10:05:29 AM
Signed: 4/21/2022 10:05:44 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
SHARON L’HEUREUX DRESSEL
[email protected]
Risk Manager
Sharon Dressel
Security Level: Email, Account Authentication
(None)
Signature Adoption: Pre-selected Style
Signed by link sent to [email protected]
Using IP Address: 198.245.189.166
Sent: 4/21/2022 9:19:44 AM
Resent: 4/21/2022 9:19:45 AM
Resent: 4/21/2022 4:36:13 PM
Viewed: 4/22/2022 7:28:36 AM
Signed: 4/22/2022 7:28:56 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Logan Phillippo
[email protected]
Senior Management Analyst
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 4/22/2022 7:29:01 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Signer Events Signature Timestamp
George Chavez
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Lili Bosse
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Huma Ahmed
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
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Carbon Copy Events Status Timestamp
Logan Phillippo
[email protected]
Senior Management Analyst
City of Beverly Hills
Security Level: Email, Account Authentication
(None)
Sent: 4/21/2022 9:19:42 AM
Resent: 4/21/2022 9:19:43 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Steve Shapiro
[email protected]
Security Level: Email, Account Authentication
(None)
Sent: 4/21/2022 9:19:43 AM
Resent: 4/21/2022 9:19:44 AM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Adrianne Tarazon
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Dorina Mohan
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Carbon Copy Events Status Timestamp
Jackie Perez
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Lourdes Sy-Rodriguez
[email protected]
Security Level: Email, Account Authentication
(None)
Electronic Record and Signature Disclosure:

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Witness Events Signature Timestamp
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Envelope Sent Hashed/Encrypted 4/21/2022 9:19:44 AM
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