EXHIBIT 10.78
TENANT ESTOPPEL
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December 7, 1998
GMAC Commercial Mortgage Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Re: Lease between G&L Coronado LLC, as Landlord or its assignees
("Landlord"), and Coronado Managers Corp. as Tenant ("Tenant"), dated
December 1, 1998, for approximately 7596 Square feet of space in Coronado
Plaza, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000 (the "Project")
as amended by the following amendments: None (the "Lease")
Ladies and Gentlemen:
Tenant understands that GMAC COMMERCIAL MORTGAGE CORPORATION ("Lender")
intends to make a loan to G&L CORONADO LLC, a Delaware limited liability company
("Borrower") to be secured by the Project. Tenant presently leases premises
within the Project pursuant to the Lease, and, in connection with the foregoing,
Tenant does hereby certify to Borrower and Lender as follows:
1. Attached hereto as Exhibit "A" is true, complete and accurate copy of the
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Lease and all amendments and modifications thereto.
2. The Lease is in full force and effect; there are no amendments or
modifications of any kind to the Lease except as referenced above; there
are no other promises, agreements, understandings, or commitments between
Landlord and Tenant relating to the premises leased under the Lease; and
Tenant has not given Landlord any notice of termination under to Lease;
3. There has not been and is now no subletting of the leased premises, or
any part thereof, or assignment by Tenant of the Lease, or any rights
therein, to any party;
4. No security deposit has been given by Tenant under the terms of, or with
respect to, the Lease;
5. No uncured default, event of default, or breach by Landlord exists under
the Lease, no facts or circumstances exist that, with the passage of time
or the giving of notice, or both, will or could constitute a default
event of default, or breach under the Lease. Tenant has made no claim
against Landlord alleging Landlord's default under the Lease;
6. Tenant is in full and complete possession of its leased premises in the
Project and has accepted its leased premises in the Project, including
any work of Landlord performed
thereon pursuant to the terms and provisions of the Lease, and all common
areas of the Project (including, without limitation, parking areas,
sidewalks, access ways and landscaping) are in compliance with the Lease
and are satisfactory for Tenants purposes;
7. To the best of Tenant's knowledge and belief, there are no rental, lease,
or similar commissions payable with respect to the Lease, except as may
be expressly set forth therein;
8. Tenant is obligated to pay rent to Landlord at the rate set fort in the
Lease. Tenant is current with respect to, and is paying the full rent and
other charges stipulated in the Lease (including, without limitation,
common area maintenance charges) with no offsets, deductions, defenses or
claims; and Tenant has not prepaid any rent or other amounts to Landlord
other than rent and other charges due and payable in the calendar month
of this certification. None of the rent which the Tenant is required to
pay under the Lease has been prepaid more than one (1) month in advance
and the Tenant agrees not to pay rent more than one (1) month in advance
unless otherwise specified in the Lease. The Tenant agrees that upon
notification by Lender in writing that rental payments ass to be made to
Lender because of a default under the Loan, the Tenant will cease making
rental payments to the Landlord, or its successors and assigns, and will
begin making such rental payments directly to Lender as required by the
terms of the Landlord's collateral assignment of the Lease to Lender.
9. The Tenant agrees that the Lease shall not hereafter be modified or
amended without the prior written consent of Lender. Neither Lender nor
any purchaser at foreclosure or owner by virtue of a deed in lieu of
foreclosure of the Project shall be responsible for any security deposit
or advance rent payment not actually received by such person or entity.
10. Tenant is not entitled to any concession or rebate of rent or other
charges from time to time due and payable under the Lease, and there are
no unpaid or unreimbursed construction allowances or other offsets due
Tenant under the Lease;
11. The current monthly estimated "common area maintenance" charge paid by
Tenant under the Lease is $0.00;
12. The current monthly estimated charge for taxes paid by Tenant under the
Lease is $0.00;
13. The current monthly estimated charge for insurance paid by Tenant under
the Lease is $0.00;
14. The monthly base rent under the Lease is $18,990 and has been paid by
Tenant through December 31, 1999;
15. Tenant is open for business and in operation in the Project;
16. Tenant acknowledges that the initial term of the Lease commenced on
December 1, 1998, and shall expire on November 30, 2010, unless sooner
terminated in accordance with the
terms of the Lease. Tenant has no option to renew or extend the lease
term, except as follows: None.
17. Tenant agrees to provide copies of all notices given to Landlord under
the Lease to Lender at the following address:
If to Lender: GMAC Commercial Mortgage Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Executive Vice President,
Commercial Loan Servicing
Facsimile No.: (000) 000-0000
With a copy to: Commercial Capital initiatives, Inc.
Wall Street Plaza
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager - Loan Administration
Facsimile No.; (000) 000-0000
The Tenant will accept performance by Lender of any term of the Lease
required to be performed by the Landlord, with the same force and
effect as though performed by Landlord, although Lender shall in no
event be required to do so. Lender shall have a reasonable time after
actual receipt of any notice of default within which to cure any such
default.
18. The undersigned representative of Tenant is duly authorized and fully
qualified to execute this instrument on behalf of Tenant thereby binding
Tenant;
19. Tenant agrees and acknowledges that the Lease is and shall be subordinate
to the mortgage of Lender. Tenant agrees that if Lender shall become the
owner of the Project by reason of the foreclosure of the Mortgage or the
acceptance of a deed or assignment in lieu of foreclosure or otherwise,
then, unless Lender elects otherwise, the Lease shall not be terminated
or affected thereby but shall continue in full force and effect as a
direct lease between Lender and Tenant upon all of the terms, covenants
and conditions set forth in the Lease and in that event Tenant agrees to
attorn to Lender and Lender agrees to accept such attornment, provided,
however, that the provisions of the Mortgage shall govern with respect to
the disposition of any casualty insurance proceeds or condemnation awards
and Lender shall not be (i) obligated to complete any construction work
required to be done by prior Landlords pursuant to the provisions of the
Lease or to reimburse Tenant for any construction work done by Tenant,
(ii) liable for any accrued obligation of Landlord or for any act or
omission of Landlord, whether prior to or after such foreclosure or sale,
(iii) required to make any repairs to the Project or to the premises
demised under the Lease required as a result of fire, or other casualty
or by reason of condemnation unless Lender shall be obligated under the
Lease to make such repairs and shall have received sufficient casualty
insurance proceeds or condemnation awards to finance the completion of
such
repairs, (iv) required to make any capital improvements to the Project or
to the premises demised under the Lease which Landlord may have agreed to
make, but had not completed, or to perform or provide any services not
related to possession or quiet enjoyment of the premises demised under
the Lease, or (v) subject to any offsets or counterclaims which shall
have accrued to Tenant against Landlord prior to the date upon which
Lender shall become the owner of the Project.
20. If Lender or any third parry succeeds to the interests of Landlord under
the Lease, the parties between themselves shall have the same remedies
and rights as the Landlord and the Tenant now possess with respect to the
Lease; provided, however, that Lender and such third party shall not be:
a. liable for any negligent act or omission of any prior landlord; or
b. bound by any rent which the Tenant might have paid for more than the
current month to any prior landlord; or
c. bound by any agreement or modification of the Lease made without
Lender's prior written consent.
21. Tenant has no option or right to purchase the property of which the
demised premises are a part, or any part thereof.
22. Tenant understands and acknowledges that Lender is about to make a loan
to Landlord and receive as part of the security for such loan (i) a
Mortgage/Deed of Trust encumbering Landlord's fee interest in the Project
(of which the demised premises are a portion) and the rents, issues and
profits of the Lease (the "Mortgage"), and (ii) an Assignment of Leases
and Rents ("Assignment of Leases") which affects the Lease, and that
Lender (and persons or entities to whom the Mortgage and/or Assignment of
Leases may subsequently be assigned) is relying upon the representations
and warranties contained herein in making such loan. Further, Tenant has
notice that the Lease and the rent and all other sums due thereunder have
been assigned or are to be assigned to Lender as security for the
aforesaid loan secured by the Mortgage. In the event that Lender (or any
person or entity to whom the Mortgage and/or Assignment of Leases may
subsequently be assigned) notifies Tenant of a default under the Mortgage
or Assignment of Leases and demands that Tenant pays its rent and all
other sums due under the Lease to Lender (or such future lender), Tenant
shall honor such demand and pay its rent and all other sums due under the
Lease directly to Lender (or such future lender) or as otherwise required
pursuant to such notice.
23. Tenant acknowledges and agrees that Landlord and Lender shall be entitled
to rely on Tenant's certifications set forth herein. Tenant hereby
further agrees for a period of thirty (30) days from the date hereof to
notify Landlord and Lender in writing at the address set forth above of
any changes in the truth and accuracy of any of the certifications
contained herein promptly upon Tenants learning of each such change.
IN WITNESS WHEREOF, Tenant has executed this instrument this 7th day of
December 1998.
TENANT:
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G&L CORONADO LLC
a Delaware limited liability company
By: CORONADO MANAGERS CORP.
a Delaware corporation
Managing Member
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Secretary
GUARANTOR'S ACKNOWLEDGMENT
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The undersigned, XXXXXX X. LEBOWTTZ and XXXXXX XXXXXXXX (collectively
"Guarantors"), (i) acknowledge and agree that the documents attached hereto as
Exhibit B constitute a complete and accurate copy of Guarantor's Guaranty of the
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Lease (the "Guaranty") and that the Guaranty is in full force and effect and is
enforceable in accordance with its terms, with no offset, deduction, defense or
claim by Guarantor and (ii) certifies that the certifications of Tenant herein
are true and correct.
GUARANTOR:
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/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
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XXXXXX XXXXXXXX
RIDER TO TENANT ESTOPPEL
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Lender agrees that if any action or proceeding is commenced by Lender or at
Lender's behest for the foreclosure of the Mortgage or the sale of the Project,
Tenant shall not be named as a party therein, and the sale of the Project in any
such action or proceeding and the exercise by Lender of any of its other rights
under the Note or the Mortgage shall be made subject to all rights of Tenant
under the Lease, provided that at the time of the commencement of any such
action or proceeding or at the time of any such sale or exercise of any such
other rights (i) the term of the Lease shall have commenced pursuant to the
provisions thereof, (ii) Tenant shall be in possession of the premises demised
under the Lease, (iii) the Lease shall be in full force and effect and (iv)
Tenant shall not be in default under any of the terms, covenants or conditions
of the Lease or of this Agreement on Tenant's part to be observed or performed.
EXHIBIT A
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REAL ESTATE LEASE
(MULTI-TENANT FACILITY)
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
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Landlord and Tenant named below. Other Articles and Sections of the Lease
referred to in this Article One explain and define the Basic Terms and are to be
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read in conjunction with the Basic Terms.
Section 1.01. Date of Lease: December 1. 1998
Section 1.02. Landlord: G&L CORONADO LLC, 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, XX 00000
Section 1.03. Tenant (include legal entity): CORONADO MANAGERS CORP., 0000
Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000.
Section 1.04. Property: The Property consists the third floor executive
suite of Landlord's multi-tenant real property development known as and
described as 0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx, and depicted in Exhibit
"A" (the "Project"). The Project includes the land, the buildings and all other
improvements located on the land, and the common areas described in Section
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406(a).
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Section 1.05. Lease Term: The Lease shall continue for a term of twelve
(12) years commencing December 1,1998, and ending on November 30, 2010.
Section 1.06. Permitted Uses: (See Article Five) Operation of general
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offices
Section 1.07. Brokers: (See Article Fourteen) None.
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Section 1.08. Rent and Other Charges Payable by Tenant:
(a) BASE RENT: Thirty Dollars ($30.00) per square foot per year for the
first five (5) years, payable in equal monthly installments, subject to
increases every five (5) years during the term in accordance with Section 3.02,
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below;
(b) ADDITIONAL RENT: See Section 3.04 below.
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(c) OTHER PERIODIC PAYMENTS: Building operating expenses in accordance with
Article 4 below, and Maintenance, Repairs and Alterations as set forth in
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Article Six.
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ARTICLE TWO: LEASE TERM
Section 2.01. Lease of Property For Lease Term. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section l.05 above and shall
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begin and end on the dates specified in Section 1.05 above, unless the beginning
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or end of the Lease Term is changed under any provision of this Lease. The
"Commencement Date" shall be the date specified in Section 1.05 above for the
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beginning of the Lease Term, unless advanced or delayed under any provision of
this Lease.
Section 2.02. Delay in Commencement. Notwithstanding the Commencement Date,
if for any reason Landlord cannot deliver possession of the Property to Tenant
on the Turn-Over Date, Tenant shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or the obligations of
Tenant hereunder, but in such case the Lease Term shall be extended by the
length of the delay and Tenant shall not be obligated to pay rent until
possession of the Property is tendered to Tenant.
Section 2.03. Holding Over. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages which Landlord incurs from
Tenant's delay in vacating the Property. If Tenant does not vacate the Property
upon the expiration or earlier termination of the Lease and Landlord thereafter
accepts rent from Tenant, Tenant's occupancy of the Property shall be a
"month-to-month" tenancy, subject to all of the terms of this Lease applicable
to a month-to-month tenancy, except that the Base Rent then in effect shall be
increased by fifty percent (50%).
ARTICLE THREE: BASE RENT AND ADDITIONAL RENT
Section 3.01. Time and Manner of Payment. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.07(a)
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above for the first month of the Lease Term. On the first day of the second
month of the Lease Term and each month thereafter, Tenant shall pay Landlord,
the Base Rent, in advance, without offset, deduction or prior demand. The Base
Rent shall be payable at Landlord's address or at such other place as Landlord
may designate in writing.
Section 3.02. Cost of Living Increases. The Base Rent shall be increased
effective on the first day of each fifth (5/th/) lease year commencing on the
first day of the sixth lease year (the "Rental Adjustment Date") in accordance
with the increase in the United States Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers (all items for the
geographical Statistical Area in which the Property is located on the basis of
1982-1984 = 100) (the "Index"). In making such calculations, no effect shall be
given to any rent concessions or abatements, if any, provided for in this Lease.
The increase shall be calculated as follows:
(a) The Base Rent (the "Comparison Base Rent") set forth in Section 1.08(a)
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shall be increased by the percentage that the Index has increased from the
calendar month immediately preceding the month in which the Commencement Date
occurs (the "Comparison
2
Date") through the month immediately preceding the month in which the applicable
Rental Adjustment Date occurs. The Base Rent shall not be reduced by reason of
such computation. Landlord shall notify Tenant of each increase by a written
statement which shall include the Index for the applicable Comparison Date, the
Index for the applicable Rental Adjustment Date, the percentage Increase between
those two Indices, and the new Base Rent. In no event shall the Base Rent be
increased by more than ten percent (10%).
(b) Tenant shall pay the new Base Rent from the applicable Rental
Adjustment Date until the next Rental Adjustment Date. Landlord's notice may be
given after the applicable Rental Adjustment Date of the increase, and Tenant
shall pay Landlord the accrued rental adjustment for the months elapsed between
the effective date of the increase and Landlord's notice of such increase within
ten (10) days after Landlord's notice. If the format or components of the Index
are materially changed after the Commencement Date, Landlord shall substitute an
index which is published by the Bureau of Labor Statistics or similar agency and
which is most nearly equivalent to the Index in effect on the Commencement Date.
The substitute index shall be used to calculate the increase in the Base Rent
unless Tenant objects to such index in writing within fifteen (15) days after
receipt of Landlord's notice. If Tenant objects, Landlord and Tenant shall
submit the selection of the substitute index for binding arbitration in
accordance with the rules and regulations of the American Arbitration
Association at its office closest to the Property. The costs of arbitration
shall be borne equally by Landlord and Tenant.
Section 3.03. Partial Month. Should the Commencement Date be a day of the
month other than the first day of such month, then the Basic Rent for the first
fractional month shall be computed on a daily basis for the period from the
Commencement Date to the end of such calendar month and at an amount equal to
one/three hundred and sixtieth (1/360th) of the Minimum Annual Rental for each
such day. Rental for such partial month shall be due and payable prior to the
Commencement Date.
Section 3.04 Additional Rent. To the extent not paid by Tenant to Landlord
pursuant to Section 4.01 below, Tenant shall pay to Landlord as additional rent
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on a monthly basis an amount equal to the cash collections derived by Tenant
from its subtenants for telephone and other expense reimbursements during the
immediately preceding calendar month.
Section 3.04. Financial Statements. At least annually during the term of
this Lease, Tenant shall provide to Landlord financial statements for Tenant and
Tenant's operations at the Property prepared in accordance with generally
accepted accounting principles consistently applied and shall include a profit
and loss statement and a balance sheet. Such statements shall be provided within
ninety (90) days after the expiration of each lease year. For purposes of this
Lease, the term lease year shill refer to a twelve (12) month period with the
first lease year commencing on the first day of the first full month of the
Lease Term.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT.
Section 4.01. Operating Expense Adjustments. For the purposes of this
Article, the following terms are defined as follows:
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(a) Base Year: Calendar year: 1999.
(b) Comparison Year: Each calendar year or portion thereof during the term
of this Lease after the Base Year.
(c) Direct Expenses: The term "Direct Expenses" shall include:
(i) Taxes: All real and personal property taxes and assessments
imposed by any government authority or agency on the Project and the land
on which the Project is located (including a pro rata portion of any taxes
levied on any common areas); any assessments levied in lieu of taxes; any
tax or fee on or measured by gross rentals received from the rental of
space in the Project and associated parking areas, including any
improvements thereon; and any other costs levied or assessed by or at the
direction of, any federal, state, or local government authority in
connection with the use or occupancy of the Property; any tax on this
transaction or any document to which Tenant is a party creating or
transferring an interest in the Property; and any expenses, including cost
of attorneys or experts, reasonably incurred by Landlord in seeking
reduction by the taxing authority of the above referenced taxes; but shall
not include any net income, franchise, capital stock, estate, or
inheritance taxes.
(ii) Insurance and Utilities: Costs consisting of Landlord's
operating expenses that are attributable to premiums and other charges
incurred by Landlord for insurance on the Project, land, and parking areas,
and for the employees, agents, and independent contractors referred to
herein, including, but not limited to (a) fire and extended coverage
insurance, flood and earthquake insurance, rental interruption insurance,
boiler and machinery insurance, sprinkler leakage insurance, commercial
general liability insurance, and other insurance, and (b) the cost of all
water, gas, electricity, sewer service, and other utilities, including, but
not limited to, all costs, charges, and expenses incurred by Landlord in
connection with any change of any company providing electricity service,
including, without limitation, maintenance, repair, installation, and
service costs associated therewith.
(iii) Other Direct Expenses. Costs consisting of Landlord's operating
expenses that are attributable to the operation, maintenance, management,
securing, and repair of the Project, underlying land, and parking areas,
including, but not limited to, salaries and other compensation, including
payroll taxes, vacation, holidays, and other paid absences, and welfare,
retirement, and other fringe benefits, paid to employees, agents, and
independent contractors of Landlord; repairs and maintenance of the
Project, land, and parking areas, and the costs of related supplies, tools,
materials, and equipment; premiums and other charges incurred by Landlord
for insurance on the Project, land, and parking areas, and for the
employees, agents, and independent contractors referred to above; cost of
providing security for the Project and the parking areas; costs incurred
for inspection and servicing including all outside maintenance contracts
for the proper maintenance of Project, land, and parking areas such as
janitorial and window cleaning, rubbish removal, exterminating, water
treatment, elevator, electrical, plumbing, and mechanical equipment, and
the cost of related materials, tools, supplies, and equipment; costs
incurred for utilities; sales, use, and excise taxes on goods and services
purchased by Landlord; license, permit, and
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inspection fees; auditors fees; legal fees, costs, and disbursements
(excluding those (a) relating to disputes with tenants, (b) based upon
Landlord's negligence or other tortious conduct, (c) relating to enforcing
lease provisions for the benefit of the Project tenants generally, or (d)
relating to the defense of Landlord's title to, or interest in, the
Project; management fees; other costs reasonably necessary to operate,
repair, manage, and maintain the Property in a first-class manner and
condition.
(iv) Administrative Fee. An administrative fee to Landlord in an
amount equal to three and one-half (3.5%) of the Direct Expenses referred
to in Sections 4.01(c)(i), 4.01(c)(ii) and 4.0l(c)(iii).
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(d) The following expenses incurred by Landlord shall not be Included in
Direct Expenses: (a) leasing commissions, costs, disbursements, and other
expenses incurred for leasing, renovating, or improving space for tenants, (b)
costs (including permit, license, and inspection fees) incurred in renovating,
improving, decorating, painting, or redecorating vacant space or space for
tenants, (c) Landlord's cost of electricity or other service sold to tenants for
which Landlord is to be reimbursed as a charge over the Rent and Additional Rent
payable under the lease with that tenant, (d) costs incurred by Landlord for
alterations that are considered capital improvements and replacements under
generally accepted accounting principles consistently applied except that the
annual amortization of these costs shall be included with interest on the
unamortized portion thereof at the rate of ten percent (10%) per annum, (e)
depreciation and amortization on the Project except as expressly permitted
elsewhere in this Lease, (f) costs incurred because the Landlord or another
tenant violated the terms of any lease, (g) rentals and other related expenses
incurred in leasing air conditioning systems, elevators, or other equipment
ordinarily considered to be of a capital nature, except equipment used in
providing janitorial services that is not affixed to the Project, (h) items and
services for which Tenant reimburses Landlord or pays third parties or that
Landlord provides selectively to one or more tenants of the Project other than
Tenant without reimbursement, (i) advertising and promotional expenditures; (j)
repairs or other work needed because of fire, windstorm, or other casualty or
cause insured against by Landlord or to the extent Landlord's insurance required
under this Lease; (k) nonrecurring costs incurred to remedy structural defects
in original construction materials or installations, and (l) costs incurred to
test, survey, cleanup, contain, xxxxx, remove, or otherwise remedy Hazardous
Substances (as defined below) or asbestos-containing materials from the Property
unless the Hazardous Substances or asbestos-containing materials were in or on
the Project because of Tenant's negligence or intentional acts.
(e) If the Direct Expenses paid or incurred by the Landlord for the
Comparison Year exceed the Direct Expenses paid or Incurred by the Base Year,
then Tenant shall pay __________ percent (___%) of the increase as Additional
Rent. This percentage represents Tenant's portion of the Projects Rentable
Square Footage.
Section 4.02 Procedures. As soon as practicable prior to the commencement
of each Comparison Year or as soon as practicable thereafter. Landlord shall
furnish to Tenant a statement of Landlord's reasonable estimate of the Direct
Expenses expected to be incurred during the Comparison Year and showing the
amount of Additional Rent, if any, payable by Tenant to Landlord during the
Comparison Year on the basis of such estimate. This estimate amount shall be
divided into twelve (12) installments. Tenant shall pay to Landlord,
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concurrently with the regular monthly Rent payment next due, following the
receipt of such statement, an amount equal to one (1) monthly installment
multiplied by the number of months from January in the calendar year in which
said statement is furnished to the month of such payment. Subsequent
installments shall be payable concurrently with the regular monthly rental
payments for the balance of the Comparison Year until the next calendar's year
statement is furnished to Tenant. If the final Comparison Year during the term
of the Lease is a partial year, then Tenant shall pay to Landlord the estimated
amount of Additional Rent required to be paid by Tenant for partial Comparison
Year divided by the number of months in said partial Comparison Year
concurrently with the regular monthly payments during said partial Comparison
Year.
(a) If the base for Operating Expenses is a Base Year and occupancy of the
Project during the Base Year or any Comparison Year is less than ninety five
percent (95%), then Operating Expenses for that Base Year or Comparison Year
shall be "grossed up" to that amount of Operating Expenses that, using
reasonable projections, would normally be expected to be incurred during the
Base Year or Comparison Year if the Project were ninety five percent (95%)
occupied during the Base Year or Comparison Year, as determined under generally
accepted accounting principles consistently applied. Landlord shall provide in
the Statement required by Section 4.02, a reasonably detailed description of how
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the Operating Expenses were grossed up. Only those component expenses that are
affected by variations in occupancy levels shall be grossed up.
(b) Subject to the above set forth limitations, Landlord shall have the
right, in Landlord's discretion, to reasonably revise Landlord's estimated
amount of Direct Expenses from time to time during the necessary period to
account for savings or additional expenditures attributable to the period in the
Comparison Year prior to the Landlord's revised estimate. The payment of the
revised Direct Expenses shall be due on the first monthly Rent payment date
following Tenant's receipt from Landlord of a statement of such revised
estimate.
(c) With reasonable promptness after the expiration of each Comparison
Year, Landlord shall make available to Tenant a statement showing (a) the actual
amount of Direct Expenses incurred during the Comparison Year and the actual
Direct Expenses for the Base Year, (b) the difference, if any, between
Landlord's estimated amount thereof and the actual amount of Direct Expenses,
and (c) showing the aggregate amount of any charge or actual to Tenant necessary
to adjust the amount of Additional Rent previously paid by Tenant to the amount
of actual Direct Expenses. On or before the first of the month following
notification by Landlord to Tenant, Tenant shall, in case of an underpayment,
promptly pay to Landlord an amount equal to such underpayment or Landlord shall,
in the case of an overpayment, credit the next monthly Rental payment due from
Tenant with an amount equal to such overpayment. The amount of increases in Rent
payable to Landlord hereunder for any partial month shall be prorated on a daily
basis.
(d) Even though the term of this Lease has expired and Tenant has vacated
the Property, when the final determination is made of Tenant's proportionate
share of Direct Expenses for the year in which this Lease terminates, Tenant
shall immediately pay an increase due over the estimated expenses paid, and
conversely, any overpayment made in the event said expenses decrease shall be
rebated by Landlord to Tenant.
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(e) Notwithstanding anything contained in this Article, the Rent payable by
Tenant shall in no event be less than the Rent specified in Article Three
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hereinabove.
Section 4.03 Personal Property Taxes.
(a) Tenant shall pay all taxes charged against the trade fixtures,
furnishings, equipment or any other personal property belonging to Tenant.
Tenant shall try to have personal property taxed separately from the Property.
(b) If any of Tenant's trade fixtures, furnishings, equipment and other
personal property is taxed with the Property, Tenant shall pay Landlord the
taxes for the personal property within fifteen (15) days after Tenant receives a
written statement from Landlord for such personal property taxes.
Section 4.04. Utilities. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property. However, if any services or utilities are jointly metered with any
other portions of the Project, Landlord shall make a reasonable determination of
Tenant's proportionate share of the cost of such utilities and services and
Tenant shall pay such share to Landlord within fifteen (15) days after receipt
of Landlord's written statement.
Section 4.05. Insurance Policies.
(a) Liability Insurance. During the Lease Term, Tenant shall maintain a
policy of commercial general liability insurance (sometimes known as broad form
comprehensive general liability insurance) insuring Tenant against liability for
bodily injury, property damage (including loss of use of property) and personal
injury arising out of the operation, use or occupancy of the Property. Such
insurance shall be maintained with a single combined liability limit of at least
One Million Dollars ($1,000,000.00) insuring against all liability of Tenant and
its authorized representatives arising out of or in connection with Tenant's use
or occupancy of the Property. All of such insurance shall insure performance by
Tenant of the indemnity provisions of Section 5.04 of this Lease and shall name
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Landlord and its partners as an additional insured.
(b) Property and Rental Income Insurance. During the Lease Term, Landlord
shall maintain policies of insurance covering loss of or damage to the Property
as part of the Landlord's insurance coverage for the Project. Such policy shall
provide protection against all perils included within the classification of
fire, extended coverage, vandalism, malicious mischief, special extended perils
(all risk), sprinkler leakage and any other perils which Landlord deems
reasonably necessary. Landlord shall have the right to obtain flood and
earthquake insurance. Landlord shall not obtain insurance for Tenant's fixtures
or equipment or building improvements installed by Tenant on the Property.
During the Lease Term, Landlord shall also have the right, but not the
obligation, to maintain a rental income insurance policy, with loss payable to
Landlord, in an amount equal to one year's Base Rent, plus estimated real
property taxes and insurance premiums.
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(d) General Insurance Provisions.
(i) Any insurance which Tenant is required to maintain under this
Lease shall include a provision which requires the insurance carrier to
give Landlord not less than thirty (30) days' written notice prior to any
cancellation or modification of such coverage.
(ii) Tenant shall maintain all insurance required under this Lease
with companies holding a "General Policy Rating" of A-IX or better, as set
forth in the most current issue of "Best Key Rating Guide."
(iii) Anything to the contrary in this Lease notwithstanding, neither
party, nor its officers, directors, employees, agents or invitees, nor, in
case of Tenant, its subtenants, shall be liable to the other party or to
any insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage to any building, structure or other
tangible property, when such loss is caused by any of the perils which are
or could be insured against under a standard policy of full replacement
cost insurance for fire, theft and all risk coverage, or losses under
workers' compensation laws and benefits, even though such loss or damage
might have been occasioned by the negligence of such party, its agents or
employees (this clause shall not apply, however, to any damage caused by
intentionally wrongful actions or omissions); provided, however, that if,
by reason of the foregoing waiver, either party shall be unable to obtain
any such insurance, such waiver shall be deemed not to have been made by
such party and, provided further, that if either party shall be unable to
obtain any such insurance without the payment of an additional premium
therefor, then, unless the party claiming the benefit of such waiver shall
agree to pay such party for the cost of such additional premium within
thirty (30) days after notice setting forth such requirement and the amount
of the additional premium, such waiver shall be of no force and effect
between such party and such claiming party. Each party shall use reasonable
efforts to obtain such insurance from a company that does not charge an
additional premium or, if that is not possible, one that charges the lowest
additional premium. Each party shall give the other party notice at any
time when it is unable to obtain insurance with such a waiver of
subrogation without the payment of an additional premium and the foregoing
waiver shall be effective until thirty (30) days after notice is given.
Each party represents that its current insurance policies allow such
waiver.
Section 4.06. Common Areas; Use, Maintenance and Costs.
(a) Common Areas. As used in this Lease, "Common Areas" shall mean all
areas within the Project which are available for the common use of tenants of
the Project and which are not leased or held for the exclusive use of Tenant or
other tenants, including, but not limited to, parking areas, driveways,
sidewalks, loading areas, access roads, corridors, landscaping and planted
areas.
(b) Use of Common Areas. Tenant shall have the nonexclusive right (in
common with other tenants and all others to whom Landlord has granted or may
grant such rights) to use the Common Areas for the purposes intended, subject to
such reasonable rules and regulations as Landlord may establish from time to
time.
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(c) Maintenance of Common Areas. Landlord shall maintain the Common Areas
in good order, condition and repair.
Section 4.07. Interest on Past Due Obligations. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this Lease
is higher than the rate permitted by law, the interest rate is hereby decreased
to the maximum legal interest rate permitted by law.
ARTICLE FIVE: USE OF PROPERTY
Section 5.01. Permitted Uses. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
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Section 5.02. Manner of Use. Tenant shall not cause or permit the Property
to be used in any way which constitutes a violation of any law, ordinance, or
governmental regulation or order, which annoys or interferes with the rights of
tenants of the Project, or which constitutes a nuisance or waste. Tenant shall
obtain and pay for all permits, including a Certificate of Occupancy, required
for Tenants occupancy of the Property and shall promptly take all actions
necessary to comply with all applicable statutes, ordinances, rules,
regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act.
Section 5.03. Signs and Auctions. Tenant shall not place any signs on the
Property without Landlord's prior written consent. Tenant shall not conduct or
permit any auctions or sheriffs sales at the Property. The location of Tenants
sign shall be subject to the Landlord's approval and shall not adversely affect
the visibility of the signs of other tenants located in the Project. All of such
signs shall be subject to the approval of the City of Los Angeles and any other
applicable governmental agencies. Tenant shall be solely responsible for the
maintenance of Tenant's signs and shall keep such signs in good condition and
repair at all times. At the expiration of the Lease Term all signs shall be
removed by Tenant at Tenant's sole cost and expense, provided that Landlord, at
Landlord's sole option shall have the right to designate such of Tenants signs
as Landlord does not desire Tenant to remove. Such signs shall become the
property of Landlord at the expiration of the Lease Term.
Section 5.04. Indemnity. Tenant shall indemnify Landlord against and hold
Landlord harmless from any and all costs, claims or liability arising from: (a)
Tenant's use of the Property; (b) the conduct of Tenant's business or anything
else done or permitted by Tenant to be done in or about the Property, including
any contamination of the Property or any other property resulting from the
presence or use of Hazardous Material caused or permitted by Tenant; (c) any
breach or default in the performance of Tenant's obligations under this Lease;
(d) any misrepresentation or breach of warranty by Tenant under this Lease; or
(e) other acts or omissions of Tenant. Tenant shall defend Landlord against any
such cost, claim or liability at Tenant's expense with counsel reasonably
acceptable to Landlord or, at Landlord's election, Tenant shall reimburse
Landlord for any legal fees or costs incurred by Landlord in connection with any
such claim. As a material part of the consideration to Landlord. Tenant assumes
all risk of damage to property or injury to persons in or about the Property
arising from any cause,
9
and Tenant hereby waives all claims in respect thereof against Landlord, except
for any claim arising out of Landlord's gross negligence or willful misconduct.
As used in this Section, the term "Tenant" shall include Tenant's employees,
agents, contractors and invitees, if applicable.
Section 5.05. Landlord's Access. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall give
Tenant prior notice of such entry, except in the case of an emergency. Landlord
may place customary "For Sale" or "For Lease" signs on the Property.
Section 5.05. Quiet Possession. If Tenant pays the rent and complies with
all other terms of this Lease, Tenant may occupy and enjoy the Property for the
full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. Existing Conditions. Tenant accepts the Property in its
condition as of the execution of the Lease, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Except as provided
herein, Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation as to the condition of the Property or the suitability
of the Property for Tenant's intended use. Tenant represents and warrants that
Tenant has made its own inspection of and inquiry regarding the condition of the
Property and is not relying on any representations of Landlord or any Broker
with respect thereto.
Section 6.02. Exemption of Landlord from Liability. Landlord shall not be
liable for any damage or injury to the person, business (or any loss of income
therefrom), goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers or any other person in or about the Property,
whether such damage or injury is caused by or results from: (a) fire, steam,
electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures by any other cause; (c) conditions arising in or about the
Property or upon other portions of the Project, or from other sources or places;
or (d) any act or omission of any other tenant of the Project. Landlord shall
not be liable for any such damage or injury even though the cause of or the
means of repairing such damage or injury are not accessible to Tenant. The
provisions of this Section 6.02 shall not, however, exempt Landlord from
------------
liability for Landlord's gross negligence or willful misconduct.
Section 6.03. Landlord's Obligations. Except as provided in Article Seven
-------------
(Damage or Destruction) and Article Eight (Condemnation). Landlord shall keep
-------------
the following in good order, condition and repair the foundations, exterior
walls and roof of the Project (including painting, if necessary) and all
components of electrical, mechanical, plumbing, heating and air conditioning
systems and facilities located in the Project which are concealed or used in
common by tenants of the Project. However, Landlord shall not be obligated to
maintain or repair windows, doors, plate glass or the interior surfaces of
exterior walls. Landlord shall make
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repairs under this Section 5.03 within a reasonable time after receipt of
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written notice from Tenant of the need for such repairs.
Section 6.04. Tenants Obligations.
(a) Except as provided in Section 6.03, Article Seven (Damage or
------------ -------------
Destruction) and Article Eight (Condemnation), Tenant shall keep all portions of
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the Property (including structural, nonstructural, interior, systems and
equipment) in good order, condition and repair (including interior repainting
and refinishing, as needed, and repairs or replacement required by fire,
earthquake or other code requirements). If any portion of the Property or
Project is damaged by any act or omission of Tenant. Tenant shall pay Landlord
the cost of repairing or replacing such damaged property, whether or not
Landlord would otherwise be obligated to pay the cost of maintaining or
repairing such property.
(b) Tenant shall fulfill all of Tenant's obligations under this Section
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6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or replace
----
the Property as required by this Section 6.04, Landlord may, upon ten (10) days'
------------
prior notice to Tenant (except that no notice shall be required in the case of
an emergency), enter the Property and perform such maintenance or repair
(including replacement, as needed) on behalf of Tenant. In such case, Tenant
shall reimburse Landlord for all costs incurred in performing such maintenance
or repair immediately upon demand.
Section 6.05. Alterations, Additions, and Improvements.
(a) Tenant shall not make any alterations, additions, or improvements to
the Property without Landlord's prior written consent, except for non-structural
alterations which do not exceed Ten Thousand Dollars ($10,000) in cost
cumulatively over the Lease Term and which are not visible from the outside of
any building of which the Property is part. Landlord may require Tenant to
provide demolition and/or lien and completion bonds in form and amount
satisfactory to Landlord. Tenant shall promptly remove any alterations,
additions, or improvements constructed in violation of this Section 6.05(a) upon
---------------
Landlord's written request.
(b) Tenant shall pay when due all claims for labor and material furnished
to the Property. Tenant shall give Landlord at least twenty (20) days' prior
written notice of the commencement of any work on the Property, regardless of
whether Landlord's consent to such work is required. Landlord may elect to
record and post notices of non-responsibility on the Property.
(c) Within thirty (30) days from the execution of this Lease by Tenant,
Tenant shall provide to Landlord a design plan for Tenant's Property prepared by
a licensed architect or engineer setting forth in detail a floor plan of the
Property, the designated uses of the specific areas listed on the floor plan,
locations of interior walls and any plumbing and electrical systems that will be
installed by Tenant in the Property. All of such plans shall be subject to the
approval of Landlord.
Section 6.08. Condition upon Termination. Upon the termination of the
Lease, Tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. The term
"ordinary wear and tear" shall mean wear and tear which manifests itself solely
through normal use and the passage of time, such as may be
11
caused by foot traffic, wear to carpets and fading of painted surfaces,
settlement of the building and other geologic condition. Ordinary wear and tear
shall not include any damage or deterioration that could have been prevented by
Tenant performing all of its obligations under this Sublease. For the purpose of
this Sublease, items of wear which are not ordinary include, but are not limited
to, the following (other than items as may have been caused by Landlord's acts
or omissions or are Landlord's obligation to maintain, repair and/or replace
pursuant to this Sublease), which items shall be Tenant's obligation to repair
and correct: (i) damage to or defacement of walls, partitions, floors, ceilings,
roof, landscaping, pavements, columns, mechanical, electrical, and plumbing
equipment, doors, or other components of the Property (ii) excessively soiled,
stained or marked surfaces; (iii) damage caused by the installation of or
removal of Tenant's trade fixtures, furnishings, equipment, alterations or
utility installations; (iv) the removal of Tenants signs and the restoration of
any area or surface affected by such signs and/or utility installations, and (v)
any defects to the Property which developed subsequent to the Commencement Date
and which are otherwise Tenant's obligation to repair pursuant to this Lease.
Section 6.07. Hazardous Materials. Tenant shall not cause or permit any
Hazardous Material (as defined below) to be brought upon, kept or used in or
about the Property by Tenant, its agents, employees, contractors or invitees,
without the prior written consent of Landlord (which Landlord shall not
unreasonably withhold as long as Tenant demonstrates to Landlord's reasonable
satisfaction that such Hazardous Material is necessary or useful to Tenant's
business and will be used, kept and stored in a manner that complies with all
laws, rules, statutes and ordinances regulating any such hazardous Material so
brought upon or used or kept In or about the Property). If Tenant breaches the
obligations stated above in this Paragraph, or if the presence of Hazardous
Material on or about the Property caused or permitted by Tenant results in
contamination of the Property, or if contamination of the Property or
surrounding area by Hazardous Material otherwise occurs for which Tenant is
legally liable to Landlord for damage resulting therefrom, then Tenant shall
indemnify, defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including, without
limitation, diminution in value of the Property or the building which is part of
the Property, damages for the loss or restriction on use of rentable or usable
space or of any amenity of the Property, damages arising from any adverse impact
on marketing of space in the building, and sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees) which arise during or after
the term of this Lease as a result of such contamination. This indemnification
of Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on, under or about the Property. Without limiting the foregoing, if
the presence of any Hazardous Material on or about the Property caused or
permitted by Tenant results in any contamination of the Property or surrounding
area, or causes the Property or surrounding area to be in violation of any laws,
rules, statutes or ordinances, Tenant shall promptly take all actions at its
sole expense as are necessary to return the Property and surrounding area to the
condition existing prior to the introduction of any such Hazardous Material;
provided that Landlord's approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld so long as such actions would not
potentially have any material adverse long-term, or short-term effect on the
Property or surrounding area.
As used herein, the term "Hazardous Material" means any hazardous or toxic
substance, material or waste which is or becomes regulated by any local
governmental
12
authority, the State of California or the United States Government. The term
"Hazardous Material" includes, without limitation, any material or substance
which is (i) defined as a "hazardous waste," "extremely hazardous waste," or
"restricted hazardous wastes" under Sections 25115, 25117, or 25122.7, or listed
pursuant to Section 25140, of the California Health and Safety Code, Division
20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code,
Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account
Act), (iii) defined as a "hazardous material," "hazardous substance," or
"hazardous waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage
of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) listed under
Article 9 or defined as hazardous or extremely hazardous pursuant to Article 11
of Title 22 of the California Administrative Code, Division 4, Chapter 20,
(viii) designated as a "hazardous substance" pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. Sec. 1317), (ix) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. Sec. 6901 et seq. (42 U.S.C. Sec. 6903), or (x)
-- ---
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sec. 9601 et
--
seq. (42 U.S.C. Sec. 6901).
---
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
Section 7.01. Partial Damage to Property.
(a) Tenant shall notify Landlord in writing immediately upon the occurrence
of any damage to the Property. If the Property is only partially damaged (i.e.,
less than fifty percent (50%) of the Property is untenantable as a result of
such damage or less than fifty percent (50%) of Tenants operations are
materially impaired) and if the proceeds received by Landlord from the insurance
policies described in Section 4.05(b) are sufficient to pay for the necessary
---------------
repairs, this Lease shall remain in effect and Landlord shall repair the damage
as soon as reasonably possible. Landlord may elect (but is not required) to
repair any damage to Tenant's fixtures, equipment, or improvements.
(b) If the insurance proceeds received by Landlord are not sufficient to
pay the entire cost of repair, or if the cause of the damage is not covered by
the insurance policies which Landlord maintains under Paragraph 4.05(b), or if
-----------------
twenty-five percent (25%) or more of the leasable space in the Project in
untenantable (as determined by Landlord), or if the damage to the Property
renders fifty percent (50%) or more of the Property untenantable, Landlord may
elect either to (i) repair the damage as soon as reasonably possible, in which
case this Lease shall remain in full force and effect, or (ii) terminate this
Lease as of the date the damage occurred. Landlord shall notify Tenant within
ninety (90) days after receipt of notice of the occurrence of the damage whether
Landlord elects to repair the damage or terminate the Lease. If Landlord elects
to repair the damage. Tenant shall pay Landlord the "deductible amount" (if any)
under Landlord's Insurance policies and, if the damage was due to an act or
omission of Tenant, or Tenant's employees, agents, contractors or invitees, the
difference between the actual cost of repair and any insurance proceeds received
by Landlord.
13
(c) If the damage to the Property occurs during the last six (6) months of
the Lease Term and such damage will require more than thirty (30) days to
repair, either Landlord or Tenant may elect to terminate this Lease as of the
date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Tenant's notice to Landlord of the occurrence of the damage.
Section 7.02. Substantial or Total Destruction. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage as described in Section 7.01), and
------------
regardless of whether Landlord receives any insurance proceeds, this Lease shall
terminate as of the date the destruction occurred. Notwithstanding the preceding
sentence, if the Property can be rebuilt within six (6) months after the date of
destruction, Landlord may elect to rebuild the Property at Landlord's own
expense, in, which case this Lease shall remain in full force and effect.
Landlord shaft notify Tenant of such election within thirty (30) days after
Tenant's notice of the occurrence of total or substantial destruction, if
Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense, except that if the destruction was caused by an act or omission of
Tenant, Tenant shall pay Landlord the difference between the actual cost of
rebuilding and any insurance proceeds received by Landlord.
Section 7.03. Temporary Reduction of Rent. If the Property is destroyed or
damaged and Landlord or Tenant repairs or restores the Property pursuant to the
provisions of this Article Seven, any rent payable during the period of such
-------------
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which Tenant's use of the Property is impaired. However, the reduction
shall not exceed the sum of one years payment of Base Rent, insurance premiums
and real property taxes, except for such possible reduction in Base Rent,
insurance premiums and real property taxes, Tenant shall not be entitled to any
compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
Any Condemnation award or payment shall be distributed in the following order:
(a) first, to any ground lessor, mortgagee or beneficiary under a deed of trust
encumbering the Property, the amount of its interest in the Property; (b)
second, to Tenant, only the amount of any award specifically designated for loss
of or damage to Tenant's business, trade fixtures or removable personal property
paid for by Tenant (and not Landlord); and (c) third, to Landlord, the remainder
of such award, whether as compensation for reduction in the value of the
leasehold, the taking of the fee, or otherwise. Any award for the taking of all
or any part of the Property under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of the
Landlord, whether such award shall be made as compensation for diminution in
value of the leasehold or for the taking of the fee, or as several damages.
14
ARTICLE NINE: ASSIGNMENT AND SUBLETTING
Section 9.01. Landlord's Consent Required. Tenant shall not assign this
Lease and its rights thereunder without Landlord's prior written consent, which
consent shall not be unreasonably withheld. Tenant shall have the absolute right
to sublet individual office Property in the Property without the consent of
Landlord.
Section 9.02. No Release of Tenant. No transfer permitted by this Article
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Nine, whether with or without Landlord's consent, shall release Tenant or change
----
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. Landlord's acceptance of rent from any other person
is not a waiver of any provision of this Article Nine. Consent to one transfer
------------
is not a consent to any subsequent transfer. If Tenant's transferee defaults
under this Lease, Landlord may proceed directly against Tenant without pursuing
remedies against the transferee. Landlord may consent to subsequent assignments
or modifications of this Lease by Tenant's transferee, without notifying Tenant
or obtaining its consent. Such action shall not relieve Tenant's liability under
this Lease.
Section 9.05. No Merger. No merger shall result from Tenant's sublease of
the Property under this Article Nine, Tenant's surrender of this Lease or the
------------
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
Section 10.01. Covenants and Conditions. Tenant's performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants and
conditions.
Section 10.02. Defaults. Tenant shall be in material default under this
Lease:
(a) If Tenant abandons or vacates the Property;
(b) If Tenant fails to pay rent or any other charge, interest or fee when
due;
(c) If Tenant fails to perform any of Tenant's non-monetary obligations
under this Lease for a period of thirty (30) days after written notice from
Landlord; provided that if more than thirty (30) days are required to complete
such performance, Tenant shall not be in default if Tenant commences such
performance within the thirty (30) day period and thereafter diligently pursues
its completion. However, Landlord shall not be required to give such notice if
Tenant's failure to perform constitutes a non-curable breach of this Lease. The
notice required by this Section is intended to satisfy any and all notice
requirements imposed by law on Landlord and Is not in addition to any such
requirement.
(d) (i) If Tenant makes a general assignment or general arrangement for the
benefit of creditors; (ii) if a petition for adjudication of bankruptcy or for
reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver Is appointed
to take possession of substantially all of Tenant's assets located
15
at the Property or of Tenant's interest in this Lease and possession is not
restored to Tenant within thirty (30) days; or (iv) if substantially all of
Tenant's assets located at the Property or of Tenant's interest in this Lease is
subjected to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days. If a court of competent jurisdiction
determines that any of the acts described in this subparagraph (d) is not a
default under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession) and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional Rent,
the excess, if any, of the rent (or any other consideration) paid in connection
with such assignment or sublease over the rent payable by Tenant under this
Lease.
Section 10.03. Remedies. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
(a) Terminate Tenant's right to possession of the Property by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Property to Landlord. In such event, Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, including (i) the worth at the time of the award of the unpaid
Base Rent, Additional Rent and other charges which Landlord had earned at the
time of the termination; (ii) the worth at the time of the award of the amount
by which the unpaid Base Rent, Additional Rent and other charges which Landlord
would have earned after termination until the time of the award exceeds the
amount of such rental loss that Tenant proves Landlord could have reasonably
avoided; (iii) the worth at the time of the award of the amount by which the
unpaid Base Rent, Additional Rent and other charges which Tenant would have paid
for the balance of the Lease term after the time of award exceeds the amount of
such rental loss that Tenant proves Landlord could have reasonably avoided; and
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under the
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, any costs or expenses Landlord incurs
in maintaining or preserving the Property after such default, the cost of
recovering possession of the Property, expenses of reletting, including
necessary renovation or alteration of the Property, Landlord's reasonable
attorneys' fees incurred in connection therewith, and any real estate commission
paid or payable. As used in subparts (i) and (ii) above, the "worth at the time
of the award" is computed by allowing interest on unpaid amounts at the rate of
fifteen percent (15%) per annum, or such lesser amount as may then be the
maximum lawful rate. As used in subpart (iii) above, the "worth at the time of
the award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award, plus one percent
(1%). If Tenant has abandoned the Property, Landlord shall have the option of
(i) retaking possession of the Property and recovering from Tenant the amount
specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b);
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(b) Exercise the remedy described in California Civil Code (S) 1951.4
(Lessor May Continue Lease in Effect After Lessee's Breach and Abandonment and
Recover Rent as it Becomes Due, if Lessee has Right to Sublet or Assign, Subject
Only to Reasonable Limitations);
(c) Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the state in which the Property is located.
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Section 10.04. Automatic Termination. Notwithstanding any other term or
provision hereof to the contrary, the Lease shall terminate on the occurrence of
any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 10.03 hereof, including the filing of an unlawful detainer
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action against Tenant. On such termination, Landlord's damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
incurs in connection with the filing, commencement, pursuing and/or defending of
any action in any bankruptcy court or other court with respect to the Lease; the
obtaining of relief from any stay in bankruptcy restraining any action to evict
Tenant; or the pursuing of any action with respect to Landlord's right to
possession of the Property. All such damages suffered (apart from Base Rent and
other rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Tenant in any bankruptcy or other proceeding.
ARTICLE ELEVEN: PROTECTION OF LENDERS
Section 11.01. Subordination. Landlord shall have the right to subordinate
this Lease to any ground lease, deed of trust or mortgage encumbering the
Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. Tenant shall cooperate with Landlord and any lender which is
acquiring a security interest in the Property or the Lease. Tenant shall execute
such further documents and assurances as such lender may require, and which may
include provisions to the effect that this Lease will not be amended,
surrendered or terminated without the lenders consent, that rent will not be
prepaid more than one (1) month in advance, and that the lender will not be
subject to any offsets or claims for monies previously paid to Landlord by
Tenant or for any damages caused by Landlord. Subject to the approval of the
lender, Tenant's right to quiet possession of the Property during the Lease Term
shall not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.
Section 11.02. Attornment. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale or by deed in lieu of foreclosure, Tenant shall
attorn to the transferee of or successor to Landlord's interest in the Property
and recognize such transferee or successor as Landlord under this Lease. Tenant
waives the protection of any statute or rule of law which gives or purports to
give Tenant any right to terminate this Lease or surrender possession of the
Property upon the transfer of Landlord's interest.
Section 11.03. Signing of Documents. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. If Tenant fails to do so within ten (10)
days after written request, Tenant hereby makes, constitutes and irrevocably
appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
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Section 11.04. Estoppel Certificates.
(a) Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why); and (v) such other representations or information with respect to Tenant
or the Lease as Landlord may reasonably request or which any prospective
purchaser or encumbrancer of the Property may require. Tenant shall deliver such
statement to Landlord within ten (10) days after Landlord's request. Landlord
may give any such statement by Tenant to any prospective purchaser or
encumbrancer of the Property. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord within such ten
(10)-day period, Landlord, and any prospective purchaser or encumbrancer, may
conclusively presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been canceled or terminated except as
otherwise represented by Landlord; (iii) that not more than one month's Base
Rent or other charges have been paid in advance; and (iv) that Landlord is not
in default under the Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.
Section 11.05. Tenant's Financial Condition. Within ten (10) days after
written request from Landlord, Tenant shall deliver to Landlord such financial
statements as Landlord reasonably requires to verify the net worth of Tenant or
any assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall
deliver to any lender designated by Landlord any financial statements required
by such lender to facilitate the financing or refinancing of the Property.
Tenant represents and warrants to Landlord that each such financial statement is
a true and accurate statement as of the date of such statement. All financial
statements shall be confidential and shall be used only for the purposes set
forth in this Lease.
ARTICLE TWELVE: LEGAL COSTS
Section 12.01. Legal Proceedings. If Tenant or Landlord shall be in breach
or default under this Lease, such party (the "Defaulting Party") shall reimburse
the other party (the "Nondefaulting Party") upon demand for any costs or
expenses that the Nondefaulting Party incurs in connection with any breach or
default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the provisions
of this Lease is commenced, the court in such action shall award to the party in
whose favor a judgment is entered, a reasonable sum as attorneys' fees and
costs. The losing party in such action shall pay such attorneys' fees and costs.
Tenant shall also indemnify Landlord against and hold Landlord harmless from all
costs, expenses, demands and liability Landlord may incur if Landlord becomes or
is made a party to any claim or action (a) instituted by Tenant against any
third party, or by any third party against Tenant, or by or against any person
holding any interest under or using the Property by license of or agreement with
Tenant; (b) for foreclosure of any
18
lien for labor or material furnished to or for Tenant or such other person; (c)
otherwise arising out of or resulting from any act or transaction of Tenant or
such other person; or (d) necessary to protect Landlord's interest under this
Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the
United States Code, as amended. Tenant shall defend Landlord against any such
claim or action at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs Landlord incurs in any such claim or action.
Section 12.02. Landlord's Consent. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with Tenant's request for Landlord's
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which Tenant proposes to do and which requires Landlord's consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
Section 13.01. Non-Discrimination. Tenant promises, and it is a condition
to the continuance of this Lease, that there will be no discrimination against,
or segregation of, any person or group of persons on the basis of race, color,
sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.
Section 13.02. Landlord's Liability; Certain Duties.
(a) As used in this Lease, the term "Landlord" means only the current owner
or owners of the fee title to the Property or Project or the leasehold estate
under a ground lease of the Property or Project at the time in question. Each
Landlord is obligated to perform the obligations of Landlord under this Lease
only during the time such Landlord owns such interest or title. Any Landlord who
transfers its title or interest is relieved of all liability with respect to the
obligations of Landlord under this Lease to be performed on or after the date of
transfer. However, each Landlord shall deliver to its transferee all funds that
Tenant previously paid if such funds have not yet been applied under the terms
of this Lease.
(b) Tenant shall give written notice of any failure by Landlord to perform
any of its obligations under this Lease to Landlord and to any ground lessor,
mortgagee or beneficiary under any deed of trust encumbering the Property whose
name and address have been furnished to Tenant in writing. Landlord shall not be
in default under this Lease unless Landlord (or such ground lessor, mortgagee or
beneficiary) fails to cure such non-performance within thirty (30) days after
receipt of Tenant's notice. However, if such non-performance reasonably requires
more than thirty (30) days to cure, Landlord shall not be in default if such
cure is commenced within such thirty (30)-day period and thereafter diligently
pursued to completion.
(c) Notwithstanding any term or provision herein to the contrary, the
liability of Landlord for the performance of its duties and obligations under
this Lease is limited to Landlord's interest in the Property and the Project,
and neither the Landlord nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.
Section 13.03. Severability. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or
19
invalidate the remainder of such provision or this Lease, which shall remain in
full force and effect.
Section 13.04. Interpretation. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part of
the terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Property with Tenant's expressed or
implied permission.
Section 13.05. Incorporation of Prior Agreements; Modifications. This Lease
is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
Section 13.06. Notices. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified mail,
return receipt requested, postage prepaid, and shall be deemed to be given upon
receipt if personally delivered, or if mailed, forty-eight (48) hours after
being deposited in the United States mail, postage prepaid. In lieu of mailing,
either party may cause delivery of such notices, demands and requests to be made
by personal service, telegram or air freight, provided that written proof of
delivery is given to the sender. Notices to Tenant shall be delivered to the
address specified in Section 1.03 above, except that upon Tenant's taking
------------
possession of the Property, the Property shall be Tenant's address for notice
purposes. Notices to Landlord shall be delivered to the address specified in
Section 1.02 above. All notices shall be effective upon delivery. Either party
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may change its notice address upon written notice to the other party.
Section 13.07. Waivers. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or its
acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
Section 13.08. No Recordation. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties be
recorded. The party requiring such recording shall pay all transfer taxes and
recording fees.
Section 13.09. Binding Effect; Choice of Law. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.
Section 13.10. Corporate Authority; Partnership Authority. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of
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Tenant's Board of Directors authorizing the execution of this Lease or other
evidence of such authority reasonably acceptable to Landlord. If Tenant is a
partnership, each person or entity signing this Lease for Tenant represents and
warrants that he or it is a general partner of the partnership, that he or it
has full authority to sign for the partnership and that this Lease binds the
partnership and all general partners of the partnership. Tenant shall give
written notice to Landlord of any general partners withdrawal or addition.
Within thirty (30) days after this Lease is signed. Tenant shall deliver to
Landlord a copy of Tenant's recorded statement of partnership or certificate of
limited partnership.
Section 13.11. Joint and Several Liability. All parties signing this Lease
as Tenant shall be jointly and severally liable for all obligations of Tenant.
Section 13.12. Force Majeure. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions,
Section 13.13. Execution of Lease. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
Section 13.14. Survival. All representations and warranties of Landlord and
Tenant shall survive the termination of this Lease.
Section 13.15. Guaranty. Currently herewith and as a condition to the
effectiveness of this Lease, XXXXXX X. XXXXXXXX and XXXXXX X. XXXXXXXX
(collectively "Guarantors") shall execute a Lease Guaranty in the form of
Exhibit "B" attached hereto pursuant to which the Guarantors shall personally,
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jointly and severally guarantee the Rent, the Additional Rent, and the
performance of the remaining terms of this Lease pursuant to the terms and
conditions set forth in a Guaranty executed by them concurrently herewith.
Section 13.16. Assignment of Subleases. Landlord does hereby assign to
Tenant all of Landlord's right, title and interest in and to the leases and
occupancy agreements outstanding as of the date of this Lease with occupants and
tenants of the Premises.
SIGNATURES ON NEXT PAGE
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Landlord and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below.
LANDLORD: TENANT:
G&L CORONADO LLC CORONADO MANAGERS CORP.
a Delaware limited liability company a Delaware corporation
By: CORONADO MANAGERS CORP.
a Delaware corporation By /s/ Xxxxxx X. Xxxxxxxx
Its Managing Member -------------------------------
Xxxxxx X. Xxxxxxxx
Secretary
By /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxx, Secretary
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EXHIBIT "A"
Property
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Exhibit A
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All of Block 10 of Coronado Bath, South Island, in the City of Coronado,
County of San Diego, State of California, according to Map thereof No. 376,
filed in the Office of the County Recorder of San Diego County, November 12,
1886, more particularly described as follows:
Beginning at the most northerly corner of said Block 10, said corner being on
the arc of a curve concave northwesterly and having a radius of 508.34 feet, a
radial line to said point bears South 63(degree)33'48" East; thence
southwesterly, along the northwesterly line of Block 10, along the arc of said
curve, through a central angle of 38(degree)28'18", 341.33 feet to a point on a
curve, concave northerly and having a radius of 925.37 feet, a radial line to
said point bears South 4(degree)16'0l" East; thence easterly, along the
southerly line of Block 10, along the arc of said curve, through a central angle
of 14(degree)31'58", 234.72 feet to a point of reverse curve with a curve
concave southerly and having a radius of 508.34 feet, a radial line to said
point bears North 18(degree)47'59" West; thence easterly along the southerly
line of Block 10, along the arc of said curve, through a central angle of
13(degree)44'01", 121.85 feet to a point on a curve concave northeasterly, and
having a radius of 548.34 feet, a radial line to said point bears Xxxxx
00(xxxxxx)00'00" Xxxx; thence northwesterly, along the northeasterly line of
Block 10, along the arc of said curve, through a central angle of
20(degree)30'l0", 196.22 feet to the point of beginning.
2
EXHIBIT "B"
Lease Guaranty
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This GUARANTY OF LEASE ("Guaranty") is made and entered into as of the 1/st/
day of December, 1998, and is by and between XXXXXX X. XXXXXXXX and XXXXXX M,
XXXXXXXX (collectively "Guarantor") in favor of G&L CORONADO LLC, a Delaware
limited liability company ("Landlord") with respect to the following
circumstances:
1. Landlord has entered into a lease ("Lease"), dated concurrently
herewith, with CORONADO MANAGERS CORP., a Delaware corporation ("Tenant"),
whether acting on behalf of itself or any estate created by the commencement of
a case under Title 11 of the United States Code or any successor statute thereto
(the "Bankruptcy Code") or any other insolvency, bankruptcy, reorganization or
liquidation proceeding, or by any trustee under the Bankruptcy Code, liquidator,
sequestrator or receiver of Tenant or Tenant's property or similar person duly
appointed pursuant to any law generally governing any insolvency, bankruptcy,
reorganization, liquidation, receivership or like proceedings.
2. In consideration of Landlord entering into the Lease with Tenant, and
with full knowledge that Landlord would not have entered into the Lease with
Tenant were it not for the agreements of Guarantor hereunder, Guarantor hereby
agrees as follows:
a. Guarantor hereby guarantees the full, faithful and timely payment
and performance by Tenant of all of the payments, covenants and other
obligations of Tenant under or pursuant to the Lease (all of which shall
hereinafter be referred to as the "Obligations"). If Tenant shall default at any
time in the payment of any rent or any other sums, costs, or charges whatsoever,
or in the performance of any of the other covenants and obligations of Tenant,
under or pursuant to the Lease, then Guarantor(s), at Guarantor's expense, shall
on demand of Landlord fully and promptly, and pay all rent, sums, costs and
charges to be paid by Tenant, and perform all the other covenants and
obligations to be performed by Tenant under or pursuant to the Lease. In
addition, Guarantor shall, on Landlord's demand, pay to Landlord any and all
sums due to Landlord, including (without limitation) all interest and late
charges with respect to past due obligations of Tenant, costs advanced by
Landlord, and damages and all expenses (including attorneys' fees and litigation
costs) that may arise in consequence of Tenant's default. Guarantor hereby
waives all requirements of notice of the acceptance of this Guaranty. Guarantor
specifically agrees that this is a guaranty of payment and performance, not of
collection or satisfaction of judgment.
b. In case of the dissolution, liquidation or insolvency (howsoever
evidenced) of, or the institution of bankruptcy or receivership proceedings
against Tenant or Guarantor, all of the Obligations then existing shall, at the
option of Landlord, immediately become due or accrued and payable from
Guarantor. In the event of a default by Tenant under the Lease, all dividends or
other payments received thereafter by Guarantor from Tenant or on account of the
Obligations from whatsoever source, shall be taken and applied as payment in
gross, and this Guaranty shall apply to and secure any ultimate balance that
shall remain owing to Landlord.
c. The liability hereunder shall in no way be terminated, diminished,
affected or impaired by (and Landlord is hereby authorized to make, from time to
time, without notice to
Guarantor) any extensions, renewals, amendments, indulgences, modifications,
transfers or assignments in whole or in part of the Lease by Landlord, whether
or not notice thereof is given to Guarantor, by reason of sums paid or payable
to Landlord from the proceeds of any insurance policy or condemnation award,
sale, pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or other
disposition of any of the Obligations, either express or implied, or of any
security, additional security or collateral therefor. The liability hereunder
shall in no way be terminated, diminished, affected or impaired by any
acceptance by Landlord of any security or additional security for, or other
guarantors, or by the invalidity, unenforceability, loss of, change in priority
or reduction in value in or loss of value of any of the security or additional
security, or by any failure, neglect or omission on the part of Landlord to
realize upon or protect any of the Obligations, or any collateral or security or
additional security therefor, or to exercise any lien upon or right of
appropriation of any monies, credits or property of Tenant, possessed by
Landlord, toward the liquidation of the Obligations, or by any application of
payments or credits thereon or by any failure, neglect or omission on the party
of Landlord to enforce the obligations of the other Guarantor, or by the
surrender, compromise, settlement, release, change, modification or other
disposition of the obligations of the other Guarantors. Landlord shall have the
exclusive right to determine how, when and what application of payments and
credits, if any, shall be made on the Obligations, or any part thereof. In order
to hold Guarantor liable hereunder, there shall be no obligation on the part of
Landlord, at any time, to resort for payment to Tenant or to any other Guaranty,
or to any other persons or corporations, their properties or estates, or resort
to any collateral, security, property liens or other rights or remedies
whatsoever, and Landlord shall have the right to enforce this Guaranty
irrespective of whether or not other proceedings or steps seeking resort to or
realization upon or from any of the foregoing are pending.
a. All Landlord's diligence in collection or protection, and all
Landlord's demand and notice, as to any and everyone, whether or not Tenant or
Guarantor or others, of default and of non-payment and of the creation and
existence of any and all of the Obligations, and of any security and collateral
therefor, and of the acceptance of this Guaranty, and of any and all extensions
of credit and indulgence hereunder, are waived.
3. Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor hereby waives any claim or other rights which Guarantor may now have
or hereafter acquire against Tenant or any other guarantor of all or any of
Tenant's obligations under the Lease that arise from the existence or
performance of Guarantor's obligations under this Guaranty or otherwise (all
such claims and rights are referred to as "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to participate in any
claim or remedy of Landlord against Tenant or any collateral which Landlord now
has or hereafter acquires, whether or not such claim, remedy, or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without litigation, the right to take or receive from
Tenant, director or indirectly, in cash or other property or by setoff or in any
other manner payment, or security on account of such claim or other rights. If,
notwithstanding the foregoing provisions, any amount shall be paid to Guarantor
on account of any such Guarantors conditional rights and either (a) such amount
is paid to Guarantor at any time when any of Tenant's obligations under the
Lease shall not have been paid or performed in full, or (b) regardless of when
such amount is paid to Guarantor, any payment made by Tenant to landlord is at
any time determined to be a Preferential Payment, then such amount paid to
Guarantor shall be held in trust for the benefit of Landlord and shall forthwith
be paid to landlord to be
2
credited and applied upon Tenant's obligations under the Lease, whether matured
or unmatured, in such order as Landlord, in its sole and absolute discretion,
shall determine. To the extent that any of the foregoing provisions of this
Section 4 shall not be enforceable, Guarantor agrees that until the period of
---------
time has expired during which any payment made by Tenant or Guarantor to
Landlord may be determined to be a Preferential Payment, Guarantor's Conditional
Rights to the extent not validly waived shall be subordinate to Landlord's right
to full payment and performance of all the obligations of Tenant under the Lease
and Guarantor shall not enforce Guarantor's Conditional Rights during such
period.
4. Landlord may, without any notice whatsoever to any, sell, mortgage,
encumber, hypothecate, assign or transfer the Lease and all of the Obligations,
or any part thereof, or grant participation therein, and in that event each and
every immediate and successive grantor, mortgagor, trustee under a trust deed in
the nature of a mortgage, assignee, transferee, or holder or participant in all
or any part of the Lease or Obligations, shall have the right to enforce this
Guaranty, by suit or otherwise, for the benefit of such grantor, mortgagor,
trustee under a trust deed in the nature of a mortgage, assignee, transferee,
holder or participant, as fully as if such grantor, mortgagor, trustee under a
trust deed in the nature of the mortgage, assignee, transferee, holder or
participant were herein by name specifically given such rights, powers and
benefits; but Landlord shall have an unimpaired right to enforce this Guaranty
for the benefit of Landlord or any such participant, as to so much of the
Obligations that it has not sold, assigned or transferred.
5. Guarantor waives any and all defenses, claims and discharges of Tenant,
or any other obligor, pertaining to the Obligations, except the defense of
discharge by payment in full. Without limiting the generality of the foregoing,
Guarantor will not assert, plead or enforce against Landlord any defense of
waiver, release, discharge in bankruptcy, statute of limitations, res judicata,
statute of frauds, anti-deficiency statute, fraud, incapacity, minority, usury,
illegality or unenforceability which may be available to Tenant or any other
person liable in respect of any of the Obligations, or any setoff available
against Landlord to Tenant or any such other person, whether or not on account
of a related transaction. Guarantor agrees that Guarantor shall be and remain
liable for any deficiency remaining after foreclosure of any collateral securing
the Obligations, whether or not the liability of Tenant or any other obligor for
such deficiency is discharged pursuant to statute or judicial decision.
6. Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the Obligations have been fully paid and
performed and the period of time has expired during which any payment made by
Tenant or Guarantor to Landlord may be determined to be a Preferential Payment
(hereinafter defined). Guarantor further agrees that to the extent Tenant or
Guarantor makes any payment to Landlord in connection with the obligations of
Tenant under the Lease and all or any part of such payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by Landlord or paid over to a trustee, receiver, or any other entity,
whether under any bankruptcy act or otherwise (any such payment is hereinafter
referred to as a "Preferential Payment"), then this Guaranty shall continue to
be effective or shall be reinstated, as the case may be, and, to the extent of
such payment or repayment by Landlord, the obligations or part thereof intended
to be satisfied by such Preferential Payment shall be revived arid continued in
full force and effect as if said Preferential Payment had not been made.
7. Any debt, Obligations, obligations and liabilities (the "Debts") of
Tenant now or hereafter held by Guarantor, is hereby subordinated to the
Obligations of Tenant to Landlord;
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and, in the event of a default by Tenant under the Lease, such Debts of Tenant
to Guarantor if Landlord so requests shall be collected, enforced and received
by Guarantor as trustee for Landlord and shall be paid over to Landlord on
account of the Obligations of Tenant to Landlord, but without reducing or
affecting in any manner the liability of Guarantor under the other provisions of
this Guaranty.
8. Guarantor agrees at any time and from time to time, on not less than
fourteen (14) days prior request by Landlord, to execute, acknowledge and
deliver to Landlord and such Landlord's proposed grantors, mortgagees, trustee
under a trust deed in a nature of a mortgage, successor or Tenant of the
Obligations a statement in writing certifying that this Guaranty is unmodified
and in full force or effect (or if the same has been modified, that the same is
in full force and effect as modified and stating the modifications) and stating
whether Guarantor claims any defenses, offsets or counterclaims against the
enforcement of this Guaranty (and if so, the nature and amount of such defense,
offset or counterclaim). Guarantor understands that the written certificate
delivered pursuant to this paragraph may be relied upon by any prospective
purchaser, mortgagee or trustee under a trust deed in the nature of a mortgage
of the Lease or Obligations.
9. Guarantor hereby consents to any remedy pursued by Landlord or its
successor in interest to enforce its rights under the Lease, in whatever order
such party may choose, including any remedies which may affect or destroy
Guarantor's right of subrogation, contribution or reimbursement or the right of
Guarantor to proceed against Tenant for reimbursement. Without limiting the
generality of the foregoing, Guarantor hereby waives any rights Guarantor may
have under California Civil Code sections 2809, 2819, 2845, 2849, and 2850, as
they may be amended or modified from time to time, and any similar or successor
statutes. Landlord shall have no obligation to protect, secure or insure the
real estate, including all improvements thereon, described in the Lease or any
security or additional security, security interests, liens or encumbrances of
any collateral or additional collateral or interests in properties subject
thereto. Guarantor agrees that there are no conditions or limitations to
Landlord's right to enforce this Guaranty.
10. Any invalidity or unenforceability of any provision or application of
this Guaranty shall not affect other lawful provisions and applications hereof,
and to this end the provisions of this Guaranty are declared to be severable.
This Guaranty shall be construed according to the laws of the State of
California, in which State it shall be performed by Guarantor and may not be
waived, amended, released or otherwise changed except by a writing signed by
Landlord.
11. Guarantor agrees that Landlord shall have the right to file lawsuits
from time to time against Guarantor to enforce this Guaranty in any court or
courts of competent jurisdiction in Los Angeles County, State of California, and
in furtherance thereof, Guarantor hereby submits itself to and consents to the
jurisdiction of any such court of competent jurisdiction for lawsuits in Los
Angeles County, State of California.
12. If any legal action is brought to enforce or interpret any part of this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs in connection therewith. Any judgment
shall include an attorneys' fees clause which shall entitle the judgment
creditor to recover attorneys' fees incurred to enforce a judgment hereon, which
attorneys' fees shall be an element of post-judgment costs. The "prevailing
party" shall be the party who is entitled to recover his costs of suit whether
or not the suit proceeds to final judgment. The successful or prevailing party
in any legal action brought to
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enforce or interpret any part of this Agreement shall be entitled to recover
reasonable attorneys' fees and other costs incurred after a judgment has been
entered in defending, perfecting or enforcing the judgment, which attorneys'
fees shall be an element of post-judgment costs. The parties agree that this
post-judgment attorneys' fee provision is a distinct contractual agreement
severable from the rights set forth elsewhere in this Agreement and shall not
merge into any judgment enforcing or interpreting any other part of this
agreement.
13. This Guaranty and every part thereof shall be effective upon delivery
to Landlord, without further act, condition or acceptance by Landlord, shall be
binding upon Guarantor and upon its successors and assigns and shall inure to
the benefit of Landlord, its grantors, mortgagees, trustees under a trust deed
in nature of a mortgage, successors and assigns. Guarantor waives notice of
Landlord's acceptance hereof.
SIGNED AND DELIVERED by Guarantor, at Beverly Hills, California, this 1/st/
day of December, 1998.
/s/ Xxxxxx X. Xxxxxxxx
--------------------------
XXXXXX X. XXXXXXXX
000 X. Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxxx
--------------------------
XXXXXX X. XXXXXXXX
000 X. Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
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