EXHIBIT 10.9
ENCINO GARDENS OFFICE BUILDING LEASE AGREEMENT
BY AND BETWEEN
ENCINO GARDENS, LLC
a California Limited Liability Company
AND
ADVANCED KNOWLEDGE, INC.,
d.b.a. Advanced Knowledge Training, Inc.
Dated: July 24, 2003
1
THE ENCINO GARDENS OFFICE BUILDING
OFFICE LEASE AGREEMENT
In consideration of the rents and covenant hereinafter set forth,
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
the following described Premises upon the terms and conditions set
forth below:
FUNDAMENTAL LEASE PROVISIONS
A. Date: July 24, 2003
X. Xxxxxx: ENCINO GARDENS, LLC, a California Limited Liability
Company
C. Lessee: ADVANCED KNOWLEDGE, INC.
D. Lessee's Trade Name: Advanced Knowledge Training, Inc.
E. Use of Premises: General Office Use
F. Lease Term: Twenty-four (24) Months, Commencing on September 1,
2003 ("Commencement Date") and Expiring on August
31, 2005 (Expiration Date")
G. Minimum Rent: 09/01/03 to 08/31/04 $2,100.00 Per month
09/01/04 to 08/31/05 $2,185.00 Per month
H. Base Year: 2003
I. Escalation And Utility
Percentage: 1.7%
J. Premises: Suite Number #208 (the "Premises") on the 2nd floor
located at "17337 Ventura Boulevard, Encino,
California, as shown on the fl our plan attached
hereto as Exhibit "A" and approximately 0000
Xxxxxxxx Xxxxxx Feet. The Encino Gardens Office
Building is defined as "17327-17337 Xxxxxxx Xxxx.
Xxxxxx. Xxxxxxxxxx 00000 (the "Building").
Notwithstanding the stipulated "rentable feet",
Lessee acknowledges that the Minimum Annual Rent
has been agreed upon without regard to the actual
rentable feet of the Premises or the Office
Building, and accordingly shall not be adjusted
even if the actual rentable feet of the Premises or
Office Building is different.
2
K. Notices Addresses: To Lessor: ENCINO GARDENS, LLC
00000 Xxxxxxx Xxxx.,
Xxxxxx xx xxx Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
(Tel) 000-000-0000
To Lessee: ADVANCED KNOWLEDGE, INC.
ATTN: Xxxxx Xxxxx
00000 Xxxxxxx Xxxx., Xxxxx # 000
Xxxxxx, XX 00000
(Tel) 818-
L. Security Deposit: $2,185.00
M. Parking: Lessee shall have the right to use four (4) parking
spaces in the Building Parking Lot at Building
prevailing rate.
[page break in original]
LEASE
1. Parties. This Lease, dated the 24th day of July, 2003 is made by and
between ENCINO GARDENS, LLC a California Limited Liability Company ("Lessor"),
and ADVANCED KNOWLEDGE, INC., d.b.a. Advanced Knowledge Training, Inc.
("Lessee").
2. Premises Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor for the term, at the rental, and upon all of the conditions set forth
herein, that certain real property situated in the County of Los Angeles, State
of California, commonly known as 00000 Xxxxxxx Xxxxxxxxx, Xxxxx # 000, Xxxxxx,
Xxxxxxxxxx 00000. Said real property including the land and all improvements
therein, are herein called "the Premises."
3. Term.
3.1 Term. The term of this Lease shall be for twenty-four (24)
months, commencing on September 1, 2003 and expiring on August 31, 20005 unless
sooner terminated pursuant to any provision hereof.
3.2 Delay in Possession. Notwithstanding said commencement date,
if for any reason Lessor cannot deliver possession of the Premises to Lessee on
said date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Lessee hereunder
or extend the term hereof, but in such case, Lessee shall not be obligated to
pay rent until possession of the Premises is tendered to Lessee; provided,
however, that if Lessor shall not have delivered possession of the Premises
within 150 days from said commencement date, Lessee may,
3
at Lessee's option, by notice in writing to Lessor within ten (10) days
thereafter, cancel this Lease, in which event the parties shall be discharged
from all obligations hereunder.
3.2 Early Possession. If Lessee occupies the Premises prior to
said commencement date, such occupancy shall be subject to all provisions
hereof, such occupancy shall not advance the termination date, and Lessee shall
pay rent for such period at the initial monthly rates set forth below.
4. Rent.
4.1 Minimum Annual Rent. Lessee shall pay Minimum Annual Rent as
stated in Fundamental Lease Provision "G" in twelve (12) equal monthly
installments during each year, in advance, on the first day of each calendar
month, commencing on the first day of the term of this Lease. If the lease term
commences on a day other than the first day of a month, then the rent for the
first fractional month shall be computed on a daily basis from the date of
commencement to the end of such month. All rent shall be paid in lawful money of
the United States of America and shall be paid without deduction off-set, prior
notice or demand, at the office of the Buildings or such other place as Lessor
may designate.
4.2 Adjustment of Minimum Annual Rent. The minimum rent payable
pursuant to Section 4.1 hereof shall be increased effective September 1, 2004
("Adjustment Date").
4.3 Additional Rent. Lessee shall pay as additional rent all other
sums of money or charges required to be paid pursuant to the terms of this
Lease, whether or not the same be designated "Additional Rent."
5. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof $2,85.00 as security for Lessee's faithful performance of Lessee's
obligations hereunder, If Lessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Lease,
Lessor may use, apply or retain all or any portion of said deposit for the
payment of any rent or other charge in default or for the payment of any other
sum to which Lessor may become obligated by reason of Lessee's default, or to
compensate Lessor for any loss or damage which Lessor may suffer thereby. If
Lessor so uses or applies all or any portion of said deposit, Lessee shall
within ten (10) days after written demand therefor deposit cash with Lessor in
an amount sufficient to restore said deposit to the full amount herein stated
and Lessee's failure to do so shall be a material breach of this Lease. Lessor
shall not be required to keep said deposit separate from its
[page break in original]
general accounts. If Lessee performs all of Lessee's obligations hereunder, said
deposit, or so much thereof as has not theretofore been applied by Lessor, shall
be returned, without payment of interest or other increment for its use, to
Lessee (or, at Lessee's option, to the last assignee, if any, of Lessees
interest hereunder) at the expiration of the
4
term hereof, and after Lessee has vacated the Premises. No trust relationship is
created herein between Lessor and Lessee with respect to said Security Deposit.
In the event of any bankruptcy or other insolvency against Lessee, it
is agreed that all such Security Deposit held hereunder shall be deemed to be
applied by Lessor to rent, sales tax and other charges, due to Lessor for the
last month of the Lease Term and each proceeding month until such Security
Deposit is fully applied.
Lessor hereby acknowledges a security deposit in the amount of
$1,767.20 from a previous lease. Concurrent with execution of this lease, Lessee
shall pay to Lessor $ 417.80 as additional security deposit.
6 Use.
6.1 Use. The Premises shall be used and occupied only for GENERAL
OFFICE USE and for no other purpose.
Lessee shall not use or permit the Premises to be used for any
other purpose without first obtaining Lessor's written consent. Nothing
contained in this Lease by express statement or by implication, shall be deemed
to grant to Lessee the exclusive rights to conduct or carry on in the Office
Building the type of business referred to herein.
Lessee covenants and agrees that: it will not use or suffer or
permit any person or person(s) to use the Premises or any part thereof in any
unlawful manner or for any unlawful purposes. Lessor shall have the right to
establish and make, and from time to time to change, alter and amend, and to
enforce against Lessee and all persons upon the Premises such reasonable rules
and regulations concerning the use of the Premises as Lessor may deem necessary
or advisable. Lessee agrees to conform to and abide by such rules and
regulations.
The initial rules for the operation of the Premises (to which
Lessee hereby agrees) are set forth in Exhibit "B" attached hereto and by this
reference made a part hereof.
Lessor specifically reserves the right to change the size,
configuration, design, layout and all o1her aspects of the parking facility at
any time, and Lessee acknowledges and agrees that Lessor may, without incurring
any liability to Lessee and without abatement of rent under this Lease, from
time to time, close-off or restrict access to the parking facility for the
purposes of permitting or facilitating any such construction, alteration or
improvements.
6.2 Compliance With Law.
5
6.2.1 Lessor warrants to Lessee that the Premises, in its
existing state, on the date that the Lease term commences, but without regard to
the use for which Lessee will use the Premises, does not violate any covenants
or restrictions of record, or any applicable building code, regulation or
ordinance in effect on such Lease term commencement date. In the event it is
determined that this warranty has been violated, then it shall be the obligation
of the Lessor, after written notice from Lessee, to promptly, at Lessor's sole
cost and expense, rectify any such violation. In the event that Lessee does not
give to Lessor written notice of the violation of this warranty within one (1)
year from the commencement of the term of this Lease, it shall be conclusively
deemed that such violation did not exist, and the correction of the same shall
be the obligation of Lessee. The warranty contained in this paragraph 10.4 (b)
shall be of no force or effect, if prior to the date of this Lease, Lessee was
the occupant of the Premises.
6.2.2 Except as provided in paragraph 10.4 (b), Lessee
shall, at Lessee's expense, comply promptly with all applicable statutes,
ordinances, rules, regulation, orders, covenants and restrictions of record, and
requirements in effect during the tenn or any part of the term hereof,
regulating the use by Lessee of the Premises. Lessee shall not use nor permit
the use of the Premises in any manner that will tend to create waste or a
nuisance or, if there shall be more than one tenant in the building containing
the Premises, shall tend to disturb such other tenants.
[page break in original]
6.3 Condition of Premises. Except as otherwise provided
in this Lease, Lessee hereby accepts the Premises in their condition existing as
of the Lease commencement date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any covenants or restrictions of record, and accepts
this Lease subject thereto and to all matters disclosed thereby and by any
exhibits attached hereto. Lessee acknowledges that neither Lessor nor Lessor's
agent has made any representation or warranty as to the present or future
suitability of the Premises for the conduct of Lessee's business, except as
stated herein.
7. Maintenance, Repairs and Alterations.
7.1 Lessor's Obligations. Subject to the provisions of Paragraphs
6, 7.2 and 9, and except for damage caused by the negligent or intentional act
or omission of Lessee, Lessee's agents, employee's or invitees in which event
Lessee shall repair the damage, Lessor at Lessor's expense shall keep in good
order, condition, and repair the foundations, exterior walls and the exterior
roof of the Premises. Lessor shall not, however, be obligated to paint such
exterior, nor shall Lessor be required to maintain the interior surface of
exterior walls, windows, doors or plate glass. Lessor shall have no obligation
to make repairs under this Paragraph 7.1 until a reasonable time after receipt
of the notice of the need for such repairs. Lessee expressly waives the benefits
of any statute now or hereafter in effect which would otherwise afford Lessee
the right to make repairs at Lessor's expense or to terminate this Lease because
of Lessor's failure to keep the Premises in good order, condition and repair.
6
7.2 Lessee's Obligations. Subject to the provisions of Paragraphs
6,7.1 and 9, Lessee at Lessee's expense, shall keep in good order, condition and
repair the Premises and every part thereof including, all electrical, and
equipment within the Premises, fixtures, interior walls, and interior surface of
exterior walls, ceilings, windows, doors, door locks, plate glass, located
within the Premises, and signs located on the Premises or around the Premises.
7.3 Surrender. On the last day of the term hereof, or on any
sooner termination, Lessee shall surrender the Premises to Lessor in the same
condition as when received, ordinary wear and tear excepted, clean and free of
debris. Lessee shall repair any damage to the Premises occasioned by the
installation or removal of Lessee's trade fixtures, furnishings and equipment
pursuant to Paragraph 12.10 (h) which repair shall include the patching and
filling of holes and repair of structural damage.
7.4 Lessor's Rights. If Lessee fails to perform Lessee's
obligations under this Paragraph 7, or under any other paragraph of this Lease,
Lessor may at its option (but shall not be required to) enter upon the Premises
after five (5) days prior written notice to Lessee (except in the case of any
emergency, in which case no notice shall be required), perform such obligations
on Lessee's behalf and put the same in good order, condition and repair, and the
reasonable and necessary cost thereof together with interest thereon at the
maximum rate then allowable by law shall become due and payable upon written
notice and proof thereof as additional rental to Lessor together with Lessee's
next rental installment.
7.5 Alterations and Additions.
7.5.1 Lessee shall not, without Lessor's prior written
consent make any alterations, improvements, additions, or Utility Installations
in, on or about the Premises, except for non-structural alterations not
exceeding $1,000 in costs. As used in this Paragraph 7.5 the term "Utility
Installation" shall mean carpeting, window coverings, air lines, power panels,
electrical distribution systems, lighting fixtures, space heaters, air-
conditioning, plumbing, and fencing. Lessor may require that the Lessee remove
any or all of said alterations, improvements, additions or Utility Installations
at the expiration of the term, and restore the Premises to their prior
condition. Lessor may require Lessee to provide Lessor, at no cost and expense
to Lessor, a lien and completion bond in an amount equal to one and one-half
times the estimated cost of such improvements, to insure Lessor against any
liability for mechanic's and material men's liens and to insure completion of
the work. Should Lessee make any alterations, improvements, additions or Utility
Installations without the prior approval of Lessor, Lessor may require that
Lessee remove any or all of the same.
7.5.2 Any alterations, improvements, additions or Utility
Installations in, or about the Premises that Lessee shall desire to make and
which requires the consent of the Lessor shall be presented to Lessor in written
form, with proposed detailed plans. If Lessor shall give its consent, the
consent shall be deemed conditioned upon Lessee acquiring a
[page break in original]
permit to do so from appropriate governmental agencies, the furnishing of a copy
thereof
7
to Lessor prior to the commencement of the work and the compliance by Lessee of
all conditions of said permit in a prompt and expeditious manner.
7.5.3 Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished, for Lessee at or for use
in the Premises, which claims are or may be secured by any mechanics' or
material man's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days notice prior to the commencement of any
work in the Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Lessee shall, in
good faith, contest the validity of any such lien, claim or demand, then Lessee
shall, at its sole expense defend itself and Lessor against the same and shall
pay and satisfy any such adverse judgment that may be rendered thereon or secure
Lessor for payment of same before the enforcement thereof against the Lessor or
the Premises, upon the condition that if Lessor shall require, Lessee shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to
such contested lien claim or demand indemnifying Lessor against liability for
the same and holding the Premises free from the effect of such lien or claim.
Lessor may require Lessee to pay Lessor's attorneys' fees and costs in
participating in such action if Lessor shall decide it is in its best interest
to do so.
7.5.4 Unless Lessor requires their removal, as set forth in
Paragraph 7, all alterations, improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee),
which may be made on the Premises, shall become the property of Lessor and
remain upon and be surrendered with the Premises at the expiration of the term.
7.5.6 Except for any initial improvements which Lessor has
expressly agreed to provide pursuant to Exhibit "C" attached hereto, Lessee is
leasing the Premises "AS-IS" on the date hereof. The taking of possession by
Lessee of the Premises shall be conclusive evidence as against Lessee that the
Premises and the Building were in good and satisfactory condition at the time
such possession was taken, subject to latent defects and deficiencies listed in
writing by Lessee to Lessor within thirty (30) days after the date Lessee takes
possession.
7.6 Common Areas--Operating Cost.
7.6.1 Lessee shall pay to Lessor at the times set forth in
this Paragraph Lessee's share of the increases in Lessor's operating costs for
the building in which the Premises are located over the operating costs for
calendar year 2003 ("Base").
7.6.2 Lessee's proportionate share of the increase in
operating costs shall be the ratio of the total increase in Lessor's operating
costs that the total number of square feet in the Premises bears to the total
number of rentable square feet in the building in which the Premises are
located.
7.6.3 Lessor's operating costs include, without limitation,
all costs of any
8
kind paid or incurred by Lessor in operating, maintaining, cleaning, equipping,
protecting, lighting, repairing, replacing, heating, air conditioning, and
maintaining the Premises. The costs shall include, without limitation, and if
applicable, utilities, supplies, janitorial services, employees' wages, social
security and unemployment insurance contributions, union benefits, rubbish
removal, maintenance and replacement of landscaping and premiums for public
liability and property damage and fire and extended coverage insurance.
7.6.4 After the end of each calendar year, Lessor shall
furnish to Lessee a statement showing the total operating costs for the calendar
year just ended, and Lessee's share of any increases. Lessee shall pay to Lessor
the amount of Lessee's share of the increases within ten (10) days after Lessor
furnishes the statement.
7.6.5 If the term expires on a date other than December 31,
Lessee's obligation under this Paragraph in the year in which the term expires
shall be payable monthly in advance at the time minimum monthly rent is payable,
and in lieu of the sums set forth in this Paragraph, Lessee shall pay to Lessor
1/12th of the sums due from Lessee to Lessor for the calendar year immediately
preceding the year in which the term of this Lease expires.
[page break in original]
7.6.6 Lessor may request from Lessee monthly reimbursement,
which shall be paid with the next monthly rental payment, for Lessee's share of
total operating expenses as outlined herein.
7.6.7 After the end of the calendar year in which this
Lease expires or terminates, Lessor shall furnish to Lessee a statement of the
total operating costs for the calendar year, and of Lessee's share of any
increases. If Lessee's share of operating cost increases for that calendar year
exceeds the monthly payments made by Lessee, Lessee shall pay Lessor the
deficiency within ten (10) days after receipt of the statement. If Lessees
payments made during the calendar year exceed Lessee's share of operating cost
increases, Lessor shall pay Lessee the excess at the time Lessor furnishes the
statement to Lessee.
8. Insurance Indemnity.
8.1 Liability Insurance -Lessee. Lessee shall, at Lessees expense
obtain and keep in force during the term of this Lease a policy of Combined
Single Limit, Bodily Injury and Property Damage insurance insuring Lessor and
Lessee against any liability arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be a combined single limit policy in an amount not less than $500,000 per
occurrence. The policy shall contain cross liability endorsements and shall
insure performance by Lessee of the indemnity provisions of this Paragraph 8.
The limits of said insurance shall not, however, limit the liability of Lessee
9
hereunder.
8.2 Liability Insurance - Lessor. Lessor shall obtain and keep in
force during the term of this Lease a policy of Combined Single Limit Bodily
Injury, Property Damage insurance, insuring Lessor, but not Lessee, against any
liability arising out of the ownership, use, occupancy, or maintenance of the
Premises, and all areas appurtenant thereto in an amount not less than Five
Hundred Thousand Dollars ($500,000.00) per occurrence.
8.3 Property Insurance. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Premises, but not Lessee's fixtures, equipment or tenant
improvements in an amount not to exceed the full replacement value thereof, as
the same may exist from time to time, providing protection against all perils
included within the classifications of fire, extended coverage, vandalism,
malicious mischief, flood (in the event same is required by a lender having a
lien on the Premises) special extended perils ("all risk" as such term is used
in the insurance industry but not plate glass insurance).
8.4 Payment of Premium Increases.
8.4.1 Lessee shall pay to Lessor, during the term hereof,
in addition to the rent, the amount of any increase in premiums for the
insurance required under Paragraphs 8.2 and 8.3 over and above such premiums
paid during the Base Period, whether such premium increase shall be the result
of the nature of Lessee's occupancy, any act or omission of Lessee, requirements
of holder of a mortgage or deed of trust covering the Premises, increased
valuation of the Premises or general rate increases.
8.4.2 Lessee shall pay any such premium increases to Lessor
within Thirty (30) days after receipt by Lessee of a statement of the amount
due. If the insurance policies maintained hereunder cover other improvements in
addition to the Premises, Lessor's statement shall show the amount of such
increase attributable to the Premises and showing in reasonable detail, the
manner in which such amount was computed. If the term of this, Lease shall not
expire concurrently with the expiration of the period covered by such insurance,
Lessee's liability for premium increases shall be prorated on an annual basis.
8.5 Insurance Policies. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating" of at least B plus, or such
other rating as may be required by a lender having a lien on the Premises, as
set forth in the most current issue of "Best's Insurance Guide." The insuring
party shall deliver to the other party copies of policies of such insurance or
certificates evidencing the existence and amounts of such insurance with loss
payable clauses satisfactory to Lessor. No such policy shall be canceled or
subject to reduction of coverage or other modification except after thirty (30)
days prior written notice to Lessor or Lessee as the case may be. The insuring
party shall, at least thirty (30) days prior to the expiration of such policies,
furnish the other
10
party with renewals or "binder" thereof, or the other party may
[page break in original]
order such insurance and charge the cost thereof to the insuring party, which
amount shall be payable upon demand. Lessee shall not do or permit to be done
anything which shall invalidate the insurance policies referred to in Paragraph
8.3.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby release
and relieve the other, and their entire right of recovery against the other for
loss or damage arising out of or incident to the perils insured against under
Paragraph 8.3, which perils occur in, on or about the Premises, whether due to
the negligence of Lessor or Lessee or their agents, employees, contractors
and/or invitees. Lessee and Lessor shall, upon obtaining the policies of
insurance required hereunder, give notice to the insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this Lease.
8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor
from and against any and all claims arising from Lessees use of the Premises, or
from the conduct of Lessees business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises or elsewhere and shall
further indemnify and hold harmless Lessor from and against any and all claims
arising from any breach or default in the performance of any obligation of
Lessees part to be performed under the terms of this Lease, or arising from any
negligence of the Lessee, or any of Lessee's agents, contractors, or employees,
and from and against all cost, attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon; and in case any such action or proceeding be brought against Lessor by
reason of any such claim, Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a material
part of the consideration to Lessor, hereby assumes all risk of damage to
property or injury to persons, in, upon or about the Premises arising from any
cause except for the negligent acts of Lessor, and Lessee hereby waives all
claims in respect thereof against Lessor.
8.8 Exemption of Lessor from Liability. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of income
therefrom or for damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers, or any other person in or about
the Premises, nor shall Lessor be liable for injury to the person of Lessee,
Lessee's employees, agents or contractors, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said damage or injury results from a condition arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places and regardless of whether the cause of
such damage or injury or the mews of repairing the same is inaccessible to
Lessee. Lessee shall not be
11
liable for any injury or damage caused by the negligent acts of Lessor.
9. Damage, Destruction, Obligation to Rebuild, Rent Abatement.
9.1 Definitions.
9.1.1 "Premises Partial Damage" shall herein mean damage or
destruction to the Premises to the Went that the cost of repair is less than
fifty percent (50%) of the fair market value of the Premises immediately prior
to such damage or destruction. "Premises Building Partial Damage" shall herein
mean damage or destruction to the building of which the Premises are a part to
the extent that the cost of repair, is less than fifty percent (50%) of the fair
market value of such building as a whole immediately prior to such damage or
destruction.
9.1.2 "Premises Total Destruction" shall herein mean damage
or destruction to the Premises to the extent that the cost of repair is fifty
percent (50%) or more of the fair market value of such building as a whole
immediately prior to such damage or destruction.
9.1.3 "Insured Loss" shall herein mean damage or
destruction which was caused by an event required to be covered by the insurance
described in Paragraph 8.
9.2 Partial Damage -Insured Loss. Subject to the provisions of
Paragraphs 9.4,9.5 and 9.6, if at anytime during the term of this Lease there is
damage which is an Insured Loss and which falls into the classification of
Premises Partial Damage or Premises Building Partial Damage, then Lessor shall,
at Lessor's sole cost, repair such damage, but not
[page break in original]
Lessee's fixtures, equipment or tenant improvements, as soon as reasonably
possible and this Lease shall continue in full force and effect.
9.3 Partial Damage -Uninsured Loss. Subject to the provisions of
Paragraphs 9.4,9.5 and 9.6, if at any time during the term of this Lease there
is damage which is not an insured Loss and which falls within the classification
of Premises Partial Damage or Premises Building Partial Damage unless caused by
a negligent or willful act of Lessee (in which event Lessee shall make the
repairs at Lessee's expense), Lessor may at Lessor's option either repair such
damage as soon as reasonably possible at Lessor's expense, in which event this
Lease shall continue in full force and effect, or give written notice to Lessee
within Thirty (30) days after the date of the occurrence of such damage of
Lessor's intention to cancel and terminate this Lease, as of the date of the
occurrence of such damage. In the event Lessor elects to give such notice of
Lessor's intention to cancel and terminate this Lease, Lessee shall have the
right within ten (10) days after the receipt of such notice to give written
notice to Lessor of Lessee's intention to repair such
12
damage at Lessee's expense, without reimbursement from Lessor, in which event
this Lease shall continue in full force and effect, and Lessee shall proceed to
make such repairs as soon as reasonably possible. If Lessee does not give such
notice within such ten (10)-day period this Lease shall be canceled and
terminated as of the date of the occurrence of such damage.
9.4 Total Destruction. If at anytime during the term of this Lease
there is damage, whether or not an Insured Loss (including destruction required
by any authorized public authority), which falls into the classification of
Premises Total Destruction or Premises Building Total Destruction, this Lease
shall automatically terminate as of the date of such total destruction.
9.5 Damage Near End of Term. If at anytime during the last six (6)
months of the term of this Lease there is damage, whether or not an Insured
Loss, which falls within the classification of Premises Partial Damage, Lessor
may at Lessor's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage.
9.6 Abatement of Rent; Lessee Is Remedies.
9.6.1 In the event of damage described in Paragraphs 9.2 or
9.3 and Lessor or Lessee repairs or restores the Premises pursuant to the
provisions of this Paragraph 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Lessee's use of the Premises is impaired. Except for
abatement of rent, if any, Lessee shall have no claim against Lessor for any
damage suffered by reason of any such damage, destruction, repair or
restoration.
9.6.2 If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence such
repair or restoration within ninety (90) days after such obligations shall
accrue, Lessee may at Lessee's option cancel and terminate this Lease by giving
Lessor written notice of Lessee's election to do so at any time prior to the
commencement of such repair or restoration. In such event this Lease shall
terminate as of the date of such notice.
9.7 Termination - Advance Payments. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.8 Waiver. Lessee hereby waives the provision of California Civil
13
Code Sections 1932(2) and 1933(4) which relate to termination of leases when the
item leased is destroyed and agrees to be governed by the terms of this Lease.
[page break in original]
10. Real Property Taxes.
10.1 Payment of Tax Increase. Lessor shall pay the real property
tax, as defined in Paragraph 10.3 applicable to the Premises; provided, however,
that Lessee shall pay, in addition to rent, the amount, if any, by which real
property taxes applicable to the Premises increased over the fiscal real estate
year 2002/2003 . Such payment shall be made by Lessee within Thirty (30) days
after receipt of Lessor's written statement setting forth the amount of such
increase and the computation thereof. If the term of this Lease shall not expire
concurrently with the expiration of the tax fiscal year, Lessee's liability for
increased taxes for the last partial lease year shall be prorated on an annual
basis.
10.2 Additional Improvements. Notwithstanding Paragraph 10. 1
hereof, Lessee shall pay to Lessor upon demand therefor, the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed on the Premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax." As used herein, the term
"real property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Premises by any authority having
the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, as against any legal or equitable interest
of Lessor in the Premises or in the real property of which the Premises are a
part, as against Lessor's right to rent or other income therefrom, and as
against Lessor's business of leasing the Premises. The term "real property tax"
shall also include any tax, fee, levy, assessment or charge in substitution of,
partially or totally, any tax, fee, levy, assessment or charge herein included
within the definition of "real property tax," or which is imposed as a result of
a transfer, either partial or total, of Lessor's interest in the Premises or
which is added to tax or charge herein before included within the definition of
real property tax by reason of such transfer, or which is imposed by reason of
this transaction, any modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the Premises are not separately assessed,
Lessees liability shall bean equitable proportion of the real property taxes for
all of the land and improvements included within the tax parcel assessed, such
proportion to be determined from the respective valuations assigned in the
assessor's work sheets or such other
14
information as may be reasonably available. Lessor's reasonable determination
thereof, in good faith, shall be conclusive.
10.5 Personal Property Taxes.
10.5.1 Lessee shall pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Lessor.
10.5.2 If any of Lessee's said personal property shall be
assessed with Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Lessee's property.
11. Utilities. Lessor shall pay for all water, gas, heat, light, power,
services supplied to the Premises, together with any taxes thereon subject to
reimbursement under paragraph "7.6". Notwithstanding anything contained herein
to the contrary, Lessor shall supply the Premises during reasonable and usual
business hours: (Monday through Friday, from 7:00 am and 7:00 pm) and (Saturday,
from 8:00 am to 2:00 pm), except Holidays, as determined by the Lessor and
subject to the Rules and Regulations of the Building, with normal heating,
ventilation and cooling as reasonably required in the judgment of Lessor for the
comfortable occupation of the Premises. If Lessor shall require HVAC service at
any time other than during the business hours, Lessor shall furnish such
after-hours service upon reasonable advance notice from Lessee to Lessor. Such
after-hours HVAC service is presently at $ 20.00 per hour subject to increase
from time to time at Lessor's sole discretion. All charges for extra after-hours
HVAC services shall be due within ten (10) days after such billing.
12. Assignment and Subletting.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in this Lease or in the Premises,
[page break in original]
without Lessors prior written consent, which Lessor shall not unreasonably
withhold. The basis of a refusal of a proposed assignment may include but shall
not be limited to an increase in use of hazardous substances on the Premises.
Any attempted assignment, transfer, mortgage, encumbrance or subletting without
such consent shall be void, and shall constitute a breach of this Lease. A
transfer fee for such assignment or other transfer in an amount equal to Three
Hundred Fifty Dollars ($350.00) shall be charged for each such transfer payable
to Lessor. IN NO EVENT LESSEE MAY ASSIGN OR SUBLEASE ANY PORTION OF THE LEASED
PREMISES TO ANY INDIVIDUAL OR ENTITY WHO HAS BEEN EVICTED
15
BY AN UNLAWFUL DETAINER FROM THE PROPERTY AT 17327-17337 VENTURA BOULEVARD,
ENCINO, CALIFORNIA. IN THE EVENT THIS CONDITION IS VIOLATED, AT THE SOLE
DISCRETION OF LESSOR, THE LEASE SHALL BE TERMINATED AND LESSOR MAY PURSUE ALL
LEGAL REMEDIES IN ACCORDANCE TO THE TERMS OF THE LEASE, AS ALLOWED BY LAW.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph
12.1 hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, provided that said assignee assumes, in
full, the obligations of Lessee under this Lease. Any such assignment shall not,
in any way, affect or limit the liability of Lessee under the terms of this
Lease even if after such assignment or subletting the terms of this Lease are
materially changed or altered without the consent of Lessee, the consent of whom
shall not be necessary.
12.3 No Release of Lessee. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee of Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed to be a waiver by Lessor of any
provision hereof. Consent to one assignment or subletting shall not be deemed
consent to any subsequent assignment or subletting. In the event of default by
any assignee of Lessee or any successor of Lessee, in the performance of any of
the terms hereof, Lessor may proceed directly against Lessee without the
necessity of exhausting remedies against said assignee. Lessor may consent to
subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.
12.4 Attorneys' Fees. In the event Lessee shall assignor sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do,
then Lessee shall pay Lessor's reasonable and necessary attorneys fees incurred
in connection therewith, such attorney's fees not to exceed $500 for each such
request.
13. Defaults; Remedies.
13.1 Defaults. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee:
13.1.1 The vacating or abandonment of the Premises by
Lessee.
13.1.2 The failure by Lessee to make any payment of rent or
any other
16
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor shall serve Lessee with
a Notice to Pay or Quit pursuant to applicable Unlawful Detainer statutes, such
Notice to Pay Rent or Quit shall also constitute the notice required by this
subparagraph so long as service is in accordance with the time periods herein
provided. On the third such occasion of Lessee's failure to make timely rental
payments where such failure shall continue for a period of three (3) days as
outlined above, this shall be deemed a material breach of this Lease, and Lessor
may elect upon not less than ten (10) days written notice to Lessee to terminate
this Lease as of the date specified in such notice.
13.1.3 The failure by Lessee to observe or perform any of
the material covenants, conditions or provisions of this Lease to be observed or
performed by Lessee, other than described in paragraph (b) above, where such
failure shall continue for a period of twenty (20) calendar days after written
notice hereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's default is such that more than twenty (20) calendar days are reasonably
required for its cure, then Lessee shall not be deemed to be in default if
Lessee commenced such cure within said twenty (20)-day period and thereafter
diligently prosecutes such cure to completion.
[page break in original]
13.1.4 The making by Lessee of any general arrangement or
assignment for the benefit of creditors; Lessee becomes a "debtor" as defined in
I I U.S.C. * 10 1 or any successor statute thereto (unless, in the case of a
petition filed against Lessee, the same is dismissed within 60 days); the
appointment of a trustee or receiver to take possession of substantially all of
Lessee's assets located at the Premises or of Lessees interest in this Lease,
where possession is not restored to Lessee within 30 days; or the attachment,
execution or other judicial seizure of substantially all of Lesse's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within 30 days. Provided, however, in the event that
any provision of this paragraph 13.1.4 is contrary to any applicable law, such
provision shall be of no force or effect.
13.1.5 The discovery by Lessor that any financial statement
given to Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any
successor in interest of Lessee or any guarantor of Lessee's obligations
hereunder, and any of them, was materially false.
13.1.6 The release or disposal of a hazardous substance on
or around the Premises.
13.2 Remedies. In the event of any such material default or breach
by
17
Lessee, Lessor may at any time thereafter, with notice and without limiting
Lessor in the exercise of any right or remedy which Lessor may have by reason of
such default or breach:
13.2.1 Terminate Lessee's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee all damages incurred by
Lessor by reason of Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; cost of the clean up of any hazardous
substance released; expenses of reletting, including necessary renovation and
alteration of the Premises, reasonable attorneys fees, and any real estate
commission actually paid; the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent for the balance of
the term after the time of such award exceeds the amount of such rental loss for
the same period that Lessee proves could be reasonably avoided; that portion of
the leasing commission paid by Lessor pursuant to Paragraph 15 applicable to the
unexpired term of this Lease.
13.2.2 Maintain Lessee's right to possession in which case
this Lease shall continue in effect whether or not Lessee shall have abandoned
the Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
13.2.3 Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises
are located. Unpaid installments of rent and other unpaid monetary obligations
of Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless
Lessor fails to perform obligations required of Lessor within thirty (30) days
after written notice by Lessee to Lessor and to the holder of any first mortgage
or deed of trust covering the Premises whose name and address shall have
theretofore been furnished to Lessee in writing, specifying wherein Lessor has
failed to perform such obligation; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days are required for
performance then Lessor shall not be in default if Lessor commences performance
within such thirty (30)-day period and thereafter diligently prosecutes the same
to completion. Provided, further, that no delay, default or other failure by
Lessor to perform Lessor's obligations under the Lease shall waive, release or
otherwise excuse Lessee from its monetary or other obligations under this Lease
in any way whatsoever.
13.4 Late Charge. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent or other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include but are not limited to,
processing and accounting charges,
18
and late charges which may be imposed on Lessor by the terms of any mortgage or
any trust deed covering the Premises. Accordingly, if any installment of rent or
any other sum due from Lessee shall not be received by Lessor or Lessor's
designee within nine (9) days after such amount shall be due, then, without any
requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal
to ten percent (10%) of such overdue amount. The parties hereby agree that such
late charge represents a fair
[page break in original]
and reasonable estimate of the costs Lessor will incur by reason of late payment
by Lessee. Acceptance of such late charge by Lessor shall in no event constitute
a waiver of Lessee's default with respect to such overdue amount nor prevent
Lessor from exercising any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of rent, then rent shall automatically
become due and payable quarterly in advance, rather than monthly,
notwithstanding Paragraph 5 or any other provision of this Lease to the
contrary.
13.5 Impounds. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) installments of rent or any
other monetary obligation of Lessee under the terms of this Lease, Lessee shall
pay to Lessor, if Lessor shall so request, in addition to any other payments
required under this Lease, a monthly advance installment, payable at the same
time as the monthly rent, for real property tax and insurance, based on last
year's real property tax and insurance payments on the Premises, which are
payable by Lessee under the terms of this Lease. Such fund shall be established
to insure payment when due, before delinquency, of any or all such real property
taxes and insurance premiums. If the amounts paid to Lessor by Lessee under the
provisions of this Paragraph are insufficient to discharge the obligations of
Lessee to pay such real property taxes and insurance premiums as the same become
due, Lessee shall pay to Lessor, upon Lessor's demand, such additional sums
necessary to satisfy any such obligations. All moneys paid to Lessor under this
Paragraph may be intermingled with other moneys of Lessor and shall not bear
interest. In the event of a default in the obligations of Lessee to perform
under this Lease, then any balance remaining from funds paid to Lessor under the
provisions of this Paragraph may, at the option of Lessor, be applied to the
payment of any monetary default of Lessee in lieu of being applied to the
payment of real property tax and insurance premiums.
14. Condemnation. If the Premises or any portion thereof are taken under
the power of eminent domain, or sold under the threat of the exercise of said
power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs. If more than 10% of the floor area
of the building on the Premises, or more than 25% of the land area of the
Premises which is not occupied by any building, is taken by condemnation, Lessee
may, at Lessee's option, to be exercised in writing only within ten
19
(10) days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within ten (10) days after the condemning
authority shall have taken possession) terminate this Lease as of the date the
condemning authority takes such possession. If Lessee does not terminate this
Lease in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the rent
shall be reduced in the proportion that the floor area of the building taken
bears to the total floor area of the building situated on the Premises. No
reduction of rent shall occur if the only area taken is that which does not have
a building located thereon. Any award for the taking of all or any part of the
Premises under the power of eminent domain or any payment made under the threat
of the exercise of such power shall be the property of Lessor, whether such
award shall be made as compensation for diminution in value of the leasehold or
for the taking of the fee, or as severance damages; provided, however, that
Lessee shall be entitled to any award for loss of or damage to Lessee's trade
fixtures and removable personal property. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of
severance damages received by Lessor in connection with such condemnation,
repair any damage to the Premises caused by such condemnation except to the
extent that Lessee has been reimbursed therefore by the condemning authority.
Lessee shall pay any amount in excess of such severance damages required to
complete such repair.
15. Broker's Fee. Lessor and Lessee hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits judgments and cost and expenses
(including without limitation reasonable attorney fees) with respect to any
leasing commission or equivalent compensation alleged to be owing on account of
the indemnifying party's dealings with any real estate broker or agent other
than that specified herein.
[page break in original]
16. General Provisions.
16.1 Estoppel Certificate.
16.1.1 Lessee shall at anytime but not more often than once
each calendar month, upon not less than ten (10) days prior written notice from
Lessor, execute, acknowledge and deliver to Lessor a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the date to which the
rent and other charges are paid in advance, if any, and acknowledging that there
are not, to Lessees knowledge, any uncured defaults on the part of Lessor
hereunder, or specifying such defaults if any are claimed, and acknowledge
20
such other matters as shall be requested by a financing Lender or a Buyer that
is customarily requested in accordance with then prevailing Lending or
purchasing practices. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrance of the Premises.
16.1.2 At Lessor's option, Lessee's failure to deliver such
statement within such time shall be a material breach of this Lease or shall be
conclusive upon Lessee that this Lease is in full force and effect, without
modification except as maybe represented by Lessor, that there are no uncured
defaults in Lessor's performance, and that not more than one (1) month's rent
has been paid in advance or such failure may be considered by Lessor as a
default by Lessee under this Lease.
16.1.3 If Lessor desires to finance, refinance, or sell the
Premises, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three (3) years' financial statements of Lessee. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
16.2 Lessor's Liability. The term "Lessor" as used herein shall
mean only the owner or owners, at the time in question, of the fee title or a
lessee's interest in a ground lease of the Premises. In the event of any
transfer of such title or interest, Lessor herein named (and in case of any
subsequent transfers then the grantor) shall be relieved from and after the date
of such transfer of all liability in respect to Lessor's obligations thereafter
to be performed, provided that any funds in the hands of Lessor or the then
grantor at the time of such transfer, in which Lessee has an interest, shall be
delivered to the grantee. The obligations contained in this Lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.
16.3 Relocation of Premises. If the Premises leased hereunder are
less than 3,000 square feet, Lessor may, at its option, elect by notice to
Lessee to substitute for the Premises other office space in the Building (herein
called "Substitute Premises") designated by Lessor; provided that the Substitute
Premises contain at least the same useable square foot area as the Premises.
Lessee shall vacate and surrender the Premises and shall occupy the Substitute
Premises promptly (and, in any event, not later than fifteen (15) days after
Lessor has substantially completed the work to be performed by Lessor in the
Substitute Premises pursuant to this Section 30.6- Base Rent for the Substitute
Premises shall remain the same as the Premises. Lessee shall not be entitled to
an abatement of Rent due to its relocation to the Substitute Premises, but
Lessor shall, at Lessor's expenses: furnish and install in the Substitute
Premises fixtures, equipment, improvements and appurtenances at least equal in
kind and quality to those contained in the Premises; provide to Lessee personnel
to perform, under Lessee's direction, the moving of Lessee's property; promptly
reimburse Lessee for lessee's actual and
21
reasonable out-of-pocket costs incurred by Lessee in connection with the
relocation provided such costs are approved by Lessor in advance, which approval
will not be unreasonably withheld. Lessee agrees to cooperate with Lessor to
facilitate the prompt completion by Lessor of its obligations under this Section
and the prompt surrender by Lessee of the Premises.
17. Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
18. Interest on Past-Due Obligations. Except as expressly herein provided,
any amount due not paid when due shall bear interest at the maximum rate then
allowable by law from the date due. Payment of such interest shall not excuse or
cure any default under this Lease, provided, however, that interest shall not be
payable on late charges incurred by Lessee nor on any amounts upon which late
charges are paid by Lessee.
[page break in original]
19. Time of Essence. Time is of the essence.
20. Additional Rent. Any monetary obligations of Lessee to Lessor under the
terms of this Lease shall be deemed to be rent.
21. Incorporation of Prior Agreements, Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
agreement or understanding pertaining to any such matter shall be effective.
This Lease may be modified in writing only, signed by the parties in interest at
the time of the modification. Except as otherwise stated in this Lease. Lessee
hereby acknowledges that neither the real estate broker, listed in Paragraph 15
hereof, nor any cooperating broker on this transaction nor the Lessor or any
employees or agents of any of said persons has made any oral or written
warranties or representations to Lessee relative to the condition or use by
Lessee of said Premises except as provided herein. Lessee acknowledges that
Lessee assumes all responsibility regarding the Occupational Safety Health Act,
the legal use and adaptability of the Premises and the compliance thereof with
all applicable laws and regulations in effect during the term of this Lease
except as otherwise specifically stated in this Lease.
22. Notices. Any notice required or permitted to be given hereunder shall
be in writing and may be given by personal delivery, Courier Service or
certified mail and if given personally or by mail, shall be deemed sufficiently
given if addressed to Lessee or
22
to Lessor at the address first set forth above. Either party may by notice to
the other specify a different address for notice purposes except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for notice purposes.
23. Waivers. No waiver by a party or any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by the other of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to tender unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
24. Recording. Lessee shall, upon request of Lessee, execute, acknowledge
and deliver to Lessee a "short form" memorandum of this Lease for recording
purposes, and when appropriate, a memorandum of termination of this Lease.
25. Holding Over. If Lessee fails to vacate the Premises at the end of the
Term, then Lessee shall be a tenant at will and, in addition to all other
damages and remedies to which Lessor may be entitled for such hold over, Lessee
shall pay, in addition to the other rent, a daily Basic Rent equal to the
greater of (a) one hundred fifty percent (150%) of the daily Basic Rent payable
during the last month of the Tern, or (b) one hundred twenty-five percent (125%)
of the prevailing rental rate in the Building for similar space. If Lessee fails
to surrender the Premises upon Termination or Expiration of the Lease, in
addition to any other liabilities to Lessor accruing therefrom, Lessee shall
protect, defend, indemnify and hold Lessor harmless from all loss, costs,
(including reasonable attorney's fees) and liability resulting from such
failure, including without limiting the generality of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender, and any
lost profits to Lessor resulting therefrom. The above conditions shall not be
deemed to limit or constitute a waiver of any other rights or remedies provided
to Lessor herein or at law. If Lessee, with Lessor's consent, remains in
possession of the Premises or any part thereof after the expiration of the term
hereof, such occupancy shall be a tenancy from month to month upon all the
provisions of this Lease pertaining to the obligations of Lessee, but all
options and rights of first refusal, if any, granted under the terms of this
Lease shall be deemed terminated and be of no further effect during said month
to month tenancy.
26. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
23
27. Covenants and Conditions. Each provision of this Lease performed by
Lessee shall be deemed both a covenant and a condition.
[page break in original]
28. Binding Effect; Choice of Law. Subject to any provisions hereof
restricting assignment or subletting by Lessee and this Lease shall bind the
parties, their personal representatives, successors and assigns. This Lease
shall be governed by the laws of the State wherein the Premises are located.
29. Subordination.
29.1 This Lease, at Lessor's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation or security
now or hereafter placed upon the real property of which the Premises are apart
and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground lessor shall elect to have this Lease prior to the
lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Lessee, this Lease shall be deemed prior to such mortgage,
deed of trust, or ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of
recording thereof.
29.2 Lessee agrees to execute any documents required to effectuate
an attornment, a subordination or to make this Lease prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be. Lessee's failure to
execute such documents within ten (10) days after written demand shall
constitute a material default by Lessee hereunder.
30. Attorneys' Fees. If either party consults an attorney regarding the
enforcement of the provisions of the Lease, or if either party commences an
action or proceeding against the other party arising out of or in connection
with this Lease, or institutes any proceeding in a bankruptcy or similar court
which has jurisdiction over the other party or any or all of its property or
assets, the correct or prevailing party in such enforcement, action or
proceeding and in any appeal in connection therewith shall be entitled to have
and recover from the incorrect or unsuccessful party reasonable attorneys' and
expert's fees, court costs, expenses and other costs of investigation and
preparation. If such correct or prevailing party recovers a judgement in any
such action,
24
proceeding or appeal, such attorneys' and experts fees, costs and expenses shall
be included in and as a part of such judgment
31. Lessor's Access. Lessor and Lessor's agents shall have the right to
enter the Premises at reasonable times, upon notice to Lessee, for the purpose
of inspecting the same, showing the same to lenders, and making such
alternations, repairs, improvements or additions to the Premises or to the
building of which they are a part as are necessary. Lessor may at any time place
on or about the Premises any ordinary "For Sale" signs and Lessor may at any
time during the last 120 days of the term hereof place on or about the Premises
any ordinary "For Lease" signs, a without rebate of rent or liability to Lessee.
32. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
33. Signs. Lessee shall not place any sign upon the Premises or within view
of the common areas of the Building without Lessor's prior written consent.
34. Merger. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenants or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenants.
35. Consents. Wherever in this Lease the consent of one party is required
to an act of the other party such consent shall not be unreasonably withheld,
delayed or conditioned.
36. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same monetary obligations as Lessee under this Lease.
[page break in original]
37. Quiet Possession. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions of
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are duly authorized and legally
capable of executing this Lease on behalf of Lessor
25
and that such execution is binding upon all parties holding an ownership
interest in the Premises.
38. Security Measures. Lessee hereby acknowledges that the rental payable
to Lessor hereunder does not include the cost of guard service or other security
measures.
39. Easements. Lessor reserves to itself the right, from time to time, to
grant such reasonable easements, rights, dedications that Lessor deems necessary
and to cause the recording of Parcel maps and restrictions, so long as such
easements, rights, dedications, maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material breach of this Lease.
40. Performance Under Protest. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the right
on the part of said party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said party
to pay such sum or any part thereof, said parry shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease, along with interest thereon at the highest lawful rate
and reasonable and necessary attorney's fees and any damages caused thereby.
41. Authority. If Lessee is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
42. Confidentiality. Lessee acknowledges that the terms and conditions of
this Lease are to remain confidential for Lessor's benefit, and may not be
disclosed by Lessee to anyone, by any manner or means, directly or indirectly,
without Lessor's prior written consent. The consent by Lessor to any disclosure
shall not be deemed to be a waiver on the part of Lessor of any prohibition
against any future disclosure
43. Conflict. Any conflict between the printed provision of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provision.
26
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.
/s/ Xxxx Xxxxx /s/ Xxxxx Xxxxx
------------------------------ -----------------------------------
Lessor: ENCINO GARDENS, LLC Lessee: ADVANCED KNOWLEDGE, INC.
a California limited liability d.b.a. Advanced Knowledge Training,
company Inc.
27
EXHIBIT "A
[map of premises]
28
EXHIBIT B
TO
THE ENCINO GARDENS OFFICE BUILDING
OFFICE LEASE AGREEMENT
RULES AND REGULATIONS
Attached to and forming a part of a lease between ENCINO GARDENS, LLC,
as Lessor ("Landlord"), and, ADVANCED KNOWLEDGE, INC., D.B.A. ADVANCED
KNOWLEDGE TRAINING, INC., as Lessee ("Tenant").
1. The entrances, halls, corridors, stairways, retail arcade walkways,
exits, and elevators shall not be obstructed by any of the tenants or used for
any purpose other than for ingress and egress from their respective premises.
The entrances, halls, corridors, stairways, retail arcade walkways, exits, and
elevators are not intended for use by the general public but for the tenant and
its employees, licensees and invitees. Lessor reserves the right to control and
operate the public portions of the Building and the public facilities as well as
facilities furnished for the common use of the tenants, in such manner as it in
its reasonable judgment deems best for the benefit of the tenants generally. No
tenant shall invite to the tenants premises, or permit the visit of, persons in
such numbers or under such conditions as to interfere with the use and enjoyment
of any of the plazas, entrances, corridors, elevators and other facilities of
the Building by any other tenants. Fire exits and stairways are for emergency
use only, and they shall not be used for any other purpose.
2. Lessor may refuse admission to the Building outside of Business
Hours on Business Days (as such terms are defined in the Lease) to any person
not producing identification satisfactory to Lessor. If Lessor issues
identification passes, Lessee shall be responsible for all persons for whom it
issues any such pass and shall be liable to Lessor for all acts or omissions of
such persons.
3. No tenant shall obtain or accept for use in its premises ice, food,
beverages, cleaning or other similar services from any persons reasonably
prohibited in writing from furnishing such services. Such services shall be
furnished only at such hours, and under such reasonable regulations, as may be
fixed by Lessor from time to time.
4. The cost of repairing any damage to the public portions of the
Building or the public facilities or to any facilities used in common with other
tenants, caused by a tenant or its employees, agents, contractors, licensees or
invitees, shall be paid by such tenant.
29
5. No awnings or other projections shall be attached to the outside
walls of the Building. No curtains, blinds, shades or screens, if any, which are
different from the standards adopted by Lessor for the Building shall be
attached to or hung in any exterior window or door of the premises of any tenant
without the prior written consent of Lessor.
6. No sign, placard, picture, name lettering, advertisement, notice or
object visible from the exterior of any lessee's premises shall be displayed in
or on the exterior windows or doors, or on the outside of any lessee's premises,
or at any point inside any tenants premises where the same might be visible
outside of such premises, without the prior written consent of Lessor. Lessor
shall adopt and furnish to tenants general guidelines relating to signs inside
the Building. Lessee shall conform to such guidelines. All approved signs or
lettering shall be prepared, printed, affixed, or inscribed at the expense of
the tenant and shall be of a size, color and style acceptable to Lessor.
7. The windows that reflect or admit light and air into the halls,
passageways or other public places in the Building shall not be covered or
obstructed by any tenant, nor shall any bottles, parcels or other articles be
placed on the window xxxxx.
8. No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, no placed in the halls, corridors
or vestibules.
[page break in original]
9. No bicycles, vehicles, animals, fish or birds of any kind shall he
brought into or kept in or about the premises of any tenant or the Building.
10. No noise, including, but not limited to, music or the playing of
musical instruments, recordings, radio or television, which, in the judgment of
Lessor, might disturb other tenants in the Building, shall be made or permitted
by any tenant.
11. No tenant, nor any tenant's contractors, employees, agents,
visitors, invitees or licensees, shall at any time bring into or keep upon the
premises or the Building any flammable, combustible, explosive, environmentally
hazardous or otherwise dangerous fluid, chemical or substance.
12. Additional locks or bolts of any kind which shall not be operable
by the Grand Master Key for the Building shall not be placed upon any of the
doors or windows by any tenant, nor shall any changes be made in locks or
mechanism thereof which shall make such locks inoperable by said Grand Master
Key. Additional keys for a tenant's premises and toilet rooms shall be procured
only from the Lessor who may make a reasonable charge therefor.
30
13. All movement of freight, furniture, packages, boxes, crates or any
other object or matter of any description must take place during such hours and
in such elevators, and in such manner as Lessor or its agent may determine from
time to time. Any labor and engineering costs incurred by Lessor in connection
with any moving herein specified, shall be paid by Lessee to Lessor, on demand.
14. No tenant shall occupy or permit any portion of its premises to be
occupied as an office for a public stenographer, public typist, printer or
photocopier without the prior written consent of Lessee. No tenant shall use its
premises, or permit any part thereof to be used, for manufacturing or the sale
at retail or auction of merchandise, goods or property of any kind or for the
possession, storage, manufacture, or sale of liquor, narcotics, dope, tobacco,
in any form, or as a xxxxxx, beauty or manicure shop, or as school.
15. Lessor shall have the right to prescribe the weight and position of
safes and other objects of excessive weight, and no safe or other object whose
weight exceeds the lawful load for the area upon which it would stand shall be
brought into or kept upon any tenant' s, premises. If, in the judgment of
Lessor, it is necessary to distribute the concentrated weight of any heavy
object, the work involved in such distribution shall be done at the expense of
the tenant and in such manner as Lessor shall determine.
16. No machinery or mechanical equipment other than ordinary portable
business machines may be installed or operated in any tenants premises without
Lessor's prior written consent which consent shall not be unreasonably withheld
or delayed, and in no case shall any machines or mechanical equipment be so
placed or operated as to disturb other tenants. Machines and mechanical
equipment which may be permitted to be installed and used in tenant' s premises
shall be equipped, installed and maintained so as to prevent any disturbing
noise, vibration or electrical or other interference from being transmitted from
such premises to any other area of the Building.
17. Lessor, it contractors, and their respective employees, shall have
the right to use, without charge therefor, all light, power and water in the
premises of any tenant while cleaning or making repairs or alterations in the
premises of such tenant.
18. No premises of any tenant shall be used for lodging or sleeping or
for any immoral or illegal purpose.
19. The requirements of tenants for any services by Lessor will be
attended to only upon prior application to the Lessor. Employees of Lessor shall
not perform any work or do anything outside of their regular duties, unless
under special instructions from Lessor.
31
20. Canvassing, soliciting and peddling in the Building are prohibited
and each tenant shall cooperate to prevent the same.
21. Without the prior written consent of Lessor, no tenant shall sell
newspapers, magazines, periodicals, theater, or travel tickets or other goods or
merchandise to the general public in or on tenanfs premises nor shall any tenant
use or permit the use of any sidewalk or any area of the retail arcade for any
similar purpose.
[page break in original]
22. Each tenant shall store its trash and garbage within its premises.
No material shall be placed in the trash boxes or receptacles if such material
is of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of office building trash and garbage in the
City of Los Angeles without being in violation of any law or ordinance governing
such disposal. All garbage and refuse disposal shall be made only through
entryways and elevators provided for such purposes and at such times as Lessor
shall designate. No tenant shall cause or permit any unusual or objectionable
odors to emanate from its premises which would annoy other tenants or create a
public or private nuisance. No cooking shall be done in the premises of any
tenant except as is expressly permitted in such tenant's lease.
23. No bankruptcy, going out of business, liquidation or other form of
distress sale shall be held on any of tenant' s premises. No sales shall be held
outside of any tenant's premises. No advertisement shall be done by loudspeaker,
barkers, flashing lights or displays or other methods not consistent with the
character of a high-quality office building.
24. Nothing shall be done or permitted in any tenants premises, and
nothing shall be brought into or kept in any tenants premises, which would
impair or interfere with the economic heating, cleaning or other servicing of
the Building or the premises, or the use or enjoyment by any other tenant of any
other premises, nor shall there be installed by any tenant any ventilating, air
conditioning, electrical or other equipment of any kind which, in the reasonable
judgment of Lessor, might cause any such impairment or interference.
25. No acids, vapors or other similar caustic materials shall be
discharged or permitted to be discharged into the waste lines, vents or flues of
the Building. The water and wash closets and other plumbing fixtures in or
servicing any tenant! s premises shall not be used for any purpose other than
the purposes for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other foreign substances shall be deposited therein. All
damages resulting from any misuse of the fixtures shall be borne by the tenant
who, or whose servants, employees, agents, invitees, visitors or licensees shall
have caused the same.
32
26. All entrance doors in each tenant's premises shall be left locked
and all windows shall be left closed by the tenant when the tenant's premises
are not in use. Entrance doors to the tenant's premises shall not be Xxxx open
at any time. Each tenant, before closing and leaving its premises at any time,
shall turn out all lights.
27. Window coverings for all windows in each tenant's premises above
the ground floor shall be lowered as reasonably required because of the position
of the sun, during the operation of the Building air-conditioning system to cool
or ventilate the tenant's premises.
28. Lessor reserves the right to rescind, modify, alter or waive any
rule or regulation at any time prescribed for the Building when, in its
reasonable judgment, it deems it necessary, desirable or proper for its best
interest and for the best interests of the tenants generally, and no alteration
or waiver of any rule or regulation in favor of one tenant shall operate as an
alteration or waiver in favor of any other tenant. Lessor shall not be
responsible to any tenant for the non-observance or violation by any other
tenant of any of the rules and regulations at any time prescribed for the
Building.
29. Lessor reserves the right to add to, modify or otherwise change
these Rules and Regulations. Such changes shall become effective when written
notice thereof is provided to tenants of the Building.
33
EXHIBIT C
TO
ENCINO GARDENS OFFICE LEASE AGREEMENT
TENANT FINISH-WORK: AS-IS
Lessee hereby accepts the Premises in their "AS-IS" condition, and
Lessor shall have no obligation to perform any work therein (including, without
limitation, demolition of any improvements existing therein or construction of
tenant finish-work or other improvements therein), and shall not be obligated to
reimburse Lessee or provide an allowance for any costs related to the demolition
or construction of improvements therein, except for the following improvements
to the Premises, which Lessor shall make at its cost and expense:
1) Install laminated wood floor covering in office 41.
2) Replace the damaged mini blinds in office #1.
3) Install an additional electrical plug in office #1, as
indicated in Exhibit A.
4) Make the necessary adjustment to the HVAC for proper and
independent operation of the system within the Premises.
5) Patch and paint the walls (color: D.E. EGGSHELL )
PURE XXXX DE1077
Lessee shall in a timely manner and at Lessee's sole cost and expense install
the telecommunication system, and carpeting.
34
