Ex 10.2
[AIR LOGO]
AIR COMMERCIAL REAL ESTATE ASSOCIATION
STANDARD MULTI-TENANT OFFICE LEASE - GROSS
1. BASIC
PROVISIONS ("BASIC PROVISIONS").
1.1
PARTIES: This
Lease ("LEASE"), dated for reference purposes only
August 26, 2005, is made by and between Academy Center LLC
________________________________________________________________________________
_____________________________________________________________________
("LESSOR")
and Suzanne Lewsadder d.b.a. SheerVision
________________________________________________________________________________
______________________("LESSEE"), (collectively the "PARTIES", or
individually a
"PARTY").
1.2(a)
PREMISES: That certain portion of the Project (as defined
below),
known as Suite Numbers(s) 104, _____ floor(s), consisting of
approximately 2,090
rentable square feet and approximately _____ useable square feet
("PREMISES").
The Premises are located at: 4030 Palos Verdes Drive North, in the
City of
R.H.E., County of Los Angeles, State of California, with zip code
90274. In
addition to Lessee's rights to use and occupy the Premises as
hereinafter
specified, Lessee shall have non-exclusive rights to the Common
Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall
not have any
rights to the roof, the exterior walls, the area above the dropped
ceilings, or
the utility raceways of the building containing the Premises
("BUILDING") or to
any other buildings in the Project. The Premises, the Building, the
Common
Areas, the land upon which they are located, along with all other
buildings and
improvements thereon, are herein collectively referred to as the
"PROJECT." The
Project consists of approximately 31,200 rentable square feet. (See
also
Paragraph 2)
1.2(b)
PARKING: 7 unreserved and -0- reserved vehicle parking spaces at
a
monthly cost of $ -0- per unreserved space and $-0- per reserved
space. (See
Paragraph 2.6)
1.3
TERM: Two (2)
years and -0- months ("ORIGINAL TERM") commencing
November 1, 2005 ("COMMENCEMENT DATE") and ending October 31, 2007
("EXPIRATION
DATE"). (See also Paragraph 3)
1.4
EARLY
POSSESSION: October 16, 2005 ("EARLY POSSESSION DATE").
(See also Paragraphs 3.2 and 3.3)
1.5
BASE RENT:
$3,344 per month ("BASE RENT"), payable on the
1st day of each month commencing November 2005. (See also Paragraph
4)
[X] If this box is checked, there are provisions in this Lease for
the Base Rent
to be adjusted.
1.6
LESSEE'S SHARE
OF OPERATING EXPENSE INCREASE: N/A percent ( __ %)
("LESSEE'S SHARE"). Lessee's Share has been calculated by dividing
the
approximate rentable square footage of the Premises by the total
approximate
square footage of the rentable space contained in the Project and
shall not be
subject to revision except in connection with an actual change in
the size of
the Premises or a change in the space available for lease in the
Project.
1.7
BASE RENT AND
OTHER MONIES PAID UPON EXECUTION:
(a) BASE RENT:
$3,344 for the period November 2005
(b) SECURITY
DEPOSIT: $3,444 ("SECURITY DEPOSIT"). (See also
Paragraph 5)
(c) PARKING:
$-0- for the period _______________________________
(d)
OTHER: $-0- for
______________________________________________
(e) TOTAL DUE
UPON EXECUTION OF THIS LEASE: $6,788
1.8
AGREED USE:
General Office
________________________________________________________________________________
_______________________________________________________. (See also
Paragraph 6)
1.9
BASE YEAR;
INSURING PARTY. The Base Year is 2005. Lessor is the
"INSURING PARTY". (See also Paragraphs 4.2 and 8)
1.10
REAL ESTATE BROKERS:
(See also Paragraph 15)
(a) REPRESENTATION: The following real estate brokers (the
"BROKERS") and brokerage relationships exist in this transaction
(check
applicable boxes):
[ ]
__________________ represents Lessor exclusively ("LESSOR'S
BROKER");
[ ]
__________________ represents Lessee exclusively ("LESSEE'S
BROKER"); or
[X] Coldwell
Banker Commercial NRT represents both Lessor and Lessee ("DUAL
AGENCY")
(b) PAYMENT TO BROKERS: Upon execution and delivery of this Lease
by
both Parties, Lessor shall pay to the Brokers the brokerage fee
agreed to in a
separate written agreement (or if there is no such agreement, the
sum of ____ or
__ % of the total Base Rent for the brokerage services rendered by
the Brokers).
1.11
GUARANTOR. The
obligations of the Lessee under this Lease shall be
guaranteed by _______________ ("Guarantor"). (See also Paragraph
37)
1.12
BUSINESS HOURS FOR THE
BUILDING: ______ a.m. to ______ p.m., Monday
through Friday (except Building Holidays) and ______ a.m. to ______
p.m., on
Saturday (except Building Holidays) "BUILDING HOLIDAYS" shall mean
the dates of
observation of New Year's Day, President's Day, Memorial Day,
Independence Day,
Labor Day, Thanksgiving Day, Christmas Day, and
__________________________.
1.13
LESSOR SUPPLIED
SERVICES. Notwithstanding the provisions of
Paragraph 11.1, Lessor is NOT obligated to provide the
following:
[X] Janitorial
services
[ ]
Electricity
[ ] Other
(specify):
_________________________________________________________
1.14
ATTACHMENTS. Attached
hereto are the following, all of which
constitute a part of this Lease:
[X] an Addendum
consisting of Paragraphs ________ through __________:
[X] a plot plan
depicting the Premises;
[X] a current
set of the Rules and Regulations;
[ ] a Work
Letter;
[ ] a janitorial
schedule;
[ ] other
(specify):
_________________________________________________________
________________________________________________________________________________
2.
PREMISES.
2.1
LETTING. Lessor
hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon
all of the
terms, covenants and conditions set forth in this Lease. Unless
otherwise
provided herein, any statement of size set forth in this Lease, or
that may have
been used in calculating Rent, is an approximation which the
Parties agree is
reasonable and any payments based thereon are not subject to
revision whether or
not the actual size is more or less. NOTE: LESSEE IS ADVISED TO
VERIFY THE
ACTUAL SIZE PRIOR TO EXECUTING THIS LEASE.
2.2
CONDITION.
Lessor shall deliver the Premises to Lessee in a clean
condition on the Commencement Date or the Early Possession Date,
whichever first
occurs ("START DATE"), and warrants that the existing electrical,
plumbing, fire
sprinkler, lighting, heating.
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ventilating and air conditioning systems ("HVAC"), and all other
items which the
Lessor is obligated to construct pursuant to the Work Letter
attached hereto, if
any, other than those constructed by Lessee, shall be in good
operating
condition on said date.
2.3
COMPLIANCE.
Lessor warrants that the improvements comprising the
Premises and the Common Areas comply with the building codes that
were in effect
at the time that each such improvement, or portion thereof, was
constructed, and
also with all applicable laws, covenants or restrictions of record,
regulations,
and ordinances ("APPLICABLE REQUIREMENTS") in effect on the Start
Date. Said
warranty does not apply to the use to which Lessee will put the
Premises,
modifications which may be required by the Americans with
Disabilities Act or
any similar laws as a result of Lessee's use (see Paragraph 50), or
to any
Alterations or Utility Installations (as defined in Paragraph
7.3(a)) made or to
be made by Lessee. NOTE: LESSEE IS RESPONSIBLE FOR DETERMINING
WHETHER OR NOT
THE ZONING AND OTHER APPLICABLE REQUIREMENTS ARE APPROPRIATE FOR
LESSEE'S
INTENDED USE, AND ACKNOWLEDGES THAT PAST USES OF THE PREMISES MAY
NO LONGER BE
ALLOWED. If the Premises do not comply with said warranty, Lessor
shall, except
as otherwise provided, promptly after receipt of written notice
from Lessee
setting forth with specificity the nature and extent of such
non-compliance,
rectify the same. If the Applicable Requirements are hereafter
changed so as to
require during the term of this Lease the construction of an
addition to or an
alteration of the Premises, the remediation of any Hazardous
Substance, or the
reinforcement or other physical modification of the Premises
("CAPITAL
EXPENDITURE"), Lessor and Lessee shall allocate the cost of such
work as
follows:
(a) Subject to
Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique
use of the
Premises by Lessee as compared with uses by tenants in general,
Lessee shall be
fully responsible for the cost thereof, provided, however, that if
such Capital
Expenditure is required during the last 2 years of this Lease and
the cost
thereof exceeds 6 months' Base Rent, Lessee may instead terminate
this Lease
unless Lessor notifies Lessee, in writing, within 10 days after
receipt of
Lessee's termination notice that Lessor has elected to pay the
difference
between the actual cost thereof and the amount equal to 6 months'
Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use
of the
Premises which requires such Capital Expenditure and deliver to
Lessor written
notice specifying a termination date at least 90 days thereafter.
Such
termination date shall, however, in no event be earlier than the
last day that
Lessee could legally utilize the Premises without commencing such
Capital
Expenditure.
(b) If such Capital Expenditure
is not the result of the specific
and unique use of the Premises by Lessee (such as, governmentally
mandated
seismic modifications), then Lessor and Lessee shall allocate the
cost of such
Capital Expenditure as follows: Lessor shall advance the funds
necessary for
such Capital Expenditure but Lessee shall be obligated to pay, each
month during
the remainder of the term of this Lease, on the date on which Base
Rent is due,
an amount equal to the product of multiplying Lessee's share of the
cost of such
Capital Expenditure (the percentage specified in Paragraph 1.6 by a
fraction,
the numerator of which is one, and the denominator of which is 144
(ie. 1/144th
of the cost per month)). Lessee shall pay interest on the
unamortized balance of
Lessee's share at a rate that is commercially reasonable in the
judgment of
Lessor's accountants. Lessee may, however, prepay its obligation at
any time.
Provided, however, that if such Capital Expenditure is required
during the last
2 years of this Lease or if Lessor reasonably determines that it is
not
economically feasible to pay its share thereof, Lessor shall have
the option to
terminate this Lease upon 90 days prior written notice to Lessee
unless Lessee
notifies Lessor, in writing, within 10 days after receipt of
Lessor's
termination notice that Lessee will pay for such Capital
Expenditure. If Lessor
does not elect to terminate, and fails to tender its share of any
such Capital
Expenditure, Lessee may advance such funds and deduct same, with
Interest, from
Rent until Lessor's share of such costs have been fully paid. If
Lessee is
unable to finance Lessor's share, or if the balance of the Rent due
and payable
for the remainder of this Lease is not sufficient to fully
reimburse Lessee on
an offset basis, Lessee shall have the right to terminate this
Lease upon 30
days written notice to Lessor.
(c)
Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary,
unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead
triggered by
Lessee as a result of an actual or proposed change in use, change
in intensity
of use, or modification to the Premises then, and in that event,
Lessee shall be
fully responsible for the cost thereof, and Lessee shall not have
any right to
terminate this Lease.
2.4
ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) Lessee has been
advised by Lessor and/or Brokers to satisfy itself with respect to
the condition
of the Premises (including but not limited to the electrical, HVAC
and fire
sprinkler systems, security, environmental aspects, and compliance
with
Applicable Requirements), and their suitability for Lessee's
intended use, (b)
Lessee has made such investigation as it deems necessary with
reference to such
matters and assumes all responsibility therefor as the same relate
to its
occupancy of the Premises, and (c) neither Lessor, Lessor's agents,
nor Brokers
have made any oral or written representations or warranties with
respect to said
matters other than as set forth in this Lease. In addition, Lessor
acknowledges
that: (i) Brokers have made no representations, promises or
warranties
concerning Lessee's ability to honor the Lease or suitability to
occupy the
Premises, and (ii) it is Lessor's sole responsibility to
investigate the
financial capability and/or suitability of all proposed
tenants.
2.5
LESSEE AS PRIOR
OWNER/OCCUPANT. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to
the Start
Date, Lessee was the owner or occupant of the Premises. In such
event, Lessee
shall be responsible for any necessary corrective work.
2.6
VEHICLE PARKING.
So long as Lessee is not in default, and subject
to the Rules and Regulations attached hereto, and as established by
Lessor from
time to time, Lessee shall be entitled to rent and use the number
of parking
spaces specified in Paragraph 1.2(b) at the rental rate applicable
from time to
time for monthly parking as set by Lessor and/or its licensee.
(a) If Lessee
commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then
Lessor shall
have the right, without notice, in addition to such other rights
and remedies
that it may have, to remove or tow away the vehicle involved and
charge the cost
to Lessee, which cost shall be immediately payable upon demand by
Lessor.
(b) The monthly
rent per parking space specified in Paragraph
1.2(b) is subject to change upon 30 days prior written notice to
Lessee. The
rent for the parking is payable one month in advance prior to the
first day of
each calendar month.
2.7
COMMON AREAS -
DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior
boundary line
of the Project and interior utility raceways and installations
within the
Premises that are provided and designated by the Lessor, from time
to time, for
the general non-exclusive use of Lessor, Lessee and other tenants
of the Project
and their respective employees, suppliers, shippers, customers,
contractors and
invitees, including, but not limited to, common entrances, lobbies,
corridors,
stairwells, public restrooms, elevators, parking areas, loading and
unloading
areas, trash areas, roadways, walkways, driveways and landscaped
areas.
2.8
COMMON AREAS -
LESSEE'S RIGHTS. Lessor grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers,
contractors, customers
and invitees, during the term of this Lease, the non-exclusive
right to use, in
common with others entitled to such use, the Common Areas as they
exist from
time to time, subject to any rights, powers, and privileges
reserved by Lessor
under the terms hereof or under the terms of any rules and
regulations or
restrictions governing the use of the Project. Under no
circumstances shall the
right herein granted to use the Common Areas be deemed to include
the right to
store any property, temporarily or permanently, in the Common
Areas. Any such
storage shall be permitted only by the prior written consent of
Lessor or
Lessor's designated agent, which consent may be revoked at any
time. In the
event that any unauthorized storage shall occur then Lessor shall
have the
right, without notice, in addition to such other rights and
remedies that it may
have, to remove the property and charge the cost to Lessee, which
cost shall be
immediately payable upon demand by Lessor.
2.9
COMMON AREAS -
RULES AND REGULATIONS. Lessor or such other
person(s) as Lessor may appoint shall have the exclusive control
and management
of the Common Areas and shall have the right, from time to time, to
adopt,
modify, amend and enforce reasonable rules and regulations ("RULES
AND
REGULATIONS") for the management, safety, care, and cleanliness of
the grounds,
the parking and unloading of vehicles and the preservation of good
order, as
well as for the convenience of other occupants or tenants of the
Building and
the Project and their invitees. The Lessee agrees to abide by and
conform to all
such Rules and Regulations, and to cause its employees, suppliers,
shippers,
customers, contractors and invitees to so abide and conform. Lessor
shall not be
responsible to Lessee for the non-compliance with said Rules and
Regulations by
other tenants of the Project.
2.10
COMMON AREAS -
CHANGES. Lessor shall have the right, in Lessor's
sole discretion, from time to time:
(a) To make
changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of the
lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms,
driveways,
entrances, parking spaces, parking areas, loading and unloading
areas, ingress,
egress, direction of traffic, landscaped areas, walkways and
utility raceways:
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(b) To close
temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains
available;
(c) To designate
other land outside the boundaries of the Project
to be a part of the Common Areas;
(d) To add
additional buildings and improvements to the Common
Areas;
(e) To use the
Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion
thereof; and
(f) To do and
perform such other acts and make such other changes
in, to or with respect to the Common Areas and Project as Lessor
may, in the
exercise of sound business judgment, deem to be appropriate.
3.
TERM.
3.1
TERM. The
Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2
EARLY
POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base
Rent shall
be abated for the period of such early possession. All other terms
of this Lease
(including but not limited to the obligations to pay Lessee's Share
of the
Operating Expense Increase) shall, however, be in effect during
such period. Any
such early possession shall not affect the Expiration Date.
3.3
DELAY IN
POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee
by the
Commencement Date. If, despite said efforts, Lessor is unable to
deliver
possession by such date. Lessor shall not be subject to any
liability therefor,
nor shall such failure affect the validity of this Lease. Lessee
shall not,
however, be obligated to pay Rent or perform its other obligations
until Lessor
delivers possession of the Premises and any period of rent
abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of
possession
and continue for a period equal to what Lessee would otherwise have
enjoyed
under the terms hereof, but minus any days of delay caused by the
acts or
omissions of Lessee. If possession is not delivered within 60 days
after the
Commencement Date, as the same may be extended under the terms of
any Work
Letter executed by Parties, Lessee may, at its option, by notice in
writing
within 10 days after the end of such 60 day period, cancel this
Lease, in which
event the Parties shall be discharged from all obligations
hereunder. If such
written notice is not received by Lessor within said 10 day period,
Lessee's
right to cancel shall terminate. If possession of the Premises is
not delivered
within 120 days after the Commencement Date, this Lease shall
terminate unless
other agreements are reached between Lessor and Lessee, in
writing.
3.4
LESSEE
COMPLIANCE. Lessor shall not be required to deliver
possession of the Premises to Lessee until Lessee complies with its
obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery
of such
evidence, Lessee shall be required to perform all of its
obligations under this
Lease from and after the Start Date, including the payment of
Rent,
notwithstanding Lessor's election to withhold possession pending
receipt of such
evidence of insurance. Further, if Lessee is required to perform
any other
conditions prior to or concurrent with the Start Date, the Start
Date shall
occur but Lessor may elect to withhold possession until such
conditions are
satisfied.
4.
RENT.
4.1
RENT DEFINED.
All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to
be rent
("RENT").
4.2
OPERATING
EXPENSE INCREASE. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share of the
amount by which
all Operating Expenses for each Comparison Year exceeds the amount
of all
Operating Expenses for the Base Year, such excess being hereinafter
referred to
as the "OPERATING EXPENSE INCREASE", in accordance with the
following
provisions:
(a) "BASE YEAR"
is as specified in Paragraph 1.9.
(b) "COMPARISON
YEAR" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided, however,
Lessee shall
have no obligation to pay a share of the Operating Expense Increase
applicable
to the first 12 months of the Lease Term (other than such as are
mandated by a
governmental authority, as to which government mandated expenses
Lessee shall
pay Lessee's Share, notwithstanding they occur during the first
twelve 12
months). Lessee's Share of the Operating Expense Increase for the
first and last
Comparison Years of the Lease Term shall be prorated according to
that portion
of such Comparison Year as to which Lessee is responsible for a
share of such
increase.
(c) "OPERATING
EXPENSES" include all costs incurred by Lessor
relating to the ownership and operation of the Project, calculated
as if the
Project was at least 95% occupied, including, but not limited to,
the following:
(i) The
operation, repair, and maintenance in neat, clean,
safe, good order and condition, but not the replacement (see
subparagraph (g)),
of the following:
(aa) The Common Areas,
including their surfaces,
coverings, decorative items, carpets, drapes and window coverings,
and including
parking areas, loading and unloading areas, trash areas, roadways,
sidewalks,
walkways, stairways, parkways, driveways, landscaped areas,
striping, bumpers,
irrigation systems, Common Area lighting facilities, building
exteriors and
roofs, fences and gates;
(bb) All heating, air
conditioning, plumbing,
electrical systems, life safety equipment, communication systems
and other
equipment used in common by, or for the benefit of, lessees or
occupants of the
Project, including elevators and escalators, tenant directories,
fire detection
systems including sprinkler system maintenance and repair.
(ii) Trash disposal,
janitorial and security services, pest
control services, and the costs of any environmental
inspections;
(iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the insurance policies
maintained by Lessor pursuant to paragraph 8 and any deductible
portion of an
insured loss concerning the Building or the Common Areas;
(v) The amount
of the Real Property Taxes payable by Lessor
pursuant to paragraph 10;
(vi) The cost of
water, sewer, gas, electricity, and other
publicly mandated services not separately metered;
(vii) Labor, salaries, and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or
cleaning the
Project and accounting and management fees attributable to the
operation of the
Project;
(viii) The cost of any Capital Expenditure to the Building or
the Project not covered under the provisions of Paragraph 2.3
provided; however,
that Lessor shall allocate the cost of any such Capital Expenditure
over a 12
year period and Lessee shall not be required to pay more than
Lessee's Share of
1/144th of the cost of such Capital Expenditure in any given
month;
(ix) Replacement of
equipment or improvements that have a
useful life for accounting purposes of 5 years or less.
(d) Any item of
Operating Expense that is specifically
attributable to the Premises, the Building or to any other building
in the
Project or to the operation, repair and maintenance thereof, shall
be allocated
entirely to such Premises, Building, or other building. However,
any such item
that is not specifically attributable to the Building or to any
other building
or to the operation, repair and maintenance thereof, shall be
equitably
allocated by Lessor to all buildings in the Project.
(e) The
inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(c) shall not be deemed to impose an
obligation upon
Lessor to either have said improvements or facilities or to provide
those
services unless the Project already has the same, Lessor already
provides the
services, or Lessor has agreed elsewhere in this Lease to provide
the same or
some of them.
(f) Lessee's
Share of Operating Expense Increase shall be payable
by Lessee within 10 days after a reasonably detailed statement of
actual
expenses is presented to Lessee by Lessor. At Lessor's option,
however, an
amount may be estimated by Lessor from time to time in advance of
Lessee's Share
of the Operating Expense Increase for any Comparison Year, and the
same shall be
payable monthly during each Comparison Year of the Lease term, on
the same day
as the Base Rent is due hereunder. In the event that Lessee pays
Lessor's
estimate of Lessee's Share of Operating Expense Increase as
aforesaid, Lessor
shall deliver to Lessee within 60 days after the expiration of each
Comparison
Year a reasonably detailed statement showing Lessee's Share of the
actual
Operating Expense Increase incurred during such year. If Lessee's
payments under
this paragraph (f) during said Comparison Year exceed Lessee's
Share as
indicated on said statement, Lessee shall be entitled to credit the
amount of
such overpayment against Lessee's Share of Operating Expense
Increase next
falling due. If Lessee's payments under this paragraph during said
Comparison
Year were less than Lessee's Share as indicated on said statement,
Lessee shall
pay to Lessor the amount of the deficiency within 10 days after
delivery by
Lessor to Lessee of said statement. Lessor and Lessee shall
forthwith adjust
between them by cash payment any balance determined to exist with
respect to
that portion of the last Comparison Year for which Lessee is
responsible as to
Operating Expense Increases, notwithstanding that the Lease term
may have
terminated before the end of such Comparison Year.
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(g) Operating
Expenses shall not include the costs of replacement
for equipment or capital components such as the roof, foundations,
exterior
walls or a Common Area capital improvement, such as the parking lot
paving,
elevators, fences that have a useful life for accounting purposes
of 5 years or
more unless it is of the type described in paragraph 4.2(c) (viii),
in which
case their cost shall be included as above provided.
(h) Operating
Expenses shall not include any expenses paid by any
tenant directly to third parties, or as to which Lessor is
otherwise reimbursed
by any third party, other tenant, or by insurance proceeds.
4.3
PAYMENT. Lessee
shall cause payment of Rent to be received by Lessor
in lawful money of the United States on or before the day on which
it is due,
without offset or deduction (except as specifically permitted in
this Lease).
Rent for any period during the term hereof which is for less than
one full
calendar month shall be prorated based upon the actual number of
days of said
month Payment of Rent shall be made to Lessor at its address stated
herein or to
such other persons or place as Lessor may from time to time
designate in
writing. Acceptance of a payment which is less than the amount then
due shall
not be a waiver of Lessor's rights to the balance of such Rent,
regardless of
Lessor's endorsement of any check so stating. In the event that any
check,
draft, or other instrument of payment given by Lessee to Lessor is
dishonored
for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any
Late Charge. Payments will be applied first to accrued late charges
and
attorney's fees, second to accrued interest, then to Base Rent and
Operating
Expense Increase, and any remaining amount to any other outstanding
charges or
costs.
5.
SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution
hereof,
the Security Deposit as security for Lessee's faithful performance
of its
obligations under this Lease. If Lessee fails to pay Rent, or
otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any
portion of said
Security Deposit for the payment of any amount due Lessor or to
reimburse or
compensate Lessor for any liability, expense, loss or damage which
Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or
any portion
of the Security Deposit, Lessee shall within 10 days after written
request
therefor, deposit monies with Lessor sufficient to restore said
Security Deposit
to the full amount required by this Lease. If the Base Rent
increases during the
term of this Lease. Lessee shall, upon written request from Lessor,
deposit
additional monies with Lessor so that the total amount of the
Security Deposit
shall at all times bear the same proportion to the increased Base
Rent as the
initial Security Deposit bore to the initial Base Rent. Should the
Agreed Use be
amended to accommodate a material change in the business of Lessee
or to
accommodate a sublessee or assignee, Lessor shall have the right to
increase the
Security Deposit to the extent necessary, in Lessor's reasonable
judgment, to
account for any increased wear and tear that the Premises may
suffer as a result
thereof. If a change in control of Lessee occurs during this Lease
and following
such change the financial condition of Lessee is, in Lessor's
reasonable
judgment, significantly reduced. Lessee shall deposit such
additional monies
with Lessor as shall be sufficient to cause the Security Deposit to
be at a
commercially reasonable level based on such change in financial
condition.
Lessor shall not be required to keep the Security Deposit separate
from its
general accounts. Within 14 days after the expiration or
termination of this
Lease, if Lessor elects to apply the Security Deposit only to
unpaid Rent, and
otherwise within 30 days after the Premises have been vacated
pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the
Security Deposit
not used or applied by Lessor. No part of the Security Deposit
shall be
considered to be held in trust, to bear interest or to be
prepayment for any
monies to be paid by Lessee under this Lease.
6.
USE.
6.1
USE. Lessee
shall use and occupy the Premises only for the Agreed
Use, or any other legal use which is reasonably comparable thereto,
and for no
other purpose. Lessee shall not use or permit the use of the
Premises in a
manner that is unlawful, creates damage, waste or a nuisance, or
that disturbs
occupants of or causes damage to neighboring premises or
properties. Lessor
shall not unreasonably withhold or delay its consent to any written
request for
a modification of the Agreed Use, so long as the same will not
impair the
structural integrity of the improvements of the Building, will not
adversely
affect the mechanical, electrical, HVAC, and other systems of the
Building,
and/or will not affect the exterior appearance of the Building. If
Lessor elects
to withhold consent. Lessor shall within 7 days after such request
give written
notification of same, which notice shall include an explanation of
Lessor's
objections to the change in the Agreed Use.
6.2
HAZARDOUS
SUBSTANCES.
(a) REPORTABLE
USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance,
or waste
whose presence, use, manufacture, disposal, transportation, or
release, either
by itself or in combination with other materials expected to be on
the Premises,
is either: (i) potentially injurious to the public health, safety
or welfare,
the environment or the Premises, (ii) regulated or monitored by any
governmental
authority, or (iii) a basis for potential liability of Lessor to
any
governmental agency or third party under any applicable statute or
common law
theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, by-products
or fractions
thereof. Lessee shall not engage in any activity in or on the
Premises which
constitutes a Reportable Use of Hazardous Substances without the
express prior
written consent of Lessor and timely compliance (at Lessee's
expense) with all
Applicable Requirements: "REPORTABLE USE" shall mean (i) the
installation or use
of any above or below ground storage tank, (ii) the generation,
possession,
storage, use, transportation, or disposal of a Hazardous Substance
that requires
a permit from, or with respect to which a report, notice,
registration or
business plan is required to be filed with, any governmental
authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with
respect to
which any Applicable Requirements requires that a notice be given
to persons
entering or occupying the Premises or neighboring properties.
Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials
reasonably
required to be used in the normal course of the Agreed Use such as
ordinary
office supplies (copier toner, liquid paper, glue, etc.) and common
household
cleaning materials, so long as such use is in compliance with all
Applicable
Requirements, is not a Reportable Use, and does not expose the
Premises or
neighboring property to any meaningful risk of contamination or
damage or expose
Lessor to any liability therefore. In addition, Lessor may
condition its consent
to any Reportable Use upon receiving such additional assurances as
Lessor
reasonably deems necessary to protect itself, the public, the
Premises and/or
the environment against damage, contamination, injury and/or
liability,
including, but not limited to, the installation (and removal on or
before Lease
expiration or termination) of protective modifications (such as
concrete
encasements) and/or increasing the Security Deposit.
(b) DUTY TO
INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance has come to be located
in, on,
under or about the Premises, other than as previously consented to
by Lessor,
Lessee shall immediately give written notice of such fact to
Lessor, and provide
Lessor with a copy of any report, notice, claim or other
documentation which it
has concerning the presence of such Hazardous Substance.
(c) LESSEE
REMEDIATION. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under, or
about the
Premises (including through the plumbing or sanitary sewer system)
and shall
promptly, at Lessee's expense, comply with all Applicable
Requirements and take
all investigatory and/or remedial action reasonably recommended,
whether or not
formally ordered or required, for the cleanup of any contamination
of, and for
the maintenance, security and/or monitoring of the Premises or
neighboring
properties, that was caused or materially contributed to by Lessee,
or
pertaining to or involving any Hazardous Substance brought onto the
Premises
during the term of this Lease, by or for Lessee, or any third
party.
(d) LESSEE
INDEMNIFICATION. Lessee shall indemnify, defend and
hold Lessor, its agents, employees, lenders and ground lessor, if
any, harmless
from and against any and all loss of rents and/or damages,
liabilities,
judgments, claims, expenses, penalties, and attorneys' and
consultants' fees
arising out of or involving any Hazardous Substance brought onto
the Premises by
or for Lessee, or any third party (provided, however, that Lessee
shall have no
liability under this Lease with respect to underground migration of
any
Hazardous Substance under the Premises from areas outside of the
Project not
caused or contributed to by Lessee). Lessee's obligations shall
include, but not
be limited to, the effects of any contamination or injury to
person, property or
the environment created or suffered by Lessee, and the cost of
investigation,
removal, remediation, restoration and/or abatement, and shall
survive the
expiration or termination of this Lease. No termination,
cancellation or release
agreement entered into by Lessor and Lessee shall release lessee
from its
obligations under this Lease with respect to Hazardous Substances,
unless
specifically so agreed by Lessor in writing at the time of Such
agreement.
(e) LESSOR
INDEMNIFICATION. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees
and lenders,
harmless from and against any and all environmental damages,
including the cost
of remediation, which result from Hazardous Substances which
existed on the
Premises prior to Lessee's occupancy or which are caused by the
gross negligence
or willful misconduct of Lessor, its agents or employees. Lessor's
obligations,
as and when required by the Appllicable
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Requirements, shall include, but not be limited to, the cost of
investigation,
removal, remediation, restoration and/or abatement, and shall
survive the
expiration or termination of this Lease.
(f)
INVESTIGATIONS AND REMEDIATIONS. Lessor shall retain the
responsibility and pay for any investigations or remediation
measures required
by governmental entities having jurisdiction with respect to the
existence of
Hazardous Substances on the Premises prior to Lessee's occupancy,
unless such
remediation measure is required as a result of Lessee's use
(including
"Alterations", as defined in paragraph 7.3(a) below) of the
Premises, in which
event Lessee shall be responsible for such payment. Lessee shall
cooperate fully
in any such activities at the request of Lessor, including allowing
Lessor and
Lessor's agents to have reasonable access to the Premises at
reasonable times in
order to carry out Lessor's investigative and remedial
responsibilities.
(g) LESSOR
TERMINATION OPTION. If a Hazardous Substance Condition
(see Paragraph 9.1 (e)) occurs during the term of this Lease,
unless Lessee is
legally responsible therefor (in which case Lessee shall make the
investigation
and remediation thereof required by the Applicable Requirements and
this Lease
shall continue in full force and effect, but subject to Lessor's
rights under
Paragraph 6.2(d) and Paragraph 13). Lessor may, at Lessor's option,
either (i)
investigate and remediate such Hazardous Substance Condition, if
required, as
soon as reasonably possible at Lessor's expense, in which event
this Lease shall
continue in full force and effect, or (ii) if the estimated cost to
remediate
such condition exceeds 12 times the then monthly Base Rent or
$100,000,
whichever is greater, give written notice to Lessee, within 30 days
after
receipt by Lessor of knowledge of the occurrence of such Hazardous
Substance
Condition, of Lessor's desire to terminate this Lease as of the
date 60 days
following the date of such notice. In the event Lessor elects to
give a
termination notice, Lessee may, within 10 days thereafter, give
written notice
to Lessor of Lessee's commitment to pay the amount by which the
cost of the
remediation of such Hazardous Substance Condition exceeds an amount
equal to 12
times the then monthly Base Rent or $100,000, whichever is greater,
Lessee shall
provide Lessor with said funds or satisfactory assurance thereof
within 30 days
following such commitment. In such event, this Lease shall continue
in full
force and effect, and Lessor shall proceed to make such remediation
as soon as
reasonably possible after the required funds are available. If
Lessee does not
give such notice and provide the required funds or assurance
thereof within the
time provided, this Lease shall terminate as of the date specified
in Lessor's
notice of termination.
6.3
LESSEE'S
COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, Lessee shall, at Lessee's sole
expense, fully,
diligently and in a timely manner, materially comply with all
Applicable
Requirements, the requirements of any applicable fire insurance
underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or
consultants
which relate in any manner to the Premises, without regard to
whether said
requirements are now in effect or become effective after the Start
Date. Lessee
shall, within 10 days after receipt of Lessor's written request,
provide Lessor
with copies of all permits and other documents, and other
information evidencing
Lessee's compliance with any Applicable Requirements specified by
Lessor, and
shall immediately upon receipt, notify Lessor in writing (with
copies of any
documents involved) of any threatened or actual claim, notice,
citation,
warning, complaint or report pertaining to or involving the failure
of Lessee or
the Premises to comply with any Applicable Requirements.
6.4
INSPECTION;
COMPLIANCE. Lessor and Lessor's "LENDER" (as defined in
Paragraph 30) and consultants shall have the right to enter into
Premises at any
time, in the case of an emergency, and otherwise at reasonable
times, for the
purpose of inspecting the condition of the Premises and for
verifying compliance
by Lessee with this Lease. The cost of any such inspections shall
be paid by
Lessor, unless a violation of Applicable Requirements, or a
Hazardous Substance
Condition (see paragraph 9.1e) is found to exist or be imminent, or
the
inspection is requested or ordered by a governmental authority. In
such case,
Lessee shall upon request reimburse Lessor for the cost of such
inspection, so
long as such inspection is reasonably related to the violation or
contamination.
7.
MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.
7.1
LESSEE'S
OBLIGATIONS. Notwithstanding Lessor's obligation to keep
the Premises in good condition and repair, Lessee shall be
responsible for
payment of the cost thereof to Lessor as additional rent for that
portion of the
cost of any maintenance and repair of the Premises, or any
equipment (wherever
located) that serves only Lessee or the Premises, to the extent
such cost is
attributable to causes beyond normal wear and tear. Lessee shall be
responsible
for the cost of painting, repairing or replacing wall coverings,
and to repair
or replace any improvements with the Premises. Lessor may, at its
option, upon
reasonable notice, elect to have Lessee perform any particular such
maintenance
or repairs the cost of which is otherwise Lessee's responsibility
hereunder.
7.2
LESSOR'S
OBLIGATIONS. Subject to the provisions Of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use),
7.1 (Lessee's
Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject
to reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition
and repair the foundations, exterior walls, structural condition of
interior
bearing walls, exterior roof, fire sprinkler system, fire alarm
and/or smoke
detection systems, fire hydrants, and the Common Areas. Lessee
expressly waives
the benefit of any statute now or hereafter in effect to the extent
it is
inconsistent with the terms of this Lease.
7.3
UTILITY
INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS.
The term "UTILITY INSTALLATIONS" refers to all
floor and window coverings, air lines, vacuum lines, power panels,
electrical
distribution, security and fire protection systems, communication
cabling,
lighting fixtures, HVAC equipment, and plumbing in or on the
Premises. The term
"TRADE FIXTURES" shall mean Lessee's machinery and equipment that
can be removed
without doing material damage to the Premises. The term
"ALTERATIONS" shall mean
any modification of the improvements, other than Utility
Installations or Trade
Fixtures, whether by addition or deletion "LESSEE OWNED ALTERATIONS
AND/OR
UTILITY INSTALLATIONS" are defined as Alterations and/or Utility
Installations
made by Lessee that are not yet owned by Lessor pursuant to
Paragraph 7.4(a).
(b) CONSENT.
Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written
consent. Lessee
may, however, make non-structural Utility Installations to the
interior of the
Premises (excluding the roof) without such consent but upon notice
to Lessor, as
long as they are not visible from the outside, do not involve
puncturing,
relocating or removing the roof, ceilings, floors or any existing
walls, will
not affect the electrical, plumbing, HVAC, and/or life safety
systems, and the
cumulative cost thereof during this Lease as extended does not
exceed $2000.
Notwithstanding the foregoing, Lessee shall not make or permit any
roof
penetrations and/or install anything on the roof without the prior
written
approval of Lessor. Lessor may, as a precondition to granting such
approval,
require Lessee to utilize a contractor chosen and/or approved by
Lessor. Any
Alterations or Utility Installations that Lessee shall desire to
make and which
require the consent of the Lessor shall be presented to Lessor in
written form
with detailed plans. Consent shall be deemed conditioned upon
Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing
Lessor with
copies of both the permits and the plans and specifications prior
to
commencement of the work, and (iii) compliance with all conditions
of said
permits and other Applicable Requirements in a prompt and
expeditious manner.
Any Alterations or Utility Installations shall be performed in a
workmanlike
manner with good and sufficient materials. Lessee shall promptly
upon completion
furnish Lessor with as-built plans and specifications. For work
which costs an
amount in excess of one month's Base Rent, Lessor may condition its
consent upon
Lessee providing a lien and completion bond in an amount equal to
150% of the
estimated cost of such Alteration or Utility Installation and/or
upon Lessee's
posting an additional Security Deposit with Lessor.
(c) LIENS;
BONDS. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for
Lessee at or
for use on the Premises, which claims are or may be secured by any
mechanic's or
materialmen's lien against the Premises or any interest therein.
Lessee shall
give Lessor not less than 10 days notice prior to the commencement
of any work
in, on or about the Premises, and Lessor shall have the right to
post notices of
non-responsibility. If Lessee shall contest the validity of any
such lien, claim
or demand, then Lessee shall, at its sole expense defend and
protect itself.
Lessor and the Premises against the same and shall pay and satisfy
any such
adverse judgment that may be rendered thereon before the
enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an
amount equal to
150% of the amount of such contested lien, claim or demand,
indemnifying Lessor
against liability for the same. If Lessor elects to participate in
any such
action. Lessee shall pay Lessor's attorneys' fees and costs.
7.4
OWNERSHIP;
REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP.
Subject to Lessor's right to require removal or
elect ownership as hereinafter provided, all Alterations and
Utility
Installations made by Lessee shall be the property of Lessee, but
considered a
part of the Premises. Lessor may, at any time, elect in writing to
be the owner
of all or any specified part of the Lessee Owned Alterations and
Utility
Installations. Unless otherwise instructed per paragraph 7.4(b)
hereof, all
Lessee Owned Alterations and Utility Installations shall, at the
expiration or
termination of this Lease, become the property of Lessor and be
surrendered by
Lessee with the Premises.
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(b) REMOVAL. By
delivery to Lessee of written notice from Lessor
not earlier than 90 and not later than 30 days prior to the end of
the term of
this Lease, Lessor may require that any or all Lessee Owned
Alterations or
Utility Installations be removed by the expiration or termination
of this Lease.
Lessor may require the removal at any time of all or any part of
any Lessee
Owned Alterations or Utility Installations made without the
required consent.
(c) SURRENDER;
RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of
the
improvements, parts and surfaces thereof clean and free of debris,
and in good
operating order, condition and state of repair, ordinary wear and
tear excepted.
"Ordinary wear and tear" shall not include any damage or
deterioration that
would have been prevented by good maintenance practice.
Notwithstanding the
foregoing, if this Lease is for 12 months or less, then Lessee
shall surrender
the Premises in the same condition as delivered to Lessee on the
Start Date with
NO allowance for ordinary wear and tear. Lessee shall repair any
damage
occasioned by the installation, maintenance or removal of Trade
Fixtures, Lessee
owned Alterations and/or Utility Installations, furnishings, and
equipment as
well as the removal of any storage tank installed by or for Lessee.
Lessee shall
also completely remove from the Premises any and all Hazardous
Substances
brought onto the Premises by or for Lessee, or any third party
(except Hazardous
Substances which were deposited via underground migration from
areas outside of
the Project) even if such removal would require Lessee to perform
or pay for
work that exceeds statutory requirements. Trade Fixtures shall
remain the
property of Lessee and shall be removed by Lessee. The failure by
Lessee to
timely vacate the Premises pursuant to this Paragraph 7.4(c)
without the express
written consent of Lessor shall constitute a holdover under the
provisions of
Paragraph 26 below.
8.
INSURANCE; INDEMNITY.
8.1
INSURANCE
PREMIUMS. The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 are included
as Operating
Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include
increases in the
premiums resulting from additional coverage related to requirements
of the
holder of a mortgage or deed of trust covering the Premises,
Building and/or
Project, increased valuation of the Premises. Building and/or
Project, and/or a
general premium rate increase. Said costs shall not, however,
include any
premium increases resulting from the nature of the occupancy of any
other tenant
of the Building. If the Project was not insured for the entirely of
the Base
Year, then the base premium shall be the lowest annual premium
reasonably
obtainable for the required insurance as of the Start Date,
assuming the most
nominal use possible of the Building and/or Project. In no event,
however, shall
Lessee be responsible for any portion of the premium cost
attributable to
liability insurance coverage in excess of $2,000,000 procured under
Paragraph
8.2(b).
8.2
LIABILITY
INSURANCE.
(a) CARRIED BY
LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee
and Lessor as
an additional insured against claims for bodily injury, personal
injury and
property damage based upon or arising out of the ownership, use,
occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such
insurance
shall be on an occurrence basis providing single limit coverage in
an amount not
less than $1,000,000 per occurrence with an annual aggregate of not
less than
$2,000,000, an "Additional Insured-Managers or Lessor's of Premises
Endorsement"
and contain the "Amendment of the Pollution Exclusion Endorsement"
for damage
caused by heat, smoke or fumes from a hostile fire. The policy
shall not contain
any intra-insured exclusions as between insured persons or
organizations, but
shall include coverage for liability assumed under this Lease as an
"INSURED
CONTRACT" for the performance of Lessee's indemnity obligations
under this
Lease. The limits of said insurance shall not, however, limit the
liability of
Lessee nor relieve Lessee of any obligation hereunder. All
insurance carried by
Lessee shall be primary to and not contributory with any similar
insurance
carried by Lessor, whose insurance shall be considered excess
insurance only.
(b) CARRIED BY
LESSOR. Lessor shall maintain liability insurance
as described in Paragraph 8.2(a), in addition to, and not in lieu
of, the
insurance required to be maintained by Lessee. Lessee shall not be
named as an
additional insured therein.
8.3
PROPERTY
INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND
IMPROVEMENTS. Lessor shall obtain and keep in
force a policy or policies of insurance in the name of Lessor, with
loss payable
to Lessor, any ground-lessor, and to any Lender insuring loss or
damage to the
Building and/or Project. The amount of such insurance shall be
equal to the full
replacement cost of the Building and/or Project, as the same shall
exist from
time to time, or the amount required by any Lender, but in no event
more than
the commercially reasonable and available insurable value thereof,
Lessee Owned
Alterations and Utility Installations, Trade Fixtures, and Lessee's
personal
property shall be insured by Lessee under Paragraph 8.4. If the
coverage is
available and commercially appropriate, such policy or policies
shall insure
against all risks of direct physical loss or damage (except the
perils of flood
and/or earthquake unless required by a Lender), including coverage
for debris
removal and the enforcement of any Applicable Requirements
requiring the
upgrading, demolition, reconstruction or replacement of any portion
of the
Premises as the result of a covered loss. Said policy or policies
shall also
contain an agreed valuation provision in lieu of any coinsurance
clause, waiver
of subrogation, and inflation guard protection causing an increase
in the annual
property insurance coverage amount by a factor of not less than the
adjusted
U.S. Department of Labor Consumer Price Index for All Urban
Consumers for the
city nearest to where the Premises are located. If such insurance
coverage has a
deductible Clause, the deductible amount shall not exceed $1,000
per occurrence.
(b) RENTAL
VALUE. Lessor shall also obtain and keep in force a
policy or policies in the name of Lessor with loss payable to
Lessor and any
Lender, insuring the loss of the full Rent for one year with an
extended period
of indemnity for an additional 180 days ("RENTAL VALUE INSURANCE"),
Said
insurance shall contain an agreed valuation provision in lieu of
any coinsurance
clause, and the amount of coverage shall be adjusted annually to
reflect the
projected Rent otherwise payable by Lessee, for the next 12 month
period.
(c) ADJACENT
PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the
Common Areas or
other buildings in the Project if said increase is caused by
Lessee's acts,
omissions, use or occupancy of the Premises.
(d) LESSEE'S
IMPROVEMENTS. Since Lessor is the Insuring Party,
Lessor shall not be required to insure Lessee Owned Alterations and
Utility
Installations unless the item in question has become the property
of Lessor
under the terms of this Lease.
8.4
LESSEE'S
PROPERTY; BUSINESS INTERRUPTION INSURANCE.
(a) PROPERTY
DAMAGE. Lessee shall obtain and maintain insurance
coverage on all of Lessee's personal property, Trade Fixtures, and
Lessee Owned
Alterations and Utility Installations. Such insurance shall be full
replacement
cost coverage with a deductible of not to exceed $1,000 per
occurrence. The
proceeds from any such insurance shall be used by Lessee for the
replacement
of personal property, Trade Fixtures and Lessee Owned Alterations
and Utility
Installations. Lessee shall provide Lessor with written evidence
that such
insurance is in force.
(b) BUSINESS
INTERRUPTION. Lessee shall obtain and maintain loss
of income and extra expense insurance in amounts as will reimburse
Lessee for
direct or indirect loss of earnings attributable to all perils
commonly insured
against by prudent lessees in the business of Lessee or
attributable to
prevention of access to the Premises as a result of such
perils.
(c) NO
REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance
specified
herein are adequate to cover Lessee's property, business operations
or
obligations under this Lease.
8.5
INSURANCE
POLICIES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where
the Premises
are located, and maintaining during the policy term a "General
Policyholders
Rating" of at least B+, V, as set forth in the most current issue
of "Best's
Insurance Guide", or such other rating as may be required by a
Lender. Lessee
shall not do or permit to be done anything which invalidates the
required
insurance policies. Lessee shall, prior to the Start Date, deliver
to Lessor
certified copies of policies of such insurance or certificates
evidencing the
existence and amounts of the required insurance. No such policy
shall be
cancelable or subject to modification except after 30 days prior
written notice
to Lessor. Lessee shall, at least 30 days prior to the expiration
of such
policies, furnish Lessor with evidence of renewals or "insurance
binders"
evidencing renewal thereof, or Lessor may order such insurance and
charge the
cost thereof to Lessee, which amount shall be pay
