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EXHIBIT 10.1
OFFICE LEASE AGREEMENT
BASIC LEASE INFORMATION
1. Date: August 25, 2006
2. Landlord: Old Gettysburg Associates IV, L.P.
3. Tenant: Select Medical Corporation
4. Guarantor: Select Medical Corporation
5. Building: Executive Park West IV
6. Premises: The entire building
7. Commencement Date: Upon issuance of occupancy permit
8. Expiration Date: 15 years after issuance of occupancy
permit
9. Rentable Area of the Building: 47,864 Rentable square
feet
10. Rentable Area of the Premises: 47,864 Rentable square
feet
11. Tenant's Proportionate Share 100%
12. Initial Annual Base Rental: $1,126,240.00
13. Initial Annual Base Rental Rate: $23.53 per Rentable square
foot
14. Annual Base Rental Increase (cumulative) 4 %
15. Initial Annual Operating Expense Allowance: $239,320.00
16. Initial Annual Operating Expense Allowance Rate: $5.00 per
Rentable square
foot
17. Fiscal Year: Twelve months ending December 31
18. Security Deposit: $0 payable at the time the lease is signed
(Article #26)
19. First Rent Check of $93,853.33 Payable at the time the lease
is signed
(Article #26)
20. Broker: None
21. Landlord's Address for Notices: Old Gettysburg Associates
IV, L.P.
% Select Capital 4718 Old Gettysburg
Rd, Suite 405
Mechanicsburg, PA 17055
22. Tenant's Address for Notices: Select Medical Corporation
4716 Old Gettysburg Rd
Mechanicsburg, PA 17055
23. Other Terms and Conditions Tenant to have option to extend
under
similar conditions for additional
10 years.
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Exhibits A-F are part of this Lease, identified as follows:
Exhibit A, Description of Premises
Exhibit B, Description of Real Property
Exhibit C, Description of Leasehold Improvements
Exhibit D, Parking
Exhibit E, Security Card/Key Access
Exhibit F, Rules and Regulations
The foregoing Basic Lease Information is hereby incorporated
into and made a
part of the Office Lease Agreement which is described herein and
attached. Each
reference in the Lease to any information and definitions
contained in the Basic
Lease Information shall mean and refer to the information and
definitions
hereinabove set forth. In the event of any conflict between any
Basic Lease
Information and the Lease, the Lease shall control.
LANDLORD: Old Gettysburg Associate IV
By: SELECT CAPITAL COMMERCIAL PROPERTIES,
INC.
Its general partner
WITNESS: /s/ Marlene Bullman By: /s/ John M. Ortenzio
-------------------- ----------------------------------
John M. Ortenzio, President
Date: August 28, 2006
TENANT: Select Medical Corporation
ATTEST: /s/ John F. Duggan By: /s/ Michael E. Tarvin
------------------- ---------------------------------
Michael E. Tarvin,
Senior Vice President
Date: August 25, 2006
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1 -
PREMISES..........................................................................
4
ARTICLE 2 -
TERM...............................................................................
4
ARTICLE 3 - DELIVERY OF THE PREMISES TO
TENANT................................................. 5
ARTICLE 4 - ACCEPTANCE OF THE PREMISES AND BUILDING BY
TENANT................................. 5
ARTICLE 5 -
RENTAL............................................................................
5
ARTICLE 6 - OPERATING
EXPENSES................................................................
6
ARTICLE 7 - SERVICES BY
LANDLORD..............................................................
8
ARTICLE 8 -
UTILITIES.........................................................................
8
ARTICLE 9 -
USE..............................................................................
10
ARTICLE 10 - LAWS, ORDINANCES AND REQUIREMENTS OF PUBLIC
AUTHORITIES......................... 10
ARTICLE 11 - OBSERVANCE OF RULES AND
REGULATIONS............................................. 10
ARTICLE 12 -
ALTERATIONS.....................................................................
11
ARTICLE 13 -
LIENS...........................................................................
11
ARTICLE 14 - ORDINARY
REPAIRS................................................................
11
ARTICLE 15 -
INSURANCE.......................................................................
12
ARTICLE 16 - DAMAGE BY FIRE OR OTHER
CAUSE................................................... 13
ARTICLE 17 -
CONDEMNATION....................................................................
14
ARTICLE 18 - ASSIGNMENT AND
SUBLETTING.......................................................
14
ARTICLE 19 -
INDEMNIFICATION.................................................................
15
ARTICLE 20 - SURRENDER OF THE
PREMISES.......................................................
15
ARTICLE 21 - ESTOPPEL
CERTIFICATES...........................................................
16
ARTICLE 22 -
SUBORDINATION...................................................................
16
ARTICLE 23 -
PARKING.........................................................................
17
ARTICLE 24 - DEFAULT AND
REMEDIES............................................................
17
ARTICLE 25 - WAIVER BY
TENANT................................................................
19
ARTICLE 26 - SECURITY
DEPOSIT................................................................
20
ARTICLE 27 - ATTORNEY'S FEES AND LEGAL
EXPENSES.............................................. 20
ARTICLE 28 -
NOTICES.........................................................................
20
ARTICLE 29 -
MISCELLANEOUS...................................................................
20
EXHIBIT "A"- DESCRIPTION OF
PREMISES.........................................................
24
EXHIBIT "B"- DESCRIPTION OF REAL
PROPERTY.................................................... 25
EXHIBIT "C"- DESCRIPTION OF LEASEHOLD
IMPROVEMENTS........................................... 26
EXHIBIT "D" -
PARKING........................................................................
27
EXHIBIT "E" - SECURITY CARD
ACCESS...........................................................
28
EXHIBIT "F"- RULES AND
REGULATIONS...........................................................
29
</TABLE>
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OFFICE LEASE AGREEMENT
THIS Lease, dated as of the date specified in the Basic Lease
Information which
is attached hereto and incorporated herein for all purposes, is
made between
Landlord and Tenant.
ARTICLE 1 - PREMISES
Landlord leases to Tenant, and Tenant leases from Landlord for
the Term (as
defined below) and subject to the provisions hereof, to each of
which Landlord
and Tenant mutually agree, the Premises, which Premises is more
particularly
described in the floor plans in EXHIBIT A hereto, together with
its
appurtenances, including the right to use, in common with
others, the lobbies,
entrances, stairs, elevators, off-street parking and loading
areas (for loading
and unloading of materials and supplies), and other public
portions of the
Building, which Building is situated on the real property
described in Exhibit B
hereto. The Premises shall constitute part of the "Rentable
Area," which shall
be determined and defined by Landlord using standards adopted by
Building Owners
and Managers Association (BOMA). For purposes of this Lease, the
Rentable Area
of the Building and the Rentable Area of the Premises are as
provided in the
foregoing Basic Lease Information. The term "Common Areas" shall
mean all of the
common facilities now or hereafter under, over, in or adjacent
to the Building
designed and intended for use by all Tenants in the Building in
common
facilities now or hereafter under, over, in or adjacent to the
Building designed
and intended for use by all Tenants in the Building in common
with Landlord and
each other.
ARTICLE 2 - TERM
Section 2.01. The term of this Lease (the "Term") shall begin on
the
Commencement Date. The Commencement Date shall be the earlier of
the date:
(a) specified in the Basic Lease Information provided Landlord
has
delivered the Premises with the Building Standard Leasehold
Improvements as set forth on Exhibit C substantially completed:
or
(b) of Tenant's occupancy of the Premises for the conduct of
Tenant's
business (i.e. not occupancy for construction purposes) (the
"Commencement Date").
Unless sooner terminated, the Term shall end at midnight on the
Expiration Date
specified in the Basic Lease Information.
Section 2.02 Provided Tenant performs all of Tenant's
obligations under this
Lease, including Tenant's covenant for the payment of Rental as
defined below,
Tenant shall, during the Term, peaceably and quietly enjoy the
Premises without
disturbance from Landlord; subject, however, to the terms of
this Lease and any
deeds of trust, restrictive covenants, ground leases, easements,
and other
encumbrances to which this Lease now or may become subject and
subordinate.
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ARTICLE 3 - DELIVERY OF THE PREMISES TO TENANT
Before the Commencement Date, Landlord shall substantially
complete the floor(s)
or portions thereof on which the Premises are located and shall
construct the
Leasehold Improvements, if any, to be constructed or installed
by Landlord
pursuant to the provisions of Exhibit C hereto. If for any
reason Landlord
cannot deliver the Premises to Tenant by the Commencement Date,
this Lease shall
not be void or voidable, nor shall Landlord be liable for any
loss or damage
resulting therefrom, except that the Rental shall be waived for
the period
between the Commencement Date and the date when Landlord can
deliver possession
and Landlord shall extend the Term. Tenant may not enter or
occupy the Premises
until it is tendered by Landlord, unless Tenant's entry relates
to construction
work in the Premises. The Premises shall be deemed completed and
possession
delivered when the Premises is completed to accommodate Tenants
use. The terms
of Exhibit C hereto shall govern the construction and
installation of all
Leasehold Improvements. The term "Building Standard Leasehold
Improvements" as
used herein shall mean those Leasehold Improvements which
conform to Building
Standard. The term "Non-Building Standard Leasehold
Improvements" as used herein
shall mean all Leasehold Improvements which exceed or deviate
from Building
Standard. The terms "Building Standard" and "Non-Building
Standard" as used
herein shall have the meanings specified and or indicated in
Exhibit C hereto.
ARTICLE 4 - ACCEPTANCE OF THE PREMISES AND BUILDING BY
TENANT
Taking possession of the Premises by Tenant shall be conclusive
evidence that
Tenant:
(a) accepts the Premises as suitable for the purposes for which
they are
Leased
(b) accepts the Building and every part and appurtenance thereof
as
being in a good and satisfactory condition; and
(c) waives any defects in the Premises and its appurtenances,
except for
the completion of those items, if any, on any punchlist
remaining on
Exhibit C attached hereto.
Landlord shall not be liable, except for negligence or willful
misconduct, to
Tenant or any of its agents, employees, licensees, or invitees
for any injury or
damage to person or property due to the condition or design of
or any defect in
the Building or its mechanical systems and equipment which may
exist or occur,
and Tenant, for itself and its agents, employees, licensees, and
invitees,
expressly assumes all risks of injury or damage to person or
property, either
proximate or remote, resulting from the condition of the
Premises or the
Building.
ARTICLE 5 - RENTAL
Section 5.01 Tenant covenants and agrees to pay to Landlord as
Rental for the
Premises, in lawful money of the United States, 1/12 of the
Annual Base Rental
specified in the Basic Lease Information, payable monthly in
advance, without
notice or demand, on the first day of each calendar month. In
the event of any
late payments, Tenant agrees to pay a late charge for special
handling equal to
5% of the Rental due Rental shall be paid to Landlord, without
deduction or
offset, at the address of Landlord specified in the Basic Lease
Information or
such other place as Landlord may designate in writing. The first
monthly
installment of Rental shall be paid on the Commencement Date,
except that if
Commencement Date is a date other than the first day of a
calendar month, then
the monthly Rental for the first and last fractional months of
the Term shall be
appropriately prorated. The term "Rental" as used herein means
the sum of Annual
Base
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Rental, Proportionate Share of Operating Expense Excess (as
defined in Section
6.01), Parking Rental (as defined in EXHIBIT D hereof) and all
other sums,
whether or not expressly denominated as rent, shall constitute
Rental for the
purposes of Section 502(b)(7) of the Bankruptcy Code U.S.C.
502(b)(7). A service
charge of 10% of the amount of any checks returned stamped "NSF"
will be due and
payable, in addition to the overdue installments to cover
Landlord's extra cost
and expense in handling and processing. No payment by Tenant or
receipt by
Landlord of a lesser amount than the monthly installment due
under this Lease
shall be deemed to be other than on account of the earliest
Rental due
hereunder, nor shall any endorsement or statement on any check
or payment as
Rental be deemed an accord and satisfaction, and Landlord may
accept such check
or payment without prejudice to Landlord's right to recover the
balance of such
Rental or pursue any other remedy provided in this Lease or by
law.
Section 5.02 Upon the first anniversary of the Commencement Date
of this Lease,
and upon each and every anniversary date thereafter, the then
current Annual
Base Rental shall be increased by the Annual Base Rental Rate
Increase
(cumulative) as specified in the Basic Lease Information.
ARTICLE 6 - OPERATING EXPENSES
Section 6.01. From the Commencement Date until the Fiscal Year
End following the
Commencement Date, Tenant shall pay on a monthly basis in
advance, without
demand, on the first day of each calendar month, as part of the
Annual Base
Rental, Tenant's Proportionate Share of Operating Expenses (as
defined in
article 6 and 7) in excess of the Initial Operating Expense
Allowance
("Operating Expense Excess"). Such payments shall be calculated
and made as
follows:
(a) Before the beginning of each Fiscal Year during the Term,
Landlord
shall furnish Tenant with Landlord's reasonable estimate of
the
Operating Expenses and any anticipated Operating Expense Excess
for
such Fiscal Year. On the first day of each month during the
Fiscal
Year, Tenant shall pay Tenant's Proportionate Share of such
Fiscal
Year's estimated Operating Expense Excess in monthly
installments of
1/12th of Tenant's Proportionate Share of the estimated
annual
Operating Expense Excess for such Fiscal Year.
(b) By the first day of March of each Fiscal Year during
Tenant's
occupancy (beginning with the Fiscal Year following the
Commencement
Date), or as soon thereafter as possible, Landlord shall furnish
to
Tenant a statement of Landlord's actual Operating Expense Excess
for
the previous Fiscal Year or fraction thereof if the
Commencement
Date occurred after the first day of the previous Fiscal Year.
If
the actual Operating Expense Excess is greater than
Landlord's
estimate, a lump sum payment, considered Rental for all
purposes,
shall be made by Tenant, within 30 days of the delivery of
that
statement, equal to Tenant's Proportionate Share of the
actual
Operating Expense Excess over the Landlord's estimate for
the
previous Fiscal Year. If the actual Operating Expense Excess is
less
than Landlord's estimate, a lump sum payment shall be made
by
Landlord, within 30 days of delivery of that statement, equal
to
Tenant's Proportionate Share of the actual
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Operating Expense Excess under Landlord's estimate. The effect
of
this reconciliation payment or adjustment is that the Tenant
shall
pay during each Fiscal Year during the Term, in addition to
the
Annual Base Rental, Tenant's Proportionate Share of
Operating
Expenses in excess of an amount equal to that Fixed years
allowance.
Said amount is based upon 12 months of building operation with
all
tenants utilizing all services provided by Landlord pursuant
to
Article 7 and Article 8.
(c) Intentionally left blank
(d) With respect to the last Fiscal Year or partial Fiscal Year,
as the
case may be, during the Term, an adjustment will be made
between
Landlord and Tenant pursuant to Section 6.02, at the
appropriate
time after the Expiration Date. The provisions of the paragraph
(d)
shall survive termination of this Lease with respect to such
adjustment and any payments owing by either party to the other
after
termination hereof.
Section 6.02. As used herein, "Operating Expense" means all
expenses, costs, and
disbursements of every kind which Landlord pays or incurs in
connection with the
ownership, operation including, without limitation, the costs of
utilities, and
maintenance of the Building, Parking Areas, and exterior areas
contained within
the boundaries described in Exhibit B upon which the Building is
situated. All
Operating Expenses shall be determined according to generally
accepted accrual
accounting principles which shall be consistently applied.
Operating Expenses
shall include, but are not limited to, the following:
(a) Wages, salaries, and fees of all personnel or entities
(exclusive of
Landlord's executive personnel) directly engaged in the
operation,
maintenance, repair, or security of the Building, including
taxes,
insurance, and benefits relating thereto. As to personnel not
involved
exclusively with the administration and operation of the
Building, only
those portions of such expenses reasonably allocable to the
Building shall
be included.
(b) All supplies and materials used in the operation and
maintenance of the
Building, except for special lighting, relamping and ballasts
within any
Tenant space.
(c) Expenses of all management, maintenance, janitorial,
security, and service
agreements for the Building and the equipment therein,
including, without
limitation, alarm service, janitorial services, exterior window
cleaning,
elevator maintenance, landscaping, parking facility maintenance,
roadway
and utility maintenance and cleaning, etc.
(d) Expenses of all insurance relating to the Building for which
Landlord is
responsible hereunder, or which Landlord considers reasonably
necessary
for the operation of the Building, including, without
limitation, the cost
of property, casualty and liability insurance applicable to the
Building
and Landlord's personal property used in connection therewith,
and the
cost of business interruption or rental insurance.
(e) All taxes, assessments, and other governmental charges, now
or hereafter
applicable to the Building, or any portion thereof, or to
Landlord's
personal property used in connection therewith, and dues
(including those
levied by any Association managing all common areas and
easements)
attributable
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to the Building or its operation, exclusive of any inheritance,
gift,
franchise, income, corporate, or profit taxes which may be
assessed
against Landlord.
(f) Expenses of repairs and general maintenance (excluding
repairs and general
maintenance paid by proceeds of insurance or by Tenant or other
third
parties, and alterations attributable solely to Tenants of the
Building).
(g) Landlord's Costs related to fees paid to individuals or
companies engaged
in rendering legal, accounting or technical services including
efforts to
reduce Building Ad Valorem Tax expenses.
(h) All utility costs to Landlord of the Building (exclusive,
however, of such
special utility services as are provided in Section 8.02
hereof),
including, without limitation, water, power, fuel, heating,
lighting, air
conditioning, and ventilation.
Operating Expenses shall not include specific costs especially
billed to and
paid by specific Tenants such as above Building Standard janitor
service, above
Building Standard utility service, or other services above
Building Standard.
Tenant shall be liable for all taxes levied or assessed against
personal
property, furniture, fixtures, or Tenant finish placed by Tenant
in the
Premises. If any such taxes for which Tenant is liable are
levied or assessed
against Landlord or Landlord's property, and Landlord elects to
pay the taxes
based on such increase, Tenant shall pay to Landlord upon demand
that part of
such taxes for which Tenant is liable hereunder; provided that
Tenant shall have
the right to contest such taxes if Tenant shall have furnished
Landlord with
security sufficient in Landlord's reasonable determination.
ARTICLE 7 - SERVICES BY LANDLORD
While Tenant is occupying the Premises and is not in default
under this Lease,
Landlord shall, at its expense, but subject to the provisions of
Articles 6 and
8 hereof, furnish the Premises with:
(a) passenger elevator service (where applicable) in common with
other
Tenants for access to and from the Premises, reasonably
limited
after normal business hours and on Saturdays, Sundays, and
holidays;
(b) janitorial cleaning services as are customarily provided to
in
comparable office buildings in the greater Harrisburg area;
and
(c) utility services provided for in Article 8 below.
ARTICLE 8 - UTILITIES
Section 8.01 While Tenant is occupying the Premises and is not
in default under
this Lease, Landlord shall furnish Tenant with the following
services:
(a) potable water
(b) heating, ventilating, and/or air conditioning in season on
business
days from 7:00 a.m. to 6:00 p.m.
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(c) electric lighting for public areas and special Services
Areas of the
Building
all of which services shall be provided to Tenant by Landlord
and paid for by
Landlord as part of the Operating Expense Allowance. If Tenant
requires air
conditioning or heating outside the hours and days specified
above, Landlord
shall furnish it only at Tenant's request, and Tenant will bear
the entire
charge therefore which will be an amount equal to the rate
charged to Landlord,
at that time, plus a reasonable fee to cover Landlord's overhead
costs, with a
two-hour minimum. With respect to such after hours cost,
Landlord acknowledges
that the current after hours charge is $35.00 per hour. Whenever
machines or
equipment that generate abnormal heat are used in the Premises
by Tenant which
affect the temperature or humidity otherwise maintained by the
central air
conditioning system, Landlord will have the right to install
supplemental air
conditioning units in the Premises, and the full total cost
thereof, will be
paid by Tenant to Landlord on demand. Notwithstanding anything
in this Lease to
the contrary, Tenant shall be responsible for the cost of
special lighting
relamping and ballasts within the Premises after initial
installation of such
items.
Section 8.02 While Tenant is occupying the Premises and is not
in default under
this Lease, Landlord will furnish sufficient power for lighting,
personal
computers, and other normal office machines of similar low
electrical
consumption, all of which power shall be paid for by Landlord as
a part of the
Operating Expense Allowance. Tenant agrees that Landlord's
aforesaid obligation
does not include the provision of power for:
(a) special mainframe type computers and/or electronic data
processing
equipment,
(b) special lighting which has electrical consumption in excess
of the
Building Standard lighting, or
(c) any item that consumes more than 0.5 kilowatts at rated
capacity or
requires a voltage other than 120 volt single phase
and such consumption by Tenant shall be deemed excessive usage
for which Tenant
shall pay Landlord upon receipt of an invoice for the cost to
Landlord of such
usage. Notwithstanding the aforementioned, Tenant acknowledges
that the Building
electrical feeders have normal design limitations, such that
(i) in no event shall lighting have a design load greater than
an
average of 2.00 watts per Usable square foot, and
(ii) collectively, Tenant's equipment and lighting shall not
have an
electrical design load greater than an average of 3.75 watts
per
Usable square foot.
Upon the existence of Tenant's excess electrical requirements,
Landlord may, at
its option, upon not less than 30 days prior written notice to
Tenant,
discontinue electric services to the Premises until Tenant
reduces its power
consumption to the permissible limits. Landlord will not be
liable in any way to
Tenant for failure or defect in the supply or character of
electric energy or
any other utility service furnished to the Premises because of
any requirement,
act, or omission of the public utility servicing the Building.
All installations
of electrical fixtures, appliances, and equipment within the
Premises shall be
subject to Landlord's prior approval. Landlord's obligation to
furnish utility
services shall be subject to the rules and regulations of any
municipal or other
governmental authority regulating the business of providing
utility services.
When Tenant's use of the Premises consumes power in excess of
the Building
Standard lighting and for normal office machines of similar low
consumption,
then the usage of such additional consumption shall be
determined, at Landlord's
election, either
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(i) by a survey performed by a reputable consultant selected by
Landlord
(and paid for by Tenant when such additional consumption is
proven),
or
(ii) by separate meter in the Premises to be installed,
maintained and
read by Landlord at Tenant's sole expense.
Section 8.03 Failure to furnish, or any stoppage of, the
services provided for
in Article 7 above and in this Article 8 resulting from any
cause will not make
Landlord liable in any respect for damages to either person,
property, or
business, nor be construed as an eviction of Tenant, nor entitle
Tenant to any
abatement of Rental, nor relieve Tenant from its obligations
under this Lease.
Landlord will, with reasonable diligence, repair any malfunction
of the Building
Improvements or facilities, but Tenant will have no claim for
rebate, abatement
of Rental, or damages because of any malfunctions or
interruptions in service.
ARTICLE 9 - USE
The Premises shall be used for general office purposes, and for
no other purpose
and Tenant agrees to use and maintain the Premises in a clean,
careful, safe,
lawful, and proper manner.
ARTICLE 10 - LAWS, ORDINANCES AND REQUIREMENTS OF PUBLIC
AUTHORITIES
Tenant shall, at its sole expense,
(i) comply with all laws, orders, ordinances, and regulations
of
federal, state, county, and municipal authorities having
jurisdiction over the Premises,
(ii) comply with any direction made pursuant to law of any
public officer
or officers requiring abatement of any nuisance, or imposing
any
obligation, order, or duty upon Landlord or Tenant arising
from
Tenant's use of the Premises or from conditions which have
been
created by or at the insistence of Tenant or required by reason
of a
breach of any of Tenant's obligations hereunder, and
(iii) indemnify Landlord and hold Landlord harmless from any
loss, cost,
claim, or expense which Landlord may incur or suffer by reason
of
Tenant's failure to comply with its obligations under clauses
(i) or
(ii) above. If Tenant receives written notice of violation of
any
such law, order, ordinance, or regulation, it shall promptly
notify
Landlord thereof.
ARTICLE 11 - OBSERVANCE OF RULES AND REGULATIONS
Tenant and its employees, agents, visitors, and licensees shall
observe
faithfully and comply strictly with all Rules and Regulations
attached to this
Lease (EXHIBIT F). Landlord shall at all times have the right to
make reasonable
exchanges in and additions to such Rules and Regulation. Any
failure by Landlord
to enforce any of the Rules and Regulations now or hereafter in
effect, either
against Tenant or any other Tenant in the Building, shall not
constitute a
waiver of any such Rules and Regulations. Landlord shall not be
liable to Tenant
for the failure or refusal by any other Tenant, guest, invitee,
visitor, or
occupant of the Building to comply with any of the Rules and
Regulations, but
Landlord shall, after receipt of notice, take reasonable action
to assure
compliance.
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ARTICLE 12 - ALTERATIONS
Section 12.01 Tenant may not, at any time during the Term,
without Landlord's
prior written consent (which consent shall not be unreasonably
withheld), make
any alterations to the Premises. All alterations shall be made
at Tenant's
expense, either by Tenant's contractors which have been approved
in writing by
Landlord, or at Landlord's option, by Landlord's contractors on
terms reasonably
satisfactory to Tenant, including a fee of 15% of the actual
costs to Landlord
for performing such work to cover Landlord's overhead.
Section 12.02 All Leasehold Improvements (whether Building
Standard or
Non-Building Standard), alterations, and other physical
additions made or
installed by or for Tenant in or to the Premises shall be and
remain Landlord's
property, except Tenant's furniture, furnishings, personal
property, and
moveable trade fixtures, and shall not be removed without
Landlord's written
consent.
ARTICLE 13 - LIENS
Tenant shall keep the Premises, the Building, and the property
on which the
Building is located, free from any liens arising from any work
performed,
materials furnished, or obligations incurred by or at the
request of Tenant.
Nothing contained in this Lease shall be construed as Landlord's
consent to any
performance of labor or furnishing of any materials for any
specific
improvements, alteration, or repair of, or to, the Premises,
that would result
in any liens against the Premises or liability of the Landlord.
If, based upon
acts of Tenant, any lien is filed against the Premises, the
Building, the
Property on which the Building is located, or Tenant's Leasehold
interests
therein, Tenant shall discharge same within 10 days after its
filing. If Tenant
fails to discharge such lien within such period, then, in
addition to any other
right or remedy of Landlord, Landlord may, at its election,
discharge the lien
by either paying the amount claimed to be due, obtaining the
discharge by
deposit with a court or a title company, or by bonding. Tenant
shall pay on
demand any amount paid by Landlord for reasonable attorneys'
fees and other
legal expenses of Landlord incurred in defending any such action
or in obtaining
the discharge of such lien, together with all necessary
disbursements in
connection therewith, to double the amount of the lien claim
plus a sufficient
amount to cover any penalties, interest, attorneys' fees, court
costs, and other
legal expenses resulting from such contest. This bond shall name
Landlord and
such other parties as Landlord may direct as beneficiaries
thereunder.
ARTICLE 14 - ORDINARY REPAIRS
Tenant shall, at all times during the Term hereof and at
Tenant's sole cost and
expense, keep the Premises and every part thereof in good
condition and repair,
ordinary wear and tear, fire and other casualty excepted.
Subject to Article 20,
section 20.02 herein, Tenant shall, at the end of the term
hereof, surrender the
Premises, as repaired, to Landlord in the same condition as when
received,
ordinary wear and tear excepted. If Tenant fails to make such
repairs promptly,
Landlord may, at its option, make such repairs, and Tenant shall
pay Landlord on
demand Landlord's actual costs in making repairs plus a fee of
(15%) to cover
Landlord's overhead.
11
<PAGE>
ARTICLE 15 - INSURANCE
Section 15.01 Tenant shall, during the Term, at its sole
expense, keep in force,
with Tenant, Landlord, and the mortgagees and ground lessors of
Landlord named
as additional insured thereunder (except with respect to
Worker's Compensation
coverage) all as their respective interests may appear, the
following insurance:
(a) All Risk Insurance (including fire, extended coverage,
vandalism,
malicious mischief, extended perils, sprinkler leakage and
debris
removal) upon property of every description and kind owned by
Tenant
and located in the Building or for which Tenant is legally
liable or
installed by or on behalf of Tenant including, without
limitation,
fittings, installations, fixtures, removable trade fixtures,
Non-Building Standard Leasehold Improvements (as defined in
EXHIBIT
C), and alterations, in an amount not less than the full
replacement
cost thereof. If there is a dispute as to the amount which
comprises
full replacement cost, the decision of Landlord or the
mortgagees of
Landlord shall be conclusive and binding.
(b) Commercial liability insurance coverage to include death,
personal
injury, bodily injury (not less that $1,000,000 limits), broad
form
property damage (not less than $1,000,000 limits), fire
sprinkler
hazard, operations hazard, owner's protective coverage,
contractual
liability, and products and completed operations liability,
with
combined single liability limits not less than $1,000,000.
Such
coverage shall insure against all liability of Tenant and
its
authorized representatives and visitors arising out of, and
in
connection with, Tenant's use or occupancy of the Premises.
(c) Worker's Compensation and Employer's Liability Insurance,
with a
waiver of subrogation endorsement, in form and amount
satisfactory
to Landlord.
(d) Any other form or forms of insurance as Tenant or Landlord
or the
mortgagees of Landlord may reasonably require from time to time
in
form, in amounts, and for insurance risks against which a
prudent
Tenant of a comparable size and in a comparable business
would
protect itself.
All policies shall be issued by insurers with a Best's Insurance
Reports rating
of A or better and shall be in form satisfactory to Landlord.
Tenant agrees that
certificates of insurance on the Landlord's standard form, or
certified copies
of each such insurance policy, naming Landlord and its
mortgagees as additional
insured, will be delivered to Landlord not later than 5 days
prior to the date
that Tenant takes possession of any part of the Premises. All
policies shall
contain an undertaking by the insurers to notify Landlord and
the mortgagees of
Landlord in writing, by Registered U.S. Mail, not less than 30
days before any
material change, reduction in coverage, cancellation, or other
termination
thereof. All insurance shall be primarily as to Landlord and not
participating
with any other available insurance. So long as Tenant is not in
default,
proceeds of Tenant's insurance shall be available to repair or
replace the
insured fi
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