OFFICE BUILDING LEASE FOR 10689 N. PENNSYLVANIA, INDIANAPOLIS, INDIANA

 

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                                                                    EXHIBIT 10.5

 

                              OFFICE BUILDING LEASE

 

                                       FOR

 

                  10689 N. PENNSYLVANIA, INDIANAPOLIS, INDIANA

 

                                  BY AND BETWEEN

 

                        STANDARD MANAGEMENT CORPORATION,

 

                                   AS LANDLORD

 

                                       AND

 

                   STANDARD LIFE INSURANCE COMPANY OF INDIANA

 

                                    AS TENANT

 

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                                    EXHIBITS

 

               EXHIBIT A        PLAN SHOWING LOCATION OF BUILDING

 

               EXHIBIT B        PLAN SHOWING LOCATION OF PREMISES

 

                                        2

 

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                              OFFICE BUILDING LEASE

 

         THIS LEASE, made as of this 28th day of December, 2001, by and between

Standard Management Corporation, an Indiana corporation ("Landlord"), and

Standard Life Insurance Company of Indiana, an Indiana life insurance company

("Tenant").

 

                              W I T N E S S E T H:

 

         1.        Premises. As used in this Lease, the term "Building" shall

mean the building containing approximately 56,179 rentable square feet

constructed on a tract of land shown on Exhibit A attached hereto ("Lot")

located at 10689 N. Pennsylvania, in Indianapolis, Indiana (the Building, the

Lot and any other improvements thereon being hereinafter collected called the

"Property"). Landlord does hereby demise and let unto Tenant, and Tenant does

hereby lease and take from Landlord, for the term and upon the terms, covenants,

conditions and provisions set forth herein, all that certain portion of the

first and second floors of the Building. containing approximately 43,092 square

feet as shown cross-hatched on Exhibit B attached hereto (the "Premises"),

together with the right, in common with other occupants of the Building, to use

the driveways, sidewalks, loading and parking areas, lobbies, hallways and other

common area facilities. Tenant agrees that Tenant's consent shall not be

required for any additions, reductions or modifications of such common area

facilities, including the construction of free-standing buildings on any

portions of the common areas.

 

         2.        Term. The term of this Lease (the "Term") shall commence on

January 1, 2002 (the "Commencement Date"), and shall end on December 31, 2011

(the "Termination Date"), unless otherwise extended or sooner terminated as

provided herein, subject to the terms, covenants and agreements herein

contained.

 

         3.        Minimum Rent. Tenant shall pay an annual Minimum Rent

initially calculated at $17.50 per square foot of the Premises, in equal monthly

installments, in advance, on the first day of each calendar month during the

Term, without any prior demand therefor and without any deductions or set-offs

whatsoever; provided, however, that rent for the first full month shall be paid

upon the execution of this Lease by Tenant. If the Term commences on a day other

than the first day of a calendar month, or ends on a day other than the last day

of a calendar month, then the Minimum Rent for such fractional month shall be

prorated on the basis of 1/365th of the annual Minimum Rent for each day of such

fractional month. After this Lease has been in effect for 60 months, the Minimum

Rent shall be adjusted once thereafter by taking the Minimum Rate then in effect

and multiplying it by the cumulative percentage change in the U.S. Consumer

Price Index for the prior 60-month period, and adding the result of such

calculation to the previous Minimum Rent ("Adjusted Minimum Rent"). This

Adjusted Minimum Rent shall be payable, in equal monthly installments, beginning

with the installment due on the first day of the sixty-first (61st) month, and

through the remainder of the Term. In addition, Tenant shall pay Landlord

without set-off the additional rent as hereinafter set forth. Unless otherwise

specifically provided, all sums shall be paid to Landlord at the address given

in Paragraph 25 hereof.

 

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         4.        Additional Rent.

 

                  (a)       Annual Operating Costs. In addition to the Minimum

Rent provided in Paragraph 3, Tenant shall pay annually as additional rent an

amount equal to Tenant's pro rata share of Annual Operating Costs payable or

incurred by Landlord in any calendar year. Tenant's pro rata share shall be a

fraction, the numerator of which shall be the square feet of space in the

Premises and the denominator shall be the square feet of space leased in the

Building. The term "calendar year" as used herein shall include any partial

calendar year.

 

                           Annual Operating Costs shall mean all expenses, costs

and disbursements (including Taxes, as hereinafter defined) of every kind and

nature which Landlord shall pay, incur or become obligated to pay in respect of

a calendar year because of or in any way connected with the ownership, leasing,

management, maintenance, insuring repair and operation of the Property,

including a charge of twenty percent (20%) of all of the foregoing costs and

expenses to cover Landlord's administrative and overhead costs, and excepting

therefrom the following:

 

                            (i)       costs of alterations of tenant spaces;

 

                           (ii)      costs of capital improvements, except for

costs, including interest thereon, as reasonably amortized and determined by

Landlord, where one of the purposes of such capital improvements was to reduce

Annual Operating Costs or where such capital improvements are made in compliance

with the requirements of any federal, state or local law or regulation or where

such capital improvements directly enhance the safety of tenants in the Building

generally; and

 

                           (iii)     depreciation, interest and principal

payments on mortgages, and other debt costs, if any.

 

                                    Taxes shall mean all taxes and assessments

of every kind and nature which Landlord shall become obligated to pay with

respect to each calendar year of the Term or portion thereof because of or in

any way connected with the ownership, leasing, and operation of the Property

subject to the following:

 

                            (vv)      the amount of ad valorem real and personal

property taxes against Landlord's real and personal property to be included in

Taxes shall be the amount assessed for any calendar year, notwithstanding that

such taxes are billed and payable in a subsequent calendar year. The amount of

any tax refunds received by Landlord during the Term of this Lease shall be

deducted from Taxes for the calendar year to which such refunds are

attributable;

 

                           (ww)      the amount of special taxes and special

assessments to be included shall be limited to the amount of the installments

(plus any interest, other than penalty interest, payable thereon) of such

special tax or special assessment payable for the calendar year in respect of

which Taxes are being determined;

 

                           (xx)      the amount of any tax or excise levied by

the State of Indiana, County of Hamilton, or the Township of Clay, any political

subdivision of either, or any other taxing body, on rents or other income from

the Lot (or the value of the leases thereof) to be included shall not be greater

than the amount which would have been payable on account of such tax or excise

by

 

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Landlord during the calendar year in respect of which Taxes are being determined

had the income received by Landlord from the Building [excluding amounts payable

under this subparagraph (xx)] been the sole taxable income of Landlord for such

calendar year;

 

                            (yy)      there shall be excluded from Taxes all

income taxes [except those which may be included pursuant to subparagraph (xx)

above], excess profits taxes, franchise, capital stock, and inheritance or

estate taxes; and

 

                            (zz)      Taxes shall also include Landlord's

reasonable costs and expenses (including reasonable attorneys' fees) in

contesting or attempting to reduce any Taxes for any calendar year.

 

                  (b)       Payment of Annual Operating Costs. After the end of

each calendar year of the Term, Landlord shall compute the Annual Operating

Costs described in subparagraph (a) for such calendar year, except that in

calculating such costs, Landlord shall make an adjustment (i) for those specific

costs which Tenant or any other tenant has agreed to separately pay, and (ii) to

avoid attributing to any vacant space those specific costs which were not

incurred for such space. Tenant, promptly upon being billed therefor, shall pay

to Landlord the additional rent described in subparagraph (b) hereof. If only

part of any calendar year shall fall within the Term, the amount computed as

additional rent with respect to such calendar year under the foregoing

provisions shall be prorated in proportion to the portion of such calendar year

falling within the Term. The expiration of the Term prior to the end of such

calendar year shall not impair Tenant's obligation to pay such prorated portion

as aforesaid.

 

                           Notwithstanding the foregoing provisions of this

Paragraph 4 to the contrary, Landlord shall have the right, at its option, to

make from time to time during the Term a reasonable estimate of Tenant's share

of the additional rent which may become due hereunder with respect to any

calendar year (set at $5.50 per square foot), and to require Tenant to pay to

Landlord, at the time the monthly installments of Minimum Rent are payable, an

amount equal to 1/12th of Tenant's share of the Annual Operating Costs so

estimated by Landlord commencing on the first day of the month following the

month in which Landlord notifies Tenant of the amount of such estimate. Landlord

may from time to time revise its estimate of such amount for such calendar year,

and in such event, Tenant shall pay to Landlord upon receipt of Landlord's

invoice therefor, the amount of any underpayment by Tenant for such calendar

year to the date of the revised estimate.

 

                           Landlord shall cause the actual amount of Tenant's

share of the Annual Operating Costs to be computed and certified to Tenant

within one hundred and twenty (120) days following the end of such calendar year

(or as soon thereafter as may be practicable), and Tenant shall within ten (10)

days of receipt of the certification thereof pay to Landlord the amount of any

deficiency or Landlord shall credit any overpayment to Tenant's account for the

following year, as the case may be. Failure or delay in delivering any such

certification or invoice, or failure or delay in computing the additional rent

pursuant to this Paragraph 4, shall not be deemed a waiver by Landlord of its

right to deliver such items nor shall any such failure or delay be deemed a

release of Tenant's obligations with respect to any such certification or

invoice, or constitute a default hereunder. All additional rent payable

hereunder shall be made without any deductions or set-offs whatsoever. In the

event this Lease shall expire or terminate prior to the end of a calendar year,

Landlord reserves the right to estimate any underpayment by the Tenant for such

calendar year, and Tenant shall pay to Landlord such estimate upon receipt of

Landlord's invoice therefor, and the final adjustment of Annual

 

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Operating Costs for such calendar year shall thereafter be made in the manner

previously described in this subparagraph (b).

 

         5.        Use of Premises. Tenant shall occupy the Premises throughout

the Term and shall use the same for and only for general office purposes and for

no other purposes whatsoever without the written consent of the Landlord. Tenant

shall not permit waste or damage to the Premises or Property nor shall Tenant

violate any laws, ordinances, notices, orders, rules, regulations or

requirements of any federal, state or municipal government or any department,

commission, board or officer thereof, or of the National Board of Fire

Underwriters or any other body exercising similar functions, relating to the

Premises or to the use or manner of use of the Property, nor shall Tenant

perform any acts or carry on any practices which may injure the Property or the

Premises or be a nuisance, disturbance or menace to any other tenants of the

Building. Upon breach of this Paragraph 5, Landlord shall have the right to

terminate this Lease forthwith and to re-enter and repossess the Premises, but

Landlord's right to damages shall survive. Tenant will not do anything or fail

to do anything which will cause the cost of Landlord's insurance to increase or

which will prevent Landlord from procuring policies (including, but not limited

to public liability) from companies and in a form satisfactory to Landlord. In

the event Tenant's breach of the foregoing covenant shall cause the rate of fire

or other insurance to be increased, Tenant shall pay the amount of such increase

as additional rent promptly upon being billed therefor.

 

         6.        Services.

 

                  (a)       Utilities. Landlord shall furnish the Premises with

electricity at all times and heating and air conditioning for the normal use and

occupancy of the Premises as general offices between 8:00 a.m. and 6:00 p.m.,

Monday through Friday and between 8:00 a.m. and 1:00 p.m. Saturday of each week

during the Term (legal holidays excepted). Such of the foregoing services as

Tenant may desire at other times shall be supplied by Landlord, upon reasonable

prior notice, at such rates as Landlord shall establish from time to time for

office tenants of the Building. If Tenant shall require electricity or install

electrical equipment, including, but not limited to electrical heating,

refrigeration equipment, electronic data processing machines, computers (other

than personal computers or word processors), or other machines or equipment

which will in any way increase the amount of the electricity usually furnished

for use as general office space, or if Tenant shall attempt to use the Premises

in such a manner that the services to be furnished by Landlord would be required

during a period other than or in addition to the business hours referred to

above, Tenant will obtain prior written approval therefor from Landlord (and

Landlord may require the installation of a separate sub-meter) and will pay for

the resulting additional direct expense, including the expenses resulting from

the installation of such equipment and meters and from any modifications to the

electrical system of the Building which Landlord deems necessary, as additional

rent promptly upon being billed therefor. Landlord shall provide water from City

of Indianapolis mains for drinking, lavatory and toilet purposes drawn through

fixtures installed by the Landlord, or by the Tenant with Landlord's written

consent, from regular Building supply at the prevailing temperature. Tenant

shall not waste or permit the waste of water. Landlord shall further provide

adequate operatorless passenger elevator service at all times and freight

elevator service subject to the scheduling by Landlord. Landlord shall replace,

at Tenant's expense, all light bulbs, tubes and ballasts. Landlord does not

warrant that any of the services referred to above or any other services which

Landlord may supply will be free from interruption. Tenant acknowledges that any

one or more of such services may be

 

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suspended by reason of accident or of repairs, alterations or improvements

necessary to be made, or by reason of causes beyond the reasonable control of

Landlord and any such interruption of service shall never be deemed an eviction

or disturbance of Tenant's use and possession of the Premises or any part

thereof or render Landlord liable to Tenant for damage by abatement of rent or

otherwise or relieve Tenant from performance of Tenant's obligations under this

Lease, however, if such services are interrupted for thirty (30) consecutive

days and Tenant is unable to conduct business from the Premises, minimum rent

shall abate until the service is restored. Landlord agrees to use reasonable

care and to exercise due diligence with respect to avoiding interruption of the

services above provided for and, if interrupted, agrees that it will be for as

short a period as possible, and all repairs will be promptly and diligently made

at such times as will not unduly interfere with the occupancy and use of the

Premises by Tenant.

 

                           If at any time during the Term utility services

supplied to the Property are separately metered for the Premises, the cost of

such separately metered utility service shall be paid by Tenant promptly upon

being billed therefor, whether such billing be by Landlord or the utility

company. The charge to Tenant by Landlord for electricity consumption shall be

the same retail rate which would be payable if Tenant purchased electricity

directly from the utility company, including applicable taxes and fuel

adjustment charges.

 

                           Tenant shall not place a load upon any floor of the

Premises which exceeds the load per square foot which such floor was designed to

carry and which is allowed by law. Landlord reserves the right to prescribe in a

reasonable manner the weight and position of all safes and heavy installations

which Tenant wishes to place in the Premises so as to properly distribute the

weight thereof. Any cost of structural analysis shall be borne by Tenant.

 

                           Business machines and mechanical equipment belonging

to Tenant which cause unreasonable noise or vibration that may be transmitted to

the structure of the Building or to any leased space to such a degree as to be

objectionable to Landlord or to any tenants in the Building shall be placed and

maintained by Tenant, at Tenant's expense, on vibration eliminators or other

devices sufficient to eliminate such unreasonable noise or vibration.

 

                           All charges for any services shall be deemed rent

reserved under this Lease and shall be due and payable at the same time as the

installment of rent with which they are billed, or, if billed separately, shall

be due and payable within ten (10) days after such billing. In the event Tenant

shall fail to make payment for such services, Landlord may, in addition to all

other remedies which Landlord may have for the non-payment of rent and without

notice to Tenant, discontinue any and all such services, and such discontinuance

shall not be held or pleaded as an eviction or as a disturbance in any manner

whatsoever of Tenant's possession, or relieve Tenant from the payment of rent

when due, or vary or change any other provision of this Lease or render Landlord

liable for damages of any kind whatsoever.

 

                  (b)       Janitorial Services. Landlord will provide Tenant

with trash removal and janitorial services. Tenant shall not provide any janitor

services without Landlord's written consent and then only subject to supervision

of Landlord and at Tenant's sole responsibility and by a janitor, contractor or

employees at all times satisfactory to Landlord, but not as agent or servant of

Landlord.

 

                  (c)       Additional Heating or Cooling Equipment. If any

lights, machines or equipment including, but not limited to, computers used by

Tenant in the Premises, materially affect the

 

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temperature otherwise maintained by the Building's HVAC system, or generate

substantially more heat in the Premises than that which would be generated by

lights, machines or equipment used in connection with a typical office use or

operation, Landlord shall have the right to install in the Premises or the

Building such machinery or equipment (including, but not limited to, equipment

which modifies the Building's HVAC system) as Landlord shall deem reasonably

necessary in order to restore the temperature balance between the Premises and

the remainder of the Building. All costs expended by Landlord to install such

machinery and equipment and any costs of operation and maintenance occasioned by

such installation shall be paid by Tenant upon Landlord's demand therefor.

 

         7.        Possession. If Tenant shall enter possession of all or any

part of the Premises prior to the date fixed above for the first day of the Term

as permitted under this Lease, all of the covenants and conditions of this Lease

shall be binding upon the parties hereto in respect of such possession the same

as if the first day of the Term had been fixed as of the date when Tenant

entered such possession, but Tenant shall not be obligated to pay to Landlord

rent for the period prior to the first day of the Term of this Lease.

 

         8.        Condition of Premises. Tenant's taking possession of any

portion of the Premises shall be evidence that such portion of the Premises were

in good order and satisfactory condition when the Tenant took possession, except

as to punch list items agreed upon by Landlord and Tenant and latent defects

(which exception shall be effective for thirty (30) days following the date the

Premises are ready for occupancy, excluding items of damage caused by Tenant,

its agents, contractors and suppliers). No promise of the Landlord to alter,

remodel, repair or improve the Premises or the Building and no representations

respecting the condition of the Premises or the Building have been made by

Landlord to Tenant, other than as may be contained herein or in a separate work

letter agreement signed by Landlord and Tenant.

 

         9.        Repairs and Maintenance. Except as otherwise provided in

Paragraph 12 of this Lease, and subject to the provisions of Paragraph 10 of

this Lease, Tenant shall, at its sole cost and expense, keep the Premises in

good order, repair and tenantable condition at all times during the Term, and

Tenant shall promptly notify Landlord of all damages to the Premises and of all

damaged or broken glass, fixtures and appurtenances within the Premises and

Landlord shall thereafter repair or replace the same at Tenant's sole cost and

expense; provided, however, that Tenant shall not be required to pay for the

repair or replacement of broken or damaged exterior window glass unless such

repair or replacement is necessitated by the act, failure to act, or neglect of

Tenant, its servants, employees, agents, invitees or guests. The costs paid or

incurred by Landlord for such repairs and replacements (including Landlord's

overhead and profit, and the cost of general conditions) shall be deemed

additional rent reserved under this Lease due and payable forthwith. Landlord

may, but shall not be required so to do, enter the Premises at all reasonable

times to make any repairs, alterations, improvements or additions, including but

not limited to, ducts and all other facilities for heating and air conditioning

service, as Landlord shall desire or deem necessary for the safety, maintenance,

repair, preservation or improvement of the Building, or as Landlord may be

required or requested to do by the City of Indianapolis or by the order or

decree of any court or by any other proper authority.

 

         In the event Landlord or its agents or contractors shall elect or be

required to make repairs, alterations, improvements or additions to the Premises

or to the Building, Landlord shall be allowed to take into and upon the Premises

all material that may be required to make such repairs, alterations,

 

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improvements or additions and, during the continuance of any of said work, to

temporarily close doors, entry ways, public space and corridors in the Building

and to interrupt or temporarily suspend any services and facilities without

being deemed or held guilty of an eviction of Tenant or for damages to Tenant's

property, business or person, and the rent reserved herein shall in no way abate

while repairs, alterations, improvements or additions are being made, and Tenant

shall not be entitled to maintain any set-off or counterclaim for damages of any

kind against Landlord by reason thereof. Landlord may, at its option, make all

such repairs, alterations, improvements, or additions in and about the Building

and the Premises during ordinary business hours, but if Tenant desires to have

the same done at any other time, Tenant shall pay for all overtime and

additional expenses resulting therefrom.

 

         10.       Alterations, Additions and Fixtures.

 

                  (a)       Subject to the provisions of Paragraph 11 hereof,

Tenant shall have the right to install in the Premises its trade fixtures from

time to time during the Term of this Lease; provided, however, that no such

installation or removal thereof shall affect any structural portion of the

Premises or the Building and that Tenant shall repair and restore any damage or

injury to the Premises or the Property caused thereby.

 

                  (b)       Tenant shall not make or permit to be made any

alterations, improvements, additions, or repairs to the Premises or Property

without on each occasion first presenting to Landlord plans and specifications

therefor and obtaining Landlord's prior written consent thereto, such consent

not to be unreasonably withheld or delayed. Tenant shall pay to Landlord all

costs incurred by Landlord in connection with its review of Tenant's plans and

specifications, but excluding initial construction prior to the Commencement

Date. If Landlord shall consent to any such proposed alterations, improvements,

additions or repairs, then Tenant shall make the proposed alterations,

improvements, additions or repairs at Tenant's sole cost and expense provided

that: (i)Tenant supplies any necessary permits and certificates of insurance

therefor; (ii)such alterations, improvements, additions and repairs do not

impair the structural strength of the Building or any other improvements or

reduce the value of the Property; (iii)Tenant shall take or cause to be taken

all steps that are required by Paragraph 11 hereof and that are required or

permitted by law in order to avoid the imposition of any mechanics', laborer's

or materialman's lien upon the Premises, Building or Property; (iv) Tenant shall

use a contractor approved by Landlord; (v) the occupants of the Building and of

any adjoining real estate owned by Landlord are not annoyed or disturbed by

reason thereof; (vi)all such work shall, at Landlord's election, be subject to

supervision by Landlord, and Tenant shall promptly pay Landlord the reasonable

cost of all such supervision; (vii) all repairs, replacements, alterations,

improvements and additions shall be constructed in a good and workmanlike manner

with only good grades of material being used, and shall be of a quality and type

equivalent to or better than the original construction; and (viii) all such work

shall comply with applicable laws and building codes. Tenant hereby agrees to

protect, defend, indemnify and hold Landlord and the Property harmless from and

against any and all liabilities of every kind and description which may arise

out of or in connection with such repairs, replacements, alterations,

improvements or additions. Neither Landlord's consent to any such alternations,

improvements, additions or repairs nor Landlord's approval of the plans and

specifications therefor shall imply that the items approved are in compliance

with applicable laws, ordinances or codes, and Landlord shall have no liability

to Tenant or any other party by reason of the existence of such approval rights.

 

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                           Any and all alterations, improvements, additions and

repairs to the Premises which are constructed, installed or otherwise made by

Tenant shall be the property of Tenant until the expiration or sooner

termination of this Lease; at that time all such alterations, improvements and

additions shall remain on the Premises and become the property of Landlord

without payment therefor by Landlord unless, prior to or upon the expiration or

termination of this Lease, Landlord shall give written notice to Tenant to

remove the same, in which event Tenant will remove such alterations,

improvements and additions within ten (10) days after the expiration or

termination of this Lease, and repair and restore any damage to the Premises or

Property caused by the installation or removal thereof.

 

         11.       Mechanics' Liens. Tenant shall promptly pay any contractors

and materialmen who supply labor, work or materials to Tenant at the Premises or

the Property so as to avoid the possibility of a lien attaching to the Premises

or the Property. Tenant shall take all steps permitted by law in order to avoid

the imposition of any mechanics', laborer's or materialman's lien upon the

Premises, the Property or the Lot. Should any such lien or notice of lien be

filed, Tenant shall discharge the same within fifteen (15) days after the lien

or claim is filed or formal notice of said lien or claim has been issued, and

shall also indemnify Landlord and hold it harmless from any and all claims,

losses, damages, judgments, settlements, costs and expense (including attorneys'

fees) resulting therefrom or by reason thereof. If Tenant has not removed such

lien or claim within such fifteen (15) day period, Landlord may, but shall not

be obligated to, pay the amount necessary to remove such lien, without being

responsible for making any investigation as to the validity or accuracy thereof,

and the amount so paid, together with all costs and expenses (including

reasonable attorneys' fees) incurred by Landlord in connection therewith, shall

be deemed additional rent reserved under this Lease due and payable forthwith.

Nothing in this Lease is intended to authorize Tenant to do or cause any work or

labor to be done or any materials to be supplied for the account of Landlord,

all of the same to be solely for Tenant's account and at Tenant's risk and

expense. Throughout this Lease the term "mechanics' lien" is used to include any

lien, encumbrance or charge levied or imposed upon the Premises or the Property

or any interest therein or income therefrom on account of any mechanics',

laborer's or materialman's lien or arising out of any debt or liability to or

any claim or demand of any contractor, mechanic, supplier, materialman or

laborer and shall include without limitation any mechanics' notice of intention

given to Landlord or Tenant, any stop order given to Landlord or Tenant, any

notice or refusal to pay naming Landlord or Tenant or any injunctive or

equitable action brought by any person entitled to any mechanics' lien.

 

         12.       Damage by Fire or Other Casualty. If the Premises or the

Building (including machinery and equipment used in its operation) shall be

destroyed or damaged by fire or other casualty and if the Premises or Building

may be repaired and restored within one hundred twenty (120) days (plus such

additional time during which Landlord may be prevented or delayed from

completing the repairs for causes beyond its reasonable control and for

insurance adjustments) after such damage then Landlord shall have the option by

notifying Tenant to: (a) repair and restore the same with reasonable promptness;

or (b) elect to demolish the Building, or cease its operation, in which event

this Lease shall automatically be canceled and terminated as of the date of such

damage. In the event any such damage not caused by the act or neglect of Tenant,

its agents, servants, employees, guests, licensees or invitees renders the

Premises untenantable and if this Lease shall not be canceled and terminated by

reason on such damage, then rent shall abate during the period beginning with

the

 

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date of such fire or other casualty and ending with the date when Landlord's

work in the Premises is substantially completed, such abatement to be in an

amount bearing the same ratio to the total amount of rent for such period as the

untenantable portion of the Premises bears to the entire Premises. Landlord's

work shall not include the repair, replacement or restoration of Tenant's

fixtures or tenant improvements, including, but not limited to, special wall and

floor coverings, special lighting fixtures, built-in cabinets and bookshelves.

 

                  If such damage renders the Premises or the Building

untenantable, in whole or in part, and if, in Landlord's judgment, such damage

cannot reasonably be repaired and restored within one hundred twenty (120) days

(plus such additional time during which Landlord may be prevented from

completing the repairs for causes beyond its reasonable control), either party

shall have the right to cancel and terminate this Lease as of the date of such

damage, provided, however, that Tenant may not elect to terminate this Lease if

such damage was caused by the act or neglect of Tenant, its agents, servants,

employees, guests, licensees or invitees.

 

                   Any right to terminate or any other option provided for any

party in this Paragraph 12 must be exercised by written notice to the other

party served within one hundred thirty (130) days after such damage shall have

occurred.

 

         13.       Insurance.

 

                  (a)       Property Insurance. Tenant, at its sole cost and

expense but for the mutual benefit of Landlord and Tenant (when used in this

paragraph the term "Landlord" shall include Landlord and its respective

officers, agents, servants and employers and the term "Tenant" shall include

Tenant's agents, servants and