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OFFICE LEASE AGREEMENT BASIC LEASE INFORMATION

Office Lease Agreement

OFFICE LEASE AGREEMENT

                             BASIC LEASE INFORMATION
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SELECT MEDICAL CORP

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Title: OFFICE LEASE AGREEMENT BASIC LEASE INFORMATION
Governing Law: Pennsylvania     Date: 3/15/2004
Industry: Healthcare Facilities     Sector: Healthcare

OFFICE LEASE AGREEMENT

                             BASIC LEASE INFORMATION
, Parties: select medical corp
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<PAGE>

                                                                   Exhibit 10.74

 

                             OFFICE LEASE AGREEMENT

                             BASIC LEASE INFORMATION

 

1.    Date:                  October 29, 2003

2.    Landlord:               Old Gettysburg Associates

3.    Tenant:                Select Medical Corporation

4.    Guarantor:             None

5.    Building:              Executive Park West I, 4718 Old Gettysburg Road,

                           Mechanicsburg, PA 17055

6.    Premises:              Suite 205,   back left side of building

7.    Commencement Date:     November 1, 2003

8.    Expiration Date:       October 31, 2008   (a five year term)

9.    Rentable Area of the Building:     36,168        Rentable square feet

10.   Rentable Area of the Premises:     3,008         Rentable square feet

11.   Useable Area of the Building:      30,803        Useable square feet

12.   Useable Area of the Premises:      2,616         Useable square feet

13.   Tenant's Proportionate Share:      8.5%      (Item 12 divided by Item 11)

14.   Initial Annual Base Rental:        $52,339.20.00

15.   Initial Annual Base Rental Rate:   $17.40        per Rentable square foot

16.   Annual Base Rental Increase (cumulative)        3.5 %

17.   Initial Annual Operating Expense Allowance:     $19,311.36

18.   Initial Annual Operating Expense Allowance Rate: $6.42   for Rentable square

     foot for Fiscal Year 2003.

19.   Annual Operating Expense Allowance Increase (cumulative):    3      %

20.   Fiscal Year:

21.   Security Deposit:   None     payable at the time the Lease is signed.

     (Article #26)

22.   First Rent Check of     $4,361.60   payable at the time the Lease is signed.

     (Article #26)

23.   Broker:         None

24.   Additional Terms and Conditions: Landlord shall pay $5/SF per rentable

                                      area of the Premise or $15,040 toward

                                      tenant improvement

 

 

<PAGE>

                                                                   Exhibit 10.74

 

 

25.   Landlord's Address for Notices: Old Gettysburg Associates I, c/o Select

                                     Capital Corp

                                     4718 Old Gettysburg Road

                                     Mechanicsburg, PA 17055

                                      Attention:   Laura Martin

 

26.   Tenant's Address for Notices:    Select Medical Corporation

                                     4718 Old Gettysburg Rd.

                                     Mechanicsburg, PA 17055

                                     Attention:   Legal Counsel

 

Exhibits A-F are part of this Lease, identified as follows:

 

Exhibit A,         Description of Premises

 

Exhibit B,         Description of Real Property

 

                  (1) Exhibit C, Description of Leasehold Improvements

 

Exhibit D,         Description of Parking Rights

 

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 ASSOCIATES I

                                    a Pennsylvania general partnership

 

 

WITNESS:                              By: /s/ John M. Ortenzio

        ----------------------          -----------------------------------------

                                        John M. Ortenzio, General Partner

 

 

 

                                    Tenant:

 

ATTEST:                               By:/s/ Scott A. Romberger

       -----------------------          -----------------------------------------

                                       Scott A. Romberger, Vice President

 

<PAGE>

 

                                                                    Exhibit 10.74

 

                                TABLE OF CONTENTS

 

<TABLE>

<S>                                                                                       <C>

ARTICLE   1 - PREMISE...............................................................        4

ARTICLE   2 - TERM..................................................................        4

ARTICLE   3 - DELIVERY OF THE PREMISES TO TENANT....................................        5

ARTICLE   4 - ACCEPTANCE OF THE PREMISESES 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...................................................................        9

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 CAUSES........................................       13

ARTICLE 17 - CONDEMNATION..........................................................       14

ARTICLE 18 - ASSIGNMENT AND SUBLETTING ............................................       15

ARTICLE 19 - INDEMNIFICATION.......................................................       15

ARTICLE 20 - SURRENDER OF THE PREMISES.............................................       16

ARTICLE 21 - ESTOPPEL CERTIFICATES.................................................       16

ARTICLE 22 - SUBORDINATION.........................................................       17

ARTICLE 23 - PARKING...............................................................        17

ARTICLE 24 - DEFAULT AND REMEDIES..................................................       18

ARTICLE 25 - WAIVER BY TENANT......................................................       20

ARTICLE 26 - SECURITY DEPOSIT......................................................       20

ARTICLE 27 - ATTORNEY'S FEES AND LEGAL EXPENSES....................................       20

ARTICLE 28 - NOTICES...............................................................       21

ARTICLE 29 - MISCELLANEOUS.........................................................       21

EXHIBIT "A" - DESCRIPTION OF PREMISES..............................................       25

EXHIBIT "B" - DESCRIPTION OF BUILDING..............................................       26

EXHIBIT "C" - DISCRIPTION OF PARKING RIGHTS........................................       27

EXHIBIT "D" - PARKING..............................................................       28

EXHIBIT "E" - SECURITY CARD ACCESS.................................................       29

EXHIBIT "F" - RULES AND REGULATIONS................................................       30

</TABLE>

 

<PAGE>

 

                                                                   Exhibit 10.74

 

                             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.

 

                                                                               2

<PAGE>

 

                                                                   Exhibit 10.74

 

                                     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 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 and 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

 

                                                                               3

<PAGE>

 

                                                                   Exhibit 10.74

 

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 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 such 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

                  Operating Expense Excess under Landlord's estimate. The effect

                  of this reconciliation payment or adjustment

 

                                                                                4

<PAGE>

 

                                                                   Exhibit 10.74

 

                  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)       The Annual Operating Expense Allowance shall be increased each

                  fiscal year by the Annual Operating Expense Allowance Increase

                  (cumulative) as specified in the Basic Lease Information.

 

         (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 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 to the Building or its operation, exclusive

         of any inheritance, gift, franchise, income, corporate, or profit taxes

         which may be assessed against Landlord.

 

                                                                               5

<PAGE>

 

                                                                   Exhibit 10.74

 

(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

                  Tenants in comparable office buildings in the greater

                  Harrisburg area; and

 

         (c)       the 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.

 

         (c)       electric lighting for public areas and special Services Areas

                  of the Building

 

                                                                               6

<PAGE>

 

                                                                   Exhibit 10.74

 

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 therefor 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 costs, 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 and for

typewriters, dictaphones, personal computers, calculating machines, 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 typewriters, dictaphones, calculating machines and

other normal office machines of similar low consumption, then the usage of such

additional consumption shall be determined, at Landlord's election, either

 

                                                                               7

<PAGE>

 

                                                                   Exhibit 10.74

 

         (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

 

                                                                               8

<PAGE>

 

                                                                   Exhibit 10.74

 

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.

 

                                   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

 

                                                                               9

<PAGE>

 

                                                                   Exhibit 10.74

 

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.

 

                                   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 fixtures and equipment.

 

Section 15.02. During the Term, Landlord shall insure the Building (but

excluding Non-Building Standard Leasehold Improvements and any other property

which Tenant is obligated to insure under Section 15.01

 

                                                                              10

&


 
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