[FORM OF FIXED RENT LEASE]
LEASE AGREEMENT
THIS LEASE, made this ____ day of __________1998, by and between
__________________________________ ("Landlord") having its office at 000
XxXxxxxx Xxxx, Xxxxxxx Xxxxxx, XX 00000, and
______________________________________ ("Tenant"), having its office at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxx Xxxxxx, XX 00000.
Background
Landlord is the owner of the __________________________, a medical
office building ("Building") located at ________________________________________
having acquired the Building from ____________________________ (the "Prior
Landlord"). Tenant has previously agreed to lease space in the Building pursuant
to that certain Lease Agreement dated _________, [and that certain Lease
Agreement dated ______________] between Tenant and Prior Landlord (the "Existing
Lease(s)"). Prior Landlord has assigned the existing Leases to Landlord.
Landlord and Tenant desire to terminate the Existing Leases and desire to enter
into a new lease for space in the Building. Landlord desires to demise and
lease, and Tenant desires to take and lease the Premises (as defined herein) for
the purpose of conducting a business engaged in offering outpatient
rehabilitation therapy and related products and services, and for no other
purposes, all upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained, the parties hereto, intending to legally bound, hereby agree
as follows:
1. Lease of Premises: Landlord hereby leases to Tenant and Tenant
leases from Landlord, _________ square feet of space (the "Premises") in the
Building for the purpose set forth above, for the term of five (5) years (the
"term"), commencing on __________, 1998 (the "Commencement Date") and ending on
__________, 2003. The Premises are leased together with all appurtenances,
including the right to use in common with others, the foyer, public entrances,
public stairways, public elevators and other public portions of the building.
Effective as of the Commencement Date, the Existing Leases shall be terminated
and of no further force and effect.
2. Deposit: There shall be a security deposit required during the term
of the lease in the amount of $________ payable at the request of the Landlord.
3. Rent: The rent for the first year shall be payable in monthly
installments of __________________________________________, on the first day of
each month, commencing on the commencement date, without any set-off or
deduction whatsoever. The rent for the second year and subsequent years of the
lease term shall be increased by four percent (4%) per year. The annual and
monthly rents are as follows:
Period Annual Rent Monthly Rent
------ ----------- ------------
(b) Additional Rent. Tenant shall pay to the Landlord
additional rent ("Additional Rent") as set forth this Lease, including an amount
equal to Tenant's pro rata share of any Real Estate Taxes (as hereinafter
defined) and Operating Expenses (as hereinafter defined). Tenant shall, within
thirty (30) days after demand therefore by the Landlord (with respect to each
calendar year during the Term) pay each component of Additional Rent to
Landlord. Notwithstanding the foregoing, Landlord reserves the right, upon
written notice to Tenant, to require Tenant to pay such Additional Rent in
twelve (12) equal monthly installments based upon Landlord's estimates on the
dates and in the manner required for the payment of Tenant's monthly
installments of Initial Rent. The Base Rent and all such Additional Rent are
sometime referred to collectively in this Lease as "Rent."
"Real Estate Taxes" shall mean all taxes,
assessments, water, sewer or other excises, levies, license fees, permit fees,
impact fees, inspection fees and other authorization fees and similar charges,
in each case whether general or special, levied or assessed, ordinary or
extraordinary, foreseen or unforeseen, of every character, which at any time
during or in respect of the term of this Lease, may, by any governmental or
taxing authority, be assessed, levied, confirmed, or imposed on or in respect
of, or be a lien upon, the land and improvements of which the Premises are a
part, together with any other tax imposed on real estate or on owners of real
estate generally, including taxes on the land and improvements of which the
Premises are a part, upon this Lease or any rent reserved or payable hereunder,
upon the revenues or receipts from the land and improvements of which the
Premises are a part, or upon the use or occupancy thereof. In addition, Tenant
shall reimburse Landlord upon demand for any and all taxes required to be paid
by Landlord reasonably attributable to the cost or value of Tenant's personal
property or the cost or value of any leasehold improvements made in or to the
Premises by or for Tenant, and for all taxes required to be paid by Landlord
reasonably attributable to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises to
the extent such taxes are not included in Real Estate Taxes.
"Operating Expenses" shall mean any and all expenses
of Landlord in connection with the servicing, insuring, operation, maintenance,
replacement and repair of the Building and related interior and exterior
appurtenances of which the Premises are a part, including without limitation,
the cost of all casualty, liability and other insurance maintained by Landlord
with respect to the Building; the costs of trash and snow removal and the costs
of maintenance of interior common areas; the costs of elevator repairs and
maintenance; the cost of any services to achieve a reduction of, or to minimize
the increase in, Operating Expenses or Real Estate Taxes; capital expenditures
and other costs of Landlord for equipment or systems installed to reduce or
minimize increases in Operating Expenses or to comply with any governmental or
quasi-governmental ordinance or requirement. The term "Operating Expenses" shall
not include any of the following, except to the extent that such costs and
expenses are specifically included in Operating Expenses as described above:
capitalized expenditures and depreciation of the Building; painting and
decorating of tenant space; interest and amortization of mortgages; ground rent;
compensation paid to officers or executives of Landlord not employed in the
operation of the Building; taxes as measured by the net income of Landlord from
the operation of the Building; insurance reimbursements of Operating Expenses to
Landlord; and all utility and water charges payable with respect to the
Building.
"Tenant's pro rata share" shall mean _________ percent (___%).
(c) Operating Statements. As soon as practicable after
December 3l of each calendar year or portion thereof which occurs during the
Term, Landlord shall give Tenant a statement (the "Operating Statement") setting
forth: (i) the actual Operating Expenses and Real Estate Taxes for the
immediately preceding calendar year; and (ii) the amount of Tenant's overpayment
or underpayment, if any, of Additional Rent on account of the estimated
Operating Expenses and Real Estate Taxes for the immediately preceding calendar
year. In the event of overpayment by the Tenant of Operating Expenses and Real
Estate Taxes, Landlord shall reimburse Tenant for such overpayment within thirty
(30) days of delivery of the Operating Statement. In the event of underpayment
by the Tenant of Operating Expenses, Tenant shall reimburse Landlord for such
underpayment within thirty (30) days of delivery of the Operating Statement. In
no event shall Landlord recover as Additional Rent an amount which is in excess
of one hundred percent (100%) of the amount of actual Operating Expenses and
Real Estate Taxes for a Lease Year.
4. Late Charge: Any rent not paid within fifteen (15) days of its due
date shall be subject to a ten percent (10%) late charge. Payments, when
received by Landlord, shall be applied first to delinquent rents and then late
charges, if any.
5. Notice of Termination: Notwithstanding any provisions herein to the
contrary, either party may notify the other in writing at least ninety (90) days
prior to the end of the term of its intention to terminate the lease. If neither
party so notifies the other, then at the expiration of the term the Tenant shall
be treated as holding over and the monthly rent will be increased to $__________
until a new lease is negotiated or Tenant vacates the premises or Landlord
terminates said holdover tenancy upon ten (10) days' notice.
6. Condition of Premises: Tenant hereby acknowledges that Tenant has
inspected and examined the Premises, and knows the present condition of the
Premises. Tenant hereby further acknowledges that no representation or warranty
is made as to the Premises or the condition or repair thereof, and Tenant hereby
agrees to accept and lease the Premises in its "AS IS" condition.
7. Affirmative Covenants: Tenant hereby agrees and covenants with
Landlord are as follows:
7.1 To keep the Premises free from all refuse, make all necessary
repairs to the Premises for upkeep, normal wear and tear excepted, and to
surrender the Premises in good repair and broom clean, normal wear and tear
excepted.
7.2 To comply with all requirements of all public authorities and
insurance carriers.
7.3 To use every reasonable precaution against fire and to give
Landlord immediate written notice of any accident, damage or fire occurring on
the Premises.
7.4 To indemnify and hold Landlord harmless from and against any and
all claims, suits, actions or damages arising out of Tenant's use and occupancy
of the Premises, and from and against all costs, counsel fees, expenses and
liabilities incurred in and about any such claim and from and against any
orders, judgments, and/or decrees that may be entered with respect thereto,
except those due to the substantial negligence or intentional act on the part of
the Landlord. Tenant shall carry throughout any term at its own expense, an
Owner's, Landlord's and Tenant's General Public Liability Policy covering both
the Landlord and Tenant and any mortgagee, and any subsequent owner of the
Premises, with limits of Five Hundred Thousand Dollars ($500,000) (single
person)/One Million Dollars ($1,000,000) (aggregate) for bodily injury and Two
Hundred Fifty Thousand Dollars ($250,000) for property damage.
8. Negative Covenants: During the Term and any extensions and renewal
thereof, Tenant hereby agrees and covenants with Landlord that Tenant will not:
8.1 Assign, mortgage or pledge this Lease, sublet the Premises or any
portion thereof, or permit any other person to occupy the Premises.
8.2 Use or operate any machinery or equipment that is harmful to the
Premises or the Building or disturbing to other tenants in the Building.
8.3 Remove or attempt to remove any of Tenant's property from the
Premises without first paying the Landlord all the rent due pursuant to this
Lease for the purpose of abandonment of the property.
8.4 Make any material or substantial alterations, installations,
additions or improvements to or in the Premises without Landlord's prior
consent, which consent shall not be unreasonably withheld. All such work,
alterations, installations, additions or improvements shall be undertaken at
Tenant's expense.
8.5 During the Term of this Lease, no part of the Premises shall be
used in such manner as to create a nuisance or for any unlawful purpose. Tenant
covenants to operate its business in an orderly and quiet manner consistent with
the nature and character of its business.
9. Subordination: This Lease is subject and subordinate to all the
rights of the owner of the Premises and the Building, as well as any and all
mortgages and other encumbrances now or hereafter placed upon the Premises and
the Building. Tenant hereby agrees to execute upon demand any certificate,
document or instrument evidencing subordination of this Lease to the lien of any
such mortgage or encumbrance.
10. Operating Zoning: Tenant hereby acknowledges and agrees that this
Lease is a lease of property to be used exclusively for business, commercial,
manufacturer, mercantile or industrial purposes, as distinguished from residence
purposes, as provided in Section 8-110(a) of the Real Property volume of the
Annotated Code of Maryland (1996 Rep. Vol.) and that the provisions of the
foregoing Section relating to redemption are not applicable to this Lease.
Tenant acknowledges that it is satisfied that the existing zoning of the
Premises is satisfactory for its contemplated operations.
11. Property Loss and Damage: Tenant hereby agrees that Landlord or its
agents shall not be liable for any damage to property of Tenant unless caused by
or due to the negligence or intentional act of the Landlord or its agents,
servants or employees. Landlord or its agent shall not be liable for any injury
or damage to persons or property resulting from fire, explosion, falling
plaster, steam, water, rain or snow or leaks from any part of said Building or
from the pipes, appliance or plumbing works or from the roof or from any other
place or by dampness or by any other cause of whatsoever nature, unless caused
by or due to the negligence or intentional act of the Landlord or its agents,
servants or employees.
12. Rights of Landlord: Tenant hereby agrees that:
12.1 Landlord or its agents, upon reasonable notice to Tenant and at
all reasonable times, shall have the right to enter upon the Premises and view
the condition of the Premises and buildings.
12.2 At any time and from time to time, Landlord shall have the right
to make such reasonable rules and regulations as shall be necessary in its
judgment for the safety, care and cleanliness of the Premises and for the
preservation of good order therein. Such rules and regulations shall, upon
notice to Tenant, become part of this Lease.
12.3 To discontinue any or all facilities or services now or hereafter
furnished by Landlord which are not covenanted for herein, it being understood
that they constitute no part of the consideration of this Lease.
13. Remedies of Landlord: Tenant hereby agrees that, in the event that:
(a) Tenant is in default of any payments of any rent, or any part thereof, which
default shall not be cured within thirty (30) days, (b) Tenant is in default of
any of the covenants and agreements herein contained, which default shall not be
cured within thirty (30) days after the date of receipt of written notice from
the Landlord, (c) if Tenant's leasehold estate shall be taken on execution, or
(d) if the Tenant shall be declared bankrupt or insolvent according to law, or
shall make an assignment for the benefit of creditors; then, and in any such
case, Landlord may lawfully, immediately or at any time thereafter and without
further notice or demand, (i) declare due and payable and bring appropriate
action to recover all unpaid rent and additional rent for any unexpired term of
the lease, together with all costs and damages (including reasonable attorney's
fees) provided or permitted by law, (ii) without liability for any damage to
Tenant's property enter into and upon the Premises and repossess the same, expel
the Tenant and those claiming under the Tenant, without prejudice to any
remedies which might otherwise be used by the Landlord for arrears of rent or
for any breach of Tenant's covenants herein contained, (iii) declare the Lease
immediately terminated and lease the Premises to any other person with or
without altering the Premises; (iv) avail itself of any other remedies permitted
by law. No assent, expressed or implied, by Landlord, to any breach by Tenant of
any of the clauses, stipulations or covenants of this Lease shall be deemed or
taken to be a waiver of, or assent to, any succeeding breach of the same clause,
or stipulation or covenant or any preceding or succeeding breach of any other
clause, stipulation or covenant.
14. Casualty Loss and Damage to Building: If the Premises of the
Building is "substantially damaged" (as defined herein), this Lease shall
terminate as of the date of such damage, and the rent shall be canceled for the
balance of the term. For the purposes hereof, "substantial damage" shall mean
that the Premises cannot be repaired and restored within three months. If the
damage is not substantial, then Landlord shall with reasonable diligence repair
and rebuild the Premises, with the Lease to continue, but with rent abated
during the period the Premises are untenantable or a portion thereof. Landlord
shall not be liable for any inconvenience or annoyance arising from the
necessity of repairing any part of the Premises, the interruption in Tenant's
use of the Premises, or the termination of this Lease by reason of substantial
damage.
15. Condemnation:
15.1 If the whole of the Building shall be taken for any public or
quasi-public use under any statute or by right of eminent domain, or by private
purchase in lieu thereof, then this Lease shall automatically terminate as of
the date that title shall be taken. If any part of the Premises shall be so
taken as to render the remainder thereof unusable for the purposes for which the
Premises was leased, then the Landlord and the Tenant shall each have the right
to terminate the Lease on thirty (30) days' notice to the other given within
ninety (90) days after the date of such taking. In the event that this Lease
shall terminate or be terminated pursuant to this Section 15.1, all rent shall,
if and as necessary, be equitably adjusted. Any dispute under the provisions of
this Section 15.1 shall be submitted to arbitration in accordance with the rules
of the American Arbitration Association in the cities of Baltimore or
Washington, D.C. for determination at such time, and such determination shall be
binding upon both parties with no further right of appeal.
15.2 If any part of the Premises shall be so taken and this Lease shall
not terminate or be terminated under the foregoing provisions, then the rent
shall be equitably apportioned according to the space so taken, and Tenant shall
have the option to terminate said Lease. Landlord shall repair the portion of
the Premises to the extent necessary to render it reasonably suitable for the
purposes for which it was leased, and shall make all repairs to the Building in
which the Premises is located to the extent necessary to constitute the Building
a complete architectural unit, provided that such work shall not exceed the
scope of the work required to be done by the Landlord in originally constructing
the Building and the cost thereof shall not exceed the proceeds of its
condemnation award.
15.3 All compensation awarded or paid upon such a total or partial
taking of the Premises shall belong to and be the property of Landlord without
any participation by Tenant; provided, however, that nothing contained herein
shall be construed to preclude Tenant from prosecuting any claim directly
against the condemning authority in such condemnation proceedings for loss of
business, or depreciation to, damage to, or cost of removal of, or for the value
of stock, trade fixtures, furniture, and other personal property belonging to
the Tenant.
16. Waiver of Subrogation: In the event of any loss or damage upon the
property of either party hereto, such party hereby releases the other to the
extent of such parties insurance indemnities, from any and all liability for
such loss or damage even if such loss or damage shall be caused by the fault or
negligence of such party, his agents or employees; provided, however, that this
release shall only be effective with respect to loss or damage occurring during
such time as the applicable policies of insurance shall contain a clause to the
effect that this release shall not affect said policies or the right of the
insured to recover thereunder. This waiver shall be effective only in accordance
to Maryland State Laws. If any policy does not contain such clause, the insured
party shall, at the written request of the other, undertake to have such clause
added to such policy, if an endorsement so providing is obtainable; provided,
however, that the party so requesting such additional clause shall be liable for
any premium charged in connection with such endorsement.
17. Quiet Enjoyment: Tenant, upon payment of all rent reserved herein,
and performing all of the covenants and conditions hereof, shall, at all times
during the demised Term, peaceably and quietly have, hold and enjoy the
Premises.
18. Successors: The provisions of this Lease shall be binding upon,
apply to and inure to the benefit of the parties hereto, and their respective
heirs, personal representatives, successors and permitted assigns, except as
herein otherwise provided herein.
19. Captions: The captions of this Lease are inserted only as a matter
of convenience and for reference and in no way define, limit or describe the
scope or intent of this Lease, nor in any way affect this Lease.
20. Entire Agreement: This Lease constitutes the entire agreement
between the parties with respect to the subject matter hereof and shall not be
modified or canceled except in writing signed by both parties. All continuing
covenants shall survive the expiration or early termination of this Lease.
21. Severability: If any term or provision of this Lease or its
application thereof is held to any extent to be invalid or unenforceable, the
remaining terms and provisions shall not be affected thereby and each term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
22. Estoppel Certificate. Tenant agrees, at any time and from time to
time, upon not less than five (5) days prior written notice by Landlord, to
execute, acknowledge and deliver to Landlord a statement in writing (i)
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that this Lease is in full force and effect as
modified and stating the modifications), (ii) stating the dates to which the
Rent and other charges hereunder have been paid by Tenant, (iii) stating whether
or not Landlord is in default in the performance of any covenant, agreement or
condition contained in this Lease, and, if so, specifying each such default of
which Tenant may have knowledge, and (iv) setting forth such other matters as
Landlord may reasonably request. Any such statement delivered pursuant hereto
may be relied upon by any owner of the Premises, any prospective purchaser of
the Premises, any mortgagee or prospective mortgagee of the Premises or of
Landlord's interest, or any prospective assignee of any such mortgagee.
23. Non-Recourse. Anything herein to the contrary notwithstanding,
except as limited by applicable law, Landlord shall have no obligation, nor
incur any liability, beyond Landlord's interest in the Building and Tenant shall
look exclusively to such interest in the Building for the payment and discharge
of any obligations imposed upon Landlord hereunder, or otherwise.
IN WITNESS WHEREOF, the parties have executed the within Lease as of
the day and year first above written.
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