Maryland-Eldersburg-1470 Progress Way Lease [Amendment No. 1] - Eldersburg Business Center Inc., Merritt-Eli LLC and Dal-Tile Corp.
THIS FIRST AMENDATORY LEASE AGREEMENT made this 27/th/ day of June, 2001,
by and between (ELDERSBURG BUSINESS CENTER, INC.) MERRITT-ELI, LLC, (hereinafter
called "Landlord") and DAL-TILE CORPORATION, (hereinafter called "Tenant").
Subsequently, the interest of Eldersburg Business Center, Inc. under the Lease
was assigned to MERRITT-ELI, LLC.
EXPLANATORY STATEMENT
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By lease (hereinafter called the "Lease") dated January 16, 1997,
Landlord leased to Tenant, and the latter rented from the former, certain
premises within the building known as 1470 Progress Way, Suites 701-725,
Eldersburg, MD 21784. Pursuant to Section 48, Tenant desires to expand its
premises. In accordance with Section 48, the parties desire to amend the Lease
as hereinafter set forth.
NOW, THEREFORE, AND IN CONSIDERATION of the mutual covenants and
agreement herein contained, the parties hereto hereby covenant and agree as
follows:
1. Landlord and Tenant agree to expand Tenant's premises to
include 1470 Progress Way, Suites 726-729, Eldersburg, MD
21784 ("Expansion Premises") which represents 41,400 square
feet, for a period of sixty-six (66) months, commencing
August 1, 2001 and expiring February 28, 2007. Tenant's
premises shall be known as 1470 Progress Way, Suites
701-729, Eldersburg, MD 21784, which represents 356,400
square feet.
2. Landlord shall provide an allowance of up to twenty thousand
seven hundred dollars ($20,700.00) for improvements to the
Expansion Premises.
3. Landlord shall provide all electrical, plumbing and
mechanical systems in good working order upon occupancy.
Landlord shall provide two (2) openings through the demising
wall to the premises and shall combine the electric services
at Landlord's expense. Landlord shall be under no obligation
to perform any other work at Landlord's expense.
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4. The rental rate for the total square footage shall be as follows:
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Term Annual Rate: Monthly Rate: Per Sq. Ft.:
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8/1/01 - 2/28/02 N/A $ 95,634.00 $3.22
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3/1/02 - 2/28/03 $1,168,992.00 $ 97,416.00 $3.28
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3/1/03 - 2/28/04 $1,193.940.00 $ 99,495.00 $3.35
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3/1/04 - 2/28/05 $1,218.888.00 $101,574.00 $3.42
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3/1/05 - 2/28/06 $1,240,272.00 $103,356.00 $3.48
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3/1/06 - 2/28/07 $1,265,220.00 $105,435.00 $3.55
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5. Tenant's pro-rata share shall increase from 74.19% to 83.90%
effective August 1, 2001.
6. Tenant's cancellation fee referenced in Section 42 of the Lease shall
be increased to three hundred ninety-nine thousand ninety-six dollars
and sixty-eight cents ($399,096.68).
7. Except as herein provided, the Lease shall remain unchanged and in
full force and effect.
8. Time is of the essence for all purposes in this Amendatory Lease
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed the within Amendatory
Lease Agreement as of the day and year first above written.
WITNESS: DAL-TILE CORPORATION
/s/ [ILLEGIBLE] BY: /s/ [ILLEGIBLE] (SEAL)
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Tenant Vice President
MERRITT-ELI, LLC
ATTEST: BY: MERRITT MANAGEMENT CORPORATION AGENT
/s/ [ILLEGIBLE] BY: /s/ [ILLEGIBLE] (SEAL)
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Landlord
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[LOGO OF MERRITT]
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INDUSTIAL . COMMERCIAL . OFFICE BUILDINGS
March 7, 1997
CERTIFIED, RETURN RECEIPT REQUESTED
Dal-Tile Corporation
7834 Hawn Freeway
P.O. Box 17130
Dallas, Texas 75217
ATTN: Real Estate Department
Re: Commencement of Lease
Ref: 1470 Progress Way, Eldersburg, MD 21784
ACCOUNT #EL1240
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Dear Sir/Madam:
Per the terms of your lease dated January 16, 1997, by and between Eldersburg
Business Center, Inc. and Dal-Tile Corporation, I would like to confirm the
following:
- Lease Term Commencement Date: March 1, 1997
- Lease Term Termination Date: February 28, 2007
- Rent Commencement Date: March 1, 1997
As the original term of the Lease is for ten (10) years, the above termination
date supersedes that of February 28, 2006, as originally stated in the Lease.
- Monthly Minimum Rent for Initial Term:
*March 1, 1997 - February 28, 1998: $75,075.00
*March 1, 1998 - February 28, 1999: $77,327.25
*March 1, 1999 - February 28, 2000: $79,647.07
*March 1, 2000 - February 28, 2001: $82,036.48
*March 1, 2001 - February 28, 2002: $84,497.57
*March 1, 2002 - February 28, 2003: $86,187.52
*March 1, 2003 - February 28, 2004: $87,911.27
*March 1, 2004 - February 28, 2005: $89,669.50
*March 1, 2005 - February 28, 2006: $91,462.89
*March 1, 2006 - February 28, 2007: $93,292.15
Please acknowledge by signing the duplicate copy where indicated and return to
my attention in the enclosed envelope within ten (10) days of the date of this
letter. Also, please be sure to fill in the section at the bottom of the
signature page with the name and phone of the person we can contact after
business hours should there be an emergency.
All rental payments are due in our office by the first day of each month. Please
be advised that Landlord
2066 Lord Baltimore Drive . Baltimore, Maryland . 21244 . (410) 298-2600
FAX (410) 298-9644
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Dal-Tile Corporation
March 7, 1997
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does not send out monthly invoices. Your check should be made payable to
Eldersburg Business Center, Inc. and mailed to same at 2066 Lord Baltimore
Drive, Baltimore, MD 21244. Also, kindly reference the above account number on
your check.
If you have not done so already, please contact BGE at (410) 685-0123 and have
the electric service placed in your name effective as of your commencement
date being March 1, 1997. This can be done retractively and if you fail to
contact BGE, you run the risk of having your service interrupted.
Please return the following items to my attention with the acknowledgment of the
above:
- The enclosed Tenant Emergency Card
- A Certificate of Insurance showing current coverage as outlined in Section 8
of your lease
- A copy of your HVAC Maintenance Agreement as required under Section 11 of your
lease
Regarding the HVAC Maintenance Agreement, I am enclosing a proposal for the
maintenance required. Merritt has Certified HVAC Technicians on staff and we
offer a full service Maintenance Agreement at a below market rate that not only
covers all parts and labor but also guarantees the HVAC unit for the term of you
lease and any extension(s). If you would like to accept our proposal, please
sign both copies and return one along with payment to the attention of Josie
Kaminiski. Please feel free to contact Josie with any questions you may have
regarding the proposal.
Sincerely,
ELDERSBURG BUSINESS CENTER, INC.
BY MERRITT MANAGEMENT CORPORATION
AGENT FOR ELDERSBURG BUSINESS CENTER, INC.
/s/ Beth Meuche
Beth Meuche
enclosure
AGREED TO AND ACKNOWLEDGED THIS 21 DAY OF MARCH, 1997
--- -----
WITNESS DAL-TILE CORPORATION
/s/ [ILLEGIBLE]
--------------------(SEAL)
EMERGENCY CONTACT PERSON AFTER BUSINESS HOURS:
----------------------------------------------
--------------------------- -----------------------
NAME (PLEASE PRINT) PHONE
cc: 1470 Progress Way
Eldersburg, MD 21784
District Manager
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TABLE OF CONTENTS FOR LEASE BETWEEN
ELDERSBURG BUSINESS CENTER, INC., LANDLORD
DAL-TITLE CORPORATION, TENANT.
1. PAYMENT OF RENTAL .........................................................2
2. USE .......................................................................2
3. UTILITIES .................................................................2
4. COMPLIANCE WITH LAWS ......................................................3
5. ASSIGNMENT AND SUBLETTING .................................................4
6. LOADING CAPACITY ..........................................................5
7. INCREASE IN LANDLORD'S INSURANCE RATES.....................................5
8. INSURANCE - INDEMNITY .....................................................5
9. ALTERATIONS ...............................................................8
10. OWNERSHIP OF ALTERATIONS ..................................................8
11. REPAIRS AND MAINTENANCE ...................................................8
12. OPERATING COSTS ..........................................................10
13. DEFAULT ..................................................................12
14. DAMAGE OR DESTRUCTION ....................................................14
15. POSSESSION ...............................................................15
16. EXTERIOR OF PREMISES - SIGNS .............................................15
17. RELOCATION ...............................................................16
18. FOR RENTAL/SALE SIGNS ....................................................16
19. WATER AND OTHER DAMAGE ...................................................16
20. RIGHT OF ENTRY ...........................................................16
21. TERMINATION OF TERM ......................................................16
22. CONDEMNATION .............................................................17
23. SUBORDINATION ............................................................18
24. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS ...........................18
25. ATTORNMENT ...............................................................19
26. NON-WAIVER OF FUTURE ENFORCEMENT .........................................20
27. PERSONAL PROPERTY TAXES ..................................................20
28. RECORDATION OF LEASE .....................................................20
29. NOTICES ..................................................................21
30. WAIVER OF JURY TRIAL .......................Section intentionally deleted
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31. SEVERABILITY .......................................................... 21
32. NON-WAIVER ............................................................ 22
33. SUCCESSORS AND ASSIGNS ................................................ 22
34. NOTICES TO MORTGAGEE .................................................. 22
35. ESTOPPEL CERTIFICATE .................................................. 23
36. ENVIRONMENTAL PROVISIONS .............................................. 23
37. CAPTIONS .............................................................. 25
38. FINAL AND ENTIRE AGREEMENT ............................................ 25
39. TENANT REPRESENTATIVE ................................................. 25
40. ADDITIONAL RENT ....................................................... 25
41. LANDLORD'S WORK ....................................................... 26
42. CANCELLATION OPTION ................................................... 26
43. LANDLORD'S GUARANTEE .................................................. 26
44. CONSENT ............................................................... 26
45. RIGHT OF FIRST OFFER FOR CONTIGUOUS SPACE ............................. 27
46. NON-DISTURBANCE ....................................................... 27
47. TENANT FENCE .......................................................... 28
48. EXPANSION ............................................................. 28
49. RENEWAL OPTIONS ....................................................... 28
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month of the term to the date the term ends shall be prorated and shall be
payable on the first day of the last month of the term.
All rentals shall be paid to Landlord at 2066 Lord Baltimore
Drive, Baltimore, Maryland 21244, or at such other place or to such appointee of
the Landlord as the Landlord may from time to time designate in writing.
This Lease is made subject to the following additional terms,
covenants and conditions:
1. Payment of Rental.
Tenant covenants and agrees to pay the rental herein reserved and each
installment thereof promptly when and as due, without setoff or deduction
whatsoever. Tenant further agrees that it will not prepay rent more than one (1
month in advance without Landlord's prior written consent.
2. Use.
Tenant covenants and agrees to use and occupy the Premises solely for the
following purposes:
STORAGE, DISTRIBUTION, AND RELATED OFFICE, AND ANY OTHER USE PERMITTED
UNDER THE EXISTING ZONING.
Tenant agrees to comply with all applicable zoning and other laws and
regulations, and provide and install at its own expense any additional equipment
or alterations required to comply with all such laws and regulations as
required from time to time; provided, however, in any non-compliance by Tenant
which does not have an adverse effect on the Premises shall not be deemed a
breach of this lease. Tenant will not permit, allow or cause any public or
private auction sales or sheriffs' or constables' sales to be conducted on or
from the Premises.
3. Utilities.
(a) Tenant agrees to pay as additional rent Tenant's pro rata share of
the water rent and sewer service charges chargeable to the total building in
which the Premises are located, based upon the size of the Premises in
proportion to the total square footage of the building, which sum shall be due
within fifteen (15) days after Landlord's written demand. However, if in
Landlord's reasonable judgment, the water and sewer charges for the Premises are
substantially higher than normal due
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THIS LEASE, made this 16/th/ day of January, 1997, by and between
ELDERSBURG BUSINESS CENTER, INC., hereinafter called "Landlord," and DAL-TILE
CORPORATION, hereinafter call "Tenant."
WITNESSETH, that in consideration of the rental hereinafter agreed
upon and the performance of all the conditions and covenants hereinafter set
forth on the part of the Tenant to be performed, the Landlord does hereby lease
unto the said Tenant, and the latter does lease from the former the following
Premises (hereinafter sometimes called the "Premises"):
BEING those Premises outlined in red on the Plat attached hereto as
Exhibit A, said Premises being located within the building known as 1470
Progress Way, Eldersburg, MD 21784; 315,000 square feet; (Building)
for the term of ten (10) years, beginning on the first day of March 1997, and
ending on the last day of February, 2006, at and for the annual rental as
follows:
Terms: Annually: Monthly: Per S.F.:
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Year 1 $ 900,900.00 $75,075.00 $2.86
Year 2 $ 927,927.00 $77,327.25 $2.95
Year 3 $ 955,764.84 $79,647.07 $3.03
Year 4 $ 984,437.76 $82,036.48 $3.13
Year 5 $1,013,970.84 $84,497.57 $3.22
Year 6 $1,034,250.24 $86,187.52 $3.28
Year 7 $1,054,935.24 $87,911.27 $3.35
Year 8 $1,076,034.00 $89,669.50 $3.42
Year 9 $1,097,554.68 $91,462.89 $3.48
Year 10 $1,119,505.80 $93,292.15 $3.55
* Notwithstanding the above, Tenant will receive a total rent credit in
the amount of Ninety Thousand Dollars ($90,000.00) which shall be applied at a
rate of Thirty Thousand Dollars ($30,000.00) per month for the first three (3)
months of the first year of the lease term.
Payable in advance on the first day of each and every month during the term of
this Lease, in equal monthly installments each, without setoff or deduction
whatsoever. If the term of this Lease shall commence on a date other than the
first day of a month, the rental for the period from the date of commencement of
the term to the first day of the first full calendar month of the term shall be
prorated and shall be payable on the first day of the term; if the term of this
Lease shall end on a date other than the last day of a month, the rent for the
period from the first day of the last
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to Tenant's water usage, the Landlord may install a water meter at Landlord's
expense and thereafter Tenant will pay all water charges for the Premises based
on such meter readings.
(b) Tenant shall also pay all costs of electricity, gas, telephone
and other utilities used or consumed on the Premises together with all taxes,
levies or other charges on such utilities. If Tenant defaults in payment of any
such utilities, charges or taxes, Landlord may, at its option, pay the same for
and on Tenant's account, in which event Tenant shall promptly reimburse Landlord
therefor.
(c) In addition, Tenant shall pay, as additional rent, 74.15% (being
the same percentage which the square foot floor area of the Premises bears to
the entire leasable area of the building) of Landlord's costs of public service
electric usage, including usage for lighting the parking and other common areas,
which sum shall be due within fifteen (15) days after Landlord's demand.
4. Compliance with Laws.
(a) Tenant covenants and agrees that it will, at its own expense,
observe, comply with and execute all laws, orders, rules, requirements and
regulations of any and all governmental departments, bodies, bureaus, agencies
and officers, and all rules, directions, requirements and recommendations of the
local board of fire underwriters and the fire insurance rating organizations
having jurisdiction over the area in which the Premises are situated, or other
bodies or agencies now or hereafter exercising similar functions in the area in
which the Premises are situated, in any way pertaining to the Premises or the
use and occupancy thereof, provided, however that any non-compliance by Tenant
which does not have an adverse effect on the Premises shall not be a breach of
this lease. In the event Tenant shall fail or neglect to comply with any of the
aforesaid laws, orders, rules, requirements or recommendations and any such
non-compliance does not have an adverse effect on the Premises, Landlord or its
agents may enter the Premises after providing written notice to Tenant and
Tenant has a thirty (30) day period to comply with any laws, orders, rules,
requirements or recommendations, and take all such action and do all such work
in or to the Premises as may be necessary in order to cause compliance with such
laws, orders, rules, requirements or recommendations, and Tenant covenants and
agrees to reimburse Landlord promptly upon demand for the expenses incurred by
Landlord in taking such action and performing such work.
(b) Without limiting the generality of paragraph (a) hereof, Tenant
shall at all times keep the Premises in compliance
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with the Americans With Disabilities Act and its supporting regulations, and all
similar federal, state or local laws, regulations and ordinances. If Landlord's
consent would be required for alterations to bring the Premises into compliance,
Landlord agrees not to unreasonably withhold its consent.
5. Assignment and Subletting.
(a) Tenant covenants and agrees not to assign this Lease, in whole or
in part, nor sublet the Premises, or any part or portion thereof, nor grant any
license or concession for all or any part thereof, without the prior written
consent of the Landlord in each instance first had and obtained. If such
assignment or subletting is permitted, Tenant shall not be relieved from any
liability whatsoever under this Lease. In the event that the amount of the rent
or other consideration to be paid to the Tenant by any assignee or sublessee is
greater than the rent required to be paid by the Tenant to the Landlord pursuant
to this Lease, Tenant shall pay to Landlord one-half of any such excess, after
deducting Tenant's transaction and improvement costs, as is received by Tenant
from such assignee or sublessee. Any consent by Landlord to an assignment or
subletting of this Lease shall not constitute a waiver of the necessity of such
consent as to any subsequent assignment or subletting. An assignment for the
benefit of Tenant's creditors shall not be effective to transfer or assign
Tenant's interest under this Lease unless Landlord shall have first consented
thereto in writing.
(b) In the event this Lease contains a renewal option exercisable by
Tenant, Landlord's consent to an assignment or sublease of the Premises or any
portion thereof during the original Lease term shall be deemed to be conditioned
upon the agreement of Tenant and such assignee or sublessee that such renewal
right or option shall terminate and be of no further force or effect unless
Landlord's consent to such assignment or sublease expressly provides otherwise.
Consequently, unless so provided otherwise, any assignment or sublease during
the original Lease term shall automatically constitute a termination of the
right of Tenant or such assignee or sublessee to exercise any renewal option
contained herein.
(c) In the event Tenant desires to assign this Lease or to sublease
all or any substantial portion of the Premises, Landlord shall have the right
and option to terminate this Lease, which right or option shall be exercisable
by written notice from Landlord to Tenant within thirty (30) days from the date
Tenant gives Landlord written notice of its desire to assign or sublease.
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6. Loading Capacity.
Tenant covenants and agrees not to load the Premises beyond its present carrying
or loading capacity, subject to the specifications set forth in Exhibit "A".
7. Increase in Landlord's Insurance Rates.
Tenant will not do, or suffer to be done, anything in or about the Premises, or
keep or suffer to be kept, anything in or about the Premises which will
contravene or materially affect any policy of insurance against loss by fire or
other hazards, including, but not limited to, public liability, now existing or
which will prevent the Landlord from procuring such policies in companies
acceptable to Landlord at standard rates.
8. Insurance - Indemnity.
(a) Tenant covenants and agrees that from and after the date of
delivery of the Premises from Landlord to Tenant, Tenant will carry and
maintain, at its sole cost and expense and in the amounts specified and in the
form hereinafter provided, the following types of insurance
(i) Public Liability and Property Damage. General Public
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Liability Insurance covering the Premises and Tenant's use thereof against
claims for personal injury or death and property damage occurring upon, in
or about the Premises, such insurance to afford protection to the limit of
not less than $2,000,000 arising out of any one occurrence, and against
property damage to afford protection to the limit of not less than
$2,000,000; or such insurance may be for a combined single limit of
$2,000,000 per occurrence. The insurance coverage required under this
Section 8(a)(i) shall, in addition, extend to any liability of Tenant
arising out of Tenant's indemnities hereinafter provided, as well as
Independent Contractors' Liability, Products/Completed Operations
Liability, Personal Injury LIability and Contractual Liability.
(ii) Boilers. If Tenant's Premises shall contain a boiler or
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other similar pressure vessel, Tenant shall carry Boiler and Machinery
Insurance with a direct damage limit not less than the full value of the
building in which Tenant's Premises are situated. Such insurance shall be
written on a "repair and replacement" (replacement cost) basis.
(iii) Tenant Improvements and Property. Insurance covering all
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leasehold improvements and other improvements installed by Tenant upon the
Premises, trade fixtures and personal property from time to time in, on or
upon the
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Premises and any alterations, improvements, additions or changes made by
Tenant thereto in an amount not less than one hundred percent (100%) of
their full replacement cost from time to time during the Lease term,
providing protection against perils included within the standard
Maryland form of fire and extended coverage insurance policy, together
with insurance against sprinkler leakage or other sprinkler damage,
vandalism and malicious mischief.
(iv) Plate Glass. Plate glass insurance covering all plate glass
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in the Premises. Tenant shall be and remain liable for the repair and
restoration of all such plate glass.
(b) All policies of insurance to be provided by Tenant shall be
issued in form acceptable to Landlord by insurance companies with general
policyholder's rating of not less than A and a financial rating of AAA as rated
in the most current available "Best's" Insurance Reports, and qualified to do
business in Maryland. A certificate of insurance, naming Landlord as additional
insured shall be delivered to Landlord within ten (10) days after delivery of
possession of the Premises to Tenant and thereafter at least fifteen (15) days
prior to the expiration of each such policy. As often as any such policy shall
expire or terminate, renewal or additional policies shall be procured and
maintained by Tenant in like manner and to like extent. All such policies of
insurance shall contain a provision that the company writing said policy will
give to Landlord at least thirty (30) days' notice in writing in advance of any
cancellations, or lapse, or the effective date of any reduction in the amounts
of insurance. In the event Tenant shall fail to promptly furnish any insurance
herein required, Landlord may after giving Tenant written notice effect the same
for a period not exceeding one (1) year and Tenant shall promptly reimburse
Landlord upon demand, as additional rent, the premium so paid by Landlord. If,
upon Tenant's failure, rather than purchase separate insurance coverage,
Landlord chooses to include Tenant's coverage under Landlord's insurance
policies, then Tenant shall promptly reimburse Landlord upon demand, as
additional rent, the greater of the increase in Landlord's premium resulting
therefrom or One Thousand Dollars ($1,000.00). All such public liability,
property damage and other casualty policies shall be written as primary policies
which do not contribute to and are not in excess of coverage which Landlord may
carry. All such public liability and property damage policies shall contain a
provision that Landlord shall damage policies shall contain a provision that
Landlord shall nevertheless be entitled to recover under said policies for any
loss occasioned to it, its servants, agents and employees by
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reason of the negligence of Tenant or any other named assured. Any insurance
provided for may be affected by a policy or policies of blanket insurance,
covering additional items or locations; provided, however, that (i) Landlord
shall be named as an additional assured thereunder as its interests may appear;
(ii) the coverage afforded Landlord will not be reduced or diminished by reason
of the use of such blanket policy of insurance; (iii) any such policy or
policies (except any covering the risks referred to in paragraph [i]), shall
specify therein (or Tenant shall furnish Landlord with a written statement from
the insurers under such policy specifying) the amount of the total insurance
allocated to the "Tenant Improvements and Property" more specifically detailed
in paragraph (iii), above; and (iv) the requirements set forth herein are
otherwise satisfied. Any insurance policies herein required to be procured by
Tenant shall contain an express waiver of any right of subrogation by the
insurance company against the Landlord.
(c) Tenant shall, and does hereby, indemnify and hold harmless Landlord
and any other parties in interest set forth in paragraph (b), above, from and
against any and all liabilities, fines, claims, damages and actions, costs and
expenses of any kind or nature (including attorneys' fees) and of anyone
whatsoever (i) relating to or arising from Tenant's use and occupancy of the
Premises, to the extent that Tenant's negligent acts or omissions are a
proximate cause of any such liabilities, fines, claims, damages, actions, costs
and expenses of any kind or nature (including attorneys fees), (ii) due to or
arising out of any mechanic's lien filed against the building, or any part
thereof, for labor performed or for materials furnished or claimed to be
furnished to Tenant, or (iii) due to or arising out of any breach, violation or
nonperformance of any covenant, condition or agreement in this Lease set forth
and contained on the part of Tenant to be fulfilled, kept, observed or
performed, unless such damage or injury shall be occasioned by the
negligence or willful act or omission of the Landlord, and its agents in which
event, Landlord shall indemnify and hold harmless Tenant to the extent of such
negligence or willful act or omission. Notwithstanding the foregoing, Tenant
shall at all times remain liable for, and indemnify and hold harmless Landlord
as aforesaid against, any damage or injury arising from perils against which
Tenant is required by this Lease to insure regardless of the negligence or
willful act or omissions of others, to the extent that Tenant's negligent acts
or omissions are a proximate cause of any such damage or injury and only to
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the extent of payments received pursuant to such insurance coverage.
9. Alterations.
Tenant shall not make alterations (other than non-structural interior
alterations or alterations whose cost is less than $5,000.00 in each instance)
to the Premises, or any part thereof, without prior written consent of Landlord
in each instance first had and obtained. If Tenant shall desire to make such
alterations, plans for the same shall first be submitted to and approved by
Landlord, and all work and installations shall be performed by Tenant at its own
expense in accordance with approved plans. Tenant agrees that all such work
shall be done in a good and workmanlike manner, that the structural integrity of
the building shall not be impaired, and that no liens shall attach to the
Premises by reason thereof. Tenant agrees to obtain, at Tenant's expense, all
permits required for such alterations.
10. Ownership of Alterations.
Unless Landlord shall elect that all or part of any alteration made by Tenant to
the Premises (including any alteration consented to by Landlord pursuant to
paragraph 9 hereof) shall remain on the Premises after the termination of this
Lease, the Premises shall be restored to their original condition by Tenant
before the expiration of this Lease at Tenant's sole expense, excepting normal
wear and tear. Upon such election by Landlord, any such alterations,
improvement, betterments or mechanical equipment, including but not limited to,
heating and air conditioning systems, shall become the property of Landlord as
soon as they are affixed to the Premises, and all right, title and interest
thereof of Tenant shall immediately cease, unless otherwise agreed to in writing
by Landlord. Tenant shall promptly pay any franchise, minor privilege or other
tax or assessment resulting directly or indirectly from any alterations or
improvements made by Tenant to the Premises. Tenant shall repair promptly, at
its own expense, any damage to the Premises caused by bringing into the Premises
any property for Tenant's use, or by the installation or removal of such
property, regardless of fault or by whom such damage shall be caused.
11. Repairs and Maintenance.
(a) Except for the improvements provided by Landlord as set forth on
the attached Exhibit "A", the Premises hereby leased are leased to Tenant "as
is." Except as herein expressly provided, Landlord shall be under no liability,
nor have any
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obligation to do any work or make any repairs in or to the Premises and any work
which may be necessary to outfit the Premises for Tenant's occupancy or for the
operation of Tenant's business therein is the sole responsibility of Tenant and
shall be performed by Tenant at its own cost and expense. Tenant acknowledges
that it has fully inspected the Premises prior to the execution of this Lease,
and Tenant further acknowledges that Landlord has made no warranties or
representations (other than the warranties and representations made by Landlord
as set forth in Section 11(d)) with respect to the condition or state of repairs
of the Premises.
(b) Tenant will, during the term of this Lease, keep the Premises and
appurtenances (including windows, doors, plumbing heating and electrical
facilities and installations) in good order and repair and will make all
necessary repairs thereof at its own expense, except that Landlord will make all
necessary repairs to the exterior masonry walls and roof of the Premises, after
being notified in writing by Tenant of the need for such repairs, and shall have
a reasonable time in which to complete such repairs. Tenant agrees to carry a
maintenance and/or service agreement or policy on the HVAC system in the demised
Premises. This agreement or policy shall be carried throughout the term of this
Lease and any renewals or extensions hereof. Tenant shall provide Landlord with
a copy of such policy or a certificate evidencing such coverage. In the event
that the repairs required to be made by Landlord are necessitated as a result of
negligence or misuse by Tenant, its agents, servants, employees, licensees or
guests, or by any contractor engaged by or on behalf of Tenant, such repairs
shall be made by and be paid for by Tenant. Tenant will, at the expiration of
the term or at the sooner termination thereof by forfeiture or otherwise,
deliver up the Premises in the same good order and condition as they were at the
beginning of tenancy, reasonable wear and tear excepted. Tenant further agrees
that it will maintain the Premises at its own expense in a clean, orderly and
sanitary condition, free of insects, rodents, vermin, and other pests; and that
it will not permit undue accumulation of garbage, trash, rubbish or other
refuse, but will remove the same at its own expense and will keep such refuse in
proper containers within the interior of the Premises until called for to be
removed. Except as provided for in paragraph 9 herein, Tenant further agrees
that it will not install any additional electrical wiring or plumbing unless it
has first obtained Landlord's written consent thereto, and, if such consent is
given, Tenant will install the same at its own cost and expense, and Tenant
shall
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obtain, at Tenant's expense, all permits required for such installation.
(c) In the event Tenant shall not proceed promptly and diligently to
make any repairs or perform any obligation imposed upon it by subparagraphs (a)
and (b) hereof within thirty (30) days after receiving written notice from
Landlord to make such repairs or perform such obligation, then and in such
event, Landlord may, at its option, enter the Premises and do and perform the
things specified in said notice, and Tenant agrees to pay promptly upon demand
any cost or expense incurred by Landlord in taking such action.
(d) Notwithstanding the provisions of paragraph 11, Landlord represents
that at the commencement of the lease the Site to include any paved areas, the
Building and all operating systems to include the roof, electrical, mechanical,
plumbing and sprinkler systems, are in a good state of repair and condition and
are in compliance with all applicable building codes, rules and regulations.
Landlord represents that the condition of the aforementioned systems will comply
with the specifications set forth on Exhibit "A".
12. Operating Costs.
(a) "Operating Costs" are the costs of operating, maintaining,
repairing, redecorating, refurbishing and insuring the building in which the
Premises is situate: together with all common areas and facilities within the
property herein described (collectively "the Building and Common Areas")
including, but not limited to, stairwells, loading areas, parking areas,
pavements and walkways, landscaping, gardening, storm drainage, and other
utility systems; the cost of utilities for the Building and Common Areas and
facilities; fire protection and security services, if any; traffic control
equipment; repairs; parking lot striping; lighting; sanitary control; removal of
snow, trash, rubbish, garbage and other refuse; depreciation on or rentals of
machinery and equipment used exclusively in such maintenance; the pro-rata cost
of personnel to implement such services; all insurance of whatsoever nature
kept, or caused to be kept, by Landlord out of or in connection with the
ownership of the Building and Common areas, including, but not limited to,
insurance insuring the same against loss or damage by, or abatement of rental
income resulting from, fire and other such hazards, casualties, and
contingencies, and liability and indemnity insurance. Such costs shall not
include;
(i) Landlord's management and office overhead costs:
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(ii) the cost of any capital improvements to the Building as
determined under generally accepted accounting principles or
(iii) work which Landlord performs specifically for or at the expense
of any tenant of the Building. "Operating Costs" shall also include all taxes
(as hereinafter defined) assessed against the Building and Common Areas, whether
as a result of an increase in the tax rate, or the levy, assessment or
imposition of any tax on real estate as such not now levied, assessed or
imposed. The foregoing shall apply to increases in real estate taxes assessed
against the Building and Common Areas generally, and not resulting from
improvements placed thereon by Tenant. In the event of any increases in real
estate taxes resulting from improvements, alterations or additions made by
Tenant, Tenant shall pay the entire amount of said increase. "Taxes" as used
herein shall also include, but not by way of limitation, all paving taxes,
special paving taxes, Metropolitan District Charges, and any and all other
benefits or assessments which may be levied on the Building and Common Areas,
but shall not include any income tax on the income or rent payable hereunder.
"Taxes" shall also include all reasonable expenses incurred by Landlord
(including attorneys' fees and costs) in contesting any increase in, or applying
for any reduction of, a tax assessment only to the extent of any reduction.
(b) Tenant shall pay Landlord, as additional rent, an amount equal to
Tenant's "Proportionate Share" (as hereinafter defined) of all Operating Costs
during the Lease term, and any renewal term thereof. As used herein, Tenant's
"Proportionate Share" shall be seventy-four and fifteen hundredths percent
(74.15%), which is the same percentage which the leasable area of the Premises
bears to the total leasable area of the Building.
(c) Landlord shall notify Tenant from time to time of the amount
which Landlord estimates will be the amount payable by Tenant in accordance with
paragraph (b), above, and Tenant shall pay such amounts to Landlord in equal
monthly installments, in advance, on the first day of each month, simultaneously
with payments of the base rent reserved hereunder. Within a reasonable period of
time following the end of each annual period of the term, Landlord shall submit
to Tenant a statement showing the actual amounts incurred by Landlord as set
forth in paragraph (b), the amount theretofore paid by Tenant, and the amount of
the resulting balance due thereon, or overpayment thereof, as the case may be.
In the event any balance may be due by Tenant, Tenant shall pay said balance
within thirty (30) days from the date of such statement. In the event Tenant has
made any overpayment,
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such overpayment shall be credited by Landlord against the next installment or
installments of rent which are due and payable hereunder, or if the term of this
Lease has expired, such overpayment shall be refunded by Landlord to Tenant,
without interest, within thirty (30) days after the date of such statement. Each
such statement submitted by Landlord shall be final and conclusive between the
parties hereto as to the matters therein set forth, if no objection is raised
with respect thereto within thirty (30) days after submission of each such
statement.
13. Default.
(a) Any of the following events shall constitute a default by Tenant:
(i) If the rent (basic or additional) shall be in arrears for a
period of ten (10) days following receipt of written notice from Landlord,
in whole or in part; or
(ii) If Tenant shall have failed to perform any other term,
condition, or covenant of this Lease on its part to be performed for a
period of thirty (30) days after notice of such failure from Landlord and
Tenant is not diligently pursuing the cure of such default; or
(iii) If the Premises are vacant, unoccupied or deserted for a
period of thirty (30) days or more at any time during the term; or
(iv) If Tenant is adjudicated a bankrupt or insolvent by any
court of competent jurisdiction, or if any such court enters an order,
judgment or decree finally approving any petition against Tenant seeking
reorganization, liquidation, dissolution or similar relief or if a
receiver, trustee, liquidator or conservator is appointed for all or
substantially all of Tenant's assets and such appointment is not vacated
within ten (10) days after the appointment, or if Tenant seeks or consents
to any of the relief hereinabove enumerated in this subparagraph (iv) or
files a voluntary petition in bankruptcy or insolvency or makes an
assignment of all or substantially all of its assets for the benefit of
creditors or admits in writing of its inability to pay its debts generally
as they come due or files Articles of Dissolution, or similar writing
indicating its intention to wind up or liquidate its business, with the
appropriate authority of the place of its incorporation; or
(v) If Tenant's leasehold interest under this Lease is sold
under execution, attachment or decree of court to satisfy any debt of
Tenant, or if any lien (including a
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mechanic's lien) is filed against Tenant's leasehold interest and is not
discharged within ten (10) days thereafter.
(b) In the event of default as defined in paragraph (a) hereof,
Landlord, in addition to any and all legal and equitable remedies it may have,
shall have the following remedies;
(i) To distrain for any rent or additional rent in default; and
(ii) At any time after default, without notice, to declare this
Lease terminated and enter the Premises with or without legal process; and
in such event Landlord shall have the benefit of all provisions of law now
or hereafter in force respecting the speedy recovery of possession from
Tenant's holding over or proceedings in forcible entry and detainer, and
Tenant waives any and all provisions for notice under such laws.
Notwithstanding such reentry and/or termination, Tenant shall
immediately be liable to Landlord for the sum of the following: (a) all rent and
additional rent then in arrears, without apportionment to the termination date,
including Tenant's contribution to taxes under paragraph 12 for the year of
termination, whether such termination is before or after July 1st of such year;
(b) all other liabilities of Tenant and damages sustained by Landlord as a
result of Tenant's default, including, but not limited to, the reasonable costs
of reletting the Premises and any broker's commissions payable as a result
thereof; (c) all of Landlord's costs and expenses (including reasonable counsel
fees) in connection with such default and recovery of possession; (d) the
difference between the rent reserved under this Lease for the balance of the
term and the fair rental value of the Premises for the balance of the term to be
determined as of the date of reentry; or at Landlord's option in lieu thereof,
Tenant shall pay the amount of the rent and additional rent reserved under this
Lease at the times herein stipulated for payment of rent and additional rent for
the balance of the term, less any amount received by Landlord during such period
from others to whom the Premises may be rented on such terms and conditions and
at such rentals as Landlord, in its sole discretion, shall deem proper; and (e)
any other damages recoverable by law. In the event Landlord brings any action
against Tenant to enforce compliance by Tenant with any covenant or condition of
this Lease, including the covenant to pay rent, and it is judicially determined
that Tenant has defaulted in performing or complying with any such covenant or
condition, then and in such event, Tenant shall pay to Landlord all costs and
expenses incurred by Landlord in bringing and
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prosecuting such action against Tenant, including a reasonable attorney's fee.
(c) In the event Tenant fails to pay Landlord any rental payment or
other charge due hereunder on the date due, Tenant shall pay a late charge equal
to five percent (5%) of the rental payment or other such charge, which late
charge shall be collectible as additional rent. In addition, any such rental
payment or other charge which is delinquent, shall bear interest from the date
on which same was due at the prime rate of interest then being charged by
NationsBank to its most favored commercial customers.
14. Damage or Destruction.
(a) If, during the Lease term, the Premises hereby leased are damaged
by fire or other casualty, but not to the extent that Tenant is materially
prevented from carrying on business in the Premises, Landlord shall promptly
cause such damage to be repaired, if such damage renders a substantial portion
of the Premises untenantable, the rent reserved hereunder (except Tenant's share
of any charges for water) shall be abated, and such abatement shall be from the
date of the casualty to the date when the leased Premises are rendered fully
tenantable. Notwithstanding the foregoing, in the event such fire or other
casualty damages or destroys any of Tenant's leasehold improvements,
alterations, betterments, fixtures or equipment, Landlord shall have no
liability for the restoration or repair thereof.
(b) If, during the Lease term, the Premises or a substantial portion
of the building in which the Premises is situated are rendered as untenantable
to the extent that Tenant's ability to conduct its business is materially
impaired as the result of fire, the elements, unavoidable accident or other
casualty, Landlord shall have the option either to restore the Premises to their
condition immediately prior to the casualty or to terminate this Lease, such
option shall be exercised by Landlord by written notice to Tenant within thirty
(30) days after the fire, accident or casualty. In the event of such
termination, the rent reserved hereunder shall be adjusted as of the date of the
fire, accident or casualty. If Landlord elects to restore the Premises, such
restoration shall be completed within one hundred twenty (120) days of such
casualty and the rent reserved hereunder shall abate until the Premises are
again rendered tenantable.
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15. Possession.
In case possession of the Premises, in whole or in part, cannot be given to
Tenant on or before the commencement of the term of this Lease, Landlord agrees
to abate the rent proportionately until possession is given to Tenant, and
Tenant agrees to accept such pro rata abatement as liquidated damages for the
failure to obtain possession on the commencement date herein specified. The
parties hereto covenant and agree that if the term of this Lease commences on a
date other than the date herein specified, they will, upon the request of either
of them, execute an agreement in recordable form setting forth the new
commencement and termination dates of the Lease term. Under no circumstances
shall Landlord be under any liability for failure to deliver possession of the
Premises to Tenant on the date herein specified. Tenant shall have the right to
place its manufactured product (Inventory) in the Premises prior to the lease
commencement date without the provision to pay rent. Tenant agrees not to
interfere with Landlord, its agents or contractors who may be performing
improvements within the Premises or the Building. Landlord shall not be
responsible for any damage or theft of Tenant's inventory during the early
occupancy period.
16. Exterior of Premises - Signs.
(a) Tenant covenants and agrees that it will not place or permit any
sign, billboard, marquee, lights, awning, poles, placard, advertising matter, or
other thing of any kind, in or about the exterior of the Premises or the
building in which the Premises are situate, nor paint or make any change in, to
or on the exterior of said Premises to change the uniform architecture, paint or
appearance of the building, without in each such instance obtaining the prior
written consent of Landlord. In the event such consent is given, Tenant agrees
to pay any minor privilege or other tax arising as a result of any such
installation immediately when due. Tenant shall obtain, at Tenant's expense, all
permits required for such installation. Tenant further agrees to maintain any
sign, billboard, marquee, awning, decoration, placard, or advertising matter or
other thing of any kind as may be approved by Landlord in good condition and
repair at all times.
(b) Tenant further covenants and agrees not to pile or place anything
on the sidewalk, parking lot or other exterior portion of the Premises or
building or in the front, rear or sides of the building, nor block the sidewalk,
parking lot or other exterior portion of the Premises or building, nor do
anything that directly or indirectly will interfere with any of the rights of
ingress or egress or of light from any other tenant, nor do anything which will,
in any way, change the uniform and general
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design of any property of Landlord in which the Premises are situate. In the
event this Lease covers all or substantially all of an entire building, Tenant
agrees to keep sidewalks, steps and porches free and clear of ice, snow and
debris.
17. Relocation
Intentionally deleted.
18. For Rent/Sale Signs
Landlord shall have the right to place a "For Rent" sign on any portion of said
Premises for six (6) months prior to termination of this Lease and to place a
"For Sale" sign thereon at any time. During such six-month period, Landlord may
after reasonable notice to Tenant show the Premises and all parts thereof to
prospective tenants during Tenant's normal business hours.
19. Water and Other Damage
Landlord shall not be liable for, and Landlord is hereby released and relieved
from, all claims and demands of any kind by reason of or resulting from damage
or injury to person or property of Tenant or any other party, directly or
indirectly caused by (a) dampness, water, rain or snow, in any part of the
Premises and/or (b) falling plaster, steam, gas, electricity, or any leak or
break in any part of the Premises or from any pipes, appliances or plumbing or
from sewers or the street or subsurface or from any other place in the Premises
or of others or in the pipes of the plumbing or heating facilities thereof, no
matter how caused.
20. Right of Entry.
Landlord and its agents, servants, employees, including any builder or
contractor employed by Landlord, shall have the absolute and unconditional
right, license and permission, at any and all reasonable times, to enter with
prior notice and inspect the Premises or any part thereof, and at the option of
Landlord, to make such reasonable repairs and/or changes in the Premises as
Landlord may deem necessary or proper and/or to enforce and carry out any
provision of this Lease.
21. Termination of Term
(a) It is agreed that the term of this Lease shall expire and
terminate at the end of the original term hereof (or at the expiration of the
last renewal term, if this Lease contains a renewal option and the same is
properly exercised), without the necessity of any notice by or to any of the
parties hereto, unless otherwise provided herein. If Tenant shall occupy the
Premises
<PAGE>
after such expiration or termination, it is understood that Tenant shall hold
the Premises as a tenant from month-to-month, subject to all the other terms and
conditions of this Lease, at an amount equal to 110% the highest monthly rental
installment reserved in this Lease. Landlord shall, upon such expiration or
termination of this Lease, be entitled to the benefit of all public general or
local laws relating to the speedy recovery of possession of lands and tenements
held over by Tenants that may be now in force or may hereafter be enacted.
(b) At the time Tenant surrenders the Premises to Landlord, the
Premises shall be in compliance with all applicable building code requirements
insofar as such requirements relate to Tenant's use and occupancy of the
Premises or to any installations, alterations or improvements made by Tenant
thereto.
22. Condemnation.
(a) If, during the term of this Lease, all or a substantial part of
the Premises shall be taken by or under power of eminent domain, this Lease
shall terminate as of, and the rent (basic and additional) shall be apportioned
to and abate from and after, the date of taking. Except as to Tenant's
improvements, Tenant shall have no right to participate in any award or damages
for such taking and hereby assigns all of its right, title and interest therein
to Landlord. For the purposes of this paragraph, "a substantial part of the
Premises" shall mean such part that the remainder thereof is rendered inadequate
for Tenant's business and that such remainder cannot practicably be repaired and
improved so as to be rendered adequate to permit Tenant to carry on its business
with substantially the same efficiency as before the taking.
(b) If, during the Lease term, less than a substantial part of the
Premises (as hereinabove defined) is taken by or under power of eminent domain,
this Lease shall remain in full force and effect according to its terms; and
Tenant shall not have the right to participate in any award or damages for such
taking and Tenant hereby assigns all of its right, title and interest in and to
the award to Landlord. In such event Landlord shall, at its expense, promptly
make such repairs and improvements as shall be necessary to make the remainder
of the Premises adequate to permit Tenant to carry on its business to
substantially the same extent and with substantially the same efficiency as
before the taking; provided that in no event shall Landlord be required to
expend an amount in excess of the award received by Landlord for such taking.
If, as a result of such taking, any part of the Premises is rendered permanently
unusable, the basic annual rent reserved hereunder
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shall be reduced in such amount as may be fair and reasonable, which amount
shall not exceed the proportion which the area so taken or made unusable bears
to the total area which was usable by Tenant prior to the taking. If the taking
does not render any part of the Premises unusable, there shall be no abatement
of rent.
(c) For purposes of this section, "taking" shall include a negotiated
sale or lease and transfer of possession to a condemning authority under bona
fide threat of condemnation for public use, and Landlord alone shall have the
right to negotiate with the condemning authority and conduct and settle all
litigation connected with the condemnation. As hereinabove used, the words
"award or damages" shall, in the event of such sale or settlement, include the
purchase or settlement price.
(d) Nothing herein shall be deemed to prevent Tenant from claiming
and receiving from the condemning authority, if legally payable, compensation
for the taking of Tenant's own tangible property and such amount as may be
payable by statute or ordinance toward Tenant's damages for Tenant's loss of
business, removal and relocation expenses.
(e) Notwithstanding the provisions of paragraph 22 herein, Tenant
shall have the right to file for a separate award from any condemning authority.
23. Subordination.
Tenant covenants and agrees that all of Tenant's rights hereunder are and shall
be subject and subordinate to the lien of any first mortgage hereafter placed on
the leased Premises or any part thereof, except the Tenant's property or trade
fixtures, and to any and all renewals, modifications, consolidations,
replacements, extensions or substitutions of any first mortgage. Such
subordination shall be automatic, without the execution of any further
subordination agreement by Tenant. If, however, a written subordination
agreement, consistent with the provision, is required by a mortgagee, Tenant
agrees to execute, acknowledge and deliver the same and in the event of failure
so to do, Landlord may, execute, acknowledge and deliver the same as the agent
or attorney in fact of Tenant, and Tenant hereby irrevocably constitutes
Landlord its attorney-in-fact for such purpose.
24. Landlord's Right to Perform Tenant's Covenants.
If Tenant shall fail to perform any covenant or duty required of it by this
Lease or by law, Landlord, after giving thirty (30) days prior written notice to
Tenant and Tenant shall fail to cure or diligently pursue the cure of such
default, shall have the
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right (but not the obligation) to perform the same, and if necessary to enter
the Premises for such purposes without notice.
The reasonable cost thereof to Landlord shall be deemed to be additional rent
hereunder payable by Tenant, and Landlord shall have the same rights and
remedies with respect to such additional rent as Landlord has with respect to
the rental reserved hereunder.
25. Attornment.
(a) If Landlord assigns this Lease or the rents hereunder to a
creditor as security for a debt, Tenant shall, after notice of such assignment
and upon demand by Landlord or the assignee, pay all sums thereafter becoming
due Landlord hereunder either to Landlord or such assignee. Tenant shall also,
upon receipt of such notice, have all policies of insurance required hereunder
endorsed so as to protect the assignee's interest as it may appear and shall
deliver such policies, or certificates thereof, to the assignee.
(b) If, at any time during the term of this Lease, the Landlord of
the leased Premises shall be the holder of a leasehold estate covering Premises
which include the leased Premises, and if such leasehold shall terminate or be
terminated for any reason, or if, at any time during the term of Lease a
mortgage to which this Lease is subordinate shall be foreclosed, Tenant agrees
at the election and upon demand of any owner of the Premises which include the
leased Premises, or of any mortgagee in possession thereof, or of any holder of
a leasehold thereafter affecting Premises which include the leased Premises, or
of any purchaser at foreclosure, to attorn, from time to time, to any such
owner, mortgagee, holder or purchaser upon the terms and conditions set forth
herein for the remainder of the term demised in this Lease.
Provided however, that Tenant shall not be obligated to attorn unless, if
Tenant shall so request in writing, such holder, owner, mortgage or purchaser
shall execute and deliver to Tenant an instrument wherein said holder, owner,
mortgagee or purchaser agrees that so long as Tenant performs all the terms,
covenants and conditions of this Lease, on Tenant's part to be performed,
Tenant's possession under the provisions of this Lease shall not be disturbed by
such holder, owner, mortgagee or purchaser.
(c) The foregoing provisions shall inure to the benefit of any such
owner, mortgagee, holder or purchaser and shall apply notwithstanding that this
Lease may terminate upon the termination of any such leasehold estate or upon
such foreclosure, and shall be self-operative upon any such demand, without
requiring any further instrument to give effect to such
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provisions. Tenant, however upon demand of any such owner, mortgagee, holder or
purchaser, agrees to execute, from time to time an instrument in confirmation of
the foregoing provisions, satisfactory to any such owner, mortgagee, holder or
purchaser, in which Tenant shall acknowledge such attornment and set forth
herein and shall apply for the remainder of the term originally demised in this
Lease.
26. Non-Waiver of Future Enforcement.
The receipt of rent by Landlord, with knowledge of any breach of this Lease by
Tenant or of any default on the part of Tenant in the observance or performance
of any of the conditions or covenants of this Lease, shall not be deemed to be a
waiver of any provisions of this Lease, other than the provisions relating to
the non-payment of such rental payment. No failure on the part of Landlord or of
the Tenant to enforce any covenant or provision herein contained nor any waiver
of any right hereunder by Landlord or Tenant, shall discharge or invalidate such
covenant or provision or affect the right of Landlord or Tenant to enforce the
same in the event of any subsequent default. The receipt by Landlord of any rent
or any sum of money or any other consideration hereunder paid by Tenant after
the termination, in any manner, of the term herein demised, or after the giving
by Landlord of any notice hereunder to effect such termination, shall not
reinstate, continue or extend the term herein demised, or destroy, or in any
manner impair the efficacy of any such notice of termination as may have been
given hereunder by Landlord to Tenant prior to the receipt of any such sum of
money or other consideration, unless so agreed to in writing and signed by
Landlord. Neither acceptance of the keys nor any other act or thing done by
Landlord or any agent or employee during the term herein demised shall be deemed
to be an acceptance of a surrender of said Premises, excepting only an agreement
in writing signed by landlord accepting or agreeing to accept such surrender.
27. Personal Property Taxes.
Tenant shall be responsible for and shall pay any taxes or assessments levied or
assessed during the term of this Lease against any leasehold interest of Tenant
or personal property or trade fixtures of Tenant of any kind, owned by Tenant or
placed in, upon or about the Premises by Tenant.
28. Recordation of Lease.
Tenant agrees that it will, upon Landlord's request, execute a Memorandum of the
Lease in a form suitable for recording under
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applicable Maryland law. The party recording such Memorandum of Lease shall pay
all costs of recordation, including transfer taxes and documentary stamp taxes
hereon.
29. Notices.
Any notice required by this Lease shall be sent by certified mail or by a
recognized overnight delivery service such as Federal Express with a receipt by
addressee to Landlord at: 2066 Lord Baltimore Drive, Baltimore, Maryland 21244.
Any notice required by this Lease shall be sent by certified mail, return
receipt requested to Tenant at:
Dal-Tile Corporation AND A COPY TO: Dal-Tile Corporation
7834 Hawn Freeway 1470 Progress Way
P.O. Box 17130 Eldersburg, MD 21784
Dallas, Texas 75217 ATTN: DISTRICT MGR.
ATTN: REAL ESTATE DEBT.
if no other address specified, such notices to Tenant shall be addressed to the
leased Premises). Either party may, at any time, or from time to time, designate
in writing a substitute address for that above set forth, and thereafter all
notices to such party shall be sent by certified mail to such substitute
address.
31. Severability.
(a) It is agreed that, for the purpose of any suit brought or based
on this Lease, this Lease shall be construed to be a divisible contract, to the
end that successive actions may be maintained thereon as successive periodic
sums shall mature or be due hereunder, and it is further agreed that failure to
include in any suit or action any sum or sums then matured or due shall not be a
bar to the maintenance of any suit or action for the recovery of said sum or
sums so omitted; and Tenant agrees that it will not, in any suit or suits
brought or arising under this Lease for a matured sum for which judgment has not
previously been obtained or entered, plead, rely on or interpose the defenses of
res adjudicata, former recovery, extinguishment, merger, election of remedies
--- ----------
or other similar defense as a default to said suit or suits.
(b) If any terms, clause or provision of this Lease is declared
invalid by a court of competent jurisdiction, the validity of the remainder of
this Lease shall not be affected thereby but shall remain in full force and
effect.
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32. Non-Waiver
It is understood and agreed that nothing herein shall be construed to be a
waiver of any of the terms, covenants or conditions herein contained, unless the
same shall be in writing, signed by the party to be charged with such waiver and
no waiver of the breach of any covenant herein shall be construed as a waiver of
such covenant or any subsequent breach thereof. No mention in this Lease of any
specific right or remedy shall preclude Landlord from exercising any other right
or from having any other remedy or from maintaining any action to which it may
be otherwise entitled either at law or in equity.
33. Successors and Assign.
Except as herein provided, this Lease and the covenants and conditions herein
contained shall inure to the benefit of and be binding upon Tenant, its
successors and assigns, and shall inure to the benefit of Tenant and only such
assignees of Tenant to whom an assignment by Tenant has been consented to in
writing by Landlord. In the event more than one person, firm or corporation is
named herein as Tenant, the liability of all parties named herein as Tenant
shall be joint and several.
In the event Landlord's interest under this Lease is transferred or
assigned and written notice thereof is given to Tenant, the Landlord herein
named (or any subsequent assignee or transferee of Landlord's interest under
this Lease who gives such notice to Tenant) shall automatically be relieved and
released from and after the date of such transfer or conveyance from all
liability hereunder. The provision contained in the foregoing sentence is not
intended to, and shall not, limit any right that Tenant might otherwise have to
obtain injunctive relief against Landlord or Landlord's successors in interest
or any other action not involving the personal liability of Landlord to respond
in monetary damages from assets other than Landlord's interest in the building
or any suit or action in connection with enforcement or collection of amounts
which may become owing or payable under or on account of insurance maintained by
Landlord.
34. Notices to Mortgagee.
Tenant agrees that a copy of any notice of default from Tenant to Landlord shall
also be sent to the holder of any mortgage or deed of trust on the Premises;
provided Tenant has been given written notice of the fact that such mortgage or
deed of trust has been made; and Tenant shall allow said mortgagee or holder of
the deed of trust a reasonable time, not to exceed thirty (30) days from
22
<PAGE>
the receipt of said notice, to cure, or cause to be cured, any such default. If
such default cannot reasonably be cured within the time specified herein, then
such additional time as may be necessary shall be allowed, provided the curing
of such default is commenced and diligently pursued within such time period
(including, but not limited to, commencement of foreclosure proceedings if
necessary to effect such cure) in which event this Lease shall not be terminated
while such remedies are being thus diligently pursued.
35. Estoppel Certificate.
Tenant shall, at any time and from time to time during the term of this Lease or
any renewal thereof, upon request of Landlord, execute, acknowledge, and deliver
to Landlord or its designee, a statement in writing, certifying that this Lease
is unmodified and in full force and effect if such is the fact (or if there have
been any modifications thereof, that the same is in full force as modified and
stating the modifications), the dates to which the rents and other charges have
been paid in advance, if any, and any defaults or claimed defaults by Landlord.
Any such statement delivered pursuant to this paragraph may be relied upon by
any prospective purchaser of the estate of Landlord or by the mortgagee or any
assignee of any mortgagee or the trustee or beneficiary of any deed of trust
constituting a lien on the Premises or upon property in which the Premises are
situate.
36. Environmental Provisions.
(a) Tenant and its successors and assigns shall use and operate the
building, the property and the leased premises, respectively, at all times
during the term hereof, under and in compliance with the laws of the State of
Maryland and in compliance with all applicable Environmental Legal Requirements.
"Environmental Legal Requirements" shall mean any applicable law relating to
public health, safety or the environment, including, without limitation,
relating to releases, discharges or omissions to air, water, land or
groundwater, to the withdrawal or use of groundwater, to the use and handling of
polychlorinated biphenyls (PCB's") or asbestos, or asbestos containing products,
to the disposal, treatment, storage or management of solid or other hazardous or
harmful wastes or to exposure to toxic, hazardous or other harmful materials
(collectively "Hazardous Substances") to the handling, transportation, discharge
or release of gaseous or liquid substance and any regulation or final order or
directive issues pursuant to such statute or ordinance, in each case applicable
to the premises, the building or its operation,
23
<PAGE>
construction or modification, including without limitation the following: the
Clean Air Act, the Federal Water Pollution Control Act ("FWPCA"), the Safe
Drinking Water Act, the Toxic Substances Control Act, the Comprehensive
Environmental Response Compensation and Liability Act, as amended by the Solid
and Hazardous Waste Amendments of 1984 ("RCRA"), the Occupational Safety and
Health Act, the Emergency Planning and Community Right-to-Know Act of 1986, the
Solid Waste Disposal Act, and any state statutes addressing similar matters, and
any state statute providing for financial responsibility for clean-up or other
actions with respect to the release or threatened release of any of the
abovereferenced substances.
(b) Tenant hereby indemnifies and saves Landlord harmless from all
liabilities and claims arising from the use, storage or placement of any
Hazardous Substances upon the premises or elsewhere within the Building or
property of Landlord (if brought or placed thereon by Tenant, its agents,
employees, contractors or invitees); and Tenant shall (i) within fifteen (15)
days after written notice thereof, take or cause to be taken, at its sole
expense, such actions as may be necessary to comply with all Environmental Legal
Requirements and (ii) within fifteen (15) days after written demand therefore,
reimburse Landlord for any amounts reasonably expended by Landlord (after first
consulting with Tenant) to comply with any Environmental Requirements with
respect to the premises or with respect to any other portions of Landlord's
Building or property as the result of the placement or storage of Hazardous
Substances by Tenant, its agents, employees, contractors or invitees, or in
connection with any judicial or administrative investigation or proceeding
relating thereto, including, without limitation, reasonable attorneys' fees,
fines or other penalty payments, to the extent that the acts or omissions of
Tenant are determined by a final, non-appealable order to have been a producing
cause of the violation of Environmental Legal Requirement.
(c) For purposes of this provision, Tenant shall be conclusively deemed to
have violated the Environmental Legal Requirements if (i) Landlord obtains and
delivers to Tenant a report prepared by an engineer or other party engaged in
the business of testing or determining the existence of Hazardous Substances,
which report states that there are Hazardous Substances used, stored or placed
upon the premises, in violation of the Environmental Legal Requirements that
requires remediation, to the extent that the acts or omission of the tenant are
a producing cause of the violation requiring remediation.
<PAGE>
In the event Tenant is deemed to have violated any of the Environmental
Legal Requirements requiring remediation as set forth in the preceding sentence,
Landlord shall have the right and option, after fifteen (15) days prior written
notice to Tenant, to terminate this lease by written notice thereof to Tenant,
in which event Landlord shall retain all rights and remedies, and Tenant shall
be subject to all liabilities, set forth in Article 13 of this lease
notwithstanding such termination.
(d) Tenant hereby grants Landlord, and Landlord's agents and
employees (including but not limited to, any engineers or other parties engaged
in the testing of Hazardous Substances) the right to enter upon the premises for
the purpose of determining whether Tenant, its agents, employees, contractors or
invitees, has violated any of the provisions of this Section.
Environmental representations and warranties of the Landlord regarding
the Premises are set forth in the attached Exhibit "C".
37. Captions.
The captions of the various sections of this Lease are for convenience only and
are not a part of this Lease. Such captions shall not be construed to define or
limit any of the provisions of this Lease.
38. Final and Entire Agreement.
This Lease contains the final and entire agreement between the parties hereto,
and neither they nor their agents shall be bound by any terms, conditions or
representations not herein written.
39. Tenant Representative.
Tenant shall provide Landlord with the name, address and telephone number of
Tenant's representative to be contacted in event of emergency:
40. Additional Rent.
All sums of money required to be paid by Tenant to Landlord pursuant to the
terms of this Lease, unless otherwise specified herein, shall be considered
additional rent and shall be collectible by Landlord as additional rent, in
accordance with the terms of this Lease. Nothing herein contained shall be
deemed to suspend or delay the payment of any amount of money or charge at the
time the same becomes due and payable hereunder or to limit any other remedy of
Landlord.
25
<PAGE>
41. Landlord's Work.
Landlord shall be responsible at its sole cost and expense for providing the
improvements to the Building and Premises as set forth in Exhibit "A" attached
hereto. The commencement date of the lease is conditioned upon Landlord's
substantial completion (excepting punch list items) of the improvement work set
forth on Exhibit "A". Landlord shall provide the finished offices (inclusive of
truckers' reception area with restroom) and shall provide openings in the
demising walls as reflected on the attached Exhibit "A". Landlord shall provide
warehouse lighting sufficient to maintain 30 foot-candles at four feet (4')
above the floor in accordance with a rack layout provided by Tenant.
42. Cancellation Option.
Tenant shall have the one-time right to terminate this contract after the
seventh (7th) year of occupancy by providing Landlord written notice of its
intention to terminate on or before February 28, 2003. Should Tenant terminate
this lease at the end of the seventh (7th) year, Tenant shall pay a cancellation
fee to Landlord at the time Tenant gives notice in the amount of Three Hundred
Fifty-one Thousand, Six Hundred Forty-five Dollars and Twelve Cents
($351,645.12). One-half of the cancellation fee shall be paid upon the date of
Tenant's notification, and the balance shall be due and payable at lease
termination.
43. Landlord's Guarantee.
Landlord shall provide and Guarantee Tenant a "Dedicated Loading Area" with a
paved truck court depth of 120', for Tenant's exclusive use. Landlord shall also
provide a "Common Loading Area" to be used by Tenant in common with others, and
Landlord shall not permit any improvements or obstructions to be constructed by
others in this area which may interfere with Tenant's truck access or
maneuvering. Both of the aforementioned "Dedicated and Common Loading Areas" are
described on the attached Exhibit "B".
44. Consent.
Any consent required of any party hereto shall not be unreasonably withheld
or delayed.
26
<PAGE>
45. Right of First Offer for Contiguous Space.
Landlord hereby grants Tenant the first right to lease any contiguous space as
same becomes available within the Building. In the event Landlord becomes aware
that such contiguous space is available, Landlord shall give Tenant written
notice thereof which notice shall set forth the prevailing market rent
(inclusive of tenant improvements) for comparable space in the Eldersburg
Business Center. In the event Tenant elects to exercise its right under this
Section, Tenant shall be required to give Landlord written notice thereof within
five (5) business days from the date of such notice from Landlord, and Tenant
shall be required to enter into a lease for such space within thirty (30) days
following the date of such notice. In the event Tenant fails to give Landlord
written notice of acceptance within such five (5) business day period or in the
event Tenant fails to execute a lease within thirty (30) days thereafter,
Tenant shall be deemed to have forfeited its rights with respect to such
contiguous space, for that specific event of notification from Landlord. It is
the intent of the parties, that Tenant's right to lease space as set forth
herein shall apply to each instance where space becomes available, and Landlord
will provide Tenant the Right of First Offer. The terms of this Section 45 shall
not alter or change the provisions set forth in Section 48 of this Lease.
46. Non-Disturbance.
Landlord agrees within fifteen (15) days of execution of this Lease by both
parties to submit a written request for a Non-Disturbance Agreement on behalf of
Tenant from Landlord's mortgagee, and to use its best efforts to obtain the
Agreement within ninety (90) days from the date of Landlord's initial written
request. In the event Landlord refinances the Building, Landlord agrees to
resubmit a Non-Disturbance Agreement request to the new mortgagee, and Tenant
agrees to review same and make any reasonable modifications.
27
<PAGE>
47. Tenant Fence.
Tenant shall have the right to install, at its sole cost and expense, chain link
fences both in the "Dedicated Loading Area" and the "Common Loading Area", with
an additional fence linking the two fenced areas together, no greater than 8
feet in height, and in the locations as shown on the attached Exhibit "B".
Tenant shall provide Landlord with six (6) months prior written notice of its
intent to install the fence(s). Tenant shall provide access to the "Common
Loading Area" for all other tenants in the Building.
48. Expansion
At any time during the lease term or any extension term (provided there is a
minimum of three (3) years remaining in the lease term) Tenant may notify
Landlord of its need to occupy the adjacent 41,400 square foot space ("Expansion
Space") and upon such notice Landlord agrees to relocate any Tenant occupying
such Expansion Space within one (1) year from the date of Tenant's notification
to Landlord. Tenant shall lease the Expansion Space at the then prevailing
market rent, inclusive of tenant improvements, for comparable space in the
Eldersburg Business Center.
49. Renewal Options.
If Tenant is not then in default under this Lease or any of the provisions
hereof, Tenant may extend the term of this Lease for one (1) additional
successive period of five (5) years, by notifying Landlord in writing of its
intention to do so at least six (6) months prior to the expiration of the then
current term. The renewal term shall be under the same lease terms and
conditions as are herein set forth except that the annual rental for the renewal
term shall be adjusted as follows:
Term: Annually: Monthly: Per S.F.:
-------- --------- -------- ---------
Year 11 $1,141,895.88 $95,157.99 $3.63
Year 12 $1,164,733.80 $97,001.15 $3.70
Year 13 $1,188,028.44 $99,002.37 $3.77
Year 14 $1,211,789.04 $100,982.42 $3.85
Year 15 $1,236,024.84 $103,002.07 $3.92
All said rental shall be payable in advance in equal monthly installments on the
1st day of each month during said renewal term, without setoff or deduction.
There shall be no additional right to renew or extend this Lease except as
provided herein.
28
<PAGE>
AS WITNESS the hands and seals of the parties hereto the date and year
first above written.
ELDERSBURG BUSINESS CENTER, INC.
BY: MERRITT MANAGEMENT CORPORATION, INC.
AGENT
[ILLEGIBLE] (SEAL)
---------------------------
President
LANDLORD
DAL-TILE CORPORATION
BY: [ILLEGIBLE]
-----------------------(SEAL)
TENANT
29
<PAGE>
DAL-TILE CORPORATION
ELDERSBURG BUSINESS CENTER
EXHIBIT "A"
FLOOR: 6" concrete reinforced with Fibre Mesh (trade name) with a compression
strength equal to or greater than 3,000 psi,
HVAC: Warehouse heat to be provided by gas-fired air rotation units sufficient
to maintain an indoor temperature of 65 degrees Fahrenheit at an outside
temperature of 8 degrees Fahrenheit.
ELECTRICAL: 277'480 volt three-phase, four wire service. One (1) duplex
receptacle provided for each pair of overhead loading doors.
CHARGING STATIONS: To be provided as shown on the attached floor plan.
VENTILATION: Cross ventilation to be provided in warehouse areas, as shown on
attached floor plan, sufficient to maintain comfortable, in Landlord's
reasonable judgment, working conditions.
DOCK LIGHTS & DOCK LOCKS: Tenant shall have the right to install dock lights and
dock locks at Tenant's expense. Landlord will upon written notice from
Tenant prior to the commencement date of this Lease, agree to furnish and
install dock locks on dock doors as specified by Tenant, provided that the
total costs including installation does not exceed One Hundred Thousand
Dollars ($100,000.00). Tenant agrees that the principal amount of
Landlord's actual costs for the dock locks shall be amortized at an
interest rate of ten percent (10%) for a term of seven (7) years, and that
the annual payment for amortization shall be added to the annual rent
payable by Tenant for the first seven (7) years of the lease term.
TRAILER STORAGE: Landlord shall provide a paved lot approximately 90' x 120' for
Tenant's exclusive use for trailer storage. Landlord shall retain the right
throughout the lease term, to relocate the lot within Eldersburg Business
Center.
LIGHTING: As set forth in paragraph 41 in the lease agreement.
WATER FOUNTAINS: Landlord will furnish and install water fountains in the
locations identified on the Exhibit A floor plan.
*Exhibit A shall also include the attached floor plan describing the office
space and other related improvements.
<PAGE>
"EXHIBIT C"
ADDITIONAL PROVISIONS TO THAT CERTAIN LEASE
-------------------------------------------
BY AND BETWEEN ELDERSBURG BUSINESS CENTER, AS LANDLORD, AND DAL-TILE
--------------------------------------------------------------------
CORPORATION, AS TENANT, DATED JANUARY 15, 1997
----------------------------------------------
1. REPRESENTATIONS AND WARRANTIES OF LANDLORD REGARDING THE PREMISES
-----------------------------------------------------------------
A. Not withstanding any other provisions in this Lease to the contrary,
Landlord hereby warrants, covenants and represents to Tenant that, to the best
of Landlord's knowledge after reasonable inquiry, with respect to the Premises:
(i) it is in complete compliance, without exception, with the
Environmental Requirements:
(ii) it has no present knowledge, directly or indirectly, of the
issuance or threat of issuance by a Governmental Agency of any notice of
violation of the Environmental Requirements by the Landlord or a Co-Tenant;
(iii) No Hazardous Material is now located on the Premises in such a
manner or condition that results or could reasonably be expected to result in
any Adverse Environmental Impact;
(v) No part of the Premises has ever been used for the disposal,
storage, treatment, processing, manufacturing or other handling of Hazardous
Material in such a manner as to result in any Adverse Environmental Impact, nor
has any part of the Premises been affected by any Hazardous Materials
Contamination;
(vi) Landlord has not obtained and is not required to obtain any
licenses, permits or authorizations pursuant to any Environmental Requirements
in order to construct, occupy, operate or use any building, improvement, fixture
or equipment constituing any part of the premises;
(vii) No property adjoining the Premises is or has ever been used for
the disposal, storage, treatment, processing, manufacturing or other handling of
Hazardous Material, nor has any other property adjoining the Premises been
affected by Hazardous Material Contamination;
(viii) No investigaion, administrative order, consent order and
agreement, litigation or settlement with respect to Hazadous Material or
Hazardous Material Contamination is proposed, threatened, anticipated or in
existence; and
(ix) The Premises has never been included on any federal or state
"Superfund" or "Superlien" list.
2. INDEMNITY BY LANDLORD
---------------------
A. Notwithstanding any other provisions in this Lease to the contrary:
(i) Landlord, its successors and assigns agree to
indemnify, defend, reimburse and hold harmless:
(a) The Tenant Group; and
(b) The directors, officers, shareholders, employees,
partners, contractors, subcontractors, experts, licensees, affiliates, lessees,
mortgagees, trustees, heirs, devises, successors, assigns and invitees of such
persons from and against any and all Environmental Damages, for which the
activities or omissions of the Landlord were a proximate cause or which exist as
a result of the breach of any warranty or covenant or the material inaccuracy of
any representation of Landlord contained in this Lease, or by Landlord's
remediation of the Premises or failure to meet its remediation obligations
contained in this Lease.
(ii) The obligations contained in this Section 2 shall
include, but not be limited to, the reasonable and necessary burden and expense
of defending all claims, suits and administrative proceedings, even if such
claims, suits or proceedings are groundless, false or fraudulent, and conducting
all negotiations of any description, and paying and discharging, when and as the
same become due, any and all judgments, penalties or other sums due against such
indemnified persons. Landlord, at its sole expense, may employ additional
counsel of its choice to associate with counsel representing Tenant.
(iii) Landlord shall have the right but not the obligation
to join and participate in, at its own expense, if it so elects, any legal
proceedings or actions initiated in connection with Tenant's activities.
(iv) The obligations of Landlord in this paragraph shall
survive the expiration or termination of this Lease.
(v) The obligations of Landlord under this paragraph shall
not be affected by any investigation by or on behalf of Tenant, or by any
information which Tenant may have or obtain with respect thereto.
(vi) In addition to the obligation of Landlord to indemnify
Tenant pursuant to this Lease, Landlord shall, upon approval and demand of
Tenant, at its sole cost and expense and using contractors approved by Tenant,
which approval shall not be unreasonably withheld, promptly take all actions to
remediate the Premises which are required by any Governmental Agency, or which
are reasonably necessary to mitigate Environmental Damages or to allow full
economic use of the Premises, which remediation is necessitated from the
presence upon, about or beneath the Premises, at any time during or immediately
prior to termination of this Lease, of a Hazardous Material or a violation of
Environmental Requirements for which the activities or omissions of the Landlord
<PAGE>
Group and/or Co-Tenant Group were a proximate cause. Such actions shall include,
but not be limited to, the investigation of the environmental condition of the
Premises, the preparation of any feasibility studies, reports or remedial plans,
and the performance of any cleanup, remediation, containment, operation,
maintenance, monitoring or restoration work, whether on or off the Premises,
which shall be performed in a manner approved by Tenant which approval shall not
be unreasonably withheld. Landlord shall take all actions reasonable and
practicable to restore the Premises to substantially the condition existing
prior to the introduction of Hazardous Material upon, about or beneath the
Premises.
3. LANDLORD'S ADDITIONAL OBLIGATIONS
---------------------------------
A. Nothwithstanding any other provision in this Lease to the contrary:
(i) Landlord shall not cause, permit or suffer the existence
of Hazardous Material Contamination or the commission by the Landlord Group or
the Co-Tenant Group of any violation of any Environmental Requirements upon,
about or beneath the Premises.
(ii) Landlord shall neither create or suffer to exist, nor
permit the Landlord Group or the Co-Tenant Group to create or suffer to exist
any lien, security interest or other charge or encumbrance of any kind with
respect to the Premises including, but without limitation, any lien imposed
pursuant to Section 107(f) of the Superfund Amendments and Reauthorization Act
of 1986 (42 U.S.C.(S)9607(1)) or any similar state statute, arising as a
proximate result of the acts or omissions of the Landlord Group and/or the
Co-Tenant Group.
(iii) Landlord's breach of any of its covenants or obligations
under these Additional Provisions shall constitute a material default under the
Lease; if not remediated within twenty days after written notice from Tenant.
The obligations of the Landlord under these Additional Provisions shall survive
the expiration or earlier termination of the Lease without any limitation, and
shall constitute obligations that are independent and severable from Landlord's
covenants and obligations under the Lease.
4. INDEMNITY BY TENANT
-------------------
Notwithstanding any other provisions in this Lease to the contrary:
A. Tenant, its successors and assigns agree to indemnify, defend
reimburse and hold harmless the Landlord Group; and from and against any and all
Environmental Damages, for which the activities or omissions of the Tenant were
a proximate cause or which exist as a result of the breach of any warranty or
covenant or the inaccuracy of any representation of Tenant contained in this
Lease.
B. The obligations contained in this Section 4 shall include, but
not be limited to, the reasonable and necessary burden and expense of defending
all claims, suits and administrative proceedings, even if such claims, suits or
proceedings are groundless, false or fraudulent, and conducting all negotiations
of any description, and paying and discharging, when and as the same become due,
any and all judgments, penalties or other sums due against such indemnified
persons.
C. Tenant shall have the right but not the obligation to join and
participate in, at its own expense, if it so elects any legal proceedings or
actions initiated in connection with Tenant's activities. Tenant may also, at
its own expense and risk, participate in any Hazardous Material attributable to
Landlord or Co-Tenant.
D. The obligations of Tenant in this paragraph shall survive the
expiration or termination of this Lease.
5. ADDITIONAL DEFINITIONS:
----------------------
Notwithstanding any other provisions in this Lease to the contrary.
A. "Hazardous Material" means any substance, whether solid, liquid, or
------------------
gaseous in nature:
(i) the presence of which requires investigation or remediation
under any federal, state or local statue, regulation, ordinance, order, action,
policy or common law; or
(ii) which is or becomes defined as a "hazardous waste," hazardous
substance," pollutant or contaminant under any federal, state or local statute,
regulations, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. section 9601, et seq.) and/or the Resource Conservation and
-- ---
Recovery Act (42 U.S.C. section 6901, et seq.); or
-- ---
(iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous or is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of the United States, the State of Maryland or any
political subdivision thereof.; or
(iv) the presence of which on the Premises causes or threatens to
pose a hazard to the health or safety of persons on or about the Premises; or
(v) the presence of which on adjacent properties could constitute a
trespass by Landlord; or
(vi) without limitation which contains gasoline, diesel fuel or other
petroleum hydrocarbons; or
<PAGE>
(vii) without limitation which contains polychlorinated biphenyls
(PCBs), asbestos or urea formaldehyde foam insulation; or
(viii) without limitation which contains radon gas.
B. "Hazardous Material Contamination" means the contamination (whether
--------------------------------
presently existing or hereafter occurring) of the Improvements, facilities, soil
groundwater, air or other elements on or of the Premises by Hazardous Material,
or the contamination of the buildings, facilities, soil, groundwater, air or
other elements on or of any other property as a result of Hazardous Material at
any time emanating from the Premises.
C. "Release" means any spilling, leaking, pumping, pouring, emitting,
-------
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including, but not limited to the abandonment or discarding of
barrels, containers and other receptacles containing any Hazardous Material).
D. "Reportable Quantity" means that quantity of a material as set forth in
-------------------
40 C.F.R. Part 302.
E. "Adverse Environmental Impact" means (i) a Release of a Hazardous
----------------------------
Material in a Reportable Quantity or (ii) any material adverse impact on human
health or the quality of any property.
F. "Environmental Requirements" means all applicable present and future:
--------------------------
(i) statutes, regulations, rules, ordinances, codes, licenses, permits,
orders, approvals, plans, authorizations, concessions, franchises, and similar
items (including, but not limited to those pertaining to reporting, licensing,
permitting, investigations and remediation), of all Governmental Agencies; and
(ii) all applicable judicial, administrative, and regulatory decrees,
judgments, and orders relating to the protection of human health or the
environment, including, without limitation, all requirements pertaining to
emissions, discharges, releases, or threatened releases of Hazardous Materials
or chemical substances into the air, surface water, groundwater or land, or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Hazardous Materials or chemical substances.
G. "Environmental Damages" means all claims, judgments, damages, losses,
---------------------
penalties, fines, liabilities (including strict liability), encumbrances, liens,
costs and expenses (including the expense of investigation and defense of any
claim, whether or not such claim is ultimately defeated, or the amount of any
good faith settlement or judgment arising from any such claim) of whatever kind
or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable (including without limitation reasonable attorneys' fees and
disbursements and consultants' fees) any of which are incurred at any time as a
result of the existence of Hazardous Material or Hazardous Material
Contamination upon, about, or beneath the Premises migrating or threatening to
migrate in or from the Premises, or the existence of a violation of
Environmental Requirements pertaining to the Premises and the activities
thereon, regardless of whether the existence of such Hazardous Material or the
violation of Environmental Requirements arose prior to the present ownership or
operation of the Premises in whole or in part. Environmental Damages include,
without limitation:
(i) damages for personal injury, or injury to property of natural
resources occurring upon or off the Premises including, without limitation, lost
profits, consequential damages [if incurred as a result of fraud or material
misrepresentation as to these two elements of damage only], the cost of
demolition and rebuilding of any improvements on real property, interest and
penalties; and damages arising from claims brought by or on behalf of employees
of Landlord (with respect to which Landlord waives any right to raise as a
defense against Tenant any immunity to which it may be entitled under any
industrial or worker's compensation laws);
(ii) reasonable and necessary fees, costs or expenses incurred for the
services of attorneys, consultants, contractors, experts, laboratories and all
other costs incurred in connection with the investigation or remediation of such
Hazardous Material or Hazardous Material Contamination or violation of such
Environmental Requirements, including, but not limited to, the preparation of
any feasibility studies or reports or the performance of any cleanup,
remediation, removal, response, abatement, containment, closure, restoration or
monitoring work required by any Governmental Agency or reasonably necessary to
make full economic use of the Premises or any other property in a manner
consistent with its current use or otherwise expanded in connection with such
conditions, and including without limitation any reasonable and necessary
attorneys' fees, costs and expenses incurred in enforcing the provisions of this
Lease or collecting any sums due hereunder; and
(iii) liability to any third person or Governmental Agency to indemnify
such person or Governmental Agency for costs expended in connection with the
items referenced in subparagraph (ii) above.
H. "Governmental Agency" means all governmental agencies, departments,
-------------------
commissions, boards, bureaus or instrumentalities of the United States, states,
counties, cities and political subdivisions thereof.
I. The "Tenant Group" means Tenant, Tenant's successors, assignees,
------------
guarantors, officers, directors, mortgagees trustees, agents, partners,
employees, invitees, permitees or other parties under the supervision or control
of Tenant or lawfully entering the Premises during the term of this Lease with
the permission of Tenant, other than Landlord or its agents or employees.
J. The "Landlord Group" means the Landlord, Landlord's successors,
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assignees, guarantors, officers, directors, mortgagees, trustees, agents,
partners, employees, invitees, permitees or other parties under the supervision
or control of the Landlord or lawfully entering the Premises during the term of
this Lease with the permission of Landlord, other than Tenant or its agents or
employees.
K. "Co-Tenant" means any other lessee of any interest in the Premises.
---------
L. The "Co-Tenant Group" means any Co-Tenant, Co-Tenant's successors,
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assigns, guarantors, officers, directors, mortgagees, trustees, agents,
partners, employees, invitees, permitees or other parties under the supervision
or control of the Co-Tenant or lawfully
<PAGE>
entering the Premises during the term of this Lease with the permission of
Co-Tenant, other than Tenant or Landlord or their agents or employees.
TENANT LANDLORD
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Dal-Tile Corporation Eldersburg Business Center, Inc.
By:____________________________________ By: /s/ [ILLEGIBLE]
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Typewritten Carlos Sala, Vice President Typewritten
Name: /s/ Carlos Sala Name: Leroy M. Merritt
Title: ________________________________ Title: President
---------------------------
Date: _________________________________ Date: [ILLEGIBLE]
----------------------------