Exhibit 10.15
AGREEMENT OF LEASE
BETWEEN
THE ELECTRONICS BOUTIQUE, INC.
(LANDLORD)
AND
ELECTRONICS BOUTIQUE OF AMERICA INC.
(TENANT)
DATED JULY __, 1998 AND EFFECTIVE AS OF MAY 31, 1998
TABLE OF CONTENTS
Section Page No.
1. DEMISED PREMISES.........................................................................................1
2. LEASE TERM...............................................................................................1
3. FIXED RENT...............................................................................................1
4. ADDITIONAL RENT..........................................................................................2
5. ABSOLUTE NET, NET, NET LEASE.............................................................................3
6. OPTION TO PURCHASE DEMISED PREMISES......................................................................4
7. USE OF DEMISED PREMISES..................................................................................8
8. CONDITION OF DEMISED PREMISES............................................................................8
9. ALTERATIONS OR IMPROVEMENTS BY TENANT....................................................................8
10. REPRESENTATIONS AND WARRANTIES OF LANDLORD...............................................................8
11. COVENANTS OF TENANT......................................................................................9
12. RULES AND REGULATIONS...................................................................................11
13. ASSIGNMENT AND SUBLETTING...............................................................................11
14. [INTENTIONALLY OMITTED].................................................................................13
15. EMINENT DOMAIN..........................................................................................13
16. CASUALTY DAMAGE.........................................................................................13
17. INSURANCE; INDEMNIFICATION OF LANDLORD; WAIVER OF
SUBROGATION............................................................................................15
18. INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES......................................................16
(i)
TABLE OF CONTENTS
Section Page No.
19. DEFAULT.................................................................................................17
20. LANDLORD'S REMEDIES.....................................................................................18
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT...............................................................21
22. ESTOPPEL CERTIFICATE....................................................................................21
23. HOLDING OVER............................................................................................21
24. SURRENDER OF DEMISED PREMISES...........................................................................21
25. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT...........................................................22
26. BROKERS.................................................................................................23
27. NOTICES.................................................................................................23
28. MISCELLANEOUS...........................................................................................23
(ii)
List of Exhibits
Exhibit "A": Legal Description of Land
Exhibit "B": Form of Tenant Estoppel Certificate and Statement
(iii)
AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE (this "Lease") is made this ____ day of July,
1998 and effective as of May 31, 1998, by and between THE ELECTRONICS BOUTIQUE,
INC., a Pennsylvania corporation ("Landlord") and ELECTRONICS BOUTIQUE OF
AMERICA INC., a Pennsylvania corporation ("Tenant").
Intending to be legally bound, Landlord and Tenant agree as set forth
below.
1. DEMISED PREMISES. Landlord, for the term and subject to the
provisions and conditions hereof, leases to Tenant, and Tenant rents from
Landlord, the tract of land known as 000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxxxx,
Xxxxxxxxxxxx 00000, which tract of land is described more particularly on
Exhibit "A" attached hereto and hereby made a part of this Lease (the "Lease"),
together with the building erected thereon containing approximately 140,000
rentable square feet (the "Building") and the paved parking and loading areas
and other improvements situate on the Land (the Land, Building and other
improvements sometimes hereinafter collectively being referred to as the
"Demised Premises").
2. LEASE TERM. The Lease Term (the "Lease Term") commenced on May 31,
1998 (the "Commencement Date"), and shall continue until May 31, 2000 unless
extended or sooner terminated as provided in this Lease.
3. FIXED RENT. Fixed rent (the "Fixed Rent") is payable by Tenant,
beginning on the Commencement Date in twenty-four (24) monthly installments of
Fifty Thousand Dollars ($50,000.00) each, representing one-twelfth (1/12th) of
the annual Fixed Rent (the "Annual Fixed Rent") of Six Hundred Thousand Dollars
($600,000.00).
Annual Fixed Rent is payable without prior notice or demand, and, except as set
forth in this Lease, without any setoff or deduction whatsoever, in advance, on
the first day of each month at such place as Landlord may direct, except that
the Fixed Rent for the first full month of the Lease Term will be paid on the
date of execution of this Lease. If the Lease Term commences on a day other than
the first day of a calendar month, Tenant shall pay to Landlord, on or before
the Commencement Date of the Lease Term, a pro rata portion of the monthly
installment of rent (including Fixed Rent and any Additional Rent (as defined in
Paragraph 4), such pro rata portion to be based on the actual number of calendar
days remaining in such partial month after the Commencement Date of the Lease
Term. If the Lease Term shall expire on other than the last day of a calendar
month, such monthly installment of Fixed Rent and Additional Rent shall be
prorated for each calendar day of such partial month. If any portion of Fixed
Rent, Additional Rent or any other sum payable to Landlord hereunder shall be
due and unpaid for more than ten (10) days, it shall thereafter bear interest at
a rate equal to five percent (5%) per annum greater than the highest prime rate
of interest announced from time to time by PNC Bank, National Association, (or
its successor) (the "Default Rate"), as the same may change from time to time,
from the due date until the date of payment thereof by
Tenant provided, however, that nothing herein contained shall be construed or
implemented in such a manner as to allow Landlord to charge or receive interest
in excess of the maximum legal rate then allowed by law. Landlord and Tenant
understand and agree that memos written on rental checks or any other payment
forms delivered to Landlord do not and shall not, throughout the Lease Term
hereunder, constitute satisfaction of any current or outstanding debt of Tenant
pursuant to this Lease, and, provided further that any such memo shall not
preclude Landlord from recovering any balance of any sum or sums due under this
Lease. In addition, a letter or similar type statement accompanying any rental
check or payment form delivered to Landlord pursuant to this Lease shall also
have no force or effect under this Lease as such may relate to the satisfaction
of any debt of Tenant hereunder.
4. ADDITIONAL RENT.
4.1 As additional rent under this Lease ("Additional Rent"),
at least thirty (30) days before any fine, penalty, interest or other cost may
be added thereto for the non-payment thereof (or sooner if elsewhere herein
required), Tenant shall pay throughout the Lease Term all levies, taxes,
assessments, water and sewer rents and charges, liens, license and permit fees,
charges for public utilities and all other charges, imposed or charged by any
federal state or municipal government or public authority, or under any law,
ordinance or regulation thereof, or pursuant to any recorded covenants or
agreements (all of which hereinafter collectively are referred to as
"Impositions") upon or with respect to the Demised Premises, the Land or any
improvements made thereto, any part of the foregoing, and any appurtenances
thereto, or directly upon this Lease or the rent payable hereunder or amounts
payable by any subtenants or other occupants of the Premises, or upon this
transaction or any related documents to which Tenant is a party or successor in
interest, or against Landlord because of Landlord's estate or interest herein.
If Tenant is permitted by the assessing and collecting authorities and by all
mortgagees and elects to pay any Imposition in installments, Tenants shall
nevertheless pay all unpaid installments thereof prior to the expiration or
sooner termination of the Lease Term, whether or not such installments are then
due or payable. Tenant shall pay each of the Impositions, at Landlord's
election, to Landlord or directly to the government or other public authority
charged with the collection of such Impositions; and in the latter event, Tenant
shall furnish Landlord, not later than ten (10) days prior to the last day upon
which they may be paid without any fine, penalty, interest or cost, receipts or
other evidence satisfactory to Landlord of the payment of all such Impositions.
4.2 Nothing contained in this Lease shall be interpreted as
requiring Tenant to pay any income, excess profits, corporate capital stock, or
franchise tax imposed or assessed upon Landlord, unless such tax or any similar
tax is levied or assessed in lieu of all or any part of any imposition or an
increase in any Impositions. If under the requirements of any state or local law
with respect to such new method of taxation, Tenant is prohibited from paying
such new tax, Landlord may, at its election, terminate this Lease by giving
written notice thereof to Tenant; provided however, that Tenant may, within
fifteen (15) days of the date of such notice require Landlord to withdraw such
notice of termination if Tenant agrees to execute a new lease for the sole
purpose of
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placing Landlord in a financial position identical to the financial position of
Landlord pursuant to the terms of this Lease.
4.3 Notwithstanding the foregoing provisions of this Section
4, if required by any mortgagee, Landlord shall have the right to require Tenant
to pay to Landlord or to any mortgagee, at the time when the monthly installment
of minimum rent is payable, an amount equal to one-twelfth (1/12th) of the
annual Impositions as estimated by Landlord. If Landlord elects to have Tenant
make such payments, Tenant also shall pay to Landlord or to such mortgagee, as
the case may be, at least thirty (30) days before any fine, penalty, interest or
cost may be added thereto for the non-payment thereof, the amount by which the
Impositions becoming due exceed the monthly payments on account thereof
previously made by Tenant. The amounts paid by Tenant pursuant to this Section
4.3 shall be used to pay the Impositions but such amount shall not be deemed to
be trust funds and no interest shall be payable thereon.
4.4 Landlord may bring proceedings to contest the validity or
amount of any Imposition or to recover payments therefor. Tenant shall cooperate
with Landlord with respect to such proceedings to the extent reasonably
necessary and shall pay to Landlord all reasonable costs, fees and expenses
incurred in connection with such proceedings as additional rent promptly upon
being billed therefor.
4.5 Tenant, without postponement of payment, may bring
proceedings to contest the validity or amount of any Imposition or to recover
payments therefor, Tenant shall save Landlord harmless from all costs and
expenses in connection with such proceedings. Landlord shall cooperate with
Tenant with respect to such proceedings to the extent reasonably necessary, but
all costs, fees and expense incurred in connection with such proceedings shall
be borne by Tenant, Tenant shall give Landlord advance written notice of
Tenant's intention to take any such action.
4.6 Tenant will be responsible to pay, as Additional Rent, for
ad valorem taxes on its personal property and on the value of the leasehold
improvements in the Demised Premises (and if the taxing authorities do not
separately assess Tenant's leasehold improvements, Landlord may make a
reasonable allocation of impositions to such improvements).
4.7 If, upon expiration or termination of this Lease for any
cause, the amount of any Additional Rent due hereunder has not yet been
determined, an appropriate payment from Tenant to Landlord, or refund from
Landlord to Tenant, shall be made promptly after such determination.
5. ABSOLUTE NET, NET, NET LEASE. This Lease is what is commonly called
a "Net, Net, Net Lease". It is the intention of Landlord and Tenant that Fixed
Rent shall be absolutely net to Landlord and that all costs, expenses and
obligations of every kind relating directly or indirectly in any way, foreseen
and unforeseen, to the Tenant's use, occupancy and/or possession of the Demised
Premises, which may arise or become due during the Lease Term (including, but
not limited to, the hook-up and/or consumption of all utilities, the payment of
Additional Rent and
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payment for the insurance coverages required to be maintained by Tenant under
this Lease), shall be paid and/or performed by Tenant or, if and to the extent
paid, performed, or incurred by Landlord, reimbursed or paid to Landlord by
Tenant within thirty (30) days after being billed therefor. Landlord shall be
indemnified by Tenant against all such costs, expenses and obligations. Except
as set forth in this Lease, such Fixed Rent and all Additional Rent shall be
paid without abatement, diminution, reductions, deduction or setoff.
6. OPTION TO PURCHASE DEMISED PREMISES.
6.1 Landlord hereby grants to Tenant the exclusive right and
option to purchase the Demised Premises (the "Option") at any time during the
Lease Term for the purchase price of Six Million seven Hundred Thousand Dollars
($6,700,000.00) (the "Purchase Price"), subject to adjustment for settlement
prorations and upon the terms and conditions hereinafter set forth in this
Section 6. If Tenant desires to exercise the Option during the Lease Term,
Tenant shall notify Landlord in writing of its exercise of the Option (the
"Exercise Notice"). If Tenant fails to exercise the Option during the Lease Term
in accordance with this Lease, the Option shall lapse and terminate, and Tenant
shall have no further right to purchase the Demised Premises under this Lease or
otherwise, except as the parties may hereafter agree in writing.
6.2 Upon Tenant's receipt of the Exercise Notice, the
following terms and conditions of this Section 6.2 shall become and constitute
the agreement of Landlord to sell and Tenant to buy the Demised Premises:
(a) The purchase price for the Demised Premises shall be the
Purchase Price. The Purchase Price shall be paid by Tenant to Landlord at
settlement.
(b) In the event of a failure by Landlord to perform or comply
with any of the terms and provisions of this Section 6.2 to be performed and
complied with by Landlord within the time or times provided herein, upon five
(5) days' notice to Landlord, Tenant shall be repaid any moneys paid by Tenant
on account of the Purchase Price, and Tenant shall have all remedies available
to it under law and in equity (including, without limitation, specific
performance).
(c) Settlement on the purchase of the Demised Premises shall
be made at the offices of Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx LLP, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000, within forty-five (45) days
after the date of the Exercise Notice, but in no event later than the date of
expiration of the Lease Term or the earlier termination of this Lease.
(d) (i) At settlement, title to the Demised Premises shall be
free and clear of all leases, liens, judgments, encumbrances, easements,
restrictions and objections, except existing building restrictions, ordinances,
easements of roads, easements visible upon the ground, privileges or rights of
utility or public service companies, and all other encumbrances and/or
restrictions recorded against the Land as of the date of execution of this
Lease. Except as set forth in this Section 6.2(d)(i), Landlord agrees not to
convey or encumber all or any portion of the Premises or
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any interest therein, or to encumber the Demised Premises with any judgments,
restrictions, easements or other objections without the prior written consent of
Tenant, which consent Tenant shall not unreasonably withhold, delay or
condition. Landlord may mortgage the Demised Premises without the consent of
Tenant, provided the mortgage and other instruments evidencing and/or securing
such financing expressly acknowledge and recognize the rights of Tenant set
forth in this Lease.
(ii) Excepting only as set forth in Section
6.2(d)(i) above, at settlement title to the Demised Premises shall be in fee
simple and insurable as good and marketable at regular rates by a title
insurance company selected by Tenant. Search and title insurance costs shall be
paid by Tenant.
(iii) In the event title in accordance with this
Section 6.2 cannot be conveyed by Landlord, Tenant shall have the option of
taking such title as Landlord can give, without abatement of the Purchase Price,
except as to monetary lien or liens, or, in the alternative, of terminating this
Agreement, in which latter event Tenant shall be repaid any money paid on
account of the Purchase Price, and all interest accrued thereon, and neither
party shall have any further rights, duties or obligations under this Agreement.
(iv) The Demised Premises shall be conveyed by
Landlord to Tenant at settlement by good and sufficient deed, containing a
special warranty only, prepared by Tenant and delivered to Landlord a reasonable
time prior to settlement.
(e) All times provided for in this Section 6 are and shall be
of the essence, and each extension of any such time or times shall continue to
be of the essence of this Agreement. Tender of an executed deed and of the
purchase money are hereby waived.
(f) At settlement, Landlord shall deliver to Tenant sole and
exclusive possession of the Demised Premises by delivery of the deed. At
settlement, Landlord and Tenant shall terminate this Lease in writing pursuant
to an agreement prepared by Landlord that shall contain customary releases and
indemnities in favor of Landlord.
(g) (i) Tenant shall be responsible for all Impositions for
all tax years during the Lease Term, and shall pay and discharge the same at or
before settlement. Landlord shall be responsible for all Impositions for all tax
years preceding the year in which the Lease Term commenced, and shall pay and
discharge the same at or before settlement. Impositions due for the current tax
year in which settlement is held shall be apportioned between the parties as of
the date of settlement on a tax year basis if and to the extent settlement is
held during the first tax year following commencement of the Lease Term. As used
in this Lease, "tax year" shall, in each instance, be deemed to be the fiscal
year used by the respective taxing or assessing authorities.
(ii) Tenant shall pay all of the real estate transfer
taxes imposed upon this transaction.
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(h) (i) Landlord represents and warrants to Tenant that, as
of the Commencement Date, Landlord has no knowledge or notice of any work being
done or about to be done, or of any assessment, violation or other notice issued
or about to be issued by any federal, state, municipal or public body or
authority, relating to, or with respect to or otherwise affecting the Demised
Premises or abutting streets. Landlord agrees to pay for all work done or
ordered to be done by or required in order to comply with the requirements of
any federal, state, municipal or public body or authority prior to the date of
this Lease, whether or not presently assessed or ordered to be done, on or with
respect to or otherwise affecting the Demised Premises or abutting streets, or
required in order to comply with any existing assessment, violation or similar
notice.
(ii) Landlord represents that the Demised Premises is
zoned I-2.
(iii) If required by law, Landlord shall deliver to
Tenant at or before settlement a certificate from the appropriate municipal
department or departments stating whether or not the Demised Premises is in
violation of the applicable zoning laws and ordinances and identifying any
outstanding notices of any uncorrected violations of the applicable zoning,
housing, building, safety or fire ordinances. The certificate shall be dated no
earlier than twenty (20) days prior to settlement.
(i) Subject to the other terms and conditions of this Lease,
Landlord shall assume the risk of loss by casualty or eminent domain after the
date of the Exercise Notice. Tenant shall continuously maintain insurance
coverage against loss from fire or other casualty, with all risk and extended
coverage endorsement, in an amount not less than the full replacement cost of
the Demised Premises, without co-insurance or deductible, and, effective as of
the Exercise Date, all such insurance coverages shall name Landlord as the
insured and Tenant as an additional insured thereunder. Loss or damage to the
Demised Premises as a result of the exercise of the power of eminent domain or
as a result of fire or casualty between the date of the Exercise Notice and the
time of settlement shall not, at Tenant's option, void or impair the Option, but
Tenant shall have the option to: (a) complete settlement and be entitled to the
eminent domain award or compensation and a credit for the proceeds of any
insurance received by Landlord on account of any such loss or damage, and to an
assignment of all claims to such compensation or award and on insurance
policies, provided such award, compensation or proceeds shall not exceed the
Purchase Price; or (b) terminate this Agreement and be entitled to a return of
any monies paid on account of the Purchase Price.
(j) The Demised Premises shall be conveyed upon exercise of
the Option in their "AS IS" "WHERE IS" condition, with no representation or
warranty being made by Landlord as to the physical or environmental condition of
the Demised Premises or the suitability or fitness of the Demised Premises for
Tenant's use.
(k) Landlord and Tenant each represents to the other party
that it has dealt with no other real estate broker, agent or finder in
connection with the Option. Each party hereby agrees to indemnify, defend and
hold harmless the other party from and against any and all losses, costs,
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damages, liabilities and expenses (including reasonable attorneys' fees) arising
as a result of a breach of the representations set forth in the preceding
sentence. This Section 6.2(k) shall survive settlement and shall not merge with
the deed.
(l) A memorandum of the Option may be filed in the office of
the Recorder of Deeds for Xxxxxxx County by Landlord and Tenant.
(m) Except as set forth in this Section 6.2(m), the Option may
not be assigned, without Landlord's consent, may be withheld or granted by
Landlord in its sole discretion. The Option may be assigned by Tenant to any
Related Party (as defined in Section 13) without Landlord's consent, provided
that Tenant shall, notwithstanding any such assignment, remain liable for full
performance of Tenant's obligations under this Section 6.2.
(n) Subject to Section 6.2(m), this Section shall inure to the
benefit of and be binding upon Landlord and Tenant, and each of their successors
and assigns.
(o) This Section 6.2 constitutes the entire understanding
between the parties hereto concerning the right of Tenant to purchase the
Demised Premises, and all prior agreements, contracts and understandings between
the parties concerning the purchase of the Demised premises by Tenant are hereby
merged into this Section 6. The parties shall not be bound by any agreements,
understandings or conditions respecting the right of Tenant to purchase that
Demised Premises other than those expressly set forth in this Section 6.
(p) The Option may not be changed or amended orally. All
notices, demands and other communications concerning the Option shall be valid
only if given in writing and in the manner set forth in Section 27.
(q) In any proceeding to enforce the Option or obtain any
remedy provided for herein or otherwise permitted by law in connection with the
Option, Landlord and Tenant hereby knowingly, voluntarily and intentionally
waive trial by jury to the fullest extent permitted by law.
(r) The invalidity or unenforceability of any provision of
this Section 6 shall in no way affect the validity or enforceability of any
other provision of this Section 6.
(s) Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such
terms, covenants or conditions, nor shall any waiver or relinquishment of any
right or power hereunder at one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
(t) The obligation of Landlord to complete settlement under
this Section 6 following Tenant's exercise of the Option is expressly
conditioned upon Tenant having performed and complied with all of the
agreements, undertakings and obligations that are required under this
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Lease to be performed or complied with by Tenant at or prior to the completion
of settlement under this Section 6 at no cost or expense to Landlord.
7. USE OF DEMISED PREMISES. Tenant covenants and agrees to use and
occupy the Demised Premises only as a private warehouse, general office and
other uses incidental to and associated with Tenant's business as a retailer of
video software and related products and only in conformity with the law, and for
no other purpose. In no event may Tenant use the Demised Premises or any portion
thereof for the display and retail sale of any products or for any other retail
business directly with the public. Tenant shall not use or permit any use of the
Demised Premises which creates any safety or environmental hazard, or which
would: (i) be dangerous to the Demised Premises, including the Building, or (ii)
cause any increase in the premium cost for any insurance which Landlord may then
have in effect with respect to the Building generally.
8. CONDITION OF DEMISED PREMISES. Tenant acknowledges that it has had
an opportunity to inspect the Demised Premises and hereby agrees to accept
possession of the Demised Premises in their "AS IS" "WHERE IS" condition as of
the Commencement Date, with no representation or warranty by Landlord as to the
physical or environmental condition of the Demised Premises or the suitability
or fitness of the Demised Premises for Tenant's use.
9. ALTERATIONS OR IMPROVEMENTS BY TENANT. Except as set forth in this
Section 9, during the Lease Term Tenant shall not make any alterations,
additions, improvements, redecorating or other changes to the Demised Premises
without the prior written approval of Landlord and then only in accordance with
plans and specifications previously approved in writing by Landlord and subject
to such conditions as Landlord may reasonably require, including, without
limitation, that Tenant be required to pay for any increased cost to Landlord
occasioned thereby or attributed thereto. Prior to the termination of this Lease
and without additional notice to Tenant by Landlord, Tenant shall either: (i)
remove any such alterations or additions and repair any damage to the Building
or the Demised Premises occasioned by their installation or removal and restore
the Demised Premises to substantially the same condition as existed prior to the
time when any such alterations or additions were made, or (ii) reimburse
Landlord for the cost of removing such alterations or additions and the
restoration of the Demised Premises. Landlord shall reasonably determine any
such cost as called for in clause (ii) above prior to the termination of this
Lease and Tenant shall reimburse Landlord within thirty (30) days of receipt of
such notice. Notwithstanding the foregoing provisions of this Section 9, Tenant
may, without Landlord's prior approval, make minor nonstructural interior
alterations or improvements to the Building which cost individually or in any
series of transactions no more than Twenty-Five Thousand Dollars ($25,000.00);
provided, however, that Tenant notifies Landlord of any such alteration or
improvement, which notice shall be accompanied by invoices showing the cost of
the work, and Tenant otherwise complies with this Lease, including the covenants
set forth in Section 11.
10. REPRESENTATIONS AND WARRANTIES OF LANDLORD. Landlord represents and
warrants, to its actual knowledge as of the Commencement Date, that the Building
has been completed in accordance with all applicable building codes and that
Landlord has received no notice
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of violations of laws, codes, ordinances or regulations affecting the Demised
Premises. In addition, to Landlord's actual knowledge as of the Commencement
Date, there are no Hazardous Substances (as defined in Section 11.8(a)) or
storage tanks at the Building.
11. COVENANTS OF TENANT. Tenant covenants that, at all times during the
Lease Term, Tenant will, at Tenant's sole cost, risk and expense:
11.1 Keep the Demised Premises (including the Building and the
mechanical, electrical, plumbing, drainage (storm water and sewage) and HVAC
systems serving the Building and/or other portions of the Demised Premises) in
good order, condition and repair, reasonable wear and tear and damage by insured
casualty excepted, and Tenant will promptly make all repairs necessary to and
maintain such good order, condition and repair, whether such repairs are
interior or exterior, structural or nonstructural, foreseen or unforeseen; it
being acknowledged and agreed by Tenant that the term "repairs" used in this
Section 11.1 and in other provisions of this Lease means and includes
restorations, replacements and renewals when necessary, and all materials and
equipment used and/or installed in connection with the performance of Tenant's
covenant set forth in this Section 11.1 and other obligations set forth in this
Lease shall be new and at least equal in quality and utility to those items
being repaired, replaced or renewed;
11.2 Surrender the Demised Premises at the expiration of the
Lease Term or earlier termination of this Lease in the same condition in which
Tenant has agreed to keep the same during the Lease Term;
11.3 Not place, erect, maintain or display any sign or other
marking of any kind whatsoever on the windows, doors or exterior walls of the
Building or upon the Land, except as may be approved by Landlord and, if
required under local ordinances, by local governing authorities, and not use or
place any curtains, blinds, drapes or coverings over any exterior windows or
upon the window surfaces which are visible from the outside of the Building
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld;
11.4 Comply with all laws, codes, ordinances, orders,
enactments and regulations of any governmental authority relating or applicable
to the Demised Premises and/or Tenant's occupancy of the Demised Premises and
any covenants, easements and restrictions governing the Land or Building and
indemnify, defend and hold Landlord harmless from all consequences from its
failure to do so;
11.5 Promptly notify Landlord of any damage to or defects in
the Demised Premises, any notices of violation received by Tenant and of any
injuries to persons or property which occur therein or claims relating thereto;
11.6 Pay when due for any alterations, improvements or
additions to, and repairs, maintenance, restorations and replacements of all or
any part of the Demised Premises, and allow
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no mechanic's, materialmen's or other lien to attach to the Demised Premises
with respect to any of the foregoing;
11.7 Without the prior written consent of Landlord, not place
within the Demised Premises or bring into the Building any machinery or other
personalty having a weight in excess of the design capacity of the Building;
11.8 (a) Not use the Demised Premises for the generation, use,
manufacture, recycling, transportation, treatment, storage, discharge or
disposal of any hazardous, toxic or polluting substance or waste (including
petroleum products, asbestos containing materials, polychlorinated biphenyl
containing materials or equipment, and/or radioactive materials) (collectively,
"Hazardous Substances") or for any use which poses a risk of damage to the
environment or injury to natural persons and will not engage in any activity
which could subject Landlord to any liability under federal, state or local
environmental law, regulation, code, enactment, order or ordinance;
(b) Comply with all applicable environmental statutes,
rules, regulations, codes, enactments and orders of any federal, state or
municipal government in effect at any time during the term of this Lease; obtain
in its own name any and all environmental permits, registrations, licenses or
identification numbers necessary for its operations; and comply with all such
permits;
(c) Take no action (or not refuse to take any action)
which could result in a lien being imposed on the Demised Premises by the state
or federal government under any environmental statute;
(d) Not install, use, manufacture, generate, store,
transport, discharge or dispose of any Hazardous Substances or storage tanks at,
under or beneath the Demised Premises, or permit or suffer any of the foregoing
at the Demised Premises, without the prior written consent of Landlord.
(e) Take no action which could require Landlord to
include in the deed to the Land or the Building a notice of disposal/release of
Hazardous Substances at the site.
(f) Tenant hereby indemnifies and saves harmless Landlord
from any and all judgments, losses, costs, damages and expenses (including
fines, penalties, and reasonable attorneys' fees) resulting from any claim,
demand, liability, obligation, right or cause of action, including but not
limited to governmental action or other third party action (each, a "Claim" and
collectively, "Claims") that is asserted against Landlord or the Demised
Premises as a result of Tenant's breach of any representation, warranty, or
covenant set forth in this Lease; or arising out of the operations or activities
or presence of Tenant or any sublessee, agent, or representative of Tenant at
the Demised Premises; or arising from environmental conditions or violations at
the Demised Premises during the Lease Term including, without limitation, the
presence of Hazardous
10
Substances at, on, or under the Demised Premises or the discharge or release of
hazardous, polluting, or toxic substances from the Demised Premises.
(g) Landlord hereby indemnifies and saves harmless Tenant
from any and all Claims (including, without limitation, governmental actions)
that are asserted against Tenant or the Demised Premises as a result of the
presence of Hazardous Substances at, on, or under the Demised Premises or the
release of Hazardous Substances from the Demised Premises arising prior to the
Lease Term.
(h) The indemnities, representations, warranties and
covenants contained in this Section 11.8 shall survive the expiration or earlier
termination of this Lease.
11.9 Comply with the rules and regulations referenced in
Section 12 below and with all reasonable changes and additions thereto upon
notice by Landlord to Tenant (such rules and regulations, together with all
changes and additions thereto, are deemed a part of this Lease); and
11.10 Comply with all reasonable recommendations of Landlord's
or Tenant's insurance carriers relating to layout, use, storage and/or disposal
of materials and maintenance, repair, replacement and/or restoration of the
Demised Premises.
12. RULES AND REGULATIONS. Landlord shall have the right to make such
reasonable rules and regulations (the "Rules and Regulations") as in the
judgment of Landlord may from time to time be needful for the safety,
appearance, care and cleanliness of the Building and for the preservation of
good order therein; provided, however, such Rules and Regulations shall not be
effective until Landlord delivers to Tenant a copy of the Rules and Regulations
or any amendments thereto, as the case may be, in the manner set forth in
Section 27 of this Lease.
13. ASSIGNMENT AND SUBLETTING.
13.1 Landlord's Consent. Except for a Permitted Transfer (as
defined in Section 13.2), Tenant shall neither assign this Lease or any interest
therein nor sublet the Demised Premises or any portion thereof without the prior
written consent of Landlord, which consent Landlord agrees shall not be
unreasonably withheld, conditioned or delayed.
13.2 Permitted Transactions.
(a) Tenant may assign this Lease or any interest therein
or sublet the Premises or any portion thereof, without the Landlord's consent,
to a Related Party (as defined below) (each, a "Permitted Transfer"); provided,
(i) Tenant shall remain liable for the performance by the
transferee-in-possession of Tenant's obligations under this Lease; (ii) the
transferee-in- possession shall assume, in writing, all obligations to be
performed by Tenant under this Lease from and after the effective date of such
Permitted Transfer; and (iii) the transferee-in-possession of this
11
Lease shall have a net worth on the effective date of such Permitted Transfer
not less than Tenant's net worth immediately prior to completion of such
Permitted Transfer.
(b) (i) As used in this Lease, "Related Party" means
any of the following persons or entities: (A) a Successor to Tenant (as defined
below); (B) an Affiliate (as defined below) of Tenant or any Successor to
Tenant; or (C) all or any of the nominal or beneficial owners of the capital
stock or other ownership interests of (I) Tenant, (II) any Successor to Tenant
or (III) any Affiliate of Tenant or any Successor to Tenant, or any entity of
which at least fifty percent (50%) of the voting shares or other ownership
interests are owned nominally or beneficially by such stockholders or owners of
other ownership interests, as the case may be.
(ii) As used in this Lease, "Successor to Tenant" means
a successor to Tenant or to Tenant's successors and assigns, as the case may be,
by one of the following means: (A) merger, consolidation or otherwise by
operation of law; (B) acquisition of all or substantially all of the assets of
Tenant; (C) acquisition of all or substantially all of the issued and
outstanding shares of capital stock of Tenant; or (D) the transfer of capital
stock or other ownership interests in connection with a public offering
registered by the Securities Exchange Commission.
(iii) As used in this Lease, "Affiliate" means: (A) a
subsidiary or parent of Tenant or any Successor to Tenant; (B) a subsidiary of a
parent of Tenant or any Successor to Tenant; or (C) any other entity under
common ownership and management control with any of the foregoing. For the
purpose of defining "Affiliate" in the preceding sentence, "subsidiary" is
hereby defined as a corporation at least fifty percent (50%) of the voting
shares of which is owned by another corporation, which latter corporation is
hereby defined as a "parent."
13.3 Tenant's request for consent to any sublet or assignment
shall be in writing and shall contain the name, address, and description of the
business of the proposed assignee or subtenant, its most recent financial
statement and other evidence of financial responsibility, its intended use of
the Demised Premises, and the terms and conditions of the proposed assignment or
subletting.
13.4 Each assignee or other transferee of this Lease shall
assume and be deemed to have assumed this Lease and shall be and remain liable
jointly and severally with Tenant for all payments and for the due performance
of all terms, covenants, conditions and provisions herein contained on Tenant's
part to be observed and performed. No assignment shall be binding upon Landlord
unless the assignee shall deliver to Landlord an instrument in form and
substance satisfactory to Landlord containing a covenant of assumption by the
assignee, but the failure or refusal of assignee to execute and deliver the same
shall not release assignee from its liability as set forth herein. Any profit or
additional consideration or rent in excess of the Fixed Rent or Additional Rent
payable by Tenant hereunder which is payable to Tenant as a result of any
assignment or subletting shall be paid to Landlord as Additional Rent when
received by Tenant. All the foregoing notwithstanding, Tenant shall not enter
into any lease, sublease, license, concession or other agreement for the use,
occupancy or utilization of the Demised Premises or any portion thereof,
12
which provides for a rental or other payment for such use, occupancy or
utilization based in whole or in part on the income or profits derived by any
person from the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or sales). Any
such purported lease, sublease, license, concession or other agreement shall be
absolutely void and ineffective as a conveyance of any right or interest in the
possession, use or occupancy of any part of the Demised Premises.
13.5 Any consent by Landlord hereunder shall not constitute a
waiver of strict future compliance by Tenant with the provisions of this Section
13 or a release of Tenant from the full performance by Tenant of any of the
terms, covenants, provisions, or conditions in this Lease contained.
14. [INTENTIONALLY OMITTED]
15. EMINENT DOMAIN. If the whole or more than twenty-five percent (25%)
of the Demised Premises (or use or occupancy of the Demised Premises) shall be
taken or condemned by any governmental or quasi-governmental authority for any
public or quasi-public use or purpose (including sale under threat of such a
taking), or if the owner elects to convey title to the condemnor by a deed in
lieu of condemnation, or if all or any portion of the Land or Building are so
taken, condemned or conveyed and as a result thereof, in Landlord's or Tenant's
reasonable judgment, the Demised Premises cannot be used for Tenant's permitted
use as set forth in this Lease, then this Lease shall cease and terminate as of
the date when title vests in such governmental or quasi-governmental authority
and the Fixed Rent and Additional Rent shall be abated on the date when such
title vests in such governmental or quasi-governmental authority. If less than
twenty-five percent (25%) of the Demised Premises is taken or condemned by any
governmental or quasi-governmental authority for any public or quasi-public use
or purpose (including sale under threat of such a taking), the Fixed Rent and
Additional Rent shall be equitably adjusted (on the basis of the number of
square feet before and after such event, and to the extent parking or other
material Building features are taken, such taking shall also be adjusted for) on
the date when title vests in such governmental or quasi-governmental authority
and the Lease shall otherwise continue in full force and effect. In any case,
Tenant shall have no claim against Landlord for any portion of the amount that
may be awarded as damages as a result of any governmental or quasi-governmental
taking or condemnation (or sale under threat of such taking or condemnation);
and all rights of Tenant to damages therefor are hereby assigned by Tenant to
Landlord. The foregoing shall not, however, deprive Tenant of any separate award
for moving expenses, dislocation damages or for any other award which would not
reduce the award payable to Landlord.
16. CASUALTY DAMAGE.
16.1 In the event of damage to or destruction of the Demised
Premises caused by fire or other casualty, or any such damage or destruction to
the Building or the facilities necessary to provide services and normal access
to the Demised Premises in accordance herewith, Landlord, after receipt of
written notice thereof from Tenant, and subject to any mortgagee's consent and
to
13
the conditions set forth in this Section 16.1, shall undertake to make repairs
and restorations with reasonable diligence as hereinafter provided, unless this
Lease has been terminated by Landlord or Tenant as hereinafter provided or
unless any mortgagee which is entitled to receive casualty insurance proceeds
fails to make available to Landlord a sufficient amount of such proceeds to
cover the cost of such repairs and restoration. If (i) the damage is of such
nature or extent that, in Landlord's sole judgment, more than one hundred and
fifty (150) days would be required (with normal work crews and hours) to repair
and restore the part of the Demised Premises or Building which has been damaged,
or (ii) the Demised Premises or the Building is so damaged that, in Landlord's
sole judgment, it is uneconomical to restore or repair the Demised Premises or
the Building, as the case may be, or (iii) less than one hundred fifty (150)
days then remain on the current Lease Term, Landlord shall so advise Tenant
promptly, and either party, in the case described in clause (i) above, or
Landlord, in the cases described in clauses (ii) or (iii) above, within thirty
(30) days after any such damage or destruction shall have the right to terminate
this Lease by written notice to the other, as of the date specified in such
notice, which termination date shall be no later than thirty (30) days after the
date of such notice.
16.2 In the event of fire or other casualty damage, provided
this Lease is not terminated pursuant to the terms of this Section 16 and is
otherwise in full force and effect, and sufficient casualty insurance proceeds
in excess of the cost of adjusting the insurance claim and collecting the
insurance proceeds are available for application to such restoration or repair,
Landlord shall proceed diligently to restore the Demised Premises to
substantially its condition prior to the occurrence of the damage. Landlord
shall not be obligated to repair or restore any alterations, additions, fixtures
or equipment which Tenant may have installed (whether or not Tenant has the
right or the obligation to remove the same or is required to leave the same on
the Demised Premises as of the expiration or earlier termination of this Lease)
unless Tenant, in a manner satisfactory to Landlord, assures payment in full of
all costs as may be incurred by Landlord in connection therewith.
16.3 Landlord shall not insure the Building, the Demised
Premises, any improvements or alterations to the Demised Premises, or any
fixtures, equipment or other property of Tenant, all of which shall be the sole
responsibility of Tenant to insure as more fully set forth in Section 17. Tenant
shall, at its sole expense, insure the value of its leasehold improvements,
fixtures, equipment and personal property located in or on the Demised Premises,
for the purpose of providing funds to Landlord to repair and restore the Demised
Premises to substantially its condition prior to occurrence of the casualty
occurrence. If there are any such alterations, fixtures or additions and Tenant
does not assure or agree to assure payment of the cost of restoration or repair
as aforesaid, Landlord shall have the right to repair and restore the Demised
Premises to substantially the same condition as existed prior to the damage,
excepting such alterations, additions or fixtures.
16.4 The validity and effect of this Lease shall not be
impaired in any way by the failure of Landlord to complete repairs and
restoration of the Demised Premises or of the Building within one hundred and
fifty (150) days after commencement of the work, even if Landlord had in good
faith notified Tenant that the repair and restoration could be completed within
such period,
14
provided that Landlord proceeds diligently with such repair and restoration, and
provided further that if Landlord does elect to repair and restore following an
event of casualty and such work is not completed within two hundred and ten
(210) days from the date Landlord commences the work, Tenant shall have the
right to terminate this Lease by written notice to Landlord, upon which both
parties shall be relieved of any liabilities arising under this Lease to each
other, except such liabilities of Tenant as may have accrued prior to such
termination. In the case of damage to the Demised Premises which is of a nature
or extent that Tenant's continued occupancy is in the judgment of Landlord and
Tenant substantially impaired, then the Annual Fixed Rent and Additional Rent
otherwise payable by Tenant hereunder shall be equitably abated or adjusted for
the duration of such impairment, subject to the condition set forth in Section
16.5. Tenant shall be responsible to repair or replace all leasehold
improvements and all equipment, fixtures, inventory and other personal property
located in or on the Demised Premises, subject to Section 9 and to such other
conditions as Landlord may require.
16.5 At Tenant's sole cost and expense, Tenant shall maintain
a rental coverage endorsement or other comparable form of coverage as part of
its all-risk insurance policy. Tenant will receive an abatement of Annual Fixed
Rent to the extent of payments received by Landlord from the carrier providing
the rental coverage endorsement.
17. INSURANCE; INDEMNIFICATION OF LANDLORD; WAIVER OF
SUBROGATION.
17.1 (a) Tenant covenants and agrees to exonerate, indemnify,
defend, protect and save Landlord harmless from and against any and all claims,
demands, expenses, losses, suits and damages as may be occasioned by reason of:
(i) any accident or matter occurring on or about the Demised Premises caused or
suffered by Tenant, its agents, employees, invitees, contractors or guests,
causing injury to persons or damage to property (including, without limitation,
the Demised Premises), unless such accident or other matter resulted solely from
the gross negligence or intentional act or omission of Landlord or Landlord's
agents, contractors or employees; (ii) the failure of Tenant fully and
faithfully to perform the obligations and observe the conditions of this Lease;
and/or (iii) the negligence or otherwise tortious act of Tenant or anyone in or
about the Demised Premises on behalf of or at the invitation or right of Tenant.
(b) Tenant shall maintain the following in full force and
effect continuously throughout the Lease Term, at Tenant's sole cost, risk and
expense:
(i) insurance against loss or damage to
the Building and all other improvements now or hereafter located on the Demised
Premises by fire and such other casualties as may be included in the broadest
form of all-risk insurance from time to time available, in an amount equal to
the full insurance replacement value of the Building and improvements, the
policy to have attached thereto replacement cost, agreed amount and rental
coverage endorsements or comparable forms of coverage;
15
(ii) comprehensive general liability
insurance (including a contractual liability and fire legal liability insurance
endorsement) naming as an additional insured Landlord against claims for bodily
injury, death or property damage in amounts not less than Three Million Dollars
($3,000,000) (or such higher limits as may be determined by Landlord from time
to time) and business interruption insurance in an amount equal to Tenant's
gross income for twelve (12) months; and
(iii) boiler insurance, plate glass
insurance, and such other reasonable forms of insurance in such amounts as may
be required from time to time by Landlord or by any mortgagee.
All policies shall be issued by companies having a Best's financial rating of A
or better and a size class rating of XII (12) or larger or otherwise acceptable
to Landlord. At or prior to the Commencement Date, Tenant shall deposit the
policy or policies of such insurance, or certificates thereof, with Landlord and
shall deposit with Landlord renewals thereof at least fifteen (15) days prior to
each expiration. Said policy or policies of insurance or certificates thereof
shall have attached thereto an endorsement that such policy shall not be
canceled without at least thirty (30) days' prior written notice to Landlord
that no act or omission of Tenant shall invalidate the interest of Landlord
under said insurance and expressly waiving all rights of subrogation as set
forth below. At Landlord's request, Tenant shall provide Landlord with a letter
from an authorized representative of its insurance carrier stating that Tenant's
current and effective insurance coverage complies with the requirements
contained herein.
17.2 Each of the parties hereto releases the other, to the
extent of the releasing party's insurance coverage, from any and all liability
for any loss or damage covered by such insurance which may be inflicted upon the
property of such party even if such loss or damage shall be brought about by the
fault or negligence of the other party, its agents or employees; provided,
however, that this release shall be effective only with respect to loss or
damage occurring during such time as the appropriate policy of insurance shall
contain a clause to the effect that this release shall not affect said policy or
the right of the insured to recover thereunder. If any policy does not permit
such a waiver, and if the party to benefit therefrom requests that such a waiver
be obtained, the other party agrees to obtain an endorsement to its insurance
policies permitting such waiver of subrogation if it is available. If an
additional premium is charged for such waiver, the party benefiting therefrom
agrees to pay the amount of such additional premium promptly upon being billed
therefor.
17.3 This Section 17 shall expressly survive the expiration of
the Lease Term or earlier termination of the Lease.
18. INSPECTION; ACCESS; CHANGES IN BUILDING FACILITIES.
18.1 Landlord and its agents or other representatives shall be
permitted to enter the Demised Premises at reasonable times upon twenty-four
(24) hours' notice, except in a emergency
16
situation when no such notice shall be required (i) to examine, inspect and
protect the Demised Premises and the Building and (ii) during the last six (6)
months of the Lease Term, to show it to prospective tenants and to erect upon,
affix to any suitable part of the Land or exterior of the Building a notice or
signage for letting the Demised Premises or, subject to Section 6, selling the
Demised Premises.
18.2 Landlord shall have access to and use of all areas in the
Demised Premises as well as access to and through the Demised Premises for the
purpose of operation, maintenance, decoration and repair; provided, however,
that except in emergencies such access shall not be exercised so as to interfere
unreasonably with Tenant's use of the Demised Premises. Tenant shall permit
Landlord to install, use and maintain pipes, ducts and conduits within the
Building walls, bearing columns and ceilings of the building, provided that the
installation work is performed at such times and by such methods as will not
materially interfere with Tenant's use of the Building, materially reduce the
floor area thereof or materially and adversely affect Tenant's layout. Landlord
and Tenant shall cooperate with each other in the location of Landlord's and
Tenant's facilities requiring such access.
18.3 Subject to the other terms and conditions of this Lease,
Landlord reserves the right at any time, without incurring any liability to
Tenant therefor, to make such changes in or to the Building and the fixtures and
equipment thereof, as well as in or to the street entrances, halls, foyers,
passages, elevators, if any, and stairways thereof, as it may deem necessary or
desirable; provided that there shall be no change that materially detracts from
the character or quality of the Building.
19. DEFAULT. Any other provisions in this Lease notwithstanding, the
occurrence of any of the following shall be an event of default under this Lease
(each, an "Event of Default"): (i) Tenant fails to pay any installment of Fixed
Rent, Additional Rent or other sum payable by Tenant hereunder within five (5)
days after the same is due and payable under this Lease; (ii) Tenant fails to
observe or perform any other covenant or agreement of Tenant herein contained
and such failure continues after written notice given by or on behalf of
Landlord to Tenant for more than ten (10) days; provided, however, that if
Tenant is proceeding diligently to cure any such default but such cannot
reasonably be cured within said ten (10) day period, Tenant shall have such
additional amount of time to cure as is reasonably necessary; (iii) Tenant uses
or occupies the Demised Premises other than as permitted hereunder; (iv) Tenant
assigns or sublets, or purports to assign or sublet, the Demised Premises or any
part thereof other than in the manner and upon the conditions set forth herein;
(v) Tenant abandons or vacates the Demised Premises or without Landlord's prior
written consent, or Tenant removes or attempts to remove or manifests an
intention to remove any or all of Tenant's property from the Demised Premises
other than in the ordinary and usual course of business; (vi) Tenant files a
petition commencing a voluntary case, or has filed against it a petition
commencing an involuntary case, under the Federal Bankruptcy Code (Title 11 of
the United States Code), as now or hereafter in effect, or under any similar
law, or files or has filed against it a petition or answer in bankruptcy or for
reorganization or for an arrangement pursuant to any state bankruptcy law or any
similar state law, and, in the case of any such involuntary action, such action
shall not be
17
dismissed, discharged or denied within sixty (60) days after the filing thereof,
or Tenant consents or acquiesces in the filing thereof, (vii) a custodian,
receiver, trustee or liquidator of Tenant or of all or substantially all of
Tenant's property or of the Demised Premises shall be appointed in any
proceedings brought by or against Tenant and, in the latter case, such entity
shall not be discharged within sixty (60) days after such appointment or Tenant
consents to or acquiesces in such appointment; or (viii) Tenant shall generally
not pay Tenant's debts as such debts become due, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they become due. The notice and grace period provisions in
clauses (i) and (ii) above shall have no application to the Events of Default
referred to in clauses (iii) through (viii) above.
20. LANDLORD'S REMEDIES.
20.1 Upon the occurrence of any Event of Default, Landlord
at any time thereafter may at its option exercise any one or more of the
following remedies:
(a) Termination of Lease. Landlord may
terminate this Lease, by written notice to Tenant, without any right by Tenant
to reinstate its rights by payment of rent due or other performance of the terms
and conditions hereof. Upon such termination Tenant shall immediately surrender
possession of the Demised Premises to Landlord, and Landlord shall immediately
become entitled to receive from Tenant an amount equal to the aggregate of all
Fixed Rent and Additional Rent which then remains due to Landlord but unpaid by
Tenant.
(b) Reletting. With or without terminating this
Lease, as Landlord may elect, Landlord may re-enter and repossess the Demised
Premises, or any part thereof, and lease the Demised Premises or any part
thereof to any other person upon such terms as Landlord shall deem reasonable,
for a term within or beyond the term of this Lease; provided, that any such
reletting prior to termination shall be for the account of Tenant, and Tenant
shall remain liable for (i) all Annual Fixed Rent, Additional Rent and other
sums which would be payable under this Lease by Tenant in the absence of such
expiration, termination or repossession, less (ii) the net proceeds, if any, of
any reletting effected for the account of Tenant after deducting from such
proceeds all of Landlord's expenses, reasonable attorneys' fees and expenses,
employees' expenses, reasonable brokerage commissions and fees, reasonable
alteration costs, expenses of preparation for such reletting and all costs and
expenses, direct or indirect, incurred as a result of Tenant's breach of the
Lease. Landlord shall use commercially reasonable efforts to relet the Demised
Premises. If the Demised Premises are at the time of default sublet or leased by
Tenant to others, Landlord may, as Tenant's agent, collect rents due from any
subtenant or other tenant and apply such rents to the rent and other amounts due
hereunder without in any way affecting Tenant's obligation to Landlord
hereunder. Such agency, being given for security, is hereby declared to be
irrevocable.
(c) Acceleration of Rent. Landlord may declare
Fixed Rent and all items of Additional Rent (the amount thereof to be based on
historical amounts and Landlord's estimates for future amounts) for the entire
balance of the then current Lease Term immediately due and
18
payable, together with all other charges, payments, costs, and expenses payable
by Tenant as though such amounts were payable in advance on the date the Event
of Default occurred.
(d) Removal of Contents by Landlord. With
respect to any portion of the Demised Premises which is vacant or which is
physically occupied by Tenant, Landlord may remove all persons and property
therefrom, and store such property in a public warehouse or elsewhere at the
cost of and for the account of Tenant, without service of notice or resort to
legal process (all of which Tenant expressly waives) and without being deemed
guilty of trespass or becoming liable for any loss or damage which may be
occasioned thereby. Landlord shall have a lien for the payment of all sums
agreed to be paid by Tenant herein upon all Tenant's property, which lien is to
be in addition to Landlord's lien now or hereafter provided by law.
(e) Late Charge. In addition to all other
rights and remedies of Landlord, if an Event of Default shall occur, Landlord
shall have the right to charge a late payment penalty of five percent (5%) of
any amount owed to Landlord that is not paid within five (5) days of the date
when the same is due and payable under this Lease.
(f) SECTION 20.1(f) BELOW SETS FORTH WARRANTS OF
AUTHORITY FOR AN ATTORNEY TO CONFESS JUDGMENTS AGAINST TENANT. IN GRANTING THESE
WARRANTS OF AUTHORITY TO CONFESS JUDGMENTS AGAINST TENANT, TENANT HEREBY
KNOWINGLY, INTENTIONALLY, VOLUNTARILY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHTS TENANT HAS OR MAY HAVE TO PRIOR NOTICES AND AN OPPORTUNITY FOR HEARING
UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE
COMMONWEALTH OF PENNSYLVANIA. UPON THE EXPIRATION OF THE THEN CURRENT TERM OF
THIS LEASE OR THE EARLIER TERMINATION OR SURRENDER HEREOF AS PROVIDED IN THIS
LEASE, IT SHALL BE LAWFUL FOR ANY ATTORNEY OF ANY COURT OF RECORD IN THE
COMMONWEALTH OF PENNSYLVANIA TO APPEAR AS ATTORNEY FOR TENANT AS WELL AS FOR ALL
PERSONS CLAIMING BY, THROUGH OR UNDER TENANT AND TO SIGN AN AGREEMENT FOR
ENTERING IN ANY COMPETENT COURT AND THEREIN CONFESS JUDGMENT FOR THE RECOVERY BY
LANDLORD OF POSSESSION OF THE DEMISED PREMISES, FOR WHICH THIS LEASE SHALL BE
ITS SUFFICIENT WARRANT, WHEREUPON, IF LANDLORD SO DESIRES, A WRIT OF POSSESSION
OR OTHER APPROPRIATE WRIT UNDER THE RULES OF CIVIL PROCEDURE THEN IN EFFECT MAY
ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS; HOWEVER, IF SUCH
PROCEEDING IS TERMINATED AND THE POSSESSION OF THE DEMISED PREMISES REMAIN IN OR
BE RESTORED TO TENANT, LANDLORD SHALL HAVE THE RIGHT FOR THE SAME DEFAULT AND
UPON ANY SUBSEQUENT DEFAULT OR DEFAULTS, OR UPON THE TERMINATION OF THIS LEASE
UNDER ANY OF THE TERMS OF THIS LEASE TO BRING ONE OR MORE FURTHER AMICABLE
ACTION OR ACTIONS AS HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE DEMISED
PREMISES AND CONFESS JUDGMENT FOR THE
19
RECOVERY OF POSSESSION OF THE DEMISED PREMISES AS HEREINABOVE PROVIDED.
_________ TENANT
20.2 Proceedings. In any action of ejectment, Landlord shall
first cause to be filed in such action an affidavit made by it or someone acting
for it, setting forth the facts necessary to authorize the entry of judgment,
and, if a true copy of this Lease (and of the truth of the copy such affidavit
shall be sufficient evidence) be filed in such action, it shall not be necessary
to file the original as a warrant of attorney, any rule of Court, custom or
practice to the contrary notwithstanding. Tenant hereby releases to Landlord and
to any and all attorneys who may appear for Tenant all errors in said
proceedings and all liability thereof. If proceedings shall be commenced by
Landlord to recover possession under the Acts of Assembly and Rules of Civil
Procedure, either at the end of the term or upon the earlier termination of this
Lease, or for non-payment of rent or any other reason, Tenant specifically
waives the right to the three (3) months' notice and to the fifteen (15) or
thirty (30) days' notice required by the Landlord and Tenant Act of 1951, as the
same may be amended, and agrees that five (5) days' notice shall be sufficient
in either or any such case.
20.3 Survival of Tenant's Obligations. No expiration or
termination of this Lease Term pursuant to Section 20.1(a) above or by operation
of law or otherwise (except as expressly provided in this Lease), and no
repossession of the Demised Premises or any part thereof pursuant to Section
20.1(a) or (b) above or otherwise shall relieve Tenant of its liabilities and
obligations hereunder, all of which shall survive such expiration, termination
or repossession, and Landlord may, at its option, xxx for and collect all rent
and other charges due hereunder at any time as when such charges accrue.
20.4 Injunction. In the event of breach or threatened breach
by Tenant of any provision of this Lease, Landlord shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity in
addition to other remedies provided for herein.
20.5 Waiver of Redemption. Tenant hereby expressly waives any
and all rights of redemption granted by or under any present or future law in
the event this Lease is terminated, or in the event of Landlord obtaining
possession of the Demised Premises, or Tenant is evicted or dispossessed for any
cause, by reason of violation by Tenant of any of the provisions of this Lease.
20.6 Not Exclusive Right. No right or remedy herein conferred
upon or reserved to Landlord is intended to be exclusive of any other right or
remedy herein or by law provided, but each shall be cumulative and in addition
to every other right or remedy given herein or now or hereafter existing at law
or in equity or by statute.
20.7 Expenses. In the event that Landlord commences suit for
the repossession of the Demised Premises, for the recovery of rent or any other
amount due under the provisions of this Lease, or because of the breach of any
other covenant herein contained on the part of Tenant to be
20
kept or performed, and a breach shall be established, Tenant shall pay to
Landlord all expenses incurred in connection therewith, including reasonable
attorneys' fees.
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. If Tenant defaults in
the making of any payment or in the doing of any act herein required to be made
or done by Tenant, then Landlord may, but shall not be required to, make such
payment or do such act, and charge the amount of Landlord's expense, with
interest accruing and payable thereon at the Default Rate as of the date of the
expenditure by Landlord or as of the date of payment thereof by Tenant,
whichever is higher, from the date paid or incurred by Landlord to the date of
payment thereof by Tenant; provided, however, that nothing herein contained
shall be construed or implemented in such a manner as to allow Landlord to
charge or receive interest in excess of the maximum legal rate then allowed by
law. Such payment and interest shall constitute Additional Rent hereunder due
and payable with the next monthly installment of Fixed Rent; but the making of
such payment or the taking of such action by Landlord shall not operate to cure
such default by Tenant or to estop Landlord from the pursuit of any remedy to
which Landlord would otherwise be entitled.
22. ESTOPPEL CERTIFICATE. Tenant shall, at any time and from time to
time, at the request of Landlord or any mortgagee, upon ten (10) business days'
notice, execute, acknowledge and deliver to Landlord a statement in the form of
Exhibit "B" attached hereto and hereby made a part of this Lease or such other
reasonable form supplied by Landlord, it being intended that any such statement
delivered pursuant hereto may be relied upon by others with whom Landlord may be
dealing. Tenant hereby appoints Landlord as Tenant's attorney-in-fact to execute
any such estoppel certificates in the event Tenant does not execute and return
such certificates within the time period set forth above.
23. HOLDING OVER. If Tenant retains possession of the Demised Premises
or any part thereof after the termination of this Lease or expiration of the
Lease Term or otherwise in the absence of any written agreement between Landlord
and Tenant concerning any such continuance of the term, Tenant shall pay
Landlord (i) as agreed liquidated damages for such holding over alone, an
amount, calculated on a per diem basis for each day of such unlawful retention,
equal to the greater of (a) one hundred fifty percent (150%) of the Annual Fixed
Rent, or (b) the established market rental for the Demised Premises, for the
time Tenant thus remains in possession, plus, in each case, all Additional Rent
and other sums payable hereunder, and (ii) all other damages, costs and expenses
sustained by Landlord by reason of Tenant's holding over. Without limiting any
rights and remedies of Landlord resulting by reason of the wrongful holding over
by Tenant, or creating any right in Tenant to continue in possession of the
Demised Premises, all Tenant's obligations with respect to the use, occupancy
and maintenance of the Demised Premises shall continue during such period of
unlawful retention.
24. SURRENDER OF DEMISED PREMISES. Tenant shall, at the expiration or
earlier termination of the Lease Term, promptly surrender the Demised Premises
in good order and condition and in conformity with the applicable provisions of
this Lease, excepting only reasonable wear and tear and damage caused by insured
casualty.
21
25. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT.
25.1 Subject to the terms and conditions of Section 25.2, this
Lease and the estate, interest and rights hereby created are subordinate to any
mortgage now or hereafter placed upon the Building or the Land or any estate or
interest therein, including, without limitation, any mortgage on any leasehold
estate, and to all renewals, modifications, consolidations, replacements and
extensions of same as well as any substitutions therefor. Tenant agrees that in
the event any person, firm, corporation or other entity acquires the right to
possession of the Building or the Land, including any mortgagee or holder of any
estate or interest having priority over this Lease, Tenant shall, if requested
by such person, firm, corporation or other entity, attorn to and become the
tenant of such person, firm, corporation or other entity, upon the same terms
and conditions as are set forth herein for the balance of the Lease Term.
Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its
mortgage to this Lease, without Tenant's consent, by notice in writing to
Tenant, and thereupon this Lease shall be deemed prior to such mortgage without
regard to their respective dates of execution and delivery, and in that event,
such mortgagee shall have the same rights with respect to this Lease as though
it had been executed prior to the execution and delivery of the mortgage.
Tenant, if requested by Landlord, shall execute any such instruments in
recordable form as may be reasonably required by Landlord in order to confirm or
effect the subordination or priority of this Lease, as the case may be, the
rights of Tenant set forth in Section 25.2, and the attornment of Tenant to
future landlords in accordance with the terms of this Section 25.
25.2 (a) Provided this Lease shall at all times be in full
force and effect and provided further that there shall exist no Event of Default
by Tenant hereunder, the right of possession by Tenant to possess and quietly
enjoy the Demised Premises and any or all of Tenant's rights under this Lease
shall not be affected in any way or disturbed by any lender doing business with
Landlord in the exercise of any such lender's rights under any formal agreements
between such lender and Landlord. Tenant shall not be named as a party defendant
to any foreclosure of any lien of any mortgage for the purpose of terminating
this Lease, and Tenant shall not, by any such foreclosure, be in any other way
foreclosed from its rights under this Lease.
(b) In the event that any such lender or its successors
or assigns comes into possession of the Demised Premises or acquires the
leasehold interest of Landlord by foreclosure of any mortgage between any such
lender and Landlord, or by proceedings on any note executed by Landlord in favor
of any such lender or otherwise, this Lease shall not be terminated by any such
foreclosure or proceedings; and this Lease shall continue in full force and
effect upon Tenant's attornment, as provided herein, as a direct lease between
Tenant and any such lender upon the same terms, covenants, conditions and
agreements set forth in this Lease.
(c) In the event that the Demised Premises or Landlord's
leasehold interest therein is sold or otherwise disposed of pursuant to any
right or power contained in any mortgage or any note between any such lender and
Landlord, or as a result of proceedings thereon, this Lease shall not be
terminated or affected thereby, and the purchaser of the Demised Premises or of
22
Landlord's leasehold interest therein or any person or entity acquiring title
thereto shall so acquire it, subject to this Lease; and this Lease shall
continue in full force and effect upon Tenant's attornment, as provided herein,
as a direct lease between Tenant and any party acquiring title to Landlord's
leasehold interest therein, as aforesaid, upon the same terms, covenants
conditions and agreements set forth in this Lease.
26. BROKERS. Each party represents and warrants to the other that it
has not made any agreement or taken any action which may cause anyone to become
entitled to a commission as a result of the transactions contemplated by this
Lease, and each will indemnify, defend and hold harmless the other from any and
all claims, actual or threatened, for compensation by any such third person by
reason of such party's breach of its, his, her or their representation or
warranty contained in this Section 26. This Section 26 shall survive the
expiration of the Lease Term or earlier termination of this Lease.
27. NOTICES. All notices or other communications hereunder shall be in
writing and shall be deemed to have been given (i) if hand delivered or sent by
an express mail or delivery service or by national overnight courier, if and
when delivered to the respective parties at the below addresses (or at such
other address as a party may hereafter designate for itself by notice to the
other party as required hereby), or (ii) if mailed, then on the third business
day following the date on which such communication is deposited in the United
States mails, by first class or certified mail, return receipt requested,
postage prepaid, and addressed to the respective parties at the below addresses
(or at such other address as a party may hereafter designate for itself by
notice to the other party as required hereby). All notices and communications to
Tenant may also be given by leaving same at the Demised Premises during normal
business hours.
27.1 If to Landlord:
The Electronics Boutique, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: President
27.2 If to Tenant:
Electronics Boutique of America Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: President
28. MISCELLANEOUS.
28.1. Successors and Assigns. Subject to Section 13, the
obligations of this Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors
23
and assigns; provided that Landlord and each successive owner of the Building
and/or the Land shall be liable only for obligations accruing during the period
of its ownership or interest in the Building and from and after the transfer by
Landlord or such successive owner of its ownership or other interest in the
Building, Tenant shall look solely to the successors in title for the
performance of Landlord's obligations hereunder arising thereafter. Any
successor of Landlord hereunder shall provide Tenant with a notice evidencing
that such successor Landlord has assumed all of Landlord's obligations under
this Lease.
28.2 Waivers. No delay or forbearance by Landlord in
exercising any right or remedy hereunder or in undertaking or performing any act
or matter which is not expressly required to be undertaken by Landlord shall be
construed respectively, to be a waiver of Landlord's rights or to represent any
agreement' by Landlord to undertake or perform such act or matter thereafter.
28.3 Consent to Exclusive Jurisdiction; Waiver of Trial by
Jury. Tenant hereby consents to the exclusive jurisdiction of the Common Pleas
Court of Xxxxxxx County, Pennsylvania and/or the United States Court for the
Eastern District of Pennsylvania in any and all actions or proceedings arising
under this Lease, and irrevocably agrees to service of process in accordance
with Section 25 above. Landlord and Tenant agree to waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other on any matter whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's
use, possession and/or occupancy of the Demised Premises, and/or any claim of
injury or damage and any emergency or any other statutory remedy. It is further
mutually agreed that in the event Landlord commences any summary proceeding for
non-payment of rent, Tenant will not interpose any counterclaim of whatever
nature or description in any such proceeding.
28.4 Limitation of Landlord's Liability. Tenant shall look
solely to the Demised Premises and rents derived therefrom for enforcement of
any obligation hereunder or by law assumed or enforceable against Landlord, and
no other property or other assets of Landlord shall be subjected to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies or with respect to this Lease, the relationship of landlord and tenant
hereunder or Tenant's use, possession and/or occupancy of the Demised Premises.
28.5 Time of the Essence. All times, wherever specified herein
for the performance by Landlord or Tenant of their respective obligations
hereunder, are of the essence of this Lease.
28.6 Severability. Each covenant and agreement in this Lease
shall for all purposes be construed to be a separate and independent covenant or
agreement. If any provision in this Lease or the application thereof shall to
any extent be invalid, illegal or otherwise unenforceable, the remainder of this
Lease, and the application of such provision other than as invalid, illegal or
unenforceable, shall not be affected thereby; and such provisions in this Lease
shall be valid and enforceable to the fullest extent permitted by law.
24
28.7 Quiet Enjoyment. Provided Tenant is not in default of any
of the terms and conditions of this Lease, Tenant shall be entitled to quiet
enjoyment of the Demised Premises without disturbance or hindrance by Landlord
or anyone claiming under or through Landlord.
28.8 Amendment and Modification. This Lease, including all
Exhibits hereto, each of which is incorporated in this Lease, contains the
entire agreement between the parties hereto, and shall not be amended, modified
or supplemented unless by agreement in writing signed by both Landlord and
Tenant.
28.9 Headings and Terms. The title and caption headings and
table of contents of this Lease are for convenience of reference only and shall
not in any way be utilized to construe or interpret the agreement of the parties
as otherwise set forth herein. The term "Landlord" and term "Tenant" as used
herein shall mean, where appropriate, all persons acting by or on behalf of the
respective parties, except as to any required approvals, consents or amendments,
modifications or supplements hereunder when such terms shall only mean the
parties originally.
28.10 No Joint Venture. Nothing contained in this Lease shall
be construed to create a partnership, joint venture or other association between
Tenant and Landlord.
28.11 Counterparts. This Lease may be executed in counterparts
each of which shall be deemed an original and all of which, when taken together,
shall constitute one and the same agreement.
25
IN WITNESS WHEREOF, the parties here to have caused this Agreement of
Lease to be executed on the day and year first above written.
LANDLORD:
[Corporate Seal] THE ELECTRONICS BOUTIQUE, INC.
Attest: By:
------------------------ ---------------------------
Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxxxxx
Assistant Secretary President
TENANT:
[Corporate Seal] ELECTRONICS BOUTIQUE OF AMERICA INC.
Attest: By:
------------------------ ---------------------------
Xxxx X. Xxxxxxxxxx Xxxxxx Xxxxxxxxx
Secretary President
26
EXHIBIT "A"
LEGAL DESCRIPTION OF LAND
Landlord: ____________________
Tenant: ______________________
X-0
XXXXXXX "X"
FORM OF
TENANT ESTOPPEL CERTIFICATE AND STATEMENT
ELECTRONICS BOUTIQUE OF AMERICA INC.
(Tenant)
The undersigned (jointly and severally if more than one)
hereby represents, warrants and certifies to
____________________________________ (the "Landlord") and/or __________
("Mortgagee") that is the tenant and present occupant (the "Tenant") of certain
premises (the "Demised Premises") located at ______________________________ and
that:
1. Basic Lease Terms - The Demised Premises are more specifically
described in, and are leased under the provisions of, a lease agreement
(the "Lease"), the basic terms of which are described below:
1.1 Demised Premises: ____________;
1.2 Rentable Square Feet of Demised Premises: __________
1.3 Date of Lease: _________________________________
1.4 Commencement Date: ___________________________
1.5 Expiration Date: ________________________________
1.6 Current Annual/Monthly Fixed Rent: $_____ / $_______
1.7 Current Monthly Additional Rent: $________________
1.8 Total Monthly Rent As of : $___________________
1.9 Security Deposit: NONE
1.10 Total Rent Is Paid Through: _______________________
2. Modifications. The Lease contains all of the understandings
and agreements between Tenant and Landlord, and is in
existence in full force and effect, without modification,
addition, extension, or renewal on the date hereof (or is in
full force and effect modified as indicated below), except as
indicated below:
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
Landlord________________________
Tenant________________________
B-1
3. Acceptance of Demised Premises. Tenant has accepted possession
of the Demised Premises and is now in possession of same, and
the improvements and space required to be furnished according
to the Lease have been fully delivered by Landlord and
accepted by Tenant.
4. Options. There are no options, rights of first refusal,
options to terminate, exclusive business rights, or other
rights in Tenant to extend or renew the term of the Lease or
to expand or otherwise modify the Demised Premises, except
as-indicated below:
5. Commencement of Rental Obligation. Tenant's obligation to pay
rent commenced as of May 31, 1998.
6. Rent Payment. No rent has been paid by Tenant in advance under
the Lease, except for the Total Monthly Rent, as described
above, that became due for the current month.
7. No Tenant Default. Tenant is not in default under the Lease
and is current in the payment of any and all charges required
to be paid by Tenant, except as indicated below:
--------------------------------------------------.
--------------------------------------------------.
--------------------------------------------------.
8. Subordination, Non-Disturbance and Attornment. In the event
that Landlord's interest is conveyed or Landlord otherwise
relinquishes possession of the Premises to a third party,
including but not limited to any mortgagee or successor in
interest to any such mortgagee, the undersigned agrees to
attorn to such third party and to recognize such third party
as landlord. Subject to the terms and conditions of Section
25.2 of the Lease, Tenant agrees to subordinate to any
mortgagee or successor in interest to any such mortgagee as
more fully set forth in the Lease. Any such attornment or
subordination shall be effective and self-operative without
the execution of any other instrument by either party hereto
but, upon the request of such landlord, the undersigned shall
execute and deliver an instrument confirming such attornment
or subordination.
9. No defense. Tenant has no defenses, set-offs, basis for
withholding of rent, claims or counterclaims against the
Landlord for any failure of performance of any of the terms of
the Lease, nor to the best of Tenant's knowledge are there
defaults or breaches by Landlord under the Lease, including,
without limitation, defaults relating to the design, condition
and tenant uses of the Demised Premises.
B-2
10. No Prior Assignment or Subletting. Tenant has not assigned,
pledged, mortgaged or otherwise transferred or encumbered the
Lease or the rental payments thereunder, nor sublet all or any
part of the Premises and is not presently permitting the same
to be occupied or used by anyone other than Tenant except as
indicated below:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
11. Use of Premises. Tenant has not accumulated, recycled,
stored, treated, spilled, emitted, leaked or disposed of any
hazardous, toxic or polluting substances or wastes at the
property. Tenant has not received notice from any governmental
agency that it may be responsible for clean-up of the property
or surrounding areas pursuant to the Federal Comprehensive
Environmental, Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq., the Federal Water Pollution
Control Act (33 U.S. C.A. Section 1151 et seq.), the Clean
Water Act of 1977 (33 U.S.C.A. Section 1251 et seq.), or the
regulations promulgated thereunder (if applicable), or any
other federal, state or local environmental law, regulation or
ordinance.
The undersigned makes this statement with the understanding
that Landlord and any others with which Landlord may be dealing intend to rely
upon this Certificate and Statement and the undersigned agrees that they may so
rely.
Dated: _______________, 199_
ELECTRONICS BOUTIQUE OF AMERICA INC.
By:
------------------------------
Name:
Title:
B-3
