SECOND AMENDMENT TO LEASE AGREEMENT
BETWEEN
LIBERTY LANDING ASSOCIATES
and
PRC-PHILADELPHIA, INC.
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TABLE OF CONTENTS
1. Premises...........................................................4
2. Term...............................................................5
3. Rent...............................................................5
4. Taxes and Other Impositions........................................8
5. Insurance.........................................................10
6. Waiver of Subrogation.............................................11
7. Care, Improvement and Restoration of the Premises.................11
8. Landlord's Right of Entry.........................................12
9. Fire and Other Casualty...........................................13
10. Net Lease.........................................................13
11. Utility Charges...................................................13
12. No Services by Landlord...........................................13
13. Governmental Regulations..........................................14
14. Use of Premises...................................................14
15. Environmental Matters.............................................15
16. Mechanics' Liens, etc.............................................16
17. Indemnification and Release of Landlord...........................17
18. Quiet Enjoyment...................................................18
19. Condemnation......................................................18
20. Assignment and Subletting.........................................19
21. Curing Tenant's Defaults..........................................20
22. Condition of Title and of Premises................................20
23. Surrender.........................................................20
24. Defaults - Remedies...............................................21
25. Grace Period and Notice of Default................................23
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26. Brokers..........................................................23
27. Captions.........................................................24
28. Entire Agreement.................................................24
29. Interpretation...................................................24
30. Memorandum of Lease..............................................24
31. Consent..........................................................24
32. Representations and Warranties of Landlord.......................24
33. Time Periods.....................................................25
34. Right of First Refusal...........................................25
35. Release..........................................................26
36. Leasehold Mortgages..............................................26
37. Landlord's Joinder...............................................30
38. Estoppel Certificates............................................31
39. Notices..........................................................32
40. Attornment.......................................................33
41. Partial Invalidity...............................................33
42. Counterparts.....................................................33
43. PLC Agreement....................................................34
44. Exclusive Efforts................................................34
45. Efforts to Agreement to Cooperate and Assist.....................34
46. Definitions......................................................34
47. Option to Purchase...............................................37
48. Amendment and Restatement of Lease Agreement.....................41
Exhibit "A"
First Amendment to Corporate Guaranty
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SECOND AMENDMENT TO LEASE AGREEMENT
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THIS SECOND AMENDMENT TO LEASE AGREEMENT is made as of the 31st day of July,
1996, by and between LIBERTY LANDING ASSOCIATES, a Pennsylvania general
partnership ("Landlord") and PRC-PHILADELPHIA, INC., a Pennsylvania
corporation ("Tenant")
WITNESSETH:
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WHEREAS, Landlord and Tenant have entered into that certain Lease
Agreement dated December 14, 1993 (the "Lease Agreement"), which Lease
Agreement set forth the terms and conditions of Tenant's leasing of Landlord's
real property situate in Philadelphia, Pennsylvania; and
WHEREAS, Landlord and Tenant have entered into that certain First
Amendment to Lease Agreement dated July 31, 1996 (the "First Amendment to
Lease Agreement"), which First Amendment to Lease Agreement amended certain of
the terms and conditions of the Lease Agreement by extending the Preliminary
Term for up to three (3) years on the terms and conditions as more fully set
forth therein; and
WHEREAS, Landlord and Tenant desire to amend the Lease Agreement in
accordance with the terms and conditions of this Second Amendment to Lease
Agreement such that, upon the "Principal Term Commencement Date" (as
hereinafter defined), the terms and conditions of this Second Amendment to
Lease Agreement shall amend, restate, replace and supersede the terms and
conditions of the Lease Agreement and the First Amendment to Lease Agreement.
NOW, THEREFORE, the parties hereto, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, do covenant and agree as follows:
1. Premises.
(a) Landlord does hereby demise and let the Premises unto Tenant, and
Tenant does hereby hire and lease the Premises from Landlord, for the term and
upon the conditions and covenants set forth herein.
(b) The "Premises" shall mean all that certain lot or piece of ground
situate in the 1st ▇▇▇▇ of the City of Philadelphia described according to a
Survey and Plan of Property made for Sheet Metal Workers' Local No. 19 by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Land Surveyor, No. 786A dated September 9, 1993, last
revised September 28, 1993, as more fully described by metes and bounds on
Exhibit "A" attached hereto and made a part hereof, together with all
buildings and other improvements situate thereon as of the date of the Lease
Agreement and on the date of this Second Amendment to Lease Agreement
(including, without limitation, the pier structures now situate thereon), and
together with all appurtenances thereto (including, without limitation, the
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easements appurtenant thereto granted and created by that certain Cross
Easement Agreement dated the 25th day of September, 1989, as recorded in the
Department of Records in and for the City of Philadelphia in Deed Book FHS
1540, at page 321 on January 22, 1990 and the easements appurtenant thereto
granted and created by that certain Easement Agreement dated as of the 14th
day of December, 1993 as recorded in the Department of Records in and for the
City of Philadelphia in Deed Book VCS 548, at page 509 on December 29, 1993
and all other easements, rights of way and other rights and benefits relating
to the aforesaid tract or piece of land, and together with all rights, title
and interest of Landlord in and to any land lying in the bed of any street,
opened or proposed, adjoining the aforesaid tract or piece of land.
2. Term.
(a) Principal Term. Tenant shall have the right, at Tenant's sole
option, to cause the principal term ("Principal Term") of this Lease to
commence by Tenant (as Optionee under the terms of that certain Option
Agreement dated July 31, 1996 between Landlord and Tenant, said Option
Agreement being hereinafter called the "Option Agreement") giving written
notice (the "Principal Term Commencement Notice") to Landlord (as Optionor)
that Tenant has exercised the Option to amend the Lease Agreement pursuant to
the terms of the Option Agreement. If Tenant gives a Principal Term
Commencement Notice to Landlord, the Principal Term shall commence on the
"Principal Term Commencement Date" which shall be thirty (30) days after the
date on which Tenant has given to Landlord the Principal Term Commencement
Notice; provided that such Principal Term Commencement Date shall occur on the
first day of the next following month after thirty (30) days have elapsed from
the giving of the Principal Term Commencement Notice. For example, if Tenant
delivers the Principal Term Commencement Notice on February 15, 1998, then the
Principal Term Commencement Date shall occur on April 1, 1998. The Principal
Term shall end on the date which is ten (10) years from the Principal Term
Commencement Date.
(b) Extension Options. (i) Provided that Tenant is not then in
default of its obligations under this Lease (subject to the notice of default
and cure provisions set forth in Section 25 below), Tenant shall have the
right, at Tenant's sole option, to extend the Principal Term for five
successive periods ("Extension Periods") of five years each, upon the same
terms, provisions and conditions as are in effect during the Principal Term.
If Tenant desires to extend the Principal Term for an Extension Period, Tenant
may do so only by giving written notice thereof to Landlord ("Extension
Notice") at least 12 months prior to the date on which the preceding Principal
Term or Extension Period would otherwise end.
3. Rent.
(a) Rent During the Principal Term. From and after the Principal
Term Commencement Date and continuing through the Principal Term and any
Extension Periods, Tenant shall pay to Landlord rent ("Principal Term Rent")
as follows:
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(A) If no gambling facility is operating on the Premises, Tenant
shall pay to Landlord annual rent in the amount of Three Million Five Hundred
Thousand Dollars ($3,500,000.00) per year.
(B) If and for so long as there is no more than a single license
in effect for the operation of a gambling facility on the Premises, the Tenant
shall pay to the Landlord as annual rental the greater of (i) an amount equal
to 4.5% of the annual Net Gaming Win (as defined below) derived from the
Premises; or (ii) the sum of Three Million Five Hundred Thousand Dollars
($3,500,000.00).
(C) If and for so long as there are two or more licenses in
effect for the operation of gambling facilities on the Premises, the Tenant
shall continue to pay Landlord the annual rent as set forth in Paragraph
3(a)(B) above, and the New Gaming Company (as hereinafter defined) as a
sublessee, licensee or other occupant of the Premises, shall pay to the
Landlord as annual rental the greater of (i) an amount equal to 4.5% of the
annual Net Gaming Win derived from the Premises; or (ii) the sum of Three
Million Five Hundred Thousand Dollars ($3,500,000.00). With respect to a
second gambling facility located on the Premises and operated by New Gaming
Company, any annual percentage rent payments agreed upon by Tenant and New
Gaming Company which are in excess of 4.5% of the annual Net Gaming Win for
the second gaming site on the Premises, plus any annual fixed rent payments
for the second gambling facility on the Premises which are in excess of Three
Million Five Hundred Thousand Dollars ($3,500,000.00), shall be paid directly
to and belong exclusively to Tenant at the time such payments are paid.
(D) The portion of the Principal Term Rent payable pursuant to
clause (ii) of subsection 3(a)(B) and clause (ii) of subsection 3(a)(C) is
herein called the "Fixed Rent". The portion of the Principal Term Rent
payable pursuant to clause (i) of subsection 3(a)(B) and clause (i) of
subsection 3(a)(C) is herein called "Percentage Rent".
(E) The Fixed Rent shall be payable by the Tenant to the Landlord
in monthly installments on the first day of each month, in advance, commencing
on the Principal Term Commencement Date; and the Percentage Rent shall be paid
(within thirty (30) days after the end of the quarter) at such time as the
"Net Gaming Win" (as hereinafter defined) for each quarter of a Lease Year
exceeds the sum of $19,444,445.00. To the extent that the Net Gaming Win is
less than $19,444,445.00 in any quarter, then a credit for such quarter shall
be carried over to future quarters Percentage Rent only within that Lease
Year. No credits for Percentage Rent shall be carried forward beyond the then
current Lease Year. An example of the calculation is attached as Schedule
3(a)(E).
(F) If the Landlord is required to obtain a license ("Landlord
Gambling License") to permit the operation by Tenant of a gambling facility on
the Premises by reason of the inclusion of the provision in this Lease
Agreement for the payment of Percentage Rent based upon the Net Gaming Win,
and if the Landlord does not obtain a Landlord Gambling License prior to or
contemporaneously with such time as Tenant obtains a gaming license or obtains
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a finding of suitability for a gaming license (if a finding of suitability is
required under Pennsylvania law), whichever first occurs, then the obligation
of the Tenant to pay Percentage Rent shall be deferred for so long as the
Premises are used (or are intended to be used) for the operation of a gambling
facility until such time, if any, as Landlord obtains the required Landlord
Gambling License. At such time, if any, as Landlord obtains the Landlord
Gaming License, the deferred and accrued Percentage Rent shall be then payable
to Landlord. If Landlord is required to obtain a Landlord Gambling License,
Landlord agrees that it will use diligent efforts to obtain the Landlord
Gambling License. If Landlord is not able to obtain a Landlord Gambling
License, Landlord may assign its interest in this Lease to an entity which has
or can obtain a Landlord Gambling License within a reasonable period of time
(but in no event in excess of six months). If Tenant is unable to obtain a
license and other approvals (collectively, "Tenant's Gambling License") to
permit the operation by Tenant of a gambling facility on the Premises, and
such failure to obtain the Tenant's Gambling License is for reasons beyond the
reasonable control of Tenant, then Tenant shall have the right to cancel this
Lease by giving written notice to Landlord within sixty (60) days after Tenant
receives a written notification from the applicable government authority that
Tenant will not receive the Tenant's Gambling License.
(G) The term "Net Gaming Win" shall mean the total of all cash
and property (including checks received and collected) received from the
operation of one or more gambling facilities (as the result of gambling
activities on the Premises, but excluding all proceeds from admissions
revenues), minus the total of all cash paid out to patrons as winnings, with
no deductions for taxes or other operating expenses.
(H) The term "gambling facility" shall mean a gambling casino
whether located on a boat, barge or otherwise on or about the Premises.
(I) Within thirty (30) days following each month of each Lease
Year, Tenant shall mail to Landlord a statement showing the Net Gaming Win
derived from the Premises during the preceding month.
(J) If at any time during the Principal Term the Premises are not
used for the operation of any gambling facility, then during such period of
time, the term "Net Gaming Win" shall be deemed replaced in this Lease
Agreement with the term "Gross Receipts" for the purpose of computing
Percentage Rent. The term "Gross Receipts" shall mean the aggregate of all
gross sales from all business conducted upon or from the Premises. Such sales
shall include, but shall not be limited to, the amounts received from the sale
of goods, wares, warranties and merchandise and for repairs or other services
performed on or from the Premises, together with the amount of all orders
taken or received at the Premises, whether such orders be filled therefrom or
elsewhere, and shall include sales made from vending devices and amusement
devices in or about the Premises. Cash refunds to purchasers or allowances
made on merchandise claimed to be defective or unsatisfactory shall be
deducted from Gross Receipts to the extent that same were previously included
in Gross Receipts; and there shall be deducted from Gross Receipts the sales
price of merchandise returned by customers for exchange, provided that the
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sales price of merchandise delivered to the customer in exchange shall be
included in Gross Receipts. Gross Receipts shall not include any sales, use
or gross receipts tax imposed by any federal, state, municipal, or other
governmental authority directly on sales and which must be paid by Tenant,
whether or not collected from its customers. No franchise or capital stock
tax and no income, occupation or similar tax or license fee based upon income,
sales or profits shall be deducted from Gross Receipts.
(K) Tenant shall retain all relevant records necessary for
determining Net Gaming Win and Gross Receipts for at least three (3) years.
The Landlord may cause an audit to be made of Tenant's records pertaining to
the determination of Net Gaming Win and Gross Receipts. Such records shall be
available at Tenant's main business office during normal business hours upon
at least 10 days prior written notice by Landlord. Said audit shall be at the
expense of Landlord unless the same shall indicate that Tenant has underpaid
Percentage Rent for the period of the audit by an amount in excess of three
percent (3%), in which event the Tenant shall bear the reasonable expense of
said audit. All records furnished Landlord shall be confidential except that
Landlord may furnish copies to any actual or potential lender or purchaser of
the Landlord or of all or part of the Premises.
(L) The term "New Gaming Company" shall mean an entity, other
than Tenant or a Tenant Affiliate, which obtains a gaming license for a
portion of the Premises and which utilizes (as a sublessee, licensee or other
occupant) a portion of the Premises as a gambling facility. New Gaming
Company shall not include any person or entity engaged in any manner by Tenant
or a Tenant Affiliate to manage or operate a gambling facility for which
Tenant or a Tenant Affiliate is the authorized gaming licensee.
4. Taxes and Other Impositions.
(a) Impositions During the Principal Term. Tenant shall pay
throughout the Principal Term, as additional rent hereunder, at least thirty
(30) days before any fine, penalty, interest or cost may be added thereto for
the non-payment thereof, but in any event by the due date thereof, the
following (all of which are herein collectively called "impositions"):
(i) all levies, taxes (including payments required to be made in
lieu of taxes), assessments, water and sewer rents and charges, liens, license
and permit fees, and charges for public utilities imposed, assessed or charged
on or with respect to the Premises by any federal, state, municipal or other
authority ("Governmental Authority") or under any law, ordinance, or
regulation of any Governmental Authority ("Law");
(ii) any assessments, charges, levies or other impositions
imposed, assessed or charged on or with respect to the Premises pursuant to
the terms and provisions of any agreement, covenant, easement, restriction,
declaration or other matter now of record (all such terms and provisions
referred to in this subsection (ii) being herein collectively called "Recorded
Agreement"); and
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(iii) all other charges, imposts or burdens of whatsoever kind
and nature, whether or not particularized by. name, and whether general or
special, ordinary or extraordinary, foreseen or unforeseen, which at any time
during the term of this Lease may be created, levied, assessed, confirmed,
adjudged, imposed or charged upon or with respect to the Premises or any
improvements made thereto, or on any part of the foregoing or any
appurtenances thereto, or upon or with respect to this Lease or the rent paid
or payable hereunder or amounts paid or payable by any subtenants or other
occupants of the Premises, or upon or with respect to the leasing, operation,
use or occupancy of the Premises, or upon or with respect to this transaction
or any documents to which Tenant is a party or successor in interest, or
against Landlord because of Landlord's estate or interest in this Lease or the
Premises, by any Governmental Authority, or under any Law, including, among
others, all special tax bills and general, special or other assessments and
liens or charges made on local or general improvements or under any
governmental or public power or authority whatsoever and transit taxes, taxes
based upon gross receipts of rent or sales taxes applicable to the gross
receipt of rent, and personal property taxes imposed upon the fixtures,
machinery, equipment, apparatus, appurtenances, furniture and other personal
property used in connection with the Premises.
Notwithstanding the foregoing, if any imposition shall be created, levied,
assessed, adjudged, imposed, charged, or become a lien with respect to a
period of time which commences before or ends after the commencement and
expiration dates, respectively, of the Principal Term, then Tenant shall only
be required to pay that proportion of such imposition which is equal to the
proportion of said period which falls within the Principal Term, except that
if any imposition is levied or assessed with respect to a period of time which
commences before or ends after the commencement and expiration dates,
respectively, of the Principal Term, but is due and payable in whole or in
part during the Principal Term, Tenant shall be required to pay all
installments of such imposition which are payable during the Principal Term.
If Tenant is permitted to pay (by the assessing and collecting authorities or
entities and by the holders of any mortgages or other liens upon the Premises)
and elects to pay any imposition in installments, Tenant shall nevertheless
pay all unpaid installments thereof prior to the expiration or sooner
termination of the Principal Term, whether or not such installments are then
due or payable. The term "impositions", shall not include any net income or
excess profits taxes assessed against Landlord, or any corporation capital
stock and franchise taxes imposed upon Landlord and shall not include the
current City of Philadelphia Business Privilege Tax; provided, however, that,
if at any time prior to the expiration of the Principal Term or any Extended
Period, any net income tax, assessment, levy or charge shall be imposed upon
Landlord or the Premises in lieu of any other tax or other charge included in
clause (i) or clause (iii) of this subsection 4(b), and shall be measured by
or based upon net income or profits derived from real estate (as distinguished
from net income or profits generally), then such new tax, assessment, levy or
charge shall be included in "impositions" to the extent that such new tax,
assessment, levy or charge would be payable if the Premises were the only
property of Landlord subject thereto and the income and profits received by
Landlord from the Premises were the only income and profits of Landlord.
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(c) Use and Occupancy Tax. Tenant shall pay, through the Principal
Term, the Philadelphia Realty Use and Occupancy Tax to the extent that the
same shall be due and payable pursuant to the provisions of applicable law.
(d) Contest. Tenant shall furnish Landlord, by the due date thereof,
evidence of the payment of all impositions. Tenant may, without postponement
of payment, bring proceedings for contesting the validity or amount of any
imposition, or to recover payments therefor, and Tenant agrees to save
Landlord harmless from all costs and expenses in connection therewith.
Landlord shall cooperate with Tenant with respect to such proceedings to the
extent required by applicable law, but all costs, fees and expenses incurred
in connection with such proceedings shall be borne by Tenant. Tenant will
give Landlord written notice of Tenant's intention to make any such contest.
5. Insurance.
(a) Insurance During Principal Term.
(i) Tenant, at Tenant's sole cost and expense, shall maintain and
keep in effect throughout the Principal Term:
(A) Insurance against loss or damage to any buildings
hereafter constructed on the Premises by fire and such other casualties as may
be included in extended risk coverage insurance, in an amount equal to the
full insurable value of such buildings (but subject to such deductible sums as
Tenant shall reasonably designate); and
(B) Insurance against claims for personal injury (including
death) and property damage under a policy or policies of comprehensive general
liability insurance, with limits not less than Five Million Dollars
($5,000,000.00) in respect of personal injury (including bodily injury and
death) and One Million Dollars ($1,000,000.00) for property damage.
(ii) The policies of insurance described in subsection 5(a)(i)(A)
above shall name Tenant as the insured party, and, in addition, may contain a
standard mortgagee endorsement in favor of the holder of any leasehold
mortgage on Tenant's estate in the Premises. The policies of insurance
described in subsection 5(a)(i)(B) above shall name Landlord and Tenant as
the insured parties.
(b) Requirements. The insurance required by this Section 5 shall be
maintained, at Tenant's option, either by separate policies or by blanket
policies (provided that all requirements of this Section 5 shall be complied
with in respect of such blanket policies and that such blanket policies shall
provide that the coverage thereunder for the Premises and occurrences in, on
or about the Premises shall not be diminished by occurrences elsewhere). Such
policies applicable to the Premises shall be issued by insurers of recognized
responsibility licensed to do business in Pennsylvania and having a Best's
rating of A+Vll or higher. Tenant shall deliver to Landlord certificates of
the insurance carrier certifying that each policy required to be maintained
has been issued and is in effect and the duration thereof (herein called a
"certificate"). At least thirty (30) days before any policy shall expire,
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Tenant shall deliver to Landlord a replacement certificate and at least ten
(10) days prior to the date that, the premium on any policy shall become due
and payable, Landlord shall be furnished with satisfactory evidence of its
payment.
(c) Evidence of Payment. It Tenant shall fail, refuse or neglect to
obtain such insurance or maintain it, Landlord shall have the right, at
Landlord's option, to purchase such insurance and to pay the premiums thereon
or to pay the premiums on insurance which Tenant should have paid for. All
such payments made by Landlord shall be recoverable by Landlord from Tenant on
demand as additional rent hereunder, together with interest at the Effective
Rate (as defined below), from the respective dates of Landlord's making of the
payments.
6. Waiver of Subrogation. Each of the parties hereto hereby releases the
other, to the extent of each party's insurance coverage, from any and all
liability for any loss or damage 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 release, 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 and if such policies do not provide therefor. If an additional
premium is charged for such waiver, the party benefiting therefrom, if it
desires to have the waiver, agrees to pay to the other the amount of such
additional premium promptly upon being billed therefor.
7. Care, Improvement and Restoration of the Premises.
(a) Improvements Upon the Premises.
(i) Prior to the Tenant's delivery of the Principal Term
Commencement Notice, Tenant shall not demolish, remove, alter or construct any
buildings, signs, roadways, driveways, parking areas, piers, pier structures,
or other improvements (all such items being herein called "Improvements") on
the Premises and/or otherwise alter the condition of the Premises or any
Improvements thereon without the prior written consent of Landlord, which
consent Landlord agrees not unreasonably to withhold or delay.
(ii) From and after the Tenant's delivery of the Principal Term
Commencement Notice, Tenant may, at any time and from time to time and without
the prior consent of Landlord, demolish, remove, alter, construct or
reconstruct any Improvements upon the Premises and/or otherwise alter the
condition of the Premises or any Improvements on the Premises. Title to any
Improvements which may be placed in or upon or affixed to the Premises by, for
or under Tenant, shall remain in Tenant during the Principal Term, and any
Extension Period as to which Tenant has given an Extension Notice, and Tenant
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alone shall be entitled to claim depreciation therefor during such period of
time. At the end of the Principal Term and all Extension Periods as to which
Tenant has given an Extension Notice, Tenant may, at its option, either leave
all Improvements upon the Premises or remove from the Premises any
Improvements placed or constructed thereon by Tenant (provided that Tenant
shall repair or restore any damage to the Premises and the Improvements not
removed caused by such removal).
(b) Maintenance and Repair During the Principal Term. Tenant shall,
throughout the Principal Term, at its sole cost and expense: (i) take care of
the buildings, sidewalks, parking areas, curbs, access ways and the other
Improvements now or hereafter located upon the Premises, and keep them in a
state of order, condition and repair adequate for Tenant's required or
intended use thereof, and in substantial compliance with the terms and
provisions of any Recorded Agreement; and promptly at Tenant's own cost and
expense make all repairs necessary to maintain such state of order, condition,
repair and compliance, whether such repairs be interior or exterior,
structural or non-structural, ordinary or extraordinary, foreseen or
unforeseen; and (ii) keep and maintain all portions of the Premises in a clean
and orderly condition, free of accumulation of dirt, rubbish, snow and ice.
(c) Restoration of Fire Damage. If (i) the buildings or other
Improvements on the Premises shall be damaged or destroyed by fire or other
casualty at any time during the Principal Term, and (ii) Tenant has not
elected to exercise its right to terminate this Lease Agreement, if
applicable, pursuant to the terms of Paragraph 9 hereof, then Tenant, at
Tenant's sole cost and expense, shall promptly and diligently proceed either
(a) to repair, rebuild or replace such buildings and other Improvements, so as
to restore the Premises substantially similar to the condition in which they
were immediately prior to such damage or destruction; or (b) to clear the
debris and damaged portions and restore the Premises and Improvements to a
condition adequate for Tenant's required or intended use thereof.
8. Landlord's Right of Entry
(a) Tenant agrees to permit Landlord and the authorized
representatives of Landlord to enter the Premises at all reasonable times
during business hours for the purpose of inspecting them, including, without
limitation, the performance of reasonable tests, samplings, or other
investigations to satisfy itself that Tenant has complied with the provisions
of this Lease, and making any necessary repairs thereto and performing any
work therein that may be necessary by reason of Tenant's failure to make such
repairs or perform any such work required of Tenant under this Lease. Nothing
herein shall imply any duty upon the part of Landlord to make any such
inspection, testing, sampling or investigation at the Premises or to do any
such work which under any provision of this Lease Tenant may be required to
perform and the performance thereof by Landlord shall not constitute a waiver
of Tenant's default in failing to perform it. Landlord shall not be liable for
inconvenience, annoyance, disturbance or other damage to Tenant by reason of
making such repairs or the performance of such work in the Premises or on
account of bringing materials, supplies and equipment into or through the
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Premises during the course thereof and the obligations of Tenant under this
Lease shall not thereby be affected and the cost of each of such repairs or
the performance of such work shall be payable by Tenant to Landlord pursuant
to and in accordance with Section 21 hereof. Landlord also shall have the
right to enter the Premises at all reasonable times during business hours to
exhibit the Premises to any prospective purchaser or mortgagee thereof.
(b) Notwithstanding the provisions of subsection 8(a) above to the
contrary, Landlord's right to enter upon the Premises shall be subject to any
restrictions, limitations and provisions set forth in applicable laws and
governmental regulations (including, without limitation, laws and governmental
regulations of the United States Coast Guard and laws and governmental
regulations governing gambling facilities).
(c) Notwithstanding the provisions of subsection 8(a) above to the
contrary, Landlord's right to enter upon any boat or other vessel located
within or adjacent to the Premises shall be subject to the further limitation
that Landlord must give to Tenant at least 48 hours prior written notice of
Landlord's intention to enter such boat or other vessel and Landlord may do so
only accompanied by a representative of Tenant (and Tenant agrees to make such
representative available) and only to determine if Tenant is in breach of any
of its obligation under this Lease.
9. Fire and Other Casualty. In the event of any casualty to the
Premises, there shall be no abatement of Fixed Rent (and the obligation to pay
Percentage Rent shall continue to apply but only to the extent of the amount
recovered by Tenant under the terms of the Tenant s business interruption
insurance coverage). In the event that Tenant is unable to obtain business
interruption insurance (after making good faith efforts to do so), then the
Percentage Rent shall be abated.
10. Net Lease. It is the intention of the parties hereto that during the
Principal Term this Lease is a "net lease" and that Landlord shall during the
Principal Term receive the rent hereinabove provided as net income from the
Premises, not diminished by (a) any imposition during the Principal Term
notwithstanding any changes in the method of taxation or raising, levying or
assessing any imposition, or any changes in the name of any imposition, or (b)
any expenses or charges required to be paid during the Principal Term to
maintain the Premises, other than payments under any mortgage now existing or
hereafter created by Landlord.
11. Utility Charges. Tenant shall be solely responsible for and shall
promptly pay all costs and charges for the connection and use of water and
sewer services and all costs and charges for the connection and use of gas,
steam, heat, light, electricity, power, telephone and any other utility or
service used or consumed in or servicing the Premises during the Principal
Term.
12. No Services by Landlord. Landlord is not and shall not be required
to render any services of any kind to Tenant.
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13. Governmental Regulations. Tenant shall throughout the Principal
Term, at Tenant's sole cost and expense, promptly comply in all material
respects with all laws and ordinances and notices, orders, rules, regulations
and requirements of all federal, state and municipal governments and
appropriate departments, commissions, boards and officers thereof, and
notices, orders, rules and regulations of the National Board of Fire
Underwriters, or any other body now or hereafter Constituted exercising
similar functions, and the requirements of each Recorded Agreement, relating
to all or any part of the Premises, exterior as well as interior, foreseen or
unforeseen, ordinary as well as extraordinary, structural as well as non-
structural, or to the use or manner of use of the Premises or to the
sidewalks, parking areas, curbs and access ways within the Premises. Without
limiting the generality of the foregoing, Tenant shall keep in force at all
times during the Principal Term all licenses, consents and permits necessary
for the lawful use of the Premises and Tenant shall pay all personal property
taxes, license fees, and other taxes which are or may be assessed, levied or
imposed upon Tenant in connection with Tenant's operation of its business upon
the Premises. Tenant shall during the Principal Term observe and comply with
the requirements of all policies of liability, fire and other policies of
insurance in force with respect to the Premises. Notwithstanding the
foregoing provisions of this Section 13, Tenant shall not be obligated to
comply with any of the laws, ordinances, notices, orders, rules, regulations
and requirements specified above to the extent that the need for such
compliance has been created by the acts or omissions of Landlord, of any
partner in Landlord, or of any party which is affiliated with Landlord or any
partner in Landlord, or any of their agents or employees occurring after the
date of the execution of the Lease Agreement.
14. Use of Premises.
(a) Principal Term Gambling Use. If and to the extent that
applicable law permits the operation of a gambling facility at the Premises
and if and to the extent (after the use of diligent efforts to obtain a
license) the Tenant has obtained a license to operate a gambling facility at
the Premises, then for a period of ten years from the commencement of the
Principal Term (but only for so long as Tenant may lawfully do so and Tenant's
license to do so remains in effect), Tenant shall continuously cause the
Premises to be used for the operation of a gambling facility and related
operations and for no other uses. The purpose of this continuous operation
covenant is to maximize the Net Gaming Win for the purpose of the computation
of Percentage Rent.
(b) Other Uses. If and to the extent the operation of a gambling
facility is not permitted by applicable law at the Premises during the
Principal Term, or if after the use of diligent efforts the Tenant has not
obtained or retained a license for the operation of a gambling facility on the
Premises, and/or at any time after the expiration of ten years after the
commencement of the Principal Term, the Tenant may use the Premises for any
lawful purpose.
(c) Compliance With Law. The Premises shall not be used for any
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purpose during the Principal Term which is not in substantial compliance with
the requirements of all applicable laws, ordinances, rules, regulations and
requirements of all federal, state and municipal governments and the
applicable provisions of any Recorded Agreement.
15. Environmental Matters.
(a) Tenant shall, throughout the Principal Term, conduct Tenant's
operations and activities at the Premises in substantial compliance with all
applicable federal, state and municipal statutes, ordinances, regulations,
orders, directives or other requirements of law or common law concerning: (A)
the generation, use, handling, treatment, storage, transportation, release,
disposal, remediation or presence of any material including Solid Waste or
Hazardous Substances in, on, under, from or connected with operations and
activities at the Premises; (B) the emission of any air pollutant; (C) the
presence or discharge of any Pollutant in, on or under the Premises or into
surface or groundwater; (D) storage tanks and related facilities and
connections (herein collectively called "Environmental Statutes"). Tenant
shall, throughout the Principal Term, obtain and maintain all permits,
licenses or approvals for the conduct of Tenant's operations and activities at
the Premises as required by Environmental Statutes; and Tenant shall at all
times comply with the terms and conditions of such permits, licenses and
approvals.
(b) Tenant shall, throughout the Principal Term, provide to Landlord
copies of the following, forthwith after each shall have been prepared by,
submitted to or received by Tenant: (A) all applications submitted to any
governmental agency relating to any Environmental Statute with respect to the
Premises ; (B) all notifications, registrations, records, reports or other
documents submitted to any governmental agency relating to any Environmental
Statute with respect to the Premises; (C) all permits, licenses and approvals,
and amendments or modifications thereof, obtained by Tenant under any
Environmental Statute with respect to the Premises; and (D) any notice of
violation, summons, order, complaint, or notice of investigation, received by
Tenant relating to any Environmental Statute with respect to the Premises.
(c) Tenant shall, throughout the Principal Term, not cause the use,
generation, handling or storage of Hazardous Substances or Solid Waste in, on
or under the Premises, except: (A) construction materials (except for asbestos
containing materials, polychloride biphenyl and urea formaldehyde), office
equipment, furnishings and supplies, and office maintenance materials that are
or contain Hazardous Substances may be used, generated, handled or stored on
the Premises, provided such is incident to and reasonably necessary for the
construction, operation or maintenance of the Premises and is in material
compliance with applicable laws, (B) reasonable quantities of the Hazardous
Substances may be used, handled or stored on the Premises if such activity is
incident to the retail sale of such on the Premises, provided such are
packaged, labeled, stored or used in accordance with applicable laws and (C)
Solid Wastes may be generated and stored temporarily on the Premises provided
such activities are performed in material compliance with applicable law and
such Solid Wastes are lawfully removed promptly after they are generated.
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Tenant shall not, during the Principal Term, cause the release of Hazardous
Substances or Solid Waste in, on or under the Premises, except as provided in
the previous sentence or as specifically provided for in and performed in
material compliance with a permit, license or approval obtained from a
governmental agency.
(d) Tenant shall, throughout the Principal Term, comply in all
material respects with all applicable laws and regulations concerning the
installation by Tenant of any storage tank, whether above or underground, at
the Premises. Upon termination of this Lease, Landlord shall have the option
of requiring that Tenant, at Tenant's sole cost and expense, perform tests
relating to and/or remove any storage tank installed by Tenant and associated
contaminated material.
(e) Tenant hereby agrees to indemnify, defend and hold harmless
Landlord of, from and against any and all expense, loss, damage or liability
of any kind suffered by Landlord by reason of Tenant's breach of any of the
provisions of this Section 15.
(f) For the purposes of this Section 15, the terms listed below shall
be defined as they are defined in the provisions of law listed below and the
regulations promulgated pursuant thereto as amended from time to time or in
future federal legislation or in corresponding present or future provisions of
law or regulation in the state where the Premises are located.
(A) air pollutant - 42 U.S.C. Section 7602(g).
(B) discharge of pollutant - 33 U.S.C. Section 1362(12).
(C) release - 42 U.S.C. Section 9601(22).
(D) storage - 42 U.S.C. Section G903(33), without limitation
as to the material involved.
(E) disposal - 42 U.S. C. Section 6903 (3), without
limitation as to the material involved.
(F) Solid Waste - 42 U.S.C. Section 6903(27).
(i) The provisions of this Section 15 shall not be construed as
limiting in any respect the covenants and obligations of Tenant under Sections
13 and 14 hereof.
16. Mechanics' Liens, etc.
(a) Tenant will not during the Principal Term create or permit to be
created or remain any lien, encumbrance or charge levied an account of any
imposition or any mechanic's, laborer's or materialmen's lien which might be
or become a lien, encumbrance or charge upon the Premises or any part thereof
or the income therefrom, having any priority or preference over or ranking on
a parity with the estate, rights and interest of Landlord in the Premises or
16
any part thereof or the income therefrom, and Tenant will not suffer any other
matter or thing whereby the estate, rights and interest of Landlord in the
Premises or any part thereof might be impaired; provided that any mechanic's,
laborer's or materialmen's lien may be discharged in accordance with
subsection 16(b).
(b) If at any time during the Principal Term any mechanic's,
laborer's or materialmen's lien shall be filed against the Premises by reason
of work performed by or at the direction of Tenant, Tenant, within sixty (60)
days after notice of the filing thereof, will cause it to be discharged of
record by payment, bond, order of a court of competent jurisdiction or
otherwise. If Tenant shall fail to cause such lien to be discharged within
the period aforesaid, then in addition to any other right or remedy, Landlord
may, but shall not be obligated to, discharge it either by paying the amount
claimed to be due or by procuring the discharge of such lien by deposit or by
bonding proceedings, and in any such event, Landlord shall be entitled, if
Landlord so elects, to compel the prosecution of any action for the
foreclosure of such lien by the lienor and to pay the amount of the judgment
in favor of the lienor with interest, costs and allowances. Any amount so
paid by Landlord and all costs and expenses incurred by Landlord in connection
therewith, together with interest thereon at the Effective Rate from the
respective dates of Landlord's making of the payments and incurring of the
costs and expenses, shall constitute additional rent payable by Tenant under
this Lease and shall be paid by Tenant to Landlord on demand.
(c) Nothing in this Lease contained shall be deemed or construed in
any way as constituting the consent or request of Landlord, express or implied
by inference or otherwise, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any
materials for any specific alteration, addition, improvement or repair to the
Premises or any part thereof. Nothing in this Lease or in any other document
executed by Landlord shall be construed to constitute an acknowledgment that
any work done or material provided by any contractor, subcontractor or
materialman of Tenant was done or provided for the immediate use and benefit
of Landlord.
(d) Prior to the making of any alterations, additions or
improvements to the Premises which would give rise to a claim for a mechanic's
lien, Tenant shall cause to be filed in the Office of the Prothonotary of
Philadelphia County a Waiver of Mechanic's and Materialmen's Liens in proper
statutory form.
17. Indemnification.
(a) Indemnification. Tenant agrees to indemnify and save harmless
Landlord from and against any and all claims by or on behalf of any person or
persons, firm or firms, corporation or corporations, arising from the
occupancy, conduct, operation or management of the Premises by Tenant during
the Principal Term and by any party during the Principal Term; or from any
work or thing whatsoever done or which was not done in and on the Premises
during the Principal Term; or arising from any breach or default on the part
17
of Tenant during the Principal Term in the performance of any covenant or
agreement on the part of Tenant to be performed pursuant to the terms of this
Lease; or arising during the Principal Term from any act, neglect or
negligence of Tenant, or any of its agents, contractors, servants, employees,
subtenants or licensees; or arising from any accident, injury or damage
whatsoever caused to any person, firm or corporation, occurring during the
Principal Term, in or about the Premises; and from and against all costs,
expenses and liabilities incurred in connection with any such claim or action
or proceeding brought thereon (including without limitation the fees of
attorneys, investigators and experts) and in case any action or proceeding be
brought against Landlord by reason of any such claim, Tenant upon notice from
Landlord covenants at Tenant's cost and expense to resist or defend such
action or proceeding or to cause it to be resisted or defended by an insurer.
Notwithstanding the foregoing, the obligations of Tenant pursuant to this
subsection 17(a) shall not apply to any claims resulting from the negligence
of Landlord upon or relating to the Premises and occurring subsequent to the
execution of the Lease Agreement dated December 14, 1993.
(b) Release. Landlord, its principals, agents, employees and
contractors, shall not be liable for, and Tenant hereby releases Landlord, its
principals, agents, employees and contractors from, all claims for loss of
life, personal injury or damage to property or business sustained during the
Principal Term by Tenant or any person claiming by, through or under Tenant
resulting from fire, accident, occurrence or condition in or upon the Premises
or any part thereof including, but not limited to, any such claims for loss of
life, personal injury or damage resulting from defect, latent or otherwise, in
the Premises, any defect in or any failure of any equipment, machinery,
utilities, appliances or apparatus in the Premises, falling of fixtures or
other items, leakage of water, snow or ice, broken glass, or any other event
whatsoever; excluding, however, any claims resulting from the negligence of
Landlord upon the Premises occurring subsequent to the execution of the Lease
Agreement dated December 14, 1993.
18. Quiet Enjoyment. Tenant, upon paying the rent, additional rent and
other charges herein provided for and observing and keeping all covenants,
agreements and conditions of this Lease on its part to be kept, shall quietly
have and enjoy the Premises during the term of this Lease without hindrance or
molestation by anyone claiming by or through Landlord, subject, however, to
the exceptions, reservations and conditions of this Lease.
19. Condemnation.
(a) If all of the Premises is taken or condemned during the Principal
Term for a public or quasi-public use ("Taken") this Lease Agreement shall
terminate as of the day title to the condemned real estate vests in the
condemnor. If a portion of the Premises is Taken during the Principal Term
and the balance thereof is not reasonably suitable for the operation of a
gambling facility thereon, Tenant shall have the right at Tenant's sole
option, of terminating this Lease Agreement as of the day title to the
condemned real estate vests in the condemnor. If this Lease Agreement shall
terminate pursuant to the preceding provisions of this subsection 19(a), the
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rent provided to be paid by Tenant to Landlord pursuant to this Lease
Agreement shall be apportioned and paid in full by Tenant to Landlord to the
date of termination, and neither Landlord nor Tenant shall thereafter have any
liability under this Lease Agreement.
(b) If only a portion of the Premises is Taken and Tenant does not
(or does not have the right to) terminate this Lease Agreement pursuant to the
provisions of subsection 19(a), then Tenant shall (to the extent only of
condemnation awards paid to Tenant for such purpose) restore the Improvements
then existing on the Premises to a condition as nearly comparable as
reasonably possible to the condition and size thereof immediately prior to the
date on which the Premises is Taken; and there shall be an equitable abatement
of Fixed Rent according to the value of the Premises before and after the
Premises is Taken. In the event that Landlord and Tenant are unable to agree
upon the amount of abatement of Fixed Rent, either party may submit the issue
for arbitration pursuant to the rules then obtaining of the American
Arbitration Association and the determination or award rendered by the
arbitrators shall be final, conclusive and binding upon Landlord and Tenant
and not subject to appeal; and judgment thereon may be entered in any court of
competent jurisdiction.
(c) If all or any portion of the Premises is Taken during the
Principal Term, each of Landlord and Tenant may make a claim for its own award
as its interests may appear.
20. Assignment and Subletting.
(a) Tenant shall not during the Principal Term assign this Lease
Agreement or sublet the entire Premises without first obtaining the prior
written consent of Landlord which consent Landlord agrees not unreasonably to
withhold or delay; provided, however, that Tenant shall have the right during
the Principal Term to assign this Lease Agreement and/or to sublet the entire
Premises without the prior consent of Landlord to any Tenant Affiliate and/or
to any entity which acquires substantially all of the business of Tenant.
Tenant shall have the right, without the prior consent of Landlord, effective
from and after the commencement of the Principal Term, to sublet a portion of
the Premises to a second gambling facility operator and, if and to the extent
the operation of a gambling facility is not permitted at the Premises, to
sublet portion(s) of the Premises to various users. In the event of any
assignment of this Lease or subletting of the Premises made with or without
Landlord's consent, Tenant shall, nevertheless, remain liable for the
performance of all of the terms, conditions and covenants of this Lease and
Tenant shall cause any assignee to execute and deliver to Landlord an
assumption of liability agreement, including an assumption by the assignee of
all of the obligations of Tenant and the assignee's ratification of and
agreement to be bound by all the provisions of this Lease. Notwithstanding
anything to the contrary set forth in the preceding sentence, in the event
that a New Gaming Company occupies a portion of the Premises for use as a
gambling facility, the Landlord agrees to look solely to New Gaming Company
and its guarantor, if any, with respect to the Percentage Rent and/or Fixed
Rent due and owing by New Gaming Company for its gambling facility at the
19
Premises. It being the stated intention of the Landlord and Tenant that
neither the Tenant nor its guarantor shall have any liability to Landlord for
any Percentage Rent and/or Fixed Rent arising from or related to New Gaming
Company's use or operation of a gambling facility located at the Premises.
(b) A transfer in any transaction of fifty percent (50%) or more of
the stock of Tenant shall be deemed an assignment of this Lease.
(c) At least fifteen (15) days prior to any proposed subletting or
assignment which, pursuant to the provisions of subsection 20(a) above,
requires the consent of Landlord, Tenant shall submit to Landlord a statement
seeking Landlord's consent and containing the name and address of the proposed
subtenant or assignee, the terms of the proposed sublease or assignment
(including the proposed date for possession for such subtenant or assignee)
and such financial and other information with respect to the proposed
subtenant as Landlord reasonably may request.
21. Curing Tenant's Defaults. Subject to the provisions of Section 25,
below, requiring Landlord to give to Tenant written notice of Tenant's default
and an opportunity to cure such default (but not subject thereto in the event
of an emergency situation), if Tenant shall be in default in the performance
of any of its obligations under this Lease Agreement, Landlord may (but shall
not be obligated to do so), in addition to any other rights it may have in law
or equity or under this Lease, cure such default on behalf of Tenant, and
Tenant shall reimburse Landlord upon demand for any reasonable sums actually
paid or reasonable costs actually incurred by Landlord in curing such default
(including, without limitation, reasonable attorneys' fees and court costs),
together with interest at the Effective Rate from the respective dates of
Landlord's making of the payments and incurring of the costs on all sums
advanced by Landlord as aforesaid, which sums and costs together with interest
thereon shall be deemed additional rent payable hereunder.
22. Condition of Title and of Premises. Tenant agrees that the Premises,
the title thereto, all encumbrances thereon, the Recorded Agreement, the
zoning thereof, the street or streets, sidewalks, parking areas, curbs and
access ways adjoining them, any surface and subsurface conditions thereof, and
the permitted uses and restrictions on the uses thereof, have been examined
by, and/or are known to, Tenant; and Tenant accepts the Premises without
representation, covenant or warranty, express or implied, in fact or in law,
by Landlord and without recourse to Landlord, as to the title to the Premises,
the encumbrances thereon, the Recorded Agreement, the zoning of the Premises,
the street or streets, sidewalks, parking areas, curbs and access ways
adjoining the Premises, any surface or subsurface conditions thereof, the
nature, condition or usability thereof or the use or uses to which the
Premises or any part thereof may be put and any restrictions on the uses of
the Premises.
23. Surrender. Subject to the provisions of subsection 7(a)(ii) above,
Tenant agrees at the expiration or earlier termination of this Lease Agreement
promptly to yield up, in the same condition in which they are required to be
kept throughout the Principal Term, the Premises and all improvements,
20
alterations and additions thereto.
24. Defaults - Remedies. Subject to the provisions of Section 25, below,
(i) in the event Tenant shall at any time be in default in the payment of rent
herein reserved, or of any other sum required to be paid by Tenant under this
Lease, or in the performance of or compliance with any of the terms,
covenants, conditions or provisions of this Lease; or (ii) in the event Tenant
shall commence any proceeding seeking to have an order for relief entered on
its behalf as a debtor under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking the appointment of a receiver,
trustee, custodian or other similar official for all (or substantially all) of
its assets; or (iii) in the event in any involuntary proceeding Tenant is
adjudicated a bankrupt (and such adjudication is not reversed within 120 days
of its initial declaration); then and in addition to any other rights or
remedies Landlord may have under this Lease and at law and in equity, Landlord
shall have the following rights:
(a) Subject to the terms of Section 35 hereof, to enter the Premises
and without further demand or notice proceed to levy the rent and/or other
charges herein payable as rent, and Tenant shall pay all costs and officers,
commissions, including watchmen's wages and sums chargeable to Landlord, and
further including the five percent (5%) chargeable by the Act of Assembly as
commissions to the constable or other person making the levy, and in such case
all costs, officers, commissions and other charges shall immediately attach
and become part of the claim of Landlord for rent, and any tender of rent
without said costs, commissions and charges made, after the issuance of a
warrant of distress, shall not be sufficient to satisfy the claim of Landlord.
(b) To re-enter the Premises and remove all persons and all or any
property therefrom, either by summary dispossess proceedings or by any
suitable action or proceeding at law, and repossess and enjoy the Premises,
together with all additions, alterations and improvements. Upon recovering
possession of the Premises by reason of or based upon or arising out of a
default on the part of Tenant, Landlord may, at Landlord's option, either
terminate this Lease or make such alterations and repairs as may be necessary
in order to relet the Premises or any part or parts thereof, either in
Landlord's name or otherwise, for a term or terms which may at Landlord's
option be less than or exceed the period which would otherwise have
constituted the balance of the term of this Lease and at such rent or rents
and upon such other terms and conditions as in Landlord's reasonable
discretion may seem advisable and to such person or persons as may in
Landlord's reasonable discretion seem best; upon each such reletting all rents
received by Landlord from such reletting shall be applied: first, to the
payment of any indebtedness other than rent due hereunder from Tenant to
Landlord; second, to the payment of any costs and expenses of such reletting,
including brokerage fees and attorney's fees and all costs of such alterations
and repairs; third, to the payment of rent due and unpaid hereunder; and the
residue, if any, shall be held by Landlord and applied in payment of future
rent as it may become due and payable hereunder. If such rentals received
from such reletting during any month shall be less than that to be paid during
that month by Tenant hereunder, Tenant shall pay any such deficiency to
21
Landlord. Such deficiency shall be calculated and paid monthly. No such re-
entry or taking possession of the Premises or the making of alterations and/or
improvements thereto or the reletting thereof shall be construed as an
election on the part of Landlord to terminate this Lease unless written notice
of such intention be given to Tenant. Landlord agrees to use reasonable
efforts to mitigate its damages in the event of a default by Tenant under this
Lease Agreement; provided however, that Landlord shall in no event be liable
in any way whatsoever for failure to relet the Premises or, in the event that
the Premises or any part or parts thereof are relet, for failure to collect
the rent thereof under such reletting. Following the occurrence and
continuation of an event of default after notice and the expiration of the
applicable cure period and upon Landlord's lawful re-entry onto the Premises,
Tenant, for Tenant and Tenant's successors and assigns, hereby irrevocably
constitutes and appoints Landlord Tenant's and their agent to collect the
rents due and to become due under all subleases of the Premises or any parts
thereof without in any way affecting Tenant's obligation to pay any unpaid
balance of rent due or to become due hereunder. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect to
terminate this Lease for such previous breach.
(c) To terminate this Lease and the term hereby created. Upon such
termination, Landlord shall be entitled to recover an amount equal to all of
the Fixed Rent reserved for the balance of the Principal Term; subject,
however, to the affirmative obligation of Landlord to use reasonable efforts
to mitigate its loss and damages resulting from its termination of this Lease
and the term hereby created.
(d) 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.
(e) No waiver by Landlord of any breach by Tenant of any of Tenant's
obligations, agreements 'or covenants herein shall be a waiver of any
subsequent breach or of any obligation, agreement or covenant, nor shall any
forbearance by Landlord to seek a remedy for any breach by Tenant be a waiver
by Landlord of any rights and remedies with respect to such or any subsequent
breach.
(f) In the event of any default by Tenant of any of its obligations
under this Lease, Tenant shall immediately pay to Landlord, upon demand, an
amount equal to all reasonable attorney's fees and court costs incurred by
Landlord in enforcing its rights and remedies under this Lease, whether or not
an administrative and/or judicial action is commenced by Landlord against
Tenant by reason of such default.
(g) The parties recognize that no adequate remedy at law may exist
for a breach by Tenant of its obligations under this Lease. Accordingly,
either Landlord or Tenant may obtain specific performance of any provision of
this Lease. Neither such right nor its exercise shall limit any other
22
remedies which Landlord may have against Tenant or which Tenant may have
against Landlord for a breach of this Lease.
(h) If Tenant shall at any time during the Principal Term fail to pay
any installment of the Principal Term Rent and if such failure shall continue
beyond the applicable grace period specified in subsection 25 (a) below, then
from and after the expiration of such grace period and until such sum is paid
to Landlord, interest shall accrue (such interest being payable as rent
hereunder) on the delinquent amount at the Effective Rate.
25. Grace Period and Notice of Default.
(a) Notwithstanding any provision to the contrary set forth elsewhere
in this Lease Agreement, Landlord agrees that Tenant will not be deemed to be
in default of any of its obligations under this Lease, that no event of
default shall have occurred under the Lease and that Landlord will not
exercise any, right or remedy provided for in this Lease or allowed by law
because of any default by Tenant of any of its obligations under this Lease
Agreement or because of any failure by Tenant to perform any of its
obligations under this Lease Agreement, unless and until Landlord shall have
first given written notice thereof to Tenant, and Tenant, within a period of
fifteen (15) days thereafter shall have failed to pay the sum or sums due if
the failure consists of the failure to pay money, or if the failure consists
of something other than the failure to pay money, Tenant shall have failed,
within thirty (30) days thereafter to cure the failure, or if such failure
cannot reasonably be cured within 30 days, to begin the correction thereof or
thereafter fails actively and diligently in good faith to proceed with and
continue the correction thereof until it shall be fully corrected.
(b) Notwithstanding any provision to the contrary set forth elsewhere
in this Lease Agreement, Tenant shall not be deemed to have failed timely to
have given the Principal Term Commencement Notice to Landlord or an Extension
Notice to Landlord unless Landlord shall have given to Tenant written notice
("Reminder Notice"); that the last date by which Tenant is permitted to give
to Landlord the Principal Term Commencement Notice and/or the Extension Notice
has passed without such notice having been given, and unless Tenant fails to
give to Landlord the Principal Term Commencement Notice or the Extension
Notice (whichever is applicable) within ten (10) days after the date on which
Landlord has given the Reminder Notice to Tenant.
26. Brokers.
(a) Landlord agrees to indemnify, defend and save and hold harmless
Tenant of and from any liability for any brokerage commission payable to any
real estate broker with which Landlord dealt in connection with this Second
Amendment to Lease Agreement.
(b) Tenant agrees to indemnify, defend and save and hold harmless
Landlord of and from any liability for any brokerage commission payable to any
real estate broker with which Tenant dealt in connection with this Second
Amendment to Lease Agreement.
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27. Captions. The captions in this Lease are for convenience only and
are not a part of this Lease and are not in any way define, limit, describe or
amplify the terms and provisions of this Lease or the scope or intent thereof.
28. Entire Agreement. This Lease represents the entire agreement between
Landlord and Tenant and there are no collateral or oral agreements or
understandings between Landlord and Tenant with respect to the subject matter
hereof. This Lease shall not be modified in any manner except by an
instrument in writing executed by the parties.
29. Interpretation. The masculine (or neuter) pronoun, singular number
shall include the masculine, feminine and neuter genders and the singular and
plural number. Without limitation of the provisions of this Lease which
expressly or impliedly survive the expiration or termination of this Lease,
Landlord and Tenant agree that all provisions of this Lease in which Landlord
or Tenant has agreed to indemnify the other, and the provisions of Section 15,
shall survive such expiration and termination.
30. Memorandum of Lease. Landlord and Tenant agree to execute,
acknowledge and cause to be recorded, promptly after the execution of this
Second Amendment to Lease Agreement, a Memorandum of this Second Amendment to
Lease Agreement in proper statutory form. All recording charges for the
recording of the Memorandum of the Second Amendment to Lease Agreement shall
be paid by Tenant. It is the opinion of the Tenant that no Realty Transfer
Taxes due or payable to the Commonwealth of Pennsylvania or to City of
Philadelphia or the School District of Philadelphia by reason of the execution
and delivery of this Second Amendment to Lease Agreement and/or the execution,
delivery and recording of the Memorandum of Second Amendment to Lease
Agreement. However, if and to the extent that any realty transfer tax is
payable to the Commonwealth of Pennsylvania and/or to the City of Philadelphia
or the School District of the City of Philadelphia by reason of the execution
and delivery of this Second Amendment to Lease Agreement and/or the execution,
delivery and recording of the Memorandum of Second Amendment to Lease
Agreement, Tenant shall pay all such realty transfer taxes.
31. Consent. Whenever pursuant to the terms of this Lease Agreement the
consent or approval of Landlord or Tenant is required, the party whose consent
or approval is required hereby agrees not unreasonably withhold or delay such
consent or approval.
32. Representations and Warranties of Landlord. Landlord makes the
following representations and warranties to Tenant:
(a) Landlord has not received a written notice which remains
uncorrected stating that any portion of the, Premises is in violation of any
law, ordinance or regulation of any governmental authority ("Violation").
(b) There is no pending (or to the knowledge of Landlord, threatened)
action, suit or proceeding, against or affecting title to, or the use of, the
Premises, in any court or before or by any federal, state, county or municipal
department, commission, board, bureau or agency or other governmental
24
instrumentality.
(c) Landlord has not received (i) a written notice of any
investigation of the Premises or any potential liability of the Landlord
pursuant to any Environmental Laws or, (ii) a written notice that all or any
portion of the Premises has been Taken (or is proposed to be Taken).
(d) There is no proceeding pending for an increase or decrease in the
assessed valuation of all or any portion of the Premises for real estate tax
purposes.
(e) No portion of the Premises is the subject of any abatement,
reduction, deferral or "roll back" with regard to real estate taxes, nor any
other agreement or arrangement whereby the Premises may be subject to the
imposition of real estate taxes after the date of this Lease Agreement on
account of periods of time prior to the date of this Lease Agreement.
33. Time Periods. In computing any period of time pursuant to this Lease
Agreement, the day of the act or event from which the designated period of
time will run shall not be included. Any time period provided in this Lease
Agreement which shall end on a Saturday, Sunday or holiday shall extend to the
next full business day. The term "business day" shall mean any day which is
not a Saturday, Sunday or holiday. The term "holiday" shall mean a day other
than a Saturday or Sunday on which banks in the Commonwealth of Pennsylvania
are or may elect to be closed.
34. Right of First Refusal.
(a) Landlord shall not at any time during the Principal Term sell or
convey or agree to sell or convey all or any portion of the Premises without
first having complied with the requirements of this Section 34.
(b) If Landlord shall desire to sell or convey all or any portion or
portions of the Premises during the Principal Term, Landlord shall obtain from
a third party a bona fide arms-length written offer (the "Offer") , acceptable
to Landlord, to purchase the portion or portions of the Premises (such portion
or portions being herein, called the "Subject Premises") which Landlord
desires to sell or convey; and Landlord shall submit a written copy of the
Offer to Tenant and shall give Tenant thirty (30) days within which to elect
to meet the Offer and purchase the Subject Premises. If Tenant elects to meet
the Offer and purchase the Subject Premises Tenant shall give to Landlord
written notice thereof within the aforementioned 30 day period ("Acceptance
Notice") and closing shall be held within ninety (90) days after the date of
the Acceptance Notice, whereupon Landlord shall convey the Subject Premises to
Tenant. At closing Landlord shall deliver to Tenant a special warranty deed,
sufficient to convey to Tenant fee simple title to the Subject Premises free
and clear of all liens, restrictions and encumbrances, except for the liens,
restrictions and encumbrances subject to which the Subject Premises were to be
conveyed to the party making the Offer. Landlord and Tenant shall each pay
one-half of all transfer and documentary stamp taxes on or in connection with
such conveyance unless the Offer provided otherwise, in which event such taxes
25
shall be paid in accordance with the terms of the Offer.
(c) This right of first refusal shall continue throughout the
Principal Term as to all portions of the Premises until such time as such
portions shall have been sold by Landlord to any party making the Offer. In
the event Tenant shall not elect to meet any Offer within the aforementioned
30 day period, Landlord may thereafter sell the Subject Premises which are the
subject of the Offer only to the party making the Offer and only in accordance
with the terms thereof or on terms more beneficial to Landlord.
(d) To prevent Landlord from defeating the rights of Tenant under
this Section 34, Landlord agrees that Landlord will at no time accept an offer
to purchase all or any portion of the Premises together with any other
property.
35. Release. Landlord hereby waives and releases all rights of
distraint, levy and attachment to any items of personal property installed or
placed by Tenant or by any subtenant of Tenant on the Premises. Although the
foregoing waiver and release shall be self-operative without the necessity for
any further instrument or document, Landlord hereby agrees at any time during
the Principal Term, without limiting the effectiveness of the foregoing waiver
and release, to furnish Tenant and/or Tenant's sublessees, or any vendor or
other supplier under a conditional sale, chattel mortgage or other security
arrangement, any holder of reserved title or any holder of a security
interest, upon written request from time to time, waivers of Landlord's rights
of distraint, levy or attachment on any such items and exempting the same from
distraint, levy, attachment or recourse.
36. Leasehold Mortgages. Tenant and every successor and assign of Tenant
is hereby given the right (exercisable at any time and from time to time
during the Principal Term) by Landlord, to mortgage their interests in this
Lease, under one or more leasehold mortgages) to parties who are not Tenant
Affiliates and who are institutional-type lenders (including, without
limitation, banks, savings and loan associations, insurance companies and
mortgage investments trusts), and to assign this Lease, and all subleases), as
collateral security for such leasehold mortgages), upon the condition that all
rights acquired under such leasehold mortgages) shall be subject to each and
all of the covenants, conditions and restrictions set forth in this Lease
Agreement, and to all rights and interests of Landlord in this Lease
Agreement, none of which covenants, conditions or restrictions is or shall be
waived by Landlord by reason of the right given to Tenant to mortgage Tenant's
interest in this Lease Agreement, except as expressly provided in this Section
36. If Tenant desires to mortgage its interest under this Lease to a
leasehold mortgagee who is not an institutional type investor then, as long as
such proposed leasehold mortgagee is not a Tenant Affiliate, the Landlord
agrees not unreasonably to withhold or delay its approval of such leasehold
mortgagee. If Tenant and/or Tenant's successors and assigns shall mortgage
this leasehold and if the holder of any such leasehold mortgage shall send to
Landlord notice specifying the name and address of such holder and the
pertinent recording data with respect to its leasehold mortgage, and if such
holder shall have been approved by Landlord as aforesaid, then Landlord agrees
26
that the following provisions shall apply to each leasehold mortgage with
respect to which such conditions are met (each being herein called a
"Leasehold Mortgage"), so long as such Leasehold Mortgage shall remain
unsatisfied of record or until notice of satisfaction of such Leasehold
Mortgage is given by the holder to Landlord:
(a) There shall be no cancellation, surrender or modification of this
Lease Agreement by joint action of Landlord and Tenant without the prior
consent in writing of the holder of the Leasehold Mortgage, and no merger
shall result from the acquisition by, or devolution upon, any one entity of
the fee and leasehold estates in the Premises.
(b) Landlord shall, upon serving Tenant with any notice of default or
other notice provided for in this Lease Agreement, simultaneously serve a copy
of such notice upon the holder of the Leasehold Mortgage; and no such notice
to Tenant shall be effective unless a copy of such notice is also served on
the holder of the Leasehold Mortgage. The holder of the Leasehold Mortgage
shall thereupon have the same period, after service of such notice upon it, to
remedy or cause to be remedied the defaults complained of, and Landlord shall
accept such performance by or at the instigation of the holder of the
Leasehold Mortgage as if the same had been done by Tenant.
(c) If any default by Tenant shall occur which, pursuant to any
provision of this Lease Agreement or law, entitles Landlord to terminate this
Lease Agreement, and if, before the expiration of ten (10) days from the date
of service of notice of termination upon the holder of the Leasehold Mortgage,
such holder shall have notified Landlord of its desire to nullify such notice
and shall have paid to Landlord all minimum Rent and other payments provided
for in this Lease to which are then in default, and shall have complied (or
shall have commenced the work of complying) with all of the other obligations
of Tenant under this Lease which are then in default, and shall prosecute the
same to completion with reasonable diligence, then in such event Landlord
shall not be entitled to terminate this Lease and any notice of termination
theretofore given shall be void and of no effect; and in the event that the
holder of more than one Leasehold Mortgage shall desire so to act, the holder
of the Leasehold Mortgage which is prior in lien shall have the prior right so
to act.
(d) If any default by Tenant shall occur which, pursuant to any
provision of this Lease Agreement or law, entitles Landlord to terminate this
Lease Agreement, and Landlord elects to terminate this Lease Agreement, the
holder of the Leasehold Mortgage shall not only have the right to nullify any
notice of termination by curing such default, as aforesaid, but shall also
have the right to postpone and extend the specified date for the termination
of this Lease Agreement as fixed by Landlord in Landlord's notice of
termination, for a period of not more than four (4) months, provided that such
holder shall within ten (10) days of the notice of termination cure or cause
to be cured any then existing monetary defaults and meanwhile pay the rent,
additional rent and comply with and perform all of the other terms, conditions
and provisions of this Lease on Tenant's part to be complied with and
performed, and provided further that the holder of the Leasehold Mortgage
27
shall forthwith take steps to acquire or sell Tenant's interest in this Lease
Agreement by foreclosure of the Leasehold Mortgage or otherwise and shall
prosecute the same to completion with due diligence. If at the end of said
four (4) month period the holder of the Leasehold Mortgage shall be actively
engaged in steps to acquire or sell Tenant's interest in this Lease Agreement
and shall have given notice thereof to Landlord, the time for the holder to
comply with the provisions of this subparagraph (d) shall be extended for such
period as shall be reasonably necessary to complete such steps with reasonable
diligence and continuity; provided, however, that such extension shall not
exceed sixty (60) days.
(e) Landlord agrees that in the event of any termination of this
Lease Agreement or of any New Lease made pursuant to this subparagraph (e)
prior to its stated expiration date for any reason whatsoever (including,
without limitation, by operation of law or the rejection of this Lease
Agreement or any New Lease by Tenant as debtor in possession or any trustee of
Tenant in any bankruptcy, reorganization, arrangement or similar proceeding),
Landlord shall enter into a new lease ("New Lease") of the Premises with the
holder of the Leasehold Mortgage (or its nominee) or, if there be more than
one Leasehold Mortgage, then with the holder entitled under subparagraph (e)
(iii) (or its nominee) , for the remainder of the Term of this Lease,
effective as of the date of such termination, at the rent and upon the same
terms, provisions, covenants and agreements as contained in this Lease
Agreement (including without limitation all renewal options and/or rights of
first refusal), and subject only to the same conditions of title as this Lease
Agreement is subject to on the date of the execution hereof and to others
created pursuant to other Paragraphs of this Lease, and to the rights, if any,
of any parties then in possession of any part of the Premises, provided:
(i) The holder (or its nominee) shall make request upon Landlord
for such New Lease and shall enter into the New Lease within sixty (60) days
after the date on which the holder has received written notice of the
occurrence of such termination.
(ii) The holder (or its nominee) shall pay to Landlord at the
time of the execution and delivery of the New Lease all sums which would at
the time of the execution and delivery of the New Lease be due pursuant to
this Lease Agreement but for such termination, less the net income received by
Landlord subsequent to the date of termination of this Lease Agreement
pursuant to subparagraph (v) (C) below and prior to the execution and delivery
of the New Lease.
(iii) If more than one holder makes request upon Landlord in
accordance with the provisions of this subparagraph (e) , the New Lease shall
be delivered to the holder requesting such New Lease whose Leasehold Mortgage
is prior in lien and prior in estate, and the request of the holder of any
Leasehold Mortgage which is subordinate in lien shall be void and of no force
and effect.
(iv) Upon the execution and delivery of the New Lease, all
subleases which theretofore may have been assigned and transferred to Landlord
28
shall thereupon be assigned and transferred (without recourse) by Landlord to
the Tenant under the New Lease; and the Tenant under the New Lease shall have
the benefit of all of the right, title, interest, powers and privileges of
Tenant under this Lease Agreement in and to the Premises, including
specifically assignment of Landlord's interest in and to any then existing
sublease where the sublessee may have attorned to Landlord and which, at the
time of cancellation or termination of this Lease Agreement, was prior in
right to the lien of the holder of the Leasehold Mortgage or which by separate
agreement or by its terms had been granted non-disturber privileges pursuant
to the provisions of this Lease Agreement; and Landlord hereby agrees that,
with respect to any such sublease so assigned, Landlord will not modify or
amend any of the terms or provisions thereof, during the period between the
expiration or termination of this Lease Agreement and the execution and
delivery of the New Lease.
(v) Following the termination of this Lease Agreement or any New
Lease and until the right of the holders of all Leasehold Mortgages to enter
into a New Lease shall have expired without any New Lease having been
executed:
(A) Landlord shall not alter or in any way demolish the
buildings or other improvements situate on the Premises; and, during said
period, Landlord shall not remove, replace or change any furniture,
furnishing, fixtures or equipment located on the Premises.
(B) Landlord shall not terminate any sublease or the rights
of any subtenant under such sublease unless such subtenant shall be in default
under such sublease.
(C) Landlord shall receive all base rent and other payments
due from subtenants as agent of the holders of all Leasehold Mortgages and
shall deposit such rents and payments in a separate and segregated in trust
for the Premises but Landlord may withdraw such sums, from time to time, to
pay any rent due Landlord and any necessary operating expenses and carrying
charges of the Premises; and, upon the execution and delivery of the New
Lease, Landlord shall account and release to the tenant under the New Lease
for the balance, if any, of the base rent, additional rent and other payments
made under the subleases.
(f) The holder of the Leasehold Mortgage shall be given notice of any
arbitration proceedings by the parties hereto, and shall have the right to
intervene therein and be made a party to such proceedings; and the parties
hereto do hereby consent to such intervention. In the event that the holder
of the Leasehold Mortgage shall not elect to intervene or become a party to
such proceedings, the holder of the Leasehold Mortgage shall receive notice
of, and a copy of any award or decision made in said arbitration proceedings.
(g) Landlord shall, upon request, execute, acknowledge and deliver to
the holder of the Leasehold Mortgage an agreement prepared at the sole cost
and expense of Tenant, in form reasonably satisfactory to such holder, between
Landlord, Tenant and the holder, agreeing to all of the provisions of this
29
Section 36.
(h) If Tenant shall fail timely to deliver an Extension Notice, the
holder of the Leasehold Mortgage which is first in lien shall nevertheless
have the right to deliver such Extension Notice provided that it does so not
later than thirty (30) days after Landlord has given the Reminder Notice that
Tenant has failed to timely deliver such Extension Notice.
(i) Landlord shall not sell, assign, transfer, convey or in any
manner alienate or dispose of title to, or any interest in, any portion of the
Premises or in this Lease Agreement without specific provision that such sale,
assignment, conveyance or other alienation or disposition is and shall be
subject to all of the rights of Tenant as provided in this Lease Agreement and
to the holder of the Leasehold Mortgage.
(j) No payment made to Landlord by the holder of the Leasehold
Mortgage shall constitute agreement that such payment was, in fact, due under
the terms of this Lease Agreement; and the holder of the Leasehold Mortgage
having made any payment to Landlord pursuant to Landlord's wrongful, improper
or mistaken notice or demand shall be entitled to the return of any such
payment.
(k) The making of a Leasehold Mortgage shall not be deemed to
constitute an assignment of this Lease Agreement or of the leasehold estate
hereby created, nor shall the holder of any Leasehold Mortgage, as such, be
deemed an assignee of this Lease Agreement or of the leasehold estate hereby
created so as to require such holder, as the holder of the Leasehold Mortgage,
to assume the performance of any of the terms, covenants or conditions on the
part of Tenant to be performed under this Lease Agreement; but the purchaser
at any sale of this Lease Agreement and of the leasehold estate hereby created
in any proceedings for the foreclosure of any Leasehold Mortgage, or the
assignment of this Lease Agreement and of the leasehold estate hereby created
under any instrument of assignment in lieu of foreclosure of any Leasehold
Mortgage, shall be deemed to be an assignee of this Lease Agreement and of the
leasehold estate hereby created.
(l) This Lease may be assigned to any party without Landlord's
consent as a result of a foreclosure of the Leasehold Mortgage or as the
result of a deed or assignment in lieu of foreclosure of a Leasehold Mortgage.
(m) No holder of a Leasehold Mortgage shall have any personal
liability for performance of Tenant's obligations under this Lease unless and
until such holder acquires title to Tenant's leasehold estate or assumes
possession of the Premises.
37. Landlord's Joinder. Landlord agrees, upon all reasonable requests
from Tenant: (a) to join with Tenant in any and all applications and consents
for permits, authorization, consents and/or other governmental approvals
(including, without limitation, reclassification of the Premises pursuant to
the Zoning Code; the issuance of Variances, Special Exceptions, or
Certificates; the issuance of building permits and approvals; the issuance of
30
certificates of occupancy); and (b) to join with Tenant in any grants of
easements or dedications or conveyances for electricity, telephone, gas,
water, sewer and other public utilities and facilities and in any dedications
of streets and in any agreements for use and development of the Premises, as
Tenant or any governmental authority may require for the use and development
of the Premises; and Landlord agrees to execute such applications, consents
and other documents as may be required in order to effectuate the foregoing.
Landlord shall not be required to incur any cost or expense in connection with
any of such applications, easement, grants, consents or proceedings. Landlord
agrees that neither Landlord nor any of the partners in Landlord, nor any of
the shareholders of the partners in Landlord, will contest or object to any of
the applications and consents for permits, authorizations, consents and/or
governmental approvals referred to above in this Section 37. Notwithstanding
the foregoing provisions of this Section 37, Tenant shall not, prior to the
giving by Tenant of a Principal Term Commencement Notice, apply for any
reclassification of the Premises pursuant to the applicable Zoning Code
without the prior written approval of Landlord, which approval Landlord agrees
not unreasonably to withhold or delay.
38. Estoppel Certificates.
(a) Upon not less than fifteen (15) days prior notice by Tenant to
Landlord, Landlord shall execute, acknowledge and deliver to Tenant and/or to
any mortgagee, purchaser, or sublessee of Tenant (or any prospective
mortgagee, purchaser, or sublessee) a statement in writing certifying:
(i) That this Lease is unmodified and is in full force and effect
(or if there have been modifications, that the same is in full force and
effect as modified, and getting forth the modifications);
(ii) The dates to which rent and charges payable by Tenant under
this Lease Agreement have been paid;
(iii) Whether or not there is any existing default by Tenant or
notice of default served by Landlord upon Tenant and stating the nature of any
such defaults; and
(iv) The commencement and ending dates of the Principal Term of
this Lease.
(b) Upon not less than fifteen (15) days prior notice by Landlord to
Tenant, Tenant shall execute, acknowledge and deliver to Landlord and/or to
any mortgagee or purchaser of Landlord (or any prospective mortgagee or
purchaser) a statement in writing certifying:
(i) That this Lease is unmodified and is in full force and effect
(or if there have been modifications, that the same is in full force and
effect as modified, and setting forth the modifications);
(ii) The dates to which rent and charges payable by Tenant under
this Lease Agreement have been paid;
31
(iii) Whether or not there is any existing default by Landlord or
notice of default served by Tenant upon Landlord and stating the nature of any
such defaults; and
(iv) The commencement and ending dates of the Principal Term of
this Lease.
(c) It is intended that each such statement delivered pursuant to
this Section 37 may be relied upon by any existing or prospective mortgagee,
purchaser, assignee or sublessee.
(d) If the party required to deliver an estoppel certificate pursuant
to the provisions of this Section 38 shall incur any reasonable costs and
expenses (including reasonable attorneys' fees) in preparing or delivering the
estoppel certificate, the party requesting the estoppel certificate shall
reimburse the party issuing the estoppel certificate an amount equal to such
reasonable costs and expenses (including reasonable attorneys' fees).
39. Notices. All notices under this Lease Agreement shall be in writing
and shall be sent by: (i) United States registered or certified mail, return
receipt requested; postage prepaid; (ii) by nationally recognized overnight
courier (such as Federal Express), all charges prepaid; or (iii) by facsimile
transmission (with a same day confirmation copy sent by first-class mail);
addressed as follows:
If intended for Landlord:
Liberty Landing Associates
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Local Union #19
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
if intended for Tenant:
c/o President Riverboat Casinos, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esquire
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇, Esquire
Sable, Makoroff & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
and/or to such other addresses and/or fax number of which Landlord or Tenant
shall have given notice as herein provided. All such notices shall be deemed
to have been sufficiently given for all purposes hereof on the date of the
receipt thereof; and may be given on behalf of either party by its counsel.
40. Attornment.
(a) In the event of a termination of the Principal Term or Tenant's
rights and privileges under this Lease Agreement prior to the expiration date
of the Principal Term for any reason whatsoever (including, without
limitation, termination by reason of a default by Tenant of any of its
obligations under this Lease Agreement), Landlord covenants that with respect
to the period of time commencing as of the date of termination and ending as
of the date on which the Principal Term would have expired but for such early
termination: (i) Tenant's sublessees shall not be disturbed in their
possession of the Premises in accordance with the terms and conditions of
their respective subleases, except for such cause as would entitle Tenant to
terminate any such sublessee's sublease; (ii) each such sublease, if then in
existence, shall continue with the same force and effect as if Landlord, as
lessor, and the sublessee, as lessee, had entered into a lease containing the
same terms, covenants and conditions as those contained in the sublease; and
(iii) Landlord shall accept the attornment of any such sublessee as lessee to
Landlord.
(b) Landlord agrees, without limiting the effectiveness of the
covenants and agreements set forth in subsection 40(a), on request by Tenant
or any sublessee from time to time, promptly to execute, acknowledge and
deliver all such instruments or documents as may be requested by Tenant or any
sublessee in confirmation of the provisions set forth in subsection 40(a).
(c) Landlord agrees that Landlord shall send during the Principal
Term to any sublessee whose name and address is furnished to Landlord copies
of any notices of default to Tenant concurrently with the notices sent to
Tenant; and any such sublessee shall have the right, but shall not be
obligated, to cure or remedy any such default within the period provided in
this Lease Agreement and Landlord agrees to accept such performance on the
part of any such sublessee as though the same had been done and performed by
Tenant.
41. Partial Invalidity. If any term, covenant or condition of this Lease
Agreement shall be invalid or unenforceable, the remaining provisions of this
Lease Agreement shall not be affected thereby; and each term, covenant and
condition of this Lease Agreement shall be. valid and shall be enforced to the
extent permitted by law.
42. Counterparts. This Lease Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
33
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Lease Agreement shall be binding
when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected thereon as the
signatories,
43. PLC Agreement. Landlord has assigned to Tenant all of Landlord's
rights, title and interest in, to and under that certain Master Agreement to
Lease dated September 25, 1989 between Philadelphia Port Corporation and
Landlord ("PLC Agreement") leasehold estate in certain parcels of real
property described therein (the "PLC Parcel"). If Tenant elects to cause the
Principal Term to commence, Tenant may, at that time, at its option:
discontinue making further payments of the PLC Option Consideration and/or of
any other sum due under the PLC Agreement and permit the PLC Agreement to
lapse; or continue to make payments under the PLC Agreement and continue the
PLC Agreement in effect; or exercise its right to enter into a Lease for the
PLC Parcel (in which event Tenant shall, to the extent required by the
landlord of the PLC Parcel be obligated to pay all lump sum rental payments
due under the PLC Agreement as of the date on which Tenant executes the Lease
for the PLC Parcel). Tenant shall have no obligation to Landlord to continue
making payments of the PLC Option Consideration or any other sum due and
payable under the PLC Agreement. If Tenant does not cause the Principal Term
to commence, then Tenant shall, if requested by Landlord, reassign to Landlord
all of the rights, title and interest of Tenant in, to and under the PLC
Agreement.
44. Exclusive Efforts. Tenant agrees that throughout the Principal Term:
(a) Tenant shall use diligent efforts to obtain licenses for the
operation of gambling facilities at the Premises; and
(b) Neither Tenant nor any Tenant Affiliate will obtain (or endeavor
to obtain) a license for the operation of a gambling facility, nor will Tenant
nor any Tenant Affiliate operate a gambling facility, anywhere in the City of
Philadelphia, other than at the Premises.
45. Efforts to Cooperate and Assist.
(a) Each of Landlord and Tenant agrees, during the Principal Term to
use diligent efforts to obtain a second license to permit the operation of a
second gambling facility at the Premises.
(b) Landlord agrees to cooperate with Tenant, and to assist Tenant
(all at Tenant's sole cost and expense), in Tenant's efforts to obtain a
license to permit the operation of gambling facilities at the Premises.
46. Definitions.
(a) "Acceptance Notice". The term "Acceptance Notice', shall have in
this Lease the meaning designated in subsection 34(b) above.
34
(b) "business day". The term "business day" shall have in this Lease
the meaning designated in subsection 33 above.
(c) "certificate". The term "certificate" shall have in this Lease
the meaning designated in subsection 5(b) above.
(d) "Effective Rate". The term "Effective Rate" is used in this
Lease to mean the rate of interest per annum which is equal to the lower of
(i) four percent (4%) in excess of the Prime Rate in effect from time to time
(such Effective Rate to be changed on each date on which the Prime Rate is
changed), and (ii) the highest legal rate of interest permitted by applicable
law to be charged by Landlord to Tenant.
(e) "Environmental Statutes". The term "Environmental Statutes"
shall have in this Lease the meaning designated in subsection 15 (a) above.
(f) "Extension Notice". The term "Extension Notice" shall have in
this Lease the meaning designated in subsection 2(b)(i) above.
(g) "Extension Periods". The term "Extension Periods" shall have in
this Lease the meaning designated in subsection 2(b)(i) above.
(h) "Fixed Rent". The term "Fixed Rent" shall have in this Lease the
meaning designated in subsection 3 (a) (D) above.
(i) "Gambling facility". The term "gambling facility" shall have in
this Lease the meaning designated in subsection 3(a)(H) above.
(j) "Governmental Authority". The term "Governmental Authority"
shall have in this Lease the meaning designated in subsection 4(b)(i) above.
(k) "Gross Receipts". The term "Gross Receipts" shall have in this
Lease the meaning designated in subsection 3(a)(J)(i) above.
(l) "Hazardous Substances". The term "Hazardous Substances" is used
in this Lease to mean "hazardous substances" within the meaning of the federal
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601-9657, as amended by the Superfund Amendments and
Reauthorization Act of 1986, Public Law ▇▇. ▇▇-▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ (October 16,
1986), "regulated substances" within the meaning of Title I of the federal
Resource Conservation and Recovery Act, 42 U.S.C. Sections 6991-6991 (i) , and
any substances listed under any pertinent state definitions.
(m) "holiday". The term "holiday" shall have in this Lease the
meaning designated in subsection 33 above.
(n) "imposition". The term "imposition" shall have in this Lease the
meaning designated in Section 4 above.
(o) "Improvements". The term "Improvements shall have in this Lease
the meaning designated in subsection 7(a) (i) above.
35
(p) "Landlord". The term "Landlord" is used in this Lease to include
the Landlord named above and any subsequent owner of the Premises, as well as
their respective heirs, personal representatives, successors and assigns, each
of whom shall have the same rights, remedies, powers, authorities and
privileges as he would have had he originally signed this Lease as Landlord.
(q) "Landlord Gambling License". The term "Landlord Gambling
License,, shall have in this Lease the meaning designated in subsection
3.(a)(F) above.
(r) "Law". The term "Law" shall have in this Lease the meaning
designated in subsection 4(b)(i) above.
(s) "Lease Year". The term "Lease Year" shall have in this Lease the
meaning designated in subsection 3(a)(A) above.
(t) "Leasehold Mortgage". The term "Leasehold Mortgage" shall have
in this Lease the meaning designated in Section 36 above.
(u) "Net Gaming Win". The term "Net Gaming Win" shall have in this
Lease the meaning designated in subsection 3(a)(G) above.
(v) "New Lease". The term "New Lease" shall have in this Lease the
meaning designated in subsection 36(e) above.
(w) "Offer". The term "Offer" shall have in this Lease the meaning
designated in subsection 34(b) above.
(x) "Option Agreement". The term "Option Agreement" shall have in
this Lease the meaning designated in Subsection 2(a) above.
(y) "Percentage Rent". The term "Percentage Rent" shall have in this
Lease the meaning designated in subsection 3(a)(C) above.
(z) "Premises". The term "Premises" shall have in this Lease the
meaning designated in subsection 1(b) above.
(aa) "Principal Commencement Notice". The term "Principal Term
Commencement Notice" shall have in this Lease the meaning
designated in subsection 2(a) above.
(bb) "Prime Rate". The term "Prime Rate" is used in this Lease to
mean the rate of interest announced from time to time as its "Prime Rate" or
"base rate" by such national or state chartered bank in the United States of
America as shall be designated from time to time by Landlord.
(cc) "Principal Term". The term "Principal Term" shall have in this
Lease the meaning designated in subsection 2(a) above.
(dd) "Principal Term Rent". The term "Principal Term Rent" shall
have in this Lease the meaning designated in subsection 3(a) above.
36
(ee) "Recorded Agreement". The term "Recorded Agreement" shall have
in this Lease the meaning designated in subsection 4(b)(ii) above.
(ff) "Reminder Notice". The term "Reminder Notice,, shall have in
this Lease the meaning designated in subsection 25(b) above.
(gg) "Second Installment". The term "Second Installment" shall have
in this Lease the meaning designated in subsection 3(a) above.
(hh) "Subject Premises". The term "Subject Premises" shall have in
this Lease the meaning designated in subsection 34(b) above.
(ii) "Sublease". The term "Sublease" shall have in this Lease the
meaning designated in subsection 20(d) above.
(jj) "Subrent". The term "Subrent" shall have in this Lease the
meaning designated in subsection 20(d) above.
(kk) "Taken". The term "Taken" shall have in this Lease the meaning
designated in subsection 19(a) above.
(ll) "Tenant". The term "Tenant" is used in this Lease to include
the entity named above as Tenant as well as its successors and assigns, each
of whom shall be under the same obligations, liabilities and disabilities and
have only such rights, privileges and powers as he would have possessed had he
originally signed this Lease as Tenant.
(mm) "Tenant Affiliate". The term "Tenant Affiliate" is used in this
Lease to mean any entity, corporate or otherwise, that directly or indirectly
(through one or more intermediaries) controls or is controlled by, or is under
common control with, Tenant.
(nn) "Third Party". The term "Third Party" shall have in this Lease
the meaning designated in subsection 20(d) above.
(oo) "Violation". The term "Violation" shall have in this Lease the
meaning designated in subsection 32(a) above.
47. Option to Purchase. If Landlord is required to obtain a Landlord
Gambling License to permit the operation by Tenant of a gambling facility on
the Premises for any reason whatsoever (not limited to the circumstances
described in subsection 3(a)(F) above), and if Landlord (or the entity to
which Landlord has assigned this Lease pursuant to paragraph 3(f) hereof) does
not obtain the Landlord Gambling License on or prior to such time as Tenant or
contemporaneously with such time as Tenant obtains a gaming license or obtains
a finding of suitability for a gaming license (if a finding of suitability is
required under Pennsylvania law), whichever first occurs, then Tenant shall
thereafter have the option ("Option") to purchase the Premises by giving
notice to Landlord of the exercise of the Option. Upon the exercise by Tenant
of the Option, this Lease Agreement and the notice of Tenant's exercise of the
option shall constitute an agreement of sale and purchase between Landlord and
37
Tenant, whereby Landlord shall agree to sell and Tenant shall agree to
purchase the Premises upon the following terms and conditions:
(a) The purchase price ("Purchase Price") to be paid by Tenant to
Landlord for the Leased Premises shall be the Fair Market Value of the
Premises (determined as specified below) as of the Closing Date. The Purchase
Price shall be paid at Closing (as defined below), by wire transfer of funds
to Landlord's account.
(b) The closing and settlement ("Closing") of the sale and purchase
of the Premises pursuant to this Section 47 shall occur (the date on which
Closing is to occur being herein called the "Closing Date") on the date
specified by written notice from Tenant to Landlord (which date shall be no
later than 90 days after the date on which Tenant has given to Landlord
written notice of the exercise by Tenant of the Option). If the Closing Date
specified by Tenant will occur after the date specified in this Lease
Paragraph for the expiration of the Principal Term and if Tenant has not
caused the Principal Term to commence Lease, then the Principal Term shall
continue until the Closing Date.
(c) Landlord shall, at Closing, convey to Tenant fee simple title to
the Leased Premises by delivery of Landlord's special warranty deed, duly
executed and acknowledged by Landlord and in proper form for recording. Title
to the Leased Premises shall be good and marketable and shall be free and
clear of all liens, restrictions, easements, encroachments, title company
objections, or other title encumbrances, except for the title exceptions set
forth on the Leasehold Policy of Title Insurance issued to Tenant by
Commonwealth Land Title Insurance Company simultaneously with the execution of
this Lease Agreement, and except for any additional encumbrances as shall be
created by Tenant; and title to Premises shall be insurable as aforesaid at
ordinary rates by the Commonwealth Land Title Insurance Company pursuant to an
American Land Title Association Owner's Policy of Title Insurance - 1970-Form
B (revised November 17, 1970 and November 17, 1984).
(d) At Closing Tenant shall pay all realty transfer taxes.
(e) The tender of an executed Deed by Landlord and the tender by
Tenant of the Purchase Price at Closing are hereby mutually waived; but
nothing herein contained shall be construed as a wavier of Landlord's
obligation to deliver the Deed and/or of the concurrent obligation of Tenant
to pay the Purchase Price at Closing.
(f) (i) The "Fair Market Value of the Premises" shall be the amount
agreed upon by Landlord and Tenant. if Landlord and Tenant are unable to agree
upon the Fair Market Value of the Premises within 30 days after the date
(which may be prior to the exercise of the Options) on which Tenant shall have
requested that Landlord and Tenant attempt to agree upon the amount thereof,
then Landlord and Tenant shall submit the determination of the Fair Market
Value of the Premises to arbitration by a panel of three independent real
estate appraisers located in the City of Philadelphia (who shall be members of
the American Institute of Real Estate Appraisers (or an equivalent
38
organization), and who shall be persons who have not acted in any capacity for
either Landlord or Tenant) , one of whom shall be selected by Landlord, one of
whom shall be selected by Tenant, and one of whom shall be selected by the two
appraisers selected by Landlord and Tenant. If the two appraisers selected by
Landlord and Tenant are unable to agree upon the third appraiser, either
Landlord or Tenant, by giving ten (10) days notice to the other, may apply to
the then President of the Real Estate Board of Philadelphia County (or
comparable entity if the Real Estate Board of Philadelphia is not then in
existence) for the selection of the third appraiser who meets the
qualifications stated in this paragraph. Within thirty (30) days after the
appointment of the appraisers (i) Landlord shall submit to the appraisers the
lowest amount Landlord is willing to accept as the Fair Market Value of the
Premises (determined as set forth below) (together with any supporting data
which Landlord believes is relevant); and (ii) Tenant shall submit to the
appraisers the highest amount Tenant is willing to pay as the Fair Market
Value of the Premises (determined as set forth below in this subsection 2(c))
(together with any supporting data which Tenant believes is relevant). Within
thirty (30) days following the receipt from Landlord and Tenant of such
information; (i) if the designations of Fair Market Value of the Premises by
Landlord and by Tenant are within five percent (5%) of each other, then the
Fair Market Value of the Premises shall be deemed to be the average of the
Fair Market Values of the Premises designated by Landlord and Tenant; or (ii)
if the designations of Fair Market Value of the Premises by Landlord and
Tenant are not within five percent (5%) of each other, then the appraisers
shall determine which designation of Fair Market Value of the Premises, either
Landlord's or Tenant's, most closely reflects the Fair Market Value of the
Premises, taking into account the factors designated below. The determination
of the appraisers as to Fair Market Value of the Premises pursuant to the
provisions of the preceding sentence (it made pursuant to the provisions
thereof) shall be final and binding on Landlord and Tenant. If the
determination of Fair Market Value of the Premises is made pursuant to clause
(i) of the penultimate preceding sentence, then the costs and fees of the
appraisers shall be born equally by Landlord and Tenant; and if the
determination of Fair Market Value of the Premises is made pursuant to clause
(ii) of the penultimate preceding sentence, then the costs and fees of the
appraisers shall be born by the party whose statement of Fair Market Value of
the Premises is not used by the appraisers for the determination of the Fair
Market Value of the Premises.
(ii) The "Fair Market Value" of the Premises shall be determined
as of the Closing Date. The Fair Market Value of the Premises shall be
determined to reflect the gross purchase price that a ready, willing and able
Seller would accept and a ready, willing and able Buyer would pay for the
Premises for its highest and best permitted use in an arms-length transaction,
assuming that the Premises would be sold subject to the terms of this Lease
Agreement and assuming that the Principal Term had commenced, but without this
Section 47; provided, however, that if the determination of Fair Market Value
of the Premises is made pursuant to clause (ii) above, the appraisers shall
not take into account the fair market value of any improvements made to or
constructed upon the Premises by Tenant.
39
48. Amendment and Restatement of Lease Agreement. This Second Amendment
to Lease Agreement, when effective, fully restates, amends, supersedes and
replaces all of the terms and conditions of the Lease Agreement dated
December 14, 1993 and the First Amendment to Lease Agreement dated July 31,
1996. This Second Amendment to Lease Agreement shall be effective immediately
upon the delivery of written notice by Tenant (as Optionee) to Landlord (as
Optionor) to the effect that Tenant has exercised its Option to amend the
Lease Agreement pursuant to the terms of the Option Agreement. On and from
the date on which this Second Amendment to Lease Agreement becomes effective,
all references herein to the Lease Agreement shall, unless otherwise expressly
stated, be a reference to the terms of this Second Amendment to Lease
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
as of the day and year first above written.
WITNESS:
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
_________________________________ By: DELAWARE AVENUE
DEVELOPMENT CORPORATION -
Partner
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By: _________________________
President
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________________ By: DELAWARE WASHINGTON
CORPORATION - Partner
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________
President
TENANT:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________________ PRC-PHILADELPHIA, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: _________________________
V President
40
MEMORANDUM OF SECOND AMENDMENT TO LEASE
-----------------------------------------
THIS MEMORANDUM OF SECOND AMENDMENT TO LEASE is made as of the 31st day of
July, 1996, by and between LIBERTY LANDING ASSOCIATES, a Pennsylvania general
partnership ("Landlord") and PRESIDENT RIVERBOAT CASINO-PHILADELPHIA, INC., a
Pennsylvania corporation ("Tenant"), pursuant to Section 2 of the Act of June
2, 1959, P.L. 454, 21 P.S. Section 405, et seq., and is a memorandum of the
Second Amendment to Lease Agreement dated July 31, 1996, (the "Second
Amendment"), which Second Amendment amends a Lease Agreement dated December
14, 1993 (the "Lease") between Landlord, as lessor, and Tenant, as lessee. As
required by the aforesaid statute, the following additional information is
hereby provided with respect to the Lease and the First Amendment:
1. The name and address of the Landlord set forth in the Lease is:
Liberty Landing Associates
c/o Sheet Metal Workers' Association Local Union No. 19
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. The name and address of the Tenant set forth in the Lease is:
President Riverboat Casino-Philadelphia, Inc.
c/o President Casinos, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Chief Operating Officer
3. The date of the Lease is December 14, 1993.
4. The date of the Second Amendment to Lease Agreement is July 31, 1996.
5. The description of the demised premises which is the subject of the Lease
and the Second Amendment is as follows:
The "Premises" shall mean all that certain lot or piece of ground
situate in the 1st ▇▇▇▇ of the City of Philadelphia described
according to a Survey and Plan of Property made for Sheet Metal
Workers Local No. 19 by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Land Surveyor, No.
786A dated September 9, 1993, last revised September 28, 1993,
as more fully described by metes and bounds on Exhibit "A"
attached hereto and made a part hereof, together with all buildings
and other improvements situate thereon as of the date of this Lease
Agreement (including, without limitation, the pier structures now
situate thereon), and together with all appurtenances thereto
(including, without limitation, the easements appurtenant thereto
granted and created by that certain Cross Easement Agreement
dated the 25th day of September, 1989, as recorded in the
Department of Records in and for the city of Philadelphia in Deed
41
Book FHS 1540, at page 321 on January 22, 1990 and the
easements appurtenant thereto granted and created by that certain
Easement Agreement dated as of the 14th day of December, 1993
and recorded in the Department of Records in and for the city of
Philadelphia, at Deed Book VCS 548, Page 509, on December 29,
1993), and all other easements, rights of way and other rights and
benefits relating to the aforesaid tract or piece of land.
6. The following are the full provisions in the Lease with regard to the
commencement of the Principal Term:
7. "Principal Term. Tenant shall have the right, at Tenant's sole option, to
cause the principal term ("Principal Term") of this Lease to commence by
Tenant (as Optionee under the terms of that certain Option Agreement dated
July 31, 1996 between Landlord and Tenant, said Option Agreement being
hereinafter called the "Option Agreement") giving written notice (the
"Principal Term Commencement Notice") to Landlord (as Optionor) that
Tenant has exercised the Option to amend the Lease Agreement pursuant to
the terms of the Option Agreement. If Tenant gives a Principal Term
Commencement Notice to Landlord, the Principal Term shall commence on the
"Principal Term Commencement Date" which shall be thirty (30) days after
the date on which Tenant has given to Landlord the Principal Term
Commencement Notice; provided that such Principal Term Commencement Date
shall occur on the first day of the next following month after thirty (30)
days have elapsed from the giving of the Principal Term Commencement
Notice. For example, if Tenant delivers the Principal Term Commencement
Notice on February 15, 1998, then the Principal Term Commencement Date
shall occur on April 1, 1998. The Principal Term shall end on the date
which is ten (10) years from the Principal Term Commencement Date."
8. The Lease grants to Tenant, under certain circumstances, the right, at
Tenant's sole option, to extend the Principal Term for five (5) successive
periods of five years each, upon the same terms, provisions and conditions
which are in effect during the Principal Term.
9. The Lease grants to Tenant an option to purchase the demised premises
under certain circumstances. The previous expiration date of the option
(being January 1, 1998) has been extended to include the Principal Term
and any extensions of the Principal Term in the event that the
circumstances giving rise to such option occur.
10. No provision in this Memorandum of Lease shall be deemed to modify or
amend the provisions of the Lease or the Second Amendment.
42
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
as of the day and year first above written.
WITNESS LANDLORD:
By: Delaware Avenue
Development Corporation
Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
________________________ By :_________________________
President
________________________
________________________ By: Delaware-Washington
Corporation - Partner
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________ By:___________________________
President
WITNESS: TENANT:
President Riverboat Casino-PHILADELPHIA, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________ BY:____________________________
V-President
_______________________
43
COMMONWEALTH OF PENNSYLVANIA :
: SS:
COUNTY OF Philadelphia :
On July 31, 1996, BEFORE ME, a Notary Public in and for said County and
Sate, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me or satisfactorily proven
to be the President of Delaware Avenue Development Corporation, and who
acknowledged that he, as such President executed the foregoing Memorandum of
First Amendment to Lease Agreement for the purposes therein contained.
My Commission Expires: Dec. 20, 1999
/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________
Notary
44
COMMONWEALTH OF PENNSYLVANIA :
: SS:
COUNTY OF Philadelphia :
On July 31, 1996, BEFORE ME, a Notary Public in and for said County and
Sate, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me or satisfactorily
proven to be the President of Delaware-Washington Corporation, and who
acknowledged that he, as such President executed the foregoing Memorandum of
First Amendment to Lease Agreement for the purposes therein contained.
My Commission Expires: Dec. 20, 1999
/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________
Notary Public
45
COMMONWEALTH OF PENNSYLVANIA :
: SS:
COUNTY OF Philadelphia :
On July 31, 1996, BEFORE ME, a Notary Public in and for said County and
State, personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, known to me or satisfactorily
proven to be the Vice-President of President Riverboat Casino-Philadelphia,
Inc., and who acknowledged that he, as such Vice-President executed the
foregoing Memorandum of First Amendment to Lease Agreement for the purposes
therein contained.
My Commission Expires: Dec. 20, 1999
/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________
Notary Public
46
