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Exhibit 10(hh)
NET LEASE
THIS NET LEASE ("Lease"), made and entered into as of this 1st day of
August, 2001 by and between Williams Electronics Games, Inc., a Delaware
corporation (hereinafter referred to as "Landlord") and Midway Amusement Games,
LLC, a Delaware limited liability company (hereinafter referred to as "Tenant").
ARTICLE I
PREMISES
Landlord hereby leases to Tenant and Tenant leases from Landlord for the term,
at the rental, and upon all of the conditions set forth herein, that certain
building situated in the County of Cook, State of Illinois, commonly known as
2704 West Roscoe and located on the real property legally described on Exhibit A
attached hereto and incorporated herein by this reference (the "Premises").
ARTICLE II
TERM
2.01 Term. The initial term ("Initial Term") of this Lease shall be
five (5) years commencing on August 1, 2001 and ending on the fifth anniversary
thereof unless sooner terminated pursuant to any provision hereof.
2.02 Delay in Commencement. To the best of its knowledge, Landlord
expects to make delivery of the Premises within ninety (90) days of the
completion of its current renovations, estimated to be February 28, 2002
("Delivery Date"). From the commencement date hereof until such date, Landlord
and Tenant agree that Landlord shall deliver the following portion of the
Premises to Tenant within ninety (90) days of the commencement date: 9,743
square feet of the Premises, to include: office space, unloading dock area, and
shared restrooms, hallway and front reception area ("Temporary Premises").
Landlord shall be permitted to place its own receptionist in the reception area
until the Delivery Date.
Notwithstanding said commencement date, if for any reason Landlord
cannot deliver possession of the Temporary Premises to Tenant on said date,
Landlord shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Lease or the obligations of Tenant hereunder or
extend the term hereof, but in such case Tenant shall not be obligated to pay
any rent until possession of the Temporary Premises is tendered to Tenant;
provided, however, that if Landlord shall not have delivered possession of the
Temporary Premises within ninety (90) days from said commencement date, Tenant
may, at Tenant's option, by notice in writing to Landlord within ten (10) days
thereafter, cancel this Lease, in which event the parties shall be discharged
from all obligations hereunder. Upon Landlord's delivery of the Temporary
Premises, Tenant shall pay a pro-rata portion of rent and any and all taxes,
utilities, maintenance costs and insurance at the initial monthly rates set
forth below, until such time as possession of the Premises is delivered to the
Tenant, at which time Tenant shall pay rent and any and all taxes and insurance
at the full initial rates. If Tenant occupies the Temporary Premises prior to
said commencement date, such occupancy shall be subject to all provisions
hereof, such occupancy
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shall not advance the termination date, and Tenant shall pay a pro-rata portion
of rent and any and all taxes and insurance for such period at the initial
monthly rates set forth below. Tenant's payment of pro-rata portion shall be in
the form of reimbursement to Landlord. Such reimbursement shall be paid promptly
upon Landlord's presentation of invoice. Tenant may reasonably request from
Landlord verify records, receipts and documents detailing invoice charges.
Notwithstanding the above, in no event shall Tenant be liable to Landlord for
reimbursement of any portion of a late fee or other charge or penalty incurred
by Landlord in the payment of its bills.
Notwithstanding said Delivery Date, if for any reason Landlord cannot
deliver possession of the Premises to Tenant on said date, Landlord shall not be
subject to any liability therefor, nor shall such failure affect the validity of
this Lease or the obligations of Tenant hereunder or extend the term hereof, but
in such case Tenant shall not be obligated to pay rent until possession of the
Premises is tendered to Tenant; provided, however, that if Landlord shall not
have delivered possession of the Premises within ninety (90) days from said
Delivery Date, Tenant may, at Tenant's option, by notice in writing to Landlord
within ten (10) days thereafter, cancel this Lease, in which event the parties
shall be discharged from all obligations hereunder. If Tenant occupies the
Premises prior to said Delivery Date, such occupancy shall be subject to all
provisions hereof, such occupancy shall not advance the termination date, and
Tenant shall pay rent for such period at the initial monthly rates set forth
below. Upon taking full possession of the Premises, direct payment of such
expenses is the sole responsibility of Tenant.
2.03 Options. Provided that Tenant is not then in default under the
terms of this Lease, Landlord hereby grants to Tenant the option to renew this
Lease for two (2) additional and consecutive three (3) year terms (individually
"First Renewal Term" and "Second Renewal Term"; together "Renewals"; and
together with the Initial Term the "Term")), subject to the terms and conditions
set forth below. Said Renewals shall be upon the same terms, covenants and
conditions contained in this Lease, except that the Rent shall be as determined
in paragraph 2.04 below, and Tenant shall have no further option to renew or
extend this Lease beyond the Second Renewal Term.
Tenant's option for each Renewal Term shall be exercised by Tenant's
written notice (which shall be irrevocable) to Landlord of its exercise of such
option not later than one hundred eighty (180) days prior to expiration of the
Lease, or one hundred eighty (180) days prior to the expiration of the First
Renewal Term (the "Tenant's Renewal Notice"). If Tenant shall fail to deliver
Tenant's Renewal Notice in the time required then the options for renewal shall
be null and void and of no further force and effect. Tenant's options to renew
are contingent upon Tenant having exercised Tenant's renewal option for the
previous period(s) and failure to exercise any renewal option shall terminate
Tenant's right to exercise any subsequent renewal option. Notwithstanding the
foregoing, if at any time from the date Tenant exercises its right to renew this
Lease until the expiration of the then current Lease term Tenant is in default
of this Lease, then Tenant's exercise of its renewal of the Lease term shall be
deemed null and void and Tenant shall not be entitled to possession of the
Premises beyond the then current lease term.
2.04 Renewal Rate. In the event that Tenant provides proper written
notice, as determined in paragraph 2.03 above, of its exercise of the First
Renewal Term, the rent for each year of the First Renewal Term shall continue in
accordance with the rent set forth in paragraph 3.01 herein plus an additional
ten percent (10%). In the event that Tenant provides proper
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written notice, as determined in paragraph 2.03 above, of its exercise of the
Second Renewal Term, the rent for each year of the Second Renewal Term shall
continue in accordance with the rent set forth in paragraph 3.01 herein plus an
additional fourteen percent (14%).
ARTICLE III
RENT
3.01 Payment of Rent. Tenant shall pay to Landlord as rent for the
Premises $7.25 per square foot during the Initial Term payable in equal monthly
payments of $16,312.50, in advance, on the first (lst) day of each month of the
term hereof without any demand, notice, set off or abatement whatsoever. Rent
for any period during the term hereof which is for less than one month shall be
a pro rata portion of the monthly installment. Rent shall be payable in lawful
money of the United States to Landlord at the address stated herein or to such
other persons or at such other places as Landlord may designate in writing. The
obligation of Tenant to pay Rent shall be completely independent of all other
obligations of Tenant hereunder.
3.02 Net Lease. It is the intention of the parties hereto that this
Lease is a "net lease" and that Landlord shall receive the rent herein provided
as net income from the Premises, not diminished by (i) any imposition
(including, without limitation, any and all taxes, fees or duties) of any public
authority of any nature whatsoever during the entire Term of this Lease
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 (ii)
the cost of any repairs, replacements, restorations, improvements, maintenance,
utilities, insurance or other expenses or charges in any way connected with or
related to the Premises, or (iii) any other costs or expense involved in the
care, management, use, construction and operation of the Premises or any
improvements thereto. All such impositions, costs, expenses and charges shall be
paid by Tenant from and after the commencement date of this Lease and during the
entire Term of this Lease. Whenever in this Lease provision is made for the
doing of any act by Tenant it is understood and agreed that said act shall be
done by Tenant at its own cost and expense without any contribution or
reimbursement from Landlord whatsoever unless a contrary intent is specifically
expressed.
Except as specifically set forth herein, Landlord is not and shall not
be required to render any services of any kind to Tenant or for the Premises,
nor to incur any expense or make any payment with respect to the Premises, nor
to maintain, repair, rebuild or restore the Premises or any part of any of the
foregoing, and Tenant hereby expressly waives the right to make repairs at the
expense of Landlord, which right may be provided for by common law or in any
statute or law, whether in effect at the time of execution and delivery of this
Lease or hereafter enacted.
ARTICLE IV
USE
4.01 Use. The Premises shall be used and occupied only for general
office purposes, primarily, in connection with the design and development of
home-video amusement games, including the construction of prototype models and
any administrative functions incidental thereto, and for no other purpose.
4.02 Compliance with Law. Tenant shall, at Tenant's expense, comply
promptly in all material respects with all applicable statutes, ordinances,
rules, regulations, orders, restrictions of
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record and requirements ("Legal Requirements") in effect during the term or any
part of the term hereof regulating the Premises or the use by Tenant of the
Premises. Tenant shall not use nor permit the use of the Premises in any manner
that will violate any Legal Requirements or tend to create waste or a nuisance.
4.03 Condition of Premises. Tenant hereby accepts the Premises in its
"As Is" condition existing as of the date of the execution hereof, subject to
all applicable zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises, and to all matters
disclosed thereby and by any exhibits attached hereto. Tenant acknowledges that
neither Landlord nor Landlord's agent has made any representation or warranty as
to the condition of the Premises or the suitability of the Premises for the
conduct of Tenant's business, it being understood and agreed that Tenant is
relying solely upon its own inspection and investigation of the Premises.
ARTICLE V
MAINTENANCE, REPAIRS AND ALTERATIONS
5.01 Tenant's Obligations. Tenant shall keep in good order, condition
and repair, normal wear and use excepted, the Premises and every part thereof,
structural and nonstructural (whether the need for such repairs occurs as a
result of Tenant's use, any prior use, the elements or the age of such portion
of the Premises) including, without limiting the generality of the foregoing,
all plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities and equipment within the Premises, fixtures, walls (interior and
exterior), foundations, ceilings, roofs (interior and exterior), floors,
windows, doors, plate glass and skylights located within the Premises, and all
landscaping, driveways, parking lots, fences and signs located on the Premises
and sidewalks and parkways adjacent to the Premises, and whether requiring
repair or replacement.
Notwithstanding the foregoing, and in consideration of Tenant's
inspection of the Premises prior to the execution of this Lease, Landlord shall,
at its sole cost and obligation, repair and/or maintain the roof to a condition
such that the Premises are rendered suitable for the business of the Tenant. In
the event that Landlord does not maintain and/or repair the roof to such a
condition, Landlord shall indemnify Tenant for any damage to Tenant's property
caused as a result of this inability. Further, Tenant shall not be liable for
any repairs to the walls or foundation, or any damage caused by their disrepair,
as their condition exists on the date of execution hereof.
5.02 Surrender. On the last day of the term hereof or on any sooner
termination, Tenant shall surrender the Premises to Landlord in good repair and
condition and in broom clean condition. Tenant shall repair any damage to the
Premises occasioned by the removal of Tenant's trade fixtures, furnishings and
equipment pursuant to Paragraph 5.05(d), which repair shall include the patching
and filling of holes and repair of structural damage. Tenant shall remove all
paint placed on the exterior walls when Tenant ceases to occupy the building.
5.03 Landlord's Rights. If Tenant fails to perform Tenant's obligations
under this Paragraph, such failure being not commencing repairs within thirty
(30) days written demand by Landlord, Landlord may at its option (but shall not
be required to) enter upon the Premises, after ten (10) days' prior written
notice to Tenant, and put the same in good order, condition and
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repair, and the cost thereof together with interest thereon at the prime rate of
Bank of America + 3% (or, if the highest rate then allowable by law is less than
this rate, at the highest rate allowed by law) shall become due and payable as
additional rental to Landlord together with Tenant's next rental installment.
5.04 Landlord's Obligations. Except as specifically set forth herein,
it is intended by the parties hereto that Landlord have no obligation, in any
manner whatsoever, to repair and maintain the Premises or the building located
thereon or the equipment therein, whether structural or nonstructural, all of
which obligations are intended to be that of the Tenant under Paragraph 5.01
hereof. Tenant expressly waives the benefit of any statute now or hereinafter in
effect which would otherwise afford Tenant the right to make repairs at
Landlord's expense or to terminate this Lease because of Landlord's failure to
keep the premises in good order, condition and repair.
5.05 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior written approval,
make any alterations, improvements or additions in, on or about the Premises.
Any alterations, improvements or additions in or about the Premises that Tenant
shall desire to make which require the approval of Landlord shall be presented
to Landlord in written form, with proposed detailed plans. If Landlord approves,
such approval shall be deemed conditioned on Tenant acquiring a permit from
appropriate governmental agencies, the furnishing of a copy thereof to Landlord
prior to commencement of the work, and compliance in all material respects by
Tenant with all conditions of said permit in a prompt and expeditious manner. In
the event that Tenant makes any alterations, improvements or additions in or
about the Premises, Tenant specifically agrees that it shall (i) comply with
Legal Requirements in all material respects, (ii) maintain all insurance
required under the terms of this Lease, (iii) be responsible for all aspects of
the alternations, improvements, or additions to be made in or about the Premises
and (iv) indemnify the Landlord as required in Section 6.07. Landlord's approval
of Tenant's alterations, improvements, or additions in or about the Premises
shall not constitute Landlord's representation that such work complies with
Legal Requirements and both parties agree that Tenant shall remain fully
responsible for compliance with the same.
(b) Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in,
on or about the Premises, which claims are or may be secured by any mechanics or
materialmen's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than ten (10) days' notice prior to the commencement of
any alterations, improvements or additions in, on or about the Premises, and
Landlord shall have the right to post notices of non-responsibility. If Tenant
shall, in good faith, contest the validity of any such lien, claim or demand,
then Tenant shall, at its sole expense defend itself and Landlord against the
same and shall pay and satisfy any adverse judgment that may be rendered thereon
before the enforcement thereof against the Landlord or the Premises, on the
condition that if Landlord shall require, Tenant shall furnish to Landlord a
surety bond satisfactory to Landlord indemnifying Landlord against liability for
the same and holding the Premises free from the effect of judgment, lien or
claim. In addition, Tenant shall pay Landlord's attorneys' fees and costs.
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(c) All alterations, improvements and additions, which may be made
in, on or about the Premises, shall become the property of Landlord and remain
on and be surrendered with the Premises at the expiration of the Term. Tenant's
machinery and equipment, other than that which is affixed to the Premises so
that it cannot be removed without material damage to the Premises, shall remain
the property of Tenant and may be removed by Tenant subject to the provisions of
paragraph 5.02.
ARTICLE VI
INSURANCE AND INDEMNITY
6.01 Required Insurance. Tenant shall, as additional rent for the
Premises, pay the cost of all insurance required hereunder.
6.02 Liability Insurance. Tenant shall, at Tenant's expense obtain and
keep in force during the term of this Lease a policy of Combined Single Limit,
Bodily Injury and Property Damage Insurance insuring Landlord and Tenant against
any liability arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than Two Million Five Hundred Thousand
Dollars ($2,000,000) per occurrence with a Five Million Dollar ($5,000,000)
aggregate limit with Landlord listed as an additional insured. The policy shall
contain cross liability endorsements and shall insure performance by Tenant of
the indemnity provisions of this Article. The limits of said insurance shall
not, however, limit the liability of Tenant hereunder. If Tenant shall fail to
procure and maintain said insurance, Landlord may, but shall not be required to,
procure and maintain the same, but at the expense of Tenant.
6.03 Property Insurance.
Tenant shall obtain and keep in force during the Term of this
Lease a policy or policies of insurance covering loss or damage to the Premises,
in the amount of the full replacement value thereof, against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk), boiler, pressure vessel, air
conditioning equipment or electrical distribution equipment and sprinkler
leakage. Said insurance shall provide for payment of loss thereunder to Landlord
or to the holders of mortgages on the Premises. If the Tenant shall fail to
procure and maintain said insurance, Landlord but shall not be required to,
procure and maintain the same, but at the expense of Tenant. If such insurance
coverage has a deductible clause, Tenant shall be liable for the deductible
amount.
6.04 Worker's Compensation Insurance. Statutory worker's compensation
insurance and employer's liability insurance with limits of as required by law
per occurrence, covering all persons employed by Tenant in connection with any
work on the Premises and with respect to whom death, sickness, or bodily injury
claims could be asserted against the Tenant, Landlord or the Premises.
6.05 Insurance Policies. Tenant shall deliver to Landlord copies of
policies of such insurance or certificates evidencing the existence and amounts
of such insurance with loss
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payable clauses satisfactory to Landlord. No such policy shall be cancelable or
subject to reduction of coverage or other modification except after thirty (30)
days' prior written notice to each insured and each mortgagee to whom losses may
be payable. The proceeds of property insurance shall be payable to Landlord to
be applied toward Tenant's obligations of repair, restoration or reconstruction
as provided in Article VII hereof. Tenant shall, not less than thirty (30) days
prior to the expiration of such policies, furnish Landlord with renewals or
"binders" thereof, or Landlord may order such insurance and charge the cost
thereof to Tenant, which amount shall be payable by Tenant on demand. Tenant
shall not do or permit to be done anything which shall invalidate the insurance.
If Tenant does or permits to be done anything which shall increase the cost of
insurance, then Tenant shall pay for any additional premiums attributable to any
act or omission or operation of Tenant causing such increase in the cost of
insurance.
6.06 Waiver of Subrogation. Tenant and Landlord each hereby waive any
and all rights of recovery against the other, or against the officers,
employees, agents and representatives of the other, for loss of or damage to
such waiving party or its property or the property of others under its control
to the extent that such loss or damage is insured against under any insurance
policy in force at the time of such loss or damages. Tenant shall give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
6.07 Indemnity. Except as otherwise provided herein, Tenant shall
indemnify, defend and hold harmless Landlord from and against any and all
third-party claims arising from Tenant's use or occupancy of the Premises or
from the conduct of Tenant's business or from any activity, work or things done,
permitted or suffered by Tenant in or about the Premises and shall further
indemnify and hold harmless Landlord from and against any and all claims arising
from any breach or default in the performance of any obligation on Tenant's part
to be performed, or arising from any negligence of the Tenant, or any of
Tenant's agents, contractors, or employees, and from and against all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such
third-party claim or any action or proceeding brought thereon; and in case any
action or proceeding be brought against Landlord by reason of any such
third-party claim. Tenant, on notice from Landlord, shall defend the same at
Tenant's expense. Tenant, as a material part of the consideration to Landlord,
hereby assumes as between Tenant and Landlord all risk of damage to property or
injury to persons, in, on or about the Premises arising from any cause and
Tenant hereby waives all claims in respect thereof against Landlord.
6.08 Exemption of Landlord from Liability. Landlord shall not be liable
for injury to the person, property or business of Tenant, Tenant's employees,
agents, contractors, invitees, customers or other persons in or about the
Premises howsoever caused, including, by way of illustration and not by way of
limitation, injury caused by or resulting from fire, steam, electricity, gas,
water or rain, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether on account of conditions arising on the Premises, or on other
portions of any property of which the Premises are a part, or from other sources
or places, and regardless of whether the cause of such injury or the means of
repairing the same is inaccessible to Tenant. Landlord shall not be liable for
any injury arising from any act or omission of any other occupant other than
Landlord, its employees, directors, officers and agents, if any, of the property
of which the Premises are part.
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ARTICLE VII
REAL PROPERTY TAXES
7.01 Payment of Taxes. Tenant shall pay all Real Property Taxes (as
defined below) applicable to the Premises during the Term of this Lease. If any
such taxes paid by Tenant shall cover any period of time prior to or after the
expiration of the Term hereof, Tenant's share of such taxes shall be equitably
prorated to cover only the period of time within the tax fiscal year during the
Term of this Lease, and Landlord shall reimburse Tenant to the extent required.
If Tenant shall fail to pay any such taxes, Landlord shall have the right to pay
the same, in which case Tenant shall repay such amount to Landlord with Tenant's
next rent installment together with interest at the prime rate of Bank of
America +3% (or, if the highest rate then allowable by law is less than this
rate, at the highest rate allowable by law).
7.02 Definition of Real Property Taxes. As used herein, "Real Property
Taxes" shall include any form of tax assessment, lien, license fee, commercial
rental tax, ad valorem tax, gross receipts tax, levy, penalty, or tax (other
than net income, inheritance or estate taxes), imposed by any public or private
authority having the direct or indirect power to tax or impose assessments
against any legal or equitable interest of Landlord in the Premises or in the
real property of which the Premises are a part, or against Landlord's right to
rent or other income therefrom, or against Landlord's business of leasing the
Premises, or any tax or assessment imposed in substitution, partially or
totally, of any tax or assessment previously included within the definition of
Real Property Taxes, or any additional tax or assessment the nature of which was
previously included within the definition of Real Property Taxes.
7.03 Personal Property Taxes.
(a) Tenant shall pay prior to delinquency all taxes assessed
against and levied on trade fixtures, furnishings, equipment and all other
personal property of Tenant in, on or about the Premises. When possible, Tenant
shall cause said trade fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of
Landlord.
(b) If any of Tenant's personal property shall be assessed with
Landlord's real property, Tenant shall pay the same as part of Tenant's
obligation to pay all real property taxes.
ARTICLE VIII
UTILITIES
Tenant shall pay for all water, gas, heat, light, power, telephone and
other utilities and services supplied to the Premises, together with any taxes
thereon.
ARTICLE IX
ASSIGNMENT AND SUBLETTING
9.01 Landlord's Consent Required. Tenant shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Tenant's interest in this Lease or in the Premises,
without Landlord's prior written consent, which Landlord shall not unreasonably
withhold, provided, however, Tenant may assign all or any portion of its
interest in the lease to any of its affiliates. Any attempted assignment,
transfer,
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mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a breach of this Lease.
9.02 No Release of Tenant. Regardless of Landlord's consent, no
subletting or assignment shall release Tenant of Tenant's obligation or alter
the primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee of Tenant or any successor of Tenant, in the performance
of any of the terms hereof, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against any assignee. Landlord may consent
to subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and such action shall not relieve Tenant of liability under this Lease.
9.03 Attorneys' Fees. In the event Tenant shall assign or sublet the
Premises or request the consent of Landlord to any assignment or subletting or
if Tenant shall request the consent of Landlord for any act that Tenant proposes
to do, then Tenant shall pay Landlord's reasonable attorneys' fees of outside
counsel incurred in connection therewith.
ARTICLE X
DEFAULTS; REMEDIES
10.01 Default by Tenant. The occurrence of any one or more of the
following events shall constitute a material default and breach of this Lease by
Tenant:
(a) The failure by Tenant to make any payment of rent or any
other payment required to be made by Tenant hereunder, as and when due, where
such failure shall continue for a period of ten (10) days after written notice
thereof from Landlord received by Tenant.
(b) The failure in any material respects by Tenant to observe or
perform any of the covenants, conditions or provisions of this Lease to be
observed or performed by Tenant, other than described in Paragraph (a) above,
where such failure shall continue for a period of thirty (30) days after written
notice hereof from Landlord received by Tenant; provided, however, that if the
nature of Tenant's default is such that more than thirty (30) days are
reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commenced such cure within said thirty (30) day period and
thereafter diligently pursues such cure to completion.
10.02 Remedies. In the event of any such material default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default or breach under this Lease, at law
or in equity:
(a) To terminate the Lease, re-enter the Premises and remove all
persons and all property therefrom, either by summary dispossess proceedings or
by any suitable action at law or by force or otherwise, without giving any prior
notice thereto or being liable to indictment, prosecution or damages therefor
and repossess and enjoy the Premises. Landlord
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shall be entitled to recover from Tenant all damages incurred by Landlord by
reason of Tenant's default including, but not limited to, all rents and other
amounts due through the date of termination, the worth at the time of such
termination, of the excess, if any, of the amount of all Rent and other charges
required to be paid by Tenant under the terms of the Lease, the cost of
recovering possession of the Premises; expenses of reletting and reasonable
attorneys' fees of outside counsel.
(b) Maintain Tenant's right to possession in which case this
Lease shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the Rent
and other amounts due under the Lease as they become due hereunder.
(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of Illinois.
10.03 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
received by Landlord and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall have theretofore been
furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then Landlord shall not be in default if Landlord commences performance within
such 30-day period and thereafter diligently prosecutes the same to completion;
but in no event more than sixty (60) days from the occurrence of said default.
10.04 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within ten (10) days after
such amount shall be due, Tenant shall pay to Landlord a late charge equal to
the prime rate of the Bank of America + 3% of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
ARTICLE XI
ENVIRONMENTAL MATTERS
11.01 Tenant's Obligations. Tenant shall not generate, use, store, or
transport any petroleum, or hazardous substance ("Hazardous Substances"). The
term "Hazardous Substances" shall mean hazardous substances as defined pursuant
to the CERCLA, 42 U.S.C., Section 9601-9657, "regulated substances" within the
meaning of subtitle I of RCRA, 42 U.S.C., Section 6991-6991, et seq., "hazardous
substances, hazardous waste and industrial process
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waste" as defined pursuant to 415 ILCS 5/3.14-3.17 (as all of such statutes,
from time to time, be amended). Notwithstanding the foregoing, Tenant shall be
permitted to use certain Hazardous Substances, such as office cleaning supplies,
toner, ink, and any other products customarily used in the conduct of Tenant's
business. Tenant shall generate, use, store, or transport all such permitted
Hazardous Substances strictly in accordance with all applicable federal, state,
and local laws and regulations.
11.02 Tenant's Duties. During the Term, Tenant and its agents shall not
cause or permit to exist as a result of an intentional or unintentional action
or omission on its part, the releasing, spilling, leaking, pumping, pouring,
emitting, emptying or dumping ("Discharge") from, on, or about the Premises of
any Hazardous Substances. Tenant shall, within twenty-four (24) hours of
Tenant's knowledge of any Discharge, report such Discharge, in writing, to
Landlord and to all applicable governmental agencies as required by law. Tenant
shall immediately, at its own cost and expense, cause such Discharge to be
cleaned up or properly disposed of to the satisfaction of Landlord and in
compliance with all governmental agencies. Notwithstanding the foregoing, in the
event that any such Discharge is (i) a condition existing prior to the
commencement of the Term; or (ii) as a result of an intentional or unintentional
action on the part of Landlord and its agents , Landlord shall indemnify Tenant
in accordance with the terms of paragraph 11.04 herein.
11.03 Indemnification. In addition to any and all other indemnities and
obligations set forth in this Lease, Tenant hereby agrees to defend, indemnity ,
and hold harmless Landlord of, from, and against any and all expenses, losses,
or liabilities, but solely to the extent suffered by Landlord by reason of
Tenant's breach of any of the provisions of this Article, including, but not
limited to:
11.03.1 Except as specifically stated herein, any and all costs
that Landlord may incur in studying or remedying any
contamination of the Premises caused by Tenant or
occurring during the Term of this Lease.
11.03.2 Any and all legal and professional fees and cost incurred
by Landlord in connection with the foregoing.
11.04 Notwithstanding anything to the contrary in this Article 12,
Landlord shall indemnify and hold harmless Tenant with respect to any hazardous
substance or discharge affecting the Property in existence on or before to the
commencement date of this Lease, or caused by Landlord or its employees, agents
or affiliates, whether prior to or after such commencement date.
ARTICLE XII
CONDEMNATION
12.01 If the whole of the Premises should, be taken in condemnation
proceedings, or by any right of eminent domain or private purchase in lieu
thereof, or for any public or quasi-public use (any such taking of purchase
being herein called a "taking by condemnation"), this Lease shall terminate as
of the date possession of the Premises is given and delivered to such condemnor.
12.02 If a portion only of the Improvements shall be subject to a
taking by
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condemnation, then unless either party elects to terminate this Lease by written
notice to the other party served within 60 days of the date of such taking, this
Lease shall continue in full force and effect except that the monthly rental
specified under paragraph 3.01 above shall be diminished, from and after the
date of such taking, in the proportions that the floor area of the portion of
the Improvements so taken shall bear to the total floor area of the Improvements
immediately prior to such taking. In such case, Landlord shall promptly restore
the remaining portion of the Improvements so as to constitute a complete
architectural unit.
12.03 If a portion of the Premises which is unimproved or which, is
improved only with paving or ornamental plantings is subject to a taking by
condemnation, this Lease shall remain in full force and effect without reduction
or abatement of rent, unless such taking causes Tenant to be unable to use the
Improvements in substantially the same manner as used prior to such
condemnation.
12.01 Any award in condemnation proceedings, or any purchase price paid
in lieu of such award, shall be the sole and absolute property of Landlord, and
Tenant shall have no right or interest therein, Tenant hereby waiving and
relinquishing any and all rights or claims it may now or in the future have in
and to any condemnation award, or any purchase price paid in lieu thereof, for
or on account of its leasehold interest in the Premises; provided, however, that
nothing herein contained shall preclude Tenant from proving (to the extent
allowable by law) its damages with respect to leasehold improvements which
Tenant is permitted by the terms of this Lease to remove at the end of the lease
term, Tenant's moving expenses and Tenant's loss of profits and receiving an
award therefor.
ARTICLE XIII
REAL ESTATE BROKER
Tenant represents that Tenant has dealt with no broker in connection
with this Lease and that insofar as Tenant knows, no other broker or finder
negotiated this Lease or is entitled to any commission or fee in connection
herewith.
ARTICLE XIV
GENERAL PROVISIONS
14.01 Estoppel Certificate.
(a) Tenant shall at any time upon not less than ten (10) business
days' prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, (ii) acknowledging that there are not any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed
and (iii) certifying such other matters as Landlord, Landlord's lender or any
potential purchaser may reasonably request. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.
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(b) Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant (i) that this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) that there
are no uncured defaults in Landlord's performance, and (iii) that not more than
one month's rent has been paid in advance .
14.02 Landlord's Liability. The term "Landlord" as used herein shall
mean only the owner or owners at the time in question of the fee title or a
lessee's interest in a ground lease of the Premises, and provided that in the
event of any transfer of such title or interest, Landlord herein named (and in
case of any subsequent transfers the then grantor) shall be relieved from and
after the date of such transfer of all liability as respects Landlord's
obligations thereafter to be performed, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership. Notwithstanding the foregoing, in the event that (i) the then grantor
fails to fulfill the Landlord's obligations under Article XI herein, and (ii)
the Tenant has requested the then grantor cure such failure, and (iii) the then
grantor does not fulfill such obligations, then the obligations under Article XI
herein shall survive any transfer of title or interest and Landlord herein named
shall perform such obligations.
14.03 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
14.04 Interest on Past-Due Obligations. Except as expressly herein
provided, any amount due Landlord not paid when due shall bear interest at the
prime rate of the Bank of America + 3%per annum (or, if the highest rate then
allowable by law is less than this rate, at the highest rate allowed by law)
from the date due. Payment of such interest shall not excuse or cure any default
by Tenant under this Lease, provided, however, that interest shall not be
payable on late charges incurred by Tenant nor on any amounts upon which late
charges are paid by Tenant.
14.05 Captions. Article and paragraph captions are not a part hereof.
14.06 Incorporation of Prior Agreements; Amendments. This Lease
contains all agreements of the parties with respect to any matter mentioned
herein. No prior agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified in writing only, signed by the parties
in interest at the time of the modification.
14.07 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery or by certified mail,
and if given personally or by mail, shall be deemed sufficiently given if
addressed to Tenant or to Landlord at the address noted below:
If to Landlord: Williams Electronic Games, Inc.
800 South North Point Boulevard
Waukegan, Illinois 60085
Phone:(847) 785-3000
Fax: (847) 785-3111
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Attention: Orrin J. Edidin,
Executive Vice President,
Secretary & General Counsel
If to Tenant: Midway Amusement Games, LLC
2704 W. Roscoe
Chicago, Illinois 60618
Phone: (773) 961-2823
Fax: (773) 961-2299
Attention: Patrick Delahanty
With a copy to: Midway Games Inc.
3401 N. California Ave. (before August 6, 2001)
2704 W. Roscoe (after August 6, 2001)
Chicago, Illinois 60618
Phone (773) 961-2850
Fax: (773) 961-2299
Attention: General Counsel
Either party may by notice to the other specify a different address for
notice purposes except that upon Tenant's taking possession of the Premises, the
Premises shall constitute Tenant's address for notice purposes. A copy of all
notices required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such addresses as Landlord
may from time to time hereafter designate by notice to Tenant.
14.08 Waivers. No waiver by Landlord of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Tenant of the same or any other provision. Landlord's consent to or approval of
any act shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Tenant. The acceptance of rent
hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of
any provision hereof, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such rent.
14.09 Recording. Tenant shall not record this Lease without Landlord's
prior written consent.
14.10 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration of the term hereof without the express
written consent of Landlord, such occupancy shall be a tenancy from month to
month at a rental double the amount of the last monthly rental plus all other
charges payable hereunder, and upon all the terms hereof applicable to a
month-to-month tenancy.
14.11 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
14.12 Covenants and Conditions. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
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14.13 Binding Effect: Choice of Law. Subject to any provisions hereof
restricting assignment or subletting by Tenant, this Lease shall bind the
parties, their personal representatives, successors and assigns. This Lease
shall be governed by the laws of the State of Illinois.
14.14 Subordination.
(a) This Lease, at Landlord's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation for security
now or hereafter placed upon the real property of which the Premises are a part
and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground lessor shall elect to have this Lease prior to the
lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Tenant, this Lease shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this Lease is dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of
recording thereof.
(b) Tenant agrees to execute any documents requested by Landlord,
at Landlord's expense, or any mortgagee to confirm or effectuate such
subordination or to make this Lease prior to the lien or any mortgage, deed of
trust or ground lease, as the case may be.
14.15 Attorney's Fees. If either party brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to his reasonable attorneys' fees
to be paid by the losing party as fixed by the court.
14.16 Landlord's Access. Landlord and Landlord's agents shall have the
right to enter the Premises at reasonable times during normal business hours and
upon reasonable notice for the purpose of inspecting the same, showing the same
to prospective purchasers, or lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises or to the building of which
they are a part as Landlord may deem necessary or desirable. Landlord may at any
time place on or about the Premises any ordinary "For Sale" signs and Landlord
may at any time during the last 120 days of the term hereof place on or about
the Premises any ordinary "For Lease" signs, all without rebate of rent or
liability to Tenant.
14.17 Signs. Tenant shall not place any sign upon the Premises without
Landlord's prior written consent and approval, which consent and approval shall
not be unreasonably withheld.
14.18 Force Majeure. Except as provided otherwise in this Lease, both
parties shall be excused from performing any obligation under this Lease, and
any delay in the performance of any of the obligated parties's obligations under
this Lease shall be excused, if and so long as the performance of the obligation
is prevented, delayed or otherwise hindered by acts of God, fire, earthquake,
floods, explosion, acts of the elements, war, riots, mob violence, inability to
procure or a general shortage of skilled labor, equipment, facilities, materials
or supplies in the open market, failure of transportation, strikes, lockouts,
actions of labor unions, condemnation, court
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orders, laws or orders of governmental or military authorities or any other
cause, whether similar or dissimilar to the foregoing, not within the control of
the obligated party.
The parties hereto have executed this Lease the date first shown above.
LANDLORD TENANT
Williams Electronics Games, Inc., Midway Amusement Games, LLC,
a Delaware corporation a Delaware limited liability company
By: /s/ Orrin J. Edidin By: /s/ Harold H. Bach
---------------------------- ----------------------------
Name: Orrin J. Edidin Name: Harold H. Bach, Jr.
---------------------------- ----------------------------
Title: EVP, Sec'y & General Counsel Title: VP-Finance, Treasurer, & CFO
---------------------------- ----------------------------
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EXHIBIT A
Legal Description
That part of a tract of land lying East of a line which is 389 feet 3 inches
(measured along the North line of West Roscoe Street) East of the East line of
North California Avenue and which runs North from and at right angles to said
North line of West Roscoe Street bounded as follows:
Commencing at a point in the North and South center line of Section 24, Township
40 North, Range 13 East of the Third Principal Meridian 1238.5 feet North of the
South line of said Section running thence East to a point on or near the West
bank of the North branch of the Chicago River and distant from the point of
beginning 719.2 feet thence North 7 degrees 30 minutes West 303.5 feet to a
point West of said North branch of Chicago River thence West 679.2 feet to said
North and South center line of said Section thence South and along said North
and South center line 300 feet to the point of beginning subject however to the
establishment of a dock line of the North branch of the Chicago River 91.9 feet
West of the Easterly line of said premises as above described and parallel
thereto and to the appropriation of the East 91.9 feet of said premises for the
purpose of straightening said North branch of the Chicago River and bringing
said North branch upon the Westerly side thereof to the said proposed dock line
and making said North branch of said river opposite the East of said dock line
160 feet so that the East line of said premises as above described shall form
the center line of the said North branch when so straightened and improved half
of which is not needed for railroad purposes and excepting from the above
described premises the West 33 feet thereof dedicated for street purposes
October 26, 1914 and the South 33 feet thereof dedicated for street purposes
September 12, 1894 the above described premises having with abutting streets as
now opened and located a frontage on West Roscoe Street of 592.43 feet and a
frontage on North California Avenue 267 feet, all in Cook County, Illinois.
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