ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading symbol | Name of each exchange on which registered |
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Page | |
ITEM 1. | BUSINESS |
Location | Real Estate Assets Lease or Ownership Structure | Type of Facility | Gaming Square Footage | Gaming Machines | Table Games (1) | Hotel Rooms | |||||||
Northeast segment (2) | |||||||||||||
Ameristar East Chicago | East Chicago, IN | Pinnacle Master Lease | Dockside gaming | 70,000 | 1,790 | 85 | 288 | ||||||
Greektown Casino-Hotel | Detroit, MI | Greektown Lease | Land-based gaming | 100,000 | 2,601 | 62 | 400 | ||||||
Hollywood Casino Bangor | Bangor, ME | Penn Master Lease | Land-based gaming/racing | 31,750 | 726 | 14 | 152 | ||||||
Hollywood Casino at Charles Town Races | Charles Town, WV | Penn Master Lease | Land-based gaming/racing | 115,000 | 2,292 | 74 | 153 | ||||||
Hollywood Casino Columbus | Columbus, OH | Penn Master Lease | Land-based gaming | 168,000 | 2,082 | 70 | — | ||||||
Hollywood Casino Lawrenceburg (3) | Lawrenceburg, IN | Penn Master Lease | Dockside gaming | 146,500 | 1,521 | 58 | 463 | ||||||
Hollywood Casino at Penn National Race Course | Grantville, PA | Penn Master Lease | Land-based gaming/racing | 99,500 | 2,002 | 79 | — | ||||||
Hollywood Casino Toledo | Toledo, OH | Penn Master Lease | Land-based gaming | 125,000 | 2,041 | 69 | — | ||||||
Hollywood Gaming at Dayton Raceway | Dayton, OH | Penn Master Lease | Land-based gaming/racing | 33,500 | 1,045 | — | — | ||||||
Hollywood Gaming at Mahoning Valley Race Course | Youngstown, OH | Penn Master Lease | Land-based gaming/racing | 50,000 | 1,102 | — | — | ||||||
Marquee by Penn (4) | Pennsylvania | N/A | Land-based gaming | N/A | 75 | — | — | ||||||
Meadows Racetrack and Casino | Washington, PA | Meadows Lease | Land-based gaming/racing | 131,000 | 2,506 | 88 | — | ||||||
Plainridge Park Casino | Plainville, MA | Pinnacle Master Lease | Land-based gaming/racing | 50,000 | 1,250 | — | — | ||||||
South segment | |||||||||||||
1st Jackpot Casino | Tunica, MS | Penn Master Lease | Dockside gaming | 40,000 | 840 | 14 | — | ||||||
Ameristar Vicksburg | Vicksburg, MS | Pinnacle Master Lease | Dockside gaming | 70,000 | 1,212 | 27 | 148 | ||||||
Boomtown Biloxi | Biloxi, MS | Penn Master Lease | Dockside gaming | 35,500 | 653 | 19 | — | ||||||
Boomtown Bossier City | Bossier City, LA | Pinnacle Master Lease | Dockside gaming | 30,000 | 726 | 16 | 187 | ||||||
Boomtown New Orleans | New Orleans, LA | Pinnacle Master Lease | Dockside gaming | 30,000 | 1,156 | 31 | 150 | ||||||
Hollywood Casino Gulf Coast | Bay St. Louis, MS | Penn Master Lease | Land-based gaming | 51,000 | 926 | 20 | 291 | ||||||
Hollywood Casino Tunica | Tunica, MS | Penn Master Lease | Dockside gaming | 54,000 | 955 | 11 | 494 | ||||||
L’Auberge Baton Rouge | Baton Rouge, LA | Pinnacle Master Lease | Dockside gaming | 71,500 | 1,406 | 49 | 205 | ||||||
L’Auberge Lake Charles | Lake Charles, LA | Pinnacle Master Lease | Dockside gaming | 70,000 | 1,522 | 71 | 995 | ||||||
Margaritaville Resort Casino | Bossier City, LA | Margaritaville Lease | Dockside gaming | 30,000 | 1,221 | 50 | 395 | ||||||
West segment | |||||||||||||
Ameristar Black Hawk | Black Hawk, CO | Pinnacle Master Lease | Land-based gaming | 56,000 | 1,240 | 40 | 536 | ||||||
Cactus Petes and Horseshu | Jackpot, NV | Pinnacle Master Lease | Land-based gaming | 29,000 | 754 | 24 | 416 | ||||||
M Resort | Henderson, NV | Penn Master Lease | Land-based gaming | 96,000 | 1,089 | 40 | 390 | ||||||
Tropicana Las Vegas | Las Vegas, NV | Owned | Land-based gaming | 72,000 | 640 | 27 | 1,470 | ||||||
Zia Park Casino | Hobbs, NM | Penn Master Lease | Land-based gaming/racing | 18,000 | 732 | — | 154 | ||||||
Midwest segment | |||||||||||||
Ameristar Council Bluffs (5) | Council Bluffs, IA | Pinnacle Master Lease | Dockside gaming | 35,000 | 1,526 | 25 | 444 | ||||||
Argosy Casino Alton (6) | Alton, IL | Penn Master Lease | Dockside gaming | 23,000 | 741 | 12 | — | ||||||
Argosy Casino Riverside | Riverside, MO | Penn Master Lease | Dockside gaming | 56,000 | 1,299 | 42 | 258 | ||||||
Hollywood Casino Aurora | Aurora, IL | Penn Master Lease | Dockside gaming | 53,000 | 1,000 | 27 | — | ||||||
Hollywood Casino Joliet | Joliet, IL | Penn Master Lease | Dockside gaming | 50,000 | 1,100 | 26 | 100 | ||||||
Hollywood Casino at Kansas Speedway (7) | Kansas City, KS | Owned - JV | Land-based gaming | 95,000 | 2,000 | 41 | — | ||||||
Hollywood Casino St. Louis | Maryland Heights, MO | Penn Master Lease | Dockside gaming | 120,000 | 2,017 | 63 | 502 | ||||||
Prairie State Gaming (4) | Illinois | N/A | Land-based gaming | N/A | 1,904 | — | — | ||||||
River City Casino | St. Louis, MO | Pinnacle Master Lease | Dockside gaming | 90,000 | 1,945 | 53 | 200 | ||||||
Other | |||||||||||||
Freehold Raceway (8) | Freehold, NJ | Owned - JV | Standardbred racing | — | — | — | — | ||||||
Retama Park Racetrack (9) | Selma, TX | None - Managed | Thoroughbred racing | — | — | — | — | ||||||
Sam Houston Race Park (10) | Houston, TX | Owned - JV | Thoroughbred racing | — | — | — | — | ||||||
Sanford-Orlando Kennel Club | Longwood, FL | Owned | Greyhound racing | — | — | — | — | ||||||
Valley Race Park (10) | Harlingen, TX | Owned - JV | Greyhound racing | — | — | — | — | ||||||
2,395,250 | 49,637 | 1,327 | 8,791 |
(1) | Excludes poker tables |
(2) | We expect that Hollywood Casino York and Hollywood Casino Morgantown will be included within our Northeast segment. |
(3) | Includes 168 rooms at our hotel and event center located less than a mile from the gaming facility. |
(4) | VGT route operations |
(5) | Includes 284 rooms operated by a third party and located on land leased by us and subleased to such third party. |
(6) | The riverboat is owned by us and not subject to the Penn Master Lease. |
(7) | Pursuant to a joint venture with International Speedway Corporation (“International Speedway”) |
(8) | Pursuant to a joint venture with Greenwood Limited Jersey, Inc., a subsidiary of Greenwood Racing, Inc. |
(9) | Pursuant to a management contract with Retama Development Corporation |
(10) | Pursuant to a joint venture with MAXXAM, Inc. (“MAXXAM”) |
NAME | AGE | POSITION WITH THE COMPANY | ||
Jay Snowden | 43 | President and Chief Executive Officer | ||
William J. Fair | 57 | Executive Vice President and Chief Financial Officer | ||
Carl Sottosanti | 55 | Executive Vice President, General Counsel and Secretary |
ITEM 1A. | RISK FACTORS |
• | make it more difficult for us to satisfy our obligations with respect to our indebtedness and to obtain additional indebtedness; |
• | increase our vulnerability to general or regional adverse economic and industry conditions or a downturn in our business; |
• | require us to dedicate a substantial portion of our cash flow from operations to making lease payments, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and |
• | restrict our ability to raise capital, make acquisitions, divestitures and engage in other significant transactions. |
• | risks related to local and regional economic and competitive conditions, such as a decline in the number of visitors to a facility, a downturn in the overall economy in the market, a decrease in consumer spending on gaming activities in the market or an increase in competition within and outside the state in which each property is located; |
• | changes in local and state governmental laws and regulations (including smoking restrictions and changes in laws and regulations affecting gaming operations and taxes) applicable to a facility; |
• | impeded access to a facility due to weather, road construction or closures of primary access routes; |
• | work stoppages, organizing drives and other labor problems as well as issues arising in connection with agreements with horsemen and pari-mutuel clerks; and |
• | the occurrence of natural disasters or other adverse regional weather trends. |
• | make it more difficult for us to satisfy our obligations with respect to our indebtedness; |
• | limit our ability to participate in multiple or large development projects, including mergers and acquisitions, absent additional third party financing; |
• | increase our vulnerability to general or regional adverse economic and industry conditions or a downturn in our business; |
• | require us to dedicate a substantial portion of our cash flow from operations to satisfy our financing obligation and debt service, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | place us at a competitive disadvantage compared to our competitors that are not as highly leveraged; |
• | limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds; and |
• | result in an event of default if we fail to satisfy our obligations under our indebtedness or fail to comply with the financial and other restrictive covenants contained in our debt instruments, which event of default could result in all of our debt becoming immediately due and payable and could permit certain of our lenders to foreclose on any of our assets securing such debt. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
Location | Description of Owned Real Property | Acreage of Land | Description of Leased Real Property | Acreage of Land | |||||
Northeast segment | |||||||||
Ameristar East Chicago | East Chicago, IN | — | — | Land, buildings, boat | 22 | ||||
Greektown Casino-Hotel | Detroit, MI | — | — | Land, buildings | 8 | ||||
Hollywood Casino Bangor | Bangor, ME | — | — | Land, racetrack, buildings | 44 | ||||
Hollywood Casino at Charles Town Races | Charles Town and Ranson, WV | — | — | Land, racetrack, buildings | 299 | ||||
Hollywood Casino Columbus | Columbus, OH | — | — | Land, buildings | 116 | ||||
Hollywood Casino Lawrenceburg | Lawrenceburg, IN | Land, buildings | 3 | Land, buildings, boat | 105 | ||||
Hollywood Casino at Penn National Race Course | Grantville, PA | — | — | Land (1), racetrack, buildings | 574 | ||||
Hollywood Casino Toledo | Toledo, OH | — | — | Land, buildings | 42 | ||||
Hollywood Gaming at Dayton Raceway | Dayton, OH | — | — | Land, racetrack, buildings | 120 | ||||
Hollywood Gaming at Mahoning Valley Race Course | Youngstown, OH | — | — | Land, racetrack, buildings | 193 | ||||
Meadows Racetrack and Casino | Washington, PA | — | — | Land, racetrack, buildings | 156 | ||||
Plainridge Park Casino | Plainville, MA | — | — | Land, racetrack, buildings | 88 | ||||
South segment | |||||||||
1st Jackpot Casino | Tunica, MS | — | — | Land (2), buildings, boat | 147 | ||||
Ameristar Vicksburg | Vicksburg, MS | — | — | Land, buildings, boat | 74 | ||||
Boomtown Biloxi | Biloxi, MS | — | — | Land (3), buildings, boat | 26 | ||||
Boomtown Bossier City | Bossier City, LA | — | — | Land, buildings, boat | 22 | ||||
Boomtown New Orleans | New Orleans, LA | — | — | Land, buildings, boat | 54 | ||||
Hollywood Casino Gulf Coast | Bay St. Louis, MS | — | — | Land, buildings | 579 | ||||
Hollywood Casino Tunica | Tunica, MS | — | — | Land, buildings, boat | 68 | ||||
L’Auberge Baton Rouge | Baton Rouge, LA | Undeveloped land | 478 | Land, buildings, barge | 99 | ||||
L’Auberge Lake Charles | Lake Charles, LA | Undeveloped land | 54 | Land, buildings, barge | 235 | ||||
Margaritaville Resort Casino | Bossier City, LA | — | — | Land, buildings, barge | 34 | ||||
Resorts Casino Tunica (4) | Tunica, MS | — | — | Land, buildings, boat | 87 | ||||
West segment | |||||||||
Ameristar Black Hawk | Black Hawk, CO | — | — | Land, buildings | 104 | ||||
Cactus Petes and Horseshu | Jackpot, NV | — | — | Land, buildings | 80 | ||||
M Resort | Henderson, NV | — | — | Land, buildings | 84 | ||||
Tropicana Las Vegas | Las Vegas, NV | Land, buildings | 35 | — | — | ||||
Zia Park Casino | Hobbs, NM | — | — | Land, racetrack, buildings | 317 | ||||
Midwest segment | |||||||||
Ameristar Council Bluffs | Council Bluffs, IA | — | — | Land, buildings, boat | 59 | ||||
Argosy Casino Alton | Alton, IL | Boat | — | Land, buildings | 4 | ||||
Argosy Casino Riverside | Riverside, MO | — | — | Land (5), buildings, barge | 45 | ||||
Hollywood Casino Aurora | Aurora, IL | — | — | Land, buildings, barge | 2 | ||||
Hollywood Casino Joliet | Joliet, IL | — | — | Land, buildings, barge | 276 | ||||
Hollywood Casino at Kansas Speedway | Kansas City, KS | Land, buildings | 101 | — | — | ||||
Hollywood Casino St. Louis | Maryland Heights, MO | — | — | Land, buildings, barge | 221 | ||||
River City Casino | St. Louis, MO | — | — | Land (6), buildings, barge | 83 | ||||
Other | |||||||||
Freehold Raceway | Freehold, NJ | Land, racetrack, buildings | 51 | — | — | ||||
Cherry Hill, NJ | Undeveloped land | 10 | — | — | |||||
Retama Park Racetrack (7) | Selma, TX | Undeveloped land | 28 | — | — | ||||
Sam Houston Race Park | Houston, TX | Land, racetrack, buildings | 168 | — | — | ||||
Sanford-Orlando Kennel Club | Longwood, FL | Land, racetrack, buildings | 26 | — | — | ||||
Valley Race Park | Harlingen, TX | Land, racetrack, buildings | 71 | — | — | ||||
1,025 | 4,467 |
(1) | Of which, 393 acres is undeveloped land surrounding Hollywood Casino at Penn National Race Course |
(2) | Of which, 53 acres is wetlands. |
(3) | Of which, 3 acres is subject to the Penn Master Lease. |
(4) | Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease. |
(5) | Of which, 38 acres is subject to the Penn Master Lease. |
(6) | Of which, 24 acres is land surrounding River City Casino reserved for community and recreational facilities. |
(7) | The land, racetrack, and buildings used in the operations of Retama Park Racetrack are owned by the City of Selma, Texas. We own undeveloped land adjacent to the Retama Park Racetrack. |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
ITEM 6. | SELECTED FINANCIAL DATA |
For the year ended December 31, | |||||||||||||||||||
(in millions, except per share data) | 2019 (1) | 2018 (2) | 2017 (3) | 2016 | 2015 (4) | ||||||||||||||
Income statement data: | |||||||||||||||||||
Revenues (5) | $ | 5,301.4 | $ | 3,587.9 | $ | 3,148.0 | $ | 3,034.4 | $ | 2,838.3 | |||||||||
Total operating expenses | 4,729.5 | 2,953.8 | 2,702.3 | 2,491.4 | 2,370.5 | ||||||||||||||
Operating income | 571.9 | 634.1 | 445.7 | 543.0 | 467.8 | ||||||||||||||
Total other expenses | (485.8 | ) | (544.2 | ) | (470.8 | ) | (422.4 | ) | (411.2 | ) | |||||||||
Income (loss) before income taxes | 86.1 | 89.9 | (25.1 | ) | 120.6 | 56.6 | |||||||||||||
Income tax benefit (expense) | (43.0 | ) | 3.6 | 498.5 | (11.3 | ) | (55.9 | ) | |||||||||||
Net income | $ | 43.1 | $ | 93.5 | $ | 473.4 | $ | 109.3 | $ | 0.7 | |||||||||
Per share data: | |||||||||||||||||||
Earnings per common share—Basic | $ | 0.38 | $ | 0.96 | $ | 5.21 | $ | 1.21 | $ | 0.01 | |||||||||
Earnings per common share—Diluted | $ | 0.37 | $ | 0.93 | $ | 5.07 | $ | 1.19 | $ | 0.01 | |||||||||
Weighted-average shares outstanding—Basic | 115.7 | 97.1 | 90.9 | 82.9 | 80.0 | ||||||||||||||
Weighted-average shares outstanding—Diluted | 117.8 | 100.3 | 93.4 | 91.4 | 90.9 | ||||||||||||||
Other data: | |||||||||||||||||||
Depreciation and amortization | $ | 414.2 | $ | 269.0 | $ | 267.1 | $ | 271.2 | $ | 259.5 | |||||||||
Interest expense, net | $ | 534.2 | $ | 538.4 | $ | 463.2 | $ | 435.1 | $ | 431.6 | |||||||||
Project and maintenance capital expenditures | $ | 190.6 | $ | 92.6 | $ | 99.3 | $ | 97.2 | $ | 199.2 | |||||||||
Cash flows provided by (used in): | |||||||||||||||||||
Operating activities | $ | 703.9 | $ | 352.8 | $ | 477.8 | $ | 408.0 | $ | 417.4 | |||||||||
Investing activities | $ | (607.5 | ) | $ | (1,423.1 | ) | $ | (221.6 | ) | $ | (79.3 | ) | $ | (781.0 | ) | ||||
Financing activities | $ | (122.4 | ) | $ | 1,272.1 | $ | (207.0 | ) | $ | (339.9 | ) | $ | 395.5 | ||||||
Balance sheet data—As of December 31: | |||||||||||||||||||
Cash, cash equivalents and restricted cash | $ | 455.2 | $ | 481.2 | $ | 279.4 | $ | 230.2 | $ | 241.5 | |||||||||
Total assets (6) | $ | 14,194.5 | $ | 10,961.0 | $ | 5,234.8 | $ | 4,974.5 | $ | 5,138.8 | |||||||||
Total lease liabilities (6) | $ | 4,800.6 | $ | — | $ | — | $ | — | $ | — | |||||||||
Total financing obligations (6) | $ | 4,142.7 | $ | 7,148.4 | $ | 3,538.8 | $ | 3,514.1 | $ | 3,564.6 | |||||||||
Total debt | $ | 2,385.1 | $ | 2,412.2 | $ | 1,250.2 | $ | 1,415.5 | $ | 1,711.0 | |||||||||
Stockholders’ equity (deficit) (6) | $ | 1,851.9 | $ | 731.2 | $ | (73.1 | ) | $ | (543.3 | ) | $ | (678.0 | ) |
(1) | Includes the full year impact of the Pinnacle Acquisition and the acquisitions of Margaritaville in January 2019 and Greektown in May 2019. During the year ended December 31, 2019, we recorded impairment losses on our goodwill and other intangible assets of $170.6 million. During the year ended December 31, 2019, interest expense associated with the Penn Master Lease decreased by $181.2 million as a result of the adoption of ASC 842 (as defined in footnote (6) below), interest expense associated with the Pinnacle Master Lease increased by $126.0 million, and interest expense incurred on long-term debt increased by $50.8 million. |
(2) | Includes the impact of the acquisition of Pinnacle in October 2018. In addition, we incurred $95.0 million in costs, primarily associated with the Pinnacle Acquisition, a $21.0 million loss on early extinguishment of debt, and a $34.3 million long-lived asset impairment charge. During the year ended December 31, 2018, we recorded $63.0 million of interest expense associated with the Pinnacle Master Lease. |
(3) | During the year ended December 31, 2017, we recorded impairment losses on our goodwill and other intangible assets of $18.0 million and a provision for loan losses and unfunded loan commitments of $89.8 million. In addition, during the year ended December 31, 2017, we released $741.9 million of our deferred tax valuation allowance and recorded a $261.3 million write-down of our deferred tax assets due to the reduction of the corporate tax rate from 35% to 21%. |
(4) | During the year ended December 31, 2015, we recorded impairment losses on our other intangible assets of $40.0 million related to the write-off of our Plainridge Park Casino gaming license and a write-down of the gaming license at Hollywood Gaming at Dayton Raceway. |
(5) | On January 1, 2018, the Company adopted Accounting Standard Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”), using a modified retrospective approach, which did not require that prior years presented be restated as of the date of initial application. The adoption of ASC 606 did not materially impact the comparability of any of the selected financial information above. |
(6) | On January 1, 2019, the Company adopted ASC Topic 842, “Leases” (“ASC 842”), using a modified retrospective approach, which did not require that prior years presented be restated. Upon adoption of ASC 842, among other items, we reduced property and equipment, net, by $1,571.7 million, recorded right-of-use assets and corresponding lease liabilities of $4,030.8 million, reduced the financing obligations by $2,954.1 million, and a recorded a cumulative-effect adjustment to retained earnings of $1,085.7 million. See Note 3, “New Accounting Pronouncements,” of the accompanying Consolidated Financial Statements for more information on the impact of the adoption of ASC 842. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
For the year ended December 31, | |||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | ||||||||
Revenues: | |||||||||||
Northeast segment | $ | 2,399.9 | $ | 1,891.5 | $ | 1,756.6 | |||||
South segment | 1,118.9 | 394.4 | 224.3 | ||||||||
West segment | 642.5 | 437.9 | 380.4 | ||||||||
Midwest segment | 1,094.5 | 823.7 | 735.0 | ||||||||
Other (1) | 47.5 | 40.4 | 51.7 | ||||||||
Intersegment eliminations (2) | (1.9 | ) | — | — | |||||||
Total | $ | 5,301.4 | $ | 3,587.9 | $ | 3,148.0 | |||||
Net income | $ | 43.1 | $ | 93.5 | $ | 473.4 | |||||
Adjusted EBITDAR: | |||||||||||
Northeast segment | $ | 720.8 | $ | 583.8 | $ | 549.3 | |||||
South segment | 369.8 | 118.9 | 62.6 | ||||||||
West segment | 198.8 | 114.3 | 72.7 | ||||||||
Midwest segment | 403.6 | 294.3 | 249.7 | ||||||||
Other (1) | (87.8 | ) | (68.1 | ) | (55.2 | ) | |||||
Total (3) | 1,605.2 | 1,043.2 | 879.1 | ||||||||
Rent expense associated with triple net operating leases (4) | (366.4 | ) | (3.8 | ) | — | ||||||
Adjusted EBITDA (5) | $ | 1,238.8 | $ | 1,039.4 | $ | 879.1 | |||||
Net income margin | 0.8 | % | 2.6 | % | 15.0 | % | |||||
Adjusted EBITDAR margin (6) | 30.3 | % | 29.1 | % | 27.9 | % | |||||
Adjusted EBITDA margin (7) | 23.4 | % | 29.0 | % | 27.9 | % |
(1) | The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s joint venture interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive, which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and our live and televised poker tournament series that operates under the trademark, Heartland Poker Tour (“HPT”). Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead costs, which consist of certain expenses, such as payroll, professional fees, travel expenses and other general and administrative expenses that do not directly relate to or have not otherwise been allocated to a property. |
(2) | Represents the elimination of intersegment revenues associated with Penn Interactive and HPT. |
(3) | The total is a mathematical calculation derived from the sum of the reportable segments (as well as the Other category and intersegment eliminations). As noted within “Non-GAAP Financial Measures” below, Adjusted EBITDAR is presented on a consolidated basis outside the financial statements solely as a valuation metric. Adjusted EBITDAR increased for the year ended December 31, 2019, as compared to the prior year, principally due to the acquisitions of Pinnacle, Margaritaville, and Greektown, which contributed a combined $695.0 million. Adjusted EBITDAR increased for the year ended December 31, 2018, as compared to the prior year, principally due to the acquisition of Pinnacle, which contributed $113.2 million. |
(4) | Solely comprised of rent expense associated with the operating lease components contained within the Master Leases (primarily land), the Margaritaville Lease, the Greektown Lease, and the Meadows Lease (referred to collectively as our “triple net operating |
(5) | Adjusted EBITDA increased for the year ended December 31, 2019, as compared to the prior year, due to the acquisitions of Pinnacle, Margaritaville, and Greektown, which contributed a combined $534.9 million, offset by rent expense associated with the Penn Master Lease of $206.3 million. Adjusted EBITDA increased for the year ended December 31, 2018, as compared to the prior year, due to the acquisition of Pinnacle, which contributed $109.4 million. Upon adoption of Accounting Standards Codification (“ASC”) Topic 842, “Leases” (“ASC 842”) on January 1, 2019, certain components (primarily land) of the Penn Master Lease were classified as operating leases (recorded to rent expense) rather than financing obligations (recorded to interest expense) in the prior years. As rent expense is a normal, recurring cash operating expense, it is included within the calculation of Adjusted EBITDA. |
(6) | As noted within “Non-GAAP Financial Measures” below, Adjusted EBITDAR margin is presented on a consolidated basis outside the financial statements solely as a valuation metric. |
(7) | Adjusted EBITDA margin decreased for the year ended December 31, 2019, as compared to the prior year, due to the adoption of ASC 842 (see footnote (5) above). Adjusted EBITDA margin increased for the year ended December 31, 2018, as compared to the prior year, principally due to the acquisition of Pinnacle. |
For the year ended December 31, | $ Change | % Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Revenues (1) | |||||||||||||||||||||||||
Gaming | $ | 4,268.7 | $ | 2,894.9 | $ | 2,692.0 | $ | 1,373.8 | $ | 202.9 | 47.5 | % | 7.5 | % | |||||||||||
Food, beverage, hotel and other | 1,032.7 | 629.7 | 601.7 | 403.0 | 28.0 | 64.0 | % | 4.7 | % | ||||||||||||||||
Management service and license fees | — | 6.0 | 11.7 | (6.0 | ) | (5.7 | ) | (100.0 | )% | (48.7 | )% | ||||||||||||||
Reimbursable management costs | — | 57.3 | 26.1 | (57.3 | ) | 31.2 | (100.0 | )% | 119.5 | % | |||||||||||||||
5,301.4 | 3,587.9 | 3,331.5 | 1,713.5 | 256.4 | 47.8 | % | 7.7 | % | |||||||||||||||||
Less: Promotional allowances | — | — | (183.5 | ) | — | 183.5 | — | (100.0 | )% | ||||||||||||||||
Total revenues | $ | 5,301.4 | $ | 3,587.9 | $ | 3,148.0 | $ | 1,713.5 | $ | 439.9 | 47.8 | % | 14.0 | % |
(1) | The adoption of ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”) as of January 1, 2018 using the modified retrospective transition approach impacted the year-over-year comparability of gaming revenues; food, beverage, hotel and other revenues; reimbursable management costs; and promotional allowances; but had minimal impact on total revenues. For the year ended December 31, 2017, the retail value of accommodations, food and beverage, hotel and other services furnished to our customers without charge was included in gross revenues, then deducted as promotional allowances in determining net revenues. |
For the year ended December 31, | $ Change | % Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||
Gaming | $ | 2,281.8 | $ | 1,551.4 | $ | 1,365.0 | $ | 730.4 | $ | 186.4 | 47.1 | % | 13.7 | % | |||||||||||
Food, beverage, hotel and other | 672.7 | 439.3 | 421.8 | 233.4 | 17.5 | 53.1 | % | 4.1 | % | ||||||||||||||||
General and administrative | 1,187.7 | 618.9 | 514.5 | 568.8 | 104.4 | 91.9 | % | 20.3 | % | ||||||||||||||||
Reimbursable management costs | — | 57.3 | 26.1 | (57.3 | ) | 31.2 | (100.0 | )% | 119.5 | % | |||||||||||||||
Depreciation and amortization | 414.2 | 269.0 | 267.1 | 145.2 | 1.9 | 54.0 | % | 0.7 | % | ||||||||||||||||
Impairment losses | 173.1 | 34.9 | 18.0 | 138.2 | 16.9 | 396.0 | % | 93.9 | % | ||||||||||||||||
Provision for (recoveries on) loan loss and unfunded loan commitments | — | (17.0 | ) | 89.8 | 17.0 | (106.8 | ) | (100.0 | )% | N/M | |||||||||||||||
Total operating expenses | $ | 4,729.5 | $ | 2,953.8 | $ | 2,702.3 | $ | 1,775.7 | $ | 251.5 | 60.1 | % | 9.3 | % |
For the year ended December 31, | $ Change | % Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Other income (expenses) | |||||||||||||||||||||||||
Interest expense, net | $ | (534.2 | ) | $ | (538.4 | ) | $ | (463.2 | ) | $ | 4.2 | $ | (75.2 | ) | (0.8 | )% | 16.2 | % | |||||||
Income from unconsolidated affiliates | $ | 28.4 | $ | 22.3 | $ | 18.7 | $ | 6.1 | $ | 3.6 | 27.4 | % | 19.3 | % | |||||||||||
Loss on early extinguishment of debt | $ | — | $ | (21.0 | ) | $ | (24.0 | ) | $ | 21.0 | $ | 3.0 | (100.0 | )% | (12.5 | )% | |||||||||
Income tax benefit (expense) | $ | (43.0 | ) | $ | 3.6 | $ | 498.5 | $ | (46.6 | ) | $ | (494.9 | ) | N/M | (99.3 | )% | |||||||||
Other | $ | 20.0 | $ | (7.1 | ) | $ | (2.3 | ) | $ | 27.1 | $ | (4.8 | ) | N/M | 208.7 | % |
For the year ended December 31, | $ Change | % / bps Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Revenues (1): | |||||||||||||||||||||||||
Gaming | $ | 2,117.1 | $ | 1,644.2 | $ | 1,583.9 | $ | 472.9 | $ | 60.3 | 28.8 | % | 3.8 | % | |||||||||||
Food, beverage, hotel and other | 282.8 | 194.6 | 223.2 | 88.2 | (28.6 | ) | 45.3 | % | (12.8 | )% | |||||||||||||||
Management service and licensing fees | — | 5.9 | 11.6 | (5.9 | ) | (5.7 | ) | (100.0 | )% | (49.1 | )% | ||||||||||||||
Reimbursable management costs | — | 46.8 | — | (46.8 | ) | 46.8 | (100.0 | )% | N/C | ||||||||||||||||
2,399.9 | 1,891.5 | 1,818.7 | 508.4 | 72.8 | 26.9 | % | 4.0 | % | |||||||||||||||||
Less: Promotional allowances | — | — | (62.1 | ) | — | 62.1 | — | (100.0 | )% | ||||||||||||||||
Total revenues | $ | 2,399.9 | $ | 1,891.5 | $ | 1,756.6 | $ | 508.4 | $ | 134.9 | 26.9 | % | 7.7 | % | |||||||||||
Adjusted EBITDAR | $ | 720.8 | $ | 583.8 | $ | 549.3 | $ | 137.0 | $ | 34.5 | 23.5 | % | 6.3 | % | |||||||||||
Adjusted EBITDAR margin | 30.0 | % | 30.9 | % | 31.3 | % | (90) bps | (40) bps |
(1) | See footnote (1) to the consolidated revenues table above. |
For the year ended December 31, | $ Change | % / bps Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Revenues (1): | |||||||||||||||||||||||||
Gaming | $ | 831.1 | $ | 302.9 | $ | 203.0 | $ | 528.2 | $ | 99.9 | 174.4 | % | 49.2 | % | |||||||||||
Food, beverage, hotel and other | 287.8 | 91.5 | 52.1 | 196.3 | 39.4 | 214.5 | % | 75.6 | % | ||||||||||||||||
1,118.9 | 394.4 | 255.1 | 724.5 | 139.3 | 183.7 | % | 54.6 | % | |||||||||||||||||
Less: Promotional allowances | — | — | (30.8 | ) | — | 30.8 | — | (100.0 | )% | ||||||||||||||||
Total revenues | $ | 1,118.9 | $ | 394.4 | $ | 224.3 | $ | 724.5 | $ | 170.1 | 183.7 | % | 75.8 | % | |||||||||||
Adjusted EBITDAR | $ | 369.8 | $ | 118.9 | $ | 62.6 | $ | 250.9 | $ | 56.3 | 211.0 | % | 89.9 | % | |||||||||||
Adjusted EBITDAR margin | 33.1 | % | 30.1 | % | 27.9 | % | 300 bps | 220 bps |
(1) | See footnote (1) to the consolidated revenues table above. |
For the year ended December 31, | $ Change | % / bps Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Revenues (1): | |||||||||||||||||||||||||
Gaming | $ | 374.3 | $ | 228.0 | $ | 219.7 | $ | 146.3 | $ | 8.3 | 64.2 | % | 3.8 | % | |||||||||||
Food, beverage, hotel and other | 268.2 | 199.4 | 177.4 | 68.8 | 22.0 | 34.5 | % | 12.4 | % | ||||||||||||||||
Reimbursable management costs | — | 10.5 | 26.1 | (10.5 | ) | (15.6 | ) | (100.0 | )% | (59.8 | )% | ||||||||||||||
642.5 | 437.9 | 423.2 | 204.6 | 14.7 | 46.7 | % | 3.5 | % | |||||||||||||||||
Less: Promotional allowances | — | — | (42.8 | ) | — | 42.8 | — | (100.0 | )% | ||||||||||||||||
Total revenues | $ | 642.5 | $ | 437.9 | $ | 380.4 | $ | 204.6 | $ | 57.5 | 46.7 | % | 15.1 | % | |||||||||||
Adjusted EBITDAR | $ | 198.8 | $ | 114.3 | $ | 72.7 | $ | 84.5 | $ | 41.6 | 73.9 | % | 57.2 | % | |||||||||||
Adjusted EBITDAR margin | 30.9 | % | 26.1 | % | 19.1 | % | 480 bps | 700 bps |
(1) | See footnote (1) to the consolidated revenues table above. |
For the year ended December 31, | $ Change | % / bps Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Revenues (1): | |||||||||||||||||||||||||
Gaming | $ | 938.1 | $ | 719.8 | $ | 685.4 | $ | 218.3 | $ | 34.4 | 30.3 | % | 5.0 | % | |||||||||||
Food, beverage, hotel and other | 156.4 | 103.9 | 96.8 | 52.5 | 7.1 | 50.5 | % | 7.3 | % | ||||||||||||||||
1,094.5 | 823.7 | 782.2 | 270.8 | 41.5 | 32.9 | % | 5.3 | % | |||||||||||||||||
Less: Promotional allowances | — | — | (47.2 | ) | — | 47.2 | — | (100.0 | )% | ||||||||||||||||
Total revenues | $ | 1,094.5 | $ | 823.7 | $ | 735.0 | $ | 270.8 | $ | 88.7 | 32.9 | % | 12.1 | % | |||||||||||
Adjusted EBITDAR | $ | 403.6 | $ | 294.3 | $ | 249.7 | $ | 109.3 | $ | 44.6 | 37.1 | % | 17.9 | % | |||||||||||
Adjusted EBITDAR margin | 36.9 | % | 35.7 | % | 34.0 | % | 120 bps | 170 bps |
(1) | See footnote (1) to the consolidated revenues table above. |
For the year ended December 31, | |||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | ||||||||
Net income | $ | 43.1 | $ | 93.5 | $ | 473.4 | |||||
Income tax expense (benefit) | 43.0 | (3.6 | ) | (498.5 | ) | ||||||
Loss on early extinguishment of debt | — | 21.0 | 24.0 | ||||||||
Income from unconsolidated affiliates | (28.4 | ) | (22.3 | ) | (18.7 | ) | |||||
Interest expense, net | 534.2 | 538.4 | 463.2 | ||||||||
Other expense (income) | (20.0 | ) | 7.1 | 2.3 | |||||||
Operating income | 571.9 | 634.1 | 445.7 | ||||||||
Stock-based compensation (1) | 14.9 | 12.0 | 7.8 | ||||||||
Cash-settled stock-based award variance (1)(2) | 0.8 | (19.6 | ) | 23.4 | |||||||
Loss on disposal of assets (1) | 5.5 | 3.2 | 0.2 | ||||||||
Contingent purchase price (1) | 7.0 | 0.5 | (6.8 | ) | |||||||
Pre-opening and acquisition costs (1) | 22.3 | 95.0 | 9.7 | ||||||||
Depreciation and amortization | 414.2 | 269.0 | 267.1 | ||||||||
Impairment losses | 173.1 | 34.9 | 18.0 | ||||||||
Provision for (recoveries on) loan loss and unfunded loan commitments | — | (17.0 | ) | 89.8 | |||||||
Insurance recoveries, net of deductible charges (1) | (3.0 | ) | (0.1 | ) | (0.3 | ) | |||||
Income from unconsolidated affiliates | 28.4 | 22.3 | 18.7 | ||||||||
Non-operating items for Kansas JV (3) | 3.7 | 5.1 | 5.8 | ||||||||
Adjusted EBITDA | 1,238.8 | 1,039.4 | 879.1 | ||||||||
Rent expense associated with triple net operating leases (1) | 366.4 | 3.8 | — | ||||||||
Adjusted EBITDAR | $ | 1,605.2 | $ | 1,043.2 | $ | 879.1 | |||||
Net income margin | 0.8 | % | 2.6 | % | 15.0 | % | |||||
Adjusted EBITDA margin | 23.4 | % | 29.0 | % | 27.9 | % | |||||
Adjusted EBITDAR margin | 30.3 | % | 29.1 | % | 27.9 | % |
(1) | These items are included in “General and administrative” within the Company’s Consolidated Statements of Income. |
(2) | Our cash-settled stock-based awards are adjusted to fair value each reporting period based primarily on the price of the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards. During the year ended December 31, 2019, the price of the Company’s common stock increased, which resulted in an unfavorable variance to budget. During the year ended December 31, 2018, the price of the Company’s common stock decreased, which resulted in a favorable variance to budget. |
(3) | Consists principally of depreciation and amortization associated with the operations of Hollywood Casino at Kansas Speedway. |
For the year ended December 31, | $ Change | % Change | |||||||||||||||||||||||
(dollars in millions) | 2019 | 2018 | 2017 | 2019 vs. 2018 | 2018 vs. 2017 | 2019 vs. 2018 | 2018 vs. 2017 | ||||||||||||||||||
Net cash provided by operating activities | $ | 703.9 | $ | 352.8 | $ | 477.8 | $ | 351.1 | $ | (125.0 | ) | 99.5 | % | (26.2 | )% | ||||||||||
Net cash used in investing activities | $ | (607.5 | ) | $ | (1,423.1 | ) | $ | (221.6 | ) | $ | 815.6 | $ | (1,201.5 | ) | (57.3 | )% | 542.2 | % | |||||||
Net cash provided by (used in) financing activities | $ | (122.4 | ) | $ | 1,272.1 | $ | (207.0 | ) | $ | (1,394.5 | ) | $ | 1,479.1 | N/M | N/M |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Northeast | $ | 25.1 | $ | 0.1 | $ | 0.3 | |||||
West | — | 2.5 | 24.8 | ||||||||
Other | — | 0.3 | — | ||||||||
Total | $ | 25.1 | $ | 2.9 | $ | 25.1 |
(in millions) | Project | Maintenance | |||||
Northeast | $ | 125.8 | $ | 64.3 | |||
South | — | 28.3 | |||||
West | — | 16.1 | |||||
Midwest | — | 32.6 | |||||
Other | — | 57.2 | |||||
Total | $ | 125.8 | $ | 198.5 |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Penn Master Lease | $ | 457.9 | $ | 461.5 | $ | 455.4 | |||||
Pinnacle Master Lease | 328.6 | 70.3 | — | ||||||||
Meadows Lease | 26.4 | 5.6 | — | ||||||||
Margaritaville Lease | 23.1 | — | — | ||||||||
Greektown Lease | 33.8 | — | — | ||||||||
Total | $ | 869.8 | $ | 537.4 | $ | 455.4 |
Payments Due By Period | |||||||||||||||||||
(in millions) | Total | 2020 | 2021-2022 | 2023-2024 | 2025 and After | ||||||||||||||
Senior Secured Credit Facilities | |||||||||||||||||||
Principal | $ | 1,929.8 | $ | 46.7 | $ | 146.5 | $ | 675.6 | $ | 1,061.0 | |||||||||
Interest (1) | 347.1 | 71.7 | 137.7 | 103.9 | 33.8 | ||||||||||||||
5.625% Notes | |||||||||||||||||||
Principal | 400.0 | — | — | — | 400.0 | ||||||||||||||
Interest | 168.8 | 22.5 | 45.0 | 45.0 | 56.3 | ||||||||||||||
Purchase obligations | 126.4 | 70.4 | 29.1 | 11.6 | 15.3 | ||||||||||||||
Capital expenditure commitments (2) | 54.1 | 54.1 | — | — | — | ||||||||||||||
Operating leases (3) | 10,160.1 | 424.0 | 804.3 | 778.5 | 8,153.3 | ||||||||||||||
Finance leases (3) | 496.0 | 21.7 | 43.3 | 37.5 | 393.5 | ||||||||||||||
Financing obligations (3) | 11,114.5 | 374.7 | 734.6 | 734.6 | 9,270.6 | ||||||||||||||
Ohio relocation fees (4) | 122.5 | 31.2 | 62.4 | 28.9 | — | ||||||||||||||
Other liabilities reflected within our Consolidated Balance Sheets (5) | 26.4 | 1.9 | 3.1 | 2.6 | 18.8 | ||||||||||||||
Total | $ | 24,945.7 | $ | 1,118.9 | $ | 2,006.0 | $ | 2,418.2 | $ | 19,402.6 |
(1) | The interest rates are estimated using the forward LIBOR curves plus the applicable spread as of December 31, 2019. The contractual amounts to be paid on our variable rate obligations are affected by changes in market interest rates and changes in our spreads, which are based on our leverage ratios. Future changes in such ratios will impact the contractual amounts to be paid. |
(2) | We anticipate spending $324.3 million for future capital expenditures over the next year, of which we are contractually committed to spend $54.1 million as of December 31, 2019. Pursuant to each of our Triple Net Leases, we are obligated to spend a minimum of 1% of annual net revenues, in the aggregate under each lease, on the maintenance of such facilities. |
(3) |
(4) | In addition to the Ohio Relocation Fees discussed in Note 10, “Long-term Debt,” in the notes to our Consolidated Financial Statements, the Company agreed to pay $110.0 million (of which $36.0 million remains to be paid) to the State of Ohio over ten years in return for certain clarifications from the State of Ohio with respect to various financial matters and limits on competition within the ten-year time period. |
(5) | Excludes the liability for unrecognized tax benefits of $37.2 million, as we cannot reasonably estimate the period of cash settlement with the respective taxing authorities. Additionally, it does not include an estimate of the payments associated with our contingent purchase price obligations of $17.5 million as it is not a fixed obligation. |
Payments Due By Period | |||||||||||||||||||
(in millions) | Total | 2020 | 2021-2022 | 2023-2024 | 2025 and After | ||||||||||||||
Letters of credit (1) | $ | 30.0 | $ | 30.0 | $ | — | $ | — | $ | — | |||||||||
Total | $ | 30.0 | $ | 30.0 | $ | — | $ | — | $ | — |
(1) | The available balance under our Revolving Credit Facilities is reduced by outstanding letters of credit. |
• | Projected revenues and operating cash flows (including an allocation of the projected payments under any applicable Triple Net Lease); |
• | Estimated construction costs and duration; |
• | Pre-opening costs; and |
• | Discounting that reflects the level of risk associated with receiving future cash flows attributable to the license. |
• | Projected revenues; |
• | Selection of an appropriate royalty rate to apply to projected revenues; and |
• | Discounting that reflects the level of risk associated with the after-tax revenue stream associated with the trademark. |
Increase in the Recorded Amount of Impairment Loss as a Result of: | ||||||||||||||
(dollars in millions) | Carrying Amount | Cushion | Discount Rate +100 bps | Terminal Growth Rate -50 bps | ||||||||||
Goodwill | ||||||||||||||
Hollywood Casino Aurora | $ | 161.1 | — | % | $ | 14.0 | $ | 5.9 | ||||||
Margaritaville Resort Casino | $ | 40.5 | 12.8 | % | $ | — | $ | — | ||||||
Gaming licenses | ||||||||||||||
Ameristar East Chicago | $ | 115.5 | — | % | $ | 17.0 | $ | 6.5 | ||||||
Boomtown Bossier City | $ | 16.0 | — | % | $ | 3.5 | $ | 1.5 | ||||||
Boomtown New Orleans | $ | 101.5 | 0.5 | % | $ | 14.0 | $ | 5.5 | ||||||
L’Auberge Lake Charles | $ | 304.0 | 22.5 | % | $ | — | $ | — | ||||||
Meadows Racetrack and Casino | $ | 158.5 | — | % | $ | 21.0 | $ | 8.0 | ||||||
River City Casino | $ | 226.5 | 0.9 | % | $ | 28.0 | $ | 10.0 | ||||||
Trademarks | ||||||||||||||
Ameristar Black Hawk | $ | 39.0 | 6.4 | % | $ | 2.0 | $ | — | ||||||
Ameristar Council Bluffs | $ | 32.5 | — | % | $ | 3.5 | $ | 1.0 | ||||||
Ameristar East Chicago | $ | 22.0 | 6.8 | % | $ | 1.0 | $ | — | ||||||
Ameristar Vicksburg | $ | 19.0 | — | % | $ | 2.0 | $ | 0.5 | ||||||
Boomtown Bossier City | $ | 5.0 | — | % | $ | 0.5 | $ | 0.5 | ||||||
L’Auberge Baton Rouge | $ | 20.0 | — | % | $ | 2.0 | $ | 0.5 | ||||||
Meadows Racetrack and Casino | $ | 30.0 | — | % | $ | 3.0 | $ | 0.5 |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
(dollars in millions) | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | Fair Value | |||||||||||||||||||||||
Fixed rate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 400.0 | $ | 400.0 | $ | 426.0 | |||||||||||||||
Average interest rate | 5.625 | % | |||||||||||||||||||||||||||||
Variable rate | $ | 46.7 | $ | 64.4 | $ | 82.1 | $ | 664.3 | $ | 11.3 | $ | 1,061.0 | $ | 1,929.8 | $ | 1,930.6 | |||||||||||||||
Average interest rate (1) | 3.65 | % | 3.66 | % | 3.67 | % | 3.70 | % | 3.98 | % | 4.04 | % |
(1) | Estimated rate, reflective of forward LIBOR December 31, 2019 plus the spread over LIBOR applicable to variable-rate borrowing. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
• | We tested the effectiveness of controls over determining the fair value of gaming licenses, including those over the forecasts of future revenue and operating cash flows and the selection of the discount rates. |
• | We evaluated management’s ability to accurately forecast future revenues and operating cash flows by comparing actual results to management’s historical forecasts. |
• | We evaluated the reasonableness of management’s revenue and operating cash flow forecasts by comparing the forecasts to: |
◦ | Historical results |
◦ | Internal communications to management and the Board of Directors |
◦ | Forecasted information included in the Company’s press release as well as in analyst and industry reports for the Company and certain of its peer companies |
◦ | The impact of changes in the regulatory environment on management’s projections. |
• | With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates by: |
◦ | Testing the source information underlying the determination of the discount rates and the mathematical accuracy of the calculations. |
◦ | Developing a range of independent estimates and comparing those to the discount rates selected by management. |
• | We tested the effectiveness of internal controls over the adoption of ASC 842, inclusive of controls over the evaluation of lease classifications and accounting conclusions. |
• | With the assistance of professionals in our firm with expertise in lease accounting, we evaluated the appropriateness of the accounting conclusions, including; |
◦ | Lease classification |
◦ | Build to suit and sale lease back transactions. |
• | We evaluated the financial statement impact of (i) the derecognition of the existing financing obligation and the carrying amount of the property and equipment that resulted in a cumulative-effect adjustment to retained earnings, (ii) the recognition of an operating lease liability and an operating lease ROU asset primarily pertaining to the land component, and (iii) the recognition of a ROU asset and financing lease liability relating to certain leases which were previously considered build-to-suit leases. |
• | We tested the leasing components contained within each of the Master Leases that were determined to continue to represent financing obligations (consisting primarily of the building components) at the adoption date, which resulted in the (i) continued recognition of the leased assets in “Property and equipment, net” within the financial statements and (ii) continued recognition of the financing obligation. |
• | We tested the accuracy and completeness of contract terms and key assumptions utilized in key accounting determinations through comparison to the underlying lease contracts and supporting documentation. |
/s/ Deloitte & Touche LLP |
Philadelphia, Pennsylvania |
February 27, 2020 |
We have served as the Company’s auditor since 2017. |
December 31, | |||||||
(in millions, except share and per share data) | 2019 | 2018 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Receivables, net of allowance for doubtful accounts of $7.7 and $3.2 | |||||||
Prepaid expenses | |||||||
Other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Investment in and advances to unconsolidated affiliates | |||||||
Goodwill | |||||||
Other intangible assets, net | |||||||
Deferred income taxes | |||||||
Operating lease right-of-use assets | — | ||||||
Finance lease right-of-use assets | — | ||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable | $ | $ | |||||
Current maturities of long-term debt | |||||||
Current portion of financing obligations | |||||||
Current portion of operating lease liabilities | — | ||||||
Current portion of finance lease liabilities | — | ||||||
Accrued expenses and other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt, net of current maturities and debt issuance costs | |||||||
Long-term portion of financing obligations | |||||||
Long-term portion of operating lease liabilities | — | ||||||
Long-term portion of finance lease liabilities | — | ||||||
Deferred income taxes | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Stockholders’ equity | |||||||
Series B preferred stock ($0.01 par value, 1,000,000 shares authorized, no shares issued and outstanding) | |||||||
Series C preferred stock ($0.01 par value, 18,500 shares authorized, no shares issued and outstanding) | |||||||
Common stock ($0.01 par value, 200,000,000 shares authorized, 118,125,652 and 118,855,201 shares issued, and 115,958,259 and 116,687,808 shares outstanding) | |||||||
Treasury stock, at cost, (2,167,393 shares held in both periods) | ( | ) | ( | ) | |||
Additional paid-in capital | |||||||
Retained earnings (accumulated deficit) | ( | ) | |||||
Total Penn National stockholders’ equity | |||||||
Non-controlling interest | ( | ) | |||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
For the year ended December 31, | |||||||||||
(in millions, except per share data) | 2019 | 2018 | 2017 | ||||||||
Revenues | |||||||||||
Gaming | $ | $ | $ | ||||||||
Food, beverage, hotel and other | |||||||||||
Management service and license fees | |||||||||||
Reimbursable management costs | |||||||||||
Less: Promotional allowance | ( | ) | |||||||||
Total revenues | |||||||||||
Operating expenses | |||||||||||
Gaming | |||||||||||
Food, beverage, hotel and other | |||||||||||
General and administrative | |||||||||||
Reimbursable management costs | |||||||||||
Depreciation and amortization | |||||||||||
Impairment losses | |||||||||||
Provision for (recoveries on) loan loss and unfunded loan commitments | ( | ) | |||||||||
Total operating expenses | |||||||||||
Operating income | |||||||||||
Other income (expenses) | |||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | |||||
Income from unconsolidated affiliates | |||||||||||
Loss on early extinguishment of debt | ( | ) | ( | ) | |||||||
Other | ( | ) | ( | ) | |||||||
Total other expenses | ( | ) | ( | ) | ( | ) | |||||
Income (loss) before income taxes | ( | ) | |||||||||
Income tax benefit (expense) | ( | ) | |||||||||
Net income | |||||||||||
Less: Net loss attributable to non-controlling interest | |||||||||||
Net income attributable to Penn National | $ | $ | $ | ||||||||
Earnings per common share | |||||||||||
Basic earnings per common share | $ | $ | $ | ||||||||
Diluted earnings per common share | $ | $ | $ | ||||||||
Weighted-average basic shares outstanding | |||||||||||
Weighted-average diluted shares outstanding |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Net income | $ | $ | $ | ||||||||
Other comprehensive income, net of tax: | |||||||||||
Foreign currency translation adjustment during the period | |||||||||||
Other comprehensive income | |||||||||||
Total comprehensive income | |||||||||||
Less: Comprehensive loss attributable to non-controlling interest | |||||||||||
Comprehensive income attributable to Penn National | $ | $ | $ |
Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings (Accum- ulated Deficit) | Accum- ulated Other Compre- hensive Loss | Total Penn National Stock-holders’ Equity (Deficit) | Non-Controlling Interest | Total Stock-holders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||
(in millions, except share data) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2017 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||
Share-based compensation arrangements | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Share repurchases | — | — | ( | ) | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2017 | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
Share-based compensation arrangements | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Pinnacle Acquisition | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Reclassification of accumulated other comprehensive loss to earnings upon termination of management contract | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASC 606 | — | — | — | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Share repurchases | — | — | ( | ) | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
Share-based compensation arrangements | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASC 842 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Share repurchases | — | — | ( | ) | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) | $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Operating activities | |||||||||||
Net income | $ | $ | $ | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of items charged to interest expense | |||||||||||
Noncash operating lease expense | |||||||||||
Change in fair value of contingent purchase price | ( | ) | |||||||||
Holding gain on equity securities | ( | ) | |||||||||
Loss on sale or disposal of property and equipment | |||||||||||
Income from unconsolidated affiliates | ( | ) | ( | ) | ( | ) | |||||
Return on investment from unconsolidated affiliates | |||||||||||
Deferred income taxes | ( | ) | ( | ) | |||||||
Stock-based compensation | |||||||||||
Impairment losses | |||||||||||
Provision for (recoveries on) loan loss and unfunded loan commitments | ( | ) | |||||||||
Reclassification of accumulated other comprehensive loss to earnings upon termination of management contract | |||||||||||
Loss on early extinguishment of debt | |||||||||||
Changes in operating assets and liabilities, net of businesses acquired | |||||||||||
Accounts receivable | ( | ) | ( | ) | |||||||
Prepaid expenses and other current assets | ( | ) | |||||||||
Other assets | ( | ) | |||||||||
Accounts payable | ( | ) | ( | ) | |||||||
Accrued expenses | ( | ) | ( | ) | |||||||
Income taxes | ( | ) | ( | ) | |||||||
Operating lease liabilities | ( | ) | |||||||||
Other current and long-term liabilities | ( | ) | |||||||||
Net cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Project capital expenditures | ( | ) | ( | ) | ( | ) | |||||
Maintenance capital expenditures | ( | ) | ( | ) | ( | ) | |||||
Consideration paid for acquisitions of businesses, net of cash acquired | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sale-and-leaseback transactions in conjunction with acquisitions | |||||||||||
Cash received for the sale of the Divested Properties and Belterra Park | |||||||||||
Consideration paid for gaming licenses and other intangible assets | ( | ) | ( | ) | ( | ) | |||||
Acquisition of equity securities | ( | ) | |||||||||
Additional contributions from (to) joint ventures | ( | ) | ( | ) | |||||||
Proceeds from sale of loan | |||||||||||
Receipts applied against nonaccrual loan | |||||||||||
Other | ( | ) | ( | ) | |||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | |||||
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Financing activities | |||||||||||
Proceeds from revolving credit facility | |||||||||||
Repayments on revolving credit facility | ( | ) | ( | ) | ( | ) | |||||
Proceeds from issuance of long-term debt | |||||||||||
Principal payments on long-term debt | ( | ) | ( | ) | ( | ) | |||||
Prepayment penalties and modification payments incurred with debt refinancing | ( | ) | ( | ) | |||||||
Debt issuance costs and debt discount | ( | ) | ( | ) | |||||||
Payments of other long-term obligations | ( | ) | ( | ) | ( | ) | |||||
Principal payments on financing obligations | ( | ) | ( | ) | ( | ) | |||||
Principal payments on finance leases | ( | ) | |||||||||
Proceeds from the sale of real estate assets in conjunction with acquisitions | — | ||||||||||
Proceeds from exercise of options | |||||||||||
Repurchase of common stock | ( | ) | ( | ) | ( | ) | |||||
Payments of contingent purchase price | ( | ) | ( | ) | ( | ) | |||||
Proceeds from insurance financing | |||||||||||
Payments on insurance financing | ( | ) | ( | ) | ( | ) | |||||
Other | ( | ) | |||||||||
Net cash provided by (used in) financing activities | ( | ) | ( | ) | |||||||
Change in cash, cash equivalents, and restricted cash | ( | ) | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the year | |||||||||||
Cash, cash equivalents and restricted cash at the end of the year | $ | $ | $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||
Restricted cash included in Other current assets | |||||||||||
Restricted cash included in Other assets | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||
Supplemental disclosure: | |||||||||||
Cash paid for interest, net of amounts capitalized | $ | $ | $ | ||||||||
Cash payments (refunds) related to income taxes, net | $ | $ | $ | ( | ) | ||||||
Non-cash investing activities: | |||||||||||
Commencement of operating leases | $ | $ | $ | ||||||||
Commencement of finance leases | $ | $ | $ | ||||||||
Accrued capital expenditures | $ | $ | $ | ||||||||
Acquisition of equity securities | $ | $ | $ | ||||||||
Accrued advances to Jamul Tribe | $ | $ | $ |
Location | Real Estate Assets Lease or Ownership Structure | ||
Northeast segment | |||
Ameristar East Chicago | East Chicago, Indiana | Pinnacle Master Lease | |
Greektown Casino-Hotel (1) | Detroit, Michigan | Greektown Lease | |
Hollywood Casino Bangor | Bangor, Maine | Penn Master Lease | |
Hollywood Casino at Charles Town Races | Charles Town, West Virginia | Penn Master Lease | |
Hollywood Casino Columbus | Columbus, Ohio | Penn Master Lease | |
Hollywood Casino Lawrenceburg | Lawrenceburg, Indiana | Penn Master Lease | |
Hollywood Casino at Penn National Race Course | Grantville, Pennsylvania | Penn Master Lease | |
Hollywood Casino Toledo | Toledo, Ohio | Penn Master Lease | |
Hollywood Gaming at Dayton Raceway | Dayton, Ohio | Penn Master Lease | |
Hollywood Gaming at Mahoning Valley Race Course | Youngstown, Ohio | Penn Master Lease | |
Marquee by Penn (2) | Pennsylvania | N/A | |
Meadows Racetrack and Casino | Washington, Pennsylvania | Meadows Lease | |
Plainridge Park Casino | Plainville, Massachusetts | Pinnacle Master Lease | |
South segment (3) | |||
1st Jackpot Casino | Tunica, Mississippi | Penn Master Lease | |
Ameristar Vicksburg | Vicksburg, Mississippi | Pinnacle Master Lease | |
Boomtown Biloxi | Biloxi, Mississippi | Penn Master Lease | |
Boomtown Bossier City | Bossier City, Louisiana | Pinnacle Master Lease | |
Boomtown New Orleans | New Orleans, Louisiana | Pinnacle Master Lease | |
Hollywood Casino Gulf Coast | Bay St. Louis, Mississippi | Penn Master Lease | |
Hollywood Casino Tunica | Tunica, Mississippi | Penn Master Lease | |
L’Auberge Baton Rouge | Baton Rouge, Louisiana | Pinnacle Master Lease | |
L’Auberge Lake Charles | Lake Charles, Louisiana | Pinnacle Master Lease | |
Margaritaville Resort Casino (4) | Bossier City, Louisiana | Margaritaville Lease | |
West segment | |||
Ameristar Black Hawk | Black Hawk, Colorado | Pinnacle Master Lease | |
Cactus Petes and Horseshu | Jackpot, Nevada | Pinnacle Master Lease | |
M Resort | Henderson, Nevada | Penn Master Lease | |
Tropicana Las Vegas | Las Vegas, Nevada | Owned | |
Zia Park Casino | Hobbs, New Mexico | Penn Master Lease | |
Midwest segment | |||
Ameristar Council Bluffs | Council Bluffs, Iowa | Pinnacle Master Lease | |
Argosy Casino Alton (5) | Alton, Illinois | Penn Master Lease | |
Argosy Casino Riverside | Riverside, Missouri | Penn Master Lease | |
Hollywood Casino Aurora | Aurora, Illinois | Penn Master Lease | |
Hollywood Casino Joliet | Joliet, Illinois | Penn Master Lease | |
Hollywood Casino at Kansas Speedway (6) | Kansas City, Kansas | Owned - JV | |
Hollywood Casino St. Louis | Maryland Heights, Missouri | Penn Master Lease | |
Prairie State Gaming (2) | Illinois | N/A | |
River City Casino | St. Louis, Missouri | Pinnacle Master Lease |
(1) | Acquired on May 23, 2019 |
(2) | VGT route operations |
(3) | Resorts Casino Tunica ceased operations on June 30, 2019, but remains subject to the Penn Master Lease. |
(4) | Acquired on January 1, 2019 |
(5) | The riverboat is owned by us and not subject to the Penn Master Lease. |
(6) | Pursuant to a joint venture (“JV”) with International Speedway Corporation (“International Speedway”) and includes the Company’s |
December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Markers issued to customers | $ | $ | |||||
Credit card receivables and other advances to customers | |||||||
Receivables from ATM and cash kiosk transactions | |||||||
Hotel and banquet receivables | |||||||
Racing settlements | |||||||
Receivables due from platform providers for social casino games | |||||||
Other | |||||||
Allowance for doubtful accounts | ( | ) | ( | ) | |||
Accounts receivable, net | $ | $ |
Years | |
Land improvements | 15 |
Buildings and improvements | 5 to 31 |
Vessels | 10 to 35 |
Furniture, fixtures and equipment | 3 to 31 |
For the year ended December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Food and beverage | $ | $ | |||||
Hotel | |||||||
Other | |||||||
Total complimentaries associated with gaming contracts | $ | $ |
Impacts of: | |||||||||||||||||||||||||||||||
(in millions) | As Reported as of December 31, 2018 | Financing Obligations - Master Leases (1) | Finance Leases - Dayton and Mahoning Valley | Operating Leases - Master Leases (2) | Operating Lease - Meadows (3) | Other Operating Leases - Non-Master Leases | As Adjusted for ASC 842 | Increase/(Decrease) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Current assets | |||||||||||||||||||||||||||||||
Prepaid expenses | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||
Total current assets | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||
Property and equipment, net (4) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||||||
Goodwill | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Operating lease right-of-use assets (5) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Finance lease right-of-use assets (6) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Current liabilities | |||||||||||||||||||||||||||||||
Current portion of financing obligations (7) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||||||
Current portion of operating lease liabilities (5) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Current portion of finance lease liabilities (6) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Accrued expenses and other current liabilities | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||
Total current liabilities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Long-term portion of financing obligations (7) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||||||
Long-term portion of operating lease liabilities (5) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Long-term portion of finance lease liabilities (6) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Deferred income taxes (8) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Other long-term liabilities | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||
Total liabilities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Stockholders’ equity | |||||||||||||||||||||||||||||||
Retained earnings (accumulated deficit) | $ | ( | ) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total Penn National stockholders’ equity | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Total stockholders’ equity | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | $ | $ | $ | $ | $ | $ | $ |
(1) | During the first quarter of 2019, the Company identified an adjustment to the purchase price allocation associated with the Pinnacle Acquisition. The purchase price adjustment increased the financing obligation upon the adoption of the new lease standard, resulting in an increase to goodwill (see Note 5, “Acquisitions and Other Investments”). |
(2) | Represents components contained within each of the Master Leases determined to be operating leases (primarily land). |
(3) | Represents the triple net lease with GLPI for the real estate assets used in the operations of Meadows Racetrack and Casino (the “Meadows Lease”). |
(4) | Represents the (i) derecognition of the carrying amount of the property and equipment, net, associated with land components contained within our Master Leases determined to be operating leases upon the adoption of the new lease standard; and (ii) derecognition of the carrying amount of the property and equipment, net, associated with land and building components associated with Dayton and Mahoning Valley determined to be finance leases upon the adoption of the new lease standard. |
(5) | Operating lease ROU assets represent (i) the land components contained within the Master Leases determined to be operating leases upon the adoption of the new lease standard; and (ii) with respect to other Operating Leases, represent (a) the Meadows Lease, which was acquired by the Company in conjunction with the acquisition of Pinnacle; (b) ground and levee leases with landlords, which were not assumed by GLPI and remain an obligation of the Company; and (c) buildings and equipment not associated with our Master Leases. For leases where the rate implicit in the lease was not readily determinable, we used our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. We utilized the incremental borrowing rate on the adoption date for operating leases that commenced prior to that date. The operating lease liability is based on the net present value of future lease payments. |
(6) | Amounts primarily represent finance leases associated with Dayton and Mahoning Valley, which are included in the Penn Master Lease, that under ASC 840 utilized specific build-to-suit guidance. The adoption of the new lease standard required the Company to evaluate the components under current guidance contained within the new lease standard, which resulted in all components being classified as finance leases. Finance leases result in (i) the recognition of a finance lease ROU asset amortized over the lease term and (ii) a corresponding finance lease liability (recorded to interest expense over the lease term). We utilized our incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments. The finance lease liability is based on the net present value of future lease payments. |
(7) | Represents components associated with our Master Leases that remain financing obligations (primarily buildings). The financing obligation at the adoption date was calculated utilizing previous assumptions as determined (a) at the lease commencement date with respect to the Penn Master Lease and (b) at the acquisition date with respect to the Pinnacle Master Lease. |
(8) | Represents the tax impacts related to the adoption of the new lease standard. See Note 13, “Income Taxes.” |
For the year ended December 31, 2019 | |||||||||||||||||||||||||||
(in millions) | Northeast | South | West | Midwest | Other | Intersegment Eliminations (1) | Total | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||
Gaming | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
Food and beverage | |||||||||||||||||||||||||||
Hotel | |||||||||||||||||||||||||||
Racing | |||||||||||||||||||||||||||
Other | ( | ) | |||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | ( | ) | $ |
(1) | Represents the elimination of intersegment revenues associated with our internally-branded retail sportsbooks, which are operated by Penn Interactive, and our live and televised poker tournament series that operates under the trademark, Heartland Poker Tour (“HPT”). |
For the year ended December 31, 2018 | |||||||||||||||||||||||
(in millions) | Northeast | South | West | Midwest | Other | Total | |||||||||||||||||
Revenues: | |||||||||||||||||||||||
Gaming | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Food and beverage | |||||||||||||||||||||||
Hotel | |||||||||||||||||||||||
Racing | |||||||||||||||||||||||
Reimbursable management costs | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ |
For the year ended December 31, 2017 | |||||||||||||||||||||||
(in millions) | Northeast | South | West | Midwest | Other | Total | |||||||||||||||||
Revenues: | |||||||||||||||||||||||
Gaming | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Food and beverage | |||||||||||||||||||||||
Hotel | |||||||||||||||||||||||
Racing | |||||||||||||||||||||||
Reimbursable management costs | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Less: Promotional allowances | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Total revenues | $ | $ | $ | $ | $ | $ |
(in millions) | Estimated fair value, as previously reported (1) | Measurement period adjustments | Estimated fair value, as adjusted | ||||||||
Cash and cash equivalents | $ | $ | — | $ | |||||||
Receivables, prepaid expenses, and other current assets | ( | ) | |||||||||
Property and equipment | ( | ) | |||||||||
Goodwill (2) | |||||||||||
Other intangible assets | |||||||||||
Gaming license | — | ||||||||||
Trademark | — | ||||||||||
Customer relationships | — | ||||||||||
Operating lease right-of-use assets | — | ||||||||||
Finance lease right-of-use assets | — | ||||||||||
Other assets | ( | ) | |||||||||
Total assets | $ | $ | $ | ||||||||
Accounts payable, accrued expenses and other current liabilities | $ | $ | |||||||||
Operating lease liabilities | — | ||||||||||
Finance lease liabilities | — | ||||||||||
Total liabilities | |||||||||||
Net assets acquired | $ | $ | $ |
(1) | Amounts were initially reported within the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2019, filed with the SEC on August 8, 2019. |
(2) | The goodwill has been assigned to our Northeast segment. The entire $ |
(in millions) | Period from May 23, 2019 through December 31, 2019 | ||
Revenues | $ | ||
Net income | $ |
(in millions) | Estimated fair value, as previously reported (1) | Measurement period adjustments | Fair value, as finalized | ||||||||
Cash and cash equivalents | $ | $ | — | $ | |||||||
Receivables, prepaid expenses, and other current assets | ( | ) | |||||||||
Property and equipment | ( | ) | |||||||||
Goodwill (2) | |||||||||||
Other intangible assets | |||||||||||
Gaming license | — | ||||||||||
Customer relationships | — | ||||||||||
Operating lease right-of-use assets | — | ||||||||||
Total assets | $ | $ | $ | ||||||||
Accounts payable, accrued expenses and other current liabilities | $ | $ | $ | ||||||||
Operating lease liabilities | — | ||||||||||
Total liabilities | |||||||||||
Net assets acquired | $ | $ | $ |
(1) | Amounts were initially reported within the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2019, filed with the SEC on May 8, 2019. |
(2) | The goodwill has been assigned to our South segment. The entire $ |
(in millions) | For the year ended December 31, 2019 | ||
Revenues | $ | ||
Net income | $ |
(in millions) | Estimated fair value, as previously reported (1) | Measurement period adjustments | Fair value, as finalized | ||||||||
Cash and restricted cash | $ | $ | — | $ | |||||||
Assets held for sale | |||||||||||
Other current assets | |||||||||||
Property and equipment - non-Pinnacle Master Lease | ( | ) | |||||||||
Property and equipment - Pinnacle Master Lease (2) | ( | ) | |||||||||
Goodwill (3) | |||||||||||
Other intangible assets | |||||||||||
Gaming licenses | |||||||||||
Trademarks | — | ||||||||||
Customer relationships | — | ||||||||||
Other long-term assets | — | ||||||||||
Total assets | $ | $ | $ | ||||||||
Long-term financing obligation, including current portion (4) | $ | $ | $ | ||||||||
Other current liabilities | |||||||||||
Deferred tax liabilities | |||||||||||
Other long-term liabilities | — | ||||||||||
Total liabilities | |||||||||||
Net assets acquired | $ | $ | $ |
(1) | Amounts were initially reported within the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019. |
(2) | Includes buildings, boats, vessels, barges, and implied land and land use rights. Land use rights represent the intangible value of the Company’s ability to utilize and access land associated with long term ground lease agreements that give the Company the exclusive rights to operate the casino gaming facilities associated with such agreements. |
(3) | See Note 8, “Goodwill and Other Intangible Assets,” for details on the impact to each reportable segment. |
(4) | Long-term financing obligation, including current portion represents the financing obligation associated with Pinnacle Master Lease, as amended. |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Revenues | $ | $ | $ | ||||||||
Net income (loss) | $ | $ | $ | ( | ) |
December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Current assets | $ | $ | |||||
Long-term assets | $ | $ | |||||
Current liabilities | $ | $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Revenues | $ | $ | $ | ||||||||
Operating expenses | |||||||||||
Operating income | |||||||||||
Net income | $ | $ | $ | ||||||||
Net income attributable to Penn National | $ | $ | $ |
December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Property and equipment - Not Subject to Master Leases | |||||||
Land and improvements | $ | $ | |||||
Building, vessels and improvements | |||||||
Furniture, fixtures and equipment | |||||||
Leasehold improvements | |||||||
Construction in progress | |||||||
Less: Accumulated depreciation | ( | ) | ( | ) | |||
Property and equipment - Subject to Master Leases | |||||||
Land and improvements (1) | |||||||
Building, vessels and improvements (1) | |||||||
Less: Accumulated depreciation | ( | ) | ( | ) | |||
Property and equipment, net | $ | $ |
(1) | Upon adoption of ASC 842, approximately $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Depreciation expense (1) | $ | $ | $ |
(1) | Of such amounts, $ |
(in millions) | Northeast | South | West | Midwest | Other | Total | |||||||||||||||||
Balance as of January 1, 2018 | |||||||||||||||||||||||
Goodwill, gross | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Accumulated goodwill impairment losses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Goodwill, net | |||||||||||||||||||||||
Goodwill acquired during year | |||||||||||||||||||||||
Balance as of December 31, 2018 | |||||||||||||||||||||||
Goodwill, gross | |||||||||||||||||||||||
Accumulated goodwill impairment losses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Goodwill, net | |||||||||||||||||||||||
Goodwill acquired during year | |||||||||||||||||||||||
Impairment losses during year | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Other (1) | ( | ) | |||||||||||||||||||||
Balance as of December 31, 2019 | |||||||||||||||||||||||
Goodwill, gross | |||||||||||||||||||||||
Accumulated goodwill impairment losses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Goodwill, net | $ | $ | $ | $ | $ | $ |
(1) | Amounts relate to adjustments made to the preliminary purchase price allocation of Pinnacle during the year ended December 31, 2019, prior to it being finalized, as described in Note 5, “Acquisitions and Other Investments” |
Northeast segment | |||
Hollywood Casino at Charles Town Races | $ | ||
Plainridge Park Casino | $ | ||
Midwest segment | |||
Ameristar Council Bluffs | $ |
December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||
(in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
Indefinite-lived intangible assets | |||||||||||||||||||||||
Gaming licenses | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||
Trademarks | — | — | |||||||||||||||||||||
Other | — | — | |||||||||||||||||||||
Amortizing intangible assets | |||||||||||||||||||||||
Customer relationships | ( | ) | ( | ) | |||||||||||||||||||
Other | ( | ) | ( | ) | |||||||||||||||||||
Total other intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Years ending December 31: | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Accrued salaries and wages | $ | $ | |||||
Accrued gaming, pari-mutuel, property, and other taxes | |||||||
Accrued interest | |||||||
Other accrued expenses (1) | |||||||
Other current liabilities (2) | |||||||
Accrued expenses and other current liabilities | $ | $ |
(1) | Amounts include $ |
(2) |
December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Senior Secured Credit Facilities: | |||||||
Revolving Credit Facility due 2023 | $ | $ | |||||
Term Loan A Facility due 2023 | |||||||
Term Loan B-1 Facility due 2025 | |||||||
5.625% Notes due 2027 | |||||||
Other long-term obligations | |||||||
Capital leases (1) | |||||||
Less: Current maturities of long-term debt | ( | ) | ( | ) | |||
Less: Debt discount | ( | ) | ( | ) | |||
Less: Debt issuance costs | ( | ) | ( | ) | |||
$ | $ |
(1) | Reclassified to finance lease liabilities upon the adoption of ASC 842. |
Year ending December 31: | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total minimum payments | $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Interest expense | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Interest income | |||||||||||
Capitalized interest | |||||||||||
Interest expense, net | $ | ( | ) | $ | ( | ) | $ | ( | ) |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Variable expenses included in “General and administrative” | $ | $ | $ | ||||||||
Variable expenses included in “Interest expense, net” | |||||||||||
Total variable expenses | $ | $ | $ |
December 31, 2019 | ||
Weighted-Average Remaining Lease Term | ||
Operating leases | ||
Finance leases | ||
Financing obligations | ||
Weighted-Average Discount Rate | ||
Operating leases | % | |
Finance leases | % | |
Financing obligations | % |
Classification | |||||||||||||||||||||||
(in millions) | Gaming Expense | Food, Beverage, Hotel and Other Expense | General and Administrative | Interest Expense, net | Depreciation and Amortization | Total for the year ended December 31, 2019 | |||||||||||||||||
Operating Lease Costs | |||||||||||||||||||||||
Rent expense associated with triple net leases classified as operating leases (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Operating lease cost (2) | |||||||||||||||||||||||
Short-term lease cost | |||||||||||||||||||||||
Variable lease cost (2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Finance Lease Costs | |||||||||||||||||||||||
Interest expense (3) | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Amortization expense (3) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Financing Obligation Costs | |||||||||||||||||||||||
Interest expense (4) | $ | $ | $ | $ | $ | $ |
(1) | Pertains to the components contained within the Master Leases (primarily land) determined to be operating leases, the Meadows Lease, the Margaritaville Lease, and the Greektown Lease, inclusive of the variable expense associated with Columbus and Toledo for the operating lease components (the land) (see table above). |
(2) | Excludes the operating lease costs and variable lease costs pertaining to our triple net leases with our REIT landlords classified as operating leases, discussed in footnote (1) above. |
(3) | Primarily pertains to the Dayton and Mahoning Valley finance leases. |
(4) | Pertains to the components contained within the Master Leases (primarily buildings) determined to continue to be financing obligations, inclusive of the variable expense associated with Columbus and Toledo for the finance lease components (the buildings) (see table above). |
(in millions) | For the year ended December 31, 2019 | ||
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows from finance leases | $ | ||
Operating cash flows from operating leases | $ | ||
Financing cash flows from finance leases | $ |
(in millions) | Operating Leases | Finance Leases | Financing Obligations | ||||||||
Years ending December 31: | |||||||||||
2020 | $ | $ | $ | ||||||||
2021 | |||||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less: Imputed interest | ( | ) | ( | ) | ( | ) | |||||
Present value of future lease payments | |||||||||||
Less: Current portion of lease obligations | ( | ) | ( | ) | ( | ) | |||||
Long-term portion of lease obligations | $ | $ | $ |
December 31, | |||||||
(in millions) | 2019 | 2018 | |||||
Deferred tax assets: | |||||||
Stock-based compensation expense | $ | $ | |||||
Accrued expenses | |||||||
Financing obligations associated with the Master Leases | |||||||
Unrecognized tax benefits | |||||||
Investments in and advances to unconsolidated affiliates | |||||||
Net operating losses, interest limitation and tax credit carryforwards | |||||||
Gross deferred tax assets | |||||||
Less: Valuation allowance | ( | ) | ( | ) | |||
Net deferred tax assets | |||||||
Deferred tax liabilities: | |||||||
Property and equipment, not subject to the Master Leases | ( | ) | ( | ) | |||
Property and equipment, subject to the Master Leases | ( | ) | ( | ) | |||
Investments in and advances to unconsolidated affiliates | ( | ) | |||||
Undistributed foreign earnings | ( | ) | ( | ) | |||
Intangible assets | ( | ) | ( | ) | |||
Net deferred tax liabilities | ( | ) | ( | ) | |||
Long-term deferred tax assets (liabilities), net | $ | ( | ) | $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Domestic | $ | $ | $ | ( | ) | ||||||
Foreign | |||||||||||
Total | $ | $ | $ | ( | ) |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Current tax benefit (expense) | |||||||||||
Federal | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
State | ( | ) | ( | ) | ( | ) | |||||
Foreign | ( | ) | ( | ) | |||||||
Total current | ( | ) | ( | ) | ( | ) | |||||
Deferred tax benefit (expense) | |||||||||||
Federal | ( | ) | |||||||||
State | ( | ) | |||||||||
Foreign | ( | ) | |||||||||
Total deferred | ( | ) | |||||||||
Total income tax benefit (expense) | $ | ( | ) | $ | $ |
For the year ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||||||
(in millions, except tax rates) | Percent | Amount | Percent | Amount | Percent | Amount | ||||||||||||||
Percent and amount of pretax income | ||||||||||||||||||||
Federal statutory rate | % | $ | ( | ) | % | $ | ( | ) | % | $ | ||||||||||
State and local income taxes, net of federal benefits | ( | ) | ( | ) | ||||||||||||||||
Nondeductible expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Goodwill impairment losses | ( | ) | ( | ) | ( | ) | ||||||||||||||
Compensation | ( | ) | ( | ) | ||||||||||||||||
Contingent liability settlement | ||||||||||||||||||||
Foreign | ( | ) | ( | ) | ||||||||||||||||
Valuation allowance | ( | ) | ||||||||||||||||||
Tax Act - deferred rate change | ( | ) | ( | ) | ||||||||||||||||
Other | ( | ) | ( | ) | ||||||||||||||||
Total effective tax rate and income tax benefit (expense) | % | $ | ( | ) | ( | )% | $ | % | $ |
(in millions) | Unrecognized tax benefits | ||
Unrecognized tax benefits as of January 1, 2017 | $ | ||
Additions based on current year positions | |||
Additions based on prior year positions | |||
Decreases due to settlements and/or reduction in reserves | ( | ) | |
Currency translation adjustments | ( | ) | |
Settlement payments | ( | ) | |
Unrecognized tax benefits as of December 31, 2017 | |||
Additions based on prior year positions | |||
Decreases due to settlements and/or reduction in reserves | ( | ) | |
Unrecognized tax benefits as of December 31, 2018 | |||
Additions based on prior year positions | |||
Decreases due to settlements and/or reduction in reserves | ( | ) | |
Unrecognized tax benefits as of December 31, 2019 | $ |
Number of Option Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||
Outstanding as of January 1, 2019 | $ | |||||||||||
Granted | $ | |||||||||||
Exercised | ( | ) | $ | |||||||||
Forfeited | ( | ) | $ | |||||||||
Outstanding as of December 31, 2019 | $ | $ | ||||||||||
Exercisable as of December 31, 2019 | $ | $ |
Exercise Price Range | Total | ||||||||||||||
$11.61 to $16.93 | $17.77 to $25.05 | $30.74 to $32.90 | $11.61 to $32.90 | ||||||||||||
Outstanding options | |||||||||||||||
Number outstanding | |||||||||||||||
Weighted-average remaining contractual term (in years) | |||||||||||||||
Weighted-average exercise price | $ | $ | $ | $ | |||||||||||
Exercisable options | |||||||||||||||
Number outstanding | |||||||||||||||
Weighted-average exercise price | $ | $ | $ | $ |
For the year ended December 31, | ||||||||
2019 | 2018 | 2017 | ||||||
Risk-free interest rate | % | % | % | |||||
Expected volatility | % | % | % | |||||
Dividend yield | ||||||||
Weighted-average expected life (in years) |
With Performance Conditions | Without Performance Conditions | ||||||||||||
Number of Shares | Weighted- Average Grant Date Fair Value | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||||||
Nonvested as of January 1, 2019 | $ | $ | |||||||||||
Granted | $ | $ | |||||||||||
Vested | ( | ) | $ | ( | ) | $ | |||||||
Forfeited | ( | ) | $ | ( | ) | $ | |||||||
Nonvested as of December 31, 2019 | $ | $ |
For the year ended December 31, | ||||||||
(in millions) | 2019 | 2018 | 2017 | |||||
Determination of shares: | ||||||||
Weighted-average common shares outstanding | ||||||||
Assumed conversion of dilutive stock options | ||||||||
Assumed conversion of dilutive restricted stock awards | ||||||||
Diluted weighted-average common shares outstanding |
For the year ended December 31, | |||||||||||
(in millions, except per share data) | 2019 | 2018 | 2017 | ||||||||
Calculation of basic EPS: | |||||||||||
Net income applicable to common stock | $ | $ | $ | ||||||||
Weighted-average common shares outstanding | |||||||||||
Basic EPS | $ | $ | $ | ||||||||
Calculation of diluted EPS: | |||||||||||
Net income applicable to common stock | |||||||||||
Diluted weighted-average common shares outstanding | |||||||||||
Diluted EPS | $ | $ | $ |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Revenues: | |||||||||||
Northeast segment | $ | $ | $ | ||||||||
South segment | |||||||||||
West segment | |||||||||||
Midwest segment | |||||||||||
Other (1) | |||||||||||
Intersegment eliminations (2) | ( | ) | |||||||||
Total | $ | $ | $ | ||||||||
Adjusted EBITDAR (3): | |||||||||||
Northeast segment | $ | $ | $ | ||||||||
South segment | |||||||||||
West segment | |||||||||||
Midwest segment | |||||||||||
Other (1) | ( | ) | ( | ) | ( | ) | |||||
Total (3) | |||||||||||
Other operating benefits (costs) and other income (expenses): | |||||||||||
Rent expense associated with triple net operating leases (4) | ( | ) | ( | ) | |||||||
Stock-based compensation | ( | ) | ( | ) | ( | ) | |||||
Cash-settled stock-based awards variance | ( | ) | ( | ) | |||||||
Loss on disposal of assets | ( | ) | ( | ) | ( | ) | |||||
Contingent purchase price | ( | ) | ( | ) | |||||||
Pre-opening and acquisition costs | ( | ) | ( | ) | ( | ) | |||||
Depreciation and amortization | ( | ) | ( | ) | ( | ) | |||||
Impairment losses | ( | ) | ( | ) | ( | ) | |||||
Recoveries on (provision for) loan loss and unfunded loan commitments | ( | ) | |||||||||
Insurance recoveries, net of deductible charges | |||||||||||
Non-operating items for Kansas JV | ( | ) | ( | ) | ( | ) | |||||
Interest expense, net | ( | ) | ( | ) | ( | ) | |||||
Loss on early extinguishment of debt | ( | ) | ( | ) | |||||||
Other | ( | ) | ( | ) | |||||||
Income before income taxes | ( | ) | |||||||||
Income tax benefit (expense) | ( | ) | |||||||||
Net income | $ | $ | $ |
(1) | The Other category consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club and the Company’s JV interests in Sam Houston Race Park, Valley Race Park, and Freehold Raceway. The Other category also includes Penn Interactive; which operates social gaming, our internally-branded retail sportsbooks, and iGaming; our management contract for Retama Park Racetrack; and HPT. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to |
(2) | Represents the elimination of intersegment revenues associated with Penn Interactive and HPT. |
(3) | We define Adjusted EBITDAR as earnings before interest expense, net; income taxes; depreciation and amortization; rent expense associated with triple net operating leases (see footnote (4) below); stock-based compensation; debt extinguishment and financing charges; impairment charges; insurance recoveries and deductible charges; changes in the estimated fair value of our contingent purchase price obligations; gain or loss on disposal of assets; the difference between budget and actual expense for cash-settled stock-based awards; pre-opening and acquisition costs; and other income or expenses. Adjusted EBITDAR is also inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as depreciation and amortization) added back for our JV in Kansas Entertainment. |
(4) | The Company’s triple net operating leases include certain components of the Master Leases (primarily land), the Meadows Lease, the Margaritaville Lease, and the Greektown Lease. |
For the year ended December 31, | |||||||||||
(in millions) | 2019 | 2018 | 2017 | ||||||||
Capital expenditures: | |||||||||||
Northeast segment | $ | $ | $ | ||||||||
South segment | |||||||||||
West segment | |||||||||||
Midwest segment | |||||||||||
Other | |||||||||||
Total capital expenditures | $ | $ | $ |
(in millions) | Northeast | South | West | Midwest | Other | Total | |||||||||||||||||
As of December 31, 2019 | |||||||||||||||||||||||
Investment in and advances to unconsolidated affiliates | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Total assets (1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||
As of December 31, 2018 | |||||||||||||||||||||||
Investment in and advances to unconsolidated affiliates | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Total assets (2) | $ | $ | $ | $ | $ | $ | |||||||||||||||||
As of December 31, 2017 | |||||||||||||||||||||||
Investment in and advances to unconsolidated affiliates | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Total assets (2) | $ | $ | $ | $ | $ | $ |
(1) | As of December 31, 2019, total assets of the Other category includes the real estate assets subject to the Master Leases, which are either classified as property and equipment, operating lease ROU assets, or finance lease ROU assets, depending on whether the underlying component of the Master Leases was determined to be an operating lease, a finance lease, or continue to be financing obligations, upon adoption of ASC 842. |
(2) |
• | Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. |
• | Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly quoted intervals. |
• | Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity. |
December 31, 2019 | |||||||||||||||||||
(in millions) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial assets: | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Equity securities | $ | $ | $ | $ | $ | ||||||||||||||
Held-to-maturity securities | $ | $ | $ | $ | $ | ||||||||||||||
Promissory notes | $ | $ | $ | $ | $ | ||||||||||||||
Financial liabilities: | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Senior Secured Credit Facilities | $ | $ | $ | $ | $ | ||||||||||||||
5.625% Notes | $ | $ | $ | $ | $ | ||||||||||||||
Other long-term obligations | $ | $ | $ | $ | $ | ||||||||||||||
Other liabilities | $ | $ | $ | $ | $ |
December 31, 2018 | |||||||||||||||||||
(in millions) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
Financial assets: | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||
Held-to-maturity securities | $ | $ | $ | $ | $ | ||||||||||||||
Promissory notes | $ | $ | $ | $ | $ | ||||||||||||||
Financial liabilities: | |||||||||||||||||||
Long-term debt | |||||||||||||||||||
Senior Secured Credit Facilities | $ | $ | $ | $ | $ | ||||||||||||||
5.625% Notes | $ | $ | $ | $ | $ | ||||||||||||||
Other long-term obligations | $ | $ | $ | $ | $ | ||||||||||||||
Other liabilities | $ | $ | $ | $ | $ |
Other Liabilities | |||
(in millions) | Contingent Purchase Price | ||
Balance as of January 1, 2017 | $ | ||
Additions | |||
Payments | ( | ) | |
Included in earnings (1) | ( | ) | |
Balance as of December 31, 2017 | |||
Payments | ( | ) | |
Included in earnings (1) | |||
Balance as of December 31, 2018 | |||
Payments | ( | ) | |
Included in earnings (1) | |||
Balance as of December 31, 2019 | $ |
(1) | The expense is included in “General and administrative” within our Consolidated Statements of Income. |
(in millions) | Valuation Date | Valuation Technique | Level 1 | Level 2 | Level 3 | Total Balance | Total Reduction in Fair Value Recorded | ||||||||||||||||
Goodwill | 10/1/2019 | Discounted cash flow and market approach | $ | $ | $ | $ | $ | ( | ) | ||||||||||||||
Gaming licenses | 10/1/2019 | Discounted cash flow | $ | $ | $ | $ | $ | ( | ) | ||||||||||||||
Trademarks | 10/1/2019 | Discounted cash flow | $ | $ | $ | $ | $ | ( | ) | ||||||||||||||
Property and equipment (1) | 12/31/2018 | Cost and market approach | $ | $ | $ | $ | $ | ( | ) |
(1) | The fair value, which was concluded to be zero, of our property and equipment associated with Resorts Casino Tunica was determined using Level 2 inputs. See Note 7, “Property and Equipment” for more information. |
Valuation Technique | Unobservable Input | Discount Rate | |||
Plainridge Park Casino contingent purchase price | Discounted cash flow | Discount rate |
(in millions) | Fair Value | Valuation Technique | Unobservable Input | Range or Amount | ||||||
As of October 1, 2019 | ||||||||||
Gaming licenses | $ | Discounted cash flow | Discount rate | 10.5% - 11.25% | ||||||
Long-term revenue growth rate | % | |||||||||
Trademarks | $ | Discounted cash flow | Discount rate | 10.5% - 11.25% | ||||||
Long-term revenue growth rate | % | |||||||||
Pretax royalty rate | 1.0% - 2.0% |
Fiscal Quarter | |||||||||||||||
(in millions, except per share data) | First | Second | Third | Fourth (1) | |||||||||||
2019 | |||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Operating income | $ | $ | $ | $ | |||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | |||||||||
Earnings (loss) per common share: | |||||||||||||||
Basic earnings (loss) per common share | $ | $ | $ | $ | ( | ) | |||||||||
Diluted earnings (loss) per common share | $ | $ | $ | $ | ( | ) | |||||||||
Fiscal Quarter | |||||||||||||||
(in millions, except per share data) | First | Second (2) | Third | Fourth (3) | |||||||||||
2018 | |||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Operating income | $ | $ | $ | $ | |||||||||||
Net income (loss) | $ | $ | $ | $ | ( | ) | |||||||||
Earnings (loss) per common share: | |||||||||||||||
Basic earnings (loss) per common share | $ | $ | $ | $ | ( | ) | |||||||||
Diluted earnings (loss) per common share | $ | $ | $ | $ | ( | ) |
(1) | During the fourth quarter of 2019, we recorded $ |
(2) | During the second quarter of 2018, the Company recorded a recovery of loan losses and unfunded loan commitments of $ |
(3) |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
/s/ Deloitte & Touche LLP |
Philadelphia, Pennsylvania |
February 27, 2020 |
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
(a) 1. | Financial Statements. |
The following is a list of the Consolidated Financial Statements of the Company and its subsidiaries and supplementary data included herein under Item 8 of Part II of this report, “Financial Statements and Supplementary Data”: |
Page | ||
2. | Financial Statement Schedules. |
All schedules have been omitted because they are not applicable, or not required, or because the required information is included in the Consolidated Financial Statements or notes thereto. |
3. | Exhibits, Including Those Incorporated by Reference. |
The exhibits to this Report are listed on the accompanying index to exhibits and are incorporated herein by reference or are filed as part of this annual report on Form 10-K. |
ITEM 16. | FORM 10-K SUMMARY |
Exhibit | |||
Number | Description of Exhibit | ||
2.1†† | |||
2.2†† | |||
2.3†† | |||
2.4†† | |||
2.5†† | |||
2.6†† | |||
2.7†† | |||
2.8†† | |||
2.9†† | |||
3.1 |
Exhibit | |||
Number | Description of Exhibit | ||
3.2 | |||
4.1 | |||
4.2 | |||
4.3 | |||
4.4* | |||
9.1*** | Form of Trust Agreement of Peter D. Carlino, Peter M. Carlino, Richard J. Carlino, David E. Carlino, Susan F. Harrington, Anne de Lourdes Irwin, Robert M. Carlino, Stephen P. Carlino and Rosina E. Carlino Gilbert is hereby incorporated by reference to the Company’s Registration Statement on Form S-1, dated May 26, 1994. (SEC File No. 33-77758) | ||
10.1† | |||
10.2† | |||
10.2(a)† | |||
10.2(b)† | |||
10.2(c)† | |||
10.2(d)† | |||
10.2(e)† | |||
10.2(e)(i)† | |||
10.2(e)(ii)† |
Exhibit | |||
Number | Description of Exhibit | ||
10.3† | |||
10.3(a)* | |||
10.3(b)† | |||
10.3(c)† | |||
10.3(d)† | |||
10.3(e)† | |||
10.3(f)† | |||
10.3(f)(i)† | |||
10.3(f)(ii)† | |||
10.3(g) | |||
10.3(g)(i)† | |||
10.3(h)*† | |||
10.3(i)*† | |||
10.3(j)*† | |||
10.3(k)*† | |||
10.3(l)*† | |||
Exhibit | |||
Number | Description of Exhibit | ||
10.3(m)*† | |||
10.4† | |||
10.5† | |||
10.6† | |||
10.6(a)† | |||
10.7† | |||
10.8† | |||
10.9† | |||
10.10* | |||
10.11* | |||
10.12* | |||
10.13†† | |||
10.13(a) | |||
10.13(b) | |||
10.13(c) | |||
Exhibit | |||
Number | Description of Exhibit | ||
10.13(d) | |||
10.13(e) | |||
10.13(f) | |||
10.13(g) | |||
10.13(h) | |||
10.14†† | |||
10.14(a) | |||
10.14(b) | |||
10.14(c) | |||
10.14(d)†† | |||
10.15 | |||
10.16 | |||
10.17 | |||
Exhibit | |||
Number | Description of Exhibit | ||
10.18 | |||
10.19†† | |||
10.20 | |||
10.21 | |||
10.22 | |||
10.22(a) | |||
10.22(b) | |||
10.23†† | |||
21.1* | |||
23.1* | |||
23.2* | |||
31.1* | |||
31.2* | |||
32.1** | |||
32.2** | |||
99.1* | |||
99.2* |
Exhibit | |||
Number | Description of Exhibit | ||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
104 | Cover Page Inline XBRL File (included in Exhibit 101) | ||
* | Filed herewith. | ||
** | Furnished herewith. | ||
*** | Paper filing. | ||
† | Management contract or compensatory plan or arrangement. | ||
†† | Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Penn National Gaming, Inc. agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request. |
PENN NATIONAL GAMING, INC. | |||
Dated: | February 27, 2020 | By: | /s/ Jay A. Snowden |
Jay A. Snowden | |||
President and Chief Executive Officer |
Signature | Title | Date | ||
/s/ Jay A. Snowden | President, Chief Executive Officer and Director (Principal Executive Officer) | February 27, 2020 | ||
Jay A. Snowden | ||||
/s/ William J. Fair | Executive Vice President Finance and Chief Financial Officer (Principal Financial Officer) | February 27, 2020 | ||
William J. Fair | ||||
/s/ Christine LaBombard | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) | February 27, 2020 | ||
Christine LaBombard | ||||
/s/ David A. Handler | Director, Chairman of the Board | February 27, 2020 | ||
David A. Handler | ||||
/s/ John M. Jacquemin | Director | February 27, 2020 | ||
John M. Jacquemin | ||||
/s/ Ronald J. Naples | Director | February 27, 2020 | ||
Ronald J. Naples | ||||
/s/ Saul V. Reibstein | Director | February 27, 2020 | ||
Saul V. Reibstein | ||||
/s/ Barbara Z. Shattuck Kohn | Director | February 27, 2020 | ||
Barbara Z. Shattuck Kohn | ||||
/s/ Jane Scaccetti | Director | February 27, 2020 | ||
Jane Scaccetti |
1. | The definition of “Director” in Section 2.1 of the Plan is hereby deleted in its entirety and replaced with the following language: |
2. | The definition of “Board” in Section 2.1 of the Plan is hereby deleted in its entirety and replaced with the following language: |
3. | Except as amended as set forth in this Amendment, the Plan remains in full force and effect. |
4. | This Amendment shall be governed by and construed in conformity with, the internal laws of the Commonwealth of Pennsylvania without regard to any of its conflict of laws principles. |
Grantee: | __________________________ |
Date of Grant: | __________________________ |
Number of Options: | __________________________ |
Option Price: | __________________________ |
Vesting Dates and Number of Options Vesting: | __________________________ |
The Award may be subject to performance conditions as determined by the Compensation Committee or its delegee from time to time and as communicated to you. | |
Expiration Date: | __________________________ |
PENN NATIONAL GAMING, INC. | |
Grantee: | __________________________ |
Date of Grant: | __________________________ |
Total Shares of Restricted Stock: | __________________________ |
Vesting Dates and Number of Shares of Restricted Stock Vesting: | __________________________ |
The Award may be subject to performance conditions as determined by the Compensation Committee or its delegee from time to time and as communicated to you. | |
Expiration Date: | __________________________ |
I. | ACCEPTANCE OF AWARD |
II. | VESTING |
III. | FORFEITURE |
IV. | LEAVES OF ABSENCE |
V. | PAYMENT FOR SHARES |
VI. | STOCK CERTIFICATES |
VII. | SHAREHOLDER RIGHTS |
VIII. | RESTRICTIONS ON RESALE |
IX. | TRANSFERABILITY |
X. | WITHHOLDING TAXES |
XI. | ADJUSTMENTS |
XII. | ELECTRONIC DELIVERY AND DISCLOSURE |
XIII. | NO RIGHT TO CONTINUED SERVICE |
XIV. | APPLICABLE LAW |
XV. | CODE SECTION 409A COMPLIANCE |
XVI. | ENTIRE AGREEMENT/AMENDMENT |
PENN NATIONAL GAMING, INC. | |
Grantee: | __________________________ |
Date of Grant: | __________________________ |
Total Number of PSUs: | __________________________ |
Vesting Dates and Number of Units Vesting: | __________________________ |
The Award may be subject to performance conditions as determined by the Compensation Committee or its delegee from time to time and as communicated to you. |
I. | ACCEPTANCE OF AWARD |
II. | GRANT OF PHANTOM STOCK UNITS |
III. | VESTING |
IV. | FORFEITURE |
V. | LEAVES OF ABSENCE |
VI. | PAYMENT |
VII. | NATURE OF PSUs; SHAREHOLDER RIGHTS |
VIII. | TRANSFERABILITY |
IX. | WITHHOLDING TAXES |
X. | ADJUSTMENTS |
XI. | ELECTRONIC DELIVERY AND DISCLOSURE |
XII. | NO RIGHT TO CONTINUED SERVICE |
XIII. | APPLICABLE LAW |
XIV. | CODE SECTION 409A COMPLIANCE |
XV. | ENTIRE AGREEMENT/AMENDMENT |
PENN NATIONAL GAMING, INC. | |
Grantee: | __________________________ |
Date of Grant: | __________________________ |
Total Number of PSUs: | __________________________ |
Vesting Dates and Number of Units Vesting: | __________________________ |
The Award may be subject to performance conditions as determined by the Compensation Committee or its delegee from time to time and as communicated to you. |
I. | ACCEPTANCE OF AWARD |
II. | VESTING |
III. | FORFEITURE |
IV. | LEAVES OF ABSENCE |
V. | PAYMENT FOR SHARES |
VI. | CONVERSION OF PSUS AND ISSUANCE OF SHARES |
VII. | SHAREHOLDER RIGHTS |
VIII. | RESTRICTIONS ON RESALE |
IX. | TRANSFERABILITY |
X. | WITHHOLDING TAXES |
XI. | ADJUSTMENTS |
XII. | ELECTRONIC DELIVERY AND DISCLOSURE |
XIII. | NO RIGHT TO CONTINUED SERVICE |
XIV. | APPLICABLE LAW |
XV. | CODE SECTION 409A COMPLIANCE |
XVI. | ENTIRE AGREEMENT/AMENDMENT |
PENN NATIONAL GAMING, INC. | |
Grantee: | __________________________ |
Date of Grant: | __________________________ |
Total Covered Shares of Common Stock: | __________________________ |
Base Amount: | __________________________ |
Vesting Dates and Number of SARs Vesting: | __________________________ |
The Award may be subject to performance conditions as determined by the Compensation Committee or its delegee from time to time and as communicated to you. | |
Expiration Date: | __________________________ |
I. | ACCEPTANCE OF AWARD |
II. | GRANT OF STOCK APPRECIATION RIGHTS |
III. | VESTING |
IV. | FORFEITURE |
V. | LEAVES OF ABSENCE |
VI. | EXERCISE |
VII. | NATURE OF SARS; SHAREHOLDER RIGHTS |
VIII. | TRANSFERABILITY |
IX. | WITHHOLDING TAXES |
X. | ADJUSTMENTS |
XI. | ELECTRONIC DELIVERY AND DISCLOSURE |
XII. | NO RIGHT TO CONTINUED SERVICE |
XIII. | APPLICABLE LAW |
XIV. | CODE SECTION 409A COMPLIANCE |
XV. | ENTIRE AGREEMENT/AMENDMENT |
PENN NATIONAL GAMING, INC. | |
Grantee: | __________________________ |
Date of Grant: | __________________________ |
Total Number of RSUs: | __________________________ |
Vesting Dates and Number of RSUs Vesting: | __________________________ |
The Award may be subject to performance conditions as determined by the Compensation Committee or its delegee from time to time and as communicated to you. |
I. | ACCEPTANCE OF AWARD |
II. | VESTING |
III. | FORFEITURE |
IV. | LEAVES OF ABSENCE |
V. | PAYMENT FOR SHARES |
VI. | CONVERSION OF RSUs AND ISSUANCE OF SHARES |
VII. | SHAREHOLDER RIGHTS |
VIII. | RESTRICTIONS ON RESALE |
IX. | TRANSFER OF RSUs |
X. | WITHHOLDING TAXES |
XI. | ADJUSTMENTS |
XII. | ELECTRONIC DELIVERY AND DISCLOSURE |
XIII. | NO RIGHT TO CONTINUED SERVICE |
XIV. | APPLICABLE LAW |
XV. | CODE SECTION 409A COMPLIANCE |
XVI. | ENTIRE AGREEMENT/AMENDMENT |
PENN NATIONAL GAMING, INC. | |
Exhibit 10.10
COMMERCIAL LEASE AGREEMENT
THIS LEASE AGREEMENT (the Lease) made the 31st day of March, 1995, by and between WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership (the Landlord), having an address of 825 Berkshire Boulevard, Suite 203, Wyomissing, Pennsylvania 19610 and PENN NATIONAL GAMING, INC. (the Tenant), having an address of 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610.
IN CONSIDERATION of the mutual promises contained herein, and intending to be legally bound hereby, Landlord and Tenant agree as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord 2,120 square feet of rentable floor area, substantially as shown on the floor plan attached hereto as Exhibit A and made a part hereof (the Premises). The Premises are on the second floor of the building having an address of 825 Berkshire Boulevard, Wyomissing, Pennsylvania (the Building), located on a parcel of land containing approximately 11 acres (the Land). In connection with its use of the Premises, Tenant shall have the right to use for its employees twelve undesignated parking spaces in the parking area adjacent to the Building and such other undesignated parking spaces as may be reasonably required for the conduct of its business.
2. TERM.
(a) The term of the Lease shall be five (5) years, commencing on April 1, 1995.
(b) If Tenant, without the consent of Landlord, remains in possession of the Premises beyond the expiration of this Lease or any extension or renewal hereof, such holding over shall be deemed a tenancy at sufferance at one and one-half (1-1/2) times the rent as was in effect at the time such holding over commenced.
3. RENT.
(a) During the first year of the term of this Lease, Tenant shall pay Landlord annual minimum rent in the amount of Twenty Three Thousand Three Hundred Twenty Dollars ($23,320), payable in twelve (12) equal monthly installments of One Thousand Nine Hundred Forty Three Dollars and Thirty Three Cents ($1,943.33). Such annual minimum rent is calculated on the basis of $11.00 per square foot of the rentable floor area of the Premises.
(b) During the second lease year and each lease year thereafter during the term of this Lease, the annual minimum rent shall be increased by three percent (3%) over the prior years annual minimum rent.
(c) All rent shall be payable in advance, without demand, on the first day of each calendar month during the term of this Lease, except that the first full monthly installment shall be paid upon the signing of this Lease. The first and last monthly payments shall be prorated on a per diem basis for any period less than a full calendar month.
(d) All rent shall be payable without any deduction, offset or counterclaim. All rent due hereunder shall be payable in immediately available funds at Landlords address set forth in the introductory paragraph of this Lease or at such other place as may be designated by Landlord.
(e) Tenant shall pay a late charge at the rate of five percent (5%) on each dollar of rent, or any other sum collectible as rent under this Lease, which is not paid within fifteen (15) days after the same is due.
4. TENANTS SHARE OF EXPENSES.
(a) In addition to the payment of annual minimum rent as provided herein, Tenant shall pay as additional rent hereunder its proportionate share (as defined in subparagraph 4(c)) of all Expenses as herein defined. Expenses shall include all real estate taxes assessed against the Building, janitorial services (if any) provided to Tenant, insurance premiums (other than Tenants liability insurance) on the Building, water and sewer costs of the Building as metered, trash removal costs pertaining to the Building, repair and maintenance of HVAC equipment relating to Premises, grass cutting and landscape bed maintenance of the area delineated on plan as Exhibit A, snow removal and parking lot repair, maintenance, repaving, cleaning and striping of the same defined area on Exhibit A, parking lot electric as determined by the house meter on the Building, and all other costs and Expenses incurred by Landlord in operating and maintaining the Building. Expenses shall also include expenses imposed or assessed against the Building and its owner(s) by The Owners Association of Wyomissing Professional Center, West Campus, Inc. consisting of costs of maintaining and repairing the main roadway through the Land. The Expenses shall be pre-paid on a monthly basis during each calendar year of the term of this Lease as provided herein. Attached hereto as Exhibit B and made a part hereof is the current budget estimate and operating expense description for the operation of the Building and the Land. All items on the budget shall be included as Expenses, but other Expenses may be incurred from time to time.
(b) For purposes hereof, Expenses shall not include:
(i) Costs for which Landlord is reimbursed or indemnified (either by an insurer, condemnor, tenant, warrantor or otherwise) or, in the event Landlord fails to properly insure the Building, then Expenses shall not include expenses for which Landlord would have been reimbursed if
Landlord had adequately insured the Building.
(ii) Expenses incurred in leasing or procuring tenants (including lease commissions, advertising expenses, management and leasing offices, lease negotiation and review, expenses of renovating space for tenants, and legal expenses incurred in enforcing the terms of any tenant leases).
(iii) Interest or amortization payments on any mortgages.
(iv) Costs representing an amount paid to an affiliate of Landlord which is in excess of the amount which would have been paid in the absence of such relationship.
(v) Costs specially billed to and paid by specific tenants, including without limitation, expenses for work performed for other tenants in the Building and expenses to be billed to other tenants for excess utility use or other services that are beyond normal office use. There shall be no duplication of costs or reimbursement.
(vi) Depreciation and costs incurred by Landlord for alterations that are considered capital improvements and replacements under generally accepted accounting principles consistently applied except that the annual amortization of these costs shall be included in the following two instances:
(A) The annual amortization over its useful life (not to be less than ten (10) years) with a reasonable salvage value on a straight line basis of the cost of any improvement made by Landlord and required by any changes in applicable laws, rules, or regulations of any governmental authority enacted after the Building was fully assessed as a completed and occupied unit and the Lease was signed.
(B) The annual amortization over its useful life (not to be less than ten (10) years) with a reasonable salvage value on a straight line basis of the cost of any equipment or capital improvements made by Landlord after the Building was fully assessed as a completed and occupied unit and the Lease was signed, as a labor-saving measure or to accomplish other savings in operating, repairing, managing, or maintaining of the Building or Land, but only to the extent of the savings realized.
(vii) Salaries other than salary for a building manager.
(viii) Landlords personal property and Landlords own occupancy costs, if any, in the Building.
(c) The portion of Expenses which are applicable to the Premises (the Premises Expenses) shall be determined by multiplying the Expenses by a fraction, the numerator of which is the rentable floor area of the Premises (presently assumed to be 2,120 square feet), and the denominator of which is the aggregate number of rentable floor area in the Building (presently assumed to be 21,100 square feet), unless a direct billing relating to a cost of operating the Premises not the entire Building occurs, such as
with janitorial or HVAC repair and maintenance, where Tenant would have responsibility for the entire amount.
(d) During the first lease year of the term of this Lease, the Premises Expenses shall be an amount not greater than $3.25 per square foot of rentable floor area of the Premises, which shall equal Six Thousand Eight Hundred Ninety Dollars ($6,890) annually, and Five Hundred Seventy Four Dollars and Sixteen Cents ($574.16) monthly. After the first year of the term of this Lease Tenant shall pay actual Premises Expenses as defined above in 4(a), 4(b) and 4(c).
(e) Tenant shall pay Landlord monthly, in advance, on the first day of each calendar month during the term of this Lease, and pro rata for the fraction of any month, the sum estimated by Landlord to be one-twelfth (1/12th) of Tenants share of all Premises Expenses. If at any time and from time to time it is determined by Landlord that Tenants estimated payments will be insufficient to pay Tenants share of such Premises Expenses, the Landlord shall have the right to adjust the amount of Tenants estimated payments upon thirty (30) days prior written notice, and Tenant agrees to thereafter pay the adjusted estimated payment on a monthly basis.
(f) Within ninety (90) days after the end of each calendar year, Landlord shall deliver to Tenant (i) a written itemization of Expenses for the prior Lease year and (ii) an estimate of the then current Lease years Expenses and Tenants share of the Premises Expenses. An adjustment shall be made between the aggregate total of Tenants share of estimated Premises Expenses actually paid by Tenant during the prior Lease year, and Tenants share of Premises Expenses actually incurred during the prior Lease year, so that Landlord shall reimburse Tenant for any excess paid by Tenant, and Tenant shall pay any deficiency to Landlord within ten (10) days of demand. If Tenant disagrees with the accuracy of the Expenses as set forth in Landlords itemization statement, Tenant shall give written notice to Landlord to that effect, but shall nevertheless make payment in accordance with the terms of this Paragraph.
(g) Landlord shall permit Tenant to inspect its records with respect to the Expenses at a mutually convenient time and place. Any information obtained by Tenant pursuant to the provisions of this Paragraph shall be treated as confidential, except in any litigation between the parties.
(h) If due to a change in the laws presently governing taxation, any franchise tax or tax on income, profit, rentals or occupancies from or of the Premises shall be levied or imposed against the Landlord in lieu of any tax or assessment that would otherwise constitute a real estate tax, such franchise, income, profit tax or tax on rentals shall be deemed to be a real estate tax and included as part of the Expenses.
5. USE. The Premises shall be used only for the purpose of operating a general business office. Tenant will not use, and will not permit the use of, the Premises for any purpose which is unlawful or in violation of any statute, ordinance, rule, regulation or restriction governing the use of the Premises.
6. SERVICES AND FACILITIES. The following services and facilities shall be supplied by Landlord to Tenant in connection with Tenants use of the Premises, in common (where applicable) with other tenants of the Building:
(a) Landlord shall furnish heat and air conditioning equipment and facilities.
(b) Landlord shall supply the Premises with electric service for heating, air conditioning, lighting and power to operate customary business machines, computers and equipment. Landlord shall install meters for measuring Tenants electric usage and shall pay the utility company directly for such building equipment used to furnish heat, air conditioning, lighting and power to the Premises. Tenant shall reimburse Landlord for its prorated share of electrical usage.
(c) Landlord shall furnish a sign containing a reference to the Building and listing the names of the Building tenants.
(d) Landlord shall have no responsibility or liability to Tenant, nor shall there be any abatement in rent for any failure to supply any services or facilities as provided herein during such period as Landlord deems advisable or necessary in order to make repairs, alterations or improvements or because of labor disturbances, strikes, accidents or any other causes beyond Landlords control. Notwithstanding anything to the contrary set forth in this Lease, in the event electric or HVAC service is interrupted for five (5) consecutive business days, all rent and additional rent shall abate on a day-by-day basis hereunder until such services and utilities are restored.
(e) If the work performed in the Premises exceeds the Build Standard work Allowance, Tenant agrees to pay for same promptly.
(f) Landlord shall provide parking lot snow removal, lawncare and landscaping, trash removal and janitorial services.
7. AFFIRMATIVE COVENANTS OF TENANT. Tenant covenants and agrees that it will without demand:
(a) Comply with all requirements of any governmental authorities which apply to Tenants use of the Premises;
(b) Comply with the reasonable rules and regulations from time to time made by Landlord for the safety, care, upkeep and cleanliness of the Premises, the Building and the Land. Tenant agrees that such rules and regulations shall, when written notice thereof is given to Tenant, form a part of this Lease;
(c) Keep the Premises in good order and condition, excepting only ordinary wear and tear and damage by accidental fire or other casualty;
(d) Peaceably deliver up and surrender possession of the Premises to Landlord at the expiration or sooner termination of this Lease, in the Same condition in which Tenant has agreed to keep the Premises during the term of this Lease, and promptly deliver to Landlord at its office all keys for the Premises;
(e) Give to Landlord prompt written notice of any accident, fire or damage occurring on or to the Premises within twenty-four (24) hours of occurrence thereof;
(f) Give to Landlord a copy of any written notice concerning the Premises within twenty-four (24) hours of Tenants receipt thereof; and
(g) To the extent reasonably possible, cause its
employees and visitors to park their cars only in those portions of the parking area as may be designated for that purpose by Landlord, and not use or permit the use of any more designated parking spaces in the parking area than are permitted in Paragraph 1 herein.
(h) Promptly upon request of Landlords Lender, deliver to Landlords lender copies of Tenants annual financial statements for the past two (2) years.
8. NEGATIVE COVENANTS OF TENANT. Tenant covenants and agrees that it will do none of the following without the prior written consent of Landlord, such consent not to be unreasonably withheld or delayed:
(a) Place or allow to be placed any sign, projection or device upon the Premises or on the inside or outside of the Building, which is visible from the exterior of the Premises;
(b) Make any alterations, improvements or additions to the Premises without consent of Landlord. All alterations, improvements, additions or fixtures, whether installed before or after the execution of this Lease, shall remain upon the Premises at the expiration or sooner termination of this Lease and become the property of Landlord, Landlord should have the right to cause Tenant to remove improvements beyond fit-up at termination of Lease, unless Landlord, at the time of its approval of same, shall have given written notice to Tenant to remove the same, in which event Tenant shall remove such alterations, improvements and additions or fixtures, and restore the Premises to the same good order and condition in which they were upon initial occupancy, reasonable wear and tear and damage by casualty excepted; and
(c) Do or suffer to be cone any act objectionable to any insurance company whereby the insurance or any other insurance now in force or hereafter placed on the Premises or the Building shall become void or suspended, or whereby the same shall be rated as a more hazardous risk than at the date of signing of this Lease. In case of a breach of this covenant (in addition to all other remedies herein given to Landlord) Tenant agrees to pay Landlord as additional rent any and all increases of premiums on insurance reasonably carried by Landlord on the Premises or the Building caused in any way by the use or occupancy of the Premises by the Tenant.
9. LANDLORDS RIGHT TO ENTER. Tenant shall permit, after written notice except in cases of emergency, Landlord, Landlords agents, servants, employees, and prospective buyers or any other persons authorized by Landlord, to inspect the Premises at any reasonable time, and to enter the Premises for the Purposes of cleaning and, if Landlord shall so elect, for making reasonable alterations, improvements or repairs to the Building, for any reasonable purpose in connection with the operation and maintenance of the Building, and, during the last six (6) months of the term of this Lease, for the purpose of exhibiting the same for sale or lease.
10. RELEASE OF LANDLORD. Tenant shall be responsible for and hereby relieves Landlord from any and all liability by reason of any injury, loss, damage, to any person or property in the Premises, whether the same be due to fire, breakage, leakage, water flow, gas, use, misuse, or defects therein, or condition anywhere
in the Premises, failure of water supply or light or power or electricity, wind, lightning, storm, or any other cause whatsoever, whether the loss, injury or damage be to the person or property of Tenant or any other persons, unless such loss, injury or damage is caused by the negligence or willful misconduct of Landlord, its agents or employees.
11. ASSIGNMENT AND SUBLETTING. Except as otherwise provided in the immediately following sentence, Tenant shall not assign, mortgage or pledge this Lease, or sublet the Premises or any part thereof, or permit any other person or occupy the Premises or any part thereof, without the prior written consent of Landlord, such consent not to be unreasonably withheld or delayed. Such prior consent shall not be required of Tenant makes an assignment or sublease to a subsidiary or affiliate or other corporation or partnership which is controlled by Tenant or Tenants principals, provided that prior to taking possession of any part of the Premises, such assignee or sublessee shall sign an assumption agreement in form satisfactory to Landlord, whereby such assignee or sublessee agrees to be bound by the terms and conditions of this Lease. Any such assignment or subletting, even with the consent of Landlord, shall not release Tenant from liability for payment of rent or any other charges hereunder or from any of the other obligations under this Lease, and any additional consideration resulting from an assignment or subletting requiring Landlords prior consent in excess of the rent specified herein shall be additional rent hereunder due and payable to Landlord. The acceptance of rent from any other obligations under this Lease, and any additional consideration resulting from an assignment or subletting requiring Landlord prior consent in excess of the rent specified herein shall be additional rent hereunder due and payable to Landlord. The acceptance of rent from any other person shall not be deemed to be a waiver of any of the provisions of this Lease or to be a consent to an assignment or subletting. Upon any assignment of this Lease or subletting of the Premises, a change in any respect of the use of the Premises from the use actually employed by the original Tenant shall require the prior written consent of Landlord.
12. ENVIRONMENTAL COMPLIANCE. Tenant shall not cause or permit any hazardous substance, material or waste (as defined in any applicable environmental law, rule or regulation) to be brought upon or used in or about the Premises. Tenant shall cause the Premises to be used in compliance with all applicable environmental laws, rules and regulations. Any failure of Tenant to comply with the covenants contained in this paragraph shall be covered by the indemnification provisions of Paragraph 14 herein and shall be subject to all other rights and remedies available to Landlord.
13. INDEMNIFICATION.
(a) Tenant agrees to indemnify Landlord against loss and save Landlord harmless from and against (a) any breach or default in the performance of any covenant or agreement to be performed by Tenant under the terms of this Lease, (b) any and all claims arising from anything done in or about The Premises during the term of this Lease by Tenant or any or its agents, contractors, servants, employees, invitees or license, (c) any act or negligence
of Tenant or any of its agents, contractors, servants, employees, invitees or licensees, including any accident, injury or damage whatsoever caused to any person, in or about the Premises. and (d) all costs, reasonable counsel fees, expenses and liabilities incurred in connection with any such claim for which indemnification has been provided under this paragraph. In case any action or proceeding shall be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall provide Landlord with counsel to defend such action or proceeding. Tenant shall, within ten (10) days following notice to it of any claim of a third party relating to tenants use or occupancy of the Premises or to the performance or non-performance by tenant of its obligations under this Lease, give written notice to the Landlord of such claim. The provisions of this paragraph shall survive the expiration or termination of this lease.
(b) Landlord agrees to indemnify Tenant against loss and save Tenant harmless from and against (i) any breach or default in the performance of any covenant or agreement to be performed by Landlord under the terms of this Lease, (ii) any claims arising from anything done on or about the Land (other than the Premises) during the term of this Lease by Landlord or any of its agents, contractors, servants, employees, invitees or licensees, (iii) any act or negligence of Landlord or any of its agents, contractors, servants, employees, invitees or licensees, including any accident, injury or damage whatsoever caused to any person in or about the Land (other than the Premises), and (iv) all costs, reasonable counsel fees, expenses and liabilities incurred in connection with any such claim for which indemnification has been provided under this paragraph. In case any action or proceeding shall be brought against Tenant by reason of any such claim, Landlord, upon notice from Tenant, shall provide Tenant with counsel to defend such action or proceeding. Landlord shall, within ten (10) days following notice to it of any claim of a third party relating to the Land (other than the Premises) or the performance or non-performance by Landlord of its obligations under this Lease, give written notice to Tenant of such claim. The provisions of this paragraph shall survive the expiration or termination of this Lease.
14. LIABILITY INSURANCE.
(a) Tenant, at its own cost and expense, shall obtain during the term of this Lease, and any renewals or extensions thereof, comprehensive public liability insurance in companies acceptable to Landlord, naming Landlord and Tenant as the insureds, in an amount not less than One Million Dollars ($1,000,000.00), and providing for at least thirty (30) days prior written notice to Landlord of cancellation, nonrenewal, or modification.
(b) Prior to its occupancy of the Premises, Tenant shall deliver to Landlord a certificate evidencing such insurance policy. At least thirty (30) days before the expirations of such policy and any renewal policies, Tenant shall deliver to Landlord certificates evidencing such renewal policies.
15. FIRE OR OTHER CASUALTY.
(a) If during the term of this Lease or any renewal or extension thereof, the Premises or the building is substantially destroyed or is so damaged by fire or other casualty (whether or
not the Premises are damaged) that the same cannot be repaired or restored within one hundred twenty (120) regular working days from the date of the happening of such damage, or if such damage or casualty is not included in the risks covered by Landlords fire insurance with the usual extended coverage, then this Lease shall absolutely cease and terminate and the rent shall abate for the balance of the term. In such case, Tenant shall pay the rent apportioned to the date of damage and Landlord may enter upon and repossess the Premises without further notice.
(b) If the damage caused as above renders twenty-five (25%) or more of the Premises unfit for occupancy, but such damage can be repaired or restored within one hundred twenty (120) regular working days and said damage and the cost of repairs and restoration are fully covered by the Landlords insurance, Landlord may exercise either of the following options:
(i) Landlord shall have the option to restore the Premises in which event the rent shall be apportioned during the time Landlord is in possession, taking into account the proportion of the Premises rendered untenantable and the duration of Landlords possession.
(ii) Landlord shall have the option to terminate this Lease by giving written notice of such termination to Tenant within thirty (30) days after said partial destruction; and upon the giving of such notice, the Lease shall expire by lapse of time after thirty (30) days and the Tenant shall vacate the Premises.
(c) If the damage caused as above renders less than twenty-five percent (25%) of the Premises unfit for occupancy, Landlord shall repair whatever portion of the Premises that may have been damaged by fire or other casualty insured as aforesaid, and the rent shall be apportioned as set forth in subparagraph (b) (i) above.
(d) In the event Landlord elects to restore the Premises as set forth in this paragraph 15, and fails to complete such restoration within one hundred and twenty (120) days from the date of the happening of such damage, Tenant shall have the right, upon thirty (30) days prior notice to Landlord, to terminate this Lease. Should Landlord complete said restoration prior to said termination date, termination shall be null and void.
16. WAIVER OF SUBROGATION. Landlord and Tenant shall each endeavor to procure an appropriate clause in, or endorsement on, any fire and extended coverage insurance covering the Premises and buildings and personal property, fixtures, and equipment located thereon or therein, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery. Each party hereto hereby agrees that it will no make any claim against or seek to recover from the other for any loss or damage to its property or the property of others resulting from fire or other hazards covered by such fire and extended coverage insurance except as expressly provided in this Lease; provided, however, that the release, discharge, exoneration, and covenant not to sue herein contained shall be limited by the terms and provisions of the waiver of subrogation clauses and/or endorsements consenting to a waiver of right of recovery and shall be coextensive therewith.
17. NO IMPLIED EVICTION. Notwithstanding any inference to the contrary herein contained, it is understood that, the exercise by
Landlord of any of its rights hereunder shall never be deemed an eviction (constructive or otherwise) of Tenant, of a disturbance of its use of the Premises, and shall in no event render Landlord liable to tenant or any other person, so long as such exercise of rights is in accordance with the foregoing terms and conditions.
18. CONDEMNATION. If the whole of the Premises shall be acquired or condemned by eminent domain, then the term of this Lease shall cease and terminate sixty (60) days prior to the date on which possession of the Premises is required to be surrendered to the condemning authority. All rent shall be paid up to the date of termination. A partial condemnation shall not be cause for termination of this Lease, but rent shall be abated to an equitable amount. Tenant hereby expressly waives any right or claim to any part of an condemnation award or damages and hereby assigns to Landlord any such right or claim to which Tenant might become entitled.
19. LANDLORDS RIGHT TO PAY TENANT EXPENSES. If Tenant shall ar any time fail to pay any utility or other charges or to take our, pay for, maintain or deliver any of the insurance policies provided for herein, or shall fail to make any other payment or perform any under this Lease, then without waiving, or releasing Tenant from, any obligations of Tenant contained in this Lease, Landlord may, upon ten (10) days prior written notice to Tenant (except in the event of an emergency) but shall not be obligated to pay any such charge, effect any such insurance coverage and pay premiums manner and to such extent as shall be necessary. In exercising any such rights, Landlord may pay necessary and incidental costs and expenses, employ counsel and incur and pay reasonable attorneys fee. All sums so paid by Landlord and all necessary and incidental costs and expenses in connection with the performance of any such act by Landlord, together with interest thereon at the rate of nine percent (9%) per annum from the date of the making of such expenditure by Landlord, shall be deemed additional rent hereunder and, except as otherwise expressly provided in this Lease, shall be payable to Landlord after five (5) days written notice thereof. Tenant covenants to pay any such sum or sums with interest as aforesaid and Landlord shall have (in addition to any other right or remedy of the Landlord) the same rights and remedies in the event of nonpayment thereof by Tenant as in the case if default by Tenant in the payment of rent.
20. EVENTS OF DEFAULT. The occurrence of each of the following events shall be an Event of Default hereunder:
(a) Tenant does not pay in full when due any installment of rent, additional rent, or any other charges, expenses or costs herein agreed to be paid by Tenant for a period of five (5) days after receipt of notice that same has not been paid when due; provided that in the event Tenant shall have received three (3) such written notices within any period of twelve (12) consecutive months, then during the remainder of the twelve (12) consecutive month period after Tenant shall have received its first written notice from Landlord, Tenant shall thereafter be in default hereunder whenever Tenant shall fail to pay any sum owing under this Lease when due, without the necessity of sending any written notice on nonpayment;
(b) Tenant violates or fails to perform or comply with any other term, covenant, condition, or agreement herein contained
and fails to cure such default within thirty (30) days of receipt of notice thereof from Landlord, provided, however, if such default cannot be cured with reasonable diligence within such thirty (30) day period, the time for cure of same shall be deemed extended for such additional time as is reasonably necessary to cure same with due diligence.
(c) Tenant vacates the Premises;
(d) Tenant shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent or shall file any petition or answer seeking any reorganization, arrangement, recapitalization, readjustment, liquidation or dissolution or similar relief under any present or future bankruptcy laws of the United States or any other country or political subdivision thereof, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of all or any substantial part of Tenants properties, or shall make an assignment for the benefit of creditors, or shall admit in writing Tenants inability to pay Tenants debts generally as they become due; or
(e) If an involuntary petition in bankruptcy shall be filed against Tenant seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future bankruptcy laws of the United States or any other state or political subdivision thereof, and if within ninety (90) days after the commencement of any such proceeding against Tenant, such proceedings shall not have been dismissed, or if, within ninety (90) days after the appointment, without the consent or acquiescence of Tenant, or any trustee, receiver or liquidator of the Tenant or of all or any substantial part of Tenants property, such appointment shall not have been vacated or stayed on appeal or otherwise, or if, within sixty (60) days after the expiration of any such stay, such appointment shall not have been vacated.
21. LANDLORDS REMEDIES.
(a) Upon the occurrence of any Event of Default, Landlord may, at its option, terminate this Lease, whereupon the estate hereby vested in Tenant shall cease and any and all other right, title and interest of Tenant hereunder shall likewise cease without notice or lapse of time, as fully and with like effect as if the entire term of this Lease had elapsed, but Tenant shall continue to be liable to Landlord as hereinafter provided.
(b) Upon the occurrence of any Event of Default, or at any time thereafter, Landlord, in addition to and without prejudice to any other rights and remedies Landlord shall have at law or in equity, shall have the right to re-enter the Premises, and recover possession thereof and dispossess any or all occupants of the Premises in the manner prescribed by the statute relating to summary proceedings, or similar statutes, but Tenant in such case shall remain liable to Landlord as hereinafter provided.
(c) In case of any Event of Default, re-entry, expiration and/or dispossession by summary proceedings, whether or not this Lease shall have been terminated as aforesaid:
(i) All delinquent rent and additional rent shall become payable thereupon and be paid up to the time of such re-entry, expiration and/or dispossession;
(ii) Landlord shall have the right, but not the obligation, to relet the Premises or any part or parts thereof for the account of Tenant, either in the name of Landlord or otherwise,
for a term or terms which may, at Landlords option, be less than or exceed the period which would otherwise have constituted the balance of the term of this Lease and to grant reasonable concessions for rent, costs, brokerage fees and attorneys fees;
(iii) Tenant shall reimburse Landlord for any expenses that Landlord may incur in connection with recovering possession of the Premises and any reletting thereof, such as court costs, attorneys fees, brokerage fees, and the costs of advertising and the costs of any alteration, repairs, replacements and/or decorations in or to the Premises as Landlord, in Landlords sole judgment, considers advisable and necessary for the purpose of such reletting of the Premises; and the making of such alterations, repairs, replacements and/or decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid; and
(iv) Tenant or the legal representatives of Tenant, at Landlords options, shall pay Landlord, either (1) in monthly installments, the difference between the rent and the additional rent reserved hereunder and the rent, if any, received by Landlord pursuant to any reletting, or (2) liquidated damages and not a penalty in an amount equal to the rent which should have become due during the remainder of the term of this Lease and an estimate of the additional rent which would have become due during the remainder of the term of this Lease (calculated by using the additional rent paid by Tenant for the immediately preceding Lease year), reduced to present value at the rate of nine (9%) percent per annum.
(d) If Tenant defaults (after the expiration of applicable notice and/or cure periods) on any payment of additional rent required to be make by it under this Lease, or fails (after the expiration of applicable notice and/or cure periods) to furnish evidence of such payments at the times in this Lease required, Landlord may make such payment for Tenant without notice. If Tenant defaults (after the expiration of applicable notice and/or cure periods) in the performance or observance of any non-monetary term, covenant or condition to be performed or observed by it under this Lease, Landlord may take action to rectify such non-monetary default on Tenants behalf. Landlord may rectify such default (after the expiration of applicable notice and/or cure periods) on Tenants behalf immediately and without such notice of immediate action is reasonably believed to be required in order to avoid injury or damage to other persons or property (including Landlords property). Landlord may enter the Premises to rectify such defaults. All money advanced and expenses incurred by Landlord in rectifying any defaults (after the expiration of applicable notice and/or cure periods) (including Landlords attorneys fees) together with interest thereon at 9% per annum from the date advanced until the date paid by Tenant, shall be repaid by Tenant to Landlord on demand.
(e) In the event Tenant commits a default, or suffers a default to exist, Tenant shall reimburse Landlord for Landlords reasonable attorneys fees incurred by Landlord in the enforcement of this Lease, within fifteen (15) days after written demand.
(f) Landlord shall use commercially reasonable efforts to mitigate its damages.
22. RIGHT OF ASSIGNEE OF LANDLORD. The right to enforce all of the provisions of this Lease may be exercised by any assignee of the Landlords right, title and interest in this Lease in its, his,
her or their own name, and Tenant hereby expressly waives the requirements of any and all laws regulating the manner and/or form in which such assignments shall be executed and witnessed.
23. REMEDIES CUMULATIVE. All remedies given to Landlord herein and all rights and remedies given to Landlord by law and equity shall be cumulative and concurrent. No termination of this Lease, or taking or recovering of possession of the Premises, or entry of any judgment either for possession or for any money claimed to be due Landlord, shall deprive Landlord of any other action against Tenant for possession, or for any money due Landlord hereunder, or for damages hereunder. The exercise of or failure to exercise any remedy shall not bar or delay the exercise of any other remedy.
24. TENANTS WAIVERS.
(a) If proceedings shall be commenced by Landlord to recover possession of the Premises, either at the end of the term hereof or by reason of an Event of Default or otherwise, Tenant expressly waives all rights to notice in excess of five days required by any Act of Assembly, including the Act of April 6, 1951, P.L. 69, Art. V, Sec. 501 and agrees that in either or any such case five (5) days notice shall be sufficient. Without limitation of or by the foregoing, Tenant hereby waives any and all demands, notices of intention, and notice of action or proceedings which may be required by law to be given or taken prior to any entry or re-entry by summary proceedings, ejectment or otherwise, by Landlord, except as hereinbefore expressly provided with respect to five (5) days notice.
(b) Any notice to quit required by law previous to proceedings to recover possession of the Premises or any notice of demand for rent on the day when such is due and the benefit of all laws granting stay of execution, appeal, inquisition and exemption are hereby waived by Tenant; provided, however, that nothing in this paragraph shall be construed as a waiver of any notice specifically mentioned or required by any other part of this Lease.
(c) In the event of a termination of this Lease prior to the date of expiration herein originally fixed, Tenant hereby waives all right to recover or regain possession of the Premises, to save forfeiture by payment of rent due or by other performance of the conditions, terms or provisions hereof, and, without limitation of or by the foregoing, Tenant waives all right to reinstate or redeem this Lease notwithstanding any provisions of any statute, law or decision now or hereafter in force or effect and Tenant waives all right to any second or further trial in summary proceedings, ejectment or in any other action provided by any statute or decision now or hereafter in force or effect.
25. ATTORNMENT. In the event of the sale or assignment of Landlords interest in the Building or in the event of exercise of the power of sale under any mortgage made by Landlord covering the Building, Tenant shall attorn to the purchaser and recognize such purchaser as Landlord under this Lease.
26. SUBORDINATION. At the option of Landlord or Landlords lender, or both of them, this Lease and the Tenants interest hereunder shall be subject and subordinate at all times to any mortgage or mortgages, deed or deeds of trust, or such other security instrument or instruments, including all renewals,
extensions, consolidations, assignments and refinances of the same, as well as all advances made upon the security thereof, which now or hereafter become liens upon the Landlords fee and/or leasehold interest in the Premises, and/or any and all of the buildings now or hereafter erected or to be erected and/or any and all of the Land, provided, however, that in such case, the holder of such other security, the trustee of such deed of trust or holder of such other security instrument shall agree that this Lease shall not be divested or in any way affected by foreclosure or other default proceedings under said mortgage, deed or trust, or other instrument or other obligations secured thereby, so long as no Event of Default occurs by Tenant under the terms of this Lease; and agrees that this Lease shall remain in full force and effect notwithstanding any such default proceedings.
27. EXECUTION OF DOCUMENTS. The above subordination shall be self-executing, but Tenant agrees within twenty (20) days after demand to execute such other reasonable document or documents as may be required by mortgagee, trustee under any deed of trust, or holder of a similar security interest, or any party to the types of documents enumerated herein for the purpose of subordinating this Lease in accordance with the forgoing. Additionally, Landlord agrees to execute a Landlord waiver, for furnishings and equipment only, in favor of any Lender of the Tenant or Owner of furnishings and equipment.
28. ESTOPPEL AGREEMENTS. Tenant shall execute an estoppel agreement in favor of any mortgagee or purchaser of Landlords interest herein, within ten (10) business days after requested to do so by Landlord or any such mortgagee or purchaser. Such estoppel agreement shall be in the form reasonably requested by Landlord or such mortgagee or purchaser.
29. NOTICES. All notices required to be given by either party to the other shall be in writing. All such notices shall be deemed to have been given upon delivery in person, or two (2) business days after depositing in the United States mail, by certified mail, return receipt requested, postage prepaid, or by delivery by telefax, facsimile or telegraph, or by Federal Express or other nationally recognized overnight delivery service, addressed to Landlord at 825 Berkshire Boulevard, Suite 203, Wyomissing, Pennsylvania 19610 and addressed to Tenant at the Premises or to such other address which either party may hereafter designate in writing by notice given in a like manner.
30. BINDING EFFECT. All rights and liabilities herein given to, or imposed upon the respective parties hereto, shall extend to and bind the several and respective heirs, executors, administrators, successors and permitted assigns of said parties.
31. SURVIVAL OF VALID TERMS. If any provision of the Lease shall be invalid or unenforceable, the remainder of the provisions of this Lease shall not be affected thereby and each and every provision of this Lease shall be enforceable to the fullest extent permitted by law.
32. ENTIRE AGREEMENT. This Lease and any exhibit, rider or addendum that may be attached hereto set forth all the promises, agreements, conditions and understandings, between Landlord and
Tenant relative to the Premises, and there are no promises, agreements, conditions or understandings either oral or written between them other than are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them.
33. PROHIBITION AGAINST RECORDING. This Lease shall not be recorded and any attempted recording of this Lease shall constitute an Event of Default hereunder.
34. INTERPRETATION. As used in this Lease and when required by context, each number (singular or plural) shall include all numbers, and each gender shall include all genders. Time is and shall be of essence of each term and provision of this Lease. The term person as used herein means person, firm, association or corporation, as the case may be. If Tenant is more than one person, all agreements, conditions, obligations, covenants, warrants of attorney, waivers and releases made by Tenant shall be joint and several, and shall bind and affect all persons who are defined as Tenant herein.
35. LIABILITY OF LANDLORD. The term Landlord as used herein means the fee owner of the Premises from time to time. In the event of the voluntary or involuntary transfer of such ownership to a successor-in-interest of the Landlord, the Landlord shall be automatically discharged and relieved of and from all liability and obligations hereunder which shall thereafter accrue, and Tenant shall look solely to such successor-in-interest for the performance and obligations of the Landlord hereunder which shall thereafter accrue. The liability of Landlord and its successors-in-interest under or with respect to this Lease shall be strictly limited to and enforceable solely out of its or their interest in the Premises and shall not be enforceable out of any other assets.
36. CAPTIONS AND HEADINGS. The captions and headings of the paragraphs contained herein are for convenience of reference only and in no way defining, limit, describe, modify or amplify the interpretation, construction or meaning of any provisions of or the scope or intent of this Lease nor in any way affect this Lease. All Exhibits are an integral part of this Lease and are attached hereto.
37. QUIET ENJOYMENT. Upon Tenants compliance with the provisions of this Lease, including the payment of all rent and additional rent hereunder, Tenant shall peaceably hold and enjoy the Premises during the term hereof without hinderance or interruption by Landlord or any person claiming under Landlord.
38. DISCLAIMER. The obligations under this Lease are the obligations of the Lessee personally and not that of any company with which Lessee may be affiliated. Lessor agrees that this Agreement is solely between itself and the Lessee personally and Lessor hereby waives any claims, rights of action, or liabilities whatsoever against any companies with which Lessee may be affiliated which may arise out of this Lease.
39. TERMINATION BY LANDLORD. Landlord shall have an option to terminate this Lease at any time upon exercise by Marathon Business
Systems of its option to expand into Premises. Landlord shall require Peter Carlino Company to vacate its offices in part or whole prior to exercising this option with Tenant.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound to the terms of this Lease, have caused this Lease to be executed the day and year first above written.
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WYOMISSING PROFESSIONAL CENTER, III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership, by its General Partner: | |
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WYOMISSING PROFESSIONAL CENTER, III, INC. | |
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By: |
/s/ Stephen J. Najarian |
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Vice President |
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Attest: |
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(Asst.) Secretary |
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Landlord |
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PENN NATIONAL GAMING, INC. | |
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By: |
/s/ Peter M. Carlino |
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Attest: |
Robert S. Ippolito |
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Secretary (or Asst. Secretary) |
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Tenant |
FIRST AMENDMENT TO COMMERCIAL LEASE AGREEMENT
THIS FIRST AMENDMENT TO COMMERCIAL LEASE AGREEMENT (the First Amendment), made the 15th day of April, 1997, by and between WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership (the Landlord), having an address at 825 Berkshire Boulevard, Suite 203, Wyomissing, PA 19610, and PENN NATIONAL GAMING, INC. (the Tenant), having an address at 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610.
BACKGROUND
On or about April 1, 1995, Tenant and Wyomissing Professional Center III, Limited Partnership (Landlord) entered into a Lease Agreement (the Lease) pertaining to 2,120 square feet of rentable area in the building constructed at 825 Berkshire Boulevard, Wyomissing, Pennsylvania. This Amendment will adjust area of the Premises.
NOW, THEREFORE, in consideration of the foregoing Background, and each party intending to be legally bound hereby, Landlord and Tenant covenant and agree as follows:
AGREEMENT
1. Paragraph 1 of the Lease is amended to read as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord 2,644 square feet of rentable floor area (the Premises) in the building identified as in Exhibit A of this First Amendment and made a part hereof. The Premises are on the second floor of a building having an address of 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610 (the Building), located on a parcel of land containing approximately 11 acres (the Land). In connection with its use of the Premises, Tenant shall have the right to use for its employees twelve undesignated and two designated parking spaces in the parking area adjacent to the Building and such other undesignated parking spaces as may be reasonably required for the conduct of its business.
All other references to the area of the Premises in the Lease are hereby amended to mean the square footage figures as stated hereinabove.
3. Effective October 1, 1996, Paragraph 3(a) of the Lease shall be amended to read as follows:
(b) During the remainder of the second year of the term of this Lease, Tenant shall pay Landlord annual minimum rent in the amount of Twenty Nine Thousand Nine Hundred Fifty Six Dollars and Fifty Two Cents ($29,956.52), payable in twelve (12) equal monthly installments of Two Thousand Four Hundred Ninety Six Dollars and Thirty Seven Cents ($2,496.37). Such annual minimum rent is calculated on the basis of $11.33 per square foot of the rentable floor area of the Premises. Each lease year thereafter during the term of this Lease, the annual minimum rent shall be increased by three percent (3%) over the prior years annual minimum rent
4. Effective October 1, 1996, Paragraph 4(c) of the Lease shall be amended to read as follows:
The portion of Expenses which are applicable to the Premises (the Premises Expenses) shall be determined by multiplying the Expenses by a fraction, the numerator of which is the rentable floor area of the Premises (presently assumed to be 2,644 square feet), and the denominator of which is the aggregate number of rentable floor area in the Building (presently assumed to be 21,100 square feet), except that Tenant specific Expenses, including janitorial services, shall be allocated directly to each tenant in the building.
5. Effective October 1, 1996, Paragraph 4(d) of the Lease shall be amended to read as follows:
Tenant agrees to pay Landlord as additional rent hereunder all Premises Expenses incurred during the term of this Lease. Tenant shall pay $3.25 per square foot of rentable floor area for Premises Expenses. This amount shall equal Eight Thousand Five Hundred Ninety Three Dollars ($8,593.00) each year payable in twelve (12) equal monthly installments of Seven Hundred Sixteen Dollars and Eight Cents ($716.08) each. After the first year of the term of this Lease Tenant shall pay actual Premises Expenses as defined above in 4(a), 4(b) and 4(c).
6. The Tenant shall pay to Landlord, as billed, an amount of Twenty Five Thousand Four Hundred Sixty Seven Dollars and Fifty One Cents ($25,467.51) based on the attached costs for additional interior improvements.
7. Except as hereby amended, the Lease is hereby ratified and confirmed.
8. This First Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, Landlord and Tenant have caused this First Amendment to be duly executed by their authorized officers the day and year first above written.
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WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership by its General Partner: | |
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WYOMISSING PROFESSIONAL CENTER III, INC. | |
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By: |
/s/ Stephen J. Najarian |
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Vice President |
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Attest: |
Stephen J. Najarian |
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Asst. Secretary |
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Landlord |
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|
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PENN NATIONAL GAMING, INC. | |
|
| |
|
By: |
/s/ William J. Bork |
|
|
President |
|
|
|
|
Attest: |
/s/ Robert S. Ippolito |
|
|
Secretary |
|
|
Tenant |
SECOND AMENDMENT TO COMMERCIAL LEASE AGREEMENT
THIS SECOND AMENDMENT TO COMMERCIAL LEASE AGREEMENT (the SECOND AMENDMENT), made the 30 day of October, 1997, by and between WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership (the Landlord), having an address at 825 Berkshire Boulevard, Suite 203, Wyomissing, PA 19610, and PENN NATIONAL GAMING, INC. (the Tenant), having an address at 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610.
BACKGROUND
On or about April 1, 1995, Tenant and Wyomissing Professional Center III, Limited Partnership (Landlord) entered into a Lease Agreement (the Lease) pertaining to 2,120 square feet of rentable area in the building constructed at 825 Berkshire Boulevard, Wyomissing, Pennsylvania. On or about April 15, 1997 Tenant and Landlord entered into a First Amendment which increased the rentable square feet to 2,644. This Second Amendment shall increase the rentable and usable square footage.
NOW, THEREFORE, in consideration of the foregoing Background, and each party intending to be legally bound hereby, Landlord and Tenant covenant and agree as follows:
AGREEMENT
1. Paragraph 1 of the Lease is amended to read as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord 6,183 square feet of rentable floor area (the Premises) in the building identified as in Exhibit A of this Second Amendment and made a part hereof. The Premises are on the second floor of a building having an address of 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610 (the Building), located on a parcel of land containing approximately 11 acres (the Land). In connection with its use of the Premises, Tenant shall have the right to use for its employees twenty five (25) undesignated and two designated parking spaces in the parking area adjacent to the Building and such other undesignated parking spaces as may be reasonably required for the conduct of its business.
All other references to the area of the Premises in the Lease are hereby amended to mean the square footage figures as stated hereinabove.
2. Paragraph 2 of the Lease is amended to read as follows:
2. TERM. (a) The term of the Lease shall be ten (10) years, commencing on April 1, 1995.
All other references to the term of the Lease are hereby amended.
3. Effective October 1, 1997, Paragraph 3(a) of the Lease shall be amended to read as follows:
(b) During the remainder of the third year of the term of this Lease, Tenant shall pay Landlord equal monthly installments of Five Thousand Nine Hundred Twenty Five Dollars and Thirty Seven Cents ($5,925.37). Such rent is calculated on the basis of $11.50 per square foot of the rentable floor area of the Premises, which is calculated at 6,183 rentable square feet. Each lease year thereafter during the term of this Lease, the annual minimum rent shall be increased by three percent (3%) over the prior years annual minimum rent.
4. Effective October 1, 1997, Paragraph 4(c) of the Lease shall be amended to read as follows:
The portion of Expenses which are applicable to the Premises (the Premises Expenses) shall be determined by multiplying the Expenses by a fraction, the numerator of which is the rentable floor area of the Premises (presently assumed to be 6,183 rentable square feet), and the denominator of which is the aggregate number of rentable floor area in the Building (presently assumed to be 21,100 square feet), except that Tenant specific Expenses, including janitorial services, shall be allocated directly to each tenant in the building.
5. Effective October 1, 1997, Paragraph 4(d) of the Lease shall be amended to read as follows:
Tenant agrees to pay Landlord as additional rent hereunder all Premises Expenses incurred during the term of this Lease. Tenant shall pay $4.00 per square foot of rentable floor area for Premises Expenses. This amount shall be paid in equal monthly installments of Two Thousand Sixty One Dollars ($2,061) each. After the first year of the term of this Lease Tenant shall pay actual Premises Expenses as defined above in 4(a), 4(b) and 4(c).
6. The Tenant shall pay to Landlord, as billed, an amount of Ninety Thousand Fifty Two Dollars and Thirty Cents ($90,052.30), based on the attached costs for additional interior improvements.
7. Except as hereby amended, the Lease is hereby ratified and confirmed.
8. This Second Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Second Amendment to be duly executed by their authorized officers the day and year first above written.
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WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership by its General Partner: | |
|
| |
|
WYOMISSING PROFESSIONAL CENTER III, INC. | |
|
|
|
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By: |
/s/ Stephen J. Najarian |
|
|
Vice President |
|
|
|
|
Attest: |
Stephen J. Najarian |
|
|
Secretary |
|
|
Landlord |
|
PENN NATIONAL GAMING, INC. | |
|
|
|
|
By: |
/s/ William J. Bork |
|
|
President |
|
|
|
|
Attest: |
Robert S. Ippolito |
|
|
Secretary |
|
|
Tenant |
THIRD AMENDMENT TO COMMERCIAL LEASE AGREEMENT
THIS THIRD AMENDMENT TO COMMERCIAL LEASE AGREEMENT (the THIRD AMENDMENT), made the 23 day of April, 1998, by and between WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership (the Landlord), having an address at 825 Berkshire Boulevard, Suite 203, Wyomissing, PA 19610, and PENN NATIONAL GAMING, INC. (the Tenant), having an address at 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610.
BACKGROUND
On or about April 1, 1995, Tenant and Wyomissing Professional Center III, Limited Partnership (Landlord) entered into a Lease Agreement (the Lease) pertaining to 2,120 square feet of rentable area in the building constructed at 825 Berkshire Boulevard, Wyomissing, Pennsylvania. On or about April 15, 1997 Tenant and Landlord entered into a First Amendment which increased the rentable square feet to 2,644. On or about October 30, 1997 Tenant and Landlord entered into a Second Amendment which increased the rentable square feet to 6,183. This THIRD Amendment shall decrease the rentable square footage.
NOW, THEREFORE, in consideration of the foregoing Background, and each party intending to be legally bound hereby, Landlord and Tenant covenant and agree as follows:
AGREEMENT
1. Paragraph 1 of the Lease is amended to read as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord 5,974 square feet of rentable floor area (the Premises) in the building identified as in Exhibit A of this THIRD Amendment and made a part hereof. The Premises are on the second floor of a building having an address of 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610 (the Building), located on a parcel of land containing approximately 11 acres (the Land). In connection with its use of the Premises, Tenant shall have the right to use for its employees twenty five (25) undesignated and two designated parking spaces in the parking area adjacent to the Building and such other undesignated parking spaces as may be reasonably required for the conduct of its business.
All other references to the area of the Premises in the Lease are hereby amended to mean the square footage figures as stated hereinabove.
2. Effective February 1, 1998, Paragraph 3(a) of the Lease shall be amended to read as follows:
(b) During the remainder of the third year of the term of this Lease, Tenant shall pay Landlord equal monthly installments of Five Thousand Seven Hundred Twenty Five Dollars and Eight Cents ($5,725.08). Such rent is calculated on the basis of $11.50 per square foot of the rentable floor area of the Premises, which is calculated at 5,974 rentable square feet. Each lease year thereafter during the term of this Lease, the annual minimum rent shall be increased by three percent (3%) over the prior years annual minimum rent.
3. Effective February 1, 1998, Paragraph 4(c) of the Lease shall be amended to read as follows:
The portion of Expenses which are applicable to the Premises (the Premises Expenses) shall be determined by multiplying the Expenses by a fraction, the numerator of which is the rentable floor area of the Premises (presently assumed to be 5,974 rentable square feet), and the denominator of which is the aggregate number of rentable floor area in the Building (presently assumed to be 21,100 square feet), except that Tenant specific Expenses, including janitorial services, shall be allocated directly to each tenant in the building.
4. Effective February 1, 1998, Paragraph 4(d) of the Lease shall be amended to read as follows:
Tenant agrees to pay Landlord as additional rent hereunder all Premises Expenses incurred during the term of this Lease. Tenant shall pay $4.00 per square foot of rentable floor area for Premises Expenses. This amount shall be paid in equal monthly installments of One Thousand Nine Hundred Ninety One Dollars and Thirty Three Cents ($1,991.33) each. After the first year of the term of this Lease Tenant shall pay actual Premises Expenses as defined above in 4(a), 4(b) and 4(c).
5. Except as hereby amended, the Lease is hereby ratified and confirmed.
6. This THIRD Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, Landlord and Tenant have caused this THIRD Amendment to be duly executed by their authorized officers the day and year first above written.
|
WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, a Pennsylvania limited partnership by its General Partner: |
|
|
|
WYOMISSING PROFESSIONAL CENTER III, INC. |
|
By: |
/s/ Stephen J. Najarian |
|
|
Vice President |
|
|
|
|
Attest: |
|
|
|
Secretary |
|
|
|
|
|
Landlord |
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| |
|
PENN NATIONAL GAMING, INC. | |
|
|
|
|
By: |
/s/ William J. Bork |
|
|
President |
|
|
|
|
Attest: |
/s/ Robert S. Ippolito |
|
|
Secretary |
|
|
|
|
|
Tenant |
LEASE AMENDMENT
THIS LEASE AMENDMENT (the Amendment) made this 16th day of November, 1999, between Penn National Gaming, hereinafter, called Tenant, having its principal place of business at 825 Berkshire Blvd., Suite 200 and Wyomissing Professional Center III, LIMITED PARTNERSHIP hereinafter called Landlord, having its principal place of business at 825 Berkshire Blvd. Suite 203 Wyomissing, Pennsylvania 19610.
WITNESETH:
The Tenant and the Landlord have executed a Lease Agreement which includes Exhibits A, B, and C, relating to the Leased Premises located at 825 Berkshire Blvd., Suite 200, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in
consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease except to the extent to which the provisions of this Amendment modify the provisions of the Lease. The provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. Leased premises is changed from 5,974 square feet rentable and 5,334 square feet of usable floor area to 6,674 square feet of rentable and 5,959 square feet of usable floor area.
5. Fixed Annual Minimum Rent: As per attached Exhibit A.
6. Effective Date. The effective date for Tenants increased space and rental payments shall be September 16, 1999.
7. Term of Lease. Term of Lease is unchanged; ten (10) years starting April 1, 1995 and ending March 31, 2005.
8. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of, Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 16th day of November, 1999.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
|
LANDLORD: |
|
|
|
WYOMISSING PROFESSIONAL CENTER III, LIMITED PARTNERSHIP, by its General Partner, Wyomissing Professional Center III, Inc. |
|
By: |
/s/ Stephen J. Najarian |
|
|
Name: Stephen J. Najarian |
|
|
Title: President |
|
| |
|
Date: |
|
TENANT: |
ATTEST: | |||
|
| |||
By: |
|
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By: |
|
Name: |
|
|
Name: |
|
Title: |
|
|
Title: |
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Date: |
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Date: |
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FIFTH LEASE AMENDMENT
THIS LEASE AMENDMENT (the Amendment) made this 21 day of August, 2000, between Penn National Gaming, hereinafter, called Tenant, having its principal place of business at 825 Berkshire Blvd., Suite 200 and Wyomissing Professional Center III LIMITED PARTNERSHIP hereinafter called Landlord, having its principal place of business at 825 Berkshire Blvd. Suite 203 Wyomissing, Pennsylvania 19610.
WITNESETH:
The Tenant and the Landlord have executed a Lease Agreement which includes Exhibits A, B, and C, relating to the Leased Premises located at 825 Berkshire Blvd., Suite 200, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease except to the extent to which the provisions of this Amendment modify the provisions of the Lease. The provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. Leased premises is changed from 6,674 square feet rentable and 5,959 square feet of usable floor area to 8,245 square feet of rentable and 7,362 square feet of usable floor area.
5. Fixed Annual Minimum Rent: As per attached Exhibit A.
6. Effective Date. The effective date for Tenants increased space and rental payments shall be June 15, 2000.
7. Term of Lease. Term of Lease is unchanged; ten (10) years starting April 1, 1995 and ending March 31, 2005.
8. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of, Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 21 day of August, 2000.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE, BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
|
LANDLORD: |
|
|
|
WYOMISSING PROFESSIONAL CENTER III LIMITED PARTNERSHIP, by its General Partner, Wyomissing Professional Center III Inc. |
|
By: |
/s/ Stephen J. Najarian |
|
|
Name: Stephen J. Najarian |
|
|
Title: President |
|
|
|
|
Date: |
8/21/00 |
TENANT: |
ATTEST: | |||
|
| |||
By: |
/s/ Robert S. Ippolito |
|
By: |
/s/ Susan M. Montgomery |
Name: |
Robert S. Ippolito |
|
Name: |
Susan M. Montgomery |
Title: |
Sec/Treas |
|
Title: |
Office Manager |
Date: |
8/21/00 |
|
Date: |
8-21-00 |
PENN NATIONAL GAMING
Exhibit A, Rent analysis
Period Effective Date |
|
SF |
|
Rate/SF |
|
Mo. Rent |
|
Annual Rent |
|
Amt. Owed |
| ||||
April 1, 1995 |
|
2,120 |
|
$ |
11.00 |
|
$ |
1,943.33 |
|
$ |
23,320.00 |
|
$ |
23,320.00 |
|
April 1, 1996 |
|
2,120 |
|
$ |
11.33 |
|
$ |
2,001.63 |
|
$ |
24,019.60 |
|
$ |
12,042.70 |
|
October 1, 1996 |
|
2,644 |
|
$ |
11.33 |
|
$ |
2,496.38 |
|
$ |
29,956.52 |
|
$ |
14,937.22 |
|
April 1, 1997 |
|
2,644 |
|
$ |
11.67 |
|
$ |
2,571.27 |
|
$ |
30,855.22 |
|
$ |
15,469.88 |
|
October 1, 1997 |
|
6,183 |
|
$ |
11.50 |
|
$ |
5,925.38 |
|
$ |
71,104.50 |
|
$ |
23,961.24 |
|
February 1, 1998 |
|
5,974 |
|
$ |
11.50 |
|
$ |
5,725.08 |
|
$ |
68,701.00 |
|
$ |
11,105.09 |
|
April 1, 1998 |
|
5,974 |
|
$ |
11.85 |
|
$ |
5,896.84 |
|
$ |
70,762.03 |
|
$ |
70,762.03 |
|
April 1, 1999 |
|
5,974 |
|
$ |
12.20 |
|
$ |
6,073.74 |
|
$ |
72,884.89 |
|
$ |
33,547.02 |
|
September 16, 1999 |
|
6,674 |
|
$ |
12.20 |
|
$ |
6,785.43 |
|
$ |
81,425.14 |
|
$ |
44,170.35 |
|
April 1, 2000 |
|
6,674 |
|
$ |
12.57 |
|
$ |
6,988.99 |
|
$ |
83,867.89 |
|
$ |
17,233.13 |
|
June 15, 2000 |
|
8,245 |
|
$ |
12.57 |
|
$ |
8,634.14 |
|
$ |
103,609.64 |
|
$ |
82,319.99 |
|
April 1, 2001 |
|
8,245 |
|
$ |
12.94 |
|
$ |
8,893.16 |
|
$ |
106,717.93 |
|
$ |
106,717.93 |
|
April 1, 2002 |
|
8,245 |
|
$ |
13.33 |
|
$ |
9,159.96 |
|
$ |
109,919.47 |
|
$ |
109,919.47 |
|
April 1, 2003 |
|
8,245 |
|
$ |
13.73 |
|
$ |
9,434.75 |
|
$ |
113,217.05 |
|
$ |
113,217.05 |
|
April 1, 2004 |
|
8,245 |
|
$ |
14.14 |
|
$ |
9,717.80 |
|
$ |
116,613.57 |
|
$ |
116,613.57 |
|
ANNUAL AMOUNTS
Lease year 1, 4/95-3/96 |
|
$ |
23,320.00 |
|
Calendar Yr 1995 |
|
$ |
17,490.00 |
|
Lease year 2, 4/96-3/97 |
|
$ |
26,979.93 |
|
Calendar Yr 1996 |
|
$ |
25,328.93 |
|
Lease year 3, 4/97-3/98 |
|
$ |
50,536.21 |
|
Calendar Yr 1997 |
|
$ |
40,692.86 |
|
Lease year 4, 4/98-3/99 |
|
$ |
70,762.03 |
|
Calendar Yr 1998 |
|
$ |
70,447.06 |
|
Lease year 5, 4/99-3/00 |
|
$ |
77,717.37 |
|
Calendar Yr 1999 |
|
$ |
74,845.08 |
|
Lease year 6, 4/00-3/01 |
|
$ |
99,553.12 |
|
Calendar Yr 2000 |
|
$ |
93,950.65 |
|
Lease Year 7, 4/01-3/02 |
|
$ |
106,717.93 |
|
Calendar Yr 2001 |
|
$ |
105,940.86 |
|
Lease Year 8, 4/02-3/03 |
|
$ |
109,919.47 |
|
Calendar Yr 2002 |
|
$ |
109,119.09 |
|
Lease Year 9, 4/03-3/04 |
|
$ |
113,217.05 |
|
Calendar Yr 2003 |
|
$ |
112,392.66 |
|
Lease Year 10, 4/04-3/05 |
|
$ |
116,613.57 |
|
Calendar Yr 2004 |
|
$ |
115,764.44 |
|
|
|
|
|
Calendar Yr 2005 |
|
$ |
29,153.39 |
|
AMENDMENT AND RESTATED LEASE AGREEMENT
THIS LEASE AMENDMENT (the Amendment) made this 5th day of April, 2005, between Penn National Gaming, Inc., a Pennsylvania corporation, hereinafter called Tenant, having its principal place of business at 825 Berkshire Blvd., Suite 200 and Wyomissing Professional Center III, Limited Partnership, a Pennsylvania limited partnership, hereinafter called Landlord, having its principal place of business at 825 Berkshire Blvd. Suite 203 Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement which includes Exhibits A and B, and Lease Amendments, relating to Leased Premises located at 825 Berkshire Blvd., Suite 200, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease except to the extent to which the provisions of this Amendment modify the provisions of the Lease. The provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. The amended Leased Premises shall be restated to be 10,145 square feet of rentable and 9,058 square feet of usable floor area.
5. Fixed Annual Minimum Rent: The Annual Minimum Rent for the Extension Period, as defined in Section 7 below, shall be as shown on attached Schedule A6-1.
6. Effective Date. The effective date for Tenants increased space and rental payments shall be April 1, 2005.
7. Term of Lease. The Lease shall be extended for an additional period of seven (7) years beginning on April 1, 2005 and ending on March 31, 2012 (the Extension Period).
8. Construction of Improvements and Reimbursement of Costs Incurred. Tenant shall contract with Landlords contractor for the construction of improvements to the Leased Premises. All such work shall be bid and performed by Landlords contractor on an open book basis and billed at the rate of the subcontractors or suppliers cost plus a total of 15% for construction management fee, overhead, and builders profit
and be subject to the approval of a budget prior to the commencement of any work. In the first draw request submitted for the improvements, Tenant shall reimburse Landlord the amount of $123,563.69 for third-party architectural, engineering and related costs previously incurred in designing alternate space in a to-be-built adjacent attached building previously considered by Tenant.
9. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 5th day of April, 2005.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
|
LANDLORD: |
|
|
|
Wyomissing Professional Center III, Limited Partnership, a Pennsylvania limited partnership, by its General Partner, Wyomissing Professional Center II, Inc. |
|
By: |
/s/ Stephen J. Najarian |
|
Stephen J. Najarian, President |
|
TENANT: | |||
|
| |||
|
Penn National Gaming, Inc., a Pennsylvania corporation | |||
WITNESS: |
| |||
|
| |||
By: |
/s/ Susan M. Montgomery |
|
By: |
/s/ Robert S. Ippolito |
Name: |
Susan M. Montgomery |
|
Name: |
Robert S. Ippolito |
|
Title: |
VP/Sec/Treas |
SCHEDULE A6-1
ANNUAL MINIMUM RENT EXTENSION PERIOD
Square Feet (SF): |
|
10,145 |
| |
Minimum Rent per SF Yr 1: |
|
$ |
13.50 |
|
Annual Escalation: |
|
3.0 |
% | |
Period |
|
Lease |
|
Rentable |
|
Minimum |
|
Monthly |
|
Annual Rent |
| |||
4/1/05-3/31/06 |
|
11 |
|
10,145 |
|
$ |
13.50 |
|
$ |
11,413.13 |
|
$ |
136,957.50 |
|
4/1/06-3/31/07 |
|
12 |
|
10,145 |
|
$ |
13.91 |
|
$ |
11,755.52 |
|
$ |
141,066.23 |
|
4/1/07-3/31/08 |
|
13 |
|
10,145 |
|
$ |
14.32 |
|
$ |
12,108.18 |
|
$ |
145,298.21 |
|
4/1/08-3/31/09 |
|
14 |
|
10,145 |
|
$ |
14.75 |
|
$ |
12,471.43 |
|
$ |
149,657.16 |
|
4/1/09-3/31/10 |
|
15 |
|
10,145 |
|
$ |
15.19 |
|
$ |
12,845.57 |
|
$ |
154,146.87 |
|
4/1/10-3/31/11 |
|
16 |
|
10,145 |
|
$ |
15.65 |
|
$ |
13,230.94 |
|
$ |
158,771.28 |
|
4/1/11-3/31/12 |
|
17 |
|
10,145 |
|
$ |
16.12 |
|
$ |
13,627.87 |
|
$ |
163,534.42 |
|
AMENDMENT AND RESTATED LEASE AGREEMENT
THIS LEASE AMENDMENT (the Amendment) made this 20 day of November, 2007, between Penn National Gaming, Inc., a Pennsylvania corporation, hereinafter called Tenant, having its principal place of business at 825 Berkshire Boulevard, Suite 200, Wyomissing, PA 19610 and Wyomissing Professional Center III, Limited Partnership, a Pennsylvania limited partnership, hereinafter called Landlord, having its principal place of business at 875 Berkshire Boulevard, Suite 102, Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement dated March 31, 1995, which includes Exhibits A and B, and an Amendment and Restated Lease Agreement dated April 5, 2005 (collectively, the Lease), relating to Leased Premises located at 825 Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease. Except to the extent to which the provisions of this Amendment modify the provisions of the Lease, the provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. Beginning on the Effective Date as defined in Section 6. below, the Leased Premises shall be increased from 10,145 square feet of rentable and 9,058 square feet of usable floor area to 20,527 square feet of rentable and 18,328 square feet of usable floor area by the addition of 10,382 square feet of rentable and 9,270 square feet of usable floor area located on the first floor of the Building (the First Floor Area) as described on Exhibit Al attached hereto.
5. Fixed Annual Minimum Rent: Beginning on the Effective Date as defined in Section 6. below, the Annual Minimum Rent for the Leased Premises, as defined in Section 4 above, shall be as shown on attached Schedule A5-1.
6. Effective Date. The effective date for Tenants increased space and rental payments shall be May 1, 2007 (the Effective Date).
7. Term of Lease. The Term of the Lease shall include the increased Leased Premises under the terms of the Amended and Restated Lease Agreement dated April 5, 2005 that provide for a lease term ended March 31, 2012.
8. Construction of Improvements. Tenant shall contract with Landlords contractor for the demolition of existing improvements and construction of improvements to the First Floor Area per Tenants approved plans and specifications. All such work shall be bid and performed by Landlords contractor on an open book basis and billed at the rate of the subcontractors or suppliers cost plus a total of 15% for construction management fee, overhead, and builders profit and be subject to the approval of a budget prior to the commencement of any work. The terms shall be included in an AIA101 construction agreement between the parties.
9. Binding Effect. This Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 20th day of November 2007.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
|
|
LANDLORD: | |||
|
|
| |||
|
|
Wyomissing Professional Center III, Limited Partnership, a Pennsylvania limited partnership, by its General Partner, Wyomissing Professional Center III, Inc. | |||
|
|
| |||
|
|
By: |
/s/ Peter W. Carlino | ||
|
|
|
Peter W. Carlino, Vice President | ||
|
|
| |||
|
|
TENANT: | |||
|
|
Penn National Gaming, Inc., a Pennsylvania corporation | |||
WITNESS: |
|
| |||
|
|
| |||
By: |
/s/ Susan M. Montgomery |
|
By: |
/s/ Robert S. Ippolito | |
Name: |
Susan M. Montgomery |
|
Name: |
Robert S. Ippolito | |
|
|
Title: |
VP/Sec/Treas | ||
SCHEDULE A5-1
ANNUAL MINIMUM RENT
Rentable Square Feet (RSF), 1st Floor |
|
10,145 |
| |
Rentable Square Feet (RSF), 2nd Floor |
|
10,382 |
| |
Total Rentable Square Feet (RSF) |
|
20,527 |
| |
Minimum Rent per RSF (at 5/01/07) |
|
$ |
14.32 |
|
Annual Escalation |
|
3.0 |
% | |
Period |
|
Lease |
|
RSF |
|
Minimum Rent |
|
Monthly |
|
Annual |
| |||
5/1/07 to 3/31/08 |
|
13 |
(a) |
20,527 |
|
$ |
14.32 |
|
$ |
24,495.55 |
|
$ |
245,238.33 |
|
4/1/08 to 3/31/09 |
|
14 |
|
20,527 |
|
$ |
14.75 |
|
$ |
25,230.42 |
|
$ |
302,765.04 |
|
4/1/09 to 3/31/10 |
|
15 |
|
20,527 |
|
$ |
15.19 |
|
$ |
25,987.33 |
|
$ |
311,847.99 |
|
4/1/10 to 3/31/11 |
|
16 |
|
20,527 |
|
$ |
15.65 |
|
$ |
26,766.95 |
|
$ |
321,203.43 |
|
4/1/11 to 3/31/12 |
|
17 |
|
20,527 |
|
$ |
16.12 |
|
$ |
27,569.96 |
|
$ |
330,839.53 |
|
(a) The Lease provides that no rent or operating expense reimbursement is due on the increased space of 10,382 square feet for the months of May and June 2007. The monthly minimum rent for May and June 2007, respectively, is $12,389.19.
(b) Shown at two decimal places. Actual rent calculated at extended decimal places
THIRD AMENDMENT AND RESTATED LEASE AGREEMENT
THIS LEASE AMENDMENT (the Amendment) made this 25th day of May, 2012, between Penn National Gaming, Inc., a Pennsylvania corporation, hereinafter called Tenant, having its principal place of business at 825 Berkshire Boulevard, Wyomissing, PA 19610 and Wyomissing Professional Center III, Limited Partnership (825), a Pennsylvania limited partnership, hereinafter called Landlord, having its principal place of business at 875 Berkshire Boulevard, Suite 102, Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement (the original Lease) dated March 31, 1995, which includes Exhibits A and B, an Amendment and Restated Lease Agreement (the First Amendment) dated April 5, 2005, and an Amendment and Restated Lease Agreement (the Second Amendment) dated November 20, 2007 (collectively, the Lease), relating to Leased Premises located at 825 Berkshire Boulevard, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease. Except to the extent to which the provisions of this Amendment modify the provisions of the Lease, the provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Fixed Annual Minimum Rent. The Annual Minimum Rent for the Second Extension Period, as defined in Section 5. below, shall be as shown on the table below.
Space (RSF): |
|
20,527 | |
Minimum Rent/RSF: |
|
$ |
16.00 |
Annual Escalation: |
|
2.5% |
Second |
|
|
|
ANNUAL |
| |||||||
Period |
|
RSF |
|
per |
|
Annual |
|
Monthly |
| |||
6/1/12 - 5/31/13 |
|
20,527 |
|
$ |
16.00 |
|
$ |
328,432.00 |
|
$ |
27,369.33 |
|
6/1/13 - 5/31/14 |
|
20,527 |
|
$ |
16.40 |
|
$ |
336,642.80 |
|
$ |
28,053.57 |
|
6/1/14 - 5/31/15 |
|
20,527 |
|
$ |
16.81 |
|
$ |
345,058.87 |
|
$ |
28,754.91 |
|
6/1/15 - 5/31/16 |
|
20,527 |
|
$ |
17.23 |
|
$ |
353,680.21 |
|
$ |
29,473.35 |
|
6/1/16 - 5/31/17 |
|
20,527 |
|
$ |
17.66 |
|
$ |
362,506.82 |
|
$ |
30,208.90 |
|
6/1/17 - 5/31/18 |
|
20,527 |
|
$ |
18.10 |
|
$ |
371,538.70 |
|
$ |
30,961.56 |
|
|
|
|
|
|
|
|
|
|
| |||
6/1/18 - 5/31/19 |
|
20,527 |
|
$ |
18.55 |
|
$ |
380,775.85 |
|
$ |
31,731.32 |
|
5. Term of Lease. The Term of the Lease shall be extended for an additional period of seven (7) years beginning on June 1, 2012 and ending on May 31, 2019 (the Second Extension Period).
6. Binding Effect. This Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 25th day of May, 2012.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
|
| ||||
|
LANDLORD: | ||||
|
Wyomissing Professional Center III, Limited Partnership, a Pennsylvania limited partnership, by its General Partner, Wyomissing Professional Center III, Inc. | ||||
|
| ||||
|
By: |
/s/ Peter W. Carlino | |||
|
|
Peter W. Carlino, President | |||
|
| ||||
|
TENANT: | ||||
|
Penn National Gaming, Inc., a Pennsylvania corporation | ||||
WITNESS: |
| ||||
|
| ||||
By: |
/s/ Susan M. Montgomery |
|
By: |
/s/ Robert S. Ippolito | |
Name: |
Susan M. Montgomery |
|
Name: |
Robert S. Ippolito | |
|
Title: |
VP/Sec/Treas | |||
Exhibit 10.11
THE CORPORATE CAMPUS AT SPRING RIDGE
SUMMARY OF LEASE TERMS
The terms of this Lease (the Lease) set forth on these summary pages (the Summary) are for convenience and are subject to further explanation in the Lease. All terms defined on these summary pages are incorporated by reference into the Lease as if set forth in their entirety therein.
|
Reference |
|
|
1. Landlords Name and Address: |
¶38 |
|
|
Wyomissing Professional Center II, |
|
Limited Partnership |
|
(the Landlord) |
|
825 Berkshire Boulevard |
|
Suite 203 |
|
Wyomissing, Pennsylvania 19610 |
|
Attention: Mr. Stephen J. Najarian |
|
|
|
2. Tenants Name and Address: |
¶38 |
|
|
Penn National Gaming, Inc. |
|
(the Tenant) |
|
825 Berkshire Boulevard, Suite 200 |
|
Wyomissing, Pennsylvania 19610 |
|
|
|
3. Leased Premises: |
¶1 |
|
|
The area shown on Exhibit A attached hereto and made a part hereof (the Premises), containing approximately 4,388 square feet of rentable floor area, situate on the ground floor of a building (the Building) constructed on the land. The building contains approximately 20,325 square feet of rentable floor area. Determination of actual rentable areas will be made subsequent to completion of design of Tenant interior layout, and the space will be measured in accordance with BOMA standards. |
|
4. Building Location: |
¶1 |
|
|
The Building will be located on a tract of land (the Land) consisting of approximately 15 acres, located on the North side of Berkshire Boulevard, and the East side of Paper Mill Road in the Borough of Wyomissing, Berks County, Pennsylvania. |
|
|
|
5. Building Common Area: |
¶4(c) |
|
|
The area shown on Exhibit F attached hereto and made a part hereof (the Building Common Area). |
|
|
|
6. Parking Spaces: |
¶1 |
|
|
In connection with its use of the Premises, Tenant shall have the right to use 18 undesignated parking spaces (collectively, the Parking Spaces) in the parking area adjacent to the Building. |
|
|
|
7. Date of Lease: |
¶2 |
|
|
January 25, 2002 |
|
|
|
8. Commencement Date: |
¶2 |
|
|
The term of this Lease shall commence on the first to occur of (a) the date on which Tenant takes occupancy of or commences business at the Premises, or (b) the date of substantial completion, being the date when a certificate of occupancy for the Premises is issued by the applicable municipal authority (whichever date occurs first, the Commencement Date).The anticipated Commencement Date is March 30, 2002. |
|
|
|
9. Term: |
|
|
¶2 |
Ten (10) years from the first day of the first full month of occupancy after the Commencement Date (the Term). Tenant shall have the ability, with six (6) months prior notice, to cancel the lease on the five (5) year anniversary date without penalty. |
|
Tenant shall have the option to extend this lease for one period of five (5) years with rent escalating at 2% annually above the prior years rent. |
|
|
|
10. |
¶3 |
|
|
Fixed Annual Minimum Rent: |
|
Starting rent based on $13.00 per rentable square foot. Rent to be pro rated during any partial months. 2% annual increase over prior years Annual Minimum Rent. |
|
Premises Size |
|
4,388 |
| |
Starting Rate per SF |
|
$ |
13.00 |
|
Annual escalation |
|
2.0 |
% | |
Time |
|
Rentable |
|
Annual Rent per |
|
Monthly Rent |
|
Annual Rent (the Annual |
| |||
Year 1 |
|
4,388 |
|
$ |
13.00 |
|
$ |
4,753.67 |
|
$ |
57,044.00 |
|
Year 2 |
|
4,388 |
|
$ |
13.26 |
|
$ |
4,848.74 |
|
$ |
58,184.88 |
|
Year 3 |
|
4,388 |
|
$ |
13.53 |
|
$ |
4,945.71 |
|
$ |
59,348.58 |
|
Year 4 |
|
4,388 |
|
$ |
13.80 |
|
$ |
5,044.63 |
|
$ |
60,535.55 |
|
Year 5 |
|
4,388 |
|
$ |
14.07 |
|
$ |
5,145.52 |
|
$ |
61,746.26 |
|
Year 6 |
|
4,388 |
|
$ |
14.35 |
|
$ |
5,248.43 |
|
$ |
62,981.19 |
|
Year 7 |
|
4,388 |
|
$ |
14.64 |
|
$ |
5,353.40 |
|
$ |
64,240.81 |
|
Year 8 |
|
4,388 |
|
$ |
14.93 |
|
$ |
5,460.47 |
|
$ |
65,525.63 |
|
Year 9 |
|
4,388 |
|
$ |
15.23 |
|
$ |
5,569.68 |
|
$ |
66,836.14 |
|
Year 10 |
|
4,388 |
|
$ |
15.54 |
|
$ |
5,681.07 |
|
$ |
68,172.86 |
|
11. Tenants Share of Expenses (Premises Expenses): |
¶4(c) |
|
|
Tenant to pay full pro-rata share of all operating expenses. First year budget based on $3.25 per SF of rentable floor area not including janitorial expenses. |
Exhibit B |
Time Period |
|
Rentable Sq. Ft. |
|
Premises Expenses/ |
|
Premises Expenses/ |
| ||
Year 1 |
|
4,388 |
|
$ |
3.25 |
|
$ |
14,261.00 |
|
12. Building Standard Work Allowance: |
¶10 |
|
|
$0.00 per square foot of usable floor area of the Premises (the Building Standard Work Allowance). The entire cost for the Fit Out to be borne by the Tenant. |
|
|
|
13. Security Deposit: |
¶5 |
|
|
Waived |
|
|
|
14. Use of Premises: |
¶6 |
|
|
General office uses (the Permitted Use). |
|
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Summary of Lease Terms to be duly executed this 30 day January 2002.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LESSOR.
|
WYOMISSING PROFESSIONAL CENTER II, LIMITED PARTNERSHIP, a Pennsylvania limited partnership, by its General Partner, WYOMISSING PROFESSIONAL CENTER II, INC. | |
|
| |
|
|
|
|
By |
/s/ Stephen J. Najarian |
|
|
Stephen J. Najarian, President |
|
| |
|
(Landlord)
|
|
|
| ||
ATTEST: |
|
| ||
|
|
|
| |
By: |
/s/ Susan M. Montgomery |
|
By: |
/s/ Robert S. Ippolito |
|
|
|
|
|
Name: |
Susan M. Montgomery |
|
Name: |
Robert S. Ippolito |
|
|
|
|
|
Title: |
Asst. to Chairman |
|
Title: |
Vice President/Sec/Treas |
|
|
|
| |
|
|
Date: |
1/30/02 | |
|
|
|
| |
|
|
(Tenant) |
TABLE OF CONTENTS
|
Page |
|
|
1. PREMISES |
1 |
|
|
2. TERM |
1 |
|
|
3. RENT |
2 |
|
|
4. TENANTS SHARE OF EXPENSES |
3 |
|
|
5. SECURITY DEPOSIT |
5 |
|
|
6. USE |
5 |
|
|
7. SERVICES AND FACILITIES |
5 |
|
|
8. UTILITIES |
6 |
|
|
9. CONSTRUCTION OF BUILDING |
6 |
|
|
10. BUILDING STANDARD WORK ALLOWANCE |
6 |
|
|
11. SIGNS |
7 |
|
|
12. AFFIRMATIVE COVENANTS OF TENANT |
7 |
|
|
13. NEGATIVE COVENANTS OF TENANT |
7 |
|
|
14. NO MECHANICS LIENS |
8 |
|
|
15. LANDLORDS RIGHT TO ENTER |
9 |
|
|
16. RELEASE OF LANDLORD |
9 |
|
|
17. ASSIGNMENT AND SUBLETTING |
10 |
18. ENVIRONMENTAL COMPLIANCE |
11 |
|
|
19. INDEMNIFICATION |
11 |
|
|
20. LIABILITY INSURANCE |
11 |
|
|
21. FIRE OR OTHER CASUALTY |
12 |
|
|
22. WAIVER OF SUBROGATION |
12 |
|
|
23. NO IMPLIED EVICTION |
12 |
|
|
24. CONDEMNATION |
12 |
|
|
25. LANDLORDS RIGHT TO PAY TENANT EXPENSES |
13 |
|
|
26. EVENTS OF DEFAULT |
13 |
|
|
27. LANDLORDS REMEDIES |
14 |
|
|
28. CONFESSION OF JUDGMENT FOR DAMAGES |
16 |
|
|
29. CONFESSION OF JUDGMENT IN EJECTMENT |
17 |
|
|
30. RIGHT OF ASSIGNEE OF LANDLORD |
18 |
|
|
31. REMEDIES CUMULATIVE |
18 |
|
|
32. TENANTS WAIVERS |
18 |
|
|
33. ATTORNMENT |
18 |
|
|
34. SUBORDINATION |
18 |
|
|
35. EXECUTION OF DOCUMENTS |
19 |
|
|
36. ESTOPPEL AGREEMENTS |
19 |
37. CONDOMINIUM CONVERSION |
19 |
|
|
38. NOTICES |
19 |
|
|
39. BINDING EFFECT |
20 |
|
|
40. SURVIVAL OF VALID TERMS |
20 |
|
|
41. ENTIRE AGREEMENT |
20 |
|
|
42. PROHIBITION AGAINST RECORDING |
20 |
|
|
43. INTERPRETATION |
20 |
|
|
44. LIABILITY OF LANDLORD |
20 |
|
|
45. CAPTIONS AND HEADINGS |
20 |
|
|
46. NO BROKERAGE COMMISSION |
20 |
|
|
47. QUIET ENJOYMENT |
21 |
|
|
48. WAIVER OF TRIAL BY JURY |
21 |
|
|
49. OWNERS ASSOCIATION |
22 |
LEASE AGREEMENT
IN CONSIDERATION of the mutual promises contained herein, and intending to be legally bound hereby, Landlord and Tenant, in addition to the foregoing Summary, agree as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises. In connection with its use of the Premises, Tenant shall have the right to use the Parking Spaces.
2. TERM.
(a) The Term of this Lease shall commence on the Commencement Date, unless construction is delayed as provided in Paragraph 9(b).
(b) Within thirty (30) days after the Commencement Date, Landlord and Tenant shall execute a letter agreement specifying the Commencement Date. Failure to execute such letter agreement shall in no way cause this Lease not to remain in full force and effect.
(c) Tenant shall have the right to renew this lease for one (1) five (5) year renewal period under the same terms and conditions of the base lease with the exception that the starting rent for the period shall be 2% higher than the previous years rent. Six (6) months written notice will be required to exercise such options by Tenant.
(d) Tenant shall surrender and deliver up the Premises at the end of the Term of this Lease in good order and condition as of the date of execution hereof, reasonable use and natural wear and tear excepted. If Tenant fails to surrender the Premises to Landlord on the date as required herein, Tenant shall hold Landlord harmless from all damages, direct and indirect, resulting from Tenants failure to surrender the Premises as herein provided, including but not limited to claims made by a succeeding tenant resulting from Landlords inability to deliver the Premises, or any part thereof, due to Tenants failure to surrender the Premises.
(i) Should the Tenant, without the express written consent of the Landlord, continue to hold and occupy the Premises after the expiration of the Term of this Lease, such holding over shall be considered a tenancy at sufferance, and not for any other term whatsoever, which may be terminated by the Landlord at the will of the Landlord by giving Tenant written notice thereof, and at any time thereafter the Landlord may re-enter and take possession of the Premises, by force or otherwise. Rent during any such holding over shall be charged and paid by Tenant at the rate of 150% of the monthly rent reserved herein as the monthly rental due for that month immediately preceding the holding over.
(e) Definition of Lease Year: A lease year, as herein referred to, shall consist of that full twelve (12) month period commencing on the first day of the first full month during which this Lease is in full force and effect and of each full twelve (12) month period thereafter. If the Commencement Date of this Lease, as provided aforesaid, is a day not the first day of the month, the first lease year shall consist of the remainder of that first month and the first full twelve (12) months thereafter.
3. RENT.
(a) During the term of this Lease, Tenant shall pay Landlord the Annual Minimum Rent in equal monthly installments. To the extent that the actual rentable floor area of the Premises is different from the area shown on the Summary, as certified by Landlords architect, the Annual Minimum Rent shall be adjusted accordingly.
(b) All rent shall be payable in advance, without demand, on the first day of each calendar month during the term of this Lease, except the first monthly installment shall be paid upon the signing of this Lease. The first and last monthly payments shall be prorated on a per diem basis for any period less than a full calendar month.
(c) All rent and additional rent shall be payable without any deduction, offset or counterclaim. All rent and additional rent due hereunder shall be payable in immediately available funds at Landlords address set forth in the Summary or at such other place as may be designated by Landlord.
(d) Tenant shall also pay as rent any sums which may become due by reason of the failure of Tenant to comply with any covenants of this Lease and any damages, costs, expenses and reasonable attorneys fees which Landlord may incur by reason of any failure on Tenants part to comply with any covenants of this Lease.
(e) Tenant shall pay a late charge at the rate of five percent (5%) on each dollar of rent, or any other sum collectible as rent under this Lease, which is not paid within ten (10) days after the same is due.
(f) This Lease shall be deemed and construed to be a net-net-net lease, so that the Annual Minimum Rent provided for herein shall be an absolute net return to Landlord throughout the term of this Lease, free of any expense, charge or other deduction whatsoever, with respect to the Premises and/or the ownership, leasing, operation, maintenance, repair, rebuilding, use or occupation thereof, or of any portion thereof, or with respect to any interest of Landlord therein, except as may be expressly provided for otherwise herein.
4. TENANTS SHARE OF EXPENSES.
(a) In addition to the payment of Annual Minimum Rent as provided herein, Tenant shall pay as additional rent hereunder its proportionate share (as described in Paragraph 4(c)) of all Expenses (as hereinafter defined) incurred during each calendar year of the term of this Lease, as provided herein. For purposes hereof, Expenses shall mean all real estate taxes, real estate assessments, insurance premiums (other than Tenants liability insurance), and other costs and expenses of every type and character incurred by Landlord in operating and maintaining the Building and the Land (or portion of the Land relating to the Building), including without limitation, the common areas thereof, all fixtures and equipment therein or thereon, water and sewer charges as metered, repair and maintenance of fixtures, equipment and utility systems relating to the Premises, janitorial services (if any) provided to Tenant, trash removal costs pertaining to the Building, grass cutting, landscape maintenance, snow removal and parking area repair, maintenance, repaving, cleaning and striping, costs of lighting the parking area, and all fees, charges and expenses imposed or assessed against the Building and its owner(s) by any applicable owners association. Expenses shall be pre-paid on a monthly basis during each calendar year of the term of this Lease as provided herein. Attached hereto as Exhibit B and made a part hereof is the current budget estimate and operating description for the operation of the Building and the Land. All items on the budget shall be included as Expenses, but other Expenses may be incurred from time to time.
(b) For purposes hereof, Expenses shall not include:
(i) Costs for which Landlord is reimbursed or indemnified (either by an insurer, condemnor, tenant, warrantor or otherwise) or, in the event Landlord fails to properly insure the Building, then Expenses shall not include expenses for which Landlord would have been reimbursed if Landlord had adequately insured the Building.
(ii) Expenses incurred in leasing or procuring tenants, including lease commissions, advertising expenses, management and leasing offices, lease negotiation and review, expenses and renovating space for tenants, and legal expenses incurred in enforcing the terms of any tenant leases.
(iii) Interest or amortization payments on any mortgages.
(iv) Costs representing an amount paid to an affiliate of Landlord which is in excess of the amount which would have been paid in the absence of such relationship.
(v) Costs specifically billed to and paid by specific tenants, including, without limitation, expenses for work performed for other tenants in the Building and expenses to be billed to other tenants for excess utility use or other services that are beyond normal office use. There shall be no duplication of costs or reimbursement.
(vi) Depreciation and costs incurred by Landlord for alterations that are considered capital improvements and replacements under generally accepted accounting principles consistently applied, except that the annual amortization of these costs shall be included in the following two instances:
(A) The annual amortization over its useful life (not to be less than ten (10) years) with a reasonable salvage value on a straight line basis of the cost of any improvement made by Landlord and required by any changes in applicable laws, rules, or regulations of any governmental authority enacted after the Building was fully assessed as a completed and occupied unit and the Lease was signed.
(B) The annual amortization over its useful life (not to be less than ten (10) years) with a reasonable salvage value on a straight line basis of the cost of any equipment or capital improvements made by Landlord after the Building was fully assessed as a completed and occupied unit and the Lease was signed, as a labor-saving measure or to accomplish other savings in operating, repairing, managing, or maintaining of the Building or Land, but only to the extent of the savings realized.
(vii) Salaries other than salary for a building manager and/or maintenance personnel or salary reimbursement to the Landlord equal to $0.35 per rentable square foot of floor area annually.
(viii) Landlords personal property and Landlords own occupancy costs, if any, in the Building.
(c) The portion of Expenses which are applicable to the Premises (the Premises Expenses) shall be determined by multiplying the Expenses by a fraction, the numerator of which is the rentable floor area of the Premises as shown on the Summary and the denominator of which is the aggregate number of rentable floor area in the Building as shown on the Summary. In addition, Tenant shall have responsibility for the entire amount of Expenses relating directly to the cost of operating the Premises, which does not include any other portion of the Building Common Area, such as janitorial services or the repair, maintenance, or Tenant required modification of the heating, ventilating or air-conditioning (HVAC) system relating directly to the Premises. Tenant shall be responsible for its proportionate share of the entire amount of janitorial services and maintenance costs relating directly to the Building Common Area, on an occupied area basis.
(d) Tenant agrees to pay Landlord as additional rent hereunder all Premises Expenses incurred during the term of this Lease, including any and all increases in the Premises Expenses.
(e) Tenant shall pay Landlord monthly, in advance, on the first day of each calendar month during the term of this Lease, and pro rata for the fraction of any month, the sum estimated by Landlord to be one-twelfth 1/12th) of Tenants share of all Premises Expenses. If at any time and from time to time it is determined by Landlord that Tenants estimated payments will be insufficient to pay Tenants share of such Premises Expenses, the Landlord shall have the right to adjust the amount of Tenants estimated payments upon thirty (30) days prior written notice, and Tenant agrees to thereafter pay the adjusted estimated payment on a monthly basis.
(f) Within one hundred twenty (120) days after the end of each calendar year, Landlord shall deliver to Tenant (i) a written itemization of Expenses for the prior Lease year and (ii) an estimate of the then current Lease years Expenses and Tenants share of the Premises Expenses. An
adjustment shall be made between the aggregate total of Tenants share of estimated Premises Expenses actually paid by Tenant during the prior Lease year, and Tenants share of Premises Expenses actually incurred during the prior Lease year, so that Landlord shall reimburse Tenant for any excess paid by Tenant, and Tenant shall pay any deficiency to Landlord within ten (10) days of demand. If Tenant disagrees with the accuracy of the Expenses as set forth in Landlords itemization statement, Tenant shall give written notice to Landlord to that effect, but shall nevertheless make payment in accordance with the terms of this Paragraph.
(g) Landlord shall permit Tenant to inspect its records with respect to the Expenses at a mutually convenient time and place. Any information obtained by Tenant pursuant to the provisions of this Paragraph shall be treated as confidential, except in any litigation between the parties.
(h) If due to a change in the laws presently governing taxation, any franchise tax or tax on income, profit, rentals or occupancies from or of the Premises shall be levied or imposed against the Landlord (other than business privilege tax, which is considered an Expense) in lieu of any tax or assessment that would otherwise constitute a real estate tax, such franchise, income, profit tax or tax on rentals shall be deemed to be a real estate tax and included as part of the Expenses.
5. SECURITY DEPOSIT. Waived
6. USE. The Premises shall be used only for the Permitted Use and shall not be used for any other purpose. Tenant will not use, and will not permit the use of, the Premises for any purpose which is unlawful or in violation of any statute, ordinance, rule, regulation or restriction governing the use of the Premises.
7. SERVICES AND FACILITIES. The following services and facilities shall be supplied by Landlord to Tenant in connection with Tenants use of the Premises, in common (where applicable) with other tenants of the Building:
(a) The cost of the services described in this Paragraph are to be included as part of the Premises Expenses, except for electricity and gas, which shall be billed directly to the Tenant from the utility companies.
(b) Landlord shall furnish and maintain HVAC equipment and facilities for the Premises, in accordance with Tenants layout and specifications, for the comfortable occupancy of the Premises. Comfortable occupancy shall mean temperatures of 68°-74°F throughout the Premises on a year-round basis, provided Tenant does not exceed an electrical load of six (6) watts per square foot and an occupancy level of one person for each 150 square feet. HVAC shall be under Tenants control with respect to the hours of operation. Tenant shall pay directly for the electricity and gas it consumes for HVAC.
(c) Landlord shall maintain and repair the HVAC, electrical and plumbing systems servicing the Premises, the ceiling and lighting in the Premises, and the Building, its common areas, exterior, and all of the Building systems in a first class manner. The costs of this maintenance shall be included as part of the Expenses.
(d) Landlord shall provide lamping of all lighting fixtures in the Premises.
(e) Landlord shall have no responsibility or liability to Tenant, nor shall there be any abatement in rent, for any failure to supply any services or facilities as provided herein during such period as Landlord deems advisable or necessary in order to make repairs, alternations or improvements or because of labor disturbances, strikes, accidents or any other causes beyond Landlords control.
(f) Landlord shall be responsible, at Landlords sole cost and expense, for structural repairs and replacement of HVAC units installed in the Building. Except as otherwise provided in Paragraph 7(c) hereof, these repairs shall not be included as part of the Expenses.
8. UTILITIES. Landlord shall install meters for measuring Tenants electric and gas usage and all other utility services to the Premises, and Tenant shall pay the utility company directly for such usage, which shall be in addition to the Expenses as defined herein.
9. CONSTRUCTION OF BUILDING.
(a) Landlord shall construct the Building on the Land in accordance with its plans and specifications for the Building.
(b) If the Landlord is delayed at any time in the progress of constructing the Building by changes requested by Tenant, by labor disputes, unavailability of materials or supplies, fire, war or civil disobedience, unusual delay in transportation, unavoidable casualties, acts of God, or any other cause beyond the Landlords control, the Commencement Date shall be extended for a period of time equal to the period of such delay.
(c) Landlord warrants and represents to Tenant that no part of the Premises or Building (including the walls, ceilings, structural steel, flooring and pipes) shall be wrapped, insulated or fireproofed with any asbestos, asbestos-containing material or other hazardous material.
(d) Landlord agrees to deliver possession of the Premises to Tenant in compliance with all zoning and all other municipal, county, state and federal governmental laws, codes and requirements, including the Americans with Disabilities Act.
10. BUILDING STANDARD WORK ALLOWANCE.
(a) Tenant will be entirely responsible for interior improvements to be made to the Premises. All such improvements shall be made in accordance with Tenants plans and specifications, marked as Exhibits A and E attached hereto and made a part hereof, subject to Landlords review and approval from an engineering standpoint. All such work shall be performed by Landlords contractors and billed at the rate of the subcontractors or suppliers cost plus a total of 15% for construction management fee, overhead, and builders profit.
(b) The cost of the work performed in the Premises interior improvements, Tenant agrees to pay for this entire amount promptly upon billing therefor.
11. SIGNS. Landlord agrees to provide or allow exterior signage as follows: Exterior signage consisting of a building directional sign on the interior campus road frontage, and a building tenant directory at the exterior of the building.
12. AFFIRMATIVE COVENANTS OF TENANT. Tenant covenants and agrees that it will without demand:
(a) Comply with all requirements of any governmental authorities which apply to Tenants use of the Premises. Promptly comply, or cause compliance, with all laws and ordinances and the orders, rules, regulations and requirements of all federal, state, county and municipal governments and appropriate departments, commissions, boards and officers thereof; foreseen or unforeseen, ordinary or extraordinary, and whether or not within the present contemplation of the parties hereto or involving any change of governmental policy and irrespective of the cost thereof, which may be applicable to the Premises, including, without limitation, the fixtures and equipment thereof and the use or manner of use of the Premises.
(b) Comply with the rules and regulations from time to time made by Landlord for the safety, care, upkeep and cleanliness of the Premises, the Building and the Land. Tenant agrees that such rules and regulations shall, when written notice thereof is given to Tenant, form a part of this Lease.
(c) Keep the Premises and Building Common Area in good order and condition, excepting only ordinary wear and tear and damage by accidental fire or other casualty not occurring through the action or negligence of Tenant or its agents, employees and invitees.
(d) Peaceably deliver up and surrender possession of the Premises to Landlord at the expiration or sooner termination of this Lease, in the same condition in which Tenant has agreed to keep the Premises during the term of this Lease, and promptly deliver to Landlord at its office all keys for the Premises.
(e) Give to Landlord prompt written notice of any accident, fire or damage occurring on or to the Premises within twenty-four (24) hours of occurrence thereof
(f) Give to Landlord a copy of any written notice concerning the Premises within twenty-four (24) hours of Tenants receipt thereof
(g) Cause its employees and visitors to park their cars only in those portions of the parking area as may be designated for that purpose by Landlord, and not use or permit the use of any more parking spaces in the parking area than are permitted in Paragraph 1 herein.
(h) Promptly upon Landlords request, deliver to Landlords lender copies of Tenants annual financial statements for the past two (2) years.
13. NEGATIVE COVENANTS OF TENANT. Tenant covenants and agrees that it will do none of the following without the prior written consent of Landlord:
(a) Place or allow to be placed any sign, projection or device upon the Premises or on the inside or outside of the Building contrary to the provisions of this Lease.
(b) Make any alterations, improvements or additions to the Premises. All alterations, improvements, additions or fixtures, whether installed before or after the execution of this Lease, shall remain upon the Premises at the expiration or sooner termination of this Lease and become the property of Landlord, unless Landlord, prior to the termination of this Lease, shall have given written notice to Tenant to remove the same, in which event Tenant shall remove such alterations, improvements and additions or fixtures, and restore the Premises to the same good order and condition in which they were upon initial occupancy.
(c) Do or suffer to be done any act objectionable to any insurance company whereby the insurance or any other insurance now in force or hereafter placed on the Premises or the Building shall become void or suspended, or whereby the same shall be rated as a more hazardous risk than at the date of the signing of this Lease. In case of a breach of this covenant (in addition to all other remedies herein given to Landlord) Tenant agrees to pay Landlord as additional rent any and all increases of premiums on insurance reasonably carried by Landlord on the Premises or the Building caused in any way by the use or occupancy of the Premises by the Tenant.
14. NO MECHANICS LIENS.
(a) Subsequent to the Commencement Date, any construction work performed by or at the direction of Tenant within the Premises shall be performed in a good and workmanlike manner, and in accordance with the requirements of all applicable laws. Tenant, at its sole cost and expense, shall apply for and provide with reasonable diligence all necessary permits and licenses required for any such construction work. Prior to the commencement of any work or delivery of any materials to the Premises, Building or Land, Tenant shall cause each contractor to sign a Waiver of Right to File Mechanics Liens and Mechanics Lien Claims, which shall be filed in the Office of the Prothonotary in the Court of Common Pleas of Berks County, Pennsylvania. Tenant shall keep the Premises, Building and Land free from any and all liens arising out of any work performed, materials furnished or obligations incurred by or for Tenant, and agrees to bond against or discharge any mechanics or materialmens lien within ten (10) days after the filing or recording of any such lien. Tenant shall reimburse Landlord for any and all costs and expenses which may be incurred by Landlord by reason of the filing of any such liens and/or the removal of same, such reimbursement to be made within ten (10) days after Landlord has given Tenant a statement setting forth the amount of such costs and expenses. The failure of Tenant to pay any such amount to Landlord within such 10-day period shall carry with it the same consequences as failure to pay any installment of rent hereunder.
(b) Prior to the commencement of any work hereunder, Tenant shall cause each of its contractors to indemnify Landlord and hold it harmless from and against all personal injury and property damage liability incurred during the course of its work and to provide a builders all-risk insurance policy, which policy will be in force during the entire term of the work being performed on the Premises. The insurance shall be in an amount acceptable to the Landlord and the Tenant, and shall name the Tenant, the Landlord and the Landlords lender, as their respective interests may appear, as additional insureds. The insurance coverage shall provide for at least thirty (30) days notice of cancellation, non-renewal or change. A certificate of insurance satisfactory to the Tenant, Landlord and Landlords lender, shall be submitted to the Landlord and the Landlords lender prior to the
commencement of any work in the Premises.
(c) Within thirty (30) days after completion of any construction in the Premises, Tenant shall deliver to Landlord a complete set of as built plans of such work, including without limitation, architectural, mechanical, plumbing and electrical plans, certified to Landlord by a duly licensed Pennsylvania engineer.
15. LANDLORDS RIGHT TO ENTER. Tenant shall permit Landlord, Landlords agents, servants, employees, and prospective buyers or any other persons authorized by Landlord, to inspect the Premises at any time, and to enter the Premises for the purposes of cleaning and, if Landlord shall so elect, for making reasonable alterations, improvements or repairs to the Building, or for any reasonable purpose in connection with the operation and maintenance of the Building, and during the last one (1) year of the term of this Lease, for the purpose of exhibiting the same for sale or lease. Landlord or its agents shall have the right (but shall not be obligated) to enter the Premises in any emergency at any time without prior notice to Tenant, but Landlord shall notify Tenant by telephone of such entry either during or immediately following such emergency.
16. RELEASE OF LANDLORD.
(a) Unless caused by the negligence of Landlord, or unless Landlord fails to perform its duties under this lease, Tenant shall be responsible for and hereby relieves Landlord from any and all liability by reason of any injury, loss, or damage to any person or property in the Premises, whether the same be due to fire, breakage, leakage, water flow, gas, use, misuse, or defects therein, or condition anywhere in the Premises, failure of water supply or light or power or electricity, wind, lightning, storm, or any other cause whatsoever, whether the loss, injury or damage be to the person or property of Tenant or any other persons.
(b) Tenant acknowledges that Tenant has inspected the Premises and that the Premises are being leased AS IS as a result of such inspection and not as a result of any representations made by Landlord. Landlord makes no representation or warranty to Tenant, express or implied, that the Premises are free from hazardous or toxic substances, materials or wastes which are or become regulated by any federal, state or local governmental authority or that the Premises are in compliance with any federal, state or local environmental laws or regulations. Tenant acknowledges that the Premises are in a reasonable and acceptable condition of habitability for their intended use, and the agreed rental payments are fair and reasonable.
OR FOR NEW CONSTRUCTION
Landlord makes no warranty to Tenant, express or implied, that the Premises are free from hazardous or toxic substances, materials or wastes which are or become regulated by any federal, state or local governmental authority or that the Premises are in compliance with any federal, state or local environmental laws or regulations. However, to the best of its knowledge, Landlord represents that the building and/or premises are free of hazardous substances. Upon execution of a Commencement Agreement, Tenant will acknowledge that the Premises are in a reasonable and acceptable condition of habitability for their intended use, and the agreed rental payments are fair and reasonable.
(c) Tenant acknowledges and agrees that Landlord shall not be liable to Tenant for any loss to Tenant or injury to its property or to the property of any other person by reason of the construction of the Building and other improvements located upon the Premises, the materials used in said construction, the design thereof, the condition thereof, any defects therein, or any alterations, additions, improvements, changes or replacements thereto and thereof
(d) Landlord shall not be liable to Tenant for any damages, compensation, or claim by reason of the inconvenience or annoyance arising from the necessity of repairing any portion of the Premises or the Building or improvements erected thereon, interruption in the use or occupancy thereof, or the termination of this Lease by reason of the partial or total destruction of the Premises or the Building and improvements erected thereon.
(e) Without limiting the effect of the release stated in Paragraphs 16(a) through (d) above, Landlord shall not be deemed in breach of this Lease for any reason whatsoever unless (i) Tenant shall have delivered to Landlord written notice setting forth the specific details of all facts, events or occurrences upon which Tenant relies in asserting such breach, and (ii) Landlord shall have failed to cure the alleged breach within thirty (30) days of receipt of such written notice, it being agreed that any breach which is of a type that reasonably requires longer than thirty (30) days to cure shall be deemed cured within such 30-day period if Landlord commences to cure such breach within such 30-day period and diligently proceeds to complete the cure of such breach thereafter.
17. ASSIGNMENT AND SUBLETTING.
(a) Except as otherwise provided in the immediately following sentence, Tenant shall not assign, mortgage or pledge this Lease, or sublet the Premises or any part thereof, or permit any other person to occupy the Premises or any part thereof, without the prior written consent of Landlord. Such prior consent shall not be required if Tenant makes an assignment or sublease to (i) any corporation or other legal entity which owns directly or indirectly all or substantially all of the stock of Tenant, (ii) any corporation or other legal entity of which more than one-half the stock is owned by Tenant, or (iii) any corporation into which Tenant may be converted or with which Tenant may be merged, provided that prior to taking possession of any part of the Premises, such corporation or other legal entity shall sign an assumption agreement in form satisfactory to Landlord, whereby such corporation or other legal entity agrees to be bound by the terms and conditions of this Lease.
(b) Landlord shall not withhold its consent to any assignment or subletting to any corporation or other legal entity having financial strength the same as or greater than the present financial strength of Tenant.
(c) Any assignment or subletting, even with the consent of Landlord, shall not release Tenant from liability for payment of rent or any other charges hereunder or from any of the other obligations under this Lease, and any additional consideration resulting from such assignment or subletting in excess of the rent specified herein shall be additional rent hereunder, due and payable to Landlord. The acceptance of rent from any other person shall not be deemed to be a waiver of any of the provisions of this Lease or to be a consent to any assignment or subletting. Upon any assignment of this Lease or subletting of the Premises, a change in any respect of the use of the Premises from the use actually employed by the original Tenant shall require the prior written consent of Landlord.
18. ENVIRONMENTAL COMPLIANCE. Tenant shall not cause or permit any hazardous substance, material or waste (as defined in any applicable environmental law, rule or regulation) to be brought upon or used in or about the Premises. Tenant shall cause the Premises to be used at all times in compliance with all applicable environmental laws, rules and regulations. Any failure of Tenant to comply with the covenants contained in this Paragraph shall be covered by the indemnification provisions of Paragraph 19 herein and shall be subject to all other rights and remedies available to Landlord. In no event shall Landlord be responsible for any damage resulting from any contamination to the Premises or otherwise, unless caused by Landlord.
19. INDEMNIFICATION. Tenant agrees to indemnify Landlord against loss and save Landlord harmless from and against (a) any breach or default in the performance of any covenant or agreement to be performed by Tenant under the terms of this Lease, (b) any and all claims, damages, and liabilities arising from anything done in or about the Premises during the term of this Lease by Tenant or any of its agents, contractors, servants, employees, invitees or licensees, (c) any act or negligence of Tenant or any of its agents, contractors, servants, employees, invitees or licensees, including any accident, injury or damage whatsoever caused to any person, in or about the Premises, and (d) all costs, reasonable counsel fees, expenses and liabilities incurred in connection with any such claim for which indemnification has been provided under this Paragraph. In case any action or proceeding shall be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall reimburse Landlord for its counsel fees incurred in defending such action or proceeding. Tenant shall, within ten (10) days following notice to it of any claim of a third party relating to Tenants use or occupancy of the Premises or to the performance or non-performance by Tenant of its obligations under this Lease, give written notice to the Landlord of such claim. The provisions of this Paragraph shall survive the expiration or termination of this Lease.
20. LIABILITY INSURANCE.
(a) Tenant, at its own cost and expense, shall obtain during the term of this Lease, and any renewals or extensions thereof, commercial general liability insurance in companies acceptable to Landlord, naming Landlord and Tenant as the insureds, in an amount not less than One Million Dollars ($1,000,000.00), and providing for at least thirty (30) days prior written notice to Landlord of cancellation, nonrenewal, or modification.
(b) Upon the signing of this Lease, Tenant shall deliver to Landlord a copy of the policy evidencing such insurance. At least thirty (30) days before the expiration of such policy and any renewal policies, Tenant shall deliver to Landlord a copy of the renewal policy.
21. FIRE OR OTHER CASUALTY.
(a) If during the term of this Lease or any renewal or extension thereof, the Premises or the Building is totally destroyed or is so damaged by fire or other casualty not occurring through the fault or negligence of Tenant or those employed by or acting for Tenant to the extent that the same cannot be repaired or restored within one hundred eighty (180) days from the date of the happening of such damage, or if such damage or casualty is not included in the risks covered by Landlords fire insurance, then Landlord shall have the option to terminate this Lease upon written notice to Tenant, whereupon this Lease shall absolutely cease and terminate and the rent shall abate for the balance of the term. In such case, Tenant shall pay the rent apportioned to the date of damage and Landlord may enter upon and repossess the Premises without further notice.
(b) If Landlord chooses to restore the Premises, Landlord shall repair whatever portion of the Premises that may have been damaged by fire or other casualty insured as aforesaid, and the rent shall be apportioned during the time Landlord is in possession, taking into account the proportion of the Premises rendered untenantable and the duration of Landlords possession.
(c) If said damage by fire or other casualty was caused by the action or negligence of Tenant or its agents, employees or invitees, Tenant shall not be entitled to any abatement or apportionment of the rent.
(d) Tenant, at its own cost and expense, shall obtain during the term of this Lease, and any renewals or extensions thereof, content insurance for the full replacement value of its personalty used in Tenants daily operations of the Permitted Use.
22. WAIVER OF SUBROGATION. Landlord and Tenant shall each endeavor to procure an appropriate clause in, or endorsement on, any fire and extended coverage insurance covering the Premises and Building and personal property, fixtures, and equipment located thereon or therein, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery. Each party hereto hereby agrees that it will not make any claim against or seek to recover from the other for any loss or damage to its property or the property of others resulting from fire or other hazards covered by such fire and extended coverage insurance except as expressly provided in this Lease; provided, however, that the release, discharge, exoneration, and covenant not to sue herein contained shall be limited by the terms and provisions of the waiver of subrogation clauses and/or endorsements consenting to a waiver of right of recovery and shall be coextensive therewith.
23. NO IMPLIED EVICTION. Notwithstanding any inference to the contrary herein contained, it is understood that the exercise by Landlord of any of its rights hereunder, including (without limitation) cessation of services as described in Paragraph 27(c)(ii), shall never be deemed an eviction (constructive or otherwise) of Tenant, or a disturbance of its use of the Premises, and shall in no event render Landlord liable to Tenant or any other person, so long as such exercise of rights is in accordance with the foregoing terms and conditions.
24. CONDEMNATION. If the whole of the Premises shall be acquired or condemned by eminent domain, then the term of this Lease shall cease and terminate as of the date on which possession of the Premises is required to be surrendered to the condemning authority. All rent
shall be paid up to the date of termination. A partial condemnation shall not be cause for termination of this Lease. Tenant hereby expressly waives any right or claim to any part of any condemnation award or damages and hereby assigns to Landlord any such right or claim to which Tenant might become entitled.
25. LANDLORDS RIGHT TO PAY TENANT EXPENSES. If Tenant shall at any time fail to pay any utility or other charges or to take out, pay for, maintain or deliver any of the insurance policies provided for herein, or shall fail to make any other payment or perform any other act which Tenant is obligated to make or perform under this Lease, then without waiving, or releasing Tenant from, any obligations of Tenant contained in this Lease, Landlord may, but shall not be obligated to, pay any such charge, effect any such insurance coverage and pay premiums therefor, and may make any other payment or perform any other act which Tenant is obligated to perform under this Lease, in such manner and to such extent as shall be necessary. In exercising any such rights, Landlord may pay any necessary and incidental costs and expenses, employ counsel and incur and pay reasonable attorneys fees. All sums so paid by Landlord and all necessary and incidental costs and expenses in connection with the performance of any such act by Landlord, together with interest thereon at the rate of twelve percent (12%) per annum from the date of the making of such expenditure by Landlord, shall be deemed additional rent hereunder and, except as otherwise expressly provided in this Lease, shall be payable to Landlord after ten (10) days written notice thereof. Tenant covenants to pay any such sum or sums with interest as aforesaid and Landlord shall have (in addition to any other right or remedy of the Landlord) the same rights and remedies in the event of nonpayment thereof by Tenant as in the case of default by Tenant in the payment of rent.
26. EVENTS OF DEFAULT. The occurrence of each of the following events shall be an Event of Default hereunder:
(a) Tenant does not pay in full when due any installment of rent, additional rent or any other charges, expenses or costs herein agreed to be paid by Tenant for a period of five (5) days after receipt of notice that same has not been paid when due; provided that in the event Tenant shall have received three (3) such written notices within any period of twelve (12) consecutive months, then during the remainder of the twelve (12) consecutive month period after Tenant shall have received its first written notice from Landlord, Tenant shall thereafter be in default hereunder whenever Tenant shall fail to pay any sum owing under this Lease when due, without the necessity of sending any written notice of nonpayment;
(b) Tenant violates or fails to perform or comply with any nonmonetary term, covenant, condition, or agreement herein contained and fails to cure such default within thirty (30) days of notice thereof from Landlord, provided, however, if such default cannot be cured with reasonable diligence within such thirty (30) day period, the time for cure of same shall be deemed extended for such additional time as is reasonably necessary to cure same with due diligence for an additional period not to exceed thirty (30) days;
(c) Tenant vacates the Premises;
(d) Tenant shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent or shall file any petition or answer seeking any reorganization, arrangement, recapitalization, readjustment, liquidation or dissolution or similar relief under any present or future bankruptcy laws of the United States or any other country or political subdivision thereof, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of all or any substantial part of Tenants properties, or shall make an assignment for the benefit of creditors, or shall admit in writing Tenants inability to pay Tenants debts generally as they become due; or
(e) If an involuntary petition in bankruptcy shall be filed against Tenant seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future bankruptcy laws of the United States or any other state or political subdivision thereof, and if within sixty (60) days after the commencement of any such proceeding against Tenant, such proceedings shall not have been dismissed, or if, within sixty (60) days after the appointment, without the consent or acquiescence of Tenant, or any trustee, receiver or liquidator of the Tenant or of all or any substantial part of Tenants property, such appointment shall not have been vacated or stayed on appeal or otherwise, or if, within sixty (60) days after the expiration of any such stay, such appointment shall not have been vacated.
27. LANDLORDS REMEDIES.
(a) Upon the occurrence of any Event of Default, Landlord may, at its option and without any further notice to Tenant, terminate this Lease, whereupon the estate hereby vested in Tenant shall cease and any and all other right, title and interest of Tenant hereunder shall likewise cease without notice or lapse of time, as fully and with like effect as if the entire term of this Lease had elapsed, but Tenant shall continue to be liable to Landlord as hereinafter provided.
(b) Upon the occurrence of any Event of Default, or at any time thereafter, Landlord, in addition to and without prejudice to any other rights and remedies Landlord shall have at low or in equity, shall have the right, without terminating this Lease, to change the locks on the doors to the Premises and exclude Tenant therefrom until all of such defaults shall have been completely cured.
(c) Upon the occurrence of any Event of Default, or at any time thereafter, Landlord, in addition to and without prejudice to any other rights and remedies Landlord shall have at law or in equity, shall have the right to re-enter the Premises, either by force or otherwise, and recover possession thereof and dispossess any or all occupants of the Premises in the manner prescribed by the statute relating to summary proceedings, or similar statutes, but Tenant in such case shall remain liable to Landlord as hereinafter provided.
(d) In case of any Event of Default, re-entry, expiration and/or dispossession by summary proceedings, whether or not this Lease shall have been terminated as aforesaid:
(i) All delinquent rent, additional rent and all other sums required to be paid by Tenant hereunder shall become payable thereupon and shall be paid up to the time of such re-entry, expiration and/or dispossession, and all accelerated payments due under subparagraphs 10(a) and (b) hereof shall become immediately due and payable;
(ii) Landlord shall have the right, in its sole discretion, to terminate immediately and without any notice to Tenant, all services which are to be supplied by Landlord pursuant to the terms of this Lease, including without limitation, all janitor service and the maintenance and repair responsibilities described in Paragraph 7 hereof;
(iii) Landlord shall have the right, but not the obligation, to relet the Premises or any part or parts thereof for the account of Tenant, either in the name of Landlord or otherwise, for a term or terms which may, at Landlords option, be less than or exceed the period which would otherwise have constituted the balance of the term of this Lease and on such conditions (which may include concessions or free rent) as Landlord, in its reasonable discretion, may determine and may collect and receive the rents therefor; Landlord shall in no way be responsible or liable for any failure to relet the Premises or any part thereof, or for any failure to collect any rent due upon any such reletting; and
(iv) Tenant shall reimburse Landlord for any expenses that Landlord may incur in connection with recovering possession of the Premises and any reletting thereof, such as court costs, attorneys fees, brokerage fees, and the costs of advertising and the costs of any alterations, repairs, replacements and/or decorations in or to the Premises as Landlord, in Landlords sole judgment, considers advisable and necessary for the purpose of such reletting of the Premises; and the making of such alterations, repairs, replacements and/or decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid.
(e) If this Lease is terminated by Landlord pursuant to Paragraph 27(a) hereof, Tenant nevertheless shall remain liable for all rent and damages which may be due or sustained prior to such termination, together with additional damages (the Liquidated Damages) which, at Landlords option, shall be either:
(i) an amount equal to (A) the rent and all other sums required to be paid by Tenant hereunder during the period which would otherwise have constituted the balance of the term of this Lease, and all damages, costs, fees and expenses incurred by Landlord as a result of such Event of Default, including without limitation, reasonable attorneys fees, costs and expenses incurred by Landlord in pursuit of its remedies hereunder, less (B) the rent, if any, received by Landlord, pursuant to any reletting of the Premises during the period which would otherwise have constituted the balance of the term of this Lease; such amount calculated pursuant to this Paragraph 27(d)(i) shall be payable in monthly installments, in advance, on the first day of each calendar month following the occurrence of such Event of Default and continuing during the period which would otherwise have constituted the balance of the term of this Lease; or
(ii) an amount equal to the Annual Minimum Rent, Premises Expenses, and all other additional rent which was due and payable for the two (2) year period immediately preceeding Tenants default.
(f) In the event Tenant commits a default, or suffers a default to exist, within ten (10) days after written demand, Tenant shall reimburse Landlord for Landlords attorneys fees incurred by Landlord in the enforcement of this Lease, regardless whether legal proceedings are or are not instituted, which fees shall include any actions taken in connection with any bankruptcy proceeding filed by or against Tenant.
(b) Tenant shall pay Landlord interest at twelve percent (12%) per annum on all failures to pay timely the rent, additional rent or any other sums required to be paid by Tenant hereunder from the date such payment is due until the date such payment is made to Landlord. Any judgment obtained by the Landlord as a result of the exercise of its rights and remedies under this Lease
shall bear interest at the rate of twelve percent (12%) per annum from the date of entry of such judgment through the date such judgment is paid in full.
(g) Upon any termination of this Lease, whether by lapse of time, by the exercise of any option by Landlord to terminate the same, or in any other manner whatsoever, or upon any termination of Tenants right to possession without termination of this Lease, Tenant shall immediately surrender possession of the Premises to Landlord and immediately vacate the same, and remove all effects therefrom, except such as may not be removed under other provisions of this Lease. If Tenant fails to surrender and vacate as aforesaid, Landlord may forthwith re-enter the Premises, with or without process of law, and repossess itself thereof as in its former estate and expel and remove Tenant and any other persons and property therefrom, using such force as may be necessary, without being deemed guilty of trespass, eviction, conversion or forcible entry and without thereby waiving Landlords rights to rent or any other rights given Landlord under this Lease or at law or in equity. If Tenant shall not remove all effects from the Premises as hereinabove provided, Landlord may, at its option, remove any or all of said effects in any manner it shall choose and either dispose of the same at Landlords sole discretion, or store the same without liability for loss thereof; and Tenant shall pay Landlord, on demand, any and all expenses incurred in such removal and also storage on said effects, if applicable, for any length of time during which the same shall be in Landlords possession or in storage.
28. CONFESSION OF JUDGMENT FOR DAMAGES. THIS PARAGRAPH SETS FORTH A WARRANT OF ATTORNEY FOR AN ATTORNEY TO CONFESS JUDGMENT AGAINST THE TENANT. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE TENANT, TENANT HEREBY KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY, AND, ON THE ADVICE OF SEPARATE COUNSEL OF TENANT, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TENANT HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA.
TENANT HEREBY AUTHORIZES ANY ATTORNEY OF ANY COURT OF RECORD, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, TO APPEAR IMMEDIATELY THEREAFTER AS ATTORNEY FOR THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT IN ANY COMPETENT COURT AND TO CONFESS JUDGMENT OR JUDGMENTS AND SUCCESSIVE JUDGMENTS BY CONFESSION (WITHOUT STAY OF EXECUTION OR APPEAL) IN FAVOR OF THE LANDLORD AND ALL PERSONS CLAIMING UNDER THE LANDLORD AND AGAINST THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT FOR ALL AMOUNTS THEN DUE UNDER THIS LEASE, TOGETHER WITH AN ATTORNEYS COLLECTION COMMISSION EQUAL TO TEN PERCENT (10%) OF THE TOTAL OF SUCH AMOUNTS, WITHOUT ANY LIABILITY ON THE PART OF THE SAID ATTORNEY, FOR WHICH THIS SHALL BE A SUFFICIENT WARRANT, AND THEREUPON A WRIT OF EXECUTION WITH CLAUSE FOR COSTS, OR OTHER PROCESS FOR SIMILAR PURPOSES, MAY ISSUE FORTHWITH WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER, AND THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT HEREBY WAIVE ALL EXEMPTION LAWS AND INQUISITION ON REAL PROPERTY AND RELEASE TO THE LANDLORD AND ALL PERSONS CLAIMING UNDER THE LANDLORD ALL ERRORS AND DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT, OR IN CAUSING SUCH WRIT OF EXECUTION OR OTHER PROCESS TO BE
ISSUED, OR IN ANY PROCEEDING THEREON OR CONCERNING THE SAME, AND HEREBY AGREE THAT NO WRIT OF ERROR OR OBJECTION OR EXCEPTION SHALL BE MADE OR TAKEN THERETO. IF A COPY OF THIS LEASE, VERIFIED BY AFFIDAVIT, IS FILED IN SAID ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY, ANY LAW OR RULE OF COURT TO THE CONTRARY NOTWITHSTANDING. THIS WARRANT OF ATTORNEY SHALL NOT BE EXHAUSTED BY ONE EXERCISE THEREOF, AND SHALL REMAIN IN FORCE AND SHALL BE OPERATIVE FOR SUCCESSIVE EXERCISES THEREOF, FROM TIME TO TIME AS THE NEED MAY ARISE, NOT ONLY WITH RESPECT TO THE TENANT BUT ALSO WITH RESPECT TO ALL PERSONS CLAIMING UNDER THE TENANT.
29. CONFESSION OF JUDGMENT IN EJECTMENT. THIS PARAGRAPH SETS FORTH A WARRANT OF ATTORNEY FOR AN ATTORNEY TO CONFESS JUDGMENT AGAINST THE TENANT. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE TENANT, TENANT HEREBY KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY, AND, ON THE ADVICE OF SEPARATE COUNSEL OF TENANT, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TENANT HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA.
TENANT HEREBY AUTHORIZES THE PROTHONOTARY, CLERK OF COURT OR ANY ATTORNEY OF ANY COURT OF RECORD, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR IN THE EVENT THAT TENANT FAILS TO SURRENDER POSSESSION OF ALL OR ANY PART OF THE PREMISES AS REQUIRED HEREIN, TO APPEAR FOR THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT IN ANY COMPETENT COURT AND CONFESS JUDGMENT IN EJECTMENT (WITHOUT STAY OF EXECUTION OR APPEAL) IN FAVOR OF THE LANDLORD AND ALL PERSONS CLAIMING UNDER THE LANDLORD AND AGAINST THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT FOR POSSESSION OF THE PREMISES, WITHOUT ANY LIABILITY ON THE PART OF THE SAID ATTORNEY, FOR WHICH THIS SHALL BE A SUFFICIENT WARRANT, AND THEREUPON A WRIT OF POSSESSION WITH CLAUSE FOR COSTS, OR OTHER PROCESS FOR SIMILAR PURPOSES, MAY ISSUE FORTHWITH WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER, AND THE TENANT AND ALL PERSONS CLAIMING UNDER THE TENANT HEREBY RELEASE TO THE LANDLORD AND ALL PERSONS CLAIMING UNDER THE LANDLORD ALL ERRORS AND DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT, OR IN CAUSING SUCH WRIT OF POSSESSION OR OTHER PROCESS TO BE ISSUED, OR IN ANY PROCEEDING THEREON OR CONCERNING THE SAME, AND HEREBY AGREE THAT NO WRIT OF ERROR OR OBJECTION OR EXCEPTION SHALL BE MADE OR TAKEN THERETO. IF A COPY OF THIS LEASE, VERIFIED BY AFFIDAVIT, IS FILED IN SAID ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY, ANY LAW OR RULE OF COURT TO THE CONTRARY NOTWITHSTANDING. THIS WARRANT OF ATTORNEY SHALL NOT BE EXHAUSTED BY ONE EXERCISE THEREOF, AND SHALL REMAIN IN FORCE AND SHALL BE OPERATIVE FOR SUCCESSIVE EXERCISES THEREOF, FROM TIME TO TIME AS THE NEED MAY ARISE, NOT ONLY WITH RESPECT TO THE TENANT BUT ALSO WITH RESPECT TO ALL PERSONS CLAIMING UNDER THE TENANT.
30. RIGHT OF ASSIGNEE OF LANDLORD. The right to enforce all of the provisions of this Lease may be exercised by any assignee of the Landlords right, title and interest in this Lease in its, his, her or their own name, and Tenant hereby expressly waives the requirements of any and all laws regulating the manner and/or form in which such assignments shall be executed and witnessed.
31. REMEDIES CUMULATIVE. All remedies given to Landlord herein and all rights and remedies given to Landlord by law and equity shall be cumulative and concurrent. No termination of this Lease, or taking or recovering of possession of the Premises, or entry of any judgment either for possession or for any money claimed to be due Landlord, shall deprive Landlord of any other action against Tenant for possession, or for any money due Landlord hereunder, or for damages hereunder. The exercise of or failure to exercise any remedy shall not bar or delay the exercise of any other remedy.
32. TENANTS WAIVERS.
(a) If proceedings shall be commenced by Landlord to recover possession of the Premises, either at the end of the term hereof or by reason of an Event of Default or otherwise, Tenant expressly waives all rights to notice in excess of five (5) days required by any Act of Assembly, including the Act of April 6, 1951, P.L. 69, Art. V, Sec. 501, as amended, and agrees that in either or any such case five (5) days notice shall be sufficient. Without limitation of or by the foregoing, Tenant hereby waives any and all demands, notices of intention, and notice of action or proceedings which may be required by law to be given or taken prior to any entry or re-entry by summary proceedings, ejectment or otherwise, by Landlord, except as hereinbefore expressly provided with respect to five (5) days notice.
(b) Any notice to quit required by law previous to proceedings to recover possession of the Premises or any notice of demand for rent on the day when such is due and the benefit of all laws granting stay of execution, appeal, inquisition and exemption are hereby waived by Tenant; provided, however, that nothing in this paragraph shall be construed as a waiver of any notice specifically mentioned or required by any other part of this Lease.
(c) In the event of a termination of this Lease prior to the date of expiration herein originally fixed, Tenant hereby waives all right to recover or regain possession of the Premises, to save forfeiture by payment of rent due or by other performance of the conditions, terms or provisions hereof, and, without limitation of or by the foregoing, Tenant waives all right to reinstate or redeem this Lease notwithstanding any provisions of any statute, law or decision now or hereafter in force or effect and Tenant waives all right to any second or further trial in summary proceedings, ejectment or in any other action provided by any statute or decision now or hereafter in force or effect.
33. ATTORNMENT. In the event of the sale or assignment of Landlords interest in the Premises or in the event of a foreclosure under any mortgage made by Landlord covering the Premises, Tenant shall attorn to the purchaser and recognize such purchaser as Landlord under this Lease.
34. SUBORDINATION. At the option of Landlord or Landlords lender, or both of
them, this Lease and the Tenants interest hereunder shall be subject and subordinate at all times to any mortgage or mortgages, deed or deeds of trust, or such other security instrument or instruments, including all renewals, extensions, consolidations, assignments and refinances of the same, as well as all advances made upon the security thereof, which now or hereafter become liens upon the Landlords fee and/or leasehold interest in the Premises, and/or any and all of the buildings now or hereafter erected or to be erected and/or any and all of the Premises, provided, however, that in each such case, the holder of such other security, the trustee of such deed of trust or holder of such other security instrument shall agree that this Lease shall not be divested or in any way affected by foreclosure or other default proceedings under said mortgage, deed of trust, or other instrument or other obligations secured thereby, so long as Tenant shall not be in default under the terms of this Lease; and shall agree that this Lease shall remain in full force and effect notwithstanding any such default proceedings.
Notwithstanding anything herein to the contrary, any holder of any mortgage may at any time subordinate its mortgage to this Lease, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such mortgage without regard to their respective dates of execution and delivery and in that even such mortgage shall have the same rights with respect to this Lease as though this Lease had been executed and delivered prior to the execution and delivery of the mortgage.
35. EXECUTION OF DOCUMENTS. The above subordination shall be self-executing, but Tenant agrees upon demand to execute such other document or documents as may be required by a mortgagee, trustee under any deed of trust, or holder of a similar security interest, or any party to the types of documents enumerated herein for the purpose of subordinating this Lease in accordance with the foregoing. Upon the expiration of ten (10) days after a formal written notice, Tenant shall be deemed to have appointed Landlord and Landlord may execute and deliver the required documents for and on behalf of Tenant.
36. ESTOPPEL AGREEMENTS. Tenant shall execute an estoppel agreement in favor of any mortgagee or purchaser of Landlords interest herein, within ten (10) days after requested to do so by Landlord or any such mortgagee or purchaser. Such estoppel agreement shall be in the form requested by Landlord or such mortgagee or purchaser.
37. CONDOMINIUM CONVERSION. Tenant acknowledges that Landlord has informed Tenant that Landlord, at any time in Landlords sole discretion, may by recorded declaration, convert the fee ownership of the Building and the Land to a condominium in accordance with the provisions of the Pennsylvania Uniform Condominium Act (the Act). In such event, the common areas of the Building and the Land shall become Common Elements and/or Limited Common Elements, as defined in the Act and as designated by Landlord, and the Common Expenses pertaining thereto (as defined in the Act), as applicable, shall be included as part of the Premises Expenses. Tenant agrees upon demand to execute such document or documents as may be required by Landlord in connection with any such condominium conversion.
38. NOTICES. All notices required to be given by either party to the other shall be in writing. All such notices shall be deemed to have been given upon delivery in person, or upon depositing in the United States mail, by certified mail, return receipt requested, postage prepaid, or by delivery by telefax, facsimile or telegraph, or by Federal Express or other nationally recognized overnight delivery service, addressed to the parties at the addresses shown in the summary pages at the front of this Lease or to such other address which either party may hereafter designate in writing by notice given in a like manner.
39. BINDING EFFECT. All rights and liabilities herein given to, or imposed upon the respective parties hereto, shall extend to and bind the several and respective heirs, personal representatives, successors and permitted assigns of said parties.
40. SURVIVAL OF VALID TERMS. If any provision of this Lease shall be invalid or unenforceable, the remainder of the provisions of this Lease shall not be affected thereby, and each and every provision of this Lease shall be enforceable to the fullest extent permitted by law.
41. ENTIRE AGREEMENT. This Lease and any exhibit, rider or addendum that may be attached hereto set forth all the promises, agreements, conditions and understandings between Landlord and Tenant relative to the Premises, and there are no promises, agreements, conditions or understandings, either oral or written, between them other than are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them.
42. PROHIBITION AGAINST RECORDING. This Lease shall not be recorded and any attempted recording of this Lease shall constitute an Event of Default hereunder.
43. INTERPRETATION. As used in this Lease and when required by context, each number (singular or plural) shall include all numbers, and each gender shall include all genders. Time is and shall be of essence of each term and provision of this Lease. The term person as used herein means person, firm, association or corporation, as the case may be. If Tenant is more than one person, all agreements, conditions, obligations, covenants, warrants of attorney, waivers and releases made by Tenant shall be joint and several, and shall bind and affect all persons who are defined as Tenant herein.
44. LIABILITY OF LANDLORD. The term Landlord as used herein means the fee owner of the Premises from time to time. In the event of the voluntary or involuntary transfer of such ownership to a successor-in-interest of the Landlord, the Landlord shall be automatically discharged and relieved of and from all liability and obligations hereunder which shall thereafter accrue, and Tenant shall look solely to such successor-in-interest for the performance and obligations of the Landlord hereunder which shall thereafter accrue. The liability of Landlord and its successors-in-interest under or with respect to this Lease shall be strictly limited to and enforceable solely out of its or their interest in the Premises and shall not be enforceable out of any other assets.
45. CAPTIONS AND HEADINGS. The captions and headings of the paragraphs contained herein are for convenience of reference only and in no way define, limit, describe, modify or amplify the interpretation, construction or meaning of any provision of or the scope or intent of this Lease nor in any way affect this Lease. All Exhibits are an integral part of this Lease and are attached hereto.
46. NO BROKERAGE COMMISSION. Landlord and Tenant represent and warrant that no brokerage commission or similar compensation is due to any party by reason of this Lease. Each party hereby agrees to indemnify and hold the other party harmless from and against any and all claims, costs, damages, expenses, judgments or liability resulting from any claim for brokerage commissions or similar compensation made by any party in connection with this Lease.
47. QUIET ENJOYMENT. Upon Tenants compliance with the provisions of this Lease, including the payment of all rent hereunder, Tenant shall peaceably hold and enjoy the Premises during the term hereof without hinderance or interruption by Landlord or any person claiming under Landlord.
48. WAIVER OF TRIAL BY JURY. Each party to this Lease agrees that any suit, action, or proceeding, whether claim or counterclaim, brought or instituted by any party hereto or any successor or assign of any party hereto or with respect to this Lease or which in any way relates, directly or indirectly, to the Premises or any event, transaction, or occurrence arising out of or in any way in connection with the Premises, or the dealings of the parties with respect thereto, shall be tried only by a court and not by a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. TENANT ACKNOWLEDGES AND AGREES THAT THIS PARAGRAPH 48 IS A SPECIFIC AND MATERIAL ASPECT TO THIS LEASE BETWEEN THE PARTIES AND THAT LANDLORD WOULD NOT LEASE THE PREMISES TO THE TENANT IF THIS WAIVER OF JURY TRIAL SECTION WERE NOT A PART OF THIS LEASE.
49. OWNERS ASSOCIATION. This Lease and all terms and provisions hereof shall be under and subject, in all respects, to: (a) the Declaration of Covenants, Easements, Conditions and Restrictions for The Owners Association Of Wyomissing Professional Center, Inc., which is recorded in the Recorder of Deeds Office of Berks County, Pennsylvania, and (b) the Articles of Incorporation and the Bylaws of The Owners Association Of Wyomissing Professional Center, Inc., copies of which are available upon request. Tenant covenants and agrees to comply with the terms of such written instruments insofar as they pertain to any tenant of the Building and such tenants agents, servants, employees, invitees, and business visitors.
TENANT ACKNOWLEDGES THAT THIS LEASE CONTAINS, AT PARAGRAPHS 28 AND 29 HEREOF, PROVISIONS FOR THE CONFESSION OF JUDGMENT AGAINST TENANT FOR MONEY AND FOR POSSESSION OF REAL PROPERTY AND HAS REVIEWED AND UNDERSTANDS THE CONTENTS THEREOF.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound to the terms of this Lease, have caused this Lease to be duly executed this 30 day of Jan, 2001. .
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LESSOR.
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WYOMISSING PROFESSIONAL CENTER II, LIMITED PARTNERSHIP, a Pennsylvania limited partnership, by its General Partner, WYOMISSING PROFESSIONAL CENTER II, INC. | |
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/s/ Stephen J. Najarian |
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Stephen J. Najarian, President |
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(Landlord) |
ATTEST: |
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By: |
/s/ Susan M. Montgomery |
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By: |
/s/ Robert S. Ippolito |
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Name: |
Susan M. Montgomery |
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Name: |
Robert S. Ippolito |
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Title: |
Asst. to Chairman |
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Title: |
Vice President/Sec/Treas |
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Date: |
1/30/02 | |
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(Tenant) |
CONSENT
INTENDING to be legally bound hereby, The Owners Association OF Wyomissing Professional Center, Inc. (or The Owners Association of Wyomissing Professional Center, Inc. or The Owners Association of Wyomissing Professional Center, West Campus, Inc.) hereby joins in and consents to the above Lease insofar as any of the above provisions concern the parking area and any other common areas maintained by it.
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OWNERS ASSOCIATION OF WYOMISSING PROFESSIONAL CENTER, INC. | |
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By: |
/s/ Stephen J. Najarian |
Exhibits
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Leased Premises |
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B |
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Expense Budget |
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Building Location |
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Tenant Plans and Specifications |
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Building Common Area |
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COMMENCEMENT AGREEMENT
THIS COMMENCEMENT AGREEMENT (the Agreement) made this 23rd day of May 2002, between Penn National Gamming, Inc., hereinafter, called Tenant, having its principal place of business at 825 Berkshire Boulevard, Suite 200, Wyomissing, PA 19610 and Wyomissing Professional Center, II, LIMITED PARTNERSHIP hereinafter called Landlord, having its principal place of business at 825 Berkshire Blvd. Suite 203 Wyomissing, Pennsylvania 19610.
WITNESETH:
The Tenant and the Landlord have executed a Lease Agreement, which includes Exhibits A, B, C, E and F, relating to the Leased Premises located at 855 Berkshire Boulevard, Suite 100, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Agreement is an amendment to and shall be deemed an integral part of the Lease except to the extent to which the provisions of this Agreement modify the provisions of the Lease. The provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Agreement without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Commencement Date. Commencement date for Tenants space shall be May 21, 2002.
5. Term of Lease. Term of Lease is ten (10) years and eleven (11) days, starting May 21, 2002 and ending May 31, 2012.
6. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of, Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Commencement Agreement to be duly executed this 23rd day of May 2002.
THIS AGREEMENT MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
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LANDLORD: | |||
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WYOMISSING PROFESSIONAL CENTER II, | |||
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LIMITED PARTNERSHIP, by its General Partner, The | |||
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Wyomissing Professional Center II | |||
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/s/ Stephen J. Najarian | ||
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Stephen J. Najarian | |
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By: |
/s/ Susan M. Montgomery |
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By: |
/s/ Robert S. Ippolito | ||||
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Susan M. Montgomery |
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Robert S. Ippolito | ||||
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Office Manager/ Asst. to Chairman |
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VP/Sec/Treas | ||||
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5/23/02 |
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5/24/02 | ||||
FIRST LEASE AMENDMENT
THIS LEASE AMENDMENT (the Amendment) made this 4th day of December, 2002, between Penn National Gaming, hereinafter, called Tenant, having its principal place of business at 825 Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610 and Wyomissing Professional Center II, Limited Partnership hereinafter called Landlord, having its principal place of business at 825 Berkshire Boulevard., Suite 203, Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement dated January 25, 2002 which includes Exhibits A, B, C, E and F, relating to the Leased Premises located at 855 Berkshire Blvd., Suite 200, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease except to the extent to which the provisions of this Amendment modify the provisions of the Lease. The provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. The floor area of the leased premises is increased by 5,521 rentable square feet from 4,388 square feet of rentable floor area to 9,909 square feet of rentable floor area. All Lease calculations, pro rations and charges based on rentable square feet shall be changed accordingly.
5. Fixed Annual Minimum Rent: As per attached Attachment A1-1.
6. Effective Date. The effective date for Tenants increased space and rental payments shall be March 1, 2003 or ten (10) days from the completion of the construction to be performed by Landlords contractor as per Attachment A1-2 attached hereto, whichever is sooner.
7. Term of Lease. The Term of Lease is unchanged ending May 31, 2012.
8. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of, Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 4th day of December, 2002.
THIS LEASE AMENDMENT MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
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LANDLORD: | |
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WYOMISSING PROFESSIONAL CENTER II, | |
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LIMITED PARTNERSHIP, by its General Partner, | |
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Wyomissing Professional Center II, Inc. | |
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| |
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By: |
/s/ Stephen J. Najarian |
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Stephen J. Najarian, President |
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Date: |
12/4/02 |
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TENANT: | ||||||
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PENN NATIONAL GAMING, INC., a | ||||||
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Pennsylvania corporation | ||||||
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ATTESST: |
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By: |
/s/ Susan M. Montgomery |
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By: |
/s/ Robert S. Ippolito | ||||
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Name: |
Susan M. Montgomery |
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Name: |
Robert S. Ippolito | ||||
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Title: |
Asst. to Chairman |
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Title: |
VP/Sec/Treas | ||||
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Date: |
12-4-02 |
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Date: |
12/4/02 | ||||
ATTACHMENT A1-1
FIXED ANNUAL MINIMUM RENT
Rentable SF: |
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9,909 |
| |
Starting Rate PRSF: |
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$ |
13.00 |
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Annual Escalation: |
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2.0 |
% | |
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|
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|
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Annual Rent |
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Lease Year/ |
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Rentable |
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Minimum Rent per |
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|
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(the Annual |
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Period |
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Sq.Ft. |
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Rentable Sq. Ft. |
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Monthly Rent |
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Minimum Rent) |
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3/1/03 - 5/31/03 |
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9,909 |
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$ |
13.00 |
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$ |
10,734.75 |
|
$ |
32,204.25 |
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Lse Yr 2 6/1/03 - 5/31/04 |
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9,909 |
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$ |
13.26 |
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$ |
10,949.45 |
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$ |
131,393.34 |
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Lse Yr 3 04-05 |
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9,909 |
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$ |
13.53 |
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$ |
11,168.43 |
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$ |
134,021.21 |
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Lse Yr 4 05-06 |
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9,909 |
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$ |
13.80 |
|
$ |
11,391.80 |
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$ |
136,701.63 |
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Lse Yr 5 06-07 |
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9,909 |
|
$ |
14.07 |
|
$ |
11,619.64 |
|
$ |
139,435.66 |
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Lse Yr 6 07-08 |
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9,909 |
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$ |
14.35 |
|
$ |
11,852.03 |
|
$ |
142,224.38 |
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Lse Yr 7 08-09 |
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9,909 |
|
$ |
14.64 |
|
$ |
12,089.07 |
|
$ |
145,068.86 |
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Lse Yr 8 09-10 |
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9,909 |
|
$ |
14.93 |
|
$ |
12,330.85 |
|
$ |
147,970.24 |
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Lse Yr 9 10-11 |
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9,909 |
|
$ |
15.23 |
|
$ |
12,577.47 |
|
$ |
150,929.65 |
|
Lse Yr 10 11-12 |
|
9,909 |
|
$ |
15.54 |
|
$ |
12,829.02 |
|
$ |
153,948.24 |
|
Notes :
(1) |
The first amount shown in the Annual Rent column for the period 3/1/03 to 5/31/03 is for that three (3) month period only, the remaining amounts shown in that column are for the 12 month Lease Year periods indicated. |
(2) |
Monthly Rent shall be pro rated for a partial month occupancy. |
SECOND LEASE AMENDMENT
THIS LEASE AMENDMENT (the Amendment) made this 29th day of January, 2003, between Penn National Gaming, hereinafter, called Tenant, having its principal place of business at 825 Berkshire Boulevard, Suite 200, Wyomissing, Pennsylvania 19610 and Wyomissing Professional Center II, Limited Partnership hereinafter called Landlord, having its principal place of business at 825 Berkshire Boulevard., Suite 203, Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement dated January 25, 2002 which includes Exhibits A, B, C, E and F, and a First Lease Amendment thereto relating to the Leased Premises located at 855 Berkshire Blvd., Suite 200, Wyomissing, Pennsylvania 19610.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease except to the extent to which the provisions of this Amendment modify the provisions of the Lease. The provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Construction. The construction to be performed by Landlords contractor is modified to include the OPTIONS/UPGRADES/ADD ONS shown on the Estimate Sheet Fit Up v2.1 [Revised 1/20/03] attached hereto as Attachment A2-1.
5. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of, Landlord and Tenant, and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 29th day of January, 2003.
THIS LEASE AMENDMENT MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A
RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
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LANDLORD: |
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WYOMISSING PROFESSIONAL CENTER II, | |||||
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LIMITED PARTNERSHIP, by its General Partner, | |||||
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Wyomissing Professional Center II, Inc. | |||||
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By: |
/s/ Stephen J. Najarian | |||||
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Stephen J. Najarian, President | |||||
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Date: |
1/28/03 | |||||
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TENANT: |
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PENN NATIONAL GAMING, INC., a | |||||
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Pennsylvania corporation | |||||
ATTEST: |
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By: |
/s/ Susan M. Montgomery |
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By: |
/s/ Robert S. Ippolito | |||
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| |||
Name: |
Susan M. Montgomery |
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Name: |
Robert S. Ippolito | |||
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Title: |
Asst. to Chairman |
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Title: |
Vice President/Secretary/Treasurer | |||
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Date: |
1/29/03 |
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Date: |
1/29/03 | |||
THIRD LEASE AMENDMENT
THIS THIRD LEASE AMENDMENT (the Amendment) made this 19th day of October, 2010, between Penn National Gaming, Inc., a Pennsylvania corporation, hereinafter called Tenant, having its principal place of business at 825 Berkshire Boulevard, Suite 200, Wyomissing, PA 19610 and Wyomissing Professional Center II, Limited Partnership, a Pennsylvania limited partnership, hereinafter called Landlord, having its principal place of business at 875 Berkshire Boulevard, Suite 102, Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement dated January 25, 2002 which includes Exhibits A, B, C, E and F, a Commencement Agreement thereto dated May 23, 2002, a First Lease Amendment thereto dated December 4, 2002, and a Second Amendment thereto dated January 29, 2003 (collectively, the Lease) relating to the Leased Premises located at 855 Berkshire Boulevard, Suite 100, Wyomissing, Pennsylvania 19610. The original Lease premises totaled 4,388 rentable square feet which square footage was increased by an additional 5,521 rentable square feet via the First Lease Amendment for a total of 9,909 rentable square feet and the parties desire to include an additional, adjacent space consisting of 3,569 rentable square feet for a total leased premises of 13,478 rentable square feet.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease. Except to the extent to which the provisions of this Amendment modify the provisions of the Lease, the provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. The defined leased premises shall consist of a total space of 13,478 rentable square feet.
5. Term of Lease. The Term of the Lease is unchanged ending May 31, 2012. Tenant shall have the right to renew this Lease for one (1) five (5) year Renewal Period under the same terms and conditions of the base Lease with the exception that the starting rent for the period shall be two percent (2%) higher than the previous years rent. The Lease shall automatically extend for the Renewal Period unless Tenant shall have given Landlord written notice at least ninety (90) days prior to the end of the initial term of its intention to terminate the Lease at the end of the initial ten (10) year term.
6. Fixed Annual Minimum Rent. The Annual Minimum Rent shall increase by two percent (2%) annually over the prior years Annual Minimum Rent as shown on
attached Schedule A6-1.
7. Tenants Share of Expenses. For the purposes of Section 7, Tenants Share shall be adjusted to include the additional area as shown below. Furthermore, the Reimbursable Property Management Fee of $0.35 per rentable square foot shall increase by 3% per rentable square foot annually, effective January 1, 2011.
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Approx. |
|
ESTIMATED EXPENSES |
| |||||||
Initial Term |
|
RSF |
|
per RSF |
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Annual |
|
Monthly |
| |||
Last 8 months of Year |
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|
|
|
|
|
|
|
| |||
9 |
|
13,478 |
|
$ |
5.24 |
|
$ |
47,083.12 |
|
$ |
5,885.39 |
|
8. Effective Date. The effective date for Tenants increased space and rental payments shall be on the first to occur of (a) the date on which Tenant takes occupancy of or commences business at the premises, or (b) the date of substantial completion, being the date when a certificate of occupancy for the premises is issued by the applicable municipal authority, or (c) October, 1, 2010.
9. Interior Improvements. The interior improvements to be performed by Tenants contractor in a form and manner acceptable to Landlord. Landlord shall approve plans and drawings prior to the improvements commencing.
10. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 19th day of October, 2010.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
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LANDLORD: |
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Wyomissing Professional Center II, |
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Limited Partnership, a Pennsylvania limited |
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partnership, by its General Partner, Wyomissing |
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Professional Center II, Inc. |
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By: |
/s/ Peter W. Carlino |
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Peter W. Carlino, President |
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TENANT: | |||
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Penn National Gaming, Inc., a Pennsylvania corporation | |||
WITNESS: |
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By: |
/s/ Susan M. Montgomery |
By: |
/s/ Robert S. Ippolito | |
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|
| |
Name: |
Susan M. Montgomery |
Name: |
Robert S. Ippolito | |
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| |
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Title: |
VP/Sec/Treas | |
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SCHEDULE A6-1
ANNUAL MINIMUM RENT
Rentable Square Feet (RSF) |
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|
|
13,478 |
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|
|
|
|
|
|
|
|
Annual Escalation |
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|
|
2.0 |
% |
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|
|
|
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|
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|
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|
|
|
Minimum |
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Monthly |
|
Annual |
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|
|
|
Lease |
|
|
|
Rent per |
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Minimum |
|
Minimum |
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|
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Period |
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Year |
|
RSF |
|
RSF |
|
Rent |
|
Rent |
| |||
Last 8 months of 9th Year of Initial Term |
|
10/1/10 to 5/31/11 |
|
9 |
|
13,478 |
|
$ |
15.23 |
|
$ |
17,105.83 |
|
$ |
136,846.62 |
* |
Last Year of Initial Term |
|
6/1/11 to 5/31/12 |
|
10 |
|
13,478 |
|
$ |
15.54 |
|
$ |
17,454.01 |
|
$ |
209,448.12 |
|
* This annual minimum rent table includes the increase in rentable square feet from 9,909 to 13,478, which increase in rentable square feet will become effective October 1, 2010 and remain in effect for the balance of the 9th Lease Year consisting of 8 months and every year thereafter.
FOURTH LEASE AMENDMENT
THIS FOURTH LEASE AMENDMENT (the Amendment) made this 25th day of May, 2012, between Penn National Gaming, Inc., a Pennsylvania corporation, hereinafter called Tenant, having its principal place of business at 825 Berkshire Boulevard, Wyomissing, PA 19610 and Wyomissing Professional Center II, Limited Partnership (855), a Pennsylvania limited partnership, hereinafter called Landlord, having its principal place of business at 875 Berkshire Boulevard, Suite 102, Wyomissing, Pennsylvania 19610.
WITNESSETH:
The Tenant and the Landlord have executed a Lease Agreement dated January 25, 2002 which includes Exhibits A, B, C, E and F, a Commencement Agreement thereto dated May 23, 2002, a First Lease Amendment thereto dated December 4, 2002, a Second Amendment dated January 29, 2003, and a Third Lease Amendment dated October 19, 2010 (collectively, the Lease) relating to the Leased Premises located at 855 Berkshire Boulevard, Suite 100, Wyomissing, Pennsylvania 19610. The original Lease premises totaled 4,388 rentable square feet which square footage was increased by an additional 5,521 rentable square feet via the First Lease Amendment for a total of 9,909 rentable square feet and an adjacent space consisting of 3,569 rentable square feet for a total leased premises of 13,478 rentable square feet which was added to the premises via the Third Lease Amendment. The parties desire to include an additional, adjacent space consisting of 4,011 rentable square feet for a total leased premises of 17,489 rentable square feet.
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord, and Tenant agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease. Except to the extent to which the provisions of this Amendment modify the provisions of the Lease, the provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition which are defined in the Lease shall have the meanings set forth in the Lease.
4. Leased Premises. The defined leased premises shall consist of a total space of 17,489 rentable square feet.
5. Term of Lease. Tenant desires to exercise its right to renew this Lease for one (1), seven (7) year Renewal Period under the same terms and conditions of the base Lease except as modified herein.
6. Fixed Annual Minimum Rent. The Annual Minimum Rent shall increase by two and one half percent (2.5%) annually over the prior years Annual Minimum Rent and shall be adjusted to include the additional, adjacent area as shown on the table below.
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ANNUAL |
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MINIMUM |
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RENT |
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per |
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Renewal Period |
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RSF |
|
RSF |
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Annual |
|
Monthly |
| |||
6/1/12-5/31/13 |
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17,489 |
|
$ |
16.00 |
|
$ |
279,824.00 |
|
$ |
23,318.67 |
|
6/1/13-5/31/14 |
|
17,489 |
|
$ |
16.40 |
|
$ |
286,819.60 |
|
$ |
23,901.63 |
|
6/1/14-5/31/15 |
|
17,489 |
|
$ |
16.81 |
|
$ |
293,990.09 |
|
$ |
24,499.17 |
|
6/1/15-5/31/16 |
|
17,489 |
|
$ |
17.23 |
|
$ |
301,335.47 |
|
$ |
25,111.29 |
|
6/1/16-5/31/17 |
|
17,489 |
|
$ |
17.66 |
|
$ |
308,855.74 |
|
$ |
25,737.98 |
|
6/1/17-5/31/18 |
|
17,489 |
|
$ |
18.10 |
|
$ |
316,550.90 |
|
$ |
26,379.24 |
|
6/1/18-5/31/19 |
|
17,489 |
|
$ |
18.55 |
|
$ |
324,420.95 |
|
$ |
27,035.08 |
|
7. Tenants Share of Expenses. For the purposes of Section 4, Tenants Share shall be adjusted to include the additional area as shown below.
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|
|
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ESTIMATED EXPENSES |
| |||||||
Lease Year 11 |
|
RSF |
|
per RSF |
|
Annual |
|
Monthly |
| |||
last 7 months of calendar year 2012 |
|
17,489 |
|
$ |
4.62 |
|
$ |
47,132.89 |
|
$ |
6,733.27 |
|
8. Effective Date. The effective date for Tenants increased space and rental payments shall be on the first to occur of (a) the date on which Tenant takes occupancy of or commences business at the premises, or (b) the date of substantial completion, being the date when a certificate of occupancy for the premises is issued by the applicable municipal authority, or (c) June 1, 2012.
9. Interior Improvements. The interior improvements to be performed by Tenants contractor in a form and manner acceptable to Landlord. Landlord shall approve plans and drawings prior to the improvements commencing.
10. Binding effect. This Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Amendment of Lease Terms to be duly executed this 25th day of May, 2012.
THIS LEASE MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
|
LANDLORD: | |
|
Wyomissing Professional Center II, Limited Partnership, a Pennsylvania limited partnership, by its General Partner, Wyomissing Professional Center II, Inc. | |
| ||
| ||
| ||
|
| |
|
|
|
|
By: |
/s/ Peter W. Carlino |
|
|
Peter W. Carlino, President |
|
|
| ||
|
|
TENANT: | ||
|
|
| ||
|
|
Penn National Gaming, Inc., a Pennsylvania | ||
|
|
corporation | ||
WITNESS: |
|
| ||
|
|
| ||
By: |
/s/ Susan M. Montgomery |
|
By: |
/s/ Robert S. Ippolito |
|
|
|
| |
Name: |
Susan M. Montgomery |
|
Name: |
Robert S. Ippolito |
|
|
|
|
|
|
|
Title: |
VP/Sec/Treas |
Execution Version
FIFTH LEASE AMENDMENT
THIS FIFTH LEASE AMENDMENT (the Amendment) dated as of the 1st day of September, 2017 (the Effective Date) between Penn National Gamine. Inc., a Pennsylvania corporation (hereinafter called Tenant) having its principal place of business at 825 Berkshire Boulevard, Wyomissing, PA 19610 and Wyomissing Professional Center II, Limited Partnership (855), a Pennsylvania limited partnership (hereinafter called Landlord) having its principal place of business at 875 Berkshire Boulevard, Suite 102, Wyomissing, Pennsylvania 19610.
WITNESSETH:
WHEREAS, the Tenant and the Landlord have executed a Lease Agreement dated January 25, 2002 which includes Exhibits A, B, C, E and F, a Commencement Agreement thereto dated May 23, 2002, a First Lease Amendment thereto dated December 4, 2002, a Second Amendment dated January 29, 2003, a Third Lease Amendment dated October 19, 2010 and a Fourth Lease Amendment dated May 25, 2012 (hereafter collectively called the Lease) relating to the Lease premises located at 855 Berkshire Boulevard, Suite 100, Wyomissing, Pennsylvania 19610; and
WHEREAS, the Lease premises originally totaled 4,388 rentable square feet; and
WHEREAS, the Lease premises square footage was increased by an additional 5,521 rentable square feet via the First Lease Amendment, for a total of 9,909 rentable square feet; and
WHEREAS, the Lease premises square footage was increased by an additional 3,569 rentable square feet via the Third Lease Amendment, for a total of 13,478 rentable square feet; and
WHEREAS, the Lease premises square footage was increased by an additional 4,011 rentable square feet via the Fourth Lease Amendment, for a total of 17,489 rentable square feet; and
WHEREAS, the parties now desire to further increase the Lease premises to include an additional, adjacent space consisting of 3,000 rentable square feet, for a total of 20,489 rentable square feet;
NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY and in consideration of the mutual covenants set forth herein, the Landlord and Tenant enter this Amendment and agree as follows:
1. Incorporation. The recitals set forth above are incorporated herein by reference.
2. Amendment. This Amendment is an amendment to and shall be deemed an integral part of the Lease. Except to the extent to which the provisions of this Amendment modify the provisions of the Lease, the provisions of the Lease shall remain in full force and effect.
3. Defined Terms. All capitalized terms used in this Amendment without definition
which are defined in the Lease shall have the meanings set forth in the Lease.
4. Lease Premises. The Lease premises shall be increased by adding an adjacent 3,000 rentable square feet, making the total leased space 20,489 rentable square feet.
5. Term of Lease. The term of Lease is revised so as to run for seven (7) consecutive years beginning on September 1, 2017 and on August 31, 2024, all under the same terms and conditions except as otherwise modified herein.
6. Landlords Obligation upon Delivery. Landlord shall deliver the adjacent 3,000 rentable square feet of space fully demolished of existing partitions and floor coverings. In the event the adjacent 3,000 rentable square feet are not delivered by Landlord fully demolished of partitions and floor coverings on September 1, 2017, then Tenants payment of rent and estimated expenses shall abate, on the 3,000 rentable square feet of space only, until such date as the space is fully delivered.
7. Fixed Annual Minimum Rent. The Annual Minimum Rent shall increase annually effective each September 1st by two and one-half percent (2.5%) over the prior years Annual Minimum Rent, as shown on the table below:
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ANNUAL |
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MINIMUM |
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RENT |
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per |
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|
|
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Lease Period |
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RSF |
|
RSF |
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Annual |
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Monthly |
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09/01/17 - 08/31/18 |
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20,489 |
|
$ |
17.23 |
|
$ |
353,025.47 |
|
$ |
29,418.79 |
|
09/01/18 - 08/31/19 |
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20,489 |
|
$ |
17.66 |
|
$ |
361,851.11 |
|
$ |
30,154.26 |
|
09/01/19 - 08/31/20 |
|
20,489 |
|
$ |
18.10 |
|
$ |
370,897.38 |
|
$ |
30,908.12 |
|
09/01/20 - 08/31/21 |
|
20,489 |
|
$ |
18.55 |
|
$ |
380,169.82 |
|
$ |
31,680.82 |
|
09/01/21 - 08/31/22 |
|
20,489 |
|
$ |
19.02 |
|
$ |
389,674.06 |
|
$ |
32,472.84 |
|
09/01/22 - 08/31/23 |
|
20,489 |
|
$ |
19.49 |
|
$ |
399,415.92 |
|
$ |
33,284.66 |
|
09/01/23 - 08/31/24 |
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20,489 |
|
$ |
19.98 |
|
$ |
409,401.31 |
|
$ |
34,116.78 |
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8. Tenants Share of Expenses. Tenants Share of Expenses shall be adjusted to include the adjacent 3,000 rentable square feet, as shown on the table below:
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ESTIMATED EXPENSES |
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Lease Period |
|
RSF |
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per RSF |
|
remaining annual |
|
monthly |
| |||
09/01/17 - 12/31/17 |
|
20,489 |
|
$ |
4.62 |
|
$ |
31,553.06 |
|
$ |
7,888.27 |
|
9. Effective Date. The Effective Date of this Amendment shall be September 1, 2017.
10. Tenant Interior Improvements. The interior improvements to be performed by Tenants contractor in a form and manner acceptable to Landlord, Landlord shall approve plans and drawings prior to the improvements commencing.
11. Renewal Period. Tenant shall be provided one (1) option to renew for an additional seven (7) years by providing Landlord with not less than one hundred eighty (180) days advance written notice prior to August 31, 2024.
12. Binding Effect. This Amendment shall be binding upon, and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord and Tenant have caused this Fifth Lease Amendment to be duly executed upon the date first set forth above.
THIS AMENDMENT MUST BE EXECUTED FOR TENANT, IF A CORPORATION, BY THE PRESIDENT OR VICE PRESIDENT AND ATTESTED BY THE SECRETARY OR ASSISTANT SECRETARY, UNLESS THE BY-LAWS OR A RESOLUTION OF THE BOARD OF DIRECTORS SHALL OTHERWISE PROVIDE, IN WHICH EVENT A CERTIFIED COPY OF THE BY-LAWS OR RESOLUTION, AS THE CASE MAY BE, MUST BE FURNISHED TO LANDLORD.
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LANDLORD: | |
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Wyomissing Professional Center II, Limited Partnership (855), a Pennsylvania limited partnership, by its General Partner, Wyomissing Professional Center II, Inc. | |
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By: |
/s/ Peter W. Carlino |
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Peter W. Carlino, President |
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TENANT: | ||
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Penn National Gaming, Inc., a Pennsylvania | ||
ATTESTED: |
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corporation | ||
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By: |
/s/ Carl Sottosanti |
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By: |
/s/ Jay A. Snowden |
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Name: |
Carl Sottosanti, |
|
Name: |
Jay A. Snowden |
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its Secretary & General Counsel |
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Title: |
President & COO |