EXHIBIT 10.19
SHOPPING CENTER
LEASE
THIS AGREEMENT OF LEASE, made this
28 th day of February, 2005, by and between Jay F.
Wilks, Trustee under indenture dated December 20, 1976 by and
between Herbert Cashvan and Marvin Simon, as Settlors and Jay F.
Wilks, as Trustee (hereinafter called “Landlord”),
whose mailing address is 3400 Building, Suite 200, 397 Little
Neck Road, Virginia Beach, Virginia 23452, and telephone number is
(757) 340-3535, and Colonial Downs L.P., a Virginia Limited
Partnership ( hereinafter called “Tenant”), whose
mailing address is: 10515 Colonial Downs Parkway, New Kent,
Virginia, 23124 and telephone number is 804-966-7223.
W I T N E S S E T
H :
1.
Demised
Premises . Landlord
hereby leases and demises to Tenant and Tenant hereby takes and
leases from Landlord that certain store building (the
“Demised Premises”) which is deemed to be 16,875
rentable square feet of which 10,000 s.f. shall be leased
(“Leased Space”) and the remaining 6,875 s.f. shall be
reserved by Tenant for expansion (“Expansion Space”),
outlined in red on EXHIBIT A attached hereto, in Indian
River Shopping Center (the “Shopping Center”) having a
street address of 4301 Indian River Road, Chesapeake, VA .
The exact s.f. will be adjusted to actual following completion of a
dimensioned floor plan that is prepared by Tenant and approval by
Landlord. The Leased Space shall also include the use, without
additional charge, of a 10 foot by 40 foot area behind the Demised
Premises for the location of satellite dishes serving the Demised
Premises. The “Leased Space,” “Expansion
Space,” and the 10 foot by 40 foot satellite dish area shall
be constructed and/or improved by Tenant in accordance with the
specifications to be agreed upon prior to the end of the
Feasibility Period (defined herein) at Tenant’s expense.
Tenant is taking the “Leased Space and “Expansion
Space” in an “as is” condition.
2.
Term
. Except as otherwise provided in
paragraph 58 below, the term of this lease shall commence on the
earlier to occur of (i) October 1, 2005 or
(ii) the date Tenant opens for business, and shall end on
September 30, 2015 .
3.
Purpose
. The Demised Premises shall be used
for the purpose of conducting therein to operate a satellite
wagering facility in the Demised Premises. Tenant covenants and
agrees that at all times during the term hereof Tenant will
actively conduct such a business in the Demised Premises, and keep
the Demised Premises open for business not less than eight
(8) hours per day, Monday through Saturday) of the Shopping
Center, which hours shall be established by Tenant.
4.
Definition of
“Term” and “Lease Year”
. Except where the context clearly
requires otherwise, the word “term,” whenever used in
this lease with reference to the term hereof, shall be construed to
include any renewal term, as well as the original term. The words
“Lease Year,” as used in this lease, shall be construed
to mean each twelve (12) month period elapsing after (i) the
commencement of the term, if the term begins on the first day of a
month, or (ii) the first day of the month following the
commencement of the term if the term does not begin on the first
day of a month; provided, however, that the period of the term, if
any, beginning after the commencement of the last full twelve (12)
month Lease Year of this lease shall be deemed to be a “Lease
Year” even though it comprises less than twelve (12)
months.
1
5.
Base Rent
. Landlord reserves, and Tenant
covenants to pay to Landlord, without prior demand being made
therefore, as rent for the Demised Premises, the following minimum
base rent (the “Base Rent”) payable in equal monthly
installments as follows:
|
Years 1 – 5:
|
|
$7.00 psf
|
|
$5,833.34 per month
|
|
$70,000.00 per year
|
|
Years 6 – 10:
|
|
$8.00 psf
|
|
$6,666.67 per month
|
|
$80,000.00 per year
|
In addition, Tenant shall pay
Landlord, as rent for the Expansion Space, from the date of
commencement of the term hereof until and including
September 30, 2006, the amount of $1,719.00. Thereafter, if
Tenant elects to retain the Expansion Space, Tenant shall so advise
Landlord in writing on or before October 1, 2006, whereupon
such space shall, ipso facto , be deemed part of
the Leased Space and the Base Rent shall be increased as
follows:
10/1/06 – end of Lease year
5 $7.00 psf
$9,843.75 per month
$118,125.00 per year
Lease year 6 to Lease year
10 $8.00 psf
$11,250.00 per month
$135,000.00 per year
In the event Tenant does not elect
to retain the Expansion Space as aforesaid, the Base Rent shall
remain as set forth above and Tenant shall vacate and relinquish
the Expansion Space to Landlord who shall thereupon have the right
to lease the same to another tenant.
Each monthly installment of rent and
all other sums due Landlord by Tenant hereunder shall be paid to
Palms Associates on behalf of Landlord on the first day of each
month during the term at Suite 200, 3400 Building, 397 Little
Neck Road, Virginia Beach, Virginia 23452 or at such other place as
shall be designated in writing, from time to time, by
Landlord.
6.
Additional
Charges . Tenant
shall pay additional charges as follows:
CAM, Taxes and Insurance. Tenant
shall pay its actual pro-rata share of common area maintenance
charges (“CAM”) and insurance for the Leased Space,
provided, however, that such amount shall not exceed $2.00 (CAP)
per s.f. during the first year of the Lease. After that, as a
component of such CAP, CAM Charges shall not exceed $.50 per s.f.,
such amount to increase at the rate of CPI, while Insurance and
Taxes shall not be subject to the CAP. The current CAM charges are
currently estimated at $1.50 per square foot. . It is understood
that additional charges apply to the “Leased Space only at
inception and to the Expansion Space if and when it becomes
part of the Lease.
7.
Percentage Rent
- INTENTIONALLY DELETED
8.
Gross Sales
– INTENTIONALLY
DELETED
9.
Statement of Gross Sales and
Payment of Percentage Rent – INTENTIONALLY DELETED
10.
Tenant’s
Records -
INTENTIONALLY DELETED
11.
Late Payments
. Tenant covenants and agrees to pay
a Late Fee monthly, equal to the greater of One Hundred Dollars
($100.00) or ten percent ( 10%) of all rents and all other sums due
under this lease from the time said rents or sums accrue if they
are not received by Landlord within five (5) days after due,
Landlord expressly reserving all other rights and remedies provided
herein and/or by law in respect thereto. Tenant further agrees to
pay (or to reimburse Landlord promptly if Landlord elects to pay)
any and all costs and expenses incurred by Landlord in connection
with the collection of delinquent rents and/or the enforcement of
any of the provisions of this lease , including reasonable
attorneys’ fees. Tenant
2
further covenants and agrees to pay
Landlord a “bad check” or “returned check”
charge in the amount of Twenty-Five Dollars ($25.00) for each check
of Tenant dishonored by Tenant’s bank.
12.
Real Estate Taxes, Common
Areas and
Insurance
(a)
Tenant acknowledges that the parcel
of land on which the Demised Premises is located is a tax parcel
(“Landlord’s Parcel”) separate from the remainder
of the Shopping Center. Tenant agrees to pay to Landlord, as
additional rent contemporaneously with the payment of monthly
installments of Base Rent an amount equal to one twelfth of the
annual real estate taxes assessed against Landlord’s Parcel,
from time to time, including any special assessment, provided,
however, in the event Tenant does not elect to retain the Expansion
Space, then from and after October 1, 2006, Tenant shall only
be required to pay Landlord, on a monthly basis, an amount equal to
one twelfth of 59.5% (this is meant to be pro rata; Landlord shall
provide Tenant evidence of how this was calculated) of the annual
real estate taxes assessed against the Landlord’s Parcel,
from time to time, including any special assessment.
(b)
Tenant agrees to, and shall, pay to
Landlord, before any fine, penalty, interest or cost is added
thereto for the non-payment thereof, any tax that may be
levied, assessed or imposed, by way of license or otherwise, upon
the rent reserved herein and/or this lease and/or the Demised
Premises by any governmental authority acting under any present or
future law, statute, ordinance or the like.
(c)
Tenant agrees to pay to Landlord,
monthly as Additional Rent, a common area maintenance charge based
upon the gross square foot floor area of the Demised Premises as
Tenant’s Proportionate Share of the cost of maintaining the
Common Areas of the Shopping Center (hereinafter called
“Common Area Charge”). The Common Area Charge relates
to the total cost and expense incurred by Landlord in operating and
maintaining the Common Areas, including, without limitation,
gardening and landscaping of the Shopping Center, landscape
watering and sprinklers, parking lot pavement repairs and
maintenance and parking lot striping, sidewalk repairs and
maintenance, trash and rubbish and garbage removal in the event
Landlord provides dumpsters, roof repairs and maintenance, parking
lot lighting, Shopping Center signage repair and maintenance, snow
removal, storm water management fees and fees imposed by any
governmental body having jurisdiction and all costs, charges, and
expenses incurred by Landlord in connection with any charge of any
company providing electricity service, including, without
limitation to, maintenance, repair, installation, and service costs
associated therewith. The Common Area Charge shall also include ,
the cost of personnel to direct parking and to police the common
facilities and other general Common Area repairs. In addition, the
Common Area Charge shall also include Tenant payments for water and
sewerage charges, if the same is not individually metered by
Landlord, and the lighting of Tenant’s signage, if the same
is connected with the parking lot light meter or is paid by
Landlord. Landlord will submeter water for very high usage
tenants.
(d)
Landlord shall obtain and keep in
force during the term of this lease a policy or policies of
insurance, covering loss or damage to the Shopping Center, the
Common Areas and the building of which the Demised Premises
comprise a part, in an amount not less than eighty percent (80%) of
the replacement costs thereof, providing protection against all
perils included within the classifications of fire, extended
coverage, vandalism (exclusive of glass and doors), special
extended perils (all risk), together with public liability
insurance with established limits of coverage deemed appropriate by
Landlord for personal injury or injuries. Tenant agrees to pay to
Landlord, as Additional Rent, Tenant’s Proportionate Share of
Landlord’s insurance premium.
(e)
Landlord shall estimate
Tenant’s Proportionate Share of real estate taxes, Common
Area Charges and insurance premiums on the basis of periods of
twelve (12) months, commencing and ending on such dates as
may be designated by Landlord, one-twelfth (1/12th) of which
shall be paid monthly by Tenant as Additional Rent. Landlord
may revise its estimate of such costs at any time. Tenant,
upon notice, shall adjust its monthly installments during the
remainder of the period to reflect such revised
3
estimate. After the end of each
designated twelve (12) month period, Landlord shall furnish Tenant
a statement of the actual costs for the period, and there shall be
an adjustment between Landlord and Tenant, with a payment to
Landlord or a credit to Tenant, as the case may be, to the end
that Landlord shall receive the entire amount of Tenant’s
Proportionate Share for such period. Tenant, at its own cost and
expense, has the right to audit the books and records of Landlord
regarding these charges; provided, however, if the actual charges
are more than 5% less than those billed to Tenant, Landlord shall
pay for such audit.
13.
Trade Fixtures
. Tenant agrees, at its own cost and
expense, to fixture the Demised Premises with new trade fixtures.
All trade fixtures installed in the Demised Premises by Tenant
shall remain Tenant’s property; provided, however, that
nothing herein shall be deemed to affect Landlord’s remedy of
distraint. Tenant agrees to repair (or to reimburse Landlord for
the cost of repairing) any damage to the Demised Premises
occasioned by the installation or removal of said trade
fixtures.
14.
Acceptance of
Premises . Tenant
hereby agrees to accept the Demised Premises from Landlord as they
are found by Tenant on the date hereof and shall have no legal or
equitable remedy based either upon a claim that Landlord failed to
deliver possession in accordance with this lease or based on a
claim that the size, location, layout, dimensions or construction
of the Demised Premises or the parking lots or other Common Areas
were not completed and/or furnished in accordance with the terms of
this lease.
15.
Common Areas
. Tenant, its customers, employees
and invitees shall have the right to use and enjoy free of charge,
in common with Landlord, other tenants and their customers,
employees and invitees, the parking areas, approaches, sidewalks,
entrances, exits and roadways (hereinafter collectively called the
“Common Areas”) which Landlord agrees to provide for
the reasonable operation of the Shopping Center. It is expressly
understood that the Common Areas are intended primarily for the use
by customers of the stores in the Shopping Center, and Tenant
accordingly agrees that its employees will not use the Common Areas
for the parking or storage of any automobile, truck or any other
vehicle owned or used by any of its employees, except as
may be approved in writing by Landlord. Tenant further agrees
that Landlord reserves the right, in its sole discretion, to
designate specific parking area(s) for the use by the employees
and/or customers of Tenant and if so designated, Tenant shall
instruct its employees and/or customers, as the case may be,
to park in any such designated areas. In order to assist Landlord
in the enforcement of the provisions of this paragraph, Tenant
agrees that within ten (10) days after being requested so to
do, Tenant will furnish Landlord a written statement containing the
license plate numbers of all employees, agents, and representatives
employed by Tenant in or about the Demised Premises. Tenant shall
not park, or permit to be parked, any delivery vehicles in the
Common Areas intended for the use by customers of the stores in the
Shopping Center, nor permit merchandise delivery from such Common
Areas if delivery access and loading and unloading zones are
provided by Landlord. Landlord covenants that, at all times during
the term hereof, it will maintain the Common Areas in a good
condition of repair and adequately lighted and paved, and that,
except as otherwise provided in paragraph 33 below, there will be
at least the minimum number of parking spaces sufficient to satisfy
governmental requirements and in no event shall the number of
parking spaces at the Shopping Center existing as of the date of
this lease be reduced by more than twenty (20) spaces during the
term or any extension thereof. Anything in this paragraph to the
contrary notwithstanding, Landlord expressly reserves the right,
from time to time, (i) to construct other buildings and/or
enlarge existing buildings on or over the Common Areas so long as
the number of parking spaces is not reduced by more than twenty
(20) spaces, and (ii) increase, reduce, modify or alter the
dimensions and locations of roadways, parking lots, sidewalks and
buildings provided such changes, additions or reductions do not
unreasonably interfere with Tenant’s use of the Demised
Premises or reduce the number of parking spaces at the Shopping
Center by more than twenty (20) spaces. Notwithstanding anything to
the contrary contained herein, Tenant shall have the exclusive use
of the parking (with the right to mark it for such purpose) on the
side and in the back of the Building as outlined on Exhibit A
.
4
16.
Utility
Deregulation.
(a)
Landlord Control
Selection.
Landlord has advised Tenant that
presently Virginia Power (“Electric Service Provider”)
is the utility company selected by Landlord to provide electricity
service for the Demised Premises. Notwithstanding the foregoing, if
permitted by Law, Landlord shall have the right that any time and
from time to time during the Term to either contract for service
from a different company or companies providing electricity service
(each such company shall hereinafter be referred to as an
“Alternate Service Provider”) or continue to contract
for service from the Electric Service Provider. In such an event,
there shall be no interruption in the electric service to the
Demised Premises as a result of or during such change in
provider.
(b)
Tenant shall Give Landlord
Access. Tenant shall
cooperate with Landlord, the Electric Service Provider, and any
Alternate Service Provider at all times and, as reasonable
necessary, shall allow Landlord, Electric Service Provider, and any
Alternate Service Provider reasonable access to all electric lines,
feeders, risers, wiring, and any other machinery within the Demised
Premises.
(c)
Landlord Not Responsible for
Interruption of Service. Except if caused by Landlord’s negligence
or willful misconduct, Landlord shall in no way be liable or
responsible for any loss, damage, or expense that Tenant
may sustain or incur by reason of any change, failure,
interference, disruption, or defect in the supply or character of
the electric energy furnished to the Premises, or if the quantity
or character of the electric energy supplied by the Electric
Service Provider or any Alternate Service Provider is no longer
available or suitable for Tenant’s requirements, and no such
change, failure, defect, unavailability, or unsuitability shall
constitute an actual or constructive eviction, in whole or in part,
or entitle Tenant to any abatement or diminution of rent, or
relieve Tenant from any of its obligations under the
Lease.
17.
Landlord’s Repairs and
Right of Entry .
Landlord shall be responsible for cleaning and maintaining the
Common Areas in a manner similar to other Shopping Centers in the
area of the same quality and size. In addition, Landlord shall
be responsible for maintenance and repair of the structure of the
building, including the roof, walls, and foundations. Landlord
covenants that it will, with reasonable dispatch after being
notified in writing by Tenant of the need therefore, make such
repairs to the Common Areas and outside utility lines and to the
exterior of the Demised Premises (including the gutters, downspouts
and outside walls and parking, sidewalks and grass
surfaces on the Property , but excepting all glass and doors),
as may be necessary to keep the same in a good condition and
repair; provided, however, that if the need for such repair is
occasioned by the casualty resulting from negligence or willful act
of Tenant, or any of its agents, employees, or contractors, such
repairs shall be made by Landlord, but the cost of such repairs
shall be charged to and be promptly paid for by Tenant subject to
Tenant being given credit for any money Landlord actually receives
in respect to such damage from its insurance. Anything in the
foregoing to the contrary notwithstanding, Landlord shall have no
liability whatsoever for damage or injury to person or property
occasioned by its failure to make any such repair (e.g., injury
damage to property resulting from leaks caused by a defect in the
roof, outside walls, gutters and/or downspouts) unless, within a
reasonable time after being notified in writing by Tenant of the
need therefore, Landlord shall have failed to make such repair and
such failure shall not have been due to any cause beyond
Landlord’s control, including, without limitation, strikes
and/or inability to obtain materials and/or equipment at reasonable
prices. Landlord, its agents, employees and contractors, shall have
the right after giving Tenant 24 hours notice except in the case of
an emergency, from time to time, to enter and use insofar as
may be necessary the Demised Premises for the purpose of
making any of the aforesaid repairs. Tenant shall not be entitled
to any reduction in rent or to any claim for damages by reason of
any inconvenience, annoyance, and/or injury to business arising out
of any repairs made by Landlord pursuant to this paragraph. Tenant
will permit Landlord or its representatives (i) to enter the
Demised Premises during the last six months of the term for the
purpose of exhibiting the Demised Premises to prospective
tenants.
5
18.
Tenant’s
Repairs . Tenant
covenants that it will, at all times during the term hereof and at
its own cost and expense, keep the Demised Premises (including,
without limitation, the interior and rooftop heating and air
conditioning system, the floors, the finish and related work to be
added by Tenant to the exterior walls, toilets, sprinkler system,
signage, interior pipes, plumbing, wires and conduits, and electric
lines, windows, doors, glass, fixtures and equipment) in a good
condition of repair and in good working order (making such repairs
and replacements as may be necessary), unless the need
therefore is occasioned by fire or other casualty covered by
Landlord’s fire and extended coverage insurance policy
(exclusive of any damage to glass or doors), in which event such
repair and replacement shall be an expense of Landlord to the
extent of such coverage. Tenant agrees to be responsible and liable
for any freezing in pipes and/or within plumbing fixtures within
and serving the Demised Premises and shall pay for the repair of
any damage caused thereby. In this regard, Tenant shall keep the
Demised Premises at a sufficient temperature to prevent such
freezing. Tenant understands and agrees that Tenant (not Landlord)
shall be responsible for any condensation in or around the duct
work used by heating and/or air conditioning.
19.
Tenant’s Care of
Sidewalks, etc. Tenant covenants and agrees that it will, at all
times during the term hereof, keep the Demised Premises and the
sidewalk immediately adjoining the Demised Premises clean and free
from obstruction, rubbish, dirt, snow and ice. Tenant shall place
all trash, rubbish and garbage in a proper closed receptacle at the
rear entrance of the Demised Premises and shall pay all costs
incident to the removal thereof.
20.
Tenant’s Failure to
Repair and Remove Debris, etc Tenant agrees that if it fails to
perform any obligation placed upon it by either paragraph 17
or paragraph 18 of this lease, Landlord, in addition to other
remedies provided by law and/or this lease, after giving Tenant
five (5) days written notice may correct (or have
corrected) the default at the cost and expense of
Tenant.
21.
Miscellaneous Covenants of
Tenant . Tenant
covenants that: it will comply with all Federal, State and/or
municipal laws, ordinances and regulations relating to its business
conducted in the Demised Premises; it will promptly pay for all
electricity, gas, water and other utilities consumed on, and all
sewage disposal charges assessed against, the Demised Premises and
all required meter deposits and connection fees relating to such
utilities; it will promptly pay for lighting the portion of the
marquee in front of the Demised Premises if used for Tenant’s
signage; it will not use the name of the Shopping Center for any
purpose other than as the address of its business to be conducted
in the Demised Premises; it will not use, or permit to be used, the
Demised Premises for any illegal or purpose; it will conduct its
business in such manner as will be in keeping with the character
and reputation of the Shopping Center; it will comply with the
Rules and Regulations pertaining to the Shopping Center
atta
