SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): December 12, 1997
Clearview Cinema Group, Inc.
(Exact name of registrant as specified in charter)
Delaware 001-13187 22-3338356
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
7 Waverly Place 07940
Madison, New Jersey (Zip code)
(Address of principal executive
offices)
Registrant's telephone number,
including area code: (973) 377-4646
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Item 2. Acquisition or Disposition of Assets.
On December 12, 1997, Clearview Cinema Group, Inc. (the "Company"),
together with its wholly-owned subsidiaries CCC Bellevue Cinema Corp., CCC Cedar
Grove Cinema Corp., CCC Kin Mall Cinemas, Inc. and CCC Middlebrook Cinema Corp.
(each referred to herein as a "Subsidiary" and collectively as the
"Subsidiaries"), purchased from The New Bellevue Theater Corp., C.J.M.
Enterprises, Inc., Kin Mall Cinemas, Inc. and Middlebrook Galleria Cinemas, Inc.
(each referred to herein as a "Seller" and collectively as the "Sellers") and
Jesse Sayegh ("Mr. Sayegh"), the sole shareholder of each of the Sellers,
certain assets comprising the operations of four multi-plex theaters (the "CJM
Theaters") with a total of 27 screens located in Essex County, Morris County,
and Monmouth County, New Jersey. The purchase of the CJM Theaters was effected
pursuant to an agreement and plan of reorganization and three asset purchase
agreements. The aggregate purchase price for each of the CJM Theaters was
determined by arm's length negotiations between the Sellers, Mr. Sayegh and the
Company. The Company intends to continue to use the purchased assets in the
operation of multi-plex theaters.
Pursuant to an Agreement and Plan of Reorganization dated as of November
14, 1997 (the "Agreement and Plan of Reorganization") among the Company, CCC
Bellevue Cinema Corp. as the Subsidiary, The New Bellevue Theater Corp. as the
Seller and Mr. Sayegh, (i) the Seller transferred to the Subsidiary certain
furniture, fixtures, equipment and personal property related to the operation of
a four-screen theater located in Upper Montclair, New Jersey and (ii) Mr. Sayegh
granted to the Subsidiary a leasehold interest in the real property (the
"Bellevue Lease") on which that theater is located. In exchange for the assets
transferred, the Company delivered to the Seller 62,500 shares of its Common
Stock, $.01 par value (the "Common Stock"), which represented the number of
shares with an average market value of $750,000 calculated on the last trading
day immediately prior to the date of closing. The parties agreed on that date
that the price per share was $12. The Agreement and Plan of Reorganization and
the Bellevue Lease are attached hereto as Exhibit 2.01 and Exhibit 10.01,
respectively, and are incorporated by reference herein in their entirety.
In connection with the closing of the Agreement and Plan of
Reorganization, the Seller and Mr. Sayegh entered into a Voting Trust Agreement
and a Registration Rights Agreement, each dated as of December 12, 1997,
relating to the shares of Common Stock issued to the Seller as consideration
under the Agreement and Plan of Reorganization. Pursuant to the Voting Trust
Agreement with A. Dale Mayo, the Chairman, President and Chief Executive Officer
of the Company, acting as Trustee (the "Trustee "), the Trustee has the power to
vote such shares and all dividends and distributions with respect to such shares
will be remitted by the Trustee to the Seller. A copy of the Voting Trust
Agreement is attached hereto as Exhibit 9.01 and is incorporated by reference
herein in its entirety.
Under the Registration Rights Agreement, the Company granted the Seller
and Mr. Sayegh incidental registration rights to participate and sell the shares
of the Common Stock received by the Seller pursuant to the Agreement and Plan of
Reorganization in a registered offering being conducted by the Company, with the
costs and expenses of such registration to be borne by the Company. A copy of
the Registration Rights Agreement is attached hereto as Exhibit 10.02 and is
incorporated by reference herein in its entirety.
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Pursuant to an Asset Purchase Agreement dated as of November 14, 1997
among the Company, CCC Cedar Grove Cinema Corp. as the Subsidiary, C.J.M.
Enterprises, Inc. as the Seller and Mr. Sayegh, as amended by Amendment No. 1 to
Asset Purchase Agreement dated as of December 12, 1997 (together, the "Cedar
Grove Agreement"), the Subsidiary purchased a leasehold interest and certain
furniture, fixtures, equipment and personal property related to the operation of
a five-screen theater located in Cedar Grove, New Jersey, and assumed certain
liabilities relating to the lease of that theater pursuant to an Assignment and
Assumption and Consent to Assignment of Lease dated December 12, 1997 (the
"Cedar Grove Lease"). The Cedar Grove Agreement and the Cedar Grove Lease are
attached hereto as Exhibit 2.02 and Exhibit 10.03, respectively, and are
incorporated by reference herein in their entirety.
The aggregate purchase price payable under the Cedar Grove Agreement was
$3.25 million and was paid in consideration consisting of: (i) $3.04 million in
cash and (ii) the right to receive, under certain circumstances, 210 shares of
Class B Nonvoting Cumulative Reedemable Preferred Stock (the "Class B Preferred
Stock") of the Company by March 31, 1998. If prior to March 31, 1998, the
Company consummates the issuance of certain debt securities to institutional
investors with an aggregate offering price of at least $70 million, then in lieu
of issuing the shares of Class B Preferred Stock, the Company will pay the
Seller $210,000 in cash plus interest accrued thereon at the annual rate of 10
1/2%.
Pursuant to an Asset Purchase Agreement dated as of November 14, 1997
among the Company, CCC Kin Mall Cinema Corp. as the Subsidiary, Kin Mall
Cinemas, Inc. as the Seller, C.J.M. Enterprises, Inc. and Mr. Sayegh, as amended
by Amendment No. 1 to Asset Purchase Agreement dated as of December 12, 1997
(together, the "Kin Mall Agreement"), the Subsidiary purchased a leasehold
interest and certain furniture, fixtures, equipment and personal property
related to the operation of an eight-screen theater located in Kinnelon, New
Jersey and assumed certain liabilities relating to the lease of that theater
pursuant to an Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 (the "Kin Mall Lease"). The Kin Mall Agreement and the
Kin Mall Lease are attached hereto as Exhibit 2.03 and Exhibit 10.04,
respectively, and are incorporated by reference herein in their entirety.
The aggregate purchase price payable under the Kin Mall Agreement was
$3.25 million and was paid in consideration consisting of: (i) $2.5 million in
cash and (ii) the right to receive, under certain circumstances, 750 shares of
Class B Preferred Stock by December 12, 1999. If the Company consummates the
issuance of certain debt securities to institutional investors with an aggregate
offering price of at least $70 million, then in lieu of issuing the shares of
Class B Preferred Stock, the Company will pay the Seller $750,000 in cash plus
interest accrued thereon at the annual rate of 10 1/2%. However, the right to
receive either the 750 shares of Class B Preferred Stock or the $750,000 in cash
will be terminated if prior to December 12, 1999 all material governmental
approvals to construct a new theater complex in a specified location have been
obtained.
Pursuant to an Asset Purchase Agreement dated as of November 14, 1997
among the Company, CCC Middlebrook Cinema Corp. as the Subsidiary, Middlebrook
Galleria Cinemas, Inc. as the Seller and Mr. Sayegh, as amended by Amendment No.
1 to Asset Purchase Agreement dated as of December 12, 1997 (together, the
"Middlebrook Agreement"), the
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<PAGE>
Subsidiary purchased a leasehold interest and certain furniture, fixtures,
equipment and personal property related to the operation of a five-screen
theater located in Ocean Township, New Jersey and assumed certain liabilities
relating to the lease of that theater pursuant to an Assignment and Assumption
and Consent to Assignment of Lease dated December 12, 1997 (the "Middlebrook
Lease"). The Middlebrook Agreement and the Middlebrook Lease are attached hereto
as Exhibit 2.04 and Exhibit 10.05, respectively, and are incorporated by
reference herein in their entirety.
The aggregate purchase price payable under the Middlebrook Agreement was
$2.25 million and was paid in consideration consisting of: (i) $1.71 million in
cash and (ii) the right to receive, under certain circumstances, 540 shares of
Class B Preferred Stock by March 31, 1998. If prior to March 31, 1998, the
Company consummates the issuance of certain debt securities to institutional
investors with an aggregate offering price of at least $70 million, then in lieu
of issuing the shares of Class B Preferred Stock, the Company will pay the
Seller $540,000 plus interest accrued thereon at the annual rate of 10 1/2%.
Pursuant to each of the Cedar Grove Agreement, Kin Mall Agreement and
Middlebrook Agreement, Mr. Sayegh granted to the Company for a period of three
years a right of first refusal to purchase any movie theater property proposed
to be sold by Mr. Sayegh. Such right of first refusal expires on December 12,
2000.
The Company and the Subsidiaries paid the cash consideration for the CJM
Theaters from funds borrowed by the Company and its wholly-owned subsidiaries
pursuant to an Amended and Restated Credit Agreement dated as of September 12,
1997 (the "Credit Agreement"), as amended by the First Amendment to the Amended
and Restated Credit Agreement dated as of December 12, 1997 (the "First
Amendment"). The First Amendment increased the Company's credit facility from
$30 million to $36 million and provided for the participation by The Bank of New
York in the credit facility for an aggregate amount of $10 million. The Credit
Agreement was previously filed as Exhibit 10.01 to the Company's quarterly
report on Form 10-QSB for the quarter ended June 30, 1997 filed on September 26,
1997 and is incorporated by reference herein in its entirety. The First
Amendment is attached hereto as Exhibit 10.07 and incorporated by reference
herein in its entirety.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The Company intends to file the financial statements required within
60 days of the initial filing of this report.
(b) Pro forma financial information.
The Company intends to file the pro forma financial information
required within 60 days of the initial filing of this report.
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(c) Exhibits.
2.01 Agreement and Plan of Reorganization dated as of November 14,
1997 by and among the Clearview Cinema Group, Inc., CCC
Bellevue Cinema Corp., The New Bellevue Theater Corp. and
Jesse Sayegh.
2.02 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Cedar Grove Cinema
Corp., C.J.M. Enterprises, Inc. and Jesse Sayegh, as amended
by Amendment No. 1 to Asset Purchase Agreement dated as of
December 12, 1997.
2.03 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Kin Mall Cinema Corp.,
Kin Mall Cinemas, Inc., C.J.M. Enterprises, Inc. and Jesse
Sayegh, as amended by Amendment No. 1 to Asset Purchase
Agreement dated as of December 12, 1997.
2.04 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Middlebrook Cinema
Corp., Middlebrook Galleria Cinemas, Inc. and Jesse Sayegh, as
amended by Amendment No. 1 to Asset Purchase Agreement dated
as of December 12, 1997.
9.01 Voting Trust Agreement dated as of December 12, 1997 by and
among The New Bellevue Theater Corp., Jesse Sayegh and A. Dale
Mayo, as Trustee.
10.01 Lease dated December 1997 between Jesse Y. Sayegh and CCC
Bellevue Cinema Corp. together with Rider to Lease, as amended
by Rider Attachment to Lease dated December 12, 1997.
10.02 Registration Rights Agreement dated as of December 12, 1997 by
and among Clearview Cinema Group , Inc., The New Bellevue
Theater Corp. and Jesse Sayegh.
10.03 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC Cedar
Grove Cinema Corp., Clearview Cinema Group, Inc. and Leonard
Diener Investment Company, assigning that certain Lease
Agreement by and between Beatrice Diener d/b/a/ Leonard
Diener Investment Company and Jessee Sayegh dated May 29,
1990, as amended by letter dated March 26, 1997.
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10.04 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC Kin
Mall Cinema Corp., Clearview Cinema Group, Inc. and C.J.M.
Enterprises, Inc., assigning that certain Lease by and between
Lester M. Entin Associates and C.J.M. Enterprises, Inc. dated
December 17, 1991, as amended by First Amendment to lease
dated December 31, 1996.
10.05 Assignment and Assumption and Consent to Assignment of Lease
dated December 12, 1997 by and among Jesse Sayegh, CCC
Middlebrook Cinema Corp., Clearview Cinema Group, Inc.,
Westwood Oaks, Inc. and Westwood Oaks Associates, assigning
that certain Lease by and between Westwood Oaks, Inc. and
Jesse Sayegh dated September 28, 1993, together with Rider LC
to Lease.
10.06 Amended and Restated Credit Agreement dated as of September
12, 1997 by and among Clearview Cinema Group, Inc., its
wholly-owned subsidiaries and The Provident Bank.
10.07 First Amendment to Amended and Restated Credit Agreement dated
as of December 12, 1997 by and among Clearview Cinema Group,
Inc., et al. and The Provident Bank.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLEARVIEW CINEMA GROUP, INC.
By:/s/ A. Dale Mayo
--------------------------------
A. Dale Mayo
Title: Chairman of the Board, President and
Chief Executive Officer
Date: December 22, 1997
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Exhibit Index
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DOCUMENT PAGE NO.
----------- -------- --------
<S> <C> <C>
2.01 Agreement and Plan of Reorganization dated as of November 14, 1997
by and among the Clearview Cinema Group, Inc., CCC Bellevue Cinema
Corp., The New Bellevue Theater Corp. and Jesse Sayegh.
2.02 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Cedar Grove Cinema Corp.,
C.J.M. Enterprises, Inc. and Jesse Sayegh, as amended by Amendment
No. 1 to Asset Purchase Agreement dated as of December 12, 1997.
2.03 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Kin Mall Cinema Corp., Kin
Mall Cinemas, Inc., C.J.M. Enterprises, Inc. and Jesse Sayegh, as
amended by Amendment No. 1 to Asset Purchase Agreement dated as of
December 12, 1997.
2.04 Asset Purchase Agreement dated as of November 14, 1997 by and
among Clearview Cinema Group, Inc., CCC Middlebrook Cinema Corp.,
Middlebrook Galleria Cinemas, Inc. and Jesse Sayegh, as amended by
Amendment No. 1 to Asset Purchase Agreement dated as of December
12, 1997.
9.01 Voting Trust Agreement dated as of December 12, 1997 by and among
The New Bellevue Theater Corp., Jesse Sayegh and A. Dale Mayo, as
Trustee.
10.01 Lease dated December 1997 between Jesse Y. Sayegh and CCC Bellevue
Cinema Corp. together with Rider to Lease, as amended by Rider
Attachment to Lease dated December 12, 1997.
10.02 Registration Rights Agreement dated as of December 12, 1997 by and
among Clearview Cinema Group, Inc., The New Bellevue Theater Corp.
and Jesse Sayegh.
10.03 Assignment and Assumption and Consent to Assignment of Lease dated
December 12, 1997 by and among Jesse Sayegh, CCC Cedar Grove
Cinema Corp., Clearview Cinema Group, Inc. and Leonard Diener
Investment Company, assigning that certain Lease Agreement by and
between Beatrice Diener d/b/a/
8
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Leonard Diener Investment Company and Jessee Sayegh dated May
29, 1990, as amended by letter dated March 26, 1997.
10.04 Assignment and Assumption and Consent to Assignment of Lease dated
December 12, 1997 by and among Jesse Sayegh, CCC Kin Mall Cinema
Corp., Clearview Cinema Group, Inc. and C.J.M. Enterprises, Inc.,
assigning that
9
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certain Lease by and between Lester M. Entin Associates and C.J.M.
Enterprises, Inc. dated December 17, 1991, as amended by First
Amendment to lease dated December 31, 1996.
10.05 Assignment and Assumption and Consent to Assignment of Lease dated
December 12, 1997 by and among Jesse Sayegh, CCC Middlebrook
Cinema Corp., Clearview Cinema Group, Inc., Westwood Oaks, Inc.
and Westwood Oaks Associates, assigning that certain Lease by and
between Westwood Oaks, Inc. and Jesse Sayegh dated September 28,
1993, together with Rider LC to Lease.
10.06 Amended and Restated Credit Agreement, by and among Clearview Incorporated by reference
Cinema Group, Inc., its wholly-owned subsidiaries and The from Exhibit 10.01 to the
Provident Bank, dated September 12, 1997. Form 10-QSB for the
Quarter ended June 30,
1997 filed on September
26, 1997.
10.07 First Amendment to Amended and Restated Credit Agreement dated as
of December 12, 1997 by and among Clearview Cinema Group, Inc., et
al. and The Provident Bank.
</TABLE>
10
Agreement and Plan of Reorganization
Dated as of November 14, 1997
Among
Jesse Sayegh
The New Bellevue Theater Corp.
CCC Bellevue Cinema Corp.
and
Clearview Cinema Group, Inc.
<PAGE>
ARTICLE I. DEFINITIONS; CONSTRUCTION........................................1
1.1. DEFINITIONS...........................................................1
1.2. CONSTRUCTION..........................................................5
ARTICLE II. THE TRANSACTION..................................................5
2.1. EXCHANGE OF ASSETS....................................................5
2.2. CASH..................................................................6
2.3. RETAINED ASSETS......................................................6
2.4. [NOT USED]...........................................................6
2.5. RETAINED LIABILITIES..................................................6
2.6. EXCHANGE OF STOCK FOR ASSETS..........................................6
2.7. CLOSING...............................................................7
2.8. TITLE.................................................................7
2.9. CERTAIN CONSENTS......................................................7
2.10. CCG SHARES...........................................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR....................8
3.1. ORGANIZATION..........................................................8
3.2. AUTHORIZATION; ENFORCEABILITY.........................................8
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS..........................8
3.4. CINEMA INCOME STATEMENTS..............................................9
3.5. NO CHANGES............................................................9
3.6. TAXES.................................................................9
3.7. UNDISCLOSED LIABILITIES..............................................10
3.8. CONDITION OF ASSETS; TITLE; BUSINESS.................................10
3.9. NO PENDING LITIGATION OR PROCEEDINGS.................................10
3.10. CONTRACTS...........................................................10
3.11. PERMITS; COMPLIANCE WITH LAW........................................10
3.12. LEASED REAL ESTATE..................................................11
3.13. LABOR RELATIONS.....................................................11
3.14. INSURANCE...........................................................11
3.15. INTELLECTUAL PROPERTY RIGHTS........................................11
3.16. EMPLOYEE BENEFITS...................................................12
3.17. ENVIRONMENTAL MATTERS...............................................12
3.18. ADDITIONAL THEATERS.................................................13
3.19. SECURITIES MATTERS..................................................13
3.20. FINDERS' FEES.......................................................14
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF TRANSFEREE....................14
4.1. ORGANIZATION.........................................................14
4.2. AUTHORIZATION AND ENFORCEABILITY.....................................14
4.3. NO VIOLATION OF LAWS; CONSENTS.......................................14
4.4. NO PENDING LITIGATION OR PROCEEDINGS.................................15
4.5. FINDERS' FEES........................................................15
4.6. STOCK OWNERSHIP......................................................15
4.7. CCG SHARES...........................................................15
ARTICLE V. CERTAIN COVENANTS................................................15
5.1. CONDUCT OF BUSINESS PENDING CLOSING..................................15
5.2. FULFILLMENT OF AGREEMENTS............................................16
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS.......................16
5.4. TRANSFEROR'S EMPLOYEES...............................................16
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS..........................16
5.6. COVENANT NOT TO COMPETE..............................................17
5.7. PUBLICITY............................................................17
5.8. TRANSITIONAL MATTERS.................................................18
5.9. BOOKS AND RECORDS....................................................18
5.10. PERMITS; N.J. ISRA..................................................18
ARTICLE VI. CONDITIONS TO CLOSING; TERMINATION..............................18
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEREE.....................18
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEROR AND MR. SAYEGH......20
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING................................21
6.4. TERMINATION..........................................................22
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION...................23
7.1. SURVIVAL OF REPRESENTATIONS..........................................23
7.2. INDEMNIFICATION BY TRANSFEROR AND MR. SAYEGH.........................23
7.3. INDEMNIFICATION BY TRANSFEREE........................................24
7.4. WAIVER OF STATUTE OF LIMITATIONS.....................................24
7.5. NOTICE OF CLAIMS.....................................................24
7.6. THIRD PARTY CLAIMS...................................................24
7.7. LIMITATION ON INDEMNIFICATION........................................25
7.8. PAYMENT..............................................................25
<PAGE>
ARTICLE VIII. MISCELLANEOUS.................................................25
8.1. COSTS AND EXPENSES...................................................25
8.2. PRORATION OF EXPENSES................................................25
8.3. BULK SALES...........................................................25
8.4. FURTHER ASSURANCES...................................................25
8.5. NOTICES..............................................................26
8.6. CURRENCY.............................................................26
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW....................................27
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT..............................27
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.......................27
8.10. THIRD PARTY BENEFICIARY.............................................27
8.11. SEVERABILITY........................................................27
8.12. COUNTERPARTS........................................................28
<PAGE>
Agreement and Plan of Reorganization
("Agreement"), dated as of November 14, 1997, by
and among Jesse Sayegh, an individual residing in
_________, New Jersey ("Mr. Sayegh"), The New
Bellevue Theater Corp., a New Jersey corporation
("Transferor"), CCC Bellevue Cinema Corp., a
Delaware corporation ("Transferee"), and Clearview
Cinema Group, Inc., a Delaware corporation
("CCG").
Transferor currently owns and operates a four-screen movie cinema located
in Montclair, New Jersey (the "Cinema"). Transferee is a wholly owned subsidiary
of CCG.
Mr. Sayegh proposes to lease to Transferee the real estate on which the
Cinema is located, pursuant to the Lease Agreement attached as EXHIBIT A hereto.
For federal income tax purposes, it is intended that this transaction
shall qualify as a reorganization pursuant to Section 368 of the Internal
Revenue Code of 1986, as amended.
In consideration of the representations, warranties, covenants and
agreements contained herein, Transferor, Transferee, Mr. Sayegh and CCG, each
intending to be legally bound hereby, agree as set forth below.
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1. DEFINITIONS. As used in this Agreement, the following terms have the
meanings specified in this SECTION 1.1. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"Agreement" means this Agreement and Plan of Reorganization, as it may be
amended from time to time.
"Basket Amount" has the meaning given that term in SECTION 7.7.
"Benefit Plan" means any written and unwritten "employee benefit plans"
within the meaning of Section 3(3) of ERISA, and any other written and unwritten
profit sharing, pension, savings, deferred compensation, fringe benefit,
insurance, medical, medical reimbursement, life, disability, accident,
post-retirement health or welfare benefit, stock option, stock purchase, sick
pay, vacation, employment, severance, termination or other plan, agreement,
contract, policy, trust fund or arrangement, whether or not funded and whether
or not terminated, (i) maintained or sponsored by Transferor, or (ii) with
respect to which Transferor has or may have Liability or is obligated to
contribute, or (iii) that otherwise covers any of the current or former
employees of
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Transferor or their beneficiaries, or (iv) as to which any such current or
former employees of Transferor or their beneficiaries participated or were
entitled to participate or accrue or have accrued any rights thereunder.
"Business" means the operation of the Cinema.
"Transferee" has the meaning given that term in the heading of this
Agreement.
"Transferee Damages" has the meaning given that term in SECTION 7.2.
"Transferee Indemnitees" has the meaning given that term in SECTION 7.2.
"CCG" has the meaning given that term in the heading of this Agreement.
"CCG Shares" means the shares of Common Stock of CCG being delivered by
Transferee to Transferor pursuant to this Agreement.
"CERCLIS" means the United States Comprehensive Environmental Response
Compensation Liability Information System List pursuant to Superfund.
"Cinema" has the meaning given that term in the first introductory
paragraph of this Agreement.
"Closing" has the meaning given that term in SECTION 2.7.
"Closing Date" has the meaning given that term in SECTION 2.7.
"Code" means the United States Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Damages" means Transferee Damages or Transferor Damages, as the case may
be.
"Deposit" has the meaning given that term in SECTION 2.6.
"Encumbrance" means any liability, debt, mortgage, deed of trust, pledge,
security interest, encumbrance, option, right of first refusal, agreement of
sale, adverse claim, easement, lien, assessment, restrictive covenant,
encroachment, burden or charge of any kind or nature whatsoever or any item
similar or related to the foregoing.
"Environmental Law" means any applicable Law relating to public health and
safety or protection of the environment, including common law nuisance, property
damage and similar common law theories.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended, and the applicable rulings and regulations thereunder.
"GAAP" means United States generally accepted accounting principles as
they would be applied to the Cinema.
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"Governing Documents" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing agreement and other charter documents or
organization or governing documents or instruments of such Person.
"Governmental Body" means any court, government (federal, state, local or
foreign), department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority or instrumentality.
"Income Statements" has the meaning given that term in SECTION 3.4.
"Indemnified Party" has the meaning given that term in SECTION 7.5.
"Indemnifying Party" has the meaning given that term in SECTION 7.5.
"Intellectual Property Rights" means trademark and service mark rights,
applications and registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications, letters patent,
patent applications and licenses of any of the foregoing, improvements,
blueprints, specifications, drawings, designs and other intellectual property
and proprietary rights.
"IRS" means the United States Internal Revenue Service.
"Law" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, judgment or order of any kind or
nature whatsoever including any public policy, judgment or order of any
Governmental Body or principle of common law.
"Lease Agreement" mean the Lease Agreement for the Cinema identified on
EXHIBIT A hereto.
"Leased Real Estate" means the real estate subject to the Lease Agreement.
"Liabilities" with respect to any Person, means all debts, liabilities and
obligations of such Person of any nature or kind whatsoever, whether or not due
or to become due, accrued, fixed, absolute, matured, determined, determinable or
contingent and whether or not incurred directly by such Person or by any
predecessor of such Person, and whether or not arising out of any act, omission,
transaction, circumstance, sale of goods or service or otherwise.
"Litigation" has the meaning given that term in SECTION 3.9.
"Other Agreements" means the other agreements and instruments of title,
assignment or assumption hereunder.
"Permits" has the meaning given that term in SECTION 3.11.
"Permitted Encumbrances" means liens for current taxes not yet due and
liens of public record on personal property identified on SCHEDULE 1.1P.
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"Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, a Governmental Body and any
other legal entity.
"Registration Rights Agreement" has the meaning given that term in SECTION
6.1(N).
"Regulated Material" means any hazardous substance as defined by any
Environmental Law and any other material regulated by any applicable
Environmental Law, including petroleum, petroleum-related material, crude oil or
any fraction thereof, PCBs and friable asbestos.
"Related Party" means (i) Transferor, (ii) any Affiliate of Transferor,
(iii) any officer or director of any Person identified in clauses (i) or (ii)
preceding, and (iv) any spouse, sibling, ancestor or lineal descendant of any
natural Person identified in any one of the preceding clauses.
"Retained Assets" has the meaning given that term in SECTION 2.3.
"Retained Liabilities" has the meaning given that term in SECTION 2.5.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Deposits" means the security deposits under the Leases.
"Superfund" means the United States Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. Sections 6901 ET SEQ., as
amended.
"Tax" means any domestic or foreign federal, state, county or local tax,
levy, impost or other charge of any kind whatsoever, including any interest or
penalty thereon or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, including any schedule or
attachment thereto, and including any amendment thereof.
"Transferor" has the meaning given that term in the heading of this
Agreement.
"Transferor Damages" has the meaning given that term in SECTION 7.3.
"Transferor Group" means Transferor and any corporation that may be
aggregated with Transferor under Sections 414(b), (c), (m) or (o) of the Code.
"Transferor Indemnitees" has the meaning given that term in SECTION 7.3.
"Transferor's Predecessor" means any predecessor in interest to
Transferor, whether by merger, combination, reorganization or otherwise.
"Transferred Assets" has the meaning given that term in SECTION 2.1(D).
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"Voting Trust Agreement" has the meaning given that term in SECTION
6.1(M).
1.2. CONSTRUCTION. As used herein, unless the context otherwise requires:
(i) references to "Article" or "Section" are to an article or section hereof;
(ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits and
Schedules attached hereto and are incorporated herein by reference and made a
part hereof; (iii) "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II.
THE TRANSACTION
2.1. EXCHANGE OF ASSETS. Except as otherwise provided in SECTIONS 2.2 and
2.3, at the Closing, Transferor shall convey, transfer and assign to Transferee,
and Transferee shall assume from Transferor, all of Transferor's properties and
business as a going concern, and goodwill and tangible or intangible assets of
every kind, nature and description existing on the Closing Date located at or
used in connection with the Cinema, whether personal, in electronic form or
otherwise, and whether or not any of such assets have any value for accounting
purposes or are carried or reflected on or specifically referred to in its books
or financial statements, free and clear of all Encumbrances (collectively, the
"Transferred Assets"). Without limiting the foregoing, the Transferred Assets
shall include the following:
(i) All of Transferor's tangible assets, including office furniture,
office equipment and supplies, computer hardware and software, projectors,
projector bulbs, ticketing machines, leasehold improvements on or related to the
Leased Real Estate or related to the Business;
(ii) All of Transferor's books, records, manuals, documents, books
of account, correspondence, sales reports, literature, brochures, advertising
material and the like related to the Business (other than accounting records and
corporate books and records as defined in SECTION 2.3);
(iii) All of Transferor's inventory and supplies, including
concession products, candy items and paper goods for the Business;
(iv) All of Transferor's rights under leases for personal property,
if any;
(v) All of Transferor's rights under the Permits;
(vi) All of Transferor's goodwill and rights in and to the name
"Bellevue";
(vii) Transferor's rights to the telephone numbers for Cinema
location; and
(viii) The goodwill of the Business.
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2.2. CASH. As a convenience, Transferor shall assign petty cash on hand at
Closing to Transferee and Transferee shall at Closing reimburse Transferor for
the face amount of such cash.
2.3. RETAINED ASSETS. Except for the Transferred Assets, Transferee is not
receiving and Transferor is not assigning Transferor's accounting records and
corporate minute books, stock books and corporate seal (collectively, the
"Retained Assets"). Accounting Records of Transferor shall remain the exclusive
property of Transferor in accord with this Section, and shall mean any and all
books of original entry, including any register or computer tapes, all journals
or ledgers, all canceled checks, payroll records, bank or other account
statements, including account statements or reports to or from any vendors,
suppliers, film companies, or otherwise, including any correspondence relating
to same or to any other items designated as an accounting record hereunder, and
including all financial statements, records, tax returns, and all workpapers or
supporting information relating thereto, including all information gathered or
compiled by Transferor or Transferor's agents or accountants therefor, or
summaries of same, including all disks, print-outs, or other digital or analog,
written or electronic recording thereof. The Purchased Assets shall not include
any permits that are non-transferable. Transferor knows of no reason why any
permit issued to Transferor for use in its business would not be issued to
Transferee for use by it after the Closing, assuming only Transferee is
qualified to receive same.
2.4. [NOT USED].
2.5. RETAINED LIABILITIES. Transferee does not hereby and shall not assume
or in any way undertake to pay, perform, satisfy or discharge any other
Liability of Transferor, whether existing on, before or after the Closing Date
or arising out of any transactions entered into, or any state of facts existing
on, prior to or after the Closing Date (the "Retained Liabilities"), and
Transferor agrees to pay and satisfy when due all Retained Liabilities. Without
limiting the foregoing, the term "Retained Liabilities" shall include
Liabilities:
(i) to any Related Party;
(ii) for or under any Benefit Plan;
(iii) for any Taxes, whether or not by reason of, or in connection
with, the transactions contemplated by this Agreement;
(iv) with respect to Transferor's administrative and corporate
operations; and
(v) to any film distributor.
Transferee acknowledges that Transferee is responsible for any and all
liabilities of the Business first occurring after the Closing Date.
2.6. EXCHANGE OF STOCK FOR ASSETS.
(a) EXCHANGE OF STOCK. In exchange for the Transferred Assets, the
Transferee shall deliver to the Transferor the CCG Shares. The CCG Shares to be
delivered hereunder shall equal that number of shares of CCG Common Stock equal
to the result obtained by dividing $750,000
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by the closing price for the CCG Shares on the last trading day immediately
prior to Closing; provided, HOWEVER, that in no event shall the number of CCG
Shares to be delivered hereunder exceed 68,182. The CCG Shares being delivered
pursuant hereto shall not be registered under the Securities Act.
(b) SECTION 368. This transaction is intended to be a reorganization
within the meaning of Section 368 of the Code. The CCG Shares to be issued
pursuant hereunder will be issued solely in exchange for the Transferred Assets,
and no agreement contained herein or contemplated hereby represents, provides
for, or is intended to be consideration for the Transferred Assets. The parties
hereto shall take reasonable steps necessary to ensure the transaction
contemplated herein is treated for federal income tax purposes as set forth in
this Section. However, neither party hereto warrants to the other that the
transactions herein will be a tax-free reorganization under the Code.
(c) DEPOSIT. Transferee will deliver to Transferor within three business
days after the date that CJM Enterprises receives the consent to the assignment
to CCC Cedar Grove Cinema Corp. of the lease for the five-screen theater
operated by it at Cedar Grove, New Jersey, a good faith deposit equal to Fifteen
Thousand Dollars (the "Deposit") which shall be returned to Transferee at
Closing if there is a Closing hereunder. If there is no Closing hereunder, then
the Deposit shall be returned promptly to Transferee, unless Transferee is in
material breach hereof and such material breach was the sole cause of the
failure to Close hereunder. The Deposit shall be held in escrow by Transferor's
counsel (as a fiduciary) subject to the terms of this Agreement.
2.7. CLOSING. The consummation of the exchange of the Transferred Assets
and the CCG Shares, and the consummation of the other transactions contemplated
hereby (the "Closing") shall take place at 10:00 a.m., local time, on December
12, 1997 at the offices of Kirkpatrick & Lockhart, LLP, 1251 Avenue of the
Americas, New York, New York, 10020-1104 or at such other time, date or place as
the parties agree (the "Closing Date"). Closing shall be effective at 12:01 a.m.
on the Closing Date.
2.8. TITLE. Title to all Transferred Assets shall pass from Transferor to
Transferee at Closing, subject to the terms and conditions of this Agreement.
Transferee assume no risk of loss to the Transferred Assets prior to Closing.
2.9. CERTAIN CONSENTS. Nothing in this Agreement shall be construed as an
attempt to assign any Permit included in the Transferred Assets which is by its
terms or in law nonassignable without the consent of the other party or parties
thereto, unless such consent shall have been given, or as to which all the
remedies for the enforcement thereof enjoyed by Transferor would not, as a
matter of law, pass to Transferee as an incident of the assignments provided for
by this Agreement.
2.10. CCG SHARES. All CCG Shares being delivered pursuant hereto shall not
be registered under the Securities Act and shall be subject to the Voting Trust
Agreement and Stockholders shall have the benefit of the Registration Rights
Agreement with respect to such Shares. Transferor covenants that it will not
sell or dispose of the CCG Shares except in accordance with the rules set forth
in Rule 144 issued by the Securities and Exchange
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Commission under the Securities Act and shall not sell, transfer or pledge the
CCG Shares in the absence of a registration under the Securities Act or unless
CCG receives an opinion of counsel (which may be counsel for CCG) reasonably
acceptable to it stating that such sale or transfer is exempt from the
registration and prospectus delivery requirements of the Securities Act.
Transferor agrees and consents that the certificates representing the CCG Share
shall contain the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS CLEARVIEW CINEMA GROUP, INC. RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR CLEARVIEW CINEMA GROUP, INC.)
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT AND
THAT SUCH SALE OR TRANSFER IS MADE IN ACCORDANCE WITH THE RULE SET FORTH
IN RULE 144 ISSUED BY THE SECURITIES EXCHANGE COMMISSION UNDER SAID ACT.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
As an inducement to Transferee and CCG to enter into this Agreement and
consummate the transactions contemplated hereby, Transferor and Mr. Sayegh
jointly and severally represent and warrant to Transferee and CCG as follows:
3.1. ORGANIZATION. Transferor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and has
the power and authority to own or lease its properties, carry on the Business as
now conducted, enter into this Agreement and the Other Agreements to which it is
or is to become a party and perform its obligations hereunder and thereunder.
3.2. AUTHORIZATION; ENFORCEABILITY. This Agreement and each Other
Agreement to which Transferor is a party have been duly executed and delivered
by and constitute the legal, valid and binding obligations of Transferor and Mr.
Sayegh, enforceable against them in accordance with their respective terms. Each
Other Agreement to which Transferor and Mr. Sayegh are to become a party
pursuant to the provisions hereof, when executed and delivered by Transferor and
Mr. Sayegh, will constitute the legal, valid and binding obligation of
Transferor and Mr. Sayegh, enforceable against them in accordance with the terms
of such Other Agreement. All actions contemplated by this Section have been duly
and validly authorized by all necessary proceedings by Transferor.
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS. Neither the execution
and delivery of this Agreement or any Other Agreement to which Transferor or Mr.
Sayegh is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the
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compliance with or fulfillment of the terms, conditions or provisions hereof or
thereof by Transferor or Mr. Sayegh will: (i) contravene any provision of any
Governing Document of Transferor, (ii) conflict with, result in a breach of,
constitute a default or an event of default (or an event that might, with the
passage of time or the giving of notice or both, constitute a default or event
of default) under any of the terms of, result in the termination of, result in
the loss of any right under, or give to any other Person the right to cause such
a termination of or loss under, any Purchased Asset or any other material
contract, agreement or instrument to which Transferor or Mr. Sayegh is a party
or by which any of their assets may be bound or affected, (iii) result in the
creation, maturation or acceleration of any Liability of Transferor or Mr.
Sayegh (or give to any other Person the right to cause such a creation,
maturation or acceleration), (iv) violate any Law or violate any judgment or
order of any Governmental Body to which Transferor is subject or by which any of
the Transferred Assets or any of its other assets may be bound or affected, or
(v) result in the creation or imposition of any Encumbrance upon any of the
Transferred Assets or give to any other Person any interest or right therein. No
consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution and delivery by Transferor
or Mr. Sayegh of this Agreement or any of the Other Agreements to which it is or
is to become a party pursuant to the provisions hereof or the consummation by
Transferor or Mr. Sayegh of the transactions contemplated hereby or thereby.
3.4. CINEMA INCOME STATEMENTS. The Transferor commenced operation of the
Cinema in December, 1996. Attached hereto as EXHIBIT C are the income statements
for the Cinema for the nine month period ended August 31, 1997 (the "Income
Statements"). The Income Statements (i) are correct and complete, (ii) have been
prepared in accordance with GAAP on a consistent basis, and (iii) fairly present
the results of operation of the Cinema for periods then ended in accordance with
GAAP. Transferor has no money due and owing to any film distributor in
connection with the Cinema except for money owing in the normal course of
business for which an amount is not ascertainable to pay or which is not due
prior to Closing. The aggregate gross box office revenues for the Cinema for the
period from January 1, 1997 through August 31, 1997 was $750,000. The aggregate
gross concession revenues for the Cinema for the period from January 1, 1997
through August 31, 1997, was $250,000. Earnings before interest, taxes and
depreciation and amortization for the Cinema for the period from January 1, 1997
through August 31, 1997 was $236,000.
3.5. NO CHANGES. Since September 30, 1996, Transferor has conducted the
Business only in the ordinary course. Without limiting the generality of the
foregoing sentence, since September 30, 1996, there has not been any: (i)
material adverse change in the Transferred Assets or Leased Real Estate; (ii)
damage or destruction to any Purchased Asset or Leased Real Estate, whether or
not covered by insurance; (iii) strike or other labor trouble at the Cinema;
(iv) increase in the salary, wage or bonus of any employee of the Cinema; or (v)
agreement or commitment to do any of the foregoing. Except as provided on
SCHEDULE 3.5, since September 30, 1996, Transferor has not made any material
changes, substitutions or replacements to the equipment, furniture or fixtures
at the Cinema.
3.6. TAXES. Transferor, its Affiliates and Transferor's Predecessor, have
filed or caused to be filed on a timely basis, or will file or cause to be filed
on a timely basis, all Tax Returns that are required to be filed by it prior to
or on the Closing Date, pursuant to the Law of
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each governmental authority with taxing power over it. All such Tax Returns were
or will be, as the case may be, correct and complete. Transferor and
Transferor's Predecessor have paid or will pay all Taxes that have or will
become due as shown on such Tax Returns or pursuant to any assessment received
as an adjustment to such Tax Returns (subject to all rights of appeal by
Transferee). Transferor and Transferor's Predecessor have withheld and paid all
Taxes required to have been withheld in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third
party.
3.7. UNDISCLOSED LIABILITIES. Except as disclosed on SCHEDULE 3.7,
Transferor has no, and after Closing shall have no, Liabilities of any kind or
nature whatsoever that would attach to the Transferred Assets or for which any
Transferee or CCG may become liable.
3.8. CONDITION OF ASSETS; TITLE; BUSINESS. Transferor has good, marketable
and exclusive title to all of the Transferred Assets. The tangible Transferred
Assets are in good operating condition and repair suitable for the purposes for
which they are used in the Business, and all equipment included in the
Transferred Assets have been maintained in the normal course of business by
qualified professionals. Except as disclosed on SCHEDULE 3.8 and except for
Permitted Encumbrances, none of the Transferred Assets is subject to any
Encumbrance. SCHEDULE 3.8 identifies any property located on the Leased Real
Estate that is not owned by Transferor. The Encumbrances identified on SCHEDULE
3.8 will be removed by Transferor on or prior to Closing. The Transferred Assets
do not contain any shares of capital stock of or other equity interest in any
Person. On the Closing Date, the Transferred Assets will include at a minimum
(i) one functioning xenon projector bulb for each auditorium in the Cinema, and
(ii) one new, unused, spare xenon projector bulb for each type of projector at
the Cinema location.
3.9. NO PENDING LITIGATION OR PROCEEDINGS. No action, suit, investigation,
claim or proceeding of any nature or kind whatsoever, whether civil, criminal or
administrative, by or before any Governmental Body or arbitrator ("Litigation")
is pending or, to the knowledge of Transferor and Mr. Sayegh, threatened against
or affecting Transferor, Mr. Sayegh, the Business, any of the Transferred
Assets, the Leased Real Estate, or any of the transactions contemplated by this
Agreement or any Other Agreement except for claims for personal injury and
workers compensation and further except for claims for property damage
identified on SCHEDULE 3.9 and claims by Governmental Bodies identified on
SCHEDULE 3.9. There is presently no outstanding judgment, decree or order of any
Governmental Body against or affecting Transferor, Mr. Sayegh, the Business, any
of the Transferred Assets, the Leased Real Estate, or any of the transactions
contemplated by this Agreement or any Other Agreement. Neither Transferor nor
Mr. Sayegh has any pending any Litigation against any third party related to the
Business.
3.10. CONTRACTS. There is no contract, lease or other agreement, that
materially affects or is used in the Business or the Leased Real Estate.
3.11. PERMITS; COMPLIANCE WITH LAW. Subject to SECTION 5.10, Transferor
holds all health department and certificates of occupancy required under any
applicable Law in connection with the operation of the Business and use and
occupancy of the Leased Real Estate ("Permits"). The Transferred Assets include
all Permits other than the occupancy permit which must be
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obtained under local law by Transferee. Transferor has received no notice of any
violation of Law which has not been remedied or rectified.
3.12. LEASED REAL ESTATE. Mr. Sayegh has the right to quiet enjoyment of
all Leased Real Estate, including all renewal rights under the Lease Agreement.
Mr. Sayegh has not received any written or oral notice of assessments for public
improvements against any Leased Real Estate or any written or oral notice or
order by any Governmental Body, any insurance company that has issued a policy
with respect to any of such properties or any board of fire underwriters or
other body exercising similar functions that relates to violations of building,
safety or fire ordinances or regulations, claims any defect or deficiency with
respect to any of such properties or requests the performance of any repairs,
alterations or other work to or in any of such properties or in the streets
bounding the same, which in each case has not been remedied or rectified. There
is no pending condemnation, expropriation, eminent domain or similar proceeding
affecting all or any portion of the Leased Real Estate. Mr. Sayegh has not
received any written notice of any proposed, planned or actual curtailment of
service of any utility supplied to the Leased Real Estate. None of the Leased
Real Estate is subleased to any person. The Lease is in full force and effect in
accordance with their terms, and have not been modified or amended (other than
as disclosed on EXHIBIT A) and, to the knowledge of Transferor and Mr. Sayegh,
no party thereto is in default under any of the terms contained therein.
3.13. LABOR RELATIONS. No employee of Transferor is represented by any
union or other labor organization. No representation election, arbitration
proceeding, grievance, labor strike, dispute, slowdown, stoppage or other labor
trouble is pending or, to the knowledge of Transferor and Mr. Sayegh, threatened
against, involving, affecting or potentially affecting Transferor. No complaint
against Transferor or Transferor's Predecessor is pending or, to the knowledge
of Transferor and Mr. Sayegh, threatened before the National Labor Relations
Board, the Equal Employment Opportunity Commission or any similar state or local
agency, by or on behalf of any employee of Transferor or Transferor's
Predecessor. To the knowledge of Transferor and Mr. Sayegh, Transferor has no
Liability for any occupational disease of any of its employees, former employees
or others.
3.14. INSURANCE. SCHEDULE 3.14 discloses all insurance policies on an
"occurrence" basis with respect to which Transferor or Transferor's Predecessor
is the owner, insured or beneficiary.
3.15. INTELLECTUAL PROPERTY RIGHTS. Transferor neither owns nor is
licensee to any form of Intellectual Property Rights related to the Cinema other
than the names "CJM Enterprises", which is a Retained Asset, and rights to show
films to the public according to agreements which are Retained Assets and
Retained Liabilities. To the knowledge of Transferor and Mr. Sayegh, no other
Person has any rights to the names "Middlebrook" in connection with the use of a
cinema in Middlebrook, New Jersey. To the knowledge of Transferor and Mr.
Sayegh, Transferor is not infringing upon the intellectual property rights of
any other Person. SCHEDULE 3.14 identifies all computer software owned by
Transferor. With respect to any such computer software, the Transferor makes no
agreement or other warranties or representations hereunder other than that
Transferor a licensee of certain computer software used by it in connection with
certain computer hardware that Transferor is selling to Transferee hereunder and
as to any license for software used with respect to said computer hardware,
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(a) Transferor will assign to Transferee at Closing any rights, title, or
interest in said software, but without warranty,
(b) Transferor's obligation to sell, transfer, or assign any such software
as is otherwise called for above shall be void if prohibited by any such
license, and
(c) At Closing, regardless of whether (a) or (b) is the case, the price
paid by Transferee to Transferor will remain as is otherwise called for in the
agreement.
3.16. EMPLOYEE BENEFITS. Except for medical and dental coverage, life
insurance, and long-term disability plans described on SCHEDULE 3.16 for those
managers of the Cinema identified on SCHEDULE 3.16, Transferor does not maintain
any Benefit Plan for any employees employed at the Cinema. After the Closing,
neither Transferee or CCG will have any Liability, with respect to any Benefit
Plan of Transferor or any other member of the Transferor Group, whether as a
result of delinquent contributions, distress terminations, fraudulent transfers,
failure to pay premiums to the PBGC, withdrawal Liability or otherwise. SCHEDULE
3.16 identifies the names of all employees of Transferor employed at the Cinema,
including each listed employee's address, current compensation, vacation time to
which he or she is entitled and vacation time so far taken. SCHEDULE 3.16 also
includes copies of Transferor's payroll records for all persons currently
employed by Transferor at the Cinema. There are no written or oral agreements or
arrangements providing for the employment by Transferor of any person at the
Cinema other than "at will" agreements. All employees of Transferor at the
Cinema are employees at will. Transferor does not provide a motor vehicle to any
employee of Transferor at the Cinema.
3.17. ENVIRONMENTAL MATTERS. The representations and warranties contained
in this Section are qualified by (i) the disclosures on SCHEDULE 3.17, (ii) the
knowledge of Transferor and Mr. Sayegh as to the activities of Tranferor's
Predecessors, and (iii) the knowledge of Transferor and Mr. Sayegh as to the
activities of third parties prior to the time that Transferor took possession of
the property subject to the Lease Agreement:
(a) COMPLIANCE; NO LIABILITY. Transferor and Transferor's Predecessor have
operated the Business and each parcel of Leased Real Estate in compliance with
all applicable Environmental Laws. Transferor is not subject to any Liability,
penalty or expense (including legal fees) in connection with the Business or
ownership or leasing of the Leased Real Estate by virtue of any violation of any
Environmental Law, any environmental activity conducted on or with respect to
any property or any environmental condition existing on or with respect to any
property, in each case whether or not Transferor or Transferor's Predecessors
permitted or participated in such act or omission.
(b) TREATMENT; CERCLIS. Neither Transferor nor Transferor's Predecessors
have treated, stored, recycled or disposed of any Regulated Material on any
Leased Real Estate in violation of applicable Environmental Laws, and, to the
knowledge of Transferor and Mr. Sayegh, no other Person has treated, stored,
recycled or disposed of any Regulated Material on any part of the Leased Real
Estate in violation of applicable Environmental Laws. There has been no release
of any Regulated Material at, on or under any Leased Real Estate. Neither
Transferor nor Transferor's Predecessors have transported or arranged for the
transportation of any Regulated
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Material from the Cinema to any location that is listed or proposed for listing
on the National Priorities List pursuant to Superfund, on CERCLIS or any other
location that is the subject of federal, state or local enforcement action or
other investigation that may lead to claims against Transferor or Transferor's
Predecessor for cleanup costs, remedial action, damages to natural resources, to
other property or for personal injury including claims under Superfund.
(c) NOTICES; EXISTING CLAIMS; CERTAIN REGULATED MATERIALS; STORAGE TANKS.
Neither Transferor nor Transferor's Predecessors have received any request for
information, notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation, abatement or cleanup
of any threatened or actual release of any Regulated Material. To the knowledge
of Transferor and Mr. Sayegh, Transferor is not required to place any notice or
restriction relating to the presence of any Regulated Material at any Leased
Real Estate. There has been no past, and there is no pending or contemplated,
claim by Transferor or Transferor's Predecessor under any Environmental Law or
Laws based on actions of others that may have impacted on the Leased Real
Estate, and neither Transferor nor Transferor's Predecessors has entered into
any agreement with any Person regarding any remedial action or existing
environmental Liability or expense with respect to any of the Real Property or
any real property adjacent to the Real Property. To the knowledge of Transferor
and Mr. Sayegh, all storage tanks located on the Leased Real Estate, whether
underground or aboveground, are disclosed on SCHEDULE 3.17. Transferor has not
closed or caused to be closed any underground storage tank on the Leased Real
Estate.
(d) CONFIDENTIALITY. Transferee and CCG (for itself and for any affiliate
of itself or of Transferee) hereby agree that they will not disclose to any
person any information they may have gained with regard to the operation or the
finances of the business sold by Transferor hereunder which information was
gained by disclosures made to them by Transferor and that this obligation of
confidentiality shall survive the Closing. Without otherwise limiting the
information subject to the obligation of confidentiality set forth above, the
information to be kept confidential by Transferee and Transferee's affiliates,
as is set forth above, shall include the financial statements annexed to this
agreement and the financial representations made hereunder and any information
contained in any accounting records of Transferor as may have been disclosed or
made available to Transferee in Transferee's review of Transferor's business
prior to Closing.
3.18. ADDITIONAL THEATERS. Neither Transferor nor Mr. Sayegh has any
knowledge of the intention by any person to construct or open any movie
theater within a five-mile radius of the Cinema.
3.19. SECURITIES MATTERS. Mr. Sayegh and Transferor acknowledge that they
and their representatives have received and reviewed all of the documents filed
by CCG through the date hereof (and on the Closing Date, through the Closing)
with the Securities and Exchange Commission. Mr. Sayegh and Transferor and their
representatives have had, at their discretion, an opportunity to meet with the
officers CCG to discuss CCG's business. Mr. Sayegh and Transferor are each
acquiring the CCG Shares for his or its own account with the intention of
holding the CCG Shares for purposes of investment, and not as a nominee or agent
for any other party, and not with a view to the resale or distribution of any of
the CCG Shares, and no Transferor or Stockholder has any intention of selling
the CCG Shares or any interest therein in
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violation of the federal securities laws or any applicable state securities
laws. Mr. Sayegh and Transferor understand that the CCG Shares are not
registered under the Securities Act of 1933, as amended (the "1933 Act"), or
under any state securities laws. Each of Mr. Sayegh and Transferor is an
"accredited investor" within the meaning of that term as set forth in Rule 501
issued by the Securities and Exchange Commission under the 1933 Act.
3.20. FINDERS' FEES. Neither Transferor nor any of its officers, managers
or employees has employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby or by any Other Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF TRANSFEREE
As an inducement to Transferor to enter into this Agreement and consummate
the transactions contemplated hereby, Transferee and CCG jointly and severally
represent and warrant to Transferor and Mr. Sayegh as follows:
4.1. ORGANIZATION. Each of Transferee and CCG is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the corporate power and authority to own or lease its
properties, carry on its business, enter into this Agreement and the Other
Agreements to which it is or is to become a party and perform its obligations
hereunder and thereunder.
4.2. AUTHORIZATION AND ENFORCEABILITY. This Agreement and each Other
Agreement to which Transferee and CCG is a party have been duly executed and
delivered by and constitute the legal, valid and binding obligations of
Transferee and CCG, enforceable against it in accordance with their respective
terms. Each Other Agreement to which Transferee and CCG is to become a party
pursuant to the provisions hereof, when executed and delivered by Transferee and
CCG, will constitute the legal, valid and binding obligation of Transferee and
CCG, enforceable against Transferee and CCG in accordance with the terms of such
Other Agreement. All actions contemplated by this Section have been duly and
validly authorized by all necessary proceedings by Transferee and CCG.
4.3. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and delivery of
this Agreement or any Other Agreement to which Transferee or CCG is or is to
become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by Transferee or CCG will: (i) contravene any
provision of the Governing Documents of any Transferee or CCG, (ii) conflict
with, result in a breach of, constitute a default or an event of default (or an
event that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
the termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under, any contract,
agreement or instrument to which any Transferee or CCG is a party or by which
any of their assets may be bound or affected, (iii) result in the creation,
maturation or acceleration of any Liability of any Transferee or CCG (or give to
any other Person the right to cause such a creation, maturation or
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acceleration), or (iv) violate any Law or any judgment or order of any
Governmental Body to which any Transferee or CCG is subject or by which any of
its assets may be bound or affected. Except for the consent of Provident Bank,
no consent, approval or authorization of, or registration or filing with, any
Person is required in connection with the execution or delivery by Transferee or
CCG of this Agreement or any of the Other Agreements to which Transferee or CCG
is or is to become a party pursuant to the provisions hereof or the consummation
by Transferee or CCG of the transactions contemplated hereby or thereby.
4.4. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending or, to
the knowledge of any Transferee or CCG, threatened against or affecting CCG or
any Affiliate of CCG in connection with any of the transactions contemplated by
this Agreement or any Other Agreement to which Transferee and CCG is or is to
become a party or that would, to CCG's knowledge, have a material adverse effect
on CCG's business considered as a whole. There is presently no outstanding
judgment, decree or order of any Governmental Body against or affecting CCG or
any Affiliate of CCG in connection with the transactions contemplated by this
Agreement or any Other Agreement to which any Transferee or CCG is or is to
become a party.
4.5. FINDERS' FEES. Neither Transferee, CCG nor any of their officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fee, commission or finders' fee in connection with
any of the transactions contemplated hereby.
4.6. STOCK OWNERSHIP. CCG owns all of the issued and outstanding capital
stock of the Transferee.
4.7. CCG SHARES. At Closing, the CCG Shares shall be duly authorized,
validly issued and fully paid and non-assessable.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date, unless Transferee shall otherwise consent in
writing, Transferor shall (and Mr. Sayegh shall cause Transferor to) conduct its
affairs as follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted only in
the ordinary course and consistent with past practice. Transferor and Mr. Sayegh
shall maintain the Transferred Assets, and the Leased Real Estate consistent
with past practice and shall comply in a timely fashion with the provisions of
all Permits and its other agreements and commitments. Transferor shall use its
best efforts to keep the Business organization intact, keep available the
services of its present employees and preserve the goodwill of its suppliers,
patrons and others having business relations with it. Transferor shall maintain
in full force and effect its policies of insurance, subject only to variations
required by the ordinary operations of the Business, or else shall obtain, prior
to the lapse of any such policy, substantially similar coverage with insurers of
recognized standing.
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(b) PROHIBITED TRANSACTIONS. Transferor shall not: (i) amend or terminate
any Permit; (ii) fail to pay any Liability or charge when due, other than
Liabilities contested in good faith by appropriate proceedings; (iii) enter into
any employment or consulting contract or arrangement with any employee of the
Cinema; (iii) take any action or omit to take any action that is reasonably
likely to result in the occurrence of any event described in SECTION 3.5; or
(vi) take any action or omit to take any action that will cause a breach or
termination of any Permit, other than termination by fulfillment of the terms
thereunder.
(c) ACCESS, INFORMATION AND DOCUMENTS. Transferor shall give to Transferee
and to Transferee's employees and representatives (including accountants,
attorneys, environmental consultants and engineers) access during normal
business hours to all of the properties, books, contracts, commitments, records,
officers, personnel and accountants (including independent public accountants
and their workpapers) of Transferor solely as they relate to the Cinema and
shall furnish to Transferee all such documents and copies of documents and all
information with respect to the properties, Liabilities and affairs of
Transferor (solely as they relate to the Cinema) as Transferee may reasonably
request, including but not limited to weekly reports of gross box office and
concession receipts at the Cinema, at the same time such reports are available
to Transferor's management.
5.2. FULFILLMENT OF AGREEMENTS. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
ARTICLE VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement. Transferor shall, prior to Closing, obtain the consents referred
to in SECTION 3.3.
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS. Transferor agrees to
pay, perform and discharge any and all severance payments, payroll and
employment related Liabilities with respect to employees of Transferor at the
Cinema accruing up to the close of business on the date immediately preceding
the Closing Date or which result from the transfer of the Transferred Assets
hereunder and the employment by Transferee of those employees and shall
indemnify and hold harmless Transferee and its directors, officers and
Affiliates from and against any and all losses, Liabilities, damages, costs and
expenses, including reasonable legal fees and disbursements, that any of the
aforesaid may suffer or incur by reason of or relating to any such Liabilities.
5.4. TRANSFEROR'S EMPLOYEES. Transferee shall have the right, but not the
obligation, to offer employment to any of the employees of Transferor who are
employed at the Cinema. At or prior to the Closing, Transferor shall fully
compensate all employees of Transferor at the Cinema for all work performed
through and including the Closing Date. Transferor does not guaranty that any of
the employees to which Transferee or CCG will offer employment will accept such
offer of employment.
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS.
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(a) TRANSFEROR'S LIABILITY. Transferor shall remain liable for all
Liability for all workers' compensation, disability and occupational diseases of
or with respect to all of Transferor's employees attributable to injuries,
claims, conditions, events and occurrences occurring on or before the Closing
Date.
(b) TRANSFEREE'S LIABILITY. Transferee shall be liable for all Liability
for all workers' compensation, disability and occupational diseases of or with
respect to all of employees of Transferor hired by Transferee attributable to
injuries, claims, conditions, events and occurrences first occurring after the
Closing Date.
5.6. COVENANT NOT TO COMPETE.
(a) RESTRICTION. For a period of five years from and after the Closing
Date, neither Transferor nor Mr. Sayegh shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be employed or otherwise connected as an officer,
employer, stockholder, partner or otherwise with, the Cinema within a seven mile
radius of any theatre owned directly or indirectly by CCG on the date
immediately following the Closing Date. Ownership of not more than 2% of the
outstanding stock of any publicly traded company or operation of the projects
identified in SECTION 5.11 shall not be a violation of this Section.
(b) ENFORCEMENT. The restrictive covenant contained in this Section is a
covenant independent of any other provision of this Agreement and the existence
of any claim that Transferor may allege against any other party to this
Agreement, whether based on this Agreement or otherwise, shall not prevent the
enforcement of this covenant. Transferor agrees that Transferee's remedies at
law for any breach or threat of breach by Transferor of the provisions of this
Section will be inadequate, and that Transferee shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Section
and to enforce specifically the terms and provisions hereof, in addition to any
other remedy to which Transferee may be entitled at law or equity. In the event
of litigation regarding this covenant not to compete, the prevailing party in
such litigation shall, in addition to any other remedies the prevailing party
may obtain in such litigation, be entitled to recover from the other party its
reasonable legal fees and out of pocket costs incurred by such party in
enforcing or defending its rights hereunder. The length of time for which this
covenant not to compete shall be in force shall not include any period of
violation or any other period required for litigation during which Transferee
seek to enforce this covenant. Should any provision of this Section be adjudged
to any extent invalid by any competent tribunal, such provision will be deemed
modified to the extent necessary to make it enforceable.
5.7. PUBLICITY. Transferor and Transferee shall not issue any press
release or otherwise make any announcements to the public or the employees of
Transferor with respect to this Agreement prior to the Closing Date without the
prior written consent of the other, except as required by Law. If Transferee
believes that a public disclosure of the transactions contemplated hereby is
required by law, Transferee shall give to Transferor notice thereof at least 24
hours prior to making such disclosure.
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5.8. TRANSITIONAL MATTERS. Transferor and Mr. Sayegh shall cooperate with
and assist Transferee and its authorized representatives in order to provide, to
the extent reasonably requested by Transferee, an efficient transfer of control
of the Transferred Assets and the Leased Real Estate and to avoid any undue
interruption in the activities and operations of the Business and the Leased
Real Estate following the Closing Date. Transferor shall not cause any utilities
to be disconnected until the Transferee shall have established an account for
such utility in Transferee's own name. Transferor shall assist in transferring
to Transferee the telephone numbers for the Cinema location. Transferee shall be
liable to Transferor for the utility payments for any utility maintained by the
Transferor after the Closing Date. Transferor shall cooperate with Transferee's
lender, Provident Bank, in connection with the consummation by Transferee of the
transactions provided hereunder, as reasonably requested by such lender. Such
cooperation shall permit Provident Bank to rely on the legal opinion be
delivered by Transferor's counsel hereunder. Prior to Closing, Transferor shall
remove all of its movie trailers from films at the Cinema.
5.9. BOOKS AND RECORDS. Transferor shall not destroy or dispose of any
books, records, and files relating to the Business to the extent that they
pertain to the Business prior to the Closing Date.
5.10. PERMITS; N.J. ISRA. Transferor shall use its best efforts to provide
to Transferee valid Permits for the Cinema prior to Closing. In the event that
Transferor is unable to do so by Closing, then Transferor shall provide
Transferee with such Permits within 30 days after Closing. Transferors shall
obtain prior to Closing letters of Non-Applicability with respect to the Leased
Real Estate under the New Jersey Site Recovery Act (PL 1993, ch. 39).
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEREE. The obligation of
Transferee and CCG to proceed with the Closing under this Agreement is subject
to the fulfillment prior to or at Closing of the following conditions, any one
or more of which may be waived in whole or in part by Transferee or CCG at
Transferee's or CCG's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Transferor and Mr. Sayegh contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Transferor and Mr. Sayegh shall have performed in all respects all of the
covenants and complied with all of the provisions required by this Agreement to
be performed or complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby or that would, after Closing, limit or adversely affect Transferee's
ownership of the Transferred Assets or the Leased Real Estate in a manner
different from Transferor's, and there shall not have been threatened, nor shall
there be pending, any action or proceeding by or before any Governmental Body
challenging the
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lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements or seeking
monetary or other relief by reason of the consummation of any of such
transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the Closing
Date, there shall have been no material adverse change, regardless of insurance
coverage therefor, in the Business or any of the Transferred Assets, results of
operations, prospects or condition, of the Cinema or the Leased Real Estate.
(d) CLOSING CERTIFICATE. If Closing occurs after the date hereof,
Transferor shall have delivered a certificate, dated the Closing Date certifying
to the fulfillment of the conditions set forth in subparagraphs (a), (b) and (c)
of this Section. Such certificate shall constitute a representation and warranty
of Transferor with regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Transferee and CCG shall have received the other
documents referred to in SECTION 6.3(A). All agreements, certificates, opinions
and other documents delivered by Transferor to Transferee and CCG hereunder
shall be in form and substance reasonably satisfactory to Transferee and CCG.
(f) TITLE INSURANCE. Transferee, at their sole cost and expense, shall
have obtained for all Leased Real Estate final marked commitments to issue to
Transferee ALTA (1990-Form B with appropriate state endorsements) owner's
policies of title insurance in coverage amounts equal to the fair market values
of the Leased Real Estate, insuring good title to the Leased Real Estate with
mechanic's liens coverage and such endorsements as Transferee may have
reasonably requested and with exceptions only for ALTA standard printed
exceptions (other than mechanic's and materialmen's liens and rights of
possession), and Permitted Encumbrances.
(g) BOARD APPROVAL; BANK APPROVAL. Transferee and CCG shall have received
the approval of its Board of Directors and its senior secured lender to the
transactions contemplated hereunder.
(h) OTHER AGREEMENTS. CCG shall have closed under the agreement to
purchase Cinema 23 in Cedar Grove, New Jersey, which is owned by Mr. Sayegh.
(i) RELEASE OR TERMINATION OF MORTGAGE AND OTHER ENCUMBRANCES. Transferor
shall have caused all Encumbrances on the Leased Real Estate and all
Encumbrances on the other Transferred Assets to be released.
(j) LEASED REAL ESTATE. Mr. Sayegh shall have executed and delivered
the Lease Agreement.
(k) CONSENTS. Transferor shall have received the other consents, approvals
and actions of the Persons identified in SECTION 3.3.
(l) NEW THEATER TRANSITION FORMS. Transferee shall have received a
completed New Theater Transition Form in respect of the Transferor.
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(m) VOTING TRUST AGREEMENT. Transferor shall have executed and delivered a
Voting Trust Agreement substantially in the form of EXHIBIT D with respect to
the CCG Shares ("Voting Trust Agreement").
(n) REGISTRATION RIGHTS AGREEMENT. Transferor shall have executed and
delivered a Registration Rights Agreement substantially in the form of EXHIBIT E
with respect to the CCG Shares ("Registration Rights Agreement").
(o) DUE DILIGENCE. CCG shall have been satisfied with its due diligence
investigation of the Cinema.
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF TRANSFEROR AND MR. SAYEGH. The
obligation of Transferor and Mr. Sayegh to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of the following
conditions, any one or more of which may be waived in whole or in part by
Transferor or Mr. Sayegh at Transferor's or Mr. Sayegh's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Transferee and CCG contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Transferee and CCG shall have performed all of the covenants and complied in all
respects with all of the provisions required by this Agreement to be performed
or complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or the Other Agreements or seeking monetary or
other relief by reason of the consummation of such transactions.
(c) CLOSING CERTIFICATE. If Closing occurs after the date hereof,
Transferee and CCG shall have delivered a certificate, dated the Closing Date
certifying to the fulfillment of the conditions set forth in subparagraphs (a)
and (b) of this SECTION 6.2. Such certificate shall constitute a representation
and warranty of Transferee with regard to the matters therein for purposes of
this Agreement.
(d) OTHER AGREEMENTS. Mr. Sayegh shall have closed under CCG's agreement
to purchase Cinema 23, which is owned by Mr. Sayegh.
(e) CLOSING DOCUMENTS. Transferor shall also have received the other
documents referred to in SECTION 6.3(B). All agreements, certificates, opinions
and other documents delivered by Transferee to Transferor hereunder shall be in
form and substance reasonably acceptable to counsel for Transferor, in the
exercise of such counsel's reasonable professional judgment.
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(f) LEASE AGREEMENT. Transferee shall have executed and delivered the
Lease Agreement.
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY TRANSFEROR AND MR. SAYEGH. Transferor and Mr. Sayegh
shall deliver or cause to be delivered to Transferee at the Closing:
(i) General warranty instrument of conveyance and assignment of the
Transferred Assets in the form attached hereto as EXHIBIT F.
(ii) Assignments of all transferable or assignable licenses, Permits
and warranties relating to the Transferred Assets and of any Intellectual
Property included in the Transferred Assets, duly executed and in forms
acceptable to Transferee.
(iii) [not used].
(iv) Certificates of the appropriate public officials to the effect
that Transferor was a validly existing corporation in good standing in its state
of formation as of a date not more than 15 business days prior to the Closing
Date.
(v) Incumbency and specimen signature certificates dated the Closing
Date, signed by the officers of Transferor and certified by its Chief Executive
Officer or Executive Vice President.
(vi) True and correct copies of the Transferor's Certificate of
Incorporation certified by the Secretary of State as of the Closing Date.
(vii) Certificates of Transferor (A) setting forth all resolutions
of the Directors of Transferor and the stockholders of Transferor authorizing
the execution and delivery of this Agreement and the Other Agreements and the
performance by Transferor of the transactions contemplated hereby and thereby,
and (B) to the effect that the Certificate of Incorporation of Transferor
delivered pursuant to SECTION 6.3(A)(VI) were in effect at the date of adoption
of such resolutions, the date of execution of this Agreement and the Closing
Date.
(viii) The opinion of Buklad & Buklad, legal counsel to Transferor,
in substantially the form of EXHIBIT G.
(ix) Keys for the Cinema location.
(x) All vendor warranties (including those for the roofs on the
Cinema) respecting the Transferred Assets.
(xi) Such other agreements and documents as Transferee may
reasonably request.
(b) DELIVERIES BY TRANSFEREE. Transferee shall deliver or cause to be
delivered to Transferor at the Closing:
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(i) [not used].
(ii) A certificate of the appropriate public official to the effect
that Transferee and CCG is a validly existing corporation in the State of
Delaware as of a date not more than 15 business days prior to the Closing Date.
(iii) Incumbency and specimen signature certificates signed by the
officers of Transferee and CCG and certified by the Secretary of Transferee and
CCG.
(iv) True and correct copies of the Certificates of Incorporation of
Transferee and CCG as of a date not more than 15 business days prior to the
Closing Date, certified by the Secretary of State of Delaware.
(v) A certificate of the Secretary of Transferee and CCG (A) setting
forth all resolutions of the Board of Directors of Transferee and CCG
authorizing the execution and delivery of this Agreement and Other Agreements
and the performance by Transferee and CCG of the transactions contemplated
hereby and thereby, certified by the Secretary of Transferee and CCG and (B) to
the effect that the Certificates of Incorporation of Transferee delivered
pursuant to SECTION 6.3(B)(IV) were in effect at the date of adoption of such
resolutions, the date of execution of this Agreement and the Closing Date.
(vi) The opinion of Kirkpatrick & Lockhart LLP, counsel to
Transferee and CCG, in substantially the form of EXHIBIT H.
(vii) Such other agreements and documents as Transferor may
reasonably request.
6.4. TERMINATION.
(a) MUTUAL CONSENT; FAILURE OF CONDITIONS. Except as provided in SECTION
6.4(B), this Agreement may be terminated at any time prior to Closing by: (i)
mutual consent of Transferee, CCG and Transferor; (ii) Transferee and CCG, if
any of the conditions specified in SECTION 6.1 hereof shall not have been
fulfilled by December 19, 1997 and shall not have been waived by Transferee and
CCG; or (iii) Transferor, if any of the conditions specified in SECTION 6.2
hereof shall not have been fulfilled by December 19, 1997 and shall not have
been waived by Transferor. In the event of termination of this Agreement by
either Transferee, CCG or Transferor pursuant to clause (ii) or (iii) of the
immediately preceding sentence, Transferee and CCG, on the one hand, and
Transferor on the other hand shall be liable to the other for any breach hereof
by such party, which breach led to such termination, and the rights and
obligations of the parties set forth in SECTIONS 7.2, 7.3 and 8.1 shall survive
such termination. Transferee, CCG and Transferor shall also be entitled to seek
any other remedy to which it may be entitled at law or in equity in the event of
such termination, which remedies shall include injunctive relief and specific
performance. Notwithstanding the foregoing, in the event that this Agreement is
terminated by one party hereto pursuant to clause (ii) or (iii) of the first
sentence of this Section solely as a result of a breach by the other party
hereto of a representation or warranty of such other party as of a date after
the date of this Agreement, which breach could not have been reasonably
anticipated by such other party and was beyond the reasonable control of such
other party, then the remedy of
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the party terminating this Agreement shall be limited solely to recovery of all
of such party's costs and expenses incurred in connection herewith.
(b) CASUALTY DAMAGE. Notwithstanding anything else herein to the contrary,
if prior to Closing the Transferred Assets (or any portion thereof) are damaged
by fire or any other cause, the reasonable estimate of the immediate repair of
which would cost more than $50,000, Transferee at its option, which may be
exercised by written notice given to Transferor within ten business days after
Transferee's receipt of notice of such loss, may declare this Agreement null and
void, or Transferee may Close subject to reduction of the Purchase Price by the
amount of any applicable insurance deductible which shall be paid by Transferee
and assignment to Transferee of the proceeds from any insurance carried by
Transferor covering such loss. If prior to Closing the Transferred Assets (or
any portion thereof) are damaged by fire or any other cause, the reasonable
estimate of the repair of which would cost $50,000 or less, such event shall not
excuse Transferee from their obligations under this Agreement, but the Purchase
Price shall be reduced by an amount equal to the amount of such cost and
Transferor shall be entitled to retain the net insurance proceeds collected or
to be collected by Transferor.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing; PROVIDED, HOWEVER, that, representations and warranties hereunder
shall survive for a period of three years after the Closing Date, with the
exception of the representations and warranties contained in SECTIONS 3.1, 3.2,
3.3 AND 3.6, the first sentence of SECTION 3.8, and SECTIONS 4.1, 4.2 AND 4.3,
all of which shall survive for the period of the applicable statute of
limitations plus 90 days. All claims for damages made by virtue of any
representations, warranties and agreements herein shall be made under, and
subject to the limitations set forth in, this ARTICLE VII. The representations
and warranties set forth in ARTICLES III and IV are cumulative, and any
limitation or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and warranty
therein. Except the representations and warranties of each party hereto
expressly contained in this Agreement or the Other Agreements, no party hereto
is making and specifically disclaims any representations or warranties of any
kind or character, express or implied.
7.2. INDEMNIFICATION BY TRANSFEROR AND MR. SAYEGH. Transferor and Mr.
Sayegh shall jointly and severally indemnify, defend, save and hold Transferee,
CCG and their officers, directors, employees, agents and Affiliates
(collectively, "Transferee Indemnitees") harmless from and against all demands,
claims, actions or causes of action, assessments, losses, damages, deficiencies,
Liabilities, costs and expenses (including reasonable legal fees, interest,
penalties, and all reasonable amounts paid in investigation, defense or
settlement of any of the foregoing; collectively, "Transferee Damages") asserted
against, imposed upon, resulting to, required to be paid by, or incurred by any
Transferee Indemnitees, directly or indirectly, in connection with, arising out
of, resulting from, or which would not have occurred but for, (i) a material
breach of any representation or warranty made by Transferor in this Agreement,
in any certificate or
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document furnished pursuant hereto by Transferor or any Other Agreement to which
Transferor is or is to become a party, (ii) a breach or nonfulfillment of any
covenant or agreement made by Transferor in or pursuant to this Agreement and in
any Other Agreement to which Transferor is or is to become a party, (iii) any
Retained Liability, (iv) any successor liability (or Liabilities based on
similar theories) arising out of any facts or circumstances occurring prior to
the Closing Date or Liability arising out of or attaching by virtue of
Transferor being a member of a controlled group or affiliated group of entities,
(v) the provisions of 29 U.S.C. ss. 1161-1168, as same may be amended from time
to time, and the regulations and rulings thereunder, with respect to the
employees of Transferor at the Cinema, and (vi) the oil spill on the Leased Real
Estate resulting from the removal of an underground storage tank.
7.3. INDEMNIFICATION BY TRANSFEREE. Transferee and CCG shall indemnify,
defend, save and hold Mr. Sayegh and Transferor and its officers, directors,
employees, Affiliates and agents (collectively, "Transferor Indemnitees")
harmless from and against any and all demands, claims, actions or causes of
action, assessments, losses, damages, deficiencies, Liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing; collectively, "Transferor Damages") asserted against, imposed upon,
resulting to, required to be paid by, or incurred by any Transferor Indemnitees,
directly or indirectly, in connection with, arising out of, resulting from, or
which would not have occurred but for, (i) a material breach of any
representation or warranty made by Transferee or CCG in this Agreement or in any
certificate or document furnished pursuant hereto by Transferee or CCG or any
Other Agreement to which Transferee or CCG is or is to become a party, and (ii)
a breach or nonfulfillment of any covenant or agreement made by any Transferee
or CCG in or pursuant to this Agreement and in any Other Agreement to which any
Transferee or CCG is or is to become a party.
7.4. WAIVER OF STATUTE OF LIMITATIONS. Each party hereto waives any
applicable statute of limitations that may be applicable to Damages arising
under clauses (iii), (iv) and (v) of Section 7.2 and clause (iii) of Section
7.3.
7.5. NOTICE OF CLAIMS. If any Transferee Indemnitee or Transferor
Indemnitee (an "Indemnified Party") believes that it has suffered or incurred or
will suffer or incur any Damages for which it is entitled to indemnification
under this ARTICLE VII, such Indemnified Party shall so notify the party or
parties from whom indemnification is being claimed (the "Indemnifying Party")
with reasonable promptness and reasonable particularity in light of the
circumstances then existing. If any action at law or suit in equity is
instituted by or against a third party with respect to which any Indemnified
Party intends to claim any Damages, such Indemnified Party shall promptly notify
the Indemnifying Party of such action or suit. The failure of an Indemnified
Party to give any notice required by this Section shall not affect any of such
party's rights under this ARTICLE VII or otherwise except and to the extent that
such failure is actually prejudicial to the rights or obligations of the
Indemnified Party.
7.6. THIRD PARTY CLAIMS. The Indemnifying Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnifying Party may compromise or settle
the same, provided that the Indemnifying Party shall give the Indemnified Party
advance notice of any proposed compromise or settlement. The
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<PAGE>
Indemnifying Party shall permit the Indemnified Party to participate in the
defense of any such action or suit through counsel chosen by the Indemnified
Party, provided that the fees and expenses of such counsel shall be borne by the
Indemnified Party (subject to reimbursement pursuant to SECTION 7.1 or 7.2, as
the case may be).
7.7. LIMITATION ON INDEMNIFICATION. No Indemnified Party shall be entitled
to make a claim for indemnification for inaccuracy in or breach of
representation or warranty pursuant to clause (I) of SECTION 7.2 until the
cumulative and aggregate amount of all Damages as a result of all matters
covered by clause (I) of SECTION 7.2 exceeds $10,000 (the "Basket Amount"). If
and when such damages do exceed the Basket Amount, then the Indemnified Party
shall be entitled to indemnification for all such damages in excess of the
Basket Amount. Any indemnification payment under this Agreement shall take into
account any insurance proceeds or other third party reimbursement actually
received (other than the proceeds of any self insurance or, to the extent it is
the economic equivalent of self insurance, any insurance that is retrospectively
rated).
7.8. PAYMENT. All indemnification payments under this ARTICLE VII shall be
made promptly in cash.
ARTICLE VIII.
MISCELLANEOUS
8.1. COSTS AND EXPENSES. Transferee and CCG, on the one hand, and
Transferor and Mr. Sayegh, on the other hand, shall each pay its respective
expenses, brokers' fees and commissions and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, including all
accounting, legal and appraisal fees and settlement charges. All transfer taxes,
if any, incurred as a result of the transfer of the Transferred Assets shall be
paid by Transferor.
8.2. PRORATION OF EXPENSES. All accrued expenses associated with the
Leased Real Estate included in the Transferred Assets, such as rents and other
charges under the Lease Agreement, electricity, gas, water, sewer, telephone,
property taxes, security services and similar items, shall be prorated between
Transferee and Transferor as of the Closing Date. Transferee and Transferor
shall settle such amounts within 30 days after Closing.
8.3. BULK SALES. The parties hereto waive compliance with the provisions
of any bulk sales law applicable to the transactions contemplated hereby, and,
notwithstanding anything else in this Agreement to the contrary, Transferor
shall hold Transferee harmless from and against all claims asserted against the
Transferred Assets or the Transferee pursuant to such bulk sales laws.
Transferor agrees to pay timely its account creditors with respect to
liabilities not being assumed by Transferee hereunder.
8.4. FURTHER ASSURANCES. Transferor shall, at any time and from time to
time on and after the Closing Date, upon the reasonable request by Transferee
and without further consideration, take or cause to be taken such actions and
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments, documents, transfers,
25
<PAGE>
conveyances and assurances as may be required or desirable for the better
conveying, transferring, assigning, delivering, assuring and confirming the
Transferred Assets to Transferee.
8.5. NOTICES. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made (i) the fifth business day after the date of mailing, if delivered
by registered or certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier, with a record of
receipt, or (iv) the next day after the date of dispatch, if sent by cable,
telegram, facsimile or telecopy (with a copy simultaneously sent by registered
or certified mail, postage prepaid, return receipt requested), to the parties at
the following addresses:
(i) if to Transferee, to:
7 Waverly Place
Madison, New Jersey 07940
Telecopy: (201) 377-4303
Attention: A. Dale Mayo, President
with a required copy to:
David L. Forney, Esq.
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
Telecopy: (412) 355-6501
(ii) if to Transferor, to:
Mr. Jesse Y. Sayegh
Rialto Theatre of Westfield, Inc.
244-254 East Broad Street
Westfield, New Jersey 07090
Telecopy:
with a required copy to:
Henry A. Buklad, Jr., Esquire
Buklad & Buklad
76 S. Orange Avenue
South Orange, New Jersey 07079
Telecopy: (201) 762-1329
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
8.6. CURRENCY. All currency references herein are to United States
dollars.
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8.7. OFFSET; ASSIGNMENT; GOVERNING LAW. Transferee and CCG shall be
entitled to offset or recoup from amounts due to Transferor from Transferee or
CCG hereunder or under any Other Agreement against any obligations of Transferor
to Transferee or CCG hereunder or under any Other Agreement (including
Transferee Damages). This Agreement and all the rights and powers granted hereby
shall bind and inure to the benefit of the parties hereto and their respective
permitted successors and assigns. This Agreement and the rights, interests and
obligations hereunder may not be assigned by any party hereto without the prior
written consent of the other parties hereto, except that Transferee or CCG may
make such assignments to any Affiliate of Transferee or CCG provided that
Transferee or CCG remain liable hereunder, and, further, Transferee and CCG may
collaterally assign their rights hereunder to Provident Bank or other commercial
lending institution. This Agreement shall be governed by and construed in
accordance with the laws of New Jersey without regard to its conflict of law
doctrines.
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and
the Schedules and Exhibits set forth all of the promises, covenants, agreements,
conditions and undertakings between the parties hereto with respect to the
subject matter hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express or implied,
oral or written. This Agreement is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder, except the provisions
of SECTIONS 7.2 AND 7.3 relating to Transferee Indemnitees and Transferor
Indemnitees and SECTION 8.10.
8.10. THIRD PARTY BENEFICIARY. No Person is an intended third party
beneficiary of this Agreement.
8.11. SEVERABILITY. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
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<PAGE>
8.12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
THE NEW BELLEVUE THEATER CORP.
By: /s/ Jesse Sayegh
------------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
------------------------------
A. Dale Mayo
Title: President
CCC BELLEVUE CINEMA CORP.
By: /s/ A. Dale Mayo
--------------------------------
A. Dale Mayo
Title: President
28
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1P Permitted Encumbrances
Schedule 3.5 No Changes
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Title; Business
Schedule 3.9 Litigation or Proceedings
Schedule 3.12 Leased Real Estate
Schedule 3.14 Insurance
Schedule 3.16 Employee Benefits
Schedule 3.17 Environmental Matters
Exhibit A Leased Real Estate/Lease Agreement
Exhibit B [Not Used]
Exhibit C Income Statements
Exhibit D Voting Trust Agreement
Exhibit E Registration Rights Agreement
Exhibit F Form of General Warranty Instrument of Assignment
Exhibit G Form of Opinion of Buklad & Buklad
Exhibit H Form of Opinion of Kirkpatrick & Lockhart LLP
[Schedules and Exhibits will be provided upon request.]
Asset Purchase Agreement
Dated as of November 14, 1997
Among
Jesse Sayegh
C.J.M. Enterprises, Inc.
CCC Cedar Grove Cinema Corp.
and
Clearview Cinema Group, Inc.
<PAGE>
ARTICLE I. DEFINITIONS; CONSTRUCTION........................................1
1.1. DEFINITIONS...........................................................1
1.2. CONSTRUCTION..........................................................5
ARTICLE II. THE TRANSACTION..................................................5
2.1. SALE AND PURCHASE OF ASSETS...........................................5
2.2. CASH; ETC.............................................................6
2.3. RETAINED ASSETS......................................................6
2.4. [NOT USED]............................................................6
2.5. RETAINED LIABILITIES..................................................6
2.6. PURCHASE PRICE; DEPOSIT...............................................7
2.7. CLOSING...............................................................7
2.8. PAYMENT OF PURCHASE PRICE.............................................8
2.9. ALLOCATION OF PURCHASE PRICE..........................................8
2.10. TITLE................................................................8
2.11. CERTAIN CONSENTS.....................................................8
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER........................8
3.1. ORGANIZATION..........................................................8
3.2. AUTHORIZATION; ENFORCEABILITY.........................................8
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS..........................9
3.4. CINEMA INCOME STATEMENTS..............................................9
3.5. NO CHANGES...........................................................10
3.6. TAXES................................................................10
3.7. UNDISCLOSED LIABILITIES..............................................10
3.8. CONDITION OF ASSETS; TITLE; BUSINESS.................................10
3.9. NO PENDING LITIGATION OR PROCEEDINGS.................................10
3.10. CONTRACTS...........................................................11
3.11. PERMITS; COMPLIANCE WITH LAW........................................11
3.12. LEASED REAL ESTATE..................................................11
3.13. LABOR RELATIONS.....................................................11
3.14. INSURANCE...........................................................12
3.15. INTELLECTUAL PROPERTY RIGHTS........................................12
3.16. EMPLOYEE BENEFITS...................................................12
3.17. ENVIRONMENTAL MATTERS...............................................13
3.18. ADDITIONAL THEATERS. Neither.......................................14
3.19. FINDERS' FEES.......................................................14
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER.........................14
4.1. ORGANIZATION.........................................................14
4.2. AUTHORIZATION AND ENFORCEABILITY.....................................14
4.3. NO VIOLATION OF LAWS; CONSENTS.......................................14
4.4. NO PENDING LITIGATION OR PROCEEDINGS.................................15
4.5. FINDERS' FEES........................................................15
4.6. STOCK OWNERSHIP......................................................15
ARTICLE V. CERTAIN COVENANTS................................................15
5.1. CONDUCT OF BUSINESS PENDING CLOSING..................................15
5.2. FULFILLMENT OF AGREEMENTS............................................16
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS.......................16
5.4. SELLER'S EMPLOYEES...................................................17
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS..........................17
5.6. COVENANT NOT TO COMPETE..............................................17
5.7. PUBLICITY............................................................18
5.8. TRANSITIONAL MATTERS.................................................18
5.9. BOOKS AND RECORDS....................................................18
5.10. PERMITS; N.J. ISRA..................................................18
5.11. RIGHT OF FIRST REFUSAL..............................................18
ARTICLE VI. CONDITIONS TO CLOSING; TERMINATION..............................19
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER..........................19
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER AND MR. SAYEGH..........20
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING................................21
6.4. TERMINATION..........................................................23
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION...................25
7.1. SURVIVAL OF REPRESENTATIONS..........................................25
7.2. INDEMNIFICATION BY SELLER AND MR. SAYEGH.............................25
7.3. INDEMNIFICATION BY BUYER.............................................25
7.4. WAIVER OF STATUTE OF LIMITATIONS.....................................26
7.5. NOTICE OF CLAIMS.....................................................26
7.6. THIRD PARTY CLAIMS...................................................26
7.7. LIMITATION ON INDEMNIFICATION........................................26
7.8. PAYMENT..............................................................27
<PAGE>
ARTICLE VIII. MISCELLANEOUS.................................................27
8.1. COSTS AND EXPENSES...................................................27
8.2. PRORATION OF EXPENSES................................................27
8.3. BULK SALES...........................................................27
8.4. FURTHER ASSURANCES...................................................27
8.5. NOTICES..............................................................27
8.6. CURRENCY.............................................................28
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW....................................28
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT..............................29
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.......................29
8.10. THIRD PARTY BENEFICIARY.............................................29
8.11. SEVERABILITY........................................................29
8.12. COUNTERPARTS........................................................29
<PAGE>
Asset Purchase Agreement ("Agreement"), dated as
of November 14, 1997, by and among Jesse Sayegh,
an individual residing in _________, New Jersey
("Mr. Sayegh"), C.J.M. Enterprises, Inc., a New
Jersey corporation ("Seller"), CCC Cedar Grove
Cinema Corp., a Delaware corporation ("Buyer"),
and Clearview Cinema Group, Inc., a Delaware
corporation ("CCG").
Seller currently owns and operates a five-screen movie cinema located at
Cedar Grove, New Jersey (the "Cinema"). Buyer is a wholly owned subsidiary of
CCG.
Mr. Sayegh leases the real estate on which the Cinema is located, as such
real estate and lease are more particularly described on Exhibit A hereto (the
"Leased Real Estate").
Seller desires to sell and assign to Buyer, and Buyer desire to purchase
and assume from Seller, the Cinema and the Leased Real Estate on the terms and
subject to the conditions set forth below.
In consideration of the representations, warranties, covenants and
agreements contained herein, Seller, Buyer, Mr. Sayegh and CCG, each intending
to be legally bound hereby, agree as set forth below.
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1. DEFINITIONS. As used in this Agreement, the following terms have the
meanings specified in this SECTION 1.1. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"Agreement" means this Asset Purchase Agreement, as it may be amended from
time to time.
"Basket Amount" has the meaning given that term in SECTION 7.7.
"Benefit Plan" means any written and unwritten "employee benefit plans"
within the meaning of Section 3(3) of ERISA, and any other written and unwritten
profit sharing, pension, savings, deferred compensation, fringe benefit,
insurance, medical, medical reimbursement, life, disability, accident,
post-retirement health or welfare benefit, stock option, stock purchase, sick
pay, vacation, employment, severance, termination or other plan, agreement,
contract, policy, trust fund or arrangement, whether or not funded and whether
or not terminated, (i) maintained or sponsored by Seller, or (ii) with respect
to which Seller has or may have Liability or is obligated to contribute, or
(iii) that otherwise covers any of the current or former employees of Seller or
<PAGE>
their beneficiaries, or (iv) as to which any such current or former employees of
Seller or their beneficiaries participated or were entitled to participate or
accrue or have accrued any rights thereunder.
"Business" means the operation of the Cinema.
"Buyer" has the meaning given that term in the heading of this Agreement.
"Buyer Damages" has the meaning given that term in SECTION 7.2.
"Buyer Indemnitees" has the meaning given that term in SECTION 7.2.
"CCG" has the meaning given that term in the heading of this Agreement.
"CERCLIS" means the United States Comprehensive Environmental Response
Compensation Liability Information System List pursuant to Superfund.
"Cinema" has the meaning given that term in the first introductory
paragraph of this Agreement.
"Closing" has the meaning given that term in SECTION 2.7.
"Closing Date" has the meaning given that term in SECTION 2.7.
"Code" means the United States Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Damages" means Buyer Damages or Seller Damages, as the case may be.
"Deposit" has the meaning given that term in SECTION 2.6.
"Encumbrance" means any liability, debt, mortgage, deed of trust, pledge,
security interest, encumbrance, option, right of first refusal, agreement of
sale, adverse claim, easement, lien, assessment, restrictive covenant,
encroachment, burden or charge of any kind or nature whatsoever or any item
similar or related to the foregoing.
"Environmental Law" means any applicable Law relating to public health and
safety or protection of the environment, including common law nuisance, property
damage and similar common law theories.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended, and the applicable rulings and regulations thereunder.
"GAAP" means United States generally accepted accounting principles as
they would be applied to the Cinema.
"Governing Documents" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing
2
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agreement and other charter documents or organization or governing documents or
instruments of such Person.
"Governmental Body" means any court, government (federal, state, local or
foreign), department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority or instrumentality.
"Income Statements" has the meaning given that term in SECTION 3.4.
"Indemnified Party" has the meaning given that term in SECTION 7.5.
"Indemnifying Party" has the meaning given that term in SECTION 7.5.
"Intellectual Property Rights" means trademark and service mark rights,
applications and registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications, letters patent,
patent applications and licenses of any of the foregoing, improvements,
blueprints, specifications, drawings, designs and other intellectual property
and proprietary rights.
"IRS" means the United States Internal Revenue Service.
"Law" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, judgment or order of any kind or
nature whatsoever including any public policy, judgment or order of any
Governmental Body or principle of common law.
"Lease Agreement" mean the Lease Agreement for the Cinema identified on
EXHIBIT A hereto.
"Leased Real Estate" has the meaning given that term in the second
introductory paragraph of this Agreement.
"Liabilities" with respect to any Person, means all debts, liabilities and
obligations of such Person of any nature or kind whatsoever, whether or not due
or to become due, accrued, fixed, absolute, matured, determined, determinable or
contingent and whether or not incurred directly by such Person or by any
predecessor of such Person, and whether or not arising out of any act, omission,
transaction, circumstance, sale of goods or service or otherwise.
"Litigation" has the meaning given that term in SECTION 3.9.
"Other Agreements" means the Subordinated Note and the other agreements
and instruments of title, assignment or assumption hereunder.
"Permits" has the meaning given that term in SECTION 3.11.
"Permitted Encumbrances" means liens for current taxes not yet due and
liens of public record on personal property identified on SCHEDULE 1.1P.
3
<PAGE>
"Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, a Governmental Body and any
other legal entity.
"Purchase Price" has the meaning given that term in SECTION 2.6.
"Purchased Assets" has the meaning given that term in SECTION 2.1(D).
"Regulated Material" means any hazardous substance as defined by any
Environmental Law and any other material regulated by any applicable
Environmental Law, including petroleum, petroleum-related material, crude oil or
any fraction thereof, PCBs and friable asbestos.
"Related Party" means (i) Seller, (ii) any Affiliate of Seller, (iii) any
officer or director of any Person identified in clauses (i) or (ii) preceding,
and (iv) any spouse, sibling, ancestor or lineal descendant of any natural
Person identified in any one of the preceding clauses.
"Retained Assets" has the meaning given that term in SECTION 2.3.
"Retained Liabilities" has the meaning given that term in SECTION 2.5.
"Seller" has the meaning given that term in the heading of this Agreement.
"Seller Damages" has the meaning given that term in SECTION 7.3.
"Seller Group" means Seller and any corporation that may be aggregated
with Seller under Sections 414(b), (c), (m) or (o) of the Code.
"Seller Indemnitees" has the meaning given that term in SECTION 7.3.
"Seller's Predecessor" means any predecessor in interest to Seller,
whether by merger, combination, reorganization or otherwise.
"Subordinated Note" means CCG's 10% Subordinated Promissory Note payable
to Seller in the principal amount of $210,000 in the form attached hereto as
EXHIBIT B.
"Superfund" means the United States Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. Sections 6901 ET SEQ., as
amended.
"Tax" means any domestic or foreign federal, state, county or local tax,
levy, impost or other charge of any kind whatsoever, including any interest or
penalty thereon or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, including any schedule or
attachment thereto, and including any amendment thereof.
4
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1.2. CONSTRUCTION. As used herein, unless the context otherwise requires:
(i) references to "Article" or "Section" are to an article or section hereof;
(ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits and
Schedules attached hereto and are incorporated herein by reference and made a
part hereof; (iii) "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II.
THE TRANSACTION
2.1. SALE AND PURCHASE OF ASSETS. Except as otherwise provided in SECTIONS
2.2 and 2.3, At the Closing, Seller shall sell, transfer and assign to Buyer,
and Buyer shall purchase from Seller, all of Seller's properties and business as
a going concern, and goodwill and tangible or intangible assets of every kind,
nature and description existing on the Closing Date located at or used in
connection with the Cinema, whether personal, in electronic form or otherwise,
and whether or not any of such assets have any value for accounting purposes or
are carried or reflected on or specifically referred to in its books or
financial statements, free and clear of all Encumbrances (collectively, the
"Purchased Assets"). Without limiting the foregoing, the Purchased Assets shall
include the following:
(i) All of Seller's tangible assets, including office furniture,
office equipment and supplies, computer hardware and software, projectors,
projector bulbs, ticketing machines, leasehold improvements on or related to the
Leased Real Estate or related to the Business;
(ii) All of Seller's books, records, manuals, documents, books of
account, correspondence, sales reports, literature, brochures, advertising
material and the like related to the Business (other than accounting records and
corporate books and records as defined in SECTION 2.3);
(iii) All of Seller's inventory and supplies, including concession
products, candy items and paper goods for the Business;
(iv) All of Seller's rights under leases for personal property, if
any;
(v) All of Seller's rights under the Permits;
(vi) All of Seller's goodwill and rights in and to the name "Cedar
Grove";
(vii) Seller's rights to the telephone numbers for Cinema location;
and
(viii) The goodwill of the Business.
Mr. Sayegh shall at Closing assign all of his interests in the Leased Real
Estate and the Lease Agreement to Buyer, and Buyer shall assume the Lease
Agreement, for no additional consideration.
5
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2.2. CASH; ETC. Buyer shall purchase petty cash on hand at the Cinema at
the close of business on the date immediately preceding the Closing Date, the
purchase price of cash to be face value, subject to a physical count of such
cash by Buyer and Seller. If the use by customers of the Cinema of pre-sold
tickets sold by Seller shall exceed $100 in the aggregate, Seller shall promptly
pay to Buyer an amount equal to such use in excess of $100.
2.3. RETAINED ASSETS. Except for the Purchased Assets, Buyer is not
purchasing and Seller is not selling the name "CJM Enterprises" or any variant
or derivative of such name and Seller's accounting records and corporate minute
books, stock books and corporate seal (collectively, the "Retained Assets").
Accounting Records of Seller shall remain the exclusive property of Seller in
accord with this Section, and shall mean any and all books of original entry,
including any register or computer tapes, all journals or ledgers, all canceled
checks, payroll records, bank or other account statements, including account
statements or reports to or from any vendors, suppliers, film companies, or
otherwise, including any correspondence relating to same or to any other items
designated as an accounting record hereunder, and including all financial
statements, records, tax returns, and all workpapers or supporting information
relating thereto, including all information gathered or compiled by Seller or
Seller's agents or accountants therefor, or summaries of same, including all
disks, print-outs, or other digital or analog, written or electronic recording
thereof. The Purchased Assets shall not include any permits that are
non-transferable. Seller knows of no reason why any permit issued to Seller for
use in its business would not be issued to Buyer for use by it after the
Closing, assuming only Buyer is qualified to receive same.
2.4. [NOT USED].
2.5. RETAINED LIABILITIES. Buyer does not hereby and shall not assume or
in any way undertake to pay, perform, satisfy or discharge any other Liability
of Seller, whether existing on, before or after the Closing Date or arising out
of any transactions entered into, or any state of facts existing on, prior to or
after the Closing Date (the "Retained Liabilities"), and Seller agrees to pay
and satisfy when due all Retained Liabilities. Without limiting the foregoing,
the term "Retained Liabilities" shall include Liabilities:
(i) to any Related Party;
(ii) for or under any Benefit Plan;
(iii) for any Taxes, whether or not by reason of, or in connection
with, the transactions contemplated by this Agreement;
(iv) with respect to Seller's administrative and corporate
operations; and
(v) to any film distributor.
Buyer acknowledges that Buyer is responsible for any and all liabilities of the
Business first occurring after the Closing Date.
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2.6. PURCHASE PRICE; DEPOSIT. The aggregate purchase price for all of the
Purchased Assets shall be $3.25 million, plus amounts payable for the inventory
and petty cash (the "Purchase Price"). At the close of business on the last
business day prior to the Closing Date, Seller and Buyer shall take a physical
count of Seller's inventory being sold by Seller to Buyer under this Agreement.
Seller's inventory shall include concession products, candy items, paper goods
and other similar items, but shall not include projector bulbs which shall be
deemed to be equipment for purposes of this Agreement. Inventory shall be valued
at Seller's cost, determined on a first-in-first-out basis. Buyer shall pay
Seller for all inventory at the Closing, provided that such inventories do not
exceed amounts that would be expected as customary in the ordinary course of
business. Buyer shall deliver to Seller within three business days after
obtaining landlord's consent to the assignment to Buyer of the Lease Agreement
on terms acceptable to both Buyer and Seller a good faith deposit equal to
$15,000 (the "Deposit"). The Deposit shall be applied against the cash portion
of the Purchase Price if there is a Closing hereunder. If there is no Closing
hereunder, then the Deposit shall be promptly returned to Buyer, unless Buyer is
in material breach hereof and such material breach was the sole cause of the
failure to Close hereunder. The Deposit shall be held in escrow by Seller's
counsel (as a fiduciary) subject to the terms of this Agreement.
2.7. CLOSING. The consummation of the purchase and sale of the Purchased
Assets and the consummation of the other transactions contemplated hereby (the
"Closing") shall take place at 10:00 a.m., local time, on December 12, 1997 at
the offices of Kirkpatrick & Lockhart, LLP, 1251 Avenue of the Americas, New
York, New York, 10020-1104 or at such other time, date or place as the parties
agree (the "Closing Date"). Closing shall be effective at 12:01 a.m. on the
Closing Date.
2.8. PAYMENT OF PURCHASE PRICE. At Closing, the Purchase Price shall be
paid by Buyer and CCG to Seller as follows:
(i) by Buyer's delivery to Seller immediately available funds equal
to $3.04 million, minus the amount of the Deposit; and
(ii) by delivery of the Subordinated Note.
2.9. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Purchased Assets as follows: $640,000 shall be allocated to equipment,
furniture and fixtures for the Cinema and $2,610,000 shall be allocated to the
remaining assets of the Cinema. Buyer and Seller shall report the federal, state
and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation and shall not
take any position inconsistent therewith upon examination of any Tax Return, in
any refund claim, in any litigation, or otherwise.
2.10. TITLE. Title to all Purchased Assets shall pass from Seller to Buyer
at Closing, subject to the terms and conditions of this Agreement. Buyer assume
no risk of loss to the Purchased Assets prior to Closing.
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2.11. CERTAIN CONSENTS. Nothing in this Agreement shall be construed as an
attempt to assign any Permit included in the Purchased Assets which is by its
terms or in law nonassignable without the consent of the other party or parties
thereto, unless such consent shall have been given, or as to which all the
remedies for the enforcement thereof enjoyed by Seller would not, as a matter of
law, pass to Buyer as an incident of the assignments provided for by this
Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer and CCG to enter into this Agreement and
consummate the transactions contemplated hereby, Seller and Mr. Sayegh jointly
and severally represent and warrant to Buyer and CCG as follows:
3.1. ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and has
the power and authority to own or lease its properties, carry on the Business as
now conducted, enter into this Agreement and the Other Agreements to which it is
or is to become a party and perform its obligations hereunder and thereunder.
3.2. AUTHORIZATION; ENFORCEABILITY. This Agreement and each Other
Agreement to which Seller is a party have been duly executed and delivered by
and constitute the legal, valid and binding obligations of Seller and Mr.
Sayegh, enforceable against them in accordance with their respective terms. Each
Other Agreement to which Seller and Mr. Sayegh are to become a party pursuant to
the provisions hereof, when executed and delivered by Seller and Mr. Sayegh,
will constitute the legal, valid and binding obligation of Seller and Mr.
Sayegh, enforceable against them in accordance with the terms of such Other
Agreement. All actions contemplated by this Section have been duly and validly
authorized by all necessary proceedings by Seller.
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS. Neither the execution
and delivery of this Agreement or any Other Agreement to which Seller or Mr.
Sayegh is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the compliance with or fulfillment of the
terms, conditions or provisions hereof or thereof by Seller or Mr. Sayegh will:
(i) contravene any provision of any Governing Document of Seller, (ii) conflict
with, result in a breach of, constitute a default or an event of default (or an
event that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
the termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under, any Purchased
Asset or any other material contract, agreement or instrument to which Seller or
Mr. Sayegh is a party or by which any of their assets may be bound or affected,
(iii) result in the creation, maturation or acceleration of any Liability of
Seller or Mr. Sayegh (or give to any other Person the right to cause such a
creation, maturation or acceleration), (iv) violate any Law or violate any
judgment or order of any Governmental Body to which Seller is subject or by
which any of the Purchased Assets or any of its other assets may be bound or
affected, or (v) result in the creation or imposition of any Encumbrance upon
any of the Purchased Assets or give to any other Person any interest or right
therein. Except for the consents of the landlord under the Lease Agreement, no
consent, approval or authorization of, or registration or filing with, any
Person is required in
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connection with the execution and delivery by Seller or Mr. Sayegh of this
Agreement or any of the Other Agreements to which it is or is to become a party
pursuant to the provisions hereof or the consummation by Seller or Mr. Sayegh of
the transactions contemplated hereby or thereby.
3.4. CINEMA INCOME STATEMENTS. Attached hereto as Exhibit D are the income
statements for the Cinema for the years ended December 31, 1995, and December
31, 1996 and for the nine month period ended August 31, 1997 (the "Income
Statements"). The Income Statements (i) are correct and complete, (ii) have been
prepared in accordance with GAAP on a consistent basis, and (iii) fairly present
the results of operation of the Cinema for the periods then ended in accordance
with GAAP. Seller has no money due and owing to any film distributor in
connection with the Cinema except for money owing in the normal course of
business for which an amount is not ascertainable to pay or which is not due
prior to Closing. The aggregate gross box office revenues for the Cinema for
calendar year 1996 was $________ and for the period from January 1, 1997 through
August 31, 1997 was $1,086,226. The aggregate gross concession revenues for the
Cinema for calendar year 1996 was $________ and for the period from January 1,
1997 through August 31, 1997, was $310,739. Earnings before interest, taxes and
depreciation and amortization for the Cinema for the period from January 1, 1997
through August 31, 1997 was at least $459,000.
3.5. NO CHANGES. Since September 30, 1996, Seller has conducted the
Business only in the ordinary course. Without limiting the generality of the
foregoing sentence, since September 30, 1996, there has not been any: (i)
material adverse change in the Purchased Assets or Leased Real Estate; (ii)
damage or destruction to any Purchased Asset or Leased Real Estate, whether or
not covered by insurance; (iii) strike or other labor trouble at the Cinema;
(iv) increase in the salary, wage or bonus of any employee of the Cinema; or (v)
agreement or commitment to do any of the foregoing. Except as provided on
SCHEDULE 3.5, since September 30, 1996, Seller has not made any material
changes, substitutions or replacements to the equipment, furniture or fixtures
at the Cinema.
3.6. TAXES. Seller, its Affiliates and Seller's Predecessor, have filed or
caused to be filed on a timely basis, or will file or cause to be filed on a
timely basis, all Tax Returns that are required to be filed by it prior to or on
the Closing Date, pursuant to the Law of each governmental authority with taxing
power over it. All such Tax Returns were or will be, as the case may be, correct
and complete. Seller and Seller's Predecessor have paid or will pay all Taxes
that have or will become due as shown on such Tax Returns or pursuant to any
assessment received as an adjustment to such Tax Returns (subject to all rights
of appeal by Buyer). Seller and Seller's Predecessor have withheld and paid all
Taxes required to have been withheld in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third
party.
3.7. UNDISCLOSED LIABILITIES. Except as disclosed on SCHEDULE 3.7, Seller
has no, and after Closing shall have no, Liabilities of any kind or nature
whatsoever that would attach to the Purchased Assets or for which any Buyer or
CCG may become liable.
3.8. CONDITION OF ASSETS; TITLE; BUSINESS. Seller has good, marketable and
exclusive title to all of the Purchased Assets. The tangible Purchased Assets
are in good operating
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condition and repair suitable for the purposes for which they are used in the
Business, and all equipment included in the Purchased Assets have been
maintained in the normal course of business by qualified professionals. Except
as disclosed on SCHEDULE 3.8 and except for Permitted Encumbrances, none of the
Purchased Assets is subject to any Encumbrance. SCHEDULE 3.8 identifies any
property located on the Leased Real Estate that is not owned by Seller. The
Encumbrances identified on SCHEDULE 3.8 will be removed by Seller on or prior to
Closing. The Purchased Assets do not contain any shares of capital stock of or
other equity interest in any Person. On the Closing Date, the Purchased Assets
will include at a minimum (i) one functioning xenon projector bulb for each
auditorium in the Cinema, and (ii) one new, unused, spare xenon projector bulb
for each type of projector at the Cinema location.
3.9. NO PENDING LITIGATION OR PROCEEDINGS. No action, suit, investigation,
claim or proceeding of any nature or kind whatsoever, whether civil, criminal or
administrative, by or before any Governmental Body or arbitrator ("Litigation")
is pending or, to the knowledge of Seller and Mr. Sayegh, threatened against or
affecting Seller, Mr. Sayegh, the Business, any of the Purchased Assets, the
Leased Real Estate, or any of the transactions contemplated by this Agreement or
any Other Agreement except for claims for personal injury and workers
compensation and further except for claims for property damage identified on
SCHEDULE 3.9 and claims by Governmental Bodies identified on SCHEDULE 3.9. There
is presently no outstanding judgment, decree or order of any Governmental Body
against or affecting Seller, Mr. Sayegh, the Business, any of the Purchased
Assets, the Leased Real Estate, or any of the transactions contemplated by this
Agreement or any Other Agreement. Neither Seller nor Mr. Sayegh has any pending
any Litigation against any third party related to the Business.
3.10. CONTRACTS. There is no written contract, lease or other agreement,
that materially affects or is used in the Business or the Leased Real Estate
other than the Lease Agreement. The Lease Agreement is a legal, valid and
binding obligation of Seller and is in full force and effect. Seller and each
other party to the Lease Agreement has performed all obligations required to be
performed by it thereunder and is not in breach or default, and is not alleged
to be in breach or default, in any respect thereunder, and, to the knowledge of
Seller and Mr. Sayegh, no event has occurred and no condition or state of facts
exists (or would exist upon the giving of notice or the lapse of time or both)
that would become or cause a breach, default or event of default thereunder,
would give to any Person the right to cause such a termination or would cause an
acceleration of any obligation thereunder. Seller is not currently renegotiating
the Lease Agreement.
3.11. PERMITS; COMPLIANCE WITH LAW. Subject to SECTION 5.10, Seller holds
all health department and certificates of occupancy required under any
applicable Law in connection with the operation of the Business and use and
occupancy of the Leased Real Estate ("Permits"). The Purchased Assets include
all Permits other than the occupancy permit which must be obtained under local
law by Buyer. Seller has received no notice of any violation of Law which has
not been remedied or rectified.
3.12. LEASED REAL ESTATE. Mr. Sayegh has the right to quiet enjoyment of
all Leased Real Estate, including all renewal rights under the Lease Agreement.
Mr. Sayegh has not received any written or oral notice of assessments for public
improvements against any Leased Real Estate
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or any written or oral notice or order by any Governmental Body, any insurance
company that has issued a policy with respect to any of such properties or any
board of fire underwriters or other body exercising similar functions that
relates to violations of building, safety or fire ordinances or regulations,
claims any defect or deficiency with respect to any of such properties or
requests the performance of any repairs, alterations or other work to or in any
of such properties or in the streets bounding the same, which in each case has
not been remedied or rectified. There is no pending condemnation, expropriation,
eminent domain or similar proceeding affecting all or any portion of the Leased
Real Estate. Mr. Sayegh has not received any written notice of any proposed,
planned or actual curtailment of service of any utility supplied to the Leased
Real Estate. None of the Leased Real Estate is subleased to any person. The Real
Estate Leases are in full force and effect in accordance with their terms, and
have not been modified or amended (other than as disclosed on Exhibit A) and, to
the knowledge of Seller and Mr. Sayegh, no party thereto is in default under any
of the terms contained therein.
3.13. LABOR RELATIONS. No employee of Seller is represented by any union
or other labor organization. No representation election, arbitration proceeding,
grievance, labor strike, dispute, slowdown, stoppage or other labor trouble is
pending or, to the knowledge of Seller and Mr. Sayegh, threatened against,
involving, affecting or potentially affecting Seller. No complaint against
Seller or Seller's Predecessor is pending or, to the knowledge of Seller and Mr.
Sayegh, threatened before the National Labor Relations Board, the Equal
Employment Opportunity Commission or any similar state or local agency, by or on
behalf of any employee of Seller or Seller's Predecessor. To the knowledge of
Seller and Mr. Sayegh, Seller has no Liability for any occupational disease of
any of its employees, former employees or others.
3.14. INSURANCE. SCHEDULE 3.14 discloses all insurance policies on an
"occurrence" basis with respect to which Seller or Seller's Predecessor is the
owner, insured or beneficiary.
3.15. INTELLECTUAL PROPERTY RIGHTS. Seller neither owns nor is licensee to
any form of Intellectual Property Rights related to the Cinema other than the
names "CJM Enterprises", which is a Retained Asset, and rights to show films to
the public according to agreements which are Retained Assets and Retained
Liabilities. To the knowledge of Seller and Mr. Sayegh, no other Person has any
rights to the names "Cedar Grove" in connection with the use of a cinema in
Cedar Grove, New Jersey. To the knowledge of Seller and Mr. Sayegh, Seller is
not infringing upon the intellectual property rights of any other Person.
SCHEDULE 3.14 identifies all computer software owned by Seller. With respect to
any such computer software, the Seller makes no agreement or other warranties or
representations hereunder other than that Seller a licensee of certain computer
software used by it in connection with certain computer hardware that Seller is
selling to Buyer hereunder and as to any license for software used with respect
to said computer hardware,
(a) Seller will assign to Buyer at Closing any rights, title, or interest
in said software, but without warranty,
(b) Seller's obligation to sell, transfer, or assign any such software as
is otherwise called for above shall be void if prohibited by any such license,
and
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(c) At Closing, regardless of whether (a) or (b) is the case, the price
paid by Buyer to Seller will remain as is otherwise called for in the agreement.
3.16. EMPLOYEE BENEFITS. Except for medical and dental coverage, life
insurance, and long-term disability plans described on SCHEDULE 3.16 for those
managers of the Cinema identified on SCHEDULE 3.16, Seller does not maintain any
Benefit Plan for any employees employed at the Cinema. After the Closing,
neither Buyer or CCG will have any Liability, with respect to any Benefit Plan
of Seller or any other member of the Seller Group, whether as a result of
delinquent contributions, distress terminations, fraudulent transfers, failure
to pay premiums to the PBGC, withdrawal Liability or otherwise. SCHEDULE 3.16
identifies the names of all employees of Seller employed at the Cinema,
including each listed employee's address, current compensation, vacation time to
which he or she is entitled and vacation time so far taken. SCHEDULE 3.16 also
includes copies of Seller's payroll records for all persons currently employed
by Seller at the Cinema. There are no written or oral agreements or arrangements
providing for the employment by Seller of any person at the Cinema other than
"at will" agreements. All employees of Seller at the Cinema are employees at
will. Seller does not provide a motor vehicle to any employee of Seller at the
Cinema.
3.17. ENVIRONMENTAL MATTERS. The representations and warranties contained
in this Section are qualified by (i) the disclosures on SCHEDULE 3.17, (ii) the
knowledge of Seller and Mr. Sayegh as to the activities of Seller's
Predecessors, and (iii) the knowledge of Seller and Mr. Sayegh as to the
activities of third parties prior to the time that Seller took possession of the
property subject to the Lease Agreement:
(a) COMPLIANCE; NO LIABILITY. Seller and Seller's Predecessor have
operated the Business and each parcel of Leased Real Estate in compliance with
all applicable Environmental Laws. Seller is not subject to any Liability,
penalty or expense (including legal fees) in connection with the Business or
ownership or leasing of the Leased Real Estate by virtue of any violation of any
Environmental Law, any environmental activity conducted on or with respect to
any property or any environmental condition existing on or with respect to any
property, in each case whether or not Seller or Seller's Predecessors permitted
or participated in such act or omission.
(b) TREATMENT; CERCLIS. Neither Seller nor Seller's Predecessors have
treated, stored, recycled or disposed of any Regulated Material on any Leased
Real Estate in violation of applicable Environmental Laws, and, to the knowledge
of Seller and Mr. Sayegh, no other Person has treated, stored, recycled or
disposed of any Regulated Material on any part of the Leased Real Estate in
violation of applicable Environmental Laws. There has been no release of any
Regulated Material at, on or under any Leased Real Estate. Neither Seller nor
Seller's Predecessors have transported or arranged for the transportation of any
Regulated Material from the Cinema to any location that is listed or proposed
for listing on the National Priorities List pursuant to Superfund, on CERCLIS or
any other location that is the subject of federal, state or local enforcement
action or other investigation that may lead to claims against Seller or Seller's
Predecessor for cleanup costs, remedial action, damages to natural resources, to
other property or for personal injury including claims under Superfund.
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(c) NOTICES; EXISTING CLAIMS; CERTAIN REGULATED MATERIALS; STORAGE TANKS.
Neither Seller nor Seller's Predecessors have received any request for
information, notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation, abatement or cleanup
of any threatened or actual release of any Regulated Material. To the knowledge
of Seller and Mr. Sayegh, Seller is not required to place any notice or
restriction relating to the presence of any Regulated Material at any Leased
Real Estate. There has been no past, and there is no pending or contemplated,
claim by Seller or Seller's Predecessor under any Environmental Law or Laws
based on actions of others that may have impacted on the Leased Real Estate, and
neither Seller nor Seller's Predecessors has entered into any agreement with any
Person regarding any remedial action or existing environmental Liability or
expense with respect to any of the Real Property or any real property adjacent
to the Real Property. To the knowledge of Seller and Mr. Sayegh, all storage
tanks located on the Leased Real Estate, whether underground or aboveground, are
disclosed on SCHEDULE 3.17. Seller has not closed or caused to be closed any
underground storage tank on the Leased Real Estate.
3.18. ADDITIONAL THEATERS. Neither Seller nor Mr. Sayegh has any knowledge
of the intention by any person to construct or open any movie theater within a
five-mile radius of the Cinema.
3.19. FINDERS' FEES. Neither Seller nor any of its officers, managers or
employees has employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby or by any Other Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer and CCG jointly and severally represent
and warrant to Seller and Mr. Sayegh as follows:
4.1. ORGANIZATION. Buyer and CCG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to own or lease its properties, carry on its
business, enter into this Agreement and the Other Agreements to which it is or
is to become a party and perform its obligations hereunder and thereunder.
4.2. AUTHORIZATION AND ENFORCEABILITY. This Agreement and each Other
Agreement to which Buyer and CCG is a party have been duly executed and
delivered by and constitute the legal, valid and binding obligations of Buyer
and CCG, enforceable against it in accordance with their respective terms. Each
Other Agreement to which Buyer and CCG is to become a party pursuant to the
provisions hereof, when executed and delivered by Buyer and CCG, will constitute
the legal, valid and binding obligation of Buyer and CCG, enforceable against
Buyer and CCG in accordance with the terms of such Other Agreement. All actions
contemplated by this Section have been duly and validly authorized by all
necessary proceedings by Buyer and CCG.
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4.3. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and delivery of
this Agreement or any Other Agreement to which Buyer or CCG is or is to become a
party, the consummation of the transactions contemplated hereby or thereby nor
the compliance with or fulfillment of the terms, conditions or provisions hereof
or thereof by Buyer or CCG will: (i) contravene any provision of the Governing
Documents of any Buyer or CCG, (ii) conflict with, result in a breach of,
constitute a default or an event of default (or an event that might, with the
passage of time or the giving of notice or both, constitute a default or event
of default) under any of the terms of, result in the termination of, result in
the loss of any right under, or give to any other Person the right to cause such
a termination of or loss under, any contract, agreement or instrument to which
any Buyer or CCG is a party or by which any of their assets may be bound or
affected, (iii) result in the creation, maturation or acceleration of any
Liability of any Buyer or CCG (or give to any other Person the right to cause
such a creation, maturation or acceleration), or (iv) violate any Law or any
judgment or order of any Governmental Body to which any Buyer or CCG is subject
or by which any of its assets may be bound or affected. Except for the consent
of Provident Bank, no consent, approval or authorization of, or registration or
filing with, any Person is required in connection with the execution or delivery
by Buyer or CCG of this Agreement or any of the Other Agreements to which Buyer
or CCG is or is to become a party pursuant to the provisions hereof or the
consummation by Buyer or CCG of the transactions contemplated hereby or thereby.
4.4. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending or, to
the knowledge of any Buyer or CCG, threatened against or affecting CCG or any
Affiliate of CCG in connection with any of the transactions contemplated by this
Agreement or any Other Agreement to which Buyer and CCG is or is to become a
party or that would, to CCG's knowledge, have a material adverse effect on CCG's
business considered as a whole. There is presently no outstanding judgment,
decree or order of any Governmental Body against or affecting CCG or any
Affiliate of CCG in connection with the transactions contemplated by this
Agreement or any Other Agreement to which any Buyer or CCG is or is to become a
party or that would, to CCG's knowledge, have a material adverse effect on CCG's
ability to pay the Subordinated Note.
4.5. FINDERS' FEES. Neither Buyer, CCG nor any of their officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fee, commission or finders' fee in connection with
any of the transactions contemplated hereby.
4.6. STOCK OWNERSHIP. CCG owns all of the issued and outstanding capital
stock of the Buyer.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date, unless Buyer shall otherwise consent in writing,
Seller shall (and Mr. Sayegh shall cause Seller to) conduct its affairs as
follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted only in
the ordinary course and consistent with past practice. Seller and Mr. Sayegh
shall maintain the
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Purchased Assets and the Leased Real Estate consistent with past practice and
shall comply in a timely fashion with the provisions of all Permits and its
other agreements and commitments. Seller shall use its best efforts to keep the
Business organization intact, keep available the services of its present
employees and preserve the goodwill of its suppliers, patrons and others having
business relations with it. Seller shall maintain in full force and effect its
policies of insurance, subject only to variations required by the ordinary
operations of the Business, or else shall obtain, prior to the lapse of any such
policy, substantially similar coverage with insurers of recognized standing.
(b) PROHIBITED TRANSACTIONS. Seller shall not: (i) amend or terminate any
Permit; (ii) fail to pay any Liability or charge when due, other than
Liabilities contested in good faith by appropriate proceedings; (iii) enter into
any employment or consulting contract or arrangement with any employee of the
Cinema; (iii) take any action or omit to take any action that is reasonably
likely to result in the occurrence of any event described in SECTION 3.5; or
(vi) take any action or omit to take any action that will cause a breach or
termination of any Permit, other than termination by fulfillment of the terms
thereunder.
(c) ACCESS, INFORMATION AND DOCUMENTS. Seller shall give to Buyer and to
Buyer's employees and representatives (including accountants, attorneys,
environmental consultants and engineers) access during normal business hours to
all of the properties, books, contracts, commitments, records, officers,
personnel and accountants (including independent public accountants and their
workpapers) of Seller solely as they relate to the Cinema and shall furnish to
Buyer all such documents and copies of documents and all information with
respect to the properties, Liabilities and affairs of Seller (solely as they
relate to the Cinema) as Buyer may reasonably request, including but not limited
to weekly reports of gross box office and concession receipts at the Cinema, at
the same time such reports are available to Seller's management.
(d) CONFIDENTIALITY. Buyer and CCG (for itself and for any affiliate of
itself or of Buyer) hereby agree that they will not disclose to any person any
information they may have gained with regard to the operation or the finances of
the business sold by Seller hereunder which information was gained by
disclosures made to them by Seller and that this obligation of confidentiality
shall survive the Closing. Without otherwise limiting the information subject to
the obligation of confidentiality set forth above, the information to be kept
confidential by Buyer and Buyer's affiliates, as is set forth above, shall
include the financial statements annexed to this agreement and the financial
representations made hereunder and any information contained in any accounting
records of Seller as may have been disclosed or made available to Buyer in
Buyer's review of Seller's business prior to Closing.
5.2. FULFILLMENT OF AGREEMENTS. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
ARTICLE VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement. Seller shall, prior to Closing, obtain the consents referred to
in SECTION 3.3.
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5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS. Seller agrees to pay,
perform and discharge any and all severance payments, payroll and employment
related Liabilities with respect to employees of Seller at the Cinema accruing
up to the close of business on the date immediately preceding the Closing Date
or which result from the transfer of the Purchased Assets hereunder and the
employment by Buyer of those employees and shall indemnify and hold harmless
Buyer and its directors, officers and Affiliates from and against any and all
losses, Liabilities, damages, costs and expenses, including reasonable legal
fees and disbursements, that any of the aforesaid may suffer or incur by reason
of or relating to any such Liabilities.
5.4. SELLER'S EMPLOYEES. Buyer shall have the right, but not the
obligation, to offer employment to any of the employees of Seller who are
employed at the Cinema. At or prior to the Closing, Seller shall fully
compensate all employees of Seller at the Cinema for all work performed through
and including the Closing Date. Seller does not guaranty that any of the
employees to which Buyer or CCG will offer employment will accept such offer of
employment.
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS.
(a) SELLER'S LIABILITY. Seller shall remain liable for all Liability for
all workers' compensation, disability and occupational diseases of or with
respect to all of Seller's employees attributable to injuries, claims,
conditions, events and occurrences occurring on or before the Closing Date.
(b) BUYER'S LIABILITY. Buyer shall be liable for all Liability for all
workers' compensation, disability and occupational diseases of or with respect
to all of employees of Seller hired by Buyer attributable to injuries, claims,
conditions, events and occurrences first occurring after the Closing Date.
5.6. COVENANT NOT TO COMPETE.
(a) RESTRICTION. For a period of five years from and after the Closing
Date, neither Seller nor Mr. Sayegh shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be employed or otherwise connected as an officer,
employer, stockholder, partner or otherwise with, the Cinema within a seven mile
radius of any theatre owned directly or indirectly by CCG on the date
immediately following the Closing Date. Ownership of not more than 2% of the
outstanding stock of any publicly traded company or operation of the projects
identified in SECTION 5.11 shall not be a violation of this Section.
(b) ENFORCEMENT. The restrictive covenant contained in this Section is a
covenant independent of any other provision of this Agreement and the existence
of any claim that Seller may allege against any other party to this Agreement,
whether based on this Agreement or otherwise, shall not prevent the enforcement
of this covenant. Seller agrees that Buyer's remedies at law for any breach or
threat of breach by Seller of the provisions of this Section will be inadequate,
and that Buyer shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Section and to enforce specifically the terms
and provisions hereof, in addition to any other remedy to which Buyer may be
entitled at law or equity. In the event
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of litigation regarding this covenant not to compete, the prevailing party in
such litigation shall, in addition to any other remedies the prevailing party
may obtain in such litigation, be entitled to recover from the other party its
reasonable legal fees and out of pocket costs incurred by such party in
enforcing or defending its rights hereunder. The length of time for which this
covenant not to compete shall be in force shall not include any period of
violation or any other period required for litigation during which Buyer seek to
enforce this covenant. Should any provision of this Section be adjudged to any
extent invalid by any competent tribunal, such provision will be deemed modified
to the extent necessary to make it enforceable.
5.7. PUBLICITY. Seller and Buyer shall not issue any press release or
otherwise make any announcements to the public or the employees of Seller with
respect to this Agreement prior to the Closing Date without the prior written
consent of the other, except as required by Law. If Buyer believes that a public
disclosure of the transactions contemplated hereby is required by law, Buyer
shall give to Seller notice thereof at least 24 hours prior to making such
disclosure.
5.8. TRANSITIONAL MATTERS. Seller and Mr. Sayegh shall cooperate with and
assist Buyer and its authorized representatives in order to provide, to the
extent reasonably requested by Buyer, an efficient transfer of control of the
Purchased Assets and the Leased Real Estate and to avoid any undue interruption
in the activities and operations of the Business and the Leased Real Estate
following the Closing Date. Seller shall not cause any utilities to be
disconnected until the Buyer shall have established an account for such utility
in Buyer's own name. Seller shall assist in transferring to Buyer the telephone
numbers for the Cinema location. Buyer shall be liable to Seller for the utility
payments for any utility maintained by the Seller after the Closing Date. Seller
shall cooperate with Buyer's lender, Provident Bank, in connection with the
consummation by Buyer of the transactions provided hereunder, as reasonably
requested by such lender. Such cooperation shall include the execution and
delivery of a subordination agreement in favor of Provident Bank and its assigns
with respect to the Subordinated Note and shall permit Provident Bank to rely on
the legal opinion be delivered by Seller's counsel hereunder. Prior to Closing,
Seller shall remove all of its movie trailers from films at the Cinema.
5.9. BOOKS AND RECORDS. Seller shall not destroy or dispose of any books,
records, and files relating to the Business to the extent that they pertain to
the Business prior to the Closing Date.
5.10. PERMITS; N.J. ISRA. Seller shall use its best efforts to provide to
Buyer valid Permits for the Cinema prior to Closing. In the event that Seller is
unable to do so by Closing, then Seller shall provide Buyer with such Permits
within 30 days after Closing. Sellers shall obtain prior to Closing letters of
Non-Applicability with respect to the Leased Real Estate under the New Jersey
Site Recovery Act (PL 1993, ch. 39).
5.11. RIGHT OF FIRST REFUSAL. Mr. Sayegh hereby grants to CCG a right of
first refusal to purchase any movie theater property (whether in corporate
solution or otherwise) proposed to be sold by Mr. Sayagh within the three year
period ending on the third anniversary of the Closing Date. The terms of such
right for each theater property are hereby forth in the Right of First Refusal
Agreement in substantially the form of EXHIBIT E hereto. As each such theater
property is identified, Mr. Sayagh shall notify CCG of such property and CCG and
Mr. Sayegh shall, as a
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formality, promptly memorialize their agreement with respect to such theater by
completing the information in the form of such Right of First Refusal Agreement
and executing and delivering such completed Right of First Refusal Agreement.
The parties agreement set forth in this Section is intended to be legally
binding notwithstanding that the theater properties subject to this right have
not yet been separately identified herein.
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER. The obligation of Buyer
and CCG to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Buyer or CCG at Buyer's or CCG's
sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Seller and Mr. Sayegh contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Seller and Mr. Sayegh shall have performed in all respects all of the covenants
and complied with all of the provisions required by this Agreement to be
performed or complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby or that would, after Closing, limit or adversely affect Buyer's ownership
of the Purchased Assets or the Leased Real Estate in a manner different from
Seller's, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements or seeking
monetary or other relief by reason of the consummation of any of such
transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the Closing
Date, there shall have been no material adverse change, regardless of insurance
coverage therefor, in the Business or any of the Purchased Assets, results of
operations, prospects or condition, of the Cinema or the Leased Real Estate.
(d) CLOSING CERTIFICATE. If Closing occurs after the date hereof, Seller
shall have delivered a certificate, dated the Closing Date certifying to the
fulfillment of the conditions set forth in subparagraphs (a), (b) and (c) of
this Section. Such certificate shall constitute a representation and warranty of
Seller with regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Buyer and CCG shall have received the other
documents referred to in SECTION 6.3(A). All agreements, certificates, opinions
and other documents delivered by Seller to Buyer and CCG hereunder shall be in
form and substance reasonably satisfactory to Buyer and CCG.
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(f) TITLE INSURANCE. Buyer, at their sole cost and expense, shall have
obtained for all Leased Real Estate final marked commitments to issue to Buyer
ALTA (1990-Form B with appropriate state endorsements) owner's policies of title
insurance in coverage amounts equal to the fair market values of the Leased Real
Estate, insuring good title to the Leased Real Estate with mechanic's liens
coverage and such endorsements as Buyer may have reasonably requested and with
exceptions only for ALTA standard printed exceptions (other than mechanic's and
materialmen's liens and rights of possession), and Permitted Encumbrances.
(g) BOARD APPROVAL; BANK APPROVAL. Buyer and CCG shall have received the
approval of its Board of Directors and its lender, Provident Bank, to the
transactions contemplated hereunder.
(h) OTHER AGREEMENTS. CCG shall have closed under the agreement to
purchase the Bellevue Theatre in Montclair, New Jersey.
(i) RELEASE OR TERMINATION OF MORTGAGE AND OTHER ENCUMBRANCES. Seller
shall have caused the mortgage on the Leased Real Estate and all of its other
Encumbrances on the Purchased Assets to be released.
(j) LEASED REAL ESTATE. Buyer shall have received from the lessor of the
Lease Agreement consent to assignment of leasehold interest, consent to
leasehold mortgage, and estoppel certificates, nondisturbance agreements, and
other documents as shall be reasonably requested by Provident Bank, all in form
and substance satisfactory to Buyer and Provident Bank.
(k) CONSENTS. Seller shall have received the other consents, approvals and
actions of the Persons identified in SECTION 3.3.
(l) NEW THEATER TRANSITION FORMS. Buyer shall have received a New Theater
Transition Form from Seller.
(m) DUE DILIGENCE. CCG shall have been satisfied with its due diligence
investigation of the Cinema.
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER AND MR. SAYEGH. The
obligation of Seller and Mr. Sayegh to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of the following
conditions, any one or more of which may be waived in whole or in part by Seller
or Mr. Sayegh at Seller's or Mr. Sayegh's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Buyer and CCG contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date. Buyer
and CCG shall have performed all of the covenants and complied in all respects
with all of the provisions required by this Agreement to be performed or
complied with by it at or before the Closing.
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(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or the Other Agreements or seeking monetary or
other relief by reason of the consummation of such transactions.
(c) CLOSING CERTIFICATE. If Closing occurs after the date hereof, Buyer
and CCG shall have delivered a certificate, dated the Closing Date certifying to
the fulfillment of the conditions set forth in subparagraphs (a) and (b) of this
SECTION 6.2. Such certificate shall constitute a representation and warranty of
Buyer with regard to the matters therein for purposes of this Agreement.
(d) CLOSING DOCUMENTS. Seller shall also have received the other documents
referred to in SECTION 6.3(B). All agreements, certificates, opinions and other
documents delivered by Buyer to Seller hereunder shall be in form and substance
reasonably acceptable to counsel for Seller, in the exercise of such counsel's
reasonable professional judgment.
(e) LEASE AGREEMENT. Seller shall have received from the lessor of the
Lease Agreement consent to the assignment of the Lease Agreement to Buyer. If
Mr. Sayegh is not released from his obligations under the Lease Agreement, then
CCG shall indemnify and hold Seller and Mr. Sayegh harmless from and against any
damages incurred by Seller or Mr. Sayegh as a consequence of the breach of the
Lease Agreement by Buyer after Closing.
(f) BELLEVUE. CCG shall have closed under the agreement to purchase the
Bellevue Theater in Mountclair, New Jersey.
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY SELLER AND MR. SAYEGH. Seller and Mr. Sayegh shall
deliver or cause to be delivered to Buyer at the Closing:
(i) General warranty bills of sale and instrument of assignment to
the Purchased Assets in the form attached hereto as EXHIBIT F.
(ii) Assignments of all transferable or assignable licenses, Permits
and warranties relating to the Purchased Assets and of any Intellectual Property
included in the Purchased Assets, duly executed and in forms acceptable to
Buyer.
(iii) [not used].
(iv) Assignments of the Lease Agreement in the form attached hereto
as EXHIBIT G.
(v) Certificates of the appropriate public officials to the effect
that Seller was a validly existing corporation in good standing in its state of
formation as of a date not more than 15 business days prior to the Closing Date.
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(vi) Incumbency and specimen signature certificates dated the
Closing Date, signed by the officers of Seller and certified by its Chief
Executive Officer or Executive Vice President.
(vii) True and correct copies of the Seller's Certificate of
Incorporation certified by the Secretary of State as of the Closing Date.
(viii) Certificates of Seller (A) setting forth all resolutions of
the Directors of Seller and the stockholders of Seller authorizing the execution
and delivery of this Agreement and the Other Agreements and the performance by
Seller of the transactions contemplated hereby and thereby, and (B) to the
effect that the Certificate of Incorporation of Seller delivered pursuant to
SECTION 6.3(A)(VII) were in effect at the date of adoption of such resolutions,
the date of execution of this Agreement and the Closing Date.
(ix) The opinion of Buklad & Buklad, legal counsel to Seller, in
substantially the form of EXHIBIT H.
(x) Keys for the Cinema location.
(xi) All vendor warranties (including those for the roofs on the
Cinema) respecting the Purchased Assets.
(xii) Such other agreements and documents as Buyer may reasonably
request.
(b) DELIVERIES BY BUYER. Buyer shall deliver or cause to be delivered to
Seller at the Closing:
(i) The Subordinated Note.
(ii) [not used].
(iii) A certificate of the appropriate public official to the effect
that Buyer and CCG is a validly existing corporation in the State of Delaware as
of a date not more than 15 business days prior to the Closing Date.
(iv) Incumbency and specimen signature certificates signed by the
officers of Buyer and CCG and certified by the Secretary of Buyer and CCG.
(v) True and correct copies of the Certificates of Incorporation of
Buyer and CCG as of a date not more than 15 business days prior to the Closing
Date, certified by the Secretary of State of Delaware.
(vi) A certificate of the Secretary of Buyer and CCG (A) setting
forth all resolutions of the Board of Directors of Buyer and CCG authorizing the
execution and delivery of this Agreement and Other Agreements and the
performance by Buyer and CCG of the transactions contemplated hereby and
thereby, certified by the Secretary of Buyer and CCG and (B) to the effect that
the Certificates of Incorporation of Buyer delivered pursuant to SECTION
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6.3(B)(V) were in effect at the date of adoption of such resolutions, the date
of execution of this Agreement and the Closing Date.
(vii) The opinion of Kirkpatrick & Lockhart LLP, counsel to Buyer
and CCG, in substantially the form of EXHIBIT I.
(viii) Such other agreements and documents as Seller may reasonably
request.
6.4. TERMINATION.
(a) MUTUAL CONSENT; FAILURE OF CONDITIONS. Except as provided in SECTION
6.4(B), this Agreement may be terminated at any time prior to Closing by: (i)
mutual consent of Buyer, CCG and Seller; (ii) Buyer and CCG, if any of the
conditions specified in SECTION 6.1 hereof shall not have been fulfilled by
December 19, 1997 and shall not have been waived by Buyer and CCG; or (iii)
Seller, if any of the conditions specified in SECTION 6.2 hereof shall not have
been fulfilled by December 19, 1997 and shall not have been waived by Seller. In
the event of termination of this Agreement by either Buyer, CCG or Seller
pursuant to clause (ii) or (iii) of the immediately preceding sentence, Buyer
and CCG, on the one hand, and Seller on the other hand shall be liable to the
other for any breach hereof by such party, which breach led to such termination,
and the rights and obligations of the parties set forth in SECTIONS 7.2, 7.3 and
8.1 shall survive such termination. Buyer, CCG and Seller shall also be entitled
to seek any other remedy to which it may be entitled at law or in equity in the
event of such termination, which remedies shall include injunctive relief and
specific performance. Notwithstanding the foregoing, in the event that this
Agreement is terminated by one party hereto pursuant to clause (ii) or (iii) of
the first sentence of this Section solely as a result of a breach by the other
party hereto of a representation or warranty of such other party as of a date
after the date of this Agreement, which breach could not have been reasonably
anticipated by such other party and was beyond the reasonable control of such
other party, then the remedy of the party terminating this Agreement shall be
limited solely to recovery of all of such party's costs and expenses incurred in
connection herewith.
(b) CASUALTY DAMAGE. Notwithstanding anything else herein to the contrary,
if prior to Closing the Purchased Assets (or any portion thereof) are damaged by
fire or any other cause, the reasonable estimate of the immediate repair of
which would cost more than $50,000, Buyer at their option, which may be
exercised by written notice given to Seller within ten business days after
Buyer's receipt of notice of such loss, may declare this Agreement null and
void, or Buyer may Close subject to reduction of the Purchase Price by the
amount of any applicable insurance deductible which shall be paid by Buyer and
assignment to Buyer of the proceeds from any insurance carried by Seller
covering such loss. If prior to Closing the Purchased Assets (or any portion
thereof) are damaged by fire or any other cause, the reasonable estimate of the
repair of which would cost $50,000 or less, such event shall not excuse Buyer
from its obligations under this Agreement, but the Purchase Price shall be
reduced by an amount equal to the amount of such cost and Seller shall be
entitled to retain the net insurance proceeds collected or to be collected by
Seller.
(c) FAILURE TO OBTAIN LANDLORD'S CONSENT. Notwithstanding anything else
herein to the contrary, failure to obtain the consent of the landlord to the
assignment of the Lease
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Agreement from Seller to Buyer shall not be a breach of any party hereto. In the
event that the Seller or Mr. Sayegh determines to pursue the landlord for any
damages for wrongfully withholding or conditioning its consent to the assignment
of the Lease, the Buyer shall not be a party to nor have any rights of recovery
in any such action and the Seller and Mr. Sayegh will be free to pursue or
abandon any such action against the landlord as they see fit without including
or otherwise allowing for the participation of Buyer. In the event, the Closing
does not proceed and the Agreement is terminated, then the Buyer shall thereupon
have no further rights to buy the Purchased Assets otherwise to have been sold
hereunder, and the Seller will thereupon be free to hold, operate, sell, or
dispose of same to any person at any time thereafter.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing; PROVIDED, HOWEVER, THAT, representations and warranties hereunder
shall survive for a period of three years after the Closing Date, with the
exception of the representations and warranties contained in SECTIONS 3.1, 3.2,
3.3 AND 3.6, the first sentence of SECTION 3.8, and SECTIONS 4.1, 4.2 AND 4.3,
all of which shall survive for the period of the applicable statute of
limitations plus 90 days. All claims for damages made by virtue of any
representations, warranties and agreements herein shall be made under, and
subject to the limitations set forth in, this ARTICLE VII. The representations
and warranties set forth in ARTICLES III and IV are cumulative, and any
limitation or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and warranty
therein. Except the representations and warranties of each party hereto
expressly contained in this Agreement or the Other Agreements, no party hereto
is making and specifically disclaims any representations or warranties of any
kind or character, express or implied.
7.2. INDEMNIFICATION BY SELLER AND MR. SAYEGH. Seller and Mr. Sayegh shall
jointly and severally indemnify, defend, save and hold Buyer, CCG and their
officers, directors, employees, agents and Affiliates (collectively, "Buyer
Indemnitees") harmless from and against all demands, claims, actions or causes
of action, assessments, losses, damages, deficiencies, Liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing; collectively, "Buyer Damages") asserted against, imposed upon,
resulting to, required to be paid by, or incurred by any Buyer Indemnitees,
directly or indirectly, in connection with, arising out of, resulting from, or
which would not have occurred but for, (i) a material breach of any
representation or warranty made by Seller in this Agreement, in any certificate
or document furnished pursuant hereto by Seller or any Other Agreement to which
Seller is or is to become a party, (ii) a breach or nonfulfillment of any
covenant or agreement made by Seller in or pursuant to this Agreement and in any
Other Agreement to which Seller is or is to become a party, (iii) any Retained
Liability, (iv) any successor liability (or Liabilities based on similar
theories) arising out of any facts or circumstances occurring prior to the
Closing Date or Liability arising out of or attaching by virtue of Seller being
a member of a controlled group or affiliated group of entities,
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and (v) the provisions of 29 U.S.C. ss. 1161-1168, as same may be amended from
time to time, and the regulations and rulings thereunder, with respect to the
employees of Seller at the Cinema.
7.3. INDEMNIFICATION BY BUYER. Buyer and CCG shall indemnify, defend, save
and hold Mr. Sayegh and Seller and its officers, directors, employees,
Affiliates and agents (collectively, "Seller Indemnitees") harmless from and
against any and all demands, claims, actions or causes of action, assessments,
losses, damages, deficiencies, Liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing; collectively,
"Seller Damages") asserted against, imposed upon, resulting to, required to be
paid by, or incurred by any Seller Indemnitees, directly or indirectly, in
connection with, arising out of, resulting from, or which would not have
occurred but for, (i) a material breach of any representation or warranty made
by Buyer or CCG in this Agreement or in any certificate or document furnished
pursuant hereto by Buyer or CCG or any Other Agreement to which Buyer or CCG is
or is to become a party, and (ii) a breach or nonfulfillment of any covenant or
agreement made by any Buyer or CCG in or pursuant to this Agreement and in any
Other Agreement to which any Buyer or CCG is or is to become a party.
7.4. WAIVER OF STATUTE OF LIMITATIONS. Each party hereto waives any
applicable statute of limitations that may be applicable to Damages arising
under clauses (iii), (iv) and (v) of Section 7.2 and clause (iii) of Section
7.3.
7.5. NOTICE OF CLAIMS. If any Buyer Indemnitee or Seller Indemnitee (an
"Indemnified Party") believes that it has suffered or incurred or will suffer or
incur any Damages for which it is entitled to indemnification under this ARTICLE
VII, such Indemnified Party shall so notify the party or parties from whom
indemnification is being claimed (the "Indemnifying Party") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
ARTICLE VII or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
7.6. THIRD PARTY CLAIMS. The Indemnifying Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnifying Party may compromise or settle
the same, provided that the Indemnifying Party shall give the Indemnified Party
advance notice of any proposed compromise or settlement. The Indemnifying Party
shall permit the Indemnified Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnified Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnified Party
(subject to reimbursement pursuant to SECTION 7.1 or 7.2, as the case may be).
7.7. LIMITATION ON INDEMNIFICATION. No Indemnified Party shall be entitled
to make a claim for indemnification for inaccuracy in or breach of
representation or warranty pursuant to clause (I) of SECTION 7.2 until the
cumulative and aggregate amount of all Damages as a result of
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all matters covered by clause (I) of SECTION 7.2 exceeds $10,000 (the "Basket
Amount"). If and when such damages do exceed the Basket Amount, then the
Indemnified Party shall be entitled to indemnification for all such damages in
excess of the Basket Amount. Any indemnification payment under this Agreement
shall take into account any insurance proceeds or other third party
reimbursement actually received (other than the proceeds of any self insurance
or, to the extent it is the economic equivalent of self insurance, any insurance
that is retrospectively rated).
7.8. PAYMENT. All indemnification payments under this ARTICLE VII shall be
made promptly in cash.
ARTICLE VIII.
MISCELLANEOUS
8.1. COSTS AND EXPENSES. Buyer and CCG, on the one hand, and Seller and
Mr. Sayegh, on the other hand, shall each pay its respective expenses, brokers'
fees and commissions and expenses incurred in connection with this Agreement and
the transactions contemplated hereby, including all accounting, legal and
appraisal fees and settlement charges. All transfer taxes, if any, incurred as a
result of the transfer of the Purchased Assets shall be paid by Seller.
8.2. PRORATION OF EXPENSES. All accrued expenses associated with the
Leased Real Estate included in the Purchased Assets, such as rents and other
charges under the Lease Agreement, electricity, gas, water, sewer, telephone,
property taxes, security services and similar items, shall be prorated between
Buyer and Seller as of the Closing Date. Buyer and Seller shall settle such
amounts within 30 days after Closing.
8.3. BULK SALES. The parties hereto waive compliance with the provisions
of any bulk sales law applicable to the transactions contemplated hereby, and,
notwithstanding anything else in this Agreement to the contrary, Seller shall
hold Buyer harmless from and against all claims asserted against the Purchased
Assets or the Buyer pursuant to such bulk sales laws. Seller agrees to pay
timely its account creditors with respect to liabilities not being assumed by
Buyer hereunder.
8.4. FURTHER ASSURANCES. Seller shall, at any time and from time to time
on and after the Closing Date, upon the reasonable request by Buyer and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Purchased Assets to Buyer.
8.5. NOTICES. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made (i) the fifth business day after the date of mailing, if delivered
by registered or certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier, with a record of
receipt, or (iv) the next day after the date of dispatch, if sent by cable,
telegram, facsimile or telecopy (with a copy simultaneously sent by registered
or certified mail, postage prepaid, return receipt requested), to the parties at
the following addresses:
25
<PAGE>
(i) if to Buyer, to:
7 Waverly Place
Madison, New Jersey 07940
Telecopy: (201) 377-4303
Attention: A. Dale Mayo, President
with a required copy to:
David L. Forney, Esq.
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
Telecopy: (212) 536-3901
(ii) if to Seller, to:
Mr. Jesse Y. Sayegh
Rialto Theatre of Westfield, Inc.
244-254 East Broad Street
Westfield, New Jersey 07090
Telecopy:
with a required copy to:
Henry A. Buklad, Jr., Esquire
Buklad & Buklad
76 S. Orange Avenue
South Orange, New Jersey 07079
Telecopy: (201) 762-1329
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
8.6. CURRENCY. All currency references herein are to United States
dollars.
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW. Buyer and CCG shall be entitled
to offset or recoup from amounts due to Seller from Buyer or CCG hereunder or
under any Other Agreement (including the Subordinated Note) against any
obligations of Seller to Buyer or CCG hereunder or under any Other Agreement
(including Buyer Damages). This Agreement and all the rights and powers granted
hereby shall bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. This Agreement and the rights,
interests and obligations hereunder may not be assigned by any party hereto
without the prior written consent of the other parties hereto, except that Buyer
or CCG may make such assignments to any Affiliate of Buyer or CCG provided that
Buyer or CCG remain liable hereunder, and, further, Buyer and CCG may
collaterally assign their rights hereunder to Provident Bank or other commercial
lending
26
<PAGE>
institution. This Agreement shall be governed by and construed in accordance
with the laws of New Jersey without regard to its conflict of law doctrines.
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and
the Schedules and Exhibits set forth all of the promises, covenants, agreements,
conditions and undertakings between the parties hereto with respect to the
subject matter hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express or implied,
oral or written. This Agreement is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder, except the provisions
of SECTIONS 7.2 AND 7.3 relating to Buyer Indemnitees and Seller Indemnitees and
SECTION 8.10.
8.10. THIRD PARTY BENEFICIARY. No Person is an intended third party
beneficiary of this Agreement.
8.11. SEVERABILITY. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
8.12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
C.J.M. ENTERPRISES, INC.
By: /s/ Jesse Sayegh
-------------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
-------------------------------
A. Dale Mayo
Title: President
CCC CEDAR GROVE CINEMA CORP.
By: /s/ A. Dale Mayo
-------------------------------
A. Dale Mayo
Title: President
28
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1P Permitted Encumbrances
Schedule 3.5 No Changes
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Title; Business
Schedule 3.9 Litigation or Proceedings
Schedule 3.12 Leased Real Estate
Schedule 3.14 Insurance
Schedule 3.16 Employee Benefits
Schedule 3.17 Environmental Matters
Exhibit A Leased Real Estate/Lease Agreement
Exhibit B Subordinated Note
Exhibit C [not used]
Exhibit D Income Statements
Exhibit E Right of First Refusal Agreement
Exhibit F Form of General Warranty Bills; Instrument of Assignment
Exhibit G Form of Assignments of Lease Agreement
Exhibit H Form of Opinion of Buklad & Buklad
Exhibit I Form of Opinion of Kirkpatrick & Lockhart LLP
[Schedules and Exhibits will be provided upon request.]
<PAGE>
Amendment No. 1 to Asset Purchase Agreement
("AMENDMENT NO. 1"), dated as of December 12,
1997, by and among Jesse Sayegh, an individual
residing in Kinnelon, New Jersey ("MR.
Sayegh"), C.J.M. Enterprises, Inc., a New
Jersey corporation ("SELLER"), CCC Cedar Grove
Cinema Corp., a Delaware corporation ("BUYER"),
and Clearview Cinema Group, Inc., a Delaware
corporation ("CCG").
The parties hereto entered into that certain Asset Purchase Agreement
dated as of November 14, 1997 (the "Asset Purchase Agreement") and desire to
amend the Asset Purchase Agreement pursuant to the terms contained herein.
In consideration of the representations, warranties, covenants and
agreements contained herein and in the Asset Purchase Agreement, Seller, Buyer,
Mr. Sayegh, CJM and CCG, each intending to be legally bound hereby, agree as set
forth below.
1. DEFINITIONS. All capitalized terms used in this Amendment not otherwise
defined in this Amendment have the meanings given them in the Asset Purchase
Agreement.
2. AMENDMENT. The Asset Purchase Agreement is hereby amended as provided
below.
3. SUBORDINATED NOTE; PREFERRED STOCK; ETC. All references in the Asset
Purchase Agreement to the Subordinated Note are hereby deleted. Except as
provided in Sections 4 and 5 below and subject to Sections 8 and 9 below, and
subject to Sections 8 and 9 below, CCG shall deliver to Seller by March 31,
1998, 210 shares of Class B Nonvoting Cumulative Redeemable Preferred Stock
having terms substantially set forth in the Certificate of Designations,
Preferences, Rights and Limitations attached hereto as EXHIBIT A (the "Class B
Preferred Stock"). The shares of Class B Nonvoting Cumulative Redeemable
Preferred Stock shall be included within the definition of "Other Agreements"
for all purposes in the Asset Purchase Agreement. CCG shall not issue any
additional shares of Class B Preferred Stock at any time during which CCG has
outstanding dividend arrearges on the Class B Preferred Stock held by Seller.
CCG shall not issue any shares of Preferred Stock that have rights senior to the
Class B Preferred Stock as to dividends and redemptions so long as Seller or its
affiliates hold more than 100 outstanding shares of Class B Preferred Stock.
4. CASH IN LIEU OF CLASS B PREFERRED STOCK. If by March 31, 1998 CCG
completes the issuance of debt securities aggregating at least $70 million in an
offering governed by Rule 144A issued by the Securities Exchange Commission
under the Securities Act, then CCG shall deliver to Seller $210,000 in cash on
March 31, 1998 in lieu of delivery of the Class B Preferred Stock.
5. INTEREST. On March 31, 1998, CCG shall deliver to Seller an amount of
cash equal to that amount of interest that would have accrued on a loan by
Seller to CCG in the principal amount of $210,000 using an annual interest rate
of 10 1/2 %, compounded annually.
<PAGE>
6. SUBORDINATION. All obligations of CCG and Buyer to deliver any cash
after the Closing Date pursuant to this Amendment shall be subordinate and
subject in right of payment, to the prior payment in full of all Indebtedness of
CCG and Buyer to the extent provided in one or more subordination agreements by
and among CCG and Buyer, Seller and the holder of the Indebtedness. For purposes
hereof, "Indebtedness" means the principal of, premium, if any, and interest
(including any interest accruing after the filing of a petition in bankruptcy)
on and other amounts due on or in connection with any indebtedness of CCG and
Buyer as defined in and arising under any loan, credit, security or similar
agreement with any bank, insurance company, or other commercial financial
institution, in any case whether arising prior to, on or after the Closing Date,
and all renewals, extensions, and refundings thereof. As a condition to CCG's
obligation hereunder to issue Class B Preferred Stock to Seller, Seller shall
have first executed and delivered in favor of CCG's senior lender such senior
lender's standard form of subordination agreement with respect to the Class B
Preferred Stock.
7. CLASS B PREFERRED STOCK. All Class B Preferred Stock promised to be
delivered pursuant hereto shall not be registered under the U.S. Securities Act
of 1933, as amended (the "Securities Act"). Seller covenants that it will not
sell or dispose of the Class B Preferred Stock except in accordance with the
rules set forth in Rule 144 issued by the Securities and Exchange Commission
under the Securities Act and shall not sell, transfer or pledge the Class B
Preferred Stock in the absence of a registration under the Securities Act or
unless CCG receives an opinion of counsel (which may be counsel for CCG)
reasonably acceptable to it stating that such sale or transfer is exempt from
the registration and prospectus delivery requirements of the Securities Act.
Seller agrees and consents that the certificates representing the Class B
Preferred Stock shall contain the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS CLEARVIEW CINEMA GROUP, INC. RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR CLEARVIEW CINEMA GROUP, INC.)
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT AND
THAT SUCH SALE OR TRANSFER IS MADE IN ACCORDANCE WITH THE RULE SET FORTH
IN RULE 144 ISSUED BY THE SECURITIES EXCHANGE COMMISSION UNDER SAID ACT.
8. SECURITIES LAWS REPRESENTATION. Mr. Sayegh and Seller represent and
warrant to Buyer and CCG the matters set forth in this Section 8, and such
representations and warranties shall be deemed to be included within Article III
of the Asset Purchase Agreement. Mr. Sayegh and Seller acknowledge that they and
their representatives have received and reviewed all of the documents filed by
CCG through the date hereof with the Securities and Exchange Commission. Mr.
Sayegh and Seller and their representatives have had, at their discretion, an
opportunity to meet with the officers CCG to discuss CCG's business. Mr. Sayegh
and Seller are each acquiring the Class B Preferred Stock for his or its own
account with the intention of holding the Class B
2
<PAGE>
Preferred Stock for purposes of investment, and not as a nominee or agent for
any other party, and not with a view to the resale or distribution of any of the
Class B Preferred Stock, and no Seller or Stockholder has any intention of
selling the Class B preferred Stock or any interest therein in violation of the
federal securities laws or any applicable state securities laws. Mr. Sayegh and
Seller understand that the Class B Preferred Stock are not registered under the
Securities Act, or under any state securities laws. Each of Mr. Sayegh and
Seller is an "accredited investor" within the meaning of that term as set forth
in Rule 501 issued by the Securities and Exchange Commission under the
Securities Act. It shall be a condition precedent to CCG's obligation to issue
the Class B Preferred Shares that the representation and warranty contained in
this Section 8 be true and correct on the date of issuance of the Class B
Preferred Stock, and CCG shall have been satisfied that the issuance of the
Class B Preferred Stock shall be exempt from registration under the Securities
Act.
9. COOPERATION WITH FINANCIAL RECORDS. After Closing, Seller and Mr.
Sayegh shall cooperate with Buyer and CCG by providing CCG, Buyer and their
accountants and other representatives with whatever access and review of
Seller's financial records for each calendar quarter ending within the year
immediately prior to the Closing Date, as CCG, Buyer and their advisors deem
appropriate in order for CCG to make adequate financial disclosures to CCG's
stockholders and to the Securities Exchange Commission and to make adequate
financial disclosures in any filings by CCG with the Securities Exchange
Commission. Mr. Sayegh shall provide (and shall cause the New Bellevue Theater
Corp. to provide) the same cooperation for the Bellevue Theater located in
Montclair, New Jersey.
10. NO OTHER AMENDMENTS. Except as amended by the foregoing, the Asset
Purchase Agreement shall remain in full force and effect.
11. SUCCESSORS AND ASSIGNS. This Amendment and all the rights and powers
granted hereby shall bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns. This Amendment and the
rights, interests and obligations hereunder may not be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that Buyer or CCG may make such assignments to any Affiliate of Buyer or CCG
provided that Buyer or CCG remain liable hereunder, and, further, Buyer and CCG
may collaterally assign their rights hereunder to Provident Bank or other
commercial lending institution. This Amendment shall be governed by and
construed in accordance with the laws of New Jersey without regard to its
conflict of law doctrines.
12. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Amendment must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Amendment or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
3
<PAGE>
13. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Amendment sets
forth all of the promises, covenants, agreements, conditions and undertakings
between the parties hereto with respect to the subject matter hereof, and
supersede all prior or contemporaneous agreements and understandings,
negotiations, inducements or conditions, express or implied, oral or written.
This Amendment is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder, except the provisions of SECTIONS 7.2
AND 7.3 relating to Buyer Indemnitees and Seller Indemnitees and SECTION 8.10 of
the Asset Purchase Agreement.
14. SEVERABILITY. If any term or other provision of this Amendment is held
by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Amendment shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Amendment so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
15. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
C.J.M. ENTERPRISES, INC.
By: /s/ Jesse Sayegh
-----------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
-----------------------------
A. Dale Mayo
Title: President
CCC CEDAR GROVE CINEMA CORP.
By: /s/ A. Dale Mayo
-----------------------------
A. Dale Mayo
Title: President
5
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATIONS, PREFERENCES, RIGHTS
AND LIMITATIONS
OF
CLASS B NONVOTING CUMULATIVE REDEEMABLE PREFERRED STOCK
("Certificate of Designations")
OF
CLEARVIEW CINEMA GROUP, INC.
a Delaware corporation
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Clearview Cinema Group, Inc., a Delaware corporation (the
"Corporation"), certifies that pursuant to the authority contained in Section 4
of Article IV of its Amended and Restated Certificate of Incorporation dated
August 18, 1997 (the "Amended and Restated Certificate of Incorporation"), and
in accordance with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the following
resolution creating a new class of its Preferred Stock, $.01 par value,
designated as Class B Nonvoting Cumulative Redeemable Preferred Stock:
RESOLVED, that a new class of authorized Preferred Stock of the
Corporation be hereby created and established, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such class, and the
qualifications, limitations or restrictions thereof are as follows:
(a) DESIGNATION AND AMOUNT. The shares of such class shall be designated
as "Class B Nonvoting Cumulative Redeemable Preferred Stock" (referred to herein
as, the "Class B Redeemable Preferred Stock") and the number of shares
constituting such class shall be 20,000.
(b) DIVIDENDS. The holder of each share of Class B Redeemable Preferred
Stock shall be entitled to receive on the 15th day of April, July, October and
January, or the next business day if such 15th business day is not a business
day (each such date being referred to herein as a "Dividend Payment Date"), out
of funds legally available for such purpose, and as declared by the Board of
Directors, cumulative quarterly cash dividends in a per share amount equal to
$.291667 for each day during which such share was outstanding during the
calendar quarter immediately preceding the Dividend Payment Date. In case the
Corporation shall (i) pay a dividend on the Class B Redeemable Preferred Stock
in shares of Class B Redeemable Preferred Stock, (ii) subdivide the outstanding
shares of Class B Redeemable Preferred Stock, or (ii) combine the outstanding
shares of Class B Redeemable Preferred Stock into a smaller number of shares,
the per share dividend rate in effect immediately prior thereto shall be
proportionately adjusted so that the aggregate dividend rate of all shares of
Class B Redeemable Preferred Stock immediately after such event shall equal the
aggregate dividend rate of all shares of Class B Redeemable Preferred Stock
immediately prior thereto. An adjustment made pursuant to this section shall
become effective (x) upon the effective date in the case of a subdivision or
combination or (y) upon the record date in the case of a dividend of shares.
Quarterly dividends shall be paid on the basis of 90 days in each full quarter
regardless of the number of actual days in each quarter, but dividends for less
than a full quarter shall be based on the actual number of days during which
each share is outstanding. Each dividend declared by the Board of Directors
shall be paid to
<PAGE>
the holders of shares of the Class B Redeemable Preferred Stock as such holders'
names appear on the stock books on the related record date. Such record date
shall be the last day of the calendar quarter immediately preceding the
applicable Dividend Payment Date. Dividends in arrears with respect to any past
Dividend Payment Date with respect to shares of Class B Redeemable Preferred
Stock may be declared by the Board of Directors and paid on the outstanding
shares of the Class B Redeemable Preferred Stock on any date fixed by the Board
of Directors, whether or not a regular Dividend Payment Date, to the holder of
the shares of the Class B Redeemable Preferred Stock on the related record date
fixed by the Board of Directors, which shall not be less than 10 nor more than
45 days before the date fixed for the payment of such dividend. Any dividend
payment made on shares of the Class B Redeemable Preferred Stock shall first be
credited against the dividends accrued with respect to the earliest Dividend
Payment Date for which dividends have not been paid. If full cumulative
dividends have not been paid or declared and set aside for payment on the shares
of the Class B Redeemable Preferred Stock, all cumulative dividends on the
shares of the Class B Redeemable Preferred Stock shall be declared and paid pro
rata to the holders of the outstanding shares of the Class B Redeemable
Preferred Stock entitled thereto, so that in all cases the amount of dividends
declared per share on the shares of the Class B Redeemable Preferred Stock bear
to each other the same ratio that accumulated dividends per share on all shares
of Class B Redeemable Preferred Stock bear to each other. No holder of shares of
Class B Redeemable Preferred Stock shall be entitled to any dividends, whether
payable in cash, property or stock, in excess of full cumulative dividends, as
provided in this section (b). No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment on the shares of Class B
Redeemable Preferred Stock that may be in arrears. Except as set forth above,
for so long as any shares of the Class B Redeemable Preferred Stock are
outstanding, no dividends may be paid or declared and set aside for payment or
other distribution made upon the Class A Convertible Preferred Stock, Common
Stock or any other stock of the Corporation ranking junior to the shares of the
Class B Redeemable Preferred Stock as to dividends ("Junior Stock"), nor may any
shares of Junior Stock be redeemed, purchased or otherwise acquired by the
Corporation for consideration (or any payment made to or available for a sinking
fund for the redemption of any shares of such stock), unless full cumulative
dividends on all shares of Class B Redeemable Preferred Stock for all Dividend
Payment Dates accruing on or prior to the date of such transaction have been or
contemporaneously are declared and paid through the most recent Dividend Payment
Date. If dividends are not paid on a Dividend Payment Date, then such dividends
shall accrue and be cumulative from and after such Dividend Payment Date.
Notwithstanding the foregoing, no dividends shall be paid or payable with
respect to any shares of Class B Redeemable Preferred Stock if such payment is
otherwise prohibited by section (h) of this Certificate of Designations or by
the Delaware General Corporation Law. Dividends with respect to shares of Class
B Redeemable Preferred Stock may also be subject to setoff and recoupment as
contemplated by section (k) hereof.
(c) LIQUIDATION RIGHTS. In the event of any Liquidation Event (as defined
herein), the holders of shares of Class B Redeemable Preferred Stock shall be
entitled to receive from the assets of the Corporation, whether represented by
capital stock, paid-in capital or retained earnings, payment in cash of an
amount equal to the aggregate Liquidation Value (as defined herein) of such
Class B Redeemable Preferred Stock, plus a further amount equal to any dividends
that have been (or, pursuant to Section (b) hereof, were required to have been)
declared on the Class B Redeemable Preferred Stock but which remain unpaid,
before any distribution of assets shall be made to the holders of the Class A
Convertible Preferred Stock, Common Stock, or other Junior Stock. If, upon such
Liquidation Event, the assets distributable to the holders of shares of Class B
Redeemable Preferred Stock shall be insufficient to permit the payment in full
to such holders of the preferential amounts to which they are entitled, then
2
<PAGE>
such assets shall be distributed ratably among the shares of Class B Redeemable
Preferred Stock. The "Liquidation Value" of each share of Class B Redeemable
Preferred Stock shall be equal to $1,000. In case the Corporation shall (i) pay
a dividend on the Class B Redeemable Preferred Stock in shares of Class B
Redeemable Preferred Stock, (ii) subdivide the outstanding shares of Class B
Redeemable Preferred Stock, or (ii) combine the outstanding shares of Class B
Redeemable Preferred Stock into a smaller number of shares, the "Liquidation
Value" in effect immediately prior thereto shall be proportionately adjusted so
that the aggregate Liquidation Value of all shares of Class B Redeemable
Preferred Stock immediately after such event shall equal the aggregate
Liquidation Value of all shares of Class B Redeemable Preferred Stock
immediately prior thereto. An adjustment made pursuant to this section shall
become effective (x) upon the effective date in the case of a subdivision or
combination or (y) upon the record date in the case of a dividend of shares.
After payment in full of the aggregate Liquidation Value and dividends, as set
forth above, to the holders of shares of Class B Redeemable Preferred Stock, the
remaining assets of the Corporation available for payment and distribution to
stockholders may be paid and distributed to the holders of the Class A
Convertible Preferred Stock, Common Stock and any other Junior Stock. For
purposes hereof, the term "Liquidation Event" shall mean any (A) merger or
consolidation other than a merger or consolidation in which persons who,
immediately prior to the closing of such transaction, were the holders of voting
securities of the Corporation having more than fifty percent (50%) of the voting
power of the outstanding voting securities of the Corporation (which includes
all Common Stock, all Class A Convertible Preferred Stock and all other voting
securities created in or under the Amended and Restated Certificate of
Incorporation) hold, immediately after such transaction, voting securities of
the surviving entity having more than fifty percent (50%) of the voting power of
the outstanding voting securities of the surviving entity, (B) sale of all or
substantially all of the assets of the Corporation, or (C) liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
(d) VOTING RIGHTS. Holders of shares of Class B Redeemable Preferred Stock
shall not be entitled to any voting rights except upon matters with respect to
which the holders of shares of Class A Convertible Preferred Stock, Class B
Redeemable Preferred Stock and Common Stock have separate voting rights as
expressly provided in this section (d), the Corporation's Amended and Restated
Certificate of Incorporation or as required by Delaware law. The affirmative
vote of the holders of more than fifty percent (50%) of the outstanding shares
of Class B Redeemable Preferred Stock, voting separately as a single class,
shall be required to authorize any amendment to this Certificate of Designations
or the Corporation's Amended and Restated Certificate of Incorporation if such
amendment would adversely affect the powers, preferences or rights of the Class
B Redeemable Preferred Stock.
(e) REDEEMABLE AT OPTION OF THE CORPORATION. The Corporation shall have
the right to redeem any one or more shares of Class B Redeemable Preferred Stock
at any time and from time to time at a redemption price of $1,000 per share plus
an amount equal to all unpaid dividends thereon, including accrued dividends,
whether or not declared, to the redemption date. Notice of any redemption of the
Class B Redeemable Preferred Stock shall be mailed at least 30 days prior to the
date fixed for redemption to each holder of Class B Redeemable Preferred Stock
to be redeemed, at such holder's address as it appears on the books of the
Corporation. In order to facilitate the redemption of the Class B Redeemable
Preferred Stock, the Board of Directors may fix a record date for the
determination of holders of Class B Redeemable Preferred Stock to be redeemed,
or may cause the transfer books of the Corporation to be closed for the transfer
of the Class B Redeemable Preferred Stock, not more than 20 days nor less than
10 days prior to the date fixed for such redemption. Whenever shares of Class B
Redeemable Preferred Stock are to be redeemed, the Corporation shall cause to be
mailed, within the time period specified in this section, a written notice of
redemption (a "Notice of Redemption") by first-class mail, postage prepaid, to
each holder of shares of Class B Redeemable Preferred Stock to be redeemed as
its
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<PAGE>
name and address appear on the stock books of the Corporation. Each Notice of
Redemption shall state (i) the redemption date, (ii) the redemption price, (iii)
the number of shares of Class B Redeemable Preferred Stock to be redeemed and
identification (by certificate number, CUSIP number or otherwise) of the shares
of Class B Redeemable Preferred Stock to be redeemed, (iv) the place or places
where shares of Class B Redeemable Preferred Stock are to be surrendered for
payment of the redemption price, (v) that dividends on the shares to be redeemed
will cease to accumulate on such redemption date, and (vi) the provision of this
Certificate of Designations under which the redemption is being made. A Notice
of Redemption shall be deemed given on the day that it is mailed. On or after
the redemption date each holder of shares of Class B Redeemable Preferred Stock
that were called for redemption shall surrender the certificate evidencing such
shares, properly endorsed in blank for transfer or accompanied by proper
instruments of assignment or transfer in blank, and bearing all necessary
transfer tax stamps thereto affixed and cancel led, to the Corporation at the
place designated in the Notice of Redemption and shall then be entitled to
receive payment of the redemption price for each share. If fewer than all of the
shares are to be redeemed, the Corporation shall issue new certificates for the
shares not redeemed. If fewer than all of the outstanding shares of the Class B
Redeemable Preferred Stock are to be redeemed, the number of shares to be
redeemed shall be determined by the Corporation ratably, by lot or by holder or
by such other method as the Corporation shall deem appropriate. Solely for the
purpose of determining the number of shares of Class B Redeemable Preferred
Stock to be stated in a Notice of Redemption as subject to an optional
redemption, the amount of funds legally available for such redemption shall be
determined as of the date of such Notice of Redemption. The Corporation shall
declare and pay any and all dividends that are due or are in arrears prior to
any such redemption.
(f) REDEMPTION AT OPTION OF THE HOLDER. Each holder of shares of Class B
Redeemable Preferred Stock shall have the right to cause the Corporation to
redeem, and upon exercise of such right, the Corporation shall redeem, any
shares of Class B Redeemable Preferred Stock held by such holder at a redemption
price equal to its Liquidation Value plus an amount equal to all unpaid
dividends thereon, including accrued dividends, whether or not declared, to the
redemption date, at any time after the occurrence of any one or more of the
following events:
(i) the Corporation shall (A) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy or insolvency law of any
jurisdiction, (B) make an assignment for the benefit of its creditors, (C)
consent to the appointment of a custodian, receiver, trustee or other officer
with similar powers of itself or of any substantial part of its property, (D) be
adjudicated insolvent or be liquidated, or (E) take corporate action for the
purpose of any of the foregoing;
(ii) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Corporation, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property, or
if an order for relief shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidations of the Corporation, or if any petition for any such relief shall
be filed against the Corporation and such petition shall not be dismissed within
60 days;
(iii) the date five years after the date such shares of shall
have been issued; and
(iv) within ten business days after the date of closing of the
issuance by the Corporation of debt securities aggregating at least $70 million
in an offering governed by Rule 144A issued by the Securities Exchange
Commission under the Securities Act of 1933.
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<PAGE>
Notice of any such redemption of the Class B Redeemable Preferred Stock shall be
delivered in writing to the Corporation at least 10 business days prior to the
date fixed for redemption. The record date for the determination of holders of
Class B Redeemable Preferred Stock to be redeemed and the date that the
Corporation may cause the transfer books of the Corporation to be closed for the
transfer of the Class B Redeemable Preferred Stock, shall be the date of
redemption set forth in such written notice. The place or places where shares of
Class B Redeemable Preferred Stock are to be surrendered for payment of the
redemption price shall be the Corporation's executive offices. Dividends on the
shares to be redeemed will cease to accumulate on the redemption date. On or
after the redemption date each holder of shares of Class B Redeemable Preferred
Stock that were required to be redeemed shall surrender the certificate
evidencing such shares, properly endorsed in blank for transfer or accompanied
by proper instruments of assignment or transfer in blank, and bearing all
necessary transfer tax stamps thereto affixed and cancel led, to the Corporation
at its executive offices and shall then be entitled to receive payment of the
redemption price for each share. The Corporation shall declare and pay any and
all dividends that are due or are in arrears prior to any such redemption.
(g) RESTRICTIONS ON REDEMPTION. Notwithstanding the foregoing, no shares
of Class B Redeemable Preferred Stock may be redeemed if such redemption is
otherwise prohibited by section (h) of this Certificate of Designations or by
the Delaware General Corporation Law. Payments in respect of redemptions with
respect to shares of Class B Redeemable Preferred Stock may also be subject to
setoff and recoupment as contemplated by section (k) hereof.
(h) SUBORDINATION TO INDEBTEDNESS; RESTRICTIONS ON TRANSFER. All dividend
payments on and payments for redemptions with respect to shares of Class B
Redeemable Preferred Stock are subordinate and subject in right of payment, to
the prior payment in full of all Indebtedness of the Corporation to the extent
provided in one or more subordination agreements by and among the Corporation,
the holder of the Class B Redeemable Preferred Stock and the holder of the
Indebtedness. For purposes hereof, "Indebtedness" means the principal of,
premium, if any, and interest (including any interest accruing after the filing
of a petition in bankruptcy) on and other amounts due on or in connection with
any indebtedness of the Corporation as defined in and arising under any loan,
credit, security or similar agreement with any bank, insurance company, or other
commercial financial institution, in any case whether arising prior to, on or
after the date of issuance of the Class B Redeemable Preferred Stock, and all
renewals, extensions, and refundings thereof. The certificates representing
outstanding shares of Class B Redeemable Preferred Stock may contain a legend
referring to the subordination agreement or agreements among the Corporation,
the holder of the Class B Redeemable Preferred Stock and the holder of the
Indebtedness. If a holder shares of Class B Redeemable Preferred Stock has
entered into such a subordination agreement and the identity of the holder of
the Indebtedness subsequently changes, then the holder of the Class B Redeemable
Preferred Stock shall from time to time at the Corporation's request enter into
a new subordination agreement or agreements containing terms substantially
similar to the terms of such holder's then existing subordination agreement, and
if such holder fails to do so, then upon notice by the Corporation to such
holder, all dividend payments on and payments for redemptions with respect to
the shares of Class B Redeemable Preferred Stock held by such holder shall be
suspended. Also, if a holder of shares of Class B Redeemable Preferred Stock has
entered into such a subordination agreement, then such holder may not assign any
shares of Class B Redeemable Preferred Stock that are subject to such
subordination agreement unless and until the proposed assignee executes and
delivers a subordination agreement containing terms substantially similar to the
terms of such holder's then existing subordination agreement, and any attempted
transfer of shares of Class B Redeemable Preferred Stock without complying with
the terms hereof shall be null and void.
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<PAGE>
(i) APPROVAL OF HOLDERS OF CLASS A CONVERTIBLE PREFERRED STOCK; INCREASE
IN AUTHORIZED SHARES; ADDITIONAL CLASSES OF PREFERRED STOCK. The issuance by the
Corporation of any shares of Class B Redeemable Preferred Stock shall first be
approved by the holders of the Class A Convertible Preferred Stock in the manner
and to the extent provided in the Corporation's Amended and Restated Certificate
of Incorporation. Subject to the rights of the holders of the Corporation's
Class A Convertible Preferred Stock as provided in the Corporation's Amended and
Restated Certificate of Incorporation, the Corporation may at any time and from
time to time increase the number of authorized shares of Class B Redeemable
Preferred Stock and create and issue any shares of any series or class of the
Corporation's Preferred Stock that have dividend and liquidation rights that are
senior to or pari passu with the Class B Redeemable Preferred Stock.
(j) REACQUIRED SHARES. Any shares of Class B Redeemable Preferred Stock
redeemed or purchased or otherwise acquired by the Corporation in any manner
whatsoever shall not be reissued as Class B Redeemable Preferred Stock and shall
be retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new class of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions or restrictions on issuance set forth herein.
(k) SETOFF RIGHTS. Shares of Class B Redeemable Preferred Stock may be
issued in connection with the acquisition by the Corporation or its subsidiaries
of certain businesses, and, notwithstanding anything else herein to the
contrary, payments of dividends on such shares of Class B Redeemable Preferred
Stock and payments in respect of redemptions of such shares of Class B
Redeemable Preferred Stock may be subject to the Corporation's rights of setoff
and recoupment to the extent and in the manner expressly set forth in any
agreement related to such acquisition. Any such right of setoff or recoupment
shall survive any transfer or assignment of such shares of Class B Redeemable
Preferred Stock.
IN WITNESS WHEREOF, Clearview Cinema Group, Inc. has caused this
Certificate of Designations, Preferences, Rights and Limitations of Class B
Nonvoting Cumulative Redeemable Preferred Stock to be duly executed by its
President and attested to by its Secretary and has caused its corporate seal to
be affixed hereto this __ day of _______, 199_.
CLEARVIEW CINEMA GROUP, INC.
By ______________________________
A. Dale Mayo, President
6
Asset Purchase Agreement
Dated as of November 14, 1997
Among
Jesse Sayegh
Kin Mall Cinemas, Inc.
CCC Kin Mall Cinema Corp.
C.J.M. Enterprises, Inc.
and
Clearview Cinema Group, Inc.
<PAGE>
ARTICLE I. DEFINITIONS; CONSTRUCTION........................................1
1.1. DEFINITIONS...........................................................1
1.2. CONSTRUCTION..........................................................5
ARTICLE II. THE TRANSACTION..................................................5
2.1. SALE AND PURCHASE OF ASSETS...........................................5
2.2. CASH; ETC.............................................................6
2.3. RETAINED ASSETS......................................................6
2.4. [NOT USED]..........................................................6
2.5. RETAINED LIABILITIES..................................................6
2.6. PURCHASE PRICE; DEPOSIT...............................................7
2.7. CLOSING...............................................................7
2.8. PAYMENT OF PURCHASE PRICE.............................................7
2.9. ALLOCATION OF PURCHASE PRICE..........................................7
2.10. TITLE................................................................8
2.11. CERTAIN CONSENTS.....................................................8
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER........................8
3.1. ORGANIZATION..........................................................8
3.2. AUTHORIZATION; ENFORCEABILITY.........................................8
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS..........................8
3.4. CINEMA INCOME STATEMENTS..............................................9
3.5. NO CHANGES............................................................9
3.6. TAXES.................................................................9
3.7. UNDISCLOSED LIABILITIES..............................................10
3.8. CONDITION OF ASSETS; TITLE; BUSINESS.................................10
3.9. NO PENDING LITIGATION OR PROCEEDINGS.................................10
3.10. CONTRACTS...........................................................10
3.11. PERMITS; COMPLIANCE WITH LAW........................................10
3.12. LEASED REAL ESTATE..................................................11
3.13. LABOR RELATIONS.....................................................11
3.14. INSURANCE...........................................................11
3.15. INTELLECTUAL PROPERTY RIGHTS........................................11
3.16. EMPLOYEE BENEFITS...................................................12
3.17. ENVIRONMENTAL MATTERS...............................................12
3.18. ADDITIONAL THEATERS. Neither.......................................13
3.19. FINDERS' FEES.......................................................13
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER.........................14
4.1. ORGANIZATION.........................................................14
4.2. AUTHORIZATION AND ENFORCEABILITY.....................................14
4.3. NO VIOLATION OF LAWS; CONSENTS.......................................14
4.4. NO PENDING LITIGATION OR PROCEEDINGS.................................14
4.5. FINDERS' FEES........................................................15
4.6. STOCK OWNERSHIP......................................................15
ARTICLE V. CERTAIN COVENANTS................................................15
5.1. CONDUCT OF BUSINESS PENDING CLOSING..................................15
5.2. FULFILLMENT OF AGREEMENTS............................................16
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS.......................16
5.4. SELLER'S EMPLOYEES...................................................16
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS..........................16
5.6. COVENANT NOT TO COMPETE..............................................16
5.7. PUBLICITY............................................................17
5.8. TRANSITIONAL MATTERS.................................................17
5.9. BOOKS AND RECORDS....................................................17
5.10. PERMITS; N.J. ISRA..................................................18
5.11. RIGHT OF FIRST REFUSAL..............................................18
ARTICLE VI. CONDITIONS TO CLOSING; TERMINATION..............................18
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER..........................18
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER, CJM AND MR. SAYEGH.....19
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING................................20
6.4. TERMINATION..........................................................22
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION...................23
7.1. SURVIVAL OF REPRESENTATIONS..........................................23
7.2. INDEMNIFICATION BY SELLER, CJM AND MR. SAYEGH........................23
7.3. INDEMNIFICATION BY BUYER.............................................24
7.4. WAIVER OF STATUTE OF LIMITATIONS.....................................24
7.5. NOTICE OF CLAIMS.....................................................24
7.6. THIRD PARTY CLAIMS...................................................24
7.7. LIMITATION ON INDEMNIFICATION........................................25
7.8. PAYMENT..............................................................25
<PAGE>
ARTICLE VIII. MISCELLANEOUS.................................................25
8.1. COSTS AND EXPENSES...................................................25
8.2. PRORATION OF EXPENSES................................................25
8.3. BULK SALES...........................................................25
8.4. FURTHER ASSURANCES...................................................25
8.5. NOTICES..............................................................26
8.6. CURRENCY.............................................................26
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW....................................26
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT..............................27
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.......................27
8.10. THIRD PARTY BENEFICIARY.............................................27
8.11. SEVERABILITY........................................................27
8.12. COUNTERPARTS........................................................28
<PAGE>
Asset Purchase Agreement ("Agreement"), dated as
of November 14, 1997, by and among Jesse Sayegh,
an individual residing in _________, New Jersey
("Mr. Sayegh"), Kin Mall Cinemas, Inc., a New
Jersey corporation ("Seller"), C.J.M. Enterprises,
Inc., a New Jersey corporation ("CJM"), CCC Kin
Mall Cinema Corp., a Delaware corporation
("Buyer"), and Clearview Cinema Group, Inc., a
Delaware corporation ("CCG").
Seller currently owns and operates a eight-screen movie cinema located at
the Borough of Kinnelon, Morris County, New Jersey (the "Cinema"). Buyer is a
wholly owned subsidiary of CCG.
CJM leases the real estate on which the Cinema is located, as such real
estate and lease are more particularly described on EXHIBIT A hereto (the
"Leased Real Estate").
Seller desires to sell and assign to Buyer, and Buyer desire to purchase
and assume from Seller, the Cinema and the Leased Real Estate on the terms and
subject to the conditions set forth below.
In consideration of the representations, warranties, covenants and
agreements contained herein, Seller, Buyer, Mr. Sayegh, CMJ and CCG, each
intending to be legally bound hereby, agree as set forth below.
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1. DEFINITIONS. As used in this Agreement, the following terms have the
meanings specified in this SECTION 1.1. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"Agreement" means this Asset Purchase Agreement, as it may be amended from
time to time.
"Basket Amount" has the meaning given that term in SECTION 7.7.
"Benefit Plan" means any written and unwritten "employee benefit plans"
within the meaning of Section 3(3) of ERISA, and any other written and unwritten
profit sharing, pension, savings, deferred compensation, fringe benefit,
insurance, medical, medical reimbursement, life, disability, accident,
post-retirement health or welfare benefit, stock option, stock purchase, sick
pay, vacation, employment, severance, termination or other plan, agreement,
contract, policy, trust fund or arrangement, whether or not funded and whether
or not terminated, (i) maintained or
<PAGE>
sponsored by Seller, or (ii) with respect to which Seller has or may have
Liability or is obligated to contribute, or (iii) that otherwise covers any of
the current or former employees of Seller or their beneficiaries, or (iv) as to
which any such current or former employees of Seller or their beneficiaries
participated or were entitled to participate or accrue or have accrued any
rights thereunder.
"Business" means the operation of the Cinema.
"Buyer" has the meaning given that term in the heading of this Agreement.
"Buyer Damages" has the meaning given that term in SECTION 7.2.
"Buyer Indemnitees" has the meaning given that term in SECTION 7.2.
"CCG" has the meaning given that term in the heading of this Agreement.
"CERCLIS" means the United States Comprehensive Environmental Response
Compensation Liability Information System List pursuant to Superfund.
"Cinema" has the meaning given that term in the first introductory
paragraph of this Agreement.
"Closing" has the meaning given that term in SECTION 2.7.
"Closing Date" has the meaning given that term in SECTION 2.7.
"Code" means the United States Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"Damages" means Buyer Damages or Seller Damages, as the case may be.
"Deposit" has the meaning given that term in SECTION 2.6.
"Encumbrance" means any liability, debt, mortgage, deed of trust, pledge,
security interest, encumbrance, option, right of first refusal, agreement of
sale, adverse claim, easement, lien, assessment, restrictive covenant,
encroachment, burden or charge of any kind or nature whatsoever or any item
similar or related to the foregoing.
"Environmental Law" means any applicable Law relating to public health and
safety or protection of the environment, including common law nuisance, property
damage and similar common law theories.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended, and the applicable rulings and regulations thereunder.
"GAAP" means United States generally accepted accounting principles as
they would be applied to the Cinema.
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<PAGE>
"Governing Documents" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing agreement and other charter documents or
organization or governing documents or instruments of such Person.
"Governmental Body" means any court, government (federal, state, local or
foreign), department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority or instrumentality.
"Income Statements" has the meaning given that term in SECTION 3.4.
"Indemnified Party" has the meaning given that term in SECTION 7.5.
"Indemnifying Party" has the meaning given that term in SECTION 7.5.
"Intellectual Property Rights" means trademark and service mark rights,
applications and registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications, letters patent,
patent applications and licenses of any of the foregoing, improvements,
blueprints, specifications, drawings, designs and other intellectual property
and proprietary rights.
"IRS" means the United States Internal Revenue Service.
"Law" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, judgment or order of any kind or
nature whatsoever including any public policy, judgment or order of any
Governmental Body or principle of common law.
"Lease Agreement" mean the Lease Agreement for the Cinema identified on
EXHIBIT A hereto.
"Leased Real Estate" has the meaning given that term in the second
introductory paragraph of this Agreement.
"Liabilities" with respect to any Person, means all debts, liabilities and
obligations of such Person of any nature or kind whatsoever, whether or not due
or to become due, accrued, fixed, absolute, matured, determined, determinable or
contingent and whether or not incurred directly by such Person or by any
predecessor of such Person, and whether or not arising out of any act, omission,
transaction, circumstance, sale of goods or service or otherwise.
"Litigation" has the meaning given that term in SECTION 3.9.
"Other Agreements" means the Subordinated Note and the other agreements
and instruments of title, assignment or assumption hereunder.
"Permits" has the meaning given that term in SECTION 3.11.
3
<PAGE>
"Permitted Encumbrances" means liens for current taxes not yet due and
liens of public record on personal property identified on SCHEDULE 1.1P.
"Person" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, a Governmental Body and any
other legal entity.
"Purchase Price" has the meaning given that term in SECTION 2.6.
"Purchased Assets" has the meaning given that term in SECTION 2.1(D).
"Regulated Material" means any hazardous substance as defined by any
Environmental Law and any other material regulated by any applicable
Environmental Law, including petroleum, petroleum-related material, crude oil or
any fraction thereof, PCBs and friable asbestos.
"Related Party" means (i) Seller, (ii) any Affiliate of Seller, (iii) any
officer or director of any Person identified in clauses (i) or (ii) preceding,
and (iv) any spouse, sibling, ancestor or lineal descendant of any natural
Person identified in any one of the preceding clauses.
"Retained Assets" has the meaning given that term in SECTION 2.3.
"Retained Liabilities" has the meaning given that term in SECTION 2.5.
"Seller" has the meaning given that term in the heading of this
Agreement.
"Seller Damages" has the meaning given that term in SECTION 7.3.
"Seller Group" means Seller and any corporation that may be aggregated
with Seller under Sections 414(b), (c), (m) or (o) of the Code.
"Seller Indemnitees" has the meaning given that term in SECTION 7.3.
"Seller's Predecessor" means any predecessor in interest to Seller,
whether by merger, combination, reorganization or otherwise.
"Subordinated Note" means CCG's 10% Subordinated Promissory Note payable
to Seller in the principal amount of $750,000 in the form attached hereto as
EXHIBIT B.
"Superfund" means the United States Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. Sections 6901 ET SEQ., as
amended.
"Tax" means any domestic or foreign federal, state, county or local tax,
levy, impost or other charge of any kind whatsoever, including any interest or
penalty thereon or addition thereto, whether disputed or not.
4
<PAGE>
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, including any schedule or
attachment thereto, and including any amendment thereof.
1.2. CONSTRUCTION. As used herein, unless the context otherwise requires:
(i) references to "Article" or "Section" are to an article or section hereof;
(ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits and
Schedules attached hereto and are incorporated herein by reference and made a
part hereof; (iii) "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II.
THE TRANSACTION
2.1. SALE AND PURCHASE OF ASSETS. Except as otherwise provided in SECTIONS
2.2 and 2.3, At the Closing, Seller shall sell, transfer and assign to Buyer,
and Buyer shall purchase from Seller, all of Seller's properties and business as
a going concern, and goodwill and tangible or intangible assets of every kind,
nature and description existing on the Closing Date located at or used in
connection with the Cinema, whether personal, in electronic form or otherwise,
and whether or not any of such assets have any value for accounting purposes or
are carried or reflected on or specifically referred to in its books or
financial statements, free and clear of all Encumbrances (collectively, the
"Purchased Assets"). Without limiting the foregoing, the Purchased Assets shall
include the following:
(i) All of Seller's tangible assets, including office furniture,
office equipment and supplies, computer hardware and software, projectors,
projector bulbs, ticketing machines, leasehold improvements on or related to the
Leased Real Estate or related to the Business;
(ii) All of Seller's books, records, manuals, documents, books of
account, correspondence, sales reports, literature, brochures, advertising
material and the like related to the Business (other than accounting records and
corporate books and records as defined in SECTION 2.3);
(iii) All of Seller's inventory and supplies, including concession
products, candy items and paper goods for the Business;
(iv) All of Seller's rights under leases for personal property, if
any;
(v) All of Seller's rights under the Permits;
(vi) All of Seller's goodwill and rights in and to the name "Kin
Mall";
(vii) Seller's rights to the telephone numbers for Cinema location;
and
5
<PAGE>
(viii) The goodwill of the Business.
CJM shall at Closing assign all of its interests in the Leased Real Estate and
the Lease Agreement to Buyer, and Buyer shall assume the Lease Agreement, for no
additional consideration.
2.2. CASH; ETC. Buyer shall purchase petty cash on hand at the Cinema at
the close of business on the date immediately preceding the Closing Date, the
purchase price of cash to be face value, subject to a physical count of such
cash by Buyer and Seller. If the use by customers of the Cinema of pre-sold
tickets sold by Seller shall exceed $100 in the aggregate, Seller shall promptly
pay to Buyer an amount equal to such use in excess of $100.
2.3. RETAINED ASSETS. Except for the Purchased Assets, Buyer is not
purchasing and Seller is not selling the name "CJM Enterprises" or any variant
or derivative of such name and Seller's accounting records and corporate minute
books, stock books and corporate seal (collectively, the "Retained Assets").
Accounting Records of Seller shall remain the exclusive property of Seller in
accord with this Section, and shall mean any and all books of original entry,
including any register or computer tapes, all journals or ledgers, all canceled
checks, payroll records, bank or other account statements, including account
statements or reports to or from any vendors, suppliers, film companies, or
otherwise, including any correspondence relating to same or to any other items
designated as an accounting record hereunder, and including all financial
statements, records, tax returns, and all workpapers or supporting information
relating thereto, including all information gathered or compiled by Seller or
Seller's agents or accountants therefor, or summaries of same, including all
disks, print-outs, or other digital or analog, written or electronic recording
thereof. The Purchased Assets shall not include any permits that are
non-transferable. Seller knows of no reason why any permit issued to Seller for
use in its business would not be issued to Buyer for use by it after the
Closing, assuming only Buyer is qualified to receive same.
2.4. [NOT USED].
2.5. RETAINED LIABILITIES. Buyer does not hereby and shall not assume or
in any way undertake to pay, perform, satisfy or discharge any other Liability
of Seller, whether existing on, before or after the Closing Date or arising out
of any transactions entered into, or any state of facts existing on, prior to or
after the Closing Date (the "Retained Liabilities"), and Seller agrees to pay
and satisfy when due all Retained Liabilities. Without limiting the foregoing,
the term "Retained Liabilities" shall include Liabilities:
(i) to any Related Party;
(ii) for or under any Benefit Plan;
(iii) for any Taxes, whether or not by reason of, or in connection
with, the transactions contemplated by this Agreement;
(iv) with respect to Seller's administrative and corporate
operations; and
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(v) to any film distributor.
Buyer acknowledges that Buyer is responsible for any and all liabilities of the
Business first occurring after the Closing Date.
2.6. PURCHASE PRICE; DEPOSIT. The aggregate purchase price for all of the
Purchased Assets shall be $3.25 million, plus amounts payable for the inventory
and petty cash (the "Purchase Price"). At the close of business on the last
business day prior to the Closing Date, Seller and Buyer shall take a physical
count of Seller's inventory being sold by Seller to Buyer under this Agreement.
Seller's inventory shall include concession products, candy items, paper goods
and other similar items, but shall not include projector bulbs which shall be
deemed to be equipment for purposes of this Agreement. Inventory shall be valued
at Seller's cost, determined on a first-in-first-out basis. Buyer shall pay
Seller for all inventory at the Closing, provided that such inventories do not
exceed amounts that would be expected as customary in the ordinary course of
business. Buyer shall deliver to Seller within three business days after
obtaining landlord's consent to the assignment to Buyer of the Lease Agreement
on terms acceptable to both Buyer and Seller a good faith deposit equal to
$15,000 (the "Deposit"). The Deposit shall be applied against the cash portion
of the Purchase Price if there is a Closing hereunder. If there is no Closing
hereunder, then the Deposit shall be promptly returned to Buyer, unless Buyer is
in material breach hereof and such material breach was the sole cause of the
failure to Close hereunder. The Deposit shall be held in escrow by Seller's
counsel (as a fiduciary) subject to the terms of this Agreement.
2.7. CLOSING. The consummation of the purchase and sale of the Purchased
Assets and the consummation of the other transactions contemplated hereby (the
"Closing") shall take place at 10:00 a.m., local time, on December 12, 1997 at
the offices of Kirkpatrick & Lockhart, LLP, 1251 Avenue of the Americas, New
York, New York, 10020-1104 or at such other time, date or place as the parties
agree (the "Closing Date"). Closing shall be effective at 12:01 a.m. on the
Closing Date.
2.8. PAYMENT OF PURCHASE PRICE. At Closing, the Purchase Price shall be
paid by Buyer and CCG to Seller as follows:
(i) by Buyer's delivery to Seller immediately available funds equal
to $2.5 million, minus the amount of the Deposit; and
(ii) by delivery of the Subordinated Note.
2.9. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Purchased Assets as follows: $650,000 shall be allocated to equipment,
furniture and fixtures for the Cinema and $2,600,000 shall be allocated to the
remaining assets of the Cinema. Buyer and Seller shall report the federal, state
and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation and shall not
take any position inconsistent therewith upon examination of any Tax Return, in
any refund claim, in any litigation, or otherwise.
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2.10. TITLE. Title to all Purchased Assets shall pass from Seller to Buyer
at Closing, subject to the terms and conditions of this Agreement. Buyer assume
no risk of loss to the Purchased Assets prior to Closing.
2.11. CERTAIN CONSENTS. Nothing in this Agreement shall be construed as an
attempt to assign any Permit included in the Purchased Assets which is by its
terms or in law nonassignable without the consent of the other party or parties
thereto, unless such consent shall have been given, or as to which all the
remedies for the enforcement thereof enjoyed by Seller would not, as a matter of
law, pass to Buyer as an incident of the assignments provided for by this
Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer and CCG to enter into this Agreement and
consummate the transactions contemplated hereby, Seller and Mr. Sayegh jointly
and severally represent and warrant to Buyer and CCG as follows:
3.1. ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and has
the power and authority to own or lease its properties, carry on the Business as
now conducted, enter into this Agreement and the Other Agreements to which it is
or is to become a party and perform its obligations hereunder and thereunder.
3.2. AUTHORIZATION; ENFORCEABILITY. This Agreement and each Other
Agreement to which Seller is a party have been duly executed and delivered by
and constitute the legal, valid and binding obligations of Seller, CJM and Mr.
Sayegh, enforceable against them in accordance with their respective terms. Each
Other Agreement to which Seller, CJM and Mr. Sayegh are to become a party
pursuant to the provisions hereof, when executed and delivered by Seller, CJM
and Mr. Sayegh, will constitute the legal, valid and binding obligation of
Seller, CJM and Mr. Sayegh, enforceable against them in accordance with the
terms of such Other Agreement. All actions contemplated by this Section have
been duly and validly authorized by all necessary proceedings by Seller.
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS. Neither the execution
and delivery of this Agreement or any Other Agreement to which Seller, CJM or
Mr. Sayegh is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the compliance with or fulfillment of the
terms, conditions or provisions hereof or thereof by Seller, CJM or Mr. Sayegh
will: (i) contravene any provision of any Governing Document of Seller, (ii)
conflict with, result in a breach of, constitute a default or an event of
default (or an event that might, with the passage of time or the giving of
notice or both, constitute a default or event of default) under any of the terms
of, result in the termination of, result in the loss of any right under, or give
to any other Person the right to cause such a termination of or loss under, any
Purchased Asset or any other material contract, agreement or instrument to which
Seller, CJM or Mr. Sayegh is a party or by which any of their assets may be
bound or affected, (iii) result in the creation, maturation or acceleration of
any Liability of Seller, CJM or Mr. Sayegh (or give to any other Person the
right to cause such a creation, maturation or acceleration), (iv) violate any
Law
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or violate any judgment or order of any Governmental Body to which Seller is
subject or by which any of the Purchased Assets or any of its other assets may
be bound or affected, or (v) result in the creation or imposition of any
Encumbrance upon any of the Purchased Assets or give to any other Person any
interest or right therein. Except for the consents of the landlord under the
Lease Agreement, no consent, approval or authorization of, or registration or
filing with, any Person is required in connection with the execution and
delivery by Seller, CJM or Mr. Sayegh of this Agreement or any of the Other
Agreements to which it is or is to become a party pursuant to the provisions
hereof or the consummation by Seller, CJM or Mr. Sayegh of the transactions
contemplated hereby or thereby.
3.4. CINEMA INCOME STATEMENTS. Attached hereto as EXHIBIT D are the income
statements for the Cinema for the years ended December 31, 1995, and December
31, 1996 and for the nine month period ended August 31, 1997 (the "Income
Statements"). The Income Statements (i) are correct and complete, (ii) have been
prepared in accordance with GAAP on a consistent basis, and (iii) fairly present
the results of operation of the Cinema for the periods then ended in accordance
with GAAP. Seller has no money due and owing to any film distributor in
connection with the Cinema except for money owing in the normal course of
business for which an amount is not ascertainable to pay or which is not due
prior to Closing. The aggregate gross box office revenues for the Cinema for
calendar year 1996 was $________ and for the period from January 1, 1997 through
August 31, 1997 was $1,400,855. The aggregate gross concession revenues for the
Cinema for calendar year 1996 was $________ and for the period from January 1,
1997 through August 31, 1997, was $457,259. Earnings before interest, taxes and
depreciation and amortization for the Cinema for the period from January 1, 1997
through August 31, 1997 was at least $550,000.
3.5. NO CHANGES. Since September 30, 1996, Seller has conducted the
Business only in the ordinary course. Without limiting the generality of the
foregoing sentence, since September 30, 1996, there has not been any: (i)
material adverse change in the Purchased Assets or Leased Real Estate; (ii)
damage or destruction to any Purchased Asset or Leased Real Estate, whether or
not covered by insurance; (iii) strike or other labor trouble at the Cinema;
(iv) increase in the salary, wage or bonus of any employee of the Cinema; or (v)
agreement or commitment to do any of the foregoing. Except as provided on
SCHEDULE 3.5, since September 30, 1996, Seller has not made any material
changes, substitutions or replacements to the equipment, furniture or fixtures
at the Cinema.
3.6. TAXES. Seller, its Affiliates and Seller's Predecessor, have filed or
caused to be filed on a timely basis, or will file or cause to be filed on a
timely basis, all Tax Returns that are required to be filed by it prior to or on
the Closing Date, pursuant to the Law of each governmental authority with taxing
power over it. All such Tax Returns were or will be, as the case may be, correct
and complete. Seller and Seller's Predecessor have paid or will pay all Taxes
that have or will become due as shown on such Tax Returns or pursuant to any
assessment received as an adjustment to such Tax Returns (subject to all rights
of appeal by Buyer). Seller and Seller's Predecessor have withheld and paid all
Taxes required to have been withheld in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third
party.
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3.7. UNDISCLOSED LIABILITIES. Except as disclosed on SCHEDULE 3.7, Seller
has no, and after Closing shall have no, Liabilities of any kind or nature
whatsoever that would attach to the Purchased Assets or for which any Buyer or
CCG may become liable.
3.8. CONDITION OF ASSETS; TITLE; BUSINESS. Seller has good, marketable and
exclusive title to all of the Purchased Assets. The tangible Purchased Assets
are in good operating condition and repair suitable for the purposes for which
they are used in the Business, and all equipment included in the Purchased
Assets have been maintained in the normal course of business by qualified
professionals. Except as disclosed on SCHEDULE 3.8 and except for Permitted
Encumbrances, none of the Purchased Assets is subject to any Encumbrance.
SCHEDULE 3.8 identifies any property located on the Leased Real Estate that is
not owned by Seller. The Encumbrances identified on SCHEDULE 3.8 will be removed
by Seller on or prior to Closing. The Purchased Assets do not contain any shares
of capital stock of or other equity interest in any Person. On the Closing Date,
the Purchased Assets will include at a minimum (i) one functioning xenon
projector bulb for each auditorium in the Cinema, and (ii) one new, unused,
spare xenon projector bulb for each type of projector at the Cinema location.
3.9. NO PENDING LITIGATION OR PROCEEDINGS. No action, suit, investigation,
claim or proceeding of any nature or kind whatsoever, whether civil, criminal or
administrative, by or before any Governmental Body or arbitrator ("Litigation")
is pending or, to the knowledge of Seller, CJM and Mr. Sayegh, threatened
against or affecting Seller, Mr. Sayegh, the Business, any of the Purchased
Assets, the Leased Real Estate, or any of the transactions contemplated by this
Agreement or any Other Agreement except for claims for personal injury and
workers compensation and further except for claims for property damage
identified on SCHEDULE 3.9 and claims by Governmental Bodies identified on
SCHEDULE 3.9. There is presently no outstanding judgment, decree or order of any
Governmental Body against or affecting Seller, Mr. Sayegh, the Business, any of
the Purchased Assets, the Leased Real Estate, or any of the transactions
contemplated by this Agreement or any Other Agreement. Neither Seller, CJM nor
Mr. Sayegh has any pending any Litigation against any third party related to the
Business.
3.10. CONTRACTS. There is no contract, lease or other agreement, that
materially affects or is used in the Business or the Leased Real Estate other
than the Lease Agreement (collectively, the "Contracts"). The Lease Agreement is
a legal, valid and binding obligation of Seller and is in full force and effect.
Seller and each other party to the Lease Agreement has performed all obligations
required to be performed by it thereunder and is not in breach or default, and
is not alleged to be in breach or default, in any respect thereunder, and, to
the knowledge of Seller, CJM and Mr. Sayegh, no event has occurred and no
condition or state of facts exists (or would exist upon the giving of notice or
the lapse of time or both) that would become or cause a breach, default or event
of default thereunder, would give to any Person the right to cause such a
termination or would cause an acceleration of any obligation thereunder. Seller
is not currently renegotiating the Lease Agreement.
3.11. PERMITS; COMPLIANCE WITH LAW. Subject to SECTION 5.10, Seller holds
all health department and certificates of occupancy required under any
applicable Law in connection with the operation of the Business and use and
occupancy of the Leased Real Estate ("Permits"). The Purchased Assets include
all Permits other than the occupancy permit which must be obtained
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under local law by Buyer. Seller has received no notice of any violation of Law
which has not been remedied or rectified.
3.12. LEASED REAL ESTATE. CJM has the right to quiet enjoyment of all
Leased Real Estate, including all renewal rights under the Lease Agreement. CJM
has not received any written or oral notice of assessments for public
improvements against any Leased Real Estate or any written or oral notice or
order by any Governmental Body, any insurance company that has issued a policy
with respect to any of such properties or any board of fire underwriters or
other body exercising similar functions that relates to violations of building,
safety or fire ordinances or regulations, claims any defect or deficiency with
respect to any of such properties or requests the performance of any repairs,
alterations or other work to or in any of such properties or in the streets
bounding the same, which in each case has not been remedied or rectified. There
is no pending condemnation, expropriation, eminent domain or similar proceeding
affecting all or any portion of the Leased Real Estate. CJM has not received any
written notice of any proposed, planned or actual curtailment of service of any
utility supplied to the Leased Real Estate. None of the Leased Real Estate is
subleased to any person. The Real Estate Leases are in full force and effect in
accordance with their terms, and have not been modified or amended (other than
as disclosed on EXHIBIT A) and, to the knowledge of Seller, CJM and Mr. Sayegh,
no party thereto is in default under any of the terms contained therein.
3.13. LABOR RELATIONS. No employee of Seller is represented by any union
or other labor organization. No representation election, arbitration proceeding,
grievance, labor strike, dispute, slowdown, stoppage or other labor trouble is
pending or, to the knowledge of Seller, CJM and Mr. Sayegh, threatened against,
involving, affecting or potentially affecting Seller. No complaint against
Seller or Seller's Predecessor is pending or, to the knowledge of Seller, CJM
and Mr. Sayegh, threatened before the National Labor Relations Board, the Equal
Employment Opportunity Commission or any similar state or local agency, by or on
behalf of any employee of Seller or Seller's Predecessor. To the knowledge of
Seller, CJM and Mr. Sayegh, Seller has no Liability for any occupational disease
of any of its employees, former employees or others.
3.14. INSURANCE. SCHEDULE 3.14 discloses all insurance policies on an
"occurrence" basis with respect to which Seller or Seller's Predecessor is the
owner, insured or beneficiary.
3.15. INTELLECTUAL PROPERTY RIGHTS. Seller neither owns nor is licensee to
any form of Intellectual Property Rights related to the Cinema other than the
names "CJM Enterprises", which is a Retained Asset, and rights to show films to
the public according to agreements which are Retained Assets and Retained
Liabilities. To the knowledge of Seller, CJM and Mr. Sayegh, no other Person has
any rights to the names "Kin Mall" in connection with the use of a cinema in Kin
Mall, New Jersey. To the knowledge of Seller, CJM and Mr. Sayegh, Seller is not
infringing upon the intellectual property rights of any other Person. SCHEDULE
3.14 identifies all computer software owned by Seller. With respect to any such
computer software, the Seller makes no agreement or other warranties or
representations hereunder other than that Seller a licensee of certain computer
software used by it in connection with certain computer hardware that Seller is
selling to Buyer hereunder and as to any license for software used with respect
to said computer hardware,
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(a) Seller will assign to Buyer at Closing any rights, title, or interest
in said software, but without warranty,
(b) Seller's obligation to sell, transfer, or assign any such software as
is otherwise called for above shall be void if prohibited by any such license,
and
(c) At Closing, regardless of whether (a) or (b) is the case, the price
paid by Buyer to Seller will remain as is otherwise called for in the agreement.
3.16. EMPLOYEE BENEFITS. Except for medical and dental coverage, life
insurance, and long-term disability plans described on SCHEDULE 3.16 for those
managers of the Cinema identified on SCHEDULE 3.16, Seller does not maintain any
Benefit Plan for any employees employed at the Cinema. After the Closing,
neither Buyer or CCG will have any Liability, with respect to any Benefit Plan
of Seller or any other member of the Seller Group, whether as a result of
delinquent contributions, distress terminations, fraudulent transfers, failure
to pay premiums to the PBGC, withdrawal Liability or otherwise. SCHEDULE 3.16
identifies the names of all employees of Seller employed at the Cinema,
including each listed employee's address, current compensation, vacation time to
which he or she is entitled and vacation time so far taken. SCHEDULE 3.16 also
includes copies of Seller's payroll records for all persons currently employed
by Seller at the Cinema. There are no written or oral agreements or arrangements
providing for the employment by Seller of any person at the Cinema other than
"at will" agreements. All employees of Seller at the Cinema are employees at
will. Seller does not provide a motor vehicle to any employee of Seller at the
Cinema.
3.17. ENVIRONMENTAL MATTERS. The representations and warranties contained
in this Section are qualified by (i) the disclosures on SCHEDULE 3.17, (ii) the
knowledge of Seller and Mr. Sayegh as to the activities of Seller's
Predecessors, and (iii) the knowledge of Seller and Mr. Sayegh as to the
activities of third parties prior to the time that Seller took possession of the
property subject to the Lease Agreement.
(a) COMPLIANCE; NO LIABILITY. Seller and Seller's Predecessor have
operated the Business and each parcel of Leased Real Estate in compliance with
all applicable Environmental Laws. Seller is not subject to any Liability,
penalty or expense (including legal fees) in connection with the Business or
ownership or leasing of the Leased Real Estate by virtue of any violation of any
Environmental Law, any environmental activity conducted on or with respect to
any property or any environmental condition existing on or with respect to any
property, in each case whether or not Seller or Seller's Predecessors permitted
or participated in such act or omission.
(b) TREATMENT; CERCLIS. Neither Seller nor Seller's Predecessors have
treated, stored, recycled or disposed of any Regulated Material on any Leased
Real Estate in violation of applicable Environmental Laws, and, to the knowledge
of Seller, CJM and Mr. Sayegh, no other Person has treated, stored, recycled or
disposed of any Regulated Material on any part of the Leased Real Estate in
violation of applicable Environmental Laws. There has been no release of any
Regulated Material at, on or under any Leased Real Estate. Neither Seller nor
Seller's Predecessors have transported or arranged for the transportation of any
Regulated Material from the Cinema to any location that is listed or proposed
for listing on the National Priorities List
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pursuant to Superfund, on CERCLIS or any other location that is the subject of
federal, state or local enforcement action or other investigation that may lead
to claims against Seller or Seller's Predecessor for cleanup costs, remedial
action, damages to natural resources, to other property or for personal injury
including claims under Superfund.
(c) NOTICES; EXISTING CLAIMS; CERTAIN REGULATED MATERIALS; STORAGE TANKS.
Neither Seller nor Seller's Predecessors have received any request for
information, notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation, abatement or cleanup
of any threatened or actual release of any Regulated Material. To the knowledge
of Seller, CJM and Mr. Sayegh, Seller is not required to place any notice or
restriction relating to the presence of any Regulated Material at any Leased
Real Estate. There has been no past, and there is no pending or contemplated,
claim by Seller or Seller's Predecessor under any Environmental Law or Laws
based on actions of others that may have impacted on the Leased Real Estate, and
neither Seller nor Seller's Predecessors has entered into any agreement with any
Person regarding any remedial action or existing environmental Liability or
expense with respect to any of the Real Property or any real property adjacent
to the Real Property. To the knowledge of Seller, CJM and Mr. Sayegh, all
storage tanks located on the Leased Real Estate, whether underground or
aboveground, are disclosed on SCHEDULE 3.17. Seller has not closed or caused to
be closed any underground storage tank on the Leased Real Estate.
(d) CONFIDENTIALITY. Buyer and CCG (for itself and for any affiliate of
itself or of Buyer) hereby agree that they will not disclose to any person any
information they may have gained with regard to the operation or the finances of
the business sold by Seller hereunder which information was gained by
disclosures made to them by Seller and that this obligation of confidentiality
shall survive the Closing. Without otherwise limiting the information subject to
the obligation of confidentiality set forth above, the information to be kept
confidential by Buyer and Buyer's affiliates, as is set forth above, shall
include the financial statements annexed to this agreement and the financial
representations made hereunder and any information contained in any accounting
records of Seller as may have been disclosed or made available to Buyer in
Buyer's review of Seller's business prior to Closing.
3.18. ADDITIONAL THEATERS. Neither Seller, CJM nor Mr. Sayegh has any
knowledge of the intention by any person to construct or open any movie theater
within a five-mile radius of the Cinema.
3.19. FINDERS' FEES. Neither Seller nor any of its officers, managers or
employees has employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby or by any Other Agreement.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer and CCG jointly and severally represent
and warrant to Seller, CJM and Mr. Sayegh as follows:
4.1. ORGANIZATION. Buyer and CCG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to own or lease its properties, carry on its
business, enter into this Agreement and the Other Agreements to which it is or
is to become a party and perform its obligations hereunder and thereunder.
4.2. AUTHORIZATION AND ENFORCEABILITY. This Agreement and each Other
Agreement to which Buyer and CCG is a party have been duly executed and
delivered by and constitute the legal, valid and binding obligations of Buyer
and CCG, enforceable against it in accordance with their respective terms. Each
Other Agreement to which Buyer and CCG is to become a party pursuant to the
provisions hereof, when executed and delivered by Buyer and CCG, will constitute
the legal, valid and binding obligation of Buyer and CCG, enforceable against
Buyer and CCG in accordance with the terms of such Other Agreement. All actions
contemplated by this Section have been duly and validly authorized by all
necessary proceedings by Buyer and CCG.
4.3. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and delivery of
this Agreement or any Other Agreement to which Buyer or CCG is or is to become a
party, the consummation of the transactions contemplated hereby or thereby nor
the compliance with or fulfillment of the terms, conditions or provisions hereof
or thereof by Buyer or CCG will: (i) contravene any provision of the Governing
Documents of any Buyer or CCG, (ii) conflict with, result in a breach of,
constitute a default or an event of default (or an event that might, with the
passage of time or the giving of notice or both, constitute a default or event
of default) under any of the terms of, result in the termination of, result in
the loss of any right under, or give to any other Person the right to cause such
a termination of or loss under, any contract, agreement or instrument to which
any Buyer or CCG is a party or by which any of their assets may be bound or
affected, (iii) result in the creation, maturation or acceleration of any
Liability of any Buyer or CCG (or give to any other Person the right to cause
such a creation, maturation or acceleration), or (iv) violate any Law or any
judgment or order of any Governmental Body to which any Buyer or CCG is subject
or by which any of its assets may be bound or affected. Except for the consent
of Provident Bank, no consent, approval or authorization of, or registration or
filing with, any Person is required in connection with the execution or delivery
by Buyer or CCG of this Agreement or any of the Other Agreements to which Buyer
or CCG is or is to become a party pursuant to the provisions hereof or the
consummation by Buyer or CCG of the transactions contemplated hereby or thereby.
4.4. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending or, to
the knowledge of any Buyer or CCG, threatened against or affecting CCG or any
Affiliate of CCG in connection with any of the transactions contemplated by this
Agreement or any Other Agreement
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to which Buyer and CCG is or is to become a party or that would, to CCG's
knowledge, have a material adverse effect on CCG's business considered as a
whole. There is presently no outstanding judgment, decree or order of any
Governmental Body against or affecting CCG or any Affiliate of CCG in connection
with the transactions contemplated by this Agreement or any Other Agreement to
which any Buyer or CCG is or is to become a party or that would, to CCG's
knowledge, have a material adverse effect on CCG's ability to pay the
Subordinated Note.
4.5. FINDERS' FEES. Neither Buyer, CCG nor any of their officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fee, commission or finders' fee in connection with
any of the transactions contemplated hereby.
4.6. STOCK OWNERSHIP. CCG owns all of the issued and outstanding capital
stock of the Buyer.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date, unless Buyer shall otherwise consent in writing,
Seller shall (and Mr. Sayegh shall cause Seller to) conduct its affairs as
follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted only in
the ordinary course and consistent with past practice. Seller, CJM and Mr.
Sayegh shall maintain the Purchased Assets and the Leased Real Estate consistent
with past practice and shall comply in a timely fashion with the provisions of
all Permits and its other agreements and commitments. Seller shall use its best
efforts to keep the Business organization intact, keep available the services of
its present employees and preserve the goodwill of its suppliers, patrons and
others having business relations with it. Seller shall maintain in full force
and effect its policies of insurance, subject only to variations required by the
ordinary operations of the Business, or else shall obtain, prior to the lapse of
any such policy, substantially similar coverage with insurers of recognized
standing.
(b) PROHIBITED TRANSACTIONS. Seller shall not: (i) amend or terminate any
Contract or Permit; (ii) fail to pay any Liability or charge when due, other
than Liabilities contested in good faith by appropriate proceedings; (iii) enter
into any employment or consulting contract or arrangement with any employee of
the Cinema; (iii) take any action or omit to take any action that is reasonably
likely to result in the occurrence of any event described in SECTION 3.5; or
(vi) take any action or omit to take any action that will cause a breach or
termination of any Permit, other than termination by fulfillment of the terms
thereunder.
(c) ACCESS, INFORMATION AND DOCUMENTS. Seller shall give to Buyer and to
Buyer's employees and representatives (including accountants, attorneys,
environmental consultants and engineers) access during normal business hours to
all of the properties, books, contracts, commitments, records, officers,
personnel and accountants (including independent public accountants and their
workpapers) of Seller solely as they relate to the Cinema and shall furnish to
Buyer all such documents and copies of documents and all information with
respect to the
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properties, Liabilities and affairs of Seller (solely as they relate to the
Cinema) as Buyer may reasonably request, including but not limited to weekly
reports of gross box office and concession receipts at the Cinema, at the same
time such reports are available to Seller's management.
5.2. FULFILLMENT OF AGREEMENTS. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
ARTICLE VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement. Seller shall, prior to Closing, obtain the consents referred to
in SECTION 3.3.
5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS. Seller agrees to pay,
perform and discharge any and all severance payments, payroll and employment
related Liabilities with respect to employees of Seller at the Cinema accruing
up to the close of business on the date immediately preceding the Closing Date
or which result from the transfer of the Purchased Assets hereunder and the
employment by Buyer of those employees and shall indemnify and hold harmless
Buyer and its directors, officers and Affiliates from and against any and all
losses, Liabilities, damages, costs and expenses, including reasonable legal
fees and disbursements, that any of the aforesaid may suffer or incur by reason
of or relating to any such Liabilities.
5.4. SELLER'S EMPLOYEES. Buyer shall have the right, but not the
obligation, to offer employment to any of the employees of Seller who are
employed at the Cinema. At or prior to the Closing, Seller shall fully
compensate all employees of Seller at the Cinema for all work performed through
and including the Closing Date. Seller does not guaranty that any of the
employees to which Buyer or CCG will offer employment will accept such offer of
employment.
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS.
(a) SELLER'S LIABILITY. Seller shall remain liable for all Liability for
all workers' compensation, disability and occupational diseases of or with
respect to all of Seller's employees attributable to injuries, claims,
conditions, events and occurrences occurring on or before the Closing Date.
(b) BUYER'S LIABILITY. Buyer shall be liable for all Liability for all
workers' compensation, disability and occupational diseases of or with respect
to all of employees of Seller hired by Buyer attributable to injuries, claims,
conditions, events and occurrences first occurring after the Closing Date.
5.6. COVENANT NOT TO COMPETE.
(a) RESTRICTION. For a period of five years from and after the Closing
Date, neither Seller, CJM nor Mr. Sayegh shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be employed or otherwise connected as an officer,
employer, stockholder, partner or otherwise with, the Cinema within a seven mile
radius of any theatre owned directly or indirectly by CCG on the date
immediately following the Closing Date. Ownership of not more than 2% of the
outstanding
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stock of any publicly traded company or operation of the projects identified in
SECTION 5.11 shall not be a violation of this Section.
(b) ENFORCEMENT. The restrictive covenant contained in this Section is a
covenant independent of any other provision of this Agreement and the existence
of any claim that Seller may allege against any other party to this Agreement,
whether based on this Agreement or otherwise, shall not prevent the enforcement
of this covenant. Seller agrees that Buyer's remedies at law for any breach or
threat of breach by Seller of the provisions of this Section will be inadequate,
and that Buyer shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Section and to enforce specifically the terms
and provisions hereof, in addition to any other remedy to which Buyer may be
entitled at law or equity. In the event of litigation regarding this covenant
not to compete, the prevailing party in such litigation shall, in addition to
any other remedies the prevailing party may obtain in such litigation, be
entitled to recover from the other party its reasonable legal fees and out of
pocket costs incurred by such party in enforcing or defending its rights
hereunder. The length of time for which this covenant not to compete shall be in
force shall not include any period of violation or any other period required for
litigation during which Buyer seek to enforce this covenant. Should any
provision of this Section be adjudged to any extent invalid by any competent
tribunal, such provision will be deemed modified to the extent necessary to make
it enforceable.
5.7. PUBLICITY. Seller and Buyer shall not issue any press release or
otherwise make any announcements to the public or the employees of Seller with
respect to this Agreement prior to the Closing Date without the prior written
consent of the other, except as required by Law. If Buyer believes that a public
disclosure of the transactions contemplated hereby is required by law, Buyer
shall give to Seller notice thereof at least 24 hours prior to making such
disclosure.
5.8. TRANSITIONAL MATTERS. Seller, CJM and Mr. Sayegh shall cooperate with
and assist Buyer and its authorized representatives in order to provide, to the
extent reasonably requested by Buyer, an efficient transfer of control of the
Purchased Assets and the Leased Real Estate and to avoid any undue interruption
in the activities and operations of the Business and the Leased Real Estate
following the Closing Date. Seller shall not cause any utilities to be
disconnected until the Buyer shall have established an account for such utility
in Buyer's own name. Seller shall assist in transferring to Buyer the telephone
numbers for the Cinema location. Buyer shall be liable to Seller for the utility
payments for any utility maintained by the Seller after the Closing Date. Seller
shall cooperate with Buyer's lender, Provident Bank, in connection with the
consummation by Buyer of the transactions provided hereunder, as reasonably
requested by such lender. Such cooperation shall include the execution and
delivery of a subordination agreement in favor of Provident Bank and its assigns
with respect to the Subordinated Note and shall permit Provident Bank to rely on
the legal opinion be delivered by Seller's counsel hereunder. Prior to Closing,
Seller shall remove all of its movie trailers from films at the Cinema.
5.9. BOOKS AND RECORDS. Seller shall not destroy or dispose of any books,
records, and files relating to the Business to the extent that they pertain to
the Business prior to the Closing Date.
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5.10. PERMITS; N.J. ISRA. Seller shall use its best efforts to provide to
Buyer valid Permits for the Cinema prior to Closing. In the event that Seller is
unable to do so by Closing, then Seller shall provide Buyer with such Permits
within 30 days after Closing. Sellers shall obtain prior to Closing letters of
Non-Applicability with respect to the Leased Real Estate under the New Jersey
Site Recovery Act (PL 1993, ch. 39).
5.11. RIGHT OF FIRST REFUSAL. Mr. Sayegh hereby grants to CCG a right of
first refusal to purchase any movie theater property (whether in corporate
solution or otherwise) proposed to be sold by Mr. Sayagh within the three year
period ending on the third anniversary of the Closing Date. The terms of such
right for each theater property are hereby forth in the Right of First Refusal
Agreement in substantially the form of EXHIBIT E hereto. As each such theater
property is identified, Mr. Sayagh shall notify CCG of such property and CCG and
Mr. Sayegh shall, as a formality, promptly memorialize their agreement with
respect to such theater by completing the information in the form of such Right
of First Refusal Agreement and executing and delivering such completed Right of
First Refusal Agreement. The parties agreement set forth in this Section is
intended to be legally binding notwithstanding that the theater properties
subject to this right have not yet been specifically identified herein.
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER. The obligation of Buyer
and CCG to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Buyer or CCG at Buyer's or CCG's
sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Seller, CJM and Mr. Sayegh contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Seller, CJM and Mr. Sayegh shall have performed in all respects all of the
covenants and complied with all of the provisions required by this Agreement to
be performed or complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby or that would, after Closing, limit or adversely affect Buyer's ownership
of the Purchased Assets or the Leased Real Estate in a manner different from
Seller's, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements or seeking
monetary or other relief by reason of the consummation of any of such
transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the Closing
Date, there shall have been no material adverse change, regardless of insurance
coverage therefor, in the
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Business or any of the Purchased Assets, results of operations, prospects or
condition, of the Cinema or the Leased Real Estate.
(d) CLOSING CERTIFICATE. If Closing occurs after the date hereof, Seller
shall have delivered a certificate, dated the Closing Date certifying to the
fulfillment of the conditions set forth in subparagraphs (a), (b) and (c) of
this Section. Such certificate shall constitute a representation and warranty of
Seller with regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Buyer and CCG shall have received the other
documents referred to in SECTION 6.3(A). All agreements, certificates, opinions
and other documents delivered by Seller to Buyer and CCG hereunder shall be in
form and substance reasonably satisfactory to Buyer and CCG.
(f) TITLE INSURANCE. Buyer, at its sole cost and expense, shall have
obtained for all Leased Real Estate final marked commitments to issue to Buyer
ALTA (1990-Form B with appropriate state endorsements) owner's policies of title
insurance in coverage amounts equal to the fair market values of the Leased Real
Estate, insuring good title to the Leased Real Estate with mechanic's liens
coverage and such endorsements as Buyer may have reasonably requested and with
exceptions only for ALTA standard printed exceptions (other than mechanic's and
materialmen's liens and rights of possession), and Permitted Encumbrances.
(g) BOARD APPROVAL; BANK APPROVAL. Buyer and CCG shall have received the
approval of its Board of Directors and its lender, Provident Bank, to the
transactions contemplated hereunder.
(h) RELEASE OR TERMINATION OF MORTGAGE AND OTHER ENCUMBRANCES. Seller
shall have caused the mortgage on the Leased Real Estate and all of its other
Encumbrances on the Purchased Assets to be released.
(i) LEASED REAL ESTATE. Buyer shall have received from the lessor of the
Lease Agreement consent to assignment of leasehold interest, consent to
leasehold mortgage, and estoppel certificates, nondisturbance agreements, and
other documents as shall be reasonably requested by Provident Bank, all in form
and substance satisfactory to Buyer and Provident Bank.
(j) CONSENTS. Seller shall have received the other consents, approvals and
actions of the Persons identified in SECTION 3.3.
(k) NEW THEATER TRANSITION FORMS. Buyer shall have received a New Theater
Transition Form from Seller.
(l) DUE DILIGENCE. CCG shall have been satisfied with its due diligence
investigation of the Cinema.
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER, CJM AND MR. Sayegh. The
obligation of Seller, CJM and Mr. Sayegh to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of the following
conditions, any one or more of
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which may be waived in whole or in part by Seller, CJM or Mr. Sayegh at Seller's
or Mr. Sayegh's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Buyer and CCG contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date. Buyer
and CCG shall have performed all of the covenants and complied in all respects
with all of the provisions required by this Agreement to be performed or
complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or the Other Agreements or seeking monetary or
other relief by reason of the consummation of such transactions.
(c) CLOSING CERTIFICATE. If Closing occurs after the date hereof, Buyer
and CCG shall have delivered a certificate, dated the Closing Date certifying to
the fulfillment of the conditions set forth in subparagraphs (a) and (b) of this
SECTION 6.2. Such certificate shall constitute a representation and warranty of
Buyer with regard to the matters therein for purposes of this Agreement.
(d) CLOSING DOCUMENTS. Seller shall also have received the other documents
referred to in SECTION 6.3(B). All agreements, certificates, opinions and other
documents delivered by Buyer to Seller hereunder shall be in form and substance
reasonably acceptable to counsel for Seller, in the exercise of such counsel's
reasonable professional judgment.
(e) LEASE AGREEMENT. Seller shall have received from the lessor of the
Lease Agreement consent to assignment of the Lease Agreement to Buyer. If Mr.
Sayegh is not released from his obligations under the Lease Agreement, then CCG
shall indemnify and hold Mr. Sayegh harmless from and against any damages
incurred by Mr. Sayegh as a consequence of the breach of the Lease Agreement by
Buyer after Closing.
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY SELLER, CJM AND MR. SAYEGH. Seller, CJM and Mr. Sayegh
shall deliver or cause to be delivered to Buyer at the Closing:
(i) General warranty bills of sale and instrument of assignment to
the Purchased Assets in the form attached hereto as EXHIBIT F.
(ii) Assignments of all transferable or assignable licenses, Permits
and warranties relating to the Purchased Assets and of any Intellectual Property
included in the Purchased Assets, duly executed and in forms acceptable to
Buyer.
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(iii) [not used].
(iv) Assignments of the Lease Agreement in the form attached hereto
as EXHIBIT G.
(v) Certificates of the appropriate public officials to the effect
that Seller was a validly existing corporation in good standing in its state of
formation as of a date not more than 15 business days prior to the Closing Date.
(vi) Incumbency and specimen signature certificates dated the
Closing Date, signed by the officers of Seller and certified by its Chief
Executive Officer or Executive Vice President.
(vii) True and correct copies of the Seller's Certificate of
Incorporation certified by the Secretary of State as of the Closing Date.
(viii) Certificates of Seller (A) setting forth all resolutions of
the Directors of Seller and the stockholders of Seller authorizing the execution
and delivery of this Agreement and the Other Agreements and the performance by
Seller of the transactions contemplated hereby and thereby, and (B) to the
effect that the Certificate of Incorporation of Seller delivered pursuant to
SECTION 6.3(A)(VII) were in effect at the date of adoption of such resolutions,
the date of execution of this Agreement and the Closing Date.
(ix) The opinion of Buklad & Buklad, legal counsel to Seller, in
substantially the form of EXHIBIT H.
(x) Keys for the Cinema location.
(xi) All vendor warranties (including those for the roofs on the
Cinema) respecting the Purchased Assets.
(xii) Such other agreements and documents as Buyer may reasonably
request.
(b) DELIVERIES BY BUYER. Buyer shall deliver or cause to be delivered to
Seller at the Closing:
(i) The Subordinated Note.
(ii) [not used].
(iii) A certificate of the appropriate public official to the effect
that Buyer and CCG is a validly existing corporation in the State of Delaware as
of a date not more than 15 business days prior to the Closing Date.
(iv) Incumbency and specimen signature certificates signed by the
officers of Buyer and CCG and certified by the Secretary of Buyer and CCG.
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(v) True and correct copies of the Certificates of Incorporation of
Buyer and CCG as of a date not more than 15 business days prior to the Closing
Date, certified by the Secretary of State of Delaware.
(vi) A certificate of the Secretary of Buyer and CCG (A) setting
forth all resolutions of the Board of Directors of Buyer and CCG authorizing the
execution and delivery of this Agreement and Other Agreements and the
performance by Buyer and CCG of the transactions contemplated hereby and
thereby, certified by the Secretary of Buyer and CCG and (B) to the effect that
the Certificates of Incorporation of Buyer delivered pursuant to SECTION
6.3(B)(V) were in effect at the date of adoption of such resolutions, the date
of execution of this Agreement and the Closing Date.
(vii) The opinion of Kirkpatrick & Lockhart LLP, counsel to Buyer
and CCG, in substantially the form of EXHIBIT I.
(viii) Such other agreements and documents as Seller may reasonably
request.
6.4. TERMINATION.
(a) MUTUAL CONSENT; FAILURE OF CONDITIONS. Except as provided in SECTION
6.4(B), this Agreement may be terminated at any time prior to Closing by: (i)
mutual consent of Buyer, CCG and Seller; (ii) Buyer and CCG, if any of the
conditions specified in SECTION 6.1 hereof shall not have been fulfilled by
January 19, 1998 and shall not have been waived by Buyer and CCG; or (iii)
Seller, if any of the conditions specified in SECTION 6.2 hereof shall not have
been fulfilled by January 19, 1998 and shall not have been waived by Seller. In
the event of termination of this Agreement by either Buyer, CCG or Seller
pursuant to clause (ii) or (iii) of the immediately preceding sentence, Buyer
and CCG, on the one hand, and Seller on the other hand shall be liable to the
other for any breach hereof by such party, which breach led to such termination,
and the rights and obligations of the parties set forth in SECTIONS 7.2, 7.3 and
8.1 shall survive such termination. Buyer, CCG and Seller shall also be entitled
to seek any other remedy to which it may be entitled at law or in equity in the
event of such termination, which remedies shall include injunctive relief and
specific performance. Notwithstanding the foregoing, in the event that this
Agreement is terminated by one party hereto pursuant to clause (ii) or (iii) of
the first sentence of this Section solely as a result of a breach by the other
party hereto of a representation or warranty of such other party as of a date
after the date of this Agreement, which breach could not have been reasonably
anticipated by such other party and was beyond the reasonable control of such
other party, then the remedy of the party terminating this Agreement shall be
limited solely to recovery of all of such party's costs and expenses incurred in
connection herewith.
(b) CASUALTY DAMAGE. Notwithstanding anything else herein to the contrary,
if prior to Closing the Purchased Assets (or any portion thereof) are damaged by
fire or any other cause, the reasonable estimate of the immediate repair of
which would cost more than $50,000, Buyer at their option, which may be
exercised by written notice given to Seller within ten business days after
Buyer's receipt of notice of such loss, may declare this Agreement null and
void, or Buyer may Close subject to reduction of the Purchase Price by the
amount of any applicable insurance deductible which shall be paid by Buyer and
assignment to Buyer of the proceeds from any
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insurance carried by Seller covering such loss. If prior to Closing the
Purchased Assets (or any portion thereof) are damaged by fire or any other
cause, the reasonable estimate of the repair of which would cost $50,000 or
less, such event shall not excuse Buyer from its obligations under this
Agreement, but the Purchase Price shall be reduced by an amount equal to the
amount of such cost and Seller shall be entitled to retain the net insurance
proceeds collected or to be collected by Seller.
(c) FAILURE TO OBTAIN LANDLORD'S CONSENT. Notwithstanding anything else
herein to the contrary, failure to obtain the consent of the landlord to the
assignment of the Lease Agreement from Seller to Buyer shall not be a breach of
any party hereto. In the event that the Seller or Mr. Sayegh determines to
pursue the landlord for any damages for wrongfully withholding or conditioning
its consent to the assignment of the Lease, the Buyer shall not be a party to
nor have any rights of recovery in any such action and the Seller and Mr. Sayegh
will be free to pursue or abandon any such action against the landlord as they
see fit without including or otherwise allowing for the participation of Buyer.
In the event, the Closing does not proceed and the Agreement is terminated, then
the Buyer shall thereupon have no further rights to buy the Purchased Assets
otherwise to have been sold hereunder, and the Seller will thereupon be free to
hold, operate, sell, or dispose of same to any person at any time thereafter.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing; PROVIDED, HOWEVER, THAT, representations and warranties hereunder
shall survive for a period of three years after the Closing Date, with the
exception of the representations and warranties contained in SECTIONS 3.1, 3.2,
3.3 AND 3.6, the first sentence of SECTION 3.8, and SECTIONS 4.1, 4.2 AND 4.3,
all of which shall survive for the period of the applicable statute of
limitations plus 90 days. All claims for damages made by virtue of any
representations, warranties and agreements herein shall be made under, and
subject to the limitations set forth in, this ARTICLE VII. The representations
and warranties set forth in ARTICLES III and IV are cumulative, and any
limitation or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and warranty
therein. Except the representations and warranties of each party hereto
expressly contained in this Agreement or the Other Agreements, no party hereto
is making and specifically disclaims any representations or warranties of any
kind or character, express or implied.
7.2. INDEMNIFICATION BY SELLER, CJM AND MR. SAYEGH. Seller, CJM and Mr.
Sayegh shall jointly and severally indemnify, defend, save and hold Buyer, CCG
and their officers, directors, employees, agents and Affiliates (collectively,
"Buyer Indemnitees") harmless from and against all demands, claims, actions or
causes of action, assessments, losses, damages, deficiencies, Liabilities, costs
and expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing; collectively, "Buyer Damages") asserted against, imposed upon,
resulting to, required to be paid by, or incurred by any Buyer Indemnitees,
directly or indirectly, in connection with, arising out of,
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resulting from, or which would not have occurred but for, (i) a material breach
of any representation or warranty made by Seller in this Agreement, in any
certificate or document furnished pursuant hereto by Seller or any Other
Agreement to which Seller is or is to become a party, (ii) a breach or
nonfulfillment of any covenant or agreement made by Seller in or pursuant to
this Agreement and in any Other Agreement to which Seller is or is to become a
party, (iii) any Retained Liability, (iv) any successor liability (or
Liabilities based on similar theories) arising out of any facts or circumstances
occurring prior to the Closing Date or Liability arising out of or attaching by
virtue of Seller being a member of a controlled group or affiliated group of
entities, and (v) the provisions of 29 U.S.C. ss. 1161-1168, as same may be
amended from time to time, and the regulations and rulings thereunder, with
respect to the employees of Seller at the Cinema.
7.3. INDEMNIFICATION BY BUYER. Buyer and CCG shall indemnify, defend, save
and hold Mr. Sayegh and Seller and its officers, directors, employees,
Affiliates and agents (collectively, "Seller Indemnitees") harmless from and
against any and all demands, claims, actions or causes of action, assessments,
losses, damages, deficiencies, Liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing; collectively,
"Seller Damages") asserted against, imposed upon, resulting to, required to be
paid by, or incurred by any Seller Indemnitees, directly or indirectly, in
connection with, arising out of, resulting from, or which would not have
occurred but for, (i) a material breach of any representation or warranty made
by Buyer or CCG in this Agreement or in any certificate or document furnished
pursuant hereto by Buyer or CCG or any Other Agreement to which Buyer or CCG is
or is to become a party, and (ii) a breach or nonfulfillment of any covenant or
agreement made by any Buyer or CCG in or pursuant to this Agreement and in any
Other Agreement to which any Buyer or CCG is or is to become a party.
7.4. WAIVER OF STATUTE OF LIMITATIONS. Each party hereto waives any
applicable statute of limitations that may be applicable to Damages arising
under clauses (iii), (iv) and (v) of Section 7.2 and clause (iii) of Section
7.3.
7.5. NOTICE OF CLAIMS. If any Buyer Indemnitee or Seller Indemnitee (an
"Indemnified Party") believes that it has suffered or incurred or will suffer or
incur any Damages for which it is entitled to indemnification under this ARTICLE
VII, such Indemnified Party shall so notify the party or parties from whom
indemnification is being claimed (the "Indemnifying Party") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
ARTICLE VII or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
7.6. THIRD PARTY CLAIMS. The Indemnifying Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnifying Party may compromise or settle
the same, provided that the Indemnifying Party shall give the Indemnified Party
advance notice of any proposed compromise or settlement. The
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Indemnifying Party shall permit the Indemnified Party to participate in the
defense of any such action or suit through counsel chosen by the Indemnified
Party, provided that the fees and expenses of such counsel shall be borne by the
Indemnified Party (subject to reimbursement pursuant to SECTION 7.1 or 7.2, as
the case may be).
7.7. LIMITATION ON INDEMNIFICATION. No Indemnified Party shall be entitled
to make a claim for indemnification for inaccuracy in or breach of
representation or warranty pursuant to clause (I) of SECTION 7.2 until the
cumulative and aggregate amount of all Damages as a result of all matters
covered by clause (I) of SECTION 7.2 exceeds $10,000 (the "Basket Amount"). If
and when such damages do exceed the Basket Amount, then the Indemnified Party
shall be entitled to indemnification for all such damages in excess of the
Basket Amount. Any indemnification payment under this Agreement shall take into
account any insurance proceeds or other third party reimbursement actually
received (other than the proceeds of any self insurance or, to the extent it is
the economic equivalent of self insurance, any insurance that is retrospectively
rated).
7.8. PAYMENT. All indemnification payments under this ARTICLE VII shall be
made promptly in cash.
ARTICLE VIII.
MISCELLANEOUS
8.1. COSTS AND EXPENSES. Buyer and CCG, on the one hand, and Seller, CJM
and Mr. Sayegh, on the other hand, shall each pay its respective expenses,
brokers' fees and commissions and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, including all accounting,
legal and appraisal fees and settlement charges. All transfer taxes, if any,
incurred as a result of the transfer of the Purchased Assets shall be paid by
Seller.
8.2. PRORATION OF EXPENSES. All accrued expenses associated with the Leased
Real Estate included in the Purchased Assets, such as rents and other charges
under the Lease Agreement, electricity, gas, water, sewer, telephone, property
taxes, security services and similar items, shall be prorated between Buyer and
Seller as of the Closing Date. Buyer and Seller shall settle such amounts within
30 days after Closing.
8.3. BULK SALES. The parties hereto waive compliance with the provisions
of any bulk sales law applicable to the transactions contemplated hereby, and,
notwithstanding anything else in this Agreement to the contrary, Seller shall
hold Buyer harmless from and against all claims asserted against the Purchased
Assets or the Buyer pursuant to such bulk sales laws. Seller agrees to pay
timely its account creditors with respect to liabilities not being assumed by
Buyer hereunder.
8.4. FURTHER ASSURANCES. Seller shall, at any time and from time to time
on and after the Closing Date, upon the reasonable request by Buyer and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Purchased Assets to Buyer.
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8.5. NOTICES. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made (i) the fifth business day after the date of mailing, if delivered
by registered or certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier, with a record of
receipt, or (iv) the next day after the date of dispatch, if sent by cable,
telegram, facsimile or telecopy (with a copy simultaneously sent by registered
or certified mail, postage prepaid, return receipt requested), to the parties at
the following addresses:
(i) if to Buyer, to:
7 Waverly Place
Madison, New Jersey 07940
Telecopy: (201) 377-4303
Attention: A. Dale Mayo, President
with a required copy to:
David L. Forney, Esq.
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
Telecopy: (212) 536-3901
(ii) if to Seller, to:
Mr. Jesse Y. Sayegh
Rialto Theatre of Westfield, Inc.
244-254 East Broad Street
Westfield, New Jersey 07090
Telecopy:
with a required copy to:
Henry A. Buklad, Jr., Esquire
Buklad & Buklad
76 S. Orange Avenue
South Orange, New Jersey 07079
Telecopy: (201) 762-1329
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
8.6. CURRENCY. All currency references herein are to United States dollars.
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW. Buyer and CCG shall be entitled to
offset or recoup from amounts due to Seller from Buyer or CCG hereunder or under
any Other
26
<PAGE>
Agreement (including the Subordinated Note) against any obligations of Seller to
Buyer or CCG hereunder or under any Other Agreement (including Buyer Damages).
This Agreement and all the rights and powers granted hereby shall bind and inure
to the benefit of the parties hereto and their respective permitted successors
and assigns. This Agreement and the rights, interests and obligations hereunder
may not be assigned by any party hereto without the prior written consent of the
other parties hereto, except that Buyer or CCG may make such assignments to any
Affiliate of Buyer or CCG provided that Buyer or CCG remain liable hereunder,
and, further, Buyer and CCG may collaterally assign their rights hereunder to
Provident Bank or other commercial lending institution. This Agreement shall be
governed by and construed in accordance with the laws of New Jersey without
regard to its conflict of law doctrines.
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and the
Schedules and Exhibits set forth all of the promises, covenants, agreements,
conditions and undertakings between the parties hereto with respect to the
subject matter hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express or implied,
oral or written. This Agreement is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder, except the provisions
of SECTIONS 7.2 AND 7.3 relating to Buyer Indemnitees and Seller Indemnitees and
SECTION 8.10.
8.10. THIRD PARTY BENEFICIARY. No Person is an intended third party
beneficiary of this Agreement.
8.11. SEVERABILITY. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
27
<PAGE>
8.12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
KIN MALL CINEMAS, INC.
By:/s/ Jesse Sayegh
------------------------------
Jesse Sayegh
Title: President
C.J.M. ENTERPRISES, INC.
By: /s/ Jesse Sayegh
-----------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
-----------------------------
A. Dale Mayo
Title: President
CCC KIN MALL CINEMA CORP.
By: /s/ A. Dale Mayo
-----------------------------
A. Dale Mayo
Title: President
29
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1P Permitted Encumbrances
Schedule 3.5 No Changes
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Title; Business
Schedule 3.9 Litigation or Proceedings
Schedule 3.12 Leased Real Estate
Schedule 3.14 Insurance
Schedule 3.16 Employee Benefits
Schedule 3.17 Environmental Matters
Exhibit A Leased Real Estate/Lease Agreement
Exhibit B Subordinated Note
Exhibit C [not used]
Exhibit D Income Statements
Exhibit E Right of First Refusal Agreement
Exhibit F Form of General Warranty Bills of Sale; Instrument of
Assignment
Exhibit G Form of Assignment of Lease Agreement
Exhibit H Form of Opinion of Buklad & Buklad
Exhibit I Form of Opinion of Kirkpatrick & Lockhart LLP
[Schedules and Exhibits will be provided upon request.]
<PAGE>
Amendment No. 1 to Asset Purchase Agreement
("AMENDMENT NO. 1"), dated as of December 12,
1997, by and among Jesse Sayegh, an individual
residing in Kinnelon, New Jersey ("MR.
Sayegh"), Kin Mall Cinemas, Inc., a New Jersey
corporation ("SELLER"), C.J.M. Enterprises,
Inc., a New Jersey corporation ("CJM"), CCC Kin
Mall Cinema Corp., a Delaware corporation
("BUYER"), and Clearview Cinema Group, Inc., a
Delaware corporation ("CCG").
The parties hereto entered into that certain Asset Purchase Agreement
dated as of November 14, 1997 (the "Asset Purchase Agreement") and desire to
amend the Asset Purchase Agreement pursuant to the terms contained herein.
In consideration of the representations, warranties, covenants and
agreements contained herein and in the Asset Purchase Agreement, Seller, Buyer,
Mr. Sayegh, CJM and CCG, each intending to be legally bound hereby, agree as set
forth below.
1. DEFINITIONS. All capitalized terms used in this Amendment not otherwise
defined in this Amendment have the meanings given them in the Asset Purchase
Agreement.
2. AMENDMENT. The Asset Purchase Agreement is hereby amended as provided
below.
3. SUBORDINATED NOTE; PREFERRED STOCK; ETC. All references in the Asset
Purchase Agreement to the Subordinated Note are hereby deleted. Except as
provided in Sections 4 and 5 below and subject to Sections 8 and 9 below, and
subject to Sections 8 and 9 below, CCG shall deliver to Seller within two years
after the Closing Date 750 shares of Class B Nonvoting Cumulative Redeemable
Preferred Stock having terms substantially set forth in the Certificate of
Designations, Preferences, Rights and Limitations attached hereto as EXHIBIT A
(the "Class B Preferred Stock"). The shares of Class B Nonvoting Cumulative
Redeemable Preferred Stock shall be included within the definition of "Other
Agreements" for all purposes in the Asset Purchase Agreement. CCG shall not
issue any additional shares of Class B Preferred Stock at any time during which
CCG has outstanding dividend arrearges on the Class B Preferred Stock held by
Seller. CCG shall not issue any shares of Preferred Stock that have rights
senior to the Class B Preferred Stock as to dividends and redemptions so long as
Seller or its affiliates hold more than 100 outstanding shares of Class B
Preferred Stock.
4. POSSIBLE NEW THEATER DEVELOPMENT. On Wednesday, December 3, 1997, the
parties to this Amendment became aware through a newspaper article of the
possibility of the development of a new theater complex on Route 23
approximately one mile north of the junction of Route 23 and Route 267 near the
Sun Tan Lake property in New Jersey, which location is in the vicinity of the
Cinema. If any person receives all material governmental approvals to build a
new theater at or around such location within two years after the Closing Date,
then CCG shall be relieved of its obligation to deliver the Class B Preferred
Stock.
<PAGE>
5. CASH IN LIEU OF CLASS B PREFERRED STOCK. If on the second anniversary
of the Closing Date CCG is not relieved of its obligation to deliver the Class B
Preferred Stock pursuant to the terms of Section 4 above, and, prior to such
second anniversary CCG completes the issuance of debt securities aggregating at
least $70 million in an offering governed by Rule 144A issued by the Securities
Exchange Commission under the Securities Act (the "144A Offering"), then CCG
shall deliver to Seller $750,000 in cash on the second anniversary of the
Closing Date in lieu of delivery of the Class B Preferred Stock. Upon closing of
the 144A Offering, CCG will deliver the $750,000 cash into escrow (referred to
below) pending resolution of the contingency named in Section 4 above.
6. INTEREST. If on the second anniversary of the Closing Date CCG is not
relieved of its obligation to deliver the Class B Preferred Stock pursuant to
the terms of Section 4 above, then on the second anniversary of the Closing
Date, CCG shall deliver to Seller an amount of cash equal to that amount of
interest that would have accrued on a loan by Seller to CCG in the principal
amount of $750,000 using an annual interest rate of 10 1/2 %, compounded
annually. CCG shall make quarterly payments of interest into escrow (referred to
below) pending resolution of the contingency named in Section 4 above, such
interest payments into escrow to be made on the same dates as the Dividend
Payment Dates contained in the terms of the Class B Preferred Shares.
7. SUBORDINATION. All obligations of CCG and Buyer to deliver any cash
after the Closing Date pursuant to this Amendment shall be subordinate and
subject in right of payment, to the prior payment in full of all Indebtedness of
CCG and Buyer to the extent provided in one or more subordination agreements by
and among CCG and Buyer, Seller and the holder of the Indebtedness. For purposes
hereof, "Indebtedness" means the principal of, premium, if any, and interest
(including any interest accruing after the filing of a petition in bankruptcy)
on and other amounts due on or in connection with any indebtedness of CCG and
Buyer as defined in and arising under any loan, credit, security or similar
agreement with any bank, insurance company, or other commercial financial
institution, in any case whether arising prior to, on or after the Closing Date,
and all renewals, extensions, and refundings thereof. As a condition to CCG's
obligation hereunder to issue Class B Preferred Stock to Seller, Seller shall
have first executed and delivered in favor of CCG's senior lender such senior
lender's standard form of subordination agreement with respect to the Class B
Preferred Stock.
8. ESCROW. Notwithstanding the foregoing, CCG shall deliver the Class B
Preferred Stock and the cash provided above to an independent escrow agent
pursuant an escrow agreement to be negotiated by the parties to an to be held
pending the resolution of the contingency named in Section 4 above.
9. CLASS B PREFERRED STOCK. All Class B Preferred Stock promised to be
delivered pursuant hereto shall not be registered under the U.S. Securities Act
of 1933, as amended (the "Securities Act"). Seller covenants that it will not
sell or dispose of the Class B Preferred Stock except in accordance with the
rules set forth in Rule 144 issued by the Securities and Exchange Commission
under the Securities Act and shall not sell, transfer or pledge the Class B
Preferred Stock in the absence of a registration under the Securities Act or
unless CCG receives an opinion of counsel (which may be counsel for CCG)
reasonably acceptable to it stating that such sale or
2
<PAGE>
transfer is exempt from the registration and prospectus delivery requirements of
the Securities Act. Seller agrees and consents that the certificates
representing the Class B Preferred Stock shall contain the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS CLEARVIEW CINEMA GROUP, INC. RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR CLEARVIEW CINEMA GROUP, INC.)
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT AND
THAT SUCH SALE OR TRANSFER IS MADE IN ACCORDANCE WITH THE RULE SET FORTH
IN RULE 144 ISSUED BY THE SECURITIES EXCHANGE COMMISSION UNDER SAID ACT.
10. SECURITIES LAWS REPRESENTATION. Mr. Sayegh and Seller represent and
warrant to Buyer and CCG the matters set forth in this Section 9, and such
representations and warranties shall be deemed to be included within Article III
of the Asset Purchase Agreement. Mr. Sayegh and Seller acknowledge that they and
their representatives have received and reviewed all of the documents filed by
CCG through the date hereof with the Securities and Exchange Commission. Mr.
Sayegh and Seller and their representatives have had, at their discretion, an
opportunity to meet with the officers CCG to discuss CCG's business. Mr. Sayegh
and Seller are each acquiring the Class B Preferred Stock for his or its own
account with the intention of holding the Class B Preferred Stock for purposes
of investment, and not as a nominee or agent for any other party, and not with a
view to the resale or distribution of any of the Class B Preferred Stock, and no
Seller or Stockholder has any intention of selling the Class B preferred Stock
or any interest therein in violation of the federal securities laws or any
applicable state securities laws. Mr. Sayegh and Seller understand that the
Class B Preferred Stock will not be registered under the Securities Act, or
under any state securities laws. Each of Mr. Sayegh and Seller is an "accredited
investor" within the meaning of that term as set forth in Rule 501 issued by the
Securities and Exchange Commission under the Securities Act. It shall be a
condition precedent to CCG's obligation to issue the Class B Preferred Shares
that the representation and warranty contained in this Section 9 be true and
correct on the date of issuance of the Class B Preferred Stock, and CCG shall
have been satisfied that the issuance of the Class B Preferred Stock shall be
exempt from registration under the Securities Act.
11. COOPERATION WITH FINANCIAL RECORDS. After Closing, Seller and Mr.
Sayegh shall cooperate with Buyer and CCG by providing CCG, Buyer and their
accountants and other representatives with whatever access and review of
Seller's financial records for each calendar quarter ending within the year
immediately prior to the Closing Date, as CCG, Buyer and their advisors deem
appropriate in order for CCG to make adequate financial disclosures to CCG's
stockholders and to the Securities Exchange Commission and to make adequate
financial disclosures in any filings by CCG with the Securities Exchange
Commission.
3
<PAGE>
12. MEADTOWN CINEMA. Mr. Sayegh shall cause the Meadtown Cinema which is
adjacent to the Cinema to cease operation (to "go dark") on the Closing Date.
13. NO OTHER AMENDMENTS. Except as amended by the foregoing, the Asset
Purchase Agreement shall remain in full force and effect.
14. SUCCESSORS AND ASSIGNS. This Amendment and all the rights and powers
granted hereby shall bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns. This Amendment and the
rights, interests and obligations hereunder may not be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that Buyer or CCG may make such assignments to any Affiliate of Buyer or CCG
provided that Buyer or CCG remain liable hereunder, and, further, Buyer and CCG
may collaterally assign their rights hereunder to Provident Bank or other
commercial lending institution. This Amendment shall be governed by and
construed in accordance with the laws of New Jersey without regard to its
conflict of law doctrines.
15. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Amendment must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Amendment or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
16. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Amendment sets
forth all of the promises, covenants, agreements, conditions and undertakings
between the parties hereto with respect to the subject matter hereof, and
supersede all prior or contemporaneous agreements and understandings,
negotiations, inducements or conditions, express or implied, oral or written.
This Amendment is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder, except the provisions of SECTIONS 7.2
AND 7.3 relating to Buyer Indemnitees and Seller Indemnitees and SECTION 8.10 of
the Asset Purchase Agreement.
17. SEVERABILITY. If any term or other provision of this Amendment is held
by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Amendment shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Amendment so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
4
<PAGE>
18. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
KIN MALL CINEMAS, INC.
By: /s/ Jesse Sayegh
-----------------------------
Jesse Sayegh
Title: President
C.J.M. ENTERPRISES, INC.
By: /s/ Jesse Sayegh
-----------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
----------------------------
A. Dale Mayo
Title: President
CCC KIN MALL CINEMA CORP.
By: /s/ A. Dale Mayo
---------------------------
A. Dale Mayo
Title: President
6
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATIONS, PREFERENCES, RIGHTS
AND LIMITATIONS
OF
CLASS B NONVOTING CUMULATIVE REDEEMABLE PREFERRED STOCK
("Certificate of Designations")
OF
CLEARVIEW CINEMA GROUP, INC.
a Delaware corporation
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Clearview Cinema Group, Inc., a Delaware corporation (the
"Corporation"), certifies that pursuant to the authority contained in Section 4
of Article IV of its Amended and Restated Certificate of Incorporation dated
August 18, 1997 (the "Amended and Restated Certificate of Incorporation"), and
in accordance with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the following
resolution creating a new class of its Preferred Stock, $.01 par value,
designated as Class B Nonvoting Cumulative Redeemable Preferred Stock:
RESOLVED, that a new class of authorized Preferred Stock of the
Corporation be hereby created and established, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such class, and the
qualifications, limitations or restrictions thereof are as follows:
(a) DESIGNATION AND AMOUNT. The shares of such class shall be designated
as "Class B Nonvoting Cumulative Redeemable Preferred Stock" (referred to herein
as, the "Class B Redeemable Preferred Stock") and the number of shares
constituting such class shall be 20,000.
(b) DIVIDENDS. The holder of each share of Class B Redeemable Preferred
Stock shall be entitled to receive on the 15th day of April, July, October and
January, or the next business day if such 15th business day is not a business
day (each such date being referred to herein as a "Dividend Payment Date"), out
of funds legally available for such purpose, and as declared by the Board of
Directors, cumulative quarterly cash dividends in a per share amount equal to
$.291667 for each day during which such share was outstanding during the
calendar quarter immediately preceding the Dividend Payment Date. In case the
Corporation shall (i) pay a dividend on the Class B Redeemable Preferred Stock
in shares of Class B Redeemable Preferred Stock, (ii) subdivide the outstanding
shares of Class B Redeemable Preferred Stock, or (ii) combine the outstanding
shares of Class B Redeemable Preferred Stock into a smaller number of shares,
the per share dividend rate in effect immediately prior thereto shall be
proportionately adjusted so that the aggregate dividend rate of all shares of
Class B Redeemable Preferred Stock immediately after such event shall equal the
aggregate dividend rate of all shares of Class B Redeemable Preferred Stock
immediately prior thereto. An adjustment made pursuant to this section shall
become effective (x) upon the effective date in the case of a subdivision or
combination or (y) upon the record date in the case of a dividend of shares.
Quarterly dividends shall be paid on the basis of 90 days in each full quarter
regardless of the number of actual days in each quarter, but dividends for less
than a full quarter shall be based on the actual number of days during which
each share is outstanding. Each dividend declared by the Board of Directors
shall be paid to
<PAGE>
the holders of shares of the Class B Redeemable Preferred Stock as such holders'
names appear on the stock books on the related record date. Such record date
shall be the last day of the calendar quarter immediately preceding the
applicable Dividend Payment Date. Dividends in arrears with respect to any past
Dividend Payment Date with respect to shares of Class B Redeemable Preferred
Stock may be declared by the Board of Directors and paid on the outstanding
shares of the Class B Redeemable Preferred Stock on any date fixed by the Board
of Directors, whether or not a regular Dividend Payment Date, to the holder of
the shares of the Class B Redeemable Preferred Stock on the related record date
fixed by the Board of Directors, which shall not be less than 10 nor more than
45 days before the date fixed for the payment of such dividend. Any dividend
payment made on shares of the Class B Redeemable Preferred Stock shall first be
credited against the dividends accrued with respect to the earliest Dividend
Payment Date for which dividends have not been paid. If full cumulative
dividends have not been paid or declared and set aside for payment on the shares
of the Class B Redeemable Preferred Stock, all cumulative dividends on the
shares of the Class B Redeemable Preferred Stock shall be declared and paid pro
rata to the holders of the outstanding shares of the Class B Redeemable
Preferred Stock entitled thereto, so that in all cases the amount of dividends
declared per share on the shares of the Class B Redeemable Preferred Stock bear
to each other the same ratio that accumulated dividends per share on all shares
of Class B Redeemable Preferred Stock bear to each other. No holder of shares of
Class B Redeemable Preferred Stock shall be entitled to any dividends, whether
payable in cash, property or stock, in excess of full cumulative dividends, as
provided in this section (b). No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment on the shares of Class B
Redeemable Preferred Stock that may be in arrears. Except as set forth above,
for so long as any shares of the Class B Redeemable Preferred Stock are
outstanding, no dividends may be paid or declared and set aside for payment or
other distribution made upon the Class A Convertible Preferred Stock, Common
Stock or any other stock of the Corporation ranking junior to the shares of the
Class B Redeemable Preferred Stock as to dividends ("Junior Stock"), nor may any
shares of Junior Stock be redeemed, purchased or otherwise acquired by the
Corporation for consideration (or any payment made to or available for a sinking
fund for the redemption of any shares of such stock), unless full cumulative
dividends on all shares of Class B Redeemable Preferred Stock for all Dividend
Payment Dates accruing on or prior to the date of such transaction have been or
contemporaneously are declared and paid through the most recent Dividend Payment
Date. If dividends are not paid on a Dividend Payment Date, then such dividends
shall accrue and be cumulative from and after such Dividend Payment Date.
Notwithstanding the foregoing, no dividends shall be paid or payable with
respect to any shares of Class B Redeemable Preferred Stock if such payment is
otherwise prohibited by section (h) of this Certificate of Designations or by
the Delaware General Corporation Law. Dividends with respect to shares of Class
B Redeemable Preferred Stock may also be subject to setoff and recoupment as
contemplated by section (k) hereof.
(c) LIQUIDATION RIGHTS. In the event of any Liquidation Event (as defined
herein), the holders of shares of Class B Redeemable Preferred Stock shall be
entitled to receive from the assets of the Corporation, whether represented by
capital stock, paid-in capital or retained earnings, payment in cash of an
amount equal to the aggregate Liquidation Value (as defined herein) of such
Class B Redeemable Preferred Stock, plus a further amount equal to any dividends
that have been (or, pursuant to Section (b) hereof, were required to have been)
declared on the Class B Redeemable Preferred Stock but which remain unpaid,
before any distribution of assets shall be made to the holders of the Class A
Convertible Preferred Stock, Common Stock, or other Junior Stock. If, upon such
Liquidation Event, the assets distributable to the holders of shares of Class B
Redeemable Preferred Stock shall be insufficient to permit the payment in full
to such holders of the preferential amounts to which they are entitled, then
2
<PAGE>
such assets shall be distributed ratably among the shares of Class B Redeemable
Preferred Stock. The "Liquidation Value" of each share of Class B Redeemable
Preferred Stock shall be equal to $1,000. In case the Corporation shall (i) pay
a dividend on the Class B Redeemable Preferred Stock in shares of Class B
Redeemable Preferred Stock, (ii) subdivide the outstanding shares of Class B
Redeemable Preferred Stock, or (ii) combine the outstanding shares of Class B
Redeemable Preferred Stock into a smaller number of shares, the "Liquidation
Value" in effect immediately prior thereto shall be proportionately adjusted so
that the aggregate Liquidation Value of all shares of Class B Redeemable
Preferred Stock immediately after such event shall equal the aggregate
Liquidation Value of all shares of Class B Redeemable Preferred Stock
immediately prior thereto. An adjustment made pursuant to this section shall
become effective (x) upon the effective date in the case of a subdivision or
combination or (y) upon the record date in the case of a dividend of shares.
After payment in full of the aggregate Liquidation Value and dividends, as set
forth above, to the holders of shares of Class B Redeemable Preferred Stock, the
remaining assets of the Corporation available for payment and distribution to
stockholders may be paid and distributed to the holders of the Class A
Convertible Preferred Stock, Common Stock and any other Junior Stock. For
purposes hereof, the term "Liquidation Event" shall mean any (A) merger or
consolidation other than a merger or consolidation in which persons who,
immediately prior to the closing of such transaction, were the holders of voting
securities of the Corporation having more than fifty percent (50%) of the voting
power of the outstanding voting securities of the Corporation (which includes
all Common Stock, all Class A Convertible Preferred Stock and all other voting
securities created in or under the Amended and Restated Certificate of
Incorporation) hold, immediately after such transaction, voting securities of
the surviving entity having more than fifty percent (50%) of the voting power of
the outstanding voting securities of the surviving entity, (B) sale of all or
substantially all of the assets of the Corporation, or (C) liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
(d) VOTING RIGHTS. Holders of shares of Class B Redeemable Preferred Stock
shall not be entitled to any voting rights except upon matters with respect to
which the holders of shares of Class A Convertible Preferred Stock, Class B
Redeemable Preferred Stock and Common Stock have separate voting rights as
expressly provided in this section (d), the Corporation's Amended and Restated
Certificate of Incorporation or as required by Delaware law. The affirmative
vote of the holders of more than fifty percent (50%) of the outstanding shares
of Class B Redeemable Preferred Stock, voting separately as a single class,
shall be required to authorize any amendment to this Certificate of Designations
or the Corporation's Amended and Restated Certificate of Incorporation if such
amendment would adversely affect the powers, preferences or rights of the Class
B Redeemable Preferred Stock.
(e) REDEEMABLE AT OPTION OF THE CORPORATION. The Corporation shall have
the right to redeem any one or more shares of Class B Redeemable Preferred Stock
at any time and from time to time at a redemption price of $1,000 per share plus
an amount equal to all unpaid dividends thereon, including accrued dividends,
whether or not declared, to the redemption date. Notice of any redemption of the
Class B Redeemable Preferred Stock shall be mailed at least 30 days prior to the
date fixed for redemption to each holder of Class B Redeemable Preferred Stock
to be redeemed, at such holder's address as it appears on the books of the
Corporation. In order to facilitate the redemption of the Class B Redeemable
Preferred Stock, the Board of Directors may fix a record date for the
determination of holders of Class B Redeemable Preferred Stock to be redeemed,
or may cause the transfer books of the Corporation to be closed for the transfer
of the Class B Redeemable Preferred Stock, not more than 20 days nor less than
10 days prior to the date fixed for such redemption. Whenever shares of Class B
Redeemable Preferred Stock are to be redeemed, the Corporation shall cause to be
mailed, within the time period specified in this section, a written notice of
redemption (a "Notice of Redemption") by first-class mail, postage prepaid, to
each holder of shares of Class B Redeemable Preferred Stock to be redeemed as
its
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<PAGE>
name and address appear on the stock books of the Corporation. Each Notice of
Redemption shall state (i) the redemption date, (ii) the redemption price, (iii)
the number of shares of Class B Redeemable Preferred Stock to be redeemed and
identification (by certificate number, CUSIP number or otherwise) of the shares
of Class B Redeemable Preferred Stock to be redeemed, (iv) the place or places
where shares of Class B Redeemable Preferred Stock are to be surrendered for
payment of the redemption price, (v) that dividends on the shares to be redeemed
will cease to accumulate on such redemption date, and (vi) the provision of this
Certificate of Designations under which the redemption is being made. A Notice
of Redemption shall be deemed given on the day that it is mailed. On or after
the redemption date each holder of shares of Class B Redeemable Preferred Stock
that were called for redemption shall surrender the certificate evidencing such
shares, properly endorsed in blank for transfer or accompanied by proper
instruments of assignment or transfer in blank, and bearing all necessary
transfer tax stamps thereto affixed and cancel led, to the Corporation at the
place designated in the Notice of Redemption and shall then be entitled to
receive payment of the redemption price for each share. If fewer than all of the
shares are to be redeemed, the Corporation shall issue new certificates for the
shares not redeemed. If fewer than all of the outstanding shares of the Class B
Redeemable Preferred Stock are to be redeemed, the number of shares to be
redeemed shall be determined by the Corporation ratably, by lot or by holder or
by such other method as the Corporation shall deem appropriate. Solely for the
purpose of determining the number of shares of Class B Redeemable Preferred
Stock to be stated in a Notice of Redemption as subject to an optional
redemption, the amount of funds legally available for such redemption shall be
determined as of the date of such Notice of Redemption. The Corporation shall
declare and pay any and all dividends that are due or are in arrears prior to
any such redemption.
(f) REDEMPTION AT OPTION OF THE HOLDER. Each holder of shares of Class B
Redeemable Preferred Stock shall have the right to cause the Corporation to
redeem, and upon exercise of such right, the Corporation shall redeem, any
shares of Class B Redeemable Preferred Stock held by such holder at a redemption
price equal to its Liquidation Value plus an amount equal to all unpaid
dividends thereon, including accrued dividends, whether or not declared, to the
redemption date, at any time after the occurrence of any one or more of the
following events:
(i) the Corporation shall (A) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy or insolvency law of any
jurisdiction, (B) make an assignment for the benefit of its creditors, (C)
consent to the appointment of a custodian, receiver, trustee or other officer
with similar powers of itself or of any substantial part of its property, (D) be
adjudicated insolvent or be liquidated, or (E) take corporate action for the
purpose of any of the foregoing;
(ii) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Corporation, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property, or
if an order for relief shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidations of the Corporation, or if any petition for any such relief shall
be filed against the Corporation and such petition shall not be dismissed within
60 days;
(iii) the date five years after the date such shares of shall
have been issued; and
(iv) within ten business days after the date of closing of the
issuance by the Corporation of debt securities aggregating at least $70 million
in an offering governed by Rule 144A issued by the Securities Exchange
Commission under the Securities Act of 1933.
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<PAGE>
Notice of any such redemption of the Class B Redeemable Preferred Stock shall be
delivered in writing to the Corporation at least 10 business days prior to the
date fixed for redemption. The record date for the determination of holders of
Class B Redeemable Preferred Stock to be redeemed and the date that the
Corporation may cause the transfer books of the Corporation to be closed for the
transfer of the Class B Redeemable Preferred Stock, shall be the date of
redemption set forth in such written notice. The place or places where shares of
Class B Redeemable Preferred Stock are to be surrendered for payment of the
redemption price shall be the Corporation's executive offices. Dividends on the
shares to be redeemed will cease to accumulate on the redemption date. On or
after the redemption date each holder of shares of Class B Redeemable Preferred
Stock that were required to be redeemed shall surrender the certificate
evidencing such shares, properly endorsed in blank for transfer or accompanied
by proper instruments of assignment or transfer in blank, and bearing all
necessary transfer tax stamps thereto affixed and cancel led, to the Corporation
at its executive offices and shall then be entitled to receive payment of the
redemption price for each share. The Corporation shall declare and pay any and
all dividends that are due or are in arrears prior to any such redemption.
(g) RESTRICTIONS ON REDEMPTION. Notwithstanding the foregoing, no shares
of Class B Redeemable Preferred Stock may be redeemed if such redemption is
otherwise prohibited by section (h) of this Certificate of Designations or by
the Delaware General Corporation Law. Payments in respect of redemptions with
respect to shares of Class B Redeemable Preferred Stock may also be subject to
setoff and recoupment as contemplated by section (k) hereof.
(h) SUBORDINATION TO INDEBTEDNESS; RESTRICTIONS ON TRANSFER. All dividend
payments on and payments for redemptions with respect to shares of Class B
Redeemable Preferred Stock are subordinate and subject in right of payment, to
the prior payment in full of all Indebtedness of the Corporation to the extent
provided in one or more subordination agreements by and among the Corporation,
the holder of the Class B Redeemable Preferred Stock and the holder of the
Indebtedness. For purposes hereof, "Indebtedness" means the principal of,
premium, if any, and interest (including any interest accruing after the filing
of a petition in bankruptcy) on and other amounts due on or in connection with
any indebtedness of the Corporation as defined in and arising under any loan,
credit, security or similar agreement with any bank, insurance company, or other
commercial financial institution, in any case whether arising prior to, on or
after the date of issuance of the Class B Redeemable Preferred Stock, and all
renewals, extensions, and refundings thereof. The certificates representing
outstanding shares of Class B Redeemable Preferred Stock may contain a legend
referring to the subordination agreement or agreements among the Corporation,
the holder of the Class B Redeemable Preferred Stock and the holder of the
Indebtedness. If a holder shares of Class B Redeemable Preferred Stock has
entered into such a subordination agreement and the identity of the holder of
the Indebtedness subsequently changes, then the holder of the Class B Redeemable
Preferred Stock shall from time to time at the Corporation's request enter into
a new subordination agreement or agreements containing terms substantially
similar to the terms of such holder's then existing subordination agreement, and
if such holder fails to do so, then upon notice by the Corporation to such
holder, all dividend payments on and payments for redemptions with respect to
the shares of Class B Redeemable Preferred Stock held by such holder shall be
suspended. Also, if a holder of shares of Class B Redeemable Preferred Stock has
entered into such a subordination agreement, then such holder may not assign any
shares of Class B Redeemable Preferred Stock that are subject to such
subordination agreement unless and until the proposed assignee executes and
delivers a subordination agreement containing terms substantially similar to the
terms of such holder's then existing subordination agreement, and any attempted
transfer of shares of Class B Redeemable Preferred Stock without complying with
the terms hereof shall be null and void.
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(i) APPROVAL OF HOLDERS OF CLASS A CONVERTIBLE PREFERRED STOCK; INCREASE
IN AUTHORIZED SHARES; ADDITIONAL CLASSES OF PREFERRED STOCK. The issuance by the
Corporation of any shares of Class B Redeemable Preferred Stock shall first be
approved by the holders of the Class A Convertible Preferred Stock in the manner
and to the extent provided in the Corporation's Amended and Restated Certificate
of Incorporation. Subject to the rights of the holders of the Corporation's
Class A Convertible Preferred Stock as provided in the Corporation's Amended and
Restated Certificate of Incorporation, the Corporation may at any time and from
time to time increase the number of authorized shares of Class B Redeemable
Preferred Stock and create and issue any shares of any series or class of the
Corporation's Preferred Stock that have dividend and liquidation rights that are
senior to or pari passu with the Class B Redeemable Preferred Stock.
(j) REACQUIRED SHARES. Any shares of Class B Redeemable Preferred Stock
redeemed or purchased or otherwise acquired by the Corporation in any manner
whatsoever shall not be reissued as Class B Redeemable Preferred Stock and shall
be retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new class of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions or restrictions on issuance set forth herein.
(k) SETOFF RIGHTS. Shares of Class B Redeemable Preferred Stock may be
issued in connection with the acquisition by the Corporation or its subsidiaries
of certain businesses, and, notwithstanding anything else herein to the
contrary, payments of dividends on such shares of Class B Redeemable Preferred
Stock and payments in respect of redemptions of such shares of Class B
Redeemable Preferred Stock may be subject to the Corporation's rights of setoff
and recoupment to the extent and in the manner expressly set forth in any
agreement related to such acquisition. Any such right of setoff or recoupment
shall survive any transfer or assignment of such shares of Class B Redeemable
Preferred Stock.
IN WITNESS WHEREOF, Clearview Cinema Group, Inc. has caused this
Certificate of Designations, Preferences, Rights and Limitations of Class B
Nonvoting Cumulative Redeemable Preferred Stock to be duly executed by its
President and attested to by its Secretary and has caused its corporate seal to
be affixed hereto this __ day of _______, 199_.
CLEARVIEW CINEMA GROUP, INC.
By ______________________________
A. Dale Mayo, President
6
Asset Purchase Agreement
Dated as of November 14, 1997
Among
Jesse Sayegh
Middlebrook Galleria Cinemas, Inc.
CCC Middlebrook Cinema Corp.
and
Clearview Cinema Group, Inc.
<PAGE>
ARTICLE I. DEFINITIONS; CONSTRUCTION........................................1
1.1. Definitions...........................................................1
1.2. Construction..........................................................5
ARTICLE II. THE TRANSACTION..................................................5
2.1. Sale and Purchase of Assets...........................................5
2.2. Cash; Etc.............................................................6
2.3. Retained Assets......................................................6
2.4. [not used]...........................................................6
2.5. Retained Liabilities..................................................6
2.6. Purchase Price; Deposit...............................................7
2.7. Closing...............................................................7
2.8. Payment of Purchase Price.............................................7
2.9. Allocation of Purchase Price..........................................7
2.10. Title................................................................7
2.11. Certain Consents.....................................................8
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER........................8
3.1. Organization..........................................................8
3.2. Authorization; Enforceability.........................................8
3.3. No Violation of Laws or Agreements; Consents..........................8
3.4. Cinema Income Statements..............................................9
3.5. No Changes............................................................9
3.6. Taxes.................................................................9
3.7. Undisclosed Liabilities...............................................9
3.8. Condition of Assets; Title; Business..................................9
3.9. No Pending Litigation or Proceedings.................................10
3.10. Contracts...........................................................10
3.11. Permits; Compliance with Law........................................10
3.12. Leased Real Estate..................................................10
3.13. Labor Relations.....................................................11
3.14. Insurance...........................................................11
3.15. Intellectual Property Rights........................................11
3.16. Employee Benefits...................................................12
3.17. Environmental Matters...............................................12
3.18. Additional Theaters. Neither.......................................13
3.19. Finders' Fees.......................................................13
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF BUYER.........................13
4.1. Organization.........................................................13
4.2. Authorization and Enforceability.....................................13
4.3. No Violation of Laws; Consents.......................................14
4.4. No Pending Litigation or Proceedings.................................14
4.5. Finders' Fees........................................................14
4.6. Stock Ownership......................................................14
ARTICLE V. CERTAIN COVENANTS................................................14
5.1. Conduct of Business Pending Closing..................................14
5.2. Fulfillment of Agreements............................................15
5.3. Employment, Severance and Termination Payments.......................16
5.4. Seller's Employees...................................................16
5.5. Workers' Compensation and Disability Claims..........................16
5.6. Covenant Not to Compete..............................................16
5.7. Publicity............................................................17
5.8. Transitional Matters.................................................17
5.9. Books and Records....................................................17
5.10. Permits; N.J. ISRA..................................................17
5.11. Right of First Refusal..............................................17
ARTICLE VI. CONDITIONS TO CLOSING; TERMINATION..............................18
6.1. Conditions Precedent to Obligation of Buyer..........................18
6.2. Conditions Precedent to Obligation of Seller and Mr. Sayegh..........19
6.3. Deliveries and Proceedings at Closing................................20
6.4. Termination..........................................................22
ARTICLE VII. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION...................23
7.1. Survival of Representations..........................................23
7.2. Indemnification by Seller and Mr. Sayegh.............................23
7.3. Indemnification by Buyer.............................................24
7.4. Waiver of Statute of Limitations.....................................24
7.5. Notice of Claims.....................................................24
7.6. Third Party Claims...................................................24
7.7. Limitation on Indemnification........................................24
7.8. Payment..............................................................25
<PAGE>
ARTICLE VIII. MISCELLANEOUS.................................................25
8.1. Costs and Expenses...................................................25
8.2. Proration of Expenses................................................25
8.3. Bulk Sales...........................................................25
8.4. Further Assurances...................................................25
8.5. Notices..............................................................25
8.6. Currency.............................................................26
8.7. Offset; Assignment; Governing Law....................................26
8.8. Amendment and Waiver; Cumulative Effect..............................27
8.9. Entire Agreement; No Third Party Beneficiaries.......................27
8.10. Third Party Beneficiary.............................................27
8.11. Severability........................................................27
8.12. Counterparts........................................................27
<PAGE>
Asset Purchase Agreement ("AGREEMENT"), dated as
of November 14, 1997, by and among Jesse Sayegh,
an individual residing in _________, New Jersey
("MR. SAYEGH"), Middlebrook Galleria Cinemas,
Inc., a New Jersey corporation ("SELLER"), CCC
Middlebrook Cinema Corp., a Delaware corporation
("BUYER"), and Clearview Cinema Group, Inc., a
Delaware corporation ("CCG").
Seller currently owns and operates a ten-screen movie cinema located at
Middlebrook, New Jersey (the "CINEMA"). Buyer is a wholly owned subsidiary of
CCG.
Mr. Sayegh leases the real estate on which the Cinema is located, as such
real estate and lease are more particularly described on Exhibit A hereto (the
"LEASED REAL ESTATE").
Seller desires to sell and assign to Buyer, and Buyer desire to purchase
and assume from Seller, the Cinema and the Leased Real Estate on the terms and
subject to the conditions set forth below.
In consideration of the representations, warranties, covenants and
agreements contained herein, Seller, Buyer, Mr. Sayegh and CCG, each intending
to be legally bound hereby, agree as set forth below.
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1. DEFINITIONS. As used in this Agreement, the following terms have the
meanings specified in this Section 1.1. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"AGREEMENT" means this Asset Purchase Agreement, as it may be amended from
time to time.
"BASKET AMOUNT" has the meaning given that term in Section 7.7.
"BENEFIT PLAN" means any written and unwritten "employee benefit plans"
within the meaning of Section 3(3) of ERISA, and any other written and unwritten
profit sharing, pension, savings, deferred compensation, fringe benefit,
insurance, medical, medical reimbursement, life, disability, accident,
post-retirement health or welfare benefit, stock option, stock purchase, sick
pay, vacation, employment, severance, termination or other plan, agreement,
contract, policy, trust fund or arrangement, whether or not funded and whether
or not terminated, (i) maintained or sponsored by Seller, or (ii) with respect
to which Seller has or may have Liability or is obligated to contribute, or
(iii) that otherwise covers any of the current or former employees of Seller or
<PAGE>
their beneficiaries, or (iv) as to which any such current or former employees of
Seller or their beneficiaries participated or were entitled to participate or
accrue or have accrued any rights thereunder.
"BUSINESS" means the operation of the Cinema.
"BUYER" has the meaning given that term in the heading of this
Agreement.
"BUYER DAMAGES" has the meaning given that term in Section 7.2.
"BUYER INDEMNITEES" has the meaning given that term in Section 7.2.
"CCG" has the meaning given that term in the heading of this Agreement.
"CERCLIS" means the United States Comprehensive Environmental Response
Compensation Liability Information System List pursuant to Superfund.
"CINEMA" has the meaning given that term in the first introductory
paragraph of this Agreement.
"CLOSING" has the meaning given that term in Section 2.7.
"CLOSING DATE" has the meaning given that term in Section 2.7.
"CODE" means the United States Internal Revenue Code of 1986, as amended,
and the applicable rulings and regulations thereunder.
"DAMAGES" means Buyer Damages or Seller Damages, as the case may be.
"DEPOSIT" has the meaning given that term in Section 2.6.
"ENCUMBRANCE" means any liability, debt, mortgage, deed of trust, pledge,
security interest, encumbrance, option, right of first refusal, agreement of
sale, adverse claim, easement, lien, assessment, restrictive covenant,
encroachment, burden or charge of any kind or nature whatsoever or any item
similar or related to the foregoing.
"ENVIRONMENTAL LAW" means any applicable Law relating to public health and
safety or protection of the environment, including common law nuisance, property
damage and similar common law theories.
"ERISA" means the United States Employee Retirement Income Security Act of
1974, as amended, and the applicable rulings and regulations thereunder.
"GAAP" means United States generally accepted accounting principles as
they would be applied to the Cinema.
"GOVERNING DOCUMENTS" means, with respect to any Person who is not a
natural Person, the certificate or articles of incorporation, bylaws, deed of
trust, formation or governing
2
<PAGE>
agreement and other charter documents or organization or governing documents or
instruments of such Person.
"GOVERNMENTAL BODY" means any court, government (federal, state, local or
foreign), department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority or instrumentality.
"INCOME STATEMENTS" has the meaning given that term in Section 3.4.
"INDEMNIFIED PARTY" has the meaning given that term in Section 7.5.
"INDEMNIFYING PARTY" has the meaning given that term in Section 7.5.
"INTELLECTUAL PROPERTY RIGHTS" means trademark and service mark rights,
applications and registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications, letters patent,
patent applications and licenses of any of the foregoing, improvements,
blueprints, specifications, drawings, designs and other intellectual property
and proprietary rights.
"IRS" means the United States Internal Revenue Service.
"LAW" means any applicable federal, state, municipal, local or foreign
statute, law, ordinance, rule, regulation, judgment or order of any kind or
nature whatsoever including any public policy, judgment or order of any
Governmental Body or principle of common law.
"LEASE AGREEMENT" mean the Lease Agreement for the Cinema identified on
Exhibit A hereto.
"LEASED REAL ESTATE" has the meaning given that term in the second
introductory paragraph of this Agreement.
"LIABILITIES" with respect to any Person, means all debts, liabilities and
obligations of such Person of any nature or kind whatsoever, whether or not due
or to become due, accrued, fixed, absolute, matured, determined, determinable or
contingent and whether or not incurred directly by such Person or by any
predecessor of such Person, and whether or not arising out of any act, omission,
transaction, circumstance, sale of goods or service or otherwise.
"LITIGATION" has the meaning given that term in Section 3.9.
"OTHER AGREEMENTS" means the Subordinated Note and the other agreements
and instruments of title, assignment or assumption hereunder.
"PERMITS" has the meaning given that term in Section 3.11.
"PERMITTED ENCUMBRANCES" means liens for current taxes not yet due and
liens of public record on personal property identified on Schedule 1.1P.
3
<PAGE>
"PERSON" means and includes a natural person, a corporation, an
association, a partnership, a limited liability company, a trust, a joint
venture, an unincorporated organization, a business, a Governmental Body and any
other legal entity.
"PURCHASE PRICE" has the meaning given that term in Section 2.6.
"PURCHASED ASSETS" has the meaning given that term in Section 2.1(d).
"REGULATED MATERIAL" means any hazardous substance as defined by any
Environmental Law and any other material regulated by any applicable
Environmental Law, including petroleum, petroleum-related material, crude oil or
any fraction thereof, PCBs and friable asbestos.
"RELATED PARTY" means (i) Seller, (ii) any Affiliate of Seller, (iii) any
officer or director of any Person identified in clauses (i) or (ii) preceding,
and (iv) any spouse, sibling, ancestor or lineal descendant of any natural
Person identified in any one of the preceding clauses.
"RETAINED ASSETS" has the meaning given that term in Section 2.3.
"RETAINED LIABILITIES" has the meaning given that term in Section 2.5.
"SELLER" has the meaning given that term in the heading of this
Agreement.
"SELLER DAMAGES" has the meaning given that term in Section 7.3.
"SELLER GROUP" means Seller and any corporation that may be aggregated
with Seller under Sections 414(b), (c), (m) or (o) of the Code.
"SELLER INDEMNITEES" has the meaning given that term in Section 7.3.
"SELLER'S PREDECESSOR" means any predecessor in interest to Seller,
whether by merger, combination, reorganization or otherwise.
"SUBORDINATED NOTE" means CCG's 10% Subordinated Promissory Note payable
to Seller in the principal amount of $540,000 in the form attached hereto as
Exhibit B.
"SUPERFUND" means the United States Comprehensive Environmental Response
Compensation and Liability Act of 1980, 42 U.S.C. Sections 6901 et seq., as
amended.
"TAX" means any domestic or foreign federal, state, county or local tax,
levy, impost or other charge of any kind whatsoever, including any interest or
penalty thereon or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, including any schedule or
attachment thereto, and including any amendment thereof.
4
<PAGE>
1.2. CONSTRUCTION. As used herein, unless the context otherwise
requires: (i) references to "Article" or "Section" are to an article or section
hereof; (ii) all "Exhibits" and "Schedules" referred to herein are to Exhibits
and Schedules attached hereto and are incorporated herein by reference and made
a part hereof; (iii) "include", "includes" and "including" are deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import; and (iv) the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
ARTICLE II.
THE TRANSACTION
2.1. SALE AND PURCHASE OF ASSETS. Except as otherwise provided in
Sections 2.2 and 2.3, at the Closing, Seller shall sell, transfer and assign to
Buyer, and Buyer shall purchase from Seller, all of Seller's properties and
business as a going concern, and goodwill and tangible or intangible assets of
every kind, nature and description existing on the Closing Date located at or
used in connection with the Cinema, whether personal, in electronic form or
otherwise, and whether or not any of such assets have any value for accounting
purposes or are carried or reflected on or specifically referred to in its books
or financial statements, free and clear of all Encumbrances (collectively, the
"PURCHASED ASSETS"). Without limiting the foregoing, the Purchased Assets shall
include the following:
(i) All of Seller's tangible assets, including office furniture,
office equipment and supplies, computer hardware and software, projectors,
projector bulbs, ticketing machines, leasehold improvements on or related to the
Leased Real Estate or related to the Business;
(ii) All of Seller's books, records, manuals, documents, books of
account, correspondence, sales reports, literature, brochures, advertising
material and the like related to the Business (other than accounting records and
corporate books and records as defined in Section 2.3);
(iii) All of Seller's inventory and supplies, including concession
products, candy items and paper goods for the Business;
(iv) All of Seller's rights under leases for personal property, if
any;
(v) All of Seller's rights under the Permits;
(vi) All of Seller's goodwill and rights in and to the name
"Middlebrook";
(vii) Seller's rights to the telephone numbers for Cinema location;
and
(viii) The goodwill of the Business.
Mr. Sayegh shall at Closing assign all of his interests in the Leased Real
Estate and the Lease Agreement to Buyer, and Buyer shall assume the Lease
Agreement, for no additional consideration.
5
<PAGE>
2.2. CASH; ETC. Buyer shall purchase petty cash on hand at the Cinema
at the close of business on the date immediately preceding the Closing Date, the
purchase price of cash to be face value, subject to a physical count of such
cash by Buyer and Seller. If the use by customers of the Cinema of pre-sold
tickets sold by Seller shall exceed $100 in the aggregate, Seller shall promptly
pay to Buyer an amount equal to such use in excess of $100.
2.3. RETAINED ASSETS. Except for the Purchased Assets, Buyer is not
purchasing and Seller is not selling the name "CJM Enterprises" or any variant
or derivative of such name and Seller's accounting records and corporate minute
books, stock books and corporate seal (collectively, the "RETAINED ASSETS").
Accounting Records of Seller shall remain the exclusive property of Seller in
accord with this Section, and shall mean any and all books of original entry,
including any register or computer tapes, all journals or ledgers, all canceled
checks, payroll records, bank or other account statements, including account
statements or reports to or from any vendors, suppliers, film companies, or
otherwise, including any correspondence relating to same or to any other items
designated as an accounting record hereunder, and including all financial
statements, records, tax returns, and all workpapers or supporting information
relating thereto, including all information gathered or compiled by Seller or
Seller's agents or accountants therefor, or summaries of same, including all
disks, print-outs, or other digital or analog, written or electronic recording
thereof. The Purchased Assets shall not include any permits that are
non-transferable. Seller knows of no reason why any permit issued to Seller for
use in its business would not be issued to Buyer for use by it after the
Closing, assuming only Buyer is qualified to receive same.
2.4. [NOT USED].
2.5. RETAINED LIABILITIES. Buyer does not hereby and shall not assume or
in any way undertake to pay, perform, satisfy or discharge any other Liability
of Seller, whether existing on, before or after the Closing Date or arising out
of any transactions entered into, or any state of facts existing on, prior to or
after the Closing Date (the "RETAINED LIABILITIES"), and Seller agrees to pay
and satisfy when due all Retained Liabilities. Without limiting the foregoing,
the term "RETAINED LIABILITIES" shall include Liabilities:
(i) to any Related Party;
(ii) for or under any Benefit Plan;
(iii) for any Taxes, whether or not by reason of, or in connection
with, the transactions contemplated by this Agreement;
(iv) with respect to Seller's administrative and corporate
operations; and
(v) to any film distributor.
Buyer acknowledges that Buyer is responsible for any and all liabilities of the
Business first occurring after the Closing Date.
6
<PAGE>
2.6. PURCHASE PRICE; DEPOSIT. The aggregate purchase price for all of
the Purchased Assets shall be $2.25 million, plus amounts payable for the
inventory and petty cash (the "PURCHASE PRICE"). At the close of business on the
last business day prior to the Closing Date, Seller and Buyer shall take a
physical count of Seller's inventory being sold by Seller to Buyer under this
Agreement. Seller's inventory shall include concession products, candy items,
paper goods and other similar items, but shall not include projector bulbs which
shall be deemed to be equipment for purposes of this Agreement. Inventory shall
be valued at Seller's cost, determined on a first-in-first-out basis. Buyer
shall pay Seller for all inventory at the Closing, provided that such
inventories do not exceed amounts that would be expected as customary in the
ordinary course of business. Buyer shall deliver to Seller within three business
days after obtaining landlord's consent to the assignment to Buyer of the Lease
Agreement on terms acceptable to both Buyer and Seller a good faith deposit
equal to $15,000 (the "DEPOSIT"). The Deposit shall be applied against the cash
portion of the Purchase Price if there is a Closing hereunder. If there is no
Closing hereunder, then the Deposit shall be promptly returned to Buyer, unless
Buyer is in material breach hereof and such material breach was the sole cause
of the failure to Close hereunder. The Deposit shall be held in escrow by
Seller's counsel (as a fiduciary) subject to the terms of this Agreement.
2.7. CLOSING. The consummation of the purchase and sale of the Purchased
Assets and the consummation of the other transactions contemplated hereby (the
"CLOSING") shall take place at 10:00 a.m., local time, on December 12, 1997 at
the offices of Kirkpatrick & Lockhart, LLP, 1251 Avenue of the Americas, New
York, New York, 10020-1104 or at such other time, date or place as the parties
agree (the "CLOSING DATE"). Closing shall be effective at 12:01 a.m. on the
Closing Date.
2.8. PAYMENT OF PURCHASE PRICE. At Closing, the Purchase Price shall be
paid by Buyer and CCG to Seller as follows:
(i) by Buyer's delivery to Seller immediately available funds equal
to $1.71 million, minus the amount of the Deposit; and
(ii) by delivery of the Subordinated Note.
2.9. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Purchased Assets as follows: $450,000 shall be allocated to equipment,
furniture and fixtures for the Cinema and $1,800,000 shall be allocated to the
remaining assets of the Cinema. Buyer and Seller shall report the federal, state
and local income and other tax consequences of the purchase and sale
contemplated hereby in a manner consistent with such allocation and shall not
take any position inconsistent therewith upon examination of any Tax Return, in
any refund claim, in any litigation, or otherwise.
2.10. TITLE. Title to all Purchased Assets shall pass from Seller to Buyer
at Closing, subject to the terms and conditions of this Agreement. Buyer assume
no risk of loss to the Purchased Assets prior to Closing.
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2.11. CERTAIN CONSENTS. Nothing in this Agreement shall be construed as
an attempt to assign any Permit included in the Purchased Assets which is
by its terms or in law nonassignable without the consent of the other party or
parties thereto, unless such consent shall have been given, or as to which all
the remedies for the enforcement thereof enjoyed by Seller would not, as a
matter of law, pass to Buyer as an incident of the assignments provided for by
this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer and CCG to enter into this Agreement and
consummate the transactions contemplated hereby, Seller and Mr. Sayegh jointly
and severally represent and warrant to Buyer and CCG as follows:
3.1. ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey, and has
the power and authority to own or lease its properties, carry on the Business as
now conducted, enter into this Agreement and the Other Agreements to which it is
or is to become a party and perform its obligations hereunder and thereunder.
3.2. AUTHORIZATION; ENFORCEABILITY. This Agreement and each Other
Agreement to which Seller is a party have been duly executed and delivered by
and constitute the legal, valid and binding obligations of Seller and Mr.
Sayegh, enforceable against them in accordance with their respective terms. Each
Other Agreement to which Seller and Mr. Sayegh are to become a party pursuant to
the provisions hereof, when executed and delivered by Seller and Mr. Sayegh,
will constitute the legal, valid and binding obligation of Seller and Mr.
Sayegh, enforceable against them in accordance with the terms of such Other
Agreement. All actions contemplated by this Section have been duly and validly
authorized by all necessary proceedings by Seller.
3.3. NO VIOLATION OF LAWS OR AGREEMENTS; CONSENTS. Neither the execution
and delivery of this Agreement or any Other Agreement to which Seller or Mr.
Sayegh is or is to become a party, the consummation of the transactions
contemplated hereby or thereby nor the compliance with or fulfillment of the
terms, conditions or provisions hereof or thereof by Seller or Mr. Sayegh will:
(i) contravene any provision of any Governing Document of Seller, (ii) conflict
with, result in a breach of, constitute a default or an event of default (or an
event that might, with the passage of time or the giving of notice or both,
constitute a default or event of default) under any of the terms of, result in
the termination of, result in the loss of any right under, or give to any other
Person the right to cause such a termination of or loss under, any Purchased
Asset or any other material contract, agreement or instrument to which Seller or
Mr. Sayegh is a party or by which any of their assets may be bound or affected,
(iii) result in the creation, maturation or acceleration of any Liability of
Seller or Mr. Sayegh (or give to any other Person the right to cause such a
creation, maturation or acceleration), (iv) violate any Law or violate any
judgment or order of any Governmental Body to which Seller is subject or by
which any of the Purchased Assets or any of its other assets may be bound or
affected, or (v) result in the creation or imposition of any Encumbrance upon
any of the Purchased Assets or give to any other Person any interest or right
therein. Except for the consents of the landlord under the Lease Agreement, no
consent, approval or authorization of, or registration or filing with, any
Person is required in
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connection with the execution and delivery by Seller or Mr. Sayegh of this
Agreement or any of the Other Agreements to which it is or is to become a party
pursuant to the provisions hereof or the consummation by Seller or Mr. Sayegh of
the transactions contemplated hereby or thereby.
3.4. CINEMA INCOME STATEMENTS. Attached hereto as Exhibit D are the
income statements for the Cinema for the years ended December 31, 1995, and
December 31, 1996 and for the nine month period ended August 31, 1997 (the
"INCOME STATEMENTS"). The Income Statements (i) are correct and complete, (ii)
have been prepared in accordance with GAAP on a consistent basis, and (iii)
fairly present the results of operation of the Cinema for the periods then ended
in accordance with GAAP. Seller has no money due and owing to any film
distributor in connection with the Cinema except for money owing in the normal
course of business for which an amount is not ascertainable to pay or which is
not due prior to Closing. The aggregate gross box office revenues for the Cinema
for calendar year 1996 was $________ and for the period from January 1, 1997
through August 31, 1997 was $1,249,268. The aggregate gross concession revenues
for the Cinema for calendar year 1996 was $________ and for the period from
January 1, 1997 through August 31, 1997, was $522,316. Earnings before interest,
taxes and depreciation and amortization for the Cinema for the period from
January 1, 1997 through August 31, 1997 was at least $411,000.
3.5. NO CHANGES. Since September 30, 1996, Seller has conducted the
Business only in the ordinary course. Without limiting the generality of the
foregoing sentence, since September 30, 1996, there has not been any: (i)
material adverse change in the Purchased Assets or Leased Real Estate; (ii)
damage or destruction to any Purchased Asset or Leased Real Estate, whether or
not covered by insurance; (iii) strike or other labor trouble at the Cinema;
(iv) increase in the salary, wage or bonus of any employee of the Cinema; or (v)
agreement or commitment to do any of the foregoing. Except as provided on
Schedule 3.5, since September 30, 1996, Seller has not made any material
changes, substitutions or replacements to the equipment, furniture or fixtures
at the Cinema.
3.6. TAXES. Seller, its Affiliates and Seller's Predecessor, have filed or
caused to be filed on a timely basis, or will file or cause to be filed on a
timely basis, all Tax Returns that are required to be filed by it prior to or on
the Closing Date, pursuant to the Law of each governmental authority with taxing
power over it. All such Tax Returns were or will be, as the case may be, correct
and complete. Seller and Seller's Predecessor have paid or will pay all Taxes
that have or will become due as shown on such Tax Returns or pursuant to any
assessment received as an adjustment to such Tax Returns (subject to all rights
of appeal by Buyer). Seller and Seller's Predecessor have withheld and paid all
Taxes required to have been withheld in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third
party.
3.7. UNDISCLOSED LIABILITIES. Except as disclosed on Schedule 3.7,
Seller has no, and after Closing shall have no, Liabilities of any kind or
nature whatsoever that would attach to the Purchased Assets or for which any
Buyer or CCG may become liable.
3.8. CONDITION OF ASSETS; TITLE; BUSINESS. Seller has good, marketable and
exclusive title to all of the Purchased Assets. The tangible Purchased Assets
are in good operating
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condition and repair suitable for the purposes for which they are used in the
Business, and all equipment included in the Purchased Assets have been
maintained in the normal course of business by qualified professionals. Except
as disclosed on Schedule 3.8 and except for Permitted Encumbrances, none of the
Purchased Assets is subject to any Encumbrance. Schedule 3.8 identifies any
property located on the Leased Real Estate that is not owned by Seller. The
Encumbrances identified on Schedule 3.8 will be removed by Seller on or prior to
Closing. The Purchased Assets do not contain any shares of capital stock of or
other equity interest in any Person. On the Closing Date, the Purchased Assets
will include at a minimum (i) one functioning xenon projector bulb for each
auditorium in the Cinema, and (ii) one new, unused, spare xenon projector bulb
for each type of projector at the Cinema location.
3.9. NO PENDING LITIGATION OR PROCEEDINGS. No action, suit, investigation,
claim or proceeding of any nature or kind whatsoever, whether civil, criminal or
administrative, by or before any Governmental Body or arbitrator ("LITIGATION")
is pending or, to the knowledge of Seller and Mr. Sayegh, threatened against or
affecting Seller, Mr. Sayegh, the Business, any of the Purchased Assets, the
Leased Real Estate, or any of the transactions contemplated by this Agreement or
any Other Agreement except for claims for personal injury and workers
compensation and further except for claims for property damage identified on
Schedule 3.9 and claims by Governmental Bodies identified on Schedule 3.9. There
is presently no outstanding judgment, decree or order of any Governmental Body
against or affecting Seller, Mr. Sayegh, the Business, any of the Purchased
Assets, the Leased Real Estate, or any of the transactions contemplated by this
Agreement or any Other Agreement. Neither Seller nor Mr. Sayegh has any pending
any Litigation against any third party related to the Business.
3.10. CONTRACTS. There is no contract, lease or other agreement, that
materially affects or is used in the Business or the Leased Real Estate other
than the Lease Agreement. The Lease Agreement is a legal, valid and binding
obligation of Seller and is in full force and effect. Seller and each other
party to the Lease Agreement has performed all obligations required to be
performed by it thereunder and is not in breach or default, and is not alleged
to be in breach or default, in any respect thereunder, and, to the knowledge of
Seller and Mr. Sayegh, no event has occurred and no condition or state of facts
exists (or would exist upon the giving of notice or the lapse of time or both)
that would become or cause a breach, default or event of default thereunder,
would give to any Person the right to cause such a termination or would cause an
acceleration of any obligation thereunder. Seller is not currently renegotiating
the Lease Agreement.
3.11. PERMITS; COMPLIANCE WITH LAW. Subject to Section 5.10, Seller holds
all health department and certificates of occupancy required under any
applicable Law in connection with the operation of the Business and use and
occupancy of the Leased Real Estate ("PERMITS"). The Purchased Assets include
all Permits other than the occupancy permit which must be obtained under local
law by Buyer. Seller has received no notice of any violation of Law which has
not been remedied or rectified.
3.12. LEASED REAL ESTATE. Mr. Sayegh has the right to quiet enjoyment of
all Leased Real Estate, including all renewal rights under the Lease Agreement.
Mr. Sayegh has not received any written or oral notice of assessments for public
improvements against any Leased Real Estate
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or any written or oral notice or order by any Governmental Body, any insurance
company that has issued a policy with respect to any of such properties or any
board of fire underwriters or other body exercising similar functions that
relates to violations of building, safety or fire ordinances or regulations,
claims any defect or deficiency with respect to any of such properties or
requests the performance of any repairs, alterations or other work to or in any
of such properties or in the streets bounding the same, which in each case has
not been remedied or rectified. There is no pending condemnation, expropriation,
eminent domain or similar proceeding affecting all or any portion of the Leased
Real Estate. Mr. Sayegh has not received any written notice of any proposed,
planned or actual curtailment of service of any utility supplied to the Leased
Real Estate. None of the Leased Real Estate is subleased to any person. The Real
Estate Leases are in full force and effect in accordance with their terms, and
have not been modified or amended (other than as disclosed on Exhibit A) and, to
the knowledge of Seller and Mr. Sayegh, no party thereto is in default under any
of the terms contained therein.
3.13. LABOR RELATIONS. No employee of Seller is represented by any union
or other labor organization. No representation election, arbitration proceeding,
grievance, labor strike, dispute, slowdown, stoppage or other labor trouble is
pending or, to the knowledge of Seller and Mr. Sayegh, threatened against,
involving, affecting or potentially affecting Seller. No complaint against
Seller or Seller's Predecessor is pending or, to the knowledge of Seller and Mr.
Sayegh, threatened before the National Labor Relations Board, the Equal
Employment Opportunity Commission or any similar state or local agency, by or on
behalf of any employee of Seller or Seller's Predecessor. To the knowledge of
Seller and Mr. Sayegh, Seller has no Liability for any occupational disease of
any of its employees, former employees or others.
3.14. INSURANCE. Schedule 3.14 discloses all insurance policies on an
"occurrence" basis with respect to which Seller or Seller's Predecessor is the
owner, insured or beneficiary.
3.15. INTELLECTUAL PROPERTY RIGHTS. Seller neither owns nor is licensee to
any form of Intellectual Property Rights related to the Cinema other than the
names "CJM Enterprises", which is a Retained Asset, and rights to show films to
the public according to agreements which are Retained Assets and Retained
Liabilities. To the knowledge of Seller and Mr. Sayegh, no other Person has any
rights to the names "Middlebrook" in connection with the use of a cinema in
Middlebrook, New Jersey. To the knowledge of Seller and Mr. Sayegh, Seller is
not infringing upon the intellectual property rights of any other Person.
Schedule 3.14 identifies all computer software owned by Seller. With respect to
any such computer software, the Seller makes no agreement or other warranties or
representations hereunder other than that Seller a licensee of certain computer
software used by it in connection with certain computer hardware that Seller is
selling to Buyer hereunder and as to any license for software used with respect
to said computer hardware,
(a) Seller will assign to Buyer at Closing any rights, title, or interest
in said software, but without warranty,
(b) Seller's obligation to sell, transfer, or assign any such software as
is otherwise called for above shall be void if prohibited by any such license,
and
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(c) At Closing, regardless of whether (a) or (b) is the case, the price
paid by Buyer to Seller will remain as is otherwise called for in the agreement.
3.16. EMPLOYEE BENEFITS. Except for medical and dental coverage, life
insurance, and long-term disability plans described on Schedule 3.16 for those
managers of the Cinema identified on Schedule 3.16, Seller does not maintain any
Benefit Plan for any employees employed at the Cinema. After the Closing,
neither Buyer or CCG will have any Liability, with respect to any Benefit Plan
of Seller or any other member of the Seller Group, whether as a result of
delinquent contributions, distress terminations, fraudulent transfers, failure
to pay premiums to the PBGC, withdrawal Liability or otherwise. Schedule 3.16
identifies the names of all employees of Seller employed at the Cinema,
including each listed employee's address, current compensation, vacation time to
which he or she is entitled and vacation time so far taken. Schedule 3.16 also
includes copies of Seller's payroll records for all persons currently employed
by Seller at the Cinema. There are no written or oral agreements or arrangements
providing for the employment by Seller of any person at the Cinema other than
"at will" agreements. All employees of Seller at the Cinema are employees at
will. Seller does not provide a motor vehicle to any employee of Seller at the
Cinema.
3.17. ENVIRONMENTAL MATTERS. The representations and warranties contained
in this Section are qualified by (i) the disclosures on Schedule 3.17, (ii) the
knowledge of Seller and Mr. Sayegh as to the activities of Seller's
Predecessors, and (iii) the knowledge of Seller and Mr. Sayegh as to the
activities of third parties prior to the time that Seller took possession of the
property subject to the Lease Agreement.
(a) COMPLIANCE; NO LIABILITY. Seller and Seller's Predecessor have
operated the Business and each parcel of Leased Real Estate in compliance with
all applicable Environmental Laws. Seller is not subject to any Liability,
penalty or expense (including legal fees) in connection with the Business or
ownership or leasing of the Leased Real Estate by virtue of any violation of any
Environmental Law, any environmental activity conducted on or with respect to
any property or any environmental condition existing on or with respect to any
property, in each case whether or not Seller or Seller's Predecessors permitted
or participated in such act or omission.
(b) TREATMENT; CERCLIS. Neither Seller nor Seller's Predecessors have
treated, stored, recycled or disposed of any Regulated Material on any Leased
Real Estate in violation of applicable Environmental Laws, and, to the knowledge
of Seller and Mr. Sayegh, no other Person has treated, stored, recycled or
disposed of any Regulated Material on any part of the Leased Real Estate in
violation of applicable Environmental Laws. There has been no release of any
Regulated Material at, on or under any Leased Real Estate. Neither Seller nor
Seller's Predecessors have transported or arranged for the transportation of any
Regulated Material from the Cinema to any location that is listed or proposed
for listing on the National Priorities List pursuant to Superfund, on CERCLIS or
any other location that is the subject of federal, state or local enforcement
action or other investigation that may lead to claims against Seller or Seller's
Predecessor for cleanup costs, remedial action, damages to natural resources, to
other property or for personal injury including claims under Superfund.
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(c) NOTICES; EXISTING CLAIMS; CERTAIN REGULATED MATERIALS; STORAGE TANKS.
Neither Seller nor Seller's Predecessors have received any request for
information, notice of claim, demand or other notification that it is or may be
potentially responsible with respect to any investigation, abatement or cleanup
of any threatened or actual release of any Regulated Material. To the knowledge
of Seller and Mr. Sayegh, Seller is not required to place any notice or
restriction relating to the presence of any Regulated Material at any Leased
Real Estate. There has been no past, and there is no pending or contemplated,
claim by Seller or Seller's Predecessor under any Environmental Law or Laws
based on actions of others that may have impacted on the Leased Real Estate, and
neither Seller nor Seller's Predecessors has entered into any agreement with any
Person regarding any remedial action or existing environmental Liability or
expense with respect to any of the Real Property or any real property adjacent
to the Real Property. To the knowledge of Seller and Mr. Sayegh, all storage
tanks located on the Leased Real Estate, whether underground or aboveground, are
disclosed on Schedule 3.17. Seller has not closed or caused to be closed any
underground storage tank on the Leased Real Estate.
3.18. ADDITIONAL THEATERS. Neither Seller nor Mr. Sayegh has any knowledge
of the intention by any person to construct or open any movie theater within a
five-mile radius of the Cinema.
3.19. FINDERS' FEES. Neither Seller nor any of its officers, managers or
employees has employed any broker or finder or incurred any Liability for any
brokerage fee, commission or finders' fee in connection with any of the
transactions contemplated hereby or by any Other Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer and CCG jointly and severally represent
and warrant to Seller and Mr. Sayegh as follows:
4.1. ORGANIZATION. Buyer and CCG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to own or lease its properties, carry on its
business, enter into this Agreement and the Other Agreements to which it is or
is to become a party and perform its obligations hereunder and thereunder.
4.2. AUTHORIZATION AND ENFORCEABILITY. This Agreement and each Other
Agreement to which Buyer and CCG is a party have been duly executed and
delivered by and constitute the legal, valid and binding obligations of Buyer
and CCG, enforceable against it in accordance with their respective terms. Each
Other Agreement to which Buyer and CCG is to become a party pursuant to the
provisions hereof, when executed and delivered by Buyer and CCG, will constitute
the legal, valid and binding obligation of Buyer and CCG, enforceable against
Buyer and CCG in accordance with the terms of such Other Agreement. All actions
contemplated by this Section have been duly and validly authorized by all
necessary proceedings by Buyer and CCG.
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4.3. NO VIOLATION OF LAWS; CONSENTS. Neither the execution and
delivery of this Agreement or any Other Agreement to which Buyer or CCG is or is
to become a party, the consummation of the transactions contemplated hereby or
thereby nor the compliance with or fulfillment of the terms, conditions or
provisions hereof or thereof by Buyer or CCG will: (i) contravene any provision
of the Governing Documents of any Buyer or CCG, (ii) conflict with, result in a
breach of, constitute a default or an event of default (or an event that might,
with the passage of time or the giving of notice or both, constitute a default
or event of default) under any of the terms of, result in the termination of,
result in the loss of any right under, or give to any other Person the right to
cause such a termination of or loss under, any contract, agreement or instrument
to which any Buyer or CCG is a party or by which any of their assets may be
bound or affected, (iii) result in the creation, maturation or acceleration of
any Liability of any Buyer or CCG (or give to any other Person the right to
cause such a creation, maturation or acceleration), or (iv) violate any Law or
any judgment or order of any Governmental Body to which any Buyer or CCG is
subject or by which any of its assets may be bound or affected. Except for the
consent of Provident Bank, no consent, approval or authorization of, or
registration or filing with, any Person is required in connection with the
execution or delivery by Buyer or CCG of this Agreement or any of the Other
Agreements to which Buyer or CCG is or is to become a party pursuant to the
provisions hereof or the consummation by Buyer or CCG of the transactions
contemplated hereby or thereby.
4.4. NO PENDING LITIGATION OR PROCEEDINGS. No Litigation is pending or, to
the knowledge of any Buyer or CCG, threatened against or affecting CCG or any
Affiliate of CCG in connection with any of the transactions contemplated by this
Agreement or any Other Agreement to which Buyer and CCG is or is to become a
party or that would, to CCG's knowledge, have a material adverse effect on CCG's
business considered as a whole. There is presently no outstanding judgment,
decree or order of any Governmental Body against or affecting CCG or any
Affiliate of CCG in connection with the transactions contemplated by this
Agreement or any Other Agreement to which any Buyer or CCG is or is to become a
party or that would, to CCG's knowledge, have a material adverse effect on CCG's
ability to pay the Subordinated Note.
4.5. FINDERS' FEES. Neither Buyer, CCG nor any of their officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fee, commission or finders' fee in connection with
any of the transactions contemplated hereby.
4.6. STOCK OWNERSHIP. CCG owns all of the issued and outstanding capital
stock of the Buyer.
ARTICLE V.
CERTAIN COVENANTS
5.1. CONDUCT OF BUSINESS PENDING CLOSING. From and after the date hereof
and until the Closing Date, unless Buyer shall otherwise consent in writing,
Seller shall (and Mr. Sayegh shall cause Seller to) conduct its affairs as
follows:
(a) ORDINARY COURSE; COMPLIANCE. The Business shall be conducted only in
the ordinary course and consistent with past practice. Seller and Mr. Sayegh
shall maintain the
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Purchased Assets and the Leased Real Estate consistent with past practice and
shall comply in a timely fashion with the provisions of all Permits and its
other agreements and commitments. Seller shall use its best efforts to keep the
Business organization intact, keep available the services of its present
employees and preserve the goodwill of its suppliers, patrons and others having
business relations with it. Seller shall maintain in full force and effect its
policies of insurance, subject only to variations required by the ordinary
operations of the Business, or else shall obtain, prior to the lapse of any such
policy, substantially similar coverage with insurers of recognized standing.
(b) PROHIBITED TRANSACTIONS. Seller shall not: (i) amend or terminate any
Permit; (ii) fail to pay any Liability or charge when due, other than
Liabilities contested in good faith by appropriate proceedings; (iii) enter into
any employment or consulting contract or arrangement with any employee of the
Cinema; (iii) take any action or omit to take any action that is reasonably
likely to result in the occurrence of any event described in Section 3.5; or
(vi) take any action or omit to take any action that will cause a breach or
termination of any Permit, other than termination by fulfillment of the terms
thereunder.
(c) ACCESS, INFORMATION AND DOCUMENTS. Seller shall give to Buyer and to
Buyer's employees and representatives (including accountants, attorneys,
environmental consultants and engineers) access during normal business hours to
all of the properties, books, contracts, commitments, records, officers,
personnel and accountants (including independent public accountants and their
workpapers) of Seller solely as they relate to the Cinema and shall furnish to
Buyer all such documents and copies of documents and all information with
respect to the properties, Liabilities and affairs of Seller (solely as they
relate to the Cinema) as Buyer may reasonably request, including but not limited
to weekly reports of gross box office and concession receipts at the Cinema, at
the same time such reports are available to Seller's management.
(d) CONFIDENTIALITY. Buyer and CCG (for itself and for any affiliate of
itself or of Buyer) hereby agree that they will not disclose to any person any
information they may have gained with regard to the operation or the finances of
the business sold by Seller hereunder which information was gained by
disclosures made to them by Seller and that this obligation of confidentiality
shall survive the Closing. Without otherwise limiting the information subject to
the obligation of confidentiality set forth above, the information to be kept
confidential by Buyer and Buyer's affiliates, as is set forth above, shall
include the financial statements annexed to this agreement and the financial
representations made hereunder and any information contained in any accounting
records of Seller as may have been disclosed or made available to Buyer in
Buyer's review of Seller's business prior to Closing.
5.2. FULFILLMENT OF AGREEMENTS. Each party hereto shall use its best
efforts to cause all of those conditions to the obligations of the other under
Article VI that are not beyond its reasonable control to be satisfied on or
prior to the Closing and shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement. Seller shall, prior to Closing, obtain the consents referred to
in Section 3.3.
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5.3. EMPLOYMENT, SEVERANCE AND TERMINATION PAYMENTS. Seller agrees to pay,
perform and discharge any and all severance payments, payroll and employment
related Liabilities with respect to employees of Seller at the Cinema accruing
up to the close of business on the date immediately preceding the Closing Date
or which result from the transfer of the Purchased Assets hereunder and the
employment by Buyer of those employees and shall indemnify and hold harmless
Buyer and its directors, officers and Affiliates from and against any and all
losses, Liabilities, damages, costs and expenses, including reasonable legal
fees and disbursements, that any of the aforesaid may suffer or incur by reason
of or relating to any such Liabilities.
5.4. SELLER'S EMPLOYEES. Buyer shall have the right, but not the
obligation, to offer employment to any of the employees of Seller who are
employed at the Cinema. At or prior to the Closing, Seller shall fully
compensate all employees of Seller at the Cinema for all work performed through
and including the Closing Date. Seller does not guaranty that any of the
employees to which Buyer or CCG will offer employment will accept such offer of
employment.
5.5. WORKERS' COMPENSATION AND DISABILITY CLAIMS.
(a) SELLER'S LIABILITY. Seller shall remain liable for all Liability for
all workers' compensation, disability and occupational diseases of or with
respect to all of Seller's employees attributable to injuries, claims,
conditions, events and occurrences occurring on or before the Closing Date.
(b) BUYER'S LIABILITY. Buyer shall be liable for all Liability for all
workers' compensation, disability and occupational diseases of or with respect
to all of employees of Seller hired by Buyer attributable to injuries, claims,
conditions, events and occurrences first occurring after the Closing Date.
5.6. COVENANT NOT TO COMPETE.
(a) RESTRICTION. For a period of five years from and after the Closing
Date, neither Seller nor Mr. Sayegh shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be employed or otherwise connected as an officer,
employer, stockholder, partner or otherwise with, the Cinema within a seven mile
radius of any theatre owned directly or indirectly by CCG on the date
immediately following the Closing Date. Ownership of not more than 2% of the
outstanding stock of any publicly traded company or operation of the projects
identified in Section 5.11 shall not be a violation of this Section.
(b) ENFORCEMENT. The restrictive covenant contained in this Section is a
covenant independent of any other provision of this Agreement and the existence
of any claim that Seller may allege against any other party to this Agreement,
whether based on this Agreement or otherwise, shall not prevent the enforcement
of this covenant. Seller agrees that Buyer's remedies at law for any breach or
threat of breach by Seller of the provisions of this Section will be inadequate,
and that Buyer shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Section and to enforce specifically the terms
and provisions hereof, in addition to any other remedy to which Buyer may be
entitled at law or equity. In the event of
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litigation regarding this covenant not to compete, the prevailing party in such
litigation shall, in addition to any other remedies the prevailing party may
obtain in such litigation, be entitled to recover from the other party its
reasonable legal fees and out of pocket costs incurred by such party in
enforcing or defending its rights hereunder. The length of time for which this
covenant not to compete shall be in force shall not include any period of
violation or any other period required for litigation during which Buyer seek to
enforce this covenant. Should any provision of this Section be adjudged to any
extent invalid by any competent tribunal, such provision will be deemed modified
to the extent necessary to make it enforceable.
5.7. PUBLICITY. Seller and Buyer shall not issue any press release or
otherwise make any announcements to the public or the employees of Seller with
respect to this Agreement prior to the Closing Date without the prior written
consent of the other, except as required by Law. If Buyer believes that a public
disclosure of the transactions contemplated hereby is required by law, Buyer
shall give to Seller notice thereof at least 24 hours prior to making such
disclosure.
5.8. TRANSITIONAL MATTERS. Seller and Mr. Sayegh shall cooperate with
and assist Buyer and its authorized representatives in order to provide, to the
extent reasonably requested by Buyer, an efficient transfer of control of the
Purchased Assets and the Leased Real Estate and to avoid any undue interruption
in the activities and operations of the Business and the Leased Real Estate
following the Closing Date. Seller shall not cause any utilities to be
disconnected until the Buyer shall have established an account for such utility
in Buyer's own name. Seller shall assist in transferring to Buyer the telephone
numbers for the Cinema location. Buyer shall be liable to Seller for the utility
payments for any utility maintained by the Seller after the Closing Date. Seller
shall cooperate with Buyer's lender, Provident Bank, in connection with the
consummation by Buyer of the transactions provided hereunder, as reasonably
requested by such lender. Such cooperation shall include the execution and
delivery of a subordination agreement in favor of Provident Bank and its assigns
with respect to the Subordinated Note and shall permit Provident Bank to rely on
the legal opinion be delivered by Seller's counsel hereunder. Prior to Closing,
Seller shall remove all of its movie trailers from films at the Cinema.
5.9. BOOKS AND RECORDS. Seller shall not destroy or dispose of any books,
records, and files relating to the Business to the extent that they pertain to
the Business prior to the Closing Date.
5.10. PERMITS; N.J. ISRA. Seller shall use its best efforts to provide to
Buyer valid Permits for the Cinema prior to Closing. In the event that Seller is
unable to do so by Closing, then Seller shall provide Buyer with such Permits
within 30 days after Closing. Sellers shall obtain prior to Closing letters of
Non-Applicability with respect to the Leased Real Estate under the New Jersey
Site Recovery Act (PL 1993, ch. 39).
5.11. RIGHT OF FIRST REFUSAL. Mr. Sayegh hereby grants to CCG a right of
first refusal to purchase any movie theater property (whether in corporate
solution or otherwise) proposed to be sold by Mr. Sayagh within the three year
period ending on the third anniversary of the Closing Date. The terms of such
right for each theater property are hereby forth in the Right of First Refusal
Agreement in substantially the form of Exhibit E hereto. As each such theater
property is identified, Mr. Sayagh shall notify CCG of such property and CCG and
Mr. Sayegh shall, as a
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formality, promptly memorialize their agreement with respect to such theater by
completing the information in the form of such Right of First Refusal Agreement
and executing and delivering such completed Right of First Refusal Agreement.
The parties agreement set forth in this Section is intended to be legally
binding notwithstanding that the theater properties subject to this right have
not yet been specifically identified herein.
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1. CONDITIONS PRECEDENT TO OBLIGATION OF BUYER. The obligation of Buyer
and CCG to proceed with the Closing under this Agreement is subject to the
fulfillment prior to or at Closing of the following conditions, any one or more
of which may be waived in whole or in part by Buyer or CCG at Buyer's or CCG's
sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Seller and Mr. Sayegh contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date.
Seller and Mr. Sayegh shall have performed in all respects all of the covenants
and complied with all of the provisions required by this Agreement to be
performed or complied with by it at or before the Closing.
(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby or that would, after Closing, limit or adversely affect Buyer's ownership
of the Purchased Assets or the Leased Real Estate in a manner different from
Seller's, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements or seeking
monetary or other relief by reason of the consummation of any of such
transactions.
(c) NO MATERIAL ADVERSE CHANGE. Between the date hereof and the Closing
Date, there shall have been no material adverse change, regardless of insurance
coverage therefor, in the Business or any of the Purchased Assets, results of
operations, prospects or condition, of the Cinema or the Leased Real Estate.
(d) CLOSING CERTIFICATE. If Closing occurs after the date hereof, Seller
shall have delivered a certificate, dated the Closing Date certifying to the
fulfillment of the conditions set forth in subparagraphs (a), (b) and (c) of
this Section. Such certificate shall constitute a representation and warranty of
Seller with regard to the matters therein for purposes of this Agreement.
(e) CLOSING DOCUMENTS. Buyer and CCG shall have received the other
documents referred to in Section 6.3(a). All agreements, certificates, opinions
and other documents delivered by Seller to Buyer and CCG hereunder shall be in
form and substance reasonably satisfactory to Buyer and CCG.
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(f) TITLE INSURANCE. Buyer, at their sole cost and expense, shall have
obtained for all Leased Real Estate final marked commitments to issue to Buyer
ALTA (1990-Form B with appropriate state endorsements) owner's policies of title
insurance in coverage amounts equal to the fair market values of the Leased Real
Estate, insuring good title to the Leased Real Estate with mechanic's liens
coverage and such endorsements as Buyer may have reasonably requested and with
exceptions only for ALTA standard printed exceptions (other than mechanic's and
materialmen's liens and rights of possession), and Permitted Encumbrances.
(g) BOARD APPROVAL; BANK APPROVAL. Buyer and CCG shall have received the
approval of its Board of Directors and its lender, Provident Bank, to the
transactions contemplated hereunder.
(h) OTHER AGREEMENTS. CCG shall have closed under the agreements to
purchase Cinema 23 in Cedar Grove, New Jersey and the Bellevue Theatre in
Montclair, New Jersey or the Kin Mall Cinemas in Kinnelon, New Jersey.
(i) RELEASE OR TERMINATION OF MORTGAGE AND OTHER ENCUMBRANCES. Seller
shall have caused [Bank's] mortgage on the Leased Real Estate and all of its
other Encumbrances on the Purchased Assets to be released.
(j) LEASED REAL ESTATE. Buyer shall have received from the lessor of the
Lease Agreement consent to assignment of leasehold interest, consent to
leasehold mortgage, and estoppel certificates, nondisturbance agreements, and
other documents as shall be reasonably requested by Provident Bank, all in form
and substance satisfactory to Buyer and Provident Bank.
(k) CONSENTS. Seller shall have received the other consents, approvals and
actions of the Persons identified in Section 3.3.
(l) NEW THEATER TRANSITION FORMS. Buyer shall have received a New Theater
Transition Form from Seller.
(m) DUE DILIGENCE. CCG shall have been satisfied with its due diligence
investigation of the Cinema.
6.2. CONDITIONS PRECEDENT TO OBLIGATION OF SELLER AND MR. SAYEGH. The
obligation of Seller and Mr. Sayegh to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of the following
conditions, any one or more of which may be waived in whole or in part by Seller
or Mr. Sayegh at Seller's or Mr. Sayegh's sole option:
(a) BRINGDOWN OF REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
representations and warranties of Buyer and CCG contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the Closing Date. Buyer
and CCG shall have performed all of the covenants and complied in all respects
with all of the provisions required by this Agreement to be performed or
complied with by it at or before the Closing.
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(b) LITIGATION. No statute, regulation or order of any Governmental Body
shall be in effect that restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the transactions
contemplated by this Agreement or the Other Agreements or seeking monetary or
other relief by reason of the consummation of such transactions.
(c) CLOSING CERTIFICATE. If Closing occurs after the date hereof, Buyer
and CCG shall have delivered a certificate, dated the Closing Date certifying to
the fulfillment of the conditions set forth in subparagraphs (a) and (b) of this
Section 6.2. Such certificate shall constitute a representation and warranty of
Buyer with regard to the matters therein for purposes of this Agreement.
(d) CLOSING DOCUMENTS. Seller shall also have received the other documents
referred to in Section 6.3(b). All agreements, certificates, opinions and other
documents delivered by Buyer to Seller hereunder shall be in form and substance
reasonably acceptable to counsel for Seller, in the exercise of such counsel's
reasonable professional judgment.
(e) LEASE AGREEMENT. Seller shall have received from the lessor of the
Lease Agreement consent to the assignment of the Lease Agreement to Buyer. If
Mr. Sayegh is not released from his obligations under the Lease Agreement, then
CCG shall indemnify and hold Mr. Sayegh harmless from and against any damages
incurred by Mr. Sayegh as a consequence of the breach of the Lease Agreement by
Buyer after Closing.
6.3. DELIVERIES AND PROCEEDINGS AT CLOSING.
(a) DELIVERIES BY SELLER AND MR. SAYEGH. Seller and Mr. Sayegh shall
deliver or cause to be delivered to Buyer at the Closing:
(i) General warranty bills of sale and instrument of assignment to
the Purchased Assets in the form attached hereto as Exhibit F.
(ii) Assignments of all transferable or assignable licenses, Permits
and warranties relating to the Purchased Assets and of any Intellectual Property
included in the Purchased Assets, duly executed and in forms acceptable to
Buyer.
(iii) [not used].
(iv) Assignments of the Lease Agreement in the form attached hereto
as Exhibit G.
(v) Certificates of the appropriate public officials to the effect
that Seller was a validly existing corporation in good standing in its state of
formation as of a date not more than 15 business days prior to the Closing Date.
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(vi) Incumbency and specimen signature certificates dated the
Closing Date, signed by the officers of Seller and certified by its Chief
Executive Officer or Executive Vice President.
(vii) True and correct copies of the Seller's Certificate of
Incorporation certified by the Secretary of State as of the Closing Date.
(viii) Certificates of Seller (A) setting forth all resolutions of
the Directors of Seller and the stockholders of Seller authorizing the execution
and delivery of this Agreement and the Other Agreements and the performance by
Seller of the transactions contemplated hereby and thereby, and (B) to the
effect that the Certificate of Incorporation of Seller delivered pursuant to
Section 6.3(a)(vii) were in effect at the date of adoption of such resolutions,
the date of execution of this Agreement and the Closing Date.
(ix) The opinion of Buklad & Buklad, legal counsel to Seller, in
substantially the form of Exhibit H.
(x) Keys for the Cinema location.
(xi) All vendor warranties (including those for the roofs on the
Cinema) respecting the Purchased Assets.
(xii) Such other agreements and documents as Buyer may reasonably
request.
(b) DELIVERIES BY BUYER. Buyer shall deliver or cause to be delivered to
Seller at the Closing:
(i) The Subordinated Note.
(ii) [not used].
(iii) A certificate of the appropriate public official to the effect
that Buyer and CCG is a validly existing corporation in the State of Delaware as
of a date not more than 15 business days prior to the Closing Date.
(iv) Incumbency and specimen signature certificates signed by the
officers of Buyer and CCG and certified by the Secretary of Buyer and CCG.
(v) True and correct copies of the Certificates of Incorporation of
Buyer and CCG as of a date not more than 15 business days prior to the Closing
Date, certified by the Secretary of State of Delaware.
(vi) A certificate of the Secretary of Buyer and CCG (A) setting
forth all resolutions of the Board of Directors of Buyer and CCG authorizing the
execution and delivery of this Agreement and Other Agreements and the
performance by Buyer and CCG of the transactions contemplated hereby and
thereby, certified by the Secretary of Buyer and CCG and (B) to the effect that
the Certificates of Incorporation of Buyer delivered pursuant to Section
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6.3(b)(v) were in effect at the date of adoption of such resolutions, the date
of execution of this Agreement and the Closing Date.
(vii) The opinion of Kirkpatrick & Lockhart LLP, counsel to Buyer
and CCG, in substantially the form of Exhibit F.
(viii) Such other agreements and documents as Seller may reasonably
request.
6.4. TERMINATION.
(a) MUTUAL CONSENT; FAILURE OF CONDITIONS. Except as provided in Section
6.4(b), this Agreement may be terminated at any time prior to Closing by: (i)
mutual consent of Buyer, CCG and Seller; (ii) Buyer and CCG, if any of the
conditions specified in Section 6.1 hereof shall not have been fulfilled by
January 19, 1998 and shall not have been waived by Buyer and CCG; or (iii)
Seller, if any of the conditions specified in Section 6.2 hereof shall not have
been fulfilled by January 19, 1998 and shall not have been waived by Seller. In
the event of termination of this Agreement by either Buyer, CCG or Seller
pursuant to clause (ii) or (iii) of the immediately preceding sentence, Buyer
and CCG, on the one hand, and Seller on the other hand shall be liable to the
other for any breach hereof by such party, which breach led to such termination,
and the rights and obligations of the parties set forth in Sections 7.2, 7.3 and
8.1 shall survive such termination. Buyer, CCG and Seller shall also be entitled
to seek any other remedy to which it may be entitled at law or in equity in the
event of such termination, which remedies shall include injunctive relief and
specific performance. Notwithstanding the foregoing, in the event that this
Agreement is terminated by one party hereto pursuant to clause (ii) or (iii) of
the first sentence of this Section solely as a result of a breach by the other
party hereto of a representation or warranty of such other party as of a date
after the date of this Agreement, which breach could not have been reasonably
anticipated by such other party and was beyond the reasonable control of such
other party, then the remedy of the party terminating this Agreement shall be
limited solely to recovery of all of such party's costs and expenses incurred in
connection herewith.
(b) CASUALTY DAMAGE. Notwithstanding anything else herein to the contrary,
if prior to Closing the Purchased Assets (or any portion thereof) are damaged by
fire or any other cause, the reasonable estimate of the immediate repair of
which would cost more than $50,000, Buyer at their option, which may be
exercised by written notice given to Seller within ten business days after
Buyer's receipt of notice of such loss, may declare this Agreement null and
void, or Buyer may Close subject to reduction of the Purchase Price by the
amount of any applicable insurance deductible which shall be paid by Buyer and
assignment to Buyer of the proceeds from any insurance carried by Seller
covering such loss. If prior to Closing the Purchased Assets (or any portion
thereof) are damaged by fire or any other cause, the reasonable estimate of the
repair of which would cost $50,000 or less, such event shall not excuse Buyer
from its obligations under this Agreement, but the Purchase Price shall be
reduced by an amount equal to the amount of such cost and Seller shall be
entitled to retain the net insurance proceeds collected or to be collected by
Seller.
(c) FAILURE TO OBTAIN LANDLORD'S CONSENT. Notwithstanding anything else
herein to the contrary, failure to obtain the consent of the landlord to the
assignment of the Lease
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Agreement from Seller to Buyer shall not be a breach of any party hereto. In the
event that the Seller or Mr. Sayegh determines to pursue the landlord for any
damages for wrongfully withholding or conditioning its consent to the assignment
of the Lease, the Buyer shall not be a party to nor have any rights of recovery
in any such action and the Seller and Mr. Sayegh will be free to pursue or
abandon any such action against the landlord as they see fit without including
or otherwise allowing for the participation of Buyer. In the event, the Closing
does not proceed and the Agreement is terminated, then the Buyer shall thereupon
have no further rights to buy the Purchased Assets otherwise to have been sold
hereunder, and the Seller will thereupon be free to hold, operate, sell, or
dispose of same to any person at any time thereafter.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1. SURVIVAL OF REPRESENTATIONS. All representations, warranties and
agreements made by any party in this Agreement or pursuant hereto shall survive
the Closing; provided, however, that, representations and warranties hereunder
shall survive for a period of three years after the Closing Date, with the
exception of the representations and warranties contained in Sections 3.1, 3.2,
3.3 and 3.6, the first sentence of Section 3.8, and Sections 4.1, 4.2 and 4.3,
all of which shall survive for the period of the applicable statute of
limitations plus 90 days. All claims for damages made by virtue of any
representations, warranties and agreements herein shall be made under, and
subject to the limitations set forth in, this Article VII. The representations
and warranties set forth in Articles III and IV are cumulative, and any
limitation or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and warranty
therein. Except the representations and warranties of each party hereto
expressly contained in this Agreement or the Other Agreements, no party hereto
is making and specifically disclaims any representations or warranties of any
kind or character, express or implied.
7.2. INDEMNIFICATION BY SELLER AND MR. SAYEGH. Seller and Mr. Sayegh shall
jointly and severally indemnify, defend, save and hold Buyer, CCG and their
officers, directors, employees, agents and Affiliates (collectively, "BUYER
INDEMNITEES") harmless from and against all demands, claims, actions or causes
of action, assessments, losses, damages, deficiencies, Liabilities, costs and
expenses (including reasonable legal fees, interest, penalties, and all
reasonable amounts paid in investigation, defense or settlement of any of the
foregoing; collectively, "BUYER DAMAGES") asserted against, imposed upon,
resulting to, required to be paid by, or incurred by any Buyer Indemnitees,
directly or indirectly, in connection with, arising out of, resulting from, or
which would not have occurred but for, (i) a material breach of any
representation or warranty made by Seller in this Agreement, in any certificate
or document furnished pursuant hereto by Seller or any Other Agreement to which
Seller is or is to become a party, (ii) a breach or nonfulfillment of any
covenant or agreement made by Seller in or pursuant to this Agreement and in any
Other Agreement to which Seller is or is to become a party, (iii) any Retained
Liability, (iv) any successor liability (or Liabilities based on similar
theories) arising out of any facts or circumstances occurring prior to the
Closing Date or Liability arising out of or attaching by virtue of Seller being
a member of a controlled group or affiliated group of entities,
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and (v) the provisions of 29 U.S.C. ss. 1161-1168, as same may be amended from
time to time, and the regulations and rulings thereunder, with respect to the
employees of Seller at the Cinema.
7.3. INDEMNIFICATION BY BUYER. Buyer and CCG shall indemnify, defend, save
and hold Mr. Sayegh and Seller and its officers, directors, employees,
Affiliates and agents (collectively, "SELLER INDEMNITEES") harmless from and
against any and all demands, claims, actions or causes of action, assessments,
losses, damages, deficiencies, Liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable amounts paid in
investigation, defense or settlement of any of the foregoing; collectively,
"SELLER DAMAGES") asserted against, imposed upon, resulting to, required to be
paid by, or incurred by any Seller Indemnitees, directly or indirectly, in
connection with, arising out of, resulting from, or which would not have
occurred but for, (i) a material breach of any representation or warranty made
by Buyer or CCG in this Agreement or in any certificate or document furnished
pursuant hereto by Buyer or CCG or any Other Agreement to which Buyer or CCG is
or is to become a party, and (ii) a breach or nonfulfillment of any covenant or
agreement made by any Buyer or CCG in or pursuant to this Agreement and in any
Other Agreement to which any Buyer or CCG is or is to become a party.
7.4. WAIVER OF STATUTE OF LIMITATIONS. Each party hereto waives any
applicable statute of limitations that may be applicable to Damages arising
under clauses (iii), (iv) and (v) of Section 7.2 and clause (iii) of Section
7.3.
7.5. NOTICE OF CLAIMS. If any Buyer Indemnitee or Seller Indemnitee (an
"INDEMNIFIED PARTY") believes that it has suffered or incurred or will suffer or
incur any Damages for which it is entitled to indemnification under this Article
VII, such Indemnified Party shall so notify the party or parties from whom
indemnification is being claimed (the "INDEMNIFYING PARTY") with reasonable
promptness and reasonable particularity in light of the circumstances then
existing. If any action at law or suit in equity is instituted by or against a
third party with respect to which any Indemnified Party intends to claim any
Damages, such Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give any notice
required by this Section shall not affect any of such party's rights under this
Article VII or otherwise except and to the extent that such failure is actually
prejudicial to the rights or obligations of the Indemnified Party.
7.6. THIRD PARTY CLAIMS. The Indemnifying Party shall have the right to
conduct and control, through counsel of its choosing, the defense of any third
party claim, action or suit, and the Indemnifying Party may compromise or settle
the same, provided that the Indemnifying Party shall give the Indemnified Party
advance notice of any proposed compromise or settlement. The Indemnifying Party
shall permit the Indemnified Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnified Party, provided that
the fees and expenses of such counsel shall be borne by the Indemnified Party
(subject to reimbursement pursuant to Section 7.1 or 7.2, as the case may be).
7.7. LIMITATION ON INDEMNIFICATION. No Indemnified Party shall be
entitled to make a claim for indemnification for inaccuracy in or breach of
representation or warranty pursuant to clause (i) of Section 7.2 until the
cumulative and aggregate amount of all Damages as a result of
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all matters covered by clause (i) of Section 7.2 exceeds $10,000 (the "BASKET
AMOUNT"). If and when such damages do exceed the Basket Amount, then the
Indemnified Party shall be entitled to indemnification for all such damages in
excess of the Basket Amount. Any indemnification payment under this Agreement
shall take into account any insurance proceeds or other third party
reimbursement actually received (other than the proceeds of any self insurance
or, to the extent it is the economic equivalent of self insurance, any insurance
that is retrospectively rated).
7.8. PAYMENT. All indemnification payments under this Article VII shall
be made promptly in cash.
ARTICLE VIII.
MISCELLANEOUS
8.1. COSTS AND EXPENSES.
Buyer and CCG, on the one hand, and Seller and Mr. Sayegh, on the other hand,
shall each pay its respective expenses, brokers' fees and commissions and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including all accounting, legal and appraisal fees and
settlement charges. All transfer taxes, if any, incurred as a result of the
transfer of the Purchased Assets shall be paid by Seller.
8.2. PRORATION OF EXPENSES. All accrued expenses associated with the
Leased Real Estate included in the Purchased Assets, such as rents and other
charges under the Lease Agreement, electricity, gas, water, sewer, telephone,
property taxes, security services and similar items, shall be prorated between
Buyer and Seller as of the Closing Date. Buyer and Seller shall settle such
amounts within 30 days after Closing.
8.3. BULK SALES. The parties hereto waive compliance with the provisions
of any bulk sales law applicable to the transactions contemplated hereby, and,
notwithstanding anything else in this Agreement to the contrary, Seller shall
hold Buyer harmless from and against all claims asserted against the Purchased
Assets or the Buyer pursuant to such bulk sales laws. Seller agrees to pay
timely its account creditors with respect to liabilities not being assumed by
Buyer hereunder.
8.4. FURTHER ASSURANCES. Seller shall, at any time and from time to time
on and after the Closing Date, upon the reasonable request by Buyer and without
further consideration, take or cause to be taken such actions and execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments, documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring, assigning,
delivering, assuring and confirming the Purchased Assets to Buyer.
8.5. NOTICES. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made (i) the fifth business day after the date of mailing, if delivered
by registered or certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier, with a record of
receipt, or (iv) the next day after the date of dispatch, if sent by cable,
telegram, facsimile or telecopy (with a copy simultaneously sent by registered
or certified mail, postage prepaid, return receipt requested), to the parties at
the following addresses:
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(i) IF TO BUYER, TO:
7 Waverly Place
Madison, New Jersey 07940
Telecopy: (201) 377-4303
Attention: A. Dale Mayo, President
with a required copy to:
David L. Forney, Esq.
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
Telecopy: (212) 536-3901
(ii) IF TO SELLER, TO:
Mr. Jesse Y. Sayegh
Rialto Theatre of Westfield, Inc.
244-254 East Broad Street
Westfield, New Jersey 07090
Telecopy:
with a required copy to:
Henry A. Buklad, Jr., Esquire
Buklad & Buklad
76 S. Orange Avenue
South Orange, New Jersey 07079
Telecopy: (201) 762-1329
Any party hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the other parties
hereto in conformity with the foregoing.
8.6. CURRENCY. All currency references herein are to United States
dollars.
8.7. OFFSET; ASSIGNMENT; GOVERNING LAW. Buyer and CCG shall be entitled
to offset or recoup from amounts due to Seller from Buyer or CCG hereunder or
under any Other Agreement (including the Subordinated Note) against any
obligations of Seller to Buyer or CCG hereunder or under any Other Agreement
(including Buyer Damages). This Agreement and all the rights and powers granted
hereby shall bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. This Agreement and the rights,
interests and obligations hereunder may not be assigned by any party hereto
without the prior written consent of the other parties hereto, except that Buyer
or CCG may make such assignments to any Affiliate of Buyer or CCG provided that
Buyer or CCG remain liable hereunder, and, further, Buyer and CCG may
collaterally assign their rights hereunder to Provident Bank or other commercial
lending
26
<PAGE>
institution. This Agreement shall be governed by and construed in accordance
with the laws of New Jersey without regard to its conflict of law doctrines.
8.8. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Agreement must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Agreement or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
8.9. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and
the Schedules and Exhibits set forth all of the promises, covenants, agreements,
conditions and undertakings between the parties hereto with respect to the
subject matter hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express or implied,
oral or written. This Agreement is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder, except the provisions
of Sections 7.2 and 7.3 relating to Buyer Indemnitees and Seller Indemnitees and
Section 8.10.
8.10. THIRD PARTY BENEFICIARY. No Person is an intended third party
beneficiary of this Agreement.
8.11. SEVERABILITY. If any term or other provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
8.12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall be deemed to be one and the same instrument.
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
MIDDLEBROOK GALLERIA CINEMAS, INC.
By: /s/ Jesse Sayegh
------------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
------------------------------
A. Dale Mayo
Title: President
CCC MIDDLEBROOK CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------------
A. Dale Mayo
Title: President
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1P Permitted Encumbrances
Schedule 3.5 No Changes
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Title; Business
Schedule 3.9 Litigation or Proceedings
Schedule 3.12 Leased Real Estate
Schedule 3.14 Insurance
Schedule 3.16 Employee Benefits
Schedule 3.17 Environmental Matters
Exhibit A Leased Real Estate/Lease Agreement
Exhibit B Subordinated Note
Exhibit C [not used]
Exhibit D Income Statements
Exhibit E Right of First Refusal Agreement
Exhibit F Form of General Warranty Bills of Sale; Instrument of
Assignment
Exhibit G Form of Assignments Lease Agreement
Exhibit H Form of Opinion of Buklad & Buklad
Exhibit I Form of Opinion of Kirkpatrick & Lockhart LLP
[Schedules and Exhibits will be provided upon request.]
<PAGE>
Amendment No. 1 to Asset Purchase Agreement
("AMENDMENT NO. 1"), dated as of December 12,
1997, by and among Jesse Sayegh, an individual
residing in Kinnelon, New Jersey ("MR.
Sayegh"), Middlebrook Galleria Cinemas, Inc., a
New Jersey corporation ("SELLER"), CCC
Middlebrook Cinema Corp., a Delaware
corporation ("BUYER"), and Clearview Cinema
Group, Inc., a Delaware corporation ("CCG").
The parties hereto entered into that certain Asset Purchase Agreement
dated as of November 14, 1997 (the "Asset Purchase Agreement") and desire to
amend the Asset Purchase Agreement pursuant to the terms contained herein.
In consideration of the representations, warranties, covenants and
agreements contained herein and in the Asset Purchase Agreement, Seller, Buyer,
Mr. Sayegh, CJM and CCG, each intending to be legally bound hereby, agree as set
forth below.
1. DEFINITIONS. All capitalized terms used in this Amendment not otherwise
defined in this Amendment have the meanings given them in the Asset Purchase
Agreement.
2. AMENDMENT. The Asset Purchase Agreement is hereby amended as provided
below.
3. SUBORDINATED NOTE; PREFERRED STOCK; ETC. All references in the Asset
Purchase Agreement to the Subordinated Note are hereby deleted. Except as
provided in Sections 4 and 5 below and subject to Sections 8 and 9 below, and
subject to Sections 8 and 9 below, CCG shall deliver to Seller by March 31,
1998, 540 shares of Class B Nonvoting Cumulative Redeemable Preferred Stock
having terms substantially set forth in the Certificate of Designations,
Preferences, Rights and Limitations attached hereto as EXHIBIT A (the "Class B
Preferred Stock"). The shares of Class B Nonvoting Cumulative Redeemable
Preferred Stock shall be included within the definition of "Other Agreements"
for all purposes in the Asset Purchase Agreement. CCG shall not issue any
additional shares of Class B Preferred Stock at any time during which CCG has
outstanding dividend arrearges on the Class B Preferred Stock held by Seller.
CCG shall not issue any shares of Preferred Stock that have rights senior to the
Class B Preferred Stock as to dividends and redemptions so long as Seller or its
affiliates hold more than 100 outstanding shares of Class B Preferred Stock.
4. CASH IN LIEU OF CLASS B PREFERRED STOCK. If by March 31, 1998 CCG
completes the issuance of debt securities aggregating at least $70 million in an
offering governed by Rule 144A issued by the Securities Exchange Commission
under the Securities Act, then CCG shall deliver to Seller $540,000 in cash on
March 31, 1998 in lieu of delivery of the Class B Preferred Stock.
5. INTEREST. On March 31, 1998, CCG shall deliver to Seller an amount of
cash equal to that amount of interest that would have accrued on a loan by
Seller to CCG in the principal amount of $540,000 using an annual interest rate
of 10 1/2 %, compounded annually.
<PAGE>
6. SUBORDINATION. All obligations of CCG and Buyer to deliver any cash
after the Closing Date pursuant to this Amendment shall be subordinate and
subject in right of payment, to the prior payment in full of all Indebtedness of
CCG and Buyer to the extent provided in one or more subordination agreements by
and among CCG and Buyer, Seller and the holder of the Indebtedness. For purposes
hereof, "Indebtedness" means the principal of, premium, if any, and interest
(including any interest accruing after the filing of a petition in bankruptcy)
on and other amounts due on or in connection with any indebtedness of CCG and
Buyer as defined in and arising under any loan, credit, security or similar
agreement with any bank, insurance company, or other commercial financial
institution, in any case whether arising prior to, on or after the Closing Date,
and all renewals, extensions, and refundings thereof. As a condition to CCG's
obligation hereunder to issue Class B Preferred Stock to Seller, Seller shall
have first executed and delivered in favor of CCG's senior lender such senior
lender's standard form of subordination agreement with respect to the Class B
Preferred Stock.
7. CLASS B PREFERRED STOCK. All Class B Preferred Stock promised to be
delivered pursuant hereto shall not be registered under the U.S. Securities Act
of 1933, as amended (the "Securities Act"). Seller covenants that it will not
sell or dispose of the Class B Preferred Stock except in accordance with the
rules set forth in Rule 144 issued by the Securities and Exchange Commission
under the Securities Act and shall not sell, transfer or pledge the Class B
Preferred Stock in the absence of a registration under the Securities Act or
unless CCG receives an opinion of counsel (which may be counsel for CCG)
reasonably acceptable to it stating that such sale or transfer is exempt from
the registration and prospectus delivery requirements of the Securities Act.
Seller agrees and consents that the certificates representing the Class B
Preferred Stock shall contain the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS CLEARVIEW CINEMA GROUP, INC. RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR CLEARVIEW CINEMA GROUP, INC.)
REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT AND
THAT SUCH SALE OR TRANSFER IS MADE IN ACCORDANCE WITH THE RULE SET FORTH
IN RULE 144 ISSUED BY THE SECURITIES EXCHANGE COMMISSION UNDER SAID ACT.
8. SECURITIES LAWS REPRESENTATION. Mr. Sayegh and Seller represent and
warrant to Buyer and CCG the matters set forth in this Section 8, and such
representations and warranties shall be deemed to be included within Article III
of the Asset Purchase Agreement. Mr. Sayegh and Seller acknowledge that they and
their representatives have received and reviewed all of the documents filed by
CCG through the date hereof with the Securities and Exchange Commission. Mr.
Sayegh and Seller and their representatives have had, at their discretion, an
opportunity to meet with the officers CCG to discuss CCG's business. Mr. Sayegh
and Seller are each acquiring the Class B Preferred Stock for his or its own
account with the intention of holding the Class B
2
<PAGE>
Preferred Stock for purposes
of investment, and not as a nominee or agent for any other party, and not with a
view to the resale or distribution of any of the Class B Preferred Stock, and no
Seller or Stockholder has any intention of selling the Class B preferred Stock
or any interest therein in violation of the federal securities laws or any
applicable state securities laws. Mr. Sayegh and Seller understand that the
Class B Preferred Stock are not registered under the Securities Act, or under
any state securities laws. Each of Mr. Sayegh and Seller is an "accredited
investor" within the meaning of that term as set forth in Rule 501 issued by the
Securities and Exchange Commission under the Securities Act. It shall be a
condition precedent to CCG's obligation to issue the Class B Preferred Shares
that the representation and warranty contained in this Section 8 be true and
correct on the date of issuance of the Class B Preferred Stock, and CCG shall
have been satisfied that the issuance of the Class B Preferred Stock shall be
exempt from registration under the Securities Act.
9. COOPERATION WITH FINANCIAL RECORDS. After Closing, Seller and Mr.
Sayegh shall cooperate with Buyer and CCG by providing CCG, Buyer and their
accountants and other representatives with whatever access and review of
Seller's financial records for each calendar quarter ending within the year
immediately prior to the Closing Date, as CCG, Buyer and their advisors deem
appropriate in order for CCG to make adequate financial disclosures to CCG's
stockholders and to the Securities Exchange Commission and to make adequate
financial disclosures in any filings by CCG with the Securities Exchange
Commission.
10. NO OTHER AMENDMENTS. Except as amended by the foregoing, the Asset
Purchase Agreement shall remain in full force and effect.
11. SUCCESSORS AND ASSIGNS. This Amendment and all the rights and powers
granted hereby shall bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns. This Amendment and the
rights, interests and obligations hereunder may not be assigned by any party
hereto without the prior written consent of the other parties hereto, except
that Buyer or CCG may make such assignments to any Affiliate of Buyer or CCG
provided that Buyer or CCG remain liable hereunder, and, further, Buyer and CCG
may collaterally assign their rights hereunder to Provident Bank or other
commercial lending institution. This Amendment shall be governed by and
construed in accordance with the laws of New Jersey without regard to its
conflict of law doctrines.
12. AMENDMENT AND WAIVER; CUMULATIVE EFFECT. To be effective, any
amendment or waiver under this Amendment must be in writing and be signed by the
party against whom enforcement of the same is sought. Neither the failure of any
party hereto to exercise any right, power or remedy provided under this
Amendment or to insist upon compliance by any other party with its obligations
hereunder, nor any custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by such party of its right to exercise any such
right, power or remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights and remedies
that they otherwise might have now or hereafter, at law, in equity, by statute
or otherwise.
13. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Amendment sets
forth all of the promises, covenants, agreements, conditions and undertakings
between the parties hereto with
3
<PAGE>
respect to the subject matter hereof, and supersede all prior or contemporaneous
agreements and understandings, negotiations, inducements or conditions, express
or implied, oral or written. This Amendment is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder, except
the provisions of SECTIONS 7.2 AND 7.3 relating to Buyer Indemnitees and Seller
Indemnitees and SECTION 8.10 of the Asset Purchase Agreement.
14. SEVERABILITY. If any term or other provision of this Amendment is held
by a court of competent jurisdiction to be invalid, illegal or incapable of
being enforced under any rule of Law in any particular respect or under any
particular circumstances, such term or provision shall nevertheless remain in
full force and effect in all other respects and under all other circumstances,
and all other terms, conditions and provisions of this Amendment shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Amendment so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
15. COUNTERPARTS.
This Amendment may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which together shall be deemed to
be one and the same instrument.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
JESSE SAYEGH
/s/ Jesse Sayegh
---------------------------------
MIDDLEBROOK GALLERIA CINEMAS, INC.
By: /s/ Jesse Sayegh
-------------------------------
Jesse Sayegh
Title: President
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
------------------------------
A. Dale Mayo
Title: President
CCC MIDDLEBROOK CINEMA CORP.
By: /s/ A. Dale Mayo
--------------------------
A. Dale Mayo
Title: President
<PAGE>
Exhibit A
CERTIFICATE OF DESIGNATIONS, PREFERENCES, RIGHTS
AND LIMITATIONS
OF
CLASS B NONVOTING CUMULATIVE REDEEMABLE PREFERRED STOCK
("Certificate of Designations")
OF
CLEARVIEW CINEMA GROUP, INC.
a Delaware corporation
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Clearview Cinema Group, Inc., a Delaware corporation (the
"Corporation"), certifies that pursuant to the authority contained in Section 4
of Article IV of its Amended and Restated Certificate of Incorporation dated
August 18, 1997 (the "Amended and Restated Certificate of Incorporation"), and
in accordance with the provisions of Section 151 of the General Corporation Law
of the State of Delaware, its Board of Directors has adopted the following
resolution creating a new class of its Preferred Stock, $.01 par value,
designated as Class B Nonvoting Cumulative Redeemable Preferred Stock:
RESOLVED, that a new class of authorized Preferred Stock of the
Corporation be hereby created and established, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such class, and the
qualifications, limitations or restrictions thereof are as follows:
(a) DESIGNATION AND AMOUNT. The shares of such class shall be designated
as "Class B Nonvoting Cumulative Redeemable Preferred Stock" (referred to herein
as, the "Class B Redeemable Preferred Stock") and the number of shares
constituting such class shall be 20,000.
(b) DIVIDENDS. The holder of each share of Class B Redeemable Preferred
Stock shall be entitled to receive on the 15th day of April, July, October and
January, or the next business day if such 15th business day is not a business
day (each such date being referred to herein as a "Dividend Payment Date"), out
of funds legally available for such purpose, and as declared by the Board of
Directors, cumulative quarterly cash dividends in a per share amount equal to
$.291667 for each day during which such share was outstanding during the
calendar quarter immediately preceding the Dividend Payment Date. In case the
Corporation shall (i) pay a dividend on the Class B Redeemable Preferred Stock
in shares of Class B Redeemable Preferred Stock, (ii) subdivide the outstanding
shares of Class B Redeemable Preferred Stock, or (ii) combine the outstanding
shares of Class B Redeemable Preferred Stock into a smaller number of shares,
the per share dividend rate in effect immediately prior thereto shall be
proportionately adjusted so that the aggregate dividend rate of all shares of
Class B Redeemable Preferred Stock immediately after such event shall equal the
aggregate dividend rate of all shares of Class B Redeemable Preferred Stock
immediately prior thereto. An adjustment made pursuant to this section shall
become effective (x) upon the effective date in the case of a subdivision or
combination or (y) upon the record date in the case of a dividend of shares.
Quarterly dividends shall be paid on the basis of 90 days in each full quarter
regardless of the number of actual days in each quarter, but dividends for less
than a full quarter shall be based on the actual number of days during which
each share is outstanding. Each dividend declared by the Board of Directors
shall be paid to
<PAGE>
the holders of shares of the Class B Redeemable Preferred Stock as such holders'
names appear on the stock books on the related record date. Such record date
shall be the last day of the calendar quarter immediately preceding the
applicable Dividend Payment Date. Dividends in arrears with respect to any past
Dividend Payment Date with respect to shares of Class B Redeemable Preferred
Stock may be declared by the Board of Directors and paid on the outstanding
shares of the Class B Redeemable Preferred Stock on any date fixed by the Board
of Directors, whether or not a regular Dividend Payment Date, to the holder of
the shares of the Class B Redeemable Preferred Stock on the related record date
fixed by the Board of Directors, which shall not be less than 10 nor more than
45 days before the date fixed for the payment of such dividend. Any dividend
payment made on shares of the Class B Redeemable Preferred Stock shall first be
credited against the dividends accrued with respect to the earliest Dividend
Payment Date for which dividends have not been paid. If full cumulative
dividends have not been paid or declared and set aside for payment on the shares
of the Class B Redeemable Preferred Stock, all cumulative dividends on the
shares of the Class B Redeemable Preferred Stock shall be declared and paid pro
rata to the holders of the outstanding shares of the Class B Redeemable
Preferred Stock entitled thereto, so that in all cases the amount of dividends
declared per share on the shares of the Class B Redeemable Preferred Stock bear
to each other the same ratio that accumulated dividends per share on all shares
of Class B Redeemable Preferred Stock bear to each other. No holder of shares of
Class B Redeemable Preferred Stock shall be entitled to any dividends, whether
payable in cash, property or stock, in excess of full cumulative dividends, as
provided in this section (b). No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment on the shares of Class B
Redeemable Preferred Stock that may be in arrears. Except as set forth above,
for so long as any shares of the Class B Redeemable Preferred Stock are
outstanding, no dividends may be paid or declared and set aside for payment or
other distribution made upon the Class A Convertible Preferred Stock, Common
Stock or any other stock of the Corporation ranking junior to the shares of the
Class B Redeemable Preferred Stock as to dividends ("Junior Stock"), nor may any
shares of Junior Stock be redeemed, purchased or otherwise acquired by the
Corporation for consideration (or any payment made to or available for a sinking
fund for the redemption of any shares of such stock), unless full cumulative
dividends on all shares of Class B Redeemable Preferred Stock for all Dividend
Payment Dates accruing on or prior to the date of such transaction have been or
contemporaneously are declared and paid through the most recent Dividend Payment
Date. If dividends are not paid on a Dividend Payment Date, then such dividends
shall accrue and be cumulative from and after such Dividend Payment Date.
Notwithstanding the foregoing, no dividends shall be paid or payable with
respect to any shares of Class B Redeemable Preferred Stock if such payment is
otherwise prohibited by section (h) of this Certificate of Designations or by
the Delaware General Corporation Law. Dividends with respect to shares of Class
B Redeemable Preferred Stock may also be subject to setoff and recoupment as
contemplated by section (k) hereof.
(c) LIQUIDATION RIGHTS. In the event of any Liquidation Event (as defined
herein), the holders of shares of Class B Redeemable Preferred Stock shall be
entitled to receive from the assets of the Corporation, whether represented by
capital stock, paid-in capital or retained earnings, payment in cash of an
amount equal to the aggregate Liquidation Value (as defined herein) of such
Class B Redeemable Preferred Stock, plus a further amount equal to any dividends
that have been (or, pursuant to Section (b) hereof, were required to have been)
declared on the Class B Redeemable Preferred Stock but which remain unpaid,
before any distribution of assets shall be made to the holders of the Class A
Convertible Preferred Stock, Common Stock, or other Junior Stock. If, upon such
Liquidation Event, the assets distributable to the holders of shares of Class B
Redeemable Preferred Stock shall be insufficient to permit the payment in full
to such holders of the preferential amounts to which they are entitled, then
2
<PAGE>
such assets shall be distributed ratably among the shares of Class B Redeemable
Preferred Stock. The "Liquidation Value" of each share of Class B Redeemable
Preferred Stock shall be equal to $1,000. In case the Corporation shall (i) pay
a dividend on the Class B Redeemable Preferred Stock in shares of Class B
Redeemable Preferred Stock, (ii) subdivide the outstanding shares of Class B
Redeemable Preferred Stock, or (ii) combine the outstanding shares of Class B
Redeemable Preferred Stock into a smaller number of shares, the "Liquidation
Value" in effect immediately prior thereto shall be proportionately adjusted so
that the aggregate Liquidation Value of all shares of Class B Redeemable
Preferred Stock immediately after such event shall equal the aggregate
Liquidation Value of all shares of Class B Redeemable Preferred Stock
immediately prior thereto. An adjustment made pursuant to this section shall
become effective (x) upon the effective date in the case of a subdivision or
combination or (y) upon the record date in the case of a dividend of shares.
After payment in full of the aggregate Liquidation Value and dividends, as set
forth above, to the holders of shares of Class B Redeemable Preferred Stock, the
remaining assets of the Corporation available for payment and distribution to
stockholders may be paid and distributed to the holders of the Class A
Convertible Preferred Stock, Common Stock and any other Junior Stock. For
purposes hereof, the term "Liquidation Event" shall mean any (A) merger or
consolidation other than a merger or consolidation in which persons who,
immediately prior to the closing of such transaction, were the holders of voting
securities of the Corporation having more than fifty percent (50%) of the voting
power of the outstanding voting securities of the Corporation (which includes
all Common Stock, all Class A Convertible Preferred Stock and all other voting
securities created in or under the Amended and Restated Certificate of
Incorporation) hold, immediately after such transaction, voting securities of
the surviving entity having more than fifty percent (50%) of the voting power of
the outstanding voting securities of the surviving entity, (B) sale of all or
substantially all of the assets of the Corporation, or (C) liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
(d) VOTING RIGHTS. Holders of shares of Class B Redeemable Preferred Stock
shall not be entitled to any voting rights except upon matters with respect to
which the holders of shares of Class A Convertible Preferred Stock, Class B
Redeemable Preferred Stock and Common Stock have separate voting rights as
expressly provided in this section (d), the Corporation's Amended and Restated
Certificate of Incorporation or as required by Delaware law. The affirmative
vote of the holders of more than fifty percent (50%) of the outstanding shares
of Class B Redeemable Preferred Stock, voting separately as a single class,
shall be required to authorize any amendment to this Certificate of Designations
or the Corporation's Amended and Restated Certificate of Incorporation if such
amendment would adversely affect the powers, preferences or rights of the Class
B Redeemable Preferred Stock.
(e) REDEEMABLE AT OPTION OF THE CORPORATION. The Corporation shall have
the right to redeem any one or more shares of Class B Redeemable Preferred Stock
at any time and from time to time at a redemption price of $1,000 per share plus
an amount equal to all unpaid dividends thereon, including accrued dividends,
whether or not declared, to the redemption date. Notice of any redemption of the
Class B Redeemable Preferred Stock shall be mailed at least 30 days prior to the
date fixed for redemption to each holder of Class B Redeemable Preferred Stock
to be redeemed, at such holder's address as it appears on the books of the
Corporation. In order to facilitate the redemption of the Class B Redeemable
Preferred Stock, the Board of Directors may fix a record date for the
determination of holders of Class B Redeemable Preferred Stock to be redeemed,
or may cause the transfer books of the Corporation to be closed for the transfer
of the Class B Redeemable Preferred Stock, not more than 20 days nor less than
10 days prior to the date fixed for such redemption. Whenever shares of Class B
Redeemable Preferred Stock are to be redeemed, the Corporation shall cause to be
mailed, within the time period specified in this section, a written notice of
redemption (a "Notice of Redemption") by first-class mail, postage prepaid, to
each holder of shares of Class B Redeemable Preferred Stock to be redeemed as
its
3
<PAGE>
name and address appear on the stock books of the Corporation. Each Notice of
Redemption shall state (i) the redemption date, (ii) the redemption price, (iii)
the number of shares of Class B Redeemable Preferred Stock to be redeemed and
identification (by certificate number, CUSIP number or otherwise) of the shares
of Class B Redeemable Preferred Stock to be redeemed, (iv) the place or places
where shares of Class B Redeemable Preferred Stock are to be surrendered for
payment of the redemption price, (v) that dividends on the shares to be redeemed
will cease to accumulate on such redemption date, and (vi) the provision of this
Certificate of Designations under which the redemption is being made. A Notice
of Redemption shall be deemed given on the day that it is mailed. On or after
the redemption date each holder of shares of Class B Redeemable Preferred Stock
that were called for redemption shall surrender the certificate evidencing such
shares, properly endorsed in blank for transfer or accompanied by proper
instruments of assignment or transfer in blank, and bearing all necessary
transfer tax stamps thereto affixed and cancel led, to the Corporation at the
place designated in the Notice of Redemption and shall then be entitled to
receive payment of the redemption price for each share. If fewer than all of the
shares are to be redeemed, the Corporation shall issue new certificates for the
shares not redeemed. If fewer than all of the outstanding shares of the Class B
Redeemable Preferred Stock are to be redeemed, the number of shares to be
redeemed shall be determined by the Corporation ratably, by lot or by holder or
by such other method as the Corporation shall deem appropriate. Solely for the
purpose of determining the number of shares of Class B Redeemable Preferred
Stock to be stated in a Notice of Redemption as subject to an optional
redemption, the amount of funds legally available for such redemption shall be
determined as of the date of such Notice of Redemption. The Corporation shall
declare and pay any and all dividends that are due or are in arrears prior to
any such redemption.
(f) REDEMPTION AT OPTION OF THE HOLDER. Each holder of shares of Class B
Redeemable Preferred Stock shall have the right to cause the Corporation to
redeem, and upon exercise of such right, the Corporation shall redeem, any
shares of Class B Redeemable Preferred Stock held by such holder at a redemption
price equal to its Liquidation Value plus an amount equal to all unpaid
dividends thereon, including accrued dividends, whether or not declared, to the
redemption date, at any time after the occurrence of any one or more of the
following events:
(i) the Corporation shall (A) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy or insolvency law of any
jurisdiction, (B) make an assignment for the benefit of its creditors, (C)
consent to the appointment of a custodian, receiver, trustee or other officer
with similar powers of itself or of any substantial part of its property, (D) be
adjudicated insolvent or be liquidated, or (E) take corporate action for the
purpose of any of the foregoing;
(ii) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Corporation, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property, or
if an order for relief shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up
or liquidations of the Corporation, or if any petition for any such relief shall
be filed against the Corporation and such petition shall not be dismissed within
60 days;
(iii) the date five years after the date such shares of shall
have been issued; and
(iv) within ten business days after the date of closing of the
issuance by the Corporation of debt securities aggregating at least $70 million
in an offering governed by Rule 144A issued by the Securities Exchange
Commission under the Securities Act of 1933.
4
<PAGE>
Notice of any such redemption of the Class B Redeemable Preferred Stock shall be
delivered in writing to the Corporation at least 10 business days prior to the
date fixed for redemption. The record date for the determination of holders of
Class B Redeemable Preferred Stock to be redeemed and the date that the
Corporation may cause the transfer books of the Corporation to be closed for the
transfer of the Class B Redeemable Preferred Stock, shall be the date of
redemption set forth in such written notice. The place or places where shares of
Class B Redeemable Preferred Stock are to be surrendered for payment of the
redemption price shall be the Corporation's executive offices. Dividends on the
shares to be redeemed will cease to accumulate on the redemption date. On or
after the redemption date each holder of shares of Class B Redeemable Preferred
Stock that were required to be redeemed shall surrender the certificate
evidencing such shares, properly endorsed in blank for transfer or accompanied
by proper instruments of assignment or transfer in blank, and bearing all
necessary transfer tax stamps thereto affixed and cancel led, to the Corporation
at its executive offices and shall then be entitled to receive payment of the
redemption price for each share. The Corporation shall declare and pay any and
all dividends that are due or are in arrears prior to any such redemption.
(g) RESTRICTIONS ON REDEMPTION. Notwithstanding the foregoing, no shares
of Class B Redeemable Preferred Stock may be redeemed if such redemption is
otherwise prohibited by section (h) of this Certificate of Designations or by
the Delaware General Corporation Law. Payments in respect of redemptions with
respect to shares of Class B Redeemable Preferred Stock may also be subject to
setoff and recoupment as contemplated by section (k) hereof.
(h) SUBORDINATION TO INDEBTEDNESS; RESTRICTIONS ON TRANSFER. All dividend
payments on and payments for redemptions with respect to shares of Class B
Redeemable Preferred Stock are subordinate and subject in right of payment, to
the prior payment in full of all Indebtedness of the Corporation to the extent
provided in one or more subordination agreements by and among the Corporation,
the holder of the Class B Redeemable Preferred Stock and the holder of the
Indebtedness. For purposes hereof, "Indebtedness" means the principal of,
premium, if any, and interest (including any interest accruing after the filing
of a petition in bankruptcy) on and other amounts due on or in connection with
any indebtedness of the Corporation as defined in and arising under any loan,
credit, security or similar agreement with any bank, insurance company, or other
commercial financial institution, in any case whether arising prior to, on or
after the date of issuance of the Class B Redeemable Preferred Stock, and all
renewals, extensions, and refundings thereof. The certificates representing
outstanding shares of Class B Redeemable Preferred Stock may contain a legend
referring to the subordination agreement or agreements among the Corporation,
the holder of the Class B Redeemable Preferred Stock and the holder of the
Indebtedness. If a holder shares of Class B Redeemable Preferred Stock has
entered into such a subordination agreement and the identity of the holder of
the Indebtedness subsequently changes, then the holder of the Class B Redeemable
Preferred Stock shall from time to time at the Corporation's request enter into
a new subordination agreement or agreements containing terms substantially
similar to the terms of such holder's then existing subordination agreement, and
if such holder fails to do so, then upon notice by the Corporation to such
holder, all dividend payments on and payments for redemptions with respect to
the shares of Class B Redeemable Preferred Stock held by such holder shall be
suspended. Also, if a holder of shares of Class B Redeemable Preferred Stock has
entered into such a subordination agreement, then such holder may not assign any
shares of Class B Redeemable Preferred Stock that are subject to such
subordination agreement unless and until the proposed assignee executes and
delivers a subordination agreement containing terms substantially similar to the
terms of such holder's then existing subordination agreement, and any attempted
transfer of shares of Class B Redeemable Preferred Stock without complying with
the terms hereof shall be null and void.
5
<PAGE>
(i) APPROVAL OF HOLDERS OF CLASS A CONVERTIBLE PREFERRED STOCK; INCREASE
IN AUTHORIZED SHARES; ADDITIONAL CLASSES OF PREFERRED STOCK. The issuance by the
Corporation of any shares of Class B Redeemable Preferred Stock shall first be
approved by the holders of the Class A Convertible Preferred Stock in the manner
and to the extent provided in the Corporation's Amended and Restated Certificate
of Incorporation. Subject to the rights of the holders of the Corporation's
Class A Convertible Preferred Stock as provided in the Corporation's Amended and
Restated Certificate of Incorporation, the Corporation may at any time and from
time to time increase the number of authorized shares of Class B Redeemable
Preferred Stock and create and issue any shares of any series or class of the
Corporation's Preferred Stock that have dividend and liquidation rights that are
senior to or pari passu with the Class B Redeemable Preferred Stock.
(j) REACQUIRED SHARES. Any shares of Class B Redeemable Preferred Stock
redeemed or purchased or otherwise acquired by the Corporation in any manner
whatsoever shall not be reissued as Class B Redeemable Preferred Stock and shall
be retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new class of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions or restrictions on issuance set forth herein.
(k) SETOFF RIGHTS. Shares of Class B Redeemable Preferred Stock may be
issued in connection with the acquisition by the Corporation or its subsidiaries
of certain businesses, and, notwithstanding anything else herein to the
contrary, payments of dividends on such shares of Class B Redeemable Preferred
Stock and payments in respect of redemptions of such shares of Class B
Redeemable Preferred Stock may be subject to the Corporation's rights of setoff
and recoupment to the extent and in the manner expressly set forth in any
agreement related to such acquisition. Any such right of setoff or recoupment
shall survive any transfer or assignment of such shares of Class B Redeemable
Preferred Stock.
IN WITNESS WHEREOF, Clearview Cinema Group, Inc. has caused this
Certificate of Designations, Preferences, Rights and Limitations of Class B
Nonvoting Cumulative Redeemable Preferred Stock to be duly executed by its
President and attested to by its Secretary and has caused its corporate seal to
be affixed hereto this __ day of _______, 199_.
CLEARVIEW CINEMA GROUP, INC.
By ______________________________
A. Dale Mayo, President
6
VOTING TRUST AGREEMENT
December 12, 1997
This VOTING TRUST AGREEMENT (this "Trust Agreement") is made by and
between the undersigned ("Stockholder") and A. Dale Mayo (the "Trustee").
Stockholder owns in the aggregate 62,500 shares (the "Stock") of the
common stock of Clearview Cinema Group, Inc., a Delaware Corporation (the
"Company").
In accordance with Section 218 of the General Corporation Law of the
State of Delaware, the Stockholder desires to enter into this Voting Trust
Agreement with respect to the Stock, and the Trustee is willing to accept the
voting rights in respect of the Stock and to serve as the voting trustee under
the terms and conditions hereof.
The parties hereto, intending to be legally bound hereby, agree as
follows:
1. Simultaneously with the execution and delivery hereof, the
Stockholder shall deliver the certificates representing the Stock, duly executed
for transfer, to Trustee to be held under this Trust Agreement.
2. (A) Promptly after the delivery required by paragraph 1, the
Trustee shall deliver the certificates representing the Stock to the Company for
transfer and shall cause the shares represented thereby to be transferred to his
name as Trustee under this Trust Agreement. The new certificates representing
the Stock registered in the name of the Trustee shall be delivered to the
Trustee by the Company, and the Trustee shall hold those certificates in his
custody.
(B) The Trustee shall hold the shares of the Stock transferred
to him hereunder, and all other shares of the common stock that the Stockholder
shall transfer to him, in trust for the purposes and subject to the terms and
conditions of the Agreement.
3. At the same time as the delivery by the Trustee of the
certificates to the Company in accordance with the provisions of paragraph 2,
the Trustee shall issue to the Stockholder a Voting Trust Certificate for the
number of shares of the Stock deposited by the Stockholder, which Voting Trust
Certificate shall be in substantially the following form:
<PAGE>
[Front Side]
CLEARVIEW CINEMA GROUP, INC.
(a Delaware corporation)
Certificate No. _____ _____ Shares
VOTING TRUST CERTIFICATE
THIS IS TO CERTIFY that, subject to the provisions hereof and
of the Trust Agreement as hereinafter defined,_________________, or
registered assigns, will be entitled to receive upon the termination of
the Trust Agreement, but only upon surrender of this certificate, a
certificate or certificates for _____ shares of common stock of Clearview
Cinema Group, Inc., a Delaware corporation (hereinafter called the
"Company"), or of any other corporation into which shares of common stock
of the Company shall have been reclassified or converted, or for which
they shall have been exchanged.
Until the expiration or termination of the Trust Agreement,
the undersigned Trustee shall pay or deliver all cash dividends, and
certain other distributions mentioned in the Trust Agreement, on or in
respect of the common stock from time to time held by the undersigned
Trustee thereunder, to the person who, on the record date for the
determination of stockholders entitled to receive the dividends and other
distributions, was the registered owner of this Voting Trust Certificate.
This certificate has been issued under and pursuant to the
provisions of a Voting Trust Agreement (the "Trust Agreement"), by and
between _____________, as a stockholder of the Company and A. Dale Mayo,
as Trustee, dated as of ___________, 1997, as the same may be amended from
time to time. The Trust Agreement more fully defines and sets forth the
rights and obligations of the owner and holder of this certificate and of
the Trustee and is incorporated in and made a part of this Voting Trust
Certificate with the same effect as if set forth in full.
Subject to any restriction contained on the reverse side of
this certificate, this Voting Trust Certificate is transferable by its
registered owner, in person or by duly authorized attorney, on the books
to be maintained for that purpose by the undersigned Trustee, upon the
terms and conditions provided in the Trust Agreement.
WITNESS THE DUE EXECUTION HEREOF on this ______ day of
____________, 199_.
________________________(SEAL)
A. Dale Mayo
Trustee under Voting Trust
Agreement, dated _______________, 1997.
2
<PAGE>
[Reverse side]
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or any
state Blue Sky or securities laws. These securities cannot be resold
without registration under such Act or applicable state securities
laws or an exemption therefrom.
4. The Voting Trust Certificate issued under this Trust Agreement
shall be transferable in the same manner, with the same effect, and subject to
the same restrictions as certificates for shares of the Stock. The Voting Trust
Certificate shall be transferable only at the principal executive office of the
Company or at any other place that the Company may maintain for its corporate
books and records.
5. The Trustee has no authority to sell or otherwise dispose of or
encumber any of the Stock.
6. The Trustee shall possess and be entitled, subject to the
provisions of this Agreement, to exercise all the rights and powers of an
absolute owner of all the shares of Stock deposited under this Trust Agreement,
including without limitation the right to receive dividends on the Stock
(subject to paragraph 7 below) and the right to vote, consent in writing, or
otherwise act with respect to any corporate or stockholders' action, to increase
or reduce the capital stock of the Company, to classify or reclassify any of the
shares as now or hereafter authorized into preferred or common stock or other
classes of stock with or without par value, to amend the Certificate of
Incorporation or by-laws of the Company, to merge or consolidate the Company
with other corporations, to sell all or any part of its assets, to create any
mortgage lien on any of its property, or for any other corporate act or purpose.
Except as otherwise provided herein, no voting right shall pass to others by or
under the Voting Trust Certificate or by or under this Trust Agreement or by or
under any agreement express or implied. All shares of Stock shall be voted as
directed by the Trustee and shall be deemed to be represented for the purposes
of determining a quorum.
7. (A) All dividends paid on the Stock from time to time held under
this Trust Agreement, except stock dividends, shall be remitted by the Trustee,
promptly upon receipt, to the person or persons who, on the record date for the
determination of stockholders entitled to receive the dividends, were the record
owners of the Voting Trust Certificates representing the shares on which the
dividends were declared.
(B) Dividends paid in shares of common stock of the Company
shall be retained by the Trustee and added to the Stock held under this Trust
Agreement. The Trustee shall promptly issue to the appropriate persons Voting
Trust Certificates representing any Stock that the Trustee shall receive as a
dividend and retain in accordance with the provisions of this paragraph 7. Those
Voting Trust Certificates shall be in the form as set forth in this Trust
Agreement, with any changes that are appropriate.
(C) All warrants or rights to subscribe to any class of voting
stock of the Company ("Warrants") that shall be received by the Trustee in
respect or on account of the Stock held under this Trust Agreement shall be
distributed by the Trustee to the holders of the Voting Trust Certificates in
the same manner as he is required to distribute cash dividends under this Trust
Agreement. If any voting stock is purchased by the Stockholder pursuant to the
Warrants, the Stockholder shall immediately deliver the certificates
representing all the shares of stock so purchased, duly executed for transfer,
to the Trustee to be added to the Stock held under
3
<PAGE>
the Trust Agreement. The Trustee shall promptly issue to the Stockholder Voting
Trust Certificates representing any Stock that shall be so delivered to and held
by the Trustee in accordance with the provisions of this paragraph 7. The Voting
Trust Certificates shall be in the form as set forth in this Trust Agreement,
with any changes that are appropriate. No sale or other transfer of any of the
Warrants shall be made without first offering the Company a prior opportunity to
purchase the Warrants for a reasonable amount.
8. The Stockholder, at any time from and after the date of this
Trust Agreement, must deposit any additional capital stock of the Company
purchased or owned by him (but not specifically described within the Trust
Agreement) with the Trustee and such Additional shares of Stock so deposited
shall become subject to all the terms and conditions of this Trust Agreement to
the same extent as if it were originally deposited under this Trust Agreement;
provided, however, that any shares of capital stock of the Company purchased by
such stockholder in a public market shall not be subject to this Voting Trust
Agreement.
9. (A) If, as the result of any split-up, combination or
reclassification of any Stock held by the Trustee under this Trust Agreement, or
as the result of any merger, consolidation, reorganization or sale of assets to
which the Company shall be a party, the Stock held by the Trustee under this
Trust Agreement shall be reclassified, converted into or become exchangeable for
any other securities, either of the Company or of any other corporation, the
Trustee shall exchange or surrender the Stock held by it for those other
securities and shall deliver the certificates evidencing the same to the Company
or other appropriate agency in exchange or surrender. The Trustee shall hold the
securities received upon the exchange or surrender for the purposes and upon the
same conditions as are provided in this Trust Agreement in respect of the shares
of the Stock.
(B) Upon any exchange or surrender, the Trustee may, if he
considers it to be advisable, issue new Voting Trust Certificates in lieu of and
in exchange for the outstanding Voting Trust Certificates. The Voting Trust
Certificates shall be in the form set forth in this Trust Agreement, with any
changes that are appropriate.
10. (A) The Trustee may serve as a director or officer of the
Company or any successor corporation, and he or any firm of which he may be a
member, or any corporation of which he may be a stockholder, director or
officer, may contract with the Company or any successor corporation, or be
pecuniarily interested in any transaction to which the Company or any successor
corporation may be a party, or in which it may be interested, as fully as though
he were not a Trustee.
(B) The Trustee shall not be liable to any stockholder or the
registered owner or holder of any Voting Trust Certificate for any error of
judgment or for any neglect, default, negligence (including gross negligence)
except for his own willful and deliberate malfeasance.
(C) The Trustee shall not receive any compensation for his
services as Trustee, and he shall not be required to give any bond or security
for the discharge of his duties as Trustee.
(D) The Trustee hereby accepts the trust hereunder, subject to
all the terms and conditions contained in this Trust Agreement, and he agrees to
exercise the powers and perform the duties of Trustee as set forth in this Trust
Agreement.
11. (A) The trust created by this Trust Agreement is expressly
declared to be irrevocable.
4
<PAGE>
(B) (i) This Trust Agreement shall terminate with respect only
to the shares of Stock that are sold by the Stockholder (a) pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, or (b) pursuant to the
registration rights granted to the Stockholder in the Registration Rights
Agreement. A termination of this Trust Agreement as to any shares of Stock sold
pursuant to clauses (a) or (b) of the preceding sentence shall not affect any
shares of Stock continuing to be owned by the Stockholder (the "Remaining
Shares"), and this Trust Agreement shall continue in force with respect to the
Remaining Shares until terminated pursuant to Paragraph 11(B)(ii).
(ii) This Trust Agreement shall terminate upon the
earlier of (a) the twentieth anniversary hereof, (b) written notice of
termination by the Trustee, or (c) the death of the Trustee.
(C) (i) In the event of any proposed sale of Stock pursuant to
clauses (a) or (b) of the first sentence of Paragraph 11(B)(i), the Stockholder
shall notify the Trustee of the proposed sale and of the number of shares to be
sold, and, upon receipt of (a) confirmation, in a form reasonably requested by
the Trustee, of the consummation of the sale and (b) the Voting Certificate(s)
representing the purchased Stock, the Trustee shall deliver or request that the
Company deliver to the purchaser stock certificates for the purchased Stock,
and, if necessary, shall deliver to the Stockholder a Voting Certificate for the
Remaining Shares.
(ii) In the event of termination of this Trust
Agreement pursuant to Paragraph 11(B)(ii), as soon as practicable after the
termination, the Trustee shall deliver to or upon the order of the registered
owners of the Voting Trust Certificates, and upon surrender thereof, the shares
of Stock represented thereby, together with any other shares of voting stock of
the Company subject to this Trust Agreement.
12. Any notice or other communication required or permitted by this
Trust Agreement to be given by any party hereto shall be in writing, and any
communication and payment or delivery of securities required to be made by any
party to any other party shall be sent by first class prepaid mail, certified or
registered, return receipt requested, addressed in the case of the Stockholder,
to the address that is provided by the Stockholder and, in the case of the
Trustee to:
A. Dale Mayo
7 Waverly Place
Madison, New Jersey 07940
or in any other manner as any party shall hereafter designate by notice to
the other party.
13. This Trust Agreement shall be legally binding upon, and shall
inure to the benefit of, the Stockholder and their respective heirs, legal
representatives, and permitted successors and assigns.
14. The validity and effectiveness of this Trust Agreement shall be
governed by, and its provisions shall be construed and enforced in accordance
with, the laws of the State of Delaware.
15. If, for any reason, any provision or part of this Trust
Agreement is held invalid, that invalidity shall not affect any other provision
or the rest of provision of this Trust Agreement, as the case may be, and each
provision or part shall, to the full extent consistent with law, continue in
full force and effect.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement as of the day and year first above written.
Stockholder:
Jesse Sayegh, Individually
/s/ Jesse Sayegh
-----------------------------
Jesse Sayegh
THE NEW BELLEVUE THEATER CORP.:
By: /s/ Jesse Sayegh
----------------------------
Jesse Sayegh
Trustee:
/s/ A. Dale Mayo
----------------------------
A. Dale Mayo
LEASE DATED DECEMBER 1997
BETWEEN
JESSE Y. SAYEGH, (LANDLORD)
AND
CCC BELLEVUE CINEMA CORP, (TENANT)
1. LEASED PREMISES. Subject to the exception and exclusions set forth below,
the leased premises, also referred to hereunder as The theatre premises"
or just "the premises," shall consist of the entire building known as 260
Bellevue Avenue, Upper Montclair, New Jersey, EXCEPT THAT the leased
premises shall not include leased store space (currently rented out to a
third party) on the ground floor and space on the second floor above it
served by a separate front entrance. In addition the leased premises shall
include the basement of the building but shall not include the basement
space serving the aforementioned excluded store space.
2. EASEMENTS, ACCESS, AND COMMON AREAS. The leased premises shall be subject
to whatever easements, access, or common area requirements are reasonably
required to preserve the character and rentability of said excluded lease
store space. The tenant's possession and use of the leased premises shall
also be subject to all public and private easements or rights of way,
whether recorded or not, as have been established by normal course use
with respect to the sidewalks, driveways and exterior portions of the
building and the land, paved or otherwise, on which the leased premises is
located, all of which exterior elements shall hereinafter be referred to
as "the exterior of the premises."
3. EXTERIOR OF THE PREMISES. The landlord shall retain possession and control
of the exterior of the premises and shall repair and maintain same,
including painting and snow and ice removal, at a cost to be allocated to
all the tenants of the building, as is also set forth herein elsewhere,
EXCEPT that tenant shall repair and maintain at its own expense the
marquee and any other signs it is otherwise permitted hereunder.
4. TENANT'S PROPERTY. The tenant shall retain the ownership of the tangible
personal property used by tenant in the operation of its business at the
leased premises, which property is agreed generally to consist of the
movie theatre equipment attached or affixed in some manner to the
building, and to include the seats, screens, projection booth equipment,
and concession stand counters and equipment, together with such other
tangible personal property as tenant owns and uses in the theatre
operation not in any way affixed or attached to the building, all of which
shall be referred to as in general as "tenant's theatre equipment and
fixtures." It is further agreed that the tenant's theatre equipment and
fixtures shall not include the building outdoor marquee or any other
exterior signs. The tenant shall be free at all times hereunder to pledge,
assign, or otherwise hypothecate its theatre
Page 1 12/11/97
<PAGE>
equipment and fixtures and otherwise deal with same subject to its other
obligations hereunder as to use, maintenance, alterations, and the
continuous operation of the theatre, all as is otherwise set forth
hereinafter.
5. LANDLORD'S PROPERTY. Notwithstanding the above and notwithstanding
tenant's rights to the possession and use of same and its repair and
restoration obligations with respect to same, all as is set forth
hereinelsewhere, it is agreed that the landlord shall at all times
hereunder retain the ownership of all building fixtures, components, and
systems not described above as tenant's property, including but not
limited to all heating, air conditioning, ventilation, plumbing, restroom
fixtures, and electric system components, and also including all building
improvements such as walls, doors, and theatre flooring and including the
theatre outdoor marquee and any other exterior signs, and that no pledge,
assignment, or other hypothecation permitted above for tenant's theatre
equipment and fixtures shall be deemed to or permitted to include or
create any lien or encumbrance on the aforesaid property of landlord.
6. PRORATA SHARE OF BUILDING COSTS. It is specifically agreed for purposes
of allocating any common area costs, exterior building maintenance,
property taxes, insurance, and any other charges called for hereunder to
be allocated between the tenant and any other tenants of the building,
(hereinafter also referred to as "building costs") that the theatre tenant
hereunder will be responsible for 94.8% (ninety-four point eight percent)
of building costs as are incurred by the landlord, the details of which
are set forth hereinelsewhere below. The 94.8% (ninety-four point eight
percent) set forth above shall hereinafter also be referred to as "the
tenant's prorate share."
7. USE. The leased premises shall be used and occupied only and for no other
purpose than as a theater for the presentation of performances on film.
Tenant shall not exhibit any X-rated motion pictures at the leased
premises. In addition the tenant shall be permitted, but only through its
own employees for its own account, to sell candies, confections,
beverages, popcorn, food products, souvenir programs, souvenir books,
cigarettes and tobacco (if permitted by law) and such merchandise,
novelties, records, compact disks, videos, and tapes on or from the
premises, but only incidental to the exhibition of motion pictures. In
addition the tenant shall be permitted, but only through its own employees
for its own account, to use the premises for private parties, but only
incidental to the exhibition of motion pictures. In addition the tenant
shall be permitted, but only through its own employees for its own
account, to sell on screen or on premises advertising to third parties.
8. FIXED MINIMUM RENT. The tenant agrees to pay a fixed minimum rent, also
called "base rent," in the annual totals and the monthly payment amounts,
as appear below as part of paragraph 6 of this rider. All fixed minimum
rents and any other rent due hereunder are payable, unless stated
otherwise hereunder, in advance upon the first day of each calendar month
of the tenancy at the office of the landlord, or such other place as the
landlord may from time to time designate. All rents of any kind due
hereunder are payable without set-off or deduction of any kind.
Page 2 12/11/97
<PAGE>
9. ADDITIONAL PERCENTAGE RENT. The tenant also agrees to pay to landlord as
rent, in addition to the foregoing fixed rent, a percentage rent equal to
10% (ten percent) of the annual gross sales (as defined below) of the
leased premises in excess of the base gross sales amounts, payable annual,
all as is set forth below: Annual gross sales used as the base gross sales
amounts shall also be referred to as the gross sales "breakpoint."
<TABLE>
<CAPTION>
FIRST 5 YEARS:
Number of On Lease Fixed "Base" Fixed "Base" Gross sales
Lease year year ending rent rent base for %rent % rent over
completed November 30 (Annual) (Monthly) ("Breakpoint") base
- --------- ----------- -------- --------- -------------- ----
<S> <C> <C> <C> <C> <C>
1 1998 $100,000 $8,333.33 $1,000,000 10%
2 1999 $100,000 $8,333.33 $1,000,000 10%
3 2000 $100,000 $8,333.33 $1,000,000 10%
4 2001 $100,000 $8,333.33 $1,000,000 10%
5 2002 $100,000 $8,333.33 $1,000,000 10%
</TABLE>
SECOND 5 YEARS (BEGINNING DECEMBER 1, 2002 AND ENDING NOVEMBER 30, 2007.)
The fixed annual and monthly rent for the second five years will be equal
respectively to the average annual and monthly total rent (base and percentage
rent) paid over the first 5 years, so that, by way of example, if the actual
annual gross sales were $1,100,000 each year of the first 5 years, then the base
annual rent for the second 5 years would be $110,000 and the gross sales base
for percentage rent for the second five years will be $1,100,000. If, to change
the above example slightly, the sales in the 5th year were $1,600,000 instead of
$1,100,000, then the base annual rent in the second 5 years would be $120,000
and the gross sales base for percentage rent for the second 5 years would be
$1,200,000.
A percentage rent of 10% of the annual gross sales in excess of the gross sales
base for each year of the second five years will also be due annually, the same
as is set forth above for the first 5 years for percentage rents.
THIRD 5 YEARS (BEGINNING DECEMBER 1, 2007 AND ENDING NOVEMBER 30, 2012.)
The fixed annual and monthly rent for the third 5 years will be equal
respectively to the average annual and monthly total rent (base and percentage
rent) paid over the second 5 years, calculated the same as is shown by the
examples set forth above for the first 5 years.
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<PAGE>
A percentage rent of 10% of the annual gross sales in excess of the gross sales
base for each year of the third five years will also be due annually, the same
as is set forth above for percentage rents.
FOURTH 5 YEARS (BEGINNING DECEMBER 1, 2012 AND ENDING NOVEMBER 30, 2017.)
The fixed and percentage rent for the fourth 5 years will be the greater of:
(a) A fixed annual and monthly rent equal respectively to the average
annual and monthly total rent paid over the third 5 years, calculated the
same as set forth, by example, above, together with percentage rent of 10%
of the annual gross sales in excess of the gross sales base for each year
of the fourth five years, also be due annually, the same as is set forth
above for percentage rents, or
(b) a fixed annual and monthly rent and an annual percentage rent set
forth on the following table:
<TABLE>
<CAPTION>
Number of On Lease Fixed "Base" Fixed "Base" Gross
Lease year year ending rent rent sales base % rent over
completed November 30 (Annual) (Monthly) for %rent base
- --------- ----------- -------- --------- --------- ----
<S> <C> <C> <C> <C> <C>
16 2013 $125,000 $10,416.67 $1,250,000 10%
17 2014 $125,000 $10,416.67 $1,250,000 10%
18 2015 $125,000 $10,416.67 $1,250,000 10%
19 2016 $125,000 $10,416.67 $1,250,000 10%
20 2017 $125,000 $10,416.67 $1,250,000 10%
</TABLE>
FIRST 10 YEAR OPTION BEGINNING DECEMBER 1, 2017
The fixed and percentage rent for the first 10 year option period will be the
greater of:
(a) A fixed annual and monthly rent equal respectively to the average
annual and monthly total rent paid over the 5 years immediately prior to
the start of the option period, calculated the same as set forth, by
example, above, together with percentage rent of 10% of the annual gross
sales in excess of the gross sales base for each year of the option
period, also due annually, the same as is set forth above for percentage
rents, or
(b) a fixed annual and monthly rent and an annual percentage rent set
forth on the following table:
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<PAGE>
<TABLE>
<CAPTION>
Number of On Lease Fixed "Base" Fixed "Base" Gross
Lease year year ending rent rent sales base % rent over
completed November 30 (Annual) (Monthly) for %rent base
- --------- ----------- -------- --------- --------- ----
<S> <C> <C> <C> <C> <C>
All years $175,000 $14,583.33 $1,750,000 10%
</TABLE>
SECOND 10 YEAR OPTION BEGINNING DECEMBER 1, 2027
The fixed and percentage rent for the second 10 year option period will be the
greater of:
(a) A fixed annual and monthly rent equal respectively to the average
annual and monthly total rent paid over the 5 years immediately prior to
the start of the option period, calculated the same as set forth, by
example, above, together with percentage rent of 10% of the annual gross
sales in excess of the gross sales base for each year of the option
period, also due annually, the same as is set forth above for percentage
rents, or
(b) a fixed annual and monthly rent and an annual percentage rent set
forth on the following table:
<TABLE>
<CAPTION>
Number of On Lease Fixed "Base" Fixed "Base" Gross
Lease year year ending rent rent sales base % rent over
completed November 30 (Annual) (Monthly) for %rent base
- --------- ----------- -------- --------- --------- ----
<S> <C> <C> <C> <C> <C>
All years $200,000 $16,666.67 $2,000,000 10%
</TABLE>
Tenant's obligations respecting percentage rents and related matters shall
also include the following:
a) On or before the 25th day after the expiration of each three-month's
period, tenant shall submit to landlord a statement signed by an
officer of tenant showing, in reasonable detail, the amount of gross
sales (as defined below) in, at, on, or from the leased premises
during the preceding three-month period. Within thirty (30) days
after the end of each lease year, tenant shall deliver to landlord a
statement of gross sales (as defined below) made in, at, on, or from
the leased premises for such lease year, bearing the certification
of an officer of tenant that the statement truly reports tenant's
gross sales (as defined below). Tenant shall simultaneously with the
delivery of said statement, make payments of any percentage rent due
for such lease year.
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b) Each lease year, except the first lease year, shall begin on the
first day of December of the year in question and end on the last
day of November of the next succeeding calendar year.
c) Each lease year during the term hereof shall be considered as an
independent accounting period for the purposes of computing and
determining the amount of percentage rent if any payable hereunder.
The amount of gross sales in any lease year shall not be carried
over into any other lease year.
d) The first lease year shall begin on the date (in November 1997)
when the landlord turns possession of the leased premises over to
the tenant. The parties will at that time calculate the fixed rent
due at $273.97 per day ($100,000/365) to be paid by the tenant in
advance for November. The gross sales for any time in November 1997
when the tenant is in possession of the leased premises shall be
added on to gross sales for the 12 months ending November 30, 1998,
and the fixed rent paid for any portion of November, 1997, shall be
added to the gross sales base for year number 1 in the table
appearing above and the additional percentage rent due on or before
December 31, 1998 shall be calculated accordingly to include a
percentage rent on gross sales for November 1997 as well as on the
12 months ending November 30, 1998.
e) The term "gross sales" shall in general mean and include all
revenues received from or generated by any use of the premises that
is permitted hereunder and Gross sales" shall in all events include
and be defined to include all gross paid box office receipts,
including the amounts actually paid by patrons of all of the
theaters at the leased premises for admission thereto, less any
admissions taxes paid by such patrons included in the admission
prices and which taxes are to be transmitted to any governmental
authority or collector entitled to receive payment thereof.
(However, tenant shall not deduct any corporate income, gross
receipts or franchise or property tax imposed on tenant or its
income in determining gross box office receipts.) "Gross sales"
shall also include any amounts received for passes for admission to
the said theaters "Gross sales" shall also include money received
from the sale of candies, confections, beverages, popcorn, food
products, souvenir programs, souvenir books, cigarettes, tobacco and
such merchandise, novelties, records, compact disks, videos, and
tapes on or from the premises, including any admissions or other
revenues generated from or on the premises or from their use for any
private parties such as birthday parties for children or private
screenings and gross sales shall also include any revenues generated
by onscreen or on premises advertising time or space sold or
permitted by tenant on or about the premises. There shall be
excluded from gross sales any sums collected and paid out for any
sales tax or tax based upon the sale or sales of merchandise and
required by law, whether now or hereafter in force to be paid by a
seller or collected from
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its customers to the extent that such taxes are to be charged
separately and to be remitted by seller or seller's agent to the
taxing authorities.
f) Tenant shall and hereby agrees to keep in the leased premises during
the term thereof, for a period of two (2) consecutive years
following the end of each lease year, a permanent, complete and
accurate record of all gross sales of merchandise and services, as
heretofore defined, and all revenue derived from business conducted
on or from the leased premises for such lease year. The tenant
further agrees to keep, retain and preserve for at least one (1)
year after the expiration of each lease year all original sales
records and all original sales records and sales slips or sales
records and all original sales records and sale slips or sales
checks and other pertinent original sales records from any use of
the premises and to install and use exclusively accurate
non-reset/able cash registers or other modern systems within the
leased premises which shall show, record and preserve, in complete
detail, all items making up any revenues or receipts generated at or
from the premises, whether contended by tenant to be gross sales as
defined above or not. All such records, including sales tax reports
and business and occupation tax reports, shall be open to the
inspection and audit of landlord and its agents at all reasonable
times during ordinary business hours, excluding only those tax
returns prepared on a consolidated basis with any other operation
not subject to this lease.
g) The tenant shall also submit to landlord on or before the thirtieth
(30th) day following the end of each lease year at the place then
fixed for the payment of rent, a complete audited statement made and
certified by duly authorized officer of tenant, showing accurately
and in reasonable detail the amount of gross sales made by tenant,
and its subleases, concessionaires, or licensees, if any are
permitted-- see hereinafter below--, upon, within, from or at the
leased premises during the preceding lease year or fractional lease
year, if any, and shall submit on or before the 30th day following
the expiration or termination of the term a like statement covering
the preceding lease year, or fractional lease year, if any.
h) The receipt by landlord of any statement or any payment of
percentage rent for any period or the failure of landlord to make an
audit for said period shall not bind landlord as to the correctness
of the statement or the payment, nor bar landlord from collecting at
any time thereafter the percentage rent due for said period. If any
audit by landlord or its agents of tenant's records shall reveal a
deficiency in any payment of percentage rent, tenant shall forthwith
pay to landlord the amount of the deficiency together with interest
at the rate of twelve (12%) percent per annum from the date when
said payment should have been made, together with the reasonable
cost of such audit.
i) It is agreed that nothing contained in this Lease shall be deemed or
construed as creating a partnership or joint venture between
landlord and tenant, or between landlord and
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<PAGE>
any other party, or cause landlord to be responsible in any way for
the debts or obligations of tenant, or any other party, and neither
party shall hold out to any person that any such partnership or
joint venture exist between the leased premises and the tenant.
j) The tenant shall not, without the prior express written consent of
the landlord, which consent shall not be unreasonably withheld,
authorize, license, sub-let, grant any concession, or otherwise
permit any use of the premises to any person or entity, which allows
the person receiving the license, sublet, or grant, etc., to
commercialize the premises or any part of same, even if such use is
otherwise permitted under this lease and all such uses as are
permitted by this lease are permitted only to the tenant.
NOTWITHSTANDING the above, the tenant expressly agrees that any
consent of the landlord to any such license, sub-let, grant etc.,
hereunder shall require and be deemed to require that the person or
entity receiving such license, sub-let, or grant, etc., shall submit
and agree to the same terms and definitions as are set forth above
all to the extent necessary so that the said person or entity shall
owe a percentage rent of 10 % of its gross sales to the landlord and
so that the gross sales of said person or entity from, by, or at the
premises, shall be also deemed hereunder to be the gross sales of
the tenant, as and when earned or realized by said person or entity,
and so that both the tenant and said person or entity shall be
jointly and severally liable to the landlord for the payment of
additional percentage rent due on same.
k) In the event that there are any gross sales or other revenues earned
or realized by the tenant or any person or entity acting under a
license, sub-let, or grant, etc., as is set forth above BUT WITHOUT
THE CONSENT OF THE LANDLORD and/or there are any gross sales or
other revenues generated, earned, or realized by the tenant at,
from, or on the premises, by a use of the premises NOT PERMITTED BY
THIS LEASE, then notwithstanding that same has been a breach of this
lease by the tenant, the tenant shall nonetheless have the same
additional percentage rent obligations as are set forth in this
lease and rider with respect to said gross sales or other revenues
as though said gross sales or other revenues were permitted
hereunder and said gross sales or other revenues shall be added to
any reports otherwise called for, records kept with respect to same,
and 10% of same will be due to the landlord, all as though they were
consented to hereunder.
8. CONTINUOUS OPERATION. Tenant shall, during the term of this Lease,
continuously use the demised premises for the purpose stated in this
Lease, carrying on therein Tenant's business undertaking diligently,
assiduously and energetically, including both the showing of motion
picture films and also including the operation of a food concession stand
as is customarily provided at movie theatre operations. Tenant shall keep
the premises open and available for business activity therein during all
usual days and hours for theatres except when
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prevented by strikes, fire, casualty or other causes beyond Tenant's
reasonable control.
9. ALL PAYMENTS UNCONDITIONAL. Tenant will pay all rent and additional rents
when due, without any setoff or deduction whatsoever. Any payment to or
receipt thereof by Landlord of any amount less than the full amount to
which Landlord claims it is entitled shall not be a waiver of any kind, or
a settlement or satisfaction of the rents or other amounts claimed due,
notwithstanding any statement or condition on any paper accompanying the
payment or on any check or payment instrument even if same is endorsed by
landlord, but Landlord shall be deemed to have accepted said payment
without prejudice to all rights landlord may have to collect the full
balance claimed due, as well as to have maintained all other rights
available to landlord by law and under this lease agreement, and not to be
subject to the condition offered with the payment, unless by separate
writing the landlord expressly agrees to accept the condition or make the
waiver or settlement claimed.
10. HOLDOVERS. In the event the Tenant does not surrender the premises at the
end of the term of this lease but holds over without the prior written
consent of landlord, Tenant shall be obliged to perform all of the
obligations of the Tenant as are stated throughout this lease except that
the fixed rent and additional percentage rent shall be double the amount
and percentage obligations called for and the percentage rent shall be due
monthly on a prorated monthly basis and the tenant shall also be liable to
landlord for all such damages as the law shall allow.
11. ALL RENTS DUE IF TENANT QUITS PRIOR TO END OF TERM. In the event that
Tenant, without written consent of Landlord, vacates demised premises
before expiration of said term, all fixed rent and all additional rents
and charges, including percentage rent for the current term, prorated for
the portion of the lease year then remaining, shall then and thereupon
become at once due and payable as if originally so provided herein.
Notwithstanding that the entire unpaid rent called for will be due and
owing, the tenant shall receive offsets for any funds received by the
landlord in mitigation of landlord's damages, but only if and when and as
such funds in mitigation of landlord's damages are actually received by
the landlord.
12. LEASE PROVISIONS NOT TO BE STRICTLY CONSTRUED TO DETRIMENT OF LANDLORD.
This lease shall not be construed against the Landlord, but rather shall
be fairly and reasonably interpreted as having been mutually agreeable to
all parties all of whom had equal bargaining strength and the
representation of counsel.
13. LEASE REMEDIES CUMULATIVE. No remedy or election given by an provision in
this lease shall be deemed exclusive unless so indicated, but each shall,
wherever possible, be cumulative with all other remedies in law or equity
unless otherwise specifically provided.
14. LIMITED LIABILITY OF LANDLORD. Tenant agrees that the liability of
landlord under this lease and all matters pertaining to or arising out of
the tenancy and the use and occupancy of the demised premises shall be
limited to landlord's interest in the building of which the demised
premises forms a part, and in no event shall tenant
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make any claim against or seek to impose any personal liability upon any
individual, general or limited partner of any partnership, or principal of
any firm or corporation or member of any company that may now be or
hereafter become the landlord.
15. COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS. Tenant at all times
shall comply, at tenant's sole cost, with all provisions of all
environmental protection laws as are applicable to tenant and tenant will
at no time use the leased premises in any way that creates liabilities or
incurs any cost or increase in cost for the landlord on account of any
environmental law or regulation, including but not limited to the
industrial site Recovery Act (ISRA). N.J.S.A. 13:1 Keg et seq. and the
regulations promulgated thereunder. Tenant shall -- --- indemnify, defend
and save harmless landlord from liability from all fines, suits,
procedures, claims and actions of any kind, including all reasonable
attorneys' fees and costs of experts arising from or relating to any act
of the tenant in violation of tenant's obligations agreed to hereinabove.
The tenant agrees to provide the landlord, at no cost to landlord, such
estoppel certificates and affidavits as are requested by landlord as to
the non use of any hazardous substances in violation of the tenant's
obligations hereunder and as to any other such matter as is reasonably
requested by landlord with respect to the tenant's obligations hereunder.
The tenant's obligations hereunder shall survive any termination of this
lease.
16. SUBORDINATION TO MORTGAGES. Notwithstanding the subordination of this
lease to any mortgage as is set forth hereinelsewhere, the tenant's right
to possession of the premises shall not be disturbed if the tenant is not
in default under this lease and as long as the tenant shall attorn to and
pay the rents and other amounts required to be paid, to the landlord or to
the landlord's successor in interest as same are due pursuant to the terms
hereof, whatever the case may be, provided only that the Lease is not
otherwise terminated pursuant to its terms.
17. DOCUMENTS REQUIRED IN A CONDEMNATION. If tenant shall fail to execute
such instruments as may be required to landlord under paragraph 12th of
the lease, or to undertake such steps as may be requested as therein
stated, within ten (10) days of written notice from landlord, landlord
shall be deemed the duly authorized irrevocable agent and attorney-in-fact
of tenant to execute such instruments and undertake such steps in as
herein stated in and on behalf of tenant. It is agreed and understood,
however, that landlord does not reserve to itself, and the tenant does not
assign to landlord, any damages payable for trade fixtures installed or
purchased by tenant at its own cost and expense and which are not part of
the realty, also referred to hereinelsewhere as the tenant's property.
Notwithstanding anything herein to the contrary, landlord shall allocate
to tenant out of landlord's condemnation award an amount reasonably
related to tenant's fair share of any alterations permitted hereinafter.
If the parties cannot agree on the amount to be allocated to tenant at
such time, this issue shall be submitted by the parties to arbitration for
resolution. Nothing herein contained shall prevent tenant from pursuing
any separate relocation assistance award to which tenant is entitled under
applicable law.
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18. BUILDING REGULATIONS. The landlord reserves the right from time to time
to promulgate and/or revise such reasonable building regulations as he
shall, in his sole good faith discretion, see fit with regard to access
and common areas, etc., of the building of which the leased premises form
a part. The tenant agrees to comply with all such reasonable regulations
on notice to him. No such rule or regulation shall restrict the access of
the public to the theatre or theatre facilities without the prior consent
of the tenant, which shall not be unreasonably withheld.
19. OTHER TENANTS ACTS. Notwithstanding any provisions of this lease to the
contrary, the landlord shall not have any liability to the tenant, for
damages or otherwise, on account of any violation of any such regulations
nor on account of any violations of any provision of any lease or
agreement with any other tenants of the building.
20. ASSIGNMENT OR SUBLET. The landlord's consent to an proposed assignment or
sublet shall not be unreasonably withheld, provided first that:
a) All covenants, agreements, and obligations of the lease imposed on
the tenant shall have been fully complied with and current at the
date landlord's consent is requested, and no breach thereof can be
anticipated.
b) The proposed assignee/subtenant establishes to the landlord, to a
reasonable certainty, that he has the business, legal, and financial
ability to perform satisfactorily all of the tenant's obligations
under the lease.
c) In the event such assignment or sublet is permitted, the same shall
be evidenced in writing, properly executed and acknowledged by both
assignee/subtenant and assignor, in which writing the
assignee/subtenant shall expressly accept, assume and agree to
perform for landlord's benefit all the terms, conditions and
limitations contained in the lease.
d) It is further understood that in the event of any assignment or
sublet of the premises, the tenant assigning or subletting the lease
(the "original tenant") shall NOT be relieved or discharged from the
performance of any covenants, agreements or obligations imposed on
any tenant under the lease and the original tenant shall stand as
co-obligor, co- and jointly liable with any new tenant (assignee or
subtenant), with respect to all covenants, agreements, liabilities
and obligations whatsoever imposed by the lease on any tenant,
including the obligations of tenant under any renewal term EXCEPT
that tenant's liability under this sub-paragraph shall cease upon
the end of the fifth year from the date of any assignment or sublet
permitted hereinabove PROVIDED the lease is then current as to all
tenant obligations.
e) The tenant shall pay to landlord, as additional rent, the reasonable
costs and fees incurred by landlord in reviewing any request by
tenant for landlord's consent hereunder.
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Any transaction involving tenant such that there is a change in the voting
control of the tenant will be deemed an assignment of this lease requiring
the consent of the landlord and subject to the above.
21. RIGHT OF FIRST REFUSAL AFTER BANKRUPTCY, ETC. In the event that there
is any transfer by operation of law of the tenant's interest in this lease
as may occur by the filing of any petition in bankruptcy or other
insolvency proceeding, or if there is any such filing and the tenant
remains a debtor in possession, then the landlord shall have the right of
first refusal to meet the terms of any offer of purchase of the tenant's
interest in this lease and to additionally purchase any of tenant's
theatre equipment and fixtures, as are described hereinelsewhere above, as
may be subject to any proposed offer of purchase. The terms of landlord's
right of first refusal hereunder are as appear on Exhibit B. attached. The
granting of this right of first refusal shall not be a waiver by the
landlord of any right he may otherwise have to terminate the lease in the
event of any default nor shall it be a waiver by landlord of any other
rights or remedies he may have under this lease, but it shall be a right
he shall have in addition to any such other rights and remedies. Any
purchase he shall make pursuant to his right of first refusal shall not be
a waiver of or otherwise reduce any amount which tenant may otherwise owe
to landlord hereunder.
22. LATE CHARGE. Tenant shall pay to landlord a sum equal to 5% (five per
cent) of any rental payment and/or any other payment as set forth and due
hereunder as a late charge for any such payment not received by the
landlord within 10 (ten) days of the date same shall become due.
23. INCREASED SECURITY DEPOSIT. The parties acknowledge that the security
required herein is equal to 2 (two) months monthly fixed rent. As the
monthly fixed rents increase according to the terms hereof, the security
shall be increased accordingly, without demand by the landlord for same,
and such additional security shall be due and payable with the first
payment of any increased monthly fixed rent called for hereunder.
24. REPAIRS AND MAINTENANCE BY TENANT. The Tenant shall at its sole cost be
responsible for all interior maintenance and repair of the premises,
including the maintenance and repair of all interior building components,
walls, windows, floors, rest rooms, fixtures, equipment, improvements, and
systems, including all heating, ventilating, air conditioning, electric,
gas, plumbing, or other systems serving the building (excluding only
structural repairs to load bearing walls and repairs to the roof, and
further excluding such of the abovementioned as is otherwise in the
exclusive possession and control of the tenant of the store premises, all
as hereinelsewhere noted), and including all of the tenant's theatre
equipment and fixtures, and without limiting the above, the tenant agrees
at its sole cost to:
a) Maintain all such equipment, fixtures, improvements, systems, etc.,
as abovementioned, regardless of whether same is the property of the
tenant
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or not, in good repair, painted, and in a sanitary, neat and clean
appearance, free of any infestation
b) Maintain and use all plumbing, electric, and other facilities safely
and in the way for which they were intended
c) Promptly notify the Landlord of conditions which need repair beyond
routine maintenance and promptly execute repairs which are the
responsibility of the Tenant.
In addition to the above the tenant shall be responsible for, at tenant's
sole cost, and the tenant shall promptly perform or see to the maintenance
of the marquee and other exterior signs utilized by tenant and for the
condition of the sidewalks serving the building other than, but
supplementing, the snow and ice removal services contracted for by
landlord, as is set forth below. It shall be the tenant's obligation to
provide though its own employees such additional and ancillary snow and
ice removal from the sidewalk and exterior areas serving the theatre as
shall be reasonable and necessary to provide safe passage for persons
using same.
25. LITTER AND TRASH REMOVAL. In addition to the above, the tenant shall avoid
littering on the building grounds, including but not limited to any
littering by the Tenant's employees, agents, customers, or other invitees
or licensees and the tenant shall be responsible for proper disposal of
its garbage, trash, debris, end product, by product or other waste, etc.
in a proper manner, complying with all applicable municipal or building
rules and regulations, with respect to same and not permit the blowing or
release of litter or rubbish from the premises or from tenant's trash
containers or the spoilage of any trash therein and position same on the
premises so as not to obstruct any other permitted use of premises.
26. REPAIRS AND MAINTENANCE BY LANDLORD AT LANDLORD'S COST. At landlord's own
cost, unless the need for said repairs was caused by tenant's misuse, or
the misuse of any of its agents, employees, representatives, visitors,
deliverymen, customers, invitees, or licensees., the landlord shall
maintain and make all structural repairs to loadbearing walls of the
building. The landlord shall have no other repair or maintenance costs
that it shall bear.
27. REPAIRS AND MAINTENANCE BY LANDLORD AT A COST TO BE ALLOCATED. At a cost
to be allocated 94.8% (ninety four point eight percent) to tenant as is
set forth hereinelsewhere above, the landlord will make all repairs and do
all maintenance required for the exterior of the building of which the
leased premises are a part, including painting and roof repairs and
including sidewalk snow and ice removal contracting as is set forth below
and also including all driveway, parking, or other blacktop replacement
and repairs, but excluding the marquee and other tenant signs, The
landlord shall be deemed to discharge his obligations for the above and
for any repair and maintenance obligations he has under this lease if he
shall engage the services of any reputable independent contractor
regularly engaged in providing the services requested. The landlord shall
have no liability to the tenant for any failure or negligence of any
contractor to fulfill his
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contractual obligations to the landlord, but the tenant shall and is
hereby deemed to be an intended third party beneficiary of any contract
with any such third party. The cost of any such contract with any third
party shall be allocated to the tenant, as is set forth above, but the
landlord shall not be entitled to any override or overhead charges
associated with any of the landlord's repair and maintenance obligations
as are performed by third parties and the landlord shall pass on to
tenant, to be allocated as is set forth below, only the actual cost to
landlord of discharging said obligations.
28. HEAT AND UTILITIES. The tenant shall supply its own heat to the building
and keep the heating system and other systems providing same in good
working order. THE TENANT HEREBY AGREES THAT IT WILL CONTINUE TO SUPPLY
HEAT AND COLD WATER FOR THE ENTIRE BUILDING AS SAME IS REASONABLY
REQUIRED, INCLUDING HEAT AND COLD WATER AS MAY BE USED OR REQUIRED BY THE
TENANT OF THE STORE PREMISES NOT PART OF THE LEASED PREMISES HEREUNDER.
The landlord agrees to reimburse the tenant 5.2% (five point two percent)
of the costs of supplying same as are paid by tenant to third party
utilities, as same are submitted by tenant to landlord, in any reasonable
manner as the parties work out. The parties acknowledge that the boiler
providing heat to the non-theatre store premises heats only those premises
but is located n the basement of the building otherwise part of the leased
theatre premises. The tenant will have no obligation to maintain said
boiler, but the tenant shall allow access to same, at all times
reasonable, to allow for its maintenance and repair. The tenant and the
store premises tenant will, other than for gas for the building boiler and
water for the building, have separate hook ups and each will have its own
separate account, for all other utilities serving the building.
29. FIRE AND OTHER INSURANCE. The landlord will obtain a policy or policies
of insurance covering the building of which the leased premises are a part
and insuring same against fire and other hazards in such amounts as are
commercially reasonable and the tenant will pay the landlord 94.8% (ninety
four point eight percent) of the costs of obtaining said policies, as a
building cost to be paid by tenant hereunder. Said insurance will contain
rent interruption coverage, payable to the landlord, for any period in
which the rent hereunder is otherwise suspended due to fire or other loss.
The tenant will similarly insure its own property in the building,
including its own theatre equipment and fixtures as are defined
hereinelsewhere above, at its own cost, adding whatever additional
coverage it sees fit for business interruption, the proceeds of which
additional coverage will be its to keep in all events. The parties will
coordinate their efforts in obtaining such insurance, either from the same
carriers, or waiving subrogation where same can be done if from different
carriers.
30. PROPERTY TAXES.
a) Tenant covenants and agrees to pay as additional rent its
proportionate share of all real estate taxes, assessments, water
rates and charges, and other governmental charges, general and
special, ordinary and extraordinary, unforeseen as well as foreseen,
of any kind or nature
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whatsoever, including, but not limited to assessments for public
improvements or benefits which shall be laid, assessed, levied or
imposed upon and become due and payable, and a lien upon the land
and building of the demised premises for any and all tax years
during the term hereof (all of which real estate taxes, assessments,
charges, levies or other governmental charges are referred to as
"taxes"). The sum of the taxes assessed against the building for any
tax year during the term hereof shall be deemed to be the taxes
assessed against the building for said tax year and the tenant's
proportionate share of same shall be 94.8% (ninety four point eight
percent).
b) From the commencement date hereof and thereafter, during each
period during which real estate taxes are being paid by landlord
based on preliminary tax bills, tenant shall pay to landlord, on the
first day of each and every month during such period, 1/12th (one
twelfth) of tenant's proportionate share of the annualized
preliminary applicable taxes then being paid by landlord. Upon
receipt by landlord of final real estate tax bills or bills for
additional taxes or assessments, tenant shall pay to landlord any
unpaid portion of its pro rata share of such taxes in equal monthly
installments on the first day of each and every month during the
balance of the calendar year.
c) All real estate taxes which shall become payable for the first and
last tax years of the term hereof shall be apportioned pro rata
between landlord and tenant in accordance with the respective number
of months during which each party shall be in possession of the
demised premises in said respective tax year.
d) If landlord shall obtain a remission or a refund of all or any part
of the real estate taxes heretofore paid by tenant for any year,
landlord shall promptly refund to tenant (or credit tenant with) its
proportionate share of such remission or refund, after deduction of
all expenses incurred in connection therewith.
e) If at any time during the term of this lease the methods of
taxation prevailing at the commencement of the term hereof shall be
altered so that in lieu of or as a supplement to or a substitute for
the whole or any part of the real estate taxes or assessments now
levied, assessed or imposed, there is imposed (i) a tax, assessment,
levy, imposition or a charge, wholly or partially as a capital levy
or otherwise, on the rents received therefrom or (ii) a tax,
assessment, levy (including but not limited to any municipal, state
or federal levy), imposition or charge measured by or based in whole
or in part upon the premises and imposed upon the landlord, or (iii)
a license fee measured by the rent payable under this lease, then
all such taxes, assessments, levies, impositions and charges, or the
part thereof so measured or based shall be deemed to be included in
the general real estate taxes and assessments payable by the tenant
pursuant to this paragraph and the tenant shall pay and discharge
the
Page 15 12/11/97
<PAGE>
same as herein provided in respect of the payment of general real
estate taxes and assessments.
31. PAYMENT OF BUILDING COSTS. With respect to all items due from the
tenant to the landlord hereunder and referred to as "building costs,"
consisting generally of maintenance and insurance, property taxes, and
such other items as are similar thereto, all such items shall be
additional rent due hereunder. Unless payment is specified to be otherwise
elsewhere in this lease, they shall in each instance be due and promptly
paid by the tenant when proof of payment by the landlord is presented to
the tenant, no later than the first day of the month following the month
of presentation by the landlord, provided that the tenant shall have at
least 15 days notice of same.
32. PERMITS AND CERTIFICATE OF OCCUPANCY. Upon signing of this lease, the
tenant shall apply for and pay all costs related to obtaining any business
permit necessary to operate the premises as a movie theatre with a food
concession and take such steps as are otherwise required to continue under
the existing Certificate of Occupancy or to obtain a new one, whichever
the case may be.
33. ALTERATIONS. Provided the lease is then current as to all tenant
obligations, the consent of the landlord to alterations, additions or
improvements requested by tenant shall not be unreasonably withheld. Any
such alterations, additions or improvements must be done in a workmanlike
manner in keeping with all building codes and regulations and in no way
harm the structure of the leased premises. At the expiration of this Lease
or any extension thereof, tenant, at its expense, upon written request
from landlord must restore the leased premises to their original
condition, except as to those alterations which shall have been permitted
by landlord in writing to remain. The landlord reserves the right, before
approving any such alterations, additions or improvements to require the
tenant to furnish him a good and sufficient bond, conditioned that it will
save landlord harmless from the payment of any claims either by way of
damages or liens. All of such alterations, additions or improvements as
shall be permitted by landlord shall be made solely at the expense of the
tenant; and the tenant agrees to protect, indemnify and save harmless the
landlord on account of any injury to third persons or property by reason
of any such alterations, additions or improvements, and to protect,
indemnify and save harmless landlord from the payment of any claim of any
kind or character and account of bills for labor or material in connection
therewith.
34. CURE PERIODS. In the event of any default in the payment of any rent or
any charge characterized as rent and called for hereunder, the tenant
shall have a period of 10 (ten) days after the receipt of notice of
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<PAGE>
said default in which to cure same by payment in good funds of the amount
stated as due in said notice, said payment to be received by the landlord
at landlord's address within said 10 (ten) day period.
In the event of any default of any obligation of tenant not calling for a
payment by tenant to landlord, the tenant shall have 30 (thirty) days
after receipt of notice of said default in which to cure same, which 30
(thirty) days shall be extended as is reasonably necessary, if cure would
reasonably require more than 30 (thirty) days PROVIDED that cure is
commenced within said initial 30 day period and FURTHER PROVIDED the
tenant is not in default in any other obligations of tenant under the
lease.
35. NOTICES. Any notice otherwise permitted or called for under this lease
sent certified mail, return receipt requested, shall be deemed received on
the third day after the post mark of said notice.
36. FIRST 10 YEAR RENEWAL OPTION. Provided that the tenant has faithfully
performed all of the terms, covenants and conditions of this lease during
the initial 20 year term, the tenant shall have the option to extend this
lease for an additional 10 years beginning December 1, 2017, provided
further that tenant gives notice of its election to do so to the landlord,
in writing, not later than 12 (twelve) months next proceeding the end of
the first term of the lease but not sooner than 24 (twenty-four) months
next proceeding end of the first term of the lease. The additional ten
year term shall also be referred to as "the first 10 year option period."
The rent for each year of the first 10 year option period shall be as is
set forth hereinelsewhere above. All other terms and provisions of this
lease shall be extended and bind the parties during the first 10 year
option period, all applied consistently with their application during the
original term of the lease, except that there shall be only one additional
10 year option to renew this lease, as is set forth below.
37. SECOND 10 YEAR RENEWAL OPTION. Provided that the tenant has faithfully
performed all of the terms, covenants and conditions of this lease during
the first 10 option period, the tenant shall have the option to extend
this lease for an additional 10 years beginning December 1, 2027, provided
further that tenant gives notice of its election to do so to the landlord,
in writing, not later than 12 (twelve) months next proceeding the end of
the first 10 year option period but not sooner than 24 (twenty-four)
months next proceeding the end of the first 10 year option period. The
second additional ten year term shall also be referred to as "the second
10 year option period."
The rent for each year of the second 10 year option period shall be as is
set forth hereinelsewhere above. All other terms and provisions of this
lease shall be extended and bind the parties during the second 10 year
option period, all applied consistently with their application during the
First 10 year option period, except that there shall be no further option
to extend this lease beyond the end of the second 10 year option period.
[SIGNATURES AND INCORPORATION OF EXHIBITS ON NEXT PAGE]
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<PAGE>
IN ADDITION TO THE ABOVE, THE PARTIES HEREBY INCORPORATE BY REFERENCE AS THOUGH
SATED VERBATIM:
EXHIBIT A: ALLSTATE FORM 255 AS MARKED AND SIGNED
EXHIBIT B: RIDER ATTACHMENT, AS SIGNED
TENANT: CCC BELLEVUE CINEMA CORP.
by /s/ A. Dale Mayo President
-----------------------------
LANDLORD
/s/ Jesse Y. Sayegh
- --------------------
JESSE Y. SAYEGH
Page 18 12/11/97
<PAGE>
EXHIBIT A
RIDER TO LEASE OF DECEMBER 1997 BETWEEN:
JESSE Y. SAYEGH, LANDLORD
AND
CCC BELLEVUE CINEMA CORP., TENANT
Repairs and Care
2nd: The Tenant has examined the premises and has entered into this lease
without any representation on the part of the Landlord as to the condition
thereof. The Tenant shall take good care of the premises and shall at the
Tenant's own cost and expense, make all repairs, including painting and
decorating, and shall maintain the premises in good condition and state of
repair, and at the end or other expiration of the term hereof, shall deliver up
the rented premises in good order and condition, wear and tear from a reasonable
use thereof, and damage by the elements not resulting from the neglect or fault
of the Tenant, excepted. The Tenant shall neither encumber nor obstruct the
sidewalks, driveways, yards, entrances, hallways and stairs, but shall keep and
maintain the same in a clean condition, free from debris, trash, refuse, snow
and ice.
Glass, etc. Damage Repairs
3rd: In case of the destruction of or any damage to the glass in the
leased premises, or the destruction of or damage of any kind whatsoever to the
said premises, caused by the carelessness, negligence or improper conduct on the
part of the Tenant or the Tenant's agents, employees, guests, licensees,
invitees, subtenants, assignees or successors, the Tenant shall repair the said
damage or replace or restore any destroyed parts of the premises, as speedily as
possible, at the Tenant's own cost and expense.
Alterations Improvements
4th: No alterations, additions or improvements shall be made, and no
climate regulating, air conditioning, cooling, heating or sprinkler systems,
television or radio antennas, heavy equipment, apparatus and fixtures, shall be
installed in or attached to the leased premises, without the written consent of
the Landlord. Unless otherwise provided herein, all such alterations, additions
or improvements and systems, when made, installed in or attached to the said
premises, shall belong to and become the property of the Landlord and shall be
surrendered with the premises and as part thereof upon the expiration or sooner
termination of this lease, without hindrance, molestation or injury.
Signs
5th: The Tenant shall not place nor allow to be placed any signs of any
kind whatsoever, upon, in or about the said premises or any part thereof, except
of a design and structure and in or at such places as may be indicated and
consented to by the Landlord in writing. In case the Landlord or the Landlord's
agents, employees or representatives shall deem it necessary to remove any such
signs in order to paint or make any repairs, alterations or improvements in or
upon said premises or any part thereof, they may be so removed, but shall be
replaced at the Landlord's expense when the said repairs, alterations or
improvements shall have been completed. Any signs permitted by the Landlord
shall at all times conform with all municipal ordinances or other laws and
regulations applicable thereto.
Utilities
6th: The Tenant shall pay when due all the rents or charges for water or
other utilities used by the Tenant, which are or may be assessed or imposed upon
the leased premises or which are or may be charged to the Landlord by the
suppliers thereof during the term hereof, and if not paid, such rents or charges
shall be added to and become payable as additional rent with the installment of
rent next due or within 30 days of demand therefor, whichever occurs sooner.
Compliance with Laws etc.
7th: The Tenant shall promptly comply with all laws, ordinances, rules,
regulations, requirements and directives of the Federal, State and Municipal
Governments or Public Authorities and of all their departments, bureaus and
subdivisions, applicable to and affecting the said premises, their use and
occupancy, for the correction, prevention and abatement of nuisances, violations
or other grievances in, upon or connected with the said premises, during the
term hereof; and shall promptly comply with all orders, regulations,
requirements and directives of the Board of Fire Underwriters or similar
authority and of any insurance companies which have issued or are about to issue
policies of insurance covering the said premises and its contents, for the
prevention of fire or other casualty, damage or injury, at the Tenant's own cost
and expense.
Liability Insurance and Indemnification
8th: The Tenant, at Tenant's own cost and expense, shall obtain or provide
and keep in full force for the benefit of the Landlord, during the term hereof,
general public liability insurance, insuring the Landlord against any and all
liability or claims of liability arising out of, occasioned by or resulting from
any accident or otherwise in or about the leased premises, for injuries to any
person or persons, in any one accident or occurrence, and for loss or damage to
the property of any person or persons, for not less than $2,000,000. The policy
or policies of insurance shall be of a company or companies authorized to do
business in this State and shall be delivered to the Landlord, together with
evidence of the payment of the premiums therefor, not less than fifteen days
prior to the commencement of the term hereof or of the date when the Tenant
shall enter into possession, whichever occurs sooner. At least fifteen days
prior to the expiration or termination date of any policy, the Tenant shall
deliver a renewal or replacement policy with proof of the payment of the premium
therefor. The Tenant also agrees to and shall save, hold and keep harmless and
indemnify the Landlord from and for any and all payments, expenses, costs,
attorney fees and from and for any and all claims and liability for losses or
damage to property or injuries to persons occasioned wholly or in part by or
resulting from any acts or omissions by the Tenant or the Tenant's agents,
employees, guests, licensees, invitees, subtenants, assignees or successors, or
for any cause or reason whatsoever arising out of or by reason of the occupancy
by the Tenant and the conduct of the Tenant's business.
<PAGE>
Assignment
9th: The Tenant shall not, without the written consent of the Landlord,
assign, mortgage or hypothecate this lease, nor sublet or sublease the premises
or any part thereof. See main body of lease and attachment.
Restriction of use
10th: The Tenant shall not occupy or use the leased premises or any part
thereof, nor permit or suffer the same to be occupied or used for any purposes
other than as herein limited, nor for any purpose deemed unlawful, disreputable,
or extra hazardous, on account of fire or other casualty.
Mortgage Priority
11th: This lease shall not be a lien against the said premises in respect
to any mortgages that may hereafter be placed upon said premises. The recording
of such mortgage or mortgages shall have preference and precedence and be
superior and prior in lien to this lease, irrespective of the date of recording
and the Tenant agrees to execute any instruments, without cost, which may be
deemed necessary or desirable, to further effect the subordination of this lease
to any such mortgage or mortgages. A refusal by the Tenant to execute such
instruments shall entitle the Landlord to the option of cancelling this lease,
and the term hereof is hereby expressly limited accordingly. See main body of
lease and attachment.
Condemnation and Eminent Domain
12th: If the land and premises leased herein, or of which the leased
premises are a part, or any portion thereof, shall be taken under eminent domain
or condemnation proceedings, or if suit or other action shall be instituted for
the taking or condemnation thereof, or if in lieu of any formal condemnation
proceedings or actions, the Landlord shall grant an option to purchase and or
shall sell and convey the said premises or any portion thereof, to the
governmental or other public authority, agency, body or public utility, seeking
to take said land and premises or any portion thereof, then this lease, at the
option of the Landlord, shall terminate, and the term hereof shall end as of
such date as the Landlord shall fix by notice in writing; and the Tenant shall
have no claim or right to claim or be entitled to any portion of any amount
which may be awarded as damages or paid as the result of such condemnation
proceedings or paid as the purchase price for such option, sale or conveyance in
lieu of formal condemnation proceedings; and all rights of the Tenant to
damages, if any, are hereby assigned to the Landlord. The Tenant agrees to
execute and deliver any instruments, at the expense of the Landlord, as may be
deemed necessary or required to expedite any condemnation proceedings or to
effectuate a proper transfer of title to such governmental or other public
authority, agency, body or public utility seeking to take or acquire the said
lands and premises or any portion thereof. The Tenant covenants and agrees to
vacate the said premises, remove all the Tenant's personal property therefrom
and deliver up peaceable possession thereof to the Landlord or to such other
party designated by the Landlord in the aforementioned notice. Failure by the
Tenant to comply with any provisions in this clause shall subject the Tenant to
such costs, expenses, damages and losses as the Landlord may incur by reason of
the Tenant's breach hereof.
Fire and other Casualty
13th: In case of fire or other casualty, the Tenant shall give immediate
notice to the Landlord. If the premises shall be partially damaged by fire, the
elements or other casualty, the Landlord shall repair the same as speedily as
practicable, but the Tenant's obligation to pay the rent hereunder shall not
cease. If, in the opinion of the Landlord, the premises be so extensively and
substantially damaged as to render them untenantable, then the rent shall cease
until such time as the premises shall be made tenantable by the Landlord.
However, if, in the opinion of the Landlord, the premises be totally destroyed
or so extensively and substantially damaged as to require practically a
rebuilding thereof, then the rent shall be paid up to the time of such
destruction and then and from thenceforth this lease shall come to an end. In no
event however, shall the provisions of this clause become effective or be
applicable, if the fire or other casualty and damage shall be the result of the
carelessness, negligence or improper conduct of the Tenant or the Tenant's
agents, employees, guests, licensees, invitees, subtenants, assignees or
successors. In such case, the Tenant's liability for the payment of the rent and
the performance of all the covenants, conditions and terms hereof on the
Tenant's part to be performed shall continue and the Tenant shall be liable to
the Landlord for the damage and loss suffered by the Landlord. If the Tenant
shall have been insured against any of the risks herein covered, then the
proceeds of such insurance shall be paid over to the Landlord to the extent of
the Landlord's costs and expenses to make the repairs hereunder, and such
insurance carriers shall have no recourse against the Landlord for
reimbursement.
Reimbursement of Landlord
14th: If the Tenant shall fail or refuse to comply with and perform any
conditions and covenants of the within lease, the Landlord may, if the Landlord
so elects, carry out and perform such conditions and covenants, at the cost and
expense of the Tenant, and the said cost and expense shall be payable on demand,
or at the option of the Landlord shall be added to the installment of rend due
immediately thereafter but in no case later than one month after such demand,
whichever occurs sooner, and shall be due and payable as such. This remedy shall
be in addition to such other remedies as the Landlord may have hereunder by
reason of the breach by the Tenant of any of the covenants and conditions in
this lease contained.
Inspection and Repair
15th: The tenant agrees that the Landlord and the Landlord's agents,
employees or other representatives, shall have the right to enter into and upon
the said premises or any part thereof, at all reasonable hours, for the purpose
of examining the same or making such repairs or alterations therein as may be
necessary for the safety and preservation thereof. This clause shall not be
deemed to be a covenant by the Landlord nor be construed to create an obligation
on the part of the Landlord to make such inspection or repairs.
Right to Exhibit
16th: The Tenant agrees to permit the Landlord and the Landlord's agents,
employees or other representatives to show the premises to persons wishing to
rent or purchase the same, and Tenant agrees that on and after six months next
preceding the expiration of the term hereof, the Landlord or the Landlord's
agents, employees or other representatives shall have the right to place notices
on the front of said premises or any part thereof, offering the premises for
rent or for sale; and the Tenant hereby agrees to permit the same to remain
thereon without hindrance or molestation.
Increase of Insurance Rates
17th: If for any reason it shall be impossible to obtain fire and other
hazard insurance on the buildings and improvements on the leased premises, in an
amount and in the form and in insurance companies acceptable to the Landlord,
the Landlord may, if the Landlord so elects at any time thereafter, terminate
this lease and the term hereof, upon giving to the Tenant fifteen days notice in
writing of the Landlord's intention so to do, and upon the giving of such
notice, this lease and the term thereof shall terminate. If by reason of the use
to which the premises are put by the Tenant or character of or the manner in
which the Tenant's business is carried on, the insurance rates for fire and
other hazards shall be increased, the Tenant shall upon demand, pay to the
Landlord, as rent, the amounts by which the premiums for such insurance are
increased. Such payment shall be paid with the next installment of rent but in
no case later than one month after such demand, whichever occurs sooner.
Removal of Tenant's Property
18th: Any equipment, fixtures, goods or other property of the Tenant, not
removed by the Tenant upon the termination of this lease, or upon any quitting,
vacating or abandonment of the premises by the Tenant, or upon the Tenant's
eviction, shall be considered as abandoned and the Landlord shall have the
right, without any notice to the Tenant, to sell or otherwise dispose of the
same, at the expense of the Tenant, and shall not be accountable to the Tenant
for any part of the proceeds of such sale, if any.
Remedies upon Tenant's Default
19th: If there should occur any default on the part of the Tenant in the
performance of any conditions and covenants herein contained, or if during the
term hereof the premises or any part thereof shall be or become abandoned or
deserted, vacated or vacant, or should the Tenant be evicted by summary
proceedings or otherwise, the Landlord, in addition to any other remedies herein
contained or as may be permitted by law, may either by force or otherwise,
without being liable for prosecution therefor, or for damages, re-enter the said
premises and the same have and again possess end enjoy; and as agent for the
Tenant or otherwise, re-let the premises and receive the rents therefor and
apply the same, first to the payment of such expenses, reasonable attorney fees
and costs, as the Landlord may have been put to in re-entering and repossessing
the same and in making such repairs and alterations as may be necessary; and
second to the payment of the rents due hereunder. The Tenant shall remain liable
for such rents as may be in arrears and also the rents as may accrue subsequent
to the re-entry by the Landlord, to the extent of the difference between the
rents reserved hereunder and the rents, if any, received by the Landlord during
the remainder of the unexpired term hereof, after deducting the aforementioned
expenses, fees and costs; the same to be paid as such deficiencies arise and are
ascertained each month.
Termination on Default
20th: Upon the occurrence of any of the contingencies set forth in the
preceding clause, or should the Tenant be adjudicated a bankrupt, insolvent or
placed in receivership, or should proceedings be instituted by or against the
Tenant for bankruptcy, insolvency, receivership, agreement of composition or
assignment for the benefit of creditors, or if this lease or the estate of the
Tenant hereunder shall pass to another by virtue of any court proceedings, writ
of execution, levy, sale, or by operation of law, the Landlord may, if the
Landlord so elects, at any time thereafter, terminate this lease and the term
hereof, upon giving to the Tenant or to any trustee, receiver, assignee or other
person in charge of or acting as custodian of the assets or property of the
Tenant, five days notice in writing, of the Landlord's intention so to do. Upon
the giving of such notice, this lease and the term hereof shall end on the date
fixed in such notice as if the said date was the date originally fixed in this
lease for the expiration hereof; and the Landlord shall have the right to remove
all persons, goods, fixtures and chattels therefrom, by force or otherwise,
without liability for damages.
Non-Liability of Landlord
21st: The shall not be liable for any damage or Landlord injury which may
be sustained by the Tenant or any other person, as a consequence of the failure,
breakage, leakage or obstruction of the water, plumbing, steam, sewer, waste or
soil pipes, roof, drains, leaders, gutters, valleys, downspouts or the like or
of the electrical, gas, power, conveyor, refrigeration, sprinkler,
airconditioning or heating systems, elevators or hoisting equipment; or by
reason of the elements; or resulting from the carelessness, negligence or
improper conduct on the part of any other Tenant or of the Landlord or the
Landlord's or this or any other Tenant's agents, employees, guests, licensees,
invitees, subtenants, assignees or successors; or attributable to any
interference with, interruption of or failure, beyond the control of the
landlord, of any services to be furnished or supplied by the Landlord.
Non-Waiver by Landlord
22nd: The various rights, remedies, options and elections of the Landlord,
expressed herein, are cumulative, and the failure of the Landlord to enforce
strict performance by the Tenant of the conditions and covenants of this lease
or to exercise any election or option, or to resort or have recourse to any
remedy herein conferred or the acceptance by the Landlord of any installment of
rent after any breach by the Tenant, in any one or more instances, shall not be
construed or deemed to be a waiver or a relinquishment for the future by the
Landlord of any such conditions and covenants, options, elections or remedies,
but the same shall continue in full force and effect.
<PAGE>
Non-Performance by Landlord
23rd: This lease and the obligation of the Tenant to pay the rent
hereunder and to comply with the covenants and conditions hereof, shall not be
affected, curtailed, impaired or excused because of the Landlord's inability to
supply any service or material called for herein, by reason of any rule, order,
regulation or preemption by any governmental entity, authority, department,
agency or subdivision or for any delay which may arise by reason of negotiations
for the adjustment of any fire or other casualty loss or because of strikes or
other labor trouble or for any cause beyond the control of the Landlord.
Validity of Lease
24th: The terms, conditions, covenants and provisions of this lease shall
be deemed to be severable. If any clause or provision herein contained shall be
adjudged to be invalid or unenforceable by a court of competent jurisdiction or
by operation of any applicable law, it shall not affect the validity of any
other clause or provision herein, but such other clauses or provisions shall
remain in full force and effect.
Notices
25th: All notices required under the terms of this lease shall be given
and shall be complete by mailing such notices by certified or registered mail,
return receipt requested, to the address of the parties as shown at the head of
this lease, or to such other address as may be designated in writing, which
notice of change of address shall be given in the same manner.
Title and Quiet Enjoyment
26th: The Landlord covenants and represents that the Landlord is the owner
of the premises herein leased and has the right and authority to enter into,
execute and deliver this lease; and does further covenant that the Tenant on
paying the rent and performing the conditions and covenants herein contained,
shall and may peaceable and quietly have, hold and enjoy the leased premises for
the term aforementioned.
Entire Contract
27th: This lease contains the entire contract between the parties. No
representative, agent or employee of the Landlord has been authorized to make
any representations or promises with reference to the within letting or to vary,
alter or modify the terms hereof. No additions, changes or modifications,
renewals or extensions hereof, shall be binding unless reduced to writing and
signed by the Landlord and the Tenant.
Mechanics' Liens
29th: If any mechanics' or other liens shall be created or filed against
the leased premises by reason of labor performed or materials furnished for the
Tenant in the erection, construction, completion, alteration, repair or addition
to any building or improvement, the Tenant shall upon demand, at the Tenant's
own cost and expense, cause such lien or liens to be satisfied and discharged of
record together with any Notices of Intention that may have been filed. Failure
so to do, shall entitle the Landlord to resort to such remedies as are provided
herein in the case of any default of this lease, in addition to such as are
permitted by law.
Waiver of Subrogation Rights
30th: The Tenant waives all rights of recovery against the Landlord or
Landlord's agents, employees or other representatives, for any loss, damages or
injury of any nature whatsoever to property or persons for which the Tenant is
insured. The Tenant shall obtain from Tenant's insurance carriers and will
deliver to the Landlord, waivers of the subrogation rights under the respective
policies.
Security
31st: The Tenant has this day deposited with the Landlord the sum of $NONE
as security for the payment of the rent hereunder and the full and faithful
performance by the Tenant of the covenants and conditions on the part of the
Tenant to be performed. Said sum shall be returned to the Tenant, without
interest, after the expiration of the term hereof, provided that the Tenant has
fully and faithfully performed all such covenants and conditions and is not in
arrears in rent. During the term hereof, the Landlord may, if the Landlord so
elects, have recourse to such security, to make good any default by the Tenant,
in which event the Tenant shall, on demand, promptly restore said security to
its original amount. Liability to repay said security to the Tenant shall run
with the reversion and title to said premises, whether any change in ownership
thereof be by voluntary alienation or as the result of judicial sale,
foreclosure or other proceedings, or the exercise of a right of taking or entry
by any mortgagee. The landlord shall assign or transfer said security, for the
benefit of the Tenant, to any subsequent owner or holder of the reversion or
title to said premises, in which case the assignee shall become liable for the
repayment thereof as herein provided, and the assignor shall be deemed to be
released by the Tenant from all liability to return such security. This
provision shall be applicable to every alienation or change in title and shall
in no wise be deemed to permit the Landlord to retain the security after
termination of the Landlord's ownership of the reversion or title. The Tenant
shall not mortgage, encumber or assign said security without the written consent
of the Landlord.
Conformation with Laws and Regulations
The Landlord may pursue the relief or remedy sought in anyinvalid clause,
by conforming the said clause with the provisions of the statutes or the
regulations of any governmental agency in such case made and provided as if the
particular provisions of the applicable statutes or regulations were set forth
herein at length.
In all references herein to any parties, persons, entities or corporations
the use of any particular gender or the plural or singular number is intended to
include the appropriate gender or number as the text of the within instrument
may require. All the terms, covenants and conditions herein contained shall be
for and shall inure to the benefit of and shall bind the respective parties
hereto, and their heirs, executors, administrators, personal or legal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, or caused these presents to be signed by their proper corporate officers
and their proper corporate seal to be hereto affixed, the day and year first
above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF /s/ Jesse Sayegh
OR ATTESTED BY ------------------------------
Landlord
/s/ CCC Bellevue Cinema Corp.
-------------------------------
Tenant
By /s/ A. Dale Mayo
-------------------------------
A. Dale Mayo, Pres.
<PAGE>
Exhibit B
Rider Attachment to
Lease between Jesse Y. Sayegh and
CCC Bellevue Cinema Corp
December 12, 1997
Notwithstanding anything in the lease rider to which this document is attached
to the contrary, the parties agree as follows:
1. The landlord represents that a theatre has been operated from the premises
since he has owned them (December 1996) without interference by any person
claiming any easement or rights of way and that attached is a copy of a survey
of the premises of which the theatre is a part which he received from his
predecessor in title, showing what he believes to be the case, namely that his
building and improvements cover almost all of the real estate he owns and that
most if not all of any public right of way is adjacent and not on his property.
2. With respect to any environmental contamination which may be found on the
premises at any time after the lease is signed:
a) As to any contamination that is subject to the landlord's right to
indemnification from his predecessor in title-- United Artists--, disclosed
elsewhere, the landlord will indemnify and hold tenant harmless the same as
United Artists has indemnified him and remove any asbestos exposing employees,
customers, or others, to acceptable DEP standards.
b) As to any contamination the existence of which can be determined to have
predated the occupancy of the premises by the tenant, the tenant shall have no
obligations with regard to the cost of the clean-up of same or for whatever
other compliance is required under law.
c) As to any contamination the existence of which cannot be determined to have
predated the occupancy of the premises by the tenant, the landlord shall have
the primary obligation to remedy same and the right to control all steps taken
in compliance therewith, but all costs of said remediation and compliance shall
be passed through to the tenant as a building cost and the tenant shall pay its
proportionate 94.8% (ninety four point eight percent) of same. The landlord
shall keep the tenant fully apprised as to all remediation and compliance
undertaken, in advance wherever possible, and provide the tenant with copies of
all correspondence, notices, reports, and other communications and afford
Page 1 of 3 12/11/97
<PAGE>
the tenant the opportunity to participate in or attend all meetings or
proceedings with respect thereto.
Any dispute as to the dating of any contamination or as to any other
matter pertaining to remediation or compliance or the costs thereof shall be
submitted by the parties to informal but binding arbitration.
3. There shall be no security deposit required of tenant.
4. Unrated movies may be exhibited.
5. The tenant may sell on screen advertising through unaffiliated third parties,
for a commission or other consideration, and only the commission or other
consideration and not the gross advertising revenues of the third party will be
included in gross sales for the purposes of computing percentage rent owed.
6. With respect to roof maintenance, the landlord shall bear 100% of the costs
of same for the first five years of the lease. The landlord and the tenant will
divide the costs of same, 50% each, for the next five years. Thereafter the
costs of same will be a building cost and the tenant will pay 94.8% (ninety four
point eight percent) of same. NOTWITHSTANDING the above, the tenant will at no
time have any obligation to be responsible for the structural repair of any roof
member, the sole cost and obligation of which will be the landlord's EXCEPTING
ONLY the cost of such repair for damage caused by acts otherwise stated to be a
violation of this lease by tenant.
7. The tenant may mortgage, hypothecate, or collaterally assign this lease as
security for tenant borrowing and the person or entity holding such interests as
are created thereby, hereinafter referred to as "the tenant's lender ," on
notice to landlord, shall be entitled to receive copies of all subsequent
notices from landlord to tenant. The lender, upon any termination of the lease
by landlord for failure of tenant to cure a default, shall also have an
additional opportunity to cure the default or defaults covered by the notices,
to wit, an additional 10 (ten) days to cure a payment default, and 30 (thirty)
days to cure a non payment default, all in accord with the conditions and
provisions as are set forth in the rider for cure by the tenant.
Page 2 of 3 12/11/97
<PAGE>
8. In the event the first lease year is more or less than 365 days, the parties
will, upon signing of the lease, agree upon an example of the first lease
periods percentage rent will be determined and called for that period, using the
total base daily rent due for that period, at $273.97 ($100,000 divided by 365)
times the number of days in the period, as the gross sales base for percentage
rent for that period, and running the example to its conclusion.
TENANT:
CCC Bellevue Cinema Corp.
by /s/ A. Dale Mayo President
- ---------------------------------------
LANDLORD
/s/ Jesse Y. Sayegh
- -------------------------
Jesse Y. Sayegh
Page 3 of 3 12/11/97
<PAGE>
Bellevue Break Point - Year 1 (i.e. show year ending Nov. 30, 1998)
USS Dec 1-12 365
(12)
----
First year Rent per diem 352 days
$273.97
-------
1st year Base rent $96,440.96
x 10
-------
"Break-point" for 352 days
ending Nov. 30, 1998 per page 8,
sub P. (d) $964,410.
CCC Bellevue/Sayegh
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of December 12, 1997 (the
"Agreement"), by and among Clearview Cinema Group, Inc., a Delaware corporation
(the "Company"), The New Bellevue Theater Corp., a New Jersey corporation
("Seller"), and Jesse Sayegh, an individual residing in Kinnelon, New Jersey
("Stockholder").
The parties hereto, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, agree as follows:
1. DEFINITIONS. The following terms have the meanings set forth in this
Section 1 unless the context clearly otherwise requires:
(a) "Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Common Stock" means the Common Stock, $.01 par value, of the
Company.
(d) "Holder" means Stockholder and Seller so long as Stockholder or
Seller are holders of any Registrable Securities and Stockholder's permitted
successors, transferees and assigns so long as any such successor, transferee or
assignee executes and delivers a written agreement, in form and substance
satisfactory to the Company, agreeing to be bound by the provisions of this
Agreement.
(e) "Offering" means any public offering of shares of Common Stock
by the Company or any holder thereof in accordance with the registration
requirements of the Act.
(f) "Registrable Securities" means any shares of Common Stock now or
hereafter held by Stockholder or the Company.
(g) "Registration", "register" and like words mean compliance with
all of the laws, rules and regulations (federal, state and local), and
provisions of agreements and corporate documents pertaining to the public
offering of securities, including registration of any public offering of
securities on any form under the Act.
2. INCIDENTAL REGISTRATION. If the Company shall at any time propose for
itself or any other person the registration under the Act of any Offering (other
than any Offering in connection with any employee benefit plan or a transaction
required to be registered by means of a registration statement on Form S-4), the
Company shall give notice of such proposed registration to all Holders. Upon
receipt of such notice, each Holder may elect to participate in such Offering.
To make such election, any such Holder must give notice to the Company of such
Holder's election and the number of Registrable Securities that such Holder
wishes to sell in such Offering within fifteen (15) days of the day that the
Company gave notice of such Offering. Subject to the provisions of the last
sentence of this Section 2, the Company shall include in such Offering such
Registrable Securities and shall cause the managing underwriter or sole
underwriter of such Offering, if any, to enter into an underwriting agreement
that will have all such electing Holders as parties thereto. The rights provided
in this Section 2 are available to any Holder even
<PAGE>
though such Holder may be free at the time to sell all of the Registrable
Securities of such Holder with respect to which registration is requested in
accordance with Rule 144 (or any similar rule or regulation) under the Act. If
the managing underwriter or sole underwriter of any Offering subject to the
provisions of this Section 2 advises the Holders participating therein in
writing that marketing factors require a limitation on the number of shares of
Common Stock to be underwritten in such Offering, then the number of shares of
Common Stock that may be included in such Offering shall be allocated as
follows: (i) all shares of Common Stock to be sold for the account of the
Company shall be included; and (ii) the remaining shares of Common Stock that
may be sold pursuant to the advice of such managing underwriter shall be
allocated among all Holders and other persons participating in such Offering in
proportion, as nearly as practicable, to the respective numbers of shares of
Common Stock held by or issuable to all such persons at the time of the filing
of the registration statement for such Offering.
3. INFORMATION TO BE FURNISHED BY HOLDERS. Each Holder participating in an
Offering pursuant to Section 2 shall furnish to the Company in writing all
information within such Holder's possession or knowledge required by the
applicable rules and regulations of the Commission and by any applicable state
securities or blue sky laws concerning such Holder, the proposed method of sale
or other disposition of the shares of Common Stock being sold by such Holder in
such Offering, and the identity of and compensation to be paid to any proposed
underwriter or underwriters to be employed in connection with such Offering.
4. COSTS AND EXPENSES. Except as provided in the last sentence of this
Section 4, the Company shall pay all costs and expenses in connection with the
registration of any Offering under this Agreement. Such costs and expenses for
any Offering, include: (a) the reasonable fees and expenses of the Company's
counsel and one special counsel selected by the Holders offering shares of
Common Stock in such Offering; (b) the fees and expenses of the Company's
accountants and auditors; (c) the costs and expenses incident to the
preparation, printing and filing of any and all documents to be filed under the
Act and any applicable state securities or blue sky laws in connection with such
Offering, each prospectus forming a part of the relevant registration statement
and all amendments thereof and supplements thereto; (d) the costs incurred in
connection with the qualification of the Offering and the shares of Common Stock
being offered in such Offering under any applicable state securities or blue sky
laws (including any related fees and disbursements); (e) the cost of listing the
shares of Common Stock being offered in such Offering on any exchange; (f) the
cost of furnishing to each Holder such copies as such Holder shall reasonably
request of the relevant registration statement, each preliminary prospectus and
the final prospectus forming part of such registration statement and each
amendment thereof or supplement thereto; and (g) all expenses incident to
delivery of the shares of Common Stock being offered in such Offering to any
underwriter or underwriters. Notwithstanding anything to the contrary set forth
herein, the Company shall not be obligated to pay (i) the commissions or
discounts payable to any underwriter for any shares of Common Stock sold by any
Holder or (ii) any costs or expenses incurred in connection with any
registration statement referred to in Section 2 which any other person on whose
behalf such registration statement is being filed has agreed to pay.
5. INDEMNIFICATION BY COMPANY. The Company shall, to the maximum extent
permitted by law, indemnify and hold harmless each Holder participating in any
Offering pursuant to this Agreement, any underwriter for such Holder and each
person, if any, who controls (as defined in the Act) such Holder or such
underwriter against any losses, claims, damages, liabilities, judgments,
settlements, awards and expenses (including attorneys' fees) (each a "Loss" and
collectively "Losses") to which such Holder or underwriter or controlling person
may become subject under the Act or otherwise, insofar as such Losses are caused
by, based upon, arise out of, or relate to, any untrue statement or alleged
untrue statement of any material fact contained in the
2
<PAGE>
registration statement for such Offering, any prospectus contained therein, or
any amendment thereof or supplement thereto, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the Company
shall not be liable in any such case to the extent that any such Loss is caused
by, is based upon, arises out of, or relates to, an untrue statement or alleged
untrue statement or omission or alleged omission made in conformity with written
information furnished by such Holder or underwriter specifically for use in
preparation of such registration statement, prospectus, amendment or supplement
or if, in respect to such statement, alleged statement, omission or alleged
omission, the final prospectus for such registration statement corrected such
statement, alleged statement, omission or alleged omission and a copy of such
final prospectus was not sent or given by or on behalf of such Holder at or
prior to the confirmation of the sale of shares of Common Stock of such Holder
with respect to which such Loss relates. The Company shall reimburse each such
Holder, underwriter or controlling person for any legal or other expenses
incurred by such Holder, underwriter or controlling person in connection with
investigating or defending against any such Loss as incurred if such Holder,
underwriter or controlling person has provided to the Company an undertaking to
repay such reimbursed expenses if it is determined that such Holder, underwriter
or controlling person was not entitled to indemnification hereunder.
6. INDEMNIFICATION BY HOLDER. Each Holder participating in any Offering
pursuant to this Agreement shall, to the maximum extent permitted by law,
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the applicable registration statement and each person,
if any, who controls the Company against any Losses to which the Company or any
such director, officer or controlling person may become subject under the Act or
otherwise, insofar as such Losses are caused by, based upon, arise out of, or
relate to, (a) any untrue or alleged untrue statement of any material fact
contained in the registration statement for such Offering, any prospectus
contained therein, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such Losses are caused by,
based upon, arise out of, or relate to, an untrue statement or alleged untrue
statement or omission or alleged omission made in conformity with written
information furnished by such Holder specifically for use in preparation of such
registration statement, prospectus, amendment or supplement; or (b) any untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus for such registration statement if, in respect to
such statement, alleged statement, omission or alleged omission, the final
prospectus for such registration statement corrected such statement, alleged
statement, omission or alleged omission and a copy of such final prospectus was
not sent or given by or on behalf of such Holder at or prior to the confirmation
of the sale of shares of Common Stock of such Holder with respect to which such
Loss relates. Each Holder's obligation under this Section 7 shall be several and
not joint and in no event shall exceed the net proceeds received by such Holder
in the Offering to which the applicable Loss relates.
7. NOTICE TO INDEMNITOR. Promptly after receipt by any indemnified party
of notice of the commencement of any action which may involve an indemnifiable
Loss, such indemnified party shall, if a claim is to be made against an
indemnifying party with respect to such Loss pursuant hereto, notify such
indemnifying party of the commencement thereof; but the failure to so notify
such indemnifying party shall not relieve it from any liability that it may have
to such indemnified party hereunder unless such indemnifying party shall have
been actually and materially prejudiced by such failure. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, and such indemnifying party, without acknowledging
any validity of the underlying claim, acknowledges that it may be obligated to
indemnify such indemnified party therefor, such indemnifying party shall be
entitled to
3
<PAGE>
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, but may not settle
such action without the consent of such indemnified party, which consent shall
not be unreasonably withheld, unless such settlement involves no payment by such
indemnified party, no equitable relief against such indemnified party and a
complete release of all claims against such indemnified party. If an
indemnifying party undertakes the defense of any matter for which indemnity is
claimed under this Agreement, and if the relevant indemnified party wishes
nevertheless to retain counsel to represent it in such matter, the fees of such
counsel shall be the responsibility solely of the party retaining such counsel
unless such indemnified party and such indemnifying party have conflicting or
separate defenses in such action, in which case the attorneys' fees of such
indemnified party will be borne by such indemnifying party.
8. ADDITIONAL OBLIGATIONS. If, in order to effect any Offering in
accordance with this Agreement, such Offering or the shares of Common Stock
being offered in such Offering require a declaration of, registration with, or
approval of, any federal or state governmental official or authority (other than
registration under the Act or qualification or registration under state
securities or blue sky laws) before such shares of Common Stock may be sold, the
Company at its own expense shall take all reasonable actions in connection with
such registration, declaration or approval and will use its reasonable best
efforts to cause such shares of Common Stock to be duly registered or approved
as may be required; provided, however, that in connection therewith or as a
condition thereof, the Company may not be required to execute a general consent
to service or to qualify to do business in any jurisdiction. The foregoing shall
not be applicable to any regulatory requirements applicable solely to any Holder
wishing to participate in any such Offering.
9. RULE 144 COVENANTS. With a view to making available to each Holder the
benefits of Rule 144 under the Act (which term as used in this Section 9
includes the present Rule 144 and any other, additional, substitute,
supplemental or analogous rule or regulation of the Commission that may at any
time permit a Holder to sell Registrable Securities to the public without
compliance with the registration requirements of the Act), the Company (a) shall
maintain registration of the Common Stock under Section 12 or 15(d) of the
Securities Exchange Act of 1934, as amended; (b) shall file with the Commission
in a timely manner all reports and other documents required to be filed by an
issuer of securities registered under the Securities Exchange Act of 1934, as
amended, so as to maintain the availability of Rule 144 to the Holders; (c) at
its expense, forthwith upon any Holder's request, shall deliver to such Holder a
certificate, signed by one of the Company's principal officers, stating (i) the
Company's name, address and telephone number (including area code); (ii) the
Company's I.R.S. taxpayer identification number; (iii) the Company's Commission
file number; (iv) the number of shares of Common Stock outstanding as shown by
the most recent report or statement published by the Company or filed by the
Company with the Commission; and (v) that the Company has filed the reports
required to be filed under the Securities Exchange Act of 1934, as amended, for
a period of at least 90 days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed thereunder
and such other or additional information as shall be necessary to make available
to such Holder the ability to offer and sell the maximum number of shares of
Common Stock under Rule 144; and (d) when Rule 144 is being complied with, shall
deliver securities not bearing any legend restricting transfer of such
securities, as requested from time to time by any Holder subject to this
Agreement.
10. NOTICES. All notices and other communications provided for hereunder
must be in writing and shall be deemed to have been given on the same day when
personally delivered or sent by confirmed facsimile transmission or on the next
business day when delivered by receipted
4
<PAGE>
courier service or on the third business day when mailed with sufficient
postage, registered or certified mail, return receipt requested, to the
following addresses:
(a) if to the Company: Clearview Cinema Group, Inc., 7 Waverly
Place, Madison, New Jersey 07940, Telecopy No. (201) 377-4303, marked
"Attention: President," with a copy to: Kirkpatrick & Lockhart LLP, 1251 Avenue
of the Americas, New York, New York 10020, Attention: David L.
Forney, Esq.;
(b) if to Stockholder or Seller: 25 Kinnelon Road, Kinnelon,
New Jersey 07940, Attention: Mr. Jesse Sayegh.
or to such other address as any party shall have furnished to the other parties
pursuant to this Section 10. Failure to send a copy of a notice to any attorney
shall not vitiate any notice sent to a party.
11. ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT; CONSENTS. This Agreement
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. Changes in or additions to this Agreement may be made
and/or compliance with any covenant or condition herein set forth may be omitted
only upon written consent of all the parties hereto; provided, however, that any
agreement by any person to become a party to this Agreement because such person
has acquired shares of Common Stock from any Stockholder or from the Company
only needs to be executed by such person and the Company to be binding upon all
of the parties hereto.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective permitted successors,
transferees and assigns. For purposes of this Agreement, any person who is a
successor to or assignee of any party hereto by operation of law, including by
means of a merger, consolidation or share exchange or by the laws of intestacy
or inheritance or pursuant to a will (but only if such person is the
administrator or executor of the applicable estate) and excluding any person who
receives a distribution of shares of Common Stock as an heir, upon dissolution
or liquidation (whether full or partial), as a dividend on or a redemption
(whether full or partial) of such person's interest in such party or by any
other means, shall be deemed to be a permitted successor or assignee hereunder
upon execution of an agreement to become a party hereto. Any person who receives
a distribution of shares of Common Stock from any party hereto by any other
means or for any other reason shall only be permitted to become a party hereto
if (a) such person, after such distribution, beneficially owns at least five
percent of the then outstanding shares of Common Stock, on a fully diluted
basis, or (b) such person is an affiliate of the Company (as defined in Rule 144
under the Act), and such person executes an agreement to become a party hereto.
13. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without regard to any of its
principles of conflicts of law.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.
5
<PAGE>
15. TERM. This Agreement shall remain in full force and effect until the
earliest to occur of (a) the liquidation or dissolution of the Company, (b) the
sale of all or substantially all of the assets of the Company, (c) no
Stockholder beneficially owning more than five percent of the then-outstanding
shares of Common Stock, on a fully diluted basis, and (d) the tenth anniversary
of the date hereof.
16. CONSTRUCTION.
(a) The descriptive headings of this Agreement are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
(b) As used in this Agreement, the term "person" means any
individual, corporation, partnership, joint venture, trust, limited liability
company, governmental authority or other entity.
(c) The invalidity or unenforceability of any particular provision
of this Agreement in any jurisdiction shall not affect the other provisions
hereof or such provision in other jurisdictions, and this Agreement shall be
construed in such jurisdiction in all respects as if such invalid or
unenforceable provision were omitted. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision in such jurisdiction there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first set forth above.
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
------------------------------
A. Dale Mayo
President
THE NEW BELLEVUE THEATER CORP. STOCKHOLDER:
By: /s/ Jesse Sayegh /s/ Jesse Sayegh
-------------------------- ---------------------------
Jesse Sayegh Jesse Sayegh
Exhibit 10.03
ASSIGNMENT, ASSUMPTION AND CONSENT TO ASSIGNMENT
OF LEASE
This Assignment, Assumption of Assignment and Consent to Assignment
of Lease is made this 12th day of December, 1997 between JESSE SAYEGH, an
individual residing at 25 Kinnelon Road, Kinnelon, New Jersey 07405 (hereinafter
referred to as the "Assignor"), and CCC Cedar Grove Cinema Corp., a Delaware
corporation organized and existing under the laws of Delaware, whose principle
office is located at 7 Waverly Place, Madison, New Jersey 07940 (hereinafter
collectively referred to as the "Assignee"), Leonard Diener Investment Company,
a New Jersey Partnership, hereinafter referred to as the ("Landlord"), and
Clearview Cinema Group, Inc., a Delaware Corporation, with offices at 7 Waverly
Place, Madison, New Jersey 07940, (hereinafter referred to as "Guarantor").
WITNESSETH:
WHEREAS, Assignor entered into a Lease with BEATRICE DIENER, d/b/a
LEONARD DIENER INVESTMENT COMPANY, dated May 29, 1990, a true copy is annexed
hereto (hereinafter referred to as Lease Agreement"); and
WHEREAS, the Assignor wishes to assign to Assignee all of its right,
title and interest under and pursuant to the Lease Agreement; and
WHEREAS, the Assignee wishes to accept this Assignment of Lease as
of December 12, 1997, and agrees to assume, perform and abide by all of the
terms, provisions and obligations of Assignor under the Lease Agreement; and
<PAGE>
WHEREAS, LEONARD DIENER INVESTMENT COMPANY (hereinafter the
"Landlord") hereby consents to assignment of the Lease Agreement to the Assignee
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and intending to
be legally bound hereby, the Assignor and Assignee hereby agree as follows:
1. Assignor hereby assign all of its right, title and interest under
and pursuant to the Lease Agreement from and after December 12, 1997 to
Assignee, and its respective successors and/or assigns.
2. Assignee hereby accepts this Assignment of Lease, and agrees from
and after December 12, 1997 to assume, perform and abide by all of the terms,
provisions and obligations of the Assignor under the Lease Agreement.
3. Notwithstanding anything in this Assignment and Acceptance of
Assignment of Lease that may be to the contrary, Assignor expressly agrees that
nothing herein shall relieve the Assignor from any liability under and pursuant
to the Lease Agreement.
4. This Assignment and Acceptance of Assignment of Lease shall be
binding upon the parties hereto and their respective heirs, successors and
assigns.
5. This Assignment and Acceptance of Assignment of Lease shall not
be modified or amended without the written consent of the parties hereto and the
Landlord.
2
<PAGE>
6. By its signature below, Clearview Cinema Group, Inc., a
Delaware corporation and the parent of the assignee ("Clearview"), for valuable
consideration and in order to induce the Landlord to execute the consent, hereby
guarantees the payment of rent and performance of all tenant obligations during
the term of the Lease as set forth in the Lease Agreement for a period of one
year, commencing as of the date CCC Cedar Grove Cinemas Corp. assumes all of the
tenant obligation under the Lease Agreement.
7. The Landlord agrees to give notice of any default in the Lease
to Provident Bank, as Agent, One East Fourth Street, Cincinnati, Ohio 45202.
[Remainder of this page is intentionally left blank]
Signature pages follow
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of
the date and year hereinabove first written.
WITNESS:
/s/ Illegible /s/ Jesse Sayegh
- --------------------- ------------------------
Witness Jesse Sayegh, Assignor
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
On this 12th day of December in the year 1997, before me personally came
Jesse Sayegh who, I am satisfied, signed, sealed and delivered the same as his
act and deed for the purpose therein expressed.
/s/ Deborah York Sheridan
----------------------------
Notary Public
4
<PAGE>
ATTEST: CCC Cedar Grove Cinema Corp.
Assignee
/s/ Herbert L. Klein By: /s/ A. Dale Mayo
- -------------------------- -------------------------
Asst. Secretary A. Dale Mayo, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I CERTIFY that on December 12, 1997 A. Dale Mayo personally came before me
and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as President of
CCC Cedar Grove Cinema Corp. the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from CCC Cedar Grove Cinema Corp.
/s/ Deborah York Sheridan
-------------------------
Notary Public
5
<PAGE>
ATTEST: Clearview Cinema Group, Inc.
Guarantor
/s/ Herbert L. Klein By: /s/ A. Dale Mayo
- ----------------------- -----------------------
Assistant Secretary A. Dale Mayo, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I CERTIFY that on December 12, 1997 A. Dale Mayo personally came before me
and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as
President of Clearview Cinema Group, Inc. the company named in this document;
(b) this document was signed and made by the Company as its voluntary act
and deed by virtue of authority from CCC Cedar Grove Cinema Corp.
/s/ Deborah York Sheridan
---------------------------
Notary Public
6
<PAGE>
CONSENT TO ASSIGNMENT
Leonard Diener Investment Company hereby consents to the assignment of the
Lease Agreement to the above-named Assignee on the express condition that the
Assignor shall remain liable for the prompt payment of the rent and the
performance of all obligations and covenants provided in the Lease Agreement,
that Clearview Cinema Group, guarantees the payment of rents and performances of
all tenant obligations in accordance with Paragraph #6 of the Assignment,
Assumption and Consent to Assignment of Lease to which this Consent to
Assignment is attached and that no further assignment or sub-lease of any part
of the devised premises shall be made without the prior written consent of the
undersigned Landlord. WITNESS: Landlord: Leonard Diener Investment Co.
/s/ Mary P. Cancro By: /s/ Lawrence Diener
- ----------------------- -----------------------
Lawrence Diener
State of New Jersey )
) SS:
County of Bergen )
On this 11th day of December in the year 1997, before me personally came
Lawrence Diener who, I am satisfied, signed, sealed and delivered the same as
his act and deed for the purpose therein expressed.
/s/ Mary P. Cancro
-----------------------
Notary Public of New Jersey
Mary P. Cancro
My commission expires: 7/30/98
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LEASE AGREEMENT
BETWEEN
BEATRICE DIENER
AND
JESSE SAYEGH
DATED: May 29, 1990
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Landlord THIS LEASE AGREEMENT, made this 29th day of May, 1990, between
BEATRICE DIENER, D/B/A LEONARD DIENER COMPANY, located at 28
Millburn Avenue in the Township of Springfield in the County of
Union and State of New Jersey, herein designated as the Landlord,
Tenant and JESSE Y. SAYEGH, located at 317 N. 11th Street in the
Borough of Prospect Park in the County of Passaic and State of
New Jersey, herein designated as the Tenant;
Premises WITNESSETH THAT the Landlord does hereby lease to the Tenant and
the Tenant does hereby rent from the Landlord the following
described premises: Premises consisting of movie theater known as
Cinema 23 and located at Pilgrim Shopping Plaza, Pompton Avenue,
Route 23, Verona, New Jersey,
Term For a term of twenty (20) years commencing on June 1, 1990, and
ending on May 31, 2010, to be used and occupied only and for no
other purpose than as a theater for the presentation of
performances on film,
UPON THE FOLLOWING CONDITIONS AND COVENANTS:
Payment of Rent
1st: The Tenant covenants and agrees to pay to the Landlord, as
fixed rent for and during the term hereof, a guaranteed minimum annual rent as
follows: for the period from June 1, 1990 until August 15, 1990, or until Tenant
opens for business, whichever is sooner, the sum of $3,333.33 per month; for and
during the remainder of the first lease year of the term the sum of $6,666.67
per month; for and during the second lease year of the term the sum of $80,000
($6,666.67 per month); for and during each lease year from the third lease year
through the fifteenth lease year of the term the sum of $103,000 per annum
($8,583.33 per month), for and during each lease year from the sixteenth lease
year through the twentieth lease year of the term the sum of $125,000 per annum
($10,416.67 per month).
All rents are payable in advance without set-off or deduction of
any kind, upon the first day of each calendar month of the Tenancy at the office
of the Landlord, or such other place as the Landlord may from time to time
designate.
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Percentage Rent
Tenant agrees to pay to Landlord as rent, in addition to the
foregoing fixed rent, percentage rent as follows: 10% of the annual gross sales
(as hereinafter defined) of the demised premises in excess of $800,000.00 for
and during each of the first and second lease years of the term hereof; 10% of
the annual gross sales of the demised premises in excess of $1,030,000 for and
during each lease year from the third through the fifteenth lease years of the
term hereof; 10% of the annual gross sales of the demised premises in excess of
$1,250,000 for and during each lease year from the sixteenth through the
twentieth lease years of the term hereof.
On or before the 25th day after the expiration of each
three-month's period, Tenant shall submit to Landlord a statement signed by an
Officer of Tenant showing, in reason able detail, the amount of gross sales of
the demised premises during the preceding three-month period. Within thirty (30)
days after the end of each lease year, Tenant shall deliver to Landlord a
statement of gross sales made in, at, on or from the demised premises for such
lease year, certified by an Officer of Tenant that the same truly reports
Tenant's gross sales. Tenant shall simultaneously with the delivery of said
statement, make payment of any percentage rent due for such lease year.
Each lease year during the term hereof shall be considered as an
independent accounting period for the purposes of computing and determining the
amount of percentage rent if any payable hereunder. The amount of gross sales in
any lease year shall not be carried over into any other lease year.
The term "gross sales" includes gross paid box office receipts
defined as the amounts actually paid to Tenant by patrons of all of the theaters
at the demised premises for admission thereto, less any admissions taxes paid by
such patrons and received by the Tenant or included in the admission prices and
which taxes are to be transmitted to any governmental authority or collector
entitled to receive payment thereof (however, Tenant shall not deduct any
corporate income, gross receipts or franchise or property tax imposed on Tenant
or its income in determining gross box office receipts and shall include any
amounts received on passes for admission to the said theaters). "Gross sales"
shall also include money received from the sale of candies, confections,
beverages, popcorn, food products, souvenir programs, souvenir books,
cigarettes, tobacco and merchandise, novelties and records normally sold and
incidental to the exhibition of motion pictures. There shall be excluded
therefrom any sums collected and paid out for any sales tax or tax based upon
the sale or sales of merchandise and required
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by law, whether now or hereafter in force to be paid by Tenant or collected from
its customers, to the extent that such taxes are to be charged separately and to
be remitted by Tenant to the taxing authorities.
Tenant shall and hereby agrees to keep in the demised premises
during the term hereof, for a period of two (2) consecutive years following the
end of each lease year, a permanent, complete and accurate record of all gross
sales of merchandise and services, as heretofore defined, and all revenue
derived from business conducted in the demised premises for such lease year.
Tenant further agrees to keep, retain and preserve for at least one (1) year
after the expiration of each lease year all original sales records and all
original sales records and sale slips or sales checks and other pertinent
original sales records. Accurate non-reset/able cash registers or other modern
systems shall be installed and kept, or caused to be installed and kept, by the
Tenant within the demised premises which shall show, record and preserve, in
complete detail, all items making up gross sales, as hereinabove defined. All
such records, including sales tax reports and business and occupation tax
reports, shall be open to the inspection and audit of Landlord and its agents at
all reasonable times during ordinary business hours, excluding only those tax
returns preprepared on a consolidated basis with any other operation not subject
to this Agreement. Tenant shall also submit to Landlord on or before the
thirtieth (30th) day following the end of each lease year at the place then
fixed for the payment of rent, a complete audited statement made and certified
by duly authorized officer of Tenant, showing accurately and in reasonable
detail the amount of gross sales made by Tenant, and its sublessees,
concessionaires, or licensees, if any, upon and within the demised premises,
during the preceding lease year or fractional lease year, if any, and shall
submit on or before the 30th day following the expiration or termination of the
term a like statement covering the preceding lease year, or fractional lease
year, if any.
The receipt by Landlord of any statement or any payment of
percentage rent for any period or the failure of Landlord to make an audit for
said period shall not bind Landlord as to the correctness of the statement or
the payment, nor bar Landlord from collecting at any time thereafter the
percentage rent due for said period. If any audit by Landlord or its agents of
Tenant's records shall reveal a deficiency in any payment of percentage rent,
Tenant shall forthwith pay to Landlord the amount of the deficiency together
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with interest at the rate of twelve (12%) percent per annum from the date when
said payment should have been made, together with the Reasonable cost of such
audit.
It is agreed that nothing contained in this Lease shall be deemed
or construed as creating a partnership or joint venture between Landlord and
Tenant, or between Landlord and any other party, or cause Landlord to be
responsible in any way for the debts or obligations of Tenant, or any other
party.
The term "lease year" as used herein shall mean a period of
twelve (12) calendar months commencing on any anniversary date of the
commencement of the term of this Lease. The "first lease year" as used herein
shall mean a period of twelve (12) calendar months commencing upon the
commencement date of the term of this Lease.
Repairs and Care
2ND: The Tenant has examined the premises and has entered into
this lease without any representation on the part of the Landlord as to the
condition thereof. The Tenant shall take good care of the premises and shall at
the Tenant's own cost and expense, make all replacements and repairs, including
painting and decorating, and shall maintain the premises in good condition and
state of repair, and at the end or other expiration of the term hereof, shall
deliver up the rented premises in good order and condition, wear and tear from a
reasonable use thereof, and damage by the elements not resulting from the
neglect or fault of the Tenant, excepted. The Tenant shall neither encumber nor
obstruct the sidewalks, driveways, yards, entrances, hallways, stairs and rear,
but shall keep and maintain the same in a clean condition, free from debris,
trash, refuse, snow and ice.
Damage & Repairs
3RD: The Tenant agrees to be responsible for any damage to the
property of the Landlord which may result from any use of the demised premises,
or any act done thereon by the license of the Tenant, express or implied. The
Tenant shall repair the said damage or replace or restore any destroyed parts of
the premises, as speedily as possible, at the Tenant's own cost and expense.
Tenant agrees to replace all glass broken, damaged or destroyed in any manner
whatever, the Tenant assuming all responsibility for the glass in the premises
herein demised, and to cause such liability to be protected by plate glass
insurance at Tenant's expense, and further to deposit the plate glass insurance
policy or certificate showing such insurance in effect with Landlord during the
term of this Lease.
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Alterations and Improvements
4TH: No alterations, additions or improvements shall be made
without the written consent of the Landlord Improvements which shall not be
unreasonably withheld. Any such alterations, additions or improvements must be
done in a workman like manner in keeping with all building codes and regulations
and in no way harm the structure of the demised premises. It is understood that
Tenant intends to subdivide the one existing theater at the demised premises
into five separate theaters. Tenant shall comply with the conditions contained
in a letter from the Township of Cedar Grove Director of Community Development
dated April 17, 1990, as modified by letter of April 30, 1990. At the expiration
of this Lease or any extension thereof, Tenant, at its expense, upon written
request from Landlord must restore the within demised premises to its original
condition, except as shall have been modified by the above permitted subdivision
and alterations made pursuant thereto. The Landlord reserves the right, before
approving any such alterations, additions or improvements to require the Tenant
to furnish him a good and sufficient bond, conditioned that it will save
Landlord harm less from the payment of any claims either by way of damages or
liens. All of such alterations, additions or improvements shall be made solely
at the expense of the Tenant; and the Tenant agrees to protect, indemnify and
save harmless the Landlord on account of any injury to third persons or
property, by reason of any such alterations, additions or improvements, and to
protect, indemnify and save harmless Landlord from the payment of any claim of
any kind or character on account of bills for labor or material in connection
therewith.
Signs
5TH: The Tenant shall not place nor allow to be placed any signs
of any kind whatsoever, upon, in or about the said premises or any part thereof,
except of a design and structure and in or at such places as may be indicated
and consented to by the Landlord in writing which shall not be unreasonably
withheld. In case the Landlord or the Landlord's agents, employees or
representatives shall deem it necessary to remove any such signs in order to
paint or make any repairs, alterations or improvements in or upon said premises
or any part thereof, they may be so removed but shall be replaced at true
Landlords expense when said repairs, alterations or improvements shall have been
completed. Any signs permitted by the Landlord shall at all times conform with
all municipal ordinances or other laws and regulations applicable thereto.
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Utilities
6TH: Tenant shall, at its own cost and expense, pay all charges
for water, gas, electricity, heat, sewer rentals or charges and any other
utility charges, including sprinkler charges, incurred by or as a result of
Tenant in the use of the demised premises.
Compliance with Laws, etc.
7TH: The Tenant shall promptly comply with all laws, ordinances,
rules, regulations, requirements and orders at any etc. time issued or in force
applicable to the demised premises or to the Tenant's use and occupancy thereof,
of the City, County, State and Federal Governments and Landlord, and of each and
every department, bureau and official thereof, and of the Board of Fire
Underwriters having jurisdiction thereof.
Liability Insurance
8TH: The Tenant, at Tenant's own cost and expense, shall obtain
or provide and keep in full force for the benefit of the Landlord, during the
term hereof, general public liability insurance insuring the Landlord against
any and all liability or claims of liability arising out of, occasioned by or
resulting from any accident or otherwise in or about the leased premises, for
injuries to any person or person, for limits of not less than $1,000,000 for
injuries to one person and $3,000,000 for injuries to more than one person, in
any one accident or occurrence, and for loss or damage to the property of any
person or persons, for not less than $500,000. The policy or policies of
insurance shall be of a company or companies authorized to do business in this
State and shall be delivered to the Landlord, together with evidence of the
payment of the premiums therefor, not less than fifteen (15) days prior to the
commencement of the term hereof or of the date when the Tenant shall enter into
possession, whichever occurs sooner. At least fifteen (15) days prior to the
expiration or termination date of any policy, the Tenant shall deliver a renewal
or replacement policy with proof of the payment of the premium therefor. The
Tenant also agrees to and shall save, hold and keep harmless and indemnify the
Landlord from and for any and all claims and liability for losses or damage to
property or injuries to persons occasioned wholly or in part by or resulting
from any acts or omissions by the Tenant or the Tenant's agents, employees,
guests, licensees, tees, subtenants, assignees or successors, or for any cause
or reason whatsoever arising out of or by reason of the occupancy by the Tenant
and the conduct of the Tenant's business.
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Assignment
9TH: This Lease shall not be assigned, or the demised premises
underlet in whole or in part, without the written consent of the Landlord in
each instance and such consent having been given, the Tenant shall nevertheless,
remain primarily liable to perform all covenants and conditions hereto and to
guarantee such performance by his assignee or subtenant. Landlord's consent
shall not be unreasonably withheld.
Restriction on Use
10TH: The Tenant shall not occupy or use the leased premises or
any part thereof, nor permit or suffer the same to be occupied or used for any
purposes other than as herein limited, nor for any purpose deemed unlawful,
disreputable, or extra hazardous, on account of fire or other casualty. Tenant
shall not exhibit any X-rated or unrated motion pictures at the demised
premises.
Subordination
11TH: This Lease shall be subject and subordinate at all times,
to the lien of the mortgages now or hereafter on the demised premises, and to
all advances made or hereafter to be made upon the security thereof, and subject
and subordinate to the lien of any mortgage or mortgages which at any time may
be made a lien upon the premises, and subject and subordinate to any lease or
other arrangement or right to possession under which Landlord is in control of
the demised premises and to the rights of the owner or owners of the demised
premises and of the land or buildings of which the demised premises are a part.
The Tenant will execute and deliver such further instrument or instruments
subordinating this Lease to the lien in accordance with the foregoing. The
Tenant hereby appoints the Landlord the attorney-in-fact of the Tenant,
irrevocable, to execute and deliver any such instrument or instruments for the
Tenant, in the event Tenant fails to return such instrument or instruments to
Landlord within ten (10) days of receipt of same from Landlord. Notwithstanding
the above, the Tenant's right to possession of the premises shall not be
disturbed if the Tenant is not in default and as long as the Tenant shall pay
the rent and other amounts required to be paid to the Landlord or the Landlord's
successor in interest as same are due pursuant to the terms hereof, and has
observed and performed all the provisions of this Lease unless and until the
Lease is otherwise terminated pursuant to its terms.
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Condemnation and Eminent Domain
12TH: If the land and premises leased herein, or of which the
leased premises are a part, or any portion thereof, shall be taken under eminent
domain or condemnation proceedings or if suit or other action shall be
instituted for the taking or condemnation thereof, or if in lieu of any formal
condemnation proceeding or actions, the Landlord shall grant an option to
purchase and or shall sell and convey the said premises or any portion thereof,
to the governmental or other public authority, agency, body or public utility
seeking to take said land and premises or any portion thereof, then this Lease,
at the option of the Landlord, shall terminate and the term hereof shall end as
of such date as the Landlord shall fix by notice in writing; and the Tenant
shall have no claim or right to claim or be entitled to any portion of any
amount which may be awarded as damages or paid as the result of such
condemnation proceedings or paid as the purchase price for such option, sale or
conveyance in lieu of formal condemnation proceedings; and all rights of the
Tenant to damages, if any are hereby assigned to the Landlord. The Tenant agrees
to execute and deliver any instruments as may be deemed necessary or required to
expedite any condemnation proceedings or to effectuate a proper transfer of
title to such governmental or other public authority, agency, body or public
utility seeking to take or acquire the said lands and premises or any portion
thereof. If Tenant shall fail to execute such instruments as may be required to
Landlord, or to undertake such steps as may be requested as herein stated,
within ten (10) days of written notice from Landlord, Landlord shall be deemed
the duly authorized irrevocable agent and attorney-in-fact of Tenant to execute
such instruments and undertake such steps in as herein stated in and on behalf
of Tenant. It is agreed and understood, however, that Landlord does not reserve
to itself, and the Tenant does not assign to Landlord, any damages payable for
trade fixtures installed by Tenant at its own cost and expense and which are not
part of the realty. Notwithstanding anything herein to the contrary, Landlord
shall allocate to Tenant out of Landlord's condemnation award an amount
reasonably related to Tenant's fair share of leasehold improvements installed by
Tenant to prepare same for its use and occupancy. If the parties cannot agree on
the amount to be allocated to Tenant, this issue shall be submitted by the
parties to arbitration for resolution. Nothing herein contained shall prevent
Tenant from pursuing any separate relocation assistance award to which Tenant is
entitled under applicable law.
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Fire & Other Casualty
13TH: In case of fire or other casualty, the Tenant shall give
immediate notice to the Landlord. If the premises shall be partially damaged by
fire, the elements or other casualty, the Landlord shall repair the same as
speedily as practicable, but the Tenant's obligation to pay the rent hereunder
shall not cease. However, if one-third (1/3) or more of the premises shall be
damaged, Tenant shall be entitled to a proportionate abatement of rent. If the
premises be so extensively and substantially damaged as to render them
untenantable, then rent shall cease until such time as the premises shall be
made tenantable by Landlord. However, if in the opinion of the Landlord, the
premises be totally destroyed or so extensively and substantially damaged as to
require practically a rebuilding thereof, then the rent shall be paid up to the
time of such destruction and then and from thenceforth this Lease shall come to
an end. In no event, however, shall the provisions of this clause become
effective or be applicable if the fire or other casualty and damage shall be the
result of the carelessness, negligence or improper conduct of the Tenant or the
Tenant's agents, employees, guest, licensees, invitees, subtenants, assignees or
successors. In such case, the Tenant's liability for the payment of the rent and
the performance of all the covenants, conditions and terms hereof on the
Tenant's part to be performed shall continue and the Tenant shall be liable to
the Landlord for the damage and loss suffered by the Landlord. If the Tenant
shall have been insured for its interest in property of the Landlord against any
of the risks herein covered, then the proceeds of such insurance shall be paid
over to the Landlord to the extent of the Landlord's actual costs and expenses
to make the repairs hereunder, and such insurance carriers shall have no
recourse against the Landlord for reimbursement. The Landlord shall have no
claim against any insurance proceeds under any policy of the Tenant insuring the
Tenant's own property or business interruption, but only against such proceeds
as relate to building alterations becoming part of the real estate but paid for
by the Tenant.
Reimbursement of Landlord
14TH: If the Tenant shall fail or refuse to comply with and
perform any condition and covenants of the within Lease within 15 days after
written notice from Landlord, the Landlord may, if the Landlord so elects, carry
out and perform such conditions and covenants, at the cost and expense of the
Tenant, and the said cost and expense shall be payable
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on demand, or at the option of the Landlord shall be added to the installment of
rent due immediately thereafter but in no case later than one month after such
demand, whichever occurs sooner, and shall be due and payable as such. This
remedy shall be in addition to such other remedies as the Landlord may have
hereunder by reason of the breach by the Tenant of any of the covenants and
conditions in this Lease contained.
Inspection & Repair
15TH: The Tenant agrees that the Landlord and the Landlord's
agents, employees or other representatives, shall have the right to enter into
and upon the said premises or any part thereof, at all reasonable hours, upon
reasonable notice, for the purpose of examining the same or making such repairs
or alterations therein as may be necessary for the safety and preservation
thereof. This clause shall not be deemed to be a covenant by the Landlord nor be
construed to create an obligation on the part of the Landlord to make such
inspection or repairs.
Right to Exhibit
16TH: The Tenant agrees to permit the Landlord and the Landlord's
agents, employees or other representatives to show the premises to persons
wishing to rent or purchase the same, upon reasonable notice to Tenant, and
Tenant agrees that on and after six months next preceding the expiration of the
term hereof, the Landlord or the Landlord's agents, employees or other
representatives shall have the right to place notices on the front of said
premises or any part thereof, offering the premises for rent or for sale; and
the Tenant hereby agrees to permit the same to remain thereon without hindrance
or molestation.
Increase of Insurance Rates
17TH: If due to Tenant's occupancy it shall be impossible to
obtain fire and other hazard insurance on the buildings and improvements on the
leased premises, in an amount and in the form and in insurance companies
acceptable to the Landlord, the Landlord may, if the Landlord so elects at any
time thereafter, terminate this Lease and the term hereof, upon giving to the
Tenant thirty (30) days notice in writing of the Landlord's intention so to do,
and upon the giving of such notice, this Lease and the term thereof shall
terminate. If by reason of the use to which the premises are put by the Tenant
or character of or the manner in which the Tenant's business is carried on, the
insurance rates for fire and other hazards shall be increased, the Tenant shall
upon demand pay to the Landlord, as rent, the amounts by which the
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premiums for such insurance are increased. Such payment shall be paid with the
next installment of rent but in no case later than one month after such demand,
whichever occurs sooner.
Removal of Tenant's Property
18TH: Any equipment, fixtures, goods or other property of the
Tenant, not removed by the Tenant upon the termination of this Lease, or upon
any quitting, vacating or abandonment of the premises by the Tenant, or upon the
Tenant's eviction, shall be considered as abandoned and the Landlord shall have
the right, without any notice to the Tenant, to sell or otherwise dispose of the
same, at the expense of the Tenant, and shall not be accountable to the Tenant
for any part of the proceeds of such sale, if any.
Remedies upon Tenant's Default
19TH: If there should occur any default on the part of the Tenant
in the performance of any conditions and covenantsherein contained, and said
default continues for five (5) days after written notice from Landlord in the
case of non-payment of rent and for fifteen (15) days in the case of any other
default, or if during the term hereof the premises or any part thereof shall be
or become abandoned or deserted, vacated or vacant or should the Tenant be
evicted by summary proceedings or otherwise, the Landlord, in addition to any
other remedies herein contained or as may be permitted by law, may either by
force or otherwise, without being liable for prosecution therefor, or for
damages, re-enter the said premises and the same have and again possess and
enjoy; and as agent for the Tenant or otherwise, re-let the premises and receive
the rents therefor and apply the same, first to the payment of such expenses,
reasonable attorney fees and costs, as the Landlord may have been put to in
re-entering and repossessing the same and in making such repairs and alterations
as may be necessary; and second to the payment of the rents due hereunder. The
Tenant shall remain liable for such rents as may be in arrears and also the
rents as may accrue subsequent to the re-entry by the Landlord, to the extent of
the difference between the rents reserved hereunder and the rents, if any,
received by the Landlord during the remainder of the unexpired term hereof,
after deducting the aforementioned expenses, fees and costs; the same to be paid
as such deficiencies arise and are ascertained each month.
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Termination on Default
20TH: Upon the occurrence of any of the contingencies set forth
in the preceding clause, or should the Tenant be adjudicated as bankrupt,
insolvent or placed in receivership, or should proceedings be instituted by or
against the Tenant for bankruptcy, insolvency, receivership, agreement of
composition or assignment for the benefit of creditors, or if this Lease or the
estate of the Tenant hereunder shall pass to another by virtue of any court
proceedings, writ of execution, levy, sale, or by operation of law, the Landlord
may, if the Landlord so elects, at any time thereafter, terminate this Lease and
the term hereof, upon giving to the Tenant or to any trustee, receiver, assignee
or other person in charge of or acting as custodian of the assets or property of
the Tenant, five (5) days' notice in writing, of the Landlord's intention so to
do. Upon the giving of such notice, this Lease and the term hereof, shall end on
the date fixed in such notice as if the said date was the date originally fixed
in this Lease for the expiration hereof; and the Landlord shall have the right
to remove all persons, goods, fixtures and chattels therefrom, by force or
otherwise, without liability for damage.
Non-Liability of Landlord
21ST: The Landlord shall not be liable for any damage or injury
which may be sustained by the Tenant or any other person, as a consequence of
the failure, breakage, leakage or obstruction of the water, plumbing, steam,
sewer, waste or soil pipes, roof, drains, leaders, gutters, valleys, downspouts
or the like or of the electrical, gas, power, conveyor, refrigeration,
sprinkler, air conditioning or heating systems, elevators or hoisting equipment;
or by reason of the elements; or resulting from the carelessness, negligence or
improper conduct on the part of any other Tenant or this or any other Tenant's
agents, employees, guests, licensees, invitees, subtenants, assignees or
successors; or attributable to any interference with, interruption of or
failure, beyond the control of the Landlord, of any services to be furnished or
supplied by the Landlord.
Non-Waiver by Landlord
22ND: The various rights, remedies, options and elections of the
Landlord, expressed herein, are cumulative, and the failure of the Landlord to
enforce strict performance by the Tenant of the conditions and covenants of this
Lease or to exercise any election or option or to resort to have recourse to any
remedy herein conferred or the acceptance by
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the Landlord of any installment of rent after any breach by the Tenant, in any
one or more instances, shall not be construed or deemed to be a waiver or a
relinquishment for the future by the Landlord of any such conditions and
covenants, options, elections or remedies, but the same shall continue in full
force and effect.
Non-Performance by Landlord
23RD: This Lease and the obligation of the Tenant to pay the rent
hereunder and to comply with the covenant and conditions hereof, shall not be
affected, curtailed, impaired or excused because of the Landlord's inability to
supply any service or material called for herein, by reason of any rule, order,
regulation or preemption by any governmental entity, authority, department,
agency or subdivision or for any delay which may arise by reason of negotiations
for the adjustment of any fire, or other casualty loss or because of strikes or
other labor trouble or for any cause beyond the control of the Landlord.
Validity of Lease
24TH: The terms, conditions, covenants and provisions of this
Lease shall be deemed to be severable. If any clause or provision herein
contained shall be adjudged to be invalid or unenforceable by a court of
competent jurisdiction or by operation or any applicable law, it shall not
affect the validity of any other clause or provision herein, but such other
clauses or provisions shall remain in full force and effect.
Notices
25TH: All notices required under the terms of this Lease shall be
given and shall be complete by mailing such notices by certified or registered
mail, return receipt requested, to the address of the parties as shown at the
head of this Lease, or to such other address as may be designated in writing,
which notice of change of address shall be given in the same manner.
Title and Quiet Enjoyment
26TH: The Landlord covenants and represents that the Landlord is
the owner of the premises herein leased and has the right and authority to enter
into, execute and deliver this Lease; and does further covenant that the Tenant
on paying the rent and performing the conditions and covenants herein contained,
shall and may peaceably and quietly have, hold and enjoy the leased premises for
the term aforementioned.
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Entire Contract
27TH: This Lease contains the entire contract between the
parties. No representative, agent or employee of the Landlord has been
authorized to make any representations or promises with reference to the within
letting or to vary, alter or modify the terms hereof. No additions, changes or
modifications, renewals or extensions hereof, shall be binding unless reduced to
writing and signed by the Landlord and the Tenant.
Attorney's Fees
28TH: If the Tenant shall at any time be in default hereunder,
and if the Landlord shall institute an action or summary proceeding against the
Tenant based upon such default, or if the Landlord shall cure such default or
defaults for the act of Tenant, then the Tenant will reimburse the Landlord for
the expense of attorney's fees and disbursements thereby incurred by the
Landlord, so far as the same are reasonable in amount. Also, so long as the
Tenant shall be a Tenant hereunder the amount of such expense shall be deemed to
be "additional rent" hereunder and shall be due from the Tenant to the Landlord
on the first day of the month following the incurring of such respective
expenses.
Real Estate Taxes
29TH: Tenant covenants and agrees to pay as additional rent its
proportionate share of all real estate taxes, assessments, water rates and
charges, and other governmental charges, general and special, ordinary and
extraordinary, unforeseen as well as foreseen of any kind or nature whatsoever,
including, but not limited to assessments for public improvements or benefits
which shall be laid, assessed, levied or imposed upon and become due and
payable, and a lien upon the land and building of the demised premises or the
shopping center of which the demised premises forms a part, for any and all tax
years during the term hereof (all of which real estate taxes, assessments,
charges, levies or other governmental charges are referred to as "Impositions").
The sum of the impositions assessed against the shopping center for any tax year
during the term hereof shall be deemed to be the impositions assessed against
the shopping center for said tax year. Tenant's proportionate share of any and
all impositions assessed against the demised premises or the shopping center
premises of which same form a part for any tax year shall be the product of (a)
the amount of the impositions assessed against the shopping center for said tax
14
<PAGE>
year and (b) a fraction the numerator of which is the square footage of the
floor area of the demised premises (11,000 sq. ft.) and the denominator of which
is the total square footage of the floor area of all stores in the shopping
center (47,700 sq. ft.) determined as of the commencement of the said tax year.
From the commencement date hereof and thereafter, during each
period during which real estate taxes are being paid by Landlord based on
preliminary tax bills, Tenant shall pay to Landlord, on the first day of each
and every month during such period, one twelfth (l/12th) of Tenant's pro rata
share of the annualized preliminary applicable taxes then being paid by
Landlord. Open receipt by Landlord of final real estate tax bills and bills for
additional taxes or assessments, Tenant shall pay to Landlord any unpaid portion
of its pro rata share of such taxes in equal monthly installments on the first
day of each and every month during the balance of the calendar year.
All real estate taxes which shall become payable for the first
and last tax years of the term hereof shall be apportioned pro rata between
Landlord and Tenant in accordance with the respective number of months during
which each party shall be in possession of the demised premises in said
respective tax year.
If Landlord shall obtain a remission or a refund of all or any
part of the real estate taxes heretofore paid by Tenant for any year, Landlord
shall promptly refund to Tenant (or credit Tenant with) its proportionate share
of such remission or refund, after deduction of all expenses incurred in
connection therewith.
If at any time during the term of this Lease the methods of
taxation prevailing at the commencement of the term hereof shall be altered so
that in lieu of or as a supplement to or a substitute for the whole or any part
of the real estate taxes or assessments now levied, assessed or imposed, there
is imposed (i) a tax, assessment, levy, imposition or a charge, wholly or
partially as a capital levy or otherwise, on the rents received therefrom or
(ii) a tax, assessment, levy (including but not limited to any municipal, state
or federal levy), imposition or charge measured by or based in whole or in part
upon the premises and imposed upon the Landlord, or (iii) a license fee measured
by the rent payable under this Lease, then all such taxes, assessments, levies,
impositions and charges, or the part thereof so measured or based shall be
deemed to be included in the
15
<PAGE>
general real estate taxes and assessments payable by the Tenant pursuant to this
paragraph and the Tenant shall pay and discharge the same as herein provided in
respect of the payment of general real estate taxes and assessments. As employed
in this Article, "shopping center" shall be deemed to include that portion of
Landlord's shopping center property located within the Township of Cedar Grove,
New Jersey.
Common Area Maintenance
30TH: Tenant shall pay to Landlord, as additional rent, its pro
rata share of the total annual Common Area Maintenance Cost, (hereinafter called
"CAM") incurred in the shopping center. Tenant's pro rata share shall, in each
instance, be determined by multiplying each year's CAM by a fraction, the
numerator of which shall be the number of square feet of floor area of the
demised premises (11,000 sq. ft.), and the denominator of which shall be the
total square footage of the floor area of all stores in the shopping center
(195,370 sq. ft.).
On the first day of each and every month of the term of this
Lease or any extensions or renewals thereof, Tenant shall pay to Landlord, on
account of and as part of its share of CAM, one twelfth (1/12th) of Landlord's
reasonably estimated share of Tenant's annual pro rata share of CAM, as such sum
shall be adjusted annually to reflect that year's actual expense.
Within ninety (90) days of the end of any calendar year, Landlord
shall compute the annual CAM for said year and forward to Tenant a schedule in
reasonable detail setting forth said CAM and the computation of Tenant's pro
rata share for the period of Tenant's occupancy during said year. Tenant shall
be entitled to a credit against its pro rata share for the total amount received
by Landlord from Tenant during said year on account of CAM (other than payments
against prior years). In the event Tenant's payments on account have exceeded
Tenant's pro rata share, Landlord's statement shall be accompanied by its check
for the amount due Tenant; in the event there remains any unpaid balance due
Landlord from Tenant, said balance shall be due and payable within twenty (20)
days of receipt of Landlord's statement, and if not so paid, the amount thereof
shall be added to the next accruing monthly installment of fixed rent, and shall
be collectible as such.
For the purposes hereof, CAM shall mean the total cost and
expense incurred by Landlord in operating, maintaining and repairing the common
areas of the shopping center, including without limitation, all costs and
expenses of operating, main-
16
<PAGE>
taining, refurbishing, redecorating, repairing and replacing the lighting and
drainage systems in and for the common areas; paving, curbs, islands and
walkways; all equipment and facilities used in and for maintenance; cleaning;
landscaping and gardening; removal of snow, ice, debris, garbage or other
rubbish and refuse; the costs of personnel to implement such service, to direct
parking and police the Shopping Center.
CAM which shall become payable during the first and last calendar
years of the term hereof shall be apportioned pro rata between Landlord and
Tenant in accordance with the respective number of months during which each
party shall be in possession of the demised premises in such respective calendar
years.
As employed in this Article, "shopping center" shall be deemed to
include Landlord's entire shopping center property located within the Townships
of Verona and Cedar Grove, New Jersey.
Mechanics'Liens
31ST: If any mechanics' or other liens shall be created or filed
against the leased premises by reason of labor performed or materials furnished
for the Tenant in the erection, construction, completion, alteration, repair or
addition to any building or improvement, the Tenant shall within ten (10) days
thereafter, at the Tenant's own cost and expense, cause such lien or liens to be
satisfied and discharged of record together with any Notices of Intention that
may have been filed. Failure so to do, shall entitle the Landlord to resort to
such remedies as are provided herein in the case of any default of this Lease,
in addition to such as are permitted by law.
Waiver of Subrogation Rights
32ND: The Tenant waives all rights of recovery againstthe
Landlord or Landlord's agents, employees or other representative, for any loss,
damages or injury of any nature whatsoever to the property or persons for which
the Tenant is insured. The Tenant shall obtain from the Tenant's insurance
carriers and will deliver to the Landlord waivers of the subrogation rights
under the respective policies, if available. Waivers of subrogation shall be
mutual by both Landlord and Tenant, provided same can be done without cost.
Security
33RD: Tenant has this day deposited with the Landlord the sum of
$25,000 as security for the payment of the
17
<PAGE>
rent hereunder and the full and faithful performance by the Tenant of the
covenants and conditions on the part of the Tenant to be performed. Said sum
shall be returned to the Tenant, without interest, after the expiration of the
term hereof, provided that the Tenant has fully and faithfully performed all
such covenants and conditions and is not in arrears in rent. During the term
hereof, the Landlord may, if the Landlord so elects, have recourse to such
security, to make good any default by the Tenant, in which event the Tenant
shall, on demand, promptly restore said security to its original amount.
Liability to repay said security to the Tenant shall run with the reversion and
title to said premises, whether any change in ownership thereof be by voluntary
alienation or as the result of judicial sale, foreclosure or other proceedings,
or the exercise of a right of taking or entry by any mortgagee. The Landlord
shall assign or transfer said security, for the benefit of the Tenant, to any
subsequent owner or holder of the reversion or title to said premises, in which
case the assignee shall become liable for the repayment thereof as herein
provided, and the assignor shall be deemed to be released by the Tenant from all
liability to return such security. This provision shall be applicable to every
alienation or change in title and shall in no wise be deemed to permit the
Landlord to retain the security after termination of the Landlord's ownership of
the reversion or title. The Tenant shall not mortgage, encumber or assign said
security without the written consent of the Landlord.
Sidewalks, etc., Tenant Parking
34TH: Tenant shall not permit to exist in the demised premises or
any part of the common area:
a. The use of sidewalks, parking areas, roadways, means of
ingress or egress, or other common areas for the sale, display or storage of any
merchandise or any property of the Tenant; all business shall be conducted
within the demised premises;
b. The parking of any vehicle by the Tenant or any of its
employees in the shopping center, except in such area as may be designated
"employee parking" from time to time by Landlord.
Limitation of Landlord's Liability
35TH: Anything contained in this Lease to the contrary
notwithstanding Tenant agrees that it shall look solely to the estate and
property of the Landlord in the demised premises, and subject to prior rights of
any mortgagee of the premises, for the collection of any judg-
18
<PAGE>
ment (or other judicial process) requiring the payment of money by Landlord in
the event of any default or breach by Landlord with respect to any of the terms,
covenants and conditions of this Lease to be observed and/or performed by
Landlord, and no other assets of the Landlord shall be subject to levy,
execution or other procedures for the satisfaction of Tenant's remedies. In the
event Landlord transfers this Lease, except as collateral security for a loan,
Landlord will, upon such transfer, be released from all liability and
obligations hereunder.
Attornment
36TH: Tenant agrees neither the cancellation nor the termination
of any ground or underlying Lease, nor any foreclosure of a mortgage affecting
the fee title of the demised premises, nor any foreclosure proceedings brought
by the holder of any such mortgage to recover possession of the demised premises
shall, by operation of law or otherwise, result in the cancellation or
termination of this Lease or the obligations of the Tenant hereunder, and Tenant
covenants and agrees to attorn to any successor to the Landlord's interest in
the demised premises or to such holder of such mortgage or to the purchaser of
the demised premises in foreclosure, provided that in any such case this Lease
and Tenant's interest is not disturbed and is recognized by any successor to
Landlord's interests hereunder or by any such mortgagee or purchaser.
Estoppel Letter
37TH: Tenant agrees upon request from Landlord or
Landlord's mortgagee(s) to furnish either or both of same with evidence setting
forth the following:
a. This Lease is in full force and effect;
b. Possession of the premises is accepted by the Tenant;
c. All work required to be performed by Landlord in the premises
has been fully completed and/or constructed in a good and workmanlike manner in
accordance with all governmental regulations applicable thereto to the best of
Tenant's knowledge;
d. Confirmation of the commencement of the Lease term;
e. Confirmation that Tenant is in occupancy of the demised
premises, is paying rent on a current basis with no rental offsets or claims,
and that no rent has been prepaid except as specifically set forth in the Lease.
19
<PAGE>
Lesser Amount of Rent
38TH: No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly minimum rent and additional rent herein stipulated shall
be deemed to be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment of rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy in this Lease or at law
provided.
Real Estate Broker
39TH: Tenant warrants and represents that it has not dealt or
negotiated with any real estate broker or salesman in connection with this Lease
Agreement other than Alexander Summer Co., and that it shall indemnify and hold
Landlord harmless of any real estate commissions, fees, charges or the like
arising out of this transaction not occasioned by Landlord's acts. Landlord
shall pay any real estate brokerage commission due Alexander Summer Co. pursuant
to and in accordance with a separate agreement by and between said Alexander
Summer Co. and Landlord.
Landlord's Repairs
40TH: Landlord shall maintain the roof and outside wallsof the
premises, unless due to any acts of omission or commission of Tenant, its
agents, servants or employees.
Continuous Use
41ST: Tenant shall, during the term of this Lease, continuously
use the demised premises for the purpose stated in this Lease, carrying on
therein Tenant's business under taking diligently, assiduously and
energetically. Tenant shall keep the premises open and available for business
activity therein during all usual days and hours for such business in the
vicinity and during such periods and hours as are customary in the shopping
center except when prevented by strikes, fire, casualty or other causes beyond
Tenant's reasonable control.
Submission of Lease
42ND: The submission of this Lease for examination does not
constitute a reservation of or option for the premises and this Lease becomes
effective as a Lease only upon execution and delivery thereof by Landlord and
Tenant.
Opening for Business
43RD: In the event Tenant fails to open the demised premises for
business within 150 days after this Lease Agreement is signed by the parties,
Landlord may, at its sole election, terminate the within Lease Agreement.
20
<PAGE>
In the event Landlord exercises its option to terminate the Lease Agreement
pursuant to this paragraph, Landlord shall be entitled to recover from Tenant,
in addition to any other remedies provided for in this Lease Agreement or
available at law or in equity, rent and additional rent through to and including
the last day of the month in which it exercises its option to terminate. This
paragraph 43rd shall not be operative for delays caused by factors beyond the
Tenant's control provided that the Tenant has exercised commercially reasonable
diligence and substantively performed all commercially reasonable acts necessary
to actively pursue in good faith the opening of the Tenant's operation.
Notwithstanding anything herein to the contrary, if Tenant fails, for any reason
whatsoever, to open the demised premises for business within 240 days after this
Lease Agreement is signed by the parties, Landlord may, at its sole election,
terminate the within Lease Agreement.
Conformation with Laws and Regulations
44TH: The Landlord may pursue the relief or remedy sought in any
invalid clause, by conforming the said clause with the provisions of the
statutes or the regulations of any governmental agency in such case made and
provided as if the particular provisions of the applicable statutes or
regulations were set forth herein at length.
In all references herein to any parties, persons, entities or
corporations, the use of any particular gender or the plural or singular number
is intended to include the appropriate gender or number as the text of the
within instrument may require. All the terms, covenants and conditions herein
contained shall be for and shall inure to the benefit of and shall bind the
respective parties hereto, and their heirs, executors, administrators, personal
or legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and seals, the day and year first above written. WITNESS:
WITNESS: By /s/Beatrice Diener
-------------------------
By /s/ Lawrence B. Diener
- ------------------------- -------------------------
Attorney in Fact
BEATRICE DIENER
WITNESS:
/s/ Jesse Sayegh
- ------------------------- -----------------------
JESSE SAYEGH
21
Exhibit 10.04
ASSIGNMENT, ASSUMPTION AND CONSENT TO
ASSIGNMENT OF LEASE
This Assignment, Assumption and Consent to Assignment of Lease is
made this 12th day of December, 1997 between C.J.M. ENTERPRISES, INC., a New
Jersey corporation whose principle office is located at 101 Pompton Avenue,
Cedar Grove, New Jersey 07009 (hereinafter referred to as the "Assignor"), and
CCC KIN MALL CINEMA CORP., a corporation organized and existing under the laws
of Delaware, authorized to do business in New Jersey, whose principal office is
located at 7 Waverly Place, Madison, New Jersey 07940 (hereinafter referred to
as the "Assignee") and Clearview Cinema Group, Inc., a Delaware Corporation
("Guarantor") and Kin Mall Properties, L.L.C. ("Fee Owner").
WITNESSETH:
WHEREAS, Assignor entered into a Lease with LESTER M. ENTIN
ASSOCIATES, dated December 17, 1991, as amended by FIRST AMENDMENT TO LEASE
dated December 31, 1996, a true copy of each is annexed hereto (hereinafter,
collectively, the "Lease Agreement"); and
WHEREAS, the Assignor wishes to assign to Assignee all of its right,
title and interest under and pursuant to the Lease Agreement; and
<PAGE>
WHEREAS, the Assignee wishes to accept this Assignment of Lease as
of December 12, 1997, and agrees to assume, perform and abide by all of the
terms, provisions and obligations of Assignor under the Lease Agreement; and
WHEREAS, LESTER M. ENTIN ASSOCIATES (hereinafter the "Landlord")
hereby consents to assignment of the Lease Agreement to the Assignee on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and intending to
be legally bound hereby, the Assignor and Assignee hereby agree as follows:
1. Assignor hereby assign all of its right, title and interest under
and pursuant to the Lease Agreement from and after December 12, 1997 to
Assignee, and its respective successors and/or assigns.
2. Assignee hereby accepts this Assignment of Lease, and agrees from
and after December 12, 1997 to assume, perform and abide by all of the terms,
provisions and obligations of the Assignor under the Lease Agreement.
3. Notwithstanding anything in this Assignment and Acceptance of
Assignment of Lease that may be to the contrary, Assignor expressly agrees that
nothing herein shall relieve the Assignor from any liability under and pursuant
to the Lease Agreement.
4. This Assignment and Acceptance of Assignment of Lease shall be
binding upon the parties hereto and their respective heirs, successors and
assigns.
5. This Assignment and Acceptance of Assignment of Lease shall not
be modified or amended without the written consent of the parties hereto and the
Landlord.
2
<PAGE>
6. By its signature below, Clearview Cinema Group, Inc., a Delaware
corporation and the parent of the assignee ("Clearview"), for valuable
consideration and in order to induce the Landlord to execute the consent, hereby
guarantees the performance of all tenant obligations set forth in the Lease
Agreement. This is a guarantee of payment and performance.
7. Assignee and Clearview hereby indemnify and agree to hold
Assignor harmless, including reasonable counsel fees, from any liability under
and pursuant to the Lease Agreement.
8. Any further assignment shall require the consent of Landlord.
9. Upon execution hereof Landlord shall receive reimbursement from
Assignor of all of its costs and expenses in reviewing this Assignment, not to
exceed $900.00.
10. This Assignment, Assumption and Consent to Assignment of Lease
shall be governed by the laws of the State of New Jersey.
[Remainder of page intentionally left blank. Signature pages follow]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
as of the date and year hereinabove first written.
ATTEST: C.J.M. ENTERPRISES, INC., Assignor
By: /s/ Jesse Sayegh,
- -------------------------- ----------------------------------
Jesse Sayegh, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
On this 12th day of December in the year 1997, before me personally came
Jesse Sayegh who, I am satisfied, signed, sealed and delivered the same as his
act and deed for the purpose therein expressed.
/s/ Deborah York Sheridan
---------------------------------
Notary Public
4
<PAGE>
ATTEST: CCC KIN MALL CINEMA CORP., Assignee
/s/ Herbert L. Klein By: /s/ A. Dale Mayo
- ----------------------- ----------------------------
Asst. Secretary A. Dale Mayo, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I CERTIFY that on December 12, 1997 A Dale Mayo personally came before me
and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as President of
CCC Kin Mall cinema Corp. the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from CCC Kin Mall Cinema Corp.
/s/ Deborah York Sheridan
--------------------------------
Notary Public
5
<PAGE>
ATTEST: Clearview cinema Group, Inc.
Guarantor
/s/ Herbert L. Klein By: /s/ A. Dale Mayo
- ---------------------- ----------------------------
A. Dale Mayo, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I CERTIFY that on December 12, 1997 A. Dale Mayo personally came before me
and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as President
of Clearview Cinema Group, Inc. the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from Clearview Cinema Group.
/s/ Deborah York Sheridan
----------------------------
Notary Public
6
<PAGE>
CONSENT TO ASSIGNMENT
LESTER M. ENTIN ASSOCIATES hereby consents to the assignment of the Lease
Agreement to the above-named Assignee on the express condition that the Assignor
shall remain liable for the prompt payment of the rent and the performance of
all obligations and covenants provided in the Lease Agreement and the Guarantor
shall execute the Assignment and Assumption of Lease, and that no further
assignment or sublease of any part of the demised premises shall be made without
the prior written consent of the undersigned Landlord.
LANDLORD'S WITNESS: LESTER M. ENTIN ASSOCIATES,
LANDLORD
/s/ Diana M. McCauley by: /s/ Marc Lenner, Trustee
- -------------------------- ------------------------------
Marc Lenner, Trustee
of the Lester M. Entin Trust
dated September 18, 1985, As
Amended, A Partner
State of New Jersey
SS:
County of Passaic
I CERTIFY that on December 5, 1997 Marc Lenner, a Trustee of the LESTER M.
ENTIN TRUST, dated September 18, 1985, As Amended, personally came before me and
this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as a Partner of
LESTER M. ENTIN ASSOCIATES, the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from LESTER M. ENTIN ASSOCIATES.
/s/ Diana M. McCauley
----------------------
Date: December 5, 1997 Notary Public
<PAGE>
FEE OWNER'S CONWENT TO ASSIGNMENT OF LEASE
Kin-Mall Properties, L.L.C., as Assignee of LESTER M. ENTIN ASSOCIATES,
the original landlord, hereby consents to the assignment of the Lease Agreement
to CCC Kin-Mall Cinema Corp. on the express condition that the Assignor shall
remain liable for the prompt payment of the rent and the performance of all
obligations and covenants provided in the Lease Agreement and the Guarantor
shall execute the Assignment and Assumption of Lease, and that no further
assignment or sublease of any part of the demised premises shall be made without
prior written consent of the undersigned Landlord.
WITNESS: KIN-MALL PROPERTIES, L.L.C.
/s/ Diana M. McCauley By: /s/ Marc Lenner, Trustee
- ----------------------- -----------------------------
Marc Lenner, Trustee
of the LESTER M. ENTIN TRUST
dated September 18, 1985, As
Amended, a Partner
State of New Jersey
SS:
County of Passaic
I CERTIFY that on December 11, 1997, Marc Lenner, Trustee of the Lester M.
Entin Trust, a Member of Kin-Mall properties, L.L.C., Assignee of Lester M.
Entin Associates , personally came before me and this person acknowledged under
oath to my satisfaction, that;
(a) this person signed and delivered the attached documents as Trustee of
the Lester M. Entin Trust, a Member of Kin-Mall Properties, L.L.C., the company
named in this document's Fee Owner;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from Kin-Mall Properties, L.L.C.
Date: December 11, 1997 /s/ Diana M. McCauley
-----------------------
Notary Public
<PAGE>
L E A S E
Between
LESTER M. ENTIN ASSOCIATES,
a partnership of the State of New Jersey
Landlord
and
CJM ENTERPRISES, INC.,
a corporation of the State of New Jersey
Tenant
Dated:
---------------------------
Commencement Date:
---------------------------
Termination Date:
---------------------------
SILLS CUMMIS ZUCKERMAN RADIN TISCHMAN EPSTEIN & GROSS, P.A.
The Legal Center
One Riverfront Plaza
Newark, New Jersey 07102-5400
201-643-700
<PAGE>
58 Mortgage Protection Clause
59 [INTENTIONALLY OMITTED]
60 Business Hours
61 Negotiated Lease
62 Center
63 Control of Tenant
64 Processing Charge
65 Right of First Refusal
66 Hazardous Substances
67 Modifications requested by Mortgagee
68 Reimbursement of Legal Expenses
69 Right to Extend
Signatures
Schedule A - The Premises
Schedule B - Legal Description
Schedule C - Certificate of Commencement of Rent
Schedule D - Payment of Rent
Schedule E - Landlord Alteration
Schedule F - Tenant Alteration
Schedule G - Guaranty
ii
<PAGE>
L E A S E
THIS AGREEMENT, ("Lease") entered into this 17th day of December, 1991,
between LESTER M. ENTIN ASSOCIATES, a partnership of the State of New Jersey,
having offices at 1033 Clifton Avenue, P.O. Box 2189, Clifton, New Jersey 07015,
hereinafter referred to as "Landlord", and CJM ENTERPRISES, INC., a corporation
of the State of New Jersey, having offices at 101 Pompton Avenue, Cedar Grove,
New Jersey 07009, hereinafter referred to as "Tenant".
W I T N E S S E T H:
PREMISES: Landlord hereby demises and leases unto Tenant and Tenant hereby
hires and takes from Landlord, for the term and upon the rentals, terms and
conditions hereinafter specified, the premises crosshatched on SCHEDULE "A" (the
"Premises") which Premises are a part of a shopping center located at Route 23
and Kinnelon Road in the Borough of Kinnelon, Morris County, New Jersey known as
the Kinnelon Mall (the "Center"), owned by Landlord on premises more
particularly described on SCHEDULE "B" and also includes a right of access to
the Premises and all public areas of the Center together with the parking spaces
in the parking area in common with other tenants of the Center. The Premises
consists of not less than 22,000 square feet nor more than 23,000 square feet
(measured from the outside facie of exterior walls and the center line of common
walls).
SECTION 1: TERM - CERTIFICATE OF COMMENCEMENT:
The term of this demise shall be ten (10) years beginning on the earlier
of (i) the date on which Tenant shall open for business or (ii) ninety-eight
(98) days after the "Delivery Date" (as defined in Section 12 hereof) (the
"Commencement Date") and ending at midnight on the day immediately preceding the
tenth anniversary of the Commencement Date (the "Term") subject, however, to the
terms contained herein. Notwithstanding the foregoing, if the earlier of the
events referred to in the immediately preceding sentence occurs on a day other
than the
<PAGE>
first day of a month, the Commencement Date shall be the first day of the
immediately succeeding calendar month and, in that event, the terms and
conditions of this Lease shall apply from the earlier of the aforesaid events;
however, Tenant shall pay to Landlord until the Commencement Date a use and
occupancy charge equal to that proportion of the basic rent and additional rent
charges (other than Percentage Rent, which shall be calculated pursuant to
SECTION 5) as the number of days from the date upon which the earlier of the
aforesaid events occurs shall bear to the total number of days in such month.
Upon the commencement of the Term, Landlord and Tenant shall execute a
Certificate of Commencement in the form attached as SCHEDULE "C".
SECTION 2: RENT:
The basic rent during the Term of this Lease ("Basic Rent") shall be
payable in monthly installments as set forth on Schedule "D" on or before the
first day of each month, in advance, at the office of Landlord or at such other
place as shall be designated by Landlord, without any prior notice or demand
therefor and without any deduction, abatement or set-off for any reason
whatsoever. In the event that the Term shall commence on a day other than the
first day of a month, then Tenant shall pay to Landlord a proportionate amount
for said period.
The Basic Rent and any Additional Rent (as defined in SECTION 4) are
hereinafter referred to as "Rent".
SECTION 3: PROPORTIONATE MARE:
For the purposes of this Lease, Landlord and Tenant agree that the
Premises constitute approximately 23% of the Center. Tenant's proportionate
share of all costs, expenses and costs of the operation of the Center shall be
deemed to be 23% ("Proportionate Share") unless there is an increase in rental
space constructed by Landlord or Tenant leases more space in the Center, at
which time the Proportionate Share shall be readjusted. Anything contained
herein to the contrary notwithstanding, for purposes of calculating Tenant's
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proportionate share, Tenant's rentable square footage shall in all events be
deemed to be no less than 22,500 square feet.
SECTION 4: ADDITIONAL RENT:
(a) Tenant-shall pay monthly as Additional Rent one-twelfth (1/12th) of
its Proportionate Share of "Operating Costs" as defined in SECTION 8 of this
Lease. Said monthly sums shall be paid in advance on the first day of each month
based upon the statement of actual Operating Costs for the prior lease year
furnished by Landlord. Landlord's reasonable estimate of Tenant's monthly
Proportionate Share of Operating Costs for the first lease year is $4,416.67 per
month.
In the event Tenant's Proportionate Share of Operating Costs exceeds the
monthly sums provided above, Landlord shall submit an invoice to Tenant at any
time during the Term with a statement of the actual Operating Costs and Tenant
shall forthwith make payment to Landlord of the amount in excess of the payments
previously made by Tenant for such period. Tenant's monthly payment of its
Proportionate Share of Operating Costs shall be increased to coincide with any
increase described above.
(b) All sums of money or charges required to be paid by Tenant under this
Lease, whether or not the same be so designated, shall be deemed "Additional
Rent". If such amounts or charges are not paid at the time provided in this
Lease, they shall nevertheless, ,if not paid when due, be collectible as
Additional Rent with the next installment of Rent thereafter falling due
hereunder, but nothing herein contained shall be deemed to suspend or delay the
payment of any amount of money or charges as the same becomes due and payable
hereunder, or limit any other remedy of Landlord.
SECTION 5: PERCENTAGE RENT:
(a) PERCENTAGE RENT RATE. Tenant shall pay to Landlord as Percentage Rent
a sum equal to nine (9%) percent of Tenant's Gross Sales (as defined in Section
6) in excess of the "Percentage Rent Base Amount" set forth on Schedule "D"
hereof.
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Percentage Rent shall be computed for each three (3) months of the term of this
Lease (each a "Percentage Rent Period"). On or before the 15th day of the
calendar month immediately following the close of each Percentage Rent Period,
Tenant shall pay to Landlord a sum equal to nine (9%) percent of Tenant's Gross
Sales made during the Percentage Rent Period in excess of the product of (i)
one-fourth (l/4th) of the Percentage Rent Base Amount (the "Quarterly
Breakpoint") and (ii) the number of Percentage Rent Periods elapsed in the lease
year. Within forty-five (45) days after the end of each lease year Landlord
shall determine the amount of Percentage Rent based on the Gross Sales of Tenant
during the lease year, and the sums paid to Landlord as Percentage Rent. If
Tenant has paid to Landlord an amount of Percentage Rent greater than the
Percentage Rent it is in fact obligated to pay for the lease year as determined
in this SECTION 5, the excess so determined shall be applied against the next
Rent due to Landlord, and if any unused excess exists at the expiration or
termination of the Term, the sum of the unused excess shall be immediately paid
by Landlord to Tenant provided Tenant is not then in default of this Lease. If
Tenant has paid to Landlord an amount of Percentage Rent less than Tenant is
required to pay, Tenant shall immediately pay the difference to Landlord within
fifteen flu) days after receipt of written notice of the amount due.
(b) LAST PERCENTAGE RENT PERIOD: ACCOUNTING PERIODS DEFINED. The last
Percentage Rent Period shall end on the date the Term expires or terminates. A
"lease year" is a calendar year, except that the first lease year shall commence
on the date the Term commences and end on December 31 of that lease year, and
the last lease year shall end on the date the Term expires or terminates. Should
any lease year contain less than four (4) full Percentage Rent Periods, the
Percentage Rent Base Amount and Quarterly Breakpoint shall be adjusted
proportionately.
SECTION 6: GROSS SALES:
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"Gross Sales" of Tenant means the gross selling price of all box office
admission receipts whether sold from the Premises or elsewhere, concession sales
(including the sale of food, beverages and refreshments), promotional items
(such as the sale of tee-shirts, posters, books, magazines, audio and video
tapes, and records customarily sold by motion picture theaters in connection
with the promotion of motion pictures), vending machine proceeds, video and
electronic game receipts, and other merchandise or services sold, leased,
licensed, or delivered in or from the Premises by Tenant, its
permitted-subtenants, licensees, or concessionaires, whether for cash or on
credit (whether collected or not), including the gross amount received by reason
of orders taken (in person or by mail, telephone or facsimile) on the Premises
although filled elsewhere, and whether made by store personnel or vending
machines. Any transaction on an installment basis, including, without
limitation, any "layaway" sale or like transaction, or otherwise involving the
extension of credit, shall be treated as a sale for the full price at the time
of the transaction, irrespective of the time of payment or when title passes.
Gross Sales also shall include any sums that Tenant receives from pay
telephones, stamp machines, music machines, or amusement machines.
Gross Sales shall not include, or if included there shall be deducted (but
only to the extent they have been included), the following:
(i) The selling price of all merchandise returned by customers and
accepted for full credit, or the amount of discounts, refunds, and allowances
made on such merchandise.
(ii) Merchandise returned to sources or transferred to another movie
theater or warehouse owned by or affiliated with Tenant provided that the
purpose of such return or transfer is not to avoid the consummation of a
purchase which would otherwise be included hereunder as Gross Sales.
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(iii) Sums and credits received in the settlement of claims for loss
or damage to merchandise.
(iv) Sales and use taxes, admission taxes, so-called luxury taxes,
consumer's excise taxes, gross receipts taxes, and other similar taxes now or in
the future imposed on the sale of merchandise or services, but only if such
taxes are collected from customers.
(v) Permitted sales of fixtures, trade fixtures, or personal
property that are not merchandise as allowed in this Lease.
(vi) Twenty (20%) percent of admission receipts from any motion
picture licensed to Tenant which is expressly subject to an arrangement between
the motion picture's distributor, as licenser, and Tenant, as licensee,
generally referred to in the motion picture industry as a "90/10 deal", whereby,
after certain allowances are made, the distributor-licensor receives from
Tenant-licensee 90% of the motion picture's "gross" and Tenant licensee retains
10% of the motion picture's "gross."
SECTION 7: STATEMENT OF GROSS SALES:
Tenant shall furnish to Landlord a statement of Tenant's Gross Sales
within fifteen (15) days after the end of each Percentage Rent Period, and an
annual statement of Gross Sales within thirty (30) days after the end of each
lease year. Each statement shall provide, among other things, a detailed
itemized calculation of the deduction from Gross Sales of any amounts which are
deductible pursuant to "(vi)" in Section 6 respecting so-called "90/10 deals" as
hereinbefore described. Upon request, Tenant shall furnish copies of any
distribution agreements or other documents memorializing such "90/10 deals".
Each statement shall also be signed and certified to be correct by Tenant or its
authorized representatives and if Tenant is a corporation, the statement shall
be signed and certified to be correct by an officer of Tenant.
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Tenant shall keep at the Premises full and accurate books of account,
records, cash receipts, ticket receipts, and other pertinent data showing its
Gross Sales. Tenant shall install and maintain accurate receipt printing cash
registers and ticket machines, as applicable, acceptable to Landlord, with
counting devices and shall record on such cash registers and ticket machines
every sale and other transaction made from the Premises. Tenant shall also
furnish to Landlord copies of its quarterly New Jersey sales and use tax returns
at the time each is filed with the State of New Jersey.
Such books of account, records, cash receipts, ticket receipts, and other
pertinent data shall be kept for a period of three (3) years after the end of
each lease year. The receipt by Landlord of any statement, or any payment or
Percentage Rent for any period, shall not bind Landlord as to the correctness of
the statement or the payment.
Landlord shall be entitled during the Term and within three (3) years
after the expiration or termination of each lease year to inspect and examine
all Tenant's books of account, records, cash receipts, and other pertinent data,
so Landlord can ascertain the accuracy of Tenant's reported Gross Sales. Tenant
shall cooperate fully with Landlord in making the inspection. Landlord shall
also be entitled, once during each lease year and once after expiration or
termination of this Lease, to an independent audit of Tenant's books of account,
records, cash receipts, and other pertinent data to determine the accuracy of
Tenant's reported Gross Sales, by a certified public accountant to be designated
by Landlord. The audit shall be limited to the determination of Gross Sales and
shall be conducted during usual business hours at the Premises. If the audit
shows that there is a deficiency in the payment of any Percentage Rent, the
deficiency shall become immediately due and payable, together with interest at
the Default Rate (as defined in SECTION 49 below). The costs of the audit shall
be paid by Landlord unless
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the audit shows that Tenant understated Gross Sales by more than two (2%)
percent, in which case Tenant shall pay all Landlord's costs of the audit. If
the audit shows that Tenant understated Gross Sales by more than five (5%)
percent, then upon the discovery in any subsequent audit that Tenant again
understated Gross Sales by more than five (5%) percent, Landlord shall have the
right, at Landlord's option and without limiting Landlord's other rights or
remedies, to terminate this Lease on thirty (30) days' notice to Tenant.
Landlord shall keep any information gained from such statements,
inspection, or audit confidential and shall not disclose it other than to carry
out the purposes of this Lease, except that Landlord shall be permitted to
divulge the contents of any statements in connection with any financing
arrangements or sale of Landlord's interest in the Center.
SECTION 8: OPERATING COSTS:
Operating Costs, for the purposes of this Lease, shall mean the aggregate
of all expenses of operating the common areas of the Center and its
appurtenances and shall include, but shall not be limited to, the following: all
expenses for maintaining, managing, operating and repairing the Center and its
appurtenances, including the expenses of normal replacement of worn out
equipment; wall and floor coverings; replacement of ceiling tiles; facilities
and installations; the cost of electricity, water, and other utilities
(including, but not limited to, water, standby sprinkler, sprinkler alarm, and
sewer charges for the entire Center); security, gardening and other landscaping;
snow removal, maintenance, repair and replacement of the parking lot areas,
driveways and roof; trash removal; fire insurance, liability insurance, and rent
insurance, any one or more of which may be carried under so-called "umbrella"
coverage; "real estate taxes" as defined in SECTION 41 of this Lease; painting;
supplies; sales or use taxes on supplies or services; wages, salaries, and
fringe benefits of all persons engaged in
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the operation, maintenance and repair of the Center and its appurtenances; the
charges of any independent contractor who performs or does any of the work of
operating, managing, maintaining, or repairing the Center and its appurtenances;
any other expenses or charges of any nature whatsoever, whether or not herein
mentioned, which is in accordance with sound accounting and management
principles generally accepted with respect to the operation of a first-class
shopping center in Landlord's sole good faith reasonable judgment, would be
considered as Operating Costs; and an additional charge equal to fifteen (15%)
percent of all of the above-described Operating Costs to reimburse Landlord for
its administrative and overhead costs in operating the Center. In addition to
the foregoing, Tenant shall pay one hundred (100%) percent of any and all costs
and expenses incurred by Landlord in the operation of the common areas of the
Center which are necessitated as a result of the extraordinary nature of a
theater operation such as, by way of example only, crowd, traffic and litter
control, and security.
Operating Costs shall not include, however, executive salaries; leasing
commissions or so-called fit-up costs associated with the letting of vacant
space in the Center; costs of additional buildings, if any, for which Landlord
is responsible; depreciation, interest on and amortization of mortgages;
franchise, income and other taxes based upon the income of Landlord, provided
the same shall not have been levied as a substitute for real property taxes and
shall not include any items otherwise constituting such expense to the extent
payment therefor is received from, or payable by, another tenant or tenants of
the Center.
SECTION 9: LANDLORD'S OBLIGATIONS:
Landlord, as part of Operating Costs, shall keep the driveways and parking
area reasonably free of snow and ice, and maintain all grounds, shrubs and lawns
in the Center. Landlord shall also, as part of Operating Costs, make all
structural
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repairs unless such repairs are necessitated by negligence, acts or omissions of
Tenant, its servants, agents or employees; in which event said repairs shall be
made by Landlord upon reasonable prior-notice to Tenant at Tenant's sole
expense.
SECTION 10: COMMON AREAS:
The use and occupancy of the Premises shall include the use in common with
others of the common areas and facilities (if any), as hereinafter are more
fully provided. Common areas shall mean those areas of the Center which, at any
given time, are designated by Landlord for common use by tenants or occupants of
premises within the Center which are devoted to such common use or are so
designated by Landlord.
In order to establish that the Center, and any portion thereof, is and
will continue to remain private property, Landlord shall have the unrestricted
right to close (for such periods of time and to the extent necessary, in the
opinion or belief of Landlord's attorneys, to be legally sufficient to prevent a
dedication thereof, or the accrual of any right in any person or to the public
therein) the entire Center, and/or any portion thereof owned or controlled by
Landlord, to the general public. In connection therewith, Landlord may, in its
discretion, seal off entrances to the Center, or any portion thereof, for
periods of at least one (1) day in each calendar year. All common areas and
other facilities in or about the Center provided by Landlord shall be subject to
the exclusive control of Landlord. Provided Landlord does not materially
adversely affect Tenant's occupancy of or access to the Premises, or reduce the
number of parking spaces below that number which would be required by the
Borough of Kinnelon to permit the operation of 1,500-seat theater, Landlord
shall have the right to construct, maintain, replace and operate lighting and
other facilities on all said areas and improvements; to police the same; to
change the area, level, location and arrangement of parking areas and other
facilities; to build multi-story parking
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facilities, to allow anyone designated by Landlord to use the parking facilities
without charge (including without limitation the tenants in any building
adjacent to the Center and the customers of said tenants); and/or to close
temporarily all or any portion of the parking areas or facilities to discourage
non-customer parking; and to erect additional buildings, improvements and
structures in the common areas including without limitation the parking areas
designated from time to time by Landlord. Landlord shall operate and maintain
the common facilities in such manner as Landlord in its discretion shall
determine, and Landlord shall have full right and authority to employ and
discharge all personnel with respect thereto. All common areas and facilities
which Tenant may be permitted to use and occupy are to be used and occupied
under a non-exclusive revocable license, and if such license be revoked or if
the amount of such areas be changed or diminished, Landlord shall not be subject
to any liability nor shall Tenant be entitled to any compensation or diminution
or abatement of Rent nor shall revocation or diminution of such areas be deemed
constructive or actual eviction.
SECTION 11: NET LEASE:
This Lease is a net lease. The Basic Rent and Percentage Rent shall be
absolutely net to Landlord so that, except as expressly provided in this Lease,
this Lease shall yield, net to Landlord, the Basic Rent and Percentage Rent
during the Term.
SECTION 12: ALTERATIONS:
(a) Landlord shall complete at its own expense and in a good and
workmanlike manner, that certain work set forth on SCHEDULE "E" hereof (the
"Landlord Alteration").
Landlord shall complete the Landlord Alteration and deliver possession of
the Premises to Tenant in broom-clean condition by January 3, 1992, subject,
however, to delays beyond Landlord's control and further subject to the issuance
of a building permit for the Premises. The date on which the later of the
following
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occurs shall be deemed to be the "Delivery Date": (i) Landlord delivers
possession of the Premises to Tenant as set forth in the preceding sentence, or
(ii) Tenant receives notification of the issuance of a building permit for the
Premises, provided that Tenant has used its best efforts in obtaining same.
Notwithstanding anything contained herein to the contrary, Landlord shall have
the option to defer the "roof installation" and/or "HVAC delivery", as such
terms are defined in SCHEDULE "E" hereof, until the Spring of 1992 without
thereby delaying the Delivery Date. Tenant shall not enter upon the Premises
prior to the Delivery Date without the prior written consent of Landlord.
(b) Tenant shall complete at its own expense and in a good and workmanlike
manner, using materials and workmen of the highest quality, all of the
alterations set forth on SCHEDULE "F" hereof (the "Tenant Alteration") in
accordance with the final work drawings and specifications prepared by a
licensed architect chosen by Tenant and approved by Landlord.
Tenant's architect shall prepare work drawings and specifications and
submit same to Landlord not later than January 7, 1992. Landlord shall provide
Tenant's architect with comments regarding the work drawings and specifications.
If the work drawings and specifications are not approved as noted by Landlord,
then same shall be redrawn, at Tenant's expense, in accordance with Landlord's
comments.
In all events, Tenant shall complete the Tenant Alteration and open for
business no later than ninety-eight (98) days after the Delivery Date.
Upon completion of the Tenant Alteration, Tenant shall furnish Landlord
with waivers of lien and sworn statements from all persons performing labor
and/or supplying materials in connection with the Tenant Alteration that all of
said persons have been compensated in full.
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SECTION 13: PURPOSE, TRADE NAME, RESTRICTIONS:
(a) Tenant covenants and agrees to trade and do business under the name
Kin Mall Cinemas and to use the Premises:
(i) solely and primarily as an eight-screen, approximately 1,500
seat theater for the exhibition therein of motion pictures (e.g., 16mm.,
35mm., 75mm., "wide angle" or other process or gauge, or such other
process not presently in use in the exhibition of motion pictures,
including tapes, discs and cable-linked direct broadcast) of a first-rate
nature customarily presented in "multi-screen" movie theaters in the
tri-state area, but in all events excluding, without limitation,
pornographic or so-called "adult" motion pictures and other disreputable
types of motion pictures;
(ii) occasionally (i.e., not more than 30 days in any lease year)
for the exhibition of television presentations (as distinguished from
motion pictures), vaudeville acts, dramatic shows, opera, concerts,
lectures or other theatrical performances for entertainment, in not more
than one (1) of the eight "screen rooms" in the Premises at any given time
(which screen room shall have a seating capacity of 325 persons or less)
and never during any of the restricted seating time periods set forth
below; but in all events excluding, without limitation, nude acts, strip
shows, horse racing and other disreputable types of presentations;
(iii) incidentally for the retail sale of food, nonalcoholic
beverages and refreshments and promotional items customarily sold by
motion picture theaters in connection with the promotion of motion
pictures (such as tee-shirts, posters, books, magazines, audio and video
tapes and records);
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(iv) incidentally for the use of no more than three (3) vending
machines and no more than three (3) video and electronic games; and for no
other purpose without the prior written consent of Landlord, which consent
Landlord may, at its sole discretion, withhold for any reason or no reason
whatsoever. Tenant agrees that under no circumstances may the Premises be
used for the sale of food and food products for off-premises consumption,
prescription and non-prescription drugs, and health and beauty aids, or as
an office (other than an office necessary for the operation of, and
ancillary to, the use permitted in the first sentence of this paragraph
(a)), bowling alley or funeral parlor, it being understood and agreed that
the restrictions in this sentence do not constitute a limitation of the
restrictions on Tenant's use of the Premises set forth in the immediately
preceding sentence of this paragraph (a). Anything contained herein to the
contrary notwithstanding, Tenant agrees not to sell more than a certain
number of tickets for motion pictures and other permitted exhibitions
being shown in the Premises at any given moment during the following
"restricted seating time periods":
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RESTRICTED SEATING TIME PERIODS
<TABLE>
<CAPTION>
Aggregate Seat
Day/Date Time Period Limit ("Cap")
-------- ----------- -------------
<S> <C> <C>
Holy Saturday
(day before Easter Sunday): 7:00 p.m.-9:15 p.m. 1,100
9:15 p.m.-closing 1,350
November (2nd, 3rd & 4th weeks)
Mondays, Tuesdays & Wednesdays: All operating hours 1,000
Thursdays & Fridays: 7:00 p.m.-9:35 p.m. 1,100
9:35 p.m.-closing 1,350
Saturdays: 7:00 p.m.-9:15 p.m. 1,200
9:15 p.m.-closing 1,350
December
7 days prior to Christmas (except
(Saturday Night, which follows
schedule below): All operating hours 1,000
All other Friday Nights: 7:00 p.m.-9:35 p.m. 1,100
9:35 p.m.-closing 1,350
All other Saturday Nights: 7:00 p.m.-9:15 p.m. 1,200
9:15 p.m.-closing 1,350
</TABLE>
In furtherance thereof, Tenant shall install and maintain at its sole cost
and expense state-of-the-art ticket machines, acceptable to Landlord, which are
programmed to accurately restrict ticket sales in accordance with the foregoing
ticket sales "cap". Tenant acknowledges that Tenant's agreement with respect to
the restriction on ticket sales, as aforesaid, was a material inducement for
Landlord's entering into this Lease, based on security, crowd control and
traffic concerns, among other reasons, and that but for such agreement, Landlord
would not have entered into this Lease. Landlord, or its agent designated for
such purpose, including, without limitation, the occupant of the Pathmark
premises, shall have the right to monitor, "on-site," the operation of such
state-of-the-art ticket machines, and otherwise inspect or audit ticket sales at
the Premises and Tenant's compliance with the restricted seating time periods
set forth herein, all on not less than two days' written notice from Landlord or
its designated agent to Tenant.
(b) [INTENTIONALLY OMITTED]
(c) Tenant covenants and agrees that Tenant, at its own expense, will keep
the Premises free of insects, rodents, vermin and other pests. Tenant shall, ten
(10) days prior to the commencement of the Term, deliver to Landlord, a
certificate and service contract from an approved exterminating or similar
service providing that the Premises shall be inspected quarterly and kept free
of insects, rodents, vermin and other pests. Tenant further covenants and agrees
that it shall not, at any
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Landlord, or its agent designated for such purpose, including, without
limitation, the occupant of the Pathmark premises, shall have the right to
monitor, "on-site," the operation of such state-of-the-art ticket machines, and
otherwise inspect or audit ticket sales at the Premises and Tenant's compliance
with the restricted seating time periods set forth herein, all on not less than
two days' written notice from Landlord or its designated agent to Tenant.
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time during the Term, keep at the Premises any animals of any kind whatsoever.
Nothing herein shall prohibit sight-impaired patrons or employees from utilizing
the aid of seeing-eye dogs.
(d) Tenant shall not use or permit the use of any apparatus, or sound
reproduction or transmission, or any musical instrument, in such manner that the
sound so reproduced, transmitted or produced shall be audible beyond the
confines of the Premises and will not use any other advertising medium
including, without limitation, flashing lights or searchlights which may be
heard or experienced outside of the Premises.
(e) Tenant shall not cause or permit objectionable odors to emanate or be
dispelled from the Premises nor shall Tenant solicit business, distribute
handbills or other advertising matter or hold demonstrations in the parking
areas, walkways or other common areas of the Center.
(f) Tenant shall not use the plumbing facilities for any other purpose
than that for which they are constructed and will not permit any foreign
substance of any kind to be thrown therein and the expense of repairing any
breakage, stoppage, seepage or damage, whether occurring on or off the Premises
resulting from a violation of this provision by Tenant or Tenant's employees,
agents or invitees shall be borne by Tenant. All grease traps and other plumbing
traps shall be kept clean and operable by Tenant at Tenant's own cost and
expense.
(g) [INTENTIONALLY DELETED]
(h) Tenant agrees not to suffer, permit or commit any waste on the
Premises, nor allow, suffer or permit the Premises or any use thereof to
constitute a nuisance or unreasonably to interfere with the safety, comfort or
enjoyment of the Center by Landlord or any other occupants of the Center or
their customers, invitees or any others lawfully in or at the Center. Upon
written notice by Landlord to Tenant that any of the aforesaid is occurring,
Tenant agrees forthwith to cease and discontinue the same and within ten (10)
days thereafter to make such changes in the
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Premises and/or install or remove such apparatus or equipment therein or
therefrom as may be required by Landlord for the purpose of obviating any such
condition. Anything contained in this Lease to the contrary notwithstanding,
Tenant covenants, represents and agrees to operate the Premises with all due
regard for the maintenance of security, traffic control, crowd control and
cleanliness on and about the common areas of the Center, including but not
limited to the parking lot. In the event Tenant violates the foregoing covenant,
representation and agreement, then, among any other remedies Landlord may have
for such breach, Landlord shall be entitled to enjoin Tenant from so breaching
the aforesaid covenant, representation and agreement.
(i) Notwithstanding anything in this Lease to the contrary, Tenant shall
not make any penetrations into the roof of the Premises or the Center. In the
event Tenant requires a penetration in the roof of the Premises, Tenant shall
request Landlord's written consent for same, which Landlord may deny, in its
sole discretion, except that Landlord will not unreasonably withhold its consent
where Tenant's request solely involves the maintenance, repair or installation
of Tenant's HVAC apparatus. If Landlord grants its permission for such roof
penetration, such work shall be performed by a contractor designated by Landlord
at Tenant's sole cost and expense. In the event that Tenant violates any
provision of this subparagraph (i), Landlord may, at its option, repair or
replace any portion of the roof of the Premises requiring repairing or replacing
at any time during the term of this Lease, at Tenant's sole cost and expense. In
addition, in the event of such breach by Tenant, Landlord may, at its option,
repair or replace any portion of the roof of the entire Center which requires
such repairing or replacing as a result of Tenant's penetration of the roof in
breach of this subparagraph (i). Tenant shall be liable for any and all damages
"direct, indirect and consequential) to Landlord and any and all other tenants
of the Center, resulting from Tenant's breach of the provisions of this
subparagraph (i). Tenant shall not be liable for any and all
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other tenants of the Center, resulting from Tenant's breach of the provisions of
this subparagraph (i).
(j) Tenant shall not under any circumstances make any penetrations of the
foundation or any other structural portions of the Premises or the Center. In
the event Tenant requires a penetration of the foundation or any other
structural portions of the Premises or the Center, Tenant shall request
Landlord's written consent for same, which Landlord may deny, in its sole
discretion, except that Landlord will not unreasonably withhold its consent
where Tenant's request solely involves the maintenance, repair or installation
of Tenant's HVAC apparatus or utilities.
(k) Landlord shall not enter into a lease with any other person,
corporation, partnership or other entity to use any portion of the Center for
the operation of a movie theater.
SECTION 14: DEFAULT IN PAYMENT OF RENT - ABANDONMENT OF PREMISES -
RELETTING:
Tenant shall, without any previous demand therefor, pay to Landlord, or
its agent, the Rent at the times and in the manner herein provided. In the event
of the non-payment of the Rent, or any installment thereof, at the times and in
the manner above provided, and if the same shall remain in default for ten (10)
days after notice from Landlord, TIME BEING OF THE ESSENCE, or if Tenant shall
be dispossessed for non-payment of Rent, or if the Premises shall be deserted or
abandoned, or if Tenant fails to open pursuant to Section 12(b), or remain open
pursuant to Section 60 on more than three (3) occasions in any twelve-month
period, Landlord or its agents shall have the right to and may enter the
Premises as the agent of Tenant, either by force or otherwise, without being
liable for any prosecution or damages therefor, and may relet all or part of the
Premises (which reletting may be in conjunction with the letting of other space
in the Center) as the agent of Tenant, and receive the Rent therefor, upon such
terms as shall be reasonably satisfactory to Landlord, and all rights of Tenant
to repossess the Premises
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under this Lease shall be forfeited. Such re-entry by Landlord shall not operate
to release Tenant from any Rent to be paid or covenants to be performed
hereunder during the full Term of this Lease. For the purpose of reletting,
Landlord is authorized to make such reasonable repairs or alterations in or to
the Premises as may be reasonably necessary to place the same in the condition
they were at the commencement of the Term. Tenant shall be liable to Landlord
for the reasonable cost of such repairs or alterations and all reasonable
expenses of such reletting. If the sum realized or to be realized from the
reletting is insufficient to satisfy the Rent provided in this Lease, Landlord
may require Tenant to pay on demand liquidated damages equal to the difference
between the Rent reserved for the remainder of the Term from the date of
Tenant's default, and the rent which Landlord is entitled to receive under any
replacement lease for the Premises during such period of time, discounted to
present worth at six (6%) percent per annum. Tenant shall not be entitled to any
surplus accruing as a result of the reletting. Landlord shall have the right, as
agent of Tenant, to take possession of any furniture, fixtures or other personal
property of Tenant found in or about the Premises after Tenant has vacated or
abandoned the Premises, and sell the same at public or private sale and to apply
the proceeds thereof to the payment of any monies becoming due under this Lease,
Tenant hereby waiving the benefit of all present and future laws exempting
property from execution, levy and sale on distress or judgment. Tenant agrees to
pay, as Additional Rent, all reasonable attorney's fees and other expenses
incurred by Landlord in enforcing Tenant's obligation to pay Rent or any other
default of Tenant, whether or not a trial ensues. Notwithstanding the notice and
cure period provided in this Section 14 for Tenant's default in the payment of
Rent, in the event Tenant defaults in the payment of Rent twice in any eight (8)
month period, any subsequent default in
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such eight-month period shall be deemed to be a non-curable default.
SECTION 15: SUBLETTING AND ASSIGNMENT:
(a) Tenant shall neither assign this Lease or sublet all or any portion of
the Premises to any party without Landlord's prior written consent, which
consent shall not be unreasonably withheld with respect to an assignment of this
Lease. Landlord may withhold such consent if, in the reasonable exercise of its
judgment, Landlord determines, among other factors, that:
(i) the proposed assignee's financial condition is not sufficient to
meet its obligations undertaken in such assignment;
(ii) the proposed assignee is not a reputable and experienced movie
theater operator and motion picture exhibitor; or
(iii) the rental obligation of the proposed assignee would be less
than Tenant's rental obligations hereunder. For the purposes of this Lease, a
merger, reorganization or dissolution involving Tenant or any guarantors, or any
transfer of this Lease by operation of law, shall be deemed to be an assignment
of this Lease which triggers the provisions of this Section 15. Furthermore, the
sale, issuance or transfer of any voting capital stock of Tenant or voting
capital stock of any corporate entity which directly or indirectly controls
Tenant or the sale, issuance or transfer of any interest in any non-corporate
entity which directly or indirectly controls Tenant, which sale, issuance or
transfer results in a change in the direct or indirect voting control of Tenant,
shall be deemed to be an assignment of this Lease which triggers the provisions
of this Section 15, except that the foregoing shall not be applicable to stock
which is traded on the New York Stock Exchange, the American Stock Exchange, or
any other nationally recognized stock exchange. If Tenant is a partnership,
trust or unincorporated association, then the sale, issuance or transfer of a
controlling interest therein or of an interest therein which
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would result in a change in the voting control of Tenant, or the sale, issuance
or transfer of a majority interest in or a change in the voting control of any
partnership, trust or unincorporated association or corporation which directly
or indirectly controls Tenant, or the sale, issuance or transfer of any portion
of any general partnership or managing interest in Tenant or in any such entity,
shall be deemed to be an assignment of this Lease which triggers the provisions
of this Section 15.
(b) Any request by Tenant for Landlord's consent to an assignment of this
Lease shall state the proposed assignee's address and be accompanied by a
duplicate original of the instrument of assignment (wherein the assignee
assumes, jointly and severally with Tenant, the performance of Tenant's
obligations hereunder).
(c) Any request by Tenant for Landlord's consent to a sublease shall state
the proposed subtenant's address and be accompanied by a duplicate original of
the instrument of sublease (wherein Tenant and the proposed subtenant agree that
such sublease is subject to this Lease and such subtenant agrees that, if this
Lease is terminated because of Tenant's default, such subtenant shall, at
Landlord's option, attorn to Landlord).
(d) If Landlord consents in writing to Tenant's request, Tenant, within
thirty (30) days after receipt of Landlord's consent notice, may assign this
Lease or sublet the Premises to the proposed assignee or subtenant upon the
terms specified in Landlord's consent notice. If the permitted assignment or
sublease is not effected within such thirty (30) day period, then Tenant's right
to assign this Lease or sublet the Premises shall again be subject to the
provisions of this Section 15. If such permitted assignment or subletting of
this Lease becomes effective for any renewal term, then the Basic Rent for such
renewal term shall be the greater of: (i) the Basic Rent set forth on Schedule D
hereof for such renewal terms, or (ii) the fair market fixed rental value for
the Premises for movie theater use as determined by
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a member of the American Institute of Real Estate Appraisers or the American
Society of Appraisers, mutually selected by Landlord and Tenant, who has at
least ten (10) years' appraisal experience with the Northern New Jersey
commercial real estate market, including, without limitation, shopping center
theater leasing. If the selected appraiser refuses to serve or fails to act for
any reason, or if Landlord and Tenant are unable to agree upon the selection of
an appraiser, then either party may apply to the President of the American
Institute of Real Estate Appraisers for such appointment or, in the case of his
failure to act, to the American Arbitration Association. A decision of the
appraiser so selected shall be final and binding upon Landlord and Tenant.
Landlord and Tenant shall bear equally the costs and expenses of the appraiser.
If necessary due to a pending resolution of the issue of fair market fixed
rental value, Tenant shall pay Landlord as of the first day of the renewal
period, the Basic Rent payable by Tenant during the immediately preceding twelve
(12) full months, subject to retroactive adjustment upon final determination of
this issue. In all events, the Percentage Rent Base Amount shall be determined
pursuant to the formula set forth in Schedule D hereof.
(e) Notwithstanding the above, Tenant is herewith granted the right to
assign this Lease without Landlord's consent if and only if the assignee or
subtenant is either a division of Tenant or a wholly owned subsidiary of Tenant,
provided that in the event of an assignment pursuant to this paragraph (e),
Tenant executes, in recordable form, a document agreeing to Tenant's assumption
of direct, primary responsibility, together with such assignee, for the
performance of all of the terms and conditions of this Lease, as if Tenant were
the assignee of Tenant.
(f) In the event of an assignment or sublease to which Landlord has
consented or an assignment which is expressly permitted under this Section 15,
Tenant will not thereby be released from the payment and performance of any of
its
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obligations in this Lease; rather, Tenant and its assignee or subtenant, as the
case may be, will be jointly and severally primarily liable for such payment and
performance. Accordingly, Landlord may collect Rent and Additional Rent from the
assignee or subtenant, as the case may be, and in either such event, Landlord
may apply any amounts so collected to the Rent and Additional Rent hereunder
without thereby waiving any provisions hereof or releasing Tenant from liability
for the performance of its obligations hereunder.
(g) Landlord's consent to any assignment or sublease hereunder shall not
be deemed a consent to any further proposed assignment or sublease, which shall
be governed by this Section 15.
(h) Tenant shall not, by operation of law or otherwise, mortgage or
encumber this Lease.
(i)
(j) In the ovens of any assignment or sublease hereunder, Tenant shall pay
to Landlord as additional rent, upon demand, any and all costs and expenses
(including, without limitation, reasonable attorneys' fees) incurred by Landlord
in connection with such assignment or sublease.
(k) Tenant hereby indemnifies, defends and holds Landlord harmless from
and against any and all losses, liability, damages, costs and expenses
(including reasonable attorneys' fees) resulting from any claims that may be
made against Landlord by (i) any assignee or subtenant or proposed assignee or
subtenant, or (ii) any brokers or other persons claiming a commission or similar
compensation in connection with the assignee or subtenant
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or the proposed assignment or sublease or termination of this Lease.
SECTION 16: CONDITION OF PREMISES; - REPAIRS - CLEAN AND SANITARY AND
REPAIRS:
Tenant shall keep the Premises in good condition, repair and appearance.
Tenant shall quit and surrender the Premises at the end of the Term in good
condition, reasonable wear and tear excepted, and shall not make any
alterations, additions or improvements to the Premises during the term of this
Lease without the prior written consent of Landlord, which consent shall not be
unreasonably withheld; provided, however, in the event Landlord does consent to
Tenant's making any alterations, additions or improvements, Landlord reserves
the right, thirty (30) days prior to the end of the Term, to demand that Tenant
remove said alterations or improvements or leave same. In the event that
Landlord requires the removal of said alterations, additions or improvements,
then Tenant shall restore the Premises to their condition prior to the
installation of said alterations, additions or improvements. All alterations,
additions and improvements of a permanent nature (expressly including, without
limitation, any and all theater seats), which may be made upon the Premises
either by Landlord or Tenant, except furniture or movable fixtures, machinery
and equipment installed at the expense of Tenant (unless otherwise specified
herein), shall be the property of Landlord and shall remain upon and be
surrendered with the Premises as a part thereof at the expiration or sooner
termination of this Lease, without compensation to Tenant, unless removal is
required by Landlord as aforesaid. Tenant further agrees to keep the Premises
and all parts thereof, including, but not limited to, the loading docks,
electrical wiring, plumbing and heating, ventilating and air conditioning
equipment, platforms, windows, walkways, exits and entrances to the
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Premises, in a clean and sanitary condition and free from trash, snow, ice,
inflammable materials and other objectionable matter.
SECTION 17: UTILITIES, SERVICES, TAXES. ETC., AND HVAC:
(a) Tenant shall furnish heat and air conditioning at its own cost and
expense.
(b) Tenant shall repair all utility, ventilating, heating, air
conditioning, electrical, gas and other utility lines within the Premises and,
if damage outside of the Premises is caused by the negligence, acts or omissions
of Tenant, its agents, servants or employees, Tenant shall likewise repair same
outside of the Premises. Tenant shall replace, at its own expense, any and all
glass which may be broken in and on the Premises. Tenant shall also maintain its
own trash dumpster and remove the trash disposed therein pursuant to the terms
of this Lease.
(c) Tenant shall pay all costs for electricity, water, standby sprinkler
charges, repairs to the sprinkler system, gas and other utilities and services
consumed by it as well as all costs for trash removal required to properly
service the Premises (i.e., not less than three time per week), except that if
Landlord elects to furnish trash removal services for some or all of the tenants
of the Center, including Tenant, then Tenant shall pay its proportionate share
thereof.
(d) In the event that any utility deposits are necessary, Tenant shall pay
said deposits to the utility company.
(e) Tenant agrees to operate the heating, ventilating and air-conditioning
equipment serving the Premises so that the conditions inside the Premises are
maintained within the range of the conditions in the enclosed mall portion of
the Center (the "Mall") so that heat, ventilation and cooled air are not unduly
drained from the Mall. Tenant shall pay to Landlord as Additional Rent an amount
equal to Two Hundred and 00/100 ($200.00) Dollars per day for each day that
Tenant is in violation of the terms and conditions of this Section 17 (e) after
written notice from Landlord, which sum is agreed to be
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just and reasonable compensation to Landlord for Tenant's violation of such
terms and conditions. Any amounts so collected shall be applied to reduce the
Operating Costs paid by tenants and occupants of the Center.
(f) Tenant shall enter into a maintenance agreement with a firm reasonably
acceptable to Landlord to service the heating, ventilating and air conditioning
systems (HVAC) servicing the Premises. Tenant shall pay the full cost of such
maintenance agreement.
SECTION 18: MECHANICS' LIENS:
In the event that any mechanic's lien is filed against the Premises or the
Center as a result of alterations, additions or improvements made by Tenant,
Tenant shall, within ten (10) days after receiving notice from Landlord, remove
said lien or post any bond which may be reasonably required, which bond shall be
with adequate surety. In the event that Tenant fails to file a bond as set forth
above, then Landlord may, at its option, terminate this Lease and may pay said
lien, without inquiring into the validity thereof, whereupon Tenant shall
forthwith reimburse Landlord for the total expense incurred by Landlord in
discharging said lien, as Additional Rent, and Tenant shall be and remain liable
to Landlord for all damages and losses suffered by it in the same manner as if
this Lease were terminated for any other default of Tenant.
SECTION 19: NON-LIABILITY OF LANDLORD - LANDLORD INDEMNITY:
(a) Landlord shall not be responsible for the loss of or damage to
property, or injury to persons, including Tenant, occurring in or about the
Center or the Premises by reason of any existing or future condition, defect,
matter or thing in the Premises or the Center or for the acts, omissions or
negligence of other persons or tenants in and about the Center. Tenant agrees to
indemnify and save Landlord harmless from all claims and liability for loss of
or damage to property, or injuries to persons occurring in or about the Premises
due to the negligent
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acts or omissions of Tenant, its servants, agents, employees or invitees.
(b) The liability of Landlord shall in any event be limited to its
interest in the Center and Tenant agrees that, in the event of any claim or
action against Landlord, Tenant shall not look to any assets of Landlord or any
of its partners other than the Center.
SECTION 20: LIABILITY INSURANCE:
Tenant, at its cost, shall maintain public liability and property damage
insurance with liability limits of not less than Three Million ($3,000,000.00)
Dollars, combined single limit, insuring against all liability of Tenant, its
agents, servants and employees arising out of and in connection with Tenant's
use of the Premises and the Center. All of the aforesaid insurance shall insure
both Tenant and Landlord, who shall be named as co-insureds, and Tenant shall
deliver to Landlord, ten (10) days prior to the expiration of said policy, a
renewal thereof.
SECTION 21: TENANT `S OWN INSURANCE:
Anything contained herein to the contrary notwithstanding, Tenant may
effect, for its own account, any insurance not required under the provisions of
this Lease, but any insurance effected by Tenant on the Premises or any part of
the Center, whether or not required pursuant to this Lease, shall be for the
mutual benefit of Landlord and Tenant and shall be subject to all provisions of
this Lease. Tenant shall retain the sole control of all rights with respect to
any insurance effected by it insuring against its business interruption and any
proceeds therefrom shall be its sole property.
SECTION 22: MUTUAL WAIVER OF SUBROGATION:
It is covenanted and agreed by and between the parties hereto that Tenant
shall relieve Landlord of all liability for loss or damage to Tenant's property,
whether real or personal, caused by fire and/or the perils covered in a standard
form fire insurance policy with Extended Coverage, due to any acts of
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commission or omission of Landlord; and Landlord shall relieve Tenant of all
liability for loss or damage to Landlord's property, whether real or personal,
caused by fire and/or the perils covered in a standard form fire insurance
policy with Extended Coverage, due to any acts of commission or omission of
Tenant.
SECTION 23: FAILURE TO OBTAIN INSURANCE:
If any of the policies of insurance as in this Lease provided to be
obtained and maintained by Tenant or Landlord cannot be obtained and/or kept in
force through Tenant's fault, and Tenant shall fail to commence to cure, remedy
and correct the condition which makes it impossible to obtain and keep in force
said policies within five (5) days after written notice given by Landlord to
Tenant, and Tenant fails, neglects or refuses to proceed diligently to cure such
condition, Landlord may terminate this Lease by giving at least five (5) days'
notice of such termination to Tenant, and this Lease shall terminate at the
expiration of said five (5) days with the same force and effect as if that were
the original expiration date thereof, and Tenant shall be and remain liable to
Landlord for all damages and losses suffered by it in the same manner as if this
Lease were terminated for any other default of Tenant. In lieu of exercising
such right of termination, Landlord may, at its option, obtain such policies at
regular or increased rates and pay the premiums therefor, and Tenant shall
reimburse Landlord for the amount of such premium upon demand, and, if not paid,
the amount thereof, together with interest at the Default Rate, shall be added
to the amount of the next month's Rent as Additional Rent.
SECTION 24: UNAVAILABILITY OF FIRE INSURANCE:
If, because of Tenant's occupancy, it shall be impossible to obtain fire
insurance on the Premises and/or the Center for full insurable value and at
standard rates and in fire insurance companies licensed in the State of New
Jersey, and reasonably
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acceptable to Landlord, Landlord may, if Landlord so elects, at any time
thereafter, terminate this Lease and the Term thereof on giving to Tenant thirty
(30) days' notice in writing of Landlord's intention so to do, and, upon the
giving of such of notice, this Lease and the Term thereof shall terminate and
come to an end, and Tenant shall be and remain liable to Landlord for all
damages and losses suffered by it in the same manner as if this Lease were
terminated for any other default of Tenant.
SECTION 25: RIGHT TO INSPECT AND EXHIBIT:
Landlord, or its agent, shall have the right to enter the Premises at
reasonable hours in the day, and at night in the case of emergency, to examine
the same, or to run telephone or other wires, or to make such repairs, additions
or alterations as it shall deem necessary for the safety, preservation or
restoration of the improvements, or for the safety or convenience of the
occupants or users thereof (there being no obligation, however, unless expressly
set forth herein, on the part of Landlord to make any such repairs, additions or
alterations), or to exhibit the same to prospective purchasers and put upon the
Premises a suitable "For Sale" or "To Let" sign. For twelve (12) months prior to
the expiration of the Term, Landlord, or its agents, may similarly exhibit the
Premises to prospective tenants.
SECTION 26: TOTAL OR PARTIAL DESTRUCTION:
In the event of
(a) the total destruction of the Premises or the Center by fire,
explosion, the elements or otherwise during the Term or previous thereto, or
(b) such partial destruction thereof as to render the Premises
untenantable or unfit for occupancy, then, in the case of (a) or (b), Landlord
shall, within 30 days of the date of such destruction (subject to delays beyond
its control), notify Tenant of Landlord's estimate, in Landlord's sole opinion,
of whether the Premises are so badly damaged that the same cannot be repaired
within one hundred eighty (180) days
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from the happening of such damage ("Landlord's Notification"). In the event
Landlord estimates that the Premises cannot be repaired within the aforesaid
time-frame; then the Term hereby created shall, at the option of Landlord or
Tenant, to be exercised by notice sent within thirty (30) days from the date of
the issuance of Landlord's Notification, cease and become null and void from the
date of such damage or destruction, and Tenant shall immediately surrender the
Premises and all Tenant's interest therein to Landlord, and shall pay rent only
to the time of such damage, in which event Landlord may re-enter and repossess
the Premises thus discharged from this Lease and may remove all parties
therefrom. If (i) neither Landlord nor Tenant exercises its option to cancel, as
aforesaid, or (ii) should Landlord's Notification state that the Premises are
repairable within one hundred eighty (180) days from the happening of said
damage, or (iii) should the casualty be so extensive as to destroy the Pathmark
premises and Landlord repairs or rebuilds the Pathmark premises, then Landlord
shall, provided there are sufficient casualty insurance proceeds available from
any insurance coverage maintained by Landlord, after Landlord has allocated same
to the other portions of the Center, and/or from any insurance coverage
maintained by Tenant as set forth in paragraph (c) below, enter and repair or
rebuild the Premises as nearly as possible to their previous condition with
reasonable speed and the Rent, to the extent hereinafter provided, shall
continue to be paid while repairs are being made. The Rent accrued and accruing
shall cease and determine if the Premises are totally untenantable by Tenant. If
a portion is untenantable, the Rent shall be equitably reduced with respect to
the untenantable portion until the repairs are completed. Tenant shall
immediately notify Landlord in case of fire or other damage to the Premises. In
no event shall Landlord be obligated to repair or rebuild the Premises if a
casualty occurs during the Second Five Year Renewal Option.
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(c) Consistent with the parties' intention and agreement as . is stated at
paragraphs (a) and (b) above:
(i) Tenant shall maintain insurance against fire, extended coverage,
vandalism, malicious mischief and such other additional perils as may be
included in a standard extended coverage endorsement insuring Tenant's
merchandise, trade fixtures, leasehold improvements and personal property
(including, without limitation, all theatre seats) in an amount equal to
the full replacement cost thereof, and Tenant may also maintain, but shall
not be required to maintain, such fire and casualty insurance as Tenant
shall see fit on the Premises (ices, the building) sufficient to repair or
rebuild the Premises as nearly as possible to their previous condition, or
in any amount less than that if Tenant so determines, together with such
additional contents insurance as Tenant sees fit, all at Tenant's sole
cost and sole option.
(ii) Any such insurance maintained by Tenant shall name the Landlord
and Tenant, as their interests may appear, as named insureds, but shall
also provide for a Trustee as loss payee for purposes of holding any
proceeds paid until distribution can be effected consistent with the
provisions of this paragraph (c) of this Section 26.
(iii) In the event that, in accord with the provisions of paragraph
(b) of this Section 26, the Landlord undertakes to enter and repair or
rebuild the Premises as nearly as possible as is set forth at paragraph
(b) above, the Trustee shall make the insurance proceeds available to
Landlord, as shall be required for the said building, excepting only the
portion of the proceeds due Tenant in all events as set forth in
subparagraph (v).
(iv) In the event this Lease is terminated under any provision of
this Section 26, the Trustee shall pay the proceeds of the insurance such
that Tenant receives an
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amount equal to the unamortized balance of Tenant's leasehold
improvements, together with the unamortized balance of all furniture,
fixtures, and equipment as are subject to Landlord's control at the end of
this Lease, as such unamortized balance is shown in each case on Tenants
books for federal income tax purposes. After such payment to the Tenant,
together with the payment called for at subparagraph (v) below, the
Trustee shall pay Landlord the balance of the proceeds, PROVIDED that
Landlord shall first deliver to Tenant the Landlord's covenant that it
will not build or operate or allow any other person to build or operate a
theater in the Center for a period of three years from the date of
casualty.
(v) Tenant shall in all events receive from the Trustee immediate
payment of so much of the insurance proceeds as are paid by the insurer
for Tenant's loss of cash, valuable papers, inventory, movable personal
property, etc. and such other property or insurable interest of Tenant as
is not fixtures and equipment whose disposition is subject to the
direction and control of Landlord at the termination of this Lease.
Nothing in this paragraph (c) shall be construed to reduce or eliminate
Tenant's insurance obligations elsewhere in this Lease.
SECTION 27: LAWS AND ORDINANCES:
Tenant agrees to observe and comply with all laws, ordinances, rules and
regulations of the Federal, state, county and municipal authorities applicable
to the business to be conducted by Tenant in the Premises, including the making
of structural and non-structural repairs or alterations due to Tenant's use or
occupancy thereof. If any of such laws, ordinances, rules and regulations shall
require structural alterations which would have been required irrespective of
the nature of the tenancy, then in such event the same shall be
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complied with by Landlord and shall be deemed part of Operating Costs. Tenant
agrees not to do or permit to be done at any time during the Term anything in
the Premises, or keep anything therein, which will increase the rate of fire
insurance premiums on the Center or any part thereof, or on the property kept
therein.
SECTION 28: SIGNS:
No sign shall be affixed to or placed upon any exterior part of the
Premises or the Center by Tenant, except in such manner, and of such size,
design, location and color as shall be approved in advance by Landlord in
writing and installed and maintained at Tenant's sole cost and expense. Landlord
shall not unreasonably withhold its approval to Tenant's exterior sign(s)
provided same are consistent with the character of the Center.
SECTION 29: PRIORITY OF FEE MORTGAGES:
This Lease shall be subject and subordinate to any present or future
mortgages of the entire fee interest of the land and building of which the
Premises are a part and any renewals, modifications, replacements or extensions
thereof. No further document shall be necessary to effect said subordination.
Tenant shall, however, on demand of Landlord, execute, acknowledge and deliver
to any mortgagee a subordination agreement or an agreement to attorn to such
mortgagee as landlord if such mortgagee becomes landlord hereunder. If the
holder of any mortgage of the entire fee interest of the land and building of
which the Premises are a part requires that this Lease have priority over such
mortgage, Tenant shall, upon request of such holder, execute, acknowledge and
deliver to such holder an agreement acknowledging such priority. If Tenant does
not execute, acknowledge and deliver same within ten (10) days following request
for same by Landlord, then Tenant shall be deemed to have appointed Landlord as
its attorney-in-fact, coupled with an interest, to so execute, acknowledge and
deliver such instrument.
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Landlord shall use its reasonable efforts to obtain from any such present
or future mortgagee an agreement ("Non-Disturbance Agreement"), in writing,
providing in substance that so long as Tenant performs all of the obligations
imposed upon Tenant hereunder, its tenancy will not be disturbed by any default
under the mortgage nor shall Tenant be named as a defendant in any foreclosure
proceeding.
In the event Landlord does not obtain a Non-Disturbance Agreement from its
present or any future mortgagee, Landlord agrees that:
(i) It will deliver to Tenant promptly upon receipt (time being of
the essence) a copy of any notice that Landlord receives from its mortgagee
expressly relating to any delinquency, omission, or default by Landlord under
its mortgage.
(ii) It will afford to Tenant a reasonable opportunity to tender or
effect cure of the delinquency, omission, or default claimed in such notice.
(iii) If the tender or cure is accepted by the mortgagee to the
credit of the Landlord, Landlord will allow Tenant to offset and apply the costs
of such tender or cure against any balance otherwise due or coming due from
Tenant to Landlord under this Lease, so that Tenant might receive credit for
same as though said costs had been paid to Landlord as rent or other items due
hereunder.
In the event Landlord does not obtain a Non-Disturbance Agreement, as is
set forth in the second paragraph of this Section 29, from the holder of any
future mortgage and such future mortgagee is not an institutional lender, then
this Lease shall retain so much of its priority over any such future mortgage to
a non-institutional mortgagee as shall be necessary for Tenant hereunder to
retain possession of the Premises in accord with the provisions of this Lease so
long as the Tenant shall comply with the terms of this Lease.
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The inability of Landlord to obtain a Non-Disturbance Agreement from any
present or future mortgagee, as aforesaid, shall not be deemed a default on
Landlord's part of its obligations hereunder, or impose any claim in favor of
Tenant against Landlord by any reason thereof, or affect the validity of this
Lease.
SECTION 30: FIRST TWO MONTH'S RENT:
Upon the execution hereof, Tenant shall pay to Landlord the sum of
$25,000.00 which amount shall be applied to the first two months of Basic Rent
coming due under this Lease.
SECTION 31: RULES AND REGULATIONS, EMPLOYEE PARKING:
(a) Reasonable rules and regulations regarding the Premises and the
Center, including the walkways and parking areas, and the use thereof, which may
hereafter be promulgated by Landlord, shall be observed by Tenant and Tenant's
employees, agents and business invitees. Landlord reserves the right to rescind
any rules promulgated hereafter, and to make such other and further rules and
regulations as in its reasonable judgment may from time to time be desirable for
the safety, care and cleanliness of the Premises and the Center and for the
preservation of good order therein, which rules, when so made and reasonable
notice given to Tenant, shall have the same force and effect as if originally
made a part of this Lease. Such other and further reasonable rules shall not,
however, be inconsistent with the proper and rightful enjoyment by Tenant of the
Premises and the Center in the conduct of its business.
(b) In the event that Tenant's employees park in an area other than
that designated by Landlord, then, after notice, Tenant shall pay to Landlord
the sum of Ten and 00/100 ($10.00) Dollars per day for each car of its employees
which is parked in an area other than that designated by Landlord for employee
parking, which sum is agreed to be just and reasonable compensation to Landlord
for each such parking violation.
SECTION 32: TENANT'S VIOLATION OF TERMS - RE-ENTRY BY LANDLORD:
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In case of violation by Tenant of any of the covenants, agreements and
conditions of this Lease, or of the rules and regulations hereafter to be
reasonably established by Landlord, and upon failure (i) to cure or otherwise
discontinue such violation of any nonmonetary obligation within twenty (20) days
after notice thereof given to Tenant, unless a greater time is reasonably
necessary in Landlord's opinion to cure said violation, or (ii) to cure any
violation set forth in Section 14 within the time period set forth therein, this
Lease shall thenceforth, at the option of Landlord, become null and void, and
Landlord may re-enter without further notice or demand. The Rent for the
remainder of the Term in such case shall become due and be paid, and Tenant
shall be liable for all loss or damage resulting from such violation as
aforesaid. No waiver by Landlord of any violation ox breach of condition by
Tenant shall constitute or be construed as a waiver of any other violation or
breach of condition, nor shall lapse of time after breach of condition by Tenant
before Landlord shall exercise its option under this Section operate to defeat
the right of Landlord to declare this Lease null and void and to re-enter upon
the Premises after the said breach or violation. Landlord shall have the option
of correcting said default and charging the cost thereof to Tenant as Additional
Rent, which shall be due and payable with the next Rent payment, together with
interest at the Default Rate.
SECTION 33: NOTICES:
All notices and demands, legal or otherwise, incidental to this Lease, or
the occupancy of the Premises, shall be in writing. If Landlord or its agent
desires to give or serve upon Tenant any notice or demand, it shall be
sufficient to send a copy thereof by certified mail, return receipt requested,
or by nationally recognized overnight courier, addressed to Tenant at the
address at the beginning of this Lease or to such other address as Tenant may
from time to time designate to Landlord in
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writing, with a copy to Buklad and Buklad, Attention: Henry A. Buklad, Jr., 76
South Orange Avenue, South Orange, New Jersey 07079. Notices from Tenant to
Landlord shall be sent by certified mail, return receipt requested, or by
nationally recognized overnight courier, at the address at the beginning of this
Lease, with a copy thereof to Sills Cummis Zuckerman Radin Tischman Epstein &
Gross, Attention: Morris Yamner, Esq., One Riverfront Plaza, Newark, New Jersey
07102-5400, or to such other party or place as Landlord may from time to time
designate to Tenant in writing. The date of receipt or rejection, as evidenced
by the green receipt card or bill of lading, as the case may be, shall be
conclusive evidence of the date of service.
SECTION 34: ENTIRE AGREEMENT:
This Lease contains all agreements made between the parties hereto. No
representative or agent of Landlord or Tenant is authorized to make any
representations or to alter or modify this Lease or any of the options in this
Lease contained and provided for in any way. Any additions, alterations,
changes, or modifications to or in this agreement or any other agreements
hereafter made or conditions created, to be binding upon the parties hereto,
must be in writing and signed by said parties, and it is agreed that none of the
provisions of this Lease, including this provision, can be waived, except by
writing duly signed by the parties hereto.
SECTION 35: INSOLVENCY OF TENANT:
It is further agreed that if at any time during the Term of this Lease
Tenant shall make any assignment for the benefit of creditors, or be decreed
insolvent or bankrupt according to law, or if a receiver shall be appointed for
Tenant, and the same is not dismissed within thirty (30) days, then Landlord
may, at its option, terminate this Lease, exercise of such option to be
evidenced by notice to that effect served upon the assignee, receiver, trustee
or other person in charge of the liquidation of the property of Tenant or
Tenant's estate, but such termination
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shall not release or discharge any payment of rent payable hereunder and then
accrued, or any liability then accrued by reason of any agreement or covenant
herein contained on the part of Tenant or Tenant's legal representatives.
Anything in this Section 35 to the contrary notwithstanding, if in any
bankruptcy or reorganization proceedings the full Rent payable to Landlord shall
be paid and Tenant shall continue to observe all the other terms and conditions
of this Lease, Landlord's right to terminate shall not be operative.
SECTION 36: EMINENT DOMAIN, CONDEMNATION:
(a) If the whole of the Premises shall be taken under the power of eminent
domain, then this Lease shall be terminated as of the day possession shall be
taken.
(b) If more than twenty-five (25%) percent of the floor area of the
Premises, or if more than fifty (50%) percent of the common parking area, or if
more than fifty (50%) percent of all of the ground level floor area of the
Center shall be taken under power of eminent domain, either Landlord or Tenant
may terminate this Lease by written notice given within thirty (30) days after
the date of surrendering possession to the public authority pursuant to such
taking, and if neither Landlord nor Tenant elects to terminate this Lease,
Landlord shall restore and adapt the remaining Premises, and the Rent shall be
reduced as described in Paragraph (c) below.
(c) If twenty-five (25%) percent or less of the floor area of the
Premises, or fifty (50%) percent or less of the common parking area, or fifty
(50%) percent or less of all of the ground level floor area of the Center shall
be taken under the power of eminent domain, this Lease shall not terminate but
shall continue in full force and effect, except that the Basic Rent shall be
reduced in the same proportion that the floor area of the Premises so taken
bears to the total floor area demised to Tenant at the time of such taking, and
Landlord shall, at its own cost and expense, making all necessary restorations
to the Premises as
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to constitute the Premises or the building of which the Premises are a part, a
complete architectural unit.
(d) All damages awarded for any taking under the power of eminent domain,
whether for the whole or a part of the Premises, shall belong to and be the sole
property of Landlord, whether such damages shall be awarded as compensation for
diminution in value to the leasehold or to the fee of the premises; provided,
however, that Landlord shall not be entitled to any award made to Tenant for
loss of or damage to Tenant's trade fixtures.
(e) If this Lease is terminated as provided in this Section, Tenant shall
pay all Rent and additional charges and perform all other covenants up to the
day that possession is so taken by public authority and Landlord shall (i) make
a proportionate refund of any Rent or additional charges paid by Tenant in
advance and (ii) reimburse Tenant for the unamortized costs of Tenant's
leasehold improvements (to the extent not covered by any award made by the
condemning authority or otherwise).
(f) Tenant acknowledges and agrees (i) that a condemnation of a portion of
the Center is pending as of the date hereof; (ii) that Tenant has independently
verified the status of such condemnation proceeding; and (iii) that Tenant's
obligations under this Lease shall not in any way be diminished thereby.
SECTION 37: DELIVERY OF LEASE AND RECORDING:
No rights are to be conferred upon Tenant until this Lease has been signed
by Landlord and an executed copy of the Lease has been delivered to Tenant.
This Lease shall not be recorded; however, Landlord shall have the right,
but not the obligation, to record a short-form or memorandum thereof, at
Landlord's expense, at any time during the term hereof.
SECTION 38: LEASE PROVISIONS NOT EXCLUSIVE - INDEPENDENT COVENANTS:
The rights and remedies of Landlord contained in this Lease are not
intended to be exclusive but as additional to all other
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rights and remedies Landlord would otherwise have by law. Tenant agrees that
Tenant's covenants and obligations under this Lease shall be independent of
Landlord's covenants and obligations under this Lease and that each such
covenant and obligation is independent of any other covenant or obligation.
Landlord's breach or non-performance of any of Landlord's covenants or
obligations under this Lease shall not excuse Tenant of Tenant's covenants and
obligations under this Lease, and shall not be the basis for any defense, of any
kind or nature whatsoever, to any suit by Landlord for Tenant's breach or
nonperformance of any of Tenant's covenants or obligations under this Lease
(including, without limitation, Tenant's failure to pay Rent).
SECTION 39: HEIRS, ETC.:
All of the terms, covenants and conditions of this Lease shall inure to
the benefit of, and be binding upon, the respective heirs, executors,
administrators, successors and assigns of the parties hereto.
SECTION 40: DATE OF POSSESSION:
Landlord shall not be liable for failure to give possession of the
Premises upon the commencement date by reason of the fact that the Premises are
not ready on the Delivery Date, or due to a prior tenant wrongfully holding over
or any other person wrongfully in possession, or because of Landlord's failure
to complete the Landlord Alteration, or for any other reason; in such event, the
Rent shall not commence until possession is given or is available. If Landlord
has not completed the Landlord Alteration and given possession of the Premises
to Tenant within two hundred seventy (270) days of the date hereof, Tenant may
terminate this Lease by giving Landlord ten (10) days' written notice and
neither party shall have any obligation to the other except that Landlord shall
return to Tenant without interest, any moneys it has received for Rent and the
Security Deposit under
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this Lease (provided Tenant is not in default of this Lease) and the parties
shall have no claim against the other.
SECTION 41: REAL ESTATE TAXES:
The term "real estate taxes" shall mean all taxes imposed on the land and
buildings constituting the Center including, without limitation, special
assessments, water and sewer charges, and other governmental charges not levied
against the land and buildings. If the system of taxation shall be changed
during the term of this Lease, or any extension thereof, so that in lieu of, or
in addition to, the regular municipal real estate taxes now assessed or levied
against real property, a tax shall be imposed on such rental income or rental
value, or on some other basis, and Landlord shall be burdened in part or in
whole with such additional tax or taxes, Tenant shall pay or reimburse Landlord
its Proportionate Share of the amount of such substitute or additional tax or
taxes. If Landlord and Tenant cannot agree on the amount of such substitute or
additional tax or taxes, the matter shall be submitted to arbitration in Newark,
New Jersey in accordance with the rules of the American Arbitration Association.
Anything contained herein to the contrary notwithstanding, Tenant shall
pay one hundred (100%) percent of any and all assessments resulting from the
Tenant Alteration or any other construction or improvements initiated by Tenant.
SECTION 42: TAX APPEALS BY LANDLORD:
If Landlord shall institute a tax appeal, and said tax appeal shall result
in a reduction in taxes, then Tenant shall pay to Landlord its Proportionate
Share of Landlord's cost of said appeal, but in no event shall that amount
exceed the reduction in taxes and Tenant shall receive or be credited with its
Proportionate Share of any refund or reduction.
Tenant shall cooperate in any proceedings described herein. Tenant shall
be entitled to its Proportionate Share of the refund, if any (to the extent the
refund is allocable to a
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portion of the Term), after Landlord deducts any and all costs and expenses.
SECTION 43: QUIET ENJOYMENT:
Landlord represents that it has the full right and power to execute and
perform this Lease and to grant the estate demised herein, and that Tenant, on
payment of the Rent herein reserved and performing the covenants and agreements
hereof, shall peaceably and quietly have, hold and enjoy the Premises and all
rights, easements, appurtenances and privileges belonging or in any way
appertaining thereto during the Lease Term without molestation or hindrance of
any person whomsoever.
SECTION 44: LANDLORD'S SECURITY INTEREST:
Tenant hereby grants Landlord a security interest in Tenant's merchandise,
trade fixtures, leasehold improvements and personal property (including, without
limitation, all theater seats) located in or upon the Premises to further secure
Tenant's performance of any and all of Tenant's obligations under this Lease. To
perfect said security interest, Tenant agrees to execute and deliver to Landlord
such financing statements (or any extensions thereof) required by the applicable
Uniform Commercial Code as Landlord may from time to time request. In the event
Tenant does not promptly execute and deliver such financing statement to
Landlord or its designee, Tenant hereby irrevocably appoints Landlord as
Tenant's attorney-in-fact, coupled with an interest, to execute any such
statement for and on behalf of Tenant. Tenant shall not assign, lien, encumber,
chattel mortgage or create a security interest in and to any of its merchandise,
trade fixtures, leasehold improvements and personal property without first
obtaining in each instance the prior written consent of Landlord and any first
mortgagee of the Premises. Without limitation to Landlord's rights as a secured
party pursuant to the foregoing sentences of this Section 44, and anything
contained in this Lease to the contrary notwithstanding, in the event of
Tenant's default, all of Tenant's merchandise,
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trade fixtures, leasehold improvements and personal property shall remain on the
Premises at Landlord's sole option and, continuing during the length of said
default, Landlord shall have the right to take exclusive possession of same and
to use same free of rent or charge until all defaults have been cured or, at
Landlord's sole option, to require Tenant to remove same immediately.
SECTION 45: OUTSIDE OUTRAGE:
Tenant shall not store any goods, other than temporarily in connection
with the delivery of any item, outside of the Premises or any place in the
Center.
SECTION 46: CERTIFICATE OF OCCUPANCY:
If required, Tenant shall obtain a Certificate of Occupancy permitting the
use of the Premises by Tenant in accordance with the terms of this Lease,
provided that Landlord shall cooperate fully with Tenant in obtaining said
Certificate of Occupancy.
SECTION 47: HOLDING OVER:
If Tenant shall hold over, with or without Landlord's consent, after the
Term, then such holding over shall be constituted as a tenancy from month to
month, subject to all of the provisions, conditions and obligations of this
Lease, except that the Basic Rent shall be double the Basic Rent for the last
month of the Term.
SECTION 48: CONSENTS TO DEFAULTS:
No consent or waiver, express or implied, by Landlord, to or of any breach
or default in the performance by Tenant of Tenant's obligations hereunder shall
be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by Tenant of the same or any other obligations of
Tenant hereunder. Failure on the part of Landlord to complain of any act or
failure to act of Tenant or to declare Tenant in default, irrespective of how
long such act or failure continues, shall not constitute a waiver by Landlord of
its rights hereunder.
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SECTION 49: INTEREST ON DEFAULT:
In the event Tenant fails to pay Rent when due, or fails, after notice, to
take any action required of it under this Lease, which action is then taken by
Landlord, Tenant shall pay to Landlord interest at the rate of twenty-four (24%)
per cent per annum (the "Default Rate") on the Rent or monies expended by
Landlord to cure any default of Tenant, which sum is agreed to be just and
reasonable compensation to Landlord for Tenant's failure to pay the amount due
and for Landlord not having the funds to otherwise invest, said interest to run
from the date the same becomes due from Tenant until the date of payment. In the
event that said interest rate is not allowable by law, then the interest to be
paid shall be the highest rate allowable by law. No interest shall be due
provided Rent is paid on or before the 5th day of the month.
SECTION 50: FINANCIAL STATEMENTS - ESTOPPEL CERTIFICATES:
(a) Tenant shall, if required by Landlord's mortgagee or any future
mortgagee, or prospective mortgagee or prospective purchaser, submit to
Landlord, any prospective mortgagee or purchaser, without cost to Landlord, a
copy of Tenant's financial statement which shall be considered "confidential" by
the recipient. Tenant shall also, without cost to Landlord, submit to any
prospective mortgagee or purchaser such prior statements as it may have, as and
when required by Landlord or Landlord's mortgagee or prospective mortgagee or
prospective purchaser.
(b) Tenant, upon at least five days' prior request by Landlord, shall
(without charge therefor) execute, acknowledge and deliver to Landlord (or to
such parties as Landlord shall designate), a statement addressed to Landlord or
such designated party certifying that this Lease is unmodified and in full force
and effect (or, if there have been modifications, that it is in full force and
effect as modified and stating the modifications), stating the dates to which
the base rent and additional rent have been paid, and stating whether or not
Tenant knows of any default
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by Landlord under this Lease, and, if so, specifying each such known default, it
being intended that any such statement may be relied upon by Landlord, or the
holder of any mortgage which is or may become a lien upon the Building, a
purchaser of the Building, an assignee of Landlord's interest in this Lease or
any such other parties as Landlord shall have designated. In the event Tenant
does not promptly execute and deliver any such statement to Landlord or such
designated party, as aforesaid, Tenant hereby irrevocably appoints Landlord as
Tenant's attorney-in-fact, coupled with an interest, to execute any such
statement for and on behalf of Tenant.
SECTION 51: TABLE OF CONTENTS AND CAPTIONS:
The Table of Contents, captions or notes in the margin of this Lease are
inserted only as a matter of convenience and in no way to define, limit or
describe the scope or intent of this Lease, or the terms, conditions and
provisions hereof, nor as affecting the meaning of the text of any article or
section hereof in any way.
SECTION 52: BROKER:
Tenant agrees to pay, pursuant to a separate agreement, all brokerage
commissions and any consulting fees payable in connection with the negotiations
for, and execution of, this Lease. Tenant and Landlord warrant to each other
that they have not dealt with any real estate broker except Alexander Summer Co.
in connection with this Lease. In the event of any misrepresentation by either
Landlord or Tenant, each party agrees to hold the other harmless, including any
costs, interest and legal fees.
SECTION 53: NO ORAL CHANGES:
(a) There are no oral agreements between Landlord and Tenant and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
letters of intent, lease proposals, brochures, agreements, representations,
promises, warranties and undertakings between Landlord and Tenant with respect
to the
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subject matter hereof and none thereof shall be used to interpret or construe
this Lease.
(b) This Lease, including the Schedules hereto and any addenda hereto,
sets forth all of the covenants, promises, agreements, conditions and
undertakings between Landlord and Tenant concerning the Premises and the Center.
No alteration, amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant unless reduced to writing, signed by them and mutually
delivered between them.
SECTION 84: MERCHANT'S ASSOCIATION:
In the event that a Merchants' Association (the "Association") is
established, Tenant agrees to abide by the By-Laws of the Association, pay its
Proportionate Share of any dues, assessments, or costs incurred by the
Association, and join and thereafter remain a member of the Association so long
as one exists; provided, however, that Pathmark (or its successor-in interest)
and 75% of the other tenants of the Center are then also members of the
Association and are obligated to contribute an equitable share to the
Association.
SECTION 55: INTERPRETATION - SEVERABILITY:
The laws of the State of New Jersey shall govern the validity, performance
and enforcement of this Lease. The invalidity or unenforceability of any
provision hereof shall not affect or impair any other provision.
SECTION 56: ACCORD AND SATISFACTION:
No payment by Tenant or receipt by Landlord of lesser amount than the Rent
stipulated in this Lease shall be deemed to be other than on account of the
earliest stipulated Rent, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
provided in this Lease by law.
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SECTION 57: CONSENTS:
With respect to any provision of this Lease which requires that Landlord
shall not unreasonably withhold or unreasonably delay any consent or approval,
Tenant shall not make or assert any claim for, and Tenant hereby waives any
claim for money damages. Tenant shall not claim any money damages by way of
setoff, counterclaim or defense, based upon any claim or assertion by Tenant
that Landlord has unreasonably withheld or unreasonably delayed any consent or
approval. Tenant's sole and exclusive remedy shall be an action or proceeding
for specific performance, injunction or declaratory judgment.
SECTION 58: MORTGAGEE PROTECTION CLAUSE:
Tenant agrees to give all mortgagees and/or trust deed holders, by
certified mail, a copy of any notice of default served on Landlord, provided
that prior to such notice Tenant has been notified, in writing (by way of notice
of assignment of rents and leases or otherwise), of the name and address of such
mortgagees and/or trust deed holders. The mortgagees and/or trust deed holders
shall have the same time within which to cure such default as is given to
Landlord under this Lease.
SECTION 59: [INTENTIONALLY OMITTED]
SECTION 60: BUSINESS HOURS:
Tenant agrees to continuously operate not less that four (4) of the eight
screen rooms in the Premises and otherwise conduct its business Monday to
Friday, from at least 7 p.m. to at least 12 midnight; Saturday, from at least 2
p.m. to at least 12 midnight; and Sundays, from at least 2 p.m. to at least 12
midnight, except that Tenant may close on July 4, New Year's Day, Thanksgiving
Day, Christmas Day, Mother's Day, Easter Sunday and such other days as may be
necessary whenever any repairs or alterations permitted or required to be made
hereunder cannot be effected in Tenant's reasonable opinion unless the Premises
are closed. In the event that Tenant does not (i) open within one calendar month
of the time period set forth in Section 12(b), or
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(ii) remain open without interruption during the aforesaid hours, Tenant shall
pay to Landlord, as Additional Rent, $250.00 per day for each day or part
thereof that it is closed, which sum is agreed to be just and reasonable
compensation to Landlord for Tenant's failure to so open the Premises for
business. Tenant need not remain open in severe inclement weather.
SECTION 61: NEGOTIATED LEASE:
Landlord and Tenant represent, acknowledge and agree that this Lease has
been fully and freely negotiated. In the event of a dispute in respect of all or
any part of this Lease, the parties agree that no inference shall be drawn
against Landlord by reason of Landlord having prepared this Lease.
SECTION 62: CENTER:
(a) The Center shall include the parcel(s) of land and improvements
generally depicted as the Center whether owned in fee or ground leased by
Landlord. Landlord reserves the right to add to or sever the ownership of or
title to any portion of the Center at any time. It is agreed that the depiction
of the Center does not constitute a representation, covenant or warranty of any
kind by Landlord. Landlord reserves the right to change the size and dimensions
of the Center, the number and location of buildings, building dimensions, the
number of floors in any of the buildings, store dimensions, identity and type of
other stores and tenancies, and, as provided in Section 10, the common areas.
(b) In accordance with paragraph (a) above, Landlord specifically reserves
the right to include any additional buildings and improvements which may be
erected adjacent to the Center as part of the Center for all purposes under this
Lease.
(c) In the event that Landlord exercises its rights pursuant to paragraph
(a) or (b) above, Operating Costs shall be determined pursuant to Section 8
hereof on the basis of the redefined Center.
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(d) Landlord shall have the right to convert the Premises and/or the
Center into condominiums and in connection therewith Landlord shall be permitted
to assign this Lease to the owner of a condominium which includes the Premises.
In such event, Tenant agrees to attorn to the owner of such condominium as
Landlord under this Lease.
SECTION 63: CONTROL OF TENT:
If Tenant or any Guarantor under this Lease is a corporation and if at any
time during the Term of this Lease such corporation's shares of capital stock
shall be transferred to a related entity or corporation, Tenant shall so notify
Landlord. Landlord may terminate this Lease if Tenant or any Guarantor under
this Lease is a corporation or partnership and the interest of any corporation
or partner in Tenant or any Guarantor under this Lease in excess of fifty (50%)
percent is transferred to a non-related entity or corporation or to an
individual, and Tenant shall be and remain liable to Landlord for all damages
and losses suffered by it in the same manner as if this Lease were terminated
for any other default of Tenant. Notwithstanding the foregoing, transfers of the
corporation's shares of capital stock to members of the immediately family of
Jesse Y. Sayegh shall not be subject to the provisions of this Section 63
provided that Jesse Y. Sayogh and/or Elias Sayegh and/or Mousa Sayegh retain
management and effective control of Tenant in its regular business operations
including financial, marketing and employment decisions and otherwise, and in
the event of the death of the said Jesse Y. Sayagh, such management and control
shall be conducted under the supervision and guidance of the wife and/or
children of the said Jesse Y. Sayegh for not less than five (5) years after his
death.
SECTION 64: PROCESSING CHARGE:
Tenant agrees to reimburse Landlord for reasonable attorneys' fees and
accounting fees incurred by Landlord in connection with the processing and
documentation of any
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assignment, subletting, license, concession, creation of a security interest,
granting of a collateral assignment, change of ownership or other transfer
required by Tenant for which Landlord's consent is required or sought, it being
agreed that Landlord shall not be required to take any action thereon until
Landlord is first paid such amount.
SECTION 65: RIGHT OF FIRST REFUSAL:
In the event that any or all of Tenant's interest in the Premises and/or
this Lease is transferred by operation of law to any trustee, receiver, or other
representative or agent of Tenant, or to Tenant as a debtor in possession, and
subsequently any or all of Tenant's interest in the Premises and/or this Lease
is offered or to be offered by Tenant or any trustee, receiver, or other
representative or agent of Tenant as to its estate or property (such person,
firm or entity being hereinafter referred to as the "Grantor"), for assignment,
conveyance, lease, or other disposition to a person, firm or entity other than
Landlord (each such transaction being hereinafter referred to as a
"Disposition"), it is agreed that Landlord has and shall have a right of first
refusal to purchase, take, or otherwise acquire, the same upon the same terms
and conditions as the Grantor thereof shall accept upon such Disposition to such
other person, firm, or entity; and as to each such Disposition the Grantor shall
give written notice to Landlord in reasonable detail of all of the terms and
conditions of such Disposition within twenty (20) days next following its
determination to accept the same but prior to accepting the same, and Grantor
shall not make the Disposition until and unless Landlord has failed or refused
to accept such right of first refusal as to the Disposition, as set forth
herein.
Landlord shall have sixty (60) days next following its receipt of the
written notice as to such Disposition in which to exercise the option to acquire
Tenant's interest by such Disposition, and the exercise of the option by
Landlord shall be
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effected by written notice to that effect sent to the Grantor by certified or
registered mail; but nothing herein shall require Landlord to accept a
particular Disposition or any Disposition, nor does the rejection of any one
such offer of first refusal constitute a waiver or release of the obligation of
the Grantor to submit other offers hereunder to Landlord. In the event Landlord
accepts such offer of first refusal, the transaction shall be consummated
pursuant to the terms and conditions of the Disposition described in the notice
to Landlord. In the event Landlord rejects such offer of first refusal, Grantor
may consummate the Disposition with such other person, firm, or entity; but any
decrease in price of more than two (2%) percent of the price sought from
Landlord or any change in the terms of payment for such Disposition shall
constitute a new transaction requiring a further option of first refusal to be
given to Landlord hereunder.
SECTION 66: HAZARDOUS SUBSTANCES:
(a) Tenant shall not keep, maintain or dispose of any hazardous, toxic or
nuclear substances or wastes at the Premises. At the end of the Term or any
extensions thereof, Tenant shall comply with all environmental laws including,
but not limited to, Environmental Clean-Up Responsibility Act, N.J.S.A. 13:
1K-6, et seq., resulting from Tenant's use and occupancy of the Premises. At
least thirty (30) days prior to the end of the Term of this Lease, or any
extensions thereof, or the vacation of the Premises by Tenant for any reason,
Tenant shall deliver to Landlord written proof from the proper governmental
authorities that all environmental laws have been complied with or are not
applicable to the Premises. During the Term, Tenant shall deliver to Landlord,
ten (10) days after written demand, any information, certificate or similar
document required by Landlord to comply with any environmental or similar laws.
Tenant represents and warrants that Tenant's Standard Industrial Classification
number as designated on the Standard Industrial Classification manual
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prepared by the Office of Management and Budget in the Executive Office of the
United States of America is, and shall be during the term of this Lease, #7830.
(b) Tenant shall provide all information within Tenant's control requested
by Landlord or the Industrial Site Evaluation Element or its successor
("Element") of the New Jersey Department of Environmental Protection and Energy
or its successor ("NJDEPE") for preparation of a non-applicability affidavit or
other type of submission, should Landlord or NJDEPE so request, and Tenant shall
promptly execute such affidavit or submission should the information contained
in the affidavit or submission be found by Tenant to be complete and accurate.
(c) If ECRA compliance becomes necessary at the Premises due to any action
or non-action on the part of Landlord, including but not limited to Landlord's
execution of a sale agreement for the Center or the Premises, any change in
ownership of the Center or the Premises, initiation of bankruptcy proceedings,
Landlord's financial reorganization or sale of the controlling share of
Landlord's assets, then Landlord shall comply with ECRA and all requirements of
the Element and NJDEPE at Landlord's own expense, except for the actual clean up
costs resulting from or attributable to Tenant's use and occupancy of the
Premises, which shall be borne by Tenant.
(d) This Section 66 shall survive the expiration or earlier termination of
this Lease.
SECTION 67: MODIFICATIONS REQUESTED BY MORTGAGEE:
In the event that a prospective mortgagee of the Center shall request a
change in the language of the terms of this Lease, or the execution of any
document in connection therewith, Tenant agrees to make such change or execute
such document provided the same shall not increase Tenant's obligations or
liabilities under this Lease.
SECTION 68: REIMBURSEMENT OF LEGAL EXPENSES:
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In case Landlord shall, without fault on its part, be made a party to any
litigation commenced by or against Tenant, Tenant shall pay on written demand
from Landlord, as Additional Rent hereunder, all casts, including reasonable
attorney's fees incurred by or against Landlord in connection with such
litigation. Tenant shall also pay on written demand from Landlord, as Additional
Rent hereunder, all costs and reasonable attorney's fees incurred by or against
Landlord in enforcing any of the covenants, terms, and provisions of this Lease,
or in terminating this Lease by reason of Tenant's default. Landlord shall have
the right to charge a legal fee no less than Two Hundred Fifty ($250.00) Dollars
for each and every instance where Landlord requires the use of its attorneys to
enforce any of the covenants, terms and provisions of this Lease.
SECTION 69: RIGHT TO EXTEND:
Tenant shall have the right, at its election, to extend the original term
of this Lease for one (1) additional period of ten (10) years followed by two
(2) successive additional periods of five (5) years each, exercisable upon the
following terms and conditions:
(a) Tenant shall give Landlord written notice of such election to extend
the term hereof (i) in the event of the extension of the original term, not
later than twelve (l2) months prior to the expiration of the original term, and
(ii) in the event of an extension of a term after the original term, not later
than twelve (12) months prior to the expiration of the then current term; (b) At
the time of exercise of such election and at the time of the commencement of
such extension term, Tenant shall not be in default of this Lease; and
(c) Each such extended term shall be upon the same terms and conditions as
during the original term hereof including the payment of Rent, except that
Tenant shall (i) have no further election to extend the term of the Lease beyond
the third
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additional term, (ii) pay to Landlord and Landlord shall accept Basic Rent
during such additional terms at the yearly rates set forth on Schedule "D"
hereof which shall be payable in advance, in monthly installments on or before
the first day of each month, (iii) pay to Landlord and Landlord shall accept as
Percentage Rent during such additional terms amounts based upon the applicable
Percentage Rent Base Amount set forth on Schedule "D" hereof, and (iv) at the
beginning of each such extended term, remodel the Premises at its sole cost and
expense including, without limitation, refurbishing all theater seats, and
painting and carpeting the Premises.
If Tenant elects to exercise any such option, the term of this Lease shall
be automatically extended for the period of such additional term without the
necessity for the execution of any instrument to effect the same, and in such
event the phrases "the term of this Lease" and "the term hereof" as used in this
Lease shall include such additional term.
IN WITNESS WHEREOF, the parties have executed these presents the day and
year first above written.
WITNESS: LESTER M. ENTIN ASSOCIATES
Landlord
/s/ Illegible By: /s/ Joseph Waters
- ---------------------------- ------------------------------
Joseph Waters, Partner
ATTEST: CJM ENTERPRISES, INC.
By: /s/ Jesse Y. Sayegh
- ---------------------------- ------------------------------
, Secretary , President
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<PAGE>
SCHEDULE "A"
The Premises
To be completed and incorporated when finalized, as is presently pending between
the parties, including "no-build" area.
Same for Exhibit A to Schedule E.
<PAGE>
[GRAPHIC OMITTED]
<PAGE>
EXHIBIT "B"
All that certain piece or parcel of land situate, lying and being in the Borough
at Kinnelon; County of Passaic, State of New Jersey, being more particularly
bounded and described as follows:
BEGINNING at a point in the southerly line of Kinnelon Road 75.00 feet wide at
its intersection with the easterly line of lands of Kenneth B. Mead as said
lands are recited in Deed Book C-34 page 79 and running; thence (1) south 86
degrees 46 minutes 49 seconds east, 717.78 feet along the southerly line of
Kinnelon Road (as recited in a certain deed from Daniel R. and Emma Mead and
Grace B. Mead to the County of Morris and recorded in Deed Book 1846 page 539)
to a point of curvature; thence (2) southeasterly on a curve to the right having
a radius of 1599.52 feet an arc distance of 640.03 feet along the same to a
point of compound curvature; thence (3) southerly on a curve to the right having
a radius of 65.00 feet an arc distance of 105.92 feet to a point in the westerly
line of a connecting ramp all as recited in deed book 1846 page 539; thence (4)
southerly on a curve to the left having a radius of 145.00 feet an arc distance
of 119.55 feet still along the same to a point of reverse curvature; thence (5)
southerly and southwesterly on a curve to the right having a radius of 40.00
feet an arc distance of 42.87 feet along the same to a point of tangency; thence
(6) south 43 degrees 39 minutes 37 seconds west 35.53 feet partly along the same
to its intersection with the northerly line of Kiel Avenue 25 feet north of the
centerline thereof; thence (7) south 70 degrees 39 minutes 50 seconds west,
255.15 feet along the northerly line of Kiel Avenue to a point of curvature;
thence (8) southwesterly on a curve to the left having a radius of 1444.79 feet
an arc distance of 177.78 along the same to a point of reverse curvature; thence
(8) southwesterly on a curve to the right having a radius of 170.71 feet an arc
distance of 106.42 feet along the same to a point of tangency; thence (10) north
80 degrees 40 minutes 10 seconds west, 178.75 feet along the same to a point of
curvature; thence (11) westerly on a curve to the right having a radius of
1319.04 feet an arc distance of 99.95 feet along the same to a point of
tangency; thence (12) north 76 degrees 19 minutes 40 seconds west 204.63 feet
along the same to a point of curvature; thence (13) westerly on a curve to the
right having a radius of 2190.60 feet an arc distance of 99.98 feet along the
same to a point of tangency; thence (14) north 73 degrees 42 minutes 50 seconds
west, 256.51 feet still along the same to a point in the easterly line of lands
of Herbert C. & Georgiana Stephens as recited in Deed Book T-57 page 457 and
running; thence (15) the same to the northeasterly corner thereof and a corner
of 10 seconds east, 193.50 feet along the same to the southerly line of Kinnelon
Road and the point and place of beginning.
(Containing 15.52 acres)
The above description prepared by Canger Engineering Associates. Fair Lawn,
New Jersey, August 24, 1965.
<PAGE>
SCHEDULE "C"
Certificate of Commencement
Pursuant to the provisions of Section 1 of the Lease dated ____________,
199__ , Landlord and Tenant, intending to be legally bound, hereby agree that
the Term of the Lease shall end on the _______ day of ________________,
_________, unless sooner terminated or extended as therein provided.
IN WITNESS WHEREOF, the parties have executed these presents the day and
year first above written.
WITNESS: LESTER M. ENTIN ASSOCIATES
Landlord
By:
- ------------------------- --------------------------
Joseph Waters, Partner
ATTEST: CJM ENTERPRISES, INC.
Tenant
By:
- ------------------------- --------------------------
, Secretary , President
<PAGE>
SCHEDULE "D"
Basic Rent/Percentage Rent Base Amount
Annual Percentage Rent
Year(s) Basic Rent Monthly Installment Base Amount
1 $175,000.00 $14,583.33 $1,944,444 44
2, 3 $200,000.00 $16,666.67 $2,222,222 22
4, 5, 6 $225,000.00 $18,750.00 $2,500,000.00
7, 8, 9 $245,250.00 $20,437.50 $2,725,000 00
10 $267,325.00 $22,277.08 $2,970.277 78
Ten Year Renewal Option
1-3 $267,325.00 $22,277.08 $2,970,277.78
4-5 $291,380.00 $24,281.67 $3,237,555.56
6-10 $300,000.00 $25,000.00 $3,333,333.33
First Five Year Renewal Option
1-5 The greater of (i) the Basic 2nd Renewal Rent 2nd Renewal Rent
Rent during the last twelve divided 12 divided .09
(12) full months of the Ten
Year Renewal Option or (ii)
the average Basic Rent plus
Percentage Rent paid during
the last three full years of
the Ten Year Renewal Option
("2nd Renewal Rent").
Second Five Year Renewal Option
1-5 The greater of (i) the Basic 3rd Renewal Rent 3rd Renewal Rent
Rent paid during the last divided by 12 divided by .09
twelve (12) full months of
the Ten Year Renewal Option
or (ii) the Basic Rent paid
during the First Five Year
Renewal Option or (iii) the
average Basic Rent plus
Percentage Rent paid during
the last three full years of
the First Five Year Renewal
Option ("3rd Renewal Rent")
<PAGE>
SCHEDULE "E"
Landlord Alteration
1. Remove existing partitions and storefronts as shown on Exhibit "A"
attached to this Schedule "E".
2. Install new roof over the Premises (the "roof installation").
3. Purchase and deliver new HVAC unit to the ground level of the Premises
(the "HVAC delivery"). Anything contained in this Lease to the contrary
notwithstanding, in the event the cost to Landlord therefor shall exceed
$100,000.00, Tenant shall pay such excess cost to Landlord prior to the
HVAC delivery). In addition, Tenant shall lift and install the new HVAC
unit at Tenant's sole cost and expense.
<PAGE>
SCHEDULE "F"
Tenant Alteration
1. Construction of eight (8) auditoria, complete with movie screens,
audio-visual equipment and seats.
2. Construction of lobby, restrooms, administrative office, etc.
3. Installation of any and all electrical, plumbing and other mechanical or
utility systems necessary for Tenant's use and occupancy of the Premises.
4. Lift and install the new HVAC unit.
5. Install signage permitted pursuant to Section 28.
<PAGE>
SCHEDULE "G"
Guaranty
ANNEXED TO LEASED DATED DECEMBER 17, 1991, BY AND BETWEEN LESTER M. ENTIN
ASSOCIATES, LANDLORD, AND CJM ENTERPRISES, INC., TENANT.
The undersigned, Jesse Y. Sayegh, whose home address is 8 Westview Court,
Cedar Grove, N.J. 07009 in consideration of the leasing of the leased premises
described in the above-referenced lease ("Lease") to the above mentioned Tenant
("Tenant"), does hereby covenant and agree as follows:
A. The undersigned hereby guarantees the full, faithful and timely payment
and performance by Tenant of all the payments, covenants and other obligations
of Tenant under or pursuant to the Lease. If Tenant shall default at any time in
the payment of any rent or any other sums, costs or charges whatsoever, or in
the performance of any of the other covenants and obligations of Tenant, under
or pursuant to the Lease, then the undersigned, at its expense, shall on demand
of Landlord fully and promptly pay all rent, sums, costs and charges to be paid
by Tenant, and perform all the other covenants and obligations to be performed
by Tenant, under or pursuant to the Lease, and in addition shall on Landlord's
demand pay to Landlord any and all sums due to Landlord, including (without
limitation) all interest on past due obligations of Tenant, costs advanced by
Landlord, and damages and all expenses, that may arise in consequence of
Tenant's default. The undersigned hereby waives all requirements of notice of
the acceptance of this Guaranty and all requirements of notice of breach or
nonperformance by Tenant.
B. The obligations of the undersigned hereunder are independent of, and
may exceed, the obligations of Tenant. A separate action or actions may, at
Landlord's option, be brought and prosecuted against the undersigned, whether or
not any action is first or subsequently brought against Tenant, or whether or
not Tenant is joined in any such action, and the undersigned may be joined in
any action or proceeding commenced by Landlord against Tenant arising out of, in
connection with or based upon the Lease. The undersigned waives any right to
require Landlord to proceed against Tenant or pursue ant other remedy in
Landlord's power whatsoever, any right to complain of delay in the enforcement
of Landlord's rights under the Lease, and any demand by Landlord and/or prior
action by Landlord of any nature whatsoever against Tenant, or otherwise.
C. This Guaranty shall remain and continue in full force and effect and
shall not be discharged in whole or in part notwithstanding (whether prior or
subsequent to the execution hereof) any alteration, renewal, extension,
modification, amendment or assignment of, or subletting, concession,
franchising, licensing or permitting under, the Lease. The undersigned hereby
waives notices of all of the foregoing, and agrees that the liability of the
undersigned hereunder shall be based upon the obligations of Tenant set forth in
the Lease as the same may be altered, renewed, extended, modified, amended or
assigned. For the purpose of this Guaranty and the obligations and liabilities
of the undersigned hereunder, "Tenant" shall be deemed to include any and all
concessionaires, licensees, franchisees, department operators, assignees,
subtenants, permitters or others directly or indirectly operating or conducting
a business in or from the leased premises, as fully as if any of the same were
the named Tenant under the Lease.
D. The undersigned's obligations hereunder shall remain fully binding
although Landlord may have waived one or more defaults by Tenant, extended the
time of performance by Tenant,
<PAGE>
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT, made this 31st day of December, 1996 between LESTER
M. ENTIN ASSOCIATES, a New Jersey partnership, 1033 Clifton Avenue, P.O. Box
2189, Clifton, New Jersey 07015 (hereinafter referred to as "Landlord") and CAM
ENTERPRISES, INC., a corporation of the State of New Jersey, having its
principal place of business at 101 Pompton Avenue, Cedar Grove, New Jersey 07009
(hereinafter referred to as "Tenant").
W I T N E S S E T H:
WHEREAS, by Lease dated on or about December 17, 1991 (the "Lease"),
Landlord demised unto Tenant certain premises in the Kinnelon Mall, Kinnelon
Road, Borough of Kinnelon, Morris County, New Jersey (the "Premises");
WHEREAS, Landlord and Tenant are mutually desirous of amending the
Lease as hereinafter provided; and
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions contained herein, and other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, and in further
consideration of the respective benefits to be derived by the parties hereto,
said parties covenant and agree as follows:
1. On or before December 31, 1996, Landlord shall pay to Tenant an agreed
upon sum of One Hundred Thousand and 00/100 ($100,000.00) Dollars, as full
reimbursement to Tenant of its claims for overpaid rent and common area charges
through the date hereof.
2. Effective January 1, 1997, the Premises shall be deemed to consist of
an agreed upon 23,050 square feet.
3. Effective January 1, 1997, the Proportionate Share shall be deemed to
be 22.68%. In the event the rentable square footage of the Center is expanded or
reduced during the Term of the Lease, the Proportionate Share shall be
proportionately adjusted and Tenant's agreed upon share of Operating Costs shall
also be proportionately adjusted.
<PAGE>
4. Schedule D of the Lease, as referenced in Section 2 of the Lease, is
hereby amended so that in each year of the remainder of the original Term,
commencing with the Basic Rent payment due on January 1, 1997, (i) the Annual
Basic Rent shall be reduced by Twenty-Seven Thousand and 00/100 ($27,000.00)
Dollars, or Two Thousand Two Hundred Fifty and 00/100 ($2,250.00) Dollars per
month, and (ii) the Percentage Rent Base Amount shall be the quotient of the
Annual Basic Rent, as hereby reduced, divided by .09.
5. Commencing January 1, 1996, Sub-Section 4(a) of the Lease shall be
deleted in its entirety and the following shall be inserted in its place and
stead:
Tenant shall pay as Additional Rent, and as its agreed upon share of
Landlord's cost to operate the common areas of the Center ("Operating Costs")
(irrespective of the actual amount of Operating Costs incurred by Landlord), an
agreed upon amount equal to Ninety-Two Thousand Two Hundred and 00/100 ($92,200)
Dollars per year (i.e., $4.00 per square foot) (the "Operating Costs Charge").
The Operating Costs Charge shall be paid in advance, in one-twelfth (1/12th)
installments, on the first day of each month. Commencing on January 1, 1998 and
on each January 1 thereafter during the Term of this Lease, the Operating Costs
Charge shall be increased by Two Thousand Seven Hundred Sixty-Six and 00/100
($2,766.00) Dollars each year, payable in equal monthly installments of Two
Hundred Thirty and 50/100 ($230.50) Dollars per month, payable on the first day
of each month. Tenant hereby acknowledges and agrees that the actual amount of
Operating Costs incurred by Landlord is of no relevance to Tenant or this Lease,
and that Tenant shall have no right to audit, inspect or otherwise review
Landlord's books and records pertaining to Operating Costs.
6. Commencing January 1, 1997, Section 8 of the Lease shall be deleted in
its entirety and the following shall be inserted in its place and stead:
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<PAGE>
"It is hereby expressly agreed that Landlord's obligations with
respect to the common areas shall specifically include, as part of
Operating Costs, the costs incurred by Landlord in policing the common
areas and in keeping the common areas in clean and orderly condition, all
as is required in the normal operation of a shopping center; however, in
the event Tenant breaches any of its Lease obligations, such as, by way of
example and not limitation only, the restricted seating time periods set
forth in Subsection 13(a) or required operation of the Premises with due
regard for the maintenance of security, traffic control, crowd control and
cleanliness of the common areas of the Center as set forth in Subsection
13(h), then, if any such breach by Tenant increases Landlord's obligations
for the common areas above the requirements customarily associated with
the normal operation of a shopping center, Tenant shall pay, as Additional
Rent and in addition to the Operating Costs Charge payable by Tenant
pursuant to Subsection 4(a) of this Lease, one hundred (100%) percent of
any and all such excess costs and expenses so incurred by Landlord.
Nothing herein shall be deemed to limit Landlord's other rights and
remedies hereunder, at law, in equity or otherwise relating to such breach
by Tenant."
7. Commencing January 1, 1996, Subsection 17(c) of the Lease shall be
deleted in its entirety and the following shall be inserted in its place and
stead:
"Tenant shall pay directly to the applicable utility providers, for
and under Tenant's own account, all costs for electricity, water, gas and
other utilities consumed by Tenant; standby sprinkler charges; the cost of
any and all repairs to the sprinkler system; and costs for the removal of
Tenant's trash notless than three (3) times per week (or, if
3
<PAGE>
Tenant compacts its trash, one (1) time per week). In the event Tenant
fails or refuses to contract for such regular removal of trash and the
trash is removed, then Landlord may, but shall not be obligated to,
arrange for trash removal service on Tenant's behalf and at Tenant's cost,
which shall be deemed Additional Rent, in addition to Landlord's other
rights and remedies hereunder, at law, in equity or otherwise relating to
such failure or refusal by Tenant."
8. The second paragraph of Section 29 is hereby amended in the fifth line
thereof, to add the phrase ", lease, possession and occupancy of the Premises"
after the word "tenancy".
9. Landlord and Tenant each hereby acknowledges, confirms and agrees, as
of the date hereof, that: (i) the Premises have been accepted by each party as
being in full compliance with all of the terms and conditions of the Lease; (ii)
each party has completed the alterations to the Premises and the Center as
required by the terms of the Lease to the complete satisfaction of the other
party; (iii) the Lease is in full force and effect and is a binding obligation
of Landlord and Tenant; (iv) to the actual knowledge of each party, there are no
existing or claimed defaults on the part of the other party; (v) there are no
existing or claimed conditions that, with the passage of time or notice, would
constitute a default on the part of the other party; and (vi) the Lease has not
been amended, modified or supplemented, except for this First Amendment.
10. Landlord and Tenant do hereby agree that they release and forever
remiss any claims relating to Basic Rent, Additional Rent (including Operating
Costs and real estate taxes), or construction costs that it may have against the
other for any period prior to the date hereof.
11. Landlord and Tenant do hereby indemnify and agree to hold the other
harmless for claims made by any workmen, suppliers, or contractors for
alterations and/or improvements at the Premises. It is the intent of Landlord
and Tenant that each
4
<PAGE>
shall be responsible for payment to any contractors, workmen and suppliers which
it engaged to perform alterations and improvements at the Premises.
12. Landlord and Tenant agree that this First Amendment has been fully and
completely negotiated by the parties, each of whom has been represented by legal
counsel. Landlord and Tenant further agree that in the event of a dispute in
respect of all or any part of this First Amendment or the Lease, no inference
shall be drawn against Landlord by virtue of Landlord's having drawn such
documents, regardless of any ambiguity or the susceptibility of any provision to
dual interpretation.
13. Terms not otherwise defined herein shall have the same meaning as set
forth in the Lease. In the event of a conflict between the terms of the Lease
and the terms of this First Amendment, the latter shall prevail and govern the
resolution of such conflict.
14. The provisions of this First Amendment, or any of same, shall not
become effective unless and until this First Amendment is fully-executed and
delivered by the parties hereto, whereupon the Lease shall remain in full force
and effect, as modified by this First Amendment, and whereupon the Lease and
this First Amendment shall collectively be referred to as the "Lease".
15. Tenant covenants and agrees to keep the terms and conditions of this
First Amendment absolutely confidential, and Tenant hereby agrees to indemnify
and hold harmless Landlord against any loss, cost, damage or expense that
Landlord may incur as a result of the violation by Tenant of its covenant and
agreement in this Paragraph 15.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
to Lease as of the day and year first above written.
WITNESS: LESTER M. ENTIN ASSOCIATES, Landlord
By: /s/ Joseph Waters
- --------------------------- -------------------------------
Joseph Waters, Partner
5
<PAGE>
ATTEST: CJM ENTERPRISES, INC., Tenant
By: /s/Jesse Sayegh
- -------------------------- ------------------------------
Name:
Title: President
6
Exhibit 10.05
ASSIGNMENT, ASSUMPTION, CONSENT TO ASSIGNMENT
AND AMENDMENT OF LEASE
This Assignment, Assumption of Assignment and Consent to Assignment
of Lease is made this 12th day of December, 1997 between JESSE SAYEGH, and
individual residing at 25 Kinnelon Road, Kinnelon, New Jersey 07405 (hereinafter
referred to as the "Assignor"), and CCC MIDDLEBROOK CINEMA CORP., a Delaware
corporation organized and existing under the laws of Delaware, authorized to do
business in New Jersey, whose principal office is located at 7 Waverly Place,
Madison, New Jersey 07940 (hereinafter collectively referred to as the
"Assignee"), Clearview Cinema Group, Inc., a Delaware corporation with offices
at 7 Waverly Place, Madison, New Jersey (hereinafter referred to as
"Guarantor"), Westwood Oaks Inc., hereinafter referred to as the ("Landlord")
and Westwood Oaks Associates, a New Jersey partnership (hereinafter referred to
as "Fee Owner").
WITNESSETH:
WHEREAS, Assignor entered into a Lease with WESTWOOD OAKS, INC.,
dated September 28, 1993, together with Rider to Lease, a true copy is annexed
hereto (hereinafter, collectively, referred to as "Lease Agreement"); and
WHEREAS, the Assignor wishes to assign to Assignee all of its right,
title and interest under and pursuant to the Lease Agreement; and
WHEREAS, the Assignee wishes to accept this Assignment of Lease as
of December 12, 1997, and agrees to assume, perform and
<PAGE>
abide by all of the terms, provisions and obligations of Assignor under the
Lease Agreement; and
WHEREAS, WESTWOOD OAKS, INC., as Landlord and Westwood Oaks
Associates as Fee Owner, hereby consent to assignment of the Lease Agreement to
the Assignee on the terms and conditions hereinafter set forth;
WHEREAS, the Tenant, the Assignee, the Guarantor, the Landlord, and
the Fee Owner, wish to amend the Lease as set forth herein;
NOW, THEREFORE, in consideration of the foregoing and intending to
be legally bound hereby, the Assignor and Assignee hereby agree as follows:
1. Assignor hereby assign all of its right, title and interest under
and pursuant to the Lease Agreement from and after December 12, 1997 to
Assignee, and its respective successors and/or assigns.
2. Assignee hereby accepts this Assignment of Lease, and agrees from
and after December 12, 1997 to assume, perform and abide by all of the terms,
provisions and obligations of the Assignor under the Lease Agreement.
3. Notwithstanding anything in this Assignment and Assumption of
Assignment of Lease that may be to the contrary, Assignor expressly agrees that
nothing herein shall relieve the Assignor from any liability under and pursuant
to the Lease Agreement.
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<PAGE>
4. Thus Assignment and Assumption of Assignment of Lease shall be
binding upon the parties hereto and their respective heirs, successors and
assigns.
5. This Assignment and Assumption of Assignment of Lease shall not
be modified or amended without the without the written consent of the parties
hereto and the Landlord.
6. By its signature below, Clearview Cinema Group, Inc., a Delaware
corporation and the parent of the assignee ("Clearview"), for valuable
consideration and in order to induce the Landlord to execute the consent, hereby
guarantees the payment of rent and the performance of all tenant obligations set
forth in the aforesaid Lease Agreement.
7. Any further assignment shall require the consent of Landlord.
8. Article Default Provisions of the Lease is hereby amended by
adding the following language at the end of Section 20.1;
"In the event the Assignee ceases or fails to operate the movie
theater for more than three consecutive months (not less than ninety
(90) days for any reason within the control of the Assignee such
cessation of operations shall be considered an additional element of
default, entitling Landlord to the immediate recapture of the
Premises, at Landlord's option, to other remedies at law or in
equity as provided by the Lease Agreement. Excluded from such
default shall be those events beyond the control of the Assignee
including, but not limited to an act of God, a natural disaster, a
fire not the Assignees fault, or the like. Also excluded from this
3
<PAGE>
"go dark" default provision is any shut down of the theater approved
by the Landlord or Fee Owner including but not limited to making
repairs, construction, reconstruction, rebuilding, refurbishing,
expanding, alterations or any closing or shut down caused by the
Landlord or Fee Owner or their respective agents, servants or
employees.
9. As an additional inducement to obtain the consent of the Landlord
and the Fee Owner to the proposed Assignment, the Assignor will post the sum of
FORTY THREE THOUSAND NINE HUNDRED SEVENTY SEVEN DOLLARS AND 00/100 ($43,977.00)
being two months rent to be held as additional security for the full and
faithful performance of tenants obligations under the Lease by the Assignee.
This security will be held by the Landlord. Notwithstanding the fact that the
personal liability of Jesse Y. Sayegh under the Lease will expire October 1,
1999, Sayegh hereby agrees that the Landlord can continue to hold this
additional security for a period of five (5) years from the date of the
Assignment to CCC Middlebrook Cinema Corp. at which time the entire principal
amount, without interest, will then be returned to Jesse Y. Sayegh. The
provisions of this additional security deposit are in addition to the one months
rent presently being held as security in accord with Section 3.3 of the Lease,
without interest, and the provisions of the Lease respecting the same shall not
be effected
4
<PAGE>
by Jesse Y. Sayegh's undertaking as stated herein except to confirm that any use
or application of any security deposit held by Landlord will first exhaust the
fund held under Section 3.3 of the Lease which is being assigned by the Assignor
and become the property of the Assignee, before the Landlord uses or applies the
additional security deposit posted with the execution of this Assignment,
Assumption, Consent and Amendment to the Lease.
10. Upon execution hereof, Landlord's attorney shall receive
reimbursement of all of its costs and expenses in reviewing this Assignment and
all other documents related to the Assignment of the Lease Agreement in the
amount of $2,500.00.
11. Landlord will use its best efforts to notify Provident Bank,
agent, Cincinnati, Ohio, of any default under the Lease Agreement.
[Remainder of page intentionally left blank.
Signature pages follow]
5
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IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands as of the date and year hereinabove first written.
ATTEST: JESSE SAYEGH, Assignor
By: /s/ Jesse Y. Sayegh
- ------------------------ ---------------------------
JESSE SAYEGH
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
On this 12th day of December in the year 1997, before me personally came
Jesse Sayegh who, I am satisfied, signed, sealed and delivered the same as his
act and deed for the purposes therein expressed.
/s/ Deborah York Sheriden
----------------------------
Notary Public
6
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ATTEST: CCC Middlebrook Cinema Corp.
Assignee
/s/ Herbert L. Klein By: /s/ A. Dale Mayo
- ------------------------ -------------------------
Asst. Secretary A. Dale Mayo, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I CERTIFY that on December 12, 1997 A. Dale Mayo personally came before me
and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as
President of CCC Middlebrook Cinema Corp. the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from CCC Middlebrook Cinema Corp.
/s/ Deborah York Sheridan
----------------------------
Notary Public
7
<PAGE>
ATTEST: Clearview Cinema Group, Inc.,
Guarantor
/s/ Herbert L. Klein By: /s/ A. Dale Mayo
- ------------------------ -------------------------
Asst. Secretary A. Dale Mayo, President
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I CERTIFY that on December 12, 1997 A. Dale Mayo personally came before me
and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as
President of Clearview Cinema Group, Inc. the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from Clearview Cinema Group.
/s/ Deborah York Sheridan
-----------------------------
Notary Public
8
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CONSENT TO ASSIGNMENT AND AMENDMENT
Westwood Oaks, Inc. and Westwood Oaks Associates hereby consent
to the assignment of the Lease Agreement to the above-named Assignee on the
express condition that the Assignor shall remain liable for the prompt
payment of the rent and the performance of all obligations and covenants
provided in the Lease Agreement, that Clearview Cinema Group, Inc. guarantee
the payment of rents in accord with paragraph #6 of the Assignment,
Assumption, Consent to Agreement and Amendment to Lease to which this Consent
is attached, and that no further assignment or sub-lease of any part of the
demised premises shall be made without the prior written consent of the
undersigned Landlord.
WITNESS: Landlord: Westwood Oaks Inc.
/s/ Elizabeth D. Kass By: /s/ Leonard A. Wilf
- ------------------------ ---------------------------
Leonard A. Wilf, President
STATE OF NEW JERSEY )
)
COUNTY OF ESSEX )
I CERTIFY that on December 11, 1997 Leonard A. Wilf personally came before
me and this person acknowledged under oath to my satisfaction, that;
(a) this person signed and delivered the attached document as the act of
Westwood Oaks Inc., the company named in this document;
(b) this document was signed and made by the company as its voluntary act
and deed by virtue of authority from Westwood Oaks Inc.
/s/ Carl D. Silverman
-----------------------------------
Carl D. Silverman, an Attorney at
Law of the State of New Jersey
9
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WITNESS: Fee Owner: Westwood Oaks Associates
a New Jersey Partnership
/s/ Elizabeth D. Kass By: /s/ Leonard A. Wilf
- ------------------------ -------------------------
Leonard A. Wilf, Partner
STATE OF NEW JERSEY )
) SS:
COUNTY OF ESSEX )
On this 11th day of December, 1997, before me, the subscriber, personally
appeared Leonard A. Wilf, partner of Westwood Oaks Associates, a New Jersey
Partnership, who I am satisfied is the person named in and who executed the
within instrument and thereupon acknowledged that he signed, sealed and
delivered the same as his act and deed for the purposes therein expressed.
/s/ Carl D. Silverman
-----------------------------------
Carl D. Silverman, an attorney at
Law of the State of New Jersey
10
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L E A S E
This Lease made and entered into as of this 28 day of Sept. 1993,
B E T W E E N : WESTWOOD OAKS, INC.
816 Deal Road at Highway 35
Ocean, New Jersey 07712
(hereinafter referred to as "Landlord")
A N D : JESSE Y. SAYEGH
25 Kinnelon Road Kinnelon, New Jersey 07405 (hereinafter
referred to as "Tenant").
W I T N E S S E T H :
ARTICLE I
PREMISES
SECTION 1.1 Landlord hereby demises and leases to Tenant, and Tenant takes
and hires from Landlord, the premises consisting of the building and
improvements now or hereafter located therein (hereinafter called the "Demised
Premises") together with all easements, appurtenances, rights and privileges now
or hereafter belonging or appurtenant thereto. The Demised Premises contains
approximately 29,318 square feet of ground floor area (measured from and to the
exterior of exterior walls and from and to the center of partition walls). The
precise square footage will be determined by Architect Certification prior to
the delivery date. The Demised Premises are located in a building thereinafter
called the "'Building") in a Shopping Center on land located on Highway 35,
Ocean Township, Monmouth County, New Jersey (the land, the Building and all
other buildings and improvements comprising such Shopping Center being
hereinafter called collectively the "Shopping Center").
SECTION 1.2 Landlord hereby grants to Tenant the right, for itself and its
agents, servants, employees, customers, licensees and invitees, to use, in
common with other tenants of the Shopping Center, the Common Areas as provided
in Article IV of this Lease.
SECTION 1.3 The parties agree that the Demised Premises shall be
constructed and improved in accordance with the provisions of Rider LC annexed
hereto and incorporated herein.
ARTICLE II
TERM AND RENEWALS
SECTION 2.1 The terms of this Lease shall consist of a short term and a
full term. The short term shall commence on the Date of Delivery of Possession
and shall expire at 11:59 p.m. on the day before the Lease Commencement Date as
defined in Station 2.2. The full tern shall commence on the Lease Commencement
Date and shall expire at 11:59 p.m. on the date which is five (5) years after
the day before the Lease Commencement Date, subject to extension pursuant to
Section 2.5. Such expiration date, as and if extended, is sometimes referred to
in this Lease as the "Expiration Date". References herein to the "terms of the
Lease" shall include both the short term and the full term.
SECTION 2.2 The Lease Commencement Date shall be the date (notwithstanding
any earlier possession of the Demised Premises by
<PAGE>
the Tenant for purposes of construction, installation of improvements, fixturing
or preparation) which is the earlier of:
(a) the date which is one hundred and twenty (120) days after the Date of
Delivery of Possession, or when Tenant opens for Business, whichever comes
first, during which period Tenant shall be permitted to enter the Demised
Premises for the purpose of fixturing and stocking and otherwise preparing the
Demised Premises for Tenanted occupancy; or
(b) the date on which Tenant opens to the public for business at the
Demised Premises.
SECTION 2.3 The parties hereto shall, at the request of either of them
after the Lease Commencement Date has occurred, execute an instrument stating
the Lease Commencement Date and the commencement date of each of the Renewal
Periods (as defined in Section 2.5).
SECTION 2.4 The expression "Lease Year" as used in this Lease, shall have
the following meaning. The first Lease Year shall commence upon the Lease
Commencement Date and continue for the fractional month, if any in which the
Lease Commencement Date occurs and for twelve (12) calendar months thereafter.
Each twelve (12) month period after the first Lease Year shall constitute a
Lease Year.
SECTION 2.5 Tenant shall have, and is hereby granted, five (5) successive
separate options to renew and extend the term of this Lease from the date or
dates upon which it would otherwise expire, for five (5) separate successive
renewal periods, which shall be for periods of five (5) years each (each such
period being hereinbefore and hereinafter called a "Renewal Period"). Each such
Renewal Period shall follow consecutively upon the expiration of the initial
term as hereinabove provided or upon the expiration of any prior Renewal Period,
as the case may be, and each such Renewal Period shall, upon commencement
thereof, be deemed included in references to "the term of this Lease" and "the
full term of this Lease". Tenant's said option with respect to each Renewal
Period shall be exercised by Tenant by giving written notice to Landlord of
Tenant's exercise of same not earlier than fifteen (15) months and not later
than twelve (12) months prior to the expiration date of the initial term or the
then current Renewal Period, as the case may be. Time is of the essence with
respect to such notices, and failure of Tenant to give any such notice at least
twelve (12) months prior to the commencement of a Renewal Period shall
constitute a binding and conclusive waiver of Tenant's options with respect to
such Renewal Period and all Renewal periods thereafter. No option shall be
deemed validly exercised unless: (i) the option affecting the preceding Renewal
Period shall have been validly exercised; and (ii) Tenant shall not be in
default at the Lime of the exercise of the renewal option and commencement of
the Renewal Period. If Tenant elects to exercise any one or more of said
options, the full term of this Lease shall be automatically extended for the
Renewal Period or Periods covered by the option or options so exercised without
execution of an extension or renewal lease. Each Renewal Period shall be on all
of the same terms and conditions as are in effect hereunder immediately
preceding the commencement date of such Renewal Period, except that the Basic
Annual Rent during the Renewal Periods shall be as provided in Section 3.1.
Tenant shall have no further right or option to renew after expiration of the
final Renewal Period.
ARTICLE III
ANNUAL RENT
SECTION 3.1 Commencing on the Lease Commencement Date, and during the full
term of this Lease, on the first day of each calendar month, Tenant shall pay to
Landlord basic annual rent ("Basic Annual Rent") as follows:
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(a) During the initial term (as defined in Section 2.1), at the rate per
annum determined by multiplying the floor area (the "Floor Area") of the Demised
Premises (measured as provided in Section 1.1) by nine ($9.00) Dollars per
square foot.
(b) During the first Renewal Period, at the rate per annum determined by
multiplying the said Floor Area by ten ($10.00) Dollars per square foot.
(c) During the second Renewal Period, at the rate per annum determined by
multiplying the said Floor Area by eleven ($11.00) Dollars per square foot.
(d) During the third Renewal Period, at the rate per annum determined by
multiplying the said Floor Area by twelve ($12.00) Dollars per square foot.
(e) During the fourth Renewal Period, at the rate per annum determined by
multiplying the said Floor Area by thirteen ($13.00) Dollars per square foot.
(f) During the fifth Renewal Period, at the rate per annum determined by
multiplying the said Floor Area by fourteen ($14.00) Dollars per square foot.
(g) Notwithstanding anything to the contrary contained herein, in the
event that payment of rent is not received by Landlord within five (5) business
days of the due date, then Tenant shall pay, as additional rent, a sum equal to
five (5) percent of the late payment. Landlord shall be entitled to the same
remedies for non-payment of additional rent as for non-payment of rent.
(h) In the event that the Lease Commencement Date shall fall on a date
other than the first day of a calendar month, then, on the Lease Commencement
Date, Tenant shall pay the pro-rata share of rent for the balance of the month.
SECTION 3.2 Tenant shall pay, as additional rent, a Sun' equal to four
(4%) percent of the net yearly sales in excess of ten (10) times bole then
current rental amount. The Tenant shall provide proof of net yearly sales at the
time that payment is due. Landlord shall be entitled to the same remedies for
non-payment of percentage rent as for non-payment of rent. In no event shall the
percentage rent increase to more than two ($2.00) dollars per square foot.
SECTION 3.2 (a) Except where otherwise stated, it is the intention of the
parties that the Basic Annual Rent payable hereunder shall be net to Landlord so
that Landlord shall have no costs or expenses with respect to the Demised
Premises during the full term of the Lease, so that this Lease shall yield to
Landlord, net, the Basic Annual Rent specified herein during the full term of
this Lease and so that all costs, expenses and obligations of every kind and
nature whatsoever relating to the Demised Premises, as well as Tenant's
proportionate share of Taxes and Common Area Costs (hereinafter defined)
relating to the Shopping Center shall be paid by Tenant commencing on the Lease
Commencement Date.
(b) No abatement, diminution or reduction of the Basic Annual Rent, or any
additional rent or other charges required to be paid by Tenant pursuant to the
terms of this Lease shall be claimed by or allowed to Tenant for any
inconvenience, interruption, or otherwise, caused directly or indirectly by any
present or future laws, ordinances, orders, rules, priorities, rationing or
curtailment of labor or materials, or by war, civil commotion, strikes or riots,
or any other matter or thing resulting therefrom, or by any other cause or
causes beyond the control of Landlord, including, without limitation, casualty
to the Demised Premises, nor shall this lease in any way be affected by any such
causes
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<PAGE>
except as hereinafter expressly provided, subject to tenant's right to subrogate
to landlord's rights.
SECTION 3.3 Upon execution of this Lease, Tenant shall provide Landlord
with a sum equal to one (1) month rent as security for the payment of rent
hereunder and the full and faithful performance by the Tenant of the covenants
and conditions on the part of the Tenant to be performed. Said sum shall be
returned to the Tenant, without interest, after the expiration of the term
hereof, provided that the Tenant has fully and faithfully performed all such
covenants and conditions and is not in arrears in rent. During the term hereof,
the Landlord may, if the Landlord so elects, have recourse to such security, to
make good any default by the Tenant, in which event the Tenant shall, on demand,
promptly restore said security to its original amount. The Landlord shall assign
or transfer said security, for the benefit of the Tenant, to any subsequent
owner or holder of the title to said premises, in which case the assignee shall
become liable for the repayment thereof as herein provided, and the assignor
shall be deemed released by the Tenant from all liability to return such
security. This provision shall be applicable to every alienation or change in
title and shall in no wise be deemed to permit the Landlord to retain the
security after termination of the Landlord's title. The Tenant shall not
mortgage, encumber or assign said security without the written consent of the
Landlord.
ARTICLE IV
COMMON AREAS
SECTION 4.1 (a) The Demised Premises are demised together with the right
for the Tenant, its agents, servants, employees, invitees, licensees and all
persons having business with it or claiming under it, and all persons employed
in or having business with the Demised Premises, in connection with their
business in the Shopping Center and their respective agents, servants,
employees, customers, invitees and licensees, the common areas of the Shopping
Center (hereinafter called the "Common Areas") consisting of: (a) the parking
areas, roadways, driveways, the entrances on foot, and landscaped areas and
malls; and (b) all other areas and facilities now or hereafter at the Shopping
Center and intended for common use.
(b) Except as provided in Section 4.3, and unless required by law,
Landlord shall not make or impose on Tenant or any other occupants of the
Demised Premises, or on any agents, servants, employees, customers, invitees or
licensees of Tenant or such other occupants, or on any persons doing business
with the Demised Premises or the Shopping Center, any fee or charge for the use
of the Common Areas or of any additions to the Common Areas.
(c) Landlord covenants and agrees that throughout the term hereof at its
expense, subject to Section 4.3:
(i) it will keep and maintain in good and usable order and condition,
and make all necessary repairs and replacements to the Common Areas
and any additions thereto, including, without limitation, the paving
of the parking areas (including striping), roadways, walks, and
driveways in the Shopping Center, landscaping and the lighting and
drainage systems of the Shopping Center;
(ii) it will keep all of the Common Areas properly drained and reasonably
free of snow, ice, refuse and obstructions;
(iii) it will keep the parking areas, roadways, walks and driveways within
the Shopping Center lighted during the regular business hours of the
Shopping Center and all the hours when the Demised Premises shall be
open for business, and for a reasonable time thereafter; and
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(iv) it will provide adequate security guards and services for the
Shopping Center as determined to be necessary in Landlord's
reasonable judgment.
SECTION 4.2 The layout of, and striping and lighting in, the portion of
the parking area designated as a "No Change Area" shall not be chanted without
Tenant's consent, which shall not be unreasonably withheld. The "No Change Area"
shall be determined by creating imaginary lines brought forward from the side
walls of the Demised Premises and extended directly in front of the Demised
Premises a distance of one hundred (100) feet. It is understood and agreed that
Landlord may change the number, dimensions and locations of the walks,
buildings, parking areas and other facilities as Landlord shall deem proper or
eliminate or add to buildings.
SECTION 4.3 (a) Tenant agrees that for each year of the initial term and
any renewal terms of this Lease, Tenant shall reimburse to Landlord Tenant's
proportionate share of Common Area Costs as hereinafter defined: Tenant's
proportionate share shall be equal to a fraction, the numerator of which shall
be the ground floor area of the Demised Premises, and the denominator of which
shall be the total gross leasable ground floor area of all buildings in the
Shopping Center. The said fraction shall be determined as of the commencement of
each lease year during the term hereof, and shall be modified from time to time
during a lease year in the event of a change in the floor area includible in the
numerator or denominator. The term "Common Area Costs" shall, except as provided
in Paragraph (b) of this Section, mean: (i) the total annual costs and expenses
incurred by Landlord in operating and maintaining the Common Areas, including,
but not limited to: costs of gardening and landscaping; costs of insurance
premiums, including, but not limited to, general comprehensive liability
insurance (including, without limitation, umbrella coverage), automobile
insurance, fire and casualty insurance, rent insurance, sign insurance and any
other insurance carried by Landlord with respect to the Common Areas or Shopping
Center; costs of repair, painting, maintenance, resurfacing and restriping of
the parking area; costs of repair, painting, maintenance and replacement and
rental of signs and sign equipment; costs of repair, painting, maintenance and
replacement of all walls, roofs, ceilings and plate glass doors and windows, if
any, which are not part of the demised premises of any other tenant at the
Shopping Center; costs of replacement of equipment servicing the Common Areas;
costs of repair, maintenance and replacement of lighting (including traffic
lights, if any) and sanitary control facilities; costs of removal or relocation
of snow, ice, trash, rubbish, garbage and other refuse, costs of utilities, such
as, electricity an eater for the Common Areas only; depreciation of the capital
cost of any machinery, equipment (including on-site sewerage facilities and
lighting, but excluding any of said items whose acquisition cost was included by
Landlord in Common Area Costs billed to Tenant) and vehicles used solely in
connection with the operation and maintenance of the Common Areas, such
depreciation to be determined by using the straight-line method of depreciation
and the normal useful lives of the machinery and equipment in question,
provided, however, that any sales proceeds from the sale of such machinery
and/or equipment shall be applied to reduce Common Area Costs); costs of repair,
maintenance and replacement of on-site sewerage facilities, utility lines,
sanitary and storm sewer lines and culverts and drainage facilities; costs of
sanitary sewer hook-up; (ii) costs of performing Landlord's obligations herein;
security costs and costs of traffic control and policing; the cost of personnel,
including management services engaged to manage the Shopping Center, but
excluding any such services to the extent applicable to other premises owned or
operated by Landlord; costs of holiday and other decorations; plus (iii) costs
of performing repairs and replacements to the roofs and structures of all
buildings included in the Shopping Center; plus (iv) fifteen (15) percent of the
foregoing as overhead expenses. Common Area Costs
5
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shall also include any amounts specifically designated for inclusion therein
elsewhere in this Lease. Notwithstanding the foregoing provisions hereof,
Landlord shall have the right, at its option, to bill Tenant annually for costs
of insurance premiums, in which event there shall be excluded from the monthly
payments to be paid by Tenant as aforesaid, any amount allocable or attributable
to such insurance premium costs, and Tenant shall pay the amount due within ten
(10) days after billing.
(b) Notwithstanding the provisions of Paragraph (a) of this Section 4.3:
(i) In the event that more than an aggregate of one-third (1/3) of
the parking area included in the Common Areas shall be resurfaced
in any lease year, the cost of resurfacing in excess of one-third
(1/3) of the said parking area shall, for purposes of determining
Common Area Costs, be deemed amortized on a straight-line basis,
over a period of ten (10) years, and only the amount of such cost
so allocated to each lease year remaining in the term of this
lease during such ten (10) year amortization period shall be
included in Common Area Costs;
(ii) In the event of any resurfacing (as opposed to repairs) of the
roof of Demised Premises, the Building or any other building at
the Shopping Center, which resurfacing occurs during the initial
term of this Lease, all costs in connection therewith shall be
excluded from Common Area Costs. If however, there shall be any
such roof resurfacing after the expiration of the initial term,
and Tenant chooses to extend the term of this Lease, the cost of
such resurfacing shall, for purposes of determining Common Area
Costs, be deemed amortized on a straight-line basis over a period
of ten (10) years, and only the amount of such cost so allocated
to each lease year remaining n the term of this Lease during such
ten (10) year amortization period shall be included in Common
Area Costs.
(iii) Any expenditures by Landlord for replacement of equipment servicing
the Common Areas shall, for purposes of determining Common Area
Costs, be deemed amortized n a straight-line basis over the normal
useful life of such equipment, and only the amount of such
expenditures so allocated to each lease year remaining in the term
of this Lease during such useful life shall be included in Common
Area Costs;
(iv) Any costs incurred by Landlord in connection with the replacement
of supports or stanchions for lighting or traffic lights, or the
replacement of sewerage facilities, utility lines, sanitary and
storm sewer lines and culverts and drainage facilities shall, for
purposes of determining Common Area Costs be deemed amortized on
a straight-line basis over a ten (10) year period, and only the
amount of such costs so allocated to each lease year remaining in
the term of this Lease during such ten (10) year amortization
period shall be included in Common Area Costs.
If, notwithstanding the allocation of certain Common Area Costs, pursuant to
this Paragraph, Landlord shall have paid such Costs on a more accelerated basis
than is provided in this Paragraph, there shall be included in Common Area Costs
interest at the Lease Interest Rate on the declining principal balance of the
amount so expended by Landlord, from the date of such expenditure by Landlord.
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(c) Tenant shall pay its proportionate share of Common Area Costs in equal
monthly installments of the first day of each month during the term of this
Lease, together with payments of Basic Annual Rent. The amount of each monthly
installment shall be equal to one-twelfth (1/12th) of the Common Area Costs
incurred by Landlord during the preceding calendar year, plus an annual increase
therein. It is agreed that the monthly payment to be made by Tenant during the
first Lease Year of the term hereof shall be in the sum of $1,860.00 per month.
There will be a five (5%) percent cap, on CAM charges annual increase after
first year, exclusive of insurance payments. Within sixty (60) days after the
expiration of each Lease year, or (at Landlord's election) calendar year,
Landlord shall deliver to Tenant a bill showing the actual Common Area Costs
incurred and paid by Landlord during the preceding Lease year or calendar year.
If the bill furnished by Landlord discloses that the Proportionate Share of
Common Area charges paid by Tenant for such Lease Year or calendar year is less
than Tenant's Proportionate Share of actual Common Area Costs for such Lease
Year or calendar year, Tenant shall pay the difference on the first day of the
month next following the date that Landlord shall deliver to Tenant the bill
showing such actual Common Area Costs and Tenant's Proportionate Share thereof,
and, thereafter, until the expiration of the then current Lease Year or calendar
year, Tenant's monthly payments for Common Area Costs shall be equal to
one-twelfth (1/12th) of the amount set forth in the said bill from Landlord. If
the bill from Landlord shall disclose that Tenant's Proportionate Share of
Common Area Costs is greater than Tenant's Proportionate Share of actual Common
Area Costs for such Lease Year or calendar year, the excess shall immediately be
credited against Tenant's Proportionate Share of Common Area Costs in the next
succeeding months of the then current Lease Year or calendar year until such
credit is exhausted; provided, however, that with respect to the last Lease year
of the term of this Lease, Landlord shall promptly refund any excess payment
made by Tenant as soon as same is determined. The bill to be submitted by
Landlord to Tenant shall be a detailed statement showing the computation upon
which Tenant's Proportionate Share of Common Area Costs is based. Tenant shall
have the right, within twelve (12) months after the expiration of each Lease
year or calendar year to audit all of Landlord's records with respect to said
costs for such Lease year or calendar year, which records shall consist of
reasonable and accurate evidence of said costs, and shall be made available for
such audit at the address to which payments of Basic Annual Rent are sent.
Tenant's obligation to pay its Proportionate Share of Common Area Costs shall
survive the Expiration Date.
ARTICLE V
REAL ESTATE TAXES
SECTION 5.1 (a) For each Lease Year during the full term of this Lease,
Tenant shall pay Tenant's Proportionate Share of Taxes. "Taxes" shall be deemed
to mean all Municipal, County, and School taxes, and any and all other real
estate taxes, assessments and other governmental levies and charges, general and
special, ordinary and extraordinary, unforeseen as well as foreseen of any kind
and nature whatsoever, which are assessed, levied, confirmed, imposed or become
due and payable out of or for, or become a lien upon, the Shopping Center, or
any part thereof, during the term of this Lease, and also interest on
installment payments and all costs and fees (including reasonable attorneys'
fees) incurred by Landlord in contesting tax assessments and/or negotiating with
the public authorities as to the same. If at any time during the term of this
Lease, under the laws of the State or any political subdivision thereof in which
the Demised Premises are situated, a tax or excise on, or measured in whole or
in part by, rents or gross receipts or other tax, however characterized, is
levied or assessed by said State or political subdivision against the Landlord
or the Basic Annual Rent or additional rent expressly reserved hereunder, in
addition to or as a substitute in whole or
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in part for taxes assessed or imposed by said State or political subdivision on
land and/or buildings, the Tenant covenants to pay such tax or excise n rents or
gross receipts or other tax but only to the extent of the amount thereof which
is lawfully assessed or imposed upon Landlord and which was so assessed or
imposed as a direct result of Landlord's ownership of the Demised Premises, or
of this Lease or of the rentals accruing under this Lease. Any such additional
or substitute tax shall, for purposes of this Section 5.1, be calculated and
determined as if the Shopping Center were the only property owned or leased by
Landlord and as if the rents or gross receipts therefrom were Landlord's only
income. The current real estate taxes are approximately $1.12 per square foot,
subject to change.
Income taxes, net or gross, are not intended to be passed through to the Tenant.
(b) Tenant's Proportionate Share of Taxes shall be a fraction the
numerator of which shall be the ground floor area of the Demised Premises and
the denominator of which shall be the total gross leasable ground floor area of
all buildings in the Shopping Center. The floor area of the Demised Premises and
the Shopping Center shall be determined as of the date upon which value is to be
determined, under applicable statutes, ordinances, rules or regulations, for
purposes of assessing, levying or imposing the Taxes.
SECTION 5.2 (a) Within fifteen (15) days after the Lease Commencement
Date, Tenant shall pay to Landlord Tenant's Proportionate Share of the Taxes
theretofore prepaid, or then currently payable, by Landlord for the period
commencing on the Lease Commencement Date and continuing to and including the
day preceding the due date of the next ensuing payment of Taxes. On the next
ensuing due date for the payment of Taxes, the Tenant will pay to Landlord,
Tenant's Proportionate Share of the installment then due. Contemporaneously,
with the payment of such installment, the 1/12 monthly installments of Taxes
pursuant to Paragraph (b) of this Section shall commence and thereafter Tenant's
payments of Taxes shall be made in accordance with such Paragraph (b).
(b) Tenant shall pay its Proportionate Share of Taxes in monthly
installments on the first day of each month during the term hereof, together
with payments of Basic Annual Rent. Each such monthly installment shall be equal
to one-twelfth (1/12th) of Tenant's Proportionate Share of Taxes based upon the
most current bill for taxes then available to Landlord. Upon the receipt and
effective date of each new bill for Taxes, Tenant's said monthly payment of its
Proportionate Share of Taxes shall be appropriately adjusted. Within thirty (30)
days after the end of each Lease Year or (at Landlord's election) each calendar
year expiring during a Lease Year during the full terms of this Lease, Landlord
shall submit to Tenant the originals or photocopies of the receipted bills for
Taxes due such Lease Year or calendar year, together with a written statement
setting forth how Tenant's Proportionate Share was determined. If such bills
shall disclose that the monthly payments made by Tenant were, in the aggregate,
less than Tenant's Proportionate Share of Taxes for the period in question,
Tenant shall, together with payment of the next month's Basic Annual Rent, remit
to Landlord the excess amount due. If such bills should disclose that Tenant's
monthly payments were, in the aggregate, in excess of its Proportionate Share of
Taxes for the period in question, the amount of the excess shall be credited
against monthly payments of Tenant's Proportionate Share of Taxes thereafter
accruing until the amount of the credit has been exhausted, except that, with
respect to the final Lease Year of the term hereof, the amount of such excess
shall be promptly refunded by Landlord to Tenant upon determination of the
amount thereof. Tenant's obligation to pay its Proportionate Share of Taxes
shall survive the Expiration Date.
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SECTION 5.3 Nothing herein contained shall be construed to impose upon
Tenant an obligation to pay all or any part of any franchise, estate, transfer,
inheritance, succession or excess profits tax assessed against or imposed upon
Landlord or any partner or principal of Landlord, and nothing herein contained
shall be construed to impose upon Tenant an obligation to pay any part of any
other tax, assessment or charge assessed against Landlord or the Shopping
Center, its lands or upon the Demised Premises, except of the kind specified in
this Article. As well, nothing herein contained shall impose upon the Landlord
an obligation to pay any part of any tax, assessment or charge assessed against
and which is personal to the Tenant with respect to the operation of its
business in the Demised Premises.
SECTION 5.4 (a) Notwithstanding any other provision of this Article, if
there shall be levied, assessed or imposed upon Landlord, the Shopping Center or
the Demised Premises an assessment for public improvements or installations made
at governmental expense, Tenant's obligations with respect thereto shall be as
follows:
(i) Subject to (ii) and (iii) below, if such assessment is payable in
installments and if Tenant's Proportionate Share (determined
under Section 5.1 (b) of the full amount of such assessment
exceeds $10,000.00, Landlord shall be deemed to have elected to
pay such assessment in the maximum number of installments then
permitted by law (whether or not Landlord actually so elects),
and Tenant shall pay its said Proportionate Share of either the
installments payable during the term of this Lease if Landlord
elects to pay in installments or the installments which would
have been payable during the term of this Lease if Landlord has
so elected;
(ii) Subject to (iii) below, if such assessment is not, under then
applicable laws, payable in installments, or if the maximum
number of installments permitted by law shall be greater than ten
(10) annual installments, and if Tenant's said Proportionate
Share of the full amount of such assessment exceeds $10,000.00,
then Tenant shall be obligated to pay a portion of the assessment
equal to the product of Tenant's said Proportionate Share of the
full amount of the assessment multiplied by a fraction, the
denominator of which shall be ten (10) years and the numerator of
which shall be the lesser of: (1) ten (10) years, and (2) the
number of Lease Years remaining between the date the improvement
or installation work is completed and the Expiration Date;
(iii) If Tenant's said Proportionate Share of the full amount of the
assessment is $10,000.00 or less, Tenant shall pay such amount in
one payment.
(b) Landlord shall, promptly after receipt by it, deliver to Tenant copies
of all bills for assessments. Payments by Tenants pursuant to Paragraph (a)
hereof shall be made as follows:
(i) Payments under Paragraphs (a) (i) and (a) (ii) shall be made not
later than ten (10) days prior to the due date for payment of each
installment by Landlord; and
(ii) The amount payable under Paragraph (a) (iii) shall be paid not later
than ten (10) days prior to the due date for payment by Landlord of
the full assessment or the first installment thereof.
SECTION 5.5 (a) Tenant shall have the right to contest, at its own
expense, the validity or amount of any assessment of Taxes as defined in Section
5.1. Any proceeding which may be instituted shall be prosecuted with due
diligence and dispatch at Tenant's
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sole cost and expense. Payment of the Taxes being contested shall not be
deferred or omitted during the pending of such contest. Tenant shall indemnify
Landlord, and save Landlord harmless, from any and all liability, claim, cost or
expense, in connection with any such contest, including, but not limited to, any
increase in Taxes resulting from or arising out of such contest.
(b) If Landlord, Tenant or any other tenant at the Shopping Center shall
obtain a remission or refund of all or any part of the Taxes with respect to
which Tenant has paid its Proportionate Share pursuant to Section 5.1 or Section
5.4, Landlord shall promptly remit to Tenant Tenant's Proportionate Share of the
remission or refund, such Proportionate Share to be calculated after deduction
of actual reasonable costs and expenses incurred in obtaining such reemission or
refund.
SECTION 5.6 Tenant shall not be obligated or required to pay any part of
any Taxes or assessments levied, imposed or allocable to any period prior to the
Lease Commencement Date or subsequent to the Expiration Date. If, prior to the
expiration or to other termination of this Lease for reasons other than Tenant's
default, Tenant shall have made any payment pursuant to this Article and a
portion of such payment is allocable to a period of time subsequent to such
expiration or other termination, Landlord shall promptly refund to Tenant the
portion of such payment that is allocable to such period of time, it being
intend that in the event such expiration or other termination occurs in the
midst of a tax period, Tenant's responsibility of its Proportionate Share of
Taxes shall be prorated based upon the number of days of said tax period that
shall have elapsed up to the date of such expiration or other termination.
ARTICLE VI
SECTION 6.1 Landlord shall, at its expense, make available to the Demised
Premises all facilities (including pipes, conduits and cables ready for hookup)
for water, gas, electricity, sewerage and other utility for use in the Demised
Premises in accordance with the Plans. Tenant shall, at its expense install
separate meters for such utility services and arrange with the public utility
companies servicing the Shopping Center for providing services. Tenant shall pay
directly to the utility company or governmental agency or authority, and the
case may be, for water, gas, electricity and other public utilities supplied or
furnished to the Demised Premises from and after the Date of Delivery of
Possession and during the term of this Lease. Notwithstanding the foregoing, if
Tenant cannot obtain a separate water meter for the Demised Premises, Tenant
shall pay its equitable share of water charges (and sewer charges if based upon
water usage), such equitable share to be determined accordance with the relative
usage of water (and sewer) in the Demised Premises as compared with such usage
in other leased premises in the Shopping Center included on the same meter as
Demised Premises. The following Section is subject to Rider LC, attached hereto.
ARTICLE VII
LANDLORDS INSURANCE AND INDEMNITY
SECTION 7.1 During the term of this Lease Landlord shall maintain a policy
of general liability insurance with respect to injuries to property or person,
including death, sustained by any person or persons while within the Common
Areas, in a policy or policies in the amount of not less than $2,000,000.00 with
respect to injury or death to any one person or in any one accident or
occurrence, and in the amount of not less than replacement value with respect to
damage to property.
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SECTION 7.2 (a) From and after the Date of Delivery of Possession and
until the expiration or termination of the term of the lease, Landlord shall
keep the Shopping Center, including the Demised Premises, insured against damage
or destruction by fire or other casualties under standing extended coverage
endorsement as from time to time in effect, and against damage caused by
vandalism and malicious mischief. Said insurance shall be in amount at least
equal to the full replacement cost new, from time to time during the term of
this Lease, of the building and improvements in the Shopping Center.
(b) In addition to the insurance described in Section 7.1 and in Paragraph
(a) of this Section 7.2, Landlord may, at its option, obtain boiler and pressure
vessel insurance in such amount as Landlord may determine, sprinkler leakage and
sprinkler liability insurance, and such other insurance as Landlord may from
time to time determine is necessary with respect to the Shopping Center. The
premium cost for such insurance shall be included in Common Area Costs pursuant
to Section 4.3 of this Lease.
SECTION 7.3 Copies of Certificates evidencing the existence of the
foregoing insurance, shall be promptly delivered to Tenant upon Tenant's request
therefor. All such policies shall be issued by reputable and responsible
insurance companies authorized to do business in New Jersey.
SECTION 7.4 Tenant shall pay, as part of Common Area Costs, Tenant's share
of the premiums for the insurance provided by Landlord under Section 7.1 hereof.
If, however, as a result of the business or method or operation of Tenant, a
risk rating is ascribed to the Demised Premises or to the Shopping Center by
Landlord's insurers higher than the rating which would otherwise be applicable
to the Demised Premises or Shopping Center, Tenant shall pay all increased
premiums payable by Landlord as a result of such higher risk rating. Landlord
shall submit to Tenant the originals or photocopies of the insurance bills for
each premium for the aforesaid insurance.
ARTICLE VIII
INDEMNIFICATION BY TENANT
AND TENANT'S INSURANCE
SECTION 8.1 (a) Tenant shall indemnify and save harmless Landlord from and
against any and all liability, claim, cost, expense, damage, penalties or
judgments, and attorneys fees and other expenses incident to litigation, arising
from: (i) any breach, non-performance or violation by the tenant, or Tenant's
agents, employees, contractors, licensees or invitees of any covenant or
provision of this lease; or (ii) injury to person or property sustained on or
about the Demised Premises or Shopping Center resulting from any act or acts or
omission or omissions or the carelessness, negligence or improper conduct of
Tenant or Tenant's agents, employees, licensees, contractors, or invitees; or
(iii) any occurrence in , upon, at or from the Demised Premises, or occupancy,
condition or use of the Demised Premises. Tenant shall, at its own cost and
expense, defend (using counsel reasonably satisfactory to Landlord) any and all
suits or actions (just or unjust) which may be brought against Landlord or in
which Landlord may be impleaded with others upon any such above-mentioned
matter.
(b) Tenant further covenants and agrees to pay, and to indemnify Landlord
against, all costs, expenses and charges, including, but not limited to,
attorneys' fees and other expenses incident to litigation, incurred in obtaining
possession of the Demised Premises after default by Tenant or upon the
expiration or earlier termination of the term hereof, or in enforcing any
covenant or agreement of Tenant herein contained.
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SECTION 8.2 During the term of this Lease, Tenant shall maintain and pay
the premium for public liability insurance in standard form protecting the
Tenant and Landlord against any damage to property and injury or death to person
or persons arising or resulting from accident in or about the Demised Premises.
Said policy shall be in the amount of not less than $1,000,000.00 for the
initial term of this Lease and not less than $2,000,000.00 for the Renewal
terms, with respect to injury or death to any one person and with respect to any
one accident or occurrence, and not less than replacement value with respect to
damage to property.
SECTION 8.3 In addition to the insurance required under Section 8.2
hereof, Tenant shall, throughout the terms of this Lease, maintain in full force
and effect , the following policies of insurance: (a) insurance covering its
trade fixture, furniture, equipment, inventory and leasehold improvements
against lost or damage by fire, and such casualties as are from time to time
normally carried by standard extended coverage insurance in the amount of the
full replacement costs from time to time thereof; (b) a policy of business
interruption insurance sufficient to provide payment of Basic Annual Rent and
additional rent pursuant to this Lease; and (c) such other insurance coverage as
Landlord may from time to time reasonably require which requirement shall b in
accordance with insurance coverage from time to time generally provided by
tenants occupying premises similar to the Demised Premises.
SECTION 8.4 All policies of insurance required to be provided by Tenant
hereunder shall be issued by insurance companies of recognized responsibility
duly licensed and authorized to transact business in the State of New Jersey.
Tenant may provide any such insurance under blanket policies provided the
coverage and protection to Landlord shall not be reduced as a result thereof
Tenant agrees to deliver to Landlord, prior to the Date of Delivery of
Possession and thereafter not later than ten days prior to the expiration of any
such policy, certificates evidencing such insurance together with proof to
payment of the initial or renewal premiums therefore. Certificates for blanket
insurance shall specify the Demised Premises as an insured location. Tenant's
said insurance shall be non-cancelable without thirty (30) days prior written
notice to Landlord. All policies of insurance shall provide that any loss
payable shall be payable notwithstanding any act or negligence of Tenant or
Landlord.
ARTICLE IX
WAIVER OF SUBROGATION
SECTION 9.1 Each of the parties hereto hereby waives and releases any and
all rights of action against the other which may hereafter arise for damage to
or destruction of the Shopping Center, to or of the Demised Premises or to or of
property in and contents of the Demised Premises, resulting from fire or other
casualties of the kind covered by standard fire insurance policies with standard
extended coverage, irrespective of the cause thereof and regardless of whether
or not, or in what amounts, such insurance is now or hereafter carried by the
parties hereto or either of them. Each policy of such insurance maintained by
Landlord or Tenant shall contain a waiver of subrogation in favor of the other,
so long as such waiver is obtainable. If any premium or other cost shall be
charged for such waiver of subrogation, the party to be benefited hereby shall
pay such premium or be deemed to have waived the obligation of the other party
to obtain such waiver of subrogation.
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ARTICLE X
USE OF DEMISED PREMISES
SECTION 10.1 (a) Tenant's primary use of the Demised Premises shall be for
the operation of a cinema multiplex movie theatre ("Primary Use") and for any
other lawful retail use provided that such other retain use does not conflict or
compete with the Primary use from time to time of any other tenant in the
Shopping Center. In no event, however, may the Demised Premises be used in whole
or in part for any of the following: offices (other than as reasonably required
in connection with the retain use of the Demised Premises); "adult" pornography
theater; bar; restaurant; cafeteria; night club; skating rink; massage parlor;
"adult" book store; store selling pornographic materials or devices; game room;
funeral parlor; off-track betting establishment.
(b) It is understood and agreed that it is of the essence of this lease
that Tenant open for business within one hundred and twenty (120) days after the
Date of Delivery of Possession, or when Tenant opens for Business, whichever
comes first, and thereafter conduct its normal business operating in the entire
Demised Premises. Tenant covenants and agrees that it will continuously operate
its said business in the entire Demised Premises throughout the term hereof
shall remain open for business during the hours designated by Landlord for
tenants in the Shopping Center. Tenant's said operational shall be conducted
under the trade name "Middlebrook Galleria Ten-Plex" and Tenant may not change
such name without Landlord's prior written consent.
(c) If Landlord shall permit Tenant to be open for business in the Demised
Premises during hours in addition to those which are the normal business hours
for other tenants at the Shopping Center, Tenant shall be responsible for any
additional costs and expenses incurred by Landlord as a result of Tenant's
operation during such additional hours, including, but not limited to any costs
and expenses for lighting of the Common Areas and providing security therefore.
SECTION 10.2 (a) Landlord covenants and agrees that Landlord will not, at
any time during the term of this Lease so long as the Demised Premises are being
used by Tenant for the Primary Use as set forth in Section 10.1 (a) above, lease
or rent any space or premises within the Shopping Center for the same Primary
Use.
(b) Notwithstanding the provisions of Paragraph (a) to this Section, in
the event that, at any time during the term of this Lease, Landlord desires to
lease or rent any space within the Shopping Center, for any use which is
described in Paragraph (a), Landlord shall so notify Tenant, such notice to
contain the name of the proposed tenant, a description of the proposed use and a
description of the floor area and location in the Shopping Center of the
premises to be leased to such tenant. Tenant shall then have a period of thirty
(30) days after such notice within which to notify Landlord whether or not
Tenant elects to enforce the provisions of Paragraph (a) of this Section. If
tenant shall notify Landlord that Tenant does not elect to enforce such
provisions, or if Tenant shall fail to give any notice to Landlord, within such
thirty (30) day period, Tenant shall, subject to the provisions of the final
sentence of this paragraph (b), be deemed to have waived its rights and remedies
under said Paragraph (a) with respect to the particular leasing described in the
notice from Landlord. If Tenant shall notify Landlord that Tenant elects to
enforce the provisions of Paragraph (a) of this Section 10.3, then Landlord
agrees to comply with such provisions as they apply to the proposed leasing,
and, in any such event, Tenant shall automatically be deemed to have agreed to
indemnify Landlord and save Landlord harmless from and against any liability,
claim, cost or expense arising out of the enforcement of the restrictions and
limitations set forth in said Paragraph (a). In not event, however, shall
Landlord be obligated to enforce such restrictions and
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limitations if such enforcement shall expose Landlord to criminal or
quasi-criminal prosecution or penalty. In the event that Tenant shall either
notify Landlord that Tenant does not elect to enforce the said restrictions and
limitations or shall fail to give notice within the thirty (30) day period
specified above, and if Landlord shall not conclude a leasing arrangement with
the proposed tenant within six (6) months from the date of the expiration of
such thirty (30) day period, the provisions of Paragraph (a) and this Paragraph
(b) shall again be applicable to the Tenant and premises described in Landlord's
aforesaid notice.
SECTION 10.3 Tenant agrees that Landlord shall have the right to prohibit
the continued use by Tenant of any unethical or unfair method of business
operation, advertising or interior display if, in Landlord's reasonable opinion,
the continued use thereof would impair the reputation of the Shopping Center as
a desirable place to shop or is otherwise out of harmony with the general
character of the Shopping Center. Upon notice from Landlord, Tenant shall
forthwith refrain from or discontinue any such activities. In addition, Tenant
agrees to:
(a) obey and observe (and compel its officers, employees, contractors,
licensees, invitees, subtenants, concessionaires and all others doing business
with it) all reasonable rules and regulations established by Landlord from time
to time for the conduct of Tenant or for the welfare of the Shopping Center, so
long as the same are not discriminatory with respect to Tenant. Landlord shall,
except in the case of any emergency, give Tenant at lease five days notice of
the establishment thereof:
(b) use the Shopping Center name in referring to the location of the
Demised Premises in all newspaper or other advertising or other printed material
and all other references to the location of the Demised Premises;
(c) include the address and identity of its business activity in the the
Demised Premises and all advertisements made by Tenant in which the address an
identity of any local business activity of like character conducted by Tenant
shall be mentioned;
(d) participate in any reasonable window cleaning and exterminating
program that my be established by Landlord for all or substantially all of the
retail stores and businesses in the Shopping Center;
(e) operate its business in the Demised Premises with adequate equipment
and trade fixtures which shall be new, functional, sufficient and of first class
workmanship; and
(f) handle and dispose of all rubbish, garbage and waste from Tenant's
operations in accordance with regulations established by Landlord and not permit
the accumulation (unless concealed in metal containers inside the Demised
Premises) or burning of any rubbish or garbage in, on or about any part of the
Demised Premises or Shopping Center.
ARTICLE XI
WARRANTY OF USE; COMPLIANCE WIT LAWS
SECTION 11.1 Landlord covenants, warrants and represents that, upon the
Date of Delivery of Possession of the Demised Premises to Tenant, the Demised
Premises shall be free of all others or notices of violation of any public or
quasi-public authorities, that upon said date Tenant shall be permitted by the
public authorities having jurisdiction thereover to occupy and use the Demised
Premises for the use as set forth in Section 10.1 (a)
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herein, and that, upon the Lease Commencement Date, Landlord's work in
connection with the construction of the Demised Premises shall comply with all
applicable statutes and ordinances and with all applicable regulations, rules,
orders and requirements of all governmental authorities, bureaus or departments
having jurisdiction. Landlord shall, at its expense, make any and all
alterations or changes to the Demised Premises of a capital nature (determined
in accordance with generally accepted accounting principles consistently
applied) required by any of the aforesaid statutes, ordinances, regulations,
rules, orders or requirements, and any amounts so expended by Landlord shall b
included in Common Area Costs under Section 4.3 (a) hereof; provided, however,
that the cost of any such alterations or changes of a capital nature required
solely by reason of Tenant's particular use or method of operation in the
Demised Premises shall not be included in Common Area Costs and shall be paid by
Tenant.
SECTION 11.2 During the term hereof, subject to the provisions of the last
sentence of Section 11.1 hereof, Tenant, at Tenant's expense, shall comply with
all applicable statutes and ordinances and with all applicable regulations,
rules, orders and requirements of al governmental authorities, bureaus or
departments having jurisdiction, for the correction, prevention and abatement of
nuisances or other violations in or upon the Demised Premises, and Tenant shall
make any repairs or alterations to the Demised Premises required by any such
applicable statutes, ordinances, regulations, rules, orders or requirements. If
Tenant shall fail, for a period of thirty (30) days after written notice to it,
to comply with any such statute, ordinance, regulations, rule order or
requirement with which it is obligated by this Section to comply (or to commence
to effect compliance therewith within such period and thereafter diligently
continue its efforts to effect such compliance until completion thereof),
Landlord shall have the right (but not the obligation) to do all things
necessary to comply therewith. In the event of such compliance by Landlord,
Tenant shall, on the first day of the Calendar month next succeeding the
calendar month in winch such compliance shall have been completed by Landlord,
pay to Landlord, as additional rent, the amount expended by Landlord in
effecting such compliance, together with interest at the Lease Interest Rate
from the time of such expenditure.
SECTION 11.3 Notwithstanding the foregoing provisions of this Article,
Tenant shall have the right to contest, by appropriate proceedings, at Tenant's
expense, any obligation or alleged violation of any of the statutes, ordinances,
regulations, rules, orders and requirements with which Tenant is required to
comply as hereinabove provided. During the tendency of such contest, Tenant
shall have the right to defer compliance so long as such non-compliance shall
not constitute a crime or subject Landlord to fine, penalty or damages or
constitute a breach or violation of any mortgage or other loan or financing
agreements encumbering the Shopping Center or subject the fee or the Shopping
Center to any lien. If compliance is so deferred, the deferral shall not be
deemed a breach of this Lease, so long as such contest proceeding shall be
prosecuted diligently by Tenant and in good faith. Landlord hereby agrees to
cooperate reasonably with Tenant in connection with any such contest and to
execute any documents reasonably required in furtherance of such purpose, all
without cost or expense to Landlord. Tenant agrees to indemnify and save
Landlord harmless from and against any and all cost or expense by reason of such
deferral or contest by Tenant.
SECTION 11.4 (a) Without limiting the foregoing and notwithstanding
anything in this Lease to the contrary, Tenant agrees that it shall, at its sole
cost and expense, fulfill, observe and comply with all of the terms and
provisions of the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 ET
SEQ., as the same may be amended from time to time and all rules, regulations,
ordinances, opinions, orders and directives issued or
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promulgated pursuant to or in connection with said Act by the Department of
Environmental Protection ("DEP"), or any subdivision or bureau thereof or any
other governmental or quasi-governmental agency, authority or body having
jurisdiction. (Said Act and all of said rules, regulations, ordinances,
opinions, orders and directive are hereinafter in this Article collectively
referred to as "ECRA").
(b) Without limiting the foregoing, upon the Landlord's request therefor,
and in all events no later than sixty (60) days prior to "closing, terminating
or transferring operations" (as said term is defined in ECRA) at the Demised
Premises, Tenant, at its sole cost and expense, shall provide Landlord with a
true copy of:
(i) An opinion letter from DEP (or such other agency or body as shall
then have jurisdiction over ECRA matters) in a form satisfactory to
Landlord's counsel, stating the ECRA does not then apply to Tenant,
Tenant's use and occupancy of the Demised Premises and the closing,
terminating or transferring of operations at the Demised Premises;
or
(ii) A Negative Declaration (as said term is defined in ECRA) duly
approved by DEP or such other agency or body as shall then have
jurisdiction over ECRA matters; or
(iii) A Cleanup Plan (as said term is defined in ECRA) duly approved by
DEP or such other agency or body as shall then have jurisdiction
over ECRA matters.
Nothing in this Paragraph (b) shall be construed as limiting Tenant's
obligation to otherwise comply with ECRA.
(c) In the event Tenant complies with Paragraph (c) of this Section, by
obtaining an approved Cleanup Plan, Tenant agrees that it shall, at its sole
cost and expense:
(i) Post any financial guarantee or other bond required to secure
implementation and completion of said Cleanup Plan and
(ii) Promptly implement and prosecute to completion said Cleanup Plan,
in accordance with the schedules contained in said Cleanup Plan
or as may be otherwise ordered or directed by DEP or such other
agency or body as shall then have jurisdiction over said Cleanup
Plan. Tenant expressly understands and acknowledges that
Tenant's compliance with the provisions of this Paragraph (c) may
require Tenant to expend funds or do acts after the expiration or
termination of the Term of this Lease. Tenant agrees that it
shall expend such funds and do such acts and Tenant shall not be
excused therefrom even though the Terms of this Lease shall have
previously expired or been terminated.
(d) Within then (10) days after written request by the Landlord or any
mortgagee or ground lessor or Landlord, Tenant shall deliver to Landlord or
Landlord's mortgagee or ground lessor, as the case may be, duly executed and
acknowledged affidavit of Tenant's chief executive officer, certifying:
(i) The proper four digit Standard Industrial Classification number
relating to Tenant's then current use of the Demised Premises (said
Standard Industrial Classification number to be obtained by
reference to the then current Standard Industrial Classification
Manual prepared and published by the Executive Office of the
President, Office of Management and Budget or the successor or such
publications); and
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(ii) The Tenant's then current use of the Demised Premises does not
involve the generation, manufacture, refining, transportation,
treatment, storage, handling, or disposal of hazardous substances or
wastes (as hazardous substances and hazardous wastes are defined in
ECRA) on site, above ground or below ground (all of the foregoing
being hereinafter collectively referred to as the Presence of
Hazardous Substances), in which event, said affidavit shall describe
in detail that portion of Tenant's operations which involves the
Presence of Hazardous Substances. Said description shall, INTER ALIA
, identify each hazardous substance and describe the manner in which
it is generated, handled, manufactured, refined, transported,
treated, stored, and/or disposed of. Tenant shall supply Landlord or
Landlord's mortgagee or ground lessor with such additional
information relating to said Presence of Hazardous substances as
Landlord or Landlord's mortgagee or ground lessor may request.
(e) Without limiting the foregoing, Tenant agrees,
(i) at its sole cost and expense, to promptly discharge and remove any
lien or other encumbrance against the Demised Premises, the Shopping
Center or any other property owned or controlled, in whole or in
part, by Landlord; and
(ii) to indemnify and hold Landlord harmless from and against any and
all liability, penalties, losses, expenses, damages, costs, claims
causes of action, judgments and/or the like, of whatever nature,
including but not limited to attorneys fees and other costs of
litigation or preparation therefore, to the extent said lien,
encumbrance, liability, penalty, loss, expense, damage, cost, claim,
cause of action, judgment adn/or the like or attorneys fees or other
costs arise from or in connection with Tenant's failure or
inability, for any reason whatsoever, to observe or comply with ECRA
and/or the provisions of this Section.
(f) (i) Notwithstanding anything in this Lease to the contrary and
without limiting the foregoing provisions of this Section, Tenant
agrees that it shall, at its sole cost and expense, observe, comply
and fulfill all of the terms and provisions of the Spill
Compensation and Control Act, N.J.S.A. 58:10-23.11 ET SEQ., as the
same may be amended from time to time and all rules, regulations,
ordinances, opinions, orders and directives issued or promulgated
pursuant to or in connection with said Act by the Department of
Environmental Protection ("DEP"), any subdivision or bureau thereof
or any other governmental or quasi-governmental agency or body
having jurisdiction. (Said Act and all of said rules, regulations,
ordinances, opinions, orders and directives are hereinafter in this
Article collectively referred to as "Spill Act".)
(ii) Without limiting the foregoing, Tenant agrees:
(1) That it shall not do or omit to donor suffer he commission or
omission of any act the commission or omission of which is
prohibited by or may result in liability under the Spill Act,
including without limitation, the discharge of petroleum
products or other hazardous substances (as said term are
defined in the Spill Act); and
(2) Whenever the Spill Act requires the "owner or operator" to do
any act, Tenant shall do such act at its sole cost and
expenses, it being
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the intention of the parties hereto that Landlord shall be
free of all expenses and obligations arising from or in
connection with compliance with the Spill Act and that Tenant
shall fulfill all such obligations and pay all such expenses.
(iii) Without limiting the foregoing, Tenant agrees
(1) at its own cost and expense, to promptly discharge and remove
any lien or other encumbrance against the Demised Premises,
the Shopping Center or any other property owned or
controlled, in whole or in part, by Landlord and
(2) to indemnify and hold Landlord harmless from and against any
and all liability, penalties, losses, expenses, damages,
costs, claims, causes of action, judgments and/or the like of
whatever nature, including but not limited to attorneys fees
and other costs of litigation or preparation therefore, to
the extent said lien, encumbrance, liability, penalty, loss,
expense, damage, cost, claim, cause of action, judgment and
or the like or attorneys fees or other costs arise from or in
connection with Tenant's failure or inability, for any reason
whatsoever, to observe or comply with the Spill Compensation
Act and/or the provisions of this Section.
(g) Without limiting the foregoing provisions of this Section and the
provisions of Sections 11.1 and 11.2, Tenant agrees that it shall, at its cost
and expenses, promptly comply with all federal, state and local laws,
ordinances, rules, regulations and requirements relating to air, ground and
water pollution and protection and/or preservations of the environment.
(h) Tenant agrees that each and every provision of this Section shall
survive the expiration or earlier termination of the Term of this Lease, the
parties hereto expressly agreeing and acknowledging that Landlord would not
enter into this Lease but for the provisions of this Article and the aforesaid
survival thereof.
ARTICLE XII
COVENANT OF TITLE AND QUIET ENJOYMENT
SECTION 12.1 (a) Landlord covenants, warrants and represents that:
(i) Landlord is the fee owner of the Shopping Center, subject to
easements and restrictions of record; and
(ii) Landlord, has full right and power to execute and perform this Lease
and to grant the estate herein demised for the entire term hereof.
(b) Landlord further covenants and agrees that Tenant, upon paying the
rents herein provided and performing and observing the covenants, agreements and
conditions of this Lease on Tenant's part to be performed and observed, shall
and may, during the term of this Lease, lawfully, peaceably and quietly have,
hold and enjoy the Demised Premises adn all o rights, easements, appurtenances
and privileges granted herein or belonging or appertaining thereto , without
hindrance, molestation, eviction or disturbance by Landlord, or by any other
person or person claiming through Landlord, subject , nevertheless, to the
provisions of this Lease.
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ARTICLE XIII
MORTGAGE SUBORDINATION AND NON-DISTURBANCE
SECTION 13.1 This lease shall be subject and subordinate at all times to
the lien of any mortgage (s) and any renewals, extensions, consolidations or
replacements thereof now or hereafter affecting the Demised Premises or Shopping
Center, and to the rights of any ground lessor of the Demised Premises or
Shipping Center. Landlord shall obtain the agreement of the holder of any such
mortgage or ground lessor, in a duly executed and acknowledged instrument, that
such holder or ground lessor recognizes this Lease, and that so long as this
Lease shall be in full force and effect and Tenant is not in default hereunder
(after expiration of applicable notice and grace periods): (a) this Lease and
the leasehold estate hereby created will not be extinguished or terminated nor
will the possession or rights hereunder of Tenant be distributed, affected or
impaired by the foreclosure of such mortgage arising out of any default
thereunder or by delivery of a deed in lieu of foreclosure of such mortgage or
otherwise or by termination of such ground lease or default by Landlord
thereunder; (b) Tenant shall not be named or joined as a party defendant or
otherwise in any proceeding for the foreclosure of any such mortgage or to
enforce any rights hereunder or any proceeding to enforce any rights under any
such ground lease; (c) all condemnation awards and payments and all proceeds of
insurance paid or payable with respect to the Demised Premises or the Shopping
Center shall first be applied and used in the manner set forth in this Lease;
and (b) neither the mortgage nor any other security instrument executed in
connection therewith nor any ground lease shall cover or be construed as
subjecting in any manner to the lien thereof any trade fixtures, business
equipment, signs or other personal property at any time supplied or installed by
Tenant in or on the Demised Premises, regardless of the manner or mode of
attachment thereof to the Demised Premises. If the holder of any such
institutional mortgage shall require that this Lease have priority over such
mortgage, Tenant shall, upon request of such holder, execute, acknowledge and
deliver an agreement acknowledging and confirming such priority.
SECTION 13.2 If the holder of any mortgage encumbering the Demised
Premises or Shopping Center shall so require, Tenant shall enter into a written
agreement with such holder wherein Tenant agrees to attain to such holder as the
Landlord under this Lease if such holder should holder should succeed to
Landlord's interest in the Demised Premises or Shopping Center.
ARTICLE XIV
ASSIGNMENT AND SUBLETTING
SECTION 14.1 (a) Tenant shall not, either voluntarily or involuntarily, by
operation of law or otherwise, assign, transfer mortgage or otherwise encumber
this Lease, or sublet the whole or any part of the Demised Premises, or permit
the Demised Premises or any part thereof to be occupied by others except in
accordance with this Article XIV. If Tenant shall desire to assign this Lease or
to sublet all or any portion of the Demised Premises, or to permit any other
party to occupy all or any portion of the Demised Premises, Tenant shall notify
Landlord of such desire, which notice must be accompanied by the following
information:
(i) The name of the proposed assignee, subtenant or occupant;
(ii) If a partnership or corporation, the names of the principals of the
proposed assignee, subtenant or occupant;
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(iii) A current financial statement for the proposed assignee, subtenant
or occupant, including such financial information as Landlord shall
reasonably require; and
(iv) A description of the proposed use of the Demised Premises by the
proposed assignee, subtenant or occupant.
(v) Notwithstanding the forgoing, Tenant shall have the right to assign
this Lease within ninety (90) days from execution, to a partnership
or corporation in which Tenant is a principal.
Tenant shall be PERSONALLY LIABLE FOR ALL OBLIGATIONS UNDER THIS LEASE for the
initial five (5) year term of the Lease, regardless of whether the Lease is
assigned to an entity.
Tenant may sublet, not assign, up to twenty (20%) of commercial space, subject
to notice under subsections 14.1 (a) (1-v), but only for uses permitted under
this lease.
(b) Tenant may not without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, assign this Lease or sublet the
Demised Premises, in whole or in part, or permit the Demised Premises or any
part thereof to be occupied by others. It is understood and agreed that
Landlord's refusal to consent to any of the foregoing shall not be deemed
unreasonable if either: (i) Tenant is in default under this Lease at the time;
or (ii) the proposed use by the assignee or subtenant or the name under which
the assignee or subleases will operate is other than that permitted under
Section 10.1 of this Lease; or the giving of such consent by Landlord shall
apply only to the specific transaction thereby authorized, and shall not be
construed to relieve Tenant from obtaining Landlord's consent to any other or
subsequent such assignment, transfer, mortgage or other encumbrance, subletting,
use or occupancy, or as modifying or limiting Landlord's rights under this
Section 14.1. Notwithstanding Landlord's consent as aforesaid, Tenant shall,
nevertheless, remain primarily liable to perform all covenants and conditions of
this Lease. Tenant shall not be released or discharged from such liability by
reason of any modification, amendment or supplement of this Lease agreed to by
Landlord and any assignee or subtenant or by reason of Landlord's failure to
enforce any of its rights or remedies hereunder against any such assignee or
subtenant. At least ten (10) days prior to the effective date thereof, Tenant
shall furnish Landlord with a conformed copy of any such assignment or sublease,
together with an agreement in writing executed by any such assignee or subtenant
to assume the obligations imposed by this Lease upon the Tenant and to perform
the same in accordance with the terms hereof, and pursuant to which any
subtenant agrees that it this Lease shall be terminated by reason of Tenant's
default hereunder or otherwise, at Landlord's option, to be exercised by notice
to the subtenant, such sublease shall continue in full force and effect and the
subtenant will attain to Landlord.
Tenant shall be primarily liable for the initial term of any assignment.
(c) If Landlord shall consent to an assignment or subletting pursuant ot
Paragraph (b) hereof, then, in any such event, Landlord shall be entitled to
receive the full amount of any consideration, of whatever kind or nature,
payable by the assignee, subleases or occupancy in connection with such
assignment, subletting or occupancy. The foregoing shall include any basic
annual rent or additional rent or percentage rent payable by the assignee,
subleases or occupancy in addition to that payable by Tenant under the provision
of this Lease. In addition, if this Lease be assigned, or if the Demised
Premises or any part thereof be sublet, or occupied by anybody other than
Tenant, Landlord may, after
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default hereunder, collect rent, additional rent and percentage rent from the
assignee, subtenant or occupant, and apply the net amount collected to the Basic
Annual Rent and/or additional rent reserved hereunder, but no such collection
shall be deemed a waiver of its covenant, or the acceptance of the assignee,
subtenant or occupancy as tenant, or a release of Tenant from the further
performance by Tenant of the terms, covenants and conditions of this Lease on
the part of the Tenant to be performed. Any violation of any provision of this
Lease, whether by act or omission, by any assignee, subtenant or occupancy,
shall be deemed a violation of such provision by Tenant, it being the intention
and meaning of the parties hereto that Tenant shall assume and be liable to
Landlord for and all acts and omissions of any and all assignees, subtenants
and/or other occupants.
Landlord shall receive any profits on rentals, not on fixtures of goodwill with
reference to this Section. Tenant shall be able to keep the proceeds of sale for
fixtures, inventory and good will only.
SECTION 14.2 Notwithstanding the provisions of Section 14.1 hereof, Tenant
shall have the right, without the provisions of Section 14.1 being applicable,
to assign this Lease or sublet the Demised Premises, in whole or in part, to,
any parent or subsidiary to Tenant or in connection with a merger of Tenant
provided that the surviving entity in a merger shall have a tangible net worth
(determined in accordance with generally accepted accounting principles) not
less than the then net worth of Tenant.
ARTICLE XV
SIGNS
SECTION 15.1 Tenant shall have the right, at its expense, and subject to
Landlord's approval, which shall not be unreasonably withheld, to erect and
maintain upon the exterior front facade of the Demised Premises, its sign in
accordance with its specifications, provided that such sign complies with, and
Tenant, at its expense, obtains all permits and approvals required by,
applicable laws, statutes, ordinances and regulations of governmental
authorities applicable thereto. Notwithstanding the foregoing, the parties agree
that;
(i) Landlord has approved the design of the initial sign to be installed
sign to be installed by Tenant in connection with its opening of the
Demised Premises for business;
(ii) With respect to any changes tin Tenant's said exterior sign, so
long as such changed or replacement sign is substantially the
same as the other signs being utilized by Tenant in its other
store locations in the northern New Jersey area, does not have
dimensions greater than those of the original sign and is
non-flashing and is the same color as the original, Landlord
shall not have the right to withhold its approval of any such
sign; and
(iii) Landlord's consent shall not be required with respect to Tenant's
interior signs, provided that no window signs shall be permitted.
Upon the expiration or termination of the term of this Lease, Tenant, at its
expense shall remove all of its exterior and interior signs and its sign face on
any pylon sign.
SECTION 15.2 (a) Landlord hereby consents to the placement of Tenant's
sign the face on the Shopping Center pylon sign to be located at the Shopping
Center. Tenant shall supply Landlord, for Landlord's approval, with a sign
drawing for Tenant's said signs at least sixty (60) days prior to the date
Tenant opens for business in the Demised Premises. Tenant shall pay a share of
the cost of
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installation of the pylon sign, such share to be equal to 100% of cost of such
pylon and electrification thereof. In addition, Tenant shall pay the full cost
of Tenant's sign panels and installation thereof on the Shopping Center pylon
sign.
(b) Landlord shall repair and maintain or cause to be repaired and
maintained any pylon sign presently existing at the Shopping Center, or
otherwise contemplated by this Section 15.2, in good order and condition, and
the costs thereof shall be included in Common Area Costs under Section 4.3.
ARTICLE XVI
REPAIRS
SECTION 16.1 (a) During the initial term of this Lease, Landlord shall
make all necessary repairs and replacements to or of: (i) the foundation and
structure of the Demised Premises (the structure to be deemed to mean exterior
walls, bearing walls, structural frames, beams and supports, and floor as
distinguished from floor covering); (ii) the roof covering at the Demised
Premises. Notwithstanding the foregoing, if the necessity for any of the
foregoing repairs or replacements shall result from the act, fault or negligence
of Tenant, or its agents, servants, employees, licensees or invitees, or of
anyone claiming under Tenant, or shall result from the default by Tenant under
the provisions of this Lease, Tenant shall, upon demand, reimburse Landlord for
the cost of such repairs or replacements. After five (5) years, such repairs
will be the responsibility of the Tenant.
(b) Tenant shall, at its expense, keep the interior of the Demised
Premises and the sidewalks adjoining the Demised Premises in a clean and orderly
condition free of accumulation of dirt, rubbish, debris, snow and ice, shall
perform normal maintenance procedures on , and all necessary repairs to and
replacements of the heating, ventilating and air-conditioning equipment serving
the Demised Premises, and shall make all interior and exterior repairs to
Demised Premises which Landlord is not obligated to make pursuant to the
provisions of this Lease; provided, however, that if the necessity for any of
the repairs which Tenant is hereby required to make shall result from the act,
fault or negligence of Landlord, or its agents, servants, employees, licensees
or invitees, or Landlords default under the provisions of this Lease, it shall
be the responsibility of Landlord to make the same at Landlord's expense.
SECTION 16.2 Landlord shall assign to Tenant all guarantees or warranties
from suppliers, contractors, subcontractors or workers of which Landlord has the
benefit, where such guarantees or warranties cover materials, equipment or
workmanship installed or performed by or for Landlord pursuant to Rider LC
hereof which Tenant is obligated to maintain, repair or replace pursuant to
Section 16.1 (b). Landlord further covenants and agrees that it will cooperate
fully with Tenant, at not cost or expense to Landlord, in the enforcement of all
guarantees or warranties to be assigned by Landlord to Tenant pursuant to this
Section 16.2
SECTION 16.3 Landlord shall, subject to the provisions of Section 4.3, and
except as otherwise provided in Section 16.1 (b), maintain or cause to be
maintained (in accordance with applicable tenant lease provisions) the exterior
of all buildings and other structures in the Shopping Center in reasonably good
order and condition.
SECTION 16.4 All repairs and replacements performed by Landlord or Tenant
pursuant to this Article XVI shall be performed in a good and workmanlike manner
and in conformity with all statutes, ordinances, rules, regulations and
requirements of public authorities and insurance inspection and rating bureaus.
The party
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performing such work shall, at its expense, obtain all necessary permits and
approvals required in connection therewith.
SECTION 16.5 Landlord, and its agents and employees, shall not be liable
or responsible for any damage or injury to any property of Tenant, or to any of
Tenant's agents, employees, customers, licensees, invitees or contractors
arising from or out of any breakage, stoppage or leakage or pipes, conduits and
cable or any other occurrence, in, upon or at or from the Demised Premises or
Shopping Center, or the occupancy, condition or use of the Demised Premises or
Shopping Center, excluding gross negligence on the part of Landlord.
ARTICLE XVII
ALTERATIONS
SECTION 17.1 Tenant shall not make any structural or exterior alterations
or improvements to the Demised Premises without in each instance first obtaining
Landlord's written consent. Tenant shall have the right, at any time from time
to time, without Landlord's consent, to paint the interior of Demised Premises
or any part of parts thereof, and to make any non-structural alterations,
improvements or installations in, to or upon the interior of Demised Premises;
provided, however, that;
(i) Tenant shall have the right to make alterations or improvements to
the storefront of the Demised Premises only with Landlord's consent,
which shall not be unreasonably withheld, provided that the
alteration or improvement is consistent with the appearance of the
balance of the Shopping Center; and
(ii) No alteration, improvement, installation or addition made by Tenant
shall endanger or impair the structure of, or decrease the value,
utility or cubic area of, the Demised Premises.
SECTION 17.2 All alterations, improvements or installation made or doe by
Tenant in, on or to the Demised Premises or any parts or facilities thereof
shall be done in a good and workmanlike manner and in conformity with all
statutes, ordinances, rules, regulations and requirements of public authorities
and insurance inspection and rating bureaus having jurisdiction, and with all
necessary governmental permits or authorities.
SECTION 17.3 Any and all alterations, improvements or installations made
in , to or upon the Demised Premises by Tenant or Landlord (but not Tenant's
furniture, lighting fixtures, trade fixtures and movable trade equipment,
counters and shelving or signs installed by Tenant) shall, except as hereinafter
provided, be surrendered with the Demised Premises as part thereof at the
expiration or other termination of the term of this Lease. Tenant shall remove
any such alterations, improvements or installations if Landlord shall require
such removal by notice to Tenant at least 60 days prior to the Expiration Date.
Tenant shall, upon the Expiration Date or sooner termination of this Lease,
remove its said furniture, trade fixtures and trade equipment, counters,
shelving, racking and signs, and Tenant shall have the right, at its option, to
remove any such alterations, improvements, installations or interior additions
from the Demised Premises upon the expiration or other termination (for reasons
other than Tenant's default) of the term of this Lease, and, in such event,
Tenant shall repair any and all damage to the Demised Premises caused by such
removal and restore the Demised Premises to their condition prior to the making
of the alterations, improvement or installation being removed, with the
exception of floors.
SECTION 17.4 Tenant agrees to indemnify and save harmless Landlord against
and from any and all claims for injury, loss or
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damage to person or property caused by or resulting from the work in connection
with any alterations, improvements, installations or additions in, to or upon
the Demised Premises made by Tenant or by anyone claiming under Tenant.
ARTICLE XVIII
MECHANIC'S LIENS
SECTION 18.1 If any mechanic's liens shall be filed against the fee of the
Demised Premises or against Tenant's leasehold interest therein by reason of
work, labor, services or materials supplied or claimed to have been supplied to
Tenant or anyone holding the Demised Premises or any part thereof through or
under Tenant, Tenant shall, within thirty (30) days after receiving notice of
the filing thereof, cause the same to be discharged of record by payment,
deposit, bond, order of a court of competent jurisdiction, or otherwise. Nothing
contained in this Lease shall be construed as a consent on the part of Landlord
to subject the estate of Landlord in the Demised Premises or the Shopping Center
to any liability under the New Jersey Mechanic's Lien Law, it being expressly
understood and agreed that Landlord's estate shall not be subject to such
liability and any work performed or material supplied by or on behalf of Tenant
or at Tenant's request, shall be solely upon the credit of the Tenant and
Landlord shall have no liability or obligation with respect thereto. Any
provisions of this Lease pursuant to which the Tenant may perform any work,
alterations, improvements or installations at the Demised Premises or Shopping
Center, shall not be deemed to constitute a consent by Landlord thereto for
purposes of the said New Jersey mechanic's Lien Law.
ARTICLE XIX
LANDLORD'S ACCESS TO DEMISED PREMISES
SECTION 19.1 Landlord shall have the right, during reasonable business
hours and without unreasonable interference with the operation of the business
conducted therein, and upon not less than twenty-four (24) hours' notice to
Tenant, to enter upon the Demised Premises for the purposes of inspecting same,
or making repairs and replacements thereto or therein pursuant to this Lease, or
exhibiting the same to prospective purchases or mortgagees of the Shopping
Center. Without limiting the foregoing, Landlord shall also have the right, in
the event of an emergency, to enter the Demised Premises at such time or times
as shall be required by such emergency upon such telephone or other notice to
Tenant as shall be practicable under the circumstances. In the event of any such
emergency entry: (i) Landlord shall make reasonable efforts to be accompanied by
a member of the police force or fire department, (ii) Landlord shall be
responsible for, and agrees to indemnify Tenant and save Tenant harmless
against, any loss or damage resulting from the negligence of Landlord or any of
its agents, servants, employees, licensees or invitees entering the Demised
Premises.
ARTICLE XX
DEFAULT PROVISIONS
SECTION 20.1 If Tenant does not: (a) within twenty (20) days after the due
date thereof pay any installment of Basic Annual Rent or additional rent; or (b)
within thirty (30) days after notice from Landlord cure a default or additional
rent (provided, however, that such thirty (30) day period shall be extended if
the default is of such a nature that it could not reasonably be cured within
such period of thirty (30) days and Tenant promptly commences and thereafter
diligently pursues the curing of such default), then, in any such event, Tenant
shall be deemed in default under this Lease. Landlord may thereupon re-enter the
Demised Premises and, by
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summary proceedings or otherwise, dispossess the Tenant and any other occupants
thereof, remove their effects not previously removed by them, and hold the
Demised Premises as if this Lease had not been made. In addition, Landlord may,
upon three (3) days notice to Tenant, terminate this Lease. In any such event
Tenant shall remain liable as hereinafter provided in Section 20.2
SECTION 20.2 In any case where Landlord has recovered possession of the
Demised Premises by reason of Tenant's default, whether or not Landlord
terminates this Lease, Landlord may, at Landlord's option, relate the Demised
Premises or any part thereof, for a term or terms ot expire prior to, at the
same time as, or subsequent to the expiration date of this Lease, and receive
the rent therefore, applying the same first to the payment of such expenses as
Landlord may have incurred in connection with the recovery of possession, then
to the cost of repairs, replacements or renewals necessary because of the
condition in which the Demised Premises were left by Tenant or repairs
alterations, or improvements otherwise necessary for reletting, and the expenses
of reletting, including brokerage and attorneys' fees and costs of alterations
to the Demised Premises, and then to the payment of an amount equal to the Basic
Annual Rent and additional rent hereunder and to the cost and expense of
performance of the other covenants of Tenants as herein provided. All Basic
Annual Rent and additional rent to be paid by Tenant shall be computed
separately for each month, less the net proceeds of the reletting, if any, as
ascertained from time to time , and the same shall be payable bye Tenant on the
several rent payment days above specified. In reletting the Demised Premises, as
aforesaid, Landlord may grant rent concessions, and Tenant shall not be credited
therewith. No such reletting shall constitute acceptance of surrender of Demised
Premises or be deemed evidence thereof. The Tenant shall not be entitled to any
monthly or other surplus accruing as a result of any reletting .
(b) Upon termination or recovery of possession by Landlord on default, the
Tenant and the Tenant's creditors and representatives shall thereafter have no
right, legally or equitably, in or to the Demised Premises, or any part thereof,
or in or to the repossession of same, or in or to this Lease, and the Tenant
hereby waives all right of redemption which is or may hereafter be provided by
statute.
(c) The specified remedies to which Landlord may resort under the terms of
this Section are cumulative and are not intended to be exclusive of any or all
other remedies or means of redress to which Landlord may be lawfully entitled in
case of any breach or threatened breach by Tenant of any provision of this
Lease. Without limiting the generality of the foregoing, Landlord shall have the
right to institute summary dispossess proceedings against Tenant under all
circumstances from time to time permitted by law. In the event judgment Tenant
in any such proceedings, Tenant shall thereafter remain liable to Landlord as
provided in Paragraph (a) above as if Landlord had terminated this Lease by
reason of Tenant's default pursuant to Section 20.1
SECTION 20.3 (a) Subject to the provisions of Paragraph (b) of
this Section, if. pursuant to an order, judgment or decree entered by any
court of competent jurisdiction:
(i) a receiver, trustee or liquidator of all or substantially all of
the assets of Tenant shall be appointed; or
(ii) Tenant shall be adjudicated a bankrupt or insolvent; or
(iii) a petition seeking the reorganization of Tenant or an arrangement
with creditors or a petition to take advantage of any insolvency law
shall be approved,
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and as a result of the happening of any of the foregoing contingencies, the
obligation of Tenant to pay Basic Annual Rent or additional rent shall be
modified or abrogated, or the provisions of this Lease shall otherwise be
materially modified or amended, Landlord may serve notice of termination of this
Lease upon Tenant, stating the date of termination, which date shall be at least
ten (10) days after the date on which such notice is served, and upon the date
specified in such notice, this Lease and the term hereof shall cease and expire,
and Tenant shall then quit and surrender the Demised Premises, but Tenant shall
remain liable as hereinafter provided. If this Lease and the term hereof shall
cease and expire in accordance with the provisions of this Paragraph (a),
Landlord may dispossess or remove Tenant or any other occupant of the Demised
Premises, by summary proceedings or otherwise, and remove their effects and hold
the Demised Premises as if this Lease had not been made.
(b) (i) Notwithstanding the provisions of Paragraph (a) of this
Section, in the event that Tenant shall file a petition under
Chapter 11 of the Bankruptcy code, Tenant's trustee or Tenant, as
debtor in possession, must, unless otherwise ordered by the
Bankruptcy Court, elect to assume this Lease at or prior to the
earlier of: (i) 180 days after the date of filing of such
petition, and (ii) confirmation of a plan under Chapter 11. In
the absence of an election to assume within such time period,
Tenant's trustee or Tenant, as debtor-in-possession, shall be
deemed to have rejected this Lease. In the event that Tenant,
Tenant's trustee or Tenant, as debtor-in-possession, has failed
to perform all of Tenant's obligations under this Lease within
the time periods (subject to the notices and grace periods
provided for herein) required for such performance, no election
by Tenant's trustee or Tenant, as debtor-in-possession, to assume
this Lease shall be effective unless each of the following
conditions has been satisfied:
(1) Tenant's trustee or Tenant, as debtor-in-possession, has cured
all defaults under this Lease susceptible of being cured by
the payment of money, or has provided Landlord with Assurance
(as defined below) that it will cure all defaults susceptible
of being cured by the payment of money within ten (10) days
from the date of such assumption and that it will, promptly
after the date of such assumption, commence to cure all other
defaults under this Lease which are susceptible of being cured
by the performance of any act and will diligently pursue
completion of such curing;
(2) Tenant's trustee or Tenant, as debtor-in-possession, has
compensated, or has provided Landlord with Assurance that
within ten (10) days from the date of such assumption it will
compensate, Landlord for any actual pecuniary loss incurred by
Landlord arising from the default of Tenant, Tenant's trustee
or Tenant, as debtor-in-possession, as indicated in any
statement of actual pecuniary loss sent by Landlord to
Tenant's trustee or Tenant, as debtor-in-possession, such
statement, however, not be deemed a binding and conclusive
determination or computation of the amount of such loss;
(3) Tenant's trustee or Tenant, as debtor-in-possession, has
provided Landlord with Assurance of the future performance of
each of the obligations under this Lease of Tenant, Tenant's
trustee or Tenant, as debtor-in-possession; and
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(4) Such assumption will not breach or cause a default under any
provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound relating to the
Demised Premises.
For purposes of this Subparagraph (i), Landlord and Tenant acknowledge that
"Assurance" shall mean either: (x) Tenant's trustee or Tenant, as
debtor-in-possession, has and will continue to have reasonably sufficient
unencumbered assets after the payment of all secured obligations and
administrative expenses to reasonably assure Landlord that sufficient funds will
be available to fulfill the obligations of Tenant under this Lease; or (y)
Tenant's trustee or Tenant, as debtor-in-possession, has deposited with
Landlord, as security, an amount equal to two (2) installments of Basic Annual
Rent (at the rate then payable) which shall be applied to installments of Basic
Annual rent in the inverse order of their maturity; or (z) the Bankruptcy Court
shall have entered an order granting to Landlord a valid and perfected first
lien and security interest in property of Tenant, Tenant's trustee or Tenant, as
debtor-in-possession, having a fair market value as determined by the Bankruptcy
Court appraiser at least equal to two (2) installments of Basic Annual Rent (at
the rate then payable).
(ii) If Tenant's trustee or Tenant, as debtor-in-possession, has
assumed this Lease pursuant to the terms and provisions of
Subparagraph (i) of this Paragraph (b) for the purpose of
assigning (or elects to assign) this Lease, this Lease may be so
assigned only if the proposed assignee has provided adequate
assurance of future performance of all of the terms, covenants
and conditions of this Lease to be performed by Tenant. As used
herein "adequate assurance of future performance" shall mean that
each of the following conditions has been satisfied:
(1) The proposed assignee shall have paid to Landlord an amount
equal to six (6) months of Basic Annual Rent at the rate then
payable;
(2) The proposed assignee has furnished Landlord with either: a
current financial statement audited or reviewed by a certified
public accountant indicating by a net worth and working
capital in amounts which Landlord reasonably determines to be
sufficient to assure the future performance by such assignee
of Tenant's obligations under this Lease; or a guarantee or
guarantees, in form and substance reasonably satisfactory to
Landlord, from one or more persons with a net worth equal to
or in excess of $3,000,000.00 in the aggregate;
(3) Landlord has obtained all consents or waivers from others
required under any lease, mortgage, financing arrangement or
other agreement by which Landlord is bound to permit Landlord
to consent to such assignment, Landlord to use its reasonable
efforts to obtain such consents or waivers; and
(4) The proposed assignment will not release or impair any
guaranty of the obligations of Tenant (including the proposed
assignee) under this Lease.
(c) When, pursuant to the Bankruptcy Code, Tenant's trustee or Tenant, as
debtor-in-possession, shall be obligated to pay reasonable use and occupancy
charges for the use of the Demised Premises (as distinguished from Basic Annual
Rent, percentage rent and additional rent under this Lease while this Lease
continues in force and effect), such charges shall be not less than the Basic
Annual Rent, percentage rent and additional rent payable by Tenant under this
Lease.
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(d) Neither the whole nor any portion of Tenant's interest in this Lease
or its estate in the Demised Premises shall pass to any trustee, receiver,
assignee for the benefit of creditors, or any other person or entity or
otherwise by operation of law under the laws of any state having jurisdiction of
the person or property of Tenant (excluding a merger, as contemplated by Section
14.2 of this Lease) unless Landlord shall have consented to such transfer in
writing. No acceptance by landlord of rent or any other payments from any such
trustee, receiver, assignee, or other person or entity shall be deemed to
constitute such consent by Landlord nor shall it be deemed a waiver of
landlord's right to terminate this lease and recover possession of the Demised
Premises for any transfer of Tenant's interest under this Lease without such
consent.
SECTION 20.4 Without limiting the foregoing provisions of this Article, if
Tenant shall default in the performance of any act, covenant or condition on
Tenant's part to be performed hereunder, and if Tenant shall not cure such
defaults within thirty (30) days after written notice specifying the default
shall have been given to it by Landlord (or shall not have commenced to cure
such default within said thirty (30) day period, and be diligently prosecuting
the curing thereof to completion). Landlord may, but shall not be obligated to,
perform such act, covenant or condition to the extent Landlord may, in its
reasonable judgment, deem desirable, and pay the expenses which Landlord may
deem necessary or advisable in with such performance. In the case of emergency,
however, reasonably necessitating protection of the Landlord's interest in the
Demised Premises or the prevention of injury or damage to person or property,
Landlord may undertake to cure such default (after telephonic notice, if
practicable, to Tenant), before expiration of the aforesaid thirty (30) day
period. All sums expended by Landlord in the curing of such default, plus
interest from the date expended, at the lease Interest Rule, shall be deemed
additional rent hereunder and shall be paid by Tenant to Landlord at the
latter's demand, on the first day of the next succeeding calendar month.
ARTICLE XXI
CUMULATIVE REMEDIES; NO WAIVER
SECTION 21.1 The specific remedies to which landlord or Tenant may resort
under the terms of this Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which they or either of
them may be lawfully entitled in case of any breach or threatened breach by
either of them of any provision of this Lease. In addition to the other remedies
in this Lease provided, landlord and Tenant shall be entitled to the restraint
by injunction of the violation, or attempted or threatened violation, of any of
the covenants, conditions or provisions of this Lease, or to a decree compelling
performance of any of such covenants, conditions or provisions, other than for
the payment of money. The failure of Landlord or Tenant to insist in any one or
more cases upon the strict performance of any of the covenants hereof on
Tenant's or Landlord's, as the case may be, part to be performed, or to exercise
any option herein contained, shall not be construed as a waiver or
relinquishment for the future of such covenant or option.
ARTICLE XXII
DESTRUCTION OR DAMAGE
BY FIRE OR OTHER CASUALTY
SECTION 22.1 If at any time during the term hereof the Demised Premises
shall be damages or destroyed in whole or in part by fire or other casualty or
by the elements, Tenant shall give notice thereof to Landlord, and, except as
hereinafter in this
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Article otherwise provided, landlord, at landlord's expense to the extent of the
available insurance proceeds, shall promptly and with due diligence repair,
rebuild and restore the Demised Premises as nearly as practicable to the
condition thereof existing immediately prior to such damage or destruction. If
the Demised Premises shall be so damages or destroyed that Tenant cannot carry
on its normal business operations in the entire Demised Premises, then all Basic
Annual Rent and additional rent shall abate from the date of such damage or
destruction until the Demised Premises are restored as aforesaid; provided,
however, that if Tenant continues to conduct business in a portion of the
Demised Premises, such abatement shall be only in proportion to the area of the
Demised Premises not usable for Tenant's normal business operations from the
date of such damage or destruction until the Demised Premises are restored in
the manner stated above.
Landlord will rebuild to the point Landlord originally delivered the premises,
with tenant responsible for remainder of restoration. Such rebuilding by both
parties will be mandatory, notwithstanding paragraphs 22.2, 22.3 and 22.4.
Tenant shall at all times insure for replacement cost plus business interruption
to pay rent during construction period. Lease term suspended during rebuilding
to resume on completion.
SECTION 22.2 If Landlord shall fail to commence the repairing, rebuilding
or restoration of the Demised Premises, required by the provisions of Section
22.1 within twelve (12) months after the damage or destruction has occurred, and
if such repairing, rebuilding and restoration are not completed on the earlier
to occur of twelve (12) months after the date of commencement of rebuilding and
eighteen (18) months after the date of commencement of rebuilding and eighteen
(18) months after the date of occurrence of the damage or destruction, then, in
any such event, Tenant shall have the right, at its election, as its exclusive
remedy, to terminate this Lease by giving Landlord notice of termination, within
thirty (30) days after expiration of the applicable time period. This Lease
shall terminate on the date specified in such notice and Basic Annual Rent and
additional rent shall be pro-rated and adjusted as of the date of occurrence of
the damage or destruction.
SECTION 22.3 Notwithstanding the foregoing provisions of this Article, if
at any time during the last two (2) years of the terms of this Lease, more than
fifty (50%) percent of the ground floor area of the Demised Premises shall be so
damaged or destroyed by fire or other casualty, or if, during such last two (2)
years, as a result of damage or destruction by fire or other casualty, tenants
occupying at least sixty (60%) percent of the leasable ground floor area at the
Shopping Center (including the Demised Premises) shall close for business for
six (6) consecutive months or more then, in any such event, Landlord and Tenant
shall each have the right, at its respective option, as its exclusive remedy,
upon and after expiration of such six (6) month period, to terminate this Lease
by notice to other specifying the effective date of termination which effective
date of termination shall be not less than fifteen (15) days nor more than
thirty (30) days after the date of such notice. IF this lease shall be
terminated pursuant to this Section 22.3, Basic Annual Rent and additional rent
shall be adjusted as of the date of occurrence of the damage or destruction.
SECTION 22.4 Notwithstanding any provision of this Article, in no event
shall Landlord be obligated to expend, in connection with the repair or
restoration of the Demised Premises pursuant to this Article, any amount in
excess of the available net proceeds of the insurance carried by Landlord with
respect to the damage or destruction. In the event that such proceeds shall be
insufficient for the repair or restoration or in the event that Landlord's
mortgagee shall apply all or any portion of such proceeds to the reduction of
the indebtedness secured by such mortgage, then to the
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extent of such unavailable proceeds, Landlord shall be excused from the
performance of repair or restoration work hereunder.
ARTICLE XXIII
EMINENT DOMAIN
SECTION 23.1 In the event of a taking for any public or quasi-public use
or purpose by any lawful power or authority by exercise of the right of
condemnation or eminent domain or by agreement between Landlord and those having
the authority to exercise such right (hereinafter called a "Taking") of the
entire Demised Premises or such substantial portion thereof so that the balance
of the Demised Premises is not suitable for the conduct of Tenant's normal
business operations therein, then this Lease and the terms hereof shall cease
and expire on the date of transfer of possession in connection with the Taking.
SECTION 23.2 In the event of: (a) a Taking of any portion of, the Demised
Premises as a result of which this Lease is not terminated pursuant to Section
23.1; or (b) a Taking resulting in a reduction of more than fifteen (15%)
percent of the parking spaces within a radius of one hundred (100) feet of the
front entrance to the Demised Premises (unless landlord provides adequate and
sufficient and reasonably convenient additional parking in substitution
therefor); or (c) a Taking of more than forty (40%) percent of the leasable
space at the Shopping Center (whether or not any portion of Demised Premises is
included in the Taking) or (d) a permanent denial or substantial impairment of
adequate access to the Shopping Center and Demised Premises, then, in such
event, Landlord or Tenant may, at its option, terminate this Lease by giving
notice of termination to the other within sixty (60) days after receipt by
Tenant of notice that the Taking will occur, such notice of termination to be
effective as of the date of transfer of possession in connection with the
Taking.
SECTION 23.3 In the event this Lease is not terminated pursuant to
Sections 23.1 or 23.2, then Landlord shall promptly commence and with due
diligence continue to restore the portion of the Shopping Center and the Demised
Premises remaining after the Taking to substantially the same condition and
tenantability as existed immediately preceding the Taking, to the extent such
restoration may be accomplished with the available net proceeds of the award or
payment to Landlord in connection with the taking. During the period of
restoration by Landlord, if the Taking or such restoration shall cause a
material adverse impact on Tenant's business at Demised Premises, Basic Annual
Rent and additional rent shall be abated and adjusted in an equitable fashion.
Upon completion of the restoration, basic Annual Rent and additional rent shall
also be abated and adjusted in such manner as shall be just and equitable. In
the event that Landlord shall fail to commence such restoration as hereinabove
required, or if such restoration shall not be completed within eighteen (18)
months from and after the date of transfer of possession in connection with
Taking, then, in either such event, Tenant shall have the right, as its
exclusive remedy, to terminate this Lease by notice to Landlord, such notice to
specify the effective date of termination.
SECTION 23.4 Whether or not this Lease shall be terminated pursuant to the
preceding Sections of this Article, Tenant shall have the right in connection
with any Taking to assert all claims available to it for loss of leasehold
improvements, trade fixtures and equipment, and such other terms of loss or
damage as Tenant shall suffer as a result of the Taking with respect to which
Tenant shall, from time to time under applicable law, be permitted to make an
independent claim, provided that such claim by Tenant will not reduce the award
or payment to Landlord in connection with the Taking. Notwithstanding the
foregoing, it is understood and agreed that Tenant shall have not claim against
the Taking authority or against the Landlord for the loss of the value of any
remaining
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portion of Tenant's leasehold hereunder, and Tenant hereby assigns to Landlord
all rights and claims with respect to the loss of leasehold value.
SECTION 23.5 Notwithstanding any provision of this Article, in no event
shall Landlord be obligated to expend, in connection with repair or restoration
of the Demised Premises pursuant to this Article, any amount in excess of the
award or payment in connection with the Taking. In the event that such award or
payment shall be insufficient for the repair or restoration or in the event that
Landlord's mortgagee shall apply all or any portion of such award of payment to
the reduction of the indebtedness secured by such mortgage, then to the extent
of such unavailable award or payment, Landlord shall be excused from the
performance of repair or restoration work hereunder.
ARTICLE XXIV
NOTICES
SECTION 24.1 All notices, demands and request, required or permitted to be
given or made under any provision of this Lease, shall be in writing and shall
be given or made by overnight courier which obtains delivery receipts (e.g.
Federal Express) or by requested, postage prepaid, addressed as follows or to
such other addresses as either party may from time to time designate by written
notice given to the other:
(a) If to Tenant, addressed to it at:
JESSE Y. SAYEGH
25 Kinnelon Road
Kinnelon, New Jersey 07405
with a copy to:
BUKLAD & BUKLAD
78 So. Orange Ave.
South Orange, N.J. 07079
(b) If to Landlord, addressed to it at:
WESTWOOD OAKS, INC.
816 Deal Road
Ocean, New Jersey 07712
with a copy to:
Wilf & Silverman, Esqs.
820 Morris Turnpike
Short Hills, New Jersey 07078
Any such notice, demand or request shall be deemed given or made on the next
business day after delivery to the overnight courier and, if mailed, on the
third (3rd) business day after the date so mailed. Notwithstanding the
foregoing, in the case of the emergency referred to in Section 20.4 the notice
to be given under either of said Sections may be given, if practicable, by
telephone or by telegram or cablegram, sent to Landlord or Tenant at its
respective address or addresses as aforesaid, and such notice shall be deemed
given on the day on which the telephone call is made or the day on which the
telegram or cablegram is sent, as applicable.
ARTICLE XXV
HOLDOVER
SECTION 25.1 Notwithstanding any law, statute, custom or practice to the
contrary, in the event Tenant shall hold over after the date herein originally
specified for the termination of the term of this Lease, except under an
extension of the term pursuant
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to Section 2.5 of this Lease, or in the event that Tenant holds over after the
date for termination of the term hereof specified in any notice of termination
given by Tenant in the exercise of any right which it may have hereunder or by
law, the, and in either of such events, Tenant shall be a monthly tenant only,
at a monthly rent which shall be one and one-half (1 1/2) times the Basic Annual
Rent, and additional rent, if any, that was payable hereunder for the last full
Lease Year prior to the commencement of such monthly tenancy, and such monthly
rent shall be payable by Tenant to Landlord in advance on the first day of each
month of such monthly tenancy, but such monthly tenancy shall otherwise be upon
and subject to the provisions of this Lease insofar as the same maybe made
applicable to such a tenancy.
ARTICLE XXVI
DEFINITION OF LANDLORD
SECTION 26.1 The term "Landlord", whenever used in this Lease, shall mean
the owner at the time of Landlord's interest in this Lease or the mortgagee in
possession for the time being of the Demised Premises. Each owner from time to
time of the Landlord's interest in this Lease shall be liable with respect to
the covenants and other obligations of landlord hereunder (which covenants and
obligations shall run with the land of which the Demised Premises form a part)
only so long as such owner shall be the owner of the landlord's interest in this
lease, and such owner shall not be so liable after any sale or other conveyance
or transfer of landlord's interest in this Lease (except for any liability
relating to any breach, default, act or omission on the part of Landlord
occurring prior to such sale or other conveyance or transfer). Any sale or other
conveyance or transfer of the Demised Premises or of the Landlord's interest in
this Lease shall be subject to this Lease and to the covenants and provisions
hereof on Landlord's part to be performed or observed, and in the event of a
sale, or other conveyance or transfer thereof, the purchaser, grantee or
transferee shall be deemed to have assumed and agreed to perform and carry out
the covenants and obligations of Landlord hereunder during the period of such
purchaser's, grantee's or transferee's ownership of Landlord's interest.
Notwithstanding the foregoing, the original Landlord named herein shall not, in
any event, be relieved of any of its obligations to perform and complete the
construction, if any, to be performed by said Landlord as set forth in Section
1.3 hereof, with respect to the Demised premises and the Shopping Center, such
obligations to perform and complete construction being a personal covenant of
the original Landlord named herein.
SECTION 26.2 It is understood and agreed that, notwithstanding any other
provision of this Lease, landlord's liability under this Lease with respect to
monetary claims by tenant arising hereunder, or other claims by Tenant hereunder
which may be converted into monetary claims, shall be limited to Landlord's
equity interest in the Shopping Center and neither Landlord nor any stockholder,
partner or principal of landlord shall have any personal liability to Tenant
arising hereunder. The foregoing provisions shall be without any exception
whatsoever, but the foregoing shall not prevent Tenant form exercising or
enforcing any rights it may have for injunctive relief or specific performance.
As a result of any such injunctive relief or specific performance, Landlord
shall not be required to expend an amount greater than Landlord's said equity
interest in the Shopping Center and, in lieu of such expenditure, landlord may
permit Tenant to obtain a judgment lien or other lien upon such equity interest
to the extent of the cost (not in excess of landlord's said equity interest) of
performing the obligation which is the subject of such injunctive relief or
specific performance decree or order.
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ARTICLE XXVII
MISCELLANEOUS PROVISIONS
SECTION 27.1 In any case where either party hereto is required hereunder
to do any act, a delay in the performance of such act caused by or resulting
from act of God, riot, civil commotion, strikes, lock-out, acts, orders or
regulations of governmental authority, acts or failure to act of the other
party, fire, tornado, windstorm, adverse weather conditions or other causes
beyond such party's reasonable control (collectively :Force Majeure"), shall not
be counted in determining the time for completion of the performance of such
act, whether such be herein designated as a specific date, a fixed period of
time or a reasonable time. It is expressly understood and agreed, however, that
the provisions of the preceding sentence shall not apply to, or operate to
postpone, defer or extend or otherwise affect Tenant's obligation to make
payments of Basic Annual Rent and additional rent pursuant to this Lease.
SECTION 27.2 If any provision of this Lease shall be determined by a court
of competent jurisdiction to be invalid, such determination shall not affect any
of the other provisions of this Lease and such other provisions shall remain in
force and effect. If any provision of this Lease shall be capable of two
constructions, one of which would render the provision valid and the other of
which would render it invalid, then such provision shall have the construction
and meaning which would render it valid.
SECTION 27.3 If, at any time after the commencement of the term hereof,
Tenant or landlord shall make written request therefor, Landlord or Tenant
shall, within seven (7) days after such request, deliver to the other a written
instrument, duly executed by Landlord or Tenant, certifying, if such be the
case: (i) that this Lease is in force and effect; (ii) that this Lease has not
been modified, amended or supplemented or specifying the modification, amendment
or supplement; (iii) that Tenant or Landlord, as the case may be, is not in
default hereunder, or if it is then in default, specifying the nature of the
default and whether or not the time period for curing the same has expired; (iv)
the date or dates through which Basic Annual Rent and additional rent have been
paid; and (v) that there are not offsets or deductions against Basic Annual Rent
or additional rent, or if any are claimed, specifying the amount thereof and the
basis therefor.
SECTION 27.4 If at any time hereafter a dispute shall arise between
landlord and Tenant with respect to any amount of money to be paid by either if
them to the other under any of the provisions of this Lease, the party against
whom the obligation shall be asserted shall have the right to make payment
"under protest". If such party shall exercise such right, such payment shall not
be deemed a voluntary payment but there shall be deemed reserved to such party
the right to institute an appropriate action or proceeding against the other for
recovery of the whole or such part of said sum as such party shall claim it was
not obligated to pay hereunder. If at any time a dispute shall arise between
Landlord and Tenant as to any act to be done or work to be performed by either
of them in or about the Demised Premises under any of the provisions of this
lease, the party against whom the obligations to do such act or perform such
work shall be asserted, may do such act or perform such work and pay the cost
thereof "under protest". If such party shall do so the performance of such act
or work and payment of such cost shall not be deemed a voluntary performance or
voluntary payment, but there shall be deemed reserved to such party the right to
institute an appropriate action or proceeding against the other for recovery of
the whole or such cost or such part thereof as shall represent the cost of
performing the act or work which such party shall claim it was not obligated to
perform hereunder, plus interest at the Lease Interest Rate.
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SECTION 27.5 Wherever in this Lease provision is made for the doing of any
act by either party hereto, it shall be deemed that said act shall be done by
such party at such party's own cost and expense, except as may be herein
otherwise expressly provided. Each of the parties shall, whenever necessary,
join with and cooperate with the other in any necessary applications for
governmental permits or approvals.
SECTION 27.6 This Lease, and the rights and obligations of the parties
hereto, shall be interpreted and construed in accordance with the laws of the
state or commonwealth in which the Demised Premises are located.
SECTION 27.7 Upon request of either party, Landlord and Tenant each hereby
agrees to execute and deliver to the other duplicate originals with signatures
duly acknowledged, of a memorandum of this Lease, and, upon request of either
party, a memorandum of any modification of this Lease. Such memorandum shall be
in recordable form and shall contain such information as shall be necessary in
the reasonable opinion of counsel for the parties, neither to be unreasonable,
to give record notice of the provisions of this Lease or said modification;
provided, however, in no event shall such memorandum set forth the Basic Annual
Rent or additional rent payable hereunder. Notwithstanding the foregoing, it is
understood and agreed that no memorandum of this Lease shall be recorded by
Landlord or Tenant prior to the occurrence of the Lease Commencement Date.
SECTION 27.8 Landlord and Tenant each hereby represents that Landlord
dealt with no Broker in connection with the negotiation, execution and delivery
of this Lease Agreement, and Tenant dealt exclusively with Wm. A. White/Grubb &
Ellis Inc. Both Landlord and Tenant each acknowledge that any broker fees in
connection with this Lease Agreement are the sole responsibility of Tenant.
SECTION 27.9 The term "Lease Interest Rate" as used in this Lease shall be
deemed to refer to the prime rate of interest from time to time being charged by
Citibank N.A. of New York, New York to its most creditworthy customers, plus one
(1%) percent.
SECTION 27.10 All trade fixtures and equipment furnished or installed by
Tenant or subtenants, concessionaires or licensees in the Demised Premises,
regardless of the manner or mode of attachment thereof, shall be and remain the
property of Tenant or its subtenants, concessionaires or licensees, and may be
removed by Tenant or its subtenants, concessionaires or licensees at any time
during the term of this Lease. Such trade fixtures and equipment shall be
removed not later than fifteen (15) days after the expiration date or sooner
termination date of the term hereof. any such trade fixtures or equipment
remaining in the Demised Premises after the expiration of the said fifteen (15)
day period may be removed by Landlord at the cost and expense of Tenant,
including but not limited to, any costs of storage or warehousing incurred by
Landlord. Notwithstanding the foregoing provisions of this Section 27.10 or the
provisions of Section 17.3, in no event shall Tenant have the right to remove
the heating, ventilating, air-conditioning, plumbing or electrical systems
servicing the Demised Premises, or the lighting fixtures or ceiling therein.
SECTION 27.11 All Schedules and Riders attached hereto constitute part of
this Lease.
SECTION 27.12 All monetary payments by Tenant to Landlord under this
Lease, including those required by Articles IV and V shall constitute additional
rent whether or not so designated herein. Landlord shall have with respect to
such monetary payments, all of rights and remedies as are otherwise provided to
Landlord herein or at law with respect to the payment of Basic Annual Rent.
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SECTION 27.13 The rules and regulations annexed hereto shall be deemed
incorporated in and part of this Lease and Tenant shall be bound thereby.
Landlord shall have the right, form time to time during the term of this Lease,
to promulgate such other or additional rules and regulations or to modify or
amend the rules and regulations as Landlord shall, in its sole discretion deem
appropriate and necessary for the operation of the Shopping Center. Landlord
shall have no liability or obligation to Tenant in the event that Landlord shall
elect not to enforce any rule or regulation against any other Tenant of the
Shopping Center.
SECTION 27.14 Intentionally omitted.
SECTION 27.15 The submission of this Lease by Landlord to Tenant shall not
constitute an offer to Lease, and Tenant shall not have any claim against
Landlord or any rights with respect to the Demised Premises or the Shopping
Center unless and until this Lease is signed by Landlord and Tenant.
ARTICLE XXVIII
SUCCESSORS AND ASSIGNS
SECTION 28.1 It is covenanted and agreed by and between the parties hereto
that the covenants and agreements herein contained shall bind and inure to the
benefit of Landlord, its successors and assigns, and Tenant, its successors and
assigns, subject to the provisions of this Lease. The words "Landlord" and
"Tenant" and the pronouns referring thereto, as used in this Lease, shall mean,
where the context requires or permits, the person named herein as Landlord and
Tenant and their respective successors, assigns, and if the Landlord or Tenant
be an individual or individuals, the heirs and personal representatives of such
party, whether singular or plural and irrespective of gender.
ARTICLE XXIX
CAPTIONS
SECTION 29.1 The captions set forth below the Article number or elsewhere
in this Lease are for convenience of reference only and in no way define, limit
or describe the meaning, scope or intention of this Lease or of any of its
provisions or in any way affect this Lease.
ARTICLE XXX
ENTIRE AGREEMENT
SECTION 30.1 This instrument, together with the Schedules and Riders
attached hereto (all of which shall be deemed part of this Lease), contains the
entire agreement and understanding between the parties hereto with respect to
the lease of the Demised Premises to Tenant. No statements, representations,
prior agreement or understanding not herein set forth shall have any force or
effect unless appropriate amendment is executed by all parties hereto. This
Lease shall become effective only upon execution hereof by both parties hereto
and delivery of a fully executed original hereof to Tenant.
ARTICLE XXXI
CONTINGENCIES
SECTION 31.1 Notwithstanding any other provision of this Lease, this Lease
and the obligations and responsibilities of Landlord hereunder are conditional
and contingent upon Landlord's obtaining of all governmental permits and
approvals, including, but
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not limited to, a building permit, necessary for construction of the Demised
Premises and Shopping Center.
SECTION 31.2 Landlord agrees to use due diligence to satisfy the
contingencies set forth in Section 31.1 hereof. In the event that Landlord shall
not have satisfied such contingencies and so notified Tenant, within days from
and after the date of this Lease, Landlord and Tenant shall have the right, as
their exclusive remedy, by notice to the other, to cancel and terminate this
Lease in which event, neither party shall have any further liability or
obligation to the other.
IN WITNESS WHEREOF the parties hereto have duly executed this instrument
as of the date first above written, which date shall be deemed to be and shall
be referred to as the date of this Lease.
WITNESS OR ATTEST: WESTWOOD OAKS, INC. - LANDLORD
/s/ Illegible BY: /s/ LEONARD A. WILF
- --------------------------- -------------------------------
/s/ Illegible BY: /s/ JESSE Y. SAYEGH
- --------------------------- -------------------------------
JESSE Y. SAYEGH - TENANT
BUKLAD & BUKLAD
78 So. Orange Ave.
South Orange, NJ 07079
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RIDER LC
Subject to Tenant's ability to obtain all necessary governmental
approvals, Landlord shall deliver the herein described building with the
following work completed:
1. All footing foundations and structural steel framing including mezzanine
projection steel installed on concrete block footings as shown on plans
prepared by John Schimenti A.I.A. and attached hereto.
2. All exterior masonry walls will be painted 8" x 8" scored block with
accent patterns as indicated on the construction drawings.
3. Building shall have a single ply roof system with rigid insulation,
exterior roof drains, and a ten (10) year guaranty from the manufacturer.
4. There shall be a 3' high parapet with flashing and cant strip around the
building with copings.
5. Store front - Construction at the front of the building with glass block
as delineated in the schematic elevation drawing, except Tenant shall pay
to the Landlord the difference in the cost of the glass block vs. the
aforesaid 8" x 8' square block.
6. HVAC - Provide and install HVAC units on roof curbs as per plan (capacity
to meet boca code) with return air ducts at screens. all other work
including wiring, supply air ducts, dampers, registers and thermostats are
Tenants responsibility, as is the cost of additional capacity in excess of
the tonnage required by code.
7. Water supply to meter room - Supply to be sufficient for sprinkler and
domestic water. Provide back-flow devices if required.
8. Structural steel for roof and steel stairs and dunnage for HVAC system -
Roof steel to have outriggers for marquee. All metal decking.
9. Fireproofing - If required on the structural framing only, any other
fireproofing as may be required by any codes shall be the responsibility
of the Tenant.
10. 1600 amp electrical service to meter room with panel and meter. Subject to
the approval of J.C.P.& L. based on electrical load information to be
provided by Tenant. Should J.C.P.& L. deny said service, then landlord and
Tenant shall revise their electrical specifications based on the
availability of service to be provided by J.C.P.& L.
11. All landscaping, exterior parking lot lighting, concrete sidewalks, and
one (1) hose bib as per drawing. All exterior doors, hollow metal or glass
with hardware.
12. Pylon Sign - Landlord shall sign any documents Tenant shall require in
order to submit a permit for the installation of Tenant's signage on the
existing shopping center pylon.
13. Sanitary Piping - Landlord shall bring all sanitary lines to within five
(5') feet of the building. Should Tenant's building require a house trap,
same shall be Tenant's responsibility to install, however Landlord shall
credit Tenant the sum of $1,500.00 should the house trap be required.
14. Borings - Roof access door with stationary ladder.
<PAGE>
15. Roof drains to exterior dry wells or sewer, including all piping.
16. Glass blocks at entranceway with landlord to be reimbursed the difference
in cost between said glass block and the cost of the 8" x 8" scored block.
17. Exterior areaways and drainage - All exterior railings and handrails as
requried by either BOCA or Handicap Code, any other railings shall be
Tenant's responsibility.
18. Provide and install sprinkler riser valve in sprinkler room with flange
connection ready for Tenants build out as per construction drawing.
19. Fire Stopping - Provide and install same as it relates to Landlord's work
only. Any additional fire stopping based on partitioning plan is Tenant's
responsibility.
20. Gas service, meter and piping to the HVAC units on the roof.
21. Excavate rough grading as indicated on construction drawings to within 2"
of the sub floor height.
22. Remove any hazardous soil which may be discovered during excavation.
Notwithstanding anything to the contrary contained in this work letter or
the attached Lease. it is understood that the Landlord shall be responsible for
obtaining all necessary Planning Board approvals including county approvals,
D.O.T. approvals, including approvals form the Ocean County Soils Conservation
Bureau as they may apply to the above referenced building. Unless specifically
stated above, or in the Lease, all work other than Items 1 through 22 shall be
the responsibility of the Tenant and Tenant shall be responsible for filing
whatever paperwork, submissions and review fees may be required in order to
procure said permit and certificate of occupancy.
WITNESS: WESTWOOD OAKS, INC.
BY: /s/ LEONARD A. WILF
- ------------------------ ----------------------------
Vice President
WITNESS: RUSTIC BERN CORP.
BY: /s/ Illegible
- ------------------------ ----------------------------
Vice President
BY: /s/ JESSE Y. SAYEGH
----------------------------
Jesse Sayegh, Tenant
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
BY AND AMONG
CLEARVIEW CINEMA GROUP, ET AL.
AND
THE PROVIDENT BANK,
Agent and Lender
dated as of
December 12, 1997
<PAGE>
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (as
hereinafter defined) ("First Amendment") dated as of December 12, 1997, by and
among CLEARVIEW CINEMA GROUP, INC., a Delaware corporation, (Holdings"),
CLEARVIEW THEATRE GROUP, INC., a New Jersey corporation, CCC ALLWOOD CINEMA
CORP., a Delaware corporation, CCC B.C. REALTY CORP., a Delaware corporation,
CCC BAYONNE CINEMA CORP., a Delaware corporation, CCC BEDFORD CINEMA CORP., a
Delaware corporation, CCC BELLEVUE CINEMA CORP., a Delaware corporation, CCC
BERGENFIELD CINEMA CORP., a Delaware corporation, CCC BRONXVILLE CINEMA CORP., a
Delaware corporation, CCC CEDAR GROVE CINEMA CORP., a Delaware corporation, CCC
CHESTER TWIN CINEMA CORPORATION, a New Jersey corporation, CCC CINEMA 304 CORP.,
a Delaware corporation, CCC CLOSTER CINEMA CORP., a Delaware corporation, CCC
EDISON CINEMA CORP., a Delaware corporation, CCC EMERSON CINEMA CORP., a
Delaware corporation, CCC GRAND AVENUE CINEMA CORP., a Delaware corporation, CCC
HERRICKS CINEMA CORP., a Delaware corporation, CCC KIN MALL CINEMA CORP., a
Delaware corporation, CCC KISCO CINEMA CORP., a Delaware corporation, CCC
LARCHMONT CINEMA CORP., a Delaware corporation, CCC MADISON TRIPLE CINEMA CORP.,
a New Jersey corporation, CCC MAMARONECK CINEMA CORP., a Delaware corporation,
CCC MANASQUAN CINEMA CORPORATION, a New Jersey corporation, CCC MANSFIELD CINEMA
CORP., a Delaware corporation, CCC MARBORO CINEMA CORP., a Delaware corporation,
CCC MIDDLEBROOK CINEMA CORP., a Delaware corporation, CCC NEW CITY CINEMA CORP.,
a Delaware corporation, CCC PARSIPPANY CINEMA CORP., a Delaware corporation, CCC
PORT WASHINGTON CINEMA CORP., a Delaware corporation, CCC ROSLYN CINEMA CORP., a
Delaware corporation, CCC SUCCASUNNA CINEMA CORP., a Delaware corporation, CCC
SUMMIT CINEMA CORP. (formerly known as 343-349 Springfield Avenue Corp.), a New
Jersey corporation, CCC TENAFLY CINEMA CORP., a Delaware corporation, CCC
WASHINGTON CINEMA CORP., a Delaware corporation, CCC WAYNE CINEMA CORP., a
Delaware corporation, and CCC WOODBRIDGE CINEMA CORP., a Delaware corporation,
(hereinafter, together with their successors in title and assigns called
"Borrowers" and each of which is a "Borrower") and THE PROVIDENT BANK, an Ohio
banking corporation ("Agent") and various Lenders as set forth in the Credit
Agreement.
PRELIMINARY STATEMENT
WHEREAS, Borrowers, Agent and Lenders have entered into an Amended and
Restated Credit Agreement dated as of September 12, 1997 ("Credit Agreement");
and
<PAGE>
2
WHEREAS, Borrowers have requested that Lenders make available to Borrowers
an additional Six Million and 00/Dollars ($6,000,000.00) in principal amount of
Term Loan B; and
WHEREAS, Borrower and Lender now wish to amend the Credit Agreement and
related documents in accordance with the terms and provisions hereof.
NOW, THEREFORE, the parties hereto agree to supplement and amend the
Credit Agreement upon such terms and conditions as follows:
1. Capitalized Terms. All capitalized terms used herein shall have the
meanings assigned to them in the Credit Agreement unless the context hereof
requires otherwise. Any definitions as capitalized terms set forth herein shall
be deemed incorporated into the Credit Agreement as amended by this First
Amendment.
2. Definitions; Schedules; Exhibits. (a) The following definitions
contained in Section 1.2 of the Credit Agreement are hereby amended in their
entirety to read as follows:
"Requisite Lenders" means at such times as there are any Loans
outstanding, the Lenders whose aggregate Pro Rata Shares of the
outstanding Loans are greater than or equal to sixty-six and two-thirds
percent (66 2/3%) of the aggregate amount of the outstanding Loans, and at
all other times, the Lenders whose aggregate Credit Commitments are
greater than or equal to sixty-six and two-thirds percent (66 2/3%) of the
aggregate Credit Commitments of all the Lenders; provided, however, that
so long as there are less than three Lenders, Requisite Lenders shall mean
all of the Lenders.
"Term Loan B Commitment" shall initially mean Twenty-Three Million and
00/100 Dollars ($23,000,000.00) plus any amounts available pursuant to
Section 2.2(c) hereof.
(b) Borrowers acknowledge that immediately following the execution
of this First Amendment, The Provident Bank intended to assign to The Bank of
New York an aggregate amount of the Loans and Credit Commitments equal to Ten
Million and 00/100 Dollars ($10,000,000.00). Immediately upon the effectiveness
of such assignment, Schedule 1 to the Credit Agreement is hereby amended in its
entirety to read as Schedule 1 to this First Amendment.
(c) Exhibit K-3 of the Credit Agreement is hereby amended in its
entirety by Exhibit K-3 to this First Amendment.
<PAGE>
3
3. Making the Term Loan B. Section 2.2(c) of the Credit Agreement is
hereby amended to in its entirety to read as follows:
"(c) Term Loan B. Subject to the terms and conditions of this
Agreement and in reliance upon the representation and warranties of each
Borrower herein set forth, each Lender severally agrees to lend to
Borrowers its Participation Percentage of the Term Loan B. The aggregate
amount of Term Loan B shall be Twenty-Three Million and 00/100 Dollars
($23,000,000.00). During the First Loan Year, amounts borrowed under this
subsection 2.2(c) and repaid or prepaid may be reborrowed subject to the
conditions precedent set forth in Sections 4.1 and 4.2 hereof. During the
Second Loan Year and thereafter, amounts borrowed under this subsection
2.2(c) and repaid or prepaid may not be reborrowed; provided, however,
that if such borrowing is deemed to be made only as a result of the
issuances of a Letter of Credit and no Reimbursement Obligation has arisen
with respect to such Letter of Credit, the amount of such Letter of Credit
may be borrowed upon cancellation or expiration of the Letter of Credit."
4. Debt to EBITDA. Lender hereby waives compliance for Borrowers with the
covenant regarding the ratio of Debt to EBITDA for the Reference Period ending
December 31, 1997, so long as the ratio for such Reference Period does not
exceed 5.0 to 1.0
This waiver applies only to Section 7.4 of the Credit Agreement for the
period referenced above and does not otherwise modify or waive any other
covenant or agreement contained in the Credit Agreement not otherwise modified
by this First Amendment.
5. Reaffirmation of Covenants, Warranties and Representations. Borrower
hereby agrees and covenants that all representations and warranties in the
Credit Agreement, including without limitation all of those warranties and
representations set forth in Article 5, are true and accurate as of the date
hereof. Borrower further reaffirms all covenants in the Credit Agreement, and
reaffirm each of the affirmative covenants set forth in Article 6 and financial
covenants set forth in Article 7 and negative covenants set forth in Article 8
thereof, as if fully set forth herein, except to the extent modified by this
First Amendment.
6. Conditions Precedent to Closing of First Amendment. On or prior to the
closing of the First Amendment (hereinafter the "First Amendment Closing Date"),
each of the following conditions precedent shall have been satisfied:
(a) Proof of Corporate Authority. Agent shall have received from
Borrower copies, certified by a duly authorized officer to be true and
complete on and as of the First Amendment Closing Date, of records of all
action taken by Borrower to authorize (i) the execution and delivery of
this First Amendment and all other certificates, documents and
<PAGE>
4
instruments to which it is or is to become a party as contemplated or
required by this First Amendment, and (ii) its performance of all of its
obligations under each of such documents.
(b) Documents. Each of the documents to be executed and delivered at
the First Amendment Closing and all other certificates, documents and
instruments to be executed in connection herewith shall have been duly and
properly authorized, executed and delivered by Borrower and shall be in
full force and effect on and as of the First Amendment Closing Date.
(c) Legality of Transactions. No change in applicable law shall have
occurred as a consequence of which it shall have become and continue to be
unlawful (i) for Agent and each Lender to perform any of its agreements or
obligations under any of the Loan Documents, or (ii) for Borrower to
perform any of its agreements or obligations under any of the Loan
Documents.
(d) Performance, Etc. Except as set forth herein, Borrower shall have
duly and properly performed, complied with and observed each of its
covenants, agreements and obligations contained in each of the Loan
Documents. Except as set forth herein, no event shall have occurred on or
prior to the First Amendment Closing Date, and no condition shall exist on
the First Amendment Closing Date, which constitutes a Default or an Event
of Default.
(e) Proceedings and Documents. All corporate, governmental and other
proceedings in connection with the transactions contemplated on the First
Amendment Closing Date, each of the other Loan Documents and all
instruments and documents incidental thereto shall be in form and substance
reasonably satisfactory to Provident.
(f) Changes; None Adverse. Since the date of the most recent balance
sheets of Borrower delivered to Provident, no changes shall have occurred
in the assets, liabilities, financial condition, business, operations or
prospects of Borrower which, individually or in the aggregate, are
material to Borrower, and Provident shall have completed such review of
the status of all current and pending legal issues as Agent shall deem
necessary or appropriate.
7. Miscellaneous. (a) Borrower shall reimburse Agent for all fees and
disbursements of legal counsel to Agent which shall have been incurred by Agent
in connection with the preparation, negotiation, review, execution and delivery
of this First Amendment and the handling of any other matters incidental hereto.
(b) All of the terms, conditions and provisions of the Agreement not
herein modified shall remain in full force and effect. In the event a
term, condition or provision of
<PAGE>
5
the Agreement conflicts with a term, condition or provision of this
First Amendment, the latter shall govern.
(c) This First Amendment shall be governed by and shall be construed
and interpreted in accordance with the laws of the State of Ohio.
(d) This First Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
(e) This First Amendment may be executed in several counterparts, each
of which shall constitute an original, but all which together shall
constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
or on behalf of each of the parties as of the day and in the year first above
written.
CLEARVIEW CINEMA GROUP, INC.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CLEARVIEW THEATRE GROUP, INC.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC ALLWOOD CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC B.C. REALTY CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC BAYONNE CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
<PAGE>
CCC BEDFORD CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC BELLEVUE CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC BERGENFIELD CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC BRONXVILLE CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC CEDAR GROVE CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC CHESTER TWIN CINEMA CORPORATION
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
<PAGE>
CCC CINEMA 304 CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC CLOSTER CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC EDISON CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC EMERSON CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC GRAND AVENUE CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC HERRICKS CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
<PAGE>
CCC KIN MALL CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC KISCO CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC LARCHMONT CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC MADISON TRIPLE CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC MAMARONECK CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC MANASQUAN CINEMA CORPORATION
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
<PAGE>
CCC MANSFIELD CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC MARBORO CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC MIDDLEBROOK CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC NEW CITY CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC PARSIPPANY CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC PORT WASHINGTON CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
<PAGE>
CCC ROSLYN CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC SUCCASUNNA CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC SUMMIT CINEMA CORP. (formerly known
as 343-349 Springfield Avenue Corp.)
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC TENAFLY CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC WASHINGTON CINEMA CORP.
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
CCC WAYNE CINEMA CORP
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
<PAGE>
CCC WOODBRIDGE CINEMA CORP
By: /s/ A. Dale Mayo
------------------------
Name: A. Dale Mayo
Title: President
THE LENDERS:
THE PROVIDENT BANK
By:/s/ Christopher B Gribble
---------------------------
Name: Christopher B. Gribble
Title: Vice President
AGENT:
THE PROVIDENT BANK, as Agent
By:/s/ Christopher B Gribble
---------------------------
Name: Christopher B. Gribble
Title: Vice President
<PAGE>
List of Exhibits
Schedule 1 - Participants
Schedule 3.1 - Leasehold Interests
Exhibit K-3 - Form of Amended and Restated Term Note B
[Schedules and exhibits will be provided upon request.]
