DRAFT 01/30/98
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
-------------
Date of Report (Date of earliest event reported): November 21, 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)
97 Main Street 07928
Chatham, New Jersey (Zip code)
(Address of principal executive
offices)
Registrant's telephone number,
including area code: (973) 377-4646
<PAGE>
The following amends and restates in its entirety Item 7 of the Form
8-K of Clearview Cinema Group, Inc. which reported an event dated November 21,
1997:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Nelson Ferman Theatres at Parsippany and Roxbury
Independent Auditors' Report
Combined Balance Sheet as of September 30, 1997
Combined Statements of Income and Changes in Retained Earnings for
the Year Ended December 31, 1996 and the Nine Months Ended September 30,
1997
Combined Statements of Cash Flows for the Year Ended December 31, 1996 and
the Nine Months Ended September 30, 1997
Notes to Combined Financial Statements
(b) PRO FORMA FINANCIAL INFORMATION.
Clearview Cinema Group, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 1997 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 1997 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1996 (Unaudited)
Notes to Pro Forma Condensed Financial Statements
(c) EXHIBITS.
2.01 Asset Purchase Agreement dated as of November 21, 1997 by and
among Clearview Cinema Group, Inc., CCC Succasunna Cinema Corp.,
CCC Parsippany Cinema Corp., F&N Cinema, Inc., Roxbury Cinema,
Inc., John Nelson, Pamela Ferman and Seth Ferman (previously
filed)
2.02 Merger Agreement dated as of November 21, 1997 by and among
Clearview Cinema Group, Inc., CCC Mansfield Cinema Corp., Warren
County Cinemas, Inc., John Nelson, Pamela Ferman and Seth Ferman
(previously filed)
9.01 Voting Trust Agreement dated as of November 21, 1997 by and
among F&N Cinema, Inc., Roxbury Cinema, Inc. and A. Dale Mayo,
as Trustee (previously filed)
10.01 Subordinated Promissory Note dated as of November 21, 1997 in
the amount of $4.0 million (previously filed)
10.02 Subordinated Promissory Note dated as of November 21, 1997 in
the amount of $2.0 million (previously filed)
10.03 Registration Rights Agreement dated as of November 21, 1997 by
and among Clearview Cinema Group, Inc., F&N Cinema, Inc. and
Roxbury Cinema, Inc. (previously filed)
- 2 -
<PAGE>
10.04 Assignment by F&N Cinema, Inc. dated November 7, 1997 assigning
to CCC Parsipanny Cinema Corp. that certain Ground Lease between
The Trustees of Net Realty Holding Trust and F&N Cinema, Inc.
dated May 12, 1993, as amended by the First Amendment to Ground
Lease dated July 11, 1994, and as further amended by Second
Amendment to Ground Lease dated December 19, 1994 (filed
herewith)
10.05 Assignment, Acceptance of Assignment and Consent to Assignment
of Lease between Roxbury Cinema Inc. and CCC Succasunna Cinema
Corp., dated November 21, 1997, assigning that certain Lease
between First Roxbury Company and Roxbury Cinema Inc. dated May
24, 1989, as amended by Lease Modification Agreement dated May
2, 1990, and as further amended by Second Lease Modification
Agreement dated December 20, 1994 (filed herewith)
- 3 -
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors of
Clearview Cinema Group, Inc.
We have audited the combined balance sheet of the Nelson Ferman
Theaters at Parsippany and Roxbury (the "NF Theaters"), as of September 30, 1997
and the related combined statements of income and changes in retained earnings
and cash flows for the nine months ended September 30, 1997 and the year ended
December 31, 1996. These combined financial statements are the responsibility of
the management of Nelson Ferman, Inc. Our responsibility is to express an
opinion on these combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the combined financials are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of the NF
Theaters at September 30, 1997, and the results of their operations and their
cash flows for of the nine months ended September 30, 1997 and the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
WISS & COMPANY, LLP
Woodbridge, New Jersey
October 22, 1997
- 4 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
CURRENT ASSETS:
<S> <C> <C>
Cash $37,017
Other current assets 84,415
------
Total current assets $ 121,432
PROPERTY AND EQUIPMENT, LESS
ACCUMULATED DEPRECIATION 3,828,748
OTHER ASSETS:
Due from affiliate 125,488
Other assets 36,403 161,891
------ -------
$ 4,112,071
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 302,917
Current portion of deferred income 100,000
Accounts payable and accrued expenses 723,674
-------
Total current liabilities $ 1,126,591
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 1,633,333
Deferred income, net of current portion 625,000 2,258,333
-------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock 504,000
Additional paid-in capital 27,000
Retained earnings 196,147
-------
Total Stockholders' Equity
727,147
-------
$ 4,112,071
===========
See accompanying notes to combined financial statements.
</TABLE>
- 5 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
COMBINED STATEMENTS OF INCOME
AND CHANGES IN RETAINED EARNINGS
<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
December 31, September 30,
1996 1997
----------- -------------
THEATER REVENUES:
<S> <C> <C>
Box office $ 4,812,495 $ 4,015,770
Concession 1,129,729 989,484
Other 39,167 35,979
------ ------
5,981,391 5,041,233
--------- ---------
OPERATING EXPENSES:
Film rental and booking fees 2,373,986 1,925,740
Theater operating expenses 1,848,016 1,354,756
General and administrative expenses 1,103,057 819,520
Depreciation and amortization 403,075 298,980
------- -------
5,728,134 4,398,996
--------- ---------
OPERATING INCOME 253,257 642,237
INTEREST EXPENSE 250,156 188,963
----------- -----------
NET INCOME 3,101 453,274
RETAINED EARNINGS (DEFICIT),
BEGINNING OF PERIOD (260,228) (257,127)
-------- --------
RETAINED EARNINGS (DEFICIT),
END OF PERIOD $ (257,127) $ 196,147
=========== ===========
See accompanying notes to combined financial statements.
</TABLE>
- 6 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
December 31, September 30,
1996 1997
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 3,101 $ 453,274
Adjustments to reconcile net income
(loss) to net cash flows from
operating activities:
Depreciation and amortization 403,075 298,980
Recognition of deferred revenue (100,000) (75,000)
Amortization of accrued rent 25,146 18,860
Changes in operating assets and
liabilities:
Other current assets (28,286) 32,466
Other assets 10,000 12,000
Accounts payable and accrued
expenses 19,681 (157,215)
--------- ---------
Net cash flows from operating
activities 332,717 583,365
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (114,423) --
Advances to parent and affiliate (89,878) (494,209)
--------- ---------
Net cash flows from investing
activities (204,301) (494,209)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Payments on long-term debt (156,604) (151,250)
--------- ---------
NET CHANGE IN CASH (28,188) (62,094)
CASH, BEGINNING OF PERIOD 127,299 99,111
------- ------
CASH, END OF PERIOD $ 99,111 $ 37,017
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 250,156 $ 188,963
========= =========
Income taxes paid $ -- $ --
========= =========
See accompanying notes to combined financial statements.
</TABLE>
- 7 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 1--NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF COMBINATION - The combined financial statements include the
accounts of two theater affiliates of Nelson Ferman, Inc. ("Nelson Ferman") at
Parsippany and Roxbury (the "NF Theaters"). All significant inter-location
balances and transactions have been eliminated in combination.
NATURE OF THE BUSINESS - The NF Theaters operated multi-screen theaters in
Morris County, New Jersey.
REVENUES AND FILM RENTAL COSTS - The NF Theaters recognize revenues from
box office admissions at the time of sale. Concession sales are recognized as a
commission from a third party, when earned. Film rental costs are based on a
film's box office receipts and length of a film's run.
SEASONALITY - The NF Theaters' business is seasonal with a large portion
of their revenues and profits being derived during the summer months (June
through August) and the holiday season (November and December).
ESTIMATES AND UNCERTAINTIES - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results, as determined at a later date,
could differ from those estimates.
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost.
Theater equipment and office furniture and equipment are depreciated using
straight line and accelerated methods over the estimated useful lives of the
assets of 7 years. Leasehold improvements are amortized using the straight-line
method over the term of the related lease or the estimated useful life of the
asset, whichever is less.
RENT EXPENSE - The NF Theaters included in the combined financial
statements are operated under leases that contain predetermined increases in the
rentals payable during the term of such leases. For these leases, the aggregate
rental expense over the lease terms is recognized on a straight-line basis over
the lease terms. The differences between the expense charged to operations and
the amount payable under that lease are recorded annually as deferred rent
expense, which will ultimately reverse over the lease terms.
Additional rent is paid for common area maintenance and may also be
charged based on a percentage of net revenue in excess of a predetermined
amount.
- 8 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
NOTES TO COMBINED FINANCIAL STATEMENTS
FINANCIAL INSTRUMENTS - Financial instruments include cash and accounts
payable and accrued expenses. The amounts reported for financial instruments are
considered to be reasonable approximations of their fair values, based on market
information of financial instruments with similar characteristics available to
management.
INCOME TAXES - The NF Theaters have elected under Section 1361 of the
Internal Revenue Code and under New Jersey corporate statutes to be taxed as
small business corporations. Under these provisions, all earnings and losses of
the NF Theaters are reported on the tax returns of the shareholders.
Accordingly, no provision has been made for federal income taxes and the NF
Theaters are subject to state taxes at a nominal rate.
IMPAIRMENT OF LONG-LIVED ASSETS - In 1996, Nelson Ferman adopted Statement
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
The effect of the adoption of that statement did not have a material effect on
the financial statements.
NOTE 2--PROPERTY AND EQUIPMENT:
Property and equipment at September 30, 1997 are summarized as follows:
Leasehold improvements $ 4,063,081
Furniture and equipment 1,563,084
------------
5,626,165
Less: Accumulated depreciation and
amortization 1,797,417
---------
$ 3,828,748
===========
- 9 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 3--LONG-TERM DEBT:
LONG-TERM DEBT - A summary of long-term debt at September 30, 1997
follows:
<TABLE>
<CAPTION>
Interest
Description Rate
----------- ----
<S> <C> <C>
Notes payable, due in monthly Prime $ 1,808,333
installments of $14,583 plus plus .25%
interest, through November 2000
with the remaining balance of
$1,239,583 due in January 2001
Other Various 127,917
-------------
1,936,250
Less: Current maturities 302,917
-------------
$ 1,633,333
=============
</TABLE>
The above debt is secured by the leasehold interest and other operating assets
of the NF Theaters and is guaranteed by all affiliates of Nelson Ferman,
including its stockholders.
Long-term debt matures as follows:
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------
<S> <C>
1998 $ 302,917
1999 175,000
2000 175,000
2001 1,283,333
-------------
$ 1,936,250
===========
</TABLE>
NOTE 4--DEFERRED INCOME:
The NF Theaters entered into an agreement with the concession vendor of
the Parsippany location in November, 1994, wherein the concessionaire paid
$1,000,000 as advance commissions. The commissions are being recognized as
income ratably over the term of the concession agreement, which expires in
November 2004. At September 30, 1997, the unamortized deferred commission
amounted to approximately $725,000.
The agreement stipulates that if the NF Theater at Parsippany cancels the
agreement prior to its expiration, the remaining unamortized balance must be
refunded to the concessionaire.
- 10 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 5--COMMON STOCK:
<TABLE>
<CAPTION>
Common stock consists of the following at September 30, 1997:
<S> <C>
Parsippany:
No par value, authorized and
issued 100 shares $ 500,000
Roxbury:
No par value, authorized and
issued 100 shares 4,000
---------
$ 504,000
=========
</TABLE>
NOTE 6--COMMITMENTS AND CONTINGENCIES:
THEATER LEASES - The following is a schedule of future minimum rental
payments required for all non-cancelable operating leases (for theater
facilities) that have initial or remaining lease terms in excess of one year at
September 30, 1997:
<TABLE>
<CAPTION>
Year Ending September 30,
-------------------------
<S> <C>
1997 $ 353,805
1998 353,805
1999 361,523
2000 361,523
2001 375,478
2002 and thereafter 5,954,209
------------
$ 7,760,343
============
</TABLE>
Rent expense for theater operating leases for the year ended December 30,
1996 and the nine months ended September 30, 1997 was approximately $570,000 and
$384,000, respectively.
NOTE 7--RELATED PARTY TRANSACTIONS:
OPERATING EXPENSES, MANAGEMENT FEES AND INTEREST EXPENSE - The NF
Theaters' operations through the date of sale were significantly controlled by
Nelson Ferman. In that regard, the cash deposited to the NF Theaters' operating
accounts was transferred to Nelson Ferman, which used the funds to pay operating
expenses, along with the funds from other Nelson Ferman affiliated theaters, on
a company-wide basis using an integrated system.
- 11 -
<PAGE>
NELSON FERMAN THEATERS AT PARSIPPANY AND ROXBURY
NOTES TO COMBINED FINANCIAL STATEMENTS
Interest expense represents an allocation of interest costs incurred by
Nelson Ferman and is charged to the NF Theaters based on each theater's
respective net assets.
NOTE 8--SUBSEQUENT EVENT (UNAUDITED):
In November 1997, Nelson Ferman sold substantially all of the assets,
including leasehold interests, equipment and various operating contracts of the
NF Theaters at Parsippany and Roxbury to Clearview Cinema Group, Inc.
("Clearview") for $18.5 million; $11.6 million in cash, 10 1/2% subordinated
notes aggregating $6.0 million, and common stock of Clearview valued at
$500,000, with an additional $400,000 held in escrow until the satisfaction of
certain obligations of Nelson Ferman.
- 12 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma condensed financial information and
related notes give effect to the acquisition of the Nelson Ferman Theaters at
Parsippany and Roxbury (the "Acquisition") by Clearview Cinema Group, Inc. (the
"Company"). The pro forma financial information includes: (i) an unaudited pro
forma condensed consolidated balance sheet of the Company giving effect to the
Acquisition as if it had occurred on September 30, 1997; (ii) an unaudited pro
forma consolidated statement of operations of the Company for the nine months
ended September 30, 1997 giving effect to the Acquisition as if it had occurred
on January 1, 1997; and (iii) an unaudited pro forma consolidated statement of
operations of the Company for the year ended December 31, 1996 giving effect to
the Acquisition and the Company's prior acquisitions as if they had occurred on
January 1, 1996.
This pro forma financial information is based on the estimates and
assumptions set forth herein and in the notes thereto and has been prepared
utilizing the consolidated and combined financial statements and notes thereto
appearing in the Company's Registration Statement on Form SB-2 (as amended),
which became effective on August 12, 1997 (the "Form SB-2") and its Form 10-QSB
for the quarter ended September 30, 1997 (See Notes 1 and 3).
The following unaudited pro forma financial information is presented for
informational purposes only and is not necessarily indicative of (i) the results
of operations of the Company that actually would have occurred had the
Acquisition and the Company's prior acquisitions been consummated on the dates
indicated or (ii) the results of operations of the Company that may occur or be
obtained in the future. The following information is qualified in its entirety
by reference to and should be read in conjunction with the Company's
consolidated financial statements, including the notes thereto, and the other
financial information appearing in the Company's Form SB-2 and its Form 10-QSB
for the quarter ended September 30, 1997 (See Note 1).
- 13 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
-------------------------
NF
Historical Theaters Adjustments Amount
------------ ----------- ------------ -----------
(Note 1) (Note 2)
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash $ 1,195,712 $ 37,017 $ (437,017) $ 795,712
Inventories 78,236 -- -- 78,236
Other current assets 321,365 84,415 315,585 721,365
------------ ------------ ------------ ------------
Total current assets 1,595,313 121,492 (121,432) 1,595,313
------------ ------------ ------------ ------------
PROPERTY AND EQUIPMENT,
LESS ACCUMULATED
DEPRECIATION 21,072,010 3,828,748 171,252 25,072,010
------------ ------------ ------------ ------------
OTHER ASSETS:
Intangible assets, less
accumulated
amortization 3,360,478 -- 14,200,000 17,560,478
Security deposits and
other assets 526,014 161,891 (161,891) 526,014
------------ ------------ ------------ ------------
3,886,492 161,891 14,038,109 18,086,492
------------ ------------ ------------ ------------
$ 26,553,815 $ 4,112,071 $ 14,087,929 $ 44,753,815
============ ============ ============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities
of long-term debt $ 1,317,696 $ 302,917 $ 2,017,083 $ 3,637,696
Current portion of
deferred revenue -- 100,000 (100,000) --
Current maturities of
subordinated 491,046 -- -- 491,046
notes payable
Accounts payable and
accrued expenses 1,936,235 723,674 (723,674) 1,936,235
------------ ------------ ------------ ------------
Total current
liabilities 3,744,977 1,126,591 1,193,409 6,064,977
------------ ------------ ------------ ------------
LONG-TERM LIABILITIES:
Long-term debt, less
current maturities 12,770,454 1,633,333 7,646,667 22,050,454
Deferred income, less
current maturities -- 625,000 (625,000) --
Subordinated notes
payable, less
current maturities 599,530 -- 6,000,000 6,599,530
------- --------- --------- ---------
13,369,984 2,258,333 13,021,667 28,649,984
------------ ------------ ------------ ------------
- 14 -
<PAGE>
(Table continued)
Pro Forma
-------------------------
NF
Historical Theaters Adjustments Amount
------------ ----------- ------------ -----------
(Note 1) (Note 2)
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY:
<S> <C> <C> <C> <C>
Preferred stock 8 -- -- 8
Common stock 21,088 504,000 (503,583) 21,505
Additional paid-in 11,012,433 27,000 572,583 11,612,016
capital
Accumulated deficit (1,594,675) 196,147 (196,147) (1,594,675)
------------ ------------ ------------ ------------
Total stockholders'
equity 9,438,854 727,147 (127,147) 10,038,854
--------- ------- -------- ----------
$ 26,553,815 $ 4,112,071 $ 14,087,929 $ 44,753,815
============ ============ ============ ============
</TABLE>
- 15 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
-------------------------
Pro Forma -
Company and
Prior NF
Acquisitions Theaters Adjustments Amount
------------ ----------- ------------ -----------
(Note 3) (Note 4)
THEATER REVENUES:
<S> <C> <C> <C> <C>
Box office $ 10,644,032 $ 4,015,770 $ -- $ 14,659,802
Concession 3,073,713 989,484 -- 4,063,197
Other 314,431 35,979 -- 350,410
------------ ------------ ------------ ------------
14,032,176 5,041,233 -- 19,073,409
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Film rental and booking
fees 5,026,096 1,925,740 -- 6,951,836
Cost of concession sales 493,655 -- -- 493,655
Theater operating
expenses 5,443,509 1,354,756 -- 6,798,265
General and
administrative 827,361 819,520 -- 1,646,881
Depreciation and
amortization 1,651,734 298,980 696,020 2,646,734
------------ ------------ ------------ ------------
13,442,355 4,398,996 696,020 18,537,371
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) 589,821 642,237 (696,020) 536,038
INTEREST EXPENSE 1,368,101 188,963 1,154,037 2,711,101
------------ ------------ ------------ ------------
NET INCOME (LOSS) (778,280) 453,274 $ (1,850,057) $ (2,175,063)
============ ============ ============ ============
NET INCOME (LOSS)
PER SHARE $ (.30) $ (.81)
====== ======
</TABLE>
- 16 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
-------------------------
Pro Forma -
Company and
Prior NF
Acquisitions Theaters Adjustments Amount
------------ ----------- ------------ -----------
(Note 3) (Note 4)
THEATER REVENUES:
<S> <C> <C> <C> <C>
Box office $ 13,834,642 $ 4,812,495 $ -- $ 18,647,137
Concession 3,656,988 1,129,729 -- 4,786,717
Other 491,823 39,167 -- 530,990
------------ ------------ ------------ ------------
17,983,453 5,981,391 -- 23,964,844
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Film rental and booking
fees 6,456,164 2,373,986 -- 8,830,150
Cost of concession sales 540,670 -- -- 540,670
Theater operating
expenses 7,145,257 1,848,016 -- 8,993,273
General and
administrative 1,125,240 1,103,057 -- 2,228,297
Depreciation and
amortization 1,902,452 403,075 922,925 3,228,452
Impairment of long-lived
assets 224,908 -- -- 224,908
------------ ------------ ------------ ------------
17,394,691 5,728,134 922,925 24,045,750
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) 588,762 253,257 (922,925) (80,906)
INTEREST EXPENSE 1,558,846 250,156 1,539,844 3,348,846
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (970,084) $ 3,101 $ (2,462,769) $ (3,429,752)
============ ============ ============ ============
NET INCOME (LOSS)
PER SHARE $ (.36) $ (1.27)
======= =======
</TABLE>
- 17 -
<PAGE>
CLEARVIEW CINEMA GROUP, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
In November 1997, the Company acquired substantially all of the assets,
including leasehold interests, equipment and various operating contracts of the
NF Theaters at Parsippany and Roxbury for $18.5 million; $11.6 million in cash
obtained from the Company's credit facility; 10 1/2% subordinated notes
aggregating $6.0 million, and shares of common stock of the Company valued at
$500,000, with an additional $400,000 held in escrow until the satisfaction of
certain obligations of Nelson Ferman, Inc.
NOTE 1 -- BASIS OF PRESENTATION
The pro forma condensed consolidated balance sheet as of September 30, 1997
includes the Company's historical balance sheet as reflected in its
September 30, 1997 Form 10-QSB. Such historical consolidated balance sheet
included all of the Company's acquisitions through September 30, 1997. The
pro forma condensed consolidated balance sheet also includes the balance
sheet of the Nelson Ferman Theaters at Parsippany and Roxbury (the "NF
Theaters"), included elsewhere herein, and the pro forma adjustments as
described in Note 2.
The Acquisition will be accounted for under the purchase method of
accounting. Under the purchase method of accounting, the results of
operations of an acquired entity are included in the Company's historical
consolidated financial statements from its acquisition date. Under that
method of accounting, the acquired assets are included based on the
allocation of their aggregate purchase price as of their date of
acquisition.
The Company acquired from Nelson Ferman, Inc. the operations of the NF
Theaters and certain leasehold interests and the theater equipment of the
two theater locations. Cash, other current assets, other assets, long-term
debt, deferred income and accounts payable and accrued expenses of the
acquired theaters will remain the property of, or the obligation of, the
seller, Nelson Ferman, Inc. The net equity of the theaters acquired has been
eliminated in combination. Interest expense incurred by the NF Theaters has
also been eliminated in combination.
- 18 -
<PAGE>
NOTE 2 -- ACQUISITION OF NF THEATERS
The purchase price for the Acquisition was $18.5 million, plus estimated
costs of approximately $100,000. An estimated allocation of the purchase
price, based on management estimates, is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Leasehold improvements $ 2,000,000
Equipment 2,000,000
Goodwill 14,200,000
Other assets 400,000 $18,600,000
------------
Less: Carrying value of assets in the
historical financial statements
of the NF Theaters -
Property and equipment $ 3,828,748
Other current assets 84,415
------------
3,913,163
---------
Adjustment to carrying value of assets
acquired $14,686,837
-----------
The adjustment to the carrying value of
the assets acquired is recorded as
follows:
Increase in property and equipment 171,252
Increase in goodwill 14,200,000
Increase in other current assets 315,585
------------
$14,686,837
===========
</TABLE>
The pro forma adjustments to the September 30, 1997 pro forma balance sheet
also include the bank financing for $11.6 million, the issuance of the
subordinated note payable for $6.0 million and the issuance of shares of
common stock valued at $500,000 in connection with the Acquisition.
NOTE 3 -- PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
The pro forma condensed consolidated statement of operations for the nine
months ended September 30, 1997 includes (in column 1) the pro forma
statement of operations as derived from the Company's September 30, 1997
Form 10-QSB. This pro forma column includes the Company's historical
statement of operations and the pro forma statement of operations for all
prior acquisitions for the nine months ended September 30, 1997.
- 19 -
<PAGE>
The pro forma condensed consolidated statement of operations for the year
ended December 31, 1996 includes (in column 1) the pro forma statement of
operations as derived from the Company's Form SB-2. This pro forma column
includes the Company's historical statement of operations and the pro forma
statement of operations for all prior acquisitions for the year ended
December 31, 1996.
NOTE 4 -- PRO FORMA ADJUSTMENTS
Pro forma adjustments to the pro forma statements of operations at September
30, 1997 and December 31, 1996 have been made for the following:
a) Increase to depreciation expense resulting from the increase in the
carrying value of the acquired theaters' property and equipment.
b) Increase in amortization expense to reflect, over a 15 year period,
the amortization of the excess of cost over the fair value of assets
aquired ("goodwill") and
c) Increase in interest expense to reflect the interest cost of debt
obligations incurred as if the related acquisition financing had
occurred on January 1, 1996.
- 20 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, 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
Chairman of the Board, President and
Chief Executive Officer
Date: February 2, 1998
- 21 -
<PAGE>
Exhibit Index
Sequential
Exhibit No. Document Page No.
----------- -------- --------
2.01 Asset Purchase Agreement dated as of November previously
21, 1997 by and among Clearview Cinema Group, filed
Inc., CCC Succasunna Cinema Corp., CCC
Parsippany Cinema Corp., F&N Cinema, Inc.,
Roxbury Cinema, Inc., John Nelson, Pamela
Ferman and Seth Ferman.
2.02 Merger Agreement dated as of November 21, 1997 previously
by and among Clearview Cinema Group, Inc., CCC filed
Mansfield Cinema Corp., Warren County Cinemas,
Inc., John Nelson, Pamela Ferman and Seth
Ferman.
9.01 Voting Trust Agreement dated as of November previously
21, 1997 by and among F&N Cinema, Inc., filed
Roxbury Cinema, Inc. and A. Dale Mayo, as
Trustee.
10.01 Subordinated Promissory Note dated as of previously
November 21, 1997 in the amount of $4.0 filed
million.
10.02 Subordinated Promissory Note dated as of previously
November 21, 1997 in the amount of $2.0 filed
million.
10.03 Registration Rights Agreement dated as of previously
November 21, 1997 by and among Clearview filed
Cinema Group, Inc., F&N Cinema, Inc. and
Roxbury Cinema, Inc.
10.04 Assignment by F&N Cinema, Inc. dated November
7, 1997 Assigning to CCC Parsipanny Cinema
Corp. that certain Ground Lease between The
Trustees of Net Realty Holding Trust and F&N
Cinema, Inc. dated May 12, 1993, as amended by
the First Amendment to Ground Lease dated July
11, 1994, and as further amended by Second
Amendment to Ground Lease dated December 19,
1994.
10.05 Assignment, Acceptance of Assignment and
Consent to Assignment of Lease between Roxbury
Cinema Inc. and CCC Succasunna Cinema Corp.,
dated November 21, 1997, assigning that
certain Lease between First Roxbury Company
and Roxbury Cinema Inc. dated May 24, 1989, as
amended by Lease Modification Agreement dated
May 2, 1990, and as further amended by Second
Lease Modification Agreement dated December
20, 1994.
ASSIGNMENT
FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, F & N
Cinema, Inc. of 21 Sunset Strip, P.O. Box 648, Succasunna, NJ 07876, Assignor:
hereby assign all of their right, title and interest and estate in a certain
Lease (said Lease and any amendments thereto hereinafter referred to as the
"Lease) dated May 12, 1993, as amended July 11, 1994 and December 19, 1994 which
Lease was originally made by The Trustees of Net Realty Holding Trust as
Landlord/Lessor, and F & N Cinema, Inc. as Tenant/Lessee, for premises located
at Morris Hills Shopping Center, Route 46, Parsippany, New Jersey
UNTO
CCC Parsippany Cinema Corp., Inc. of 7 Waverly Place, Madison, New Jersey 07940
(Assignee) together with the security deposited thereunder and subject to all of
the terms and conditions of the Lease, including the payment of rent, and
without affecting the liability of the Assignors herein for the faithful
performance thereof. The Assignors' liability shall survive any further
assignments, modifications or extensions of the Lease. Assignors waive any and
all suretyship defenses and rights of redemption and agree that service of any
notice required by the Lease on the Tenants then in possession shall be
sufficient.
IN WITNESS WHEREOF, the Assignor hereby sets its hand and seal this 7th
day of November, 1997
/s/ Illegible A: F & N Cinema, Inc.
- ------------------------- --------------------------
Witness
By: /s/ John Nelson
----------------------
John Nelson, President
ASSUMPTION
For value received, the sufficiency of which is hereby acknowledged, the
Assignee named above, namely, CCC Parsippany Cinema Corp., Inc. residing at 7
Waverly Place, Madison, New Jersey 07940 does hereby assume the Lease and agree
to be jointly and severally liable with the Assignor for the faithful
performance of all of the covenants of the Lease, including the payment of rent
and other charges as fully set forth therein all with full force and effect as
if the Assignee had signed the lease originally as Tenant named herein.
<PAGE>
IN WITNESS WHEREOF, the Assignee hereby sets its hand and seal this 7th
day of November, 1997.
/s/ Ronald J. Tell CCC Parsippany Cinema Corp., Inc.
- --------------------- ----------------------------------
Witness
By: /s/ A. Dale Mayo
------------------------------
A. Dale Mayo, President
CONSENT TO ASSIGNMENT
The undersigned, Net Realty Holding Trust, present holder of the
Landlord's interest in the Lease hereby consents to the within Assignment of
Lease.
LANDLORD
NET REALTY HOLDING TRUST
Date: 11/12/97 By: /s/ Thomas C. Prendergast
----------------------------------
Thomas C. Prendergast
Authorized Representative
ASSIGNOR
STATE OF NEW JERSEY )
COUNTY OF MORRIS ) SS:
On this 7th day of November, 1997, before me personally came John Nelson to me
known, who being by me duly sworn did depose and say that he is the President of
the corporation described in and which executed the foregoing instrument as
Assignor; That he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.
/s/ Geraldine A. Walsh
- ------------------------
Geraldine A. Walsh
A Notary Public of New Jersey
My Commission Expires 9/23/98
ASSIGNEE
STATE OF NEW JERSEY )
COUNTY OF MORRIS ) SS:
On this 7th day of November, 1997, before me personally came A. Dale Mayo to me
known, who being by me duly sworn did depose and say that he is the President of
the corporation described in and which executed the foregoing instrument as
Assignee; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.
/s/ Geraldine A. Walsh
- -----------------------------
Geraldine A. Walsh
A Notary Public of New Jersey
My Commission Expires 9/23/98
<PAGE>
GROUND LEASE
THIS LEASE made and entered into this 12th day of May, 1993, by and
between THE TRUSTEES OF NET REALTY HOLDING TRUST, a trust organized pursuant to
a Declaration of Trust dated July 1, 1970 whose address is: c/o Net Properties
Management, Inc., 535 Boylston Street, Boston, Massachusetts, hereinafter called
"Landlord", and F & N Cinema, Inc., a New Jersey corporation with its principal
place of business at 21 Sunset Strip, PO Box 648, Succasunna, New Jersey 07876
(hereinafter called "Tenant").
W I T N E S S E T H:
1. PREMISES: That Landlord, for and in consideration of the rents
and covenants hereinafter contained and made on the part of the Tenant, does
hereby demise and lease to Tenant, and Tenant does hereby take subject to the
conditions hereinafter set forth, the following described premises in
Parsippany-Troy Hills, County of Morris, State of New Jersey, to-wit:
The approximately 32,000 square feet of land and 32,000 square foot
building to be erected by Tenant thereon (subject to adjustment if Landlord and
Tenant agree to a reduced building size pursuant to Article 3 hereof) and
located in the Morris Hills Shopping Center, Routes 46 and 202 Parsippany-Troy
Hills, New Jersey as shown crosshatched in red on the attached plan labelled
Exhibit "A" and as more fully described on Exhibit "B" (legal description)
(hereinafter referred to as the "Premises").
Together with all existing Landlord's easements and appurtenances in
adjoining and adjacent land, highways, roads, streets, lanes, whether public or
private, for the use and benefit of the above-described parcel of real estate,
and subject to zoning regulations and zoning ordinances of the city, town or
village in which the premises lie.
2. TERM: Tenant shall have and hold the Premises for:
(1) An interim term, without payment of rent therefor, commencing on the
date of last execution of this Lease and ending 180 days after
receipt by Tenant of required building permits and approvals, or the
date Tenant opens for business, whichever is earlier.
(2) A primary term commencing upon the expiration of the interim term
and ending 21 years thereafter.
3. (A) RENT; SIZE OF PREMISES: During the primary term and any
extension thereof, Tenant shall pay to Landlord an annual rent as follows for
the following periods:
For the period: from the commencement of the primary term through the end
of the eighth lease year: $130,000.00 per year - $l0,833.33 per month;
For the period: ninth lease year through the end of the fifteenth lease
year: $143,000.00 per year - $11,916.66 per month;
For the period: sixteenth lease year through the end of the twenty-first
lease year: $157,300.00 per year - $13,108.33 per month;
For the period: twenty-second lease year through the end of the
twenty-sixth lease year (if the first option to renew is exercised): $173,030.00
per year - $14,419.17 per month;
For the period: twenty-seventh lease year through the end of the
thirty-first lease year (if the first option to renew is exercised): $190,333.00
per year - $15,861.08 per month;
For the period: thirty-second lease year through the end of the
thirty-sixth lease year (if the second option to renew is exercised):
$209,366.30 per year - $l7,447.19 per month;
For the period: thirty-seventh lease year through the end of the
forty-first lease year (if the second option to renew is exercised): $230,302.90
per year - $19,191.91 per month.
2
<PAGE>
Said rent shall be paid to the Landlord in equal monthly installments on
or before the first day of each month, in advance, without offset or deduction
whatsoever, together with all applicable sales and revenue taxes imposed by the
State of New Jersey or local governmental authorities, with rent pro-rated for
any portion of a month at the commencement of the primary term. The annual and
monthly rent set forth above shall be effective provided the Tenant obtains a
building permit to construct a 32,000 square foot building on the Premises. In
the event the Tenant, despite best efforts, fails to obtain a permit to
construct a 32,000 foot building but obtains a building permit to construct a
building of at least 20,000 square feet, this Lease shall remain in full force
and effect and the rent payments shall be as follows for the following periods:
FOR THE PERIOD DECREASE IN ANNUAL RENT
PER SQUARE FOOT
Lease Years 1 through 8 $2.50
Lease Years 9 through 15 $2.75
Lease Years 16 through 21 $3.03
Lease Years 22 through 26 $3.33
Lease Years 27 through 31 $3.66
Lease Years 32 through 36 $4.03
Lease Years 37 through 41 $4.43
(B) SIZE OF PREMISES: In the event Tenant obtains a building permit to
construct a building of less than 20,000 square feet, Landlord and Tenant shall
each have the right to terminate this Lease by giving the other party written
notice within fifteen (15) days of Tenant's notification to Landlord that it has
obtained a building permit and designating the square footage allowed by the
building permit. In the event neither Landlord or Tenant elect to terminate this
Lease, this Lease shall remain in full force and effect except that the annual
and monthly rentals shall be decreased as provided above. In no event shall the
building exceed 32,000 square feet or be less than 20,000 square feet in ground
floor area. Notwithstanding anything in this Lease to the contrary, in the event
the Premises are less than 32,000 square feet, the number of screens shall be
proportionately reduced.
4. PREPARATION OF PREMISES BY LANDLORD AND TENANT: Tenant agrees to
accept the Premises in "as-is" condition. Tenant acknowledges it has conducted a
physical inspection of the Premises and accepts same, without representation or
warranty, in fact or by law, by the Landlord and without recourse to the
Landlord as to the condition thereof or the use to which the Premises may be
applied. Landlord shall not be liable for any defects in the Premises or any
limitation on their use.
Tenant's Installations: Any and all work and installations required to
construct on the Premises a modern one-story 32,000 square foot movie theater
building, with twelve separate theaters and screens for the operation of
first-class movie theater shall be performed by Tenant at its own cost and
expense and Tenant shall fully equip the Premises with all trade equipment,
lighting fixtures, furniture, operating equipment, furnishings, fixtures, floor
coverings, ventilation equipment and exterior signs and any other equipment
necessary for the proper operation of Tenant's business. All fixtures installed
by Tenant shall be new or completely reconditioned. Tenant shall not perform any
construction work or install any equipment without first obtaining Landlord's
written approval and consent. Tenant shall present to Landlord detailed plans
and specifications for such work at the time approval is sought. Landlord
reserves the right before approving any work to require Tenant to furnish
Landlord with a completion bond issued by a surety company approved by Landlord.
All construction shall be performed in accordance with the provisions of the
"Alterations and Improvements" Article of this Lease.
Tenant agrees to indemnify and hold harmless Landlord from any damages
which are a direct result of Tenant's construction, and Tenant agrees to
promptly repair and otherwise correct any such damages. Tenant further agrees
that its construction shall be carried out in a manner that (i) will minimize
interference with the operation of the shopping center and (ii) will not
obstruct access to said shopping center. Tenant agrees to diligently commence
and perform the construction of the theatre building and to diligently pursue
construction to completion during the interim term of this Lease.
3
<PAGE>
Tenant shall procure all necessary approvals [ ] applicable government
agencies and from utility companies for adequate sewerage, electric current,
gas, water and other utilities service and tenant identification and attraction
signs to the Premises. In the event, despite its diligent good faith efforts,
Tenant is unable to secure planning board approval and required sign permits
within one hundred and eighty (180) days of the date of this Lease, this Lease
shall terminate without further liability to Landlord or Tenant.
5. COVENANT OF TITLE AND QUIET ENJOYMENT: Landlord covenants and
warrants that it has full right and lawful authority to enter into this lease
for the full term hereof; that it is lawfully seized of the premises in fee
simple and has good title thereto, free and clear of all tenancies,
restrictions, and encumbrances except as to rights of other Tenants of the
shopping center to common use of parking facilities encumbrances and
restrictions of record and that at all times during the term of this lease and
any extensions of said term Tenant's quiet and peaceful enjoyment of the
premises shall not be disturbed or interfered with by Landlord or anyone
claiming under Landlord.
6. USE: The Premises shall be used by Tenant solely for the operation of
a first-run motion picture theater with no less than 10 separate theater rooms
and screens, subject to reduction if the Premises are less than 32,000 square
feet, including the incidental operation of concessions and video games
associated therewith. Tenant shall not show any film rated more restrictive than
"NC-17" or its equivalent if the rating system is modified by the Motion Picture
Association of America or its successor. Tenant shall obtain all required
licenses and approvals for such use. In occupying the Premises, Tenant shall
comply with all laws, ordinances, orders and regulations of any lawful authority
and shall keep the Premises in a neat and clean condition. Tenant acknowledges
that: (i) this Lease is a Lease of real property in the shopping center; (ii)
Landlord has executed this Lease in reliance on the Lessee's use restriction;
(iii) any deviation from the permitted use shall constitute a substantial breach
of the terms of this Lease.
7. OPERATION OF BUSINESS: Tenant shall (a) conduct its business in the
entire Premises; (b) remain open for business during customary business days and
hours for movie theaters in the city or trade area where the Shopping Center is
located; (c) adequately staff its store with sufficient employees; (d) maintain
displays of movies; (e) keep the display windows and signs, if any, well-lighted
during the hours from sundown to 12 midnight; (f) keep the Premises and exterior
and interior portions of windows, doors and all other glass or plate glass
fixtures in a neat, clean, sanitary and safe condition; (g) warehouse, store or
stock only such goods, wares, and merchandise as Tenant intends to offer for
sale at retail; (h) use for office or other non-selling purposes only such space
as is reasonably required for Tenant's business but in no event shall the space
used for such purposes exceed fifteen percent (15%) of the square foot area of
the Premises; (i) neither solicit business nor distribute advertising matter in
the parking or other common areas, (j) not place any weight upon the floor which
shall exceed the floor load capacity.
8. MAINTENANCE AND REPAIRS: Tenant, at its sole cost and expense, shall
maintain and keep in good repair, and replace, as may be required, all buildings
and improvements (which includes signs, sidewalks, landscaping, pavement and
parking areas within the Premises, if any) including repairs and replacements of
all structural and non-structural portions of the Premises.
9. LESSEE'S FAILURE TO REPAIR: If Tenant (a) refuses or neglects to make
repairs, or (b) if Landlord is required to make exterior or structural repairs
by reason of Tenant's negligent acts or omissions, Landlord shall have the
right, but shall not be obligated, to make such repairs on behalf of and for the
account of Tenant. In such event, such work shall be paid by Tenant as
additional rent promptly upon receipt of a bill therefor.
10. UTILITY PAYMENTS: Tenant shall pay for all sewer, water, gas,
electric current, telephone and other utilities used or consumed in or at the
Premises.
4
<PAGE>
11. ADDITIONAL RENT: (a) Tenant shall, during the term, as additional
rent (hereinafter sometimes referred to as the "additional rent"), pay and
discharge, except as hereinafter provided in sub-paragraph (c), within ten (10)
days after the same shall become due and payable, all real property taxes,
assessments, water rents, rates, and charges, sewer rents and sewer access fees
or like charges, and other governmental impositions and charges of every kind
and nature whatsoever, extraordinary as well as ordinary, and each and every
installment thereof, and all fees and charges of public and governmental
authorities for construction, maintenance, occupation or use during the term, of
any passageway or space in, over or under any sidewalk or street on or adjacent
to The Premises, or for construction, maintenance or use during the term of any
part of any building covered hereby within the limits of any street, which shall
or may during the term be charged, laid, levied, assessed, imposed, become due
and payable, or liens upon or for the Premises or any part thereof, or any
buildings, appurtenances or equipment thereon or therein or any part thereof, or
the sidewalks or streets in front of or adjoining the Premises, and all taxes
charged, levied, assessed or imposed in lieu of the foregoing, together with all
interest and penalties thereon, under or by virtue of all present or future
laws, ordinances, requirements, orders, directions, rules or regulations of
Federal, State, County and City Governments and of all other governmental
authorities whatsoever. To the extent that the same may be permitted by law,
Tenant shall have the right to apply for the conversion of any assessment for
local improvements in order to cause the same to be payable in annual
installments, and upon such conversion Tenant shall pay and discharge punctually
said installments, as they shall become due and payable during the term,
provided, however, that Tenant shall be required to pay and discharge the
prorated share of all of the items enumerated in the first sentence of this
sub-paragraph (a) due and payable upon the expiration of the term of any renewal
term hereof. Tenant shall also pay, within ten (10) days after the same shall be
due and payable, all charges for water, gas, electricity, and any other service
or services furnished to The Premises or the occupants thereof during the term
of this Lease provided that any such charge or service shall have become a lien
against The Premises. Tenant shall be deemed to have complied with the covenants
of this sub-paragraph (a) if payment of such tax, assessment, water rent, rate
or charge, sewer rent, or other governmental imposition or charge shall have
been made, either within any grace period allowed by law or by the governmental
authority imposing the same during which payment is permitted without penalty or
interest, or before the same shall become a lien upon The Premises, whichever is
later, and Tenant shall, after notice by Landlord, within twenty (20) days after
the time above provided for the payment by Tenant of the items enumerated in the
first sentence of sub-paragraph (a) above, produce and exhibit to Landlord
receipted bills or sufficient and adequate copies of same, as proof of such
payment.
(b) Tenant shall have the right to contest or review by legal proceedings,
or in such other manner as it may deem suitable (which, if instituted, Tenant
shall conduct promptly at its own expense, and free of any expense to Landlord,
and, if in Tenant's opinion necessary, in the name of Landlord), any tax,
assessment, water rent, rate or charge, sewer rent, or other public or
governmental imposition, fee or charge aforementioned, on the Premises only,
provided that such contesting or review will not subject Landlord to criminal
penalties or any nature, and, upon condition that before instituting any such
proceedings, if the contested items shall not have been paid, Tenant shall
furnish to Landlord security satisfactory to Landlord, sufficient to cover the
amount of the contested items, with interest and penalties for the period which
such proceedings may reasonably be expected to take, securing payment of such
contested items, interest and penalties, and all costs in connection therewith,
and upon the furnishing of such security satisfactory to Landlord, Tenant shall
not be deemed to be in default in the payment of such contested items.
Notwithstanding the provisions of the foregoing sentence or the furnishing of
any such security, Tenant shall promptly pay all such items if any any time The
Premises or any part thereof shall be in danger of being forfeited or lost by
reason of such nonpayment, and upon such payment any such deposit or security
shall be forthwith returned to Tenant and any such bond cancelled and
discharged. The legal proceedings herein referred to shall include appropriate
certiorari proceedings and appeals from orders therein and appeals from any
judgments, decrees or orders, but all such proceedings shall be begun as soon as
it is reasonably possible after the imposition or assessment of any contested
items and shall be prosecuted to final adjudication with reasonable dispatch. In
the event of any reduction,
5
<PAGE>
cancellation or discharge of any such contested item, Tenant shall pay the
amount finally levied or assessed against The Premises or adjudicated to be due
and payable on any such contested items and upon such payment any such bond
cancelled and discharged, and if there shall be and refund with respect thereto,
Tenant shall be entitled to the same.
(c) Nothing herein contained shall require or be construed to require
Tenant to pay any inheritance, estate, succession, transfer, gift, franchise,
capital levy, income or profit tax, any corporate income or gross receipts tax,
that is or may be imposed upon Landlord, its successors or assigns, unless such
taxes shall be levied upon the rent reserved herein instead and in lieu of real
estate taxes upon the real property hereby demised nor shall Tenant be required
to pay any judgments or liens against The Premises created by Landlord, or
principal, interest, or other charges in respect of any mortgage covering The
Premises, all of which shall be the sole and exclusive responsibility of the
Landlord.
(d) In the event the Premises are not separately assessed and billed,
Tenant agrees to pay to Landlord as additional rent, any and all real estate
taxes attributable to the building, land and improvements on the Premises, as
determined by Landlord based upon information obtained by the tax assessor's
office and Tenant shall pay its pro-rata share, as hereinafter defined, of the
real estate taxes assessed against the land of the Shopping Center. In the event
Landlord is unable to ascertain the assessment of the Premises, Tenant shall pay
its pro-rata share of the real estate taxes assessed against the shopping center
land and buildings. In addition, Tenant shall pay any fees or charges imposed by
governmental authorities against the Premises such as sewer access fees,
betterment assessments and similar charges. Tenant's pro-rata share shall be a
fraction, the numerator of which shall be the gross leaseable area of the
Premises and the denominator of which shall be the gross leasable area of the
buildings in the shopping center or tax parcel in which the Premises are
located, from time to time.
Landlord shall submit to Tenant a copy of the tax bill and/or bills for
the taxes assessed, levied, or imposed upon the land and/or building for such
tax year, together with a statement which shall indicate the amount, if any,
required to be paid by Tenant as additional rent hereunder.
Within ten (10) days after the issuance of the statement, Tenant shall pay
such additional rent, if any, as set forth on such statement.
In the event Landlord shall receive a refund of taxes for any tax year for
which Tenant has paid any additional rent under the provisions of this Section,
the proceeds of such refund less legal fees and other expenses incurred in
obtaining such refund, shall be applied and allocated to the periods for which
the refund was obtained and proper adjustment shall be made by the Landlord and
the Tenant.
Any payments or refunds due hereunder for any period of less than a full
tax year, at the commencement or end of the term of this Lease, shall be
equitably pro-rated to reflect such event.
Any tax upon land and/or building or other tax levied or imposed by any
taxing authority in lieu of the present method of real estate taxing shall be
deemed to be the taxes referred to in the Article.
12. COMMON AREAS: (a) The Landlord agrees to maintain parking areas,
sidewalks, roadways, exits and entrances of the shopping center. The Tenant
shall have the right, as an appurtenance to the Premises, to use the parking
areas, roadways, sidewalks, entrances and exits and other common facilities
within the shopping center in common with others entitled to the use thereof, in
accordance with and subject to the provisions of this lease and such reasonable
regulations with respect to the use thereof as the Landlord shall from time to
time establish. The Landlord may make from time to time reasonable changes in
any of the common facilities in the shopping center, which in the sole judgment
of the Landlord, will not detract from the usefulness or attractiveness of such
common facilities, except Landlord will not construct any new buildings in the
area designated the "No Build Area" on Exhibit "A". The Tenant agrees not to
cause or permit any obstruction or other interference with any roadway,
sidewalk, or other common facility appurtenant to the Premises. No trucks or
other delivery vehicles shall park or be permitted to park in the parking areas
6
<PAGE>
within the shopping center, and all loading or unloading of merchandise,
supplies, fixtures, equipment and furniture shall be done at and through the
proper service entrance or entrances in the rear or the side of the Premises.
(b) The Landlord agrees during the term hereof to operate, manage and
maintain all such parking areas, roads, and other common facilities within the
Shopping Center, exclusive of the parking areas and landscaping in the Premises,
if any, and to maintain the landscaping, drainage and lighting facilities
therefor, all in such manner and at such cost as the Landlord in its sole
judgment may determine, it being understood and agreed that the Landlord shall
not be liable for any inconvenience or interruption of business or other
consequence resulting from the making of repairs, replacements, improvements,
alterations or additions or by doing of any other work with respect to such
common facilities, where such delay or failure is attributable to strikes or
other labor conditions, inability to obtain labor or materials or services, or
to any other cause beyond the Landlord's reasonable control.
(c) The Tenant agrees to require its employees to park their cars
only in such areas as the Landlord may from time to time designate as employees'
parking areas.
(d) Common area shall mean all service areas, parking areas,
accessways, sidewalks, common area lighting systems, landscape areas, common
area utility systems, directional and pylon signs and like items. Tenant, as
additional rent, agrees to pay to Landlord, without offset or deduction, in
equal monthly installments on the first day of each and every calendar month
during the primary term hereof and any extension periods, (pro-rata for that
portion of the calendar month in which the term hereof shall commence, if such
portion is shorter than a full month) as its share of the cost to Landlord of
keeping and maintaining the parking areas and other common facilities, the
annual amount equal to Tenant's pro-rata share as defined hereinafter of all
costs and expenses of every kind and nature as may be paid, incurred or
amortized by Landlord in operating, managing, equipping, lighting, repairing,
replacing and maintaining the common areas including but not limited to, parking
areas, common facilities and related services, properly identification and
traffic signs, and in policing the Shopping Center and affording protection
thereof against fire (if and to the extent that such policing and/or fire
protection is provided) as determined in accordance with generally accepted
accounting principles and allocated to any particular fiscal year on the accrual
method of accounting. Such costs and expenses shall include, but shall not be
limited to: maintaining, cleaning, snow plowing, sanding, salting, and lighting
the parking area and other common areas; costs and expenses of planting,
replanting and replacing flowers and landscaping; water and sewerage charges;
premiums for liability, property damage, fire and workmen's compensation
insurance including an allocation by Landlord's insurance advisor for claims
paid or to be paid by Landlord under Landlord's retention (beneath Landlord's
insurance deductible); wages, unemployment taxes; social security taxes;
personal property taxes; fee for required licenses and permits; supplies,
operation of loud speakers and any other equipment used in the operation, repair
and maintenance of the common areas, common facilities and related services; and
administrative costs equal to fifteen percent (15%) of the total costs paid or
incurred by Landlord under this Paragraph, but there shall be excluded
depreciation of the original costs of constructing, erecting and installing the
common areas, common facilities and related services.
Tenant's pro-rata share of the costs and expenses referred to herein shall
be that same percentage as set forth hereinbefore relating to Tenant's share of
Real Estate Taxes. During the first lease year, the Tenant shall pay Landlord
the annual sum of $36,480.00, payable monthly in advance, together with the
payments of rent due hereunder, in the sum of $3,040.00 per month. These amounts
are based on the Premises consisting of 32,000 square feet and shall be
proportionately reduced if the Premises are reduced in size. If Landlord shall
determine that any sums are owed it after the end of Landlord's fiscal year,
Landlord shall furnish to Tenant a statement in reasonable detail of the actual
common area costs and expenses paid or incurred by Landlord during such period
prepared in accordance with generally accepted accounting principles by
Landlord, and thereupon there shall be an adjustment between Landlord and Tenant
in the event that such pro-rata share shall be greater or less than the amount
paid by Tenant as
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the case may require to the end that Landlord shall receive the entire amount of
Tenant's pro-rata share of such costs and expenses. At the end of each fiscal
year during the term hereof, Landlord may adjust Tenant's monthly common area
maintenance payment so that the amount shall equal one-twelfth of Tenant's
annual pro-rata share as set forth in Landlord's most recent statement. Such
statement shall be conclusive between the parties. Landlord reserves the right
to change its fiscal year.
13. DESTRUCTION AND DAMAGE: (a) If during the term of this Lease, the
buildings, improvements or the equipment on, in, or appurtenant to the Premises
at the commencement of such term or thereafter created thereon or therein shall
be destroyed in whole or in part by fire or any other cause, Tenant shall give
to Landlord immediate notice thereof, and Tenant, at its own cost and expense,
shall, promptly repair, replace, and rebuild the same with a structure of
substantially the same character and condition as existed immediately prior to
such occurrence, and Landlord shall, in no event, be called upon to repair,
replace or rebuild any such buildings, improvements, or equipment, nor to pay
any of the cost or expenses thereof, beyond or in excess of the insurance
proceeds as herein provided.
(b) For the purpose of paying towards the cost of such repairs,
replacements or rebuilding, Landlord shall make available and pay from time to
time, all net sums received under insurance policies covering such loss or
losses as provided for herein at the request of or at the direction of Tenant to
the parties whom Tenant may employ to repair, replace, or rebuild the same, as
such repairs, replacements or rebuilding shall progress, or to Tenant if the
Tenant shall make or pay for such repairs, replacement, or rebuilding, in
reimbursement for work and materials actually incorporated in the Premises. Such
payment shall be made by Landlord upon written request from an officer of
Tenant, or in the event that an architect has been retained to supervise said
work, then said payments by Landlord shall be made upon appropriate requisition
certificate of the architect in charge of such work, provided, however, that in
each instance of requisition, prior to the completion of such work, said officer
of Tenant or the architect, if any, shall also certify to Landlord, and at
Landlord's request, to the holder of any mortgage to which this lease is
subordinate, that the cost of the then remaining work necessary for completion
thereof does not exceed ninety percent (90%) of the balance of said insurance
proceeds as will remain after payment over the sum so requisitioned, and that
such work has been prosecuted in accordance with the plans and specifications
therefor. If in the course of such work, any mechanics or other lien or order
for the payment of money shall be filed against the Premises or against Landlord
or Tenant or any contractor of Tenant or if Tenant shall be in default in the
payment of any net rent or additional rent then due and payable or if there are
any existing and unremedied defaults on the part of Tenant under the agreements,
terms, covenants and conditions of this lease as to which Landlord has served
notice upon Tenant and with respect to which Tenant has failed to cure within
the time provided for herein, Landlord shall not be obligated to make any
payment of such insurance proceeds until and unless such lien or order shall
have been fully bonded, satisfied, cancelled, discharged of record, or complied
with and/or until such default shall have been cured.
(c) If the net amount of such insurance proceeds shall be
insufficient for the proper and effective repair, replacement or rebuilding of
such damaged or destroyed buildings, improvements or equipment, Tenant shall pay
the additional sums required, and if the amount of such insurance proceeds shall
be in excess of the cost thereof, the excess shall be paid to and retained by
Tenant.
(d) Unless the repairs, replacement or rebuilding to be performed by
Tenant is delayed by Landlord's failure to make the insurance proceeds available
for such work, or unless a delay occurs by reason of Tenant's inability to
adjust the amount of insurance to be paid, Tenant shall proceed to repair,
replace, or rebuild the structures, improvements and equipment promptly and, in
the event that such work shall not be commenced within thirty (30) days from the
date of payment to Landlord or Tenant of the insurance proceeds by the company
or companies insuring such loss or damage and shall not be expeditiously
prosecuted to completion, Landlord shall have the right to cancel and terminate
this lease by giving to Tenant not less than sixty (60) days notice of intention
to do so and, if upon the expiration of the time fixed in such notice, such work
shall not have been commenced and the other agreements, terms, covenants and
conditions herein
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complied with, or if after commencement thereof, the work shall not have been
expeditiously prosecuted as the case may be, this Lease and the term hereof
shall terminate and all such insurance proceeds shall belong to and shall be
retained by Landlord.
(e) Such work and the performance thereof shall be subject to and
shall be performed in accordance with the provisions of the paragraph of the
lease headed "ALTERATIONS AND IMPROVEMENTS".
(f) The thirty (30) day period mentioned in the foregoing
subparagraph (d) shall be extended by such period as Tenant may be delayed by
strikes, labor or material shortages, embargos, governmental restrictions or
priorities, or other causes beyond Tenant's reasonable control, including
obtaining insurance proceeds.
14. ALTERATIONS AND IMPROVEMENTS: Subject to the compliance with and
observance of all of the terms, conditions, covenants and agreements provided
for in this Lease, Tenant shall have the right, to be exercised at Tenant's
option at any time during the term of this Lease, to make alterations,
improvements, but not building additions, in and to the Premises, provided
however, that Tenant notify Landlord of its intention to make such alterations
and improvements in writing prior to the commencement of any such work, together
with detailed plans and specifications, and obtains the prior written approval
of the Landlord, such approval not to be unreasonably withheld. Upon approval of
Landlord of such work, Tenant shall, prior to the commencement of work in excess
of thirty (30) percent of the appraised value of the building, procure and
deliver to Landlord, adequate security in an amount equal to the estimated cost
of construction of such alterations and improvements, reasonably satisfactory to
Landlord. Tenant shall comply with the following provisions:
(a) Make, erect and complete the proposed improvement substantially
in accordance with such plans and specifications therefor, and in compliance
with the building code and all laws, ordinances, rules, regulations and orders
of any governmental bureau, body or officer having competent authority to make
the same and which may be applicable to the erection or construction of said
improvement.
(b) Complete said improvement within the time to be therein specified
and fully pay for the same at the times and in the manner as fixed by contracts
therefor.
(c) Perform any and all duties which are or may be legally imposed on
Landlord as owner of the Premises in connection with the construction and obtain
any necessary certificate of occupancy therefor.
15. EMINENT DOMAIN: In the event the Premises shall be taken by or
pursuant to any governmental authority or through the exercise of the right of
eminent domain, Landlord and Tenant shall join and cooperate in resisting such
proceeding if such resistance is feasible and desirable, and if it is not, shall
join and cooperate in prosecuting their respective claims for damages incurred
from the successful exercise of such right or proceeding. Any condemnation award
shall be paid as follows: To the Landlord for the then value of its land and
building, except Landlord and Tenant shall apportion any value for the building
so that Tenant shall receive 95% of the building value in lease year 1, to be
reduced at the rate of 5% per year for each lease year thereafter so that Tenant
shall receive no award if the condemnation occurs after the 20th lease year.
If the whole of the Premises shall be taken or condemned by any competent
authority for any public use or purpose during the term of this Lease, all
obligations of Tenant shall cease upon the date of the taking and any unearned
rent paid by Tenant shall be refunded.
In the event that a part of the Premises shall be taken or condemned, and:
(a) The part so taken includes the building on the Premises or any part
thereof; or
(b) The part so taken shall remove from the Premises forty percent (40%)
or more of the frontage of depth of the parking area thereof; or
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(c) Such partial taking shall result in cutting _____ direct access from
the Premises to any adjacent public street or highway without an
alternate access acceptable to Tenant, or
(d) Such partial taking in any other way reduces or damages the Premises
to an extent that the same may not be effectively used for the
purposes hereof;
Then and in any such event, the Tenant may at any time either prior to or
within a period of sixty (60) days after the date when possession of the
Premises shall be required by the condemning authority, elect to terminate this
Lease. In the event that Tenant shall fail to exercise this option to terminate
this Lease or, in the event that a part of the premises shall be taken or
condemned under circumstances under which the Tenant will have no such option,
then in either such event, this Lease shall continue in effect with respect to
the portion of the Premises not so taken, and Tenant will, with all due
diligence and at its own cost and expense, repair and restore the Premises or
what remains thereof to their former condition. The monthly rent due Landlord
under this Lease shall be adjusted to compensate Tenant for any loss sustained
in area and usability, in proportion to the percentage of the Premises which is
taken.
16. MORTGAGING OF LANDLORD'S ESTATE: Landlord shall have the right at
any time or from time to time during the continuance of this Lease, as security
for any indebtedness owed by it, to create an encumbrance against its estate in
the premises or any part hereof, and this Lease shall be automatically
subordinate thereto, provided if Tenant is in full compliance with its
obligations hereunder, Landlord shall obtain a Non-disturbance, Recognition and
Attornment Agreement recognizing this Lease.
17. ASSIGNMENT AND SUBLETTING: Tenant shall not assign, mortgage or
encumber this Lease, in whole or in part, or sublet all or any part of the
Premises except as provided in this Lease. In addition, for the purposes of this
Article, an assignment shall be deemed to include any consolidation, merger or
transfer of controlling interest in ownership. Notwithstanding the foregoing,
Tenant may assign its interest in the Lease to family members of its principals,
John Nelson and Robert Ferman only and Tenant may grant a licence* for the
operation of the refreshment concession area on the Premises. In addition,
Tenant may assign its interest in the Lease to an experienced and reputable
operator of movie theaters, operating at least 5 other theater locations and
having a net worth of at least $10,000,000.00. In connection with any such
assignments, the Tenant shall furnish Landlord with a copy of the executed
assignment within ten (10) days of the assignment and the assignment shall be in
a form reasonably acceptable to Landlord and shall provide, amongst other
things, that the assignee shall assume all of the Tenant's obligations under the
Lease, without limitation. In no event shall Tenant be released from its primary
liability under this Lease in connection with any lease assignment.
18. DEFAULT OF TENANT: If the Tenant shall fail to make any payment of
rent within ten (10) days after Tenant has received written notice of such
default or if Tenant shall fail to keep and perform any other covenant of this
Lease and shall continue in default for a period of thirty (30) days after
Tenant has received written notice of such default and demand of performance
from Landlord, Landlord may declare the term ended and enter upon the premises
and expel Tenant therefrom without prejudice to other remedies available to
Landlord. No such entry by Landlord shall bar Landlord from the recovery of
damages [or the breach of any of the covenants hereof by Tenant, and, Tenant
shall remain liable for the payment of rent and other charges under the Lease,
including brokerage commissions and expenses to prepare the Premises for
re-rental, and all costs of maintaining the Premises until a new Tenant
commences payment of rent, and thereafter, Tenant shall remain liable for any
deficiencies after application of rent payments received by Landlord, but Tenant
shall not be entitled to excess payments received by Landlord, if any. Provided,
however, if any default shall occur (other than in the payment of rent) which
cannot with diligence be cured within a period of thirty (30) days and Tenant,
prior to the expiration of thirty (30) days from and after the giving of notice
as aforesaid, commences to eliminate such default and proceeds diligently to
take steps to cure the same, Landlord shall not have the right to declare the
term ended by reason thereof. In addition to Landlord's rights hereunder, in the
event Landlord does not receive rent payments within ten (10) days of the date
required by this Lease, Tenant
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shall pay Landlord an amount equal to 5% of the payment past due, as additional
rent, together with the next payment of rent by Tenant.
Landlord shall be entitled to recover from Tenant other all reasonable
costs and legal fees incurred in connection with any default by Tenant.
19. SECURITY DEPOSIT: In lieu of a security deposit, the principals
of the Tenant corporation, John Nelson and Robert Ferman personally and jointly
guarantee rent and additional charges up to a maximum of $50,000.00, for a
period of five (5) years from the commencement of the primary term of this
Lease. On the execution date of this Lease, John Nelson and Robert Ferman,
hereinafter collectively referred to as the Guarantors, shall execute and
deliver the Guarantee of Lease attached hereto as Exhibit C.
20. NOTICE: All notices authorized or required to be given to Landlord
shall be sent by Certified Mail or by Federal Express or comparable next day
mail service providing a receipt, with prepaid postage addressed to Landlord at
the address set forth in this Lease and those authorized or required to be given
to Tenant shall be sent in the same manner to Tenant at the Premises, subject to
the right of either party to designate by written notice a new address to which
said notices nay be sent.
21. RECORDING: Tenant may, at its option, record a Short Form Memorandum
of Lease executed by all parties and the cost of all documentary stamps, or
conveyancing, transfer tax and recording fees shall be paid by Tenant. Landlord
covenants and agrees, after receipt of the Short Form Memorandum of Lease and
other documents and agreements, as may be required herein, to have same properly
executed, attested and acknowledged and to return same to Tenant.
22. MODIFICATION: No modifications, alterations, or amendments of this
Lease or any agreements in connection therewith shall be binding or valid unless
in writing and duly executed by both Landlord and Tenant herein.
23. BINDING ON SUCCESSORS AND ASSIGNS: It is further expressly agreed
and understood that all the covenants and agreements herein made, shall extend
to and be binding upon the heirs, devises, executors, administrators, successors
in interest, and assigns of Landlord, and of Tenant as permitted above, and
shall run with the land. Where more than one party shall be Landlord under this
lease, the word Landlord whenever used in this Lease shall be deemed to include
said parties hereto jointly and severally.
24. SEVERABILITY: If any Term or provision of' this Lease or the
application hereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this lease, or the application of
such term or provision to persons whose circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby.
25. CLOSED PREMISES: If Tenant shall abandon the Premises, or cease to
conduct business and allow the Premises to remain vacant for a consecutive
period of sixty (60) days, except for any period the Premises are closed due to
fire or casualty, Landlord shall have the option to declare the term ended,
terminate this Lease and relet the Premises. Upon exercising said option by
Landlord, Tenant shall remain liable under this Lease.
26. UTILITIES: Landlord hereby grants to Tenant, its successors and
assigns, non-exclusive easements appurtenant to the Tenant's Premises for the
purpose of installing, operating, maintaining, repairing, replacing and renewing
any and all utility lines and related facilities over, above, along, and under
the Premises. For such utilities now installed, Landlord hereby grants to
Tenant, its successors and assigns, the right and easement to tie in and use
such existing utilities without any interference to the Shopping Center and
Tenant shall indemnify Landlord from all claims and damages arising from
Tenant's installation of utility services to the Premises.
27. INSURANCE: (a) Tenant shall, throughout the term of this Lease, at
its own cost and expense, provide and keep in force for the benefit of
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Landlord, insurance against loss or damage or injury or destruction of any
building or buildings now or hereafter erected on the Premises resulting from
fire, or from any hazard included in the so-called extended coverage
endorsement, (including sprinkler leakage, collapse, earthquake and vandalism
and malicious mischief). In addition to the foregoing, Tenant shall, at its own
cost and expense, provide and keep in force for the benefit of Landlord,
insurance against loss or damage or injury or destruction of any building or
buildings now or hereafter erected on the Premises resulting from water damage.
Tenant shall provide and keep in force all such insurance in an amount equal to
the full replacement cost of the building, including the fixtures and equipment
therein. If, at any time, Landlord and Tenant cannot agree as to the full
replacement cost of the building, and the fixtures and equipment, the value of
same shall be determined by the insurance company by whom the policy or policies
of insurance are being maintained, and the amount of insurance so determined
shall be the amount of insurance to be carried. Such insurance policies to be
provided for and kept in force by Tenant shall provide that the loss, if any, be
payable to Landlord and Tenant as their respective interests may appear, except
as herein provided, and such insurance policies shall exclude foundations,
excavation, and the usual items customarily excluded in such insurance policies.
Where reference is made to fixtures and equipment hereto intend that the same be
fixtures and equipment appurtenant to and used in connection with the operation
of the building. Landlord may require that the interest of any mortgagee under a
mortgage to which this lease is subordinate, be protected by proper endorsements
to any such policies of insurance, and that the originals of such policies of
insurance be delivered either to such mortgagee or to Landlord.
(b) Tenant shall provide and maintain general liability insurance
(including personal injury and property damage) in the usual form in the amounts
of $1,000,000/$1,000,000 and such policies shall inure to both Landlord and
Tenant; and Tenant shall pay the premium on all said policies from time to time;
and Tenant shall deliver to Landlord certificates for said policies.
(c) In the event of the occurrence of a default as defined in the
paragraph of this Lease headed "DEFAULT OF TENANT", whether or not such default
shall have been waived by Landlord, Landlord shall have the option of requiring
Tenant to provide and maintain rent insurance in an amount equal to the sum of
the annual rent as provided for herein, and any increases in the annual rent,
plus the amount of any additional rent that Tenant is required to pay, for a
period of one (l) year, which policies may be payable to Tenant, or may be
payable to Landlord and Tenant, as their interest may appear, if procurable in
that form. Said policies of insurance shall be deposited with Landlord and
Tenant shall and does hereby assign to Landlord the proceeds of such insurance,
if, as and when collected, and said proceeds shall be applied by Landlord on
account of the annual rent or any increased annual rent or any additional rent
accruing under the terms of this Lease, the balance, if any, to be paid to
Tenant and Tenant shall pay the premium on all said policies from time to time.
It is agreed that the annual rent or the increased annual rent payable hereunder
shall abate to the extent of the proceeds of such insurance policies as may be
received by Landlord, but that Tenant shall remain fully responsible for such
rents which exceed the amount of the proceeds of such insurance.
(d) Each such policy or certificate therefor issued by the insurer
shall, to the extent obtainable, contain an agreement by the insurer that such
policy shall not be cancelled without at least thirty (30) days prior written
notice to Landlord and to any such mortgagee named as loss payee thereunder.
Tenant shall have the right to take out such insurance under a blanket insurance
policy or policies which can cover other properties owned or occupied by Tenant,
as well as the Premises.
(e) Upon the failure at any time on the part of Tenant to procure and
deliver to Landlord any of the policies of insurance or certificates as
hereinabove provided, at least twenty (20) days before the expiration of the
prior insurance policies, if any, or to pay the premiums therefor, Landlord may
from time to time, as often as such failure shall occur, procure such insurance
for a term not exceeding three (3) years and pay the premiums therefor, and any
sums paid for insurance by Landlord shall be and become and are hereby declared
to be rent under this Lease forthwith due and payable, and shall be collectible
accordingly.
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(f) Tenant shall procure an appropriate clause in, or endorsement on,
any fire or extended coverage insurance policy covering the Premises and the
building and personal property, fixtures and equipment located thereon or
therein, pursuant to which the insurance companies waive subrogation or consent
to a waiver of right of recovery, and having obtained such clauses and/or
endorsements of waiver of subrogation or consent to a waiver of right of
recovery, Tenant agrees that it will not make any claim against or seek to
recover from the Landlord for any loss or damage to its property or the property
of others resulting from fire or other perils covered by such fire and extended
coverage insurance; provided, however, that the release, discharge, exoneration
and covenant not to sue herein contained shall be limited by the terms and
provisions of the waiver of subrogation clauses and/or endorsements or clauses
and/or endorsements consenting to a waiver of right of recovery and shall be
co-extensive therewith.
28. INDEMNITY: (a) Tenant shall indemnify Landlord and save it harmless
from suits, actions, damages, liability and expense in connection with loss of
life, bodily or personal injury or property damage arising from or out of any
occurrence in, upon, or at or from the Premises or the occupancy or use by
Tenant of said Premises or any part thereof, or occasioned wholly or in part by
any act or omission of Tenant, its agents, contractors, employees, servants,
invitees, licensees or concessionaires, including the sidewalks and common areas
and facilities within the Shopping Center; and (b) Tenant shall store its
property in and shall occupy the Premises and all other portions of the Shopping
Center at its own risk, and releases Landlord, to the full extent permitted by
law, from all claims of every kind resulting in loss of life, personal or bodily
injury or property damage; (c) Landlord shall not be responsible or liable at
any time for any loss or damage to Tenant's merchandise or equipment, fixtures
or other personal property of Tenant or to Tenant's business; and (d) Landlord
shall not be responsible or liable to Tenant or to those claiming by, through or
under Tenant for any loss or damage to either the person or property of Tenant
that may be occasioned by or through the acts or omissions of persons occupying
adjacent, connecting or adjoining premises; and (e) Landlord shall not be
responsible or liable for any defect, latent or otherwise, in any building in
the Shopping Center or any of the equipment, machinery, utilities, appliances or
apparatus therein nor shall it be responsible or liable for any injury, loss or
damage to any person or to any property of Tenant or other person caused by or
resulting from bursting, breakage or by or from leakage, steam or snow or ice,
running or the overflow of water or sewerage in any part of said Premises or for
any injury or damage caused by or resulting from acts of God or the elements, or
for any injury or damage caused by or resulting from any defect or negligence in
the occupancy, construction, operation or use of any of said Premises, building,
machinery, apparatus or equipment by any person or by or from the acts or
negligence of any occupant of the Premises; (f) Tenant shall give prompt notice
to Landlord in case of fire or accidents in the Premises or of defects therein
or in any fixtures or equipment; (g) In case Landlord shall without fault on its
part be made a party to any litigation commenced by or against Tenant, then
Tenant shall protect and hold Landlord harmless and shall pay all costs,
expenses and reasonable attorneys' fees.
29. REPAYMENT TO LANDLORD: In case Landlord shall pay or be compelled to
pay any sum of money or do any act which shall require the expenditure or
payment of any sum by reason of the failure of Tenant to perform any one or more
of the covenants herein contained, Tenant shall immediately repay the same to
Landlord upon demand, with interest thereon at ten (10%) percent per annum, and
in default hereof, the sum or sums so paid by the Landlord together with all
interest, costs, and damages, shall or may be added as additional rent to the
next installment of rent becoming due on the next rent day, or on any subsequent
rent day fixed by this lease, and shall for all purposes whatsoever be deemed to
be rent due and payable on such rent day, or on any subsequent rent day, as
Landlord may, at Landlord's option, elect, and shall be payable as such, but it
is expressly covenanted and agreed that payment by Landlord of any such sums of
money or the doing of any such acts shall not be deemed to waive or release the
default in the payment or doing thereof by Tenant, or the right of Landlord to
recover possession, at Landlord's election, of the Premises by reason of
Tenant's default with respect to any such payment of act.
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30. LIENS: If any mechanic's or other lien or order for the payment of
money shall be filed against the Premises or any building or improvement thereon
by reason of any change, alteration, addition, or new building or the cost or
expense thereof, or any contract relating to the same, or against Landlord as
owner thereof as a result of or arising out of any labor or material furnished,
or alleged to have been furnished, or to be furnished, to or for the Tenant at
the Premises, Tenant shall, within twenty (20) days after notice to Tenant of
the filing thereof, cause the same to be cancelled and discharged of record by
bond or court order at the election of Tenant, but in a manner to the reasonable
satisfaction of Landlord and shall also defend for Landlord, at Tenant's sole
cost and expense, any action, suit or proceeding which may be brought thereon,
or for the enforcement of the same, and will pay any damages and satisfy and
discharge any judgment entered therein and save harmless Landlord from any
liability, claim, or damage resulting therefrom.
31. BROKER'S COMMISSION. Landlord and Tenant represent and warrant that
there are no claims for brokerage commissions or finders fees in connection with
the execution of this Lease, except as set forth below and each party agrees to
indemnify the other against and hold it harmless from all liabilities arising
from any such claims, including cost of counsel fees. Landlord agrees to pay an
agreed upon brokerage commission to the following broker only: NO BROKER
32. LANDLORD'S LIABILITY: Tenant shall look solely to the estate and
property of the Landlord in the land and building comprising the Premises for
the collection of any judgment (or other judicial process) requiring the payment
of money by Landlord in the event of any default breach by Landlord with respect
to any of the terms, covenants and, and conditions of this Lease to be observed
and/or performed by Landlord, and no other property or assets of the Landlord
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies.
33. NO WAIVER: Failure of Landlord or Tenant to insist upon the strict
performance of any provision or to exercise any option or any rules and
regulations shall not be construed as a waiver for the future of any such
provisions, rule or option. The receipt by Landlord of rent with knowledge of
the breach of any provision of this lease shall not be deemed a waiver of such
breach. No provision of this Lease shall be deemed to have been waived unless
such waiver be in writing signed by each party. No payment by Tenant or receipt
by Landlord of a lesser amount than the monthly rent shall be deemed to be other
than on account of the earliest rent then unpaid 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 in this Lease provided, and no waiver by
Landlord in respect to any other Tenant shall constitute a waiver in favor of
Tenant.
34. INDEMNIFICATION OF LANDLORD: Tenant shall hold Landlord harmless
against any and all claims, damages, suits or causes of action for damages
arising after the commencement of any during the term hereof, or any renewal
term hereof, and any orders, decrees or judgments which may be entered therein,
brought for damages or alleged damages resulting from any injury to person or
property or from loss of life sustained in or about the Premises and the
buildings and improvements thereon, except for those attributable to Landlord's
negligence.
35. NET LEASE: This Lease shall be deemed and constituted to be a net
lease of unimproved land and the Tenant shall pay absolutely net during the
lease term, the rent and all the payments required hereunder, free of any
deductions without abatement, deduction or set off, unless expressly otherwise
provided in this Lease.
36. BANKRUPTCY OR INSOLVENCY: If at any time during the term of this
Lease, or any renewal or extension of this Lease, Tenant shall voluntarily
petition or file for reorganization under the Bankruptcy Laws, or shall take
advantage of any insolvency act by voluntary petition or assignment for the
benefit of creditors, then and in any such event, unless Tenant accepts or
rejects this Lease within sixty (60) days of the filing date or any applicable
time limit set by the bankruptcy laws, Landlord may, at its option, upon at
least ten (10) days notice, declare this Lease terminated
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and of no further force or effect and pay to Tenant an amount equal to six (6)
months rent together with said termination notice.
37. SIGNS: (a) Tenant shall purchase an identification sign and install it
above the canopy or elsewhere in front of the Premises. The design and location
of said sign shall be subject to the approval of Landlord. (b) At Tenant's
expense and subject to Tenant's compliance with all applicable codes, laws and
ordinances and to Tenant's obtaining all required permits and approvals, Tenant
shall have the right to install a tenant identification pylon sign in the area
designated (Proposed Tenant Pylon Sign) on Exhibit A attached hereto. The size,
design and construction of said signs shall be subject to the approval of
Landlord, not to be unreasonably withheld or delayed. Other than the foregoing,
the Tenant shall not place or suffer to be placed or maintain any exterior sign,
awning or canopy, upon or outside the Premises or in the Shopping Center. Tenant
shall maintain any such signs or other installation as may be approved, by
Landlord, in good condition and repair.
38. RULES AND REGULATIONS: Tenant agrees as follows: (a) All deliveries or
shipments of any kind to and from the Premises, including loading and unloading
of goods, shall be made only by way of the rear of the Premises or at any other
location designated by Landlord, and only at such times designated for such
purpose by Landlord;
(b) Garbage and refuse shall be kept in the kind of container
specified by Landlord and shall be placed at the rear or side of the Premises,
for collection at the times specified by Landlord; Tenant to pay the cost of
removal;
(c) No radio, television, phonograph or other similar devices, or
aerial attached thereto (inside or outside) shall be installed without first
obtaining in each instance the Landlord's consent in writing, and if such
consent is given, no such device shall be used in a manner so as to be heard or
seen outside the Premises. No consent shall be required if Tenant is showing
movies on television or other visual display rather than screens;
(d) Tenant shall keep the Premises at a temperature sufficiently
high to prevent freezing of water in pipes and fixtures;
(e) the outside area immediately adjoining the Premises, including
the sidewalk and loading area, shall be kept clean and free from snow, ice, dirt
and rubbish by Tenant, and Tenant shall not place, suffer or permit any
obstructions or merchandise in such areas;
(f) Tenant shall not use the public or common areas in the Shopping
Center for business purposes;
(g) Plumbing facilities shall not be used for any other purpose than
that for which they are constructed, and no foreign substance of any kind shall
be permitted therein;
(h) Tenant shall keep the Premises free of pests and insects and
Tenant shall use, at Tenant's cost, a pest extermination contractor at such
intervals as reasonably necessary;
(i) Tenant shall not burn trash or garbage in or about the Premises
on the Shopping Center;
(j) Tenant shall not place, suffer or permit displays, (except Tenant
may maintain advertisement display windows or portable displays for cinema
attractions) decorations or shopping carts on the sidewalks in front of the
Premises or on or upon any of the common areas of the Shopping Center;
(k) Landlord may amend or add new reasonable rules and regulations
for the use and care of the Premises, the buildings of which the Premises are a
part, and the common areas and facilities.
39. TENANT'S RESPONSIBILITY FOR HAZARDOUS WASTE: Tenant shall not use the
Premises for the generation, storage, treatment or disposal of Hazardous Waste,
and hereby certifies that its operations on or other use of the Premises will
not involve same. For purposes of this lease, the term "Hazardous Waste" is
defined by cumulative reference to the following
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sources as amended from time to time: (1) The Resource Conservation and Recovery
Act of 1976, 42 USC 901 et seq. (RCRA); (2) the Comprehensive Environmental
Resource, Compensation and Liability Act of 1980, Public Law 96-610; and (3) any
federal, state or municipal regulations, rules or orders issued or promulgated
under or pursuant to any of the foregoing by any agency, department or other
administrative, regulatory or judicial body. Tenant shall indemnify Landlord for
any liability imposed should the provisions of this section be or become untrue.
The warranty of this section shall survive the expiration or termination of this
Lease.
40. FORCE MAJEURE: Landlord shall be excused for the period of any
delay in the performance of any obligations hereunder when prevented from so
doing by cause or causes beyond Landlord's control which shall include, without
limitation, all labor disputes, civil commotion, war, war-like operations,
invasion, rebellion, hostilities, military or usurped power, sabotage,
governmental regulations or controls, fire or other casualty, inability to
obtain any material, services or financing or through acts of God.
41. HOLDING OVER: If the Tenant remains in the Premises beyond the
expiration of this Lease, such holding over shall not be deemed to create any
tenancy, but the Tenant shall be a Tenant at Sufferance only at a daily rate
equal to twice the Rent and other charges under this Lease.
42. ESTOPPEL CERTIFICATES: Tenant agrees, at any time during the lease
term and within twenty (20) days of any request from the Landlord, to execute,
acknowledge and deliver to the Landlord a written statement, certifying that
this Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
stating the modifications), and the dates to which minimum rent and other
charges have been paid in advance, if any; whether or not there are any existing
set-offs or defenses against the enforcement of the agreements, terms or
conditions hereof upon the part of Tenant or Landlord to be performed or
complied with (and, if so, specifying the same), it being intended that any such
statement delivered pursuant to this Article may be relied upon by any party
dealing with Landlord.
43. TENANT'S OPTIONS TO EXTEND THE LEASE: Provided that when Tenant
exercises the rights hereinafter set forth, Tenant is not then in default of any
material term or provision of this Lease and further provided that Tenant is
operating its permitted use in the Premises, Tenant shall have the option to
extend the term of this Lease for two (2) consecutive periods of ten (10) years
each subject to and upon all of the terms and conditions contained in this
Lease. Each option period shall be deemed exercised by Tenant unless Tenant
delivers written notice to Landlord at least six months prior to the expiration
of the primary term in the case of the first option to renew or of the expiring
renewal period, in the case of the remaining option to renew, of its intention
not to extend the lease term.
44. PERCENTAGE RENT: During the option periods only, if exercised by
Tenant, (a) The Tenant agrees to pay to Landlord during each year of any
extension or renewal of this Lease, as additional rent, a percentage rent with
respect to each lease year (as hereinafter defined) in the amount equal to five
percent (5%) of Tenant's gross sales (as hereinafter defined) in excess of the
following amounts:
For the period: lease years 22 through 26: $ 8,000,000.00
For the period: lease years 27 through 31: $ 8,800,000.00
For the period: lease years 32 through 36: $ 9,680,000.00
For the period: lease years 37 through 41: $10,648,000.00
(b) The phrase "lease year" as used herein shall mean the twelve full
calendar months immediately following commencement of the term hereof, ending on
the last day of the month in which the Commencement Date occurs, and thereafter
"lease year" shall mean each twelve calendar month period following the
expiration of the first lease year of the term hereof.
(c) Said percentage rent shall be pro-rated and paid
quarter-annually. The first payment of percentage rent shall be paid on or
before the fifteenth (15th) day after the last day of the first three (3)
calendar months of the first lease year of the extended term hereof, and another
payment of percentage rent shall be paid on or before the fifteenth (15th) day
after the end of each successive 3-month-calendar-period
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thereafter. If, at the end of any lease year, the total amount of percentage
rent required to be paid by Tenant exceeds the total amount of percentage rent
required to be paid by Tenant during such lease year, Tenant shall receive a
credit equivalent to such excess which may be deducted by Tenant from the next
payment of minimum rent due under this Lease.
(d) For the purpose of computing the percentage rent payable
hereunder with respect to the first lease year of the extended term hereof, the
gross sales received during the first fractional calendar month, if any, of the
term hereof shall be added to the gross sales for the first 3-month period of
the first lease year of the term hereof.
(e) The term "gross sales" as used herein is hereby defined to mean
the sum of all sales of Tenant and of all licensees, concessionaires and
subtenants of Tenant, from all business conducted upon or from the Premises
whether such sales be evidenced by check, credit, charge account, exchange or
otherwise, and shall include, but not be limited to, the amounts received from
the sale of goods, wares and merchandise and for services performed on or at the
Premises together with the amount of all orders taken or received at the
Premises whether such orders be filled from the Premises or elsewhere, and
whether such sales be made by means of merchandise or other vending devices in
the Premises. If any one or more departments or other divisions of Tenant's
business shall be sublet or conducted by any person, firm or corporation other
than Tenant, (which reference as used in this Article and elsewhere in this
Lease shall not be construed to grant the Tenant any permission to sublease or
permit others to occupy any portion of the Premises other than as hereinafter
expressly provided), then there shall be included in gross sales for the purpose
of fixing the percentage rent payable hereunder all the gross sales of such
departments or divisions, for sales made at the Premises in the same manner and
with the same effect as if the business or sales of such departments and
divisions of Tenant's business had been conducted by Tenant itself. Gross sales
shall not include the amount of any sales, use or gross sales tax imposed by any
federal, state, municipal or governmental authority directly on sales and
collected from customers, provided that the amount thereof is added to the
selling price or absorbed therein and paid by the Tenant to such governmental
authority. No franchise or capital stock tax and no income or similar tax based
upon income or profits as such shall be deducted from gross sales in any event
whatever. Each charge or sale upon installment or credit shall be treated as a
sale for the full price in the month during which such charge or sale shall be
made, irrespective of the time when Tenant shall receive payment (whether full
or partial) therefore.
(f) The Tenant shall deliver to the Landlord monthly reports of its
gross sales within fifteen (15) days after the end of each calendar month during
the extended term hereof. At the end of each lease year, the Tenant shall
deliver to the Landlord a complete statement, certified by a certified public
accountant, showing the gross sales made by the Tenant and by each of its
subtenants, licensees and concessionaires if any, during the period for which
such payment is made, and the Tenant agrees to keep on the Premises or at its
principal office, in accordance with recognized sound accounting practices,
accurate and detailed records and accounts of its gross sales for such periods,
and to require its subtenants, licensees and concessionaires, if any, to keep on
the Premises similar records and accounts. All such records and accounts and all
supporting date shall be retained and preserved by the Tenant and by its
subtenants, licensees and concessionaires, if any, for a period of at least
three (3) years. The Landlord shall have the right to have its auditors, from
time to time and at reasonable times during the Tenant's business hours, make a
special audit of the records and accounts on which such statements are based,
for the purpose of verifying the amount of percentage rent due hereunder. If any
such statement is found to be incorrect by more than three percent (3%) of the
amount shown thereon, the Tenant shall pay for such special audit, but if such
audit proves the statement to be correct within three percent (3%) of the amount
shown thereon, the expense of the special audit shall be borne by the Landlord.
Any deficiency determined by such audit shall, together with interest thereon at
eighteen percent (18%) per annum from the date such additional amount should
have been paid, be forthwith paid to the Landlord upon Landlord furnishing
Tenant a statement thereof. Failure to audit the gross sales for any year shall
not waive the Landlord's right at any time to collect any additional rent which
Landlord may at any time ascertain to be due it. The furnishing by Tenant to the
Landlord of any
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grossly incorrect statement of gross sales shall constitute a breach of this
Lease.
45. END OF TERM: Tenant shall and will on the last day of the term
hereof, or upon any earlier termination of this Lease, or upon any re-entry by
Landlord upon the Premises pursuant to the provisions of this Lease, will and
truly surrender and deliver up, into the possession and use of the Landlord,
without delay, the Premises with the building and other leasehold improvements
including all pipes, plumbing, electric wires, light fixtures, boilers and
heating air-conditioning equipment, and all machinery, in good repair, order and
condition, and broom clean, except for: (i) reasonable wear and tear. Furniture,
trade fixtures and business equipment and merchandise (not constituting part of
the Premises or buildings on the Premises) may be removed by Tenant upon or
prior to termination of this Lease. Any structural injury to the building or
other injury which necessitates fundamental changes in or repairs to the
building caused by such removal shall be repaired by Tenant. Any personal
property of Tenant which shall remain in the building after the termination of
this Lease and/or the removal of Tenant from the building, may, at the option of
Landlord, be deemed to have been abandoned by Tenant and either may be retained
by the Landlord as the property of Landlord or be disposed of, without
accountability in such manner as Landlord sees fit and at Tenant's expense.
Tenant shall not remove building plumbing, heating, ventilation, air
conditioning equipment or lighting fixtures or other leasehold improvements
affixed to the building.
46. TENANT'S RIGHT TO MORTGAGE ITS LEASEHOLD INTEREST:
A. MORTGAGE OF LEASE: The Tenant is given and has the absolute right
without the Landlord's consent to mortgage its interest in this Lease provided
the holder is a reputable institutional lender, and further provided that no
such mortgage shall extend to or affect the fee, the reversionary interest, or
the estate of the Landlord in an to any land or building and improvements now or
hereafter erected on the Premises.
B. NONBINDING EFFECT ON LANDLORD: No mortgage or assignment of this
Lease shall be binding upon the Landlord in the enforcement of its rights under
this Lease, nor shall the Landlord be deemed to have any notice thereof, unless
and until a fully confirmed copy of such instrument affecting such mortgage or
assignment, in form proper for record, shall have been delivered to the
Landlord.
C. NOTICE OF LEASE DEFAULT: If the holder of any such mortgage
shall give the Landlord, before any default shall have occurred in this Lease, a
written notice containing the name and post office address of such holder, the
Landlord shall thereafter give to such holder a copy of each notice of default
by the Tenant at the same time as any such notice of default shall be given by
the Landlord to the Tenant. The copy of such notice of default shall, in each
instance, be deemed duly given to the holder of such mortgage when deposited
with any United States Post Office enclosed in securely sealed envelope,
postpaid, and addressed to such holder at the post office address of such holder
last furnished to the Landlord.
D. CURE OF DEFAULT: The Landlord will accept performance by the holder
of any such mortgage of any term of this Lease required to be performed by the
Tenant, with the same force and effect as though performed by the Tenant, if at
the time of such performance the Landlord shall be furnished with evidence
satisfactory to the Landlord of the interest in the Premises claimed by the
person, firm, or corporation tendering such performance or payment. The holder
of such mortgage shall have ten days after receipt of any such notice of default
within which to cure any default in the payment of rent or additional rent
required to be paid under this Lease and a period of 30 days within which to
cure any other default.
E. SUBORDINATION PROVISION: The Tenant shall have the right to mortgage
this Lease, provided that at no time shall there be more than one such mortgage.
The holder of any mortgage of the Tenant's interest hereunder, shall not acquire
any greater rights hereunder than the Tenant has (except the same right to cure
or remedy the Tenant's default as Tenant), and shall not become entitled to a
new lease in the event of the termination of this Lease. No mortgage of the
Tenant's interest hereunder by the Tenant or by the Tenant's successors or
assigns shall be valid unless:
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(i) At the time of the creation of such mortgage this Lease shall
be in full force and effect;
(ii) Such mortgage shall be subject to all the agreements, terms,
covenants, and conditions of this Lease;
(iii) The Landlord shall receive written notice of the creation of
such mortgage within ten (10) days after the execution and delivery thereof and
such mortgage shall be recorded within twenty (20) days after the execution and
delivery thereof.
(iv) A duplicate original or certified copy of the recording date
of such mortgage shall be served upon the Landlord within ten (10) days after
the return thereof from the office of the recorder.
47. MISCELLANEOUS: Neither the Landlord nor the Tenant nor any of their
agents have made any statement, promise or agreements verbally or in writing in
conflict with the terms of this Lease. Any and all representations by either of
the parties or their agents made during negotiations prior to execution of this
Lease and which representations are not contained in the provisions hereof shall
not be binding upon either of the parties hereto. It is further agreed that this
Lease contains the entire Agreement between the parties, with respect to the
premises and no rights are to be conferred upon the Landlord until this Lease
has been executed by the Tenant.
All terms and words used in this Agreement, regardless of the number and
gender in which they are used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context or sense of this Agreement or any paragraph or clause
herein may require, the same as if such words had been fully and properly
written in number and gender.
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but such
counterparts together shall constitute but one and the same instrument.
The Landlord and Tenant are not and shall not be considered joint
venturers or partners and neither shall have the power to bind or obligate the
other except as set forth herein.
The headnotes to the sections of this Agreement are inserted only as a
matter of convenience and for reference and in no way confine, limit or describe
the scope or intent of any section of this Agreement, nor in any way affect this
Agreement.
The submission of this Lease for examination does not constitute a
reservation of or option for the Premises or any other space within the Shopping
Center and shall vest no right in either party. The Lease shall become effective
as a Lease only upon execution and legal delivery thereof by the parties hereto.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written.
LANDLORD'S WITNESSES: LANDLORD:
NET REALTY HOLDING TRUST
/s/ Tana Weng
- ------------------------
BY: /s/ Louis C. Zicht
------------------------
/s/ Linda S. Messer LOUIS C. ZICHT
- ------------------------ AUTHORIZED REPRESENTATIVE
ATTEST: TENANT:
F & N CINEMA, INC.
/s/ Seth Ferman
- ------------------------
SETH FERMAN, Secretary
BY: /s/ John Nelson
------------------------
JOHN NELSON
ITS: President
20
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ACKNOWLEDGEMENTS
For Lessor:
STATE OF MASSACHUSETTS )
COUNTY OF SUFFOLK ) ss.:
On this 12th day of May, 1993, before me personally came Louis C. Zicht to me
known who being by me duly sworn, did depose and say that he is the Authorized
Representative, as Lessor of Net Realty Holding Trust, the Trust described in
and which executed the foregoing instrument, as Lessor.
/s/ Doris D. Peppard
---------------------------
My commission expires: 12/23/99
STATE OF NEW JERSEY )
COUNTY OF MORRIS ) ss.:
For Lessee:
On this 11th day of May, 1993, before me personally came John Nelson & Seth
Ferman to me known, who being by me duly sworn did depose and say that they the
President & Secretary of the corporation described in and which executed the
foregoing instrument, as Lessee: that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.
/s/ Ann M. Stinziano
------------------------
NOTARY PUBLIC OF NEW JERSEY
ANN M. STINZIANO
A Notary Public of New Jersey
My Commission Expires
December 5, 1996
STATE OF )
COUNTY OF ) ss.:
On this day of , 19 , before me personally came
to me known to be the individual described in and
who, as Lessee, executed the foregoing instrument and acknowledged to me that
he executed the same.
------------------------
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Property Parcel ________________ is intersected by a division line between
la____ herein described and lands, now or formerly of Tivoli Gardens and running
THENCE:
(1) along said division line, North 62 degrees 24 minutes 20 seconds West,
734.01 feet to an angle in same; thence,
(2) South 26 degrees 56 minutes 00 seconds West, 70.81 feet to an angle in
same; thence,
(3) North 61 degrees 45 minutes 00 seconds West 823.71 feet to a point in
the line of lands of the Township of Parsippany-Troy Hills; thence,
(4) along the lands of the Township, North 35 degrees 53 minutes 00
seconds East, 421.14 feet to a point; thence,
(5) South 61 degrees 45 minutes 00 seconds East, 650.26 feet to an angle
in the line of lands, now or formerly of Garden State Propane; thence,
(6) North 35 degrees 46 minutes 00 seconds East, 325.00 feet to a point in
the sideline of U.S. Route 46, also known as Bloomfield Avenue, as shown on "New
Jersey Department of Transportation, General Property Parcel Map Route U.S. 46
(1953) Section 9"; thence,
(7) along Route 46, South 61 degrees 45 minutes 00 seconds East, 58.00
feet to a point where the same is intersected by the northwesterly line of
lands, now or formerly of City Federal Savings and Loan Association; thence,
(8) along lands of City Federal, South 26 degrees 56 minutes 00 seconds
West, 150 feet to an angle in same; thence,
(9) South 61 degrees 45 minutes 00 seconds East, 266.67 feet to an angle
in same; thence,
(10) North 26 degrees 56 minutes 00 seconds East, 135.64 feet to a point
in the aforementioned sideline of Route 46; thence,
(11) along Route 46, South 61 degrees 46 minutes 20 seconds East, 241.59
feet to a point of curvature; thence,
(12) southerly along a curve to the right, leading into Parsippany
Boulevard, as shown on the Route 46 map, having a radius of 102.00 feet for an
arc length of 89.91 feet to a point of tangency in Parsippany Boulevard; thence,
(13) along Parsippany Boulevard, South 11 degrees 15 minutes 59 seconds
East, 321.24 feet to a point of curvature in same; thence,
(14) southerly on a curve to the right, having a radius of 190.00 feet,
for an arc length of 141.60 feet to a point; thence,
(15) southwesterly along Parsippany Boulevard on a non-tangent (broken
back) curve to the right, having a radius of 220.00 feet, for an arc length of
44.29 feet the chord for which bears South 45 06 minutes 12 seconds West, 44.21
feet to a point where the same is intersected by the aforementioned sideline of
Parsippany Boulevard as shown on the Route 287 map; thence,
(16) along Parsippany Boulevard, South 50 degrees 52 minutes 13 seconds
West, 40.96 feet to an angle in same; thence,
(17) South 39 degrees 07 minutes 47 seconds East, 5.00 feet to an angle in
same; thence,
(18) South 50 degrees 52 minutes 13 seconds West, 160.07 feet to the place
of BEGINNING.
This description was prepared by Richard F. Smith, Jr., Professional Land
Surveyor of Morristown, N.J. in accordance with his survey of same dated
August 18, 1989.
<PAGE>
EXHIBIT C
LEASE GUARANTY
Lease dated May 12, 1993 between Net Realty Holding Trust, as Lessor
and F & N Cinema, Inc., as Lessee.
For value received and in consideration of, and as an inducement for
the execution and delivery of the within Lease, the undersigned, John Nelson &
Robert Ferman (together hereinafter referred to as the Guarantor) hereby
guarantees to Lessor, its heirs, executors, administrators, successors and
assigns, the full and prompt payment of rent, including, but not limited to, the
annual rent and additional rent and any and all other sums and charges payable
by Lessee, its heirs, executors, administrators, successors and assigns, under
the Lease, and hereby further guarantees the full and timely performance and
observance of all the covenants, terms, conditions and agreements therein
provided to be performed and observed by Lessee under the Lease, and Guarantor
hereby covenants and agrees to and with Lessor, subject to the limitations
hereinafter provided, that if default shall at any time be made by Lessee, in
the payment of the minimum annual rent and/or additional rent and/or any other
such sums and charges payable by Lessee under the Lease, or if Lessee should
default in the performance and observance of any of the terms, covenants,
provisions or conditions contained in the Lease, Guarantor shall and will
forthwith pay such rent and other such sums and charges to Lessor, and any
arrears thereof, and shall, and will, forthwith pay to Lessor all damages that
may arise in consequence of any default by Lessee under the Lease, including,
without limitation, all reasonable attorneys' fees and disbursements incurred by
Lessor or caused by any such default and/or by the enforcement of this Guaranty.
This Guaranty is an absolute and unconditional irrevocable Guaranty
of payment and of performance. It shall be enforceable against Guarantor,
without the necessity for any suit or proceedings on Lessor's part of any kind
or nature whatsoever against Lessee, and without necessity of any notice of
non-payment, non-performance or non-observance or of any notice of acceptance of
this Guaranty or of any other notice or demand to which Guarantor might
otherwise be entitled, all of which Guarantor hereby expressly waives and
Guarantor hereby expressly agrees that the validity of this Guaranty and the
obligations of the Guarantor hereunder shall not be terminated, affected,
diminished or impaired by reason of the assertion, or the failure to assert, by
Lessor against Lessee, of any of the rights or remedies reserved to Lessor
pursuant to the provisions of the Lease.
This Guaranty shall be a continuing Guaranty, and the liability of
Guarantor hereunder shall in no way be affected, modified, or diminished by
reason of an assignment or subletting of the Lease or by reason of any renewal,
modification or extension of the Lease or by reason of any modification or
waiver of or change in any terms, covenants, conditions or provisions of the
Lease between Lessor and Lessee or by reason of an extension of time that may be
granted by Lessor to Lessee, or by reason of any dealings or transactions
between Lessor and Lessee, whether or not notice thereof is given to Guarantor.
All of Lessor's rights and remedies under the Lease or under this
Guaranty are intended to be distinct, separate and cumulative, and no such right
and remedy therein or herein mentioned is intended to be in exclusion of or a
waiver of any of the others.
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Notwithstanding anything in this Guaranty to the contrary, the
Guarantor obligations as set forth in the Lease and further guarantees payment
of rent, additional rent and other charges due pursuant to the Lease in the
total amount of $50,000.00 for Guarantor and, with respect to the guaranty of
rent, additional rent and other charges, this Guaranty shall terminate and be
null and void after the fifth lease year of the primary term, provided Tenant is
not then in default of the Lease.
John Nelson and Robert Ferman are jointly and severally liable for
the total $50,000.00 guaranteed hereunder.
WITNESS: GUARANTOR:
/s/ Ann M. Stinziano /s/ John Nelson
- ----------------------- -----------------------
ANN M. STINZIANO JOHN NELSON
A Notary Public of New Jersey c/o Cinema 10
My Commission Expires P.O. Box 648, Succasunna, NJ 07876
December 5, 1996 -----------------------------------
ADDRESS
WITNESS: GUARANTOR:
/s/ Ann M. Stinziano /s/ Robert Ferman
- ----------------------- -----------------------
ANN M. STINZIANO ROBERT FERMAN
A Notary Public of New Jersey c/o Cinema 10
My Commission Expires P.O. Box 648, Succasunna, NJ 07876
December 5, 1996 -----------------------------------
ADDRESS
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FIRST AMENDMENT TO GROUND LEASE
THIS AGREEMENT made and entered into this 11th day of July, 1994
BY AND BETWEEN: THE TRUSTEES OF NET REALTY HOLDING TRUST, a
trust organized pursuant to a Declaration of Trust dated
July 1, 1970, whose address is c/o Net Properties
Management, Inc., 535 Boylston Street, Boston,
Massachusetts (hereinafter referred to as "Landlord")
AND: F & N CINEMA, INC., a New Jersey corporation, with
its principal place of business at 21 Sunset Strip,
P.O. Box 648, Succasunna, New Jersey 07876
(Hereinafter referred to as "Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into a Ground Lease agreement dated
May 12, 1993 ("Lease"); and
WHEREAS, said Lease provides in part that a building to be constructed by
the Tenant approximately 32,000 square feet in size is to be located on land as
described in said Lease; and
WHEREAS, the term of lease, rent, and other provisions have been mutually
agreed upon as set forth in said Lease; and
WHEREAS, during the course of construction by the Tenant of said building,
Tenant made a determination that an increase in the lobby area of the structure
would result in a more comfortable and esthetically pleasing business operation;
and
WHEREAS, Landlord and Tenant are agreeable to allow the expansion in
accordance with the terms set forth herein;
NOW, THEREFORE, in consideration of the sum of One ($1.00) Dollar and
other good and valuable consideration, the parties hereto agree as follows:
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1. INCREASE IN SIZE OF STRUCTURE. The Landlord hereby agrees that Tenant
may seek all municipal, state and federal approvals as may be necessary for the
construction of up to an additional 2,315 square feet of building to be used as
additional lobby space. If said approvals are secured, Tenant shall construct
upon the land described in Exhibit A attached hereto (hereinafter referred to as
the "Premises"), the theater building as described in the Ground Lease as
modified by the additional 2,315 square feet building space as set forth in this
First Amendment to Ground Lease which shall be used to expand the lobby area
only.
2. CONSTRUCTION OF BUILDING. Except as provided in this First Amendment
to Ground Lease, the building, including the additional space provided for
herein, shall be constructed in accordance with the terms of the Lease.
3. RENT. In the event that all approvals are received and the building is
constructed with the additional square footage for the expanded lobby area, the
rent during the primary term and any extensions of the Ground Lease as set forth
in Paragraph 3 of the Ground Lease, shall be increased by the following amounts
to cover the additional 2,315 square feet of building space:
A. For the period from the commencement of the primary term through
the end of the 8th lease year, $9,398.90 per year;
B. For the period from the 9th lease year to the end of the 15th
lease year, $10,348.05 per year;
C. For the period from the 16th lease year to the end of the 21st
lease year, $11,389.80 per year;
D. For the period from the 22nd lease year to the end of the 26th
lease year, $12,524.15 per year;
E. For the period from the 27th lease to the end of the 31st lease
year, $13,774.25 per year;
F. For the period from the 32nd lease year to the end of the 36th
lease year, $15,140.10 per year;
G. For the period from the 37th lease year to the end of the 41st
lease year, $16,668.00 per year.
Said rent shall be paid to the Landlord in equal monthly installments on
or before the first day of each month, in advance, without offset or deduction
whatsoever together with all
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applicable sales and revenue taxes imposed by the State of New Jersey or local
governmental authorities, with rent prorated for any portion of a month at the
commencement of the primary term.
4. SUBJECT TO TENANT'S APPROVALS. Landlord's approval to permit Tenant
to construct the additional square footage is subject to receiving written
approval from the department stores, Marshall's and McCrory's, which are located
in the Morris Hills Shopping Center. Notwithstanding the above, Tenant may
immediately apply for such municipal, state and federal approvals as may be
necessary to construct the additional square footage in the theater building and
Landlord will grant its consent and sign such applications as may be necessary
to go forward with the applications for approval. In the event, that written
approval is not obtained from Marshall's and McCrory's for this additional
square footage, this First Amendment to Ground Lease shall be declared null and
void and shall have no further effect. Landlord and Tenant shall then be
obligated by the terms of the original Ground Lease agreement, without
modification.
5. ADDITIONAL REPRESENTATIONS OF TENANT. Tenant represents that the
additional 2,315 square feet of the building space for which it is seeking
approval and which is the subject of this First Amendment to Ground Lease, will
only be used for additional lobby area. As a result of this additional space,
there shall be no increase in the number of theaters beyond the 12 previously
approved. Furthermore, there will be no additional seats nor any decrease in the
number of parking spaces available in the shopping center over and above those
previously approved.
6. RENT COMMENCEMENT DATE. Notwithstanding anything contained in the
Ground Lease to the contrary, the commencement date of the primary term of the
Ground Lease shall be the earlier of (a) November 18, 1994 or (b) when F & N
Cinema, Inc. opens the building to the public for the normal conduct of
business.
7. VALIDITY OF ORIGINAL GROUND LEASE TERMS. Except as specifically
modified by the terms of this First Amendment to Ground Lease, all terms of the
original Ground Lease are hereby ratified and in full force and effect from both
the Landlord and Tenant. The terms of this First Amendment to Ground Lease shall
only supersede over any inconsistent terms and provisions of the Ground Lease.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals or
caused these present to be signed by their
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proper corporate officers and caused their proper corporate seals to be affixed
hereto, the day and year first above written.
WITNESS/ATTEST: LANDLORD:
NET REALTY HOLDING TRUST
By: /s/ Louis C. Zicht
- ------------------------- --------------------------
Louis C. Zicht
Authorized Representative
TENANT:
F & N CINEMA, INC.
/s/ Robert Ferman By: /s/ John Nelson
- ------------------------- ---------------------------
ROBERT FERMAN, JOHN NELSON, President
Acting Secretary
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LESSEE: F & N Cinema, Inc.
LESSOR: Net Realty Holding Trust
c/o Net Properties Management, Inc.
535 Boylston Street
Boston, Massachusetts 02116
PROPERTY: Morris Hills Shopping Center
TABLE OF CONTENTS
PARAGRAPH TITLE PARAGRAPH NUMBER
Premises 1
Term 2
Rent 3
Preparation of Premises by Landlord and Tenant 4
Covenant of Title and Quiet Enjoyment 5
Use 6
Operation of Business 7
Maintenance and Repairs 8
Lessee's Failure to Repair 9
Utility Payments 10
Additional Rent 11
Common Areas 12
Destruction and Damage 13
Alterations and Improvements 14
Eminent Domain 15
Mortgaging of Landlord's Estate 16
Assignment and Subletting 17
Default of Tenant 18
Security Deposit 19
Notice 20
Recording 21
Modification 22
Binding on Successors and Assigns 23
Severability 24
Closed Premises 25
Utilities 26
Insurance 27
Indemnity 28
Repayment to Landlord 29
Liens 30
Broker's Commission 31
Landlord's Liability 32
No Waiver 33
Indemnification of Landlord 34
Net Lease 35
Bankruptcy or Insolvency 36
Signs 37
Rules and Regulations 38
Tenant's Responsibility for Hazardous Waste 39
Force Majeure 40
Holding Over 41
Estoppel Certificates 42
Tenant's Option to Extend the Lease 43
Percentage Rent 44
End of Term 45
Tenant's Right to Mortgage Its Leasehold Interest 46
Miscellaneous 47
<PAGE>
SECOND AMENDMENT TO GROUND LEASE
THIS AGREEMENT is made and entered into on December 19, 1994,
BY AND BETWEEN: THE TRUSTEES OF NET REALTY HOLDING TRUST, a
trust organized pursuant to a Declaration of Trust dated
July 1, 1970, whose address is c/o Net Properties
Management, Inc., 535 Boylston Street, Boston,
Massachusetts (hereinafter referred to as "Landlord")
AND: F & N CINEMA, INC., a New Jersey corporation, with its
principal place of business at 21 Sunset Strip, P.O. Box
648, Succasunna, New Jersey 07876 (Hereinafter referred
to as "Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into a Ground Lease agreement dated
May 12, 1993 ("Lease"); and
WHEREAS, said Lease provides in part that a building to be constructed by
the Tenant, approximately 32,000 square feet in size, is to be located on land
as described in said Lease; and
WHEREAS, the term of lease, rent, and other provisions have been mutually
agreed upon as set forth in said Lease; and
WHEREAS, during the course of construction by the Tenant of said building,
Tenant made a determination that an increase in the lobby area of the structure
would result in a more comfortable and esthetically pleasing business operation;
and
WHEREAS, Landlord and Tenant entered into a First Amendment to Ground
Lease dated July 11, 1994 permitting the increase of 2315 square feet in size of
the building for a total of 34,315 square feet; and
WHEREAS, upon completion of the building, it has been determined that the
actual size of the structure is 34,328.88 square feet; and
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WHEREAS, Landlord and Tenant are agreeable to allow modification of the
Lease to reflect the increase in square footage in accordance with the terms set
forth herein;
NOW, THEREFORE, in consideration of the sum of One ($1.00) Dollar and
other good and valuable consideration, the parties hereto agree as follows:
1. INCREASE IN SIZE OF STRUCTURE. Tenant represents to Landlord that
Tenant has obtained all municipal, state and federal approvals necessary for the
construction of a 34,328.88 square feet building on the premises.
2. CONSTRUCTION OF BUILDING. Except as provided in the First and Second
Amendments to Ground Lease, the building, including the additional space
provided for herein, is constructed in accordance with the terms of the Lease.
3. ADDITIONAL REPRESENTATIONS OF TENANT. Tenant represents that the
additional 2,328.88 square feet of building space, which is the subject of the
First and Second Amendment to Ground Lease, will only be used for additional
lobby area. As a result of this additional space, there shall be no increase in
the number of theaters beyond the 12 previously approved. Furthermore, there
will be no additional seats nor any decrease in the number of parking spaces
available in the shopping center over and above those previously approved.
4. RENT. Paragraph 3 of the First Amendment To Ground Lease is hereby
deleted and replaced with the following:
The rent during the primary term and any extensions of the Ground Lease as
set forth in Paragraph 3 of the Ground Lease, shall be increased by the
following amounts to cover the additional 2,328.88 square feet of building
space:
A. For the period from the commencement of the primary term through
the end of the 8th lease year, $9,455.25 per year;
B. For the period from the 9th lease year to the end of the 15th
lease year, $10,410,09 per year;
C. For the period from the 16th lease year to the end of the 21st
lease year, $11,458.09 per year;
D. For the period from the 22nd lease year to the end of the 26th
lease year, $12,599.24 per year;
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E. For the period from the 27th lease year to the end of the 31st
lease year, $13,856.84 per year;
F. For the period from the 32nd lease year to the end of the 36th
lease year, $15,230.88 per year;
G. For the period from the 37th lease year to the end of the 41st
lease year, $16,767.94 per year.
Said rent shall be paid to the Landlord in equal monthly installments on
or before the first day of each month, in advance, without offset or deduction
whatsoever together with all applicable sales and revenue taxes imposed by the
State of New Jersey or local governmental authorities, with rent prorated for
any portion of a month at the commencement of the primary term.
5. VALIDITY OF ORIGINAL GROUND LEASE TERMS. Except as specifically
modified by the terms of the First Amendment to Ground Lease and this Second
Amendment to Ground Lease, all terms of the original Ground Lease are hereby
ratified and in full force and effect from both the Landlord and Tenant. The
terms of this Second Amendment to Ground Lease shall supersede any inconsistent
terms and provisions of the Ground Lease and First Amendment to Ground Lease.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
or caused these present to be signed by their proper corporate officers and
caused their proper corporate seals to be affixed hereto, the day and year first
above written.
WITNESS/ATTEST: LANDLORD:
NET REALTY HOLDING TRUST
/s/ Illegible By: /s/ Louis C. Zicht
- -------------------------- -----------------------------
Louis C. Zicht
Authorized Representative
TENANT:
F & N CINEMA, INC.
/s/ Martin Drescher By: /s/ John Nelson
- -------------------------- ------------------------------
MARTIN DRESCHER, JOHN NELSON, President
Assistant Secretary
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ACKNOWLEDGMENTS
FOR LANDLORD:
STATE OF MASSACHUSETTS )
COUNTY OF SUFFOLK ) ss.:
On this 23rd day of December 1994, before me personally came Louis C.
Zicht to me known who being by me duly sworn, did depose and say that he is the
Authorized Representative of the Trustees of Net Realty Holding Trust, the Trust
described in and which executed the foregoing instrument, as Landlord.
/s/ Karin M. Kosmenko
-----------------------------
Karin M. Kosmenko
Notary Public
My Commission Expires February 16, 2001
FOR TENANT:
STATE OF NEW JERSEY )
COUNTY OF MORRIS ) ss.:
On this 29th day of December 1994, before me personally came JOHN Nelson
AND MARTIN DRESCHER to me known who being by me duly sworn did depose and say
that they are the President and Assistant Secretary of the corporation described
in and which executed the foregoing instrument, as Tenant; that they know the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation; and that they signed their names thereto by like order.
/s/ Ann M. Stinziano
--------------------------------
NOTARY PUBLIC OF NEW JERSEY
ANN M. STINZIANO
(seal) A Notary Public of New Jersey
My Commission Expires December 5, 1996
4
ASSIGNMENT, ACCEPTANCE OF ASSIGNMENT
AND
CONSENT TO ASSIGNMENT OF LEASE
This Assignment, Acceptance of Assignment and Consent to Assignment
of Lease is made this 21st day of November, 1997 between ROXBURY CINEMA INC., a
New Jersey corporation whose principal office is located at 21 Sunset Strip,
Roxbury Mall, Succasunna, New Jersey 07876 and (hereinafter referred to as the
"Assignor"), and CCC Succasunna Cinema Corp., a corporation organized and
existing under the laws of Delaware, whose principal office is located at 7
Waverly Place, Madison, New Jersey 17940 (hereinafter collectively referred to
as the "Assignee").
WITNESSETH:
WHEREAS, Assignor entered into a Lease with FIRST ROXBURY COMPANY,
dated May 24, 1989, which Lease was modified by Lease Modification Agreement
dated May 2, 1990 between Roxville Associates, as successor Landlord, and
ROXBURY CINEMA INC., and further modified by Second Lease Modification Agreement
dated December 20, 1994 between Roxville Associates, and ROXBURY CINEMA INC., 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
WHEREAS, the Assignee wishes to accept this Assignment of Lease as
of November 21st, 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, Roxville 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 assigns all of its right, title and interest
under and pursuant to the Lease Agreement from and after November 21st, 1997 to
Assignee, and its respective successors and/or assigns.
2. Assignee hereby accepts this Assignment of Lease, and agrees from
and after November 21st, 1997 to assume, perform and abide by all of the terms,
provisions and obligations of the Assignor under the Lease Agreement.
3. Assignor shall be relieved from liability for the payment of rent
and the performance of all obligations and covenants under and pursuant to the
Lease Agreement from and after the date of this Assignment, Acceptance of
Assignment and Consent to Assignment of Lease.
4. This Assignment and Acceptance of Assignment of Lease shall be
binding upon the parties hereto and their respective heirs, successors and
assigns.
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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.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
as of the date and year hereinabove first written.
ATTEST: ROXBURY CINEMA INC., Assignor
/s/ Seth Ferman By: /s/ John Nelson
- -------------------------- ----------------------------
Seth Ferman, Secretary John Nelson, President
ATTEST: CCC Succasunna Cinema Corp., Inc.
Assignee
/s/ S. H. Mayo By: /s/ A. Dale Mayo
- -------------------------- ----------------------------
S. H. Mayo, Secretary A. Dale Mayo, President
CONSENT TO ASSIGNMENT
Roxville Associates hereby consents to the assignment of the Lease Agreement to
the above-named Assignee on the express understanding and condition that the
Assignor shall not be relieved from liability for the payment of the rent and
the performance of all obligations and covenants provided in the Lease
Agreement, 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:
Roxville Associates
/s/ Illegible By: /s/ Salvatore A. Davino
- -------------------------- ----------------------------
Salvatore A. Davino
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=====================================================================
FIRST ROXBURY COMPANY,
Landlord
TO
ROXBURY CINEMA INC.
Tenant
LEASE
Premises: Cinema Ten Theater
at
21 Sunset Strip, Roxbury Mall, Succasunna, New Jersey
=====================================================================
<PAGE>
TABLE OF CONTENTS
1. Premises Page 1
2. Condition and Preparation of Premises Page 1
3. Certificate of Occupancy Page 2
4. Term Page 2
5. Rent Page 3
6. Real Estate Taxes Page 3
7. Common Areas Charge for Operating Costs Page 4
8. Additional Rent Page 5
9. Deleted Prior To Execution Page 6
10. Use Clause Page 6
11. Utilities Page 6
12. Insurance Page 6
13. Indemnity Page 7
14. Cleanliness Page 7
15. Broken Glass Page 7
16. Repairs and Replacements Page 7
17. Alterations: Trade Fixtures Page 8
18. Damage: Acts of God Page 8
19. Subordination Page 9
20. Quiet Enjoyment Page 9
21. Access Page 9
22. Condemnation Page 10
23. Assignment Page 10
24. Surrender Page 11
25. Default Page 11
26. Deleted Prior To Execution Page 11
27. Notice on Default Page 11
28. Remedies on Default Page 12
29. Certificate of Lease Status Page 13
30. Landlord's Lien Page 13
31. Signs Page 14
32. Parking and Maintenance of Parking Areas Page 14
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33. Compliance with Mortgage Requirements Page 14
34. Rules and Regulations Page 14
35. Headings Page 14
36. Compliance with Laws Page 14
37. Force Majeure Page 15
38. Performance of Tenant's Obligations Page 15
39. Waiver Page 15
40. Execution Page 15
41. Commission Page 15
42. Additional Remedies Page 15
43. Notices Page 15
44. Binding Effect Page 16
45. Severability Page 16
46. Supercession Page 16
47. Definition and Liability of Landlord Page 16
48. ECRA Compliance Page 17
49. Restrictive Covenant Page 17
50. Lease Conditional Page 17
51. Alteration Fund Page 18
52. Construction Conditions Page 19
53. Percentage Rent Page 21
54. Renewal Options Page 22
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LEASE AGREEMENT
THIS AGREEMENT, made this 24th day of May, 1989 between FIRST ROXBURY
COMPANY, with a principal office at 241-A Millburn Avenue, Millburn, New Jersey
07041, hereinafter referred to as "LANDLORD", and ROXBURY CINEMA INC., with a
principal office at 21 Sunset Strip, Roxbury Mall, Succasunna, New Jersey 07876,
hereinafter referred to as "TENANT".
WITNESS THAT:
1. PREMISES. The Landlord demises unto the Tenant and the Tenant leases
from the Landlord, for the term and upon the terms and conditions hereinafter
set forth certain premises consisting of (a) the premises currently under lease
by Tenant (the "EXISTING PREMISES") pursuant to that certain lease dated June
28, 1985 by and between Landlord and Tenant (the "EXISTING LEASE") consisting of
approximately 12,388 square feet and (b) a piece of vacant land immediately
adjacent to the Existing Premises as shown on Exhibit B annexed hereto (the
"ADDITIONAL PREMISES") upon which Tenant intends to construct an addition
containing approximately an additional 11,478 square feet (the "ADDITION") (the
Existing Premises and Additional Premises are hereinafter collectively referred
to as "PREMISES", or "LEASED PREMISES", or "DEMISED PREMISES"). The Demised
Premises are located in a shopping center (hereinafter referred to as "SHOPPING
CENTER") shown by cross-hatching on Exhibit A, attached hereto and made a part
hereof. The lease of the Demised Premises to Tenant hereunder shall include the
right to the non-exclusive use, in common with other facilities designed for
common use, as may be installed by Landlord, and of such other facilities as may
be provided or designated from time to time by the Landlord for the common use
of tenants in the Shopping Center and "Landlord's Property" (as hereinafter
defined), subject to the terms and conditions of this Lease.
2. CONDITION AND PREPARATION OF PREMISES. (a) The Landlord
warrants that it is the owner of the tract of land shown on Exhibit A,
hereinafter referred to as the "LANDLORD'S PROPERTY".
(b) The Tenant has examined the Demised Premises, and accepts them
in their present condition (except as otherwise expressly provided herein) and
without any representation on the part of the Landlord or its agents as to the
present or future condition of said Premises except that Landlord represents to
Tenant that water, sewer, electricity and gas are available to points within the
Demised Premises in quantities sufficient for the construction of the Addition
and use and operation of the Addition and Existing Premises for the purposes
contemplated hereby. In the event Tenant shall require access to areas outside
the Demised Premises for the purposes of obtaining, making or expanding
connections to existing systems (whether public or private) furnishing water,
sewer, electrical or gas service to the Demised Premises, then Landlord hereby
grants Tenant permission and right over Landlord's Property for the purpose of
obtaining, making or expanding connections to such systems and Tenant shall be
permitted to take such material and equipment onto Landlord's Property and
perform such work and/or excavations thereto as may be required. Landlord
represents that the Demised Premises are zoned for the operation of a theatre
comprising at least 23,866 square feet, provided that Tenant complies with the
Site Plan dated December 1, 1987 by EI Associates (Drawing No. 11101), and the
resolution approving said Site Plan approved March 1, 1988 (the "Resolution") by
the Board of Adjustment of the Township of Roxbury for the construction of the
Addition. Landlord agrees to perform, at such reasonable time as requested by
Tenant, the paving and fence work required under the Resolution at Landlord's
expense.
(c) On the Commencement Date, as defined hereafter, the Tenant shall
proceed with due diligence to construct the Addition and install such stock,
fixtures, and equipment and perform such other work necessary or appropriate to
prepare the Demised Premises for the opening of business.
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(d) The Tenant shall have the right to run electric wires or make
such other installations in the Leased Premises and Landlord's Property as may
be necessary to effect a successful operation in the Leased Premises, provided
that the Tenant has such electric wires or other installations approved by the
Board of Fire Underwriters to the extent required by legal or insurance
requirements, the cost thereof to be borne by the Tenant and Tenant further
agrees at its expense to repair any damage to Landlord's Property as a result of
such installations and the maintenance and repair thereof.
(e) The conditions of the rights granted to Tenant pursuant to this
Section 2 shall be as follows:
(i) Landlord shall not be responsible or liable to Tenant
in any manner whatsoever for any loss, damage, destruction or
disappearance of any of the aforesaid items unless caused by the
wilfull or negligent acts or omissions of Landlord;
(ii) Tenant shall have procured liability insurance as
required hereinafter, pursuant to Section 12A hereto;
(iii) Tenant shall have the right to remove all equipment and
stock in the event the Lease rental never commences and upon the
expiration or termination of the term of this Lease.
3. CERTIFICATE OF OCCUPANCY. The Tenant covenants and agrees that the
Premises, when ready for occupancy, will comply with all municipal, state and
county rules and regulations, and agrees to procure a Certificate of Occupancy
(temporary or permanent), if required, issued by the municipality upon the
completion of the Demised Premises and prior to the operation of the Additional
Premises for business by the Tenant. If a temporary certificate is issued to the
Tenant, then the Tenant shall procure a permanent certificate prior to the
expiration of the temporary certificate, as same may be extended. To the extent
required, Landlord shall cooperate with Tenant to obtain the certificates of
occupancy required hereunder, including the execution of applications and
affidavits, provided that Landlord shall not incur any liability or expense in
connection therewith unless Landlord shall agree to be responsible therefor or
Tenant agrees to reimburse Landlord therefor.
4. TERM. Provided the contingencies set forth in Section 50 of this Lease
are satisfied, the term of this Lease shall commence on the date Tenant shall
obtain an unconditional building permit for the construction of the Addition
(hereinafter referred to as the "COMMENCEMENT DATE"), and shall end (unless
sooner terminated as hereinafter provided) at midnight on December 31 of the
thirtieth (30th) "Lease Year" after the "Rental Commencement Date" (as such
quoted terms hereinafter defined). Tenant's obligation to pay the rents reserved
hereunder shall not commence until the earlier of (a) two (2) years following
the Commencement Date or (b) the date that Tenant shall occupy the entire
Demised Premises (including the Addition) for the conduct of and be open for its
business (which earlier date is hereinafter referred to as the "RENTAL
COMMENCEMENT DATE"). Tenant shall be permitted to enter upon, measure, perform
tests and prepare the Additional Premises for the construction of the Addition
prior to the Commencement Date subject to all the terms, covenants and
conditions of this Lease except the covenant to pay the rents reserved
hereunder.
Landlord and Tenant hereby acknowledge that Tenant is presently occupying
the Existing Premises under a lease by and between Roxbury Associates
(Landlord's predecessor-in-interest) and Tenant dated June 28, 1985 as same may
have thereafter been amended, modified, restated and/or superceded
(collectively, the "PRIOR LEASE"). Notwithstanding anything contained in this
lease or in the Prior Lease to the contrary, Landlord and Tenant covenant and
agree that as of the Commencement Date, the Prior Lease shall be superceded by
this Lease and thereafter the rights of Landlord and Tenant relating to the
Demised Premises shall be governed by the terms of this Lease, except that
Tenant shall continue to pay the rents reserved under the Prior Lease to
Landlord until the Rent Commencement Date hereunder.
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The term "LEASE YEAR" as used herein shall mean January 1 to December 31
of each calendar year occurring after the Rental Commencement Date. In the event
the Rental Commencement Date shall occur on or before June 30 of any calendar
year, then: (i) the first (1st) Lease Year shall be deemed to be the calendar
year in which the Rental Commencement Date shall occur; (ii) the "Percentage
Rent" (as defined in Section 53 hereof) shall be based on annual gross sales of
$1,400,000.00 prorated based on the number of days remaining in such calendar
year from the Rental Commencement Date to December 31 of such calendar year; and
(iii) the second (2nd) Lease Year shall commence on January 1 of the immediately
succeeding calendar year. In the event the Rental Commencement Date shall occur
after June 30 of any calendar year (the "SHORT YEAR"), then: (i) the first (1st)
Lease Year shall be deemed to commence on January 1 of the immediately
succeeding calendar year; (ii) the Percentage Rent payable for the Short Year
shall be based on annual gross sales of $1,400,000.00 prorated based on the
number of days remaining in such calendar year from the Rental Commencement Date
to December 31 of such calendar year; (iii) the term of this Lease shall expire
on December 31 of the thirtieth (30th) Lease Year and (iv) the fixed rent
payable for the Short Year shall be at the rate of $147,000.00 per year
($12,250.00 per month).
5. RENT. TO HAVE AND TO HOLD the same for a term of thirty (30) years as
described in Section 4 ("Term").
(a) Commencing with the Rental Commencement Date, Tenant agrees to
pay as fixed minimum annual rent for the Leased Premises during the term of this
Lease, the following sums:
Lease Year Annually Monthly
---------------- -------------- -------------
1-5 $147,000.00 $12,250.00
6-10 154,350.00 12,862.50
11-15 162,067.50 13,505.62
16-20 170,170.87 14,180.91
21-25 178,679.41 14,889.95
26-30 186,563.38 15,546.95
The fixed minimum rent shall be payable in equal monthly installments on the
first of each month. All such monthly installments of the fixed minimum annual
rent shall be payable to the Landlord, in advance subject to no offset or
deductions of any kind or nature whatsoever (except as otherwise provided in
this Lease), without previous notice or demand therefor, with the first monthly
installment to be due and payable upon the Rental Commencement Date and each
subsequent monthly installment to be due and payable on the first day of each
and every month following the first month after the Rental Commencement Date. If
the Rental Commencement Date is a date other than the first day of a month, rent
for the period commencing with and including the Rental Commencement Date until
the first day of the following month shall be prorated based on the number of
days in such month.
(b) Except as otherwise provided herein, in addition to the fixed
minimum annual net rent, Tenant shall pay all other charges provided for
hereunder, without previous notice or demand therefor, and in a manner and upon
the conditions herein set forth, all other charges of any kind or nature
attributable to the Premises, except as specifically set forth herein, it being
the intention of the parties that the rent payable to Landlord hereunder shall
be absolutely net. Landlord shall have no expense attributable to the operation
and maintenance of the Premises (except as specifically reserved by the Landlord
in this Lease), except payment of its own mortgage costs and except as otherwise
provided herein.
6. REAL ESTATE TAXES AND OTHER GOVERNMENTAL CHARGES. Tenant shall pay as
additional rent its pro rata share of any and all real estate taxes and
assessments, municipal water and sewer charges and other governmental levies and
charges, general and special, ordinary and extraordinary, foreseen and
unforeseen, of any kind or nature whatsoever, which are or may be assessed or
imposed upon the Shopping
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Center which constitutes Block 45, Lots 23.3 on the Tax Map of the Township of
Roxbury, or which may become payable at any time during the term of this Lease.
Tenant's pro rata share shall be deemed to be that fraction whose numerator is
the total square footage of Tenant's Demised Premises and whose denominator is
the total square feet of leasable space in the Shopping Center as the same may
increase or decrease. The Shopping Center after the construction of the Addition
will contain 60,493 total square feet of leasable space. For the purposes of
this Article 6, Tenant's pro rata share shall currently be 39.45% which has been
computed by divided 23,866, the total leasable square foot area of the Leased
Premises after completion of the Addition, by 60,493, the total leasable square
foot area of the Shopping Center after construction of the Addition. Except as
hereinafter specifically provided with respect to Tenant's construction of the
Addition, Tenant shall not be obligated to pay for any increases in real estate
taxes and assessments or other governmental levies and charges to the extent the
same result from any additions or expansions of the Shopping Center. In the
event any assessment shall be assessed or imposed which may be payable in
installments, the same shall be included in Taxes in any year based on the
maximum permitted deferral of such assessment and only to the extent such
installments may be payable during the term of this Lease.
(a) Nothing contained in this Lease shall require Tenant to pay any
franchise, corporate, estate, inheritance, succession, capital levy or transfer
or sales tax of the landlord, or any income, profits or revenue tax or any other
tax assessment, charge or levy upon the rent payable by Tenant hereunder;
provided, however, that if at any time during the term of this Lease or any
renewal thereof, a tax in lieu of or in total or partial substitution for the
real estate tax, whether a tax on rents or otherwise, shall be assessed against
the Landlord or upon the rent as a substitution in whole or in part for real
estate taxes assessed on the land and building, such substituted tax shall be
deemed to be included in the calculation of the amount required to be paid by
the Tenant hereunder as if the Shopping Center were the sole asset of Landlord
and the rental derived therefrom were Landlord's only income. Tenant shall pay
100% of the taxes resulting from any additional assessment imposed upon the
Leased Premises and payable during the course of construction attributable to
Tenant construction of the Addition.
(b) Based upon the tax bills received by Landlord, Landlord shall
estimate Tenant's annual pro rata share of real estate taxes and one-twelfth
(1/12th) of the amount so estimated shall be paid on the first day of each
calendar month in advance. Within ninety (90) days after the end of each tax
year, Landlord shall furnish Tenant a statement in reasonable detail of the
actual real estate taxes prepared in accordance with sound accounting practices,
and there shall be an adjustment between Landlord and Tenant, with payment to or
repayment by Landlord, as the case may require, to the end that Landlord shall
receive the entire amount of Tenant's annual pro rata share for such period and
Tenant shall receive a refund of any overpayment. In the event that Landlord
shall revise Landlord's estimate of Tenant's annual pro rata share of real
estate taxes, Tenant shall have thirty (30) days from its receipt of Landlord's
revised estimate to begin paying the monthly installments of such revised amount
and thereafter shall pay the monthly installments of such revised amount on the
first day of each calendar month.
7. COMMON AREAS CHARGE FOR OPERATING COSTS. Tenant shall pay to the
Landlord, as additional rent during each lease year, a proportionate share of
the "Operating Costs", as hereinafter defined, of the common areas and
facilities in the Shopping Center. Tenant's proportionate share of Operating
Costs for the purposes of this Paragraph 7 shall mean 39.45%, which has been
computed by divided 23,866, the leasable square foot area of the Leased Premises
after the completion of the Addition, by 60,493. Tenant's Proportionate Share of
Operating Costs shall be subject to increase or decrease with changes in the
leasable square foot area of the Shopping Center. Provided Tenant's
proportionate share of Operating Costs shall not increase as a result thereof,
Landlord may combine the Operating Costs for the Shopping Center with those of
the shopping centers adjoining the Shopping Center (which are currently owned by
Landlord) (the "EXPANDED CENTER"), provided Tenant's proportionate share shall
be recomputed as above provided to reflect the leasable square foot area of the
Expanded Center. "OPERATING COSTS" as used herein shall mean the total costs and
expenses incurred by Landlord, its agents, and/or designees for operating,
maintaining, repairing and/or replacing all or any part of the common areas (and
any installation therein, thereon, thereunder or thereover), for the following:
the total costs and expenses incurred in cleaning, planting, replanting and
maintaining the landscaping; the cost of the following types of Landlord's
insurance,
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bodily injury, public liability, property damage liability, automobile parking
lot liability insurance provided such insurance does not exceed that carried by
owners of similar properties, sign insurance carried by Landlord for the common
areas in limits reasonably selected by Landlord and Landlord will provide
evidence of such insurance together with its demand for payment; repairs,
repaving, line repainting, exterior repainting, rental and maintenance of signs
and equipment in connection with the operation maintenance of repairs of the
common areas, lighting, sanitary control, removal of snow and ice, roofs, trash
and rubbish, garbage and other refuse, utility charges for serving the common
areas (and any onsite and/or offsite sanitary treatment plants(s) servicing the
Shopping Center and all pipes leading to and from same), the cost of personnel
to implement such services, including directing parking and policing the common
facilities and common areas, fees for required licenses and permits, fire,
security and police protection, public address system(s), public toilets, all
rental charges for movable equipment, supplies, materials and labor; and twenty
percent (20%) of all of the foregoing costs to cover the Landlord's
administrative and overhead costs. Operating Costs shall not include (1) costs
of preparing any space in the Shopping Center for occupancy by a tenant; (2)
administrative, executive and partner wages and salaries; (3) renting and
leasing commissions; (4) franchise taxes or income taxes of landlord; (5) real
estate taxes and assessments; (6) the cost of any items for which Landlord is
reimbursed by payments by Tenant, by any other tenant(s) or occupant(s) of the
Building (except under rent adjustment provisions similar to those contained in
this Paragraph 7), by any other third party or parties, or by insurance proceeds
or condemnation awards; (7) the cost of performing any special services
furnished to other tenants of the Building and not furnished to Tenant; (8) the
cost of enforcing any obligations of other tenants of the Shopping Center (9)
the cost of correcting defects in the construction of the Shopping Center or in
the Shopping Center equipment; (10) any insurance premium (to the extent that
Landlord is separately reimbursed therefor by Tenant, or by any other tenant or
occupant of the Building, by means other than sharing of increases in Operating
Costs; (11) the cost of any work or services performed for, or facilities
furnished to, any tenant (including Tenant) at such tenant's cost; (12) any cost
paid by Landlord to a related corporation, entity, or person (to the extent that
such costs are in excess of the costs that would have been paid by Landlord in
the absence of such a relationship); (13) interest, amortization and other
charges paid in respect of mortgage or other loans; (14) gound lease and other
rent paid by Landlord; (15) depreciation of the Building, amortization and other
non-cash charges; (16) expenditures for capital improvements or replacements not
specifically included herein; and (17) fire insurance provided for in Paragrph
12(b) of this Lease.
Common facilities and common areas, whether such terms are used
individually or collectively, shall mean all areas, space, equipment, signs and
special services provided by Landlord for the common or joint use and benefit of
the occupants of the Shopping Center, and their employees, agents, servants,
customers and other invitees, including without limitation, parking areas,
access roads, retaining walls, landscaped areas, truck serviceways or tunnels,
loading docks, pedestrian malls (enclosed or open), courts, community hall or
auditorium (if any) and parcel pick-up stations.
Based upon Operating Costs for the previous calendar year after
taking into account reasonably anticipated increases or decreases, Landlord
shall estimate Tenant's annual pro rata share of common area charges and
one-twelfth (1/12th) of the amount so calculated shall be paid on the first day
of each calendar month in advance. Within ninety (90) days after the end of each
calendar year, Landlord shall furnish Tenant a statement in reasonable detail of
the actual common area charges prepared in accordance with sound accounting
practices, and there shall be an adjustment between Landlord and Tenant, with
payment to or repayment by Landlord, as the case may require, to the end that
Landlord shall receive the entire amount of Tenant's annual pro rata share for
such period. Tenant shall be permitted to conduct an audit, at its own cost and
expense, of common area maintenance charges. In the event that Landlord shall
revise Landlord's estimate of Tenants proportionate share of Operating Costs,
Tenant shall have thirty (30) days from its receipt of Landlord's revised
estimate to begin paying the monthly installments of such revised amount and
thereafter shall pay the monthly installments of such revised amount on the
first day of each calendar month.
8. ADDITIONAL RENT. Any and all sums required to be paid by Tenant
hereunder, whether to Landlord or otherwise, shall for purposes of Landlord's
rights upon
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the non-payment thereof and for all other purposes for which the same shall be
relevent, be deemed in all respects to be additional rent subject to the same
duties and obligations and the payment thereof and for all other purposes for
which the same shall be relevent, be deemed in all respects to be additional
rent subject to the same duties and obligations and the same remedies of
Landlord for the non-payment of basic rent.
9. DELETED PRIOR TO EXECUTION.
10. USE CLAUSE. The Tenant shall have the right to utilize the Premises
solely for the purposes of a movie theatre, including the sale of food for
on-premises consumption, concession items, souvenirs and similar items and
activities conducted in movie theatres.
11. UTILITIES. The Tenant shall pay for all utilities when the same
becomes available for its utilization, as recorded on separate meters currently
existing in the Demised Premises including water, gas, electricity and fuel
consumed for heating. In the event that Tenant's special utilization of the
property shall produce a surcharge in utility costs or insurance generally
applicable to Landlord's Center, such surcharges shall be the responsibility of
and paid for by the Tenant.
12. INSURANCE. (a) Tenant shall, during the entire term hereof, keep in
full force and effect a policy of public liability and property damage insurance
with respect to the Leased Premises including curbs and sidewalks, and the
business operated by Tenant and any subtenants of Tenant) or shall cause such
subtenants to carry such insurance) in the Leased Premises in which the limits
of public liability shall not be less than $500,000.00 per person and
$1,000,000.00 per accident or occurrence and in which the property damage
liability shall not be less than $100,000.00. The policy shall name Landlord,
any person, firms or corporations designated by Landlord, and Tenant as named
insureds, and shall contain a clause; (i) that all the provisions thereof,
except the limits ofliability, shall operate in the same manner as if there were
a separate policy covering each insured; and (ii) that the insurer will not
change or terminate the insurance without first giving the Landlord and
landlord's designees thirty (30) days prior written notice. A copy of the policy
or certificate of insurance shall be delivered to Landlord on or before the
Commencement Date.
(b) Tenant will indemnify Landlord and save it harmless from and
against any and all claims, actions, damages, losses, liability and expenses in
connection with loss of life, personal injury and/or damage to property arising
from or our or any occurrence in, upon or at the Leased Premises, (excepting
acts due to Landlord's negligence) or the occupancy or use by Tenant of the
Leased Premises or any part thereof, or occasioned wholly or in part by an act
or omission of Tenant, its agents, contractors, employees, servants, lessees, or
concessionaires. In case landlord shall be made a party to any litigation
commenced by or against Tenant, then Tenant shall protect and hold Landlord
harmless and shall pay all costs and expenses incurred or paid by Landlord in
connection with such litigation.
(c) Landlord shall maintain in full force and effect a policy of
fire insurance with comprehensive coverage on the Leased Premises written by an
insurance company or companies authorized to do business in the State of New
Jersey, in an amount(s) equal to the actual full cash replacement value of the
Shopping Center including without limit, the Demised Premises and completed
Addition. Tenant agrees to reimburse Landlord for its pro rata share, based on
the square footage occupied by Tenant as a percentage of the total square
footage of the entire Shopping Center. Based upon Landlord's insurance costs for
the previous calendar including reasonably anticipated increases or decreases,
Landlord shall estimate Tenant's annual pro rata share of said insurance and
one-twelfth (1/12th) of the amount so estimated shall be paid on the first day
of each calendar month in advance. Within ninety (90) days after the end of each
calendar year, Landlord shall furnish Tenant a statement in reasonable detail of
the actual insurance costs prepared in accordance with sound accounting
practices, and there shall be an adjustment between Landlord and Tenant, with
payment to or repayment by Landlord, as the case may require, to the end that
landlord shall receive the entire amount of Tenant's annual pro rata share for
such period and Tenant shall receive a refund of all over payments. In the event
Landlord shall revise its estimate of Tenant's
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proportionate share of insurance costs as set forth above, Tenant shall have
thirty (30) days from its receipt of Landlord's revised estimate to begin paying
the monthly installments of such revised amount and thereafter shall pay the
monthly installments of such revised amount on the first day of each calendar
month. Landlord shall provide Tenant with copies of all insurance premiums and
evidence of payment thereof. Landlord shall furnish Tenant with proof of the
fire insurance required to be carried by Landlord hereunder by delivering
certificates of such insurance to Tenant, which shall name Tenant as additional
insured and shall provide that such insurance shall not be modified or cancelled
without at least ten (10) days prior written notice to Tenant. In the event
Landlord shall fail to furnish said insurance or renew the same at least thirty
(30) days prior to the expiration thereof, Tenant may (but shall not be
obligated to) procure the same, at Landlord's expense, and Landlord shall
reimburse Tenant for the cost thereof within ten (10) days of demand, together
with interest at the rate of ten (10%) percent per year until payment.
(d) Tenant shall purchase rent insurance insuring against Landlord's
loss of rent for a period of up to one (1) year in the event of any damage or
destruction to the Premises wherein an abatement of rent is permitted under this
Lease.
(e) Tenant at its option, may self-insure plate glass, or purchase
insurance covering plate glass. In the event Tenant purchases insurance, Tenant
shall provide Landlord with a copy of a certifiate of insurance or, if requested
by Landlord, a copy of said policy.
(f) If the Tenant shall fail, refuse or neglect to obtain any of the
insurance called for by the within agreement or to maintain the same and to show
the Landlord evidence for the same as aforesaid within ten (10) days of request
therefor, the Landlord shall have the right to procure any such insurance for
the benefit of the Tenant and add the cost thereof to any rental payable
hereunder, together with interest of ten percent (10%) thereon until payment.
13. INDEMNITY. The Tenant agrees to indemnify the Landlord against and
save it harmless from any and all liability, loss or damage by reason of injury
or damage to any person or to any property belonging to the Landlord or any
other person, occurring in or about the Demised Premises, caused by or resulting
from fire, steam, electricity, gas, water, rain, ice or snow, or any leak of
flow from or into any part of said building or from any kind of injury which may
arise from any other cause whatsoever in or on the Demised Premises, unless such
injury or damage be caused by or be due to the willful acts or negligence of the
Landlord, or its agents, servants and employees, in which event the Landlord
agrees to indemnify the Tenant in similar manner to the indemnification herein.
14. CLEANLINESS. The Tenant agrees to keep and maintain the Premises and
each and every part thereof, in a clean, neat and businesslike condition.
Landlord, at its expense, will keep the remainder of the Shopping Center clean
and neat in a manner consistent with a first-class Shopping Center.
15. BROKEN GLASS. For the term of this Lease, the Tenant shall, at its own
cost and expense, replace any and all cracked or broken glass in or about the
Demised Premises.
16. REPAIRS AND REPLACEMENTS. The Tenant shall keep the interior parts of
the Demised Premises and the Addition in good repair and condition except,
repairs required by the acts of Landlord, its agents, employees and contractors,
all of which shall be repaired by Landlord, at its expense. Tenant shall comply
with all rules, regulations and requirements of any Federal, State, County or
Municipal authority, or the Board of Fire Underwriters or like organization,
applicable to the Demised Premises except Tenant shall not be obligated to make
any structural alterations with respect to the Existing Premises (as
distinguished from the Addition) unless caused by the acts of Tenant, its
agents, employees or contractors. Excepting landlord's obligation for structural
repairs and damage by fire, the elements, other casualty, unsafe condition or
condition caused by the acts of landlord, its agents, employees or contractors,
Tenant shall make all other repairs, renovations and alterations of any kind or
nature whatsoever throughout the term of this Lease and all option periods
thereof.
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(A) Notwithstanding anything to the contrary contained in this
Lease, Landlord shall, at its expense, during the Lease Term keep in good order,
condition and repair the foundation and exterior walls of the Existing Premises
(excluding the Additions) and all water, sewer and utility lines outside the
Demised Premises, with the following exceptions, which Tenant shall be
responsible for:
(i) Repairs occasioned by a harmful act, negligence or
omissions of Tenant or any of Tenant's employees, agents or invitees, and
(ii) Repairs occasioned by any of Tenant's Work on or
construction of the new Addition.
In the event a structural repair is required on the Addition and Tenant
shall not repair same within thirty (30) days after receipt of notice from
Landlord, then Landlord may proceed with the required repair on behalf of
Tenant, in which event Tenant shall reimburse Landlord for all sums paid to
effect such repair as if it were additional rent.
(B) Tenant shall, during the term of the Lease make all repairs,
structural and otherwise (except for repairs required to be performed by
Landlord pursuant to Section A hereinabove) to:
(i) The Addition;
(ii) The originally Demised Premises on those occasions as
set forth in Section A(i) and (ii); and
(iii) All roof areas of the Demised Premises.
(C) Landlord shall maintain and repair the common areas of the
Shopping Center in a manner consistent with a first class Shopping Center.
17. ALTERATIONS: TRADE FIXTURES. With the prior written consent of
Landlord, not to be unreasonably withheld, or delayed the Tenant may, during the
term of this Lease or any extension thereof, at its own cost and expense, make
any structural alterations or changes of the partitions if they are necessary or
desirable for the operation of its business. Tenant may at any time, without
Landlords' consent, remodel, make non-structural alterations, or improvements
within the Demised Premises as finally constructed, provided it complies with
all laws, ordinances and requirements of any kind and all Federal, State,
Municipal and/or other authorities, and the Board of Fire Underwriters; and all
such nonpermanent alterations, improvements and additions (including fixtures)
shall belong to and become the property of the Landlord upon the expiration of
the term of this Lease. Trade fixtures and equipment may be removed by Tenant,
provided it shall not be in default and Tenant shall restore the Demised
Premises to its original condition prior to such removal. Landlord shall be
deemed to have consented to any request for consent to which Landlord has not
responded within ten (10) days of Tenant's request.
18. DAMAGE: ACTS OF GOD. The Landlord shall repair, rebuild and
restore, at its own expense, and with due diligence, any and all damage to the
Demised Premises sustained as a result of fire; the elements or other casualty
or occurrence or an act of God; and in the event the Demised Premises, in part
or total, are rendered unusable or unfit for the Tenant's business in Tenant's
reasonable opinion, an abatement shall be made for the rent corresponding for
the time during which, and the extent to which, in Tenant's reasonable opinion,
it cannot be used by the Tenant for the conduct of its business after damage
occurring as aforesaid and before repair. In the event of total destruction of
the Demised Premises, or if use of the Demised Premises are rendered
economically unfeasible, in Tenant's reasonable opinion, the rent will be
totally abated. In the event of partial destruction, to be defined as the
destruction of less than fifty percent (50%) of the Demised Premises and are
thereby rendered useless, then the rent will be equitably abated, in accordance
with the square footage of the Demised Premises so rendered unusable provided
that Tenant, in the exercise of its reasonable business judgement, shall be able
to feasibly conduct its business in the undamaged portion of the Demised
Premises. Without limiting Landlord's obligation to restore the Demised Premises
or
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Tenant's rights, at law or in equity, in the event Landlord shall fail to
restore the Demised Premises, in the event of total destruction of said
Premises, such as to render them unsuitable for the business of the Tenant, in
Tenant's reasonable opinion, unless the Demised Premises are repaired and
reinstated by the Landlord within six (6) months to a condition comparable at
the time of such destruction subject to an extension of up to one (1) year to
complete such repairs if said destruction is a result of fire, the elements or
other casualty or occurrence or an act of God, then at Tenant's option, the
Lease shall cease and come to an end and the Tenant shall be liable for the rent
only upon to the time of such total destruction of said Demised Premises.
Notwithstanding the foregoing, Tenant shall not exercise its right to terminate
this Lease as provided in the immediately preceding sentence so long as Landlord
has commenced the restoration of the Demised Premises within six (6) months of
the destruction and has thereafter diligently and continuously pursued such
restoration and continues to do so to completion. In the event of partial
destruction of said Demised Premises, such as to render them unsuitable for the
business of the Tenant, in Tenant's reasonable opinion, unless the Demised
Premises are repaired and restored by the Landlord within one hundred fifty
(150) days (subject to an extension of up to one (1) year if said destruction is
the result of fire, the elements or other casualty or occurrence or an act of
God), to a condition comparable to the time of said destruction, then at
Tenant's option the Lease shall cease and come to an end and the Tenant shall be
liable for rent only up to the time of such partial destruction of the Demised
Premises.
19. SUBORDINATION. Provided the holder of each such mortgage shall execute
and deliver to Tenant the "Non Disturbance Agreement" (as hereinafter defined),
this Lease shall not be superior to any mortgages that now encumber, or may
hereafter be placed upon, the said Premises. Any such mortgage or mortgages for
which a Non-Disturbance Agreement has been executed 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 reasonably necessary or desirable, to further effect
the subordination of this Lease to any such mortgage or mortgages, provided such
instruments shall not increase Tenant's obligations or diminish Tenant's rights
under this Lease. The subordination of this lease to mortgages as herein
provided is subject to the condition that the holder of each such mortgage shall
execute and deliver to Tenant an agreement in writing (the "Non-Disturbance
Agreement") which shall provide that provided Tenant is not in default after
notice and the expiration of any of the applicable grace periods under this
Lease then (i) Tenant shall not be named or joined in any action or proceeding
to foreclose any of such mortgages, (ii) such action or proceeding shall not
result in a cancellation or termination of the term of this Lease, and (iii) in
the event any such holder or its designee or successor shall succeed to the
rights of Landlord under this Lease, this Lease shall continue in full force and
effect as a direct lease between the Tenant and such holder or its designee or
other successor to the rights of Landlord. Landlord represents to Tenant as of
the date hereof, there are no ground or underlying leases which are superior to
this Lease. Subject to the provisions of Paragraph 50 hereof, Tenant
acknowledges that this Lease shall be subject and subordinate to the existing
mortgages encumbering the Leased Premises but not any refinancings,
replacements, extensions or modifications thereof or any additional financing
secured by Landlord on the Shopping Center, unless tenant shall have received
the Non-Disturbance Agreement referenced heretofore.
20. QUIET ENJOYMENT. The Landlord will put the Tenant in actual possession
of the hereby Demised Premises at the beginning of the term aforesaid, or such
other date as shall be herein elsewhere agreed upon, and the Tenant, subject to
all the terms and conditions hereof, on paying the rent and performing the
covenants herein agreed by it to be performed, shall and may peacably and
quietly have, hold and enjoy, for said term and any extensions thereof, the
Demised Premises, the areas, spaces, parking facilities, passageways, sidewalks,
exits, entranceways and uses aforesaid on the terms and condition contained in
this Lease.
21. ACCESS. The Landlord and its agents, servants, employees, designess or
independent contractors shall have access to enter in and upon the said Demised
Premises upon reasonable prior notice (except in emergencies) at reasonable
hours for inspection and to make any repairs, modifications, alterations,
inspections or maintenance or replacements desirable, or required, if it be
needed to the Demised Premises or Shopping
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Center. The Tenant shall unload its stock and have all deliveries made at the
area reasonably designated by Landlord for loading and unloading in the area
nearest the Demised Premises. Landlord, in the performance of its rights under
this paragraph shall use all efforts and cause all other parties to minimize the
interference with Tenant's use and occupancy of the Demised Premises.
22. CONDEMNATION. If all or part of the Demised Premises, all access to
the Demised Premises or so much parking for the Demised Premises as to render
use thereof unlawful shall be taken for any public or quasi-public use, under
any statute or by right of eminent domain, such as to render them unsuitable for
the business of the Tenant in Tenant's reasonable opinion, then this Lease, at
the option of the Tenant to be exercised within (90) days of the date of the
taking, shall be cancelled and declared null and void and of no effect, and the
Tenant shall be liable for the rent only up to such time of such taking. In the
event of partial taking, which is not extensive enough to render the Demised
Premises unsuitable for the business of the Tenant in Tenant's reasonable
opinion, the Landlord shall promptly restore the Demised Premises to a condition
comparable to its condition at the time of said condemnation and the Lease shall
continue, but starting with the date of such restorations, the rental shall be
reduced proportionately based upon the reduction in square footage of the
Demised Premises. In the event of the occurrence of the contingencies above
mentioned, or complete condemnation, rent shall abate corresponding with the
time during which the Demised Premises may not be used by the Tenant.
(a) In the event that fifty percent (50%) or more of the parking
area for the entire Shopping Center, of which the Demised Premises constitute a
part, or such amount of parking area as will render use of the Demised Premises
unlawful for the purposes herein contemplated, shall be taken or condemned by
public or quasi-public authority, the Tenant shall have the option to terminate
this Lease within thirty (30) days from the date of such taking or condemning.
If the Tenant shall fail to so terminate the said Lease within the time
aforesaid, then this Lease shall remain in full force and effect. In the event
this Lease shall be terminated in the event of any damage, destruction, casualty
or condemnation, any annual rental or any charges paid in advance shall be
refunded to the Tenant upon its surrender of possession of the remaining
Premises.
(b) Nothing herein contained shall be deemed or construed to prevent
the Landlord or Tenant from enforcing and prosecuting in any condemnation
proceedings, a claim for the value of their respective interest, but in no event
shall any award to the Tenant reduce any award to the Landlord for the value of
the fee or leasehold.
23. ASSIGNMENT. Except as hereinafter specifically provided to the
contrary, Tenant may not assign this Lease or sublet the Premises or any portion
thereof or effect a sale or change of ownership of its stock without Landlord's
prior written consent, which shall not be unreasonably withheld or delayed. Upon
submitting any request for Landlord's consent, Tenant shall submit the financial
statement of the proposed assignee or successor and the expertise and experience
of the proposed assignee or successor in operating movie theaters, all of which
shall be reasonably satisfactory to Landlord, but Landlord shall not withhold
its consent to any proposed assignment based on the financial statement of the
proposed assignee if the financial statement of such assignee indicates a net
worth at least equal to that of the Tenant hereunder at the time of such
assignment. In the event of any permitted assignment or sublet, (i) neither
Tenant nor Guarantors shall be relieved from any liability under this Lease; and
(ii) all of the provisions of this Lease shall be binding upon an assignee or
subtenant. Any written consent of Landlord shall be effective in that instance
only and shall not be deemed to apply to future assignment, sublease or sale or
transfer of stock. Tenant's application for Landlord's consent as herein
provided shall contain the proposed use by the proposed assignee or subtenant as
a condition of such application.
Anything in this Section to the contrary notwithstanding, Tenant
shall not be permitted to assign or sublet the Premises or any portion thereof
to any assignee or subtenant who shall engage in the conduct of a supermarket
for the retail sale of food and such non-food items as are customarily sold in
supermarkets in the Metropolitan-New York area. Additionally, Tenant may not
assign or sublet the Premises to any tenant whose use would be in competition
with an existing tenant at the Center or whose use
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would be in violation of any restrictions on tenant's use the subject of binding
contracts between Landlord and other tenants at the Center. Landlord shall be
under absolutely no obligation to consent to either of the foregoing. Tenant
shall have the right to assign this Lease for the use clause contained herein.
Notwithstanding the foregoing provisions of this Section 23, Landlord's
consent shall not be required for the following transactions:
(i) sublettings of portions of the Demised Premises to
concessionairres or vendors for the sale of food, beverages, popcorn, candy,
souvenirs, novelties and/or other items as are sold in movie theatres;
(ii) subletting or rental of one or more auditoriums of the Demised
Premises to a distributor for the exhibition of a specific motion picture, in
any case, on a temporary basis (hereinafter referred to as "4-Wall Deal") and
provided the proceeds thereof and ticket sales resulting therefrom are included
in "Gross Sales" (as hereinafter defined);
(iii) any transfer or sale of the stock of Tenant among John A.
Nelson and Robert Ferman or their respective immediate family members (the
"Permitted Transferees"); and
(iv) any assignment, subletting or stock transfer with or to any
parent, affiliate or subsidiary entity or any entity which controls, is
controlled by or under common control with John A. Nelson or Robert Ferman or
their respective immediate family members.
24. SURRENDER. Upon the expiration or other termination of the term of
this Lease, the Tenant shall quit and surrender to the Landlord the Demised
Premises, in good order and condition, ordinary wear and tear and damage by fire
and other casualty excepted. The Tenant shall have the right to remove movable
trade fixtures and equipment from said Demised Premises, and shall repair any
damage caused by such removal.
25. DEFAULT. The following shall be deemed to be events of default
hereunder after the notice and cure period set forth in Paragraph 27:
(a) Failure of Tenant to make any payment of rent or additional rent
when due or within ten (10) days thereafter.
(b) Failure of Tenant to perform any of the terms, covenants or
conditions of this Lease.
(c) In the event that Tenant shall 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 herein shall pass to another by virtue of any court
proceeding, writ of execution, levy sale or by operation of law, other than
testate distribution or interstate decent and distribution.
(d) Recordation or attempted recordation of this Lease by Tenant.
(e) Vacation or abandonment of the Premises by Tenant.
(f) Failure of Tenant to take up occupancy of the Premises when the
same shall be ready for occupancy as set forth in this Lease.
26. DELETED PRIOR TO EXECUTION
27. NOTICE OF DEFAULT. In the event of any default as defined in Section
25(a) of the Lease, Landlord agrees to notify Tenant in writing, specifying the
nature of such default and Tenant agrees to remedy and cure said default within
ten (10) days after receipt of Landlord's notice. In the event of any default as
defined in Sections 25(b), (d),
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(e) or (f) of this Lease, Landlord agrees to notify Tenant in writing,
specifying the nature of such default and Tenant agrees to remedy and cure said
default within thirty (30) days after receipt of Landlord's notice. If the said
default specified shall be of such nature that the same cannot reasonably be
cured or remedied within said thirty (30) day period, and Tenant shall fail to
commence the curing or remedying of such default within said thirty (30) day
period and shall not thereafter continuously and diligently proceed therewith to
completion, then Landlord shall have the right to proceed with the Landlord's
remedies on default as provided for in the Lease or as permitted by law and
Tenant shall not be deemed in default if Tenant shall so commence and prosecute
such cure or remedy. Nothing in this Paragraph shall be deemed to require lessor
to give more than ten (10) days notice prior to the commencement of a summary
proceeding for non-payment of rent or a plenary action for the recovery of rent
on account of any default in the payment of rent, it being intended that such
notices are for the sole purpose of creating a conditional limitation hereunder
pursuant to which this Lease shall terminate and the Lessee shall become a
holdover tenant.
28. REMEDIES ON DEFAULT. (a) In the event of any default as defined in
Section 25 hereof, or if Tenant shall be vacated by summary proceedings or
otherwise, the Landlord, in addition to other remedies herein contained, or as
may be permitted by law, may, without being liable for prosecution therefore, 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 therefore and apply the same, first to the payment of such expenses,
reasonably attorney fees and costs, as the Landlord may have been put 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 accrued 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.
(b) Additionally, in the event of default as defined in Section 25
and the requisite notice and cure period under Section 27 of this Lease, and
Tenant's failure to cure said default within the time period provided therefor,
Landlord shall have the right but not the obligation upon giving five (5) days
notice in writing to Tenant, to declare the Lease and the term hereof at an end
on the date fixed in such notice as if such date were the originally fixed
expiration date of the term of this Lease and Landlord shall then have the right
to remove all persons, goods, fixtures, and chattels from the Demised Premises
without liability for damages.
(c) In case of any such default, re-entry, expiration and/or
dispossess by summary proceedings or otherwise: (1) The rent shall become due
thereupon and be paid to the time of such re-entry, dispossess and/or
expiration, together with such expenses as Landlord may incur for legal
expenses, attorneys' fees, brokerage and/or putting the Demised Premises in good
order, or for preparing the same for re-letting provided Tenant shall not be
responsible for brokerage commissions paid for re-lettings extending beyond the
original term of this Lease; (2) The Landlord may re-let the Demised Premises or
any part or parts thereof, either in the name of Landlord or otherwise, for a
term or terms which may, at Landlord's option, be less than or exceed the period
which would otherwise have constituted the balance of the term and may grant
concessions or free rent; and (3) Tenant or the legal representatives of Tenant
shall also pay Landlord as liquidated damages for the failure of Tenant to
observe and perform said Tenant's covenants herein contained, the deficiency
between the rent hereby reserved and/or covenanted to be paid and the net
amount, if any, of the rents collected on account of the Lease or Leases of the
Demised Premises for each month of the period which would otherwise have
constituted the balance of the term. When computing such liquidated damages
there shall be added to the said deficiency such expenses as Landlord may incur
in connection with re-letting, such as legal expenses, attorneys' fees,
brokerage fees, and for keeping the Demised Premises in good order or for
preparing the same for re-letting provided Tenant shall not be responsible for
brokerage commissions paid for re-lettings extending beyond the original term of
this Lease. Any such liquidated damages shall be paid in monthly installments by
Tenant on the rent day specified in this Lease and any suit brought to
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collect the amount of the deficiency for any month shall not prejudice in any
way the rights of Landlord to collect the deficiency for any subsequent month by
a similar proceeding.
(d) In the event of a breach or threatened breach by Tenant of any
of the covenants or provisions of this Lease, Landlord shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity as if
re-entry, summary proceedings and other remedies were not herein provided for.
Mention in this Lease of any particular remedy shall not preclude Landlord from
any other remedy in law or in equity.
No receipt of rent by Landlord from Tenant after the
termination of this lease or after giving any notice shall reinstate, continue
or extend the term of this Lease. No receipt of rent after the commencement of
suit, or after final judgment for possession of the Demised Premises shall
reinstate, continue or extend the term, or affect the suit of said judgment.
For purposes of this Section, the term Tenant shall also include any
Guarantor of Tenant and any obligations, duties or covenants of Tenant in this
Section which extend to any Guarantor of this Lease in addition to the Tenant.
29. CERTIFICATE OF LEASE STATUS. Tenant and Landlord shall at any time
upon ten (10) days prior written notice, execute, acknowledge and deliver to the
requesting party, in recordable form a certificate certifying that this Lease is
unmodified and in full force and effect as modified, setting forth the
modifications and the dates to which the rent and other additonal charges
required to be paid hereunder have been paid. Such certificate shall state
whether or not the requesting party is in default under this Lease and any
setoffs or defenses against the enforcement of this Lease of any nature
whatsoever that the certifying party may possess. Such certificate shall be in
such form that may be relied upon by Landlord, Tenant by any prospective
purchaser of the fee or any other interest therein or any mortgagee thereof or
any assignee of any mortgage of the fee of the Demised Premises or any of
Landlord's or Tenant's respective successors or assigns.
30. LANDLORD'S LIEN. All tangible personal property not permanently part
of the Demised Premises, including screens, sound systems, projectors, seating,
panelling, movable partitions, lighting fixtures, furniture system, storage
walls, special cabinet work, other business and trade fixtures, machinery and
equipment, communications equipment and office equipment, whether or not the
attached to, or built into, the Demised Premises, that are installed in the
Demised Premises by or for the account of Tenant, at Tenant's expense, and can
be removed without permanent structural damage to the Demised Premises, and all
furniture, furnishings and other articles of movable personal property owned by
Tenant and located in the Demised Premises (all of which are sometimes called
"Tenant's Property"), shall be and shall remain the property of Tenant for all
purposes, subject to a lien in the favor of Landlord in the event Tenant shall
default (after notice and grace) in the observance of Tenant's obligations
hereunder. Landlord's lien, however, shall be subject and subordinate to the
lien of any party which may now or in the future hold an interest in any of
Tenant's Property. This subordination shall be self-operative; however, Landlord
agrees to execute such documents as may be requested by Tenant to confirm the
subordination of its lien to the lien of any party claiming an interest, whether
by lease, financing or otherwise. In the event of damage or destruction thereto
by fire or other causes, Tenant shall have the right to recover the value
thereof as its own loss from any insurance company with which it has insured the
same, or to claim an award in the event of condemnation, notwithstanding that,
absent this sentence, any of such things might be considered a part of the
Demised Premises. Tenant may remove all or any of Tenant's Property at any time
during the term of this Lease, provided that, if any of Tenant's Property is
removed, Tenant or any party or person entitled to remove same shall repair or
pay the cost repairing any damage to the Demised Premises or to the Building
resulting from such removal. Any equipment or other property for which Landlord
shall have granted any allowance or credit to Tenant, or that has replaced such
items originally provided by Landlord at Landlord's expense, shall remain on the
Demised Premises and shall not be removed by Tenant.
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31. SIGNS. Any signs required by Tenant shall be erected by Tenant at its
sole cost and expense, provided that it shall first have obtained Landlord's
consent as to location, size, and content thereto in writing, which shall not be
unreasonably withheld or delayed. The Tenant may remove such sign or signs at
the expiration of the term of this Lease, or any extension thereof, provided
Tenant repairs any damage caused by such removal. Tenant agrees to comply with
all State and local regualtions pertaining thereto.
32. PARKING AND MAINTENANCE OF PARKING AREA. Throughout the terms and
extensions thereof, parking facilities as shown on the site plan attached hereto
and as may be modified or altered (so long as lawful and not substantially
reduced or relocated to Tenant's detriment) from time to time, shall be provided
by the Landlord for the Tenant, its servants, agents, employees, invitees, and
patrons in connection with those of other tenants, without charge to any of
them, and the same shall be operated and maintained by the Landlord in safe and
legal condition.
Tenant and its employees shall park their cars only in those
portions of the parking area reasonably designated for the purposes by Landlord
reasonably close to the Demised Premises. In the event that Tenant or its
employees fail to park their cars in designated parking areas as aforesaid, then
Landlord shall have the right to charge Tenant ten dollars ($10.00) per day, per
car parked in any other areas than those designated. The Landlord shall require
all tenants of said Shopping Center and employees to park their motor vehicles
in the parking area provided for same, and the Landlord shall take all
reasonable measures to enforce this restriction. Tenant shall inform all of its
employees of said requirement.
The spaces, parking and other areas, passageways and all means of
access thereto, and the Demised Premises, including adjacent and surrounding
sidewalks, shall be kept by the Landlord clean and free and clear of
encumbrances, obstructions, debris and snow.
The Landlord assumes all duties, responsibilities and liabilities in
regard to maintenance, repairs, replacement, operation, supervision, use and
control of and to said spaces, parking areas, passageways, sidewalk repairs,
entrances, exits, cuts in curbing, lighting facilities, landscaped and other
exterior areas, and shall comply with all present and future laws, ordinances,
orders, rules, regulations, notices, notices of violations and requirements of
public authorities, applicable thereto.
33. COMPLIANCE WITH MORTGAGE REQUIREMENTS. As a condition of this Lease
Agreement, Tenant agrees to deliver to Landlord forms, certificates or
applications fully completed and properly executed in a timely manner, as may be
reasonably required from time to time by Landlord's institutional mortgagee
provided none of the same increase any of Tenant's obligations or diminish any
of Tenant's rights hereunder.
34. RULES AND REGULATIONS. Landlord shall have the right to promulgate
reasonable rules and regulations applicable to all tenants at the Premises from
time to time, which rules and regulations shall be deemed covenants of this
Lease to be undertaken by Tenant provided the same do not reduce Tenant's rights
or increase Tenant's obligations hereunder.
35. HEADINGS. The headings contained in the body of this Lease Agreement
are for the purposes of identification only, and are not a part of the agreement
between the parties.
36. COMPLIANCE WITH LAWS. Tenant agrees to comply with all Municipal,
County, State and Federal laws, rules, regulations, ordinances, or orders, and
all rules, orders, regulations or requirements of the Board of Fire Underwriters
or other similar body having jurisdiction pertaining to the Demised Premises and
the manner in which the Tenant conducts its business therein, whether such
compliance with respect to the manner in which Tenant conducts its business is
required within the Demised Premises or on Landlord's Property. Landlord shall
comply with all of the foregoing to the extent the same pertain to the Shopping
Center. In no event shall Tenant be required to comply with any laws, rules,
regulations, ordinances or orders described herein to the extent the same
relates to any structural alterations or repairs to the Existing Premises or any
alterations
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or repairs necessitated by the acts or negligence of Landlord or its agents,
employees or contractors.
Tenant shall have the right to contest the validity of any
violations of any law, rule, regulations, ordinance or order as aforesaid, and
to defer compliance pending such contest if non-compliance therewith shall not
constitute a crime and is not a hazardous condition, and if compliance is so
deferred, the deferment shall not be deemed a breach of this covenant, provided
any such contest proceedings shall be prosecuted diligently and in good faith.
Tenant hereby agrees to indemnify and save Landlord harmless from and against
any and all claims, costs, expenses and liabilities, including but not limited
to reasonable attorneys' fees incurred by Landlord by reason of any such
deferment or contest.
37. FORCE MAJEURE. All performances, undertakings, or obligations of
Landlord hereunder shall be subject to force majeure, and all times set forth
herein for compliance with any of the above shall be extended due to
catastrophe, accident, weather, storms, acts of war and insurrection,
availability of materials, strikes, embargoes, or other conditions beyond
Landlord's control
38. PERFORMANCE OF TENANT'S OBLIGATIONS. If the Tenant shall be in default
as defined in Section 25 (b), and fail to cure said default after the notice and
expiration of applicable time period set forth in Section 27 hereof, then the
Landlord may cure such default on behalf of the Tenant, in which event the
Tenant shall reimburse the Landlord for all sums paid to effect such cure,
together with interest at the rate of twelve percent (12%) per annum and
reasonable attorneys' fees. In order to collect such reimbursement, the Landlord
shall have all the remedies available under this Lease for a default in the
payment of rent.
39. WAIVER. The failure of the Landlord to enforce against the Tenant any
provision, covenant, or condition, by reason of the Tenant committing any breach
of or defualt under this Lease, shall not be deemed a waiver thereof, nor void
or affect the right of the Landlord to enforce the same covenant or condition on
the occasion of any subsequent breach default thereof; nor shall the failure of
the Landlord to exercise any right in this Lease on any occasion arising
therefore be deemed or construed to be a waiver of the right to exercise the
same kind of right upon any subsequent occasion.
40. EXECUTION. This Lease is not binding upon the Landlord or the Tenant
until it is signed and sealed by duly authorized officers of the Landlord and
the Tenant and delivered to the Landlord and to the Tenant.
41. COMMISSION. Landlord and Tenant represent that each party, for itself,
has dealt with no real estate broker with regards to this Lease.
42. ADDITIONAL REMEDIES. Any remedies specifically provided for in this
Lease, or in addition to and not exclusive of any other remedy available to the
Tenant or the Landlord under applicable law. Any measure or damages provided for
in this Lease shall not be deemed to limit or prejudice the Tenant's or
Landlord's right to prove and obtain all the damages which it may sustain as a
result of any and all breaches of this Lease.
43. NOTICES. All notices, statements, demands, consents, approvals,
authorizations, offers, agreements, appointments or designations herein by
either party to the other shall be deemed to be given to the other shall be
deemed to be given to the other party for the purpose of this Lease ONLY IF IN
WRITING, and either personally served thereon or sent by CERTIFIED MAIL, Return
Receipt Requested, with postage prepaid and subsequently received, and addressed
as follows:
TO THE LANDLORD: FIRST ROXBURY COMPANY
241-A Millburn Ave.
Millburn, N.J. 07041
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TO THE TENANT: ROXBURY CINEMA INC.
21 Sunset Strip
Roxbury Mall
Rt. 10
Succasunna, N.J.
IF TO TENANT,
WITH A COPY TO: ARTHUR S. MANTEL, ESQ.
Dreyer and Traub
101 Park Avenue
New York, New York 10178
or such substituted parties or addresses, provided such change of address and
party is provided in writing during the term of this Lease.
If so served or sent, any such matter shall be deemed given on the date same is
personally delivered, or if mailed, on the third day after depositing same in a
post office box regularly maintained by the U.S. Post Office Department.
44. BINDING EFFECT. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, representatives
and assigns. Each individual executing this Lease on behalf of the respective
parties hereto hereby represents to the other party that such individual is
authorized to execute this Lease on behalf of the party for whom such individual
is executing the same.
45. SEVERABILITY. If any provision of this Lease shall be declared invalid
or unenforceable, the remainder of this Lease shall continue in full force and
effect.
46. SUPERCESSION. As of the Commencement Date, this Lease shall supercede
the Prior Lease. However, the Prior Lease shall remain in full force and effect
until the Commencement Date. In the event this Lease is terminated in accordance
with the terms of this Lease other than pursuant to Sections 18 (Casualty) or 22
(Condemnation) hereof, whether before or after the Commencement Date, then the
Prior Lease shall remain in full force and effect in accordance with its terms.
47. DEFINITION OF LANDLORD - LIABILITY OF LANDLORD.
The term "Landlord" as used in this Lease means only the owner or the
mortgagee in possession for the time being of the Shopping Center in which the
Demised Premises are located or the holder of a lease of both said Shopping
Center and the land thereunder so that in the event of any sale of said Shopping
Center or an assignment of this Lease or any underlying lease or a demise of
both said Shopping Center and land, except for the payment of the "Alteration
Fund" to Tenant in accordance with Section 51 hereof Landlord shall be and
hereby is entirely freed and relieved of all obligations of Landlord hereunder
and it shall be deemed without further agreement between the parties and such
purchaser(s), assignee(s) or lessee(s) that the purchaser, assignee or lessee
has assumed and agreed to observe and perform all obligations of Landlord
thereafter accuring hereunder. Nothwithstanding any transfer of the Shopping
Center by Landlord and/or assumption of such obligation by the successor
Landlord, Tenant shall be entitled to seek payment of the Alteration Fund from
the original named Landlord hereunder in the event any successor Landlord shall
fail to pay the same. The provisions of the preceding sentence shall be
applicable to any successor Landlord. Except for the payment of the "Alteration
Fund" (as hereinafter defined) as provided in Section 51 hereof, it is
specifically understood and agreed that there shall be absolutely no personal
liability on the part of the Landlord or such mortgagee or such individual or on
the part of the members of such firm, partnership or joint venture with respect
to any of the terms, covenants and conditions of the Lease, and that Tenant
shall look solely to the equity of the Landlord or such successor in interest in
the Shopping Center and, so long as owned by Landlord, the "Adjoining Centers"
(as hereinafter defined), or the Leasehold estate of Landlord or such successor
in the Shopping Center and, so long as owned by Landlord, the Adjoining Centers,
or the rents, issues, profits or proceeds of the Shopping Center or Adjoining
Centers for the satisfaction of each and every remedy of Tenant in the event of
any breach by Landlord or by such successor in interest of any of the terms,
covenants and conditions of this Lease to be performed by Landlord, such
exculpation of personal liability to be absolute and without any exception
whatsoever.
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48. ECRA COMPLIANCE. Except to the extent caused by Tenant and subject to
Tenant's representations in this Section 48, Landlord represents that to the
best of its knowledge, the Demised Premises are not currently subject to
compliance with "ECRA" (as hereinafter defined) nor are the Demised Premises
subject to the terms of the New Jersey Spill Act and Landlord will indemnify
Tenant against any liability, loss, cost or expenses (including attorney's fees
or expenses) which Tenant may sustain or incur by reason of Landlord's failure
to comply with the Spill Act or ECRA. Tenant has not and shall not use or suffer
the premises to be used in any manner as to create or cause an environmental
violation or hazard. Not in limitation of the generality of the above, it is
understood that Tenant shall not cause or suffer to be caused any chemical
contamination or discharge of substance of any nature which is noxious,
offensive or harmful or which, under any law rule or regulation of any
governmental authority having jurisdiction, constitutes a hazardous substance or
hazardous waste. As addtional covenants by Tenant, it is specifically agreed
that Tenant shall not generate, manufacture, refine, transport, treat, store,
handle, dispose or otherwise deal with any hazardous substances or hazardous
waste as presently or in the future defined in the Environmental Cleanup
Responsibility Act of New Jersey (N.J.S.A. 13:1K-6 et seq.) ("ECRA") (the
generation, manufacture, refinement, transportation, treatment, storage,
handling, disposition and/or otherwise dealing with such substance or waste, as
the case may be, being referred to for convenience as "dealing with" such
substances or waste).
49. RESTRICTIVE COVENANT. Landlord covenants not to lease any other space
in the Shopping Center or tax lots 23.1 and 23.5 in Block 45 of the Township of
Roxbury (the "Adjoining Centers"), which are immediately adjoining to the
Shopping Center and owned by Landlord, to be used for the operation of a movie
theatre. The provisions of this Section 49 shall be binding on the successors
and assigns of Landlord with respect to the Shopping Center and Adjoining
Centers. In the event a proposed sale of the Adjoining Centers Landlord shall
(i) give Tenant at least ten (10) days prior written notice of such sale; (ii)
notify the prospective purchaser of the provisions of this Section 49 and (iii)
at Tenant's request, record a memorandum in the appropriate recording office
containing the provisions of this Section 49 and such other provisions of this
Lease which may be appropriate, failing which Tenant may do so.
50. LEASE CONDITIONAL: (a) The effectiveness of this Lease Agreement is
conditional upon the satisfaction of the following contingencies within (180)
days of the date hereof. In the event any or all of the following contingencies
shall not have been satisfied within said (180) days period, Tenant may
terminate this Lease by written notice to Landlord and the Prior Lease shall
remain in full force and effect.
(i) Approval by all existing mortgagees of this Agreement (without
imposition of any cost, fee or other expense) and execution and delivery of the
Non-Disturbance Agreements from such mortgagees;
(ii) Landlord obtaining a special water and sewer permit from the
New Jersey State of Environmental Protection and such other permits which may be
required to enable Tenant to obtain a building permit for the construction of
the Addition provided Tenant complies with the conditions for obtaining said
building permit.
(iii) The securing by Landlord of financing to fund the Alteration
Fund (the "Financing") refrenced hereafter it being understood that such
financing may be included within additional financing being secured by Landord
with respect to the Shopping Center and the Adjoining Centers. Landlord agrees
to promptly deliver to Tenant copies of proposed commitment letters or their
equivalent from proposed lenders as well as copies of fully executed commitments
relating to such financing and much other documents or information as Tenant may
reasonably request with respect to same. Tenant shall have the right to waive
this condition if Tenant secures its own financing to fund Tenant's Work as
provided in Paragraph 51(g) hereafter. The Financing shall be subject to the
requirement that such lenders execute and deliver Non-Disturbance Agreements.
(b) This Lease is further contingent upon Tenant obtaining
approval by the Landlord of detailed plans and specifications for the Addition,
including approval by Landlord of proposed applications for governmental
approvals, which
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approvals shall not be unreasonably withheld or delayed. In the event such
approval is not obtained within ninety (90) days after the satisfaction of the
last of the conditions set forth in Section 50(a) above, Tenant shall have the
option to cancel this Lease and the Prior Lease shall remain in full force and
effect.
(c) Tenant shall have the right to waive any of the conditions
set forth in this Section 50.
(d) In addition to the Tenant's right to terminate this Lease
as herein provided, Landlord shall have the right to terminate this Lease upon
written notice to Tenant in the event Landlord shall be unable to obtain the
Financing within one hundred and eighty (180) days from the date hereof.
51. ALTERATION FUND: In connection with the construction of the Addition
in conformity with this Agreement, Landlord agrees to disburse to the Tenant the
sum of SEVEN HUNDRED AND FORTY THOUSAND ($740,000) as hereinafter provided (the
"Alteration Fund"). However, in the event that the actual construction costs,
direct or indirect, shall exceed the sum of $740,000.00, Landlord's obligation
shall only be to disburse the sum of $740,000.00 and same shall have satisfied
its obligation pursuant to this Agreement. The Landlord's obligation to disburse
the Alteration Fund to Tenant shall not be subject to the limitation of
liability set forth in Section 47 hereof.
(a) The Tenant shall be responsible for the entire cost of
construction of the Addition, whether direct or indirect, and irrespective of
whether such cost shall exceed the disbursement of $740,000.00 to be made by the
Landlord.
(b) Without limiting the generality of the Tenant's obligation
as to the construction of the Addition, the Tenant shall be responsible for all
labor, materials, equipment, tools, machinery, utilities, transportation,
engineering costs, insurance, permits and approvals, and any sales, consumer or
use taxes regarding the materials used in the Addition. The work, services,
materials and fees to be obtained and performed by Tenant in connection with the
Addition are hereinafter collectively referred to as "Tenant's Work".
(c) The Alteration Fund shall be disbursed by Landlord to
Tenant in the following manner and subject to the following conditions:
(i) Tenant may submit to Landlord monthly:
(x) Invoices for all work performed and all
materials furnished in connection with such
work performed or materials installed in the
Demised Premises including payment of
architect and contractor fees to the date of
such invoices;
(y) a certificate from Tenant's architect
approving payment.
(ii) On or before the first day of each calendar
month after the Commencement Date, Tenant may
submit to Landlord with respect to portions of
Tenant's Work completed for a preceding calendar
month for which Landlord has not paid Tenant a
"Construction Payment" (as hereinafter defined) (a
"Monthly Reimbursement Submission"), a request for
payment of the items set forth in subparagraph (i)
hereof and, on or before the twentieth (20th) day
after the submission of such Monthly Reimbursement
Submission, Landlord shall pay to Tenant ninety
(90%) percent of the amount of the completed work
reflected in such Monthly Reimbursement Submission
(a "Construction Payment"), until seventy-five
(75%) percent of the Tenant's Work has been
completed and thereafter ninety five (95%) percent
of Tenant's Work completed. The retained amounts
shall be paid to Tenant within fifteen (15) days
after the submission to Landlord of a certificate
of occupancy (temporary or permanent) for the
Addition from the governmental or
quasi-governmental bodies having jurisdiction
thereof.
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(d) From and after the date that Landlord shall disburse any
portion of the Alteration Fund to Tenant as hereinabove provided, Tenant shall
pay monthly installments of interest only to Landlord (the "Interest Payment")
on the disbursed portion of the Alteration Fund at the rate of interest actually
being charged to Landlord pursuant to the Financing. Such interest payments
shall be made by Tenant to Landlord beginning on the first day of the first
calendar month immediately succeeding the first Construction Payment by Landlord
and shall be payable on the first day of each and every calendar month
thereafter until the Rent Commencement Date. From and after the Rent
Commencement Date, Tenant shall not be required to make any further Interest
Payments to Landlord. The amount of the Interest Payment shall be prorated to
reflect any portion of a month and shall be recomputed following every
Construction Payment made by Landlord.
(e) In the event Landlord shall fail to make any Construction
Payment as required hereunder, Tenant, at its option, may deduct the same from
any Interest Payment, fixed minimum rent or additional rent becoming due under
this Lease or the Prior Lease together with interest of the rate of thirteen
(13%) percent per year from the date such Construction Payment was due and
payable.
(f) Tenant hereby guarantees completion of Tenant's Work
subject to Landlord's funding of the Alteration Fund as aforesaid.
(g) Notwithstanding anything to the contrary set forth in
Paragraph 51 hereof, Tenant shall have the right not to utilize the Alteration
Fund and in lieu thereof may secure its own financing for Tenant's Work ("Tenant
Financing"). In the event Tenant secures Tenant Financing:
(i) The provisions of Paragraph 51(a) thru (f)
shall be inapplicable; and
(ii) Landlord shall deliver to Tenant a take-out
commitment in the sum of $740,000.00 being in form and substance and being from
a lending institution reasonably acceptable to Tenant and the lender funding the
Tenant Financing.
52. CONSTRUCTION CONDITIONS. Tenant's construction of the Addition
shall be subject to all of the terms, conditions and affirmative obligations
contained in this Section:
(a) The work shall be performed in a good and workmanlike
manner, in conformity with the plans and specification approved by the Landlord
in accordance with all laws, rules and regualtions of all governmental entities
having jurisdiction and in conformity with all plans, specifications, conditions
and other requirments of all such governmental agencies.
(b) Tenant shall procure, prior to commencement of
construction, for the benefit and in the name of the Landlord, a performance
bond with regard to the construction of the Addition.
(c) The general contractor, prime contractors and independent
contractors employed by the Tenant and any subcontractors and materialmen
(collectively "Contractors") shall be reasonably acceptable to the Landlord. All
such contracts with Contractors shall be reasonably acceptable to the Landlord.
Landlord shall be deemed to have consented to any request for Landlord's consent
to which Landlord does not specifically object within seven (7) days. All such
contracts shall be in the name of the Tenant, and the Landlord shall have no
liability with regard thereto; however, all such contracts shall have a
provision permitting the assignment by the Tenant to the Landlord. Without
limiting the general nature of the foregoing, agreements with contractors shall
contain a warranty for a period of at least one (1) year from the date of
completion of construction to the extent commercially available.
(d) The plans and specifications and all modification thereto
for the construction of the Addition must be approved in writing, in advance, by
the Landlord, which approval shall not be unreasonably withheld or delayed.
Landlord shall be deemed
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to have consented to any request for Landlord's consent to which Landlord does
not specifically object within seven (7) days. To the extent that Tenant's plans
and specifications are consistent with the Tenant's proposal for the Addition
and entire Demised Premises, as set forth on Exhibits "B" and "C" annexed hereto
and made a part hereof, the same shall be deemed approved.
(e) No mechanics liens, stop notices, Uniform Commercial Code
financing statements, or any other lien or encumbrance may be placed upon the
Shopping Center or any part thereof by the Tenant or the Contractors, but the
same shall not be deemed a default under this Lease provided Tenant shall
discharge or bond the same within thirty (30) days.
(f) At all times during the construction, the Lease shall be
in good standing.
(g) Deleted prior to execution.
(h) Tenant shall take out and maintain at its sole cost and
expense or cause its Contractors to take out and maintain during the period of
construction the following insurance in the following minimum amounts:
(1) Adequate workmen's compensation and employers'
liability insurance for all employees employed in connection with the work.
Employers' insurance shall have limits not less than $100,000.00 per claim.
(2) Owner's liability insurance in the following
amounts:
BODILY INJURY AND PROPERTY DAMAGE
$5,000,000/occurance and $5,000,000 aggregate
(3) Contractors' liability insurance covering
bodily injury liability including death, protective, completed operations and
building operation and property damage liability in the following amounts:
BODILY INJURY AND PROPERTY DAMAGE
$5,000,000/occurance and $5,000,000 aggregate
(4) Motor vehicle liability insurance covering
bodily injury including death, and including non-owned and hired cars in the
following amounts:
BODILY INJURY AND PROPERTY DAMAGE
$5,000,000/occurance and $5,000,000 aggregate
(5) Fire and casualty insurance during the course
of construction, including special extended coverage, malicious and wind storm
damage to the full insurable value of the work regarding the Addition and any
damage to the existing Building arising from the work. If any work is sublet,
insurance of the same types, where applicable, and limits shall be provided for
by the Contractors. Property damage shall be extended to cover damage to
underground wires, pipes, ducts, conduites and installations. The policies shall
remain in force until all work has been completed, and Certificate of Occupany
delivered pursuant to the terms of this Contract and the Architect's Final
Certificate delivered. Thereafter, insurance as to the Addition shall be
governed by Article 11 of the Lease.
Each insurance policy shall include the Tenant and Landlord as insured
parties and provide that the Landlord shall be given at least ten (10) days'
prior notice before any amendment or cancellation of such policy or reduction of
coverage thereunder can be effective. All Contractors shall furnish certificates
of insurance coverage in the amounts and kinds specified as above, and it will
be the responsibility of the Tenant to promptly accumulate such certificates and
forward them to the Landlord. Landlord shall have not responsibility for
Tenant's acts or omissions or for those of the Contractors.
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(i) The Tenant shall employ an independent architect
reasonably acceptable to Landlord to supervise the progress of construction and
conformity of construction to the plans and specifications, on behalf of Tenant,
and to issue reports, written or oral to the Tenant and the Landlord regarding
same.
(j) The Tenant shall be responsible to the Landlord for the
acts and omissions of Tenant's employees, Contractors, and their agents and
employees, and all other persons performing any of the work and shall indemnify
and hold Landlord harmless for its acts and omissions and those of its
contractors and such subcontractors.
(k) To the fullest extent permitted by law, the Tenant shall
indemnify and hold harmless the Landlord from and against any and all claims,
damages, losses and expenses, including, but not limited to reasonable
attorneys' fees, arising out of or resulting form the performance of the work.
(l) The Tenant shall take or cause to be taken all necessary
precautions for the safety of, and shall provide all reasonable protection to
prevent damage, injury or loss to any of the following:
(1) All employees on the work and all other persons
who may be affected thereby;
(2) All of the work and all materials and equipment
to be incorporated therein, whether in storage on or off the site; and
(3) Other property at the site or adjacent thereto,
including the Building, common areas of the Shopping Center, existing
utilities, and the like.
(m) The Tenant acknowledges that it and its architect, and
engineers and consultants solely shall be responsible for determining the
feasibility of constructing the Addition, performing connection and integration
of the Addition to the Building, determining subsurface conditions, and all
other aspects relating to the feasibility of the construction. In the event that
Tenant shall determine that it is not feasible to construct the Addition due to
subsurface conditions, Tenant may cancel this Lease and the Prior Lease shall
remain in full force and effect.
(n) To the extent practicable and lawful, Tenant agrees that
it shall continue its normal business operations at the Building during the
period of construction.
(o) At all times during the construction of the Addition,
Tenant shall keep clear the Demised Premises, inside and outside, as well as all
adjoining sidewalks, walkways and alleyways free of all obstructions and refuse.
53. PERCENTAGE RENT. In addition to the fixed minimum annual rent, Tenant
agrees to pay as additional rent a sum equal to three (3%) percent of the gross
sales in excess of the amount hereinafter set forth for each Lease Year (which
amounts are hereinafter referred to as the "Overage Amount"). Said sum being
herein sometimes referred to as "Percentage Rent" shall be three (3%) percent of
gross sales in excess of gross sales of $1,400,000.00 per Lease Year for Lease
Years 1-5; $1,522,500 per Lease Year for Lease Years 6-10; $1,651,116 per Lease
Year for Lease Years 11-16; $1,786,116 per Lease Year for Lease Years 16-20;
$1,927,982 per Lease Year for Lease Years 21-25; and $2,076,865 per Lease Year
for Lease Years 26-30.
On or before the 60th day after the expiration of the first Lease year the
term of this Lease, Tenant shall submit to Landlord a statement signed by a
Certified Public Accountant showing in reasonable detail, the amount of gross
sales for the Demised Premises during the preceding Lease year. If Percentage
Rent shall be payable with respect to the preceding Lease year the amount of
such Percentage Rent due to Landlord shall be paid over to Landlord at such time
as the redemption of said statement. Each Lease Year during the term 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" is the entire amount of actual sales
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price, whether wholly or part for cash or otherwise, actually received by Tenant
from the box office receipts of the movie theatre plus the proceeds actually
received by Tenant pursuant to any 4-Wall Deal after deducting any and all sales
and excise taxes or any other similar taxes required to be paid to any
governmental authority (local, city, county, state, federal or otherwise). Gross
Sales, as used herein, shall not include any proceeds received from the sale of
food, beverages or other concessions and shall also not include any discounts or
promotions to the extent Tenant does not receive monetary compensation therefor.
Tenant shall and hereby agrees to keep in the Premises during the term
hereof, or at a location made known to Landlord by Tenant, for a period of three
(3) consecutive years following the end of each Lease Year a permanent and
complete and accurate record of all Gross Sales (as heretofore defined) and all
revenue derived form the business conducted in the Premises for such Lease Year.
Tenant further agrees to keep and retain and preserve for at least two (2) years
after the expiration of such Lease Year all original sales records and sales
slips or sales checks or other pertinent original sales records. Accurate and
non-resetable cash registers or other modern systems shall be installed or kept
or caused to be installed or kept by Tenant within the Demised Premises, which
shall show, record and preserve, in complete detail, all items making up Gross
Sales as herein above defined. Tenant shall also submit to Landlord on or before
the sixtieth (60th) day following the end of the Tenant's fiscal year at
Tenant's offices, a complete statement made and certified (based upon the
information supplied to the CPA by the Tenant) by a Certified Public Accountant
and also certified by a duly authorized officer of Tenant showing accurately, in
reasonable detail the amount of Gross Sales made by the Tenant, 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 sixtieth (60th) 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 failure of Landlord to make any audits 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, Percentage Rent due for said
period. If any audit by the Landlord or its agents, of Tenant's records reveal a
deficit in any payment of Percentage Rent, Tenant shall forthwith pay to
Landlord the amount of deficit, and if such deficit exceeds five (5%) percent,
Tenant shall also pay interest at the rate of twelve (12%) percent per annum
from the date of which said payment should have been made, together with all
reasonable costs of such audit. Landlord agrees to keep the results of any such
audit confidential and to be bound by the results thereof. It is agreed that
nothing contained in this Lease shall be deemed or construed as a creation of a
partnership or joint venture between Landlord and Tenant, or between Landlord or
any other party, or cause Landlord to be responsible in any way for debts or
obligations of Tenant or any other party.
54. RENEWAL OPTIONS. (a) Tenant shall have the option (hereinafter
referred to as the "Renewal Options") to renew this lease for two (2) successive
renewal terms of ten (10) years each on the terms and conditions hereinafter
contained.
Tenant shall exercise the applicable renewal option by sending written
notice thereof (each of which notices is hereinafter referred to as a "Renewal
Notice") to Landlord by certified mail, return receipt requested, on or before
the day which shall be twelve (12) months next preceding last day of the
original term of this lease or the last day of the first renewal term, as the
case may be. If Tenant shall send a Renewal Notice within the time and in the
manner hereinbefore provided, this Lease shall be deemed renewed for the
applicable renewal term (hereinafter collectively referred to as the "Renewal
Terms") upon the terms, covenants and conditions hereinafter contained.
(b) The Renewal Terms, if any, shall be upon, and subject to, all of
the terms, covenants and conditions provided in this Lease for the original term
hereof, except that:
(i) Any terms, covenants, or conditions hereof that are
expressly or by their nature inapplicable to the Renewal Terms or either of them
(including, without limitation, Articles 50, 51 and 52 hereof) shall not apply
during the Renewal Terms;
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(ii) The annual fixed rent payable by Tenant during each
Renewal Term (hereinafter referred to as the "Renewal Rent"), subject to
adjustment as otherwise in this Lease provided, shall be an amount equal to the
fair market rental value of the Demised Premises, to be determined as provided
in Section 54(c) hereof and to be calculated as of the "Determination Date" (as
defined in Section 54(c)) on the basis of a new ten (10) year letting of the
Demised Premises;
(c) In the event that Tenant shall exercise either or both renewal
options as provided in Section 54 (a) hereof, the Renewal Rent for each renewal
term shall be determined jointly by Landlord and Tenant, and such determination
shall be confirmed in a writing (hereinafter referred to as a "Rental
Agreement") to be executed by Landlord and Tenant not later than the day
(hereinafter referred to as the "Determination Date") which shall be ninety (90)
days next preceeding the expiration of the original term of this Lease or the
expiration of the first renewal term as the case may be. In the event that
Landlord and Tenant shall have failed to join in executing a Rental Agreement on
or before the Determination Date because of their failure to agree upon the
Renewal Rent then the Renewal Rent shall be determined by arbitration as
follows:
(i) Landlord and Tenant shall each appoint an arbitrator by
written notice given to the other party hereto not later than thirty (30) days
after the Determination Date. If either Landlord or Tenant shall have failed to
appoint an arbitrator within such period of time and thereafter shall have
failed to do so by written notice given within a period of five (5) days after
notice by the other party requesting the appointment of such arbitrator, then
such arbitrator shall be appointed by the American Arbitration Association or
its successor (the branch office of which is located in or closest to the
Township of Roxbury, State of New Jersey, upon request of either Landlord or
Tenant, as the case may be;
(ii) The two (2) arbitrators appointed as above provided shall
attempt to reach an agreement as to the Renewal Rent and in the event they are
unable to do so within thirty (30) days after their joint appointment, then they
shall appoint a third (3rd) arbitrator by written notice given to both Landlord
and Tenant, and, if they fail to do so by written notice given within sixty (60)
days after their appointment, such third (3rd) arbitrator shall be appointed as
above provided for the appointment of an arbitrator in the event either party
fails to do so;
(iii) All of such arbitrators shall be M.A.I. or S.R.E.A.
appraisers having not less than ten (10) years experience in appraising the
value of leasehold interests in real estate similar to the Demised Premises;
(iv) The three arbitrators, selected as aforesaid, forthwith
shall convene and render their decision in accordance with the then applicable
rules of the American Arbitration Association or its successor, which decision
shall be strictly limited to a determination of the Renewal Rent within twenty
(20) days after the appointment of the third (3rd) arbitrator. The decision of
such arbitrators shall be in writing and the vote of the majority of them shall
be the decision of all and, insofar as the same is in compliance with the
provisions and conditions of this Section 54(c) hereof shall be binding upon
Landlord and Tenant. Duplicate original counterparts of such decision shall be
sent forthwith by the arbitrators by certified mail, return receipt requested,
to both Landlord and Tenant. If, for any reason whatsoever, a written decision
of the arbitrators shall not be rendered within twenty (20) days after the
appointment of the third (3rd) arbitrator, then, at any time thereafter before
such decision shall have been rendered, either party may apply to the Superior
Court of the State of New Jersey or to any other court having jurisdiction and
exercising the functions similar to those now exercised by such court, by
action, proceeding or otherwise (but not by a new arbitration proceeding) as may
be proper, to determine the question in dispute consistently with the provisions
of this lease. The cost and expense of such arbitration, action, proceeding, or
otherwise shall be borne equally by Landlord and Tenant.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement the
day and year first above written.
WITNESS LANDLORD:
FIRST ROXBURY COMPANY
/s/ Kathy Hawley By: /s/ Salvatore A. Davino
- ------------------------ ------------------------
SALVATORE A. DAVINO,
General Partner
WITNESS TENANT:
ROXBURY CINEMA INC.
/s/ Robert Ferman By: /s/ John A. Nelson
- ------------------------ ------------------------
Robert Ferman Name: John A. Nelson
Secretary Title: President
24
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ACKNOWLEDGMENTS
STATE OF NEW JERSEY )
) ss.:
COUNTY OF ESSEX )
On this 24th day of May, 1989, before me personally came Salvatore A. Davino, to
me known, to be the individual who executed the foregoing instrument; and, who,
being duly sworn by me, did depose and say that he resides in 241-A Millburn
Ave., Millburn, NJ 07041; that he is a general partner of FIRST ROXBURY COMPANY;
the general partnership described in the foregoing instrument and that he
executed the same as the general partner of FIRST ROXBURY COMPANY, as the act
and deed of said partnership.
/s/ Toni L. Shaw
------------------------
Notary Public
TONY L. SHAW
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Dec. 7, 1992
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 10th day of April, 1989, before me personally came John A. Nelson, to me
known, who, being by me duly sworn, did depose and say that he has an address
c/o Cinema Ten Theater, Route 10, Succasunna, New Jersey; that he is the
President of ROXBURY CINEMA INC., the corporation described in and which
executed the foregoing instrument as Tenant; and that he signed his name thereto
by order of the Board of Directors of said Corporation.
/s/ Arthur S. Mantel
------------------------
Notary Public
ARTHUR S. MANTEL
Notary Public, State of New York
No. 02-2516111
Qualified in New York County
Commission Expires June 30, 1989
<PAGE>
EXHIBIT A
[GRAPHIC OMITTED]
<PAGE>
EXHIBIT B
[GRAPHIC OMITTED]
<PAGE>
EXHIBIT C
[GRAPHIC OMITTED]
<PAGE>
LEASE MODIFICATION AGREEMENT
AGREEMENT made this 2nd day of May, 1990 between ROXVILLE ASSOCIATES, a
partnership of the State of New Jersey, having an office at 241-A Millburn
Avenue, Millburn, New Jersey 07041 (hereinafter referred to as "Landlord") and
ROXBURY CINEMA INC. (hereinafter referred to as "Tenant").
WITNESSETH:
WHEREAS, The Landlord and Tenant hereby acknowledge the execution of a
Lease Agreement dated May 24, 1989 for premises located at the Roxbury Mall
Shopping Center located on Route 10, in the Township of Roxbury, County of
Morris, State of New Jersey (hereinafter called "The Shopping Center") between
the Tenant and the prior Landlord, First Roxbury Company (hereinafter called the
"Prior Landlord") and
WHEREAS, on June 26, 1989 the Landlord purchased the Shopping Center from
the Prior Landlord; and
WHEREAS, the parties have agreed upon certain modifications to the Lease
to become effective upon the execution hereof, as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the sum of $1.00 to each
party, in hand paid, the receipt of which is hereby acknowledged and other good
and valuable consideration, including, without limitation, the mutual covenants
herein contained, the parties hereby agree as follows:
Landlord and Tenant acknowledge that changes are required in the Lease
Agreement because of the preparation of construction plans showing the correct
dimensions of the existing premises and the additional premises. Landlord and
Tenant agree the following paragraphs, Article 1, Article 2(b), Article 6 and
Article 7, shall apply with respect to resolution of these issues.
ARTICLE 1 - The size of the Existing Premises shown as 12,388 square feet
is changed to 12,230 square feet and the size of the Additional Premises shown
as 11,478 square feet is changed to 12,288 square feet.
ARTICLE 2(b) - The second sentence from the bottom of Paragraph 2(b) is
changed to read: Landlord represents that the Demised Premises are zoned for the
operation of a theatre comprising at least 24,518 square feet, provided that
Tenant complies with the Site Plan dated July 5, 1989 and the Elevations dated
October 19, 1989 by Modular Structures Incorporated (Exhibit A) and the
resolution approved March 1, 1988 (The "Resolution") by the Board of Adjustment
of the Township of Roxbury for the construction of the Addition.
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ARTICLE 6 - The third and fourth sentences of this article are changed to
read: The Shopping Center after the construction of the Addition will contain
61,145 total square feet of leasable space. For the purposes of this Article 6,
Tenant's pro rata share shall currently be 40.10% which has been computed by
dividing 24,518 the total leasable square foot area of the Leased Premises after
completion of the Addition, by, 61,145, the total leasable square foot area o f
the Shopping Center after construction of the Addition.
ARTICLE 7 - The second sentence in this article is changed to read:
Tenant's proportionate share of Operating Costs for the purposes of this
paragraph 7 shall mean 40.10% which has been computed by dividing 24,518, the
leasable square foot area of the Leased Premises after the completion of the
Addition, by 61,145.
IN ADDITION, in consideration of the Landlord increasing the amount of the
Alteration Fund and waiving his rights under Article 52(b), Landlord and Tenant
agree that the following changes are made to Article 4, Article 5(a), Article 51
and Article 52(b):
ARTICLE 4 - The last two lines of the third paragraph of Article 4 are
changed to: (iv) the fixed rent payable for the Short Year shall be at the rate
of $186,450.60 per year ($15,537.55 per month).
ARTICLE 5(a) - RENT SCHEDULE:
Lease Year Annually Monthly
1-5 $186,450.60 $15,537.55
6-10 193,800.60 16,150.05
11-15 201,518.10 16,793.18
16-20 209,621.47 17,468.46
21-25 218,130.01 18,177.50
26-30 226,013.98 18,834.50
ARTICLE 51 - ALTERATON FUND
In connection with the construction of the Addition in conformity with
this Agreement, Landlord agrees to disburse to the Tenant the sum of ONE MILLION
DOLLARS ($1,000,000.00) as hereinafter provided (the "Alteration Fund").
However, in the event that the actual construction costs, direct or indirect,
shall exceed the sum of $1,000,000.00, Landlord's obligation shall only be to
disburse the sum of $1,000,000.00 and same shall have satisfied its obligation
pursuant to this Agreement. The Landlord's obligation to disburse the Alteration
Fund to Tenant shall not be subject to the limitation of liability set forth in
Section 47 hereof.
(a) The Tenant shall be responsible for the entire cost of
construction of the Addition, whether direct or indirect, and irrespective of
whether such cost shall exceed the disbursement of $1,000,000.00 to be made by
the Landlord.
(b) Without limiting the generality of the Tenant's obligation as to
the construction of the Addition, the Tenant shall be responsible for all labor,
materials, equipment, tools, machinery, utilities, transportation, engineering
costs, insurance, permits and approvals, and any sales, consumer or use taxes
regarding the materials used in the Addition. The work, services, materials and
fees to be obtained and performed by Tenant in connection with the Addition are
hereinafter collectively referred to as "Tenant's Work".
2
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(c) The Alteration Fund shall be disbursed by Landlord to Tenant in
the following manner and subject to the following conditions:
(i) Tenant may submit to Landlord monthly invoices for all
work performed, all materials furnished in connection with
such work performed and materials installed in the Demised
Premises, all as part of the original contract sum of
$966,500.00 between Tenant and "Modular Structures, Inc.",
(the "Contractor") less any amounts retained by Tenant from
Contractor plus any additional amounts expended but in no
event more than $1,000,000.00 in total.
(ii) On or before the tenth day of each calendar month after
the Commencement Date, Tenant may submit to Landlord with
respect to portions of Tenant's Work completed for a preceding
calendar month for which Landlord has not paid Tenant a
"Construction Payment" (as hereinafter defined) (a "Monthly
Reimbursement Submission"), a request for payment of the items
set forth in subparagraph (i) hereof and, on or before the
fifteenth (15th) day after the submission of such Monthly
Reimbursement Submission Landlord shall pay to Tenant
sixty-eight (68%) percent of the amount of the completed work
as defined in subparagraph (i) hereof, reflected in such
Monthly Reimbursement Submission (a "Construction Payment").
The retained amounts, the difference between the Alteration
Fund and the total of the Construction Payments, shall be paid
to Tenant within fifteen (15) days after the submission to
Landlord of a certificate of occupancy (temporary or
permanent) for the Addition from the Governmental or
quasi-governmental bodies having jurisdiction thereof. In no
event will the Landlord be required to pay more than
$680,000.00 prior to the obtaining of a certificate of
occupancy.
(d) From and after the date that Landlord shall disburse any portion
of the Alteration Fund to Tenant as hereinabove provided, Tenant shall pay
monthly installments of interest only to Landlord (the "Interest Payment") on
the disbursed portion of the Alteration Fund at the rate of interest actually
being charged to Landlord pursuant to the Financing. Such interest payments
shall be made by Tenant to Landlord beginning on the first day of the first
calendar month immediately succeeding the first Construction Payment by Landlord
and shall be payable on the first day of each and every calendar month
thereafter until the Rent Commencement Date. From and after the Rent
Commencement Date, Tenant shall not be required to make any further Interest
Payments to Landlord. The amount of the Interest Payment shall be prorated to
reflect any portion of a month and shall be recomputed following every
Construction Payment made by Landlord.
(e) In the event Landlord shall fail to make any Construction
Payment as required hereunder, Tenant, at its option, may deduct the same from
any Interest Payment, fixed minimum rent or additional rent becoming due under
this Lease or the Prior Lease together with interest of the rate of thirteen
(13%) percent per year from the date such Construction Payment was due and
payable.
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(f) Tenant hereby guarantees completion of Tenant's Work subject to
Landlord's funding of the Alteration Fund as aforesaid.
(g) Deleted in its' entirety.
ARTICLE 52(b): Deleted in its's entirety.
In the event of any inconsistency between the Lease and this Modification
Agreement, the Modification Agreement shall control.
Except as herein modified, supplemented or amended, all of the terms, covenants
and conditions of the Lease shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Lease Modification Agreement
the day and year first written above.
WITNESSED: LANDLORD:
/s/ Kathy Hawley By: /s/ Salvatore A. Davino
- ------------------------ -------------------------
Salvatore A. Davino for
ROXVILLE ASSOCIATES
WITNESSED: TENANT:
/s/ Robert Ferman, Sec'y By: /s/ John A. Nelson
- ------------------------- -------------------------
ROXBURY CINEMA INC.
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12/02/94
SECOND LEASE MODIFICATION AGREEMENT
This Agreement is made this 20th day of December, 1994
BETWEEN: ROXVILLE ASSOCIATES,
with its principal place of
business at 641 Shunpike Road,
Chatham, NJ 07928 (hereinafter
referred to as "Landlord")
AND: ROXBURY CINEMA INC.,
with its principal place of business at
21 Sunset Strip, Succasunna, NJ 07876
(hereinafter referred to as "Tenant").
WHEREAS, Landlord and Tenant did enter into a Lease Agreement dated May
24, 1989 with respect to premises comprising part of the shopping center known
as Roxbury Mall located on Route 10 in Succasunna, New Jersey (which premises,
as heretofore changed or added to, is referred to below as the "Original
Premises"), as such Lease Agreement was amended by Lease Modification Agreement
dated May 2, 1990 (the original Lease Agreement having been entered into by
First Roxbury Company, predecessor in interest to Landlord) (said Lease
Agreement as heretofore modified being referred to as the "Lease"); and
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WHEREAS, the parties have agreed to a further modification of the Lease in
order for Tenant to lease and to undertake construction upon certain additional
premises contiguous to the Original Premises.
NOW, THEREFORE, for valuable mutual considerations, the parties agree as
follows:
1) LEASE OF PREMISES. Subject to the contingencies set forth hereinbelow,
Landlord demises unto Tenant and Tenant leases from Landlord, upon the terms and
conditions of the Lease as modified hereby, in addition to the Original
Premises, that certain plot of land contiguous to the Original premises as
generally depicted on Second Modification Exhibit A attached hereto and made a
part hereof ("Additional Premises").
2) RENT. It is agreed that the fixed minimum annual rent ("Basic Rent")
for the Additional Premises shall be Five Dollars ($5.00) per square foot per
annum, but shall not exceed Sixty Thousand Dollars ($60,000.00) per annum,
regardless of the square footage, payable in equal monthly installments in the
same manner as is set forth in the Lease for the monthly payments of rent on
account of the Original Premises (it being understood that the said limitation
on Basic Rent shall not affect Tenant's responsibility to pay additional rent
items based on actual gross leasable square footage). No rent on the Additional
Premises shall be due and
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payable prior to June 1, 1995, at which date, Tenant shall be and become
responsible for payment of one-half (1/2) of the Base Rent set forth above, plus
all additional rents provided for in the Lease as adjusted to reflect the total
aggregate space then comprising the leased Premises (Tenant being obligated to
pay for any utilities which it actually uses from and after the time Tenant
takes occupancy of the Additional Premises). At the earlier of (i) October 1,
1995 or (ii) the date as of which Tenant opens for business, the full amount of
the Basic Rent for the Additional Premises shall commence to be due. Such Basic
Rent shall be increased every five (5) years by an amount equal to Fifty Cents
($.50) per square foot (based on the actual gross leasable square footage) at
five (5) year intervals during the term and any option or extension terms
hereafter in effect, with the first such increase to be effective as of July 1,
2000. The Basic Rent shall be determined specifically on the basis of the actual
gross leasable area of the Addition excluding any mezzanine area used solely for
a projection booth. The parties shall execute an addendum hereto at such time as
the specific rent is determined, in order to document such rent.
3) MODIFICATION OF PERCENTAGE RENT PROVISION. After the commencement
date of the leasing of the Additional Premises, the base amount for determining
Tenant's percentage rent shall be and remain at One Million Six Hundred Thousand
Dollars ($1,600,000.00).
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4) DEMOLITION OF EXISTING BUILDING. Subject to satisfying the
contingencies as set forth hereinbelow, Tenant shall, with due diligence and in
compliance with all applicable legal requirements, at its own cost and expense,
demolish the existing improvements on the Additional Premises, it being
understood that the Additional Premises are being leased in an "as is"
condition, with whatever improvements are currently located thereon, without
representation or warranty by Landlord of any nature.
5) CONTINGENCIES. (a) Notwithstanding anything contained in this Second
Lease Modification Agreement to the contrary, the continued effectiveness of
this Second Lease Modification Agreement is contingent upon Tenant securing all
necessary municipal, state and federal permits, approvals and licenses,
including but not limited to site plan approval from the Township of Roxbury,
for the construction of an addition as set forth below. Tenant shall with due
diligence, at its own cost and expense, attempt to obtain, as of April 1, 1995,
site plan approval from the Township of Roxbury and any additional governmental
approvals as may be required for the construction on the Additional Premises of
up to 15,000 square feet of gross leasable area as an addition (the "Addition")
to the existing movie theater complex (the "Approvals"). In the event Tenant is
unable to secure all of the Approvals on or before April 1, 1995 (which may be
extended upon the mutual agreement of both parties) for at least 12,000 square
feet of gross leasable area, then this Second Lease Modification Agreement
shall, at the option
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of either party upon notice to the other, terminate and be of no further force
or effect, after which there shall be no further liability of one party to the
other under this Agreement. In the event that this Second Lease Modification
Agreement is terminated as set forth herein, the original Lease Agreement dated
May 24, 1989 as modified pursuant to the Lease Modification Agreement dated May
2, 1990 shall still remain in full force and effect.
(b) Tenant, upon obtaining the Approvals, shall at its own cost and
expenses construct the Addition on the Additional Premises, in a good and
workmanlike manner and in compliance with all legal requirements, without
causing any construction liens to be filed against the Original Premises or
Additional Premises (to the extent permitted by law but with Tenant in any event
having to cause the discharge of any such liens within thirty (30) days of the
filing thereof) and in compliance with any and all requirements of the Lease
with respect to construction work, alterations or improvements made by Tenant.
(c) If notwithstanding Tenant's obtaining of the Approvals, Tenant
determines that any environmental condition of the Additional Premises is such
as to prevent Tenant from lawfully constructing or using the Addition or is such
that the construction or use thereof would, in Tenant's reasonable judgment,
expose Tenant to possible liability by reason of the environmental condition of
the Additional Premises, then and in any of such
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events, Tenant may terminate this Agreement upon notice to Landlord given prior
to June 1, 1995. Landlord represents that it is not aware of any violations of
environmental laws (federal, state or local) affecting the Additional Premises
nor aware of any environmental condition affecting the Additional Premises as
would cause a termination right as aforesaid. If Tenant shall terminate this
Agreement in accordance with this paragraph 5(c), Landlord shall reimburse
Tenant for all reasonable costs actually incurred by Tenant in connection with
readying the Additional Premises for the intended use thereof, including costs
incurred in connection with obtaining of the Approvals and demolishing of the
existing building, but not including any costs of actual construction of the
Addition (i.e., not including so-called "hard" costs). If Tenant elects not to
terminate this Agreement in accordance with this paragraph 5(c), then Landlord
shall use reasonable efforts to remediate with due diligence the applicable
environmental problem, except that Landlord shall not be required to do so if in
the reasonable judgment of Landlord, the cost thereof would exceed $50,000.00,
nor shall Landlord in fact be obligated to expend more than $50,000.00 for any
environmental remediation (Landlord having the right to terminate this Agreement
at any time if and when such costs are reasonably estimated by Landlord to
exceed $50,000.00 or in fact are determined to exceed such amount). If Landlord
in fact remediates the environmental condition, then the time periods for
payment of rents hereunder shall be postponed from the above-stated dates for
respective time periods equal to the time of the delay
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for completion of the remediation.
6) MAINTENANCE OF THE PREMISES. Tenant shall be and remain fully
responsible for all maintenance and repairs with respect to the Additional
Premises, whether structural or nonstructural, interior or exterior,
irrespective of the type or nature of maintenance or repair required as set
forth in the original Lease. The Addition shall be and remain property of
Landlord and shall be surrendered with the Original Premises and Additional
Premises at the expiration of the term of the Lease or earlier termination
thereof, in good order and condition and in accordance with the requirements of
the Lease with respect to surrender of premises. Nothing above is intended to
alter or limit Tenant's responsibilities as to maintenance and repairs of the
Original Premises pursuant to the terms of the Lease.
7) OCCUPANCY OF THE PREMISES. Upon satisfaction of all the contingencies
set forth in this Agreement, at such time as Tenant takes occupancy of the
Additional Premises for any purpose including but not limited to the undertaking
of demolition work and/or construction work thereon, Tenant shall become
responsible for compliance with all terms, covenants and conditions of the Lease
imposed upon Tenant, it being understood that upon the execution hereof the word
"Premises" or any other words or phrases used in the Lease which are intended to
refer to the entire space being leased by Landlord to Tenant shall refer to the
aggregate of
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the Original Premises and the Additional Premises. Anything hereinabove to the
contrary notwithstanding, it is understood that rent, common area maintenance
charges, real estate taxes, or any other additional rent on the Additional
Premises shall not be due and payable prior to the time period specified herein
for commencement of the rental obligation. In no event shall any monies be due
to Landlord for the Additional Premises in the event that this Agreement is
terminated as a result of Tenant's inability to satisfy the contingencies as set
forth herein.
8) ADDRESSES. Landlord's address for rent payment and notice purposes is
641 Shunpike Road, Chatham, New Jersey 07928. A copy of any notice to Landlord
shall be sent to David Mandelbaum, 80 Main Street, West Orange, New Jersey
07052. Tenant's address is Roxbury Cinema, 21 Sunset Strip, Succasunna, New
Jersey 07876. A copy of any notice to Tenant shall be sent to Jack E. Wenarsky,
225 Route 10, Succasunna, New Jersey 07876.
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9) RATIFICATION OF EXISTING LEASE. Except as hereby amended, the Lease
shall remain in full force and effect.
WITNESS OR ATTEST: LANDLORD: Roxville Associates
/s/ Kathy Hawley By: /s/ Salvatore A. Davino
- -------------------------- ----------------------------
Salvatore A. Davino
TENANT: Roxbury Cinema, Inc.
/s/ Martin Drescher By: /s/ John Nelson
- -------------------------- ----------------------------
Martin Drescher John Nelson, President
Assistant Secretary
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