4
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
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 24, 1997
AMC ENTERTAINMENT INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-8747 43-1304369
(State or other jurisdiction(Commission (IRS Employer
of incorporation)File Number) Identification No.)
106 W. 14TH STREET, KANSAS CITY, MO 64105-1977
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(816) 221-4000
<PAGE>
Item 2. Acquisition or Disposition of Assets
(a) On November 24, 1997, certain subsidiaries of AMC
Entertainment Inc. (the "Company") sold the following 8
megaplex theatres to Entertainment Properties Trust ("EPT"),
a real estate investment trust, for an aggregate purchase
price of $162.7 million:
Theatre Name Metropolitan Area
Grand 24 Dallas, TX
Mission Valley 20 San Diego, CA
Promenade 16 Los Angeles, CA
Ontario Mills 30 Los Angeles, CA
Lennox 24 Columbus, OH
West Olive 16 St. Louis, MO
Studio 30 Houston, TX
Huebner Oaks 24 San Antonio, TX
Proceeds from the sale were applied to indebtedness
under the Company's existing credit facility.
The purchase price was based on the cost to the Company
of developing and constructing each theatre.
Concurrent with the sale of the theatres, American
Multi-Cinema, Inc. ("AMC"), a subsidiary of the Company,
leased the theatres from EPT pursuant to non-cancelable
operating leases with terms ranging from 13 to 15 years at
an initial lease rate of 10.5% with options to extend for up
to an additional 20 years. The Company has guaranteed AMC's
obligations under the leases. The leases are triple net
leases that require AMC to pay substantially all expenses
associated with the operation of the theatres, such as taxes
and other governmental charges, insurance, utilities,
service, maintenance and any ground lease payments.
The sale of the theatres was pursuant to an Agreement
of Sale and Purchase which provides for the sale to EPT of
four additional theatres under construction, the First
Colony 24 (Houston, Texas), the Oak View 24 (Omaha,
Nebraska), the Leawood Town Center 20 (Kansas City,
Missouri/Kansas) and the South Barrington 30 (Chicago,
Illinois). The aggregate sale price of these theatres,
based on the cost to the Company of their development and
construction (subject to a maximum cap), will be
approximately $86.1 million. AMC also has granted an option
to EPT to acquire two other theatres under construction, the
Cantera 30 (Chicago, Illinois) and the Livonia 20 (Detroit,
Michigan), for the cost to the Company of developing and
constructing such properties, together with certain adjacent
land parcels. Concurrent with the sale of the theatres,
AMC, EPT and the Company will enter into leases and
guarantees with respect to such theatres similar to those
referred to above.
The Company also has entered into a Right to Purchase
Agreement with EPT granting EPT a right of first refusal and
first offer to acquire and lease back to the Company any
megaplex theatre and related entertainment property acquired
or developed and owned (or ground-leased) by the Company or
its subsidiaries, exercisable for five years upon the
Company's intended disposition of such property.
Peter C. Brown is President and Chief Financial Officer
and a Director of the Company, Executive Vice President and
Chief Financial Officer and a Director of AMC and Chairman
of the Board of Trustees of EPT.
(b) Not applicable.
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Pro forma financial information - Pursuant to Rule
12b-23 of the Securities Exchange Act of 1934, as amended,
the Company hereby incorporates by reference the pro forma
financial information included on pages 68-70 and F-11 to F-
15 of its prospectus filed with the Commission on November
19, 1997 pursuant to Rule 424(b)(1) of the Securities Act of
1933, as amended (File No. 333-35281-1).
(c) Exhibits:
10.1 Agreement of Sale and Purchase between EPT and
AMC.
10.2 Option Agreement between EPT and AMC.
10.3 Right to Purchase Agreement between EPT and the
Company.
10.4 Lease entered into between EPT and AMC
respecting the Grand 24 theatre.(1)
10.5 Guaranty of Lease entered into between EPT and
the Company respecting the Grand 24 theatre
lease.(1)
(1) The leases and guarantees of leases respecting the
other theatres referred to in this report are
substantially identical in all material respects to
these filed herewith, except that base rental
amounts vary depending on the purchase price of the
property.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1994, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
AMC ENTERTAINMENT INC.
Date: December 8, 1997 By: /s/Richard L. Obert
Richard L. Obert
Senior Vice
President and
Chief Accounting
and
Information
Officer
Exhibit 10.1
AGREEMENT OF SALE AND PURCHASE
AMONG
AMERICAN MULTI-CINEMA, INC.,
a Missouri corporation
and
AMC REALTY, INC.,
a Delaware corporation
("SELLER")
AND
ENTERTAINMENT PROPERTIES TRUST,
a Maryland real estate investment trust
("PURCHASER")
For the Sale and Purchase
of
Grand 24, Dallas, TX Leawood Town Center 20, Kansas City, MO
Promenade 16, Los Angeles, CA South Barrington 30, Chicago, IL
Ontario Mills 30, Los Angeles, CA Mission Valley 20, San Diego, CA
West Olive 16, St. Louis, MO Lennox 24, Columbus, OH
Studio 30, Houston, TX First Colony 24, Houston, TX
Huebner Oaks 24, San Antonio, TX Oakview 24, Omaha, NE
November 21, 1997
Michael G. O'Flaherty E.T. Bullard
Stinson, Mag & Fizzell, P.C. Lathrop & Gage L.C.
1201 Walnut Suite 2500
Suite 2800 2345 Grand Boulevard
Kansas City, Missouri 64105 Kansas City, Missouri 64108
Telephone: (816) 691-3180 Telephone: (816) 292-2000
Telecopy: (816) 691-3495 Telecopy: (816) 292-2001
Counsel to Purchaser Counsel to Seller
<PAGE>
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT OF SALE AND PURCHASE (the "Agreement") is made and
entered into among AMERICAN MULTI-CINEMA, INC., a Missouri corporation, AMC
REALTY, INC., a Delaware corporation (hereinafter sometimes individually or
jointly referred to as "Seller" as the context requires), and ENTERTAINMENT
PROPERTIES TRUST, a Maryland real estate investment trust (hereinafter referred
to as "Purchaser"). Seller and Purchaser are sometimes collectively referred to
herein as the "Parties" and each of the Parties is sometimes singularly referred
to herein as a "Party".
WHEREAS, Seller is the owner of the Properties (as hereinafter defined);
and,
WHEREAS, Seller desires to sell and Purchaser desires to purchase each
Property, and simultaneously therewith, to enter into a lease transaction
pursuant to which Purchaser shall, as the case may be, lease or sublease to
Seller, and Seller shall lease or sublease from Purchaser, each such Property.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00),
the mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
ARTICLE I.
DEFINITIONS
As used herein (including any Exhibits attached hereto), the following
terms shall have the meanings indicated:
"Applicable Notices" shall mean any reports, notices of violation, or
notices of compliance issued in connection with any Permits.
"Assignment" shall mean an assignment or assignments in substantially
the same form as Exhibit B, attached hereto and made a part hereof, and
sufficient to transfer to Purchaser all of Seller's right, title and interest as
lessee in the Ground Leases.
"Bill of Sale" shall mean a bill or bills of sale in substantially the
same form as Exhibit C, attached hereto and made a part hereof, and sufficient
to transfer to Purchaser all Personal Property.
<PAGE>
"Business Agreements" shall mean any leases, contract rights, loan
agreements, mortgages, easements, covenants, restrictions or other agreements or
instruments affecting all or a portion of a Property, to the extent the same are
assignable by Seller, but specifically excluding all of Seller's Operating and
Service Agreements.
"Business Day(s)" shall mean calendar days other than Saturdays,
Sundays and days on which banking institutions in the City of New York are
authorized by law to close.
"Certificate of Non-Foreign Status" shall mean a certificate dated as
of the Closing Date, addressed to Purchaser and duly executed by Seller, in
substantially the same form as Exhibit D, attached hereto and made a part
hereof.
"Claim" shall mean any obligation, liability, lien, encumbrance, loss,
damage, cost, expense or claim, including, without limitation, any claim for
damage to property or injury to or death of any person or persons.
"Closing" shall mean the consummation of the sale and purchase of a
Property provided for herein, to be held at the offices of Lathrop & Gage L.C.,
2345 Grand Boulevard, Suite 2800, Kansas City, Missouri, or such other place as
the Parties may mutually agree.
"Closing Certificate" shall mean a certificate in substantially the
same form as Exhibit E, attached hereto and made a part hereof, wherein Seller
and Purchaser, respectively, shall represent that the representations and
warranties of Seller and Purchaser, respectively, contained in this Agreement
are true and correct in all material respects as of the Closing Date as if made
on and as of the Closing Date.
"Closing Date" shall mean the actual day on which the transfer to
Purchaser of title to a Property is closed. The Parties agree that each Closing
Date shall be a date designated in writing by Seller to Purchaser which date (a)
with respect to any Property on which the theatre thereon is open on the closing
of the Registered Offering, shall not be earlier than the closing of the
Registered Offering or later than twenty (20) days following the closing of the
Registered Offering, or (b) with respect to any Property on which the theatre
thereon is not open on the closing of the Registered Offering, shall be the
earlier of the actual opening date of the theatre thereon or the first day of
the month following the Anticipated Opening Date shown in the final prospectus
for the offering, or (c) such earlier or later date as shall be hereafter
mutually agreed upon by the Parties.
"Deed" shall mean a special warranty deed or deeds in substantially the
same form as Exhibit F-1, F-2 or F-3, attached hereto and made a part hereof (as
the same may be modified to comply with local law and custom), executed by
Seller, as grantor, in favor of Purchaser, as grantee, conveying the Land and
Improvements to Purchaser, subject only to the Permitted Exceptions.
<PAGE>
"Due Diligence Materials" shall mean the information to be provided by
Seller to Purchaser pursuant to the provisions of Section 4.1 hereof.
"Effective Date" shall mean November 24, 1997.
"Engineering Documents" shall mean all site plans, surveys, soil and
substrata studies, architectural drawings, plans and specifications, engineering
plans and studies, floor plans, landscape plans, Americans with Disabilities Act
compliance reports, environmental reports and studies, professional inspection
reports, construction and/or architect's reports or certificates, feasibility
studies, appraisals, and other similar plans and studies in the possession or
control of Seller that relate to the Real Property or the Personal Property, to
the extent the same are assignable by Seller.
"Exception Documents" shall mean true, correct and legible copies of
each document listed as an exception to title in the Title Commitment.
"Excluded Personal Property" shall mean all those items of tangible and
intangible personal property described on Exhibit G, attached hereto and made a
part hereof.
"Fixtures" shall mean all equipment, machinery, fixtures, and other
items of real and/or personal property, including all components thereof, now or
on the Closing Date located in, on or used in connection with, and permanently
affixed to or incorporated into, the Improvements, including, without
limitation, all furnaces, boilers, heaters, electrical equipment, electronic
security equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, and similar systems, all of which, to the greatest extent
permitted by law, are hereby deemed by the Parties to constitute real estate,
together with all replacements, modifications, alterations and additions
thereto, but specifically excluding all items included within the definition of
Personal Property and Excluded Personal Property.
"Grantor" means Clip Funding, Limited Partnership, a Delaware limited
partnership.
"Grantor Option Agreement" shall mean the Grantor Option Agreement, in
substantially the same form as Exhibit I-2, attached hereto and made a part
hereof, which shall be executed and delivered by Grantor and Purchaser at the
closing of the Registered Offering, and pursuant to which Grantor shall grant
Purchaser an exclusive option to acquire the Grantor Option Properties.
"Grantor Option Properties" shall mean the real property described on
Exhibits A-15 through A-17, attached hereto and made a part hereof, and any
other property of Grantor more particularly set forth in the Grantor Option
Agreement.
<PAGE>
"Ground Leases" shall mean those leases pursuant to which Seller has
leased certain land on which it has constructed certain improvements with
respect to the Leased Real Property.
"Hazardous Materials" shall mean (a) "hazardous substances" or "toxic
substances" as those terms are defined by the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss. 9601
et seq., or by the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1802 et
seq., all as now and hereafter amended; (b) "hazardous wastes", as that term is
defined by the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42
U.S.C. ss. 6902 et seq., as now and hereafter amended; (c) any pollutant or
contaminant or hazardous, dangerous or toxic chemicals, materials or substances
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste substances or materials, all
as now and hereafter amended; (d) petroleum including crude oil or any fraction
thereof; (e) any radioactive material, including any source, special nuclear or
by-product material as defined at 42 U.S.C. ss. 2011 et seq., as now and
hereafter amended; (f) asbestos in any form or condition; and (g)
polychlorinated biphenyl ("PCBs") or substances or compounds containing PCBs.
"Hazardous Materials Law" shall mean any local, state or federal law
relating to environmental conditions or industrial hygiene, including, without
limitation, RCRA, CERCLA, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Hazardous Materials Transportation
Act, the Federal Waste Pollution Control Act, the Clean Air Act, the Clean Water
Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and all
similar federal, state and local environmental statutes and ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder.
"Improvements" shall mean the Leased Improvements and Owned Improvements.
"Intangible Property" shall mean all Permits, Business Agreements and
other intangible property or any interest therein now or on the Closing Date
owned or held by Seller in connection with the Real Property, including all
water rights and reservations, rights to use the trade name applicable to the
Property, as set forth on Exhibits A-1 through A-12 hereof, and zoning rights
related to the Real Property, or any part thereof, to the extent the same are
assignable by Seller; provided, however, "Intangible Property" shall not include
the general corporate trademarks, trade, names except as set forth above,
service marks, logos or insignia or the books and records of Seller, Seller's
accounts receivable and Seller's business and operating licenses for the
facilities on the Real Property.
<PAGE>
"Knowledge" shall mean actual knowledge of Seller or Purchaser, as the
case may be, at the time the representation is made or deemed to have been made
with no affirmative duty of inquiry or investigation.
"Land" shall mean the Owned Real Property and the Leased Real Property.
"Laws" shall mean all federal, state and local laws, moratoria,
initiatives, referenda, ordinances, rules, regulations, standards, orders and
other governmental requirements, including, without limitation, those relating
to the environment, health and safety and disabled or handicapped persons.
"Lease" shall mean the Lease in substantially the same form as Exhibit
H-1, attached hereto and made a part hereof, which shall be executed and
delivered by Seller (or an affiliate of Seller) and Purchaser at the Closing,
and pursuant to the terms of which Purchaser shall lease a Property to American
Multi-Cinema, Inc. following the Closing. Each such Lease will be guaranteed by
AMC Entertainment Inc., a Delaware corporation ("AMCE") pursuant to a Guaranty
of Lease, substantially in the form of Exhibit H-2, attached hereto and made a
part hereof.
"Leased Improvements" shall mean all buildings, improvements,
structures and Fixtures now or on the Closing Date located on the Leased Real
Property, including, without limitation, landscaping, parking lots and
structures, roads, drainage and all above ground and underground utility
structures, equipment systems and other so-called "infrastructure" improvements.
"Leased Real Property" shall mean the real property legally described
on Exhibits A-9 through A-12, attached hereto and made a part hereof, together
with all of Seller's rights, titles, appurtenant interests, covenants, licenses,
privileges and benefits thereunto belonging, and Seller's right, title and
interest in and to any easements, rights-of-way, rights of ingress or egress or
other interests in, on or under any land, highway, street, road or avenue, open
or proposed, in, on, across, in front of, abutting or adjoining such real
property including, without limitation, any strips and gores adjacent to or
lying between such real property and any adjacent real property.
"Leased Interests" shall mean (a) the leasehold estates in the Leased
Real Property as created by the Ground Leases, and all rights and interests
created by the Ground Leases, (b) all of Seller's right, title and interest in
the Leased Improvements as created by the Ground Leases, and (c) all other
rights, titles, interests or estates of Seller in the Leased Improvements or the
Leased Real Property.
"Material" and "materially" shall mean a condition, noncompliance,
defect or other fact which would: (a) cost, with respect to any individual
Property, in the aggregate, in excess of Seven Hundred Fifty Thousand Dollars
($750,000.00) and, with respect to any single
<PAGE>
defect or fact, would cost, with respect to any individual Property, in excess
of Two Hundred Fifty Thousand Dollars ($250,000.00), to correct or repair; (b)
in the aggregate, with respect to any individual Property, result in a loss to
Purchaser or a reduction in the value of such Property in excess of Seven
Hundred Fifty Thousand Dollars ($750,000.00) and, with respect to any single
defect or fact, would, with respect to any individual Property, result in a loss
to Purchaser or a reduction in the value of such Property in excess of Two
Hundred Fifty Thousand Dollars ($250,000.00); or (c) in the aggregate with
respect to the Properties, in excess of One Million Five Hundred Thousand
Dollars ($1,500,000.00).
"Option Agreements" means the Seller Option Agreement and the Grantor
Option Agreement.
"Option Properties" means the Seller Option Properties and the Grantor
Option Properties.
"Owned Improvements" shall mean all buildings, improvements, structures
and Fixtures now or on the Closing Date located on the Owned Real Property,
including, without limitation, landscaping, parking lots and structures, roads,
drainage and all above ground and underground utility structures, equipment
systems and other so-called "infrastructure" improvements.
"Owned Real Property" shall mean the real property legally described on
Exhibits A-1 through A-8, attached hereto and made a part hereof, together with
all of Seller's rights, titles, appurtenant interests, covenants, licenses,
privileges and benefits thereunto belonging, and Seller's right, title and
interest in and to any easements, right-of-way, rights of ingress or egress or
other interests in, on or under any land, highway, street, road or avenue, open
or proposed, in, on, across, in front of, abutting or adjoining such real
property including, without limitation, any strips and gores adjacent to or
lying between such real property and any adjacent real property.
"Permits" shall mean all permits, licenses (but excluding Seller's
business and operating licenses), approvals, entitlements and other
governmental, quasi-governmental and nongovernmental authorizations including,
without limitation, certificates of use and occupancy, required in connection
with the ownership, planning, development, construction, use, operation or
maintenance of the Real Property, to the extent the same are assignable by
Seller. As used herein, "quasi-governmental" shall include the providers of all
utility services to the Real Property.
"Permitted Exceptions" shall mean those title exceptions which have
been approved in writing by Purchaser, or are deemed to have been approved by
Purchaser upon the expiration of the Review Period.
<PAGE>
"Personal Property" shall mean all Intangible Property, Warranties, and
Engineering Documents, and all those items of tangible personal property
described on Exhibit J, attached hereto and made a part hereof, other than the
Fixtures and the Excluded Personal Property, now or on the Closing Date owned by
Seller and located on or about the Land or Improvements or used in connection
with the operation thereof (specifically excluding personal property owned by
employees of Seller).
"Properties" shall mean, collectively, the Owned Real Property, the
Owned Improvements, the Leasehold Interests, the Fixtures, and the Personal
Property. A "Property" shall mean the Land, the Improvements, the Fixtures and
the Personal Property related to a particular Exhibit A-1 through A-12 Property.
"Purchase Price" shall mean the approximate aggregate sum of
$249,856,000.00, which is allocated to each individual Property as set forth on
Exhibit K attached hereto and made a part hereof. The Purchase Price with
respect to a Property shall be calculated by Seller and shall equal the cost to
Seller of developing and constructing such Property and shall include actual
land and construction costs of such Property and so-called soft or development
costs allocated to such Property. With respect to any Property on which the
theatre thereon is not open on the closing of the Registered Offering, the
Purchase Price to be paid at the closing of each such Property shall be the
amount for such Property so provided in Exhibit K; provided, however, that if
such amount does not equal the cost to Seller of developing and constructing
such Property, the difference between the Purchase Price paid at the Closing of
such Property and the cost to Seller of developing and constructing such
Property shall be paid to Seller or Purchaser, as applicable, on the date which
is 60 days from the Closing Date of such Property. Anything contained herein to
the contrary notwithstanding, the Purchase Price with respect to the Properties
on which the theatres thereon are not open on the closing of the Registered
Offering, shall not in the aggregate increase in excess of $500,000 from the
aggregate Purchase Price shown on Exhibit K with respect to such Properties.
"Real Property" shall mean the Land, the Improvements and the Fixtures.
"Registered Offering" shall be the public offering by Purchaser described
in Section 5.3.j. hereof.
"Review Period" shall mean a period commencing on the Effective Date
and ending thirty (30) days from the date of Purchaser's receipt of the last of
the Due Diligence Materials; provided, should the Effective Date be less than
thirty (30) days prior to the Closing Date, the Review Period shall terminate on
the date which is five (5) days prior to the Closing Date.
"Right to Purchase Agreement" shall mean the Right to Purchase
Agreement in substantially the same form as Exhibit L, attached hereto and made
a part hereof, which shall be executed and delivered at the Closing, and
pursuant to the terms of which AMCE shall
<PAGE>
agree to a duty of first offer and grant to Purchaser a right of first refusal
for Purchaser to acquire certain property of Seller.
"Search Reports" shall mean reports of searches made of the Uniform
Commercial Code Records of the County in which each Property is located, and of
the office of the Secretary of State of the State in which each Property is
located and in the State in which the principal office of Seller is located,
which searches shall reflect that no Property is encumbered by liens or security
interests which will remain on such Property after the Closing. The Search
Reports shall be updated, at Seller's expense, at or within fifteen (15) days
prior to Closing.
"Seller Option Agreement" shall mean the Seller Option Agreement, in
substantially the same form as Exhibit I-1, attached hereto and made a part
hereof, which shall be executed and delivered by Seller to Purchaser at the
closing of the Registered Offering, and pursuant to which Seller shall grant
Purchaser an exclusive option to acquire the Seller Option Properties.
"Seller Option Properties" shall mean the real property described on
Exhibits A-13, A-14, A-18, A-19 and A-20 attached hereto and made a part hereof,
and any other property of Seller more particularly set forth in the Seller
Option Agreement.
"Seller's Operating and Service Agreements" shall mean all management,
service and operating agreements and contracts entered into by Seller with
respect to a Property, including, but not limited to, agreements and contracts
relating to maintenance and repair at a Property, refuse service agreements,
pest control service agreements, landscaping agreements, parking lot maintenance
agreements, and snow removal contracts.
"Survey" shall mean a current "as-built" ALTA survey, certified to ALTA
requirements, prepared by an engineer or surveyor licensed in the State in which
the Land is located reasonably acceptable to Purchaser, which shall: (a) include
a narrative legal description of the Land by metes and bounds (which shall
include a reference to the recorded plat, if any), and a computation of the area
comprising the Land in both acres and gross square feet (to the nearest
one-thousandth of said respective measurement); (b) accurately show the location
on the Land of all improvements (dimensions thereof at the ground surface level
and the distance therefrom to the facing exterior property lines of the Land),
building and set-back lines, parking spaces (including number of spaces),
fences, evidence of abandoned fences, ponds, creeks, streams, rivers, officially
designated 100-year flood plains and flood prone areas, canals, ditches,
easements, roads, rights-of-way and encroachments; (c) accurately show the
location of encroachments, if any, upon adjoining property, or from adjoining
property, upon the Land; (d) state the zoning classification of the Land; (e) be
certified as of the date of the Survey to the Seller, the Purchaser, the Title
Company, and any third-party lender designated by Purchaser; (f) legibly
identify any and all recorded matters shown on said Survey by appropriate volume
and page recording references; (g) show the
<PAGE>
location and names of all adjoining streets and the distance to the nearest
streets intersecting the streets that adjoin the Land; (h) be satisfactory to
(and updated from time to time as may be required by) the Title Company so as to
permit it to delete the standard exception for survey matters and replace it
with an exception for the matters shown on the Survey; and (i) include a written
Surveyor's Certification in substantially the same form as set forth on Exhibit
M, attached hereto.
"Title Commitment" shall mean a current commitment or current
commitments issued by the Title Company to the Purchaser pursuant to the terms
of which the Title Company shall commit to issue the Title Policy to Purchaser
in accordance with the provisions of this Agreement, and reflecting all matters
which would be listed as exceptions to coverage on the Title Policy.
"Title Company" shall mean Stewart Title Guaranty Company or the
national service office of another title insurance company licensed in each
state in which a Property is located selected by Seller and reasonably
satisfactory to Purchaser.
"Title Policy" shall mean an ALTA Extended Coverage Owner's Policy (or
policies) of Title Insurance (10/17/92 Form), or comparable state promulgated
policies, with liability in the aggregate amount of the Purchase Price, dated as
of the Closing Date, issued by the Title Company, insuring title to the fee
interest (or ground lease interest, as applicable) in the Real Property in
Purchaser, subject only to the Permitted Exceptions and to the standard printed
exceptions included in the ALTA standard form owner's extended coverage policy
of title insurance, with the following modifications, if available upon
commercially reasonable terms and at commercially reasonable costs: (a) the
exception for survey matters shall be deleted and replaced by an exception for
the matters shown on the Survey; (b) the exception for ad valorem taxes shall
reflect only taxes for the current and subsequent years; (c) any exception as to
parties in possession shall be limited to rights of Seller in possession, as
lessee only, pursuant to the Lease; (d) there shall be no general exception for
visible and apparent easements or roads and highways or similar items (with any
exception for visible and apparent easements or roads and highways or similar
items to be specifically referenced to and shown on the Survey and also
identified by applicable recording information); and (e) the Title Policy shall
include such endorsements as Purchaser shall reasonably require.
"Total Properties" means the Properties and the Option Properties.
"Warranties" shall mean all warranties and guaranties with respect to
the Real Property or Personal Property, whether express or implied, which Seller
now holds or under which Seller is the beneficiary, to the extent the same are
assignable by Seller.
<PAGE>
ARTICLE II.
AGREEMENTS TO SELL, PURCHASE, LEASE AND OPTION AND
AGREEMENT REGARDING RIGHT TO PURCHASE
2.1 Agreement to Sell and Purchase. On the Closing Date for a Property,
subject to the performance by the parties of the terms and provisions of this
Agreement, Seller shall sell, convey, assign, transfer and deliver to Purchaser
and Purchaser shall purchase, acquire and accept from Seller, such Property, for
the Purchase Price therefor and subject to the terms and conditions of this
Agreement. Subject to the terms and conditions of this Agreement, the Parties
hereby agree to consummate each Closing for the sale of the Properties as soon
as practicable following the closing of the Registered Offering.
2.2 Agreement to Lease. On the Closing Date, and subject to the closing
by Purchaser of the transaction contemplated herein with respect to some or all
of the Property, Purchaser shall lease or sublease as applicable, to American
Multi-Cinema, Inc. ("AMC"), and AMC shall lease or sublease as applicable, from
Purchaser, the Property so purchased at the rental and upon the terms and
conditions set forth in a Lease. On the Closing Date for the purchase of any
Option Property, Purchaser shall lease or sublease to AMC, as applicable, and
AMC shall lease or sublease from Purchaser, as applicable, the Option Property
at a rental and upon the terms and conditions set forth in a Lease.
2.3 Agreement to Grant Option. On the Closing Date, and subject to the
Closing by Purchaser of the transaction contemplated herein with respect to some
or all of the Property, Seller shall grant to Purchaser options to acquire the
Option Properties at the purchase price and upon the terms and conditions set
forth in the Seller Option Agreement.
2.4 Right to Purchase. On the Closing Date, and subject to the Closing
by Purchaser of the transaction contemplated herein with respect to some or all
of the Property, AMCE shall agree to a duty of first offer and grant to
Purchaser a right of first refusal to acquire certain property of AMCE, upon the
terms and conditions set forth in the Right to Purchase Agreement.
ARTICLE III.
PURCHASE PRICE
3.1 Payment of Purchase Price. The Purchase Price for a Property shall
be paid by Purchaser delivering to the Seller at the Closing for such Property
Federal Reserve wire transfer funds or other immediately available collected
funds payable to the order of the Seller in the sum equal to the Purchase Price
for such Property, subject to adjustment as herein
<PAGE>
provided. On or before the Closing, the Parties shall agree on an allocation of
the Purchase Price as between the Real Property and the Personal Property for
each Property.
ARTICLE IV.
ITEMS TO BE
FURNISHED TO PURCHASER BY SELLER
4.1 Due Diligence Materials. As a courtesy and without warranty or
representation, except as expressly set forth herein, Seller previously has
delivered or made available (at the offices of Seller or its legal counsel) to
Purchaser for its review and/or copying, the following items respecting the Land
and the Property:
(a) True, correct, complete and legible copies of all Business
Agreements, Warranties, Permits, Applicable Notices, Engineering Documents and
Seller's Operating and Service Agreements (solely for the purposes of this
Section 4.1 and Section 10.18 hereof, the terms Business Agreements, Warranties,
Permits, and Engineering Documents shall include all agreements, documents and
instruments otherwise included within such definitions, whether or not the same
are assignable by Seller);
(b) True, correct, complete and legible copies of tax
statements or assessments for all real estate and personal property taxes
assessed against each Property for the current and the two prior calendar years,
if available;
(c) True, correct, complete and legible listing of all Fixtures, Personal
Property and Excluded Personal Property, including a current depreciation
schedule;
(d) True, correct, complete and legible copies of all existing
fire and extended coverage insurance policies and any other insurance policies
pertaining to each Property or certificates setting forth all coverages and
deductibles with respect thereto, if any;
(e) True, correct, complete and legible copies of all instruments
evidencing, governing or securing the payment of any loans secured by each
Property or related thereto;
(f) True, correct, complete and legible copies of any and all
environmental studies or impact reports relating to each Property, if any, and
any approvals, conditions, orders or declarations issued by any governmental
authority relating thereto (such studies and reports shall include, but not be
limited to, reports indicating whether the Property is or has been contaminated
by Hazardous Materials and whether the Property is in compliance with the
Americans with Disabilities Act and Section 504 of the Rehabilitation Act of
1973, as applicable);
<PAGE>
(g) True, correct, complete and legible copies of any and all
litigation files with respect to any pending litigation and claim files for any
claims made or threatened, the outcome of which might materially affect each
Property or the use and operation of each Property, together with summaries and
such other more detailed information as Purchaser may reasonably request with
respect to any other pending litigation or claim the outcome of which might
materially affect Seller or materially affect each Property.
(h) The Title Commitment, Exception Documents, Survey and Search Reports.
4.2 Due Diligence Review. Prior to the Closing Date (and in the event
there is more than one Closing Date, prior to the last Closing Date occurring
pursuant to the terms hereof) (the "Review Period"), Purchaser has been given
the right and opportunity to review the Due Diligence Materials delivered or
made available by Seller to Purchaser pursuant to the provisions of Section 4.1
above. By consummating the sale and purchase provided herein at Closing,
Purchaser shall be deemed to have accepted and approved the Due Diligence
Materials with respect to each Property purchased at such Closing, and the
Property, and to have waived to the extent Seller has the responsibility for the
same pursuant to the Lease, any such defect, deficiency or encumbrance disclosed
in the Due Diligence Materials with respect to each Property purchased at such
Closing, and to have accepted all exceptions to title referenced in the Title
Commitment, and all matters shown on the Survey, with respect to each Property
purchased at such Closing. Such accepted title exceptions and survey matters
shall be included in the term "Permitted Exceptions" as used herein.
4.3 Investigations. During the Review Period, Purchaser and its agents
and designees have been given the right and opportunity to examine each Property
for the purpose of inspecting the same and making tests, inquiries and
examinations (collectively the "Investigations").
4.4 Restoration After Investigations. Purchaser agrees, at its sole
expense, to cause the Property to be restored to substantially the same
condition it was in prior to such entry. In addition, Purchaser agrees to
indemnify, defend and hold Seller, its successors and assigns and the current
owner of the Land harmless for, from and against and to reimburse Seller with
respect to all claims for bodily injury, personal injury or property damage, as
well as any professional services lien, which may be asserted by reason of the
activities of Purchaser or its agents or designees during the Investigations.
The foregoing indemnity shall survive the Closing and/or any termination of this
Agreement and shall not operate as, or be deemed to be, an indemnification
against any claim arising as a result of any condition or matter discovered as a
result of the Investigations.
<PAGE>
ARTICLE V.
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
5.1 Representations and Warranties of Seller. To induce Purchaser to
enter into this Agreement and to purchase the Property, Seller represents and
warrants to Purchaser as follows:
(a) Seller has and at each Closing will have, and will convey,
transfer and assign to Purchaser, good, indefeasible and insurable right and
title to the Land and its interest, as lessee, in the Ground Leases, free and
clear of any deeds of trust, mortgages, liens, encumbrances, leases, tenancies,
licenses, chattel mortgages, conditional sales agreements, security interests,
covenants, conditions, restrictions, judgments, rights-of-way, easements,
encroachments, claims and any other matters affecting title or use of the
Property, except the Permitted Exceptions.
(b) Seller has duly and validly authorized and executed this
Agreement, and has full right, title, power and authority to enter into this
Agreement and to consummate the transactions provided for herein, and the
joinder of no person or entity will be necessary to convey each Property fully
and completely to Purchaser at the Closing of such Property and to lease or
sublease such Property from Purchaser following such Closing. Sellers are
corporations duly organized, validly existing and in good standing under the
laws of the States of Missouri and Delaware, respectively, and are qualified to
do business in each state in which any of the Property owned or leased by such
Seller is located. The consummation of the transactions contemplated herein does
not require the approval of Seller's shareholders or any third party, except
such third party approvals as Seller has obtained or will obtain prior to each
Closing Date. The execution by Seller of this Agreement and the consummation by
Seller of the transactions contemplated hereby do not, and at the Closing will
not, result in a breach of any of the terms or provisions of, or constitute a
default or a condition which upon notice or lapse of time or both would ripen
into a default under, Seller's Bylaws or Certificate of Incorporation, any
indenture, agreement, instrument or obligation to which Seller is a party or by
which any Property or any portion thereof is bound; and does not constitute a
violation of any Laws, order, rule or regulation applicable to Seller or any
portion of a Property of any court or of any federal, state or municipal
regulatory body or administrative agency or other governmental body having
jurisdiction over Seller or any portion of a Property.
(c) There are no adverse parties in possession of a Property
or of any part thereof. Seller has not granted to any party any license, lease
or other right relating to the use or possession of a Property, except as set
forth in the Permitted Exceptions or provided to Purchaser in the Due Diligence
Materials.
<PAGE>
(d) Except as provided to Purchaser in the Due Diligence
Materials, no written notice has been received from any insurance company that
has issued a policy with respect to any portion of a Property or from any board
of fire underwriters (or other body exercising similar functions), claiming any
defects or deficiencies or requiring the performance of any repairs,
replacements, alterations or other work and as of the Closing no such written
notice will have been received which shall not have been cured. No written
notice has been received by Seller from any issuing insurance company that any
of such policies will not be renewed, or will be renewed only at a higher
premium rate than is presently payable therefor.
(e) No pending condemnation, eminent domain, assessment or
similar proceeding or charge affecting any Property or any portion thereof
exists. Seller has not heretofore received any written notice, and has no actual
knowledge, that any such proceeding or charge is contemplated.
(f) All Improvements (including all utilities) have been, or
as of the Closing will be, substantially completed and installed in accordance
with the plans and specifications approved by the governmental authorities
having jurisdiction to the extent applicable and are transferable to Purchaser
without additional cost. Permanent certificates of occupancy, all licenses,
Permits, authorizations and approvals required by all governmental authorities
having jurisdiction, and the requisite certificates of the local board of fire
underwriters (or other body exercising similar functions) have been, or as of
the Closing will be, issued for the Improvements, and, as of the Closing, where
required, all of the same will be in full force and effect; provided, however,
that temporary or partial certificates of occupancy may be provided in the event
that under laws or regulations applicable to a particular Property, a permanent
certificate of occupancy is not available because of the status of construction
or subleasing of a portion of the Property. The Improvements, as designed and
constructed, substantially comply or will substantially comply with all
statutes, restrictions, regulations and ordinances applicable thereto, including
but not limited to the Americans with Disabilities Act and Section 504 of the
Rehabilitation Act of 1973, as applicable.
(g) The existing water, sewer, gas and electricity lines,
storm sewer and other utility systems on the Land are reasonably adequate to
serve the current and contemplated utility needs of each Property. All utilities
required for the operation of the Improvements enter the Land through adjoining
public streets or through adjoining private land in accordance with valid public
or private easements that will inure to the benefit of Purchaser. All approvals,
licenses and permits required for said utilities have been obtained and are in
full force and effect. All of said utilities are installed and operating and all
installation and connection charges have been paid in full.
(h) The location, construction, occupancy, operation and use
of each Property (including the Improvements) do not violate any applicable law,
statute, ordinance, rule, regulation, order or determination of any governmental
authority or any board of fire
<PAGE>
underwriters (or other body exercising similar functions), or any restrictive
covenant or deed restriction (recorded or otherwise) affecting the Property or
the location, construction, occupancy, operation or use thereof, including,
without limitation, all applicable zoning ordinances and building codes, flood
disaster laws and health and environmental laws and regulations, the Americans
with Disabilities Act and Section 504 of the Rehabilitation Act of 1973, as
applicable.
(i) There are not any structural defects in any of the
buildings or other Improvements constituting each Property. The Improvements,
all heating, electrical, plumbing and drainage at, or servicing, each Property
and all facilities and equipment relating thereto are and, as of the Closing,
will be in good condition and working order and adequate in quantity and quality
for the normal operation of the Property. No part of any Property has been
destroyed or damaged by fire or other casualty. To Seller's knowledge, there are
no unsatisfied written requests for repairs, restorations or alterations with
regard to the Property from any person, entity or authority, including but not
limited to any lender, insurance provider or governmental authority.
(j) Except as may be set forth in any of the Due Diligence
Materials, no work has been performed or is in progress at any Property, and no
materials will have been delivered to the Property that might provide the basis
for a mechanic's, materialmen's or other lien against the Property or any
portion thereof, and all amounts due for such work and material shall have been
paid and all discharged to Purchaser's satisfaction as of Closing.
(k) There exist no service contracts, management or other
agreements applicable to any Property, to which Seller is a party or otherwise
known to Seller, other than Seller's Operating and Service Agreements and those
agreements furnished to Purchaser pursuant to Section 4.1.
(l) Seller is not in default in any manner which would result
in a material adverse effect on Seller or the Property under any of the Ground
Leases, Business Agreements, or Seller's Operating and Service Agreements or any
of the covenants, conditions, restrictions, rights-of-way or easements affecting
the Property or any portion thereof, and, to Seller's knowledge no other party
to any of the foregoing is in material default thereunder.
(m) There are no actions, suits or proceedings pending or, to
Seller's knowledge, threatened against or affecting any Property or any portion
thereof, or relating to or arising out of the ownership or operation of the
Property, or by any federal, state, county or municipal department, commission,
board, bureau or agency or other governmental instrumentality, other than those
disclosed to Purchaser pursuant to Section 4.1. All judicial proceedings
concerning any Property will be finally dismissed and terminated prior to
Closing, excluding lawsuits in which Seller is involved in its ordinary course
of business. Seller hereby covenants and agrees to indemnify and hold Purchaser
harmless from and against any and all
<PAGE>
Claims (including reasonable attorneys' fees) arising out of or relating to any
lawsuits or other proceedings in which Seller is involved which lawsuits involve
or relate to the Property.
(n) Each Property has free and unimpeded access to presently
existing public highways and/or roads (either directly or by way of perpetual
easements); and, to Seller's knowledge, all approvals necessary therefor have
been obtained. No fact or condition exists which would result in the termination
of the current access from the Property to any presently existing public
highways and/or roads adjoining or situated on the Property.
(o) There are no attachments, executions, assignments for the
benefit of creditors, or voluntary or involuntary proceedings in bankruptcy or
under any other debtor relief laws contemplated by or, to Seller's knowledge,
pending or threatened against Seller or any Property.
(p) Except as may be set forth in any of the Due Diligence
Materials, no Hazardous Materials have been installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or disposed
of, or otherwise present in, on or under any Property by Seller or to Seller's
knowledge by any third party. No activity has been undertaken on any Property by
Seller or, to Seller's knowledge, by any third party which would cause (i) any
Property to become a hazardous waste treatment, storage or disposal facility
within the meaning of, or otherwise bring any Property within the ambit of RCRA
or any Hazardous Materials Law, (ii) a release or threatened release of
Hazardous Materials from any Property within the meaning of, or otherwise bring
any Property within the ambit of, CERCLA or SARA or any Hazardous Materials Law
or (iii) the discharge of Hazardous Materials into any watercourse, body of
surface or subsurface water or wetland, or the discharge into the atmosphere of
any Hazardous Materials which would require a permit under any Hazardous
Materials Law. No activity has been undertaken with respect to any Property by
Seller or, to Seller's knowledge, any third party which would cause a violation
or support a claim under RCRA, CERCLA, SARA or any other Hazardous Materials
Law. No investigation, administrative order, litigation or settlement with
respect to any Hazardous Materials is in existence with respect to any Property,
nor, to Seller's knowledge, is any of the foregoing threatened. No written
notice has been received by Seller from any entity, governmental body or
individual claiming any violation of any Hazardous Materials Law, or requiring
compliance with any Hazardous Materials Law, or demanding payment or
contribution for environmental damage or injury to natural resources. Seller has
not obtained and, to Seller's knowledge, is not required to obtain, and Seller
has no knowledge of any reason Purchaser will be required to obtain, any
permits, licenses, or similar authorizations to occupy, operate or use the
Improvements or any part of any Property by reason of any Hazardous Materials
Law. Notwithstanding the representations made herein, such representations are
and shall be deemed to be limited by the matters detailed in any Phase I
Preliminary Site Assessment or other Due Diligence Materials obtained by or
provided to Purchaser in connection herewith.
<PAGE>
(q) Each Property includes all items of property, tangible and
intangible, currently used by Seller in connection with the operation of the
Property, other than the Excluded Personal Property, Seller's Operating and
Service Agreements, and property expressly excluded from the definition of the
Property, and the exclusion of such items from the property to be conveyed to
Purchaser will not have any materials adverse affect upon Purchaser's ownership
of the Property following the Closing.
(r) Seller has not knowingly failed to disclose anything of a material
nature with respect to the Due Diligence Materials.
5.2 Seller Indemnification. Seller hereby agrees to indemnify and
defend, at its sole cost and expense, and hold Purchaser, its successors and
assigns, harmless from and against and to reimburse Purchaser with respect to
any and all claims, demands, actions, causes of action, losses, damages,
liabilities, costs and expenses (including, without limitation, reasonable
attorney's fees and court costs) actually incurred of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by Purchaser at any time and from time to time by reason of or arising out of
(a) the breach of any representation or warranty of Seller set forth in Section
5.1 or any breach by Seller of any of its covenants and agreements set forth in
this Agreement; (b) the failure of Seller, in whole or in part, to perform any
obligation required to be performed by Seller pursuant to Section 5.1.; or (c)
the ownership, construction, occupancy, operation, use and maintenance by Seller
or its agents of the Property prior to the Closing Date. This indemnity applies,
without limitation, to the violation on or before the Closing Date of any
Hazardous Materials Law in effect on or before the Closing Date and any and all
matters arising out of any act, omission, event or circumstance existing or
occurring on or prior to the Closing Date (including, without limitation, the
presence on the Property or release from the Property of Hazardous Materials
disposed of or otherwise released prior to the Closing Date), regardless of
whether the act, omission, event or circumstance constituted a violation of any
Hazardous Materials Law at the time of its existence or occurrence. Subject to
the provisions of Section 5.5 hereof, the provisions of this Section shall
survive the Closing of the transaction contemplated by Section 2.1 of this
Agreement and shall continue thereafter in full force and effect for the benefit
of Purchaser, its successors and assigns. Notwithstanding any provision of this
Agreement to the contrary, Purchaser may exercise any right or remedy Purchaser
may have at law or in equity should Seller fail to meet, comply with or perform
its indemnity obligations required by this Section 5.2. In the event a defect,
claim or deficiency is discovered by Purchaser prior to Closing or is noticed in
writing by Seller to Purchaser prior to Closing, Purchaser shall either
terminate the Agreement as provided herein or waive the defect, claim or
deficiency and proceed to Closing.
5.3 Covenants and Agreements of Seller. Seller covenants and agrees with
Purchaser, from the Effective Date until the Closing with respect to a Property
or earlier termination of this Agreement:
<PAGE>
(a) Seller shall: (i) operate the Property in the ordinary
course of Seller's business and in substantially the same manner as currently
operated; and (ii) fully maintain and repair the Improvements, the Fixtures, and
the Personal Property in good condition and repair.
(b) Seller shall cause to be maintained in full force and
effect fire and extended coverage insurance upon the Property and public
liability insurance with respect to damage or injury to persons or property
occurring on or relating to operation of the Property in commercially reasonable
amounts (which for purposes hereof shall be deemed to be the amounts and
coverages in effect on the date hereof).
(c) Seller shall pay when due all bills and expenses of the
Property. Seller shall not enter into or assume any new Business Agreements with
regard to the Property which are in addition to or different from those
furnished and disclosed to Purchaser and reviewed and approved pursuant to
Section 4.1, except in the ordinary course of business.
(d) Seller shall not create or permit to be created any liens,
easements or other conditions affecting any portion of the Property or the uses
thereof, except in the ordinary course of business, without the prior written
consent of Purchaser. No such lien, easement or other condition affecting the
Property which Seller creates or permits to be created shall be or constitute a
Permitted Exception until (i) such lien, easement or other condition affecting
the Property has been disclosed to Purchaser in writing prior to Closing, (ii) a
true and correct copy of all documents or instruments creating, evidencing,
affecting or relating to such lien, easement or other condition affecting the
Property has been provided to Purchaser prior to Closing, and (iii) Purchaser
has determined to proceed with Closing and accept such lien, easement or other
condition affecting the Property as a Permitted Exception, which determination
shall be conclusively presumed by Purchaser's election to proceed with Closing
following Seller's compliance with the requirements of (i) and (ii) of this
paragraph.
(e) Seller will pay, as and when due, all interest and
principal and all other charges payable under any indebtedness of Seller secured
by the Property from the date hereof until Closing, and will not suffer or
permit any default or, except in the ordinary course of business, amend or
modify the documents evidencing or securing any such indebtedness without the
prior consent of Purchaser.
(f) Seller will give to Purchaser, its attorneys, accountants
and other representatives, during normal business hours and as often as may be
reasonably requested, access to all books, records and files relating to the
Property so long as the same does not unreasonably interfere with Seller's
business operations.
(g) Seller shall not remove any Personal Property or Fixtures
from the Land or Improvements without replacing same with substantially similar
items of equal or
<PAGE>
greater value and repairing the damage, if any, to the Property as a result of
such removal, except in the ordinary course of business.
(h) During the pendency of this Agreement, Seller, its
corporate officers, directors, and agents shall not negotiate the sale or other
disposition of the Property with any person or entity other than Purchaser, and
shall not take any steps to initiate, consummate or document the sale or other
disposition of the Property, or any portion thereof, to any person or entity
other than Purchaser.
(i) Prior to the Closing Date, Seller agrees to notify
Purchaser in writing within three (3) Business Days of any offer received by,
delivered to or communicated to Seller for the purchase, sale, acquisition or
other disposition of the Property.
(j) Seller shall provide representations, warranties and
consents as may be reasonably required in connection with any public offering of
stock (the "Registered Offering") or debt obligations by Purchaser, including,
and similar in kind but not limited to, inclusion of financial statements,
summary financial information and other required information concerning Seller,
or Seller as lessee under the Lease, in any Securities and Exchange Commission
filings. Seller shall cooperate in the preparation by Purchaser of a Form S-11
under the Securities Act of 1933, as amended, to be filed with the Securities
and Exchange Commission in connection with the Registered Offering.
(k) Seller is sophisticated and experienced in the sale and
lease back of real property and that in proceeding with the sale and lease back
of the Properties, Seller will be relying on its investigations and examinations
of each Property and not on any representation or warranty of Purchaser not
expressly set forth in this Agreement.
5.4 Representations and Warranties of Purchaser. To induce Seller to
enter into this Agreement and to sell the Property, Purchaser represents and
warrants to Seller as follows:
(a) Purchaser has duly and validly authorized and executed
this Agreement, and has full right, title, power and authority to enter into
this Agreement and to consummate the transactions provided for herein, and the
joinder of no person or entity will be necessary to purchase the Property from
Seller at Closing, and to lease or sublease the Property to Seller following
Closing. Purchaser is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the State of Maryland and is
qualified to do business in each state in which any of the Property is located.
The consummation of the transactions contemplated herein or in the Lease does
not require the approval of Purchaser's shareholders or any third party, except
such third party approvals as Purchaser has obtained or will obtain prior to the
Closing Date.
<PAGE>
(b) The execution by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby do not, and at
the Closing will not, result in a breach of any of the terms or provisions of,
or constitute a default or a condition which upon notice or lapse of time or
both would ripen into a default under, any indenture, agreement, instrument or
obligation to which Purchaser is a party; and does not, and at the Closing will
not, constitute a violation of any Laws, order, rule or regulation applicable to
Purchaser of any court or of any federal, state or municipal regulatory body or
administrative agency or other governmental body having jurisdiction over
Purchaser.
(c) There are no actions, suits or proceedings pending, or to
the actual knowledge of Purchaser, threatened, before or by any judicial body or
any governmental authority, against Purchaser which would affect in any material
respect Purchaser's ability to proceed with the transaction contemplated by this
Agreement and the Lease.
(d) Purchaser is sophisticated and experienced in the purchase
of real property and that in proceeding with the acquisition of the Properties,
Purchaser will be relying on its Investigations and examinations of each
Property and not on any representation or warranty of Seller not expressly set
forth in this Agreement.
5.5 Survival. Each of the representations, warranties and covenants
contained in this Article V is intended for the benefit of Seller or Purchaser,
as the case may be, and any underwriter of the Registered Offering. Each of said
representations, warranties and covenants shall survive the Closing for a period
of one (1) year, at which time they shall expire unless prior to such time the
party receiving such representations, warranties and covenants has filed a legal
action alleging a breach of one or more of the representations, warranties or
covenants. No investigation, audit, inspection, review or the like conducted by
or on behalf of the party receiving such representations, warranties or
covenants shall be deemed to terminate the effect of any such representations,
warranties and covenants, it being understood that such party has the right to
rely thereon and that each such representation, warranty and covenant
constitutes a material inducement to execute this Agreement and to close the
transaction contemplated hereby.
ARTICLE VI.
CONDITIONS TO OBLIGATIONS
6.1 Conditions to the Purchaser's Obligations. The obligations of
Purchaser to purchase a Property from Seller and to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at all times
prior to and as of the Closing with respect to such Property (or such other time
period specified below), of each of the following conditions:
<PAGE>
(a) All of the representations and warranties of Seller set
forth in this Agreement shall be true at all times prior to, at and as of, the
Closing in all material respects and Seller shall deliver a Closing Certificate
in substantially the same form attached hereto as Exhibit E updating such
representations and warranties.
(b) Seller shall have delivered, performed, observed and
complied with, all of the items, instruments, documents, covenants, agreements
and conditions required by this Agreement to be delivered, performed, observed
and complied with by it prior to, or as of, the Closing.
(c) Seller shall not be in receivership or dissolution or have
made any assignment for the benefit of creditors, or admitted in writing its
inability to pay its debts as they mature, or have been adjudicated a bankrupt,
or have filed a petition in voluntary bankruptcy, a petition or answer seeking
reorganization or an arrangement with creditors under the federal bankruptcy law
or any other similar law or statute of the United States or any state and no
such petition shall have been filed against it.
(d) No material or substantial adverse change shall have
occurred with respect to the condition, financial or otherwise, of the Seller or
the Property.
(e) Neither the Property nor any part thereof or interest
therein shall have been taken by execution or other process of law in any action
prior to Closing, nor shall any action or proceeding seeking any such taking be
pending.
(f) During the Review Period, Purchaser shall have
satisfactorily completed its Investigations of the Property with respect to the
physical condition thereof by agents or contractors selected by Purchaser.
(g) During the Review Period, Purchaser shall have received,
in form acceptable to Purchaser, evidence of compliance by the Property with all
building codes, zoning ordinances and other governmental entitlements as
necessary for the operation of the Property for the current and intended use,
including, without limitation, certificates of occupancy (or evidence of the
existence thereof) and such other permits, licenses, approvals, agreements and
authorizations as are required for the operation of the Property for the current
and intended use.
(h) During the Review Period, all necessary approvals,
consents and the like of third parties to the validity and effectiveness of the
transactions contemplated hereby have been obtained.
(i) During the Review Period, Purchaser has reviewed and satisfied itself
with respect to the Due Diligence Materials.
<PAGE>
(j) No material portion of the Property shall have been destroyed by fire
or casualty.
(k) No condemnation, eminent domain or similar proceedings
shall have been commenced or threatened in writing with respect to any material
portion of the Property.
(l) Purchaser shall have been successful in causing the
formation of a real estate investment trust whose interests have been sold to
the public pursuant to the Registered Offering and in connection therewith shall
have raised capital in an amount not less than $250,000,000.00.
(m) Purchaser shall have entered into option agreements,
acceptable in form and substance to Purchaser, for the purchase of the Grantor
Option Properties, such agreements to provide for the closing of the purchase of
the Grantor Option Property as set forth therein.
With respect to the conditions precedent set forth in paragraphs (a), (b), (d),
(e), (f), (g), (h), (i), (j), (k) and (m) of this Section 6.1, Purchaser shall
have the right to determine whether each of said conditions has been satisfied
separately with respect to each individual Property or Grantor Option Property,
and if Purchaser shall determine that any of said conditions have not been
satisfied with respect to any one or more individual Property or Grantor Option
Property, Purchaser shall have the right, notwithstanding the provisions of
Section 6.2 hereof (subject, however, to the provisions of Section 6.3(e)
hereof), to terminate this Agreement with respect to any one or more individual
Property as to which any of such conditions has not been satisfied, and to
proceed with the Closing with respect to the remaining Property.
6.2 Failure of Conditions to Purchaser's Obligations. In the event any
one or more of the conditions to Purchaser's obligations are not satisfied or
waived in whole or in part at any time prior to or as of the Closing of a
Property, Purchaser, at Purchaser's option, shall be entitled to: (a) terminate
this Agreement by giving written notice thereof to Seller, whereupon all moneys,
if any, which have been delivered by Purchaser to Seller or the Title Company
shall be immediately refunded to Purchaser and Purchaser shall have no further
obligations or liabilities hereunder; or (b) proceed to Closing hereunder.
6.3 Conditions to the Seller's Obligations. The obligations of Seller to
sell a Property to Purchaser and to consummate the transactions contemplated by
this Agreement are subject to the satisfaction, at all times prior to and as of
the Closing with respect to such Property (or such other time period specified
below), of each of the following conditions:
(a) All of the representations and warranties of Purchaser set
forth in this Agreement shall be true at all times prior to, at and as of, the
Closing in all material respects and Purchaser shall deliver a Closing
Certificate in substantially the same form attached hereto as Exhibit E updating
such representations and warranties.
<PAGE>
(b) Purchaser shall have delivered, performed, observed and
complied with, all of the items, instruments, documents, covenants, agreements
and conditions required by this Agreement to be delivered, performed, observed
and complied with by it prior to, or as of, the Closing.
(c) Purchaser shall not be in receivership or dissolution or
have made any assignment for the benefit of creditors, or admitted in writing
its inability to pay its debts as they mature, or have been adjudicated a
bankrupt, or have filed a petition in voluntary bankruptcy, a petition or answer
seeking reorganization or an arrangement with creditors under the federal
bankruptcy law or any other similar law or statute of the United States or any
state and no such petition shall have been filed against it.
(d) Purchaser shall have been successful in causing the
formation of a real estate investment trust whose interests have been sold to
the public pursuant to the Registered Offering and in connection therewith shall
have raised capital in an amount not less than $250,000,000.00.
(e) Purchaser has not elected to terminate this Agreement with
respect to any Properties with an aggregate Purchase Price in excess of
$35,000,000.00.
(f) Purchaser has entered into a Lease with respect to each
Property being purchased by Purchaser effective upon and following the Closing
of such Property.
6.4 Failure of Conditions to Seller's Obligations. In the event any one
or more of the conditions to Seller's obligations are not satisfied or waived in
whole or in part at any time prior to or as of the Closing, Seller, at Seller's
option, shall be entitled to: (a) terminate this Agreement by giving written
notice thereof to Purchaser, whereupon all moneys, if any, which have been
delivered by Seller to Purchaser or the Title Company shall be immediately
refunded to Seller and Seller shall have no further obligations or liabilities
hereunder; or (b) proceed to Closing hereunder.
ARTICLE VII.
PROVISIONS WITH RESPECT TO THE CLOSING
7.1 Seller's Closing Obligations. At the Closing with respect to a
Property, Seller shall furnish and deliver to the Purchaser, at Seller's
expense, the following:
(a) The Deed, Title Policy (or the Title Commitment or pro
forma policy marked-up and initialed by the Title Company), Assignment, Bill of
Sale, Certificate of Non- Foreign Status, Closing Certificate, Right to Purchase
Agreement, Lease, and Seller Option Agreement, each duly executed and
acknowledged by Seller and, as appropriate, in recordable form acceptable in the
state and county in which each Property is located.
(b) Certificates of casualty and fire insurance for the
Property and satisfactory evidence of all other insurance coverages as required
pursuant to the Lease showing Purchaser as additional insured and loss payee
thereunder, as required by the Lease, with appropriate provisions for prior
notice to Purchaser in the event of cancellation or termination of such policies
and otherwise in form and substance as required by the Lease.
(c) Search Reports, dated not more than fifteen (15) days
prior to Closing, evidencing no UCC-1 Financing Statements or other filings in
the name of Seller with respect to the Property which will remain on the
Property after the Closing or an indemnification in form reasonably acceptable
to Seller and Purchaser with respect to any such UCC-1 Financing Statements or
other filings.
(d) Such affidavits or letters of indemnity from Seller as the
Title Company shall reasonably require in order to omit from the Title Policy
all exceptions for unfiled mechanic's, materialman's or similar liens and rights
of parties in possession (other than Seller under the Lease and other tenants
under leases disclosed in the Due Diligence Materials).
(e) Any and all transfer declarations or disclosure documents,
duly executed by the appropriate parties, required in connection with the Deed
by any state, county or municipal agency having jurisdiction over the Property
or the transactions contemplated hereby.
(f) An opinion of Seller's counsel, dated as of the Closing Date, in the
form of Exhibit N-1, attached hereto.
(g) Such instruments or documents as are necessary, or
reasonably required by Purchaser or the Title Company, to evidence the status
and capacity of Seller and the authority of the person or persons who are
executing the various documents on behalf of Seller in connection with the
purchase and sale transaction contemplated hereby.
(h) Such other documents as are reasonably required by Purchaser to carry
out the terms and provisions of this Agreement.
(i) All necessary approvals, consents, certificates and the
like of third parties to the validity and effectiveness of the transactions
contemplated hereby.
7.2 Purchaser's Closing Obligations. At the Closing with respect to a
Property, Purchaser shall furnish and deliver to Seller, at Purchaser's expense,
the following:
<PAGE>
(a) Federal Reserve, wire transfer funds or other immediately
available collected funds payable to the order of Seller representing the cash
portion of the Purchase Price due in accordance with Section 3.1 herein.
(b) The Closing Certificate, Right to Purchase Agreement, Lease, Assignment
and Seller Option Agreement duly executed and acknowledged by Purchaser.
(c) Such instruments or documents as are necessary, or
reasonably required by Seller or the Title Company, to evidence the status and
capacity of Purchaser and the authority of the person or persons who are
executing the various documents on behalf of Purchaser in connection with the
purchase and sale transaction contemplated hereby.
(d) An opinion of Purchaser's counsel, dated as of the Closing Date, in the
form of Exhibit N-2, attached hereto.
(e) Such other documents as are reasonably required by Seller to carry out
the terms and provisions of this Agreement.
(f) All necessary approvals, consents, certificates and the
like of third parties to the validity and effectiveness of the transaction
contemplated hereby.
7.3 Purchaser's Closing Obligations Respecting Grantor Option Property.
Upon each closing of the purchase of any Grantor Option Property, Purchaser
hereby agrees that it will, at such closing, furnish and deliver to Seller, at
Purchaser's expense, the Lease, duly executed and acknowledged by Purchaser, as
appropriate, with respect to such Grantor Option Property.
ARTICLE VIII.
EXPENSES OF CLOSING
8.1 Adjustments. There shall be no adjustment of taxes, assessments,
water or sewer charges, gas, electric, telephone or other utilities, operating
expenses, employment charges, premiums on insurance policies, rents or other
normally proratable items, it being agreed and understood by the Parties that
the Seller shall be obligated to pay such items after Closing under the terms of
the Lease.
8.2 Closing Costs. Seller shall pay (a) all title examination fees and
premiums for the Title Policy; (b) the cost of the Search Reports; (c) the cost
of the Survey; (d) Seller's legal, accounting and other professional fees and
expenses and the cost of all opinions, certificates, instruments, documents and
papers required to be delivered, or to cause to be
<PAGE>
delivered, by Seller hereunder, including without limitation, the cost of
performance by Seller of its obligations hereunder; (e) all other costs and
expenses which are required to be paid by Seller pursuant to other provisions of
this Agreement; (f) any and all state, municipal or other documentary or
transfer taxes payable in connection with the delivery of any instrument or
document provided in or contemplated by this Agreement or any agreement or
commitment described or referred to herein; and (g) the charges for or in
connection with the recording and/or filing of any instrument or document
provided herein or contemplated by this Agreement or any agreement or document
described or referred to herein. Purchaser shall pay (x) Purchaser's legal,
accounting and other professional fees and expenses and the cost of all
opinions, certificates, instruments, documents and papers required to be
delivered, or to cause to be delivered, by Purchaser hereunder, including,
without limitation, the cost of performance by Purchaser of its obligations
hereunder; (y) all costs and expenses, if any, in any way relating to any
financing which Purchaser obtains in connection with its purchase of the
Property; and (z) all other costs and expenses which are required to be paid by
Purchaser pursuant to other provisions of this Agreement. Purchaser and Seller
shall each be responsible for other costs in the usual and customary manner for
this kind of transaction in the county where the Property is located.
8.3 Commissions/Broker's Fees. Seller hereby represents and warrants to
Purchaser that it has not contacted any real estate broker, finder or any other
party in connection with this transaction, and that it has not taken any action
which would result in any real estate broker's, finder's or other fees being due
or payable to any party with respect to the transaction contemplated hereby.
Purchaser hereby represents and warrants to Seller that Purchaser has not
contacted any real estate broker, finder or any other party in connection with
this transaction, and that it has not taken any action which would result in any
real estate broker's, finder's or other fees being due or payable to any party
with respect to the transaction contemplated hereby. Each Party hereby
indemnifies and agrees to hold the other Party harmless from any loss,
liability, damage, cost or expenses (including reasonable attorneys' fees)
resulting to such other Party by reason of a breach of the representation and
warranty made by such Party herein.
ARTICLE IX.
DEFAULT AND REMEDIES
9.1 Seller's Default; Purchaser's Remedies.
(a) Seller's Default. Seller shall be deemed to be in default
hereunder upon the occurrence of one of the following events: (i) any of
Seller's warranties or representations set forth herein shall be untrue in any
material respect when made or at Closing; or (ii) Seller shall fail to meet,
comply with, or perform any covenant, agreement or obligation on its part
required within the time limits and in the manner required in this
<PAGE>
Agreement, which, in either of such events, is not cured by Seller within 10
days following receipt by Seller of written notice of default from Purchaser.
(b) Purchaser's Remedies. In the event Seller shall be deemed
to be in default hereunder Purchaser may, at Purchaser's sole option, do any one
or more of the following: (i) terminate this Agreement by written notice
delivered to Seller on or before the Closing; and/or (ii) enforce specific
performance of this Agreement against Seller including Purchaser's reasonable
costs and attorneys' fees and court costs in connection therewith; and/or (iii)
exercise any other right or remedy Purchaser may have at law or in equity by
reason of such default including, but not limited to, the recovery of reasonable
attorneys' fees and court costs incurred by Purchaser in connection herewith.
9.2 Purchaser's Default; Seller's Remedies.
(a) Purchaser's Default. Purchaser shall be deemed to be in
default hereunder upon the occurrence of one of the following events: (i) any of
Purchaser's warranties or representations set forth herein shall be untrue in
any material respect when made or at Closing; or (ii) Purchaser shall fail to
meet, comply with, or perform any covenant, agreement or obligation on its part
required within the time limits and in the manner required in this Agreement,
which, in either of such events, is not cured by Purchaser within 10 days
following receipt by Purchaser of written notice of default from Seller.
(b) Seller's Remedies. In the event Purchaser shall be deemed
to be in default hereunder Seller may, at Seller's sole option, do any one or
more of the following: (i) terminate this Agreement by written notice delivered
to Purchaser on or before the Closing; and/or (ii) enforce specific performance
of this Agreement against Purchaser including Seller's reasonable costs and
attorneys' fees and court costs in connection therewith; and/or (iii) exercise
any other right or remedy Seller may have at law or in equity by reason of such
default including, but not limited to, the recovery of reasonable attorneys'
fees and court costs incurred by Seller in connection herewith.
ARTICLE X.
MISCELLANEOUS
10.1 Survival. Except as otherwise specifically provided herein
(including Section 5.5), all of the representations, warranties, covenants,
agreements and indemnities of Seller and Purchaser contained in this Agreement,
to the extent not performed at the Closing, shall not survive the Closing but
shall be deemed to merge upon the acceptance of the Deed and Assignment by
Purchaser.
<PAGE>
10.2 Right of Assignment. Neither this Agreement nor any interest herein
may be assigned or transferred by either Party to any person, firm, corporation
or other entity without the prior written consent of the other Party, which
consent may be given or withheld in the sole discretion of such other Party.
10.3 Notices. All notices, requests and other communications under this
Agreement shall be in writing and shall be either (a) delivered in person, (b)
sent by certified mail, return-receipt requested, (c) delivered by a recognized
delivery service or (d) sent by facsimile transmission and addressed as follows:
If intended for Purchaser: Entertainment Properties Trust
One Kansas City Place
1200 Main Street, Suite 3250
Kansas City, Missouri 64105
Phone: (816) 480-4649
Fax: (816) 480-4617
Attention: Robert L. Harris, President
With a copy to: Stinson, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
Kansas City, Missouri 64105
Phone: (816) 691-3180
Fax: (816) 691-3495
Attention: Michael G. O'Flaherty
If intended for Seller: AMC Entertainment Inc.
106 West 14th Street
Kansas City, Missouri 64105
Phone: (816) 221-4000
Fax: (816) 480-4617
Attention: Peter C. Brown, President
With a copy to: Lathrop & Gage L.C.
2345 Grand Boulevard, Suite 2800
Kansas City, Missouri 64108
Phone: (816) 460-5515
Fax: (816) 292-2001
Attention: E.T. Bullard
or at such other address, and to the attention of such other person, as the
parties shall give notice as herein provided. A notice, request and other
communication shall be deemed to be duly received if delivered in person or by a
recognized delivery service, when delivered to the address of the recipient, if
sent by mail, on the date of receipt by the recipient as shown on
<PAGE>
the return receipt card, or if sent by facsimile, upon receipt by the sender of
an acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient's facsimile number; provided that if a notice, request or other
communication is served by hand or is received by facsimile on a day which is
not a Business Day, or after 5:00 P.M. on any Business Day at the addressee's
location, such notice or communication shall be deemed to be duly received by
the recipient at 9:00 A.M. on the first Business Day thereafter.
10.4 Entire Agreement; Modifications. This Agreement, together with the
other documents, instruments and agreements heretofore or hereinafter entered
into in connection with the transactions contemplated herein, embody and
constitute the entire understanding between the Parties with respect to the
transactions contemplated herein, and all prior or contemporaneous agreements,
understandings, representations and statements (oral or written) are merged into
this Agreement. Neither this Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an instrument in writing
signed by the Party against whom the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the extent set
forth in such instrument.
10.5 Applicable Law. THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF MISSOURI. The Parties agree that jurisdiction and venue for any
litigation arising out of this Agreement shall be in the Courts of Jackson
County, Missouri or the U.S. District Court for the Western District of Missouri
and, accordingly, consent thereto.
10.6 Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe, or limit the scope
or intent of this Agreement or any of the provisions hereof.
10.7 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective successors and
assigns.
10.8 Time is of the Essence. With respect to all provisions of this
Agreement, time is of the essence. However, if the first date of any period
which is set out in any provision of this Agreement falls on a day which is not
a Business Day, then, in such event, the time of such period shall be extended
to the next day which is a Business Day.
10.9 Waiver of Conditions. Any Party may at any time or times, at its
election, waive any of the conditions to its obligations hereunder, but any such
waiver shall be effective only if contained in a writing signed by such Party.
No waiver by a Party of any breach of this Agreement or of any warranty or
representation hereunder by the other Party shall be deemed to be a waiver of
any other breach by such other Party (whether preceding or succeeding and
<PAGE>
whether or not of the same or similar nature), and no acceptance of payment or
performance by a Party after any breach by the other Party shall be deemed to be
a waiver of any breach of this Agreement or of any representation or warranty
hereunder by such other Party, whether or not the first Party knows of such
breach at the time it accepts such payment or performance. No failure or delay
by a Party to exercise any right it may have by reason of the default of the
other Party shall operate as a waiver of default or modification of this
Agreement or shall prevent the exercise of any right by the first Party while
the other Party continues to be so in default.
10.10 Confidentiality. Except as hereinafter provided, from and after the
execution of this Agreement, Seller and Purchaser shall keep the Due Diligence
Materials and the contents thereof confidential and shall not disclose the
contents thereof except to their respective attorneys, accountants, engineers,
surveyors, financiers, bankers and other parties necessary for the consummation
of the contemplated transactions. Notwithstanding the foregoing, it is
acknowledged that Purchaser is in the process of consummating the Registered
Offering and, as a result thereof, is and will be subject to various securities
laws relating to, among other things, disclosure of material facts. Accordingly,
this document may be filed with the SEC and its contents and information
relating to the Properties and the Option Properties will be disclosed to
Purchaser's underwriters, the Securities and Exchange Commission and/or similar
state authorities and to the public. If Purchaser does not consummate the
Registered Offering or acquire any Property, it shall deliver to Seller all
copies of proprietary information delivered to Purchaser by Seller.
10.11 Attorneys' Fees. If either Party obtains a judgment against the
other Party by reason of a breach of this Agreement, a reasonable attorneys' fee
as fixed by the court shall be included in such judgment.
10.12 Remedies Cumulative. Except as herein expressly set forth, no
remedy conferred upon a Party by this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given herein or now or
hereafter existing at law, in equity or by statute.
10.13 Terminology. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The words "herein",
"hereof", "hereunder" and similar terms shall refer to this Agreement unless the
context requires otherwise. Whenever the context so requires, the neuter gender
includes the masculine and/or feminine gender, and the singular number includes
the plural and vice versa.
10.14 Estoppel. Each Party confirms and agrees that (a) it has read and
understood all of the provisions of this Agreement; (b) it is an experienced
real estate investor and is familiar with major sophisticated transactions such
as that contemplated by this Agreement; (c) it has negotiated with the other
Party at arm's length with equal bargaining power; and (d) it has been advised
by competent legal counsel of its own choosing.
<PAGE>
10.15 Joint Preparation. This Agreement (and all exhibits thereto) is
deemed to have been jointly prepared by the Parties hereto, and any uncertainty
or ambiguity existing herein, if any, shall not be interpreted against any
Party, but shall be interpreted according to the application of the rules of
interpretation for arm's-length agreements.
10.16 Counterparts. This Agreement may be executed at different times and
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be as effective as delivery of a manually executed
counterpart of this Agreement. In proving this Agreement, it shall not be
necessary to produce or account for more than one such counterpart signed by the
Party against whom enforcement is sought.
10.17 Joint and Several Liability. The obligations of the parties-Seller
under this Agreement, and under all of the documents and instruments entered
into in accordance with the provisions of this Agreement, are joint and several.
10.18 Non-Assignable Agreement. Seller hereby covenants and agrees to use
its best reasonable efforts to obtain all necessary consents to the assignment
of any of the Business Agreements, Warranties, Permits and Engineering Documents
(for the purposes of this Section 10.18, the terms Business Agreements,
Warranties, Permits and Engineering Documents shall include all agreements,
documents and instruments included within such definitions, whether or not the
same are assignable by Seller) as Purchaser and Seller shall mutually agree
upon. If and to the extent that any of the Business Agreements, Warranties,
Permits and Engineering Documents are not assignable without the consent or
approval of a third party, and either (a) Purchaser does not request that Seller
obtain such approval, or (b) Seller is unable to obtain such approval following
Purchaser's request that Seller obtain such consent or approval, then, in either
of such cases, and subject to the Purchaser's rights as hereinafter provided,
Seller hereby agrees and acknowledges that it will, from and after Closing, own
and hold such Business Agreements, Warranties, Permits and Engineering Documents
as agent on behalf of and for the benefit of Purchaser, and Seller will from
time to time execute such documents as Purchaser shall reasonably require to
evidence that Seller own and hold such Business Agreements, Warranties, Permits
and Engineering Documents as agent on behalf of and for the benefit of
Purchaser. If Purchaser requests that Seller obtain any required third party
consents for the assignment by Seller to Purchaser of any of the Business
Agreements, Warranties, Permits and Engineering Documents, and Seller is unable
to obtain such consent or approval, then Purchaser shall have the rights to
determine that the Due Diligence Materials with respect to the Property or Due
Diligence Property in question are not acceptable to Purchaser, and to exercise
Purchaser's rights under Section 6.1 hereof. The provisions of this Section
10.18 shall not terminate or expire as otherwise provided in this Agreement, but
the covenants and agreements in this Section 10.18 shall survive and continue in
full force and effect at all times after Closing.
<PAGE>
10.19 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER
AGREEMENTS.
EXECUTED to be effective as of the Effective Date.
SELLER:
(SEAL) AMERICAN MULTI-CINEMA, INC.,
ATTEST a Missouri corporation
By:/s/ Nancy L. Gallagher By:/s/ Peter C. Brown
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: Executive Vice President and
Chief Financial Officer
Seller's Tax Identification Number:
43-0908577
(SEAL) AMC REALTY, INC., a Delaware
ATTEST corporation
By:/s/ Nancy L. Gallagher By:/s/ Peter C. Brown
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: Executive Vice President and
Chief Financial Officer
Seller's Tax Identification Number:
43-1360799
PURCHASER:
(SEAL) ENTERTAINMENT PROPERTIES TRUST,
a Maryland Real Estate Investment Trust
By: /s/ David M. Brain
Name: David M. Brain
Title: Chief Financial Officer and
Secretary
Purchaser's Tax Identification Number:
43-179877
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS..................................................1
ARTICLE II.
AGREEMENTS TO SELL, PURCHASE, LEASE AND OPTION AND
AGREEMENT REGARDING RIGHT TO PURCHASE.......................10
2.1 Agreement to Sell and Purchase. ..................10
2.2 Agreement to Lease.................................10
2.3 Agreement to Grant Option..........................10
2.4 Right to Purchase..................................10
ARTICLE III.
PURCHASE PRICE..............................................10
3.1 Payment of Purchase Price..........................10
ARTICLE IV.
ITEMS TO BE FURNISHED TO PURCHASER BY SELLER................11
4.1 Due Diligence Materials............................11
4.2 Due Diligence Review...............................12
4.3 Investigations.....................................12
4.4 Restoration After Investigations...................12
ARTICLE V.
REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS..................................................13
5.1 Representations and Warranties of Seller...........13
5.2 Seller Indemnification.............................17
5.3 Covenants and Agreements of Seller.................17
5.4 Representations and Warranties of Purchaser........19
5.5 Survival...........................................20
<PAGE>
ARTICLE VI.
CONDITIONS TO OBLIGATIONS..................................20
6.1 Conditions to the Purchaser's Obligations.........20
6.2 Failure of Conditions to Purchaser's Obligations..22
6.3 Conditions to the Seller's Obligations............22
6.4 Failure of Conditions to Seller's Obligations.....23
ARTICLE VII.
PROVISIONS WITH RESPECT TO THE CLOSING.....................23
7.1 Seller's Closing Obligations........................23
7.2 Purchaser's Closing Obligations.....................24
7.3 Purchaser's Closing Obligations Respecting Grantor..25
Option Property
ARTICLE VIII.
EXPENSES OF CLOSING........................................25
8.1 Adjustments.......................................25
8.2 Closing Costs.....................................25
8.3 Commissions/Broker's Fees.........................26
ARTICLE IX.
DEFAULT AND REMEDIES.......................................26
9.1 Seller's Default; Purchaser's Remedies............26
a. Seller's Default.................26
b. Purchaser's Remedies.............27
9.2 Purchaser's Default; Seller's Remedies............27
a. Purchaser's Default..............27
b. Seller's Remedies................27
ARTICLE X.
MISCELLANEOUS..............................................27
10.1 Survival..........................................27
10.2 Right of Assignment...............................27
10.3 Notices...........................................28
10.4 Entire Agreement; Modifications...................29
10.5 Applicable Law....................................29
10.6 Captions..........................................29
<PAGE>
10.7 Binding Effect....................................29
10.8 Time is of the Essence............................29
10.9 Waiver of Conditions..............................29
10.10 Confidentiality...................................30
10.11 Attorneys' Fees...................................30
10.12 Remedies Cumulative...............................30
10.13 Terminology.......................................30
10.14 Estoppel..........................................30
10.15 Joint Preparation.................................30
10.16 Counterparts......................................31
10.17 Joint and Several Liability.......................31
10.18 Non-Assignable ...................................31
10.19 Waiver of Jury Trial..............................31
SCHEDULE OF EXHIBITS
A - Property Descriptions (A-1 through A-20)
B - Assignment of Ground Lease
C - Bill of Sale
D - Certificate of Non-Foreign Status
E - Closing Certificate
F - Deed (F-1 through F-3)
G - Excluded Personal Property
H-1 - Lease
H-2 - Guaranty of Lease
I-1 - Seller Option Agreement
I-2 - Grantor Option Agreement
J - Personal Property
K - Purchase Price
L - Right to Purchase Agreement
<PAGE>
M - Form of Surveyor's Certification
N - Opinions of Seller's and Purchaser's Counsel (N-1 and N-2)
<PAGE>
EXHIBITS
TO
AGREEMENT OF SALE AND PURCHASE
AMONG
AMERICAN MULTI-CINEMA, INC.,
a Missouri corporation,
and
AMC REALTY, INC.,
a Delaware corporation
("SELLER")
AND
ENTERTAINMENT PROPERTIES TRUST,
a Maryland real estate investment trust
("PURCHASER")
November 21, 1997
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EXHIBIT K
TO AGREEMENT OF SALE AND PURCHASE
AMERICAN MULTI-CINEMA, INC./ENTERTAINMENT PROPERTIES TRUST
Purchase Price
Fee or Estimated
Theatre Name Ground Lease Purchase Price
1. Grand 24 Fee 18,600,000
2. Promenade 16 Fee 28,500,000
3. Ontario Mills 30 Fee 25,300,000
4. West Olive 16 Fee 17,800,000
5. Studio 30 Fee 26,400,000
6. Huebner Oaks 24 Fee 16,700,000
7. Leawood Town Centre 20 Fee 15,800,000
8. South Barrington 30 Fee 35,556,000 1
9. Mission Valley 20 Ground Lease 16,300,000
10. Lennox 24 Ground Lease 12,900,000
11. First Colony 24 Ground Lease 19,100,000
12. Oakview 24 Ground Lease 16,700,000
- --------
1 Includes $1,056,000 for an out parcel which will be purchased by
Purchaser at the closing of the purchase of South Barrington 30 unless such
parcel is under contract or has been sold by Seller at the time of such closing.
A-1
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Exhibit 10.2
OPTION AGREEMENT
AMONG
AMERICAN MULTI-CINEMA, INC.,
a Missouri corporation
and
AMC REALTY, INC.,
a Delaware corporation
("SELLER")
AND
ENTERTAINMENT PROPERTIES TRUST,
a Maryland real estate investment trust
("PURCHASER")
For the Sale and Purchase
of
Grand 24, Dallas, TX Leawood Town Center 20, Kansas City, MO
Promenade 16, Los Angeles, CA South Barrington 30, Chicago, IL
Ontario Mills 30, Los Angeles, CA Mission Valley 20, San Diego, CA
West Olive 16, St. Louis, MO Lennox 24, Columbus, OH
Studio 30, Houston, TX First Colony 24, Houston, TX
Huebner Oaks 24, San Antonio, TX Oakview 24, Omaha, NE
November 21, 1997
Michael G. O'Flaherty E.T. Bullard
Stinson, Mag & Fizzell, P.C. Lathrop & Gage L.C.
1201 Walnut Suite 2500
Suite 2800 2345 Grand Boulevard
Kansas City, Missouri 64105 Kansas City, Missouri 64108
Telephone: (816) 691-3180 Telephone: (816) 292-2000
Telecopy: (816) 691-3495 Telecopy: (816) 292-2001
Counsel to Purchaser Counsel to Seller
<PAGE>
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is made and entered into among
AMERICAN MULTI-CINEMA, INC., a Missouri corporation, AMC REALTY, INC., a
Delaware corporation (hereinafter sometimes individually or jointly referred to
as "Seller" as the context requires), and ENTERTAINMENT PROPERTIES TRUST, a
Maryland real estate investment trust (hereinafter referred to as "Purchaser").
Seller and Purchaser are sometimes collectively referred to herein as the
"Parties" and each of the Parties is sometimes singularly referred to herein as
a "Party".
WHEREAS, Seller is the owner of the Properties (as hereinafter defined);
and,
WHEREAS, Seller desires to sell and Purchaser desires to purchase each
Property, and simultaneously therewith, to enter into a lease transaction
pursuant to which Purchaser shall, as the case may be, lease or sublease to
Seller, and Seller shall lease or sublease from Purchaser, each such Property.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00),
the mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
ARTICLE I.
DEFINITIONS
As used herein (including any Exhibits attached hereto), the following
terms shall have the meanings indicated:
"Applicable Notices" shall mean any reports, notices of violation, or
notices of compliance issued in connection with any Permits.
"Assignment" shall mean an assignment or assignments in substantially
the same form as Exhibit B, attached hereto and made a part hereof, and
sufficient to transfer to Purchaser all of Seller's right, title and interest as
lessee in the Ground Leases.
"Bill of Sale" shall mean a bill or bills of sale in substantially the
same form as Exhibit C, attached hereto and made a part hereof, and sufficient
to transfer to Purchaser all Personal Property.
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"Business Agreements" shall mean any leases, contract rights, loan
agreements, mortgages, easements, covenants, restrictions or other agreements or
instruments affecting all or a portion of a Property, to the extent the same are
assignable by Seller, but specifically excluding all of Seller's Operating and
Service Agreements.
"Business Day(s)" shall mean calendar days other than Saturdays,
Sundays and days on which banking institutions in the City of New York are
authorized by law to close.
"Certificate of Non-Foreign Status" shall mean a certificate dated as
of the Closing Date, addressed to Purchaser and duly executed by Seller, in
substantially the same form as Exhibit D, attached hereto and made a part
hereof.
"Claim" shall mean any obligation, liability, lien, encumbrance, loss,
damage, cost, expense or claim, including, without limitation, any claim for
damage to property or injury to or death of any person or persons.
"Closing" shall mean the consummation of the sale and purchase of a
Property provided for herein, to be held at the offices of Lathrop & Gage L.C.,
2345 Grand Boulevard, Suite 2800, Kansas City, Missouri, or such other place as
the Parties may mutually agree.
"Closing Certificate" shall mean a certificate in substantially the
same form as Exhibit E, attached hereto and made a part hereof, wherein Seller
and Purchaser, respectively, shall represent that the representations and
warranties of Seller and Purchaser, respectively, contained in this Agreement
are true and correct in all material respects as of the Closing Date as if made
on and as of the Closing Date.
"Closing Date" shall mean the actual day on which the transfer to
Purchaser of title to a Property is closed. The Parties agree that each Closing
Date shall be a date designated in writing by Seller to Purchaser which date (a)
with respect to any Property on which the theatre thereon is open on the closing
of the Registered Offering, shall not be earlier than the closing of the
Registered Offering or later than twenty (20) days following the closing of the
Registered Offering, or (b) with respect to any Property on which the theatre
thereon is not open on the closing of the Registered Offering, shall be the
earlier of the actual opening date of the theatre thereon or the first day of
the month following the Anticipated Opening Date shown in the final prospectus
for the offering, or (c) with respect to any Seller Option Property shall be a
date mutually agreed upon by the Parties but not less than 90 days after the
exercise by Purchaser of its Option with respect to such Option Property, or (d)
such earlier or later date as shall be hereafter mutually agreed upon by the
Parties.
"Deed" shall mean a special warranty deed or deeds in substantially the
same form as Exhibit F-1, F-2 or F-3, attached hereto and made a part hereof (as
the same may be
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modified to comply with local law and custom), executed by Seller, as grantor,
in favor of Purchaser, as grantee, conveying the Land and Improvements to
Purchaser, subject only to the Permitted Exceptions.
"Due Diligence Materials" shall mean the information to be provided by
Seller to Purchaser pursuant to the provisions of Section 4.1 hereof.
"Effective Date" shall mean November 24, 1997.
"Engineering Documents" shall mean all site plans, surveys, soil and
substrata studies, architectural drawings, plans and specifications, engineering
plans and studies, floor plans, landscape plans, Americans with Disabilities Act
compliance reports, environmental reports and studies, professional inspection
reports, construction and/or architect's reports or certificates, feasibility
studies, appraisals, and other similar plans and studies in the possession or
control of Seller that relate to the Real Property or the Personal Property, to
the extent the same are assignable by Seller.
"Exception Documents" shall mean true, correct and legible copies of
each document listed as an exception to title in the Title Commitment.
"Excluded Personal Property" shall mean all those items of tangible and
intangible personal property described on Exhibit G, attached hereto and made a
part hereof.
"Fixtures" shall mean all equipment, machinery, fixtures, and other
items of real and/or personal property, including all components thereof, now or
on the Closing Date located in, on or used in connection with, and permanently
affixed to or incorporated into, the Improvements, including, without
limitation, all furnaces, boilers, heaters, electrical equipment, electronic
security equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, and similar systems, all of which, to the greatest extent
permitted by law, are hereby deemed by the Parties to constitute real estate,
together with all replacements, modifications, alterations and additions
thereto, but specifically excluding all items included within the definition of
Personal Property and Excluded Personal Property.
"Grantor" means Clip Funding, Limited Partnership, a Delaware limited
partnership.
"Grantor Option Agreement" shall mean the Grantor Option Agreement, in
substantially the same form as Exhibit I-2, attached hereto and made a part
hereof, which shall be executed and delivered by Grantor and Purchaser at the
closing of the Registered Offering, and pursuant to which Grantor shall grant
Purchaser an exclusive option to acquire the Grantor Option Properties.
<PAGE>
"Grantor Option Properties" shall mean the real property described on
Exhibits A-15 through A-17, attached hereto and made a part hereof, and any
other property of Grantor more particularly set forth in the Grantor Option
Agreement.
"Ground Leases" shall mean those leases pursuant to which Seller has
leased certain land on which it has constructed certain improvements with
respect to the Leased Real Property.
"Hazardous Materials" shall mean (a) "hazardous substances" or "toxic
substances" as those terms are defined by the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss. 9601
et seq., or by the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1802 et
seq., all as now and hereafter amended; (b) "hazardous wastes", as that term is
defined by the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42
U.S.C. ss. 6902 et seq., as now and hereafter amended; (c) any pollutant or
contaminant or hazardous, dangerous or toxic chemicals, materials or substances
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste substances or materials, all
as now and hereafter amended; (d) petroleum including crude oil or any fraction
thereof; (e) any radioactive material, including any source, special nuclear or
by-product material as defined at 42 U.S.C. ss. 2011 et seq., as now and
hereafter amended; (f) asbestos in any form or condition; and (g)
polychlorinated biphenyl ("PCBs") or substances or compounds containing PCBs.
"Hazardous Materials Law" shall mean any local, state or federal law
relating to environmental conditions or industrial hygiene, including, without
limitation, RCRA, CERCLA, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Hazardous Materials Transportation
Act, the Federal Waste Pollution Control Act, the Clean Air Act, the Clean Water
Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and all
similar federal, state and local environmental statutes and ordinances and the
regulations, orders, or decrees now or hereafter promulgated thereunder.
"Improvements" shall mean the Leased Improvements and Owned Improvements.
"Intangible Property" shall mean all Permits, Business Agreements and
other intangible property or any interest therein now or on the Closing Date
owned or held by Seller in connection with the Real Property, including all
water rights and reservations, rights to use the trade name applicable to the
Property, as set forth on Exhibits A-1 through A-12 hereof, and zoning rights
related to the Real Property, or any part thereof, to the extent the same are
assignable by Seller; provided, however, "Intangible Property" shall not include
the general corporate trademarks, trade names except as set forth above, service
<PAGE>
marks, logos or insignia or the books and records of Seller, Seller's accounts
receivable and Seller's business and operating licenses for the facilities on
the Real Property.
"Knowledge" shall mean actual knowledge of Seller or Purchaser, as the
case may be, at the time the representation is made or deemed to have been made
with no affirmative duty of inquiry or investigation.
"Land" shall mean the Owned Real Property and the Leased Real Property.
"Laws" shall mean all federal, state and local laws, moratoria,
initiatives, referenda, ordinances, rules, regulations, standards, orders and
other governmental requirements, including, without limitation, those relating
to the environment, health and safety and disabled or handicapped persons.
"Lease" shall mean the Lease in substantially the same form as Exhibit
H-1, attached hereto and made a part hereof, which shall be executed and
delivered by Seller (or an affiliate of Seller) and Purchaser at the Closing,
and pursuant to the terms of which Purchaser shall lease a Property to American
Multi-Cinema, Inc. following the Closing. Each such Lease will be guaranteed by
AMC Entertainment Inc., a Delaware corporation ("AMCE") pursuant to a Guaranty
of Lease, substantially in the form of Exhibit H-2, attached hereto and made a
part hereof.
"Leased Improvements" shall mean all buildings, improvements,
structures and Fixtures now or on the Closing Date located on the Leased Real
Property, including, without limitation, landscaping, parking lots and
structures, roads, drainage and all above ground and underground utility
structures, equipment systems and other so-called "infrastructure" improvements.
"Leased Real Property" shall mean the real property legally described
on Exhibits A-9 through A-12, attached hereto and made a part hereof, together
with all of Seller's rights, titles, appurtenant interests, covenants, licenses,
privileges and benefits thereunto belonging, and Seller's right, title and
interest in and to any easements, rights-of-way, rights of ingress or egress or
other interests in, on or under any land, highway, street, road or avenue, open
or proposed, in, on, across, in front of, abutting or adjoining such real
property including, without limitation, any strips and gores adjacent to or
lying between such real property and any adjacent real property.
"Leased Interests" shall mean (a) the leasehold estates in the Leased
Real Property as created by the Ground Leases, and all rights and interests
created by the Ground Leases, (b) all of Seller's right, title and interest in
the Leased Improvements as created by the Ground Leases, and (c) all other
rights, titles, interests or estates of Seller in the Leased Improvements or the
Leased Real Property.
<PAGE>
"Material" and "materially" shall mean a condition, noncompliance,
defect or other fact which would: (a) cost, with respect to any individual
Property, in the aggregate, in excess of Seven Hundred Fifty Thousand Dollars
($750,000.00) and, with respect to any single defect or fact, would cost, with
respect to any individual Property, in excess of Two Hundred Fifty Thousand
Dollars ($250,000.00), to correct or repair; (b) in the aggregate, with respect
to any individual Property, result in a loss to Purchaser or a reduction in the
value of such Property in excess of Seven Hundred Fifty Thousand Dollars
($750,000.00) and, with respect to any single defect or fact, would, with
respect to any individual Property, result in a loss to Purchaser or a reduction
in the value of such Property in excess of Two Hundred Fifty Thousand Dollars
($250,000.00); or (c) in the aggregate with respect to the Properties, in excess
of One Million Five Hundred Thousand Dollars ($1,500,000.00).
"Option Agreements" means the Seller Option Agreement and the Grantor
Option Agreement.
"Option Properties" means the Seller Option Properties and the Grantor
Option Properties.
"Owned Improvements" shall mean all buildings, improvements, structures
and Fixtures now or on the Closing Date located on the Owned Real Property,
including, without limitation, landscaping, parking lots and structures, roads,
drainage and all above ground and underground utility structures, equipment
systems and other so-called "infrastructure" improvements.
"Owned Real Property" shall mean the real property legally described on
Exhibits A-1 through A-8, attached hereto and made a part hereof, together with
all of Seller's rights, titles, appurtenant interests, covenants, licenses,
privileges and benefits thereunto belonging, and Seller's right, title and
interest in and to any easements, right-of-way, rights of ingress or egress or
other interests in, on or under any land, highway, street, road or avenue, open
or proposed, in, on, across, in front of, abutting or adjoining such real
property including, without limitation, any strips and gores adjacent to or
lying between such real property and any adjacent real property.
"Permits" shall mean all permits, licenses (but excluding Seller's
business and operating licenses), approvals, entitlements and other
governmental, quasi-governmental and nongovernmental authorizations including,
without limitation, certificates of use and occupancy, required in connection
with the ownership, planning, development, construction, use, operation or
maintenance of the Real Property, to the extent the same are assignable by
Seller. As used herein, "quasi-governmental" shall include the providers of all
utility services to the Real Property.
<PAGE>
"Permitted Exceptions" shall mean those title exceptions which have
been approved in writing by Purchaser, or are deemed to have been approved by
Purchaser upon the expiration of the Review Period.
"Personal Property" shall mean all Intangible Property, Warranties, and
Engineering Documents, and all those items of tangible personal property
described on Exhibit J, attached hereto and made a part hereof, other than the
Fixtures and the Excluded Personal Property, now or on the Closing Date owned by
Seller and located on or about the Land or Improvements or used in connection
with the operation thereof (specifically excluding personal property owned by
employees of Seller).
"Properties" shall mean, collectively, the Owned Real Property, the
Owned Improvements, the Leasehold Interests, the Fixtures, and the Personal
Property. A "Property" shall mean the Land, the Improvements, the Fixtures and
the Personal Property related to a particular Exhibit A-1 through A-12 Property.
"Purchase Price" shall mean the approximate aggregate sum of
$249,856,000.00, which is allocated to each individual Property as set forth on
Exhibit K attached hereto and made a part hereof. The Purchase Price with
respect to a Property shall be calculated by Seller and shall equal the cost to
Seller of developing and constructing such Property and shall include actual
land and construction costs of such Property and so-called soft or development
costs allocated to such Property. With respect to any Property on which the
theatre thereon is not open on the closing of the Registered Offering, the
Purchase Price to be paid at the closing of each such Property shall be the
amount for such Property so provided in Exhibit K; provided, however, that if
such amount does not equal the cost to Seller of developing and constructing
such Property, the difference between the Purchase Price paid at the Closing of
such Property and the cost to Seller of developing and constructing such
Property shall be paid to Seller or Purchaser, as applicable on the date which
is 60 days from the Closing Date of such Property. Anything contained herein to
the contrary notwithstanding, the Purchase Price with respect to the Properties
on which the theatres thereon are not open on the closing of the Registered
Offering, shall not in the aggregate increase in excess of $500,000 from the
aggregate Purchase Price shown on Exhibit K with respect to such Properties.
"Real Property" shall mean the Land, the Improvements and the Fixtures.
"Registered Offering" shall be the public offering by Purchaser described
in Section 5.3.j. hereof.
"Review Period" shall mean a period commencing on the Effective Date
and ending thirty (30) days from the date of Purchaser's receipt of the last of
the Due Diligence Materials; provided, should the Effective Date be less than
thirty (30) days prior to the Closing Date, the Review Period shall terminate on
the date which is five (5) days prior to the Closing Date.
<PAGE>
"Right to Purchase Agreement" shall mean the Right to Purchase
Agreement in substantially the same form as Exhibit L, attached hereto and made
a part hereof, which shall be executed and delivered at the Closing, and
pursuant to the terms of which AMCE shall agree to a duty of first offer and
grant to Purchaser a right of first refusal for Purchaser to acquire certain
property of AMCE.
"Search Reports" shall mean reports of searches made of the Uniform
Commercial Code Records of the County in which each Property is located, and of
the office of the Secretary of State of the State in which each Property is
located and in the State in which the principal office of Seller is located,
which searches shall reflect that no Property is encumbered by liens or security
interests which will remain on such Property after the Closing. The Search
Reports shall be updated, at Seller's expense, at or within fifteen (15) days
prior to Closing.
"Seller Option Agreement" shall mean the Seller Option Agreement, in
substantially the same form as Exhibit I-1, attached hereto and made a part
hereof, which shall be executed and delivered by Seller to Purchaser at the
closing of the Registered Offering, and pursuant to which Seller shall grant
Purchaser an exclusive option to acquire the Seller Option Properties.
"Seller Option Properties" shall mean the real property described on
Exhibits A-13, A-14, A-18, A-19 and A-20 attached hereto and made a part hereof,
and any other property of Seller more particularly set forth in the Seller
Option Agreement.
"Seller's Operating and Service Agreements" shall mean all management,
service and operating agreements and contracts entered into by Seller with
respect to a Property, including, but not limited to, agreements and contracts
relating to maintenance and repair at a Property, refuse service agreements,
pest control service agreements, landscaping agreements, parking lot maintenance
agreements, and snow removal contracts.
"Survey" shall mean a current "as-built" ALTA survey, certified to ALTA
requirements, prepared by an engineer or surveyor licensed in the State in which
the Land is located reasonably acceptable to Purchaser, which shall: (a) include
a narrative legal description of the Land by metes and bounds (which shall
include a reference to the recorded plat, if any), and a computation of the area
comprising the Land in both acres and gross square feet (to the nearest
one-thousandth of said respective measurement); (b) accurately show the location
on the Land of all improvements (dimensions thereof at the ground surface level
and the distance therefrom to the facing exterior property lines of the Land),
building and set-back lines, parking spaces (including number of spaces),
fences, evidence of abandoned fences, ponds, creeks, streams, rivers, officially
designated 100-year flood plains and flood prone areas, canals, ditches,
easements, roads, rights-of-way and encroachments; (c) accurately show the
location of encroachments, if any, upon adjoining property, or from adjoining
property, upon the Land; (d) state the zoning classification of the Land; (e) be
<PAGE>
certified as of the date of the Survey to the Seller, the Purchaser, the Title
Company, and any third-party lender designated by Purchaser; (f) legibly
identify any and all recorded matters shown on said Survey by appropriate volume
and page recording references; (g) show the location and names of all adjoining
streets and the distance to the nearest streets intersecting the streets that
adjoin the Land; (h) be satisfactory to (and updated from time to time as may be
required by) the Title Company so as to permit it to delete the standard
exception for survey matters and replace it with an exception for the matters
shown on the Survey; and (i) include a written Surveyor's Certification in
substantially the same form as set forth on Exhibit M, attached hereto.
"Title Commitment" shall mean a current commitment or current
commitments issued by the Title Company to the Purchaser pursuant to the terms
of which the Title Company shall commit to issue the Title Policy to Purchaser
in accordance with the provisions of this Agreement, and reflecting all matters
which would be listed as exceptions to coverage on the Title Policy.
"Title Company" shall mean Stewart Title Guaranty Company or the
national service office of another title insurance company licensed in each
state in which a Property is located selected by Seller and reasonably
satisfactory to Purchaser.
"Title Policy" shall mean an ALTA Extended Coverage Owner's Policy (or
policies) of Title Insurance (10/17/92 Form), or comparable state promulgated
policies, with liability in the aggregate amount of the Purchase Price, dated as
of the Closing Date, issued by the Title Company, insuring title to the fee
interest (or ground lease interest, as applicable) in the Real Property in
Purchaser, subject only to the Permitted Exceptions and to the standard printed
exceptions included in the ALTA standard form owner's extended coverage policy
of title insurance, with the following modifications, if available upon
commercially reasonable terms and at commercially reasonable costs: (a) the
exception for survey matters shall be deleted and replaced by an exception for
the matters shown on the Survey; (b) the exception for ad valorem taxes shall
reflect only taxes for the current and subsequent years; (c) any exception as to
parties in possession shall be limited to rights of Seller in possession, as
lessee only, pursuant to the Lease; (d) there shall be no general exception for
visible and apparent easements or roads and highways or similar items (with any
exception for visible and apparent easements or roads and highways or similar
items to be specifically referenced to and shown on the Survey and also
identified by applicable recording information); and (e) the Title Policy shall
include such endorsements as Purchaser shall reasonably require.
"Total Properties" means the Properties and the Option Properties.
"Warranties" shall mean all warranties and guaranties with respect to
the Real Property or Personal Property, whether express or implied, which Seller
now holds or under which Seller is the beneficiary, to the extent the same are
assignable by Seller.
<PAGE>
ARTICLE II.
OPTION TO SELL AND PURCHASE AND AGREEMENT TO LEASE
2.1 Option to Sell and Purchase. Seller hereby grants Purchaser the
exclusive Option to purchase the Seller Option Properties for the Seller Option
Property Purchase Price (as defined herein) for each such Seller Option
Property. The Option with respect to a Seller Option Property shall be
exercisable by Purchaser, subject to the further provisions hereof, at any time
following the opening of the megaplex theatre on such Option Property and shall
expire at 5:00 p.m. on the ninetieth day following the opening of the megaplex
theatre on such Option Property, if not validly exercised by Purchaser prior to
such time. Upon Purchaser's valid exercise of the Option, this Agreement shall
be deemed a contract between Seller and Purchaser whereby, on the Closing Date,
Seller shall sell, convey, assign, transfer and deliver to Purchaser and
Purchaser shall purchase, acquire and accept from Seller, the Seller Option
Property, for the Purchase Price and subject to the terms and conditions of this
Agreement as the context requires.
2.2 Exercise of Option. Purchaser may exercise the Option only by
providing to Seller Purchaser's written, unqualified notice of its exercise of
the Option, in accordance with the provisions of Section 10.3 hereof. The
effective time and date of such exercise shall be the date such notice is deemed
received by Seller pursuant to the provisions of Section 10.3 hereof. In the
event the Option is not duly exercised by Purchaser within the time set forth in
Section 2.1 above with respect to a Seller Option Property, the Option and this
Agreement shall expire and the Parties shall have no further obligations
hereunder with respect to such Seller Option Property. Notwithstanding any other
terms or provisions hereof, the Option shall not be exercisable unless and until
Seller has completed its development and construction of the Improvements on the
Seller Option Property (other than minor punch list items, which shall be
diligently and promptly completed should Purchaser exercise the Option), the
Seller Option Property is open for business and Seller has received final
certificates of use and occupancy, and such other permits, licenses, approvals,
agreements and authorizations as are required for the operation of the Seller
Option Property for its intended use. Seller agrees to provide to Purchaser not
less than five business days' notice of the date that the megaplex theatre on
each such Option Property will open for business.
2.3 Seller Option Property Purchase Price. (A) The Purchase Price with
respect to the Seller Option Properties (the "Seller Option Property Purchase
Price") legally described on Exhibits A-14 and A-14 shall be calculated by
Seller and shall equal the cost to Seller of developing and constructing each
Seller Option Property and shall include actual land and construction costs of
such Seller Option Property and so-called soft or development costs allocated to
such Seller Option Property. The amount to be paid at the Closing of each such
Seller Option Property shall be an amount reasonably estimated to be the cost to
Seller of developing and constructing such Seller Option Property; provided,
however, on a date which is 60 days from the Closing Date for such Seller Option
Property, the Seller Option
<PAGE>
Property Purchase Price shall finally be calculated by Seller and an adjustment
made to the amount paid by the Purchaser on the Closing Date by payment by
Purchaser or refund to Purchaser by Seller, as applicable.
(B) The Seller Option Property Purchase Price with respect to the
Seller Option Properties legally described on Exhibits A-18, A-19 and A-20 shall
be the amount set forth on Exhibit K-1 attached hereto and made a part hereof by
this reference.
2.4 Limitations to Option. Notwithstanding anything to the contrary
contained herein, Purchaser's right to exercise its option to purchase any of
the land parcels (the "pads") described in Exhibits A-18, A-19 and A-20 is (a)
subject to and contingent upon such pads not having been sold or under contract
for sale by Seller at the time of the exercise of Purchaser's Option with
respect to such pad; (b) subject to the exercise of Purchaser's Option with
respect to all pads at such theatre property remaining unsold at the time of the
exercise of such Option; and (c) not exercisable unless Purchaser simultaneously
and irrevocably exercises its option to purchase the Grantor Option Property
related to such pads pursuant to the Grantor Option Agreement.
ARTICLE III.
PURCHASE PRICE
3.1 Payment of Purchase Price. The Purchase Price for a Property shall
be paid by Purchaser delivering to the Seller at the Closing for such Property
Federal Reserve wire transfer funds or other immediately available collected
funds payable to the order of the Seller in the sum equal to the Purchase Price
for such Property, subject to adjustment as herein provided. On or before the
Closing, the Parties shall agree on an allocation of the Purchase Price as
between the Real Property and the Personal Property for each Property.
ARTICLE IV.
ITEMS TO BE
FURNISHED TO PURCHASER BY SELLER
4.1 Due Diligence Materials. As a courtesy and without warranty or
representation, except as expressly set forth herein, Seller previously has
delivered or made available (at the offices of Seller or its legal counsel) to
Purchaser for its review and/or copying, the following items respecting the Land
and the Property:
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(a) True, correct, complete and legible copies of all Business Agreements,
Warranties, Permits, Applicable Notices, Engineering Documents and Seller's
Operating and Service Agreements (solely for the purposes of this Section 4.1
and Section 10.18 hereof, the terms Business Agreements, Warranties, Permits,
and Engineering Documents shall include all agreements, documents and
instruments otherwise included within such definitions, whether or not the same
are assignable by Seller);
(b) True, correct, complete and legible copies of tax statements or
assessments for all real estate and personal property taxes assessed against
each Property for the current and the two prior calendar years, if available;
(c) True, correct, complete and legible listing of all Fixtures, Personal
Property and Excluded Personal Property, including a current depreciation
schedule;
(d) True, correct, complete and legible copies of all existing fire and
extended coverage insurance policies and any other insurance policies pertaining
to each Property or certificates setting forth all coverages and deductibles
with respect thereto, if any;
(e) True, correct, complete and legible copies of all instruments
evidencing, governing or securing the payment of any loans secured by each
Property or related thereto;
(f) True, correct, complete and legible copies of any and all environmental
studies or impact reports relating to each Property, if any, and any approvals,
conditions, orders or declarations issued by any governmental authority relating
thereto (such studies and reports shall include, but not be limited to, reports
indicating whether the Property is or has been contaminated by Hazardous
Materials and whether the Property is in compliance with the Americans with
Disabilities Act and Section 504 of the Rehabilitation Act of 1973, as
applicable);
(g) True, correct, complete and legible copies of any and all litigation
files with respect to any pending litigation and claim files for any claims made
or threatened, the outcome of which might materially affect each Property or the
use and operation of each Property, together with summaries and such other more
detailed information as Purchaser may reasonably request with respect to any
other pending litigation or claim the outcome of which might materially affect
Seller or materially affect each Property.
(h) The Title Commitment, Exception Documents, Survey and Search Reports.
4.2 Due Diligence Review. Prior to the Closing Date (and in the event there
is more than one Closing Date, prior to the last Closing Date occurring pursuant
to the terms hereof) (the "Review Period"), Purchaser has been given the right
and opportunity to review
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the Due Diligence Materials delivered or made available by Seller to Purchaser
pursuant to the provisions of Section 4.1 above. By consummating the sale and
purchase provided herein at Closing, Purchaser shall be deemed to have accepted
and approved the Due Diligence Materials with respect to each Property purchased
at such Closing, and the Property, and to have waived to the extent Seller has
the responsibility for the same pursuant to the Lease, any such defect,
deficiency or encumbrance disclosed in the Due Diligence Materials with respect
to each Property purchased at such Closing, and to have accepted all exceptions
to title referenced in the Title Commitment, and all matters shown on the
Survey, with respect to each Property purchased at such Closing. Such accepted
title exceptions and survey matters shall be included in the term "Permitted
Exceptions" as used herein.
4.3 Investigations. During the Review Period, Purchaser and its agents
and designees have been given the right and opportunity to examine each Property
for the purpose of inspecting the same and making tests, inquiries and
examinations (collectively the "Investigations").
4.4 Restoration After Investigations. Purchaser agrees, at its sole
expense, to cause the Property to be restored to substantially the same
condition it was in prior to such entry. In addition, Purchaser agrees to
indemnify, defend and hold Seller, its successors and assigns and the current
owner of the Land harmless for, from and against and to reimburse Seller with
respect to all claims for bodily injury, personal injury or property damage, as
well as any professional services lien, which may be asserted by reason of the
activities of Purchaser or its agents or designees during the Investigations.
The foregoing indemnity shall survive the Closing and/or any termination of this
Agreement and shall not operate as, or be deemed to be, an indemnification
against any claim arising as a result of any condition or matter discovered as a
result of the Investigations.
ARTICLE V.
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
5.1 Representations and Warranties of Seller. To induce Purchaser to
enter into this Agreement and to purchase the Property, Seller represents and
warrants to Purchaser as follows:
(a) Seller has and at each Closing will have, and will convey,
transfer and assign to Purchaser, good, indefeasible and insurable right and
title to the Land and its interest, as lessee, in the Ground Leases, free and
clear of any deeds of trust, mortgages, liens, encumbrances, leases, tenancies,
licenses, chattel mortgages, conditional sales agreements, security interests,
covenants, conditions, restrictions, judgments, rights-of-way, easements,
encroachments, claims and any other matters affecting title or use of the
Property, except the Permitted Exceptions.
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(b) Seller has duly and validly authorized and executed this
Agreement, and has full right, title, power and authority to enter into this
Agreement and to consummate the transactions provided for herein, and the
joinder of no person or entity will be necessary to convey each Property fully
and completely to Purchaser at the Closing of such Property and to lease or
sublease such Property from Purchaser following such Closing. Sellers are
corporations duly organized, validly existing and in good standing under the
laws of the States of Missouri and Delaware, respectively, and are qualified to
do business in each state in which any of the Property owned or leased by such
Seller is located. The consummation of the transactions contemplated herein does
not require the approval of Seller's shareholders or any third party, except
such third party approvals as Seller has obtained or will obtain prior to each
Closing Date. The execution by Seller of this Agreement and the consummation by
Seller of the transactions contemplated hereby do not, and at the Closing will
not, result in a breach of any of the terms or provisions of, or constitute a
default or a condition which upon notice or lapse of time or both would ripen
into a default under, Seller's Bylaws or Certificate of Incorporation, any
indenture, agreement, instrument or obligation to which Seller is a party or by
which any Property or any portion thereof is bound; and does not constitute a
violation of any Laws, order, rule or regulation applicable to Seller or any
portion of a Property of any court or of any federal, state or municipal
regulatory body or administrative agency or other governmental body having
jurisdiction over Seller or any portion of a Property.
(c) There are no adverse parties in possession of a Property
or of any part thereof. Seller has not granted to any party any license, lease
or other right relating to the use or possession of a Property, except as set
forth in the Permitted Exceptions or provided to Purchaser in the Due Diligence
Materials.
(d) Except as provided to Purchaser in the Due Diligence
Materials, no written notice has been received from any insurance company that
has issued a policy with respect to any portion of a Property or from any board
of fire underwriters (or other body exercising similar functions), claiming any
defects or deficiencies or requiring the performance of any repairs,
replacements, alterations or other work and as of the Closing no such written
notice will have been received which shall not have been cured. No written
notice has been received by Seller from any issuing insurance company that any
of such policies will not be renewed, or will be renewed only at a higher
premium rate than is presently payable therefor.
(e) No pending condemnation, eminent domain, assessment or
similar proceeding or charge affecting any Property or any portion thereof
exists. Seller has not heretofore received any written notice, and has no actual
knowledge, that any such proceeding or charge is contemplated.
(f) All Improvements (including all utilities) have been, or
as of the Closing will be, substantially completed and installed in accordance
with the plans and specifications approved by the governmental authorities
having jurisdiction to the extent
<PAGE>
applicable and are transferable to Purchaser without additional cost. Permanent
certificates of occupancy, all licenses, Permits, authorizations and approvals
required by all governmental authorities having jurisdiction, and the requisite
certificates of the local board of fire underwriters (or other body exercising
similar functions) have been, or as of the Closing will be, issued for the
Improvements, and, as of the Closing, where required, all of the same will be in
full force and effect; provided, however, that temporary or partial certificates
of occupancy may be provided in the event that under laws or regulations
applicable to a particular Property, a permanent certificate of occupancy is not
available because of the status of construction or subleasing of a portion of
the Property. The Improvements, as designed and constructed, substantially
comply or will substantially comply with all statutes, restrictions, regulations
and ordinances applicable thereto, including but not limited to the Americans
with Disabilities Act and Section 504 of the Rehabilitation Act of 1973, as
applicable.
(g) The existing water, sewer, gas and electricity lines,
storm sewer and other utility systems on the Land are reasonably adequate to
serve the current and contemplated utility needs of each Property. All utilities
required for the operation of the Improvements enter the Land through adjoining
public streets or through adjoining private land in accordance with valid public
or private easements that will inure to the benefit of Purchaser. All approvals,
licenses and permits required for said utilities have been obtained and are in
full force and effect. All of said utilities are installed and operating and all
installation and connection charges have been paid in full.
(h) The location, construction, occupancy, operation and use
of each Property (including the Improvements) do not violate any applicable law,
statute, ordinance, rule, regulation, order or determination of any governmental
authority or any board of fire underwriters (or other body exercising similar
functions), or any restrictive covenant or deed restriction (recorded or
otherwise) affecting the Property or the location, construction, occupancy,
operation or use thereof, including, without limitation, all applicable zoning
ordinances and building codes, flood disaster laws and health and environmental
laws and regulations, the Americans with Disabilities Act and Section 504 of the
Rehabilitation Act of 1973, as applicable.
(i) There are not any structural defects in any of the
buildings or other Improvements constituting each Property. The Improvements,
all heating, electrical, plumbing and drainage at, or servicing, each Property
and all facilities and equipment relating thereto are and, as of the Closing,
will be in good condition and working order and adequate in quantity and quality
for the normal operation of the Property. No part of any Property has been
destroyed or damaged by fire or other casualty. To Seller's knowledge, there are
no unsatisfied written requests for repairs, restorations or alterations with
regard to the Property from any person, entity or authority, including but not
limited to any lender, insurance provider or governmental authority.
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(j) Except as may be set forth in any of the Due Diligence
Materials, no work has been performed or is in progress at any Property, and no
materials will have been delivered to the Property that might provide the basis
for a mechanic's, materialmen's or other lien against the Property or any
portion thereof, and all amounts due for such work and material shall have been
paid or discharged to Purchaser's satisfaction as of Closing.
(k) There exist no service contracts, management or other
agreements applicable to any Property, to which Seller is a party or otherwise
known to Seller, other than Seller's Operating and Service Agreements and those
agreements furnished to Purchaser pursuant to Section 4.1.
(l) Seller is not in default in any manner which would result
in a material adverse effect on Seller or the Property under any of the Ground
Leases, Business Agreements, or Seller's Operating and Service Agreements or any
of the covenants, conditions, restrictions, rights-of-way or easements affecting
the Property or any portion thereof, and, to Seller's knowledge no other party
to any of the foregoing is in material default thereunder.
(m) There are no actions, suits or proceedings pending or, to
Seller's knowledge, threatened against or affecting any Property or any portion
thereof, or relating to or arising out of the ownership or operation of the
Property, or by any federal, state, county or municipal department, commission,
board, bureau or agency or other governmental instrumentality, other than those
disclosed to Purchaser pursuant to Section 4.1. All judicial proceedings
concerning any Property will be finally dismissed and terminated prior to
Closing, excluding lawsuits in which Seller is involved in its ordinary course
of business. Seller hereby covenants and agrees to indemnify and hold Purchaser
harmless from and against any and all Claims (including reasonable attorneys'
fees) arising out of or relating to any lawsuits or other proceedings in which
Seller is involved which lawsuits involve or relate to the Property.
(n) Each Property has free and unimpeded access to presently
existing public highways and/or roads (either directly or by way of perpetual
easements); and, to Seller's knowledge, all approvals necessary therefor have
been obtained. No fact or condition exists which would result in the termination
of the current access from the Property to any presently existing public
highways and/or roads adjoining or situated on the Property.
(o) There are no attachments, executions, assignments for the
benefit of creditors, or voluntary or involuntary proceedings in bankruptcy or
under any other debtor relief laws contemplated by or, to Seller's knowledge,
pending or threatened against Seller or any Property.
(p) Except as may be set forth in any of the Due Diligence
Materials, no Hazardous Materials have been installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or disposed
of, or otherwise present in, on or under any
<PAGE>
Property by Seller or to Seller's knowledge by any third party. No activity has
been undertaken on any Property by Seller or, to Seller's knowledge, by any
third party which would cause (i) any Property to become a hazardous waste
treatment, storage or disposal facility within the meaning of, or otherwise
bring any Property within the ambit of RCRA or any Hazardous Materials Law, (ii)
a release or threatened release of Hazardous Materials from any Property within
the meaning of, or otherwise bring any Property within the ambit of, CERCLA or
SARA or any Hazardous Materials Law or (iii) the discharge of Hazardous
Materials into any watercourse, body of surface or subsurface water or wetland,
or the discharge into the atmosphere of any Hazardous Materials which would
require a permit under any Hazardous Materials Law. No activity has been
undertaken with respect to any Property by Seller or, to Seller's knowledge, any
third party which would cause a violation or support a claim under RCRA, CERCLA,
SARA or any other Hazardous Materials Law. No investigation, administrative
order, litigation or settlement with respect to any Hazardous Materials is in
existence with respect to any Property, nor, to Seller's knowledge, is any of
the foregoing threatened. No written notice has been received by Seller from any
entity, governmental body or individual claiming any violation of any Hazardous
Materials Law, or requiring compliance with any Hazardous Materials Law, or
demanding payment or contribution for environmental damage or injury to natural
resources. Seller has not obtained and, to Seller's knowledge, is not required
to obtain, and Seller has no knowledge of any reason Purchaser will be required
to obtain, any permits, licenses, or similar authorizations to occupy, operate
or use the Improvements or any part of any Property by reason of any Hazardous
Materials Law. Notwithstanding the representations made herein, such
representations are and shall be deemed to be limited by the matters detailed in
any Phase I Preliminary Site Assessment or other Due Diligence Materials
obtained by or provided to Purchaser in connection herewith.
(q) Each Property includes all items of property, tangible and
intangible, currently used by Seller in connection with the operation of the
Property, other than the Excluded Personal Property, Seller's Operating and
Service Agreements, and property expressly excluded from the definition of the
Property, and the exclusion of such items from the property to be conveyed to
Purchaser will not have any materials adverse affect upon Purchaser's ownership
of the Property following the Closing.
(r) Seller has not knowingly failed to disclose anything of a material
nature with respect to the Due Diligence Materials.
5.2 Seller Indemnification. Seller hereby agrees to indemnify and
defend, at its sole cost and expense, and hold Purchaser, its successors and
assigns, harmless from and against and to reimburse Purchaser with respect to
any and all claims, demands, actions, causes of action, losses, damages,
liabilities, costs and expenses (including, without limitation, reasonable
attorney's fees and court costs) actually incurred of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by Purchaser at any time and from time to time by reason of or arising out of
(a) the breach of any
<PAGE>
representation or warranty of Seller set forth in Section 5.1 or any breach by
Seller of any of its covenants and agreements set forth in this Agreement; (b)
the failure of Seller, in whole or in part, to perform any obligation required
to be performed by Seller pursuant to Section 5.1.; or (c) the ownership,
construction, occupancy, operation, use and maintenance by Seller or its agents
of the Property prior to the Closing Date. This indemnity applies, without
limitation, to the violation on or before the Closing Date of any Hazardous
Materials Law in effect on or before the Closing Date and any and all matters
arising out of any act, omission, event or circumstance existing or occurring on
or prior to the Closing Date (including, without limitation, the presence on the
Property or release from the Property of Hazardous Materials disposed of or
otherwise released prior to the Closing Date), regardless of whether the act,
omission, event or circumstance constituted a violation of any Hazardous
Materials Law at the time of its existence or occurrence. Subject to the
provisions of Section 5.5 hereof, the provisions of this Section shall survive
the Closing of the transaction contemplated by Section 2.1 of this Agreement and
shall continue thereafter in full force and effect for the benefit of Purchaser,
its successors and assigns. Notwithstanding any provision of this Agreement to
the contrary, Purchaser may exercise any right or remedy Purchaser may have at
law or in equity should Seller fail to meet, comply with or perform its
indemnity obligations required by this Section 5.2. In the event a defect, claim
or deficiency is discovered by Purchaser prior to Closing or is noticed in
writing by Seller to Purchaser prior to Closing, Purchaser shall either
terminate the Agreement as provided herein or waive the defect, claim or
deficiency and proceed to Closing.
5.3 Covenants and Agreements of Seller. Seller covenants and agrees with
Purchaser, from the Effective Date until the Closing with respect to a Property
or earlier termination of this Agreement:
(a) Seller shall: (i) operate the Property in the ordinary
course of Seller's business and in substantially the same manner as currently
operated; and (ii) fully maintain and repair the Improvements, the Fixtures, and
the Personal Property in good condition and repair.
(b) Seller shall cause to be maintained in full force and
effect fire and extended coverage insurance upon the Property and public
liability insurance with respect to damage or injury to persons or property
occurring on or relating to operation of the Property in commercially reasonable
amounts (which for purposes hereof shall be deemed to be the amounts and
coverages in effect on the date hereof).
(c) Seller shall pay when due all bills and expenses of the
Property. Seller shall not enter into or assume any new Business Agreements with
regard to the Property which are in addition to or different from those
furnished and disclosed to Purchaser and reviewed and approved pursuant to
Section 4.1, except in the ordinary course of business.
<PAGE>
(d) Seller shall not create or permit to be created any liens,
easements or other conditions affecting any portion of the Property or the uses
thereof, except in the ordinary course of business, without the prior written
consent of Purchaser. No such lien, easement or other condition affecting the
Property which Seller creates or permits to be created shall be or constitute a
Permitted Exception until (i) such lien, easement or other condition affecting
the Property has been disclosed to Purchaser in writing prior to Closing, (ii) a
true and correct copy of all documents or instruments creating, evidencing,
affecting or relating to such lien, easement or other condition affecting the
Property has been provided to Purchaser prior to Closing, and (iii) Purchaser
has determined to proceed with Closing and accept such lien, easement or other
condition affecting the Property as a Permitted Exception, which determination
shall be conclusively presumed by Purchaser's election to proceed with Closing
following Seller's compliance with the requirements of (i) and (ii) of this
paragraph.
(e) Seller will pay, as and when due, all interest and
principal and all other charges payable under any indebtedness of Seller secured
by the Property from the date hereof until Closing, and will not suffer or
permit any default or, except in the ordinary course of business, amend or
modify the documents evidencing or securing any such indebtedness without the
prior consent of Purchaser.
(f) Seller will give to Purchaser, its attorneys, accountants
and other representatives, during normal business hours and as often as may be
reasonably requested, access to all books, records and files relating to the
Property so long as the same does not unreasonably interfere with Seller's
business operations.
(g) Seller shall not remove any Personal Property or Fixtures
from the Land or Improvements without replacing same with substantially similar
items of equal or greater value and repairing the damage, if any, to the
Property as a result of such removal, except in the ordinary course of business.
(h) During the pendency of this Agreement, Seller, its
corporate officers, directors, and agents shall not negotiate the sale or other
disposition of the Property with any person or entity other than Purchaser, and
shall not take any steps to initiate, consummate or document the sale or other
disposition of the Property, or any portion thereof, to any person or entity
other than Purchaser.
(i) Prior to the Closing Date, Seller agrees to notify
Purchaser in writing within three (3) Business Days of any offer received by,
delivered to or communicated to Seller for the purchase, sale, acquisition or
other disposition of the Property.
(j) Seller shall provide representations, warranties and
consents as may be reasonably required in connection with any public offering of
stock (the "Registered Offering") or debt obligations by Purchaser, including,
and similar in kind but not limited to, inclusion of financial statements,
summary financial information and other required
<PAGE>
information concerning Seller, or Seller as lessee under the Lease, in any
Securities and Exchange Commission filings. Seller shall cooperate in the
preparation by Purchaser of a Form S-11 under the Securities Act of 1933, as
amended, to be filed with the Securities and Exchange Commission in connection
with the Registered Offering.
(k) Seller is sophisticated and experienced in the sale and
lease back of real property and that in proceeding with the sale and lease back
of the Properties, Seller will be relying on its investigations and examinations
of each Property and not on any representation or warranty of Purchaser not
expressly set forth in this Agreement.
5.4 Representations and Warranties of Purchaser. To induce Seller to
enter into this Agreement and to sell the Property, Purchaser represents and
warrants to Seller as follows:
(a) Purchaser has duly and validly authorized and executed
this Agreement, and has full right, title, power and authority to enter into
this Agreement and to consummate the transactions provided for herein, and the
joinder of no person or entity will be necessary to purchase the Property from
Seller at Closing, and to lease or sublease the Property to Seller following
Closing. Purchaser is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the State of Maryland and is
qualified to do business in each state in which any of the Property is located.
The consummation of the transactions contemplated herein or in the Lease does
not require the approval of Purchaser's shareholders or any third party, except
such third party approvals as Purchaser has obtained or will obtain prior to the
Closing Date.
(b) The execution by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby do not, and at
the Closing will not, result in a breach of any of the terms or provisions of,
or constitute a default or a condition which upon notice or lapse of time or
both would ripen into a default under, any indenture, agreement, instrument or
obligation to which Purchaser is a party; and does not, and at the Closing will
not, constitute a violation of any Laws, order, rule or regulation applicable to
Purchaser of any court or of any federal, state or municipal regulatory body or
administrative agency or other governmental body having jurisdiction over
Purchaser.
(c) There are no actions, suits or proceedings pending, or to
the actual knowledge of Purchaser, threatened, before or by any judicial body or
any governmental authority, against Purchaser which would affect in any material
respect Purchaser's ability to proceed with the transaction contemplated by this
Agreement and the Lease.
(d) Purchaser is sophisticated and experienced in the purchase
of real property and that in proceeding with the acquisition of the Properties,
Purchaser will be relying on its Investigations and examinations of each
Property and not on any representation or warranty of Seller not expressly set
forth in this Agreement.
<PAGE>
5.5 Survival. Each of the representations, warranties and covenants
contained in this Article V is intended for the benefit of Seller or Purchaser,
as the case may be, and any underwriter of the Registered Offering. Each of said
representations, warranties and covenants shall survive the Closing for a period
of one (1) year, at which time they shall expire unless prior to such time the
party receiving such representations, warranties and covenants has filed a legal
action alleging a breach of one or more of the representations, warranties or
covenants. No investigation, audit, inspection, review or the like conducted by
or on behalf of the party receiving such representations, warranties or
covenants shall be deemed to terminate the effect of any such representations,
warranties and covenants, it being understood that such party has the right to
rely thereon and that each such representation, warranty and covenant
constitutes a material inducement to execute this Agreement and to close the
transaction contemplated hereby.
ARTICLE VI.
CONDITIONS TO OBLIGATIONS
6.1 Conditions to the Purchaser's Obligations. The obligations of
Purchaser to purchase a Property from Seller and to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at all times
prior to and as of the Closing with respect to such Property (or such other time
period specified below), of each of the following conditions:
(a) All of the representations and warranties of Seller set
forth in this Agreement shall be true at all times prior to, at and as of, the
Closing in all material respects and Seller shall deliver a Closing Certificate
in substantially the same form attached hereto as Exhibit E updating such
representations and warranties.
(b) Seller shall have delivered, performed, observed and
complied with, all of the items, instruments, documents, covenants, agreements
and conditions required by this Agreement to be delivered, performed, observed
and complied with by it prior to, or as of, the Closing.
(c) Seller shall not be in receivership or dissolution or have
made any assignment for the benefit of creditors, or admitted in writing its
inability to pay its debts as they mature, or have been adjudicated a bankrupt,
or have filed a petition in voluntary bankruptcy, a petition or answer seeking
reorganization or an arrangement with creditors under the federal bankruptcy law
or any other similar law or statute of the United States or any state and no
such petition shall have been filed against it.
<PAGE>
(d) No material or substantial adverse change shall have
occurred with respect to the condition, financial or otherwise, of the Seller or
the Property.
(e) Neither the Property nor any part thereof or interest
therein shall have been taken by execution or other process of law in any action
prior to Closing, nor shall any action or proceeding seeking any such taking be
pending.
(f) During the Review Period, Purchaser shall have
satisfactorily completed its Investigations of the Property with respect to the
physical condition thereof by agents or contractors selected by Purchaser.
(g) During the Review Period, Purchaser shall have received,
in form acceptable to Purchaser, evidence of compliance by the Property with all
building codes, zoning ordinances and other governmental entitlements as
necessary for the operation of the Property for the current and intended use,
including, without limitation, certificates of occupancy (or evidence of the
existence thereof) and such other permits, licenses, approvals, agreements and
authorizations as are required for the operation of the Property for the current
and intended use.
(h) During the Review Period, all necessary approvals,
consents and the like of third parties to the validity and effectiveness of the
transactions contemplated hereby have been obtained.
(i) During the Review Period, Purchaser has reviewed and satisfied itself
with respect to the Due Diligence Materials.
(j) No material portion of the Property shall have been destroyed by fire
or casualty.
(k) No condemnation, eminent domain or similar proceedings
shall have been commenced or threatened in writing with respect to any material
portion of the Property.
(l) Purchaser shall have been successful in causing the
formation of a real estate investment trust whose interests have been sold to
the public pursuant to the Registered Offering and in connection therewith shall
have raised capital in an amount not less than $250,000,000.00.
(m) Purchaser shall have entered into option agreements,
acceptable in form and substance to Purchaser, for the purchase of the Grantor
Option Properties, such agreements to provide for the closing of the purchase of
the Grantor Option Property as set forth therein.
<PAGE>
With respect to the conditions precedent set forth in paragraphs (a), (b), (d),
(e), (f), (g), (h), (i), (j), (k) and (m) of this Section 6.1, Purchaser shall
have the right to determine whether each of said conditions has been satisfied
separately with respect to each individual Property or Grantor Option Property,
and if Purchaser shall determine that any of said conditions have not been
satisfied with respect to any one or more individual Property or Grantor Option
Property, Purchaser shall have the right, notwithstanding the provisions of
Section 6.2 hereof (subject, however, to the provisions of Section 6.3(e)
hereof), to terminate this Agreement with respect to any one or more individual
Property as to which any of such conditions has not been satisfied, and to
proceed with the Closing with respect to the remaining Property.
6.2 Failure of Conditions to Purchaser's Obligations. In the event any
one or more of the conditions to Purchaser's obligations are not satisfied or
waived in whole or in part at any time prior to or as of the Closing of a
Property, Purchaser, at Purchaser's option, shall be entitled to: (a) terminate
this Agreement by giving written notice thereof to Seller, whereupon all moneys,
if any, which have been delivered by Purchaser to Seller or the Title Company
shall be immediately refunded to Purchaser and Purchaser shall have no further
obligations or liabilities hereunder; or (b) proceed to Closing hereunder.
6.3 Conditions to the Seller's Obligations. The obligations of Seller to
sell a Property to Purchaser and to consummate the transactions contemplated by
this Agreement are subject to the satisfaction, at all times prior to and as of
the Closing with respect to such Property (or such other time period specified
below), of each of the following conditions:
(a) All of the representations and warranties of Purchaser set
forth in this Agreement shall be true at all times prior to, at and as of, the
Closing in all material respects and Purchaser shall deliver a Closing
Certificate in substantially the same form attached hereto as Exhibit E updating
such representations and warranties.
(b) Purchaser shall have delivered, performed, observed and
complied with, all of the items, instruments, documents, covenants, agreements
and conditions required by this Agreement to be delivered, performed, observed
and complied with by it prior to, or as of, the Closing.
(c) Purchaser shall not be in receivership or dissolution or
have made any assignment for the benefit of creditors, or admitted in writing
its inability to pay its debts as they mature, or have been adjudicated a
bankrupt, or have filed a petition in voluntary bankruptcy, a petition or answer
seeking reorganization or an arrangement with creditors under the federal
bankruptcy law or any other similar law or statute of the United States or any
state and no such petition shall have been filed against it.
(d) Purchaser shall have been successful in causing the
formation of a real estate investment trust whose interests have been sold to
the public pursuant to the Registered
<PAGE>
Offering and in connection therewith shall have raised capital in an amount not
less than $250,000,000.00.
(e) Purchaser has not elected to terminate this Agreement with
respect to any Properties with an aggregate Purchase Price in excess of
$35,000,000.00.
(f) Purchaser has entered into a Lease with respect to each
Property being purchased by Purchaser effective upon and following the Closing
of such Property.
6.4 Failure of Conditions to Seller's Obligations. In the event any one
or more of the conditions to Seller's obligations are not satisfied or waived in
whole or in part at any time prior to or as of the Closing, Seller, at Seller's
option, shall be entitled to: (a) terminate this Agreement by giving written
notice thereof to Purchaser, whereupon all moneys, if any, which have been
delivered by Seller to Purchaser or the Title Company shall be immediately
refunded to Seller and Seller shall have no further obligations or liabilities
hereunder; or (b) proceed to Closing hereunder.
ARTICLE VII.
PROVISIONS WITH RESPECT TO THE CLOSING
7.1 Seller's Closing Obligations. At the Closing with respect to a
Property, Seller shall furnish and deliver to the Purchaser, at Seller's
expense, the following:
(a) The Deed, Title Policy (or the Title Commitment or pro
forma policy marked up and initialed by the Title Company), Assignment, Bill of
Sale, Certificate of Non- Foreign Status, Closing Certificate, Right to Purchase
Agreement, Lease, and Seller Option Agreement, each duly executed and
acknowledged by Seller and, as appropriate, in recordable form acceptable in the
state and county in which each Property is located.
(b) Certificates of casualty and fire insurance for the
Property and satisfactory evidence of all other insurance coverages as required
pursuant to the Lease showing Purchaser as additional insured and loss payee
thereunder, as required by the Lease, with appropriate provisions for prior
notice to Purchaser in the event of cancellation or termination of such policies
and otherwise in form and substance as required by the Lease.
(c) Search Reports, dated not more than fifteen (15) days
prior to Closing, evidencing no UCC-1 Financing Statements or other filings in
the name of Seller with respect to the Property which will remain on the
Property after the Closing or an indemnification in form reasonably acceptable
to Seller and Purchaser with respect to any such UCC-1 Financing Statements or
other filings.
<PAGE>
(d) Such affidavits or letters of indemnity from Seller as the
Title Company shall reasonably require in order to omit from the Title Policy
all exceptions for unfiled mechanic's, materialman's or similar liens and rights
of parties in possession (other than Seller under the Lease and other tenants
under leases disclosed in the Due Diligence Materials).
(e) Any and all transfer declarations or disclosure documents,
duly executed by the appropriate parties, required in connection with the Deed
by any state, county or municipal agency having jurisdiction over the Property
or the transactions contemplated hereby.
(f) An opinion of Seller's counsel, dated as of the Closing Date, in the
form of Exhibit N-1, attached hereto.
(g) Such instruments or documents as are necessary, or
reasonably required by Purchaser or the Title Company, to evidence the status
and capacity of Seller and the authority of the person or persons who are
executing the various documents on behalf of Seller in connection with the
purchase and sale transaction contemplated hereby.
(h) Such other documents as are reasonably required by Purchaser to carry
out the terms and provisions of this Agreement.
(i) All necessary approvals, consents, certificates and the
like of third parties to the validity and effectiveness of the transactions
contemplated hereby.
7.2 Purchaser's Closing Obligations. At the Closing with respect to a
Property, Purchaser shall furnish and deliver to Seller, at Purchaser's expense,
the following:
(a) Federal Reserve, wire transfer funds or other immediately
available collected funds payable to the order of Seller representing the cash
portion of the Purchase Price due in accordance with Section 3.1 herein.
(b) The Closing Certificate, Right to Purchase Agreement, Lease, Assignment
and Seller Option Agreement duly executed and acknowledged by Purchaser.
(c) Such instruments or documents as are necessary, or
reasonably required by Seller or the Title Company, to evidence the status and
capacity of Purchaser and the authority of the person or persons who are
executing the various documents on behalf of Purchaser in connection with the
purchase and sale transaction contemplated hereby.
(d) An opinion of Purchaser's counsel, dated as of the Closing Date, in the
form of Exhibit N-2, attached hereto.
<PAGE>
(e) Such other documents as are reasonably required by Seller to carry out
the terms and provisions of this Agreement.
(f) All necessary approvals, consents, certificates and the
like of third parties to the validity and effectiveness of the transaction
contemplated hereby.
7.3 Purchaser's Closing Obligations Respecting Grantor Option Property.
Upon each closing of the purchase of any Grantor Option Property, Purchaser
hereby agrees that it will, at such closing, furnish and deliver to Seller, at
Purchaser's expense, the Lease, duly executed and acknowledged by Purchaser, as
appropriate, with respect to such Grantor Option Property.
ARTICLE VIII.
EXPENSES OF CLOSING
8.1 Adjustments. There shall be no adjustment of taxes, assessments,
water or sewer charges, gas, electric, telephone or other utilities, operating
expenses, employment charges, premiums on insurance policies, rents or other
normally proratable items, it being agreed and understood by the Parties that
the Seller shall be obligated to pay such items after Closing under the terms of
the Lease.
8.2 Closing Costs. Seller shall pay (a) all title examination fees and
premiums for the Title Policy; (b) the cost of the Search Reports; (c) the cost
of the Survey; (d) Seller's legal, accounting and other professional fees and
expenses and the cost of all opinions, certificates, instruments, documents and
papers required to be delivered, or to cause to be delivered, by Seller
hereunder, including without limitation, the cost of performance by Seller of
its obligations hereunder; (e) all other costs and expenses which are required
to be paid by Seller pursuant to other provisions of this Agreement; (f) any and
all state, municipal or other documentary or transfer taxes payable in
connection with the delivery of any instrument or document provided in or
contemplated by this Agreement or any agreement or commitment described or
referred to herein; and (g) the charges for or in connection with the recording
and/or filing of any instrument or document provided herein or contemplated by
this Agreement or any agreement or document described or referred to herein.
Purchaser shall pay (x) Purchaser's legal, accounting and other professional
fees and expenses and the cost of all opinions, certificates, instruments,
documents and papers required to be delivered, or to cause to be delivered, by
Purchaser hereunder, including, without limitation, the cost of performance by
Purchaser of its obligations hereunder; (y) all costs and expenses, if any, in
any way relating to any financing which Purchaser obtains in connection with its
purchase of the Property; and (z) all other costs and expenses which are
required to be paid by Purchaser pursuant to other provisions of this Agreement.
Purchaser and Seller shall each be
<PAGE>
responsible for other costs in the usual and customary manner for this kind of
transaction in the county where the Property is located.
8.3 Commissions/Broker's Fees. Seller hereby represents and warrants to
Purchaser that it has not contacted any real estate broker, finder or any other
party in connection with this transaction, and that it has not taken any action
which would result in any real estate broker's, finder's or other fees being due
or payable to any party with respect to the transaction contemplated hereby.
Purchaser hereby represents and warrants to Seller that Purchaser has not
contacted any real estate broker, finder or any other party in connection with
this transaction, and that it has not taken any action which would result in any
real estate broker's, finder's or other fees being due or payable to any party
with respect to the transaction contemplated hereby. Each Party hereby
indemnifies and agrees to hold the other Party harmless from any loss,
liability, damage, cost or expenses (including reasonable attorneys' fees)
resulting to such other Party by reason of a breach of the representation and
warranty made by such Party herein.
ARTICLE IX.
DEFAULT AND REMEDIES
9.1 Seller's Default; Purchaser's Remedies.
(a) Seller's Default. Seller shall be deemed to be in default
hereunder upon the occurrence of one of the following events: (i) any of
Seller's warranties or representations set forth herein shall be untrue in any
material respect when made or at Closing; or (ii) Seller shall fail to meet,
comply with, or perform any covenant, agreement or obligation on its part
required within the time limits and in the manner required in this Agreement,
which, in either of such events, is not cured by Seller within 10 days following
receipt by Seller of written notice of default from Purchaser.
(b) Purchaser's Remedies. In the event Seller shall be deemed
to be in default hereunder Purchaser may, at Purchaser's sole option, do any one
or more of the following: (i) terminate this Agreement by written notice
delivered to Seller on or before the Closing; and/or (ii) enforce specific
performance of this Agreement against Seller including Purchaser's reasonable
costs and attorneys' fees and court costs in connection therewith; and/or (iii)
exercise any other right or remedy Purchaser may have at law or in equity by
reason of such default including, but not limited to, the recovery of reasonable
attorneys' fees and court costs incurred by Purchaser in connection herewith.
9.2 Purchaser's Default; Seller's Remedies.
<PAGE>
(a) Purchaser's Default. Purchaser shall be deemed to be in
default hereunder upon the occurrence of one of the following events: (i) any of
Purchaser's warranties or representations set forth herein shall be untrue in
any material respect when made or at Closing; or (ii) Purchaser shall fail to
meet, comply with, or perform any covenant, agreement or obligation on its part
required within the time limits and in the manner required in this Agreement,
which, in either of such events, is not cured by Purchaser within 10 days
following receipt by Purchaser of written notice of default from Seller.
(b) Seller's Remedies. In the event Purchaser shall be deemed
to be in default hereunder Seller may, at Seller's sole option, do any one or
more of the following: (i) terminate this Agreement by written notice delivered
to Purchaser on or before the Closing; and/or (ii) enforce specific performance
of this Agreement against Purchaser including Seller's reasonable costs and
attorneys' fees and court costs in connection therewith; and/or (iii) exercise
any other right or remedy Seller may have at law or in equity by reason of such
default including, but not limited to, the recovery of reasonable attorneys'
fees and court costs incurred by Seller in connection herewith.
ARTICLE X.
MISCELLANEOUS
10.1 Survival. Except as otherwise specifically provided herein
(including Section 5.5), all of the representations, warranties, covenants,
agreements and indemnities of Seller and Purchaser contained in this Agreement,
to the extent not performed at the Closing, shall not survive the Closing but
shall be deemed to merge upon the acceptance of the Deed and Assignment by
Purchaser.
10.2 Right of Assignment. Neither this Agreement nor any interest herein
may be assigned or transferred by either Party to any person, firm, corporation
or other entity without the prior written consent of the other Party, which
consent may be given or withheld in the sole discretion of such other Party.
10.3 Notices. All notices, requests and other communications under this
Agreement shall be in writing and shall be either (a) delivered in person, (b)
sent by certified mail, return-receipt requested, (c) delivered by a recognized
delivery service or (d) sent by facsimile transmission and addressed as follows:
If intended for Purchaser: Entertainment Properties Trust
One Kansas City Place
1200 Main Street, Suite 3250
Kansas City, Missouri 64105
Phone: (816) 480-4649
<PAGE>
Fax: (816) 480-4617
Attention: Robert L. Harris, President
With a copy to: Stinson, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
Kansas City, Missouri 64105
Phone: (816) 691-3180
Fax: (816) 691-3495
Attention: Michael G. O'Flaherty
If intended for Seller: AMC Entertainment Inc.
106 West 14th Street
Kansas City, Missouri 64105
Phone: (816) 221-4000
Fax: (816) 480-4617
Attention: Peter C. Brown, President
With a copy to: Lathrop & Gage L.C.
2345 Grand Boulevard, Suite 2800
Kansas City, Missouri 64108
Phone: (816) 460-5515
Fax: (816) 292-2001
Attention: E.T. Bullard
or at such other address, and to the attention of such other person, as the
parties shall give notice as herein provided. A notice, request and other
communication shall be deemed to be duly received if delivered in person or by a
recognized delivery service, when delivered to the address of the recipient, if
sent by mail, on the date of receipt by the recipient as shown on the return
receipt card, or if sent by facsimile, upon receipt by the sender of an
acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient's facsimile number; provided that if a notice, request or other
communication is served by hand or is received by facsimile on a day which is
not a Business Day, or after 5:00 P.M. on any Business Day at the addressee's
location, such notice or communication shall be deemed to be duly received by
the recipient at 9:00 A.M. on the first Business Day thereafter.
10.4 Entire Agreement; Modifications. This Agreement, together with the
other documents, instruments and agreements heretofore or hereinafter entered
into in connection with the transactions contemplated herein, embody and
constitute the entire understanding between the Parties with respect to the
transactions contemplated herein, and all prior or contemporaneous agreements,
understandings, representations and statements (oral or written) are merged into
this Agreement. Neither this Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an instrument in
<PAGE>
writing signed by the Party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only to
the extent set forth in such instrument.
10.5 Applicable Law. THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF MISSOURI. The Parties agree that jurisdiction and venue for any
litigation arising out of this Agreement shall be in the Courts of Jackson
County, Missouri or the U.S. District Court for the Western District of Missouri
and, accordingly, consent thereto.
10.6 Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe, or limit the scope
or intent of this Agreement or any of the provisions hereof.
10.7 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective successors and
assigns.
10.8 Time is of the Essence. With respect to all provisions of this
Agreement, time is of the essence. However, if the first date of any period
which is set out in any provision of this Agreement falls on a day which is not
a Business Day, then, in such event, the time of such period shall be extended
to the next day which is a Business Day.
10.9 Waiver of Conditions. Any Party may at any time or times, at its
election, waive any of the conditions to its obligations hereunder, but any such
waiver shall be effective only if contained in a writing signed by such Party.
No waiver by a Party of any breach of this Agreement or of any warranty or
representation hereunder by the other Party shall be deemed to be a waiver of
any other breach by such other Party (whether preceding or succeeding and
whether or not of the same or similar nature), and no acceptance of payment or
performance by a Party after any breach by the other Party shall be deemed to be
a waiver of any breach of this Agreement or of any representation or warranty
hereunder by such other Party, whether or not the first Party knows of such
breach at the time it accepts such payment or performance. No failure or delay
by a Party to exercise any right it may have by reason of the default of the
other Party shall operate as a waiver of default or modification of this
Agreement or shall prevent the exercise of any right by the first Party while
the other Party continues to be so in default.
10.10 Confidentiality. Except as hereinafter provided, from and after the
execution of this Agreement, Seller and Purchaser shall keep the Due Diligence
Materials and the contents thereof confidential and shall not disclose the
contents thereof except to their respective attorneys, accountants, engineers,
surveyors, financiers, bankers and other parties necessary for the consummation
of the contemplated transactions. Notwithstanding the foregoing, it is
acknowledged that Purchaser is in the process of consummating the Registered
<PAGE>
Offering and, as a result thereof, is and will be subject to various securities
laws relating to, among other things, disclosure of material facts. Accordingly,
this document may be filed with the SEC and its contents and information
relating to the Properties and the Option Properties will be disclosed to
Purchaser's underwriters, the Securities and Exchange Commission and/or similar
state authorities and to the public. If Purchaser does not consummate the
Registered Offering or acquire any Property, it shall deliver to Seller all
copies of proprietary information delivered to Purchaser by Seller.
10.11 Attorneys' Fees. If either Party obtains a judgment against the
other Party by reason of a breach of this Agreement, a reasonable attorneys' fee
as fixed by the court shall be included in such judgment.
10.12 Remedies Cumulative. Except as herein expressly set forth, no
remedy conferred upon a Party by this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given herein or now or
hereafter existing at law, in equity or by statute.
10.13 Terminology. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The words "herein",
"hereof", "hereunder" and similar terms shall refer to this Agreement unless the
context requires otherwise. Whenever the context so requires, the neuter gender
includes the masculine and/or feminine gender, and the singular number includes
the plural and vice versa.
10.14 Estoppel. Each Party confirms and agrees that (a) it has read and
understood all of the provisions of this Agreement; (b) it is an experienced
real estate investor and is familiar with major sophisticated transactions such
as that contemplated by this Agreement; (c) it has negotiated with the other
Party at arm's length with equal bargaining power; and (d) it has been advised
by competent legal counsel of its own choosing.
10.15 Joint Preparation. This Agreement (and all exhibits thereto) is
deemed to have been jointly prepared by the Parties hereto, and any uncertainty
or ambiguity existing herein, if any, shall not be interpreted against any
Party, but shall be interpreted according to the application of the rules of
interpretation for arm's-length agreements.
10.16 Counterparts. This Agreement may be executed at different times and
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be as effective as delivery of a manually executed
counterpart of this Agreement. In proving this Agreement, it shall not be
necessary to produce or account for more than one such counterpart signed by the
Party against whom enforcement is sought.
<PAGE>
10.17 Joint and Several Liability. The obligations of the parties-Seller
under this Agreement, and under all of the documents and instruments entered
into in accordance with the provisions of this Agreement, are joint and several.
10.18 Non-Assignable Agreement. Seller hereby covenants and agrees to use
its best reasonable efforts to obtain all necessary consents to the assignment
of any of the Business Agreements, Warranties, Permits and Engineering Documents
(for the purposes of this Section 10.18, the terms Business Agreements,
Warranties, Permits and Engineering Documents shall include all agreements,
documents and instruments included within such definitions, whether or not the
same are assignable by Seller) as Purchaser and Seller shall mutually agree
upon. If and to the extent that any of the Business Agreements, Warranties,
Permits and Engineering Documents are not assignable without the consent or
approval of a third party, and either (a) Purchaser does not request that Seller
obtain such approval, or (b) Seller is unable to obtain such approval following
Purchaser's request that Seller obtain such consent or approval, then, in either
of such cases, and subject to the Purchaser's rights as hereinafter provided,
Seller hereby agrees and acknowledges that it will, from and after Closing, own
and hold such Business Agreements, Warranties, Permits and Engineering Documents
as agent on behalf of and for the benefit of Purchaser, and Seller will from
time to time execute such documents as Purchaser shall reasonably require to
evidence that Seller own and hold such Business Agreements, Warranties, Permits
and Engineering Documents as agent on behalf of and for the benefit of
Purchaser. If Purchaser requests that Seller obtain any required third party
consents for the assignment by Seller to Purchaser of any of the Business
Agreements, Warranties, Permits and Engineering Documents, and Seller is unable
to obtain such consent or approval, then Purchaser shall have the rights to
determine that the Due Diligence Materials with respect to the Property or Due
Diligence Property in question are not acceptable to Purchaser, and to exercise
Purchaser's rights under Section 6.1 hereof. The provisions of this Section
10.18 shall not terminate or expire as otherwise provided in this Agreement, but
the covenants and agreements in this Section 10.18 shall survive and continue in
full force and effect at all times after Closing.
10.19 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS AGREEMENT OR THE OTHER
AGREEMENTS.
EXECUTED to be effective as of the Effective Date.
SELLER:
(SEAL) AMERICAN MULTI-CINEMA, INC.,
ATTEST a Missouri corporation
<PAGE>
By:/s/ Nancy L. Gallagher By:/s/ Peter C. Brown
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: Executive Vice President and
Chief Financial Officer
Seller's Tax Identification Number:
43-0908577
(SEAL) AMC REALTY, INC., a Delaware
ATTEST corporation
By:/s/ Nancy L. Gallagher By:/s/ Peter C. Brown
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: Executive Vice President and
Chief Financial Officer
Seller's Tax Identification Number:
43-1360799
PURCHASER:
(SEAL) ENTERTAINMENT PROPERTIES TRUST,
a Maryland Real Estate Investment Trust
By: /s/ David M. Brain
Name: David M. Brain
Title: Chief Financial Officer and
Secretary
Purchaser's Tax Identification Number:
43-179877
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS.................................................................1
ARTICLE II. OPTION TO SELL AND PURCHASE AND AGREEMENT TO LEASE.............10
2.1 Option to Sell and Purchase...........................................10
2.2 Exercise of Option....................................................10
2.3 Seller Option Property Purchase Price..............................10
2.4 Limitations to Option.................................................11
ARTICLE III. PURCHASE PRICE................................................11
3.1 Payment of Purchase Price.............................................11
ARTICLE IV. ITEMS TO BE FURNISHED TO PURCHASER BY SELLER...................11
4.1 Due Diligence Materials.........................................11
4.2 Due Diligence Review............................................13
4.3 Investigations..................................................13
4.4 Restoration After Investigations................................13
ARTICLE V. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS...........13
5.1 Representations and Warranties of Seller........................13
5.2 Seller Indemnification..........................................17
5.3 Covenants and Agreements of Seller..............................18
5.4 Representations and Warranties of Purchaser.....................20
5.5 Survival........................................................21
<PAGE>
ARTICLE VI. CONDITIONS TO OBLIGATIONS....................................21
6.1 Conditions to the Purchaser's Obligations....................21
6.2 Failure of Conditions to Purchaser's Obligations.............23
6.3 Conditions to the Seller's Obligations.......................23
6.4 Failure of Conditions to Seller's Obligations................24
ARTICLE VII. PROVISIONS WITH RESPECT TO THE CLOSING......................24
7.1 Seller's Closing Obligations.................................24
7.2 Purchaser's Closing Obligations..............................25
7.3 Purchaser's Closing Obligations Respecting ..................26
Grantor Option Property
ARTICLE VIII. EXPENSES OF CLOSING......................................26
8.1 Adjustments................................................26
8.2 Closing Costs..............................................26
8.3 Commissions/Broker's Fees..................................27
ARTICLE IX. DEFAULT AND REMEDIES......................................27
9.1 Seller's Default; Purchaser's Remedies....................27
a. Seller's Default..................................27
b. Purchaser's Remedies..............................27
9.2 Purchaser's Default; Seller's Remedies.....................28
a. Purchaser's Default...............................28
b. Seller's Remedies.................................28
ARTICLE X. MISCELLANEOUS..............................................28
10.1 Survival..................................................28
10.2 Right of Assignment.......................................28
10.3 Notices...................................................28
10.4 Entire Agreement; Modifications...........................29
10.5 Applicable Law............................................30
10.6 Captions..................................................30
<PAGE>
10.7 Binding Effect.........................................30
10.8 Time is of the Essence.................................30
10.9 Waiver of Conditions...................................30
10.10 Confidentiality........................................30
10.11 Attorneys' Fees........................................31
10.12 Remedies Cumulative....................................31
10.13 Terminology............................................31
10.14 Estoppel...............................................31
10.15 Joint Preparation......................................31
10.16 Counterparts...........................................31
10.17 Joint and Several Liability............................32
10.18 Non-Assignable Agreement...............................32
10.19 Waiver of Jury Trial...................................32
SCHEDULE OF EXHIBITS
A - Property Descriptions (A-1 through A-20)
B - Assignment of Ground Lease
C - Bill of Sale
D - Certificate of Non-Foreign Status
E - Closing Certificate
F - Deed (F-1 through F-3)
G - Excluded Personal Property
H-1 - Lease
H-2 - Guaranty of Lease
I-1 - Seller Option Agreement
I-2 Grantor Option Agreement
J - Personal Property
K - Purchase Price
L - Right to Purchase Agreement
M - Form of Surveyor's Certification
<PAGE>
N - Opinions of Seller's and Purchaser's Counsel (N-1 and N-2)
<PAGE>
EXHIBITS
TO
OPTION AGREEMENT
AMONG
AMERICAN MULTI-CINEMA, INC.,
a Missouri corporation,
and
AMC REALTY, INC.,
a Delaware corporation
("SELLER")
AND
ENTERTAINMENT PROPERTIES TRUST,
a Maryland real estate investment trust
("PURCHASER")
November 21, 1997
<PAGE>
EXHIBIT K
TO OPTION AGREEMENT
AMERICAN MULTI-CINEMA, INC./ENTERTAINMENT PROPERTIES TRUST
Purchase Price
Purchase Price
Property Pad (in thousands)
Gulf Pointe 30 A 511
Gulf Pointe 30 B 511
Gulf Pointe 30 C 744
Gulf Pointe 30 D 465
Mesquite 30 A-1 810
Mesquite 30 A-2 674
Mesquite 30 B 674
Cantera 30 B 1,012
Cantera 30 C 1,100
Cantera 30 D 1,012
Cantera 30 E 1,056
A-1
<PAGE>
Exhibit 10.3
AMCE RIGHT TO PURCHASE AGREEMENT
THIS RIGHT TO PURCHASE AGREEMENT (the "Agreement"), dated as of November
21, 1997, is made and entered into among AMC ENTERTAINMENT INC., a Delaware
corporation (including its consolidated subsidiaries, hereinafter referred to as
"Grantor"), and ENTERTAINMENT PROPERTIES TRUST, a Maryland real estate
investment trust (hereinafter referred to as "Offeree"). Grantor and Offeree are
sometimes collectively referred to herein as the "Parties" and each of the
Parties is sometimes singularly referred to herein as a "Party".
WHEREAS, Grantor may in the future acquire or develop megaplex theatre and
related entertainment property owned (or ground-leased) by the Grantor (the
"Property");
WHEREAS, Grantor may from time to time sell, transfer, convey or otherwise
dispose of (which may include a leaseback, but not a mortgage) ("Transfer") any
or all such Property during a period of five (5) years from and including the
date hereof (the "Right to Purchase Period"); and
WHEREAS, Grantor desires to grant to Offeree a personal non-assignable
right of first offer and right of first refusal relating to the Transfer of any
Property, exercisable under the terms and conditions hereinafter set forth.
NOW, THEREFORE, For and in consideration of the payment of the sum of Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the Parties, Grantor and Offeree hereby
agree as follows:
1. Right of First Offer.
(a) Grant of Right of First Offer. Subject to the terms and conditions set
forth in this Agreement, Grantor hereby grants to Offeree a right of first offer
("First Offer Right") relating to the Transfer of all or any Property. If, at
any time during the Right to Purchase Period, Grantor desires to Transfer all or
any portion of a Property (the "Offered Property"), Grantor shall first deliver
to Offeree written notice (the "Notice of Transfer"), which Notice of Transfer
shall state Grantor's desire to Transfer the Offered Property and contain an
accurate description of the Offered Property and its proposed operations.
(b) Election to Offer. (i) If Offeree elects to make an offer to purchase
the Offered Property, Offeree shall deliver to Grantor within sixty (60) days
following the date the Notice of Transfer was received by Offeree (the "Offer
Date") a written offer (the "Offeree Offer"), which Offeree Offer shall offer to
purchase the Offered Property on the terms and conditions, including price,
timing and lease terms (if
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applicable), specified therein. The Offeree Offer shall disclose all material
facts relating to the proposed transaction and, at Offeree's option, may include
a form purchase agreement or lease, as applicable. Each Offeree Offer shall be
an irrevocable commitment by Offeree to purchase the Offered Property on the
terms and conditions set forth therein.
(ii) If Offeree does not elect to make an offer to purchase
the Offered Property by the Offer Date or if Offeree makes an offer to purchase
the Offered Property by the Offer Date and Grantor elects not to Transfer the
Offered Property on the terms offered by Offeree, Grantor (A) shall be under no
obligation to Transfer any portion of the Offered Property to any person, unless
Grantor so elects, and (B) may, within a period of 6 months from and after the
Offer Date, solicit offers relating to the Transfer of such Offered Property;
provided, however, any Transfer of the Property within a period of 6 months from
and after the Offer Date not on terms and conditions and at a price more
favorable to those offered by Offeree shall be subject to the First Refusal
Right set forth in paragraph 2 of this Agreement. The First Offer Right granted
to Offeree under the terms and conditions of this Agreement shall revive in the
event that Grantor fails to Transfer the Offered Property within the six (6)
months from and after the Offer Date.
(iii) Notwithstanding Offeree's election not to make an offer
to purchase the Offered Property by the Offer Date or Grantor's election not to
Transfer the Offered Property on the terms offered by Offeree, Grantor shall be
obligated to submit a Grantor Offer to Offeree following receipt of a Bona Fide
Offer from a Proposed Transferee pursuant to paragraph 2 of this Agreement.
(c) Acceptance of Offeree Offer. If Grantor elects to Transfer
the Offered Property on the terms offered by the Offeree, Grantor shall deliver
in writing its election to Transfer the Offered Property to Offeree within
thirty (30) days following the date the Offeree Offer was received by Grantor.
Such communication shall, when taken in conjunction with the Offeree Offer, be
deemed to constitute a valid, legally binding and enforceable agreement for the
Transfer of the Property. Such agreement may be evidenced by, but, unless
otherwise agreed, shall not be subject to, execution of a purchase agreement or
lease, as applicable.
2. Right of First Refusal.
(a) Grant of Right of First Refusal. Subject to the terms and
conditions set forth in this Agreement, Grantor hereby grants to Offeree a right
of first refusal ("First Refusal Right") relating to the Transfer of all or any
Property. If, at any time during the Right to Purchase Period, Grantor desires
to Transfer any Offered Property pursuant to a bona fide offer (the "Bona Fide
Offer") from a third party (the "Proposed Transferee"), Grantor shall first
deliver to Offeree a written offer (the "Grantor Offer"), which Grantor Offer
shall offer to Transfer the Offered Property to the Offeree on terms and
conditions, including price, timing and lease terms (if applicable), not less
favorable to the Offeree than the terms and conditions which Grantor proposes to
Transfer such Property to the
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Proposed Transferee. The Grantor Offer shall disclose the identity of the
Proposed Transferee, the person or persons, if any, that control such Proposed
Transferee, to the extent known by Grantor, the terms and conditions, including
price, timing and lease terms (if applicable), of the proposed Transfer, any
proposed form purchase agreement or lease and any other material facts relating
to the proposed transaction. Each Grantor Offer is an irrevocable commitment by
Grantor to sell the Offered Property on the terms and conditions set forth
therein.
(b) Confirmation of Bona Fide Offer. The Offeree shall be
permitted to confirm that the Bona Fide Offer is firm and subject only to
conditions that could reasonably be expected to be satisfied, by (i) review of
the documents involved in such Bona Fide Offer and (ii) requiring that the
Grantor cause the Proposed Transferee to submit evidence reasonably satisfactory
to the Offeree of financing for such purchase, but only to the extent that the
Bona Fide Offer has a financing contingency. If review of such documents and of
such evidence of financing by the Offeree would violate a confidentiality
obligation of Grantor to the Proposed Transferee, or of the Proposed Transferee
to any third party, Grantor shall designate a recognized accounting or
investment banking firm or similar third party reasonably satisfactory to the
Offeree, who shall at Offeree's expense (i) certify that the terms set forth in
the written documents are as described in the Offer or are no more favorable to
the Proposed Transferee than the terms described in the Offer, and (ii) certify
that financing has been obtained, subject to no condition which, in such third
party's reasonable judgment, is likely to be unsatisfied, or based on the
evidence provided, such third party expects that financing for the sale to the
Proposed Transferee will be obtained.
(c) Acceptance of Grantor Offer. (i) If Offeree elects to
purchase the Offered Property on the terms set forth in the Grantor Offer,
Offeree shall deliver in writing its election to purchase the Offered Property
to Grantor within forty-five (45) days following the date the Grantor Offer was
received by the Offeree (the "Acceptance Date"), but not less than five days
prior to the expiration date of the Bona Fide Offer, provided such election in
any circumstance will not be due prior to the expiration of 10 business days
following the date the Grantor's Offer was received by Offeree. Such
communication shall, when taken in conjunction with the Grantor Offer, be deemed
to constitute a valid, legally binding and enforceable agreement for the
Transfer of the Property. Such agreement may be evidenced by, but, unless
otherwise agreed, shall not be subject to, execution of a purchase agreement or
lease, as applicable.
(ii) If Offeree does not elect to purchase the Offered
Property by the Acceptance Date, Grantor (i) shall be under no obligation to
Transfer any portion of the Offered Property to any person, unless Grantor so
elects, and (ii) may, within a period of 6 months from and after the date the
Grantor Offer was received by the Offeree, Transfer the Offered Property to any
person, including the Proposed Transferee, at a price at least equal to that
offered to Offeree in the Grantor Offer and on the terms and conditions
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<PAGE>
substantially consistent to those included in the Grantor Offer and Grantor
shall be under no obligation to submit a Grantor Offer to Transfer such Offered
Property to the Offeree in connection therewith. The First Refusal Right granted
to the Offeree under the terms and conditions of this Agreement shall revive in
the event that Grantor fails to Transfer the Offered Property within the six (6)
month period specified above.
3. Due Diligence. During the periods following the date the Notice of
Transfer was received by Offeree and prior to the Offer Date, following the date
the Grantor Offer was received by Offeree and prior to the Acceptance Date and
following any agreement to Transfer a Property, Grantor shall provide Offeree
access to the Offered Property, its books and records related thereto and its
officers and employees with knowledge thereof during reasonable hours for
purposes of conducting a due diligence investigation of the Offered Property and
its proposed operations.
4. Closing. (a) The closing of any Transfer of Offered Property pursuant to
this Agreement shall be determined by the Parties (which, unless otherwise
agreed, shall be within 90 days of the acceptance of any offer hereunder).
5. No Assignment. The First Refusal Right and First Offer Right granted
hereby are personal to Offeree, and, as an inducement to Grantor to enter into
this Agreement, it is expressly agreed that Offeree has no right, directly or
indirectly, to assign in whole or in part any rights granted by this Agreement.
Grantor shall have no obligation or requirement to deal with any party other
than Offeree in all matters relating to this Agreement. Any purchase agreement
or lease hereunder may be made with a subsidiary of Grantor acceptable to
Offeree.
6. No Broker. Offeree represents that it has dealt with no broker in
connection with the First Refusal Right and First Offer Right granted hereby,
and agrees to indemnify and hold Grantor harmless from the claims of any broker
in connection with the transactions contemplated hereby.
7. Notices. All notices, requests and other communications under this
Agreement shall be in writing and shall be either (a) delivered in person, (b)
sent by certified mail, return-receipt requested, (c) delivered by a recognized
delivery service or (d) sent by facsimile transmission and addressed as follows:
If intended for Offeree: Entertainment Properties Trust
One Kansas City Place
1200 Main Street, Suite 3250
Kansas City, Missouri 64105
Phone: (816) 480-4649
Fax: (816) 480-4617
Attention: Robert L. Harris, President
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With a copy to: Stinson, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
Kansas City, Missouri 64105
Phone: (816) 691-3180
Fax: (816) 691-3495
Attention: Michael G. O'Flaherty
If intended for Grantor: AMC Entertainment Inc.
106 West 14th Street
Kansas City, Missouri 64105
Phone: (816) 221-4000
Fax: (816) 480-4617
Attention: Peter C. Brown, President
With a copy to: Lathrop & Gage L.C.
2345 Grand Boulevard, Suite 2800
Kansas City, Missouri 64108
Phone: (816) 460-5515
Fax: (816) 292-2001
Attention: E.T. Bullard
or at such other address, and to the attention of such other person, as the
parties shall give notice as herein provided. A notice, request and other
communication shall be deemed to be duly received if delivered in person or by a
recognized delivery service, when delivered to the address of the recipient, if
sent by mail, on the date of receipt by the recipient as shown on the
return-receipt card, or if sent by facsimile, upon receipt by the sender of an
acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient's facsimile number; provided that if a notice, request or other
communication is served by hand or is received by facsimile on a day which is
not a Business Day, or after 5:00 P.M. on any Business Day at the addressee's
location, such notice or communication shall be deemed to be duly received by
the recipient at 9:00 A.M. on the first Business Day thereafter.
8. Waiver of Conditions. Any Party may at any time or times, at its
election, waive any of the conditions to its obligations hereunder, but any such
waiver shall be effective only if contained in a writing signed by such Party.
No waiver by a Party of any breach of this Agreement by the other Party shall be
deemed to be a waiver of any other breach by such other Party (whether preceding
or succeeding and whether or not of the same or similar nature), and no
acceptance of payment or performance by a Party after any breach by the other
Party shall be deemed to be a waiver of any breach of this Agreement by such
other Party, whether or not the first Party knows of such breach at the time it
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accepts such payment or performance. No failure or delay by a Party to exercise
any right it may have by reason of the default of the other Party shall operate
as a waiver of default or modification of this Agreement or shall prevent the
exercise of any right by the first Party while the other Party continues to be
so in default.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri. The Parties agree that
jurisdiction and venue for any litigation arising out of this Agreement shall be
in the Courts of Jackson County, Missouri or the U.S. District Court for the
Western District of Missouri and, accordingly, consent thereto.
10. Attorneys' Fees. If either Party obtains a judgment against the other
Party by reason of a breach of this Agreement, a reasonable attorneys' fee as
fixed by the court shall be included in such judgment.
11. Remedies Cumulative. Except as herein expressly set forth, no
remedy conferred upon a Party by this Agreement is intended to be exclusive of
any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given herein or now or
hereafter existing at law, in equity or by statute.
12. Specific Performance. The Parties agree that if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, and
no adequate remedy at law would exist and damages would be difficult to
determine, and that the Parties shall be entitled to specific performance hereof
(without requirement to post bond), in addition to any and all other remedies at
law or in equity. The Parties agree that in connection with the enforcement of
any agreement to Transfer a Property created hereunder, the terms to be enforced
shall be in the following order of priority: (i) those terms contained in any
executed purchase agreement or lease; (ii) in the absence of (i), those
contained in the communications that constituted the agreement between the
parties; and (iii) in the absence of (i) or (ii), those contained in the
Agreement of Sale and Purchase, dated as of November 21, 1997, among American
Multi-Cinema, Inc., AMC Realty, Inc. and Entertainment Properties Trust or the
Lease, dated as of November 21, 1997, between Entertainment Properties Trust and
American Multi-Cinema, Inc., as applicable.
13. Complete Agreement. This Agreement constitutes the entire
understanding between Grantor and Offeree with respect to the subject matter
hereof and no representations, warranties, promises, guarantees or agreements,
oral or written, express or implied, have been made by Grantor with respect to
this Agreement except as expressly provided in this Agreement. The Agreement may
not be modified, amended or waived except by a written instrument executed by
both Grantor and Offeree. A waiver on one occasion shall not be construed to be
a waiver with respect to any other occasion.
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14. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY
ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE
OTHER AGREEMENTS.
15. Captions. The captions in this Agreement are inserted for convenience
of reference only and in no way define, describe or limit the scope or intent of
this Agreement or any of the provisions hereof.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterparts, when executed and delivered, shall be
deemed to be an original and all of which counterparts, when taken together,
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, Grantor and Offeree have executed this Agreement as
of the day and year first above written.
OFFEREE:
(SEAL) ENTERTAINMENT PROPERTIES
TRUST, a Maryland real estate
investment trust
By:/s/ David M. Brain
Name: David M. Brain
Title: Chief Financial Officer and
Secretary
(SEAL) GRANTOR:
ATTEST: AMC ENTERTAINMENT, INC., a
Delaware corporation
By:/s/ Nancy L. Gallagher By:/s/ Peter C. Brown
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: President and Chief Financial
Officer
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Exhibit 10.4
LEASE
BETWEEN
ENTERTAINMENT PROPERTIES TRUST,
a Maryland real estate investment trust
("LANDLORD")
AND
AMERICAN MULTI-CINEMA, INC.,
a Missouri corporation
("TENANT")
For the Lease
of
Grand 24, Dallas, TX Leawood Town Center 20, Kansas City, MO
Promenade 16, Los Angeles, CA South Barrington 30, Chicago, IL
Ontario Mills 30, Los Angeles, CA Mission Valley 20, San Diego, CA
West Olive 16, St. Louis, MO Lennox 24, Columbus, OH
Studio 30, Houston, TX First Colony 24, Houston, TX
Huebner Oaks 24, San Antonio, TX Oakview 24, Omaha, NE
November 21, 1997
Michael G. O'Flaherty E.T. Bullard
Stinson, Mag & Fizzell, P.C. Lathrop & Gage L.C.
1201 Walnut Suite 2500
Suite 2800 2345 Grand Boulevard
Kansas City, Missouri 64105 Kansas City, Missouri 64108
Telephone: (816) 691-3180 Telephone: (816) 292-2000
Telecopy: (816) 691-3495 Telecopy: (816) 292-2001
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Counsel to Landlord Counsel to Tenant
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<PAGE>
AMC BUILD
(REIT PROGRAM)
LEASE THIS LEASE, dated as of November 21, 1997, is made by and between
ENTERTAINMENT PROPERTIES TRUST, a Maryland real estate investment trust, with an
office at One Kansas City Place, 1200 Main Street, Suite 3250, Kansas City,
Missouri, 64105, ("Landlord"), and AMERICAN MULTI-CINEMA, INC., a Missouri
corporation, with an office at 106 West 14th Street, Suite 1700, Kansas City,
Missouri 64105 ("Tenant").
1. Attachments to Lease; Rent and Expense Rider and
Exhibits. Attached to this Lease and hereby made a part hereof are the
following:
RENT AND EXPENSE RIDER - a statement of the Annual Fixed Rent,
Percentage Rent and common area and real estate tax charges, if any, which are
to be paid by Tenant hereunder together with provisions pertaining to the
payment thereof.
EXHIBIT A - a legal description of the tract of land
constituting the land portion of the Leased Premises.
EXHIBIT B - a site plan (the "Site Plan") of Leased Premises
and the Entire Premises (if applicable) showing (i) the location of Tenant's
Facility, outlined in red, and (ii) the Leased Premises or the Entire Premises
(if applicable) of which the Leased Premises are a part, outlined in black, and
(iii) the location of any other buildings and improvements constructed or to be
to be constructed, if known, within the Entire Premises by any person or entity.
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2. Definitions and Rules of Construction.
(A) Definitions. The following terms for purposes of this Lease
shall have the meanings hereinafter specified:
"Affiliate" shall mean as applied to a person or entity, any
other person or entity directly or indirectly controlling, controlled by, or
under common control with, that person or entity.
"Annual Fixed Rent" shall mean the annual fixed rent payable
hereunder, which shall be the following:
(1) From the Commencement Date through and including the
end of the first Lease Year, an amount, per annum, equal to the
product obtained by multiplying $18,600,000.00 (the Purchase Price
with respect to such property set forth in the Agreement of Sale
and Purchase entered into among Landlord, Tenant and AMC Realty,
Inc. dated as of November 21, 1997) by ten and one half (10.5)
percent.
(2) During the second Lease Year and each following Lease
Year until the end of the initial fixed term and during all Option
Periods, if Tenant shall so extend the term of this Lease, the
Annual Fixed Rent shall be increased each Lease Year by an amount
equal to the Annual Fixed Rent Escalation.
"Annual Fixed Rent Escalation" shall be the lesser of 2% or
the percentage increase in the Consumer Price Index ("CPI") for the previous
Lease Year times the previous Lease Year's Annual Fixed Rent.
"Annual Percentage Rent" is defined in the Rent and Expense Rider.
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<PAGE>
"Business Days" is defined as any day other than a Saturday, a
Sunday or a day on which banking institutions in the City of New York are
authorized by law to close.
"Commencement Date" is defined in the Article captioned
"Term." "Common Facilities" shall include, if applicable, all
parking areas, streets,
driveways, curb cuts, access facilities, aisles, sidewalks, malls, landscaped
areas, sanitary and storm sewer lines, water, gas, electric, telephone and other
utility lines, systems, conduits and facilities and other common and service
areas within the Entire Premises, whether or not shown on the Site Plan, and
regardless of by whom owned.
"Code" means the Internal Revenue Code of 1986, as the same
may be amended or supplemented, and the rules and regulations promulgated
thereunder.
"CPI" shall mean the Consumer Price Index for all Urban Consumers, U.S.
City Average, published by the Bureau of Labor Statistics of the United States
Department of Labor (base year 1982-84=100), or any successor index thereto.
"Cross-Default Termination Date" means the earlier to occur of
(i) the date the senior long-term debt obligations of Tenant's Parent or the
corporate credit rating of Tenant's Parent is rated investment grade by either
Standard & Poor's Corporation or Moody's Investors Services, Inc., (ii) Tenant's
Rent under this Lease and any other lease between Landlord and Tenant represents
less than 50% of the Landlord's rental income for any fiscal quarter or (iii)
the expiration of the fixed term hereof.
"Default Rate" shall mean the lesser of (i) the Prime Rate
plus 4% or (ii) the highest rate of interest that may lawfully be charged to the
party then required to pay interest under this Lease at the Default Rate.
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<PAGE>
"Entire Premises" shall mean, if applicable, the tract of land
constituting the land portion of the Leased Premises described on Exhibit A and
shown outlined in black on the Site Plan where Tenant's Facility is located,
together with any buildings, Common Facilities and other improvements thereon,
as the Entire Premises is constituted from time to time. In no event shall the
Entire Premises be deemed to include any land which Landlord does not own either
fee title or a leasehold interest.
"Environmental Report" is defined in the Article captioned "Governmental
and Ground Lease Compliance."
"Expiration Date" is defined in the Article caption "Term."
"Final Plans" shall mean the final plans, drawings and
specifications for Tenant's Facility as built.
"Floor Area" shall mean, with respect to each building or
structure on the Entire Premises (if applicable) or Tenant's Facility, the
number of square feet of floor area at each level or story lying within the
exterior faces of exterior walls thereof (except party walls as to which the
center line, not the exterior faces, shall be used), whether or not leased or
occupied; PROVIDED, HOWEVER, none of the following shall be included in the
computation of the Floor Area of Tenant's Facility: (i) any canopies (or the
area under such canopies) extending from the walls of Tenant's Facility, (ii)
any sidewalks, ramps, stairways or other walkways located outside the exterior
walls of Tenant's Facility regardless of whether any are contiguous or adjacent
to Tenant's Facility, (iii) any mezzanines used primarily for projection and
office purposes, (iv) any area designed as a weather barrier, and (v) any
corridors, vertical transportation and other areas which would not be necessary
if Tenant's Facility were at grade level.
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"Force Majeure" is defined in the Article captioned "Force Majeure."
"Governmental Authorities" shall mean all federal, state, county, municipal
and local departments, commissions, boards, bureaus, agencies and offices
thereof, having or claiming jurisdiction over all or any part of the Entire
Premises (if applicable) or Tenant's Facility or the use thereof. "Gross
Receipts" is defined in the Rent and Expense Rider.
"Ground Lease" shall mean, in the event Landlord does not own fee title to
the Leased Premises, the ground lease or similar conveyance instrument by which
Landlord holds a leasehold or similar estate therein and to which this Lease is
subject.
"Hazardous Substances" is defined in the Article captioned "Governmental
Compliance."
"Laws" shall mean all present and future requirements,
administrative and judicial orders, laws, statutes, ordinances, rules and
regulations of any Governmental Authority.
"Lease Year" is defined in the Rent and Expense Rider.
"Leased Premises" shall mean Tenant's Facility, the land
described in Exhibit A (including, if applicable, the lessee's interest in any
ground lease) and all improvements, fixtures, appurtenances, rights, easements
and privileges thereunto belonging or in any way appertaining, and all other
rights, easements and privileges granted to Tenant in this Lease, excluding,
however, Tenant's Property as defined below.
"Metropolitan Area" shall mean the Dallas, Texas, metropolitan area.
"Mortgage" shall mean any mortgage or deed of trust or other instrument in
the nature thereof evidencing a security interest in the Leased Premises or any
part thereof.
"Number of Fixed Term Years" shall mean 13 years.
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"Option Periods" shall mean four (4) successive separate periods of five
(5) -------------- years each.
"Percentage Rate" shall mean 6%.
"Prime Rate" shall mean the lesser of (i) the per annum
interest rate from time to time publicly announced by Citibank, N.A., New York,
New York as its base rate and (ii) the maximum nonusurious interest rate
permitted by applicable laws. If Citibank, N.A. should cease to publicly
announce its base rate, the Prime Rate hereunder shall be the lesser of (i) the
prime, base or reference rate of the largest bank (based on assets) in the
United States which announces such rate and (ii) the maximum nonusurious
interest rate permitted by applicable laws.
"REA" is defined in the Article captioned "Other Tenancies; REA".
"Related Leases" shall mean the Leases with respect to the properties
listed on the cover sheet of this Lease and Gulf Pointe 30 (Houston, TX),
Mesquite 30 (Dallas, TX), Cantera 30 (Chicago, IL), Hampton Town Center 24
(Norfolk, VA) and Livonia 20 (Detroit, MI).
"Rent" shall mean Annual Fixed Rent, Annual Percentage Rent
and other charges payable by Tenant under this Lease.
"Required Insurance" shall mean the insurance policies which
Tenant is required to maintain pursuant to Sections (A), (B) and (C) of Article
15.
"Right to Purchase Period" shall for purposes of Article 29
hereof mean the period of 5 years from and including the Commencement Date.
"Shopping Center", if applicable, shall mean the Shopping
Center of which the Leased Premises are a part or adjacent to.
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"Taxes" is defined in the Rent and Expense Rider.
"Tenant's Facility" shall mean the building previously erected
and/or owned by Tenant or Tenant's Affiliate which presently contains
approximately 98,175 square feet of Floor Area, 24 auditoriums and 5,067 seats.
"Tenant's Operating Covenant" is defined in the Article captioned "Tenant's
Covenant to Operate."
"Tenant's Operating Period" shall mean the period beginning on
the Commencement Date and ending on the 10th anniversary of such date.
"Tenant's Parent" shall mean AMC Entertainment Inc., a Delaware
corporation.
"Tenant's Property" is defined in the Article captioned
"Fixtures." "Tenant's Pylon" is defined in the Article captioned "Tenant's
Signs." "Tenant's Signs" is defined in the Article captioned "Tenant's Signs."
"Term of this Lease" or "term hereof" shall mean the initial fixed term as
provided in the Article captioned "Term" and any renewal or extension thereof.
"Transfer" shall for purposes of Article 29 hereof mean any sale, transfer,
conveyance or other disposal (which may include a lease back) of the Leased
Premises or any part thereof.
(B) Rules of Construction. The following rules of construction
shall be applicable for all purposes of this Lease, unless the context
otherwise requires:
(1) The terms "hereby," "hereof," "hereto," "herein,"
"hereunder" and any similar terms shall refer to this Lease, and
the term "hereafter" shall mean after, and the term "heretofore"
shall mean before, the date of this Lease.
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(2) Words of the masculine, feminine or neuter gender
shall mean and include the correlative words of the other genders
and words importing the singular number shall mean and include the
plural number and vice versa.
(3) The terms "include," "including" and similar terms
shall be construed as if followed by the phrase "without being
limited to."
3. Premises.
Landlord hereby demises and leases or subleases, as
applicable, unto Tenant, and Tenant hereby leases or subleases, as applicable,
from Landlord, for the consideration and upon the terms and conditions herein
set forth, the Leased Premises.
4. Term.
The initial fixed term of this Lease shall commence November
24, 1997 (the "Commencement Date"), and shall expire as of midnight on the last
day of the last year of the Number of Fixed Term Years from the first day of the
first month immediately following the Commencement Date ("Expiration Date");
PROVIDED, HOWEVER, if the Expiration Date is a date other than January 31, or
September 30, then Tenant may, by notice to Landlord given got later than 6
months prior to the Expiration Date, elect to have the Expiration Date postponed
until the next succeeding January 31 or September 30, whichever first occurs. If
Tenant so elects, then the last Lease Year shall be longer than 12 months, and
shall end on the January 31 or September 30 (as the case may be) next following
the previously scheduled Expiration Date.
5. Rent.
(A) Fixed and Percentage. Tenant shall pay Landlord, without
abatement, adjustment or setoff, except as set forth herein, the Annual
Fixed Rent in the manner set
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forth herein and in the Rent and Expense Rider commencing on the
Commencement Date, subject to the provisions of paragraph (B) below and,
if applicable, Annual Percentage Rent, in the manner set forth herein and
in the Rent and Expense Rider.
(B) Ground Rents, If Any. Tenant also covenants and agrees during
the term of this Lease to pay any rent obligations of Landlord under any
Ground Lease. Tenant shall not receive a credit against its Annual Fixed
Rent or any other amounts due hereunder for such Ground Lease rental
payments.
(C) Prohibition of Use. If at any time during the term of this
Lease, (i) any Law shall prohibit the use of Tenant's Facility for the
purposes permitted in Section 7(A)(i) or (iii) of this Lease (the
"Prohibition"), and (ii) such Prohibition shall require Tenant to
discontinue its business operation in the Leased Premises or as a result
of such Prohibition Tenant reasonably determines that it is economically
unfeasible to continue to operate its business, and Tenant does in fact
discontinue its business operation in the Leased Premises, then for the
period beginning with the Tenant's discontinuance of its business
operations in the Leased Premises and ending on the earlier of the date
the Tenant commences its business operations in the Leased Premises or 30
days following the date the Prohibition shall have been lifted, Rent
payable by Tenant under this Lease shall be fully abated and Landlord
shall, promptly after such occurrence or imposition, refund any unearned
Rent paid by Tenant. Immediately upon the earlier to occur of (a) Tenant
becoming aware of any proposed Prohibition, or (b) Tenant's receipt of
any notice from any Governmental Authorities of any Prohibition, Tenant
shall promptly notify Landlord of such fact, and Landlord shall have the
right to proceed, in its or Tenant's name, and at Landlord's sole cost
and expense, to take such action as Landlord shall determine to be
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necessary or desirable to contest or challenge the Prohibition. Landlord
shall within 30 days of receipt of notice from Tenant of the Prohibition
notify Tenant in writing if Landlord elects to contest or challenge such
Prohibition. If (x) Landlord shall elect not to contest or challenge the
Prohibition, (y) a final, nonappealable judgment is entered upholding the
Prohibition, or (z) Landlord shall fail in the judgment of Tenant,
reasonably exercised, to diligently proceed with the contest or challenge
of such Prohibition, and such failure to proceed continues for 10 days
after written notice to Landlord of such failure, then either Tenant or
Landlord may at any time thereafter while such Prohibition continues
terminate this Lease by giving the other party written notice of such
termination. If a Prohibition should occur or be imposed, nothing in this
paragraph (C) shall be deemed to impair Tenant's obligations under
paragraph (B) of the Article captioned "Governmental Compliance" at any
time during which Tenant is not prohibited from using Tenant's Facility
for the purposes permitted in Section 7(A)(i) and (iii) of this Lease by
the Prohibition.
6. Covenant of Title; Authority and Quiet Possession; Transfer of Title.
(A) Landlord's Covenant. Landlord represents and warrants to Tenant that:
(i) Landlord has full right and lawful authority to enter into and perform
Landlord's obligations under this Lease for the term hereof, and Landlord has
not and will not suffer, incur or enter into any contracts, leases, tenancies,
agreements, restrictions, violations, encumbrances or defects in title of any
nature whatsoever which would materially adversely affect the right, title and
interest in the Leased Premises which was assigned or transferred to Landlord or
would materially adversely restrict or prevent the use or enjoyment by Tenant of
the Leased Premises; (ii) this Lease shall not be subject or
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subordinate to any Mortgage except for such subordination as may be
accomplished in accordance with the provisions of the Article captioned
"Estoppel Certificate; Attornment; and Priority of Lease; Subordination"
and (iii) if Tenant shall discharge the obligations herein set forth to
be performed by Tenant, Tenant shall have and enjoy, during the term
hereof, the quiet and undisturbed possession of the Leased Premises
together with the right to use the Common Facilities, if any, as in this
Lease contemplated, free from interference by Landlord or any party
claiming under Landlord.
(B) Leasehold Title Policy. Contemporaneously with the execution
of this Lease, if requested by Tenant, Landlord shall furnish Tenant, at
Tenant's sole cost and expense, a binding commitment for the issuance of
a leasehold owner's title insurance policy on the ALTA standard form
B-1970 (amended 10/17/70) policy form if available, and if not available,
on the current policy form available in the state in which the Leased
Premises is located, in an amount reasonably determined by Tenant and
containing such endorsements available in such state as Tenant shall
reasonably designate, written by Stewart Title Guaranty Company,
committing to insure as of the date of recording of a memorandum of this
Lease that the condition and state of the title to the leasehold estate
created hereunder is in accordance with clauses (i) and (ii) of paragraph
(A) of this Article. The acceptance of such commitment or resulting title
policy by Tenant shall in no way be construed as a waiver of, or in any
way be deemed to impair, Landlord's representations and warranties set
forth in paragraph (A) of this Article. By executing this Lease, Tenant
shall be deemed to have approved and accepted the status of title as
reflected in such title commitment.
(C) Change of Ownership. Subject to Tenant's rights under the
Article captioned "Right of First Refusal to Purchase by Tenant,"
Landlord shall promptly notify Tenant in
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writing of any change in the ownership of the Leased Premises, giving the
name and address of the new owner and instructions regarding the payment
of rent. In the event of any change in or transfer of title of Landlord
in and to the Leased Premises or any part thereof, whether voluntary or
involuntary, or by act of Landlord or by operation of any Laws, Tenant
shall have the right to pay Annual Fixed Rent or other charges thereafter
accruing to the party to which Tenant was making payments prior to such
change in title until (i) Tenant shall have been notified of such change
in title and given satisfactory proof thereof (it being hereby agreed
that a letter signed by both the prior owner and the new owner of the
Leased Premises notifying Tenant of such transfer and the address for
rent payment and notice purposes hereunder shall be deemed satisfactory
proof of such change in title), and (ii) such new owner shall execute and
deliver an agreement, in recordable form, whereby such new owner assumes
and agrees with Tenant to discharge all obliga tions of Landlord under
this Lease.
7. Use of Premises.
(A) During Initial Ten Years. During the period commencing with
the Lease Commencement Date and ending on the day before the 10th
anniversary of the Lease Commencement Date, Tenant's Facility shall not
be used except (i) primarily as a theatre and auditorium for presentation
of motion pictures, telecasts and other audio-visual presentations, and
for meetings and other public presentations and entertainment; (ii) for
the incidental operation therein of games and other amusement devices
(electronic or otherwise); (iii) for the incidental retail sale therein
of food, beverages and refreshments; (iv) for the incidental sale or
rental (or both) of video cassettes and discs; (v) for the incidental
sale of records, compact discs, books, magazines, toys and novelties
related to
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the movie industry; (vi) for the incidental sale of other goods, wares,
merchandise and services; and (vii) such other incidental lawful retail,
service or entertainment purpose(s) which are not specifically prohibited
under this Lease. Notwithstanding anything to the contrary herein, Tenant
shall not have the right to use the Leased Premises, or any part thereof,
for any use or purpose which is not permitted by, or which results in a
violation of, any agreement, covenant or restriction to which the Leased
Premises is subject as of the date of this Lease, or any Ground Lease or
REA applicable to the Leased Premises.
(B) After Initial Ten Years. Following the 10th anniversary of the
Lease Commencement Date, Tenant's Facility, if used at all, may be used
for any lawful purpose(s), provided that Tenant must obtain Landlord's
prior approval if such use would have the effect of causing all or a
portion of the amount received or accrued by Landlord pursuant to this
Lease to be treated as other than "rents from real property" within the
meaning of Section 856(d) of the Code. Notwithstanding anything to the
contrary herein, Tenant shall not have the right to use the Leased
Premises, or any part thereof, for any use or purpose which is not
permitted by, or which results in a violation of, any agreement, covenant
or restriction to which the Leased Premises is subject as of the date of
this Lease, or any Ground Lease or REA applicable to the Leased Premises,
[see page 13A for continuation]
(C) Landlord Assistance. Landlord agrees to execute, without cost
to Landlord, such customary applications, consents and other instruments
as shall be required by Governmental Authorities to permit the operation
of Tenant's Facility as permitted by this Lease, so long as such
applications, consents or other instruments do not impose or subject
Landlord to any liability or claim, and Tenant hereby covenants and
agrees to indemnify and hold harmless Landlord from and against any and
all claims, costs, demands,
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losses or liabilities (including attorneys' fees) which Landlord may
suffer or incur by reason of Landlord's execution of any such
applications, consents or other instruments as Tenant may request. If at
any time any claims, costs, demands, losses or liabilities are asserted
against Landlord by reason of Landlord's execution of any such
applications, consents or other instruments as Tenant may request, Tenant
will, upon written notice from Landlord given in accordance with the
provisions hereof, defend any such claims, costs, demands, losses or
liabilities at Tenant's sole cost and expense by counsel reasonably
acceptable to Landlord and Tenant. The provisions of this paragraph shall
not be construed as limiting the representations and warranties of
Landlord set forth in paragraph (A) of the Article captioned "Covenant of
Title; Authority and Quiet Possession; Transfer of Title."
(D) Certain Limitations. The obligations of Tenant under this Article are
subject to the provisions of paragraph (C) of the Article captioned "Tenant's
Covenant to Operate."
8. Subletting and Assigning.
(A) After Operating Covenant. At any time after the 5th
anniversary of the Lease Commencement Date, Tenant shall have the right,
without Landlord's consent, to assign this Lease or sublet all or any
part of the Leased Premises once or more often; provided, however, that
(i) each sublease or assignment shall be made subject and subordinate to
the provisions of this Lease; (ii) the sublessee of all of the Leased
Premises or assignee, by written instrument, duly executed, acknowledged
and delivered to Landlord, shall assume all of Tenant's Obligations under
this Lease; and (iii) no sublease or assignment shall
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impose any obligations on Landlord or modify or limit any power or right
of Landlord under this Lease except as may be set forth in paragraph (E)
hereof.
(B) Continuation of Liability. If Tenant assigns this Lease or
sublets all or any part of the Leased Premises, Tenant shall, subject to
the provisions of paragraph (C) of this Article, remain liable and
responsible under this Lease and Tenant's Parent, subject to such
provisions, shall remain liable as guarantor of Tenant's obligations;
PROVIDED HOWEVER, in the case of an assignment or sublease of all of the
Leased Premises, if this Lease shall continue in effect after the last
day of the initial fixed term hereof or any renewal term during which
such assignment or sublease occurs and if the assignee or sublessee shall
have assumed in writing the performance of the covenants and obligations
of Tenant hereunder, Tenant (and Tenant's Parent) shall not be liable or
responsible to Landlord for any default or nonperformance by such
assignee or sublessee as tenant hereunder arising or occurring after the
last day of the initial term hereof or of the renewal term during which
such assignment or subletting occurs.
(C) Release of Liability. Tenant shall be released and relieved
from further liability under this Lease (and Tenant's Parent shall be
released and relieved from its guaranty of Tenant's obligations under
this Lease) if an assignment is made after the 5th anniversary of the
Lease Commencement Date and (i) the assignee, by written instrument, duly
executed and acknowledged and delivered to Landlord, assumes and
covenants and agrees with Landlord to perform all the terms, covenants
and conditions of this Lease which by the terms hereof are binding on
Tenant from and after such transfer and (ii) such assignee (or the
guarantor of such assignee's obligations under this Lease) has as of the
end of the fiscal quarter preceding the month during which any such
assignment becomes effective or subsequently attains a book net worth of
not less than $100,000,000.00, as demonstrated
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to Landlord's reasonable satisfaction (e.g. by audited financial
statements or the delivery of a 10-Q report, in the case of a public
company). If Tenant wishes to assign this Lease or sublease the entire
Leased Premises at any time during the term of this Lease to an assignee
or sublessee which does not have, as of the end of the fiscal quarter
preceding the month during which such assignment or sublease becomes
effective, a book net worth of $100,000,000.00, as demonstrated to
Landlord's reasonable satisfaction (e.g., by audited financial statements
or the delivery of a 10-Q report, in the case of a public company), then
Tenant shall have the right to make such assignment or sublease, but in
such event such assignee or sublessee shall have no further rights to
extend or renew under Article 23 of this Lease, and this Lease shall
terminate as of the end of the then current term without further right of
Tenant to extend or renew; PROVIDED, HOWEVER, that the foregoing
provision shall be of no force and effect, and such assignee or sublessee
shall continue to have the right to extend or renew this Lease pursuant
to the provisions of Article 23, upon an assignment or subletting to an
assignee or sublessee which does not have, as of the end of the fiscal
quarter preceding the month during which such assignment or sublease
becomes effective, a book net worth of $100,000,000.00, if Tenant or
Tenant's Parent agree, at the time such assignment or sublease is made,
to remain liable hereunder, and under the guaranty by Tenant's Parent,
respectively, in a manner reasonably satisfactory to Landlord.
(D) Four-Wall Deals. Anything in this Lease to the contrary
notwithstanding, Tenant shall have the right, without Landlord's consent,
once or more often, to enter into so-called "four-wall" deals whereby
Tenant's Facility or any part thereof is permitted to be used by others
on a limited engagement basis for any use permitted to be made thereof by
Tenant.
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(E) Other Actions Require Consent. Except as otherwise provided in
this Article and in paragraph (C) of the Article captioned "Tenant's
Covenant to Operate," Tenant shall not assign this Lease or sublet the
Leased Premises in whole or in part without the consent of Landlord,
which consent Landlord agrees not to unreasonably withhold or delay.
(F) Default Notices After Assignment; New Lease Provisions. If
Tenant assigns this Lease and remains liable hereunder, then Landlord,
when giving notice to said assignee or any future assignee in respect of
any default, shall also serve a copy of such notice in the manner
provided herein upon the original tenant named in this Lease, American
Multi-Cinema, Inc. ("the Original Tenant"), and no notice of default
shall be effective until a copy thereof is served to the Original Tenant
in the manner provided herein. The Original Tenant, at its sole option,
shall have the same period after receipt of such notice to cure such
default as is given to Tenant under this Lease. If because of a default
of an assignee after an assignment of this Lease (i) this Lease shall
terminate, or (ii) this Lease and the term hereof ceases and expires, or
(iii) an assignee's possession of the Leased Premises shall be terminated
without termination of this Lease (Landlord hereby agreeing to terminate
this Lease upon the Original Tenant and Landlord executing a new lease if
Original Tenant exercises its option to become the tenant thereunder),
then in any of such events Landlord shall promptly give the Original
Tenant notice thereof, and the Original Tenant shall have the option, to
be exercised by notice to Landlord given within 30 days after receipt by
the Original Tenant of Landlord's notice, to cure any default and become
Tenant under a new lease for the remainder of the term of this Lease
(including any renewal periods) upon all of the same terms and conditions
as then remain under this
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Lease as it may have been amended by agreement between Landlord and
Original Tenant. If any default of an assignee is incapable of being
cured by the Original Tenant, then notwithstanding the failure to cure
same, the Original Tenant shall have the foregoing option to enter into a
new lease. Such new lease shall commence on the date of termination of
this Lease. Notwithstanding the foregoing, if Landlord delivers to the
Original Tenant, together with Landlord's notice, a release as to all
liability under this Lease as theretofore amended, the Original Tenant
shall not have the foregoing option.
(G) Subletting to Concessionaires. Tenant may, without Landlord's
prior approval, sublease portions of the Leased Premises to
concessionaires or licensees to: (i) operate games or other amusement
devices; (ii) sell food, beverages and refreshments; (iii) sell or rent
video cassettes and discs; (iv) sell records, compact discs, books,
magazines, toys and novelties related to the movie industry; and (v) sell
other goods, wares, merchandise and services customarily associated with
or incidental to the operation of each Property. Each sublease will be
subject and subordinate to the provisions of this Lease relating to the
Leased Premises. The sublease will not affect or reduce any of the
obligations of Tenant, or Tenant's Parent as guarantor of Tenant's
obligations, under this Lease, nor will the sublease impose any
additional obligations on Landlord. Tenant will, within 10 days after the
execution and delivery of any sublease, deliver a duplicate original
thereof to Landlord. Notwithstanding the foregoing, without Landlord's
prior written approval Tenant shall not enter into any sublease, license
agreement or other arrangement which would have the effect of causing any
portion of the amount received or accrued, directly or indirectly, by the
Landlord under this Lease to be treated as other than "rents from real
property" within the meaning of Paragraph 856(d) of the Code.
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Notwithstanding anything to the contrary herein and subject to the
provisions and exclusions of Section 1(B)(4) to the Rent and Expense
Rider, if Tenant shall sublease any portion of the Leased Premises to any
concessionaire(s) or licensee(s) and either (A) such concessionaire(s) or
licensee(s) are Affiliates of Tenant, or (B) the Gross Receipts of such
concessionaire(s) or licensee(s) equal or exceed 10% of the Gross
Receipts of Tenant in any Lease Year, then the total Gross Receipts of
such concessionaire(s) or licensee(s) shall be included in Tenant's Gross
Receipts for the purpose of determining the Annual Percentage Rent
payable by Tenant for such Lease Year. If Tenant shall enter into any
subleases of any portion of the Leased Premises with any
concessionaire(s) or licensee(s), Tenant shall notify Landlord if any of
such concessionaire(s) or licensee(s) are Affiliates of Tenant, and
Tenant shall obtain from such concessionaire(s) or licensee(s), and
submit to Landlord, all information necessary to permit Landlord to
determine the Gross Receipts of such concessionaire(s) or licensee(s).
(H) Assignment of Rights in Sublease. As security for performance
of its obligations under this Lease, Tenant hereby grants, conveys and
assigns to Landlord all right, title and interest of Tenant in and to all
subleases now in existence or hereinafter entered into for any or all of
the Leased Premises, and all extensions, modifications and renewals
thereof and all rents, issues and profits therefrom. Landlord hereby
grants to Tenant a license to collect and enjoy all rents and other sums
of money payable under any sublease of any of the Leased Premises;
provided, however, that Landlord shall have the absolute right at any
time after the occurrence and continuance of an event of default and
Tenant's failure to timely cure or commence to cure the same as herein
provided, upon notice to Tenant and any subtenants to revoke said license
and to collect such rents and
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sums of money and to retain the same. Tenant shall not (i) accept any
rents (other than customary security deposits) more than 30 days in
advance of the accrual thereof nor (ii) permit anything to be done, the
doing of which, nor omit or refrain from doing anything, the omission of
which, will or could be a breach of or default in the terms of any of the
subleases.
(I) REIT Limitations. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not: (i) sublet or assign or enter
into other arrangements such that the amounts to be paid by the sublessee
or assignee thereunder would be based, in whole or in part, on the income
or profits derived by the business activities of the sublessee or
assignee; (ii) sublet or assign the Leased Premises or this Lease to any
tenant in which Landlord owns, directly or indirectly (by applying
constructive ownership rules set forth in Paragraph 856(d)(5) of the
Code), a 10% or greater interest within the meaning of Section
856(d)(2)(B) of the Code; or (iii) sublet or assign the Leased Premises
or this Lease in any other manner or otherwise derive any income without
the prior written consent of Landlord which subletting could cause any
portion of the amounts received by Landlord pursuant to this Lease or
received indirectly by Landlord pursuant to any sublease to fail to
qualify as "rents from real property" within the meaning of Paragraph
856(d) of the Code, or which could cause any other income received by
Landlord to fail to qualify as income described in Paragraph 856(c)(2) of
the Code. The requirements of this subpart (I) shall likewise apply to
any further subleasing by any subtenant.
(J) Licenses, Etc. For purposes of this Article, subleases shall
be deemed to include any licenses, concession arrangements, management
contracts or other arrangements relating to the possession or use of all
or any part of the Leased Premises.
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9. Continued Possession of Tenant.
Any holding over after the last day of any extension of the
term hereof, or after the last day of the initial fixed term hereof if this
Lease is not extended, shall be construed to be a monthly tenancy, on the terms
herein set forth, terminable by either party on not less than one month's
notice.
10. Fixtures.
(A) Any and all trade fixtures and equipment, signs, appliances,
furniture and other personal property of any nature installed in Tenant's
Facility on the Commencement Date or at any time thereafter by Tenant,
including lighting fixtures, concession stands and related equipment,
acoustical wall panels, projection and sound equipment, seats and
satellite dishes, if installed (all of the foregoing being collectively
referred to in this Lease as "Tenant's Property"), shall not become a
part of the realty and may be removed from Tenant's Facility by Tenant at
any time during the term hereof or within 30 days after the termination
of the term hereof. Landlord hereby waives any and all liens, claims,
demands or rights, including rights of levy, execution, sale and
distraint for unpaid rent, or any other right, interest or lien which
Landlord has or may hereafter acquire in any of Tenant's Property.
(B) Tenant shall have the right to finance the acquisition and
installation of Tenant's Property (by granting a security interest
therein or entering into an equipment lease therefor), and in connection
therewith, Landlord agrees to execute and to cause the holder of any
Mortgage to execute and deliver a standard form of landlord's and
mortgagee's waiver and all other documents in standard form as reasonably
required by such lessor of
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or holder of a security interest in Tenant's Property to confirm such
entity's ownership of and/or security interest in said Tenant's Property.
11. Utilities.
(A) Tenant shall pay all charges for gas, electricity, water,
sewer service and other utilities used in Tenant's Facility and the
Leased Premises during the term hereof, all such utilities to be
separately metered and to be obtained by Tenant from the applicable
utility company. Tenant also shall be solely responsible for the payment
of any connection, tap, hookup or other fee(s) imposed by Governmental
Authority or by any utility company to extend and/or connect utility
service to the Leased Premises.
(B) Tenant shall, at Tenant's expense, furnish, install and
maintain in good condition and repair, (i) to points in Tenant's
Facility, all storm and sanitary sewers, and all gas, water, telephone,
electrical facilities and other utilities of such size and type as may be
required to provide adequate service for the Leased Premises, and (ii) to
Tenant's Pylon, electrical facilities of such size and type as may be
required to adequately service Tenant's Pylon. 12. Governmental and
Ground Lease Compliance.
(A) Tenant Responsibilities Generally. Except as provided in
paragraph (C) of this Article, Tenant shall comply with all Laws which
affect the Leased Premises and Tenant's Facility located thereon and the
use and occupancy thereof. Tenant may, at its expense, contest the
validity or applicability of any governmental requirements and postpone
or delay compliance therewith (in whole or in part) pending resolution of
such contest. If Tenant receives written notice of any violation of any
governmental
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requirements applicable to the Leased Premises, Tenant shall give prompt
notice thereto to Landlord.
(B) Parties' Environmental Knowledge. Landlord and Tenant each
warrants and represents to the other that to its actual knowledge and,
except as otherwise disclosed in the Environmental Report (hereinafter
defined) (i) no release, leak, discharge, spill, storage, disposal or
emission of "Hazardous Substances" (hereinafter defined) has occurred in,
on or under the Leased Premises, and that the Leased Premises, are free
of Hazardous Substances as of the date hereof, (ii) there are no
underground storage tanks under or adjacent to the Leased Premises, (iii)
there has not been any notice of intent to sue, notice of violation,
citation, warning or similar notification under any federal, state or
local environmental law or regulation regarding the Leased Premises or
arising out of operations on the Leased Premises, and (iv) it is not
aware of any investigation or inquiry by any Governmental Authority
concerning the Entire Premises or the operations thereon; PROVIDED,
HOWEVER, Tenant hereby acknowledges and agrees that (i) it has received a
copy of an environmental assessment prepared by Garner & Associates,
Inc., respecting the Leased Premises (the "Environmental Report"), Tenant
is fully aware of the contents of the Environmental Report, and Tenant
accepts the Leased Premises subject to all matters and conditions
disclosed in the Environmental Report, (ii) Landlord has not undertaken
any investigation or inquiry with respect to environmental aspects of the
Leased Premises other than the Environmental Report, and the warranties
and representations of Landlord set forth in this section are based
solely upon the contents of the Environmental Report and any actual
knowledge, and (iii) the representations and warranties contained in this
section are subject to the matters and conditions disclosed in
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the Environmental Report, and Landlord shall not be deemed to be in
breach of the warranties and representations contained in this section to
the extent that the matter or conditions which would otherwise be a
breach of such warranties and representations is disclosed in the
Environmental Report.
(C) Landlord's Environmental Responsibilities. During the term of
this Lease, Landlord shall not cause any Hazardous Substances to be used,
stored, generated or disposed of (collectively "Used") on, in or under
the Leased Premises by Landlord or its agents, employees, contractors or
anyone (other than Tenant) claiming by through or under Landlord, except
for those Hazardous Substances which may lawfully be Used in the ordinary
course of business in the operation of such properties or which may be
reasonably required in performing the obligations of Landlord under this
Lease, and then only to the extent no Laws in effect at such time are
violated by Landlord.
(D) Tenant's Environmental Responsibilities. During the terms of
this Lease, Tenant shall not cause or permit any Hazardous Substances to
be Used on, in or under the Leased Premises by Tenant, Tenant's agents,
employees, contractors or anyone claiming by, through or under Tenant,
except in the ordinary course of business in the operation of Tenant's
business as permitted by Article 7 of this Lease, or as reasonably
required in performing the obligations of Tenant under this Lease, and
then only to the extent no Laws in effect at such time are violated by
Tenant.
(E) Environmental Indemnities. Each party ("Indemnifying Party")
shall indemnify and save the other party ("Indemnified Party") harmless
from any and all claims of third parties, and damages, costs and losses
owing to third parties or suffered by Indemnified Party, including court
costs, reasonable attorneys' fees and consultants' fees,
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arising during or after the term and reasonably incurred or suffered by
the Indemnified Party as a result of any default or breach of any
representation, warranty or covenant made by Indemnifying Party under
paragraphs (A) through (D) of this Article. It is a condition of this
indemnification and save harmless that the Indemnifying Party shall
receive notice of any such claim against the Indemnified Party promptly
after Indemnified Party first has knowledge thereof, but no failure by
the Indemnified Party to promptly notify the Indemnifying Party of any
such claim shall adversely affect the Indemnified Party's right to
indemnification except (and only to the extent) that the Indemnifying
Party can prove prejudice as a result of the failure to receive prompt
notice. This indemnification and save harmless includes any and all costs
reasonably incurred by the Indemnified Party after notice to Indemnifying
Party for any cleanup, removal or restoration mandated by any public
official acting lawfully under Law if Indemnifying Party shall not timely
perform such work.
(F) Definition. As used herein, "Hazardous Substance" means any
substance that is toxic, radioactive, ignitable, flammable, explosive,
reactive or corrosive and that is, in the form, quantity, condition and
location then found upon or under the Leased Premises and/or the
remainder of the Entire Premises, as the case may be, regulated by any
Governmental Authority. "Hazardous Substance" includes any and all
materials and substances that are defined as "hazardous waste,"
"hazardous chemical," "pollutant," "contaminant" or "hazardous
substance," in the form, quantity, condition and location then found upon
the Leased Premises and/or the remainder of the Entire Premises, as the
case may be, pursuant to Laws. "Hazardous Substance" includes asbestos,
polychlorinated biphenyls and petroleum.
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(G) Compliance with Ground Lease. Tenant covenants and agrees (i)
that this Lease is subject to any Ground Lease pursuant to which Landlord
has leased to Tenant the Leased Premises and (ii) during the Term of this
Lease to pay and perform when due any and all obligations of Landlord
under and with respect to any such Ground Lease and (iii) Tenant shall
comply with and abide by all of the terms and provisions of the Ground
Lease, whether such terms and provisions are binding upon the holder of
the tenant's interest in the Ground Lease or the Leased Premises.
Landlord agrees to fully cooperate with Tenant in the exercise of any
rights or remedies pursuant to such Ground Lease the exercise of which
Tenant believes is necessary or prudent with respect to the Leased
Premises. Tenant hereby covenants and agrees to indemnify and hold
harmless Landlord from and against any and all claims, costs, demands,
losses or liabilities (including attorney's fees) which Landlord may
suffer or incur by reason of any failure by Tenant to pay and perform all
of the terms of, or any violation of or noncompliance with any of the
covenants and agreements contained in, the Ground Lease, regardless of
whether such provisions are binding upon the holder of the tenant's
interest in the Ground Lease or the Leased Premises. If at any time any
claims, costs, demands, losses or liabilities are asserted against
Landlord by reason of any failure by Tenant to pay and perform all of the
terms of, or any violation of or noncompliance with any of the covenants
and agreements contained in, the Ground Lease, regardless of whether such
provisions are binding upon the holder of the tenant's interest in the
Ground Lease or the Leased Premises, Tenant will, upon written notice
from Landlord given in accordance with the provisions hereof, defend any
such claims, costs, demands, losses or liabilities at Tenant's sole cost
and expense by counsel reasonably acceptable to Landlord and Tenant.
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(H) No Amendments to Ground Lease. During the term of this Lease,
Landlord shall not, without the prior written consent of Tenant, modify,
amend, terminate or surrender its interest in the Ground Lease, any REA
or any other agreement relating to the Leased Premises or Entire Premises
to which Landlord has any right, title or interest (and for which Tenant
has any obligations hereunder). With respect to any such modification,
amendment, termination or surrender prohibited hereby which materially
adversely affects or impairs Tenant's operation of its business on the
Leased Premises or Entire Premises, or rights thereto, Tenant may
withhold its consent in its absolute discretion but otherwise Tenant's
consent shall not unreasonably be withheld or delayed.
(I) Landlord Indemnification. Landlord hereby covenants and agrees
to indemnify and hold harmless Tenant from and against any and all
claims, costs, demands, losses or liabilities (including attorney's fees)
which Landlord may suffer or incur by reason of any violation by Landlord
of the provisions of Section 12(H) hereof.
(J) Survival. The provisions of this Article shall survive the
expiration or sooner termination of this Lease.
13. Maintenance and Repairs.
(A) Warranty. Landlord will, so long as no event of default shall
have occurred and be continuing, assign or otherwise make available to
the Tenant any and all rights the Landlord may have under any vendor's or
manufacturer's warranties or undertakings with respect to the Leased
Premises, BUT LANDLORD DOES NOT WARRANT OR REPRESENT THAT ANY SUCH
WARRANTIES OR UNDERTAKING ARE OR WILL BE AVAILABLE TO TENANT, AND
LANDLORD SHALL HAVE NO
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FURTHER OBLIGATIONS OR RESPONSIBILITIES RESPECTING SUCH
WARRANTIES OR UNDERTAKINGS.
(B) Maintenance and Repair. Tenant shall pay all costs, expenses,
fees and charges incurred in connection with the use or occupancy of the
Leased Premises. Tenant shall at all times, at its own expense, and
subject to reasonable wear and tear, keep the Leased Premises in good
operating order, repair, condition and appearance. With respect to the
Leased Premises, the undertaking to maintain in good repair shall
include, without limitation, all interior and exterior repairs (including
all replacements of components, systems or parts which are a part of, or
are incorporated into, the Leased Premises, or any part thereof), whether
structural or nonstructural, foreseen or unforeseen, ordinary or
extraordinary and all common area maintenance including, without
limitation, removal of dirt, snow, ice, rubbish and other obstructions
and maintenance of sidewalks and landscaping.
(C) Any Ground Lease Responsibilities. Tenant also covenants and
agrees during the term of this Lease to perform all maintenance and
repair obligations of Landlord under any Ground Lease.
(D) Alterations. So long as no event of default shall have
occurred and be continuing, Tenant may, at its expense, make
nonstructural additions to and alterations to the Leased Premises and
shall additionally have the right to install communications equipment on
the roof of Tenant's Facility if such equipment is screened from customer
view in a manner reasonably acceptable to Landlord without the necessity
of obtaining Landlord's consent; provided, that upon (i) completion of
such additions or alterations, neither the fair market value of the
Leased Premises shall be materially lessened thereby
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nor the utility or condition of the Leased Premises materially impaired,
below the value, utility or condition thereof immediately prior to such
action, (ii) such additions or alterations shall not result in a change
of use of the Leased Premises, and (iii) such work shall be completed in
a good and workmanlike manner and in compliance with all applicable legal
requirements. Any and all such additions and alterations shall be and
remain part of the Leased Premises and shall be subject to this Lease.
Notwithstanding anything contained herein, Tenant shall not perform any
addition or alteration to the Leased Premises which would have an
estimated cost in excess of $500,000, nor any structural alterations to
the Leased Premises, without the Landlord's prior written consent, which
consent may be conditioned upon, among other things, Landlord's approval
of the plans and specifications for such additions and alterations and
Tenant's furnishing of such security as Landlord may reasonably require
to protect Landlord against any liens or claims affecting the Leased
Premises as a result of such addition or alteration, but otherwise such
consent shall not be unreasonably withheld or delayed.
(E) Certain Limitations. Notwithstanding anything set forth in
paragraphs (A), (B) and (C) of this Article to the contrary, the
obligations of Tenant set forth therein shall be subject to the
provisions set forth in the Articles captioned "Damage Clause" and
"Condemnation and Economic Obsolescence." 14. Damage Clause.
(A) Insured Damage. If Tenant's Facility or the Common Facilities
shall be damaged or destroyed by fire, casualty or any cause whatsoever,
either in whole or in part, which is insurable under the Required
Insurance, and Tenant does not elect to terminate this Lease pursuant to
the provisions of paragraphs (C) or (E) hereof, Tenant shall with
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due diligence remove any resulting debris and repair and/or rebuild the
damaged or destroyed structures and other improvements, including any
improvements or betterments made by Landlord or Tenant, in accordance
with the Final Plans (to the extent then permitted by law and to the
extent of available insurance proceeds). Landlord shall make all
insurance proceeds available as a result of such fire, casualty or other
destruction to Tenant for restoration. Tenant shall obtain Landlord's
consent (which shall not be unreasonably withheld or delayed) to any
material deviation from the Final Plans which Tenant is required to make
to obtain approval from Governmental Authorities having jurisdiction for
such restoration. Until the earlier of (i) the date 90 days after the
date Tenant's Facility and the Common Facilities are repaired, rebuilt
and put in good and tenantable order, or (ii) the date Tenant reopens the
portion(s) of Tenant's Facility so damaged or destroyed, the Annual Fixed
Rent and other charges hereby reserved, or a fair and just proportion
thereof according to the nature and extent of the damage sustained, shall
be abated, but only to the extent of any rental interruption insurance
proceeds actually received by Landlord.
(B) Uninsured Damage. If Tenant's Facility or the Common
Facilities shall be damaged or destroyed by a casualty not insurable
under the Required Insurance and Tenant does not elect to terminate this
Lease pursuant to the provisions of paragraphs (C) or (E) hereof,
Landlord shall with due diligence remove any resulting debris and repair
and/or rebuild the damaged or destroyed structures and other
improvements, including any improvements or betterments made by Landlord
or Tenant, in accordance with the Final Plans, to the extent permitted by
law. Until the earlier of (i) the date 90 days after the date Tenant's
Facility and the Common Facilities are repaired, rebuilt and put in good
and
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tenantable order, or (ii) the date Tenant reopens the portion(s) of
Tenant's Facility so damaged or destroyed the Annual Fixed Rent and other
charges hereunder, or a just and fair proportion thereof according to the
nature and extent of the damage sustained, shall be abated, but only to
the extent of any rental interruption insurance proceeds actually
received by Landlord. Landlord shall have the right, in lieu of repairing
and restoring the Tenant's Facility or the Common Facilities upon the
occurrence of any casualty which is not insurable under the Required
Insurance, to terminate this Lease, effective as of the date of such
casualty, by written notice to Tenant given within 30 days after the
occurrence of such casualty; provided, however, such right of termination
by Landlord shall only be available to the extent as a result of such
uninsurable casualty all or a portion of Tenant's facility is rendered
unsuitable for use as a movie theatre and the cost of restoration would
exceed 50% of the amount it would cost to replace Tenant's Facility in
its entirety at the time such damage or destruction occurred. Upon any
such termination, all insurance proceeds (if any) payable with respect to
the casualty to the Leased Premises (other than insurance proceeds
payable with respect to Tenant's Property) shall belong to Landlord.
(C) Right to Terminate on Certain Damage. If Tenant's Facility is
damaged or destroyed by fire, casualty or any cause whatsoever (other
than willful misconduct of Tenant) to such an extent that all or a
portion thereof is rendered unsuitable for use as a movie theatre and the
cost of restoration would exceed 50% of the amount it would cost to
replace Tenant's Facility in its entirety at the time such damage or
destruction occurred, and if Tenant has complied with its insurance
obligations under this Lease (including maintaining insurance against
loss of rents by Landlord), Tenant may terminate this Lease
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by notice to Landlord given within 30 days after such damage or
destruction. If Tenant elects to terminate this Lease as provided herein,
Tenant shall pay to Landlord, as a condition upon the effectiveness of
such termination, within 60 days after such notice, an amount equal to
all insurance proceeds for such damage or destruction (except any for
Tenant's Property) together with an amount equal to the difference, if
any, between the amount of insurance proceeds turned over to Landlord and
the net book value of Tenant's Facility as accurately reflected in
Landlord's financial records as of the date of such damage or
destruction. Upon the giving of such notice by Tenant to terminate, and
Tenant's payment of all amounts provided for hereunder, this Lease shall
automatically terminate and the Annual Fixed Rent and other charges
hereunder shall be equitably adjusted as of the date of such destruction.
Notwithstanding anything to the contrary herein, if the provisions of any
Ground Lease or REA require the restoration of the Leased Premises
following the occurrence of any damage or destruction which is insurable
under the Required Insurance or under any insurance which is required
under the provisions of such Ground Lease or REA, then in such event
Tenant shall not have the right to terminate this Lease as provided in
this Article 14, and in such event Tenant shall proceed to restore the
Leased Premises in accordance with the requirements of such Ground Lease
or REA.
(D) Effect of Lease Termination. If Tenant elects to terminate
this Lease as set forth in paragraph (C) of this Article and such notice
of termination is not negated by Landlord as provided in this paragraph,
then this Lease shall terminate as of the date of such damage or
destruction and the Annual Fixed Rent and other charges hereunder shall
be adjusted as of the date of termination. If Tenant so elects to
terminate this Lease as
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provided in paragraph (C) of this Article, Landlord shall nevertheless
have the option of negating such notice of termination by giving notice
to Tenant of such negation, which notice, if given at all, shall be given
within 60 days of Landlord's receipt of Tenant's notice of termination.
If Landlord elects to negate Tenant's notice of termination, then (i)
this Lease shall not terminate, and (ii) Landlord shall, with due
diligence, repair and restore Tenant's Facility in its entirety at
Landlord's sole cost and expense. If Landlord elects to negate Tenant's
notice of termination as provided herein, then all insurance proceeds
payable as a result of such damage or destruction (except for proceeds
payable with respect to Tenant's Property) shall belong to Landlord and
until the earlier of (i) the date 90 days after the date Tenant's
Facility and the Common Facilities are repaired, rebuilt and put in good
and tenantable order, or (ii) the date Tenant reopens the portion(s) of
Tenant's Facility so damaged or destroyed, the Annual Fixed Rent and
other charges hereunder, or a just and fair proportion thereof according
to the nature and extent of the damage sustained, shall be abated.
(E) Election Not to Restore. Anything in this Article to the
contrary notwithstanding, it is agreed that if (i) Tenant's Facility is
damaged or destroyed by fire or other cause to such an extent that the
cost of restoration would exceed 25% of the amount it would have cost to
replace Tenant's Facility in its entirety at the time such damage or
destruction occurred, and (ii) such damage or destruction occurs during
the last 3 years of the initial fixed term hereof or during the last 2
years of any Option Period, then either Landlord or Tenant shall have the
right and option to terminate this Lease by giving the other party to
this Lease notice of such election within 30 days after the date on which
such damage or destruction occurred, and if such notice is given this
Lease shall terminate
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as of the date Tenant vacates Tenant's Facility, which date shall be no
later than 45 days after the giving of such notice, and the Annual Fixed
Rent and other charges hereunder shall be adjusted as of the effective
date of termination; PROVIDED, HOWEVER, that Tenant shall have the right
to nullify any such notice of termination given by Landlord if at the
time such notice is given an option herein granted Tenant to extend the
term of this Lease for an additional period of 5 years or more remains
unexercised and Tenant shall exercise such option within 30 days after
the receipt of such notice from Landlord, in which event Landlord's
notice of such termination shall be of no force or effect and the parties
shall perform the restoration and other work required of them under the
terms of this Article.
(F) Rights to Insurance Proceeds. If this Lease is terminated as in this
Article provided following damage to or destruction of Tenant's Facility and/or
Tenant's Property, the proceeds of all hazard insurance on Tenant's Facility
which is maintained by Tenant or Landlord pursuant to the Article captioned
"Insurance; Indemnity; Waiver of Subrogation and Fire Protection" shall belong
to Landlord, except insurance proceeds in respect of Tenant's Property, which
shall belong to Tenant.
15. Insurance, Indemnity, Waiver of Subrogation and Fire Protection
(A) Property Policy. During the term hereof, Tenant shall at its
expense except as provided below, keep Tenant's Facility (excluding
foundations, footings and underground improvements) insured in the name
of Tenant with Landlord as an additional insured as its interests may
appear against damage or destruction by fire and the perils commonly
covered under a standard policy of fire and extended coverage insurance
(including vandalism and malicious mischief and all physical loss perils)
and so-called difference in
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conditions coverage, as applicable, to the extent of not less than 100%
of the full replacement cost thereof. Such policy also shall cover
floods, when the Leased Premises are located in whole or in material part
in a designated flood plain area and earthquake if the Leased Premises is
located in California (and in other locations if reasonably required by
Landlord and designated on the Commencement Date hereof) and other
similar hazards as may be customary for comparable properties in the
area, and such other "additional coverage" insurance as Landlord or any
holder of a Mortgage, on the Leased Premises may reasonably require,
which at the time is usual and commonly obtained in connection with
properties similar in type of building size and use to Tenant's Facility
and located in the geographic area where the Leased Premises are located.
Landlord agrees that the amounts and coverages maintained by Tenant with
respect to the Leased Premises at the Commencement Date hereof satisfies
the requirements of this Article 15(A) as of the Commencement Date
hereof. Tenant shall be responsible for determining that the amount of
property damage coverage maintained with respect to the Leased Premises
complies with the requirements of this Lease. The proceeds of such
insurance in case of loss or damage shall be held in trust and applied on
account of the obligation of Tenant to repair and/or rebuild the Leased
Premises pursuant to the Article captioned "Damage Clause" to the extent
that such proceeds are required for such purpose, subject to any
conflicting provision in the Ground Lease or the REA, which conflicting
provision (if any) shall control the handling of such insurance proceeds.
The insurance required to be carried by Tenant under this paragraph and
paragraph (C) of this Article (i) may be covered under a so-called
"blanket" policy covering other operations of Tenant and Affiliates, so
long as the amount of coverage available under said "blanket" policy with
respect to the Leased
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Premises, or Tenant's liability under this Lease, at all times meets the
requirements set forth in this Lease, and (ii) shall be evidenced by a
certificate of insurance from Tenant's insurer. Such insurance
certificate with respect to property insurance shall be issued on ACORD
27 or equivalent, and with respect to both property insurance and
liability insurance, in a form acceptable to Landlord. Upon request,
Tenant shall name the holder of any Mortgage on Tenant's Facility
pursuant to a standard mortgagee, additional insured or loss payee clause
as such holder shall elect with respect to the foregoing property
insurance, provided such holder agrees with Tenant in writing to disburse
such insurance proceeds to Tenant for, and periodically during the course
of, repair and restoration of Tenant's Facility as set forth in this
Lease.
(B) Liability Insurance; Tenant Negligence. Tenant will, subject
to the provisions of paragraph (D) of this Article, and subject to the
provisions of paragraph (D) of the Article captioned "Governmental and
Ground Lease Compliance," indemnify and save harmless Landlord, its
officers, agents and servants, from and against any and all claims,
actions, liability and expense in connection with loss of life, bodily
injury and/or damage to property: (i) arising from or out of any
occurrence in, upon or at Tenant's Facility, the Leased Premises or the
occupancy or use by Tenant of Tenant's Facility, the Leased Premises or
any part thereof, unless the same is caused by the willful or negligent
act or omission of Landlord; or (ii) occasioned wholly or in part by any
willful or negligent act or omission of Tenant, its agents, employees,
servants, subtenants, lessees or concessionaires. If any action or
proceeding is brought against Landlord, its officers, agents or servants
by reason of any of the aforementioned causes, Tenant, upon receiving
notice thereof from Landlord, agrees to defend such action or proceeding
by adequate
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counsel at its own expense. Tenant agrees to insure the foregoing
obligation by contractual endorsement under a commercial general public
liability policy (including personal injury and property damage and which
may be a blanket policy) to be maintained by Tenant with combined single
limits of not less than $10,000,000.00. To the extent that Tenant does
not self-insure, Tenant shall furnish Landlord certificates of insurance
from Tenant's insurer evidencing that such insurance is in full force and
effect at all times. Tenant shall cause Landlord to be named as an
additional insured as its interests may appear on all policies of
liability insurance maintained by Tenant (including excess liability and
umbrella policies) with respect to the Leased Premises.
(C) Workers' Compensation Insurance. Tenant shall maintain, with
respect to its operations and all of its employees at the Leased
Premises, a policy or policies of workers' compensation insurance, in
accordance with and in the amounts required by Laws.
(D) Liability Insurance; Landlord Negligence. Landlord will,
subject to the provisions of paragraph (E) of this Article, and subject
to the provisions of paragraph (D) of the Article captioned "Governmental
and Ground Lease Compliance," indemnify and save harmless Tenant, its
officers, agents and servants, from and against any and all claims,
actions, suits, judgments, decrees, orders, liability and expense in
connection with loss of life, bodily injury and/or damage to property
occasioned wholly or in part by any willful or negligent act or omission
of Landlord, its agents, employees or servants. If any action or
proceeding is brought against Tenant, its agents or servants by reason of
any of the aforementioned causes, Landlord, upon receiving written notice
thereof from Tenant in the manner provided herein, agrees to defend such
action or proceeding by adequate counsel at its own expense. Landlord
agrees to insure the foregoing obligation by contractual
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endorsement under a commercial general public liability policy (including
personal injury and property damage and which may be a blanket policy) to
be maintained by Landlord (on which Tenant is named as an additional
insured) with single limits of not less than $5,000,000.00. Landlord
shall provide Tenant certificates of insurance from Landlord's insurer on
ACORD 27 or equivalent evidencing that the insurance so required to be
maintained by Landlord is in full force and effect at all times. Landlord
agrees that any policy of insurance hereunder shall provide that it will
not terminate or expire, or be amended to reduce the amount or scope of
the coverage provided thereby, except upon 10 days' prior written notice
to Tenant.
(E) Release; Waiver of Subrogation. Anything in this Lease to the
contrary notwithstanding, it is agreed that each party (the "Releasing
Party") hereby releases the other (the "Released Party") from any
liability which the Released Party would, but for this paragraph, have
had to the Releasing Party during the term of this Lease resulting from
any accident or occurrence or casualty (i) which is covered by Tenant's
Required Insurance hereunder, or (ii) which is or would be covered by a
fire or "all risk" property insurance policy in use in the state in which
the Leased Premises is located, whether or not the Releasing Party is
actually maintaining such an insurance policy, or (iii) which is covered
by any other casualty or property damage insurance being carried by the
Releasing Party at the time of such occurrence, which casualty may have
resulted in whole or in part from any act or neglect of the Released
Party, its officers, agents or employees; PROVIDED, HOWEVER, the release
hereinabove set forth shall become inoperative and null and void if the
Releasing Party wishes to place such insurance with an insurance company
which (y) takes the position that the existence of such release vitiates
or would
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substantially adversely affect any policy so insuring the Releasing Party
and notice thereof is given to the Released Party, or (z) requires the
payment of a higher premium by reason of the existence of such release,
unless in the latter case the Released Party within 20 days after notice
thereof from the Releasing Party pays such increase in premium.
(F) Self-Insure; Deductibles; Notice. With respect to the casualty
and property damage insurance coverages to be provided by Tenant
hereunder, Tenant may reasonably determine to partially self-insure
and/or purchase insurance policies required hereunder with such
deductibles as is customary for the risks involved as long as Tenant can
reasonably demonstrate to Landlord its ability to satisfy such deductible
or amount of self insurance. In no event shall the amount of Tenant's
deductible and self-insurance with respect to the Tenant's Facility (both
liability and property) exceed 1% of the consolidated net worth of
Tenant's Parent, as reflected on the most recent audited balance sheet of
Tenant's Parent. Tenant agrees that each policy of Required Insurance
shall provide that it will not terminate or expire, or be amended to
reduce the amount or scope of the coverage provided thereby, except upon
10 days' prior written notice to Landlord. 16. Indemnification Generally.
In addition and subject to the parties' respective
indemnification obligations set forth elsewhere in this Lease including those in
the Article captioned "Insurance, Indemnification, Waiver of Subrogation and
Fire Protection", Tenant agrees to indemnify and save harmless Landlord, its
officers, agents and servants from and against all liabilities, costs and
expenses (including reasonable attorneys' fees and expenses) and all actual or
consequential damages imposed upon or asserted against the Landlord as owner of
the Leased Premises on account of, (i) any use, misuse, non-use, condition,
maintenance or repair by Tenant of the Leased Premises; (ii) any impositions
which are the obligation of Tenant
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to pay pursuant to the applicable provisions of this Lease; (iii) any failure on
the part of Tenant to perform or comply with any other of the terms of this
Lease or any sublease; (iv) liability the Landlord may incur as a result of any
permitted contest by Tenant under the Lease; (v) any liability Landlord may
incur or suffer as a result of Laws, including the ADA (except those Laws
referred to in (vi) below), affecting the Leased Premises; (vi) accident, injury
to or death of any person or damage to property on or about the Leased Premises;
and (vii) any liability Landlord may incur or suffer as a result of any Laws
relating to the protection of human health or the environment in respect to the
Leased Property which liability arises as a result of any event or occurrence
when Tenant or any of its affiliates was an owner of the Leased Premises or a
tenant of the Leased Premises pursuant to a Ground Lease or is the Tenant
hereunder which does not result from the willful actions or negligence or
omissions of the Landlord or its agents or invitees. If at any time any claims,
costs, demands, losses or liabilities are asserted against Landlord by reason of
any of the matters as to which Tenant indemnifies Landlord hereunder, Tenant
will, upon written notice from Landlord given in accordance with the provision
hereof, defend any such claims, costs, demands, losses or liabilities at
Tenant's sole cost and expense by counsel reasonably acceptable to Landlord.
Landlord agrees to indemnify and save harmless, Tenant from and against all
liabilities, costs and expenses (including reasonable attorneys' fees) imposed
upon or asserted against Tenant as a result of any failure on the part of
Landlord to perform or comply with any of the terms of this Lease.
17. Tenant to Pay Taxes.
Tenant shall pay all Taxes assessed or charged against the
Leased Premises or any part thereof as provided in the Rent and Expense Rider.
18. Alterations and Tenant's Liens.
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(A) Title to Tenant's Alterations. Subject to the provisions of
the Article captioned "Fixtures," any alterations, changes, improvements
and additions made by Tenant shall immediately become the property of
Landlord and shall be considered a part of Tenant's Facility.
(B) No Tenant Liens. Tenant shall not permit any mechanic's,
materialman's or other similar lien to be foreclosed against the Leased
Premises by reason of work, labor, services or materials performed by or
furnished to Tenant or anyone holding any part of the Leased Premises
under Tenant. If any such lien shall at any time be filed, Tenant may
contest the same in good faith but Tenant shall, prior to foreclosure
thereof, cause such lien to be released of record by payment, bond, order
of a court of competent jurisdiction or otherwise. Nothing contained in
this Lease shall be construed as a consent on the part of Landlord to
subject Landlord's estate in the Leased Premises to any lien or liability
under the lien laws of the state in which the Leased Premises are
located. Notwithstanding the foregoing, if any mechanics', materialmen's
or other similar lien is filed against the Leased Premises, and the
amount of such lien claim exceeds $250,000, then Tenant shall, within 10
days after the filing thereof, provide to Landlord a bond in the amount
of 125% of the amount of such lien claim, or other security reasonably
satisfactory to Landlord, protecting Landlord from loss or liability by
reason of such lien. Tenant hereby covenants and agrees to indemnify and
hold harmless Landlord from and against any and all claims, costs,
demands, losses or liabilities (including attorneys' fees) which Landlord
may suffer or incur by reason of any such mechanics', materialmen's or
other similar lien.
(C) Landlord Elective Improvements. During the term of this Lease, Landlord
shall not be required to build or rebuild any improvements to the Leased
Premises or
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Tenant's Facility, or to make any repairs, replacements, alterations,
restorations or renewals thereto. In the event that Landlord should, in
its sole discretion, elect to make capital improvements to the Leased
Premises, it may only do so with Tenant's consent, which may be given or
withheld in Tenant's sole discretion, and it is understood and agreed
that Landlord will generally condition any such election on an increase
in the Annual Fixed Rent to reflect such expenditures. 19. Tenant's
Signs.
(A) Location and Type. Tenant shall have the right to maintain the
following signs in accordance with and subject to any applicable
provisions of the Site Plan, the Ground Lease, the REA and Laws:
(1) Illuminated signs on the exterior walls of Tenant's
Facility and on the theatre canopy or marquee.
(2) Signs on the interior or exterior of any windows of Tenant's Facility.
(3) Easel or placard signs within the lobby entrance or on sidewalks
immediately in front of Tenant's Facility, provided the same do not unreasonably
interfere with pedestrian traffic.
(4) Poster cases within the lobby of Tenant's Facility and
on the exterior walls of Tenant's Facility.
(5) Illuminated roadside sign(s) and attraction board ("Tenant's Pylon").
(B) Design. The design of all signs presently located on the Leased Premises is
hereby approved by Landlord with the design of all future signs which Tenant
elects to construct pursuant to clauses (1) and (5) of paragraph (A) of this
Article (such present and future signs referred to as "Tenant's Signs") to be
subject to Landlord's approval, which
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Landlord agrees not to unreasonably withhold or delay (Landlord hereby
approving the Tenant's Signs which are located on the Leased Premises on
the Lease Commencement Date), shall advertise Tenant's business in
Tenant's Facility and shall be constructed and maintained in good repair
at Tenant's expense. Tenant shall pay the cost of electricity consumed in
illuminating Tenant's Signs.
(C) Access to Tenant's Pylon. If Tenant's Pylon is located outside
the Leased Premises, Landlord hereby grants to Tenant such easement
rights as Landlord may have under any REA, which shall be appurtenant to
the Leased Premises, for the purpose of enabling Tenant to have access to
Tenant's Pylon, to maintain and service same and to insure the continued
availability of power thereto.
(D) Loss of Tenant's Pylon. If Tenant shall be deprived of
Tenant's Pylon as the result of a condemnation, Landlord shall cooperate
with Tenant, at Tenant's cost and expense, (a) to make available a
mutually agreeable site (and power thereto) for a substitute pylon within
the Leased Premises or any applicable Entire Premises strategically
located so as to be visible to automobile traffic on highways adjoining
Leased Premises or any applicable Entire Premises or at entrances to the
Entire Premises, and (b) to Tenant in obtaining, at Tenant's cost and
expense, easements similar to those described in paragraph (C) of this
Article with respect to the new site. Nothing herein shall obligate
Landlord to provide to Tenant, as the location for Tenant's Pylon, any
portion of the Entire Premises which Landlord reasonably determines to
have value as a developable parcel for another tenant or purchaser, or to
restrict Landlord's ability to sell, lease or develop the Entire Premises
in such manner as Landlord determines to be appropriate.
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(E) Protection of Signs Visibility. Landlord shall not erect or
permit to be erected any sign or advertising device on the roof or
exterior walls of Tenant's Facility, nor any landscaping, signs or other
obstructions on the Leased Premises which would block the view of
Tenant's Pylon from adjoining streets.
(F) Interior Signs. Nothing in this Lease shall restrict Tenant's
unlimited right to maintain signs on the interior of Tenant's Facility.
20. Condemnation and Economic Obsolescence.
(A) In General. If any material part of the Leased Premises
(meaning any material part of the Tenant's Facility) shall be taken in
any proceeding by any Governmental Authority by condemnation or
otherwise, or be acquired for public or quasi-public purposes, or be
conveyed under threat of such taking or acquiring (which Landlord shall
not do without Tenant's prior consent), Tenant shall have the option of
terminating this Lease by notice to Landlord of its election to do so
given on or before the date which is 3 months after Tenant shall have
been deprived of possession of the condemned property, and upon the
giving of such notice, this Lease shall automatically terminate and the
Annual Fixed Rent and other charges hereunder shall be adjusted as of the
date of such notice. In the event a material part of the Leased Premises
(meaning any material part of the Tenant's Facility) is so taken and
Tenant elects not to terminate this Lease, or in the event of a taking of
less than a material part of the Leased Premises, this Lease shall
terminate as to the portion of the Leased Premises so taken, and Tenant
shall, to the extent and making use of the condemnation award, restore
Tenant's Facility to a complete unit as similar as reasonably possible in
design, character and quality to the building which existed before such
taking. In the event Tenant's Facility is partially taken and this Lease
is not
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terminated, the Annual Fixed Rent and other charges thereafter payable
hereunder shall be equitably reduced based on the value to Tenant of the
remaining premises. If Tenant shall perform restoration work under this
paragraph, so much of the Annual Fixed Rent and other charges payable by
Tenant as is fairly allocable to the space which is to be restored shall
abate until such restoration work shall have been completed. Any
restoration work to be performed pursuant to this paragraph shall be
completed in accordance with plans and specifications which shall have
been approved by Landlord and Tenant, such approvals not to be
unreasonably withheld. In any such proceeding whereby all or part of the
Leased Premises is taken, whether or not Tenant elects to terminate this
Lease, each party shall be free to make claim against the condemning
authority for the amount of the actual provable damage done to each of
them by such proceeding. If the condemning authority shall refuse to
permit separate claims to be made, then Landlord shall prosecute with
counsel reasonably satisfactory to Tenant the claims of both Landlord and
Tenant, and the proceeds of the award, after payment of Landlord's
reasonable costs and attorney's fees incurred in such proceeding, shall
be divided between Landlord and Tenant in a fair and equitable manner;
provided, however, in the event of a condemnation which results in the
termination of this Lease, Tenant shall be entitled to its portion of the
condemnation award only so long as the amount of the award paid to the
Landlord is equal to the net book value of the property taken, as
reflected on the Landlord's financial statements on the date of the
condemnation.
(B) Loss of Parking. If (i) any material part of the parking areas
serving the Leased Premises, whether located upon the Leased Premises or
on a parcel other than the Leased Premises are taken in any proceeding by
any Governmental Authority, and as a result of
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such taking (a) the total number of parking spaces available for use by
patrons of the Leased Premises is reduced by 20% or more, and the number
of parking spaces available for use by patrons of the Leased Premises
does not satisfy the zoning requirements applicable to the Leased
Premises, taking into account the total parking requirements of the
Shopping Center or (b) by reason of any such taking in Tenant's
reasonable judgment, Tenant's ability to conduct its operations on the
Leased Premises is materially adversely affected or (c) any means of
access to the Leased Premises or the parking areas serving the Leased
Premises are terminated, lost or materially altered by reason of any such
taking, and such termination, loss or alteration results, in Tenant's
reasonable judgment, in a material adverse effect upon Tenant's use and
occupancy of the Leased Premises or Tenant's business operation thereon,
then in any of such events Tenant shall have the option of terminating
this Lease by notice to Landlord of its election to do so given on or
before the date which is 3 months after the occurrence of such event, and
this Lease shall automatically terminate 30 days after the giving of such
notice and the Annual Fixed Rent and other charges hereunder shall be
adjusted as of that date; provided, however, that Tenant's right to
terminate this Lease shall be nullified if Landlord shall (i) on or
before the 30th day after the giving of Tenant's notice, give Tenant
notice of Landlord's intention to forthwith provide a substitute parking
area contiguous to the Leased Premises or Parking Parcel and the
remaining parking area, which substitute parking area must be reasonably
acceptable to Tenant and be of comparable quality and equal in size to
the area taken, and (ii) within 6 months after so notifying Tenant,
subject to Force Majeure, actually provide such substitute parking area
and enter into a written agreement amending this Lease to include said
substitute parking area as part of the parking area with respect to which
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Tenant is granted parking rights provided for in the Article captioned
"Common Facilities."
(C) Temporary Taking Awards. If by reason of a taking Tenant shall
be temporarily deprived in whole or in part of the use of Tenant's
Facility or any part thereof, the entire award made as compensation
therefor shall belong to Tenant, and there shall be no abatement of the
Annual Fixed Rent payable hereunder.
(D) No Taking by Landlord Action. Landlord shall not initiate or
take any action seeking a public or private taking of Tenant's Facility
or of any part of the Leased Premises or any applicable Entire Premises.
(E) Economic Obsolescence. From and after the expiration or
earlier termination of Tenant's Operating Covenant, Tenant,
notwithstanding anything in this Lease to the contrary, may elect to
terminate this Lease upon a determination by Tenant, reasonably
exercised, that the Leased Premises have become economically obsolete to
Tenant due to a change in circumstances from those which existed at the
Commencement Date, including, without limitation, circumstances relating
to the competitive market or the condition of or development (or lack
thereof) on property adjacent to or in the vicinity of the Leased
Premises. If said election is made by Tenant, this Lease shall terminate
90 days from receipt by Landlord of such election and the obligation to
pay Annual Fixed Rent or Percentage Rent shall end on such termination
date. In the event of and as a condition to such termination, Tenant
shall pay to Landlord the greater of (i) Landlord's net book value of the
Leased Premises or (ii) the appraised value of the Leased Premises based
on the capitalized value of Tenant's remaining rental payments under this
Lease during the applicable Fixed Term or Extended Term. The appraised
value shall be determined by an
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independent appraiser mutually agreeable to Landlord and Tenant. If
Landlord and Tenant are unable, within 30 days after Landlord's delivery
of its notice electing to terminate this Lease as provided in this
Section 20(E), to agree upon an appraiser to provide such appraisal, then
Landlord and Tenant shall each select an appraiser, and the two (2)
appraisers so selected shall upon an appraiser to provide such valuation.
All appraisers selected shall, unless Landlord and Tenant agree
otherwise, be members of the American Institute of Appraisers. 21. Other
Tenancies; REA. If the Leased Premises are a part of a larger Entire
Premises and if there is a reciprocal easement agreement, operating agreement or
similar agreement encumbering and/or benefiting all or any portion of the Entire
Premises (an "REA"), then Landlord hereby agrees with Tenant with respect to the
REA as follows:
(A) Landlord will not approve or agree to any amendments of the
REA which materially derogates the rights granted to Landlord thereunder
without Tenant's prior consent.
(B) Landlord hereby agrees to use its reasonable efforts, at
Tenant's expense, to enforce the cross-easement rights, operating
covenants and other rights contained in the REA on Tenant's behalf, and
if Landlord fails to proceed with its best reasonable efforts to enforce
said rights on Tenant's behalf within 30 days after notice thereof from
Tenant, Landlord agrees that Tenant shall have the right to enforce said
rights under the REA directly and in the name of and on behalf of
Landlord if required (all at Landlord's expense), Landlord hereby
conferring such enforcement rights unto Tenant.
(C) Concurrently with or within 30 days after the execution of
this Lease, Landlord shall reasonably cooperate with Tenant at Tenant's
expense in securing an agreement from
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the other party or parties to the REA pursuant to which such other parties
confirm for the benefit of Tenant that the REA is in full force and effect
without default thereunder.
22. Common Facilities. If the Leased Premises are a part of a larger
premises and there are Common Facilities covered by an REA that affect Tenant's
use of the Leased Premises, Landlord hereby agrees to reasonably cooperate with
Tenant and/or allow Tenant to enforce against any responsible person or entity,
if any, at Tenant's cost and expense, any of the rights with respect to the
Common Facilities which Landlord may have under such REA benefiting the Leased
Premises.
23. Options to Extend; Right of First Offer to Lease by Tenant.
(A) Options Periods. Provided Tenant is not in default under this
Lease, Tenant shall have the right to extend the term of this Lease for
the Option Periods from the date upon which the term would otherwise
expire upon the same terms and conditions as those herein specified. If
Tenant elects to exercise its option for any Option Period, it shall,
subject to the provisions of paragraph (B) of this Article, do so by
giving Landlord notice of such election at least 6 months before the
beginning of the Option Period for which the term hereof is to be
extended by the exercise of such option. If Tenant gives such notice, the
term of this Lease shall be automatically extended for the Option Period
covered by the option so exercised without execution of an extension or
renewal lease.
(B) Protection Against Forfeiture. It is the intention of Landlord
and Tenant to avoid forfeiture of Tenant's right to extend the term of
this Lease under any of the extension options set forth in paragraph (A)
of this Article through failure to give notice of exercise thereof within
the time prescribed. Accordingly, if Tenant shall fail to give notice of
exercise of any such option within the time prescribed in paragraph (A)
of this Article,
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then the time to give such notice shall be deemed extended for an
additional period commencing on the last day on which such notice by
Tenant may be timely given pursuant to paragraph (A) above and ending 30
days after the date Landlord gives Tenant notice of Tenant's failure to
exercise such option within the time prescribed. If Tenant exercises any
such option after the date prescribed in paragraph (A) above, but within
the extended time permitted above, the extended term to which such option
relates shall commence, or shall be deemed to have commenced, at the time
it would have commenced if such notice had been given within the time
prescribed in paragraph (A) above; otherwise, any period during which
Tenant remains in possession after the expiration of the term hereby
created, or as extended by the exercise of a previous option or options,
shall be subject to the provisions of the Article captioned "Continued
Possession of Tenant." The foregoing provisions of this Section 23(B)
shall be inoperative, and the time period for Tenant's exercise of each
of its options to renew hereunder shall expire as of that date which is 6
months prior to the expiration of the then-current term of this Lease if
Landlord shall give Tenant notice of Tenant's right to renew this Lease
not earlier than 12 months, and not later than 7 months, prior to the
expiration of the then-current term of this Lease.
(C) Right of First Offer to Lease by Tenant. Upon the expiration
of the Lease Term and provided that Tenant has exercised each Option
Period Option and no event of default then exists beyond any applicable
notice and cure period, Tenant shall have a right of first offer
("Tenant's Right of First Offer to Lease") to lease the Leased Premises
upon the same terms and conditions as Landlord, at its election, intends
to offer to lease the Leased Premises to a third party; provided,
however, Tenant's Right of First Offer to Lease shall only be available
if Landlord intends to offer to lease the Leased Premises to a
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third party for use as a movie theatre at a rate less than the Annual
Fixed Rent or Percentage Rent then payable under this Lease. Tenant shall
be entitled to exercise Tenant's Right of First Offer to Lease only if at
the time of the giving of such notice and at the time of the commencement
of the applicable term no event of default then exists beyond any
applicable notice and cure period and only if Landlord elects to lease
the Leased Premises at the expiration of the Lease Term. Not more than
nine (9) months and not less than three (3) months prior to the
expiration of the Lease Term, Landlord shall, if applicable, give Tenant
written notice of its intent to lease the Leased Premises and shall
indicate the terms and conditions upon which Landlord intends to lease
the Leased Premises.
Tenant shall thereafter have a period of 20 days to elect by
unequivocal written notice to Landlord to lease the Leased Premises on
the same terms and conditions as Landlord intends to offer to a third
party; provided prior to Tenant's acceptance Landlord shall retain the
right to elect not to lease the Leased Premises by giving Tenant written
notice thereof. If Tenant elects not to lease the Leased Property then
Landlord shall be free to lease the Leased Premises to a third party.
However, if the base rent for such proposed lease is reduced by five (5%)
or more as compared to the base rent included in the lease that Tenant
rejected, then Landlord shall again offer Tenant the right to acquire the
Leased Premises upon the same terms and conditions, provided that Tenant
shall have only 10 days to accept such offer. Leased Premises as used in
this Article shall include any substantial portion of the entire Leased
Premises.
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24. Common Area Charge.
If the Leased Premises are part of a larger premises for which common
area charges under an REA are payable for the operation and maintenance of
Common Facilities, Tenant shall pay such charges and perform all of Landlord's
obligations under the REA.
25. Other Theatres and Restrictions.
(A) If at any time during the term hereof a movie theatre, other
than the one operated in Tenant's Facility, is open for business within
the Entire Premises or on premises which are (i) owned or controlled
(directly or indirectly) by Landlord or by any officer or partner of
Landlord, and (ii) located within 500 feet from any boundary line of the
Entire Premises, then in addition to Tenant's other remedies (including
injunctive relief), the Annual Fixed Rent hereunder shall be abated
during the continuance of the operation of such movie theatre, in lieu of
the Annual Fixed Rent otherwise payable by Tenant, Tenant shall pay
Landlord an amount equal to the lesser of (i) Percentage Rent only, or
(ii) the Annual Fixed Rent otherwise payable by Tenant, reduced by an
amount equal to the product obtained by multiplying the number of seats
in such other theatre by the quotient obtained by dividing the amount of
the Annual Fixed Rent then payable under this Lease by the number of
seats then in Tenant's building.
(B) Landlord will not use and will use its reasonable efforts to
prevent any other tenant from using, any other premises or equipment
owned or controlled by Landlord and located on the Entire Premises in any
manner that would result in any noise or vibration interfering with the
acoustics required by Tenant in its use of Tenant's Building or would
result in any offensive odors penetrating Tenant's Building.
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(C) Landlord will not sell or permit to be sold video cassettes or
discs or any candy, popcorn or other refreshments generally sold in
theatre concession stands in or from any premises owned or leased by
Landlord located within 150 feet from any wall of Tenant's Facility or in
or from any part of the parking area or other Common Facility on the
Entire Premises owned or leased by Landlord; provided, however,
notwithstanding the foregoing, there shall be no prohibition on the
incidental sale of video cassettes or discs or any candy, popcorn or
other refreshments generally sold in theatre concession stands or a
restaurant use in or from any of the land parcels adjacent to the Leased
Premises acquired by Landlord at or about the Commencement Date of this
Lease. In no event shall Landlord lease or permit the occupancy of any
premises located in the Entire Premises or any out parcel adjacent to the
Leased Premises and owned by Landlord for any of the following uses: (a)
funeral home; (b) bookstore or other establishment engaged in the
business of selling, exhibiting or delivering pornographic or obscene
materials; (c) so-called "head shop;" (d) bowling alley; (e) skating
rink; (f) health club or exercise facility; or (g) game room or arcade.
26. No Merchants Association.
Tenant shall have no obligation to be a member of or pay any
dues or other amounts to any merchants association associated with any larger
Entire Premises of which the Leased Premises may be a part or otherwise, unless
required to do so under the REA or the Ground Lease.
27. Tenant's Covenant to Operate.
(A) In General. So long as Landlord shall not be in default under this
Lease, Tenant will, except when prevented from so doing by Force Majeure or by
other causes
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beyond its reasonable control (including the unavailability of film) and
subject to the provi sions of the Article captioned "Subletting and
Assigning," during Tenant's Operating Period, operate or cause to be
operated a movie theatre complex in Tenant's Facility (such covenant
being herein called "Tenant's Operating Covenant"). Tenant shall operate
Tenant's Facility in an efficient and professional manner.
(B) Tenant's Right to Control Operations. Nothing contained in
this Lease or in rules or regulations (if any) promulgated by Landlord
shall be deemed in any way to (i) regulate the manner of operation by
Tenant of its business in Tenant's Facility and/or the hours and/or days
of such operation, provided that Tenant agrees that it will operate its
business in the Tenant's Facility during at least the same general hours
and days of operation as other theatre operators operating other similar
facilities located within the Metropolitan Area, or (ii) require Tenant
to operate more than a majority of its theatre auditoriums, or (iii) give
Landlord any right, express or implied, of censorship over any
attractions exhibited in Tenant's Facility or over the content of
Tenant's advertising.
(C) No Other Operating Requirements. Except as specifically provided in
paragraph (A) of this Article, Tenant shall have no obligation whatsoever,
either express or implied, to at any time operate or otherwise use Tenant's
Facility.
28. Estoppel Certificate; Attornment and Priority of Lease; Subordination.
(A) Estoppel Certificates. Each party agrees, within 20 days after
request by the other party, to execute, acknowledge and deliver to and in
favor of the proposed holder of any Mortgage or purchaser of the Leased
Premises, any encumbrance holder of Tenant or any proposed sublessee of
Tenant or assignee of Tenant's interest in this Lease, an estoppel
certificate stating: (i) whether this Lease is in full force and effect;
(ii) whether
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this Lease has been modified or amended and, if so, identifying and
describing any such modification or amendment; (iii) the date to which
rent and any other charges have been paid; and (iv) whether such party
knows of any default on the part of the other party or has any claim
against the other party and, if so, specifying the nature of such default
or claim.
(B) Attornment by Tenant. Tenant shall, in the event any
proceedings are brought for the foreclosure of, or in the event of the
exercise of the power of sale under, any Mortgage prior in lien to this
Lease made by Landlord, attorn to the purchaser upon any such foreclosure
or sale and recognize such purchaser as Landlord under this Lease,
provided such purchaser assumes in writing Landlord's obligations under
this Lease.
(C) Subordination/Non-Disturbance. Upon request of the holder of
any Mortgage, Tenant will subordinate its rights under this Lease to the
lien thereof and to all advances made or hereafter to be made upon the
security thereof, and Tenant shall execute, acknowledge and deliver an
instrument effecting such subordination; PROVIDED, HOWEVER, as a
condition of any such subordination, Landlord shall obtain and deliver to
Tenant within 20 days after demand by Tenant an agreement, in recordable
form, from the holder of any Mortgage to which this Lease is subordinate
containing a covenant binding upon the holder thereof to the effect that
as long as Tenant shall not be in default under this Lease, or, if Tenant
is in default hereunder, as long as Tenant's time to cure such default
has not expired, this Lease shall not be terminated or modified in any
respect whatsoever, nor shall the rights of Tenant hereunder or its
occupancy of the Leased Premises be affected in any way by reason of such
Mortgage or any foreclosure action or other proceeding that may be
instituted in connection therewith, and that, except
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to the extent that the holder of such Mortgage is required to do so to
effectively foreclose such Mortgage, Tenant shall not be named as a
defendant in any such foreclosure action or other proceeding.
(D) Form of Documents. Without limiting the foregoing provisions
of this Article, all documents requested by either party in order to
effectuate the provisions of this Article shall be in form and substance
reasonably satisfactory to the other party to the extent not inconsistent
with such provisions. 29. Right of First Refusal to Purchase by Tenant.
(A) Grant of Right of First Offer. Subject to the terms and
conditions set forth in this Article 29, Landlord hereby grants to Tenant
a right of first offer ("First Offer Right") relating to the Transfer of
any or all of the Leased Premises. If, at any time during the Right to
Purchase Period, Landlord desires to Transfer all or any portion of the
Leased Premises (the "Offered Property"), Landlord shall first deliver to
Tenant written notice (the "Notice of Transfer"), which Notice of
Transfer shall state Landlord's desire to Transfer the Offered Property
and contain an accurate description of the Offered Property and its
proposed operations.
(B) Election to Offer. (i) If Tenant elects to make an offer to
purchase the Offered Property, Tenant shall deliver to Landlord within 60
days following the date the Notice of Transfer was received by Tenant
(the "Offer Date") a written offer (the "Offeree Offer"), which Offeree
Offer shall offer to purchase the Offered Property on the terms and
conditions, including price, timing and lease terms (if applicable),
specified therein. The Offeree Offer shall disclose all material facts
relating to the proposed transaction and, at Tenant's option, may include
a form purchase agreement
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or lease, as applicable. Each Offeree Offer shall be an irrevocable
commitment by Tenant to purchase the Offered Property on the terms and
conditions set forth therein.
(ii) If Tenant does not elect to make an offer to purchase the
Offered Property by the Offer Date or if Tenant makes an offer to
purchase the Offered Property by the Offer Date and Landlord elects not
to Transfer the Offered Property on the terms offered by Tenant, Landlord
(X) shall be under no obligation to Transfer any portion of the Offered
Property to any person, unless Landlord so elects, and (Y) may, within a
period of 6 months from and after the Offer Date, solicit offers relating
to the Transfer of such Offered Property; provided, however, any Transfer
of the Property within a period of 6 months from and after the Offer Date
not on terms and conditions and at a price more favorable to those
offered by Tenant shall be subject to the First Refusal Right set forth
in subparagraph D of this Article 29. The First Offer Right granted to
Tenant under the terms and conditions of this Article 29 shall revive in
the event that Landlord fails to Transfer the Offered Property within the
6 months from and after the Offer Date.
(iii) Notwithstanding Tenant's election not to make an offer
to purchase the Offered Property by the Offer Date or Landlord's election
not to Transfer the Offered Property on the terms offered by Tenant,
Landlord shall be obligated to submit a Grantor Offer to Tenant following
receipt of a Bona Fide Offer from a Proposed Transferee pursuant to
paragraph D of this Article 29.
(C) Acceptance of Offeree Offer. If Landlord elects to Transfer
the Offered Property on the terms offered by the Tenant, Landlord shall
deliver in writing its election to Transfer the Offered Property to
Tenant within 30 days following the date
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the Offeree Offer was received by Landlord. Such communication shall,
when taken in conjunction with the Offeree Offer, be deemed to constitute
a valid, legally binding and enforceable agreement for the Transfer of
the Offered Property. Such agreement may be evidenced by, but, unless
otherwise agreed, shall not be subject to, execution of a purchase
agreement or lease, as applicable.
(D) Grant of Right of First Refusal. Subject to the terms and
conditions set forth in this Article 29, Landlord hereby grants to Tenant
a right of first refusal ("First Refusal Right") relating to the Transfer
any or all of the Leased Premises. If, at any time during the Right to
Purchase Period, Landlord desires to Transfer any of the Leased Premises
(the "Offered Property") pursuant to a bona fide offer (the "Bona Fide
Offer") from a third party (the "Proposed Transferee"), Landlord shall
first deliver to Tenant a written offer (the "Grantor Offer"), which
Grantor Offer shall offer to Transfer the Offered Property to the Tenant
on terms and conditions, including price, timing and lease terms (if
applicable), not less favorable to the Tenant than the terms and
conditions which Landlord proposes to Transfer such Leased Premises to
the Proposed Transferee. The Grantor Offer shall disclose the identity of
the Proposed Transferee, to the extent known by Landlord, the person or
persons, if any, that control such Proposed Transferee, the terms and
conditions, including price, timing and lease terms (if applicable), of
the proposed Transfer, any proposed form purchase agreement or lease and
any other material facts relating to the proposed transaction. Each
Grantor Offer is an irrevocable commitment by Landlord to sell the
Offered Property on the terms and conditions set forth therein.
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(E) Confirmation of Bona Fide Offer. The Tenant shall be permitted
to confirm that the Bona Fide Offer is firm and subject only to
conditions that could reasonably be expected to be satisfied, by (i)
review of the documents involved in such Bona Fide Offer and (ii)
requiring that the Landlord cause the Proposed Transferee to submit
evidence reasonably satisfactory to the Tenant of financing for such
purchase, but only to the extent that the Bona Fide Offer has a financing
contingency. If review of such documents and of such evidence of
financing by the Tenant would violate a confidentiality obligation of
Landlord to the Proposed Transferee, or of the Proposed Transferee to any
third party, Landlord shall designate a recognized accounting or
investment banking firm or similar third party reasonably satisfactory to
the Tenant, who shall at Tenant's expense (i) certify that the terms set
forth in the written documents are as described in the Offer or are no
more favorable to the Proposed Transferee than the terms described in the
Offer, and (ii) certify that financing has been obtained, subject to no
condition which, in such third party's reasonable judgment, is likely to
be unsatisfied, or based on the evidence provided, such third party
expects that financing for the sale to the Proposed Transferee will be
obtained.
(F) Acceptance of Grantor Offer. (i) If Tenant elects to purchase the
Offered Property on the terms set forth in the Grantor Offer, Tenant shall
deliver in writing its election to purchase the Offered Property to Landlord
within 45 days following the date the Grantor Offer was received by the Tenant
(the "Acceptance Date"), but not less than five days prior to the expiration
date of the Bona Fide Offer, provided such election in any circumstance will not
be due prior to the expiration of 10 business days following the date the
Grantor's Offer was received by Tenant. Such
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communication shall, when taken in conjunction with the Grantor Offer, be
deemed to constitute a valid, legally binding and enforceable agreement
for the Transfer of the Leased Premises. Such agreement may be evidenced
by, but, unless otherwise agreed, shall not be subject to, execution of a
purchase agreement or lease, as applicable.
(G) If Tenant does not elect to purchase the Offered Property by
the Acceptance Date, Landlord (i) shall be under no obligation to
Transfer any portion of the Offered Property to any person, unless
Landlord so elects, and (ii) may, within a period of 6 months from and
after the date the Grantor Offer was received by the Tenant, Transfer the
Offered Property to any person, including the Proposed Transferee, on the
terms and conditions equal to or better than that included in the Grantor
Offer and Landlord shall be under no obligation to submit a Grantor Offer
to Transfer such Offered Property to the Tenant in connection therewith.
The First Refusal Right granted to the Tenant under the terms and
conditions of this Article 29 shall revive in the event that Landlord
fails to Transfer the Offered Property within the 6 month period
specified above.
(H) Due Diligence. During the periods following the date the
Notice of Transfer was received by Tenant and prior to the Offer Date,
following the date the Grantor Offer was received by Tenant and prior to
the Acceptance Date and following any agreement to Transfer a Property,
Landlord shall provide Tenant access to the Offered Property, its books
and records related thereto and its officers and employees with knowledge
thereof during reasonable hours for purposes of conducting a due
diligence investigation of the Offered Property and its proposed
operations.
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(I) Closing. (a) The closing of any Transfer of Offered Property
pursuant to this Article 29 shall be determined by the Landlord and
Tenant (which, unless otherwise agreed, shall be within 90 days of the
acceptance of any offer hereunder).
(J) No Assignment. The First Refusal Right and First Offer Right
granted hereby are personal to Tenant, and, as an inducement to Landlord
to enter into this Article 29, it is expressly agreed that Tenant has no
right, directly or indirectly, to assign in whole or in part any rights
granted by this Article 29, unless such assignment is to an affiliate of
Tenant or to a person or entity which has acquired substantially all of
the assets of Tenant. Landlord shall have no obligation or requirement to
deal with any party other than Tenant in all matters relating to this
Article 29. Any purchase agreement or lease hereunder may be made with a
subsidiary of Landlord acceptable to Tenant.
(K) No Broker. Tenant represents that it has dealt with no broker
in connection with the First Refusal Right and First Offer Right granted
hereby, and agrees to indemnify and hold Landlord harmless from the
claims of any broker in connection with the transactions contemplated
hereby.
(L) Specific Performance. Landlord and Tenant agree that if any of
the provisions of this Article 29 were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would
occur, and no adequate remedy at law would exist and damages would be
difficult to determine, and that the Landlord and Tenant shall be
entitled to specific performance hereof (without requirement to post
bond), in addition to any and all other remedies at law or in equity.
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(M) Restriction on Exercise of Purchase Refusal Right.
Notwithstanding any other provision of this Article, Landlord shall not
be required to Transfer the Leased Premises, or any portion thereof which
is a real estate asset as defined in Paragraph 856(c)(6)(B), or
functionally equivalent successor provision, of the Code, to Tenant if
Landlord's tax counsel formally opines to Landlord and Tenant that the
Transfer: (i) would be a "prohibited transaction" under Paragraph
857(b)(6)(B)(iii), or functionally equivalent successor provision, of the
Code, and (ii) does not qualify under Paragraph 857(b)(6)(C), or
functionally equivalent successor provision, of the Code to be treated
other than as such a prohibited transaction for reasons other than the
occurrence of other sales of property made by Landlord that prevent
either of the conditions of clause (iii) of such Paragraph 857(b)(6)(C)
from being satisfied. If Landlord determines not to Transfer such
property pursuant to the above sentence, Tenant's right, if any, to
acquire any or all of such property shall continue and be exercisable,
upon and subject to all applicable terms and conditions set forth in this
Lease, at such time as the transaction, in the opinion of either
Landlord's tax counsel or Tenant's tax counsel, rendered to Landlord and
Tenant: (iii) would not constitute a "prohibited transaction" under
Paragraph 857(b)(6)(B)(iii), or functionally equivalent provision, of the
Code, or (iv) would constitute such a prohibited transaction and does not
qualify under Paragraph 857(b)(6)(C), or functionally equivalent
successor provision, of the Code to be treated other than as such a
prohibited transaction solely because of the occurrence of other sales of
property that prevent either of the conditions of clause (iii) of such
Paragraph 857(b)(6)(C) from being satisfied provided, however, that no
legal opinions shall be required in order for Tenant to exercise its
rights hereunder if at any time the
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conditions of clause (iii) or (iv) would manifestly then be satisfied),
and until such time Tenant shall lease the Leased Property for the lesser
of the rent otherwise called for in this Lease or fair market rental. If
the Transfer of the Leased Premises is delayed pursuant to this part (B),
Landlord will use its reasonable efforts to Transfer the Leased Premises
to Tenant as soon as such Transfer is permitted hereunder. 30. Default
Clause and Self-Help.
(A) Tenant Default; Cure Rights. If (i) Tenant neglects or fails
to pay any Annual Fixed Rent, Annual Percentage Rent or other charge
hereunder, or under a Related Lease prior to the Cross Default
Termination Date, within 15 days after notice of default, or (ii) Tenant
neglects or fails to perform or observe any of the other covenants,
terms, provisions or conditions on its part to be performed or observed
under this Lease, within 30 days after notice of default (or if more than
30 days shall be reasonably required because of the nature of the
default, if Tenant shall fail to proceed diligently to cure such default
after such notice), or (iii) Tenant neglects or fails to perform or
observe any obligation pursuant to Tenant's Operating Covenant hereunder,
or under a Related Lease prior to the Cross Default Termination Date, or
(iv) Tenant or Tenant's Parent (a) admits in writing its inability to pay
its debts generally as they become due, (b) commences any case,
proceeding or other action seeking to have an order for relief entered on
its behalf as debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or its debts under any federal, state or local law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
(c) makes an assignment for the benefit of its creditors, (d) is unable
to pay its debts as they mature, (e) seeks or consents to the appointment
of a receiver of itself or of the
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whole or any substantial part of its property, or (f) files a petition or
answer seeking reorganization or arrangement under any federal, state or
local law relating to bankruptcy, insolvency, reorganization or relief of
debtors; or (v) any case, proceeding or other action is commenced against
Tenant or Tenant's Parent seeking to have an order for relief entered
against it as debtor or to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or its debts under any federal, state or local law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
or seeking an order or decree appointing, without the consent of Tenant,
a receiver of Tenant of the whole or substantially all of its property,
and such case proceeding or other action is not dismissed within 90 days
after the commencement thereof; or (vi) the estate or interest of Tenant
in the Leased Premises or any part thereof, or the Leased Premises under
a Related Lease prior to the Cross Default Termination Date, is levied
upon or attached in any proceeding and the same is not vacated or
discharged within the later of 90 days after commencement thereof or 30
days after receipt by Tenant of notice thereof from Landlord (unless
Tenant is contesting such lien or attachment in accordance with this
Lease), then an event of default shall exist hereunder and Landlord may
immediately or at any time thereafter, as permitted by law, (a) enter
into and upon the Leased Premises and repossess the same as of its former
estate, without prejudice to any remedies which Landlord might otherwise
have for arrearages of rent or preceding breach of covenant, and upon
such entry this Lease shall terminate; or (b) remain out of possession of
the Leased Premises, treat the term of this Lease as subsisting and in
full force and effect, in which event Landlord shall have all rights and
remedies available at law, in equity or hereunder; or (c) without
terminating the term of
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this Lease, reenter the Leased Premises and take possession thereof
pursuant to legal proceedings or pursuant to any notice provided for by
law, and having elected to reenter and take possession of the Leased
Premises without terminating this Lease, Landlord shall use reasonable
diligence as Tenant's agent to relet the Leased Premises, or parts
thereof, for such term or terms and at such rental and upon such other
terms and conditions as Landlord may deem advisable, with the right to
make alterations and repairs to the Leased Premises, and no such reentry
or taking of possession of the Leased Premises by Landlord shall be
construed as an election on Landlord's part to terminate this Lease, and
no such reentry or taking of possession by Landlord shall relieve Tenant
of its obligation to pay rent and other sums payable hereunder (at the
time or times provided herein), or of any of its other obligations under
this Lease, all of which shall survive such reentry or taking of
possession, and Tenant shall continue to pay the rent and other sums
provided or in this Lease until the end of the term and whether or not
the Leased Premises shall have been relet, less the net proceeds, if any,
of any reletting of the Leased Premises, after deducting all of
Landlord's expenses in or in connection with such reletting, including
without limitation all repossession costs, brokerage commissions, legal
expenses, expenses of employees, alterations costs and expenses of
preparation for reletting; or (d) exercise any other right or remedy
available to Landlord at law or in equity or under this Lease. Having
elected either to remain out of possession and treating this Lease as
remaining in full force and effect or to reenter or to take possession of
the Leased Premises without terminating this Lease, Landlord may, by
notice to Tenant given at any time thereafter while Tenant is in default
under this Lease, elect to terminate this Lease and, upon such notice,
this Lease shall thereupon be terminated. If in accordance with any of
the
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foregoing provisions of this Article 30 Landlord shall have the right to
elect to reenter or take possession of the Leased Premises, Landlord may
enter and expel Tenant and those claiming through or under Tenant and
remove the property and effects of both or either (forcibly if necessary)
without being guilty of any manner of trespass and without prejudice to
any remedies as set forth in this Article 30 are in addition to and not
exclusive of any other right or remedy provided herein or at law or in
equity. Tenant covenants and agrees, notwithstanding any entry or
re-entry by Landlord, to pay and be liable for, on the days originally
fixed herein for the payment thereof, amounts equal to the several
installments of Annual Fixed Rent and other charges reserved as such
amounts would, under the terms of this Lease, become due if this Lease
had not been terminated or if Landlord had not entered or re-entered as
aforesaid, and whether the Leased Premises are relet or remain vacant in
whole or in part for all or part of the remainder of the term hereof;
provided, that if Landlord relets the Leased Premises, Tenant shall be
entitled to a credit for the net proceeds of any reletting as provided
herein. Alternatively, upon such an uncured default by Tenant, Landlord
may elect as its sole remedy to recover from Tenant the difference
between (i) all rent and other sums that would have been payable under
this Lease until what would have been the end of the then term thereof,
discounted to present value at 10.5% and (ii) the then fair market value
of the Leased Premises. In all events, Landlord shall use reasonable
efforts to mitigate its loss or damages. Following an event or default,
all amounts due from Tenant to Landlord pursuant to this Lease shall bear
interest at the Default Rate.
(B) Tenant Right to Contest by Court Action. Notwithstanding anything to
the contrary contained in paragraph (A) of this Article, with respect to any
alleged default
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other than a default in the payment of Annual Fixed Rent or a default
under Section A(iv) or (v) of this Article, if within 45 days after
Landlord's notice of such default, Tenant (i) notifies Landlord that
Tenant disputes such alleged default, and (ii) files an action in a court
of competent jurisdiction contesting such alleged default, then Tenant
shall not be deemed to be in default under this Lease with respect to
such alleged default, provided that if the final judgment in such action
is adverse to Tenant, in whole or in part, then Tenant shall forthwith
commence to correct the matters complained of by Landlord, or that
portion thereof as to which such judgment is adverse to Tenant, and
complete the same within 30 days after such judgment, or if more than 30
days are required to complete such corrections with reasonable diligence,
commence to correct the same within such 30 days and prosecute the same
to completion with reasonable diligence.
(C) Landlord Default, Cure Rights. If Landlord neglects or fails
to perform or observe any of the covenants, terms, provisions or
conditions on its part to be performed or observed under this Lease, or
within 30 days after notice of default (or if more than 30 days shall be
reasonably required because of the nature of the default, if Landlord
shall fail to proceed diligently to cure such default after such notice),
then Tenant may immediately or at any time thereafter, in addition to any
other rights and remedies as may otherwise be provided in this Lease for
a Landlord default, pursue all rights and remedies it may have at law and
equity generally.
(D) Self Help. If either party (the "Defaulting Party") fails to
perform any agreement or obligation on its part to be performed under
this Lease, the other party (the "Curing Party") shall have the right (i)
if no emergency exists, to perform the same after giving 30 days' notice
to the Defaulting Party, and (ii) in any emergency situation to
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perform the same immediately without notice or delay. For the purpose of
rectifying a default of the Defaulting Party as aforesaid, the Curing
Party shall have the right to enter the premises of the Defaulting Party.
The Defaulting Party shall on demand reimburse the Curing Party for the
costs and expenses incurred by the Curing Party in rectifying defaults as
aforesaid, including reasonable attorneys' fees, together with interest
thereon at the Default Rate. Any act or thing done by the Curing Party
pursuant to this paragraph shall not constitute a waiver of any such
default by the Curing Party or a waiver of any covenant, term or
condition herein contained or the performance thereof. In the event
Landlord shall fail to so reimburse Tenant within 30 days after Tenant's
demand, Tenant shall be entitled to an immediate credit against the
Annual Fixed Rent and other charges payable hereunder in an amount equal
to the costs and expenses incurred by Tenant in rectifying Landlord's
defaults as aforesaid, together with interest thereon at the Default
Rate. 31. Access to Premises.
Tenant shall permit Landlord and its authorized
representatives to enter Tenant's Facility at all reasonable times for the
purposes of (i) serving or posting or keeping posted thereon notices required by
Law, (ii) conducting periodic inspections, (iii) performing any work thereon
required or permitted to be performed by Landlord pursuant to this Lease, and
(iv) showing the Leased Premises to prospective purchasers or lenders; PROVIDED,
HOWEVER, nothing set forth in this Lease shall be construed as authorizing
Landlord to enter the projection booths in Tenant's Facility without the consent
of Tenant, except in the case of an emergency.
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32. Force Majeure.
If either party shall be delayed or hindered in or prevented
from the performance of any act required under this Lease by reason of strikes,
lockouts, labor troubles, inability to procure materials, failure of power,
restrictive Laws (except as otherwise specifically provided herein), riots,
insurrection, war or other reason beyond the reasonable control of and not the
fault of the party delayed in performing the work or doing the acts required
under the terms of this Lease (collectively, "Force Majeure"), then performance
of such act shall be excused for the period of the delay, and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this Article shall not (i) operate to
excuse Tenant from prompt payment of rent or any other payment required by
Tenant under the terms of this Lease, except as may be otherwise specifically
provided herein to the contrary, or (ii) be applicable to delays resulting from
the inability of a party to obtain financing or to proceed with its obligations
under this Lease because of a lack of funds.
33. Remedies Cumulative; Legal Expenses; Time of the Essence.
(A) The various rights and remedies given to or reserved to
Landlord and Tenant by this Lease or allowed by law shall be cumulative,
irrespective of whether so expressly stated.
(B) In case suit shall be brought because of the breach of any
agreement or obligation contained in this Lease on the part of Tenant or
Landlord to be kept or performed, and a breach shall be established, the
prevailing party shall be entitled to recover all expenses incurred in
connection with such suit, including reasonable attorneys' fees.
(C) Time is of the essence of this Lease.
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34. Lease Not to be Recorded.
Upon request of Landlord or Tenant, the parties hereto shall
promptly execute and deliver a memorandum of this Lease for recording purposes
in recordable form. If Tenant elects to record such memorandum, Landlord shall
promptly cause the same to be recorded, at Landlord's expense. Neither party
shall record this Lease without the consent of the other party.
35. Notices.
All notices, consents, requests, approvals and authorizations
(collectively, "Notices") required or permitted hereunder shall only be
effective if in writing. All Notices shall be sent (A) by registered or
certified mail (return receipt requested), postage prepaid, or (B) by Federal
Express, U.S. Post Office Express Mail, Airborne or similar overnight courier
which delivers only upon signed receipt of the addressee, or (C) by facsimile
transmission and addressed as follows or at such other address, and to the
attention of such other person, as the parties shall give notice as herein
provided: If intended for Landlord: Entertainment Properties Trust
One Kansas City Place
1200 Main Street, Suite 3250
Kansas City, Missouri 64105
Phone: (816) 480-4649
Fax: (816) 480-4617
Attention: Robert L. Harris, President
With a copy to: Stinson, Mag & Fizzell, P.C.
1201 Walnut, Suite 2800
Kansas City, Missouri 64105
Phone: (816) 691-3180
Fax: (816) 691-3495
Attention: Michael G. O'Flaherty
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If intended for Tenant: American Multi-Cinema, Inc.
106 West 14th Street
Kansas City, Missouri 64105
Phone: (816) 221-4000
Fax: (816) 480-4617
Attention: Lease Administrator
With a copy to: Lathrop & Gage L.C.
2345 Grand Boulevard, Suite 2500
Kansas City, Missouri 64108
Phone: (816) 460-5515
Fax: (816) 292-2001
Attention: E.T. Bullard
A notice, request and other communication shall be deemed to be duly received if
delivered by a recognized delivery service, when delivered to the address of the
recipient, if sent by mail, on the date of receipt by the recipient as shown on
the return receipt card, or if sent by facsimile, upon receipt by the sender of
an acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient's facsimile number; provided that if a notice, request or other
communication is served by hand or is received by facsimile on a day which is
not a Business Day, or after 5:00 P.M. on any Business Day at the addressee's
location, such notice or communication shall be deemed to be duly received by
the recipient at 9:00 A.M. on the first Business Day thereafter. Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no Notice was given shall be deemed to be receipt of the Notice as of
the date of such rejection, refusal or inability to deliver.
36. Waiver of Performance and Disputes.
(A) Waiver Limited to Occurrence. One or more waivers of any
covenant, term or condition of this Lease by either party shall not be
construed as a waiver of a subsequent breach of the same or any other
covenant, term or condition, nor shall any
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delay or omission by either party to seek a remedy for any breach of this
Lease or to exercise a right accruing to such party by reason of such
breach be deemed a waiver by such party of its remedies or rights with
respect to such breach. The consent or approval by either party to or of
any act by the other party requiring such consent or approval shall not
be deemed to waive or render unnecessary consent to or approval of any
similar act.
(B) Right to Protest Without Waiver or Default. If at any time a
dispute shall arise as to any amount or sum of money to be paid by one
party to the other party under the provisions hereof, the party against
whom the obligation to pay the money is asserted shall have the right to
make payment "under protest" and such payment shall not be regarded as a
voluntary payment and there shall survive the right on the part of said
party to institute suit within 90 days after such payment under protest
is made for the recovery of such sum, and if it shall be adjudged that
there was no legal obligation on the part of said party to pay such sum
or any part thereof, said party shall be entitled to recover such sum or
so much thereof as it was not legally required to pay under the
provisions of this Lease, together with interest thereon at the Default
Rate. If at any time a dispute shall arise between the parties hereto as
to any work to be performed by either of them under the provisions
hereof, the party against whom the obligation to perform the work is
asserted may perform such work and pay the cost thereof "under protest"
and the performance of such work shall in no event be regarded as a
voluntary performance and there shall survive the right on the part of
said party to institute suit within 90 days after such work is completed
for the recovery of the cost of such work, and if it shall be adjudged
that there was no legal obligation on the part of said party to perform
the same
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or any part thereof, said party shall be entitled to recover the cost of
such work or the cost of so much thereof as said party was not legally
required to perform under the provisions of this Lease, together with
interest thereon at the Default Rate. If either party desires to exercise
its rights under this Section, it shall do so by delivering written
notice that it is paying money or performing work "under protest," with
such notice to be given to the other party concurrently with the payment
of such money or prior to the commencement of such work. 37. Modification
of Lease.
The terms, covenants and conditions hereof may not be changed
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, modification or discharge is sought, or by such
party's agent.
38. Captions and Lease Preparation.
Captions throughout this instrument are for convenience and
reference only and the words contained therein shall in no way be deemed to
explain, modify, amplify or aid in the interpretation or construction of the
provisions of this Lease.
39. Lease Binding on Successors and Assigns, Etc.
Except as herein otherwise expressly provided, all covenants,
agreements, provisions and conditions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their heirs, devisees, executors,
administrators, successors in interest and assigns as well as grantees of
Landlord, and shall be deemed to run with the land. Without limiting the
generality of the foregoing, all rights of Tenant under this Lease may be
granted by Tenant to any sublessee of Tenant, subject to the terms of this
Lease.
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40. Brokers. Landlord represents and warrants to Tenant that it has not
incurred or caused to be incurred any liability for real estate brokerage
commissions or finder's fees in connection with the execution or consummation of
this Lease for which Tenant may be liable. Tenant represents and warrants to
Landlord that it has not incurred or caused to be incurred any liability for
real estate brokerage commissions or finder's fees in connection with the
execution or consummation of this Lease for which Landlord may be liable. Each
of the parties agrees to indemnify and hold the other harmless from and against
any and all claims, liabilities or expense (including reasonable attorneys'
fees) in connection with any breach of the foregoing representations and
warranties.
41. Landlord's Status as a REIT. Tenant acknowledges that Landlord
intends to elect to be taxed as a real estate investment trust ("REIT") under
the Code. Tenant shall exercise commercially reasonable efforts not do anything
which would materially adversely affect Landlord's status as a REIT. Tenant
agrees to enter into reasonable modifications of this Lease which do not
materially adversely affect Tenant's rights and liabilities if such
modifications are required to retain or clarify Landlord's status as a REIT.
42.Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State where the Leased Premises are located, but
not including such State's conflict-of-laws rules.
43. Certain Landlord Rights On Termination.
(A) Advertisement of Leased Premises. If Tenant has not exercised the
applicable Option Period option to extend this Lease, then Landlord or its agent
shall thereafter have
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the right to enter the Leased Premises at all reasonable times for the
purpose of exhibiting such Leased Premises to others and to place upon such
Leased Premises during the period commencing 180 days prior to the expiration of
the then current term "for sale" or "for rent" notices or signs of such number
and in such locations as Tenant shall reasonably approve. (B) Transfer of
Permits, Etc. On Termination. Upon the expiration or earlier termination of this
Lease, Tenant shall, at the option of Landlord, transfer to and relinquish to
Landlord or Landlord's nominee and reasonably cooperate with Landlord or
Landlord's nominee in connection with the processing by Landlord or such nominee
of all licenses, operating permits, and other governmental authorization and all
assignable service contracts, which may be necessary or appropriate for the
operation by Landlord or such nominee of the Leased Premises; provided that the
costs and expenses of any such transfer or the processing of any such
application shall be paid by Landlord or Landlord's nominee. 44. Estoppel.
Landlord and Tenant each confirm and agree that (a) it has read and understood
all of the provisions of this Lease; (b) it is an experienced real estate
investor and is familiar with major sophisticated transactions such as that
contemplated by this Lease; (c) it has negotiated with the other party at arm's
length with equal bargaining power; and (d) it has been advised by competent
legal counsel of its own choosing. 45. Joint Preparation. This Lease (and all
exhibits thereto) is deemed to have been jointly prepared by the parties hereto,
and any uncertainty or ambiguity existing herein, if any, shall not be
interpreted against any party, but shall be interpreted according to the
application of the rules of interpretation for arm's-length agreements.
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46. Counterparts. This Lease may be executed at different times and in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this Lease
by telecopier shall be as effective as delivery of a manually executed
counterpart of this Lease. In proving this Lease, it shall not be necessary to
produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
47. Attorneys' Fees. If either party obtains a judgment against the other
party by reason of a breach of this Lease, a reasonable attorneys' fee as fixed
by the court shall be included in such judgment.
48. Limitation on Landlord's Liability. Notwithstanding anything to the
contrary in this Lease, (A) Tenant will look solely to the interest of Landlord
(or its successor as Landlord hereunder) in the Leased Premises for the
satisfaction of any judgment or other judicial process requiring the payment of
money as a result of (i) any negligence (including gross negligence) or (ii) any
breach of this Lease by Landlord or its successor (including any beneficial
owners, partners, shareholders, trustees or others affiliated or related to
Landlord or such successor) and Landlord shall have no personal liability
hereunder of any kind, and (B) Tenant's sole right and remedy in any action
concerning Landlord's reasonableness (where the same is required hereunder) will
be an action for declaratory judgment and/or specific performance, and in no
event shall Tenant be entitled to claim or recover any damages in any such
action.
49. Severability. Invalidation of any provision of this Lease or of the
application thereof to any party by judgment or court order shall in no way
affect any of the other
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provisions hereof or the application thereof to any other party and the same
shall remain in full force and effect.
50. Waiver of Trial by Jury.
TENANT AND LANDLORD HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER IN ANY MATTERS ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE AND OCCUPANCY OF TENANT'S
FACILITY OR THE ENTIRE PREMISES, AND ANY CLAIM OF INJURY OR DAMAGE.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed as of the day and year first above written.
(SEAL) ENTERTAINMENT PROPERTIES
TRUST, a Maryland real estate investment trust
By: /s/ David M. Brain
Name: David M. Brain
Title: Chief Financial Officer and Secretary
"Landlord"
AMERICAN MULTI-CINEMA, INC., a
(SEAL) Missouri corporation
ATTEST:
By: By: /s/ Peter C. Brown
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: Executive Vice President
and Chief Financial
Officer
"Tenant"
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AMC Build (REIT Program)
TABLE OF CONTENTS
LEASE BETWEEN ENTERTAINMENT PROPERTIES TRUST
AS LANDLORD AND AMERICAN MULTI-CINEMA, INC.,
AS TENANT, COVERING PREMISES IN
(Grand 24, Dallas, TX)
Article Page
1. Attachments to Lease; Rent and Expense Rider and Exhibits...........1
2. Definitions and Rules of Construction...............................2
3. Premises............................................................8
4. Term................................................................8
5. Rent................................................................8
6. Covenant of Title; Authority and Quiet Possession; Transfer of
Title..............................................................10
7. Use of Premises....................................................12
8. Subletting and Assigning...........................................14
9. Continued Possession of Tenant.....................................21
10. Fixtures...........................................................21
11. Utilities..........................................................22
12. Governmental and Ground Lease Compliance...........................22
13. Maintenance and Repairs............................................27
14. Damage Clause......................................................29
15. Insurance, Indemnity, Waiver of Subrogation and Fire Protection....34
16. Indemnification Generally. ........................................39
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17. Tenant to Pay Taxes................................................40
18. Alterations and Tenant's Liens.....................................40
19. Tenant's Signs.....................................................42
20. Condemnation and Economic Obsolescence.............................44
21. Other Tenancies; REA. ............................................48
22. Common Facilities. ...............................................49
23. Options to Extend; Right of First Offer to Lease by Tenant.........49
24. Common Area Charge.................................................52
25. Other Theatres and Restrictions....................................52
26. No Merchants Association...........................................53
27. Tenant's Covenant to Operate.......................................53
28. Estoppel Certificate; Attornment and Priority of Lease;
Subordination......................................................54
29. Right of First Refusal to Purchase by Tenant.......................56
30. Default Clause and Self-Help.......................................63
31. Access to Premises.................................................68
32. Force Majeure......................................................69
33. Remedies Cumulative; Legal Expenses; Time of the Essence...........69
34. Lease Not to be Recorded...........................................70
35. Notices............................................................70
36. Waiver of Performance and Disputes.................................71
37. Modification of Lease..............................................73
38. Captions and Lease Preparation.....................................73
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39. Lease Binding on Successors and Assigns, Etc.......................73
40. Brokers............................................................74
41. Landlord's Status as a REIT. .....................................74
42. Governing Law......................................................74
43. Certain Landlord Rights On Termination.............................74
44. Estoppel...........................................................75
45. Joint Preparation..................................................75
46. Counterparts.......................................................76
47. Attorneys' Fees....................................................76
48. Limitation on Landlord's Liability.................................76
49. Severability.......................................................76
50. Waiver of Trial by Jury............................................77
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AMC Prior Owned
(EPT REIT Program)
RENT AND EXPENSE RIDER
Attached to and forming a part of Lease dated as of
November 21, 1997 by and between
ENTERTAINMENT PROPERTIES TRUST,
as Landlord,
and
AMERICAN MULTI-CINEMA, INC., as Tenant,
relating to premises in
(Grand 24, Dallas, TX)
Section 1. Rent.
(A) Annual Fixed Rent; Escalation. Tenant shall pay Landlord, during the
term of this Lease, the Annual Fixed Rent in the manner hereinafter provided.
The Annual Fixed Rent for each Lease Year shall be payable in equal monthly
installments on or before the first day of each calendar month in advance during
such Lease Year. If the Annual Fixed Rent is payable for a fraction of a month,
the amount payable shall be a pro rata share of a full month's rent. The Annual
Fixed Rent shall be prorated for any partial Lease Year. Annual Fixed Rent will
be increased each Lease Year by an amount equal to the Annual Fixed Rent
Escalation.
(B) Percentage Rent.
(1) In addition to the Annual Fixed Rent, Tenant shall pay Landlord
as percentage rent (the "Annual Percentage Rent") an amount for each Lease Year
equal to the Percentage Rate of the Gross Receipts for such Lease Year in excess
of an amount ("Base Amount") equal to the quotient obtained by dividing the
Annual Fixed Rent payable for such Lease Year by the Percentage Rate. For the
purpose of computing the Annual Percentage Rent for the first Lease Year, the
Gross Receipts for and the Annual Fixed Rent payable for the partial calendar
month, if any, preceding the first Lease Year shall be included in the Annual
Fixed Rent and Gross Receipts for the first Lease Year. Within 60 days following
the end of each Lease Year, Tenant shall furnish Landlord with a statement,
verified by a corporate officer of Tenant, showing the amount of Gross Receipts
for the preceding Lease Year, which statement shall be accompanied by Tenant's
payment of Annual Percentage Rent, if any, is due.
(2) The term "Lease Year" as used in this Lease shall mean a period
of 12 full calendar months. The first Lease Year shall begin on the first day of
the calendar month following the Commencement Date, unless the term commences on
the first day of a calendar
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month, in which case the first Lease Year shall begin on the Commencement Date.
Each succeeding Lease Year shall commence on the anniversary of the first Lease
Year.
(3) Landlord shall have the right, not more often than once each
year, to audit Tenant's records of Gross Receipts, but only for the purpose of
ascertaining the amount of the Gross Receipts during the preceding Lease Year.
Such audit shall be made on behalf of Landlord by a certified public accountant
to be selected by Landlord. If Landlord wishes to audit Tenant's records for any
Lease Year, Landlord shall notify Tenant and proceed with such audit within 12
months after the end of the Lease Year in question. Should Landlord fail to
exercise the right to audit the records of Tenant within 12 months after the end
of any Lease Year, then Landlord shall have no further right to audit the
records of Tenant for such Lease Year, and Tenant's statement of Gross Receipts
for such Lease Year shall conclusively be deemed to be correct. Any such audit
by Landlord shall be at Landlord's own expense, except as hereinafter provided.
If any such audit discloses that Tenant has understated the Gross Receipts for
such Lease Year by more than 3% and Landlord is entitled to any additional
Annual Percentage Rent as a result of such understatement, then Tenant shall
promptly pay to Landlord the cost of such audit. Tenant shall, in any event, pay
Landlord the amount of any deficiency in Annual Percentage Rent plus interest at
the Default Rate. Any information obtained by Landlord from such statements or
inspections shall be kept confidential and shall not be disclosed except as
provided in subparagraph (14) of this paragraph (B).
(4) The term "Gross Receipts" as used in this Lease shall mean the
receipts whether wholly or partially in cash or on credit from the sale or lease
of theatre admission tickets, concessions and all other goods, wares, services,
merchandise or chattels of any kind, received by Tenant in or from the Leased
Premises during each Lease Year; provided, however, there shall be deducted from
such cash receipts in the computation of Gross Receipts to the extent the same
are included in Tenant's computations:
(a) Credits or refunds made to customers.
(b) (i) All federal, state, county and city sales taxes or other similar
taxes, and (ii) all occupational taxes, use taxes and other taxes which must be
paid by Tenant or collected by Tenant, by whatever name they are known or
assessed, and regardless of whether or not they are imposed under any existing
or future orders, regulations, laws or ordinances.
(c) (i) Agency commissions paid to independent third parties for selling
tickets but only to the extent such commissions are actually remitted to
independent third parties, and (ii) surcharges in excess of the standard
ticket price for tickets purchased by use of credit cards.
(d) Receipts from the sale of student and senior citizens discount cards.
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(e) Proceeds from the sale of Tenant's Property.
(5) Should Tenant rent one or more theatres for special events such
as a rally, fashion show, speech or the like, the Gross Receipts shall be deemed
the rental received by Tenant and shall not include monies, if any, received by
the sponsor of the event. Pursuant to Section 8(G) and (I) of this Lease, the
rental received by Tenant may not be based in whole or in part on the net income
or profits derived by any person in connection with all or a portion of any
theatre.
(6) For the purposes of computing and reporting Gross Receipts with
respect to "four-wall deals" as permitted by the Article captioned "Subletting
and Assigning," Tenant shall have the right to report as Gross Receipts only the
actual payments received by Tenant in connection with such use. Pursuant to
Sections 8(G) and (I) of this Lease, the actual payments received by Tenant with
respect to such "four-wall deals" may not be based in whole or in part on the
net income or profits derived by any person in connection with all or a portion
of a Tenant facility.
(7) Tenant shall be entitled to deduct from Gross Receipts any tax
on rents received by a distributor and/or rents paid by Tenant in respect of
films shown in Tenant's Building, to the extent Tenant (or its sublessees) pays
any such tax to the taxing authority, whether by designation of such tax
specifically or as a part of the rental for a film or otherwise, provided that
the amount deducted hereunder shall not be duplicative of other deductions from
Gross Receipts.
(8) For the purposes of computing and reporting Gross Receipts with
respect to electronic games, other amusement devices, and other related services
provided as a convenience to patrons of Tenant's theatre operated or provided in
Tenant's Building, Tenant shall have the right to (a) report as Gross Receipts
only the actual payments received by Tenant in connection therewith, and (b)
exclude from Gross Receipts all receipts of any independent concessionaire,
licensee or other third party or parties in connection therewith and all
receipts derived by Tenant from pay telephones, cash dispensing ATM machines and
other customer related services provided as a convenience to patrons of Tenant's
theatre and which generate nominal fees. Pursuant to Section 8(G) and (I) of
this Lease, the actual payments received by Tenant in connection with such
electronic games, other amusement devices and related services may not be based
in whole or in part on the net income or profits derived by any person.
(9) As and when during each Lease Year the Gross Receipts exceed
the Base Amount, the Gross Receipts thereafter received from theatre admission
tickets for pictures licensed for exhibition pursuant to particular contracts
hereinafter described shall be excluded from Gross Receipts and a daily rent
premium in the amount hereinafter set forth shall be paid in lieu thereof. Such
license contracts shall consist of arrangements whereby a predetermined weekly
theatre operating cost is retained by the exhibitor from the theatre ticket
admission
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receipts in respect of a particular film, and the distributor of the film is
paid 90% of the balance. In such instances, Tenant shall pay Landlord a daily
rent premium of $15 per auditorium for each day such film is exhibited in an
auditorium in Tenant's Building.
(10) (a) If Tenant, in accordance with the provisions of
paragraph (B) of the Article captioned "Use of Premises," uses Tenant's
Building for purposes other than the uses set forth in paragraph (A) of said
Article ("Initial Use"), then during the period of such other uses(s)
("Other Use(s)"), Tenant shall pay as Percentage Rent, in lieu of the amount
set forth in subparagraph (1) of this paragraph (B), an amount for each
Lease Year equal to the amount, if any, by which the "Applicable Percentage
Rate" of Gross Receipts in each such Lease Year exceeds the Annual Fixed
Rent payable by Tenant for such Lease Year. The term "Applicable Percentage
Rate" shall mean the percentage rate, if any, commonly used in the submarket
within the Metropolitan Area in which Tenant's Building is located for the
type of use for which Tenant's Building is then being used.
(b) During the period of use of Tenant's Building for the Other Use(s),
Gross Receipts shall be defined as follows (in lieu of the definition thereof in
subparagraphs (4) through (9) of this paragraph (B)):
The term "Gross Receipts" shall mean: (i) the entire amount of the price
charged, whether wholly or partially in cash or on credit, or otherwise, for all
goods, wares, merchandise and chattels of any kind sold, leased, licensed or
delivered, and all charges for services sold or performed in, at, upon or from
any part of or through the use of Tenant's Building or any part thereof by
Tenant and any other party, or by means of any mechanical or other vending
device (other than pay telephones and those soft drink and other similar vending
devices operated primarily for the convenience of Tenant's employees); and (ii)
all gross income of Tenant and any other party from any operations in, at, upon
or from the Tenant's Building which are neither included in nor excluded from
Gross Receipts by other provisions of this Lease, but without any duplication.
Gross Receipts shall not include, or if included, there shall be deducted (but
only to the extent they have been included), as the case may be, (i) the net
amount of cash or credit refunds made upon Gross Receipts, where the merchandise
sold or some part of it is returned by the purchaser to and accepted by Tenant
(but not exceeding in any instance the selling price of the item in question);
(ii) the amount of any sales tax, use tax or retail excise tax which is imposed
by any duly constituted governmental authority directly on sales and which is
both added to the selling price (or absorbed therein) and is paid to the taxing
authority by Tenant (but not any vendor of Tenant); (iii) exchanges of
merchandise between Tenant's Building and other stores of Tenant or its
affiliates to the extent the same are made solely for the convenient operation
of Tenant's business and not for the purpose of depriving Landlord of the
benefit of Gross Receipts; (iv) returns of merchandise to shippers, suppliers or
manufacturers; (v) the sale of Tenant's Property; (vi) discount sales to
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employees and agents of Tenant of merchandise not intended for
resale; and (vii) separately stated interest and service charges.
(c) During any Lease Year in which Tenant's Building is used in part for
the Initial Use and in part for Other Use(s), Tenant shall pay as Percentage
Rent the sum of (i) the amount, if any, by which the Percentage Rate of Gross
Receipts during the portion of such Lease Year that Tenant's Building is used
for the Initial Use ("Initial Use Period") exceeds the Annual Fixed Rent payable
during the Initial Use Period, plus (ii) the amount, if any, by which the
Applicable Percentage Rate of Gross Receipts during the portion of such Lease
Year that Tenant's Building is used for purposes other than the Initial Use
("Other Use Period") exceeds an amount equal to the Annual Fixed Rent payable
for the Other Use Period.
(d) If the use of Tenant's Building shall be changed from one Other Use to
another Other Use during any Lease Year or shall otherwise be used for more than
one Other Use during any Lease Year, Tenant shall pay as Percentage Rent the
amount, if any, by which the Applicable Percentage Rate in respect of each such
Other Use of the separate Gross Receipts received in such Lease Year
attributable to each such Other Use exceeds the Annual Fixed Rent payable for
such Lease Year.
(e) The foregoing provisions of this subparagraph (10) shall prevail over
any conflicting provisions in this paragraph (B) and shall apply only when
Tenant uses Tenant's Building primarily for uses other than those set forth in
paragraph (A) of the article captioned "Use of Premises".
(11) Nothing set forth in this Lease shall be construed as giving
Landlord any partnership or other interest in Tenant's business.
(12) It is understood and agreed by Landlord that Tenant has made
no representation of any kind whatsoever as to the minimum or maximum amount of
Gross Receipts which may or shall be made in the Leased Premises during any
Lease Year of the term of this Lease.
(13) Landlord agrees not to divulge to any party the amount of
Gross Receipts made by Tenant in the Leased Premises, except to a ground lessor
if the Leased Premises is subject to a ground lease and the taxing authorities
with authority to inquire therein, to an existing or bona fide prospective
mortgagee or bona fide prospective purchaser of the Entire Premises or the
Leased Premises, or in connection with any action to collect Percentage Rent
from Tenant.
Section 2. Tenant's Real Estate Taxes.
(A) As used in this Article, the following terms shall have the following
meanings:
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(1) "Fiscal Tax Year" shall mean the 12-month period established as
the real estate tax year by the taxing authority having jurisdiction over the
Entire Premises.
(2) "Taxes" shall mean ad valorem taxes and assessments and
governmental charges (including sewer charges), general or special, ordinary or
extraordinary, foreseen or unforeseen, of any kind or nature whatsoever, imposed
by any Governmental Authorities, which are levied on or charged against the
Leased Premises, Tenant's Facility, Tenant's Property, the real estate on which
the Tenant's Facility is located, personal property or rents, or on the right or
privilege of leasing real estate or collecting rents thereon, and any other
taxes and assessments attributable to the Leased Premises or its operation by
Tenant or any tax or assessment or governmental charge imposed or collected in
lieu of or in substitution for any such tax, assessment or governmental charge,
including without limitation all special assessments, impact fees, development
fees, traffic generation fees, parking fees in respect of any Fiscal Tax Year
falling wholly within the term of this Lease and a portion of any real estate
taxes so imposed in respect of any Fiscal Tax Year falling partly within and
partly without the term hereof, equal to the proportion which the number of days
of such Fiscal Tax Year falling within the term hereof bears to the total number
of days of such Fiscal Tax Year; excluding, however, any income, franchise,
corporate, capital levy, capital stock, excess profits, transfer, revenue,
estate, inheritance, gift, devolution or succession tax payable by Landlord or
any other tax, assessment, charge or levy upon, or measured, in whole or in
part, by the rent payable hereunder by Tenant, except to the extent any such
tax, assessment, charge or levy is imposed in substitution for any ad valorem
tax or assessment.
(3) "Taxes Applicable to Leased Premises" shall mean an amount
equal to the Taxes levied against the land and improvements within the Leased
Premises.
(B) Tenant shall pay the Taxes Applicable to the Leased Premises directly to
the appropri ate taxing authorities within 60 days after the end of each Fiscal
Tax Year.
(C) Tenant shall have the right (but shall not be obligated) to contest the
Taxes Applicable to the Leased Premises or the validity thereof by appropriate
legal proceedings or in such other manner as it shall deem suitable, and
Landlord shall join in such contest, protest or proceeding, but at Tenant's sole
cost and expense. Landlord shall not, during the pendency of such legal or other
proceeding or contest, pay or discharge any Taxes on the Leased Premises, or tax
lien or tax title pertaining thereto, provided Landlord may do so in order to
stay a sale of the Leased Premises through foreclosure of a tax lien thereon.
Any refund obtained by Tenant shall be paid first to Tenant to the extent of its
costs and expenses of such contest and on account of any portion of the Taxes so
refunded which was previously paid by Tenant.
Section 3. Common Facilities Expense. If the Leased Premises are a part of a
larger Entire Premises and subject to an REA as such terms are defined herein,
the following provisions of this Section 3 shall apply:
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(A) "Common Facilities Expense" shall mean, to the extent covered by such
REA, actual, reasonable and competitive costs of maintaining, repairing,
insuring, lighting, protecting and securing the Common Facilities. Tenant shall
pay directly to the appropriate person or entity under the REA in each Lease
Year as hereinafter provided the Common Facilities Expense for such Lease Year
attributable or allocable to the Leased Premises ("Tenant's Common Facilities
Contribution"), which shall be computed and paid as set out in the REA.
(B) To the extent Landlord is entitled to grant such rights to Tenant under
the REA, Landlord hereby grants to Tenant the right to receive all statements
and otherwise enforce directly Landlord's rights under the REA with respect to
the Common Facilities Expense for such Lease Year and Tenant's Common Facilities
Contribution, and how such amount was computed.
Section 4. Audit.
To the extent Landlord is entitled to grant such right to Tenant under the
REA, Landlord hereby grants to Tenant the right to exercise and enforce directly
Landlord's rights to audit (or authorize an accountant designated by Tenant to
audit) books and records of the Common Facilities Expense of the applicable
person or entity under the REA.
Section 5. Address for Payment.
Until Tenant receives other instructions in writing from Landlord, Tenant
shall pay all rents and other charges under this Lease by check to the order of
Landlord, at its address first written in this Lease.
(SEAL) ENTERTAINMENT PROPERTIES TRUST, a
Maryland real estate investment trust
By:/s/ David M. Brain
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Name: David M. Brain
Title: Chief Financial Officer and
Secretary
"Landlord"
(SEAL) AMERICAN MULTI-CINEMA, INC., a
ATTEST: Missouri corporation
By: /s/ Nancy L. Gallagher By:/s/ Peter C. Brown
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Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: Executive Vice President
and Chief Financial
Officer
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"Tenant"
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Exhibit 10.5
GUARANTY OF LEASE
(Grand 24, Dallas, TX)
THIS GUARANTY is given as this 21st day of November 1997, by AMC
ENTERTAINMENT INC., a Delaware corporation ("Guarantor"), to ENTERTAINMENT
PROPERTIES TRUST, a Maryland real estate investment trust ("Owner").
In order to induce Owner to enter into a certain Lease (the "Lease")
dated as of November 21, 1997, between Owner, as Landlord, and American
Multi-Cinema, Inc., a wholly-owned subsidiary of Guarantor (the "Tenant"), as
Tenant, pursuant to which Owner has leased to Tenant certain premises located in
the City of Dallas, County of Dallas, State of Texas and described therein (the
"Lease"), and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Guarantor agrees as follows:
1. Guaranty. Guarantor hereby absolutely and unconditionally guarantees
to Owner, subject to the terms of this Guaranty and to the limitations set forth
herein, (i) the full, prompt and complete payment of the rent and all other sums
due and payable by Tenant under the Lease and all costs incurred by Owner in
collecting such sums or in enforcing its rights hereunder, and (ii) the full,
prompt and complete performance by Tenant of all covenants, conditions and
provisions in the Lease required to be performed by Tenant (collectively, the
"Liabilities"). If Tenant fails to pay or perform any of the Liabilities,
Guarantor shall pay or perform such Liabilities within thirty days after written
notice of such failure from Owner. Guarantor waives any right to require Owner
to proceed first against Tenant or to exhaust any remedy Owner may have against
Tenant under the Lease or with respect to any security granted by Tenant under
the Lease before proceeding against Guarantor.
2. Right to Assert Defenses.
A. Except as provided in subparagraph (B) of this Section,
Guarantor shall have the benefit of and shall be entitled to assert with respect
to its obligations hereunder any and all rights, claims, counterclaims, offsets
and defenses available to Tenant with respect to the Liabilities or which Tenant
is otherwise entitled to assert against Owner; provided however that in the
event Tenant has the right to dispute a default asserted by Owner in the manner
permitted by Article 30 of the Lease and either (i) does not pursue such right,
or (ii) is adjudged by a court of competent jurisdiction to be in default of its
obligation under the Lease, then, notwithstanding the provisions of this Section
2(A), Guarantor shall not be entitled to assert as a defense to its obligations
hereunder the right to dispute the default under said Article 30 of the Lease.
B. The duties and obligations of Guarantor hereunder shall not
be affected by, and Guarantor hereby waives any defense based on, the Tenant's
becoming insolvent or being adjudicated a bankrupt, or filing a petition for
reorganization, liquidation, or for the adjustment of debts or for similar
relief under any present or future provision of the Bankruptcy Code, or the
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issuance by a court of an order for relief in the case of a petition being filed
by a creditor or creditors of Tenant, or the seeking by Tenant of a judicial
readjustment of the rights of its creditors under any present or future federal
or state law, or the appointment of a receiver or trustee of all or part of
Tenant's property and assets by any state or federal court.
3. Waiver. Guarantor hereby waives notice of acceptance of this
Guaranty and hereby waives, so long as Tenant remains an affiliate of Guarantor,
notice of any amendment of any Liabilities (including any amendment of the
Lease) and the granting of any indulgence or extension of time to Tenant to
perform under the Lease. Guarantor hereby also waives, so long as Tenant remains
an affiliate of Guarantor, any and all other notices which by law or under the
terms and provisions of the Lease are required to be given to Tenant, any demand
for or notice of default in the payment of any sums payable by Tenant under the
Lease or in the performance of all and singular the terms, covenants, conditions
and provisions in the Lease required to be performed by Tenant, except as
specifically set forth in Section 1 hereof. Any modification, amendment, change
or extension of any of the terms, covenants or conditions of the Lease which
Tenant (which term shall include, without limitation, a trustee in bankruptcy)
and Owner may hereafter make, or any forbearance, delay, neglect or failure on
the part of Owner in enforcing any of the terms, covenants, conditions or
provisions of the Lease, or any sale, conveyance, mortgaging or other transfer
by Owner of any right, title, interest or estate in or to any of the property of
which the Premises is a part, or any assignment, mortgaging or other transfer by
Tenant of the Lease or any interest therein or any subletting of all or part of
the Premises, or any dissolution or liquidation of Tenant, shall not in any way
affect, impair or discharge the unconditional liability of Guarantor to Owner
hereunder. Notwithstanding the foregoing, Owner agrees that if Tenant is no
longer affiliated with Guarantor, Owner will, in addition to the notices
required by Section 1 hereof, give Guarantor notice of any and all such actions,
event or occurrences as are described in this Section 3. For the purposes
hereof, Tenant shall be deemed to be an affiliate of Guarantor until such time
as Guarantor notifies Owner in writing that Tenant is no longer an affiliate of
Guarantor.
4. Limitations on Guaranty. Notwithstanding anything to the contrary
contained in this Guaranty: (i) if Tenant shall assign its interest in the Lease
as permitted therein and shall be released thereunder of any liability accruing
subsequent to the date of assignment, then Guarantor shall have no further
obligation with respect to Liabilities that accrue hereunder from and after the
date Tenant is released; and (ii) Guarantor shall have no obligation or
liability under this Guaranty for any obligations for payment or performance
that accrue under the Lease during any option periods or renewals of the Lease
if Original Tenant as defined in the Lease is the tenant under the Lease at the
date of expiration of the original term of the Lease. Upon Guarantor's request,
Owner shall confirm in writing the release of liability in favor of Guarantor as
described in clauses (i) and (ii) above.
5. Default of Tenant. If because of Tenant's default, the Lease is
terminated, then Owner shall notify Guarantor thereof, and if Guarantor would
otherwise have continuing liability to Owner hereunder, then at Guarantor's
option upon written notice to Owner, Owner shall enter
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into a New Lease with Guarantor (or an affiliate of Guarantor other than Tenant)
for the balance of the term of the Lease (including option periods), on the same
terms as are set forth in the Lease, and such New Lease shall continue as a
direct lease between Owner and Guarantor or its affiliate (as tenant). As a
condition of Owner's obligation to enter into the New Lease, Guarantor shall
cure all monetary defaults, and other defaults capable of being cured, and shall
reimburse Owner for any costs incurred by Owner in connection with such default,
including reasonable attorneys' fees and court costs.
6. Notices. All notices, consents, requests and approvals
(collectively, "Notices") required or permitted hereunder shall only be
effective if in writing. All Notices shall be sent by Federal Express, Airborne
or similar express courier which delivers only upon signed receipt of the
addressee, by facsimile or by certified mail, with return receipt requested.
Notices to Guarantor shall be sent to 106 West 14th Street, Suite 1700, Kansas
City, Missouri 64105, marked for the attention of Lease Administrator, with a
copy to Lathrop & Gage L.C., 2345 Grand Boulevard, Suite 2500, Kansas City,
Missouri, 64108, marked for the attention of E.T. Bullard, or to such other
addresses as Guarantor may later designate by Notice to Owner. All Notices to
Owner shall be sent to Entertainment Properties Trust, One Kansas City Place,
1200 Main Street, Suite 3250, Kansas City, Missouri, 64105, marked for the
attention of Robert L. Harris, President, with a copy to Stinson, Mag & Fizzell,
P.C., 1201 Walnut, Suite 2800, Kansas City, Missouri, 64105, marked for the
attention of Michael G. O'Flaherty, or to such other address as Owner may later
designate by Notice to Guarantor. All Notices shall be effective upon the date
of receipt by the addressee thereof as shown on the return or courier receipt of
the Notice, on the facsimile confirmation page, or the certified mail receipt,
as applicable.
7. Cumulative Obligations. The amount of liability of Guarantor and all
rights, powers, and remedies of Owner hereunder and under any other agreement
now or at any time hereafter in force between Owner and Guarantor relating to
any obligations or indebtedness of Tenant or Guarantor to Owner shall be
cumulative and not alternative and such rights, powers, and remedies shall be in
addition to all rights, powers, and remedies given to Owner by law.
8. Separate Actions. The agreements, obligations, warranties and
representations of Guarantor hereunder are independent of the obligations of
Tenant. In the event of any default hereunder, a separate action or actions may
be brought and prosecuted against the undersigned, whether Tenant is joined
therein or a separate action or actions are brought against Tenant. Owner may
maintain successive actions for other defaults. Owner's right hereunder shall
not be exhausted by its exercise of any of its rights or remedies until and
unless all indebtedness and obligations hereby guaranteed have been paid and
fully performed.
9. Savings Clause. Should any one or more provisions of this Guaranty be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective.
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10. Successors and Assigns. This Guaranty shall inure to the benefit of
Owner, its successors and assigns, and shall bind the heirs, executors,
administrators, successors, and assigns of Guarantor and any parties
constituting Guarantor.
11. Waiver in Writing. No provision of this Guaranty or right of Owner
hereunder can be waived nor can Guarantor be released from Guarantor's
obligations hereunder except by a writing duly executed by Owner and except as
specifically provided for herein.
12. Attorneys Fees. If it becomes necessary for Owner to employ counsel
to enforce the obligations of Guarantor hereunder, then, to the extent permitted
by law, all reasonable attorneys' fees and expenses in connection therewith of
the prevailing party in any action instituted shall be paid by the other party.
13. General. Guarantor will not exercise any right of subrogation with
respect to any payment made hereunder unless and until all Liabilities shall
have been paid in full; if any payment is made to Guarantor on account of such
subrogation rights at any time when the Liabilities have not been paid in full,
any amounts so paid shall be forthwith paid to Owner to be applied to any of the
Liabilities. This Guaranty may be amended only in writing signed by Guarantor
and Owner. This Guaranty shall be binding upon the successors and assigns of
Guarantor and shall inure to the benefit of Owner and its successors and
assigns. Guarantor represents and warrants that it is a corporation duly
organized, legally existing and in good standing under the laws of the State of
Delaware and that it has the power and authority to execute, deliver and perform
this Guaranty.
Executed as of the date first above written.
AMC ENTERTAINMENT INC.,
(SEAL) a Delaware corporation
ATTEST:
By: /s/ Nancy L. Gallagher By: /s/ Peter C. Brown
- -------------------------- ----------------------
Name: Nancy L. Gallagher Name: Peter C. Brown
Title: Vice President and Secretary Title: President and Chief Executive
Officer
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