Exhibit 10.1
FOURTH AMENDMENT TO
LEASE AGREEMENT
OLP BROOKLYN PAVILION LLC
- LANDLORD -
ADM CINEMA CORPORATION
- TENANT -
AS OF FEBRUARY 11, 2005
PAVILION THEATRE
000 XXXXXXXX XXXX XXXX
XXXXXXXX, XXX XXXX
FOURTH AMENDMENT TO LEASE AGREEMENT
This FOURTH AMENDMENT TO LEASE AGREEMENT (this "AMENDMENT") is made and
entered into as of the 11th day of February, 2005 by and between OLP Brooklyn
Pavilion LLC, a Delaware limited liability company having an office at Xxxxx
000, 00 Xxxxxx Xxxx Xxxx, Xxxxx Xxxx, Xxx Xxxx 00000 ("LANDLORD") and ADM Cinema
Corporation, a Delaware corporation having an address at 00 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("TENANT").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Landlord, as landlord, and Xxxxxxxxx Square Cinema LLC
("XXXXXXXXX"), as tenant, previously entered into that certain Lease Agreement
dated August 9, 2002 (the "ORIGINAL LEASE") affecting certain property known as
The Pavilion Theatre and located at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxx;
WHEREAS, Landlord and Xxxxxxxxx previously entered into that certain First
Amendment to Contract of Sale and Lease Agreement dated as of August 9, 2002
(the "FIRST AMENDMENT");
WHEREAS, Landlord and Xxxxxxxxx previously entered into that certain
Second Amendment to Contract of Sale and Lease Agreement dated as of April 2,
2003 (the "SECOND AMENDMENT")
WHEREAS, Landlord and Xxxxxxxxx previously entered into that certain Third
Amendment to Contract of Sale and Lease Agreement dated as of November 1, 2003
(the "THIRD Amendment"); the Original Lease as amended by the First Amendment,
the Second Amendment and the Third Amendment is hereafter collectively referred
to as the "LEASE");
WHEREAS, Landlord and Xxxxxxxxx (among others) previously entered into
that certain Stipulation of Settlement (Index No. L&T (L&T) 083402/04) dated
September 2, 2004 and affecting, among other things, the Lease, which
Stipulation is being terminated in connection with the execution, delivery and
effectiveness of this Amendment;
WHEREAS, immediately prior to this Amendment, Xxxxxxxxx assigned all of
its right, title and interest in and to the Lease to Tenant and Tenant assumed
all of such right, title and interest, pursuant to the Assignment and Assumption
of Lease attached hereto and made a part hereof as EXHIBIT A; and
WHEREAS, Landlord and Tenant now wish to further amend the Lease as herein
set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the sufficiency of which being hereby acknowledged, the parties hereto do hereby
agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed thereto in the Lease.
2. MINIMUM ANNUAL RENT. Effective February 11, 2005, the Minimum Annual
Rent due pursuant to the Lease shall be modified to be as follows:
BALANCE OF THE INITIAL LEASE TERM:
MINIMUM ANNUAL RENT MONTHLY RENT
2/_/05 - $1,128,000.00 $94,000.00
1/31/13
2/1/13 - $1,152,000.00 $96,000.00
7/31/22
OPTION PERIODS:
FIRST OPTION MINIMUM ANNUAL RENT MONTHLY RENT
8/1/22 - $1,267,200.00 $105,600.00
7/31/32
SECOND OPTION MINIMUM ANNUAL RENT MONTHLY RENT
8/1/32 - $1,393,920.00 $116,160.00
7/31/42
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3. PERCENTAGE RENT. Effective February 11, 2005, a new Section 4.4 shall
be added to the Lease as follows:
"4.4 PERCENTAGE RENT.
A. In addition to the Minimum Annual Rent and all other charges due
and to become due from Tenant pursuant to the terms of this Lease, Tenant
shall also pay to Landlord percentage rent equal to ten percent (10%) of
Gross Receipts (as hereinafter defined) in excess of Eight Million Dollars
("PERCENTAGE RENT") for each calendar year (or fraction thereof) during
the Lease Term, as same may be extended. Each calendar year or fraction
thereof shall be considered as an independent accounting period for the
purpose of computing the amount of Percentage Rent due or to become due
pursuant to the terms hereof. Percentage Rent shall be payable annually as
hereinafter set forth at such place as Landlord may designate, without any
prior demand therefor and without any set off or deduction whatsoever.
B. Percentage Rent with respect to each calendar year (or fraction
thereof) shall be paid on or before the first day of the next succeeding
March (E.G., Percentage Rent due for calendar year 2005, if any, shall be
due and payable by Tenant on March 1, 2006) except that Percentage Rent
for the final calendar year (or fraction thereof) of the Lease Term, if
any, shall be due and payable within thirty days after the termination of
this Lease. Percentage Rent for partial calendar years shall be calculated
and payable on a pro-rated basis (by way of example, Percentage Rent for a
partial calendar year consisting of only six months would be calculated
based on a breakpoint of Four Million Dollars). On or before the date
fixed for payment of Percentage Rent as provided above, and whether or not
Percentage Rent is payable with respect to the applicable period, Tenant
shall deliver to Landlord a written statement signed and certified to
Landlord as true and correct by a duly authorized officer of Tenant,
showing accurately and in detail the amount of Gross Receipts during the
preceding calendar year (or fraction thereof). Each such statement shall
be in such form and style and contain such details and breakdown as
Landlord shall reasonably require.
C. As used herein, "Gross Receipts" shall mean the aggregate total
of all box office receipts (I.E., the actual sale price of all tickets and
other admissions to the theater at the Demised Premises whether tickets
are purchased on-site at the Demised Premises or off-site from other
sources).
D. Tenant shall prepare and keep available on the Demised Premises
adequate books, records, and accounts in form and substance sufficient to
substantiate the amount of Gross Receipts for each year or fraction
thereof. At any reasonable time and upon three (3) days prior written
notice, Landlord may cause a complete audit to be made of Tenant's
business affairs and records relating to the Demised Premises for the
period covered by any statement issued by Tenant. Such audit shall be
performed by Landlord or by an accountant of Landlord's choice. Tenant
shall promptly remit any deficiency in Percentage Rent established by such
audit. If said audit shall disclose that actual Gross Receipts exceeded
the Gross Receipts reported by Tenant by two percent (2%) or more, then
Tenant shall also promptly pay the cost of the audit together with the
deficiency in Percentage Rent.
E. The terms of this Section 4.4 shall survive the expiration or
earlier termination of this Lease."
4. SECURITY DEPOSIT; ISSUANCE OF AIX STOCK TO LANDLORD. A. Tenant
acknowledges that Landlord has applied all of the Security Deposit previously
held by Landlord pursuant to the Lease to certain open and outstanding
delinquent charges due pursuant to the Lease from Xxxxxxxxx, the original tenant
under the Lease, and that accordingly no security deposit is being held by
Landlord, and Tenant waives and relinquishes any right it has or may have had to
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such Security Deposit. In consideration of Landlord's agreement to consent to
the assignment of the interest of the "tenant" under the Lease from Xxxxxxxxx to
Tenant and in consideration of Landlord's agreement to waive the requirement for
a security deposit under the Lease, immediately prior to this Amendment (and as
a condition to the effectiveness hereof), Tenant at Tenant's expense has
delivered to Landlord a stock certificate(s) evidencing Landlord's ownership of
Forty Thousand (40,000) fully paid and non-assessable shares of Class A Common
Stock, par value $0.001 per share, of Access Integrated Technologies, Inc.
(AMEX: AIX) (the "AIX Stock"), which shall be restricted as provided under
Paragraph 4(c) hereof and which shall be the sole property of Landlord (and are
specifically not in the nature of security for Tenant's performance under the
Lease).
B. REPRESENTATION AND WARRANTIES OF LANDLORD. In connection with the AIX
Stock, Landlord represents and warrants to Tenant as follows:
(i) INVESTMENT INTENT. Landlord acknowledges that the AIX Stock has
not been registered under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws and are being issued hereunder in
reliance upon applicable exemptions from such registration for transactions not
involving a public offering. The AIX Stock will be acquired for investment
purposes by Landlord and not with a view to the resale or distribution of any
part thereof. Landlord has no present intention to sell or otherwise dispose of
the AIX Stock, except in compliance with the provisions of the Securities Act.
(ii) INFORMATION. Landlord, either alone or together with its
representatives, (i) has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks involved in acquiring the AIX Stock, (ii) is able to bear the economic
risks involved in acquiring the AIX Stock, and (iii) has had the opportunity to
ask questions of, and receive answers from, Tenant and persons acting on
Tenant's behalf concerning the terms and conditions of the AIX Stock and to
obtain any additional information in connection therewith.
(iii) LANDLORD'S STATUS. At the time Landlord was offered the AIX
Stock, it was, and at the date hereof it is, and on the date it acquires the AIX
Stock it will be either: (i) an "accredited investor" as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
"qualified institutional buyer" as defined in Rule 144A(a) under the Securities
Act. Landlord is not required to be registered as a broker-dealer under Section
15 of the Exchange Act.
(iv) GENERAL SOLICITATION. Landlord is not acquiring the AIX Stock
as a result of any advertisement, article, notice or other communication
regarding the AIX Stock published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
C. RESTRICTIONS ON TRANSFER.
(i) Landlord agrees that it will not transfer or otherwise dispose
of (each, a "Disposition" or "Dispose") any of the shares of AIX Stock except
upon the terms and conditions specified herein and Landlord will cause any
subsequent holder of Landlord's shares of AIX Stock to agree to take and hold
the shares of AIX Stock subject to the terms and conditions of this Paragraph 4,
if such shares of AIX Stock are required to include a legend pursuant to
Paragraph 4(C)(ii) hereof.
(ii) Each certificate representing the shares of AIX Stock issued to
Landlord or to any subsequent holder of Landlord's shares shall include a legend
in the following form; PROVIDED, HOWEVER, that such legend shall not be required
(and shall be removed) if a Disposition is being made in connection with a sale
of shares of AIX Stock registered under the Securities Act, or in connection
with a sale in compliance with Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or pursuant to any other exemption that may be
available to Landlord:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS THEREFROM.
THESE SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED THEREUNDER.
5. USE. Effective as of the date hereof, Article 6 of the Lease ("Use")
shall be supplemented to provide that, subject to Tenant's compliance with Legal
Requirements and Restrictions, and subject to Tenant's compliance with the other
terms and provisions of the Lease, Tenant's permitted use of the Demised
Premises shall also include the incidental (I.E., incidental to the primary use
as a "first run" movie theatre) operation of a restaurant and bar.
6. LIFE INSURANCE POLICY. Effective as of the date hereof, Section 8.10 of
the Lease ("Life Insurance Policy") shall be deleted from the Lease and shall be
of no further force or effect. Tenant shall have no right or claim to amounts,
if any, on deposit with Landlord for escrows for payment of renewal premiums on
the Life Insurance Policy.
7. TENANT EQUIPMENT. A. Notwithstanding anything in the Lease (including,
without limitation, Article 9 thereof) to the contrary, Landlord agrees that any
digital projectors, servers and/or other items of trade equipment and personal
property that Tenant may install or place upon the Demised Premises from and
after the date hereof shall be and remain the property of Tenant and shall not
be the property of the Landlord. Any such installation shall be done by Tenant
at Tenant's sole cost and expense and shall be in compliance with and subject in
all respects to, the terms and conditions of the Lease, specifically including,
without limitation, Article 9 thereof. Tenant hereby indemnifies and holds
Landlord and Landlord's Affiliates harmless from any liability, cost,
obligation, expense or claim of lien in any manner relating to the installation,
placement, removal or financing of any such trade equipment and/or personal
property.
B. Notwithstanding anything in the Lease to the contrary, Landlord hereby
agrees to relinquish, release and waive any claim it has or may have had under
the Lease to any trade equipment, furniture, concession stands, projection
equipment, sound equipment, personal property and/or trade fixtures now located
at the Demised Premises and previously used by Xxxxxxxxx in the ordinary course
of Xxxxxxxxx'x business operations within the Demised Premises since the
commencement of the Lease on August 9, 2002, specifically including, but not
limited to, the items listed on SCHEDULE A annexed hereto and made a part
hereof.
8. ASSIGNMENT. Effective as of the date hereof, (x) a new sentence shall
be added after the first sentence of Section 11.1 of the Lease ("Restrictions"),
as follows: "Notwithstanding the foregoing prohibition, Landlord shall not
unreasonably withhold, condition or delay its consent to a proposed assignment
of the Lease by Tenant" and (y) the last sentence of such Section 11.1 shall be
deleted from the Lease and shall be of no further force or effect.
9. WORK; COMPLETION DATES.
A. By no later than (x) August 31, 2005 with respect to the Fire System
and (y) November 30, 2005 with respect to all other items (as applicable, the
"OUTSIDE DATE"), Tenant, at Tenant's sole cost and expense, shall (i) complete
construction of the Additional Theater (including, without limitation, obtaining
an amended final and permanent certificate of occupancy for the Additional
Theater), (ii) complete the installation of the Doorways with a contractor(s)
reasonably acceptable to Landlord, (iii) complete the installation of the Fire
System with a contractor(s) reasonably acceptable to Landlord and (iv) obtain
the final permanent and unconditional certificate of occupancy for the entire
Demised Premises and pay in full and satisfy of record any and all attendant
violations of record against the Demised Premises (with Tenant being obligated,
at Tenant's cost, to maintain the temporary certificate of occupancy in full
force and effect and to extend same as required until receipt of the final,
permanent and unconditional certificate of occupancy for the entire Demised
Premises). All of the foregoing shall be performed in compliance with all of the
terms, provisions and requirements set forth in the Lease as amended hereby and
in compliance with all applicable laws, statutes, rules, regulations and
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permits. As used herein, "complete" or "completion" shall mean that the
Additional Theater, Doorways and Fire System have been fully constructed or
installed, as the case may be, in accordance with plans and specifications
therefor that have been previously approved in writing by Landlord (which
approval shall not be unreasonably withheld), have been paid for in full by
Tenant (with Landlord having received original lien waivers in recordable form
acknowledging receipt of such payment from the applicable contractor or
subcontractor) and with all permits, approvals, certificates and/or inspections
as may be required under applicable law, rule or regulation having been received
and delivered to Landlord. Upon completion of the Fire System, Tenant shall also
obtain and provide to Landlord true copies of all applicable documentation and
permits evidencing compliance with, and approval from, among others, all NYC
agencies and authorities including, but not limited to, the NYC Board of
Underwriters and the Department of Buildings. Further, during the Term of the
Lease (as same may be extended), Tenant, at Tenant's sole cost and expense,
shall cause the Fire System to be properly maintained and serviced.
B. Notwithstanding anything to the contrary herein, Tenant shall cause the
Fire System and/or Doorways to be installed as soon as possible in the event
that any governmental authority shall request same in writing or issue a
violation against the Demised Premises for the lack thereof or in the event that
any insurance company, Board of Fire Underwriters or similar authority shall
require same on order for its insurance to remain in full force and effect. It
shall constitute an event of default under the Lease (not requiring additional
notice or grace period) if any of the foregoing items is not completed or
installed by the Outside Date (or such earlier date as may be required pursuant
to the terms of this Paragraph 9). All dates herein provided are time of the
essence as provided in the Lease and are not subject to "Force Majeure".
C. Landlord is currently holding the total sum of $429,815.00 representing
the unexpended portion of the Landlord Improvement Allowance and the Improvement
Holdback. Provided there shall be no default beyond applicable notice and/or
grace period under the Lease and provided that any and all violations against
the Premises have been paid in full and discharged of record, such remaining sum
shall be disbursed by Landlord to Tenant upon the completion and/or
installation, as applicable, of all of the items set forth in Paragraph 9A (i)
through (iv) above in accordance with the terms and provisions of the Lease as
amended hereby. If Tenant fails to complete any of such items by the applicable
Outside Date (or by such earlier date as may be required pursuant to the terms
of this Paragraph 9), then same shall constitute an event of default under the
Lease not requiring additional notice or grace period, and, in addition to all
rights and remedies available to Landlord as a result of an event of default,
Landlord shall also be permitted to retain the remaining portion of the Landlord
Construction Allowance and the Improvement Holdback (but same shall not mitigate
or otherwise affect Tenant's obligations to complete all of the required work).
10. AS IS. Supplementing Sections 2.2 and 4.2 of the Lease, Tenant
acknowledges and agrees that Landlord would not have consented to the assignment
of the Lease to Tenant and that Landlord would not have entered into this
Amendment without the provisions of this Paragraph 10. It is understood and
acknowledged by Tenant that the Lease is a triple net, bondable lease and that
the Demised Premises are leased on an "as is", where is" basis in their existing
condition and with all faults and defects whether latent or patent, all of which
are the obligation of the Tenant under the Lease. Neither Landlord nor any of
Landlord's representatives, employees, members, officers, directors, partners or
other agents has made or will make any representations or warranties whether as
to the physical condition of the Demised Premises, the state of repair of the
Demised Premises, their compliance with applicable law or otherwise, and Tenant
acknowledges same and acknowledges and agrees that Tenant has not and will not
rely on any representations, warranties or other statements, whether oral or
written, in its decision to accept an assignment of the Lease.
11. NOTICES. Effective the date hereof, the address for notices to Tenant
under the Lease is as follows:
ADM Cinema Corporation
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
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12. RATIFICATION. Except as expressly modified by this Amendment, the
Lease remains in full force and effect and is hereby ratified and confirmed by
the parties.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Amendment as of the date first hereinabove written.
LANDLORD:
OLP BROOKLYN PAVILION LLC, a Delaware limited liability company
By: OLP-MTC Holdings, LLC, its Sole Member
By: OLP Movies LLC, its Manager
One Liberty Properties, Inc, its Sole Member
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President
TENANT:
ADM CINEMA CORPORATION, a Delaware corporation
By: /s/ A. Xxxx Xxxx
--------------------------
Name: A. Xxxx Xxxx
Title: CEO
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