EXHIBIT 10.41
FIRST AMENDMENT TO
CONTRACT OF SALE AND LEASE AGREEMENT
▇▇▇▇▇▇▇▇▇ SQUARE LLC
- Seller -
OLP BROOKLYN PAVILION LLC
- Purchaser -
▇▇▇▇▇▇▇▇▇ SQUARE CINEMA LLC
- Tenant -
as of August 9, 2002
Pavilion Theatre
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
FIRST AMENDMENT TO CONTRACT OF SALE AND TO LEASE AGREEMENT
This FIRST AMENDMENT TO CONTRACT OF SALE AND LEASE AGREEMENT (this
"Amendment") is made and entered into as of the 9th day of August, 2002 by and
between ▇▇▇▇▇▇▇▇▇ Square LLC, a New York limited liability company having an
address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Seller"), OLP
Brooklyn Pavilion LLC, a Delaware limited liability company having an office at
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (`Purchaser") and
▇▇▇▇▇▇▇▇▇ Square Cinema LLC, a New York limited liability company having an
address at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ (`Tenant").
W I T N E S S E T H:
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WHEREAS, Seller and Purchaser entered into that certain Contract of
Sale calling for the sale and purchase and leaseback by Tenant of the Premises
therein defined (the "Contract of Sale");
WHEREAS, Seller previously had a temporary certificate of occupancy for
the Premises which during Purchaser's Due Diligence Period the parties learned
that such temporary certificate of occupancy had expired but Seller has an
approved application in place with the Buildings Department for the completion
of the Premises;
WHEREAS, Seller previously obtained Public Assembly permits for certain
of the theatres within the Premises and has applied for such permits in respect
of the remaining theatres;
WHEREAS, upon learning of the expiration of the temporary certificate
of occupancy and in order to address the situation, Seller had two (2) separate
licensed architectural firms inspect the governmental filings, the existing
plans and specifications for the Premises and the condition of the Premises
itself;
WHEREAS, Seller had its architect resubmit its as-built building plans
for the Premises as it exists today with the Buildings Department and such plans
were approved in writing by the City of New York Buildings Department on August
7, 2002 and on account of such approval by the Buildings Department and the
results of the inspection of the Premises by Seller's two (2) licensed
architectural firms, Seller believes to the best of its knowledge and hereby
represents and warrants to Purchaser that the physical condition of the Premises
complies in all material respects with applicable law (other than for certain
permitting items as herein reference) and is safe and suitable for occupancy;
WHEREAS, Seller previously obtained a written waiver by the City of New
York Buildings Department of the compliance by the Premises with the provisions
of Local Law 58;
WHEREAS, during such inspections by Seller's architects and by
Purchaser, the parties have agreed that certain improvements to the Premises are
advisable as herein set forth; and
WHEREAS, Seller and Purchaser wish to amend the Contract of Sale as
herein set forth and Purchaser and Tenant wish to express certain agreements
they have reached in respect of the Master Lease all in accordance with the
terms hereof in order to set up a specific procedure to provide for the formal
compliance by the Premises with all permitting requirements and the improvement
to the safety systems and handicapped accessibility to the Premises.
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. IMPROVEMENT HOLDBACK. A. Seller agrees that in addition to the $500,000
holdback from the purchase price for the Landlord Construction Allowance for the
Additional Theatre, Purchaser shall holdback from the purchase price an
additional $500,000 (the "Improvement Holdback"). The parties agree that the
Improvement Holdback will be disbursed in accordance with the following:
i. Provided there shall be no default beyond applicable notice
and grace period under the Master Lease (which has not been fully cured) and
provided that any violations against the Premises in respect thereto have been
paid in full and satisfied of record, Purchaser shall disburse to Seller
$250,000 upon the receipt by Purchaser of (i) a valid temporary certificate of
occupancy for all eight (8) existing theatres at the Premises (the "TCO") and
(ii) valid Public Assembly permits (collectively, the "permits") for the
occupancy of all existing eight (8) theatres indicating a total seating capacity
of no less than 990 seats (provided that Tenant has indicated that one (1) of
the theatres may not need a Public Assembly permit under applicable law due to
it having only 54 seats and Purchaser agrees that so long as Tenant can
establish to Purchaser's reasonable satisfaction that no Public Assembly permit
would be required for such theatre, then the receipt of Public Assembly permits
for the remaining seven (7) theatres with 936 seats shall suffice for purposes
hereof as the "Permits"). Tenant agrees to diligently pursue, at its sole cost
and expense, the receipt of the TCO and Permits as expeditiously as reasonably
possible and agrees that (x) Tenant shall pay to Purchaser as additional rent
under the Master Lease $50,000 per month starting February 9, 2003 and on the
9th day of each month thereafter that the TCO and Permits have not been issued
by the applicable governmental authorities and received by Purchaser and any
attendant violations of record have not been paid in full and satisfied of
record and (y) that it shall constitute an event of default under the Master
Lease (not requiring additional notice or grace period and allowing Purchaser to
pursue its right thereunder and to retain the remaining portion of the Landlord
Construction Allowance and the Improvement Holdback) if a permanent certificate
of occupancy for the entire Premises (consisting of eight (8) theatres or if the
Additional Theatre is built nine (9) theatres) and the Permits have not been
received and any attendant violations of record have not been paid in full and
satisfied of record within eighteen (18) months from the date hereof.
ii. Provided there shall be no default beyond applicable notice
and grace period under the Master Lease (which has not been fully cured) and
provided that any violations against the Premises in respect thereto have been
paid in full and satisfied of record, Purchaser shall disburse to Seller
$125,000 upon the completion of (i) the Elevator (hereafter defined), (ii) the
Fire System (hereafter defined) and (iii) the Doorways (hereafter defined). For
purposes hereof, "completion" shall mean that the Elevator, Fire System and
Doorways and all attendant modifications to the Premises have been (x) finished
being constructed or installed, as the case may be, in accordance with plans and
specifications therefor that have been approved of in writing by Purchaser
(which approval shall not be unreasonably withheld), (y) paid for in full by
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Tenant and Purchaser shall have received original lien waivers in recordable
form acknowledging such payment and (z) all permits, approvals, certificates or
inspections as may be required under applicable law, rule or regulation have
been received and delivered to Purchaser. Tenant agrees to deliver to Purchaser
preliminary plans and specifications within thirty (30) days of the date hereof.
Purchaser shall, within seven (7) business days of its receipt of such plans and
specifications, either give its written consent thereto or if Purchaser shall
have an objection then it shall give such objection in writing to Tenant.
Purchaser agrees to act reasonably in respect of its approval of the plans and
specifications. Tenant shall make any revisions reasonably required by Purchaser
within seven (7) days of its receipt of the request therefor from Purchaser.
This process will continue until the plans and specifications have been approved
of in writing by Purchaser (which approval shall not be unreasonably withheld).
Upon the earlier to occur of (a) ten (10) days after the receipt of the TCO and
Permits or (b) ninety (90) days from the date hereof, Tenant shall submit the
approved plans and specifications to the applicable building authority for work
or similar permits and approvals and Tenant agrees to make such modifications to
the plans and specifications as required by applicable governmental authorities
(but only upon notice to Purchaser). Promptly following receipt of all necessary
work permits or similar approvals, Tenant shall cause the Elevator, Fire System
and Doorways and related modifications to the Premises to be constructed in good
condition and in full compliance with all laws, rules and regulations. Tenant
agrees to cause such construction or installation to be done as expeditiously as
reasonably possible and agrees that it shall constitute an event of default
under the Master Lease (not requiring additional notice or grace period and
allowing Purchaser to pursue its right thereunder and to retain the remaining
portion of the Landlord Construction Allowance and the Improvement Holdback) if
such construction and installation is not completed in a prompt manner but in
any event no later than eighteen (18) months from the date hereof (or six (6)
months in respect of the Fire System and the Doorways). Notwithstanding anything
to the contrary herein, Tenant agrees to cause the Elevator, Fire System and/or
Doorways to be installed as soon as is possible in the event any governmental
authority shall request same in writing or issue a violation against the
Premises for lack thereof or in the event that any insurance company, Board of
Underwriters or similar authority shall require same in order for its insurance
to remain in full force and effect. For purposes hereof, the term "Elevator"
shall mean an automatic elevator that is handicapped accessible and approved
serving all levels at the Premises in order to make the entire Premises
handicapped accessible. For purposes hereof, the term "Fire System" shall mean a
Class E Fire Safety System or such higher (but not lower) level fire safety
system as may be required by applicable law; Tenant's architect has indicated to
Purchaser that the Premises does not need a fire safety system under applicable
law but Tenant and Purchaser have agreed that for the installation of one as
herein provided for additional safety precautions for the Premises. For purposes
hereof, the term "Doorways" shall mean the replacement of all doors and
appurtenant locking mechanisms in the Premises with a minimum of two (2) hour
fire retardant doors and appurtenant locking and opening mechanisms (or such
higher retardancy period as may be required by applicable law, rule or
regulation) and the widening, reconfiguring and/or reconstruction of those
doorways, entrances or exits at the Premises that are required to be widened,
reconfigured or reconstructed under applicable law or in the reasonable opinion
of either Purchaser's or Tenant's licensed architects should be widened,
reconfigured or reconstructed so as to best improve the access to the Premises
and the egress from the Premises both for safety purposes and for handicapped
accessibility.
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iii. Provided there shall be no default beyond applicable notice
and grace period under the Master Lease (which shall not have been fully cured)
and provided that any violations against the Premises in respect thereto have
been paid in full and satisfied of record, Purchaser shall disburse to Tenant
the final $125,000 upon the receipt by Purchaser of a written waiver by the City
of New York's Mayor's Office for People with Disabilities of the entire Premises
with the provisions of City of New York Local Law 58 (the "Waiver"). Tenant
agrees that it shall constitute an event of default under the Master Lease (not
requiring additional notice or grace period and allowing Purchaser to pursue its
right thereunder and to retain the remaining portion of the Landlord
Construction Allowance and the Improvement Holdback) if the Waiver is not
received by Purchaser within eighteen (18) months from the date hereof.
B. Seller and Tenant agree that all work required hereinabove shall be
done as expeditiously as reasonably possible, in compliance with all applicable
laws and will be fully paid for by Seller or Tenant. Seller and Tenant agree
that in connection with the performance of the work herein referenced, that they
shall obtain (at their sole cost and expense) customary warranties on the items
installed and the construction work (as reasonably approved by Purchaser).
Tenant further agrees that, at its sole cost and expense after construction and
installation of the Elevator and Fire System, Tenant shall obtain a customary
service contract on such items and shall maintain same throughout the term of
the Lease (from such companies and on such terms as are reasonably satisfactory
to Purchaser). Notwithstanding anything to the foregoing, Tenant is and remains
obligated to comply in all respects with all applicable local, state and federal
law, rule or regulation in respect of the operation and condition of the
Premises. In addition, Seller and Tenant agree that they shall give a copy of
any filings (together with all appurtenant plans or other documentation) they
propose to make with any governmental authority to Purchaser at least two (2)
business days prior to such filing for Purchaser's approval, such approval not
to be unreasonably withheld.
2. ADDITIONAL THEATRE. Purchaser and Tenant agree that the reference to an
outside date of May 31, 2007 in Paragraph 9.4 of the Master Lease for the
completion of the Additional Theatre is hereby shortened to be November 9, 2003.
3. MISCELLANEOUS. A. Except as modified hereby, the Contract of Sale and
the Master Lease remain in full force and effect.
B. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Contract of Sale, unless the context shall
otherwise clearly require.
C. Tenant acknowledges and agrees that a default by either Seller or
Tenant of any of their obligations hereunder shall constitute an event of
default under the Master Lease. Completion dates herein provided are time of the
essence as provided in the Master Lease and are not subject to Force Majeure
generally but may be extended solely due to a delay that can be directly
attributed to an act of war or terrorism in the New York City metropolitan area
following the date hereof. Tenant understands and agrees that none of the
circumstances herein set forth shall in any manner allow it to ▇▇▇▇▇ any portion
of its rent under the Master Lease. Seller and Tenant represent and warrant the
recitals hereinabove are true to the best of their knowledge.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this First Amendment as of the date first hereinabove written.
▇▇▇▇▇▇▇▇▇ SQUARE LLC, as Seller
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
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Title: Member
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OLP BROOKLYN PAVILION LLC, as Purchaser
by: OLP-MTC Holdings, LLC, its sole member
by: OLP Movies LLC, its manager
by: One Liberty Properties, Inc. its sole member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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▇▇▇▇▇▇▇▇▇ SQUARE CINEMA LLC, as Tenant
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
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Title: Member
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/s/ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇, personally as guarantor to confirm
that his guaranty of the Master Lease includes
the guaranty of the covenants of Tenant herein provided
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