Common use of Improvement Projects Clause in Contracts

Improvement Projects. (a) Prior to the Closing, Parent and the Companies shall use commercially reasonable efforts to complete or cause to be completed all Improvement Projects as promptly as reasonably practicable. All Improvement Projects completed or caused to be completed by Parent and the Companies prior to the Closing shall be completed (i) in compliance with the terms and conditions of, and in accordance with the drawings and specifications set forth in, the applicable Improvement Contracts and the applicable Theatre Lease; (ii) in compliance with all applicable Laws; (iii) in a good and workmanlike manner by legally permitted and qualified professionals experienced in performing the respective types improvements included within the Improvement Projects; (iv) using at least the same quality of products and materials as were used in connection with the construction project completed at the Trexlertown Movie Tavern Theatre prior to the Agreement Date; and (v) at such times and in such a manner as to minimize the disruption to the Business at each affected Theatre (clauses (i) through (v) inclusive, the “Improvement Standards”). In completing the Improvement Projects prior to the Closing, Parent and the Companies shall not, and shall cause their respective Affiliates not to, without the prior written consent of Buyer in each instance (such consent not to be unreasonably withheld, conditioned or delayed), (A) terminate or amend any Improvement Contract or Theatre Lease or waive any material provision thereof; (B) enter into any change order with respect an Improvement Contract; (C) incur Improvement Expenses with respect to any Improvement Project in excess of the agreed upon budgeted amounts for such Improvement Project set forth in Schedule 2(f); or (D) amend any Lease, or enter into any other Contract with a landlord, that would have the effect of reducing the Landlord Reimbursements with respect to any Improvement Project to an amount less than the agreed upon budgeted amounts for such Landlord Reimbursements set forth in Schedule 2(f) (clauses (A) through (D) inclusive, the “Improvement Restrictions”). Following prior notice from Buyer, Parent and the Companies shall provide Buyer reasonable access to the Leased Premises at which the Improvement Projects are being completed (together with invoices or any other documentation relating to the Improvement Expenses incurred with respect to such Improvement Projects) to monitor the progress and cost of the Improvement Projects. (b) Following the Closing, Buyer shall use commercially reasonable efforts to complete or cause to be completed all uncompleted Improvement Projects as promptly as reasonably practicable. All Improvement Projects completed or caused to be completed by Buyer following the Closing shall be completed in accordance with the Improvement Standards. In completing the Improvement Projects following the Closing, Buyer shall not, and shall cause its Affiliates not to, without the prior written consent of Parent in each instance (such consent not to be unreasonably withheld, conditioned or delayed), take any action included within the Improvement Restrictions. Following prior notice from Parent, Marcus and Buyer shall provide Parent and its representatives reasonable access to the Leased Premises at which the Improvement Projects are being completed (together with invoices or any other documentation relating to the Improvement Expenses incurred with respect to such Improvement Projects) to monitor the progress and cost of the Improvement Projects. (c) At the Closing, Parent and the Companies shall deliver or cause to be delivered to Buyer a correct and complete statement of all Improvement Expenses paid, and all Landlord Reimbursements received (or reasonably expected to be received), by Parent and the Companies prior to the Closing (the “Pre-Closing Amounts”), including reasonable supporting written evidence of all such Improvement Expenses and Landlord Reimbursements. As soon as reasonably practicable following the completion of the last Improvement Project to be completed, Buyer shall deliver or cause to be delivered to Parent (i) a correct and complete statement of all Improvement Expenses paid, and all Landlord Reimbursements received (or reasonably expected to be received), by Buyer following the Closing (the “Post-Closing Amounts”), including reasonable supporting written evidence of all such Improvement Expenses and Landlord Reimbursements; and (ii) based on such Post-Closing Amounts and the Pre-Closing Amounts, a calculation of (A) the aggregate amount of all Improvement Expenses, (B) the aggregate amount of all Landlord Reimbursements, (C) the Net Improvement Expenses Amount and (D) the Net Improvement Expenses Overage Amount (the “Proposed Improvement Calculations”). In the event of any dispute among the parties with respect to the Proposed Improvement Calculations, including the Net Improvement Expenses Overage Amount, such dispute shall be resolved in accordance with the procedures described in Section 2.5(c) mutatis mutandis. (d) If the Net Improvement Expenses Overage Amount is a positive number, then (i) Buyer shall be entitled to retain all Luxury Reimbursements actually received by Buyer and its Affiliates prior to the date on which the Net Improvement Expenses Overage Amount is finally determined pursuant to Section 5.25(c) up to the amount of the Net Improvement Expenses Overage Amount, and (ii) if such retained Luxury Reimbursements are less than the Net Improvement Expenses Overage Amount, then within five (5) Business Days after the date on which the Net Improvement Expenses Overage Amount is finally determined pursuant to Section 5.25(c), Buyer and Parent shall deliver a joint written instruction to the Escrow Agent directing the Escrow Agent to distribute to Buyer cash in the amount of such shortfall from the Escrow Fund.