*THIS INFORMATION HAS BEEN OMMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24b-2 WHICH HAS BEEN FILED SEPARATELY WITH THE
COMMISSION.
AMENDMENT TO CONCESSION LEASE AGREEMENT
THIS AMENDMENT TO CONCESSION LEASE AGREEMENT, entered into as of April 23,
1997, between PACIFIC CONCESSIONS, INC., a California corporation ("Tenant"),
and CINEMASTAR LUXURY THEATERS, INC., a California corporation formerly known
as Nickelodeon Theater Co., Inc. ("Landlord"), is made with reference to the
following facts:
RECITALS
A. Tenant and Landlord entered into a Concession Lease Agreement (as
amended, the "Lease") dated March 6, 1992, whereby Landlord granted to Tenant
an exclusive sublease to the concession area within the Mission Marketplace
Theatre located at Mission and Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx, and,
under an amendment to the Lease, the concession area within the Galaxy 6
Cinemas located at the Xxxxx Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx.
Any capitalized terms not defined herein that are defined in the Lease shall
have the meanings set forth in the Lease.
B. Tenant and Landlord desire to amend the Lease to include as
additional theatres thereunder the Chula Vista 6 located in Chula Vista,
California, the Ultraplex 14 at Mission Grove located in Riverside,
California, the Ultraplex 10 at University Village in Riverside, California,
and the Ultraplex 10 at Perris in Perris, California (the "Additional
Theatres"), pursuant to the terms hereof.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1. ADDITION OF THEATRES. Recital A of the Lease shall be amended
in its entirety as follows:
Landlord owns or leases and operates the following theatres
(the "Theatres").
Mission Marketplace Theatre
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 ("Mission Marketplace Theatre");
Galaxy 6 Cinemas
0000 X. Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000 (the "Bonsall Theatre");
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Chula Vista 6
000 Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000 (the "Chula Vista 6");
Ultraplex 10 at University Village
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 (the "University Village Theatre");
Ultraplex 10 at Perris
0000 X. Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000 (the "Perris Theatre");
Ultraplex 14 at Mission Grove
000 Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 (the"Ultraplex 14");
The Chula Vista 6, the University Village Theatre, the Perris
Theatre, and the Ultraplex 14 are collectively referred to as
the "Additional Theatres".
2. TERM
Section 3 of the Lease shall be amended in its entirety as
follows:
3. Term:
a. The term of this Agreement shall commence
on (i) the date hereof as to the Mission Marketplace Theatre; (ii)
May 8, 1992, as to the Bonsall Theatre; and (iii) May 1, 1997, as
to the Additional Theatres. Subject to the provisions of Section
3.b, the term of this Agreement as to the Mission Marketplace
Theatre and the Bonsall Theatre shall continue until the later of
(a) November 7, 2000 (the "Expiration Date"), or (b) one year
after all indebtedness under the Loan Agreement (as hereafter
defined) has been paid in full; provided that the term may be
further extended as outlined below. Subject to the provisions of
Section 3.c, the term of this Agreement as to the Additional
Theatres shall continue until the later of (1) the date that
aggregate Net Concession Sales reaches $ * (the "Threshold
Amount") for the Theatres and the theatre known as the Chula
Vista 10 in Chula Vista, California, during the period after May
1, 1997, and continuing as to each such theatre as long as Tenant
remains the tenant of the Concessions Areas under this
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Agreement or the Concession Lease Agreement between CinemaStar
Luxury Cinemas, Inc., and Tenant dated February 22, 1993, as
applicable, or (2) the date on which Landlord pays all accrued
interest and principal under the Secured Promissory Note dated
April 23, 1997, in the original principal amount of $2,000,000
made by Landlord payable to Tenant (the "$2,000,000 Promissory
Note"); provided, however, that the term as to all Theatres shall
be further extended as follows (the "Extended Term"); If prior to
April 24, 1998, Landlord fails to repay Tenant principal of at
least $1,000,000, and accrued interest, under the $2,000,000
Promissory Note, then the term as to the Additional Theatres
shall be extended for six months; if the entire principal and
accrued interest is not paid prior to April 24, 1999, then the
term as to the Mission Marketplace Theatre and the Bonsall
Theatre shall be extended 18 months and the term as to the
Additional Theatres shall be extended an additional 12 months; if
the entire principal and accrued interest is not paid prior to
each subsequent April 24 thereafter, then on each such
anniversary, the term as to all Theatres shall be extended an
additional 12 months. Nothing herein shall affect the terms of
the $2,000,000 Promissory Note and any rights and remedies of
Tenant thereunder.
b. Landlord may terminate this Agreement early as to either
of the Mission Marketplace Theatre or the Bonsall Theatre if
Landlord is not then in default under any term or provision of
this Agreeement by giving Tenant at least three months' prior
written notice of such early termination, and upon payment of the
following sums at least 10 days prior to the effective date of
the termination:
(i) All amounts owing to Tenant pursuant to paragraph
8(s) hereof as to the Theatre to be terminated;
(ii) The loan, if any, outstanding under the Loan
Agreement made with respect to the Theatre to be terminated, i.e.,
the Promissory Note, dated March 6, 1992, in the original
principal amount of $600,000 for the Mission Marketplace Theatre,
or the Promissory Note, dated as of May 8, 1992, in the original
principal amount of $300,000 for the Bonsall Theatre.
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(iii) An early termination fee equal to *
of the average monthly Net Concession Sales for the
immediatedly preceding twelve-month period attributable to the
Theatre to be terminated, multiplied by the number of total or
partial months remaining until the expiration date, *
(iv) An amount equal to $ *(as to the Mission
Marketplace Theatre) or $ *(as to the Bonsall Theatre)
multiplied by the number of total or partial months remaining
until the Expiration Date; and
(v) All principal and accrued interest under the
$2,000,000 Promissory Note.
The application of the foregoing formula is
demonstrated as follows:
c. If Landlord (i) pays Tenants all amounts when due
under the $2,000,000 Promissory Note, and (ii) fails to reach the
Threshold Amount by October 31, 1999, then Landlord may
thereafter terminate this Agreement as to the Additional Theatres
upon thirty (30) days' prior written notice to Tenant if Landlord
pays to Tenant on the effective date of termination *percent
of the difference between the Threshold Amount, and the amount of
Net Concession Sales actually earned at the theatres, the sales of
which are included in the Threshold Amount. Furthermore, at any
time during
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the term of this Agreement Landlord may elect to terminate this
Agreement early as to any or all Additional Theatres if Landlord
first gives Tenant three months' prior written notice of such
early termination, and if Landlord pays to Tenant the Prorated
Portion of the following amounts at least (10) days prior to the
termination date:
(i) all amounts owing under the $2,000,000
Promissory Note; and
(ii) *
As used herein, "Prorated Portion" means a fraction, (A) the
numerator of which is the Net Concession Sales, for the
Additional Theatre or Additional Theatres which Landlord elects
to have terminated from this Agreement, for the twelve-month
period immediately preceding the effective termination date, and
(B) the denominator of which is the aggregate Net Concession
Sales, for all Additional Theatres which remain subject to this
Agreement as of the day immediately preceding the effective
termination date, for the twelve-month period immediately
preceding the effective termination date.
Notwithstanding the foregoing, (i) the minimum payment under
subparagraph 3.c (ii) shall be $ * per theatre if the
early termination option is exercised as to less than all of the
Additional Theatres, and (ii) if Landlord elects to terminate
this Agreement concurently as to all Additional Theatres, the
total payment under subparagraph 3.c (ii) shall be *
Furthermore, concurrently herewith Landlord shall issue to Tenant
warrants to purchase 100,000 shares of Common Stock of Landlord,
exercisable gy Tenant upon the early termination of this
Agreement as to an Additional Theatre under this Section 3.c.
d. Tenant agrees that, if Landlord exercises its
right to terminate this Agreement early as to any of the Theatres
pursuant to Section 3.b. or 3.c., and Landlord wishes to add
additional theatres under this Agreement, Tenant will do the
following:
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(i) Negotiate in good faith for the
amendment of this Agreement to include such additional theatres;
and
(ii) Permit such additional theatres to be
substituted for the Theatres which Landlord has caused to be
terminated from this Agreement for the purpose of calculating
aggregate Net Concession Sales for all theatres as provided in
Section 3.a, provided that such substituted theatres shall be
located in the continental United States and shall have Net
Concession Sales comparable to the terminated theatre.
3. COMMISSION PAYMENTS. Section 5.a of the Lease is amended
to provide that as to the Additional Theatres only, the commissions payable
by Tenant under Section 5.a shall be equal to * percent * of Net
Concession Sales (other than the sales of special products).
4. CAFE SALES. The lease is amended to provide that
nothwithstanding any provision of the Lease to the contrary, as to the
Additional Theatres only, Landlord may provide for the sale of food and
beverage items in the cafe areas of those Theatres, provided that the cafe
areas are clearly separated from the Concession Areas and the food and
beverage items offered in the cafe areas are not the same as or similar to
the items sold by Tenant in the Concession Areas. If Landlord wishes to sell
items in the cafe areas that are the same as or similar to the items sold by
Tenant in the Concession Areas, then those items shall be provided solely by
Tenant and those sales shall be included as Net Concession Sales under the
Lease.
5. NEW THEATRES. Upon at least two weeks' prior written notice to
Tenant, Landlord may add other theatres in the continental United States as
Additional Theatres hereunder if those other theatres are not covered under
the Lease or any other concession lease agreement with Tenant, subject to the
consent of Tenant, which consent shall not be unreasonabley withheld.
6. MODIFICATION OF TENANT OBLIGATIONS. The Lease is amended to
provide that Tenant shall have no obligation to Landlord as to the Additional
Theatres only under the following provisions of Section 9 e,f and g.
7. NO OTHER AMENDMENTS. Except as amended hereby, the Lease remains
in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment to
Concession Lease Agreement as of the date first written above.
PACIFIC CONCESSIONS, INC., a
California corporation
By: /s/ XXXX XXXXX
-------------------------------
Xxxx Xxxxx, President
"Tenant"
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
By: /s/ XXXX XXXXXXX, JR.
---------------------------------
Xxxx Xxxxxxx, Jr., President
"Landlord"
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