1
EXHIBIT 10.1
FIRST AMENDMENT TO MULTI-PLEX THEATER LEASE
1. Parties.
This First Amendment ("First Amendment") to the Multi-Plex Theater
Lease, dated for identification purposes December 10, 1998 is made by and
between MDA-SAN BERNARDINO ASSOCIATES, L.L.C., a Delaware limited liability
company ("Landlord"), and CINEMASTAR LUXURY THEATERS, INC., a Delaware
corporation ("Tenant"), with reference to that certain Multi-Plex Theater Lease
(the "Lease"), dated December 20, 1996, between Landlord and Tenant. Unless
otherwise defined herein, all capitalized terms used herein shall have the same
meaning as in the Lease.
2. Recitals.
2.1. In order to provide Landlord with assurances that Tenant is
financially able to commence and complete Tenant's obligations under the Lease
with respect to construction of the Building and installation of FF&E, Section
2.3 of the Lease required that Tenant provide to Landlord, among other things, a
FF&E Commitment, a First LC and a Second LC (collectively, "Tenant's Work
Assurances"). Landlord and Tenant desire to amend Section 2.3 of the Lease by
substituting for Tenant's Work Assurances the requirement that Tenant deliver
one unconditional and irrevocable letter of credit in the amount of Two Million
Dollars ($2,000,000), on the terms and conditions contained herein.
2.2. Exhibit "C" of the Lease (the "Construction Provisions
Agreement") sets forth, among other things, the procedures for disbursement of
the Tenant Improvement Allowance relating to Tenant's Work. Section 2.2.5 of the
Construction Provisions Agreement provides that in the event that any
construction or other Mortgagee of Landlord requires any further or different
procedures, Tenant agrees to comply with same, so long as the general timing and
terms for payment are reasonably consistent with Section 2.2.2.1 of the
Construction Provisions Agreement. Landlord's Mortgagees have required certain
other procedures. Therefore, Landlord and Tenant desire to amend Section 2.2.2
of the Construction Provisions Agreement, on the terms and conditions contained
herein.
2.3. At the time Landlord and Tenant executed the Lease, certain
exhibits were not available for incorporation into the Lease. The exhibits are
now available, and Landlord and Tenant desire to also amend the Lease to add and
incorporate such exhibits.
1
2
2.4. On December 1, 1998, Tenant re-incorporated as a Delaware
corporation pursuant to a merger agreement, dated as of December 1, 1998, which
included ratification of existing obligations. Tenant hereby confirms that such
ratification extends to the Lease.
3. Amendment.
For valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Landlord and Tenant hereby amend the Lease as follows:
3.1. Section 1.1(b) of the Lease is deleted and the following
provision is substituted in its place:
"(b) Rental Commencement Date: Two Hundred Fifty-Four (254) days
after the "Delivery Date" (as defined in Section 3.1)."
3.2. Section 2.3 of the Lease is deleted and the following is
substituted in its place:
"2.3 Tenant covenants that it shall contribute not less than
$1,000,000 in cash towards payment of Tenant's Work (provided,
however, Tenant may encumber the FF&E purchased with such funds
by a loan ("FF&E Loan") made by an institutional lender ("FF&E
Lender"), in a principal amount not to exceed $1 Million, the
proceeds of which are used solely to purchase and install a
portion of the FF&E, subject to the terms of Section 13.2 below).
In order to provide Landlord with assurances that Tenant shall be
financially able to commence and complete Tenant's obligations
with respect to construction of the Building and installation of
FF&E, Tenant shall do each of the following as and when required
below:
(a) Concurrently with execution of this First Amendment, Tenant
shall deliver to Landlord, at Tenant's sole cost and expense, an
unconditional and irrevocable letter of credit in the amount of
Two Million Dollars ($2,000,000) (the "$2 Million LC") in the
form attached hereto as Exhibit "1", issued by a national banking
association approved by Landlord, with an expiration date not
sooner than one (1) year from issuance, automatically renewable
for successive one-year periods unless notice is given by the
issuer to Landlord at least sixty (60) days prior to expiration
(with any non-renewal entitling Landlord to draw down on the $2
Million LC if no substitute letter of credit has been delivered
to Landlord on or before at least thirty (30) days prior to the
expiration date), made payable to Landlord or Landlord's
transferee. Landlord shall not
2
3
draw down funds under such letter of credit unless and until: (i)
Tenant is in default of Tenant's obligations under the Lease; and
(ii) Tenant has failed to cure such default within the applicable
grace period provided under the Lease. Further, Landlord
covenants that the proceeds drawn under the $2 Million LC shall
be applied only as follows: Up to the $2 Million of sums drawn
under the $2 Million LC may be used by Landlord to pay or to
reimburse Landlord for all or any portion of the costs incurred
and to be incurred by Landlord as a result of Tenant's breach of
Tenant's obligations under this Lease solely with respect to
acquisition and installation of the FF&E, and not more than $1
Million, in the aggregate, of the sums drawn under $2 Million LC
shall be used to pay or reimburse Landlord for costs and expenses
incurred and to be incurred by Landlord as a result of any breach
by Tenant of Tenant's obligations under this Lease( including,
but not limited to, a breach with respect to FF&E obligations).
Landlord acknowledges and agrees that funds drawn by Landlord
from the $2 Million LC shall be used only for the purposes
described in the preceding sentence, and the remainder, if any,
shall be refunded to Tenant. If Landlord draws down sums under
the $2 Million LC to pay or to reimburse Landlord with respect to
Tenant's breach of Tenant's obligations with respect to FF&E,
Landlord shall not be obligated to use the proceeds of the $2
Million LC to install the exact items of FF&E as described on
Exhibit "7" of this Lease, but rather, may use the proceeds to
acquire and install reasonably equivalent furniture, fixtures and
equipment in order to fixturize the Premises in a manner so as to
be used by a theater operator for the purposes intended under
this Lease.
(b) Landlord hereby advises Tenant that Landlord intends to
assign its right, title and interest in the $2 Million LC to
Landlord's Mortgagee(s), and requests Tenant to cause such letter
of credit to be issued for the benefit of Landlord's Mortgagee.
Concurrently with such assignment of the $2 Million LC to
Landlord's Mortgagee, Landlord shall deliver to Tenant such
mortgagee's agreement, in writing, that (i) such mortgagee shall
not draw funds under such letter of credit except as and when
Landlord would be entitled to make such draw under Section 2.3(a)
above; (ii) such draw is subject to the conditions described in
section 2.3(a) above; and (iii) mortgagee shall use Annex A to
the $2 Million LC in order to transfer mortgagee's interest in
the $2 Million LC and shall deliver a copy of such mortgagee's
written agreement with Tenant and Landlord with respect to such
letter of credit and advise any
3
4
transferee of the conditions imposed under Section 2.3(a) above
with respect to such draw. Landlord hereby instructs Tenant to
cause the $2 Million LC to be issued for the benefit of "GMAC
Commercial Mortgage Corporation,650 Dresher Road, Post Office Box
1015, Horsham, PA 19044-8015, Attention: Michael C. Sperger,
Treasurer". Upon Landlord's Mortgagee's release of its interest
in the $2 million LC, Tenant shall, at Landlord's request, cause
the $2 million LC to be reissued in Landlord's name, as
beneficiary, provided Landlord concurrently surrenders the
original $2 million LC to Tenant.
(c) Provided that Tenant is not then in default under the Lease,
the $2 Million LC shall be surrendered to Tenant upon Landlord's
receipt of reasonably satisfactory evidence from Tenant
(including invoices and lien waivers) verifying that all FF&E
required under the Lease to be purchased with funds contributed
by Tenant (i.e., FF&E not purchased with Tenant Improvement
Allowance funds) has been installed in the Premises, and at least
$1 Million of the cost of such FF&E installed at the Premises has
been paid for by Tenant, in cash, and that the proceeds of the
FF&E Loan, if any, were used solely to purchase and install
FF&E."
3.3. Section 3.3 of the Lease is hereby deleted in its entirety
and the following provision is substituted in its place:
"Landlord hereby approves Tenant's Final Plans described on
Exhibit "2" attached hereto. Tenant has provided Landlord with
reasonable evidence that portion of Tenant's Final Plans
identified as "Submitted Plans" on Exhibit "2" have been
submitted to all applicable governmental agencies and there are
no conditions to the issuance of building permit(s) with respect
to such Submitted Plans other than Tenant's payment of
governmental fees required as a condition to the issuance of such
permit(s). Tenant shall pay for and obtain all required permits
for Tenant's Work with respect to the Submitted Plans on or
before fourteen (14) days after the Delivery Date. Tenant shall
submit to all applicable governmental agencies for approval that
portion of Tenant's Final Plans identified as the "Remaining
Plans" on Exhibit "2" on or before January 15, 1999. Tenant shall
make such revisions to the Remaining Plans as may be required by
governmental agencies and approved by Landlord in order to obtain
all required permits to construct and complete Tenant's Work and
occupy the Building. Tenant shall use commercially reasonable
efforts and due diligence to obtain all
4
5
required building permits for the Remaining Plans on or before
thirty (30) days after the Delivery Date. The issuance of
governmental permits for Tenant's Work shall not be a condition
precedent to Tenant's obligations under this Lease. Tenant shall
construct Tenant's Work in accordance with Tenant's Work Schedule
attached hereto as Exhibit "3".
3.4. Article Six of the Lease is amended to delete the words "[TO
BE INSERTED]" and substitute the following in their place:
"The Parking Agreement is attached to the Lease as Exhibit "I".
Landlord shall have the right to modify the Parking Agreement
from time to time without the consent of Tenant so long as such
modification does not decrease the number of parking spaces
available for use by Tenant, its customers and employees (on a
non-exclusive basis) during peak and non-peak hours from the
minimum number of parking spaces provided in Exhibit "I," impose
additional parking charges, costs or expenses which are payable
by Tenant, its customer or employees, substitute parking in areas
outside of the 1600' radius required by the Parking Agreement
(except as and when required under the Parking Agreement), or
materially interfere with ingress and egress to and from the
Parking Areas.
3.5. Section 13.1 is amended by deleting the words "First LC and
Second LC" on the first line of Page 33 and substituting "$2 Million LC" in
their place.
3.6. Section 13.2 of the Lease is amended to add the following
provision at the end of the second sentence:
"provided that the FF&E Lender shall have entered into an
agreement with Landlord providing Landlord with notice of
Tenant's default and opportunity to cure, access to the proceeds
of such loan notwithstanding Tenant's default, and otherwise is
on terms reasonably acceptable to Landlord and Landlord's
Mortgagee, and Landlord also agrees to execute, if required by
the FF&E Lender, a landlord's consent, in a form reasonably
acceptable to Landlord and such lender, which would allow the
FF&E Lender, inter alia, to have access to the Premises to
realize upon the collateral for the FF&E Loan (excluding such
items as Tenant may be required to leave in the Premises at the
end of the Lease term, including but not limited to those items
which have been paid for by the proceeds of "Cost Savings" (as
defined in Section 2.2.2.3 of
5
6
Exhibit "C," which items shall be specifically described in such
landlord's consent)."
3.7. Section 18.2 of the Lease is amended to delete the words
"[TO BE INSERTED]" and substitute the following provisions in its place:
"The areas designated by the Redevelopment Agency of the City in
the Parking Agreement as the parking spaces available for
"Permittee's" non-exclusive use from time to time shall be deemed
the "Parking Areas" under this Lease. Tenant acknowledges that
Tenant's right to use the Parking Areas shall in no event exceed
Landlord's right to use such areas under the Parking Agreement
and that the Parking Areas are not Common Area under this Lease."
3.8. Section 19.2 of the Lease is amended by deleting the words
"First LC and Second LC" and substituting the words "$2 Million LC" in their
place.
3.9 Section 29.16 of the Lease is modified as follows:
a) In Section 29.16 (a), insert the word "material"
after the words "At all times and in all" in the 7th line of page 67 and add the
words "shareholders, members, officers and directors" after the words
"contractors" in line 10 of such section.
b) In Section 29.16 (b), insert the words "Materials
to be" after the words "Tenant shall not cause any and all".
c) Add the following provisions after Section 29.16
(d):
"(e) Landlord's Covenant to Remediate.
If (i) Hazardous Materials are discovered to be located
at, to, in, on, under, or about the Premises during the term of
this Lease in violation of applicable Hazardous Materials Laws,
(ii) such Hazardous Materials were used, generated, treated,
stored, transported, disposed, handled, released, spilled,
discharged or present at the Premises prior to the Delivery Date
("Existing Hazardous Materials"), and (iii) the remediation
and/or removal of such materials is required under Environmental
Laws, Landlord agrees to perform such testing, investigation, and
remediation and removal work, in compliance with and to the
extent required under applicable Hazardous Materials Laws, at
Landlord's sole cost , in a diligent manner and use commercially
reasonable efforts to minimize any material interference with
construction of Tenant's Work or
6
7
Tenant's business operations in its performance of such work
("Required Environmental Work"); provided, however, such covenant
shall not apply to any testing, investigations, or remediation or
removal work caused by, or necessitated due to the negligence or
willful misconduct of, Tenant or any Tenant Party (but only after
Tenant or a Tenant Party has knowledge of the presence of such
Hazardous Materials).
(f) Landlord's Representation and Warranty.
Landlord represents and warrants to Tenant that Landlord
has no knowledge of the existence of any Hazardous Materials in
violation of Hazardous Materials Laws at, to, in, on, under, or
about the Premises as of December 14, 1998.
(g) Landlord's Indemnification.
(i) Landlord shall indemnify, defend, protect and hold
Tenant and the Tenant Parties, and each of them, free and
harmless from and against any claims, actions, causes of action,
proceedings, suits, defenses, judgments, demands, orders,
damages, punitive damages, penalties, fines, costs, obligations,
liabilities, interest, and losses, together with all other costs
and expenses of any kind or nature (excluding consequential
damages or lost profits) (an "Environmental Claim") arising out
of or resulting from (A) Landlord's failure to commence and
diligently pursue to completion all Required Environmental Work
after receipt of notice from Tenant and a reasonable opportunity
to investigate whether or not such Hazardous Materials are
Existing Hazardous Materials and require testing, investigations,
remediation and/or removal under applicable Environmental Laws,
or (B) the use, generation, treatment, storage, transportation,
disposal, handling , release, spill, presence or discharge of
Hazardous Materials by Landlord or Landlord's employees, agents,
contractors or representatives at, in, under or about the
Premises prior to or during the term of this Lease; provided,
however, that such indemnity shall not include Environmental
Claims arising out of or resulting from Tenant's or any Tenant
Party's negligence or willful misconduct, including without
limitation, the negligence or willful misconduct of Tenant or any
Tenant Party with respect to a release, use, generation,
treatment, storage, transportation, disposal, handling , spill,
or discharge of such Existing Hazardous Materials in violation of
7
8
Environmental Laws (but only after Tenant or a Tenant Party has
knowledge of the presence of such Hazardous Materials).
(ii) Further, Landlord shall indemnify, defend, protect
and hold Tenant and the Tenant Parties, and each of them, free
and harmless from and against any claims, actions, causes of
action, proceedings, suits, defenses, judgments, demands, orders,
damages, punitive damages, penalties, fines, costs, obligations,
liabilities, interest, and losses, together with all other costs
and expenses of any kind or nature (excluding consequential
damages or lost profits)arising out of or resulting from claims
made by third parties against Tenant or any Tenant Party,
including, without limitation, claims made by employees of any
Tenant or any Tenant Party (a "Third Party Claim") as a result of
the the use, generation, treatment, storage, transportation,
disposal, handling , release, spill, presence or discharge of
Existing Hazardous Materials, provided, however, that such
indemnity shall not include any Third Party Claim(s) arising out
of or resulting from the negligence or willful misconduct of
Tenant or any Tenant Party, including without limitation, the
negligence or willful misconduct of Tenant or any Tenant Party
with respect to a release, use, generation, treatment, storage,
transportation, disposal, handling , spill, or discharge of such
Existing Hazardous Materials in violation of Environmental
Laws(but only after Tenant or a Tenant Party has knowledge of the
presence of such Hazardous Materials).
(h) Landlord's Release.
Landlord hereby releases and forever discharges Tenant and
the Tenant Parties, and each of them, from and against any and
all Environmental Claims and Third Party Claims relating to any
Existing Hazardous Materials, provided, however, that such
release shall not include any Environmental Claims or Third Party
Claims arising out of or resulting from the negligence or willful
misconduct of Tenant or any Tenant Party, including without
limitation, the negligence or willful misconduct of Tenant or any
Tenant Party with respect to a release, use, generation,
treatment, storage, transportation, disposal, handling , spill,
or discharge of such Existing Hazardous Materials in violation of
Environmental Laws(but only after Tenant or a Tenant Party has
knowledge of the presence of such Hazardous Materials).
8
9
(i) Force Majeure
Notwithstanding anything to the contrary in this Lease,
(A) each of the following shall be considered a Force Majeure event: the
discovery, investigation, characterization, or negotiation with
governmental agencies with respect to Existing Hazardous Materials, and
Required Environmental Work to remediate any Existing Hazardous
Materials if, and only to the extent that, such events cause delay,
prevention or stoppage of Tenant's Work that cannot be avoided by Tenant
without incurring material additional cost or expense, and (B) the Rent
Commencement Date shall be postponed by one (1) day for each day of such
prevention, delay or stoppage of Tenant's Work. Tenant shall promptly
give notice to Landlord upon the commencement of any such Force Majeure
delay."
3.10. The Construction Provisions Agreement attached as Exhibit
"C" to the Lease ("Exhibit "C") is amended in the following respects:
a. Section 1.2.1 of Exhibit "C" is amended to add the
word "site" after the words "required on-site" in line one.
b. The following provision is added at the end of
Section 1.2 of Exhibit "C":
"Landlord shall Substantially Complete Landlord's Work described
in Sections 1.2.1 and 1.2.2 of this Exhibit "C" on or before the
Delivery Date and shall Substantially Complete the remaining
Landlord's Work on or before the date specified in Exhibit "3" of
the Lease ("Landlord's Work Schedule"). Landlord shall construct
Landlord's Work substantially in accordance with the plans and
specifications for Landlord's Work described on Exhibit "5" of
the Lease ("Landlord's Work Plans"), subject to such
modifications as Landlord may require, provided that no such
modification shall materially affect or delay Tenant's Work or
increase the cost of Landlord's Work (unless Landlord provides
Tenant with reasonable evidence of the source of funding of such
cost increases and that such cost increases shall not result in a
decrease of funds available to pay the remaining balance of the
Tenant Improvement Allowance under that certain Fiscal Agent
Agreement ("Fiscal Agent Agreement") dated December 10, 1998, by
and among Landlord, Agency, and Landlord's Mortgagee ("GMACCM")
and First American Title Company ("Fiscal Agent"). A copy of the
Fiscal Agent Agreement is attached to the Lease as Exhibit "6".
If Landlord fails to Substantially Complete Landlord's Work on or
9
10
before the later of the date set forth in Landlord's Work
Schedule or the date of Tenant's completion of Tenant's Work,
Tenant shall have the right, after written notice to Landlord and
Landlord's failure to commence cure within ten (10) days after
receipt of such notice, and thereafter diligently pursue cure to
completion, and provided Landlord has not given Tenant written
notice that Landlord disputes Tenant's claim that such work is
not Substantially Complete, to complete Landlord's Work and, upon
presentation of invoices and unconditional lien waivers for such
work and Landlord's failure to reimburse Tenant within 10 days
thereafter, to deduct the reasonable costs incurred by Tenant in
performing such Landlord's Work from the rent next coming due
under the Lease."
c. The following provision is added to the end of
Section 1.3 of Exhibit "C":
"Landlord shall submit any request for a Change received from
Tenant to the Agency and GMACCM (if required under their
respective loan documents) as soon as reasonably feasible, but in
no event later than three (3) business days of receipt of
Tenant's plans for the proposed Change. Notwithstanding any
provision of this Lease to the contrary, Landlord agrees to
respond to any request by Tenant for a Change on or before the
earlier of twenty-four (24) hours after Landlord's receipt of
Landlord's Mortgagee's approval or disapproval of such requested
Change or four (4) business days after Tenant's submission of a
request for a Change to Landlord. Landlord's failure to respond
to Tenant within such time period shall be deemed a disapproval
of the Change. Landlord may condition its approval of any
requested Change, among other conditions, upon Tenant's deposit
of funds with Landlord in an amount equal to the amount of the
increase in the total cost to complete Tenant's Work resulting
from such Change. Landlord shall use commercially reasonable
efforts to provide Tenant with a response to a request for any
Change which would cost less than $10,000 and which does not
materially affect the Building structure, exterior walls, or
mechanical systems or roof, within one (1) business day of
Tenant's request."
d. Section 2.1 of Exhibit "C" is amended to delete the
second to the last sentence and insert the following provision in its place:
10
11
"While the design, acquisition and installation of FF&E is
included in the definition of Tenant's Work, the Tenant
Improvement Allowance shall not be applied to reimburse Tenant
for the cost of FF&E, and Tenant shall bear all costs and
expenses related to FF&E except as provided in Section 2.2.2.3 of
this Exhibit "C" with respect to Cost Savings. Tenant shall
install at the Premises all FF&E described on Exhibit "7" to the
Lease, subject to such changes and substitutions as Landlord may
approve, which approval shall not be unreasonably withheld."
e. Section 2.1 of Exhibit "C" is further revised to
add the following sentence at the end of Section 2.1:
"Tenant represents that the FF&E described on Exhibit "7",
together with such furniture, fixtures and equipment shown as to
be installed by Tenant's contractor on the plans described in
Exhibit "2", constitute all furniture, fixtures, and equipment
necessary for Tenant to fully fixturize the Building for
operation as a multiplex theater required under this Lease and
that such FF&E is consistent with the type, quantity and
standards for fixturization in other first class theaters in
California owned or operated by Tenant. Landlord acknowledges
that if Tenant constructs Tenant's Work in a good and workmanlike
manner and substantially and materially in accordance with the
Tenant Final Plans described in Exhibit "2", subject to any
approved Changes, and installs the FF&E described in Exhibit "7"
together with such furniture, fixtures and equipment shown as to
be installed by Tenant's Contractor on the plans described in
Exhibit "2", in the Premises in a good and workmanlike manner,
subject to any approved substitutions, deletions or additions to
such FF&E, Tenant shall have satisfied the requirement that the
Building be a "first class, state of the art" motion picture
building, including interior finish and FF&E, and that such
Building shall be deemed to conform to the architectural plan and
standards for the Development Site." Notwithstanding the
foregoing, nothing contained in this Section shall reduce or
limit the conditions which must be satisfied by Tenant in order
to receive disbursements of the Tenant Improvement Allowance.
f. Sections 2.2.1.1 through 2.2.1.6, inclusive, of
Exhibit "C" are deleted and the following provision inserted in their place:
"Only those costs and expenses identified on the Schedule of
Values for Tenant's Work attached to the Lease as Exhibit "8"."
11
12
g. Section 2.2.2.1 of Exhibit "C" is amended to add
the following at the end of subsection (iv):
", including but not limited to, the information and
certifications with respect to Tenant's Work which may be
required to be delivered by Landlord, as "Borrower" to Fiscal
Agent and Landlord's Mortgagees under the Fiscal Agent Agreement
as a condition to Agency and/or GMACCM funding Payment Requests
under such agreement."
h. Section 2.2.2.1 of Exhibit "C" is further amended
to delete the second and third sentence of such section and substitute the
following provision in their place:
"As soon as reasonably feasible, but in no event later than five
(5) business days after submission of a Payment Request, Tenant
and Tenant's Architect and Contractor shall meet with Landlord
(and/or its Project Manager) and Leviene-Rich, Inc., or another
representative of Landlord's Mortgagees (the "Disbursement
Control Agent"), to review each Payment Request. As soon as
reasonably feasible, but in no event later than twenty (20) days
of the Disbursement Control Agent's certification of the amount
approved under such Payment Request, and provided that Tenant has
submitted (A) all items required under such Sections (i) through
(iv), inclusive, above, (B) unconditional lien waivers for all
work included in prior Payment Requests (to the extent not
previously delivered), and (C) any amounts required under Section
2.2.2.6 below, Landlord shall make a payment to Tenant in the
amount certified by the Disbursement Control Agent, less a ten
percent (10%) retention (the aggregate amount of such retentions
herein referred to as the "Final Retention"), provided that
Landlord does not dispute any Payment Request based upon
non-compliance with Tenant's Final Plans (as amended by approved
Changes) or due to substandard work, or other reasons permitted
under this Lease. Landlord's payment to Tenant shall not be
deemed an approval or acceptance by Landlord of any work
furnished or materials supplied as set forth in such Payment
Request."
i. Section 2.2.2.2 of Exhibit "C" is deleted in its
entirety and, in lieu of a Draw Multiplier, if Landlord determines at any time
prior to disbursement of the Final Retention that the cost to complete
construction of Tenant Improvement Cost Items ("Tenant's Work Costs") exceeds
the then remaining balance of the Tenant Improvement Allowance, the provisions
of Section 2.2.2.6 of Exhibit "C" shall apply.
12
13
j. Section 2.2.2.3 of Exhibit "C" is amended to add
the following at the end of subsection (ii):
"provided, however, that such determination shall be made in
conjunction with Project Manager's review and approval of the
Payment Request for the Final Retention."
k. Section 2.2.2.3 of Exhibit "C" is further amended
to add the following at the end of subsection (ix):
"and such other items as may be requested by Landlord's
Mortgagees with respect to the Lease and Tenant's Work. Tenant
also shall deliver to Landlord all certifications required with
respect to the Construction Contract and Tenant's Work which
constitute conditions to funding Payment Requests, including but
not limited to delivery of a certified copy of all plans and
specifications for FF&E, Tenant's certification that Tenant has
obtained all required governmental permits to install and use all
FF&E, and such other certifications as Landlord's Mortgagees may
reasonably request."
l. Section 2.2 of Exhibit "C" is further amended by
adding the following as a new Section 2.2.2.6:
"2.2.2.6 Additional Terms. Notwithstanding the foregoing,
if at any time Landlord reasonably determines that the unpaid
balance of Tenant Work Costs exceeds or will exceed the remaining
balance of the Tenant Improvement Allowance, Tenant shall, within
three (3) business days of Landlord's request, deposit with
Landlord an amount equal to such deficiency, in immediately
available funds, which amount shall be deposited by Landlord with
the Fiscal Agent under the Fiscal Agent Agreement (or, if
required by Landlord's Mortgagee, with such mortgagee) and
disbursed to pay approved Payment Request(s) next coming due, in
accordance with this Section 2.2 above. If Tenant shall fail to
timely make such deposit, then, in addition to Landlord's other
rights and remedies hereunder, Landlord shall have the right to
draw on the "Contingency LC" (defined below), deposit all funds
drawn with respect to such letter of credit with Fiscal Agent
(or, if required by Landlord's Mortgagee, with such mortgagee),
and use such funds to pay approved Payment Request(s) next coming
due. Concurrently herewith, Tenant shall pay to Landlord the
amount of $ 52,548 in reimbursement of certain Tenant Improvement
Costs previously paid by Landlord which are in excess of the
Tenant Improvement
13
14
Allowance and are identified on Exhibit "8." Concurrently
herewith, Tenant also shall deposit with Landlord a letter of
credit in the amount of $ 275,000, in the form attached hereto as
Exhibit "9" ("Contingency LC"), which letter of credit shall
secure Tenant's obligation to pay Tenant's Work Costs exceeding
the Tenant Improvement Allowance. The Contingency LC shall be
issued by a national banking association approved by Landlord,
with an expiration date not sooner than one (1) year from
issuance, automatically renewable for successive one-year periods
unless notice is given by the issuer to Landlord at least sixty
(60) days prior to expiration (with any non-renewal entitling
Landlord to draw down on the Contingency LC upon certification
that no substitute letter of credit has been delivered to
Landlord on or before at least thirty (30) days prior to the
expiration date), made payable to Landlord or Landlord's
transferee, upon delivery to the issuer of the original
Contingency LC. Landlord shall not draw down funds under such
letter of credit unless and until (A) Tenant is in default of
Tenant's obligations under the Lease with respect to Tenant's
obligation to deliver to Landlord immediately available funds to
pay for Tenant Work Costs in excess of the remaining balance of
the Tenant Improvement Allowance; and (B) Tenant has failed to
cure such default within the applicable grace period provided
under the Lease. Landlord acknowledges and agrees that any funds
drawn by Landlord shall be used only to pay or to reimburse
Landlord for Tenant's Work Costs in excess of the Tenant
Improvement Allowance, and the remainder, if any, shall be
refunded to Tenant. Landlord hereby advises Tenant that Landlord
intends to assign its right, title and interest in the
Contingency LC to Landlord's Mortgagee(s), and requests Tenant to
cause such letter of credit to be issued for the benefit of
Landlord's Mortgagee. Concurrently with such assignment of the
Contingency LC to Landlord's Mortgagee, Landlord shall deliver to
Tenant such mortgagee's agreement, in writing, that (i) such
mortgagee shall not draw funds under such letter of credit except
as and when Landlord would be entitled to make such draw under
this Section above; (ii) such draw is subject to the conditions
described in this Section above; and (iii) mortgagee shall use
Annex A to the Contingency LC in order to transfer mortgagee's
interest in the Contingency LC and shall deliver to such
transferee a copy of mortgagee's written agreement with Landlord
and Tenant with respect to such letter of credit and advise any
such transferee of the conditions imposed under this Section
above with respect to such draw. Landlord hereby instructs Tenant
to cause the Contingency LC to be issued for the benefit of
14
15
"GMAC Commercial Mortgage Corporation,650 Dresher Road, Post
Office Box 1015, Horsham, PA 19044-8015, Attention: Michael C.
Sperger, Treasurer". Upon Landlord's Mortgagee's release of its
interest in the Contingency LC, Tenant shall, at Landlord's
request, cause the Contingency LC to be reissued in Landlord's
name, as beneficiary, provided Landlord concurrently surrenders
the original Contingency LC to Tenant. Provided that Tenant is
not then in default under the Lease, the Contingency LC shall be
surrendered to Tenant concurrently with the Final Retention,
subject to satisfaction of all conditions to Tenant's receipt of
the Final Retention.
m. Section 4.2.2.3 of Exhibit "C" is amended to
provide that Tenant shall, concurrently with execution of this First Amendment,
execute and deliver to Landlord security assignments of Tenant's interest in all
architectural, engineering and construction contracts, and plans and
specifications for Tenant's Work, including but not limited to the consents of
Contractor and Architect to such assignments, which assignments shall be in the
form attached hereto as Exhibit "10" ("Landlord Assignments").
n. Section 5.1 of Exhibit "C" is amended to delete
"Alan Grossberg" as Tenant's representative and substitute "Dana Carter" in his
place.
o. With respect to Section 3.1 of Exhibit "C",
Landlord hereby approves (i) Stoutenbourgh, Inc. as Tenant's Architect and (ii)
that certain Architect Agreement, between Stoutenbourgh, Inc. and Tenant,
referenced in the Landlord Assignments. Concurrently with each Payment Request,
Tenant shall cause Tenant's Architect to provide all certifications and other
information which may be required to be submitted by Landlord under the Fiscal
Agent Agreement with respect to Tenant's Work.
p. With respect to Section 3.1 of Exhibit "C",
Landlord confirms that Landlord has approved (i) the plans and specifications
for Tenant's Work identified on Exhibit "2" hereto, and (ii) the time schedule
for performance of Tenant's Work set forth on Exhibit "3" hereto.
q. With respect to Sections 3.2, 3.3 and 3.4 of
Exhibit "C", Landlord confirms that it has approved Tenant's Final Plans as
described on Exhibit "2".
r. With respect to Section 3.5 of Exhibit "C",
Landlord confirms that, as of the date of the First Amendment, Landlord has not
incurred any review costs under such section.
s. With respect to Section 4.1.1 of Exhibit "C",
Landlord confirms Landlord has approved (i) Joe E. Woods Construction as
Tenant's Contractor and (ii) that certain
15
16
Standard Form of Agreement between Owner and Contractor, between Tenant, as
owner, and Joe E. Woods, Inc. as contractor, referenced in the Landlord
Assignments ("Construction Contract"). Tenant shall cause Tenant's Contractor to
provide all certifications and other
16
17
information as may be required to be submitted by Landlord under the Fiscal
Agent Agreement with respect to Tenant's Work. Tenant confirms that the
Construction Contract requires Tenant's Contractor to abide by the requirements
of Section 5.7 of Exhibit "C" and the Additional Covenants attached as Exhibit
"L" to the Lease.
t. With respect to Section 4.2. of Exhibit "C",
Landlord and Tenant hereby confirm that Landlord and Tenant have approved the
respective Work Schedules attached to the First Amendment as Exhibits "3" and
"5," respectively.
u. With respect to Section 5.2 of Exhibit "C", Tenant
acknowledges that David Gaulton of Pacific Development Company shall be
Landlord's Project Manager; provided, however, any Changes must be approved, in
writing, by either Rex Swanson or Jason Kamm on behalf of Landlord.
v. With respect to Section 5.7 of Exhibit "C", add the
following provision at the end of such Section:
"Notwithstanding anything to the contrary in this Lease, if and to the
extent that Tenant is not required under applicable laws to otherwise
comply with the Davis-Bacon Act, as amended, and such compliance is not
required under the DDA, Landlord shall not require Tenant to comply with
such Act respecting wages paid in connection with the installation of
all FF&E that is not funded out of the Tenant Improvement Allowance."
3.11 The Subordination, Nondisturbance, and Attornment
Agreement attached as Exhibit "H" to the Lease is deleted in its entirety and
Exhibit "H" attached to this First Amendment is substituted in its place.
3.12 The Short Form of Lease attached as Exhibit "K" to the Lease is
deleted in its entirety and Exhibit "K" attached to this First Amendment is
substituted in its place. Concurrently herewith, Landlord and Tenant shall
execute and deliver the Short Form of Lease for recording purposes in the form
of Exhibit "K" to the First Amendment.
17
18
3.13 The Lease is hereby amended to incorporate all exhibits attached to
this First Amendment, as follows:
(a) Legal Description of the Theater Parcel is attached
hereto as "Exhibit A-1";
(b) Final Site Plan for the Project is attached hereto
as "Exhibit A-2";
(c) Legal Description of the Development Parcels is
attached hereto as "Exhibit A-3";
(d) Elevation Drawings of the Premises are attached
hereto as "Exhibit B";
(e) Tenant's Sign Criteria is attached hereto as
"Exhibit F";
(f) Rules and Regulations are attached hereto as
"Exhibit G";
(g) Subordination, Nondisturbance and Attornment
Agreement Forms are attached hereto as "Exhibit H";
(h) Parking Agreement is attached hereto as "Exhibit
I";
(i) Permitted Title Exceptions are attached hereto as
"Exhibit J";
(j) Short Form of Lease is attached hereto as Exhibit
"K";
(k) Additional Covenants are attached hereto as
"Exhibit L";
(l) Form of $2 Million LC is attached hereto as
"Exhibit 1";
(m) Description of Tenant's Final Plans (including
Submitted Plans and Remaining Plans) is attached
hereto as "Exhibit 2";
(n) Tenant's Work Schedule and Landlord's Work Schedule
are attached hereto as Exhibit "3";
(o) Intentionally Deleted;
(p) A description of Landlord's Work Plans is attached
hereto as Exhibit "5";
18
19
(q) The Fiscal Agent Agreement is attached hereto as
Exhibit "6";
(r) A description of FF&E is attached hereto as Exhibit
"7";
(s) Tenant Improvement Allowance Items, Schedule of
Values, and Prepaid Costs subject to Reimbursement
to Landlord is attached hereto as Exhibit "8";
(t) Form of Contingency LC is attached as Exhibit "9";
and
(u) Landlord Assignments are attached hereto as
"Exhibit "10".
4. No Further Modification.
Except as expressly modified herein, the Lease remains unmodified and in
full force and effect.
5. No Release of Guarantors.
The execution and delivery of this First Amendment, and the Lease
modifications hereunder, shall not be deemed to release or relieve any Guarantor
of the Lease, each of whom Tenant represents and warrants shall continue to be
bound by the Lease, as modified by this First Amendment, in accordance with the
terms of the Guaranty.
6. Satisfaction/Waiver.
Landlord and Tenant acknowledge and agree that all conditions set forth
in Article 4 of the Lease have been satisfied and/or waived and that neither
party has any further right to terminate the Lease based upon a failure of any
of such conditions.
7. Counterparts. This First Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, and all of which,
taken together, shall constitute one document.
8. Notices. Tenant's address for notice purposes under this Lease
is
CinemaStar Luxury Theaters, Inc.
12230 El Camino Real, Suite 320
San Diego, CA 92130
Attention: Mr. Norman Dowling
19
20
The parties have executed this First Amendment as of the date set forth
opposite such parties' signature below.
LANDLORD
MDA - San Bernardino Associates, L.L.C.,
a Delaware limited liability company
By: MDA Investors No. 1, L.L.C.,
a Delaware limited liability company,
its Managing Member
By: MJL Associates,
a California Limited Partnership,
its Managing Member
By: MJL Investments, Inc.,
a California corporation,
its General Partner
Date: _________________
By:__________________________
Name: _______________________
Title: ______________________
TENANT
CINEMASTAR LUXURY THEATERS, INC.,
a Delaware Corporation
Date: _________________ By:_________________________________
Print Name:_________________________
Its:________________________________
20
21
EXHIBIT " A-1 "
LEGAL DESCRIPTION OF THEATER PARCEL
21
22
EXHIBIT A-2
FINAL SITE PLAN
22
23
EXHIBIT " A-3 "
LEGAL DESCRIPTION OF DEVELOPMENT PARCELS
23
24
EXHIBIT B
ELEVATION DRAWINGS OF PREMISES
24
25
EXHIBIT "F"
SIGNAGE PLAN
Tenant shall submit to Landlord, for Landlord's reasonable review and
approval, a Signage Plan for Tenant's Building within thirty (30) days after
execution of this First Amendment. The provisions of Sections 3.2 and 3.3 of
Exhibit "C" to the Lease shall apply with respect to the timing and procedures
for review, revision and approval of such Signage Plan. Upon Landlord's approval
of the Signage Plan, such Plan shall be initialed by the parties and annexed
hereto as Exhibit "F."
25
26
EXHIBIT G- RULES AND REGULATIONS
(NONE AT THIS TIME. LANDLORD WILL SUBMIT THIS EXHIBIT PRIOR TO OPENING THE
RETAIL BUSINESSES ON THE DEVELOPMENT PARCELS)
26
27
EXHIBIT "L"
ADDITIONAL COVENANTS
I. At the time of the opening of the Theater, Tenant anticipates
creating at least 105 full and part time jobs; provided, however, Tenant shall
have the right to modify its employment pattern from time to time in a manner
consistent with its normal operations.
II. Tenant acknowledges that a portion of the funds for the Tenant
Improvement Allowance shall be obtained from HUD, and that Tenant shall be
prohibited under 24 CFR Part 570.601 (24 CFR Part 87) from using federally
appropriated funds for the purpose of influencing or attempting to influence an
officer or employee of any agency, a member of Congress, an officer or employee
of Congress, or an employee of a member of Congress, in connection with the
awarding of any Federal contract, the making of any Federal grant, loan or
cooperative agreement, and any extension, continuation, renewal, amendment or
modification of said documents with respect to the Theater Project. Tenant
covenants that Tenant and all of Tenant's contractors (and subcontractors) with
respect to Tenant's Work shall comply with the Federal Lobbyist Requirements at
all times prior to the Theater Project Completion Date.
III. Tenant agrees that no person shall, on the grounds of race, sex,
creed, color, religion, national origin, or age be excluded from participation
in, be refused the benefits of, or otherwise be subjected to discrimination in
any activities, programs, or employment with respect to the Theater Project.
Tenant shall comply with all applicable regulations set forth in 24 CFR
570.600-602, including without limitation, the requirement that Tenant comply
with Title VI of the Civil Rights Act of 1964 (Public Law 88-352) and the
regulations set forth at 24 CFR Part 1 and the Age Discrimination Act of 1975
(42 U.S.C. 6101-07) and Executive Order 11245 and the regulations issued
pursuant thereto (41 CFR Part 60), if applicable; and the requirements of the
Americans With Disabilities Act, as amended (42 U.S.C. 12101-12213). Tenant
shall take affirmative action to ensure that the Theater Project shall provide
equal employment and career advancement opportunities for minorities and women
and, to the greatest extent feasible, to provide opportunities for training and
employment of lower income persons residing within the area of the Theater
Project. In furtherance of the foregoing Tenant shall, prior to the commencement
of Landlord's Work, deliver to Landlord a list, reasonably acceptable to
Landlord setting forth affirmative steps taken by Tenant, or to be taken by
Tenant, to assure that minority business and women's business enterprises are
offered an equal opportunity to obtain or compete for contracts and subcontracts
as sources of supplies, equipment, construction and services. Such affirmative
steps may include, but are not limited to, technical assistance open to all
businesses but designed to enhance opportunities for these enterprises and
special outreach efforts to inform them of contract opportunities. Such steps
shall not include preferring any business in the award of any contract or
subcontract solely or in part on the basis of race or gender. Tenant shall
deliver to Landlord semiannually, prior to April 15 and October 15 of each
fiscal year, a report summarizing the nature of the businesses with which Tenant
has entered into contracts and
27
28
subcontracts in connection with the Theater Project during the preceding six (6)
month period ending March 31 or September 30, as applicable. The obligation of
Tenant to deliver the reports specified in this Section shall expire upon
delivery of the report summarizing the last contracts and subcontracts entered
into by Tenant in connection with the Theater Project prior to the Theater
Project Completion Date.
IV. Tenant shall, during regular business hours, allow authorized
personnel of Landlord and Landlord's Mortgagees to inspect and monitor its
facilities and program operations as they relate to the Theater Project,
including the interview of Tenant's Staff and program participants, in order to
verify compliance with the covenants in this Exhibit "L".
28
29
EXHIBIT "K"
RECORDING REQUESTED BY AND
WHEN RECORDED, MAIL TO:
GREENBERG GLUSKER FIELDS
CLAMAN & MACHTINGER LLP
1900 Avenue of the Stars
Suite 2100
Los Angeles, CA 90067-4590
Attn: Debby R. Zurzolo, Esq.
- --------------------------------------------------------------------------------
SHORT FORM OF LEASE
1. Parties.
This Short Form of Lease ("Short Form"), dated for identification
purposes only December 10, 1998, is entered into by and between MDA-SAN
BERNARDINO ASSOCIATES, L.L.C., a Delaware limited liability company
("Landlord"), and CINEMASTAR LUXURY THEATERS, INC., a California corporation
("Tenant").
2. Recitals.
a. Landlord is the fee owner of that certain real property more
particularly described on Exhibit "A" attached hereto ("Theater Parcel").
b. The Theater Parcel is part of a larger project which may be developed
by Landlord on adjacent real property (collectively with the Theater Parcel, the
"Development Site"), described on Exhibit "B" attached hereto.
c. Pursuant to the Lease, Tenant shall design and construct an
approximately 80,000- foot building on the Theater Parcel for use as a
first-class, state of the art, movie theater.
d. In order to accommodate Tenant's parking requirements, Landlord has
or will enter into certain parking agreements more particularly described in the
Lease.
e. In consideration of the Recitals contained herein and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant agree as follows:
29
30
3. Grant of Leases.
Landlord leases to Tenant, and Tenant leases from Landlord the Theater
Parcel, together with all improvements constructed thereon, subject to the
provisions of that certain unrecorded Lease dated December 20, 1996, as amended
by a First Amendment to Lease, dated December 10, 1998 between Landlord and
Tenant (collectively, "Lease").
4. Term of Lease.
The initial term of the Lease commences on the "Rent Commencement Date"
as defined in Section 1.1(b) of the Lease, and, unless sooner terminated
pursuant to the terms thereof, shall expire twenty-five (25) years from the date
thereof, unless extended as provided therein.
5. Option to Renew.
Section 3.7 of the Lease provides that Tenant shall have the option to
extend the initial term of the Lease for two (2) additional periods of five (5)
years each, subject to the terms and conditions set forth therein.
6. Tenant's Exclusive Use.
Section 7.3 of the Lease provides as follows:
"So long as Tenant continuously operates the Premises for the use
specified in Section 1.1(l), Landlord shall not lease space within the
Development to anyone for the purpose of operating within the
Development a movie theater, or conducting a business requiring the use
of auditoriums exceeding 10,000 square feet for meetings and conventions
at the Development, without Tenant's prior written approval. This
restriction shall not apply to the operation of restaurant or banquet
facilities."
7. Purpose of Short Form of Lease.
This Short Form is prepared for the purpose of recordation only, and in
no way modifies the terms and provisions of the Lease. In the event of any
inconsistency between the terms and provisions of this Short Form and the terms
and provisions of the Lease, the terms and provisions of the Lease shall
prevail.
8. Successors and Assigns.
This Short Form shall be binding upon and inured to the benefits of the
parties hereto and their respective permitted successors and assigns.
30
31
9. Exhibits.
All exhibits attached hereto are incorporated herein by this reference.
The parties have executed this Memorandum as of the date first set forth
opposite their signatures below.
Executed this ____ day "LANDLORD"
of _________________, 1998,
at _______________________. MDA-San Bernardino Associates,
L.L.C., a Delaware limited
liability company
By: MDA Investors No. 1, L.L.C., a Delaware
limited liability company, its Managing
Member
By: MJL Associates, a California Limited
Partnership,
its Managing Member
By: MJL Investments, Inc., a
California corporation, its
General Partner
By:____________________________
Its:___________________________
Print Name_____________________
Executed this ____ day "TENANT"
of _________________, 1998,
at _______________________. CINEMASTAR LUXURY THEATERS, INC.,
a Delaware Corporation
By:___________________________
Its___________________________
Print Name____________________
31
32
STATE OF CALIFORNIA )
)SS.
COUNTY OF ____________ )
On _____________________, 1998, before me, ______________________, a
Notary Public, personally appeared ______________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ___________________________
(Seal)
STATE OF CALIFORNIA )
)SS.
COUNTY OF ____________ )
On _____________________, 1998, before me, ______________________, a
Notary Public, personally appeared ______________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity, and that by
his/her signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ___________________________
(Seal)
32
33
EXHIBIT "A"
LEGAL DESCRIPTION OF THEATER PARCEL
33
34
EXHIBIT "B"
LEGAL DESCRIPTION OF DEVELOPMENT SITE
34
35
EXHIBIT "1"
UNION BANK
C/O SOUTHERN CALIFORNIA
INTERNATIONAL OPERATIONS CENTER
1980 Saturn Street, VO1-519
Monterey Park, CA 91755-7417
Attention: Standby Letter of Credit Section
Date: December __, 1998 IRREVOCABLE LETTER OF CREDIT NO.___________
BENEFICIARY:
APPLICANT:
Cinema Star Luxury Theaters, Inc.
12230 El Camino Real, Suite 320
San Diego, CA 92130
Currency: USD
Amount: 2,000,000.00 (Two Million and no/100 U.S. Dollars)
Available by: Payment at this office
Ladies and Gentlemen:
For the account of_____________________("Beneficiary"), we hereby open in your
favor our Irrevocable Letter of Credit No.________________ ("Credit") for an
amount not to exceed a total of U.S. $2,000,000, effective immediately and
expiring on December ___, 1999, or any automatically extended date or any
alterative date as herein set forth at the close of business of this office in
Monterey Park, California.
Funds under this Credit are available to you for all or any part of this Credit
upon presentation of the following documentation:
Your sight draft drawn on us marked "Drawn under Union Bank of California, N.A.
Irrevocable Standby Letter of Credit No. _____________, dated ________________."
This Credit shall be deemed automatically extended without an amendment for a
one year period beginning on the present expiration date hereof December ___,
1999, and upon each anniversary of such date, unless at least sixty (60) days
prior to any such expiration date we have sent you written notice by courier
service or overnight mail that we elect not to permit this Credit to be so
extended beyond its then current expiration date. This Credit shall finally
expire on December___, 2000, if it has not previously expired in accordance with
the preceding paragraph.
The date this Credit expires in accordance with the preceding paragraph is the
"Final Expiry Date". Upon the occurrence of the Final Expiry Date this Credit
shall fully and finally expire and no presentations made under this Credit after
such date will be honored.
35
36
Upon receipt by you of our notice that we elect not to renew, or at any time
thirty (30) days or less prior to the Final Expiry Date, you may draw against
the Credit upon presentation of the following documentation:
Your sight draft drawn on us marked: "Drawn under Union Bank of
California, N.A., Irrevocable Standby Letter of Credit No. _____________, dated
__________________."
We will promptly honor all drafts drawn in compliance with the terms of this
Credit if received on or before the Final Expiry Date at the address above.
Documents are to be sent in one lot by courier service, overnight mail or hand
delivery.
Drafts presented at our office at the address set forth above no later than
10:00 a.m. shall be honored on the date of presentation, by payment in
accordance with your payment instructions that accompany each such draft. If
requested by you, payment under this Credit may be made by wire transfer of
immediately available funds to your account as specified in your payment
instructions, or by deposit of same funds in your designated account that you
maintain with us.
The Credit is transferable. Transfer of this Letter of Credit shall be effected
by the presentation to us of a certificate signed by Beneficiary in
substantially the form of Annex A attached hereto, with a copy delivered to the
Applicant. Upon presentation to us of such a certificate, the transferee named
in such certificate will thereupon become the Beneficiary hereof and will be
entitled to draw hereunder as though said transferee were the Beneficiary
originally named in this Letter of Credit.
This Credit shall be governed by and subject to the Uniform Customs and Practice
for Documentary Credits 91993 revision), International Chamber of Commerce
Publication No. 500 ("UCP"), and to the extent not inconsistent with UCP, the
laws of the State of California.
This Credit sets forth in full the terms of our undertaking, and such terms
shall not be modified, amended or amplified by any document, instrument or
agreement referred to in this Credit, in which this Credit is referred to or to
which this Credit relates.
SPECIAL INSTRUCTIONS:
The original of this Credit must be presented together with the above documents
in order to endorse the amount of each drawing on the reverse side.
All banking charges imposed by us under this Credit are for the account of the
Applicant.
Sincerely,
Union Bank of California, N.A.
By______________________________
Print Name:______________________
Its:_____________________________
36
37
ANNEX A
INSTRUCTION TO TRANSFER
UNION BANK
c/o SOUTHERN CALIFORNIA
INTERNATIONAL OPERATIONS CENTER
1980 Saturn Street, VO1-519
Monterey Park, CA 91755-7417
Attention: Standby Letter of Credit Section
-------------------, ---
Re: Irrevocable Letter of Credit No. ____________ dated December____, 1998.
Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
------------------------------
------------------------------
------------------------------
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit). Transferee, by acceptance of the
Letter of Credit, acknowledges that it is aware of the conditions on draws under
the letter of credit as set forth in Section 3.1 of that certain Lease, Dated
December 20, 1996, as amended December 10, 1998, between Applicant, as tenant,
and MDA-San Bernardino Associates, LLC, as landlord, and that certain Letters of
Credit Agreement, dated December __, 1998, among Applicant, MDA-San Bernardino
Associates, LLC and the undersigned beneficiary, and agrees not to draw on the
Letter of Credit unless and until all conditions for draw under such Lease and
such Agreement have been satisfied.
By this transfer, all rights of the undersigned beneficiary in
the Letter of Credit are transferred to the transferee and transferee shall
hereafter have the sole rights as beneficiary thereof as though such transferee
were the beneficiary originally named in the Letter of Credit.
Please acknowledge receipt of this Instruction to Transfer by
signing in the space provided below and returning such signed copy to the
transferee named above.
Very truly yours,
[Name of Beneficiary]
By:______________________
Title:____________________
Receipt of Instruction to Transferee hereby accepts the Letter of
Transfer acknowledged as of Credit as of:_____________________,____
___________________, 19____: _____________________________________
[Name of Letter of Credit Issuer] [Name of Transferee]
By:________________________ By:________________________
Title:_____________________ Title:______________________
37
38
EXHIBIT " 9"
UNION BANK
C/O SOUTHERN CALIFORNIA
INTERNATIONAL OPERATIONS CENTER
1980 Saturn Street, VO1-519
Monterey Park, CA 91755-7417
Attention: Standby Letter of Credit Section
Date: December __, 1998 IRREVOCABLE LETTER OF CREDIT NO.___________
BENEFICIARY: APPLICANT:
Cinema Star Luxury Theaters, Inc.
12230 El Camino Real, Suite 320
San Diego, CA 92130
Currency: USD
Amount: $275,000 (Two Hundred Seventy-Five Thousand and no/100 U.S.
Dollars)
Available by: Payment at this office
Ladies and Gentlemen:
For the account of_____________________("Beneficiary"), we hereby open in your
favor our Irrevocable Letter of Credit No.________________ ("Credit") for an
amount not to exceed a total of U.S. $275,000, effective immediately and
expiring on December ___, 1999, or any automatically extended date or any
alterative date as herein set forth at the close of business of this office in
Monterey Park, California.
Funds under this Credit are available to you for all or any part of this Credit
upon presentation of the following documentation:
Your sight draft drawn on us marked "Drawn under Union Bank of
California, N.A. Irrevocable Standby Letter of Credit No. _____________, dated
________________."
This Credit shall be deemed automatically extended without an amendment for a
one year period beginning on the present expiration date hereof December ___,
1999, and upon each anniversary of such date, unless at least sixty (60) days
prior to any such expiration date we have sent you written notice by courier
service or overnight mail that we elect not to permit this Credit to be so
extended beyond its then current expiration date. This Credit shall finally
expire on December___, 2000, if it has not previously expired in accordance with
the preceding paragraph.
The date this Credit expires in accordance with the preceding paragraph is the
"Final Expiry Date". Upon the occurrence of the Final Expiry Date this Credit
shall fully and finally expire and no presentations made under this Credit after
such date will be honored.
Upon receipt by you of our notice that we elect not to renew, or at any time
thirty (30) days or less prior to the Final Expiry Date, you may draw against
the Credit upon presentation of the following documentation:
Your sight draft drawn on us marked: "Drawn under Union Bank of
California, N.A., Irrevocable Standby Letter of Credit No. _____________, dated
__________________."
38
39
We will promptly honor all drafts drawn in compliance with the terms of this
Credit if received on or before the Final Expiry Date at the address above.
Documents are to be sent in one lot by courier service, overnight mail or hand
delivery.
Drafts presented at our office at the address set forth above no later than
10:00 a.m. shall be honored on the date of presentation, by payment in
accordance with your payment instructions that accompany each such draft. If
requested by you, payment under this Credit may be made by wire transfer of
immediately available funds to your account as specified in your payment
instructions, or by deposit of same funds in your designated account that you
maintain with us.
The Credit is transferable. Transfer of this Letter of Credit shall be effected
by the presentation to us of a certificate signed by Beneficiary in
substantially the form of Annex A attached hereto, with a copy delivered to the
Applicant. Upon presentation to us of such a certificate, the transferee named
in such certificate will thereupon become the Beneficiary hereof and will be
entitled to draw hereunder as though said transferee were the Beneficiary
originally named in this Letter of Credit.
This Credit shall be governed by and subject to the Uniform Customs and Practice
for Documentary Credits 91993 revision), International Chamber of Commerce
Publication No. 500 ("UCP"), and to the extent not inconsistent with UCP, the
laws of the State of California.
This Credit sets forth in full the terms of our undertaking, and such terms
shall not be modified, amended or amplified by any document, instrument or
agreement referred to in this Credit, in which this Credit is referred to or to
which this Credit relates.
SPECIAL INSTRUCTIONS:
The original of this Credit must be presented together with the above documents
in order to endorse the amount of each drawing on the reverse side.
All banking charges imposed by us under this Credit are for the account of the
Applicant.
Sincerely,
Union Bank of California, N.A.
By______________________________
Print Name:______________________
Its:_____________________________
39
40
ANNEX A
INSTRUCTION TO TRANSFER
UNION BANK
c/o SOUTHERN CALIFORNIA
INTERNATIONAL OPERATIONS CENTER
1980 Saturn Street, VO1-519
Monterey Park, CA 91755-7417
Attention: Standby Letter of Credit Section
-------------------, ---
Re: Irrevocable Letter of Credit No. ____________ dated December _____, 1998.
Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
------------------------------
------------------------------
------------------------------
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit). Transferee, by acceptance of the
Letter of Credit, acknowledges that it is aware of the conditions on draws under
the letter of credit as set forth in Section 2.2.2..6 of Exhibit "C" that
certain Lease, Dated December 20, 1996, as amended December 10, 1998, between
Applicant, as tenant, and MDA-San Bernardino Associates, LLC, as landlord, and
that certain Letters of Credit Agreement, dated December __, 1998, among
Applicant, MDA-San Bernardino Associates, LLC and the undersigned beneficiary,
and agrees not to draw on the Letter of Credit unless and until all conditions
for draw under such Lease and such Agreement have been satisfied.
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and transferee shall
hereafter have the sole rights as beneficiary thereof as though such transferee
were the beneficiary originally named in the Letter of Credit.
Please acknowledge receipt of this Instruction to Transfer by signing in
the space provided below and returning such signed copy to the transferee named
above.
Very truly yours,
[Name of Beneficiary]
By:______________________
Title:____________________
Receipt of Instruction to Transferee hereby accepts the Letter of
Transfer acknowledged as of Credit as of:_____________________,____
___________________, 19____: _____________________________________
[Name of Letter of Credit Issuer] [Name of Transferee]
By:________________________ By:________________________
Title:_____________________ Title:______________________
40