EXHIBIT 10.58
Second Amendment to Amended and Restated
Master Operating Lease
This Second Amendment to Amended and Restated Master Operating Lease is entered
into as of this 1st day of September, 2005, by and between Sutton Hill Capital,
LLC, (as “Landlord”) and Citadel Cinemas, Inc. (as “Tenant”), with reference to
the following facts:
WHEREAS, Landlord and Tenant initially entered into a Master Operating Lease
with respect to four properties on July 28, 2000 (the “Original Master Operating
Lease”);
WHEREAS, that Master Operating Lease was amended and restated on January 29,
2002, to reflect the release from the Master Operating Lease of that certain
cinema property commonly known as the Murray Hill Theater (the “Amended and
Restated Master Operating Lease”);
WHEREAS, the Amended and Restated Master Operating Lease was amended on
October 22, 2003, by an Omnibus Amendment Agreement to reflect the release from
the Amended and Restated Master Operating Lease of that certain cinema property
commonly known as the Sutton Cinema (the “First Amendment to the Amended and
Restated Master Operating Lease,” and as so amended the “MOL”);
WHEREAS, the parties wish to further amend the MOL in order to reflect the
release from the MOL of the ground lease estate underlying that certain cinema
property commonly known as the Cinemas 1, 2 & 3 and the substitution of a
license interest for Landlord’s ground lease tenant interest in that ground
lease estate;
The parties hereto, for good and valid consideration, the receipt and
sufficiency of which is hereby acknowledged, do hereby amend the MOL as set
forth below. Except as specifically so amended, the MOL shall continue in full
force and effect. Terms not specifically defined herein, shall have the same
meaning as in the MOL.

  1.   Whereas Clauses.

  a.   The first Whereas Clause as set forth in the MOL is superseded in its
entirety to provide as follows:

WHEREAS, the Landlord owns (i) a license to maintain certain cinema improvements
commonly known as the Cinemas 1, 2 and 3 on that certain real property located
at 1001 Third Avenue, New York, New York 10022, and owned by Sutton Hill
Properties LLC,

 

--------------------------------------------------------------------------------

 

and (ii) and a lease of that certain real property commonly known as the Village
East Cinemas located at 181 Second Avenue, New York, New York 10003,.which
properties are more fully described on Exhibit A attached hereto and
incorporated herein by this reference (individually, a “Leased Site” and
collectively, the “Leased Sites”);

  b.   The third Whereas Clause as set forth in the MOL is superseded in its
entirety to provide as follows:

WHEREAS, the parties wish to provide herein for the subleasing or sublicensing
of the Leased Sites and the leasing or subleasing, as the case may be, of the
Theatre Improvements and Equipment thereon and therein by the Landlord to the
Tenant pursuant to the terms and provisions herein set forth.

  2.   Defined Terms. The following defined terms set forth in Section 1.1 of
the MOL are amended as set forth below.

  a.   The definition of “Acquisition Cost” is amended to reduce the dollar
amount specified in clause (a) from $33 million to $24 million, and to add the
following to the end of the definition, so as to provide that the “Acquisition
Cost” will be reduced in the event that Sutton Hill Properties, LLC, its
successors or assigns (“SHP”) acquires the remaining interest of the Landlord in
the building and improvements constituting the Cinemas 1, 2 & 3:

and, (iii) in the event that Sutton Hill Properties, LLC, its successors or
assigns (“SHP”) acquires the remaining interest of the Landlord in the building,
improvements and equipment constituting the Cinemas 1, 2 & 3 (the “Landlord’s
Continuing Cinema Interest”), the amount paid by SHP for such remaining interest
(including, without limitation, any amounts paid for the termination of the
license underling Landlord’s Continuing Cinema Interest) up to a maximum of
$100,000.

  b.   The definition of “Applicable Rent Amount” is superseded in its entirety
to read as follows:

“Applicable Rent Amount” means for any calendar month (or part thereof), the
amount of $141,566.67, multiplied, as of the end of each Lease Year by the
Multiplier (as such terms are hereinafter defined). For purposes of the
foregoing, (i) a “Lease Year” means each period beginning on the Effective Date
or an anniversary thereof and ending on the day prior to the next anniversary
thereof, and (ii) the “Multiplier” means 68.42% of a fraction, the

2

--------------------------------------------------------------------------------

 

numerator of which is the Consumer Price Index in effect for the month of March
preceding the anniversary date in question and the denominator of which is the
Consumer Price Index in effect for the month of March in the prior year,
provided that the multiplier for any Lease Year shall not be greater than 1.043
nor less than 1.0215. In the event SHP acquires the Landlord’s Continuing Cinema
Interest, the Applicable Rent Amount will be further reduced by 8.25% per year
of the amount paid by SHP for such remaining interest (including any amounts
paid with respect to the termination of the underlying license), up to a maximum
of $100,000.

  c.   A new definition is added after the definition of “Legal Requirements” as
follows:

“License and Option Agreement” means that certain license and option agreement
between SHC and Landlord dated as of September 1, 2005 with respect to the
Landlord’s Continuing Cinema Interest.

  d.   The definition of “Site Leases” is amended to replace the reference to
the prior ground lease by a reference to the new License and Option Agreement by
replacing clause (b) with the following:

The License and Option Agreement covering the premises at 1001, 1003, 1005 and
1007 Third Avenue, New York, New York 10022 containing Cinemas 1, 2 & 3.

  3.   Section 2.2(f) setting forth Tenant’s obligation to pay rent on the
estates underlying the Landlord’s interests in the Village East Cinemas and the
Cinemas 1, 2 & 3, is modified to reflect the fact that the ground lease
underlying the Cinemas 1, 2 & 3 has been replaced by the License and Option
Agreement, and shall hereafter provide as follows (the new language being
underscored):

Site Leases. The Tenant agrees to pay or cause to be paid to each Site Landlord,
on or before the first Business Day of each calendar month throughout the Lease
Term, all fixed or base rent and other charges to be due under the respective
Site Leases for such calendar month and to pay as and when due and payable
pursuant thereto all additional rent and other charges payable pursuant to the
respective Site Leases (excluding only amounts (i) payable to the extent
resulting from a Landlord Act as lessee or licensee thereunder or the breach by
Landlord of any obligation thereunder which was not the result of a Tenant
Event, or (ii) which relates to a period prior to commencement of the Lease Term
and which has not been assumed by or become the obligation of Tenant pursuant
hereto). If Tenant attempts to make payment directly to a Site Landlord

3

--------------------------------------------------------------------------------

 

and such payment is rejected because Tenant is not such Site Landlord’s tenant
or licensee, Tenant shall provide funds to Landlord to enable it to pay, and
Landlord agrees that, upon receipt of such funds (and provided funds owing to it
are also paid), it shall pay, sums due to the applicable Site Landlord.

  4.   Section 2.3(g) dealing with Landlord’s representations and warranties as
to the Site Leases is modified to reflect the fact that the ground lease
underlying the Cinemas 1, 2 & 3 has been replaced by the License and Operating
Agreement and the fact that, as of the date of this amendment, the Tenant is
already in possession of the Premises, and shall hereafter provide as follows
(the new language being underscored):

Site Leases. The Site Leases consist of the documents identified in the
definition of “Site Leases.” Landlord has made available to Citadel and Tenant
true and complete copies of the Site Leases. The Site Leases have not been
amended or modified except as set forth in the documents identified in the
definition of “Site Leases.” There are no options to purchase or rights of first
refusal or offer or similar rights relating to any of the Theatre Properties
other than the License and Option Agreement. Landlord is the holder of the
tenant’s, lessee’s or licensee’s interest under each Site Lease and is in
possession of the property demised under each Site Lease (subject only to
Tenant’s rights under this Lease) and, to the Actual Knowledge of Landlord, no
other Person has any interest as tenant or lessee or licensee in or to said Site
Lease or any rights to possession or occupancy of any portion of the property
demised under any Site Lease except as described on Exhibit C hereto. There are
no security deposits under any of the Site Leases. Landlord’s interest in each
Site Lease is not subject to any Lien except as set forth in Exhibit C and the
Licensee and Option Agreement. Each of the Site Leases is in full force and
effect. Landlord (or a predecessor), as tenant under the Site Leases, has
substantially performed all of its material covenants and material obligations
thereunder. Neither Landlord nor any Affiliate has received or delivered any
written notice under any of the Site Leases of any default or breach, and
Landlord has no Actual Knowledge of any material breach or default of any of the
Site Leases, which in either case remains uncured.

  5.   Section 4, which was previously reserved, is amended to provide as
follows:

SECTION 4.
LICENSE AND OPTION AGREEMENT PROVISIONS

4

--------------------------------------------------------------------------------

 

The parties acknowledge that Landlord has entered into the License and Option
Agreement with SHP, an affiliate of the Tenant. Pursuant to the terms of that
agreement, SHP has certain rights and obligations to purchase the entire right,
title and interest of Landlord in the Theater Improvements and Equipment
constituting the Cinemas 1, 2 & 3. In the event that SHP exercises that option,
or otherwise acquires the interests of the Landlord in the Theater Improvements
constituting the Cinemas 1, 2 & 3, then (i) the provisions of this Lease
relating to such assets will cease, and be of no further force and effect. The
Acquisition Cost will be reduced by the amount of $100,000 and the Applicable
Rent Amount will be reduced by $8,250.

  6.   Section 12. TENANT’S RIGHTS OF PURCHASE AND RENEWAL deals with Tenant’s
rights of purchase and renewal. It is amended as follows:

  a.   Section 12(g) is amended to reflect the fact that the Option Fee has
already been paid, and to provide as follows:

In consideration of the Purchase Option, on or before the Effective Date, the
Tenant has previously paid the Option Fee to the Landlord. If the Tenant does
not exercise the Purchase Option, the Landlord shall be entitled to keep the
Option Fee. If the Tenant exercises the Purchase Option, the Acquisition Cost
shall be reduced by an amount equal to the Option Fee.

  b.   Section 12 (i) dealing with the Tenant’s renewal rights, is amended to
reflect the fact that the Murray Hill Cinema and Sutton Cinema have been sold,
and that the ground lease underlying the Cinemas 1, 2 & 3 has been replaced by
the License and Option Agreement, and to provide as follows:

The Renewal Rental Rate of the Theatre Properties for each full calendar month
of the first year of the Renewal Term shall be an amount equal to the greater of
(i) the Basic Rent as it would be had the Initial Term included such year and
(ii) a fair market rental value of the leasehold interests in the Village East
Cinemas and the remaining interest of the Landlord, if any, in the Cinemas 1, 2
& 3 based on the highest and best use of such applicable leasehold estate in the
case of the Village East Cinemas and the highest and best use of the remaining
interest of the Landlord, if any, in the Cinemas 1, 2 & 3(subject to limitations
as to use set forth in the applicable Site Lease with respect to the portion (if
any) of the Renewal Term to which such limitations apply), as shall be agreed
upon by the Landlord and the Tenant or, if they are unable to agree, pursuant to
the Appraisal Procedure. Each year thereafter during the Renewal Term, the Basic
Rent shall be increased as determined pursuant to the terms of paragraph
(j) hereof.

5

--------------------------------------------------------------------------------

 

  7.   Section 25. NOTICES AND REQUESTS is amended to strike the requirement
that copies of any notices go to Duane, Morris & Heckscher and Whitman Breed
Abbot & Morgan and to change the address of Citadel Cinemas, Inc to:

     
 
  c/o Reading International, Inc
 
  500 Citadel Drive, Suite 300
 
  Commerce, California 90040
 
  Attention: President
 
  Telecopy: (213) 235-2229

  8.   Section 27. LEASEHOLD INTERESTS relates to the obligations of the Tenant
with respect to the underlying leasehold estates and is amended to reflect the
replacement of the ground lease underlying the Cinemas 1, 2 & 3 with the License
and Option Agreement and is amended to provide as follows:

SECTION 1) LEASEHOLD INTERESTS.
            i) This Lease is subject to all of the terms, covenants, conditions
and agreements contained in the Site Leases for the Lease Term. Except as
otherwise expressly provided in this Lease, all of the terms, covenants,
conditions and agreements contained in the Site Leases, except such as by their
nature or purpose are inapplicable or inappropriate to the leasing of the
Theatre Properties pursuant to this Lease, are hereby incorporated in and made a
part of this Lease with the same force and effect as though set forth at length
herein and except that obligations and liabilities of the tenant or lessee or
licensee thereunder are deemed to refer to Tenant hereunder and all rights,
benefits, indemnities and protections in favor of the lessor or landlord or
licensor thereunder also inure to the benefit of the Landlord hereunder.
            ii) For the purposes of this Lease, the provisions of the Site
Leases, as incorporated herein, are subject to the following modifications or
deletions: (i) in all provisions requiring the approval or consent of the
Landlord, if the approval or consent of the lessor or licensor under any of the
applicable Site Leases is also required, the Tenant shall be required to obtain
the approval or consent of such lessor or licensor in addition to the approval
or consent of the Landlord; and (ii) the time limits provided in each of the
Site Leases for the giving of notice, making demands, performance of any act,
condition or covenant, or the exercise of any right, remedy, or option, are
amended for the purpose of this Lease by lengthening or shortening the same in
each instance by five (5) days, as appropriate, so that notices may be given,
demands made, or any act, condition or covenant performed, or any right, remedy
or option

6

--------------------------------------------------------------------------------

 

hereunder exercised, by the Landlord or the Tenant, as the case may be, within
the same limit relating thereto contained in the Site Leases.
            iii) The Tenant hereunder covenants and agrees to perform and to
observe and to cause each permitted sublessee to perform and observe all of the
terms, covenants, provisions, conditions and agreements of the Site Leases on
the Landlord’s part as lessee or licensee thereunder to be performed and
observed (including, without limitation, (x) payment of all rent, additional
rent, and any other amounts payable by the Landlord as lessee or licensee under
the Site Leases, (y) surrender of each Theatre Property under the Site Lease
applicable thereto in the condition required at the end of the term thereof as
if such term end coincided with the expiration or sooner termination of the
Lease Term, and (z) reconstruction following a casualty if and to the extent
required therein) to the end that all things shall be done which are necessary
to keep unimpaired the rights of the Landlord as lessee or licensee under the
Site Leases. The Landlord and Tenant further covenant that they shall cause to
be exercised any renewal option contained in the Site Leases which relates to
renewal occurring in whole or in part during the Lease Term, including under any
renewal term of this Lease. The Tenant agrees to cooperate fully with the
Landlord to enforce the Landlord’s rights as the lessee or licensee under any of
the Site Leases as against the lessor or licensor under any of the Site Leases.
            iv) The Tenant covenants and agrees pursuant to Section 11 hereof to
indemnify and hold harmless the Landlord and any Pledgee from and against any
and all Losses arising by reason of the Tenant’s or any permitted sublessee’s
failure to comply with the Site Leases or the provisions of this Section 27
other than to the extent arising, from (i) a Landlord Act or (ii) any breach of
any covenant or agreement of Landlord or any Affiliate under this Lease or any
Other Lease Document.
            v) The Landlord and the Tenant agree that during the Lease Term the
Landlord shall have no obligation or responsibility to provide services or
equipment required to be provided or repairs or restorations required to be made
in accordance with the provisions of the Site Leases by the lessor or licensor
thereunder. The Landlord shall in no event be liable to the Tenant nor shall the
obligations of the Tenant hereunder be impaired or the performance thereof
excused because of any failure or delay on the part of the Landlord as the
lessee or licensee under the Site Leases in providing such services or equipment
or making such restorations or repairs and such failure or delay shall not
constitute a basis for any claim against the Landlord or any offset against any
amount payable to the Landlord under this Lease. So long as there is no Event of
Default hereunder, the Landlord will reasonably cooperate, at the Tenant’s sole
cost and expense, to seek from the lessor or licensor under

7

--------------------------------------------------------------------------------

 

any Site Lease the performance by such lessor or licensor of its obligations
under the applicable Site Lease.

  9.   Landlord, upon Tenant’s request, shall execute and deliver to Tenant, at
Tenant’s cost, (a) a Memorandum of this Amendment, and (b) such Memorandum or
other agreement as may be required in order to cause any and all prior
Amendments of this Lease to be properly recorded and indexed, together with any
and all transfer tax returns and other documents required to record any such
Memorandum or agreement, all in form reasonably satisfactory to Tenant
(including, without limitation, any modifications of such Memorandum, returns or
other documents as may be required to record any such Memorandum or other
agreement). Tenant will be responsible for all fees and expenses in connection
with the preparation and/or filing of any such Memorandum, returns or other
documents.

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]

8

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Landlord and Tenant hereby enter into this Second Amendment
to the Amended and Restated Master Operating Lease as of the date first set
forth above.
Sutton Hill Capital, LLC

              By:   Sutton Hill Associates   Its:   Sole Member
 
           
 
  By:   /s/ James J. Cotter    
 
  Its:  
 
Manager    
 
           
 
  By:   /s/ Michael R. Forman    
 
  Its:  
 
Manager    
 
            Citadel Cinemas Inc.    
 
            By:   /s/ S. Craig Tompkins           Its:   Vice Chairman

9