- Current report filing (8-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 28, 2011
CIRCLE ENTERTAINMENT INC.
(Exact name of registrant as specified in charter)
Delaware
001-33902
36-4612924
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
650 Madison Avenue
New York, New York
10022
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (212) 838-3100
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
£
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 28, 2011, in furtherance of its new location-based entertainment line of business, Circle Entertainment Inc. (the “Company”), through its wholly-owned subsidiary Circle Entertainment Property-Orlando, LLC (the “Circle Subsidiary”), entered into a Transaction Agreement with The Square, LLC, Orlando Hotel International SPE, LLC, and Orlando Hotel International SPE Holdings, LLC (The Square, LLC, Orlando Hotel International SPE, LLC, and Orlando Hotel International SPE Holdings, LLC are collectively the “Whittall Parties”) to co-develop a project in Orlando, Florida to be known as “I-Walk Orlando” on which the Company’s SkyView™ observation wheel will be placed beside retail, restaurant and bar and entertainment facilities.
A brief description of the terms and conditions of the Transaction Agreement follows. Such description of the Transaction Agreement is not complete and qualified in its entirety by reference to the full text of the Transaction Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Under the Transaction Agreement, the Circle Subsidiary will acquire a 65% interest in the ownership of two adjacent properties, the “OHI Parcel” of 10 acres and the “Square Parcel” of 18 acres (collectively, the “I-Walk Property”), currently owned by certain of the Whittall Parties, and located on International Drive in Orlando, Florida. The closing of the transaction, estimated to be in the second half of 2011, will be subject to the satisfaction of a number of conditions, including (a) the rearrangement of the existing first mortgage loans with CIBC (the “CIBC Loan”) to extend the existing maturity dates on the I-Walk Property for five years and increase the principal balance thereof by approximately $11 million in the aggregate (the proceeds of which are to be used to improve the I-Walk Property and for tenant installations); (b) acquiring good title to the I-Walk Property; and (c) the new property owner entering into a 99-year lease for property upon which the Company’s SkyView™ observation wheel and a 25,000 square foot retail, service and maintenance building will be located. The Circle Subsidiary is responsible for funding certain obligations between execution of the Transaction Agreement and the closing as follows: (a) $65,000 for reimbursement real estate tax escrow payments for November and December 2010; (b) approximately $20,000 per month for real estate tax obligations after December 2010; (c) $50,000 commencing May 2011, representing approximately 65% of the monthly interest payments required (prepayment of a portion may be required to maintain CIBC interest reserve); (d) up to $45,000 per month for architectural and engineering services relating to the site design; and (e) 65% of ongoing property expenses, estimated at $2,000 per month. The Whittall Parties will be responsible for funding 35% of the obligations specified in clauses (b)-(e) in the previous sentence. The I-Walk Property will be developed in two phases, each constituting approximately 102,000 square feet. The closing of the CIBC Loan will be contingent on pre-leasing of approximately 102,000 square feet at the I-Walk Property, of which the SkyView™ observation will be 25,000 square feet. As part of the closing, the Circle Subsidiary will be required to fund $5 million in the aggregate towards the development of the I-Walk Property (but amounts advanced as set forth above will be offset against the funding required at closing.). In addition to the required equity contributions, under the terms of the CIBC Loan, the Company will be responsible for building and installing the SkyView™ observation wheel and terminal building at an approximate cost of $50 million and will need to arrange the financing necessary to do so. The Company does not currently have any financing commitments in place.
