exv10w17xay



 






EXHIBIT 10.17(a)


NOTE: THIS
DOCUMENT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST PURSUANT
TO RULE 406
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. PORTIONS OF THIS DOCUMENT FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED HAVE BEEN REDACTED AND ARE MARKED HEREIN BY “***”. SUCH
REDACTED INFORMATION HAS BEEN FILED SEPARATELY WITH THE COMMISSION PURSUANT TO THE CONFIDENTIAL
TREATMENT REQUEST.




LEASE




CENTURY THEATRES




Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	Recitals
	 	 	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE I: Definitions — Exhibits	 	 	 	 
	          1.01
	 	Attachments to Lease and Exhibits 	 	 	1	 
	          1.02
	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II: Premises — Term — Options — Covenant of Title	 	 	 	 
	          2.01
	 	Lease of Premises 	 	 	2	 
	          2.02
	 	Term of Lease 	 	 	2	 
	          2.03
	 	Option to Extend Lease Term 	 	 	3	 
	          2.04
	 	Covenant of Title 	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE III: Use of Premises	 	 	 	 
	          3.01
	 	Use 	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE IV: Rent	 	 	 	 
	          4.01
	 	Base Rent / Minimum Monthly Rent 	 	 	4	 
	          4.02
	 	Percentage Rent 	 	 	4	 
	          4.03
	 	Rent Payments 	 	 	5	 
	          4.04
	 	Place for Payment of Rent 	 	 	5	 
	          4.05
	 	Late Payment of Rent 	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE V. Taxes, Assessments and Utilities	 	 	 	 
	          5.01
	 	Impositions 	 	 	5	 
	          5.02
	 	Proration of Taxes 	 	 	6	 
	          5.03
	 	Exceptions from Impositions; Charges in Lieu of Impositions 	 	 	6	 
	          5.04
	 	Contest of Taxes 	 	 	6	 
	          5.05
	 	Utilities 	 	 	7	 
	          5.06
	 	Personal Property Taxes 	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE VI: Insurance	 	 	 	 
	          6.01
	 	Acquisition of Insurance Policies 	 	 	7	 
	          6.02
	 	Types of Required Insurance 	 	 	7	 
	          6.03
	 	Terms of Insurance 	 	 	8	 
	          6.04
	 	Landlord’s Acquisition of Insurance 	 	 	8	 
	          6.05
	 	Insurance Money and Other Funds Held In Trust 	 	 	8	 
	          6.06
	 	Application or Proceeds of Physical Damage Insurance 	 	 	8	 
	          6.07
	 	Cooperation for Insurance Proceeds 	 	 	9	 
	          6.08
	 	Waiver of Right of Recovery 	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE VII: Maintenance, Repairs And Alterations	 	 	 	 
	          7.01
	 	Alterations — Changes 	 	 	9	 






i









 






LEASE




CENTURY THEATRES




Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	          7.02
	 	Repairs — Maintenance	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VIII: Environmental Matters	 	 	 	 
	          8.01
	 	Definition 	 	 	10	 
	          8.02
	 	Tenant’s Responsibilities and Landlord Indemnity 	 	 	10	 
	          8.03
	 	Remedial Work 	 	 	11	 
	          8.04
	 	Maintenance of Premises 	 	 	12	 
	          8.05
	 	Landlord’s Responsibilities and Tenant’s Indemnity 	 	 	12	 
	          8.06
	 	Landlord Inspection 	 	 	13	 
	          8.07
	 	Effect of Termination 	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE IX: Improvements	 	 	 	 
	          9.01
	 	Tenant’s Signs 	 	 	14	 
	          9.02
	 	Hold Harmless 	 	 	14	 
	          9.03
	 	Permits; Compliance With Codes 	 	 	14	 
	          9.04
	 	Ownership 	 	 	14	 
	          9.05
	 	Control 	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE X: Indemnity	 	 	 	 
	          10.01
	 	Indemnification 	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE XI: Assignment and Subletting	 	 	 	 
	          11.01
	 	Assignment and Subletting 	 	 	15	 
	          11.02
	 	Notice to Landlord 	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE XII: Encumbrance of Leasehold Estate	 	 	 	 
	          12.01
	 	Leasehold Mortgages 	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE XIII: Mortgage Subordination	 	 	 	 
	          13.01
	 	Existing Mortgages 	 	 	16	 
	          13.02
	 	Future Mortgages 	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE XIV: Condemnation — Eminent Domain	 	 	 	 
	          14.01
	 	Definitions 	 	 	16	 
	          14.02
	 	Notice to Other Party 	 	 	17	 
	          14.03
	 	Total Taking — Effect on Rent and Term 	 	 	17	 
	          14.04
	 	Distribution of Award for Taking 	 	 	17	 
	          14.05
	 	Partial Taking — Rent Adjustments 	 	 	18	 
	          14.06
	 	Partial Taking — Option to Terminate 	 	 	18	 
	          14.07
	 	Separate Tenant’s Award 	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE XV: Default	 	 	 	 






ii









 






LEASE




CENTURY THEATRES




Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	          15.01
	 	Tenant’s Default	 	 	18	 
	          15.02
	 	Landlord’s Remedies Cumulative	 	 	18	 
	          15.03
	 	Landlord’s Default	 	 	20	 
	          15.04
	 	Waiver of Redemption	 	 	20	 
	          15.05
	 	Dispute Resolution	 	 	20	 
	          15.06
	 	Attorney Fees	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE XVI: Representations and Warranties	 	 	 	 
	          16.01
	 	Landlord’s Representations and Warranties 	 	 	21	 
	          16.02
	 	Tenant’s Representations and Warranties 	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE XVII: Damage or Destruction	 	 	 	 
	          17.01
	 	Repairs, Alterations and Further Improvements	 	 	22	 
	          17.02
	 	Prompt Repair 	 	 	22	 
	          17.03
	 	Rent Adjustment 	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE XVIII: Miscellaneous	 	 	 	 
	          18.01
	 	Limitation on Liability 	 	 	23	 
	          18.02
	 	Modification 	 	 	23	 
	          18.03
	 	Severability 	 	 	23	 
	          18.04
	 	Governing Law 	 	 	23	 
	          18.05
	 	Terminology 	 	 	23	 
	          18.06
	 	Counterparts 	 	 	23	 
	          18.07
	 	Binding Effect 	 	 	23	 
	          18.08
	 	Captions 	 	 	23	 
	          18.09
	 	Notice to Landlord and Tenant 	 	 	23	 
	          18.10
	 	Addresses for Notices to Landlord and Tenant 	 	 	24	 
	          18.11
	 	Entire Agreement 	 	 	24	 
	          18.12
	 	Sale or Transfer of Premises 	 	 	24	 
	          18.13
	 	Force Majeure 	 	 	25	 
	          18.14
	 	Waiver 	 	 	25	 
	          18.15
	 	Estoppel Certificate 	 	 	25	 
	          18.16
	 	Number and Gender 	 	 	25	 
	          18.17
	 	No Holding Over 	 	 	25	 
	          18.18
	 	Mechanics Liens 	 	 	25	 
	          18.19
	 	Relationship of Parties 	 	 	25	 
	          18.20
	 	Time of the Essence 	 	 	26	 
	          18.21
	 	Facsimile Copies	 	 	26	 
	          18.22
	 	Anti-Merger 	 	 	26	 
	 
	 	 	 	 	 	 
	Signature Page	 	 	26	 









iii









 








LEASE




CENTURY THEATRES




Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	Exhibit A
	 	Description of Premises	 	 	A-1	 
	Exhibit B
	 	Site Plan of Premises	 	 	B-1	 
	Exhibit C
	 	Form of Memorandum	 	 	C-1	 
	Exhibit D
	 	Guaranty of Lease	 	 	D-1	 







iv









 








LEASE




     THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called “Landlord”, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called “Tenant”.



RECITALS




     Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.



     Landlord and Tenant wish to provide for the lease by Landlord to Tenant of
the Premises.



     NOW THEREFORE, the parties hereto agree as follows:
 

ARTICLE I




EXHIBITS — DEFINITIONS




     1.01 Attachments to Lease and Exhibits



               Attached to this Lease and hereby made a part hereof are the following:



               EXHIBIT A — a description of the Premises.



               EXHIBIT B — a site plan of the Premises.



               EXHIBIT C — Form of Memorandum of Lease



               EXHIBIT D — Guaranty of Lease



     1.02. Definitions.



               The following terms for purposes of this Lease shall have the meanings hereinafter specified:



               The term “Commencement Date” shall mean October
1, 1995.



               The term “Effective Date” shall mean October
1, 1995.



               The term “Default Rate” shall mean the lesser of (i) the “Prime Rate” plus four percent
(4%) or (ii) the highest rate of interest that my lawfully be charged to the party then required to
pay interest under this Lease at the Default Rate.



               The Term “Initial Rent Due Date” shall mean October
1, 1995.



               The term “Initial Term” is defined in
Section 2.02 herein.



1









 





               The term “Leased Premises” shall mean Tenant’s Building as set forth in Exhibit B and the
land hereunder and the rights, easements and privileges granted to Tenant in this Lease.



               The term “Mortgage” shall mean any mortgage or deed of trust or other instrument in the
nature thereof evidencing a security interest in the Entire Premises or any part thereof.



               The
term “Number of Term Years” shall mean ***



               The
term “Option Periods” shall mean *** successive
separate periods of *** each.



               The
term “Percentage Rate” shall mean ***



               The term “Premises” shall mean the real property set forth in Exhibit A.



               The term “Permitted Use” shall mean the construction and operation of a
motion picture
theatre, and for such activities in connection therewith as are customary and usual at other
motion picture theatres operated by Tenant including, without limitation, the operation of vending
machines and video games; operation of concession stands; sale of movie related T-shirts, toys and
memorabilia, rentals of auditoriums to third parties and other such activities on the Premises



               The term “Prime Rate” shall be the per annum interest rate from time to time
publicly
announced by Citibank, N.A., New York, New York as its base rate. The Prime Rate shall be as
announced by Citibank, N.A. notwithstanding that Citibank, N.A. may actually charge other rates,
and a written statement from Citibank, N.A. as to what the Prime Rate was on any given day shall
be deemed conclusive. In the event that Citibank, N.A. should cease to publicly announce its prime
rate, the Prime Rate hereunder shall be the prime rate of any one of the then largest banks (based
on assets) in the United States as selected by Tenant upon notice to Landlord.



               The
term “term of this Lease” or “term hereof” shall mean the initial term, as provided in the
article captioned “Term” and any renewal or extensions thereof.



ARTICLE II




PREMISES — TERM — OPTIONS — COVENANT OF TITLE




     2.01 Lease of Premises.



          A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms
and conditions contained herein. Landlord reserves the right to develop the unimproved portion
of the Premises so long
as it does not interfere with Tenant’s Permitted Use.



          B) The Premises are being leased in their “as is” condition subject to Article VIII herein
captioned “Environmental Matters”.



          C) Landlord shall deliver possession of the Premises to Tenant on the Effective Date,
free of all leases, tenancies and occupancies.



     2.02 Term of Lease.



          A) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.



2









 





               The “Initial Term” of this Lease shall begin on the Commencement Date and shall terminate
***     thereafter. References herein to the “Lease Term” shall mean the Initial Term of
this Lease or the Initial Term as extended under Section 2.02.



     2.03 Option to Extend Lease Term.



          A)
Tenant may, at Tenant’s option, extend the Initial Term of this
Lease for up to ***     consecutive additional periods of ***     each (individually called a “Renewal Term”),
subject to all the provisions
of this Lease. The Renewal Term in question shall commence at the expiration of the Initial
Term (or the immediately
preceding Renewal Term, as the case may be), and shall terminate on
the ***     of the date of
commencement of the Renewal Term in question, unless sooner terminated as provided herein.



          B) Failure to duly exercise the option for any Renewal Term shall nullify the option for the
remaining Renewal Terms.



          C) Tenant’s right to the options to extend the Lease Term and Tenant’s rights to the Renewal
Term are subject to:



               (1) This Lease being in full force and effect on the last day of the Initial Term or the
then current Renewal Term, as applicable.



               (2) Compliance with the following procedure for exercising the option in
question:



                    (a) At least nine (9) months before the last day of the Initial Term, or
the then current Renewal Term, as the case may be, Tenant shall give Landlord written notice
exercising the option.



                    (b) Each party shall, at the request of the other, execute a
memorandum acknowledging the fact that the option in question has been exercised. If an option is
properly exercised by Tenant, the failure of Landlord to execute such memorandum shall not
invalidate such option or the exercise thereof.



               (3) Tenant is not in default at time of the exercise of the renewal and at the
commencement of the renewal term.



     2.04 Covenant of Title; Authority and Quiet Possession; Transfer of Title.



               (A) Landlord represents and warrants to Tenant that: (i) Landlord has full right and
lawful authority to enter into and perform Landlord’s obligations under this Lease for the term
hereof, and has good an marketable title to the Entire Premises in fee simple, free and clear of
all contracts, leases, tenancies, agreements, restrictions, violations, encumbrances or defects in
title of any nature whatsoever which would restrict or prevent the use of or enjoyment by Tenant
of the Leased Premises or the rights, easements or privileges granted Tenant under this Lease;
(ii) this Lease shall not be subject or subordinate to any Mortgage except for such subordination
as may be accomplished in accordance with the provisions of the article captioned “Estoppel
Certificate, ect.”; (iii) if Tenant shall have discharged the obligations herein set forth to be
performed by Tenant, Tenant shall have and enjoy, during the term hereof, the quiet and
undisturbed possession of the Leased Premises and all appurtenances appertaining thereto.



3









 





ARTICLE III




USE OF PREMISES




     3.01 Use.



          A) The Premises may be used for the Permitted Use and for no other purpose.



          B) Tenant shall not use the Premises, or permit the use of the premises, in any manner which
constitutes a violation of any laws, regulations, ordinances, statutes or rules governing the
premises, or which constitutes a
nuisance or waste of which would increase Landlord’s insurance or liability.



          C) Tenant is granted all of Landlord’s rights in and to the Miracle Center Parking
Association.
Tenant shall be responsible for all costs, dues, insurance and impositions pertaining to the
Miracle Center Parking
Association.



ARTICLE IV




RENT




     4.01
Minimum Monthly Rent.



          A) Beginning on the Initial Rent Due Date, Tenant shall pay to Landlord during the Lease Term
a “Base Rent” of ***     . The Base Rent is sometimes referred to herein as the “Minimum Monthly
Rent” and shall be subject to adjustment every ***     after the Initial Rent Due Date as
set forth in Section 4.01 B below.



          B) The Minimum Monthly Rent shall apply from the Rent Commencement Date through the end of
the ***     Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the ***     Lease Year and on the first day of each ***    
Lease Year thereafter during the Term by a percentage equal to the percentage of increase from the
“base period” (as hereinafter defined in this Section) of the United States Department of Labor,
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers, Los Angeles Subgroup “All
Items”, (1982-84=100) (the “Consumer Price Index”); provided, however, in no event shall the
Minimum Monthly Rent be increased by an amount that is less than ***     greater
than the Minimum Monthly Rent payable before the adjustment date in question.



     In the event that the Consumer Price Index is not available, the successor or substitute
index shall be used for the computations herein set forth. In the event that the Consumer Price
Index or such successor or substitute index is not published, a reliable governmental or other
non-partisan publication evaluating the information theretofore used in determining the Consumer
Price Index shall be used by Landlord for the computations herein set forth. For the purposes of
the computations herein set forth, the basis for any substitute or successor index or such
governmental or non-partisan publication shall be converted to a basis of 100 only in the event
that the basis used in such index or publication is less than 100.



     4.02 Percentage Rent. In addition to the payment of Base Rent, Tenant shall pay to Landlord
for each Lease Year
during the Term of this Lease, as Percentage Rent a sum equal to the amount by which ***     of the
Gross Sales for such
Lease Year exceeds the Base Rent which is payable for such Lease Year equal to the quotient
obtained by dividing the
annual fixed rate for such Lease year by the percentage rate.



          Gross Sales shall mean all box office receipts, sales of goods, merchandise, beverages, food,
vending machines and video games. Gross sales shall exclude credits and refunds made with respect
to admissions or other sales; all federal, state, county and city admission taxes, sales taxes and
other similar taxes now or hereafter imposed (whether such taxes are collected from customers
separately from the selling price of admission tickets or absorbed therein, and




4









 




actually paid over to the taxing authority by Tenant; commissions paid to agencies or other
third parties for selling tickets; returned, exchanged, waived or “Pass Admissions” including EBF
charges on “Pass Admissions” and any sums paid to third parties for the use or rental of vending
machines, pay telephones or other amusement machines.




          Tenant agrees to furnish Landlord a statement certified by its chief financial or
similar office of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with
the delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.



          The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the Payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales.
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If it
is determined as a result of such audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due any payable with interest at the
annual rate of 18% from the date when said payment should have been
made until paid. Any information
gained from such statements or inspection shall be confidential and shall not be disclosed other
than to carry out the purposes hereof. If such audit shall disclose that Tenant has understated
the Gross Sales for such Lease Year by more than three (3%) and Landlord is entitled to any
additional Annual Percentage Rent, Tenant shall pay to Landlord all of Landlord’s reasonable cost
of such audit.



     4.03 Rent Payments. Rent and other sums to be paid by Tenant shall be payable in lawful money
of the
United States of America. All payments shall be made by Tenant to Landlord without notice or
demand.



     4.04 Place for Payment of Rent. The Annual Rent and any other charges required to be paid by
Tenant to
Landlord shall be sent to Landlord at its principal place of business, or such other address
as Landlord may direct in
writing.



     4.05
Late Payment of Rent. In the event that any monthly installment of rent is not paid within
ten (10)
days after first written notice from Landlord that such payment is past due, Tenant shall pay
Landlord interest on such
unpaid rent at the rate of eighteen percent (18%) per annum computed from the date such rent
installment was due until
the date actually paid.



ARTICLE V




TAXES, ASSESSMENTS AND UTILITIES




     5.01 Impositions.



          A) The term “Impositions” shall mean all real estate taxes, duties or assessments (special or
otherwise), water and sewer rents, whether ordinary or extraordinary, general or special, foreseen
or unforeseen, of any kind and nature whatsoever, which, at any time during the Lease Term, shall
be assessed or levied, or be attributable in any manner to the Premises, or the rents receivable
therefrom, or any part thereof or any use thereon or any facility located therein or used in
connection therewith, whether or not any of the foregoing shall be a so-called “real estate tax”
expressly excluding, however, any such items arising directly or indirectly out of any act or
omission of Landlord, any of Landlord’s predecessors in title or any other person occurring prior
to the commencement of the Term. From and after the Initial Rent Due Date, Tenant shall pay all
Impositions assessed, levied or attributable to the Premises and/or the Improvements on the
Premises. All Impositions or installments thereof payable with respect to the tax year in which
this Lease shall commence, and all Impositions or installments thereof with respect to the tax
year in which this Lease shall terminate, shall be pro-rated on a daily basis; provided, however,
that assessments or escape assessments assessed as a result of this Lease and/or the construction
of Tenant Improvements by Tenant shall not be prorated and shall be paid solely by Tenant; and
provided further that assessments attributable to Tenant Improvements made in the final year of
the Lease shall be paid solely by Tenant if Tenant demolishes the Tenant Building.




5









 





          B) With respect to Impositions which by law may be paid in installments over a period of time,
Landlord shall be deemed to have elected (the “Installment Election”) to pay such Impositions
over the longest period of
time permitted by law, regardless of whether Landlord has in fact so elected. With respect to
each year in which the
Installment Election is effective and with respect to the Impositions associated with Tenant’s
premises subject to the
Installment Election, Tenant’s share of such Imposition(s) for each year shall be the pro rata
share of the amount which
would be required to be paid to the collecting authority as if Landlord had in fact made the
Installment Election.



          C) In the event the Premises are separately assessed by the taxing authority, Tenant shall pay
all such
real property taxes directly to the taxing authority prior to delinquency. In the event Tenant fails to pay such real property
taxes as provided herein, Landlord may, but shall not be required to, pay the same, and any
amount so paid by Landlord
shall immediately thereafter become due to Landlord from Tenant as Additional Rent with
interest thereon at the rate of
18% per annum from the date of Landlord’s payment plus any fine, penalty, interest or cost
which is levied by the taxing
authority for such late payment.



          D) In the event the Premises are not separately assessed by the taxing authority, Tenant shall
pay all
such real property taxes to the Landlord prior to delinquency. In the event Tenant fails to
pay to Landlord such real
property taxes as provided herein, Tenant shall pay Landlord in addition interest thereon at
the rate of 18% per annum
from the delinquency date until such payment has been made.



     5.02 Proration of Taxes. If the Premises comprise a tax lot or lots with other property owned
by Landlord or other
parties (“Other Premises”) assessed for real estate tax purposes, together with said Other
Premises, immediately after the
Commencement Date, Landlord and Tenant shall attempt to cause the appropriate taxing
authorities to assess the
Premises for real estate tax purposes separately from all Other Premises. During any period in
which the Premises are
assessed for real estate purposes, together with any Other Premises, Landlord will pay, before
the last day on which
payment may be made without penalty or interest, all Impositions which shall be levied against
the Other Premises.



     5.03 Exceptions from Impositions; Charges in Lieu of Impositions.



          A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor
shall any of the same be deemed
to be included within the term “Impositions” as defined herein.



          B) Notwithstanding any other provision of this Article V, if at any time after the date of
this
Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in
whole or in part) or as a supplement to (provided such supplemental tax relates to real estate
or revenues from real estate
and not to other property or business as well) the taxes now levied, assessed or imposed on
real estate and buildings and
Improvements thereon, a tax shall be imposed, assessed or levied wholly or partly on the Rent,
or a tax, assessment, levy
or charge, measured or based, in whole or in part, on the Premises or on the rents derived
therefrom, shall be imposed on
Landlord, then Tenant shall pay taxes so measured or based only to the extent that such taxes
would be payable if the
Premises were the only property of Landlord subject to such taxes, or the income from
operation of the Premises were
Landlord’s only income, as the case may be.



     5.04 Contest of Taxes. Tenant at its sole cost and expense may by appropriate legal
proceedings conducted
in good faith and with due diligence, contest the amount or validity or application, in whole
or in part, of any Imposition
or lien therefor, or any other lien, encumbrance or charge against the Premises arising from
work done or materials
provided to or for Tenant. Tenant shall give Landlord reasonable notice of, and information
pertaining to, such contest
and regular progress reports with respect thereto.



Landlord shall cooperate with any effort pursued by Tenant in accordance with this Section 5.05.
Tenant shall indemnify, protect and hold harmless Landlord and the Premises from any lien or
liability with respect to any such Imposition or



6









 




contest thereof, including all costs and expenses related thereto. Landlord shall provide Tenant
with copies of notice when received by Landlord from the taxing authorities of any assessments or
reassessments of the Premises in sufficient time (but in no event later than thirty (30) days
after Landlord’s receipt of the same) to enable Tenant to contest the same in accordance with the
provisions of this Section 5.05.




     5.05 Utilities. Tenant shall pay before delinquency, directly to the appropriate
company or governmental
agency, all charges for all utilities, including, but not limited to, water, gas, electricity,
sewer, power, telephone, other
communication services and refuse disposal consumed on the Premises.



     5.06 Personal Property Taxes. During the term of this Lease, Tenant shall pay before
delinquency any and
all personal property taxes levied or assessed against any personal property located upon the
Premises. If Tenant fails to
timely pay such taxes and a lien is filed against the Premises, Landlord may discharge such
lien, if Tenant fails to
discharge such lien within ten (10) days following Tenant’s receipt of notice from Landlord,
including without limitation
reasonable attorneys’ fees, together with interest at the rate of eighteen percent (18%) per
annum from the date of
expenditure, such additional rent being due and payable within ten (10) days of notice
thereof.



ARTICLE VI




INSURANCE




     6.01 Acquisition of Insurance Policies. Tenant shall, at its sole cost and expense, procure and
maintain, or cause
to be procured and maintained, during the entire Term the insurance described in this Section
(or its then available
equivalent), and shall name Landlord and any other parties requested by Landlord as an
additional insured.



     6.02 Types of Required Insurance. Tenant shall procure and maintain the following:



          A) Commercial General Liability Insurance. Commercial general liability insurance insuring
against injuries or damages to persons or property sustained in, on or about the Premises,
Common Area and the
appurtenances thereto, including the sidewalks and alleyways adjacent thereto, with limits of
liability no less than Five
Million Dollars ($5,000,000) per occurrence and in the aggregate.



          B) Builder’s Risk Insurance. During any restorations, alterations or changes in the Premises
that
may be made by Tenant at a cost in excess of Five Hundred Thousand Dollars ($500,000) per job,
contingent liability and
builder’s risk insurance upon the entire work on the Premises to the current one hundred
percent (100%) replacement
value thereof against “all risks” of physical loss or damage to the property insured,
excluding earthquake and/or other
earth movements and flood.



          C) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenant’s
Building (excluding foundations and footings), all improvements on the Premises and personal
property insured in
the name of Landlord and Tenant against damage or destruction by fire and the perils commonly
covered under the
extended coverage endorsement (with vandalism and malicious mischief coverage) excluding
earthquake and flood
to the extent of not less than the full replacement value thereof less any deductible
applicable to all of Tenant’s
theatres insured under a blanket policy. Tenant shall be responsible for determining the
amount of fire and
extended coverage insurance to be maintained subject to Landlord’s consent, which consent is
not to be
unreasonably withheld or delayed. The proceeds of such insurance in case of loss or damage
shall be held in trust
and applied on account of the obligation of Tenant to repair and/or rebuild the Leased
Premises pursuant to the
Article captioned “Damage Clause” to the extent that such proceeds are required for such
purpose. The insurance
required to be carried by Tenant under this paragraph may be covered under a so-called
“blanket” policy covering
other operations of Tenant and its affiliates. Tenant shall name Landlord and any parties
requested by Landlord
and any holder of a mortgage on Tenant’s Building pursuant to a standard mortgage clause with
respect to the
foregoing hazard insurance, provided such holder agrees with Landlord in writing to disburse
such insurance




7









 




proceeds to Landlord for, and periodically during the course of, repair and restoration of
Tenant’s Building as set forth in this Lease.




     6.03 Terms of Insurance. The policies required under Section 6.02 shall name Landlord as
additional insured.
Tenant shall provide to Landlord certificates of insurance and copies of policies obtained by
Tenant hereunder promptly
upon the request of Landlord. Further, all policies of insurance described in Section 6.02
shall:



          A) Be written as primary policies not contributing with and not in excess of coverage that
Landlord may carry.



          B) Contain an endorsement providing that the amount of coverage will not be reduced with
respect to Landlord except after twenty (20) days prior written notice from insurance company
to Landlord and such
coverage may not be canceled with respect to Landlord except after thirty (30) days’ prior
written notice from insurance
company to Landlord.



          C) Expressly provide that Landlord shall not be required to give notice of accidents or claims
and
that Landlord shall have no liability for premiums.



          D) Be written by insurance companies having a Bests rating of” A-” or better, and such
insurance
companies shall be reasonably acceptable to Landlord.



     6.04 Landlord’s Acquisition of Insurance. If Tenant at any time during the Term fails to
procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord shall have the right to
procure the same and to
pay any and all premiums thereon, and any amounts paid by Landlord in connection with the
acquisition of insurance
shall be immediately due and payable as additional rent, and Tenant shall pay to Landlord upon
demand the full amount
so paid and expended by Landlord. Any policies of insurance obtained by Landlord covering
physical damage to the
Premises shall contain a waiver of subrogation against Tenant if and to the extent such waiver
is obtainable and if Tenant
pays to Landlord on demand the additional costs, if any, incurred in obtaining such waiver.



     6.05
Insurance Money and Other Funds Held in Trust. All insurance money or condemnation
proceeds as
provided in Article VIII, received by the Tenant shall be turned over to Landlord and held in
trust by Landlord and, except
as provided otherwise in Section 6.06, shall be applied as follows:



          First, to any Leasehold Mortgagee as required under the terms of its Leasehold Mortgage
provided that such Mortgage was of record and secured a loan made or committed to Landlord in
compliance with all of the terms and conditions of this Lease prior to the occurrence of such
loss; second, for the purpose of defraying the cost of repairing, restoring, replacing
and/or rebuilding any structure or improvement on or in the Premises as required as provided in
Section 6.06 hereof, and third, if the damaged or destroyed structure or improvement is
not repaired, restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed
of as provided in Section 6.06. Any of said funds in the hands of the Tenant or Landlord at the
end of the Term hereof shall be disposed of as set forth in Section 6.06 (A).



     6.06 Application or Proceeds of Physical Damage Insurance. In case of any insurance policies
as described in
Section 6.02 (C) (Physical Property Damage Insurance) the application of insurance proceeds
from damage or loss to
property shall be determined in part in accordance with Article XVII hereof and, in the event
of any such repair,
replacement, restoration or rebuilding, the Landlord shall disburse the proceeds of the
insurance collected to Tenant to pay
the cost of such work upon certificate of satisfactory progress and/or completion in form
satisfactory to Landlord by the
licensed architect or engineer in charge of the work. Upon completion of such repair,
replacement, restoration or
rebuilding in accordance with the provisions of this Lease, and the full payment therefor (so
no liens, encumbrances or
claims with respect thereto can be asserted against the Premises, this-lsease, Landlord or
Tenant), any insurance proceeds
received by the Landlord or Tenant with respect to the damage or destruction involved, and not
used, shall remain the
property of Landlord.




8









 





          A) Distribution of Unutilized Proceeds. At the termination of this Lease, such
insurance proceeds or condemnation awards received and held by the Landlord and not used for
repair, replacement or reconstruction (“Available
Proceeds”), shall be disposed as follows:



               (1) First, Landlord shall be awarded an amount sufficient to remove any improvements
not
repaired and to return the Property to the level of adjacent streets (“grade level”); and



               (2) Second, any remainder shall be paid to Landlord.



     6.07 Cooperation for Insurance Proceeds. Landlord and Tenant shall each cooperate with the
other in order
to obtain the largest possible recovery and execute any and all consents and other instruments
and take all other actions
reasonably necessary or desirable to effectuate the same and cause such proceeds to be paid as
hereinbefore provided.
Notwithstanding anything to the contrary contained in this Lease,
neither party shall carry any
insurance concurrent in
coverage and contributing in the event of loss with any insurance required to be furnished by
the other hereunder if the
effect of separate insurance would be to reduce the protection or the payment to be made under
such party’s insurance or
under the insurance required to be furnished by the other.



     6.08 Waiver of Right of Recovery. Landlord and Tenant hereby release each other from any and
all liability
and responsibility to one another and, to the extent legally possible to do so on behalf of
their respective insurers and
anyone claiming through or under either of them, by way of subrogation or otherwise, hereby
waive any liability for any
and all loss or damage which is of the type covered by fire and extended coverage insurance
described in this Article,
irrespective of any negligence on the part of the other party which may have contributed to or
caused such loss. Every
insurance policy carried by either party with respect to the Premises or Tenant’s Building or
land or improvements
adjoining the Premises owned or leased by Landlord shall (if it can be so written and does not
result in a material
additional premium) include provisions denying to the insurer subrogation rights against the
other party and any fee or
leasehold mortgage to the extent such rights have been waived by the insured prior to the
occurrence of damage or loss. If
the waiver of subrogation otherwise is not effective, each party covenants that it will obtain
for the benefit of the other
party an express waiver of any right of subrogation which the insurer of such party may
acquire against the other party by
virtue of the payment of any such loss covered by such insurance. In the event either party is
by law, statute, governmental
regulation, economically unfeasible or other factor beyond such party’s reasonable control
unable to obtain a waiver of the
right of subrogation for the benefit of the other party, then, during any period of time when
such waiver is unobtainable,
said party shall be deemed not to have released any subrogated claim of its insurance carrier
against the other party, and
during the same period of time the other party shall be deemed not to have released the party
who has been unable to
obtain such waiver from any claims they or their insurance carriers may assert which otherwise
would have been released
pursuant to this Section. In the event that either party is unable to obtain such waiver of
the right of subrogation for the
benefit of the other party, such party shall, within thirty (30) days of receiving notice of
such inability, give the other party
written notice of such inability.



ARTICLE VII




MAINTENANCE, REPAIRS AND ALTERATIONS




     7.01 Alterations —
Changes.



          A) At any time and from time to time during the Lease Term, Tenant may, at its sole expense,
make any alterations, additions or changes, whether structural or nonstructural, to any portion or
all of any Improvements which may exist at any time and from time to time on any portion of the
Premises, and may, at its option, construct new Improvements on the Premises, or remove or
demolish Improvements on the Premises, provided that all such alterations or changes in
Improvements and new Improvements shall be performed in a first-class manner and must comply with
all laws, zoning regulations and ordinances, and any conditions on permits issued pursuant
thereto. If the change, alteration or addition is structural or exterior in nature Landlord’s
written approval shall be first obtained.




9









 





          B) Tenant shall at all times keep the Premises or any part thereof free and clear of all
liens and claims for labor or material and free and clear of all attachments, executions and
notices.



          (C) Upon termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.



     7.02 Repairs — Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.



ARTICLE VIII




ENVIRONMENTAL MATTERS




     8.01
Definition. For purposes of this Article VIII, the term “Hazardous Material” means (a) any
substance,
product, waste or other material of any nature whatsoever which is or becomes Listed,
regulated, or addressed pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section
9601, et seq.
(“CERCLA”); the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the
Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq. (“RCRA”); the Toxic Substances Control Act,
15 U.S.C. Section 2601
et seq.; the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste
Control Act, Health and
Safety Code Section 25100, et seq.; the California Hazardous Substance Account Act, Health and
Safety Code Section
25330, et seq.; the California Safe Drinking Water and Toxic Enforcement Act, Health and
Safety Code Section 25249.5,
et seq.; California Health and Safety Code Section 25280, et seq. (Underground Storage of
Hazardous Substances); the
California Hazardous Waste Management Act, Health and Safety Code Section 25170.1, et seq.;
California Health and
Safety Code Section 25501, et seq. (Hazardous Materials Response Plans and Inventory); or the
California Porter-Cologne
Water Quality Control Act, Water Code Section 13000, et seq., all as amended, or any other
federal, state or local statute,
law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards
of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now
or at any time hereafter in
effect; (b) any substance, product, waste or other material of any nature whatsoever which may
give rise to liability under
any of the above statutes or under any statutory or common law theory based on negligence,
trespass, intentional tort,
nuisance or strict liability or under any reported decisions of a state or federal court; (c)
petroleum or crude oil, other than
petroleum and petroleum products contained within regularly operated motor vehicles; (d)
asbestos; (e) subsurface gas; (f)
urea formaldehyde foam insulation; (g) poly chlorinated byphenyls (“PCBs”); and freon and
other chloroflurocarbons.



     8.02 Tenant’s Responsibilities and Landlord Indemnity.



          A) Tenant shall not cause or permit any Hazardous Materials to be brought upon, stored, used,
generated, released into the environment or disposed of, on, in, under or about the Entire
Premises, the Common Area, or any other portion of the Premises by Tenant, its agents, employees,
contractors or invitees, in violation of any law. Upon the expiration or sooner termination of
this Lease, Tenant covenants to remove from the Premises, and/or Entire Premises at its sole cost
and expense, any and all Hazardous Materials, including any equipment or systems containing
Hazardous Materials, which are brought upon, stored, used, generated or released into the
environment at or above actionable levels by Tenant, its agents, employees, contractors or
invitees. To the fullest extent permitted by law, Tenant hereby indemnifies and defends (with
counsel experienced and competent in litigating issues of Hazardous Materials) Landlord and agrees
to hold Landlord, the Premises and the Entire Premises free and harmless from and against any and
all claims, judgments, damages, penalties, fines, costs, liabilities and losses (including,
without Limitation, diminution in the value of the Premises, damages for the loss or restriction
on use of rentable space or of any amenity of the Premises, and sums paid in settlement of claims,
attorneys’ fees, consultant fees and expert fees) which arise directly or indirectly from the
presence of actionable levels of Hazardous Materials on, in or about the Premises which is through
Tenant’s (or its agents, employees, contractors or invitees) acts or omissions brought upon,
stored, used, generated or released into the




10









 




environment by Tenant, its agents, employees, contractors or invitees (referred to as
“Tenant’s Environmental Acts”). This indemnification by Tenant of Landlord includes, without
limitation, any and all costs incurred in connection with any investigation of site conditions or
any clean up, remedial, removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of the presence of such Hazardous Materials
in, on or about the Premises, or the soil or ground water on or under the Premises or any portion
thereof due to Tenant’s Environmental Acts. Tenant shall promptly notify Landlord of any release of
Hazardous Materials in the Premises, which Tenant becomes aware of during the term of this Lease,
caused by Tenant’s Environmental Acts. Landlord agrees to indemnify, defend and hold Tenant
harmless from all claims, judgments, damages, penalties, fines, costs, resulting from the presence
of Hazardous Materials on or about the Premises, (i) on the Commencement Date of this Lease, and/or
(ii) during or after the term of this Lease, if the presence of Hazardous Materials results from
any cause other than Tenant’s Environmental Acts.




          B) Tenant shall promptly notify Landlord of, and shall promptly provide Landlord with true,
correct, complete and legible copies of all of the following environmental items relating to
the Premises which may be
filed or prepared by or on behalf of, or delivered to or served upon Tenant: reports filed
pursuant to any self-reporting
requirements, reports filed pursuant to any applicable laws or this Lease, all permit
applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices and all other reports,
disclosures, plans or
documents (excluding those which may be reasonably characterized as confidential) relating to
water discharges, air
pollution, waste generation or disposal, underground storage tanks or Hazardous Materials.



          C) In addition to Tenant’s routine reporting obligations described in (B) above, Tenant shall
promptly notify Landlord of; and shall promptly provide Landlord with true, correct, complete
and legible copies of, all of
the following environmental items relating to the Premises which may be filed or prepared by
or on behalf of, or delivered
to or served upon, Tenant: all orders, reports, listings and correspondence (excluding those
which may be reasonably
considered confidential) of or concerning the release, investigation of, compliance, clean up,
remedial and corrective
actions, and abatement of Hazardous Materials whether or not required by any applicable laws,
including, but not limited
to, reports and notices required by any applicable laws, including, but not limited to,
reports and notices required by or
given pursuant to any applicable laws, and all complaints, pleading and other legal documents
filed against Tenant related
to Tenant’s use, handling, storage or disposal of Hazardous Materials. In the event of a
release of any Hazardous
Materials in, on or about the Premises, Tenant shall promptly notify Landlord and provide
Landlord with copies of all
reports and correspondence with or from all governmental agencies, authorities or any other
persons relating to such
release.



          D) Landlord, at Tenant’s sole cost and expense, shall have the right, but not the obligation,
to join
and participate in any legal proceedings or actions initiated in connection with any claims or
causes of action arising out
of the storage, generation, use or disposal by Tenant, its agents, employees, contractors or
invitees, of Hazardous Materials
in, on, under or about the Premises caused by Tenant’s Environmental Acts which results in (i)
injury to any person, (ii)
injury to or any contamination of the Premises or (iii) injury to or contamination of any real
or personal property wherever
situated Tenant, at its sole cost and expense, shall promptly take all actions necessary to
return the Premises to the
condition existing prior to the introduction of such Hazardous Materials to the Premises and
to remedy or repair any such
injury or contamination. Notwithstanding the foregoing, Tenant shall not, without Landlord’s
prior written consent,
which consent shall not be unreasonably withheld or denied or conditioned or delayed, take any
remedial action in
response to the presence of any Hazardous Materials in, on, under or about the Premises or
enter into any settlement
agreement, consent decree or other compromise with any governmental agency with respect to any
Hazardous Materials
claims; provided, however, Landlord’s prior written consent shall not be necessary in the
event that the presence of
Hazardous Materials in, on, under or about the Premises (i) poses an immediate threat to the
health, safety or welfare of
any individual or (ii) is of such nature that an immediate remedial response is necessary and
it is not possible to obtain
Landlord’s consent before taking such action.



     8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any clean-up,
containment, restoration, removal or other remedial work (“Remedial Work”) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to



11









 




safety or health, prevents the release of any hazardous materials to adjacent property and
otherwise is consistent with the prudent ownership of property of the character of the Premises
and/or Tenant’s Building and if such Remedial Work is required as a direct result of Tenant’s
Environmental Acts, then Tenant at Tenant’s sole cost and expense, including without limitation,
any taxes or penalties assessed in connection with the Remedial Work, shall perform or cause to be
performed such Remedial Work; and if such Remedial Work is required for any reason other than
Tenant’s Environmental Acts, then, Landlord, at Landlord’s sole cost and expense, including without
limitation, any taxes or penalties assessed in connection with the Remedial Work, shall perform or
cause to be performed such Remedial Work. All Remedial Work shall be conducted (i) in a diligent
and timely fashion by licensed contractors acting under the supervision of a consulting
environmental engineer, (ii) pursuant to a detailed written plan for the Remedial Work approved by
any public or private agencies or persons with a legal or contractual right to such approval, (iii)
with such insurance coverage pertaining to liabilities arising out of the Remedial Work as is then
customarily maintained with respect to such activities, and (iv) only following receipt of any
required permits, licenses or approvals. The selection of the Remedial Work contractors, any
disclosures to or agreements with any public or private agencies or parties relating to Remedial
Work and the written plan for the Remedial Work (and any changes thereto) each shall be subject to
the other party’s prior written approval, which approval shall not be unreasonably withheld,
denied, conditioned or delayed In addition, the party doing the Remedial Work shall submit to the
other party, promptly upon receipt or preparation, copies of any and all reports, studies,
analyses, correspondence, governmental comments or approvals, proposed removal or other remedial
work contracts and similar information prepared or received by such party in connection with any
Remedial Work or Hazardous Materials relating to the Premises. In the event the party responsible
therefor should fail to commence or cause to be commenced in a timely fashion, or fail diligently
to prosecute to completion, such Remedial Work, the other party (following written notice) may, but
shall not be required to, cause such Remedial Work to be performed, and all costs and expenses
thereof, or incurred in connection therewith (i) in the case where Tenant is the responsible party,
shall be paid as additional rent due and payable within thirty (30) days of Landlord’s invoice
therefor, or (ii) in the case where Landlord is the responsible party, shall be paid by Landlord to
Tenant within thirty (30) days of Tenant’s invoice therefor, and if not timely paid by Landlord, in
additional to all other rights and remedies, Tenant shall have the right of offset against rent
which may become due. Neither party shall be obligated to perform Remedial Work under this Section
while it is contesting the application of any law, regulation or order, provided the other party is
not exposed to any additional liability, risk or damages. Obligations under this Section are solely
for the benefit of the parties, their successors, and assigns and any subtenants of this Lease, and
not for any other third parties.




     8.04 Maintenance of Premises.



          A) Subject to Tenant’s obligation under Section 8.02(A), Tenant at its sole cost and expense
shall
keep and maintain the Premises in compliance with, and shall not cause or permit the Premises
to be in violation of, any
federal, state or local laws, statutes, ordinances, orders, guidelines, rules or regulations
relating to health and safety, to
industrial hygiene or to environmental conditions on, under or about the Premises, including,
but not limited to, air, soil
and ground water conditions.



          B) Tenant shall be liable and responsible for any Hazardous Materials which Tenant causes to
be
brought onto the Premises.



     8.05 Landlord’s Responsibilities and Tenant’s Indemnity.



          A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used,
generated, released into the environment or disposed of, on, in, under or about the Entire
Premises, the Common Area, or
any other portion of the Premises by Landlord, its agents, employees, tenants, contractors or
invitees, in violation of any
law.



          B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to
the Entire Premises which may
be filed or prepared by or on behalf of, or delivered to or served
upon, Landlord: all orders,
reports, listings and
correspondence (even those which may be considered confidential) of or concerning the release,
investigation of,





12









 







compliance,
clean up, remedial and corrective actions, and abatement of Hazardous Materials
whether or not required by any applicable laws, including, but not limited to, reports and
notices required by any applicable laws, including, but not limited to, reports and notices
required by or given pursuant to any applicable laws, and all complaints, pleading and other
legal documents filed against Landlord related to Landlord’s or Landlord’s other tenant’s use,
handling, storage or disposal of Hazardous Materials. In the event of a release of any Hazardous
Materials in, on or about the Entire Premises, Landlord shall promptly notify Tenant and provide
Tenant with copies of all reports and correspondence with or from all governmental agencies,
authorities or any other persons relating to such release.




          C) Except for the obligations of Tenant as set forth in this Article VIII, Landlord shall
exonerate, indemnify, pay and protect, defend and hold harmless (with counsel reasonably approved
by Tenant) and save Tenant and Tenant’s successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenant’s “Related
Parties”), harmless from and against any claims (including, without limitation, third party claims
for personal injury or real or personal property damage), actions, administrative proceedings
(including informal proceedings), judgments, damages, punitive damages, penalties, fines, costs,
taxes, assessments, liabilities (including sums paid in settlement of claims), interest or losses,
including reasonable attorneys’ fees and expenses (including any such fees and expenses incurred in
enforcing this provision or collecting any sums due hereunder), consultant fees, and expert fees,
together with all other costs and expenses of any kind or nature (collectively, the “Costs”) that
arise directly or indirectly in connection with the presence, suspected presence, release or
suspected release of any Hazardous Materials in or into the air, soil, groundwater, surface water
or improvements at, on, about, under or within the Premises, or any portion thereof, or elsewhere
in connection with the transportation of Hazardous Materials to or from the Premises or the Entire
Premises. In the event Tenant or any of its Related Parties shall suffer or incur any such Costs,
Landlord shall pay to Tenant or such Related Party the total of all such Costs suffered or incurred
by Tenant or such Related party upon demand therefor. Without limiting the generality of the
foregoing, the indemnification provided by this Section 8.05 shall specifically cover Costs,
including capital, operating and maintenance costs, incurred in connection with any investigation
or monitoring of site conditions, any clean-up, containment, remedial, removal or restoration work
required or performed by any federal, state or local governmental agency or political subdivision
or performed by any nongovernmental entity or person because of the presence, suspected presence,
release or suspected release of any Hazardous Materials in or into the air, soil, groundwater,
surface water or improvements, at, on, about, under or within the Premises (or any portion
thereof), or elsewhere in connection with the transportation of. Hazardous Materials to or from the
Premises and any claims of third parties for loss or damage due to such Hazardous Materials.



     8.06 Landlord Inspection, Landlord and Landlord’s agents and employees shall have the right,
but not the
obligation, to inspect, investigate, sample and/or monitor the Premises, including any soil,
water, ground water or other
sampling, and any other testing, digging, drilling or analyses, at any time to determine
whether Tenant is complying with
the terms of this Article VIII, and in connection therewith, Tenant shall provide Landlord
with full access to all relevant
facilities, records and personnel. If Tenant is in default with any of the provisions of this
Article VIII, Landlord and
Landlord’s agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlord’s
other rights and remedies under this Lease, to immediately enter upon the Premises and to
discharge Tenant’s obligations
under this Article VIII at Tenant’s expense, notwithstanding any other provisions of this
Lease. Landlord and Landlord’s
agents and employees shall endeavor to minimize interference with Tenant’s business. All sums
reasonably disbursed,
deposited or incurred by Landlord in connection therewith, including, but not limited to, all
costs, expenses and actual
attorneys’ fees, shall be due and payable by Tenant to Landlord, as an item of additional
rent, on demand by Landlord,
together with interest thereon at the rate of ten percent (10%) per annum.



     8.07 Effect of Termination.



          A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the
best of Tenant’s knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific
nature of such default.



          B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued
as of the
date this Lease terminates, shall survive such termination.




13









 





ARTICLE IX




IMPROVEMENTS




     9.01 Tenant’s Signs.



          (A) Except for signs located on the Premises at the commencement date of this lease or signs
and which are located wholly within the interior of the premises and which are not visible
from the exterior of the
premises, no signs shall be placed, erected, maintained or painted at any place upon the
Premises without the prior
written consent of Landlord, which consent shall not be unreasonably withheld.



          (B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at
Tenant’s sole expense);



               (1) Illuminated signs on the exterior walls of Tenant’s Building and on the theatre
canopy or marquee.



               (2) Signs on the interior or exterior of any windows of Tenant’s Building.



               (3) Easel or placard signs within the lobby entrance or on sidewalks immediately in
front of Tenant’s Building, provided the same do not unreasonably interfere with pedestrian
traffic.



     9.02 Hold Harmless. Except to the extent attributable to the intentional or negligent acts or
omissions of Landlord
or Landlord’s agents, employees, contractors, tenants, or invitees, Tenant shall indemnify,
protect, defend and hold
harmless Landlord and the Premises from and against all claims and liabilities arising by
virtue of or relating to
construction of the Improvements or repairs made at any time to the Premises including
repairs, restoration and rebuilding
and all other activities of Tenant on or with respect to the Premises. If Tenant is required
to defend any action or
proceeding pursuant to this Section to which action or proceeding Landlord is made a party,
Landlord shall also be
entitled to appear, defend, or otherwise take part in the matter involved, at its election, by
counsel of its own choosing, and
to the extent Landlord is indemnified under this Section, Tenant shall bear the cost of
Landlord’s defense, including
attorney’s fees; provided, however. Tenant shall be liable for attorney’s fees only if
single legal counsel (or a single firm of
legal counsel) cannot represent both Landlord and Tenant without there arising an actual or
potential conflict of interests.



     9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents
and approvals required to be obtained from governmental agencies or third parties in
connection with construction of the
Improvements and any subsequent improvements, repairs, replacements or renewals to the
Premises shall be acquired as
required by applicable laws, ordinances or regulations. Landlord agrees to cooperate
reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises
during the Term to be
performed in accordance with all applicable laws and all directions and regulations of all
governmental agencies and the representatives of such agencies having jurisdiction.



     9.04 Ownership.



          A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.



14









 





          B) During the term of this lease, Tenant shall have the right to replace any of the
trade fixtures, theatres seats, projection equipment, furniture, other equipment and personal
property from time to time; provided, however, that such replacement fixtures, equipment or
property are of equal or better quality than the property being
replaced. Further no such
installation or removal thereof shall affect the structural portion of the Premises and that
Tenant shall repair and restore any damage or injury to the Premises or the Property caused
thereby. Any such replacement equipment, furniture or fixtures shall become the property of the
Landlord at the termination of this lease.



     9.05 Control. Notwithstanding anything to the contrary in this Lease, during the Term
of this Lease Tenant shall have exclusive control and possession of the Premises.



ARTICLE X




INDEMNITY




     10.01 Indemnification. Except to the extent attributable to the intentional and gross
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as “Landlord Indemnities”, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), or liability in connection with loss of life, personal injury or damage to property
caused to any person in or about the Premises from whatever cause, in any way connected directly or
indirectly and arising out of or attributable in any way connected with Tenant’s use or possession
of the Premises, including any liability for injury, death, loss or damage to Tenant, or its
agents, contractors, employees, customers, visitors and persons with whom they deal. The provisions
of this paragraph shall survive the termination of this lease.



ARTICLE XI




ASSIGNMENT AND SUBLETTING




     11.01 Assignment and
Subletting.



          A) Tenant may assign the Lease and may sublease a portion or all of the Premises, subject to
Landlord’s approval which shall not be unreasonably withheld, provided Tenant remains liable
for all Tenant obligations
under this Lease, and any sublease shall be subject to all the provisions of this Lease.



          B) Any assignment of this lease or any sublease of a portion or all of the Premises shall be
subject
to the terms and conditions of this Lease.



          C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without landlord’s consent, sublet the Leased Premises
or assign this Lease (a) to any corporation which may, as the result of a reorganization, merger,
consolidation, or sale of assets succeed to the business now carried on by Tenant in the
Metropolitan Area, or (b) to any subsidiary or affiliate corporation of Tenant or of Tenant’s
parent corporation (“Parent Corporation”) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenant’s Parent Corporation, or
(d) to any corporation which acquires 50% or more of the issued and outstanding voting stock (or
such lesser percentage as shall be sufficient to acquire voting control) of Tenant or of Tenant’s
Parent Corporation, or (e) to any corporation which operated motion picture theatres and has a
book net worth of not less than $20,000,000.00 as of the end of the calendar month during which
any such assignment or subletting becomes effective and to any subsidiary or affiliate of such
corporation, provided that such corporation duly and validly then guarantees the performance of
the obligations of such subsidiary or affiliate under this Lease.



15









 





     11.02
Notice to Landlord. Tenant shall give notice to Landlord of any assignment of the Lease
or sublease of the Premises within ten (10) days after such event.



ARTICLE XII




ENCUMBRANCE OF LEASEHOLD ESTATE




     12.01 Leasehold Mortgages.



          A) Tenant may not take back a Purchase Money Leasehold Mortgage of the Leasehold Estate or
otherwise encumber Tenant’s Leasehold Estate or assign this Lease as security for a Mortgage
or Mortgages.



          B) Tenant shall not place or create any mortgage, deed of trust, or other lien or encumbrance
affecting Landlord’s fee interest in the Land or Landlord’s interest in this Lease.



ARTICLE XIII




MORTGAGE SUBORDINATION




     13.01 Existing Mortgages. If there is a mortgage or deed of trust (“Mortgage”) lien affecting
the interest of Landlord in the Premises, then Landlord shall obtain and shall deliver to Tenant
within fifteen (15) days after the Effective Date, a non-disturbance and attornment agreement in a
form reasonably acceptable to such lender, Landlord and Tenant, executed by the Mortgagee (as
defined below), wherein the Mortgagee shall agree to recognize the interest of Tenant and abide by
the terms of this Lease in the event of any judicial foreclosure, private sale or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction.


     13.02 Future Mortgages. The rights of Tenant under this Lease shall be, at the option of Landlord,
either subordinate or superior to any future mortgage on Landlord’s interest in the Premises in
favor of an institutional lender not affiliated with Landlord. Provided however, that as a
condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of trust
and their successors and assigns (the “Mortgagee”) shall agree to recognize the interest of Tenant
and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.




ARTICLE XIV




CONDEMNATION — EMINENT DOMAIN




     14.01 Definitions. The following definitions apply in construing provisions of this Lease
relating to a taking of or damage to all or any part of the Entire Premises or Improvements or
Parking or any interest in them by eminent domain or inverse
condemnation:



          A)
“Taking” means that taking or damaging, including severance damage, by eminent domain or by
inverse condemnation for any public or quasi-public use under any statute. The transfer of title
may be either a transfer resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation,
in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. The
Taking shall be considered to take place as of the date on which the right to compensation and
damages accrues under the law applicable to the Premises, unless the condemnor also takes actual
physical possession of the Premises or a part thereof, in which case the date of Taking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues or the date physical possession is taken by the condemnor.



16









 





          B) “Total Taking” means the Taking of the fee title to all the Premises and the
Improvements on
the Premises, which shall be considered to include any offsite improvements effected by Tenant
to serve the Premises or
the improvements or the parking on the Premises.



          C) “Partial Taking” means any Taking (including any damaging) of a portion of the Premises,
the Common Area, or any Improvements or parking thereon which is not a Total Taking.



          D) “Notice of Intended Taking” means any notice or notification on which a reasonably prudent
man would rely and which he would interpret as expressing an existing intention of Taking as
distinguished from a mere
preliminary inquiry or proposal. It includes, but is not limited to, the service of a
condemnation summons and complaint
on a party to this Lease. The notice is considered to have been received when a party to this
Lease receives from the
condemning agency or entity a Notice of Intended Taking, in writing, containing a description
or map of the Taking
reasonably defining the extent of the Taking.



          E) “Award” means compensation paid for the Taking, whether pursuant to judgment or by
agreement or otherwise.



     14.02 Notice to Other Party. The party hereto receiving any notice of the kinds specified
below shall promptly
give the other party notice of the receipt, contents, and date of the notice received:



          A) Notice of Intended Taking;



          B) Service of any legal process relating to condemnation of the Premises or
improvements;



          C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or



          D) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer
in lieu
of condemnation.



     14.03 Total Taking — Effect on Rent and Term. On a Total Taking, Tenant’s obligation to pay
Rent shall
terminate on, and Tenant’s interest in the leasehold shall continue until, the date of Taking,
at which time this Lease shall
terminate.



     14.04 Distribution of Award for Taking. On a Taking, all sums, including, but not limited to,
damages and
interest awarded for the value of the real estate taken, shall be apportioned and paid by the
governmental body taking the
Premises as follows:



          A) To Landlord, the amount awarded, if any, for the Fair Market Value of all buildings and
other
improvements on the Premises;



          B) To Landlord, the amount awarded, if any, for severance damages



          C) To Landlord, the amount awarded, if any, for the “bonus value” of this leasehold estate
without improvements. The bonus value is the amount by which the fair market rental value on the
open market exceeds the contract rent (the amount called for in this Lease);



          D) To Tenant, the amount awarded, if any, for loss of goodwill and relocation
expenses;



          E) To Tenant, any other award which will not reduce the amount which otherwise
would be awarded to Landlord; and



          F) To Landlord, any balance.




17









 




Tenant shall only be entitled to payments under this Section 14.04 out of amounts awarded
by the governmental body taking the Premises.




     14.05 Partial Taking — Rent Adjustments. On a Partial Taking, the Lease shall remain in full
force and effect
covering the remaining Premises, except that the total Rent as otherwise provided herein shall
be reduced in the same
ratio as the percentage of the area of the Premises taken bears to the total area of the
Premises.



     14.06 Partial Taking — Option to Terminate. Notwithstanding anything herein to the contrary, in
the event of a
Partial Taking, if more than thirty percent (30%) of the Building or fifty (50%) of the
parking is taken by a condemnation
or sold under the threat of condemnation, then Tenant may terminate this Lease as of the date
the condemning authority
takes title or possession, whichever occurs first, by delivering written notice to the other
within ten (10) days after receipt
of written notice of such taking (or in the absence of such notice, within ten (10) days after
the condemning authority takes
possession).



     14.07 Separate Tenant’s Award. In the event of a Taking, Tenant may make a separate claim with
respect to lost
business, lost profits, moving expenses and other related damages against the acquiring
governmental Agency.



ARTICLE XV




DEFAULT




     15.01 Tenant’s Default. The occurrence of any of the following shall constitute a default or
event of default by
Tenant:



          A) Failure to pay Annual Rent or any other monetary amount when due as provided herein, if the
failure continues for ten (10) days after first written notice has been given to Tenant by
Landlord;



          B) Failure to perform any of Tenant’s non-monetary obligations under this Lease, provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure
each such default. If
Tenant cannot reasonably cure such default within said thirty (30) day period, Tenant shall
not be in default of this Lease
if Tenant commences to cure the breach within the thirty (30) day period and diligently and in
good faith continues to cure
the breach.



          C) Tenant shall file a petition in voluntary bankruptcy under the bankruptcy code of the
United States
or any similar Law, State or Federal Law, now or hereafter in effect.



     15.02 Landlord’s Remedies Cumulative. Landlord shall have the following remedies set forth in
subsections (A)
through (G) below if Tenant commits a default, except as provided in Section 15.03. These
remedies are not exclusive
and may be exercised concurrently or successively; they are cumulative in addition to any
remedies now or later allowed
by law or equity:



          A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or other
amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon
Tenant, all without having to enter into possession or terminate this Lease;



          B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises
have been abandoned), and
take possession thereof; without thereby terminating this Lease, and thereupon Landlord may
expel all persons and
remove all property therefrom, without becoming liable to prosecution therefor, and relet the
Premises or a portion or
portions thereof, and receive the rent therefrom; applying the same first to the payment of
the reasonable expenses of such




18









 




re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its election
to declare the Lease Term hereunder ended and to terminate this Lease, and unless this Lease be
expressly terminated, such re-entry or entry by Landlord, whether had or taken under summary
proceedings or otherwise, shall not be deemed to have absolved or discharged Tenant from any of its
obligations and liabilities for the remainder of the Lease Term. Notwithstanding anything to the
contrary or other provisions of this Section 15.02(B), Tenant shall have the right to sublet the
Premises, assign its interest in the Lease, or both, subject to Landlord’s prior right, during any
continuance of Tenant’s default, to relet the Premises or a portion or portions thereof.




          C) Termination of Lease and Lessee’s Right to Possession. No act by Landlord, other than
giving Tenant written notice of termination of this Lease, shall in fact terminate the Lease. Upon
termination of the Lease, neither Landlord nor Tenant shall have any future rights or obligations
under the Lease except that Landlord shall have the right to recover from Tenant the following:



               (1) The worth, at the time of the award, of the unpaid Rent that had been earned at the
time of termination of this Lease;



               (2) The worth, at the time of the award, of the amount by which the unpaid
Rent that
would have been earned after the date of termination of this Lease until the time of award exceeds
the amount of the loss of Rent that Tenant proves could have been reasonably avoided;



               (3) The worth, at the time of the award, of the amount by which the unpaid
Rent for the
balance of the Term after the time of award exceeds the amount of the loss of Rent that Tenant
proves could have been reasonably avoided; and



               (4) Any other amount, and court costs, necessary to compensate Landlord
for all
detriment proximately caused by Tenant’s failure to perform his obligations under the Lease
or which, in the ordinary course of things, would be likely to result therefrom.



               (5) For any other sums due.



          D) Definitions. As used herein, the following phrases shall be interpreted as
follows:



               (1) “The
worth, at the time of the award,” as used in subsections
15.02(C)(1)
and (2)
above, is to be computed by allowing interest at the maximum lawful rate. “The worth, at
the time of the award,” as referred to in subsection 15.02(C)(3) above, is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award, plus one percent (1%).



               (2) As used herein, the term “time of award” shall mean either the date upon
which
Tenant pays to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of
entry of any determination, order, or judgment of any court or other legally constituted body
determining the amount recoverable, whichever first occurs.



          E) Surrender. Promptly after notice of termination, Tenant shall surrender and vacate the
Premises and all improvements in broom-clean condition, and Landlord may re-enter and take
possession of the Premises
and all remaining improvements and eject all: parties in possession or eject some and not
others, or eject none.
Termination under subsection 15.02(C) shall not relieve Tenant from the payment of any sum due
to Landlord or from
any claim for damages previously accrued or then accruing against
Tenant.



19









 





          F) Appointment of Receiver. If Tenant defaults under Section 15.02 Landlord shall have the
right to have a receiver appointed to collect rent from any subtenants. Neither the filing of
a petition for the appointment
of a receiver nor the appointment itself shall constitute an election by Landlord to terminate
this Lease.



          G) Landlord’s Right to Cure Tenant’s Default Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenant’s expense. If Landlord, at any
time, by reason of Tenant’s
default, pays any sum or does any act that requires the payment of any sum, the sum paid by
Landlord shall be
immediately reimbursed from Tenant to Landlord, together with interest at eighteen percent
(18%) per annum computed
from the date of such expenditure until the date of reimbursement by
Tenant.



     15.03
Landlord’s Default.



          A) The occurrence of the following shall constitute a default by Landlord: Breach of any
provision of this Lease if the breach is not cured within thirty (30) days after written
notice by Tenant; provided, however,
that if the breach cannot reasonably be cured within such thirty (30) day period, Landlord
shall not be in default of this
Lease if Landlord commences to cure the breach within the thirty (30) day period and
diligently and in good faith
continues to cure the default.



          B) Tenant, at any time after Landlord is in default under paragraph (A) above, may cure the
default at Landlord’s expense. If Tenant at any time, by reason of Landlord’s default, pays
any sum or does any act that
requires the payment of any sum, the sum paid by Tenant shall be immediately reimbursed by
Landlord, together with
interest at eighteen percent (18%) per annum determined at the time the expenditure is made by
Tenant computed from
the date of such expenditure until the date of reimbursement by Landlord. If Landlord fails
to make such payment(s)
within fifteen (15) days after Tenant’s written demand, Tenant shall be entitled to offset any
amount due from Landlord
against the next Rent payment due under this Lease.



     15.4 Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption
granted by or
under any present or future laws in the event of Tenant being dispossessed or removed from the
Premises upon the
termination of this Lease because of default by Tenant hereunder.



     15.5 Dispute Resolution. Landlord and Tenant desire by provisions of this Section 15.05 to
establish procedures
to facilitate the informal and inexpensive resolution of any dispute arising out of this Lease
by mutual cooperation and
without resort to litigation. To accomplish this objective, Landlord and Tenant agree to
follow the procedures set forth
below if and when a dispute arises between them under this Lease.



          A) Description of Dispute. The complaining party shall provide by notice a written description
of the alleged breach by the other party. This description shall explain the nature of the
complaint and the Lease
provision(s) on which it is based. The complaining party shall also set forth a proposed
solution to the problem including
a specific time frame within which the parties must act. The parry receiving the letter of
complaint must respond in
writing within ten (10) days with an explanation, including references to the relevant parts
of the Lease and a response to
the proposed solution. Within ten (10) days of receipt of this response, the parties must
meet and discuss options for
resolving the dispute. The complaining party must initiate the scheduling of the resolution
meeting.



          B) Mediation. A settlement conference shall be held within thirty (30) days of the
unsuccessful
resolution meeting or as soon as practical thereafter. The settlement conference shall be
held in the County of San
Francisco, California.



          C) Arbitration. With respect to disputes which the parties have been unable to resolve
informally
or by mediation, the parties agree to submit the dispute for final and binding arbitration if
the dispute has not otherwise
been settled. The parties agree that the arbitration must be initiated within one (1) year
after the date of the written
description of the alleged breach and that the failure to initiate arbitration within the one
(1) year period constitutes an




20









 





absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated
for the purposes of this section by demand therefor being sent by certified mail to the other
party which notice shall contain a description of the dispute, the amount involved and the
remedies sought. The parties shall have the right to representation by counsel throughout the
arbitration proceedings. All rulings, decisions, and awards of the arbitrators shall be in
conformance with California law. The award may be judicially enforced pursuant to §1285 et seq of
the California Code of Civil Procedure. Each party shall bear their own costs of legal counsel and
the fees for witnesses, unless otherwise determined by the arbitrator as part of the award. The
parties may establish the scope of discovery by agreement. If the parties cannot agree, the
arbitrator will have discretion to define the limits of discovery and to allow discovery upon a
showing of good cause, utilizing the following guidelines:



               (1) The arbitrator shall balance the benefits of discovery against the burdens and
expenses to the parties and the goals of arbitration as an alternative to traditional
litigation.



               (2) The arbitrator shall have discretion to order pre-hearing exchange of
information,
including but not limited to, the production of requested documents and exchanges of summaries of
testimony of proposed witnesses.



               (3) The deposition of the claimant(s) and respondent(s) and form sets of
interrogatories
approved by the Judicial Council shall be allowed as a matter of
right. There shall be an early and
prompt designation and exchange of the names and addresses of expert witnesses who may be called
upon to testify at the arbitration hearing. Their depositions, special interrogatories, requests
for admission and all other discovery shall be allowed only upon a showing of good cause.


     15.06 Attorneys’Fees. Should any action or proceeding, be commenced between the parties to this
Lease concerning said Premises, this Lease, or the rights and duties of either in relation
thereto, the party, Landlord, or Tenant, prevailing in such action or proceeding shall be
entitled, in addition to such other relief as may be granted in the action or proceeding, to a
reasonable sum as and for its attorneys’ fees therein which shall be determined by the
arbitrator(s) hearing such action or proceeding.




ARTICLE XVI




REPRESENTATIONS AND WARRANTIES




     16.01 Landlord’s Representations
and Warranties. Landlord represents and warrants:



          A) Landlord is the fee owner of the Premises.



          B) The persons executing this Lease in behalf of Landlord are authorized to execute the same
on
behalf of Landlord and Landlord’s obligations under this Lease are legally binding, do not
require the consent of any other
parties and do not violate the provisions of any agreement to which
Landlord is a party.



          C) To the best of Landlord’s knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.



          D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.



21









 





          E) Landlord is not now insolvent either in the sense that it cannot pay its current bills
as they
come due or that its liabilities exceed its assets.



          F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects
or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord prior
to the Effective Date.



          G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or
permit or suffer to be created any liens or encumbrances on the Premises which are (i) not
specifically stated in writing to
be junior to this Lease, or any New Lease (as defined herein), or (ii) which are inconsistent
with the obligations of
Landlord hereunder, and Landlord shall, at or prior to the commencement of the Term, cause the
Premises to be free of all
liens and encumbrances. Title to the Premises shall be free of all Objected Exceptions.



     16.02 Tenant’s Representations and Warranties. Tenant represents and warrants:



          A) Tenant is a California corporation in good standing.



          B) The persons executing this Lease in behalf of Tenant are authorized to execute the same on
behalf of Tenant and Tenant’s obligations under this Lease are legally binding, do not require
the consent of any other
parties and do not violate the provisions of any agreement to which Tenant is a party.



          C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come
due or that its liabilities exceed its assets.



ARTICLE XVII




DAMAGE OR DESTRUCTION




     17.01 Repairs. Alterations and Further Improvements.



          A) Tenant’s Obligation to Repair. If the Premises are damaged by any peril after the
Commencement date of the Lease, Tenant shall restore the Leased Premises unless the Lease is
terminated pursuant to Section 17.01 B. If this Lease is not so terminated, then upon receipt of
the insurance proceeds by Landlord (if insurance proceeds are available) and the issuance of all
necessary governmental permits, Tenant shall promptly commence and diligently prosecute to
completion the restoration of the Leased Premises to the extent then allowed by Law, to
substantially the same condition in which the Leased Premises were immediately prior to such
damage..



          (B) Damage in Excess of Fifty Percent (50%). If the cost of repairing or reconstructing said
damage or destruction to its former condition and form is in excess of Fifty percent (50%) and if
such reconstruction or rebuilding cannot be made under then existing laws, ordinances, statutes or
regulations of any governmental authority applicable thereto the Term shall end as of the date of
such damage or destruction. If, however, such reconstruction or rebuilding can be made under such
existing laws, ordinances, statutes and regulations (or can be so made with minor and non-material
changes to the former condition and form of the property damaged or destroyed), Tenant shall
effect such repair or restoration.



     17.02 Prompt Repair. If Tenant, pursuant to the terms hereof, is obligated to repair, replace,
reconstruct or rebuild
any structures, improvements or other property as hereinabove provided, the same shall be
effected at Tenant’s cost and
expense (which may be paid from insurance proceeds available as above provided) and Tenant
shall diligently commence
and continuously carry out such repair, replacement, reconstruction or rebuilding, to full
completion as soon as possible,
except to the extent of delays due to strikes, lockouts, shortages of labor or materials after
due diligence in obtaining the
same, governmental restrictions, fire, casualty, riot, act of God, act of the public enemy, or
other causes beyond the



22









 




reasonable control of Tenant after the exercise of due diligence, including diligence in
contracting, and the exercise of rights under contracts, with contractors and suppliers.




     17.03 Rent Adjustment. This Lease and the Term shall not terminate or be terminated because
of damage to or destruction of any structure or improvement on or in the Premises except under and
in accordance with the provisions hereinabove contained. If such damage or destruction occurs and
renders all or a portion of the Improvements on the Premises untenantable, Rent shall not be
abated. Tenant shall not be entitled to any compensation or damages from Landlord for loss of
Tenant’s property or any inconvenience or annoyance caused by such restoration.



ARTICLE XVIII




MISCELLANEOUS




     18.01 Limitation on Liability. The lability of Landlord hereunder or in connection with
the Premises or Entire
Premises shall be limited to its interest in the Premises and/or Entire Premises, as the case
may be, and in no event shall
any other assets of Landlord be subject to any claim arising out of or in connection with the
Lease, Premises, or Entire
Premises.



     18.02 Modification. No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless
the same is in writing and signed by the party against which the enforcement of such
modification, waiver, amendment,
discharge, or change is or may be sought.



     18.03 Severability. In the event any term, covenant, condition, provision, or agreement
contained herein is held to
be invalid void, or otherwise unenforceable, by any court of competent jurisdiction, such
holding shall in no way affect the
validity or enforceability of any other term, covenant, condition, provision, or agreement
contained herein.



     18.04 Governing Law. This Lease and the obligations of the parties hereunder shall be
interpreted, construed and
enforced in accordance with the laws of the State of California and each provision of this
Lease shall be valid and
enforceable to the fullest extent permitted by Law.



     18.05 Terminology. All personal pronouns used in this Lease, whether used in the masculine,
feminine, or neuter
gender, shall include all other genders; the singular shall include the plural and vice versa
“Business Day” means other
than a Saturday, Sunday, or holiday. In the event that the time for performance of an act
under this Lease falls on a
Saturday, Sunday, or holiday, the date for performance of such act shall be extended to the
next Business Day.



     18.06 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to
be an original agreement, and all of which shall constitute one agreement by each of the
parties hereto.



     18.07 Binding Effect. Except as otherwise herein provided, this Lease shall be binding upon
and inure to the
benefit of the parties hereto and their respective successors and assigns.



     18.08 Captions. Article and section titles or captions contained herein are inserted as a
matter of convenience and
for reference, and in no way define, limit, extend or describe the scope of this Lease or any
provisions hereof. All
reference to section numbers herein shall mean the sections of this Lease.



     18.09
Notices to Landlord and Tenant.



          A) Except as otherwise in this Lease provided a bill, demand statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 18.12 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the
identity and address of Tenant’s




23









 




Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder
by certified or private express mail carrier.




          B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully
prepaid), addressed to Landlord to the addresses set forth in Section 18.12 below or at such
other address(es) as Landlord
shall designate by notice given as herein provided. If Tenant is notified of the identity and
address of Landlord’s
mortgagee or beneficiary under a deed of trust, or ground or underlying lessor, Tenant shall
give such party notice of any
default by Landlord hereunder by certified or private express mail carrier.



          C) The time of the rendition of such bills or statements and of the giving of such consents,
notices, demands, requests or communications (collectively “notice”) by Tenant or Landlord
shall be deemed to be the
earlier of (i) the date received by Tenant with respect to a notice to Tenant, and the date
received by Landlord with respect
to a notice to Landlord (ii) if the notice is sent by certified mail, five (5) days after the
same is mailed, or (iii) if the notice
is sent by private overnight courier (e.g., Federal Express or similar courier), one (1) day
after the same is delivered to or
picked up by such courier. Rejection or refusal to accept a notice, request, demand, or the
inability to deliver same because
of a changed address of which no notice was given shall be deemed to be a receipt of the
notice, request or demand sent.
Notwithstanding any provision to the contrary contained in this Lease, no provision in this
Lease shall preclude service of
notices in accordance with Section 1162 of the California Code of Civil Procedure or any
similar and/or successor code
sections.



     18.10
Addresses for Notices to Landlord and Tenant.



     Notices to are to be delivered, mailed or couriered to the following address
(es):



	 	 	 	 	 
	 

	 	To Landlord:
	 	Syufy Enterprises
	 

	 	 	 	150 Golden Gate Ave. 
	 

	 	 	 	San Francisco, CA 94102 
	 

	 	 	 	Attn: Real Estate Department
	 
	 	 	 	 
	 

	 	To Tenant:
	 	Century Theatres of California, Inc.
	 

	 	 	 	150 Golden Gate Avenue
	 

	 	 	 	San Francisco, CA 94102
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	





Tenant and Landlord may change their respective addresses for purposes of this section by
giving written notice of such change to the other.




     18.11
Entire Agreement. This Lease and the exhibits attached set forth the entire agreement
between the parties.
Except as specifically set forth herein, there are no agreements, representations, or
warranties whatsoever as to any matter.
Any prior agreements, conversations, or writings are merged herein, superseded hereby, and
extinguished.



     18.12 Sate or Transfer of Premises. Landlord shall promptly notify Tenant in writing of any
sale or transfer of the
Premises or any assignment of Landlord’s interest in this Lease, giving the name and
address of the assignee or new
owner, as the case may be, and instructions regarding the payment of rent or any other amount
required to be paid by
Tenant hereunder. In the event of any transfer or assignment of Landlord’s interest in this
Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or
involuntary, or by act of Landlord or by
operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord
hereunder, thereafter accruing, until Tenant shall have been notified in writing of such
transfer, assignment, or change in
tide, and given satisfactory proof thereof, and the withholding of rent or other charges
payable by Tenant to Landlord
hereunder, in the meantime shall not be deemed a default upon the
part of Tenant. Landlord may
assign this Lease and
convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord




24









 




shall have no further obligations under this Lease, except for liabilities which shall
have accrued prior to the date of such assignment and transfer and that the assignee assumes in
writing Landlord’s obligations hereunder accruing on and after the effective date of the
assignment.




     18.13 Force Maieure. In the event that Tenant shall be delayed or hindered in or prevented
form the performance
of any act other than Tenant’s obligation to make payments of rent, and other charges required
hereunder, by reason of
strikes, lockouts, unavailability of materials, failure of power, restrictive governmental
laws or regulations, riots,
insurrections, the default of Landlord, war, or other reason beyond its control, then
performance of such act shall be
excused for the period of the delay, and the period for the performance of such act shall be
extended for a period
equivalent to the period of such delay. Notwithstanding the foregoing, lack of funds shall not
be deemed to be a cause
beyond the control of Tenant.



     18.14 Waiver. No term, covenant, or condition of this Lease can be waived except in
writing, signed by the party
making the waiver, Landlord or Tenant, as the case may be. No waiver of any default hereunder
shall be implied from
any omission by either party to take any action on account of such default if such default
persists or is repeated, and no
express waiver shall affect any default other than the default specified in the express
waiver, and that only for the time and
to the extent therein stated. The acceptance by Landlord of Rent or partial Rent with
knowledge of the breach of any of
the covenants of this Lease by Tenant shall not be deemed a waiver of any such breach. One or
more waivers of any
breach of any covenant term, or condition of this Lease shall not be construed as a waiver of
any subsequent breach of the
same covenant, term, or condition. The consent or approval by either party shall not be
deemed to waive or render
unnecessary that party’s consent to or approval of any
subsequent similar act.



     18.15 Estoppel Certificate. Either party hereto shall, within twenty (20) days notice from the
other party (referred
to as the “Requesting Party”), execute and deliver to the Requesting Party, in recordable
form, a certificate stating that this
Lease is unmodified and in full force and effect, or in full force and effect as modified, and
stating the modifications. The
certificate also shall state the amount of current monthly rent, the dates to which the rent
has been paid in advance, the
amount of prepaid rent, and any other information with respect to this Lease reasonably
requested by the Requesting
Party. Failure to deliver the certificate within the twenty (20) days shall be conclusive upon
the party failing to deliver the
certificate for the benefit of the party requesting the certificate and any successor to the
party requesting the certificate, that
this Lease is in full force and effect, and has not been modified except as may be represented
by the party requesting the
certificate, and that rent and other charges have not been paid for any period after date of
the notice requesting the
certificate.



     18.16 Number and Gender. Whenever the context requires the singular number, it shall include
the plural, the
plural the singular, and the use of any gender shall include all genders.



     18.17 No Holding Over. Tenant shall have no right to holdover after the end of the Term.
Should Tenant or any
Leasehold Mortgagee succeeding to the interest of Tenant hold over in possession after the
expiration date, such holding
over shall not be deemed to extend the Lease or renew this Lease; and Tenant shall pay a
pro-rated daily amount equal to
one hundred twenty percent (120%) of the Annual Rent in effect immediately preceding the
expiration date until Tenant
vacates the Premises.



     18.18 Mechanics Liens. Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed
against the Premises or the Entire Premises in connection with Tenant’s work and/or any
alterations or other work done by
or on behalf of Tenant in the Premises within thirty (30) days after Tenant receives notice of
the filing of such lien, and
Landlord shall cooperate with Tenant at no expense to Landlord, in order to accomplish such
discharge. Should Tenant
fail to so discharge any such mechanics lien, Landlord shall have the right to remove such
mechanics liens and charge all
costs thereof, including without limitation, reasonable attorneys’ fees, to Tenant as
additional rent plus interest at 18%.



     18.19 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of
principal and agent, partnership, joint venture or any other relationship between the parties
hereto other than the
relationship of Landlord and Tenant. Nothing contained herein shall in any way impose any
liability upon the



25









 




stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees
of Tenant should such parties be corporate entities.




     18.20 Time of the Essence. Time is of the essence with respect to Tenant’s payment of rent
and other monetary
obligations to Landlord under this Lease.



     18.21 Facsimile Copies. Tenant and Landlord (i) have each agreed to permit the use, from
time to time and
where appropriate, of telecopied signatures in order to expedite the transaction contemplated
by this Lease, (ii) each intend
to be bound by its respective telecopied signature, (iii) are each aware that the other will
rely on the telecopied signature,
and (iv) each acknowledge such reliance and waiver any defenses to the enforcement of the
documents effecting the
transaction contemplated by this Lease based on a telecopied signature.



     18.22 Anti-Merger. The voluntary or otherwise surrender of this Lease by Tenant, or a mutual
cancellation of this
Lease shall not work a merger but shall at the option of Landlord either:



          A) Terminate any existing subleases or subtenancies; or



          B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.



     Executed as of the date first written above.



	 	 	 
	TENANT:
	 	 
	 
	 	 
	 

	 	CENTURY THEATRES OF CALIFORNIA, INC.,
	 

	 	a California Corporation
	 
	 	 
	 

	 	By: /s/ Joseph Syufy
	 

	 	Print Name: Joseph Syufy
	 

	 	Title: V.P.






	 	 	 
	
	 	 
	 
	 	 
	LANDLORD:
	 	 
	 
	 	 
	 

	 	SYUFY ENTERPRISES
	 

	 	a California Limited Partnership
	 
	 	 
	 

	 	By: /s/ Raymond W. Syufy
	 

	 	Print Name: Raymond W. Syufy
	 

	 	Title: G.P.







26