exv10w35xay



 




EXHIBIT 10.35(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 - PARKLANE, RENO, NEVADA



Table of Contents




	 	 	 	 	 
	 	 	Page No.	 
	RECITALS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I EXHIBITS - DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.01 Attachments to Lease and Exhibits
	 	 	1	 
	1.02 Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II PREMISES - TERM - OPTIONS - COVENANT OF TITLE
	 	 	2	 
	 
	 	 	 	 
	2.01 Lease of Premises
	 	 	2	 
	2.02 Term of Lease
	 	 	3	 
	2.03 Option to Extend Lease Term
	 	 	3	 
	2.04
Covenant of Title; Authority and Quiet Possession; Transfer of Title
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III USE OF PREMISES
	 	 	4	 
	 
	 	 	 	 
	3.01 Use
	 	 	4	 
	 
	 	 	 	 
	ARTICLE IV RENT
	 	 	5	 
	 
	 	 	 	 
	4.01 Annual Fixed Rent
	 	 	5	 
	4.02
Percentage Rent
	 	 	5	 
	4.03 Rent Payments
	 	 	6	 
	4.04 Place for Payment of Rent
	 	 	6	 
	4.05 Late Payment of Rent
	 	 	6	 
	 
	 	 	 	 
	ARTICLE V TAXES, ASSESSMENTS AND UTILITIES
	 	 	6	 
	 
	 	 	 	 
	5.01 Impositions
	 	 	6	 
	5.02 Exceptions from Impositions; Charges in Lieu of Impositions
	 	 	7	 
	5.03 Contest of Taxes
	 	 	7	 
	5.04 Utilities
	 	 	7	 
	5.05 Personal Property Taxes
	 	 	7	 






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	 	 	Page No.	 
	ARTICLE VI INSURANCE
	 	 	7	 
	 
	 	 	 	 
	6.01 Acquisition of Insurance Policies
	 	 	8	 
	6.02 Types of Required Insurance
	 	 	8	 
	6.03 Terms of Insurance
	 	 	8	 
	6.04 Landlord’s Acquisition of Insurance
	 	 	9	 
	6.05 Insurance Money and Other Funds Held in Trust
	 	 	9	 
	6.06 Application or Proceeds of Physical Damage Insurance
	 	 	9	 
	6.07 Cooperation for Insurance Proceeds
	 	 	9	 
	6.08 Waiver of Right of Recovery
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VII MAINTENANCE, REPAIRS AND ALTERATIONS
	 	 	10	 
	 
	 	 	 	 
	7.01 Alterations - Changes
	 	 	10	 
	7.02 Repairs - Maintenance
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VIII ENVIRONMENTAL MATTERS
	 	 	11	 
	 
	 	 	 	 
	8.01 Definition
	 	 	11	 
	8.02 Tenant’s Responsibilities and Landlord Indemnity
	 	 	11	 
	8.03 Remedial Work
	 	 	13	 
	8.04 Maintenance of Premises
	 	 	13	 
	8.05 Landlord’s Responsibilities
	 	 	14	 
	8.06 Landlord Inspection
	 	 	14	 
	8.07 Effect of Termination
	 	 	14	 
	 
	 	 	 	 
	ARTICLE IX IMPROVEMENTS
	 	 	14	 
	 
	 	 	 	 
	9.01 Tenant Improvements
	 	 	14	 
	9.02 Hold Harmless
	 	 	14	 
	9.03 Permits; Compliance With Codes
	 	 	15	 
	9.04 Ownership of Improvements
	 	 	15	 






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LEASE - PARKLANE, RENO, NEVADA




Table of Contents




	 	 	 	 	 
	 	 	Page No.	 
	9.05 Control
	 	 	15	 
	 
	 	 	 	 
	ARTICLE X INDEMNITY
	 	 	15	 
	 
	 	 	 	 
	10.01
Landlord’s Indemnity
	 	 	15	 
	10.02 Tenant’s Indemnity
	 	 	16	 
	 
	 	 	 	 
	ARTICLE XI ASSIGNMENT AND SUBLETTING
	 	 	16	 
	 
	 	 	 	 
	11.01 Assignment and Subletting
	 	 	16	 
	11.02 Notice to Landlord
	 	 	16	 
	 
	 	 	 	 
	ARTICLE XII MORTGAGE SUBORDINATION
	 	 	17	 
	 
	 	 	 	 
	12.01 Existing Mortgages
	 	 	17	 
	12.02 Future Mortgages
	 	 	17	 
	 
	 	 	 	 
	ARTICLE XIII CONDEMNATION  - EMINENTDOMAIN
	 	 	17	 
	 
	 	 	 	 
	13.01 Definitions
	 	 	17	 
	13.02 Notice to Other Party
	 	 	18	 
	13.03 Total Taking - Effect on Rent and Term
	 	 	18	 
	13.04 Distribution of Award for Taking
	 	 	18	 
	13.05 Partial Taking - Rent Adjustments
	 	 	18	 
	13.06 Partial Taking - Option to Terminate
	 	 	18	 
	13.07 Separate Tenant’s Award
	 	 	19	 
	 
	 	 	 	 
	ARTICLE XIV DEFAULT
	 	 	19	 
	 
	 	 	 	 
	14.01 Tenant’s Default
	 	 	19	 
	14.02 Landlord’s Remedies Cumulative
	 	 	19	 
	14.03 Landlord’s Default
	 	 	21	 
	14.04 Waiver of Redemption
	 	 	21	 
	14.05 Dispute Resolution
	 	 	21	 






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	 	 	Page No.	 
	14.06 Attorneys’ Fees
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XV REPRESENTATIONS AND WARRANTIES
	 	 	22	 
	 
	 	 	 	 
	15.01 Landlord’s Representations and Warranties
	 	 	22	 
	15.02 Tenant’s Representations and Warranties
	 	 	22	 
	 
	 	 	 	 
	ARTICLE XVI DAMAGE OR DESTRUCTION
	 	 	22	 
	 
	 	 	 	 
	16.01 Repairs, Alterations and Further lmprovements
	 	 	23	 
	16.02 Prompt Repair
	 	 	23	 
	16.03
Rent Adjustment
	 	 	23	 
	16.04 Damage During Last Two (2) Years of Term
	 	 	23	 
	 
	 	 	 	 
	ARTICLE XVII MISCELLANEOUS
	 	 	24	 
	 
	 	 	 	 
	17.01 Limitation on Liability
	 	 	24	 
	17.02 Brokers
	 	 	24	 
	17.03 Modification
	 	 	24	 
	17.04 Severability
	 	 	24	 
	17.05 Governing Law
	 	 	24	 
	17.06 Terminology
	 	 	24	 
	17.07 Counterparts
	 	 	24	 
	17.08 Binding Effect
	 	 	24	 
	17.09 Captions
	 	 	24	 
	17.10 Notices to Landlord and Tenant
	 	 	24	 
	17.11 Addresses for Notices to Landlord and Tenant
	 	 	25	 
	17.12 Entire Agreement
	 	 	25	 
	17.13 Sale or Transfer of Premises
	 	 	25	 
	17.14 Force Majeure
	 	 	26	 
	17.15 Waiver
	 	 	26	 
	17.16 Estoppel Certificate
	 	 	26	 






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	 	 	Page No.	 
	17.17 Number and Gender
	 	 	26	 
	17.18 No Holding Over
	 	 	26	 
	17.19 Mechanics Liens
	 	 	27	 
	17.20 Relationship of Parties
	 	 	27	 
	17.21 Time of the Essence
	 	 	27	 
	17.22 Facsimile Copies
	 	 	27	 
	17.23 Anti-Merger
	 	 	27	 
	 
	 	 	 	 
	SIGNATURE PAGE
	 	 	28	 






	 	 	 
	Exhibit A

	 	A Site Plan of the Parklane Mall retail center including the
Leased Premises which is outlined in Red.
	Exhibit B

	 	Form of Memorandum of Lease






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LEASE




     THIS INDENTURE OF LEASE, dated as of August 1, 1997, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, CA,
hereinafter called “Landlord”, and CENTURY THEATRES, INC., a Delaware corporation with an office at
150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called “Tenant”.



RECITALS




     Landlord will be acquiring a fee interest in Real Property located within the Parklane Mall
retail center on South Virginia Street, Reno, Nevada from Sierra Pacific Properties, Inc., a
California Corporation, hereinafter called “Sierra”, under an Exchange Agreement between Landlord
and Sierra dated April 12, 1996. The Real Property shall consist of a building pad of 72,283
square feet and a 57,784 square foot, 16-screen movie theatre building. In addition the Real
Property shall be subject to a Construction, Operation and Reciprocal Easement Agreement,
hereinafter called “COREA”, by and between The MaceRich Partnership, L.P. a Delaware limited
Partnership and Sierra dated August 28, 1997, a copy of which is attached hereto, marked Exhibit
C.



     This Lease is subject to and contingent upon Landlord acquiring the fee interest in the Real
Property located within the Parklane Mall. If Landlord does not acquire title to the Real Property
this Lease shall be terminated without any liability on the part of Landlord or Tenant.



     Subject to the above recitals and understanding, Landlord and Tenant wish to provide for the
lease by Landlord to Tenant of the Premises (as defined below).



     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 Site Plan of the Parklane Mall retail center including the Leased Premises which
is outlined in red.




                         EXHIBIT B — Form of Memorandum of Lease




                         EXHIBIT C — Construction, Operation and Reciprocal Easement Agreement dated April 12, 1996.



     1.02 Definitions.




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




                         The term “Commencement Date” and “Rent Commencement Date” shall mean the date Landlord
acquires title to the property




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                         The term “COREA” shall mean the Construction, Operation and Reciprocal Easement
Agreement dated August 28, 1997.



                         The term “Effective Date” shall mean the date Landlord acquires title to the
property.



                         The term “Default Rate” shall mean the Ten percent (10%).



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



                         The term “Leased Premises” or “Premises” or “Real Property” shall mean the 16 screen movie
theatre building and the land thereunder as set forth in Exhibit A and the rights, easements and
privileges granted to Landlord under the COREA.



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



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



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



                         The term “Percentage Rate” shall mean ***



                         The term “Planned Use” shall mean the operation of a 57,784 square foot multiplex motion
picture theatre, and for such activities in connection therewith as are customary and usual at
other motion picture theatres operated by Tenant.



                         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 “Tenant’s Building” shall mean the theatre building.



                         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.



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



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          C) Landlord shall deliver possession of the Premises to Tenant upon acquisition of title
to the Real Property.



          D) Additional obligations of Landlord and Tenant:



               (I) Landlord Obligations:



                         Under the Exchange Agreement with Sierra, Sierra will acquire land and construct a 16 screen
theatre building in accordance with plans and specifications approved by Landlord and Tenant.
Sierra will provide the maximum sum of $12,500,000 toward all costs
related to the land acquisition
and construction of the theatre building which sum shall represent the total obligation of
Landlord.



               (II) Tenant Obligations:



                         Tenant shall pay any difference between the total land, building and improvement costs less
the $12,500,000. In addition Tenant shall pay for all furniture, fixtures and equipment required to
complete and operate the theatre.



     2.02 Term of Lease.



                    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.



                    The “Initial Term” of this Lease shall begin on the Commencement Date and shall
terminate ***      thereafter and shall terminate on the last day of the calendar month during
which
the date which is ***      after the
Commencement Date occurs. 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 ***             and             *** additional period of ***             (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.



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                              (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 (meaning the breach of any obligation hereunder and failure to
cure that breach within the time permitted in Section 14.01) 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 Landlord has full right and
lawful authority to enter into and perform Landlord’s obligations under this Lease for the
term hereof.



                    (B) At all times during the Term, Tenant shall keep and maintain Tenant’s Building in
good order and repair and in a clean and safe condition, reasonably free of debris. Tenant’s
obligation
hereunder shall include the obligations set forth in the COREA, Tenant shall indemnify and
save harmless
Landlord from and against all actions, claims and damages by reason of Tenant’s failure to
comply with and
perform its obligations under this section. In case of conflict between this Lease and the
COREA, the terms
and provisions of the COREA shall prevail.



                    (C) Tenant will not permit the Premises to become subject to any mechanics’,
laborers’ or materialmen’s lien on account of labor or material furnished to Tenant or
claimed to have been
furnished to Tenant in connection with work of any character performed or claimed to have
been performed on
the Premises by or at the direction or sufferance of Tenant; provided, however, Tenant shall
have the right to
contest in good faith and with reasonable diligence the validity of any such lien or claimed
lien and on final
determination of the lien or claim for the lien, Tenant will immediately pay any judgment
rendered with all
proper costs and charges, and will, at its own expense, have the lien released and any
judgment satisfied.



                    (D) Conditions Precedent: Tenant’s obligation to lease the Premises is conditioned
upon Landlord acquiring the property under the terms of the Exchange Agreement with Sierra.



ARTICLE III

USE OF PREMISES




     3.01 Use.



             A) The Premises may be used in accordance with and subject to the conditions set forth in the
COREA.



             B) Landlord shall agree and consent to such utility and other easements encumbering the
Premises or benefiting the Premises as Tenant may reasonably require for its use and occupancy of
the Premises.



             C) Tenant shall be subject to all of the benefits and responsible for all costs, as well as
all obligations, associated with the COREA.



             D) If Tenant ceases operating the Theatre for a period in excess of sixty (60) days and the
owner of the Shopping Center elects to purchase the Leased Premises in accordance with the
applicable provisions of the COREA, Tenant shall promptly vacate the Premises; however, Tenant
shall remain liable to Landlord for all rent due for the balance remaining of either the Original
Term or Renewal Term of this Lease.



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ARTICLE IV

RENT




     4.01 Annual Fixed Rent.



              A) Beginning on the Rent Commencement Date, Tenant shall pay to Landlord during
the Lease Term Annual Fixed Rent in the amount of ***     The Annual Fixed Rent shall be payable in advance in twelve (12) equal
monthly installments. The Annual Fixed Rent shall be subject to adjustment every ***      after the
Initial
Rent Due Date as set forth in Section 4.01 (B) below.



              B) The Annual Fixed Rent shall apply from the Rent Commencement Date through the
end of the ***      Lease Year of the Term. The Annual Fixed Rent shall be increased on the first
day of the
***      Lease Year and on the first day of each *** Lease Year thereafter during the Term by an
amount of ***      greater than the Annual Fixed Rent
payable immediately before the Adjustment date in question.



     4.02  Percentage Rent.



              In addition to the payment of Annual Fixed 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 ***             percent
of the Gross Sales for such Lease Year exceeds the Annual Fixed Rent which is payable for such
Lease Year. For the purpose of computing the Annual Percentage for the first Lease Year, the Gross
sales and the annual fixed rate percentage for the partial calendar month, if any, preceding the
first Lease Year shall be includable in the Annual Fixed Rate and Gross Sales for the first Lease
Year.



              Gross Sales shall mean all box office receipts, and receipts from 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 actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or “Pass Admissions” including EBF charges on “Pass Admissions”. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental
of vending machines, pay telephones or other amusement machines shall be deducted from Gross
Sales.



              Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
officer 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 eighteen (18%) percent 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.



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     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 such payment is past due, Tenant shall pay Landlord interest on such
unpaid rent at the rate of ten (10%) 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
when due 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.



              B) 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.



              C) Tenant shall be responsible for such impositions as are set forth in the COREA.



     5.02
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



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6









 




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.




     5.03 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 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or 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 5.03.



     5.04 Utilities. Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Premises. Any
utility improvements presently serving the Premises shall be maintained, repaired and replaced by
Tenant, at Tenant’s expense. Tenant shall be responsible for all costs for utilities as are set
forth in the COREA.



     5.05
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. In addition 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 the COREA.



     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,
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) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenant’s
Building (excluding foundations, footings and underground improvements) as well as any and 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) including Builder’s Risk and
earthquake to the extent of not less than 100% of the full replacement cost thereof less any
deductible



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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. Upon written request,
Tenant shall name Landlord and any parties requested by Landlord and the holder of the first
mortgage on Tenant’s Building pursuant to a standard mortgage clause with respect to the foregoing
hazard insurance, provided such holder agrees with Tenant in writing to disburse such insurance
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 proceeds
received by the Tenant and/or Landlord shall be held in trust by Landlord and, except as provided
otherwise in Section 6.06, shall be applied as follows:



              First, 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 Second, 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 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 (B) (Physical Property Damage Insurance) the
application of insurance



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proceeds from damage or loss to property shall be determined in part in accordance with
Article XVI hereof and, in the event of any such repair, replacement, restoration or rebuilding,
the Tenant and Landlord shall apply the proceeds of the insurance collected to the cost of such
work upon certificate of satisfactory progress and/or completion in form satisfactory to Tenant
and Landlord by the licensed architect or engineer in charge of the work. Any amounts payable to
Tenant or any Affiliate of Tenant for work or services performed or materials provided as part
of any such repair, replacement, restoration or rebuilding shall not exceed competitive rates
for such services or materials and Tenant shall, upon request of Landlord, make available to
Landlord and its representatives all books and records of Tenant relating to such work, services
and materials. 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 Lease,
Landlord or Tenant), any insurance proceeds received by the Tenant or Landlord with respect to
the damage or destruction involved, and not used, shall be and remain the property of Landlord.




              A)
Distribution of Unutilized Proceeds. At the termination of this Lease, such
insurance
proceeds or condemnation awards received and held by the Tenant 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
unleasable 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



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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) Subject to any and all conditions set forth in the COREA, 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 of the interior of the building provided
that all such alterations
or changes 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 in nature Landlord’s written approval shall be first obtained, which approval
shall not be unreasonably
withheld. Tenant may not make any alterations, additions or changes to the exterior of the
building.



              B) Tenant shall at all times keep the Premises or any part thereof, free and dear 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, at its option, 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 and repair the Premises and Tenant’s
Building and all improvements on the Premises including all exterior lighting and signs.



              Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlord’s request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such payment has been made.



     7.03 Repairs — Common Area.



              Tenant shall be responsible for its repair and maintenance obligations as set forth in the
COREA.



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,



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et seq.; all as amended, or any State of Nevada 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 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 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 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 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



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(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 cleanup, 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 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



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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) 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 an Hazardous Materials which Tenant causes to be
brought onto the Premises.



     8.05 Landlord’s Responsibilities.



              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 Premises
or any other portion of the Premises by Landlord, its agents, employees, 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
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, 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.



     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.



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     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.



ARTICLE IX

IMPROVEMENTS




     9.01 Improvements. Tenant Building and Improvements will be constructed in accordance
with Section 2.01 of Article II.



     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 by Tenant of
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 of Improvements.



              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 excluding moveable trade fixtures and personal property of Tenant,
shall become the property of Landlord, unless and to the extent Tenant elects to remove any of the
foregoing pursuant to Section 9.04 (B).



              B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord provided, Tenant replaces
all items removed with items of similar quality or better quality and the foregoing shall remain
the property of the Tenant at the



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expiration or earlier termination of the Lease. In addition, Landlord shall have the right if
Landlord so elects by giving written notice to Tenant of such election at any time before ninety
(90) days prior to the end of the Term (including any renewals or extensions) hereof to remove at
Tenant’s sole cost any other Improvements and all additions, alterations and improvements thereto
or replacements thereof erected, constructed, or installed on the Premises. The removal of any of
the foregoing shall be completed within thirty (30) days following the end of the Term hereof
(including any renewals thereof or any earlier termination permitted by 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 Landlord’s Indemnity. Except to the extent attributable to the intentional and
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), directly or indirectly arising out of or attributable to (i) any intentional or
negligent act or omission of Tenant, its agents, employees, licensees, invitees or contractors on
the Leased Premises, occurring within the Leased Premises or (ii) arising from Tenant’s or its
employees use of the Leased Premises.



     10.02
Tenant’s Indemnity. Except to the extent attributable to the intentional and
negligent acts or omissions of Tenant and its agents, employees, tenants, licensees and
contractors, Landlord shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Tenant) and save Tenant (and its successors, assigns and sublesses), and all
of their directors, officers, employees and agents, hereinafter referred to as “Tenant
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), directly or indirectly arising
out of or attributable to (i) any intentional or negligent act or omission of Landlord, its agents,
employees, licensees, invitees on the Premises or contractors, occurring within the Premises, or
(ii) arising from Landlord’s use of the Premises.



     10.03 COREA. Tenant shall be subject to and be responsible for all the indemnification
provisions as set forth in the COREA.



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. Landlord shall be entitled to all rent from any assignment or sublease in excess of
the Annual Fixed Rent set forth in 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.



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              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, assign this Lease (a) 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 (b) to Tenant’s Parent Corporation. or (e) 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,
provided that such corporation duly and validly then guarantees the performance of the obligations
under this Lease.



     11.02 Notice to Landlord. Tenant shall give notice to Landlord in writing of any
assignment of the Lease ten (10) days prior to such event.



ARTICLE XII

MORTGAGE SUBORDINATION




     12.01 Existing Mortgages. If there is an existing mortgage or deed of trust
(“Mortgage”) lien affecting the interest of Landlord in the Premises or in any other part of 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.



     12.02 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 XIII

CONDEMNATION — EMINENT DOMAIN




     13.01 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 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.



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              B) “Total Taking” means the Taking of the fee title to 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.



              C) “Partial Taking” means any Taking (including any damaging) of a portion of the Premises,
or any Improvements 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.



     13.02
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.



     13.03 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.



     13.04
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 Land, buildings
and other improvements on the Premises and all Severance Damages.



              B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost profits,
relocation expenses and fixtures; and



              C) To Landlord, any balance.


Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.




     13.05 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



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reduced in the same ratio as the percentage of the area of the Premises taken bears to the
total area of the Premises.




     13.06
Partial Taking — Option to Terminate. Notwithstanding anything herein to the
contrary, in the event of a Partial Taking, if more than thirty-three percent (33%) of the
Building is taken by 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).



     13.07 Separate Tenant’s Award. In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses, fixtures and
relocation expenses against the acquiring governmental Agency.



ARTICLE XIV

DEFAULT




     14.01 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 Fixed 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.



     14.02 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 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,



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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 14.02(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.



              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 14.02(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 14.02(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 14.02(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.



              F) Appointment of Receiver. If Tenant defaults under Section 14.02(C), 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 14.01 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



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by Landlord shall be immediately reimbursed from Tenant to Landlord, together with interest
at ten percent (10%) per annum computed from the date of such expenditure until the date of
reimbursement by Tenant.




     14.03 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.



     14.04
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.



     14.05
Dispute Resolution. Landlord and Tenant desire by provisions of this Section
14.05 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 party 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.



              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
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.
Arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration
Association.



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     14.06 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 XV

REPRESENTATIONS AND WARRANTIES




     15.01
Landlord’s Representations and Warranties. Landlord represents and warrants:



               A) 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 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.



               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) Except for liens or encumbrances created by or through Tenant, or based upon
Impositions which are the responsibility of Tenant under this Lease, Landlord after the date
Landlord acquires
title to the property, 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.



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



               A) Tenant is a Delaware 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 XVI

DAMAGE OR DESTRUCTION




     16.01
Repairs, Alterations and Further Improvements.



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               In the event of damage to or destruction of the Tenant’s Building or any Improvements on
or to the Premises whether or not covered by the insurance described in Article 6: Tenant shall
effect, at Tenant’s sole cost and Landlord and Tenant agree that the funds derived from insurance
acquired pursuant to Article 6 shall be made available to effect, such repair and reconstruction
of the structure or improvement so damaged or destroyed to substantially its condition prior to
said damage or destruction with such alterations thereto as Tenant shall reasonably determine
prudent or viable under the circumstances, including any changes required to comply with
applicable law, with the then prevailing construction practices applicable to the Premises. Tenant
shall be responsible for all costs in excess of Insurance proceeds available All such work shall
be carried on in accordance with the provisions of the COREA and with Drawings prepared by a
licensed architect or architects approved by Landlord (acting reasonably) if such an architect is
reasonably required, given the scope and nature of the work. In disbursing insurance proceeds the
Tenant and Landlord may rely upon and accept the certified determinations of such architect with
respect to estimated costs, awarding of contracts, sufficiency of bonds, progress of construction,
interpretation of plans and specifications, compliance with same, and completion of construction.
No extras or changes in Drawings shall be made by Tenant without first giving written notice of
such changes to Landlord and obtaining Landlord’s approval thereof (which approval shall not be
unreasonably withheld or delayed).



               If such reconstruction or rebuilding cannot be made under then existing laws, ordinances,
statutes or regulations of any governmental authority applicable thereto, the Lease shall
Terminate and any insurance proceeds shall become the property of Landlord.



     16.02 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 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.



     16.03
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
thereafter not abate but continue for as long as and to the extent such Improvements are
untenantable.



     16.04 Damage During Last Two (2) Years of Term. If there occurs during the last two (2)
years of the Initial Term or at any time during a Renewal Period damage or destruction to any
Improvement on or in the Premises and the costs of repairing, restoring, replacing or rebuilding
the same exceed Five Thousand Dollars ($500,000), then Landlord may elect to terminate the Term
and, in such event, Landlord shall give notice to Tenant of its election within sixty (60) days
after its determination of the amount of damage, and the Term shall thereupon terminate as of the
date of such notice and all insurance proceeds shall become the property of Landlord.



ARTICLE XVII

MISCELLANEOUS




     17.01
Limitation on Liability. The liability of Landlord hereunder or in connection
with the Premises shall be limited to its interest in the Premises and in no event shall any other
assets of Landlord be subject to any claim arising out of or in connection with the Premises.



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     17.02
Brokers. Landlord and Tenant each represent to the other that neither has
any obligation to any broker or finder in connection with this transaction, and that no fee or
commission is due any broker, finder, or similar person in connection herewith. Landlord and
Tenant each indemnifies the other and agrees to hold the other harmless from and against any and
all claims, demands, liabilities, lawsuits, costs, and expenses (including reasonable attorneys’
fees) for any fee or commission due to any other broker, finder, or similar person in connection
with this transaction and arising out of the act of the indemnifying party.



     17.03 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.



     17.04 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.



     17.05
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 Nevada and each
provision of this Lease shall be valid and enforceable to the fullest
extent permitted by Law.



     17.06 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.



     17.07 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.



     17.08 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.



     17.09 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.



     17.10 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 17.11 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 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 17.11
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



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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..



     17.11 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, 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.




     17.12 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.



     17.13 Sale 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 title, 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 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.



     17.14
Force Majeure. 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



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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.




     17.15 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.



     17.16 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.



     17.17 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.



     17.18 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.



     17.19
Mechanics Liens. Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed against the Premises or the 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%.



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



     17.21 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.



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     17.22
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.



     17.23
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, INC.,	 	 
	 	 	a Delaware Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By.
	 	/s/ Joseph Syufy
 

	 	 
	 	 	Print Name: Joseph Syufy	 	 
	 	 	Title: Sr. Executive Vice President	 	 






LANDLORD:




	 	 	 	 	 	 	 
	 	 	SYUFY ENTERPRISES	 	 
	 	 	a California Limited Partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Raymond Syufy
 

	 	 
	 	 	Print Name: Raymond Syufy	 	 
	 	 	Title: General Partner	 	 





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