exv10w11xay



 




EXHIBIT
10.11(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.






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Table of Contents




	 	 	 	 	 
	 	 	Page No.	 
	Recitals
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I: Definitions — Exhibits
	 	 	 	 
	1.01 Attachments to Lease and Exhibits
	 	 	1	 
	1.02 Definitions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II: Premises — Term — Options — Co-tenancy
	 	 	 	 
	2.01 Lease of Premises
	 	 	3	 
	2.02 Term of Lease
	 	 	3	 
	2.03 Option to Extend Lease Term
	 	 	4	 
	2.04 Covenant of Title
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III: Use of Premises
	 	 	 	 
	3.01 Use
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV: Rent
	 	 	 	 
	4.01 Annual Fixed Rent
	 	 	6	 
	4.02 Percentage Rent
	 	 	6	 
	4.03 Rent Payments
	 	 	7	 
	4.04 Place for Payment of Rent
	 	 	7	 
	4.05 Late Payment of Rent
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V: Taxes, Assessments and Utilities
	 	 	 	 
	5.01 Impositions
	 	 	8	 
	5.02 Exceptions from Impositions; Charges in Lieu of Impositions
	 	 	8	 
	5.03 Contest of Taxes
	 	 	9	 
	5.04 Utilities
	 	 	9	 
	5.05 Personal Property Taxes
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VI: Insurance
	 	 	 	 
	6.01 Acquisition of Insurance Policies
	 	 	9	 
	6.02 Types of Required Insurance
	 	 	9	 
	6.03 Terms of Insurance
	 	 	10	 
	6.04 Landlord’s Acquisition of Insurance
	 	 	11	 
	6.05 Insurance Money and Other Funds Held In Trust
	 	 	11	 
	6.06 Application or Proceeds of Physical Damage Insurance
	 	 	11	 






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	 	 	Page No.	 
	6.07 Cooperation for Insurance Proceeds
	 	 	12	 
	6.08 Waiver of Right of Recovery
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VII: Maintenance, Repairs And Alterations
	 	 	 	 
	7.01
Alterations — Changes
	 	 	13	 
	7.02 Repairs
— Maintenance
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VIII: Environmental Matters
	 	 	 	 
	8.01 Definition
	 	 	14	 
	8.02 Tenant’s Responsibilities and Landlord Indemnity
	 	 	14	 
	8.03 Remedial Work
	 	 	16	 
	8.04 Maintenance of Premises
	 	 	17	 
	8.05 Landlord’s Responsibilities and Tenant’s Indemnity
	 	 	17	 
	8.06 Landlord Inspection
	 	 	18	 
	8.07 Effect of Termination
	 	 	18	 
	 
	 	 	 	 
	ARTICLE IX: Improvements
	 	 	 	 
	9.01 Tenant Improvements
	 	 	19	 
	9.02 Hold Harmless
	 	 	19	 
	9.03 Permits, Compliance With Codes
	 	 	19	 
	9.04 Ownership of Improvements
	 	 	19	 
	9.05 Control
	 	 	20	 
	 
	 	 	 	 
	ARTICLE X: Indemnity
	 	 	 	 
	10.01 Landlord’s Indemnity
	 	 	20	 
	10.02 Tenant’s Indemnity
	 	 	20	 
	 
	 	 	 	 
	ARTICLE XI: Assignment and Subletting
	 	 	 	 
	11.01 Assignment and Subletting
	 	 	21	 
	11.02 Notice to Landlord
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XII: Mortgage Subordination
	 	 	 	 
	12.01 Existing Mortgages
	 	 	21	 
	12.02 Future Mortgages
	 	 	21	 
	 
	 	 	 	 
	ARTICLE XIII: Condemnation — Eminent Domain
	 	 	 	 






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	 	 	Page No.	 
	13.01 Definitions
	 	 	22	 
	13.02 Notice to Other Party
	 	 	23	 
	13.03 Total Taking — Effect on Rent and Term
	 	 	23	 
	13.04 Distribution of Award for Taking
	 	 	23	 
	13.05 Partial Taking — Rent Adjustments
	 	 	23	 
	13.06 Partial Taking — Option to Terminate
	 	 	23	 
	13.07 Separate Tenant’s Award
	 	 	24	 
	 
	 	 	 	 
	ARTICLE XIV: Default
	 	 	 	 
	14.01 Tenant’s Default
	 	 	24	 
	14.02 Landlord’s Remedies Cumulative
	 	 	24	 
	14.03 Landlord’s Default
	 	 	26	 
	14.04 Waiver of Redemption
	 	 	26	 
	14.05 Dispute Resolution
	 	 	26	 
	14.06 Attorney Fees
	 	 	27	 
	 
	 	 	 	 
	ARTICLE XV: Representations and Warranties
	 	 	 	 
	15.01 Landlord’s Representations and Warranties
	 	 	27	 
	15.02 Tenant’s Representations and Warranties
	 	 	28	 
	 
	 	 	 	 
	ARTICLE XVI: Damage or Destruction
	 	 	 	 
	16.01 Repairs, Alterations and Further Improvements
	 	 	28	 
	16.02 Prompt Repair
	 	 	30	 
	16.03 Rent Adjustment
	 	 	30	 
	16.04 Damage During Last Ten (10) Years of Term
	 	 	30	 
	 
	 	 	 	 
	ARTICLE XVII: Miscellaneous
	 	 	 	 
	17.01 Limitation on Liability
	 	 	30	 
	17.02 Brokers
	 	 	30	 
	17.03 Modification
	 	 	31	 
	17.04 Severability
	 	 	31	 
	17.05 Governing Law
	 	 	31	 
	17.06 Terminology
	 	 	31	 
	17.07 Counterparts
	 	 	31	 
	17.08 Binding Effect
	 	 	31	 
	17.09 Captions
	 	 	31	 






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	 	 	Page No.	 
	17.10 Notice to Landlord and Tenant
	 	 	31	 
	17.11 Addresses for Notices to Landlord and Tenant
	 	 	32	 
	17.12 Entire Agreement
	 	 	32	 
	17.13 Sale or Transfer of Premises
	 	 	33	 
	17.14 Force Majeure
	 	 	33	 
	17.15 Waiver
	 	 	33	 
	17.16 Estoppel Certificate
	 	 	33	 
	17.17 Number and Gender
	 	 	34	 
	17.18 No Holding Over
	 	 	34	 
	17.19 Mechanics Liens
	 	 	34	 
	17.20 Relationship of Parties
	 	 	34	 
	17.21 Time of the Essence
	 	 	34	 
	17.22 Facsimile Copies
	 	 	34	 
	17.23 Anti-Merger
	 	 	34	 






Signature Page




	 	 	 
	Exhibit A

	 	A Description of Entire Premises
	Exhibit B

	 	A Site Plan of Entire Premises
	Exhibit C

	 	Form of Memorandum of Lease
	Exhibit D

	 	Guaranty of Lease







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LEASE




     THIS INDENTURE OF LEASE, dated as of December 1,1995, 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 OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called “Tenant”.



RECITALS




     Landlord owns the fee interest in a parcel of land described on Exhibit A attached hereto.



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



     NOW THEREFORE, the parties hereto agree as follows:



ARTICLE I 
EXHIBITS —
DEFINITIONS




     1.01 Attachments to Lease and Exhibits



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




          EXHIBIT A — a description of the tract of land hereinafter referred to as “Entire Premises”.




          EXHIBIT B — a site plan of the Entire Premises showing (i) the location of the Tenant’s
Building, outlined in red.




          EXHIBIT C — Form of Memorandum of Lease




          EXHIBIT D — Guaranty of Lease.




     1.02. Definitions.



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




          The term “Commencement Date” shall mean July 1, 1996.




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          The term “Common Facilities” or “Common Areas” shall include the parking areas, streets,
driveways, curb cuts, access facilities, aisles, sidewalks, malls, landscaped areas, and other
common and service areas within the Entire Premises with the improvements thereon, whether or not
shown on Exhibit B.




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




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




          The term “Entire Premises” shall mean the tract of land described on Exhibit B.




          The Term “Initial Rent Due Date” shall mean July 1, 1996.




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




          The term “Leased Premises” or “Premises” shall mean Tenant’s Building outlined in red on
Exhibit B and the land thereunder and the rights, easements and privileges granted to Tenant in
this Lease.




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




          The term “Number of Tenant Working Days” shall mean 365 days.




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




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




          The term “Percentage Rate” shall mean ***          




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




          The term “Prime Rate” shall be the per annum interest rate from time to time publicly
announced by Citibank, N.A., New York, New York as its base rate. The Prime





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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 building to be erected by Tenant at Tenant’s sole
cost.




          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”.




          C) Landlord shall deliver possession of the Premises to Tenant on the Effective Date.




          D) During the Lease Term, Landlord grants to Tenant and its employees, agents, customers and
other invitees a non-exclusive easement for free parking and ingress and egress on and over the
Entire Premises for Tenant, Tenant’s employees, agents, contractors, customers and invitees.
Tenant shall be responsible for all costs associated with the Entire Premises exclusive of any
Landlord’s Buildings that may be constructed thereon. The location of said easements may be
changed at the sole discretion of the Landlord so long as such change does not interfere with
Tenant’s Permitted Use.




     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.



3









 





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




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




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




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



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



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



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



               (3) Tenant is not in default (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,
and has good an marketable title to the Entire Premises in fee simple.



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               (B) Landlord shall give Tenant prior written notice before commencing any work upon the Entire
Premises, and shall cause all work to be performed by Landlord to be conducted in such a manner
that does not unreasonably interfere with Tenant’s customers or its business operations. Tenant
shall give Landlord prior written notice before commencing any work upon the Premises, and shall
cause all work to be performed by Tenant to be conducted in such a manner that the same does not
unreasonably interfere with the other tenant’s customers or their business operations.



               (C) “Exterior Common Facilities” shall consist of all driveways, parking areas, utilities and
utility lines, service areas, including loading and unloading areas, landscape areas, if any,
lighting facilities and equipment, and any and all other exterior facilities upon or below the
Entire Premises designed for use by or benefit of the occupants of the Entire Premises.,



               (D) Maintenance of Entire Premises At all times during the Term, Tenant shall keep and
maintain the Exterior Common Facilities in the Entire Premises and Tenant’s Building in good order
and repair and in a clean and safe condition, reasonably free of debris. The lighting for the
Exterior Common Facilities shall be turned on by Tenant on each day that business is conducted on
the Premises at or about the same time that the municipality turns on street lights, and same
shall be kept lighted for one (1) hour after all Tenants close for business. Tenant’s obligation
hereunder shall included maintaining the parking areas of the Entire Premises free of potholes and
assuring that they are properly coated and sealed and striped as needed. Tenant shall make any and
all additions to and all alterations and repairs in, on and about the Exterior Common Facilities,
which may be required by, and shall otherwise observe and comply with, all public laws, ordinances
and regulations from time to time applicable to the Exterior Common Facilities. 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.



               (E) Tenant’s Liens Tenant will not permit the Entire 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 Entire 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.



ARTICLE III

USE OF PREMISES




     3.01
Use.



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





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




          C) Landlord agrees that no use of the Entire Premises shall be permitted which is
inconsistent with the operation of the Planned Use. Landlord further agrees not to permit or allow
any portion of the Entire Premises to be used by any other tenant, subtenant, licensee, or
occupant (including Landlord) for the exhibition of commercial movies or as a commercial movie
theater complex.




ARTICLE IV

RENT




     4.01 Annual Fixed Rent.



          A) Beginning on the Initial Rent Due 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 (but never decreased) on
the first day of the ***      Lease Year and
on the first day of each ***      Lease Year thereafter
during the Term by a percentage equal to the percentage of increase from the “base period” (as
hereinafter defined in this Section) of the United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for all Urban Consumers, Sacramento, Subgroup “All Items”,
(1982-84+100) (the Consumers Price Index”; provided however, in no event shall the Annual Fixed
Rent be increased by an amount that is less than ***      greater than the Annual Fixed Rent payable
before the adjustment date in question.




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



     4.02 Percentage Rent.



          In addition to the payment of 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 ***      of
the Gross Sales for such Lease Year exceeds the Annual Fixed Rent which is payable for such Lease





6









 







Year equal to the quotient obtained by dividing the annual fixed rate for such Lease year by the
percentage rate. 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
office of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with the
delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.




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




     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 eighteen percent (18%) per annum computed from the date such rent
installment was due until the date actually paid.



7









 








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 Entire 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 (exclusive of Landlord’s Buildings, if any) assessed, levied or attributable to
the Entire Premises and/or the Improvements on the Entire Premises (exclusive of Landlord’s
Buildings, if any).. 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) Landlord will pay, before the last day on which payment may be made without penalty or
interest, all Impositions which shall be levied against Landlord’s Buildings, if any.




     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





8









 







taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a tax
shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy or
charge, measured or based, in whole or in part, on the Premises or on the rents derived therefrom,
shall be imposed on Landlord, then Tenant shall pay taxes so measured or based only to the extent
that such taxes would be payable if the Premises were the only property of Landlord subject to
such taxes, or the income from operation of the Premises were Landlord’s only income, as the case
may be.




     5.03 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 Entire Premises
exclusive of Landlord’s Buildings, if any. Any utility improvements presently serving the Entire
Premises shall be maintained, repaired and replaced by Tenant, at Tenant’s expense.



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



ARTICLE VI

INSURANCE




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



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




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          A) Commercial General Liability Insurance. Commercial general liability insurance insuring
against injuries or damages to persons or property sustained in, on or about the Entire 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 Common Area 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 but excluding
earthquake and flood to the extent of not less than 100% of the full replacement cost thereof less
any deductible applicable to all of Tenant’s theatres insured under a blanket policy. Tenant shall
be responsible for determining the amount of fire and extended coverage insurance to be maintained
subject to Landlord’s consent, which consent is not to be unreasonably withheld or delayed. The
proceeds of such insurance in case of loss or damage shall be held in trust and applied on account
of the obligation of Tenant to repair and/or rebuild the Leased Premises pursuant to the Article
captioned “Damage Clause” to the extent that such proceeds are required for such purpose. The
insurance required to be carried by Tenant under this paragraph may be covered under a so-called
“blanket” policy covering other operations of Tenant and its affiliates. 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.




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          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
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:




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               (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 unleasible or other factor beyond such party’s reasonable control unable to obtain a
waiver of the right of subrogation for the benefit of the other party, then, during any period of
time when such waiver is unobtainable, said party shall be deemed not to have released any
subrogated claim of its insurance carrier against the other party, and during the same period of
time the other party shall be deemed not to have released the party who has been unable to obtain
such waiver from any claims they or their insurance carriers may assert which otherwise would have
been released pursuant to this Section. In the event that either party is unable to obtain such
waiver of the right of subrogation for the benefit of the other party, such party shall, within
thirty (30) days of receiving notice of such inability, give the other party written notice of
such inability.



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ARTICLE VII

MAINTENANCE, REPAIRS AND ALTERATIONS




     7.01 Alterations — Changes.



          A) At any time and from time to time during the Lease Term, Tenant may, at its sole expense,
make any alterations, additions or changes, whether structural or nonstructural, to any portion or
all of any Improvements which may exist at any time and from time to time on any portion of the
Premises, and may, at its option, construct new Improvements on the Premises, or remove or
demolish Improvements on the Premises, provided that all such alterations or changes in
Improvements and new Improvements shall be performed in a first-class manner and must comply with
all laws, zoning regulations and ordinances, and any conditions on permits issued pursuant
thereto. If the change, alteration or addition is structural or exterior in nature Landlord’s
written approval shall be first obtained, which approval shall not be unreasonably withheld.




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




          C) Upon termination of this Lease, Tenant may, 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.



          A) Tenant shall, at its sole cost and expense, maintain and repair the Entire Premises and
Tenant’s Building and all improvements on the Entire Premises exclusive of Landlord’s Buildings if
any and including all exterior lighting and signs.




          B) Tenant shall also be responsible for any losses or damages resulting to Landlord’s
Buildings, if any. from any materials, substances or liquids which are leaked or discharged from
any area outside Landlord’s Buildings, if any, unless such leakage or discharge is caused by
Landlord or Landlord’s agents or employees.




          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.






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ARTICLE VIII



ENVIRONMENTAL MATTERS




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



     8.02 Tenant’s Responsibilities and Landlord Indemnity.



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





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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 (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





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wherever situated. Tenant, at its sole cost and expense, shall promptly take all actions
necessary to return the Premises to the condition existing prior to the introduction of such
Hazardous Materials to the Premises and to remedy or repair any such injury or contamination.
Notwithstanding the foregoing, Tenant shall not, without Landlord’s prior written consent, which
consent shall not be unreasonably withheld or denied or conditioned or delayed, take any remedial
action in response to the presence of any Hazardous Materials in, on, under or about the Premises
or enter into any settlement agreement, consent decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims; provided, however, Landlord’s prior written
consent shall not be necessary in the event that the presence of Hazardous Materials in, on, under
or about the Premises (i) poses an immediate threat to the health, safety or welfare of any
individual or (ii) is of such nature that an immediate remedial response is necessary and it is not
possible to obtain Landlord’s consent before taking such action.




     8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up, containment, restoration, removal or other remedial work (“Remedial Work”) is required
(a) under any applicable federal, state or local law or regulation, (b) by any judicial, arbitral
or administrative order, (c) to comply with any agreements affecting the Premises or (d) to
maintain the Premises in a standard of environmental condition which presents no risk to safety or
health, prevents the release of any hazardous materials to adjacent property and otherwise is
consistent with the prudent ownership of property of the character of the Premises and/or Tenant’s
Building and if such Remedial Work is required as a direct result of Tenant’s Environmental Acts,
then Tenant at Tenant’s sole cost and expense, including without limitation, any taxes or
penalties assessed in connection with the Remedial Work, shall perform or cause to be performed
such Remedial Work; and if such Remedial Work is required for any reason other than Tenant’s
Environmental Acts, then, Landlord, at Landlord’s sole cost and expense, including without
limitation, any taxes or penalties assessed in connection with the Remedial Work, shall perform or
cause to be performed such Remedial Work. All Remedial Work shall be conducted (i) in a diligent
and timely fashion by licensed contractors acting under the supervision of a consulting
environmental engineer, (ii) pursuant to a detailed written plan for the Remedial Work approved by
any public or private agencies or persons with a legal or contractual right to such approval,
(iii) with such insurance coverage pertaining to liabilities arising out of the Remedial Work as
is then customarily maintained with respect to such activities, and (iv) only following receipt of
any required permits, licenses or approvals. The selection of the Remedial Work contractors, any
disclosures to or agreements with any public or private agencies or parties relating to Remedial
Work and the written plan for the Remedial Work (and any changes thereto) each shall be subject to
the other party’s prior written approval, which approval shall not be unreasonably withheld,
denied, conditioned or delayed. In addition, the party doing the Remedial Work shall submit to the
other party, promptly upon receipt or preparation, copies of any and all reports, studies,
analyses, correspondence, governmental comments or approvals, proposed removal or other remedial
work contracts and similar information prepared or received by such party in connection with any
Remedial Work or Hazardous Materials relating to the Premises. In the event the party responsible
therefor should fail to commence or cause to be commenced in a timely fashion, or fail diligently
to prosecute to completion, such Remedial Work, the other party (following written notice) may,
but shall not be required to, cause such Remedial Work to be performed, and all costs and expenses
thereof, or incurred in connection therewith (i) in the case where Tenant is the responsible
party, shall be paid as additional rent due and




16









 







payable within thirty (30) days of Landlord’s invoice therefor, or (ii) in the case where Landlord
is the responsible party, shall be paid by Landlord to Tenant within thirty (30) days of Tenant’s
invoice therefor, and if not timely paid by Landlord, in additional to all other rights and
remedies, Tenant shall have the right of offset against rent which may become due. Neither party
shall be obligated to perform Remedial Work under this Section while it is contesting the
application of any law, regulation or order, provided the other party is not exposed to any
additional liability, risk or damages. Obligations under this Section are solely for the benefit of
the parties, their successors, and assigns and any subtenants of this Lease, and not for any other
third parties.




     8.04 Maintenance of Premises.



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




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




     8.05 Landlord’s Responsibilities and Tenant’s Indemnity.



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




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




          C) Except for the obligations of Tenant as set forth in this Article VIII, Landlord shall
exonerate, indemnify, pay and protect, defend and hold harmless (with counsel reasonably approved
by Tenant) and save Tenant and Tenant’s successors and assigns, and their directors, trustees,





17









 







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




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



     8.07 Effect of Termination.



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




18









 





          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 Tenant Improvements. Tenant at its sole cost and expense shall complete all the required
on-site and off-site improvements, including all signs, required for the development of the Entire
Premises. In addition Tenant shall construct a motion picture theater building on the Premises
containing approximately sixty thousand (60,000) square feet with sixteen auditoriums. Landlord
will provide Tenant with a site and building allowance of $4,992,180.00. The site and building
allowance will be paid by Landlord to Tenant the latter of July 1, 1996 or the date Tenant opens to
the public for business.



     9.02 Hold Harmless. Except to the extent attributable to the intentional or negligent acts or
omissions of Landlord or Landlord’s agents, employees, contractors, tenants, or invitees, Tenant
shall indemnify, protect, defend and hold harmless Landlord and the Premises from and against all
claims and liabilities arising by virtue of or relating to construction of by Tenant of Tenant’s
Building or 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





19









 







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 and the foregoing shall
remain the property of the Tenant at the expiration or earlier termination of the Lease. In
addition, Tenant shall have the right if Tenant so elects by giving written notice to Landlord 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 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.




     9.07 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 subletees), 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 Entire Premises or contractors, occurring within the Entire Premises, or (ii)
arising from Landlord’s use of the Entire Premises.



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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.




          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 Entire 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




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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 Entire Premises or Improvements or
Parking or any interest in them by eminent domain or inverse condemnation:



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




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




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




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




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




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



     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 or
thirty-three (33%) of the parking 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




23









 







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





24









 







receiver, or any execution of any decree obtained in any action to recover possession of the
Premises, or any re-entry, shall not be construed as an election to terminate this Lease unless
Landlord shall, in writing, expressly exercise its election to declare the Lease Term hereunder
ended and to terminate this Lease, and unless this Lease be expressly terminated, such re-entry or
entry by Landlord, whether had or taken under summary proceedings or otherwise, shall not be
deemed to have absolved or discharged Tenant from any of its obligations and liabilities for the
remainder of the Lease Term. Notwithstanding anything to the contrary or other provisions of this
Section 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.



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          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 by Landlord shall be immediately reimbursed from Tenant to Landlord, together
with interest at eighteen percent (18%) per annum computed from the date of such expenditure until
the date of reimbursement by Tenant.




     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,




26









 







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.




     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) Landlord is the fee owner of the Premises.




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




27









 








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




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




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




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




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




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



          A) Tenant is a California corporation in good standing.




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




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




ARTICLE XVI

DAMAGE OR DESTRUCTION




     16.01 Repairs. Alterations and Further Improvements.



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          A) Tenant’s Obligation to Repair. In the event of damage to or destruction of the
Tenant’s Building or any Improvements on or to the Premises to be covered by the insurance
described in Article 6:




               (1) Damages of Less Than Fifty Percent (50%) of Replacement Cost. If the cost of repairing or
reconstructing the Tenant’s Building or Improvements to the condition and form prior to such damage
or destruction is not in excess of Fifty percent (50%) of the then new replacement cost of the
Improvements and such repairs or reconstruction of any such damage or destruction can be made under
then existing laws, ordinances, statutes or regulations of any governmental authorities applicable
thereto (or can be so made with minor and non-material changes to the former condition and form of
property damaged or destroyed), Tenant shall effect, 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 valuable 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 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).



               (2) Damage in Excess of Fifty Percent (50%). If the cost of repairing or
reconstructing said damage or destruction to its former condition and form is in excess of the
Fifty percent (50%) provided in subparagraph (A)(1) of this Section 16.01, or if such cost is less
than Fifty percent (50%), but such reconstruction or rebuilding cannot be made under then existing
laws, ordinances, statutes or regulations of any governmental authority applicable thereto (and
cannot be so made with minor and non-material changes to the former condition and form of the
property damaged or destroyed), and, in any such event, the parties hereto are unable during a
period of ninety (90) days after the determination by Tenant with respect to such damage or
destruction to agree in writing on a construction program, then, at Tenant’s sole option, the Term
shall end as of the date of such damage or destruction, provided that Tenant notifies Landlord of
its election to exercise such termination option within such ninety (90) day period. If, however,
such reconstruction or rebuilding can be made under such existing laws, ordinances, statutes and
regulations (or can be so made with minor and non-material changes to the former condition and
form of the property damaged or destroyed), but the cost of so repairing or reconstructing such
damage or destruction is in excess of the Fifty percent (50%) provided for in subparagraph (A)(1)
of this Section 16.01, Tenant shall have the absolute right to treat such damage as under
subparagraph (A)(1) of this Section 16.01 as if the damage or destruction met the description
thereof set forth in the first sentence of that Section if Tenant (i) gives




29









 







notice to the effect to Landlord within such ninety (90) days period after Tenant’s determination
with respect to said damage or destruction; and (ii) promptly demonstrates to the reasonable
satisfaction of any Leasehold Mortgagee (if any) that it can provide the funds required or that
will be required under the provisions of subparagraph (A)(1) of this Section 16.01 to effect such
repair or restoration, whereupon the provisions of said subparagraph (A) of this Section 16.01
shall be fully applicable to such damage or destruction.




     16.02 Prompt Repair. If Tenant, pursuant to the terms hereof, is obligated or elects 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 subject to the provisions of subparagraph
(B) of Section 16.01), 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 ten (10) 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 Tenant may elect to terminate the Term and,
in such event, Tenant shall give notice to Landlord 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.



ARTICLE XVII

MISCELLANEOUS




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



     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




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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 California 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





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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 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
	 
	 	 	 	 
	 

	 	To Tenant:
	 	Century Theatres of California, Inc.
	 

	 	 	 	150 Golden Gate Avenue 
	 

	 	 	 	San Francisco, CA 94102 
	 

	 	 	 	Attention: Real Estate 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.



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     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 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




33









 







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



     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.



     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




34









 





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




	 	 	 	 	 	 	 
	         Executed as of the date first written above.	 	 
	 
	 	 	 	 	 	 
	TENANT:
	 	 	 	 	 	 
	 	 	CENTURY THEATRES OF CALIFORNIA, INC., 

a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Print Name:
	 	/s/ Joseph Syufy
 

Joseph Syufy
	 	 
	 

	 	Title:
	 	Senior Exec. VP	 	 
	 
	 	 	 	 	 	 
	LANDLORD:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SYUFY ENTERPRISES, a

California Limited Partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Print Name:
	 	/s/ Raymond W. Syufy
 

Raymond W. Syufy
	 	 
	 

	 	Title:
	 	President	 	 







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