exv10w31xay



 




EXHIBIT
10.31(a)








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CENTURY THEATRES




Table of Contents




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






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






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






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	 	 	 	 	Page No.
	Exhibit A

	 	Description of Premises
	 	A-1
	Exhibit B

	 	Site Plan of Premises
	 	B-1
	Exhibit C

	 	Form of Memorandum
	 	C-1
	Exhibit D

	 	Guaranty of Lease
	 	D-1






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LEASE




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



RECITALS




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



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



     NOW THEREFORE, the parties hereto agree as follows:



ARTICLE I




EXHIBITS — DEFINITIONS




     1.01 Attachments to Lease and Exhibits



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



               EXHIBIT A — a description of the Premises.



               EXHIBIT B — a site plan of the Premises.



               EXHIBIT C — Form of Memorandum of Lease



               EXHIBIT D — Guaranty of Lease



     1.02. Definitions.



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



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



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



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



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



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



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               The term “Leased Premises” shall mean Tenant’s Building as set forth in 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 Term Years” shall mean 20 years.











               The
term “Option Periods” shall mean two (2) successive separate periods of five
years each.







               The
term “Percentage Rate” shall mean eight percent (8%).



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



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



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



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



ARTICLE II




PREMISES — TERM — OPTIONS — COVENANT OF TITLE




     2.01 Lease of Premises.



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




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




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




     2.02 Term of Lease.



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



2









 









               The “Initial Term” of this Lease shall begin on the Commencement Date and shall terminate
twenty (20) years thereafter. References herein to the “Lease Term” shall mean the Initial Term of this Lease
or the Initial Term as extended under Section 2.02.







     2.03 Option to Extend Lease Term.







          A)
Tenant may, at Tenant’s option, extend the Initial Term of this
Lease for up to two (2) consecutive additional periods of five (5)
years 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 fifth (5th) anniversary of the date of commencement of the Renewal Term in question, unless sooner terminated as
provided herein.








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




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




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



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



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



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



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



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



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



3









 





ARTICLE III 




USE OF PREMISES




     3.01  Use.



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




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




ARTICLE IV




RENT




     4.01 Minimum Monthly Rent.







          A) Beginning on the Initial Rent Due Date, Tenant shall pay to Landlord during the
Lease Term a “Base Rent” of $59,166.67 The Base Rent is sometimes referred to herein as the “Minimum Monthly Rent” and
shall be subject to adjustment every five (5) years after the Initial Rent Due Date as set forth in Section 4.01 B
below.












          B) The Minimum Monthly Rent shall apply from the Rent Commencement Date through the end
of the fifth (5th) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the sixth (6th) Lease Year and on the
first day of each fifth (5th) 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, San Francisco-Oakland-San Jose Average, Subgroup “All Items”,
(1982-84=100) (the “Consumer Price Index”); provided, however, in no event shall the Minimum
Monthly Rent be increased by an amount that is less than seven and
one-half (7.5%) greater than the Minimum Monthly Rent payable before the adjustment date in question.








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







     4.02 Percentage Rent. In addition to the payment of Base Rent, Tenant shall pay to
Landlord for each Lease Year during the Term of this Lease, as Percentage Rent a sum equal to the
amount by which 8% of the Gross Sales for such Lease Year exceeds the Base Rent which is payable
for such Lease Year equal to the quotient obtained by dividing the annual fixed rate for such
Lease year by the percentage rate.







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




4









 




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




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




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




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



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



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



ARTICLE V




TAXES, ASSESSMENTS AND UTILITIES




     5.01 Impositions.



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




5









 





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




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




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




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



     5.03 Exceptions from Impositions: Charges in Lieu of Impositions.



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




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




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


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




6









 




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




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



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



ARTICLE VI




INSURANCE




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



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



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




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




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




7









 




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




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



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




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




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




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




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



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



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




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



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




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



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



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



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



ARTICLE VII




MAINTENANCE, REPAIRS AND ALTERATIONS




     7.01 Alterations — Changes.



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




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




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




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



ARTICLE VIII 




ENVIRONMENTAL MATTERS




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



     8.02 Tenant’s Responsibilities and Landlord Indemnity.



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




10









 




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




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




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




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




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



11









 




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




     8.04 Maintenance of Premises.



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




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




     8.05 Landlord’s Responsibilities and Tenant’s Indemnity.



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




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




12









 




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




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




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



     8.07
Effect of Termination.



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




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




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ARTICLE IX 




IMPROVEMENTS




     9.01 Tenant’s Signs.



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




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




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



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



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



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



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



     9.04 Ownership.



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




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




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



ARTICLE X




INDEMNITY




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



ARTICLE XI




ASSIGNMENT AND SUBLETTING




     11.01 Assignment and Subletting.



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




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




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




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



ARTICLE XII




ENCUMBRANCE OF LEASEHOLD ESTATE




     12.01 Leasehold Mortgages.



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




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




ARTICLE XIII




MORTGAGE SUBORDINATION



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



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




ARTICLE XIV




CONDEMNATION — EMINENT DOMAIN




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



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




16









 





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




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




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




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




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



          A) Notice of Intended Taking;




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




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




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




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



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



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




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




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




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




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




          F) To Landlord, any balance.








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




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



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



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



ARTICLE XV 




DEFAULT




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



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




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




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




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



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




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




18









 




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




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




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



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



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



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



               (5) For any other sums due.



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




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



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



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




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




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




     15.03 Landlord’s Default



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




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




     15.04 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.



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



          A) Description of Dispute. The complaining party shall provide by notice a written
description of the alleged breach by the other party. This description shall explain the nature of
the complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act The 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. The settlement conference
shall be held in the County of San Francisco, California.




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




20









 




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




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



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



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


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




ARTICLE XVI 




REPRESENTATIONS AND WARRANTIES




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



          A) Landlord is the fee owner of the Premises.




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




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




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




21









 





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




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




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




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



          A) Tenant is a California corporation in good standing.




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




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




ARTICLE XVII 




DAMAGE OR DESTRUCTION




     17.01 Repairs. Alterations and Further Improvements.



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




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




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



22









 




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




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



ARTICLE XVIII




MISCELLANEOUS




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



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



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



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



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



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



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



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



     18.09 Notices to Landlord and Tenant.



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




23









 




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




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




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




     18.10 Addresses for Notices to Landlord and Tenant



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



	 	 	 	 	 
	 

	 	To Landlord:
	 	Syufy Enterprises
	 

	 	 	 	150 Golden Gate Ave.
	 

	 	 	 	San Francisco, CA 94102
	 

	 	 	 	Attn: Real Estate Department
	 
	 	 	 	 
	 

	 	To Tenant:
	 	Century Theatres of California, Inc.
	 

	 	 	 	150 Golden Gate Avenue
	 

	 	 	 	San Francisco, CA 94102
	 

	 	 	 	Attention: Legal Department





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




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



     18.12 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



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




     18.13 Force 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



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



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



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



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



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



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



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




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



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



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



          A) Terminate any existing subleases or subtenancies; or




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




     Executed as of the date first written above.



TENANT:



CENTURY THEATRES OF CALIFORNIA, INC., 
a
California Corporation



By:/s/ Joseph Syufy                     

Print Name: Joseph Syufy 

Title: V.P.




LANDLORD:



SYUFY ENTERPRISES

a California Limited Partnership



By: /s/ Raymond W. Syufy                      

Print Name: Raymond W. Syufy 

Title: G.P.




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