As filed with the Securities and Exchange Commission on
April 20, 2007
Registration
No. 333-140390
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 5
to
Form S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
Cinemark Holdings,
Inc.
(Exact Name of Registrant as
Specified in Its Charter)
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Delaware
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7832
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20-5490327
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(State or Other Jurisdiction
of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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3900 Dallas Parkway, Suite 500
Plano, Texas 75093
(972) 665-1000
(Address, Including Zip Code,
and Telephone Number,
Including Area Code, of
Registrants Principal Executive Offices)
Michael Cavalier
Senior Vice President-General Counsel
3900 Dallas Parkway, Suite 500
Plano, Texas 75093
(972) 665-1000
(Name, Address, Including Zip
Code, and Telephone Number,
Including Area Code, of Agent
for Service)
With a copy to:
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Terry M. Schpok, P.C.
Akin Gump Strauss Hauer & Feld LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Telephone: (214) 969-2800
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D. Rhett Brandon, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Telephone: (212) 455-3615
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Approximate date of commencement of proposed sale to the
public:
As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the
following box.
o
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering.
o
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If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
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If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as
the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
EXPLANATORY
NOTE
Cinemark Holdings, Inc. has prepared this Amendment No. 5
to this Registration Statement on Form S-1 (File
No. 333-140390) for the sole purpose of filing Exhibit
Numbers 10.10(a), 10.10(b), 10.10(c), 10.10(e), 10.11(a),
10.11(b), 10.11(e), 10.12(a), 10.12(b), 10.12(c), 10.12(e),
10.13(a), 10.13(b), 10.13(e), 10.14(a), 10.14(b), 10.14(e),
10.15(a), 10.15(b), 10.15(e), 10.16(a), 10.16(b), 10.16(c),
10.16(e), 10.17(a), 10.17(b), 10.17(e), 10.18(a), 10.18(c),
10.18(d), 10.18(f), 10.19(a), 10.19(b), 10.19(c), 10.19(d),
10.19(e), 10.20(a), 10.20(b), 10.20(d), 10.20(e), 10.21(a),
10.21(b), 10.21(c), 10.21(e), 10.22(a), 10.22(b), 10.22(d),
10.22(e), 10.23(a), 10.23(b), 10.23(e), 10.24(a), 10.24(b),
10.24(c), 10.24(e), 10.25(a), 10.25(d), 10.26(a), 10.26(d),
10.27(a), 10.28(a), 10.28(d), 10.29(a), 10.29(d), 10.30(a),
10.30(b), 10.30(c), 10.31(a), 10.31(b), 10.31(c), 10.31(e),
10.32(a), 10.32(b), 10.32(d), 10.33(a), 10.33(c), 10.33(f),
10.34(a), 10.34(b), 10.34(c), 10.34(e), 10.35(a), 10.35(d),
10.36(a), 10.36(b), and 10.36(f) with the Securities and
Exchange Commission. Amendment No. 5 does not modify any
provision of the Prospectus that forms a part of the
Registration Statement and accordingly such Prospectus has not
been included herein.
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 16.
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Exhibits
and Financial Statement Schedules.
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(a) The following exhibits are filed herewith:
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Number
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Exhibit Title
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**1
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Form of Underwriting Agreement.
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2
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.1
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Stock Contribution and Exchange
Agreement, dated as of August 7, 2006, by and between
Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP
and Century Theatres Holdings, LLC (incorporated by reference to
Exhibit 10.2 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
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2
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.2
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Contribution and Exchange
Agreement, dated as of August 7, 2006, by and among
Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell
Special Trust, Alan W. Stock, Timothy Warner, Robert Copple,
Michael Cavalier, Northwestern University, John Madigan,
Quadrangle Select Partners LP, Quadrangle Capital Partners A LP,
Madison Dearborn Capital Partners IV, L.P., K&E Investment
Partners, LLC 2004-B-DIF, Piola Investments Ltd.,
Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital
Partners LP (incorporated by reference to Exhibit 10.3 to
Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
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**3
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.1
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Second Amended and Restated
Certificate of Incorporation of Cinemark Holdings, Inc. filed
with the Delaware Secretary of State on April 9, 2007.
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**3
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.2(a)
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Amended and Restated Bylaws of
Cinemark Holdings, Inc. dated April 9, 2007.
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**3
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.2(b)
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First Amendment to the Amended and
Restated Bylaws of Cinemark Holdings, Inc. dated April 16,
2007.
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**4
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.1
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Specimen stock certificate of
Cinemark Holdings, Inc.
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4
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.2(a)
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Indenture, dated as of
March 31, 2004, between Cinemark, Inc. and The Bank of New
York Trust Company, N.A. governing the
9
3
/
4
% senior
discount notes issued thereunder (incorporated by reference to
Exhibit 4.2(a) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
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4
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.2(b)
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Form of
9
3
/
4
% senior
discount notes (contained in the indenture listed as
Exhibit 4.2(a) above) (incorporated by reference to
Exhibit 4.2(b) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
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4
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.3(a)
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Indenture, dated as of
February 11, 2003, between Cinemark USA, Inc. and The Bank
of New York Trust Company of Florida, N.A. governing the
9% senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 10.2(b) to Cinemark
USA, Inc.s Annual Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
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4
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.3(b)
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First Supplemental Indenture,
dated as of May 7, 2003, between Cinemark USA, Inc., the
subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference from
Exhibit 4.2(i) to Cinemark USA, Inc.s Registration
Statement on
Form S-4/A
(File
No. 333-104940)
filed May 28, 2003).
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4
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.3(c)
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Second Supplemental Indenture
dated as of November 11, 2004, between Cinemark USA, Inc.,
the subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference to
Exhibit 4.2(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-047040,
filed March 28, 2005).
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4
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.3(d)
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Third Supplemental Indenture,
dated as of October 5, 2006, among Cinemark USA, Inc., the
subsidiaries of Cinemark USA, Inc. named therein, and The Bank
of New York Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 10.7 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
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4
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.3(e)
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Form of 9% Senior
Subordinated Note, Due 2013 (contained in the Indenture
listed as Exhibit 4.3(a) above) (incorporated by reference
to Exhibit 10.2(b) to Cinemark USA, Inc.s Annual
Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
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II-1
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Number
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Exhibit Title
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4
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.4
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Stockholders Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders party thereto
(incorporated by reference to Exhibit 4.4 to Cinemark
Holdings, Inc.s Registration Statement on Form S-1, File
No. 333-140390, filed February 1, 2007).
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4
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.5
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Registration Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders party thereto
(incorporated by reference to Exhibit 4.5 to Cinemark Holdings
Inc.s Registration Statement on Form S-1, File
No. 333-140390, filed February 1, 2007).
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**4
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.6
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Form of Director Nomination
Agreement among Cinemark Holdings, Inc. and the stockholders
party thereto.
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**5
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Opinion of Akin Gump Strauss
Hauer & Feld LLP.
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10
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.1(a)
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Management Agreement, dated
December 10, 1993, between Laredo Theatre, Ltd. and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(b) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
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10
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.1(b)
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First Amendment to Management
Agreement of Laredo Theatre, Ltd., effective as of
December 10, 2003, between CNMK Texas Properties, Ltd.
(successor in interest to Cinemark USA, Inc.) and Laredo Theatre
Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark,
Inc.s Registration Statement on
Form S-4,
File No.
333-116292,
filed June 8, 2004).
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10
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.2
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Amended and Restated Agreement to
Participate in Profits and Losses, dated as of March 12,
2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated
by reference to Exhibit 10.2 to Cinemark USA, Inc.s
Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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10
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.3
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License Agreement, dated
December 10, 1993, between Laredo Joint Venture and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
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10
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.4(a)
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Tax Sharing Agreement, between
Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a
Cinemark II, Inc. ), dated as of June 10, 1992
(incorporated by reference to Exhibit 10.22 to Cinemark
USA, Inc.s Annual Report on
Form 10-K,
File No.
033-47040,
filed March 31, 1993).
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10
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.4(b)
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Tax Sharing Agreement, dated as of
July 28, 1993, between Cinemark USA, Inc. and Cinemark
Mexico (USA) (incorporated by reference to Exhibit 10.10 to
Cinemark Mexico (USA)s Registration Statement on
Form S-4,
File No.
033-72114,
filed on November 24, 1993).
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+10
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.5(a)
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Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell
(incorporated by reference to Exhibit 10.14(a) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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+10
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.5(b)
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First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Lee Roy Mitchell (incorporated by
reference to Exhibit 10.1 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
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+10
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.5(c)
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Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Alan Stock
(incorporated by reference to Exhibit 10.14(b) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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+10
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.5(d)
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First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Alan W. Stock (incorporated by
reference to Exhibit 10.2 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
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+10
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.5(e)
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Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tim Warner
(incorporated by reference to Exhibit 10.14(c) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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+10
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.5(f)
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First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Timothy Warner (incorporated by
reference to Exhibit 10.3 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
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II-2
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Number
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Exhibit Title
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+10
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.5(g)
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Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Robert Copple
(incorporated by reference to Exhibit 10.14(d) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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+10
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.5(h)
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Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Rob Carmony
(incorporated by reference to Exhibit 10.14(e) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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+10
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.5(i)
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Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tandy Mitchell
(incorporated by reference to Exhibit 10.14(f) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
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+10
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.5(j)
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First Amendment to Employment
Agreement, dated January 25, 2007, between Cinemark, Inc.
and Robert Copple (incorporated by reference to Exhibit 10.5(j)
to Cinemark Holdings, Inc.s Registration Statement on Form
S-1, File No. 333-140390, filed February 1, 2007).
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10
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.6(a)
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Credit Agreement, dated as of
October 5, 2006, among Cinemark Holdings, Inc., Cinemark,
Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks
and other financial institutions or entities from time to time
parties to the Agreement, Lehman Brothers Inc. and Morgan
Stanley Senior Funding, Inc., as joint lead arrangers and joint
bookrunners, Morgan Stanley Senior Funding, Inc., as syndication
agent, BNP Paribas and General Electric Capital Corporation as
co-documentation agents, and Lehman Commercial Paper Inc., as
administrative agent (incorporated by reference to
Exhibit 10.5 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
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**10
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.6(b)
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First Amendment to Credit
Agreement dated as of March 14, 2007 among Cinemark
Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark
USA, Inc., the several banks and other financial institutions or
entities from time to time parties thereto, Lehman Brothers Inc.
and Morgan Stanley Senior Funding, Inc., as joint lead arrangers
and joint bookrunners, Morgan Stanley Senior Funding, Inc., as
syndication agent, BNP Paribas and General Electric Capital
Corporation, as co-documentation agents, and Lehman Commercial
Paper Inc., as administrative agent.
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10
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.6(c)
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Guarantee and Collateral
Agreement, dated as of October 5, 2006, among Cinemark
Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark
USA, Inc. and each subsidiary guarantor party thereto
(incorporated by reference to Exhibit 10.6 to Current
Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
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**+10
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.7(a)
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Cinemark Holdings, Inc. 2006 Long
Term Incentive Plan, dated December 22, 2006.
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**+10
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.7(b)
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Form of Stock Option Agreement.
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**#10
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.8
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Exhibitor Services Agreement,
dated as of February 13, 2007, by and between National
CineMedia, LLC and Cinemark USA, Inc.
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**10
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.9
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Third Amended and Restated Limited
Liability Company Operating Agreement, dated as of
February 12, 2007, by and between Cinemark Media, Inc.,
American Multi-Cinema, Inc., Regal CineMedia, LLC and National
CineMedia, Inc.
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*10
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.10(a)
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Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
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*10
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.10(b)
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First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
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*10
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.10(c)
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Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
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**10
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.10(d)
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Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
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II-3
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Number
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Exhibit Title
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*10
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.10(e)
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Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
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*10
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.11(a)
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Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
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*10
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.11(b)
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First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
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**10
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.11(c)
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Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
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**10
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.11(d)
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Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
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*10
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.11(e)
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Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
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*10
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.12(a)
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Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
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*10
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.12(b)
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First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
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*10
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.12(c)
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Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
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**10
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.12(d)
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Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
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*10
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.12(e)
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Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
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*10
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.13(a)
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Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
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*10
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.13(b)
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First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
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**10
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.13(c)
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Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
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**10
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.13(d)
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Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
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*10
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.13(e)
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Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
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*10
|
.14(a)
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Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
II-4
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.14(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
**10
|
.14(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14 at Folsom, CA.
|
|
**10
|
.14(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
*10
|
.14(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
*10
|
.15(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
*10
|
.15(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
**10
|
.15(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
**10
|
.15(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
*10
|
.15(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
*10
|
.16(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.16(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.16(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
**10
|
.16(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.16(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.17(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
*10
|
.17(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
**10
|
.17(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
II-5
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**10
|
.17(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
*10
|
.17(e)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
*10
|
.18(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
**10
|
.18(b)
|
|
First Amendment, dated as of
October 31, 1996, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.18(c)
|
|
Second Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.18(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
**10
|
.18(e)
|
|
Fourth Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.18(f)
|
|
Fifth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.19(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.20(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.20(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
**10
|
.20(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.20(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
II-6
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.20(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.21(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.21(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.21(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
**10
|
.21(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.21(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.22(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Sycal Properties, Inc.
(succeeded by Syufy Properties, Inc.), as landlord and Century
Theatres of California, Inc., as tenant, for Cinearts 5,
Pleasant Hill, CA.
|
|
*10
|
.22(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
**10
|
.22(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
*10
|
.22(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
*10
|
.22(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
*10
|
.23(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
*10
|
.23(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
**10
|
.23(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
**10
|
.23(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
*10
|
.23(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
*10
|
.24(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
II-7
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.24(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.24(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
**10
|
.24(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.24(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.25(a)
|
|
Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
**10
|
.25(b)
|
|
First Amendment, dated as of
April 15, 2005, to Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
**10
|
.25(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
*10
|
.25(d)
|
|
Third Amendment, dated as of
August 5, 2006, to Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
*10
|
.26(a)
|
|
Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
**10
|
.26(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
**10
|
.26(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
*10
|
.26(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
*10
|
.27(a)
|
|
Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
**10
|
.27(b)
|
|
First Amendment, dated as of
April 15, 2005, to Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
**10
|
.27(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
**10
|
.27(d)
|
|
Third Amendment, dated as of
August 5, 2006, to Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
*10
|
.28(a)
|
|
Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
II-8
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**10
|
.28(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
**10
|
.28(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
*10
|
.28(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
*10
|
.29(a)
|
|
Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
**10
|
.29(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
**10
|
.29(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
*10
|
.29(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
*10
|
.30(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Rancho Santa Fe 16, Las Vegas, NV.
|
|
*10
|
.30(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Rancho Santa Fe 16, Las Vegas, NV.
|
|
*10
|
.30(c)
|
|
Second Amendment, dated as of
September 30, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Rancho Santa Fe 16, Las Vegas, NV.
|
|
*10
|
.31(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.31(b)
|
|
First Amendment, dated as of
October 1, 1996, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.31(c)
|
|
Second Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
**10
|
.31(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.31(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.32(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
*10
|
.32(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
II-9
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**10
|
.32(c)
|
|
Second Amendment, dated as of
October 1, 2001, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
*10
|
.32(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
*10
|
.33(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
**10
|
.33(b)
|
|
First Amendment, dated as of
January 4, 1998, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
*10
|
.33(c)
|
|
Second Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
**10
|
.33(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
**10
|
.33(e)
|
|
Fourth Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
*10
|
.33(f)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
*10
|
.34(a)
|
|
Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.34(b)
|
|
First Amendment, dated as of
April 30, 2003, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.34(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
**10
|
.34(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.34(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.35(a)
|
|
Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
**10
|
.35(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
**10
|
.35(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
*10
|
.35(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
II-10
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.36(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
*10
|
.36(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.36(c)
|
|
Second Amendment, dated as of
October 1, 2001, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.36(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.36(e)
|
|
Fourth Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
*10
|
.36(f)
|
|
Fifth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.37(a)
|
|
Lease Agreement, dated as of
October 31, 1997, by and between Sycal Properties, Inc.
(succeeded by 150 Pelican LLC), as landlord and Century
Theatres, Inc., as tenant, for office building situated at
150 Pelican Way, San Rafael, California
|
|
**10
|
.37(b)
|
|
First Amendment, dated as of
December 1, 1998, to Lease Agreement, dated as of October 31,
1997, by and between Sycal Properties, Inc. (succeeded by
150 Pelican LLC), as landlord and Century Theatres, Inc.,
as tenant, for office building situated at 150 Pelican Way,
San Rafael, California
|
|
**10
|
.37(c)
|
|
Second Amendment, dated as of
October 4, 2006, to Lease Agreement, dated as of October 31,
1997, by and between Sycal Properties, Inc. (succeeded by
150 Pelican LLC), as landlord and Century Theatres, Inc.,
as tenant, for office building situated at 150 Pelican Way,
San Rafael, California
|
|
10
|
.38
|
|
Stock Purchase Agreement, dated as
of August 7, 2006, by and among Cinemark USA, Inc, Cinemark
Holdings, Inc., Syufy Enterprises LP, Century Theatres, Inc. and
Century Theatres Holdings, LLC (incorporated by reference to
Exhibit 10.1 to current Report on
Form 8-K,
File No, 000-47040, filed by Cinemark USA, Inc. with the
SEC on August 11, 2006)
|
|
**21
|
|
|
Subsidiaries of the registrant.
|
|
**23
|
.1
|
|
Consent of Deloitte &
Touche LLP.
|
|
**23
|
.2
|
|
Consent of Grant Thornton LLP.
|
|
**23
|
.3
|
|
Consent of Akin Gump Strauss
Hauer & Feld LLP (included in the opinion filed as
Exhibit 5 to this Registration Statement).
|
|
**23
|
.4
|
|
Consent of Deloitte &
Touche LLP.
|
|
24
|
|
|
Power of Attorney (included on the
signature page of Cinemark Holdings, Inc.s Registration
Statement on
Form S-1,
File No. 333-140390, filed February 1, 2007).
|
|
**99
|
.1
|
|
Consent of PricewaterhouseCoopers
LLP.
|
|
**99
|
.2
|
|
Consent of BIA Financial Network,
Inc.
|
|
**99
|
.3
|
|
Consent of National CineMedia,
LLC.
|
|
|
|
*
|
|
Filed herewith
|
**
|
|
Previously filed
|
#
|
|
Confidential treatment has been requested with respect to
certain portions of this exhibit. Omitted portions have been
filed separately with the Securities and Exchange Commission.
|
+
|
|
Management contract, compensatory plan or arrangement.
|
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Plano, State of Texas, on
April 20, 2007.
CINEMARK HOLDINGS, INC.
Alan W. Stock,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
*
Lee
Roy Mitchell
|
|
Chairman of the Board of Directors
and Director
|
|
April 20, 2007
|
|
|
|
|
|
/s/ ALAN
W. STOCK
Alan
W. Stock
|
|
Chief Executive Officer
(principal executive officer)
|
|
April 20, 2007
|
|
|
|
|
|
/s/ ROBERT
COPPLE
Robert
Copple
|
|
Executive Vice President;
Treasurer and Chief Financial Officer
(principal financial and
accounting officer)
|
|
April 20, 2007
|
|
|
|
|
|
*
Benjamin
D. Chereskin
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
*
James
N. Perry, Jr.
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
*
Robin
P. Selati
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
*
Vahe
A. Dombalagian
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
*
Peter
R. Ezersky
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
*
Enrique
F. Senior
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
*
Raymond
W. Syufy
|
|
Director
|
|
April 20, 2007
|
*
Joseph
E. Syufy
|
|
Director
|
|
April 20, 2007
|
|
|
|
|
|
|
|
*By:
|
|
/s/ MICHAEL
CAVALIER
Michael
Cavalier
Attorney-in-Fact
|
|
|
|
|
II-12
EXHIBIT
INDEX
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**1
|
|
|
Form of Underwriting Agreement.
|
|
2
|
.1
|
|
Stock Contribution and Exchange
Agreement, dated as of August 7, 2006, by and between
Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP
and Century Theatres Holdings, LLC (incorporated by reference to
Exhibit 10.2 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
|
|
2
|
.2
|
|
Contribution and Exchange
Agreement, dated as of August 7, 2006, by and among
Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell
Special Trust, Alan W. Stock, Timothy Warner, Robert Copple,
Michael Cavalier, Northwestern University, John Madigan,
Quadrangle Select Partners LP, Quadrangle Capital Partners A LP,
Madison Dearborn Capital Partners IV, L.P., K&E Investment
Partners, LLC 2004-B-DIF, Piola Investments Ltd.,
Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital
Partners LP (incorporated by reference to Exhibit 10.3 to
Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
|
|
**3
|
.1
|
|
Second Amended and Restated
Certificate of Incorporation of Cinemark Holdings, Inc. filed
with the Delaware Secretary of State on April 9, 2007.
|
|
**3
|
.2(a)
|
|
Amended and Restated Bylaws of
Cinemark Holdings, Inc. dated April 9, 2007.
|
|
**3
|
.2(b)
|
|
First Amendment to the Amended and
Restated Bylaws of Cinemark Holdings, Inc. dated April 16,
2007.
|
|
**4
|
.1
|
|
Specimen stock certificate of
Cinemark Holdings, Inc.
|
|
4
|
.2(a)
|
|
Indenture, dated as of
March 31, 2004, between Cinemark, Inc. and The Bank of New
York Trust Company, N.A. governing the
9
3
/
4
% senior
discount notes issued thereunder (incorporated by reference to
Exhibit 4.2(a) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
|
|
4
|
.2(b)
|
|
Form of
9
3
/
4
% senior
discount notes (contained in the indenture listed as
Exhibit 4.2(a) above) (incorporated by reference to
Exhibit 4.2(b) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
|
|
4
|
.3(a)
|
|
Indenture, dated as of
February 11, 2003, between Cinemark USA, Inc. and The Bank
of New York Trust Company of Florida, N.A. governing the
9% senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 10.2(b) to Cinemark
USA, Inc.s Annual Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
|
|
4
|
.3(b)
|
|
First Supplemental Indenture,
dated as of May 7, 2003, between Cinemark USA, Inc., the
subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference from
Exhibit 4.2(i) to Cinemark USA, Inc.s Registration
Statement on
Form S-4/A
(File
No. 333-104940)
filed May 28, 2003).
|
|
4
|
.3(c)
|
|
Second Supplemental Indenture
dated as of November 11, 2004, between Cinemark USA, Inc.,
the subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference to
Exhibit 4.2(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-047040,
filed March 28, 2005).
|
|
4
|
.3(d)
|
|
Third Supplemental Indenture,
dated as of October 5, 2006, among Cinemark USA, Inc., the
subsidiaries of Cinemark USA, Inc. named therein, and The Bank
of New York Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 10.7 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
|
|
4
|
.3(e)
|
|
Form of 9% Senior
Subordinated Note, Due 2013 (contained in the Indenture
listed as Exhibit 4.3(a) above) (incorporated by reference
to Exhibit 10.2(b) to Cinemark USA, Inc.s Annual
Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
|
|
4
|
.4
|
|
Stockholders Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders party thereto
(incorporated by reference to Exhibit 4.4 to Cinemark
Holdings, Inc.s Registration Statement on Form S-1, File
No. 333-140390, filed February 1, 2007).
|
|
4
|
.5
|
|
Registration Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders party thereto
(incorporated by reference to Exhibit 4.5 to Cinemark Holdings
Inc.s Registration Statement on Form S-1, File
No. 333-140390, filed February 1, 2007).
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**4
|
.6
|
|
Form of Director Nomination
Agreement among Cinemark Holdings, Inc. and the stockholders
party thereto.
|
|
**5
|
|
|
Opinion of Akin Gump Strauss
Hauer & Feld LLP.
|
|
10
|
.1(a)
|
|
Management Agreement, dated
December 10, 1993, between Laredo Theatre, Ltd. and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(b) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
|
|
10
|
.1(b)
|
|
First Amendment to Management
Agreement of Laredo Theatre, Ltd., effective as of
December 10, 2003, between CNMK Texas Properties, Ltd.
(successor in interest to Cinemark USA, Inc.) and Laredo Theatre
Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark,
Inc.s Registration Statement on
Form S-4,
File No.
333-116292,
filed June 8, 2004).
|
|
10
|
.2
|
|
Amended and Restated Agreement to
Participate in Profits and Losses, dated as of March 12,
2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated
by reference to Exhibit 10.2 to Cinemark USA, Inc.s
Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
10
|
.3
|
|
License Agreement, dated
December 10, 1993, between Laredo Joint Venture and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
|
|
10
|
.4(a)
|
|
Tax Sharing Agreement, between
Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a
Cinemark II, Inc.), dated as of June 10, 1992
(incorporated by reference to Exhibit 10.22 to Cinemark
USA, Inc.s Annual Report on
Form 10-K,
File No.
033-47040,
filed March 31, 1993).
|
|
10
|
.4(b)
|
|
Tax Sharing Agreement, dated as of
July 28, 1993, between Cinemark USA, Inc. and Cinemark
Mexico (USA) (incorporated by reference to Exhibit 10.10 to
Cinemark Mexico (USA)s Registration Statement on
Form S-4,
File No.
033-72114,
filed on November 24, 1993).
|
|
+10
|
.5(a)
|
|
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell
(incorporated by reference to Exhibit 10.14(a) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
+10
|
.5(b)
|
|
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Lee Roy Mitchell (incorporated by
reference to Exhibit 10.1 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
|
|
+10
|
.5(c)
|
|
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Alan Stock
(incorporated by reference to Exhibit 10.14(b) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
+10
|
.5(d)
|
|
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Alan W. Stock (incorporated by
reference to Exhibit 10.2 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
|
|
+10
|
.5(e)
|
|
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tim Warner
(incorporated by reference to Exhibit 10.14(c) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
+10
|
.5(f)
|
|
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Timothy Warner (incorporated by
reference to Exhibit 10.3 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
|
|
+10
|
.5(g)
|
|
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Robert Copple
(incorporated by reference to Exhibit 10.14(d) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
+10
|
.5(h)
|
|
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Rob Carmony
(incorporated by reference to Exhibit 10.14(e) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
+10
|
.5(i)
|
|
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tandy Mitchell
(incorporated by reference to Exhibit 10.14(f) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
|
|
+10
|
.5(j)
|
|
First Amendment to Employment
Agreement, dated January 25, 2007, between Cinemark, Inc.
and Robert Copple (incorporated by reference to Exhibit 10.5(j)
to Cinemark Holdings, Inc.s Registration Statement on Form
S-1, File No. 333-140390, filed February 1, 2007).
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
10
|
.6(a)
|
|
Credit Agreement, dated as of
October 5, 2006, among Cinemark Holdings, Inc., Cinemark,
Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks
and other financial institutions or entities from time to time
parties to the Agreement, Lehman Brothers Inc. and Morgan
Stanley Senior Funding, Inc., as joint lead arrangers and joint
bookrunners, Morgan Stanley Senior Funding, Inc., as syndication
agent, BNP Paribas and General Electric Capital Corporation as
co-documentation agents, and Lehman Commercial Paper Inc., as
administrative agent (incorporated by reference to
Exhibit 10.5 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
|
|
**10
|
.6(b)
|
|
First Amendment to Credit
Agreement dated as of March 14, 2007 among Cinemark
Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark
USA, Inc., the several banks and other financial institutions or
entities from time to time parties thereto, Lehman Brothers Inc.
and Morgan Stanley Senior Funding, Inc., as joint lead arrangers
and joint bookrunners, Morgan Stanley Senior Funding, Inc., as
syndication agent, BNP Paribas and General Electric Capital
Corporation, as co-documentation agents, and Lehman Commercial
Paper Inc., as administrative agent.
|
|
10
|
.6(c)
|
|
Guarantee and Collateral
Agreement, dated as of October 5, 2006, among Cinemark
Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark
USA, Inc. and each subsidiary guarantor party thereto
(incorporated by reference to Exhibit 10.6 to Current
Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
|
|
**+10
|
.7(a)
|
|
Cinemark Holdings, Inc. 2006 Long
Term Incentive Plan, dated December 22, 2006.
|
|
**+10
|
.7(b)
|
|
Form of Stock Option Agreement.
|
|
**#10
|
.8
|
|
Exhibitor Services Agreement,
dated as of February 13, 2007, by and between National
CineMedia, LLC and Cinemark USA, Inc.
|
|
**10
|
.9
|
|
Third Amended and Restated Limited
Liability Company Operating Agreement, dated as of
February 12, 2007, by and between Cinemark Media, Inc.,
American Multi-Cinema, Inc., Regal CineMedia, LLC and National
CineMedia, Inc.
|
|
*10
|
.10(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
|
|
*10
|
.10(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
|
|
*10
|
.10(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
|
|
**10
|
.10(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
|
|
*10
|
.10(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 14, Sacramento, CA.
|
|
*10
|
.11(a)
|
|
Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
|
|
*10
|
.11(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
|
|
**10
|
.11(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
|
|
**10
|
.11(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.11(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Laguna 16, Elk Grove, CA.
|
|
*10
|
.12(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
|
|
*10
|
.12(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
|
|
*10
|
.12(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
|
|
**10
|
.12(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
|
|
*10
|
.12(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Capitol 16, San Jose, CA.
|
|
*10
|
.13(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
|
|
*10
|
.13(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
|
|
**10
|
.13(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
|
|
**10
|
.13(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
|
|
*10
|
.13(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 10 Berryessa, San Jose, CA.
|
|
*10
|
.14(a)
|
|
Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
*10
|
.14(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
**10
|
.14(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14 at Folsom, CA.
|
|
**10
|
.14(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
*10
|
.14(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
December 1, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 14, Folsom, CA.
|
|
*10
|
.15(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
*10
|
.15(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**10
|
.15(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
**10
|
.15(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
*10
|
.15(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Cinedome 12, Henderson, NV.
|
|
*10
|
.16(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.16(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.16(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
**10
|
.16(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.16(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Park 12, Redwood City, CA.
|
|
*10
|
.17(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
*10
|
.17(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
**10
|
.17(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
**10
|
.17(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
*10
|
.17(e)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 8, North Hollywood, CA.
|
|
*10
|
.18(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
**10
|
.18(b)
|
|
First Amendment, dated as of
October 31, 1996, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.18(c)
|
|
Second Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.18(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
**10
|
.18(e)
|
|
Fourth Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.18(f)
|
|
Fifth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Plaza 10, S. San Francisco, CA.
|
|
*10
|
.19(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.19(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Freemont, CA.
|
|
*10
|
.20(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.20(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
**10
|
.20(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.20(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.20(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 7, Newark, CA.
|
|
*10
|
.21(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.21(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.21(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
**10
|
.21(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.21(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Cinema 16, Mountain View, CA.
|
|
*10
|
.22(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Sycal Properties, Inc.
(succeeded by Syufy Properties, Inc.), as landlord and Century
Theatres of California, Inc., as tenant, for Cinearts 5,
Pleasant Hill, CA.
|
|
*10
|
.22(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**10
|
.22(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
*10
|
.22(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
*10
|
.22(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinearts 5, Pleasant Hill, CA.
|
|
*10
|
.23(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
*10
|
.23(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
**10
|
.23(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
**10
|
.23(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
*10
|
.23(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 24, San Jose, CA.
|
|
*10
|
.24(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.24(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.24(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
**10
|
.24(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.24(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Cinedome 8, Napa, CA.
|
|
*10
|
.25(a)
|
|
Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
**10
|
.25(b)
|
|
First Amendment, dated as of
April 15, 2005, to Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
**10
|
.25(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
*10
|
.25(d)
|
|
Third Amendment, dated as of
August 5, 2006, to Lease Agreement, dated as of
April 10, 1998, by and between Dyer Triangle LLC, as
landlord and Century Theatres, Inc., as tenant, for Century 25
Union Landing, Union City, CA.
|
|
*10
|
.26(a)
|
|
Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
**10
|
.26(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
**10
|
.26(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
*10
|
.26(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
March 7, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Sparks, Sparks, NV.
|
|
*10
|
.27(a)
|
|
Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
**10
|
.27(b)
|
|
First Amendment, dated as of
April 15, 2005, to Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
**10
|
.27(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
**10
|
.27(d)
|
|
Third Amendment, dated as of
August 5, 2006, to Lease Agreement, dated as of
October 1, 1996, by and between Syufy Enterprises,
L.P.(succeeded by Stadium Promenade LLC), as landlord and
Century Theatres, Inc., as tenant, for Century Stadium 25,
Orange, CA.
|
|
*10
|
.28(a)
|
|
Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
**10
|
.28(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
**10
|
.28(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
*10
|
.28(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
July 1, 1996, by and between Synm Properties Inc.(succeeded
by Syufy Properties, Inc.), as landlord and Century Theatres,
Inc., as tenant, Century Rio 24, Albuquerque, NM.
|
|
*10
|
.29(a)
|
|
Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
**10
|
.29(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
**10
|
.29(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
*10
|
.29(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 3, 1996, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres, Inc., as tenant, for
Century 14, Roseville, CA.
|
|
*10
|
.30(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Rancho Santa Fe 16, Las Vegas, NV.
|
|
*10
|
.30(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Rancho Santa Fe 16, Las Vegas, NV.
|
|
*10
|
.30(c)
|
|
Second Amendment, dated as of
September 30, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of Nevada, Inc., as tenant, for
Rancho Santa Fe 16, Las Vegas, NV.
|
|
*10
|
.31(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.31(b)
|
|
First Amendment, dated as of
October 1, 1996, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.31(c)
|
|
Second Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
**10
|
.31(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.31(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century Stadium 16, Ventura, CA.
|
|
*10
|
.32(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
*10
|
.32(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
**10
|
.32(c)
|
|
Second Amendment, dated as of
October 1, 2001, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
*10
|
.32(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Northridge 14, Salinas, CA.
|
|
*10
|
.33(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
**10
|
.33(b)
|
|
First Amendment, dated as of
January 4, 1998, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
*10
|
.33(c)
|
|
Second Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
**10
|
.33(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
**10
|
.33(e)
|
|
Fourth Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P.), as landlord
and Century Theatres of Utah, Inc., as tenant, for
Century 16, Salt Lake City, UT.
|
|
*10
|
.33(f)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syut Properties,
Inc. (succeeded by Syufy Enterprises, L.P), as landlord and
Century Theatres of Utah, Inc., as tenant, for Century 16,
Salt Lake City, UT.
|
|
*10
|
.34(a)
|
|
Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.34(b)
|
|
First Amendment, dated as of
April 30, 2003, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.34(c)
|
|
Second Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
**10
|
.34(d)
|
|
Third Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
*10
|
.34(e)
|
|
Fourth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
April 17, 1998, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century
Larkspur, Larkspur, CA.
|
|
*10
|
.35(a)
|
|
Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
**10
|
.35(b)
|
|
First Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
**10
|
.35(c)
|
|
Second Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
*10
|
.35(d)
|
|
Third Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
August 1, 1997, by and between Syufy Enterprises, L.P., as
landlord and Century Theatres, Inc., as tenant, for Century Park
Lane 16, Reno, NV.
|
|
*10
|
.36(a)
|
|
Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
*10
|
.36(b)
|
|
First Amendment, dated as of
September 1, 2000, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.36(c)
|
|
Second Amendment, dated as of
October 1, 2001, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.36(d)
|
|
Third Amendment, dated as of
April 15, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.36(e)
|
|
Fourth Amendment, dated as of
September 29, 2005, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
*10
|
.36(f)
|
|
Fifth Amendment, dated as of
August 7, 2006, to Indenture of Lease, dated as of
September 30, 1995, by and between Syufy Enterprises, L.P.,
as landlord and Century Theatres of California, Inc., as tenant,
for Century 16, Sacramento, CA.
|
|
**10
|
.37(a)
|
|
Lease Agreement, dated as of
October 31, 1997, by and between Sycal Properties, Inc.
(succeeded by 150 Pelican LLC), as landlord and Century
Theatres, Inc., as tenant, for office building situated at
150 Pelican Way, San Rafael, California
|
|
**10
|
.37(b)
|
|
First Amendment, dated as of
December 1, 1998, to Lease Agreement, dated as of October 31,
1997, by and between Sycal Properties, Inc. (succeeded by
150 Pelican LLC), as landlord and Century Theatres, Inc.,
as tenant, for office building situated at 150 Pelican Way,
San Rafael, California
|
|
**10
|
.37(c)
|
|
Second Amendment, dated as of
October 4, 2006, to Lease Agreement, dated as of October 31,
1997, by and between Sycal Properties, Inc. (succeeded by
150 Pelican LLC), as landlord and Century Theatres, Inc.,
as tenant, for office building situated at 150 Pelican Way,
San Rafael, California
|
|
10
|
.38
|
|
Stock Purchase Agreement, dated as
of August 7, 2006, by and among Cinemark USA, Inc, Cinemark
Holdings, Inc., Syufy Enterprises LP, Century Theatres, Inc. and
Century Theatres Holdings, LLC (incorporated by reference to
Exhibit 10.1 to current Report on
Form 8-K,
File No, 000-47040, filed by Cinemark USA, Inc. with the
SEC on August 11, 2006)
|
|
**21
|
|
|
Subsidiaries of the registrant.
|
|
**23
|
.1
|
|
Consent of Deloitte &
Touche LLP.
|
|
**23
|
.2
|
|
Consent of Grant Thornton LLP.
|
|
**23
|
.3
|
|
Consent of Akin Gump Strauss
Hauer & Feld LLP (included in the opinion filed as
Exhibit 5 to this Registration Statement).
|
|
**23
|
.4
|
|
Consent of Deloitte & Touche
LLP.
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
|
24
|
|
|
Power of Attorney (included on the
signature page of Cinemark Holdings, Inc.s Registration
Statement on
Form S-1,
File No. 333-140390, filed February 1, 2007).
|
|
**99
|
.1
|
|
Consent of PricewaterhouseCoopers
LLP.
|
|
**99
|
.2
|
|
Consent of BIA Financial Network,
Inc.
|
|
**99
|
.3
|
|
Consent of National CineMedia,
LLC.
|
|
|
|
*
|
|
Filed herewith
|
**
|
|
Previously filed
|
#
|
|
Confidential treatment has been requested with respect to
certain portions of this exhibit. Omitted portions have been
filed separately with the Securities and Exchange Commission.
|
+
|
|
Management contract, compensatory plan or arrangement.
|
EXHIBIT
10.10(a)
LEASE
CENTURY THEATRES
Table of Contents
|
|
|
|
|
|
|
Page No.
|
|
Recitals
|
|
|
1
|
|
|
|
|
|
|
ARTICLE I: Definitions Exhibits
|
|
|
|
|
1.01 Attachments to Lease and Exhibits
|
|
|
1
|
|
1.02 Definitions
|
|
|
1
|
|
|
|
|
|
|
ARTICLE II: Premises Term Options Covenant of Title
|
|
|
|
|
2.01 Lease of Premises
|
|
|
2
|
|
2.02 Term of Lease
|
|
|
2
|
|
2.03 Option to Extend Lease Term
|
|
|
3
|
|
2.04 Covenant of Title
|
|
|
3
|
|
|
|
|
|
|
ARTICLE III: Use of Premises
|
|
|
|
|
3.01 Use
|
|
|
4
|
|
|
|
|
|
|
ARTICLE IV: Rent
|
|
|
|
|
4.01 Base Rent/Minimum Monthly Rent
|
|
|
4
|
|
4.02 Percentage Rent
|
|
|
4
|
|
4.03 Rent Payments
|
|
|
5
|
|
4.04 Place for Payment of Rent
|
|
|
5
|
|
4.05 Late Payment of Rent
|
|
|
5
|
|
|
|
|
|
|
ARTICLE V: Taxes, Assessments and Utilities
|
|
|
|
|
5.01 Impositions
|
|
|
5
|
|
5.02 Exceptions from Impositions; Charges in Lieu of
Impositions Proration of Taxes
|
|
|
6
|
|
5.03 Omitted
|
|
|
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 Landlords Acquisition of Insurance
|
|
|
8
|
|
6.05 Insurance Money and Other Funds Held In Trust
|
|
|
8
|
|
6.06 Application or Proceeds of Physical Damage Insurance
|
|
|
8
|
|
6.07 Cooperation for Insurance Proceeds
|
|
|
9
|
|
6.08 Waiver of Right of Recovery
|
|
|
9
|
|
|
|
|
|
|
ARTICLE VII: Maintenance, Repairs And Alterations
|
|
|
|
|
7.01 Alterations Changes
|
|
|
9
|
|
i
LEASE
CENTURY THEATRES
Table of Contents
|
|
|
|
|
|
|
Page No.
|
|
7.02 Repairs Maintenance
|
|
|
10
|
|
|
|
|
|
|
ARTICLE VIII: Environmental Matters
|
|
|
|
|
8.01 Definition
|
|
|
10
|
|
8.02 Tenants Responsibilities and Landlord Indemnity
|
|
|
10
|
|
8.03 Remedial Work
|
|
|
11
|
|
8.04 Maintenance of Premises
|
|
|
12
|
|
8.05 Landlords Responsibilities and Tenants Indemnity
|
|
|
12
|
|
8.06 Landlord Inspection
|
|
|
13
|
|
8.07 Effect of Termination
|
|
|
13
|
|
|
|
|
|
|
ARTICLE IX: Improvements
|
|
|
|
|
9.01 Tenants Signs
|
|
|
14
|
|
9.02 Hold Harmless
|
|
|
14
|
|
9.03 Permits; Compliance With Codes
|
|
|
14
|
|
9.04 Ownership
|
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14
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9.05 Control
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15
|
|
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ARTICLE X: Indemnity
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10.01 Indemnification
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|
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15
|
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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|
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15
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11.02 Notice to Landlord
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16
|
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|
|
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ARTICLE XII Encumbrance of Leasehold Estate
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|
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12.01 Leasehold Mortgages
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16
|
|
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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|
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16
|
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13.02 Future Mortgages
|
|
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16
|
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
|
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14.02 Notice to Other Party
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|
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17
|
|
14.03 Total
TakingEffect on Rent and Term
|
|
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17
|
|
14.04 Distribution of Award for Taking
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|
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17
|
|
14.05
Partial TakingRent Adjustments
|
|
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18
|
|
14.06 Partial Taking Option to Terminate
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|
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18
|
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
|
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15.01 Tenants Default
|
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18
|
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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|
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20
|
|
15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
|
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
|
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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|
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23
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18.03 Severability
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|
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23
|
|
18.04 Governing Law
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|
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23
|
|
18.05 Terminology
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|
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23
|
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18.06 Counterparts
|
|
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23
|
|
18.07 Binding Effect
|
|
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23
|
|
18.08 Captions
|
|
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23
|
|
18.09 Notice to Landlord and Tenant
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|
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23
|
|
18.10 Addresses for Notices to Landlord and Tenant
|
|
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24
|
|
18.11 Entire Agreement
|
|
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24
|
|
18.12 Sale or Transfer of Premises
|
|
|
24
|
|
18.13 Force Majeure
|
|
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25
|
|
18.14 Waiver
|
|
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25
|
|
18.15 Estoppel Certificate
|
|
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25
|
|
18.16 Number and Gender
|
|
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25
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|
18.17 No Holding Over
|
|
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25
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|
18.18 Mechanics Liens
|
|
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25
|
|
18.19 Relationship of Parties
|
|
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25
|
|
18.20 Time of the Essence
|
|
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26
|
|
18.21 Facsimile Copies
|
|
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26
|
|
18.22 Anti-Merger
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26
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Signature Page
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26
|
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iii
LEASE
CENTURY THEATRES
Table of Contents
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|
|
|
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Page No.
|
Exhibit A
|
|
Description of Premises
|
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A-l
|
Exhibit B
|
|
Site Plan of Premises
|
|
B-l
|
Exhibit C
|
|
Form of Memorandum
|
|
C-l
|
Exhibit D
|
|
Guaranty of Lease
|
|
D-l
|
iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined
in red..
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The
term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased Premises,
parking, driveways and such other improvements as may presently exist or be added.
The Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land
thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 Leased Premises.
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 and retains the right to develop the unimproved
portion of the Entire Premises so long as it does not interfere with Tenants 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 Tenants 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 (5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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 Landlords insurance or
liability.
C) Tenant is granted a non-exclusive easement for parking and ingress and egress on and over
the Entire Premises. The location of said easements may be changed at the sole discretion of the
Landlord so long as such change does not interfere with Tenants Permitted Use. Tenant shall be
responsible for all costs related to the Entire Premises exclusive of Landlords Buildings.
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 $158,333.33 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the sixth (6
th
) Lease Year and on the first
day of each fifth (5
th
) 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 Landlords
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 Entire Premises, or the rents
receivable therefrom, or any part thereof or any use thereon or any facility located therein or
used in connection therewith, whether or not any of the foregoing shall be a so-called real estate
tax expressly excluding, however, any other items arising directly or indirectly out of any act or
omission of Landlord, any of Landlords 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 Entire Premises and/or the Improvements on the
Entire 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 are assessed on any Buildings exclusive of the
Entire Premises, Tenant shall pay all such impositions. With respect to Impositions which by law may be
paid in installments over a period of time, Tenant 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 Tenant 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 Landlords
Buildings subject to the Installment Election, Landlords 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 Tenant had in fact made the Installment
Election. Landlord shall pay all
such real property taxes to the Tenant prior to delinquency. In the event Tenant fails to pay to
Landlord such real property taxes as provided herein, Landlord shall pay Tenant in addition
interest thereon at the rate of 18% per annum from the delinquency date until such payment has
been made.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a
tax shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy
or charge, measured or based, in whole or in part, on the Entire 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 Entire Premises were the only property of
Landlord subject to such taxes, or the income from operation of the Entire Premises were Landlords
only income, as the case may be. In the event of such assessment, Landlord would pay Tenant any
such assessment related to any Buildings other than the Leased Premises located on the Entire
Premises.
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 5.04. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.04.
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 Entire Premises including the Common Area but exclusive of Landlords buildings.
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 Tenants 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.
6
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 Entire Premises
(exclusive of the interior of Landlords Buildings), Leased Premises, Common Area and the
appurtenances thereto, including the sidewalks and alleyways adjacent thereto, with limits of
liability no less than Ten Million Dollars ($10,000,000) per occurrence and in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenants
Building (excluding foundations, footings and underground improvements) and personal property as
well as all Improvements on the Common area, (Landlords Buildings excluded), including, but not
limited to, signs, outdoor lighting fixtures and fences 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, but
including Builders Risk, to the extent of not less than the full replacement value thereof less any
deductible applicable to all of Tenants 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 Landlords 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 Tenants 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 proceeds to Landlord for, and
periodically during the course of, repair and restoration of Tenants 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 thirty (30) 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.
7
6.04 Landlords 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 XIV, 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 (B) (Physical Property Damage Insurance) the application of
insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article 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.
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 partys 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,
8
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
Tenants 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 partys 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 Landlords
written approval shall be first obtained.
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 Entire
Premises which shall include the Common Area, driveways, parking, landscaping, signs, fences,
lighting and any and all improvements (exclusive of Landlords Buildings) in first class condition
and make such structural and non-structural, ordinary and extraordinary, foreseen and unforeseen
repairs such that the Entire Premises (exclusive of Landlords Buildings) 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
9
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 Tenants 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 Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the environment by Tenant, its agents, employees, contractors or invitees (referred
to as Tenants 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 Tenants 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 Tenants 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 Tenants 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.
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C) In addition to Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up, containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants Environmental Acts,
then, Landlord, at Landlords 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
partys 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
11
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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or disposed
of, on, in, under or about the Entire Premises, the Common Area, or any other portion of the
Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of any
law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
12
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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B)
All liabilities of Landlord and Tenant, respectively, under this
Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenants Signs.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
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(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however,
Tenant shall be liable for attorneys fees only
if single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and
Tenant without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall become
the property of Landlord
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
14
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 Tenants 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
Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any
corporation which operates motion picture theatres and has a book net worth of not less than
$30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
15
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 Landlords 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.
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.
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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, Tenants obligation to pay
Rent shall terminate on, and Tenants 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
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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 Tenants Award. In the event of a Taking, Tenant may make a separate claim
with respect to lost business, lost profits, goodwill, moving expenses and other related damages
against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01 Tenants 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 Tenants 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 Landlords Remedies Cumulative. Landlord shall have the following remedies set forth in
subsections (A) through (G) below if Tenant commits a default, except as provided in Section
15.03. These remedies are not exclusive and may be exercised concurrently or successively, they
are cumulative in addition to any remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and
thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its
election to declare the Lease Term hereunder ended and to terminate this Lease, and unless this
Lease be expressly terminated, 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 Landlords prior
right, during any continuance of Tenants default, to relet the Premises or a portion or portions
thereof.
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C) Termination of Lease and Lessees 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 Tenants 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.
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)
Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any time, by
reason of Tenants 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.
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15.03 Landlords 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 cuared 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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:
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(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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G)
Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises which
are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as defined
herein), or (ii) which are inconsistent with the obligations of
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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.
16.02 Tenants 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 Tenants 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) Tenants Obligation to Repair. If the Premises or the improvements to the Comman Area are
damaged by any peril after the Commencement date of the Lease, Tenant shall restore the Leased
Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to substantially the
same condition in which the Leased Premises or the Common Area Improvements 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 Tenants cost and expense (which may be paid from insurance proceeds
available as above provided) and Tenant shall diligently commence and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts,
with contractors and suppliers.
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
Tenants property or any inconvenience or annoyance caused by such restoration.
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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 18.10 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 Tenants 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 18.10 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 Landlords 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.
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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.
18.10
Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or transfer of,
title in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of
Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other charges
payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that
the assignee assumes in writing Landlords 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 Tenants 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.
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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 partys 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 Tenants 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 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 Tenants 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.
25
18.22 Anti-Merger. The voluntary or otherwise surrender of this Lease by Tenant, or a mutual
cancellation of this Lease shall not work a merger but shall at the option of Landlord either:
A) Terminate any existing subleases or subtenancies; or
B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
Executed as of the date first written above.
TENANT:
CENTURY THEATRES OF CALIFORNIA, INC.,
a California Corporation
By:
/s/ Joseph Syufy
Print Name: Joseph Syufy
Title: V.P.
LANDLORD:
SYUFY ENTERPRISES
a California Limited Partnership
By:
/s/ Raymond W. Syufy
Print Name: Raymond W. Syufy
Title: G.P.
26
EXHIBIT
10.11(a)
LEASE
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Co-tenancy
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2.01 Lease of Premises
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3
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2.02 Term of Lease
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3
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2.03 Option to Extend Lease Term
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4
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2.04 Covenant of Title
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4
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ARTICLE III: Use of Premises
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3.01 Use
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5
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ARTICLE IV: Rent
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4.01 Annual Fixed Rent
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6
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4.02 Percentage Rent
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6
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4.03 Rent Payments
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7
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4.04 Place for Payment of Rent
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7
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4.05 Late Payment of Rent
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7
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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8
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions
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8
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5.03 Contest of Taxes
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9
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5.04 Utilities
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9
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5.05 Personal Property Taxes
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9
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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9
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6.02 Types of Required Insurance
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9
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6.03 Terms of Insurance
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10
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6.04 Landlords Acquisition of Insurance
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11
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6.05 Insurance Money and Other Funds Held In Trust
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11
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6.06 Application or Proceeds of Physical Damage Insurance
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11
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i
LEASE
Table of Contents
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6.07 Cooperation for Insurance Proceeds
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12
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6.08 Waiver of Right of Recovery
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12
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
Alterations Changes
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13
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7.02 Repairs
Maintenance
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13
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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14
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8.02 Tenants Responsibilities and Landlord Indemnity
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14
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8.03 Remedial Work
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16
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8.04 Maintenance of Premises
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17
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8.05 Landlords Responsibilities and Tenants Indemnity
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17
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8.06 Landlord Inspection
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18
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8.07 Effect of Termination
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18
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ARTICLE IX: Improvements
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9.01 Tenant Improvements
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19
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9.02 Hold Harmless
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19
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9.03 Permits, Compliance With Codes
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19
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9.04 Ownership of Improvements
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19
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9.05 Control
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20
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ARTICLE X: Indemnity
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10.01 Landlords Indemnity
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20
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10.02 Tenants Indemnity
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20
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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21
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11.02 Notice to Landlord
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21
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ARTICLE XII: Mortgage Subordination
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12.01 Existing Mortgages
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21
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12.02 Future Mortgages
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21
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ARTICLE XIII: Condemnation Eminent Domain
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ii
LEASE
Table of Contents
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Page No.
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13.01 Definitions
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22
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13.02 Notice to Other Party
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23
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13.03 Total Taking Effect on Rent and Term
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23
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13.04 Distribution of Award for Taking
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23
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13.05 Partial Taking Rent Adjustments
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23
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13.06 Partial Taking Option to Terminate
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23
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13.07 Separate Tenants Award
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24
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ARTICLE XIV: Default
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14.01 Tenants Default
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24
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14.02 Landlords Remedies Cumulative
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24
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14.03 Landlords Default
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26
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14.04 Waiver of Redemption
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26
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14.05 Dispute Resolution
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14.06 Attorney Fees
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27
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ARTICLE XV: Representations and Warranties
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15.01 Landlords Representations and Warranties
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27
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15.02 Tenants Representations and Warranties
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28
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ARTICLE XVI: Damage or Destruction
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16.01 Repairs, Alterations and Further Improvements
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28
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16.02 Prompt Repair
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30
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16.03 Rent Adjustment
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30
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16.04 Damage During Last Ten (10) Years of Term
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30
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ARTICLE XVII: Miscellaneous
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17.01 Limitation on Liability
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30
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17.02 Brokers
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30
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17.03 Modification
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31
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17.04 Severability
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31
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17.05 Governing Law
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31
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17.06 Terminology
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31
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17.07 Counterparts
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31
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17.08 Binding Effect
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31
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17.09 Captions
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31
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iii
LEASE
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17.10 Notice to Landlord and Tenant
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31
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17.11 Addresses for Notices to Landlord and Tenant
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32
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17.12 Entire Agreement
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32
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17.13 Sale or Transfer of Premises
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33
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17.14 Force Majeure
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33
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17.15 Waiver
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33
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17.16 Estoppel Certificate
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33
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17.17 Number and Gender
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34
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17.18 No Holding Over
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34
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17.19 Mechanics Liens
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34
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17.20 Relationship of Parties
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34
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17.21 Time of the Essence
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34
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17.22 Facsimile Copies
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34
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17.23 Anti-Merger
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34
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Signature Page
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Exhibit A
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A Description of Entire Premises
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Exhibit B
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A Site Plan of Entire Premises
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Exhibit C
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Form of Memorandum of Lease
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Exhibit D
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Guaranty of Lease
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of December 1,1995, by and between Syufy Enterprises, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, CA,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in a parcel of land described on Exhibit A attached hereto.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS
DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the tract of land hereinafter referred to as Entire Premises.
EXHIBIT B a site plan of the Entire Premises showing (i) the location of the Tenants
Building, outlined in red.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease.
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean July 1, 1996.
1
The term Common Facilities or Common Areas shall include the parking areas, streets,
driveways, curb cuts, access facilities, aisles, sidewalks, malls, landscaped areas, and other
common and service areas within the Entire Premises with the improvements thereon, whether or not
shown on Exhibit B.
The term Effective Date shall mean December 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to pay
interest under this Lease at the Default Rate.
The term Entire Premises shall mean the tract of land described on Exhibit B.
The Term Initial Rent Due Date shall mean July 1, 1996.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises or Premises shall mean Tenants Building outlined in red on
Exhibit B and the land thereunder and the rights, easements and privileges granted to Tenant in
this Lease.
The term Mortgage shall mean any mortgage or deed of trust or other instrument in the
nature thereof evidencing a security interest in the Entire Premises or any part thereof.
The term Number of Tenant Working Days shall mean 365 days.
The
term Number of Term Years shall mean 20 years.
The
term Option Periods shall mean two (2) successive separate periods
of five (5) years each.
The
term Percentage Rate shall mean eight percent (8%).
The term Planned Use shall mean the construction and operation of a motion picture theatre,
and for such activities in connection therewith as are customary and usual at other motion picture
theatres operated by Tenant including, without limitation, the operation of vending machines and
video games; operation of concession stands; sale of movie related T-shirts, toys and memorabilia,
rentals of auditoriums to third parties and other such activities on the Premises.
The term Prime Rate shall be the per annum interest rate from time to time publicly
announced by Citibank, N.A., New York, New York as its base rate. The Prime
2
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 Tenants Building shall mean the building to be erected by Tenant at Tenants sole
cost.
The term term of this Lease or term hereof shall mean the initial term, as provided in the
article captioned Term and any renewal or extensions thereof
ARTICLE II
PREMISES TERM OPTIONS COVENANT OF TITLE
2.01 Lease of Premises.
A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms
and conditions contained herein.
B) The Premises are being leased in their as is condition subject to Article VIII herein
captioned Environmental Matters.
C) Landlord shall deliver possession of the Premises to Tenant on the Effective Date.
D) During the Lease Term, Landlord grants to Tenant and its employees, agents, customers and
other invitees a non-exclusive easement for free parking and ingress and egress on and over the
Entire Premises for Tenant, Tenants employees, agents, contractors, customers and invitees.
Tenant shall be responsible for all costs associated with the Entire Premises exclusive of any
Landlords Buildings that may be constructed thereon. The location of said easements may be
changed at the sole discretion of the Landlord so long as such change does not interfere with
Tenants Permitted Use.
2.02 Term of Lease.
Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
3
The
Initial Term of this Lease shall begin on the
Commencement Date and shall terminate twenty (20) years thereafter and shall terminate on the last day of the calendar month
during which the date which is twenty (20) years after the Commencement Date occurs. References
herein to the Lease Term shall mean the Initial Term of this Lease or the Initial Term as
extended under Section 2.02.
2.03 Option to Extend Lease Term.
A) Tenant may, at Tenants 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 (5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants rights to the Renewal
Term are subject to:
(1) This Lease being in full force and effect on the last day of the Initial Term or the then
current Renewal Term, as applicable.
(2) Compliance with the following procedure for exercising the option in question:
(a) At least nine (9) months before the last day of the Initial Term, or the then current
Renewal Term, as the case may be, Tenant shall give Landlord written notice exercising the option.
(b) Each party shall, at the request of the other, execute a memorandum acknowledging the
fact that the option in question has been exercised. If an option is properly exercised by Tenant,
the failure of Landlord to execute such memorandum shall not invalidate such option or the
exercise thereof.
(3) Tenant is not in default (meaning the breach of any obligation hereunder and failure to
cure that breach within the time permitted in Section 14.01) at time of the exercise of the
renewal and at the commencement of the renewal term.
2.04 Covenant of Title; Authority and Quiet Possession; Transfer of Title.
(A) Landlord represents and warrants to Tenant that Landlord has full right and lawful
authority to enter into and perform Landlords obligations under this Lease for the term hereof,
and has good an marketable title to the Entire Premises in fee simple.
4
(B) Landlord shall give Tenant prior written notice before commencing any work upon the Entire
Premises, and shall cause all work to be performed by Landlord to be conducted in such a manner
that does not unreasonably interfere with Tenants customers or its business operations. Tenant
shall give Landlord prior written notice before commencing any work upon the Premises, and shall
cause all work to be performed by Tenant to be conducted in such a manner that the same does not
unreasonably interfere with the other tenants customers or their business operations.
(C) Exterior Common Facilities shall consist of all driveways, parking areas, utilities and
utility lines, service areas, including loading and unloading areas, landscape areas, if any,
lighting facilities and equipment, and any and all other exterior facilities upon or below the
Entire Premises designed for use by or benefit of the occupants of the Entire Premises.,
(D) Maintenance of Entire Premises At all times during the Term, Tenant shall keep and
maintain the Exterior Common Facilities in the Entire Premises and Tenants Building in good order
and repair and in a clean and safe condition, reasonably free of debris. The lighting for the
Exterior Common Facilities shall be turned on by Tenant on each day that business is conducted on
the Premises at or about the same time that the municipality turns on street lights, and same
shall be kept lighted for one (1) hour after all Tenants close for business. Tenants obligation
hereunder shall included maintaining the parking areas of the Entire Premises free of potholes and
assuring that they are properly coated and sealed and striped as needed. Tenant shall make any and
all additions to and all alterations and repairs in, on and about the Exterior Common Facilities,
which may be required by, and shall otherwise observe and comply with, all public laws, ordinances
and regulations from time to time applicable to the Exterior Common Facilities. Tenant shall
indemnify and save harmless Landlord from and against all actions, claims and damages by reason of
Tenants failure to comply with and perform its obligations under this section.
(E) Tenants Liens Tenant will not permit the Entire Premises to become subject to any
mechanics, laborers or materialmens lien on account of labor or material furnished to Tenant or
claimed to have been furnished to Tenant in connection with work of any character performed or
claimed to have been performed on the Entire Premises by or at the direction or sufferance of
Tenant; provided, however, Tenant shall have the right to contest in good faith and with
reasonable diligence the validity of any such lien or claimed lien and on final determination of
the lien or claim for the lien, Tenant will immediately pay any judgment rendered with all proper
costs and charges, and will, at its own expense, have the lien released and any judgment
satisfied.
ARTICLE III
USE OF PREMISES
3.01
Use
.
A) The Premises may be used for the Planned Use no other purpose.
5
B) Landlord shall agree and consent to such utility and other easements encumbering the
Premises or benefiting the Premises and encumbering the Fee Parcels and/or the Leasehold Parcel as
Tenant may reasonably require for its use and occupancy of the Premises.
C) Landlord agrees that no use of the Entire Premises shall be permitted which is
inconsistent with the operation of the Planned Use. Landlord further agrees not to permit or allow
any portion of the Entire Premises to be used by any other tenant, subtenant, licensee, or
occupant (including Landlord) for the exhibition of commercial movies or as a commercial movie
theater complex.
ARTICLE IV
RENT
4.01 Annual Fixed Rent.
A) Beginning on the Initial Rent Due Date, Tenant shall pay to Landlord during the Lease Term
Annual Fixed Rent in the amount of $729,744.00. The Annual Fixed Rent shall be payable in advance in
twelve (12) equal monthly installments. The Annual Fixed Rent shall be subject to adjustment
every five (5) years after the Initial Rent Due Date as set forth in Section 4.01 (B) below.
B) The Annual Fixed Rent shall apply from the Rent Commencement Date through the end of
the fifth (5
th
) Lease Year of the Term. The Annual Fixed Rent shall be increased (but never decreased) on
the first day of the sixth (6
th
) Lease Year and
on the first day of each fifth (5
th
) Lease Year thereafter
during the Term by a percentage equal to the percentage of increase from the base period (as
hereinafter defined in this Section) of the United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for all Urban Consumers, Sacramento, Subgroup All Items,
(1982-84+100) (the Consumers Price Index; provided however, in no event shall the Annual Fixed
Rent be increased by an amount that is less than ten (10%) greater than the Annual Fixed Rent payable
before the adjustment date in question.
In the event that the Consumer Price Index is not available, the successor or substitute
index, shall be used for the computations herein set forth. In the event that the Consumer Price
Index or such successor or substitute index is not published, a reliable governmental or other
non-partisan publication evaluating the information theretofore used in determining the Consumer
Price Index shall be used by Landlord for the computations herein set forth. For the purposes of
the computations herein set forth, the basis for any substitute or successor index or such
governmental or non-partisan publication shall be converted to a basis of 100 only in the event
that the basis used in such index or publication is less than 100.
4.02 Percentage Rent.
In addition to the payment of Annual Fixed Rent, Tenant shall pay to Landlord for each Lease
Year during the Term of this Lease, as Percentage Rent a sum equal to
the amount by which 8% of
the Gross Sales for such Lease Year exceeds the Annual Fixed Rent which is payable for such Lease
6
Year equal to the quotient obtained by dividing the annual fixed rate for such Lease year by the
percentage rate. For the purpose of computing the Annual Percentage for the first Lease Year, the
Gross sales and the annual fixed rate percentage for the partial calendar month, if any, preceding
the first Lease Year shall be includable in the Annual Fixed Rate and Gross Sales for the first
Lease Year.
Gross Sales shall mean all box office receipts, and receipts from sales of goods,
merchandise, beverages, food, vending machines and video games. Gross Sales shall exclude credits
and refunds made with respect to admissions or other sales; all federal, state, county and city
admission taxes, sales taxes and other similar taxes now or hereafter imposed whether such taxes
are collected from customers separately from the selling price of admission tickets or absorbed
therein, and actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or Pass Admissions including EBF charges on Pass Admissions. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental
of vending machines, pay telephones or other amusement machines shall be deducted from Gross
Sales.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
office of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with the
delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales .
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If
it is determined as a result of such audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due any payable with interest at
the annual rate of 18% from the date when said payment should have been made until paid. Any
information gained from such statements or inspection shall be confidential and shall not be
disclosed other than to carry out the purposes hereof.
4.03 Rent Payments. Rent and other sums to be paid by Tenant shall be payable in lawful money
of the United States of America. All payments shall be made by Tenant to Landlord without notice
or demand.
4.04 Place for Payment of Rent. The Annual Rent and any other charges required to be paid by
Tenant to Landlord shall be sent to Landlord at its principal place of business, or such other
address as Landlord may direct in writing.
4.05 Late Payment of Rent. In the event that any monthly installment of rent is not paid
within ten (10) days after such payment is past due, Tenant shall pay Landlord interest on such
unpaid rent at the rate of eighteen percent (18%) per annum computed from the date such rent
installment was due until the date actually paid.
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ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES
5.01 Impositions.
A) The term Impositions shall mean all real estate taxes, duties or assessments (special or
otherwise), water and sewer rents, whether ordinary or extraordinary, general or special, foreseen
or unforeseen, of any kind and nature whatsoever, which, at any time during the Lease Term, shall
be assessed or levied, or be attributable in any manner to the Entire Premises, or the rents
receivable therefrom, or any part thereof or any use thereon or any facility located therein or
used in connection therewith, whether or not any of the foregoing shall be a so-called real estate
tax expressly excluding, however, any such items arising directly or indirectly out of any act or
omission of Landlord, any of Landlords predecessors in title or any other person occurring prior
to the commencement of the Term. From and after the Initial Rent Due Date, Tenant shall pay when
due all Impositions (exclusive of Landlords Buildings, if any) assessed, levied or attributable to
the Entire Premises and/or the Improvements on the Entire Premises (exclusive of Landlords
Buildings, if any).. All Impositions or installments thereof payable with respect to the tax year
in which this Lease shall commence, and all Impositions or installments thereof with respect to the
tax year in which this Lease shall terminate, shall be pro-rated on a daily basis; provided,
however, that assessments or escape assessments assessed as a result of this Lease and/or the
construction of Tenant Improvements by Tenant shall not be prorated and shall be paid solely by
Tenant; and provided further that assessments attributable to Tenant Improvements made in the final
year of the Lease shall be paid solely by Tenant if Tenant demolishes the Tenant Building.
B) In the event Tenant fails to pay such real property taxes as provided herein, Landlord
may, but shall not be required to, pay the same, and any amount so paid by Landlord shall
immediately thereafter become due to Landlord from Tenant as Additional Rent with interest thereon
at the rate of 18% per annum from the date of Landlords payment plus any fine, penalty, interest
or cost which is levied by the taxing authority for such late payment.
C) Landlord will pay, before the last day on which payment may be made without penalty or
interest, all Impositions which shall be levied against Landlords Buildings, if any.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the
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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 Landlords only income, as the case
may be.
5.03 Contest of Taxes. Tenant at its sole cost and expense may by appropriate legal
proceedings conducted in good faith and with due diligence, contest the amount or validity or
application, in whole or in part, of any Imposition or lien therefor, or any other lien,
encumbrance or charge against the Premises arising from work done or materials provided to or for
Tenant. Tenant shall give Landlord reasonable notice of, and information pertaining to, such
contest and regular progress reports with respect thereto. Landlord shall cooperate with any
effort pursued by Tenant in accordance with this Section 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.03.
5.04
Utilities
. Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Entire Premises
exclusive of Landlords Buildings, if any. Any utility improvements presently serving the Entire
Premises shall be maintained, repaired and replaced by Tenant, at Tenants expense.
5.06 Personal Property Taxes. During the term of this Lease, Tenant shall pay before
delinquency any and all personal property taxes levied or assessed against any personal property
located upon the Premises. If Tenant fails to timely pay such taxes and a lien is filed against
the Premises, Landlord may discharge such lien, if Tenant fails to discharge such lien within ten
(10) days following Tenants receipt of notice from Landlord, including without limitation
reasonable attorneys fees, together with interest at the rate of eighteen percent (18%) per annum
from the date of expenditure, such additional rent being due and payable within ten (10) days of
notice thereof.
ARTICLE VI
INSURANCE
6.01 Acquisition of Insurance Policies. Tenant shall, at its sole cost and expense, procure
and maintain, or cause to be procured and maintained, during the entire Term the insurance
described in this Section (or its then available equivalent), and shall name Landlord and any
other parties requested by Landlord as an additional insured.
6.02 Types of Required Insurance. Tenant shall procure and maintain the following:
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A) Commercial General Liability Insurance. Commercial general liability insurance insuring
against injuries or damages to persons or property sustained in, on or about the Entire Premises,
Premises, Common Area and the appurtenances thereto, including the sidewalks and alleyways
adjacent thereto, with limits of liability no less than Five Million Dollars ($5,000,000) per
occurrence and in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenants
Building (excluding foundations, footings and underground improvements) as well as any and all
improvements on the Common Area and personal property insured in the name of Landlord and Tenant
against damage or destruction by fire and the perils commonly covered under the extended coverage
endorsement (with vandalism and malicious mischief coverage) including Builders Risk but excluding
earthquake and flood to the extent of not less than 100% of the full replacement cost thereof less
any deductible applicable to all of Tenants 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 Landlords consent, which consent is not to be unreasonably withheld or delayed. The
proceeds of such insurance in case of loss or damage shall be held in trust and applied on account
of the obligation of Tenant to repair and/or rebuild the Leased Premises pursuant to the Article
captioned Damage Clause to the extent that such proceeds are required for such purpose. The
insurance required to be carried by Tenant under this paragraph may be covered under a so-called
blanket policy covering other operations of Tenant and its affiliates. Upon written request,
Tenant shall name Landlord and any parties requested by Landlord and the holder of the first
mortgage on Tenants Building pursuant to a standard mortgage clause with respect to the foregoing
hazard insurance, provided such holder agrees with Tenant in writing to disburse such insurance
proceeds to Landlord for, and periodically during the course of, repair and restoration of Tenants
Building as set forth in this Lease.
6.03 Terms of Insurance. The policies required under Section 6.02 shall name Landlord as
additional insured. Tenant shall provide to Landlord certificates of insurance and copies of
policies obtained by Tenant hereunder promptly upon the request of Landlord. Further, all policies
of insurance described in Section 6.02 shall:
A) Be written as primary policies not contributing with and not in excess of coverage that
Landlord may carry.
B) Contain an endorsement providing that the amount of coverage will not be reduced with
respect to Landlord except after twenty (20) days prior written notice from insurance company to
Landlord and such coverage may not be canceled with respect to Landlord except after thirty (30)
days prior written notice from insurance company to Landlord.
C) Expressly provide that Landlord shall not be required to give notice of accidents or
claims and that Landlord shall have no liability for premiums.
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D) Be written by insurance companies having a Bests rating of A- or better, and such
insurance companies shall be reasonably acceptable to Landlord.
6.04 Landlords Acquisition of Insurance. If Tenant at any time during the Term fails to
procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord shall
have the right to procure the same and to pay any and all premiums thereon, and any amounts paid
by Landlord in connection with the acquisition of insurance shall be immediately due and payable
as additional rent, and Tenant shall pay to Landlord upon demand the full amount so paid and
expended by Landlord. Any policies of insurance obtained by Landlord covering physical damage to
the Premises shall contain a waiver of subrogation against Tenant if and to the extent such waiver
is obtainable and if Tenant pays to Landlord on demand the additional costs, if any, incurred in
obtaining such waiver.
6.05 Insurance Money and Other Funds Held in Trust. All insurance money or proceeds received
by the Tenant and/or Landlord shall be held in trust by Landlord and, except as provided otherwise
in Section 6.06, shall be applied as follows:
First, for the purpose of defraying the cost of repairing, restoring, replacing and/or
rebuilding any structure or improvement on or in the Premises as required as provided in Section
6.06 hereof; and Second, if the damaged or destroyed structure or improvement is not repaired,
restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed of as provided
in Section 6.06. Any of said funds in the hands of the Tenant at the end of the Term hereof shall
be disposed of as set forth in Section 6.06 (A).
6.06 Application or Proceeds of Physical Damage Insurance. In case of any insurance policies
as described in Section 6.02 (B) (Physical Property Damage Insurance) the application of insurance
proceeds from damage or loss to property shall be determined in part in accordance with Article XVI
hereof and, in the event of any such repair, replacement, restoration or rebuilding, the Tenant and
Landlord shall apply the proceeds of the insurance collected to the cost of such work upon
certificate of satisfactory progress and/or completion in form satisfactory to Tenant and Landlord
by the licensed architect or engineer in charge of the work. Any amounts payable to Tenant or any
Affiliate of Tenant for work or services performed or materials provided as part of any such
repair, replacement, restoration or rebuilding shall not exceed competitive rates for such services
or materials and Tenant shall, upon request of Landlord, make available to Landlord and its
representatives all books and records of Tenant relating to such work, services and materials. Upon
completion of such repair, replacement, restoration or rebuilding in accordance with the provisions
of this Lease, and the full payment therefor (so no liens, encumbrances or claims with respect
thereto can be asserted against the Premises, this Lease, Landlord or Tenant), any insurance
proceeds received by the Tenant or Landlord with respect to the damage or destruction involved, and
not used, shall be and remain the property of Landlord.
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such insurance
proceeds or condemnation awards received and held by the Tenant and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
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(1) First, Landlord shall be awarded an amount sufficient to remove any improvements not
repaired and to return the Property to the level of adjacent streets (grade level); and
(2) Second, any remainder shall be paid to Landlord.
6.07 Cooperation for Insurance Proceeds. Landlord and Tenant shall each cooperate with the
other in order to obtain the largest possible recovery and execute any and all consents and other
instruments and take all other actions reasonably necessary or desirable to effectuate the same and
cause such proceeds to be paid as hereinbefore provided. Notwithstanding anything to the contrary
contained in this Lease, neither party shall carry any insurance concurrent in coverage and
contributing in the event of loss with any insurance required to be furnished by the other
hereunder if the effect of separate insurance would be to reduce the protection or the payment to
be made under such partys 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 Tenants
Building or land or improvements adjoining the Premises owned or leased by Landlord shall (if it
can be so written and does not result in a material additional premium) include provisions denying
to the insurer subrogation rights against the other party and any fee or leasehold mortgage to the
extent such rights have been waived by the insured prior to the occurrence of damage or loss. If
the waiver of subrogation otherwise is not effective, each party covenants that it will obtain for
the benefit of the other party an express waiver of any right of subrogation which the insurer of
such party may acquire against the other party by virtue of the payment of any such loss covered
by such insurance. In the event either party is by law, statute, governmental regulation,
economically unleasible or other factor beyond such partys reasonable control unable to obtain a
waiver of the right of subrogation for the benefit of the other party, then, during any period of
time when such waiver is unobtainable, said party shall be deemed not to have released any
subrogated claim of its insurance carrier against the other party, and during the same period of
time the other party shall be deemed not to have released the party who has been unable to obtain
such waiver from any claims they or their insurance carriers may assert which otherwise would have
been released pursuant to this Section. In the event that either party is unable to obtain such
waiver of the right of subrogation for the benefit of the other party, such party shall, within
thirty (30) days of receiving notice of such inability, give the other party written notice of
such inability.
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ARTICLE VII
MAINTENANCE, REPAIRS AND ALTERATIONS
7.01 Alterations Changes.
A) At any time and from time to time during the Lease Term, Tenant may, at its sole expense,
make any alterations, additions or changes, whether structural or nonstructural, to any portion or
all of any Improvements which may exist at any time and from time to time on any portion of the
Premises, and may, at its option, construct new Improvements on the Premises, or remove or
demolish Improvements on the Premises, provided that all such alterations or changes in
Improvements and new Improvements shall be performed in a first-class manner and must comply with
all laws, zoning regulations and ordinances, and any conditions on permits issued pursuant
thereto. If the change, alteration or addition is structural or exterior in nature Landlords
written approval shall be first obtained, which approval shall not be unreasonably withheld.
B) Tenant shall at all times keep the Entire Premises, Premises or any part thereof, free and
clear of all liens and claims for labor or material and free and clear of all attachments,
executions and notices.
C) Upon termination of this Lease, Tenant may, at its option, remove any personal property
and trade fixtures including, but not limited to theatre seats, projection and sound equipment,
snack bar equipment and computers.
7.02 Repairs Maintenance.
A) Tenant shall, at its sole cost and expense, maintain and repair the Entire Premises and
Tenants Building and all improvements on the Entire Premises exclusive of Landlords Buildings if
any and including all exterior lighting and signs.
B) Tenant shall also be responsible for any losses or damages resulting to Landlords
Buildings, if any. from any materials, substances or liquids which are leaked or discharged from
any area outside Landlords Buildings, if any, unless such leakage or discharge is caused by
Landlord or Landlords agents or employees.
Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlords request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such payment has been made.
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ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01 Definition. For purposes of this Article VIII, the term Hazardous Material means (a) any
substance, product, waste or other material of any nature whatsoever which is or becomes listed,
regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq. (RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean
Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste Control Act, Health and
Safety Code Section 25100, et seq.; the California Hazardous Substance Account Act, Health and
Safety Code Section 25330, et seq.; the California Safe Drinking Water and Toxic Enforcement Act,
Health and Safety Code Section 25249.5, et seq.; California Health and Safety Code Section 25280,
et seq. (Underground Storage of Hazardous Substances); the California Hazardous Waste Management
Act, Health and Safety Code Section 25170.1, et seq.; California Health and Safety Code Section
25501, et seq. (Hazardous Materials Response Plans and Inventory); or the California Porter-Cologne
Water Quality Control Act, Water Code Section 13000, et seq., all as amended, or any other federal,
state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, as now or at any time hereafter in effect; (b) any
substance, product, waste or other material of any nature whatsoever which may give rise to
liability under any of the above statutes or under any statutory or common law theory based on
negligence, trespass, intentional tort, nuisance or strict liability or under any reported
decisions of a state or federal court; (c) petroleum or crude oil, other than petroleum and
petroleum products contained within regularly operated motor vehicles; (d) asbestos; (e) subsurface
gas; (f) urea formaldehyde foam insulation; (g) poly chlorinated byphenyls (PCBs); and freon and
other chloroflurocarbons.
8.02 Tenants 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
Tenants (or its agents, employees, contractors or invitees) acts or omissions brought
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upon, stored, used, generated or released into the environment by Tenant, its agents, employees,
contractors or invitees (referred to as Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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
15
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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up, containment, restoration, removal or other remedial work (Remedial Work) is required
(a) under any applicable federal, state or local law or regulation, (b) by any judicial, arbitral
or administrative order, (c) to comply with any agreements affecting the Premises or (d) to
maintain the Premises in a standard of environmental condition which presents no risk to safety or
health, prevents the release of any hazardous materials to adjacent property and otherwise is
consistent with the prudent ownership of property of the character of the Premises and/or Tenants
Building and if such Remedial Work is required as a direct result of Tenants Environmental Acts,
then Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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
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payable within thirty (30) days of Landlords 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 Tenants
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 Landlords 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 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released into the environment or disposed of, on, in, under or about the Entire
Premises, the Common Area, or any other portion of the Premises by Landlord, its agents,
employees, tenants, contractors or invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
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beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants business. All sums reasonably
disbursed, deposited or incurred by Landlord in connection therewith, including, but not limited
to, all costs, expenses and actual attorneys fees, shall be due and payable by Tenant to
Landlord, as an item of additional rent, on demand by Landlord, together with interest thereon at
the rate often percent (10%) per annum.
8.07 Effect of Termination.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the best of Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
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B) All liabilities of Landlord and Tenant, respectively, under this Article VIII,
accrued as of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenant Improvements. Tenant at its sole cost and expense shall complete all the required
on-site and off-site improvements, including all signs, required for the development of the Entire
Premises. In addition Tenant shall construct a motion picture theater building on the Premises
containing approximately sixty thousand (60,000) square feet with sixteen auditoriums. Landlord
will provide Tenant with a site and building allowance of $4,992,180.00. The site and building
allowance will be paid by Landlord to Tenant the latter of July 1, 1996 or the date Tenant opens to
the public for business.
9.02 Hold Harmless. Except to the extent attributable to the intentional or negligent acts or
omissions of Landlord or Landlords agents, employees, contractors, tenants, or invitees, Tenant
shall indemnify, protect, defend and hold harmless Landlord and the Premises from and against all
claims and liabilities arising by virtue of or relating to construction of by Tenant of Tenants
Building or Improvements or repairs made at any time to the Premises including repairs,
restoration and rebuilding and all other activities of Tenant on or with respect to the Premises.
If Tenant is required to defend any action or proceeding pursuant to this Section to which action
or proceeding Landlord is made a party, Landlord shall also be entitled to appear, defend, or
otherwise take part in the matter involved, at its election, by counsel of its own choosing, and
to the extent Landlord is indemnified under this Section, Tenant shall bear the cost of Landlords
defense, including attorneys fees; provided, however, Tenant shall be liable for attorneys fees
only if single legal counsel (or a single firm of legal counsel) cannot represent both Landlord
and Tenant without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership of Improvements.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and
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improvements thereto or replacements thereof and all appurtenant fixtures, machinery and equipment
installed therein excluding moveable trade fixtures and personal property of Tenant, shall become
the property of Landlord, unless and to the extent Tenant elects to remove any of the foregoing
pursuant to Section 9.04 (B).
B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord and the foregoing shall
remain the property of the Tenant at the expiration or earlier termination of the Lease. In
addition, Tenant shall have the right if Tenant so elects by giving written notice to Landlord of
such election at any time before ninety (90) days prior to the end of the Term (including any
renewals or extensions) hereof to remove any other Improvements and all additions, alterations and
improvements thereto or replacements thereof erected, constructed, or installed on the Premises.
The removal of any of the foregoing shall be completed within thirty (30) days following the end of
the Term hereof (including any renewals thereof or any earlier termination permitted by this Lease.
9.07 Control. Notwithstanding anything to the contrary in this Lease, during the Term of this
Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01 Landlords Indemnity. Except to the extent attributable to the intentional and negligent
acts or omissions of Landlord and its agents, employees, tenants, licensees and contractors,
Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel reasonably
approved by Landlord) and save Landlord (and its successors, assigns and any successor fee owners
of the Premises), and all of their directors, officers, employees and agents, hereinafter referred
to as Landlord Indemnities, from and against any claims, demand, damages, injuries, costs,
expenses, losses, liabilities, causes of action, interest, fines, charges and penalties (including
reasonable legal fees and expenses in enforcing this indemnity and hold harmless), directly or
indirectly arising out of or attributable to (i) any intentional or negligent act or omission of
Tenant, its agents, employees, licensees, invitees or contractors on the Leased Premises,
occurring within the Leased Premises or (ii) arising from Tenants or its employees use of the
Leased Premises.
10.02 Tenants Indemnity. Except to the extent attributable to the intentional and negligent
acts or omissions of Tenant and its agents, employees, tenants, licensees and contractors,
Landlord shall indemnify, pay and protect, defend and hold harmless (with counsel reasonably
approved by Tenant) and save Tenant (and its successors, assigns and subletees), and all of their
directors, officers, employees and agents, hereinafter referred to as Tenant Indemnities, from
and against any claims, demand, damages, injuries, costs, expenses, losses, liabilities, causes of
action, interest, fines, charges and penalties (including reasonable legal fees and expenses in
enforcing this indemnity and hold harmless), directly or indirectly arising out of or attributable
to (i) any intentional or negligent act or omission of Landlord, its agents, employees, licensees,
invitees on the Entire Premises or contractors, occurring within the Entire Premises, or (ii)
arising from Landlords use of the Entire Premises.
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ARTICLE XI
ASSIGNMENT AND SUBLETTING
11.01 Assignment and Subletting.
A) Tenant may assign the Lease and may sublease a portion or all of the Premises, subject to
Landlords approval which shall not be unreasonably withheld, provided Tenant remains liable for
all Tenant obligations under this Lease, and any sublease shall be subject to all the provisions
of this Lease. Landlord shall be entitled to all rent from any assignment or sublease in excess of
the Annual Fixed Rent set forth in this Lease.
B) Any assignment of this Lease or any sublease of a portion or all of the Premises shall be
subject to the terms and conditions of this Lease.
C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without Landlords consent, assign this Lease (a) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (b) to Tenants Parent Corporation, or (e) to any corporation which
acquires 50% or more of the issued and outstanding voting stock (or such lesser percentage as shall
be sufficient to acquire voting control) of Tenant or of Tenants Parent Corporation, provided that
such corporation duly and validly then guarantees the performance of the obligations under this
Lease.
11.02 Notice to Landlord. Tenant shall give notice to Landlord in writing of any assignment of
the Lease ten (10) days prior to such event.
ARTICLE XII
MORTGAGE SUBORDINATION
12.01 Existing Mortgages. If there is an existing mortgage or deed of trust (Mortgage) lien
affecting the interest of Landlord in the Premises or in any other part of the Entire Premises,
then Landlord shall obtain and shall deliver to Tenant within fifteen (15) days after the
Effective Date, a non-disturbance and attornment agreement in a form reasonably acceptable to such
lender, Landlord and Tenant, executed by the Mortgagee (as defined below), wherein the Mortgagee
shall agree to recognize the interest of Tenant and abide by the terms of this Lease in the event
of any judicial foreclosure, private sale or deed in lieu of foreclosure, including the right to
quiet enjoyment of the Premises, without any condition, limitation or restriction.
12.02 Future Mortgages. The rights of Tenant under this Lease shall be, at the option of
Landlord, either subordinate or superior to any future mortgage on Landlords interest in the
Premises
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in favor of an institutional lender not affiliated with Landlord. Provided however, that as a
condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of trust
and their successors and assigns (the Mortgagee) shall agree to recognize the interest of Tenant
and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.
ARTICLE XIII
CONDEMNATION EMINENT DOMAIN
13.01 Definitions. The following definitions apply in construing provisions of this Lease
relating to a taking of or damage to all or any part of the Entire Premises or Improvements or
Parking or any interest in them by eminent domain or inverse condemnation:
A) Taking means that taking or damaging, including severance damage, by eminent domain or
by inverse condemnation for any public or quasi-public use under any statute. The transfer of
title may be either a transfer resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation,
in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. The
Taking shall be considered to take place as of the date on which the right to compensation and
damages accrues under the law applicable to the Premises, unless the condemnor also takes actual
physical possession of the Premises or a part thereof, in which case the date of Taking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues or the date physical possession is taken by the condemnor.
B) Total Taking means the Taking of the fee title to all the Premises and the Improvements
on the Premises, which shall be considered to include any offsite improvements effected by Tenant
to serve the Premises or the improvements or the parking on the Entire Premises.
C) Partial Taking means any Taking (including any damaging) of a portion of the Premises,
the Common Area, or any Improvements or parking thereon which is not a Total Taking.
D) Notice of Intended Taking means any notice or notification on which a reasonably prudent
man would rely and which he would interpret as expressing an existing intention of Taking as
distinguished from a mere preliminary inquiry or proposal. It includes, but is not limited to, the
service of a condemnation summons and complaint on a party to this Lease. The notice is considered
to have been received when a party to this Lease receives from the condemning agency or entity a
Notice of Intended Taking, in writing, containing a description or map of the Taking reasonably
defining the extent of the Taking.
E) Award means compensation paid for the Taking, whether pursuant to judgment or by
agreement or otherwise.
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13.02 Notice to Other Party. The party hereto receiving any notice of the kinds specified
below shall promptly give the other party notice of the receipt, contents, and date of the notice
received:
A) Notice of Intended Taking;
B) Service of any legal process relating to condemnation of the Premises or improvements;
C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or
D) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer
in lieu of condemnation.
13.03 Total Taking Effect on Rent and Term. On a Total Taking, Tenants obligation to pay
Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the date of
Taking, at which time this Lease shall terminate.
13.04 Distribution of Award for Taking. On a Taking, all sums, including, but not limited to,
damages and interest awarded for the value of the real estate taken, shall be apportioned and paid
by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any for the Fair Market Value of all Land, buildings
and other improvements on the Entire Premises and all Severance Damages.
B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost profits,
relocation expenses and fixtures; and
C)
To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.
13.05 Partial Taking Rent Adjustments. On a Partial Taking, the Lease shall remain in full
force and effect covering the remaining Premises, except that the total Rent as otherwise provided
herein shall be reduced in the same ratio as the percentage of the area of the Premises or the
parking taken bears to the total area of the Premises or the parking.
13 06 Partial Taking Option to Terminate. Notwithstanding anything herein to the contrary,
in the event of a Partial Taking, if more than thirty-three percent (33%) of the Building or
thirty-three (33%) of the parking is taken by condemnation or sold under the threat of
condemnation, then Tenant may terminate this Lease as of the date the condemning authority takes
title or possession, whichever occurs first, by delivering written notice to the other within ten
(10) days after receipt of written notice
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of such taking (or in the absence of such notice, within ten (10) days after the condemning
authority takes possession).
13.07 Separate Tenants Award. In the event of a Taking, Tenant may make a separate claim
with respect to lost business, lost profits, goodwill, moving expenses, fixtures and relocation
expenses against the acquiring governmental Agency.
ARTICLE XIV
DEFAULT
14.01 Tenants Default. The occurrence of any of the following shall constitute a default or
event of default by Tenant:
A) Failure to pay Annual Fixed Rent or any other monetary amount when due as provided herein,
if the failure continues for ten (10) days after first written notice has been given to Tenant by
Landlord;
B) Failure to perform any of Tenants non-monetary obligations under this Lease, provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure
each such default. If Tenant cannot reasonably cure such default within said thirty (30) day
period, Tenant shall not be in default of this Lease if Tenant commences to cure the breach within
the thirty (30) day period and diligently and in good faith continues to cure the breach.
14.02 Landlords Remedies Cumulative. Landlord shall have the following remedies set forth in
subsections (A) through (G) below if Tenant commits a default, except as provided in Section
15.03. These remedies are not exclusive and may be exercised concurrently or successively, they
are cumulative in addition to any remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and
thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a
24
receiver, or any execution of any decree obtained in any action to recover possession of the
Premises, or any re-entry, shall not be construed as an election to terminate this Lease unless
Landlord shall, in writing, expressly exercise its election to declare the Lease Term hereunder
ended and to terminate this Lease, and unless this Lease be expressly terminated, such re-entry or
entry by Landlord, whether had or taken under summary proceedings or otherwise, shall not be
deemed to have absolved or discharged Tenant from any of its obligations and liabilities for the
remainder of the Lease Term. Notwithstanding anything to the contrary or other provisions of this
Section 14.02(B), Tenant shall have the right to sublet the Premises, assign its interest in the
Lease, or both, subject to Landlords prior right, during any continuance of Tenants default, to
relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees 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 Tenants failure to perform his obligations under the Lease or which, in the
ordinary course of things, would be likely to result therefrom.
D) Definitions. As used herein, the following phrases shall be interpreted as follows:
(1) The worth, at the time of the award, as used in subsections 14.02(C)(1) and (2) above,
is to be computed by allowing interest at the maximum lawful rate. The worth, at the time of the
award, as referred to in subsection 14.02(C)(3) above, is to be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award,
plus one percent (1%).
(2) As used herein, the term time of award shall mean either the date upon which Tenant
pays to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of entry
of any determination, order, or judgment of any court or other legally constituted body
determining the amount recoverable, whichever first occurs.
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E) Surrender. Promptly after notice of termination, Tenant shall surrender and vacate the
Premises and all improvements in broom-clean condition, and Landlord may re-enter and take
possession of the Premises and all remaining improvements and eject all parties in possession or
eject some and not others, or eject none. Termination under subsection 14.02(C) shall not relieve
Tenant from the payment of any sum due to Landlord or from any claim for damages previously accrued
or then accruing against Tenant.
F) Appointment of Receiver. If Tenant defaults under Section 14.02(C), Landlord shall have
the right to have a receiver appointed to collect rent from any subtenants. Neither the filing of
a petition for the appointment of a receiver nor the appointment itself shall constitute an
election by Landlord to terminate this Lease.
G) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in
default under Section 14.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants default, pays any sum or does any act that requires the payment of any
sum, the sum paid by Landlord shall be immediately reimbursed from Tenant to Landlord, together
with interest at eighteen percent (18%) per annum computed from the date of such expenditure until
the date of reimbursement by Tenant.
14.03 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any
amount due from Landlord against the next Rent payment due under this Lease.
14.04 Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being dispossessed or
removed from the Premises upon the termination of this Lease because of default by Tenant
hereunder.
14.05 Dispute Resolution. Landlord and Tenant desire by provisions of this Section 14.05 to
establish procedures to facilitate the informal and inexpensive resolution of any dispute arising
out of this Lease by mutual cooperation and without resort to litigation. To accomplish this
objective,
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Landlord and Tenant agree to follow the procedures set forth below if and when a dispute arises
between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written description
of the alleged breach by the other party. This description shall explain the nature of the
complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act. The party receiving the letter of complaint must respond in writing within ten (10) days
with an explanation, including references to the relevant parts of the Lease and a response to the
proposed solution. Within ten (10) days of receipt of this response, the parties must meet and
discuss options for resolving the dispute. The complaining party must initiate the scheduling of
the resolution meeting.
B) Mediation. A settlement conference shall be held within thirty (30) days of the
unsuccessful resolution meeting or as soon as practical thereafter.
C) Arbitration. With respect to disputes which the parties have been unable to resolve
informally or by mediation, the parties agree to submit the dispute for final and binding
arbitration if the dispute has not otherwise been settled. The parties agree that the arbitration
must be initiated within one (1) year after the date of the written description of the alleged
breach and that the failure to initiate arbitration within the one (1) year period constitutes an
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated for
the purposes of this section by demand therefor being sent by certified mail to the other party,
which notice shall contain a description of the dispute, the amount involved and the remedies
sought. The parties shall have the right to representation by counsel throughout the arbitration
proceedings. Arbitration shall be conducted under the Commercial Arbitration Rules of the American
Arbitration Association.
14.06 Attorneys Fees. Should any action or proceeding, be commenced between the parties to
this Lease concerning said Premises, this Lease, or the rights and duties of either in relation
thereto, the party, Landlord, or Tenant, prevailing in such action or proceeding shall be
entitled, in addition to such other relief as may be granted in the action or proceeding, to a
reasonable sum as and for its attorneys fees therein which shall be determined by the
arbitrator(s) hearing such action or proceeding.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES
15.01 Landlords 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 Landlords 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.
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C) To the best of Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or permit or suffer to be created any liens or encumbrances on the
Premises which are (i) not specifically stated in writing to be junior to this Lease, or any New
Lease (as defined herein), or (ii) which are inconsistent with the obligations of Landlord
hereunder, and Landlord shall, at or prior to the commencement of the Term, cause the Premises to
be free of all liens and encumbrances. Title to the Premises shall be free of all Objected
Exceptions.
15.02 Tenants 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 Tenants obligations under this Lease are legally binding, do not require the
consent of any other parties and do not violate the provisions of any agreement to which Tenant is
a party.
C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets.
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.01 Repairs. Alterations and Further Improvements.
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A) Tenants Obligation to Repair. In the event of damage to or destruction of the
Tenants Building or any Improvements on or to the Premises to be covered by the insurance
described in Article 6:
(1) Damages of Less Than Fifty Percent (50%) of Replacement Cost. If the cost of repairing or
reconstructing the Tenants Building or Improvements to the condition and form prior to such damage
or destruction is not in excess of Fifty percent (50%) of the then new replacement cost of the
Improvements and such repairs or reconstruction of any such damage or destruction can be made under
then existing laws, ordinances, statutes or regulations of any governmental authorities applicable
thereto (or can be so made with minor and non-material changes to the former condition and form of
property damaged or destroyed), Tenant shall effect, and Landlord and Tenant agree that the funds
derived from insurance acquired pursuant to Article 6 shall be made available to effect, such
repair and reconstruction of the structure or improvement so damaged or destroyed to substantially
its condition prior to said damage or destruction with such alterations thereto as Tenant shall
reasonably determine prudent or valuable under the circumstances, including any changes required to
comply with applicable law, with the then prevailing construction practices applicable to the
Premises. Tenant shall be responsible for all costs in excess of Insurance proceeds available All
such work shall be carried on in accordance with Drawings prepared by a licensed architect or
architects approved by Landlord (acting reasonably) if such an architect is reasonably required,
given the scope and nature of the work. In disbursing insurance proceeds the Tenant and Landlord
may rely upon and accept the certified determinations of such architect with respect to estimated
costs, awarding of contracts, sufficiency of bonds, progress of construction, interpretation of
plans and specifications, compliance with same, and completion of construction. No extras or
changes in Drawings shall be made by Tenant without first giving written notice of such changes to
Landlord and obtaining Landlords approval thereof (which approval shall not be unreasonably
withheld or delayed).
(2) Damage in Excess of Fifty Percent
(50%)
. If the cost of repairing or
reconstructing said damage or destruction to its former condition and form is in excess of the
Fifty percent (50%) provided in subparagraph (A)(1) of this Section 16.01, or if such cost is less
than Fifty percent (50%), but such reconstruction or rebuilding cannot be made under then existing
laws, ordinances, statutes or regulations of any governmental authority applicable thereto (and
cannot be so made with minor and non-material changes to the former condition and form of the
property damaged or destroyed), and, in any such event, the parties hereto are unable during a
period of ninety (90) days after the determination by Tenant with respect to such damage or
destruction to agree in writing on a construction program, then, at Tenants sole option, the Term
shall end as of the date of such damage or destruction, provided that Tenant notifies Landlord of
its election to exercise such termination option within such ninety (90) day period. If, however,
such reconstruction or rebuilding can be made under such existing laws, ordinances, statutes and
regulations (or can be so made with minor and non-material changes to the former condition and
form of the property damaged or destroyed), but the cost of so repairing or reconstructing such
damage or destruction is in excess of the Fifty percent (50%) provided for in subparagraph (A)(1)
of this Section 16.01, Tenant shall have the absolute right to treat such damage as under
subparagraph (A)(1) of this Section 16.01 as if the damage or destruction met the description
thereof set forth in the first sentence of that Section if Tenant (i) gives
29
notice to the effect to Landlord within such ninety (90) days period after Tenants determination
with respect to said damage or destruction; and (ii) promptly demonstrates to the reasonable
satisfaction of any Leasehold Mortgagee (if any) that it can provide the funds required or that
will be required under the provisions of subparagraph (A)(1) of this Section 16.01 to effect such
repair or restoration, whereupon the provisions of said subparagraph (A) of this Section 16.01
shall be fully applicable to such damage or destruction.
16.02 Prompt Repair. If Tenant, pursuant to the terms hereof, is obligated or elects to
repair, replace, reconstruct or rebuild any structures, improvements or other property as
hereinabove provided, the same shall be effected at Tenants cost and expense (which may be paid
from insurance proceeds available as above provided and subject to the provisions of subparagraph
(B) of Section 16.01), and Tenant shall diligently commence and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts,
with contractors and suppliers.
16.03 Rent Adjustment. This Lease and the Term shall not terminate or be terminated because of
damage to or destruction of any structure or improvement on or in the Premises except under and in
accordance with the provisions hereinabove contained. If such damage or destruction occurs and
renders all or a portion of the Improvements on the Premises untenantable, Rent shall thereafter
not abate but continue for as long as and to the extent such Improvements are untenantable.
16.04 Damage During Last Two (2) Years of Term. If there occurs during the last ten (10) years
of the Initial Term or at any time during a Renewal Period damage or destruction to any
Improvement on or in the Premises and the costs of repairing, restoring, replacing or rebuilding
the same exceed Five Thousand Dollars ($500,000), then Tenant may elect to terminate the Term and,
in such event, Tenant shall give notice to Landlord of its election within sixty (60) days after
its determination of the amount of damage, and the Term shall thereupon terminate as of the date
of such notice.
ARTICLE XVII
MISCELLANEOUS
17.01 Limitation on Liability. The liability of Landlord hereunder or in connection with the
Premises or Entire Premises shall be limited to its interest in the Entire Premises and in no
event shall any other assets of Landlord be subject to any claim arising out of or in connection
with the Entire Premises.
17.02 Brokers. Landlord and Tenant each represent to the other that neither has any
obligation to any broker or finder in connection with this transaction, and that no fee or
commission is due any broker, finder, or similar person in connection herewith. Landlord and
Tenant each indemnifies the
30
other and agrees to hold the other harmless from and against any and all claims, demands,
liabilities, lawsuits, costs, and expenses (including reasonable attorneys fees) for any fee or
commission due to any other broker, finder, or similar person in connection with this transaction
and arising out of the act of the indemnifying party.
17.03 Modification. No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless the same is in writing and signed by the party against which the enforcement
of such modification, waiver, amendment, discharge, or change is or may be sought.
17.04 Severability. In the event any term, covenant, condition, provision, or agreement
contained herein is held to be invalid, void, or otherwise unenforceable, by any court of
competent jurisdiction, such holding shall in no way affect the validity or enforceability of any
other term, covenant, condition, provision, or agreement contained herein.
17.05 Governing Law. This Lease and the obligations of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of California and
each provision of this Lease shall be valid and enforceable to the fullest extent permitted by
Law.
17.06 Terminology. All personal pronouns used in this Lease, whether used in the masculine,
feminine, or neuter gender, shall include all other genders; the singular shall include the plural
and vice versa. Business Day means other than a Saturday, Sunday, or holiday. In the event that
the time for performance of an act under this Lease falls on a Saturday, Sunday, or holiday, the
date for performance of such act shall be extended to the next Business Day.
17.07 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original agreement, and all of which shall constitute one agreement by
each of the parties hereto.
17.08 Binding Effect. Except as otherwise herein provided, this Lease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.
17.09 Captions. Article and section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend, or describe the
scope of this Lease or any provisions hereof. All reference to section numbers herein shall mean
the sections of this Lease.
17.10 Notices to Landlord and Tenant
A) Except as otherwise in this Lease provided, a bill, demand, statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 17.11 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the identity and
address of Tenants
31
Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully prepaid), addressed to Landlord to the addresses set forth in
Section 17.11 below or at such other address(es) as Landlord shall designate by notice given as
herein provided. If Tenant is notified of the identity and address of Landlords mortgagee or
beneficiary under a deed of trust, or ground or underlying lessor, Tenant shall give such party
notice of any default by Landlord hereunder by certified or private express mail carrier.
C) The time of the rendition of such bills or statements and of the giving of such consents,
notices, demands, requests or communications (collectively notice) by Tenant or Landlord shall
be deemed to be the earlier of (i) the date received by Tenant with respect to a notice to Tenant,
and the date received by Landlord with respect to a notice to Landlord (ii) if the notice is sent
by certified mail, five (5) days after the same is mailed, or (iii) if the notice is sent by
private overnight courier (e.g., Federal Express or similar courier), one (1) day after the same
is delivered to or picked up by such courier. Rejection or refusal to accept a notice, request,
demand, or the inability to deliver same because of a changed address of which no notice was given
shall be deemed to be a receipt of the notice, request or demand sent.
17.11 Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Real Estate Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
17.12 Entire Agreement. This Lease and the exhibits attached set forth the entire agreement
between the parties. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever as to any matter. Any prior agreements, conversations,
or writings are merged herein, superseded hereby, and extinguished.
32
17.13 Sale or Transfer of Premises. Landlord shall promptly notify Tenant in writing of
any sale or transfer of the Premises or any assignment of Landlords 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 Landlords interest in this Lease or any change in, or transfer of,
title in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of
Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other charges
payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been notified
in writing of such transfer, assignment, or change in title, and given satisfactory proof thereof,
and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in the
meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease and
convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that the
assignee assumes in writing Landlords obligations hereunder accruing on and after the effective
date of the assignment.
17.14 Force Majeure. In the event that Tenant shall be delayed or hindered in or prevented
form the performance of any act other than Tenants obligation to make payments of rent, and other
charges required hereunder, by reason of strikes, lockouts, unavailability of materials, failure
of power, restrictive governmental laws or regulations, riots, insurrections, the default of
Landlord, war, or other reason beyond its control, then performance of such act shall be excused
for the period of the delay, and the period for the performance of such act shall be extended for
a period equivalent to the period of such delay. Notwithstanding the foregoing, lack of funds
shall not be deemed to be a cause beyond the control of Tenant.
17.15
Waiver
. No term, covenant, or condition of this Lease can be waived except in
writing, signed by the party making the waiver, Landlord or Tenant, as the case may be. No waiver
of any default hereunder shall be implied from any omission by either party to take any action on
account of such default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the express waiver, and that only for the
time and to the extent therein stated. The acceptance by Landlord of Rent or partial Rent with
knowledge of the breach of any of the covenants of this Lease by Tenant shall not be deemed a
waiver of any such breach. One or more waivers of any breach of any covenant, term, or condition
of this Lease shall not be construed as a waiver of any subsequent breach of the same covenant,
term, or condition. The consent or approval by either party shall not be deemed to waive or render
unnecessary that partys consent to or approval of any subsequent similar act.
17.16 Estoppel Certificate. Either party hereto shall, within twenty (20) days notice from
the other party (referred to as the Requesting Party), execute and deliver to the Requesting
Party, in recordable form, a certificate stating that this Lease is unmodified and in full force
and effect, or in full force and effect as modified, and stating the modifications. The
certificate also shall state the amount of current monthly rent, the dates to which the rent has
been paid in advance, the amount of prepaid rent, and any other information with respect to this
Lease reasonably requested by the Requesting Party. Failure to deliver the certificate within the
twenty (20) days shall be conclusive upon the party
33
failing to deliver the certificate for the benefit of the party requesting the certificate and
any successor to the party requesting the certificate, that this Lease is in full force and effect,
and has not been modified except as may be represented by the party requesting the certificate, and
that rent and other charges have not been paid for any period after date of the notice requesting
the certificate.
17.17 Number and Gender. Whenever the context requires the singular number, it shall include
the plural, the plural the singular, and the use of any gender shall include all genders.
17.18 No Holding Over. Tenant shall have no right to holdover after the end of the Term.
Should Tenant or any Leasehold Mortgagee succeeding to the interest of Tenant hold over in
possession after the expiration date, such holding over shall not be deemed to extend the Lease or
renew this Lease; and Tenant shall pay a pro-rated daily amount equal to one hundred twenty
percent (120%) of the Annual Rent in effect immediately preceding the expiration date until Tenant
vacates the Premises.
17.19 Mechanics Liens. Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed against the Premises or the Entire Premises in connection with Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail
to so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics
liens and charge all costs thereof, including without limitation, reasonable attorneys fees, to
Tenant as additional rent plus interest at 18%.
17.20 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord and Tenant. Nothing contained
herein shall in any way impose any liability upon the stockholders, officers or directors of
Landlord or stockholders, officers, directors or trustees of Tenant should such parties be
corporate entities.
17.21 Time of the Essence. Time is of the essence with respect to Tenants payment of rent
and other monetary obligations to Landlord under this Lease.
17.22 Facsimile Copies. Tenant and Landlord (i) have each agreed to permit the use, from time
to time and where appropriate, of telecopied signatures in order to expedite the transaction
contemplated by this Lease, (ii) each intend to be bound by its respective telecopied signature,
(iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting
the transaction contemplated by this Lease based on a telecopied signature.
17.23 Anti-Merger. The voluntary or otherwise surrender of this Lease by Tenant, or a mutual
cancellation of this Lease shall not work a merger but shall at the option of Landlord either:
A) Terminate any existing subleases or subtenancies; or
34
B)
Operate as an assignment to Landlord (and assumption by Landlord)
of any subleases or
subtenancies.
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Executed as of the date first written above.
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TENANT:
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CENTURY THEATRES OF CALIFORNIA, INC.,
a California corporation
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By:
Print Name:
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/s/ Joseph Syufy
Joseph Syufy
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Title:
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Senior Exec. VP
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LANDLORD:
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SYUFY ENTERPRISES, a
California Limited Partnership
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By:
Print Name:
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/s/ Raymond W. Syufy
Raymond W. Syufy
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Title:
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President
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35
EXHIBIT
10.12(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent /Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions Proration of Taxes
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6
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5.03 Omitted
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs
Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE
XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A Description of Premises
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A-l
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Exhibit B Site Plan of Premises
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B-l
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Exhibit C Form of Memorandum
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C-l
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Exhibit D Guaranty of Lease
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D-l
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined in red..
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions
.
The following terms for purposes of this Lease shall have the meanings hereinafter
specified:
The term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased Premises,
parking, driveways and such other improvements as may presently exist or be added.
The Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land
thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 Leased Premises.
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 and retains the right to develop the
unimproved portion of the Entire
Premises so long as it does not interfere with Tenants 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 Tenants 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 (5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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 Landlords insurance or liability.
C) Tenant is granted a non-exclusive easement for parking and ingress and egress on and over
the Leased Premises. The location of said easements may be changed at the sole discretion of
the Landlord so long as such change does not interfere with Tenants Permitted Use.
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 $125,000.000 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 (5
th
) Lease Year of the Term The Minimum Monthly Rent shall be increased (but never decreased)
on the first day of the sixth (6
th
) Lease Year and on the
first day of each fifth (5
th
) 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 Landlords 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 Entire Premises, or the rents
receivable therefrom, or any part thereof or any use thereon or any facility located therein or
used in connection therewith, whether or not any of the foregoing shall be a so-called real
estate tax expressly excluding, however, any other items arising directly or indirectly out of
any act or omission of Landlord, any of Landlords 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 Entire Premises and/or the
Improvements on the Entire 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 are assessed on any Buildings exclusive of
the Entire Premises, Tenant shall pay all such impositions. With respect to impositions which by
law may be paid in installments over a period of time, Tenant 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 Tenant 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 Landlords
Buildings subject to the Installment Election, Landlords 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 Tenant had in fact made the Installment Election. Landlord shall pay all such real
property taxes to the Tenant prior to delinquency. In the event Tenant fails to pay to Landlord
such real property taxes as provided herein, Landlord shall pay Tenant in addition interest thereon
at the rate of 18% per annum from the delinquency date until such payment has been made.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance,
succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor
shall any of the same be deemed
to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in
whole or in part) or as a supplement to (provided such supplemental tax relates to real estate
or revenues from real estate
and not to other properly 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 Entire 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 Entire Premises were the only property of Landlord subject to such taxes, or
the income from operation of
the Entire Premises were Landlords only income, as the case may be. In the event of such
assessment, Landlord would
pay Tenant any such assessment related to any Buildings other than the Leased Premises located
on the Entire Premises.
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 5.04. Tenant shall indemnify, protect and hold harmless Landlord
and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all
costs and expenses related thereto.
Landlord shall provide Tenant with copies of notice when received by Landlord from the taxing
authorities of any assessments or reassessments of the Premises in sufficient time (but in no event later than
thirty (30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance with the provisions of
this Section 5.04.
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 Entire Premises including the
Common Area but exclusive of Landlords buildings.
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 Tenants 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.
6
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 Entire
Premises (exclusive of the interior
of Landlords Buildings), Leased Premises, Common Area and the appurtenances thereto,
including the sidewalks and
alleyways adjacent thereto, with limits of liability no less than Ten Million Dollars
($10,000,000) per occurrence and in
the aggregate.
B)
Physical Property Damage Insurance
. During the term hereof, Tenant shall keep
Tenants
Building (excluding foundations, footings and underground improvements) and personal property
as well as all
Improvements on the Common area, (Landlords Buildings excluded), including, but not limited
to, signs, outdoor
lighting fixtures and fences 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 Tenants 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
Landlords 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 Tenants 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 proceeds to Landlord for, and periodically during the course of,
repair and restoration of
Tenants 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 thirty (30) 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.
7
6.04
Landlords 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 XIV, 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 (B) (Physical Property Damage Insurance) the application of
insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article 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.
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 partys 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,
8
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
Tenants 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 partys 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 Landlords written approval shall be
first obtained.
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
Entire Premises which shall include the Common Area, driveways, parking, landscaping, signs,
fences, lighting and any and all improvements (exclusive of Landlords Buildings) in first class
condition and make such structural and non-structural, ordinary and extraordinary, foreseen and
unforeseen repairs such that the Entire Premises (exclusive of Landlords Buildings) 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
9
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
Tenants 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 Tenants (or its
agents, employees, contractors or invitees) acts or omissions brought upon, stored, used, generated
or released into the environment by Tenant, its agents, employees, contractors or invitees
(referred to as Tenants 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 Tenants 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 Tenants 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 Tenants 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.
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C) In addition to Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03
Remedial Work
. In the event any investigation or monitoring of site conditions
or any clean-up,
containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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
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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 Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants Indemnity
.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or disposed
of, on, in, under or about the Entire Premises, the Common Area, or any other portion of the
Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of any
law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord
related to Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
12
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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE
IX
IMPROVEMENTS
9.01
Tenants Signs
.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
13
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03
Permits; Compliance With Codes
. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04
Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall become
the property of Landlord.
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
14
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 Tenants 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
Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any
corporation which operates motion picture theatres and has a book net worth of not less than
$30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
15
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 Landlords 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.
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.
16
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, Tenants obligation
to pay Rent shall terminate on, and Tenants 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
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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 Tenants Award
. In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses and other related
damages against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01
Tenants 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 Tenants 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
Landlords Remedies Cumulative
. Landlord shall have the following remedies set
forth in subsections (A) through (G) below if Tenant commits a default, except as provided in
Section 15.03. These remedies are not exclusive and may be exercised concurrently or successively;
they are cumulative in addition to any remedies now or later allowed by law or equity:
A)
Bring Suit for Performance
. Landlord may bring suit for the collection of the Rent
or other amounts for which Tenant is then in default, or for the performance of any other covenant
or agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B)
Re-Entry Without Termination
. Pursuant to California Civil Code Section 1954.4,
Landlord may re-enter the Premises, by legal proceedings (or without legal proceedings if the
Premises have been abandoned), and take possession thereof, without thereby terminating this Lease,
and thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its election
to declare the Lease Term hereunder ended and to terminate this Lease, and unless this Lease be
expressly terminated, 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a
portion or portions thereof.
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C)
Termination of Lease and Lessees 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 Tenants 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.
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)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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.
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15.03
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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:
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(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
Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets.
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises
which are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as
defined herein), or (ii) which are inconsistent with the obligations of
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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.
16.02
Tenants 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 Tenants 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 parry.
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)
Tenants Obligation to Repair
. If the Premises or the improvements to the Comman
Area are damaged by any peril after the Commencement date of the Lease, Tenant shall restore the
Leased Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to
substantially the same condition in which the Leased Premises or the Common Area Improvements 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 properly as hereinabove
provided, the same shall be effected at Tenants cost and expense (which may be paid from insurance
proceeds available as above provided) and Tenant shall diligently commence and continuously carry
out such repair, replacement, reconstruction or rebuilding, to full completion as soon as possible,
except to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts, with
contractors and suppliers.
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 Tenants property or any inconvenience or annoyance caused by such restoration.
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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 18.10 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 Tenants 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 18.10
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 Landlords 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.
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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.
18.10
Addresses for Notices to Landlord and Tenant
.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or involuntary, or
by act of Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other
charges payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that the
assignee assumes in writing Landlords 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 Tenants 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.
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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
partys 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 Tenants 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 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 Tenants 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.
25
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.
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TENANT:
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CENTURY THEATRES OF CALIFORNIA, INC.,
a California Corporation
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By:
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/s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: V.P.
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LANDLORD:
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name: Raymond W. Syufy
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Title: G.P.
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26
EXHIBIT
10.13(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent / Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions Proration
of Taxes
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6
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5.03 Omitted
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII: Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total
Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03
Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII : Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-1
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Exhibit B
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Site Plan of Premises
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B-1
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Exhibit C
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Form of Memorandum
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C-1
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Exhibit D
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Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY
ENTERPRISES, a California Limited Partnership with an office at 150 Golden Gate Ave., San
Francisco, California, hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a
California corporation with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter
called Tenant.
RECITALS
Landlord owns the fee interest in Land, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is
outlined in red..
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter
specified:
The
term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased
Premises, parking, driveways and such other improvements as may presently exist or be
added.
The Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and
the land thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 Leased Premises.
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 and retains the right to develop the
unimproved portion of the Entire Premises so long as it does not interfere with Tenants 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 Tenants 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 (5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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 Landlords insurance or liability.
C) Tenant is granted a non-exclusive easement for parking and ingress and egress on and over
the Entire Premises. The location of said easements may be changed at the sole discretion of
the Landlord so long as such change does not interfere with Tenants Permitted Use. Tenant shall be responsible for all
costs related to the Entire Premises other than Landlords Building as set forth in the site plan attached.
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 $79,166.67 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never decreased)
on the first day of the fifth
(5
th
) Lease Year and on the first day of each sixth (6
th
) 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 Landlords 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 Entire Premises, or the rents receivable there from, 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 other items arising directly or indirectly out of any act
or omission of Landlord, any of Landlords 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 Entire Premises and/or the Improvements on the Entire 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.
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B) With respect to Impositions which are assessed on any Buildings exclusive of the
Leased Premises, Landlord shall pay Tenant all such impositions. With respect to Impositions which by
law may be paid in installments over a period of time, Tenant 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 Tenant 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 Landlords Buildings subject to the Installment Election, Landlords 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 Tenant had in fact made the Installment Election. Landlord shall pay all such real property taxes to the Tenant prior
to delinquency. In the event Tenant fails to pay to Landlord such real property taxes as provided herein, Landlord shall
pay Tenant in addition interest thereon at the rate of 18% per annum from the delinquency date until such payment has been
made.
5.02
Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor
shall any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax relates to real estate
or revenues from real estate and not to other property or business as well) the taxes now levied, assessed or imposed on
real estate and buildings and Improvements thereon, a tax shall be imposed, assessed or levied wholly or partly on the Rent,
or a tax, assessment, levy or charge, measured or based, in whole or in part, on the Entire 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 Entire Premises were the only property of Landlord subject to such taxes, or
the income from operation of the Entire Premises were Landlords only income, as the case may be. In the event of such
assessment, Landlord would pay Tenant any such assessment related to any Buildings other than the Leased Premises located
on the Entire Premises.
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 5.04. Tenant shall indemnify, protect and hold harmless Landlord
and the Premises from any lien or liability with respect to any such Imposition or contest thereof, including all
costs and expenses related thereto. Landlord shall provide Tenant with copies of notice when received by Landlord from the taxing
authorities of any assessments or reassessments of the Premises in sufficient time (but in no event later than
thirty (30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance with the provisions of
this Section 5.04.
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 Entire Premises including the
Common Area but exclusive of Landlords buildings.
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 Tenants 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.
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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 Entire
Premises (exclusive of the interior of Landlords Buildings), Leased Premises, Common Area and the appurtenances thereto,
including the sidewalks and alleyways adjacent thereto, with limits of liability no less than Ten Million Dollars
($10,000,000) per occurrence and in the aggregate.
B)
Physical Property Damage Insurance.
During the term hereof, Tenant shall keep
Tenants Building (excluding foundations, footings and underground improvements) and personal property
as well as all Improvements on the Common area, (Landlords Buildings excluded), including, but not limited
to, signs, outdoor lighting fixtures and fences 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 Tenants 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
Landlords 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 Tenants 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 proceeds to Landlord for, and periodically during the course of,
repair and restoration of Tenants 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 thirty (30) 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
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6.04
Landlords 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 XIV, 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 (B) (Physical Property Damage Insurance) the application of insurance proceeds
from damage or loss to property shall be determined in part in accordance with Article 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.
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 parrys 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,
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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 Tenants 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 parrys 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 Landlords written approval shall be first
obtained.
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
Entire Premises which shall include the Common Area, driveways, parking, landscaping, signs, fences, lighting and any and
all improvements (exclusive of Landlords Buildings) in first class condition and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Entire Premises (exclusive of
Landlords Buildings) 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
9
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
Tenants 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
Tenants (or its agents, employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the environment by Tenant, its agents, employees, contractors or invitees (referred to as
Tenants 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
Tenants 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 Tenants 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
Tenants 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.
10
C) In addition to Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03
Remedial Work.
In the event any investigation or monitoring of site conditions or
any clean-up,
containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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
there for should fail to
11
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 Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants Indemnity
.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or disposed
of, on, in, under or about the Entire Premises, the Common Area, or any other portion of the
Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of any
law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
12
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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants business. All
sums reasonably disbursed, deposited or incurred by Landlord in connection therewith, including,
but not limited to, all costs, expenses and actual attorneys fees, shall be due and payable by
Tenant to Landlord, as an item of additional rent, on demand by
Landlord, together with interest
thereon at the rate often percent (10%) per annum.
8.07
Effect of Termination
.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the best of Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01
Tenants Signs
.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy or
marquee.
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(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03
Permits; Compliance With Codes
. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all governmental
authorities having jurisdiction. Tenant shall cause all work on the Premises during the Term to be
performed in accordance with all applicable laws and all directions and regulations of all
governmental agencies and the representatives of such agencies having jurisdiction.
9.04
Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall become
the property of Landlord.
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
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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 Tenants 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
Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any
corporation which operates motion picture theatres and has a book net worth of not less than
$30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
15
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 Landlords 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.
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.
16
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, Tenants obligation to
pay Rent shall terminate on, and Tenants 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
17
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 Tenants Award.
In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses and other related
damages against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01
Tenants 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 Tenants 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
Landlords Remedies Cumulative.
Landlord shall have the following remedies set
forth in subsections (A) through (G) below if Tenant commits a default, except as provided in
Section 15.03. These remedies are not exclusive and may be exercised concurrently or successively;
they are cumulative in addition to any remedies now or later allowed by law or equity:
A)
Bring Suit for Performance.
Landlord may bring suit for the collection of the Rent
or other amounts for which Tenant is then in default, or for the performance of any other covenant
or agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B)
Re-Entry Without Termination.
Pursuant to California Civil Code Section 1954.4,
Landlord may re-enter the Premises, by legal proceedings (or without legal proceedings if the
Premises have been abandoned), and take possession thereof, without thereby terminating this Lease,
and thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its election
to declare the Lease Term hereunder ended and to terminate this Lease, and unless this Lease be
expressly terminated, 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
18
C)
Termination of Lease and Lessees 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 Tenants 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.
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)
Landlords Right to Cure Tenants Default.
Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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.
19
15.03
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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 parry 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:
20
(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
Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises
which are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as
defined herein), or (ii) which are inconsistent with the obligations of
21
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.
16.02
Tenants 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 Tenants 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)
Tenants Obligation to Repair.
If the Premises or the improvements to the Comman
Area are damaged by any peril after the Commencement date of the Lease, Tenant shall restore the
Leased Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to
substantially the same condition in which the Leased Premises or the Common Area Improvements 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 Tenants cost and expense (which may be paid from insurance
proceeds available as above provided) and Tenant shall diligently commence and continuously carry
out such repair, replacement, reconstruction or rebuilding, to full completion as soon as possible,
except to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts, with
contractors and suppliers.
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 Tenants property or any inconvenience or annoyance caused by such restoration.
22
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
Severabilitv.
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 18.10 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 Tenants 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 18.10
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 Landlords 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.
23
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.
18.10
Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal
Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or involuntary, or
by act of Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other
charges payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that the
assignee assumes in writing Landlords 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 Tenants 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.
24
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 partys
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 Tenants 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 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 Tenants 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.
25
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.
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TENANT:
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CENTURY THEATRES OF CALIFORNIA, INC.,
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a California Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
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Joseph Syufy
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Title:
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V.P.
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LANDLORD:
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SYUFY ENTERPRISES
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a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title:
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G. P.
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26
EXHIBIT
10.14(a)
LEASE
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Co-tenancy
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2.01 Lease of Premises
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3
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2.02 Term of Lease
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3
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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4
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ARTICLE III: Use of Premises
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3.01 Use
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5
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ARTICLE IV: Rent
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4.01 Annual Fixed Rent
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5
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4.02 Percentage Rent
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6
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4.03 Rent Payments
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7
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4.04 Place for Payment of Rent
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7
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4.05 Late Payment of Rent
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7
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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7
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5.02 Proration of Taxes
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8
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5.03 Exceptions from Impositions; Charges in Lieu of Impositions
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8
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5.04 Contest of Taxes
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8
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5.05 Utilities
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8
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5.06 Personal Property Taxes
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8
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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9
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6.02 Types of Required Insurance
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9
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6.03 Terms of Insurance
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9
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6.04 Landlords Acquisition of Insurance
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10
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6.05 Insurance Money and Other Funds Held In Trust
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10
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i
LEASE
Table of Contents
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Page No.
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6.06 Application or Proceeds of Physical Damage Insurance
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10
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6.07 Cooperation for Insurance Proceeds
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11
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6.08 Waiver of Right of Recovery
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11
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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12
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7.02 Repairs Maintenance
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12
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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13
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8.02 Tenants Responsibilities and Landlord Indemnity
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13
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8.03 Remedial Work
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15
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8.04 Maintenance of Premises
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16
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8.05 Landlords Responsibilities and Tenants Indemnity
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16
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8.06 Landlord Inspection
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17
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8.07 Effect of Termination
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18
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ARTICLE IX: Improvements
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9.01 Tenant Improvements
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18
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9.02 Hold Harmless
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18
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9.03 Permits; Compliance With Codes
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18
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9.04 Ownership of Improvements
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19
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9.05 Control
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19
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ARTICLE X: Indemnity
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10.01 Landlords Indemnity
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19
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10.02 Tenants Indemnity
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19
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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20
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11.02 Notice to Landlord
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20
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ARTICLE XII: Mortgage Subordination
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12.01 Existing Mortgages
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21
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12.02 Future Mortgages
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21
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ii
LEASE
Table of Contents
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Page No.
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ARTICLE XIII: Condemnation Eminent Domain
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13.01 Definitions
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21
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13.02 Notice to Other Party
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22
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13.03 Total Taking Effect on Rent and Term
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22
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13.04 Distribution of Award for Taking
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22
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13.05 Partial Taking Rent Adjustments
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23
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13.06 Partial Taking Option to Terminate
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23
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13.07 Separate Tenants Award
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23
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ARTICLE XIV: Default
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14.01 Tenants Default
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23
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14.02 Landlords Remedies Cumulative
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23
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14.03 Landlords Default
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25
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14.04 Waiver of Redemption
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26
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14.05 Dispute Resolution
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26
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14.06 Attorney Fees
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27
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ARTICLE XV: Representations and Warranties
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15.01 Landlords Representations and Warranties
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27
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15.02 Tenants Representations and Warranties
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27
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ARTICLE XVI: Damage or Destruction
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16.01 Repairs, Alterations and Further Improvements
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28
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16.02 Prompt Repair
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29
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16.03 Rent Adjustment
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29
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16.04 Damage During Last Ten (10) Years of Term
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29
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ARTICLE XVII: Miscellaneous
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17.01 Limitation on Liability
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30
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17.02 Brokers
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30
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17.03 Modification
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30
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17.04 Severability
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30
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17.05 Governing Law
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30
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17.06 Terminology
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30
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17.07 Counterparts
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30
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17.08 Binding Effect
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31
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iii
LEASE
Table of Contents
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Page No.
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17.09 Captions
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31
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17.10 Notice to Landlord and Tenant
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31
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17.11 Addresses for Notices to Landlord and Tenant
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31
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17.12 Entire Agreement
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32
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17.13 Sale or Transfer of Premises
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32
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17.14 Force Majeure
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32
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17.15 Waiver
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32
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17.16 Estoppel Certificate
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33
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17.17 Number and Gender
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33
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17.18 No Holding Over
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33
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17.19 Mechanics Liens
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33
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17.20 Relationship of Parties
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33
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17.21 Time of the Essence
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34
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17.22 Facsimile Copies
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34
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17.23 Anti-Merger
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34
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Signature Page
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Exhibit A A Description of Entire Premises
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Exhibit B A Site Plan of Entire Premises
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Exhibit C Form of Memorandum of Lease
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Exhibit D Guaranty of Lease
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iv
LEASE
THIS
INDENTURE OF LEASE, dated as of December 1, 1995, by and between Syufy Enterprises, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, CA,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in a parcel of land described on Exhibit A attached hereto.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the tract of land hereinafter referred to as Entire Premises.
EXHIBIT B a site plan of the Entire Premises showing Tenants Building.
EXHIBIT
C Form of Memorandum of Lease.
EXHIBIT D Guaranty of Lease.
1.02. Definitions
.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The
term Commencement Date shall mean July 1, 1996.
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The term Effective Date shall mean December 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to pay
interest under this Lease at the Default Rate.
The term Entire Premises shall mean the tract of land described on Exhibit B.
The term Initial Rent Due Date shall mean July 1, 1996.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises or Premises shall mean the Entire Premises.
The term Mortgage shall mean any mortgage or deed of trust or other instrument in the
nature thereof evidencing a security interest in the Entire Premises or any part thereof.
The term Number of Tenant Working Days shall mean 365 days.
The
term Number of Term Years shall mean 20 years.
The term Option Periods shall mean two (2) successive separate periods
of five (5) years each.
The
term Percentage Rate shall mean eight percent (8%).
The term Planned Use shall mean the construction and operation of a motion picture theatre,
and for such activities in connection therewith as are customary and usual at other motion picture
theatres operated by Tenant including, without limitation, the operation of vending machines and
video games; operation of concession stands; sale of movie related T-shirts, toys and memorabilia,
rentals of auditoriums to third parties and other such activities on the Premises.
The term Prime Rate shall be the per annum interest rate from time to time publicly
announced by Citibank, N.A., New York, New York as its base rate. The Prime 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.
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The term Tenants Building shall mean the building to be erected by Tenant at Tenants sole
cost.
The
term term of this Lease or term hereof shall mean the initial term, as provided in the
article captioned Term and any renewal or extensions thereof.
ARTICLE II
PREMISES TERM OPTIONS COVENANT OF TITLE
2.01
Lease of Premises
.
A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms and
conditions contained herein.
B) The Premises are being leased in their as is condition subject to Article VIII herein
captioned Environmental Matters.
C) Landlord shall deliver possession of the Premises to Tenant on the Effective Date.
2.02
Term of Lease
.
Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
The Initial Term of this Lease shall begin on the Commencement Date and shall terminate twenty (20) years
thereafter and shall terminate on the last day of the calendar month
during which the date which is twenty (20) years after the Commencement Date occurs. References
herein to the Lease Term shall mean the Initial Term of this Lease or the Initial Term as
extended under Section 2.02.
2.03
Option to Extend Lease Term
.
A) Tenant may, at Tenants 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 (5
th
) anniversary of the date of commencement of the Renewal Term in
question, unless sooner terminated as provided herein.
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B) Failure to duly exercise the option for any Renewal Term shall nullify the option for the
remaining Renewal Terms.
C) Tenants right to the options to extend the Lease Term and Tenants rights to the Renewal
Term are subject to:
(1) This Lease being in full force and effect on the last day of the Initial Term or the then
current Renewal Term, as applicable.
(2) Compliance with the following procedure for exercising the option in question:
(a) At least nine (9) months before the last day of the Initial Term, or the then current
Renewal Term, as the case may be, Tenant shall give Landlord written notice exercising the option.
(b) Each party shall, at the request of the other, execute a memorandum acknowledging the
fact that the option in question has been exercised. If an option is properly exercised by Tenant,
the failure of Landlord to execute such memorandum shall not invalidate such option or the
exercise thereof.
(3) Tenant is not in default (meaning the breach of any obligation hereunder and failure to
cure that breach within the time permitted in Section 14.01) at time of the exercise of the
renewal and at the commencement of the renewal term.
2.04
Covenant of Title; Authority and Quiet Possession; Transfer of Title.
(A) Landlord represents and warrants to Tenant that Landlord has full right and lawful
authority to enter into and perform Landlords obligations under this Lease for the term hereof,
and has good an marketable title to the Entire Premises in fee simple.
(B) Tenant shall give Landlord prior written notice before commencing any work upon the
Premises, and shall cause all work to be performed by Tenant to be conducted in such a manner that
the same does not unreasonably interfere with the other tenants customers or their business
operations.
(C)
Maintenance
of Entire Premises
. At all times during the Term, Tenant shall keep
and maintain the Exterior Common Facilities in the Entire Premises and Tenants Building in good
order and repair and in a clean and safe condition, reasonably free of debris. Tenants obligation
hereunder shall included maintaining the parking areas of the Entire Premises free of potholes and
assuring that they are properly coated and sealed and striped as needed. Tenant shall make any and
all additions to and all alterations and repairs in, on and about the Entire Premises, which may
be required by, and shall otherwise observe and comply with, all public laws, ordinances and
regulations from time to time applicable to the Entire Premises. Tenant shall indemnify and save
harmless Landlord from and
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against all actions, claims and damages by reason of Tenants failure to comply with and perform
its obligations under this section.
(D)
Tenants Liens
Tenant will not permit the Entire Premises to become subject to
any mechanics, laborers or materialmens lien on account of labor or material furnished to
Tenant or claimed to have been furnished to Tenant in connection with work of any character
performed or claimed to have been performed on the Entire Premises by or at the direction or
sufferance of Tenant; provided, however, Tenant shall have the right to contest in good faith and
with reasonable diligence the validity of any such lien or claimed lien and on final determination
of the lien or claim for the lien, Tenant will immediately pay any judgment rendered with all
proper costs and charges, and will, at its own expense, have the lien released and any judgment
satisfied.
ARTICLE III
USE OF PREMISES
3.01 Use.
A) The Premises may be used for the Planned Use no other purpose.
B) Landlord shall agree and consent to such utility and other easements encumbering the
Premises or benefiting the Premises and encumbering the Fee Parcels as Tenant may reasonably
require for its use and occupancy of the Premises.
C) Landlord agrees that no use of the Entire Premises shall be permitted which is inconsistent
with the operation of the Planned Use. Tenant shall be subject to and responsible for all costs and
granted all rights as set forth in the Covenants, Conditions, Restrictions and Grants of Easements
covering the Premises.
ARTICLE IV
RENT
4.01
Annual Fixed Rent.
A) Beginning on the Initial Rent Due Date, Tenant shall pay to Landlord during the Lease Term
Annual Fixed Rent in the amount of $653,304.00 The Annual Fixed Rent shall be payable in advance in twelve
(12) equal monthly installments. The Annual Fixed Rent shall be subject to adjustment every five (5) years
after the Initial Rent Due Date as set forth in Section 4.01 (B) below.
B) The Annual Fixed Rent shall apply from the Rent Commencement Date through the end of the fifth (5
th
)
Lease Year of the Term. The Annual Fixed Rent shall be increased (but never decreased) on the
first day of the sixth (6
th
) Lease Year and on the first day of each fifth (5
th
) 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,
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Bureau of Labor Statistics Consumer Price Index for all Urban Consumers, Sacramento, Subgroup All
Items, (1982-84+100) (the Consumers Price Index; provided however, in no event shall the Annual
Fixed Rent be increased by an amount that is less than ten (10%) greater than the Annual Fixed
Rent payable before the adjustment date in question.
In the event that the Consumer Price Index is not available, the successor or substitute
index, shall be used for the computations herein set forth. In the event that the Consumer Price
Index or such successor or substitute index is not published, a reliable governmental or other
non-partisan publication evaluating the information theretofore used in determining the Consumer
Price Index shall be used by Landlord for the computations herein set forth. For the purposes of
the computations herein set forth, the basis for any substitute or successor index or such
governmental or non-partisan publication shall be converted to a basis of 100 only in the event
that the basis used in such index or publication is less than 100.
4.02 Percentage Rent.
In addition to the payment of Annual Fixed Rent, Tenant shall pay to Landlord for each Lease
Year during the Term of this Lease, as Percentage Rent a sum equal to
the amount by which 8% of the
Gross Sales for such Lease Year exceeds the Annual Fixed 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. For the purpose of computing the Annual Percentage for the first Lease Year, the
Gross sales and the annual fixed rate percentage for the partial calendar month, if any, preceding
the first Lease Year shall be includable in the Annual Fixed Rate and Gross Sales for the first
Lease Year.
Gross Sales shall mean all box office receipts, and receipts from sales of goods,
merchandise, beverages, food, vending machines and video games. Gross Sales shall exclude credits
and refunds made with respect to admissions or other sales; all federal, state, county and city
admission taxes, sales taxes and other similar taxes now or hereafter imposed whether such taxes
are collected from customers separately from the selling price of admission tickets or absorbed
therein, and actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or Pass Admissions including EBF charges on Pass Admissions. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental
of vending machines, pay telephones or other amusement machines shall be deducted from Gross
Sales.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
office of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with
the delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales.
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If
it is determined
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as a result of such audit that there has been a deficiency in the payment of Percentage Rent, then
such deficiency shall become immediately due any payable with interest at the annual rate of 18%
from the date when said payment should have been made until paid. Any information gained from such
statements or inspection shall be confidential and shall not be disclosed other than to carry out
the purposes hereof.
4.03
Rent Payments
. Rent and other sums to be paid by Tenant shall be payable in
lawful money of the United States of America. All payments shall be made by Tenant to Landlord
without notice or demand.
4.04
Place for Payment of Rent.
The Annual Rent and any other charges required to be
paid by Tenant to Landlord shall be sent to Landlord at its principal place of business, or such
other address as Landlord may direct in writing.
4.05
Late Payment of Rent
. In the event that any monthly installment of rent is not
paid within ten (10) days after such payment is past due, Tenant shall pay Landlord interest on
such unpaid rent at the rate of eighteen percent (18%) per annum computed from the date such rent
installment was due until the date actually paid.
ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES
5.01
Impositions
.
A) The term Impositions shall mean all real estate taxes, duties or
assessments (special or otherwise), water and sewer rents, whether ordinary or extraordinary,
general or special, foreseen or unforeseen, of any kind and nature whatsoever,
which, at any time during the Lease Term, shall be assessed or levied, or be attributable in any
manner to the Entire Premises, or the rents receivable therefrom, or any part thereof or any use
thereon or any facility located therein or used in connection therewith, whether or not any of the
foregoing shall be a so-called real estate tax expressly excluding, however, any such items
arising directly or indirectly out of any act or omission of Landlord, any of Landlords
predecessors in title or any other person occurring prior to the commencement of the Term. From and
after the Initial Rent Due Date, Tenant shall pay when due all Impositions assessed, levied or
attributable to the Entire Premises and/or the Improvements on the Entire Premises.. All
Impositions or installments thereof payable with respect to the tax year in which this Lease shall
commence, and all Impositions or installments thereof with respect to the tax year in which this
Lease shall terminate, shall be pro-rated on a daily basis; provided, however, that assessments or
escape assessments assessed as a result of this Lease and/or the construction of Tenant
Improvements by Tenant shall not be prorated and shall be paid solely by Tenant; and provided
further that assessments attributable to Tenant Improvements made in the final year of the Lease
shall be paid solely by Tenant if Tenant demolishes the Tenant Building.
B) In the event Tenant fails to pay such real property taxes as provided herein, Landlord
may, but shall not be required to, pay the same, and any amount so paid by Landlord shall
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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 Landlords payment plus any fine, penalty, interest
or cost which is levied by the taxing authority for such late payment.
5.02
Exceptions from Impositions; Charges in Lieu of Impositions
.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a
tax shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy
or charge, measured or based, in whole or in part, on 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 Landlords only income,
as the case may be.
5.03
Contest of Taxes
. Tenant at its sole cost and expense may by appropriate legal
proceedings conducted in good faith and with due diligence, contest the amount or validity or
application, in whole or in part, of any Imposition or lien therefor, or any other lien,
encumbrance or charge against the Premises arising from work done or materials provided to or for
Tenant. Tenant shall give Landlord reasonable notice of, and information pertaining to, such
contest and regular progress reports with respect thereto. Landlord shall cooperate with any
effort pursued by Tenant in accordance with this Section 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.03.
5.04
Utilities
. Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Entire Premises
exclusive of Landlords Buildings, if any. Any utility improvements presently serving the Entire
Premises shall be maintained, repaired and replaced by Tenant, at Tenants expense.
5.06
Personal Property Taxes
. During the term of this Lease, Tenant shall pay before
delinquency any and all personal property taxes levied or assessed against any personal property
located upon the Premises. If Tenant fails to timely pay such taxes and a lien is filed against
the Premises, Landlord may discharge such lien, if Tenant fails to discharge such lien within ten
(10) days following Tenants receipt of notice from Landlord, including without limitation
reasonable attorneys
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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 Entire
Premises, Premises, Common Area and the appurtenances thereto, including the sidewalks and
alleyways adjacent thereto, with limits of liability no less than Five Million Dollars
($5,000,000) per occurrence and in the aggregate.
B)
Physical Property Damage Insurance
. During the term hereof, Tenant shall keep
Tenants Building (excluding foundations, footings and underground improvements) as well as any
and all improvements on the Entire Premises and personal property insured in the name of Landlord
and Tenant against damage or destruction by fire and the perils commonly covered under the
extended coverage endorsement (with vandalism and malicious mischief coverage) including Builders
Risk but excluding earthquake and flood to the extent of not less than 100% of the full
replacement cost thereof less any deductible applicable to all of Tenants 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 Landlords consent, which consent is not to be
unreasonably withheld or delayed. The proceeds of such insurance in case of loss or damage shall
be held in trust and applied on account of the obligation of Tenant to repair and/or rebuild the
Leased Premises pursuant to the Article captioned Damage Clause to the extent that such proceeds
are required for such purpose. The insurance required to be carried by Tenant under this paragraph
may be covered under a so-called blanket policy covering other operations of Tenant and its
affiliates. Upon written request, Tenant shall name Landlord and any parties requested by Landlord
and the holder of the first mortgage on Tenants Building pursuant to a standard mortgage clause
with respect to the foregoing hazard insurance, provided such holder agrees with Tenant in writing
to disburse such insurance proceeds to Landlord for, and periodically during the course of, repair
and restoration of Tenants 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:
9
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
Landlords Acquisition of Insurance
. If Tenant at any time during the Term fails
to procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord
shall have the right to procure the same and to pay any and all premiums thereon, and any amounts
paid by Landlord in connection with the acquisition of insurance shall be immediately due and
payable as additional rent, and Tenant shall pay to Landlord upon demand the full amount so paid
and expended by Landlord. Any policies of insurance obtained by Landlord covering physical damage
to the Premises shall contain a waiver of subrogation against Tenant if and to the extent such
waiver is obtainable and if Tenant pays to Landlord on demand the additional costs, if any,
incurred in obtaining such waiver.
6.05
Insurance Money and Other Funds Held in Trust
. All insurance money or proceeds
received by the Tenant and/or Landlord shall be held in trust by Landlord and, except as provided
otherwise in Section 6.06, shall be applied as follows:
First, for the purpose of defraying the cost of repairing, restoring, replacing and/or
rebuilding any structure or improvement on or in the Premises as required as provided in Section
6.06 hereof; and Second, if the damaged or destroyed structure or improvement is not repaired,
restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed of as provided
in Section 6.06. Any of said funds in the hands of the Tenant at the end of the Term hereof shall
be disposed of as set forth in Section 6.06 (A).
6.06
Application or Proceeds of Physical Damage Insurance
. In case of any insurance
policies as described in Section 6.02 (B) (Physical Property Damage Insurance) the application of
insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article XVI hereof and, in the event of any such repair, replacement, restoration or rebuilding,
the Tenant and Landlord shall apply the proceeds of the insurance collected to the cost of such
work upon certificate of satisfactory progress and/or completion in form satisfactory to Tenant
and Landlord by the licensed architect or engineer in charge of the work. Any amounts payable to
Tenant or any Affiliate of Tenant for work or services performed or materials provided as part of
any such repair, replacement, restoration or rebuilding shall not exceed competitive rates for
such services or materials and Tenant
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shall, upon request of Landlord, make available to Landlord and its representatives all books and
records of Tenant relating to such work, services and materials. Upon completion of such repair,
replacement, restoration or rebuilding in accordance with the provisions of this Lease, and the
full payment therefor (so no liens, encumbrances or claims with respect thereto can be asserted
against the Premises, this Lease, Landlord or Tenant), any insurance proceeds received by the
Tenant or Landlord with respect to the damage or destruction involved, and not used, shall be and
remain the property of Landlord.
A)
Distribution of Unutilized Proceeds
. At the termination of this Lease, such
insurance proceeds or condemnation awards received and held by the Tenant and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(1) First, Landlord shall be awarded an amount sufficient to remove any improvements not
repaired and to return the Property to the level of adjacent streets (grade level); and
(2) Second, any remainder shall be paid to Landlord.
6.07
Cooperation for Insurance Proceeds
. Landlord and Tenant shall each cooperate with
the other in order to obtain the largest possible recovery and execute any and all consents and
other instruments and take all other actions reasonably necessary or desirable to effectuate the
same and cause such proceeds to be paid as hereinbefore provided. Notwithstanding anything to the
contrary contained in this Lease, neither party shall carry any insurance concurrent in coverage
and contributing in the event of loss with any insurance required to be furnished by the other
hereunder if the effect of separate insurance would be to reduce the protection or the payment to
be made under such partys 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
Tenants Building or land or improvements adjoining the Premises owned or leased by Landlord shall
(if it can be so written and does not result in a material additional premium) include provisions
denying to the insurer subrogation rights against the other party and any fee or leasehold
mortgage to the extent such rights have been waived by the insured prior to the occurrence of
damage or loss. If the waiver of subrogation otherwise is not effective, each party covenants that
it will obtain for the benefit of the other party an express waiver of any right of subrogation
which the insurer of such party may acquire against the other party by virtue of the payment of
any such loss covered by such insurance. In the event either party is by law, statute,
governmental regulation, economically unleasible or other factor beyond such partys 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
11
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 Landlords written approval shall be
first obtained, which approval shall not be unreasonably withheld.
B) Tenant shall at all times keep the Entire Premises, Premises or any part thereof, free and
clear of all liens and claims for labor or material and free and clear of all attachments,
executions and notices.
C) Upon termination of this Lease, Tenant may, at its option, remove any personal property
and trade fixtures including, but not limited to theatre seats, projection and sound equipment,
snack bar equipment and computers.
7.02
Repairs Maintenance
.
A) Tenant shall, at its sole cost and expense, maintain and repair the Entire Premises and
Tenants Building and all improvements on the Entire Premises and including all exterior lighting
and signs.
B) Tenant shall also be responsible for any losses or damages resulting from any materials,
substances or liquids which are leaked or discharged from the Entire
Premises.
Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
12
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlords request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such payment has been made.
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
Tenants 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
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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 Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the environment by Tenant, its agents, employees, contractors or invitees (referred
to as Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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
Tenants 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.
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D) Landlord, at Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03
Remedial Work.
In the event any investigation or monitoring of site conditions
or any clean-up, containment, restoration, removal or other remedial work (Remedial Work) is
required (a) under any applicable federal, state or local law or regulation, (b) by any judicial,
arbitral or administrative order, (c) to comply with any agreements affecting the Premises or (d)
to maintain the Premises in a standard of environmental condition which presents no risk to safety
or health, prevents the release of any hazardous materials to adjacent property and otherwise is
consistent with the prudent ownership of property of the character of the Premises and/or Tenants
Building and if such Remedial Work is required as a direct result of Tenants Environmental Acts,
then Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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
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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 Landlords 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 Tenants 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 Landlords 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
Landlords Responsibilities and Tenants Indemnity
.
A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released into the environment or disposed of, on, in, under or about the Entire
Premises, the Common Area, or any other portion of the Premises by Landlord, its agents,
employees, tenants, contractors or invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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
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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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants business.
All sums reasonably disbursed, deposited or incurred by Landlord in connection therewith,
including, but not limited to, all costs, expenses and actual attorneys fees, shall be due and
payable by Tenant to Landlord, as an item of additional rent, on demand by Landlord, together with
interest thereon at the rate of ten percent (10%) per annum.
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8.07
Effect of Termination.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the best of Tenants knowledge, Tenant is in default of any
provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01
Tenant Improvements.
Tenant at its sole cost and expense shall complete all the
required on-site and off-site improvements, including all signs, required for the development of
the Entire Premises. In addition Tenant shall construct a motion picture theater building on the
Premises containing approximately sixty thousand (50,000) square feet with fourteen auditoriums.
Landlord will provide Tenant with a site and building allowance of $5,294,200.00. The site and
building allowance will be paid by Landlord to Tenant the latter of July 1, 1996 or the date Tenant
opens to the public for business.
9.02
Hold Harmless
. Except to the extent attributable to the intentional or negligent
acts or omissions of Landlord or Landlords agents, employees, contractors, tenants, or invitees,
Tenant shall indemnify, protect, defend and hold harmless Landlord and the Premises from and
against all claims and liabilities arising by virtue of or relating to construction of by Tenant
of Tenants Building and Improvements or repairs made at any time to the Entire 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 Landlords defense, including attorneys fees; provided, however, Tenant shall be liable for
attorneys 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.
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9.04
Ownership of Improvements
.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein excluding moveable trade fixtures and personal property of Tenant,
shall become the property of Landlord, unless and to the extent Tenant elects to remove any of the
foregoing pursuant to Section 9.04 (B).
B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord and the foregoing shall
remain the property of the Tenant at the expiration or earlier termination of the Lease. In
addition, Tenant shall have the right if Tenant so elects by giving written notice to Landlord of
such election at any time before ninety (90) days prior to the end of the Term (including any
renewals or extensions) hereof to remove any other Improvements and all additions, alterations and
improvements thereto or replacements thereof erected, constructed, or installed on the Premises.
The removal of any of the foregoing shall be completed within thirty (30) days following the end of
the Term hereof (including any renewals thereof or any earlier termination permitted by this Lease.
9.07
Control.
Notwithstanding anything to the contrary in this Lease, during the Term
of this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01
Landlords Indemnity.
Except to the extent attributable to the intentional and
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), directly or indirectly arising out of or attributable to (i) any intentional or
negligent act or omission of Tenant, its agents, employees, licensees, invitees or contractors on
the Leased Premises, occurring within the Leased Premises or (ii) arising from Tenants or its
employees use of the Leased Premises.
10.02
Tenants Indemnity.
Except to the extent attributable to the intentional and
negligent acts or omissions of Tenant and its agents, employees, tenants, licensees and
contractors, Landlord shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Tenant)
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and save Tenant (and its successors, assigns and subletees), and all of their directors, officers,
employees and agents, hereinafter referred to as Tenant Indemnities, from and against any claims,
demand, damages, injuries, costs, expenses, losses, liabilities, causes of action, interest, fines,
charges and penalties (including reasonable legal fees and expenses in enforcing this indemnity and
hold harmless), directly or indirectly arising out of or attributable to (i) any intentional or
negligent act or omission of Landlord, its agents, employees, licensees, invitees on the Entire
Premises or contractors, occurring within the Entire Premises, or (ii) arising from Landlords use
of the Entire Premises.
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
Landlords approval which shall not be unreasonably withheld, provided Tenant remains liable for
all Tenant obligations under this Lease, and any sublease shall be subject to all the provisions
of this Lease. Landlord shall be entitled to all rent from any assignment or sublease in excess of
the Annual Fixed Rent set forth in this Lease.
B) Any assignment of this Lease or any sublease of a portion or all of the Premises shall be
subject to the terms and conditions of this Lease.
C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without Landlords consent, assign this Lease (a) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (b) to Tenants Parent Corporation, or (e) to any corporation which
acquires 50% or more of the issued and outstanding voting stock (or such lesser percentage as shall
be sufficient to acquire voting control) of Tenant or of Tenants Parent Corporation, provided that
such corporation duly and validly then guarantees the performance of the obligations under this
Lease.
11.02
Notice to Landlord
. Tenant shall give notice to Landlord in writing of any
assignment of the Lease ten (10) days prior to such event.
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ARTICLE XII
MORTGAGE SUBORDINATION
12.01
Existing Mortgages.
If there is an existing mortgage or deed of trust
(Mortgage) lien affecting the interest of Landlord in the Premises or in any other part of the
Entire Premises, then Landlord shall obtain and shall deliver to Tenant within fifteen (15) days
after the Effective Date, a non-disturbance and attornment agreement in a form reasonably
acceptable to such lender, Landlord and Tenant, executed by the Mortgagee (as defined below),
wherein the Mortgagee shall agree to recognize the interest of Tenant and abide by the terms of
this Lease in the event of any judicial foreclosure, private sale or deed in lieu of foreclosure,
including the right to quiet enjoyment of the Premises, without any condition, limitation or
restriction.
12.02
Future Mortgages
. The rights of Tenant under this Lease shall be, at the option
of Landlord, either subordinate or superior to any future mortgage on Landlords interest in the
Premises in favor of an institutional lender not affiliated with Landlord. Provided however, that
as a condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of
trust and their successors and assigns (the Mortgagee) shall agree to recognize the interest of
Tenant and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.
ARTICLE XIII
CONDEMNATION EMINENT DOMAIN
13.01
Definitions.
The following definitions apply in construing provisions of this
Lease relating to a taking of or damage to all or any part of the 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.
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B) Total Taking means the Taking of the fee title to all the Premises and the Improvements
on the Premises, which shall be considered to include any offsite improvements effected by Tenant
to serve the Premises or the improvements or the parking on the Entire Premises.
C) Partial Taking means any Taking (including any damaging) of a portion of the Premises,
the Common Area, or any Improvements or parking thereon which is not a Total Taking.
D) Notice of Intended Taking means any notice or notification on which a reasonably prudent
man would rely and which he would interpret as expressing an existing intention of Taking as
distinguished from a mere preliminary inquiry or proposal. It includes, but is not limited to, the
service of a condemnation summons and complaint on a party to this Lease. The notice is considered
to have been received when a party to this Lease receives from the condemning agency or entity a
Notice of Intended Taking, in writing, containing a description or map of the Taking reasonably
defining the extent of the Taking.
E) Award means compensation paid for the Taking, whether pursuant to judgment or by
agreement or otherwise.
13.02
Notice to Other Party.
The party hereto receiving any notice of the kinds
specified below shall promptly give the other party notice of the receipt, contents, and date of
the notice received:
A) Notice of Intended Taking;
B) Service of any legal process relating to condemnation of the Premises or improvements;
C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or
D) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer
in lieu of condemnation.
13.03
Total Taking Effect on Rent and Term.
On a Total Taking, Tenants obligation
to pay Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the
date of Taking, at which time this Lease shall terminate.
13.04
Distribution of Award for Taking
. On a Taking, all sums, including, but not
limited to, damages and interest awarded for the value of the real estate taken, shall be
apportioned and paid by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any for the Fair Market Value of all Land, buildings
and other improvements on the Entire Premises and all Severance Damages.
22
B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost profits,
relocation expenses and fixtures; and
C) To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.
13.05
Partial Taking Rent Adjustments
. On a Partial Taking, the Lease shall remain
in full force and effect covering the remaining Premises, except that the total Rent as otherwise
provided herein shall be reduced in the same ratio as the percentage of the area of the Premises
or the parking taken bears to the total area of the Premises or the parking.
13.06
Partial Taking Option to Terminate
. Notwithstanding anything herein to the
contrary, in the event of a Partial Taking, if more than thirty-three percent (33%) of the
Building or thirty-three (33%) of the parking is taken by condemnation or sold under the threat of
condemnation, then Tenant may terminate this Lease as of the date the condemning authority takes
title or possession, whichever occurs first, by delivering written notice to the other within ten
(10) days after receipt of written notice of such taking (or in the absence of such notice, within
ten (10) days after the condemning authority takes possession).
13.07
Separate Tenants Award
. In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses, fixtures and
relocation expenses against the acquiring governmental Agency.
ARTICLE XIV
DEFAULT
14.01
Tenants Default
. The occurrence of any of the following shall constitute a
default or event of default by Tenant:
A) Failure to pay Annual Fixed Rent or any other monetary amount when due as provided herein,
if the failure continues for ten (10) days after first written notice has been given to Tenant by
Landlord;
B) Failure to perform any of Tenants non-monetary obligations under this Lease; provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure
each such default. If Tenant cannot reasonably cure such default within said thirty (30) day
period, Tenant shall not be in default of this Lease if Tenant commences to cure the breach within
the thirty (30) day period and diligently and in good faith continues to cure the breach.
14.02
Landlords 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.
23
These remedies are not exclusive and may be exercised concurrently or successively; they are
cumulative in addition to any remedies now or later allowed by law or equity:
A)
Bring Suit for Performance
. Landlord may bring suit for the collection of the Rent
or other amounts for which Tenant is then in default, or for the performance of any other covenant
or agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B)
Re-Entry Without Termination
. Pursuant to California Civil Code Section 1954.4,
Landlord may re-enter the Premises, by legal proceedings (or without legal proceedings if the
Premises have been abandoned), and take possession thereof, without thereby terminating this Lease,
and thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its election
to declare the Lease Term hereunder ended and to terminate this Lease, and unless this Lease be
expressly terminated, such re-entry or entry by Landlord, whether had or taken under summary
proceedings or otherwise, shall not be deemed to have absolved or discharged Tenant from any of its
obligations and liabilities for the remainder of the Lease Term. Notwithstanding anything to the
contrary or other provisions of this Section 14.02(B), Tenant shall have the right to sublet the
Premises, assign its interest in the Lease, or both, subject to Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C)
Termination of Lease and Lessees 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
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(4) Any other amount, and court costs, necessary to compensate Landlord for all detriment
proximately caused by Tenants failure to perform his obligations under the Lease or which, in the
ordinary course of things, would be likely to result therefrom.
D)
Definitions
. As used herein, the following phrases shall be interpreted as
follows:
(1) The worth, at the time of the award, as used in subsections 14.02(C)(1) and (2) above,
is to be computed by allowing interest at the maximum lawful rate. The worth, at the time of the
award, as referred to in subsection 14.02(C)(3) above, is to be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award,
plus one percent (1%).
(2) As used herein, the term time of award shall mean either the date upon which Tenant
pays to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of entry
of any determination, order, or judgment of any court or other legally constituted body
determining the amount recoverable, whichever first occurs.
E)
Surrender
. Promptly after notice of termination, Tenant shall surrender and vacate
the Premises and all improvements in broom-clean condition, and Landlord may re-enter and take
possession of the Premises and all remaining improvements and eject all parties in possession or
eject some and not others, or eject none. Termination under subsection 14.02(C) shall not relieve
Tenant from the payment of any sum due to Landlord or from any claim for damages previously
accrued or then accruing against Tenant.
F)
Appointment of Receiver
. If Tenant defaults under Section 14.02(C), Landlord shall
have the right to have a receiver appointed to collect rent from any subtenants. Neither the
filing of a petition for the appointment of a receiver nor the appointment itself shall constitute
an election by Landlord to terminate this Lease.
G)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is
in default under Section 14.01 herein, may cure the default at Tenants expense. If Landlord, at
any time, by reason of Tenants default, pays any sum or does any act that requires the payment of
any sum, the sum paid by Landlord shall be immediately reimbursed from Tenant to Landlord,
together with interest at eighteen percent (18%) per annum computed from the date of such
expenditure until the date of reimbursement by Tenant.
14.03
Landlords 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.
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B) Tenant, at any time after Landlord is in default under paragraph (A) above, may cure the
default at Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any
amount due from Landlord against the next Rent payment due under this Lease.
14.04
Waiver of Redemption
. Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future laws in the event of Tenant being
dispossessed or removed from the Premises upon the termination of this Lease because of default by
Tenant hereunder.
14.05
Dispute Resolution
. Landlord and Tenant desire by provisions of this Section
14.05 to establish procedures to facilitate the informal and inexpensive resolution of any dispute
arising out of this Lease by mutual cooperation and without resort to litigation. To accomplish
this objective, Landlord and Tenant agree to follow the procedures set forth below if and when a
dispute arises between them under this Lease.
A)
Description of Dispute
. The complaining party shall provide by notice a written
description of the alleged breach by the other party. This description shall explain the nature of
the complaint and the Lease provision(s) on which it is based. The complaining party shall also
set forth a proposed solution to the problem including a specific time frame within which the
parties must act. The party receiving the letter of complaint must respond in writing within ten
(10) days with an explanation, including references to the relevant parts of the Lease and a
response to the proposed solution. Within ten (10) days of receipt of this response, the parties
must meet and discuss options for resolving the dispute. The complaining party must initiate the
scheduling of the resolution meeting.
B)
Mediation
. A settlement conference shall be held within thirty (30) days of the
unsuccessful resolution meeting or as soon as practical thereafter.
C)
Arbitration
. With respect to disputes which the parties have been unable to
resolve informally or by mediation, the parties agree to submit the dispute for final and binding
arbitration if the dispute has not otherwise been settled. The parties agree that the arbitration
must be initiated within one (1) year after the date of the written description of the alleged
breach and that the failure to initiate arbitration within the one (1) year period constitutes an
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated for
the purposes of this section by demand therefor being sent by certified mail to the other party,
which notice shall contain a description of the dispute, the amount involved and the remedies
sought. The parties shall have the right to representation by counsel throughout the arbitration
proceedings. Arbitration shall be conducted under the Commercial Arbitration Rules of the American
Arbitration Association.
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14.06
Attorneys Fees
. Should any action or proceeding, be commenced between the
parties to this Lease concerning said Premises, this Lease, or the rights and duties of either in
relation thereto, the party, Landlord, or Tenant, prevailing in such action or proceeding shall be
entitled, in addition to such other relief as may be granted in the action or proceeding, to a
reasonable sum as and for its attorneys fees therein which shall be determined by the
arbitrator(s) hearing such action or proceeding.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES
15.01
Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or permit or suffer to be created any liens or encumbrances on the
Premises which are (i) not specifically stated in writing to be junior to this Lease, or any New
Lease (as defined herein), or (ii) which are inconsistent with the obligations of Landlord
hereunder, and Landlord shall, at or prior to the commencement of the Term, cause the Premises to
be free of all liens and encumbrances. Title to the Premises shall be free of all Objected
Exceptions.
15.02
Tenants Representations and Warranties
. Tenant represents and warrants:
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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 Tenants obligations under this Lease are legally binding, do not require the
consent of any other parties and do not violate the provisions of any agreement to which Tenant is
a party.
C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.01
Repairs. Alterations and Further Improvements
.
A)
Tenants Obligation to Repair
. In the event of damage to or destruction of the
Tenants Building or any Improvements on or to the Premises to be covered by the insurance
described in Article 6:
(1)
Damages
of Less Than Fifty Percent (50%) of Replacement Cost
. If the cost of
repairing or reconstructing the Tenants Building or Improvements to the condition and form prior
to such damage or destruction is not in excess of Fifty percent (50%) of the then new replacement
cost of the Improvements and such repairs or reconstruction of any such damage or destruction can
be made under then existing laws, ordinances, statutes or regulations of any governmental
authorities applicable thereto (or can be so made with minor and non-material changes to the former
condition and form of property damaged or destroyed), Tenant shall effect, and Landlord and Tenant
agree that the funds derived from insurance acquired pursuant to Article 6 shall be made available
to effect, such repair and reconstruction of the structure or improvement so damaged or destroyed
to substantially its condition prior to said damage or destruction with such alterations thereto as
Tenant shall reasonably determine prudent or valuable under the circumstances, including any
changes required to comply with applicable law, with the then prevailing construction practices
applicable to the Premises. Tenant shall be responsible for all costs in excess of Insurance
proceeds available All such work shall be carried on in accordance with Drawings prepared by a
licensed architect or architects approved by Landlord (acting reasonably) if such an architect is
reasonably required, given the scope and nature of the work. In disbursing insurance proceeds the
Tenant and Landlord may rely upon and accept the certified determinations of such architect with
respect to estimated costs, awarding of contracts, sufficiency of bonds, progress of construction,
interpretation of plans and specifications, compliance with same, and completion of construction.
No extras or changes in Drawings shall be made by Tenant without first giving written notice of
such changes to Landlord and obtaining Landlords approval thereof (which approval shall not be
unreasonably withheld or delayed).
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(2)
Damage
in Excess of Fifty Percent (50%)
. If the cost of repairing or reconstructing
said damage or destruction to its former condition and form is in excess of the Fifty percent (50%)
provided in subparagraph (A)(1) of this Section 16.01, or if such cost is less than Fifty percent
(50%), but such reconstruction or rebuilding cannot be made under then existing laws, ordinances,
statutes or regulations of any governmental authority applicable thereto (and cannot be so made
with minor and non-material changes to the former condition and form of the property damaged or
destroyed), and, in any such event, the parties hereto are unable during a period of ninety (90)
days after the determination by Tenant with respect to such damage or destruction to agree in
writing on a construction program, then, at Tenants sole option, the Term shall end as of the date
of such damage or destruction, provided that Tenant notifies Landlord of its election to exercise
such termination option within such ninety (90) day period. If, however, such reconstruction or
rebuilding can be made under such existing laws, ordinances, statutes and regulations (or can be so
made with minor and non-material changes to the former condition and form of the property damaged
or destroyed), but the cost of so repairing or reconstructing such damage or destruction is in
excess of the Fifty percent (50%) provided for in subparagraph (A)(1) of this Section 16.01, Tenant
shall have the absolute right to treat such damage as under subparagraph (A)(1) of this Section
16.01 as if the damage or destruction met the description thereof set forth in the first sentence
of that Section if Tenant (i) gives notice to the effect to Landlord within such ninety (90) days
period after Tenants determination with respect to said damage or destruction; and (ii) promptly
demonstrates to the reasonable satisfaction of any Leasehold Mortgagee (if any) that it can provide
the funds required or that will be required under the provisions of subparagraph (A)(1) of this
Section 16.01 to effect such repair or restoration, whereupon the provisions of said subparagraph
(A) of this Section 16.01 shall be fully applicable to such damage or destruction.
16.02
Prompt Repair
. If Tenant, pursuant to the terms hereof, is obligated or elects
to repair, replace, reconstruct or rebuild any structures, improvements or other property as
hereinabove provided, the same shall be effected at Tenants cost and expense (which may be paid
from insurance proceeds available as above provided and subject to the provisions of
subparagraph(B) of Section 16.01), and Tenant shall diligently commence and continuously carry out
such repair, replacement, reconstruction or rebuilding, to full completion as soon as possible,
except to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts,
with contractors and suppliers.
16.03
Rent Adjustment
. This Lease and the Term shall not terminate or be terminated
because of damage to or destruction of any structure or improvement on or in the Premises except
under and in accordance with the provisions hereinabove contained. If such damage or destruction
occurs and renders all or a portion of the Improvements on the Premises untenantable, Rent shall
thereafter not abate but continue for as long as and to the extent such Improvements are
untenantable.
16.04
Damage During Last Two (2) Years of Term
. If there occurs during the last ten
(10) years of the Initial Term or at any time during a Renewal Period damage or destruction to any
Improvement on or in the Premises and the costs of repairing, restoring, replacing or rebuilding
the
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same exceed Five Thousand Dollars ($500,000), then Tenant may elect to terminate the Term and, in
such event, Tenant shall give notice to Landlord of its election within sixty (60) days after its
determination of the amount of damage, and the Term shall thereupon terminate as of the date of
such notice.
ARTICLE XVII
MISCELLANEOUS
17.01
Limitation on Liability
. The liability of Landlord hereunder or in connection
with the Premises or Entire Premises shall be limited to its interest in the Entire Premises and
in no event shall any other assets of Landlord be subject to any claim arising out of or in
connection with the Entire Premises.
17.02
Brokers
. Landlord and Tenant each represent to the other that neither has any
obligation to any broker or finder in connection with this transaction, and that no fee or
commission is due any broker, finder, or similar person in connection herewith. Landlord and
Tenant each indemnifies the other and agrees to hold the other harmless from and against any and
all claims, demands, liabilities, lawsuits, costs, and expenses (including reasonable attorneys
fees) for any fee or commission due to any other broker, finder, or similar person in connection
with this transaction and arising out of the act of the indemnifying party.
17.03
Modification
. No modification, waiver, amendment, discharge, or change of this
Lease shall be valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge, or change is or may be sought.
17.04
Severability
. In the event any term, covenant, condition, provision, or
agreement contained herein is held to be invalid, void, or otherwise unenforceable, by any court
of competent jurisdiction, such holding shall in no way affect the validity or enforceability of
any other term, covenant, condition, provision, or agreement contained herein.
17.05
Governing Law
. This Lease and the obligations of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of California and
each provision of this Lease shall be valid and enforceable to the fullest extent permitted by
Law.
17.06
Terminology
. All personal pronouns used in this Lease, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; the singular shall include
the plural and vice versa. Business Day means other than a Saturday, Sunday, or holiday. In the
event that the time for performance of an act under this Lease falls on a Saturday, Sunday, or
holiday, the date for performance of such act shall be extended to the next Business Day.
17.07
Counterparts
. This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original agreement, and all of which shall constitute one agreement
by each of the parties hereto.
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17.08
Binding Effect
. Except as otherwise herein provided, this Lease shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns.
17.09
Captions
. Article and section titles or captions contained herein are inserted as
a matter of convenience and for reference, and in no way define, limit, extend, or describe the
scope of this Lease or any provisions hereof. All reference to section numbers herein shall mean
the sections of this Lease.
17.10
Notices to Landlord and Tenant
.
A) Except as otherwise in this Lease provided, a bill, demand, statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 17.11 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the identity and
address of Tenants Leasehold Mortgagee, Landlord shall give such party any notice served upon
Tenant hereunder by certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully prepaid), addressed to Landlord to the addresses set forth in
Section 17.11 below or at such other address(es) as Landlord shall designate by notice given as
herein provided. If Tenant is notified of the identity and address of Landlords mortgagee or
beneficiary under a deed of trust, or ground or underlying lessor, Tenant shall give such party
notice of any default by Landlord hereunder by certified or private express mail carrier.
C) The time of the rendition of such bills or statements and of the giving of such consents,
notices, demands, requests or communications (collectively notice) by Tenant or Landlord shall
be deemed to be the earlier of (i) the date received by Tenant with respect to a notice to Tenant,
and the date received by Landlord with respect to a notice to Landlord (ii) if the notice is sent
by certified mail, five (5) days after the same is mailed, or (iii) if the notice is sent by
private overnight courier (e.g., Federal Express or similar courier), one (1) day after the same
is delivered to or picked up by such courier. Rejection or refusal to accept a notice, request,
demand, or the inability to deliver same because of a changed address of which no notice was given
shall be deemed to be a receipt of the notice, request or demand sent..
17.11
Addresses for Notices to Landlord and Tenant
.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Real Estate Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
17.12
Entire Agreement
. This Lease and the exhibits attached set forth the entire
agreement between the parties. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever as to any matter. Any prior agreements, conversations,
or writings are merged herein, superseded hereby, and extinguished.
17.13
Sale or Transfer of Premises
. Landlord shall promptly notify Tenant in writing
of any sale or transfer of the Premises or any assignment of Landlords 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 Landlords interest in this Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or involuntary, or
by act of Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other
charges payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that the
assignee assumes in writing Landlords obligations hereunder accruing on and after the effective
date of the assignment.
17.14
Force Majeure
. In the event that Tenant shall be delayed or hindered in or
prevented form the performance of any act other than Tenants obligation to make payments of rent,
and other charges required hereunder, by reason of strikes, lockouts, unavailability of materials,
failure of power, restrictive governmental laws or regulations, riots, insurrections, the default
of Landlord, war, or other reason beyond its control, then performance of such act shall be
excused for the period of the delay, and the period for the performance of such act shall be
extended for a period equivalent to the period of such delay. Notwithstanding the foregoing, lack
of funds shall not be deemed to be a cause beyond the control of Tenant.
17.15
Waiver
. No term, covenant, or condition of this Lease can be waived except in
writing, signed by the party making the waiver, Landlord or Tenant, as the case may be. No waiver
of any default hereunder shall be implied from any omission by either party to take any action on
account of such default if such default persists or is repeated, and no express waiver shall
affect any default other
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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 partys
consent to or approval of any subsequent similar act.
17.16
Estoppel Certificate
. Either party hereto shall, within twenty (20) days notice
from the other party (referred to as the Requesting Party), execute and deliver to the
Requesting Party, in recordable form, a certificate stating that this Lease is unmodified and in
full force and effect, or in full force and effect as modified, and stating the modifications. The
certificate also shall state the amount of current monthly rent, the dates to which the rent has
been paid in advance, the amount of prepaid rent, and any other information with respect to this
Lease reasonably requested by the Requesting Party. Failure to deliver the certificate within the
twenty (20) days shall be conclusive upon the party failing to deliver the certificate for the
benefit of the party requesting the certificate and any successor to the party requesting the
certificate, that this Lease is in full force and effect, and has not been modified except as may
be represented by the party requesting the certificate, and that rent and other charges have not
been paid for any period after date of the notice requesting the certificate.
17.17
Number and Gender
. Whenever the context requires the singular number, it shall
include the plural, the plural the singular, and the use of any gender shall include all genders.
17.18
No Holding Over
. Tenant shall have no right to holdover after the end of the
Term. Should Tenant or any Leasehold Mortgagee succeeding to the interest of Tenant hold over in
possession after the expiration date, such holding over shall not be deemed to extend the Lease or
renew this Lease; and Tenant shall pay a pro-rated daily amount equal to one hundred twenty
percent (120%) of the Annual Rent in effect immediately preceding the expiration date until Tenant
vacates the Premises.
17.19
Mechanics Liens
. Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed against the Premises or the Entire Premises in connection with Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail
to so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics
liens and charge all costs thereof, including without limitation, reasonable attorneys fees, to
Tenant as additional rent plus interest at 18%.
17.20
Relationship of Parties
. Nothing contained in this Lease shall be construed to
create the relationship of principal and agent, partnership, joint venture or any other
relationship between the parties hereto other than the relationship of Landlord and Tenant.
Nothing contained herein shall in any way impose any liability upon the stockholders, officers or
directors of Landlord or stockholders, officers, directors or trustees of Tenant should such
parties be corporate entities,
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17.21
Time of the Essence
. Time is of the essence with respect to Tenants payment of
rent and other monetary obligations to Landlord under this Lease.
17.22
Facsimile Copies
. Tenant and Landlord (i) have each agreed to permit the use,
from time to time and where appropriate, of telecopied signatures in order to expedite the
transaction contemplated by this Lease, (ii) each intend to be bound by its respective telecopied
signature, (iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
17.23
Anti-Merger
. The voluntary or otherwise surrender of this Lease by Tenant, or a
mutual cancellation of this Lease shall not work a merger but shall at the option of Landlord
either:
A) Terminate any existing subleases or subtenancies; or
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:
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CENTURY THEATRES OF CALIFORNIA, INC.,
a California corporation
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By:
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/s/ JOE SYUFY
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Print Name:
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Joe Syufy
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Title:
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Senior Exec VP
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LANDLORD:
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SYUFY ENTERPRISES, a
California Limited Partnership
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By:
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/s/ RAYMOND SYUFY
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Print Name:
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Raymond Syufy
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Title:
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President
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34
EXHIBIT 10.15(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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3
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ARTICLE IV: Rent
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4.01 Base Rent / Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
Impositions
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5
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5.02 Proration of Taxes
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6
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5.03 Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII: Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total
Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05
Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15 02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15 05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-l
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Exhibit B
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Site Plan of Premises
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B-l
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Exhibit C
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Form of Memorandum
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C-l
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Exhibit D
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Guaranty of Lease
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D-l
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF NEVADA, INC., a Nevada 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 and Theatre Improvements located in the State
of Nevada as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The
term Commencement Date shall mean October 1, 1995.
The
term Effective Date shall mean October 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to
pay interest under this Lease at the Default Rate.
The
Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
1
The term Leased Premises shall mean Tenants 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 Tenants 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 Tenants 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 (5
th
)
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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 Landlords insurance or
liability.
C) Tenant is granted an easement for ingress, egress and parking under all reciprocal
agreements that Landlord is entitled to for this property. In addition Tenant shall be obligated
to pay all costs and is granted all rights under all leases Landlord is a party to for this
property.
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 $38,333.33 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first
day of the sixth
(6
th
)
Lease Year and on the first day of each fifth
(5
th
) 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, Las Vegas
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 Landlords 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 Landlords 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
Tenants premises subject to the
Installment Election, Tenants 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 Landlords 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 Landlords 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
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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 Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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
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proceeds to Landlord for, and periodically during the course of, repair and restoration of
Tenants 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 Landlords 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 partys 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 Tenants
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 partys 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 that all such
alterations
or changes in Improvements and new Improvement 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 Landlords written approval shall be first obtained.
9
B) Tenant shall at all times keep the Premises or any part thereof, free and clear of
all liens and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.
7.02 Repairs Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01 Definition For purposes of this Article VIII, the term Hazardous Material means (a)
any substance, product, waste or other material of any nature whatsoever which is or becomes
listed, regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq. (RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste
Control Act, Health and Safety Code Section 25100, et seq.; the California Hazardous Substance
Account Act, Health and Safety Code Section 25330, et seq.; the California Safe Drinking Water and
Toxic Enforcement Act, Health and Safety Code Section 25249.5, et seq.; California Health and
Safety Code Section 25280, et seq. (Underground Storage of Hazardous Substances); the California
Hazardous Waste Management Act, Health and Safety Code Section 25170.1, et seq.; California Health
and Safety Code Section 25501, et seq. (Hazardous Materials Response Plans and Inventory); or the
California Porter-Cologne Water Quality Control Act, Water Code Section 13000, et seq., all as
amended, or any other federal, state or local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to, or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, as now or at any time
hereafter in effect; (b) any substance, product, waste or other material of any nature whatsoever
which may give rise to liability under any of the above statutes or under any statutory or common
law theory based on negligence, trespass, intentional tort, nuisance or strict liability or under
any reported decisions of a state or federal court; (c) petroleum or crude oil other than
petroleum and petroleum products contained within regularly operated motor vehicles; (d) asbestos;
(e) subsurface gas; (f) urea formaldehyde foam insulation; (g) poly chlorinated byphenyls
(PCBs); and freon and other chloroflurocarbons.
8.02 Tenants 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
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 Tenants (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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords
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, Landlords 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
Landlords 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 (as) 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants
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 Tenants 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 Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees, beneficiaries,
officers, shareholders, employees and agents (collectively, Tenants 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 parries for loss or damage due to such Hazardous Materials.
8.06 Landlord Inspection. Landlord and Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants 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 Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre
canopy or marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however.
Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the
Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the
property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof shall become the property of Landlord and all
appurtenant fixtures, machinery and equipment installed therein including moveable trade fixtures
and personal property of shall become the property of Tenant.
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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 Tenant 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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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 purpose of this Lease shall be the later of the date
on which the right to compensation and damages accrues or the date physical possession is
taken by the condemnor.
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B) Total Taking means the Taking of the fee title to 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, Tenants obligation to pay Rent shall
terminate on, and Tenants 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 Tenants 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
Tenants 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 Tenants 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 Landlords 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
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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 Landlords prior
right, during any continuance of Tenants default, to relet the Premises or a portion or portions
thereof.
C) Termination of Lease and Lessees 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 Tenants 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 and 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)
Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants
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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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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 Landlords
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 Landlords 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 Landlords knowledge there is-no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to pacefully 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 Tenants 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 Tenants 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)
Tenants 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 Tenants 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, shortage 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
Tenants 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 Nevada 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 Tenants
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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of Nevada, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
24
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in writing
Landlords 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 Tenants 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 partys 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 Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail
to so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics
liens and charge all costs thereof, including without limitation, reasonable attorneys fees, to
Tenant as additional rent plus interest at 18%.
18.19 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord
and Tenant. Nothing contained
herein shall in any way impose any liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees of
Tenant should such parties be corporate entities.
18.20 Time of the Essence. Time is of the essence with respect to Tenants 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 NEVADA, INC.,
a Nevada Corporation
By:
/s/ Joseph Syufy
Print Name: Joseph Syufy
Title:
V. P.
LANDLORD:
SYUFY ENTERPRISES
a California Limited Partnership
By:
/s/ Raymond W. Syufy
Print Name: Raymond W. Syufy
Title: G. P.
26
EXHIBIT 10.16(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01
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Attachments to Lease and Exhibits
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1
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1.02
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Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Option to Extend Lease Term
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3
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2.04
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Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01
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Use
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4
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ARTICLE IV: Rent
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4.01
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Base Rent / Minimum Monthly Rent
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4
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4.02
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Percentage Rent
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4
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4.03
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Rent Payments
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5
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4.04
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Place for Payment of Rent
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5
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4.05
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Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
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Impositions
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5
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5.02
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Proration of Taxes
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6
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5.03
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Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04
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Contest of Taxes
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6
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5.05
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Utilities
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7
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5.06
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Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01
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Acquisition of Insurance Policies
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7
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6.02
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Types of Required Insurance
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7
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6.03
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Terms of Insurance
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8
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6.04
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Landlords Acquisition of Insurance
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8
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6.05
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Insurance Money and Other Funds Held In Trust
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8
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6.06
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Application or Proceeds of Physical Damage Insurance
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8
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6.07
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Cooperation for Insurance Proceeds
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9
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6.08
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Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
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Alterations Changes
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9
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i
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CENTURY THEATRES
Table of Contents
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Page No.
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7.02
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Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01
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Definition
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10
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8.02
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Tenants Responsibilities and Landlord Indemnity
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10
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8.03
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Remedial Work
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11
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8.04
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Maintenance of Premises
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12
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8.05
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Landlords Responsibilities and Tenants Indemnity
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12
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8.06
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Landlord Inspection
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13
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8.07
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Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01
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Tenants Signs
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14
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9.02
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Hold Harmless .
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14
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9.03
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Permits; Compliance With Codes
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14
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9.04
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Ownership
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14
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9.05
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Control
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15
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ARTICLE X: Indemnity
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10.01
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Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01
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Assignment and Subletting
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15
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11.02
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Notice to Landlord
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16
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ARTICLE XII: Encumbrance of Leasehold Estate
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12.01
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Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01
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Existing Mortgages
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16
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13.02
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Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01
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Definitions
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16
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14.02
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Notice to Other Party
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17
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14.03
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Total Taking Effect on Rent and Term
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17
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14.04
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Distribution of Award for Taking
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17
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14.05
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Partial Taking Rent Adjustments
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18
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14.06
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Partial Taking Option to Terminate
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18
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14.07
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Separate Tenants Award
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18
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ARTICLE XV: Default
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Table of Contents
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Page No.
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15.01
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Tenants Default
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18
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15.02
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Landlords Remedies Cumulative
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18
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15.03
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Landlords Default
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20
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15.04
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Waiver of Redemption
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20
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15.05
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Dispute Resolution
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20
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15.06
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Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01
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Landlords Representations and Warranties
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21
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16.02
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Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01
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Repairs, Alterations and Further Improvements
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22
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17.02
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Prompt Repair
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22
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17.03
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Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01
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Limitation on Liability
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23
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18.02
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Modification
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23
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18.03
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Severability
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23
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18.04
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Governing Law
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23
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18.05
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Terminology
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23
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18.06
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Counterparts
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23
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18.07
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Binding Effect
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23
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18.08
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Captions
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23
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18.09
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Notice to Landlord and Tenant
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23
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18.10
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Addresses for Notices to Landlord and Tenant
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24
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18.11
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Entire Agreement
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24
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18.12
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Sale or Transfer of Premises
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24
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18.13
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Force Majeure
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25
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18.14
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Waiver
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25
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18.15
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Estoppel Certificate
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25
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18.16
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Number and Gender
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25
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18.17
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No Holding Over
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25
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18.18
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Mechanics Liens
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25
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18.19
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Relationship of Parties
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25
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18.20
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Time of the Essence
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26
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18.21
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Facsimile Copies
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26
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18.22
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Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-l
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Exhibit B
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Site Plan of Premises
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B-l
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Exhibit C
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Form of Memorandum
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C-l
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Exhibit D
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Guaranty of Lease
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D-l
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined
in red.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02 Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October
1,1995.
The term Effective Date shall mean October 1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased Premises,
parking, driveways and such other improvements as may presently exist or be added.
The Term Initial Rent Due Date shall mean October
1, 1995.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land
thereunder and the rights, easements and privileges granted to Tenant in this Lease.
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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 Leased Premises.
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 and retains the right to develop the unimproved
portion of the Entire Premises so long as it does not interfere with Tenants 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.
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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 Tenants 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
(5
th
)
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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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.
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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 Landlords insurance or
liability.
C) Tenant is granted a non-exclusive easement for parking and ingress and egress on and over
the Entire Premises. Tenant is responsible for all costs associated with the Entire Premises
exclusive of Landlords Building. The location of said easements may be changed at the sole
discretion of the Landlord so long as such change does not interfere with Tenants Permitted Use.
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 $139,166.67 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
(5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the sixth
(6
th
) Lease Year and on the
first day of
each fifth
(5
th
) 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, Las Vegas, 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
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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 Landlords 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 Landlords 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.
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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 Tenants premises subject to the Installment Election, Tenants 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 Landlords 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 Landlords 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
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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 Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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
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6.04
Landlords 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 XIV, 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 (B) (Physical Property Damage Insurance) the application of insurance
proceeds from damage or loss to property shall be determined in part in accordance with Article
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.
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 partys 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,
8
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
Tenants 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 partys 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 Landlords written approval shall be
first obtained.
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 Entire
Premises which shall include the Common Area, driveways, parking, landscaping, signs, fences,
lighting and any and all improvements (exclusive of Landlords Buildings) in first class condition
and make such structural and non-structural, ordinary and extraordinary, foreseen and unforeseen
repairs such that the Entire Premises (exclusive of Landlords Buildings) 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
9
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 Tenants 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 Tenants (or its
agents, employees, contractors or invitees) acts or omissions brought upon, stored, used, generated
or released into the environment by Tenant, its agents, employees, contractors or invitees
(referred to as Tenants 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 Tenants 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 Tenants 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 Tenants 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.
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C) In addition to Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up,containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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
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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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or disposed
of, on, in, under or about the Entire Premises, the Common Area, or any other portion of the
Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of any
law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
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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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
Limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenants Signs.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
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(2) Signs on the interior or exterior of any windows of Tenants
Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however
. Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall become
the property of Landlord.
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
14
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 Tenants 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
Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any
corporation which operates motion picture theatres and has a book net worth of not less than
$30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
15
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 Landlords 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.
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.
16
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, Tenants obligation to pay
Rent shall terminate on, and Tenants 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
17
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 Tenants Award. In the event of a Taking, Tenant may make a separate claim
with respect to lost business, lost profits, goodwill, moving expenses and other related damages
against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01 Tenants 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 Tenants 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 Landlords Remedies Cumulative. Landlord shall have the following remedies set forth in
subsections (A) through (G) below if Tenant commits a default, except as provided in Section 15.03.
These remedies are not exclusive and may be exercised concurrently or successively; they are
cumulative in addition to any remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or other
amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and thereupon
Landlord may expel all persons and remove all property therefrom, without becoming liable to
prosecution therefor, and relet the Premises or a portion or portions thereof, and receive the rent
therefrom, applying the same first to the payment of the reasonable expenses of such re-entry and
the reasonable cost of such reletting, and then to the payment of the Rent and other amounts for
which Tenant is then in default; the balance, if any, to be paid to Tenant, who, whether or not the
Premises are relet, shall remain liable for any deficiency. It is agreed that the commencement and
prosecution of any action by Landlord in forcible entry and detainer, ejectment, or otherwise, or
the appointment of a receiver, or any execution of any decree obtained in any action to recover
possession of the Premises, or any re-entry, shall not be construed as an election to terminate
this Lease unless Landlord shall, in writing, expressly exercise its election to declare the Lease
Term hereunder ended and to terminate this Lease, and unless this Lease be expressly terminated,
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 Landlords prior right, during any continuance of
Tenants default, to relet the Premises or a portion or portions thereof.
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C) Termination of Lease and Lessees 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 Tenants 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.
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) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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.
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15.03 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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:
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(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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets.
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises
which are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as
defined herein), or (ii) which are inconsistent with the obligations of
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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.
16.02 Tenants 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 Tenants 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) Tenants Obligation to Repair. If the Premises or the improvements to the Comman Area are
damaged by any peril after the Commencement date of the Lease, Tenant shall restore the Leased
Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to substantially the
same condition in which the Leased Premises or the Common Area Improvements 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 Tenants cost and expense (which may be paid from insurance proceeds
available as above provided) and Tenant shall diligently commence and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts, with
contractors and suppliers.
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 Tenants property or any inconvenience or annoyance caused by such restoration.
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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 hereto 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 rifles or captions contained hereto 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 18.10 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 Tenants 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 18.10 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 Landlords mortgagee or
beneficiary under a deed of mist, or ground or underlying lessor, Tenant shall give such party
notice of any default by landlord hereunder by certified or private express mail carrier.
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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.
18.10
Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco,CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or transfer of,
title in and to the Premises of any part thereof, whether voluntary
or involuntary, or by act of
Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other charges
payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that
the assignee assumes in writing Landlords 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 Tenants 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.
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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 ff 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 partys 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 fight 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 Tenants 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 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 Tenants 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.
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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.
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 Syufy
Title: [ILLEGIBLE]
26
EXHIBIT 10.17(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01
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Attachments to Lease and Exhibits
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1
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1.02
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Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Option to Extend Lease Term
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3
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2.04
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Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01
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Use
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4
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ARTICLE IV: Rent
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4.01
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Base Rent / Minimum Monthly Rent
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4
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4.02
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Percentage Rent
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4
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4.03
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Rent Payments
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5
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4.04
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Place for Payment of Rent
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5
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4.05
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Late Payment of Rent
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5
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ARTICLE V. Taxes, Assessments and Utilities
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5.01
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Impositions
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5
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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
|
|
Landlords Acquisition of Insurance
|
|
|
8
|
|
6.05
|
|
Insurance Money and Other Funds Held In Trust
|
|
|
8
|
|
6.06
|
|
Application or Proceeds of Physical Damage Insurance
|
|
|
8
|
|
6.07
|
|
Cooperation for Insurance Proceeds
|
|
|
9
|
|
6.08
|
|
Waiver of Right of Recovery
|
|
|
9
|
|
|
|
|
|
|
|
|
ARTICLE VII: Maintenance, Repairs And Alterations
|
|
|
|
|
7.01
|
|
Alterations Changes
|
|
|
9
|
|
i
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Table of Contents
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Page No.
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7.02
|
|
Repairs Maintenance
|
|
|
10
|
|
|
|
|
|
|
|
|
ARTICLE VIII: Environmental Matters
|
|
|
|
|
8.01
|
|
Definition
|
|
|
10
|
|
8.02
|
|
Tenants Responsibilities and Landlord Indemnity
|
|
|
10
|
|
8.03
|
|
Remedial Work
|
|
|
11
|
|
8.04
|
|
Maintenance of Premises
|
|
|
12
|
|
8.05
|
|
Landlords Responsibilities and Tenants Indemnity
|
|
|
12
|
|
8.06
|
|
Landlord Inspection
|
|
|
13
|
|
8.07
|
|
Effect of Termination
|
|
|
13
|
|
|
|
|
|
|
|
|
ARTICLE IX: Improvements
|
|
|
|
|
9.01
|
|
Tenants 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 Tenants Award
|
|
|
18
|
|
|
|
|
|
|
|
|
ARTICLE XV: Default
|
|
|
|
|
ii
LEASE
CENTURY THEATRES
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
Page No.
|
|
15.01
|
|
Tenants Default
|
|
|
18
|
|
15.02
|
|
Landlords Remedies Cumulative
|
|
|
18
|
|
15.03
|
|
Landlords 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
|
|
Landlords Representations and Warranties
|
|
|
21
|
|
16.02
|
|
Tenants Representations and Warranties
|
|
|
22
|
|
|
|
|
|
|
|
|
ARTICLE XVII: Damage or Destruction
|
|
|
|
|
17.01
|
|
Repairs, Alterations and Further Improvements
|
|
|
22
|
|
17.02
|
|
Prompt Repair
|
|
|
22
|
|
17.03
|
|
Rent Adjustment
|
|
|
23
|
|
|
|
|
|
|
|
|
ARTICLE XVIII: Miscellaneous
|
|
|
|
|
18.01
|
|
Limitation on Liability
|
|
|
23
|
|
18.02
|
|
Modification
|
|
|
23
|
|
18.03
|
|
Severability
|
|
|
23
|
|
18.04
|
|
Governing Law
|
|
|
23
|
|
18.05
|
|
Terminology
|
|
|
23
|
|
18.06
|
|
Counterparts
|
|
|
23
|
|
18.07
|
|
Binding Effect
|
|
|
23
|
|
18.08
|
|
Captions
|
|
|
23
|
|
18.09
|
|
Notice to Landlord and Tenant
|
|
|
23
|
|
18.10
|
|
Addresses for Notices to Landlord and Tenant
|
|
|
24
|
|
18.11
|
|
Entire Agreement
|
|
|
24
|
|
18.12
|
|
Sale or Transfer of Premises
|
|
|
24
|
|
18.13
|
|
Force Majeure
|
|
|
25
|
|
18.14
|
|
Waiver
|
|
|
25
|
|
18.15
|
|
Estoppel Certificate
|
|
|
25
|
|
18.16
|
|
Number and Gender
|
|
|
25
|
|
18.17
|
|
No Holding Over
|
|
|
25
|
|
18.18
|
|
Mechanics Liens
|
|
|
25
|
|
18.19
|
|
Relationship of Parties
|
|
|
25
|
|
18.20
|
|
Time of the Essence
|
|
|
26
|
|
18.21
|
|
Facsimile Copies
|
|
|
26
|
|
18.22
|
|
Anti-Merger
|
|
|
26
|
|
|
|
|
|
|
|
|
Signature Page
|
|
|
26
|
|
iii
LEASE
CENTURY THEATRES
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
Page No.
|
|
Exhibit A
|
|
Description of Premises
|
|
|
A-1
|
|
Exhibit B
|
|
Site Plan of Premises
|
|
|
B-1
|
|
Exhibit C
|
|
Form of Memorandum
|
|
|
C-1
|
|
Exhibit D
|
|
Guaranty of Lease
|
|
|
D-1
|
|
iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of
the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October
1, 1995.
The term Effective Date shall mean October
1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent
(4%) or (ii) the highest rate of interest that my lawfully be charged to the party then required to
pay interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October
1, 1995.
The term Initial Term is defined in
Section 2.02 herein.
1
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the
land hereunder and the rights, easements and privileges granted to Tenant in this Lease.
The term Mortgage shall mean any mortgage or deed of trust or other instrument in the
nature thereof evidencing a security interest in the Entire Premises or any part thereof.
The
term Number of Term Years shall mean 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 Tenants 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 Tenants 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
(5
th
)
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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 Landlords insurance or liability.
C) Tenant is granted all of Landlords rights in and to the Miracle Center Parking
Association.
Tenant shall be responsible for all costs, dues, insurance and impositions pertaining to the
Miracle Center Parking
Association.
ARTICLE IV
RENT
4.01
Minimum Monthly Rent.
A) Beginning on the Initial Rent Due Date, Tenant shall pay to Landlord during the Lease Term
a Base Rent of $66,666.67. 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the sixth
(6
th
)
Lease Year and on the first day of each fifth (5
th
) Lease Year thereafter during the Term by a percentage equal to the percentage of increase from the
base period (as hereinafter defined in this Section) of the United States Department of Labor,
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers, Los Angeles Subgroup All
Items, (1982-84=100) (the Consumer Price Index); provided, however, in no event shall the
Minimum Monthly Rent be increased by an amount that is less than
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 Landlords 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 Landlords 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 Tenants
premises subject to the
Installment Election, Tenants 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 Landlords 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
Landlords 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 Landlords 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 Tenants 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) Builders 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
builders 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 Tenants
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 Tenants
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 Landlords 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 Tenants 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
Tenants 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 Landlords Acquisition of Insurance. If Tenant at any time during the Term fails to
procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord shall have the right to
procure the same and to
pay any and all premiums thereon, and any amounts paid by Landlord in connection with the
acquisition of insurance
shall be immediately due and payable as additional rent, and Tenant shall pay to Landlord upon
demand the full amount
so paid and expended by Landlord. Any policies of insurance obtained by Landlord covering
physical damage to the
Premises shall contain a waiver of subrogation against Tenant if and to the extent such waiver
is obtainable and if Tenant
pays to Landlord on demand the additional costs, if any, incurred in obtaining such waiver.
6.05
Insurance Money and Other Funds Held in Trust. All insurance money or condemnation
proceeds as
provided in Article VIII, received by the Tenant shall be turned over to Landlord and held in
trust by Landlord and, except
as provided otherwise in Section 6.06, shall be applied as follows:
First, to any Leasehold Mortgagee as required under the terms of its Leasehold Mortgage
provided that such Mortgage was of record and secured a loan made or committed to Landlord in
compliance with all of the terms and conditions of this Lease prior to the occurrence of such
loss;
second
, for the purpose of defraying the cost of repairing, restoring, replacing
and/or rebuilding any structure or improvement on or in the Premises as required as provided in
Section 6.06 hereof, and
third
, if the damaged or destroyed structure or improvement is
not repaired, restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed
of as provided in Section 6.06. Any of said funds in the hands of the Tenant or Landlord at the
end of the Term hereof shall be disposed of as set forth in Section 6.06 (A).
6.06 Application or Proceeds of Physical Damage Insurance. In case of any insurance policies
as described in
Section 6.02 (C) (Physical Property Damage Insurance) the application of insurance proceeds
from damage or loss to
property shall be determined in part in accordance with Article XVII hereof and, in the event
of any such repair,
replacement, restoration or rebuilding, the Landlord shall disburse the proceeds of the
insurance collected to Tenant to pay
the cost of such work upon certificate of satisfactory progress and/or completion in form
satisfactory to Landlord by the
licensed architect or engineer in charge of the work. Upon completion of such repair,
replacement, restoration or
rebuilding in accordance with the provisions of this Lease, and the full payment therefor (so
no liens, encumbrances or
claims with respect thereto can be asserted against the Premises, this-lsease, Landlord or
Tenant), any insurance proceeds
received by the Landlord or Tenant with respect to the damage or destruction involved, and not
used, shall remain the
property of Landlord.
8
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such
insurance proceeds or condemnation awards received and held by the Landlord and not used for
repair, replacement or reconstruction (Available
Proceeds), shall be disposed as follows:
(1)
First
, Landlord shall be awarded an amount sufficient to remove any improvements
not
repaired and to return the Property to the level of adjacent streets (grade level); and
(2)
Second
, any remainder shall be paid to Landlord.
6.07 Cooperation for Insurance Proceeds. Landlord and Tenant shall each cooperate with the
other in order
to obtain the largest possible recovery and execute any and all consents and other instruments
and take all other actions
reasonably necessary or desirable to effectuate the same and cause such proceeds to be paid as
hereinbefore provided.
Notwithstanding anything to the contrary contained in this Lease,
neither party shall carry any
insurance concurrent in
coverage and contributing in the event of loss with any insurance required to be furnished by
the other hereunder if the
effect of separate insurance would be to reduce the protection or the payment to be made under
such partys 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 Tenants 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 partys 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 Landlords
written approval shall be first obtained.
9
B) Tenant shall at all times keep the Premises or any part thereof free and clear of all
liens and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.
7.02 Repairs Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01
Definition. For purposes of this Article VIII, the term Hazardous Material means (a) any
substance,
product, waste or other material of any nature whatsoever which is or becomes Listed,
regulated, or addressed pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section
9601, et seq.
(CERCLA); the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the
Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq. (RCRA); the Toxic Substances Control Act,
15 U.S.C. Section 2601
et seq.; the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste
Control Act, Health and
Safety Code Section 25100, et seq.; the California Hazardous Substance Account Act, Health and
Safety Code Section
25330, et seq.; the California Safe Drinking Water and Toxic Enforcement Act, Health and
Safety Code Section 25249.5,
et seq.; California Health and Safety Code Section 25280, et seq. (Underground Storage of
Hazardous Substances); the
California Hazardous Waste Management Act, Health and Safety Code Section 25170.1, et seq.;
California Health and
Safety Code Section 25501, et seq. (Hazardous Materials Response Plans and Inventory); or the
California Porter-Cologne
Water Quality Control Act, Water Code Section 13000, et seq., all as amended, or any other
federal, state or local statute,
law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards
of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now
or at any time hereafter in
effect; (b) any substance, product, waste or other material of any nature whatsoever which may
give rise to liability under
any of the above statutes or under any statutory or common law theory based on negligence,
trespass, intentional tort,
nuisance or strict liability or under any reported decisions of a state or federal court; (c)
petroleum or crude oil, other than
petroleum and petroleum products contained within regularly operated motor vehicles; (d)
asbestos; (e) subsurface gas; (f)
urea formaldehyde foam insulation; (g) poly chlorinated byphenyls (PCBs); and freon and
other chloroflurocarbons.
8.02 Tenants 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
Tenants (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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords
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, Landlords 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
Landlords 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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
Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords
other rights and remedies under this Lease, to immediately enter upon the Premises and to
discharge Tenants obligations
under this Article VIII at Tenants expense, notwithstanding any other provisions of this
Lease. Landlord and Landlords
agents and employees shall endeavor to minimize interference with Tenants 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 Tenants 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 Tenants 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
Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre
canopy or marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in
front of Tenants 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 Landlords 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
Landlords defense, including
attorneys fees;
provided
,
however.
Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of
legal counsel) cannot represent both Landlord and Tenant without there arising an actual or
potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents
and approvals required to be obtained from governmental agencies or third parties in
connection with construction of the
Improvements and any subsequent improvements, repairs, replacements or renewals to the
Premises shall be acquired as
required by applicable laws, ordinances or regulations. Landlord agrees to cooperate
reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises
during the Term to be
performed in accordance with all applicable laws and all directions and regulations of all
governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.
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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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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.
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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, Tenants obligation to pay
Rent shall
terminate on, and Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees 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 Tenants 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) Landlords Right to Cure Tenants Default Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants
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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any
amount due from Landlord
against the next Rent payment due under this Lease.
15.4 Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption
granted by or
under any present or future laws in the event of Tenant being dispossessed or removed from the
Premises upon the
termination of this Lease because of default by Tenant hereunder.
15.5 Dispute Resolution. Landlord and Tenant desire by provisions of this Section 15.05 to
establish procedures
to facilitate the informal and inexpensive resolution of any dispute arising out of this Lease
by mutual cooperation and
without resort to litigation. To accomplish this objective, Landlord and Tenant agree to
follow the procedures set forth
below if and when a dispute arises between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written description
of the alleged breach by the other party. This description shall explain the nature of the
complaint and the Lease
provision(s) on which it is based. The complaining party shall also set forth a proposed
solution to the problem including
a specific time frame within which the parties must act. The parry receiving the letter of
complaint must respond in
writing within ten (10) days with an explanation, including references to the relevant parts
of the Lease and a response to
the proposed solution. Within ten (10) days of receipt of this response, the parties must
meet and discuss options for
resolving the dispute. The complaining party must initiate the scheduling of the resolution
meeting.
B) Mediation. A settlement conference shall be held within thirty (30) days of the
unsuccessful
resolution meeting or as soon as practical thereafter. The settlement conference shall be
held in the County of San
Francisco, California.
C) Arbitration. With respect to disputes which the parties have been unable to resolve
informally
or by mediation, the parties agree to submit the dispute for final and binding arbitration if
the dispute has not otherwise
been settled. The parties agree that the arbitration must be initiated within one (1) year
after the date of the written
description of the alleged breach and that the failure to initiate arbitration within the one
(1) year period constitutes an
20
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated
for the purposes of this section by demand therefor being sent by certified mail to the other
party which notice shall contain a description of the dispute, the amount involved and the
remedies sought. The parties shall have the right to representation by counsel throughout the
arbitration proceedings. All rulings, decisions, and awards of the arbitrators shall be in
conformance with California law. The award may be judicially enforced pursuant to §1285 et seq of
the California Code of Civil Procedure. Each party shall bear their own costs of legal counsel and
the fees for witnesses, unless otherwise determined by the arbitrator as part of the award. The
parties may establish the scope of discovery by agreement. If the parties cannot agree, the
arbitrator will have discretion to define the limits of discovery and to allow discovery upon a
showing of good cause, utilizing the following guidelines:
(1) The arbitrator shall balance the benefits of discovery against the burdens and
expenses to the parties and the goals of arbitration as an alternative to traditional
litigation.
(2) The arbitrator shall have discretion to order pre-hearing exchange of
information,
including but not limited to, the production of requested documents and exchanges of summaries of
testimony of proposed witnesses.
(3) The deposition of the claimant(s) and respondent(s) and form sets of
interrogatories
approved by the Judicial Council shall be allowed as a matter of
right. There shall be an early and
prompt designation and exchange of the names and addresses of expert witnesses who may be called
upon to testify at the arbitration hearing. Their depositions, special interrogatories, requests
for admission and all other discovery shall be allowed only upon a showing of good cause.
15.06 AttorneysFees. 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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
21
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills
as they
come due or that its liabilities exceed its assets.
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects
or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord prior
to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or
permit or suffer to be created any liens or encumbrances on the Premises which are (i) not
specifically stated in writing to
be junior to this Lease, or any New Lease (as defined herein), or (ii) which are inconsistent
with the obligations of
Landlord hereunder, and Landlord shall, at or prior to the commencement of the Term, cause the
Premises to be free of all
liens and encumbrances. Title to the Premises shall be free of all Objected Exceptions.
16.02 Tenants 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 Tenants 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) Tenants 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 Tenants 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
Tenants property or any inconvenience or annoyance caused by such restoration.
ARTICLE XVIII
MISCELLANEOUS
18.01 Limitation on Liability. The lability of Landlord hereunder or in connection with
the Premises or Entire
Premises shall be limited to its interest in the Premises and/or Entire Premises, as the case
may be, and in no event shall
any other assets of Landlord be subject to any claim arising out of or in connection with the
Lease, Premises, or Entire
Premises.
18.02 Modification. No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless
the same is in writing and signed by the party against which the enforcement of such
modification, waiver, amendment,
discharge, or change is or may be sought.
18.03 Severability. In the event any term, covenant, condition, provision, or agreement
contained herein is held to
be invalid void, or otherwise unenforceable, by any court of competent jurisdiction, such
holding shall in no way affect the
validity or enforceability of any other term, covenant, condition, provision, or agreement
contained herein.
18.04 Governing Law. This Lease and the obligations of the parties hereunder shall be
interpreted, construed and
enforced in accordance with the laws of the State of California and each provision of this
Lease shall be valid and
enforceable to the fullest extent permitted by Law.
18.05 Terminology. All personal pronouns used in this Lease, whether used in the masculine,
feminine, or neuter
gender, shall include all other genders; the singular shall include the plural and vice versa
Business Day means other
than a Saturday, Sunday, or holiday. In the event that the time for performance of an act
under this Lease falls on a
Saturday, Sunday, or holiday, the date for performance of such act shall be extended to the
next Business Day.
18.06 Counterparts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to
be an original agreement, and all of which shall constitute one agreement by each of the
parties hereto.
18.07 Binding Effect. Except as otherwise herein provided, this Lease shall be binding upon
and inure to the
benefit of the parties hereto and their respective successors and assigns.
18.08 Captions. Article and section titles or captions contained herein are inserted as a
matter of convenience and
for reference, and in no way define, limit, extend or describe the scope of this Lease or any
provisions hereof. All
reference to section numbers herein shall mean the sections of this Lease.
18.09
Notices to Landlord and Tenant.
A) Except as otherwise in this Lease provided a bill, demand statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 18.12 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the
identity and address of Tenants
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 Landlords
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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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Tenant and Landlord may change their respective addresses for purposes of this section by
giving written notice of such change to the other.
18.11
Entire Agreement. This Lease and the exhibits attached set forth the entire agreement
between the parties.
Except as specifically set forth herein, there are no agreements, representations, or
warranties whatsoever as to any matter.
Any prior agreements, conversations, or writings are merged herein, superseded hereby, and
extinguished.
18.12 Sate or Transfer of Premises. Landlord shall promptly notify Tenant in writing of any
sale or transfer of the
Premises or any assignment of Landlords 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 Landlords interest in this
Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or
involuntary, or by act of Landlord or by
operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord
hereunder, thereafter accruing, until Tenant shall have been notified in writing of such
transfer, assignment, or change in
tide, and given satisfactory proof thereof, and the withholding of rent or other charges
payable by Tenant to Landlord
hereunder, in the meantime shall not be deemed a default upon the
part of Tenant. Landlord may
assign this Lease and
convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord
24
shall have no further obligations under this Lease, except for liabilities which shall
have accrued prior to the date of such assignment and transfer and that the assignee assumes in
writing Landlords obligations hereunder accruing on and after the effective date of the
assignment.
18.13 Force Maieure. In the event that Tenant shall be delayed or hindered in or prevented
form the performance
of any act other than Tenants 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 partys 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 Tenants work and/or any
alterations or other work done by
or on behalf of Tenant in the Premises within thirty (30) days after Tenant receives notice of
the filing of such lien, and
Landlord shall cooperate with Tenant at no expense to Landlord, in order to accomplish such
discharge. Should Tenant
fail to so discharge any such mechanics lien, Landlord shall have the right to remove such
mechanics liens and charge all
costs thereof, including without limitation, reasonable attorneys fees, to Tenant as
additional rent plus interest at 18%.
18.19 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of
principal and agent, partnership, joint venture or any other relationship between the parties
hereto other than the
relationship of Landlord and Tenant. Nothing contained herein shall in any way impose any
liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees
of Tenant should such parties be corporate entities.
18.20 Time of the Essence. Time is of the essence with respect to Tenants 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.
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TENANT:
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CENTURY THEATRES OF CALIFORNIA, INC.,
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a California Corporation
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By: /s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: V.P.
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LANDLORD:
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SYUFY ENTERPRISES
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a California Limited Partnership
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By: /s/ Raymond W. Syufy
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Print Name: Raymond W. Syufy
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Title: G.P.
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26
EXHIBIT
10.18(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent /Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions Proration of Taxes
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6
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5.03 Omitted
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs-Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total
Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04
Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14
Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A Description of Premises.
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A-1
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Exhibit B Site Plan of Premises.
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B-1
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Exhibit C Form of Memorandum.
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C-1
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Exhibit D Guaranty of Lease.
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined
in red..
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The
term Commencement Date shall mean October 1, 1995.
The
term Effective Date shall mean October 1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased Premises,
parking, driveways and such other improvements as may presently exist or be added.
The Term Initial Rent Due Date shall mean October 1,
1995.
The term Initial Term is defined in Section 2.02
herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land
thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 Leased Premises.
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 and retains the right to develop the unimproved
portion of the Entire Premises so long as it does not interfere with Tenants 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.
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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 Tenants 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
(5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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.
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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 Landlords insurance or
liability.
C) Tenant shall be subject to, responsible for all costs and granted all rights to the
Reciporcal Parking Agreement covering the Entire Premises. Additionally Tenant shall be subject
to, responsible for all costs and granted all rights to the Easement Agreement with Tanforan
Associates.
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 $75,333.33. 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 (6
th
) Lease Year and on the first day of each
fifth (5
th
) 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
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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 Landlords 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 Entire Premises, or the rents
receivable therefrom, or any part thereof or any use thereon or any facility located therein or
used in connection therewith, whether or not any of the foregoing shall be a so-called real
estate tax expressly excluding, however, any other items arising directly or indirectly out of
any act or omission of Landlord, any of Landlords 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 Entire Premises and/or the
Improvements on the Entire 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.
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B) With respect to Impositions which are assessed on any
Buildings exclusive of the Entire Premises, Tenant shall pay all
such impositions. With respect to Impositions which by law may
be paid in installments over a period of time, Tenant 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 Tenant 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 Landlords
Buildings subject to the Installment Election, Landlords 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 Tenant had in fact made the
Installment Election. Landlord shall pay all such real property
taxes to the Tenant prior to delinquency. In the event Tenant
fails to pay to Landlord such real property taxes as
provided herein, Landlord shall pay Tenant in addition interest
thereon at the rate of 18% per annum from the delinquency date
until such payment has been made.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a
tax shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy
or charge, measured or based, in whole or in part, on the Entire 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 Entire Premises were the only property of
Landlord subject to such taxes, or the income from operation of the Entire Premises were Landlords
only income, as the case may be. In the event of such assessment, Landlord would pay Tenant any
such assessment related to any Buildings other than the Leased Premises located on the Entire
Premises.
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 5.04. Tenant shall indemnify, protect and hold harmless Landlord
and the Premises from any lien or liability with respect to any such Imposition or contest thereof,
including all costs and expenses related thereto. Landlord shall provide Tenant with copies of
notice when received by Landlord from the taxing authorities of any assessments or reassessments of
the Premises in sufficient time (but in no event later than thirty (30) days after Landlords
receipt of the same) to enable Tenant to contest the same in accordance with the provisions of this
Section 5.04.
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 Entire Premises including the Common Area but exclusive of Landlords buildings.
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 Tenants 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.
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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 Entire
Premises (exclusive of the interior of Landlords Buildings), Leased Premises, Common Area and the
appurtenances thereto, including the sidewalks and alleyways adjacent thereto, with limits of
liability no less than Ten Million Dollars ($10,000,000) per occurrence and in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenants
Building (excluding foundations, footings and underground improvements) and personal property as
well as all Improvements on the Common area, (Landlords Buildings excluded), including, but not
limited to, signs, outdoor lighting fixtures and fences 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, but
including Builders Risk, to the extent of not less than the full replacement value thereof less any
deductible applicable to all of Tenants 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 Landlords 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 Tenants 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 proceeds to Landlord for,
and periodically during the course of, repair and restoration of Tenants 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 thirty (30) 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.
7
6.04 Landlords 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 XIV, 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 (B) (Physical Property Damage Insurance) the
application of insurance proceeds from damage or loss to property shall be determined in
part in accordance with Article 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.
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 partys 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,
8
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
Tenants 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 partys 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 Landlords
written approval shall be first obtained.
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 Entire
Premises which shall include the Common Area, driveways, parking, landscaping, signs, fences,
lighting and any and all improvements (exclusive of Landlords Buildings) in first class
condition and make such structural and non-structural, ordinary and
extraordinary, foreseen and unforeseen repairs such that the Entire Premises (exclusive of
Landlords Buildings) 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
9
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 Tenants 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 Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the environment by Tenant, its agents, employees, contractors or invitees (referred
to as Tenants 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 Tenants 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 Tenants 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 Tenants 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.
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C) In addition to Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up, containment, restoration, removal or other remedial work (Remedial Work) is
required (a) under any applicable federal, state or local law or regulation, (b) by any
judicial, arbitral or administrative order, (c) to comply with any agreements affecting the
Premises or (d) to maintain the Premises in a standard of environmental condition which
presents no risk to safety or health, prevents the release of any hazardous materials to
adjacent property and otherwise is consistent with the prudent ownership of property of the
character of the Premises and/or Tenants Building and if such Remedial Work is required as a
direct result of Tenants Environmental Acts, then Tenant at Tenants 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 Tenants Environmental Acts, then, Landlord, at Landlords
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 partys 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
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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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or disposed
of, on, in, under or about the Entire Premises, the Common Area, or any other portion of the
Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of any
law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
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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 Landlords 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
Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to
immediately enter upon the Premises and to discharge Tenants obligations under this
Article VIII at Tenants expense, notwithstanding any other provisions of this Lease.
Landlord and Landlords agents and employees shall endeavor to minimize interference
with Tenants business. All sums reasonably disbursed, deposited or incurred by
Landlord in connection therewith, including, but not limited to, all costs, expenses and
actual attorneys fees, shall be due and payable by Tenant to Landlord, as an item of
additional rent, on demand by Landlord, together with interest thereon at the rate often
percent (10%) per annum.
8.07 Effect of Termination.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the best of Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenants Signs.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have
the right to maintain the following signs (at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
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(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03
Permits: Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or
extensions), the Improvements erected, constructed or located within the
Premises, including without limitation all additions, alterations and
improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of
Tenant. At the expiration or earlier termination of this Lease, the
Improvements and all additions, alterations and improvements thereto or
replacements thereof and all appurtenant fixtures, machinery and equipment
installed therein including moveable trade fixtures and personal property of
shall become the property of Landlord.
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
14
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 Tenants 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 Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any
corporation which operates motion picture theatres and has a book net worth of not less than
$30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
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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 Landlords 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.
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.
16
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, Tenants obligation to pay
Rent shall terminate on, and Tenants 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
17
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 Tenants Award. In the event of a Taking, Tenant may make a separate claim with
respect to lost business, lost profits, goodwill, moving expenses and other related damages against
the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01
Tenants 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 Tenants 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 Landlords Remedies Cumulative. Landlord shall have the following remedies set
forth in subsections (A) through (G) below if Tenant commits a default except as
provided in Section 15.03. These remedies are not exclusive and may be exercised
concurrently or successively; they are cumulative in addition to any remedies now or
later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or other
amounts for which Tenant is then
in
default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and thereupon
Landlord may expel all persons and remove all property therefrom, without becoming liable to
prosecution therefor, and relet the Premises or a portion or portions thereof, and receive the rent
therefrom, applying the same first to the payment of the reasonable expenses of such
re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its election
to declare the Lease Term hereunder ended and to terminate this Lease, and unless this Lease be
expressly terminated, 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
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C) Termination of Lease and Lessees 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 Tenants 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.
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) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any time, by
reason of Tenants 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.
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15.03 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 payments) within fifteen (15) days
after Tenants 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
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:
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(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 claimants(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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises
which are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as
defined herein), or (ii) which are inconsistent with the obligations of
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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.
16.02 Tenants 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 Tenants 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) Tenants Obligation to Repair. If the Premises or the improvements to the Comman Area are
damaged by any peril after the Commencement date of the Lease, Tenant shall restore the Leased
Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to substantially the
same condition in which the Leased Premises or the Common Area Improvements 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 Tenants cost and expense (which may be paid from insurance proceeds
available as above provided) and Tenant shall diligently commence and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts, with
contractors and suppliers.
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
Tenants property or any inconvenience or annoyance caused by such restoration.
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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 parry 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 18.10 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 Tenants 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 18.10
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 Landlords 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.
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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.
18.10 Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or transfer of, title
in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of Landlord
or by operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been notified in writing
of such transfer, assignment, or change in title, and given satisfactory proof thereof, and the
withholding of rent or other charges payable by Tenant to Landlord hereunder, in the meantime shall
not be deemed a default upon the part of Tenant. Landlord may assign this Lease and convey its title
to the Premises, subject to this Lease, at any time. In the event of such assignment of this Lease,
Landlord shall have no further obligations under this Lease, except for liabilities which shall
have accrued prior to the date of such assignment and transfer and that the assignee assumes in
writing Landlords 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 Tenants 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
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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
partys 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 parry (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 Tenants 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 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 Tenants 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.
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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.
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TENANT:
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CENTURY THEATRES OF CALIFORNIA, INC.,
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a California Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
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Joseph Syufy
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Title:
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V. P.
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LANDLORD:
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SYUFY ENTERPRISES
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a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title:
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G. P.
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26
EXHIBIT
10.19(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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ARTICLE I: Definitions Exhibits
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1.01
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Attachments to Lease and Exhibits
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1
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1.02
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Definitions
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ARTICLE II: Premises Term Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Option to Extend Lease Term
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3
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2.04
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Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01
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Use
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4
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ARTICLE IV: Rent
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4.01
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Base Rent / Minimum Monthly Rent
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4
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4.02
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Percentage Rent
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4
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4.03
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Rent Payments
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5
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4.04
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Place for Payment of Rent
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5
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4.05
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Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
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Impositions
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5
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5.02
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Proration of Taxes
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6
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5.03
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Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04
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Contest of Taxes
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6
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5.05
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Utilities
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7
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5.06
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Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01
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Acquisition of Insurance Policies
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7
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6.02
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Types of Required Insurance
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7
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6.03
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Terms of Insurance
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8
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6.04
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Landlords Acquisition of Insurance
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8
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6.05
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Insurance Money and Other Funds Held In Trust
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8
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6.06
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Application or Proceeds of Physical Damage Insurance
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8
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6.07
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Cooperation for Insurance Proceeds
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9
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6.08
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Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
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Alterations Changes
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9
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i
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CENTURY THEATRES
Table of Contents
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Page No.
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7.02
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Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01
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Definition
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10
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8.02
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Tenants Responsibilities and Landlord Indemnity
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10
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8.03
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Remedial Work
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11
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8.04
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Maintenance of Premises
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12
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8.05
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Landlords Responsibilities and Tenants Indemnity
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12
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8.06
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Landlord Inspection
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13
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8.07
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Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01
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Tenants Signs
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14
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9.02
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Hold Harmless
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14
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9.03
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Permits; Compliance With Codes
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14
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9.04
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Ownership
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14
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9.05
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Control
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15
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ARTICLE X: Indemnity
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10.01
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Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01
|
|
Assignment and Subletting
|
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15
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11.02
|
|
Notice to Landlord
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|
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16
|
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ARTICLE XII: Encumbrance of Leasehold Estate
|
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12.01
|
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Leasehold Mortgages
|
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16
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ARTICLE XIII: Mortgage Subordination
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13.01
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Existing Mortgages
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16
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13.02
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Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01
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Definitions
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16
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14.02
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|
Notice to Other Party
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17
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14.03
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Total Taking Effect on Rent and Term
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17
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14.04
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Distribution of Award for Taking
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17
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14.05
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|
Partial Taking Rent Adjustments
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18
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14.06
|
|
Partial Taking Option to Terminate
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18
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14.07
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Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
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CENTURY THEATRES
Table of Contents
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Page No.
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15.01
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Tenants Default
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18
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15.02
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|
Landlords Remedies Cumulative
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18
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15.03
|
|
Landlords Default
|
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20
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15.04
|
|
Waiver of Redemption
|
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20
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15.05
|
|
Dispute Resolution
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|
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20
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15.06
|
|
Attorney Fees
|
|
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21
|
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ARTICLE XVI: Representations and Warranties
|
|
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16.01
|
|
Landlords Representations and Warranties
|
|
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21
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16.02
|
|
Tenants Representations and Warranties
|
|
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22
|
|
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ARTICLE XVII: Damage or Destruction
|
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17.01
|
|
Repairs, Alterations and Further Improvements
|
|
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22
|
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17.02
|
|
Prompt Repair
|
|
|
22
|
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17.03
|
|
Rent Adjustment
|
|
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23
|
|
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ARTICLE XVIII: Miscellaneous
|
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18.01
|
|
Limitation on Liability
|
|
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23
|
|
18.02
|
|
Modification
|
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23
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18.03
|
|
Severability
|
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23
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18.04
|
|
Governing Law
|
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23
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18.05
|
|
Terminology
|
|
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23
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18.06
|
|
Counterparts
|
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23
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18.07
|
|
Binding Effect
|
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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
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18.14
|
|
Waiver
|
|
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25
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18.15
|
|
Estoppel Certificate
|
|
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25
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18.16
|
|
Number and Gender
|
|
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25
|
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18.17
|
|
No Holding Over
|
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25
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18.18
|
|
Mechanics Liens
|
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25
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18.19
|
|
Relationship of Parties
|
|
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25
|
|
18.20
|
|
Time of the Essence
|
|
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26
|
|
18.21
|
|
Facsimile Copies
|
|
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26
|
|
18.22
|
|
Anti Merger
|
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26
|
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
|
|
Description of Premises
|
|
A-l
|
Exhibit B
|
|
Site Plan of Premises
|
|
B-l
|
Exhibit C
|
|
Form of Memorandum
|
|
C-l
|
Exhibit D
|
|
Guaranty of Lease
|
|
D-l
|
iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to
pay interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
1
The term Leased Premises shall mean Tenants 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 (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 Tenants Permitted Use.
B) The Premises are being leased in their as is condition subject to Article VII 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 Tenants 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 Landlords 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 $47,500.00 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the sixth (6
th
) Lease Year and on the first day of each fifth (5
th
) 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
8% which of the Gross Sales for such Lease Year exceeds the Base Rent which is payable for such Lease
Year equal to the quotient obtained by dividing the annual fixed rate for such Lease year by the
percentage rate.
Gross Sales shall mean all box office receipts, sales of goods, merchandise, beverages, food,
vending machines and video games. Gross sales shall exclude credits and refunds made with respect
to admissions or other sales; all federal, state, county and city admission taxes, sales taxes and
other similar taxes now or hereafter imposed (whether such taxes are collected from customers
separately from the selling price of admission tickets or absorbed therein, and
4
actually paid over to the taxing authority by Tenant; commissions paid to agencies or other third
parties for selling tickets; returned, exchanged, waived or Pass Admissions including EBF
charges on Pass Admissions and any sums paid to third parties for the use or rental of vending
machines, pay telephones or other amusement machines.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
office of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with
the delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the Payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales.
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If it
is determined as a result of such audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due any payable with interest at the
annual rate of 18% from the date when said payment should have been made until paid. Any
information gained from such statements or inspection shall be confidential and shall not be
disclosed other than to carry out the purposes hereof. If such audit shall disclose that Tenant has
understated the Gross Sales for such Lease Year by more than three (3%) and Landlord is entitled to
any additional Annual Percentage Rent, Tenant shall pay to Landlord all of Landlords 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 Landlords 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 feet so elected. With respect to
each year in which the Installment Election is effective and with respect to the Impositions associated with Tenants
premises subject to the Installment Election, Tenants 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 Landlords 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 Landlords 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 Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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 Tenants
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 Landlords 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 partys 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 Tenants 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 partys 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 Landlords 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 Tenants 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, attomey 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 Tenants (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 Tenants
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
Tenants 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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 die 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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns,
and their directors, trustees, beneficiaries, officers, shareholders, employees and
agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any
provision of tins 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 Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre
canopy or marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided,
however
, Tenant shall be liable for attorneys fees
only if single legal counsel (or a single firm of legal counsel) cannot represent both Landlord
and Tenant without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies
having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the
Improvements erected, constructed or located within the Premises, including without
limitation all additions, alterations and improvements thereto or replacements
thereof and all appurtenant fixtures, machinery and equipment installed therein,
shall be and remain the property of Tenant. At the expiration or earlier termination
of this Lease, the Improvements and all additions, alterations and improvements
thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property
of shall become the property of Landlord.
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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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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.
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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, Tenants obligation to pay
Rent shall terminate on, and Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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
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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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees 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 Tenants 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) Landlords Right to Cure Tenants Default Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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 dale 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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to
peacefully and quietly have, hold, occupy and enjoy the premises, subject to the terms of this
Lease without hindrance or molestation from Landlord or any person claiming by, from or under
Landlord.
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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 hiens 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 Tenants 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 Tenants 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) Tenants 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 Tenants cost and expense (which may be paid
from insurance proceeds available as above provided) and Tenant shall diligently commence and
continuously cany out such repair, replacement, reconstruction or rebuilding, to.full completion as
soon as possible, except to the extent of delays due to strikes, lookouts, 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 Tenants 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
(retrun 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 Tenants
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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
24
shall have no further obligations under this Lease, except for Liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in
writing Landlords obligations hereunder accruing on and after the effective date of the
assignment.
18.13 Force Maieure. In the event that Tenant shall be delayed or hindered in or prevented
form the performance of any act other than Tenants 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
partys 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 hens filed against the Premises or the Entire Premises in connection with Tenants 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 hens
and charge all costs thereof, including without limitation, reasonable attorneys fees, to Tenant
as additional rent plus interest at 18%.
18.19 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord
and Tenant. Nothing contained
herein shall in any way impose any liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees of
Tenant should such parties be corporate entities.
18.20 Time of the Essence. Time is of the essence with respect to Tenants payment of rent
and other monetary obligations to Landlord under this Lease.
18.21 Facsimile Copies. Tenant and Landlord (i) have each agreed to permit the use, from
time to time and where appropriate, of telecopied signatures in order to expedite the transaction
contemplated by this Lease, (ii) each intend to be bound by its respective telecopied signature,
(iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
18.22 Anti-Merger. The voluntary or otherwise surrender of this Lease by Tenant, or a mutual
cancellation of this Lease shall not work a merger but shall at the option of Landlord either:
A) Terminate any existing subleases or subtenancies; or
B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
Executed as of the date first written above.
TENANT:
CENTURY THEATRES OF CALIFORNIA, INC.,
a
California Corporation
By:
/s/ Joseph Syufy
Print Name: Joseph Syufy
Title: V.P.
LANDLORD:
SYUFY ENTERPRISES
a California Limited Partnership
By:
/s/ Raymond W.
Syufy
Print Name: Raymond W. Syufy
Title: G.P.
26
EXHIBIT
10.20(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent / Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Proration of Taxes
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6
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5.03 Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX:
Improvements
9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
11.01 Assignment and Subletting
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11.02 Notice to Landlord
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16
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ARTICLE XII: Encumbrance of Leasehold Estate
12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
13.01 Existing Mortgages
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
14.01 Definitions
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14.02 Notice to Other Party
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17
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14.03 Total Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE
XVII: Damage or Destruction
17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
18.01 Limitation on Liability
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23
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18.02 Modification
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-l
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Exhibit B
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Site Plan of Premises
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B-l
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Exhibit C
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Form of Memorandum
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C-l
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Exhibit D
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Guaranty of Lease
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D-l
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant
of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease
and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October 1,
1995.
The term Effective Date shall mean October
1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent
(4%) or (ii) the highest rate of interest that my lawfully be charged to the party then required to
pay interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October 1,
1995.
The term Initial Term is defined in Section 2.02
herein.
1
The term Leased Premises shall mean Tenants 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 Tenants 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 Tenants option, extend the Initial Term of this
Lease for up to two (2) consecutive additional periods of five (5) 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 (5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants 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
property 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 Landlords 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 Landlords 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 $35,833.33. 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
(5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never
decreased) on the first day of the sixth
(6
th
) Lease Year and on the first
day of each fifth
(5
th
) 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 Landlords 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 Landlords 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 Tenants premises subject to the Installment Election, Tenants 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 Landlords 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 Landlords 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 Landlords 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 Propertv Taxes. During the term of this Lease, Tenant shall pay before
delinquency any and all personal properly taxes levied or assessed against any personal properly
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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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
Tenants 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 Landlords 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.
8
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such insurance
proceeds or condemnation awards received and held by the Landlord and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(1)
First,
Landlord shall be awarded an amount sufficient to remove any
improvements not repaired and to return the Property to the level of adjacent streets (grade
level); and
(2)
Second
, any remainder shall be paid to Landlord.
6.07 Cooperation for Insurance Proceeds. Landlord and Tenant shall each cooperate with the
other in order to obtain the largest possible recovery and execute any and all consents and other
instruments and take all other actions reasonably necessary or desirable to effectuate the same and
cause such proceeds to be paid as hereinbefore provided. Notwithstanding anything to the contrary
contained in this Lease, neither party shall carry any insurance concurrent in coverage and
contributing in the event of loss with any insurance required to be furnished by the other
hereunder if the effect of separate insurance would be to reduce the protection or the payment to
be made under such partys 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 Tenants 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 partys reasonable control unable to obtain a waiver of the
right of subrogation for the benefit of the other party, then, du
ring
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 Landlords written
approval shall be-first obtained.
9
B)
Tenant shall at all times keep the Premises or any part thereof, free and clear of all
liens and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.
7.02 Repairs Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01 Definition. For purposes of this Article VIII, the term Hazardous Material means (a) any
substance, product, waste or other material of any nature whatsoever which is or becomes listed,
regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq. (RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean
Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste Control Act, Health and
Safety Code Section 25100, et seq.; the California Hazardous Substance Account Act, Health and
Safety Code Section 25330, et seq.; the California Safe Drinking Water and Toxic Enforcement Act,
Health and Safety Code Section 25249.5, et seq.; California Health and Safety Code Section 25280, et
seq. (Underground Storage of Hazardous Substances); the California Hazardous Waste Management Act,
Health and Safety Code Section 25170.1, et seq.; California Health and Safety Code Section 25501,
et seq. (Hazardous Materials Response Plans and Inventory); or the California Porter-Cologne Water
Quality Control Act, Water Code Section 13000, et seq., all as amended, or any other federal, state
or local statute, law, ordinance, resolution, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in effect; (b) any
substance, product, waste or other material of any nature whatsoever which may give rise to
liability under any of the above statutes or under any statutory or common law theory based on
negligence, trespass, intentional tort, nuisance or strict liability or under any reported
decisions of a state or federal court; (c) petroleum or crude oil, other than petroleum and
petroleum products contained within regularly operated motor vehicles; (d) asbestos; (e) subsurface
gas; (f) urea formaldehyde foam insulation; (g) poly chlorinated byphenyls (PCBs); and freon and
other chloroflurocarbons.
8.02 Tenants 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
Tenants (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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 ail 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 Landlords 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, Landlords 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 Landlords 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants 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 outer 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,
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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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants 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 Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants Building, provided the same do not unreasonably interfere with pedestrian traffic.
9.2 Hold Harmless. Except to the extent attributable to the intentional or negligent acts or
omissions of Landlord or Landlords 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 Landlords defense, including
attorneys fees;
provided,
however
, Tenant shall be liable for attorneys 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.
9.3 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.
9.4 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and
improvements thereto or replacements thereof and all appurtenant fixtures, machinery and equipment
installed therein,
shall be and remain the property of Tenant. At the expiration or earlier termination of this Lease,
the Improvements and all additions, alterations and improvements thereto or replacements thereof and all appurtenant
fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord
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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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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, Tenants obligation to pay
Rent shall terminate on, and Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees 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 proximatery caused by Tenants 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) Landlords Right to Cure Tenants Default. Landlord, at any time after
Tenant is in default under Section 15.01 herein, may cure the default at
Tenants expense. If Landlord, at any time, by reason of Tenants 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 Landlords 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 Landlords expense. If Tenant at any time, by
reason of Landlords 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 Tenants 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
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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 cither 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
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Landlords Representations and Warranties. Landlord
represents and warrants:
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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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
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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 Tenants 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 Tenants 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) Tenants 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 herein above
provided, the same shall be effected at Tenants 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
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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
Tenants 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 Tenants
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Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private express
courier (postage fully prepaid), addressed to Landlord to the addresses set forth in Section 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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
24
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in
writing Landlords obligations hereunder accruing on and after the effective date of the
assignment.
18.13 Force Maieure. In the event that Tenant shall be delayed or hindered in or prevented
form the performance of any act other than Tenants 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
partys 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 Tenants 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 Tenants 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:
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CENTURY THEATRES OF CALIFORNIA, INC.,
a California Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
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Joseph Syufy
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Title:
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V.P.
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LANDLORD:
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title:
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G.P.
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26
EXHIBIT 10.21(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base
Rent / Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Exceptions from Impositions; Charges in Lieu of
Impositions Proration of Taxes
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6
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5.03 Omitted
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terras of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs
Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Defeult
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 BindingEffect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No HoldingOver
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A Description of Premises
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A-1
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Exhibit B Site Plan of Premises
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B-1
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Exhibit C Form of Memorandum
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C-1
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Exhibit D Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102,
hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined
in red.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions
.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October
1,1995.
The term Effective Date shall mean October
1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased Premises,
parking, driveways and such other improvements as may presently exist or be added.
The Term Initial Rent Due Date shall mean October 1,
1995.
The term Initial Term is defined in Section
2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land
thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 Leased Premises.
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 and retains the right to develop the
unimproved portion of the Entire
Premises so long as it does not interfere with Tenants 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 Tenants option, extend the Initial Term of this
Lease for up to two (2)
consecutive additional periods of five (5) 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 (5
th
) anniversary of the date of
commencement of the Renewal Term in question, unless sooner terminated as provided herein.
B) Failure to duty exercise the option for any Renewal Term shall nullify the option for the
remaining Renewal Terms.
C) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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 Landlords insurance or liability.
C) Tenant is granted a non-exclusive easement for parking and ingress and egress on and over
the Entire Premises. Tenant is responsible for all costs associated with the Entire Premises
exclusive of Landlords
Building. The location of said easements may be changed at the sole discretion of the Landlord
so long as such change
does not interfere with Tenants Permitted Use. Tenant shall be subject to Landlords License
Agreement with Lester
Industrial Park and be responsible for all costs related thereto.
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 $139,166.66 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never decreased)
on the first
day of the sixth
(6
th
)
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, Las Vegas,
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 Landlords 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 Landlords 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 are assessed on any Buildings exclusive of the Entire
Premises, Tenant shall pay all such impositions. With respect to Impositions which by law may be
paid in installments over a period of time, Tenant 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 Tenant 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 Landlords
Buildings subject to the Installment Election, Landlords 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 Tenant had in fact made the Installment Election. Landlord shall pay
all such real property taxes to the Tenant prior to delinquency. In the event Tenant fails to pay
to Landlord such real property taxes as provided herein, Landlord shall pay Tenant in addition
interest thereon at the rate of 18% per annum from the delinquency date until such payment has
been made.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor
shall any of the same be deemed
to be included within the term Impositions as defined
herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this
Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in
whole or in part) or as a supplement to (provided such supplemental tax relates to real estate
or revenues from real estate
and not to other property or business as well) the taxes now levied, assessed or imposed on
real estate and buildings and
Improvements thereon, a tax shall be imposed, assessed or levied wholly or partly on the Rent,
or a tax, assessment, levy
or charge, measured or based, in whole or in part, on the Entire 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 Entire Premises were the only property of Landlord subject to such taxes, or
the income from operation of
the Entire Premises were Landlords only income, as the case may be. In the event of such
assessment, Landlord would
pay Tenant any such assessment related to any Buildings other than the Leased Premises located
on the Entire Premises.
5.04 C
ontest 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 5.04. Tenant shall indemnify, protect and hold harmless Landlord
and the Premises from
any lien or liability with respect to any such Imposition or contest thereof, including all
costs and expenses related thereto.
Landlord shall provide Tenant with copies of notice when received by Landlord from the taxing
authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than
thirty (30) days after Landlords
receipt of the same) to enable Tenant to contest the same in accordance with the provisions of
this Section 5.04.
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 Entire Premises including the
Common Area but exclusive
of Landlords buildings.
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 Tenants 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.
6
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 Entire
Premises (exclusive of the interior of Landlords Buildings), Leased Premises, Common Area and the
appurtenances thereto, including the sidewalks and alleyways adjacent thereto, with limits of
liability no less than Ten Million Dollars ($10,000,000) per occurrence and in the aggregate.
B)
Physical Property Damage Insurance
. During the term hereof, Tenant shall keep
Tenants
Building (excluding foundations, footings and underground improvements) and personal property
as well as all
Improvements on the Common area, (Landlords Buildings excluded), including, but not limited
to, signs, outdoor
lighting fixtures and fences 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, but including Builders Risk, to the extent of not
less than the full
replacement value thereof less any deductible applicable to all of Tenants 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 Landlords 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
Tenants 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 proceeds to Landlord for, and periodically
during the course
of, repair and restoration of Tenants 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 thirty (30) 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.
7
6.04
Landlords 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 XIV, 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 (B) (Physical Property Damage Insurance) the application of insurance proceeds
from damage or loss to
property shall be determined in part in accordance with Article 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.
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 partys 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,
8
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
Tenants 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 partys 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 Landlords written approval shall be first
obtained.
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
Entire Premises which shall
include the Common Area, driveways, parking, landscaping, signs, fences, lighting and any and
all improvements
(exclusive of Landlords Buildings) in first class condition and make such structural and
non-structural, ordinary and
extraordinary, foreseen and unforeseen repairs such that the Entire Premises (exclusive of
Landlords Buildings) 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
9
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
Tenants 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
Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the
environment by Tenant, its agents, employees, contractors or invitees (referred to as
Tenants 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
Tenants 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 Tenants 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
Tenants 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.
10
C) In addition to Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords
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, Landlords 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
Landlords consent before taking such action.
8.03
Remedial Work
. In the event any investigation or monitoring of site conditions
or any clean-up,
containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants Environmental Acts,
then, Landlord, at Landlords 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
partys 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
11
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 Landlords invoice therefor, or
(ii) in the case where Landlord is the responsible parry, shall be paid by Landlord to Tenant
within thirty (30) days of Tenants 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 Tenants 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
Landlords Responsibilities and Tenants Indemnity
.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or
disposed of, on, in, under or about
the Entire Premises, the Common Area, or any other portion of the Premises by Landlord, its
agents, employees, tenants,
contractors or invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to
the Entire Premises which may
be filed or prepared by or on behalf of, or delivered to or served upon, Landlord: all orders,
reports, listings and
correspondence (even those which may be considered confidential) of or concerning the release,
investigation of,
compliance, clean up, remedial and corrective actions, and abatement of Hazardous Materials
whether or not required by
any applicable laws, including, but not limited to, reports and notices required by any
applicable laws, including, but not
limited to, reports and notices required by or given pursuant to any applicable laws, and all
complaints, pleading and other
legal documents filed against Landlord related to Landlords or Landlords other tenants 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
Tenants successors and assigns, and their directors, trustees, beneficiaries, officers,
shareholders, employees and agents
(collectively, Tenants 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,
12
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 Landlords 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
Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords
other rights and remedies under this Lease, to immediately enter upon the Premises and to
discharge Tenants obligations
under this Article VIII at Tenants expense, notwithstanding any other provisions of this
Lease. Landlord and Landlords
agents and employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific
nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the
date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01
Tenants Signs
.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs
shall be maintained
at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at
Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
13
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in
front of Tenants 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 Landlords 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
Landlords defense, including
attorneys fees;
provided,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of
legal counsel) cannot represent both Landlord and Tenant without there arising an actual or
potential conflict of interests.
9.03
Permits: Compliance With Codes
. All building permits and other permits, licenses,
permissions, consents
and approvals required to be obtained from governmental agencies or third parties in
connection with construction of the
Improvements and any subsequent improvements, repairs, replacements or renewals to the
Premises shall be acquired as
required by applicable laws, ordinances or regulations. Landlord agrees to cooperate
reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises
during the Term to be
performed in accordance with all applicable laws and all directions and regulations of all
governmental agencies and the
representatives of such agencies having jurisdiction.
9.04
Ownership
.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all
additions, alterations and
improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein,
shall be and remain the property of Tenant. At the expiration or earlier termination of this
Lease, the Improvements and
all additions, alterations and improvements thereto or replacements thereof and all
appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of
Landlord.
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
14
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 Tenants 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
Landlords 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 landlords 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, or (b) to any subsidiary or affiliate corporation of Tenant
or of Tenants parent
corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any corporation which operates
motion picture
theatres and has a book net worth of not less than $30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
15
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 Landlords 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.
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.
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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, Tenants obligation
to pay Rent shall
terminate on, and Tenants 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
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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 Tenants Award
. In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses and other related
damages against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01
Tenants 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 Tenants 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
Landlords Remedies Cumulative
. Landlord shall have the following remedies set
forth in subsections (A)
through (G) below if Tenant commits a default, except as provided in Section 15.03. These
remedies are not exclusive
and may be exercised concurrently or successively; they are cumulative in addition to any
remedies now or later allowed
by law or equity:
A)
Bring Suit for Performance
. Landlord may bring suit for the collection of the Rent
or other
amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon
Tenant, all without having to enter into possession or terminate this Lease;
B)
Re-Entry Without Termination
. Pursuant to California Civil Code Section 1954.4,
Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises
have been abandoned), and
take possession thereof, without thereby terminating this Lease, and thereupon Landlord may
expel all persons and
remove all property therefrom, without becoming liable to prosecution therefor, and relet the
Premises or a portion or
portions thereof, and receive the rent therefrom, applying the same first to the payment of
the reasonable expenses of such
re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which
Tenant is then in default; the balance, if any, to be paid to Tenant, who, whether or not the
Premises are relet, shall remain
liable for any deficiency. It is agreed that the commencement and prosecution of any action by
Landlord in forcible entry
and detainer, ejectment, or otherwise, or the appointment of a receiver, or any execution of
any decree obtained in any
action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease
unless Landlord shall, in writing, expressly exercise its election to declare the Lease Term
hereunder ended and to
terminate this Lease, and unless this Lease be expressly terminated, 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 Landlords prior right, during any continuance of Tenants default, to relet
the Premises or a portion or
portions thereof.
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C)
Termination of Lease and Lessees Right to Possession
. No act by Landlord,
other than
giving Tenant written notice of termination of this Lease, shall in
feet 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 Tenants 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.
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)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is in
default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants
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.
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15.03
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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 tea (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
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:
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(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
Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to
the Premises or the Entire Premises, nor does Landlord know or have reasonable grounds to know
of any basis for such
action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly
have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from
Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they
come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects
or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord prior
to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or
permit or suffer to be created any liens or encumbrances on the Premises which are (i) not
specifically stated in writing to
be junior to this Lease, or any New Lease (as defined herein), or (ii) which are inconsistent
with the obligations of
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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.
16.02
Tenants 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 Tenants 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 parry.
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)
Tenants Obligation to Repair
. If the Premises or the improvements to the Comman
Area are damaged by any peril after the Commencement date of the Lease, Tenant shall restore the
Leased Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to
substantially the same condition in which the Leased Premises or the Common Area Improvements 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 Tenants cost and
expense (which may be paid from insurance proceeds available as above provided) and Tenant
shall diligently commence
and continuously carry out such repair, replacement, reconstruction or rebuilding, to full
completion as soon as possible,
except to the extent of delays due to strikes, lockouts, shortages of labor or materials after
due diligence in obtaining the
same, governmental restrictions, fire, casualty, riot, act of God, act of the public enemy, or
other causes beyond the
reasonable control of Tenant after the exercise of due diligence, including diligence in
contracting, and the exercise of
rights under contracts, with contractors and suppliers.
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 Tenants property or any inconvenience or annoyance caused by such
restoration.
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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 18.10 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 Tenants
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 18.10 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 Landlords
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.
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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.
18.10
Addresses for Notices to Landlord and Tenant
.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this
Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or
involuntary, or by act of Landlord or by
operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord
hereunder, thereafter accruing, until Tenant shall have been notified in writing of such
transfer, assignment, or change in
title, and given satisfactory proof thereof, and the withholding of rent or other charges
payable by Tenant to Landlord
hereunder, in the meantime shall not be deemed a default upon the
part of Tenant. Landlord may
assign this Lease and
convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such
assignment and transfer and that the assignee assumes in writing Landlords 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 Tenants 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.
24
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 partys 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 Tenants 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 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 Tenants 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.
25
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.
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TENANT
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CENTURY THEATRES OF CALIFORNIA, INC.,
a California Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
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Joseph Syufy
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Title:
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V.P.
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LANDLORD
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title:
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G.P
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26
EXHIBIT 10.22(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I:
Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II:
Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III:Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent / Minimum Monthly Rent
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4
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4.02
Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late
Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions Proration of Taxes
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6
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5.03 Omitted
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI:
Insurance
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6.01
Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total
Taking Effect on Rent and Term
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17
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14.04
Distribution of Award for Taking
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17
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14.05
Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02
Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19
Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-1
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Exhibit B
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Site Plan of Premises
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B-1
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Exhibit C
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Form of Memorandum
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C-1
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Exhibit D
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Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYCAL PROPERTIES,
INC., a California Corporation 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, Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined
in red.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Entire Premises shall mean the Land including Buildings, the Leased Premises,
parking, driveways and such other improvements as may presently exist or be added.
The Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land
thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 Leased Premises.
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 shall retain the area presently operated as a cocktail
lounge and said cocktail lounge shall not be a part of this lease.
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 Tenants 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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 Landlords insurance or
liability.
C) Landlord is granted an easement for parking and ingress and egress on and over the Entire
Premises for patrons of the Cocktail Lounge.
D) As part of this Lease, Tenant is granted all rights under the CC&Rs created by the owners
of the Contra Costa Shopping Center. Tenant shall be responsible for all costs related to said
CC&Rs.
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 $61,000.00. 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 4.01B
below.
B) The Minimum Monthly Rent shall apply from the Rent Commencement Date through the end
of the fifth (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but
never decreased) on the first day of the sixth (6
th
) Lease Year and on the first day of
each fifth (5
th
) 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
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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 Landlords 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 Landlords 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.
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B) With respect to Impositions which are assessed on any Buildings exclusive of the
Entire
Premises, Tenant shall pay all such impositions. With respect to Impositions which by law may be
paid in installments over a period of time, Tenant 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 Tenant 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 Landlords
Buildings subject to the Installment Election, Landlords 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 Tenant had in fact made the Installment Election. Landlord shall pay
all such real property taxes to the Tenant prior to delinquency. In the event Tenant fails to pay
to Landlord such real property taxes as provided herein, Landlord shall pay Tenant in addition
interest thereon at the rate of 18% per annum from the delinquency date until such payment has
been made.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term
Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be
changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a
tax shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy
or charge, measured or based, in whole or in part, on the Entire 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 Entire Premises were the only property of
Landlord subject to such taxes, or the income from operation of the Entire Premises were
Landlords only income, as the case may be. In the event of such assessment, Landlord would pay
Tenant any such assessment related to any Buildings other than the Leased Premises located on the
Entire Premises.
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 5.04. Tenant shall indemnify, protect and hold harmless
Landlord and the Premises from any lien or liability with respect to any such Imposition or contest
thereof, including all costs and expenses related thereto. Landlord shall provide Tenant with
copies of notice when received by Landlord from the taxing authorities of any assessments or
reassessments of the Premises in sufficient time (but in no event later than thirty (30) days
after Landlords receipt of the same) to enable Tenant to contest the same in accordance with the
provisions of this Section 5.04.
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 Entire Premises including the Common Area but exclusive of Landlords buildings.
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 Tenants 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.
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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 Entire Premises
(exclusive of the interior of the Cocktail Lounge), Leased Premises, Common Area and the
appurtenances thereto, including the sidewalks and alleyways adjacent thereto, with limits of
liability no less than Ten Million Dollars ($10,000,000) per occurrence and in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenants
Building (excluding foundations, footings and underground improvements) and personal property as
well as all Improvements on the Common area, (the cocktail lounge included), including, but not
limited to, signs, outdoor lighting fixtures and fences 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 Tenants 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 Landlords 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 Tenants 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 proceeds to Landlord for, and periodically during the course
of, repair and restoration of Tenants 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 thirty (30) 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.
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6.04 Landlords 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 XTV, 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 (B) (Physical Property Damage
Insurance) the application of insurance proceeds from damage or loss to property
shall be determined in part in accordance with Article 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.
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 partys 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,
8
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
Tenants 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 parry 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 partys 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 parry 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 Landlords
written approval shall be first obtained.
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 Entire
Premises which shall include the Common Area, driveways, parking, landscaping, signs, fences,
lighting and any and all improvements (exclusive of Landlords Buildings) in first class
condition and make such structural and non-structural, ordinary and extraordinary, foreseen and
unforeseen repairs such that the Entire Premises (exclusive of interior of Cocktail Lounge) 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
9
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 Tenants 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
Tenants (or its agents, employees, contractors or invitees) acts or omissions brought upon,
stored, used, generated or released into the environment by Tenant, its agents, employees,
contractors or invitees (referred to as Tenants 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 Tenants 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 Tenants 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 Tenants
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.
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C) In addition to Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such
action.
8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up,
containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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
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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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any Hazardous
Materials to be brought upon, stored, used, generated, released into the environment or disposed
of, on, in, under or about the Entire Premises, the Common Area, or any other portion of the
Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of any
law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
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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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B)
All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenants Signs.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
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(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however.
Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.
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
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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 Tenants 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
Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or
(e) to any corporation which operates motion picture theatres and has a book net worth of not less
than $30,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
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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 Landlords 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.
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.
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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
14.3 Total Taking Effect on Rent and Term. On a Total Taking, Tenants obligation to pay
Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the date of
Taking, at which time this Lease shall terminate.
14.4 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.
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 Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 14.04 out of amounts awarded by the
governmental body taking the Premises.
14.5 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.
14.6 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
17
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 Tenants Award. In the event of a Taking, Tenant may make a separate claim
with respect to lost business, lost profits, goodwill, moving expenses and other related damages
against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01 Tenants 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 Tenants 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 Landlords Remedies Cumulative. Landlord shall have the following remedies set forth in
subsections (A) through (G) below if Tenant commits a default, except as provided in Section 15.03. These
remedies are not exclusive and may be exercised concurrently or successively; they are cumulative in addition to any
remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and
thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its
election to declare the Lease Term hereunder ended and to terminate this Lease, and unless this
Lease be expressly terminated, 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 Landlords prior
right, during any continuance of Tenants default, to relet the Premises or a portion or portions
thereof.
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C) Termination of Lease and Lessees 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 Tenants 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.
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) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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.
19
15.03 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any
amount due from Landlord against the next Rent payment due under this Lease.
15.4 Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being dispossessed or
removed from the Premises upon the termination of this Lease because of default by Tenant
hereunder.
15.5 Dispute Resolution. Landlord and Tenant desire by provisions of this Section 15.05 to
establish procedures to facilitate the informal and inexpensive resolution of any dispute arising
out of this Lease by mutual cooperation and without resort to litigation. To accomplish this
objective, Landlord and Tenant agree to follow the procedures set forth below if and when a
dispute arises between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written
description of the alleged breach by the other party. This description shall explain the nature of
the complaint and the Lease provision(s) on which it is based. The complaining party shall also
set forth a proposed solution to the problem including a specific time frame within which the
parties must act. The 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
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:
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(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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or permit or suffer to be created any liens or encumbrances on the Premises which are (i) not
specifically stated in writing to be junior to this Lease, or any New Lease (as defined herein), or (ii) which are inconsistent
with the obligations of
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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.
16.02 Tenants 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 Tenants 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) Tenants Obligation to Repair. If the Premises or the improvements to the Comman Area are
damaged by any peril after the Commencement date of the Lease, Tenant shall restore the Leased
Premises or the Common Area improvements 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 or the Common Area improvements to the extent then allowed by Law, to substantially the
same condition in which the Leased Premises or the Common Area Improvements 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.
17.2 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 Tenants cost and expense (which may be paid from insurance proceeds
available as above provided) and Tenant shall diligently commence and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts,
with contractors and suppliers.
17.3 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
Tenants property or any inconvenience or annoyance caused by such restoration.
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ARTICLE XVIII
MISCELLANEOUS
18.1 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.
18.2 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.
18.3 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.
18.4 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.
18.5 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.
18.6 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.
18.7 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.
18.8 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.
18.9 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 18.10 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 Tenants 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 18.10 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 Landlords 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.
23
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.
18.10 Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Sycal Properties, Inc.
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or transfer of,
title in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of
Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other charges
payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that
the assignee assumes in writing Landlords 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 Tenants 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.
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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 partys
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 Tenants 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 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 Tenants 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.
25
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.
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TENANT:
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CENTURY THEATRES OF CALIFORNIA, INC.,
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a California Corporation
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By:
/s/Joseph Syufy
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Print Name: Joseph Syufy
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Title: V.P.
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LANDLORD:
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SYCAL PROPERTIES, INC.
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a California Corporation
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By:
/s/Alam Steuer
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Print Name: Alam Steuer
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Title: CFO
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26
EXHIBIT 10.23(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01
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Attachments to Lease and Exhibits
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1
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1.02
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Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Option to Extend Lease Term
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3
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2.04
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Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01
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Use
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4
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ARTICLE IV: Rent
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4.01
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Base Rent / Minimum Monthly Rent
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4
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4.02
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Percentage Rent
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4
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4.03
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Rent Payments
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5
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4.04
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Place for Payment of Rent
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5
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4.05
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Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
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Impositions
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5
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5.02
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Proration of Taxes
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6
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5.03
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Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04
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Contest of Taxes
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6
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5.05
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Utilities
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7
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5.06
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Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01
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Acquisition of Insurance Policies
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7
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6.02
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Types of Required Insurance
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7
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6.03
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Terms of Insurance
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8
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6.04
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Landlords Acquisition of Insurance
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8
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6.05
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Insurance Money and Other Funds Held In Trust
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8
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6.06
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Application or Proceeds of Physical Damage Insurance
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8
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6.07
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Cooperation for Insurance Proceeds
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9
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6.08
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Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
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Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02
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Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01
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Definition
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10
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8.02
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Tenants Responsibilities and Landlord Indemnity
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10
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8.03
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Remedial Work
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11
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8.04
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Maintenance
of Premises
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12
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8.05
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Landlords Responsibilities and Tenants Indemnity
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12
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8.06
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Landlord Inspection
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13
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8.07
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Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01
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Tenants Signs
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14
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9.02
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Hold Harmless
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14
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9.03
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Permits; Compliance With Codes
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14
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9.04
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Ownership
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14
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9.05
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Control
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15
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ARTICLE X: Indemnity
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10.01
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Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01
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Assignment and Subletting
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15
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11.02
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Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01
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Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01
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Existing Mortgages
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16
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13.02
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Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01
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Definitions
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16
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14.02
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Notice to Other Party
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17
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14.03
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Total Taking
Effect on Rent and Term
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17
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14.04
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Distribution of Award for Taking
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17
|
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14.05
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|
Partial Taking Rent Adjustments
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|
|
18
|
|
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14.06
|
|
|
Partial Taking Option to Terminate
|
|
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18
|
|
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14.07
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Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01
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Tenants Default
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18
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15.02
|
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|
Landlords Remedies Cumulative
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|
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18
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|
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15.03
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Landlords Default
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20
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15.04
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Waiver of Redemption
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20
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15.05
|
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|
Dispute Resolution
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20
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15.06
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Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01
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Landlords Representations and Warranties
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21
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16.02
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Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01
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Repairs, Alterations and Further Improvements
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22
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17.02
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Prompt Repair
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|
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22
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17.03
|
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Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01
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Limitation on Liability
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23
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18.02
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Modification
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23
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18.03
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Severability
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23
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18.04
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Governing Law
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23
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18.05
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Terminology
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23
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18.06
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Counterparts
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23
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18.07
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Binding Effect
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23
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18.08
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Captions
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23
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18.09
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|
Notice to Landlord and Tenant
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23
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18.10
|
|
|
Addresses for Notices to Landlord and Tenant
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|
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24
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18.11
|
|
|
Entire Agreement
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|
|
24
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18.12
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|
|
Sale or Transfer of Premises
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|
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24
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18.13
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Force Majeure
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25
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18.14
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Waiver
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25
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18.15
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Estoppel Certificate
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25
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18.16
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Number and Gender
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25
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18.17
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No Holding Over
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25
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18.18
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Mechanics Liens
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25
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18.19
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Relationship of Parties
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25
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18.20
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Time of the Essence
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26
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18.21
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Facsimile Copies
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26
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18.22
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Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A Description of Premises
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A-l
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Exhibit B Site Plan of Premises
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B-l
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Exhibit C Form of Memorandum
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C-l
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Exhibit D Guaranty of Lease
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D-l
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The
term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent
(4%) or (ii) the highest rate of interest that my lawfully be charged to the party then required
to pay interest under this Lease at the Default Rate.
The
Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
1
The term Leased Premises shall mean Tenants 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 Tenants 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) 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 Tenants 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 (5
th
) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 Landlords 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 $37,500.00 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 (5
th
) Lease Year of the Term. The Minimum Monthly Rent shall be increased (but never decreased) on
the first day of the sixth (6
th
) Lease Year and on the first day of each fifth (5
th
) 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 Landlords reasonable cost of such audit.
4.3 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.
4.4
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.
4.5
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 Landlords 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 Tenants premises subject to the Installment
Election, Tenants 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 Landlords 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 Landlords 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 Landlords 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 foils 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 Tenants 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)
Builders 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 builders 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
Tenants 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 Tenants 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 Landlords 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 Tenants 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
Tenants 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
Landlords 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 partys 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
Tenants 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 partys 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 Landlords
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
Tenants 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
Tenants (or its agents, employees, contractors or invitees) acts or omissions brought upon,
stored, used, generated or released into the
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environment
by Tenant, its agents, employees, contractors or invitees (referred to as Tenants
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
Tenants 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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants
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 Tenants 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
Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy or
marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense,
including attorneys fees;
provided,
however
. Tenant shall be liable for attorneys fees
only if single legal counsel (or a single firm of legal counsel) cannot represent both Landlord
and Tenant without there arising an actual or potential conflict of interests.
9.03
Permits; Compliance With Codes
. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies
having jurisdiction.
9.04
Ownership
.
A) During the Term of this Lease (including any renewals or extensions), the
Improvements erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the
property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.
14
B) During the term of this lease, Tenant shall have the right to replace any of the trade
fixtures, theatres seats, projection equipment, furniture, other equipment and personal property
from time to time; provided, however, that such replacement fixtures, equipment or property are of
equal or better quality than the property being replaced. Further no such installation or removal
thereof shall affect the structural portion of the Premises and that Tenant shall repair and
restore any damage or injury to the Premises or the Property caused thereby. Any such replacement
equipment, furniture or fixtures shall become the property of the Landlord at the termination of
this lease.
9.05
Control.
Notwithstanding anything to the contrary in this Lease, during the Term
of this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01
Indemnification
. Except to the extent attributable to the intentional and gross
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), or liability in connection with loss of life, personal injury or damage to property
caused to any person in or about the Premises from whatever cause, in any way connected directly or
indirectly and arising out of or attributable in any way connected with Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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 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.
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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, Tenants obligation
to pay Rent shall terminate on, and Tenants 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 Tenants 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
Tenants 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 Tenants 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
Landlords 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
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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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C)
Termination of Lease and Lessees 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 Tenants 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)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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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
Landlords 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
behalf of Landlord and Landlords 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 Landlords knowledge there is no claim, suit, demand or
litigation, or administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D)
Tenant shall at all times during the Term of this Lease have the
right to peacefully and quietly have, hold, occupy and enjoy the
Premises, subject to the terms of this Lease without hindrance or molestation from Landlord or any
person claiming by, from or under Landlord.
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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
Tenants 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 Tenants 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)
Tenants 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 Tenants 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
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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 Tenants 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 Tenants
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Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully prepaid), addressed to Landlord to the addresses set forth in
Section 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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
24
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in writing
Landlords 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 Tenants 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 partys 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 Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail
to so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics
liens and charge all costs thereof, including without limitation, reasonable attorneys fees, to
Tenant as additional rent plus interest at 18%.
18.19
Relationship of Parties.
Nothing contained in this Lease shall be construed to
create the relationship of principal and agent, partnership, joint venture or any other
relationship between the parties hereto other than the relationship
of Landlord and Tenant.
Nothing contained herein shall in any way impose any liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees
of Tenant should such parties be corporate entities.
18.20
Time of the Essence.
Time is of the essence with respect to Tenants 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
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CENTURY THEATRES OF CALIFORNIA, INC.,
a
California Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
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Joseph Syufy
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Title:
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V.P.
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LANDLORD
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title:
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G.P.
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26
EXHIBIT
10.24(a)
LEASE
CENTURY THEATRES
Table of
Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01
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Attachments to Lease and Exhibits
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1
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1.02
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Definitions
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1
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ARTICLE II: Premises Term
Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Option to Extend Lease Term
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3
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2.04
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Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01
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Use
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4
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ARTICLE IV: Rent
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4.01
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Base Rent / Minimum Monthly Rent
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4
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4.02
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Percentage Rent
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4
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4.03
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Rent Payments
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5
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4.04
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Place for Payment of Rent
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5
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4.05
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Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
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Impositions
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5
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5.02
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Proration of Taxes
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6
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5.03
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Exceptions from Impositions;
Charges in Lieu of Impositions
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6
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5.04
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Contest of Taxes
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6
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5.05
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Utilities
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7
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5.06
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Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01
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Acquisition of Insurance Policies
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7
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6.02
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Types of Required Insurance
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7
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6.03
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Terms of Insurance
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8
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6.04
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Landlords Acquisition of Insurance
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8
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6.05
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Insurance Money and Other Funds Held In Trust
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8
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6.06
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Application or Proceeds of Physical Damage Insurance
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8
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6.07
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Cooperation for Insurance Proceeds
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9
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6.08
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Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
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Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02
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Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01
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Definition
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10
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8.02
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Tenants Responsibilities and Landlord Indemnity
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10
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8.03
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Remedial Work
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11
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8.04
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Maintenance of Premises
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12
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8.05
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Landlords Responsibilities and Tenans Indemnity
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12
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8.06
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Landlord Inspection
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13
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8.07
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Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01
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Tenants Signs
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14
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9.02
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Hold Harmless
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14
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9.03
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Permits; Compliance With Codes
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14
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9.04
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Ownership
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14
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9.05
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Control
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15
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ARTICLE X: Indemnity
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10.01
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Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01
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Assignment and Subletting
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15
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11.02
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Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01
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Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01
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Existing Mortgages
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16
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13.02
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Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01
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Definitions
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16
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14.02
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Notice to Other Party
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17
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14.03
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Total Taking Effect on Rent and Term
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17
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14.04
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Distribution of Award for Taking
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17
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14.05
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Partial Taking Rent Adjustments
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18
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I4.06
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Partial Taking Option to Terminate
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18
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14.07
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Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01
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Tenants Default
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18
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15.02
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Landlords Remedies Cumulative
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18
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15.03
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Landlords Default
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20
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15.04
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Waiver of Redemption
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20
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15.05
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Dispute Resolution
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20
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15.06
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Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01
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Landlords Representations and Warranties
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21
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16.02
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Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01
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Repairs, Alterations and Further
Improvements
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22
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17.02
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Prompt Repair
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22
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17.03
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Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01
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Limitation on Liability
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23
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18.02
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Modification
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23
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18.03
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Severability
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23
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18.04
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Governing Law
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23
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18.05
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Terminology
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23
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18.06
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Counterparts
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23
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18.07
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Binding Effect
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23
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18.08
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Captions
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23
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18.09
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Notice to Landlord and Tenant
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23
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18.10
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Addresses for Notices to Landlord and Tenant
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24
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18.11
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Entire Agreement
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24
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18.12
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Sale or Transfer of Premises
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24
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18.13
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Force Majeure
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25
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18.14
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Waiver
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25
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18.15
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Estoppel Certificate
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25
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18.16
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Number and Gender
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25
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18.17
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No Holding Over
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25
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18.18
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Mechanics Liens
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25
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18.19
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Relationship of Parties
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25
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18.20
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Time of the Essence
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26
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18.21
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Facsimile Copies
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26
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18.22
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Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-1
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Exhibit B
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Site Plan of Premises
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B-1
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Exhibit C
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Form of Memorandum
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C-1
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Exhibit D
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Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the
Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE
I
EXHIBITS
DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the
following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT
C Form of Memorandum of Lease
EXHIBIT
D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to pay
interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October 1,
1995.
The term Initial Term is defined in Section
2.02 herein.
1
The term Leased Premises shall mean Tenants 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 Tenants 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 Tenants 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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.
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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 Landlords 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 $36,666.67. 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 Landlords 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 Landlords 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.
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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
Tenants premises subject to the
Installment Election, Tenants 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 Landlords 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 Landlords 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 Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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 Tenants 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 Landlords 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.
8
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such
insurance
proceeds or condemnation awards received and held by the Landlord and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(1)
First
, Landlord shall be awarded an amount sufficient to remove any
improvements not repaired and to return the Property to the level of adjacent streets
(grade level); and
(2)
Second
, any remainder shall be paid to Landlord.
6.07 Cooperation for Insurance Proceeds. Landlord and Tenant shall each cooperate with
the other in order to obtain the largest possible recovery and execute any and all
consents and other instruments and take all other actions reasonably necessary or
desirable to effectuate the same and cause such proceeds to be paid as hereinbefore
provided. Notwithstanding anything to the contrary contained in this Lease, neither party
shall carry any insurance concurrent in coverage and contributing in the event of loss
with any insurance required to be furnished by the other hereunder if the effect of
separate insurance would be to reduce the protection or the payment to be made under such
partys 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 Tenants 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 partys 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 tirne 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
Secton. 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 tirne and from tirne to tirne 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 Landlords written approval shall be first obtained.
9
B)
Tenant shall at all times keep the Premises or any part thereof, free and clear of all
liens and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.
7.02 Repairs Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01 Definition For purposes of this Article VIII, the term Hazardous Material means (a)
any substance,
product, waste or other material of any nature whatsoever which is or becomes listed, regulated,
or addressed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.
(RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Water Act,
33 U.S.C. Section 1251, et seq.; the California Hazardous Waste Control Act, Health and Safety
Code Section 25100, et seq.; the California Hazardous Substance Account Act, Health and Safety
Code Section 25330, et seq.; the California Safe Drinking Water and Toxic Enforcement Act, Health
and Safety Code Section 25249.5, et seq.; California Health and Safety Code Section 25280, et seq.
(Underground Storage of Hazardous Substances); the California Hazardous Waste Management Act,
Health and Safety Code Section 25170.1, et seq.; California Health and Safety Code Section 25501,
et seq. (Hazardous Materials Response Plans and Inventory); or the California Porter-Cologne Water
Quality Control Act, Water Code Section 13000, et seq., all as amended, or any other federal,
state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, as now or at any time hereafter in effect; (b)
any substance, product, waste or other material of any nature whatsoever which may give rise to
liability under any of the above statutes or under any statutory or common law theory based on
negligence, trespass, intentional tort, nuisance or strict liability or under any reported
decisions of a state or federal court; (c) petroleum or crude oil, other than petroleum and
petroleum products contained within regularly operated motor vehicles; (d) asbestos; (e)
subsurface gas; (f) urea formaldehyde foam insulation;
(g) poly chlorinated byphenyls (PCBs);
and freon and other chloroflurocarbons.
8.02 Tenants 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
Tenants (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 Tenants
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
Tenants 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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords
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, Landlords 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
Landlords 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
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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 Tenants Building and if such Remedial Work is required
as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants 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,
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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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees, beneficiaries,
officers, shareholders, employees and agents (collectively, Tenants 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 transportarion 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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants 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 Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre
canopy or marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03
Permits: Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate
reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies
having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the
Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the
property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and
all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.
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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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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
Tenants 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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
ARTICLE III
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 Landlords 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.
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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.
Ç) 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, Tenants obligation to pay
Rent shall terrninate on, and Tenants 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 Tenants 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
Tenants 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 Tenants 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 Landlords 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 wthout 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C)
Termination of Lease and Lessees 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 Tenants 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)
Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants
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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any
amount due from Landlord against the next Rent payment due under this Lease.
15.4
Waiver of Redemption. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being dispossessed or
removed from the Premises upon the termination of this Lease because of default by Tenant
hereunder.
15.5
Dispute Resolution. Landlord and Tenant desire by provisions of this Section 15.05 to
establish procedures to facilitate the informal and inexpensive resolution of any dispute arising
out of this Lease by mutual cooperation and without resort to
litigation. To accomplish this
objective, Landlord and Tenant agree to follow the procedures set forth below if and when a
dispute arises between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written
description of the alleged breach by the other party. This description shall explain the nature of
the complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act. The 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
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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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or
litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to
peacefully and quietly
have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without hindrance or
molestation from Landlord or any person claiming by, from or under
Landlord.
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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 Tenants 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 Tenants 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) Tenants 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 Tenants 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
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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
Tenants 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 Tenants
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Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully prepaid), addressed to Landlord to the addresses set forth in
Section 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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or transfer of,
tide 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
24
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in writing
Landlords 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 Tenants 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 partys 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 Tenants 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 Tenants 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:
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CENTURY THEATRES OF CALIFORNIA, INC.,
a
California Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
Joseph Syufy
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Title:
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V.P.
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LANDLORD:
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name: Raymond W.
Syufy
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Title:
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G.P.
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26
EXHIBIT 10.25(a)
UNION LANDING ENTERTAINMENT CENTER LEASE
BY AND BETWEEN
DYER TRIANGLE LLC
CALIFORNIA LIMITED LIABILITY COMPANY
LANDLORD
AND
CENTURY THEATRES, INC.
DELAWARE CORPORATION
TENANT
UNION LANDING ENTERTAINMENT CENTER LEASE
THIS LEASE AGREEMENT (referred to herein as the Lease) is made this 10
th
day
of April, 1998, by and between Dyer Triangle LLC, a California Limited Liability Company,
(Landlord), and Century Theatres, Inc., a Delaware Corporation (Tenant).
ARTICLE I
EXHIBITS AND BASIC LEASE TERMS
Section 1.01. Attachments to Lease and Exhibits:
EXHIBIT A Site Plan for Entire Premises commonly knows as the Union Landing
Entertainment Center showing the location of the Tenants Building outlined in red.
Section 1.02. Basic Lease Terms and Definitions.
1.02.1. Entire Premises shall mean Union Landing Entertainment Center located in the
City of Union City, State of California.
1.02.2. Commencement date shall mean the date which is the earlier of (i) nine months after
Tenant has received a building permit for the construction of Tenants Building or (ii) the date
on which Tenant opens for business in the Premises.
1.02.3.
Term shall mean Initial Term of twenty (20) years
with two five (5) year options and one four (4) year option.
1.02.4. Tenants Trade Name. Century Theatres.
1.02.5. Floor Area. Approximately 96,000 square feet.
1.02.6. Minimum Rent.
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Dollars/ Years
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Dollars/Month
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Dollars/sq. ft.
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Years
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$2,016,000.00
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$168,000.00
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$21.00
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1-5
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$2,160,000.00
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$180,000.00
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$22.50
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6-10
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$2,364,000.00
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$192,000.00
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$24.00
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11-15
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$2,448,000.00
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$204,000.00
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$25.50
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16-20
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$2,592,000.00
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$216,000.00
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$27.00
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21-25
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$2,736,000.00
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$228,000.00
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$28.50
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26-30
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$2,880,000.00
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$240,000.00
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$30.00
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31-34
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1.02.7.
Percentage Rent. 8%
1.02.8. Premises. Theatre Parcel.
1.02.9. Use of Premises. A Motion Picture Theatre Complex.
1.02.10. Security Deposit. None.
ARTICLE II
LEASED PREMISES
Section 2.01. Leased Premises.
Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, those certain
premises and improvements located in the Entire Premises, consisting of approximately 96,000 square
feet of gross leasable area, (the Premises or Leased Premises). Area means all areas
designated by Landlord for the exclusive use of Tenant. The boundaries and location of the Premises
are depicted on the site plan of the Entire Premises, which is attached hereto as Exhibit A (the
Site Plan) and shall be deemed to include the entryway to such building. The site plan and shape
and dimensions of the area of the Premises are depicted on Exhibit A.
Section 2.02. Reservations.
Landlord reserves the right at any time to make alterations or additions and to construct
other buildings, improvements, alterations or additions in the Entire Premises. These alterations
and additions however shall not materially impede reasonable access to the Premises. Easements for
light and air are not included in the Premises.
UNION CITY ENTERTAINMENT CENTER
1
Landlord further reserves the right to go on the roof of the Premises for the purpose of effecting
certain items of repair and maintenance as provided in this Lease.
Section 2.03. Right to Relocate.
Landlord reserves the right at any time to make changes to the various buildings, parking,
and other common areas as shown on the Site Plan.
Section 2.04. Conditions of Record.
Landlords Title is subject to: (a) the effect of any covenants, conditions, restrictions,
easements, development agreements, mortgages or deeds of trust, ground leases, rights of way, and
other matters or documents of record now or hereafter recorded against Landlords title, (b) the
effects of any zoning laws of the city, county and state where the Entire Premises is situated, and
(c) general and special taxes and assessments not delinquent. Tenant agrees (1) that as to its
leasehold estate it, and all persons in possession or holding under it, will conform to and will
not violate said matters of record, and (ii) that this Lease is and shall be subordinate to said
matters of record and any amendments or modifications thereto.
ARTICLE III
TERM
Section 3.01. Commencement of Term.
This Lease shall be effective upon mutual execution. The term of this Lease the (Term)
shall commence as specified in Section 1.02.2 and shall continue for the term specified in Section
1.02.3 unless sooner terminated in accordance with the provisions of this Lease. The term shall
commence from the first day of the month following the Rent Commencement Date. Upon request of
Landlord, Tenant shall execute a written confirmation of the commencement of the Term and the Rent
Commencement Date upon a form to be supplied by Landlord.
Section 3.02. Extension of Term.
Tenant
shall have the right to extend the term of this Lease for
two (2) additional five (5) year period(s)
and one (1) additional four (4) year period under the same terms and conditions as the original Lease,
except for the amount of Minimum Rent. It is understood that this option is unique to
Century Theatres, Inc., and upon any assignment or subletting without Landlords consent,
the option shall be rendered null and void. If Tenant is in default on the date of giving
the option notice, the option notice shall be totally ineffective, or if Tenant is in
default on the date the extended term is to commence, the extended term shall not commence
and this Lease shall expire at the end of the initial term.
In order to exercise such option to renew or extend this Lease, Tenant shall give to Landlord
notice, in writing, of its intention to do so at least one hundred eight (180) days prior to then
applicable expiration date of this Lease, and if Tenant shall fail to timely give such notice, all
rights and privileges as granted to Tenant to renew or extend this Lease shall thereupon be null
and void.
ARTICLE IV
RENT
Section 4.01. Rent Commencement Date.
Tenants obligation to pay Minimum Rent and Percentage Rent under this Lease shall commence
on the first to occur of (the Rent Commencement Date): (a) the date Tenant first opens for
business to the public in the Premises; or (b) nine months after Tenant has obtained a building
permit for the construction of Tenants Building. If the Rent Commencement Date does not occur on
the first day of the month, Tenant shall pay rent for the fractional month on a per diem basis
(calculated on the basis of a thirty day month) until the first day of the month next succeeding
the date Tenants obligation to pay rent commences. The Minimum Rent shall be paid thereafter in
equal monthly installments on or before the first day of each month in advance without demand or
offset. The Minimum Rent to be paid by Tenant during the Term of this Lease is set forth in
Section 1.02.6
Section 4.02. Percentage Rent
In addition to the payment of Annual Minimum 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
eight percent (8%) of the Gross Receipts for such Lease year exceeds the Annual Minimum Rent which is payable for
such Lease Year. For the purpose of computing the Annual Percentage for the first Lease Year, the
Gross Receipts for the partial calendar month, if any, preceding the first Lease Year shall be
includable in the Gross Receipts for the first Lease Year.
Within sixty (60) days following the end of each Lease Year, Tenant shall deliver to Landlord
the written statement required by Section 6.02 of this Lease showing Tenants Gross Receipts for
the preceding lease year. Tenant shall at the time of delivery of the written statement pay to
Landlord any Percentage Rent due for such Lease Year.
Section 4.03. Gross Receipts Defined.
Gross Receipts means (a) the entire amount charged for the full price at the time of the
initial transaction for all merchandise sold or delivered or services rendered by Tenant whether
for cash or credit; (b) the gross amount received or charged by Tenant for merchandise sold or
services rendered pursuant to orders received by telephone,
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mail, house to house, or by other canvassing, and attributable to the Premises whether or not
filled elsewhere; and (c) all gross income of Tenant from any operation in, at, from or through
the use of the Premises. Excluded from the calculation of Gross Receipts are (i) cash refunded
or credit allowed on merchandise returned by customers; (ii) sales taxes, excise taxes, other
similar taxes; (iii) proceeds from sales of fixtures, equipment, or property which are not
stock-in-trade; (iv) sales to employees representing discounts or compensation benefits and for
which Tenant realizes no monetary profit in an amount not to exceed two percent (2%) of Gross
Receipts and (v) EBF passes.
Section 4.04. Additional Rental.
All other sums required to be paid by Tenant to Landlord pursuant to this lease in addition
to Minimum Rent and Percentage Rent, whether or not designated as rent and additional rent, unless
otherwise specified. Rent for any period which is less than one (1) month shall be a prorated
portion of the monthly rent installment based upon a thirty (30) day month.
Section 4.05. Late Payment.
If the Tenant fails to pay the Minimum Rent or any installment thereof or Percentage Rent, if
any, or any other additional rent due under this Lease within five (5) days after such Rent has
become due, both Tenant and Landlord agree that Landlord will incur additional expenses consisting
of extra collection efforts, handling costs and potential impairment of credit on loans which may
be secured by this Lease. Both parties agree that should Tenant fail to pay its Rent, Landlord is
entitled to compensation for detriment caused by the failure, but that it is extremely difficult
and impractical to ascertain the extent of the detriment. The parties therefore agree that should
Tenant fail to pay any Rent due hereunder within five (5) days after the same becomes due,
Landlord shall be entitled to recover from Tenant five percent (5%) of the amount past due as
liquidated damages. Such past due amounts shall also bear interest at the maximum rate allowed by
law from the date due until paid. Tenant further agrees to pay Landlord any costs incurred by
Landlord in the collection of such past due Rent including, but not limited to, fees of an
attorney and/or collection agency. Nothing herein contained shall limit any other remedy of
Landlord under this Lease. Landlord shall also have the right to require Tenant to pay any past
due sums by cashiers check or money order.
Further, should Tenant fail to pay Rent or any other charges due hereunder in the time
periods set forth herein, two (2) or more times during any calendar year of the Term, Landlord may
require Tenant to thereafter pay Rent in quarterly installments in advance for the balance of the
Term.
ARTICLE V
CONSTRUCTION OF LEASED PREMISES
Section 5.01. Landlords and Tenants Obligations.
(a) Landlords Obligation:
Subject to delay as provided in this Lease, Landlord, at its own cost and expense, shall
develop the building pad in accordance with plans and specifications prepared by Tenant or
Tenants architect, including the design and construction of all utility lines to the boundary of
the Premises in adequate size to service Tenants requirements.
(b) Tenants Obligation:
Tenant shall construct the theatre building and improvements in accordance with plans and
specifications prepared by Tenant. Any work to be performed by Tenant and any permits, fees or
applications for such work shall be performed or obtained by Tenant at its sole cost and expense
(collectively, Tenants Work). Tenant shall pay for any equipment or work to be installed in or
constructed on the Premises by Landlord other than Landlords Work prior to commencement of
construction or installation of such additional items.
(c) Tenants Allowance.
Landlord agrees to provide Tenant with an improvement allowance of up to a maximum of Eight
Million One Hundred Sixty Thousand ($8,160,000.00) dollars ($85 per square foot) (Tenant
Allowance). Tenant shall pay any difference between the total Tenant building and improvement
cost less the Tenant Allowance. Landlord agrees that it shall pay to Tenant, or at Tenants
direction, to Tenants contractor, within fifteen (15) days following Landlords receipt of
conditional lien waivers signed by its contractor, in form reasonably sufficient to waive lien
rights in Alameda County, California, an amount equal to the Tenant Allowance multiplied by the
percentage of work completed as of the date of the lien waivers, less any installments of Tenant
Allowance already paid. If the total contract for Tenants Work exceeds Tenants Allowance,
Landlord shall only be required to pay its pro-rata share which shall be the ratio of Tenants
Allowance to the total of Tenants Work. If Landlord disputes any portion of the request for
payment by Tenant due to faulty or incomplete work, then Landlord shall withhold a sum which, in
Landlords opinion would be required to correct or complete the disputed work. In this event,
Landlord shall submit a written punch list to Tenant.
Anything above to the contrary notwithstanding, Landlord shall have no obligation to pay any
portion of the construction allowance if Tenant is then in default of any of the terms and
provisions of this Lease.
Section 5.02. Possession.
Upon substantial completion by Landlord of Landlords Work on the Premises, Landlord shall
deliver the Premises to Tenant. Tenant waives any right or claim against the Landlord for any
cause directly or indirectly, arising out of the condition of the Premises, appurtenances thereto,
the improvements thereon and the equipment
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thereof. Tenant shall save and hold harmless the Landlord from liability as provided in this
Lease. Landlord shall not be liable for any latent or patent defects therein.
Section 5.03. Commencement of Construction and Completion.
Prior to commencement of Tenants Work, Tenant shall notify Landlord in writing of the date
Tenant will commence construction. Tenants contractor shall commence the construction of Tenants
Work promptly upon possession of the Premises by Tenant and shall diligently pursue such
construction to completion. Tenant shall record within ten (10) days of completion of Tenants
Work, a valid Notice of Completion and thereafter deliver to Landlord prior to opening for
business a certified copy of such Notice along with final lien releases for all contractors,
subcontractors, materialmen and suppliers covering all improvements and work performed by Tenant
and/or Tenants contractor on the Premises.
Section 5.04. Delay in Possession
Landlord shall not be liable for failure to deliver possession of the Premises to Tenant. If
Landlord fails to deliver possession of the Premises on or before the expiration of two (2) years
from the date of lease execution (subject to extension for any force majeure or inability to
obtain financing), either party may terminate this Lease by giving thirty (30) days written notice
to the other party. Thereafter, neither party shall have any further liability to the other in
connection with this Lease.
ARTICLE VI
RECORDS AND BOOKS OF ACCOUNT
Section 6.01. Tenants Records.
Tenant shall maintain and keep on the Premises or at Tenants principal office in California
for a period of not less than three (3) years following the end of each year during the Term,
adequate records which show Gross Receipts, inventories and receipts of merchandise at the
Premises, and daily receipts from all sales and other transactions on the Premises by Tenant and
any other persons conducting any business upon the Premises. Tenant shall record at the time of
sale, in the presence of the customer, all receipts from sales or other transactions, whether for
cash or credit, in a cash register or in cash registers having a cumulative total which shall be
sealed in a reasonable manner, and having such other reasonable features as may be appropriate or
required in order to properly account for and record all sales or other transactions in and from
the Premises. If upon an audit of Tenants books and records by Landlord, Landlord determines that
Tenants manner of recording sales is inadequate, Tenant agrees to adopt such measures as Landlord
may reasonably request to correct such inadequacies. Tenant further agrees to keep on the Premises
or at Tenants principal office in California for at least three (3) years following the end of
each year during the Term all pertinent original sales records. Original sales records may include
any or all of the following: (a) cash register tapes, including tapes from temporary registers;
(b) serially numbered sales slips; (c) computer printouts and computerized sales slips; (d) the
originals of all mail orders at and to the Premises; (e) the original records of all telephone
orders at and to the Premises; (f) settlement report sheets of transactions with subtenants,
concessionaires and licensees; (g) the original records showing that merchandise returned by
customers was purchased at the Premises by such customers; (h) memorandum receipts or other
records of merchandise taken out on approval; (i) records of inventory purchases; (j) such other
sales records, if any, which would normally be examined by an independent accountant pursuant to
generally accepted auditing standards in performing an audit of Tenants Gross Receipts; and (k)
the records specified in (a) to (j) above for subtenants, assignees, concessionaires or licensees
of Tenant.
Section 6.02. Reports by Tenant.
Tenant shall submit to Landlord on or before the sixtieth (60th) day following each lease
year during the Term hereof at the place then fixed for the payment of rent, or at such other
place designated by Landlord, a written statement signed by Tenant, and certified by it to be true
and correct, showing in reasonable, accurate detail, the amount of Gross Receipts for each
preceding year.
Tenant shall submit to Landlord on or before the sixtieth (60th) day following the end of
each lease year at the place then fixed for the payment of rent, a written statement signed by
Tenant, and certified to be true and correct showing in reasonably accurate detail satisfactory in
scope to Landlord, the amount of Gross Receipts during the preceding calendar year. At Landlords
option, the written statement shall be duly certified to Tenant and Landlord by independent
certified public accounts of recognized standing. The accounting statement referred to in this
Section 6.02 shall be in such form and style and contain such details and breakdown as the
Landlord may reasonably require.
If Tenant fails to timely submit to Landlord either the monthly or annual written statement
described in this Section 6.02, Tenant shall pay to Landlord, as additional rent and without
limiting any other remedy Landlord may have against Tenant under this lease as a result of this
breach, a $100.00 (increased each year according to the Index) charge for each and every month
that the Tenant fails to timely submit such written statement. Alternatively, Landlord shall have
the right, upon five (5) days written notice, to audit Tenants records at Tenants expense.
Section 6.03. Annual Balance Sheet
Tenant shall provide Landlord, whenever reasonably requested by Landlord, a current annual
balance sheet for Tenants business at the Premises, either certified by Tenant or if Tenant is a
corporation, by Tenants chief financial officer, to be true and correct or accompanied by a report
of an independent certified public accountant.
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ARTICLE VII
AUDIT
Section 7.01. Right to Examine Books.
The acceptance by Landlord of payments of Percentage Rent shall be without prejudice to
Landlords right to examine Tenants books and records concerning Gross Receipts from the
Premises.
Section 7.02. Audit.
As its option, Landlord may cause, at any reasonable time and upon five (5) days prior
written notice to Tenant, a complete audit to be made of Tenants entire business affairs and
records relating to the Premises for the period covered by any statement issued by the Tenant in
accordance with Section 6.02. If such audit discloses that Tenant has under-reported Gross
Receipts by more than three percent (3%) for such period, Tenant shall promptly pay to Landlord
within ten (10) days the cost of its audit and any deficiency in amounts owed as disclosed by the
audit. The deficiency shall be considered a late payment pursuant to Section 4.06. In the event
that Tenant is in default of this Lease by
under-reporting Gross Receipts by more than three
percent (3%) as determined by two successive audits, Landlord may terminate this Lease upon five
(5) days written notice to Tenant. In such event, Landlord shall have all remedies set forth in
Section 22.02.
ARTICLE VIII
TAXES
Section 8.01. Real Property Taxes.
Tenant agrees to pay its pro rata share of all general and special real property taxes and
assessments and governmental levies and charges of any and every kind, nature and sort whatsoever,
ordinary and extraordinary, foreseen and unforeseen, and substitutes therefor or supplements
thereto, including the cost to Landlord of any appeals or contests of any taxes or assessments,
except any inheritance, estate, succession, transfer or gift tax imposed on Landlord or any income
tax specifically payable by Landlord as a separate tax-paying entity without regard to Landlords
income source as arising from or out of the Entire Premises (collectively Real Property Taxes),
which may be levied or assessed by any lawful authority against the Entire Premises applicable to
the period from the commencement of the Term until the expiration or sooner termination of this
Lease. Tenants pro rata share shall be apportioned according to the floor area of the Premises as
it relates to the total leasable floor area of the Building or buildings located within the Entire
Premises (including the Premises). Notwithstanding the foregoing provisions, if the Real Property
Taxes are not levied and assessed against the Entire Premises by means of a single tax bill (i.e.,
if the Entire Premises is separated into two (2) or more separate tax parcels for purposes of
levying and assessing the Real Property Taxes), then, at Landlords option, Tenant shall pay
Tenants pro rata share of all Real Property Taxes which may be levied or assessed by any lawful
authority against the land and improvements of the separate tax parcel on which the Building
containing the Premises is located. Tenants pro rata share under such circumstances shall be
apportioned according to the floor area of the Premises as it relates to the total leasable floor
area of the Building or buildings situated in the separate parcel in which the Premises are
located.
All Real Property Taxes for the tax year in which the Term commences and for the tax year in
which this Lease terminates shall be apportioned and adjusted so that Tenant shall not be
responsible for taxes and assessments for a period of time occurring prior to the time the Term
commences or subsequent to the Term.
The amount to be paid pursuant to the provisions of this Section 8.01 shall be paid monthly
in advance without demand or offset as estimated by Landlord based on the most recent tax bills
and estimates or reappraised values (if reappraisal is to occur), commencing with the month (or
partial month on a prorated basis if such be the case) that the Term commences.
If at any time during the Term, a tax, fee or excise is levied or assessed by any political
body against Landlord on account of rent payable to Landlord hereunder, the square footage of the
Premises, the act of entering into this Lease or the occupancy of Tenant or any other tax however
described or any tax based on or measured by expenditures made by Tenant on behalf of Landlord,
including the so-called value added tax, such tax, fee or excise shall be considered Real
Property Taxes for purposes of this Section 8.01, and shall be payable in full by Tenant. At
Landlords option, such taxes, fees or excises shall be payable monthly in advance on an estimated
basis as provided in this Section 8.01 or shall be payable within ten (10) days after Tenants
receipt of the tax bill therefor from Landlord.
Section 8.02. Increase in Taxes.
In addition to the Real Property Taxes described above in Section 8.01, Tenant shall pay one
hundred percent (100%) of any increase in Real Property Taxes as a result of any Tenants Work or
any other leasehold improvements, alterations or changes made by Tenant to the Premises during the
Term. Tenant shall reimburse Landlord promptly upon demand.
Section 8.03. Personal Property Taxes.
Tenant shall pay prior to delinquency all federal, municipal, county or state taxes, charges,
assessments and fees assessed during the Term against any leasehold interest or personal property
of any kind, owned by or placed in, upon or about the Premises by Tenant.
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ARTICLE IX
SECURITY DEPOSIT
Intentionally deleted.
ARTICLE X
CONDUCT OF BUSINESS BY TENANT
Section 10.01. Use of Premises.
Tenant shall use the Premises solely for the use and under the trade name specified in
Sections 1.02.9 and 1.02.4, respectively, herein, and for no other purpose. The term Use shall
mean the operation of a motion picture theatre complex, 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.
Tenant shall not (a) do or permit anything to be done in or about the Premises which will in
any way obstruct or interfere with the rights of other occupants of the Entire Premises or injure
or annoy them, (b) cause, maintain or permit any nuisance in, on or about the Premises, (c) use or
allow the Premises to be used for any unlawful purpose, (d) commit or allow to be committed any
waste in or upon the Premises, (e) display or allow carts, pallets or similar items owned by or
within the control of Tenant or Tenants merchandise to be stored or to remain outside the defined
exterior walls and permanent doorways of the Premises, (f) install any exterior lighting,
amplifier or similar devices, or use in or abut the Premises any advertising medium or device
which may be heard or seen outside the Premises, such as flashing lights, search lights, loud
speakers, phonographs or radio broadcasts, (g) permit to be conducted any sale by auction in, upon
or from the Premises whether voluntary, involuntary, pursuant to any assignment for the payment of
credits pursuant to any bankruptcy or any other insolvency proceedings, or any distress or fire or
bankruptcy or going-out-of-business sale, or (h) conduct any sidewalk sale. Tenant shall at all
times keep the Premises in a neat and attractive appearance.
Tenant shall not use, or permit the Premises, or any part thereof, to be used for any
purposes other than the purposes for which the Premises are hereby leased. No gaming machines
shall be permitted on the Premises. No use shall be made or permitted to be made of the Premises,
nor acts done, which will increase the existing rate of insurance upon the building or the Entire
Premises, or cause a cancellation of any insurance policy covering the building or the Entire
Premises or any part thereof. Tenant shall not sell or permit to be kept, used, stored or sold in
or about the Premises any article which may be prohibited by standard form fire insurance
policies. Tenant, at its sole cost, shall comply with any and all laws concerning the Premises or
Tenants use of the Premises, including, without limitation, the obligation at Tenants cost to
alter, maintain or improve the Premises in compliance with and conformity with all laws relating
to the condition, use or occupancy of the Premises during the term (including the Americans With
Disabilities Act). Tenant shall also comply with the requirements of any insurance organization or
company necessary for the maintenance of the fire and public liability insurance described in this
Lease covering the building and its appurtenances. If Tenants use of the Premises results in a
rate increase for the building or the Entire Premises, Tenant shall pay with in ten (10) days of
billing from Landlord, as additional rent, a sum equal to the additional premium caused by such
rate increase.
Section 10.02. Operation of Business.
Tenant shall open for business in the Premises no later than the Rent Commencement Date and
shall thereafter operate continuously for business to the public in the Premises. Tenant shall
operate one hundred percent (100%) of the Premises during the entire Term with due diligence and
efficiency so as to maximize the Gross Receipts which may be produced by Tenants business
therein. Tenant shall carry at all times in the Premises a stock of merchandise of such size,
character and quality as shall be reasonably designed to produce the maximum return to Landlord
and Tenant. Tenant shall conduct its business in the Premises during the usual and customary days
and hours for such type of business, or during times designated by Landlord for other tenants at
the Entire Premises. In the latter event, Landlord will notify Tenant in writing of the designated
Entire Premises days and hours. Tenants obligation to continuously operate its business in the
Premises shall not apply if the Premises should be closed and the business of Tenant temporarily
discontinued therein for not more than three (3) days out of respect to the memory of any deceased
officer or employee of Tenant, or the relative of any such officer or employee. Tenant shall
install and maintain at all times displays of merchandise in the display windows (if any) for the
Premises. Tenant shall keep the display windows and signs, if any, in the Premises well lighted
during the hours from sundown to 11:00 p.m.
In the event Tenant fails to take possession of the Premises or to open for business fully
fixturized, stocked and staffed by the Rent Commencement Date, or fails to fully operate its
business in the Premises at any time during the term in accordance with this Section 10.02, then
Landlord, in addition to any and all remedies otherwise provided in this Lease, shall have the
right to collect a sum equal to the greater of (i) twice the Minimum Rent per day, or (ii) $100.00
for each and every day after the Rent Commencement Date that Tenant shall fail to be open for
business in the Premises in accordance with the terms of this Lease. This additional rent is
intended to compensate Landlord for loss of Rent that may have been earned during the period Tenant
is not open for business, for damages suffered by the Landlord to the Entire Premises as a whole by
reason of Tenants not being open and for additional costs and expenses that Landlord may incur by
reason of increased administrative expenses and security costs for the Entire Premises. Tenant
acknowledges and agrees that Landlord is executing this Lease in reliance on Tenants covenant and
obligation to continuously operate its business in the Premises in accordance with this Lease and
that such obligation and covenant to the Landlord is a material element of consideration inducing
Landlord to execute this Lease. The foregoing provision for additional rent shall not apply during
any temporary closure for a maximum of three (3) days as set forth above, or due to casualty damage
or condemnation (in which either event Tenant shall
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recommence the conduct of its business in accordance with the terms of this Lease within the time
periods specified in this Lease after restoration and redelivery of the Premises to the Tenant).
Section 10.03. Competition.
During the Term, neither Tenant, nor any entity owned or controlled directly or indirectly by
Tenant, its partners, shareholders or directors, shall, without the prior written consent of
Landlord, directly or indirectly engage in any similar or competing business with that to be
operated by Tenant in the Premises within a radius of two (2) miles from the outside boundary of
the Entire Premises.
Section 10.04. Storage, Office Space.
Tenant shall warehouse, store and/or stock in the Premises, only such goods, wares and
merchandise as Tenant intends to offer for retail sale at, in, from or upon the Premises. This
shall not preclude occasional emergency transfers of merchandise to the other stores of Tenant, if
any, not located in the Entire Premises. Tenant shall use for office, clerical or other
non-selling purposes only such space in the Premises as is from time to time reasonably required
for Tenants business in the Premises.
Section 10.05. Compliance with Environmental Laws.
Tenant at all times and in all respects shall comply with all federal, state and local laws,
ordinances and regulations (Hazardous Materials Laws) relating to industrial hygiene,
environmental protection or the use, generation, manufacture, storage, disposal or transportation
of any hazardous, toxic, contaminated or polluting materials, substances or wastes, including,
without limitation, oil or other petroleum products, flammable explosives, asbestos, or any
hazardous substances, hazardous wastes, hazardous materials or toxic substances regulated
under any Hazardous Material Law (collectively, Hazardous Materials). Tenant at its own expense
shall procure, maintain in effect and comply with all conditions of any and all permits, licenses
and other governmental and regulatory approvals required for Tenants use of the Premises. In all
respects, Tenant shall handle, treat, deal with, manage and dispose of any and all Hazardous
Materials in total conformity with all applicable Hazardous Materials Laws and prudent industry
practices. Upon expiration or earlier termination of the term of the Lease, Tenant shall cause all
Hazardous Materials to be removed from the Premises and transported for use, storage, or disposal
in accordance and compliance with all applicable Hazardous Materials Laws. If Tenant fails to do
so, Landlord may remove such Hazardous Materials at Tenants expense.
If at any time it reasonably appears to Landlord that Tenant is not maintaining sufficient
insurance or other means of financial capacity to enable Tenant to fulfill its obligations to
Landlord in connection with this Section 10.05, whether or not then accrued, liquidated,
conditional or contingent, Tenant shall procure and thereafter maintain in full force and effect
such insurance or other form of financial assurance, with or from companies or persons and in
forms reasonably acceptable to Landlord, as Landlord may from time to time reasonably request.
Section 10.06. Sewer Damage
Tenant agrees not to discharge any acid or other harmful or dangerous chemicals into the
sewer system, whether it be inside the Premises area or inside the main system leading from the
Premises to the main sewer line. Should Tenant discharge any acid or harmful chemicals into the
sewer system, Tenant shall be,
fully
responsible for the cost and repair of such damage. Landlord
reserves the right to select an expert of its choosing to inspect any damage at Tenants cost.
Tenant shall not be responsible for cost of expert if it is determined such damage is not caused
by Tenant. Tenant accepts responsibility for any damage if the following conditions exist: (a) the
damage to the sewer system is determined to be due to the chemicals used in the operation of
Tenants business; (b) the damage exists only in the designated portion of the sewer system.
Section 10.07. Tenants Use
No Nuisance
Tenant acknowledges that odors emanating from the Premises as a result of Tenants operation
can become a nuisance to other Tenants within the Entire Premises. Therefore, Tenant agrees to
take whatever measures are necessary to eliminate odors emanating from the leased premises at
Tenants sole cost and expense. If the odor problem is not remedied by Tenant, Landlord has the
right to have odor nuisance inspected and remedied by an expert of Landlords and Tenants
choosing at Tenants sole cost.
Section 10.08. Tenants Covenant
The Tenant herein covenants by and for himself or herself, his or her heirs, executors,
administrators and assigns, and all persons claiming under or through him or her, and this lease is
made and accepted upon and subject to the following conditions.
That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, marital status, physical or mental
disability or medical condition, national origin or ancestry in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the
lessee himself or herself, or any person claiming under or through him or her, establish or permit
any such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subleases, subtenants or vendees in the
premises herein leased.
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ARTICLE XI
MAINTENANCE AND REPAIRS
Section 11.01. Tenants Maintenance Obligations.
Tenant, at its sole cost and expense, shall keep the Premises in first class order, condition
and repair and shall make all replacements necessary to keep the Premises including the theatre
building and improvements in such condition. All replacements shall be of a quality equal to or
exceeding that of the original. Should Tenant fail to make these repairs and replacements or
otherwise so maintain the Premises for a period of three (3) days after written demand by
Landlord, or should Tenant commence, but fail to complete, any repairs or replacements within
thirty (30) days after written demand by Landlord, Landlord may enter the Premises and make such
repairs or replacements without liability to Tenant for any loss or damage that may occur to
Tenants stock or business, and Tenant shall pay to Landlord the costs incurred by Landlord in
making such repairs or replacements together with interest thereon at the maximum rate permitted
by law from the date of commencement of the work until repaid. Tenant, at its expense, shall
repair promptly any damage to the building or the Entire Premises caused by Tenant or its agents
or employees or caused by the installation or removal of Tenants personal property. Tenant shall
contract with a service company licensed and experienced in servicing HVAC equipment and approved
by Landlord for the quarterly maintenance of the HVAC equipment serving the Premises and shall
provide Landlord with a copy of the service contract within ten (10) days following its execution.
If Tenant fails to timely deliver a copy of the service contract, Landlord may impose a late
charge in the amount of $50.00 per month until the copy is delivered. The sum so billed to Tenant
shall become immediately due to Landlord as additional rent. Landlord, at its option, may contract
with a service company of its own choosing, or provide such service itself, for the maintenance of
the HVAC equipment, and bill Tenant for the cost of same.
Tenant, at its own expense, shall comply with all requirements for the installation and
periodic maintenance of the fire extinguisher or automatic dry chemical extinguishing system.
Section 11.02. Plate Glass.
Tenant shall promptly replace, at its expense, any and all plate and other glass damaged or
broken from any cause whatsoever (except Landlords direct act) in and about the Premises. Tenant
shall have the option either to insure this risk or self insure.
ARTICLE XII
COMMON AREA
Section 12.01. Definition of Common Area.
The term Common Area, as used in this Lease means all areas within the exterior boundaries
of the Entire Premises now or later made available for the general use of Landlord and other
persons entitled to occupy floor area in the Entire Premises. Without limiting this definition,
Landlord may include in the Common Area those portions of the Entire Premises presently or later
sold or leased until the commencement of construction of building(s) thereon, at which time such
areas shall be withdrawn from the Common Area. Common Area shall not include (a) the entryway to a
tenants premises, (b) any improvements installed by a tenant outside of its premises, whether with
or without Landlords knowledge or consent, or (c) any areas or facilities that could be considered
as Common Area except that the areas or facilities are included in the description of premises
leased to a tenant.
Section 12.02. Maintenance and Use of Common Area.
The manner in which the Common Area shall be maintained shall be solely determined by
Landlord. If any tenant of any portion of the Entire Premises maintains its own Common Area
(Landlord shall have the right in its sole discretion to allow any tenant to so maintain its own
Common Area and be excluded from participation in the payment of Common Area Expenses as provided
below), Landlord shall not have any responsibility for the maintenance of that portion of the
Common Area; Tenant hereby waives any claims or damages arising out of any failure of such Landlord
or tenant to so maintain its portion of the Common Area.
The use and occupancy by Tenant of the Premises shall include the right to use the Common
Area (except those portions of the Common Area on which have been constructed or placed permanent
or temporary kiosks, displays, carts and stands and except areas used in the maintenance or
operation of the Entire Premises), in common with Landlord and tenants of the Entire Premises and
their customers and invitees, subject to such reasonable, nondiscriminatory rules and regulations
concerning the use of the Common Area as may be established by Landlord from time to time. Written
notice of such rules and regulations and amendments and supplements thereto, if any, shall be
given to Tenant fifteen (15) days prior to their effective date. Tenant agrees to promptly comply
with all such rules and regulations upon receipt of written notice from Landlord. Landlord shall
have no liability if any Landlord or tenant does not comply with such rules and regulations.
Tenant and Tenants employees and agents shall not solicit business in the Common Areas, nor
shall Tenant distribute any handbills or other advertising matter on automobiles parked in the
Common Area.
Section 12.03. Control of and Changes to Common Area.
Landlord shall have the sole and exclusive control of the Common Area. Landlords rights shall
include, but not be limited to, the right to (a) restrain the use of the Common Area by
unauthorized persons; (b) cause Tenant to remove or restrain persons from any unauthorized use of
the Common Area if they are using the Common Area by reason of Tenants presence in the Entire
Premises; (c) utilize from time to time any portion of the Common Area for promotional,
entertainment and related matters; (d) place permanent or temporary kiosks, displays, carts and
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stands in the Common Area and to lease same to tenants; (e) temporarily close any portion of the
Common Area for repairs, improvements or alterations, to discourage non-customer use, to prevent
dedication or an easement by prescription, or for any other reason deemed sufficient in Landlords
judgment; and (f) reasonably change the shape and size of the Common Area, add, eliminate or
change the location of improvements to the Common Area, including, without limitation, buildings,
lighting, parking areas, roadways and curb cuts, and construct buildings on the Common Area.
Landlord may determine the nature, size and extent of the Common Area and whether portions of the
same shall be surface, underground or multiple-deck; as well as make changes to the Common Area
from time to time which in Landlords opinion are deemed desirable for the Entire Premises.
Landlords right in this Section 12.03 may be shared in common with other Landlords of the Entire
Premises.
Section 12.04. Common Area Expenses.
The term Common Area Expenses as used in this Lease means all costs and expenses incurred
by Landlord, in operating, managing, policing, insuring, replacing, repairing and maintaining the
Common Area and, if applicable, the security offices and management offices, located in the Entire
Premises from time to time (the Common Facilities), and operating, insuring, repairing,
replacing and maintaining the Common Utility Facilities. Common Utility_Facilities are defined
to include but are not limited to, sanitary sewer lines and systems, gas lines and systems, water
lines and systems, fire protection lines and systems, electric power, telephone and communication
lines and systems, and storm drainage and retention facilities not exclusively serving the
premises of any tenant or store located in the Entire Premises. Common Area Expenses shall
include, without limitation, the following: expenses for maintenance, landscaping, repaving,
resurfacing, repairs, replacements, painting, lighting, cleaning, trash removal, security, fire
protection and similar items; cost, installation and removal of seasonal decorations;
non-refundable contributions toward one or more reserves for replacements other than equipment;
rental on equipment; charges, surcharges and other levies related to the requirements of any
Federal, State or local governmental agency; costs of any improvements made by Landlord to the
Entire Premises for the purpose of reducing recurring expenses or utility costs and from which
Tenant can expect a reasonable benefit or that are required by any governmental law, ordinance,
regulation or mandate subsequent to the original construction of the Entire Premises; expenses
related to the Common Utility Facilities; real and personal property taxes and assessments on the
improvements and land comprising the Common Area and Common Facilities; Landlord Carried Insurance
(defined in Section 16.02) and any additional coverage obtained by Landlord on the Entire
Premises; and a sum payable to Landlord for administration and overhead in an amount equal to ten
percent (10%) of the Common Area Expenses for the applicable year.
Section 12.05. Proration of Common Area Expenses.
(a) From and after the commencement of the Term, Tenant shall pay to Landlord, on the first
day of each calendar month, without demand or offset, an amount estimated by Landlord to be the
monthly amount of Tenants share of the Common Area Expenses which shall also include Tenants pro
rata share of Real Property Taxes described in Section 8.01 (Monthly Impound). The Monthly
Impound may be adjusted periodically by Landlord based on Landlords reasonable estimate of
anticipated costs.
(b) Within one hundred twenty (120) days following the end of each calendar year of the Term,
or, at Landlords option, its fiscal year, Landlord shall furnish Tenant with a statement covering
the calendar or fiscal year (as the case may be) just expired, showing the actual Common Area
Expenses for that year, the amount of Tenants share of Common Area Expenses for said calendar or
fiscal year and the Monthly Impound payments made by Tenant during that year. If Tenants share of
the Common Area Expenses exceeds Tenants prior Monthly Impound payments, Tenant shall pay
Landlord the deficiency within ten (10) days after receipt of the annual statement. If Tenants
Monthly Impound payments for the calendar or fiscal year exceed Tenants actual share of Common
Area Expenses, and provided Tenant is not in arrears as to the payment of any Rent, Tenant may
offset the excess against the next Monthly Impound due Landlord.
(c) Tenants proportionate share of the Common Area Expenses shall be determined by
multiplying the amount of such expenses by a fraction, the numerator of which is the number of
square feet of leasable floor area in the Premises and the denominator of which is the number of
square feet of leasable floor area in the Entire Premises.
Section 12.06. Parking
Tenant and its employees shall park their vehicles only in those portions of the Common Area
from time to time designated for such purpose by Landlord. Landlord, at Tenants expense, shall
have the right to tow improperly parked vehicles of Tenant or Tenants employees. Tenant shall
reimburse Landlord upon demand for any such towing costs. Landlord shall have the right to adopt
and implement such parking programs as may be necessary to alleviate parking problems during the
peak traffic periods, including requiring the use of off-site parking. Tenant shall pay to
Landlord its proportionate share of the cost of any such off-site parking program based on the
ratio of the floor area of the Premises to the total floor area of the premises of all tenants in
the Entire Premises required to participate in such program.
Tenant shall furnish Landlord with a list of its employees and the license numbers of their
vehicles within fifteen (15) days after Tenant opens for business in the Premises. Tenant shall be
responsible for ensuring that its employees comply with all the provisions of this Section 12.06
and such other parking rules and regulations as may be adopted and implemented by Landlord from
time to time, including but not limited to systems of validation, shuttle transportation or any
other programs which may be deemed necessary or appropriate by Landlord to control, regulate or
assist parking by customers of the Entire Premises.
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ARTICLE XIII
UTILITIES
Section 13.01. Utility Charges.
Tenant shall be solely responsible for and shall promptly pay all charges for heat, water,
gas, electricity, fire sprinkler, fire alarm or any other utility used, consumed or provided in,
or furnished, or attributable to the Premises at the rates charged by the supplying utility
companies. Should Landlord elect to supply any or all of such utilities, Tenant agrees to purchase
and pay for the same as additional rent as apportioned by the Landlord. The rate to be charged by
Landlord to Tenant shall not exceed the rate charged Landlord by any supplying utility plus any
expenses incurred by Landlord in connection with billing and supplying such utility service to
Tenant. In no event shall Landlord be liable for any interruption or failure in the supply of any
such utilities to the Premises. Tenant agrees to reimburse Landlord within ten (10) days of
billing for fixture charges and/or water tariffs, if applicable, which are charged by local
utility companies. Landlord will notify Tenant of this charge as soon as it becomes known. This
charge will increase or decrease with current charges being charged Landlord by the local utility
company, and will be due as additional rent. Tenant shall be responsible for sewer hook-up fees
associated with Tenants use of the Premises.
ARTICLE XIV
ALTERATIONS AND SIGNS
Section 14.01. Installation.
Tenant shall not make or cause to be made any alterations, additions or improvements or
install or cause to be installed any trade fixtures, exterior signs, floor covering, interior
lighting, plumbing fixtures, shades or awnings or make any changes to the storefront of the
Premises without Landlords prior written consent. Concurrently with the request for approval,
Tenant shall deliver to Landlord two (2) sets of complete plans and specifications for such work
prepared by a licensed architect and if applicable, engineer. If required by Landlord, Tenant
shall also provide security for the lien free completion of such work in the form of a payment and
performance bond or other security satisfactory to Landlord.
Section 14.02. Removal by Tenant.
All alterations, decorations, additions and improvements made by the Tenant, or made by the
Landlord on the Tenants behalf by agreement under this Lease, shall remain the property of the
Tenant for the Term, or any extension or renewal thereof. Any alterations, decorations, additions
and improvements made by Tenant or previous tenant, if applicable, shall not be removed from the
Premises without Landlords prior written consent. During the Term, Tenant shall not remove any of
its trade fixtures or other personal property, without the immediate replacement thereof with
comparable fixtures or property. Upon expiration of this Lease, or any renewal term thereof, at
Landlords option, Tenant shall remove all such alterations, decorations, additions, and
improvements, and restore the Premises as provided in Section 15.01 hereof. If the Tenant fails to
remove such alterations, decorations, additions and improvements and restore the Premises, then
upon the expiration of this Lease, and upon Tenants vacation of the Premises, all such
alterations, decorations, additions and improvements shall become the property of Landlord and
Tenant shall reimburse Landlord for the cost of removal and/or storage of such alterations,
decorations, additions and improvements.
Section 14.03. Liens.
Tenant shall keep the Premises free from any kinds of liens arising out of work performed or
materials furnished Tenant and shall promptly pay all contractors and materialmen used by Tenant
to improve the Premises, so as to minimize the possibility of a lien attaching thereto. If any
such lien be made or filed, Tenant shall bond against or discharge the same within ten (10) days
after written request by Landlord.
Tenant shall indemnify, defend, protect and hold Landlord, any ground lessor, the Premises
and the Entire Premises and every part thereof free and harmless from and against any and all
liability, damage, claims, demands, suits, actions or expense (including attorneys fees) arising
out of any work done on or about the Premises by Tenant or, at Tenants direction, including
Tenants employees, representatives, successors, contractors, subcontractors, materialmen and
assigns.
Section 14.04. Signs, Awnings and Canopies.
Tenant shall conform to the Union City Entertainment Center Tenant Sign Criteria. In
addition, Tenant shall not place or suffer to be placed or maintained any sign, awning, canopy, or
advertising matter on the roof or on any exterior surface, door, wall or window or within 48
inches of any windows or doors of the Premises or the Building without Landlords prior written
consent. If Landlord consents, Tenant agrees to maintain such sign, awning, canopy, decoration,
lettering or advertising matter in good condition and repair at all times.
Tenant agrees, at Tenants sole cost to install and maintain any signs as required by Landlord
in strict conformance with Landlords sign criteria as to design, material, color, location, size
and letter style and, if requested by Landlord, from the source designated by Landlord. Tenants
sign shall be installed prior to Tenants opening for business and shall thereafter be maintained
by Tenant at its own expense. If Tenant fails to maintain such sign, Landlord may do so and Tenant
shall reimburse Landlord for such cost plus a twenty percent (20%) overhead fee. If, without
Landlords prior written consent, Tenant installs a sign that does not conform to the Sign
Criteria, Landlord may have Tenants sign removed and stored at Tenants expense. The removal and
storage costs shall bear interest until paid at the maximum rate allowed by law.
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Landlord reserves the right to revise the Sign Criteria, at any time. Within ninety (90) days
of Landlords request and provided that Tenant has been in occupancy of the Premises for at least
five (5) years, Tenant shall remove Tenants existing sign, patch the fascia, and install a new
sign, at Tenants sole cost and expense, in accordance with Landlords new sign criteria.
ARTICLE XV
SURRENDER OF PREMISES
Section 15.01. Surrender of Premises.
At the expiration of the tenancy hereby created, Tenant shall surrender the Premises in a
first class, clean condition in accordance with the requirements of Section 14.02 herein, except
for reasonable wear and tear and damage by unavoidable casualty to the extent covered by Landlord
Carried Insurance. Tenant shall remove all of its trade fixtures, and any alterations or
improvements if required as provided in Section 14.02 hereof, before surrendering the Premises to
Landlord and shall repair any damage to the Premises or Building caused thereby. Tenant shall also
remove its sign and patch the fascia. Tenants covenants shall survive the expiration or other
termination of this Lease.
If the Premises were occupied by other tenants prior to the commencement of the Term, then
Tenant, upon Landlords written request at the expiration of the Term, shall remove all or a
portion of, as designated by Landlord, the interior improvements made by the prior tenants, and
deliver the Premises in a condition acceptable to Landlord.
Following removal of all improvements as required by Section 15.01, Landlord shall conduct an
inspection of the Premises to confirm Tenants compliance with this Section. Tenant shall send
written notice to Landlord five days prior to Landlords inspection. Landlords inspection shall
occur no later than the last day of the Term. During the inspection, Tenant shall surrender all
keys for the Premises to Landlord and shall inform Landlord of all combinations on locks, safes
and vaults, if any, in the Premises.
Tenant shall also provide Landlord with a written statement, at Tenants sole expense, from a
reputable company licensed and experienced in HVAC repair and maintenance approved by Landlord that
certifies that the HVAC equipment serving the Premises was inspected and serviced, if necessary,
within the last thirty (30) days of the Term and is in good working order. If Tenant fails to
provide the statement, Landlord may order an inspection of the HVAC at Tenants expense.
ARTICLE XVI
INSURANCE AND INDEMNITY
Section 16.01. Tenants Liability and Property Insurance.
During the Term, Tenant, at its expense, shall keep in full force and effect a policy of
commercial general liability insurance insuring Landlord and Tenant from and against all claims,
demands, actions or liability for injury to or death of any persons, and for damage to property
arising from or related to the use or occupancy of the Premises or the operation of Tenants
business and the business operated by Tenant and subtenants and concessionaires of Tenant in the
Premises. No deductible will be carried under this coverage without the prior written consent of
Landlord. The policy shall include coverage for property damage, bodily injury,
premises/operations, contractual liability (including Tenants indemnity under this Lease),
independent contractors, personal injury, product/completed operations, owned and nonowned
automobiles, and, if applicable, liquor liability insurance. If required by Landlord, Tenant must
carry building ordinance coverage. The insurance shall be written on an occurrence basis with
coverage in a minimum amount of $1,000,000.00 per occurrence for bodily injury/property damage and
$2,000,000.00 general aggregate limit. Tenant shall also maintain in full force and effect
insurance covering all trade fixtures, merchandise, personal property and equipment in amounts no
less than one hundred percent (100%) of the replacement value thereof, providing protection
against any peril included within the classification of the Fire and Extended Coverage,
including sprinkler damage, vandalism and malicious mischief. Tenant shall also maintain Workers
Compensation Insurance with a limit no less than the amount required by law.
During any construction on the Premises, Tenant shall cause its contractor to obtain a policy
of general liability insurance in the same form as required of Tenant, a policy of builders risk
insurance providing coverage for the expected value of Tenants Work when completed and Workers
Compensation as required by law.
All policies shall name the Landlord, the property manager, Landlords lender and any person,
firms or corporations designated by Landlord as additional insures. No additional insured shall be
liable for any payment for premiums. All additional insures shall be entitled to recovery for any
loss occasioned to them, their servants, agents or employees by reason of negligence of Tenant,
its officers, agents or employees. All policies shall contain a clause that the insurer will not
cancel or change such coverage without first giving Landlord thirty (30) days prior written
notice. All insurance shall be issued by an insurance company qualified to do business in the
State in which the Entire Premises is located and having an overall rating of Class A- or better
and a financial rating of Class V as rated in the most current available Bests Key Rating Guide.
Copies of all policies or certificates of insurance required hereunder shall be delivered to
Landlord as a condition to Tenants entry onto the Premises. All policies shall be written as
primary policies, not contributing with and not in excess of coverage which Landlord may carry.
Landlord may increase the limits of liability required hereunder in the exercise of Landlords
reasonable judgment.
If this Lease is canceled by reason of damage or destruction and Tenant is relieved of its
obligation to rebuild, any insurance proceeds for damages to the Premises, including all leasehold
improvements, but excluding all fixtures, will belong to Landlord, free and clear of any claims by
Tenant.
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Section 16.02 Landlords Acquisition of Insurance.
If Tenant at any time during the Term fails to procure or maintain insurance required
hereunder or to pay 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.
Section 16.03. Landlord Carried Insurance.
Landlord shall, subject to reimbursement as provided herein, maintain public liability, fire
with extended coverage insurance with a vandalism and malicious mischief endorsement, rental loss
insurance, earthquake (if not otherwise economically impracticable) or any other insurance coverage
deemed necessary by Landlord or Landlords lender (collectively, Landlord Carried Insurance)
through the Term, in amounts from time to time deemed reasonably necessary by Landlord or
Landlords lender on the Common Area. The Landlord Carried Insurance may be obtained through a
blanket policy or other form of pooled insurance coverage covering not only the Entire Premises,
but other property owned by Landlord or its affiliates. The fire and extended coverage insurance
shall be in an amount equal to at least ninety percent (90%) of the replacement value of the
Building and Improvements. During the Term, Tenant hereby agrees to reimburse Landlord as part of
the Common Area Expenses for Tenants pro rata share of any Landlord Carried Insurance attributable
to the Common Area and to reimburse Landlord for Landlord Carried Insurance attributable to the
Tenants Building and Improvements. In determining Tenants share of the premiums for Landlord
Carried Insurance, the schedule issued by the organization making the insurance rate on the
improvements, areas and/or risks covered, showing the various components of such rates, shall be
conclusive evidence of the charges which make up the insurance rate and the share to be charged to
the Premises. If such a schedule cannot be obtained, then Tenants share shall be a proportion of
the premiums for such Landlord Carried Insurance based on the ratio of the square footage of the
floor area of the Premises to the total square footage of the floor area of all building space
covered by such Landlord Carried Insurance.
Section 16.04. Indemnification of Landlord.
Tenant shall indemnify, defend, protect and save Landlord harmless from and against any and
all claims, demands, actions, damages, liability and expense (including reasonable attorneys fees
and costs of investigation) in connection with any damage to person and/or property arising
directly or indirectly from or connected with the conduct or management of the business conducted
by Tenant on the Premises, or the occupancy or use by Tenant of the Premises or any part of the
Entire Premises, or from any breach or default on the part of Tenant in the performance of any
covenant or agreement on the part of Tenant to be performed pursuant to this Lease, or from
violations of or noncompliance with any governmental requirements or insurance requirements, or
from any acts or omissions of Tenant or any person on the Premises by license or invitations of
Tenant or occupying the Premises or any part thereof under Tenant whether such damage occurs in, on
or about the Premises, the Common Area or the Entire Premises. In case Landlord shall be made a
party to any litigation commenced by or against Tenant, Tenant shall accept any tender of defense
by Landlord and shall, notwithstanding any allegations of negligence or misconduct on the part of
Landlord, its agents or employees, defend, protect and hold Landlord harmless and pay all costs,
expenses and reasonable attorneys fees incurred or paid by Landlord in connection with such
litigation; provided, however, Tenant shall not be liable for any such damage to the extent and in
the proportion such damage is ultimately determined to be attributable to the gross negligence or
willful misconduct of Landlord, its agents or employees, unless covered by insurance required to be
carried by Tenant. Landlord may, at its option, require Tenant to assume Landlords defense in any
action covered by this Section 16.03 through counsel satisfactory to Landlord.
Landlord shall, during the Term hereof, indemnify Tenant and save it harmless from and
against any and all claims, demands, actions, damages, liability and expense arising solely out of
the gross negligence or willful misconduct of the Landlord; providing, however, in no event shall
Landlord be liable to Tenant for any consequential damages, including, without limitation, any
claimed loss of profit or business.
Section 16.05. Boiler, HVAC and Evaporative Cooler Insurance.
If required by Landlord, Tenant, at its sole expense, shall procure and maintain in full
force and effect for the Term, boiler and machinery insurance on all air-conditioning equipment,
evaporative coolers, boilers, and other pressure vessels and systems, whether fired or unfired,
located in the Premises. If said objects and the damage that may be caused by them or result from
them are not covered by Tenants extended coverage insurance required pursuant to Section 16.01,
then such boiler insurance shall be in an amount satisfactory to Landlord and equal to one hundred
percent (100%) of the replacement value of such equipment.
Section 16.06. Waiver of Subrogation.
Landlord and Tenant hereby mutually waive their respective rights of recovery against each
other for any loss to the Premises or its contents resulting from actions on or with respect to
the Premises insured by fire, extended coverage or any other insurance existing for the benefit of
the respective parties and each party agrees to apply to their insurers to obtain similar waivers
from such insurers. Each party shall obtain any special endorsements required by such partys
insurer to evidence compliance with the aforementioned waiver.
Section 16.07. Waiver or Loss and Damage.
Landlord shall not be liable for any damage to property of Tenant, or of others, located in,
on or about the Premises, nor for the loss of or damage to any property of Tenant or of others by
theft or otherwise. Landlord shall not be liable to Tenant, Tenants employees or representatives
for any injury or damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water, rain or leaks from any part of the
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Premises or from the pipes, appliances or plumbing works or from the roof, street or sub-surface
or from any other places or by dampness or by any other cause of whatsoever nature. Landlord shall
not be liable to Tenant, Tenants employees or representatives for any such damage caused by other
tenants or persons in the Premises, occupants of adjacent property of the Entire Premises, or the
public, or caused by operations in construction of any private, public or quasi-public work.
Landlord shall not be liable for any latent defects in the Premises or in the Building except for
a period of one (1) year from the date of original completion of the Building by Landlords
contractor. All property of Tenant kept or stored on the Premises shall be so kept or stored at
the sole risk of Tenant and Tenant shall hold Landlord harmless from any claims arising out of
damage to the same, including subrogation claims by Tenants insurance carriers, unless such
damage shall be caused by the willful act or gross negligence of Landlord. Landlord shall not be
liable in any circumstances for any consequential damages of any kind or nature whatsoever,
including, without limitation, any claimed loss of profit or business.
Section 16.08. Notice by Tenant.
Tenant shall give immediate notice to Landlord in case of fire or accidents in the Premises
or in the Building or of any damage or defects in the Premises, the Building or any fixtures or
equipment therein.
ARTICLE XVII
ESTOPPEL CERTIFICATE, ATTORNMENT, SUBORDINATION,
MORTGAGEE PROTECTION CLAUSE
Section 17.01. Estoppel Certificate.
Within five (5) days after Landlords written request, Tenant agrees to deliver in recordable
form a certificate to any proposed mortgagee, ground lessor or purchaser, or to Landlord,
certifying that this Lease is in full force and effect, that there does not exist nor has there
existed any toxic materials or hazardous waste in, on or about the Premises, that no more than one
(1) months rent has been paid in advance, the essential terms of the Lease, that there are no
defenses or offsets thereto, or stating those claimed by Tenant, and any other information that
may be requested.
Section 17.02. Attornment.
Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event
of exercise of the power of sale under any mortgage made by the Landlord covering the Premises, or
in the event of a termination of any ground lease covering the Building or Premises, attorn to the
purchaser or ground lessor upon any such foreclosure or sale or termination of ground lease and
recognize such purchaser or ground lessor as the Landlord under this Lease, provided that any
purchaser or mortgagee or ground lessor shall recognize this Lease as remaining in full force and
effect so long as Tenant is not in default hereunder.
Section 17.03. Subordination.
Upon the written request of Landlord, and provided such mortgagee or ground lessor confirms
in writing the nondisturbance provisions of Section 17.02 above, Tenant will immediately
subordinate its rights hereunder to the lien of any mortgage or mortgages or the lien resulting
from any other method of financing or refinancing, or any ground lease now or hereafter in force
covering the land and the Building or upon any buildings hereafter placed upon the land of which
the Premises are a part, and to all advances made or hereunder to be made upon the security
thereof. This Section 17.03 shall be self-operative and no further instrument or subordination
shall be required unless requested by Landlords mortgagee or ground lessor. Tenant covenants and
agrees that it will execute subordination agreements at any time upon Landlords written request
without compensation being made therefor. However, if Landlord so elects, this Lease shall be
deemed prior in lien to any mortgage, deed of trust or other encumbrances or ground lease upon or
including the Premises, regardless of recording and Tenant will execute a statement in writing to
such effect at Landlords request.
Section 17.04. Mortgagee Protection Clause.
Tenant agrees to give any mortgagees, trust deed holders and/or ground lessor, by registered
mail, a copy of any notice of default served upon the Landlord, provided that prior to such notice
Tenant has been notified in writing (by way of notice of assignment of lease, or otherwise) of the
addresses of such mortgagees, trust deed holders and/or ground lessor. Tenant further agrees that
if Landlord shall have failed to cure such default within the time provided for in this Lease,
then the mortgagees and/or trust deed holders shall have an additional thirty (30) days within
which to cure such default, or if such default cannot be cured within that time, then such
additional time as may be necessary, provided such mortgagees, trust deed holders and/or ground
lessor commence such cure within thirty (30) days and diligently pursue the remedies necessary to
cure such default (including but not limited to commencement of foreclosure proceedings to effect
such cure), in which event this Lease shall not be terminated while such remedies are being so
diligently pursued.
Section 17.05. Landlord Waiver Form.
Upon request by Tenant, Landlord shall execute an Landlords waiver and consent to financing
for Tenants fixturization on the Premises in a form to be supplied by Landlord. Tenant shall pay
Landlord $150.00 (increased by the Index) for each form signed by Landlord.
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ARTICLE XVIII
ASSIGNMENT AND SUBLETTING
Section 18.01. Consent Required.
Except as provided in Sections 18.02, 18.03 and 18.04 herein, Tenant shall not assign this
Lease in whole or in part, nor sublet all or any part of the Premises, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld. It is agreed that Landlord
will not be acting unreasonably in refusing to consent to an assignment or sublease if, in
Landlords reasonable business judgment, the quality of the merchandising operation of the
proposed assignee or subtenant is not equal to that of the Tenant, the use of the Premises will
change, such assignee or subtenant may adversely affect the business of other tenants or the
tenant mix in the Entire Premises or Landlords ability to obtain percentage rent, the net worth
of such assignee or subtenant is less than that of Tenant at time of execution of this Lease, or
the proposed assignee or subtenant lacks sufficient working capital to operate the business. The
consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity
for such consent to any subsequent assignment or subletting. If this Lease is assigned by Tenant,
or if the Premises or any part thereof are sublet or occupied by any person or entity other than
Tenant, Landlord may collect Rent from the assignee, subtenant or occupant, and apply the net
amount collected to the Rent herein reserved, not no such assignment, subletting, occupancy or
collection shall be deemed a waiver on the part of Landlord, or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. Irrespective of any assignment or sublease,
Tenant shall remain fully liable under this Lease and shall not be released from performing any of
the terms, covenants and conditions of this Lease. If Tenant assigns this Lease or sublets the
Premises, any rent paid to Tenant in addition to the Rent payable to Landlord as set forth in this
Lease shall be paid be paid by Tenant to Landlord as additional rent.
If Tenant is a corporation, an unincorporated association or a partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate in excess of forty-nine percent (49%) shall be deemed an assignment
within the meaning and provisions of this Section 18.01.
Tenant shall pay Landlord a non-refundable processing fee of $50.00 (increased each year by
the Index) for each requested assignment or sublease to cover Landlords costs. This fee shall
accompany any request for assignment or sublease. In addition, Tenant shall pay all costs incurred
by Landlord in connection with reviewing a request to consent to an assignment or sublease,
including all of Landlords attorneys and accountants fees.
Section 18.02. Permitted Assignment or Subletting by Franchisor.
If Tenant is a franchisor, Tenant may assign its interest herein or sublet all or part of the
Premises once to a bona fide franchisee or licensee of Tenant without the payment of the fee
described in Section 18.01 (but subject to all other conditions contained therein), provided there
shall be no change in the use of the Premises, provided Tenant notifies Landlord in writing thirty
(30) days prior to such subletting or assignment and provided further such assignee or subtenant
meets all of Tenants then nationwide franchise requirements including payment of the applicable
standard franchise fee. Any subsequent subletting or assignment shall be subject to all the
conditions of Section 18.01, including the payment of the fee.
Section 18.03. Concessionaires.
Tenant may grant concessions for the operation of one or more departments of the business
which Tenant operates on the Premises as required by Section 10.01; provided however that (a) each
such concession may be allowed only upon receipt by Tenant of the prior written consent of the
Landlord, which consent shall not be unreasonably withheld, and shall be subject to all the terms
and provisions of this Lease; (b) the Gross Receipts, as defined in Section 4.04 hereof, from the
operation of each such concession shall be deemed to be a part of the Gross Receipts of Tenant for
the purpose of determining the Percentage Rent payable to Landlord; (c) all of the provisions
hereof applying to the business of Tenant including the provisions concerning reports and audits
shall apply to each such concession; and (d) at least seventy-five percent (75%) of the sales
floor area of the Premises shall at all times be devoted solely to the business operated by
Tenant.
Section 18.04. Involuntary Assignment.
No interest of Tenant in this Lease shall be assignable by operation of law (including,
without limitation, the transfer of this Lease by testacy or intestacy). Each of the following
acts shall be considered an involuntary assignment: (a) if Tenant is or becomes bankrupt or
insolvent, makes an assignment for the benefit of creditors, or institutes a proceeding under the
Bankruptcy Act in which Tenant is bankrupt; or, if Tenant is a partnership or consists of more
than one person or entity, if any partner of the partnership or other person or entity is or
becomes bankrupt or insolvent, or makes an assignment for the benefit of creditors; (b) if a writ
of attachment or execution is levied on this Lease; or (c) if, in any proceeding or action to
which Tenant is a party, a receiver is appointed with authority to take possession of the
Premises. An involuntary assignment shall constitute a default by Tenant, and Landlord shall have
the right to elect to terminate this Lease, in which case this Lease shall not be treated as an
asset of Tenant.
ARTICLE XIX
ADVERTISING AND PROMOTION
Section 19.01. Advertising of Tenant.
With the exception of national or regional advertising, Tenant, at its sole expense, agrees to
refer to the Entire Premises by the name provided in Section 1.02.1, if one is so provided, in
designating the location of the
UNION CITY ENTERTAINMENT CENTER
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Premises in all local newspapers or other advertising, stationery, other printed material and in
all other references to location, and to include the address and identity of its business activity
in the Premises in all advertisements made by Tenant for its operation at the Entire Premises.
ARTICLE XX
DESTRUCTION OF PREMISES
Section 20.01. Total or Partial Destruction.
If the Premises shall be damaged by fire, the elements or other casualty or cause whether or
not insured against under the provisions of Section 16.01 and 16.03, Tenant at its own expense,
shall cause such damage to be repaired and the Premises reconstructed and restored as soon as
reasonably practical, and any Rent or other charges payable hereunder shall not be abated.
Landlord shall make any insurance proceeds available to Tenant on a reasonable basis for that
purpose. Tenant shall be responsible for the concurrent prompt repair and restoration of its
furniture, fixtures and equipment in the Premises damaged by such event. In the event that fifty
percent (50%) or more of the Premises are damaged or destroyed by fire, the elements or other
cause or casualty, Landlord shall have the right, to be exercised by written notice delivered to
Tenant within sixty (60) days from and after said occurrence, to elect not to require the Tenant
to reconstruct and repair the Premises, and in such event this Lease and the tenancy hereby
created shall cease as of the date of said damage. If Landlord elects to terminate this Lease in
accordance with this Section 20.01, all insurance proceeds, except for insurance proceeds for
Tenants fixtures, shall become the property of Landlord.
Section 20.02. Waiver of Termination.
Tenant hereby waives any statutory rights which it may have to terminate the Lease in the
event of the partial or total destruction of the Premises, if being agreed that the provisions of
this Article XX shall control.
ARTICLE XXI
EMINENT DOMAIN
Section 21.01. Total Condemnation.
If the whole of the Premises shall be acquired for any public or quasi-public use or purpose
or taken by eminent domain, then the Term shall cease and terminate as of the date possession or
title is given to such condemning authority in such proceeding and all rentals shall be paid up to
that date.
Section 21.02. Total Parking Area.
If the entire portion of the Common Area used for parking in the Entire Premises (Parking
Area) shall be acquired for any public or quasi-public use or purpose or taken by eminent domain,
then the Term shall cease and terminate as of the date possession or title is given to such
condemning authority in such proceeding unless Landlord shall provide other parking facilities
substantially equal to the previously existing ratio between the Parking Area and the Premises
within ninety (90) days from the date of such taking. In the event that Landlord shall provide such
other parking facilities, then this Lease shall continue in full force and effect without abatement
of Rent or other charges.
Section 21.03. Partial Condemnation.
If any part of the Premises shall be acquired or taken by eminent domain for any public or
quasi-public use or purpose, and in the event that such partial taking or condemnation shall
render the Premises, in Landlords discretion, unsuitable for the operation of Tenants business,
then the Lease shall cease and terminate as of the date possession or title is given to such
condemning authority is such proceeding. In the event of a partial taking or condemnation which is
not extensive enough to render the Premises unsuitable for the operation of Tenants business,
then Landlord shall promptly restore the Premises to the extent of the condemnation proceeds to a
condition comparable to its condition at the time of such condemnation less the portion lost in
the taking, and this Lease shall continue in full force and effect and the Minimum Rent shall be
equitably reduced based on the percentage of floor area of the Premises lost in the taking.
Section 21.04. Partial Condemnation of Parking Area.
If any part of the Parking Area shall be acquired or condemned by eminent domain for any
public or quasi-public use or purpose and if, as the result of such partial taking the ratio of
square feet of Parking Area to square feet of the sales floor area of the Entire Premises is
reduced to a ratio below that permitted by law, then the Lease shall cease and terminate from the
date possession or title is given to such condemning authority in such proceeding, unless Landlord
shall provide reasonable evidence of its ability to increase the parking ratio to a permitted
ratio or Landlord can provide substitute parking either in or outside the Entire Premises, in
which event this Lease shall be unaffected and remain in full force and effect as between the
parties.
Section 21.05. Allocation of Award.
Except as provided below, in the event of any condemnation or taking as herein provided,
whether whole or partial, Tenant shall not be entitled to any part of the award, as damages or
otherwise, for such condemnation and Landlord is to receive the full amount of such award; Tenant
expressly waives any right or claim to any part thereof, including the right or claim for the
value of the unexpired portion of the Term or diminution in value of Tenants leasehold interest,
or for the value of any option to extend the Term or renew this Lease. Tenant shall, however, have
the right, provided such award shall not diminish Landlords award, to claim and recover from the
condemning
UNION CITY ENTERTAINMENT CENTER
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authority, but not from Landlord, such compensation as may be separately awarded or recoverable by
Tenant in Tenants own right on account of any and all damages to Tenants business for Goodwill
and loss of income by reason of the condemnation and for or on account of any cost or less to
which Tenant might incur in removing Tenants merchandise, future, fixtures and equipment from the
Premises.
ARTICLE XXII
DEFAULT
Section 22.01. Tenants Default.
The occurrence of any of the following shall constitute a default by Tenant: (a) failure to
pay rent when due, if the failure continues for three (3) days after notice has been given to
Tenant; (b) abandonment and/or vacation of the Premises; (c) failure to operate in the Premises
for ten (10) consecutive days; (d) failure to perform any nonmonetary provision of this Lease if
the failure to perform is not cured within thirty (30) days after notice has been given to Tenant;
provided that if the nonmonetary default cannot reasonably be cured within thirty (30) days,
Tenant shall not be default of this Lease if Tenant commences to cure the default within the
thirty (30) day period and diligently and in good faith continues to cure the default; and (e)
failure to timely deliver an estoppel certificate as required by Section 17.01.
Notices given under this Section 22.01 shall not be deemed a forfeiture or a termination of
this Lease unless Landlord so elects in the notice. Notices given under this Section 22.01 shall
be in lieu of and not in addition to any statutory notice required by law.
Section 22.02. Landlords Remedies.
Landlord shall have the following remedies if Tenant commits a default. These remedies are
not exclusive; they are cumulative in addition to any remedies now or later allowed by law.
Landlord can continue this Lease in full force and effect after Tenants default and
abandonment, and the Lease will continue in effect as long as Landlord does not terminate Tenants
right to possession, and Landlord may enforce all Landlords rights and remedies under the Lease,
including the right to collect Rent when due. During the period Tenant is in default, Landlord can
enter the Premises and relet them, or any part of them, to third parties for Tenants account.
Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, without limitation, brokers commissions, expenses of remodeling the Premises
required by the reletting, and like costs. Reletting can be for a period shorter or longer than
the remaining Term of this Lease. Tenant shall pay to Landlord the Rent due under this Lease on
the dates the Rent is due, less the rent Landlord receives from any reletting. No act allowed by
this Section 22.02 shall terminate this Lease unless Landlord notifies Tenant that Landlord elects
to terminate this Lease.
If Landlord elects to relet the Premises as provided in this Section 22.02, Rent that
Landlord receives from reletting shall be applied to the payment of: first, any indebtedness from
Tenant to Landlord other than Rent due from Tenant; second, all costs, including maintenance,
incurred by Landlord in reletting; and third, Rent due and unpaid under this Lease. After
deducting the payments referred to in this Section, any sum remaining from the Rent Landlord
receives from reletting shall be held by Landlord and applied in payment of future Rent as Rent
becomes due under this Lease. In no event shall Tenant be entitled to any excess Rent received by
Landlord. If, on the date Rent is due under this Lease, the Rent received from the reletting is
less than the Rent due on that date, Tenant shall pay to Landlord, in addition to the remaining
Rent due, all costs, including maintenance, Landlord incurred in reletting that remain after
applying the Rent received from the reletting as provided in this Section 22.02.
Landlord can terminate Tenants right to possession of the Premises at any time. No act by
Landlord other than giving notice to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises or the appointment of a receiver on Landlords initiative to protect
Landlords interest under this Lease shall not constitute a termination of Tenants right to
possession. On termination, Landlord has the right to recover from Tenant: (a) the worth, at the
time of the award, of the unpaid rent that had been earned at the time of termination of this
Lease; (b) 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; and (d) any
other amount, and court costs, necessary to compensate Landlord for all detriment proximately
caused by Tenants default. The worth, at the time of the award, as used in (a) and (b) of this
Section 22.02, is to be computed by allowing interest at the maximum rate an individual is
permitted by law to charge. The worth, at the time of the award, as referred to in (c) of this
Section 22.02, 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%).
Section 22.03. Appointment of Receiver.
If Tenant is in default of this Lease, Landlord shall have the right to have a receiver
appointed to collect Rent and conduct Tenants business. 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.
Section 22.04. Landlords Right to Cure Tenants Default.
Landlord, at any time after Tenant commits a default, can cure the default at Tenants cost.
If Landlord at any time, by reason of Tenants default, pays any sum or does any act that requires
the payment of any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord
at the time the sum is paid, and if paid at a later date shall bear interest at the maximum rate an
individual is permitted by law to charge from the date the sum is paid by Landlord until Landlord
is reimbursed by Tenant. The sum, together with interest on it, shall be additional rent.
UNION CITY
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Section 22.05. Waiver of Rights of Redemption.
Tenant expressly waives any and all rights of redemption granted by or under any present or
future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of
Landlord obtaining possession of the Premises, by reason of the violation by Tenant of any of the
covenants or conditions of this Lease, or otherwise.
Section 22.06. Default by Landlord.
If Landlord fails to perform any of the covenants or conditions required on its part to be
performed pursuant to this Lease, where such failure continues for a period of thirty (30) days
after receipt of written notice specifying the nature and extent of such default in detail
(provided, however, that if such default is of a nature that it cannot reasonably be cured within
thirty (30) day period). Landlord shall be liable to Tenant for all damages sustained as a direct
result of such breach, subject to the additional rights of any mortgagees of Landlord as provided
in Section 17.04 herein. Landlords liability shall be limited to Landlords interest in the
Entire Premises. Neither Landlord nor any of its partners shall be personally liable.
ARTICLE XXIII
SUCCESSORS; SALE OF PREMISES
Section 23.01. Successors and Assigns.
Except as provided in Section 18.05, all rights and liabilities herein given to, or imposed
upon, the respective parties hereto shall extend to and bind the several respective heirs,
executors, administrators, successors, and assigns of said parties; and if there shall be more
than one tenant, they shall all be bound jointly and severally by the terms, covenants and
agreements herein. No rights, however, shall inure to the benefit of any assignee of Tenant unless
the assignment to such assignee has been approved by Landlord in writing as provided in Section
18.01 hereof.
Section 23.02. Sale of Premises.
In the event Landlord shall sell, convey, transfer or exchange the Premises, the Entire
Premises or the Building, Tenant agrees to recognize and attorn to the purchaser or transferee, as
the Landlord hereunder and Landlord shall be and is hereby relieved and released from any
liability under any and all of its covenants and obligations under the Lease arising out of any
act, occurrence or event arising after such sale, conveyance, transfer or exchange.
ARTICLE XXIV
QUIET ENJOYMENT
Section 24.01. Landlords Covenant.
Upon timely payment by Tenant of the Rent, and upon the observance and performance of all of
the covenants, terms and conditions on Tenants part to be observed and performed hereunder,
Tenant shall peaceably and quietly hold and enjoy the Premises for the Term without unreasonable
hindrance or interruption by Landlord or any other person or persons lawfully or equitably
claiming by, through or under the Landlord, subject, nevertheless, to the terms and conditions of
this Lease. Landlord may subject its interest in the Premises to a Lien or Mortgage provided, the
lienholder furnishes Tenant with a Subordination, Attornment and Non-Disturbance Agreement.
ARTICLE XXV
MISCELLANEOUS
Section 25.01. Index.
Whenever in this Lease there is a reference to the Index, such reference shall refer to the
following:
(a) The Index as used in this Lease shall be deemed to mean The United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban
Consumers, U.S. City Average, Subgroup All items, (1982-84 = 100) (the Index). If at any
time there shall not exist the Index in the format recited herein, Landlord shall substitute
any official index published by the Bureau of Labor Statistics or successor or similar
substitute any office index published by the Bureau of Labor Statistics, or successor or
similar governmental agency, as may then be in existence and shall, in Landlords opinion,
be most nearly equivalent thereto.
(b) The sum to be increased in accordance with the provisions of the Index shall be
increased using the following formula: Such sum shall be increased by a percentage equal to
the percentage increase, if any, in the Index published for the Comparison Month over the
Index published for the Base Month; provided, however, in no event shall said sum be less
than that which was due immediately preceding the date of adjustment. If no Comparison
Month or Base Month shall be specified, the Comparison Month shall be three (3) months
prior to the anniversary of the Rent Commencement Date for the year of the increase, and
the Base Month shall be three (3) months prior to the Rent Commencement Date.
UNION CITY
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Section 25.02. Waiver.
No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein
stipulated shall not be deemed to be a waiver of any other default, term, covenant or condition
concerning the same. No delay or omission in the exercise of any right or remedy of Landlord shall
impair such a right or remedy or be construed as a waiver. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular
rental so accepted, regardless of Landlords knowledge of such preceding breach at the time of
acceptance of such Rent.
Section 25.03. Accord and Satisfaction.
No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein
stipulated shall be deemed to be other than on account of the earliest stipulated Rent, nor shall
any endorsement or statement on any check or any letter accompanying any check or payment as Rent
be deemed an accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlords right to recover the balance of such Rent or pursue any other remedy in
this Lease.
Section 25.04. Entire Agreement.
This Lease and the Exhibits attached hereto and forming a part hereof, set forth all the
representations, covenants, promises, agreements, conditions and understandings between Landlord
and Tenant concerning the Premises and there are no representations, covenants, promises,
agreements, conditions or understandings, either oral or written, between them other than are
herein set forth. Any subsequent alteration, amendment, change or addition to this Lease must be
in writing, signed by Landlord and Tenant.
Section 25.05. No Partnership.
Landlord does not, in any way or for any purpose, become a partner of Tenant in the conduct of
its business, or otherwise, or joint venture or a member of a joint enterprise with Tenant by
reason of this Lease. The provisions of this Lease relating to the Percentage Rent payable
hereunder are included solely for the purposes of providing a method whereby Rent is to be measured
and ascertained.
Section 25.06. Force Majeure.
In the event that either party hereto shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lock-outs, labor troubles,
inability to procure materials, failure of power, governmental moratorium, riots, insurrection, war
or other reason of a like nature not the fault of the party delaying in performing work or doing
acts required under the terms of this Lease (but excluding delays due to financial inability), then
performance of such act shall be excused for the period of such delay. The provisions of this
Section 25.06 shall not operate or excuse Tenant from the prompt payment of Minimum Rent,
Percentage Rent, additional rent or any other payments required by the terms of this Lease.
Section 25.07. Holding Over.
Any holding over after the expiration of the Term, with or without the consent of the
Landlord, shall be construed to be a tenancy from month to month at a rent specified by Landlord
in its sole discretion, which rent shall never be less than the then prevailing market rate for
the Entire Premises (as determined solely by Landlord) and shall otherwise be on the terms and
conditions herein specified, as far as applicable.
Section 25.08. Notices.
All notices hereunder must be served personally or by certified or registered mail, postage
prepaid, addressed to Tenant and to Landlord at the address given below or at such other address
as Landlord or Tenant may designate by written notice pursuant to this Section 25.08. Any notice
given by mail shall be deemed given forty-eight (48) hours after deposit in the mail.
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Landlord:
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Dyer Triangle LLC
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150 Pelican Way
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San Rafael, CA 94901
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Attn.: Real Estate Department
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Tenant:
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Century Theatres, Inc.
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150 Pelican Way
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San Rafael, CA 94901
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Attn.: Legal Department
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Section 25.09. Captions and Section Numbers.
The captions, section numbers, article numbers, and index appearing in this Lease are inserted
only as a matter of convenience and in no way define, limit, construe, or describe the scope or
intent of such sections or articles of this Lease nor in any way affect this Lease.
Section 25.10. Tenant Defined, Use of Pronoun.
The word Tenant means each and every person or party mentioned as a Tenant herein, be the
same one or more; and if there shall be more than one Tenant, any notice required or permitted by
the terms of this Lease may be given by or to any one thereof, and shall have the same force and
effect as if given by or to all thereof. The
UNION CITY
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persons signing as Tenant shall be jointly and severally liable. The use of the neuter singular
pronoun to refer to Landlord or Tenant shall be deemed a proper reference even though Landlord or
Tenant may be an individual, a partnership, a corporation, or a group of two or more individuals
or corporations. The necessary grammatical changes required to make the provisions of this Lease
apply in the plural sense where there is more than one Landlord or Tenant and to either
corporations, associations, partnerships, or individuals, males or females, shall in all instances
be assumed as though in each case fully expressed.
Section 25.11. Partial Invalidity.
If any term, covenant or condition of this Lease or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or
the application of such term, covenant or condition to persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be affected thereby and each term,
covenant or condition of this Lease shall be valid and enforced to the fullest extent permitted by
law.
Section 25.12. No Option.
The submission of this Lease for examination does not constitute a reservation of or option
for the Premises and this Lease becomes effective as a Lease only upon execution and delivery
thereof by Landlord to Tenant.
Section 25.13. Recording.
Tenant shall not record this Lease or a memorandum thereof.
Section 25.14. Legal Expenses.
In the event that any time during the Term either Landlord or Tenant shall institute any
action or proceeding against the other relating to the provisions of this Lease, or any default
hereunder, or engage an attorney to enforce such provision then, and in that event, the
unsuccessful party in such action or proceeding agrees to reimburse the successful party for the
actual expenses of attorneys fees and disbursements incurred therein by the successful party.
The successful party in such suit shall be entitled to its costs of suit and actual
attorneys fees whether or not such action is prosecuted to judgment. Successful party within
the meaning of this Section 25.14 shall include, without limitation, a party who brings an action
against the other or who defends against an action brought by the other and whose position is
substantially upheld.
Section 25.15. Rights Cumulative.
The rights and remedies of Landlord specified in this Lease shall be cumulative and in
addition to any other rights and remedies provided by law.
Section 25.16. Authority.
If Tenant is a corporation or partnership, each individual executing this Lease on behalf of
such entity represents or warrants that he or she is duly authorized to execute and deliver this
Lease on behalf of such entity and that such entity shall be bound by all the terms and provisions
hereof.
Section 25.17. Mortgage Changes.
Tenant shall not unreasonably withhold its consent to changes or amendments to this Lease
requested by the holder of any mortgage or deed of trust covering Landlords interest in the
Premises so long as such changes do not materially alter the economic terms of this Lease or
otherwise materially diminish the rights or materially increase the obligations of Tenant
hereunder.
Section 25.18. Time of the Essence.
Time is of the essence in each and every provision of this Lease except for delivery of
possession of the Premises as set forth herein.
Executed as of the date first written above.
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LANDLORD: DYER TRIANGLE LLC, A
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CALIFORNIA LIMITED LIABILITY COMPANY
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/s/ Raymond Syufy
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Its:
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Member Manager
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TENANT:
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CENTURY THEATRES, INC.
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DELAWARE CORPORATION
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/s/ Joseph Syufy
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Its:
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President
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UNION CITY
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EXHIBIT 10.26(a)
LEASE
SPARKS, NEVADA
Table of Contents
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Page No.
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RECITALS
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1
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ARTICLE I EXHIBITS DEFINITIONS
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1
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II PREMISES TERM OPTIONS COVENANT OF TITLE
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2
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2.01
Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04
Covenant of Title; Authority and Quiet Possession; Transfer of Title
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3
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ARTICLE III USE OF PREMISES
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4
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3.01 Use
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4
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ARTICLE IV RENT
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4
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4.01 Annual Fixed Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V TAXES, ASSESSMENTS AND UTILITIES
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6
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5.01 Impositions
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6
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5.02
Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.03 Contest of Taxes
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6
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5.04 Utilities
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7
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5.05 Personal Property Taxes
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7
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i
LEASE
SPARKS, NEVADA
Table of Contents
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Page No.
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ARTICLE VI INSURANCE
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7
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6.01
Acquisition of Insurance Policies
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7
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6.02
Types of Required Insurance
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7
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6.03
Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Fund Held in Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE
VII MAINTENANCE, REPAIRS AND ALTERATIONS
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10
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7.01 Alterations Changes
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10
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7.02
Repairs Maintenance
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10
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ARTICLE VIII ENVIRONMENTAL MATTERS
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10
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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11
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8.03 Remedial Work
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12
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8.04 Maintenance of Premises
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13
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8.05
Landlords Responsibilities
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13
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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14
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ARTICLE IX IMPROVEMENTS
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14
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9.01 Tenant Improvements
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14
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9.02 Hold Harmless
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14
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9.03
Permits; Compliance With Codes
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15
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9.04 Ownership of Improvements
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15
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9.05 Control
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15
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ARTICLE X INDEMNITY
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15
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10.01 Landlords Indemnity
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15
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10.02 Tenants Indemnity
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16
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ARTICLE XI ASSIGNMENT AND SUBLETTING
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16
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11.01 Assignment and Subletting
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16
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11.02 Notice to Landlord
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16
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ARTICLE XII MORTGAGE SUBORDINATION
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16
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12.01 Existing Mortgages
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16
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12.02 Future Mortgages
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16
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ARTICLE
XIII CONDEMNATION EMINENT DOMAIN
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17
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13.01 Definitions
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17
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13.02 Notice to Other Party
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17
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13.03 Total Taking Effect on Rent and Term
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18
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13.04
Distribution of Award for Taking
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18
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13.05 Partial Taking Rent Adjustments
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18
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13.06 Partial Taking Option to Terminate
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18
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13.07 Separate Tenants Award
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18
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ARTICLE XIV DEFAULT
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18
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14.01 Tenants Default
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18
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14.02 Landlords Remedies Cumulative
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19
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14.03 Landlords Default
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20
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14.04
Waiver of Redemption
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21
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14.05 Dispute Resolution
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21
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iii
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Page No.
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14.06 Attorneys Fees
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21
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ARTICLE XV REPRESENTATIONS AND WARRANTIES
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21
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15.01 Landlords Representations and Warranties
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21
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15.02 Tenants Representations and Warranties
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22
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ARTICLE XVI DAMAGE OR DESTRUCTION
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22
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16.01 Repairs, Alterations and Further Improvements
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22
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16.02 Prompt Repair
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23
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16.03 Rent Adjustment
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23
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16.04 Damage During Last Two (2) Years of Term
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23
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ARTICLE XVII MISCELLANEOUS
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23
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17.01 Limitation on Liability
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23
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17.02 Brokers
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23
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17.03 Modification
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24
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17.04 Severability
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24
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17.05 Governing Law
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24
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17.06 Terminology
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24
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17.07 Counterparts
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24
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17.08 Binding Effect
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24
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17.09 Captions
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24
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17.10 Notices to Landlord and Tenant
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24
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17.11 Addresses for Notices to Landlord and Tenant
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25
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17.12 Entire Agreement
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25
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17.13 Sale or Transfer of Premises
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25
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17.14
Force Majeure
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26
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17.15 Waiver
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26
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17.16 Estoppel Certificate
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26
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Page No.
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17.17
Number and Gender
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26
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17.18 No Holding Over
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26
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17.19 Mechanics Liens
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26
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17.20 Relationship of Parties
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27
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17.21 Time of the Essence
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27
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17.22 Facsimile Copies
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27
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17.23 Anti-Merger
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27
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SIGNATURE PAGE
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28
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Exhibit A A Description of Leased Premises
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Exhibit B Form of Memorandum of Lease
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v
LEASE SPARKS, NEVADA
THIS
INDENTURE OF LEASE, dated and effective as of March 7, 1997, by
and between
SYUFY ENTERPRISES,
a California Limited Partnership with an office at 150 Golden Gate Ave., San
Francisco, CA, hereinafter called Landlord, and
CENTURY THEATRES, INC.,
a Delaware corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in a parcel of land described on Exhibit A attached hereto.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the land.
NOW THEREFORE,
the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the tract of land hereinafter referred to as Premises or Leased
Premises.
EXHIBIT B Form of Memorandum of Lease
1.02 Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date and Rent Commencement Date shall mean the date which is the earlier
of (i) fifteen months after Tenant has secured a building permit for construction of Tenants
building or (ii) the date on which Tenant opens for business in the Premises.
The
term Default Rate shall mean the Ten percent (10%).
The term Initial Term is defined in
Section 2.02 herein.
The term Leased Premises or Premises shall mean the tract of land described on Exhibit A.
The term Mortgage shall mean any mortgage or deed of trust or other instrument in the nature
thereof evidencing a security interest in the Leased Premises or any part thereof.
The
term Number of Term Years shall mean 20 years.
1
The
term Option Periods shall mean two (2) successive separate
periods of five (5) years
each and one (1) successive period of four (4) years.
The
term Percentage Rate shall mean eight percent (8%).
The term Planned Use shall mean the construction and operation of a 57,784 square foot multi-plex
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 CC&Rs shall mean the Declaration of Covenants, Conditions, Restrictions and Easements
for Victorian Square recorded in the City of Sparks on March 4, 1997.
The term Tenants Building shall mean the building to be erected by Tenant.
The term term of this Lease or term hereof shall mean the initial term, as provided in the
article captioned Term and any renewal or extensions thereof.
ARTICLE II
PREMISES TERM OPTIONS COVENANT OF TITLE
2.01 Lease of Premises.
A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms
and conditions contained herein.
B) The Premises are being leased in their as is condition subject to Article VIII herein
captioned Environmental Matters.
C) Landlord shall deliver possession of the Premises to Tenant on the Effective Date.
D) Tenant shall be a party to and subject and subordinate to the Declarations of Covenants,
Conditions, Restrictions and Easements for Victorian Square. Tenant shall have all rights related
to the use of the Common Areas as set forth in the CC&Rs and Tenant shall be obligated to pay its
hare of all costs and expenses, including property taxes, related to the Common Area as set forth
in the CC&Rs.
2.02 Term of Lease.
2
Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
The
Initial Term of this Lease shall begin on the
Commencement Date and shall terminate twenty (20) years thereafter and shall terminate on the last day of the calendar month during
which
the date which is twenty (20) years after the Commencement Date occurs. References
herein to the Lease
Term shall mean the Initial Term of this Lease or the Initial Term as extended under Section 2.02.
2.03 Option to Extend Lease Term.
A)
Tenant may, at Tenants option, extend the Initial Term of this
Lease for up to two (2) consecutive additional periods of five
(5) years each
and one (1) additional period
of four (4) years (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) Tenants right to the options to extend the Lease Term and Tenants rights to the
Renewal Term are subject to:
(1) This Lease being in full force and effect on the last day of the Initial Term or the
then current Renewal Term, as applicable.
(2) Compliance with the following procedure for exercising the option in question:
(a) At
least nine (9) months before the last day of the Initial Term, or the then current Renewal Term, as the case may be, Tenant shall give Landlord written
notice exercising the option.
(b) Each
party shall, at the request of the other, execute a memorandum acknowledging the fact that the option in question has been exercised. If an option is
properly exercised by Tenant, the failure of Landlord to execute such memorandum shall not
invalidate such option or the exercise thereof.
(3) Tenant is not in default (meaning the breach of any obligation hereunder and failure to
cure that breach within the time permitted in Section 14.01) at time of the exercise of the renewal
and at the commencement of the renewal term.
2.04
Covenant of Title; Authority and Quiet Possession; Transfer of Title.
(A) Landlord represents and warrants to Tenant that Landlord has full right and lawful
authority to enter into and perform Landlords obligations under this Lease for the term hereof,
and has good an marketable title to the Leased Premises in fee simple.
(B) At
all times during the Term, Tenant shall keep and maintain the Leased Premises and Tenants Building in good order and repair and in a clean and safe condition,
reasonably free of debris. Tenant shall make any and all additions to and all alterations and
repairs in, on and about the Leased Premises, which may be required by, and shall otherwise observe
and comply with, all public laws, ordinances
3
and regulations from time to time applicable to the Leased Premises. Tenant shall indemnify and
save harmless Landlord from and against all actions, claims and damages by reason of Tenants
failure to comply with and perform its obligations under this section.
(C) Tenant will not permit the Leased Premises to become subject to any mechanics, laborers or
materialmens lien on account of labor or material furnished to Tenant or claimed to have been
furnished to Tenant in connection with work of any character performed or claimed to have been
performed on the Leased Premises by or at the direction or sufferance of Tenant; provided, however,
Tenant shall have the right to contest in good faith and with reasonable diligence the validity of
any such lien or claimed lien and on final determination of the lien or claim for the lien, Tenant
will immediately pay any judgment rendered with all proper costs and charges, and will, at its own
expense, have the lien released and any judgment satisfied.
ARTICLE III
USE OF PREMISES
3.01
Use.
A) The Premises may be used for the Planned Use no other purpose. Tenants use shall
be subject to the CC&Rs.
B) Landlord shall agree and consent to such utility and other easements encumbering the
Premises or benefiting the Premises as Tenant may reasonably require for its use and occupancy of
the Premises.
C) Tenant shall have the right to use the easements for parking, ingress and egress as set
forth in the CC&Rs.
ARTICLE IV
RENT
4.01 Annual Fixed Rent.
A)
Beginning on the Rent Commencement Date, Tenant shall pay to Landlord during the
Lease Term Annual Fixed Rent in the amount of Six Hundred Forty-Four
Thousand Four Hundred Twenty-Four Dollars ($644,424,000) The Annual Fixed Rent shall be payable in advance in
twelve (12) equal monthly
installments. The Annual Fixed Rent shall be subject to adjustment
every five (5) years after the Initial Rent
Due Date as set forth in Section 4.01 (B) below.
B) The Annual Fixed Rent shall apply from the Rent Commencement Date through the end of
the fifth (5th) Lease Year of the Term. The Annual Fixed Rent shall be increased 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 an
amount of Fifty-Seven Thousand Five Hundred Thirty-Eight
Dollars ($57,538) greater than the Annual Fixed
Rent payable immediately before the Adjustment date in question.
4.02 Percentage Rent.
In addition to the payment of Annual Fixed Rent, Tenant shall pay to Landlord for each Lease
Year during the Term of this Lease, as Percentage Rent a sum equal to
the amount by which eight percent (8%) of the Gross Sales for such Lease Year exceeds the Annual Fixed 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. For the purpose of computing the Annual Percentage for the first Lease Year,
the Gross
4
sales and the annual fixed rate percentage for the partial calendar month, if any, preceding
the first Lease Year shall be includable in the Annual Fixed Rate and
Gross Sales for the first
Lease Year.
Gross Sales shall mean all box office receipts, and receipts from sales of goods, merchandise,
beverages, food, vending machines and video games. Gross Sales shall exclude credits and refunds
made with respect to admissions or other sales; all federal, state, county and city admission
taxes, sales taxes and other similar taxes now or hereafter imposed whether such taxes are
collected from customers separately from the selling price of admission tickets or absorbed
therein, and actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or Pass Admissions including EBF charges on Pass Admissions. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental of
vending machines, pay telephones or other amusement machines shall be deducted from Gross Sales.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar officer
of its Gross Sales within ninety (90) days after the close of each Lease Year and calculation of
Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with the delivery of
such statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period shall not
bind it as to the correctness of the statement or the payment. Landlord shall within three years
after the receipt of any such statement be entitled to an audit of such Gross Sales. Such audit
shall be limited to the determination of the Gross Sales as defined in this Lease and shall be
conducted during normal business hours at the principal place of business of Tenant. If it is
determined as a result of such audit that there has been a deficiency in the payment of Percentage
Rent, then such deficiency shall become immediately due any payable with interest at the annual
rate of eighteen (18%) percent from the date when said payment should have been made until paid.
Any information gained from such statements or inspection shall be confidential and shall not be
disclosed other than to carry out the purposes hereof.
4.03 Rent Payments.
Rent and other sums to be paid by Tenant shall be payable in lawful
money of the United States of America. All payments shall be made by Tenant to Landlord without
notice or demand.
4.04 Place for Payment of Rent.
The Annual Rent and any other charges required to be paid
by Tenant to Landlord shall be sent to Landlord at its principal place of business, or such other
address as Landlord may direct in writing.
4.05 Late Payment of Rent.
In the event that any monthly installment of rent is not paid
within ten (10) days after such payment is past due, Tenant shall pay Landlord interest on such
unpaid rent at the rate of ten (10%) per annum computed from the date such rent installment was due
until the date actually paid.
4.06 Additional rent.
Tenant shall pay as additional rent its pro-rata share of all Common
Area Expenses including Property Taxes and Insurance in accordance with the CC&Rs.
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 Leased 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
5
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 Landlords
predecessors in title or any other person occurring prior to the commencement of the Term. From and
after the Initial Rent Due Date, Tenant shall pay when due all impositions assessed, levied or
attributable to the Leased Premises and/or the Improvements on the Leased Premises. All Impositions
or installments thereof payable with respect to the tax year in which this Lease shall commence,
and all Impositions or installments thereof with respect to the tax year in which this Lease shall
terminate, shall be pro-rated on a daily basis; provided, however, that assessments or escape
assessments assessed as a result of this Lease and/or the construction of Tenant Improvements by
Tenant shall not be prorated and shall be paid solely by Tenant; and provided further that
assessments attributable to Tenant Improvements made in the final year of the Lease shall be paid
solely by Tenant if Tenant demolishes the Tenant Building.
B) In the event Tenant fails to pay such real property taxes as provided herein, Landlord may, but
shall not be required to, pay the same, and any amount so paid by Landlord shall immediately
thereafter become due to Landlord from Tenant as Additional Rent with interest thereon at the rate
of 18% per annum from the date of Landlords payment plus any fine, penalty, interest or cost which
is levied by the taxing authority for such late payment.
5.02
Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance,
succession, capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord,
nor shall any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a
tax shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy
or charge, measured or based, in whole or in part on 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 Landlords only income, as
the case may be.
5.03 Contest of Taxes.
Tenant at its sole cost and expense may by appropriate legal
proceedings conducted in good faith and with due diligence, contest the amount or validity or
application, in whole or in part, of any Imposition or lien therefor, or any other lien,
encumbrance or charge against the Premises arising from work done or materials provided to or for
Tenant. Tenant shall give Landlord reasonable notice of, and information pertaining to, such
contest and regular progress reports with respect thereto. Landlord shall cooperate with any
effort pursued by Tenant in accordance with this Section 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.03.
5.04
Utilities.
Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Leased Premises. Any
utility improvements
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presently serving the Leased Premises shall be maintained, repaired and replaced by Tenant, at
Tenants expense.
5.05 Personal Property Taxes.
During the term of this Lease, Tenant shall pay before delinquency
any and all personal property taxes levied or assessed against any personal property located upon
the Premises. If Tenant fails to timely pay such taxes and a lien is filed against the Premises,
Landlord may discharge such lien, if Tenant fails to discharge such lien within ten (10) days
following Tenants 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 Leased
Premises, Premises and the appurtenances thereto, including the sidewalks and alleyways adjacent
thereto, with limits of liability no less than Five Million Dollars ($5,000,000) per occurrence and
in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep
Tenants Building (excluding foundations, footings and underground improvements) as well as any and
all improvements on the Leased Premises and personal property insured in the name of Landlord and
Tenant against damage or destruction by fire and the perils commonly covered under the extended
coverage endorsement (with vandalism and malicious mischief coverage) including Builders Risk and
earthquake to the extent of not less than 100% of the full replacement cost thereof less any
deductible applicable to all of Tenants 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 Landlords consent, which consent is not to be unreasonably withheld or delayed. The
proceeds of such insurance in case of loss or damage shall be held in trust and applied on account
of the obligation of Tenant to repair and/or rebuild the Leased Premises pursuant to the Article
captioned Damage Clause to the extent that such proceeds are required for such purpose. The
insurance required to be carried by Tenant under this paragraph may be covered under a so-called
blanket policy covering other operations of Tenant and its affiliates. Upon written request,
Tenant shall name Landlord and any parties requested by Landlord and the holder of the first
mortgage on Tenants Building pursuant to a standard mortgage clause with respect to the foregoing
hazard insurance, provided such holder agrees with Tenant in writing to disburse such insurance
proceeds to Landlord for, and periodically during the course of, repair and restoration of Tenants
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.
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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 Landlords Acquisition of Insurance.
If Tenant at any time during the Term fails to
procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord shall
have the right to procure the same and to pay any and all premiums thereon, and any amounts paid by
Landlord in connection with the acquisition of insurance shall be immediately due and payable as
additional rent, and Tenant shall pay to Landlord upon demand the full amount so paid and expended
by Landlord. Any policies of insurance obtained by Landlord covering physical damage to the
Premises shall contain a waiver of subrogation against Tenant if and to the extent such waiver is
obtainable and if Tenant pays to Landlord on demand the additional costs, if any, incurred in
obtaining such waiver.
6.05 Insurance Money and Other Funds Held in Trust.
All insurance money or proceeds
received by the Tenant and/or Landlord shall be held in trust by Landlord and, except as provided
otherwise in Section 6.06, shall be applied as follows:
First, for the purpose of defraying the cost of repairing, restoring, replacing and/or rebuilding
any structure or improvement on or in the Premises as required as provided in Section 6.06 hereof;
and Second, if the damaged or destroyed structure or improvement is not repaired, restored,
replaced or rebuilt as hereinafter provided, said funds shall be disposed of as provided in Section
6.06. Any of said funds in the hands of the Tenant at the end of the Term hereof shall be disposed
of as set forth in Section 6.06 (A).
6.06 Application or Proceeds of Physical Damage Insurance.
In case of any insurance
policies as described in Section 6.02 (B) (Physical Property Damage Insurance) the application of
insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article XVI hereof and, in the event of any such repair, replacement, restoration or rebuilding,
the Tenant and Landlord shall apply the proceeds of the insurance collected to the cost of such
work upon certificate of satisfactory progress and/or completion in form satisfactory to Tenant and
Landlord by the licensed architect or engineer in charge of the work. Any amounts payable to
Tenant or any Affiliate of Tenant for work or services performed or materials provided as part of
any such repair, replacement, restoration or rebuilding shall not exceed competitive rates for such
services or materials and Tenant shall, upon request of Landlord, make available to Landlord and
its representatives all books and records of Tenant relating to such work, services and materials.
Upon completion of such repair, replacement, restoration or rebuilding in accordance with the
provisions of this Lease, and the full payment therefor (so no liens, encumbrances or claims with
respect thereto can be asserted against the Premises, this Lease, Landlord or Tenant), any
insurance proceeds received by the Tenant or Landlord with respect to the damage or destruction
involved, and not used, shall be and remain the property of Landlord.
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such insurance proceeds
or condemnation awards received and held by the Tenant and not used for repair, replacement or
reconstruction (Available Proceeds), shall be disposed as follows:
(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
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(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 partys 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 Tenants Building or land
or improvements adjoining the Premises owned or leased by Landlord shall (if it can be so written
and does not result in a material additional premium) include provisions denying to the insurer
subrogation rights against the other party and any fee or leasehold mortgage to the extent such
rights have been waived by the insured prior to the occurrence of damage or loss. If the waiver of
subrogation otherwise is not effective, each party covenants that it will obtain for the benefit of
the other party an express waiver of any right of subrogation which the insurer of such party may
acquire against the other party by virtue of the payment of any such loss covered by such
insurance. In the event either party is by law, statute, governmental regulation, economically
unleasable or other factor beyond such partys 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
the CC&Rs as well as 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 Landlords written approval shall be first obtained, which approval shall not be
unreasonably withheld.
B) Tenant shall at all times keep the Leased Premises, Premises or any part thereof, free and
clear of all liens and claims for labor or material and free and clear of all attachments,
executions and notices.
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(C) Upon termination of this Lease, Tenant may, at its option, remove any personal property
and trade fixtures including, but not limited to theatre seats, projection and sound equipment,
snack bar equipment and computers.
7.02 Repairs Maintenance.
Tenant shall, at its sole cost and expense, maintain and repair the Leased Premises and
Tenants Building and all improvements on the Leased Premises including all exterior lighting and
signs.
Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlords request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such payment has been made.
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.; all as amended, or any State of Nevada
or any other federal, state or local statute, law, ordinance, resolution, code, rule, regulation,
order or decree regulating, relating to, or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in
effect; (b) any substance, product, waste or other material of any nature whatsoever which may give
rise to liability under any of the above statutes or under any statutory or common law theory based
on negligence, trespass, intentional tort, nuisance or strict liability or under any reported
decisions of a state or federal court; (c) petroleum or crude oil, other than petroleum and
petroleum products contained within regularly operated motor vehicles; (d) asbestos; (e) subsurface
gas; (f) urea formaldehyde foam insulation; (g) poly chlorinated byphenyls (PCBs); and freon and
other chloroflurocarbons.
8.02 Tenants 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 Leased
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 Leased 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 Leased 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
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about the Premises which is through Tenants (or its agents, employees, contractors or
invitees) acts or omissions brought upon, stored, used, generated or released into the environment
by Tenant, its agents, employees, contractors or invitees (referred to as Tenants 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 Tenants
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 Tenants
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
Tenants 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 Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
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8.03 Remedial Work.
In the event any investigation or monitoring of site conditions or
any cleanup, containment, restoration, removal or other remedial work (Remedial Work) is required
(a) under any applicable federal, state or local law or regulation, (b) by any judicial, arbitral
or administrative order, (c) to comply with any agreements affecting the Premises or (d) to
maintain the Premises in a standard of environmental condition which presents no risk to safety or
health, prevents the release of any hazardous materials to adjacent property and otherwise is
consistent with the prudent ownership of property of the character of the Premises and/or Tenants
Building and if such Remedial Work is required as a direct result of Tenants Environmental Acts,
then Tenant at Tenants 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 Tenants Environmental Acts,
then, Landlord, at Landlords 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
partys 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 Landlords 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 Tenants invoice therefor, and if not timely paid by Landlord, in
additional to all other rights and remedies, Tenant shall have the right of offset against rent
which may become due. Neither party shall be obligated to perform Remedial Work under this Section
while it is contesting the application of any law, regulation or order, provided the other party is
not exposed to any additional liability, risk or damages. Obligations under this Section are
solely for the benefit of the parties, their successors, and assigns and any subtenants of this
Lease, and not for any other third parties.
8.04 Maintenance of Premises.
A) Tenant at its sole cost and expense shall keep and maintain the Leased 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 Leased Premises.
8.05 Landlords Responsibilities.
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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
Leased Premises or any other portion of the Premises by Landlord, its agents, employees,
contractors or invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Leased Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants use, handling, storage or disposal of Hazardous Materials.
8.06 Landlord Inspection.
Landlord and Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII
and if it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued
as of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenant Improvements.
(A) Tenant at its sole cost and expense shall complete all the required on-site and
off-site improvements, including all signs, required for the development of the Leased Premises.
In addition Tenant shall construct a motion picture theater building on the Premises containing
approximately fifty-seven thousand five hundred thirty-eight (57,538) square feet with fourteen
auditoriums.
(B) Landlord agrees to provide Tenant with an improvement allowance of up to a maximum of
Four Million Eight Hundred Ninety Thousand Seven Hundred Thirty Dollars ($4,890,730) $85 per square
foot-(Tenant Allowance). Tenant shall pay any difference between the total Tenant Building and
improvement cost less the Tenant Allowance. Landlord agrees that it shall pay to Tenant, or at
Tenants direction, to Tenants contractor, within fifteen (15) days following Landlords receipt
of conditional lien waivers
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signed by its contractor, in form reasonably sufficient to waive lien rights in Washoe County,
Nevada, an amount equal to the Tenant Allowance multiplied by the percentage of work completed as
of the date of the lien waivers, less any installments of Tenant Allowance already paid. If the
total contract for Tenants Work exceeds Tenants Allowance, Landlord shall only be required to pay
its pro-rata share which shall be the ratio of Tenants Allowance to the total of Tenants Work. If
Landlord disputes any portion of the request for payment by Tenant due to faulty or incomplete
work, then Landlord shall withhold a sum which, in Landlords opinion would be required to correct
or complete the disputed work. In this event, Landlord shall submit a written punch list to
Tenant. Anything above to the contrary notwithstanding, Landlord shall no obligation to pay any
portion of the construction allowance if Tenant is then in default of any of the terms and
provisions of this Lease.
9.02 Hold Harmless.
Except to the extent attributable to the intentional or negligent
acts or omissions of Landlord or Landlords agents, employees, contractors, tenants, or invitees,
Tenant shall indemnify, protect, defend and hold harmless Landlord and the Premises from and
against all claims and liabilities arising by virtue of or relating to construction of by Tenant of
Tenants Building or Improvements or repairs made at any time to the Premises including repairs,
restoration and rebuilding and all other activities of Tenant on or with respect to the Premises.
If Tenant is required to defend any action or proceeding pursuant to this Section to which action
or proceeding Landlord is made a party, Landlord shall also be entitled to appear, defend, or
otherwise take part in the matter involved, at its election, by counsel of its own choosing, and to
the extent Landlord is indemnified under this Section, Tenant shall bear the cost of Landlords
defense, including attorneys fees; provided, however, Tenant shall be liable for attorneys fees
only if single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and
Tenant without there arising an actual or potential conflict of interests.
9.03 Permits: Compliance With Codes.
All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all governmental
authorities having jurisdiction. Tenant shall cause all work on the Premises during the Term to be
performed in accordance with all applicable laws and all directions and regulations of all
governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership of Improvements.
A) During the Term of this Lease (including any renewals or extensions), the
Improvements erected, constructed or located within the Premises, including without limitation all
additions, alterations and improvements thereto or replacements thereof and all appurtenant
fixtures, machinery and equipment installed therein, shall be and remain the property of Tenant. At
the expiration or earlier termination of this Lease, the Improvements and all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein excluding moveable trade fixtures and personal property
of Tenant, shall become the property of Landlord, unless and to the extent Landlord elects to have
Tenant remove any of the foregoing pursuant to Section 9.04 (B).
B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord provided, Tenant replaces
all items removed with items of similar quality or better quality and the foregoing shall remain
the property of the Tenant at the expiration or earlier termination of the Lease. In addition,
Landlord shall have the right if Landlord so elects by giving written notice to Tenant of such
election at any time before ninety (90) days prior to the end of the Term (including any renewals
or extensions) hereof for Tenant to remove at Tenants sole cost any other Improvements and all
additions, alterations and improvements thereto or replacements thereof erected, constructed, or
installed on the Premises. The removal of any of the foregoing shall be completed within thirty
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(30) days following the end of the Term hereof (including any renewals thereof or any earlier
termination permitted by this Lease.
9.05 Control.
Notwithstanding anything to the contrary in this Lease, during the Term of
this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01 Landlords Indemnity.
Except to the extent attributable to the intentional and
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), directly or indirectly arising out of or attributable to (i) any intentional or
negligent act or omission of Tenant, its agents, employees, licensees, invitees or contractors on
the Leased Premises, occurring within the Leased Premises or (ii) arising from Tenants or its
employees use of the Leased Premises.
10.02 Tenants Indemnity.
Except to the extent attributable to the intentional and negligent
acts or omissions of Tenant and its agents, employees, tenants, licensees and contractors, Landlord
shall indemnify, pay and protect, defend and hold harmless (with counsel reasonably approved by
Tenant) and save Tenant (and its successors, assigns and subletees), and all of their directors,
officers, employees and agents, hereinafter referred to as Tenant Indemnities, from and against
any claims, demand, damages, injuries, costs, expenses, losses, liabilities, causes of action,
interest, fines, charges and penalties (including reasonable legal fees and expenses in enforcing
this indemnity and hold harmless), directly or indirectly arising out of or attributable to (i) any
intentional or negligent act or omission of Landlord, its agents, employees, licensees, invitees on
the Leased Premises or contractors, occurring within the Leased Premises, or (ii) arising from
Landlords use of the Leased Premises.
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 Landlords approval which shall not be unreasonably withheld and subject to the CC&Rs, provided
Tenant remains liable for all Tenant obligations under this Lease, and any sublease shall be
subject to all the provisions of this Lease and CC&Rs. Landlord shall be entitled to all rent from
any assignment or sublease in excess of the Annual Fixed Rent set forth in this Lease.
B) Any assignment of this Lease or any sublease of a portion or all of the Premises shall
be subject to the terms and conditions of this Lease.
C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without Landlords consent, assign this Lease (a) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (b) to Tenants Parent Corporation, or (e) to any corporation which
acquires 50% or more of the issued and outstanding voting stock (or such lesser percentage as shall
be sufficient to acquire voting control) of
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Tenant or of Tenants Parent Corporation, provided that such corporation duly and validly then
guarantees the performance of the obligations under this Lease.
11.02 Notice to Landlord.
Tenant shall give notice to Landlord in writing of any assignment of the
Lease ten (10) days prior to such event.
ARTICLE XII
MORTGAGE SUBORDINATION
12.01 Existing Mortgages.
If there is an existing mortgage or deed of trust (Mortgage)
lien affecting the interest of Landlord in the Premises or in any other part of the Leased
Premises, then Landlord shall obtain and shall deliver to Tenant within fifteen (15) days after the
Effective Date, a non-disturbance and attornment agreement in a form reasonably acceptable to such
lender, Landlord and Tenant, executed by the Mortgagee (as defined below), wherein the Mortgagee
shall agree to recognize the interest of Tenant and abide by the terms of this Lease in the event
of any judicial foreclosure, private sale or deed in lieu of foreclosure, including the right to
quiet enjoyment of the Premises, without any condition, limitation or restriction.
12.02 Future Mortgages
. The rights of Tenant under this Lease shall be, at the option of
Landlord, either subordinate or superior to any future mortgage on Landlords interest in the
Premises in favor of an institutional lender not affiliated with Landlord. Provided however, that
as a condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of
trust and their successors and assigns (the Mortgagee) shall agree to recognize the interest of
Tenant and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.
ARTICLE XIII
CONDEMNATION EMINENT DOMAIN
13.01 Definitions.
The following definitions apply in construing provisions of this Lease relating
to a taking of or damage to all or any part of the Leased Premises or Improvements or Parking or
any interest in them by eminent domain or inverse condemnation:
A) Taking means that taking or damaging, including severance damage, by eminent domain
or by inverse condemnation for any public or quasi-public use under any statute. The transfer of
title may be either a transfer resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation,
in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. The
Taking shall be considered to take place as of the date on which the right to compensation and
damages accrues under the law applicable to the Premises, unless the condemnor also takes actual
physical possession of the Premises or a part thereof, in which case the date of Taking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues or the date physical possession is taken by the condemnor.
B) Total Taking means the Taking of the fee title to the Leased 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 serving the Leased
Premises.
C) Partial Taking means any Taking (including any damaging) of a portion of the
Premises, or any Improvements thereon or parking serving the Leased Premises which is not a Total
Taking.
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D) Notice of Intended Taking means any notice or notification on which a reasonably
prudent man would rely and which he would interpret as expressing an existing intention of Taking
as distinguished from a mere preliminary inquiry or proposal. It includes, but is not limited to,
the service of a condemnation summons and complaint on a party to this Lease. The notice is
considered to have been received when a party to this Lease receives from the condemning agency or
entity a Notice of Intended Taking, in writing, containing a description or map of the Taking
reasonably defining the extent of the Taking.
E) Award means compensation paid for the Taking, whether pursuant to judgment or by
agreement or otherwise.
13.02 Notice to Other Party.
The party hereto receiving any notice of the kinds specified
below shall promptly give the other party notice of the receipt, contents, and date of the notice
received:
A) Notice of Intended Taking;
B) Service of any legal process relating to condemnation of the Premises or improvements;
C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or
D) Notice of intent or willingness to make or negotiate a private purchase, sale or
transfer in lieu of condemnation.
13.03 Total Taking Effect on Rent and Term.
On a Total Taking, Tenants obligation to
pay Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the date
of Taking, at which time this Lease shall terminate.
13.04 Distribution of Award for Taking.
On a Taking, all sums, including, but not limited
to, damages and interest awarded for the value of the real estate taken, shall be apportioned and
paid by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any for the Fair Market Value of all Land,
buildings and other improvements on the Leased Premises and all Severance Damages.
B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost
profits, relocation expenses and fixtures; and
C)
To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.
13.05 Partial Taking Rent Adjustments.
On a Partial Taking, the Lease shall remain in full
force and effect covering the remaining Premises, except that the total Rent as otherwise provided
herein shall be reduced in the same ratio as the percentage of the area of the Premises or the
parking taken bears to the total area of the Premises or the parking.
13.06 Partial Taking Option to Terminate.
Notwithstanding anything herein to the contrary,
in the event of a Partial Taking, if more than thirty-three percent (33%) of the Building or
thirty-three (33%) of the parking serving the Leased Premises is taken by condemnation or sold
under the threat of condemnation, then Tenant may terminate this Lease as of the date the
condemning authority takes title or possession, whichever
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occurs first, by delivering written notice to the other within ten (10) days after receipt of
written notice of such taking (or in the absence of such notice, within ten (10) days after the
condemning authority takes possession).
13.07 Separate Tenants Award.
In the event of a Taking, Tenant may make a separate claim with
respect to lost business, lost profits, goodwill, moving expenses, fixtures and relocation expenses
against the acquiring governmental Agency.
ARTICLE XIV
DEFAULT
14.01 Tenants Default.
The occurrence of any of the following shall constitute a default
or event of default by Tenant:
A) Failure to pay Annual Fixed Rent or any other monetary amount when due as provided
herein, if the failure continues for ten (10) days after first written notice has been given to
Tenant by Landlord;
B) Failure to perform any of Tenants non-monetary obligations under this Lease; provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure each
such default. If Tenant cannot reasonably cure such default within said thirty (30) day period,
Tenant shall not be in default of this Lease if Tenant commences to cure the breach within the
thirty (30) day period and diligently and in good faith continues to cure the breach.
14.02 Landlords 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. Landlord may re-enter the Premises, by legal
proceedings (or without legal proceedings if the Premises have been abandoned), and take possession
thereof, without thereby terminating this Lease, and thereupon Landlord may expel all persons and
remove all property therefrom, without becoming liable to prosecution therefor, and relet the
Premises or a portion or portions thereof, and receive the rent therefrom, applying the same first
to the payment of the reasonable expenses of such re-entry and the reasonable cost of such
reletting, and then to the payment of the Rent and other amounts for which Tenant is then in
default; the balance, if any, to be paid to Tenant, who, whether or not the Premises are relet,
shall remain liable for any deficiency. It is agreed that the commencement and prosecution of any
action by Landlord in forcible entry and detainer, ejectment, or otherwise, or the appointment of a
receiver, or any execution of any decree obtained in any action to recover possession of the
Premises, or any re-entry, shall not be construed as an election to terminate this Lease unless
Landlord shall, in writing, expressly exercise its election to declare the Lease Term hereunder
ended and to terminate this Lease, and unless this Lease be expressly terminated, such re-entry or
entry by Landlord, whether had or taken under summary proceedings or otherwise, shall not be deemed
to have absolved or discharged Tenant from any of its obligations and liabilities for the remainder
of the Lease Term. Notwithstanding anything to the contrary or other provisions of this Section
14.02(B), Tenant shall have the right to sublet the Premises, assign its interest in the Lease, or
both, subject to Landlords prior right, during any continuance of Tenants default, to relet the
Premises or a portion or portions thereof.
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C)
Termination of Lease and Lessees 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 Tenants failure to perform his obligations under the Lease or which, in the
ordinary course of things, would be likely to result therefrom.
D) Definitions. As used herein, the following phrases shall be interpreted as follows:
(1) The worth, at the time of the award, as used in subsections 14.02(C)(1) and (2)
above, is to be computed by allowing interest at the maximum lawful rate. The worth, at the time
of the award, as referred to in subsection 14.02(C)(3) above, is to be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award,
plus one percent (1%).
(2) As used herein, the term time of award shall mean either the date upon which Tenant
pays to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of entry
of any determination, order, or judgment of any court or other legally constituted body determining
the amount recoverable, whichever first occurs.
E) Surrender. Promptly after notice of termination, Tenant shall surrender and vacate the Premises
and all improvements in broom-clean condition, and Landlord may re-enter and take possession of the
Premises and all remaining improvements and eject all parties in possession or eject some and not
others, or eject none. Termination under subsection 14.02(C) shall not relieve Tenant from the
payment of any sum due to Landlord or from any claim for damages previously accrued or then
accruing against Tenant.
F) Appointment of Receiver. If Tenant defaults under Section 14.02(C), Landlord shall have
the right to have a receiver appointed to collect rent from any subtenants. Neither the filing of a
petition for the appointment of a receiver nor the appointment itself shall constitute an election
by Landlord to terminate this Lease.
G) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in
default under Section 14.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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 ten percent (10%) per annum computed from the date of such expenditure until the
date of reimbursement by Tenant.
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14.03 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any amount due
from Landlord against the next Rent payment due under this Lease.
14.04 Waiver of Redemption.
Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being dispossessed or removed
from the Premises upon the termination of this Lease because of default by Tenant hereunder.
14.05 Dispute Resolution.
Landlord and Tenant desire by provisions of this Section 14.05
to establish procedures to facilitate the informal and inexpensive resolution of any dispute
arising out of this Lease by mutual cooperation and without resort to litigation. To accomplish
this objective, Landlord and Tenant agree to follow the procedures set forth below if and when a
dispute arises between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written
description of the alleged breach by the other party. This description shall explain the nature of
the complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act. The party receiving the letter of complaint must respond in writing within ten (10) days
with an explanation, including references to the relevant parts of the Lease and a response to the
proposed solution. Within ten (10) days of receipt of this response, the parties must meet and
discuss options for resolving the dispute. The complaining party must initiate the scheduling of
the resolution meeting.
B) Mediation. A settlement conference shall be held within thirty (30) days of the
unsuccessful resolution meeting or as soon as practical thereafter.
C) Arbitration. With respect to disputes which the parties have been unable to resolve
informally or by mediation, the parties agree to submit the dispute for final and binding
arbitration if the dispute has not otherwise been settled. The parties agree that the arbitration
must be initiated within one (1) year after the date of the written description of the alleged
breach and that the failure to initiate arbitration within the one (1) year period constitutes an
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated for the
purposes of this section by demand therefor being sent by certified mail to the other party, which
notice shall contain a description of the dispute, the amount involved and the remedies sought.
The parties shall have the right to representation by counsel throughout the arbitration
proceedings. Arbitration shall be conducted under the Commercial Arbitration Rules of the
American Arbitration Association.
14.06 Attorneys Fees.
Should any action or proceeding, be commenced between the parties to
this Lease concerning said Premises, this Lease, or the rights and duties of either in relation
thereto, the party, Landlord, or Tenant, prevailing in such action or proceeding shall be entitled,
in addition to such other relief as
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may be granted in the action or proceeding, to a reasonable sum as and for its attorneys
fees therein which shall be determined by the
arbitrator(s) hearing such action or proceeding.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES
15.01
Landlords 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 Landlords 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 Landlords 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 Leased Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills
as they come due or that its liabilities exceed its assets
F) The title to the Leased Premises is vested in Landlord, subject to no defects or
encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord prior to the
Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises
which are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as
defined herein), or (ii) which are inconsistent with the obligations of Landlord hereunder, and
Landlord shall, at or prior to the commencement of the Term, cause the Premises to be free of all
liens and encumbrances. Title to the Premises shall be free of all Objected Exceptions.
15.02 Tenants Representations and Warranties.
Tenant represents and warrants:
A)
Tenant is a Delaware corporation in good standing.
B) The persons executing this Lease in behalf of Tenant are authorized to execute the same
on behalf of Tenant and Tenants obligations under this Lease are legally binding, do not require
the consent of any other parties and do not violate the provisions of any agreement to which Tenant
is a party.
C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
ARTICLE XVI
DAMAGE OR DESTRUCTION
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16.01 Repairs. Alterations and Further Improvements.
In the event of damage to or destruction of the Tenants Building or any Improvements on or to
the Premises whether or not covered by the insurance described in Article 6: Tenant shall effect,
at Tenants sole cost and Landlord and Tenant agree that the funds derived from insurance acquired
pursuant to Article 6 shall be made available to effect, such repair and reconstruction of the
structure or improvement so damaged or destroyed to substantially its condition prior to said
damage or destruction with such alterations thereto as Tenant shall reasonably determine prudent or
valuable under the circumstances, including any changes required to comply with applicable law,
with the then prevailing construction practices applicable to the Premises. Tenant shall be
responsible for all costs, in excess of Insurance proceeds available. All such work shall be carried
on in accordance with Drawings prepared by a licensed architect or architects approved by Landlord
(acting reasonably) if such an architect is reasonably required, given the scope and nature of the
work. In disbursing insurance proceeds the Tenant and Landlord may rely upon and accept the
certified determinations of such architect with respect to estimated costs, awarding of contracts,
sufficiency of bonds, progress of construction, interpretation of plans and specifications,
compliance with same, and completion of construction. No extras or changes in Drawings shall be
made by Tenant without first giving written notice of such changes to Landlord and obtaining
Landlords approval thereof (which approval shall not be unreasonably withheld or delayed).
If such reconstruction or rebuilding cannot be made under then existing laws, ordinances, statutes
or regulations of any governmental authority applicable thereto, the Lease shall Terminate and any
insurance proceeds shall become the property of Landlord.
16.02
Prompt Repair.
If Tenant, pursuant to the terms hereof, is obligated or elects to
repair, replace, reconstruct or rebuild any structures, improvements or other property as
hereinabove provided, the same shall be effected at Tenants cost and expense (which may be paid
from insurance proceeds available as above provided and subject to the provisions of subparagraph
(B) of Section 16.01), and Tenant shall diligently commence
and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts, with
contractors and suppliers.
16.03 Rent Adjustment.
This Lease and the Term shall not terminate or be terminated because
of damage to or destruction of any structure or improvement on or in the Premises except under and
in accordance with the provisions hereinabove contained. If such damage or destruction occurs and
renders all or a portion of the Improvements on the Premises untenantable, Rent shall thereafter
not abate but continue for as long as and to the extent such Improvements are untenantable.
16.04 Damage During Last Two (2) Years of Term.
If there occurs during the last two (2)
years of the Initial Term or at any time during a Renewal Period damage or destruction to any
improvement on or in the Premises and the costs of repairing, restoring, replacing or rebuilding
the same exceed Five Thousand Dollars ($500,000), then Tenant may elect to terminate the Term and,
in such event, Tenant shall give notice to Landlord of its election within sixty (60) days after
its determination of the amount of damage, and the Term shall thereupon terminate as of the date of
such notice and all insurance proceeds shall become the property of Landlord.
ARTICLE XVII
MISCELLANEOUS
17.01 Limitation on Liability.
The liability of Landlord hereunder or in connection with the
Premises or Leased Premises shall be limited to its interest in the Leased Premises and in no event
shall any other assets of Landlord be subject to any claim arising out of or in connection with the
Leased Premises.
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17.02 Brokers.
Landlord and Tenant each represent to the other that neither has any
obligation to any broker or finder in connection with this transaction, and that no fee or
commission is due any broker, finder, or similar person in connection herewith. Landlord and Tenant
each indemnifies the other and agrees to hold the other harmless from and against any and all
claims, demands, liabilities, lawsuits, costs, and expenses (including reasonable attorneys fees)
for any fee or commission due to any other broker, finder, or similar person in connection with
this transaction and arising out of the act of the indemnifying party.
17.03 Modification
. No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless the same is in writing and signed by the party against which the enforcement
of such modification, waiver, amendment, discharge, or change is or may be sought.
17.04 Severability.
In the event any term, covenant, condition, provision, or agreement
contained herein is held to be invalid, void, or otherwise unenforceable, by any court of competent
jurisdiction, such holding shall in no way affect the validity or enforceability of any other term,
covenant, condition, provision, or agreement contained herein.
17.05 Governing Law.
This Lease and the obligations of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of Nevada and each
provision of this Lease shall be valid and enforceable to the fullest extent permitted by Law.
17.06 Terminology.
All personal pronouns used in this Lease, whether used in the masculine,
feminine, or neuter gender, shall include all other genders; the singular shall include the plural
and vice versa. Business Day means other than a Saturday, Sunday, or holiday. In the event that
the time for performance of an act under this Lease falls on a Saturday, Sunday, or holiday, the
date for performance of such act shall be extended to the next Business Day.
17.07 Counterparts.
This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original agreement, and all of which shall constitute one agreement by
each of the parties hereto.
17.08 Binding Effect.
Except as otherwise herein provided, this Lease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.
17.09 Captions.
Article and section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend, or describe the scope
of this Lease or any provisions hereof. All reference to section numbers herein shall mean the
sections of this Lease.
17.10 Notices to Landlord and Tenant.
A) Except as otherwise in this Lease provided, a bill, demand, statement, consent, notice
or communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 17.11 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the identity and
address of Tenants Leasehold Mortgagee, Landlord shall give such party any notice served upon
Tenant hereunder by certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing
and delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully prepaid), addressed to Landlord to the addresses set forth in
Section 17.11 below or at such other address(es) as Landlord shall designate by notice given as
herein provided. If Tenant is notified of
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the identity and address of Landlords mortgagee or beneficiary under a deed of trust, or
ground or underlying lessor, Tenant shall give such party notice of any default by Landlord
hereunder by certified or private express mail carrier.
C) The time of the rendition of such bills or statements and of the giving of such consents,
notices, demands, requests or communications (collectively notice) by Tenant or Landlord shall be
deemed to be the earlier of (i) the date received by Tenant with respect to a notice to Tenant, and
the date received by Landlord with respect to a notice to Landlord (ii) if the notice is sent by
certified mail, five (5) days after the same is mailed, or (iii) if the notice is sent by private
overnight courier (e.g., Federal Express or similar courier), one (1) day after the same is
delivered to or picked up by such courier. Rejection or refusal to accept a notice, request,
demand, or the inability to deliver same because of a changed address of which no notice was given
shall be deemed to be a receipt of the notice, request or demand sent.
17.11 Addresses for Notices to Landlord and Tenant
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
150 Golden Gate Ave.
San Francisco, CA 94102
Attn.: Real Estate Department
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To Tenant:
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Century Theatres, Inc.
150 Golden Gate Avenue
San Francisco, CA 94102
Attention: Legal Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
17.12 Entire Agreement.
This Lease and the exhibits attached set forth the entire
agreement between the parties. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever as to any matter. Any prior agreements, conversations, or
writings are merged herein, superseded hereby, and extinguished.
17.13
Sale or Transfer of Premises.
Landlord shall promptly notify Tenant in writing of any
sale or transfer of the Premises or any assignment of Landlords 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 Landlords interest in this Lease or any change in, or transfer of, title
in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of Landlord
or by operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been notified in writing
of such transfer, assignment, or change in title, and given satisfactory proof thereof, and the
withholding of rent or other charges payable by Tenant to Landlord hereunder, in the meantime shall
not be deemed a default upon the part of Tenant. Landlord may assign this Lease and convey its
title to the Premises, subject to this Lease, at any time. In the event of such assignment of this
Lease, Landlord shall have no further obligations under this Lease, except for liabilities which
shall have accrued prior to the date of such assignment and transfer and that the assignee assumes
in writing Landlords obligations hereunder accruing on and after the effective date of the
assignment.
17.14 Force Majeure.
In the event that Tenant shall be delayed or hindered in or prevented
form the performance of any act other than Tenants obligation to make payments of rent, and other
charges
24
required hereunder, by reason of strikes, lockouts, unavailability of materials, failure of
power, restrictive governmental laws or regulations, riots, insurrections, the default of Landlord,
war, or other reason beyond its control, then performance of such act shall be excused for the
period of the delay, and the period for the performance of such act shall be extended for a period
equivalent to the period of such delay. Notwithstanding the foregoing, lack of funds shall not be
deemed to be a cause beyond the control of Tenant.
17.15
Waiver
.
No term, covenant, or condition of this Lease can be waived except
in writing, signed by the party making the waiver, Landlord or Tenant, as the case may be. No
waiver of any default hereunder shall be implied from any omission by either party to take any
action on account of such default if such default persists or is repeated, and no express waiver
shall affect any default other than the default specified in the express waiver, and that only for
the time and to the extent therein stated. The acceptance by Landlord of Rent or partial Rent with
knowledge of the breach of any of the covenants of this Lease by Tenant shall not be deemed a
waiver of any such breach. One or more waivers of any breach of any covenant, term, or condition of
this Lease shall not be construed as a waiver of any subsequent breach of the same covenant, term,
or condition. The consent or approval by either party shall not be deemed to waive or render
unnecessary that partys consent to or approval of any subsequent similar act.
17.16 Estoppel Certificate.
Either party hereto shall, within twenty (20) days notice from
the other party (referred to as the Requesting Party), execute and deliver to the Requesting
Party, in recordable form, a certificate stating that this Lease is unmodified and in full force
and effect, or in full force and effect as modified, and stating the modifications. The certificate
also shall state the amount of current monthly rent, the dates to which the rent has been paid in
advance, the amount of prepaid rent, and any other information with respect to this Lease
reasonably requested by the Requesting Party. Failure to deliver the certificate within the twenty
(20) days shall be conclusive upon the party failing to deliver the certificate for the benefit of
the party requesting the certificate and any successor to the party requesting the certificate,
that this Lease is in full force and effect, and has not been modified except as may be represented
by the party requesting the certificate, and that rent and other charges have not been paid for any
period after date of the notice requesting the certificate.
17.17 Number and Gender.
Whenever the context requires the singular number, it shall include
the plural, the plural the singular, and the use of any gender shall include all genders.
17.18 No Holding Over.
Tenant shall have no right to holdover after the end of the Term.
Should Tenant or any Leasehold Mortgagee succeeding to the interest of Tenant hold over in
possession after the expiration date, such holding over shall not be deemed to extend the Lease or
renew this Lease; and Tenant shall pay a pro-rated daily amount equal to one hundred twenty percent
(120%) of the Annual Rent in effect immediately preceding the expiration date until Tenant vacates
the Premises.
17.19 Mechanics Liens.
Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed against the Premises or the Leased Premises in connection with Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail to
so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics liens
and charge all costs thereof, including without limitation, reasonable attorneys fees, to Tenant
as additional rent plus interest at 18%.
17.20 Relationship of Parties.
Nothing contained in this Lease shall be construed to
create the relationship of principal and agent, partnership, joint venture or any other
relationship between the parties hereto other than the relationship of Landlord and Tenant. Nothing
contained herein shall in any way impose any liability upon the stockholders, officers or directors
of Landlord or stockholders, officers, directors or trustees of Tenant should such parties be
corporate entities.
25
17.21 Time of the Essence.
Time is of the essence with respect to Tenants payment of
rent and other monetary obligations to Landlord under this Lease.
17.22 Facsimile Copies.
Tenant and Landlord (i) have each agreed to permit the use, from
time to time and where appropriate, of telecopied signatures in order to expedite the transaction
contemplated by this Lease, (ii) each intend to be bound by its respective telecopied signature,
(iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
17.23 Anti-Merger.
The voluntary or otherwise surrender of this Lease by Tenant, or a
mutual cancellation of this Lease shall not work a merger but shall at the option of Landlord
either:
A)
Terminate any existing subleases or subtenancies; or
B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
Executed as of the date first written above.
TENANT:
CENTURY
THEATRES, INC.
a Delaware Corporation
Print Name: Joseph Syufy
Title: SR Ex V.P.
LANDLORD:
SYUFY ENTERPRISES
a California Limited Partnership
Print Name: Raymond W. Syufy
Title: GNL PTR
26
EXHIBIT 10.27(a)
CENTURY STADIUM PROMENADE LEASE
BY AND BETWEEN
SYUFY ENTERPRISES
CALIFORNIA LIMITED PARTNERSHIP
LANDLORD
AND
CENTURY THEATRES, INC.
DELAWARE CORPORATION
TENANT
CENTURY STADIUM PROMENADE LEASE
THIS LEASE AGREEMENT (referred to herein as the Lease) is made this 1st day of
October, 1996, by and between Syufy Enterprises, a California Limited Partnership, (Landlord),
and Century Theatres, Inc., a Delaware Corporation (Tenant).
ARTICLE I
EXHIBITS AND BASIC LEASE TERMS
Section 1.01. Attachments to Lease and Exhibits:
EXHIBIT A Site Plan for Entire Premises commonly knows as the Century Stadium Promenade
showing the location of the Tenants Building outlined in red.
EXHIBIT B Tenant Sign Criteria
Section 1.02. Basic Lease Terms and Definitions.
1.02.1. Entire Premises shall mean Century Stadium Promenade located in the City of
Orange, State of California.
1.02.2. Commencement date shall mean the date which is the earlier of (i) nine months after
Tenant has received a building permit for the construction of Tenants Building or (ii) the date
on which Tenant opens for business in the Premises.
1.02.3.
Term shall mean Initial Term of twenty (20) years
with two five (5) year options and one four (4) year option.
1.02.4. Tenants Trade Name. Century Theatres.
1.02.5. Floor Area. Approximately 99,870 square feet.
1.02.6. Minimum Rent.
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Dollars/ Years
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Dollars/Month
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Dollars/sq. ft.
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Years
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$2,197,140.00
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$183,095.00
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$22.00
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1-5
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$2,346,945.00
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$195,578.75
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$23.50
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6-10
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$2,496,750.00
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$208,062.50
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$25.00
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11-15
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$2,646,555.00
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$220,546.25
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$26.50
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16-20
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$2,796,360.00
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$233,030.00
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$28.00
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21-25
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$2,946,165.00
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$245,513.75
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$29.50
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26-30
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$3,095,970.00
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$257,997.50
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$31.00
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31-34
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1.02.7.
Percentage Rate. 8%
1.02.8. Premises. Century Stadium Theatre Parcel.
1.02.9. Use of Premises. A Motion Picture Theatre.
1.02.10. Contribution to Grand Opening Fund. $1,000.00
1.02.11. Security Deposit. None.
ARTICLE II
LEASED PREMISES
Section 2.01. Leased Premises.
Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, those certain
premises and improvements located in the Entire Premises, consisting of approximately 99,870 square
feet of gross leasable area, (the Premises or Leased Premises). Area means all areas
designated by Landlord for the exclusive use of Tenant. The boundaries and location of the Premises
arc depicted on the site plan of the Entire Premises, which is attached hereto as Exhibit A (the
Site Plan) and shall be deemed to include the entryway to such building. The site plan and shape
and dimensions of the area of the Premises are depicted on Exhibit A.
1
Section
2.02. Reservations.
Landlord reserves the right at any time to make alterations or additions and to construct
other buildings, improvements, alterations or additions in the Entire Premises. These alterations
and additions however shall not materially impede reasonable access to the Premises. Easements for
light and air are not included in the Premises. Landlord further reserves the right to go on the
roof of the Premises for the purpose of effecting certain items of repair and maintenance as
provided in this Lease.
Section 2.03. Right to Relocate.
Landlord reserves the right at any time to make changes to the various buildings, parking,
and other common areas as shown on the Site Plan.
Section 2.04. Conditions of Record.
Landlords Title is subject to: (a) the effect of any covenants, conditions, restrictions,
easements, development agreements, mortgages or deeds of trust, ground leases, rights of way, and
other matters or documents of record now or hereafter recorded against Landlords title, (b) the
effects of any zoning laws of the city, county and state where the Entire Premises is situated,
and (c) general and special taxes and assessments not delinquent. Tenant agrees (I) that as to its
leasehold estate it, and all persons in possession or holding under it, will conform to and will
not violate said matters of record, and (ii) that this Lease is and shall be subordinate to said
matters of record and any amendments or modifications thereto.
ARTICLE III
TERM
Section 3.01. Commencement of Term.
This Lease shall be effective upon mutual execution. The term of this Lease the (Term)
shall commence as specified in Section 1.02.2 and shall continue for the term specified in Section
1.02.3 unless sooner terminated in accordance with the provisions of this Lease. The term shall
commence from the first day of the month following the Rent Commencement Date. If the Term
commences prior to Tenants obligation to pay rent, Tenant shall be required to pay all sums set
forth in Section 12.05 of this Lease on the day the Term commences. Upon request of Landlord,
Tenant shall execute a written confirmation of the commencement of the Term and the Rent
Commencement Date upon a form to be supplied by Landlord.
Section 3.02. Extension of Term.
Tenant
shall have the right to extend the term of this Lease for two (2)
additional five (5) year period(s)
and one (1) additional four (4) year period under the same terms and conditions as the original Lease,
except for
the amount of Minimum Rent. It is understood that this option is unique to Century Theatres, Inc.,
and upon any assignment or subletting, without Landlords consent, the option shall be rendered
null and void. If Tenant is in default on the date of giving the option notice, the option notice
shall be totally ineffective, or if Tenant is in default on the date the extended term is to
commence, the extended term shall not commence and this Lease shall expire at the end of the
initial term.
In order to exercise such option to renew or extend this Lease, Tenant shall give to Landlord
notice, in writing, of its intention to do so at least one hundred eight (180) days prior to then
applicable expiration date of this Lease, and if Tenant shall fail to timely give such notice, all
rights and privileges as granted to Tenant to renew or extend this Lease shall thereupon be null
and void.
ARTICLE IV
RENT
Section 4.01. Rent Commencement Date.
Tenants obligation to pay Minimum Rent and Percentage Rent under this Lease shall commence
on the first to occur of (the Rent Commencement Date): (a) the date Tenant first opens for
business to the public in the Premises; or (b) nine months after Tenant has obtained a building
permit for the construction of Tenants Building. If the Rent Commencement Date does not occur on
the first day of the month, Tenant shall pay rent for the fractional month on a per diem basis
(calculated on the basis of a thirty day month) until the first day of the month next succeeding
the date Tenants obligation to pay rent commences. The Minimum Rent shall be paid thereafter in
equal monthly installments on or before the first day of each month in advance without demand or
offset. The Minimum Rent to be paid by Tenant during the Term of this Lease is set forth in
Section 1.02.6
Section 4.02. Percentage Rent
In addition to the Minimum Rent and all other sums designated in this Lease to be paid as
Rent, Tenant shall pay Landlord Percentage Rent for each fiscal year during the Term, or
fractional period thereof. In the event that Tenant commences business in the Premises prior to
October 1, but after the preceding September 1, the period prior to October 1 and after January 1
shall be added to and included in the first full fiscal year of the Term, and Tenants Minimum
Rent for that month or partial month shall be included in the Minimum Rent figure for such full
fiscal year.
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If Tenant actually commenced business in the Premises prior to October 1, for more than one
month, then Percentage Rent shall be computed based on such partial year. If the Term expires on a
day other than September 30, then Tenants Percentage Rent shall be computed based on such partial
fiscal year.
Percentage Rent shall be calculated as follows:
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1.
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Tenants annual Minimum Rent divided by the Percentage Rent Rate (specified
in Section 1,02.7) equals Percentage Rent Break Point.
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2.
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If Tenants Gross Receipts for the calendar year exceed the Percentage Rent
Break Point, Tenant shall pay the Percentage Rent Rate of Tenants Gross Receipts less
Minimum Rent actually paid.
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3.
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Example of the foregoing:
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Tenants annual Minimum Rent
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=
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$120,000.00
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Percentage Rent Rate
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=
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6%
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Percentage Rent Break Point
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=
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$2,000,000.00
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($120,000/6%)
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Gross Receipts
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=
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$2,400,000.00
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$2,400,000 x 6%
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=
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$144,000.00
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Less Minimum Rent Paid
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(120,000.00)
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Tenant owes as Percentage Rent
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$24,000.00
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Within sixty (60) days following the end of each calendar year, Tenant shall deliver to Landlord
the written statement required by Section 6.02 of this Lease showing Tenants Gross Receipts for
the preceding calendar year. Tenant shall pay to Landlord at the time of delivery of the written
statement the percentage specified in Section 1.02.7 of the amount by which such Gross Receipts
exceeded the Percentage Rent Break Point, less any Minimum Rent previously paid with respect to
that calendar year
Section 4.03. Gross Receipts Defined.
Gross Receipts means (a) the entire amount charged for the full price at the time of the
initial transaction for all merchandise sold or delivered or services rendered by Tenant whether
for cash or credit; (b) the gross amount received or charged by Tenant for merchandise sold or
services rendered pursuant to orders received by telephone, mail, house to house, or by other
canvassing, and attributable to the Premises whether or not filled elsewhere; and (c) all gross
income of Tenant from any operation in, at, from or through the use of the Premises. Excluded from
the calculation of Gross Receipts are (I) cash refunded or credit allowed on merchandise
returned by customers; (ii) sales taxes, excise taxes, other similar taxes; (iii) proceeds from
sales of fixtures, equipment, or property which are not stock-in-trade; (iv) sales to employees
representing discounts or compensation benefits and for which Tenant realizes no monetary profit
in an amount not to exceed two percent (2%) of Gross Receipts and (v) EBF passes..
Section 4.04. Additional Rental.
All other sums required to be paid by Tenant to Landlord pursuant to this lease in addition
to Minimum Rent and Percentage Rent, whether or not designated as rent and additional rent, unless
otherwise specified. Rent for any period which is less than one (1) month shall be a prorated
portion of the monthly rent installment based upon a thirty (30) day month.
Section 4.05. Late Payment.
If the Tenant fails to pay the Minimum Rent or any installment thereof or Percentage Rent, if
any, or any other additional rent due under this Lease within five (5) days after such Rent has
become due, both Tenant and Landlord agree that Landlord will incur additional expenses consisting
of extra collection efforts, handling costs and potential impairment of credit on loans which may
be secured by this Lease. Both parties agree that should Tenant fail to pay its Rent, Landlord is
entitled to compensation for detriment caused by the failure, but that it is extremely difficult
and impractical to ascertain the extent of the detriment. The parties therefore agree that should
Tenant fail to pay any Rent due hereunder within five (5) days after the same becomes due, Landlord
shall be entitled to recover from Tenant five percent (5%) of the amount past due as liquidated
damages. Such past due amounts shall also bear interest at the maximum rate allowed by law from the
date due until paid. Tenant further agrees to pay Landlord any costs incurred by Landlord in the
collection of such past due Rent including, but not limited to, fees of an attorney and/or
collection agency. Nothing herein contained shall limit any other remedy of Landlord under this
Lease. Landlord shall also have the right to require Tenant to pay any past due sums by cashiers
check or money order.
Further, should Tenant fail to pay Rent or any other charges due hereunder in the time
periods set forth herein, two (2) or more times during any calendar year of the Term, Landlord may
require Tenant to thereafter pay Rent in quarterly installments in advance for the balance of the
Term.
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ARTICLE V
CONSTRUCTION OF LEASED PREMISES
Section 5.01. Landlords and Tenants Obligations.
(a) Landlords Obligation:
Subject to delay as provided in this Lease, Landlord, at its own cost and expense,
shall develop the building pad in accordance with plans and specifications prepared by Landlord or
Landlords architect, including the design and construction of all utility lines to the boundary of
the Premises in adequate size to service Tenants requirements.
(b) Tenants Obligation:
Tenant shall construct the theatre building and improvements in accordance with plans and
specifications prepared by Tenant. Any work to be performed by Tenant and any permits, fees or
applications for such work shall be performed or obtained by Tenant at its sole cost and expense
(collectively, Tenants Work). Tenant shall pay for any equipment or work to be installed in or
constructed on the Premises by Landlord other than Landlords Work prior to commencement of
construction or installation of such additional items.
(c) Tenants Allowance.
Landlord agrees to provide Tenant with an improvement allowance of up to a maximum of Eight
Million Four hundred Eighty Eight thousand Nine Hundred Fifty ($8,488,950) dollars ($85 per square
foot) (Tenant Allowance). Tenant shall pay any difference between the total Tenant building and
improvement cost less the Tenant Allowance. Landlord agrees that it shall pay to Tenant, or at
Tenants direction, to Tenants contractor, within fifteen (15) days following Landlords receipt
of conditional lien waivers signed by its contractor, in form reasonably sufficient to waive lien
rights in Orange County, California, an amount equal to the Tenant Allowance multiplied by the
percentage of work completed as of the date of the lien waivers, less any installments of Tenant
Allowance already paid. If the total contract for Tenants Work exceeds Tenants Allowance,
Landlord shall only be required to pay its pro-rata share which shall be the ratio of Tenants
Allowance to the total of Tenants Work. if Landlord disputes any portion of the request for
payment by Tenant due to faulty or incomplete work, then Landlord shall withhold a sum which, in
Landlords opinion would be required to correct or complete the disputed work. In this event,
Landlord shall submit a written punch list to Tenant.
Anything above to the contrary notwithstanding, Landlord shall have no obligation to pay any
portion of the construction allowance if Tenant is then in default of any of the terms and
provisions of this Lease.
Section 5.02. Possession.
Upon substantial completion by Landlord of Landlords Work on the Premises, Landlord shall deliver
the Premises to Tenant. Tenant waives any right or claim against the Landlord for any cause
directly or indirectly, arising out of the condition of the Premises, appurtenances thereto, the
improvements thereon and the equipment thereof. Tenant shall save and hold harmless the Landlord
from liability as provided in this Lease. Landlord shall not be liable for any latent or patent
defects therein.
Section 5.03. Commencement of Construction and Completion.
Prior to commencement of Tenants Work, Tenant shall notify Landlord in writing of the date
Tenant will commence construction. Tenants contractor shall commence the construction of Tenants
Work promptly upon possession of the Premises by Tenant and shall diligently pursue such
construction to completion. Tenant shall record within ten (10) days of completion of Tenants
Work, a valid Notice of Completion and thereafter deliver to Landlord prior to opening for business
a certified copy of such Notice along with final lien releases for all contractors, subcontractors,
materialmen and suppliers covering all improvements and work performed by Tenant and/or Tenants
contractor on the Premises.
Section
5.04. Delay in Possession
Landlord shall not be liable for failure to deliver possession of the Premises to
Tenant. If Landlord fails to deliver possession of the Premises on or before the expiration of two
(2) year from the date of lease execution (subject to extension for any force majeure or inability
to obtain financing), either party may terminate this Lease by giving thirty (30) days written
notice to the other party. Thereafter, neither party shall have any further liability to the other
in connection with this Lease.
ARTICLE VI
RECORDS AND BOOKS OF ACCOUNT
Section 6.01. Tenants Records.
Tenant shall maintain and keep on the Premises or at Tenants principal office in California
for a period of not less than three (3) years following the end of each year during the Term,
adequate records which show Gross Receipts, inventories and receipts of merchandise at the
Premises, and daily receipts from all sales and other transactions on the Premises by Tenant and
any other persons conducting any business upon the Premises. Tenant shall record at the time of
sale, in the presence of the customer, all receipts from sales or other transactions, whether for
cash or credit, in a cash register or in cash registers having a cumulative total which shall be
sealed in a reasonable manner, and having such other reasonable features as may be appropriate or
required in order to properly account for and record all sales or other transactions in and from
the Premises. If upon an audit of Tenants books and records by Landlord, Landlord determines that
Tenants manner of recording sales is inadequate, Tenant agrees to adopt such measures as Landlord
may reasonably request to correct such inadequacies. Tenant further agrees to keep on the Premises
or at Tenants principal office in California for at least three (3) years following the end of
each year during the Term all pertinent original sales records. Original
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sales records may include any or all of the following: (a) cash register tapes, including tapes
from temporary registers; (19) serially numbered sales slips; (c) computer printouts and
computerized sales slips; (d) the originals of all mail orders at and to the Premises; (c) the
original records of all telephone orders at and to the Premises; (f) settlement report sheets of
transactions with subtenants, concessionaires and licensees; (g) the original records showing that
merchandise returned by customers was purchased at the Premises by such customers; (h) memorandum
receipts or other records of merchandise taken out on approval; (I) records of inventory purchases;
(j) such other sales records, if any, which would normally be examined by an independent accountant
pursuant to generally accepted auditing standards in performing an audit of Tenants Gross
Receipts; and (k) the records specified in (a) to (j) above for subtenants, assignees,
concessionaires or licensees of Tenant.
Section 6.02. Reports by Tenant.
Tenant shall submit to Landlord on or before the sixtieth (60th) day following
each calendar year during the Term hereof at the place then fixed for the payment of rent, or at
such other place designated by Landlord, a written statement signed by Tenant, and certified by it
to be true and correct, showing in reasonable, accurate detail, the amount of Gross Receipts for
each preceding year.
Tenant shall submit to Landlord on or before the sixtieth (60th) day following the end of each
calendar year at the place then fixed for the payment of rent, a written statement signed by
Tenant, and certified to be true and correct showing in reasonably accurate detail satisfactory in
scope to Landlord, the amount of Gross Receipts during the preceding calendar year. At Landlords
option, the written statement shall be duly certified to Tenant and Landlord by independent
certified public accounts of recognized standing. The accounting statement referred to in this
Section 6.02 shall be in such form and style and contain such details and breakdown as the Landlord
may reasonably require.
If Tenant fails to timely submit to Landlord either the monthly or annual written statement
described in this Section 6.02, Tenant shall pay to Landlord, as additional rent and without
limiting any other remedy Landlord may have against Tenant under this lease as a result of this
breach, a $100.00 (increased each year according to the Index) charge for each and every month that
the Tenant fails to timely submit such written statement. Alternatively, Landlord shall have the
right, upon five (5) days written notice, to audit Tenants records at Tenants expense.
Section 6.03. Annual Balance Sheet
Tenant shall provide Landlord, whenever reasonably requested by Landlord, a current
annual balance sheet for Tenants business at the Premises, either certified by Tenant or if Tenant
is a corporation, by Tenants chief financial officer, to be true and correct or accompanied by a
report of an independent certified public accountant.
ARTICLE VII
AUDIT
Section 7.01. Right to Examine Books.
The acceptance by Landlord of payments of Percentage Rent shall be without prejudice to
Landlords right to examine Tenants books and records concerning Gross Receipts from the Premises.
Section 7.02. Audit.
As its option, Landlord may cause, at any reasonable time and upon five (5) days prior written
notice to Tenant, a complete audit to be made of Tenants entire business affairs and records
relating to the Premises for the period covered by any statement issued by the Tenant in accordance
with Section 6.02. If such audit discloses that Tenant has under-reported Gross Receipts by more
than three percent (3%) for such period, Tenant shall promptly pay to Landlord within ten (10)
days the cost of its audit and any deficiency in amounts owed as disclosed by the audit. The
deficiency shall be considered a late payment pursuant to Section 4.06. In the event that Tenant is
in default of this Lease by under-reporting Gross Receipts by more than three percent (3%) as
determined by two successive audits, Landlord may terminate this Lease upon five (5) days
written notice to Tenant. In such event, Landlord shall have all remedies set forth in Section
22.02.
ARTICLE VIII
TAXES
Section 8.01. Real Property Taxes.
Tenant agrees to pay its pro rata share of all general and special real property taxes and
assessments and governmental levies and charges of any and every kind, nature and sort whatsoever,
ordinary and extraordinary, foreseen and unforeseen, and substitutes therefor or supplements
thereto, including the cost to Landlord of any appeals or contests of any taxes or assessments,
except any inheritance, estate, succession, transfer or gift tax imposed on Landlord or any income
tax specifically payable by Landlord as a separate tax-paying entity without regard to Landlords
income source as arising from or out of the Entire Premises (collectively Real Property Taxes),
which may be levied or assessed by any lawful authority against the Entire Premises applicable to
the period from the commencement of the Term until the expiration or sooner termination of this
Lease. Tenants pro rata share shall be apportioned according to the floor area of the Premises as
it relates to the total leasable floor area of the Building or buildings located within the Entire
Premises (including the Premises). Notwithstanding the foregoing provisions, if the Real Property
Taxes arc not levied and assessed against the Entire Premises by means of a single tax bill (i.e.,
if the Entire Premises is separated into two (2) or more separate tax parcels for purposes of
levying and assessing the Real Property Taxes), then, at Landlords option, Tenant shall pay
Tenants pro rata share of all Real Property Taxes which may be levied or assessed by any lawful
authority against the land and
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improvements of the separate tax parcel on which the Building containing the Premises is located.
Tenants pro rata share under such circumstances shall be apportioned according to the floor area
of the Premises as it relates to the total leasable floor area of the Building or buildings
situated in the separate parcel in which the Premises are located.
All Real Property Taxes for the tax year in which the Term commences and for the tax
year in which this Lease terminates shall be apportioned and adjusted so that Tenant shall not be
responsible for taxes and assessments for a period of time occurring prior to the time the Term
commences or subsequent to the Term.
The amount to be paid pursuant to the provisions of this Section 8.01 shall be paid
monthly in advance without demand or offset as estimated by Landlord based on the most recent tax
bills and estimates or reappraised values (if reappraisal is to occur), commencing with the month
(or partial month on a prorated basis if such be the case) that the Term commences.
If at any time during the Term, a tax, fee or excise is levied or assessed by any political
body against Landlord on account of rent payable to Landlord hereunder, the square footage of the
Premises, the act of entering into this Lease or the occupancy of Tenant or any other tax however
described or any tax based on or measured by expenditures made by Tenant on behalf of Landlord,
including the so-called value added tax, such tax, fee or excise shall be considered Real Property
Taxes for purposes of this Section 8.01, and shall be payable in full by Tenant. At Landlords
option, such taxes, fees or excises shall be payable monthly in advance on an estimated basis as
provided in this Section 8.01 or shall be payable within ten (10) days after Tenants receipt of
the tax bill therefor from Landlord.
Section 8.02. Increase in Taxes.
In addition to the Real Property Taxes described above in Section 8.01, Tenant shall pay one
hundred percent (100%) of any increase in Real Property Taxes as a result of any Tenants Work or
any other leasehold improvements, alterations or changes made by Tenant to the Premises during the
Term. Tenant shall reimburse Landlord promptly upon demand.
Section 8.03. Personal Property Taxes.
Tenant shall pay prior to delinquency all federal, municipal, county or state taxes, charges,
assessments and fees assessed during the Term against any leasehold interest or personal property
of any kind, owned by or placed in, upon or about the Premises by Tenant.
ARTICLE IX
SECURITY DEPOSIT
Section 9.01. Amount of Deposit
.
Upon signing this Lease, Tenant shall deposit with Landlord the sum set forth in
Section 1.02.12 herein (Security Deposit). This Security Deposit shall be held by Landlord,
without liability for interest, as partial security for the full and faithful performance by Tenant
of all the terms, covenants, and conditions of this Lease to be performed by Tenant. Landlord may
commingle the Security Deposit and shall not be required to keep it separate from its general
funds.
Section 9.02. Use and Return of Deposit.
In the event of the failure of Tenant to abide by any of the terms, covenants and conditions
of this Lease, then Landlord, at its option, may use any amount of the Security Deposit to
compensate Landlord for any loss or damage sustained or suffered due to such failure by Tenant. The
entire Security Deposit, or any portion thereof, may also be applied by Landlord to the payment of
overdue rent or other sums due and payable to Landlord by Tenant hereunder. In this event, Tenant,
upon the written demand of Landlord, shall immediately remit to Landlord a sufficient amount in the
form of a cashiers check to restore the Security Deposit to the original sum deposited. Failure to
do so within five (5) days after such demand shall constitute a material breach of this Lease.
Should Tenant comply
with all of the terms, covenants and conditions of this Lease and promptly pay when due all
of the Rent and all other sums payable by Tenant to Landlord, the Security Deposit will be returned
to Tenant in accordance with applicable law.
Section 9.03. Transfer of Security Deposit.
Landlord shall deliver the Security Deposit to the purchaser of Landlords interest in
the Premises, in the event that such interest is sold, and upon delivery, Landlord shall be
discharged from any further liability respect to repayment of the Security Deposit to Tenant.
ARTICLE X
CONDUCT OF BUSINESS BY TENANT
Section 10.01. Use of Premises.
Tenant shall use the Premises solely for the use and under the trade name specified in
Sections 1.02.9 and 1.02.4, respectively, herein, and for no other purpose. The term Use shall
mean the 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.
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Tenant shall not (a) do or permit anything to be done in or about the Premises which will in
any way obstruct or interfere with the rights of other occupants of the Entire Premises or injure
or annoy them, (b) cause, maintain or permit any nuisance in, on or about the Premises, (c) use or
allow the Premises to be used for any unlawful purpose, (d) commit or allow to be committed any
waste in or upon the Premises, (e) display or allow carts, pallets or similar items owned by or
within the control of Tenant or Tenants merchandise to be stored or to remain outside the defined
exterior walls and permanent doorways of the Premises, (f) install any exterior lighting, amplifier
or similar devices, or use in or abut the Premises any advertising medium or device which may be
heard or seen outside the Premises, such as flashing lights, search lights, loud speakers,
phonographs or radio broadcasts, (g) permit to be conducted any sale by auction in, upon or from
the Premises whether voluntary, involuntary, pursuant to any assignment for the payment of credits
pursuant to any bankruptcy or any other insolvency proceedings, or any distress or fire or
bankruptcy or going-out-of-business sale, or (h) conduct any sidewalk sale. Tenant shall at all
times keep the Premises in a neat and attractive appearance.
Tenant shall not use, or permit the Premises, or any part thereof, to be used for any purposes
other than the purposes for which the Premises are hereby leased. No gaming machines shall be
permitted on the Premises. No use shall be made or permitted to be made of the Premises, nor acts
done, which will increase the existing rate of insurance upon the Building or the Entire Premises,
or cause a cancellation of any insurance policy covering the Building or the Entire Premises or any
part thereof. Tenant shall not sell or permit to be kept, used, stored or sold in or about the
Premises any article which may be prohibited by standard form fire insurance policies. Tenant, at
its sole cost, shall comply with any and all laws concerning the Premises or Tenants use of the
Premises, including, without limitation, the obligation at Tenants cost to alter, maintain or
improve the Premises in compliance with and conformity with all laws relating to the condition, use
or occupancy of the Premises during the term (including the Americans With Disabilities Act).
Tenant shall also comply with the requirements of any insurance organization or company necessary
for the maintenance of the fire and public liability insurance described in this Lease covering the
Building and its appurtenances. If Tenants use of the Premises results in a rate increase for the
Building or the Entire Premises, Tenant shall pay with in ten (10) days of billing from Landlord,
as additional rent, a sum equal to the additional premium caused by such rate increase.
Section 10.02. Operation of Business.
Tenant shall open for business in the Premises no later than the Rent Commencement Date and
shall thereafter operate continuously for business to the public in the Premises. Tenant shall
operate one hundred percent (100%) of the Premises during the entire Term with due diligence and
efficiency so as to maximize the Gross Receipts which may be produced by Tenants business therein.
Tenant shall carry at all times in the Premises a stock of merchandise of such size, character and
quality as shall be reasonably designed to produce the maximum return to Landlord and Tenant.
Tenant shall conduct its business in the Premises during the usual and customary days and hours for
such type of business, or during times designated by Landlord for other tenants at the Entire
Premises. In the latter event, Landlord will notify Tenant in writing of the designated Entire
Premises days and hours. Tenants obligation to continuously operate its business in the Premises
shall not apply if the Premises should be closed and the business of Tenant temporarily
discontinued therein for not more than three (3) days out of respect to the memory of any deceased
officer or employee of Tenant, or the relative of any such officer or employee. Tenant shall
install and maintain at all times displays of merchandise in the display windows (if any) for the
Premises. Tenant shall keep the display windows and signs, if any, in the Premises well lighted
during the hours from sundown to 11:00 p.m.
In the event Tenant fails to take possession of the Premises or to open for business fully
fixturized, stocked and staffed by the Rent Commencement Date, or fails to fully operate its
business in the Premises at any time during the term in accordance with this Section 10.02, then
Landlord, in addition to any and all remedies otherwise provided in this Lease, shall have the
right to collect a sum equal to the greater of (i) twice the Minimum Rent per day, or (ii) $100.00
for each and every day
after the Rent Commencement Date that Tenant shall fail to be open for business in the
Premises in accordance with the terms of this Lease. This additional rent is intended to compensate
Landlord for loss of Rent that may have been earned during the period Tenant is not open for
business, for damages suffered by the Landlord to the Entire Premises as a whole by reason of
Tenants not being open and for additional costs and expenses that Landlord may incur by reason of
increased administrative expenses and security costs for the Entire Premises. Tenant acknowledges
and agrees that Landlord is executing this Lease in reliance on Tenants covenant and obligation to
continuously operate its business in the Premises in accordance with this Lease and that such
obligation and covenant to the Landlord is a material element of consideration inducing Landlord to
execute this Lease. The foregoing provision for additional rent shall not apply during any
temporary closure for a maximum of three (3) days as set forth above, or due to casualty damage or
condemnation (in which either event Tenant shall recommence the conduct of its business in
accordance with the terms of this Lease within the time periods specified in this Lease after
restoration and redelivery of the Premises to the Tenant).
Section 10.03. Competition.
During the Term, neither Tenant, nor any entity owned or controlled directly or indirectly by
Tenant, its partners, shareholders or directors, shall, without the prior written consent of
Landlord, directly or indirectly engage in any similar or competing business with that to be
operated by Tenant in the Premises within a radius of two (2) miles from the outside boundary of
the Entire Premises.
Section 10.04. Storage, Office Space.
Tenant shall warehouse, store and/or stock in the Premises, only such goods, wares and
merchandise as Tenant intends to offer for retail sale at, in, from or upon the Premises. This
shall not preclude occasional emergency transfers of merchandise to the other stores of Tenant, if
any, not located in the Entire Premises. Tenant shall use for office, clerical or other non-selling
purposes only such space in the Premises as is from time to time reasonably required for Tenants
business in the Premises.
Section 10.05. Compliance with Environmental Laws.
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Tenant at all times and in all respects shall comply with all federal, state and local laws,
ordinances and regulations (Hazardous Materials Laws) relating to industrial hygiene,
environmental protection or the use, generation, manufacture, storage, disposal or transportation
of any hazardous, toxic, contaminated or polluting materials, substances or wastes, including,
without limitation, oil or other petroleum products, flammable explosives, asbestos, or any
hazardous substances, hazardous wastes, hazardous materials or toxic substances regulated
under any Hazardous Material Law (collectively, Hazardous Materials). Tenant at its own expense
shall procure, maintain in effect and comply with all conditions of any and all permits, licenses
and other governmental and regulatory approvals required for Tenants use of the Premises. In all
respects, Tenant shall handle, treat, deal with, manage and dispose of any and all Hazardous
Materials in total conformity with all applicable Hazardous Materials Laws and prudent industry
practices. Upon expiration or earlier termination of the term of the Lease, Tenant shall cause all
Hazardous Materials to be removed from the Premises and transported for use, storage, or disposal
in accordance and compliance with all applicable Hazardous Materials Laws. If Tenant fails to do
so, Landlord may remove such Hazardous Materials at Tenants expense.
If at any time it reasonably appears to Landlord that Tenant is not maintaining sufficient
insurance or other means of financial capacity to enable Tenant to fulfill its obligations to
Landlord in connection with this Section 10.05, whether or not then accrued, liquidated,
conditional or contingent, Tenant shall procure and thereafter maintain in full force and effect
such insurance or other form of financial assurance, with or from companies or persons and in forms
reasonably acceptable to Landlord, as Landlord may from time to time reasonably request.
Section 10.06. Sewer Damage
Tenant agrees not to discharge any acid or other harmful or dangerous chemicals into
the sewer system, whether it be inside the Premises area or inside the main system leading from the
Premises to the main sewer line. Should Tenant discharge any acid or harmful chemicals into the
sewer system, Tenant shall be
fully
responsible for the cost and repair of such damage. Landlord
reserves the right to select an expert of its choosing to inspect any damage at Tenants cost.
Tenant shall not be responsible for cost of expert if it is determined such damage is not caused by
Tenant. Tenant accepts responsibility for any damage if the following conditions exist: (a) the
damage to the sewer system is determined to be due to the chemicals used in the operation of
Tenants business; (b) the damage exists only in the designated portion of the sewer system.
Section 10.07. Tenants Use No Nuisance
Tenant acknowledges that odors emanating from Tenants store as a result of Tenants operation
can become a nuisance to other Tenants within the Entire Premises. Therefore, Tenant agrees to take
whatever measures are necessary to eliminate odors emanating from the leased premises at Tenants
sole cost and expense. If the odor problem is not remedied by Tenant, Landlord has the right to
have odor nuisance inspected and remedied by an expert of Landlords and Tenants choosing at
Tenants sole cost.
Section 10.08. Tenants Covenant
The Tenant herein covenants by and for himself or herself, his or her heirs, executors,
administrators and assigns, and all persons claiming under or through him or her, and this lease is
made and accepted upon and subject to the following conditions.
That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, marital status, physical or mental
disability or medical condition, national origin or ancestry in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the
lessee himself or herself, or any person claiming under or through him or her, establish or permit
any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subleases, subtenants or vendees in the premises herein leased.
ARTICLE XI
MAINTENANCE AND REPAIRS
Section 11.01. Tenants Maintenance Obligations.
Tenant, at its sole cost and expense, shall keep the Premises in first class order,
condition and repair and shall make all replacements necessary to keep the Premises including the
Theatre Building and improvements in such condition. All replacements shall be of a quality equal
to or exceeding that of the original. Should Tenant fail to make these repairs and replacements or
otherwise so maintain the Premises for a period of three (3) days after written demand by Landlord,
or should Tenant commence, but fail to complete, any repairs or replacements within thirty (30)
days after written demand by Landlord, Landlord may enter the Premises and make such repairs or
replacements without liability to Tenant for any loss or damage that may occur to Tenants stock or
business, and Tenant shall pay to Landlord the costs incurred by Landlord in making such repairs or
replacements together with interest thereon at the maximum rate permitted by law from the date of
commencement of the work until repaid. Tenant, at its expense, shall repair promptly any damage to
the Building or the Entire Premises caused by Tenant or its agents or employees or caused by the
installation or removal of Tenants personal property. Tenant shall contract with a service company
licensed and experienced in servicing HVAC equipment and approved by Landlord for the quarterly
maintenance of the HVAC equipment serving the Premises and shall provide Landlord with a copy of
the service contract within ten (10) days following its execution. If Tenant fails to timely
deliver a copy of the service contract, Landlord may impose a late charge in the amount of $50.00
per month until the copy is delivered. The sum so billed to Tenant shall become immediately due to
Landlord as additional rent. Landlord, at its option, may contract with a service company of its
own choosing, or provide such service itself, for the maintenance of the HVAC
equipment, and bill Tenant for the cost of same.
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Tenant, at its own expense, shall comply with all requirements for the installation and
periodic maintenance of the fire extinguisher or automatic dry chemical extinguishing system.
Section 11.02. Plate Glass.
Tenant shall promptly replace, at its expense, any and all plate and other glass damaged
or broken from any cause whatsoever (except Landlords direct act) in and about the Premises.
Tenant shall have the option either to insure this risk or self insure.
ARTICLE XII
COMMON AREA
Section 12.01. Definition of Common Area.
The term Common Area, as used in this Lease means all areas within the exterior
boundaries of the Entire Premises now or later made available for the general use of Landlord and
other persons entitled to occupy floor area in the Entire Premises. Without limiting this
definition, Landlord may include in the Common Area those portions of the Entire Premises presently
or later sold or leased until the commencement of construction of building(s) thereon, at which
time such areas shall be withdrawn from the Common Area. Common Area shall not include (a) the
entryway to a tenants premises, (b) any improvements installed by a tenant outside of its
premises, whether with or without Landlords knowledge or consent, or (c) any areas or facilities
that could be considered as Common Area except that the areas or facilities are included in the
description of premises leased to a tenant.
Section 12.02. Maintenance and Use of Common Area.
The manner in which the Common Area shall be maintained shall be solely determined by
Landlord. If any tenant of any portion of the Entire Premises maintains its own Common Area
(Landlord shall have the right in its sole discretion to allow any tenant to so maintain its own
Common Area and be excluded from participation in the payment of Common Area Expenses as provided
below), Landlord shall not have any responsibility for the maintenance of that portion of the
Common Area; Tenant hereby waives any claims or damages arising out of any failure of such Landlord
or tenant to so maintain its portion of the Common Area.
The use and occupancy by Tenant of the Premises shall include the right to use the Common Area
(except those portions of the Common Area on which have been constructed or placed permanent or
temporary kiosks, displays, carts and stands and except areas used in the maintenance or operation
of the Entire Premises), in common with Landlord and tenants of the Entire Premises and their
customers and invitees, subject to such reasonable, non-discriminatory rules and regulations
concerning the use of the Common Area as may be established by Landlord from time to time. Written
notice of such rules and regulations and amendments and supplements thereto, if any, shall be given
to Tenant fifteen (15) days prior to their effective date. Tenant agrees to promptly comply with
all such rules and regulations upon receipt of written notice from Landlord. Landlord shall have no
liability if any Landlord or tenant does not comply with such rules and regulations.
Tenant and Tenants employees and agents shall not solicit business in the Common Areas, nor
shall Tenant distribute any handbills or other advertising matter on automobiles parked in the
Common Area.
Section 12.03. Control of and Changes to Common Area.
Landlord shall have the sole and exclusive control of the Common Area. Landlords rights shall
include, but not be limited to, the right to (a) restrain the use of the Common Area by
unauthorized persons; (b) cause Tenant to remove or restrain persons from any unauthorized use of
the Common Area if they are using the Common Area by reason of Tenants presence in the Entire
Premises; (c) utilize from time to time any portion of the Common Area for promotional,
entertainment and related matters; (d) place permanent or temporary kiosks, displays, carts and
stands in the Common Area and to lease same to tenants; (e) temporarily close any portion of the
Common Area for repairs, improvements or alterations, to discourage non-customer use, to prevent
dedication or an easement by prescription, or for any other reason deemed sufficient in Landlords
judgment; and (f) reasonably change the shape and size of the Common Area, add, eliminate or change
the location of improvements to the Common Area, including, without limitation, buildings,
lighting, parking areas, roadways and curb cuts, and construct buildings on the Common Area.
Landlord may determine the nature, size and extent of the Common Area and whether portions of the
same shall be surface, underground or multiple-deck; as well as make changes to the Common Area
from time to time which in Landlords opinion are deemed desirable for the Entire Premises.
Landlords right in this Section 12.03 may be shared in common with other Landlords of the Entire
Premises.
Section 12.04. Common Area Expenses.
The term Common Area Expenses as used in this Lease means all costs and expenses
incurred by Landlord, in operating, managing, policing, insuring, replacing, repairing and
maintaining the Common Area and, if applicable, the security offices and management offices,
located in the Entire Premises from time to time (the Common Facilities), and operating,
insuring, repairing, replacing and maintaining the Common Utility Facilities. Common Utility
Facilities arc defined to include but are not limited to, sanitary sewer lines and systems, gas
lines and systems, water lines and systems, fire protection lines and systems, electric power,
telephone and communication lines and systems, and storm drainage and retention facilities not
exclusively serving the premises of any tenant or store located in the Entire Premises. Common Area
Expenses shall include, without limitation, the following: expenses for maintenance, landscaping,
repaying, resurfacing, repairs, replacements,
painting, lighting, cleaning, trash removal, security, fire protection and similar items;
cost, installation and removal of seasonal decorations; non-refundable contributions toward one or
more reserves for replacements other than equipment; rental on equipment; charges, surcharges and
other levies related to the requirements of any Federal, State or local governmental agency; costs
of any improvements made by Landlord to the Entire Premises for the purpose of reducing recurring
expenses or utility costs and from which Tenant can expect a reasonable benefit or that are
required by any governmental law, ordinance, regulation or mandate subsequent to the original
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construction of the Entire Premises; expenses related to the Common Utility Facilities; real and
personal property taxes and assessments on the improvements and land comprising the Common Area and
Common Facilities; Landlord Carried Insurance (defined in Section 16.02) and any additional
coverage obtained by Landlord on the Entire Premises; and a sum payable to Landlord for
administration and overhead in an amount equal to ten percent (10%) of the Common Area Expenses for
the applicable year.
Section 12.05. Proration of Common Area Expenses.
(a) From and after the commencement of the Term, Tenant shall pay to Landlord, on the
first day of each calendar month, without demand or offset, an amount estimated by Landlord to be
the monthly amount of Tenants share of the Common Area Expenses which shall also include Tenants
pro rata share of Real Property Taxes described in Section 8.01 (Monthly Impound). The Monthly
Impound may be adjusted periodically by Landlord based on Landlords reasonable estimate of
anticipated costs.
(b) Within one hundred twenty (120) days following the end of each calendar year of the Term,
or, at Landlords option, its fiscal year, Landlord shall furnish Tenant with a statement covering
the calendar or fiscal year (as the case may be) just expired, showing the actual Common Area
Expenses for that year, the amount of Tenants share of Common Area Expenses for said calendar or
fiscal year and the Monthly Impound payments made by Tenant during that year. If Tenants share of
the Common Area Expenses exceeds Tenants prior Monthly Impound payments, Tenant shall pay Landlord
the deficiency within ten (10) days after receipt of the annual statement. If Tenants Monthly
Impound payments for the calendar or fiscal year exceed Tenants actual share of Common Area
Expenses, and provided Tenant is not in arrears as to the payment of any Rent, Tenant may offset
the excess against the next Monthly Impound due Landlord.
(c) Tenants proportionate share of the Common Area Expenses shall be determined by
multiplying the amount of such expenses by a fraction, the numerator of which is the number of
square feet of leasable floor area in the Premises and the denominator of which is the number of
square feet of leasable floor area in the Entire Premises.
Section 12.06. Parking
Tenant and its employees shall park their vehicles only in those portions of the Common Area
from time to time designated for such purpose by Landlord. Landlord, at Tenants expense, shall
have the right to tow improperly parked vehicles of Tenant or Tenants employees. Tenant shall
reimburse Landlord upon demand for any such towing costs. Landlord shall have the right to adopt
and implement such parking programs as may be necessary to alleviate parking problems during the
peak traffic periods, including requiring the use of off-site parking. Tenant shall pay to Landlord
its proportionate share of the cost of any such off-site parking program based on the ratio of the
floor area of the Premises to the total floor area of the premises of all tenants in the Entire
Premises required to participate in such program.
Tenant shall furnish Landlord with a list of its employees and the license numbers of their
vehicles within fifteen (15) days after Tenant opens for business in the Premises. Tenant shall be
responsible for ensuring that its employees comply with all the provisions of this Section 12.06
and such other parking rules and regulations as may be adopted and implemented by Landlord from
time to time, including but not limited to systems of validation, shuttle transportation or any
other programs which may be deemed necessary or appropriate by Landlord to control, regulate or
assist parking by customers of the Entire Premises.
ARTICLE XIII
UTILITIES
Section 13.01. Utility Charges.
Tenant shall be solely responsible for and shall promptly pay all charges for heat, water,
gas, electricity, fire sprinkler, fire alarm or any other utility used, consumed or provided in, or
furnished, or attributable to the Premises at the rates charged by the supplying utility companies.
Should Landlord elect to supply any or all of such utilities, Tenant agrees to purchase and pay for
the same as additional rent as apportioned by the Landlord. The rate to be charged by Landlord to
Tenant shall not exceed the rate charged Landlord by any supplying utility plus any expenses
incurred by Landlord in connection with billing and supplying such utility service to Tenant. In no
event shall Landlord be liable for any interruption or failure in the supply of any such utilities
to the Premises. Tenant agrees to reimburse Landlord within ten (10) days of billing for fixture
charges and/or water tariffs, if applicable, which are charged by local utility companies. Landlord
will notify Tenant of this charge as soon as it becomes known. This charge will increase or
decrease with current charges being charged Landlord by the local utility company, and will be due
as additional rent. Tenant shall be responsible for sewer hook-up fees associated with Tenants
use of the Premises other than the fees for a standard retail shell.
ARTICLE XIV
ALTERATIONS AND SIGNS
Section 14.01. Installation.
Tenant shall not make or cause to be made any alterations, additions or improvements or
install or cause to be installed any trade fixtures, exterior signs, floor covering, interior
lighting, plumbing fixtures, shades or awnings or make any changes to the storefront of the
Premises without Landlords prior written consent. Concurrently with the request for approval,
Tenant shall deliver to Landlord two (2) sets of complete plans and specifications for such work
prepared by a licensed architect and if applicable, engineer. If required by Landlord, Tenant shall
also provide security for the lien free completion of such work in the form of a payment and
performance bond or other security satisfactory to Landlord.
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Section 14.02. Removal by Tenant.
All alterations, decorations, additions and improvements made by the Tenant, or made by the
Landlord on the Tenants behalf by agreement under this Lease, shall remain the property of the
Tenant for the Term, or any extension or renewal thereof. Any alterations, decorations, additions
and improvements made by Tenant or previous tenant, if applicable, shall not be removed from the
Premises without Landlords prior written consent. During the Term, Tenant shall not remove any of
its trade fixtures or other personal property, without the immediate
replacement thereof with
comparable fixtures or property. Upon expiration of this Lease, or any renewal term thereof, at
Landlords option, Tenant shall remove all such alterations, decorations, additions, and
improvements, and restore the Premises as provided in Section 15.01 hereof. If the Tenant fails to
remove such alterations, decorations, additions and improvements and restore the Premises, then
upon the expiration of this Lease, and upon Tenants vacation of the Premises, all such
alterations, decorations, additions and improvements shall become the property of Landlord and
Tenant shall reimburse Landlord for the cost of removal and/or storage of such alterations,
decorations, additions and improvements.
Section 14.03. Liens.
Tenant shall keep the Premises free from any kinds of liens arising out of work performed
or materials furnished Tenant and shall promptly pay all contractors and materialmen used by Tenant
to improve the Premises, so as to minimize the possibility of a lien attaching thereto. If any such
lien be made or filed, Tenant shall bond against or discharge the same within ten (10) days after
written request by Landlord.
Tenant shall indemnify, defend, protect and hold Landlord, any ground lessor, the
Premises and the Entire Premises and every part thereof free and harmless from and against any and
all liability, damage, claims, demands, suits, actions or expense (including attorneys fees)
arising out of any work done on or about the Premises by Tenant or, at Tenants direction,
including Tenants employees, representatives, successors,
contractors, subcontractors, materialmen
and assigns.
Section 14.04. Signs, Awnings and Canopies.
Tenant shall conform to the Century Stadium Promenade Tenant Sign Criteria as set forth
in Exhibit B. In addition, Tenant shall not place or suffer to be placed or maintained any sign,
awning, canopy, or advertising matter on the roof or on any exterior surface, door, wall or window
or within 48 inches of any windows or doors of the Premises or the Building without Landlords
prior written consent. If Landlord consents, Tenant agrees to maintain such sign, awning, canopy,
decoration, lettering or advertising matter in good condition and repair at all times.
Tenant agrees, at Tenants sole cost any signs as required by Landlord in strict
conformance with Landlords sign criteria as to design, material, color, location, size and letter
style and, if requested by Landlord, from the source designated by Landlord. Tenants sign shall be
installed prior to Tenants opening for business and shall thereafter be maintained by Tenant at
its own expense. If Tenant fails to maintain such sign, Landlord may do so and Tenant shall
reimburse Landlord for such cost plus a twenty percent (20%) overhead fee. If, without Landlords
prior written consent, Tenant installs a sign that does not conform to the Sign Criteria, Landlord
may have Tenants sign removed and stored at Tenants expense. The removal and storage costs shall
bear interest until paid at the maximum rate allowed by law.
Landlord reserves the right to revise the Sign Criteria, at any time. Within ninety (90)
days of Landlords request and provided that Tenant has been in occupancy of the Premises for at
least five (5) years, Tenant shall remove Tenants existing sign, patch the fascia, and install a
new sign, at Tenants sole cost and expense, in accordance with Landlords new sign criteria.
ARTICLE XV
SURRENDER OF PREMISES
Section 15.01. Surrender of Premises.
At the expiration of the tenancy hereby created, Tenant shall surrender the Premises in a
first class, clean condition in accordance with the requirements of Section 14.02 herein, except
for reasonable wear and tear and damage by unavoidable casualty to the extent covered by Landlord
Carried Insurance. Tenant shall remove all of its trade fixtures, and any alterations or
improvements if required as provided in Section 14.02 hereof, before surrendering the Premises to
Landlord and shall repair any damage to the Premises or Building caused thereby. Tenant shall also
remove its sign and patch the fascia. Tenants covenants shall survive the expiration or other
termination of this Lease.
If the Premises were occupied by other tenants prior to the commencement of the Term, then
Tenant, upon Landlords written request at the expiration of the Term, shall remove all or a
portion of, as designated by Landlord, the interior improvements made by the prior tenants, and
deliver the Premises in a condition acceptable to Landlord.
Following
removal of all improvements as required by Section 15.01, Landlord shall
conduct an inspection of the Premises to confirm Tenants compliance with this Section. Tenant
shall send written notice to Landlord five days prior to Landlords inspection. Landlords
inspection shall occur no later than the last day of the Term. During the inspection, Tenant shall
surrender all keys for the Premises to Landlord and shall inform Landlord of all combinations on
locks, safes and vaults, if any, in the Premises.
Tenant
shall also provide Landlord with a written statement, at Tenants sole expense,
from a reputable company licensed and experienced in HVAC repair and maintenance approved by
Landlord that certifies that the
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HVAC equipment serving the Premises was inspected and serviced, if necessary, within the last
thirty (30) days of the Term and is in good working order. If Tenant fails to provide the
statement, Landlord may order an inspection of the HVAC at Tenants expense.
ARTICLE XVI
INSURANCE AND INDEMNITY
Section 16.01. Tenants Liability and Property Insurance.
During the Term, Tenant, at its expense, shall keep in full force and effect a policy of
commercial general liability insurance insuring Landlord and Tenant from and against all claims,
demands, actions or liability for injury to or death of any persons, and for damage to property
arising from or related to the use or occupancy of the Premises or the operation of Tenants
business and the business operated by Tenant and subtenants and concessionaires of Tenant in the
Premises. No deductible will be carried under this coverage without the prior written consent of
Landlord. The policy shall include coverage for property damage, bodily injury,
premises/operations, contractual liability (including Tenants indemnity under this Lease),
independent contractors, personal injury, product/completed operations, owned and nonowned
automobiles, and, if applicable, liquor liability insurance. If required by Landlord, Tenant must
carry building ordinance coverage. The insurance shall be written on an occurrence basis with
coverage in a minimum amount of $1,000,000.00 per occurrence for bodily injury/property damage and
$2,000,000.00 general aggregate limit. Tenant shall also maintain in full force and effect
insurance covering all trade fixtures, merchandise, personal property, equipment and Tenant
Improvements other than improvements paid by Landlord, in amounts no less than one hundred percent
(100%) of the replacement value thereof, providing protection against any peril included within the
classification of the Fire and Extended Coverage, including sprinkler damage, vandalism and
malicious mischief. Tenant shall also maintain Workers Compensation Insurance with a limit no
less than the amount required by law.
During any construction on the Premises, Tenant shall cause its contractor to obtain a policy
of general liability insurance in the same form as required of Tenant, a policy of builders risk
insurance providing coverage for the expected value of Tenants Work when completed and Workers
Compensation as required by law.
All
policies shall name Landlord, property manager, Landlords lender and any person, firms
or corporations designated by Landlord as additional insures. No additional insured shall be liable
for any payment for premiums. All additional insures shall be entitled to recovery for any loss
occasioned to them, their servants, agents or employees by reason of negligence of Tenant, its
officers, agents or employees. All policies shall contain a clause that the insurer will not cancel
or change such coverage without first giving Landlord thirty (30) days prior written notice. All
insurance shall be issued by an insurance company qualified to do business in the State in which
the Entire Premises is located and having an overall rating of Class A- or better and a financial
rating of Class V as rated in the most current available Bests Key Rating Guide. Copies of all
policies or certificates of insurance required hereunder shall be delivered to Landlord as a
condition to Tenants entry onto the Premises. All policies shall be written as primary policies,
not contributing with and not in excess of coverage which Landlord may carry. Landlord may increase
the limits of liability required hereunder in the exercise of Landlords reasonable judgment.
If this Lease is canceled by reason of damage or destruction and Tenant is relieved of its
obligation to rebuild, any insurance proceeds for damages to the Premises, including all leasehold
improvements, but excluding all fixtures, will belong to Landlord, free and clear of any claims by
Tenant.
Section 16.02 Landlords Acquisition of Insurance.
If Tenant at any time during the Term fails to procure or maintain insurance required
hereunder or to pay 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.
Section 16.03. Landlord Carried Insurance.
Landlord shall, subject to reimbursement as provided herein, maintain public liability, fire
with extended coverage insurance with a vandalism and malicious
mischief endorsement, rental loss
insurance, earthquake (if not otherwise economically impractiable) or any other insurance coverage
deemed necessary by Landlord or Landlords lender (collectively, Landlord Carried Insurance)
through the Term, in amounts from time to time deemed reasonably necessary by Landlord or
Landlords lender on the Common Area. The Landlord Carried Insurance may be obtained through a
blanket policy or other form of pooled insurance coverage covering not only the Entire Premises,
but other property owned by Landlord or its affiliates. The fire and extended coverage insurance
shall be in an amount equal to at least ninety percent (90%) of the replacement value of the
Building and Improvements paid for by Landlord as set forth in Section 5.01(c). During the Term,
Tenant hereby agrees to reimburse Landlord as part of the Common Area Expenses for Tenants pro
rata share of any Landlord Carried Insurance attributable to the Common Area and to reimburse
Landlord for Landlord Carried Insurance attributable to the Tenants Building and Improvements. In
determining Tenants share of the premiums for Landlord Carried Insurance, the schedule issued by
the organization making the insurance rate on the improvements, areas and/or risks covered, showing
the various components of such rates, shall be conclusive evidence of the charges which make up the
insurance rate and the share to be charged to the Premises. If such a schedule cannot be obtained,
then Tenants share shall be a proportion of the premiums for such Landlord Carried Insurance based
on the ratio of the square footage of the floor area of the Premises to the total square footage of
the floor area of all builing space covered by such Landlord Carried Insurance.
Section 16.04. Indemnification of Landlord.
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Tenant
shall indemnify, defend, protect and save Landlord harmless from and against any
and all claims, demands, actions, damages, liability and expense (including reasonable attorneys
fees and costs of investigation) in connection with any damage to person and/or property arising
directly or indirectly from or connected with the conduct or management of the business conducted
by Tenant on the Premises, or the occupancy or use by Tenant of the Premises or any part of the
Entire Premises, or from any breach or default on the part of Tenant in the performance of any
covenant or agreement on the part of Tenant to be performed pursuant to this Lease, or from
violations of or noncompliance with any governmental requirements or insurance requirements, or
from any acts or omissions of Tenant or any person on the Premises by license or invitations of
Tenant or occupying the Premises or
any part thereof under Tenant whether such damage occurs in, on or about the Premises, the
Common Area or the
Entire Premises. In case Laudlord shall be made a party to any litigation commenced by or against
Tenant, Tenant shall accept any tender of defense by Landlord and
shall, notwithstanding any
allegations of negligence or misconduct on the part of Landlord, its agents or employees, defend,
protect and hold Landlord harmless and pay all costs, expenses and reasonable attorneys fees
incurred or paid by Landlord in connection with such litigation; provided, however, Tenant shall
not be liable for any such damage to the extent and in the proportion such damage is ultimately
determined to be attributable to the gross negligence or willful misconduct of Landlord, its agents
or employees, unless covered by insurance required to be carried by Tenant.
Landlord may, at its option, require Tenant to assume Landlords defense in any action covered by
this Section 16.03 through counsel satisfactory to Landlord.
Landlord
shall, during the Term hereof, indemnify Tenant and save it harmless from and
against any and all claims, demands, actions, damages, liability and
expense arising solely out of
the gross negligence or willful misconduct of the Landlord; providing, howevcr, in no event shall
Landlord be liable to Tenant for any consequential damages, including, without limitation, any
claimed loss of profit or business.
Section 16.05. Boiler, HVAC and Evaporative Cooler Insurance.
If required by Landlord, Tenant, at its sole expense, shall procure and maintain in full force
and effect for the Term, boiler and machinery insurance on all air-conditioning equipment,
evaporative coolers, boilers, and other pressure vessels and systems, whether fired or unfired,
located in the Premises. If said objects and the damage that may be caused by them or result from
them are not covered by Tenants extended coverage insurance required pursuant to Section 16.01,
then such boiler insurance shall be in an amount satisfactory to Landlord and equal to one hundred
percent (100%) of the replacement value of such equipment.
Section 16.06. Waiver of Subrogation.
Landlord
and Tenant hereby mutually waive their respective rights of recovery, against each
other for any loss to the Premises or its contents resulting from actions on or with respect to the
Premises insured by fire, extended coverage or any other insurance existing for the benefit of the
respective parties and each party agrees to apply to their insurers to obtain similar waivers from
such insurers. Each party shall obtain any special endorsements required by such partys insurer to
evidence compliance with the aforementioned waiver.
Section 16.07. Waiver or Loss and Damage.
Landlord
shall not be liable for any damage to property of Tenant, or of others, located in,
on or about the Premises, nor for the loss of or damage to any property of Tenant or of others by
theft or otherwise. Landlord shall not be liable to Tenant, Tenants employees or representatives
for any injury or damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water, rain or leaks from any part of the Premises or from the pipes,
appliances or plumbing works or from the roof, street or sub-surface or from any other places or by
dampness or by any other cause of whatsoever nature. Landlord shall not be liable to Tenant,
Tenants employees or representatives for any such damage caused by other tenants or persons in the
Premises, occupants of adjacent property of the Entire Premises, or the public, or caused by
operations in construction of any private, public or quasi-public work. Landlord shall not be
liable for any latent defects in the Premises or in the Building except for a period of one (1)
year from the date of original completion of the Building by Landlords contractor. All property of
Tenant kept or stored on the Premises shall be so kept or stored at the sole risk of Tenant and
Tenant shall hold Landlord harmless from any claims arising out of damage to the same, including
subrogation claims by Tenants insurance carriers, unless such damage shall be caused by the
willful act or gross negligence of Landlord. Landlord shall not be liable in any circumstances for
any consequential damages of any kind or nature whatsoever, including, without limitation, any
claimed loss of profit or business.
Section 16.08. Notice by Tenant.
Tenant shall give immediate notice to Landlord in case of fire or accidents in the
Premises or in the Building or of any damage or defects in the Premises, the Building or any
fixtures or equipment therein.
ARTICLE XVII
ESTOPPEL CERTIFICATE, ATTORNMENT, SUBORDINATION,
MORTGAGEE PROTECTION CLAUSE
Section 17.01. Estoppel Certificate.
Within
five (5) days after Landlords written request, Tenant
agrees to deliver in
recordable form a certificate to any proposed mortgagee, ground lessor or purchaser, or to
Landlord, certifying that this Lease is in full force and effect, that there does not exist nor has
there existed any toxic materials or hazardous waste in, on or about the Premises, that no more
than one (1) months rent has been paid in advance, the essential terms of the Lease, that there
are no defenses or offsets thereto, or stating those claimed by Tenant, and any other information
that may be requested.
Section 17.02. Attornment.
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Tenant
shall, in the event any proceedings are brought for the foreclosure of, or in the
event of exercise of the power of sale under any mortgage made by the Landlord covering the
Premises, or in the event of a termination of any ground lease covering the Building or Premises,
attorn to the purchaser or ground lessor upon any such foreclosure or sale or termination of ground
lease and recognize such purchaser or ground lessor as the Landlord under this Lease, provided that
any purchaser or mortgage or ground lessor shall recognize this Lease as remaining in full force
and effect so long as Tenant is not in default hereunder.
Section 17.03. Subordination.
Upon
the written request of Landlord, and provided such mortgagee or
ground lessor confirms
in writing the nondisturbance provisions of Section 17.02 above, Tenant will immediately
subordinate its rights hereunder to the lien of any mortgage or mortgages or the lien resulting
from any other method of financing or refinancing, or any ground lease now or hereafter in force
covering the land and the Building or upon any buildings hereafter placed upon the land of which
the Premises are a part, and to all advances made or hereunder to be made upon the security
thereof. This Section 17.03 shall be self-operative and no further instrument or subordination
shall be required unless requested by Landlords mortgagee or ground lessor. Tenant covenants and
agrees that it will execute subordination agreements at any time upon Landlords written request
without compensation being made therefor. However, if Landlord so elects, this Lease shall be
deemed prior in lien to any mortgage, deed of trust or other encumbrances or ground lease upon or
including the Premises, regardless of recording and Tenant will execute a statement in writing to
such effect at Landlords request.
Section 17.04. Mortgagee Protection Clause.
Tenant
agrees to give any mortgagees, trust deed holders and/or ground lessor, by
registered mail, a copy of any notice of default served upon the Landlord, provided that prior
to such notice Tenant has been notified in writing (by way of notice of assignment of lease, or
otherwise) of the addresses of such mortgagees, trust deed holders and/or ground lessor. Tenant
further agrees that if Landlord shall have failed to cure such default within the time provided for
in this Lease, then the mortgagees and/or trust deed holders shall have an additional thirty (30)
days within which to cure such default, or if such default cannot be cured within that time, then
such additional time as may be necessary, provided such mortgagees, trust deed holders and/or
ground lessor commence such cure within thirty (30) days and diligently pursue the remedies
necessary to cure such default (including but not limited to commencement of foreclosure
proceedings to effect such cure), in which event this Lease shall not be terminated while such
remedies are being so diligently pursued.
Section 17.05. Landlord Waiver Form.
Upon request by Tenant, Landlord shall execute an Landlords waiver and consent to financing
for Tenants fixturization on the Premises in a form to be supplied by Landlord. Tenant shall pay
Landlord $150.00 (increased by the Index) for each form signed by Landlord.
ARTICLE XVIII
ASSIGNMENT AND SUBLETTING
Section 18.01. Consent Required.
Except as provided in Sections 18.02, 18.03 and 18.04 herein, Tenant shall not assign this
Lease in whole or in part, nor sublet all or any part of the Premises, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld. It is agreed that Landlord
will not be acting unreasonably in refusing to consent to an assignment or sublease if, in
Landlords reasonable business judgment, the quality of the merchandising operation of the proposed
assignee or subtenant is not equal to that of the Tenant, the use of the Premises will change, such
assignee or subtenant may adversely affect the business of other tenants or the tenant mix in the
Entire Premises or Landlords ability to obtain percentage rent, the net worth of such assignee or
subtenant is less than that of Tenant at time of execution of this Lease, or the proposed assignee
or subtenant lacks sufficient working capital to operate the business. The consent by Landlord to
any assignment or subletting shall not constitute a waiver of the necessity for such consent to any
subsequent assignment or subletting. If this Lease is assigned by Tenant, or if the Premises or any
part thereof are sublet or occupied by any person or entity other than Tenant, Landlord may collect
Rent from the assignee, subtenant or occupant, and apply the net amount collected to the Rent
herein reserved, not no such assignment, subletting, occupancy or collection shall be deemed a
waiver on the part of Landlord, or the acceptance of the assignee, subtenant or occupant as tenant,
or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant
herein contained. Irrespective of any assignment or sublease, Tenant shall remain fully liable
under this Lease and shall not be released from performing any of the terms, covenants and
conditions of this Lease. If Tenant assigns this Lease or sublets the Premises, any rent paid to
Tenant in addition to the Rent payable to Landlord as set forth in this Lease shall be paid be paid
by Tenant to Landlord as additional rent.
If Tenant is a corporation, an unincorporated association or a partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate in excess of forty-nine percent (49%) shall be deemed an assignment
within the meaning and provisions of this Section 18.01.
Tenant shall pay Landlord a non-refundable processing fee of $50.00 (increased each year by
the Index) for each requested assignment or sublease to cover Landlords costs. This fee shall
accompany any request for assignment or sublease. In addition, Tenant shall pay all costs incurred
by Landlord in connection with reviewing a request to consent to an assignment or sublease,
including all of Landlords attorneys and accountants fees.
Section 18.02. Permitted Assignment or Subletting by Franchisor.
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If Tenant is a franchisor, Tenant may assign its interest herein or sublet all or part of
the Premises once to a bona fide franchisee or licensee of Tenant without the payment of the fee
described in Section 18.01 (but subject to all other conditions contained therein), provided there
shall be no change in the use of the Premises, provided Tenant notifies Landlord in writing thirty
(30) days prior to such subletting or assignment and provided further such assignee or subtenant
meets all of Tenants then nationwide franchise requirements including payment of the applicable
standard franchise fee. Any subsequent subletting or assignment shall be subject to all the
conditions of Section 18.01, including the payment of the fee.
Section 18.03. Concessionaires.
Tenant may grant concessions for the operation of one or more departments of the business
which Tenant operates on the Premises as required by Section 10.01; provided however that (a) each
such concession may be allowed only upon receipt by Tenant of the prior written consent of the
Landlord, which consent shall not be unreasonably withheld, and shall be subject to all the terms
and provisions of this Lease; (b) the Gross Receipts, as defined in Section 4.04 hereof, from the
operation of each such concession shall be deemed to be a part of the Gross Receipts of Tenant for
the purpose of determining the Percentage Rent payable to Landlord; (c) all of the provisions
hereof applying to the business of Tenant including the provisions concerning reports and audits
shall apply to each such concession; and (d) at least seventy-five percent (75%) of the sales floor
area of the Premises shall at all times be devoted solely to the business operated by Tenant.
Section 18.04. Involuntary Assignment.
No interest of Tenant in this Lease shall be assignable by operation of law (including,
without limitation, the transfer of this Lease by testacy or intestacy). Each of the following acts
shall be considered an involuntary assignment: (a) if Tenant is or becomes bankrupt or insolvent,
makes an assignment for the benefit of creditors, or institutes a proceeding under the Bankruptcy
Act in which Tenant is bankrupt; or, if Tenant is a partnership or consists of more than one person
or entity, if any partner of the partnership or other person or entity is or becomes bankrupt or
insolvent, or makes an assignment for the benefit of creditors;
(b) if a writ of attachment or
execution is levied on this Lease; or (c) if, in any proceeding or action to which Tenant is a
party, a receiver is appointed with authority to take possession of the Premises. An involuntary
assignment shall constitute a default by Tenant, and Landlord shall have the right to elect to
terminate this Lease, in which case this Lease shall not be treated as an asset of Tenant.
ARTICLE XIX
ADVERTISING AND PROMOTION FUND
Section 19.01. Advertising and Promotion Fund.
Landlord may, from time to time, establish an advertising and promotion service designed to
furnish and maintain professional advertising and sales promotions for the benefit of all tenants
in the Entire Premises. In conjunction therewith, Landlord may establish a separate fund to be
known as the Promotion Fund, the proceeds of which are to be expended solely for advertising,
promotion, public relations designed to promote the Entire Premises and administrative expenses, at
such times and in such manner as shall be determined by Landlord.
Tenant shall not be obligated to make payments into the Promotion Fund; however, Tenant agrees
that it will conduct an annual advertising and promotional campaign of not less than $200,000 per
year.
Should Landlord elect to have a Grand Opening promotion, in addition to the above, Tenant
agrees to pay to Landlord, within thirty (30) days of Landlords billing, as its pre-opening
contribution, the sum set forth in Section 1.12 herein which is Tenants share, of Landlords
budget for funds to be expended for promotion and advertising of the Entire Premises.
Any balance remaining in the Promotion Fund at the end of any calendar year shall be carried
forward to the next calendar year to be used as provided herein.
An Advertising and Promotion Service Committee composed of a representative of Landlord, a
representative of each store exceeding a size of 25,000 square feet of floor area in the Entire
Premises, and two (2) representatives of the other tenants in the Entire Premises may be formed to
review all of the advertising activities.
Section 19.02. Advertising of Tenant.
With the exception of national or regional advertising, Tenant, at its sole expense, agrees to
refer to the Entire Premises by the name provided in Section 1.02.1, if one is so provided, in
designating the location of the Premises in all local newspapers or other advertising, stationery,
other printed material and in all other references to location, and to include the address and
identity of its business activity in the Premises in all advertisements made by Tenant for its
operation at the Entire Premises.
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ARTICLE XX
DESTRUCTION OF PREMISES
Section 20.01. Total or Partial Destruction.
If
the Premises shall be damaged by fire, the elements or other casualty or cause whether or
not insured against under the provisions of Section 16.01 and 16.03, Tenant at its own expense,
shall cause such damage to be repaired and the Premises reconstructed and restored as soon as
reasonably practical, and any Rent or other charges payable hereunder shall not be abated. Landlord
shall make any insurance proceeds available to Tenant on a reasonable basis for that purpose.
Tenant shall be responsible for the concurrent prompt repair and restoration of its furniture,
fixtures and equipment in the Premises damaged by such event. In the event that fifty
percent (50%) or more of the Premises are damaged or destroyed by fire, the elements or other
cause or casualty, Landlord shall have the right, to be exercised by written notice delivered to
Tenant within sixty (60) days from and after said occurrence, to elect not to require the Tenant to
reconstruct and repair the Premises, and in such event this Lease and the tenancy hereby created
shall cease as of the date of said damage. If Landlord electes to terminate this Lease in
accordance with this Section 20.01, all insurance proceeds, except for insurance proceeds for
Tenants fixtures, shall become the property of Landlord.
Section 20.02. Waiver of Termination.
Tenant hereby waives any statutory rights which it may have to terminate the Lease in the
event of the partial or total destruction of the Premises, if being agreed that the provisions of
this Article XX shall control.
ARTICLE XXI
EMINENT DOMAIN
Section 21.01. Total Condemnation.
If the whole of the Premises shall be acquired for any public or quasi-public use or purpose
or taken by eminent domain, then the Term shall cease and terminate as of the date possession or
title is given to such condemning authority in such proceeding and all rentals shall be paid up to
that date.
Section 21.02. Total Parking Area.
If the entire portion of the Common Area used for parking in the Entire Premises (Parking
Area) shall be acquired for any public or quasi-public use or purpose or taken by eminent domain,
then the Term shall cease and terminate as of the date possession or title is given to such
condemning authority in such proceeding unless Landlord shall provide other parking facilities
substantially equal to the previously existing ratio between the Parking Area and the Premises
within ninety (90) days from the date of such taking. In the event that Landlord shall provide such
other parking facilities, then this Lease shall continue in full force and effect without abatement
of Rent or other charges.
Section 21.03. Partial Condemnation.
If
any part of the Premises shall be acquired or taken by eminent domain for any public or
quasi-public use or purpose, and in the event that such partial
taking or condemnation shall render
the Premises, in Landlords discretion, unsuitable for the operation of Tenants business, then the
Lease shall cease and terminate as of the date possession or title is given to such condemning
authority is such proceeding. In the event of a partial taking or condemnation which is not
extensive enough to render the Premises unsuitable for the operation of Tenants business, then
Landlord shall promptly restore the Premises to the extent of the condemnation proceeds to a
condition comparable to its condition at the time of such condemnation less the portion lost in the
taking, and this Lease shall continue in full force and effect and the Minimum Rent shall be
equitably reduced based on the percentage of floor area of the Premises lost in the taking.
Section 21.04. Partial Condemnation of Parking Area.
If any part of the Parking Area shall be acquired or condemned by eminent domain for
any public or quasi-public use or purpose and if, as the result of such partial taking the
ratio of square feet of Parking Area to square feet of the sales floor area of the Entire Premises
is reduced to a ratio below that permitted by law, then the Lease shall cease and terminate from
the date possession or title is given to such condemning authority in such proceeding, unless
Landlord shall provide reasonable evidence of its ability to increase the parking ratio to a
permitted ratio or Landlord can provide substitute parking either in or outside the Entire
Premises, in which event this Lease shall be unaffected and remain in full force and effect as
between the parties.
Section 21.05. Allocation of Award.
Except as provided below, in the event of any condemnation or taking as herein provided,
whether whole or partial, Tenant shall not be entitled to any part of the award, as damages or
otherwise, for such condemnation and Landlord is to receive the full amount of such award; Tenant
expressly waives any right or claim to any part thereof, including the right or claim for the value
of the unexpired portion of the Term or diminution in value of Tenants leasehold interest, or for
the value of any option to extend the Term or renew this Lease. Tenant shall, however, have the
right, provided such award shall not diminish Landlords award, to claim and recover from the
condemning authority, but not from Landlord, such compensation as may be separately awarded or
recoverable by Tenant in Tenants own right on account of any and all damages to Tenants business
for Goodwill and loss of income by reason of the condemnation and for or on account of any cost or
less to which Tenant might incur in removing Tenants merchandise, future, fixtures and equipment
from the Premises.
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ARTICLE XXII
DEFAULT
Section 22.01. Tenants Default.
The occurrence of any of the following shall constitute a default by Tenant: (a) failure to
pay rent when due, if the failure continues for three (3) days after notice has been given to
Tenant; (b) abandonment and/or vacation of the Premises;
(c) failure to operate in the Premises
for ten (!0) consecutive days; (d) failure to perform any nonmonetary provision of this Lease if
the failure to perform is not cured within thirty (30) days after notice has bcen given to Tenant;
provided that if the nonmonetary default cannot reasonably be cured within thirty (30) days, Tenant
shall not be default of this Lease if Tenant commences to cure the default within the thirty (30)
day period and diligently and in good faith continues to cure the default; and (e) failure to
timely deliver an estoppel certificate as required by Section 17.01.
Notices given under this Section 22.01 shall not be deemed a forfeiture or a termination of
this Lease unless Landlord so elects in the notice. Notices given under this Section 22.01 shall be
in lieu of and not in addition to any statutory notice required by law.
Section 22.02. Landlords Remedies.
Landlord shall have the following remedies if Tenant commits a default. These remedies are not
exclusive; they are cumulative in addition to any remedies now or later allowed by law.
Landlord
can continue this Lease in full force and effect after Tenants default and
abandonment, and the Lease will continue in effect as long as Landlord does not terminate Tenants
right to possession, and Landlord may enforce all Landlords rights and remedies under the Lease,
including the right to collect Rent when due. During the period Tenant is in default, Landlord can
enter the Premises and relet them, or any part of them, to third parties for Tenants account.
Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, without limitation, brokers commissions, expenses of remodeling the Premises
required by the reletting, and like costs. Reletting can be for a period shorter or longer than the
remaining Term of this Lease. Tenant shall pay to Landlord the Rent due under this Lease on the
dates the Rent is due, less the rent Landlord receives from any reletting. No act allowed by this
Section 22.02 shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to
terminate this Lease.
If Landlord elects to relet the Premises as provided in this Section 22.02, Rent that Landlord
receives from reletting shall be applied to the payment of: first, any indebtedness from Tenant to
Landlord other than Rent due from Tenant; second, all costs, including maintenance, incurred by
Landlord in reletting; and third, Rent due and unpaid under this Lease. After deducting the
payments referred to in this Section, any sum remaining from the Rent
Landlord receives from
reletting shall be held by Landlord and applied in payment of future Rent as Rent becomes due under
this Lease. In no event shall Tenant be entitled to any excess Rent received by Landlord. If, on
the date Rent is due under this Lease, the Rent received from the reletting is less than the Rent
due on that date, Tenant shall pay to Landlord, in addition to the
remaining Rent due, all costs,
including maintenance, Landlord incurred in reletting that remain after applying the Rent received
from the reletting as provided in this Section 22.02.
Landlord can terminate Tenants right to possession of the Premises at any time. No act by
Landlord other than giving notice to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises or the appointment of a receiver on Landlords initiative to protect
Landlords interest under this Lease shall not constitute a termination of Tenants right to
possession. On termination, Landlord has the right to recover from Tenant: (a) the worth, at the
time of the award, of the unpaid rent that had been earned at the time of termination of this
Lease; (b) 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; and (d) any other
amount, and court costs, necessary to compensate Landlord for all detriment proximately caused by
Tenants default. The worth, at the time of the award, as used in (a) and (b) of this Section
22.02, is to be computed by allowing interest at the maximum rate an individual is permitted by law
to charge. The worth, at the time of the award, as referred to in (c) of this Section 22.02, 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%).
Section 22.03. Appointment of Receiver.
If Tenant is in default of this Lease, Landlord shall have the right to have a receiver
appointed to collect Rent and conduct Tenants business. 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.
Section 22.04. Landlords Right to Cure Tenants Default.
Landlord, at any time after Tenant commits a default, can cure the default at Tenants
cost. If Landlord at any time, by reason of Tenants default, pays any sum or does any act
that requires the payment of any sum, the sum paid by Landlord shall be due immediately from Tenant
to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the
maximum rate an individual is permitted by law to charge from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be additional
rent.
Section 22.05. Waiver of Rights of Redemption.
Tenant expressly waives any and all rights of redemption granted by or under any present
or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event
of Landlord obtaining possession
7/18/97
17
of the Premises, by reason of the violation by Tenant of any of the covenants or conditions of
this Lease, or otherwise.
Section 22.06. Default by Landlord.
If Landlord fails to perform any of the covenants or conditions required on its part to be
performed pursuant to this Lease, where such failure continues for a period of thirty (30) days
after receipt of written notice specifying the nature and extent of such default in detail
(provided, however, that if such default is of a nature that it cannot reasonably be cured within
thirty (30) day period). Landlord shall be liable to Tenant for all damages sustained as a direct
result of such breach, subject to the additional rights of any mortgagees of Landlord as provided
in Section 17.04 herein. Landlords liability shall be limited to Landlords interest in the Entire
Premises. Neither Landlord nor any of its partners shall be personally liable.
ARTICLE XXIII
SUCCESSORS; SALE OF PREMISES
Section 23.01. Successors and Assigns.
Except as provided in Section 18.05, all rights and liabilities herein given to, or imposed
upon, the respective parties hereto shall extend to and bind the several respective heirs,
executors, administrators, successors, and assigns of said parties; and if there shall be more than
one tenant, they shall all be bound jointly and severally by the terms, covenants and agreements
herein. No rights, however, shall inure to the benefit of any assignee of Tenant unless the
assignment to such assignee has been approved by Landlord in writing as provided in Section 18.01
hereof.
Section 23.02. Sale of Premises.
In the event Landlord shall sell, convey, transfer or exchange the Premises, thc Entire
Premises or the Building, Tenant agrees to recognize and attorn to the purchaser or transferee, as
the Landlord hereunder and Landlord shall be and is hereby relieved and released from any liability
under any and all of its covenants and obligations under the Lease arising out of any act,
occurrence or event arising after such sale, conveyance, transfer or exchange.
ARTICLE XXIV
QUIET ENJOYMENT
Section 24.01. Landlords Covenant.
Upon timely payment by Tenant of the Rent, and upon the observance and performance of all of
the covenants, terms and conditions on Tenants part to be observed and performed hereunder, Tenant
shall peaceably and quietly hold and enjoy the Premises for the Term without unreasonable hindrance
or interruption by Landlord or any other person or persons lawfully or equitably claiming by,
through or under the Landlord, subject, nevertheless, to the terms and conditions of this Lease.
Landlord may subject its interest in the Premises to a Lien or Mortgage provided, the lienholdcr
furnishes Tenant with a Subordination, Attornment and Non-Disturbance Agreement.
ARTICLE XXV
MISCELLANEOUS
Section 25.01. Index.
Whenever in this Lease there is a reference to the Index, such reference shall refer to the
following:
(a) The Index as used in this Lease shall be deemed to mean The United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban
Consumers, U,S. City Average, Subgroup All items, (1982-84 = 100) (the Index). If at
any time there shall not exist the Index in the format recited herein, Landlord shall
substitute any official index published by the Bureau of Labor Statistics or successor or
similar substitute any office index published by the Bureau of Labor Statistics, or
successor or similar governmental agency, as may then be in existence and shall, in
Landlords opinion, be most nearly equivalent thereto.
(b) The sum to be increased in accordance with the provisions of the Index shall be
increased using the following formula: Such sum shall be increased by a percentage equal to
the percentage increase, if any, in the Index published for the Comparison Month over the
Index published for the Base Month; provided, however, in no event shall said sum be less
than that which was due immediately preceding the date of adjustment. If no Comparison
Month or Base Month shall be specified, the Comparison Month shall be three (3) months
prior to the anniversary of the Rent Commencement Date for the year of the increase, and
the Base Month shall be three (3) months prior to the Rent Commencement Date.
Section 25.12. Waiver.
No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein
stipulated shall not be deemed to be a waiver of any other default, term, covenant or condition
concerning the same. No delay or omission in the exercise of any right or remedy of Landlord shall
impair such a right or remedy or be construed as a waiver. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any
7/18/97
18
preceding breach by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted,
regardless of Landlords knowledge of
such preceding breach at the time of acceptance of such Rent.
Section 25.03. Accord and Satisfaction.
No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein
stipulated shall be deemed to be other than on account of the earliest stipulated Rent, nor shall
any endorsement or statement on any check or any letter accompanying any check or payment as Rent
be deemed an accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlords right to recover the balance of such
Rent or pursue any other remedy in
this Lease.
Section 25.04. Entire Agreement.
This Lease and the Exhibits attached hereto and forming a part hereof, set forth all the
representations, covenants, promises, agreements, conditions and understandings between Landlord
and Tenant concerning the Premises and there are no representations, covenants, promises,
agreements, conditions or understandings, either oral or written,
between them other than are
herein set forth. Any subsequent alteration, amendment, change or addition to this Lease must be in
writing, signed by Landlord and Tenant.
Section 25.05. No Partnership.
Landlord does not, in any way or for any purpose, become a partner of Tenant in the
conduct of its business, or otherwise, or joint venture or a member of a joint enterprise with
Tenant by reason of this Lease. The provisions of this Lease relating to the Percentage Rent
payable hereunder are included solely for the purposes of providing a method whereby Rent is to be
measured and ascertained.
Section 25.06.
Force Majeure.
In
the event that either party hereto shall be delayed or hindered in or prevented from
the performance of any act required hereunder by reason of strikes, lock-outs, labor troubles,
inability to procure materials, failure of power, governmental
moratorium, riots, insurrection, war
or other reason of a like nature not the fault of the party delaying in performing work or doing
acts required under the terms of this Lease (but excluding delays due to financial inability), then
performance of such act shall be excused for the period of such delay. The provisions of this
Section 25.06 shall not operate or excuse Tenant from the prompt
payment of Minimum Rent,
Percentage Rent, additional rent or any other payments required by the terms of this Lease.
Section 25.07. Holding Over.
Any holding over after the expiration of the Term, with or without the consent of the
Landlord, shall be construed to be a tenancy from month to month at a rent specified by Landlord
in its sole discretion, which rent shall never be less than the then prevailing market rate for the
Entire Premises (as determined solely by Landlord) and shall otherwise be on the terms and
conditions herein specified, as far as applicable.
Section 25.08. Notices.
All notices hereunder must be served personally or by certified or registered mail, postage
prepaid, addressed to Tenant and to Landlord at the address given below or at such other address as
Landlord or Tenant may designate by written notice pursuant to this Section 25.08. Any notice given
by mail shall be deemed given forty-eight (48) hours after deposit in the mail.
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Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn.: Real Estate Department
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Tenant:
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Century Theatres, Inc.
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn.: Legal Department
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Section 25.09. Captions and Section Numbers.
The captions, section numbers, article numbers, and index appearing in this Lease are inserted
only as a matter of convenience and in no way define, limit, construe, or describe the scope or
intent of such sections or articles of this Lease nor in any way affect this Lease.
Section 25.10. Tenant Defined, Use of Pronoun.
The word Tenant means each and every person or party mentioned as a Tenant herein, be
the same one or more; and if there shall be more than one Tenant, any notice required or permitted
by the terms of this Lease may be given by or to any one thereof, and shall have the same force and
effect as if given by or to all thereof. The persons signing as Tenant shall be jointly and
severally liable. The use of the neuter singular pronoun to refer to Landlord or Tenant shall be
deemed a proper reference even though Landlord or Tenant may be an individual, a partnership, a
corporation, or a group of two or more individuals or corporations. The necessary grammatical
changes required to make the provisions of this Lease apply in the plural sense where there is more
than one
Landlord or Tenant and to either corporations, associations, partnerships, or individuals,
males or females, shall in all instances be assumed as though in each
case fully expressed.
Section 25.11. Partial Invalidity.
If any term, covenant or condition of this Lease or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant
or condition of this Lease shall be valid and enforced to the fullest extent permitted by law.
Section 25.12. No Option.
The submission of this Lease for examination does not constitute a reservation of or option
for the Premises and this Lease becomes effective as a Lease only upon execution and delivery
thereof by Landlord to Tenant.
Section 25.13. Recording.
Tenant shall not record this Lease or a memorandum thereof.
Section 25.14. Legal Expenses.
In the event that any time during the Term either Landlord or Tenant shall institute any
action or proceeding against the other relating to the provisions of this Lease, or any default
hereunder, or engage an attorney to enforce such provision then, and in that event, the
unsuccessful party in such action or proceeding agrees to reimburse the successful party for the
actual expenses of attorneys fees and disbursements incurred therein by the successful party.
The successful party in such suit shall be entitled to its costs of suit and actual attorneys
fees whether or not such action is prosecuted to judgment. Successful party within the meaning of
this Section 25.14 shall include, without limitation, a party who brings an action against the
other or who defends against an action brought by the other and whose position is substantially
upheld.
Section 25.15. Rights Cumulative.
The rights and remedies of Landlord specified in this Lease shall be cumulative and in
addition to any other rights and remedies provided by law.
Section 25.16. Authority.
If Tenant is a corporation or partnership, each individual executing this Lease on behalf of
such entity represents or warrants that he or she is duly authorized to execute and deliver this
Lease on behalf of such entity and that such entity shall be bound by all the terms and provisions
hereof.
Section 25.17. Mortgage Changes.
Tenant shall not unreasonably withhold its consent to changes or amendments to this Lease
requested by the holder of any mortgage or deed of trust covering Landlords interest in the
Premises so long as such changes do not materially alter the economic terms of this Lease or
otherwise materially diminish the rights or materially increase the obligations of Tenant
hereunder.
Section 25.18. Time of the Essence.
Time
is of the essence in each and every, provision of this Lease except for delivery of
possession of the Premises as set forth herein.
Executed as of the date first written above.
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LANDLORD: SYUFY
ENTERPRISES, A
CALIFORNIA LIMITED PARTNERSHIP:
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/s/ Raymond Syufy
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TENANT:
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CENTURY THEATRES, INC.
DELAWARE CORPORATION
/s/ Joseph Syufy
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20
EXHIBIT
10.28(a)
LEASE
Table of Contents
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Page No.
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RECITALS
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1
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ARTICLE I EXHIBITS DEFINITIONS
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1
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II PREMISES TERM OPTIONS -COVENANT OF TITLE
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2
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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3
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title; Authority and Quiet Possession; Transfer of Title
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3
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ARTICLE
III USE OF PREMISES
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4
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3.01 Use
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4
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ARTICLE IV RENT
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4
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4.01 Annual Fixed Rent
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4
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4.02 Percentage Rent
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5
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4.03 Rent
Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V TAXES, ASSESSMENTS AND UTILITIES
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6
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5.01 Impositions
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6
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.03 Contest of Taxes
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6
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5.04 Utilities
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7
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5.05 Personal Property Taxes
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7
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ARTICLE VI INSURANCE
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7
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i
LEASE
Table of Contents
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Page No.
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6 03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held in Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII MAINTENANCE, REPAIRS AND ALTERATIONS
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9
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7.01 Alterations -Changes
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10
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7.02 Repairs Maintenance
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10
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ARTICLE VIII ENVIRONMENTAL MATTERS
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10
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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11
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8.03 Remedial Work
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12
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8.04 Maintenance of Premises
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13
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8.05
Landlords Responsibilities and Tenants Indemnity
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13
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8.06 Landlord Inspection
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14
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8.07 Effect of Termination
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14
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ARTICLE IX IMPROVEMENTS
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14
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9.01 Tenant Improvements
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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15
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9.04 Ownership of Improvements
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15
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9.05 Control.
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15
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ARTICLE X INDEMNITY
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15
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ii
LEASE
Table of Contents
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Page No.
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10.01
Landlords Indemnity
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15
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10.02 Tenants Indemnity
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16
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ARTICLE XI ASSIGNMENT AND SUBLETTING
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16
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11.01 Assignment and Subletting
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16
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11.02 Notice to Landlord
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16
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ARTICLE XII MORTGAGE SUBORDINATION
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16
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12
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01 Existing Mortgages
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16
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12.02 Future Mortgages
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17
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ARTICLE XIII CONDEMNATION EMINENT DOMAIN
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17
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13.01 Definitions
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17
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13.02 Notice to Other Party
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17
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13.03 Total Taking Effect on Rent and Term
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18
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13.04 Distribution of Award for Taking
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18
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13.05 Partial Taking Rent Adjustments
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18
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13.06
Partial Taking Option to Terminate
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18
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13.07 Separate Tenants Award
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18
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ARTICLE XIV DEFAULT
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18
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14.01 Tenants Default
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18
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14.02 Landlords Remedies Cumulative
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19
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14.03 Landlords Default
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20
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14.04 Waiver of Redemption
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20
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14.05 Dispute Resolution
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21
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14.06 Attorneys Fees
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21
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ARTICLE XV REPRESENTATIONS AND WARRANTIES
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21
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15.07 Landlords Representations and Warranties
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21
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15.02 Tenants Representations and Warranties
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Table of Contents
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Page No.
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ARTICLE XVI DAMAGE OR DESTRUCTION
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16.01 Repairs, Alterations and Further Improvements
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16.02 Prompt Repair
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23
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16.03 Rent Adjustment
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16.04 Damage During Last Two (2) Years of Term
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23
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ARTICLE XVII MISCELLANEOUS
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23
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17.01 Limitation on Liability
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23
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17.02 Brokers
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24
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17.03 Modification
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24
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17.04 Severability
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24
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17.05 Governing Law
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24
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17.06 Terminology
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24
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17.07 Counterparts
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24
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17.08 Binding Effect
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24
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17.09 Captions
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24
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17.10 Notices to Landlord and Tenant
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17.11 Addresses for Notices to Landlord and Tenant
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17.12 Entire Agreement
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25
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17.13 Sale or Transfer of Premises
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25
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17.14 Force Majeure
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17.15 Waiver
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17.16 Estoppel Certificate
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17.17 Number and Gender
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17.18 No Holding Over
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17.19 Mechanics Liens
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17.20 Relationship of Parties
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17.21 Time of the Essence
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17.22 Facsimile Copies
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27
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Table of Contents
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Page No.
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17.23 Anti-Merger
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SIGNATURE PAGE
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Exhibit A A Description of Entire Premises
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Exhibit B A Site Plan of Entire Premises
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Exhibit C Form of Memorandum of Lease
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v
LEASE
THIS
INDENTURE OF LEASE, dated and effective as of July 1, 1996, by and between
SYNM
PROPERTIES, INC.,
a New Mexico Corporation with an office at 150 Golden Gate Ave., San Francisco,
CA, hereinafter called Landlord, and
CENTURY THEATRES, INC.,
a Delaware corporation with an
office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in a parcel of land described on Exhibit A
attached hereto.
Landlord and Tenant wish to provide for the lease by Landlord to
Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as
follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the tract of land hereinafter referred to as Entire Premises.
EXHIBIT B a site plan of the Entire Premises showing the location of the Tenants Building,
outlined in red.
EXHIBIT C Form of Memorandum of Lease
1.02 Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date and Rent Commencement Date shall mean the date which is the
earlier of (i) nine months after Tenant has secured a building permit for construction of Tenants
building or (ii) the date on which Tenant opens for business in the Premises.
The term Common Facilities or Common Areas shall include the parking areas, streets,
driveways, curb cuts, access facilities, aisles, sidewalks, malls, landscaped areas, and other
common and service areas within the Entire Premises with the improvements thereon, whether or not
shown on Exhibit B.
The term Default Rate shall mean the Ten percent (10%).
The term Entire Premises shall mean the tract of land described on Exhibit
B.
The term Initial Term is defined in Section 2.02 herein.
1
The term Leased Premises or Premises shall mean Tenants Building outlined in red
on Exhibit B and the land thereunder and the rights, easements and privileges granted to Tenant in
this Lease.
The term Mortgage shall mean any mortgage or deed of trust or other instrument in the nature
thereof evidencing a security interest in the Entire Premises or any part thereof.
The
term Number of Term Years shall mean 20 years.
The
term Option Periods shall mean two (2) successive separate
periods of five (5) years each and one (1) successive period of
four (4) years.
The
term Percentage Rate shall mean three and half percent
(3.5%).
The term Planned Use shall mean the construction and operation of a motion picture theatre,
and for such activities in connection therewith as are customary and usual at other motion picture
theatres operated by Tenant including, without limitation, the operation of vending machines and
video games; operation of concession stands; sale of movie related T-shirts, toys and memorabilia,
rentals of auditoriums to third parties and other such activities on the Premises.
The term Prime Rate shall be the per annum interest rate from time to time publicly
announced by Citibank, N.A., New York, New York as its base rate. The Prime 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 Tenants Building shall mean the building to be erected by Tenant at Tenants sole
cost..
The
term term of this Lease or term hereof shall mean the initial term, as provided in the
article captioned Term and any renewal or extensions thereof.
ARTICLE II
PREMISES TERM OPTIONS COVENANT OF TITLE
2.01 Lease of Premises.
A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms and
conditions contained herein.
B) The Premises are being leased in their as is condition subject to Article VIII herein
captioned Environmental Matters.
C) Landlord shall deliver possession of the Premises to Tenant on the Effective
Date.
D) During the Lease Term, Landlord grants to Tenant and its employees, agents, customers and
other invitees a non-exclusive easement for free parking and ingress and egress on and over the
Entire Premises for Tenant, Tenants employees, agents, contractors, customers and invitees.
Tenant shall be responsible for all costs associated with the Entire Premises exclusive of any
Landlords Buildings that may be constructed thereon. The location of said easements may be
changed at the sole discretion of the Landlord so long as such change does not interfere with
Tenants Permitted Use.
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2.02 Term of Lease.
Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
The
Initial Term of this Lease shall begin on the
Commencement Date and shall terminate twenty (20) years thereafter and shall
terminate on the last day of the calendar month during which the
date which is twenty (20) years after the Commencement Date occurs. References
herein to the Lease Term shall mean the Initial Term of this Lease or the Initial Term as extended under Section 2.02.
2.03 Option to Extend Lease Term.
A)
Tenant may, at Tenants option, extend the Initial Term of this
Lease for up to two (2) consecutive additional periods of five
(5) years each and one (1) additional
period of four (4) years (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) Tenants right to the options to extend the Lease Term and Tenants rights to the Renewal
Term are subject to:
(1) This Lease being in full force and effect on the last day of the Initial Term or the then
current Renewal Term, as applicable.
(2) Compliance with the following procedure for exercising the option in question:
(a) At least nine (9) months before the last day of the
Initial
Term, or the then current Renewal Term, as the case may be, Tenant shall give Landlord written
notice exercising the option.
(b) Each party shall, at the request of the other, execute a
memorandum acknowledging the fact that the option in question has been exercised. If an option is
properly exercised by Tenant, the failure of Landlord to execute such memorandum shall not
invalidate such option or the exercise thereof.
(3) Tenant is not in default (meaning the breach of any obligation hereunder and failure to
cure that breach within the time permitted in Section 14.01) at time of the exercise of the renewal
and at the commencement of the renewal term.
2.04 Covenant of Title; Authority and Quiet Possession: Transfer of Title.
(A) Landlord represents and warrants to Tenant that Landlord has full right and lawful
authority to enter into and perform Landlords obligations under this Lease for the term hereof,
and has good an marketable title to the Entire Premises in fee simple.
(B) Maintenance of Entire Premises At all times during the Term, Tenant shall keep and
maintain the Exterior Common Facilities in the Entire Premises and Tenants Building in good order
and repair and in a clean and safe condition, reasonably free of debris. The lighting for the
Exterior Common Facilities shall be turned on by Tenant on each day that business is conducted on
the Premises at or about the
3
same time that the municipality turns on street lights, and same shall be kept lighted for
one (1) hour after all Tenants close for business. Tenants obligation hereunder shall include
maintaining the parking areas of the Entire Premises free of potholes and assuring that they are
properly coated and sealed and striped as needed. Tenant shall make any and all additions to and
all alterations and repairs in, on and about the Exterior Common Facilities, which may be required
by, and shall otherwise observe and comply with, all public laws, ordinances and regulations from
time to time applicable to the Exterior Common Facilities. Tenant shall indemnify and save harmless
Landlord and any and all other Landlords tenants from and against all actions, claims and damages
by reason of Tenants failure to comply with and perform its obligations under this section.
(C) Tenants Liens Tenant will not permit the Entire Premises to become subject to any
mechanics, laborers or materialmens lien on account of labor or material furnished to Tenant or
claimed to have been furnished to Tenant in connection with work of any character performed or
claimed to have been performed on the Entire Premises by or at the direction or sufferance of
Tenant; provided, however, Tenant shall have the right to contest in good faith and with
reasonable diligence the validity of any such lien or claimed lien and on final determination of
the lien or claim for the lien, Tenant will immediately pay any judgment rendered with all proper
costs and charges, and will, at its own expense, have the lien released and any judgment
satisfied.
ARTICLE III
USE OF PREMISES
3.01
Use.
A) The Premises may be used for the Planned Use no other purpose.
B) Landlord shall agree and consent to such utility and other easements encumbering the Entire
Premises or benefiting the Entire Premises as Tenant may reasonably require for its use and
occupancy of the Premises.
C) Landlord agrees that no use of the Entire Premises shall be permitted which is inconsistent
with the operation of the Planned Use. Landlord further agrees not to permit or allow any portion
of the Entire Premises to be used by any other tenant, subtenant, licensee, or occupant (including
Landlord) for the exhibition of commercial movies or as a commercial movie theater complex.
ARTICLE IV
RENT
4.01 Annual Fixed Rent.
A) Beginning on the Rent Commencement Date, Tenant shall pay to Landlord during the Lease Term
Annual Fixed Rent in the amount of four hundred thousand $400,000.00
dollars. The Annual Fixed Rent shall
be payable in advance in twelve equal monthly installments. The Annual
Fixed Rent 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 Annual Fixed Rent shall apply from the Rent Commencement Date through the end of the
fifth (5th) Lease Year of the Term. The Annual Fixed Rent shall be increased 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 an amount that is twelve and one half (12.5%) percent greater than the
Annual Fixed Rent payable immediately before the Adjustment date in question.
4.02 Percentage Rent.
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In addition to the payment of Annual Fixed Rent, Tenant shall pay to Landlord for each Lease
Year during the Term of this Lease, as Percentage Rent a sum equal to
the amount by which three and one half (3.5%) percent of the Gross Sales for such Lease Year exceeds the Annual Fixed 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. For the purpose of computing the Annual Percentage for the first Lease
Year, the Gross sales and the annual fixed rate percentage for the partial calendar month, if any,
preceding the first Lease Year shall be includable in the Annual Fixed Rate and Gross Sales for the
first Lease Year.
Gross Sales shall mean all box office receipts, and receipts from sales of goods,
merchandise, beverages, food, vending machines and video games. Gross Sales shall exclude credits
and refunds made with respect to admissions or other sales; all federal, state, county and city
admission taxes, sales taxes and other similar taxes now or hereafter imposed whether such taxes
are collected from customers separately from the selling price of admission tickets or absorbed
therein, and actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or Pass Admissions including EBF charges on Pass Admissions. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental
of vending machines, pay telephones or other amusement machines shall be deducted from Gross
Sales.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
officer of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with
the delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales .
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If
it is determined as a result of such audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due any payable with interest at
the annual rate of eighteen (18%) percent from the date when said payment should have been made
until paid. Any information gained from such statements or inspection shall be confidential and
shall not be disclosed other than to carry out the purposes hereof.
4.03 Rent Payments.
Rent and other sums to be paid by Tenant shall be payable in lawful money
of the United States of America. All payments shall be made by Tenant to Landlord without notice or
demand.
4.04 Place for Payment of Rent.
The Annual Rent and any other charges required to be paid by
Tenant to Landlord shall be sent to Landlord at its principal place of business, or such other
address as Landlord may direct in writing.
4.05 Late Payment of Rent.
In the event that any monthly installment of rent is not paid within
ten (10) days after such payment is past due, Tenant shall pay Landlord interest on such unpaid
rent at the rate of ten (10%) per annum computed from the date such rent installment was due until
the date actually paid.
ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES
5.01 Impositions.
A) The term Impositions shall mean all real estate taxes, duties or assessments
(special or otherwise), water and sewer rents, whether ordinary or extraordinary, general or
special, foreseen or unforeseen, of any kind and nature whatsoever, which, at any time during the
Lease Term, shall be assessed or levied, or be attributable in any manner to the Entire Premises,
or the rents receivable therefrom, or any part thereof or any use thereon or any facility located
therein or used in connection therewith, whether or not any of
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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 Landlords
predecessors in title or any other person occurring prior to the commencement of the Term. From and
after the Initial Rent Due Date, Tenant shall pay when due all Impositions (exclusive of Landlords
Buildings, if any) assessed, levied or attributable to the Entire Premises and/or the Improvements
on the Entire Premises (exclusive of Landlords Buildings, if any).. All Impositions or
installments thereof payable with respect to the tax year in which this Lease shall commence, and
all Impositions or installments thereof with respect to the tax year in which this Lease shall
terminate, shall be pro-rated on a daily basis; provided, however, that assessments or escape
assessments assessed as a result of this Lease and/or the construction of Tenant Improvements by
Tenant shall not be prorated and shall be paid solely by Tenant; and provided further that
assessments attributable to Tenant Improvements made in the final year of the Lease shall be paid
solely by Tenant if Tenant demolishes the Tenant Building.
B) In the event Tenant fails to pay such real property taxes as provided herein, Landlord may,
but shall not be required to, pay the same, and any amount so paid by Landlord shall immediately
thereafter become due to Landlord from Tenant as Additional Rent with interest thereon at the rate
of 18% per annum from the date of Landlords payment plus any fine, penalty, interest or cost which
is levied by the taxing authority for such late payment.
C) Landlord will pay, before the last day on which payment may be made without penalty or
interest, all Impositions which shall be levied against Landlords Buildings, if any.
5.02
Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance,
succession, capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord,
nor shall any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the 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 Landlords only income, as
the case may be.
5.03 Contest of Taxes.
Tenant at its sole cost and expense may by appropriate legal
proceedings conducted in good faith and with due diligence, contest the amount or validity or
application, in whole or in part, of any Imposition or lien therefor, or any other lien,
encumbrance or charge against the Premises arising from work done or materials provided to or for
Tenant. Tenant shall give Landlord reasonable notice of, and information pertaining to, such
contest and regular progress reports with respect thereto. Landlord shall cooperate with any
effort pursued by Tenant in accordance with this Section 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.03.
5.04
Utilities.
Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Entire Premises
exclusive of Landlords
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Buildings, if any. Any utility improvements presently serving the Entire Premises shall be
maintained, repaired and replaced by Tenant, at Tenants expense.
5.05 Personal Property Taxes.
During the term of this Lease, Tenant shall pay before
delinquency any and all personal property taxes levied or assessed against any personal property
located upon the Premises. If Tenant fails to timely pay such taxes and a lien is filed against the
Premises, Landlord may discharge such lien, if Tenant fails to discharge such lien within ten (10)
days following Tenants 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 Entire Premises,
Premises, Common Area and the appurtenances thereto, including the sidewalks and alleyways adjacent
thereto, with limits of liability no less than Five Million Dollars ($5,000,000) per occurrence
and in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep
Tenants Building (excluding foundations, footings and underground improvements) as well as any and
all improvements on the Common Area and personal property insured in the name of Landlord and
Tenant against damage or destruction by fire and the perils commonly covered under the extended
coverage endorsement (with vandalism and malicious mischief coverage) including Builders Risk
including earthquake to the extent of not less than 100% of the full replacement cost thereof less
any deductible applicable to all of Tenants 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 Landlords consent, which consent is not to be unreasonably withheld or
delayed. The proceeds of such insurance in case of loss or damage shall be held in trust and
applied on account of the obligation of Tenant to repair and/or rebuild the Leased Premises
pursuant to the Article captioned Damage Clause to the extent that such proceeds are required for
such purpose. The insurance required to be carried by Tenant under this paragraph may be covered
under a so-called blanket policy covering other operations of Tenant and its affiliates. Upon
written request, Tenant shall name Landlord and any parties requested by Landlord and the holder of
the first mortgage on Tenants Building pursuant to a standard mortgage clause with respect to the
foregoing hazard insurance, provided such holder agrees with Tenant in writing to disburse such
insurance proceeds to Landlord for, and periodically during the course of, repair and restoration
of Tenants 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.
7
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 Landlords Acquisition of Insurance.
If Tenant at any time during the Term fails to
procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord shall
have the right to procure the same and to pay any and all premiums thereon, and any amounts paid by
Landlord in connection with the acquisition of insurance shall be immediately due and payable as
additional rent, and Tenant shall pay to Landlord upon demand the full amount so paid and expended
by Landlord. Any policies of insurance obtained by Landlord covering physical damage to the
Premises shall contain a waiver of subrogation against Tenant if and to the extent such waiver is
obtainable and if Tenant pays to Landlord on demand the additional costs, if any, incurred in
obtaining such waiver.
6.05 Insurance Money and Other Funds Held in Trust.
All insurance money or proceeds received
by the Tenant and/or Landlord shall be held in trust by Landlord and, except as provided otherwise
in Section 6.06, shall be applied as follows:
First, for the purpose of defraying the cost of repairing, restoring, replacing and/or
rebuilding any structure or improvement on or in the Premises as required as provided in Section
6.06 hereof; and Second, if the damaged or destroyed structure or improvement is not repaired,
restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed of as provided
in Section 6.06. Any of said funds in the hands of the Tenant at the end of the Term hereof shall
be disposed of as set forth in Section 6.06 (A).
6.06 Application or Proceeds of Physical Damage Insurance.
In case of any insurance
policies as described in Section 6.02 (B) (Physical Property Damage Insurance) the application of
insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article XVI hereof and, in the event of any such repair, replacement, restoration or rebuilding,
the Tenant and Landlord shall apply the proceeds of the insurance collected to the cost of such
work upon certificate of satisfactory progress and/or completion in form satisfactory to Tenant and
Landlord by the licensed architect or engineer in charge of the work. Any amounts payable to
Tenant or any Affiliate of Tenant for work or services performed or materials provided as part of
any such repair, replacement, restoration or rebuilding shall not exceed competitive rates for such
services or materials and Tenant shall, upon request of Landlord, make available to Landlord and
its representatives all books and records of Tenant relating to such work, services and materials.
Upon completion of such repair, replacement, restoration or rebuilding in accordance with the
provisions of this Lease, and the full payment therefor (so no liens, encumbrances or claims with
respect thereto can be asserted against the Premises, this Lease, Landlord or Tenant), any
insurance proceeds received by the Tenant or Landlord with respect to the damage or destruction
involved, and not used, shall be and remain the property of Landlord.
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such insurance
proceeds or condemnation awards received and held by the Tenant and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(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.
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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 partys 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 Tenants Building or land
or improvements adjoining the Premises owned or leased by Landlord shall (if it can be so written
and does not result in a material additional premium) include provisions denying to the insurer
subrogation rights against the other party and any fee or leasehold mortgage to the extent such
rights have been waived by the insured prior to the occurrence of damage or loss. If the waiver of
subrogation otherwise is not effective, each party covenants that it will obtain for the benefit of
the other party an express waiver of any right of subrogation which the insurer of such party may
acquire against the other party by virtue of the payment of any such loss covered by such
insurance. In the event either party is by law, statute, governmental regulation, economically
unleasable or other factor beyond such partys 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 AlterationsChanges.
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 Landlords written approval shall be
first obtained, which approval shall not be unreasonably withheld.
B) Tenant shall at all times keep the Entire Premises, Premises or any part thereof, free and
clear of all liens and claims for labor or material and free and clear of all attachments,
executions and notices.
(C) Upon termination of this Lease, Tenant may, at its option, remove any personal property
and trade fixtures including, but not limited to theatre seats, projection and sound equipment,
snack bar equipment and computers.
7.02 RepairsMaintenance.
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A) Tenant shall, at its sole cost and expense, maintain and repair the Entire Premises and
Tenants Building and all improvements on the Entire Premises exclusive of Landlords Buildings if
any and including all exterior lighting and signs.
B) Tenant shall also be responsible for any losses or damages resulting to Landlords
Buildings, if any from any materials, substances or liquids which are leaked or discharged from
any area outside Landlords Buildings, if any, unless such leakage or discharge is caused by
Landlord or Landlords agents or employees.
Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlords request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such
payment has been made.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01 Definition.
For purposes of this Article VIM, 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 Tenants 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
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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 Tenants (or its agents, employees, contractors or
invitees) acts or omissions brought upon, stored, used, generated or released into the environment
by Tenant, its agents, employees, contractors or invitees (referred to as Tenants 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
Tenants 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
Tenants 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 Tenants 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 Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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
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settlement agreement, consent decree or other compromise with any governmental agency with respect
to any Hazardous Materials claims; provided, however, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work.
In the event any investigation or monitoring of site conditions or any clean-up, containment, restoration, removal or other remedial work (Remedial Work) is required (a)
under any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants Environmental Acts,
then, Landlord, at Landlords 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
partys 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 Landlords 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 Tenants 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 Landlords 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.
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8.05 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released into the environment or disposed of, on, in, under or about the Entire
Premises, the Common Area, or any other portion of the Premises by Landlord, its agents, employees,
tenants, contractors or invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants business. All sums reasonably
disbursed, deposited or
13
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 Tenants knowledge, Tenant is in default of any
provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenant Improvements.
Tenant at its sole cost and expense shall complete all the required
on-site and off-site improvements, including all signs, required for the development of the Entire
Premises. In addition Tenant shall construct a motion picture theater building on the Premises
containing approximately ninety-six thousand two hundred ninety (96,290) square feet with
twenty-four auditoriums.
9.02 Hold Harmless.
Except to the extent attributable to the intentional or negligent acts
or omissions of Landlord or Landlords agents, employees, contractors, tenants, or invitees, Tenant
shall indemnify, protect, defend and hold harmless Landlord and the Premises from and against all
claims and liabilities arising by virtue of or relating to construction of by Tenant of Tenants
Building or Improvements or repairs made at any time to the Premises including repairs, restoration
and rebuilding and all other activities of Tenant on or with respect to the Premises. If Tenant is
required to defend any action or proceeding pursuant to this Section to which action or proceeding
Landlord is made a party, Landlord shall also be entitled to appear, defend, or otherwise take part
in the matter involved, at its election, by counsel of its own choosing, and to the extent Landlord
is indemnified under this Section, Tenant shall bear the cost of Landlords defense, including
attorneys fees; provided, however, Tenant shall be liable for attorneys fees only if single legal
counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant without there
arising an actual or potential conflict of interests.
9.03 Permits: Compliance With Codes.
All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all governmental
authorities having jurisdiction. Tenant shall cause all work on the Premises during the Term to be
performed in accordance with all applicable laws and all directions and regulations of all
governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership of Improvements.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein excluding moveable trade fixtures and personal property of Tenant,
shall become the property of Landlord, unless and to the extent Tenant to removes any of the
foregoing pursuant to Section 9.04 (B).
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B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord provided Tenant replaces
all items removed with items of similar quality or better quality and the foregoing shall remain
the property of the Tenant at the expiration or earlier termination of the Lease. In addition,
Landlord shall have the right if Landlord so elects by giving written notice to Tenant of such
election at any time before ninety (90) days prior to the end of the Term (including any renewals
or extensions) hereof to remove at Tenants sole cost any other Improvements and all additions,
alterations and improvements thereto or replacements thereof erected, constructed, or installed on
the Premises. The removal of any of the foregoing shall be completed within thirty (30) days
following the end of the Term hereof (including any renewals thereof or any earlier termination
permitted by this Lease.
9.05 Control.
Notwithstanding anything to the contrary in this Lease, during the
Term of this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01 Landlords Indemnity.
Except to the extent attributable to the intentional and negligent
acts or omissions of Landlord and its agents, employees, tenants, licensees and contractors, Tenant
shall indemnify, pay and protect, defend and hold harmless (with counsel reasonably approved by
Landlord) and save Landlord (and its successors, assigns and any successor fee owners of the
Premises), and all of their directors, officers, employees and agents, hereinafter referred to as
Landlord Indemnities, from and against any claims, demand, damages, injuries, costs, expenses,
losses, liabilities, causes of action, interest, fines, charges and penalties (including reasonable
legal fees and expenses in enforcing this indemnity and hold harmless), directly or indirectly
arising out of or attributable to (i) any intentional or negligent act or omission of Tenant, its
agents, employees, licensees, invitees or contractors on the Leased Premises, occurring within the
Leased Premises or (ii) arising from Tenants or its employees use of the Leased Premises.
10.02 Tenants Indemnity.
Except to the extent attributable to the intentional and negligent
acts or omissions of Tenant and its agents, employees, tenants, licensees and contractors, Landlord
shall indemnify, pay and protect, defend and hold harmless (with counsel reasonably approved by
Tenant) and save Tenant (and its successors, assigns and subletees), and all of their directors,
officers, employees and agents, hereinafter referred to as Tenant Indemnities, from and against
any claims, demand, damages, injuries, costs, expenses, losses, liabilities, causes of action,
interest, fines, charges and penalties (including reasonable legal fees and expenses in enforcing
this indemnity and hold harmless), directly or indirectly arising out of or attributable to (i) any
intentional or negligent act or omission of Landlord, its agents, employees, licensees, invitees on
the Entire Premises or contractors, occurring within the Entire Premises, or (ii) arising from
Landlords use of the Entire Premises.
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 Landlords approval which shall not be unreasonably withheld, provided Tenant remains
liable for all Tenant obligations under this Lease, and any sublease shall be subject to all the
provisions of this Lease. Landlord shall be entitled to all rent from any assignment or sublease in
excess of the Annual Fixed Rent set forth in this Lease.
B) Any assignment of this Lease or any sublease of a portion or all of the Premises shall be
subject to the terms and conditions of this Lease.
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C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without Landlords consent, assign this Lease (a) to
any subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (b) to Tenants Parent Corporation, or (e) to any corporation
which acquires 50% or more of the issued and outstanding voting stock (or such lesser percentage
as shall be sufficient to acquire voting control) of Tenant or of Tenants Parent Corporation,
provided that such corporation duly and validly then guarantees the performance of the
obligations under this Lease.
11.02 Notice to Landlord.
Tenant shall give notice to Landlord in writing of any
assignment of the Lease ten (10) days prior to such event.
ARTICLE XII
MORTGAGE SUBORDINATION
12.1 Existing Mortgages.
If there is an existing mortgage or deed of trust
(Mortgage) lien affecting the interest of Landlord in the Premises or in any other part of the
Entire Premises, then Landlord shall obtain and shall deliver to Tenant within fifteen (15) days
after the Effective Date, a non-disturbance and attornment agreement in a form reasonably acceptable
to such lender, Landlord and Tenant, executed by the Mortgagee (as defined below), wherein the
Mortgagee shall agree to recognize the interest of Tenant and abide by the terms of this Lease in
the event of any judicial foreclosure, private sale or deed in lieu of foreclosure, including the
right to quiet enjoyment of the Premises, without any condition, limitation or restriction.
12.2 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 Landlords interest in the
Premises in favor of an institutional lender not affiliated with Landlord. Provided however, that
as a condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of
trust and their successors and assigns (the Mortgagee) shall agree to recognize the interest of
Tenant and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.
ARTICLE XIII
CONDEMNATION EMINENT DOMAIN
13.01 Definitions.
The following definitions apply in construing provisions of this
Lease relating to a taking of or damage to all or any part of the Entire Premises or
Improvements or Parking or any interest in them by eminent domain or inverse condemnation:
A) Taking means that taking or damaging, including severance damage, by eminent domain or by
inverse condemnation for any public or quasi-public use under any statute. The transfer of title
may be either a transfer resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation,
in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. The
Taking shall be considered to take place as of the date on which the right to compensation and
damages accrues under the law applicable to the Premises, unless the condemnor also takes actual
physical possession of the Premises or a part thereof, in which case the date of Taking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues or the date physical possession is taken by the condemnor.
B) Total Taking means the Taking of the fee title to all the Premises and the Improvements
on the Premises, which shall be considered to include any offsite improvements effected by Tenant
to serve the Premises or the improvements or the parking on the
Entire Premises.
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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.
13.02 Notice to Other Party.
The party hereto receiving any notice of the kinds specified
below shall promptly give the other party notice of the receipt, contents, and date of the notice
received:
A) Notice of Intended Taking;
B) Service of any legal process relating to condemnation of the Premises or improvements;
C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or
D) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer
in lieu of condemnation.
13.03 Total Taking Effect on Rent and Term.
On a Total Taking, Tenants obligation to pay Rent
shall terminate on, and Tenants interest in the leasehold shall continue until, the date of
Taking, at which time this Lease shall terminate.
13.04 Distribution of Award for Taking.
On a Taking, all sums, including, but not limited
to, damages and interest awarded for the value of the real estate taken, shall be apportioned and
paid by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any for the Fair Market Value of all Land, buildings
and other improvements on the Entire Premises and all Severance Damages.
B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost profits,
relocation expenses and fixtures; and
C) To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.
13.05 Partial Taking Rent Adjustments.
On a Partial Taking, the Lease shall remain in full force
and effect covering the remaining Premises, except that the total Rent as otherwise provided herein
shall be reduced in the same ratio as the percentage of the area of the Premises or the parking
taken bears to the total area of the Premises or the parking.
13.06 Partial Taking Option to Terminate.
Notwithstanding anything herein to the contrary, in
the event of a Partial Taking, if more than thirty-three percent (33%) of the Building or
thirty-three (33%) of the
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parking is taken by condemnation or sold under the threat of condemnation, then Tenant may
terminate this Lease as of the date the condemning authority takes title or possession, whichever
occurs first, by delivering written notice to the other within ten (10) days after receipt of
written notice of such taking (or in the absence of such notice, within ten (10) days after the
condemning authority takes possession).
13.07 Separate Tenants Award.
In the event of a Taking, Tenant may make a separate claim
with respect to lost business, lost profits, goodwill, moving expenses, fixtures and relocation
expenses against the acquiring governmental Agency.
ARTICLE XIV
DEFAULT
14.01 Tenants Default.
The occurrence of any of the following shall constitute a
default or event of default by Tenant:
A) Failure to pay Annual Fixed Rent or any other monetary amount when due as provided herein,
if the failure continues for ten (10) days after first written notice has been given to Tenant by
Landlord;
B) Failure to perform any of Tenants non-monetary obligations under this Lease; provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure each
such default. If Tenant cannot reasonably cure such default within said thirty (30) day period,
Tenant shall not be in default of this Lease if Tenant commences to cure the breach within the
thirty (30) day period and diligently and in good faith continues to cure the breach.
14.02 Landlords Remedies Cumulative.
Landlord shall have the following remedies set forth in
subsections (A) through (G) below if Tenant commits a default, except as provided in Section 15.03.
These remedies are not exclusive and may be exercised concurrently or successively; they are
cumulative in addition to any remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or other
amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and thereupon
Landlord may expel all persons and remove all property therefrom, without becoming liable to
prosecution therefor, and relet the Premises or a portion or portions thereof, and receive the rent
therefrom, applying the same first to the payment of the reasonable expenses of such re-entry and
the reasonable cost of such reletting, and then to the payment of the Rent and other amounts for
which Tenant is then in default; the balance, if any, to be paid to Tenant, who, whether or not the
Premises are relet, shall remain liable for any deficiency. It is agreed that the commencement and
prosecution of any action by Landlord in forcible entry and detainer, ejectment, or otherwise, or
the appointment of a receiver, or any execution of any decree obtained in any action to recover
possession of the Premises, or any re-entry, shall not be construed as an election to terminate
this Lease unless Landlord shall, in writing, expressly exercise its election to declare the Lease
Term hereunder ended and to terminate this Lease, and unless this Lease be expressly terminated,
such re-entry or entry by Landlord, whether had or taken under summary proceedings or otherwise,
shall not be deemed to have absolved or discharged Tenant from any of its obligations and
liabilities for the remainder of the Lease Term. Notwithstanding anything to the contrary or other
provisions of this Section 14.02(B), Tenant shall have the right to sublet the Premises, assign its
interest in the Lease, or both, subject to Landlords prior right, during any continuance of
Tenants default, to relet the Premises or a portion or portions thereof.
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C)
Termination of Lease and Lessees 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 Tenants failure to perform his obligations under the Lease or which, in the
ordinary course of things, would be likely to result therefrom.
D) Definitions. As used herein, the following phrases shall be interpreted as
follows:
(1) The worth, at the time of the award, as used in subsections 14.02(C)(1) and (2) above, is
to be computed by allowing interest at the maximum lawful rate. The worth, at the time of the
award, as referred to in subsection 14.02(C)(3) above, is to be computed by discounting the amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus
one percent (1%).
(2) As used herein, the term time of award shall mean either the date upon which Tenant pays
to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of entry of any
determination, order, or judgment of any court or other legally constituted body determining the
amount recoverable, whichever first occurs.
E) Surrender. Promptly after notice of termination, Tenant shall surrender and vacate the
Premises and all improvements in broom-clean condition, and Landlord may re-enter and take
possession of the Premises and all remaining improvements and eject all parties in possession or
eject some and not others, or eject none. Termination under subsection 14.02(C) shall not relieve
Tenant from the payment of any sum due to Landlord or from any claim for damages previously accrued
or then accruing against Tenant.
F) Appointment of Receiver. If Tenant defaults under Section 14.02(C), Landlord shall have the
right to have a receiver appointed to collect rent from any subtenants. Neither the filing of a
petition for the appointment of a receiver nor the appointment itself shall constitute an election
by Landlord to terminate this Lease.
G) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in
default under Section 14.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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 ten percent (10%) per annum computed from the date of such expenditure until the
date of reimbursement by Tenant.
14.03 Landlords 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
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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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any amount due from Landlord
against the next Rent payment due under this Lease.
14.04 Waiver of Redemption.
Tenant hereby expressly waives any and all rights of redemption granted
by or under any present or future laws in the event of Tenant being dispossessed or removed from
the Premises upon the termination of this Lease because of default by Tenant hereunder.
14.05 Dispute Resolution.
Landlord and Tenant desire by provisions of this Section 14.05 to
establish procedures to facilitate the informal and inexpensive resolution of any dispute arising
out of this Lease by mutual cooperation and without resort to litigation. To accomplish this
objective, Landlord and Tenant agree to follow the procedures set forth below if and when a dispute
arises between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written
description of the alleged breach by the other party. This description shall explain the nature of
the complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act. The party receiving the letter of complaint must respond in writing within ten (10) days
with an explanation, including references to the relevant parts of the Lease and a response to the
proposed solution. Within ten (10) days of receipt of this response, the parties must meet and
discuss options for resolving the dispute. The complaining party must initiate the scheduling of
the resolution meeting.
B) Mediation. A settlement conference shall be held within thirty (30) days of the
unsuccessful resolution meeting or as soon as practical thereafter.
C) Arbitration. With respect to disputes which the parties have been unable to resolve
informally or by mediation, the parties agree to submit the dispute for final and binding
arbitration if the dispute has not otherwise been settled. The parties agree that the arbitration
must be initiated within one (1) year after the date of the written description of the alleged
breach and that the failure to initiate arbitration within the one (1) year period constitutes an
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated for the
purposes of this section by demand therefor being sent by certified mail to the other party, which
notice shall contain a description of the dispute, the amount involved and the remedies sought. The
parties shall have the right to representation by counsel throughout the arbitration proceedings.
Arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration
Association.
14.06 Attorneys Fees.
Should any action or proceeding, be commenced between the parties to
this Lease concerning said Premises, this Lease, or the rights and duties of either in relation
thereto, the party, Landlord, or Tenant, prevailing in such action or proceeding shall be entitled,
in addition to such other relief as may be granted in the action or proceeding, to a reasonable sum
as and for its attorneys fees therein which shall be determined by the arbitrator(s) hearing such
action far proceeding.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES
15.01 Landlords Representations and Warranties.
Landlord represents and warrants:
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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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date hereof,
agree to or create or permit or suffer to be created any liens or encumbrances on the Premises
which are (i) not specifically stated in writing to be junior to this Lease, or any New Lease (as
defined herein), or (ii) which are inconsistent with the obligations of Landlord hereunder, and
Landlord shall, at or prior to the commencement of the Term, cause the Premises to be free of all
liens and encumbrances. Title to the Premises shall be free of all Objected Exceptions.
15.02 Tenants Representations and Warranties.
Tenant represents and warrants:
A) Tenant is a Delaware corporation in good standing.
B) The persons executing this Lease in behalf of Tenant are authorized to execute the same on
behalf of Tenant and Tenants obligations under this Lease are legally binding, do not require the
consent of any other parties and do not violate the provisions of any agreement to which Tenant is
a party.
C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.01 Repairs, Alterations and Further Improvements.
A) Tenants Obligation to Repair. In the event of damage to or destruction of the Tenants
Building or any Improvements on or to the Premises to be covered by the insurance described in
Article 6:
(1) Damages of Less Than Fifty Percent (50%) of Replacement Cost. If the cost of repairing or
reconstructing the Tenants Building or Improvements to the condition and form prior to such
damage or destruction is not in excess of Fifty percent (50%) of the then new replacement cost of
the Improvements and such repairs or reconstruction of any such damage or destruction can be made
under then
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existing laws, ordinances, statutes or regulations of any governmental authorities applicable
thereto (or can be so made with minor and non-material changes to the former condition and form of
property damaged or destroyed), Tenant shall effect, and Landlord and Tenant agree that the funds
derived from insurance acquired pursuant to Article 6 shall be made available to effect, such
repair and reconstruction of the structure or improvement so damaged or destroyed to substantially
its condition prior to said damage or destruction with such alterations thereto as Tenant shall
reasonably determine prudent or valuable under the circumstances, including any changes required to
comply with applicable law, with the then prevailing construction practices applicable to the
Premises. Tenant shall be responsible for all costs in excess of Insurance proceeds available All
such work shall be carried on in accordance with Drawings prepared by a licensed architect or
architects approved by Landlord (acting reasonably) if such an architect is reasonably required,
given the scope and nature of the work. In disbursing insurance proceeds the Tenant and Landlord
may rely upon and accept the certified determinations of such architect with respect to estimated
costs, awarding of contracts, sufficiency of bonds, progress of construction, interpretation of
plans and specifications, compliance with same, and completion of construction. No extras or
changes in Drawings shall be made by Tenant without first giving written notice of such changes to
Landlord and obtaining Landlords approval thereof (which approval shall not be unreasonably
withheld or delayed).
(2) Damage in Excess of Fifty Percent (50%). If the cost of repairing or reconstructing said
damage or destruction to its former condition and form is in excess of the Fifty percent (50%)
provided in subparagraph (A)(1) of this Section 16.01, or if such cost is less than Fifty percent
(50%), but such reconstruction or rebuilding cannot be made under then existing laws, ordinances,
statutes or regulations of any governmental authority applicable thereto (and cannot be so made
with minor and non-material changes to the former condition and form of the property damaged or
destroyed), the term shall end as of the date of such damage on 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.
16.02 Prompt Repair.
If Tenant, pursuant to the terms hereof, is obligated or elects to
repair, replace, reconstruct or rebuild any structures, improvements or other property as
hereinabove provided, the same shall be effected at Tenants cost and expense (which may be paid
from insurance proceeds available as above provided and subject to the provisions of subparagraph
(B) of Section 16.01), and Tenant shall diligently commence and continuously carry out such repair,
replacement, reconstruction or rebuilding, to full completion as soon as possible, except to the
extent of delays due to strikes, lockouts, shortages of labor or materials after due diligence in
obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act of the public
enemy, or other causes beyond the reasonable control of Tenant after the exercise of due diligence,
including diligence in contracting, and the exercise of rights under contracts, with contractors
and suppliers.
16.03 Rent Adjustment.
This Lease and the Term shall not terminate or be terminated because of
damage to or destruction of any structure or improvement on or in the Premises except under and in
accordance with the provisions hereinabove contained. If such damage or destruction occurs and
renders all or a portion of the Improvements on the Premises untenantable, Rent shall thereafter
not abate but continue for as long as and to the extent such Improvements are untenantable.
16.04 Damage During Last Two (2) Years of Term.
If there occurs during the last two (2) years
of the Initial Term or at any time during a Renewal Period damage or destruction to any Improvement
on or in the Premises and the costs of repairing, restoring, replacing or rebuilding the same
exceed Five Thousand Dollars ($500,000), then Tenant may elect to terminate the Term and, in such
event, Tenant shall give notice to Landlord of its election within sixty (60) days after its
determination of the amount of damage, and the Term shall thereupon terminate as of the date of
such notice and all insurance proceeds shall become the property of Landlord.
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ARTICLE XVII
MISCELLANEOUS
17.01 Limitation on Liability.
The liability of Landlord hereunder or in connection with the
Premises or Entire Premises shall be limited to its interest in the Entire Premises and in no event
shall any other assets of Landlord be subject to any claim arising out of or in connection with the
Entire Premises.
17.02 Brokers.
Landlord and Tenant each represent to the other that neither has any obligation
to any broker or finder in connection with this transaction, and that no fee or commission is due
any broker, finder, or similar person in connection herewith. Landlord and Tenant each indemnifies
the other and agrees to hold the other harmless from and against any and all claims, demands,
liabilities, lawsuits, costs, and expenses (including reasonable attorneys fees) for any fee or
commission due to any other broker, finder, or similar person in connection with this transaction
and arising out of the act of the indemnifying party.
17.03 Modification.
No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless the same is in writing and signed by the party against which the enforcement
of such modification, waiver, amendment, discharge, or change is or may be sought.
17.04 Severability.
In the event any term, covenant, condition, provision, or agreement
contained herein is held to be invalid, void, or otherwise unenforceable, by any court of competent
jurisdiction, such holding shall in no way affect the validity or enforceability of any other term,
covenant, condition, provision, or agreement contained herein.
17.05 Governing Law.
This Lease and the obligations of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of California and
each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by Law.
17.06 Terminology.
All personal pronouns used in this Lease, whether used in the masculine,
feminine, or neuter gender, shall include all other genders; the singular shall include the plural
and vice versa. Business Day means other than a Saturday, Sunday, or holiday. In the event that
the time for performance of an act under this Lease falls on a Saturday, Sunday, or holiday, the
date for performance of such act shall be extended to the next Business Day.
17.07 Counterparts.
This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original agreement, and all of which shall constitute one agreement by
each of the parties hereto.
17.08 Binding Effect.
Except as otherwise herein provided, this Lease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.
17.09 Captions.
Article and section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend, or describe the scope
of this Lease or any provisions hereof. All reference to section numbers herein shall mean the
sections of this Lease.
17.10 Notices to Landlord and Tenant.
A) Except as otherwise in this Lease provided, a bill, demand, statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 17.11 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the identity and
address of Tenants 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
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courier (postage fully prepaid), addressed to Landlord to the addresses set forth in Section
17.11 below or at such other address(es) as Landlord shall designate by notice given as herein
provided. If Tenant is notified of the identity and address of Landlords mortgagee or beneficiary
under a deed of trust, or ground or underlying lessor, Tenant shall give such party notice of any
default by Landlord hereunder by certified or private express mail carrier.
C) The time of the rendition of such bills or statements and of the giving of such consents,
notices, demands, requests or communications (collectively notice) by Tenant or Landlord shall
be deemed to be the earlier of (i) the date received by Tenant with respect to a notice to Tenant,
and the date received by Landlord with respect to a notice to Landlord (ii) if the notice is sent
by certified mail, five (5) days after the same is mailed, or (iii) if the notice is sent by
private overnight courier (e.g., Federal Express or similar courier), one (1) day after the same
is delivered to or picked up by such courier. Rejection or refusal to accept a notice, request,
demand, or the inability to deliver same because of a changed address of which no notice was given
shall be deemed to be a receipt of the notice, request or demand sent..
17.11 Addresses for Notices to Landlord and Tenant.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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SYNM Properties, Inc.
150 Golden Gate Ave.
San
Francisco, CA 94102
Attn.: Real Estate Department
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To Tenant:
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Century Theatres, Inc.
150 Golden Gate Avenue
San Francisco, CA 94102
Attention: Legal
Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
17.12 Entire Agreement.
This Lease and the exhibits attached set forth the entire agreement
between the parties. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever as to any matter. Any prior agreements, conversations, or
writings are merged herein, superseded hereby, and extinguished.
17.13 Sale or Transfer of Premises.
Landlord shall promptly notify Tenant in writing of any
sale or transfer of the Premises or any assignment of Landlords 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 Landlords interest in this Lease or any change in, or transfer of, title
in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of Landlord
or by operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been notified in writing
of such transfer, assignment, or change in title, and given satisfactory proof thereof, and the
withholding of rent or other charges payable by Tenant to Landlord hereunder, in the meantime shall
not be deemed a default upon the part of Tenant. Landlord may assign this Lease and convey its
title to the Premises, subject to this Lease, at any time. In the event of such assignment of this
Lease, Landlord shall have no further obligations under this Lease, except for liabilities which
shall have accrued prior to the date of such assignment and transfer and that the assignee assumes
in writing Landlords obligations hereunder accruing on and after the effective date of the
assignment.
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17.14
Force Majeure.
In the event that Tenant shall be delayed or hindered in or
prevented form the performance of any act other than Tenants obligation to make payments of rent,
and other charges required hereunder, by reason of strikes, lockouts, unavailability of materials,
failure of power, restrictive governmental laws or regulations, riots, insurrections, the default
of Landlord, war, or other reason beyond its control, then performance of such act shall be excused
for the period of the delay, and the period for the performance of such act shall be extended for a
period equivalent to the period of such delay. Notwithstanding the foregoing, lack of funds shall
not be deemed to be a cause beyond the control of Tenant.
17.15
Waiver.
No term, covenant, or condition of this Lease can be waived except in
writing, signed by the party making the waiver, Landlord or Tenant, as the case may be. No waiver
of any default hereunder shall be implied from any omission by either party to take any action on
account of such default if such default persists or is repeated, and no express waiver shall affect
any default other than the default specified in the express waiver, and that only for the time and
to the extent therein stated. The acceptance by Landlord of Rent or partial Rent with knowledge of
the breach of any of the covenants of this Lease by Tenant shall not be deemed a waiver of any such
breach. One or more waivers of any breach of any covenant, term, or condition of this Lease shall
not be construed as a waiver of any subsequent breach of the same covenant, term, or condition.
The consent or approval by either party shall not be deemed to waive or render unnecessary that
partys consent to or approval of any subsequent similar act.
17.16 Estoppel Certificate.
Either party hereto shall, within twenty (20) days notice from the
other party (referred to as the Requesting Party), execute and deliver to the Requesting Party,
in recordable form, a certificate stating that this Lease is unmodified and in full force and
effect, or in full force and effect as modified, and stating the modifications. The certificate
also shall state the amount of current monthly rent, the dates to which the rent has been paid in
advance, the amount of prepaid rent, and any other information with respect to this Lease
reasonably requested by the Requesting Party. Failure to deliver the certificate within the twenty
(20) days shall be conclusive upon the party failing to deliver the certificate for the benefit of
the party requesting the certificate and any successor to the party requesting the certificate,
that this Lease is in full force and effect, and has not been modified except as may be represented
by the party requesting the certificate, and that rent and other charges have not been paid for any
period after date of the notice requesting the certificate.
17.17 Number and Gender.
Whenever the context requires the singular number, it shall include
the plural, the plural the singular, and the use of any gender shall include all genders.
17.18 No Holding Over.
Tenant shall have no right to holdover after the end of the Term.
Should Tenant or any Leasehold Mortgagee succeeding to the interest of Tenant hold over in
possession after the expiration date, such holding over shall not be deemed to extend the Lease or
renew this Lease; and Tenant shall pay a pro-rated daily amount equal to one hundred twenty percent
(120%) of the Annual Rent in effect immediately preceding the expiration date until Tenant vacates
the Premises.
17.19 Mechanics Liens.
Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed against the Premises or the Entire Premises in connection with Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail to
so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics liens
and charge all costs thereof, including without limitation, reasonable attorneys fees, to Tenant
as additional rent plus interest at 18%.
17.20 Relationship of Parties.
Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord and Tenant. Nothing contained
herein shall in any way impose any liability upon the stockholders, officers or directors of
Landlord or stockholders, officers, directors or trustees of Tenant should such parties be
corporate entities.
25
17.21 Time of the Essence.
Time is of the essence with respect to Tenants payment of
rent and other monetary obligations to Landlord under this Lease.
17.22 Facsimile Copies.
Tenant and Landlord (i) have each agreed to permit the use, from
time to time and where appropriate, of telecopied signatures in order to expedite the transaction
contemplated by this Lease, (ii) each intend to be bound by its respective telecopied signature,
(iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
17.23
Anti-Merger.
The voluntary or otherwise surrender of this Lease by Tenant, or a mutual
cancellation of this Lease shall not work a merger but shall at the
option of Landlord either:
A) Terminate any existing subleases or subtenancies; or
B)
Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
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Executed as of the date first written above.
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TENANT:
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CENTURY THEATRES, INC.,
a Delaware Corporation
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By: /s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: Senior Exec V.P.
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LANDLORD:
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SYNM PROPERTIES, INC.,
a New Mexico Corporation
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By: /s/ Alan Steuer
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Print Name: Alan Steuer
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Title: CFO
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26
EXHIBIT
10.29(a)
LEASE ROSEVILLE, CALIFORNIA
Table of Contents
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Page No.
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RECITALS
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1
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ARTICLE I EXHIBITS DEFINITIONS
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1
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II PREMISES TERM OPTIONS COVENANT OF TITLE
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2
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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2
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2.04 Covenant of Title; Authority and Quiet Possession; Transfer of Title
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3
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ARTICLE III USE OF PREMISES
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4
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3.01 Use
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4
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ARTICLE IV RENT
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4
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4.01 Annual Fixed Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V TAXES, ASSESSMENTS AND UTILITIES
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5
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5.01 Impositions
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5
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.03 Contest of Taxes
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6
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5.04 Utilities
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6
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5.05 Personal Property Taxes
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6
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i
LEASE
Table of Contents
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Page No.
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ARTICLE VI INSURANCE
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6
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6.01 Acquisition of Insurance Policies
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6
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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7
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6.04 Landlords Acquisition of Insurance
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7
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6.05 Insurance Money and Other Funds Held in Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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8
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6.08 Waiver of Right of Recovery
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8
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ARTICLE VII MAINTENANCE, REPAIRS AND ALTERATIONS
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9
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7.01 Alterations Changes
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9
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7.02 Repairs Maintenance
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9
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ARTICLE VIII ENVIRONMENTAL MATTERS
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10
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX IMPROVEMENTS
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13
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9.01 Tenant Improvements
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13
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership of Improvements
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14
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ii
LEASE
Table of Contents
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Page No.
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9.05 Control
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14
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ARTICLE X INDEMNITY
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14
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10.01 Landlords Indemnity
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15
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10.02 Tenants Indemnity
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15
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ARTICLE XI ASSIGNMENT AND SUBLETTING
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15
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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15
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ARTICLE XII MORTGAGE SUBORDINATION
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16
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12.01 Existing Mortgages
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16
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12.02 Future Mortgages
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16
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ARTICLE XIII CONDEMNATION EMINENT DOMAIN
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16
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13.01 Definitions
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16
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13.02 Notice to Other Party
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17
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13.03 Total Taking Effect on Rent and Term
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17
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13.04 Distribution of Award for Taking
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17
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13.05 Partial Taking Rent Adjustments
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17
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13.06 Partial Taking Option to Terminate
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17
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13.07 Separate Tenants Award
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17
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ARTICLE XIV DEFAULT
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18
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14.01 Tenants Default
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18
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14.02 Landlords Remedies Cumulative
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18
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14.03 Landlords Default
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19
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14.04 Waiver of Redemption
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20
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14.05 Dispute Resolution
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20
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iii
LEASE
Table of Contents
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Page No.
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14.06 Attorneys Fees
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20
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ARTICLE XV REPRESENTATIONS AND WARRANTIES
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20
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15.01 Landlords Representations and Warranties
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20
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15.02 Tenants Representations and Warranties
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21
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ARTICLE XVI DAMAGE OR DESTRUCTION
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21
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16.01 Repairs, Alterations and Further Improvements
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21
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16.02 Prompt Repair
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22
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16.03 Rent Adjustment
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22
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16.04 Damage During Last Two (2) Years of Term
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22
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ARTICLE XVII MISCELLANEOUS
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22
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17.01 Limitation on Liability
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22
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17.02 Brokers
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22
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17.03 Modification
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23
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17.04 Severability
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23
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17.05 Governing Law
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23
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17.06 Terminology
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23
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17.07 Counterparts
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23
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17.08 Binding Effect
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23
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17.09 Captions
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23
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17.10 Notices to Landlord and Tenant
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23
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17.11 Addresses for Notices to Landlord and Tenant
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24
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17.12 Entire Agreement
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24
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17.13 Sale or Transfer of Premises
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24
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17.14 Force Majeure
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24
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17.15 Waiver
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24
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17.16 Estoppel Certificate
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25
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iv
LEASE
Table of Contents
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Page No.
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17.17 Number and Gender
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25
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17.18 No Holding Over
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25
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17.19 Mechanics Liens
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25
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17.20 Relationship of Parties
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25
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17.21 Time of the Essence
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25
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17.22 Facsimile Copies
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25
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17.23 Anti-Merger
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26
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SIGNATURE PAGE
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26
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Exhibit A A Description of Entire Premises
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Exhibit B Form of Memorandum of Lease
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v
LEASE
THIS INDENTURE OF LEASE, dated and effective as of September 3, 1996, by and between
SYUFY
ENTERPRISES,
a California Limited Partnership with an office at 150 Golden Gate Ave., San
Francisco, CA, hereinafter called Landlord, and
CENTURY THEATRES, INC
., a Delaware corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in a parcel of land described on Exhibit A attached hereto.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the land.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the tract of land hereinafter referred to as Entire Premises
or Premises or Leased Premises.
EXHIBIT B Form of Memorandum of Lease
1.02 Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date and Rent Commencement Date shall mean the date which is the
earlier of (i) nine months after Tenant has secured a building permit for construction of Tenants
building or (ii) the date on which Tenant opens for business in the Premises.
The term Default Rate shall mean the Ten percent (10%).
The term Entire Premises shall mean the tract of land described on Exhibit
A.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises or Premises shall mean the tract of land described on Exhibit A.
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.
1
The term Option Periods shall mean two (2) successive
separate periods of five (5) years each and one (1) successive period
of four (4) years.
The term Percentage Rate shall mean eight percent (8%).
The term Planned Use shall mean the construction and operation of a 54,860 square foot
multi-plex 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 Tenants Building shall mean the building to be erected by
Tenant.
The term term of this Lease or term hereof shall mean the initial term, as provided in the
article captioned Term and any renewal or extensions thereof.
ARTICLE II
PREMISES TERM OPTIONS COVENANT OF TITLE
2.01 Lease of Premises.
A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms and
conditions contained herein.
B) The Premises are being leased in their as is condition subject to Article VIII herein
captioned Environmental Matters.
C) Landlord shall deliver possession of the Premises to Tenant on the Effective
Date.
2.02 Term of Lease.
Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
The Initial Term of this Lease shall begin on the Commencement Date and shall
terminate twenty (20) years thereafter and shall terminate on the last day of the calendar month during
which the date which is twenty (20) years after the Commencement Date occurs. References herein to the Lease
Term shall mean the Initial Term of this Lease or the Initial Term as extended under Section 2.02.
2.03 Option to Extend Lease Term.
2
A) Tenant may, at Tenants option, extend the Initial Term of
this Lease for up to two (2) consecutive additional
periods of five (5) years each and one (1)
additional period of four (4) years (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) Tenants right to the options to extend the Lease Term and Tenants rights to the Renewal
Term are subject to:
(1) This Lease being in full force and effect on the last day of the Initial Term or the then
current Renewal Term, as applicable.
(2) Compliance with the following procedure for exercising the option in question:
(a) At least nine (9) months before the last day of the Initial Term, or the then current
Renewal Term, as the case may be, Tenant shall give Landlord written notice exercising the option.
(b) Each party shall, at the request of the other, execute a memorandum acknowledging the
fact that the option in question has been exercised. If an option is properly exercised by Tenant,
the failure of Landlord to execute such memorandum shall not invalidate such option or the
exercise thereof.
(3) Tenant is not in default (meaning the breach of any obligation hereunder and
failure to cure that breach within the time permitted in Section 14.01) at time of the
exercise of the renewal and at the commencement of the renewal term.
2.04 Covenant of Title: Authority and Quiet Possession: Transfer of Title.
(A) Landlord represents and warrants to Tenant that Landlord has full right and lawful
authority to enter into and perform Landlords obligations under this Lease for the term hereof,
and has good an marketable title to the Entire Premises in fee simple.
(B) At all times during the Term, Tenant shall keep and maintain the Exterior Facilities in
the Entire Premises and Tenants Building in good order and repair and in a clean and safe
condition, reasonably free of debris. Tenants obligation hereunder shall include maintaining the
parking areas of the Entire Premises free of potholes and assuring that they are properly coated
and sealed and striped as needed. Tenant shall make any and all additions to and all alterations
and repairs in, on and about the Exterior Facilities, which may be required by, and shall
otherwise observe and comply with, all public laws, ordinances and regulations from time to time
applicable to the Exterior Facilities. Tenant shall indemnify and save harmless Landlord from and
against all actions, claims and damages by reason of Tenants failure to comply with and perform
its obligations under this section.
(C) Tenant will not permit the Entire Premises to become subject to any mechanics,
laborers or materialmens lien on account of labor or material furnished to Tenant or
claimed to have been
furnished to Tenant in connection with work of any character performed or claimed to have
been performed on
the Entire Premises by or at the direction or sufferance of Tenant; provided, however, Tenant
shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or
claimed lien and on
3
final determination of the lien or claim for the lien, Tenant will immediately pay any
judgment rendered with all proper costs and charges, and will, at its own expense, have the lien
released and any judgment satisfied.
ARTICLE III
USE OF PREMISES
3.01
Use
.
A)
The Premises may be used for the Planned Use no other purpose.
B) Landlord shall agree and consent to such utility and other easements as Tenant may
reasonably require. Tenant shall be subject to and responsible for all costs and granted all
rights as set forth in
the Grant of Reciprocal Easements and Agreement of Restrictions covering the Premises.
ARTICLE IV
RENT
4.01 Annual Fixed Rent.
A) Beginning on the Rent Commencement Date, Tenant shall pay to Landlord during
the Lease Term Annual Fixed Rent in the amount of Seven Hundred
Eighty-nine Thousand Nine Hundred Eighty-four ($789,984.00) dollars. The Annual Fixed Rent shall be payable in advance in twelve equal
monthly installments. The Annual Fixed Rent 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 Annual Fixed Rent shall apply from the Rent Commencement Date through the
end of the fifth (5th) Lease Year of the Term. The Annual Fixed Rent shall be increased 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 an
amount of Fifty-four Thousand Eight Hundred Sixty ($54,860) dollars
greater than the Annual Fixed Rent
payable immediately before the Adjustment date in question.
4.02 Percentage Rent.
In addition
to the payment of Annual Fixed Rent, Tenant shall pay to Landlord for each Lease
Year during the Term of this Lease, as Percentage Rent a sum equal to the amount by which
eight (8%) percent of the Gross Sales for such Lease Year exceeds the Annual Fixed 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. For the purpose of computing the Annual Percentage for the first Lease Year,
the Gross sales and the annual fixed rate percentage for the partial calendar month, if any,
preceding the first Lease Year shall be includable in the Annual Fixed Rate and Gross Sales for
the first Lease Year.
Gross Sales shall mean all box office receipts, and receipts from sales of goods,
merchandise, beverages, food, vending machines and video games. Gross Sales shall exclude credits
and refunds made with respect to admissions or other sales; all federal, state, county and city
admission taxes, sales taxes and other similar taxes now or hereafter imposed whether such taxes
are collected from customers separately from the selling price of admission tickets or absorbed
therein, and actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or Pass Admissions including EBF charges on Pass Admissions. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental
of vending machines, pay telephones or other amusement machines shall be deducted from Gross
Sales.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
officer of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage
4
Rent, if any, due for such Lease Year. Tenant shall concurrently with the delivery of such
statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales .
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If it
is determined as a result of such audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due any payable with interest at the
annual rate of eighteen (18%) percent from the date when said payment should have been made until
paid. Any information gained from such statements or inspection shall be confidential and shall not
be disclosed other than to carry out the purposes hereof.
4.03 Rent Payments.
Rent and other sums to be paid by Tenant shall be payable in lawful money
of the United States of America. All payments shall be made by Tenant to Landlord without notice
or demand.
4.04 Place for Payment of Rent.
The Annual Rent and any other charges required to be paid by
Tenant to Landlord shall be sent to Landlord at its principal place of business, or such other
address as Landlord may direct in writing.
4.05 Late Payment of Rent.
In the event that any monthly installment of rent is not paid
within ten (10) days after such payment is past due, Tenant shall pay Landlord interest on such
unpaid rent at the rate of ten (10%) per annum computed from the date such rent installment was
due until the date actually paid.
ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES
5.01 Impositions.
A) The term Impositions shall mean all real estate taxes, duties or assessments
(special or otherwise), water and sewer rents, whether ordinary or extraordinary, general or
special, foreseen or
unforeseen, of any kind and nature whatsoever, which, at any time during the Lease Term,
shall be assessed
or levied, or be attributable in any manner to the Entire Premises, or the rents receivable
therefrom, or any part
thereof or any use thereon or any facility located therein or used in connection therewith,
whether or not any of
the foregoing shall be a so-called real estate tax expressly excluding, however, any such
items arising directly
or indirectly out of any act or omission of Landlord, any of Landlords predecessors in title
or any other person
occurring prior to the commencement of the Term. From and after the Initial Rent Due Date,
Tenant shall pay
when due all Impositions assessed, levied or attributable to the Entire Premises and/or the
Improvements on
the Entire Premises.. All Impositions or installments thereof payable with respect to the tax
year in which this
Lease shall commence, and all Impositions or installments thereof with respect to the tax
year in which this
Lease shall terminate, shall be pro-rated on a daily basis; provided, however, that
assessments or escape
assessments assessed as a result of this Lease and/or the construction of Tenant Improvements
by Tenant
shall not be prorated and shall be paid solely by Tenant; and provided further that
assessments attributable to Tenant Improvements made in the final year of the Lease shall be paid solely by Tenant if
Tenant demolishes the Tenant Building.
B) In the event Tenant fails to pay such real property taxes as provided herein, Landlord
may, but shall not be required to, pay the same, and any amount so paid by Landlord shall
immediately thereafter become due to Landlord from Tenant as Additional Rent with interest thereon at the
rate of 18% per annum from the date of Landlords payment plus any fine, penalty, interest or cost which is
levied by the taxing authority for such late payment.
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C) Landlord will pay, before the last day on which payment may be made without penalty or
interest, all Impositions which shall be levied against Landlords Buildings, if any.
5.02 Exceptions from Impositions: Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the 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 Landlords only income, as
the case may be.
5.03 Contest of Taxes.
Tenant at its sole cost and expense may by appropriate legal
proceedings conducted in good faith and with due diligence, contest the amount or validity or
application, in whole or in part, of any Imposition or lien therefor, or any other lien,
encumbrance or charge against the Premises arising from work done or materials provided to or for
Tenant. Tenant shall give Landlord reasonable notice of, and information pertaining to, such
contest and regular progress reports with respect thereto. Landlord shall cooperate with any
effort pursued by Tenant in accordance with this Section 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.03.
5.04
Utilities
.
Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Entire Premises. Any
utility improvements presently serving the Entire Premises shall be maintained, repaired and
replaced by Tenant, at Tenants expense.
5.05 Personal Property Taxes.
During the term of this Lease, Tenant shall pay before
delinquency any and all personal property taxes levied or assessed against any personal property
located upon the Premises. If Tenant fails to timely pay such taxes and a lien is filed against
the Premises, Landlord may discharge such lien, if Tenant fails to discharge such lien within ten
(10) days following Tenants 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
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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 Entire Premises,
Premises, Common Area and the appurtenances thereto, including the sidewalks and alleyways adjacent
thereto, with limits of liability no less than Five Million Dollars ($5,000,000) per occurrence and
in the aggregate.
B) Physical Property Damage Insurance. During the term hereof, Tenant shall keep Tenants
Building (excluding foundations, footings and underground improvements) as well as any and all
improvements on the Entire Premises and personal property insured in the name of Landlord and
Tenant against damage or destruction by fire and the perils commonly covered under the extended
coverage endorsement (with vandalism and malicious mischief coverage) including Builders Risk and
earthquake to the extent of not less than 100% of the full replacement cost thereof less any
deductible applicable to all of Tenants 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 Landlords consent, which consent is not to be unreasonably withheld or delayed. The
proceeds of such insurance in case of loss or damage shall be held in trust and applied on account
of the obligation of Tenant to repair and/or rebuild the Leased Premises pursuant to the Article
captioned Damage Clause to the extent that such proceeds are required for such purpose. The
insurance required to be carried by Tenant under this paragraph may be covered under a so-called
blanket policy covering other operations of Tenant and its affiliates. Upon written request,
Tenant shall name Landlord and any parties requested by Landlord and the holder of the first
mortgage on Tenants Building pursuant to a standard mortgage clause with respect to the foregoing
hazard insurance, provided such holder agrees with Tenant in writing to disburse such insurance
proceeds to Landlord for, and periodically during the course of, repair and restoration of
Tenants 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 Landlords 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
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to Landlord upon demand the full amount so paid and expended by Landlord. Any policies of
insurance obtained by Landlord covering physical damage to the Premises shall contain a waiver of
subrogation against Tenant if and to the extent such waiver is obtainable and if Tenant pays to
Landlord on demand the additional costs, if any, incurred in obtaining such waiver.
6.05 Insurance Money and Other Funds Held in Trust.
All insurance money or proceeds
received by the Tenant and/or Landlord shall be held in trust by Landlord and, except as
provided otherwise in Section 6.06, shall be applied as follows:
First, for the purpose of defraying the cost of repairing, restoring, replacing and/or
rebuilding any structure or improvement on or in the Premises as required as provided in Section
6.06 hereof; and Second, if the damaged or destroyed structure or improvement is not repaired,
restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed of as provided
in Section 6.06. Any of said funds in the hands of the Tenant at the end of the Term hereof shall
be disposed of as set forth in Section 6.06 (A).
6.06 Application or Proceeds of Physical Damage Insurance.
In case of any insurance
policies as described in Section 6.02 (B) (Physical Property Damage Insurance) the application
of insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article XVI hereof and, in the event of any such repair, replacement, restoration or rebuilding, the Tenant and
Landlord shall apply the proceeds of the insurance collected to the cost of such work upon certificate of
satisfactory progress and/or completion in form satisfactory to Tenant and Landlord by the licensed architect or
engineer in charge of the work. Any amounts payable to Tenant or any Affiliate of Tenant for work or services
performed or materials provided as part of any such repair, replacement, restoration or rebuilding shall
not exceed competitive rates for such services or materials and Tenant shall, upon request of Landlord,
make available to Landlord and its representatives all books and records of Tenant relating to such work,
services and materials. Upon completion of such repair, replacement, restoration or rebuilding in accordance with the
provisions of this Lease, and the full payment therefor (so no liens, encumbrances or claims with respect thereto
can be asserted against the Premises, this Lease, Landlord or Tenant), any insurance proceeds received by the
Tenant or Landlord with respect to the damage or destruction involved, and not used, shall be and remain
the property of Landlord.
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such
insurance proceeds or condemnation awards received and held by the Tenant and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(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 partys 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
8
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 Tenants Building or land or improvements adjoining
the Premises owned or leased by Landlord shall (if it can be so written and does not result in a
material additional premium) include provisions denying to the insurer subrogation rights against
the other party and any fee or leasehold mortgage to the extent such rights have been waived by the
insured prior to the occurrence of damage or loss. If the waiver of subrogation otherwise is not
effective, each party covenants that it will obtain for the benefit of the other party an express
waiver of any right of subrogation which the insurer of such party may acquire against the other
party by virtue of the payment of any such loss covered by such insurance. In the event either
party is by law, statute, governmental regulation, economically unleasable or other factor beyond
such partys 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 earners 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 Landlords written approval shall be first obtained, which approval shall not be
unreasonably withheld.
B) Tenant shall at all times keep the Entire Premises, Premises or any part thereof, free and
clear of all liens and claims for labor or material and free and clear of all attachments,
executions and notices.
(C) Upon termination of this Lease, Tenant may, at its option, remove any personal property
and trade fixtures including, but not limited to theatre seats, projection and sound equipment,
snack bar equipment and computers.
7.02 Repairs Maintenance.
Tenant shall, at its sole cost and expense, maintain and repair the Entire Premises and
Tenants Building and all improvements on the Entire Premises including all exterior lighting and
signs.
Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlords request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such payment has been made.
9
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.
8.2 Tenants 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
Tenants (or its agents, employees, contractors or invitees) acts or omissions brought upon,
stored, used, generated or released into the environment by Tenant, its agents, employees,
contractors or invitees (referred to as Tenants 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 Tenants 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 Tenants Environmental Acts. Landlord
agrees to indemnify, defend and hold Tenant harmless from all claims, judgments, damages,
10
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 Tenants
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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work.
In the event any investigation or monitoring of site conditions or any
clean-up, containment, restoration, removal or other remedial work (Remedial Work) is required (a)
under any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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
11
such Remedial Work; and if such Remedial Work is required for any reason other than Tenants
Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants invoice therefor, and if not timely paid by Landlord, in
additional to all other rights and remedies, Tenant shall have the right of offset against rent
which may become due. Neither party shall be obligated to perform Remedial Work under this Section
while it is contesting the application of any law, regulation or order, provided the other party is
not exposed to any additional liability, risk or damages. Obligations under this Section are solely
for the benefit of the parties, their successors, and assigns and any subtenants of this Lease, and
not for any other third parties.
8.04 Maintenance of Premises.
A) Tenant at its sole cost and expense shall keep and maintain the Entire 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 Entire Premises.
8.05 Landlords Responsibilities.
A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released into the environment or disposed of, on, in, under or about the Entire
Premises or any other portion of the Premises by Landlord, its agents, employees, contractors or
invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any
12
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 Landlords or Landlords other tenants use, handling, storage or
disposal of Hazardous Materials.
8.06 Landlord Inspection.
Landlord and Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenant Improvements.
(A) Tenant at its sole cost and expense shall complete all the required on-site and off-site
improvements, including all signs, required for the development of the Entire Premises. In
addition Tenant shall construct a motion picture theater building on the Premises containing
approximately fifty-four thousand eight hundred sixty (54,860) square feet with sixteen
auditoriums.
(B) Landlord agrees to provide Tenant with an improvement allowance of up to a maximum of
Four Million Six Hundred Sixty-Three Thousand One Hundred Dollars ($4,663,100) $85 per square
foot-(Tenant Allowance). Tenant shall pay any difference between the total Tenant Building and
improvement cost less the Tenant Allowance. Landlord agrees that it shall pay to Tenant, or at
Tenants direction, to Tenants contractor, within fifteen (15) days following Landlords receipt
of conditional lien waivers signed by its contractor, in form reasonably sufficient to waive lien
rights in Sacramento County, California, an amount equal to the Tenant Allowance multiplied by the
percentage of work completed as of the date of the lien waivers, less any installments of Tenant
Allowance already paid. If the total contract for Tenants Work exceeds Tenants Allowance,
Landlord shall only be required to pay its pro-rata share which shall be the ratio of Tenants
Allowance to the total of Tenants Work. If Landlord disputes any portion of the request for
payment by Tenant due to faulty or incomplete work, then Landlord shall withhold a sum which, in
Landlords opinion would be required to correct or complete the disputed work. In this event,
Landlord shall submit a written punch list to Tenant. In addition Landlord agrees to provide
Tenant with a Site Allowance up to a maximum of One Million Seven
Hundred Sixty Eight Four Hundred
Forty Eight ($1,768,448) Dollars.
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Anything above to the contrary notwithstanding, Landlord shall no obligation to pay any
portion of the construction allowance if Tenant is then in default of any of the terms and
provisions of this Lease.
9.02 Hold Harmless.
Except to the extent attributable to the intentional or negligent acts or
omissions of Landlord or Landlords agents, employees, contractors, tenants, or invitees. Tenant
shall indemnify, protect, defend and hold harmless Landlord and the Premises from and against all
claims and liabilities arising by virtue of or relating to construction of by Tenant of Tenants
Building or Improvements or repairs made at any time to the Premises including repairs, restoration
and rebuilding and all other activities of Tenant on or with respect to the Premises. If Tenant is
required to defend any action or proceeding pursuant to this Section to which action or proceeding
Landlord is made a party, Landlord shall also be entitled to appear, defend, or otherwise take part
in the matter involved, at its election, by counsel of its own choosing, and to the extent Landlord
is indemnified under this Section, Tenant shall bear the cost of Landlords defense, including
attorneys fees; provided, however, Tenant shall be liable for attorneys fees only if single legal
counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant without there
arising an actual or potential conflict of interests.
9.03 Permits: Compliance With Codes.
All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership of Improvements.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein excluding moveable trade fixtures and personal property of Tenant,
shall become the property of Landlord, unless and to the extent Tenant elects to remove any of the
foregoing pursuant to Section 9.04 (B).
B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord provided, Tenant replaces
all items removed with items of similar quality or better quality and the foregoing shall remain
the property of the Tenant at the expiration or earlier termination of the Lease. In addition,
Landlord shall have the right if Landlord so elects by giving written notice to Tenant of such
election at any time before ninety (90) days prior to the end of the Term (including any renewals
or extensions) hereof to remove at Tenants sole cost any other Improvements and all additions,
alterations and improvements thereto or replacements thereof erected, constructed, or installed on
the Premises. The removal of any of the foregoing shall be completed within thirty (30) days
following the end of the Term hereof (including any renewals thereof or any earlier termination
permitted by this Lease.
9.05 Control.
Notwithstanding anything to the contrary in this Lease, during the Term of this
Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
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10.1 Landlords Indemnity.
Except to the extent attributable to the intentional and
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), directly or indirectly arising out of or attributable to (i) any intentional or
negligent act or omission of Tenant, its agents, employees, licensees, invitees or contractors on
the Leased Premises, occurring within the Leased Premises or (ii) arising from Tenants or its
employees use of the Leased Premises.
10.2 Tenants Indemnity.
Except to the extent attributable to the intentional and negligent
acts or omissions of Tenant and its agents, employees, tenants, licensees and contractors, Landlord
shall indemnify, pay and protect, defend and hold harmless (with counsel reasonably approved by
Tenant) and save Tenant (and its successors, assigns and subletees), and all of their directors,
officers, employees and agents, hereinafter referred to as Tenant Indemnities, from and against
any claims, demand, damages, injuries, costs, expenses, losses, liabilities, causes of action,
interest, fines, charges and penalties (including reasonable legal fees and expenses in enforcing
this indemnity and hold harmless), directly or indirectly arising out of or attributable to (i) any
intentional or negligent act or omission of Landlord, its agents, employees, licensees, invitees on
the Entire Premises or contractors, occurring within the Entire Premises, or (ii) arising from
Landlords use of the Entire Premises.
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
Landlords approval which shall not be unreasonably withheld, provided Tenant remains liable for
all Tenant obligations under this Lease, and any sublease shall be subject to all the provisions
of this Lease. Landlord shall be entitled to all rent from any assignment or sublease in excess of
the Annual Fixed Rent set forth in this Lease.
B) Any assignment of this Lease or any sublease of a portion or all of the Premises shall be
subject to the terms and conditions of this Lease.
C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without Landlords consent, assign this Lease (a) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (b) to Tenants Parent Corporation, or (e) to any corporation
which acquires 50% or more of the issued and outstanding voting stock (or such lesser percentage
as shall be sufficient to acquire voting control) of Tenant or of Tenants Parent Corporation,
provided that such corporation duly and validly then guarantees the performance of the obligations
under this Lease.
11.02 Notice to Landlord.
Tenant shall give notice to Landlord in writing of any assignment
of the Lease ten (10) days prior to such event.
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ARTICLE
XII
MORTGAGE SUBORDINATION
12.01 Existing Mortgages
. If there is an existing mortgage or deed of trust (Mortgage) lien
affecting the interest of Landlord in the Premises or in any other part of the Entire Premises,
then Landlord shall obtain and shall deliver to Tenant within fifteen (15) days after the Effective
Date, a non-disturbance and attornment agreement in a form reasonably acceptable to such lender,
Landlord and Tenant, executed by the Mortgagee (as defined below), wherein the Mortgagee shall
agree to recognize the interest of Tenant and abide by the terms of this Lease in the event of any
judicial foreclosure, private sale or deed in lieu of foreclosure, including the right to quiet
enjoyment of the Premises, without any condition, limitation or restriction.
12.02 Future Mortgages
. The rights of Tenant under this Lease shall be, at the option of
Landlord, either subordinate or superior to any future mortgage on Landlords interest in the
Premises in favor of an institutional lender not affiliated with Landlord. Provided however, that
as a condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of
trust and their successors and assigns (the Mortgagee) shall agree to recognize the interest of
Tenant and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.
ARTICLE XIII
CONDEMNATION EMINENT DOMAIN
13.01 Definitions.
The following definitions apply in construing provisions of this Lease
relating to a taking of or damage to all or any part of the Entire Premises or Improvements or
Parking or any interest in them by eminent domain or inverse condemnation:
A) Taking means that taking or damaging, including severance damage, by eminent domain or by
inverse condemnation for any public or quasi-public use under any statute. The transfer of title
may be either a transfer resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation,
in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. The
Taking shall be considered to take place as of the date on which the right to compensation and
damages accrues under the law applicable to the Premises, unless the condemnor also takes actual
physical possession of the Premises or a part thereof, in which case the date of Taking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues or the date physical possession is taken by the condemnor.
B) Total Taking means the Taking of the fee title to the Entire Premises and the
Improvements on the Premises, which shall be considered to include any offsite improvements
effected by Tenant to serve the Premises or the improvements or the parking on the Entire Premises.
C) Partial Taking means any Taking (including any damaging) of a portion of the Premises, 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.
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E) Award means compensation paid for the Taking, whether pursuant to judgment or by
agreement or otherwise.
13.02 Notice to Other Party
. The party hereto receiving any notice of the kinds specified
below shall promptly give the other party notice of the receipt, contents, and date of the notice
received:
A) Notice of Intended Taking;
B) Service of any legal process relating to condemnation of the Premises or
improvements;
C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or
D) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer
in lieu of condemnation.
13.03 Total Taking Effect on Rent and Term
. On a Total Taking, Tenants obligation to pay
Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the date of
Taking, at which time this Lease shall terminate.
13.04 Distribution of Award for Taking
. On a Taking, all sums, including, but not limited to,
damages and interest awarded for the value of the real estate taken, shall be apportioned and paid
by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any for the Fair Market Value of all Land, buildings
and other improvements on the Entire Premises and all Severance Damages.
B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost profits,
relocation expenses and fixtures; and
C) To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.
13.05 Partial Taking Rent Adjustments
. On a Partial Taking, the Lease shall remain in full
force and effect covering the remaining Premises, except that the total Rent as otherwise provided
herein shall be reduced in the same ratio as the percentage of the area of the Premises or the
parking taken bears to the total area of the Premises or the parking.
13.06 Partial Taking Option to Terminate
. Notwithstanding anything herein to the contrary,
in the event of a Partial Taking, if more than thirty-three percent (33%) of the Building or
thirty-three (33%) of the parking is taken by condemnation or sold under the threat of
condemnation, then Tenant may terminate this Lease as of the date the condemning authority takes
title or possession, whichever occurs first, by delivering written notice to the other within ten
(10) days after receipt of written notice of such taking (or in the absence of such notice, within
ten (10) days after the condemning authority takes possession).
13.07 Separate Tenants Award
. In the event of a Taking, Tenant may
make a separate claim with
respect to lost business, lost profits, goodwill, moving expenses, fixtures and relocation expenses
against the acquiring governmental Agency.
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ARTICLE
XIV
DEFAULT
14.01 Tenants Default
. The occurrence of any of the following shall constitute a default
or event of default by Tenant:
A) Failure to pay Annual Fixed Rent or any other monetary amount when due as provided herein,
if the failure continues for ten (10) days after first written notice has been given to Tenant by
Landlord;
B) Failure to perform any of Tenants non-monetary obligations under this Lease; provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure each
such default. If Tenant cannot reasonably cure such default within said thirty (30) day period,
Tenant shall not be in default of this Lease if Tenant commences to cure the breach within the
thirty (30) day period and diligently and in good faith continues to cure the breach.
14.02 Landlords Remedies Cumulative
. Landlord shall have the following remedies set
forth in subsections (A) through (G) below if Tenant commits a default, except as provided in
Section 15.03. These remedies are not exclusive and may be exercised concurrently or successively;
they are cumulative in addition to any remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and thereupon
Landlord may expel all persons and remove all property therefrom, without becoming liable to
prosecution therefor, and relet the Premises or a portion or portions thereof, and receive the
rent therefrom, applying the same first to the payment of the reasonable expenses of such re-entry
and the reasonable cost of such reletting, and then to the payment of the Rent and other amounts
for which Tenant is then in default; the balance, if any, to be paid to Tenant, who, whether or not
the Premises are relet, shall remain liable for any deficiency. It is agreed that the commencement
and prosecution of any action by Landlord in forcible entry and detainer, ejectment, or otherwise,
or the appointment of a receiver, or any execution of any decree obtained in any action to recover
possession of the Premises, or any re-entry, shall not be construed as an election to terminate
this Lease unless Landlord shall, in writing, expressly exercise its election to declare the Lease
Term hereunder ended and to terminate this Lease, and unless this Lease be expressly terminated,
such re-entry or entry by Landlord, whether had or taken under summary proceedings or otherwise,
shall not be deemed to have absolved or discharged Tenant from any of its obligations and
liabilities for the remainder of the Lease Term. Notwithstanding anything to the contrary or other
provisions of this Section 14.02(B), Tenant shall have the right to sublet the Premises, assign its
interest in the Lease, or both, subject to Landlords prior right, during any continuance of
Tenants default, to relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees 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;
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(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 Tenants failure to perform his obligations under the Lease or which, in the
ordinary course of things, would be likely to result therefrom.
D) Definitions. As used herein, the following phrases shall be interpreted as
follows:
(1) The worth, at the time of the award, as used in subsections 14.02(C)(1) and (2) above,
is to be computed by allowing interest at the maximum lawful rate. The worth, at the time of the
award, as referred to in subsection 14.02(C)(3) above, is to be computed by discounting the amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus
one percent (1%).
(2) As used herein, the term time of award shall mean either the date upon which Tenant pays
to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of entry of any
determination, order, or judgment of any court or other legally constituted body determining the
amount recoverable, whichever first occurs.
E) Surrender. Promptly after notice of termination, Tenant shall surrender and vacate the
Premises and all improvements in broom-clean condition, and Landlord may re-enter and take
possession of the Premises and all remaining improvements and eject all parties in possession or
eject some and not others, or eject none. Termination under subsection 14.02(C) shall not relieve
Tenant from the payment of any sum due to Landlord or from any claim for damages previously accrued
or then accruing against Tenant.
F) Appointment of Receiver. If Tenant defaults under Section 14.02(C), Landlord shall have the
right to have a receiver appointed to collect rent from any subtenants. Neither the filing of a
petition for the appointment of a receiver nor the appointment itself shall constitute an election
by Landlord to terminate this Lease.
G) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in default
under Section 14.01 herein, may cure the default at Tenants expense. If Landlord, at any time, by
reason of Tenants 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 ten percent (10%) per annum computed from the date of such expenditure until the date
of reimbursement by Tenant.
14.03 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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
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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
Tenants written demand, Tenant shall be entitled to offset any amount due from Landlord against
the next Rent payment due under this Lease.
14.04 Waiver of Redemption
. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being dispossessed or removed
from the Premises upon the termination of this Lease because of default by Tenant hereunder.
14.05 Dispute Resolution
. Landlord and Tenant desire by provisions of this Section 14.05 to
establish procedures to facilitate the informal and inexpensive resolution of any dispute arising
out of this Lease by mutual cooperation and without resort to litigation. To accomplish this
objective, Landlord and Tenant agree to follow the procedures set forth below if and when a dispute
arises between them under this Lease.
A) Description of Dispute. The complaining party shall provide by notice a written description
of the alleged breach by the other party. This description shall explain the nature of the
complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act. The party receiving the letter of complaint must respond in writing within ten (10) days
with an explanation, including references to the relevant parts of the Lease and a response to the
proposed solution. Within ten (10) days of receipt of this response, the parties must meet and
discuss options for resolving the dispute. The complaining party must initiate the scheduling of
the resolution meeting.
B) Mediation. A settlement conference shall be held within thirty (30) days of the
unsuccessful resolution meeting or as soon as practical thereafter.
C) Arbitration. With respect to disputes which the parties have been unable to resolve
informally or by mediation, the parties agree to submit the dispute for final and binding
arbitration if the dispute has not otherwise been settled. The parties agree that the arbitration
must be initiated within one (1) year after the date of the written description of the alleged
breach and that the failure to initiate arbitration within the one (1) year period constitutes an
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated for the
purposes of this section by demand therefor being sent by certified mail to the other party, which
notice shall contain a description of the dispute, the amount involved and the remedies sought. The
parties shall have the right to representation by counsel throughout the arbitration proceedings.
Arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration
Association.
14.06 Attornevs Fees
. Should any action or proceeding, be commenced between the
parties to this Lease concerning said Premises, this Lease, or the rights and duties of
either in relation thereto, the party, Landlord, or Tenant, prevailing in such action or
proceeding shall be entitled, in addition to such other relief as may be granted in the
action or proceeding, to a reasonable sum as and for its attorneys fees therein which
shall be determined by the arbitrator(s) hearing such action or proceeding.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES
15.01 Landlords Representations and Warranties
. Landlord represents and warrants:
A) Landlord is the fee owner of the Premises.
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B) The persons executing this Lease in behalf of Landlord are authorized to execute the same
on behalf of Landlord and Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Entire Premises is vested in Landlord, subject to no defects or
encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord prior to the
Effective Date.
G) Except for liens or encumbrances created by or through
Tenant, or based upon Impositions which are the responsibility of Tenant under
this Lease, Landlord shall not, after the date hereof, agree to or create or
permit or suffer to be created any liens or encumbrances on the Premises which
are (i) not specifically stated in writing to be junior to this Lease, or any
New Lease (as defined herein), or (ii) which are inconsistent with the
obligations of Landlord hereunder, and Landlord shall, at or prior to the
commencement of the Term, cause the Premises to be free of all liens and
encumbrances. Title to the Premises shall be free of all Objected Exceptions.
15.02
Tenants
Representations and
Warranties
. Tenant represents and warrants:
A) Tenant is a Delaware corporation in good standing.
B) The persons executing this Lease in behalf of Tenant are authorized to execute the same on
behalf of Tenant and Tenants obligations under this Lease are legally binding, do not require the
consent of any other parties and do not violate the provisions of any agreement to which Tenant is
a party.
C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.01 Repairs. Alterations and Further Improvements
.
In the event of damage to or destruction of the Tenants Building or any Improvements on or to
the Premises whether or not covered by the insurance described in Article 6: Tenant shall effect,
at Tenants sole cost and Landlord and Tenant agree that the funds derived from insurance acquired
pursuant to Article 6 shall be made available to effect, such repair and reconstruction of the
structure or improvement so
damaged or destroyed to substantially its condition prior to said damage or destruction with
such alterations thereto as Tenant shall reasonably determine prudent or valuable under the
circumstances, including any changes required to comply with applicable law, with the then
prevailing construction practices applicable to the Premises. Tenant shall be responsible for all
costs in excess of Insurance proceeds available All such work shall be carried on in accordance with
Drawings prepared by a licensed architect or architects approved by
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Landlord (acting reasonably) if such an architect is reasonably required, given the scope and
nature of the work. In disbursing insurance proceeds the Tenant and Landlord may rely upon and
accept the certified determinations of such architect with respect to estimated costs, awarding of
contracts, sufficiency of bonds, progress of construction, interpretation of plans and
specifications, compliance with same, and completion of construction. No extras or changes in
Drawings shall be made by Tenant without first giving written notice of such changes to Landlord
and obtaining Landlords approval thereof (which approval shall not be unreasonably withheld or
delayed).
If such reconstruction or rebuilding cannot be made under then existing laws, ordinances,
statutes or regulations of any governmental authority applicable thereto, the Lease shall Terminate
and any insurance proceeds shall become the property of Landlord.
16.02 Prompt Repair
. If Tenant, pursuant to the terms hereof, is obligated or elects to
repair, replace, reconstruct or rebuild any structures, improvements or other property as
hereinabove provided, the same shall be effected at Tenants cost and expense (which may be paid
from insurance proceeds available as above provided and subject to the provisions of subparagraph
(B) of Section 16.01), and Tenant shall diligently commence and continuously carry out such repair,
replacement, reconstruction or rebuilding, to full completion as soon as possible, except to the
extent of delays due to strikes, lockouts, shortages of labor or materials alter due diligence in
obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act of the public
enemy, or other causes beyond the reasonable control of Tenant after the exercise of due diligence,
including diligence in contracting, and the exercise of rights under contracts, with contractors
and suppliers.
16.03 Rent Adjustment
. This Lease and the Term shall not terminate or be terminated because of
damage to or destruction of any structure or improvement on or in the Premises except under and in
accordance with the provisions hereinabove contained. If such damage or destruction occurs and
renders all or a portion of the Improvements on the Premises untenantable, Rent shall thereafter
not abate but continue for as long as and to the extent such Improvements are untenantable.
16.04 Damage During Last Two (2) Years of Term
. If there occurs during the last two (2) years
of the Initial Term or at any time during a Renewal Period damage or destruction to any Improvement
on or in the Premises and the costs of repairing, restoring, replacing or rebuilding the same
exceed Five Thousand Dollars
($500,000), then Tenant may elect to terminate the Term and, in such event, Tenant shall give
notice to Landlord of its election within sixty (60) days after its determination of the amount of
damage, and the Term shall thereupon terminate as of the date of such notice and all insurance
proceeds shall become the property of Landlord.
ARTICLE XVII
MISCELLANEOUS
17.01 Limitation on Liability
. The liability of Landlord hereunder or in connection with
the Premises or Entire Premises shall be limited to its interest in the Entire Premises and in no
event shall any other assets of Landlord be subject to any claim arising out of or in connection
with the Entire Premises.
17.02 Brokers.
Landlord and Tenant each represent to the other that neither has any obligation
to any broker or finder in connection with this transaction, and that no fee or commission is due
any broker, finder, or similar person in connection herewith. Landlord and Tenant each indemnifies
the other and agrees to hold the other harmless
from and against any and all claims, demands, liabilities, lawsuits, costs, and expenses
(including reasonable attorneys fees) for any fee or commission due to any other broker, finder,
or similar person in connection with this transaction and arising out of the act of the
indemnifying party.
22
17.03 Modification
. No modification, waiver, amendment, discharge, or change of this Lease
shall be valid unless the same is in writing and signed by the party against which the enforcement
of such modification, waiver, amendment, discharge, or change is or may be sought.
17.04 Severability
. In the event any term, covenant, condition, provision, or agreement
contained herein is held to be invalid, void, or otherwise unenforceable, by any court of competent
jurisdiction, such holding shall in no way affect the validity or enforceability of any other term,
covenant, condition, provision, or agreement contained herein.
17.05 Governing Law
. This Lease and the obligations of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of California and
each provision of this Lease shall be valid and enforceable to the fullest extent permitted by Law.
17.06 Terminology
. All personal pronouns used in this Lease, whether used in the masculine,
feminine, or neuter gender, shall include all other genders; the singular shall include the plural
and vice versa. Business Day means other than a Saturday, Sunday, or holiday. In the event that
the time for performance of an act under this Lease falls on a Saturday, Sunday, or holiday, the
date for performance of such act shall be extended to the next Business Day.
17.07 Counterparts
. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original agreement, and all of which shall constitute one agreement by
each of the parties hereto.
17.08 Binding Effect
. Except as otherwise herein provided, this Lease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.
17.09 Captions
. Article and section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend, or describe the scope
of this Lease or any provisions hereof. All reference to section numbers herein shall mean the
sections of this Lease.
17.10 Notices to Landlord and Tenant
.
A) Except as otherwise in this Lease provided, a bill, demand, statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 17.11 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the identity and
address of Tenants Leasehold Mortgagee, Landlord shall give such party any notice served upon
Tenant hereunder by certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private express
courier (postage fully prepaid), addressed to Landlord to the addresses set forth in Section 17.11
below or at such other address(es) as Landlord shall designate by notice given as herein provided.
If Tenant is notified of the identity and address of Landlords 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
23
after the same is mailed, or (iii) if the notice is sent by private overnight courier (e.g.,
Federal Express or similar courier), one (1) day after the same is delivered to or picked up by
such courier. Rejection or refusal to accept a notice, request, demand, or the inability to deliver
same because of a changed address of which no notice was given shall be deemed to be a receipt of
the notice, request or demand sent..
17.11 Addresses for Notices to Landlord and Tenant
.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn.: Real Estate Department
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To Tenant
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Century Theatres, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
17.12 Entire Agreement
. This Lease and the exhibits attached set forth the entire
agreement between the parties. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever as to any matter. Any prior agreements, conversations, or
writings are merged herein, superseded hereby, and extinguished.
17.13 Sale or Transfer of Premises
. Landlord shall promptly notify Tenant in writing of
any sale or transfer of the Premises or any assignment of Landlords 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 Landlords interest in this Lease or any change in, or transfer of,
title in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of
Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other charges
payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been notified
in writing of such transfer, assignment, or change in title, and given satisfactory proof thereof,
and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in the
meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease and
convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that the
assignee assumes in writing Landlords obligations hereunder accruing on and after the effective
date of the assignment.
17.14 Force Majeure
. In the event that Tenant shall be delayed or hindered in or prevented
form the performance of any act other than Tenants 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, dots, insurrections, the default of Landlord,
war, or other reason beyond its control, then performance of such act shall be excused for the
period of the delay, and the period for the performance of such act shall be extended for a period
equivalent to the period of
such delay. Notwithstanding the foregoing, lack of funds shall not be deemed to be a cause
beyond the control of Tenant.
17.15
Waiver
. No term, covenant, or condition of this Lease can be waived except in writing,
signed by the party making the waiver, Landlord or Tenant, as the case may be. No waiver of any
default
24
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 partys
consent to or approval of any subsequent similar act.
17.16 Estoppel Certificate
. Either party hereto shall, within twenty (20) days notice from the
other party (referred to as the Requesting Party), execute and deliver to the Requesting Party,
in recordable form, a certificate stating that this Lease is unmodified and in full force and
effect, or in full force and effect as modified, and stating the modifications. The certificate
also shall state the amount of current monthly rent, the dates to which the rent has been paid in
advance, the amount of prepaid rent, and any other information with respect to this Lease
reasonably requested by the Requesting Party. Failure to deliver the certificate within the twenty
(20) days shall be conclusive upon the party failing to deliver the certificate for the benefit of
the party requesting the certificate and any successor to the party requesting the certificate,
that this Lease is in full force and effect, and has not been modified except as may be represented
by the party requesting the certificate, and that rent and other charges have not been paid for any
period after date of the notice requesting the certificate.
17.17 Number and Gender
. Whenever the context requires the singular number, it shall
include the plural, the plural the singular, and the use of any gender shall include all genders.
17.18 No Holding Over
. Tenant shall have no right to holdover after the end of the Term.
Should Tenant or any Leasehold Mortgagee succeeding to the interest of Tenant hold over in
possession after the expiration date, such holding over shall not be deemed to extend the Lease or
renew this Lease; and Tenant shall pay a pro-rated daily amount equal to one hundred twenty percent
(120%) of the Annual Rent in effect immediately preceding the expiration date until Tenant vacates
the Premises.
17.19 Mechanics Liens
. Tenant shall discharge, by payment, bonding or otherwise, any mechanics
liens filed against the Premises or the Entire Premises in connection with Tenants work and/or any
alterations or other work done by or on behalf of Tenant in the Premises within thirty (30) days
after Tenant receives notice of the filing of such lien, and Landlord shall cooperate with Tenant
at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail to so
discharge any such mechanics lien, Landlord shall have the right to remove such mechanics liens and
charge all costs thereof, including without limitation, reasonable attorneys fees, to Tenant as
additional rent plus interest at 18%.
17.20 Relationship of Parties
. Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord and Tenant. Nothing contained
herein shall in any way impose any liability upon the stockholders, officers or directors of
Landlord or stockholders, officers, directors or trustees of Tenant should such parties be
corporate entities.
17.21 Time of the
Essence
. Time is of the essence with respect to Tenants payment of rent and
other monetary obligations to Landlord under this Lease.
17.22 Facsimile Copies
. Tenant and Landlord (i) have each agreed to permit the use, from time
to time and where appropriate, of telecopied signatures in order to expedite the transaction
contemplated by this Lease, (ii) each intend to be bound by its respective telecopied signature,
(iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
25
17.23 Anti-Merger
. The voluntary or otherwise surrender of this Lease by Tenant, or a mutual
cancellation of this Lease shall not work a merger but shall at the option of Landlord either:
A) Terminate any existing subleases or subtenancies; or
B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
Executed as of the date first written above.
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TENANT:
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CENTURY THEATRES, INC.,
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a Delaware Corporation
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By: /s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: Senior Executive V.P.
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LANDLORD:
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SYUFY ENTERPRISES
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a California Limited Partnership
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By: /s/ Raymond Syufy
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Print Name: Raymond Syufy
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Title: GP
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26
EXHIBIT
10.30(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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ARTICLE X: Indemnity
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10.01 Indemnification
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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11.02 Notice to Landlord
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ARTICLE XII: Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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13.02 Future Mortgages
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ARTICLE XIV:
Condemnation Eminent Domain
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14.01 Definitions
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14.02 Notice to Other Party
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14.03 Total Taking Effect on Rent and Term
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14.04 Distribution of Award for Taking
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14.05 Partial Taking Rent Adjustments
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14.06 Partial Taking Option to Terminate
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14.07 Separate Tenants Award
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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15.04 Waiver of Redemption
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15.05 Dispute Resolution
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15.06 Attorney Fees
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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16.02 Tenants Representations and Warranties
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ARTICLE XVII: Damage or Destruction
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17.01
Repairs, Alterations and Further Improvements
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17.02 Prompt Repair
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17.03 Rent Adjustment
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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18.02 Modification
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18.03 Severability
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18.04 Governing Law
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18.05 Terminology
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18.06 Counterparts
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18.07 Binding Effect
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18.08 Captions
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18.09 Notice to Landlord and Tenant
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18.10 Addresses for Notices to Landlord and Tenant
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18.11 Entire Agreement
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18.12 Sale or Transfer of Premises
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18.13 Force
Majeure
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18.14 Waiver
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18.15 Estoppel Certificate
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18.16 Number and Gender
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18.17 No Holding Over
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18.18 Mechanics Liens
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18.19 Relationship of Parties
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18.20 Time of the Essence
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18.21 Facsimile Copies
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18.22 Anti-Merger
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Signature Page
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A Description of Premises
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A-l
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Exhibit B Site Plan of Premises
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B-l
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Exhibit C Form of Memorandum
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C-l
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Exhibit D Guaranty of Lease
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D-l
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF NEVADA, INC., a Nevada corporation with an
office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land located in the State of Nevada as set forth in
Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October 1,1995.
The term Effective Date shall mean October 1,1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to
pay interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October 1,1995.
The term Initial Term is defined in Section 2.02 herein.
1
The term Leased Premises shall mean Tenants 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 three percent (3%)
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 Tenants 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 Tenants option, extend the Initial Term of this Lease for up to
two (2) years 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 appurtenances appertaining thereto.
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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 Landlords insurance or
liability.
C) Tenant is granted all of Landlords rights under the Rancho Santa Fe Center CC&Rs. Tenant
shall be responsible for all costs pertaining to the Rancho Santa Fe Center CC&Rs.
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 $10,000.00. 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, Las Vegas 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 3% 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
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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 Landlords 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 Landlords 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 dairy 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.
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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 Tenants premises subject to the Installment Election, Tenants
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 Landlords 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 Landlords
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
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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 Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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
Tenants 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 Landlords 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 of destruction involved, and not
used, shall remain the property of Landlord.
8
A) Distribution of Unutilized Proceeds. At the termination of this Lease, such
insurance proceeds or condemnation awards received and held by the Landlord and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(1)
First
, Landlord shall be awarded an amount sufficient to remove any improvements
not repaired and to return the Property to the level of adjacent streets (grade level); and
(2)
Second
, any remainder shall be paid to Landlord.
6.07 Cooperation for Insurance Proceeds. Landlord and Tenant shall each cooperate with the
other in order to obtain the largest possible recovery and execute any and all consents and other
instruments and take all other actions reasonably necessary or desirable to effectuate the same
and cause such proceeds to be paid as hereinbefore provided. Notwithstanding anything to the
contrary contained in this Lease, neither party shall carry any insurance concurrent in
coverage and contributing in the event of loss with any insurance required to be furnished by the
other hereunder if the effect of separate insurance would be to reduce the protection or the
payment to be made under such partys 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 Tenants
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 partys 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 Landlords written
approval shall be first obtained.
9
B)
Tenant shall at all times keep the Premises or any part thereof, free and clear of all
liens and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon
termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.
7.02
Repairs Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and
make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01
Definition. For purposes of this Article VIII, the term Hazardous Material means (a) any
substance, product, waste or other material of any nature whatsoever which is or becomes listed,
regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq. (RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.;
the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste Control Act,
Health and Safety Code Section 25100, et seq.; the California Hazardous Substance Account Act,
Health and Safety Code Section 25330, et seq.; the California Safe Drinking Water and Toxic
Enforcement Act, Health and Safety Code Section 25249.5, et seq.; California Health and Safety
Code Section 25280, et seq. (Underground Storage of Hazardous Substances); the California
Hazardous Waste Management Act, Health and Safety Code Section 25170.1, et seq.; California Health
and Safety Code Section 25501, et seq. (Hazardous Materials Response Plans and Inventory); or the
California Porter-Cologne Water Quality Control Act, Water Code Section 13000, et seq., all as
amended, or any other federal, state or local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to, or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, as now or at any time
hereafter in effect; (b) any substance, product, waste or other material of any nature whatsoever
which may give rise to liability under any of the above statutes or under any statutory or common
law theory based on negligence, trespass, intentional tort, nuisance or strict liability or under
any reported decisions of a state or federal court;
(c) petroleum or crude oil, other than
petroleum and petroleum products contained within regularly operated motor vehicles; (d) asbestos;
(e) subsurface gas; (f) urea formaldehyde foam insulation; (g) poly chlorinated byphenyls
(PCBs); and freon and other chloroflurocarbons.
8.02 Tenants 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
Tenants (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 Tenants
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
Tenants 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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords 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, (e) 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
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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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants 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,
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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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants Related
Parties), harmless from and against any claims (including, without limitation, third party
claims for personal injury or real or personal properly 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 parries for loss or damage due to
such Hazardous Materials.
8.06 Landlord Inspection. Landlord and Landlords 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 Landlords agents and employees shall have the
right, but not the obligation, without limitation upon any of Landlords other rights and
remedies under this Lease, to immediately enter upon the Premises and to discharge Tenants
obligations under this Article VIII at Tenants expense, notwithstanding any other provisions
of this Lease. Landlord and Landlords agents and employees shall endeavor to minimize
interference with Tenants business. All sums reasonably disbursed, deposited or incurred by
Landlord in connection therewith, including, but not limited to, all costs, expenses and
actual attorneys fees, shall be due and payable by Tenant to Landlord, as an item of
additional rent, on demand by Landlord, together with interest thereon at the rate often
percent (10%) per annum.
8.07
Effect of Termination.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not,
to the best of Tenants 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 Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy or
marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however
. Tenant shall be liable for attorneys 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 properly of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof shall become the property of Landlord and all
appurtenant fixtures, machinery and equipment installed therein including moveable trade fixtures
and personal property of shall become the properly of Tenant.
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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
Tenant 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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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, Tenants obligation to
pay Rent shall terminate on, and Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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 of 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees Right to Possession. No act by Landlord, other than
giving Tenant written notice of termination of this Lease, shall in feet 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 Tenants 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© shall not relieve
Tenant from the payment of any sum due to a 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) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in default
under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any time, by
reason of Tenants 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 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
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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 me 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 Tenants 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 Tenants 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) Tenants 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 Tenants 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
Tenants 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 Nevada 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 Tenants
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Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private express
courier (postage fully prepaid), addressed to Landlord to the addresses set forth in Section 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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of Nevada, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
24
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in
writing Landlords 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 Tenants 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 parrys 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 Tenants work and/or any
alterations or other work done by or on behalf of Tenant in the Premises within thirty (30) days
after Tenant receives notice of the filing of such lien, and Landlord shall cooperate with Tenant
at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail to so
discharge any such mechanics lien, Landlord shall have the right to
remove such mechanics liens and
charge all costs thereof, including without limitation, reasonable attorneys fees, to Tenant as
additional rent plus interest at 18%.
18.19 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord
and Tenant. Nothing contained
herein shall in any way impose any liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees of
Tenant should such parties be corporate entities.
18.20 Time of the Essence. Time is of the essence with respect to Tenants 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:
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CENTURY THEATRES OF NEVADA, INC., a Nevada Corporation
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By:
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/s/ Joseph Syufy
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Print Name:
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Joseph Syufy
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Title:
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V.P.
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LANDLORD:
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title
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G.P.
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26
EXHIBIT
10.31(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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l
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ARTICLE I: Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent / Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Proration of Taxes
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6
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5.03 Exceptions from Impositions;
Charges in Lieu of Impositions
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01 Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-1
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Exhibit B
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Site Plan of Premises
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B-1
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Exhibit C
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Form of Memorandum
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C-1
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Exhibit D
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Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC. a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02. Definitions
.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October 1, 1995.
The term Effective Date shall mean October 1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%)
or (ii) the highest rate of interest that my lawfully be charged to the party then required to pay
interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
1
The term Leased Premises shall mean Tenants 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 Tenants 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 Tenants 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 Landlords 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 Landlords
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 Landlords 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 Tenants premises subject to the Installment Election, Tenants
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 Landlords 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 Landlords 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 Landlords 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 Tenants 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)
Builders 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 builders 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
Tenants 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 Tenants 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 Landlords 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 Tenants 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
Tenants 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
Landlords 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.
8
A)
Distribution of Unutilized Proceeds
. At the termination of this
Lease, such insurance proceeds or condemnation awards received and held by the Landlord and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(1)
First,
Landlord shall be awarded an amount sufficient to remove any improvements
not repaired and to return the Property to the level of adjacent streets (grade level); and
(2)
Second
, any remainder shall be paid to Landlord.
6.07
Cooperation for Insurance Proceeds
. Landlord and Tenant shall each cooperate with
the other in order to obtain the largest possible recovery and execute any and all consents and
other instruments and take all other actions reasonably necessary or desirable to effectuate the
same and cause such proceeds to be paid as hereinbefore provided. Notwithstanding anything to the
contrary contained in this Lease, neither party shall carry any insurance concurrent in coverage
and contributing in the event of loss with any insurance required to be furnished by the other
hereunder if the effect of separate insurance would be to reduce the protection or the payment to
be made under such partys 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
Tenants 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 partys 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 Landlords
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
Tenants 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
Tenants (or its agents, employees, contractors or invitees)
acts or omissions brought upon, stored, used, generated or released into the
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environment by Tenant, its agents, employees, contractors or invitees (referred to as Tenants
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
Tenants 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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees, beneficiaries,
officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants 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 Tenants 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
Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy or
marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense,
including attorneys fees;
provided,
however,
Tenant shall be liable for attorneys 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.
14
B) During the term of this lease, Tenant shall have the right to replace any of the trade
fixtures, theatres seats, projection equipment, furniture, other equipment and personal property
from time to time; provided, however, that such replacement fixtures, equipment or property are of
equal or better quality than the property being replaced. Further no such installation or removal
thereof shall affect the structural portion of the Premises and that Tenant shall repair and
restore any damage or injury to the Premises or the Property caused thereby. Any such replacement
equipment, furniture or fixtures shall become the property of the Landlord at the termination of
this lease.
9.05
Control.
Notwithstanding anything to the contrary in this Lease, during the Term
of this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01
Indemnification.
Except to the extent attributable to the intentional and gross
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), or liability in connection with loss of life, personal injury or damage to property
caused to any person in or about the Premises from whatever cause, in any way connected directly or
indirectly and arising out of or attributable in any way connected with Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
Parent Corporation, or (e) to any corporation which operated motion picture theatres and has a
book net worth of not less than $20,000,000.00 as of the end of the calendar month during which
any such assignment or subletting becomes effective and to any subsidiary or affiliate of such
corporation, provided that such corporation duly and validly then guarantees the performance of
the obligations of such subsidiary or affiliate under this Lease.
15
11.02
Notice to Landlord
. Tenant shall give notice to Landlord of any assignment
of the Lease or sublease of the Premises within ten (10) days
after such event.
ARTICLE XII
ENCUMBRANCE OF LEASEHOLD ESTATE
12.01
Leasehold Mortgages
.
A) Tenant may not take back a Purchase Money Leasehold Mortgage of the Leasehold Estate or
otherwise encumber Tenants 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 Landlords fee interest in the Land or Landlords 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
Landlords 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.
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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, Tenants obligation
to pay Rent shall terminate on, and Tenants 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 Tenants 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
Tenants 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 Tenants 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
Landlords 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
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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 Landlords prior
right, during any continuance of Tenants default, to relet the Premises or a portion or portions
thereof.
C)
Termination of Lease and Lessees 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 Tenants 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)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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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
Landlords 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 Landlords 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 Landlords 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.
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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
Tenants 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 Tenants 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)
Tenants 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 Tenants 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
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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 Tenants 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 Tenants
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Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private
express courier (postage fully prepaid), addressed to Landlord to the addresses set forth in
Section 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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
Landlords 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 Tenants 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 partys 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 Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail
to so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics
liens and charge all costs thereof, including without limitation, reasonable attorneys fees, to
Tenant as additional rent plus interest at 18%.
18.19
Relationship of Parties.
Nothing contained in this Lease shall be construed to
create the relationship of principal and agent, partnership, joint venture or any other
relationship between the parties hereto other than the relationship
of Landlord and Tenant.
Nothing contained herein shall in any way impose any liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or trustees
of Tenant should such parties be corporate entities.
18.20
Time of the Essence.
Time is of the essence with respect to Tenants payment of
rent and other monetary obligations to Landlord under this Lease.
18.21
Facsimile Copies.
Tenant and Landlord (i) have each agreed to permit the use,
from time to time and where appropriate, of telecopied signatures in order to expedite the
transaction contemplated by this Lease, (ii) each intend to be bound by its respective telecopied
signature, (iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
18.22
Anti-Merger.
The voluntary or otherwise surrender of this Lease by Tenant, or a
mutual cancellation of this Lease shall not work a merger but shall at the option of Landlord
either:
A) Terminate any existing subleases or subtenancies; or
B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
Executed as of the date first written above.
TENANT
:
CENTURY THEATRES OF CALIFORNIA, INC.,
a
California Corporation
By:
/s/ Joseph Syufy
Print Name: Joseph Syufy
Title: V.P.
LANDLORD
:
SYUFY ENTERPRISES
a California Limited Partnership
By:
/s/ Raymond W. Syufy
Print Name: Raymond W. Syufy
Title: G.P.
26
EXHIBIT 10.32(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I:
Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent / Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5 01 Impositions
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5
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5.02 Proration of Taxes
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6
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5.03 Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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5.06 Personal Property Taxes
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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6.02 Types of Required Insurance
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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6.08 Waiver of Right of Recovery
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01 Alterations Changes
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7.02 Repairs
Maintenance
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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ARTICLE X: Indemnity
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10.01 Indemnification
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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11.02 Notice to Landlord
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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13.02 Future Mortgages
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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14.02 Notice to Other Parry
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14.03 Total Taking Effect on Rent and Term
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14.04 Distribution of Award for Taking
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14.05 Partial Taking Rent Adjustments
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14.06 Partial Taking Option to Terminate
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14.07 Separate Tenants Award
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ARTICLE XV: Default
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15.01 Tenants Default
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15.02 Landlords Remedies Cumulative
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15.03 Landlords Default
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15.04 Waiver of Redemption
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15.05 Dispute Resolution
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15.06 Attorney Fees
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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16.02 Tenants Representations and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01 Repairs Alterations and Further Improvements
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17.02 Prompt Repair
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17.03 Rent Adjustment
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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18.02 Modification
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18.03 Severability
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18.04 Governing Law
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18.05 Terminology
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18.06 Counterparts
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18.07 Binding Effect
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18.08 Captions
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18.09 Notice to Landlord and Tenant
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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18.14 Waiver
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18.15 Estoppel Certificate
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18.16 Number and Gender
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18.17 No Holding Over
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18.18 Mechanics Liens
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18.19 Relationship of Parties
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18.20 Time of the Essence
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18.21 Facsimile Copies
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18.22 Anti-Merger
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Signature Page
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iii
LEASE
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Table of Contents
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Page No.
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Exhibit A Description of Premises
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A-1
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Exhibit B Site Plan of Premises
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B-1
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Exhibit C Form of Memorandum
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C-1
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Exhibit D Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Building, Theatre Improvements and equipment located
in the State of California as set forth in Exhibit A.
Landlord and Tenant wish to provide for the lease by Landlord to Tenant of
the Premises.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS DEFINITIONS
1.01 Attachments to Lease
and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a description of the Premises.
EXHIBIT B a site plan of the Premises.
EXHIBIT C Form of Memorandum of Lease
EXHIBIT D Guaranty of Lease
1.02.
Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean October
1,1995.
The term Effective Date shall mean October
1, 1995.
The term Default Rate shall mean the lesser of (i) the Prime Rate plus four percent (4%) or
(ii) the highest rate of interest that my lawfully be charged to the party then required to pay
interest under this Lease at the Default Rate.
The Term Initial Rent Due Date shall mean October 1,
1995.
The term Initial Term is defined in Section
2.02 herein.
1
The term Leased Premises shall mean Tenants 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 Tenants 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 Tenants 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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 Landlords insurance or
liability.
C) Tenant shall be subject to and responsible for all costs and granted all rights to any and
all agreements, including all Construction, Operation and Reciprocal Easement Agreements, covering
the Premises.
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 $35,833.33. 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, Las Vegas, 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 Landlords
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
Landlords 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.
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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 Tenants premises subject to the Installment Election, Tenants 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 Landlords 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 Landlords 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 Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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
Tenants 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
Landlords 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 partys 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 Tenants 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 partys 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 Landlords
written approval shall be first obtained.
9
B) Tenant shall at all times keep the Premises or any part thereof, free and clear of all
liens and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon termination of this Lease, Tenant may not remove any personal property and trade
fixtures including, but not limited to theatre seats, projection and sound equipment, snack bar
equipment and computers.
7.02 Repairs Maintenance. Tenant shall, at its sole cost and expense, maintain the Premises
in first class condition for a building of like kind and place and make such structural and
non-structural, ordinary and extraordinary, foreseen and unforeseen repairs such that the Premises
shall not be in violation of any law or covenant recorded as of the Effective Date.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01 Definition. For purposes of this Article VIII, the term Hazardous Material means (a) any
substance, product, waste or other material of any nature whatsoever which is or becomes listed,
regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq. (RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean
Water Act, 33 U.S.C. Section 1251, et seq.; the California Hazardous Waste Control Act, Health and
Safety Code Section 25100, et seq.; the California Hazardous Substance Account Act, Health and
Safety Code Section 25330, et seq.; the California Safe Drinking Water and Toxic Enforcement Act,
Health and Safety Code Section 25249.5, et seq.; California Health and Safety Code Section 25280,
et seq. (Underground Storage of Hazardous Substances); the California Hazardous Waste Management
Act, Health and Safety Code Section 25170.1, et seq.; California Health and Safety Code Section
25501, et seq. (Hazardous Materials Response Plans and Inventory); or the California Porter-Cologne
Water Quality Control Act, Water Code Section 13000, et seq., all as amended, or any other federal,
state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct concerning any hazardous,
toxic or dangerous waste, substance or material, as now or at any time hereafter in effect; (b) any
substance, product, waste or other material of any nature whatsoever which may give rise to
liability under any of the above statutes or under any statutory or common law theory based on
negligence, trespass, intentional tort, nuisance or strict liability or under any reported
decisions of a state or federal court; (c) petroleum or crude oil, other than petroleum and
petroleum products contained within regularly operated motor vehicles; (d) asbestos; (e) subsurface
gas; (f) urea formaldehyde foam insulation; (g) poly chlorinated byphenyls (PCBs); and freon and
other chloroflurocarbons.
8.02 Tenants 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
Tenants (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 Tenants
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
Tenants 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
Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords 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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords 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 Tenants 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 Tenants 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 Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants 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
Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre
canopy or marquee.
(2) Signs on the interior or exterior of any windows of Tenants
Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in
front of Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the
property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.
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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 properly 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 properly 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 Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
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 Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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.
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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, Tenants obligation to pay
Rent shall terminate on, and Tenants 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 Tenants 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
Tenants 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 Tenants 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 Landlords 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 properly 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C) Termination of Lease and Lessees 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 Tenants 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)
Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is
in default under Section 15.01 herein, may cure the default at Tenants expense. If
Landlord, at any time, by reason of Tenants 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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by,
from or under Landlord.
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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 Tenants 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 Tenants 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) Tenants 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 Tenants 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
Tenants 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 Tenants
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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn: Real Estate Department
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To Tenant:
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Century Theatres of California, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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, hi the meantime shall
not be deemed a default upon the part of Tenant. Landlord may assign this Lease and convey its title
to the Premises, subject to this Lease, at any time. In the event of such assignment of this Lease,
Landlord
24
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in writing
Landlords 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 Tenants 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
partys 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 Tenants work
and/or any alterations or other work done by or on behalf of Tenant in the Premises within thirty
(30) days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate
with Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail
to so discharge any such mechanics lien, Landlord shall have the right to remove such mechanics
liens and charge all costs thereof, including without limitation, reasonable attorneys fees, to
Tenant as additional rent plus interest at 18%.
18.19 Relationship of Parties. Nothing contained in this Lease shall be construed to create
the relationship of principal and agent, partnership, joint venture or any other relationship
between the parties hereto other than the relationship of Landlord
and Tenant. Nothing contained
herein shall in any way impose any liability upon the
25
stockholders, officers or directors of Landlord or stockholders, officers, directors or
trustees of Tenant should such parties be corporate entities.
18.20 Time of the Essence. Time is of the essence with respect to Tenants 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:
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CENTURY THEATRES OF
CALIFORNIA, INC., a California Corporation
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By:
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/s/ Joseph Syufy
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Print Name
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Joseph Syufy
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Title:
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V.P.
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LANDLORD:
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SYUFY ENTERPRISES
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a California Limited Partnership
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By:
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/s/ Raymond W. Syufy
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Print Name:
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Raymond W. Syufy
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Title:
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G.P.
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26
EXHIBIT
10.33(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I:
Definitions Exhibits
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II:
Premises Term Options Covenant of Title
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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2
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2.03 Option to Extend Lease Term
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3
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2.04 Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01 Use
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4
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ARTICLE IV: Rent
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4.01 Base Rent /Minimum Monthly Rent
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4
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4.02 Percentage Rent
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4
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4.03 Rent Payments
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5
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4.04 Place for Payment of Rent
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5
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4.05 Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01 Impositions
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5
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5.02 Proration of Taxes
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6
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5.03 Exceptions from Impositions; Charges in Lieu of Impositions
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6
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5.04 Contest of Taxes
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6
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5.05 Utilities
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7
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5.06 Personal Property Taxes
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7
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ARTICLE VI: Insurance
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6.01 Acquisition of Insurance Policies
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7
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6.02 Types of Required Insurance
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7
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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8
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6.05 Insurance Money and Other Funds Held In Trust
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8
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6.06 Application or Proceeds of Physical Damage Insurance
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8
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02 Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01 Definition
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10
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8.02 Tenants Responsibilities and Landlord Indemnity
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10
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8.03 Remedial Work
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11
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8.04 Maintenance of Premises
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12
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8.05 Landlords Responsibilities and Tenants Indemnity
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12
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8.06 Landlord Inspection
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13
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8.07 Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01 Tenants Signs
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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14
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9.04 Ownership
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14
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9.05 Control
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15
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ARTICLE X: Indemnity
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10.01 Identification
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15
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ARTICLE XI: Assignment and Subletting
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11.01 Assignment and Subletting
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15
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11.02 Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01 Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01 Existing Mortgages
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16
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13.02 Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01 Definitions
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16
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14.02 Notice to Other Party
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17
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14.03 Total Taking Effect on Rent and Term
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17
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14.04 Distribution of Award for Taking
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17
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14.05 Partial Taking Rent Adjustments
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18
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14.06 Partial Taking Option to Terminate
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18
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14.07 Separate Tenants Award
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18
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ARTICLE XV:
Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01
Tenants Default
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18
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15.02 Landlords Remedies Cumulative
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18
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15.03 Landlords Default
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20
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15.04 Waiver of Redemption
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20
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15.05 Dispute Resolution
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20
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15.06 Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01 Landlords Representations and Warranties
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21
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16.02 Tenants Representations and Warranties
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22
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ARTICLE
XVII: Damage
or
Destruction
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17.01 Repairs, Alterations and Further Improvements
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22
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17.02 Prompt Repair
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22
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17.03 Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01 Limitation on Liability
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23
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18.02 Modification
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23
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18.03 Severability
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23
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18.04 Governing Law
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23
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18.05 Terminology
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23
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18.06 Counterparts
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23
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18.07 Binding Effect
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23
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18.08 Captions
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23
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18.09 Notice to Landlord and Tenant
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23
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18.10 Addresses for Notices to Landlord and Tenant
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24
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18.11 Entire Agreement
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24
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18.12 Sale or Transfer of Premises
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24
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18.13 Force Majeure
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25
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18.14 Waiver
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25
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18.15 Estoppel Certificate
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25
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18.16 Number and Gender
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25
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18.17 No Holding Over
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25
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18.18 Mechanics Liens
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25
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18.19 Relationship of Parties
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25
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18.20 Time of the Essence
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26
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18.21 Facsimile Copies
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26
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18.22 Anti - Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A Description of Premises
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A-1
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Exhibit B Site Plan of Premises
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B-1
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Exhibit C Form of Memorandum
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C-1
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Exhibit D Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUT
PROPERTIES, INC., a Utah corporation with an office at 150 Golden Gate Ave., San Francisco,
California, hereinafter called Landlord, and CENTURY THEATRES OF UTAH, INC., a Utah 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 Utah 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 Tenants 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 Tenants 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.
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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
Tenants option, extend the Initial Term of this Lease for up to
two (2) consecutive additional periods of five (5) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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.
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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 Landlords 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 $24,583.33 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, Salt Lake City, 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
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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
Landlords 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 UTILlTIES
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 Landlords 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.
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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 Tenants premises subject to the Installment Election, Tenants 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 Landlords 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 Landlords 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
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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 (butt in no event later than thirty (30) days
after Landlords 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 Tenants 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)
Builders 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 builders 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
Tenants 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 Tenants 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 Landlords 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 Tenants 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
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proceeds to Landlord for, and periodically during the course of, repair and restoration of
Tenants 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
Landlords 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 approvement 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 snail 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 follow:
(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 partys 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 Tenants 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 partys 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 Landlords
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 chlorinatedbyphenyls (PCBs); and freon and other chloroflurocarbons.
8.02
Tenants 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
tees 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 Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the
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environment
by Tenant, its agents, employees, contractors or invitees (referred to as Tenants
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 Tenants 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 Tenants Environmental Acts. Landlord agrees to indemnity, 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 Tenants 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 Tenants 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
Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords 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
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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 Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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 Landlords invoice
therefor, or (ii) in the case where Landlord is the responsible parry, shall be paid by Landlord to
Tenant within thirty (30) days of Tenants 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 Tenants 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
Landlords Responsibilities and Tenants 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 Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants 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 Tenants 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
Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy or
marquee.
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however
, Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03
Permits; Compliance With Codes.
All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04
Ownership.
A)
During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or, located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the
property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and
all additions, alterations
and improvements thereto replacements thereof and all appurtenant fixtures, machinery and equipment
installed therein including movable trade fixtures and personal property of shall become the
property of Landlord.
14
B)
During the term of this lease, Tenant shall have the right to replace any of the
trade fixtures, theatres seats, projection equipment, furniture, other equipment and personal
property from time to time; provided, however, that such replacement fixtures, equipment or
property are of equal or better quality than the property being
replaced. Further no such
installation or removal thereof shall affect the structural portion of the Premises and that
Tenant shall repair and restore any damage or injury to the Premises or the Property caused
thereby. Any such replacement equipment, furniture or fixtures shall become the property of the
Landlord at the termination of this lease,
9.05
Control.
Notwithstanding anything to the contrary in this Lease, during the Term
of this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01
Indemnification
. Except to the extent attributable to the intentional and gross
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), or liability in connection with loss of life, personal injury or damage to property
caused to any person in or about the Premises from whatever cause, in any way connected directly or
indirectly and arising out of or attributable in any way connected with Tenants 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 Landlords 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
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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
Parent Corporation, or (e) to any corporation which operated motion picture theatres and has a
book net worth of not less than $20,000,000.00 as of the end of the calendar month during which
any such assignment or subletting becomes effective and to any subsidiary or
affiliate of such corporation, provided that such corporation duly and validly then guarantees the
performance of the obligations of such subsidiary or affiliate under this Lease.
15
11.02
Notice to Landlord
. Tenant shall give notice to Landlord of any assignment
of the Lease or sublease of the Premises within ten (10) days after such event.
ARTICLE XII
ENCUMBRANCE OF LEASEHOLD ESTATE
12.01
Leasehold Mortgages.
A) Tenant may not take back a Purchase Money Leasehold Mortgage of the Leasehold Estate or
otherwise encumber Tenants 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 Landlords fee interest in the Land or Landlords 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 Landlords 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 Talking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues of 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, Tenants obligation
to pay Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the
date of Taking, at which time this Lease shall terminate.
14.04
Distribution of Award for Taking.
On a Taking, all sums, including, but not
limited to, damages and interest awarded for the value of the real estate taken, shall be
apportioned and paid by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any, for the Fair Market Value of all buildings and
other improvements on the Premises;
B) To Landlord, the amount awarded, if any, for severance damages
C)
To Landlord, the amount awarded, if, any, for the bonus value of this
leasehold estate without improvements. The bonus value is the amount by which the fair market
rental value on the open market exceeds the contract rent (the amount called for in this Lease);
D)
To Tenant, the amount awarded, if any, for loss of goodwill and relocation
expenses;
E)
To Tenant, any other award Which will not reduce the amount ,which otherwise would be
awarded to Landlord; and
F)
To Landlord, any balance.
17
Tenant shall only be entitled to payments under this Section 14.04 out of amounts awarded by the
governmental body taking the Premises.
14.05
Partial Talking 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 Tenants 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
Tenants Default.
The occurence 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 Tenants 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
Landlords 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
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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 Landlords prior
right, during any continuance of Tenants default, to relet the Premises or a portion or portions
thereof.
C)
Termination of Lease and Lessees 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; aid
(4) Any other amount, and court costs, necessary to compensate
Landlord for all detriment proximately caused by Tenants 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(X)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(X)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)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants 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
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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
Landlords Representation 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to
peacefully and quietly have, hold, occupy and enjoy the Premises, subject to the terms of this
Lease without hindrance or molestation from Landlord or any person claiming by, from or under
Landlord.
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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
Tenants 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 Tenants 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)
Tenants 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 Tenants 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 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
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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 Tenants 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 maybe 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 Utah 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 snail 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 Tenants
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Leasehold Mortgagee, Landlord shall give such party any notice served upon Tenant hereunder by
certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private express
courier (postage fully prepaid), addressed to Landlord to the addresses set forth in Section 18.12
below or at such other addresses) as Landlord shall designate by
notice given as herein provided.
If Tenant is notified of the identity and address of Landlords 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):
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To Landlord:
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Syut Properties
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Att: Real Estate Department
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To Tenant:
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Century Theatres of Utah, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords 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
Landlords 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 Tenants 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 partys
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 Tenants 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 phus 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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stockholder, 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 Tenants 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:
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CENTURY THEATRES OF UTAH, INC.,
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a California Corporation
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By
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/s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: V.P.
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LANDLORD:
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SYUT PROPERTIES, INC.
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a California Limited Partnership
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By:
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/s/ Alan Steuer
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Print Name: Alan Steure
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Title: CFO
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26
EXHIBIT 10.34(a)
LEASE
CENTURY THEATRES LARKSPUR THEATRE
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01
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Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Covenant of Title
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2
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ARTICLE III: Use of Premises
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3.01
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Use
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3
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ARTICLE IV: Rent
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4.01
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Base Rent / Minimum Monthly Rent
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3
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4.02
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Rent Payments
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3
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4.03
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Place for Payment of Rent
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3
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4.04
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Late Payment of Rent
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3
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
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Impositions
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3
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5.02
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Proration of Taxes
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4
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5.03
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Exceptions from Impositions; Charges in Lieu of Impositions
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4
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5.04
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Contest of Taxes
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4
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5.05
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Utilities
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5
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5.06
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Personal Property Taxes
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5
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ARTICLE VI: Insurance
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6.01
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Acquisition of Insurance Policies
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5
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6.02
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Types of Required Insurance
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5
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6.03
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Terms of Insurance
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6
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6.04
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Landlord's Acquisition of Insurance
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6
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6.05
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Insurance Money and Other Funds Held In Trust
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6
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6.06
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Application or Proceeds of Physical Damage Insurance
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6
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6.07
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Cooperation for Insurance Proceeds
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7
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6.08
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Waiver of Right of Recovery
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7
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
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Alterations - Changes
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7
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7.02
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Repairs - Maintenance
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8
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ARTICLE VIII: Environmental Matters
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i
LEASE
CENTURY THEATRES LARKSPUR THEATRE
Table of Contents
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Page No.
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8.01
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Definition
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8
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8.02
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Tenants Responsibilities and Landlord Indemnity
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8
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8.03
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Remedial Work
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9
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8.04
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Maintenance of Premises
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10
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8.05
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Landlords Responsibilities and Tenants Indemnity
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10
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8.06
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Landlord Inspection
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11
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8.07
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Effect of Termination
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11
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ARTICLE IX: Improvements
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9.01
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Tenants Signs
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11
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9.02
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Hold Harmless
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12
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9.03
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Permits; Compliance With Codes
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12
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9.04
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Ownership
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12
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9.05
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Control
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12
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ARTICLE X: Indemnity
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10.01
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Indemnification
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12
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ARTICLE XI: Assignment and Subletting
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11.01
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Assignment and Subletting
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13
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11.02
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Notice to Landlord
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13
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01
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Leasehold Mortgages
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13
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ARTICLE XIII: Mortgage Subordination
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13.01
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Existing Mortgages
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14
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13.02
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Future Mortgages
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14
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ARTICLE XIV: Condemnation Eminent Domain
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14.01
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Definitions
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14
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14.02
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Notice to Other Party
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15
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14.03
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Total Taking - Effect on Rent and Term
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15
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14.04
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Distribution of Award for Taking
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15
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14.05
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Partial Taking - Rent Adjustments
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15
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14.06
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Partial Taking - Option to Terminate
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15
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14.07
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Separate Tenants Award
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15
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ARTICLE XV: Default
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15.01
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Tenants Default
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16
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15.02
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Landlords Remedies Cumulative
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16
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15.03
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Landlords Default
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17
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ii
LEASE
CENTURY THEATRES LARKSPUR THEATRE
Table of Contents
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Page No.
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15.04
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Waiver of Redemption
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18
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15.05
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Dispute Resolution
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18
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15.06
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Attorney Fees
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18
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ARTICLE XVI: Representations and Warranties
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16.01
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Landlords Representations and Warranties
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19
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16.02
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Tenants Representations and Warranties
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19
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ARTICLE XVII: Damage or Destruction
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17.01
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Repairs, Alterations and Further Improvements
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19
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17.02
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Prompt Repair
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20
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17.03
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Rent Adjustment
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20
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ARTICLE XVIII: Miscellaneous
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18.01
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Limitation on Liability
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20
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18.02
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Modification
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20
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18.03
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Severability
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20
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18.04
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Governing Law
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20
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18.05
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Terminology
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20
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18.06
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Counterparts
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21
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18.07
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Binding Effect
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21
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18.08
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Captions
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21
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18.09
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Notice to Landlord and Tenant
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21
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18.10
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Addresses for Notices to Landlord and Tenant
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21
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18.11
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Entire Agreement
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22
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18.12
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Sale or Transfer of Premises
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22
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18.13
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Force Majeure
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22
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18.14
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Waiver
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22
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18.15
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Estoppel Certificate
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22
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18.16
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Number and Gender
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22
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18.17
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No Holding Over
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22
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18.18
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Mechanics Liens
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23
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18.19
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Relationship of Parties
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23
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18.20
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Time of the Essence
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23
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18.21
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Facsimile Copies
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23
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18.22
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Anti-Merger
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23
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Signature Page
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23
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Exhibit A
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Description of Premises
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A
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iii
LEASE
THIS INDENTURE OF LEASE, dated as of, April 17, 1998 by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Pelican Way, San Rafael, California,
hereinafter called Landlord, and CENTURY THEATRES, INC., a Delaware corporation with an office
at 150 Pelican Way, San Rafael, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, Theatre Building, Improvements and Equipment located
at 500 Larkspur Landing Circle, City of Larkspur, County of Marin, State of California.
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
DEFINITIONS
1.01. Definitions.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date shall mean May 1, 1998.
The term Effective Date shall mean April 17, 1998.
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 May 1, 1998.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises and Entire Premises and Premises shall mean the property as
set forth in Exhibit A and the rights, easements and privileges granted to Tenant in this Lease
exclusive of the Lease with Pacific Bell Mobile Services which shall remain with the Landlord.
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 5 years.
The term Permitted Use shall mean the 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
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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.
ARTICLE II
PREMISES TERM 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 excluding the lease with Pacific Bell Mobile Services.
B) The Premises are being leased in their as is condition.
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.
The
Initial Term of this Lease shall begin on the
Commencement Date and shall terminate FIVE (5) 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 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 Landlords 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.
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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 Landlords insurance or
liability.
C) Tenant shall be subject to, responsible for all costs and granted all rights of the
easements, covenants, conditions and restrictions of record affecting the Leased Premises. Tenant
shall be subject to the zoning ordinances and regulations and any other laws, ordinances or
governmental regulations restricting or regulating the use, occupancy or enjoyment of the Leased
Premises.
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 $7,500.00 The Base Rent is sometimes referred to
herein as the Minimum Monthly Rent.
B) The Minimum Monthly Rent shall apply from the Rent Commencement Date through the
end of the Term.
4.02 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.
4.03 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.
4.04 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 Landlords
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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.
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 Tenants premises subject to the Installment Election, Tenants 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 Landlords 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 Landlords
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
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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 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 alter Landlords 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 Tenants 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) Builders 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 builders 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 Tenants
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 Tenants 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 Landlords 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 Tenants 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
5
proceeds to Landlord for, and periodically during the course of, repair and restoration of
Tenants 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 Landlords 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.
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:
6
(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 partys 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 Tenants
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 partys 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 Landlords
written approval shall be first obtained.
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
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 chlorinatedbyphenyls
(PCBs); and freon and other chloroflurocarbons.
8.02 Tenants 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 Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the environment by Tenant, its agents, employees, contractors or invitees (referred
to as Tenants 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 Tenants 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 Tenants Environmental Acts. Landlord agrees to indemnify, defend and hold Tenant
harmless from all claims, judgments, damages, penalties, fines, costs, resulting from the presence
of
8
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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03 Remedial Work. In the event any investigation or monitoring of site conditions or any
clean-up, containment, restoration, removal or other remedial work (Remedial Work) is required (a) under
any applicable federal, state or local law or regulation, (b) by any judicial, arbitral or
administrative order, (c) to comply with any agreements affecting the Premises or (d) to maintain
the Premises in a standard of environmental condition which presents no risk to safety or health,
prevents the release of any hazardous materials to adjacent property and otherwise is consistent
with the prudent ownership of property of the character of the Premises and/or Tenants Building
and if such Remedial Work is required as a direct result of Tenants Environmental Acts, then
Tenant at Tenants 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 Tenants
Environmental Acts, then, Landlord, at Landlords 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
9
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 partys 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 Landlords 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
Tenants 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 Tenants 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 Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released into the environment or disposed of, on, in, under or about the Entire
Premises, the Common Area, or any other portion of the Premises by Landlord, its agents,
employees, tenants, contractors or invitees, in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served
upon, Landlord: all orders, reports, listings and correspondence (even those which may be
considered confidential) of or concerning the release, investigation of, compliance, clean up,
remedial and corrective actions, and abatement of Hazardous Materials whether or not required by
any applicable laws, including, but not limited to, reports and notices required by any
applicable laws, including, but not limited to, reports and notices required by or given pursuant
to any applicable laws, and all complaints, pleading and other legal documents filed against
Landlord related to Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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
10
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 Landlords 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 Landlords agents and employees shall have the right, but not the obligation, without
limitation upon any of Landlords other rights and remedies under this Lease, to immediately enter
upon the Premises and to discharge Tenants obligations under this Article VIII at Tenants
expense, notwithstanding any other provisions of this Lease. Landlord and Landlords agents and
employees shall endeavor to minimize interference with Tenants 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 Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01 Tenants 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 Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy
or marquee.
11
(2) Signs on the interior or exterior of any windows of Tenants Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 Landlords defense, including
attorneys fees;
provided
,
however
, Tenant shall be liable for attorneys fees only
if single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and
Tenant without there arising an actual or potential conflict of interests.
9.03 Permits; Compliance With Codes. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04 Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall
become the property of Landlord.
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
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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
Tenants 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
Landlords 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 landlords 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 Tenants
parent corporation (Parent Corporation) (so long as such corporation remains a subsidiary or
affiliate of Tenant or of Tenants Parent Corporation), or (c) to Tenants 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 Tenants
Parent Corporation, or (e) to any corporation which operated motion picture theatres and has a
book net worth of not less than $60,000,000.00 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.
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 Tenants 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 Landlords fee interest in the Land or Landlords interest in this Lease.
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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 Landlords 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.
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.
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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, Tenants obligation to pay Rent
shall terminate on, and Tenants 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.
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 Tenants 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.
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ARTICLE XV
DEFAULT
15.01 Tenants 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 Tenants 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 Landlords Remedies Cumulative. Landlord shall have the following remedies set forth in
subsections (A) through (G) below if Tenant commits a default, except as provided in Section
15.03. These remedies are not exclusive and may be exercised concurrently or successively; they
are cumulative in addition to any remedies now or later allowed by law or equity:
A) Bring Suit for Performance. Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B) Re-Entry Without Termination. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and
thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its
election to declare the Lease Term hereunder ended and to terminate this Lease, and unless this
Lease be expressly terminated, 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 Landlords prior
right, during any continuance of Tenants default, to relet the Premises or a portion or portions
thereof.
C) Termination of Lease and Lessees 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;
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(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 Tenants 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.
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) Landlords Right to Cure Tenants Default. Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants 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 Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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)
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within fifteen (15) days after Tenants 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
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,
18
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 Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or permit or suffer to be created any liens or encumbrances on the
Premises which are (i) not specifically stated in writing to be junior to this Lease, or any New
Lease (as defined herein), or (ii) which are inconsistent with the obligations of Landlord
hereunder, and Landlord shall, at or prior to the commencement of the Term, cause the Premises to
be free of all liens and encumbrances. Title to the Premises shall be free of all Objected
Exceptions.
16.02 Tenants 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 Tenants 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.
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A) Tenants 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 Tenants cost and expense (which may be paid from insurance proceeds
available as above provided) and Tenant shall diligently commence and continuously carry out such
repair, replacement, reconstruction or rebuilding, to full completion as soon as possible, except
to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts,
with contractors and suppliers.
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
Tenants 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 went 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.
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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 Tenants 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 Landlords 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):
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To Landlord:
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Syufy Enterprises
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150 Pelican Way
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San Rafael, CA 94941
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Attn: Real Estate Department
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To Tenant:
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Century Theatres, Inc.
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150 Pelican Way
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San Rafael, CA 94941
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Attention: Legal Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
21
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 Landlords 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 Landlords interest in this Lease or any change in, or transfer of, title
in and to the Premises of any part thereof, whether voluntary or involuntary, or by act of Landlord
or by operation of law, Tenant shall be under no obligation to pay rent or other charges payable by
Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been notified in writing
of such transfer, assignment, or change in title, and given satisfactory proof thereof, and the
withholding of rent or other charges payable by Tenant to Landlord hereunder, in the meantime shall
not be deemed a default upon the part of Tenant. Landlord may assign this Lease and convey its
title to the Premises, subject to this Lease, at any time. In the event of such assignment of this
Lease, Landlord shall have no further obligations under this Lease, except for liabilities which
shall have accrued prior to the date of such assignment and transfer and that the assignee assumes
in writing Landlords 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 Tenants 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 partys 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
22
one hundred twenty percent (125%) 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 Tenants 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 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 Tenants 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.
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TENANT:
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CENTURY THEATRES, INC.,
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a Delaware Corporation
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By: /s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: PRESIDENT
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LANDLORD:
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SYUFY ENTERPRISES
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a California Limited Partnership
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BY: Raymond Syufy
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Print Name:Raymond Syufy
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Title: G.P.
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23
EXHIBIT 10.35(a)
LEASE - PARKLANE, RENO, NEVADA
Table of Contents
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Page No.
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RECITALS
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1
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ARTICLE I EXHIBITS - DEFINITIONS
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1
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1.01 Attachments to Lease and Exhibits
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1
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1.02 Definitions
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1
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ARTICLE II PREMISES - TERM - OPTIONS - COVENANT OF TITLE
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2
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2.01 Lease of Premises
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2
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2.02 Term of Lease
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3
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2.03 Option to Extend Lease Term
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3
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2.04
Covenant of Title; Authority and Quiet Possession; Transfer of Title
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4
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ARTICLE III USE OF PREMISES
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4
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3.01 Use
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4
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ARTICLE IV RENT
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5
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4.01 Annual Fixed Rent
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5
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4.02
Percentage Rent
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5
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4.03 Rent Payments
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6
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4.04 Place for Payment of Rent
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6
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4.05 Late Payment of Rent
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6
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ARTICLE V TAXES, ASSESSMENTS AND UTILITIES
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6
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5.01 Impositions
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6
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5.02 Exceptions from Impositions; Charges in Lieu of Impositions
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7
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5.03 Contest of Taxes
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7
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5.04 Utilities
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7
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5.05 Personal Property Taxes
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7
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i
LEASE - PARKLANE, RENO, NEVADA
Table of Contents
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Page No.
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ARTICLE VI INSURANCE
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7
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6.01 Acquisition of Insurance Policies
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8
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6.02 Types of Required Insurance
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8
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6.03 Terms of Insurance
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8
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6.04 Landlords Acquisition of Insurance
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9
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6.05 Insurance Money and Other Funds Held in Trust
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9
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6.06 Application or Proceeds of Physical Damage Insurance
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9
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6.07 Cooperation for Insurance Proceeds
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9
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6.08 Waiver of Right of Recovery
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10
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ARTICLE VII MAINTENANCE, REPAIRS AND ALTERATIONS
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10
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7.01 Alterations - Changes
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10
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7.02 Repairs - Maintenance
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10
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ARTICLE VIII ENVIRONMENTAL MATTERS
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11
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8.01 Definition
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11
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8.02 Tenants Responsibilities and Landlord Indemnity
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11
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8.03 Remedial Work
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13
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8.04 Maintenance of Premises
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13
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8.05 Landlords Responsibilities
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14
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8.06 Landlord Inspection
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14
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8.07 Effect of Termination
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14
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ARTICLE IX IMPROVEMENTS
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14
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9.01 Tenant Improvements
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14
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9.02 Hold Harmless
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14
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9.03 Permits; Compliance With Codes
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15
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9.04 Ownership of Improvements
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15
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ii
LEASE - PARKLANE, RENO, NEVADA
Table of Contents
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Page No.
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9.05 Control
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15
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ARTICLE X
INDEMNITY
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15
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10.01
Landlords Indemnity
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15
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10.02 Tenants Indemnity
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16
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ARTICLE XI ASSIGNMENT AND SUBLETTING
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16
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11.01 Assignment and Subletting
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16
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11.02 Notice to Landlord
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16
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ARTICLE XII MORTGAGE SUBORDINATION
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17
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12.01 Existing Mortgages
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17
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12.02 Future Mortgages
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17
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ARTICLE XIII CONDEMNATION
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EMINENTDOMAIN
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17
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13.01 Definitions
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17
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13.02 Notice to Other Party
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18
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13.03 Total Taking - Effect on Rent and Term
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18
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13.04 Distribution of Award for Taking
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18
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13.05 Partial Taking - Rent Adjustments
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18
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13.06 Partial Taking - Option to Terminate
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18
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13.07 Separate Tenants Award
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19
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ARTICLE XIV DEFAULT
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19
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14.01 Tenants Default
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19
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14.02 Landlords Remedies Cumulative
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19
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14.03 Landlords Default
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21
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14.04 Waiver of Redemption
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21
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14.05 Dispute Resolution
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21
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iii
LEASE - PARKLANE, RENO, NEVADA
Table of Contents
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Page No.
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14.06 Attorneys Fees
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21
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ARTICLE XV REPRESENTATIONS AND WARRANTIES
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22
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15.01 Landlords Representations and Warranties
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22
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15.02 Tenants Representations and Warranties
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22
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ARTICLE XVI DAMAGE OR DESTRUCTION
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22
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16.01 Repairs, Alterations and Further lmprovements
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23
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16.02 Prompt Repair
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23
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16.03
Rent Adjustment
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23
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16.04 Damage During Last Two (2) Years of Term
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23
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ARTICLE XVII MISCELLANEOUS
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24
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17.01 Limitation on Liability
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24
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17.02 Brokers
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24
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17.03 Modification
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24
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17.04 Severability
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24
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17.05 Governing
Law
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24
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17.06 Terminology
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24
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17.07 Counterparts
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24
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17.08 Binding Effect
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24
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17.09 Captions
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24
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17.10 Notices to Landlord and Tenant
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24
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17.11 Addresses for Notices to Landlord and Tenant
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25
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17.12 Entire Agreement
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25
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17.13 Sale or Transfer of Premises
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25
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17.14 Force Majeure
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26
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17.15 Waiver
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26
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17.16 Estoppel Certificate
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26
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iv
LEASE - PARKLANE, RENO, NEVADA
Table of Contents
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Page No.
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17.17 Number and Gender
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26
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17.18 No Holding Over
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26
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17.19 Mechanics Liens
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27
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17.20 Relationship of Parties
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27
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17.21 Time of the Essence
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27
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17.22 Facsimile Copies
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27
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17.23 Anti-Merger
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27
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SIGNATURE PAGE
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28
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Exhibit A
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A Site Plan of the Parklane Mall retail center including the
Leased Premises which is outlined in Red.
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Exhibit B
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Form of Memorandum of Lease
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v
LEASE
THIS INDENTURE OF LEASE, dated as of August 1, 1997, by and between
SYUFY ENTERPRISES
, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, CA,
hereinafter called Landlord, and
CENTURY THEATRES, INC.,
a Delaware corporation with an office at
150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord will be acquiring a fee interest in Real Property located within the Parklane Mall
retail center on South Virginia Street, Reno, Nevada from Sierra Pacific Properties, Inc., a
California Corporation, hereinafter called Sierra, under an Exchange Agreement between Landlord
and Sierra dated April 12, 1996. The Real Property shall consist of a building pad of 72,283
square feet and a 57,784 square foot, 16-screen movie theatre building. In addition the Real
Property shall be subject to a Construction, Operation and Reciprocal Easement Agreement,
hereinafter called COREA, by and between The MaceRich Partnership, L.P. a Delaware limited
Partnership and Sierra dated August 28, 1997, a copy of which is attached hereto, marked Exhibit
C.
This Lease is subject to and contingent upon Landlord acquiring the fee interest in the Real
Property located within the Parklane Mall. If Landlord does not acquire title to the Real Property
this Lease shall be terminated without any liability on the part of Landlord or Tenant.
Subject to the above recitals and understanding, Landlord and Tenant wish to provide for the
lease by Landlord to Tenant of the Premises (as defined below).
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
EXHIBITS - DEFINITIONS
1.01
Attachments to Lease and Exhibits
Attached to this Lease and hereby made a part hereof are the following:
EXHIBIT A a Site Plan of the Parklane Mall retail center including the Leased Premises which
is outlined in red.
EXHIBIT B Form of Memorandum of Lease
EXHIBIT C Construction, Operation and Reciprocal Easement Agreement dated April 12, 1996.
1.02
Definitions
.
The following terms for purposes of this Lease shall have the meanings hereinafter specified:
The term Commencement Date and Rent Commencement Date shall mean the date Landlord
acquires title to the property
PARKLANE
1
The term COREA shall mean the Construction, Operation and Reciprocal Easement
Agreement dated August 28, 1997.
The term Effective Date shall mean the date Landlord acquires title to the
property.
The term Default Rate shall mean the Ten percent (10%).
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises or Premises or Real Property shall mean the 16 screen movie
theatre building and the land thereunder as set forth in Exhibit A and the rights, easements and
privileges granted to Landlord under the COREA.
The term Mortgage shall mean any mortgage or deed of trust or other instrument in the
nature thereof evidencing a security interest in the Premises or any part thereof.
The
term Number of Term Years shall mean 20 years.
The
term Option Periods shall mean two (2) successive separate periods of
five (5) years each and one (1) successive period of four
(4) years.
The
term Percentage Rate shall mean eight percent (8%).
The term Planned Use shall mean the operation of a 57,784 square foot multiplex motion
picture theatre, and for such activities in connection therewith as are customary and usual at
other motion picture theatres operated by Tenant.
The term Prime Rate shall be the per annum interest rate from time to time publicly
announced by Citibank, N.A., New York, New York as its base rate. The Prime Rate shall be as
announced by Citibank, N.A. notwithstanding that Citibank, N.A. may actually charge other rates,
and a written statement from Citibank, N.A. as to what the Prime Rate was on any given day shall
be deemed conclusive. In the event that Citibank, N.A. should cease to publicly announce its prime
rate, the Prime Rate hereunder shall be the prime rate of any one of the then largest banks (based
on assets) in the United States as selected by Tenant upon notice to Landlord.
The term Tenants Building shall mean the theatre building.
The term term of this Lease or term hereof shall mean the initial term, as provided in the
article captioned Term and any renewal or extensions thereof.
ARTICLE II
PREMISES TERM OPTIONS COVENANT OF TITLE
2.01
Lease of Premises
.
A) Landlord leases to Tenant and Tenant leases from Landlord, the Premises, upon the terms and
conditions contained herein.
B) The Premises are being leased in their as is condition subject to Article VIII herein
captioned Environmental Matters.
PARKLANE
2
C) Landlord shall deliver possession of the Premises to Tenant upon acquisition of title
to the Real Property.
D) Additional obligations of Landlord and Tenant:
(I) Landlord Obligations:
Under the Exchange Agreement with Sierra, Sierra will acquire land and construct a 16 screen
theatre building in accordance with plans and specifications approved by Landlord and Tenant.
Sierra will provide the maximum sum of $12,500,000 toward all costs
related to the land acquisition
and construction of the theatre building which sum shall represent the total obligation of
Landlord.
(II) Tenant Obligations:
Tenant shall pay any difference between the total land, building and improvement costs less
the $12,500,000. In addition Tenant shall pay for all furniture, fixtures and equipment required to
complete and operate the theatre.
2.02
Term of Lease
.
Tenant
shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
The Initial Term of this Lease shall begin on the Commencement Date and shall
terminate TWENTY (20) years thereafter and shall terminate on the last day of the calendar month during
which
the date which is TWENTY (20) years after the
Commencement Date occurs. References herein to the Lease
Term shall mean the Initial Term of this Lease or the Initial Term as extended under Section 2.02.
2.03
Option to Extend Lease Term
.
A)
Tenant may, at Tenants option, extend the Initial Term of this
Lease for up to two (2) consecutive additional periods of five
(5) years and one (1) additional period of four
(4) years (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) Tenants right to the options to extend the Lease Term and Tenants rights to the Renewal
Term are subject to:
(1) This Lease being in full force and effect on the last day of the Initial Term or the then
current Renewal Term, as applicable.
(2) Compliance with the following procedure for exercising the option in question:
(a) At least nine (9) months before the last day of the Initial Term, or the then current
Renewal Term, as the case may be, Tenant shall give Landlord written notice exercising the option.
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(b) Each party shall, at the request of the other,
execute a
memorandum acknowledging the fact that the option in question has been exercised. If an option is
properly exercised by Tenant, the failure of Landlord to execute such memorandum shall not
invalidate such option or the exercise thereof.
(3) Tenant is not in default (meaning the breach of any obligation hereunder and failure to
cure that breach within the time permitted in Section 14.01) at time of the exercise of the
renewal and at the commencement of the renewal term.
2.04
Covenant of Title: Authority and Quiet Possession: Transfer of Title
.
(A) Landlord represents and warrants to Tenant that Landlord has full right and
lawful authority to enter into and perform Landlords obligations under this Lease for the
term hereof.
(B) At all times during the Term, Tenant shall keep and maintain Tenants Building in
good order and repair and in a clean and safe condition, reasonably free of debris. Tenants
obligation
hereunder shall include the obligations set forth in the COREA, Tenant shall indemnify and
save harmless
Landlord from and against all actions, claims and damages by reason of Tenants failure to
comply with and
perform its obligations under this section. In case of conflict between this Lease and the
COREA, the terms
and provisions of the COREA shall prevail.
(C) Tenant will not permit the Premises to become subject to any mechanics,
laborers or materialmens lien on account of labor or material furnished to Tenant or
claimed to have been
furnished to Tenant in connection with work of any character performed or claimed to have
been performed on
the Premises by or at the direction or sufferance of Tenant; provided, however, Tenant shall
have the right to
contest in good faith and with reasonable diligence the validity of any such lien or claimed
lien and on final
determination of the lien or claim for the lien, Tenant will immediately pay any judgment
rendered with all
proper costs and charges, and will, at its own expense, have the lien released and any
judgment satisfied.
(D) Conditions Precedent: Tenants obligation to lease the Premises is conditioned
upon Landlord acquiring the property under the terms of the Exchange Agreement with Sierra.
ARTICLE III
USE OF PREMISES
3.01
Use
.
A) The Premises may be used in accordance with and subject to the conditions set forth in the
COREA.
B) Landlord shall agree and consent to such utility and other easements encumbering the
Premises or benefiting the Premises as Tenant may reasonably require for its use and occupancy of
the Premises.
C) Tenant shall be subject to all of the benefits and responsible for all costs, as well as
all obligations, associated with the COREA.
D) If Tenant ceases operating the Theatre for a period in excess of sixty (60) days and the
owner of the Shopping Center elects to purchase the Leased Premises in accordance with the
applicable provisions of the COREA, Tenant shall promptly vacate the Premises; however, Tenant
shall remain liable to Landlord for all rent due for the balance remaining of either the Original
Term or Renewal Term of this Lease.
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ARTICLE IV
RENT
4.01
Annual Fixed Rent
.
A) Beginning on the Rent Commencement Date, Tenant shall pay to Landlord during
the Lease Term Annual Fixed Rent in the amount of One Million Three
Hundred Twenty-nine Thousand And Thirty-six ($1,329,036.00) dollars. The Annual Fixed Rent shall be payable in advance in twelve (12) equal
monthly installments. The Annual Fixed Rent shall be subject to
adjustment every five (5) years after the
Initial
Rent Due Date as set forth in Section 4.01 (B) below.
B) The Annual Fixed Rent shall apply from the Rent Commencement Date through the
end of the fifth (5th) Lease Year of the Term. The Annual Fixed Rent shall be increased 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 an
amount of eighty-six thousand six hundred seventy six ($86,676)
dollars greater than the Annual Fixed Rent
payable immediately before the Adjustment date in question.
4.02
Percentage Rent
.
In addition to the payment of Annual Fixed Rent, Tenant shall pay to Landlord for each Lease
Year during the Term of this Lease, as Percentage Rent a sum equal to
the amount by which 8% percent
of the Gross Sales for such Lease Year exceeds the Annual Fixed Rent which is payable for such
Lease Year. For the purpose of computing the Annual Percentage for the first Lease Year, the Gross
sales and the annual fixed rate percentage for the partial calendar month, if any, preceding the
first Lease Year shall be includable in the Annual Fixed Rate and Gross Sales for the first Lease
Year.
Gross Sales shall mean all box office receipts, and receipts from sales of goods,
merchandise, beverages, food, vending machines and video games. Gross Sales shall exclude credits
and refunds made with respect to admissions or other sales; all federal, state, county and city
admission taxes, sales taxes and other similar taxes now or hereafter imposed whether such taxes
are collected from customers separately from the selling price of admission tickets or absorbed
therein, and actually paid over to the taxing authority by Tenant and returned, exchanged, waived
or Pass Admissions including EBF charges on Pass Admissions. Commissions paid to agencies or
other third parties for selling tickets and any sums paid to third parties for the use or rental
of vending machines, pay telephones or other amusement machines shall be deducted from Gross
Sales.
Tenant agrees to furnish Landlord a statement certified by its chief financial or similar
officer of its Gross Sales within ninety (90) days after the close of each Lease Year and
calculation of Percentage Rent, if any, due for such Lease Year. Tenant shall concurrently with the
delivery of such statement, pay to Landlord any Percentage Rent due for such Lease Year.
The receipt by Landlord of any statement or any payment of Percentage Rent for any period
shall not bind it as to the correctness of the statement or the payment. Landlord shall within
three years after the receipt of any such statement be entitled to an audit of such Gross Sales .
Such audit shall be limited to the determination of the Gross Sales as defined in this Lease and
shall be conducted during normal business hours at the principal place of business of Tenant. If it
is determined as a result of such audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due any payable with interest at the
annual rate of eighteen (18%) percent from the date when said payment should have been made until
paid. Any information gained from such statements or inspection shall be confidential and shall not
be disclosed other than to carry out the purposes hereof.
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4.03
Rent Payments
.
Rent and other sums to be paid by Tenant shall be payable in lawful
money of the United States of America. All payments shall be made by Tenant to Landlord without
notice or demand.
4.04
Place for Payment of Rent.
The Annual Rent and any other charges required to be paid by
Tenant to Landlord shall be sent to Landlord at its principal place of business, or such other
address as Landlord may direct in writing.
4.05
Late Payment of Rent
.
In the event that any monthly installment of rent is not paid
within ten (10) days after such payment is past due, Tenant shall pay Landlord interest on such
unpaid rent at the rate of ten (10%) per annum computed from the date such rent installment was
due until the date actually paid.
ARTICLE V
TAXES, ASSESSMENTS AND UTILITIES
5.01
Impositions
.
A) The term Impositions shall mean all real estate taxes, duties or assessments
(special or otherwise), water and sewer rents, whether ordinary or extraordinary, general or
special, foreseen or
unforeseen, of any kind and nature whatsoever, which, at any time during the Lease Term, shall
be assessed
or levied, or be attributable in any manner to the Premises, or the rents receivable
therefrom, or any part
thereof or any use thereon or any facility located therein or used in connection therewith,
whether or not any of
the foregoing shall be a so-called real estate tax expressly excluding, however, any such
items arising directly
or indirectly out of any act or omission of Landlord, any of Landlords predecessors in title
or any other person
occurring prior to the commencement of the Term. From and after the Initial Rent Due Date,
Tenant shall pay
when due all Impositions assessed, levied or attributable to the Premises and/or the
Improvements on the
Premises.. All Impositions or installments thereof payable with respect to the tax year in
which this Lease shall
commence, and all Impositions or installments thereof with respect to the tax year in which
this Lease shall
terminate, shall be pro-rated on a daily basis; provided, however, that assessments or escape
assessments
assessed as a result of this Lease and/or the construction of Tenant Improvements by Tenant
shall not be
prorated and shall be paid solely by Tenant; and provided further that assessments
attributable to Tenant
Improvements made in the final year of the Lease shall be paid solely by Tenant if Tenant
demolishes the
Tenant Building.
B) In the event Tenant fails to pay such Real Property taxes as provided herein, Landlord may,
but shall not be required to, pay the same, and any amount so paid by Landlord shall immediately
thereafter become due to Landlord from Tenant as Additional Rent with interest thereon at the rate
of 18% per annum from the date of Landlords payment plus any fine, penalty, interest or cost which
is levied by the taxing authority for such late payment.
C) Tenant shall be responsible for such impositions as are set forth in the COREA.
5.02
Exceptions from Impositions: Charges in Lieu of Impositions
.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relates to real estate or revenues from real estate and not to other property or business as well)
the taxes now levied, assessed or imposed on real estate and buildings and Improvements thereon, a
tax shall be imposed, assessed or levied wholly or partly on the Rent, or a tax, assessment, levy
or charge, measured or based, in whole or in part, on
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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 Landlords only income, as the case may be.
5.03
Contest of Taxes
. Tenant at its sole cost and expense may by appropriate legal
proceedings conducted in good faith and with due diligence, contest the amount or validity or
application, in whole or in part, of any Imposition or lien therefor, or any other lien,
encumbrance or charge against the Premises arising from work done or materials provided to or for
Tenant. Tenant shall give Landlord reasonable notice of, and information pertaining to, such
contest and regular progress reports with respect thereto. Landlord shall cooperate with any
effort pursued by Tenant in accordance with this Section 5.03. Tenant shall indemnify, protect and
hold harmless Landlord and the Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.03.
5.04
Utilities
. Tenant shall pay before delinquency, directly to the appropriate
company or governmental agency, all charges for all utilities consumed on the Premises. Any
utility improvements presently serving the Premises shall be maintained, repaired and replaced by
Tenant, at Tenants expense. Tenant shall be responsible for all costs for utilities as are set
forth in the COREA.
5.05
Personal Property Taxes
. During the term of this Lease, Tenant shall pay before
delinquency any and all personal property taxes levied or assessed against any personal property
located upon the Premises. If Tenant fails to timely pay such taxes and a lien is filed against the
Premises, Landlord may discharge such lien, if Tenant fails to discharge such lien within ten (10)
days following Tenants receipt of notice from Landlord, including without limitation reasonable
attorneys fees, together with interest at the rate of eighteen percent (18%) per annum from the
date of expenditure, such additional rent being due and payable within ten (10) days of notice
thereof.
ARTICLE VI
INSURANCE
6.01
Acquisition of Insurance Policies
. Tenant shall, at its sole cost and expense,
procure and maintain, or cause to be procured and maintained, during the entire Term the insurance
described in this Section (or its then available equivalent), and shall name Landlord and any
other parties requested by Landlord as an additional insured. In addition Tenant shall, at its
sole cost and expense, procure and maintain, or cause to be procured and maintained, during the
entire Term the insurance described in the COREA.
6.02
Types of Required Insurance
. Tenant shall procure and maintain the following:
A)
Commercial General Liability Insurance
. Commercial general liability insurance insuring
against injuries or damages to persons or property sustained in, on or about the Premises,
Premises, Common Area and the appurtenances thereto, including the sidewalks and alleyways
adjacent thereto, with limits of liability no less than Five Million Dollars ($5,000,000) per
occurrence and in the aggregate.
B)
Physical Property Damage Insurance
. During the term hereof, Tenant shall keep Tenants
Building (excluding foundations, footings and underground improvements) as well as any and all
improvements on the Premises and personal property insured in the name of Landlord and Tenant
against damage or destruction by fire and the perils commonly covered under the extended coverage
endorsement (with vandalism and malicious mischief coverage) including Builders Risk and
earthquake to the extent of not less than 100% of the full replacement cost thereof less any
deductible
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applicable to all of Tenants 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 Landlords consent, which consent is not to be unreasonably withheld or delayed. The
proceeds of such insurance in case of loss or damage shall be held in trust and applied on account
of the obligation of Tenant to repair and/or rebuild the Leased Premises pursuant to the Article
captioned Damage Clause to the extent that such proceeds are required for such purpose. The
insurance required to be carried by Tenant under this paragraph may be covered under a so-called
blanket policy covering other operations of Tenant and its affiliates. Upon written request,
Tenant shall name Landlord and any parties requested by Landlord and the holder of the first
mortgage on Tenants Building pursuant to a standard mortgage clause with respect to the foregoing
hazard insurance, provided such holder agrees with Tenant in writing to disburse such insurance
proceeds to Landlord for, and periodically during the course of, repair and restoration of
Tenants 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
Landlords Acquisition of Insurance
. If Tenant at any time during the Term fails
to procure or maintain insurance required hereunder or to pay the premiums therefor, Landlord
shall have the right to procure the same and to pay any and all premiums thereon, and any amounts
paid by Landlord in connection with the acquisition of insurance shall be immediately due and
payable as additional rent, and Tenant shall pay to Landlord upon demand the full amount so paid
and expended by Landlord. Any policies of insurance obtained by Landlord covering physical damage
to the Premises shall contain a waiver of subrogation against Tenant if and to the extent such
waiver is obtainable and if Tenant pays to Landlord on demand the additional costs, if any,
incurred in obtaining such waiver.
6.05
Insurance Money and Other Funds Held in Trust
. All insurance money or proceeds
received by the Tenant and/or Landlord shall be held in trust by Landlord and, except as provided
otherwise in Section 6.06, shall be applied as follows:
First, for the purpose of defraying the cost of repairing, restoring, replacing and/or
rebuilding any structure or improvement on or in the Premises as required as provided in Section
6.06 hereof; and Second, if the damaged or destroyed structure or improvement is not repaired,
restored, replaced or rebuilt as hereinafter provided, said funds shall be disposed of as provided
in Section 6.06. Any of said funds in the hands of the Tenant at the end of the Term hereof shall
be disposed of as set forth in Section 6.06 (A).
6.06
Application or Proceeds of Physical Damage Insurance
. In case of any insurance
policies as described in Section 6.02 (B) (Physical Property Damage Insurance) the
application of insurance
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proceeds from damage or loss to property shall be determined in part in accordance with
Article XVI hereof and, in the event of any such repair, replacement, restoration or rebuilding,
the Tenant and Landlord shall apply the proceeds of the insurance collected to the cost of such
work upon certificate of satisfactory progress and/or completion in form satisfactory to Tenant
and Landlord by the licensed architect or engineer in charge of the work. Any amounts payable to
Tenant or any Affiliate of Tenant for work or services performed or materials provided as part
of any such repair, replacement, restoration or rebuilding shall not exceed competitive rates
for such services or materials and Tenant shall, upon request of Landlord, make available to
Landlord and its representatives all books and records of Tenant relating to such work, services
and materials. Upon completion of such repair, replacement, restoration or rebuilding in
accordance with the provisions of this Lease, and the full payment therefor (so no liens,
encumbrances or claims with respect thereto can be asserted against the Premises, this Lease,
Landlord or Tenant), any insurance proceeds received by the Tenant or Landlord with respect to
the damage or destruction involved, and not used, shall be and remain the property of Landlord.
A)
Distribution of Unutilized Proceeds
. At the termination of this Lease, such
insurance
proceeds or condemnation awards received and held by the Tenant and not used for repair,
replacement or reconstruction (Available Proceeds), shall be disposed as follows:
(1) First, Landlord shall be awarded an amount sufficient to remove any
improvements not repaired and to return the Property to the level of adjacent streets (grade
level); and
(2) Second, any remainder shall be paid to Landlord.
6.07
Cooperation for Insurance Proceeds
. Landlord and Tenant shall each cooperate
with the other in order to obtain the largest possible recovery and execute any and all consents
and other instruments and take all other actions reasonably necessary or desirable to effectuate
the same and cause such proceeds to be paid as hereinbefore provided. Notwithstanding anything
to the contrary contained in this Lease, neither party shall carry any insurance concurrent in
coverage and contributing in the event of loss with any insurance required to be furnished by
the other hereunder if the effect of separate insurance would be to reduce the protection or the
payment to be made under such partys 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 Tenants Building or
land or improvements adjoining the Premises owned or leased by Landlord shall (if it can be so
written and does not result in a material additional premium) include provisions denying to the
insurer subrogation rights against the other party and any fee or leasehold mortgage to the extent
such rights have been waived by the insured prior to the occurrence of damage or loss. If the
waiver of subrogation otherwise is not effective, each party covenants that it will obtain for the
benefit of the other party an express waiver of any right of subrogation which the insurer of such
party may acquire against the other party by virtue of the payment of any such loss covered by such
insurance. In the event either party is by law, statute, governmental regulation, economically
unleasable or other factor beyond such partys reasonable control unable to obtain a waiver of the
right of subrogation for the benefit of the other party, then, during any period of time when such
waiver is unobtainable, said party shall be deemed not to have released any subrogated claim
of its insurance carrier against the other party, and during the same period of time the other
party shall be deemed not to have released the party who has been unable to obtain such waiver
from any claims they or their insurance carriers may assert which otherwise would have been
released pursuant to this Section. In the event that either party is unable to obtain such
waiver of the right of subrogation for the benefit of the other
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party, such party shall, within thirty (30) days of receiving notice of such inability, give
the other party written notice of such inability.
ARTICLE VII
MAINTENANCE, REPAIRS AND ALTERATIONS
7.01
Alterations Changes
.
A) Subject to any and all conditions set forth in the COREA, at any time and from time
to time during the Lease Term, Tenant may, at its sole expense, make any alterations,
additions or changes,
whether structural or nonstructural, to any portion of the interior of the building provided
that all such alterations
or changes shall be performed in a first-class manner and must comply with all laws, zoning
regulations and
ordinances, and any conditions on permits issued pursuant thereto. If the change, alteration
or addition is
structural in nature Landlords written approval shall be first obtained, which approval
shall not be unreasonably
withheld. Tenant may not make any alterations, additions or changes to the exterior of the
building.
B) Tenant shall at all times keep the Premises or any part thereof, free and dear of all
liens
and claims for labor or material and free and clear of all attachments, executions and
notices.
(C) Upon termination of this Lease, Tenant may, at its option, remove any personal property
and trade fixtures including, but not limited to theatre seats, projection and sound equipment,
snack bar equipment and computers.
7.02
Repairs Maintenance
.
Tenant shall, at its sole cost and expense, maintain and repair the Premises and Tenants
Building and all improvements on the Premises including all exterior lighting and signs.
Tenant shall commence all of the repairs and maintenance within 3 days after receiving notice
thereof from Landlord (provided that in the case of an emergency Tenant shall commence such work
immediately upon receiving notice) and shall be diligently completed in a good and workmanlike
manner. Notwithstanding the foregoing, Landlord shall have the right and option (but not the
obligation) to undertake any such repair, maintenance or other items, in which event Tenant shall
reimburse Landlord for all of the costs thereof within 30 days after Landlords request therefor.
If Tenant fails to reimburse Landlord within the 30 day period, Tenant shall pay Landlord in
addition interest thereon at the rate of 18% per annum until such payment has been made.
7.03
Repairs Common Area
.
Tenant shall be responsible for its repair and maintenance obligations as set forth in the
COREA.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.01
Definition
. For purposes of this Article VIII, the term Hazardous Material
means (a) any
substance, product, waste or other material of any nature whatsoever which is or becomes listed,
regulated, or addressed pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601, et seq. (CERCLA); the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq. (RCRA); the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean
Water Act, 33 U.S.C. Section 1251,
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et seq.; all as amended, or any State of Nevada or any other federal, state or local statute,
law, ordinance, resolution, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect; (b) any substance, product,
waste or other material of any nature whatsoever which may give rise to liability under any of the
above statutes or under any statutory or common law theory based on negligence, trespass,
intentional tort, nuisance or strict liability or under any reported decisions of a state or
federal court; (c) petroleum or crude oil, other than petroleum and petroleum products contained
within regularly operated motor vehicles; (d) asbestos; (e) subsurface gas; (f) urea formaldehyde
foam insulation; (g) poly chlorinated byphenyls (PCBs); and freon and other chloroflurocarbons.
8.02
Tenants Responsibilities and Landlord Indemnity
.
A) Tenant shall not cause or permit any Hazardous Materials to be brought upon, stored, used,
generated, released into the environment or disposed of, on, in, under or about the Premises, the
Common Area, or any other portion of the Premises by Tenant, its agents, employees, contractors or
invitees, in violation of any law. Upon the expiration or sooner termination of this Lease, Tenant
covenants to remove from the Premises, and/or Premises at its sole cost and expense, any and all
Hazardous Materials, including any equipment or systems containing Hazardous Materials, which are
brought upon, stored, used, generated or released into the environment at or above actionable
levels by Tenant, its agents, employees, contractors or invitees. To the fullest extent permitted
by law, Tenant hereby indemnifies and defends (with counsel experienced and competent in litigating
issues of Hazardous Materials) Landlord and agrees to hold Landlord, the Premises and the Premises
free and harmless from and against any and all claims, judgments, damages, penalties, fines, costs,
liabilities and losses (including, without limitation, diminution in the value of the Premises,
damages for the loss or restriction on use of rentable space or of any amenity of the Premises, and
sums paid in settlement of claims, attorneys fees, consultant fees and expert fees) which arise
directly or indirectly from the presence of actionable levels of Hazardous Materials on, in or
about the Premises which is through Tenants (or its agents, employees, contractors or invitees)
acts or omissions brought upon, stored, used, generated or released into the environment by Tenant,
its agents, employees, contractors or invitees (referred to as
Tenants 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 Tenants
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 Tenants
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
Tenants 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 Tenants routine reporting obligations described in (B) above, Tenant shall
promptly notify Landlord of, and shall promptly provide Landlord with true, correct, complete and
legible copies of, all of the following environmental items relating to the Premises which may be
filed or prepared by or on behalf of, or delivered to or served upon, Tenant: all orders,
reports, listings and correspondence
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(excluding those which may be reasonably considered confidential) of or concerning the
release, investigation of, compliance, clean up, remedial and corrective actions, and abatement of
Hazardous Materials whether or not required by any applicable laws, including, but not limited to,
reports and notices required by any applicable laws, including, but not limited to, reports and
notices required by or given pursuant to any applicable laws, and all complaints, pleading and
other legal documents filed against Tenant related to Tenants 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 Tenants 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 Tenants 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 Landlords 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, Landlords 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 Landlords consent before taking such
action.
8.03
Remedial Work
. In the event any investigation or monitoring of site conditions or
any cleanup, containment, restoration, removal or other remedial work
(Remedial Work) is required
(a) under any applicable federal, state or local law or regulation, (b) by any judicial, arbitral
or administrative order, (c) to comply with any agreements affecting the Premises or (d) to
maintain the Premises in a standard of environmental condition which presents no risk to safety or
health, prevents the release of any hazardous materials to adjacent property and otherwise is
consistent with the prudent ownership of property of the character of the Premises and/or Tenants
Building and if such Remedial Work is required as a direct result of Tenants Environmental Acts,
then Tenant at Tenants 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 Tenants Environmental Acts,
then, Landlord, at Landlords 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
partys prior written approval, which approval shall not be unreasonably withheld, denied,
conditioned or delayed. In addition, the party doing the Remedial Work shall submit to the other
party, promptly upon receipt or preparation, copies of any and all reports, studies, analyses,
correspondence, governmental comments or approvals, proposed removal or other remedial work
contracts and similar information prepared or received by such party in connection with any
Remedial Work or Hazardous Materials relating to the Premises. In the event the party responsible
therefor should fail to commence or cause to be commenced in a timely fashion, or
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fail diligently to prosecute to completion, such Remedial Work, the other party (following
written notice) may, but shall not be required to, cause such Remedial Work to be performed, and
all costs and expenses thereof, or incurred in connection therewith (i) in the case where Tenant
is the responsible party, shall be paid as additional rent due and payable within thirty (30) days
of Landlords 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 Tenants invoice therefor, and if not
timely paid by Landlord, in additional to all other rights and remedies, Tenant shall have the
right of offset against rent which may become due. Neither party shall be obligated to perform
Remedial Work under this Section while it is contesting the application of any law, regulation or
order, provided the other party is not exposed to any additional liability, risk or damages.
Obligations under this Section are solely for the benefit of the parties, their successors, and
assigns and any subtenants of this Lease, and not for any other third parties.
8.04
Maintenance of Premises
.
A) Tenant at its sole cost and expense shall keep and maintain the Premises in compliance
with, and shall not cause or permit the Premises to be in violation of, any federal, state or
local laws, statutes, ordinances, orders, guidelines, rules or regulations relating to health and
safety, to industrial hygiene or to environmental conditions on, under or about the Premises,
including, but not limited to, air, soil and ground water conditions.
B)
Tenant shall be liable and responsible for an Hazardous Materials which Tenant causes to be
brought onto the Premises.
8.05
Landlords Responsibilities
.
A) Landlord shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released into the environment or disposed of, on, in, under or about the Premises
or any other portion of the Premises by Landlord, its agents, employees, contractors or invitees,
in violation of any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants use, handling, storage or disposal of Hazardous Materials.
8.06
Landlord Inspection
. Landlord and Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease,
to immediately enter upon the Premises and to discharge Tenants obligations under this Article
VIII at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and
Landlords agents and employees shall endeavor to minimize interference with Tenants business. All
sums reasonably disbursed, deposited or incurred by Landlord in connection therewith, including,
but not limited to, all costs, expenses and actual attorneys fees, shall be due and payable by
Tenant to Landlord, as an item of additional rent, on demand by Landlord, together with interest
thereon at the rate of ten percent (10%) per annum.
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8.07
Effect of Termination
.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the best of Tenants knowledge, Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued as
of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01
Improvements
. Tenant Building and Improvements will be constructed in accordance
with Section 2.01 of Article II.
9.02
Hold Harmless
. Except to the extent attributable to the intentional or negligent
acts or omissions of Landlord or Landlords agents, employees, contractors, tenants, or invitees,
Tenant shall indemnify, protect, defend and hold harmless Landlord and the Premises from and
against all claims and liabilities arising by virtue of or relating to construction by Tenant of
Improvements or repairs made at any time to the Premises including repairs, restoration and
rebuilding and all other activities of Tenant on or with respect to the Premises. If Tenant is
required to defend any action or proceeding pursuant to this Section to which action or proceeding
Landlord is made a party, Landlord shall also be entitled to appear, defend, or otherwise take part
in the matter involved, at its election, by counsel of its own choosing, and to the extent Landlord
is indemnified under this Section, Tenant shall bear the cost of Landlords defense, including
attorneys fees; provided, however, Tenant shall be liable for attorneys fees only if single legal
counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant without there
arising an actual or potential conflict of interests.
9.03
Permits; Compliance With Codes
. All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable
laws, ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04
Ownership of Improvements
.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein excluding moveable trade fixtures and personal property of Tenant,
shall become the property of Landlord, unless and to the extent Tenant elects to remove any of the
foregoing pursuant to Section 9.04 (B).
B) Tenant shall have the right to remove all trade fixtures, equipment and furnishings,
including seats, carpets, draperies, screen, sound reproducing equipment, projection equipment,
furniture and lobby frames from the Premises without notice to Landlord provided, Tenant replaces
all items removed with items of similar quality or better quality and the foregoing shall remain
the property of the Tenant at the
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expiration or earlier termination of the Lease. In addition, Landlord shall have the right if
Landlord so elects by giving written notice to Tenant of such election at any time before ninety
(90) days prior to the end of the Term (including any renewals or extensions) hereof to remove at
Tenants sole cost any other Improvements and all additions, alterations and improvements thereto
or replacements thereof erected, constructed, or installed on the Premises. The removal of any of
the foregoing shall be completed within thirty (30) days following the end of the Term hereof
(including any renewals thereof or any earlier termination permitted by this Lease.
9.05
Control
. Notwithstanding anything to the contrary in this Lease, during the Term
of this Lease Tenant shall have exclusive control and possession of the Premises.
ARTICLE X
INDEMNITY
10.01
Landlords Indemnity
. Except to the extent attributable to the intentional and
negligent acts or omissions of Landlord and its agents, employees, tenants, licensees and
contractors, Tenant shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Landlord) and save Landlord (and its successors, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as Landlord Indemnities, from and against any claims, demand, damages,
injuries, costs, expenses, losses, liabilities, causes of action, interest, fines, charges and
penalties (including reasonable legal fees and expenses in enforcing this indemnity and hold
harmless), directly or indirectly arising out of or attributable to (i) any intentional or
negligent act or omission of Tenant, its agents, employees, licensees, invitees or contractors on
the Leased Premises, occurring within the Leased Premises or (ii) arising from Tenants or its
employees use of the Leased Premises.
10.02
Tenants Indemnity
. Except to the extent attributable to the intentional and
negligent acts or omissions of Tenant and its agents, employees, tenants, licensees and
contractors, Landlord shall indemnify, pay and protect, defend and hold harmless (with counsel
reasonably approved by Tenant) and save Tenant (and its successors, assigns and sublesses), and all
of their directors, officers, employees and agents, hereinafter referred to as Tenant
Indemnities, from and against any claims, demand, damages, injuries, costs, expenses, losses,
liabilities, causes of action, interest, fines, charges and penalties (including reasonable legal
fees and expenses in enforcing this indemnity and hold harmless), directly or indirectly arising
out of or attributable to (i) any intentional or negligent act or omission of Landlord, its agents,
employees, licensees, invitees on the Premises or contractors, occurring within the Premises, or
(ii) arising from Landlords use of the Premises.
10.03
COREA
. Tenant shall be subject to and be responsible for all the indemnification
provisions as set forth in the COREA.
ARTICLE XI
ASSIGNMENT AND SUBLETTING
11.01
Assignment and Subletting
.
A) Tenant may assign the Lease and may sublease a portion or all of the Premises, subject to
Landlords approval which shall not be unreasonably withheld, provided Tenant remains liable for
all Tenant obligations under this Lease, and any sublease shall be subject to all the provisions
of this Lease. Landlord shall be entitled to all rent from any assignment or sublease in excess of
the Annual Fixed Rent set forth in this Lease.
B) Any assignment of this Lease or any sublease of a portion or all of the Premises shall be
subject to the terms and conditions of this Lease.
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C) Notwithstanding anything in this Lease to the contrary, it is agreed that at any time
during the term of this Lease, Tenant may without Landlords consent, assign this Lease (a) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (b) to Tenants Parent Corporation. or (e) to any corporation
which acquires 50% or more of the issued and outstanding voting stock (or such lesser percentage
as shall be sufficient to acquire voting control) of Tenant or of Tenants Parent Corporation,
provided that such corporation duly and validly then guarantees the performance of the obligations
under this Lease.
11.02
Notice to Landlord
. Tenant shall give notice to Landlord in writing of any
assignment of the Lease ten (10) days prior to such event.
ARTICLE XII
MORTGAGE SUBORDINATION
12.01
Existing Mortgages
. If there is an existing mortgage or deed of trust
(Mortgage) lien affecting the interest of Landlord in the Premises or in any other part of the
Premises, then Landlord shall obtain and shall deliver to Tenant within fifteen (15) days after
the Effective Date, a non-disturbance and attornment agreement in a form reasonably acceptable to
such lender, Landlord and Tenant, executed by the Mortgagee (as defined below), wherein the
Mortgagee shall agree to recognize the interest of Tenant and abide by the terms of this Lease in
the event of any judicial foreclosure, private sale or deed in lieu of foreclosure, including the
right to quiet enjoyment of the Premises, without any condition, limitation or restriction.
12.02
Future Mortgages
. The rights of Tenant under this Lease shall be, at the option
of Landlord, either subordinate or superior to any future mortgage on Landlords interest in the
Premises in favor of an institutional lender not affiliated with Landlord. Provided however, that
as a condition to any subordination of this Lease, the mortgagees or beneficiaries of any deed of
trust and their successors and assigns (the Mortgagee) shall agree to recognize the interest of
Tenant and abide by the terms of this Lease in the event of any foreclosure or deed in lieu of
foreclosure, including the right to quiet enjoyment of the Premises, without any condition,
limitation or restriction. As a further condition of such subordination, Landlord, Tenant and the
Mortgagee shall enter into a non-disturbance and attornment agreement in a form reasonably
acceptable to all parties executing such instrument.
ARTICLE XIII
CONDEMNATION EMINENT DOMAIN
13.01
Definitions
. The following definitions apply in construing provisions of this
Lease relating to a taking of or damage to all or any part of the Premises or Improvements or
Parking or any interest in them by eminent domain or inverse condemnation:
A) Taking means that taking or damaging, including severance damage, by eminent
domain or by inverse condemnation for any public or quasi-public use under any statute. The
transfer of title may be either a transfer resulting from the recording of a final order in
condemnation or a voluntary transfer or conveyance to the condemning agency or entity under threat
of condemnation, in avoidance of an exercise of eminent domain, or while condemnation proceedings
are pending. The Taking shall be considered to take place as of the date on which the right to
compensation and damages accrues under the law applicable to the Premises, unless the condemnor
also takes actual physical possession of the Premises or a part thereof, in which case the date of
Taking for the purposes of this Lease shall be the later of the date on which the right to
compensation and damages accrues or the date physical possession is taken by the condemnor.
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B) Total Taking means the Taking of the fee title to the Premises and the Improvements
on the Premises, which shall be considered to include any offsite improvements effected by Tenant
to serve the Premises or the improvements.
C) Partial Taking means any Taking (including any damaging) of a portion of the Premises,
or any Improvements thereon which is not a Total Taking.
D) Notice of Intended Taking means any notice or notification on which a reasonably prudent
man would rely and which he would interpret as expressing an existing intention of Taking as
distinguished from a mere preliminary inquiry or proposal. It includes, but is not limited to, the
service of a condemnation summons and complaint on a party to this Lease. The notice is considered
to have been received when a party to this Lease receives from the condemning agency or entity a
Notice of Intended Taking, in writing, containing a description or map of the Taking reasonably
defining the extent of the Taking.
E) Award means compensation paid for the Taking, whether pursuant to judgment or
by agreement or otherwise.
13.02
Notice to Other Party.
The party hereto receiving any notice
of the kinds specified below
shall promptly give the other party notice of the receipt, contents, and date of the notice
received:
A) Notice of Intended Taking;
B) Service of any legal process relating to condemnation of the Premises or improvements;
C) Notice in connection with any proceedings or negotiations with respect to such a
condemnation; or
D) Notice of intent or willingness to make or negotiate a private purchase, sale or transfer
in lieu of condemnation.
13.03
Total Taking Effect on Rent and Term
. On a Total Taking, Tenants obligation
to pay Rent shall terminate on, and Tenants interest in the leasehold shall continue until, the
date of Taking, at which time this Lease shall terminate.
13.04
Distribution of Award for Taking
. On a Taking, all sums, including, but not
limited to, damages and interest awarded for the value of the real estate taken, shall be
apportioned and paid by the governmental body taking the Premises as follows:
A) To Landlord, the amount awarded, if any for the Fair Market Value of all Land, buildings
and other improvements on the Premises and all Severance Damages.
B) To Tenant, the amount awarded, if any, for loss of goodwill, lost business, lost profits,
relocation expenses and fixtures; and
C) To Landlord, any balance.
Tenant shall only be entitled to payments under this Section 13.04 out of amounts awarded by the
governmental body taking the Premises.
13.05
Partial Taking Rent Adjustments
. On a Partial Taking, the Lease shall remain
in full force and effect covering the remaining Premises, except that the total Rent as otherwise
provided herein shall be
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reduced in the same ratio as the percentage of the area of the Premises taken bears to the
total area of the Premises.
13.06
Partial Taking
Option to Terminate
. Notwithstanding anything herein to the
contrary, in the event of a Partial Taking, if more than thirty-three percent (33%) of the
Building is taken by condemnation or sold under the threat of condemnation, then Tenant may
terminate this Lease as of the date the condemning authority takes title or possession, whichever
occurs first, by delivering written notice to the other within ten (10) days after receipt of
written notice of such taking (or in the absence of such notice, within ten (10) days after the
condemning authority takes possession).
13.07
Separate Tenants Award
. In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses, fixtures and
relocation expenses against the acquiring governmental Agency.
ARTICLE XIV
DEFAULT
14.01
Tenants Default
. The occurrence of any of the following shall constitute a
default or event of default by Tenant:
A) Failure to pay Annual Fixed Rent or any other monetary amount when due as provided herein,
if the failure continues for ten (10) days after first written notice has been given to Tenant by
Landlord;
B) Failure to perform any of Tenants non-monetary obligations under this Lease; provided
however, Tenant shall have thirty (30) days from receipt of written notice by Landlord to cure
each such default. If Tenant cannot reasonably cure such default within said thirty (30) day
period, Tenant shall not be in default of this Lease if Tenant commences to cure the breach within
the thirty (30) day period and diligently and in good faith continues to cure the breach.
14.02
Landlords Remedies Cumulative
. Landlord shall have the following remedies set
forth in subsections (A) through (G) below if Tenant commits a default, except as provided in
Section 15.03. These remedies are not exclusive and may be exercised concurrently or successively;
they are cumulative in addition to any remedies now or later allowed by law or equity:
A)
Bring Suit for Performance
. Landlord may bring suit for the collection of the Rent or other
amounts for which Tenant is then in default, or for the performance of any other covenant or
agreement devolving upon Tenant, all without having to enter into possession or terminate this
Lease;
B)
Re-Entry Without Termination
. Pursuant to California Civil Code Section 1954.4, Landlord
may re-enter the Premises, by legal proceedings (or without legal proceedings if the Premises have
been abandoned), and take possession thereof, without thereby terminating this Lease, and thereupon
Landlord may expel all persons and remove all property therefrom, without becoming liable to
prosecution therefor, and relet the Premises or a portion or portions thereof, and receive the rent
therefrom, applying the same first to the payment of the reasonable expenses of such re-entry and
the reasonable cost of such reletting, and then to the payment of the Rent and other amounts for
which Tenant is then in default; the balance, if any, to be paid to Tenant, who, whether or not the
Premises are relet, shall remain liable for any deficiency. It is agreed that the commencement and
prosecution of any action by Landlord in forcible entry and detainer, ejectment, or otherwise, or
the appointment of a receiver, or any execution of any decree obtained in any action to recover
possession of the Premises, or any re-entry, shall not be construed as an election to terminate
this Lease unless Landlord shall, in writing, expressly exercise its election to declare the Lease
Term hereunder ended and to terminate this Lease, and unless this Lease be expressly terminated,
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such re-entry or entry by Landlord, whether had or taken under summary proceedings or
otherwise, shall not be deemed to have absolved or discharged Tenant from any of its obligations
and liabilities for the remainder of the Lease Term. Notwithstanding anything to the contrary or
other provisions of this Section 14.02(B), Tenant shall have the right to sublet the Premises,
assign its interest in the Lease, or both, subject to Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a portion or portions thereof.
C)
Termination of Lease and Lessees 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 Tenants failure to perform his obligations under the Lease or which, in the
ordinary course of things, would be likely to result therefrom.
D)
Definitions
. As used herein, the following phrases shall be interpreted as
follows:
(1) The worth, at the time of the award, as used in subsections 14.02(C)(1) and (2) above,
is to be computed by allowing interest at the maximum lawful rate. The worth, at the time of the
award, as referred to in subsection 14.02(C)(3) above, is to be computed by discounting the amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus
one percent (1%).
(2) As used herein, the term time of award shall mean either the date upon which Tenant pays
to Landlord the amount recoverable by Landlord as hereinabove set forth or the date of entry of any
determination, order, or judgment of any court or other legally constituted body determining the
amount recoverable, whichever first occurs.
E)
Surrender
. Promptly after notice of termination, Tenant shall surrender and vacate
the Premises and all improvements in broom-clean condition, and Landlord may re-enter and
take possession
of the Premises and all remaining improvements and eject all parties in possession or eject
some and not
others, or eject none. Termination under subsection 14.02(C) shall not relieve Tenant from
the payment of any
sum due to Landlord or from any claim for damages previously accrued or then accruing against
Tenant.
F)
Appointment of Receiver
. If Tenant defaults under Section 14.02(C), Landlord shall
have the right to have a receiver appointed to collect rent from any subtenants. Neither the
filing of a petition
for the appointment of a receiver nor the appointment itself shall constitute an election by
Landlord to terminate
this Lease.
G)
Landlords Right to Cure Tenants Default
. Landlord, at any time after Tenant is in
default under Section 14.01 herein, may cure the default at Tenants expense. If Landlord, at
any time, by
reason of Tenants default, pays any sum or does any act that requires the payment of any
sum, the sum paid
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by Landlord shall be immediately reimbursed from Tenant to Landlord, together with interest
at ten percent (10%) per annum computed from the date of such expenditure until the date of
reimbursement by Tenant.
14.03
Landlords 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 Landlords expense. If Tenant at any time, by reason of Landlords 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 Tenants written demand, Tenant shall be entitled to offset any
amount due from Landlord against the next Rent payment due under this Lease.
14.04
Waiver of Redemption
. Tenant hereby expressly waives any and all rights of
redemption granted by or under any present or future laws in the event of Tenant being
dispossessed or removed from the Premises upon the termination of this Lease because of default by
Tenant hereunder.
14.05
Dispute Resolution
. Landlord and Tenant desire by provisions of this Section
14.05 to establish procedures to facilitate the informal and inexpensive resolution of any dispute
arising out of this Lease by mutual cooperation and without resort to litigation. To accomplish
this objective, Landlord and Tenant agree to follow the procedures set forth below if and when a
dispute arises between them under this Lease.
A)
Description of Dispute
. The complaining party shall provide by notice a written description
of the alleged breach by the other party. This description shall explain the nature of the
complaint and the Lease provision(s) on which it is based. The complaining party shall also set
forth a proposed solution to the problem including a specific time frame within which the parties
must act. The party receiving the letter of complaint must respond in writing within ten (10) days
with an explanation, including references to the relevant parts of the Lease and a response to the
proposed solution. Within ten (10) days of receipt of this response, the parties must meet and
discuss options for resolving the dispute. The complaining party must initiate the scheduling of
the resolution meeting.
B)
Mediation
. A settlement conference shall be held within thirty (30) days of the
unsuccessful resolution meeting or as soon as practical thereafter.
C)
Arbitration
. With respect to disputes which the parties have been unable to resolve
informally or by mediation, the parties agree to submit the dispute for final and binding
arbitration if the dispute has not otherwise been settled. The parties agree that the arbitration
must be initiated within one (1) year after the date of the written description of the alleged
breach and that the failure to initiate arbitration within the one (1) year period constitutes an
absolute bar to the initiation of any proceedings. An arbitration shall be deemed initiated for the
purposes of this section by demand therefor being sent by certified mail to the other party, which
notice shall contain a description of the dispute, the amount involved and the remedies sought. The
parties shall have the right to representation by counsel throughout the arbitration proceedings.
Arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration
Association.
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14.06
Attorneys
Fees
. Should any action or proceeding, be commenced between the parties
to this Lease concerning said Premises, this Lease, or the rights and duties of either in relation
thereto, the party, Landlord, or Tenant, prevailing in such action or proceeding shall be
entitled, in addition to such other relief as may be granted in the action or proceeding, to a
reasonable sum as and for its attorneys fees therein which shall be determined by the
arbitrator(s) hearing such action or proceeding.
ARTICLE XV
REPRESENTATIONS AND WARRANTIES
15.01
Landlords Representations and Warranties
. Landlord represents and warrants:
A) The persons executing this Lease in behalf of Landlord are authorized to execute
the
same on behalf of Landlord and Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Premises, nor does Landlord know or have reasonable
grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to peacefully and
quietly have, hold, occupy and enjoy the Premises, subject to the terms of this Lease without
hindrance or molestation from Landlord or any person claiming by, from or under Landlord.
E) Landlord is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
F) Except for liens or encumbrances created by or through Tenant, or based upon
Impositions which are the responsibility of Tenant under this Lease, Landlord after the date
Landlord acquires
title to the property, agree to or create or permit or suffer to be created any liens or
encumbrances on the
Premises which are (i) not specifically stated in writing to be junior to this Lease, or any
New Lease (as defined
herein), or (ii) which are inconsistent with the obligations of Landlord hereunder, and
Landlord shall, at or prior
to the commencement of the Term, cause the Premises to be free of all liens and encumbrances.
Title to the
Premises shall be free of all Objected Exceptions.
15.02
Tenants Representations and Warranties
. Tenant represents and warrants:
A) Tenant is a Delaware corporation in good standing.
B) The persons executing this Lease in behalf of Tenant are authorized to execute the same on
behalf of Tenant and Tenants obligations under this Lease are legally binding, do not require the
consent of any other parties and do not violate the provisions of any agreement to which Tenant is
a party.
C) Tenant is not now insolvent either in the sense that it cannot pay its current bills as
they come due or that its liabilities exceed its assets
ARTICLE XVI
DAMAGE OR DESTRUCTION
16.01
Repairs, Alterations and Further Improvements
.
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In the event of damage to or destruction of the Tenants Building or any Improvements on
or to the Premises whether or not covered by the insurance described in Article 6: Tenant shall
effect, at Tenants sole cost and Landlord and Tenant agree that the funds derived from insurance
acquired pursuant to Article 6 shall be made available to effect, such repair and reconstruction
of the structure or improvement so damaged or destroyed to substantially its condition prior to
said damage or destruction with such alterations thereto as Tenant shall reasonably determine
prudent or viable under the circumstances, including any changes required to comply with
applicable law, with the then prevailing construction practices applicable to the Premises. Tenant
shall be responsible for all costs in excess of Insurance proceeds available All such work shall
be carried on in accordance with the provisions of the COREA and with Drawings prepared by a
licensed architect or architects approved by Landlord (acting reasonably) if such an architect is
reasonably required, given the scope and nature of the work. In disbursing insurance proceeds the
Tenant and Landlord may rely upon and accept the certified determinations of such architect with
respect to estimated costs, awarding of contracts, sufficiency of bonds, progress of construction,
interpretation of plans and specifications, compliance with same, and completion of construction.
No extras or changes in Drawings shall be made by Tenant without first giving written notice of
such changes to Landlord and obtaining Landlords approval thereof (which approval shall not be
unreasonably withheld or delayed).
If such reconstruction or rebuilding cannot be made under then existing laws, ordinances,
statutes or regulations of any governmental authority applicable thereto, the Lease shall
Terminate and any insurance proceeds shall become the property of Landlord.
16.02
Prompt Repair
. If Tenant, pursuant to the terms hereof, is obligated to repair,
replace, reconstruct or rebuild any structures, improvements or other property as hereinabove
provided, the same shall be effected at Tenants cost and expense (which may be paid from insurance
proceeds available as above provided), and Tenant shall diligently commence and continuously carry
out such repair, replacement, reconstruction or rebuilding, to full completion as soon as possible,
except to the extent of delays due to strikes, lockouts, shortages of labor or materials after due
diligence in obtaining the same, governmental restrictions, fire, casualty, riot, act of God, act
of the public enemy, or other causes beyond the reasonable control of Tenant after the exercise of
due diligence, including diligence in contracting, and the exercise of rights under contracts, with
contractors and suppliers.
16.03
Rent Adjustment
. This Lease and the Term shall not terminate or be terminated
because of damage to or destruction of any structure or improvement on or in the Premises except
under and in accordance with the provisions hereinabove contained. If such damage or destruction
occurs and renders all or a portion of the Improvements on the Premises untenantable, Rent shall
thereafter not abate but continue for as long as and to the extent such Improvements are
untenantable.
16.04
Damage During Last Two (2) Years of Term
. If there occurs during the last two (2)
years of the Initial Term or at any time during a Renewal Period damage or destruction to any
Improvement on or in the Premises and the costs of repairing, restoring, replacing or rebuilding
the same exceed Five Thousand Dollars ($500,000), then Landlord may elect to terminate the Term
and, in such event, Landlord shall give notice to Tenant of its election within sixty (60) days
after its determination of the amount of damage, and the Term shall thereupon terminate as of the
date of such notice and all insurance proceeds shall become the property of Landlord.
ARTICLE XVII
MISCELLANEOUS
17.01
Limitation on Liability
. The liability of Landlord hereunder or in connection
with the Premises shall be limited to its interest in the Premises and in no event shall any other
assets of Landlord be subject to any claim arising out of or in connection with the Premises.
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17.02
Brokers
. Landlord and Tenant each represent to the other that neither has
any obligation to any broker or finder in connection with this transaction, and that no fee or
commission is due any broker, finder, or similar person in connection herewith. Landlord and
Tenant each indemnifies the other and agrees to hold the other harmless from and against any and
all claims, demands, liabilities, lawsuits, costs, and expenses (including reasonable attorneys
fees) for any fee or commission due to any other broker, finder, or similar person in connection
with this transaction and arising out of the act of the indemnifying party.
17.03
Modification
. No modification, waiver, amendment, discharge, or change of this
Lease shall be valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge, or change is or may be sought.
17.04
Severability
. In the event any term, covenant, condition, provision, or
agreement contained herein is held to be invalid, void, or otherwise unenforceable, by any court
of competent jurisdiction, such holding shall in no way affect the validity or enforceability of
any other term, covenant, condition, provision, or agreement contained herein.
17.05
Governing Law
. This Lease and the obligations of the parties hereunder shall be
interpreted, construed, and enforced in accordance with the laws of the State of Nevada and each
provision of this Lease shall be valid and enforceable to the fullest
extent permitted by Law.
17.06
Terminology
. All personal pronouns used in this Lease, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; the singular shall include
the plural and vice versa. Business Day means other than a Saturday, Sunday, or holiday. In the
event that the time for performance of an act under this Lease falls on a Saturday, Sunday, or
holiday, the date for performance of such act shall be extended to the next Business Day.
17.07
Counterparts
. This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original agreement, and all of which shall constitute one agreement
by each of the parties hereto.
17.08
Binding Effect
. Except as otherwise herein provided, this Lease shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns.
17.09
Captions
. Article and section titles or captions contained herein are inserted
as a matter of convenience and for reference, and in no way define, limit, extend, or describe the
scope of this Lease or any provisions hereof. All reference to section numbers herein shall mean
the sections of this Lease.
17.10
Notices to Landlord and Tenant
.
A) Except as otherwise in this Lease provided, a bill, demand, statement, consent, notice or
communication which Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing, delivered personally to Tenant or sent by certified
(return receipt requested) or private express mail courier (postage fully prepaid) addressed to
Tenant to the addresses set forth in Section 17.11 below or at such other address(es) as Tenant
shall designate by notice given as herein provided. If Landlord is notified of the identity and
address of Tenants Leasehold Mortgagee, Landlord shall give such party any notice served upon
Tenant hereunder by certified or private express mail carrier.
B) Any notice, request, demand or communication by Tenant to Landlord must be in writing and
delivered personally to Landlord or sent by certified (return receipt requested) or private express
courier (postage fully prepaid), addressed to Landlord to the addresses set forth in Section 17.11
below or at such other address(es) as Landlord shall designate by notice given as herein provided.
If Tenant is notified of the identity and address of Landlords mortgagee or beneficiary under a
deed of trust, or ground or underlying
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lessor, Tenant shall give such party notice of any default by Landlord hereunder by certified
or private express mail carrier.
C) The time of the rendition of such bills or statements and of the giving of such
consents, notices, demands, requests or communications (collectively notice) by Tenant or
Landlord shall be deemed to be the earlier of (i) the date received by Tenant with respect to a
notice to Tenant, and the date received by Landlord with respect to a notice to Landlord (ii) if
the notice is sent by certified mail, five (5) days after the same is mailed, or (iii) if the
notice is sent by private overnight courier (e.g., Federal Express or similar courier), one (1)
day after the same is delivered to or picked up by such courier. Rejection or refusal to accept a
notice, request, demand, or the inability to deliver same because of a changed address of which no
notice was given shall be deemed to be a receipt of the notice, request or demand sent..
17.11
Addresses for Notices to Landlord and Tenant
.
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord
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Syufy Enterprises
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150 Golden Gate Ave.
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San Francisco, CA 94102
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Attn.: Real Estate Department
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To Tenant:
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Century Theatres, Inc.
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150 Golden Gate Avenue
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San Francisco, CA 94102
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Attention: Legal Department
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Tenant and Landlord may change their respective addresses for purposes of this section by giving
written notice of such change to the other.
17.12
Entire Agreement
. This Lease and the exhibits attached set forth the entire
agreement between the parties. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever as to any matter. Any prior agreements, conversations, or
writings are merged herein, superseded hereby, and extinguished.
17.13
Sale or Transfer of Premises
. Landlord shall promptly notify Tenant in writing
of any sale or transfer of the Premises or any assignment of Landlords 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 Landlords interest in this Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or involuntary, or
by act of Landlord or by operation of law, Tenant shall be under no obligation to pay rent or other
charges payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have been
notified in writing of such transfer, assignment, or change in title, and given satisfactory proof
thereof, and the withholding of rent or other charges payable by Tenant to Landlord hereunder, in
the meantime shall not be deemed a default upon the part of Tenant. Landlord may assign this Lease
and convey its title to the Premises, subject to this Lease, at any time. In the event of such
assignment of this Lease, Landlord shall have no further obligations under this Lease, except for
liabilities which shall have accrued prior to the date of such assignment and transfer and that the
assignee assumes in writing Landlords obligations hereunder accruing on and after the effective
date of the assignment.
17.14
Force Majeure
. In the event that Tenant shall be delayed or hindered in or
prevented form the performance of any act other than Tenants obligation to make payments of rent,
and other charges required hereunder, by reason of strikes, lockouts, unavailability of materials,
failure of power, restrictive
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governmental laws or regulations, riots, insurrections, the default of Landlord, war, or
other reason beyond its control, then performance of such act shall be excused for the period of
the delay, and the period for the performance of such act shall be extended for a period
equivalent to the period of such delay. Notwithstanding the foregoing, lack of funds shall not be
deemed to be a cause beyond the control of Tenant.
17.15
Waiver
. No term, covenant, or condition of this Lease can be waived except in
writing, signed by the party making the waiver, Landlord or Tenant, as the case may be. No waiver
of any default hereunder shall be implied from any omission by either party to take any action on
account of such default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the express waiver, and that only for the
time and to the extent therein stated. The acceptance by Landlord of Rent or partial Rent with
knowledge of the breach of any of the covenants of this Lease by Tenant shall not be deemed a
waiver of any such breach. One or more waivers of any breach of any covenant, term, or condition
of this Lease shall not be construed as a waiver of any subsequent breach of the same covenant,
term, or condition. The consent or approval by either party shall not be deemed to waive or render
unnecessary that partys consent to or approval of any subsequent similar act.
17.16
Estoppel Certificate
. Either party hereto shall, within twenty (20) days notice
from the other party (referred to as the Requesting Party), execute and deliver to the
Requesting Party, in recordable form, a certificate stating that this Lease is unmodified and in
full force and effect, or in full force and effect as modified, and stating the modifications. The
certificate also shall state the amount of current monthly rent, the dates to which the rent has
been paid in advance, the amount of prepaid rent, and any other information with respect to this
Lease reasonably requested by the Requesting Party. Failure to deliver the certificate within the
twenty (20) days shall be conclusive upon the party failing to deliver the certificate for the
benefit of the party requesting the certificate and any successor to the party requesting the
certificate, that this Lease is in full force and effect, and has not been modified except as may
be represented by the party requesting the certificate, and that rent and other charges have not
been paid for any period after date of the notice requesting the certificate.
17.17
Number and Gender
. Whenever the context requires the singular number, it shall
include the plural, the plural the singular, and the use of any gender shall include all genders.
17.18
No Holding Over
. Tenant shall have no right to holdover after the end of the
Term. Should Tenant or any Leasehold Mortgagee succeeding to the interest of Tenant hold over in
possession after the expiration date, such holding over shall not be deemed to extend the Lease or
renew this Lease; and Tenant shall pay a pro-rated daily amount equal to one hundred twenty
percent (120%) of the Annual Rent in effect immediately preceding the expiration date until Tenant
vacates the Premises.
17.19
Mechanics Liens
. Tenant shall discharge, by payment, bonding or otherwise, any
mechanics liens filed against the Premises or the Premises in connection with Tenants work and/or
any alterations or other work done by or on behalf of Tenant in the Premises within thirty (30)
days after Tenant receives notice of the filing of such lien, and Landlord shall cooperate with
Tenant at no expense to Landlord, in order to accomplish such discharge. Should Tenant fail to so
discharge any such mechanics lien, Landlord shall have the right to remove such mechanics liens
and charge all costs thereof, including without limitation, reasonable attorneys fees, to Tenant
as additional rent plus interest at 18%.
17.20
Relationship of Parties
. Nothing contained in this Lease shall be construed to
create the relationship of principal and agent, partnership, joint venture or any other
relationship between the parties hereto other than the relationship of Landlord and Tenant. Nothing
contained herein shall in any way impose any liability upon the stockholders, officers or directors
of Landlord or stockholders, officers, directors or trustees of Tenant should such parties be
corporate entities.
17.21
Time of the Essence
. Time is of the essence with respect to Tenants payment of
rent and other monetary obligations to Landlord under this Lease.
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17.22
Facsimile Copies
. Tenant and Landlord (i) have each agreed to permit the
use, from time to time and where appropriate, of telecopied signatures in order to expedite the
transaction contemplated by this Lease, (ii) each intend to be bound by its respective telecopied
signature, (iii) are each aware that the other will rely on the telecopied signature, and (iv) each
acknowledge such reliance and waiver any defenses to the enforcement of the documents effecting the
transaction contemplated by this Lease based on a telecopied signature.
17.23
Anti-Merger
. The voluntary or otherwise surrender of this Lease by Tenant, or a
mutual cancellation of this Lease shall not work a merger but shall at the option of Landlord
either:
A) Terminate any existing subleases or subtenancies; or
B) Operate as an assignment to Landlord (and assumption by Landlord) of any subleases or
subtenancies.
Executed as of the date first written above.
TENANT
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CENTURY THEATRES, INC.,
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a
Delaware Corporation
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By.
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/s/ Joseph Syufy
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Print Name: Joseph Syufy
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Title: Sr. Executive Vice President
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LANDLORD
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SYUFY ENTERPRISES
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a California Limited Partnership
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By:
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/s/ Raymond Syufy
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Print Name: Raymond Syufy
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Title: General Partner
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EXHIBIT
10.36(a)
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Recitals
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1
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ARTICLE I: Definitions Exhibits
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1.01
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Attachments to Lease and Exhibits
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1
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1.02
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Definitions
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1
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ARTICLE II: Premises Term Options Covenant of Title
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2.01
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Lease of Premises
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2
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2.02
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Term of Lease
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2
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2.03
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Option to Extend Lease Term
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3
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2.04
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Covenant of Title
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3
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ARTICLE III: Use of Premises
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3.01
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Use
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4
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ARTICLE IV: Rent
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4.01
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Base Rent /Minimum Monthly Rent
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4
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4.02
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Percentage Rent
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4
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4.03
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Rent Payments
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5
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4.04
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Place for Payment of Rent
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5
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4.05
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Late Payment of Rent
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5
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ARTICLE V: Taxes, Assessments and Utilities
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5.01
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Impositions
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5
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5.02
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Exceptions from Impositions; Charges in Lien of Imposition Proration of Taxes
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6
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5.03
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Omitted
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6
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5.04
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Contest of Taxes
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6
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5.05
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Utilities
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7
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5.06
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Personal Property Taxes
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ARTICLE VI: Insurance
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6.01
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Acquisition of Insurance Policies
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7
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6.02
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Types of Required Insurance
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7
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6.03
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Terms of Insurance
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8
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6.04
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Landlords Acquisition of Insurance
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8
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6.05
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Insurance Money and Other Funds Held In Trust
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8
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6.06
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Application or Proceeds of Physical Damage Insurance
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8
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6.07
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Cooperation for Insurance Proceeds
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9
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6.08
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Waiver of Right of Recovery
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9
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ARTICLE VII: Maintenance, Repairs And Alterations
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7.01
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Alterations Changes
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9
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i
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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7.02
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Repairs Maintenance
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10
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ARTICLE VIII: Environmental Matters
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8.01
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Definition
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10
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8.02
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Tenants Responsibilities and Landlord Indemnity
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10
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8.03
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Remedial Work
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11
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8.04
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Maintenance of Premises
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12
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8.05
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Landlords Responsibilities and Tenants Indemnity
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12
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8.06
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Landlord Inspection
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13
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8.07
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Effect of Termination
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13
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ARTICLE IX: Improvements
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9.01
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Tenants Signs
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14
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9.02
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Hold Harmless
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14
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9.03
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Permits; Compliance With Codes
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14
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9.04
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Ownership
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14
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9.05
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Control
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15
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ARTICLE X: Indemnity
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10.01
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Indemnification
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15
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ARTICLE XI: Assignment and Subletting
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11.01
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Assignment and Subletting
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15
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11.02
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Notice to Landlord
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16
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ARTICLE XII Encumbrance of Leasehold Estate
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12.01
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Leasehold Mortgages
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16
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ARTICLE XIII: Mortgage Subordination
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13.01
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Existing Mortgages
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16
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13.02
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Future Mortgages
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16
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ARTICLE XIV: Condemnation Eminent Domain
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14.01
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Definitions
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16
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14.02
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Notice to Other Party
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17
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14.03
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Total Taking
Effect on Rent and Term
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17
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14.04
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Distribution of Award for Taking
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17
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14.05
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Partial
Taking Rent Adjustments
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18
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14.06
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Partial Taking Option to Terminate
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18
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14.07
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Separate Tenants Award
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18
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ARTICLE XV: Default
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ii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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15.01
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Tenants Default
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18
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15.02
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Landlords Remedies Cumulative
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18
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15.03
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Landlords Default
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20
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15.04
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Waiver of Redemption
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20
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15.05
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Dispute Resolution
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20
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15.06
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Attorney Fees
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21
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ARTICLE XVI: Representations and Warranties
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16.01
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Landlords Representations and Warranties
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21
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16.02
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Tenants Representation and Warranties
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22
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ARTICLE XVII: Damage or Destruction
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17.01
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Repairs, Alterations and Further Improvements
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22
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17.02
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Prompt Repair
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22
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17.03
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Rent Adjustment
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23
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ARTICLE XVIII: Miscellaneous
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18.01
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Limitation on Liability
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23
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18.02
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Modification
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23
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18.03
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Severability
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23
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18.04
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Governing Law
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23
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18.05
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Terminology
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23
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18.06
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Counterparts
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23
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18.07
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Binding Effect
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23
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18.08
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Captions
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23
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18.09
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Notice to Landlord and Tenant
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23
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18.10
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Addresses for Notices to Landlord and Tenant
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24
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18.11
|
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Entire Agreement
|
|
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24
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18.12
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Sale Or Transfer of Premises
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24
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18.13
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Force Majeure
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25
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18.14
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Waiver
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25
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18.15
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Estoppel Certificate
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25
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18.16
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Number and Gender
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25
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18.17
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No Holding Over
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25
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18.18
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Mechanics Liens
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25
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18.19
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Relationship of Parties
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25
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18.20
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Time of the Essence
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26
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18.21
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Facsimile Copies
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26
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18.22
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Anti-Merger
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26
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Signature Page
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26
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iii
LEASE
CENTURY THEATRES
Table of Contents
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Page No.
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Exhibit A
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Description of Premises
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A-1
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Exhibit B
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|
Site Plan of Premises
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B-1
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Exhibit C
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Form of Memorandum
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C-1
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Exhibit D
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Guaranty of Lease
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D-1
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iv
LEASE
THIS INDENTURE OF LEASE, dated as of September 30, 1995, by and between SYUFY ENTERPRISES, a
California Limited Partnership with an office at 150 Golden Gate Ave., San Francisco, California,
hereinafter called Landlord, and CENTURY THEATRES OF CALIFORNIA, INC., a California corporation
with an office at 150 Golden Gate Avenue, San Francisco, CA 94102, hereinafter called Tenant.
RECITALS
Landlord owns the fee interest in Land, (including land on Vemon Ave.) Buildings, 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 Entire Premises.
EXHIBIT B a site plan of the Entire Premises including the Leased Premises which is outlined
in red and land on Vernon Ave.
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 Entire Premises shall mean the Land including Buildings, the Leased Premises, parking; driveways and such other improvements as may presently exist or be added.
The
Term Initial Rent Due Date shall mean October 1, 1995.
The term Initial Term is defined in Section 2.02 herein.
The term Leased Premises shall mean Tenants Building as set forth in Exhibit B and the land thereunder and the rights, easements and privileges granted to Tenant in this Lease.
1
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 period of five years each.
The
term Percentage Rate shall mean (8%).
The
term Premises shall mean the Leased Premises.
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 and retains the right to develop the unimproved
portion of the Entire Premises so long as it does not interfere with Tenants 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 Tenants option, extend the Initial Term of this
Lease for up to two (2) consecutive additional periods of five (5) 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) Tenants right to the options to extend the Lease Term and Tenants 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 Landlords 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; (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 Landlords insurance or
liability.
C) Tenant is granted a non-exclusive easement for parking and
ingress and egress on and over the Entire Premises as well as the rights under
the Easement Agreement with the Neighboorhood Bible Church. Tenant is
responsible for all costs associated with the Vernon Ave. land, the Easement
Agreement and the Entire Premises exclusive of Landlords Buildings.. The
location of said easements may be changed at the sole discretion of the
Landlord so long as such change does not interfere with Tenants Permitted Use.
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 $100,833.33. 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 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 man 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 Landlords 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 Entire Premises, or the rents
receivable therefrom, or any part thereof or any use therein 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 other items arising directly or indirectly out of
any act or omission of Landlord, any of Landlords 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 Entire Premises and/or the
Improvements on the Entire 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 are assessed on any Buildings exclusive of the Entire
Premises, Tenant shall pay all such impositions. With respect to Impositions which by law may be
paid in installments over a period of time, Tenant 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 Tenant 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 Landlords
Buildings subject to the Installment Election. Landlords 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 Tenant had in fact made the Installment Election. Landlord shall pay all such real
property taxes to the Tenant prior to delinquency. In the event Tenant fails to pay to Landlord
such real property taxes as provided herein, Landlord shall pay Tenant in addition interest thereon
at the rate of 18% per annum from the delinquency date until such payment has been made.
5.02 Exceptions from Impositions; Charges in Lieu of Impositions.
A) Nothing herein contained shall require Tenant to pay any estate, inheritance, succession,
capital levy, corporate franchise, gross receipts, transfer, or income tax of Landlord, nor shall
any of the same be deemed to be included within the term Impositions as defined herein.
B) Notwithstanding any other provision of this Article V, if at any time after the date of
this Lease the present method of taxation or assessment shall be
changed so that in lieu of, as a
substitute for (whether in whole or in part) or as a supplement to (provided such supplemental tax
relate to real estate or revenues form 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 party on the Rent, or a tax, assessment, levy or
charge, measured or based, in whole or in part, on the Entire
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 he payable if the Entire Premises were the only property of
Landlord subject to such taxes, or the income from operation of the Entire Premises were Landlords
only income, as the case may be the event of such assessment, Landlord would pay Tenant any such
assessment related to any Buildings other than the Lease Premise
located on the Entire Premises.
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 therefore, 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 5.04. Tenant shall indemnify, protect and
hold harmless Landlord and this Premises from any lien or liability with respect to any such
Imposition or contest thereof, including all costs and expenses related thereto. Landlord shall
provide Tenant with copies of notice when received by Landlord from the taxing authorities of any
assessments or reassessments of the Premises in sufficient time (but in no event later than thirty
(30) days after Landlords receipt of the same) to enable Tenant to contest the same in accordance
with the provisions of this Section 5.04.
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 Entire Premises including the Common Area but exclusive of
Landlord s buildings.
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, it Tenant fails to discharge such lien within ten (10)
days following Tenants receipt of notice from Landlord, including introit limitation reasonable
attorneys fees, together with interest at the rate of eighteen
percent (138%) per annum from the
date of expenditure, such additional rent being due and payable within ten (10) days of notice
thereof.
6
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 Entire
Premises (exclusive of the interior of Landlords Buildings), Leased Premises, Common Area and the
appurtenances thereto, including the sidewalks and alleyways adjacent thereto, with limits of
liability no less than Ten Million Dollars ($10,000,000) per occurrence and in the aggregate.
B)
Physical Property Damage Insurance.
During the term hereof, Tenant shall Keep
Tenants Building (excluding foundations, footings and underground improvements) and personal
property as well as all Improvements on the Common area, (Landlords Buildings excluded),
including, but not limited to, signs, outdoor lighting fixtures and fences 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, but including Builders Risk, to the extent of not less than the full replacement value
thereof less any deductible applicable to all of Tenants 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 Landlords 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 Tenants
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 proceeds to
Landlord for, and periodically during the course of, repair and restoration of Tenants 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 thirty (30) 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.
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6.04
Landlords 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 XIV, 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 Mortgage 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 of 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 (B) (Physical Property Damage Insurance) the application of
insurance proceeds from damage or loss to property shall be determined in part in accordance with
Article 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.
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 partys 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,
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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 Tenants 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 partys 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 Landlords written approval shall be
first obtained.
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 an 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
Entire Premises which shall include the Common Area, driveways, parking, landscaping, signs,
fences, lighting
and
any and all improvements (exclusive of Landlords Buildings) in first class
condition and make such structural and non-structural, ordinary and extraordinary, foreseen and
unforeseen repairs such that the Entire Premises (exclusive of Landlords Buildings) 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
9
and Recovery Act, 42 U.S.C. Section 6901, et esq. (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 Safely 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, cods, 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
Tenants 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 Tenants (or its agents,
employees, contractors or invitees) acts or omissions brought upon, stored, used, generated or
released into the environment by Tenant, its agents, employees, contractors or invitees (referred
to as Tenants 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 Tenants 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 Tenants 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 Tenants 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.
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C) In addition to Tenants 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 Tenants 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 Tenants 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 Tenants 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 conditions 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 Landlords 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, Landlords 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 Landlords consent before taking such action.
8.03
Remedial Work
. In the event any investigation or monitoring of site conditions
or any clean-up, containment, restoration, removal or other remedial work (Remedial Work) is
required (a) under any applicable federal, State or local law or regulation, (b) by any judicial,
arbitral or administrative order, (c) to comply with any agreements affecting the Premises or (d)
to maintain the Premises in a standard of environmental condition which presents no risk to
safety or health, prevents the release of any hazardous materials to adjacent property and
otherwise is consistent with the prudent ownership of property of the character of the Premises
and/or Tenants Building and if such Remedial Work is required as a direct result of Tenants
Environmental Acts, then Tenant at Tenants 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
Tenants Environmental Acts, then, Landlord, at Landlords 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 partys 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
11
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 when Tenant is the responsible party, shall be
paid as additional rent due and payable within thirty (30) days of Landlords 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 Tenants 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 Tenants 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
Landlords Responsibilities and Tenants Indemnity.
A) Landlord shall not, without prior advance notice to Tenant, cause or permit any
Hazardous Materials to be brought upon, stored, used, generated, released into the environment or
disposed of, on, in, under or about the Entire Premises, the Common Area, or any other portion of
the Premises by Landlord, its agents, employees, tenants, contractors or invitees, in violation of
any law.
B) Landlord shall promptly notify Tenant of, and shall promptly provide Tenant with true,
correct, complete and legible copies of, all of the following environmental items relating to the
Entire Premises which may be filed or prepared by or on behalf of, or delivered to or served upon,
Landlord: all orders, reports, listings and correspondence (even those which may be considered
confidential) of or concerning the release, investigation of, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or
not required by any applicable
laws, including, but not limited to, reports and notices required by any applicable laws,
including, but not limited to, reports and notices required by or given pursuant to any applicable
laws, and all complaints, pleading and other legal documents filed against Landlord related to
Landlords or Landlords other tenants 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 Tenants successors and assigns, and their directors, trustees,
beneficiaries, officers, shareholders, employees and agents (collectively, Tenants 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,
12
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 Landlords 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 Landlords agents and employees shall have the right, but not the
obligation, without limitation upon any of Landlords other rights and remedies under this Lease, to
immediately enter upon the Premises and to discharge Tenants obligations under this Article VIII
at Tenants expense, notwithstanding any other provisions of this Lease. Landlord and Landlords
agents and employees shall endeavor to minimize interference with Tenants business. All sums
reasonably disbursed, deposited or incurred by Landlord in connection therewith, including, but not
limited to, all costs, expenses and actual attorneys fees, shall be due and payable by
Tenant to Landlord, as an item of additional rent, on demand by Landlord, together with interest
thereon at the rate often percent (10%) per annum.
8.07
Effect of Termination.
A) Upon termination of this Lease, Tenant shall advise Landlord in writing whether or not, to
the best of Tenants knowledge. Tenant is in default of any provision of this Article VIII and if
it is in default, the specific nature of such default.
B) All liabilities of Landlord and Tenant, respectively, under this Article VIII, accrued
as of the date this Lease terminates, shall survive such termination.
ARTICLE IX
IMPROVEMENTS
9.01
Tenants Signs.
(A) Except for signs located on the Premises at the commencement date of this lease or signs
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. All such signs shall be maintained at Tenants sole expense.
(B) Landlord hereby agrees that Tenant shall have the right to maintain the following signs
(at Tenants sole expense);
(1) Illuminated signs on the exterior walls of Tenants Building and on the theatre canopy or
marquee.
13
(2) Signs on the interior or exterior of any windows of Tenants
Building.
(3) Easel or placard signs within the lobby entrance or on sidewalks immediately in front of
Tenants 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 Landlords 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 rime 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
Landlords defense, including
attorneys fees;
provided, however,
Tenant shall be liable for attorneys fees only if
single legal counsel (or a single firm of legal counsel) cannot represent both Landlord and Tenant
without there arising an actual or potential conflict of interests.
9.03
Permits: Compliance With Codes.
All building permits and other permits, licenses,
permissions, consents and approvals required to be obtained from governmental agencies or third
parties in connection with construction of the Improvements and any subsequent improvements,
repairs, replacements or renewals to the Premises shall be acquired as required by applicable laws,
ordinances or regulations. Landlord agrees to cooperate reasonably with Tenant and all
governmental authorities having jurisdiction. Tenant shall cause all work on the Premises during
the Term to be performed in accordance with all applicable laws and all directions and regulations
of all governmental agencies and the representatives of such agencies having jurisdiction.
9.04
Ownership.
A) During the Term of this Lease (including any renewals or extensions), the Improvements
erected, constructed or located within the Premises, including without limitation all additions,
alterations and improvements thereto or replacements thereof and all appurtenant fixtures,
machinery and equipment installed therein, shall be and remain the
property of Tenant. At the
expiration or earlier termination of this Lease, the Improvements and all additions, alterations
and improvements thereto or replacements thereof and all appurtenant fixtures, machinery and
equipment installed therein including moveable trade fixtures and personal property of shall become
the property of landlord.
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 successor, assigns and any successor
fee owners of the Premises), and all of their directors, officers, employees and agents,
hereinafter referred to as
14
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 Tenants 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
Landlords 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 landlords 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, or (b) to any
subsidiary or affiliate corporation of Tenant or of Tenants parent corporation (Parent
Corporation) (so long as such corporation remains a subsidiary or affiliate of Tenant or of
Tenants Parent Corporation), or (c) to Tenants 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 Tenants Parent Corporation, or (e) to any
corporation which operates motion picture theatres and has a book net worth of not less than
$30,000,000.00 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.
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 Tenants Leasehold Estate or assign this Lease as security for a Mortgage or
Mortgage.
B) Tenant shall not place or create any mortgage, deed of trust, or other lien or encumbrance
affecting Landlords fee interest in the Land or Landlords interest in this Lease.
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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 Landlords 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 of any interest in them by eminent domain or inverse condemnation:
A) Taking means that taking or damaging, including severance damage, by eminent domain or by
inverse condemnation for any public or quasi-public use under any statute. The transfer of title
may be either a transfer resulting from the recording of a final order in condemnation or a
voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation,
in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. The
Taking shall be considered to take place as of the date on which the right to compensation and
damages accrues under the law applicable to the Premises, unless the condemnor also takes actual
physical possession of the Premises or a part thereof, in which case the date of Taking for the
purposes of this Lease shall be the later of the date on which the right to compensation and
damages accrues or the date physical possession is taken by the condemnor.
B) Total Taking means the Taking of the fee title to all the Premises and the Improvements
on the Premises, which shall be considered to include any offsite improvements effected by Tenant
to serve the Premises or the improvements or the parking on the 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.
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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 dale 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, Tenants obligation
to pay Rent shall terminate on, and Tenants 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 lease hold estate.
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
expanses;
E) To Landlord, any other award which will not reduce the amount which otherwise would be
awarded to Tenant; and
F) To Landlord, any balance.
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
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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 Tenants Award
In the event of a Taking, Tenant may make a separate
claim with respect to lost business, lost profits, goodwill, moving expenses and other related
damages against the acquiring governmental Agency.
ARTICLE XV
DEFAULT
15.01
Tenants 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 Tenants 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
Landlords 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 1.954.4,
Landlord may re-enter the Premises, by legal proceedings (or without legal proceedings if the
Premises have been abandoned), and take possession thereof, without thereby terminating this Lease,
and thereupon Landlord may expel all persons and remove all property therefrom, without becoming
liable to prosecution therefor, and relet the Premises or a portion or portions thereof, and
receive the rent therefrom, applying the same first to the payment of the reasonable expenses of
such re-entry and the reasonable cost of such reletting, and then to the payment of the Rent and
other amounts for which Tenant is then in default; the balance, if any, to be paid to Tenant, who,
whether or not the Premises are relet, shall remain liable for any deficiency. It is agreed that
the commencement and prosecution of any action by Landlord in forcible entry and detainer,
ejectment, or otherwise, or the appointment of a receiver, or any execution of any decree obtained
in any action to recover possession of the Premises, or any re-entry, shall not be construed as an
election to terminate this Lease unless Landlord shall, in writing, expressly exercise its election
to declare the Lease Term hereunder ended and to terminate this Lease, and unless this Lease be
expressly terminated, 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 Landlords prior right, during any
continuance of Tenants default, to relet the Premises or a
portion or portions thereof.
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C)
Termination of Lease and Lessees 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 stall 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 lime 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 Tenants 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 lime
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.
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)
Landlords Right to Cure Tenants Default.
Landlord, at any time after Tenant is in
default under Section 15.01 herein, may cure the default at Tenants expense. If Landlord, at any
time, by reason of Tenants default, pays any sum or does any act that requires the payment of any
sum, the sura 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.
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15.03
Landlords 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 Landlords expense. If Tenant at any time, by reason
of Landlords 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 Tenants 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
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:
20
(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
Landlords 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 Landlords 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 Landlords knowledge there is no claim, suit, demand or litigation, or
administrative proceeding, or condemnation, eminent domain or similar proceeding pending or
threatened with respect to the Premises or the Entire Premises, nor does Landlord know or have
reasonable grounds to know of any basis for such action.
D) Tenant shall at all times during the Term of this Lease have the right to
peacefully and quietly have, hold, occupy and enjoy the Premises, subject to the terms of this
Lease without hindrance or molestation from landlord or any person
claiming by, from or under Landlord.
E)
Landlord is not now insolvent either in the sense that it cannot pay its current
bills as they come due or that its liabilities exceed its assets
F) The title to the Premises and the Entire Premises is vested in Landlord, subject to no
defects or encumbrances created by Landlord except as disclosed to Tenant in writing by Landlord
prior to the Effective Date.
G) Except for liens or encumbrances created by or through Tenant, or based upon Impositions
which are the responsibility of Tenant under this Lease, Landlord shall not, after the date
hereof, agree to or create or permit or suffer to be created any liens or encumbrances on the
Premises which are (i) not specifically stated in writing to be junior to this Lease, or any New
Lease (as defined herein), or (ii) which are inconsistent with the obligations of
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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.
16.02
Tenants 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 Tenants 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)
Tenants Obligation to Repair.
If the Premises or the
improvements to the common Area are damaged by any peril after the
Commencement date of the Lease, Tenant shall restore the Leased
Premises or the Common Area improvements 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 or the
Common Area improvements 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 Tenants cost and expense (which may be paid from
insurance proceeds available as above provided) and Tenant shall diligently commence and
continuously carry out such repair, replacement, reconstruction or rebuilding, to full completion
as soon as possible, except to the extent of delays due to strikes, lockouts, shortages of labor
or materials after due diligence in obtaining the
same governmental restrictions, fire, casualty, riot, act of God, act of the public enemy, or other
causes beyond the
reasonable control of Tenant after the exercise of due diligence, including diligence in
contracting, and the exercise of rights under contracts, with
contractors and suppliers.
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 Tenants property or any inconvenience or annoyance caused by such restoration.
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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 fails 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 18.10 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 Tenants 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 18.10
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 Landlords 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.
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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.
18.10
Addresses for Notices to Landlord and Tenant
Notices to are to be delivered, mailed or couriered to the following address(es):
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To Landlord:
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Syufy Enterprises
150 Golden Gate Ave.
San Francisco, CA 94102
Attn: Real Estate
Department
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To Tenant:
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Century Theatres of California, Inc.
150 Golden Gate Avenue
San Francisco, CA 94102
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Attention: Legal Department
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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 Landlords 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 Landlords interest in this Lease or any change in, or
transfer of, title in and to the Premises of any part thereof, whether voluntary or involuntary, or
by act of Landlord or by operation of law, Tenant shall be under no obligation to pay rent or
other charges payable by Tenant to Landlord hereunder, thereafter accruing, until Tenant shall have
been notified in writing of such transfer, assignment, or change in title, and given satisfactory
proof thereof, and the withholding of rent or other charges payable by Tenant to Landlord
hereunder, in the meantime shall not be deemed a default upon the part of Tenant Landlord may
assign this Lease and convey its title to the Premises, subject to this Lease, at any time. In the
event of such assignment of this Lease, Landlord
shall have no further obligations under this Lease, except for liabilities which shall have
accrued prior to the date of such assignment and transfer and that the assignee assumes in writing
Landlords 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 Tenants 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.
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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 partys
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 Tenants 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
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 Tenants 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.
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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.
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TENANT:
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CENTURY THEATRES OF
CALIFORNIA, INC.,
a California Corporation
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By:
Print Name:
Title:
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/s/ Joseph Syufy
Joseph Syufy
V. P.
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LANDLORD:
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SYUFY ENTERPRISES
a California Limited Partnership
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By:
Print Name:
Title:
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/s/ Raymond W. Syufy
Raymond W. Syufy
G.P.
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