Contract

EXHIBIT 10.40 LEASE AGREEMENT This LEASE AGREEMENT (this “Lease”) is made and entered into as of this9th day of August, 2002 by and between OLP BROOKLYN PAVILION LLC, a Delawarelimited liability company having an address at Suite 303, 60 Cutter Mill Road,Great Neck, New York 11021 (“Landlord”), and PRITCHARD SQUARE CINEMA LLC, a NewYork limited liability company having an address at c/o Screen Arts Corporation,188 Prospect Park West, Brooklyn, New York 11215 (“Tenant”). W I T N E S S E T H : WHEREAS, pursuant to a sale leaseback transaction, Landlord has thisdate acquired that certain parcel(s) of land (the “Land”), such Land beingimproved by a 31,120 square foot (above grade), three-story movie theater andcafe, together with all other buildings and other improvements now or hereafterlocated thereon, all commonly known as the Pavilion Theater, 188 Prospect ParkWest, Brooklyn, New York and more particularly described on EXHIBIT A attachedhereto and made a part hereof (such Land, buildings and improvements, togetherwith all easements and appurtenances relating thereto, being collectivelyreferred to herein as the “Demised Premises”); and WHEREAS, as a condition to Landlord’s acquisition of the DemisedPremises and of Tenant’s disposition of the Demised Premises, Landlord nowdesires to lease the Demised Premises to Tenant and Tenant now desires to leasethe Demised Premises from Landlord all upon the terms and conditions herein setforth. NOW, THEREFORE, in consideration of the mutual premises herein setforth, the sufficiency of which being hereby acknowledged, the parties hereto dohereby agree as follows: ARTICLE 1 TERMS AND DEFINITIONS For purposes of this Lease, the following terms shall have thefollowing meanings:”Broker”: None.”Building”: Those certain buildings now or hereafter located on and forming a part of the Demised Premises, which Landlord shall own, together with all appurtenances thereto.”Lease Commencement Date”: Shall be the date hereof.”Lease Term”: A period of time commencing on the Lease Commencement Date and ending on July 31, 2022, subject to extension as provided herein (Article 3).”Minimum Annual Rent”: Minimum Annual Rent per annum for the Demised Premises shall be as follows (Article 4): LEASE YEAR MINIMUM ANNUAL RENT MONTHLY RENT Lease Years 1-2 $1,140,000.00 $95,000.00 Lease Year 3 $1,168,500.00 $97,375.00 Lease Year 4 $1,197,712.50 $99,809.38 Lease Year 5 $1,227,655.31 $102,304.61 Lease Year 6 $1,258,346.70 $104,862.22 Lease Year 7 $1,289,805.36 $107,483.78 Lease Year 8 $1,322,050.50 $110,170.87 Lease Year 9 $1,355,101.76 $112,925.15 Lease Year 10 $1,388,979.30 $115,748.28 Lease Year 11 $1,423,703.79 $118,641.98 Lease Year 12 $1,459,296.38 $121,608.03 Lease Year 13 $1,495,778.79 $124,648.23 Lease Year 14 $1,533,173.26 $127,764.44 Lease Year 15 $1,571,502.59 $130,958.55 Lease Year 16 $1,610,790.16 $134,232.51 Lease Year 17 $1,651,059.91 $137,588.33 Lease Year 18 $1,692,336.41 $141,028.03 Lease Year 19 $1,734,644.82 $144,553.73 Lease Year 20 $1,778,010.94 $148,167.58″Rent Commencement Date”: Shall be the date hereof.”Security Deposit”: Initially $209,947.50, subject to increase as provided in Article 5.Address for Notices(Section 21.15): To Landlord: OLP Brooklyn Pavilion LLC 60 Cutter Mill Road Suite 303 Great Neck, New York 11021 Attention Jeffrey Fishman, President With a copy to: Mark H. Lundy Vice President 60 Cutter Mill Road Suite 303 Great Neck, New York 11021 To Tenant: Pritchard Square Cinema LLC and Norman Adie 2 c/o Screen Arts Corporation 188 Prospect Park West Brooklyn, New York 11215 Attention: Norman Adie With a copy to: Nicholas T. Donovan, Esq. Donovan & Giannuzzi 405 Park Avenue, Suite 1104 New York, New York 10022 ARTICLE 2 DEMISED PREMISES 2.1 THE BUILDING AND THE LAND. Upon and subject to the terms, covenants andconditions hereinafter set forth, Landlord hereby leases and demises to Tenantand Tenant hereby hires from Landlord the Demised Premises. Notwithstandinganything herein to the contrary, and in addition to Landlord’s rights pursuantto Article 10 below, Landlord retains the right to place additionaladvertisements and/or additional billboards (collectively, “Landlord’sAdditional Property”) on such exterior portions of the Demised Premises asLandlord shall determine provided that same (i) complies with applicable law,(ii) does not interfere in any material respect with the permitted operations ofTenant at the Demised Premises (as mutually determined by Landlord and Tenant intheir reasonable discretion) and (iii) does not interfere in any materialrespect with Tenant’s then-existing permitted signage, if any (as mutuallydetermined by Landlord and Tenant in their reasonable discretion). If Landlorddetermines to add Landlord’s Additional Property to such exterior portions ofthe Demised Premises: (i) Tenant shall afford Landlord, any tenant or licenseeof Landlord’s Additional Property, and any contractor, agent, employee orrepresentative of either, access to the Demised Premises at reasonable times andupon reasonable notice to Tenant (in either case except in the event ofemergency) to construct Landlord’s Additional Property and to maintain, alter,demolish and/or replace same, (ii) provided no default by Tenant exists underthis Lease beyond applicable notice and/or cure periods, Landlord and Tenantshall share equally in all rental and other income derived from Landlord’sAdditional Property (net of the reasonable out-of-pocket costs of constructing,maintaining and/or providing utility services to same), (iii) Landlord’sAdditional Property shall be separately metered (or submetered) for utilitiesused thereby, and (iv) Landlord’s Additional Property shall be constructed andmaintained at the expense of either (X) Landlord and Tenant sharing equally inthe costs of such construction and maintenance or (Y) the tenant/licensee ofsuch Landlord’s Additional Property (except solely for such repairs as may benecessitated due to an act or omission of Tenant, its invitees, patrons,employees, agents, contractors or representatives, which shall be Tenant’s soleresponsibility). In the event Landlord determines to add Landlord’s AdditionalProperty to such exterior portions of the Demised Premises, then in connectiontherewith, Landlord (a) shall exercise reasonable efforts to minimize anyinconvenience to Tenant or interference with Tenant’s use of the DemisedPremises, its business operations therein, its means of ingress thereto andegress therefrom and/or Tenant’s signage, (b) shall carry out any relatedinstallations, repairs, alterations and other work reasonably promptly anddiligently and (c) shall make reasonable efforts to schedule such work in a 3manner, and in such locations, as to create the least practicable interferencewith Tenant and/or Tenant’s use of the Demised Premises, business operations,ingress and egress and/or signage and other installations. Notwithstanding theforegoing, Tenant retains the right to install telecommunication antennas,satellites and other telecommunications and related equipment on the roof and inother parts of the Demised Premises (and to receive all rental and other incomederived therefrom), provided same are installed in compliance with applicablelaw and the requirements of this Lease. 2.2 CONDITION OF THE PREMISES. Tenant expressly understands and agrees andacknowledges that Landlord would not have entered this Lease or acquired theDemised Premises without the express provisions of this Paragraph 2.2. It isunderstood that the Demised Premises and all improvements and fixtures(including, without limitation, the Building) shall be delivered “AS IS” intheir present condition and with all faults, whether latent or patent,foreseeable or unforeseeable. Landlord shall not be liable for any latent orpatent defects in the Demised Premises, except any defects created after thedate hereof due solely to an act of Landlord, Landlord’s employees, agents orcontractors. Tenant acknowledges that neither Landlord nor any of itsrepresentatives, employees, officers, directors, shareholders, trustees,members, partners, counsel or agents has made any representations or warrantiesas to the physical condition, state of repair, tenancy, income, expenses oroperation of the Demised Premises. Tenant acknowledges that it has not relied onany representations, warranties or “broker set-ups” in its decision to lease theDemised Premises in accordance with the terms hereof and also acknowledges thatTenant is intimately familiar with the Demised Premises due to its previousownership and occupancy of same. In particular, except as herein specifically set forth, Landlord isunwilling to make any representations or warranties in respect of (i) thephysical condition of the Demised Premises (including, without limitation, inrespect of the presence, non-presence or condition of hazardous, toxic or otherenvironmentally sensitive materials or substances), (ii) the compliance ornon-compliance of the Demised Premises with applicable laws (including, withoutlimitation, those relating to the protection of the environment or the safety ofemployees or workers), (iii) the revenues, income or expenses of the DemisedPremises, (iv) the adequacy or inadequacy of the utilities, if any, provided tothe Demised Premises, (v) the zoning of the Demised Premises or (vi) any othermatter concerning the Demised Premises. Tenant acknowledges the foregoing andwarrants and represents that it (or its principal officers if Tenant shall be anentity) has had sufficient time and opportunity to inspect the Demised Premisesand other matters deemed important to Tenant, that it (or its principal officersif Tenant shall be an entity) is experienced in owning real property similar tothe Demised Premises, that it is represented by advisors and counsel of itschoosing and that Tenant is intimately familiar with the Demised Premises due toits previous ownership of same. ARTICLE 3 LEASE TERM 3.1 TERM. The terms and provisions of this Lease shall be effective as ofthe Lease Commencement Date. The Lease Term shall commence on the LeaseCommencement Date and shall terminate on the last day of the Lease Term, unlessthis Lease is properly and timely extended as provided below or shall sooner 4terminate as hereinafter provided. For purposes of this Lease, a “Lease Year”shall mean any consecutive twelve (12) month period during the Lease Term;provided, however, that the first Lease Year shall commence on the LeaseCommencement Date and shall end on the last day of the eleventh month thereafterand the second and each succeeding Lease Year shall commence on the first day ofthe next calendar month; and further provided that the last Lease Year of theLease Term shall end on the last day of the Lease Term. 3.2 OPTIONS TO EXTEND LEASE TERM. 3.2.1 Provided that the Tenant shall keep, observe and perform all of theterms, covenants and conditions of this Lease on Tenant’s part to be kept,observed and performed, and provided further, that at the time of the exerciseof any option granted pursuant to this Section 3.2, or the commencement of anyextension term, Tenant shall not be in default of any of the terms, covenantsand conditions of this Lease after any applicable notice and/or cure periods,Tenant may extend the Lease Term for two (2) additional successive ten (10) yearperiods. Tenant may exercise each option to extend the Lease Term only by givingwritten notice to Landlord not less than one hundred eighty (180) days and notmore than two hundred forty (240) days prior to the expiration of the originalLease Term or the applicable option period, as the case may be. 3.2.2 Should Tenant properly and timely exercise any option to extend theLease Term granted hereunder, the Tenant’s use and occupation of the DemisedPremises shall, during each extended Lease Term, be upon the same terms,covenants and conditions contained herein, except that Tenant shall be requiredto pay Minimum Annual Rent in the amounts set forth in Section 3.2.4 below. 3.2.3 In the event that Tenant fails to timely and properly exercise anyoption to extend the Lease Term as described herein, then Tenant shall be deemedto have irrevocably waived and forfeited any and all rights to extend the LeaseTerm, and the provisions of this Section 3.2 shall, at such time, beautomatically deemed null and void, of no further force and effect, and shall bedeemed deleted from this Lease. 3.2.4 If Tenant properly and timely exercises each option to extend theLease Term, then in addition to all other obligations and covenants of Tenantcontained in this Lease, Tenant shall pay Minimum Annual Rent during eachextended term in the following amounts: FIRST OPTION MINIMUM ANNUAL RENT MONTHLY RENT Lease Year 21 $1,822,461.21 $151,871.77 Lease Year 22 $1,868,022.74 $155,668.56 Lease Year 23 $1,914,723.31 $159,560.28 Lease Year 24 $1,962,591.39 $163,549.28 Lease Year 25 $2,011,656.18 $167,638.01 Lease Year 26 $2,061,947.58 $171,828.97 Lease Year 27 $2,113,496.27 $176,124.69 Lease Year 28 $2,166,333.68 $180,527.81 Lease Year 29 $2,220,492.02 $185,041.00 5 Lease Year 30 $2,276,004.32 $189,667.03 SECOND OPTION MINIMUM ANNUAL RENT MONTHLY RENT Lease Year 31 $2,332,904.43 $194,408.70 Lease Year 32 $2,391,227.04 $199,268.92 Lease Year 33 $2,451,007.72 $204,250.64 Lease Year 34 $2,512,282.91 $209,356.91 Lease Year 35 $2,575,089.98 $214,590.83 Lease Year 36 $2,639,467.23 $219,955.60 Lease Year 37 $2,705,453.91 $225,454.49 Lease Year 38 $2,773,090.26 $231,090.85 Lease Year 39 $2,842,417.52 $236,868.13 Lease Year 40 $2,913,477.95 $242,789.83Any and all Additional Rent that becomes due and payable during any extension ofthe Lease Term shall continue to be paid in addition to the Minimum Annual Rentas calculated herein during any extended Lease Term, as well as any other sumsthat become due and payable in accordance with the terms hereof. ARTICLE 4 RENTAL AND OTHER PAYMENTS 4.1 MINIMUM ANNUAL RENT. Tenant agrees to pay the Minimum Annual Rent toLandlord at Landlord’s address set forth herein, or such other place as Landlordmay from time to time designate and at the times and in the manner hereinprovided. Commencing on the Rent Commencement Date, Minimum Annual Rent shall bepayable by Tenant to Landlord in advance in twelve (12) equal monthlyinstallments on the first day of each calendar month, without demand, notice,abatement or offset whatsoever, provided that if rental payment date (includingthe Rent Commencement Date) falls on a day of the month other than the first dayof such month, or if any rental payment is for a period which is shorter thanone month, then the Minimum Annual Rent for such fractional month shall accrueon a daily basis for the period from the date such payment is due to the end ofsuch calendar month (or to the end of the Lease Term, if applicable) at a rateper day which is equal to 1/360 of the Minimum Annual Rent then in effect. Ifthe last Lease Year contains more than twelve (l2) calendar months, then theMinimum Annual Rent for the extra time period shall be prorated based upon theMinimum Annual Rent for the last Lease Year. All other payments required to bemade under the terms of this Lease that require proration on a time basis shallbe prorated on the same basis. Minimum Annual Rent shall be paid in the amountsset forth in Article 1 above for each Lease Year during the initial Lease Termor such amounts as are calculated pursuant to Section 3.2.4 above for any optionterm. 4.2 NET LEASE. The parties acknowledge and agree that this Lease is and isintended to be a triple net, “bondable” lease and the parties hereto intend that 6Landlord shall receive all Minimum Annual Rent and all Additional Rent and allother sums payable hereunder free and clear of any and all liability orresponsibility of Landlord for impositions, taxes, liens, charges or expenses,offsets, or similar deductions of any nature whatsoever. Tenant shall pay allitems of expenses and damage that are attributable to Tenant and/or its useand/or possession of the Demised Premises and which, except for the execution ofthis Lease, would have been chargeable against the Demised Premised and payableby the Landlord. Since this Lease is a triple net “bondable” lease, Tenantagrees to promptly reimburse Landlord for all reasonable out-of-pocketattorneys’, accountants’, and appraisers’ fees and their respectivedisbursements reasonably incurred by Landlord in connection with this Lease,including, without limitation, reviewing, approving and/or consenting to anyloan documents if and to the extent such loan documents are proposed by Tenantand reviewing, approving and consenting to any sublease or other Transferdocuments, excluding, however all attorneys’ fees incurred in the negotiationand preparation of this Lease through the date hereof, but including amendmentshereto or requests for consents hereunder, if any (except to the extent thatsuch amendments or consents are requested by Landlord). Tenant understands andagrees that Landlord is to have no obligation whatsoever under this Lease orotherwise in respect of the repair, operation, maintenance and/or replacement ofthe Demised Premises or for the quality or compliance with applicable law of itsconstruction (or in either case, the lack thereof) with all such obligationsbeing the sole responsibility of the Tenant, at Tenant’s sole cost and expense,except as otherwise provided in this Lease with respect to Landlord’s AdditionalProperty. 4.3 ADDITIONAL RENT. A. Tenant shall pay or cause to be paid to Landlord,commencing on the date hereof and thereafter on the first day of each monthduring the Lease Term (as same may be extended), such amounts as Landlord fromtime to time estimates as reasonably necessary to create and maintain a reservefund to be held by Landlord (or its lenders or ground lessors), withoutinterest, from which to pay all impositions of any kind whatsoever due againstthe Demised Premises one month prior to the date same become due withoutinterest or penalty (including without limitation all real estate taxes,assessments, liens and charges on or against the Demised Premises or any partthereof or relating in any way to the operations at the Demised Premises), allfrontage assessments and charges and all premiums for insurance required to bemaintained by Tenant under this Lease including without limitation the property,liability and life insurance herein referenced (collectively, “Impositions”). Inthe event of any default under the terms of this Lease, any part or all of suchreserve fund may be applied in such fashion as Landlord may determine andLandlord shall be entitled to refuse to disburse such deposits following anysuch default. If one month prior to the due date of any such Impositions theamount then on deposit therefor shall be insufficient for the payment of suchobligation in full, Tenant, within five (5) days after written notice fromLandlord, shall deposit the amount of the deficiency with Landlord. Untilexpended or applied as above provided, any amounts in the reserve fund pursuantto this Section 4.3 (and all amounts held by or for Landlord relating toinsurance or condemnation proceeds) shall constitute additional security for thepayment and satisfaction of all of Tenant’s obligations hereunder. The reservefund (including all amounts held by or for Landlord relating to insurance orcondemnation proceeds) shall not constitute a trust fund and may be commingledwith other monies held by Landlord. No earnings or interest on the reserve fund(or on any amounts held by or for Landlord relating to insurance or condemnationproceeds) shall be payable to Tenant. Provided no default under the terms ofthis Lease then exists, Landlord shall apply the amounts in the reserve fund tothe payment of such Impositions as and when same become due and payable if andto the extent sufficient funds for same are then available. 7 B. Intentionally omitted. C. Any and all sums due under this Lease from Tenant to Landlord (otherthan the Minimum Annual Rent) shall be deemed “Additional Rent” hereunder. Afailure to pay Additional Rent shall have the same effect and shall be treatedidentically to a failure to pay Minimum Annual Rent, as all such sums are herebyconsidered “rent”. D. Except as otherwise specifically noted in A above, Tenant will pay orcause to be paid when due and payable all real estate taxes, sales taxes, renttaxes, assessments (including, but not limited to, all assessments for publicimprovements or benefits and any payable in installments shall nonetheless bepaid at once), liens, water and sewer rates, common area maintenance charges,charges or expenses due under any Restrictions (hereafter defined), vaultcharges and license fees for the use of vaults, chutes and similar areasadjoining the Demised Premises, charges for public or private utilities, licensepermit fees, inspection fees and other governmental levies or payments, of everykind and nature whatsoever, general and special, ordinary and extraordinary,unforeseen as well as foreseen, which at any time may be assessed, levied,confirmed, imposed or which may become a lien upon the Demised Premises or anyportion thereof, or which are payable with respect thereto, or upon the rents,issues, income or profits thereof (excluding Landlord’s income taxes), or on theoccupancy, operation, use, possession or activities thereof, whether any or allof the same be levied directly or indirectly or as excise taxes or as incometaxes (but excluding Landlord’s income taxes), and all taxes, assessments orcharges which may be levied on this Lease, or the interest thereon. Tenant willdeliver to Landlord, upon request, copies of official receipts or othersatisfactory proof evidencing such payments. Tenant may contest the amount ofreal estate taxes payable to the extent that Tenant, in its commerciallyreasonable judgment, shall consider it prudent to do so provided that same doesnot expose Landlord to any criminal or civil liability, penalty or sanction, andfurther provided that under no circumstances shall Tenant have the right towithhold any payments to be made to or on behalf of Landlord hereunder nor shallLandlord have any obligation to withhold the payment of any real estate taxeslevied or assessed. Landlord shall cooperate with Tenant, at Tenant’s sole costand expense, in any such proceedings, and Landlord shall execute allapplications, affidavits and other supporting documentation reasonably requestedby Tenant in connection therewith. ARTICLE 5 SECURITY DEPOSIT Simultaneously with Tenant’s execution of this Lease, Tenant shall depositwith Landlord the sum of $209,947.50 (which sum is equal to two months MinimumAnnual Rent at the current rate plus six months current real estate taxesassessed against the Premises), which shall be held by Landlord as security (the”Security Deposit”) for Tenant’s performance of all of its obligations underthis Lease. From time to time during the Lease Term, promptly upon demand fromLandlord, Tenant shall deposit additional amounts with Landlord such that theSecurity Deposit held by Landlord hereunder shall at all times be equal to thesum of two months then-current Minimum Annual Rent and six months then-currentreal estate taxes assessed against the Premises. If Tenant defaults in respectof any of the terms, provisions and conditions of this Lease beyond applicable 8notice and/or cure periods, including, but not limited to, the payment of anyinstallment of Minimum Annual Rent and/or Additional Rent, Landlord may use,apply or retain the whole or any part of the Security Deposit to the extentrequired for the payment of any such installment and/or any other sum as towhich Tenant is in default or for any reasonable sum which Landlord may expendor may be required to expend by reason of Tenant’s default in respect of any ofthe terms, covenants, and conditions of this Lease, including but not limitedto, any damages or deficiency in the re-letting of the Demised Premises, whethersuch damages or deficiency accrued before or after summary proceedings or otherre-entry by Landlord, whereupon Tenant shall promptly deposit such sums withLandlord sufficient to restore the Security Deposit to the amount requiredhereunder. If Tenant shall fully and faithfully comply with all of the terms,provisions, covenants and conditions of this Lease, then the Security Deposit(less the fee due to Landlord, as set forth below) shall be returned to Tenantwithin thirty (30) days after the expiration of the Lease Term and afterdelivery of possession of the Demised Premises to Landlord as required by thisLease. In the event of a sale of the Demised Premises, Landlord shall have theright to transfer the security to the transferee, and Landlord shall thereuponbe released by Tenant from all liability for the return of such SecurityDeposit, and Tenant agrees to look solely to the new Landlord for the return ofsaid Security Deposit. The provisions hereof shall apply to each and everytransfer or assignment made of the Security Deposit to a newLandlord/transferee. Tenant shall not assign or encumber or attempt to assign orencumber the Security Deposit, and neither Landlord nor its successors orassigns shall be bound by any such assignment, encumbrance, attempted assignmentor attempted encumbrance. ARTICLE 6 USE 6.1 Subject to Tenant’s compliance with Legal Requirements and theRestrictions (both as hereafter defined) and subject to the rights of Tenantpursuant to Section 11.5 below, Tenant shall use the Demised Premises solely asa “first run” movie theatre (including (i) the incidental sale of candy, softdrinks, popcorn, nuts, ice cream and such other concession and refreshment itemsas are customarily sold in “first run” movie theatres, (ii) the incidentalrental or sale of toys, video tapes, recordings, tapes, and posters andnovelties sold in connection with other activities as are usual and customaryfrom time to time for “first run” movie theatres and (iii) the ancillaryinstallation of coin-operated food and beverage vending machines, electronicgame machines and amusement devices for its customers’ enjoyment). Tenant agreesnot to cause or allow a nuisance to others in respect of the operations of theDemised Premises. Tenant agrees not to show pornographic or other motionpictures commonly known and referred to as “XXX” rated films. 6.2 OPERATION OF BUSINESS. Except during periods of renovation oralteration as permitted hereunder and except as Tenant, in its commerciallyreasonable discretion, shall close Tenant’s business when reasonably necessarydue to fire or other casualty or force majeure causes (provided that Tenantshall exercise reasonable efforts to re-open for business as soon as reasonablypracticable thereafter), and subject to compliance with Legal Requirements andthe Restrictions, Tenant shall continuously operate the Demised Premises for atleast such hours of operation as are customary for “first run” movie theatres inthe metropolitan area in which the Demised Premises is located. 9 ARTICLE 7 SERVICES AND UTILITIES 7.1 OBTAINING UTILITIES. Tenant agrees, at its sole cost and expense, toarrange for, and pay for, the hooking up of, and the connection to, allrequisite utilities to the Demised Premises, including meters, and to directlypay for the use of all such utilities. In the event that any utilities arebilled directly to Landlord, whether sub-metered or otherwise, then and in thatevent Tenant shall pay to Landlord immediately upon demand all of such expenses.Tenant acknowledges that Landlord shall have no responsibility or liability toTenant whatsoever for the provision or supply of utilities to the DemisedPremises, or for the cost of any such utilities, all of same being the soleresponsibility of Tenant. 7.2 INTERRUPTION OF SERVICES AND UTILITIES. Landlord shall not be liablefor, and Tenant shall not be entitled to any reduction of the Minimum AnnualRent or of the Additional Rent on account of Tenant’s failure to receive anyutility service on account of accident, breakage, when such failure is caused byacts of God, war, repairs, strikes, lockouts or other labor disturbances ordisputes, unavailability of materials or labor, or by any other causewhatsoever, or by rationing or restrictions on the use of said services andutilities due to energy shortages, war or any other reason, or the making ofrepairs, alterations or improvements to the Demised Premises or Building.Furthermore, Landlord shall not be liable under any circumstances for a loss of,or injury to, property or for injury to, or interference with, Tenant’sbusiness, including, without limitation, loss of profits, however occurring,through or in connection with or incidental to a failure to furnish or receiveany of the foregoing services or utilities, and Tenant shall not be relieved ofits obligation to pay the full Minimum Annual Rent or any Additional Rent byreason thereof. ARTICLE 8 INDEMNITY AND INSURANCE 8.1 INDEMNIFICATION. Landlord shall not be liable for and Tenant herebyrelinquishes any claims against Landlord (and the lessor or lessors under allground or underlying leases and the holder of any mortgage or deed of trustencumbering Landlord’s interest in the Demised Premises and all of theirshareholders, members, partners, officers, directors, trustees, employees,agents or representatives (collectively, “Landlord’s Affiliates”)) for damage toany property, illness or death of any person in, upon, or about the DemisedPremises arising at any time and from any cause whatsoever other than damagesproximately and solely caused by reason of the willful misconduct or grossnegligence of Landlord or its authorized agents, contractors or employees.Tenant shall indemnify, defend, and protect Landlord and Landlord’s Affiliates,and hold Landlord and Landlord’s Affiliates harmless from any and all loss,cost, damage, expense and liability (including without limitation court costsand reasonable attorneys’ fees) (hereinafter collectively referred to as”Claims”) incurred in connection with or arising from any cause in, on or aboutthe Demised Premises (excluding, however, Claims arising proximately and solelyby reason of the willful misconduct or gross negligence of Landlord or itsauthorized agents, contractors or employees), including, without limiting the 10generality of the foregoing: (i) any default by Tenant in the observance orperformance of any of the terms, covenants or conditions of this Lease onTenant’s part to be observed or performed, (ii) the use or occupancy of theDemised Premises by any party, (iii) the condition of the Demised Premises orany occurrence or happening in the Demised Premises from any cause whatsoever or(iv) any acts, omissions or negligence of any party in, on or about the DemisedPremises or the Land, either prior to or during the Lease Term or any ExtendedTerms, including, without limitation, any acts, omissions or negligence in themaking or performance of any alterations. Tenant further agrees to indemnify andsave harmless Landlord and Landlord’s Affiliates, from and against any and allClaims incurred in connection with or arising from any claims by any persons byreason of injury to persons or damage to property occasioned by any use,occupancy, condition, occurrence, happening, act, omission or negligencereferred to in the preceding sentence or otherwise at, on or about the DemisedPremises (provided such Claims do not arise solely as a result of the willfulmisconduct or gross negligence of Landlord or its authorized agents oremployees). The provisions of this Section 8.1 shall survive the expiration orsooner termination of this Lease with respect to any claims or liabilityoccurring prior to such expiration or termination. Landlord shall have the rightto undertake, control and conduct, through counsel of its own choosing and atthe sole cost and expense of Tenant, the conduct and settlement of any Claimgiving rise to indemnification hereunder, and the Tenant shall cooperate withthe Landlord in connection therewith. 8.2 FIRE AND CASUALTY. Tenant shall maintain, at its sole cost and expense,(a) insurance with respect to all of the Demised Premises (including theBuilding, all other improvements now or hereafter located on any portion of theDemised Premises and Tenant’s personal property and equipment) against loss ordamage by perils customarily included under standard “all-risk” policies (at aminimum, such policy shall cover the perils insured under the ISO special causesof loss form CP1030), in amounts sufficient to prevent Tenant or Landlord frombecoming a co-insurer of any partial loss under the applicable policies and withan actual replacement value endorsement. Tenant shall also maintain, at its solecost and expense, separate (or as part of the property insurance referred toabove) (a) explosion insurance in respect of any steam and pressure boilers andsimilar apparatus located in the Demised Premises in such amounts as are usuallycarried by persons operating similar commercial properties in the same generallocality, but in any event in an amount not less than $10,000,000, (b) floodand/or earthquake hazard insurance (if such insurance is typically required tobe carried on similar commercial properties in the New York metropolitan area asdetermined by Landlord in its reasonably discretion), (c) worker’s compensationinsurance to the full extent required by applicable law for all employees ofTenant engaged in any work on or about the Demised Premises and employer’sliability insurance with a limit of not less than $1,000,000 for each occurrenceor any statutory minimum, whichever is higher, (d) business interruptioninsurance in an amount equal to the loss of gross earnings and rental value fora period of at least 24 months due to loss or damage resulting from any of therisks referred to in the clauses (a) through (d), which business interruptioninsurance may be subject to a deductible (or an exclusion) not exceeding thefirst five days following each loss, (e) to the extent not already provided forthe direct benefit of Landlord pursuant to (d) above, rental interruptioninsurance in an amount equal to the Minimum Annual Rent and the Additional Rentfor a period of at least 24 months due to loss or damage resulting from any ofthe risks referred to in the clauses (a) through (d), which rental interruptioninsurance may be subject to a deductible (or an exclusion) not exceeding thefirst five days following each loss and (f) all-risk builders’ risk insurancewith respect to the Demised Premises during any period in which there is any 11construction occurring at the Demised Premises, against loss or damage by fireand such other risks, including vandalism, malicious mischief and sprinklerleakage, as are included in so-called “extended coverage” clauses at the timeavailable with respect to similar commercial property, in an amount not lessthan the value of the alterations and/or additions made to the Demised Premiseswhen the work is not insured under Tenant’s property insurance. 8.3 TENANT INSURANCE. Tenant shall obtain and maintain throughout the LeaseTerm, at its sole cost and expense, a policy or policies of standard fire,extended coverage and special extended coverage insurance (“All Risks”),including a vandalism and malicious mischief endorsement and sprinkler leakagecoverage in an amount equal to the full replacement value new without deductionfor depreciation of all fixtures, furniture and leasehold improvements installedin the Building and all alterations and additions thereto, and replacement costinsurance on all plate or tempered glass in or enclosing the Demised Premises. 8.4 LIABILITY INSURANCE. Tenant shall obtain and maintain throughout theLease Term, an at its sole cost and expense, comprehensive general liabilityinsurance, including public liability and property damage insurance in theamount of no less than Ten Million Dollars ($10,000,000) per occurrence forpersonal injuries or deaths of persons occurring in or about the DemisedPremises including a Broad Form Comprehensive General Liability endorsementcovering the insuring provisions of this Lease and the performance of Tenant ofthe indemnity agreements set forth in Section 8.1 hereof. 8.5 ADDITIONAL INSURANCE. Tenant shall carry and maintain during the LeaseTerm, at its sole cost and expense, such other types of insurance coverage andin such amounts covering the Demised Premises and Tenant’s operations therein,as may be requested by Landlord or Landlord’s lender on the Demised Premises solong as such other insurance is customarily required to be carried on similarcommercial properties in the New York metropolitan area by Institutional Lenders(being defined for this purpose as a bank, thrift, savings and loan, insurancecompany, credit company, credit union, pension fund, real estate investmenttrust, “conduit” or “securitized” lender and any affiliate of any of theforegoing and any other entity that makes or intends on making in excess of six(6) loans in the then-current calendar year). 8.6 FORM OF POLICIES. The minimum limits of policies of insurance requiredof Tenant under this Lease shall in no event limit the liability of Tenant underthis Lease. Such insurance shall: (i) (with respect to the property andliability insurance required to be maintained by Tenant hereunder), nameLandlord and Landlord’s lender(s) and ground lessor(s) as additional namedinsureds as their respective interests may appear, including without limitationone or more loss payee endorsements on the property insurance in favor of theholders of any mortgages or deeds of trust encumbering the interest of Landlordin the Demised Premises or the ground or underlying lessors of the Land, or anyportion thereof (except with respect to Tenant’s business interruption insuranceprovided in Tenant’s property insurance), (ii) specifically cover the liabilityassumed by Tenant under this Lease, including, but not limited to, Tenant’sobligations under Section 8.1 of this Lease, (iii) be issued by an insurancecompany having a rating of not less than A-X in Best’s Insurance Guide or whichis otherwise acceptable to Landlord and licensed to do business in the State inwhich the Demises Premises is located, (iv) be primary insurance as to allclaims thereunder and that any insurance carried by Landlord is excess andnon-contributing with any insurance requirement of Tenant, (v) provide that said 12insurance shall not be cancelled or coverage changed unless thirty (30) days’prior written notice shall have been given to Landlord and any lender or groundlessor of Landlord’s, (vi) contain in the liability insurance policy a crossliability endorsement or severability of interest clause acceptable to Landlordand (vii) shall not have a deductible in excess of $25,000. Tenant shall deliversaid policy or policies or certificates thereof to Landlord on or before theLease Commencement Date and at least thirty (30) days before the expirationdates thereof. Tenant shall, at Tenant’s sole cost and expense, comply with allinsurance company requirements pertaining to the Demised Premises. Tenant, atTenant’s expense, shall comply with all rules, orders, regulations orrequirements of the American Insurance Association (formerly the National Boardof Fire Underwriters) and with any similar body. Landlord shall be entitled toincrease any or all of the minimum insurance coverages provided for in thisLease to such higher amounts as Landlord shall deem, in its good faithdetermination, to be appropriate, provided such higher amounts are typicallyrequired to be carried on similar commercial properties in the New Yorkmetropolitan area. Tenant shall have the right to provide insurance coverage forwhich it is obligated pursuant to Article 8 in a blanket policy, provided suchblanket policy expressly affords coverage in the Demised Premises and toLandlord as required herein and that such coverage shall be property specificand shall not be limited in amount by claims at other properties under suchblanket insurance policy. 8.7 SUBROGATION. Tenant and Landlord each agrees to have its respectiveinsurance company(ies) issuing property damage insurance waive any rights ofsubrogation that such company(ies) may have against Landlord or Tenant, asapplicable. 8.8 DELIVERY OF POLICIES, ETC. Tenant will deliver, or cause to bedelivered, to Landlord, no later than 30 days prior to the expiration of anypolicy, a binder or certificate of the insurer evidencing the replacementthereof and not later than 15 days prior to the expiration of such policy, (a)at the written request of Landlord, the original or true copies of all policiesevidencing all insurance required to be maintained under this Article 8 togetherwith certificates of insurance and a letter from an insurance broker or agentsatisfactory to Landlord to the effect that the insurance policies maintained byTenant comply with the terms of this Lease, and (b) at the written request ofLandlord, evidence as to the payment of all premiums due thereon (with respectto public liability insurance policies, all installments for the current yeardue thereon to such date), provided that Landlord shall not be deemed by reasonof its custody of such policies to have knowledge of the contents thereof.Tenant will also deliver to Landlord, promptly upon written request, acertificate of a principal of Tenant certifying that such policies comply withthe requirements of this Section, that all premiums due thereon have been paidand that the same are in full force and effect. In the event Tenant shall failto effect or maintain any insurance required to be effected or maintainedpursuant to the provisions of this Article 8, Landlord shall have the right, butnot the obligation, to obtain any such insurance and any reasonable amountexpended by Landlord shall be deemed Additional Rent under this Lease and shallimmediately be due and payable by Tenant within five (5) days after delivery toTenant of a bill therefor, and same shall be without prejudice to Landlord’srights and remedies in respect of such default. 8.9 SEPARATE INSURANCE. Tenant will not take out separate insuranceconcurrent in form or contributing in the event of loss with that required to be 13maintained pursuant to this Article 8. 8.10 LIFE INSURANCE POLICY. In addition to all other insurance requirementsset forth in this Lease, Tenant, at Tenant’s sole cost and expense, shall alsobe required to maintain in full force and effect a twenty (20) year term lifeinsurance policy covering Norman Adie, which shall name the Landlord as the solebeneficiary and be owned by Landlord and provide that all proceeds payablethereunder shall be payable directly to Landlord (the “Life Insurance Policy”).Such Life Insurance Policy shall be satisfactory in all respects to Landlord inLandlord’s sole but reasonable discretion, including, without limitation, thepolicy limits, and must be issued by an insurance company reasonably acceptableto Landlord. Tenant shall deliver the Life Insurance Policy to Landlord on orprior to the Lease Commencement Date with all premiums paid one year in advance,and shall also deliver to Landlord satisfactory evidence of the renewal of samefrom time to time as necessary to demonstrate Tenant’s compliance with thisSection 8.10. To ensure Tenant’s compliance with this Section 8.10, Tenant shallpay to Landlord, on the first day of each month during the Lease Term, an amountdetermined by Landlord as necessary to create and maintain an escrow fund to beheld by Landlord (or its lender), without interest, from which to pay the nextannual premium coming due on the Life Insurance Policy (such that one monthprior to the due date of such annual premium, Landlord shall then be holding anamount sufficient to pay same). In the event of any default under the terms ofthis Lease, any part or all of such escrow fund may be applied in such fashionas Landlord may determine. If one month prior to the due date of such annualpremium the amount then on deposit therefor shall be insufficient for thepayment of same in full, Tenant, within five (5) days after written notice fromLandlord, shall deposit the amount of the deficiency with Landlord. All amountsheld pursuant to this Section 8.10 shall constitute additional security for thepayment and satisfaction of all of Tenant’s obligations hereunder. Theaforementioned escrow fund shall not constitute a trust fund and may becommingled with other monies held by Landlord. In the event of the death ofNorman Adie and the receipt by Landlord of the proceeds of the Life InsurancePolicy, Tenant shall receive a credit against the installments of Minimum AnnualRent thereafter coming due under this Lease in an amount per annum equal to tenpercent (10%) of the amount of such proceeds actually received by Landlord,until such time as the entire amount of such proceeds received by Landlord shallhave been credited against such installments of Minimum Annual Rent. Such annualcredit, if applicable, shall be applied in equal monthly installments equal to1/12th of the annual amount being credited. ARTICLE 9 TENANT IMPROVEMENTS/ALTERATIONS; ADDITIONAL THEATER 9.1 IMPROVEMENTS. A. Landlord agrees that Tenant may (at Tenant’s own costand expense and after giving Landlord at least twenty (20) days’ prior notice inwriting of its intention to do so, including with such notice a copy of any andall plans, specifications and working drawings therefore (except that no plans,specifications and working drawings shall be required for any purely decorativeor non-structural alteration costing less than $100,000)) make suchimprovements, alterations, additions, and changes in and to the interior of theDemised Premises (except those of a structural nature) as it may find necessaryor convenient for its purposes, provided that the value of the Premises is notthereby diminished, and provided further that Tenant may not make anyimprovements, alterations, additions or changes to the Demised Premises withoutfirst procuring the prior written consent of Landlord to such improvements,alterations, additions or changes (except that no such consent shall be required 14for any purely decorative or non-structural alteration costing less than$100,000, and no consent shall be required for replacements and upgrades ofTenant’s personal property and trade fixtures made in the ordinary course ofTenant’s business operations). All structural and/or exterior alterations to theDemised Premises or any portion thereof require Landlord’s prior writtenconsent, which shall not be unreasonably withheld, conditioned or delayedprovided that plans, specifications and working drawings for such structuraland/or exterior alterations shall have been delivered to Landlord, together withsuch other information reasonably requested by Landlord, in order to enableLandlord to evaluate Tenant’s request for consent. If Tenant’s actions areotherwise in compliance with this Article 9, all improvements, fixtures and/orequipment which Tenant may install or place in or about the Demised Premises,and all improvements, alterations, repairs or changes to the Demised Premises,and all signs installed in, on or about the Demised Premises, from time to time,shall be at the sole cost of Tenant and shall be and become the property ofLandlord (without lien or lease thereon). Landlord shall be without anyobligation in connection therewith. Tenant hereby indemnifies and holds Landlordand Landlord’s Affiliates harmless from any liability, cost, obligation, expenseor claim of lien in any manner relating to the installation, placement, removalor financing of any such improvements, alterations, repairs, changes,improvements, fixtures and/or equipment in, on or about the Demised Premises. B. Tenant has no authority or power to cause or permit any lien orencumbrance of any kind whatsoever (including a lease or license), whethercreated by act of Tenant, operation of law or otherwise, to attach to or beplaced upon the Land, the Building or the Demised Premises, and any and allliens and encumbrances created by Tenant shall attach to Tenant’s interest only.Landlord shall have the right at all times to post and keep posted on theDemised Premises any notice which it deems necessary for protection from suchliens. Tenant covenants and agrees not to suffer or permit any lien ofcreditors, mechanics or materialmen or others to be placed against the Land, theBuilding or the Demised Premises with respect to work, product or servicesclaimed to have been performed for or materials claimed to have been furnishedto Tenant or the Demised Premises, and, in case of any such lien attaching ornotice of any lien, Tenant covenants and agrees to cause it to be immediatelyreleased and removed of record. Notwithstanding anything to the contrary setforth in this Lease, in the event that such lien is not released and removed onor before the date occurring twenty (20) days after notice of such lien isdelivered by Landlord to Tenant, Landlord, at its sole option, may immediatelytake all action necessary to release and remove such lien, without any duty toinvestigate the validity thereof, and all sums, costs and expenses, includingreasonable attorneys’ fees and costs, incurred by Landlord in connection withsuch lien shall be deemed Additional Rent under this Lease and shall immediatelybe due and payable by Tenant and same shall be without prejudice to Landlord’srights and remedies in respect of such default. 9.2 Tenant shall construct any such improvements, alterations or repairs ina first class and in a good and workmanlike manner using proper materials andworkmanship as may then be customary for facilities similar to the DemisedPremises in the New York metropolitan area, and in conformance with any and allapplicable laws, rules and regulations of any federal, state, county ormunicipal code or ordinance and pursuant to a valid building permit, issued bythe applicable governmental jurisdiction. In the event Tenant orders anyconstruction, alteration, decorating or repair work directly from Landlord, orfrom the contractor selected by Landlord, the charges for such work shall bedeemed Additional Rent under this Lease, payable promptly upon billing therefor,either periodically during construction or upon the substantial completion ofsuch work, at Landlord’s option. All work with respect to any alterations,additions or changes must be done in a good and workmanlike manner anddiligently prosecuted to completion to the end that the Demised Premises shallat all times be a complete unit except during the period of work. Upon 15completion of any improvements, alterations, additions or changes (other thannon-structural improvements, alterations, additions or changes costing less than$100,000), Tenant agrees to cause a notice of completion or its equivalent to beproperly recorded and Tenant shall deliver to Landlord a copy of the “as built”drawings of the improvements. Any such alterations, additions or changes shallbe performed and done strictly in accordance with the laws and ordinancesrelating thereto. In performing the work of any such improvements, alterations,additions or changes, Tenant shall have the work performed in such manner as notto obstruct the access to or use of the Building or common areas, if any. 9.3 CONSTRUCTION INSURANCE. In the event that Tenant shall make anyimprovements, alterations, additions or changes to the Demised Premises, incompliance with the terms and provisions of this Article 9, Tenant agrees tocarry “Builder’s All Risk” insurance in an appropriate amount covering theconstruction of such improvements, alterations, additions or changes, and suchother insurance as Landlord may require provided such other insurance istypically required to be carried for similar commercial properties in the NewYork metropolitan area, it being understood and agreed that all of suchimprovements, alterations, additions or changes shall be insured by Tenantpursuant to Article 8 of this Lease. In addition, with respect to improvements,alterations, additions and/or changes to the Demised Premises the cost of whichexceeds $50,000, Landlord may, in its discretion, require Tenant to obtain alien and completion bond or some alternate form of security satisfactory toLandlord in an amount to ensure the lien-free completion of such improvements,alterations, additions or changes. 9.4 ADDITIONAL THEATER. A. At any time during the Term of the Lease (butsubject to the outside date contained in the last sentence of this Section 9.4),Tenant shall be permitted to construct, at Tenant’s sole cost and expense andsubject to the terms and provisions of Article 9 and this Section 9.4, a groundfloor addition to the existing Building located on the Demised Premises, whichaddition shall accommodate no less than one hundred thirty (130) seats (the”Additional Theater”). Landlord shall reasonably cooperate with Tenant, to theextent required and at no cost to Landlord, in connection with any varianceapplications, building permit applications and other governmental andquasi-governmental applications and approvals necessary to construct theAdditional Theater. All provisions of this Article 9 shall be applicable toTenant’s construction of the Additional Theater, and in the event that Tenantshall have given Landlord written notice of its intention to construct theAdditional Theater as aforesaid, then the Additional Theater shall beconstructed by Tenant expeditiously (but in no event later than May 31, 2007)and in all other respects in compliance with this Article 9. B. Tenant shall give Landlord no less than thirty (30) days written noticeof its intention to commence construction on the Additional Theater, includingwith such written notice a copy of any and all plans, specifications and workingdrawings therefor (which plans, specifications and working drawings must besatisfactory to Landlord in all respects and must be approved by Landlord inwriting in advance, which approval shall not be unreasonably withheld, delayedor conditioned). 16 C. Provided that Tenant shall have constructed the Additional Theater incompliance with this Article 9 and in compliance with the approved plans,specifications and working drawings, and provided further that the FundingConditions (hereafter defined) shall have been fully satisfied, Landlord shallpay to Tenant the sum of Five Hundred Thousand Dollars ($500,000) as a “LandlordConstruction Allowance”. For purposes of this Section 9.4, “Funding Conditions”shall mean: (i) the Additional Theater shall have been completed in compliancewith the approved plans, specifications and working drawings (as same may havebeen amended from time to time with the prior written consent of Landlord inaccordance with the terms of this Section 9.4), and all applicable governmentalapprovals such as, but not limited to, a final, permanent and unconditionalcertificate of occupancy for the Additional Theater, shall have been received,(ii) Landlord shall have received an architect’s certification on AIA form thatthe Additional Theater has been completed in accordance with the approved plans,specifications and working drawings (as same may have been amended from time totime with the prior written consent of Landlord in accordance with the terms ofthis Section 9.4), (iii) Landlord shall have received, at Tenant’s sole cost andexpense, such lien waivers and title endorsements as Landlord shall reasonablyrequire, (iv) Tenant shall be operating in the Additional Theater and same shallbe open for business and (v) no default shall then exist under the Lease beyondapplicable notice and/or cure periods. Tenant shall be responsible for anyexcess costs relating in any way to the construction of the Additional Theaterover the Landlord Construction Allowance, and Tenant shall indemnify and holdLandlord harmless from and against all such excess costs. If payable pursuant tothe terms hereof, the Landlord Construction Allowance shall be disbursed nolater than ten (10) days after the satisfaction of all of the FundingConditions, failing which the unpaid portion of Landlord’s ConstructionAllowance shall thereafter bear interest until paid at a rate per annum equal tothe lesser of the Prime Rate plus two percent (2%) per annum or the highest ratepermitted by applicable law. In the event that Tenant shall have constructed theAdditional Theater in compliance with this Article 9 and in compliance with theapproved plans, specifications and working drawings, and all of the FundingConditions shall have been fully satisfied, but Landlord has not paid theLandlord Construction Allowance to Tenant as herein required, then, providedTenant shall first have given Landlord no less than ten (10) business daysnotice of such failure to pay the Landlord Construction Allowance and furtherprovided that Landlord shall not have paid same to Tenant within such ten (10)business day period, Tenant may offset the Landlord Construction Allowance (withinterest as aforesaid) against the Minimum Annual Rent and Additional Rent nextcoming due under this Lease until same is fully paid. Notwithstanding theforegoing, in the event that Landlord shall have notified Tenant that Landlorddisputes that the Landlord Construction Allowance is due and payable pursuant tothe terms of this Article 9 (whether as a result of the Additional Theater nothaving been completed in compliance with the approved plans, specifications andworking drawings or as a result of any of the Funding Conditions not having beensatisfied as herein required or otherwise), then Tenant shall not be entitled toexercise the foregoing offset right and Tenant shall continue to pay the fullMinimum Annual Rent and Additional Rent as required by this Lease. In the eventthat Landlord shall dispute that the Landlord Construction Allowance is due andpayable as aforesaid, then Landlord shall be required to post the LandlordConstruction Allowance in an escrow account with a title company reasonablyacceptable to Landlord and Tenant, and the dispute shall be settled byarbitration in accordance with the Arbitration Procedure of The Real EstateBoard of New York, Inc. (with the fees and expenses of arbitration borne equallyby the parties). 17 D. In the event that Tenant shall have elected to construct the AdditionalTheater, same shall automatically become and be deemed for all purposes underthis Lease to be a part of the Demised Premises, and upon the expiration orsooner termination of the term of this Lease, the Additional Theater shall besurrendered to and become the property of Landlord. 9.5 TENTH THEATER. A. At any time after or simultaneously with Tenant’sconstruction of the Additional Theater in compliance with Section 9.4 (butsubject to the outside date contained in the last sentence of this Section 9.5),Tenant shall be permitted to construct, at Tenant’s sole cost and expense andsubject to the terms and provisions of Article 9 and this Section 9.5, andwithout payment, allowance or contribution of any kind from Landlord, a tenththeater above the Additional Theater (hereinafter referred to as the “TenthTheater”), which Tenth Theater shall accommodate no less than one hundred thirty(130) seats. Landlord shall reasonably cooperate with Tenant, to the extentrequired and at no cost to Landlord, in connection with any varianceapplications, building permit applications and other governmental andquasi-governmental applications and approvals necessary to construct the TenthTheater. All provisions of this Article 9 shall be applicable to Tenant’sconstruction of the Tenth Theater, and in the event that Tenant shall have givenLandlord written notice of its intention to construct the Tenth Theater asaforesaid, then the Tenth Theater shall be constructed by Tenant expeditiously(but in no event later than May 31, 2009) and in all other respects incompliance with this Article 9. B. Tenant shall give Landlord no less than thirty (30) days written noticeof its intention to commence construction on the Tenth Theater, including withsuch written notice a copy of any and all plans, specifications and workingdrawings therefor (which plans, specifications and working drawings must besatisfactory to Landlord in all respects and must be approved by Landlord inwriting in advance, which approval shall not be unreasonably withheld, delayedor conditioned). C. In the event that Tenant shall have elected to construct the TenthTheater, same shall automatically become and be deemed for all purposes underthis Lease to be a part of the Demised Premises, and upon the expiration orsooner termination of the term of this Lease, the Tenth Theater shall besurrendered to and become the property of Landlord. 9.6 LANDLORD’S APPROVAL. Landlord agrees to approve or reject Tenant’splans, specifications and/or construction drawings for the Additional Theaterand/or the Tenth Theater, as applicable, within ten (10) business days afterLandlord’s receipt of such plans, specifications and/or construction drawings.If Landlord has not approved or rejected such plans and specifications withinsaid ten (10) business day period, Landlord shall have an additional three (3)business days after receipt of written notice from Tenant to approve or rejectsuch plans and specifications. If Landlord has not approved or rejected suchplans and specifications after such subsequent three (3) business day period,such plans and specifications shall be deemed approved. ARTICLE 10 SIGNS 18 10.1 A. Subject to (i) Tenant’s receipt of the approval of all governmentalauthorities having jurisdiction over the Demised Premises, (ii) the termscovenants and conditions of any covenants, conditions and restrictions and/orreciprocal easement agreements which encumber the Demised Premises and (iii)Landlord’s rights pursuant to subsection 10.1 B below, Tenant may installsignage on the interior and/or exterior portions of the Demised Premises forTenant’s operations, which shall include such signage and advertising as Tenantchooses to exhibit for the purposes of advertising movies being shown, or to beshown, at the Demised Premises; PROVIDED, HOWEVER, that if Landlord shallalready have installed or notified Tenant of its intention to install Landlord’sAdditional Property, then any exterior signage of Tenant to be added followingsuch installation or notification shall not unreasonably interfere withLandlord’s Additional Property. Any signs, notices, logos, pictures, names oradvertisements which are installed by Tenant must be designed, installed andutilized in keeping with Tenant’s corporate identity and/or consistent with theoperation of a “first run” movie theater, and shall be similar in size, nature,and materials used in Tenant’s other business locations. Except as otherwiseprovided in subsection 10.1 B below, Landlord and Tenant shall share equally inall rental and/or other income of any kind in any way derived from anyadvertisements and/or signage of any kind installed after the date of this Leaseon the exterior portions of the Demised Premises. B. (1) As of the date of this Lease, there exist two (2) billboard signs onthe exterior of the Demised Premises (the “Existing Billboard Signs”). Landlordshall be entitled to all signage and other rights with respect to one of suchExisting Billboard Signs (such sign to be chosen by Landlord, and such sign aschosen by Landlord being referred to herein as “Landlord’s Billboard Sign”),including, without limitation, all rights to any and all rental and/or otherincome in any way derived from Landlord’s Billboard Sign. Tenant shall affordLandlord, any tenant/licensee of Landlord’s Billboard Sign and any contractor,agent, employee or representative of either reasonable access to the DemisedPremises at reasonable times and upon reasonable notice to Tenant (in eithercase except in the event of emergency) to maintain, alter and/or replace same,and Landlord’s Billboard Sign shall be maintained at Landlord’s or suchtenant/licensee’s cost and expense. (2) Simultaneously with the full execution of this Lease, Landlord shallenter into an eight (8) year license agreement (on Landlord’s form for same)with Town Sports International, Inc. (“TSI”) for the use of the remainingExisting Billboard Sign, such license agreement to provide for annual licensepayments equal to One ($1.00) Dollar and such other terms and provisions asreasonably acceptable to Landlord and TSI; PROVIDED and on the condition thatsuch license agreement with TSI be expressly subject and subordinate in allrespects to this Lease (such that said license agreement shall automaticallyterminate and be of no further force or effect upon the termination of thisLease including termination following a default hereunder by Tenant beyondapplicable notice and/or cure periods). Upon the expiration or earliertermination of such license agreement with TSI, Landlord shall thereafterautomatically be entitled to all rights with respect to such remaining ExistingBillboard Sign, including, without limitation, all rights to any and all rentaland/or other income in any way derived from same, and same shall thereafter bedeemed to be part of Landlord’s Billboard Sign for all purposes under thisLease. 19 (3) Tenant may install such signage and advertising on the marquis (if any)located at the Demised Premises as Tenant, in Tenant’s sole discretion, maydetermine, subject to and in compliance with the terms, provisions andconditions of this Article 10. 10.2 Tenant shall be solely responsible for maintaining and/or replacingany and all interior signage on the Demised Premises, at Tenant’s sole cost andexpense. Landlord covenants and agrees that Landlord shall not unreasonablywithhold, delay or condition its consent to any additional or replacementsignage proposed to be installed by Tenant from time to time in or upon theDemised Premises, provided that Tenant shall comply with all legal requirementswith respect thereto. Landlord agrees to approve or reject Tenant’s plans andspecifications for any additional or replacement signage within ten (10)business days after Landlord’s receipt of such plans and specifications. IfLandlord has not approved or rejected such plans and specifications within saidten (10) business day period, Landlord shall have an additional three (3)business days after receipt of written notice from Tenant to approve or rejectsuch plans and specifications. If Landlord has not approved or rejected suchplans and specifications after such subsequent three (3) business day period,such plans and specifications shall be deemed approved. Landlord shall cooperatewith Tenant, at Tenant’s expense, in connection with applications made by Tenantfor approval of Tenant’s signage, including variance applications, to the extentsuch cooperation shall reasonably be necessary. ARTICLE 11 ASSIGNMENT AND SUBLETTING 11.1 RESTRICTIONS. Except as expressly set forth in Section 11.5 below,Tenant shall not transfer, assign, sublet, mortgage, license, grant a concessionor otherwise hypothecate or encumber this Lease, or Tenant’s interest in and tothe Demised Premises (collectively, a “Transfer”), without first obtaining theLandlord’s written consent thereto, which consent may be withheld or granted inLandlord’s sole determination. Any such attempted or purported Transfer withoutLandlord’s prior written consent shall be void and of no force or effect andshall constitute a default under this Lease. For purposes of this Lease,Transfer shall be deemed to include a change in control of Tenant or thetransfer in the aggregate of more than 25% of the equity interests in Tenant(or, in the event that Tenant’s equity interests are publicly traded on anationally recognized securities exchange, then the transfer in the aggregate ofmore than 50%). Notwithstanding the foregoing, (i) changes in ownership of anyequity interests in Tenant by devise or descent and/or (ii) transfers ofownership interests of up to 40% in the aggregate to immediate family membersand/or trusts established for the benefit of such immediate family members(provided that after such transfer(s) Norman Adie at all times thereafterretains full management and control of Tenant and at all times thereafterretains no less than 51% of the equity interests in Tenant) shall be excludedfrom the definition of “Transfer” for purposes of this Section 11.1. 11.2 PROCEDURE FOR TRANSFER. Should Tenant desire to make a Transferhereunder for which Landlord’s prior written consent is required, Tenant shall,in each instance, give written notice of its intention to do so to Landlord atleast thirty (30) days prior to the effective date of any such proposedTransfer, specifying in such notice the details of the proposed Transfertransaction and the proposed date thereof, and specifically identifying the 20proposed transferee. Such notice shall be accompanied, in the case of asubletting, license, assignment or concession agreement, by a copy of theproposed sublease, license, assignment or concession agreement and any otherdocuments or financial information Landlord may reasonably require in order tomake a determination as to the proposed Transfer. Landlord shall, within fifteen(15) days after its receipt of such notice of a proposed Transfer from Tenant,by mailing written notice to Tenant of its intention to do so, pursuant tosection 11.1 of this Lease, either (i) withhold consent to the Transfer or (ii)consent to such Transfer, but if Landlord shall fail to timely send itsdetermination, then Landlord shall be deemed to have rejected the proposedTransfer. 11.3 EFFECT OF A TRANSFER. The transferee shall agree to comply with and bebound by and shall assume all of the terms, covenants, conditions, provisionsand agreements of this Lease to the extent of the space transferred, assigned orsublet; and Tenant shall deliver to Landlord promptly after execution anexecuted copy of each such Transfer document and an agreement of compliance bythe transferee. No Transfer of this Lease or agreement entered into with respectthereto, whether with or without Landlord’s consent, shall relieve Tenant fromits primary liability under this Lease. 11.4 REQUIRED DOCUMENTS. Each Transfer to which Landlord has consentedshall be evidenced by a written instrument in form reasonably satisfactory toLandlord, executed by Tenant and the transferee, under which the Transfereeshall agree in writing for the benefit of Landlord to assume, to perform and toabide by all of the terms, covenants and conditions of this Lease to be done,kept and performed by Tenant, including the payment of all amounts due or tobecome due under this Lease directly to Landlord and the obligation to use thePremises only for the purposes specified in this Lease. Tenant agrees toreimburse Landlord for Landlord’s reasonable out-of-pocket costs (includingreasonable attorneys’ fees) incurred in conjunction with the processing of anddocumentation for each such requested Transfer, whether or not the Transfer isconsummated. 11.5 NO CONSENT OF LANDLORD REQUIRED. A. Provided Tenant is not then in default under this Lease beyond anyapplicable notice and/or cure periods, Tenant may, without obtaining the priorwritten consent of Landlord, assign its right, title and interest in and to thisLease to an entity that (i) has an audited net worth at the time of suchassignment of no less than One Hundred Million Dollars ($100,000,000.00) asdetermined by generally accepted accounting principles (provided, however thatif the proposed assignee does not satisfy such minimum net worth requirement butits parent company does, then this requirement shall be satisfied provided suchparent company executes a full guaranty of this Lease as a condition to suchassignment, pursuant to a guaranty acceptable to Landlord) AND (ii) owns andoperates, either itself or through its subsidiaries, no less than one hundred(100) theaters in the United States PROVIDED that Tenant thereafter continues tobe primarily obligated under this Lease notwithstanding such assignment. Tenantshall in each instance give Landlord written notice of its intention to soassign its interest in this Lease at least thirty (30) days prior to theeffective date of any such assignment, specifying in such written notice thedetails of the proposed assignment and identifying the proposed assignee. Suchassignee shall agree to comply with and be bound by and shall assume all of theterms, covenants, conditions, provisions and agreements of this Lease pursuant 21to an express written agreement between Tenant and such assignee in formsatisfactory to Landlord, and Tenant shall deliver to Landlord promptly afterexecution an executed copy of each such written agreement. B. Provided Tenant is not then in default under this Lease beyond anyapplicable notice and/or cure periods, Tenant may, without obtaining the priorwritten consent of Landlord, grant licenses to third parties for up to anaggregate of twenty-five percent (25%) of the floor space in the DemisedPremises to unaffiliated parties for the operation of the concessions and/orfood service components of Tenant’s movie theater business in the DemisedPremises or for such other operations (including retail operations) notinconsistent with the operation of a “first run” movie theater. Landlord herebyacknowledges its consent to the grade floor restaurant/cafe existing at theDemised Premises as of the date of this Lease. In no event shall any suchpermitted license relieve Tenant of its primary liability under this Lease. 11.6 ASSIGNMENT OF SUBLEASES, ETC. In the event of a sublet, license orgrant of a concession to all or any portion of the Demised Premises (whether ornot Landlord’s consent is required in connection with same), such sublet,license or grant shall be deemed pledged to Landlord and Tenant hereby assignsto Landlord all its right, title and interest as landlord under any suchsublease, license or concession agreement now existing or hereafter enteredinto, and all rents and other sums payable to Tenant under each such agreement,together with the right to collect and receive the same; PROVIDED that, if andso long as no default shall have occurred under this Lease beyond applicablenotice and/or cure periods, then Tenant shall be permitted to exercise itsrights and perform its obligations as landlord under such agreements and tocollect and receive such rents and other sums for its own uses and purposes.Upon the occurrence of a default beyond applicable notice and/or cure periods,such permission shall automatically terminate. Such assignment shall be fullyoperative without any further action on the part of either party hereto, andLandlord shall be entitled, at its option, upon the occurrence of a defaulthereunder beyond applicable notice and/or cure periods, to all rents, income andother benefits from the Demised Premises whether or not Landlord takespossession of the Demised Premises. All actions or collections by Landlordpursuant to this Section 11.6 shall be without prejudice to its other rights andremedies on account of any default of Tenant. ARTICLE 12 REPAIRS AND MAINTENANCE Tenant agrees that Landlord shall have no obligation whatsoever in respectof the repair, operation, maintenance, compliance and/or replacement of theDemised Premises and it is Tenant’s obligation, at Tenant’s sole cost andexpense, to repair, operate, maintain and/or replace all and every part of theDemised Premises. In particular, without implied limitation: 12.1 Tenant shall, at its sole cost and expense, continuously cause therepair, maintenance, operation and/or replacement of the Demised Premises tokeep same in good and first-class order and repair and in such a fashion thatthe value and utility of the Demised Premises will not be diminished, and, atits sole cost and expense, will promptly make or cause to be made all necessaryand appropriate repairs, replacements and renewals thereof, whether interior orexterior, structural or nonstructural, ordinary or extraordinary, foreseen orunforeseen. All repairs, replacements and renewals shall be at least equal in 22quality and class to the original Improvements. Tenant’s obligation to repairshall include the obligation to rebuild in the event of destruction howevercaused. Neither the Minimum Annual Rent nor any Additional Rent shall be reducedand Landlord shall not be liable under any circumstances for a loss of or injuryto property, loss of profits, or for injury to or interference with Tenant’sbusiness arising from or in connection with the condition of the DemisedPremises (including without limitation due to latent defects) or by virtue ofTenant’s failure to make any repairs, maintenance, alterations or improvementsin or to any portion of the Demised Premises or in or to fixtures, appurtenancesand equipment therein. Tenant hereby irrevocably waives and releases its rightto make repairs at Landlord’s expense under any applicable law, statute, orordinance now or hereafter in effect. Tenant agrees, at its sole cost andexpense, to keep the Demised Premises as a state of the art, “first run” movietheatre including, without limitation, to redecorate as appropriate and upgradeor replace sound, seating and viewing equipment as appropriate to maintain theDemised Premises as such state of the art, “first run” movie theatre. 12.2 Tenant shall keep the Demised Premises in good and sanitary conditionand repair at Tenant’s sole cost and expense including, without limitation, snowremoval, painting and repainting, cleaning and rubbish removal. Should any law,standard or regulation now or hereafter be imposed on Landlord or Tenant by astate, federal or local governmental body charged with the establishment,regulation and enforcement of occupational, health or safety standards foremployers, employees, landlords or tenants, then Tenant agrees, at its sole costand expense, to comply promptly with such laws, standards or regulations. 12.3 Tenant acknowledges and agrees that Landlord has never occupied oroperated at the Demised Premises and that Landlord acquired the Demised Premisesdirectly from Tenant (who constructed or had constructed the improvements on theDemised Premises) and Tenant hereby agrees to undertake all of the maintenance,repair, compliance and replacement responsibilities at the Demised Premisesregardless of how or when such responsibilities arise or arose. 12.4 Tenant shall be solely responsible, at is sole cost and expense, tomake the Demised Premises safe and secure for any all persons at the DemisedPremises and Tenant shall obtain and provide all such services, including,without limitation, fire prevention, fire detection, sprinklers, alarm andsecurity including guards (collectively, “Safety Items”) as is necessary orappropriate to make the Demised Premises safe and secure. Without limiting theforegoing, Tenant shall provide at least the amount and quality of Safety Itemsas are provided by other “first run” movie theatres. ARTICLE 13 DAMAGE OR DESTRUCTION 13.1 TENANT TO RECONSTRUCT. Tenant shall promptly notify Landlord if all orany portion of the Demised Premises shall be damaged by casualty resulting fromfire or any other cause. If, at any time during the Lease Term, any portion ofthe Demised Premises is damaged by fire or other cause, Tenant shall, at itssole cost and expense (and regardless or whether or not insured in whole orpart), forthwith repair and/or replace the Demised Premises promptly following 23such damage and in any event shall complete same within one year after the laterto occur of (i) Landlord’s written approval of the plans, specifications andworking drawings therefor and (ii) the receipt of all applicable buildingpermits (and Tenant covenants to use diligence to obtain such building permitsas promptly as reasonably possible). Except as expressly set forth in Section13.3 below, in no event shall this Lease terminate, and this Lease shall remainin full force and effect without any reduction in the Minimum Annual Rent andAdditional Rent. Notwithstanding the foregoing, in the event that fifty (50%)percent or more of the Demised Premises shall have been destroyed by casualty,and such casualty shall occur during the last one (1) year of the Lease Term (assame may have been extended), then provided such casualty is fully covered byinsurance and Tenant shall lave paid to Landlord the amount of the applicabledeductible, Tenant shall have the option, exercisable upon written notice toLandlord received by Landlord no later than thirty (30) days after suchcasualty, to terminate this Lease, in which event this Lease shall terminate andexpire on the date set forth in such notice as if same were the expiration dateoriginally set forth herein, Landlord shall retain all insurance proceeds andTenant shall pay to Landlord all Minimum Annual Rent and all Additional Rentthrough such date of termination. In no event shall Landlord be required torepair any injury or damage to or to make any repairs or replacements of anyalterations or any other improvements installed at the Demised Premises by orfor Tenant, and Tenant shall, at Tenant’s sole cost and expense, repair andrestore all Tenant’s improvements and all other alterations and improvements insubstantially the same condition existing immediately prior to such event. Inconnection with such repairs and replacements Tenant shall submit to Landlord,for Landlord’s review and prior written approval (which shall not beunreasonably withheld, conditioned or delayed), all plans, specifications andworking drawings relating thereto. Tenant shall not be entitled to anycompensation or damages from Landlord for damage to any of Tenant’simprovements, alterations, fixtures, or Tenant’s other property, for loss of useof the Demised Premises or any part thereof, or for any damage to orinterference with Tenant’s business, loss of profits, or for any disturbance toTenant caused by any casualty or the restoration of the Demised Premisesfollowing such casualty or other cause except if and to the extent same iscaused solely as a result of the willful misconduct of Landlord or Landlord’sauthorized agents, contractors or employees. All such restoration shall beperformed by Tenant in accordance with all of the requirements of this Lease. 13.2 WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,including this Article 13, constitute an express agreement between Landlord andTenant with respect to any and all damage to, or destruction of, all or any partof the Demised Premises, and any applicable statute or regulation with respectto any rights or obligations concerning damage or destruction in the absence ofan express agreement between the parties, and any other statute or regulation,now or hereafter in effect, shall have no application to this Lease or anydamage or destruction to all or any part of the Demised Premises. 13.3 INSURANCE PROCEEDS. A. All insurance shall be and are the property ofLandlord and shall be paid to and held and disbursed by Landlord (or itslender(s) or ground lessor(s) if so required) and shall not be paid to Tenant.If Tenant shall come into possession of any insurance proceeds same shall bedeemed to be held in trust for Landlord and shall immediately be transferred toLandlord. It shall be at Landlord’s (and any lender’s and ground lessor’s) solediscretion to make insurance proceeds, if any, and net of any collection oradjustment costs available to Tenant for the restoration. If Landlord (and itslender(s) and ground lessor(s)) shall determine to make the net insurance 24proceeds available to Tenant for restoration, then same shall be disbursed toTenant in reimbursement or direct payment of the costs of such restoration inaccordance with Landlord’s “construction loan” procedures requiring, among otherthings, that disbursements of proceeds are only made upon the satisfaction ofthe following conditions: (i) prior to commencement of restoration, thearchitects, contracts, contractors, plans and specifications for the restorationwork shall have been approved in advance in writing by Landlord (which approvalshall not be unreasonably withheld, conditioned or delayed, (ii) the restorationwork on the Demised Premises for which such disbursement request is made shallhave been completed in accordance with the plans and specifications previouslyapproved by Landlord (and, with respect to the final disbursement request madeupon completion in full of the restoration of the Demised Premises, allapplicable governmental approvals such as, but not limited to, a finalcertificate of occupancy shall have been received), and Landlord shall havereceived an architect’s certification satisfactory to Landlord certifying same,(iii) Landlord shall have received a certificate from Tenant, signed by anofficer of Tenant, describing the completed work for which payment is requested,stating the cost incurred in connection therewith and stating that Tenant hasnot previously received payment for such work and, with respect to the finaldisbursement request made upon completion in full of the restoration of theDemised Premises, further stating that all restoration work has been completedin accordance with this Lease and in compliance with all applicable law, (iv)the receipt by Landlord, at Tenant’s sole cost and expense, of such lien waiversand title “bring down” endorsements as Landlord shall require as well as suchdocumentation (such as receipted invoices and bills) and other evidencereasonably required by Landlord to confirm the amounts requested in thedisbursement request and to verify that the amounts disbursed from time to timeare represented by work that is completed in place and free and clear ofmechanics’ lien claims, (v) with respect to the final disbursement request uponcompletion in full of the restoration of the Demised Premises, Tenant shall haveresumed full operations at the Demised Premises and (vi) no default exists underthe Lease and no mechanics’ or materialmen’s liens shall have been filed andremain undischarged. A ten percent (10%) retainage will be made from eachdisbursement of proceeds, which will be disbursed upon the final completion ofthe restoration of the Demised Premises, a final inspection by Landlord andreceipt of all applicable permits and a permanent certificate of occupancy.Disbursements shall be made only to the extent of the actual and reasonablethird party expenses of Tenant incurred in connection with such restoration asreasonably established to Landlord’s satisfaction; PROVIDED that (x) nodisbursements shall be made in respect of the restoration of Tenant’spersonalty, (y) any excess net insurance proceeds shall be retained by Landlordwithout rent abatement or credit and (z) Tenant shall be responsible for anyexcess cost of restoration over the amount of net insurance proceeds, regardlessof the amount of such excess cost. B. In the event that the destruction or damage is not covered in whole orin part by insurance, Tenant shall nonetheless be responsible, at its sole costand expense, to repair and/or replace the Demised Premises as required by thisArticle 13. Prior to the commencement of the restoration and at any time duringsame, if the estimated cost of restoration as reasonably determined by Landlordor Landlord’s mortgagee exceeds the amount of proceeds available forrestoration, the excess required shall be paid by Tenant to Landlord to be addedto the proceeds prior to any further disbursement. C. In the event that Landlord shall determine not to make the net insuranceproceeds available to Tenant (other than as a result of the failure by Tenant to 25comply with the provisions of Section 13.3A above, THEN IN SUCH EVENT AND INSUCH EVENT ONLY, this Lease shall terminate effective as of the later to occurof the cessation of operations of Tenant at the Demised Premises or the date ofthe applicable casualty. If the Lease shall be so terminated, Landlord shallretain all insurance proceeds and Tenant shall pay to Landlord all MinimumAnnual Rent and all Additional Rent through the date of termination. 13.4 LANDLORD’S FEES. Tenant shall promptly reimburse Landlord (andLandlord shall be entitled to reimburse itself directly out of the net insuranceproceeds) for any costs incurred by Landlord in connection with a casualty orother damage or a restoration necessitated thereby. ARTICLE 14 DEFAULTS; REMEDIES 14.1 EVENTS OF DEFAULT. The occurrence of any of the following shallconstitute an Event of Default and material breach of this Lease by Tenant: 14.1.1 Any failure by Tenant to pay when due any installment of MinimumAnnual Rent, Additional Rent, and/or any other charge required to be paid underthis Lease, or any part thereof, and such default continues for five (5)business days; or 14.1.2 Excluding the provisions of Articles 6, 8, 11, 12, and 13 hereof,any failure by Tenant to observe or perform any other provision, covenant orcondition of this Lease to be observed or performed by Tenant where such failurecontinues for twenty (20) days after written notice thereof from Landlord toTenant; PROVIDED that if the nature of such default is such that the same cannotreasonably be cured within a twenty-day period, Tenant shall not be deemed to bein default if it shall promptly commence such cure within such period andthereafter rectify and cure said default with due diligence within sixty (60)days after such written notice (or such longer period of time as is reasonableunder the circumstances, not to exceed ninety (90) days); or 14.1.3 Any failure by Tenant to timely and properly perform its obligationsunder any of Articles 6, 8, 11, 12, or 13 hereof in accordance with theirrespective terms; or 14.1.4 To the extent permitted by law, a general assignment by Tenant orany guarantor of the Lease for the benefit of creditors, or the filing by oragainst Tenant or any guarantor of any proceeding under an insolvency orbankruptcy law, unless in the case of an involuntary proceeding filed againstTenant or any guarantor the same is dismissed within thirty (30) days, or theappointment of a trustee or receiver to take possession of all or substantiallyall of the assets of Tenant or any guarantor, unless possession is restored toTenant or such guarantor within thirty (30) days, or any execution or otherjudicially authorized seizure of all or substantially all of Tenant’s assetslocated upon the Demised Premises or of Tenant’s interest in this Lease. 14.2 REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of any Event of Default by Tenant, Landlord shall have,in addition to any other remedies available to Landlord at law or in equity, the 26option to pursue any one or more of the following remedies (each and all ofwhich shall be cumulative and nonexclusive, it being agreed that the mention inthis Lease of any specific remedy shall in no way limit Landlord’s right topursue any one or more remedies available at law or in equity) without anynotice or demand whatsoever: 14.2.1 Terminate this Lease, in which event Tenant shall immediatelysurrender the Demised Premises to Landlord, and if Tenant fails to do so,Landlord may, without prejudice to any other remedy which it may have forpossession or arrearages in rent, enter upon and take possession of the DemisedPremises and expel or remove Tenant and any other person who may be occupyingthe Demised Premises or any part thereof, without being liable for prosecutionor any claim or damages therefore, and Landlord may recover from Tenant thefollowing: (i) Landlord shall be entitled to receive from Tenant, and Tenant covenantsand agrees to pay to Landlord, the difference between the total amount ofMinimum Annual Rent that remains to be paid for the balance of the Lease Termthen in effect immediately prior to the termination of this Lease less theactual rent, if any, (net of collection, brokerage, concession and renovationcosts therefore) actually collected by Landlord pursuant to any new lease, ifany, that Landlord may have obtained at the time of the termination of thisLease and for the entire remaining balance of the Lease Term then in effect. Ifthe foregoing calculation results in zero or a negative number no payment shallbe due from Tenant hereunder, and in no event shall Tenant be entitled to anysums from Landlord. Landlord shall be under no obligation or liability toattempt to mitigate its damages and to the extent that Landlord shall attempt torelet all or any portion of the Demised Premises Landlord shall not be liablefor its inability to effect such a reletting or even if a reletting shall occurfor its failure to collect all or any portion of the rents provided for in suchreletting. (ii) All sums due from Tenant to Landlord as calculated herein shall bepaid by the wire transfer of immediately available funds within five (5)business days after the good faith determination by Landlord of the amount duepursuant to (i) above. 14.2.2 If Landlord does not elect to terminate this Lease on account of anydefault by Tenant, Landlord may, from time to time, without terminating thisLease, enforce all of its rights and remedies under this Lease, including, butnot limited to, (i) the right to recover all rent as it becomes due, (ii) theright to re-enter the Demised Premises, and (iii) the right to re-let theDemised Premises or any portion thereof from time to time without terminatingthis Lease. Any such reletting may be an such terms and conditions including,but not limited to, the term thereof and the rent to be paid thereunder, asLandlord may determine in its sole discretion. Any rents received by Landlordduring such reletting shall be applied first, to any and all costs incurred byLandlord in connection with such reletting including, but not limited to,brokerage commissions, construction costs and professional fees, second, to allsums due or which become due from Tenant to Landlord hereunder, and anyremaining sums shall be held by Landlord to be applied in the future against anyrent and all other charges which be come due hereunder. If the rent and othersums received by Landlord as a result of such reletting during any month areless that the amounts Landlord was to receive from Tenant hereunder during thatmonth, Tenant shall immediately pay any such deficiency to Landlord by the wiretransfer of immediately available funds. Such deficiency shall be calculated andpaid on a monthly basis. During any reletting term, Tenant shall be deemed tohave voluntarily surrendered possession of the Premises to Landlord so that 27Landlord will be permitted to give any new tenant from time to time full andunencumbered use, occupancy and possession of the Demised Premises, all withoutany rights of possession or interference from Tenant. 14.2.3 Whether or not Landlord elects to terminate this Lease on account ofany Event of Default by Tenant, Landlord shall have the right to terminate anyand all subleases, licenses, concessions or other consensual arrangements forpossession entered into by Tenant and affecting the Demised Premises or may, inLandlord’s sole discretion, succeed to Tenant’s interest in such subleases,licenses, concessions or arrangements. 14.3 FORM OF PAYMENT AFTER DEFAULT. Following the occurrence of an Event ofDefault by Tenant, Landlord shall have the right to require that any or allsubsequent amounts to be paid by Tenant to Landlord hereunder, whether in thecure of the default in question or otherwise, be paid in the form of cash, moneyorder, cashier’s or certified check drawn on an institution acceptable toLandlord, or by other means approved by Landlord, notwithstanding any priorpractice of accepting payments in any different form. 14.4 WAIVER OF DEFAULT No waiver by Landlord of any violation or breach ofany of the terms, provisions and covenants herein contained shall be deemed orconstrued to constitute a waiver of any other or later violation or breach ofthe same or any other of the terms, provisions, and covenants herein contained.Forbearance by Landlord in enforcement of one or more of the remedies hereinprovided upon an Event of Default shall not be deemed or construed to constitutea waiver of same. The acceptance of any rent hereunder by Landlord following theoccurrence of any default, whether or not known to Landlord, shall not be deemeda waiver of any such default. Landlord shall be free to accept checks from or onbehalf of Tenant without prejudice to Landlord’s rights and remedies and nospecial endorsement or notation on any check shall in any manner be binding onLandlord and Landlord shall be free to accept such checks. 14.5 EFFORTS TO RELET For the purposes of this Article 14, Tenant’s rightto possession shall not be deemed to have been terminated by efforts of Landlordto relet the Demised Premises, by its acts of maintenance or preservation withrespect to the Demised Premises, or by appointment of a receiver to protectLandlord’s interests hereunder. The foregoing enumeration is not exhaustive, butmerely illustrative of acts which may be performed by Landlord withoutterminating Tenant’s right to possession. ARTICLE 15 DEFAULT BY LANDLORD Tenant agrees that Landlord shall not be in default hereunder unlessLandlord fails to perform the obligations, if any, required of Landlord withinthirty (30) days after written notice by Tenant to Landlord and to the holder ofany first mortgage or deed of trust covering the Demised Premises and to anyground lessor, whose name and address shall have theretofore been furnished toTenant, in writing specifying wherein Landlord has failed to perform suchobligation; PROVIDED, HOWEVER, that if the nature of Landlord’s obligation issuch that more than thirty (30) days are required for performance, then Landlordshall not be in default if Landlord commences performance within such 30-dayperiod and thereafter diligently prosecutes the same to completion within one 28hundred twenty (120) days thereafter. In no event shall Tenant have the right toterminate this Lease as a result of Landlord’s default, and Tenant’s sole remedyshall be to effect the cure of such default itself and then bring separateaction for reimbursement of its actual third party costs from Landlord with itbeing expressly understood (i) Tenant shall in no event be entitled to a rentabatement, credit or offset and (ii) Landlord shall in no circumstancewhatsoever be liable to Tenant for consequential damages. Nothing hereincontained shall be interpreted to mean that Tenant is excused from paying rentdue hereunder as a result of any default by Landlord. ARTICLE 16 EMINENT DOMAIN 16.1 PERMANENT TAKING. A. If the entire Demised Premises is taken underpower of eminent domain or sold, transferred or conveyed in lieu thereof, eitherLandlord or Tenant shall have the right to terminate this Lease as of theearliest of the date of vesting of title or the date possession is taken by thecondemning authority; such right shall be exercised by the giving of ten (10)days written notice to the other party on or before said date. In either of suchevents, Landlord shall receive the entire award which may be made in such takingor condemnation, and Tenant hereby assigns to Landlord any and all rights ofTenant now or hereafter arising in or to the same whether or not attributable tothe value of the unexpired portion of this Lease; PROVIDED, HOWEVER, thatnothing contained herein shall be deemed to give Landlord any interest in or torequire Tenant to assign to Landlord any award made to Tenant solely forTenant’s moving expenses, or the taking of the unamortized or the undepreciatedvalue of Tenant’s personal property, or the unamortized value of Tenant’sleasehold estate in the Demised Premises, or that portion of the unamortized orundepreciated portion of Tenant’s improvements, which were not purchased withany funds from a tenant improvement allowance supplied by Landlord. B. In the event of any other taking or a sale, transfer, or conveyance inlieu thereof (each a “Taking”), or if this Lease is not terminated by Landlordor Tenant as provided above, then this Lease shall continue in full force andeffect in respect of the remaining portion of the Demised Premises, then Tenantshall promptly restore the balance of the Demised Premises remaining after suchTaking as set forth in Section 16.2 below, and there shall be no reduction inMinimum Annual Rent, Additional Rent and/or any other charge payable hereunder.If Landlord determines to make the net condemnation proceeds, if any (subject tothe consent of its lender(s) and ground lessor(s)) available to Tenant, thensame shall be disbursed to Tenant pursuant to a standard escrow agreement withLandlord’s mortgagee or, if none, with a title insurance company reasonablyacceptable to Landlord and Tenant providing for such escrow agent to hold anddisburse the condemnation proceeds in accordance with the custom and practicefor same in the county in which the Demised Premises is located, or as otherwisemay be reasonably agreed to by Landlord and Tenant, provided that, at a minimum,disbursements of condemnation proceeds shall be made only on the condition thatno default of Tenant exists under the Lease and only upon (i) the completion ofthe restoration of the Demised Premises and the receipt of all applicablegovernmental approvals including, without limitation, a final certificate ofoccupancy, (ii) the receipt of an architect’s certification satisfactory toLandlord that the restoration has been completed in accordance with the plansand specifications therefor previously approved by Landlord, (iii) theproduction, at Tenant’s sole cost and expense, of such lien waivers and title 29endorsements as Landlord shall require and (iv) Tenant’s resumption of fulloperations at the Demised Premises. Disbursements of condemnation proceeds shallbe made only to the extent of the actual and reasonable third party expenses ofTenant incurred with such restoration as reasonably established to Landlord;PROVIDED that (x) no disbursements shall be made in respect of the restorationof Tenant’s personalty, and (y) Tenant shall be responsible for any excess costof restoration over the amount of net condemnation proceeds, if any, regardlessof the amount of such excess cost. Prior to the commencement of the restorationand at any time during same, if the estimated cost of restoration as reasonabledetermined by Landlord or Landlord’s mortgagee exceeds the amount ofcondemnation proceeds available for restoration, the excess required shall bepaid by Tenant to the aforementioned escrow agent to be added to thecondemnation proceeds prior to any further disbursement. 16.2 TENANT TO RECONSTRUCT. Tenant shall, at its sole cost and expense (andregardless or whether or not covered by condemnation proceeds in whole or part),forthwith repair and/or replace the Demised Premises to as close to its originalcondition as is possible following a Taking and shall complete same within onehundred twenty (120) days of such Taking. In no event shall Landlord be requiredto repair any injury or damage to or to make any repairs or replacements. Inconnection with such repairs and replacements Tenant shall submit to Landlord,for Landlord’s review and prior written approval, all plans, specifications andworking drawings relating thereto. Tenant shall not be entitled to anycompensation or damages from Landlord for damage to any of Tenant’simprovements, alterations, fixtures, or Tenant’s other property, for loss of useof the Demised Premises or any part thereof, or for any damage to orinterference with Tenant’s business, loss of profits, or for any disturbance toTenant caused by any Taking or the restoration of the Demised Premises followingsuch Taking. All such restoration shall be performed by Tenant in accordancewith all of the requirements of this Lease. In the event that the Taking is notcovered in whole or in part by net condemnation proceeds, Tenant shallnonetheless be responsible, at its sole cost and expense, to repair and/orreplace the Demised Premises as required by this Section 16.2. To the fullestextent permitted by applicable law, Tenant hereby waives any and all rights itmight otherwise have pursuant to applicable law which permits a termination ofthis Lease due to any Taking. 16.3 TEMPORARY TAKING. In the event of temporary taking of all or anyportion of the Demised Premises for a period of 360 days or less, then thisLease shall not terminate and the Minimum Annual Rent and the Additional Rentshall not be abated for the period of such taking. Tenant shall be entitled toreceive the entire award made in connection with any such temporary takingprovided and so long as Tenant has timely paid all Minimum Annual Rent andAdditional Rent due under this Lease. 16.4 LANDLORD’S FEES. Tenant shall promptly reimburse Landlord (andLandlord shall be entitled to reimburse itself directly out of the netcondemnation proceeds) for any reasonable out-of-pocket costs incurred byLandlord in connection with a Taking or a restoration necessitated thereby. ARTICLE 17 SUBORDINATION 30 This Lease shall be subject and subordinate at all times to: (i) any andall ground leases or underlying leases now existing or hereafter executedaffecting the Building or all or any portion of the Demised Premises and (ii)the lien of any mortgage or deed of trust now existing or hereafter executed inany amount for which the Demised Premises (or any portion thereof), groundleases, underlying leases, or Landlord’s interest or estate in any of said itemsis specified as security. The foregoing subordination shall be effectiveprovided and on the condition that such ground lessor, underlying lessor,mortgagee, trustee, beneficiary, grantee or lender (hereafter referred to as”mortgagee”) named in such instrument shall provide Tenant with a writtensubordination, non-disturbance and attornment agreement in recordable form, onsuch mortgagee’s standard form for same, which shall provide in substance thatso long as no event of default by Tenant occurs under this Lease beyondapplicable notice and/or cure periods, then (a) Tenant shall not be named orjoined in any action or proceeding to terminate such ground or underlying leaseor to foreclose on such mortgage or deed of trust (as applicable) or anyproceeding to otherwise enforce the rights of such mortgagee, in each caseexcept as required by applicable law and (b) no such termination, foreclosure orother proceeding shall result in the cancellation or termination of this Lease(whether or not Tenant is named in such action). Notwithstanding the foregoing,Landlord shall have the right to subordinate or cause to be subordinated anysuch ground leases or any such liens to underlying leases or to this Lease. Inthe event that any ground Lease or underlying lease terminates for any reason orany mortgage or deed of trust is foreclosed or a conveyance in lieu offoreclosure is made for any reason, Tenant shall, notwithstanding anysubordination and at the option of such successor, attorn to and become Tenantof the successor in interest to Landlord, at the option of such successor ininterest. Tenant covenants and agrees to execute and deliver, within ten (10)days of request by Landlord and in the form requested by Landlord, anyadditional documents evidencing the priority or subordination of this Lease withrespect to any such ground leases or underlying leases or in the lien of anysuch mortgage or deed of trust. If Tenant fails to timely execute suchadditional documents, Tenant hereby appoints Landlord as Tenant’sattorney-in-fact for the sole purpose of executing such additional documents onbehalf of Tenant. If requested by any present or future lender or ground lessor,Tenant agrees to amend this Lease provided such amendment does not materiallyincrease the obligations or materially decrease the rights of Tenant under thisLease. ARTICLE 18 ESTOPPEL CERTIFICATES AND OTHER FINANCIAL INFORMATION 18.1 ESTOPPEL CERTIFICATES At any time during the Lease Term, within ten(10) days following a request in writing by Landlord and Tenant shall executeand deliver to Landlord an estoppel certificate in the form reasonably requiredby Landlord or Landlord’s purchaser, mortgagee, or prospective purchaser orprospective mortgagee, indicating therein any exceptions thereto that may existat that time, which certificate shall also contain any other informationrequested by Landlord or Landlord’s purchaser, mortgagee or prospectivepurchaser or mortgages or any prospective purchaser’s mortgagee. Failure ofTenant to timely execute and deliver such estoppel certificate shall constitutean acceptance of the Demised Premises and an acknowledgment by Tenant thatstatements included in the required form of estoppel are true and correct,without exception. 31 18.2 FINANCIAL STATEMENTS. Within thirty (30) days after the end of eachfiscal quarter, Tenant shall provide to Landlord quarterly income statements ofthe Demised Premises (including a delineation of ticket and concession revenuesand numbers of patrons) and quarterly income statement, balance sheet andstatement of cash flow for Tenant. Within ninety (90) days after the end of eachcalendar year, Tenant shall provide to Lender annual income statements of theDemised Premises (including a delineation of ticket and concession revenues andnumbers of patrons) and annual income statement, balance sheet and statement ofcash flow for Tenant. All financial statements shall be prepared in accordancewith generally accepted accounting principles, consistently applied, withquarterly statements being certified by the chief financial officer of Tenantand annual statements being audited by independent auditors reasonablyacceptable to Landlord. ARTICLE 19 LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT 19.1 LANDLORD’S CURE. All covenants and agreements to be kept or performedunder this Lease shall be performed by Tenant at Tenant’s sole cost and expenseand without any reduction of Minimum Annual Rent or Additional Rent. If Tenantshall default in the performance of its obligations under this Lease and if suchdefault is not cured within the applicable grace period provided in Article 14hereof, Landlord may, but shall not be obligated to, make any such payment orperform any such act on Tenant’s part without waiving its rights or remediesbased upon such or any other default of Tenant and without releasing Tenant fromany obligations hereunder. 19.2 TENANT’S REIMBURSEMENT Tenant shall pay to Landlord, within five (5)days after delivery by Landlord to Tenant of statements therefor: (i) sums equalto expenditures made and obligations incurred by Landlord in connection with theremedying by Landlord of Tenant’s defaults pursuant to the provisions of Section19.1 or elsewhere in this Lease; and (ii) sums equal to all expenditures madeand obligations incurred by Landlord in collecting or attempting to collect theMinimum Annual Rent or Additional Rent or in enforcing or attempting to enforceany rights of Landlord under this Lease or pursuant to law , including, withoutlimitation, all legal fees and other amounts so expended. Tenant’s obligationsunder this Section 19.2 shall survive the expiration or sooner termination ofthe Lease Term. ARTICLE 20 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES; EQUIPMENT FINANCING 20.1 SURRENDER OF PREMISES No act or thing done by Landlord or any agent oremployee of Landlord during the Lease Term shall be deemed to constitute anacceptance by Landlord of a surrender of the Demised Premises unless such intentis specifically acknowledged in a writing signed by Landlord. The delivery ofkeys to the Demised Premises to Landlord or any agent or employee of Landlordshall not constitute a surrender of the Demised Premises or effect a terminationof this Lease, whether or not the keys are thereafter retained by Landlord, andnotwithstanding such delivery Tenant shall be entitled to the return of such 32keys at any reasonable time upon request until this Lease shall have beenproperly terminated. The voluntary or other surrender of this Lease by Tenant,whether accepted by Landlord or not, or a mutual termination hereof, shall notwork a merger, and at the option of Landlord shall operate as an assignment toLandlord of all subleases or subtenancies affecting the Demised Premises. 20.2 REMOVAL OF TENANT PROPERTY BY TENANT. Upon the early termination ofthis Lease due to Tenant’s default hereunder, Tenant shall, subject to theprovisions of this Article 20, quit and surrender possession of the DemisedPremises to Landlord in at least as good order and condition as exists on thedate hereof, reasonable wear and tear excepted. Upon such expiration ortermination, Tenant shall, without expense to Landlord, remove or cause to beremoved from the Demised Premises all debris and rubbish, and such items offurniture, equipment, free-standing cabinet work, trade fixtures, and otherarticles of personal property owned by Tenant or installed or placed by Tenantin the Demised Premises and such similar articles of any other persons claimingunder Tenant as Landlord may, in its sole discretion, require to be removed, andTenant shall repair at its own expense all damage to the Demised Premises andBuilding resulting from such removal. 20.3 REMOVAL OF TENANT’S PROPERTY BY LANDLORD. Whenever Landlord shallre-enter the Demised Premises as provided in this Lease, any personal propertyof Tenant not removed by Tenant upon the expiration of the Lease Term, or withinforty-eight (48) hours after a termination by reason of Tenant’s default asprovided in this Lease, shall be deemed abandoned by Tenant and may be disposedof by Landlord in accordance with applicable law or in accordance with anyjudicial decisions which may supplement or supplant those provisions from timeto time. 20.4 LANDLORD’S PROPERTY. All fixtures, alterations, additions, repairs,improvements and/or appurtenances attached to or built into, on, or about theDemised Premises prior to or during the term hereof (including, withoutlimitation, machinery, drills and other tools, snow removal equipment,landscaping equipment, seats, concession stands, projection equipment, soundequipment, screens and all other equipment), whether by Landlord at its expenseor at the expense of Tenant, or by Tenant at its expense, or by previousoccupants of the Demised Premises, shall be and remain part of the DemisedPremises and shall not be removed by Tenant at the end of the Lease Term, unlessotherwise expressly provided for in this Lease or unless such removal isrequired by Landlord pursuant to the provisions of Section 20.2 or Article 9 ofthis Lease. If Tenant shall fail to complete such removal and repair suchdamage, Landlord may do so and may charge the cost thereof to Tenant. Suchfixtures, alterations, additions, repairs, improvements and/or appurtenancesshall include, without limitation, floor coverings, drapes, paneling, molding,doors, kitchen and dishwashing fixtures and equipment, plumbing systems,electrical systems, lighting systems, silencing equipment, communicationsystems, all fixtures and outlets for the systems mentioned above and for alltelephone, radio, telegraph and television purposes, and any special flooring orceiling installations. 20.5 LANDLORD’S ACTIONS ON DEMISED PREMISES. Tenant hereby waives allclaims against Landlord with respect to Landlord’s removal as herein providedand same shall not constitute forcible entry. 33 20.6 EQUIPMENT FINANCING. Tenant shall be permitted to obtain or placeequipment financing on any of Tenant’s equipment, personalty, trade fixturesand/or any other article(s) of personal property. In connection therewith,Landlord, at no cost to Landlord, shall enter into such “waiver of lien” orother similar, commercially reasonable agreements with respect to such equipmentfinancing. ARTICLE 21 MISCELLANEOUS PROVISIONS 21.1 SEVERABILITY. It is agreed that if any provision of this Lease shallbe determined to be void by a court of competent jurisdiction, then suchdetermination shall not affect any other provision of this Lease or portionthereof and all such other provisions shall remain in full force and effect. 21.2 ENTIRE AGREEMENT It is understood and acknowledged that there are nooral agreements between the parties hereto affecting this Lease and this Leasesupersedes and cancels any and all previous negotiations, arrangementsbrochures, agreements and understandings, if any, between the parties hereto ordisplayed by Landlord to Tenant with respect to the subject matter thereof, andnone thereof shall be used to interpret or construe this Lease. This Leasecontains all of the terms, covenants, conditions, warranties and agreements ofthe parties relating in any manner to the rental, use and occupancy of theDemised Premises, shall be considered to be the only agreement between theparties hereto and their representatives and agents, and none of the terms,covenants, conditions or provisions of this Lease can be modified, deleted oradded to except in writing signed by the parties hereto. All negotiations andoral agreements acceptable to both parties have been merged into and areincluded herein. There are no other representations or warranties between theparties, and all reliance with respect to representations is based totally uponthe representations and agreements contained in this Lease. Notwithstanding theforegoing, nothing contained in this Lease shall be deemed to limit, restrict oreffect the provisions of the contract of sale or other related documents betweenLandlord and Tenant which by their terms were to survive the closing of thepurchase of the Demised Premises by Landlord from Tenant. This Lease has beennegotiated and shall not be construed against the party who caused the firstdraft to be undertaken. This Lease may not be modified or amended nor any of itsterms waived except by a writing executed by Landlord and Tenant and if requiredpursuant to applicable documents, any lender or ground lessor of Landlord. 21.3 COMPLIANCE WITH LAW, INSURANCE REQUIREMENTS, ETC. Tenant, at its sole cost and expense, will comply, or cause compliancewith: (a) all provisions of any insurance policy covering or applicable to theDemised Premises or any part thereof, all requirements of the issuer of any suchpolicy, and all orders, rules, regulations and other requirements of the NewYork Board of Fire Underwriters (or any other body exercising similar functions)applicable to or affecting the Demised Premises or any part thereof or any useor condition of the Demised Premises or any part thereof; 34 (b) all laws, statutes, codes, acts, ordinances, orders, permits,judgments, decrees, injunctions, rules, regulations, permits, licenses,authorizations, directions and requirements (including, without limitation,those relating to the protection of the environment and the Americans withDisabilities Act) of all governments, departments, commissions, boards, courts,authorities, agencies, officials and officers, which now or at any timehereafter may be applicable to the Demised Premises or any part thereof, or anyof the adjoining sidewalks, curbs, vaults and vault space, if any, streets orways, or any use or condition of the Demised Premises or any part thereof(collectively, “Legal Requirements”); (c) all restrictions, easements, reciprocal easement agreements andcovenants now or hereafter of record and affecting all or any portion of theDemised Premises (collectively, “Restrictions”); and (d) the provisions of any underlying or ground lease or mortgage or deed oftrust now or hereafter affecting all or any portion of Landlord’s interest inthe Demised Premises.The Tenant’s obligation, at its sole cost and expense, to comply with theprovisions of (a)-(d) above is absolute whether or not compliance therewithshall require structural changes or replacements in or interference with the useand enjoyment of the Demised Premises or any part thereof and whether or notsuch compliance could be foreseen or is unforeseen, ordinary or extraordinary.Tenant’s obligations shall include any defects or other items that may needcorrection as of the date hereof or which may have resulted from defectiveconstruction or design of the Demised Premises. 21.4 LATE CHARGES Tenant hereby acknowledges that late payment by Tenant toLandlord of Minimum Annual Rent, Additional Rent and/or other sums due hereunderwill cause Landlord to incur costs not contemplated by this Lease, the exactamount of which are extremely difficult to ascertain. Such costs include, butare not limited to, processing and accounting charges, and late charges whichmay be imposed upon Landlord by the terms of any mortgage or deed of trustcovering the Demised Premises. Accordingly, if any installment of Minimum AnnualRent, Additional Rent or any other sum due from Tenant shall not be received byLandlord or Landlord’s designee within five business (5) days of the date due,then (and without prejudice to Landlord’s rights and remedies in respect of suchdefault) Tenant shall pay to Landlord a late charge equal to five percent (5%)of such amount overdue plus any reasonable attorneys’ fees incurred by Landlordby reason of Tenant’s failure to pay rent and/or other charges when duehereunder. The parties hereby agree that such late charge represents a fair andreasonable estimate of the costs that Landlord will incur by reason of the latepayment by Tenant. Acceptance of such late charge by Landlord shall in no eventconstitute a waiver of Tenant’s default with respect to such overdue amount, norprevent Landlord from exercising any of the other rights and remedies grantedhereunder. Tenant hereby agrees that if Tenant is subject to a late charge fortwo (2) months and if Landlord shall permit the cure of such defaults, MinimumAnnual Rent for the remainder of the term shall automatically be adjusted to bepayable quarterly, in advance, commencing upon the first day of the monthfollowing such second late month on a quarterly basis in advance. The latecharge shall be deemed Additional Rent and the right to require it shall be inaddition to all of Landlord’s other rights and remedies hereunder or at law andshall not be construed as liquidated damages or as limiting Landlord’s remediesin any manner. In addition to the five percent (5%) late charge described above, 35any rents or other amounts owing hereunder which are not paid within five (5)days after the date they are due shall thereafter bear interest until paid at arate per annum equal to the lesser of the prime rate as announced from time totime in the WALL STREET JOURNAL (the “Prime Rate”) plus seven percent (7%) perannum or the highest rate permitted by applicable law. If such Prime Rate is nolonger published, Landlord shall have the right to substitute a replacementindex that in Landlord’s good faith determination is reasonably similar to thePrime Rate. 21.5 SALE OF DEMISED PREMISES BY LANDLORD. Each conveyance by Landlord orLandlord’s successor of its interest in the Demised Premises prior to expirationor termination hereof shall be subject to this Lease and shall relieve thegrantor of any further obligations or liability as Landlord, except if suchobligations or liability arose prior to the date of such conveyance. Tenanthereby agrees to attorn to Landlord’s successors in interest, whether suchinterest is acquired by sale, transfer, foreclosure, deed in lieu of foreclosureor otherwise. 21.6 HOLDOVER BY TENANT. If Tenant holds over after the Lease Term, with orwithout the consent of Landlord, the Minimum Annual Rent during the period ofsuch holdover shall be 200% of the Minimum Annual Rent due immediately priorthereto and all Additional Rent shall continue to be due and payable as setforth in this Lease. At Landlord’s option, Landlord may deem such holdover to bea month-to-month tenancy at such increased rental subject to every other term,covenant and agreement contained herein. Nothing contained in this Section 21.6shall be construed as consent by Landlord to any holding over by Tenant, andLandlord expressly reserves the right to require Tenant to surrender possessionof the Demised Premises to Landlord as provided in this Lease upon theexpiration or other termination of this Lease. If Tenant fails to surrender theDemised Premises upon the termination or expiration of this Lease, in additionto any other liabilities to Landlord accruing therefrom, Tenant shall indemnifyand hold Landlord harmless from loss or liability resulting from such failure,including, without limiting the generality of the foregoing, any claims made byany succeeding tenant founded upon such failure to surrender or any lossesoccasioned by the loss of any prospective succeeding tenant. 21.7 QUIET ENJOYMENT. Upon Tenant paying the Minimum Annual Rent, allAdditional Rent and all other charges payable hereunder and performing all ofTenant’s covenants, agreements and obligations under this Lease, Tenant maypeacefully and quietly enjoy the Demised Premises during the Lease Term asagainst all persons or entities lawfully claiming by or through Landlord,subject, however, to the provisions of this Lease and to any present or futuremortgages or ground or underlying leases of all or any portion of the DemisedPremises and to any present or future Restrictions and Legal Requirements. 21.8 ENTRY BY LANDLORD. Landlord reserves the right at all reasonable timesand upon reasonable notice to the Tenant to enter the Demised Premises to: (i)inspect them; (ii) show the Demised Premises to prospective or existingpurchasers, mortgagees or tenants, or to the ground or underlying lessors; (iii)post notices of nonresponsibility; or (iv) alter, improve or repair the DemisedPremises or the Building. Notwithstanding anything to the contrary contained inthis Section 21.8, Landlord may (but shall not be obligated to) enter theDemised Premises at any time to (i) take possession due to any breach of thisLease in the manner provided herein; (ii) perform any covenants of Tenant whichTenant fails to perform and (iii) correct (in whole or part) or otherwise dealwith any emergency situation. Landlord may make any such entries without theabatement of rent and may take such reasonable steps as required to accomplish 36the stated purposes. Tenant hereby waives any claims for damages or for anyinjuries or inconvenience to or interference with Tenant’s business, lostprofits, any loss of occupancy or quiet enjoyment of the Demised Premises, andany other loss occasioned thereby. In an emergency, Landlord shall have theright to use any means that Landlord may deem proper to open the doors and/orgain access in and to the Demises Premises, including, but not limited to,taking such action which might be considered to be an unlawful entry into theBuilding under other circumstances, as well as, the breaking down of doors orother barriers prohibiting or impeding access to the Building. Any entry intothe Demised Premises by Landlord in the manner hereinbefore described shall notbe deemed to be a forcible or unlawful entry into, or a detainer of, the DemisedPremises, or an actual or constructive eviction of Tenant from any portion ofthe Demised Premises. 21.9 CUMULATIVE RIGHTS The various rights, options, elections, powers andremedies of Landlord contained in this Lease shall be construed as cumulativeand no one of them shall be exclusive of any of the others, or of any otherlegal or equitable remedy which Landlord might otherwise have as against Tenantin the event of breach or default in the terms hereof, and the exercise of oneright or remedy by Landlord shall not impair its right to any other right orremedy until all obligations imposed upon Tenant have been fully performed. 21.10 TIME Time is of the essence with respect to the performance of eachof the covenants and agreements contained in this Lease. 21.11 RELATIONSHIP OF PARTIES Nothing contained in this Lease shall bedeemed or construed by the parties hereto or by any third person to create therelationship of principal and agent or of partnership or of joint venture or ofany association between Landlord and Tenant, and neither the method ofcomputation of rent nor any other provision contained in this Lease nor any actsof the parties hereto shall be deemed to create any relationship betweenLandlord and Tenant other than the relationship of landlord and tenant. 21.12 EXCULPATION The obligations of Landlord under this Lease do notconstitute personal obligations of Landlord, and Tenant shall look solely toLandlord’s interest in the Demised Premises and any proceeds derived therefromand to no other assets of Landlord for satisfaction of to this Lease and shallnot seek any liability with respect nor against any of its personal recourseagainst Landlord herein assets for such satisfaction. In no event shall anyofficer, director, shareholder, member, manager, trustee, agent orrepresentative of Landlord or any of its lenders be liable hereunder. Theforegoing shall not be deemed in any way to impose any obligations on Landlord.In particular, and without implied limitation, Landlord shall not be liable forthe failure, seizure or similar circumstance of any financial institution inwhich Landlord shall have deposited sums on account of this Lease or Tenant (forexample, without implied limitation, tax escrow deposits and insurance orcondemnation proceeds) regardless whether or not such financial institutionshall be affiliated with Landlord and whether or not the sums on deposit shallhave exceeded the maximum amount covered by any applicable federal or otherinsurance. 21.13 MEMORANDUM OF LEASE. At the request of either Landlord or Tenant atany time after the date of this Lease, and at the sole cost and expense ofTenant, the parties shall execute, acknowledge and deliver a short form”memorandum of lease” suitable for recording. 37 21.14 NOTICES. All notices, demands, statements or communications(collectively, “Notices”) given or required to be given by either party to theother hereunder shall be in writing, shall be sent by United States certifiedmail, postage prepaid, return receipt requested, or delivered personally or byestablished overnight delivery service, (i) to Tenant at the appropriate addressset forth in Article I of this Lease, or to such other place as Tenant may fromtime to time designate in a Notice to Landlord, with a copy to Tenant’sattorneys, Donovan & Giannuzzi, 405 Park Avenue, Suite 1104, New York, New York10022, Attention: Nicholas T. Donovan, Esq.; or (ii) to Landlord at theappropriate address set forth in Article I of this Lease, or to such other firmor to such other place as Landlord may from time to time designate in a Noticeto Tenant, with a copy to Mark H. Lundy, Vice President, 60 Cutter Mill Road,Suite 303, Great Neck, New York 11021. Any Notice will be deemed given threebusiness (3) days after the date it is mailed as provided in this Section 21.14,upon the date personal delivery is made or upon the next business day followingdeposit with an established overnight delivery service. If Tenant is notified ofthe identity and address of Landlord’s mortgagee or ground or underlying lessor,Tenant shall give to such mortgagee or ground or underlying lessor a copy of anynotice sent to Landlord hereunder alleging a default under the terms of thisLease. 21.15 SUCCESSORS. The Lease and all of the covenants and conditions hereincontained shall be binding upon and shall inure to the benefit of the heirs,executors, administrators, assigns and other successors in interest of each ofthe parties; provided that the foregoing shall not be deemed to permit anyassignment or sublease under this Lease not otherwise expressly permitted by theterms hereof. 21.16 CAPTIONS The titles or captions in this Lease are for referencepurposes only and have no effect upon the construction or interpretation of anypart hereof. The use herein of the singular includes the plural and vice versa,and the use herein of the neuter gender includes the masculine and the feminineand vice versa, whenever and wherever the context so requires. 21.17 JOINT AND SEVERAL If there is more than one Tenant, the obligationsimposed upon Tenant under this lease shall be joint and several. 21.18 AUTHORITY. If Tenant is a corporation, partnership, limited liabilitycompany or other entity, each individual executing this Lease on behalf ofTenant hereby represents and warrants that Tenant is a duly formed and existingentity qualified to do business in its jurisdiction of organization and theState(s) in which the Demised Premises are located and that Tenant has fullright and authority to execute and deliver this Lease and that each personsigning on behalf of Tenant is authorized to do so. 21.19 ATTORNEY’S FEES. If Landlord commences litigation against Tenant forthe specific performance of this Lease, for damages for the breach hereof orotherwise for enforcement of any remedy hereunder or otherwise retains counselin connection with the enforcement or interpretation of this Lease, Tenant shallbe liable for and shall immediately reimburse Landlord for all such costs andattorneys’ fees as may have been incurred. Further, if for any reason Landlordconsults legal counsel or otherwise incurs any costs or expenses as a result ofits rightful attempt to enforce the provisions of this Lease, even though nolitigation is commenced, or if commenced is not pursued to final judgment,Tenant shall be obligated to pay to Landlord, in addition to all other amountsfor which Tenant is obligated hereunder, all of Landlord’s reasonable costs and 38expenses incurred in connection with any such acts, including reasonableattorneys’ fees. 21.20 WAIVER OF JURY TRIAL. To the fullest extent permitted by law, Tenanthereby waives any right to a trial by jury in any litigation where Tenant andLandlord are parties. 21.21 GOVERNING LAW. This Lease shall be construed and enforced inaccordance with the internal laws of the State where the Demised Premises arelocated. 21.22 BROKERS. Landlord and Tenant hereby warrant to each other that theyhave had no dealings with any real estate broker or agent in connection with thenegotiation of this Lease, and that they know of no other real estate broker oragent who would be entitled to a commission in connection with this Lease. Eachparty agrees to indemnify and defend the other party against and hold the otherparty harmless from any and all claims, demands, losses, liabilities, lawsuits,judgments, and costs and expenses (including without limitation reasonableattorneys’ fees) with respect to any leasing commission or equivalentcompensation alleged to be owing an account of the indemnifying party’s dealingswith any real estate broker or agent other than that specified herein. 21.23 MECHANICS’ LIENS. Tenant shall keep the Demised Premises free fromany mechanics’, materialmen’s or other liens arising out of any work performed,materials furnished or obligations incurred by or for Tenant or any person orentity claiming by, through or under Tenant. Landlord shall have the right atall times to post and keep posted on the Demised Premises any notices which itdeems necessary for protection from such liens. If any such liens are filed andare not released of record by payment or posting of a proper bond within ten(10) days after such filing, Landlord may, without waiving its rights andremedies based on such breach by Tenant and without releasing Tenant from anyobligations hereunder, cause such liens to be released by any means it shalldeem proper, including payment of the claim giving rise to such lien in whichevent all amounts paid by Landlord shall immediately be due to Landlord byTenant. 21.24 NO DISCRIMINATION. Tenant covenants by and for itself, its heirs,executors, successors, administrators and assigns, and all persons claimingunder or through Tenant, that this Lease is made and accepted upon and subjectto the following conditions: that there shall be no discrimination against orsegregation of any person or group of persons on account of race, color, creed,sex, sexual orientation, religion, marital status, ancestry, disability ornational origin in the leasing, subleasing, transferring, use or enjoyment ofthe Demised Premises, nor shall Tenant itself, or any person claiming under orthrough Tenant, establish or permit such practice or practices of discriminationor segregation with reference to the selection, location, number, use oroccupancy, of patrons, invitees, tenants, lessees, sublessees, subtenants orvendees in the Demised Premises. 21.25 BANKRUPTCY PROTECTIONS. A. Tenant warrants and represents that it issolvent as of the date hereof and that this Lease and the sale/leaseback ofwhich it is a part shall not render Tenant insolvent. Tenant warrants andrepresents that there is no monetary or other material default existing underany of its corporate level indebtedness or under any of its or its subsidiaries’leases. Tenant warrants and represents that this transaction is a bona fide 39third party transaction and is being made for fair value. Tenant warrants andrepresents that this transaction is a bona fide sale-leaseback transaction anddoes not constitute a joint venture, partnership or mortgage/lendingrelationship. B. As a material inducement for Landlord to enter into this Lease (and thesale/leaseback of which it is a part and without which Landlord would not haveentered into this transaction with Tenant) Tenant hereby (i) to the fullestextent permitted by applicable law, waives any right to reject all or any partof this Lease or Tenant’s obligations hereunder, (ii) to the fullest extentpermitted by applicable law and in the event (i) above is not enforceable,waives any provision or ability to extend the minimum period within which Tenantshall have to assume or reject this Lease, and (iii) agrees that in the event ofan assignment by Tenant out of or pursuant to the bankruptcy or similarproceeding of Tenant, the proposed assignee shall not be deemed creditworthy andLandlord shall be entitled to reject the proposed assignee unless (x) suchproposed assignee has a net worth (certified by independent auditors anddetermined in accordance with Generally Accepted Accounting Principles) equal toor exceeding $1 Billion or (y) such proposed assignee shall post a securitydeposit (or irrevocable letter of credit acceptable to Landlord) with Landlordequal to two year’s worth of Minimum Annual Rent then in effect. 21.26 ENVIRONMENT. (a) Tenant covenants, represents and warrants (i) thatthe Demised Premises does not contain and will not contain (A) asbestos in anyform; (B) urea formaldehyde foam insulation; (C) transformers or other equipmentwhich contain dielectric fluid containing polychlorinated biphenyls (PCB’s); (D)fuel oil, gasoline, other petroleum products or by-products, (E) lead-basedpaint or (F) any flammable explosives, radioactive materials, hazardousmaterials, hazardous wastes, hazardous, controlled or toxic substances, or anypollutant or contaminant, or related materials defined in or controlled pursuantto the Comprehensive Environmental Response, Compensation, and Liability Act of1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous MaterialsTransportation Act, as amended (49 U.S.C. Sections 1801 et seq.), the ResourceConservation and Recovery Act, as amended (42 U.S.C. Sections 9601, et seq.),and in the regulations adopted and publications promulgated pursuant thereto, orany other federal, state or local environmental law, ordinance, rule, orregulation; or which, even if not so regulated, may or could pose a hazard tothe health or safety of the occupants of the Demised Premises or surroundingproperties or the owners of the Demised Premises or surrounding properties (thesubstances described in (A), (B), (C), (D), (E) and (F) above are referred tocollectively herein as “Hazardous Materials”), (ii) that the Demised Premisesand any buildings and other improvements and additions previously, now orhereafter located thereon, are not now being used nor have ever been used andwill never be used for any activities involving, directly or indirectly, theuse, generation, treatment, transportation, storage or disposal of any HazardousMaterials whether by Tenant, any prior owner of the Demised Premises or anytenant or prior tenant of the Demised Premises; (iii) that there has never beenany Hazardous Materials Release (as defined below in this section) on, from oraffecting the Demised Premises; (iv) that none of the Demised Premises, anyprevious owner of the Demised Premises, nor Tenant are subject to any past,existing, pending, or threatened notice, summons, citation, directive,investigation, litigation, proceeding, inquiry, lien, encumbrance orrestriction, settlement, remedial, response, cleanup or closure arrangement orany other remedial obligations by or with any governmental authority(collectively “Regulatory Actions”) under, or are in violation of, anyapplicable laws, rules, regulations or orders pertaining to health, theenvironment or Hazardous Materials; and (v) that none of the Demised Premisesand any buildings and other improvements and additions previously or now locatedthereon have ever been used or will ever be used as an industrial ormanufacturing facility or as a petroleum storage, refining or distribution 40facility or terminal, or a gasoline station, whether by Tenant, any prior owneror any tenant or prior tenant of the Demised Premises. Tenant does not know andhas no reason to know of any violation of the foregoing representations,warranties and covenants. (b) Tenant represents, warrants and covenants that with respect to theDemised Premises and any buildings and other improvements and additions thereon,Tenant (i) shall comply with and ensure compliance by all subtenants, invitees,patrons and other persons with all applicable laws, rules and regulations ororders pertaining to health, the environment or Hazardous Materials, (ii) shallnot store, utilize, generate, treat, transport or dispose (or permit oracquiesce in the storage, utilization, generation, transportation, treatment ordisposal of) any Hazardous Materials on or from the Demised Premises, (iii)shall ensure that all permitted subleases of the Demised Premises containagreements requiring the subtenant’s compliance with the requirements of theforegoing clauses (i) and (ii); and (iv) shall cause any subtenant, licensee,concessionaire or other person or entity using and/or occupying any part of theDemised Premises to comply with the representations, warranties and covenantscontained in this Section. (c) In the event of any storage, presence, utilization, generation,transportation, treatment or disposal of Hazardous Materials on the DemisedPremises or in the event of any Hazardous Materials Release whatsoever orhowsoever occurring (except to the extent that same arises solely as a result ofthe willful misconduct or gross negligence of Landlord or its authorized agents,contractors or employees), Tenant shall as soon as is possible, at the directionof Landlord or any federal, state, or local authority or other governmentalauthority, remove any such Hazardous Materials and rectify any such HazardousMaterials Release, and otherwise comply with the laws, rules, regulations ororders of such authority, all at the sole cost and expense of Tenant, includingwithout limitation, the undertaking and completion of all investigations,studies, sampling and testing and all remedial, removal and other actionsnecessary to clean up and remove all Hazardous Materials, on, from or affectingthe Demised Premises. If Tenant shall fail to proceed with such removal orotherwise comply with such laws, rules, regulations or orders within anyreasonable cure period set by Landlord, or within the cure period permittedunder the applicable regulation or order, whichever period expires first, thesame shall constitute a default hereunder without right of further notice orgrace period, and Landlord shall have the right, at its sole option but with noobligation, to do whatever is necessary to eliminate such Hazardous Materialsfrom the Demised Premises or otherwise comply with the applicable law, rule,regulation or order, acting either in its own name or in the name of Tenantpursuant to this Section, and the cost thereof shall be and become immediatelydue and payable without notice by Tenant to Landlord. In addition to and withoutlimiting Landlord’s rights pursuant to this Lease, Tenant shall give to Landlordand its agents and employees access to the Demised Premises and all buildingsand other improvements and additions thereon for such purposes and herebyspecifically grants to Landlord a license to remove the Hazardous Materials andotherwise comply with applicable laws, rules, regulations or orders, actingeither in its own name or in the name of Tenant pursuant to this Section. (d) Tenant shall defend, indemnify and save Landlord and Landlord’sAffiliates harmless from, against, for and in respect of, any and all damages, 41losses, settlement payments, obligations, liabilities, claims, actions or causesof actions, encumbrances, fines, penalties, and costs and expenses suffered,sustained, incurred or required to be paid by any such indemnified party(including, without limitation, fees and disbursements of attorneys, engineers,laboratories, contractors and consultants) because of, or arising out of orrelating to any “Environmental Liabilities” (as defined below) in connectionwith the Demised Premises or any buildings previously, now or hereafter locatedthereon. For purposes of this indemnification clause, “EnvironmentalLiabilities” shall include all costs and liabilities with respect to the past,present or future presence, removal, utilization, generation, storage,transportation, disposal or treatment of any Hazardous Materials or any release,spill, leak, pumping, pouring, emitting, emptying, discharge, injection,escaping, leaching, dumping or disposing into the environment (air, land orwater) of any Hazardous Materials (each a “Hazardous Materials Release”),including without limitation, (i) cleanups, remedial and response actions,remedial investigations and feasibility studies, permits and licenses requiredby, or undertaken in order to comply with the requirements of, any federal,state or local law, regulation, or agency or court, any damages for injury toperson, property or natural resources, claims of governmental agencies or thirdparties for cleanup costs and costs of removal, discharge, and satisfaction ofall liens, encumbrances and restrictions on the Demised Premises relating to theforegoing and (ii) injury to person or property in any manner related to aHazardous Materials Release on, near or from the Demised Premises or otherwiserelated to environmental matters on or near the Demised Premises. HazardousMaterials Release shall also include by means of any contamination, leaking,corrosion or rupture of or from underground or above ground storage tanks, pipesor pipelines. Landlord shall have the right to undertake, control and conduct,through counsel of its own choosing and at the sole cost and expense of Tenant,the conduct and settlement of any claim giving rise to indemnificationhereunder, and the Tenant shall cooperate with the Landlord in connectiontherewith (e) Tenant shall promptly notify Landlord in writing of the occurrence ofany Hazardous Materials Release or any pending or threatened Regulatory Actions,or any claims made by any governmental authority or third party, relating to anyHazardous Materials or Hazardous Materials Release on or from, the DemisedPremises, or any buildings or other improvements or additions previously, now orhereafter located thereon and shall promptly furnish Landlord with copies of anycorrespondence or legal pleadings or documents in connection therewith. Landlordshall have the right, but shall not be obligated, to notify any governmentalauthority of any state of facts which may come to its attention with respect toany Hazardous Materials or Hazardous Materials Release on or from the DemisedPremises. (f) The liability of Tenant to Landlord pursuant to, by reason of orarising from the representations, warranties, covenants and indemnities providedfor this Section is unlimited and shall survive the expiration of the term ofthis Lease. (g) Tenant covenants, represents and warrants that to the best of itsknowledge and belief, the Demised Premises, and any buildings and otherimprovements and additions previously, now or hereafter located thereon, do notnow and never have, contained any underground or aboveground storage tanks,pipes or pipelines for the storage or transportation of Hazardous Materials,including without limitation, heating oil, fuel oil, gasoline and/or otherpetroleum products, whether such tanks are in operation, not operational,closed, removed or abandoned. Without limiting the generality of the foregoing, 42Tenant is in full compliance with all registration and other requirements of 42USC ss. 6991, “Regulation of Underground Storage Tanks” and all federal, stateand local laws and regulations implementing the provisions of such act. (h) The provisions of this Section 21.27 are in addition to and notintended to limit (i) any representations, warranties, covenants, agreements andindemnities concerning the environment by Tenant in favor of Landlord in thecontract of sale between the parties relating to Landlord’s acquisition of theDemised Premises from Tenant or in any other documents related thereto and (ii)the provisions of applicable law and pursuant to which Landlord and Tenantacknowledge and agree that Tenant shall at all times be deemed to be the”operator” of the Demised Premises and to bear the primary responsibility underapplicable law. Tenant acknowledges and agrees that Landlord has never occupiedor operated at the Demised Premises and that Landlord acquired the DemisedPremises directly from Tenant and therefor it is appropriate for Tenant toundertake all of the environmental responsibilities at the Demised Premisesregardless of how or when such responsibilities arise or arose. IN WITNESS WHEREOF, Landlord and Tenant have duly executed and deliveredthis Lease as of the day and year first above written. LANDLORD: OLP BROOKLYN PAVILION LLC By: OLP-MTC Holdings LLC, Sole Member By: OLP Movies LLC, its Managing Member By: One Liberty Properties, Inc., Sole Member By: /s/ Mark H. Lundy ——————————————- Mark H. Lundy Vice President TENANT: PRITCHARD SQUARE CINEMA LLC By: /s/ Norman Adie ———————————————————— Name: Title: 43 EXHIBIT A Legal Description of the Demised Premises 44