Getty Images Inc. Contracts
Sample Business Contracts
Washington-Seattle-2013 Fourth Avenue Lease - Marshall Building LLC and Photodisc Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is entered into as of November 1, 1997,
between MARSHALL BUILDING, L.L.C., a Washington limited liability company
("Lessor"), and PHOTODISC, INC., a Washington corporation ("Lessee"). Lessor
and Lessee agree as follows:
1. LEASE SUMMARY AND EXHIBITS.
1.1. LEASED PREMISES. The leased premises are a portion of the
building commonly known as the Marshall Building located at 2013 Fourth
Avenue, Seattle, Washington 98121 (the "Building") described on EXHIBIT A
attached hereto and incorporated herein by this reference (the "Premises")
that is situated on real property legally described on the attached EXHIBIT B
(the "Property"). The parties agree that the Premises constitute
approximately 37,389 rentable square feet and that the total rentable square
feet in the Building is 46,957.
1.2. LEASE COMMENCEMENT DATE.
This Lease shall commence as of November 1, 1997 (the "Commencement Date").
1.3. LEASE TERMINATION DATE.
This Lease shall terminate at midnight on February 28, 2003, or such earlier or
later date as provided in Section 3 (the "Termination Date").
1.4. BASE RENT.
The base monthly rent shall be $41,980.00 allocated among the Premises on an
annual per square foot basis as described on EXHIBIT C. Rent shall be payable
at Lessor's address shown in Section 1.7, or such other place designated in
writing by Lessor.
1.5. SECURITY DEPOSIT.
Lessee has deposited with Lessor a security deposit of $10,000, receipt of which
is hereby acknowledged. Lessee shall deposit an additional $31,980.00 with
Lessor concurrently with the execution of this Lease as an additional security
deposit so that the total security deposit will be $41,980.00.
1.6. PERMITTED USE.
The Premises shall be used only for retail and wholesale digital photographic
services, other software development services and business use, and similar
business purposes and
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for no other purpose without the prior written consent of Lessor which
consent shall not be unreasonably withheld.
1.7. NOTICE AND PAYMENT ADDRESSES.
LESSOR: Marshal Building, L.L.C. FAX:
5th Floor
Fourth and Blanchard Building
2101 Fourth Avenue
Seattle, Washington, 98121
Attn: Mark Torrance
LESSEE: PhotoDisc, Inc. FAX: 206-441-7379
2013 Fourth Avenue
Seattle, Washington, 98121
Attn: General Counsel
2. PREMISES. Lessor leases to Lessee, and Lessee leases from Lessor
the Premises upon the terms specified in this Lease.
3. TERM.
3.1. COMMENCEMENT DATE. This Lease shall commence on the
Commencement Date specified in Section 1.2 The first "Lease Year" shall
commence on the Commencement Date and shall end on October 31, 1998. Each
successive Lease Year during the initial term and any extension terms shall
be twelve (12) months, commencing on the first day following the end of the
preceding Lease Year, except that the last Lease Year shall end on the
Termination Date.
3.2. LESSEE OBLIGATIONS. Lessee accepts the Premises in the
condition they existed on the Commencement Date. Except as specified
elsewhere in this Lease, Lessor makes no representations or warranties to
Lessee regarding the Premises, including the structural condition of the
Premises and the condition of all mechanical, electrical, and other systems
on the Premises. Lessee shall be responsible for performing any work
necessary to bring the Premises into a condition satisfactory to Lessee. By
signing this Lease, Lessee acknowledges that it has previously been leasing
the Premises and has had adequate opportunity to investigate the Premises,
acknowledges responsibility for making any corrections, alterations and
repairs to the Premises, agrees that it has determined to its satisfaction
that the Premises can be used for the purposes set forth in Section 1.6 and
that such use and the Premises do not conflict with any zoning or other laws,
and waives any right to terminate this Lease if the Premises cannot be used
for such purposes.
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3.3. OPTION TO EXTEND. Provided that no uncured Event of Default
then exists, Lessor grants Lessee the option to extend the term of this Lease
for a period of 5 years commencing the day following the Termination Date,
which option shall be exercisable by Lessee by giving Lessor written notice
at least 180 days prior to the commencement date of the option term. All
terms and conditions of this Lease shall remain in effect during the option
term except that the Rent shall be 95% of the then fair market rent for the
Premises as determined by mutual agreement of Lessor and Lessee, or, if
Lessor and Lessee are unable to agree within 45 days after receipt by Lessor
of Lessee's notice of exercise of its option to extend, as determined by an
independent real estate professional with experience in commercial rental
rates in the area where the Property is located selected by mutual agreement
of Lessor and Lessee. If Lessor and Lessee are unable to agree upon such
individual within 15 days after the expiration of such 45 day period, then
each party shall select a similarly qualified real estate professional within
15 days after the expiration of such first 15 day period and the two
professionals so selected shall select a third similarly qualified
professional. If either party does not select a professional within such
second 15 day period, then the professional selected by the other party shall
make the determination. The determination of fair market rent shall be made
by the individual or group selected within 30 days after their selection. If
it is made by the group it shall be made by majority vote of the group. The
expenses of such determination shall be shared equally by Lessor and Lessee.
Notwithstanding the foregoing, in no event shall the Rent during the
extension term be less than the Rent during the initial term of this Lease
unless Lessor consents in writing to such reduction.
4. RENT.
4.1. PAYMENT OF RENT. Lessee shall pay Lessor without demand,
deduction or offset, in lawful money of the United States, the monthly rental
stated in Section 1.4 in advance on or before the first day of each month
during the Lease term, and any other additional payments due to Lessor
(collectively the "Rent") when required under this Lease. Payments for any
partial month at the beginning or end of the Lease term shall be prorated.
4.2. LATE PAYMENTS. If any sums payable by Lessee to Lessor under
this Lease are not received within ten (10) days after the date due, Lessee
shall pay Lessor in addition to the amount due, for the cost of collecting
and handling such late payment, an amount equal to the greater of $100 or
five percent (5%) of the delinquent amount. In addition, all delinquent sums
payable by Lessee to Lessor, and not paid by the due date shall, at Lessor's
option, bear interest at the rate of twelve percent (12%) per annum, or the
highest rate of interest allowable by law, whichever is less. Interest on
all delinquent amounts shall be calculated from the original due date to the
date of payment.
4.3. NO ACCORD AND SATISFACTION. Lessor's acceptance of less than
the full amount of any payment due from Lessee shall not be deemed an accord
and
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LEASE TORRANCE PHOTODISC PAGE 3 OF 24
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satisfaction or compromise of such payment unless Lessor specifically
consents in writing to payment of such lesser sum as an accord and
satisfaction or compromise of the amount which Lessor claims.
5. SECURITY DEPOSIT. Lessee shall deliver to Lessor the security
deposit specified in Section 1.5. Lessor may commingle the security deposit
with its other funds and Lessor's obligations with respect to the security
deposit are those of a debtor and not a trustee. If Lessee breaches any
covenant or condition of this Lease, including but not limited to the payment
of Rent, Lessor may apply all or any part of the security deposit to the
payment of any sum in default and any damage suffered by Lessor as a result
of Lessee's breach. In such event, Lessee shall, upon demand, deposit with
Lessor the sum necessary to restore the security deposit to the amount
initially deposited with Lessor. Any payment to Lessor from the security
deposit shall not be construed as a payment of liquidated damages for any
default. If Lessee complies with all of the covenants and conditions of this
Lease throughout the Lease term or cures any default hereunder within the
applicable cure period, the security deposit shall be repaid to Lessee
without interest within thirty (30) days after the vacation of the Premises
by Lessee.
6. USES. The Premises shall be used only for the uses specified in
Section 1.6 (the "Permitted Use"), and for no other business or purpose
without the prior written consent of Lessor which consent shall not be
unreasonably withheld. Lessee shall not do any act on or around the Premises
or Property that is unlawful or that will cause an increase in the existing
rate or cancellation of insurance on the Premises. Lessee shall not commit
or allow to be committed any waste upon the Premises or Property, or any
public or private nuisance nor shall Lessee do anything that may be dangerous
to life or limb or that will cause damage to the Premises or overload any
floor or part thereof, or permit any objectionable noise or odor to escape or
be done on the Premises. No safe or other article of over 5,000 pounds shall
be moved into the Premises without the prior written consent of Lessor, and
Lessor shall have the right to direct where to locate the position of any
article of weight in the Premises if Lessor so desires.
7. COMPLIANCE WITH LAWS. Lessee shall not cause or permit the
Premises to be used in any way which violates any law, ordinance, or
governmental regulation or order or certificate of occupancy issued for the
Premises. Lessee shall be responsible for complying with all laws applicable
to the Premises as a result of Lessee's particular use, such as modifications
required by the Americans With Disabilities Act related to the Premises or
access to the Premises. If the enactment or enforcement of any law,
ordinance, regulation or code during the Lease term requires changes to the
Premises during the Lease term, Lessee shall perform all such changes at its
expense.
8. UTILITIES. Lessor shall not be responsible for providing any
utilities to the Premises, but represents and warrants to Lessee that as of
the Commencement Date electricity, water, sewer, and telephone utilities are
available at or adjacent to the
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LEASE TORRANCE PHOTODISC PAGE 4 OF 24
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Premises. Lessee has determined that the available capacity of such
utilities meets Lessee's needs. Lessee shall install and connect, if
necessary, and directly pay for all water, sewer, gas, janitorial,
electricity, garbage removal, heat, telephone, and other utilities and
services used by Lessee on the Premises during the term of this Lease,
whether or not such services are billed directly to Lessee. Lessee will also
procure, or cause to be procured, without cost to Lessor, all necessary
permits, licenses or other authorizations required for the lawful and proper
installation, maintenance, replacement, and removal on or from the Premises
of wires, pipes, conduits, tubes, and other equipment and appliances for use
in supplying all utilities or services to the Premises. Lessor, upon request
of Lessee, and at the sole expense and liability of Lessee, shall join with
Lessee in any application required for obtaining or continuing such utilities
or services.
9. TAXES.
9.1. PAYMENT OF TAXES. During the lease term, Lessee shall pay
Lessee's prorata share of Taxes (as defined in Section 9.2) based upon the
ratio of the rentable square feet of the Premises to the total rentable
square feet in the Building. Lessee shall pay such amount together with Taxes
collected by Lessee from other tenants in the Building pursuant to its duties
under Section 34 at least twenty (20) days prior to their due date. Lessee
shall promptly furnish Lessor with satisfactory evidence that Taxes have been
paid. If any Taxes paid by Lessee cover any period of time before or after
the expiration of the term of this Lease, Lessee's share of those Taxes paid
will be prorated to cover only the period of time within the tax fiscal year
during which this Lease was in effect, and Lessor shall promptly reimburse
Lessee to the extent required. If Lessee fails to timely pay any Taxes,
Lessor may pay them, and Lessee shall repay such amount to Lessor with
Lessee's next installment of Rent.
9.2. DEFINITION OF TAXES. The term "Taxes" shall mean: (i) any
form of real estate tax or assessment imposed on the Premises by any
authority, including any city, state or federal government, or any
improvement district, as against any legal or equitable interest of Lessor or
Lessee in the Premises or in the real property of which the Premises are a
part or against rent paid for leasing the Premises; and (ii) any form of
personal property tax or assessment imposed on any personal property,
fixtures, furniture, Lessee improvements, equipment, inventory, or other
items, and all replacements, improvements, and additions to them, located on
the Premises, whether owned by Lessor or Lessee. "Taxes" shall not include
any net income tax imposed on Lessor for income that Lessor receives under
this Lease.
9.3. TAX CONTESTS. Lessee may contest the amount or validity, in
whole or in part, of any Taxes at its sole expense, only after paying such
Taxes or posting such security as Lessor may reasonably require in order to
protect the Premises against loss or forfeiture. Upon the termination of any
such proceedings, Lessee shall pay the amount of such Taxes or part of such
Taxes as finally determined, together with any
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LEASE TORRANCE PHOTODISC PAGE 5 OF 24
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costs, fees, interest, penalties, or other related liabilities. Lessor shall
cooperate with Lessee in contesting any Taxes, provided Lessor incurs no
expense or liability in doing so.
10. ALTERATIONS. Lessee shall not make any alterations, additions or
improvements to the Premises ("Alterations") without the prior written
consent of Lessor. The term "Alterations" shall not include the installation
of shelves, movable partitions, Lessee's equipment, wiring and cabling that
do not affect structural components of the Building, and trade fixtures which
may be performed without damaging existing improvements or the structural
integrity of the Premises or Building, and Lessor's consent shall not be
required for Lessee's installation of those items. Lessee shall complete all
Alterations at Lessee's expense in compliance with all applicable laws and in
accordance with plans and specifications approved by Lessor, and using
contractors approved by Lessor. Lessor shall be deemed the owner of all
Alterations, without compensation to Lessee, except for those which Lessor
requires to be removed at the end of the Lease term. Lessee shall remove all
Alterations prior to the end of the Lease term (including, without
limitation, Alterations that were constructed under the Prior Lease as
defined in Section 35.3 that Lessor requests to be removed up to a maximum
cost for such removal of $20,000) unless Lessor conditioned its consent upon
Lessee leaving a specified Alteration at the Premises, in which case Lessee
shall not remove such Alteration. Lessee, at its sole expense, shall
immediately repair any damage to the Premises caused by removal of
Alterations. Lessor hereby approves the Alternations described on EXHIBIT D
attached hereto and incorporated herein by this reference and requires
removal of those designated for removal on such Exhibit.
11. REPAIRS AND MAINTENANCE; COMMON PROJECT COSTS.
11.1. REPAIR AND MAINTENANCE. Lessee shall, at its sole expense,
maintain the interior of the Premises in good condition, subject to
reasonable wear and tear, and promptly make all repairs and replacements,
whether structural or non-structural, necessary to keep the Premises in safe
operating condition, including all utilities and other systems serving the
Premises. Lessee shall not damage any demising wall or disturb the
structural integrity of the Premises and shall promptly repair any damage or
injury done to any such demising walls or structural elements caused by
Lessee or its employees, agents, contractors, subtenants or invitees.
Notwithstanding anything in this Section to the contrary, Lessee shall not be
responsible for any repairs to the Premises made necessary by the negligent
acts of Lessor or its agents, employees, contractors or invitees therein.
Lessor shall in no event be liable to Lessee for any loss or damage caused by
or resulting from any variation, interruption or failure of utility services
due to any cause whatsoever. No temporary interruption or failure of such
services incident to the making of repairs, alterations, or improvements, or
due to accident or strike or conditions or events not under Lessor's control
shall be deemed an eviction of Lessee or relieve Lessee from any of Lessee's
obligations under this Lease.
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LEASE TORRANCE PHOTODISC PAGE 6 OF 24
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11.2. COMMON PROJECT COSTS. Lessee covenants and agrees to pay to
Lessor, as additional monthly Rent, its pro rata share (based upon the ratio
of the rentable square feet of the Premises to the total rentable square feet
in the Building ) of all estimated "Project Operating Costs" for each
calendar year which falls in whole or in part within the term of this Lease,
prorated for any partial calendar year at the beginning or end of the term of
this Lease, such additional rent to be paid at the same time and on the same
terms as base Rent. For purposes of this Lease, "Project Operating Costs"
which are recoverable by Lessor from Lessee as additional Rent shall include,
without limitation, all reasonable expenses of Lessor for maintaining,
operating, and repairing the Building and the Property, and the personal
property used in connection therewith, including utilities, customary
management fees and other expenses (except any operating costs which are
billed directly to Lessee by the service provider) which in accordance with
generally accepted accounting and management practices would be considered an
expense of maintaining, operating or repairing the Building or the Property.
Notwithstanding anything in this Section 11, Lessee is not responsible for
the following which Lessor shall maintain in good condition and repair at
Lessor's expense unless repair is necessitated by the negligence or wrongful
acts of Lessee or its employees, agents, contractors, subtenants or
invitees.: (i) the parapet and roof, (ii) HVAC annual maintenance agreements
and capital replacements up to a maximum cost to Lessor of $3,000 unless
Lessor agrees otherwise, (iii) electrical vault upgrade if required by the
City of Seattle as long as such upgrade is not required because of Lessee's
load increases and (iv) structural reinforcement to the Building if required
because of City of Seattle Code changes.
12. SURRENDER OF PREMISES. Upon expiration of the Lease term whether
by lapse of time or otherwise, Lessee shall promptly and peacefully surrender
the Premises, together with all keys, to Lessor in as good condition as when
received by Lessee from Lessor or as thereafter improved, reasonable wear and
tear excepted. The delivery of keys to any employee of Lessor or to Lessor's
agent or any employee thereof shall not be sufficient to constitute a
termination of this Lease or a surrender of the Premises.
13. ACCESS. After reasonable notice from Lessor (except in cases of
emergency, where no notice is required) Lessee shall permit Lessor and its
agents and employees to enter the Premises at all reasonable times for the
purposes of repair or inspection. This Section shall not impose any repair
or other obligation upon Lessor not expressly stated elsewhere in this Lease.
After reasonable notice to Lessee, Lessor shall have the right to enter the
Premises for the purpose of showing the Premises to prospective purchasers or
lenders at any time, and to prospective lessees within one hundred eighty
(180) days prior to the expiration or sooner termination of the Lease term.
14. SIGNAGE. Lessee shall obtain Lessor's written consent before
installing any signs upon the Premises. Lessee shall install any approved
signage at Lessee's sole
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expense and in compliance with all applicable laws. Lessee shall not damage
or deface the Premises when installing or removing signage and shall repair
any injury or damage to the Premises caused by such installation or removal.
15. LOCKS. Lessee has keys to the Premises and at the termination of
this Lease, Lessee shall surrender to Lessor all keys to the Premises whether
paid for or not. Lessor or its agents may retain a passkey to the Premises
to allow access to the Premises in accordance with Section 13. Lessee, at
Lessee's cost, shall provide Lessor with one copy of each key relating to the
Premises and space therein.
16. TELEPHONE SERVICE. If Lessee desires telephonic or other electric
connection that affect any of the structural components of the Building,
Lessor shall direct the electricians as to where and how the wires are to be
introduced, and without such directions no boring or cutting for wires or
installation thereof will be permitted.
17. DESTRUCTION OR CONDEMNATION.
17.1. DAMAGE AND REPAIR.
17.1.1. REPAIR. If (a) all or part of the Premises or the
Building are damaged or destroyed or (b) Lessee's access ("Access") to the
Building, Premises, parking area or any common areas of the Building to
which Lessee must have access for the continuing use and occupancy of the
Premises is materially obstructed or hindered, and Lessor, in good faith,
estimates the time required to repair the damage and destruction and
restore the Building or the Premises to their condition existing
immediately prior to the damage, including all leasehold improvements that
were completed at Lessor's cost and expense, is less than one hundred and
eighty (180) days, then to the extent such repair is covered by insurance
carried by Lessor, Lessor shall substantially complete (i) repair and
restoration of the damage and destruction, including, at Lessor's sole cost
and expense, all leasehold improvements that were completed at Lessor's
cost and expense and/or (ii) restoration of Access. Lessor's estimate of
the time required to repair shall be given within thirty (30) days after
the damage or destruction. If Lessor's estimate of the time required for
repair exceeds one hundred and eighty (180) days, either party shall have
the right to terminate this Lease by giving notice to the other party
within thirty (30) days after receipt of the estimate.
17.1.2. COMPLETION OF WORK; ABATEMENT. If Lessor restores the
Premises under this Section 17.1., Lessor shall proceed with reasonable
diligence to complete the work, and the base monthly Rent shall be abated
in the same proportion as the untenantable portion of the Premises bears to
the whole Premises based upon the portion of the Premises destroyed and the
per square foot
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annual rent for that portion set forth on EXHIBIT C, provided that there
shall be a rent abatement only if the damage or destruction of the
Premises did not result from, or was not contributed to, directly or
indirectly, by the act, fault or neglect of Lessee or Lessee's officers,
contractors, licensees, agents, servants, employees, guests, invitees,
subtenants or visitors. If Lessor complies with its obligations under
this Section, no damages, compensation or claim shall be payable by
Lessor for inconvenience, loss of business or annoyance directly,
indirectly, incidentally or consequentially arising from any repair or
restoration of any portion of the Premises. Lessor will not carry
insurance of any kind for the protection of Lessee or on any
improvements paid for by Lessee or on Lessee's furniture or on any
fixtures, equipment, improvements or appurtenances of Lessee under this
Lease, and Lessor shall not be obligated to repair any damage thereto or
replace the same unless the damage is caused solely by Lessor's
negligence.
17.1.3. TERMINATION. If either party exercises its termination
right under this Section 17.1, the Lease shall terminate on the date
specified in the termination notice. Rent shall be payable to the
termination date less any abatement.
17.1.4. DELAY IN COMPLETING REPAIR. If Lessor does not
substantially complete repair and restoration of any damage or destruction,
or does not restore Access within sixty (60) days after the expiration of
the period for the repair estimated by Lessor, unless such failure to
complete repair and restoration is for reasons that are outside of the
control of Lessor, Lessee shall have the right to terminate this Lease by
giving written notice to Lessor within thirty (30) days after the
expiration of such sixty (60) day period, unless the repairs are completed
prior to the expiration of such thirty (30) day period after Lessee's
notice.
17.1.5. FINAL YEAR OF TERM. If the damage or destruction or
loss of Access occurs during the last year of the term of this Lease,
either party may terminate this Lease by giving notice to the other party.
17.2. CONDEMNATION. If all of the Premises is made untenantable by
eminent domain or conveyed under a threat of condemnation, this Lease shall
automatically terminate as of the earlier of the date title vests in the
condemning authority or the condemning authority first has possession of the
Premises and all Rents and other payments shall be paid to that date. In
case of taking of a part of the Premises that does not render the Premises
entirely untenantable, then this lease shall continue in full force and
effect and the base monthly Rent shall be equitably reduced based on the
proportion by which the floor area of the Premises is reduced and the per
square foot annual rent for that floor area set forth on EXHIBIT C, such
reduction in Rent to be effective as of the earlier of the date the
condemning authority first has possession of such portion or title
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vests in the condemning authority. Lessor shall be entitled to the entire
award from the condemning authority attributable to the value of the Premises
and Lessee shall make no claim for the value of its leasehold. Lessee shall
be permitted to make a separate claim against the condemning authority for
moving expenses or damages resulting from interruption in its business,
provided that in no event shall Lessee's claim reduce Lessor's award.
18. INSURANCE.
18.1. LIABILITY INSURANCE. During the Lease term Lessee shall pay
for and maintain commercial general liability insurance with broad form
property damage and contractual liability endorsements. This policy shall
name Lessor as an additional insured, and shall insure Lessee's activities
and those of Lessee's employees, officers, contractors, licensees, agents,
servants, employees, guests, invitees, subtenants or visitors with respect to
the Premises against loss, damage or liability for personal injury or death
or loss or damage to property with a combined single limit of not less than
$2,000,000, and a deductible of not more than $5,000. The insurance will be
noncontributory with any liability insurance carried by Lessor.
18.2. CASUALTY INSURANCE. During the Lease term, Lessee shall
pay for and maintain all-risk coverage casualty insurance for the Premises,
including loss of income insurance for Lessor's benefit in the initial amount
of $3,200,000, in an amount sufficient to prevent Lessor or Lessee from
becoming a co-insurer under the terms of the policy, and in an amount not
less than the replacement cost of the Premises, with a deductible of not more
than $5,000. The casualty insurance policy shall name Lessee as the insured
and Lessor and Lessor's lender(s) as additional insureds, with loss payable
to Lessor, Lessor's lender(s), and Lessee as their interests may appear. In
the event of a casualty loss on the Premises, Lessor may apply insurance
proceeds under the casualty insurance policy in the manner described in
Section 17.1.
18.3. MISCELLANEOUS INSURANCE REQUIREMENTS. If required by
Lessor, Lessee shall also obtain business interruption insurance issued in a
form and by an insurer satisfactory to Lessor. Insurance required under this
Section shall be with companies rated A-XV or better in Best's Insurance
Guide, and which are authorized to transact business in the State of
Washington. No insurance policy shall be canceled or reduced in coverage and
each such policy shall provide that it is not subject to cancellation or a
reduction in coverage except after thirty (30) days' prior written notice to
Lessor. Lessee shall deliver to Lessor upon request, copies or certificates
of the insurance policies required by this Section. In no event shall the
limit of such policies be considered as limiting the liability of Lessee
under this Lease.
18.4. WAIVER OF SUBROGATION. Lessor and Lessee hereby release each
other, their agents and employees, from responsibility for, and waive their
entire claim of recovery for any loss or damage arising from any cause
covered by insurance
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required to be carried by each of them under this Lease. Each party shall
provide notice to the insurance carrier or carriers of this mutual waiver of
subrogation, and shall cause its respective insurance carriers to waive all
rights of subrogation against the other. This waiver shall not apply to the
extent of the deductible amounts to any such policies or to the extent of
liabilities exceeding the limits of such policies.
19. ASSIGNMENT AND SUBLETTING.
19.1. RESTRICTION ON TRANSFER. Lessee shall not sell, assign,
sublet, mortgage, encumber or otherwise transfer by operation of law or
otherwise any interest in this Lease (collectively referred to as a
"Transfer") or any part of the Premises, without first obtaining Lessor's
written consent which shall not be unreasonably withheld or delayed. No
Transfer shall relieve Lessee of any liability under this Lease
notwithstanding Lessor's consent to such Transfer. Consent to any Transfer
shall not operate as a waiver of the necessity for Lessor's consent to any
subsequent Transfer. Lessee shall by written notice advise Lessor of its
desire from and after a stated date (which shall be not less than thirty (30)
days nor more than ninety (90) days after the date of Lessee's notice), to
Transfer the Premises or any portion thereof for any part of the term hereof.
Lessee's notice shall state the name and address of the proposed transferee
and the proposed rent and any other amounts payable and Lessee shall deliver
to Lessor a true and complete copy of the proposed document of Transfer with
such notice. In addition to its other rights, in such event Lessor shall
have the right, to be exercised by giving written notice to Lessee within ten
(10) days after the receipt of Lessee's notice, (i) to consent to the
Transfer, but require Lessee to pay to Lessor one-half of the amount received
by Lessee from the transferee (net of all reasonable expenses incurred by
Lessee to effect the Transfer) in excess of the amounts payable by Lessee to
Lessor for the portion of the Premises described in Lessee's notice, or (ii)
to terminate this Lease as to such portion of the Premises and such notice
shall, if given, terminate this Lease with respect to the portion of the
Premises therein described as of the date stated in Lessor's response to
Lessee's notice. If such notice shall specify all of the Premises and Lessor
shall give such termination notice with respect thereto, this Lease shall
terminate on the date stated in Lessor's response to Lessee's notice. If,
however, this Lease shall terminate pursuant to the foregoing with respect to
less than all the Premises, the Rent shall be equitably reduced based on the
proportion by which the floor area of the Premises is reduced and the per
square foot annual rent for that floor area as set forth on EXHIBIT C, and
this Lease as so amended shall continue thereafter in full force and effect.
19.2. CHANGES IN ENTITIES. Notwithstanding anything contained in
this Lease to the contrary, Lessor hereby consents to Transfer to (a) the
parent of Lessee or to a wholly owned subsidiary of Lessee or of such parent;
(b) a corporation into which or with which Lessee may be merged or
consolidated provided that the net worth of the resulting corporation is at
least equal to the greater of (i) the net worth of Lessee on the date hereof
or (ii) the net worth of Lessee immediately prior to such merger or
consolidation; or (c) to any entity to whom Lessee sells all, or
substantially all, of its
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assets, provided that such entity expressly assumes all of Lessee's
obligations hereunder and meets the net worth requirement of Section (b) of
this Section 19.2. In addition, notwithstanding anything contained in this
Lease to the contrary, if Lessee conducts a public offering of its stock,
such transaction shall not be deemed a Transfer. Lessor further acknowledges
that Lessee has entered into a transaction in which Lessee, through a merger
and related recapitalization transaction with Getty Communications, Inc. and
its affiliates, will become a wholly owned subsidiary of Getty Images, Inc.,
a Delaware corporation. Lessor consents to the consummation of such
transaction and such transaction shall not be a Transfer.
19.3. CONDITION TO TRANSFER. As a condition to Lessor's approval,
if given, any potential assignee or sublessee otherwise approved by Lessor
shall assume all obligations of Lessee under this Lease and shall be jointly
and severally liable with Lessee and any guarantor, if required, for the
payment of Rent and performance of all terms of this Lease. In connection
with any Transfer, Lessee shall provide Lessor with copies of all
assignments, subleases and assumption instruments.
20. INDEMNIFICATION.
20.1. LESSEE'S INDEMNITY. Lessee shall indemnify, defend and hold
Lessor harmless from all liabilities, damages, costs, and expenses, including
reasonable attorneys' fees, arising from Lessee's use of the Premises or
Property or conduct of its business or the business of its subtenants, from
any activity, work or thing done, permitted or suffered by Lessee in or about
the Premises or Property, from any breach or default in the performance of
any obligation to be performed by Lessee under the terms of this Lease, or
from any act or omission of Lessee or Lessee's officers, contractors,
licensees, agents, servants, employees, guests, invitees, subtenants or
visitors. Lessee, as a material part of the consideration to Lessor, hereby
assumes all risk of damage to property or injury to persons in, upon or about
the Premises from any cause whatsoever, except that which is caused by the
negligence of Lessor or the failure of Lessor to observe any of the terms and
conditions of this Lease where such failure of Lessor has persisted for an
unreasonable period of time after written notice of such failure. In case
any action or proceeding is brought against Lessor by reason of any claim
described in this Section, Lessee upon notice from Lessor, shall defend the
same at Lessee's expense, by counsel reasonably approved in writing by Lessor.
20.2. LESSOR LIMITATION OF LIABILITY. Neither Lessor nor any
partner, director, member, officer, manager, agent or employee of Lessor
shall be liable to Lessee, or its directors, officers, shareholders, agents,
employees, invitees, subtenants or licensees, for any loss, injury or damage
to Lessee or any other person, or to its or their property, irrespective of
the cause of such injury, damage or loss, unless and then only to the extent
it is caused by or resulting from the negligence or willful misconduct of
Lessor or its employees without contributory negligence on the part of Lessee
or any of its employees, agents or contractors or any other lessees or
occupants of the Building.
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21. LIENS. Lessee shall keep the Premises free from any liens created
by or through Lessee. Lessee shall indemnify and hold Lessor harmless from
liability from any such liens including, without limitation, liens arising
from any Alterations. If a lien is filed against the Premises by any person
claiming by, through or under Lessee, Lessee shall, upon request of Lessor,
at Lessee's expense, immediately furnish to Lessor a bond in form and amount
requested by Lessor and issued by a surety satisfactory to Lessor,
indemnifying Lessor and the Premises against all liabilities, costs and
expenses, including attorneys' fees, which Lessor could reasonably incur as a
result of such lien(s). If Lessee shall not, within twenty (20) days
following the imposition of any such lien, cause the same to be released of
record or furnish such bond, Lessor shall, in addition to all other remedies
provided herein and by law, have the right, but not the obligation, to cause
the same to be released by such means as Lessor deems proper, including
payment of the claim giving rise to such lien. All such sums paid by Lessor
and all expenses incurred by it in connection therewith shall be considered
additional Rent and shall be payable to it by Lessee on demand with interest
at the rate of twelve percent (12%) per annum from the date such sums and
expenses were paid by Lessor until paid by Lessee.
22. DEFAULT. The following occurrences shall each be deemed an Event
of Default by Lessee:
22.1. FAILURE TO PAY. Lessee fails to pay any sum, including Rent,
due under this Lease within ten (10) days after notice from Lessor of the
failure to pay.
22.2. ABANDONMENT. Lessee abandons the Premises (defined as an
absence of five (5) days or more while Lessee is in breach of some other term
of this Lease). Lessee's abandonment of the Premises shall not be subject to
any notice or right to cure.
22.3. INSOLVENCY. Lessee becomes insolvent, voluntarily or
involuntary bankrupt or a receiver, assignee or other liquidating officer is
appointed for Lessee's business' provided that in the event of any
involuntary bankruptcy or other insolvency proceeding, the existence of such
proceeding shall constitute an Event of Default only if such proceeding is
not dismissed or vacated within sixty (60) days after its institution or
commencement.
22.4. LEVY OR EXECUTION. Lessee's interest in this Lease or the
Premises, or any part thereof, is taken by execution or other process of law
directed against Lessee, or is taken upon or subjected to any attachment by
any creditor of Lessee, if such attachment is not discharged within fifteen
(15) days after being levied.
22.5. OTHER NON-MONETARY DEFAULTS. Lessee breaches any agreement,
term or covenant of this Lease other than one requiring the payment of money
and not otherwise enumerated in this Section, and the breach continues for a
period of thirty (30) days after notice by Lessor to Lessee of the breach
provided that if such breach
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cannot reasonably be cured within such thirty (30) day period, an Event of
Default shall not exist if Lessee commences cure within such thirty (30) day
period and diligently proceeds with a cure, provided further, that if the
cure is not completed within ninety (90) days after notice by Lessor to
Lessee, an Event of Default shall exist.
23. REMEDIES ON DEFAULT. Lessor shall have the following remedies upon
an Event of Default. Lessor's rights and remedies under this Lease shall be
cumulative, and none shall exclude any other right or remedy allowed by law.
23.1. TERMINATION OF LEASE. Lessor may terminate Lessee's
interest under this Lease, but no act by Lessor other than written notice
from Lessor to Lessee of termination shall terminate this Lease. This Lease
shall terminate on the date specified in the notice of termination. Upon
termination of this Lease, Lessee will remain liable to Lessor for damages in
an amount equal to the Rent and other sums that would have been owing by
Lessee under this Lease for the balance of the Lease term, less the net
proceeds, if any, of any reletting of the Premises by Lessor subsequent to
the termination, after deducting all Lessor's Reletting Expenses (as defined
in Section 23.2). Lessor shall be entitled to either collect damages from
Lessee monthly on the days on which Rent or other amounts would have been
payable under this Lease, or alternatively, Lessor may accelerate Lessee's
obligations under this Lease and recover from Lessee: (i) unpaid Rent which
had been earned at the time of termination; (ii) the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of Rent loss that Lessee proves could reasonably
have been avoided; (iii) the amount by which the unpaid Rent for the balance
of the term of this Lease after the time of award exceeds the amount of Rent
loss that Lessee proves could reasonably be avoided (discounting such amount
by the discount rate of the Federal Reserve Bank of San Francisco at the time
of the award, plus 1%); and (iv) any other amount necessary to compensate
Lessor for all the detriment proximately caused by Lessee's failure to
perform its obligations under this Lease, or which in the ordinary course
would be likely to result from the Event of Default, including without
limitation Reletting Expenses described in Section 23.2.
23.2. RE-ENTRY AND RELETTING. Lessor may continue this Lease in
full force and effect, and without demand or notice, reenter and take
possession of the Premises or any part thereof, expel Lessee from the
Premises and anyone claiming through or under Lessee, and remove the personal
property of either. Lessor may relet the Premises, or any part of them, in
Lessor's or Lessee's name for the account of Lessee, for such period of time
and at such other terms and conditions, as Lessor, in its discretion, may
determine. Lessor may collect and receive the Rents for the Premises.
Re-entry or taking possession of the Premises by Lessor under this Section
shall not be construed as an election on Lessor's part to terminate this
Lease, unless a written notice of termination is given to Lessee. Lessor
reserves the right following any re-entry or reletting, or both, under this
Section to exercise its right to terminate this Lease. During the Event of
Default, Lessee will pay Lessor the Rent and other sums which would be
payable under
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<PAGE>
this Lease if repossession had not occurred, less the proceeds received by
Lessor, if any, from reletting the Premises net of Lessor's Reletting
Expenses. "Reletting Expenses" is defined to include all expenses incurred
by Lessor in connection with reletting the Premises, including without
limitation, all repossession costs, brokerage commissions, attorneys' fees,
remodeling and repair costs, costs for removing and storing Lessee's property
and equipment, and rent concessions granted by Lessor to any new Lessee,
prorated over the life of the new lease.
23.3. WAIVER OF REDEMPTION RIGHTS. Lessee, for itself, and on
behalf of any and all persons claiming through or under Lessee, including
creditors of all kinds, hereby waives and surrenders all rights and
privileges which they may have under any present or future law, to redeem the
Premises or to have a continuance of this Lease for the Lease term, as it may
have been extended, after an Event of Default.
23.4. NONPAYMENT OF ADDITIONAL RENT. All costs which Lessee
agrees to pay to Lessor pursuant to this Lease shall in the event of
nonpayment be treated as if they were payments of Rent, and Lessor shall have
all the rights herein provided for in case of nonpayment of Rent.
23.5. FAILURE TO REMOVE PROPERTY. If Lessee fails to remove any
of its property from the Premises at Lessor's request following an Event of
Default, Lessor may, at its option, remove and store the property at Lessee's
expense and risk. If Lessee does not pay the storage cost within five (5)
days of Lessor's request, Lessor may, at its option, have any or all of such
property sold at public or private sale (and Lessor may become a purchaser at
such sale), in such manner as Lessor deems proper, without notice to Lessee.
Lessor shall apply the proceeds of such sale: (i) to the expense of such
sale, including reasonable attorneys' fees actually incurred; (ii) to the
payment of the costs or charges for storing such property; (iii) to the
payment of any other sums of money which may then be or thereafter become due
Lessor from Lessee under any of the terms hereof; and (iv) the balance, if
any, to Lessee. Nothing in this Section shall limit Lessor's right to sell
Lessee's personal property as permitted by law to foreclose Lessor's lien for
unpaid Rent.
24. LESSOR'S MORTGAGES. Lessor may mortgage, or grant deeds of trust
with respect to the Premises or the Property. Lessee shall within ten (10)
days after request by Lessor deliver an executed and acknowledged instrument
amending this Lease in such respects as may be required by any present or
future mortgagee, provided that such amendment does not materially alter or
impair Lessee's rights or remedies under this Lease or increase its rental
burdens.
This Lease shall automatically be subordinate to any mortgage or deed of
trust created by Lessor which is now existing or hereafter placed upon the
Premises including any advances, interest, modifications, renewals, replacements
or extensions thereof ("Lessor's Mortgage"), provided the holder of any Lessor's
Mortgage or any person(s)
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<PAGE>
acquiring the Premises at any sale or other proceeding under any such
Lessor's Mortgage shall elect to continue this Lease in full force and
effect. Lessee shall attorn to the holder of any Lessor's Mortgage or any
person(s) acquiring the Premises at any sale or other proceeding under any
Lessor's Mortgage provided such person(s) assume the obligations of Lessor
under this Lease. Lessee shall promptly and in no event later than fifteen
(15) days execute, acknowledge and deliver documents which the holder of any
Lessor's Mortgage may reasonably require as further evidence of this
subordination and attornment. Notwithstanding the foregoing, Lessee's
obligations under this Section are conditioned on the holder of each of
Lessor's Mortgage and each person acquiring the Premises at any sale or other
proceeding under any such Lessor's Mortgage not disturbing Lessee's occupancy
and other rights under this Lease, so long as no uncurred Event of Default
exists.
25. NON-WAIVER. No waiver of any right under this Lease shall be
effective unless contained in a writing signed by a duly authorized officer
or representative of the party sought to be charged with the waiver. No
waiver by Lessor of a breach by Lessee of any covenant or condition of this
Lease shall be construed to be a waiver of any subsequent breach of the same
or any other covenant or condition. The acceptance by Lessor of Rent or other
amounts due from Lessee hereunder shall not be deemed to be a waiver of any
breach by Lessee preceding such acceptance or any other right of Lessor
arising under this Lease.
26. HOLDOVER. If Lessee shall, without the written consent of Lessor,
hold over after the expiration or termination of the Lease term, such tenancy
shall be deemed to be on a month-to-month basis and may be terminated
according to Washington law. During such tenancy, Lessee shall be bound by
all of the terms, covenants and conditions of this Lease except that Lessee
agrees to pay to Lessor 150% of the rate of rental last payable under this
Lease, unless a different rate is agreed upon by Lessor. If Lessee fails to
surrender the Premises at the expiration of the term of this Lease, Lessee
shall indemnify and hold Lessor harmless from and against all loss or
liability resulting from such holding over. Lessee further acknowledges that
during any agreed upon month-to-month tenancy, Lessor may be attempting to
relet the Premises. Lessee agrees to cooperate with Lessor in connection
with such reletting and Lessee further acknowledges Lessor's statutory right
to terminate this Lease with proper notice.
27. NOTICES. All notices under this Lease shall be in writing and
effective (i) when delivered in person, (ii) three (3) business days after
being sent by registered or certified mail to Lessor or Lessee, as the case
may be, at the Notice Addresses set forth in Section 1.7; or (iii) upon
confirmed transmission by facsimile to such persons at the facsimile numbers
set forth in Section 1.7 or such other addresses/facsimile numbers as may
from time to time be designated by such parties in writing. If required by
any lender of Lessor, Lessee agrees that any notice sent to Lessor shall be
concurrently sent to such lender at any address(es) of which Lessee is
notified.
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28. COSTS AND ATTORNEYS' FEES. If Lessee or Lessor engage the services
of an attorney to collect monies due or to bring any action for any relief
against the other, declaratory or otherwise, arising out of this Lease,
including any action by Lessor for the recovery of Rent or other payments or
for possession of the Premises, the losing party shall pay the substantially
prevailing party a reasonable sum for attorneys' fees and costs in such
action, including those arising without resort to suit and those in any
bankruptcy action and any appeal, and for all other costs incurred in
connection therewith including, without limitation, the fees of accountants,
appraisers and other professionals.
29. ESTOPPEL CERTIFICATES. Lessee shall, from time to time, upon
written request of Lessor, execute, acknowledge and deliver to Lessor or its
designee a written statement specifying the following, subject to any
modifications necessary to make such statements true and complete: (i) the
date the Lease term commenced and the date it expires; (ii) the amount of
minimum monthly Rent and the date to which such Rent has been paid; (iii)
that this Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way; (iv) that this Lease represents
the entire agreement between the parties; (v) that all conditions under this
Lease to be performed by Lessor have been satisfied; (vi) that there are no
existing claims, defenses or offsets which Lessee has against the enforcement
of this Lease by Lessor; (vii) that no Rent has been paid more than one month
in advance; and (viii) that no security has been deposited with Lessor (or,
if so, the amount thereof). Any such statement delivered pursuant to this
Section may be relied upon by a prospective purchaser of Lessor's interest or
assignee of any mortgage or new mortgagee of Lessor's interest in the
Premises. If Lessee shall fail to respond within ten (10) days of receipt by
Lessee of a written request by Lessor as herein provided, Lessee shall be
deemed to have given such certificate as above provided without modification
and shall be deemed to have admitted the accuracy of any information supplied
by Lessor to a prospective purchaser or mortgagee.
30. TRANSFER OF LESSOR'S INTEREST. This Lease shall be assignable by
Lessor without the consent of Lessee. In the event of any transfer or
transfers of Lessor's interest in the Premises, other than a transfer for
security purposes only, upon the assumption of this Lease by the transferee
and transfer by Lessor of the security deposit to the transferee, Lessor
shall be automatically relieved of obligations and liabilities accruing from
and after the date of such transfer, except for any retained security deposit
or prepaid rent, and Lessee shall attorn to the transferee.
31. RIGHT TO PERFORM. If Lessee shall fail to timely pay any sum or
perform any other act on its part to be performed hereunder, Lessor may make
any such payment or perform any such other act on Lessee's part to be made or
performed as provided in this Lease. Lessee shall, on demand, reimburse
Lessor for its expenses incurred in making such payment or performance.
Lessor shall (in addition to any other
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right or remedy of Lessor provided by law) have the same rights and remedies
in the event of the nonpayment of sums due under this Section as in the case
of default by Lessee in the payment of Rent.
32. HAZARDOUS MATERIAL.
32.1. RESTRICTION ON HAZARDOUS MATERIALS. Lessee shall not cause
or permit any Hazardous Material to be brought upon, kept, or used in or
about, or disposed of on the Premises, Property or Building by Lessee, its
agents, employees, contractors, subtenants or invitees, except in strict
compliance with all applicable federal, state and local laws, regulations,
codes and ordinances. If Lessee breaches the obligations stated in the
preceding sentence, then Lessee shall indemnify, defend and hold Lessor
harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities or losses including, without limitation, diminution in the
value of the Premises, Property and Building, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises, Property or Building, or elsewhere, damages arising from any
adverse impact on marketing of space at the Premises, Property or Building,
and sums paid in settlement of claims, attorneys' fees, consultant fees and
expert fees incurred or suffered by Lessor either during or after the Lease
term. This indemnification by Lessee includes, without limitation, costs
incurred in connection with any investigation of site conditions or any
clean-up, remedial, removal or restoration work, whether or not required by
any federal, state or local governmental agency or political subdivision,
because of Hazardous Material present in the Premises, Property or Building,
or in soil or groundwater on or under the Premises, Property or Building.
Lessee shall immediately notify Lessor of any inquiry, investigation or
notice that Lessee may receive from any third party regarding the actual or
suspected presence of Hazardous Material on the Premises, Property or
Building.
32.2. REMEDIATION. Without limiting the foregoing, if the
presence of any Hazardous Material brought upon, kept or used in or about the
Premises, Property or Building by Lessee, its agents, employees, contractors,
subtenants or invitees, results in any unlawful release of Hazardous Material
on the Premises, the Property, Building or any other property, Lessee shall
promptly take all actions, at its sole expense, as are necessary to return
the Premises, Property or Building or any other property, to the condition
existing prior to the release of any such Hazardous Material; provided that
Lessor's approval of such actions shall first be obtained, which approval may
be withheld at Lessor's sole discretion.
32.3. DEFINITION OF HAZARDOUS MATERIALS. As used herein, the term
"Hazardous Material" means any hazardous, dangerous, toxic or harmful
substance, material or waste including biomedical waste which is or becomes
regulated by any local governmental authority, the State of Washington or the
United States Government due to its potential harm to the health, safety or
welfare of humans or the environment.
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33. QUIET ENJOYMENT. So long as Lessee pays the Rent and performs all
of its obligations in this Lease, Lessee's possession of the Premises will
not be disturbed by Lessor or anyone claiming by, through or under Lessor, or
by the holders of any Lessor's Mortgage or any successor thereto.
34. PROPERTY MANAGEMENT.
34.1. MANAGEMENT. Lessor hereby engages Lessee as Lessor's
exclusive agent to perform all of Lessor's leasing, management, reporting,
and administrative functions under the leases of space in the Building other
that this Lease (the "Tenant Leases") during the term of this Lease and
Lessee hereby accepts such engagement. Lessor may terminate this Section 34
for any reason upon thirty days' written notice to Lessee. Upon such
termination, Lessee shall provide an orderly transition regarding the
management of the Building, including without limitation, delivering to
Lessor (i) a final accounting, reflecting the balance of income and expenses
for the Building as of the date of termination, (ii) any balance or monies
due to Lessor together with tenant security deposits, if any, held by Lessee
with respect to the Building; and (iii) all records, keys and other access
mechanisms, papers and documentation relating to the Tenant Leases.
Termination of this Section 34 shall not terminate this Lease.
34.2. MANAGEMENT DUTIES. Except as set forth in this Section 34.2,
Lessee, on behalf of Lessor, shall perform all obligations of Lessor related
to operating and maintenance of the Building and Property and administration
of Lessor's obligations under the Tenant Leases, other than leasing of the
Premises to Lessee. The other current tenants in the Building are listed on
EXHIBIT E attached hereto and incorporated herein by this reference. Lessee
shall at all times conform to the policies and programs established by Lessor
and the scope of Lessee's authority shall be limited by such policies and
this Lease. Lessee shall use its best efforts in the management and
operation of the Building and Property, including but not limited to the
following:
(a) COLLECTION OF RENT AND OTHER AMOUNTS. Lessee shall receive
and collect rent and all other monies payable to Lessor under the Tenant
Leases, including, without limitation, payments for taxes, utilities,
insurance and Project Operating Costs and deposit the same promptly with
such financial institution as Lessor shall from time to time designate.
Lessee shall also collect, deposit, and disburse security deposits, in
accordance with the terms of each tenant's lease. The amount of each
security deposit will be as specified in the lease.
(b) INSURANCE; TAXES; PROJECT OPERATING COSTS. Lessee shall
arrange for property and casualty insurance on the Building and Property in
such amounts and with such carriers as Lessor shall request from time to
time. Unless Lessor directs otherwise in writing, Lessee shall pay the
premiums for such insurance from amounts collected under the Tenant Leases
for insurance and
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amounts due under this Lease for insurance. Further, unless Lessor
directs otherwise in writing, Lessee shall pay the Taxes and
Project Operating Costs for the Building and Property from amounts
collected under the Tenant Leases for such purposes and amounts due under
this Lease for such purposes. Lessor shall pay the portions of the
premiums for such insurance and portions of such Taxes and Project
Operating Costs that Lessee does not owe under this Lease and, after its
best efforts, does not collect under the Tenant Leases.
(c) RENTAL OF SPACE. Lessor shall be responsible for
negotiation and execution of all Tenant Leases. Lessee shall advise Lessor
of prospective tenants of which it becomes aware. At the request of
Lessor, Lessee shall show the space in the Building to prospective tenants.
(d) SERVICE CONTRACTS. Lessee shall negotiate contracts, in the
name of Lessor, for submission to and approval by Lessor, for gas,
electricity, water and such other services as are furnished to the Building
and Property and paid for under the Tenant Leases or this Lease.
(e) LESSEE'S EMPLOYEES. Lessee shall select, employ, pay,
supervise, direct and discharge all on-site employees necessary for the
operation and maintenance of the Building and Property and shall use
reasonable care in the selection and supervision of such employees. Lessee
shall be responsible for complying with all laws and regulations and
agreements affecting such employment. Persons employed by Lessee to
perform work in the Building and on the Property are considered employees
of Lessee, and neither Lessee nor Lessee's employees are employees of
Lessor. Lessee shall not establish an employee/employer relationship on
behalf of Lessor without Lessor's prior consent. Lessee and each of its
employees and subcontractors will be acting as an independent contractor to
Lessor.
(f) MAINTENANCE AND REPAIR OF PREMISES. Lessee shall keep the
Building and Property in a clean and good condition and shall make all
repairs, alterations, replacements, and installations, do all decorating
and landscaping, and purchase all supplies necessary for the proper
operation of the Building and Property and pay for such items with amounts
designated for Project Operating Costs under this Lease and the Tenant
Leases; provided, however, that Lessee shall not make any purchase or do
any work, or undertake any obligation on behalf of Lessor, the cost of
which shall exceed $500 without obtaining in each instance the prior
approval of Lessor. If Lessor shall require, Lessee shall submit a list of
contractors and subcontractors performing tenant work, repairs, alteration
or services at the Building and Property, under Lessee's direction.
(g) NOTICES TO LESSOR. Lessee shall handle promptly complaints
and reasonable requests from tenants and promptly notify Lessor of any
breach or default under any Tenant Lease, any major complaint made by a
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tenant; any notice of violation of any governmental requirements (together
with copies of supporting documentation), any defect in the Building; any
personal injury or property damage occurring to or claimed by any tenant or
third party on or with respect to the Building or Property, any
condemnation proceedings, rezoning or other governmental order, lawsuit or
threat thereof involving the Building or Property, any violations relative
to the Building or Property under governmental laws, rules, regulations,
ordinances, or like provisions and any fire or other damage to the
Building. In the case of any serious damage to the Building or Property,
Lessee shall also immediately telephone notice thereof to Lessor so that an
insurance adjuster can view the damage before repairs are started, and
complete customary loss reports in connection with such damage to the
Building or Property.
(h) COMPLIANCE WITH LAWS. Lessee shall promptly comply with all
present and future laws, ordinances, orders, rules, regulations and
requirements of all federal, state and local governments, courts,
departments, commission, boards and offices having jurisdiction, or any
other body exercising functions similar to those of any of the foregoing
which may be applicable to the Building or Property or any part thereof or
to the leasing, use, repair, operation and management thereof.
(i) REPORTING REQUIREMENTS. Lessee shall promptly prepare and
deliver to Lessor financial reports relating to the management and
operation of the Building and Property for the preceding calendar month, on
or before the 20th day of each month, in a form satisfactory to Lessor. In
addition, upon Lessor's request, Lessee shall prepare, such rent rolls,
business and personal property tax forms or exemption certificates, and
such other financial reports as may be reasonably required from time to
time. Lessee shall establish and maintain control over accounting and
financial transactions as is reasonably required to protect Lessor's assets
from loss. Lessor may audit the books and records maintained by Lessee for
the Building and Property at any time during normal business hours.
(j) MANAGEMENT FEE. Lessor shall pay Lessee a management fee of
$1,375 per month for its services hereunder which shall be charged to the
tenants in the Building as one of the Project Operating Costs. Such fee
shall be reviewed annually by Lessor and Lessee and shall not be changed
without the written consent of Lessor.
35. GENERAL.
35.1. HEIRS AND ASSIGNS. This Lease shall apply to and be binding
upon Lessor and Lessee and their respective heirs, executors, administrators,
successors and assigns.
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC PAGE 21 OF 24
<PAGE>
35.2. BROKERS. Lessee and Lessor each represents and warrants to
the other that it has not engaged any broker, finder or other person who
would be entitled to any commission or fees for the negotiation, execution,
or delivery of this Lease. Lessee and Lessor shall each indemnify and hold
the other harmless against any loss, cost, liability or expense incurred by
such other as a result of any claim asserted by any such broker, finder or
other person on the basis of any arrangements or agreements made or alleged
to have been made by or on behalf of the indemnitor.
35.3. ENTIRE AGREEMENT. Lessor and Lessee hereby terminate in its
entirety the existing PhotoDisc, Inc. Marshall Building Lease dated as of
October 1, 1995 (the "Prior Lease") and Lessor and Lessee shall have no
further rights or obligations thereunder. This Lease contains all of the
covenants and agreements between Lessor and Lessee relating to the Premises.
No prior agreements or understanding pertaining to this Lease shall be valid
or of any force or effect and the covenants and agreements of this Lease
shall not be altered, modified or added to except in writing signed by Lessor
and Lessee. Lessee acknowledges and agrees that Lessor has made no
representations or promises except as are contained in this Lease.
35.4. SEVERABILITY. Any provision of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate
any other provision of this Lease and such other provisions shall remain in
full force and effect.
35.5. TIME OF ESSENCE. Time is of the essence with respect to the
performance of this Lease.
35.6. GOVERNING LAW. This Lease shall be governed by and
construed in accordance with the laws of the State of Washington.
35.7. MUTUAL PREPARATION OF LEASE. Lessor and Lessee acknowledge
and agree that this Lease was prepared mutually by both parties. In the
event of ambiguity, Lessor and Lessee agree that it shall not be construed
against either party as the drafter of this Lease.
35.8. MEMORANDUM OF LEASE. This Lease shall not be recorded.
However, at the request of Lessor or Lessee, Lessor and Lessee shall execute
and record a memorandum of Lease in recordable form that identifies Lessor
and Lessee, the commencement and expiration dates of this Lease, and the
legal description of the Property as set forth on attached EXHIBIT B.
35.9. AUTHORITY OF PARTIES. Any individual signing this Lease on
behalf of an entity represents and warrants to the other party that such
individual has authority to do so and, upon such individual's execution, that
this Lease shall be binding upon and enforceable against the party on behalf
of whom such individual is signing.
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC PAGE 22 OF 24
<PAGE>
IN WITNESS WHEREOF this Lease has been executed the date and year first
above written.
LESSOR: LESSEE:
Marshall Building, L.L.C. PhotoDisc, Inc.
By: /s/ Mark Torrance By: /s/ Robert J. Chamberlain
----------------------------- -------------------------------
Its: Managing Partner Its: Sr. Vice President-CFO
------------------------- -------------------------------
STATE OF WASHINGTON )
ss.
COUNTY OF KING )
On this day personally appeared before me Mark Torrance, to me known to
be the Managing Partner of Marshall Building, L.L.C., the Limited Liability
Company that executed the foregoing instrument, and acknowledged such
instrument to be the free and voluntary act and deed of such limited
liability company, for the uses and purposes therein mentioned, and on oath
stated that he/she was duly authorized to execute such instrument.
GIVEN UNDER MY HAND AND OFFICIAL SEAL this 21st day of January, 1998.
/s/ Synda S. McCormick
----------------------------------
Printed Name Synda S. McCormick
NOTARY PUBLIC in and for the State of Washington, residing at
Snohomish, WA
My Commission Expires 4/29/00
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC PAGE 23 OF 24
<PAGE>
STATE OF WASHINGTON )
ss.
COUNTY OF KING )
On this day personally appeared before me Robert J. Chamberlain, to me
known to be the Sr. VP CFO of PhotoDisc, Inc., the corporation that executed
the foregoing instrument, and acknowledged such instrument to be the free and
voluntary act and deed of such corporation, for the uses and purposes
therein mentioned, and on oath stated that he/she was duly authorized to
execute such instrument.
GIVEN UNDER MY HAND AND OFFICIAL SEAL this 21st day of January, 1998.
/s/ Synda S. McCormick
---------------------------------
Printed Name Synda S. McCormick
NOTARY PUBLIC in and for the State of Washington, residing at
Snohomish, WA
My Commission Expires 4/29/00
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC PAGE 24 OF 24
<PAGE>
EXHIBIT A
DESCRIPTION OF PREMISES
Lessee leases 34,108 rentable square feet of general office space on
floors four, three and two of the Building, representing all of floors three
and four in the Building and all of floor two of the Building other than the
space leased by Derek Andrew. Lessee also leases 3,281 rentable square feet
of shipping garage space on floor one.
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC EXHIBIT A
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION OF PROPERTY
Lots 10 and 11, Block 49, A. A. Denny's Sixth Addition to the City of
Seattle, except the easterly 12 feet of said lots taken for the
widening of Fourth Avenue, situated in the City of Seattle, King
County, State of Washington. Also known as parcel 197720-1245-06,
records of the King County Assessor.
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC EXHIBIT B
<PAGE>
EXHIBIT C
RENTABLE SQUARE FEET AND ANNUAL PER SQUARE FOOT RENT
<TABLE>
<CAPTION>
Floor Rentable Annual Per Square Monthly
Square Feet Foot Rent Rent
<S> <C> <C> <C>
2-4 34,108 $14.00 39,792.67
1-Warehouse 3,281 $ 8.00 2,187.33
-----------
Total Monthly Rent $41,980.00
</TABLE>
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC EXHIBIT C
<PAGE>
EXHIBIT D
DESCRIPTION OF PREAPPROVED ALTERATIONS
Approved alterations floor plan attached.
DESCRIPTION OF DESIGNATED ALTERATIONS THAT LESSEE WILL REMOVE AT LESSEE'S
COST AT THE END OF THE LEASE TERM:
1) All card reader and related security equipment; and
2) Back up generator.
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC EXHIBIT D
<PAGE>
EXHIBIT E
CURRENT TENANT LIST
<TABLE>
<CAPTION>
TENANT BASE RENT
<S> <C>
Frank & Bernies $1,993.00
Seattle Coin Shop $1,002.00
Shear Seattle $ 950.00
Habit Cleaners $ 600.00
Derek Andrew $4,423.20
TOTAL BASE RENT 1/98 $8,968.20
</TABLE>
_______________________________________________________________________________
LEASE TORRANCE PHOTODISC EXHIBIT E
<PAGE>
[FOURTH FLOOR PLAN]
MARSHALL BLDG.
<PAGE>
[THIRD FLOOR PLAN]
MARSHALL BLDG.
<PAGE>
[SECOND FLOOR PLAN]
MARSHALL BLDG.