Washington-Seattle-1000 Lenora Street #600 Sublease Agreement - SVG Distribution Inc. and Photodisc Inc.
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (the "Sublease") is entered into THIS _____ DAY
OF AUGUST, 1998 between SVG DISTRIBUTION, INC. A CALIFORNIA CORPORATION
("Tenant"), and PHOTODISC, INC., A WASHINGTON CORPORATION ("Subtenant"). Tenant
entered into a lease (the "Master Lease") with 1000 INVESTMENT ASSOCIATES, as
landlord ("Landlord"), dated AUGUST 3, 1997, leasing the premises commonly known
as SUITE #600 OF 1000 LENORA STREET, SEATTLE, WASHINGTON, and legally described
on the attached Exhibit 1, ATTACHED HERETO AND INCORPORATED BY THIS REFERENCE
HEREIN ("Master Premises"). A copy of the Master Lease, including all
amendments, is attached as Exhibit 2 and incorporated by this reference HEREIN.
Tenant and Subtenant agree as follows:
1. SUBLEASE SUMMARY
a. SUBLEASED PREMISES. Tenant leases to Subtenant and Subtenant leases
from Tenant the ENTIRE Master Premises, consisting of APPROXIMATELY
8,683 rentable square feet of area on the SIXTH floor OF THE BUILDING
LOCATED AT 1000 LENORA STREET, Seattle Washington, outlined on the floor
plan attached as Exhibit 3 AND INCORPORATED BY REFERENCE HEREIN (the
"Subleased Premises").
b. SUBLEASE COMMENCEMENT DATE. The Sublease shall commence on NOVEMBER
1, 1998 or such earlier or later date as provided in Section 2 (the
"Sublease Commencement Date").
c. SUBLEASE TERMINATION DATE. The Sublease shall terminate at midnight
on DECEMBER 31, 2002 or one day prior to the termination date of the
Master Lease, whichever is earlier, unless sooner terminated in
accordance with the terms of this Sublease (the "Sublease Termination
Date").
d. BASE RENT. Subtenant shall pay to Tenant base monthly rent of
$14,833.46. Rent shall be payable at Tenant's address shown below, or
such other place designated in writing by Tenant.
e. PREPAID RENT. Upon execution of this Sublease, Subtenant shall
deliver to Tenant the sum of $14,833.46 as prepaid rent, to be applied
to the Rent due for the FIRST month of the Sublease.
f. SECURITY DEPOSIT. Upon execution of this Sublease, Subtenant shall
deliver to Tenant a security deposit in the amount of $14,833.46.
g. PERMITTED USE. The Subleased Premises shall be used for THE PURPOSE
OF A PHOTOGRAPHY STUDIO AND GENERAL OFFICE USE and for no other purpose
without the prior written consent of Tenant.
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h. NOTICE AND PAYMENT ADDRESSES:
Tenant: SVG DISTRIBUTION, INC.
19645 RANCHO WAY
RANCHO DOMINGUS, CA 90220
ATTN: BOB RICHARDS
Phone: (206) 516-4330 Fax: (206) 516-4301
ATTN: RICHARD SILVEIRA
Subtenant: PHOTODISC, INC.
2013 4TH AVENUE, SUITE 402
SEATTLE, WA 98121
ATTN: FACILITIES
Phone: (206) 441-9355 Fax: (206) 441-9379
Tenant and Subtenant agree to immediately notify each other of any
notice that they receive from Landlord concerning the Subleased
Premises, the Master Premises, the Master Lease, or this Sublease.
i. SUBTENANT'S PRORATA SHARE. Subtenant's prorata share of any operating
costs, additional rent, or other amounts payable by Tenant under the
Master Lease are 100% of such amounts, based upon the rentable area of
the Subleased Premises and the rentable area of the Master Premises.
2. TERM. Subtenant acknowledges that Tenant is obligated to obtain Landlord's
prior written consent to this Sublease as provided in Section 11 below prior to
Subtenant occupying the Subleased Premises, and Subtenant shall not occupy the
Subleased Premises without the prior written consent of Landlord. SUBJECT TO
OBTAINING LANDLORD'S PRIOR WRITTEN CONSENT PURSUANT TO PARAGRAPH 11 HEREOF,
SUBTENANT SHALL HAVE A PERIOD OF TWENTY (20) DAYS PRIOR TO THE SUBLEASE
COMMENCEMENT DATE, WITHOUT ANY OBLIGATION TO PAY RENT OR ADDITIONAL RENT UNDER
THIS SUBLEASE, TO ENTER THE SUBLEASED PREMISES FOR THE PURPOSE OF INSTALLING ITS
EQUIPMENT, DATA, TELECOMMUNICATIONS AND CABLING SYSTEMS AND TRADE FIXTURES. If
Subtenant occupies the Subleased Premises before the Sublease Commencement Date,
then the Sublease Commencement Date shall be the date of occupancy. If Tenant
acts diligently to make the Subleased Premises available to Subtenant, neither
Tenant nor any agent of Tenant shall be liable for any damage or loss due to
Tenant's inability or failure to deliver possession of the Premises to Tenant as
provided in this Sublease. In such case, the rent shall abate until delivery of
possession, but the Sublease Termination Date shall not be extended by such
delay. Notwithstanding the foregoing, if Tenant has not delivered possession to
Subtenant within thirty (30) days after the Sublease Commencement Date,
Subtenant may elect to cancel this
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Sublease by giving written notice to Tenant within 10 days after such time
period ends. If Subtenant gives such notice, this Sublease shall be canceled,
all prepaid rent and security deposits shall be refunded to Subtenant, and
neither Tenant nor Subtenant shall have any further obligations to the other.
3. MASTER LEASE. Subtenant represents that it has read and is familiar with the
terms of the Master Lease. This Sublease is subject and subordinate to the
Master Lease. If the Master Lease terminates, this Sublease shall terminate.
However, Tenant and Subtenant shall not do nor permit anything to be done which
would cause the Master Lease to be terminated or forfeited prior to the Sublease
Termination Date. If the Master Lease terminates or is forfeited as a result of
a default or breach by Tenant or Subtenant under this Sublease and/or the Master
Lease, then the defaulting party shall be liable to the non-defaulting party for
the damage suffered as a result of such termination or forfeiture. Tenant's sole
obligation with respect to Landlord's obligations under the Master Lease shall
be TO USE ITS BEST EFFORTS AND EXERCISE DUE DILIGENCE in attempting to cause
Landlord to perform its obligations under the Master Lease for the benefit of
the Subtenant.
A. Incorporation By Reference. The terms and conditions of this Sublease
shall include various Sections of the Master Lease, which are incorporated into
this Sublease as if fully set forth, except that: (i) each reference in such
incorporated Sections to "Lease" shall be deemed a reference to "Sublease"; (ii)
each reference to the "Premises" shall be deemed a reference to the "Subleased
Premises"; (iii) each reference to "Landlord" and "Tenant" shall be deemed a
reference to "Tenant" and "Subtenant", respectively; (iv) with respect to work,
services, repairs, restoration, provision of insurance or the performance of any
other obligation of Landlord under the Master Lease, the sole obligation of
Tenant shall be to request the same in writing from Landlord as and when
requested to do so by Subtenant, and to use TENANT'S BEST EFFORTS AND EXERCISE
DUE DILIGENCE to obtain the Landlord's performance; (v) with respect to any
obligation of Subtenant to be performed under this Sublease, wherever the Master
Lease grants to Tenant a specified number of days to perform its obligations
under the Lease, Subtenant shall have the SAME NUMBER OF DAYS to perform the
obligation, including, without limitation, curing any defaults; and (vi) with
respect to any approval required to be obtained from the "Landlord" under the
Master Lease, such consent must be obtained from BOTH the Landlord and the
Tenant and the approval of Tenant may be withheld, if the Landlord's consent is
not obtained.
The Following paragraphs of the Master Lease are hereby incorporated
into this Sublease:
Basic Lease Information Sections 1.1(b), (c), (d), (e), (f), (g), (h),
(i), (j), (k), (t), (u), (v), (y), and Section 1.2;
Section 3.1, except that the first, second and last sentences hereby are
deleted and Section 3.2;
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Article 4,
Article 5, except that (i) the references to "Landlord" in the first and
third sentences of Section 5.1(b)(1), Section 5.1(b)(2), the first sentence of
Section 5.1(c)(2), the second, fourth, seventh and eight sentences of Section
5.2 and Section 5.3 shall mean only Landlord;
Article 6, except that references to "Landlord" in Sections 6.1 shall
mean only Landlord;
Articles 7 through 9;
Article 10, except that references to "Landlord" in the second sentence
shall mean only Landlord;
Article 11, except that references to "Landlord" in the third sentence
shall mean only Landlord;
Article 12, except that references to "Landlord" in Sections 12.1, 12.2,
12.3 and 12.4 shall mean only Landlord;
Articles 13 through 16;
Article 17, except that (i) references to "Landlord" shall mean only
Landlord, and (ii) Subtenant shall not exercise the termination right set forth
therein without providing prior written notice to Tenant;
Article 18, except that (i) references to "Landlord" shall mean only
Landlord, and (ii) Subtenant shall not exercise the termination right set forth
in Section (c) without providing prior written notice to Tenant;
Article 19, except that references to "Landlord" shall mean only
Landlord;
Articles 20 through 25, except that references to "Landlord" in Article
24 shall mean only Landlord;
Article 26, except that references to "Landlord" in the third sentence
shall mean only Landlord;
Article 27, except that (i) references to "Landlord" in the first
sentence of Section 27.7 shall mean only Landlord; (ii) Section 27.12 is
incorporated only for purposes of sending notices to Landlord; and (iii)
Sections 27.19, 27.21 and 27.28 hereby are deleted;
Exhibits A, B, D.
B. Assumption of Obligations: This Sublease is and all times shall be
subject and
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subordinate to the Master Lease and the rights of Landlord thereunder. Subtenant
hereby expressly assumes and agrees: (i) to comply with all provisions of the
Master Lease; (ii) to perform all obligations on the part of the "Tenant" to be
performed under the terms of the Master Lease during the term of this Sublease;
and (iii) to hold Tenant free and harmless of and from all liability, judgments,
costs, damages, claims, demands, and expenses (including reasonable attorneys'
and experts' fees) arising out of Subtenant's failure to comply with or to
perform Subtenant's obligations hereunder or the obligations of the "Tenant"
under the Master Lease as herein provided or to act or omit to act in any manner
which will constitute a breach of the Master Lease.
4. WARRANTY BY TENANT. Tenant warrants and represents to Subtenant that the
Master Lease has, ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT 2, not been
amended or modified except as expressly set forth herein, that Tenant is not
now, and as of the Sublease Commencement Date will not be, in default of any of
the provisions of the Master Lease, and that Tenant has no knowledge of any
claim by Landlord that Tenant is in default of any provisions of the Master
Lease AND THAT TENANT SHALL CONTINUE TO PERFORM ITS OBLIGATIONS UNDER THE MASTER
LEASE THROUGHOUT THE TERM OF THIS SUBLEASE, AND TO INDEMNIFY AND HOLD SUBTENANT
HARMLESS FROM ALL LIABILITY, JUDGEMENTS, COSTS, DAMAGES, CLAIMS, DEMANDS, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND EXPERTS' FEES) ARISING OUT OF
TENANT'S FAILURE TO COMPLY WITH TENANTS' OBLIGATIONS UNDER THE MASTER LEASE OR
THIS SUBLEASE.
5. ASSIGNMENT AND SUBLETTING. Subtenant shall not assign, sublet, encumber or
otherwise transfer any interest in this Sublease or any part of the Subleased
Premises (collectively referred to as a "Transfer"), EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF ARTICLE 9 OF THE MASTER LEASE, AND NOT without first obtaining
the written consent of Tenant, which shall not be unreasonably withheld or
delayed, AND OF LANDLORD. Tenant may condition its consent on obtaining any
required consent from Landlord, Subtenant satisfying any conditions on the
Transfer imposed by Landlord, and such other reasonable conditions that Tenant
may impose. No Transfer shall relieve Subtenant of any liability under this
Sublease notwithstanding Tenant's consent to such Transfer. Consent to any
Transfer shall not operate as a waiver of the necessity for Tenant's consent to
any subsequent Transfer. SUBTENANT SHALL PAY TO TENANT, AS ADDITIONAL RENT, ONE
HUNDRED PERCENT (100%) OF ALL EXCESS RENTS RECEIVED BY SUBTENANT. AS USED
HEREIN, THE TERM "EXCESS RENTS" SHALL MEAN ALL RENTS AND OTHER CONSIDERATION
PAYABLE BY A SUBTENANT OR ASSIGNEE TO SUBTENANT IN CONNECTION WITH THE
ASSIGNMENT OR SUBLET, LESS ALL REASONABLE MARKETING COSTS INCLUDING COMMISSIONS
AND TENANTS IMPROVEMENTS.
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As a condition to the Landlord's and Tenant's approval, if given, any potential
assignee or sublessee otherwise approved shall assume all obligations of
Subtenant under this Sublease and shall be jointly and severally liable with
Subtenant and any guarantor, if required, for the payment of rent and other
charges due hereunder and performance of all terms of this Sublease. In
connection with any Transfer, Subtenant shall provide Landlord and Tenant with
copies of all assignments, subleases and assumption instruments.
6. ADDITIONAL CHARGES. AS LIMITED BY SECTION 3 OF THIS SUBLEASE, THE
PREMISES WILL BE FURNISHED WITH THE SERVICES SET FORTH IN ARTICLE 12 AND
JANITORIAL AND OTHER SERVICES SET FORTH IN ARTICLE 12 WILL BE PROVIDED TO THE
BUILDING AND COMMON AREAS. SUBTENANT SHALL BE RESPONSIBLE FOR PROVIDING
JANITORIAL SERVICES FOR THE PREMISES. If Tenant shall be charged for additional
rent or other sums pursuant to ARTICLE 5 of the Master Lease, Subtenant shall be
liable for it prorata share stated in Section 1.i above of such additional rent
or sums. If any such rent or sums shall be due to excessive use by Subtenant of
utilities or services provided to the Subleased Premises, as reasonably
determined by Tenant, such excess shall be paid in its entirety by Subtenant. If
Subtenant shall procure any additional service for the Subleased Premises,
including but not limited to after-hour HVAC services, Subtenant shall pay for
same at the rates charged by Landlord and shall make such payment to Tenant or
Landlord, as Tenant shall direct. Any rent or other sums payable by Subtenant
under this section shall be additional rent and collectible as such. If Tenant
shall receive any refund for additional rent or sums paid under the Master
Lease, Subtenant shall be entitled to the return of so much thereof as shall be
attributable to prior payments by Subtenant. Tenant shall, upon request by
Subtenant, furnish Subtenant with copies of all statements submitted by Landlord
of actual or estimated additional rent or sums.
Notwithstanding anything herein contained, the only services or utilities to
which Subtenant is entitled under this Sublease are those to which Tenant is
entitled under the Master Lease.
7. GENERAL
a. BROKER'S FEES. TENANT AND Subtenant represent and warrant to EACH
OTHER that THEY HAVE 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 Sublease other than as disclosed in Section 10 or elsewhere in the
Sublease. TENANT AND Subtenant agree to indemnify and hold EACH OTHER harmless
against any loss, cost, liability or expense incurred by THE 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 OTHER.
b. ENTIRE AGREEMENT. This Sublease, which incorporates portions of the
Master Lease, contains all of the covenants and agreements between Tenant and
Subtenant relating to the Subleased Premises. No prior or contemporaneous
agreements or understanding pertaining to the Sublease shall be valid or of any
force or effect and the covenants and agreements of this
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Sublease shall not be altered, modified, or added to except in writing signed by
Tenant and Subtenant.
c. NO RECORDATION. This Sublease shall not be recorded by either party.
d. SEVERABILITY. Any provision of this Sublease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision of this Sublease.
e. GOVERNING LAW. This Sublease shall be governed by and construed in
accordance with the laws of the State of Washington.
f. SUBMISSION OF SUBLEASE FORM NOT AN OFFER. One party's submission of
this Sublease to the other for review shall not constitute an offer to sublease
the Subleased Premises. This Sublease shall not become effective and binding
upon Tenant and Subtenant until it has been fully signed by both Tenant and
Subtenant, and consented to IN WRITING by Landlord.
g. AUTHORITY OF PARTIES. Any individual signing this Sublease on behalf
of EITHER TENANT OR SUBTENANT represents and warrants to the other that such
individual has authority to do so and, upon such individual's execution, that
this Sublease shall be binding upon and enforceable against the party on behalf
of whom such individual is signing.
8. EXHIBITS AND RIDERS. The following exhibits and riders are made a part of
this Sublease:
Exhibit 1 Legal Description of Master Premises
Exhibit 2 Master Lease
Exhibit 3 Outline of Subleased Premises
9. AGENCY DISCLOSURE. At the signing of this Sublease
Tenant's Agent LEIGH CALLAGHAN OF COLLIERS INTERNATIONAL
-----------------------------------------------------------------
(Insert name of Licensee and Company name as licensed)
represented BOTH TENANT AND SUBTENANT
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(Insert Tenant, Subtenant, both Tenant and Subtenant,
or neither Tenant nor Subtenant)
and Subtenant's Licensee LEIGH CALLAGHAN OF COLLIERS INTERNATIONAL
--------------------------------------------------------
(Insert name of Licensee and Company name as licensed)
represented BOTH TENANT AND SUBTENANT
--------------------------------------------------------------------
(Insert Tenant, Subtenant, both Tenant and Subtenant,
or neither Tenant nor
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Subtenant)
Tenant's Agent and Subtenant's Licensee are the same salesperson representing
both parties, AND both Tenant and Subtenant confirm THEIR consent to that
salesperson and his/her Broker acting as dual agents. Tenant and Subtenant
confirm their receipt of the pamphlet entitled "The Law of Real Estate Agency."
10. BROKER PROVISIONS AND COMMISSION AGREEMENT.
Tenant shall pay a commission to Colliers ("Broker") in the amount stated in a
separate listing agreement or, if there is no listing agreement, then (check
one):
[X] $_______ / TWO PERCENT (2%) of the gross rent payable pursuant to Section
1(d).
Tenant's Successor shall be obligated to pay any unpaid commissions upon any
Transfer of this Sublease and any such Transfer shall not release the
transferrer from liability to pay such commissions. If Tenant's Broker is
required to employee an attorney to enforce or declare its rights under this
Section, the prevailing party in any such action shall be entitled to recover
its reasonable attorneys' fees, in an amount determined by the court.
TENANT'S BROKER AND AGENT AND SUBTENANT'S BROKER AND LICENSEE HAVE MADE NO
REPRESENTATIONS OR WARRANTIES CONCERNING THIS SUBLEASED PREMISES, THE MEANING
OF THE TERMS AND CONDITIONS OF THIS SUBLEASE, LANDLORD'S TENANT'S OR SUBTENANT'S
FINANCIAL STANDING, ZONING, COMPLIANCE OF THE SUBLEASED PREMISES WITH APPLICABLE
LAWS, SERVICE OR CAPACITY OF UTILITIES, OPERATING EXPENSES, OR HAZARDOUS
MATERIALS. LANDLORD, TENANT AND SUBTENANT ARE EACH ADVISED TO SEEK INDEPENDENT
LEGAL ADVICE ON THESE AND OTHER MATTERS ARISING UNDER THIS SUBLEASE.
11. CONSENT BY LANDLORD. This Sublease shall be of no force or effect unless
consented to by Landlord IN WRITING within FIFTEEN (15) days of execution BY
BOTH PARTIES. IF TENANT, USING REASONABLE EFFORTS, HAS NOT OBTAINED LANDLORD'S
CONSENT WITHIN THE FIFTEEN (15) DAY PERIOD, EITHER PARTY MAY TERMINATE THIS
SUBLEASE, AND TENANT SHALL RETURN TO SUBTENANT ALL SUMS PAID BY SUBTENANT TO
TENANT IN CONNECTION WITH ITS EXECUTION OF THIS SUBLEASE.
12. FURNITURE. The parties acknowledge and agree that the furniture located on
the Subleased Premises and more particularly described on Exhibit F to the
Master Lease is owned by Landlord and PROVIDED AT NO CHARGE to Tenant
("Furniture") under this Sublease pursuant to rider 35 of the Lease. Subtenant
hereby assumes all risks and obligations set forth in Rider 35. SUBTENANT, IN
ITS SOLE DISCRETION, MAY DECIDE NOT TO USE THE FURNITURE, HOWEVER, IF SUBTENANT
CHOOSES NOT TO USE THE FURNITURE, SUBTENANT MUST PAY TO HAVE THE FURNITURE
PROFESSIONALLY
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DISASSEMBLED. TENANT SHALL BE RESPONSIBLE FOR ALL COSTS ASSOCIATED WITH MOVING
AND STORAGE THE DISASSEMBLED FURNITURE TO A LOCATION OUT OF THE PREMISES. TENANT
SHALL BE RESPONSIBLE FOR MOVING AND STORING THE FURNITURE IN A TIMELY MANNER.
13. NO OPTION TO EXTEND. The parties acknowledge that Subtenant shall have no
option to extend the Term of the Sublease.
14. LATE CHARGE. If Subtenant fails to pay Tenant any amount due hereunder
within seven (7) days after the due date, Subtenant shall pay Tenant upon demand
a late charge equal to ONE PERCENT (1%) of the delinquent amount. In addition,
Subtenant shall pay to Tenant interest on all amounts due, at the rate of
fifteen percent (15%) per annum or the maximum rate allowed by law, whichever is
less (the "Interest Rate"), from the due date to and including the date of the
payment. The parties agree that the foregoing late charge represents a
reasonable estimate of the costs and expense which Tenant will incur in
processing each delinquent payment. Tenant's acceptance of any interest or late
charge shall not waive Subtenant's default in failing to pay the delinquent
amounts.
15. REPAIRS. TENANT SHALL HAVE THE SUBLEASED PREMISES CLEANED BY A JANITOR TO A
LEVEL CONSISTENT WITH THE PREMISES' CURRENT JANITORIAL SPECIFICATIONS WITH
WITHIN ONE (1) WEEK PRIOR TO THE SUBLEASE COMMENCEMENT DATE. EXCEPT AS SET FORTH
IN THIS PARAGRAPH, Subtenant shall accept the Subleased Premises in its
then-existing, condition, and Tenant shall have no obligation whatsoever to make
or pay the costs of any alterations, improvements or repairs to the Subleased
Premises (after the Subtenant accepts the Subleased Premises,) including,
without limitation, any improvement or repair required to comply with any law,
regulation, building code or ordinance (including, without limitation, the
Americans With Disabilities Act of 1990 ("ADA"). SUBTENANT SHALL LOOK SOLELY TO
THE LANDLORD FOR THE PERFORMANCE OF ANY REPAIRS REQUIRED TO BE PERFORMED BY
LANDLORD UNDER THE TERMS OF THE MASTER LEASE. IT IS AGREED THAT BOTH SUBTENANT
AND TENANT SHALL WALK THROUGH THE PREMISES TO VERIFY THE EXISTENCE OF ANY AREAS
IN NEEDS OF REPAIR PRIOR TO SUBTENANT OCCUPANCY SHALL BE REPAIRED BY TENANT
AND/OR LANDLORD.
16. INDEMNITIES
A. SUBTENANT'S INDEMNIFICATION. Except to the extent caused by Tenant's
negligence or willful misconduct, Subtenant shall indemnify, protect, defend
with counsel reasonably acceptable to Tenant and hold harmless Tenant from and
against any and all claims, liabilities, judgments, causes of action, damages,
costs and expenses (including reasonable attorneys' and experts' fees), caused
by or arising in connection with: (i) use, occupancy or condition of the
Subleased Premises, (ii) the negligence or willful misconduct of Subtenant or
its employees, contractors, agents or invitees, or (iii) a breach of Subtenant's
obligations under this Sublease; or (iv) a breach of Subtenant's obligations
under the Master Lease; or (v) any
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Hazardous Substances (as defined in Section 8.2 of the master lease) used,
stored, released, disposed, generated or transported by Subtenant, its agents,
employees, contractors or invitees in, on or about the Subleased Premises.
B. TENANT'S INDEMNIFICATION. Except to the extent caused by Subtenant's
negligence or willful misconduct, Tenant shall indemnify, protect, defend with
counsel reasonably acceptable to SUBTENANT and hold SUBTENANT harmless from and
against any and all claims, liabilities, judgments, causes of action, damages
costs and expenses (including reasonable attorneys' and experts' fees ), caused
by or arising in connection with: (i) a breach of Tenant's obligations under
this Sublease or (ii) a breach of Tenant's obligations as Tenant under the
Master Lease , or (iii) the negligence or willful misconduct of Tenant, its
employees, contractors, agents or invitees occurring on or about the Subleased
Premises; or (iv) Hazardous Substances used, stored or disposed of on or about
the Subleased Premises by Tenant prior to the Commencement Date.
17. RIGHT TO CURE DEFAULTS. If Subtenant fails to pay any sum of money to
Tenant, or fails to perform any other act on its part to be performed hereunder,
then Tenant may, but shall not be obligated to, make such payment or perform
such act. All such sums paid, and all costs and expenses of performing any such
act, shall be deemed additional rent payable by Subtenant to Tenant upon demand,
together with interest thereon at the Interest Rate from the date of the
expenditure until repaid.
18. USE. Subtenant may use the Subleased Premises only for the uses permitted in
Section 1 (g) of this Sublease and no other purpose. Consistent with the
permitted use of the Subleased Premises as a photography studio, Subtenant shall
be permitted to install black canvas window coverings on all windows it deems
necessary. Subtenant shall comply with all reasonable rules and regulations
promulgated from time to time by Landlord.
19. EFFECT OF CONVEYANCE. As used in this Sublease, the term "Tenant" means the
holder of the tenant's interest under the master Lease. In the event of any
transfer of said tenant's interest, the Tenant shall be and hereby is entirely
relieved of all covenants and obligations of the Tenant hereunder, and it shall
be deemed an construed, without further agreement between the parties, that the
transferee has assumed and shall carry out all covenants
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and obligations thereafter to be performed by Tenant hereunder. Tenant shall
transfer and deliver any security of Subtenant to the transferee of said
tenant's interest in the Master Lease, and thereupon the Tenant shall be
discharged from any further liability with respect thereto.
20. IMPROVEMENTS. No alteration or improvements shall be made to the Subleased
Premises except in accordance with this Sublease and the Master Lease, and with
the prior written consent of both Landlord and Tenant, with the Landlord and
Tenants consent not to be unreasonably withheld. Upon the expiration or earlier
termination of this Sublease, Subtenant shall be responsible for removing any
improvements installed in the Subleased Premises by Subtenant, and restoring the
Subleased Premises to its condition as of the Commencement Date, unless Landlord
notifies Subtenant in writing that such improvements may remain. This includes
replacing any carpet that is removed by the Subtenant during the term of this
Sublease. At the time Subtenant requests Landlord and Tenants approval to any
proposed alterations, additions or improvements to the Premises, Subtenant may
also request in writing that Tenant and Landlord confirm whether or not Tenant
and Landlord will require the proposed alternations, additions or improvements
to be removed from the Premises pursuant to the proceeding sentence.
21. RELEASE AND WAIVER OF SUBROGATION. Tenant and Subtenant hereby release each
other from any injury to persons, damage to property, or loss of any kind which
is caused by or results from any risk insured against under any valid and
collectable insurance policy carried by either party, which contains a waiver of
subrogation by the insurer; provided, however, that such liability shall be
released only to the extent that the damages are covered by such insurance, and
only if the insurance permits such partial release. This release shall be in
effect only so long as the applicable insurance policy contains a clause to the
effect that this release shall not affect the right of the insured to recover
under such policy. Each party shall use its best efforts to cause each insurance
policy obtained by it to provide that the insurer waives all right of recovery
against the other party and its agents and employees in connection with any
damage or injury covered by such policy, and each party shall notify the other
party if it is unable to obtain such a waiver of subrogation. Tenant shall not
be liable to Subtenant, nor shall Subtenant be entitled to terminate this
Sublease or to abate Rent for any reason, including without limitation: (i)
Failure or interruption of any utility system or service; or (ii) failure of
Landlord to maintain the Subleased Premises as may be required under the Mater
Lease. If Tenant and Subtenant are corporations or other forms of business
entity, then obligations of Tenant and Subtenant shall not constitute the
personal obligations of the officers, directors, trustees, partners, joint
ventures, members, owners, stockholders or other principals or representatives
of such business entity.
22. DEFAULT. Subtenant's performance of each of its obligations under this
Sublease constitutes a condition as well as a covenant, and Subtenant's right to
continue in possession of the Subleased Premises is conditioned upon such
performance. In addition, Subtenant shall be in material default of its
obligations under this Sublease if Subtenant is responsible for the occurrence
of any of the events of default set forth in Section 25.1 of the Master Lease.
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23. REMEDIES. In the event of any default by Subtenant under this Sublease
(including, without limitation, a default pursuant to Section 25.1 of the
Master Lease), Tenant shall have all remedies provided by applicable law,
including, without limitation, all rights pursuant to Section 25.2 of the Master
Lease. Tenant may resort to its remedies cumulatively or in the alternative.
24. SURRENDER. On or before the Sublease Termination Date, Subtenant shall
remove all of its trade fixtures and shall surrender the Subleased Premises to
Tenant in the condition received, free of Hazardous Substances, reasonable wear
and tear excepted. If the Subleased Premises are not so surrendered, then
Subtenant shall be liable to Tenant for all costs incurred by Tenant in
returning the Subleased Premises to the required condition, plus interest
thereon at the Interest Rate. Subtenant shall indemnify, defend, protect and
hold harmless Tenant against any and all claims, liabilities, judgments, causes
of action, damages, costs, and expenses (including attorneys' and experts' fees)
resulting from Subtenant's delay in surrendering the Subleased Premises. IF
SUBTENANT IS NOT IN DEFAULT AT THE EXPIRATION OR TERMINATION OF THIS SUBLEASE,
TENANT SHALL PROMPTLY RETURN THE SECURITY DEPOSIT TO SUBTENANT WITHIN THIRTY
(30) DAYS AFTER THE EXPIRATION OR TERMINATION OF THIS SUBLEASE.
25. SEVERABILITY. If any term of this Sublease is held to be invalid or
unenforceable by any court of competent jurisdiction, then the remainder of
this Sublease shall remain in full force and effect to the fullest extent
possible under the law, and shall not be affected or impaired.
26. AMENDMENT. This Sublease may not be amended except by the written agreement
of all parties hereto.
27. ATTORNEYS' FEES. If either Tenant or Subtenant shall bring any action or
legal proceeding to enforce, protect or establish any term or covenant of this
Sublease, the prevailing party shall be entitled to recover its reasonable
attorneys' fees, court costs and experts' fees as may be fixed by the court.
"Prevailing party" as used in this Sublease includes a party who dismisses an
action for recovery hereunder in exchange for sums allegedly due, performance
of covenants allegedly breached or consideration SUBSTANTIALLY equal to the
relief sought in the action.
28. SUCCESSORS AND ASSIGNS: THE COMMENTS AND AGREEMENTS HEREIN SHALL BIND AND
INURE TO THE BENEFIT OF TENANT, SUBTENANT AND THEIR SUCCESSORS AND ASSIGNS.
29. GOVERNING LAW: THIS SUBLEASE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF WASHINGTON.
30. QUIET ENJOYMENT: TENANT COVENANTS AND AGREES THAT IF SUBTENANT PERFORMS ALL
THE COVENANTS AND CONDITIONS UNDER THIS SUBLEASE, SUBTENANT SHALL AND MAY
PEACEABLY AND QUIETLY HAVE, HOLD AND ENJOY THE PREMISES.
31. COUNTERPART EXECUTION: THIS SUBLEASE MAY BE EXECUTED BY TENANT AND
SUBTENANT WITH ONE OR MORE COUNTERPARTS, AND ALL SUCH COUNTERPARTS SHALL
CONSTITUTE A
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<PAGE> 13
SINGLE INSTRUMENT.
32. AMENDMENT OF MASTER LEASE: EXCEPT AS TO PORTIONS OF THE BUILDING WHICH ARE
NOT PART OF THE SUBLEASE PREMISES, TENANT SHALL NOT AMEND OR OTHERWISE
MODIFY THE MASTER LEASE WITHOUT APPROVAL OF SUBTENANT.
TENANT: SVG DISTRIBUTION, INC. SUBTENANT: PHOTODISC, INC.
A CALIFORNIA CORPORATION A WASHINGTON CORPORATION
By: By:
---------------------------------- -----------------------------------
Richard Silveira
Its: PRESIDENT Its:
----------------------------------
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<PAGE> 14
LANDLORD'S CONSENT
Landlord consents to the foregoing Sublease without waiver of any
restriction in the Master Lease concerning further assignment or subletting.
Landlord represents that the Master Lease, ATTACHED HERETO AND INCORPORATED
HEREIN AS EXHIBIT 2, constitutes the entire agreement of Landlord and Tenant
concerning the leasing of the Master Premises, and has not been amended or
modified except as expressly set forth in Exhibit 2. Landlord further
represents that, to Landlord's knowledge, Tenant is currently in full
compliance with its obligations under the Master Lease.
LANDLORD: 1000 INVESTMENT ASSOCIATES
LANDLORD:
By:
-----------------------------------------
Its:
-----------------------------------------
14
<PAGE> 15
STATE OF WASHINGTON )
) ss.
COUNTY OF ____________________)
I certify that I know or have satisfactory evidence that
_______________________ is the person who appeared before me and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute the instrument and acknowledged as the ________________
of _________________ to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
DATED: _____________________
(Seal or stamp) ____________________________________________
Printed Name: ______________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ____________________
My Commission expires: _____________________
STATE OF WASHINGTON )
) ss.
COUNTY OF ____________________)
I certify that I know or have satisfactory evidence that
_______________________ is the person who appeared before me and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute the instrument and acknowledged as the ________________
of _________________ to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
DATED: _____________________
(Seal or stamp) ____________________________________________
Printed Name: ______________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ____________________
My Commission expires: _____________________
16
<PAGE> 16
STATE OF WASHINGTON )
) ss.
COUNTY OF ____________________)
I certify that I know or have satisfactory evidence that
_______________________ is the person who appeared before me and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute the instrument and acknowledged it as the ________________
of _________________ to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
DATED: _____________________, ____________.
(Seal or stamp) ____________________________________________
Printed Name: ______________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ____________________
____________________________________________
My Commission expires: _____________________
STATE OF WASHINGTON )
) ss.
COUNTY OF ____________________)
I certify that I know or have satisfactory evidence that
_______________________ is the person who appeared before me and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute the instrument and acknowledged it as the ________________
of _________________ to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.
DATED: _____________________, ___________.
(Seal or stamp) ____________________________________________
Printed Name: ______________________________
NOTARY PUBLIC in and for the State of
Washington, residing at ____________________
____________________________________________
My Commission expires: _____________________
15
<PAGE> 17
STATE OF WASHINGTON )
) ss.
COUNTY OF ____________________ )
I certify that I know or have satisfactory evidence that ________________
is the person who appeared before me and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute
the instrument and acknowledged it as the __________________________________ of
_____________________________ to be the free and voluntary act of such party
for the uses and purposes mentioned in the instrument.
DATED: ____________________________________, ______________________.
(Seal or stamp)
_________________________________________________
Printed Name: ___________________________________
NOTARY PUBLIC in and for the State of Washington,
residing at __________________________
My Commission expires: __________________________
STATE OF WASHINGTON )
) ss.
COUNTY OF ____________________ )
I certify that I know or have satisfactory evidence that ________________
is the person who appeared before me and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute
the instrument and acknowledged it as the __________________________________ of
_____________________________ to be the free and voluntary act of such party
for the uses and purposes mentioned in the instrument.
DATED: ____________________________________, ______________________.
(Seal or stamp)
_________________________________________________
Printed Name: ___________________________________
NOTARY PUBLIC in and for the State of Washington,
residing at __________________________
My Commission expires: __________________________
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<PAGE> 18
SUBLEASE AGREEMENT
(CONTINUED)
EXHIBIT 1
[Legal Description of Master Premises]
LEGAL DESCRIPTION OF THE LAND
Lots 1,2,3 and 4, Block 39, Heirs of Sarah A. Bell's Second Addition as recorded
in Volume 1 of Plats, Page 121, Records of King County, Washington together with
a portion of the vacated alley adjoining and further outlined on Exhibit "A"
attached hereto and made a part of this Lease.
18
<PAGE> 19
SUBLEASE AGREEMENT
(CONTINUED)
EXHIBIT 2
[Master Lease]
19
<PAGE> 20
SUBLEASE AGREEMENT
(CONTINUED)
EXHIBIT 3
[Outline of the Subleased Premises]
20