AN ORDINANCE relating to the Seattle Center Department; authorizing execution of a lease with the Seattle International Film Festival Group for space in the Northwest Rooms at Seattle Center.

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. As requested by the Seattle Center Director and recommended by the Mayor, the Seattle Center Director or his designee is authorized to execute, for and on behalf of The City of Seattle, a lease with the Seattle International Film Festival Group, substantially in the form of the agreement attached hereto and identified as "LEASE" (Attachment 1), under which the Seattle International Film Festival Group shall lease certain space in the Northwest Rooms at Seattle Center for a ten-year term.

Section 2. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and confirmed.

Section 3. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the ____ day of ________________________, 2008, and signed by me in open session in authentication of its passage this

_____ day of ___________________, 2008.

_________________________________

President __________of the City Council

Approved by me this ____ day of _____________________, 2008.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of __________________________, 2008.

____________________________________

City Clerk

(Seal)

Attachment 1: Lease Between the City of Seattle and the Seattle International Film Festival Group

Ned Dunn/ND

CEN SIFF Lease ORD)

April 10, 2008

Version #1

Form Last Revised on December 31, 2007 1

Attachment 1

LEASE

THIS LEASE (the "Lease") is entered into this ___ day of ________, by and between CITY OF SEATTLE ("City"), a municipal corporation of the State of Washington, acting by and through the Director of the Seattle Center Department ("Director"), and the Seattle International Film Festival Group (Cinema Seattle) ("SIFF"), a Washington nonprofit corporation.

RECITALS

WHEREAS, Seattle Center, a City of Seattle department, supported by the people of Seattle, is home to the finest cultural and educational organizations, sports teams, festivals, community programs and educational facilities and exists to delight and inspire the human spirit in each person and bring us together as a rich and varied community; and

WHEREAS, SIFF is a non-profit corporation whose mission statement is attached hereto as EXHIBIT A; and

WHEREAS, after discussions between Seattle Center and SIFF representatives, Seattle Center confirmed that SIFF would contribute to the Seattle Center mission and expressed interest in having SIFF as a campus resident organization; and

WHEREAS, on December 13, 2006, Seattle Center and SIFF concluded an agreement for the use of the Nesholm Family Lecture Hall at Marion Oliver McCaw Hall as a year-round screening facility starting in January of 2007; and

WHEREAS, in the 2007-2012 Adopted Capital Improvement Program appropriated Two Hundred Thousand Dollars ($200,000.00) for improvements to the Seattle Center Northwest Rooms (Alki Room in particular) to prepare the facility for SIFF's use as a film center and offices; and

WHEREAS, release of the aforementioned funds by the City is conditioned on SIFF demonstrating, prior to the beginning of construction, that it has raised sufficient funds for tenant improvements to the Alki Room to prepare the facility for SIFF's use as a film center and offices.

NOW, THEREFORE, in consideration of the rents to be paid and the covenants and agreements hereinafter provided which City and SIFF agree to keep and perform, City and SIFF hereby agree as follows:

1. PREMISES

A. Grant:

Subject to all of the terms and conditions herein, City hereby leases to SIFF and SIFF leases from City, a portion of those certain premises commonly known as the "Alki Room", located in the Northwest Rooms building at Seattle Center (the "Building") and containing approximately 9,556 square feet of space (the "Premises"). The Premises are located on a portion of the land legally described as:

Lots 1 through 12, Block 32 and Lots 1 through 12, Block 35, D.T. Denny's Home Addition to City of Seattle, according to the plat thereof recorded in Volume 3 of Plats, page 115, in King County, Washington; together with that portion of Warren Avenue North vacated by City of Seattle Ordinance No. 88603; and that portion of alley vacated by City of Seattle Ordinance No. 8520 which attached to said premises by operation of law.

The floor plan for the Premises is attached as Exhibit B. SIFF acknowledges and agrees that those portions of the Alki Room located on the Main Level on Exhibit B and indicated with shading and labeled as "Seattle Center Operational Spaces" will remain under the sole control of Seattle Center and are not included in the Premises.

The mailing address for this location will be:

SIFF Group

Seattle Center

305 Harrison

Seattle, WA 98109

B. Condition of Premises: SIFF accepts the Premises in their condition as of the Commencement Date defined in Section 2 AS IS, with all defects, and assumes all risk that one or more defects exist in the Premises. City makes no warranties or representations of any kind, express or implied, with respect to the condition of the Premises or their suitability for SIFF's purposes other than as specified in this Lease. SIFF agrees that any express or implied representations, statements or warranties made by or on behalf of the City prior to the Commencement Date, unless expressly set forth in this Agreement, have been revoked and withdrawn and have no force or effect whatsoever.

C. Use: SIFF shall use the Premises for its administrative and business offices and for one or more of the following: a lecture space, a small screening room, a reference library and a film school, all of which may be made generally available to the public, including for an admission fee, and for other incidental and reasonably related activities such as a box office and/or gift shop. SIFF shall not use the Premises for any other purpose without the Director's prior, written approval, which approval may be granted, withheld or conditioned in the Director's sole discretion.

SIFF agrees to conduct its activities in a manner that is consistent with the Seattle Center Vision Statement, Exhibit C hereto, as the Director may reasonably determine, and to comply with the Seattle Center Rules and Regulations regarding the use of the Premises and Seattle Center grounds, which Rules and Regulations are attached as Exhibit D. Notwithstanding the foregoing, if there is any conflict between such Rules and Regulations and the express provisions of this Lease, the terms of this Lease shall control. City shall use its best efforts to notify SIFF of any changes to the Seattle Center Vision Statement or Seattle Center Rules and Regulations prior to the effective date thereof.

D. Nonexclusive License to Use Common Areas: Throughout the Term, SIFF and its licensees, patrons, invitees and employees shall have the non-exclusive right to use the Seattle Center common areas as from time to time constituted, which use shall be in common with all other visitors and users of the Seattle Center and subject to such rules and regulations for the use thereof as the Director may promulgate from time to time (subject to the terms of Section 1(C) above). For the purposes of this Lease, the term "common areas" means and includes any Seattle Center area designated by the Director as being for the general use of tenants, concessionaires, licensees, patrons, employees, and invitees of the Seattle Center and not within the exclusive control of any tenant or licensee. Common Areas include but are not limited to the immediate periphery of the Premises, parking areas, landscaped areas, areaways, roads, walks, corridors, malls, public toilets, public lounges, public stairs, ramps, elevators, escalators and shelters.

SIFF acknowledges that the Common Areas abutting the Premises are for the enjoyment of all and shall at all times be respectful of the public's right to use them without fear of disturbance or bother. SIFF agrees to discourage its licensees, patrons, invitees, customers and employees from smoking in this area and nearby Common Areas and to work with Seattle Center staff to enforce smoking regulations.

2. LEASE TERM

This Lease shall commence on the later of (i) September 15, 2008, or (ii) the date the City of Seattle's Department of Planning and Development ("DPD") issues SIFF a building permit for the Initial Improvements, defined in Section 3 (the "Commencement Date"), and shall terminate on December 31, 2018 (the "Term"). Notwithstanding the foregoing, unless the Director agrees otherwise, this Lease shall automatically terminate on December 31, 2008, if by that date (i) the parties have not executed the Construction Agreement described in Section 3; or (ii) SIFF has not obtained a building permit for the Initial Improvements.

The parties shall confirm the actual Commencement Date by written addendum, which shall be incorporated into this Lease without the need for formal amendment.

3. INITIAL IMPROVEMENTS AND SUBSEQUENT ALTERATIONS

A. Initial Improvements: It is a fundamental purpose of this Lease that SIFF constructs the tenant improvements generally described on the attached Exhibit E (the "Initial Improvements") and which are anticipated to cost approximately $1,000,000.00. The parties' rights and obligations with respect to the construction of the Initial Improvements shall be contained in a separate construction agreement (the "Construction Agreement") that the parties shall execute before SIFF enters into a construction contract for the Initial Improvements. Such Construction Agreement shall include a requirement that prior to commencing the Initial Improvements, SIFF shall have demonstrated to the satisfaction of the City's Finance Director and the Seattle Center Director that it has sufficient funds to complete the Initial Improvements.

City acknowledges that as part of the Initial Improvements SIFF may require additional HVAC facilities for proper operation of certain film exhibition equipment in the Premises and City agrees that it will not unreasonably withhold permission for such installation. City further agrees that SIFF may install an alternative entrance on the north side of the Premises to facilitate public access to a screening room or public meeting facility and that City will not unreasonably withhold permission for building such alternative ingress or egress. SIFF will be responsible, at its own expense, for removing and/or replacing to City's satisfaction any existing plantings or trees, or structural elements of the exterior garbage/recycling enclosure on the north side of the Premises, or any other existing element of the Seattle Center common areas that are affected by this alternative entrance. No consent will be required for installation of non-structural fixtures or equipment or repairs and replacement of equipment and related support systems, such as dedicated HVAC or security.

B. Subsequent Alterations: Following construction of the Initial Improvements SIFF shall not make any improvements to the Premises without first obtaining the Director's written permission, which permission may be granted, withheld or conditioned in the Director's sole discretion.

C. Improvements to Become City Property: All approved modifications, alterations, additions or improvements (but not fixtures or equipment) shall, at the expiration or earlier termination of the Lease, become the property of City and remain upon and be surrendered with the Premises. In no event will SIFF's film exhibition equipment be deemed an improvement.

D. Damage: In undertaking any repairs, modifications, alterations, additions or improvements, SIFF shall ensure that it and each of its contractors and agents protects from damage or destruction private and public property on or in the vicinity of the Premises that is not scheduled for repair, replacement or removal. Any property that SIFF or its contractors or agents damage in the course of any repair, modification, alteration, addition or improvement shall be promptly repaired or replaced at SIFF's expense.

4. RENT

A. Annual Rent: Except as provided in Section 4.B., beginning on the date SIFF receives a certificate of occupancy for the Premises (the "Occupancy Date"), which the parties anticipate to be January 1, 2009, SIFF shall pay City Annual Rent in the amounts shown on the table below. As used in the table, "adjusted rent" means Rent increased by the Consumer Price Index (CPI) as provided in Section 4.C. Annual Rent shall be payable in twelve (12) equal monthly installments, in advance, with the first installment due on the Occupancy Date and thereafter, on the first day of each month throughout the Term.

Year Annual Rent 1/1/09 12/31/09 $35,000.00 1/1/10 12/31/10 $35,000.00 1/1/11 12/31/11 $35,000.00 1/1/12 12/31/12 $35,000.00 1/1/13 12/31/13 $35,000.00 1/1/14 12/31/14 Year 5 adjusted rent plus $3,000 1/1/15 12/31/15 Year 6 adjusted rent plus $3,000 1/1/16 12/31/16 Year 7 adjusted rent plus $3,000 1/1/17 12/31/17 Year 8 adjusted rent plus $3,000 1/1/18 12/31/18 Year 9 adjusted rent plus $3,000

B. Rent during Construction: Beginning on the Commencement Date and thereafter, on the first day of each month until the Occupancy Date, SIFF shall pay City, in advance, Interim Rent of $1,458.50 per month. If either the Commencement Date or the Occupancy Date falls on other than the first day of a month, the Rent for such month(s) shall be prorated or adjusted, as the case may be, to reflect the actual number of days for which Interim or Annual Rent is due and payable.

C. CPI Adjustment: Beginning January 1, 2014, and on the first day of each January thereafter throughout the Term, Annual Rent shall increase by the same percentage as the increase in the Consumer Price Index for All Urban Consumers in the Seattle-Tacoma Metropolitan Area, published by the Bureau of Labor Statistics, United States Department of Labor (the "Index") during the preceding year, if any. If, during any year in which CPI increases apply the Index is negative, then the Rent shall remain the same as it was during the immediately preceding calendar year. If there is any change in the Index base or if the Index is discontinued, the Director shall select a substitute index of comparable statistics on the cost of living for the locality in which the Premises are located as shall be computed by an agency of the United States or by a responsible financial periodical or other recognized authority.

D. Operating Expenses: In addition to Rent, SIFF shall pay City monthly, upon invoice, the Operating Expenses for the Premises, including but not limited to, the following:

1. All City expenses for HVAC utility services as well as for maintenance and repair work to the HVAC system located in and/or serving the Premises.

2. SIFF's pro rata share of the cost of all other utilities serving the Premises and not separately metered, including solid waste removal and recycling.

3. The cost of monitoring, repairing and confidence testing the sprinkler and fire alarm system serving the Premises.

4. The cost of all maintenance or repair work for which SIFF is responsible but which the City performed at SIFF's request.

E. Time and Manner of Payment. SIFF shall pay Rent and Operating Expenses in lawful money of the United States and, unless otherwise specified in this Lease or other written notice from City, deliver the same to the City of Seattle, c/o Seattle Center Fiscal Services & Accounting, 305 Harrison Street, Seattle, Washington, 98109.

5. LATE CHARGES; INTEREST

If SIFF fails to pay any sums due under this Lease within five (5) days after the due date, a service charge of Fifty Dollars ($50.00) or such larger sum as may be established by ordinance, shall be assessed for each month or portion of a month that the delinquency continues. Such assessment(s) shall be immediately due and payable. In addition, interest on such delinquent amount(s) shall accrue at the rate of one and one-half percent (1 1/2 %) per month from the date due, until paid. If any check for payment is returned for insufficient funds, SIFF shall pay an administrative charge of $20.00 and thereafter, City may require SIFF to pay Rent by cashier's or certified check.

6. CITY AND CITY-AUTHORIZED THIRD PARTY USE OF PREMISES

A. City Use of Premises: City reserves and retains the right to use, and to authorize others to use, the Premises' public areas during the time periods and for the purposes specified in Section 4.F. SIFF shall not charge the City for such use, nor shall SIFF be entitled to any reduction in Rent therefor.

B. Use of SIFF Office Space and Equipment: City's right to use and to authorize others to use the Premises does not include the right to use SIFF's private administrative offices unless the parties agree otherwise. Nor does it include the right to use SIFF's equipment. If a user requires operation of such equipment and SIFF consents to such operation, it shall be operated by SIFF personnel or, at SIFF's election, by qualified City personnel under SIFF's supervision. City shall reimburse SIFF or shall obligate the authorized user to reimburse SIFF for SIFF's direct costs for such operation or supervision plus incidental expenses actually incurred, within thirty (30) days of SIFF's invoice. SIFF's costs may include wages for SIFF personnel at the rates SIFF normally pays for such work, except that if a SIFF volunteer performs the work, SIFF may charge the Seattle Center standard rate for such volunteer labor.

C. City Cleaning, Repair and Reimbursement for Utility Use: For all dates reserved for City or City-authorized use under this Section 4, including move-in, move-out and cleanup dates, City shall, or shall require the user to, reimburse SIFF within 30 days of SIFF's invoice, for SIFF's actual expenses for utilities, supplies, perishable items and labor (other than equipment operators) attributable to such use. In addition, City or its authorized user shall clean the Premises and repair any damage caused to the Premises and to SIFF's property on the Premises by the end of the move-out day, unless a longer period of time is required for repair work, in which case such work shall be completed as quickly as is reasonably possible.

D. City Responsibility for Damage: The parties acknowledge that members of the public will occupy the Premises during City or Cityauthorized use periods, and City will endeavor to protect the Premises and all persons on the Premises from damage or injury. City shall be responsible for, and shall indemnify, defend and hold SIFF harmless from, any and all losses, damages, suits, and claims for any nature whatsoever made against or incurred by SIFF arising out of any City or City-authorized use of the Premises, except to the extent that any damage or injury arises from SIFF's negligence or willful misconduct. City shall also require any City-authorized users to secure commercial general liability insurance, including contractual liability, with the same limits of liability as are required of SIFF. Such insurance shall name SIFF as an additional insured and users will be required to provide SIFF with evidence of such insurance not less than seven (7) days prior to the scheduled use.

The indemnification provided for in this paragraph shall survive any termination or expiration of this Lease.

E. Limitation on Third-Party Usage: Notwithstanding anything in this Lease to the contrary, if any City-authorized user of the Premises fails to pay SIFF any amounts due under this Section 4, that user shall not be permitted to use the Premises until the arrearage has been paid.

F. Guaranteed Dates for City and City-Authorized Third-Party Use of Premises: The Premises are reserved for City use each year on the following dates in connection with the annual events identified below or their successors, if any. For each use, SIFF shall provide access to the Premises no later than 12:01 a.m. on the first day specified and until 9:00 a.m. the day immediately following the last day specified. The Director shall inform SIFF of the precise dates for each event in a written notice as soon as the Director confirms such dates, but at least one (1) year before the first day of each intended use, or as specified below.

1. For Seattle International Children's Festival use: nine (9) consecutive days during the month of May.

2. For Northwest Folklife Festival use: Friday through the Monday of Memorial Day weekend, plus two (2) move-in days, before, and one (1) move-out day, after, the festival.

3. For The Bite of Seattle use: Friday through Sunday, plus one (1) move-in day and one (1) move-out day, each July.

4. For Seattle Center Arts and Science Academy use: fifteen (15) consecutive days during July and August.

5. For Bumbershoot Festival use: the Monday preceding Labor Day continuing through Labor Day, and including one (1) move-out day after Labor Day.

7. WAIVER; INDEMNIFICATION.

A. SIFF's Indemnification: Except as to activities to which RCW 4.24.115 applies (in which case the provisions of that statute shall govern this section), SIFF shall indemnify, defend (using legal counsel acceptable to City) and save City, its officers, agents, and employees, harmless from any and all claims, suits, losses, damages, fines, penalties, liabilities and expenses arising out of or in connection with (i) SIFF's occupation, use or improvement of the Premises or the Northwest Rooms pursuant to this Lease, or other Seattle Center areas; (ii) SIFF's breach of any of its obligations hereunder; or (iii) SIFF's violation of any law. SIFF agrees that its indemnity obligation specifically covers actions brought against City by SIFF's own employees and is specifically and expressly intended to constitute a waiver of SIFF's immunity under Washington's Industrial Insurance Act, RCW Title 51, as to City only. CITY AND SIFF ACKNOWLEDGE AND AGREE THAT THE INDEMNIFICATION PROVISIONS OF THIS LEASE WERE SPECIFICALLY NEGOTIATED AND AGREED UPON BY THEM and they shall survive the termination or expiration of this Lease.

B. Release of Claims: City shall not be liable to SIFF and SIFF hereby waives and releases City from all claims for any losses or other damages SIFF sustains as a result of any accident or occurrence in or upon the Premises or the Northwest Rooms, including but not limited to any defect in or failure of building equipment; any failure to make repairs; any defect, failure or interruption of building facilities or services; broken glass; water leakage; the collapse of any building component; or any act or omission of any other Northwest Rooms occupants.

C. Assumption of Risk: SIFF's placement and storage of business or personal property in the Premises or any other Seattle Center facility shall be at SIFF's sole risk.

8. INSURANCE

A. SIFF Furnished Coverages and Limits of Liability: SIFF shall obtain and maintain in full force and effect at all times during the Term of this Lease, at no expense to City, insurance as specified below.

1. Commercial General Liability insurance including

Premises/Operations

Personal/Advertising Injury

Contractual Liability

Independent Contractors

Stop Gap/Employers Liability

Fire/Tenant Legal Liability

Limits of liability shall be not less than $1,000,000 each occurrence, bodily injury and property damage combined single limit (CSL) except:

$ 1,000,000 each offense Personal/Advertising Injury

$ 1,000,000 each accident Disease Stop Gap/Employers Liability

$ 500,000 each occurrence Fire/Tenant Legal

2. Business Automobile Liability insurance including coverage for owned, non-owned, leased or hired vehicles with a minimum limit of liability of $1,000,000 each occurrence, combined single limit bodily injury and property damage.

3. Workers Compensation insurance in accordance with Title 51 of the Revised Code of Washington (RCW).

4. All Risks Property insurance on a replacement cost basis, covering SIFF's tenant improvements, trade fixtures and business and personal property. Such insurance shall include Time Element coverage with sufficient limits to provide for loss of revenues and additional expenses during an interruption of SIFF's activities due to damage to or loss of the Premises.

B. City-Furnished Coverages and Limits of Liability: The City shall maintain in full force and effect at all times during the Term of this Lease All Risks Property Insurance for the Building, including earthquake and flood, on a replacement cost basis.

C. Mutual Waiver of Property Insurance Subrogation: SIFF and the City hereby waive their respective rights of subrogation against one another with respect to perils covered by insurance required under this Lease and their respective rights of recovery against one another for claims falling within policy deductible amounts, unless the party against whom recovery is sought caused or contributed to the loss.

D. General Terms and Conditions:

1. Except with respect to Workers' Compensation insurance, any selfinsured retention in excess of $25,000 must be disclosed and is subject to the City's approval. SIFF shall be responsible for paying any claims that fall within amount of the self-insured retention. In order for the City to approve a self-insured retention about the stated amount, SIFF must state, in writing, that it will protect and defend the City of Seattle as an additional insured under its selfinsured retention to the same extent as City would be protected under a commercial insurance policy meeting the requirements set forth herein has been issued and, in addition, provide detailed information as to how and to whom the City should direct any notice or tender.

2. The City reserves the right to approve any insurer, form or type of coverage. Unless the City approves otherwise, all insurers shall be licensed to do business in the State of Washington and rated A:VII or higher in the current A.M. Best's Key Rating Guide; or issues as surplus lines under the provisions of chapter 48.15 RCW by a Washington State licensed broker.

3. The City of Seattle shall be named as an additional insured on the CGL and Business Automobile Liability policies for primary and non-contributory limits of liability.

4. City reserves the right to periodically review the appropriateness of coverages and/or limits of liability in view of inflation and/or changing industry conditions and to reasonably require an increase in such coverages and/or limits of liability upon ninety (90) days' written notice to SIFF and provided such increases are reasonable with respect to market practices.

5. If SIFF fails to maintain insurance as required herein, the City may procure the same and charge SIFF for the full expense thereof, which SIFF shall pay upon demand.

6. SIFF shall not keep or use in or about the Premises any article, which is prohibited by City's insurance policy. SIFF shall pay immediately any increase in City's premiums for insurance during the term of this Lease that results from SIFF's use of the Premises.

E. Evidence of Insurance

Except with respect to Workers' Compensation insurance, before occupying the Premises, SIFF shall provide City with documentary evidence that it has complied with the insurance requirements hereunder, including coverages, limits of liability and other terms and conditions specified in this Section 8.

As respects CGL insurance, evidence of insurance must include a copy of the actual designated additional insured endorsement or blanket additional insured policy wording that documents that The City of Seattle is an additional insured for primary and non-contributory limits of liability.

As respects all coverages, each policy must include, and the documentation must demonstrate, that the policy will not be cancelled without at least thirty (30) days' written notice of cancellation having been delivered to the City, except in cases of non-payment of premium, in which case, cancellation may occur upon ten (10) days' written notice.

The certificate holder shall be:

Seattle Center

305 W. Harrison St., Room 109

Seattle, WA 98109

Certification shall be sent to the City's Risk Manager at:

Facsimile number (206) 470-1270 or as an email attachment to riskmanagement@seattle.gov, with a copy to:

Juanita Woelfle

Facsimile number (206) 615-0366 or as an email attachment to Juanita.woelfle@seattle.gov

SIFF agrees that electronic documents transmitted to the City of Seattle shall constitute original copies and warrants the signature on the transmitted copy as the sender's certifying authorized representative's original signature. ORIGINAL HARD COPY CERTIFICATION IS NOT REQUIRED AND SHALL NOT BE SENT BY MAIL.

9. COVENANTS REGARDING OPERATION OF SIFF'S BUSINESS

A. No Nuisances or Objectionable Activity: SIFF shall not (i) permit any noise in excess of the amount normally generated by its business, odor, dust, vibration or similar substance or condition that the Director reasonably determines to be excessive considering SIFF's use, to remain on or be emitted from the Premises; (ii) interfere with access to or from the Premises or any other part of the Seattle Center or with the traffic thereon, or with any Seattle Center facility, business, activity or utility on or off Seattle Center grounds; (iii) create any nuisance in or adjacent to the Premises; or (iv) do anything on the Premises that will create a danger to life or limb.

B. Fire Extinguishers within Premises: SIFF shall install and maintain, throughout the Term, 2A-10BC-class fire extinguishers or alternatives approved by the Fire Marshal, in prominent locations on the Premises, and shall instruct its employees regarding their appropriate use. Such fire extinguishers shall be recharged at least once a year and immediately following any use. City has the right to verify compliance with this requirement at any time and to modify this requirement as necessary to conform to current Seattle Fire Department recommendations or requirements and to Seattle Center policies and procedures.

C. Fire Alarm System within Premises: SIFF shall, at its sole expense, install and connect to the Northwest Rooms' Fire alarm panel located in the Orcas Room, fully addressable equipment and devices necessary to bring the Premises into compliance with current Seattle Fire Department regulations.

D. Objectionable Merchandise or Material: SIFF shall not display or offer for sale or rent, or allow to be displayed or offered for sale or rent, on the Premises, any merchandise or other material that the Director, in the exercise of such official's sole discretion, determines will create a danger to life or limb or that may create a substantial litter or other maintenance problem at Seattle Center. SIFF will not display materials visible from the exterior of the Premises that portray The City of Seattle or Seattle Center or any aspect thereof in an incorrect, misleading, or unfavorable manner; that depict or suggest in words, symbols, illustrations, or other forms, any act of violence, or any lewd, immoral or obscene activity.

E. Cross-Promotional Activities: SIFF and the City will work cooperatively to develop and implement cross-promotional strategies to use the parties' respective communications systems and promotional tools to promote each other's events and activities..

F. Promotional Materials; Incorporation of Seattle Center Logo: SIFF shall, to the extent possible, include in any promotional material imprinted or published or otherwise produced by or on behalf of SIFF that refers to the Premises, including advertisements, posters, programs, but not including tickets, notice that the Premises are located at the Seattle Center, and/or the Seattle Center logo.

G. Linked Websites: SIFF shall maintain a link between its website and the Seattle Center website.

H. Sponsorship Approval: If SIFF procures sponsorship from entities that are in the business of manufacturing, selling, or distributing tobacco, hard alcohol or firearms, SIFF shall not advertise these sponsors in a manner visible to the general public inside or outside the Premises, except that such sponsor's name may be a written part of the official title of an event at the Premises, but SIFF agrees that no logo, product representation or product distribution is permitted at the Premises. Before concluding any sponsorship agreement with another party that includes naming rights for the Premises or pouring rights at the Premises, SIFF shall submit the same to the Director for approval, and if not approved, shall modify the agreement if the Director so requests, in an effort to secure such approval.

I. Operational Impacts: On or before February 1 of each year during the Term, the parties' representatives shall meet to review the operational impacts of SIFF's program on Seattle Center operations and activities. To the extent reasonably practicable, SIFF shall promptly implement reasonable modifications to its program that the Director requests and that are intended to mitigate demonstrable adverse effects that SIFF's program is having upon Seattle Center operations.

J. Notification of Casualties or Accidents: SIFF shall promptly notify City of casualties or accidents occurring in or about the Premises or the Northwest Rooms.

K. Deliveries: All deliveries shall be made to a delivery location or entrance designated by the Director. Deliveries shall be made before 10:00 a.m. or such other time as the Director may from time to time designate. If SIFF requires any special delivery arrangements, it shall request permission therefor from the Seattle Center Contracts Office. Special events such as festivals, including festival "move-in" and "move-out" periods, may impact, modify or limit delivery times.

L. Security: SIFF shall provide all security for SIFF's use of and activities on the Premises, at SIFF's sole cost and expense. For events with public attendance (whether ticketed or not), Seattle Center may require SIFF to engage, at SIFF's expense, qualified personnel to provide crowd management including, but not limited to, enforcement personnel inside the Premises and in any area where SIFF's event attendees are impeding or interfering with movement or access on or around the Seattle Center campus.

10. UTILITY SERVICES

A. Utility Services Provided by City: City shall make heating, ventilation and air conditioning, and sprinkler and fire alarm system monitoring and maintenance available for the Premises. City shall collect solid waste and solid waste recycling from the exterior of the Premises, and shall specify the location of all exterior waste receptacles, the means of access thereto, and the frequency of service.

SIFF shall pay for these services as follows:

1. HVAC. HVAC cost allocations for heating and cooling shall be based on the percentage of square footage that the Premises bear to the entire Northwest Rooms and North Tunnel, which the parties agree is 19% (9,556 sq. ft./49,847 sq. ft. = 19%). The foregoing shall be adjusted for any change that may occur in the square footage, corrections in the measurement of the square footage that both parties agree are valid, or changes in the use of the Premises or the Northwest Rooms.

2. Solid Waste; Recycling. SIFF shall pay $115.00 per month for garbage and recycling collection. This amount shall be adjusted annually, on the first day of each year throughout the Term to reflect changes in the CPI in the manner described in Section 4.C.

3. Sprinkler; Fire Alarm System. SIFF shall pay its share of sprinkler and fire alarm monitoring for fire alarm and sprinkler systems serving the Premises and shall reimburse Seattle Center for the actual cost, including salaries and benefits, for regular maintenance and confidence testing of the systems serving the Premises. The parties shall agree upon the allocation of such costs.

B. Utility Services Provided by SIFF: SIFF shall install, secure, maintain and repair, at its sole expense, any utility services necessary to conduct its operations on the Premises and which are not presently provided by the Seattle Center. Whenever possible, SIFF shall cause all utilities it installs to be separately metered and cause all bills for the delivery of such services to be sent directly to SIFF. If separate metering is not possible, the parties shall agree upon a methodology for allocating such costs prior to installation. SIFF shall pay before delinquency all fees and charges for all utility services provided to the Premises, including but not limited to telephone and data services, as well as for any special utility requirements and equipment, and for the installation, change and relocation of points and means of service of all utility lines and systems. SIFF shall have the right to choose the provider for such utility services subject to the Director's approval, with the exception of telecommunications services, as stated in Section 10.D, below.

C. Additional Utility Capacity: SIFF shall pay all costs associated with augmenting any existing utility services (including the fire sprinkler system) necessary or desirable for SIFF's use and occupancy of the Premises, including relocating or modifying any utility systems serving the Northwest Rooms, generally.

If SIFF desires to install lights or equipment that would exceed the capacity or design of the Northwest Rooms' existing utility systems, SIFF shall obtain the Director's prior consent for such installation, which the Director may condition upon SIFF's agreement to pay all costs for upgrades, relocations, renovations or revisions to Northwest Rooms' systems as may be necessitated by such equipment or lights. The Director may deny the change if the equipment or lights requested will, in City's reasonable judgment, overburden the Northwest Rooms' structural or mechanical, HVAC, plumbing or electrical system(s), even if supplemented at SIFF's expense.

D. Telecommunications: SIFF shall utilize the Seattle Center campus telecommunications provider for telephone and data services.

E. Interruption: Unless caused by Seattle Center's gross negligence or willful misconduct, City shall not be liable for any loss, injury or damage to person or property caused by or resulting from any variation, interruption or failure of utility services due to any cause whatsoever, including, but not limited to, electrical surges, or from failure to make any repairs or perform any maintenance. No temporary interruption or failure of such services shall be deemed an eviction of SIFF nor relieve SIFF from any of SIFF's obligations hereunder nor give SIFF a right of action against City for damages; provided, however, any interruption or failure of services in excess of 48 hours that results from Seattle Center's gross negligence or willful misconduct shall entitle SIFF to an abatement of rent for the duration of such interruption or failure. City has no obligation to provide emergency or backup power to the Premises. The provision of emergency or backup power to the Premises or to enable the equipment therein to properly function shall be SIFF's sole responsibility.

11. PARKING

As of the Commencement Date, the Seattle Center has "Cooperative Parking Status" under Title 23 of the Seattle Municipal Code. City does not provide any parking that is specifically for or associated with the Premises (including, but not limited to, that required by or for SIFF's staff, suppliers or customers). All available Seattle Center parking shall be available on a first-come, first-served basis. City will provide SIFF with five (5) Seattle Center parking passes and will invoice SIFF therefor at the current monthly rate; however, possession of a parking pass does not guarantee a parking space will be available on any given day.

12. SIGNAGE, ADVERTISING & PUBLICITY

A. Prohibited Promotion & Other Material: SIFF agrees not to display, post or distribute any material (including posters) on any part of the Seattle Center, excluding the interior of the Premises that are not visible from the exterior and excluding exterior signs as described in Section 12.B below, except after receiving the Director's written approval therefor, which approval may be given, conditioned or withheld in the Director's reasonable discretion. On or before the expiration or termination of this Lease, whichever is earlier, or, in the case of unauthorized material, on or before the date specified in the Director's notice to remove the same, SIFF shall remove, at no expense to City, all materials it has so posted and correct any unsightly condition and repair any damage or injury to City property caused by such material and its removal. If any unauthorized material is not removed from City property by the date required, such material may be treated as SIFF property subject to removal and storage pursuant to Section 23 hereof.

B. Signs: SIFF may install signs on the exterior of the Premises identifying the building by name, its status as the site of "SIFF Group" and containing other information related to SIFF including, without limitation, program information, fundraising information and special SIFF announcements. The design, installation and location (but not the contents) of said signs shall be subject to the Director's prior written approval. If the Premises contain a library, lecture hall, and/or screening room that are available to the public, SIFF may also install exterior signage indicating the location, subject to such signage's approval by the Director. It is City's expectation that SIFF will install all approved permanent signage in a timely manner. Any temporary signage, if the Director approves such, may not be in place more than six (6) months, total. All signs and display materials that SIFF is authorized to post or display shall comply with applicable laws and regulations.

13. MAINTENANCE, CLEANING & REPAIR

A. City Responsibilities: City shall maintain the Building, the portions of the Premises described below and the Common Areas in good order and to a standard typical for Seattle Center facilities. Except for damages to the Premises caused by SIFF or its officers, contractors, agents, patrons, invitees, volunteers, licensees or employees, which SIFF shall repair at its sole expense, City shall, at City expense, repair and maintain the following portions of the Premises:

1. Roof and exterior walls: The roof, exterior windows and exterior walls of the Premises other than doors and locks; provided, however, SIFF shall be responsible for exterior window washing, as described in Section 13.B.1.

2. Potable water, Wastewater and Sewer Pipes: Those portions of the potable water, wastewater and sewer pipes connected to the Premises, beginning five (5) feet from the exterior of the Premises.

3. HVAC system: Subject to the provisions of Section 4.D.1 hereof, the HVAC system and all component parts.

4. Sprinkler and Fire Alarm System: Subject to the provision of Section 4.D.3 hereof, the Sprinkler and Fire Alarm systems in the Premises and connected to the City systems.

In undertaking such maintenance, City shall make a good faith effort to not interfere with SIFF's business on the Premises. SIFF waives all claims for damages, including for any loss of business, resulting from City maintenance, cleaning and repair work except to the extent of City gross negligence or willful misconduct. There shall be no abatement or reduction of rent arising because of City's making of any repairs, alterations, or improvements except to the extent caused by the City's gross negligence or willful misconduct, or failure to make repairs, alterations, or improvements as required by this Section.

B. SIFF's Responsibilities: SIFF, at its sole expense, shall at all times keep the remainder of the Premises, including all of SIFF's improvements, alterations, and additions thereto, and SIFF's personal property, in good repair and in a serviceable and sanitary condition, reasonable wear and tear and damage by fire or other casualty not caused or contributed to by SIFF, excepted. In carrying out SIFF's responsibilities under this Section, SIFF, among other things, shall:

1. Regularly clean the exterior and interior glass in the Premises' windows and doors and replace any interior glass immediately if it should crack or break.

2. Maintain and repair all wastewater and sewer pipes within the Premises and up to five (5) feet from the exterior of the Premises.

3. Have all plumbing and plumbing fixtures inspected at least once every calendar year and cause all damage associated with any plumbing fixture, plumbing, or pipe to be repaired, all by professionals licensed to perform such functions. If SIFF fails to satisfy this repair obligation within four (4) hours after the Director notifies SIFF of any such damage, City may undertake such repair at SIFF's expense.

4. Maintain and repair the electrical system, including the main distribution service panel and all sub-panels serving the Premises, including conduits, wires, fixtures and lamps, exterior and interior doors and locks, interior finishes and accessories, the potable water system and wastewater system inside the Premises and up to five (5) feet from the exterior of the Premises, restroom stalls, and restroom dispensers. Only a licensed electrician shall perform work on the Premises' electrical systems.

If SIFF fails to timely fulfill any of its obligations specified in this Section, City may (but shall have no obligation to) undertake such work, and City shall have the right to enter the Premises for such purposes. If City undertakes any such work SIFF, SIFF shall, promptly upon receipt of a written statement, pay City the actual expenses City incurred in undertaking such work (including but not limited to Seattle Center labor and project management) plus an administrative charge of $250.00.

If requested by SIFF, the City may maintain, clean and repair the Premises to the ordinary standards provided to other tenants, or as otherwise agreed upon by the parties. If the City performs these services, SIFF shall reimburse the City for the cost of these services plus an administrative fee to be negotiated by the parties or for a negotiated set fee. If SIFF requests City to perform such maintenance, cleaning or repair, SIFF shall be deemed to have waived all claims for damages resulting from City maintenance, cleaning and repair work except to the extent of the City's gross negligence or willful misconduct.

C. Recycling of Waste Materials: SIFF, at no cost to City, shall collect, sort and separate into such categories as may be legally required or required by Seattle Center rule, regulation or policy, all solid waste products on the Premises, and recycle all such products that are locally accepted for recycling. Each separately sorted category of waste products shall be placed in separate receptacles provided by Seattle Center for the purpose and removed by Seattle Center to the campus waste reduction facility for removal. City reserves the right to refuse to collect or accept from SIFF any waste product that is not sorted and separated as required by law, ordinance, rule or regulation, and to require SIFF to arrange for the collection of the same at SIFF's sole cost and expense using a contractor satisfactory to City. SIFF shall pay all costs, fines, penalties, and damages that may be imposed on City or SIFF as a consequence of SIFF's failure to comply with the provisions of this subsection.

D. Public Health and Safety: If it is necessary, to protect the public health and safety or to make repairs, alterations, additions or improvements in order for the Premises or any portion of the Northwest Rooms to remain in operation, City may erect barricades and scaffolding in and outside of the Premises, may enter the Premises and may otherwise interfere with the conduct of SIFF's business and operations where such action is reasonably required by the nature of City's work. If any such work necessitates the temporary cessation of SIFF's business or operations in, on or from the Premises, the Director shall notify SIFF of such necessity and the anticipated beginning and ending dates of such cessation. Rent shall be prorated during each month City requires SIFF's business operations to cease pursuant to this section and SIFF shall pay such prorated Rent during the cessation. The proration of Rent shall be the only relief available to SIFF, and SIFF waives all claims for damages and for any injury to or interference with its operations or business and losses occasioned by any such cessation. City agrees, when exercising the rights hereunder, to take every reasonable step to keep interruptions in SIFF's operations to a minimum including performing such work during SIFF's non-business hours when possible.

E. Inspection for Maintenance Purposes: The Director shall inspect the Premises at lease once each year, at City expense, and shall provide a written report to SIFF containing findings and recommendations regarding necessary or advisable maintenance and repair. Within such time periods as the Director may reasonably specify, SIFF and City shall each perform such recommended repair and maintenance work as is their respective responsibilities under this Lease. The Director's inspection shall not relieve SIFF of any responsibility to inspect the Premises and perform such repair and maintenance work as it is otherwise obligated to perform under this Lease.

14. CITY ACCESS TO, AND INSPECTION, REPAIR AND IMPROVEMENT OF PREMISES AND OTHER PROPERTY

A. Access to Premises: In addition to City's right of access under Section 13.D, SIFF shall provide City and its agents with access to the Premises at all reasonable times to inspect the same and to make any inspection, repair or improvement the Director deems necessary, but this right of access shall not impose on City any obligation to make any repair, alteration, addition, or improvement except as specifically provided herein. City shall provide SIFF with reasonable notice of such inspection, repair or improvement. City shall be responsible for any costs borne by SIFF arising from such inspection, repair or improvement and any damages caused by City during such inspection repair or improvement to the extent caused by City's gross negligence or willful misconduct.

B. Access to Electrical and Mechanical Rooms: The City reserves for itself, and SIFF shall ensure that it has, unrestricted access to and use of the City Electrical and Mechanical Rooms adjacent the Premises at all times throughout the Term.

CC. City's Use of Key to Premises: SIFF shall provide the Director with keys with which to unlock all of the doors in, upon, and about the Premises, excluding SIFF's vaults, safes, files and equipment. In cases of emergency, City may use any and all means that the Director deems proper to open said doors in order to gain entry into the Premises, without liability to SIFF. The City's entry into the Premises pursuant to this Section 13 shall not be construed or deemed to be an eviction of SIFF or a forcible or unlawful entry into, or a detainer of, the Premises or any portion thereof.

D. Northwest Rooms: City shall at all times have exclusive control and management of the Northwest Rooms, except for the Premises, and no diminution of the Northwest Rooms shall be deemed a constructive or actual eviction or entitle SIFF to compensation or a reduction or abatement of Rent. City, in its discretion, may increase, decrease or change the number, locations and dimensions of the Northwest Rooms. City reserves the right from time to time to install, use, maintain, repair, relocate and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to the Premises or to other parts of the Northwest Rooms in areas above the ceiling surfaces, below the floor surfaces, within the walls and elsewhere in the Northwest Rooms.

15. COMPLIANCE WITH LAW

A. General Requirements: SIFF, at no cost to City, shall perform and comply with all applicable laws of the United States; the State of Washington; the Charter and Municipal Code of City of Seattle; and rules, regulations, orders, and directives of administrative agencies and their officers implementing the same. SIFF shall use reasonable efforts to ensure that every person it admits to the Premises similarly performs and complies with the same. Whenever SIFF or its authorized representative is informed of any violation of any law, ordinance, rule, regulation, license, permit, or authorization committed by it or any person admitted to the Premises, SIFF shall immediately desist from and/or prevent or correct such violation.

B. Licenses, & Other Authorizations: SIFF shall obtain and maintain all required licenses, permits, and similar legal authorizations pertaining to the conduct of its business on the Premises, and comply with all requirements thereof.

C. Taxes: SIFF shall pay, before delinquency, all taxes, levies, and assessments arising from its activities on or occupancy of the Premises, including but not limited to taxes arising out of the activity or business conducted on the Premises; taxes levied on its property, equipment and improvements on the Premises; and taxes on SIFF's interest in this Lease and any leasehold interest deemed to have been created thereby under RCW Ch. 82.29A; and if the State of Washington makes any demand upon City for payment of leasehold excise taxes resulting from SIFF's occupancy of the Premises or withholds funds due to City to enforce collections of leasehold excise taxes, SIFF shall remit the taxes demanded together with any interest and penalties associated therewith or, at no expense to City, contest such collection action and indemnify City for all sums expended by, or withheld by the State of Washington from City in connection with such taxation. If SIFF is exempt from any tax, a document from the taxing authority demonstrating SIFF's exemption must be provided to the Seattle Center Fiscal Services Department.

D. Nondiscrimination: SIFF shall comply with all applicable equal employment opportunity and nondiscrimination laws of the United States, the State of Washington, and the City of Seattle, including but not limited to Chapters 14.04, 14.10, and 20.42 of the Seattle Municipal Code (SMC), as they may be amended; and rules, regulations, orders, and directives of the associated administrative agencies and their officers.

16. ENVIRONMENTAL STANDARDS

SIFF shall not, without City's prior written consent, keep on or about the Premises or the Northwest Rooms any substance designated as, or containing any component now or hereafter designated as hazardous, dangerous, toxic or harmful and/or subject to regulation under any federal, state or local law, regulation or ordinance ("Hazardous Substances"), except customary office and janitorial supplies in normal quantities handled in compliance with applicable laws. With respect to any Hazardous Substances stored with City's consent, SIFF shall promptly, timely and completely comply with all governmental requirements for reporting and record keeping; submit to City true and correct copies of all reports, manifests and identification numbers at the same time as they are required to be and/or are submitted to the appropriate governmental authorities; within five (5) days after City's request therefore, provide evidence satisfactory to City of SIFF's compliance with all applicable governmental rules, regulations and requirements; and comply with all governmental rules, regulations and requirements regarding the proper and lawful use, sale, transportation, generation, treatment and disposal of Hazardous Substances. SIFF shall provide the Director with SIFF's USEPA Waste Generator Number (if any), and with a copy of every Material Safety Data Sheet (MSDS), Generator Annual Dangerous Waste Report, environmentally related regulatory permit or approval (including every revision or renewal thereof) and any correspondence SIFF receives from, or provides to, any governmental unit or agency concerning SIFF's handling of Hazardous Substances or the presence, or possible presence, of any Hazardous Substance on or about the Premises.

If SIFF violates any of the terms of this section concerning the presence or use of Hazardous Substances or the handling or storing of hazardous wastes, SIFF shall promptly take such action as is necessary to mitigate and correct the violation. If SIFF does not act in a prudent and prompt manner, City reserves the right, but not the obligation, to act in place of SIFF (for which purpose SIFF hereby appoints City as its agent), to come onto the Premises and to take such action as City deems necessary to ensure compliance or to mitigate the violation. If the Director has a reasonable belief that SIFF is in violation of any law or regulation, or that any action or inaction of SIFF presents a threat of violation or a threat of damage to the Premises, City reserves the right to enter onto the Premises and take such corrective or mitigating action as the Director deems necessary. All costs and expenses incurred by City in connection with any such action shall become immediately due and payable as additional rent by SIFF upon City's presentation of an invoice therefore.

Any and all costs and expenses City incurs in connection with City's inspections of the Premises and City's monitoring of SIFF's compliance with this Section 15, including City's attorneys' fees and costs, shall be additional rent and shall be due and payable to City within ten (10) days after City's demand therefor. SIFF shall be fully and completely liable to City for any and all cleanup costs and expenses and any and all other charges, expenses, fees, fines, penalties (both, civil and criminal) and costs imposed with respect to SIFF's use, disposal, transportation, generation and/or sale of Hazardous Substances in or about the Premises or Building. In addition to all other indemnity provisions of this Lease, SIFF shall indemnify, defend, and hold City harmless from any and all costs, fees, penalties, charges and expenses, claims, suits, and liabilities assessed against, or imposed upon City, including without limitation cleanup or other remedial costs (and including attorneys' fees, costs and all other reasonable litigation expenses when incurred and whether incurred in defense of actual litigation or in reasonable anticipation of litigation) as a result of SIFF's use, storage, disposal, transportation, generation and/or sale of Hazardous Substances. This indemnity shall survive termination or expiration of this Lease.

17. CITY'S CONTROL OF BUILDINGS, GROUNDS & ACTIVITIES

Notwithstanding any other provision of this Lease and without limiting the City's general authority over the Seattle Center and other municipal properties, City may, without liability of any kind:

A. Physical Appearance: Increase, reduce or change, in any manner and to any extent whatsoever, the number, appearance, dimensions, and location of any and every Seattle Center walkway, landscaping element, parking, service area, and building.

B. Traffic & Parking Regulation: Regulate all traffic within and adjacent to the Seattle Center; and restrict or prohibit SIFF or any of its officers, employees, agents, suppliers, and invitees from parking motor vehicles on City property.

C. Admission Charges: Impose a reasonable charge for admission to the Seattle Center and any of the facilities therein, including parking facilities; provided that SIFF shall solely determine any admission charge to the Premises, except during dates outlined under Section 4.F above.

D. Events: Erect, display and remove promotional exhibits and materials and permit special events on the Seattle Center grounds and in or at any building and facility thereof.

E. Rules & Regulations: Promulgate, from time to time, reasonable rules and regulations regarding the use and occupancy of any area of Seattle Center.

F. Hours of Operation: Determine the days and hours that the Seattle Center and the various business operations therein will be open to the public, provided however, that if such change makes SIFF's use either illegal or commercially impractical, then this Lease shall be terminable by SIFF at SIFF's sole option.

G. Other Businesses & Operations: Change the size, number, type and identity of other businesses and operations being conducted or undertaken at Seattle Center, and authorize other others, directly or indirectly, to sell food, beverages, merchandise and services at Seattle Center, including any that may be identical or similar to that which SIFF offers. SIFF acknowledges and agrees that no representations have been made regarding, and this Lease is not predicated on, continued operation of the existing Seattle Center monorail.

H. Interference: Interfere with light, air or view, or SIFF's operations or use and occupancy of the Premises, either in connection with or as a result of operations by or for City in the construction of any public work or its subsequent use and occupancy, or the repair and maintenance of any City facility or improvement. City will make a good faith effort, however, to minimize such interference to the extent it is reasonably economical for City to do so.

18. ASSIGNMENTS, SUBLEASES & OTHER INTEREST TRANSFERS

A. Director's Prior Written Consent Required: SIFF shall not assign, mortgage, or otherwise transfer or encumber this Lease nor sublet the whole or any part of the Premises without the Director's prior written consent, which may be withheld or conditioned in the Director's sole discretion, except as provided in Section 18.C, below. Consent to any particular assignment, subletting, or transfer shall not waive the need for consent to any subsequent assignment, subletting or transfer. Notwithstanding the foregoing, nothing herein shall prohibit SIFF from licensing part or all of the Premises to other film organizations for short-term events consistent with the permitted Use, but such licensing shall not relieve SIFF of its obligations as described herein.

B. Transferee's Obligations; Documentation: If the Director approves an assignment, transfer or sublease, other than a short-term event license as described above, the assignee, transferee or sublessee shall assume, in writing, all of SIFF's obligations under the Lease with respect to the portion of the Premises involved, and such assignee, transferee or sublessee must agree, in writing, to be jointly and severally liable for the performance of all of SIFF's obligations under this Lease.

Every proposed sublease, assignment, or other interest-transferring agreement shall be submitted to the Director for review and approval or disapproval before execution by the proposed subtenant, assignee, or other transferee, and not less than fourteen (14) calendar days before the commencement date of the proposed subtenant's, assignee's, or transferee's intended use of any portion of the Premises or the assumption of any right or interest in any portion of the Premises or this Lease.

C. Change of SIFF's Organizational Structure Constitutes Assignment: Any change in the non-profit nature or organizational structure of SIFF shall be deemed an assignment and shall be subject to the Director's reasonable approval.

D. SIFF's Authorization to Use Premises Constitutes Assignment or Sublease: If SIFF permits anyone to occupy all or any portion of the Premises for any purpose not within the intent of this Lease or any approved sublease, such permission shall be deemed an unauthorized assignment or sublease and shall constitute a material breach of Lease.

19. EXCUSE & SUSPENSION OF OBLIGATIONS (FORCE MAJEURE)

If a party's performance under this Lease is prevented by an unforeseeable act of nature, war or war-like operations, civil commotion, riot, labor dispute, including a strike, lockout, or walkout; sabotage, Federal or State regulation or control, or other condition beyond the reasonable control of such party, then performance of such affected obligation shall be suspended (excluding, however, any monetary obligations , which shall continue to be due and payable), but only for the duration of such condition. The existence of more than one (1) such condition on a given day shall result in only a one (1) day suspension.

20. DAMAGE OR DESTRUCTION

A. Report of Damage or Destruction: SIFF shall submit a written report to the Director, in care of the Contracts and Concessions Office, regarding the circumstances of any damage to the Premises or any of SIFF's improvements thereto that is not readily knowable by the Director or the Seattle Center staff, within twenty four (24) hours after its discovery.

B. Termination Rights in Event of Damage or Destruction:

If the Premises or Building are damaged or destroyed by fire or other casualty and any of the following circumstances apply, then this Lease may be terminated as provided below. In the event of such termination, SIFF shall promptly pay City the full amount of any insurance proceeds to which it is entitled on account of damage or destruction to SIFF's tenant improvements.

1. Either party may terminate the Lease if fifty percent (50%) or more of the Premises are damaged or destroyed.

2. City may terminate the Lease if City desires to discontinue SIFF's operations because of substantial destruction of the Building or other part of Seattle Center, regardless of whether the Premises are destroyed or damaged.

3. SIFF may terminate the Lease if reasonably determines that the total insurance proceeds payable to SIFF, together with the amount of any applicable deductible, are insufficient to enable the Premises to be rebuilt, repaired and restored after their damage or destruction to a condition suitable to continue the permitted Use hereunder.

Notice of termination pursuant to this Section shall be provided within sixty (60) days after the occurrence of the damage or destruction and shall specify the effective date of such termination.

C. Rebuilding, Repair & Restoration. If this Lease is not terminated following an event of damage or destruction, then SIFF or City, at City's election, shall promptly repair or restore the Premises as nearly as possible to their condition immediately before the damage or destruction, using all available insurance proceeds together with any insurance proceeds payable to City that City in its sole discretion agrees to apply to the Premises. Upon completion of the repairs or restoration, SIFF shall immediately re-occupy the whole of the Premises, the Rent abatement or reduction provided pursuant to this Section 20.D, if any, shall be discontinued and the full Rent shall again be due and payable. City shall not be liable to SIFF for damages, compensation or any other sum for inconvenience, loss of business, or disruption arising from any repair to or restoration of any portion of the Premises or the Building in which the Premises are located.

D. Rent Obligation in Event of Damage or Destruction: If the Premises are destroyed or damaged by fire or other casualty not caused by an act or omission of SIFF or any of its officers, employees, contractors, agents, invitees, or guests, and such destruction or damage is so extensive as to render the Premises unusable (either because of the need to rebuild or to clean and refurbish the same) and SIFF has given City timely notice of such destruction or damage, SIFF's obligation to pay Rent shall be abated until the date that the Premises are usable or should have been made usable had SIFF diligently prosecuted such repair, rebuilding, and restoration work. The Director shall reasonably determine whether the Premises are unusable and the duration of any such Rent abatement and shall notify SIFF of the determination, in writing. If only a portion of the Premises are damaged or destroyed by fire or other casualty as stated above, SIFF's Rent shall be reduced in proportion to the extent of the Premises rendered unusable for the permitted Use, as reasonably determined by the Director, who shall notify SIFF of the extent and duration of the reduction, in writing.

21. DEFAULT & BREACH

A. Definition: If SIFF fails to keep or perform any covenant, term or condition of this Lease beyond any applicable cure period, or if SIFF files or is the subject of a petition in bankruptcy, or if a trustee or receiver is appointed for SIFF's assets or if SIFF makes an assignment for the benefit of creditors, or if SIFF is adjudicated insolvent, SIFF shall be in default of this Lease ("Default").

B. City's Notice of Default & Breach: If SIFF is in Default, City shall provide written notice to SIFF, specifying the nature of the Default and City's intention to terminate this Lease if the Default is not corrected within thirty (30) days; provided, however, that if the nature of SIFF's obligation is such that more than notice period is required for performance, then SIFF shall not be in default if SIFF commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion.

C. Remedies: If SIFF fails to timely cure any Default City may (a) terminate this Lease without any further proceedings and (b) re-enter the Premises and lease and license others to use the Premises during any portion of the period of use remaining under this Lease had it not been terminated, and receive compensation therefor. Such reentry shall not extinguish SIFF's liability for the Rent and any other sums due City under the Lease; provided, that SIFF shall only be required to pay to City the difference between what City would have received under the Lease had the re-entry not occurred and the rent City is able to recover in mitigation. City shall take reasonable steps to mitigate any damages due to SIFF's termination, as further described in Section 21.E, below. SIFF's payments due hereunder, if any, shall be made monthly, within thirty (30) days after the date of City's invoice to SIFF and shall be subject to the late fees and interest provided for in Section 5 of this Lease. SIFF shall also be liable for and shall reimburse City for any other amount City incurs as a result of SIFF's Default including, but not limited to, any costs or expenses City incurs in retaking possession of the Premises, maintaining or preserving the Premises after such Default, preparing the Premises for reletting to a new tenant (including repairs or alterations to the Premises for such reletting), leasing commissions, and any other costs necessary or appropriate to relet the Premises. If City re-enters the Premises, City shall have the right, but not the obligation, to remove therefrom all or any part of the personal property located therein and may place the same in storage at a public warehouse at SIFF's expense and risk. SIFF's obligations under this Section shall survive the termination of this Lease.

D. Adequate Security: If a petition is filed by or against SIFF under any provision of the Bankruptcy Code or successor act, City reserves the right to require SIFF to post a cash bond with City equal to six (6) months' Rent plus such additional sums as to provide City with adequate security for SIFF's performance of its obligations under this Lease.

E. Criteria for Substitute Tenant: City's obligation to mitigate damages after a Default that results in City's regaining possession of all or part of the Premises shall be satisfied, in full, if City undertakes to lease the Premises to another tenant (a "Substitute Tenant") in accordance with the following criteria:

City shall have no obligation to solicit or entertain negotiations with any other prospective tenants for the Premises until City obtains full and complete possession of the Premises including, without limitation, the final and unappealable legal right to re-let the Premises free of any claim of SIFF.

City shall not be obligated to offer the Premises to any prospective tenant when other Premises on the Seattle Center suitable for that prospective tenant's use are currently available, or will be available within three months from the date of Default.

City shall not be obligated to lease the Premises to a Substitute Tenant for a rental less than the lower of (1) the Rent SIFF was paying, or (2) the current fair market rental then prevailing for comparable facilities in the same market area as the Seattle Center.

City shall not be obligated to enter into a new lease under terms and conditions that are unacceptable to City under City's then-current leasing policies for comparable space at the Seattle Center.

City shall not be obligated to enter into a lease with any proposed Substitute Tenant that does not have, in the Director's reasonable opinion, sufficient financial resource or operating experience. City shall not be required to expend any amount of money to alter, remodel, or otherwise make the Premises suitable for use by a Substitute Tenant unless:

1. SIFF pays any such sum to City in advance of City's execution of a lease with such Substitute Tenant (which payment shall not be in lieu of any damages or other sums to which City may be entitled to as a result of SIFF's default under this Lease); or

2. City, in the Director's sole discretion, determines that any such expenditure is financially justified in connection with entering into any lease with such Substitute Tenant.

.

City shall not be obligated to enter into a lease with any Substitute Tenant whose use would:

1. disrupt the tenant mix or balance of the Seattle Center;

2. violate any restriction, covenant, or requirements contained in the lease of another tenant of the Seattle Center;

3. adversely affect the reputation of the Seattle Center; or

4. be incompatible with the operation of the Seattle Center as a first-class event and cultural community-gathering center.

F. Default by City: City shall not be in default of any obligation under this Lease unless City fails to perform such obligation within a reasonable time, which time shall not extend more than thirty (30) days after written notice by SIFF to the Director specifying the particular obligation that City has failed to perform. However, if the nature of City's obligation is such that more than thirty (30) days are required for performance, then City shall not be in default if City commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion.

22. REMEDIES CUMULATIVE

Rights under this Lease are cumulative; failure to exercise on any occasion any right shall not operate to forfeit such right on another occasion. Each party shall also have any remedy available at law. The use of one remedy shall not be taken to exclude or waive the right to use another.

23. SURRENDER OF PREMISES

A. Surrender & Delivery: Upon the expiration or termination of this Lease, whichever is earlier, SIFF shall surrender the Premises in a broom-clean condition, reasonable wear and tear excepted. SIFF shall promptly deliver to the Director all keys SIFF and any of its officers, agents and employees have to the Premises or any other part of the Seattle Center. Immediately after vacating the Premises and their surrender to City, a representative of SIFF and City shall jointly inspect the Premises to determine their condition. The Director shall summarize the results of such inspection on a "Premises Inspection Report," a copy of which shall be provided to SIFF. If the Director determines that SIFF has failed to surrender the Premises in a broom-clean condition, the Director may have the Premises cleaned at SIFF's expense, including administrative costs.

B. Removal of SIFF's Property: Before the expiration of this Lease, or if this Lease is terminated, then within fifteen (15) days after the termination date, SIFF shall remove, at its sole expense, all trade equipment and personal property owned or installed by SIFF in or on the Premises, unless the Director agrees, in writing, that any items may stay. In removing its property, SIFF shall take care to not injure or damage the Premises and shall repair the Premises as necessary to restore them to their condition as of the commencement date of this Lease, ordinary wear and tear and approved improvements, additions, and alterations excepted.

C. Storage of SIFF's Property: If SIFF fails to remove its trade equipment and personal property as required, City may, but shall not be required to remove such material from the Premises and store the same, all at SIFF's risk and expense. If City removes or arranges for the storage of such material, SIFF shall reimburse City for all costs related to the removal, including any restoration and administrative costs.

D. No Claim for Removal: SIFF shall not make any claim or demand upon City nor shall City be liable for any inconvenience, annoyance, disturbance, or loss of business or any other damage suffered by SIFF arising out of removal operations under this Section.

24. NOTICES

All notices from either party to the other required hereunder shall be in writing and delivered or mailed, postage prepaid, to the intended recipient at the address specified on the signature page of this Lease, or to such other address as may be specified from time to time by either party, by notice to the other party.

25. NO RELATIONSHIP ESTABLISHED

City is not a partner, associate, or joint venturer of SIFF, or any party associated with SIFF. SIFF is not an agent of City for any purpose whatsoever. SIFF shall not create any obligation or responsibility on behalf of City or bind City in any manner.

26. AUTHORITY OF DIRECTOR

No action of the Director pursuant to or in implementation of this Lease shall constitute any official action by any other City department or official that may be required by law, ordinance, rule or regulation before SIFF may rightfully commence, suspend, enlarge, or terminate any particular undertaking or exercise any particular right or privilege under this Lease. Except as specifically provided to the contrary in any other Section of this Lease, any approval, consent or permission required of the Director by this Lease may be granted, conditioned or withheld by the Director in the exercise of such official's sole discretion.

27. AMENDMENTS

No modification or amendment of the terms hereof shall be effective unless in writing and signed by the authorized representative of each of the parties hereto.

28. NO WAIVER

Nothing other than a written document signed personally by the Director or such official's designee and specifically declaring a City intent to waive a particular breach or Default by SIFF shall constitute a waiver of such breach or Default. No such document shall waive SIFF's failure to fully comply with any term or condition of this Lease not specifically referenced therein, irrespective of any knowledge any City officer or employee may have of such breach, Default, or noncompliance. No waiver by either party shall be construed to be, or operate as, a waiver of any subsequent Default in full performance of any provision of this Lease. The payment or acceptance of any Rent, other sums due, or other compensation, whether after a Default or from a sublessee or assignee, shall not be deemed to constitute consent to or acceptance of such Default or acceptance of defective or incomplete performance in the future.

29. USE OF LANGUAGE

Terms used in the masculine gender herein include the feminine, and vice versa; and terms used in the singular or plural include the other, as the context may require.

30. CAPTIONS

The titles of Sections or other parts of this Lease are for convenience only and do not define or limit the contents.

31. INVALIDITY OF PARTICULAR PROVISIONS

Should any term, provision, condition, or other portion of this Lease or the application thereof be held to be inoperative, invalid or unenforceable, the remainder of this Lease or the application of such term or provision to person or circumstances other than those to which it is held invalid or unenforceable shall not be affected hereby and shall continue in full force and effect.

32. BINDING EFFECT

The provision, covenants, and conditions contained in this Lease apply to bind the parties, their legal heirs, representatives, successors, and assigns.

33. NO BROKER

SIFF represents and warrants that there is no claim for any brokerage commission or finder's fee in connection with the execution of this Lease.

34. INSTALLATION OR INTEGRATION OF VISUAL ART WORKS PROHIBITED WITHOUT DIRECTOR'S CONSENT

A. Approval: City reserves to and for itself the right to approve or disapprove of the installation or integration on or in the Premises of any "work of visual art," as that term is defined in the Visual Artists Rights Act of 1990, as now existing or as later amended, and to approve or disapprove of each and every agreement regarding any such installation or integration. SIFF shall not install on or integrate into, or permit any other person or entity to install on or integrate into, the Premises any such work of visual art without the prior, express, written consent of the Director. The Director's consent to the installation of any such art work may be granted, granted upon one or more conditions, or withheld in the Director's discretion; provided, however, that Director's consent to an installation shall not be required under the following three (3) circumstances:

1. If such art work (a) weighs less than fifty (50) pounds; and (b) is of a size and has such dimensions and material composition that makes its passage through an open 32" x 78" or larger doorway a simple and easy maneuver; and (c) is to be installed on the floor, a piece of furniture, or similar surface without further anchoring of any kind or nature, or on a wall using no more than two (2) simple picture hooks and wire; all so that the easy removability from the Premises of such art work without its destruction, distortion, mutilation or other modification because of such removal is undeniable; or

2. If SIFF delivers to City a waiver appropriately executed by the art work creator, for the benefit of City and its successors and assigns as the owner of the Premises, of the creator's right of integrity regarding such art work, in a form of waiver that satisfies both City and the requirements of 17 U.S.C. section106A(e), as the same now exists or is hereafter modified; or

3. If City executes with the creator of a work of visual art to be installed in the Premises a consent agreement of the type contemplated by 17 U.S.C. section113(d)(1), as the same now exists or is hereafter amended, and in the form and manner specified by City.

B. Notice: If the creator of any work of visual art installed in the Premises by or for SIFF has not executed a waiver, or such creator and City have not executed a consent agreement, each as described herein, SIFF shall ensure that, before removing or allowing the removal from the Premises of any such art work, such creator is given both notice, as contemplated in 17 U.S.C. section113(d)(2), of the intended removal of such art work, and the time required by that statutory provision to respond to such notice, and that SIFF takes whatever other action(s) may be required by such legislation to ensure that no claim, action or suit alleging a violation of the Visual Artists Rights Act of 1990, as now existing or hereafter amended, and arising out of any act or omission of or for SIFF or any of its officers, employees, or agents, is filed or lodged against City in its capacity as the Premises owner.

C. SIFF's Indemnification of City Against Liability under Visual Artists Rights Act of 1990: In addition to all other indemnity provisions of this Lease, SIFF shall protect, defend, and hold City harmless from and against any and all claims, suits, actions or causes of action, damages and expenses (including attorneys' fees and costs) arising as a consequence of (a) the installation or integration of any work of visual art on or into the Premises; (b) the destruction, distortion, mutilation or other modification of the art work that results because of its removal; or (c) any breach of this section; or (d) any violation of the Visual Artists Rights Act of 1990, as now existing or hereafter amended; by SIFF or any of its officers, employees or agents. This indemnification obligation shall exist regardless of whether City or any other person employed by City has knowledge of such installation, integration, or removal or has consented to any such action or is not required to give prior consent to any such action. The indemnification obligation of this subsection shall survive the expiration or earlier termination of this Lease.

35. ACKNOWLEDGEMENT OF NEGOTIATED LEASE; APPLICABLE LAW

The parties to this Lease acknowledge that it is a negotiated lease, that they have had the opportunity to have the Lease reviewed by their respective legal counsel, and that the terms and conditions of this Lease are not to be construed against any party on the basis of such party's draftsmanship thereof. This Lease shall be governed by, and construed under the laws of the State of Washington. The venue of any action brought to enforce the terms of this Lease shall be King County Superior Court.

36. EMINENT DOMAIN

A. Total Taking: If there is a Total Taking, this Lease shall terminate as of the date of the taking of physical possession of the Premises. A "Total Taking" shall be defined as when (i) the entire Premises are taken or appropriated under the power of eminent domain (other than by City of Seattle), or (ii) when less than the entire Premises are taken or appropriated under the power of eminent domain (other than by City of Seattle), but where SIFF's use of the Premises is materially interfered with. Upon the date of such taking or transfer, the Term of this Lease shall expire as fully and completely as if such date were the date hereinabove set forth for the end of the Term of this Lease and SIFF shall thereupon vacate the Premises, without prejudice to any rights and remedies accrued to City under this Lease before such termination and any Rent paid or payable by SIFF shall be adjusted as of the date of such termination.

B. Partial Taking: If there is a "Partial Taking," defined as a taking or appropriation under the power of eminent domain (other than by City of Seattle) other than a Total Taking, then the Lease shall continue in full force and effect; provided, however, that City shall proceed as promptly as is practicable to restore the Premises to an architectural unit as nearly comparable as is reasonable to the unit existing just before such taking or transfer to the extent that such restoration can be accomplished with the available condemnation proceeds, and the Rent shall be abated in the ratio which the part of the floor area of the Premises so taken or transferred, if any, bears to the entire floor area of Premises immediately before such taking or transfer.

C. Condemnation Award: The entire award for the taking under any right of condemnation or eminent domain or any transfer in lieu thereof shall belong to City, and SIFF shall not be entitled to any part thereof or entitled to recover damages for the loss of its leasehold estate or other interest in the Premises and hereby assigns to City, subject to the following sentence, all of its right, title and interest in and to any such award. SIFF shall have the right, however, to independently claim and recover from the condemning authority compensation for any loss to which SIFF may be put for SIFF's relocation assistance, moving expenses or taking of SIFF's personal property (not including SIFF's leasehold interest); provided, that such damages may be claimed only if they are awarded separately in the eminent domain proceedings and not out of or as part of the damages recoverable by City.

37. ENTIRE AGREEMENT.

This instrument, including the exhibits and attachments hereto, and the Construction Agreement referred to in Section 36.B, constitute the entire agreement between City and SIFF relative to the Premises. City and SIFF agree that all prior or contemporaneous oral agreements between and among themselves and their agents or representatives relative to the leasing of the Premises are superseded by this Lease.

38. EXHIBITS

The following exhibits are made a part of this Lease:

Exhibit A: SIFF Mission Statement

Exhibit B: Premises Floor Plan

Exhibit C: Seattle Center Vision Statement

Exhibit D: Seattle Center Rules and Regulations

Exhibit E: Outline of Authorized Tenant Improvements

IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year indicated below:

SIFF: CITY:

THE SIFF GROUP

CITY OF SEATTLE

By ______________________________

By ______________________________

Deborah Person, Executive Director

Robert Nellams, Director The SIFF Group Seattle Center Department

BUSINESS ADDRESSES FOR NOTICES

SIFF: CITY OF SEATTLE: Attn: Executive Director Manager, Contracts & Concessions The SIFF Group Seattle Center Department 305 Harrison Avenue 305 Harrison, Room 322 Seattle, WA 98109 Seattle, WA 98109 PHONE NO.: (206) ___________ PHONE NO.: (206) 684-7114

STATE OF WASHINGTON)

) ss.

COUNTY OF KING )

On this _______day of ______________________________, 200___, before me, a Notary Public in and for the State of

____________________________, duly commissioned and sworn, personally appeared Deborah Person, to me known to be the Executive Director of THE SEATTLE INTERNATIONAL FILM FESTIVAL GROUP, the entity that executed the foregoing Lease as tenant; and acknowledged to me that he/she signed the same as THE SEATTLE INTERNATIONAL FILM FESTIVAL GROUP's free and voluntary act and deed, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument for THE SEATTLE INTERNATIONAL FILM FESTIVAL GROUP.

I certify that I know or have satisfactory evidence that the person appearing before me and making this acknowledgement is the person whose true signature appears on this document.

WITNESS MY HAND AND OFFICIAL SEAL the day and year in this certificate above written.

Signature

(Print or Type Name)

NOTARY PUBLIC in and for the State of Washington,

Residing at___________________________________

My commission expires:________________________

STATE OF WASHINGTON )

) ss.

COUNTY OF KING )

On this _______day of ______________________________, 200___, before me, a Notary Public in and for the State of

____________________________, duly commissioned and sworn, personally appeared Robert Nellams, to me known to be the Seattle Center Director for THE CITY OF SEATTLE, the entity that executed the foregoing Lease as lessor; and acknowledged to me that he/she signed the same as the City's free and voluntary act and deed, for the uses and purposes therein mentioned, and on oath stated that he/she was authorized to execute said instrument for the City.

I certify that I know or have satisfactory evidence that the person appearing before me and making this acknowledgement is the person whose true signature appears on this document.

WITNESS MY HAND AND OFFICIAL SEAL the day and year in this certificate above written.

Signature

(Print or Type Name)

NOTARY PUBLIC in and for the State of Washington,

Residing at___________________________________

My commission expires:________________________

Exhibit A

to the

Lease between the City of Seattle and SIFF Group

SIFF Mission Statement:

SIFF creates experiences that bring people together to discover extraordinary films from around the world. It is through the art of cinema that we foster a community that is more informed, aware, and alive.

Exhibit B (2 pages)

To the Lease between City of Seattle and SIFF Group

EXHIBIT C

To the Lease between City of Seattle and SIFF Group

SEATTLE CENTER

VISION STATEMENT

We are the nation's best gathering place. Supported by the people of Seattle, we are home to the finest cultural and educational organizations, sports teams, festivals, community programs and entertainment facilities. We exist to delight and inspire the human spirit in each person and bring us together as a rich and varied community.

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Attachment 1 to SIFF Lease Ordinance

April 10, 2008

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Attachment 1 to SIFF Lease Ordinance

April 10, 2008

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