EXHIBIT 10.42
STERLING PLAZA II - LEASE AGREEMENT
THIS LEASE is made and entered into this 7th day of March, 2000, by and between
STERLING REALTY ORGANIZATION CO., a Washington corporation ("Landlord"), and
iSHIP.COM, INC., a Washington corporation ("Tenant").
As parties hereto, Landlord and Tenant hereby agree as follows:
LEASE PROVISIONS
1. Lease Provisions and Exhibits.
(a) Leased Premises. The leased premises (the "Premises") are situated on
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the real property as more particularly described in Exhibit A attached
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hereto (the "Land"), and consists of those portions of the building
located at 3545 Factoria Boulevard S.E. in Bellevue, King County,
Washington, which are described in Section 1(b) below, which building
is commonly known as Sterling Plaza II (the "Building"), which is part
of a complex which will from time-to-time hereafter consist of one or
more buildings, including the Building and related grounds and parking
areas situated on the real property as more particularly described in
Exhibit B attached hereto and shown thereon (the "Project").
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(b) Agreed Floor Areas. Landlord and Tenant agree that the floor area of
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the Premises is approximately 75,510 rentable square feet, which area
is comprised of the entire first, second, third and fourth floors of
the Building. Landlord and Tenant agree that the total floor area of
the Building is approximately 92,866 rentable square feet. Usable
square feet shall be calculated according to Building Owners and
Managers Association International ("BOMA") standards namely, the
"Standard Method for Measuring Floor Area in Office Buildings ANSI -
BOMA Z-65.1-1996". Rentable square feet shall also be determined in
accordance with BOMA based on the usable square footage measured,
except that the load factor for the apportioned common area of the
Building to be added to the usable area shall, for each full floor
occupied by Tenant, not be greater than seven percent (7%), and for
any partial floor occupied by Tenant, not be greater than ten percent
(10%) (subject to adjustment following actual measurement of the
Premises and the Building). A floor plan of Premises is attached as
Exhibit C.
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Landlord and Tenant agree that (1) reasonable attempts have been made
to determine the correct square footage used in this Lease based upon
plans for the Building, and (2) exact square footage shall be
determined following completion of the shell of the Building. Landlord
shall, at such time, inform Tenant in writing of its calculation of
exact square footage of the Premises and the Building. Landlord grants
Tenant the option to re-measure and challenge the Premises square
footage calculation, at Tenant's expense, within ninety (90) days
after receipt of Landlord's calculation. If Tenant's square footage
calculation differs from Landlord's calculation, Landlord will re-
measure the Premises at Landlord's expense to determine which
calculation is correct. Landlord and Tenant agree that any challenge
of the square footage calculation must be carried out within ninety
(90) days after the Commencement Date. Once the final areas of the
Premises and Building have been so determined and agreed upon by
Landlord and Tenant, rent, Tenant's Percentage of the Building, the
Tenant Improvement Allowance, and all other amounts based on such
areas shall be appropriately adjusted by written agreement between
Landlord and Tenant. After such 90-day period has expired, Landlord
and Tenant agree to mutually waive any and all rights, claims, or
liabilities against one another as they relate to the calculation of
square footage to determine rents and other costs in this Lease.
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(c) Addition to Agreed Floor Area of Premises; Cancellation of Sterling
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Plaza I Lease. Tenant shall have until October 2, 2000, to
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irrevocably notify Landlord in writing of Tenant's election to add the
fifth floor of the Building, consisting of approximately 17,356
rentable square feet, to the Premises by no later than April 15, 2001
(as such date may be adjusted based on Landlord's substantial
completion of the tenant improvements) (the "Fifth Floor Notice"). If
Tenant has delivered the Fifth Floor Notice to Landlord prior to the
end of business on October 2, 2000, then Tenant shall have until
October 1, 2001, to provide Landlord with written notice of its
election to cancel that certain lease between Landlord and Tenant
dated July 15, 1999, relating to the Fifth Floor of Sterling Plaza I
(the "Sterling Plaza I Lease"). Such cancellation must provide at
least six (6) months notice of the termination date for the Sterling
Plaza I Lease, but shall otherwise be without cost or penalty to
Tenant. If Tenant does not deliver the Fifth Floor Notice to Landlord
by October 2, 2000, then Tenant must give Landlord written notice of
its election to cancel the Sterling Plaza I Lease prior to the close
of business on October 2, 2000, with such cancellation effective no
sooner than April 2, 2001. If Tenant fails to give Landlord such
cancellation notice by October 2, 2000, then the Sterling Plaza I
Lease shall remain in full force and effect for the remainder of its
term.
(d) Tenant's Percentage of the Building. "Tenant's Percentage of the
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Building" is equal to 81.3%, calculated by dividing the number of
rentable square feet in the Premises (75,510) by the number of
rentable square feet in the Building (92,866). Tenant's Percentage of
the Building shall be appropriately adjusted as provided in Section
1(b) above and at any time during this Lease that the area of the
Premises or the Building changes.
(e) Lease Term.
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(1) Initial Lease Term. The "Initial Lease Term" for the Premises
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will commence, on a floor-by-floor basis, fifteen (15) days
following Landlord's substantial completion of the shell and core
of the Building (as detailed on Exhibit D attached hereto) and
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the tenant improvements (the scope of which is described on
Exhibit E attached hereto), including without limitation the
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following:
(A) the utility and other systems servicing the Building and
necessary for the operation of the Building or Tenant's
occupancy and full enjoyment of the Premises (such as
elevators, plumbing, heating, ventilating, air conditioning,
electrical and security systems) shall be completed and in
good order and operating condition except for details of
construction, decoration and mechanical adjustments which do
not materially interfere with Tenant's use of the Premises;
(B) The lobby of the Building and the entrances and public
portions (including the garage), stairways, corridors and
elevators (including freight elevators) of the Building
shall have been finished (except for details of
construction, decoration and mechanical adjustments which do
not materially detract from the appearance of such areas or
materially interfere with their use for normal purposes) and
shall be in a clean and orderly condition affording
reasonable access to all portions of the Premises;
(C) The exterior of the Building (including the installation of
glass therein) shall have been completed except for minor
portions thereof which in the aggregate do not materially
affect Tenant's use of the Premises; and
(D) the tenant improvements on such floor have been
substantially completed (meaning they are fully completed in
accordance with the approved plans and
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specifications and ready for use by Tenant except for minor
punchlist items that do not materially affect Tenant's use
thereof).
Additionally, Landlord shall have obtained a temporary
Certificate of Occupancy for the Building and a temporary
Certificate of Occupancy with respect to such floor of the
Premises, each issued by the City of Bellevue.
Tenant may use the fifteen (15) day period following substantial
completion, as described above, to move its furniture and
fixtures into the Premises. Each such date, on a floor-by-floor
basis, is the "Commencement Date." The Initial Lease Term will
expire on that date which is the last day of the month eight (8)
years following the last Commencement Date to occur for floors
one through four. Landlord and Tenant shall confirm in writing
the Commencement Date applicable to each floor of the Premises.
Landlord and Tenant estimate that the Commencement Date shall be
as follows for each of the floors: (i) first floor: February 1,
2001; (ii) second floor: February 15, 2001; (iii) third floor:
March 1, 2001; and (iv) fourth floor: March 15, 2001.
(2) Conditions to Commencement of Initial Lease Term. In order for
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the Initial Lease Term to commence, the acquisition of Tenant by
Stamps.com, Inc. must have occurred, and Tenant must have
provided evidence of the same satisfactory to Landlord.
(3) Boundary Line Adjustment. Landlord has caused a boundary line
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adjustment involving the Land and the land on which Sterling
Plaza I is located (the "Sterling Plaza I Property") to be
recorded in the real property records of King County, Washington.
Landlord hereby indemnifies Tenant with respect to any loss,
cost, damage or expense incurred by Tenant in the event Landlord
fails to obtain written approval from New York Life Insurance
Company ("NYLIC"), Landlord's lender on Sterling Plaza I, of the
boundary line adjustment necessary to legally separate the Land
from the Sterling Plaza I Property which is encumbered by a deed
of trust in favor of NYLIC.
(4) Option to Renew the Lease. Provided Tenant is not then in
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default under this Lease beyond any applicable notice an cure
periods, either at the time notice of exercise is given or upon
expiration of the initial term of this Lease, Tenant shall have
the option to extend the term of this Lease for two (2) renewal
terms of five (5) years (each, a "Renewal Term"). Except for the
monthly rent described below and other economic terms, the terms,
covenants, and conditions of this Lease shall remain unchanged
during each Renewal Term (unless otherwise mutually agreed by
Landlord and Tenant). Tenant may exercise the option by giving
written notice of exercise ("Tenant's Exercise Notice") to
Landlord not earlier than fourteen (14) months but at least
eleven (11) months prior to the expiration of the Initial Lease
Term or the first Renewal Term, as applicable. If Tenant's
Exercise Notice is not timely given, the option to renew (and any
subsequent option to renew) shall terminate.
(5) Determination of Market Rental Rate. The rent to be paid during
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each Renewal Term will be the then-market rental rate based upon
rates prevailing at the time of commencement of the Renewal Term
for comparable leases in comparable office buildings located in
the vicinity of the I-90 corridor in the City of Bellevue,
Washington. Comparable leases shall include leases of a similar
duration for tenants which are not directly or indirectly
affiliated with their Landlord. Within ninety (90) days after
receipt of Tenant's Exercise Notice, Landlord will provide Tenant
with a written proposal for rent during the upcoming Renewal
Term. Within sixty (60) days after Tenant's receipt of
Landlord's written proposal, Tenant shall provide Landlord with a
written response. If, within sixty (60) days after Tenant's
written response is received by Landlord, the parties are unable
to reach an agreement as to the rental rate applicable during the
Renewal Term, the then-market rental rate will be established as
follows: Landlord and Tenant shall each, by that date which is
three (3)
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months prior to the commencement of the upcoming Renewal Term,
retain an individual with substantial experience in the appraisal
of commercial office property located in the Seattle-Bellevue
metropolitan area and holding a designation of "MAI" or
equivalent professional qualification (an "Appraiser"). The two
Appraisers retained shall, within two (2) weeks of their
appointment, appoint a third Appraiser. By that date which is two
(2) months prior to the commencement of the upcoming Renewal
Term, each Appraiser shall, through his or her independent
research, determine the then-market rental rate (exclusive of
triple-net additional rent) that he or she believes to be
applicable to the Premises during the upcoming Renewal Term, and
shall provide written notice of the same to Landlord, Tenant and
the other Appraisers (the "Appraised Rent"). The Appraised Rents
determined by the two Appraisers that are closest in dollar
amount to one another shall be averaged, and the resulting number
shall be the base rent for the upcoming Renewal Term. Landlord
and Tenant shall each bear the cost of the Appraiser it appoints,
and shall share equally the cost of the third Appraiser.
Notwithstanding the foregoing, in no event shall the base rent
payable during any Renewal Term be less than the base rent
payable during the last month of Initial Lease Term or the first
Renewal Term, as applicable.
(f) Rent. The monthly rent for the Premises shall commence, on a floor-
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by-floor basis, on the Commencement Date. The annual base rent for
the Premises, on a per rentable square foot basis, is as follows:
1st year of Initial Lease Term: $23.00
2nd year of Initial Lease Term: $23.58
3rd year of Initial Lease Term: $24.17
4th year of Initial Lease Term: $24.78
5th year of Initial Lease Term: $25.40
6th year of Initial Lease Term: $26.04
7th year of Initial Lease Term: $26.69
8th year of Initial Lease Term: $27.36
together with additional rent as provided in Section 8 of this Lease.
The "first year" of the Initial Lease Term shall be the period from
the first Commencement Date to the end of the twelfth (12th) month
after the last Commencement Date. Such base rent shall be payable in
equal monthly installments. Rent for any partial month at the
beginning of the Initial Lease Term shall be prorated on the basis of
the number of days elapsed. Landlord and Tenant shall confirm in
writing the amount of base rent due based on the final calculations
of, or any adjustments to, the floor area of the Premises. Rent is to
be paid in advance on or before the first day of each month without
offset or deduction at the offices of Landlord, Sterling Realty
Organization Co., 600 - 106th Avenue NE, Suite 200, Bellevue,
Washington 98004, or P.O. Box 91723, Bellevue, Washington 98009, or
such other place designated by Landlord.
(g) Letters of Credit; Security Deposit.
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(1) Letter of Credit No. 1. Tenant shall, on or before March 13,
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2000, provide to Landlord an irrevocable letter of credit
("Letter of Credit No. 1") in the amount of $1,812,240.00
(calculated by multiplying the 75,510 rentable square foot floor
area of the Premises by $24.00), issued by a bank reasonably
satisfactory to Landlord and in the form attached hereto as
Exhibit F, as security for Tenant's performance of its
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obligations under this Lease. If Tenant fails to deliver Letter
of Credit No. 1 to Landlord by March 13, 2000, then for each day
thereafter until Letter of Credit No. 1 is delivered to Landlord,
there will be a day-for-day delay in the target Commencement
Dates set forth in Section 1(e) above. The amount of Letter of
Credit No. 1 shall be adjusted based on the final determination
of floor area under Section 1(b) above, and Tenant shall increase
the amount of Letter of Credit No. 1 when any floor area is,
during the Initial Lease Term,
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added to the Premises in accordance with the provisions of this
Lease. The amount of Letter of Credit No. 1 shall be reduced to
zero in eight (8) annual reductions, each of 12.5% of the
original amount of Letter of Credit No. 1, commencing on the last
Commencement Date to occur (as set forth in Section 1(e)(1)
above) and on each subsequent anniversary thereof. If Tenant is
in default of its obligations under this Lease, Landlord may so
certify to the issuer of Letter of Credit No. 1, and upon
presentation, such issuer shall cause Letter of Credit No. 1 to
be drawn down in its entirety and paid to Landlord. If the amount
drawn down by Landlord under Letter of Credit No. 1 is in excess
of the amount necessary to cure Tenant's default under this
Lease, then Landlord shall hold the remainder of such funds as a
security deposit (the "Security Deposit") for the account of
Tenant. Landlord's obligations with respect to the Security
Deposit are those of a debtor and not a trustee. Landlord may
maintain such sums separate and apart from Landlord's general
funds or may commingle them with Landlord's general or other
funds. Landlord is not required to pay Tenant interest on such
sums, or any portion thereof.
(2) Letter of Credit No. 2. If, at any time after the first thirty
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(30) months of the Initial Lease Term, Stamps.com, Inc. has a net
operating loss, measured over the previous four calendar
quarters, that is greater than one-half the amount of Stamps.com,
Inc.'s then-current working capital, all as determined in
accordance with generally accepted accounting principles, Tenant
shall provide to Landlord an additional irrevocable letter of
credit issued by a bank reasonably satisfactory to Landlord and
in the form attached hereto as Exhibit F in an amount equal to
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the then-rentable square foot floor area of the Premises
multiplied by $10.00 ("Letter of Credit No. 2"). Letter of
Credit No. 2 shall remain posted with Landlord for so long as
Stamps.com, Inc.'s financial condition remains as stated in the
preceding sentence. If Tenant is in default of its obligations
under this Lease, Landlord may so certify to the issuer of Letter
of Credit No. 2, and upon presentation, such issuer shall cause
Letter of Credit of Credit No. 2 to be drawn down in its entirety
and paid to Landlord. If the amount drawn down by Landlord under
Letter of Credit No. 2 is in excess of the amount necessary to
cure Tenant's default under this Lease, then Landlord shall hold
the remainder of such funds as a Security Deposit for the account
of Tenant.
(h) Financial Statements. Promptly following the end of each fiscal
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quarter, Tenant shall provide Landlord with copies of financial
statements for Tenant and Stamps.com, Inc. for the previous fiscal
quarter, certified by Tenant's chief financial officer and the chief
financial officer of Stamps.com, Inc., respectively, to be true,
accurate and complete. Financial statements shall be required for
only Stamps.com, Inc. if Tenant and Stamps.com, Inc. report on a
consolidated basis. Landlord shall keep all such financial
information confidential, provided that Landlord may disclose such
information, on a confidential basis, to Landlord's mortgagee or
prospective purchasers of the Land and the Building.
(i) Guaranty of Lease. Stamps.com, Inc., Tenant's parent company
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following the acquisition that is a condition to the commencement of
this Lease, shall guaranty the payment and performance of all of
Tenant's obligations under this Lease, as evidenced by its execution
of the Guaranty of Lease, the form of which is attached hereto as
Exhibit G.
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(j) Permitted Uses. The Premises shall be used only for general office
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purposes and uses ancillary thereto (including without limitation a
computer server room, auditorium, conference room, exercise facility
and cafeteria and dining facility, but only so long as such uses are
ancillary to the general office use of the Premises, used only by
employees of Tenant (unless otherwise agreed in writing by Landlord),
and such ancillary uses do not require any additional parking under
City of Bellevue zoning ordinances) and for no other purpose or use
without the written consent of Landlord.
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GENERAL TERMS AND CONDITIONS
2. Premises. Landlord does hereby lease to Tenant, and Tenant does hereby
lease from Landlord, upon the terms and conditions herein set forth, the
Premises described in Section 1(a) hereof.
3. Term. The Lease term shall be for the period stated in Section 1(e)
hereof. The Lease term shall commence on the Commencement Date specified
in Section 1(e). Neither Landlord nor any agent or employee of Landlord
shall be liable for any damage or loss due to Landlord's inability or
failure to deliver possession of the Premises to Tenant as provided herein.
4. Rent. Tenant shall pay Landlord the monthly rent stated in Section 1(f)
hereof without demand, deduction or offset (except as otherwise expressly
provided in this Lease), payable in lawful money of the United States in
advance on or before the day specified in Section 1(f) to Landlord at the
offices of Landlord or its building manager at the place specified in
Section 1(f), or to such other party or at such other place as Landlord may
hereafter from time to time designate in writing. Rent for any partial
month at the beginning or end of the Lease term shall be prorated.
Notwithstanding anything in Section 8 hereof, the rent payable by Tenant
shall in no event be less than the rent specified in Section 1(f) of this
Lease.
(a) Late Fees On Overdue Rent. With respect to the first two (2) times
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during any calendar year of the Lease term that Tenant fails to pay
any rent, additional rent or other sums payable by Tenant to Landlord
hereunder in a timely manner, Landlord shall provide written notice to
Tenant so stating (each, a "Late Notice"). If such payment is not
received within three (3) days following receipt of the Late Notice,
then such rent, additional rent or other sums payable by Tenant to
Landlord shall bear interest at a rate equal to three percent (3%) per
annum, compounded monthly, above the prime lending rate as publicly
announced from time to time by Bank of America, calculated from the
date of delinquency to the date of payment (the "Default Rate"). If,
during any calendar year of the Lease term Tenant has received two (2)
Late Notices and Tenant fails to pay to Landlord any rent, additional
rent or other sums due hereunder when due, then such amounts shall
bear interest at the Default Rate from the date of delinquency to the
date of payment.
(b) Collection Fee on Overdue Rent. With respect to the first two (2)
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times during any calendar year of the Lease term that Tenant fails to
pay its rent in a timely manner, Landlord shall provide a Late Notice
to Tenant. If such payment is not received within three (3) days
following receipt of the Late Notice, then such rent, additional rent
or other sums payable by Tenant to Landlord shall also be subject to a
collection fee equal to three percent (3%) of the amount due. If,
during any calendar year of the Lease term Tenant has received two (2)
Late Notices and Tenant fails to pay to Landlord any rent, additional
rent or other sums due hereunder when due, then such amounts shall be
subject to a collection fee equal to three percent (3%) of the amount
due.
5. Notices. All notices under this Lease shall be in writing and delivered in
person or sent by facsimile or by registered or certified mail to Landlord
at the address below, to Tenant at the Premises after the Commencement Date
and at the address below prior to the Commencement Date, and to the holder
of any first mortgage or deed of trust at such place as such holder shall
specify to Tenant in writing; or at such other facsimile number or address
as may from time to time be designated by each party in writing. Notices
will be deemed to have been given on the date sent by facsimile with
evidence of receipt by the intended party, on the date delivered in the
case of personal delivery or, if mailed, on that date which is two (2) days
after the postmark thereof.
LANDLORD: Sterling Realty Organization Co.
600 - 106th Avenue NE, Suite 200
Bellevue, Washington 98004
Attention: Property Manager
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Telephone: (425) 455-8100
Facsimile No.: (425) 455-8165
TENANT: iShip.com, Inc.
3535 Factoria Boulevard S.E., Suite 500
Bellevue, Washington 98006
Attention: Stephen M. Teglovic, CEO
Telephone: (425) 602-4848
Facsimile No.: (425) 602-5025
with a courtesy copy to John E. Jamerson, CFO, at Tenant's
address stated above, provided that Landlord's failure to
provide the courtesy copy shall not delay or defeat the
effectiveness of any notice given to Tenant.
6. Uses. The Premises are to be used only for the uses specified in Section
1(j) hereof (the "Permitted Uses") and for no other business or purpose
without the written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant shall not commit or allow any acts to be
done in or about the Premises that are unlawful or that will cause an
increase to the existing rate of insurance on the Building. Tenant shall
not commit or allow to be committed any waste upon the Premises, or create
or allow to be created any public or private nuisance in the Building.
Tenant shall not, without the written consent of Landlord, use any
apparatus, machinery or device in or about the Premises which will cause
any substantial noise or vibration or any increase in the normal use of
electric power. If any of Tenant's office equipment should disturb the
quiet enjoyment of any other tenant in the Building, then Tenant shall
provide adequate insulation, or take other such action as may be necessary
to eliminate the disturbance. Tenant shall comply with all laws and
regulations relating to its use of the Premises, including laws relating to
Hazardous Materials (defined in Section 43 below) and shall observe such
reasonable rules and regulations as may be adopted and published by
Landlord from time to time for the safety, care and cleanliness of the
Premises or the Building, and for the preservation of good order therein,
including but not limited to any Rules and Regulations currently in effect,
which are attached to this Lease as Exhibit H. Such rules and regulations
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shall not be inconsistent with the terms of this Lease and shall be
enforced against all tenants of the Building in a non-discriminatory
manner.
7. Services and Utilities. Landlord shall furnish the Premises with
electricity for lighting and operation of customary office machines, water,
and elevator service, and, during Normal Business Hours, lighting, heat and
normal air conditioning. "Normal Business Hours" are defined as 7:00 a.m.
to 6:00 p.m., Monday through Friday, and 7:00 a.m. to 12:00 p.m. on
Saturdays. Outside Normal Business Hours, utility services will be
provided to the Premises, and Tenant shall pay Landlord for the actual cost
of providing lighting, heat and normal air conditioning, including the
associated electrical and maintenance costs. Tenant shall have access to
the Building 24 hours per day, 7 days per week, through use of the "key
card" security system.
(a) Extra Services. During all hours which are not business hours,
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Landlord shall furnish all of such services set forth above, except the
following:
(1) Utility Services. If requested by Tenant, Landlord shall furnish
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heat and air conditioning to the Premises at times other than
Normal Business Hours, and Landlord's actual cost of providing
such services to Tenant shall be paid by Tenant to Landlord as
Additional Rent.
(2) Janitorial Services. Janitorial service shall be provided each
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day except for Fridays, Saturdays or legal holidays, and shall be
comparable to such services provided in Class A office buildings
in Bellevue, Washington. The costs of any janitorial or other
services provided or caused to be provided by Landlord to Tenant
which are in addition to the services ordinarily provided to
tenants of the Building shall be payable by Tenant as Additional
Rent.
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(3) Increased Utility Loads. Landlord shall be entitled to install
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and operate at Tenant's sole cost and expense a
monitoring/metering system in the Premises to measure the demands
on the electricity and HVAC systems of the Building. Landlord
represents and warrants that the Building's electrical system
will provide an electrical load of at least 4.5 total watts per
square foot. Tenant shall comply with Landlord's reasonable
instructions for the use of drapes, blinds and thermostats in the
Building.
(b) Interruption to Services. Landlord shall not be liable for any loss,
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injury or damage to property caused by or resulting from any
variation, interruption, or failure of such services due to any cause
outside of Landlord's reasonable control, except if such interruption
or failure continues for forty-eight (48) hours or more, in which case
rent shall be abated for that time after forty-eight (48) hours until
such interruption ceases. In the event of such variation,
interruption or failure, however, Landlord shall use reasonable
diligence to restore such service. Except as provided above, no
temporary interruption or failure of such service incident to the
making of repairs, alterations or improvements or due to accident or
strike, or conditions or events beyond Landlord's reasonable control
shall be deemed an eviction of Tenant or relieve Tenant from any of
Tenant's obligations hereunder.
8. Costs of Services and Utilities.
(a) Definitions. As used herein, the following terms have the following
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respective meanings unless the context otherwise specifies or clearly
requires.
(1) "Lease Year" means a calendar year commencing January 1 and
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ending December 31.
(2) "Operating Costs" means all reasonable and necessary expenses,
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based on Landlord's reasonable business judgment and customary
practices, paid or incurred by Landlord for maintaining,
operating and repairing the Building (including the parking
facilities), the Land, and the personal property used in
conjunction therewith, to the extent not paid directly by Tenant,
including but not limited to all expenses paid or incurred by
Landlord for Property Taxes as defined in Section 9 below;
insurance required by Section 17(b)(2) below, by Landlord's
mortgagee, or otherwise in Landlord's reasonable discretion;
electricity during Normal Business Hours, water, gas, sewer,
refuse collection, telephone charges and security service not
chargeable to tenants and similar utilities services; the cost of
supplies and window washing, cost of services of independent
contractors, cost of compensation (including employment taxes and
fringe benefits) of all persons who perform duties in connection
with such Operating Costs and any other expense or charge which
in accordance with generally accepted accounting and management
principles would be considered an expense of maintaining,
operating or repairing the Building, together with a property
management fee equal to four percent (4%) of the monthly base
rent for the Premises. Operating Costs shall include the cost of
replacing cracked or broken exterior windows, but shall not
include (A) costs for maintaining and repairing structural
components of the Building; (B) any depreciation or amortization
costs related to the Building or any portion or component of the
Building or any equipment or other property used in connection
with the Building, except as specifically permitted by the terms
of this Lease; (C) any loan payments, principal or interest, or
ground lease or similar payments; (D) any leasing costs,
including brokerage commissions, legal fees, vacancy costs, and
refurbishment or improvement expenses, in connection with the
premises of a particular tenant; (E) any collection costs,
including legal fees, or bad debt losses or reserves; (F) any
costs or expenses resulting from Landlord's violation of any
agreement to which it is a party or any applicable laws or
ordinances or governmental rules, regulation, or orders; (G)
Landlord's general corporate overhead and general and
administrative expenses in excess of costs and expenses directly
attributable to the operation and management of the Building; (H)
any cost or expenses which would not,
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under generally accepted accounting and management principles, be
regarded as a maintenance and operating expense; or (I) the items
listed on Exhibit I to this Lease. All Operating Costs
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associated with the maintenance of the parking areas will be pro
rated among users of the Project on the following basis: Tenant's
pro rata share of such Operating Costs for the Parking areas of
the Project will be the fraction, the numerator of which is
75,510 square feet (i.e. the rentable area of the Premises), as
such area may be adjusted in accordance with the terms of this
Lease, and the denominator of which is the sum of the rentable
areas expressed in rentable square feet of all buildings now or
hereafter located in the Project (pro rated as to the fraction of
any year from the time any such new building is completed and
placed in service). Currently there are three buildings located
in the Project, the Building, Sterling Plaza I (which has 127,401
rentable square feet) and the Factoria Cinemas (which has 47,621
rentable square feet). All Operating Costs associated with the
operation of the parking areas, including any parking control
mechanism or valet parking service, will be pro rated among users
of the Project and the users of the 12600 Building (which has
52,227 rentable square feet).
(3) "Estimated Operating Costs" means Landlord's estimate of
-------------------------
Operating Costs for the following Lease Year to be given by
Landlord to Tenant pursuant to Section 8(b)(1).
(b) Additional Rent. Tenant shall pay to Landlord as rent, in addition to
---------------
the rent provided in Section 1(f) above, all Operating Costs allocable
to the Premises and any and all other sums expressly provided for
hereunder.
(1) Rent Adjustment for Estimated Operating Costs. Landlord shall,
---------------------------------------------
prior to the first Commencement Date and within 90 days after the
commencement of each Lease Year thereafter, furnish to Tenant a
written statement setting forth (A) Tenant's proportionate share
of Estimated Operating Costs for such Lease Year, and (B) the
amount of Additional Rent payable monthly during such Lease Year,
which will equal one-twelfth (1/12) of the amount. If such
Estimated Operating Costs are furnished after the commencement of
the Lease Year, Tenant shall also make a retroactive lump-sum
payment equal to the amount of such excess multiplied by the
number of months during the Lease Year for which no such
adjustment was paid.
(2) Actual Operating Costs. Within ninety (90) days after the close
----------------------
of each Lease Year during the term hereof, Landlord shall deliver
to Tenant a written statement setting forth the actual Operating
Costs during the preceding Lease Year. If such costs for any
Lease Year exceed the Estimated Operating Costs paid by Tenant to
Landlord pursuant to Section 8(b)(1) for such Lease Year, Tenant
shall pay the amount of such excess to Landlord as additional
rent within thirty (30) days after receipt of such statement by
Tenant. If such statement shows such costs to be less than the
amount paid by Tenant to Landlord pursuant to Section 8(b)(1),
then the amount of such overpayment shall be credited toward the
next monthly rent payable by Tenant or, if this Lease has
terminated, shall be paid to Tenant within thirty (30) days.
(3) Determinations. The determination of Operating Costs and
--------------
Estimated Operating Costs shall be made by Landlord in its
reasonable business judgment. If Tenant notifies Landlord in
writing within three (3) years after the receipt by Tenant of
Landlord's statement setting forth the preceding years' Operating
Costs, then Tenant may review or audit Landlord's books and
records pertaining to Operating Costs. In the event that any
such audit, conducted in accordance with generally accepted
accounting principles, reveals a discrepancy of three percent
(3%) or more between Landlord's statement of the actual Operating
Costs for a Lease Year and the amount of such Operating Costs
determined by such audit, then if the Operating Costs were
overstated Landlord shall reimburse to Tenant the excess amount
paid by Tenant and Landlord shall pay for the
-9-
reasonable cost of such audit; but if the Operating Costs were
understated then Tenant shall pay to Landlord the amount of such
deficiency and Tenant shall pay for the cost of such audit.
Rent due pursuant to this section shall be Additional Rent
payable by Tenant hereunder, and in the event of nonpayment
thereof, Landlord shall have similar rights with respect to such
nonpayment as it has with respect to any other nonpayment of rent
hereunder.
(4) Extra Services Requested by Tenant. If Tenant requests Landlord
----------------------------------
to provide extra services not included in Operating Costs, and
Landlord agrees to do so, such services will, during the Initial
Term of this Lease, be charged at a rate of Fifty Dollars
($50.00) per hour for Landlord's agent to perform or supervise
such services for the repair, maintenance and operation of the
Premises as Tenant may request. Landlord will separately invoice
Tenant for the cost of such services, and the amount due shall be
Additional Rent payable by Tenant hereunder.
(5) End of Term. If this Lease terminates on a day other than the
-----------
last day of a Lease Year, the amount of any adjustment between
Estimated Operating Costs and Actual Operating Costs with respect
to the Lease Year in which such termination occurs will be
prorated on the basis which the number of days from the
commencement of such Lease Year to and including such termination
date bears to 365, and any amount payable by Landlord to Tenant
or Tenant to Landlord with respect to such adjustment is payable
within thirty (30) days after delivery of the Statement of
Operating Costs with respect to such Lease Year.
9. Property Taxes. "Property Taxes" means all real property taxes and
assessments and personal property taxes, charges and assessments levied
with respect to the Land, the Building, and any improvements, fixtures and
equipment, and all other property of Landlord, real or personal, located in
or on the Building and used in connection with the operation of the
Building. In addition to the foregoing, Property Taxes shall include a pro
rata portion of all real property taxes and assessments for the driveway,
parking, and related landscaped areas of the Project (the "Parking Lot
Taxes"). The portion of the Parking Lot Taxes allocated to the Tenant
shall be equal to the percentage of rentable space occupied by the Tenant
compared to the total amount of rentable square feet contained in the
Project (including the Factoria Cinemas). Tenant's share of Parking Lot
Taxes shall be computed by multiplying the total Parking Lot Taxes by a
fraction, the numerator of which is 75,510 (i.e. the rentable area of the
Premises), and the denominator of which is the sum of the rentable areas
expressed in square feet of all buildings now or hereafter located in the
Project (pro rated as to the fraction of any year from the time any such
new building is completed and placed in service). Currently there are
three buildings located in the Project, the Building (which has 92,866
rentable square feet, Sterling Plaza I (which has 127,401 rentable square
feet) and the Factoria Cinemas (which has 47,621 rentable square feet), for
a total of 267,888 rentable square feet.
10. Taxes on Rents and Personal Property. If any governmental authority shall
in any manner levy a tax on rents payable under this Lease or rents
accruing from Tenant's use of property, or such a tax in any form against
Landlord measured by income derived from the leasing or rental of the
Building, such tax shall be paid by Tenant either directly or through
Landlord; provided, however, that Tenant shall not be liable to pay any
state or federal income tax imposed on Landlord.
Tenant shall pay prior to delinquency all personal property taxes with
respect to all property of Tenant located on the Premises or the Building
and shall provide promptly upon request of Landlord written proof of such
payment.
11. Acceptance of Premises. Landlord shall deliver the Premises to Tenant in a
clean and orderly condition and in accordance with the provisions of
Section 1(e) above.
-10-
12. Improvements. Subject to Section 21 of this Lease, upon the expiration or
sooner termination of this Lease, all improvements and additions to the
Premises made by Tenant shall become the property of Landlord.
13. Alterations and Care of Premises. Tenant shall take good care of the
Premises and shall promptly make all necessary repairs and maintenance,
except those to be made by Landlord as provided herein. Additionally, if
Tenant elects to upgrade the generator that Landlord would otherwise have
provided to operate the life safety systems of the Building, Tenant shall,
during the term of this Lease, maintain such generator in accordance with
all manufacturer's instructions relating thereto.
(a) Except as expressly permitted by the terms of this paragraph, Tenant
shall not make any alterations, additions or improvements in or to the
Premises, or make changes to locks on doors, or add, disturb or in any
way change any floor covering, wall covering, fixtures, plumbing or
wiring, without first obtaining the written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. Landlord may,
in determining whether to grant or withhold its consent to a
particular alteration, addition or improvement, consider the
likelihood that the particular alteration, addition or improvement
will be usable by a subsequent tenant of the Premises.
Notwithstanding the foregoing, Landlord's consent shall not be
required for changes that cost Fifty Thousand Dollars ($50,000) or
less and do not affect Building systems. If Landlord withholds its
consent to a particular alteration, addition or improvement based on
the unlikelihood that a subsequent tenant would find that alteration,
addition or improvement usable, then Tenant may proceed to make the
particular alteration, addition or improvement, but shall remove it
from the Premises prior to the expiration or earlier termination of
this Lease. Within thirty (30) days following the completion of any
alterations or improvements, Tenant shall provide Landlord with "as-
built" plans showing the alterations or improvements made to the
Premises.
(b) If Landlord's consent is required, then prior to Tenant commencing
work on any alteration, addition or improvement to the Premises,
Tenant shall submit to Landlord two (2) copies, and, at the request of
Landlord, shall submit to any mortgagee holding a mortgage or deed of
trust encumbrance on the Land one (1) copy, of full and complete plans
and specifications detailing the design and plan of improvements for
any such alteration, addition or improvement.
Landlord does not and will not make any covenant or warranty, express
or implied, that any such plans or specifications submitted by Tenant
are accurate, complete or in any way suited for their intended
purpose. Landlord shall either approve or disapprove plans within
five (5) business days and, if approved, return a signed, approved
copy to Tenant. Landlord will not unreasonably withhold or delay its
approval. In the event that the plans are not approved by Landlord,
Landlord shall inform Tenant of the reasons for its disapproval and
Tenant shall have twenty (20) days in which to submit revised plans to
Landlord for approval. Tenant shall not unreasonably refuse to
satisfy any objections made by Landlord to the plans and
specifications. Any objections Tenant has to Landlord's objection
shall be submitted to Landlord in writing within the twenty (20) day
period. Landlord shall respond to such revised plans within five (5)
business days after their submittal by Tenant. A failure of one party
to give any notice to the other party within the period provided for
doing so shall be deemed to constitute approval of the plans and
specifications or the objections thereto, as appropriate. Within
thirty (30) days following the completion of any alterations or
improvements, Tenant shall provide Landlord with "as-built" plans
showing the alterations or improvements made to the Premises.
(c) All such work so done by Tenant shall be done in accordance with all
laws, ordinances, and rules and regulations of any federal, state,
county, municipal or other public authority and/or Board of Fire
Underwriters. Tenant expressly covenants and agrees that no liens of
mechanics, materialmen, laborers, architects, artisans, contractors or
subcontractors engaged by or through Tenant, or any other lien of any
kind whatsoever arising by or through Tenant, shall be created against
or imposed upon the Premises, the Land or the Building, and that in
the event any such
-11-
claims or liens of any kind whatsoever shall be asserted or filed by
any persons, firms or corporations performing labor or furnishing
material in connection with such work, Tenant shall pay off or cause
the same to be discharged of record within five (5) days of
notification thereof. Except as provided in Section 21 below, all
alterations, improvements, or changes made by Tenant to the Premises
shall be the property of Landlord and shall remain upon and be
surrendered with the Premises upon the termination of this Lease;
provided, however, that Tenant shall remove any alteration, addition
or improvement made to the Premises by Tenant subsequent to the
completion of the initial tenant improvements to be made pursuant to
Exhibit E and to which Landlord withheld its consent under the terms
---------
of Section 13(b) above. Tenant will remove any such alterations,
additions or improvements made by Tenant prior to Tenant surrendering
possession of the Premises to Landlord, and repair any damage caused
to the Premises thereby, all at the sole cost and expense of Tenant.
After the beginning of each Lease Year during the term of this Lease
or any Renewal Term, Landlord may deliver a certificate to Tenant
requesting that Tenant provide Landlord with an itemized list of all
alterations, improvements or changes that Tenant has made to the
Premises during the previous Lease Year. Tenant shall complete the
certificate and return the same to Landlord within thirty (30) days
following the date on which it was received. In the event no
alterations or improvements were made during the previous Lease Year,
Tenant shall so indicate on the certificate provided.
All damage or injury done to the Building or the Premises or any
appurtenances to either by Tenant, or by Tenant's agents, invitees,
licensees, or employees, including the cracking or breaking of glass
of any windows and doors, shall be paid for by Tenant.
(d) Tenant shall not put curtains, draperies or other hangings on or
beside the windows in the Premises or place any furniture on the
patios or common areas without first obtaining Landlord's consent.
All normal repairs necessary to maintain the Premises in a tenantable
condition and consistent with the standards for a Class A office
building in the Bellevue metropolitan area shall be done by or under
the direction of Landlord, acting reasonably and in good faith.
Tenant shall promptly notify Landlord of any damage to the Premises
requiring repair, and if such repair is Landlord's obligation under
the terms of this Lease, Landlord shall make such repair within thirty
(30) days thereafter. If Landlord fails to respond to Tenant's notice
within the 30-day period provided for doing so, then Tenant may cause
the repairs to be accomplished. Landlord shall reimburse Tenant for
all reasonable costs and expenses incurred by Tenant in making the
repairs, and such reimbursement shall be made within thirty (30) days
of Landlord's receipt of an invoice for the amount of such costs and
expenses.
(e) Landlord shall be responsible for maintaining and repairing the
structural components of the Building at Landlord's sole cost. If
Tenant believes that there is a problem or defect in the structural
elements of the Building, including problems or defects in the
foundation, exterior walls, floors or the roof system, and also
including but not limited to safety aspects of the Building (as
determined under applicable building codes as in effect on the date
hereof), Tenant shall give Landlord notice of any such defect. Tenant
and Landlord shall cooperate to determine promptly whether any such
defect exists and to identify any damage to the Building resulting
from such defect. Landlord shall repair any such defect and resulting
damage. If Landlord fails to make any such repairs which can
reasonably be completed within fifteen (15) days, within thirty (30)
days after such determination, or fails to commence within thirty (30)
days after such determination and diligently proceed to complete any
such repairs which cannot reasonably be completed in fifteen (15)
days, Tenant shall have the right, but not the obligation, to cause
such repairs to be accomplished. Landlord shall reimburse Tenant for
all reasonable costs and expenses incurred by Tenant in making the
repairs, and such reimbursement shall be made within thirty (30) days
of Landlord's receipt of an invoice for the amount of such costs and
expenses. Landlord shall also maintain all common areas of the
Building (including the Building exterior, landscaping
-12-
and parking areas) in first-class condition and repair and consistent
with the standards for a Class A office building in the Bellevue
metropolitan area, at Landlord's cost but subject to reimbursement as
set forth in Section 8 above.
(f) Tenant shall, at the expiration or sooner termination of this Lease,
surrender and deliver the Premises to Landlord in as good or better
condition as when received by Tenant from Landlord or as thereafter
improved, reasonable use and wear and damage by fire or other insured
casualty excepted.
14. Liens and Insolvency. Tenant shall keep the Premises and the Building free
from any liens arising out of any work performed, materials ordered or
obligations incurred by Tenant. If Tenant becomes insolvent, voluntarily
or involuntarily bankrupt, or if a receiver, assignee or other liquidating
officer is appointed for the business of Tenant, then Tenant shall be
deemed to be in default under the terms of this Lease and Landlord may, in
addition to any other remedy provided in this Lease, terminate Tenant's
right of possession under this Lease at Landlord's option and in no event
shall the Lease or any rights or privileges hereunder be an asset of Tenant
under any bankruptcy, insolvency or reorganization proceedings.
15. Access. Tenant shall permit Landlord and its agents (including, but not
limited to any mortgagee holding a mortgage or deed of trust which is an
encumbrance against the Land) to enter into and upon the Premises but,
except in an emergency, only on advance reasonable notice and at reasonable
times for the purpose of inspecting the same or for the purpose of
repairing, altering or improving the Premises or the Building, with minimum
interference to Tenant. Nothing contained in this Section 15 shall be
deemed to impose any obligation upon Landlord not expressly stated herein
or elsewhere in this Lease. Landlord shall, on the same basis, have the
right to enter the Premises for the purpose of showing the Premises to
prospective tenants within 270 days prior to the expiration or sooner
termination of the Lease term.
16. Damage or Destruction. If the Building or the Premises are destroyed or
damaged by fire or other casualty insured against under Landlord's fire and
extended coverage insurance policy to the extent that more than fifty
percent (50%) of either is rendered untenantable, or if the Building or the
Premises are destroyed or materially damaged by any other casualty other
than those covered by such insurance policy, notwithstanding that the
Premises may be unaffected directly by such destruction or damage, Landlord
may, at its election, terminate this Lease by notice in writing to Tenant
within sixty (60) days after such destruction or damage. Such notice will
be effective thirty (30) days after receipt thereof by Tenant. Landlord
shall not be required to repair or restore fixtures, improvements, or other
property of Tenant. If Landlord elects to restore the Premises, then
Landlord shall so notify Tenant within sixty (60) days after such
destruction or damage, and shall begin the restoration work within thirty
(30) days of such date, in which event this Lease will continue in full
force and effect. If Landlord fails to notify Tenant of its election within
sixty (60) days after such destruction or damage, then Tenant may terminate
this Lease immediately upon written notice to Landlord. Tenant may also
terminate this Lease if the damage or destruction is reasonably anticipated
to render the Premises untenantable for one hundred eighty (180) days or
more, or if damage or destruction occurs within the last twelve (12) months
of the Lease term. Rent and all other amounts owing hereunder shall abate
for as long as and to the extent the Premises are rendered untenantable as
a result of any such destruction or damage, unless such damage or
destruction is due directly or indirectly to the intentional misconduct of
Tenant or its officers, contractors, licensees, agents, servants,
employees, guests, invitees or visitors, in which case there will be an
abatement of rent only to the extent Landlord collects rental loss
insurance proceeds.
(a) Business Interruption. Other than as provided in this Section 16
---------------------
above, no damages, compensation, or claim shall be payable by Landlord
to Tenant for inconvenience, loss of business, or annoyance arising
from any repair or restoration of any portion of the Premises or of
the Building as a result of fire or other casualty. Landlord shall
use its best efforts to effect such repairs promptly.
(b) Tenant Improvements and Personal Property. Landlord will not carry
-----------------------------------------
insurance of any kind on Tenant's furniture or furnishings or on any
other personal property fixtures, equipment, improvements, or
appurtenances owned or installed by Tenant, and Landlord shall not be
obligated to repair any damage thereto or replace the same.
-13-
17. Indemnification, Insurance and Waiver of Subrogation.
(a) Indemnification. It is understood and agreed that Landlord shall not
---------------
be liable for injury to any person, or for the loss of or damage to
any property (including property of Tenant) occurring in or about the
Premises from any cause whatsoever, except for that caused by
Landlord's negligence, willful misconduct or breach of its obligations
under this Lease. Tenant hereby indemnifies and holds Landlord
harmless from and against and agrees to defend Landlord against any
and all claims, charges, liabilities, obligations, penalties, causes
of action; liens, damages, costs and expenses (including attorneys'
fees) arising, claimed, charged or incurred against or by Landlord
from any matter or thing arising from Tenant's use of the Premises,
the conduct of its business or from any activity, work or other thing
done, permitted or suffered by Tenant in or about the Premises or
Common Areas, or in connection with the installation, operation,
maintenance, existence or removal of a satellite dish or antenna and
related facilities, if any, installed by Tenant on the roof of the
Building, whether arising from any breach or default in the
performance of any obligation on Tenant's part or to be performed
under the terms of this Lease, or arising from any act or negligence
of Tenant, or any officers, contractor, agent, employee, guest,
licensee, or invitee of tenant, and from all costs, attorneys' fees,
and liabilities incurred in or about the defense of any such claim
(including appeals) or any action or proceeding brought thereon and in
the event that any action or proceeding is brought against Landlord by
reason of such claim, except to the extent any of the foregoing is
caused by the negligence or willful misconduct of Landlord or
Landlord's breach of its obligations under this Lease. Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. The indemnification
provided for in this paragraph shall survive any termination or
expiration of this Lease. Landlord and its agents shall not be liable
for any loss or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain
which may leak from any part of the Premises or from pipes, appliances
or plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause
whatsoever, unless caused by or due to the negligence or willful
misconduct of Landlord, its agents or employees or Landlord's breach
of its obligations under this Lease. Landlord and its agents shall
not be liable for interference with the light or air to the Premises
or for any latent defect on the Premises. Tenant shall give prompt
notice to Landlord in case of casualty or accidents on or about the
Premises. Landlord shall indemnify, defend and hold Tenant harmless
from all loss, cost, expense and liability arising as a result of
Landlord's negligence or breach of its obligations under this Lease.
(b) Insurance.
---------
(1) Tenant's Insurance.
------------------
(A) Liability Coverage. During the entire Lease Term and at any
------------------
time prior to the Lease Term commencing with the day on
which possession of the Premises is delivered to Tenant for
any reason, Tenant shall, at its own expense, maintain
commercial general liability insurance with a reputable
insurance company or companies with minimum amounts of Two
Million Dollars ($2,000,000) combined single limit per
occurrence and in the aggregate for personal injuries and
property damage on or about the Premises, or in connection
with the installation, operation, maintenance, existence or
removal of a satellite dish or antenna and related
facilities, if any, installed by Tenant on the roof of the
Building, to indemnify both Landlord and Tenant against any
such claims, demands, losses, damages, liabilities and
expenses. Landlord and the management company, if any,
employed by Landlord with respect to the Building shall be
named as additional insureds and shall be furnished with a
certificate of insurance which shall bear an endorsement
that the same shall not
-14-
be canceled except upon not less than thirty (30) days'
prior written notice to Landlord.
(B) Property Coverage. Tenant shall, at its own expense,
-----------------
maintain during the Lease Term and at any time prior to the
Lease Term commencing with the date on which possession of
the Premises is delivered to Tenant for any reason,
insurance covering its furniture, fixtures, equipment, all
leasehold improvements and inventory in an amount equal not
less than 100% of the full replacement value thereof as
provided by basic form coverage with a special form
endorsement.
(C) Business Income and Extra Expense Coverage. Tenant shall
------------------------------------------
maintain business income and extra expense coverage at 100%
of Tenant's gross revenue for a period of twelve (12)
months.
(D) Commercial Auto Liability Coverage. Tenant shall maintain
----------------------------------
commercial auto liability insurance with a combined limit of
not less than One Million Dollars ($1,000,000) for bodily
injury and property damage for each accident. Such
insurance shall cover liability relating to any auto
(including owned, hired and non-owned autos).
(2) Landlord's Insurance. Landlord shall procure and maintain
--------------------
physical damage insurance covering all real and personal
property, excluding property paid for by tenants and not
reimbursed by Landlord or paid for by Landlord for which tenants
have reimbursed Landlord, located on or in, or constituting a
part of, the Building in an amount equal to one hundred percent
(100%) of the replacement value of all such property. Such
insurance shall afford coverage for damages resulting from (i)
perils covered by what is commonly referred to as special form
insurance (including water damage, but excluding flood), and (ii)
boilers and machinery coverage as appropriate for apparatus
located in the Building, and shall include Business Income and
Extra Expense coverage in such amounts as Landlord reasonably
deems appropriate. Landlord shall also procure and maintain
commercial general liability insurance with broad form general
liability endorsement covering all claims with respect to
injuries or damages to persons or property sustained in, on or
about the Building and the appurtenances thereto, including the
sidewalks and alleyways adjacent thereto, with limits of
liability no less than Two Million Dollars ($2,000,000) combined
single limit per occurrence and in the aggregate. Such limits
may be achieved through the use of umbrella liability insurance
otherwise meeting the requirements of this Section.
(c) Increase in Insurance Premium. Tenant shall not keep, use, sell or
------------------------------
offer for sale in or upon the Premises any article which may be
prohibited by the form of property insurance policy required to be
carried under this Lease. Tenant shall pay any increase in premiums
for property (including special form coverage) insurance that may be
charged during the term of this Lease on the amount of such insurance
which may be carried by Landlord on the Premises, the Building or the
Property of which the Premises are a part, resulting from Tenant's
particular use of the Premises, whether or not Landlord has consented
thereto. In such event, Tenant shall also pay any additional premiums
on the insurance policy that Landlord may carry for its protection
against the loss of business income through property damage. In
determining whether increased premiums are the result of Tenant's
particular use of the Premises, a schedule, issued by the organization
setting the insurance rate on the Premises, showing the various
components of such rate, shall be conclusive evidence of the several
items and charges which make up the property insurance rate on the
Premises. Landlord shall deliver bills for such additional premiums
to Tenant at such times as Landlord may elect, and Tenant shall
immediately reimburse Landlord therefor.
-15-
(d) Waiver of Subrogation. Landlord and Tenant hereby mutually release
---------------------
each other from liability and waive all rights of recovery against
each other for any loss in or about the Premises, from perils insured
against under their respective property insurance policies, including
any special form endorsements thereof, whether due to negligence or
any other cause. This paragraph shall, however, be inapplicable if it
would have the effect, but only to the extent it would have the
effect, of invalidating any insurance coverage of Landlord or Tenant.
Each of Landlord and Tenant shall, at the request of the other,
execute and deliver to the other a Waiver of Subrogation in the form
and content as required by such party's insurance carrier.
(e) Companies. Insurance required hereunder shall be issued by companies
---------
rated A-VII or better in "Bests" Insurance Guide, or such other
companies approved by Landlord.
(f) Certificate of Insurance. A certificate issued by the insurance
------------------------
carrier for each policy of insurance required to be maintained by
Tenant under the provisions of this Lease shall be delivered to
Landlord upon or before the delivery of the Premises to Tenant for any
purpose, and thereafter within thirty (30) days prior to the
expiration of the term of each such policy. Each certificate of
insurance and each policy of insurance required to be maintained by
Tenant hereunder shall expressly evidence insurance coverage as
required by this Lease. All such policies shall be written as primary
policies not contributing with and not in excess of coverage which
Landlord may carry.
18. Assignment and Subletting.
(a) Assignment, Mortgage or Encumbrance. Except as provided below, Tenant
-----------------------------------
shall not voluntarily or by operation of law assign, mortgage or
otherwise encumber all or any part of Tenant's interest in this Lease
or in the Premises without obtaining the prior written consent of
Landlord in each instance, and any attempt to do so without first
obtaining such consent shall be voidable at the option of Landlord.
Landlord shall not, however, unreasonably withhold or delay such
consent, but such consent shall require that such assignee, mortgagee
or encumbrancer agree to be bound by all of the terms and conditions
of this Lease. Notwithstanding any of the foregoing, without the
consent of Landlord, Tenant may voluntarily or by operation of law
assign and delegate this Lease to the surviving corporation upon any
reorganization, merger, consolidation or acquisition of Tenant, and
Tenant may assign, sublet and delegate this Lease for all or any
portion of the Premises to its parent company, any wholly-owned
subsidiary or any affiliate, provided that both Tenant and any such
assignee shall both be bound by all of the terms and conditions of
this Lease. Without in any way limiting the foregoing, Landlord
hereby specifically approves the acquisition of Tenant, whether
through merger or otherwise, by Stamps.com, Inc.
(b) Sublease. Tenant shall not sublease the Premises without obtaining
--------
the prior written consent of Landlord, which consent of Landlord shall
not be unreasonably withheld or delayed, and which consent shall
require that such sublessee agree to be bound by all of the terms and
conditions of this Lease applicable to such subleased space.
(c) Requirements for Request for Assignment or Sublease; Standards for
------------------------------------------------------------------
Consent. In the event Tenant desires to assign this Lease or sublet
-------
the Premises or any part hereof, Tenant shall give Landlord written
notice at least thirty (30) days in advance of the date on which
Tenant desires to make such assignment or sublease, which notice shall
specify: (a) the name, address and business of the proposed assignee
or sublessee, (b) the amount and location of the space affected, (c)
the proposed effective date and duration of the sublease or
assignment, and (d) current financial statements of the proposed
assignee or sublessee. Each request for an assignment or subletting
must be accompanied by a Processing Fee, equal to no less than Five
Hundred Dollars ($500.00) plus reasonable legal fees, in order to
reimburse Landlord for expenses incurred in connection with such
request.
-16-
In reviewing any request for an assignment of Tenant's interest under
this Lease or a sublease of the Premises or a portion thereof,
Landlord may take into consideration the credit-worthiness of the
proposed assignee or sublessee, the purpose for which the proposed
assignee or sublessee will use the Premises, and whether the proposed
assignee or sublessee is anticipated to require parking in excess of
the parking allocated to Tenant under this Lease. Use and occupancy of
the Premises or any portion thereof by an assignee or sublessee will
be consistent with operation and maintenance of a First Class office
building and will not be in conflict with any other Lease in the
Building. Consent to one assignment, subleasing or other transfer
shall not be deemed to constitute consent to any subsequent
assignment, subleasing or other transfer of Tenant's interest in this
Lease. Except as expressly provided herein, no such assignment or
sublease shall relieve Tenant of any liability under this Lease
regardless of whether such liability arises by or through Tenant.
Assignment or subletting shall not operate as a waiver of the
necessity for a written consent to any subsequent assignment or
sublease, and the terms of such consent shall be binding upon any
person holding by, under or through Tenant.
(d) Rent from Assignee or Sublessee. In the event of any sublease or
-------------------------------
assignment to which Landlord's consent is requested and given,
Landlord and Tenant shall share on an equal basis the rent paid by
Tenant's sublessee or assignee which is in excess of the rent due
under this Lease, on a per rentable square foot basis, after deducting
all of Tenant's out-of-pocket costs incurred in connection with such
sublease or assignment, including commissions, improvements and
leasing concessions, which costs shall be amortized over the term of
the sublease or assignment. Landlord may, at its election, collect
rent directly from such assignee, and in the event of a default
hereunder by Tenant, from any sublessee.
(e) Landlord's Right to Recapture the Premises. Except as set forth in
------------------------------------------
the last sentence of this Section 18(e), with respect to any requested
subletting or assignment requiring Landlord's consent, Landlord may,
by written notice to Tenant, elect to terminate this Lease with
respect to, and recapture from Tenant, that portion of the Premises
specified in the request for sublease or assignment, as of the
proposed effective date of the sublease or assignment. In such event,
the area of the Premises, as defined in this Lease, shall be decreased
by the portion of the Premises specified in such request, and the
monthly base rent, Tenant's Percentage of the Building and all other
amounts in this Lease based on the area of the Premises shall be
reduced appropriately. If Tenant requests Landlord's consent to a
sublease of the Premises, Landlord shall not have the right to
recapture that portion of the Premises specified in the request for
sublease unless the term of the sublease extends into the last twelve
(12) months of the then-current term of this Lease, as extended from
time to time.
19. Holdover. If Tenant, without the written consent of Landlord, holds over
after the expiration or termination of the term of this Lease, Tenant shall
be deemed to be occupying the Premises on a month-to-month tenancy, which
tenancy may be terminated as provided by the laws of the State of
Washington. During such tenancy, Tenant agrees to pay to Landlord rent
equal to one hundred fifty percent (150%) of the rent as set forth herein,
unless a different rate shall be agreed upon, and to be bound by all of the
terms, covenants and conditions herein specified, so far as applicable.
20. Surrender of Premises. Upon the expiration or sooner termination of the
term of this Lease, whether by lapse of time or otherwise, Tenant shall
promptly and peacefully surrender the Premises to Landlord, and shall
return to Landlord all keys thereto.
21. Removal of Property. Upon the expiration or sooner termination of this
Lease, Tenant may remove its trade fixtures, office supplies and movable
office furniture and equipment provided (a) such removal is made prior to
the termination or expiration of this Lease, (b) Tenant is not in default
under any provision of this Lease beyond any applicable notice and cure
periods at the time of such removal, and (c) Tenant immediately repairs all
damage caused by or resulting from such removal. If Tenant has, in
connection with its lease of the Premises, elected to upgrade the generator
that Landlord would otherwise have
-17-
provided to operate the life safety systems of the Building, then upon the
expiration or sooner termination of this Lease, Landlord may retain such
generator by paying to Tenant the depreciated value of the generator based
on a fifteen (15) year useful life and the actual cost of such generator,
including sales tax, less the amount that would be the depreciated value of
the generator based on a fifteen (15) year useful life and a purchase price
of $64,000.00 plus sales tax. All other property in the Premises and any
alterations or additions thereto (including, without limitation, wall-to-
wall carpeting, paneling, wall covering, or lighting fixtures and
apparatus) and any other article affixed to the floor, wall or ceiling of
the Premises shall become the property of Landlord and shall remain upon
and be surrendered with the Premises, Tenant hereby waiving all rights to
any payment or compensation therefor. If, however, Landlord so requests in
writing, Tenant shall, upon termination of this Lease, remove such
alterations, additions, fixtures, equipment and property placed or
installed by Tenant in the Premises subsequent to the completion of the
tenant improvements to be made pursuant to Exhibit E and to which Landlord
---------
withheld its consent under the terms of Section 13 above, and shall
immediately repair any damage caused by or resulting from such removal to
the condition of the Premises prevailing upon commencement of this Lease,
reasonable wear and tear excepted.
If Tenant fails to remove any of its property of any nature whatsoever from
the Premises or the Building at the termination of this Lease or when
Landlord has the right of reentry, Landlord may, at its option, remove and
store said property without liability for loss thereof or damage thereto,
such storage to be for the account and at the expense of Tenant. If Tenant
does not pay the cost of storing any such property after it has been stored
for a period of thirty (30) days or more, Landlord may, at its option, sell
or permit to be sold any or all of such property at public or private sale
(and Landlord may become a purchaser at such sale), in such manner and at
such times and places as Landlord in its reasonable discretion may deem
proper without notice to Tenant, and shall apply the proceeds of such sale:
first, to the cost and expense of such sale, including reasonable
attorneys' fees actually incurred; second, to the payment of the costs or
charges for storing any such property; third, to the payment or any other
sums of money which may then be or thereafter become due Landlord from
Tenant under any of the terms hereof; and fourth, the balance, if any, to
Tenant.
22. Defaults.
(a) Tenant's Defaults. Time is of the essence hereof, and in the event
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Tenant violates or breaches or fails to keep or perform any covenant,
agreement, term or condition of this Lease, and if such default or
violation continues or is not remedied within five (5) business days
(or, if no default in the payment of money is involved, then within
twenty (20) days, or if such breach cannot be cured within twenty (20)
days, then Tenant commences a cure within twenty (20) days and
thereafter diligently prosecutes such cure to completion) after notice
in writing thereof is given by Landlord to Tenant specifying the
matter claimed to be in default, or if Tenant abandons or vacates the
Premises or any significant portion thereof, Landlord, at its option,
may immediately declare Tenant's rights under this Lease terminated,
and reenter the Premises using such force as may be necessary, and
repossess itself thereof, as of its former estate, and remove all
persons and property from the Premises. Notwithstanding any such
reentry, the liability of Tenant for the full payment of rent and
other amounts owed hereunder or provided for herein shall not be
extinguished for the balance of this Lease, and Tenant shall make good
to Landlord any deficiency arising from a reletting of the Premises at
a lesser rent, plus the reasonable costs and expenses of renovating,
altering and reletting the Premises, including attorneys' fees or
brokers' fees incident to Landlord's reentry or reletting. Tenant
shall pay any such deficiency each month as the amount thereof is
ascertained by Landlord or, at Landlord's option, Landlord may
recover, in addition to any other sums, the amount at the time of
judgment by which the unpaid rent for the balance of the term after
judgment exceeds the amount of rental loss which Tenant proves could
be reasonably avoided, discounted at the then Federal Discount Rate
less three percent (3%). The calculation of any amount of rental loss
which Tenant claims could be reasonably avoided shall take into
account those sums which are reasonably anticipated to be expended by
Landlord for tenant improvements, moving expenses, lease assumption
costs, real estate commissions, and all other
-18-
costs associated with reletting the Premises. In reletting the
Premises, Landlord may grant rent concessions and Tenant shall not be
credited therefor. Nothing herein shall be deemed to affect the right
of Landlord to recover for indemnification under Section 17 herein
arising prior to the termination of this Lease, or for any other
remedy at law or in equity. Landlord shall make reasonable efforts to
mitigate its damages in the event of Tenant's default.
(b) Landlord's Defaults. If Landlord fails to keep and perform any
-------------------
covenants and agreements herein contained, and if after written notice
from Tenant specifying such default and permitting Landlord at least
thirty (30) days (except in the event of an emergency or a situation
affecting the tenantable condition of the Premises, in which case
Landlord will be permitted a reasonable time under the circumstances)
to remedy same Landlord has failed to remedy such default, then Tenant
may, but shall not be obligated to, remedy such default. Landlord
shall reimburse Tenant for all reasonable costs and expenses incurred
by Tenant in remedying such default, and such reimbursement shall be
made within thirty (30) days of Landlord's receipt of an invoice for
the amount of such costs and expenses. All rights and remedies of
Tenant under this Lease are cumulative and are not exclusive of any
other rights and remedies provided to Tenant under applicable law.
23. Right to Perform. If Tenant fails to pay any sum of money, other than
rent, required to be paid by it hereunder or fails to perform any other act
on its part to be performed hereunder, and such failure continues for five
(5) business days after written notice thereof by Landlord, or such shorter
time if reasonable under the circumstances, Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such other act
on Tenant's part to be made or performed as provided in this Lease.
Landlord shall have (in addition to any other right or remedy of Landlord)
the same rights and remedies in the event of the nonpayment of sums due
under this section as in the case of default by Tenant in the payment of
rent.
24. Nonwaiver. Waiver by Landlord or Tenant of any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver
of any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by
Tenant of any term, covenant, or condition of the Lease, other than the
failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of
such rent.
25. Costs and Attorneys' Fees. In the event of any action or proceeding
arising out of or in connection with this Lease, the substantially
prevailing party shall be entitled to all costs, expenses and reasonable
attorneys' fees, with or without suit and on appeal.
26. Priority. Tenant agrees that this Lease will be subordinate to any
mortgage, deed of trust or other lien covering the Premises, upon and
subject to the following terms and conditions: Tenant's subordination
hereunder is expressly conditioned on execution and delivery to Tenant by
each mortgagee, each lienholder and each beneficiary of a deed of trust, of
a nondisturbance agreement reasonably acceptable to Tenant. Such agreement
shall be in a form typically used for commercial tenancies, shall be in
recordable form and shall recognize Tenant's rights under this Lease in the
event Landlord's interest is terminated while this Lease is in full force
and effect. Such nondisturbance agreement shall include, among other
things, a provision to the effect that in the event of a termination of the
ground or underlying lease or foreclosure of the mortgage, deed of trust or
other lien in favor of said secured party, or upon a sale of the property
encumbered thereby pursuant to the trustee's power of sale contained
therein, or upon a transfer of the Building or the Premises by deed in lieu
of foreclosure, then for so long as Tenant is not in material default under
the terms, covenants, and conditions of this Lease, this Lease shall
continue in full force and effect as a direct lease between the owner or
succeeding owner of the Premises or the Building (as appropriate), as
Landlord, and Tenant for the balance of the term of this Lease, upon and
subject to all of the terms, covenants and conditions of this Lease. Such
nondisturbance agreement shall not include any terms which are inconsistent
with the terms of this Lease or which adversely affect Tenant's rights or
increase Tenant's obligations under this Lease. Tenant's obligations under
this Lease are conditioned upon Landlord
-19-
obtaining, simultaneously with the execution of this Lease, a
nondisturbance agreement from all mortgagees currently holding liens on the
Property.
Upon request by Landlord or the landlord under a ground lease or an
underlying lease, or the holder of any mortgage, lien or deed of trust now
existing or that may hereafter be placed upon the Land, Premises or the
Building, Tenant will promptly execute a Subordination, Attornment, Notice
and Non-Disturbance Agreement substantially in the form attached as Exhibit
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J to this Lease, as it may be amended by Landlord's mortgagee.
-
27. Estoppel Certificates. Landlord and Tenant shall, at any time and from
time to time during any term of the Lease, upon not less than fifteen (15)
days' prior written request from the other, execute, acknowledge and
deliver to the other or its designee a statement in writing certifying: (1)
the date this Lease was executed and the date it expires; (2) the date of
occupancy; (3) the amount of minimum monthly rent and the date to which
such rent has been paid; (4) that this Lease is unmodified and in full
force and effect (or, if modified, stating with specificity the nature of
such modification); (5) that this Lease represents the entire agreement
between the parties as to this leasing; (6) that there is not, to its
knowledge, any default by the other hereunder, or, if any default is
alleged, then specifying such default; (7) that on that date there are no
existing defenses or offsets which that party has against the enforcement
of this Lease by the other; and (8) that no security has been deposited
with Landlord (or, if so, the amount thereof). Any such statement shall be
provided by the party requesting its completion, and such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of
the Premises or assignee or encumbrancer of Tenant's interest under this
Lease. In the event of the failure to deliver such statement within such
time, the requested party shall be conclusively deemed to have admitted the
accuracy of any information supplied by the requestor to a prospective
purchaser or mortgagee related to any of the matters described in (1)
through (8) above, and such admission may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Premises or assignee or
encumbrancer of Tenant's interest under this Lease.
28. Transfer of Landlord's Interest. This Lease is assignable by Landlord
without the consent of Tenant. In the event of any transfer or transfers
of Landlord's interest in the Premises or the Building, other than a
transfer for security purposes only, the transferor will be automatically
relieved of any and all obligations and liabilities on the part of Landlord
accruing from and after the date of such transfer, and Tenant agrees to
attorn to the transferee, providing such transferee assumes the obligations
of Landlord under this Lease.
29. Condemnation. If all of the Premises, or such portions of the Building as
may be required for the reasonable use of the Premises, are taken by
eminent domain, this Lease will automatically terminate as of the date
Tenant is required to vacate the Premises and all rents will be paid to
that date. In case of a taking of a part of the Premises equal to less
than twenty percent (20%) of the floor area, or a portion of the Building
not required for the reasonable use of the Premises, this Lease will
continue in full force and effect and the rent will be equitably reduced
based on the proportion by which the floor area of the Premises is reduced,
such rent reduction to be effective as of the date possession of such
portion is delivered to the condemning authority. In case of a taking of a
part of the Premises equal to twenty percent (20%) or more of the floor
area, Tenant may elect to terminate this Lease. Landlord reserves all
rights to receive monetary damages to the Premises for any taking by
eminent domain, and Tenant hereby assigns to Landlord any right Tenant may
have to such damages or award; and Tenant shall make no claim against
Landlord for damages for termination of the leasehold interest or
interference with Tenant's business. Tenant shall have the right, however,
to claim and recover from the condemning authority compensation for any
loss to which Tenant may be put for Tenant's moving expenses, provided that
such damages may be claimed only if they are awarded separately in the
eminent domain proceedings and not as part of the damages recoverable by
Landlord.
30. Advertising. Tenant shall not inscribe any inscription, or post, place or
in any manner display any sign, notice, picture, placard or poster, or any
advertising matter whatsoever, anywhere in or about the Premises or the
Building at places visible (either directly or indirectly as an outline or
shadow on a glass pane) from anywhere outside the Premises without first
obtaining Landlord's written consent thereto, which consent
-20-
shall not be unreasonably withheld. Any such consent by Landlord shall be
upon the understanding and condition that Tenant, at its sole cost and
expense, will remove the same at the expiration or sooner termination of
this Lease and will repair any damage to the Premises or the Building
caused thereby. Notwithstanding the foregoing, Landlord hereby grants
Tenant the non-exclusive right to install signs on the monument sign
adjacent to the Building. Tenant's right to do so is subject to City of
Bellevue regulations, the installation being completed in a good and
workmanlike manner, and Landlord's review and approval of the design and
location of the signs, which approval shall not be unreasonably withheld.
The design, construction, installation and removal of all signs is at the
sole cost and expense of Tenant.
31. Exterior Signage. So long as Tenant occupies a minimum of three (3) full
floors in the Building, Tenant shall have the sole and exclusive right to
install signage on the north and west sides of the exterior of the
Building, subject to Landlord's reasonable approval and all applicable
codes. All costs associated with installing exterior signage on the
Building shall be borne by Tenant. Tenant may, however, include the cost of
installing exterior signage on the Building as an item for which payment is
to be made from the Tenant Improvement Allowance (defined in Section 33
below).
32. Parking. Parking shall at all times be governed by reasonable rules and
regulations established by Landlord, which may be changed with reasonable
discretion from time to time. Such rules and regulations shall not be
inconsistent with the terms and conditions of this Lease and shall be
enforced against all parking users in a non-discriminatory fashion.
From 7:00 a.m. to 6:00 p.m., Monday through Friday, except for legal
holidays, during the term of this Lease, as it may be extended, Landlord
shall provide parking at a ratio of four (4) spaces per one thousand
(1,000) rentable square feet of the Premises on a non-exclusive basis in
the below ground and surface parking lots located on the real property
comprising the Project and on which the 12600 Building is located. A plan
showing the parking available for the Project and the 12600 Building is
attached hereto as Exhibit K. Such parking shall be provided by Landlord
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at no additional charge during the Initial Lease Term (except for the
payment of any parking tax subsequently imposed by a governmental
authority), Landlord represents and warrants to Tenant that Landlord is
unable to provide parking to Tenant on an exclusive basis at any time
during the Lease term. If Tenant experiences a problem with the parking at
the Building such that Tenant's allotted parking spaces are unavailable to
it on a consistent basis, and so informs Landlord, then Landlord shall take
such measures, such as monitoring or valet parking, as are reasonably
necessary to correct the problem, and such expenses shall be charged to
Tenant as Additional Rent. Tenant acknowledges that the parking lot is used
and may be used jointly by other tenants under a parking access agreement
managed by Landlord.
33. Tenant Improvements.
(a) Tenant Improvement Allowance. Landlord agrees to provide an allowance
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of up to Two Million Three Hundred Twenty-five Thousand Seven Hundred
Sixty-five Dollars ($2,325,765.00) (the "Tenant Improvement
Allowance") to assist Tenant in the build-out of the tenant
improvements for the Premises (the "Tenant Improvements"). The
Tenant Improvement Allowance is calculated by multiplying the agreed
floor area of the Premises, in usable square feet (71,562) by $32.50.
The Tenant Improvement Allowance may be adjusted based on the actual
floor area of the Premises. In addition to its use toward the hard
costs of constructing the Tenant Improvements, the Tenant Improvement
Allowance may be used for space planning and design, the cost of
building permits, Washington State Sales Tax, cabling and wiring for
the Premises and exterior building signage. Tenant expressly assumes
responsibility for the cost and payment of any portion of the Tenant
Improvements that are in excess of the Tenant Improvement Allowance.
Tenant may, by written notice delivered to Landlord no later than
September 1, 2000, elect to amortize the cost of Tenant Improvements
that are in excess of the Tenant Improvement Allowance, up to an
additional $12.50 per usable square foot of the agreed floor area of
the Premises, on a
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straight-line basis over a term of eight (8) years and based on an
interest rate equal to Landlord's permanent loan rate on the Building
plus one percent (1%); provided, however, that until such time as
Landlord's permanent loan on the Building is in place, such
amortization shall be based on the Bank of America prime rate plus one
percent (1%). If Tenant elects to have any portion of cost of Tenant
Improvements that are in excess of the Tenant Improvement Allowance
amortized, as provided by the terms of the preceding sentence, then
Tenant shall execute a promissory note in the form of Exhibit L
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attached to this Lease (the "TI Note"), evidencing a loan payable to
Landlord for such amount. The monthly payments due under the TI Note
shall be additional rent due under this Lease, and shall be added to
the monthly base rent due from Tenant to Landlord under the terms of
Section 1(f) above.
(b) Plans for Tenant Improvements. Landlord and Tenant shall mutually
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agree on the selection of the architect (the "Architect") to plan,
design and complete the construction documents for the Tenant
Improvements, such approval not to be unreasonably withheld or
delayed. Landlord shall pay for the cost of an initial "test fit" for
one floor of the Premises by providing to Tenant an allowance of Two
Thousand Seven Hundred Seventy-five Dollars ($2,775.00). Such
allowance shall be a part of, and not in addition to, the Tenant
Improvement Allowance set forth in Section 33(a) above. Prior to
Landlord commencing work on the Tenant Improvements, Tenant shall
submit to Landlord two (2) copies of plans detailing the design and
plan of improvements prepared by the Architect. Landlord shall either
approve or disapprove plans within ten (10) days and, if approved,
return a signed, approved copy to Tenant. In the event that Landlord
does not approve the plans, Landlord shall inform Tenant of the
reasons for its disapproval and Tenant shall have ten (10) days in
which to submit revised plans to Landlord for approval. Tenant shall
not unreasonably refuse to satisfy any objections made by Landlord to
the plans and specifications. Any objections Tenant has to Landlord's
objection shall be submitted to Landlord in writing within the ten
(10) day period. A failure of one party to give any notice to the
other party within the ten (10) day period shall be deemed to
constitute approval of the plans and specifications or the objections
thereto, as appropriate. Landlord shall not unreasonably withhold or
delay its approval of Tenant's plans for Tenant Improvements.
(c) Construction of Tenant Improvements. Upon Landlord's approval of
-----------------------------------
Tenant's plans, Landlord shall enter into a construction contract with
Gall Landau Young ("GLY") for the construction of the Tenant
Improvements.
Landlord will guaranty the delivery dates for the Premises, on a floor
by floor basis, set forth in Section 1(e) above, and shall be subject
to the penalties set forth in Section 40 for failure to so deliver the
Premises, if Tenant complies with the following dates regarding
delivery of items necessary for construction of the Tenant
Improvements:
(1) March 15, 2000: begin preparation of design and drawings
for the Tenant Improvements;
(2) June 1, 2000: submit the plans for Tenant Improvements to
the City of Bellevue for a preliminary
permit;
(3) July 1, 2000: finalize construction drawings for the
Tenant Improvements; and
(4) August 10, 2000: approval of bid price for construction of
the Tenant Improvements by Landlord and
Tenant, which approval shall not be
unreasonably withheld.
If Tenant does not comply with the dates set forth above, then the
dates for delivery of the Premises set forth in Section 1(e) above
shall, on a floor-by-floor basis, be moved back one day for each day
that Tenant fails to meet its delivery date for any item.
The construction of all improvements to be made on the Premises shall
be performed in a first-class, workmanlike manner, in conformity with
all applicable governmental laws, ordinances, rules, orders,
regulations and other requirements, and in substantial accordance with
plans and specifications.
Tenant or Tenant's agents shall have the right to inspect the
construction of the Tenant Improvements during the progress thereof at
Tenant's sole cost and expense and at times
-22-
coordinated with Landlord and GLY. If, during the progress of
construction of the Tenant Improvements, Tenant desires to have any
changes made to the approved plans and specifications, then Landlord
shall cause GLY to prepare and deliver to Tenant's designated
representative a change order showing the cost therefor and the
additional time necessary for substantial completion of the Tenant
Improvements, if any. Tenant shall promptly inform Landlord and GLY
whether such change order has been approved by Tenant. The dates for
delivery of the Premises set forth in Section 1(e) above shall, on a
floor-by-floor basis, be moved back one day for each additional day
that a change order approved by Tenant will require.
34. Tenant's Approval Regarding Construction and Design of Building. Tenant
has reviewed and approved the plans and specifications for the Building, as
the same are described on Exhibit D attached hereto (the "Building Plans").
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With respect to any material changes to material design elements that
Landlord desires to make to the Building Plans, Landlord shall notify
Tenant of the nature of such material changes, and Tenant shall, within
three (3) business days after receipt of such notice, inform Landlord
whether it approves such material changes. Tenant shall not unreasonably
withhold its consent to any material change to the Building Plans.
Additionally, if the Building Plans are not specific as to some of the
material design elements of the Building, then Landlord shall consult with
Tenant and obtain Tenant's approval with respect thereto. Tenant shall not
unreasonably withhold its consent to Landlord's plans for any material
design elements of the Building.
35. Installation of Satellite Dishes on Roof of Building. Landlord hereby
grants to Tenant, for no additional rent during the term of this Lease, as
it may be extended, the exclusive use of up to fifty percent (50%) of the
usable area of the roof of the Building on which to install and maintain
satellite dishes and/or antennas, as shown by the cross-hatched area on
Exhibit M-1 attached to this Lease. If at any time during the Lease term,
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Tenant occupies less than two (2) full floors of the Building, then the
usable area of the roof designated for Tenant's exclusive use and for no
additional rent shall decrease to twenty-five percent (25%) of the usable
area of the roof of the Building, as shown by the cross-hatched area on
Exhibit M-2 attached to this Lease. The right to use the roof for the
-----------
installation and maintenance of satellite dishes and/or antennas is
personal to Tenant (or Tenant's successor-in-interest through merger), and
Tenant may not sublet or assign its right to use the roof of the Building,
except to an assignee approved by Landlord or to a sublessee occupying at
least 10,000 rentable square feet of the Premises, in which case Tenant may
grant to such sublessee the right to use a pro rata share of Tenant's area
of the roof. The installation and maintenance of such satellite dishes
and/or antennas shall be at Tenant's sole cost and expense, and is
conditioned on Tenant's (and any sublessee's) compliance with the terms of
that certain Communications Site Lease attached as Exhibit N to this Lease.
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36. Fifth Floor Hold Period. Landlord shall not, for the period commencing
upon the execution of this Lease and expiring as of 11:59 p.m. on October
2, 2000, market for lease the premises comprised of the Fifth Floor of the
Building.
37. Terms Applicable to Expansion of Premises During Initial 12 Months. If
Tenant and Landlord, prior to the expiration of twelve (12) months
following the first Commencement Date under this Lease, enter into any
agreement to expand the Premises such that the Premises will consist of
space in the Building in addition to the floor area of the first, second,
third and fourth floors, then such additional floor area shall be added to
the Premises on the same terms and conditions as are contained in this
Lease, including all economic terms set forth herein, and the lease term
with respect to such additional floor area shall expire on the expiration
date of the Initial Lease Term. If Tenant elects to amortize the cost of
Tenant Improvements in excess of the Tenant Improvement Allowance
applicable to any expansion space, up to an additional $12.50 per usable
square foot, then Tenant shall provide written notice to Landlord of its
election by October 1, 2001, and execute a promissory note in the form of
the TI Note evidencing a loan payable to Landlord for such amount. The
monthly payments due under the TI Note shall be calculated based on the
then-remaining portion of the 8-year period of any TI Note executed
pursuant to the terms of Section 33(a) above, shall be additional rent due
under this Lease, and shall be added to the monthly base rent due from
Tenant to Landlord under the terms of Section 1(f) above.
-23-
38. Tenant's Right of First Offer.
(a) Right of First Offer. Landlord hereby grants to Tenant, during the
--------------------
Initial Lease Term, a continuing right of first offer (the "Right of
First Offer") to lease all available space in the Building, whether
such space is currently available or becomes available during the
Initial Lease Term. In the event any space becomes available to
lease, Landlord shall provide Tenant with a written notice of
availability (the "Availability Notice"). The Availability Notice
shall identify the space (the "ROFO Space"), the date on which it will
be available, and the economic terms applicable to the ROFO Space
(which economic terms shall be determined in accordance with Section
37 above if the Availability Notice either may or must be accepted by
Tenant prior to the expiration of the twelve (12) month period
following the first Commencement Date under this Lease). Tenant shall
have ten (10) business days following receipt of the Availability
Notice in which to exercise its Right of First Offer by giving written
notice of such exercise to Landlord. If Tenant exercises its Right of
First Offer within ten (10) business days following receipt of the
Availability Notice or under the terms of Section 37 above, as
applicable, then Landlord and Tenant shall promptly enter into an
amendment to this Lease adding the ROFO Space to the Premises as of
the date of availability and on the terms specified in the
Availability Notice. If Tenant fails to exercise its Right of First
Offer within ten (10) business days following receipt of the
Availability Notice, then Landlord may lease the ROFO Space to third
parties on terms and conditions equal to not less than ninety-five
percent (95%) of the economic value of the terms proposed to Tenant.
If Landlord desires submit to an offer to a third party, or receives
an offer from a third party that it is willing to accept, and the
economic value of such offer is less than ninety-five percent (95%) of
that last offered to Tenant, or if Landlord has not entered into a
binding lease for such space within six (6) months after the
Availability Notice for such space was delivered to Tenant, then
Tenant shall again have a Right of First Offer with respect to such
space and the new economic terms.
(b) Expansion of Right of First Offer to Other Buildings. At such time as
----------------------------------------------------
(1) the Premises are comprised of more than 70,000 rentable square
feet, or (2) Tenant cannot, based on the remaining space available
within the Building, expand by at least 10,000 rentable square feet
within the Building, then the Right of First Offer set forth in
Section 38(a) above shall also apply to (i) space available for lease
in Sterling Plaza I, and (ii) any spaces in excess of 5,000 square
feet available for lease in the 12600 Building (even if a portion of
such space containing less than 5,000 square feet is offered to third
parties), subject only to rights of existing tenants in Sterling Plaza
I and the 12600 Building that are in existence as of the date of this
Lease.
(c) Termination of Rights. Tenant's Right of First Offer shall terminate
---------------------
if: (1) Tenant assigns its interest in this Lease to a party other
than a successor-in-interest by merger or reorganization; or (2)
Tenant subleases a portion of the Premises constituting either (A)
more than thirty-three percent (33%) of the then-existing floor area
of the Premises, or (B) more than 44,000 rentable square feet, unless
in either of cases (A) or (B) above such sublease(s) is/are for a term
of two (2) years or less.
39. Option to Cancel Lease.
(a) Tenant's Option to Cancel. Subject to delays by Tenant or Tenant's
-------------------------
agents and delays due to labor disputes, fire, adverse weather, force
majeure events or other causes that are beyond Landlord's control,
Landlord hereby grants to Tenant the option to cancel this Lease (the
"Option to Cancel") following the occurrence of any of the following:
(1) Tenant fails to merge with Stamps.com, Inc. on or before March 10,
2000; (2) Landlord fails to obtain a building permit for the Building
from the City of Bellevue on or before March 21, 2000; (3) Landlord
has not commenced construction of the Building on or before April 1,
2000 (such commencement being defined as the beginning of excavation);
or (4) the Building and Premises (including Tenant Improvements) are
not
24
substantially complete by April 1, 2001. Tenant shall exercise its
Option to Cancel by giving written notice to Landlord specifying the
event giving rise to Tenant's Option to Cancel.
(b) Landlord's Option to Cancel. Landlord may, by giving written notice
---------------------------
to Tenant, cancel this Lease if either (1) Tenant fails to merge with
Stamps.com, Inc. on or before March 10, 2000; (2) Landlord has not
obtained a building permit for the Building from the City of Bellevue
on or before the date that is two (2) weeks following the date on
which Tenant informs Landlord in writing that the merger with
Stamps.com, Inc. has occurred.
(c) Effect of Cancellation of Lease. If either party validly exercises
-------------------------------
its option to cancel this Lease under this Section 39, then neither
party shall have any further rights or obligations hereunder (except
those obligations which expressly survive the expiration or
termination of this Lease), and Landlord shall promptly return to
Tenant any prepaid rent or security instrument previously given by
Tenant to Landlord in connection with this Lease. Tenant acknowledges
that it will, in such event, be responsible for the cost of any
drawings prepared or permits obtained in connection with the Tenant
Improvements.
40. Delay in Lease Commencement; Additional Options to Cancel Lease.
(a) Rent Credit for Delay in Lease Commencement. If neither Landlord nor
-------------------------------------------
Tenant has exercised its option to cancel this Lease as set forth in
Section 39 above, and taking into account on a day-for-day basis any
delays caused by Tenant or Tenant's agents under Section 33 above or
otherwise, labor disputes, fire, adverse weather, force majeure events
or other causes that are beyond Landlord's control, the Premises
(including the Tenant Improvements) are not substantially complete by:
(1) April 1, 2001, then for each day after April 1, 2001, and through
April 30, 2001, that the Building and the Premises, on a floor-
by-floor basis, are not substantially complete, Tenant shall, on
a floor-by-floor basis, receive a rent credit equal to one-half
day's rent for each floor of the Premises not yet delivered; and
(2) April 30, 2001, then for each day after April 30, 2001, that the
Building and the Premises, on a floor-by-floor basis, are not
substantially complete, Tenant shall, on a floor-by-floor basis,
receive a rent credit equal to one day's rent for each floor of
the Premises not yet delivered.
In no event, however, shall the amount of the rent to be credited to
Tenant under this Section 40(a) exceed Five Hundred Thousand Dollars
($500,000.00).
(b) Additional Options to Cancel Lease.
----------------------------------
(1) Tenant's Additional Option to Cancel. If, for any reason other
------------------------------------
than delays caused by Tenant, Tenant is unable to occupy the
entire Premises (except any portions added to the original
Premises under the terms of Sections 37 and 38 above) by December
31, 2001, then Tenant may, by written notice to Landlord so
stating, cancel this Lease.
(2) Landlord's Additional Option to Cancel. If, due to any delays in
--------------------------------------
completing Landlord's work that are outside of Landlord's
control, Tenant is unable to occupy the entire Premises (except
any portions added to the original Premises under the terms of
Sections 37 and 38 above) by December 31, 2001, then Landlord
may, by written notice to Tenant so stating, cancel this Lease.
(3) Effect of Cancellation of Lease. If either party validly
-------------------------------
exercises its option to cancel this Lease under this Section
40(b), then neither party shall have any further rights or
25
obligations hereunder (except those obligations which expressly
survive the expiration or termination of this Lease), and
Landlord shall promptly return to Tenant any prepaid rent or
security instrument previously given by Tenant to Landlord in
connection with this Lease. Tenant acknowledges that it will, in
such event, be responsible for the cost of any drawings prepared
or permits obtained in connection with the Tenant Improvements.
41. American With Disabilities Act (ADA) Compliance. Landlord and Tenant
acknowledge that, in accordance with the provisions of the Americans With
Disabilities Act (the "ADA"), responsibility for compliance with the terms
and conditions of Title III of the ADA may be allocated as between Landlord
and Tenant. Notwithstanding anything to the contrary contained in the
Lease, Landlord and Tenant agree that the responsibility for compliance
with the ADA (including, without limitation, the removal of architectural
and communications barriers and the provision of auxiliary aids and
services to the extent required) following substantial completion of the
Building shall be allocated as follows: (a) Tenant shall, at Tenant's sole
cost and expense, be responsible for compliance with the provisions of
Title III of the ADA for any construction, renovations, alterations and
repairs made within the Premises (except restrooms and elevators), whether
such construction, renovations, alterations and repairs are completed by
Landlord or Tenant and whether at Landlord's or Tenant's expense; and (b)
Landlord shall, at Landlord's sole cost and expense, be responsible for
compliance with the provisions of Title III of the ADA for (1) restrooms
and elevators in the Building; (2) all areas of the Building which are
exterior to the Premises (unless such renovations and alterations are
required due to Tenant's particular use of such areas), and (3) all of the
remaining portions of the Land. Landlord agrees to indemnify and hold
Tenant harmless from and against any claims, damages, costs and liabilities
arising out of Landlord's failure, or alleged failure, as the case may be,
to comply with its obligations under this Section 41, which indemnification
obligation shall survive the expiration or termination of this Lease.
Tenant agrees to indemnify and hold Landlord harmless from and against any
claims, damages, costs and liabilities arising out of Tenant's failure, or
alleged failure, as the case may be, to comply with its obligations under
this Section 41, which indemnification obligation shall survive the
expiration or termination of this Lease.
Landlord and Tenant each agree that the allocation of responsibility for
ADA compliance shall not require Landlord or Tenant to supervise, monitor
or otherwise review the compliance activities of the other with respect to
its assumed responsibilities for ADA compliance as set forth in this
Section 41.
42. Hazardous Materials. As used in this Lease, "Hazardous Materials" means
any substance which is (i) designated, defined, classified or regulated as
a hazardous substance, hazardous material, hazardous waste, pollutant or
contaminant under any Environmental Law, as currently in effect or as
hereafter amended or enacted, (ii) a petroleum hydrocarbon, including crude
oil or any fraction thereof and all petroleum products, (iii) PCBs, (iv)
lead, (v) asbestos, (vi) flammable explosives, (vii) infectious materials,
or (viii) radioactive materials. "Environmental Law(s)" means the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, 42 U.S.C. Sections 9601, et seq., the Resource Conservation and
-- ---
Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq., the Toxic
-- ---
Substances Control Act, 15 U.S.C. Sections 2601, et seq., the Hazardous
-- ---
Materials Transportation Act, 49 U.S.C. 5101, et seq., the Clean Water Act,
-- ---
33 U.S.C. Sections 1251, et seq., and the Washington Model Toxics Control
-- ---
Act, Revised Code of Washington Chapter 70.105D, as said laws have been
supplemented or amended to date, the regulations promulgated pursuant to
said laws and any other federal, state or local law, statute, rule,
regulation or ordinance which regulates or proscribes the use, storage,
disposal, presence, clean-up, transportation or release or threatened
release into the environment of Hazardous Material.
Tenant shall not cause, or allow any of Tenant's employees, agents,
customers, visitors, invitees, licensees, contractors, assignees and
subtenants to cause, any Hazardous Materials to be handled, used,
generated, stored, released or disposed of in, on, under or about the
Premises, the Building or the Project or surrounding land or environment in
violation of any Environmental Laws. Tenant must obtain Landlord's written
consent prior to the introduction of any Hazardous Materials onto the
Premises, the Building or the Project. Notwithstanding the foregoing,
Tenant may handle, store, use and dispose of products containing small
quantities of Hazardous Materials for "general office purposes" (such as
toner for copiers) to the
26
extent customary and necessary for the Permitted Materials in a safe and
lawful manner and never allow such Hazardous Materials to contaminate the
Uses of the Premises; provided that Tenant shall always handle, store, use,
and dispose of any such Hazardous Premises, Building, or Project or
surrounding land or environment. Tenant shall immediately notify Landlord
in writing of any Hazardous Materials' contamination of any portion of the
Premises, the Building or the Project of which Tenant becomes aware,
whether or not caused by Tenant. Landlord shall have the right at all
reasonable times to inspect the Premises and to conduct tests and
investigations to determine whether Tenant is in compliance with the
foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant. Tenant shall indemnify, defend (by
counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any and all claims, liabilities, losses, costs,
loss of rents, liens, damages, injuries or expenses (including attorneys'
and consultants' fees and court costs), demands, causes of action, or
judgments directly or indirectly arising out of or related to the use,
generation, storage, release, or disposal of Hazardous Materials by Tenant
or any of Tenant's Parties in, on, under or about the Premises, the
Building or the Project or surrounding land or environment, which indemnity
shall include, without limitation, damages for personal or bodily injury,
property damage, damage to the environment or natural resources occurring
on or off the Premises, losses attributable to diminution in value or
adverse effects on marketability, the cost of any investigation,
monitoring, government oversight, repair, removal, remediation,
restoration, abatement, and disposal, and the preparation of any closure or
other required plans, whether such action is required or necessary prior to
or following the expiration or earlier termination of this Lease. Neither
the consent by Landlord to the use, generation, storage, release or
disposal of Hazardous Materials nor the strict compliance by Tenant with
all laws pertaining to Hazardous Materials shall excuse Tenant from
Tenant's obligation of indemnification pursuant to this Section 42.
Tenant's obligations pursuant to the foregoing indemnity shall survive the
expiration or earlier termination of this Lease.
Landlord represents and warrants, to the best of its knowledge without
special inquiry, that no Hazardous Materials are being or have in the past
been generated, treated or disposed of or at the Premises or the Building.
Landlord shall not use, generate, treat, store or dispose of any Hazardous
Materials on the Premises or in the Building except in accordance with all
Environmental Laws. If Landlord breaches the obligations stated in the
preceding sentence, or if the presence of Hazardous Materials on the
Premises or Building caused by Landlord results in contamination of the
Premises or Building, then Landlord shall indemnify, defend and hold Tenant
harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities, or losses (including, without limitation, diminution in
value of the Premises, damages for the loss or restriction on the use of
Tenant's rentable or usable space, and sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees) which arise during or
after the Lease term as a result of Landlord's violation of Environmental
Laws. The foregoing representations and warranties contained in this
paragraph shall not be binding upon any mortgagee, and such mortgagee's
successors and assigns, who holds a mortgage or deed of trust encumbering
the Land and who succeeds to the interest of Landlord under this Lease as a
result of foreclosure or otherwise, or upon any successor in interest to
Landlord who purchases the interest of Landlord in the Land at a
foreclosure sale conducted for the benefit of such mortgagee.
43. Arbitration. If a dispute arises under this Lease, the parties shall
proceed to resolve the dispute by arbitration in accordance with the
provisions of this Section 43.
The party desiring arbitration shall give written notice to that effect to
the other party, specifying in the notice the nature of the dispute and the
name and address of three persons acceptable to it to act as arbitrator on
its behalf. Within five (5) business days after receipt of such notice, the
other party shall give written notice to the first party, informing the
first party if any of the arbitrators specified are acceptable, and if none
are acceptable, submitting an additional three persons for consideration.
If, within fifteen (15) days from the date of the first notice, the parties
are unable to mutually agree on the person to serve as arbitrator, either
party may apply to the presiding judge of the King County Superior Court to
select the arbitrator.
27
Within five (5) business days following selection of the arbitrator, each
party shall furnish the arbitrator with its written position. Each party
may also include at this time any information, data, and/or reports
supportive of its position. The arbitrator may request additional
information, data, or reports from the parties or others if the arbitrator
so desires. Within fifteen (15) business days following the arbitrator's
receipt of information from the parties, the arbitrator shall notify both
parties in writing of the arbitrator's decision. The arbitrator is not
empowered to award any damages in excess of actual, compensatory damages.
The decision of the arbitrator shall be final and binding upon the parties
and effective as of the date of notification to the parties of the
arbitrator's decision.
The arbitrator shall be an individual with at least ten (10) years
substantial experience in managing and/or operating commercial real
property. Arbitration shall be conducted pursuant to the rules of the
American Arbitration Association then in effect and the decision of the
arbitrator may be entered and enforced as a judgment in accordance with the
applicable laws of King County, Washington. Each party shall bear its own
attorneys' fees and expenses and shall share equally those of the
arbitrator. The place of arbitration shall be in either Bellevue or
Seattle, Washington.
44. Quiet Enjoyment. Landlord warrants and covenants that, during all terms of
this Lease, Tenant will have the exclusive right to possession and quiet
enjoyment of the Premises and will have, hold and enjoy the Premises
peacefully and quietly, without any manner of let, suit, trouble or
hindrance so long as Tenant complies with all material provisions of this
Lease.
45. Execution of Lease by Landlord. The submission of this document for
examination and negotiation does not constitute an offer to lease, or a
reservation of, or option for the Premises. No act or omission of any
employee or agent of Landlord or of Landlord's broker shall alter, change
or modify any of the provisions hereof.
46. Landlord's Liability. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the
part of Landlord are made and intended not as personal covenants,
undertakings and agreements or for the purpose of binding Landlord
personally or the assets of Landlord except Landlord's interest in the
Premises and the Building and the proceeds thereof, but are made and
intended for the purpose of binding only Landlord's interest in the
Premises and the Building and the proceeds thereof. No personal liability
or personal responsibility is assumed by, nor shall at anytime be asserted
or enforceable against Landlord or its partners and their respective heirs,
legal representatives, successors and assigns on account of this Lease or
on account of any covenant, undertaking or agreement of Landlord contained
in this Lease.
47. Brokers.
(a) Identification of Brokers. Tenant was represented in this lease
-------------------------
transaction by Paul Sweeney of The Broderick Group, Inc. Landlord was
represented in this lease transaction by Geoff Boguch and Amy Bolich
of Colliers International. No other finder or broker participated in
this lease transaction or is entitled to compensation on account of
this lease transaction.
(b) Representation and Indemnity Regarding Brokers. Tenant and Landlord
----------------------------------------------
each represent and warrant to the other that they have not engaged any
broker, finder or other person who would be entitled to any commission
or fee in respect of the negotiation, execution or delivery of this
Lease except for those brokers identified in this Section 47, and each
shall indemnify and hold harmless the other against any loss, cost,
liability or expense incurred by the other as a result of any claim
asserted by any other broker, finder or other person on the basis of
any arrangements or agreements made or alleged to have been made by or
on behalf of Tenant or Landlord.
48. Corporate Authority. Where Tenant is a corporation, each individual
executing this Lease on behalf of Tenant represents and warrants that he or
she is duly authorized to execute and deliver this Lease on behalf of
Tenant, in accordance with a duly adopted resolution of the Board of
Directors of Tenant. Tenant shall,
28
within thirty (30) days after execution of this Lease, deliver to Landlord
a certified copy of a resolution of the Board of Directors of Tenant
authorizing or ratifying the execution of this Lease, substantially in the
form of Exhibit O attached to this Lease.
---------
49. General Provisions.
(a) Standard for Consent or Approval. Wherever in this Lease a party may
--------------------------------
not "unreasonably withhold its consent," "unreasonably withhold or
delay its consent," "unreasonably withhold its approval", or phrases
of like import, then such party's consent or approval shall be granted
or withheld in its reasonable business judgment.
(b) Section Headings. The title of sections of this Lease are not a part
----------------
of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.
(c) Governing Law. This Lease shall be construed and governed by the laws
-------------
of the State of Washington.
(d) Binding on Successors. All of the covenants, agreements, terms and
---------------------
conditions contained in this Lease shall apply to and be binding upon
Landlord and Tenant and their respective heirs, executors,
administrators, successors and assigns.
(e) Entire Agreement. This Lease contains all covenants and agreements
----------------
between Landlord and Tenant relating in any manner to the rent, use
and occupancy of the Premises and Tenant's use of the Building and
other matters set forth in this Lease. No prior agreements or
understanding pertaining to the same shall be valid or of any force or
effect and the covenants and agreements of this Lease shall not be
altered, modified, or added to except in writing signed by Landlord
and Tenant. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate
any other provision hereof and the remaining provisions hereof shall
nevertheless remain in full force and effect.
(f) Name of Building. Landlord reserves the right to name and re-name the
----------------
Building from time to time, and to install signs accordingly, without
compensation, but only with prior written notice to Tenant.
(g) Invalidity of Provisions. The invalidity of all or any part of any
------------------------
section of this Lease will not render invalid the remainder of this
Lease or the remainder of such section. If any provision of this
Lease is so broad as to be unenforceable, such provision will be
interpreted to be only so broad as is enforceable.
(h) Memorandum of Lease. Landlord and Tenant shall execute a Memorandum of
-------------------
Lease in recordable form with respect to this Lease, which shall be in
a form reasonably acceptable to both parties and which shall include,
without limitation, Tenant's rights in Sterling Plaza I and the 12600
Building described in Section 38(b) above. Such Memorandum shall be
recorded on the Land and on the land underlying Sterling Plaza I and
the 12600 Building.
(i) Exhibits. The following exhibits are made a part of this Lease:
--------
Exhibit A Legal Description of Land
Exhibit B Legal Description of Project
Exhibit C Plan of the Premises
Exhibit D Shell and Core Items for the Building
List of Plans and Specifications for Building
Exhibit E Scope of Tenant Improvements
Exhibit F Form of Letter of Credit
Exhibit G Form of Lease Guaranty
Exhibit H Rules and Regulations
Exhibit I Exclusions from Operating Costs
Exhibit J Form of Subordination, Attornment, and Non-Disturbance
Agreement
Exhibit K Parking Plan
Exhibit L Form of Tenant Improvement Promissory Note
Exhibit M Sketches Showing Area of Roof Designated for Tenant's
Exclusive Use
Exhibit N Form of Communications Site Lease
Exhibit O Certificate of Corporate Resolution of Tenant
29
IN WITNESS WHEREOF, this Lease has been executed the day and year first above
set forth.
LANDLORD:
STERLING REALTY ORGANIZATION CO.,
a Washington corporation
By:
------------------------------
David Schooler, President
TENANT:
iSHIP.COM, INC.
a Washington corporation
By:
------------------------------
Its:
-----------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this ______ day of ______, 2000, before me, the
undersigned, a notary public in and for the State of Washington, duly
commissioned and sworn, personally appeared DAVID SCHOOLER, to me known to be
the President of STERLING REALTY ORGANIZATION CO., a Washington corporation, the
corporation that executed the within and foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said
corporation for the uses and purposes therein mentioned, and on oath stated that
he was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
-------------------------------------
(Signature)
-------------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at
--------------
My commission expires
----------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this _____ day of ______, 2000, before me, the
undersigned, a notary public in and for the State of Washington, duly
commissioned and sworn, personally appeared _____________________________, to me
known to be the _____________________ of iSHIP.COM, INC., a Washington
corporation, the corporation that executed the within and foregoing instrument,
and acknowledged the said instrument to be the free and voluntary act and deed
of said corporation for the uses and purposes therein mentioned, and on oath
stated that _____ was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
-------------------------------------------
(Signature)
-------------------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at
--------------------
My commission expires
----------------------
30
EXHIBIT A
TO
LEASE AGREEMENT
Legal Description of Land
-------------------------
New Lot 2
- ---------
A portion of Lot 1 of Short Plat No. 280070R, according to the short plat
recorded under King County Recording No. 8011200686, being a revision of short
plat recorded under Recording No. 8009300879.
TOGETHER with that portion of the vacated portion of SE 38th Street lying with
the projected lot lines of the property herein described as vacated by King
County Ordinance No. 6582 as recorded under King County Recording No. 84030789;
TOGETHER with a portion of Parcels C, D, E & F of King County Lot Line
Adjustment No. LLA 8810004, according to the Lot Line adjustment recorded under
King County Recording No. 9101239007, being a portion of the West 1/2 of the
Southeast 1/4 of Section 9, Township 24 North, Range 5 East, W.M., described as
follows:
Commencing at the Northeast corner of the Southwest 1/4, of the Southeast 1/4
said Section 9; thence North 87 degrees 23 minutes 26 seconds West along the
North line of said Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet
to the TRUE POINT OF BEGINNING; thence South 01 degree 18 minutes 37 seconds
West, a distance of 158.87 feet; thence North 87 degrees 23 minutes 26 seconds
West, a distance of 437.33 feet; thence South 01 degree 15 minutes 22 seconds
West, a distance 316.89 feet more or less to the Northerly margin of SE 38th
Street; thence North 63 degrees 38 minutes 11 seconds West along said Northerly
margin, a distance of 90.75 feet; thence North 01 degree 15 minutes 16 seconds
East, a distance of 439.20 feet; North 01 degree 12 minutes 48 seconds East a
distance of 14.22 feet; thence South 87 degrees 23 minutes 26 seconds East, a
distance of 321.85 feet; thence North 02 degrees 36 minutes 31 seconds East, a
distance of 3.78 feet; thence South 87 degrees 23 minutes 26 seconds East, a
distance of 197.79 feet; thence South 01 degree 18 minutes 37 seconds West, a
distance of 18.00 feet more or less to the POINT OF BEGINNING.
ALSO known as New Lot 2 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
A-1
EXHIBIT B
TO
LEASE AGREEMENT
Legal Description of Project
----------------------------
New Lot 2
- ---------
A portion of Lot 1 of Short Plat No. 280070R, according to the short plat
recorded under King County Recording No. 8011200686, being a revision of short
plat recorded under Recording No. 8009300879.
TOGETHER with that portion of the vacated portion of SE 38th Street lying with
the projected lot lines of the property herein described as vacated by King
County Ordinance No. 6582 as recorded under King County Recording No. 84030789;
TOGETHER with a portion of Parcel C, D, E & F of King County Lot Line Adjustment
No. LLA 8810004, according to the Lot Line adjustment recorded under King County
Recording No. 9101239007, being a portion of the West 1/2 of the Southeast 1/4
of Section 9, Township 24 North, Range 5 East, W.M., described as follows:
Commencing at the Northeast corner of the Southwest 1/4, of the Southeast 1/4
said Section 9; thence North 87 degrees 23' 26" West along the North line of
said Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet to the TRUE
POINT OF BEGINNING; thence South 01 degree 18'37" West, a distance of 158.87
feet; thence North 87 degrees 23'26" West, a distance of 437.33 feet; thence
South 01 degree 15'22" West, a distance 316.89 feet more or less to the
Northerly margin of SE 38th Street; thence North 63 degrees 38'11" West along
said Northerly margin, a distance of 90.75 feet; thence North 01 degree 15'16"
East, a distance of 439.20 feet; North 01 degree 12'48" East a distance of 14.22
feet; thence South 87 degrees 23'26" East, a distance of 321.85 feet; thence
North 02 degrees 36'31" East, a distance of 3.78 feet; thence South 87 degrees
23'26" East, a distance of 197.79 feet; thence South 01 degree 18'37" West, a
distance of 18.00 feet more or less to the POINT OF BEGINNING.
ALSO known as New Lot 2 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
New Lot 3
- ---------
A portion of Parcel F of King County Lot Line Adjustment No. LLA 8810004,
according to the Lot line adjustment recorded under King County Recording No.
9101239007, being a portion of the West 1/2 of the Southwest 1/4 of Section 9,
Township 24 North, Range 5 East, W.M., described as follows:
Commencing at the Northeast corner of the Southwest 1/4, of the Southeast 1/4
of said Section 9; thence North 87 degrees 23'26" West along the North line of
said Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet to the TRUE
POINT OF BEGINNING;
thence North 01 degree 18'37" East, a distance of 18.00 feet;
thence North 87 degrees 23'26" West, a distance of 167.79;
thence North 02 degrees 36'31" East, a distance of 200.60;
thence South 87 degrees 22'55" East, a distance of 106.54;
thence South 02 degrees 37'05" West, a distance of 15.00;
thence South 87 degrees 22'55" East, a distance of 26.70;
thence South 02 degrees 37'05" West, a distance of 126.68;
thence South 87 degrees 22'55" East, a distance of 122.60;
B-1
thence North 02 degrees 37'05" East, a distance of 298.25;
thence North 87 degrees 22'55" West, a distance of 73.95;
thence North 76 degrees 30'25" West, a distance of 65.88;
thence North 87 degrees 22'55" West, a distance of 132.70;
thence South 02 degrees 37'09" West, a distance of 169.00;
thence North 87 degrees 22'55" West, a distance of 122.99;
thence North 39 degrees 24'04" West, a distance of 166.08;
thence North 50 degrees 35'26" East, a distance of 145.27;
thence South 82 degrees 55'24" East, a distance of 452.11;
thence South 01 degree 18'37" West, a distance of 386.45 feet to a point of
curvature of a 537.50 foot radius non tangent curve whose radius point bears
South 76 degrees 33'36" East; thence Southwesterly along the arc of said curve
through a central angle of 12 degrees 07'47", an arc distance of 113.79 feet;
thence South 01 degree 18'37" West, a distance of 33.20 feet; thence North 87
degrees 23'26" West, a distance of 137.99 feet; thence North 01 degree 18'37"
East, a distance of 128.73 feet more or less to the POINT OF BEGINNING.
ALSO known as New Lot 3 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
New Lot 4
- ---------
A portion of Parcels B, C & F of King County Lot Line Adjustment No. LLA
8810004, according to the Lot line adjustment recorded under King County
Recording No. 9101239007, being a portion of the West 1/2 of the Southeast 1/4
of Section 9, Township 24 North, Range 5 East, W.M., described as follows:
Commencing at the Northeast corner of the Southwest 1/4 of the Southeast 1/4 of
said Section 9; thence North 87 degrees 23'26" West along the North line of said
Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet; thence North 01
degree 18'37" East, a distance of 18.00 feet; thence North 87 degrees 23'26"
West, a distance of 167.79 feet to the TRUE POINT OF BEGINNING; thence North
87 degrees 23'26" West, a distance of 30.00 feet; thence South 02 degrees 36'31"
West, a distance of 3.78 feet; thence North 87 degrees 23'26" West, a distance
of 321.85 feet; thence North 01 degree 12'48" East, a distance of 149.44 feet;
thence North 01 degree 15'33" East, a distance of 81.37 feet; thence North 50
degrees 35'56" East, a distance of 145.02 feet; thence South 39 degrees 24'04"
East, a distance of 166.08 feet; thence South 87 degrees 22'55" East, a distance
of 138.50 feet; thence South 02 degrees 36'31" West, a distance of 200.60 feet
more or less to the POINT OF BEGINNING.
ALSO known as New Lot 4 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
Parcel A
- --------
All that certain real property situate in the County of King, State of
Washington, being a portion of the Southeast quarter of the Northwest quarter of
the Southeast quarter of Section 9, Township 24 North, Range 5 East, W.M., in
King County, Washington, and being more particularly described as follows:
Commencing at the intersection of the Southerly line of the lands condemned in
King County Superior Court Cause No. 666834, with the Westerly right-of-way line
of 128th Avenue Southeast, which point is on a line that is parallel with and
30.00 feet Westerly of the East line of said Southeast quarter of the Northwest
quarter of the Southeast quarter of Section 9:
B-2
Thence from said point of commencement along the Southerly line of said
condemned lands North 82 degrees 54'52" West 50.76 feet; thence leaving said
Southerly line at right angles South 07 degrees 05'08"West 32.95 feet to the
TRUE POINT OF BEGINNING of this Parcel A; thence from said TRUE POINT OF
BEGINNING, South 02 degrees 37'37" West 298.25 feet;
thence North 87 degrees 22'23" West 122.60 feet;
thence North 02 degrees 37'37" East 126.68 feet;
thence North 87 degrees 22'23" West 26.70 feet;
thence North 02 degrees 37'37" East 15.00 feet;
thence North 87 degrees 22'23" West 122.05 feet;
thence North 02 degrees 37'37" East 169.00 feet;
thence South 87 degress 22'23" East 132.70 feet;
thence South 76 degrees 29'53" East 65.88 feet;
thence South 87 degrees 22'23" East 73.95 feet to the TRUE POINT OF BEGINNING.
B-3
EXHIBIT C
TO
LEASE AGREEMENT
Plan of the Premises
--------------------
C-1
EXHIBIT D
TO
LEASE AGREEMENT
Shell and Core Items for Building and List of Building Plans and Specifications
- -------------------------------------------------------------------------------
Sterling Plaza II: Definition of Shell and Core Building Improvements (Revised
- ----------------------------------------------------------------------
3 March 00)
The following work is to be provided by Landlord as the shell and core building
improvements to support the Tenant's Tenant Improvements and occupancy. This
Definition is supplemented by additional information shown in the Plans and
Specifications prepared by Curtis Beattie & Associates Architects for the base
building marked "Bid Set" 01 Feb 00, as specifically listed in this Exhibit D.
---------
In the event of inconsistencies in the description of the shell and core
building improvements between this Lease and the Plans and Specifications, this
Lease will control.
1. The Landlord is to provide the completed and operational "shell and core"
building, as that terminology is generally used in the local real estate
development industry, as clarified in this Definition and in the Plans and
Specifications. The shell and core shall meet or exceed local development
standards, building codes and good industry practice. The completed shell
and core is to include:
a. Site improvements.
b. Utilities serving the site and the building.
c. Landscaping and irrigation.
d. Exterior lighting.
e. The building structure including:
. 12'-6" floor to floor height at tenant floors.
. Concrete floor slabs with troweled finish ready for tenant
improvements.
. A floor structural capacity in all tenant areas of 80 psf live
load plus 20 psf tenant partition load in addition to the
structure dead load.
f. The exterior building enclosure. Glazing shall have a shading
coefficient of 0.33 or less.
g. A two level parking garage.
h. Three passenger elevators, including two with 3,000 lb. capacity
and one with 3,500 lb. capacity with a 9'-4" ceiling height for
service.
i. Building services areas in the parking garage and at the roof,
complete.
j. Shell interior construction including:
. Thermal insulation at exterior walls, and under floors and roof
structure where required.
. Steel stud framing and GWB at exterior walls and columns facing
tenant spaces taped and ready for paint.
k. Core interior construction including:
. Steel stud framing and GWB at core walls, columns and shear walls
facing Tenant spaces taped and ready for paint.
. Core rooms, stairways and shafts complete (other than
supplemental electrical, HVAC and plumbing services added by
the Tenant).
. Building standard locksets at fire exit stair doors leading to
tenant areas.
. Elevator lobbies on each floor, substantially complete,
including the automated smoke separation doors.
. Main building lobby, substantially complete, including balcony
on 2nd floor and related partitions, doors and relights
separating the lobby areas from tenant areas.
l. 2'x4' acoustical ceiling grid installed throughout tenant areas.
m. Required quantities of 2'x4' Class A mineral and/or ceramic fiber
acoustical ceiling tile stocked on each floor ready for installation.
n. Building signs required by code at the exterior and interior core
o. Shell and core access control systems (see item 2).
p. Shell and core fire sprinkler systems (see item 3).
q. Shell and core HVAC and related control systems (see item 4).
r. Shell and core plumbing systems (see item 5)
D-1
s. Shell and core electrical lighting and power systems (see item 6).
t. Shell and core communications systems (see item 7).
u. Shell and core electrical and electronic life safety systems (see
item 8).
2. The shell and core access control system includes:
a. A 24 hour / 7 day central proximity card access control system for the
building.
b. Base access control at the main building entrance, the two parking
garage elevator lobby vestibules, exterior door 1-07 and the three
elevators.
3. The shell and core fire sprinkler systems include:
a. Central fire protection sprinkler systems for a fully sprinklered
building. The dry system serves the garage areas and the wet system
serves the office floors.
b. Sprinkler systems installed complete and operational in all parking
and core areas. Includes semi-recessed heads in areas with finish
ceilings.
c. Sprinkler system mains and laterals installed in tenant areas, with
sufficient capacity and in a pattern to accommodate future typical
office tenant improvements.
d. Plain brass upright, pendant or side wall sprinkler heads installed in
tenant areas at a minimum density required by code for unoccupied
spaces in an occupied building.
4. The shell and core HVAC and related control systems include:
a. The shell and core HVAC system shall be designed for the loads shown
on drawing M0.1 using ASHRAE Design Data.
b. Five main vertical self contained, water cooled, DX central air
conditioning units with 100% outside air economizer capability. Each
unit shall have a 50 ton capacity and serve one floor of the building.
c. One central cooling tower and condenser water system sized to handle
the central air conditioning units plus approximately 50 tons and
approximately 100 gpm additional capacity available for tenant loads.
The condenser water system shall be configured to allow extension to
tenant areas, but no distribution below the roof is included.
d. Centralized and vertical supply air ductwork and return air systems to
each floor.
e. Supply air ductwork systems at each tenant floor to the VAV boxes.
Ductwork shown on the Plans as a solid line is included in the shell
and core work. Ductwork shown dashed is not included.
f. VAV boxes in tenant areas shown on the Plans as a solid line are
included in the shell and core in operational condition. VAV units
shown dashed are not included. VAV boxes include associated power and
controls to make operational.
g. Digital central energy management, control and monitoring systems
installed and operational for all shell and core equipment. The system
shall have the capacity to include the VAV boxes shown dashed on the
Plans, and be expandable to include related control and monitoring for
other tenant improvements. The system shall allow convenient after-
hours tenant control on a floor by floor and zone by zone basis.
5. The shell and core plumbing systems include:
a. Plumbing systems complete for the shell and core areas including all
fixtures.
b. Drinking fountains on each tenant floor.
c. Cold water supply piping stubbed out of the core above the ceiling at
each tenant floor for tenant improvements.
d. 4" waste and 3" vent lines installed to a capped stub-out for each
service at the outboard end of each tenant floor stairway for tenant
improvements.
6. The shell and core electrical lighting and power systems include:
a. A 3,000 amp 480Y/277 volt building service fed by a minimum 1,000 kva
utility company transformer. The Landlord shall, with the Tenant's
cooperation, resubmit application to Puget Sound Energy for service to
have Puget Sound Energy provide a 1,500 kva transformer in lieu of the
1,000 kva.
b. Electrical and lighting systems installed and operational at all
parking and core areas, including all elevator lobbies and the main
building lobby.
c. Electrical power installed to VAV boxes in tenant areas installed as a
part of shell and core (see item 4.f).
D-2
d. A 200 kw, 480 volt standby generator to power building "life safety"
systems and battery powered emergency lighting.
e. Each tenant floor shall have one 480/277 volt panel one 112.5 kva
transformer and two 208/120 volt panels as described on the Plans
available for tenant lighting and power additions.
f. The capacity of the electrical system shall provide for a minimum of
4.5 watts per square foot for tenant lighting and power.
g. A microprocessor-based digital lighting control system installed and
operational as required for all shell and core lighting. The system
shall have the capacity to include the lighting installed as a part of
Base Building Standard. The system shall allow after-hours tenant area
lighting.
7. The shell and core communications systems include:
a. Telephone and data utility conduits / access pathways and related
provisions to a central telecommunications room located in the garage.
b. Four 4" conduits from telecommunications room to the 1st floor
electrical / telcom closet and four 4" conduit sleeves to each telcom
closet above.
c. Plywood telephone backboards at each tenant floor telcom closet.
8. The shell and core life safety systems include:
a. Fire alarm systems installed and operational for the parking garage,
all core areas and at shell and core HVAC and fire sprinkler systems.
The systems shall have sufficient capacity to be expanded for fire
alarm systems required as a part of future tenant improvements.
b. Code required emergency power and required battery back-up systems for
life safety systems.
c. Fire extinguishers at parking garage and core areas.
9. Base shell and core improvements shall be designed to support the Tenant's
Tenant Improvements.
List of Plans and Specifications
- --------------------------------
Architectural
- -------------
A0.0 Cover Sheet
A0.1 Statistics & General Notes
A0.2 Site Survey
A0.3 Average Grade/Lot Coverage Calculations
A0.4 Landscape Area Calculations
A0.5 Glazing Area Calculations
A1.1 Site Plan
A1.2 Enlarged Entry Plan
A1.3 Site Sections & Elevations
A2.1 Lower Parking Level Plan
A2.2 Upper Parking Level Plan
A2.3 First Floor Plan
A2.4 Second Floor Plan
A2.5 Third Floor Plan
A2.6 Fourth Floor Plan
A2.7 Fifth Floor Plan
A2.8 Roof Plan
A3.1 North and West Elevations
A3.2 South and East Elevations
A3.3 Building Sections
D-3
A4.1 Enlarged Upper & Lower Parking Level Plans
A4.2 Enlarged First & Second Floor Core Plans and Bathroom Elevations
A4.3 Enlarged Third through Fifth Floor Core Plans
A4.4 Enlarged Roof Plans
A4.5 Mechanical Penthouse Sections/Elevations
A4.6 Wall Sections
A4.7 Wall Sections
A4.8 Wall Sections
A4.9 Enlarged Lobby / Reflected Ceiling Plans
A4.10 Lobby Elevations
A5.1 Stair Section and Plans - West Stair
A5.2 Stair Section and Plans - East Stair
A5.3 Miscellaneous Stair and Metal Details
A6.1 Precast & Window Details
A6.2 -Not Included With Permit Issue-
A6.3 Roof Details
A6.4 Exterior Wall Details
A6.5 Exterior Wall Details
A6.6 Parking Level Details
A7.1 Wall Types
A7.2 Interior Details
A8.1 Door Schedule
A8.2 Door Details
A9.1 Typical Reflected Ceiling Plan
A9.2 Second Floor Reflected Ceiling Plan
A9.3 Third Floor Reflected Ceiling Plan
A9.4 Fourth Floor Reflected Ceiling Plan
A9.5 Fifth Floor Reflected Ceiling Plan
Structural
- ----------
S1.1 Structural Notes
S1.2 Post-Tensioning Notes, Abbreviations & Symbols
S2.1E Foundation and Lower Parking Level Plan, East
S2.1W Foundation and Lower Parking Level Plan, West
S2.2E Upper Parking Level Plan, East
S2.2W Upper Parking Level Plan, West
S2.3 First Floor Plan
S2.4 Second Floor Plan
S2.5 Third Floor Plan
S2.6 Fourth Floor Plan
S2.7 Fifth Floor Plan
S2.8F Roof Framing Plan
S2.8R Roof Reinforcing Plan
S2.9 Partial Plans
S3.1 Elevations
S3.2 Elevations
D-4
S4.1 Typical Details & Schedules - Foundations & Concrete Walls
S4.2 Typical Details & Schedules - Columns & Beams
S4.3 Typical Details & Schedules -Slabs and CMU Walls
S4.4 Typical Details & Schedules -Shear Walls
S4.5 Typical Details & Schedules -Moment Frames
S4.6 Typical Details & Schedules -Post-Tensioned Slabs
S5.1 Sections and Details
S5.2 Sections and Details
S5.3 Sections and Details
S5.4 Sections and Details
Landscape
- ---------
L-1 Landscape Plan, Legend & Details
L-2 Irrigation Plan, Schedule & Notes
L-3 Irrigation Details & Water Conservation Calculations
Civil
- -----
C-1 Cover Sheet
C-2 & C-3 Topographic Survey
C-4 Grading and Utility Plan
C-5 Site Details
C-6 T.E.S.C. Details
C-7 Utility Profiles
C-8 General Notes
C-9 T.E.S.C. Plan
C-10 Site Plan "B"
C-11 Underslab Drainage Plan
Mechanical
- ----------
M0.1 Title Sheet, Legend & Abbreviations, Vicinity Map
M1.1 Site Plan - Utility Coordination Plan [Not in Current Set]
M2.0 Foundation Plan - Plumbing
M2.1 Lower Parking Level Plan
M2.2 Upper Parking Level Plan
M2.3 First Floor Plan
M2.4 Second Floor Plan
M2.5 Third Floor Plan
M2.6 Fourth Floor Plan
M2.7 Fifth Floor Plan
M2.8 Mechanical Penthouse Plan
M3.1 Mechanical Diagrams
M4.1 Core Plans - Plumbing
M4.2 Plumbing Details
M4.3 Plumbing Schematic
D-5
M5.1 Mechanical Schedules
M5.2 Mechanical Schedules
Electrical
- ----------
E-00 Legend / Cover Sheet
E3-00 One-Line
E2-00 Site Lighting
E2-11P Lower Level Parking Lighting
E2-12P Upper Level Parking Lighting
E2-11 First Floor Lighting
E2-12 Second Floor Lighting
E2-13 Third Floor Lighting
E2-14 Fourth Floor Lighting
E2-15 Fifth Floor Lighting
E2-16 Roof Lighting
E2-21P Lower Level Parking Power
E2-22P Upper Level Parking Power
E2-21 First Floor Power
E2-22 Second Floor Power
E2-23 Third Floor Power
E2-24 Fourth Floor Power
E2-25 Fifth Floor Power
E2-26 Roof Power
E600 Panel Schedules [Included in Technical Specifications]
E601 Panel Schedules [Included in Technical Specifications]
Technical Specifications for Sterling Plaza Phase II dated February 1, 2000,
including Addendum No. 1 dated February 10, 2000, and Addendum No. 2 dated
February 16, 2000.
D-6
EXHIBIT E
TO
LEASE AGREEMENT
Scope of Tenant Improvements
----------------------------
[To be provided by Tenant]
E-1
EXHIBIT F
TO
LEASE AGREEMENT
Form of Letter of Credit
------------------------
FOR INTERNAL IDENTIFICATION PURPOSES ONLY
Our No. __________ Other __________
Applicant ___________________________
TO: Sterling Realty Organization Co.
600 - 106th Avenue N.E., Suite 200]
Bellevue, Washington 98108
IRREVOCABLE LETTER OF CREDIT NO. ___________
We hereby establish this irrevocable Letter of Credit in favor of the
aforesaid addressee ("Beneficiary") for drawings up to United States $__________
effective immediately. This Letter of Credit is issued, presentable and payable
at our office at [issuing bank's address] and expires with our close of business
------------------------
on ___________, 20__.
The term "Beneficiary" includes any successor by operation of law of
the named Beneficiary including, without limitation, any liquidator,
rehabilitator, receiver or conservator.
We hereby undertake to promptly honor your sight draft(s) drawn on us,
indicating our Credit No. ________, for all or any part of this Credit if
presented at our office specified in paragraph one on or before the expiry date
or any automatically extended expiry date, along with a certificate in the form
of Exhibit A attached hereto certifying that iShip.com, Inc., the tenant under
---------
that certain Lease Agreement between Sterling Realty Organization Co. and
iShip.com, Inc. dated March ___, 2000, is in default thereunder beyond any
applicable notice and cure periods.
Except as expressly stated herein, this undertaking is not subject to
any agreement, condition or qualification. The obligation of [issuing bank]
--------------
under this Letter of Credit is the individual obligation of [issuing bank], and
--------------
is in no way contingent upon reimbursement with respect thereto.
It is a condition of this Letter of Credit that it is deemed to be
automatically extended without amendment for one year from the expiry date
hereof, or any future expiration date, unless thirty (30) days prior to an
expiration date we notify you by registered mail that we elect not to consider
this Letter of Credit renewed for any such additional period.
This Letter of Credit is subject to and governed by the Laws of the
State of New York and the 1993 revision of the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce (Publication 500)
and, in the event of any conflict, the Laws of the State of New York will
control. If this Credit expires during an interruption of business as described
in article 17 of said Publication 500, the bank hereby specifically agrees to
effect payment if this Credit is drawn against within 30 days after the
resumption of business.
Very truly yours,
_______________________
F-1
EXHIBIT A
TO
LETTER OF CREDIT
Form of Certificate of Default by Tenant
----------------------------------------
To: [Issuing Bank]
From: Sterling Realty Organization Co.
Regarding: Letter of Credit No. ___________
CERTIFICATE OF DEFAULT BY TENANT
Sterling Realty Organization Co., the landlord under that certain Lease
Agreement between Sterling Realty Organization Co., a Washington corporation
("Landlord"), and iShip.com, Inc., a Washington corporation ("Tenant"), dated
March ___, 2000 (the "Lease"), hereby certifies to [Issuing Bank] as follows:
1. that Tenant is in default of its obligations under the Lease beyond the
notice and cure periods applicable to such default; and
2. based on Tenant's default, and under the provisions of the Lease, Landlord
is entitled to draw down the entire amount of this Letter of Credit No.
_______.
STERLING REALTY ORGANIZATION CO.,
a Washington corporation
By:_____________________________
Its:_________________________
Date:___________________________
F-2
EXHIBIT G
---------
TO
LEASE AGREEMENT
Form of Lease Guaranty
----------------------
GUARANTY OF LEASE
THIS GUARANTY OF LEASE is made and given by STAMPS.COM, INC., a Delaware
corporation ("Guarantor"), to and for the benefit of STERLING REALTY
ORGANIZATION CO., a Washington corporation ("Landlord"), with respect to that
certain Lease Agreement between Landlord and iSHIP.COM, a Washington corporation
and a wholly-owned subsidiary of Guarantor ("Tenant"), dated March 7, 2000 (the
"Lease").
FOR VALUE RECEIVED and in consideration of and as an inducement to Landlord
entering into the Lease, Guarantor unconditionally and continuously guarantees
to Landlord, its successors and assigns, the full and timely performance and
observance by Tenant of all the terms and conditions of the Lease to be
performed and observed by Tenant.
This Guaranty and the obligations of Guarantor hereunder shall not be
terminated or impaired by reason of the granting by Landlord of any indulgences
to Tenant or the assertion by Landlord against Tenant of any of Landlord's
rights or remedies under the Lease, or by the relief of Tenant from any of
Tenant's obligations under the Lease by operation of law or otherwise, whether
or not Guarantor has received notice of same. Guarantor waives all suretyship
defenses and waives notice of any breach by Tenant.
This Guaranty shall continue in full force and effect as to any renewal,
amendment, modification, extension, assignment or transfer of the Lease or any
subletting of the Lease premises, whether or not Guarantor shall have received
notice of or consented to the same. The liability of Guarantor under this
Guaranty is primary and absolute, and Landlord may at its option proceed against
Guarantor without proceeding against Tenant. Any action against Guarantor shall
be brought in King County, Washington.
Landlord's delay or failure to insist upon the strict performance or
observance of any obligation of Tenant under the Lease or to exercise any right
or remedy available under the Lease or at law or in equity, shall not be
construed to be a waiver of Landlord's prerogative to insist upon such strict
performance or observance or to exercise any such right or remedy. Receipt by
Landlord of rent or other payment with knowledge of a breach of any term or
condition of the Lease shall not be construed to be a waiver of such breach.
The liability of Guarantor hereunder shall not be affected or limited by:
(a) the release or discharge of Tenant in any creditors', receivership,
bankruptcy or other proceedings; (b) the impairment, limitation or modification
of the liability of the Tenant or the estate of Tenant in bankruptcy, or of any
remedy for the enforcement of Tenant's liability under the Lease resulting from
the operation of any present or future provision of the federal bankruptcy laws
or other statutes or from the decision in any court; (c) the rejection or
disaffirmance of the Lease in any such proceedings; (d) any disability or other
defense of Tenant; or (e) the cessation, from any cause whatsoever, of the
liability of Tenant.
Until all the terms, conditions and agreements of the Lease are fully
performed and observed by Tenant, Guarantor hereby waives the right to enforce
any claim, right or remedy which Guarantor now has or hereafter shall have
against Tenant by reason of any one or more payments or acts of performance in
compliance with the obligations of Guarantor hereunder, and Guarantor hereby
subordinates any liability or indebtedness of Tenant now or hereafter held by
Guarantor to the obligations of Tenant to Landlord under the Lease.
G-1
This Guaranty shall inure to the benefit of Landlord, its affiliates,
successors and assigns, and shall be binding upon the successors and assigns of
Guarantor.
This Guaranty is irrevocable and may not be changed, affected, discharged
or terminated other than by an agreement in writing signed by Guarantor and
Landlord.
Guarantor shall pay all costs and expenses paid or incurred by Landlord in
enforcing either the Lease or this Guaranty, including court costs and a
reasonable amount for legal services performed by counsel, whether employed or
retained by Landlord.
DATED this 7th day of March, 2000.
GUARANTOR:
STAMPS.COM, INC.,
a Delaware corporation
By:________________________
Its:____________________
STATE OF _______________ )
) ss.
COUNTY OF ______________ )
On this ________ day of March, 2000, before me personally appeared
_____________________________, to me known to be the ________________________ of
STAMPS.COM, INC., a Delaware corporation, the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free
and voluntary act and deed of such corporation for the uses and purposes therein
mentioned, and on oath stated that ______ was authorized to execute said
instrument.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal
the day and year first above written.
___________________________________
(Signature)
___________________________________
(Please print name legibly)
NOTARY PUBLIC in and for the State of
_____________, residing at ___________
My commission expires_________________
G-2
EXHIBIT H
TO
LEASE AGREEMENT
Rules and Regulations
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1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without
the prior written consent of the Landlord. Landlord shall have the right
to remove, at Tenant's expense and without notice, any sign installed or
displayed in violation of this rule. All approved signs or lettering on
doors and walls shall be printed, painted, affixed or inscribed at the
expense of Tenant by a person chosen by Landlord.
2. If Landlord objects in writing to any curtains, blinds, shadow, screens or
hanging plants or other similar objects attached to or used in connection
with any window or door of the Premises, Tenant shall immediately
discontinue such use. No awning shall be permitted on any part of the
Premises. Tenant shall not place anything against or near glass partitions
or doors or windows which may appear unsightly from outside the Premises.
3. Tenant shall not obstruct any sidewalk, halls, passages, exits, entrances,
elevators, escalators, or stairways of the Building. The halls, passages,
exits, entrances, shopping malls, elevators, escalators and stairways are
not open to the general public. Landlord shall in all cases retain the
right to control and prevent access thereto of all persons whose presence
in the judgment of Landlord would be prejudicial to the safety, character,
reputation and interest of the Building and its tenants; provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course or its
business, unless such persons are engaged in illegal activities. No tenant
and no employee or invitee of any tenant shall go upon the roof of the
Building except in accordance with the provisions of the Communications
Site Lease between Landlord and Tenant.
4. The directory of the Building will be provided exclusively for the display
of the name and location of tenants only, and Landlord reserves the right
to exclude any other names therefrom.
5. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord, and except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be employed by Tenant or permitted to enter the Building for
the purpose of cleaning the same. Tenant shall not cause any unnecessary
labor by carelessness or indifference to the good order and cleanliness of
the Premises. Landlord shall not in any way be responsible to any Tenant
for any loss of property on the Premises, however occurring, or for any
damage to Tenant's property by the janitor or any other employee or any
other person.
6. Landlord will furnish Tenant, free of charge, two keys to each door lock in
the Premises. Landlord may make a reasonable charge for any additional
keys. Tenant shall not make or have made additional keys, and Tenant shall
not alter any lock or install a new additional lock or bolt on any door of
the Premises. If Tenant installs a separate security system, Tenant shall
provide Landlord with card keys or passwords for emergency access. Tenant,
upon the termination of its tenancy, shall deliver to Landlord the keys of
all doors which have been furnished to Tenant, and in the event of any keys
so furnished, shall pay Landlord therefore.
7. If Tenant requires telegraphic, telephonic, security system or similar
services, it shall first obtain, and comply with, Landlord's instructions
for their installation.
8. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot for which such floor was designed to carry and
which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all equipment, materials, furniture or other
property brought into
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the Building. Heavy objects shall, if considered necessary by Landlord,
stand on such platforms as determined by Landlord to be necessary to
properly distribute the weight. Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted
to the structure of the Building or to any space therein or to any other
tenant in the Building, shall be placed and maintained by Tenant, at
Tenant's expenses, on vibration eliminators or other devices sufficient to
eliminate noise or vibration. The persons employed to move such equipment
in or out of the Building must be acceptable to Landlord. Landlord will not
be responsible for loss of, or damage to, any such equipment or other
property from any cause, and all damage done to the Building by maintaining
or moving such equipment or other property shall be repaired at the expense
of Tenant.
9. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited
quantities necessary for the operation or maintenance of office equipment.
Tenant shall not use or permit to be used in the Premises any foul or
noxious gas or substance, or permit or allow the Premises to be occupied or
used in a manner offensive or objectionable to Landlord or other occupants
of the Building by reason of noise, odors or vibrations, nor shall Tenant
bring into or keep in or about the Premises any birds or animals.
10. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord.
11. Tenant shall not waste electricity, water or air-conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building's heating and air-conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Tenant has actual notice,
and shall refrain from attempting to adjust controls.
12. Landlord reserves the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building.
13. Landlord reserves the right to exclude from the Building between the hours
of 6 p.m. and 7 a.m. the following day, or such other hours as may be
established from time to time by Landlord, and on Sundays and legal
holidays, any person unless that person is known to the person or employee
in charge of the Building and has a pass or is properly identified. Tenant
shall be responsible for all persons for whom it requests passes and shall
be liable to Landlord for all acts of such persons. Landlord shall not be
liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. Landlord reserves the right to
prevent access to the Building in case of invasion, mob, riot, public
excitement or other commotion by closing the doors or by other appropriate
action.
14. Tenant shall close and lock the doors of its Premises and entirely shutoff
all water faucets or other water apparatus, and electricity, gas or air
outlets before Tenant and its employees leave the Premises. Tenant shall
be responsible for any damage or injuries sustained by other tenants or
occupants of the Building or by Landlord for noncompliance with this rule.
15. The Building is a no-smoking building. Tenant, its employees, agents,
guests, invitees, and licensees are prohibited at all times from smoking
within the Building, the Premises, the Common Area or the Land, except in
designated smoking areas outside the Building and the Premises, which shall
be identified by Landlord from time to time.
16. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed
and no foreign substance of any kind whatsoever shall be thrown therein.
The expenses of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose employees
or invitees, shall have caused it.
17. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise
to the general public in or on the Premises. Tenant shall not make any
room-to-room solicitation of business from other tenants in the Building.
Tenant shall not use the Premises for any business or activity other than
that specifically provided or in Tenant's Lease.
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18. Tenant shall not install any radio or television antenna, telecom
equipment, loudspeaker or other device on the roof or exterior walls of the
Building. Tenant shall not interfere with radio or television broadcasting
or reception from or in the Building or elsewhere.
19. Tenant shall not mark, drive nails, screws or drill into the partitions,
woodwork or plaster or in any way deface the Premises or any part thereof.
Landlord reserves the right to direct electricians as to where and how
telephone and telegraph wires are to be introduced to the Premises. Tenant
shall not cut or bore holes for wires. Tenant shall not affix any floor
covering to the floor of the premises in any manner except as approved by
Landlord. Tenant shall repair any damage resulting from noncompliance with
this rule, except that Tenant shall be permitted to use nails, screws, or
other hardware necessary to hang artwork, display boards and other standard
office fixtures.
20. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Building are prohibited, and each tenant
shall cooperate to prevent the same.
21. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence
of liquor or drugs or who is in violation of any of the Rules and
Regulations of the Building.
22. Tenant shall store all trash and garbage within its Premises. Tenant shall
not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage
disposal. All garbage and refuse disposal shall be made in accordance with
directions issued from time to time by Landlord. Disposal of any large
debris will be at Tenant's expense.
23. The Premises shall not be used for the storage of merchandise hold for sale
to the general public, or for lodging or for manufacturing of any kind, nor
shall the Premises be used for any improper or immoral or objectionable
purpose.
24. Microwave cooking is permitted on the Premises, as is use by Tenant of
Underwriters' Laboratory approved equipment for brewing coffee, tea, hot
chocolate and similar beverages, provided that such equipment is used in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations. Tenant is not allowed to use space
heaters in the Premises. All appliance outlets shall be equipped and
operated by mechanical timers.
25. Tenant shall not use in any space or in the public halls of the Building
any hand truck except those equipped with rubber tires and side guards or
such other material-handling equipment as Landlord may approve. Tenant
shall not bring any other vehicles of any kind into the Building.
26. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the business
of Tenant except as Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant shall take reasonable measures to protect its Premises from theft,
robbery, and pilferage, which includes keeping doors locked and other means
of entry into the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application to the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, and
no employee of Landlord will admit any person (Tenant or otherwise) to any
office without specific instructions from Landlord.
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30. Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building. Tenant shall
not leave vehicles in the Building parking areas overnight nor park any
vehicles in the Building parking areas other than automobiles, motorcycles,
motor driven or non-motor driven bicycles or four-wheeled trucks.
31. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall
be construed as a waiver of such Rules and Regulations in favor of Tenant
of any other tenant, nor prevent Landlord from thereafter reasonably
enforcing any such Rules and Regulations against any or all of the tenants
of the Building.
32. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.
33. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the
preservation of good order therein. Tenant agrees to abide by all such
Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted.
34. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees and
guests.
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EXHIBIT I
TO
LEASE AGREEMENT
Exclusions from Operating Costs
-------------------------------
(1) attorneys' fees, accounting fees and other expenditures incurred in
connection with negotiations, disputes and claims of other tenants or
occupants of the Building or with other third parties, except as
specifically otherwise provided in the Lease;
(2) financing costs, including interest and principal amortization of debts,
but excluding any local improvement district assessments made against the
Property (unless such assessment was levied in connection with the
development of the Building);
(3) wages, bonuses and other compensation of employees above the grade of
building manager;
(4) any liabilities, costs or expenses associated with or incurred in
connection with the removal, enclosure, encapsulation or other handling of
asbestos or other hazardous or toxic materials or substances which were
placed on the Property by Landlord and were deemed toxic or hazardous
pursuant to then-applicable law at the time so placed;
(5) costs of any items for which Landlord is paid or reimbursed by insurance
(provided Landlord shall use its best effort to collect any insurance
proceeds to which it is entitled);
(6) increased insurance assessed specifically to any tenant of the Building;
(7) charges for electricity, water or other utilities and applicable taxes for
which Landlord is entitled to reimbursement from any other tenant;
(8) cost of any HVAC, janitorial or other services charged to tenants on an
extra cost basis after regular business hours;
(9) cost of installing, operating and maintaining any specialty service, such
as an observatory, broadcasting facilities, luncheon club, athletic or
recreation club, or child-care facility;
(10) cost of correcting defects in the design, construction or equipment of, or
latent defects in, the Building;
(11) cost of any work or services to the extent performed for any facility other
than the Building (provided Landlord shall have the right to reasonably
allocate the cost of services provided to more than one facility);
(12) any cost representing an amount paid to a person, firm, corporation or
other entity related to or affiliated with Landlord that is in excess of
the amount which would have been paid in the absence of such relationship;
(13) any cost of painting or decorating any interior parts of the Building other
than common areas;
(14) capital expenditures, other than those (a) required to be made by
applicable laws first enacted after the Commencement Date; or (b ) incurred
with a reasonable expectation of increasing the operating efficiency of the
Building. All such capital improvements shall be amortized on a straight-
line basis over their useful lives.
(15) charitable or political contributions;
(16) Landlord shall not recover any item of cost more than once;
(17) cost of any work or service performed by Landlord for any tenant in the
Building to the extent such work or service is provided to a materially
greater extent or in a materially more favorable manner than furnished
generally to the tenants and other occupants of the Building; and
(18) assessments levied in connection with the development of the Building.
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EXHIBIT J
TO
LEASE AGREEMENT
Form of Subordination, Attornment, Notice and Non-Disturbance Agreement
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
- -----------------------------
- -----------------------------
- -----------------------------
- -----------------------------
SUBORDINATION, ATTORNMENT, NOTICE
AND NON-DISTURBANCE AGREEMENT
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Grantor:
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Grantee:
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Legal Description:
Abbreviated:
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Full:
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Assessor's Property Tax
Parcel Account Numbers:
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THIS AGREEMENT is made and entered into as of the _____ day of
_________________, ______, by and among (i) iSHIP.COM, INC., a Washington
corporation ("Tenant"), whose principal address is 3545 Factoria Boulevard S.E.,
Bellevue, Washington 98006; (ii) _______________________, a
______________________________ ("Lender"), whose principal address is
_______________________________________; and (iii) STERLING REALTY ORGANIZATION
CO., a Washington corporation ("Borrower"), whose principal address is 600 -
106th Avenue N.E., Suite 200, Bellevue, Washington 98004.
RECITALS:
A. Lender has agreed to make a mortgage loan (the "Loan") to Borrower in
the amount of ____________________________ Dollars ($_____________________) to
be secured by a mortgage or deed of trust (the "Mortgage") on the real property
legally described in Exhibit A attached hereto (the "Property");
---------
B. Tenant is the present lessee under a lease dated
______________________, made by Borrower as landlord ("Landlord"), demising a
portion of the Premises and other property (said lease and all amendments
thereto being referred to as the "Lease");
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C. The Loan terms require that Tenant subordinate the Lease and its
interest in the Premises in all respects to the lien of the Mortgage and that
Tenant attorn to Lender; and
D. In return, Lender is agreeable to not disturbing Tenant's possession
of the portion of the Property covered by the Lease (the "Premises"), so long as
Tenant is not in default under the Lease.
NOW, THEREFORE, in consideration for the mutual covenants contained herein
and other consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
AGREEMENTS:
1. Subordination. The Lease, and the rights of Tenant in, to and under the
-------------
Lease and the Premises, are hereby subjected and subordinated to the lien
of the Mortgage and to any modification, reinstatement, extension,
supplement, consolidation or replacement thereof as well as any advances
or re-advances with interest thereon and to any mortgages or deeds of
trust on the Property which may hereafter be held by Lender.
2. Tenant Not to Be Disturbed. In the event it should become necessary to
--------------------------
foreclose the Mortgage or Lender should otherwise come into possession of
title to the Property, Lender will not join Tenant in summary or
foreclosure proceedings unless required by law in order to obtain
jurisdiction, but in such event no judgment foreclosing the Lease will be
sought, and Lender will not disturb the use and occupancy of Tenant under
the Lease so long as Tenant is not in default under any of the terms,
covenants or conditions of the Lease beyond any applicable notice and cure
period and has not prepaid the rent except monthly in advance as provided
by the terms of the Lease.
3. Tenant to Attorn to Lender. Tenant agrees that in the event any
--------------------------
proceedings are brought for foreclosure of the Mortgage, it will attorn to
the purchaser as the landlord under the Lease. The purchaser by virtue of
such foreclosure shall be deemed to have assumed and agreed to be bound,
as substitute landlord, by the terms and conditions of the Lease until the
resale or other disposition of its interest by such purchaser, except that
such assumption shall not be deemed of itself an acknowledgment by such
purchaser of the validity of any then existing claims of Tenant against
any prior landlord (including Landlord). All rights and obligations under
the Lease shall continue as though such foreclosure proceedings had not
been brought, except as aforesaid. Tenant agrees to execute and deliver
to any such purchaser such further assurance and other documents,
including a new lease upon the same terms and conditions of the Lease,
confirming the foregoing as such purchaser may reasonably request. Tenant
waives the provisions (i) contained in the Lease or any other agreement
relating thereto, and (ii) of any statute or rule of law now or hereafter
in effect, which may give or purport to give it any right or election to
terminate or otherwise adversely affect the Lease and the obligations of
Tenant thereunder by reason of any foreclosure proceeding.
4. Limitations. Notwithstanding the foregoing, neither Lender nor such other
-----------
purchaser shall in any event be:
(a) liable for any act or omission of any prior landlord (including
Landlord) unless such nonperformance constitutes a default under the
Lease and continues during the period of the Lender's or such other
purchaser's ownership of the Property;
(b) obligated to cure any defaults of any prior landlord (including
Landlord) which occurred prior to the time that Lender or such other
purchaser succeeded to the interest of such prior landlord under the
Lease unless such default continues during the period of the Lender's
or such other purchaser's ownership of the Property;
(c) subject to any offsets or defenses which Tenant may be entitled to
assert against any prior landlord (including Landlord);
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(d) bound by any payment of rent or additional rent by Tenant to any prior
landlord (including Landlord) for more than one month in advance;
(e) bound by any amendment or modification of the Lease made without the
written consent of Lender or such other purchaser, such consent not to
be unreasonably withheld;
(f) liable or responsible for, or with respect to, the retention,
application and/or return to Tenant of any security deposit paid to
any prior landlord (including Landlord), whether or not still held by
such prior landlord, unless and until Lender or such other purchaser
has actually received for its own account as landlord the full amount
of such security deposit; or
(g) bound by any provision in the Lease which obligates Landlord to erect
or complete any building or to perform any construction work or to
make any improvements to the Premises or to expand or rehabilitate any
existing improvements or to restore any improvements following any
casualty or taking or to make a future capital contribution to Tenant
or to apply proceeds of casualty insurance or eminent domain awards
other than as provided in the Mortgage.
5. Acknowledgment of Assignment of Lease and Rent. Tenant acknowledges that
----------------------------------------------
it has notice that the Lease and the rent and all other sums due
thereunder have been assigned or are to be assigned to Lender as security
for the Loan secured by the Mortgage. In the event that Lender notifies
Tenant of a default under the Mortgage and demands that Tenant pay its
rent and all other sums due under the Lease to Lender, Tenant agrees that
it will honor such demand and pay its rent and all other sums due under
the Lease directly to Lender or as otherwise required pursuant to such
notice.
6. Limited Liability. Tenant acknowledges that in all events, the liability
-----------------
of Lender and any purchaser shall be limited and restricted to their
interest in the Property and shall in no event exceed such interest.
7. Lender's Right to Notice of Default and Option to Cure. Tenant will give
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written notice to Lender of any default by Landlord under the Lease by
mailing a copy of the same by certified mail, postage prepaid, addressed
as follows (or to such other address as may be specified from time to time
by Lender to Tenant):
To Lender:
-----------------------------
-----------------------------
-----------------------------
Attn.:
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with copies to:
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-----------------------------
Attn.:
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Upon such notice, Lender shall be permitted and shall have the option, in
its sole and absolute discretion, to cure any such default during the
period of time during which the Landlord would be permitted to cure such
default, but in any event Lender shall have a period of thirty (30) days
after the receipt of such notification to cure such default; provided,
however, that in the event Lender is unable to cure the default by
exercise of reasonable diligence within such 30-day period, Lender shall
have such additional period of time as may be reasonably required to
remedy such default with reasonable dispatch.
8. Successors and Assigns. The provisions of this Agreement are binding upon
----------------------
and shall inure to the benefit of the heirs, successors and assigns of the
parties hereof.
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IN WITNESS WHEREOF, the parties hereto have executed these presents the day and
year first above written.
TENANT:
iSHIP.COM,
a Washington corporation
By:
---------------------------
Name:
-------------------------
Title:
------------------------
LENDER:
------------------------------
By:
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Name:
-------------------------
Title:
------------------------
The terms of the above Agreement are hereby consented, agreed to and
acknowledged.
BORROWER:
STERLING REALTY ORGANIZATION CO.,
a Washington corporation
By:
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Name:
-------------------------
Title:
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
______________________________ is the person who appeared before me, and said
person acknowledged that he/she signed this instrument, and on oath stated that
he/she was authorized to execute the instrument and acknowledged it as the
__________________ of iSHIP.COM, INC., a Washington corporation, to be free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
DATED:
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-----------------------------------------
(Signature)
-----------------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at
------------------
My commission expires
--------------------
STATE OF ____________ )
) ss.
COUNTY OF __________ )
I certify that I know or have satisfactory evidence that _____________ is
the person who appeared before me, and said person acknowledged that he/she
signed this instrument, and on oath stated that he/she was authorized to execute
the instrument and acknowledged it as the __________________ of
______________________________, a _________________ corporation, to be free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
DATED:
-----------------
-----------------------------------------
(Signature)
-----------------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at
------------------
My commission expires
--------------------
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that
_________________________ is the person who appeared before me, and said person
acknowledged that ________ signed this instrument, on oath stated that ________
was authorized to execute the instrument and acknowledged it as the
___________________ of STERLING REALTY ORGANIZATION CO., a Washington
corporation, to be the free and voluntary act of such corporation for the uses
and purposes mentioned in the instrument.
DATED:
-----------------
------------------------------------------
(Signature)
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(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at
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My commission expires
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EXHIBIT A
TO
SUBORDINATION, ATTORNMENT, NOTICE
AND NON-DISTURBANCE AGREEMENT
Legal Description of Property
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New Lot 2
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A portion of Lot 1 of Short Plat No. 280070R, according to the short plat
recorded under King County Recording No. 8011200686, being a revision of short
plat recorded under Recording No. 8009300879.
TOGETHER with that portion of the vacated portion of SE 38th Street lying with
the projected lot lines of the property herein described as vacated by King
County Ordinance No. 6582 as recorded under King County Recording No. 84030789;
TOGETHER with a portion of Parcels C, D, E & F of King County Lot Line
Adjustment No. LLA 8810004, according to the Lot Line adjustment recorded under
King County Recording No. 9101239007, being a portion of the West 1/2 of the
Southeast 1/4 of Section 9, Township 24 North, Range 5 East, W.M., described as
follows:
Commencing at the Northeast corner of the Southwest 1/4, of the Southeast 1/4
said Section 9; thence North 87 degrees 23' 26" West along the North line of
said Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet to the TRUE
POINT OF BEGINNING; thence South 01 degrees 18'37" West, a distance of 158.87
feet; thence North 87 degrees 23'26" West, a distance of 437.33 feet; thence
South 01 degress 15'22" West, a distance 316.89 feet more or less to the
Northerly margin of SE 38th Street; thence North 63 degrees 38'11" West along
said Northerly margin, a distance of 90.75 feet; thence North 01 degrees 15'16"
East, a distance of 439.20 feet; North 01 degrees 12'48" East a distance of
14.22 feet; thence South 87 degrees 23'26" East, a distance of 321.85 feet;
thence North 02 degrees 36'31" East, a distance of 3.78 feet; thence South 87
degrees 23'26" East, a distance of 197.79 feet; thence South 01 degrees 18'37"
West, a distance of 18.00 feet more or less to the POINT OF BEGINNING.
ALSO known as New Lot 2 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
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EXHIBIT K
TO
LEASE AGREEMENT
Parking Plan
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EXHIBIT L
TO
LEASE AGREEMENT
Form of Tenant Improvement Promissory Note
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PROMISSORY NOTE
$_____________ Bellevue, Washington
_______________,200__
FOR VALUE RECEIVED, iSHIP.COM, INC., a Washington corporation (the "Maker"),
promises to pay, in lawful money of the United States of America, to the order
of STERLING REALTY ORGANIZATION CO., a Washington corporation, ("Holder"), at
600 - 106th Avenue N.E., Suite 200, Bellevue, Washington 98004, or such other
place either within or without the State of Washington as Holder may designate
in writing from time to time, the principal sum of
______________________________ Dollars ($__________) or so much thereof as may
disbursed and outstanding, together with interest on the unpaid principal
balance from the date of each advance at the rate stated below, in accordance
with the terms of this Note.
1. Interest Rate. From the date of this Note, the principal balance shall
bear interest at a rate equal to ___________________________ percent (___%)
per annum.
2. Payments. Commencing on ___________________, and on the first day of each
month thereafter through the Maturity Date, Maker shall pay to Holder
payments of principal and interest in the amount _________________________
Dollars ($_________), which amount is calculated based on the outstanding
principal balance of this Note, the interest rate stated in paragraph 1
above, and an amortization period of eight (8) years. Maker will pay
Holder at Holder's address shown above or at such other place as Holder may
designate in writing. Unless otherwise agreed or required by applicable
law, payments will be applied first to accrued unpaid interest, and then to
principal. If not sooner paid, the outstanding principal balance of this
Note and all accrued unpaid interest is due on _______________________ (the
"Maturity Date")
3. Prepayment. This Note may be prepaid in whole or in part at any time
without premium or penalty.
4. Late Charge. If any monthly payment is not made within ten (10) days of
the due date, Maker shall pay to Holder on demand a late charge equal to
three percent (3%) of the amount of the payment to defray the overhead
expenses of Holder incident to the delay.
5. Events of Default. The failure to timely make any payment under this
Note shall be an Event of Default.
6. Remedies; Default Interest. Upon any Event of Default, Holder may declare
the entire principal balance and all accrued interest immediately due and
payable. Whether or not Holder exercises such option to accelerate, the
entire principal balance and all accrued interest shall bear interest from
the date of such Event of Default at a default rate of three percent (3%)
above the interest rate otherwise payable under this Note. Default interest
is payable on demand. Holder's failure to exercise any right or remedy
shall not be a waiver of the right to exercise the same upon any subsequent
Event of Default.
7. Collection Expenses. Maker shall reimburse Holder on demand for all
reasonable legal fees and other costs and expenses incurred in collecting
or enforcing this Note. Such fees, costs and expenses shall include those
incurred with or without suit and in any appeal, any proceedings under any
present or future federal bankruptcy act or state receivership, and any
post-judgment collection proceedings.
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8. Waivers. Except as provided above, Maker waives all notices otherwise
required by law, including without limitation presentment and demand for
payment, protest, and notice of demand, protest, dishonor and nonpayment.
9. Miscellaneous.
(a) This Note shall be construed, enforced and otherwise governed by the
laws of the State of Washington.
(b) Any notice to Maker under this Note shall be to the address noted
below, or such other address as may be designated by Maker in writing,
and shall be deemed to have been given on the date delivered in the
case of personal delivery or, if mailed, three (3) days after the
postmark thereof.
MAKER ACKNOWLEDGES THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
MAKER:
iSHIP.COM, INC., a Washington corporation
By:
-----------------------------
Its:
-------------------------
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EXHIBIT M
TO
LEASE AGREEMENT
Sketches Showing Area of Roof Designated for Tenant's Exclusive Use
-------------------------------------------------------------------
M-1
EXHIBIT N
TO
LEASE AGREEMENT
Form of Communication Site Lease
--------------------------------
COMMUNICATIONS SITE LEASE
THIS COMMUNICATIONS SITE LEASE (the "Site Lease") dated March 7, 2000, is
entered into by and between iSHIP.COM, INC., a Washington corporation
("Tenant"), having its principal place of business at 3545 Factoria Boulevard
S.E., Bellevue, Washington 98006, and STERLING REALTY ORGANIZATION CO., a
Washington corporation ("Landlord"), having its principal place of business 600-
106th Avenue N.E., Suite 200, Bellevue, Washington 98004.
1. The Property. Landlord is the owner of the building commonly known as
Sterling Plaza II (the "Building"), constructed on that certain parcel of
real property allocated in the State of Washington, County of King, City of
Bellevue, located at 3545 Factoria Boulevard S.E., Bellevue, Washington
98006 (the "Property"). A legal description of the Property is contained
in Exhibit A attached to this Site Lease.
---------
2. Lease of the Premises.
(a) Premises. Landlord and Tenant have entered into that certain Lease
--------
Agreement dated March 7, 2000 (the "Office Lease") with respect to
office premises located in the Building. In connection therewith,
Landlord has agreed that Tenant shall have the exclusive use of that
portion of the roof of the Building generally described as follows:
approximately ______square feet of space on the roof of the Building
(equal to fifty percent (50%) of the usable area of the roof) for
placement of Tenant's Communications Site (defined in paragraph 6
below) Equipment (collectively the "Roof Premises"). A sketch of the
Roof Premises is attached as Exhibit B to this Site Lease. If at any
---------
time during the term of this Site Lease, Tenant occupies less than two
(2) full floors of the Building, then the area of the roof designated
for Tenant's exclusive use shall decrease to twenty-five percent (25%)
of the usable area of the roof of the Building, as shown on Exhibit C
---------
attached to this Site Lease.
(b) Tenant Improvements. Following the Commencement Date, Tenant shall
-------------------
have the right to construct the Communications Site as shown on the
attached Exhibit B and in accordance with the detailed plans and
---------
specifications to be submitted by Tenant to Landlord and approved by
Landlord prior to Tenant commencing any construction. The design of
the improvements to be constructed by Tenant shall be consistent with
the design and construction of the Building. In addition to plans and
specifications, Tenant shall provide to Landlord such reports as
Landlord, in Landlord's sole discretion, requires concerning the
structural ability of the Building to support Tenant's proposed
improvements or concerning the structural reinforcement required to
support Tenant's proposed improvements. All plans and specifications
for Tenant's proposed improvements must be reviewed and approved by
Landlord, Landlord's architect, communications consultant, structural
engineer and roofing manufacturer; Tenant shall pay for all reasonable
costs associated with such reviews. Tenant shall obtain all necessary
governmental approvals and permits prior to commencing construction
and shall provide Landlord with ten (10) days notice prior to the
start of construction. Landlord may post notices of non-
responsibility if it so chooses. All Tenant contractors and
subcontractors shall be duly licensed in the State of Washington and
approved in advance by Landlord, such approval not to be unreasonably
withheld. All construction activities must be coordinated with
Landlord or Landlord's agents. If any damage to the Roof Premises is
caused by the acts or omissions of Tenant's employees, contractors or
agents during installation of the Equipment, Tenant shall repair any
such damage and return the Roof Premises to the same
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condition as existed prior to the installation. If Tenant does not
complete repairs to the satisfaction of the Landlord in a timely
manner, then Landlord shall make such repairs as it deems necessary
and such costs shall be paid by Tenant.
3. Rent. No rent shall be due from Tenant in connection with the Roof
Premises.
4. Term of Lease. The term of this Site Lease shall, except with respect to
the commencement date which is determined by the terms of Section 5 below,
be for the same period of time as the Office Lease, as the same may expire,
be terminated or be extended in accordance with the terms set forth
therein.
5. Commencement Date; Governmental Permits. The term of this Site Lease shall
commence on the first day of the month following Tenant's notice to
Landlord in writing that Tenant has obtained all permits and approvals
necessary for Tenant to be legally entitled to construct the communications
site at the Roof Premises (the "Commencement Date"). Tenant shall be
permitted to occupy the Roof Premises and commence construction of the
Communications Site upon receipt of all such permits and approvals and
notice to Landlord as required in paragraph 2. Any pre-Commencement Date
occupancy by Tenant shall be under all the terms and conditions of this
Site Lease.
6. Use of the Premises. Tenant shall use the Roof Premises for the
installation and maintenance of satellite dishes and/or antennas or
comparable equipment used in connection with the operation of Tenant's
business from the Premises (a "Communications Site"). The Communications
Site, for purposes of this Site Lease, is a site at which radio, telephone,
paging, wireless voice, data, and other communications equipment is
installed and used to send and receive radio and other signals to and from
wireless telephones and other radio, paging or computer devices to connect
those signals to radio, telephone, or other communications facilities
and/or devices either directly, by means of cables, or indirectly, by means
of transmitting and receiving facilities approved by Landlord and located
at the Roof Premises. Tenant shall not use the Roof Premises for any other
purposes without the written consent of Landlord. Landlord shall at all
times have the ability to audit, inspect and monitor Tenant's use of the
Roof Premises, and Tenant shall cooperate in all ways reasonably requested
by Landlord. If Tenant's use of the Roof Premises increases the cost of
the Landlord's insurance on the Building, Tenant shall promptly reimburse
Landlord for such cost following receipt of an invoice therefor from
Landlord.
7. License. Landlord hereby grants to Tenant for the duration of this Site
Lease, a non-exclusive license in and over the common areas at the Property
so that Tenant may have access to the Roof Premises (the "Access Areas")
twenty-four (24) hours per day, seven (7) days per week. Tenant shall not
have access to the penthouse located on the roof of the Building without
being accompanied by Landlord or Landlord's agent, and when on the roof of
the Building, Tenant and its contractors shall use every effort to walk
only on the catwalk areas. The license granted to Tenant is for the
purpose of installing, constructing, maintaining, restoring, replacing, and
operating Tenant's equipment located within or on the Roof Premises or the
Access Areas. Except in the event of an emergency endangering persons or
property, or in the event Tenant's signal, for any reason, is interrupted
or lost, access to the Roof Premises shall be granted only at such times
during normal business hours of the Building as is reasonable for Landlord
or Landlord's agents, and then only upon the request of Landlord by Tenant
or Tenant's agents, made reasonably in advance of the time for such access.
Outside of normal business hours of the Building, Landlord may require a
member of its security or maintenance staff to be present during such times
as Tenant requires access to the Roof Premises. Tenant shall reimburse
Landlord for the cost of having a maintenance or security staff member
present outside of normal business hours.
8. Protections Against Ongoing Interference. Following the effective date of
this Site Lease, and promptly after such information is available to
Tenant, Tenant shall inform Landlord in writing of its Communications Site
requirements and signal frequencies, so as to allow Landlord (and tenants
of Landlord) to determine whether any communications equipment they wish to
install will create ongoing interference with Tenant's Communications Site.
Tenant acknowledges that until such time as Tenant has notified Landlord of
its specific frequency range, Landlord cannot guarantee the appropriateness
of the
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Roof Premises as the location for Tenant's Communications Site. Tenant
further acknowledges that Landlord has prior obligations to the tenants
(the "Existing Tenants") of other properties owned by Landlord which are
located adjacent to the Property, and that Landlord cannot allow Tenant's
equipment and/or frequencies to interfere with the equipment and/or
frequencies currently maintained by the Existing Tenants. Therefore, the
installations of communications equipment, or use of a specific frequency
by Tenant, or by any other tenant, is subject to the compatibility of such
party's equipment and frequencies with that of communications equipment and
frequencies then located on the Property or maintained by an Existing
Tenant or of which Landlord has been adequately notified as required by
this paragraph 8. Either Tenant or any other tenant desiring to locate new
equipment or use additional frequencies shall, at that party's sole cost
and expense, conduct such studies as are necessary to determine potential
interference with then-existing equipment and frequencies and/or FCC
permitted signals or frequencies of Tenant, other tenants of the Property
and the Existing Tenants. Any change of frequency or additional frequencies
to be used by Tenant shall be allowed, provided Tenant provides written
notice of the same to Landlord. Landlord will not grant a lease to any
party for use of the Property if such use would interfere with Tenant's
ability to physically operate its Communications Site for the use described
herein, as specifically approved in writing by Landlord and as Tenant's
Communications Site exists immediately prior to the date on which any new
lease is entered into by Landlord for the installation of communications
equipment on the roof of the Building. Any future lease of the Property
which permits the installation of communication equipment shall be
conditioned upon not interfering with Tenant's operation of the
Communications Site, based on Tenant's written notification to Landlord, as
to its signal frequencies and any changes or additions thereto, as of the
date of such lease, and any potential tenant shall be required to conduct
an intermodulation study to determine potential interference with Tenant's
signal and transmission. Without limiting any other remedy, in law or
equity, Tenant shall have the right to terminate this Site Lease upon
thirty (30) days' written notice in the event its reception or transmission
is interfered with on an ongoing basis by other antenna equipment, or
obstacles constructed or operated in Tenant's reception or transmission
paths located upon or over Landlord's Property. Such termination shall not
be the basis for any abatement of rent under the Office Lease.
9. Damage and Destruction. If the Roof Premises are, in whole or in part,
damaged or destroyed, then there shall be no abatement of rent under the
Office Lease. If the Roof Premises are only partially destroyed and still
usable as a Communications Site, Landlord shall, within a reasonable time,
repair the Roof Premises such that the Roof Premises are again as fully
usable by Tenant as they were before such partial damage or destruction.
Unless such partial damage or destruction is caused by Landlord, Landlord's
agents or employees, Landlord shall be obligated to repair or replace the
Roof Premises only, excluding any tenant improvements constructed,
installed, or placed onto the Roof Premises by Tenant. A decision as to
whether partially destroyed or partially condemned Premises are still
usable as a Communications Site (for the purposes of this paragraph and of
paragraph 10 below), shall be made jointly by Landlord and Tenant, and, if
they cannot agree, by an arbitrator reasonably acceptable to both parties.
If the Roof Premises are wholly destroyed, then Landlord shall inform
Tenant, within sixty (60) days after the date of such destruction, whether
it intends to restore the Roof Premises.
10. Condemnation. If all or part of the Roof Premises is taken by condemnation
such that the Roof Premises are no longer usable for construction of or
operation as a Communications Site, this Site Lease shall terminate unless
Tenant's equipment and improvements can be relocated to another position at
the Property mutually acceptable to Tenant and Landlord. Tenant shall be
entitled only to that portion of the proceeds of condemnation which is
directly attributable to the value of Tenant's equipment and improvements,
and the cost of relocation, and under no circumstances shall Tenant receive
any compensation for the value of the leasehold estate created by this Site
Lease.
11. Relocation of System by Landlord. Upon not less than thirty (30) days
advance written notice to Tenant from Landlord, Landlord may, at Landlord's
expense, relocate Tenant's Communications Site to another location on the
roof of the Building if Landlord, in its good faith judgment, deems such
relocation necessary; provided, however, that Landlord may not do so if the
result of the relocation would cause Tenant to lose, or experience
degraded, transmission or reception.
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12. Access by Landlord. Landlord shall have access to the Roof Premises at all
times, and Landlord agrees to give Tenant such notice as is reasonable
under the circumstances.
13. Termination by Landlord. Landlord may terminate this Lease upon the
occurrence of any of the following: (a) the termination of the Office
Lease; (b) failure by Tenant to comply with any material term, condition or
covenant of this Site Lease, if such failure is not cured within thirty
(30) days after written notice thereof to Tenant, or in the event of a cure
which requires in excess of thirty (30) days to complete, if Tenant has not
commenced such cure within thirty (30) days of such notice and is not
diligently prosecuting said cure to completion; (c) if Tenant becomes
insolvent, or makes a transfer in fraud of creditors, or makes an
assignment for the benefit of creditors, or files a petition under any
section or chapter of the federal Bankruptcy code, as amended, or under any
similar law or statute of the United States or any state thereof, or is
adjudged bankrupt or insolvent in proceedings filed against Tenant
thereunder, or if a receiver or trustee is appointed for all or
substantially all of the assets of Tenant due to Tenant's insolvency; or
(d) during any Option Term, Landlord decides to demolish or reconfigure the
Building in a manner that will impact the Roof Premises and provides Tenant
with written notice of termination of this Lease at least twelve (12)
months prior to the termination date.
14. Termination by Tenant. Tenant may terminate this Lease at any time upon
thirty (30) days written notice to Landlord.
15. Warranties and Covenants of Tenant. Tenant warrants and covenants that
throughout the term of this Site Lease, Tenant shall maintain comprehensive
liability insurance, naming Landlord as an additional insured, protecting
and indemnifying Landlord and Tenant against claims and liabilities for
injury, damage to persons or property or for the loss of life or of
property occurring upon the Roof Premises, Access Areas or other parts of
Landlord's property resulting from Tenant's use of Landlord's property,
including those resulting from any negligent act or omission of Tenant, its
employees, agents, contractors, and subcontractors. Such insurance shall
afford minimum protection of not less than One Million Dollars ($1,000,000)
for injury to or death of any one person, Three Million Dollars
($3,000,000) for injury to or death of two or more persons, One Million
Dollars ($1,000,000) for property damage, and Five Million Dollars
($5,000,000) for excess liability in the form of umbrella liability
coverage. Tenant shall also maintain personal property insurance in an
amount sufficient to fully protect all personal property, fixtures and
tenant improvements constructed, owned or controlled by Tenant and brought
upon Landlord's property from theft, fire or other loss or damage while
upon the Property. Tenant shall provide to Landlord a certificate
indicating the applicable coverage prior to the Commencement Date of the
Lease and as necessary throughout the term of the Lease to evidence to
Landlord's satisfaction that coverage remains in full force and effect.
All insurance shall be procured from insurance companies satisfactory to
Landlord. Tenant shall maintain the Roof Premises in a clean, safe and
sanitary condition throughout the term of this Site Lease.
16. Liability and Indemnification. Tenant shall at all times comply with all
laws and ordinances and all rules and regulations of municipal, state, and
federal governmental authorities relating to the installation, maintenance,
height, location, use, operation, and removal of improvements authorized
herein, whether such laws, ordinances, rules and regulations are directed
to Tenant or to Landlord, and shall fully indemnify Landlord against any
loss, cost or expense which may be sustained or incurred by Landlord as a
result of the installation, operation, maintenance or removal of such
improvements, including but not limited to any damage to the roof of the
Building, and any damage or injury to Landlord, Landlord's agents or
employees, or other tenants or tenants' employees, agents or invitees of
the Building caused by Tenant's operation of its Communications Site.
Except for the negligent acts or willful misconduct of Landlord and
Landlord's agents or employees, Landlord shall not be liable to Tenant for
any loss or damages arising out of personal injuries or property damage on
the Roof Premises or Access Areas. Tenant shall be fully responsible for
any radio signal or electrical interference that its equipment may cause
with respect to any other radio or telecommunications system authorized or
licensed by the Federal Communications Commission and existing on the
Commencement Date or any date thereafter.
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17. Title To and Removal of Tenant's Equipment. Title to Tenant's equipment,
and all improvements installed at and affixed to the Roof Premises or the
Property by Tenant shall be and shall remain the property of Tenant.
Landlord hereby waives any lien rights it may have or acquire with respect
to Tenant's property and shall promptly execute any document reasonably
required by any supplier, lessor, or lender of such property which waives
any rights Landlord may have or acquire with respect thereto. Tenant may,
at any time, including any time it vacates the Roof Premises, remove
Tenant's improvements, equipment, fixtures, and all of Tenant's personal
property from the Roof Premises, and Tenant shall promptly restore the
property and repair any damage thereto caused by such removal. Tenant
shall remove any structural improvements installed to support Tenant's
equipment upon Landlord's request to do so. Any of Tenant's property
remaining on the Roof Premises after the expiration or earlier termination
of this Site Lease or after Tenant's vacation or abandonment of the Roof
Premises ("Abandoned Property") will be deemed to have been abandoned and
to have become the property of Landlord to dispose of at Landlord's
discretion. Tenant shall reimburse Landlord for any of Landlord's court
costs, attorneys' fees, and storage charges related to Abandoned Property.
Landlord may, at its option, sell Abandoned Property at private sale
following written notice to Tenant thereof, for such price as Landlord may
obtain, and apply the proceeds of such sale to any amounts due under this
Site Lease from Tenant to Landlord, including expenses incident to the
removal and sale of Abandoned Property, or Landlord may otherwise dispose
of Abandoned Property.
18. Surrender. Upon termination of this Lease, Tenant shall remove the
equipment and improvements installed at the Roof Premises by Tenant as set
forth in paragraph 16. Tenant shall repair and restore any damage to the
Roof Premises caused by such removal, and shall surrender the Roof Premises
in as good order and condition as when first occupied by Tenant, normal
wear and tear and damage by fire or other casualty excepted.
19. Assignment and Subletting. Tenant's right to use the Roof Premises is
personal to Tenant (or Tenant's successor-in-interest through merger), and
Tenant may not assign this Site Lease or sublease all or any portion of the
Roof Premises to a third party except as permitted by the terms of Section
35 of the Lease.
20. Tenant's Costs. If Tenant fails to obtain all permits necessary for the
construction of the Communications Site such that the term of this Site
Lease never commences, Tenant shall pay to Landlord an amount equal to all
costs incurred by Landlord for the preparation and negotiation of this Site
Lease and all costs associated with Landlord's review of the plans and
specifications for construction of Tenant's Communications Site on the Roof
Premises.
21. Notices and Other Communications. Every notice required by this Lease
shall be delivered either by (a) personal delivery, or (b) postage prepaid
return receipt requested certified mail addressed to the party for whom
intended at the addresses below or at such other address as the intended
recipient shall have designated by written notice.
If to Landlord: If to Tenant:
Sterling Realty Organization Co. iShip.com, Inc.
600 - 106th Avenue N.E., Suite 200 3545 Factoria Boulevard, Suite_____
Bellevue, Washington 98004 Bellevue, Washington 98006
Attn: David Schooler Attn:
---------------------
22. Mutual Release; Waivers of Subrogation. Each party hereby releases the
other and the other's officers, directors, partners, affiliates, agents and
employees from liability or responsibility for any loss or damage to the
extent resulting from any cause or hazard with respect to which insurance
is carried pursuant to paragraph 15 of this Site Lease, including any loss
or damage resulting from any loss of the use of any property. These
releases shall apply between the parties and they shall also apply to any
claims under or through either party as a result of any asserted right of
subrogation. All policies of insurance obtained by
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either party pursuant to paragraph 15 of this Site Lease shall include a
clause or endorsement waiving the insurer's right of subrogation against
the other party.
23. Hazardous Substances. Tenant represents, warrants and agrees that Tenant
will not use, generate, store or dispose of any Hazardous Material on,
under, about or within the Property in violation of any law or regulation,
or in any manner that would adversely affect Landlord's insurance coverage
on the Property. Tenant agrees to defend, indemnify and hold harmless
Landlord and Landlord's officers, directors, partners, affiliates, agents
and employees against any and all losses, liabilities, claims and/or costs
(including reasonable attorneys' fees and costs) arising from any breach of
any representation, warranty or agreement contained in this paragraph. As
used in this paragraph, "Hazardous Material" shall mean petroleum or any
petroleum product, asbestos, any substance known by a department of the
United States government or by the State of Washington to cause cancer
and/or reproductive toxicity, and/or any substance, chemical or waste that
is identified as hazardous, toxic or dangerous in any applicable federal,
state or local law or regulation. Landlord represents that, to the best of
its knowledge as of the date of this Site Lease, there is no Hazardous
Material on the Property in violation of any applicable law or regulation.
24. Waivers. Any waiver of any right under this Site Lease must be in writing
and signed by the wavering party.
25. Written Agreement to Govern. This Site Lease is the entire understanding
between the parties relating to the subjects it covers. This Site Lease
shall be governed by and construed in accordance with the laws of the State
of Washington.
26. Attorneys' Fees. The substantially prevailing party in any action or
proceeding brought to enforce this Site Lease shall be entitled to recover
its reasonable attorneys' fees, costs, and expenses in connection with such
action or proceeding from the other party.
27. Covenant of Cooperation. Tenant agrees to cooperate with Landlord and
other tenants of Landlord, as more specifically set forth in the Rules and
Regulations of Site Lease, attached hereto as Exhibit D.
---------
28. Further Assurances. In addition to the actions specifically mentioned in
this Site Lease, the parties shall each do whatever may be reasonably
necessary, without Landlord incurring any out-of-pocket costs, to
accomplish the transactions contemplated in this Site Lease including,
without limitation: execution of all applications, permits and approvals
required of Landlord for construction of the Communications Site by Tenant;
and cooperation in obtaining Non-Disturbance Agreements from holders of
senior encumbrances on the Property, and execution of a Memorandum of Lease
in the from attached as Exhibit E to this Lease.
---------
29. Execution of Lease by Landlord. The submission of this document for
examination and negotiation does not constitute an offer to lease, or a
reservation of, or option for, the Roof Premises. This document will
become effective and binding only upon approval of this Site Lease by the
party holding the deed of trust encumbering the Property, and upon the full
execution of this Site Lease by Landlord and its delivery to Tenant. No
act or omission of any employee or agent of Landlord (or of Landlord's
broker, if any) shall alter, change or modify any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.
LANDLORD:
STERLING REALTY ORGANIZATION CO.,
a Washington corporation, its general partner
By:
------------------------------------------
David Schooler, President
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TENANT:
iSHIP.COM, INC.
a Washington corporation
By:
------------------------------------------
Its:
------------------------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this ______ day of ________, 2000, before me, the
undersigned, a notary public in and for the State of Washington, duly
commissioned and sworn, personally appeared DAVID SCHOOLER, to me known to be
the President of STERLING REALTY ORGANIZATION CO., a Washington corporation, the
corporation that executed the within and foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said
corporation for the uses and purposes therein mentioned, and on oath stated that
he was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
--------------------------------
(Signature)
--------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at
---------------
My commission expires
-----------------
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this _____ day of _______, 2000, before me, the
undersigned, a notary public in and for the State of Washington, duly
commissioned and sworn, personally appeared ___________________, to me known to
be the _______________ of iSHIP.COM, INC., a Washington corporation, the
corporation that executed the within and foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said
corporation for the uses and purposes therein mentioned, and on oath stated
that _____ was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
_____________________________________
(Signature)
_____________________________________
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at _____________
My commission expires________________
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SCHEDULE OF EXHIBITS
Exhibit A Legal Description of the Property
Exhibit B Sketch of the Roof Premises (50% of Usable Area of Roof)
Exhibit C Sketch of the Roof Premises (25% of Usable Area of Roof)
Exhibit D Rules and Regulations of Site Lease
Exhibit E Memorandum of Site Lease
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EXHIBIT A
TO
COMMUNICATIONS SITE LEASE
Legal Description of Property
-----------------------------
New Lot 2
- ---------
A portion of Lot 1 of Short Plat No. 280070R, according to the short plat
recorded under King County Recording No. 8011200686, being a revision of short
plat recorded under Recording No. 8009300879.
TOGETHER with that portion of the vacated portion of SE 38th Street lying with
the projected lot lines of the property herein described as vacated by King
County Ordinance No. 6582 as recorded under King County Recording No. 84030789;
TOGETHER with a portion of Parcels C, D, E & F of King County Lot Line
Adjustment No. LLA 8810004, according to the Lot Line adjustment recorded under
King County Recording No. 9101239007, being a portion of the West 1/2 of the
Southeast 1/4 of Section 9, Township 24 North, Range 5 East, W.M., described as
follows:
Commencing at the Northeast corner of the Southwest 1/4, of the Southeast 1/4
said Section 9; thence North 87 degrees 23' 26" West along the North line of
said Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet to the TRUE
POINT OF BEGINNING; thence South 01 degree 18'37" West, a distance of 158.87
feet; thence North 87 degrees 23'26" West, a distance of 437.33 feet; thence
South 01 degree 15'22" West, a distance 316.89 feet more or less to the
Northerly margin of SE 38th Street; thence North 63 degrees 38'11" West along
said Northerly margin, a distance of 90.75 feet; thence North 01 degree 15'16"
East, a distance of 439.20 feet; North 01 degree 12'48" East a distance of
14.22 feet; thence South 87 degrees 23'26" East, a distance of 321.85 feet;
thence North 02 degrees 36'31" East, a distance of 3.78 feet; thence South 87
degrees 23'26" East, a distance of 197.79 feet; thence South 01 degree 18'37"
West, a distance of 18.00 feet more or less to the POINT OF BEGINNING.
ALSO known as New Lot 2 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
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EXHIBIT B
TO
COMMUNICATIONS SITE LEASE
Sketch of the Roof Premises (50% of Roof Area)
----------------------------------------------
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EXHIBIT C
TO
COMMUNICATIONS SITE LEASE
Sketch of the Roof Premises (25% of Roof Area)
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EXHIBIT D
TO
COMMUNICATIONS SITE LEASE
Rules and Regulations of Lease
------------------------------
Tenant recognizes that other tenants will be leasing antenna and equipment space
from Landlord, and that effective use of the Property requires cooperation and
good faith between itself, other tenants, and Landlord. Therefore, to avoid
objectionable interference, engage in proper Telecommunications Activity, and
facilitate the purposes of all leases, Tenant shall adhere to the following
Rules and Regulations, which Landlord may modify from time to time upon advance
notice to Tenant.
1. Definitions.
a) Responsible Tenant: Means the tenant responsible for correcting
objectionable interference.
b) Telecommunications Activity: Means the conduct of transmissions
(e.g., Amplitude modulated aural transmission or frequency modulated
aural or visual transmission) from the Property upon a single
frequency at any one time assigned to a tenant by the Federal
Communications Commission ("FCC"). If a tenant conducts the same type
of transmission on two or more assigned frequencies, each of them
shall constitute a separate Telecommunication Activity.
c) Transmission: Means the emission or reception of electromagnetic
waves.
2. Plans For Telecommunications Activity. Prior to making any installations
or material modifications of a Telecommunication Activity, every tenant
shall submit plans and designs to Landlord. Landlord shall have twenty
(20) days thereafter to approve or disapprove the plans and designs, based
on the effect the installation may have on the Property and its structural
components and the potential for objectionable interference.
3. Testing Required Prior to Installation. Prior to the installation of any
equipment required for a Telecommunication Activity, Tenant, at its
expense, shall conduct all tests that Landlord deems reasonably appropriate
or necessary to determine that Tenant's proposed Telecommunication Activity
can be conducted without causing objectionable interference to any
Telecommunication Activity then being conducted by another tenant. The
tests conducted shall be of the type then generally recognized as
appropriate for such purposes. Following receipt by Landlord of acceptable
test results, Tenant shall coordinate with Landlord as to the exact time of
installation of the equipment required for the approved Telecommunication
Activity. Tenant agrees that only authorized engineers, employees, or
contractors, as reasonably selected by Tenant, will be permitted to enter
the Property for the purpose of installing, modifying, or maintaining
Tenant's facilities. Tenant further agrees that all engineers,
contractors, or subcontractors hired by Tenant for the purpose of
installing any equipment on the Property will by duly licensed in the State
of Washington and approved by Landlord, which approval shall not be
unreasonably withheld.
4. Subsequent Modifications to Telecommunication Activity. All modifications
or subsequent changes in Tenant's Telecommunication Activity shall be
subject to provisions of paragraphs 2 and 3.
5. Objectionable Interference. Objectionable interference to a
Telecommunication Activity may be caused by:
a) Initiation of a Telecommunication Activity, or the installation of
equipment in preparation for the initiation of a Telecommunication
Activity, without first complying with the provisions of paragraphs 2
and 3 above. With respect to the initial operation of a
Telecommunication Activity, that activity may constitute objectionable
interference even if such interference is not discovered
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until after a tenant's Telecommunication Activity is initiated. This
shall be referred to as Type 1 interference.
b) The failure by Tenant to maintain its equipment properly, to replace
defective equipment, or to operate its Telecommunication Activity in
accordance with good engineering practices. This shall be referred to as
Type 2 interference.
6. Notice Of Need For Corrective Action. If Tenant is of the opinion that
there is objectionable interference to its Telecommunications Activity, and
that another tenant is under obligation to correct said interference, it
may, without prejudice to its other remedies, give written notice to
Landlord and the Responsible Tenant(s). The Responsible Tenant shall,
within three (3) days of receiving such notice (or such longer period as
consented to in writing by Tenant), comply with the provisions set forth
herein regarding corrective action for objectionable interference. If the
Responsible Tenant fails to respond as required, then the rights granted by
Landlord to the Responsible Tenant shall terminate as to the interfering
Telecommunication Activity.
7. Corrective Action. If objectionable interference results from either Type
1 or Type 2 interference, then the Responsible Tenant shall take all
necessary corrective actions to eliminate the objectionable interference.
If objectionable interference arises with Telecommunication Activity
initiated in accordance with the Responsible Tenant's lease and these
Results and Regulations, the Responsible Tenant shall:
a) Immediately discontinue the interfering activity until such
interference can be fully corrected; or
b) Transfer its Telecommunication Activity to a temporary location and/or
equipment operating configuration if objectionable interference will
be eliminated by doing so.
Whenever a Responsible Tenant discontinues a Telecommunication Activity or
transfers to a temporary location pursuant to this paragraph, it shall not
resume such Telecommunication Activity or transfer such Telecommunication
Activity from the temporary location to its previous, permanent location
until it fully complies with the conditions provided for engaging in the
initial operation of a Telecommunication Activity.
8. Protective Devices. Tenant may request that Landlord, at Tenant's expense,
attach protective devices to the equipment of other tenants. Tenant agrees
that other tenants may, upon written approval of Tenant, which approval
shall not be unreasonably withheld, attach protective devices to Tenant's
equipment, provided that no objectionable interference occurs in the
conduct or use of any of Tenant's equipment or Telecommunication Activity.
The tenant attaching such equipment shall promptly have such protective
devices removed if objectionable interference results at any time.
9. FCC Hearings. Nothing herein shall be deemed to limit the right of Tenant
to request hearings before the FCC, or to appear before the FCC in any
hearings held in such proceedings, or to oppose any application to the FCC
filed by any other tenant as a result of such proceedings.
10. Compliance with FCC Rules and Regulations. If Tenant's operations or
Telecommunication Activities fail to comply with FCC rules and regulations,
and objectionable interference arises because of such noncompliance, then
Tenant shall not be entitled to the protection of these Rules and
Regulations regarding objectionable interference, until it fully complies
with FCC standards.
11. Good Faith Conduct. Tenant shall conduct its Telecommunications Activity
in good faith and in accordance with the purposes and intent of its lease
for a portion of the Property. Tenant shall cooperate with other tenants to
anticipate and prevent objectionable interference.
12. Interference with Third Parties. In the event a tenant's Telecommunication
Activities result in interference with transmission or reception of signals
or other services or activities by a party other than tenant, and if a
legal obligation exists to correct such interference, then the
responsibility for and expense of correcting such interference with be
borne by the tenant or tenants involved, in accordance with principles
established herein for corrective action.
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EXHIBIT E
TO
COMMUNICATIONS SITE LEASE
Memorandum of Lease
-------------------
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
GRAHAM & DUNN
1420 Fifth Avenue, 33rd Floor
Seattle, Washington 98101
Attn: Maren K. Gaylor
MEMORANDUM OF COMMUNICATIONS SITE LEASE
GRANTOR: Sterling Realty Organization Co., a Washington corporation
GRANTEE: iShip.com, Inc., a Washington corporation
LEGAL DESCRIPTION: New Lot 2 of Boundary Line Adjustment No. BLA-995313,
recorded under King County Recording No. 20000228900003.
TAX PARCEL
IDENTIFICATION NO.:
------------------------------------
THIS MEMORANDUM OF COMMUNICATIONS SITE LEASE is made and entered into as of this
7th day of March, 2000, by and between STERLING REALTY ORGANIZATION CO., a
Washington corporation ("Landlord"), and iSHIP.COM, INC., a Washington
corporation ("Tenant").
RECITALS
1. Property Affected by Agreement. Tenant, in connection with that certain
------------------------------
Lease Agreement dated March 7, 2000, between Landlord and Tenant (the
"Lease Agreement"), has the right to the exclusive use of a portion of the
roof of the building to be located at 3545 Factoria Boulevard S.E. in
Bellevue, King County, Washington (the "Property"). A legal description of
the Property is attached to this Memorandum as Exhibit A.
---------
2. Term of Communications Site Lease. The Communications Site Lease shall
---------------------------------
have a term concurrent with the Lease Agreement.
4. Purpose of Memorandum. This Memorandum is prepared for the purpose of
---------------------
recordation to give notice of the Communications Site Lease, Agreement,
including the option to purchase the Property contained therein, and shall
not constitute an amendment or modification of the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Option
as of the day and year first above written.
LANDLORD:
STERLING REALTY ORGANIZATION CO.,
a Washington corporation
By:
------------------------------
David Schooler, President
TENANT:
iSHIP.COM, INC., a Washington corporation
By:
--------------------------------
Its:
----------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this ______ day of ______, 2000, before me, the
undersigned, a notary public in and for the State of Washington, duly
commissioned and sworn, personally appeared DAVID SCHOOLER, to me known to be
the President of STERLING REALTY ORGANIZATION CO., a Washington corporation, the
corporation that executed the within and foregoing instrument, and acknowledged
the said instrument to be the free and voluntary act and deed of said
corporation for the uses and purposes therein mentioned, and on oath stated that
he was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
-----------------------------------
(Signature)
-----------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at_____________
My commission expires_______________
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STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
THIS IS TO CERTIFY that on this _____ day of ______, 2000, before me, the
undersigned, a notary public in and for the State of Washington, duly
commissioned and sworn, personally appeared _____________________________, to me
known to be the _____________________ of iSHIP.COM, INC., a Washington
corporation, the corporation that executed the within and foregoing instrument,
and acknowledged the said instrument to be the free and voluntary act and deed
of said corporation for the uses and purposes therein mentioned, and on oath
stated that _____ was authorized to execute said instrument.
WITNESS my hand and official seal the day and year in this certificate first
above written.
------------------------------------------
(Signature)
------------------------------------------
(Please print name legibly)
NOTARY PUBLIC in and for the State of
Washington, residing at _________________
My commission expires ___________________
N-17
EXHIBIT A
TO
MEMORANDUM OF OPTION
Legal Description of Property
-----------------------------
New Lot 2
- ---------
A portion of Lot 1 of Short Plat No. 280070R, according to the short plat
recorded under King County Recording No. 8011200686, being a revision of short
plat recorded under Recording No. 8009300879.
TOGETHER with that portion of the vacated portion of SE 38th Street lying with
the projected lot lines of the property herein described as vacated by King
County Ordinance No. 6582 as recorded under King County Recording No. 84030789;
TOGETHER with a portion of Parcels C, D, E & F of King County Lot Line
Adjustment No. LLA 8810004, according to the Lot Line adjustment recorded under
King County Recording No. 9101239007, being a portion of the West 1/2 of the
Southeast 1/4 of Section 9, Township 24 North, Range 5 East, W.M., described as
follows:
Commencing at the Northeast corner of the Southwest 1/4, of the Southeast 1/4
said Section 9; thence North 87 degrees 23' 26" West along the North line of
said Southwest 1/4 of the Southeast 1/4, a distance of 180.00 feet to the TRUE
POINT OF BEGINNING; thence South 01 degree 18'37" West, a distance of 158.87
feet; thence North 87 degrees 23'26" West, a distance of 437.33 feet; thence
South 01 degree 15'22" West, a distance 316.89 feet more or less to the
Northerly margin of SE 38th Street; thence North 63 degrees 38'11" West along
said Northerly margin, a distance of 90.75 feet; thence North 01 degree 15'16"
East, a distance of 439.20 feet; North 01 degree 12'48" East a distance of
14.22 feet; thence South 87 degrees 23'26" East, a distance of 321.85 feet;
thence North 02 degrees 36'31" East, a distance of 3.78 feet; thence South 87
degrees 23'26" East, a distance of 197.79 feet; thence South 01 degree 18'37"
West, a distance of 18.00 feet more or less to the POINT OF BEGINNING.
ALSO known as New Lot 2 of Boundary Line Adjustment No. BLA-995313, recorded
under King County Recording No. 20000228900003.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.
N-18
EXHIBIT O
TO
LEASE AGREEMENT
Certificate of Corporate Resolution
-----------------------------------
I, ___________________, hereby certify that I am the duly elected,
qualified, and acting Secretary of iShip.com, Inc., a corporation duly organized
under the laws of the state of Washington (the "Corporation"). I further
certify that on the _____ day of ___________, 2000, the following resolution was
duly adopted by the directors of the Corporation, and that the resolution is now
in full force and effect and has not been altered, amended, modified or
repealed:
RESOLVED, that ____________________, the ________________ of the
Corporation, or ______________, the ______________ of the Corporation, are
hereby each individually authorized to sign the Lease Agreement between the
Corporation and Sterling Realty Organization Co. (the "Landlord") dated
_________________ with respect to Premises identified as Suite ______ of
the building located at 3545 Factoria Boulevard S.E., Bellevue, Washington,
and after its execution and delivery by the Corporation and the Landlord,
the Lease will be a binding and enforceable obligation of the Corporation
in accordance with its terms.
I hereby certify that: (1) the above Resolution was duly passed at a
special and/or general meeting of the Board of Directors of the Corporation held
on ___________________ at which were present and voting a majority of the
directors; (2) the above Resolution has been duly recorded in the minute book of
the Corporation; (3) there are no provisions in the Articles of Incorporation or
Bylaws of the Corporation that would impair or modify the effectiveness of the
above Resolution; (4) the Resolution has not been altered or amended subsequent
to its adoption; and (5) said Resolution is now in full force and effect.
WITNESS MY HAND this _______ day of _____________, 2000.
________________________________
By:
-----------------------------
O-1
LEASE AGREEMENT
Dated March 7, 2000
between
STERLING REALTY ORGANIZATION CO.
as "Landlord"
and
iSHIP.COM, INC.
as "Tenant"
in
STERLING PLAZA II
STANDARD TERMS AND CONDITIONS
LEASE PROVISIONS
1. Lease Provisions and Exhibits........................................ 1
GENERAL TERMS AND CONDITIONS
2. Premises............................................................. 6
3. Term................................................................. 6
4. Rent................................................................. 6
5. Notices.............................................................. 6
6. Uses................................................................. 7
7. Services and Utilities............................................... 6
8. Costs of Services and Utilities...................................... 8
9. Property Taxes....................................................... 10
10. Taxes on Rents and Personal Property................................. 10
11. Acceptance of Premises............................................... 10
12. Improvements......................................................... 10
13. Alterations and Care of Premises..................................... 11
14. Liens and Insolvency................................................. 13
15. Access............................................................... 13
16. Damage or Destruction................................................ 13
17. Indemnification, Insurance and Waiver of Subrogation................. 14
18. Assignment and Subletting............................................ 16
19. Holdover............................................................. 17
20. Surrender of Premises................................................ 17
21. Removal of Property.................................................. 17
22. Defaults............................................................. 18
23. Right to Perform..................................................... 19
24. Nonwaiver............................................................ 19
25. Costs and Attorneys' Fees............................................ 19
26. Priority............................................................. 19
27. Estoppel Certificates................................................ 20
28. Transfer of Landlord's Interest...................................... 20
29. Condemnation......................................................... 20
30. Advertising.......................................................... 20
31. Exterior Signage..................................................... 21
32. Parking.............................................................. 21
33. Tenant Improvements.................................................. 21
34. Main Lobby and Common Areas of Building.............................. 23
35. Installation of Satellite Dishes on Roof of Building................. 23
36. Fifth Floor Hold Period.............................................. 23
37. Terms Applicable to Expansion of Premises During Initial 12 Months... 23
38. Tenant's Right of First Offer........................................ 23
39. Option to Cancel Lease............................................... 24
40. Delay in Lease Commencement; Additional Option to Cancel Lease....... 25
41. Americans With Disabilities Act (ADA) Compliance..................... 25
42. Hazardous Materials.................................................. 26
43. Arbitration.......................................................... 27
44. Quiet Enjoyment...................................................... 28
45. Execution of Lease by Landlord....................................... 28
46. Landlord's Liability................................................. 28
47. Brokers.............................................................. 28
48. Corporate Authority.................................................. 28
49. General Provisions................................................... 28
EXHIBITS
Exhibit A Legal Description of Land...................................................... A-1
Exhibit B Legal Description of Project................................................... B-1
Exhibit C Plan of the Premises........................................................... C-1
Exhibit D Shell and Core Items for Building/List of Plans and Specifications for Building D-1
Exhibit E Scope of Tenant Improvements................................................... E-1
Exhibit F Form of Letter of Credit....................................................... F-1
Exhibit G Form of Guaranty of Lease...................................................... G-1
Exhibit H Rules and Regulations.......................................................... H-1
Exhibit I Exclusions from Operating Costs................................................ I-1
Exhibit J Form of Subordination, Attornment, Notice and Non-Disturbance Agreement........ J-1
Exhibit K Parking Plan................................................................... K-1
Exhibit L Form of Tenant Improvement Promissory Note..................................... L-1
Exhibit M Sketches Showing Area of Roof Designated for Tenant's Exclusive Use............ M-1
Exhibit N Form of Communications Site Lease.............................................. N-1
Exhibit O Certificate of Corporate Resolution of Tenant.................................. O-1