Exhibit 10.1
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
BETWEEN
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation,
AS SELLER
and
KBS SOR 156th AVENUE NORTHEAST,
a Delaware limited liability company
AS BUYER

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INDEX
 
 
 
Page(s)
I
SUMMARY AND DEFINITION OF BASIC TERMS

1
II
RECITALS
2
III
AGREEMENT
4
 
1.
Purchase and Sale
4
 
2.
Purchase Price
4
 
3.
Escrow and Title
6
 
4.
Condition of Property and Conditions Precedent to the Close of Escrow
6
 
5.
Deliveries to Escrow Holder
9
 
6.
Deliveries Upon Close of Escrow
11
 
7.
Cost and Expenses
12
 
8.
Prorations
13
 
9.
Covenants of Seller
16
 
10.
AS-IS Sale and Purchase
17
 
11.
Seller's Representations and Warranties
20
 
12.
Buyer's Representations and Warranties
23
 
13.
Casualty and Condemnation
25
 
14.
Notices
26
 
15.
Broker Commissions
28
 
16.
Default
28
 
17.
Assignment
30
 
18.
Miscellaneous
31
 
19.
1031 Exchange
32
 
20.
Confidentiality
32

 
 
 
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
(ii)
 
 

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Page(s)
 
21.
Property Disclosures
30

EXHIBITS
Exhibit A    Legal Description
Exhibit B    Special Warranty Deed
Exhibit C    Transferor's Certification of Non-Foreign Status
Exhibit D    Assignment and Assumption of Leases
Exhibit E    Owner's Affidavit
Exhibit F    Assignment of Contracts and Assumption Agreement
Exhibit G    Bill of Sale
Exhibit H    General Assignment
Exhibit I    List of Leases
Exhibit J    List of Service Contracts
Exhibit K    List of Leasing Costs
Exhibit L    Escrow Wiring Instructions
Exhibit M    Form of Leaseback Lease
Exhibit N    Seller Disclosure Statement
Exhibit O    Tenant Notice Letter
Exhibit P    Schedule of Personal Property to be Conveyed and Retained
Exhibit Q    Title Commitment
Schedule 1    Disclosures

 
 
 
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
(iii)
 
 

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AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
(QBE Corporate Campus, Bellevue, Washington)
I
SUMMARY AND DEFINITION OF BASIC TERMS
This Agreement of Purchase and Sale and Joint Escrow Instructions (the
“Agreement”), dated as of the Effective Date set forth in Section 1 of the
Summary of Basic Terms, below, is made by and between KBS SOR 156TH AVENUE
NORTHEAST, LLC, a Delaware limited liability company (“Buyer”), and UNIGARD
INSURANCE COMPANY, a Wisconsin corporation (“Seller”). The terms set forth below
shall have the meanings set forth below when used in the Agreement.
TERMS OF AGREEMENT
(first reference in the Agreement)
 
DESCRIPTION
1.
Effective Date
(Introductory Paragraph):
 
July 25, 2012.
 
 
 
 
2.
Buildings 
(Recital A):
 
The nine (9) buildings located on the Land
 situated in the City of Bellevue, County of King,
State of Washington, and commonly known as
“QBE Corporate Campus.”
 
 
 
 
3.
Brokers 
(Section 15):
 
Jones Lang LaSalle Brokerage, Inc. (“Seller’s
Broker”)
 
 
 
 
4.
Buyer’s Notice Address 
(Section 14):
 
KBS SOR 156th Avenue Northeast, LLC
c/o KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, CA 92660
Attn: Brian Ragsdale
Telephone: (949) 797-0305
Fax: (949) 417-6518
E-Mail: bragsdale@kbs-ca.com
 
 
 
 
5.
Purchase Price 
(Section 2.1):
 
$78,700,000.00

 
 
 
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale

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6.
Deposit (Section 2.1.1):
 
$3,800,000.00
 
 
 
 
7.
Escrow Holder 
and Escrow Holder’s Notice
Address 
(Section 3):
 
Commonwealth Land Title Insurance Company
4100 Newport Place Drive, Suite 120
Newport Beach, CA 92660
Attn: Joy Eaton
Telephone: (949) 724-3145
Fax: (949) 271-5762
E-Mail: joyeaton@ltic.com
Escrow Number: 9260009-JBE
 
 
 
 
8.
Closing Date 
(Section 3.2):
 
The Closing shall occur on or before the date which is five (5) business days
following the Effective Date of this Agreement.
 
 
 
 
9.
Title Company 
(Section 4.3.3)
 
Commonwealth Land Title Insurance Company
888 South Figueroa Street, Suite 2100
Los Angeles, CA 90017
Attn: Sean Cruz
Telephone: (213) 330-3041
Fax: (213) 330-3081
E-Mail: scruz@ltic.com
 
 
 
 
10.
Seller’s Representative 
(Section 11.11):
 
Mr. Dennis Glinski
 
 
 
 
11.
Buyer’s Representative 
(Section 12.3)
 
Mr. Brian Ragsdale
 
 
 
 
12.
LOI
 
That certain “Letter of Intent - Unigard Office
Park, Bellevue, Washington”, entered into
between Buyer and Seller and dated as of June
19, 2012, as amended.
 
 
 
 

II
RECITALS
A.Seller owns those certain parcels of land more particularly described on
Exhibit A attached hereto (collectively, the “Land”), which Land is improved
with the Buildings.

 
 
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B.Seller desires to sell and convey to Buyer and Buyer desires to purchase and
acquire from Seller all of Seller’s right, title and interest in and to the
following:
i.The Land and all of Seller’s interest in all rights, privileges, easements and
appurtenances benefiting the Land and/or the “Improvements,” as defined below,
including, without limitation, Seller’s right, title and interest, if any, in,
to and under (i) all minerals, oil, gas and other hydrocarbon substances on and
under the “Real Property” (as defined below), as well as all zoning, excess
floor area rights and development rights, air rights, water, water rights and
water stock relating to the Real Property; (ii) rights in and to land lying in
the bed of any highways, streets, roads or avenues and other public rights of
way and rights of access thereto, open or proposed, in front of or adjoining any
such parcel or any portion thereof, to the center line thereof, and all right,
title and interest for damage to any such parcel and improvements or any portion
thereof by reason of any change of grade of any street, and other rights
pertaining to the Real Property; (iii) rights in and to strips and gores of land
within or adjoining the Real Property; (iv) rights to utility connections and
hook ups, and (v) any other easements, rights of way or other appurtenances,
licenses, hereditaments and privileges used or connected with the beneficial use
or enjoyment of the Land and/or the Improvements (the Land, the Improvements and
all such rights, privileges, easements and appurtenances are sometimes
collectively hereinafter referred to as the “Real Property”);
ii.The Buildings, associated parking and landscaped areas and all other
improvements located on the Land (the “Improvements”);
iii.All leases, licenses and occupancy agreements covering the Land and
Improvements, a list of which is attached hereto as Exhibit I (said leases and
agreements, together with any and all amendments, modifications or supplements
thereto, and any other leases entered into in accordance with the terms and
provisions of this Agreement, are hereinafter referred to individually as a
“Lease,” and collectively as the “Leases”), together with all guaranties
ensuring performance of the obligations under the Leases and all prepaid rent,
damage, escrow and security deposits under the Leases;
iv.The Contracts (as hereinafter defined);
v.All personal property, furniture, appliances, equipment, supplies and fixtures
owned by Seller and located at the Real Property and used in connection with the
management and operation of the Real Property (other than the Excluded Property,
as defined below), including, without limitation, those items identified in
Exhibit P (the “Personal Property”);
vi.It is acknowledged that the Personal Property does not include, and shall
expressly exclude, the personal property owned by Seller and located at the Real

 
 
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Property, identified in Exhibit P as the personal property to be retained by
Seller (the “Excluded Property”). Seller agrees that within thirty (30) days
following the Closing, Seller shall remove the Excluded Property from all of the
Buildings other than the Leaseback Building (as defined below). Seller and Buyer
(at no cost, expense, liability or potential liability to Buyer) shall
coordinate the removal of the Excluded Property, and Seller shall repair all
damage caused thereby; and
vii.To the extent assignable, all of Seller’s interest in any intangible
property used or useful in connection with the foregoing, contract rights, any
warranties, guaranties, licenses, permits, entitlements, governmental approvals
and certificates of occupancy which benefit the Real Property, the Improvements,
and/or the Personal Property, including without limitation any contract rights
and warranties arising under construction contracts relating to the construction
of the Improvements (the “Intangible Personal Property”), but specifically
excluding any present or future claims of Seller against any third parties to
the extent the same relate to any period of time occurring prior to the Closing.
The Real Property, the Improvements, the Personal Property, the Contracts,
Seller’s interest as lessor under the Leases, and the Intangible Personal
Property are sometimes collectively hereinafter referred to as the “Property”.
C.Prior to the Effective Date, Buyer has had the opportunity to conduct all due
diligence with regard to the Property (collectively, the “Due Diligence
Investigations”), and is satisfied with the Due Diligence Investigations.
Subject to Seller’s representations and warranties contained in this Agreement
and in the Other Documents (as such term is defined in Section 16.4 below),
Buyer agrees to purchase the Property in its “as-is,” “where-is,” “with all
faults” condition.
III
AGREEMENT
NOW, THEREFORE, in consideration of the covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller hereby agree as follows, and hereby instruct
Escrow Holder as follows.
1.    Purchase and Sale. Seller agrees to sell to Buyer, and Buyer agrees to
purchase from Seller, the Property upon the terms and conditions set forth in
this Agreement.
2.    Purchase Price.
2.1    Purchase Price. Buyer shall pay the Purchase Price for the Property as
hereinafter provided in this Section 2.

 
 
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Agreement of Purchase and Sale

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2.1.1    Deposit. The Effective Date shall be the date on which both Buyer and
Seller have signed this Agreement. Within one (1) business day following the
Effective Date, Buyer shall deliver to Escrow Holder the Deposit. The Deposit
shall be deposited by Escrow Holder in an interest-bearing account at a
federally insured institution as Escrow Holder, Seller and Buyer deem
appropriate and consistent with the timing requirements of this Agreement. The
interest thereon shall accrue to the benefit of the party receiving the Deposit
pursuant to the terms of this Agreement and shall be part of the Deposit for all
purposes under this Agreement, and Buyer and Seller hereby acknowledge that
there may be penalties or interest forfeitures if the applicable instrument is
redeemed prior to its specified maturity. Buyer agrees to provide its Federal
Tax Identification Number to Escrow Holder upon the opening of Escrow. THE
DEPOSIT SHALL BE NON-REFUNDABLE EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT.
Unless this Agreement is terminated due to a default by Seller or as otherwise
provided for in this Agreement, the Deposit shall be: (i) applied and credited
toward payment of the Purchase Price at the “Closing” (as such term is defined
in Section 3.2 below), or (ii) retained by Seller as liquidated damages pursuant
to Section 16.2, below.
2.2    Cash Balance. On the Closing Date, Buyer shall deposit with Escrow Holder
cash by means of a confirmed wire transfer through the Federal Reserve System in
the amount of the balance of the Purchase Price plus or minus Buyer’s share of
expenses and prorations as described in this Agreement (the “Cash Balance“).
2.3    Independent Consideration. Concurrently with the delivery of the Deposit,
Buyer shall deliver to Seller, by means of a wire transfer, an amount equal to
One Hundred and No/100 Dollars ($100.00) as independent consideration for
Seller’s performance under this Agreement (the “Independent Consideration”),
which shall be retained by Seller in all instances. The Independent
Consideration is independent of any other consideration provided hereunder,
shall be fully earned by Seller upon the Effective Date hereof, and is not
refundable under any circumstances nor to be applied to the Purchase Price at
Closing. Buyer and Seller expressly acknowledge and agree that (a) the
Independent Consideration, plus Buyer’s agreement to pay the costs provided in
this Agreement, has been bargained for as consideration for Seller’s execution
and delivery of this Agreement, and (b) such consideration is adequate for all
purposes under any applicable law or judicial decision.
2.4    Wire Instructions. For purposes of delivering the Deposit, the Cash
Balance and any other funds to be delivered to Escrow Holder pursuant to the
terms of this Agreement, Escrow Holder’s wire transfer instructions are set
forth on Exhibit L attached hereto.

 
 
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Agreement of Purchase and Sale

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2.5    Allocation of Purchase Price. The Purchase Price is allocated
$78,660,000.00 for the Real Property and Improvements, and $40,000.00 for the
Personal Property.
3.    Escrow.
3.1    Opening of Escrow. Buyer and Seller shall promptly deliver a fully
executed copy of this Agreement to Escrow Holder and obtain Escrow Holder’s
Joinder. The date of Escrow Holder’s receipt of a fully executed copy of this
Agreement, as reflected by the date of its execution of the Joinder, is referred
to as the “Opening of Escrow.” Seller and Buyer shall execute and deliver to
Escrow Holder any additional or supplementary instructions as may be necessary
or convenient to implement the terms of this Agreement and close the transaction
contemplated hereby, provided such instructions are consistent with and merely
supplement this Agreement and shall not in any way modify, amend or supersede
this Agreement. Such supplementary instructions, together with the escrow
instructions set forth in this Agreement, as they may be amended from time to
time by the parties, shall collectively be referred to as the “Escrow
Instructions.” The Escrow Instructions may be amended and supplemented by such
standard terms and provisions as the Escrow Holder may request the parties
hereto to execute; provided, however, that the parties hereto and Escrow Holder
acknowledge and agree that in the event of a conflict between any provision of
such standard terms and provisions supplied by the Escrow Holder and the Escrow
Instructions, the Escrow Instructions shall prevail.
3.2    Close of Escrow/Closing. For purposes of this Agreement, the “Close of
Escrow” or the “Closing” shall mean the date on which the “Deed” (as defined in
Section 5.1.1, below) is recorded in the Official Records of the County where
the Land is located (the “Official Records”). The Close of Escrow shall occur on
the Closing Date.
4.    Condition of Property and Conditions Precedent to the Close of Escrow.
4.1    Condition of Property. The Property is being sold in an “AS IS” condition
and “WITH ALL FAULTS” as of the date of this Agreement and of the Close of
Escrow. Except for Seller’s representations and warranties expressly set forth
in this Agreement and in the Other Documents, no representations or warranties
have been made or are made and no responsibility has been or is assumed by
Seller or by any partner, officer, person, firm, agent or representative acting
or purporting to act on behalf of Seller as to the condition or repair of the
Property or the value, expense of operation, or income potential thereof or as
to any other fact or condition which has or might affect the Property or the
condition, repair, value, expense of operation or income potential of the
Property or any portion thereof. The parties agree that all understandings and
agreements heretofore made between them or their respective agents or
representatives are merged in this Agreement and the Exhibits hereto annexed,
which alone fully and completely express their agreement, and that this
Agreement has been entered into after full investigation, or with the parties
satisfied with the opportunity afforded for investigation, neither

 
 
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Agreement of Purchase and Sale

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party relying upon any statement or representation by the other unless such
statement or representation is specifically embodied in this Agreement or the
Exhibits annexed hereto. Other than the express representations and warranties
of Seller contained in this Agreement and in the Other Documents, Seller makes
no representations or warranties regarding the physical condition of the
Property, including as to whether the Property contains asbestos or harmful or
toxic substances or pertaining to the extent, location or nature of same.
Furthermore, and again other than the express representations and warranties of
Seller contained in this Agreement and in the Other Documents, to the extent
that Seller has provided to Buyer information from any inspection, engineering,
or environmental reports, including but not limited to information concerning
asbestos or harmful or toxic substances, Seller makes no representations or
warranties with respect to the accuracy or completeness, methodology of
preparation or otherwise concerning the contents of such reports. Buyer
acknowledges that, except for Seller’s representations and warranties contained
in this Agreement and in the Other Documents, Seller has requested Buyer to
inspect fully the Property and investigate all matters relevant thereto and to
rely upon the results of Buyer’s own inspections or other information obtained
or otherwise available to Buyer, rather than any information that may have been
provided by Seller to Buyer. Buyer waives and releases Seller from any present
or future claims arising from or relating to the presence or alleged presence of
asbestos or harmful or toxic substances in, on, under or about the Property
including, without limitation, any claims under or on account of (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
the same may have been or may be amended from time to time, and similar state
statutes, and any regulations promulgated thereunder, (ii) any other federal,
state or local law, ordinance, rule or regulation, now or hereafter in effect,
that deals with or otherwise in any manner relates to, environmental matters of
any kind, or (iii) this Agreement or the common law. Notwithstanding anything to
the contrary set forth in this Section 4.1, the foregoing release is not
intended to and does not cover any Excluded Claims (as such term is defined in
Section 10.1.5 below). The terms and provisions of this paragraph shall survive
the Close of Escrow hereunder.
4.2    Contracts. Seller shall assign to Buyer, and Buyer shall assume at
Closing the service contracts relating to the operation or maintenance of the
Property listed on Exhibit J attached hereto (collectively, the “Contracts”);
any service contracts not assumed by Buyer shall be terminated by Seller on or
before the Closing. To the extent any service contracts that are to be
terminated require the payment of a termination fee, Buyer shall pay such
termination fees. To the extent any service contract that Buyer has elected not
to assume cannot be terminated on or before the Closing (even with the payment
of a termination fee), Buyer shall be obligated to either (i) assume such
service contract, provide a termination notice and allow the contract to expire
under the applicable terms of the contract, or (ii) pay the amounts due to the
vendor for the remainder of the term of such contract and negotiate an early
termination with no assumption by Buyer. Buyer specifically acknowledges that it
shall be obligated to assume the elevator service contracts with Thyssen
Elevator and Otis Elevator, respectively. Seller shall assign its rights and
interests under the Contracts to Buyer at the Closing pursuant to the Assignment
and

 
 
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Assumption of Contracts, in substantially the form attached hereto as Exhibit F
and made a part hereof.
4.3    Conditions Precedent to Buyer’s Obligations. The Close of Escrow and
Buyer’s obligations with respect to the transactions contemplated by this
Agreement are subject to the timely satisfaction or waiver of the following
conditions.
4.3.1    Seller’s Performance. Seller shall have duly performed, in all material
respects, each of Seller’s obligations under this Agreement.
4.3.2    Accuracy of Representations and Warranties. On the Closing Date, all
representations and warranties made by Seller in Section 11 shall be true and
correct in all material respects as if made on and as of the Closing Date.
4.3.3    Issuance of Title Policy. Provided that (i) Buyer has obtained the
Title Company’s commitment (the “Title Commitment”) to issue an ALTA owner’s
policy of insurance insuring Buyer in the amount of the Purchase Price (the
“Title Policy”), and delivered Seller a copy of the same prior to the Effective
Date, and (ii) the requirements in such commitment for the issuance of the Title
Policy are limited to payment and other standard closing requirements that pose
no obligation upon Seller that is inconsistent with the other terms of this
Agreement, then, and only if (i) and (ii) have occurred, at the time of the
Closing, it shall be a condition that the Title Company shall be irrevocably
committed to issue the Title Policy to Buyer at the Closing. The Title
Commitment is attached to this Agreement as Exhibit Q.
4.3.4    No Material Change. As of the Closing Date, there shall have been no
material adverse changes since the date of this Agreement in the operating
condition of any building systems or equipment serving the Property.
4.4    Conditions Precedent to Seller’s Obligations. The Close of Escrow and
Seller’s obligations with respect to the transactions contemplated by this
Agreement are subject to the timely satisfaction or waiver of the following
conditions: (i) Buyer shall have duly performed, in all material respects, each
of Buyer’s obligations under this Agreement; and (ii) Buyer’s representations
and warranties set forth in this Agreement shall be true and correct in all
material respects as of the Closing Date as if made on and as of the Closing
Date. Without limitation of the foregoing, Buyer shall have timely delivered the
Purchase Price pursuant to the provisions of Section 2 above. Except where
Seller is in default of this Agreement or as otherwise provided for in this
Agreement (in which case the Deposit will not be delivered to the Seller), if
Buyer otherwise fails to complete the closing of this transaction in accordance
with the terms and provisions of this Agreement (all of Buyer’s conditions
precedent to Closing under Section 4.3 above having been satisfied or waived by
Buyer), then (a) the Escrow Holder shall deliver the Deposit to Seller (plus
interest accrued on the Deposit only while held by Escrow Holder) in accordance
with Seller’s written instructions within five (5) business days following

 
 
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Seller’s delivery of a written notice to Buyer and Escrow Holder, (b) Buyer
shall pay to Escrow Holder any escrow cancellation fees or charges, and
(c) except for the provisions of this Agreement which expressly survive
termination of the Agreement, the parties shall have no further rights or
obligations to one another under this Agreement.
5.    Deliveries to Escrow Holder.
5.1    Seller’s Deliveries. Seller hereby covenants and agrees to deliver or
cause to be delivered to Escrow Holder at least one (1) business day prior to
the Closing Date (or other date specified) the following instruments and
documents, the delivery of each of which shall be a condition to the Close of
Escrow:
5.1.1    Deed. A Special Warranty Deed (the “Deed”) in the form of Exhibit B
attached hereto, duly executed and acknowledged in recordable form by Seller,
conveying Seller’s interest in the Real Property to Buyer;
5.1.2    Real Estate Excise Tax Affidavit. A real estate excise tax affidavit
(the “REETA”) in the form prescribed by law, properly completed and duly
executed by Seller;
5.1.3    Non-Foreign Certifications. A Non-Foreign Certificate in the form of
Exhibit C attached hereto (the “Tax Certificate”) duly executed by Seller;
5.1.4    Assignment and Assumption of Leases. Four (4) counterparts of the
Assignment and Assumption of Leases (the “Lease Assignment”) in the form of
Exhibit D attached hereto, duly executed by Seller, pursuant to which Seller
shall assign to Buyer all of Seller’s right, title and interest in, under and to
the Leases, and Buyer shall assume all of Seller’s obligations arising from and
after the Closing Date under the Leases;
5.1.5    Assignment and Assumption of Contracts. Four (4) counterparts of the
Assignment and Assumption of Contracts (the “Assignment of Contracts”) in the
form of Exhibit F attached hereto, duly executed by Seller, pursuant to which
Seller shall assign to Buyer all of Seller’s right, title and interest in, under
and to the Contracts, and Buyer shall assume all of Seller’s obligations arising
from and after the Closing Date under the Contracts;
5.1.6    Bill of Sale. Four (4) counterparts of a Bill of Sale (the “Bill of
Sale”) in the form of Exhibit G attached hereto, duly executed by Seller,
conveying Seller’s right, title and interest in and to the Personal Property to
Buyer, together with the original titles to any motor vehicles listed on Exhibit
P attached hereto that are titled or registered with the State of Washington
Department of Motor Vehicles.

 
 
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5.1.7    General Assignment. Four (4) counterparts of a General Assignment (the
“General Assignment”) in the form of Exhibit H attached hereto, duly executed by
Seller;
5.1.8    Letters of Credit. In accordance with Section 8.5, below, such transfer
documentation as may be necessary to transfer all tenant security deposits held
by Seller under the Leases in the form of a letter of credit (the “Letters of
Credit”) or any other non-cash form, together with all original Letters of
Credit (the “LC Documentation”);
5.1.9    Tenant Letter. A letter in the form of Exhibit O attached hereto (the
“Tenant Notice Letter”) signed by Seller addressed to the tenants (in accordance
with the subject notification provisions under each applicable Lease) advising
each tenant of the sale of the Property to Buyer, the transfer of the security
deposit (if any) to Buyer, and directing that all future rent payments and other
charges under the Leases be forwarded to Buyer at an address to be supplied by
Buyer. In connection therewith, Escrow Holder shall cause each Tenant Notice
Letter to be delivered in accordance with any closing instruction letter
delivered by Buyer to the Escrow Holder at Closing; and
5.1.10    Owner’s Affidavit. An owner’s affidavit in the form attached hereto as
Exhibit E;
5.1.11    Leaseback Lease. Four (4) counterparts of the Office Building Lease
(“Leaseback Lease”) duly executed by Seller, in the form attached hereto as
Exhibit M pursuant to which Seller shall lease the entirety of the Building
located on the Real Property commonly known as "Building E" within QBE Corporate
Campus in Bellevue, Washington (the "Leaseback Building");
5.1.12    Proof of Authority. Such proof of Seller’s authority and authorization
to enter into this Agreement and the transactions contemplated hereby, and such
proof of the power and authority of the individual(s) executing and/or
delivering any instruments, documents or certificates on behalf of Seller to act
for and bind Seller, as may be reasonably required by the Title Company;
5.1.13    Turnover. To the extent Seller is obligated under this Agreement to
deliver the Personal Property and any materials, items or any other portion of
the Property (e.g., keys, equipment manuals, on-site equipment, etc.) to Buyer
as of the Closing, Seller shall do so either by (i) delivering the same directly
to Buyer, or (ii) leaving such materials and items at the Property; provided,
however, with respect to the Contracts and the Leases and any Lease-related
files maintained by Seller, Seller shall, to the extent in the possession of
Seller, any affiliate of Seller or Seller’s property manager, deliver originals
of the same to Buyer upon the Closing; and

 
 
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5.2    Buyer’s Deliveries. Buyer hereby covenants and agrees to deliver or cause
to be delivered to Escrow Holder at least one (1) business day prior to the
Closing Date (unless a different time period is specified below) the following
funds, instruments and documents, the delivery of each of which shall be a
condition to the Close of Escrow:
5.2.1    Buyer’s Funds. On the Closing Date, the balance of the Purchase Price
(subject to any adjustments and prorations provided under this Agreement);
5.2.2    Real Estate Excise Tax Affidavit. The REETA described in Section 5.1.2,
above, properly completed and duly executed by Buyer;
5.2.3    Lease Assignment. Four (4) counterparts of the Lease Assignment duly
executed by Buyer;
5.2.4    Assignment of Contracts. Four (4) counterparts of the Assignment of
Contracts duly executed by Buyer;
5.2.5    Bill of Sale. Four (4) counterparts of the Bill of Sale duly executed
by Buyer, together with a consumer use tax return executed by Buyer;
5.2.6    General Assignment. Four (4) counterparts of the General Assignment
duly executed by Buyer;
5.2.7    Leaseback Lease. Four (4) counterpart originals of the Leaseback Lease
duly executed by Buyer; and
5.2.8    Proof of Authority. Such proof of Buyer’s authority and authorization
to enter into this Agreement and the transactions contemplated hereby, and such
proof of the power and authority of the individual(s) executing and/or
delivering any instruments, documents or certificates on behalf of Buyer to act
for and bind Buyer, as may be reasonably required by the Title Company.
5.3    Other Documents. Buyer and Seller agree to execute, acknowledge, and
deliver all such further documentation as is reasonably necessary to fully carry
out this Agreement and to consummate and effect the transactions as contemplated
by this Agreement.
6.    Deliveries Upon Close of Escrow. When Buyer and Seller have satisfied
their respective Closing obligations under Sections 5.1, 5.2, and 5.3 hereof and
each of the conditions under Sections 4.3 and 4.4 hereof have either been
satisfied or waived, Escrow Holder shall promptly undertake all of the following
in the manner indicated and as more particularly instructed in Buyer’s and
Seller’s closing instructions:

 
 
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6.1    Tax Filings. The Title Company shall file the information return for the
sale of the Property required by Section 6045 of the Internal Revenue Code of
1986, as amended, and the Income Tax Regulations thereunder.
6.2    Prorations. Prorate all matters referenced in Section 8 based upon the
statement delivered to Escrow Holder signed by the parties;
6.3    Recording. Cause the Deed (with real estate excise tax information to be
affixed after recording), and any other documents which the parties hereto may
mutually direct, to be recorded in the Official Records;
6.4    Buyer Funds. Disburse from funds deposited by Buyer with Escrow Holder
towards payment of all items and costs (including, without limitation, the
Purchase Price) chargeable to the account of Buyer pursuant hereto in payment of
such items and costs and disburse the balance of such funds, if any, to Buyer in
accordance with any closing instruction letter delivered by Buyer to the Escrow
Holder;
6.5    Funds. Deduct all items chargeable to the account of Seller pursuant to
Section 7. If, as the result of the net prorations and credits pursuant to
Section 8, amounts are to be charged to the account of Seller, deduct the total
amount of such charges (unless Seller elects to deposit additional funds for
such items with the Escrow Holder); and if amounts are to be credited to the
account of Seller, disburse such amounts to Seller, or in accordance with
Seller’s instructions, at Close of Escrow. Disburse the Purchase Price to
Seller, or as otherwise directed by Seller, promptly upon the Close of Escrow in
accordance with Seller’s wire transfer instructions;
6.6    Documents to Seller. Deliver to Seller two (2) fully executed and
compiled, counterpart originals of the Lease Assignment, the Assignment of
Contracts, the Bill of Sale, Leaseback Lease, and the General Assignment, and
one (1) copy of the REETA executed by Buyer, the consumer use tax return
executed by Buyer, and the conformed recorded copy of the Deed; and
6.7    Documents to Buyer. Deliver to Buyer an original of the Tax Certificate
and Seller’s Closing Certificate, and two (2) fully executed and compiled,
counterpart originals of the Lease Assignment (and any corresponding Letters of
Credit and LC Documentation), Assignment of Contracts, Bill of Sale, Leaseback
Lease, and General Assignment, and one (1) copy of the REETA executed by Seller,
the consumer use tax return executed by Buyer, and a conformed recorded copy of
the Deed.
7.    Costs and Expenses. Seller shall pay (i) the premium for the Title Policy,
(ii) the cost of removing any Unpermitted Matters (as such term is defined in
the LOI) from title which Seller has committed to remove under the LOI, (ii) all
applicable real estate excise, transfer and

 
 
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documentary stamp taxes assessed by the applicable governmental entities (i.e.,
State, County and/or City), (iii) one-half (½) of Escrow Holder’s fee, and (iv)
all legal and professional fees and costs of attorneys and other consultants and
agents retained by Seller. Buyer shall pay through escrow (i) the costs of
updating the existing survey, (ii) the consumer use tax due on the transfer of
the Personal Property, (iii) the fee for the recording of the Deed, (iv) the
additional premium for an ALTA extended coverage endorsement to the Title Policy
and any other title endorsements requested by Buyer, (v) one-half (½) of Escrow
Holder’s fee, and (vi) all costs and expenses related to the Due Diligence
Investigations, and all legal and professional fees and costs of attorneys and
other consultants and agents retained by Buyer.
8.    Prorations. The following prorations between Seller and Buyer shall be
made by Escrow Holder computed as of the Close of Escrow (based on the periods
to which they relate and are applicable, and regardless of when payable), in
each instance based on either a three hundred sixty five (365) day year or, if
applicable, the actual number of days in the calendar month in which the Closing
occurs, with Buyer being deemed to be the owner of the Property on the Closing
Date for purposes of such prorations:
8.1    Ad Valorem Taxes and Assessments. All real estate taxes, personal
property taxes and assessments attributable to the Property will be prorated at
Closing. Seller shall be charged with all such taxes up to, but not including,
the Closing Date. If the applicable tax rate and assessments for the Property
have not been established for the year in which Closing occurs, the proration of
real estate and/or personal property taxes, as the case may be, will be based
upon the rate and assessments for the preceding year. All taxes imposed because
of a change of use of the Property after Closing will be paid by Buyer. Real
property tax refunds and credits received after the Closing which are
attributable to a fiscal tax year prior to the Closing shall belong to Seller,
and those which are attributable to the fiscal tax year in which the Closing
occurs shall be prorated based upon the date of Closing. Notwithstanding the
foregoing, Buyer shall receive a credit at Closing in the amount of all accrued
but unpaid taxes and delinquent taxes, if any, applicable to the Property for
the period prior to the Closing.
8.2    Excise Taxes Attributable to Real Property. Seller will be responsible
for the payment of all real estate excise, transfer and documentary stamp taxes
imposed with respect to the conveyance of the real property contemplated by this
Agreement and will indemnify and hold Buyer harmless from the payment of such
taxes.
8.3    Excise, Transfer, Sales and Consumer Use Taxes Attributable to Personal
Property. Buyer will be responsible for the payment of all excise, transfer,
sale and consumer use taxes imposed with respect to the conveyance of the
Personal Property contemplated by this Agreement and will indemnify and hold
Seller harmless from the payment of such taxes.
8.4    Lease Rentals. All non-delinquent rents (including all accrued tax and
operating expense pass-throughs), charges and revenue of any kind receivable
from the Leases

 
 
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will be prorated at Closing. Seller will receive all rents (including all
accrued tax and operating expense pass-throughs), charges and other revenue of
any kind receivable from the Leases attributable to periods up to, but not
including, the Closing Date, and Buyer will receive all rents (including all
accrued tax and operating expense pass-throughs), charges and other revenue of
any kind receivable from the Leases attributable to periods from and after the
Closing Date. No proration will be made with respect to any delinquent rents of
any kind receivable from the Leases for any period before Closing. All amounts
collected by Buyer subsequent to Closing relating to delinquent rents will be
promptly remitted to Seller; provided, however, all rents received by Buyer
after Closing from a tenant that is delinquent with respect to a period prior to
the Closing will be applied first to any current rental obligations for such
tenant for a current rental period following the Closing, second to the rental
obligations for such tenant for the rental period in which the Closing occurred
and third to satisfy delinquent rental obligations for such tenant for any
period before Closing. Buyer shall use commercially reasonable good faith
efforts for six (6) months after the Closing to collect all rents in the usual
course of Buyer’s operation of the Property, but Buyer will not be obligated to
institute any lawsuit or other collection procedures to collect delinquent
rents. Seller will retain all ownership rights relating to any such delinquent
rents; if Buyer has not collected the same within six (6) months from the
Closing Date, then Seller may take such action as it deems reasonably necessary
to collect such delinquent rents to the extent such actions do not interfere
with tenant’s tenancies. After expiration of such six (6) month period, all
amounts (accounts receivables, rents, or otherwise) received by Buyer shall
belong to Buyer unless the payment of any such amount (or the correspondence
accompanying such payment) specifically states that it is specifically for
satisfaction of amounts attributable to a period prior to the Closing Date.
Notwithstanding the foregoing, if any of such operating expenses and other
charges and expenses are payable by tenants under the Leases (collectively, the
“Tenant Charges”) on an estimated basis for which a future reconciliation of
actual Tenant Charges to estimated payments is required to be performed at the
end of a reconciliation period, Buyer and Seller shall make an adjustment at the
Closing for the applicable reconciliation period (or periods, if the Leases do
not have a common reconciliation period) based on a comparison of the actual
Tenant Charges to date compared to the estimated payments made under the Leases
for such reconciliation period(s). If, as of the Closing, and based on such
comparison, Seller has received additional rent payments in excess of the amount
that it is anticipated tenants will be required to pay, based on the actual
Tenant Charges to date, Buyer shall receive a credit in the amount of such
estimated overpayment. If, as of the Closing, and based on such comparison,
Seller has received additional rent payments that are less than the amount that
tenants would be required to pay based on the actual Tenant Charges to date,
Seller shall receive a credit in the amount of such estimated underpayment. Each
of Buyer and Seller shall deliver to the other party any amounts owed to such
party within thirty (30) days after any future reconciliation of actual Tenant
Charges to estimated payments.
8.5    Security Deposits. Buyer shall be credited at Closing for the amount of
all security deposits provided for under the Leases. Unless and until this
Agreement is terminated,

 
 
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Seller shall not apply any security deposits to any obligations under the
Leases. With respect to any security deposits that are held in the form of
Letters of Credit or any form other than cash, then at least one (1) business
day prior to the Closing, Seller shall (i) execute and deliver to Escrow Holder
such original assignment and/or transfer documentation as may be necessary to
effect the transfer of each Letter of Credit or other non-cash security deposit
to Buyer, and (ii) deliver to Escrow Holder the originals of such Letters of
Credit or other applicable documents. Seller shall be responsible for the amount
of any transfer fees required to be paid by landlord under such Letters of
Credit.
8.6    Operating Expenses. All utility service charges for electricity, heat and
air conditioning service, other utilities, elevator maintenance, common area
maintenance, taxes other than real estate taxes such as rental taxes, other
expenses incurred in operating the Property that Seller customarily pays and
that are not paid by the tenants directly, and any other costs incurred in the
ordinary course of business or the management and operation of the Property not
so paid by tenants, shall be prorated on an accrual basis. Seller shall pay all
such expenses that accrue prior to the Close of Escrow and Buyer shall pay all
such expenses accruing on the Close of Escrow and thereafter. Seller and Buyer
shall attempt to obtain billings and meter readings as of the Close of Escrow to
aid in such prorations, and if Seller and Buyer are unable to obtain meter
readings as of the Close of Escrow, the adjustments shall be made based on the
most recent utility bills using commercially reasonable assumptions. The parties
expressly waive their right under RCW 60.80 to require Escrow Holder to satisfy
unpaid utility charges out of funds deposited with the Escrow Holder. Buyer
shall contact all utility providers prior to Closing and arrange for the
transfer of all such utilities into Buyer’s name as of the date of Closing.
Buyer shall be responsible for the posting of all required deposits with such
utility providers, and Seller shall be entitled to a return of all current
deposits by such utility providers to the extent held by such utility providers.
8.7    Leasing Costs. Buyer shall be responsible for the costs of any remaining
tenant improvement work or allowances (including, but not limited to, any
allowances which may be converted to a credit against rent), free rent,
third-party leasing commissions and other leasing costs (collectively, the
“Leasing Costs”) relating to the Leases as set forth on Exhibit K attached
hereto. Seller hereby represents to Buyer that, to Seller’s actual knowledge,
the Leasing Costs listed on Exhibit K attached hereto constitute all of the
Leasing Costs for the Property. Buyer shall be entitled to a credit at the
Closing in the amount of the outstanding tenant improvement allowances
constituting a portion of the Leasing Costs as indicated on said Exhibit K.
Following the Closing Buyer shall assume and be responsible for the payment (or
granting of rent credits) of all such Leasing Costs (including, the free rent
amount payable under the EMC lease for the Original Premises (as such term is
defined in the EMC lease) for the months of January 1, 2014 - March 31, 2014),
and Buyer shall indemnify and defend Seller for the failure to pay such Leasing
Costs.

 
 
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8.8    Contracts. Amounts paid or payable under the Contracts shall be prorated
effective as of the Close of Escrow. Seller shall be responsible for all charges
for the period prior to the Close of Escrow and Buyer shall pay and be
responsible for all charges for the period beginning on the date of the Close of
Escrow and continuing thereafter. Buyer shall indemnify and defend Seller for
any failure of Buyer to pay amounts due under a Contract first accruing and
applicable to periods from and after the Close of Escrow, and Seller shall
indemnify and defend Buyer for any failure of Seller to pay amounts due under a
Contract for periods first accruing and applicable to periods before the Close
of Escrow.
8.9    Proration Statement. At least two (2) business days prior to the Close of
Escrow, the parties shall agree upon all of the prorations, adjustments,
purchase price adjustments and other allocations to be made and submit a
statement to Escrow Holder setting forth the same. In the event that any
prorations, apportionments or computations made under this Section 8 shall
require final adjustment, then the parties shall make the appropriate
adjustments promptly when accurate information becomes available and either
party hereto shall be entitled to an adjustment to correct the same, but in no
event shall such final adjustment occur later than one hundred eighty (180) days
following the Close of Escrow. Any corrected adjustment or proration shall be
paid in cash to the party entitled thereto within fifteen (15) business days
after written request. The provisions of this Section 8 shall survive the Close
of Escrow. Any costs or charges of closing this transaction not specifically
mentioned in this Agreement shall be paid and adjusted in accordance with local
custom in King County, Washington.
8.10    Purpose and Intent. Except as expressly provided herein, the purpose and
intent as to the provisions of prorations and apportionments set forth in this
Section 8 and elsewhere in this Agreement is that Seller shall bear all expenses
of ownership and operation of the Property and shall receive all income
therefrom accruing through midnight at the end of the day preceding the Closing
and Buyer shall bear all such expenses and receive all such income accruing
thereafter.
9.    Covenants of Seller. Seller hereby covenants with Buyer, as follows:
9.1    Contracts. Prior to the Closing, Seller shall not enter into any new
Contracts or any amendments or modifications to the existing Contracts
(collectively, “New Contracts’) without obtaining Buyer’s written consent, which
consent may be withheld in Buyer’s sole discretion. Notwithstanding the
foregoing, in an emergency situation, Seller shall be entitled to enter into a
New Contract without Buyer’s consent provided such New Contract is at a market
rate and is terminable without cause and without penalty on not more than thirty
(30) days’ notice, and Seller shall, within three (3) business days of entering
into such emergency New Contract, provide written notice to Buyer of such New
Contract (which notice shall be accompanied by a copy of the New Contract).
Without limiting the generality of the foregoing,

 
 
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Seller will provide Buyer with copies of all New Contracts. Any New Contract
shall be included in the Contracts to be assigned and assumed at Closing.
9.2    Leases. Seller shall not enter into any new Leases or any terminations,
amendments or any extensions of existing Leases (collectively, “New Leases”)
without obtaining Buyer’s written consent, which consent may be withheld in
Buyer’s sole discretion. Without limiting the generality of the foregoing,
Seller will provide Buyer with copies of any and all New Leases as well as all
corresponding proposals and/or letters of intent in connection with any actual
or prospective New Lease upon the delivery or receipt thereof.
9.3    Operation in the Ordinary Course. Subject to Sections 9.1 and 9.2 above,
from the date of this Agreement until the Close of Escrow, Seller shall (i)
operate and manage the Property in the ordinary course and consistent with
Seller’s past practices, and in accordance with all applicable laws, ordinances,
rules and regulations affecting the Property, (ii) maintain all present services
and amenities, (iii) subject to Section 13, below, maintain the Property in good
condition, repair and working order (but Seller shall not be required to make
capital improvements), (iv) keep on hand sufficient materials, supplies,
equipment and other personal property for the efficient operation and management
of the Property, (v) perform when due, and otherwise comply with, all of
Seller’s obligations and duties under the Leases and Contracts, (vi) maintain
all present policies of insurance, (vii) not alienate, lien, encumber or
otherwise transfer all or any interest in the Property (other than to Buyer at
the Close of Escrow), (viii) not market, solicit, negotiate, or enter into any
agreement with any party other than Buyer for the sale or transfer of any
interest in the Property, (viii) promptly deliver to Buyer any notices it may
hereafter receive from time to time that, if not delivered to Buyer, would cause
the representations and warranties set forth in Section 11 herein to be untrue
if made after Seller’s receipt of any such notices, and (ix) to the extent any
executed tenant estoppels have not been obtained, continue in good faith to
obtain executed tenant estoppels from all the tenants of the Property in
accordance with the terms and provisions of the LOI, provided, however, the
delivery of the same shall not be a condition to Closing. None of the Personal
Property (other than the Excluded Property) shall be removed from the Real
Property. All Personal Property and Intangible Personal Property shall be
conveyed to Buyer by Seller at the Close of Escrow free from any liens,
encumbrances or security interests of any kind or nature. In addition, Seller
shall use commercially reasonable efforts to cause all Tenants to perform their
respective maintenance and operation obligations with respect to their
respective premises at the Property.
10.    AS-IS Sale and Purchase. Buyer acknowledges, by its initials as set forth
below, that the provisions of this Section 10 have been required by Seller as a
material inducement to enter into the contemplated transactions, and the intent
and effect of such provisions have been explained to Buyer by Buyer’s counsel
and have been understood and agreed to by Buyer.

 
 
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10.1    Buyer’s Acknowledgment. As a material inducement to Seller to enter into
this Agreement and to convey the Property to Buyer, Buyer hereby acknowledges
and agrees that:
10.1.1    AS-IS. Except as otherwise expressly set forth in this Agreement, and
subject to Seller’s representation and warranties set forth in this Agreement
and in the Other Documents, Buyer is purchasing the Property in its existing
condition, “AS-IS, WHERE-IS, WITH ALL FAULTS,” and upon the Closing Date has
made or has waived all inspections and investigations of the Property and its
vicinity which Buyer believes are necessary to protect its own interest in, and
its contemplated use of, the Property.
 
 
/s/ DES
 
 
 
 
Buyer's Initials
 
 

10.1.2    No Representations. Other than the express representations and
warranties of Seller contained in this Agreement and in the Other Documents,
neither Seller, nor any person or entity acting by or on behalf of Seller, nor
any member, partner, officer, director, employee, agent, affiliate, successor or
assign of Seller (collectively, the “Seller Group”) has made any representation,
warranty, inducement, promise, agreement, assurance or statement, oral or
written, of any kind to Buyer upon which Buyer is relying, or in connection with
which Buyer has made or will make any decisions concerning the Property or its
vicinity including, without limitation, its use, condition, value, compliance
with “Governmental Regulations,” as that term is defined below, existence or
absence of “Hazardous Substances,” as that term is defined below, or the
permissibility, feasibility, or convertibility of all or any portion of the
Property for any particular use or purpose, including, without limitation, its
present or future prospects for sale, lease, development, occupancy or
suitability as security for financing. As used in this Agreement, the following
definitions shall apply: (i) the term “Governmental Regulations” means any laws
(including “Environmental Laws,” as that term is defined below), ordinances,
rules, requirements, resolutions, policy statements and regulations (including,
without limitation, those relating to land use, subdivision, zoning, Hazardous
Substances, occupational health and safety, handicapped access, water,
earthquake hazard reduction, and building and fire codes) of any governmental or
quasi-governmental body or agency claiming jurisdiction over the Property;
(ii) Environmental Laws” shall mean all federal, state and local laws,
ordinances, rules and regulations now or hereafter in force, whether statutory
or common law, as amended from time to time, and all federal and state court
decisions, consent decrees and orders interpreting or enforcing any of the
foregoing, in any way relating to or regulating human health or safety, or
industrial hygiene or environmental conditions, or protection of the
environment, or pollution or contamination of the air, soil, surface water or
groundwater, and includes, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., and the Clean
Water Act, 33 U.S.C. § 1251, et seq. and the Model Toxics Control Act, RCW
Chapter

 
 
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70.105D; and (iii) “Hazardous Substances” shall mean any substance or material
that is described as a toxic or hazardous substance, waste or material or a
pollutant or contaminant, or words of similar import, in any of the
Environmental Laws, and includes asbestos, petroleum (including crude oil or any
fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or
synthetic gas usable for fuel, or any mixture thereof), petroleum-based products
and petroleum additives and derived substances, lead-based paint, mold, fungi or
bacterial matter, polychlorinated biphenyls, urea formaldehyde, radon gas,
radioactive matter, medical waste, and chemicals which may cause cancer or
reproductive toxicity.
 
 
/s/ DES
 
 
 
 
Buyer's Initials
 
 

10.1.3    No Implied Warranties. Excluding any representation or warranty
expressly set forth in this Agreement and in the Other Documents, Seller hereby
specifically disclaims: (a) all warranties implied by law arising out of or with
respect to the execution of this Agreement, any aspect or element of the
Property, or the performance of Seller’s obligations hereunder including,
without limitation, all implied warranties of merchantability, habitability
and/or fitness for a particular purpose; and (b) any warranty, guaranty or
representation, oral or written, past, present or future, of, as to, or
concerning (i) the nature and condition of the Property or other items conveyed
hereunder, including, without limitation, the water, soil, and geology, the
suitability thereof and of the Property or other items conveyed hereunder for
development or for any and all other activities and uses which Buyer may elect
to conduct thereon, the existence of any environmental hazards or conditions
thereon (including but not limited to the presence of asbestos or other
Hazardous Substances) or compliance with applicable Environmental Laws; (ii) the
nature and extent of any right-of-way, lease, possession, lien, encumbrance,
license, reservation, condition or otherwise; and (iii) the compliance of the
property or other items conveyed hereunder or its operation with any
Governmental Regulations.
 
 
/s/ DES
 
 
 
 
Buyer's Initials
 
 

10.1.4    Information Supplied by Seller. Buyer specifically acknowledges and
agrees that, except for Seller’s representations and warranties expressly
contained in this Agreement and in the Other Documents, the Seller has made no
representation or warranty of any nature concerning the accuracy or completeness
of any documents delivered or made available for inspection by Seller to Buyer,
and that Buyer has undertaken such inspections of the Property as Buyer deems
necessary and appropriate and that, except for Seller’s representations and
warranties expressly contained in this Agreement and in the Other Documents,
Buyer is relying solely upon such investigations and not on any documents,
materials, or other information provided to Buyer by or on behalf of Seller. As
to any documents, materials, or other information provided to Buyer by or on
behalf of Seller, Buyer specifically acknowledges

 
 
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that they have been prepared by third parties with whom Buyer has no privity and
Buyer acknowledges and agrees that, except for Seller’s representations and
warranties expressly contained in this Agreement and in the Other Documents, no
warranty or representation, express or implied, has been made, nor shall any be
deemed to have been made, to Buyer with respect thereto, either by the Seller
Group or by any third parties that prepared the same.
 
 
/s/ DES
 
 
 
 
BUYER’S INITIALS
 
 

10.1.5    Release. As of the Close of Escrow, Buyer and the Buyer Parties hereby
fully and irrevocably release each member of the Seller Group from any and all
claims that the Buyer Parties may have or thereafter acquire against any member
of the Seller Group for any cost, loss, liability, damage, expense, demand,
action or cause of action (“Claims”) arising from or related to any matter of
any nature relating to, and condition of, the Property including any latent or
patent construction defects, errors or omissions, compliance with law matters,
Hazardous Substances and other environmental matters within, under or upon, or
in the vicinity of the Property, any statutory or common law right Buyer may
have to receive disclosures from Seller, including, without limitation, any
disclosures as to the Property’s location within areas designated as subject to
flooding, fire, seismic or earthquake risks by any federal, state or local
entity, the need to obtain flood insurance, the certification of water heater
bracing and/or the advisability of obtaining title insurance, or any other
condition or circumstance affecting the Property, its financial viability, use
or operation, or any portion thereof. This release includes Claims of which
Buyer is presently unaware or which Buyer does not presently suspect to exist in
its favor which, if known by Buyer, would materially affect Buyer’s release of
the Seller Group.
Notwithstanding anything to the contrary set forth in this Section 10.1.5, the
foregoing release is not intended to and does not cover (i) any Claims arising
from a breach of any Seller’s covenants, representations or warranties set forth
in this Agreement or in the Other Documents, (ii) any Claims arising from any
other breach by Seller of an express obligation of Seller under this Agreement
or the Other Documents which by its terms expressly survives the Close of
Escrow, or (iii) any Claims arising from Seller’s fraud (herein collectively the
“Excluded Claims”).
11.    Seller’s Representations and Warranties. Seller represents and warrants
to Buyer as of the date of this Agreement and as of the Closing, as follows:
11.1    Formation; Authority. Seller is duly formed, validly existing, and in
good standing under laws of the state of its formation. Seller has full power
and authority to enter into this Agreement and to perform this Agreement. The
execution, delivery and performance of this Agreement by Seller have been duly
and validly authorized by all necessary action on the part of Seller and all
required consents and approvals have been duly obtained, whether relating to

 
 
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Seller’s internal consent and approval procedures, or relating to any such
consents and approvals required by third parties (e.g., vendors under Contracts,
etc.). All requisite action has been taken by Seller in connection with the
entering into of this Agreement and the instruments referenced herein and the
consummation of the transactions contemplated hereby. The individual(s)
executing this Agreement and the instruments referenced herein on behalf of
Seller have the legal power, right and actual authority to bind Seller to the
terms and conditions hereof and thereof.
11.2    No Conflict.  Neither the execution and delivery of this Agreement and
the documents and instruments referenced herein, nor the occurrence of the
obligations set forth herein, nor the consummation of the transaction
contemplated herein, nor compliance with the terms of this Agreement and the
documents and instruments referenced herein conflict with or result in the
material breach of any terms, conditions or provisions of, or constitute a
default under, any bond, note, or other evidence of indebtedness or any
contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease
or other agreement or instrument to which Seller is a party.
11.3    Bankruptcy Matters. Seller hereby represents and warrants that it has
not made a general assignment for the benefit of creditors, filed any voluntary
petition in bankruptcy or suffered the filing of an involuntary petition by
Seller’s creditors, suffered the appointment of a receiver to take possession of
substantially all of Seller’s assets, suffered the attachment or other judicial
seizure of substantially all of Seller’s assets, admitted Seller’s inability to
pay Seller’s debts as they come due, or made an offer of settlement, extension
or composition to Seller’s creditors generally.
11.4    Prohibited Persons and Transactions.  Seller is not now, nor shall it be
at any time become, an individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity
(collectively, a “Person”) with whom a United States citizen, entity organized
under the laws of the United States or its territories or entity having its
principal place of business within the United States or any of its territories
(collectively, a “U.S. Person”), is prohibited from transacting business of the
type contemplated by this Agreement, whether such prohibition arises under
United States law, regulation, executive orders (including, the September 24,
2002, Executive Order Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit or Support Terrorism) and lists published
by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”)
(including those executive orders and lists published by OFAC with respect to
Persons that have been designated by executive order or by the sanction
regulations of OFAC as Persons with whom U.S. Persons may not transact business
or must limit their interactions to types approved by OFAC “Specially Designated
Nationals

 
 
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and Blocked Persons”) or otherwise. Seller will not engage in any dealing or
transaction or be otherwise associated with such Specially Designated Nationals
and Blocked Persons.
11.5    Leases. Other than the Leases (listed on Exhibit I attached hereto),
Seller is not currently a party to any other leases, licenses or other similar
occupancy agreements with respect to the leasing or occupancy of the Property.
As of the Effective Date, to Seller’s knowledge (except as set forth on Schedule
1 attached hereto), Seller has not received any written notice of default of
Seller under the Leases and there are no (i) landlord or Tenant defaults of
obligations under the Leases, nor (ii) events that have occurred which, with the
passage of time, would cause an event of default by landlord or any Tenant under
the Leases. Seller has provided its consent to the one sublease listed on
Exhibit I. To Seller’s knowledge there is no open or ongoing audit with respect
to rents and no such audit has been requested by any of the tenants under the
Leases.
11.6    Code Compliance. To Seller’s knowledge (except as set forth on Schedule
1 attached hereto), Seller has not received any written notice from any
governmental agency that the Property or any condition existing thereon or any
present use thereof violates any law or regulations applicable to the Property,
including, without limitation, any violations relating to environmental matters
affecting the Property.
11.7    Litigation. To Seller’s knowledge (except as set forth on Schedule 1
attached hereto), there is no litigation, arbitration or other legal or
administrative suit, action, proceeding or investigation of any kind pending or
threatened in writing against or involving Seller relating to the Property or
any part thereof, including, but not limited to, any condemnation action
relating to the Property or any part thereof.
11.8    Foreign Person. Seller is not a “foreign person” as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended, and the Income
Tax Regulations thereunder.
11.9    Contracts. There are not any Contracts or contracts or agreements of any
type pertaining to the Property, the obligation or liability for which Buyer or
the Property could be liable after the Closing, except for the Contracts listed
on Exhibit J attached hereto.
11.10    Seller’s Knowledge. Whenever phrases such as “to Seller’s knowledge” or
“Seller has no knowledge” or similar phrases are used in the foregoing
representations and warranties, they will be deemed to refer exclusively to
matters within the current actual (as opposed to constructive) knowledge of the
Seller’s Representative, whom Seller represents is the most knowledgeable person
with respect to the matters covered by Seller’s representations and warranties.
No duty of inquiry or investigation on the part of Seller or Seller’s
Representative will be required or implied by the making of any representation
or warranty which is so limited

 
 
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to matters within Seller’s actual knowledge, and in no event shall Seller’s
Representative have any personal liability therefor.
11.11    Survival. All of the foregoing representations and warranties of Seller
will survive Closing for a period of one (1) year after the Closing Date. No
claim for a breach of any representation or warranty of Seller will be
actionable or payable if (i) Buyer does not notify Seller in writing of such
breach and commence a “legal action” thereon within said one (1) year period, or
(ii) the breach in question results from or is based on a condition, state of
facts or other matter which was actually known to Buyer prior to Closing.
Notwithstanding any provision to the contrary set forth herein, the indemnities
set forth in the Lease Assignment shall not be subject to the survival period
set forth in this Section 11.11.
11.12    Patriot Act. To Seller’s knowledge, Seller is in compliance with any
and all applicable provisions of the Patriot Act (as such term is defined in
Section 12.5 below).
12.    Buyer’s Representations and Warranties. Buyer represents and warrants to
Seller as of the date of this Agreement as follows:
12.1    Formation; Authority. Buyer is duly formed, validly existing and in good
standing under the laws of the state of its formation. Buyer has full power and
authority to enter into this Agreement and the instruments referenced herein,
and to consummate the transactions contemplated hereby. All requisite action has
been taken by Buyer in connection with the entering into this Agreement and the
instruments referenced herein, and the consummation of the transactions
contemplated hereby. The individuals executing this Agreement and the
instruments referenced herein on behalf of Buyer have the legal power, right and
actual authority to bind Buyer to the terms and conditions hereof and thereof.
12.2    No Conflict.  Neither the execution and delivery of this Agreement and
the documents and instruments referenced herein, nor the occurrence of the
obligations set forth herein, nor the consummation of the transaction
contemplated herein, nor compliance with the terms of this Agreement and the
documents and instruments referenced herein conflict with or result in the
material breach of any terms, conditions or provisions of, or constitute a
default under, any bond, note, or other evidence of indebtedness or any
contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease
or other agreement or instrument to which Buyer is a party.
12.3    OFAC. Neither Buyer nor any Person who owns a direct interest in Buyer
(collectively, a “Buyer Party”) is now nor shall be at any time until Closing a
Person with whom a U.S. Person (including a Financial Institution) is prohibited
from transacting business of the type contemplated by this Agreement, whether
such prohibition arises under United States law, regulation, executive orders
and lists published by the OFAC (including those executive

 
 
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orders and lists published by OFAC with respect to Specially Designated
Nationals and Blocked Persons) or otherwise.
12.4    Buyer’s Funds. Buyer has taken, and shall continue to take until
Closing, such measures as are required by law to assure that the funds used to
pay to Seller the Purchase Price are derived (i) from transactions that do not
violate United States law nor, to the extent such funds originate outside the
United States, do not violate the laws of the jurisdiction in which they
originated; and (ii) from permissible sources under United States law and to the
extent such funds originate outside the United States, under the laws of the
jurisdiction in which they originated.
12.5    Patriot Act. To Buyer’s knowledge, neither Buyer nor any Buyer Party,
nor any Person providing funds to Buyer (i) is under investigation by any
governmental authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist related activities, any crimes which in
the United States would be predicate crimes to money laundering, or any
violation of any Anti-Money Laundering Laws; (ii) has been assessed civil or
criminal penalties under any Anti-Money Laundering Laws; or (iii) has had any of
its funds seized or forfeited in any action under any Anti-Money Laundering
Laws. For purposes of this Agreement, the term “Anti-Money Laundering Laws”
shall mean laws, regulations and sanctions, state and federal, criminal and
civil, that (1) limit the use of and/or seek the forfeiture of proceeds from
illegal transactions; (2) limit commercial transactions with designated
countries or individuals believed to be terrorists, narcotics dealers or
otherwise engaged in activities contrary to the interests of the United States;
(3) require identification and documentation of the parties with whom a
Financial Institution conducts business; or (4) are designed to disrupt the flow
of funds to terrorist organizations. Such laws, regulations and sanctions shall
be deemed to include the USA PATRIOT Act of 2001, Pub. L. No. 107-56 (the
“Patriot Act”), the Bank Secrecy Act, 31 U.S.C. Section 5311 et. seq., the
Trading with the Enemy Act, 50 U.S.C. App. Section 1 et. seq., the International
Emergency Economic Powers Act, 50 U.S.C. Section 1701 et. seq., and the sanction
regulations promulgated pursuant thereto by the OFAC, as well as laws relating
to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and
1957. To Buyer’s knowledge, Buyer is in compliance with any and all applicable
provisions of the Patriot Act.
12.6    Buyer’s Knowledge. Seller acknowledges and agrees that each of Buyer’s
representations and warranties contained in this Agreement are and shall be
deemed to be qualified by Buyer’s Knowledge. As used herein “Buyer’s Knowledge”
or any phrase of like meaning shall be deemed to mean the actual conscious
knowledge of Buyer’s Representative. In no event shall Buyer’s Representative be
personally liable or responsible with respect to any of the matters contemplated
under this Agreement.

 
 
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13.    Casualty and Condemnation.
13.1    Material Casualty. In the event that prior to the Close of Escrow a
“material portion” of the Real Property is destroyed or materially damaged,
Buyer shall have the right, exercisable by giving written notice to Seller
within ten (10) days after receipt of written notice of such damage or
destruction, either (i) to terminate this Agreement in which event the Deposit
and all interest accrued thereon shall be immediately returned to Buyer, any
other money or documents with the Escrow Holder shall be returned to the party
depositing the same, or (ii) to accept the Real Property in its then condition
and to proceed with the consummation of the transaction contemplated by this
Agreement, with an abatement or reduction in the Purchase Price in the amount of
any deductible for the applicable insurance coverage plus the amount of the
uninsured portion of such damage, if any, and to receive an assignment of all of
Seller’s rights to any insurance proceeds payable by reason of such damage or
destruction. If Buyer elects to proceed under clause (ii) above, Seller shall
not compromise, settle or adjust any claims to such proceeds without Buyer’s
prior written consent, which may be withheld in Buyer’s sole discretion.
13.2    Non‑Material Casualty. In the event that prior to the Close of Escrow a
non‑material portion of the Real Property is damaged or destroyed, Buyer shall
accept the Real Property in its then condition and proceed with the consummation
of the transaction contemplated by this Agreement, with an abatement or
reduction in the Purchase Price in the amount of any deductible for the
applicable insurance coverage plus the amount of the uninsured portion of such
damage, if any, and receive an assignment of all of Seller’s rights to any
insurance proceeds payable by reason of such damage or destruction. In the event
of any such non-material casualty Seller shall not compromise, settle or adjust
any claims to such proceeds without Buyer’s prior written consent, which may be
withheld in Buyer’s sole discretion.
13.3    Material Condemnation. In the event that prior to the Close of Escrow,
all or any material portion of the Real Property is subject to a taking by a
public or governmental authority, Buyer shall have the right, exercisable by
giving written notice to Seller within ten (10) days after receiving written
notice of such taking, either (i) to terminate this Agreement, in which event
the Deposit and all interest accrued thereon shall be immediately returned to
Buyer, any other money or documents with the Escrow Holder shall be returned to
the party depositing the same, and (ii) to accept the Real Property in its then
condition, without a reduction in the Purchase Price, and to receive an
assignment of all of Seller’s rights to any condemnation award or proceeds
payable by reason of such taking. If Buyer elects to proceed under clause (ii)
above, Seller shall not compromise, settle or adjust any claims to such award
without Buyer’s prior written consent, which may be withheld in Buyer’s sole
discretion.
13.4    Non‑Material Condemnation. In the event that prior to the Close of
Escrow, any non-material portion of the Real Property is subject to a taking by
any public or

 
 
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governmental authority, Buyer shall accept the Real Property in its then
condition and proceed with the consummation of the transaction contemplated by
this Agreement, in which event Buyer shall be entitled to an assignment of all
of Seller’s rights to any award or proceeds payable in connection with such
taking. In the event of any such non-material taking, Seller shall not
compromise, settle or adjust any claims to such award without Buyer’s prior
written consent, which may be withheld in Buyer’s sole discretion.
13.5    Materiality Standard. For purposes of this Section 13, damage to the
Real Property or a taking of a portion thereof shall be deemed to involve a
material portion thereof if (a) the estimated cost of restoration or repair, as
estimated by Buyer and Seller in their reasonable discretion, of such damage or
the amount of the condemnation award with respect to such taking shall exceed
five percent (5%) of the Purchase Price, (b) such damage or taking causes access
to or parking on the Real Property to be materially adversely affected, (c) such
damage or taking results in the Real Property violating any laws or failing to
comply with zoning or any covenants, conditions or restrictions affecting the
Real Property, (d) such damage or taking entitles any tenant to terminate its
Lease or abate rent, or (e) with respect to any casualty, there is any damage
which is not fully insured and for which Buyer will not receive, at Seller’s
election, a credit in the amount of the uninsured portion of such damage upon
the Closing.
13.6    Notice of Casualty and Condemnation. Seller agrees to give Buyer prompt
written notice of any taking of, proposed taking of, damage to or destruction of
the Real Property.
14.    Notices. All notices, consents, requests, reports, demands or other
communications hereunder (collectively, “Notices”) shall be in writing and may
be given personally or by Federal Express (or other reputable overnight delivery
service) as follows:
To Seller:
Unigard Insurance Company
c/o QBE Americas, Inc.
One General Drive
Sun Prairie, WI 53596
Attn: Dennis R. Glinski
Vice President - Corporate Real Estate and Facilities QBE
North America
Telephone No.: (608) 834-3845
Email: dennis.glinski@us.qbe.com

and

 
 
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Unigard Insurance Company
c/o QBE Americas, Inc.
One General Drive
Sun Prairie, WI 53596
Attn: Judith L. Zelhofer
Assistant General Counsel - Corporate Legal Services
Telephone No.: (608) 825-5916
Email: judy.zelhofer@us.qbe.com
 
 
To Buyer:
At Buyer’s Notice Address set forth in the Summary and Definition of Basic
Terms.
 
 
With a copy to:
KBS Capital Advisors LLC
620 Newport Center Drive, Suite 1300
Newport Beach, CA 92660
Attn: Jim Chiboucas, Esq.
Telephone: (949) 417-6555
E-Mail: jchiboucas@kbsrealty.com
 
 
And:
Greenberg Traurig
3161 Michelson Drive, Suite 1000
Irvine, CA 92612
Attn: Scott Morehouse
Telephone: (949) 732-6671
E-Mail: morehouses@gtlaw.com
 
 
To Escrow Holder:
At Escrow Holder’s Address set forth in the Summary and Definition of Basic
Terms.

or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. Any Notice will be deemed given on
the date of receipted delivery, the date of refusal to accept delivery, or when
delivery is first attempted but cannot be made due to a change of address for
which no Notice was given. Notwithstanding the foregoing, to the extent a Notice
is (i) delivered via electronic mail, and (ii) the original of which is
delivered personally or via overnight delivery service as identified
hereinabove, then such Notice shall be deemed given upon the date of
transmission of such e-mail. In any event, the party delivering the Notice shall
use commercially reasonable efforts to provide a courtesy copy of each such
Notice to the receiving party via electronic mail (provided that such email
notice shall not constitute a formal notice under the terms of this Section 14).
Counsel for a party may give notice or demand on behalf of such party, and such
notice or demand shall be treated as being sent by such party.

 
 
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15.    Broker Commissions. Upon the Close of Escrow, Seller shall pay a real
estate brokerage commission to Seller’s Broker with respect to this Agreement in
accordance with Seller’s separate agreement with Seller’s Broker, and Seller
hereby agrees to indemnify, defend and hold Buyer free and harmless from and
against any and all commissions or claims Seller’s Broker may assert in
connection with the transactions contemplated by this Agreement. Seller
represents and warrants to Buyer, and Buyer represents and warrants to Seller,
that no other broker or finder has been engaged by it, respectively, in
connection with any of the transactions contemplated by this Agreement, or to
its knowledge is in any way connected with any of such transactions. In the
event of any additional claims for brokers’ or finders’ fees or commissions in
connection with the negotiation, execution or consummation of this Agreement,
then as a covenant which shall survive the termination of this Agreement or the
Close of Escrow, Buyer shall indemnify, save harmless and defend Seller from and
against such claims if they shall be based upon any statement or representation
or agreement by Buyer, and Seller shall indemnify, save harmless and defend
Buyer if such claims shall be based upon any statement, representation or
agreement made by Seller.
16.    Default.
16.1    Default by Seller. In the event that Seller fails to perform any of the
material covenants or agreements contained herein which are to be performed by
Seller, Buyer may, at its option and as its exclusive remedy, either
(i) terminate this Agreement by giving written notice of termination to Seller
whereupon Escrow Holder will return to Buyer the Deposit and both Buyer and
Seller will be relieved of any further obligations or liabilities hereunder,
except for those obligations which expressly survive any termination hereof, or
(ii) seek specific performance of this Agreement. If Buyer elects the remedy in
subsection (ii) above, Buyer must commence and file such specific performance
action in the appropriate court not later than thirty (30) days following the
Closing Date. Except as specifically set forth in this Section 16.1, Buyer does
hereby specifically waive any right to pursue any other remedy at law or equity
for such default of Seller, including, without limitation, any right to seek,
claim or obtain damages, punitive damages or consequential damages.
16.2    Default by Buyer. IN THE EVENT THE CLOSE OF ESCROW DOES NOT OCCUR AS
HEREIN PROVIDED BY REASON OF BUYER NOT COMPLETING THE PURCHASE OF THE PROPERTY
WHEN IT IS OBLIGATED TO DO SO UNDER THE TERMS AND PROVISIONS OF THIS AGREEMENT
AND PROVIDED SELLER IS NOT OTHERWISE IN DEFAULT, BUYER AND SELLER AGREE THAT IT
WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH
SELLER MAY SUFFER. THEREFORE BUYER AND SELLER DO HEREBY AGREE THAT A REASONABLE
ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT THAT
BUYER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY WHEN IT IS
OBLIGATED TO DO SO

 
 
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UNDER THE TERMS AND PROVISIONS OF THIS AGREEMENT IS AND SHALL BE AN AMOUNT EQUAL
TO THE DEPOSIT, TOGETHER WITH THE ACCRUED INTEREST THEREON; AND, AS SELLER’S
SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), SAID AMOUNT SHALL BE
DISBURSED TO SELLER AS THE FULL, AGREED AND LIQUIDATED DAMAGES FOR A BREACH OF
THIS AGREEMENT BY BUYER WHICH RESULTS IN THE CLOSE OF ESCROW NOT OCCURRING IN
ACCORDANCE WITH THE TERMS AND PROVISIONS OF THIS AGREEMENT, ALL OTHER CLAIMS TO
DAMAGES OR OTHER REMEDIES IN RESPECT OF BUYER’S BREACH OF THIS AGREEMENT BEING
HEREIN EXPRESSLY WAIVED BY SELLER. SUCH PAYMENT OF THE DEPOSIT IS NOT INTENDED
AS A PENALTY, BUT AS FULL LIQUIDATED DAMAGES. NOTHING CONTAINED IN THIS SECTION
SHALL LIMIT SELLER’S RIGHT TO RECEIVE REIMBURSEMENT FOR COSTS AND EXPENSES
PURSUANT TO SECTION 18.5 BELOW, NOR WAIVE OR AFFECT BUYER’S INDEMNITY AND
CONFIDENTIALITY OBLIGATIONS. THE PARTIES ACKNOWLEDGE THAT THIS PROVISION IS
INTENDED TO SATISFY THE REQUIREMENTS OF RCW 64.04.005(1).
 
/s/ JS
 
/s/ DES
 
 
SELLER’S INITIALS
 
BUYER’S INITIALS
 

16.3    Indemnities; Defaults after Closing or Termination. The limitations on
the parties’ remedies set forth in Sections 16.1 and 16.2, above, will not be
deemed to prohibit either party from (i) specifically seeking indemnification
from the other for any matter with respect to which such other party has agreed
hereunder to provide indemnification, or from seeking damages from such other
party in the event it fails or refuses to provide such indemnification;
(ii) subject to the terms, conditions and limitations of this Agreement, seeking
damages incurred during the period of time after Closing that a representation
or warranty given as of the Closing Date by the other party hereunder survives
Closing, for the other party’s breach of such representation or warranty
discovered after such Closing; or (iii) subject to the terms, conditions and
limitations of this Agreement, seeking damages or such equitable relief as may
be available for the other party’s failure to perform after any termination of
this Agreement any obligation hereunder which expressly survives such
termination; provided, however, that in no event whatsoever will either party be
entitled to recover from the other any punitive, consequential or speculative
damages.
 
/s/ JS
 
/s/ DES
 
 
SELLER’S INITIALS
 
BUYER’S INITIALS
 

16.4    Limited Liability. Notwithstanding anything to the contrary herein,
Buyer on its own behalf and on behalf of its agents, members, partners,
employees, representatives, officers, directors, agents, related and affiliated
entities, successors and assigns (collectively, the

 
 
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“Buyer Parties”) hereby agrees that in no event or circumstance shall any of the
members, partners, employees, representatives, officers, directors, agents,
property management company, affiliated or related entities of Seller have any
personal liability under this Agreement. Seller on its own behalf and on behalf
of its agents, members, partners, employees, representatives, related and
affiliated entities, successors and assigns hereby agrees that in no event or
circumstance shall any of the Buyer Parties have any personal liability under
this Agreement. Notwithstanding anything to the contrary contained herein:
(i) the maximum aggregate liability of Seller, and the maximum aggregate amount
which may be awarded to and collected by Buyer (including, without limitation,
for any breach of any representation, warranty and/or covenant of Seller) under
this Agreement or any documents executed pursuant hereto or in connection
herewith, including, without limitation, the Exhibits attached hereto
(collectively, the “Other Documents”) shall, under no circumstances whatsoever,
exceed One Million Nine Hundred Sixty Seven Thousand Five Hundred and 00/100
Dollars ($1,967,500.00) (the “CAP Amount”); and (ii) no claim by Buyer alleging
a breach by Seller of any representation, warranty and/or covenant of Seller
contained herein or in any of the Other Documents may be made, and Seller shall
not be liable for any judgment in any action based upon any such claim, unless
and until such claim, either alone or together with any other claims by Buyer
alleging a breach by Seller of any such representation, warranty and/or
covenant, is for an aggregate amount in excess of Fifty Thousand and 00/100
Dollars ($50,000.00) (the “Floor Amount”), in which event Seller’s liability
respecting any final judgment concerning such claim or claims shall be for the
entire amount thereof, subject to the CAP Amount set forth in clause (i) above;
provided, however, that if any such final judgment is for an amount that is less
than or equal to the Floor Amount, then Seller shall have no liability with
respect thereto.
17.    Assignment. Buyer may not assign, transfer or convey its rights and
obligations under this Agreement or in the Property without the prior written
consent of Seller, and no such approved assignment shall relieve Buyer from its
liability under this Agreement until Buyer’s assignee has fully performed all of
Buyer’s obligations hereunder and Close of Escrow has occurred, at which time
Buyer shall be released from any further obligations or responsibilities under
this Agreement, except for those obligations or responsibilities which
specifically survive the Close of Escrow, which shall remain an obligation of
the Buyer named herein. Seller agrees that it will not unreasonably withhold,
delay or condition its consent to an assignment by Buyer to any entity
controlling, controlled by, or under common control with Buyer. Any permitted
assignee shall assume all of Buyer’s obligations hereunder and succeed to all of
Buyer’s rights and remedies hereunder and any assignment and assumption must be
in writing and delivered to Seller by the date not less than three (3) days
prior to the Closing Date in order to prepare any necessary revisions to the
closing documents.

 
 
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18.    Miscellaneous.
18.1    Governing Law. The parties hereto expressly agree that this Agreement
shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of Washington. Venue for any legal
proceeding under this Agreement shall be in Seattle, Washington.
18.2    Partial Invalidity. If any term or provision or portion thereof of this
Agreement or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision or portion thereof to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each such term and provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law.
18.3    Waivers. No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.
18.4    Successors and Assigns. Subject to the provisions of Section 17, this
Agreement shall be binding upon and shall inure to the benefit of the successors
and assigns of the parties hereto.
18.5    Professional Fees. In the event of the bringing of any action or suit by
a party hereto against another party hereunder by reason of any breach of any of
the covenants, agreements or provisions on the part of the other party arising
out of this Agreement, then in that event the prevailing party shall be entitled
to have and recover of and from the other party all costs and expenses of the
action or suit and any appeals therefrom, and enforcement of any judgment in
connection therewith, including reasonable attorneys’ fees, accounting and
engineering fees, and any other professional fees resulting therefrom. The
provisions of this Section shall survive Closing and any termination of this
Agreement.
18.6    Entire Agreement. This Agreement (including all Exhibits attached
hereto) is the final expression of, and contains the entire agreement between,
the parties with respect to the subject matter hereof and supersedes all prior
understandings with respect thereto. This Agreement may not be modified,
changed, supplemented or terminated, nor may any obligations hereunder be
waived, except by written instrument signed by the party to be charged or by its
agent duly authorized in writing or as otherwise expressly permitted herein.
This Agreement may be executed in one or more counterparts, each of which shall
be an original, and all of which together shall constitute a single instrument.
The parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto.

 
 
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18.7    Time of Essence/Business Days. Seller and Buyer hereby acknowledge and
agree that time is strictly of the essence with respect to each and every term,
condition, obligation and provision hereof and that failure to timely perform
any of the terms, conditions, obligations or provisions hereof by either party
shall constitute a material breach of and a non-curable (but waivable) default
under this Agreement by the party so failing to perform. Unless the context
otherwise requires, all periods terminating on a given day, period of days, or
date shall terminate at 5:00 p.m. Central time on such date or dates, and
references to “days” shall refer to calendar days except if such references are
to “business days” which shall refer to days which are not Saturday, Sunday or a
legal holiday. Notwithstanding the foregoing, if any period terminates on a
Saturday, Sunday or a legal holiday, under the laws of the State of Washington,
the termination of such period shall be on the next succeeding business day.
18.8    Construction. Headings at the beginning of each paragraph and
subparagraph are solely for the convenience of the parties and are not a part of
the Agreement. Whenever required by the context of this Agreement, the singular
shall include the plural and the masculine shall include the feminine and vice
versa. This Agreement shall not be construed as if it had been prepared by one
of the parties, but rather as if both parties had prepared the same. Unless
otherwise indicated, all references to sections are to this Agreement. All
exhibits referred to in this Agreement are attached and incorporated by this
reference. In the event the date on which Buyer or Seller is required to take
any action under the terms of this Agreement is not a business day, the action
shall be taken on the next succeeding business day.
19.    1031 Exchange. Upon the request of Buyer, Seller shall cooperate with the
Buyer in Closing the sale of the Property in accordance with this Agreement so
as to qualify such transaction as an exchange of like-kind property pursuant to
Section 1031 of the Internal Revenue Code of 1986, as amended; provided,
however, Seller shall not be required to take title to any exchange property and
Seller will not be required to agree to or assume any covenant, obligation or
liability in connection therewith, the Closing hereunder shall not be delayed as
a result of, or conditioned upon, such exchange, Buyer shall pay all costs
associated with such exchange, and shall reimburse Seller for any costs incurred
by Seller solely as a result of such Section 1031 exchange, and Buyer shall
remain primarily liable under this Agreement and indemnify Seller from any
liability in connection with such exchange.
20.    Confidentiality. Buyer and Seller agree that (a) except as otherwise
permitted pursuant to Section 21 of this Agreement, below, (b) except as
otherwise provided or required by valid law or court order, (c) except to the
extent Seller or Buyer consider such documents or information reasonably
necessary to prosecute and/or defend any claim made with respect to the Property
or this Agreement, (d) except to the extent reasonably necessary to deliver such
documents or information to Buyer’s agents, affiliates, directors, officers,
partners, representatives, employees, paralegals, attorneys and/or consultants
in connection with their respective roles in the closing of this transaction and
to Buyer’s prospective investors and

 
 
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lenders, and (e) except for Seller’s disclosure to its owners (direct or
indirect) or to its lenders, (i) Buyer, Buyer’s Parties and Buyer’s agents and
consultants (collectively, the “Buyer’s Representatives”), and Seller, Seller’s
Parties and Seller’s agents and consultants (collectively, the “Seller’s
Representatives”) shall keep and maintain the contents of this Agreement,
including, without limitation, the amount of consideration being paid by Buyer
for the Property, as well as any material economic terms applicable to this
transaction, strictly confidential, and (ii) Buyer, Buyer’s Representatives,
Seller and Seller’ s Representatives shall refrain from generating or
participating in any press releases or publicity regarding this transaction,
including without limitation the amount of consideration being paid by Buyer for
the Property, without the prior written consent of the other party, which
consent may be withheld in the other party’s sole discretion; provided, however,
in all events Buyer, Buyer’s Representatives, Seller and Seller’s
Representatives shall keep the contents of any materials, reports, documents,
data, test results, and other information related to the transaction
contemplated hereby, including, without limitation, any information generated by
Buyer’s Due Diligence Investigations and all information regarding Seller’s
ownership or Buyer’s acquisition and subsequent ownership of the Property
strictly confidential. Without affecting any other rights or remedies that
either party may have, Buyer and Seller acknowledge and agree that they shall be
entitled to seek the remedies of injunction, specific performance and other
equitable relief for any breach, threatened breach or anticipatory breach of the
provisions of this Section 20 by Buyer or any of Buyer’s Representatives or
Seller or Seller’s Representatives, as the case may be. The provisions of this
Section 20 shall survive any termination of this Agreement but shall not survive
the Closing, and nothing contained herein shall impair Buyer’s right to disclose
information relating to this Agreement or the Property following the Closing.
Notwithstanding the foregoing and anything to the contrary in this Agreement,
nothing contained herein shall impair Buyer’s (or its permitted assignee’s)
right to disclose information relating to this Agreement or the Properties (a)
to any due diligence representatives and/or consultants that are engaged by,
work for or are acting on behalf of, any securities dealers and/or broker
dealers evaluating Buyer or its permitted assignees, (b) in connection with any
filings (including any amendment or supplement to any S-11 filing) with
governmental agencies (including the SEC) by any REIT holding, or that is
considering holding, an interest (direct or indirect) in any permitted assignee
of Buyer, and (c) to any broker/dealers in the Buyer’s or any REIT's
broker/dealer network and any of the REIT’s or Buyer’s investors.
21.    Property Disclosures. Buyer and Seller acknowledge that the Real Property
constitutes “Commercial Real Estate” as defined in RCW 64.06.005. Buyer waives
receipt of the seller disclosure statement required under RCW 64.06 for
transactions involving the sale of commercial real estate, except for the
section entitled “Environmental”. The Environmental section of the seller
disclosure statement as completed by Seller is attached to this Agreement as
Exhibit N (the “Disclosure Statement”). Buyer acknowledges receipt of the
Disclosure Statement and waives its right to rescind the Agreement under RCW
64.06.030. Buyer further acknowledges and agrees that the Disclosure Statement
(i) is for the purposes of disclosure only,

 
 
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(ii) will not be considered part of this Agreement, and (iii) will not be
construed as a representation or warranty of any kind by the Seller.
[Remainder of this page intentionally left blank – signature pages follow]

 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year hereinabove written.
“SELLER”    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
By: /s/ Jim Shea
Name: Jim Shea
Title: Senior Vice President
Date of Execution: ______________ __, 2012

 
 
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“BUYER”    
KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company
By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member
By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member
By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member
By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner
By:
/s/ David E. Snyder

Name: David E. Snyder,
Title: Chief Financial Officer
Date of Execution: July 17, 2012

 
 
 
 
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JOINDER BY ESCROW HOLDER
Escrow Holder (as defined in Section 8 of Article I above) hereby acknowledges
that it has received this Agreement executed by Seller and Buyer and accepts the
obligations of and instructions for the Escrow Holder set forth herein. Escrow
Holder agrees to disburse and/or handle the Deposit, the Purchase Price and all
closing documents in accordance with this Agreement.
Dated:
July 25,
2012
COMMONWEALTH LAND TITLE
INSURANCE COMPANY
 
 
 
 
 
 
 
 
 
 
By:
/s/ Jexton
 
 
 
Name:
Jexton
 
 
 
Title:
VP
 
 
 
 
 
 
 

 
 
 
 
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Agreement of Purchase and Sale

--------------------------------------------------------------------------------

EXHIBIT A
LEGAL DESCRIPTION
The legal description for the Land (Assessor’s Parcel Nos. 880300-0010,
880300-0020, 880300-0030, 880300-0040, 880300-0050, and 880300-0060) that
constitutes a material component of the subject Property and that underlies the
nine Buildings (commonly known as 2002-2018 156th Avenue NE, 15801-15805 NE 24th
Street, and 15800 Northup Way in Bellevue, Washington) is attached hereto.

 
 
EXHIBIT A
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
- 1-
 
 

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EXHIBIT B
SPECIAL WARRANTY DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Above Space For Recorder’s Use Only)
 
 

Document Title:
SPECIAL WARRANTY DEED
Grantor:
Unigard Insurance Company
Grantee:
 
Legal Description:

Abbreviated Legal Description:  

Full Legal Description: See Exhibit A attached.

Assessor’s Tax Parcel Nos.: 

SPECIAL WARRANTY DEED
THE GRANTOR, UNIGARD INSURANCE COMPANY, a Wisconsin corporation, for valuable
consideration in hand paid, bargains, sells and conveys to KBS SOR 156TH AVENUE
NORTHEAST, LLC, a Delaware limited liability company, whose mailing address is
c/o KBS Capital Advisors LLC, 620 Newport Center Drive, Suite 1300, Newport
Beach, CA 92660, Attn: Brian Ragsdale, the real estate situated in King County,
Washington and legally described on attached Exhibit A (the “Property”),
together with all improvements situated thereon and all appurtenances and
easements benefiting the Property, subject to the exceptions listed on attached
Exhibit B.
The Grantor, for itself and its successors in interest, does by these presents
expressly limit the covenants of the deed to those herein expressed, and
excludes all covenants arising or to arise by statutory or other implication,
and does hereby covenant that against all persons whomsoever lawfully claiming
or to claim by, through or under said Grantor and not otherwise, Grantor will
forever warrant and defend the said described real estate.

 
 
EXHIBIT A TO
SPECIAL
WARRANTY DEED
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

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DATED: ________________________, 2012.
GRANTOR:
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
By:
 
Name:
 
Title:
 
 
 
 
 
 

STATE OF
 
)
 
 
)
ss.
COUNTY OF
 
)
 
 
 
 
 
 

I certify that I know or have satisfactory evidence that the persons appearing
before me and making this acknowledgment are the persons whose true signatures
appear on this document.
On this ____ day of ___________, 2012, before me personally appeared
______________________, to me known to be the ______________________ of UNIGARD
INSURANCE COMPANY, 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/she was authorized to execute said instrument and
that the seal affixed, if any, is the corporate seal of said corporation.
WITNESS my hand and official seal hereto affixed the day and year first above
written.
 
 
 
 
 
 
 
 
Notary Public in and for the State of
 
,
 
 
My Commission expires:
 
 
 
 
 
 
[Type or Print Notary Name]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
EXHIBIT A TO
SPECIAL
WARRANTY DEED
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

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EXHIBIT A TO SPECIAL WARRANTY DEED
LEGAL DESCRIPTION
The Real Property consists of the following described parcels of real property,
located in the City of Bellevue, County of King, and State of Washington:
LOTS 1, 2, 3, 4, 5 AND 6, UNIGARD INSURANCE COMPANY – UNIGARD PARK BINDING SITE
PLAN, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 198 OF PLATS, PAGE(S) 28
THROUGH 35, INCLUSIVE, IN KING COUNTY, WASHINGTON.

 
 
EXHIBIT A TO
SPECIAL
WARRANTY DEED
 
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Agreement of Purchase and Sale
 
 
-3-
 
 

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EXHIBIT B TO SPECIAL WARRANTY DEED
EXCEPTIONS
[ATTACHED]

 
 
EXHIBIT B TO
SPECIAL
WARRANTY DEED
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

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EXHIBIT C
TRANSFEROR’S CERTIFICATION OF NON-FOREIGN STATUS
To inform KBS SOR 156TH AVENUE NORTHEAST, LLC, a Delaware limited liability
company, (“Transferee”), that withholding of tax under Section 1445 of the
Internal Revenue Code of 1986, as amended (“Code”) will not be required upon the
transfer of certain real property to the Transferee by UNIGARD INSURANCE
COMPANY, a     Wisconsin corporation (“Transferor”), the undersigned hereby
certifies the following on behalf of the Transferor:
1.
The Transferor is not a foreign corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in the Code and the Income Tax
Regulations promulgated thereunder).

2.
The Transferor’s U.S. employer identification number is 91-6027360.

3.
The Transferor’s office address is:

Unigard Insurance Company
c/o QBE Americas, Inc.
One General Drive
Sun Prairie, WI 53596
Attn: Dennis R. Glinski
Vice President - Corporate Real Estate and Facilities QBE North America
4.
Transferor is not a disregarded entity as defined in § 1.1445-2(b)(2)(iii).

The Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalty of perjury I declare that I have examined this Certification and
to the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of the
Transferor.
 
Dated:
,
2012
 
 
 
 
"TRANSFEROR"
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
 
 
 
 
 
 
 
 
 
By:
 
 
 
 
 
Name:
 
 
 
 
 
Title:
 
 
 
 
 
 
 
 
 

 
 
EXHIBIT C
 
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-#PageNum#-
 
 

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EXHIBIT D
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (“Assignment”) is made this ____ day of
__________________________, 2012 (the “Assignment Date”) by and between UNIGARD
INSURANCE COMPANY, a Wisconsin corporation (“Assignor”), and KBS SOR 156TH
AVENUE NORTHEAST, LLC, a Delaware limited liability company (“Assignee”).
W I T N E S S E T H:
A.Assignor and Assignee entered into that certain Agreement of Purchase and Sale
and Joint Escrow Instructions, with an Effective Date of ____________ __, 2012
(the “Agreement”), respecting the sale of the Property. Capitalized terms used
herein and not separately defined have the meanings ascribed to them in the
Agreement.
B.    Under the Agreement, Assignor is obligated to assign to Assignee all of
Assignor’s right, title and interest in and to the Leases and security deposits
under the Leases to Assignor (“Deposits”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1.    Assignment. Effective as of the Assignment Date, Assignor hereby assigns,
sells, transfers, sets over and delivers unto Assignee all of Assignor’s estate,
right, title and interest in and to the Leases and the Deposits and Assignee
hereby accepts such assignment. Notwithstanding the foregoing or anything to the
contrary contained herein, Assignor shall retain all rights, title and interest
in and to all rentals and other amounts payable by Tenants, and other rights and
claims against any parties, under the Leases for the period of time prior to the
Assignment Date.
2.    Assumption/Indemnity. Assignee hereby assumes the performance of all of
the terms, covenants and conditions imposed upon Assignor as landlord under the
Leases to the extent such terms, covenants and conditions first accrue and are
applicable to periods from and after the Assignment Date. Assignee shall
indemnify, defend, protect and hold harmless Assignor against and in respect of
any and all losses, damages, penalties, costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by Assignor with respect to any failure
by Assignee to perform its obligations and duties arising under the Leases to
the extent such obligations and duties first accrue and are applicable to
periods from and after the Assignment Date.
3.    Further Assurances/Indemnity. Assignor hereby covenants that Assignor
will, at any time and from time to time upon written request therefor, execute
and deliver to Assignee, Assignee’s successors, nominees or assigns, such
documents as Assignee or they may reasonably request in order to fully assign
and transfer to and vest in Assignee or Assignee’s successors, nominees and
assigns the Leases and the Deposits. Assignor shall indemnify, defend, protect
and hold harmless Assignee and its successors and assigns, against and in
respect of any and all

 
 
EXHIBIT D
 
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Agreement of Purchase and Sale
 
 
-1-
 
 

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losses, damages, penalties, costs and expenses (including reasonable attorneys’
fees and expenses) incurred by Assignee with respect to any failure by Assignor
to pay or to perform its obligations and duties arising under the Leases to the
extent such obligations and duties first accrue and are applicable to periods
prior to the Assignment Date. Notwithstanding anything to the contrary set forth
herein, the foregoing indemnities by Assignee and Assignor shall not be subject
to the survival period set forth in Section 11.11 of the Agreement.
4.    Attorney’s Fees. In the event of the bringing of any action or suit by a
party hereto against another party hereunder by reason of any breach of any of
the covenants, conditions, agreements or provisions on the part of the other
party arising out of this Assignment, then in that event the prevailing party
shall be entitled to have and recover of and from the other party all costs and
expenses of the action or suit, including reasonable attorneys’ fees.
5.    Counterparts. This Assignment may be executed in counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute
one and the same instrument.
6.    Successors. This Assignment shall be binding upon and inure to the benefit
of the successors, assignees, personal representatives, heirs and legatees of
all the respective parties hereto.
7.    Governing Law. This Assignment shall be governed by, interpreted under,
and construed and enforceable in accordance with, the laws of the State of
Washington.
[SIGNATURES ON FOLLOWING PAGE]

 
 
EXHIBIT D
 
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Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment as of the day and year first written above.
“ASSIGNOR”    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation

By:
 
Name:
 
Title:
 
 
 
 
 
 

“ASSIGNEE”
    
KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer

 
 
EXHIBIT D
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-3-
 
 

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EXHIBIT E
OWNER’S AFFIDAVIT
AFFIDAVIT AND INDEMNITY BY OWNER - Extended Coverage Policies
WHEREAS the undersigned Affiant (if more than one, herein collectively called
the Affiant) is the owner of the land (the Land) described in that certain
Commitment for Title Insurance issued by Commonwealth Land Title Insurance
Company (the Company) under No. ___________ (the Commitment),
AND WHEREAS, the Proposed Insured(s) under said Commitment is/are requesting the
Company to issue its Policy or Policies with Extended Coverage, and to delete
therefrom the General Exceptions relating to rights or claims of parties in
possession, and statutory lien rights for labor or materials, special assessment
and utility charges,
AND WHEREAS the Affiant acknowledges that the Company would refrain from issuing
said Policy or Policies without showing said General Exceptions in the absence
of the representations, agreements and undertakings contained herein.
Nothing contained herein shall be construed so as to obligate the Company to
issue said Policy or Policies without showing said General Exceptions. However,
should the Company do so, it will do so in part in reliance upon the
undertakings of the undersigned Affiant. The issuance of the Policy or Policies
shall be the consideration for the undertakings contained herein.
AFFIDAVIT
NOW THEREFORE, the Affiant, being first duly sworn, deposes and says that:
1.
Said Land is owned by the Affiant or an entity with which the Affiant is
affiliated, and the ownership thereof has been peaceable and undisturbed.

2.
There are no oral or written leases, tenancies or other occupancies except
(attach list or rent roll, if necessary, or attach copies of any written
agreements; if none, state “None”): See attached rent roll.

3.
There are no rights of first refusal or options to purchase all or any portion
of said land contained within any leases or other documents except: (if none,
state “None”): None.

4.
Other than contracts that will be paid by Affiant (and which contracts are
described on Schedule 1 attached hereto), there are no contracts for the making
of repairs or for new construction on said Land or for the services of
architects, engineers or surveyors, nor are there any unpaid bills or claims for
labor or services performed or material furnished or delivered during the last
six (6) months for alterations, repair work or new construction on said Land,
including site preparation, soil tests, site surveys, demolition, etc., except
those that will be paid by Affiant (and which work is described on Schedule 1
attached hereto).

5.
Neither the Affiant nor any principal of the Affiant has filed a petition for
bankruptcy, which action is pending, nor is Affiant a party to any pending
action, nor has Affiant been served with a summons and complaint nor received
any notice of any action which is pending against Affiant, except (if none,
state “None”): None.

 
 
EXHIBIT E
 
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Agreement of Purchase and Sale
 
 
-1-
 
 

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6.
There are no outstanding service, installation, connection, tap, capacity or
construction charges for sewer, water, electricity, natural gas or other
utilities, or garbage collection and disposal. Any such charges which may arise
prior to the effective date of the Policy of Policies will be paid in full by
the Affiant.

7.
There are no unpaid special assessments for sewer, water, road or other local
improvement districts, or taxes, except as shown in said Commitment for Title
Insurance.

8.
The Affiant has received no notice and has no knowledge of any proceedings which
would result in an assessment against the Land.

9.
The parties signing this Affidavit are doing so in their corporate
representative capacity and shall have no personal obligations relating to the
statements made herein.

The Affiant hereby agrees (1) to indemnify, protect, defend and save harmless
the Company from and against any and all loss, costs, damages, and attorney’s
fees it may suffer, expend or incur under or by reason, or in consequence of or
growing out of any such matters not identified in the above affidavit, and (2)
to defend at the Affiant’s own costs and charges in behalf of and for the
protection of the Company and of any parties insured or who may be insured
against loss by it under said Policy or Policies (but without prejudice to the
right of the Company to defend at the expense of the Affiant if it so elects)
any suit, action or proceeding in which any such matters may be asserted or
attempted to be asserted, established or enforced with respect to said Land.
IN WITNESS WHEREOF, the undersigned has/have executed this agreement this ____
day of ____________, 2012.
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
By:
 
Name:
 
Title:
 
 
 
 
 
 

STATE OF
 
)
 
 
)
ss.
COUNTY OF
 
)
 
 
 
 
 
 

I certify that I know or have satisfactory evidence that the persons appearing
before me and making this acknowledgment are the persons whose true signatures
appear on this document.

On this ____ day of ___________, 2012, before me personally appeared
______________________, to me known to be the ______________________ of UNIGARD
INSURANCE COMPANY, 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/she was authorized to execute said instrument and
that the seal affixed, if any, is the corporate seal of said corporation.

 
 
EXHIBIT E
 
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Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

WITNESS my hand and official seal hereto affixed the day and year first above
written.
 
 
 
 
 
 
 
 
Notary Public in and for the State of
 
,
 
 
My Commission expires:
 
 
 
 
 
 
[Type or Print Notary Name]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
EXHIBIT E
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-3-
 
 

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EXHIBIT F
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
This Assignment and Assumption of Contracts (the “Assignment”) is made and
entered into as of this ____ day of __________________, 2012 (the “Assignment
Date”), by and between UNIGARD INSURANCE COMPANY, a Wisconsin corporation
(“Assignor”), and KBS SOR 156TH AVENUE NORTHEAST, LLC, a Delaware limited
liability company (“Assignee”), with reference to the following facts.
R E C I T A L S:
A.    Assignor and Assignee entered into that certain Agreement of Purchase and
Sale and Joint Escrow Instructions with an Effective Date of ___________, __,
2012 (the “Purchase Agreement”), pursuant to which Assignor agreed to sell to
Assignee, and Assignee agreed to purchase from Assignor the Property.
Capitalized terms used herein and not separate defined have the meanings
ascribed to them in the Purchase Agreement.
B.    Assignee has acquired fee title to the Real Property from Assignor on the
Assignment Date. Assignor now desires to assign and transfer to Assignee all of
Assignor’s rights and interests in, to and under the Contracts, as hereinafter
defined.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
1.    Assignment and Assumption. Effective as of the Assignment Date, Assignor
hereby grants, transfers, conveys, assigns and delegates to Assignee all of its
rights and interests of Assignor in, to and under the contracts that are set
forth in Schedule 1 attached hereto and made a part hereof (“Contracts”);
provided, however, such assignment, transfer and sale shall not include any
rights or claims arising prior to the Assignment Date which Assignor may have
against any party to the Contracts. Assignee hereby accepts such assignment and
delegation by Assignor and agrees to fully perform and assume all the
obligations of Assignor under the Contracts to the extent such obligations first
accrue and are applicable to periods from and after the Assignment Date.
2.    No Warranties. Assignee does hereby confirm, agree and covenant with
Assignor, that, except for Assignor’s representations and warranties set forth
in the Purchase Agreement and in the Other Documents, Assignor is transferring
each of the Contracts to Assignee (to the extent the terms of any of the
Contracts do not limit or restrict such right) without any warranty of any kind
or nature. This Assignment shall not be construed as a representation or
warranty by Assignor as to the transferability or enforceability of the
Contracts, and Assignor shall have no liability to Assignee in the event that
any or all of the Contracts (a) are not transferable to Assignee or (b) are
canceled or terminated by reason of this Assignment or any acts of Assignee.
3.    Dispute Costs. In the event of any dispute between Assignor and Assignee
arising out of the obligations of the parties under this Assignment or
concerning the meaning or

 
 
EXHIBIT F
 
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Agreement of Purchase and Sale
 
 
-1-
 
 

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interpretation of any provision contained herein, the losing party shall pay the
prevailing party’s costs and expenses of such dispute, including, without
limitation, reasonable attorneys’ fees and costs. Any such attorneys’ fees and
other expenses incurred by either party in enforcing a judgment in its favor
under this Assignment shall be recoverable separately from and in addition to
any other amount included in such judgment, and such attorneys’ fees obligation
is intended to be severable from the other provisions of this Assignment and to
survive and not be merged into any such judgment.
4.    Counterparts. This Assignment may be executed in counterparts, each of
which shall be deemed an original, and all of which shall taken together be
deemed one document.
5.    Successors. This Assignment and the provisions hereof shall inure to the
benefit of and be binding upon the parties to this Assignment and their
respective successors, heirs and permitted assigns.
6.    No Third Party Beneficiaries. Except as otherwise expressly set forth
herein, Assignor and Assignee do not intend, and this Assignment shall not be
construed, to create a third-party beneficiary status or interest in, nor give
any third-party beneficiary rights or remedies to, any other person or entity
not a party to this Assignment.
7.    Governing Law. This Assignment shall be governed by, interpreted under,
and construed and enforceable in accordance with, the laws of the State of
Washington.
[SIGNATURES ON FOLLOWING PAGE]

 
 
EXHIBIT F
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
Assignment Date.
“ASSIGNOR”    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation

By:
 
Name:
 
Title:
 
 
 
 
 
 

ASSIGNEE:

KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer

 
 
EXHIBIT F
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-3-
 
 

--------------------------------------------------------------------------------

EXHIBIT G
BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, UNIGARD INSURANCE COMPANY, a Wisconsin corporation
(“Seller”), does hereby GRANT, SELL, CONVEY, TRANSFER AND DELIVER to KBS SOR
156TH AVENUE NORTHEAST, LLC, a Delaware limited liability company (“Buyer”),
without any warranty of any kind, any and all of Seller’s rights, title and
interests in and to the personal property (the “Personal Property”) described on
Schedule 1; provided, however, such transfer, assignment and sale shall not
include any rights or claims arising prior to the date hereof which Seller may
have against any person with respect to such Personal Property.
From and after the date of this Bill of Sale, it is intended by the parties that
Buyer and its successors and assigns shall have the right to use, have, hold and
own the Personal Property forever. This Bill of Sale may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
taken together be deemed one document. Seller and Buyer agree that the delivery
of an executed copy of this Bill of Sale by facsimile shall be legal and binding
and shall have the same full force and effect as if an original executed copy of
this Bill of Sale had been delivered.
Seller has not made and does not make any express or implied warranty or
representation of any kind whatsoever with respect to the Personal Property,
including but not limited to: merchantability of the Personal Property or its
fitness for any particular purpose; the design or condition of the Personal
Property; the quality or capacity of the Personal Property; workmanship or
compliance of the Personal Property with the requirements of any law, rule,
specification or contract pertaining thereto; patent infringement or latent
defects. Buyer accepts the Personal Property on an “AS IS, WHERE IS” basis.
Notwithstanding the foregoing, Seller represents to Buyer that Seller has good
and marketable title to the Personal Property free from any liens, encumbrances
or security interests of any kind or nature.
Buyer on behalf of itself and its officers, directors, employees, partners,
agents, representatives, successors and assigns hereby agrees that in no event
or circumstance shall Seller or its partners, members, trustees, employees,
representatives, officers, related or affiliated entities, successors or assigns
have any personal liability under this Bill of Sale, or to any of Buyer’s
creditors, or to any other party in connection with the Personal Property or the
Property.
This Bill of Sale shall be governed by, interpreted under, and construed and
enforceable in accordance with, the laws of the State of Washington.
[SIGNATURES ON FOLLOWING PAGE]

 
 
EXHIBIT G
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Bill of Sale has been executed as of this ___ day of
______________, 2012.
SELLER:
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation

By:
 
Name:
 
Title:
 
 
 
 
 
 

BUYER:

KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer

 
 
EXHIBIT G
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

SCHEDULE 1 TO EXHIBIT G
LIST OF PERSONAL PROPERTY
Personal property to be conveyed to Buyer:
1.
(1) Golf Cart
2.
A large inventory of tools, motors, and maintenance equipment (Hand tools,
ladders, power washers, saws, spare parts, etc.)
3.
(1) Linel card access security system (Hardware & Software)
4.
(1) Tracer Summit HVAC control system (Hardware & Software)
5.
(1) Power Logic electrical usage data monitoring system (Hardware & Software)
6.
Site trash compactor
7.
Diesel generator for Phase I Buildings (A, B, C, D)
8.
Diesel generator for Building B auxiliary AC unit
9.
Diesel generator for Building D-2
10.
Diesel back-up generator dedicated to Building E
11.
(2) John Deere 'Gator' utility vehicles
12.
Furnishings and artwork in lobby areas of Buildings D-2, G, and H.
13.
Exterior auxiliary cooling system dedicated to data center in Building E
14.
(3) Liebert auxiliary AC units in Building E
15.
Exercise equipment in Building D
16.
Aerobic exercise accessories in Building D
17.
Tenant Improvements as indicated on personal property tax listing for King
County
18.
Auxiliary split cooling system in Building A
19.
2000 Chevrolet cargo van
20.
Sound system and televisions in Building D workout areas
21.
Projectors and sound system in Building D-2 conference room
22.
Café equipment, café furniture and artwork located in Building C

 
 
SCHEDULE 1 TO
EXHIBIT G
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

EXHIBIT H
GENERAL ASSIGNMENT
This GENERAL ASSIGNMENT is made as of the ____ day of ___________________, 2012
(the “Assignment Date”), by UNIGARD INSURANCE COMPANY, a Wisconsin corporation
(“Assignor”), and KBS SOR 156TH AVENUE NORTHEAST, LLC, a Delaware limited
liability company (Assignee”).
Pursuant to that certain Agreement of Purchase and Sale and Joint Escrow
Instructions with an Effective Date of ___________ __, 2012 (the “Purchase
Agreement”), Assignee has this day acquired from Assignor the Property.
Capitalized terms used herein shall have the meanings ascribed to them in the
Purchase Agreement.
In consideration of the acquisition of the Property by Assignee and other good
and valuable consideration, the mutual receipt and legal sufficiency of which
are hereby acknowledged, the parties agree as follows:
1.    Assignment. Assignor hereby assigns, transfers and sets over unto
Assignee, without representation or warranty of any kind except for Seller’s
representations and warranties set forth in the Purchase Agreement and the Other
Documents, and Assignee hereby accepts from Assignor, any and all of Assignor’s
right, title and interest in and to (i) any intangible property used or useful
in connection with the operation and management of the Real Property, (ii) all
warranties and guaranties, including, without limitation, any contract rights
and warranties arising under construction contracts relating to the construction
of the Improvements (which shall be assigned on an exclusive basis) (the
“Warranties and Guaranties”), and (iii) all entitlements, consents,
authorizations, variances or waivers, licenses, permits and approvals and
certificates of occupancy from any governmental or quasi-governmental agency,
department, board, commission, bureau or other entity or instrumentality of any
nature relating to the Property (“Approvals”), provided, however, such transfer,
assignment and sale shall not include any rights or claims arising prior to the
Assignment Date which Assignor may have against any person with respect to the
Warranties and Guaranties and the Approvals.
2.    Dispute Costs. In the event of any dispute between Assignor and Assignee
arising out of the obligations of the parties under this Assignment or
concerning the meaning or interpretation of any provision contained herein, the
losing party shall pay the prevailing party’s costs and expenses of such
dispute, including, without limitation, reasonable attorneys’ fees and costs.
Any such attorneys’ fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Assignment shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys’ fees obligation is intended to be severable from the other
provisions of this Assignment and to survive and not be merged into any such
judgment.
3.    Counterparts. This Assignment may be executed in counterparts, each of
which shall be deemed an original, and all of which shall taken together be
deemed one document.

 
 
EXHIBIT H
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

4.    Survival. This Assignment and the provisions hereof shall inure to the
benefit of and be binding upon the parties to this Assignment and their
respective successors, heirs and permitted assigns.
5.    No Third Party Beneficiaries. Except as otherwise expressly set forth
herein, Assignor and Assignee do not intend, and this Assignment shall not be
construed, to create a third-party beneficiary status or interest in, nor give
any third-party beneficiary rights or remedies to, any other person or entity
not a party to this Assignment.
6.    Governing Law. This Assignment shall be governed by, interpreted under,
and construed and enforceable in accordance with, the laws of the State of
Washington.
[SIGNATURES ON FOLLOWING PAGE]

 
 
EXHIBIT H
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment as of the day and year first written above.
“ASSIGNOR”    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation

By:
 
Name:
 
Title:
 
 
 
 
 
 

“ASSIGNEE”    

KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer

 
 
EXHIBIT H
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-3-
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT H
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-4-
 
 

--------------------------------------------------------------------------------

EXHIBIT I
LIST OF LEASES

Tenant
Aditi Technologies
Lease Date
May 11, 2000
Amendments
First Amendment September 22, 2000; Second Amendment October 25, 2000; Third
Amendment August 10, 2007; Fourth Amendment November 15, 2007; Fifth Amendment
January 1, 2011; Sixth Amendment November 22, 2011
Address/Suite
2002 156th Ave. NE, Suite 200, Bellevue, WA 98007
 
 
Tenant
Advanced Micro Devices, Inc.
Lease Date
May 26, 2004
Amendments
First Amendment June 13, 2005; Second Amendment September 1, 2007
Sublease
Sublease dated October 30, 2009 with PhysioSonics, Inc. for 4,425 RSF
Address/Suite
2002 156th Ave. NE, Suites 150 and 300, Bellevue, WA 98007 and 2010 156th Ave.
NE, Suite 120, Bellevue, WA 98007
 
 
Tenant
EMC
Lease Date
May 10, 2000
Amendments
First Amendment April 26, 2004; Second Amendment May 15, 2008, Third Amendment
March 2011
Address/Suite
2010 156th Ave. NE, Suites 200 and 300, Bellevue, WA 98007 and 2002 156th Ave.
NE, Suite 100, Bellevue, WA 98007
 
 
Tenant
Hitachi Data Systems
Lease Date
May 26, 2010
Amendments
First Amendment April 10, 2012
Address/Suite
15803 NE 24th St., Bellevue, WA 98007
 
 
Tenant
HQ Global Workplace, LLC
Lease Date
May 24, 2007
Amendments
First Amendment November 30, 2011

 
 
EXHIBIT I
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

Address/Suite
2018 156th Ave., NE, Bellevue, WA 98007
 
 
Tenant
SUHRCO Management, Inc.
Lease Date
March 15, 2002
Amendments
First Amendment June 15, 2002; Second Amendment April 20, 2005; Third Amendment
August 10, 2010
Address/Suite
2010 156th Avenue, NE, Suite 100, Bellevue, WA 98007

LIST OF LICENSE AGREEMENTS
None

 
 
EXHIBIT I
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

EXHIBIT J
LIST OF SERVICE CONTRACTS
Vendor
Service
Convergint Technologies
Access Control
Thyssen Elevator
Elevator Maintenance Bldgs B, C, E
Otis Elevator
Elevator Maintenance Bldgs D-2, F, G, H
Chubb Fire and Security
Fire Alarm Monitoring
Trane
HVAC Controls
5Star5
Janitorial
Signature
Landscaping
CPI
Security
Onedo Nalco Company
Water Treatment (boilers)
SUHRCO
Property Management
Power Logic
Electrical Usage

 
 
EXHIBIT J
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

EXHIBIT K
LIST OF LEASING COSTS

Tenant
Suite
Outstanding TI Amount

Outstanding
Free Rent
EMC
Bldg G
$236,160.46*
 
EMC
Bldg G
$246,020.008*
 
EMC
Bldg G
 
** rent credit to EMC in an amount equal to the rent (Basic Rent and Operating
Costs) payable under the EMC lease for the Original Premises for the months of
January 1, 2014 – March 31, 2014
EMC
Bldg G
$134,000.00*
 
SUHRCO
Bldg G
$14,250.00*
 

*Amount outstanding on the date of this Agreement which is Seller’s
responsibility. May be reduced based on payments made to the indicated tenant,
in which event Seller shall provide notice to Buyer of the payment (together
with evidence of such payment), and the amounts set forth herein shall be
accordingly reduced.
** Rent Credit which will be Buyer’s responsibility.

 
 
EXHIBIT K
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

EXHIBIT L
ESCROW WIRING INSTRUCTIONS
Joy Eaton, Sr. Commercial Escrow Officer
Phone: (949) 724-3145 • Fax: (949) 271-5762
e-mail: joyeaton@ltic.com

Escrow Number:    09260009-JBE
 
Date: June 21, 2012
Property Address: QBE Corporate Center
 
Escrow Officer:
Joy Eaton

WIRE TRANSFER INSTRUCTIONS

The following information is provided to you, per your request, in order to send
a WIRE TRANSFER to
Commonwealth Land Title Insurance Company

Bank Name/Address:
Bank of America
275 Valencia Ave
Mail Code: CA7-701-02-66
Brea, CA 92823              
 
 
                                                                                
Phone Number:
(888) 715-1000 Ext.61774                 
BANK ROUTING Number:
026009593                                                            
CREDIT TO:
Commonwealth Land Title Insurance Company
Branch / Account Number:
(Branch 915) / 1257313887                 
For Further Credit to Escrow No:
09260009-JBE
Attention:
Joy Eaton

If you, or your banking institution have any questions, whatsoever, regarding
the wire transfer, please do not hesitate to contact us or our bank as named
above directly.

All information must be EXACT or a delay in your wired funds may occur, which
may also delay the closing of your escrow transaction. Neither Commonwealth Land
Title Insurance Company or the bank mentioned above will assume any liability
for delays in your wire due to incorrect information.

 
 
EXHIBIT L
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

EXHIBIT M
FORM OF LEASEBACK LEASE
OFFICE LEASE
This Office Lease (the "Lease"), dated as of the date set forth in Section 1 of
the Summary of Basic Lease Information (the "Summary"), below, is made by and
between KBS SOR 156TH AVENUE NORTHEAST, LLC, a Delaware limited liability
company ("Landlord"), and UNIGARD INSURANCE COMPANY, a Wisconsin corporation
("Tenant").

SUMMARY OF BASIC LEASE INFORMATION
 
TERMS OF LEASE
DESCRIPTION
1.
Date:
__________ __, 2012.
2.
Premises:

 
2.1 Building:
That certain office building consisting of two (2) above-ground stories and a
basement (the "Building") commonly known as "Building E" and located at 15800
Northup Way, Bellevue, Washington 98008.
 
 
 
 
2.2 Premises:
The entirety of the Building comprising approximately 67,378 rentable square
feet of space. An outline of the Premises is attached to this Lease as Exhibit
A-1.
 
 
 
 
2.3 Phase II:
That portion of the Project on which the Building is located and the immediately
surrounding areas of the Project pertaining thereto, consisting of 67,378
rentable square feet
 
 
 
 
2.4 Project:
The Building is part of the office project known as "Unigard Park" and located
at 2002-2018 156th Avenue NE, 15801-15805 NE 24th Street and 15800 Northup Way,
in the City of Bellevue, Washington, consisting of 326,237 rentable square feet,
as further set forth in Section 1.1.2 of this

- 1-

--------------------------------------------------------------------------------

 
 
Lease and currently depicted on Exhibit A-2 attached hereto.
3.
Lease Term
(Article 2):
 
 
3.1 Length of Term:
Ten (10) year initial term.
 
 
 
 
3.2 Lease Commencement Date:
__________ __, 2012.
 
 
 
 
3.3 Lease Expiration Date:
__________ __, 2012.
 
 
 
 
3.4 Option Term:
One (1) five (5) year option to renew, as more particularly set forth in Section
2.2 of this Lease.
4.
Base Rent (Article 3):
 
Lease Year
Annual
Base Rent
Monthly
Installment
of Base Rent
Annual
Rental Rate
per Rentable
Square Foot
1
$1,297,026.50
$108,085.54
$19.25 NNN
2
$1,335,937.20
$111,328.10
$19.83 NNN
3
$1,376,015.40
$114,667.95
$20.42 NNN
4
$1,417,295.80
$118,107.98
$21.03 NNN
5
$1,459,814.60
$121,651.21
$21.67 NNN
6
$1,503,609.00
$125,300.75
$22.32 NNN
7
$1,548,717.20
$129,059.76
$22.99 NNN
8
$1,595,178.70
$132,931.55
$23.68 NNN
9
$1,643,034.10
$136,919.50
$24.39 NNN
10
$1,692,325.10
$141,027.09
$25.12 NNN
 
 
 
 
5.
Operating Expenses and Tax Expenses
(Article 4):
This is a “TRIPLE NET” lease and, as such, the provisions contained in this
Lease are intended to pass on to Tenant and reimburse Landlord for the costs and
expenses reasonably associated with this Lease and the Project, and Tenant's
operation therefrom. To the extent such costs and expenses payable by Tenant
cannot be charged directly to, and paid by, Tenant, such costs and expenses
shall be paid by Landlord but reimbursed by Tenant as Additional Rent.
 
 
 
 
6.
Tenant's Share
(Article 4)
Of the Building: 100%
Of Phase II: 100%
Of the Project: 20.653%.

- 2-

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7.
Permitted Use
(Article 5):
Tenant shall use the Premises solely for general, executive, and administrative
office uses consistent with a first class office building in Bellevue,
Washington and otherwise in accordance with the terms of this Lease (the
"Permitted Use").
 
 
 
 
8.
Security Deposit
(Article 21):
None.
 
 
 
 
9.
Parking Pass Ratio
(Article 28):
Two hundred seventy (270) unreserved parking passes), of which (a) approximately
two hundred twenty (220) passes shall be for the use of unreserved non-exclusive
common surface parking (the "Surface Parking Passes"), and (b) up to fifty (50)
passes shall be for the use of unreserved non-exclusive covered parking (the
"Covered Parking Passes"). Except for any taxes imposed by any governmental
authority in connection with the use of any such parking passes by Tenant or the
use of the parking facility by Tenant, Tenant shall not be required to pay any
parking charges to Landlord during the initial Lease Term in connection with the
Surface Parking Passes, and Tenant shall pay to Landlord an amount equal to
Forty-Five and 00/100 Dollars ($45.00) per month per pass in connection with
each of Tenant's Covered Parking Passes during the initial Lease Term (the
"Covered Parking Charge"). Such Covered Parking Charge shall increase by three
percent (3%) on each anniversary of the Lease Commencement Date occurring during
the initial Lease Term. Tenant shall pay the prevailing rate charged for such
Covered Parking during any renewals or extensions of the Lease Term (including,
the Option Terms). Notwithstanding the foregoing, if Landlord determines that
Tenant's use of any of the fifty (50) Covered Parking Spaces cause or will cause
Landlord to be in violation of any parking requirements under other existing or
new leases or applicable law

- 3-

--------------------------------------------------------------------------------

 
 
with respect to the Building or other portion of the Project, the Landlord may
deliver written notice to Tenant advising Tenant of the number of spaces that
Landlord must take back to avoid or eliminate such conflict and requesting
Tenant elect to either (i) reduce the number of Covered Parking Spaces used by
Tenant by the number set forth in Landlord's notice, or (ii) reduce the number
of Surface Parking Passes used by Tenant by the number set forth in Landlord's
notice (i.e., retain the Covered Parking Spaces but reduce the number of Surface
Parking Passes below 220 as applicable). In no event shall Tenant receive less
than 220 total parking spaces (whether Covered Parking Spaces or Surface Parking
Passes) nor shall any reduction in parking spaces occur until six (6) months
after Landlord's notice to Tenant. In the event Tenant does not make such an
election, Tenant shall be deemed to have elected to forego the applicable number
of parking spaces.

- 4-

--------------------------------------------------------------------------------

10.
Address of Tenant
(Section 29.18):
Unigard Insurance Company c/o QBE Americas, Inc. One General Drive Sun Prairie,
Wisconsin 53596
Attention: Mr Dennis Glinski Vice President - Corporate real Estate and
Facilities QBE North America

With a copy to:

QBE Americas, Inc., One General Drive Sun Prairie, Wisconsin 53596
Attention: Judith L. Zelhofer, Esq. Corporate Legal Department
 
 
 
 
11.
Address of Landlord
(Section 29.18):
KBS SOR 156th Avenue Northeast, LLC c/o KBS Capital Advisors, LLC 620 Newport
Center Drive, Suite 1300 Newport Beach, CA 92660
Attention: Jim Chicoucas, Esq.
Telephone: (949) 417-6555
E-Mail: jchiboucas@kbsrealty.com

With a copy to:

Mayer Brown LLP
700 Louisiana St., Ste 3400
Houston, TX 77002
Attn: Gerami Granello, Esq.
Telephone: (71) 238-2624
E-Mail: ggranello@mayerbrown.com
 
 
 
 
12.
Brokers
(Section 29.24):

Representing Tenant:

None
Representing Landlord:

None

- 5-

--------------------------------------------------------------------------------

Subject to all of the terms, provisions, covenants and conditions of this Lease,
and in consideration of the mutual covenants, obligations and agreements
contained in this Lease, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Landlord and Tenant agree as
follows:
A G R E E M E N T:
ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1.1    Premises, Building, Project and Common Areas.
1.1.1    The Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises described in Section 2.2 of the Summary (the
"Premises"). A legal description of the "Project" (as that term is defined in
Section 1.1.2 below) is attached hereto as Exhibit A and made a part hereof. The
location of the "Building" (as that term is defined in Section 1.1.2 below) is
shown on Exhibit A-2 attached hereto and made a part hereof. The outline of the
Premises is set forth in Exhibit A-1 attached hereto and the Premises has the
number of rentable square feet as set forth in Section 2.2 of the Summary.
Landlord and Tenant hereby acknowledge and agree that (i) Tenant is accepting
the Premises in its presently existing, "as is" condition, (ii) Landlord shall
not be obligated to provide or pay for any improvement work or services related
to the improvement of the Premises (e.g., improvement allowances, turn-key
improvements or any other alterations), and (iii) Tenant also acknowledges that
neither Landlord nor any agent of Landlord has made any representation or
warranty regarding the condition of the Premises, the Building or the Project or
with respect to the suitability of any of the foregoing for the conduct of
Tenant's business. In addition, Landlord shall have no obligation to deliver
possession of the Premises to Tenant because Tenant is already occupying the
Premises.
1.1.2    The Building and the Project. The Premises comprises the entirety of
the building set forth in Section 2.1 of the Summary (the "Building"). The
Building is part of an office project located at 2002-2018 156th Avenue NE,
15801-15805 NE 24th Street and 15800 Northup Way, Bellevue, Washington known as
"Unigard Park". The term "Project," as used in this Lease, shall mean (i) the
Building and the Common Areas, (ii) the land (which is improved with
landscaping, parking facilities and other improvements) upon which the Building
and the Common Areas are located, (iii) the other office buildings located
within the confines of Unigard Park and the land upon which such office
buildings are located (the "Adjacent Buildings"), and (iv) at Landlord's
discretion, any additional adjacent real property, areas, land, buildings or
other improvements added thereto.
1.1.3    Common Areas. Tenant shall have the non-exclusive right to use in
common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for

- 6-

--------------------------------------------------------------------------------

use in common by Landlord, Tenant and any other tenants of the Project (such
areas are collectively referred to herein as the "Common Areas"). The Common
Areas shall be maintained and operated by Landlord and the use thereof shall be
subject to such reasonable rules, regulations and restrictions as Landlord may
make from time to time, provided that such rules, regulations and restrictions
do not unreasonably interfere with the rights granted to Tenant under this Lease
and the permitted use granted under Section 5.1, below. Landlord shall provide
Tenant with at least ten (10) days prior written notice of any changes to the
rules, regulations and restrictions applicable to the Common Areas. Landlord
reserves the right to close temporarily, make alterations or additions to, or
change the location of elements of the Project and the Common Areas; provided
that no such changes shall be permitted which materially interfere with Tenant’s
use of or operation within the Premises. Except when and where Tenant's right of
access is specifically excluded in this Lease, Tenant shall have the right of
access to the Premises, the Building, and the Project parking facility
twenty-four (24) hours per day, seven (7) days per week during the "Lease Term,"
as that term is defined in Section 2.1, below.
1.2    Rentable Square Feet of Premises and Building. On the Commencement Date,
the Premises will be deemed to be 67,378 rentable square feet, comprising the
entirety of the Building, Phase II shall be deemed to be 67,378 rentable square
feet, and the Project shall be deemed to be 326,237 rentable square feet.
ARTICLE 2
LEASE TERM
2.1    Lease Term. The provisions of this Lease shall be effective as of the
date of this Lease. The term of this Lease (the "Lease Term") shall be as set
forth in Section 3.1 of the Summary, shall commence on the date set forth in
Section 3.2 of the Summary (the "Lease Commencement Date"), and shall terminate
on the date set forth in Section 3.3 of the Summary (the "Lease Expiration
Date") unless this Lease is sooner terminated or further extended as hereinafter
provided. For purposes of this Lease, the term "Lease Year" shall mean each
consecutive twelve (12) month period during the Lease Term; provided, however,
that the first Lease Year shall commence on the Lease Commencement Date and end
on the last day of the month in which the first anniversary of the Lease
Commencement Date occurs and the second and each succeeding Lease Year shall
commence on the first day of the next calendar month; and further provided that
the last Lease Year shall end on the Lease Expiration Date.
2.2    Option Term.
2.2.1    Option Rights. Tenant shall have one (1) option (the “Extension
Option”) to extend the Lease Term for a period of five (5) years (the "Option
Term"). Tenant shall exercise the Extension Option by written notice to Landlord
which must be received by Landlord no later than 5:00 p.m. eastern time on the
date twelve (12) months prior to the Lease Expiration Date, but no earlier than
fifteen (15) months prior to the Lease Expiration Date.
2.2.2     Option Rent.
(a)    The Rent payable by Tenant during the Option Term (the "Option Rent")
shall be equal to the "Market Rent," as set forth below. Within thirty (30) days
after the date of

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Tenant's notice (the "Determination Date") Landlord shall compute the "Extension
Rate" which shall be Market Rent as provided below and notify Tenant in writing
of its determination of the Market Rate. All other terms of this Lease
(excluding this Extension Option) shall apply during the Extension Term. If
Tenant does not agree with Landlord’s initial determination of the Market Rate,
and Landlord and Tenant shall fail to agree upon the Market Rent within sixty
(60) days after the Determination Date, then Landlord and Tenant each shall give
notice to the other setting forth their respective determination of the Market
Rent (the "Determination Notice"). Subject to the provisions of Section 2.2.2(b)
below, the parties shall then apply to the American Arbitration Association or
any successor thereto for the designation of an arbitrator satisfactory to both
parties to render a final determination of the Market Rent. The arbitrator shall
be a real estate appraiser or consultant who shall have at least fifteen (15)
years continuous experience in the business of appraising or is knowledgeable in
rental rates and lease transactions in the Greater Bellevue-Kirkland Area. The
"Greater Bellevue-Kirkland Area" shall mean the City of Bellevue, Washington,
and the City of Kirkland, Washington. The arbitrator shall conduct such hearings
and investigations as the arbitrator shall deem appropriate and shall, within
thirty (30) days after having been appointed, choose one of the determinations
set forth in either Landlord's or Tenant's Determination Notice, and that choice
by the arbitrator shall be binding upon Landlord and Tenant. Each party shall
pay its own counsel fees and expenses, if any, in connection with any
arbitration under this Section 2.2.2(a), and the parties shall share equally all
other expenses and fees of any such arbitration. The determination rendered in
accordance with the provisions of this Section 2.2.2(a) shall be final and
binding in fixing the Market Rent. The arbitrator shall not have the power to
add to, modify, or change any of the provisions of this Lease.
(b)    In the event that the determination of the Market Rent set forth in
Landlord's and Tenant's Determination Notices shall differ by less than five
(5%) percent per rentable square foot per annum for each year during the
Extension Term, then the Market Rent shall not be determined by arbitration, but
shall instead be set by taking the average of the determinations set forth in
Landlord's and Tenant's Determination Notices. Only if the determinations set
forth in Landlord's and Tenant's Determination Notices shall differ by more than
five (5%) percent per rentable square foot per annum for any year during the
Extension Term shall the actual determination of Market Rent be made by an
arbitrator as set forth in Section 2.2.2(a) above.
(c)    If for any reason the Market Rent shall not have been determined prior to
the commencement of the Extension Term, then, until the Market Rent and,
accordingly, the Base Rent, shall not have been finally determined, the Base
Rent shall remain the same as payable during the last year of the preceding Term
of the Lease. Upon final determination of the Market Rent, an appropriate
adjustment to the Base Rent shall be made reflecting such final determination,
and Landlord and Tenant, as the case may be, shall promptly refund or pay to the
other any overpayment or deficiency, as the case may be, in the payment of Base
Rent from the commencement of the Extension Term to the date of such final
determination.
(d)    "Market Rent" shall mean the market Base Rent and Additional Rent rate
for the Premises, based on renewing tenancies (for a term comparable to the time
period in question) covering office space of comparable size and quality to the
Premises in Comparable Buildings (as defined below) in comparable locations in
the Greater Bellevue-Kirkland Area,

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taking into account all pertinent factors. The term "Comparable Buildings" shall
mean other first-class single-tenant office buildings which are comparable to
the Building in terms of age (based upon the date of completion of construction
or major renovation as to the building containing the portion of the Premises in
question), quality of construction, level of services and amenities (including
the type (e.g., surface, covered, subterranean) and amount of parking), size and
appearance.
ARTICLE 3
BASE RENT
Tenant shall pay, without prior notice or demand, to Landlord's agent at the
management office of the Project (or, at Landlord's option, at such other place
as Landlord may from time to time designate in writing not less than fifteen
(15) days prior to the date on which such payment is due), by a check for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, base rent ("Base Rent") as set forth in
Section 4 of the Summary, payable in equal monthly installments as set forth in
Section 4 of the Summary in advance on or before the first day of each and every
calendar month during the Lease Term. If any payment of Rent is for a period
which is shorter than one month, the Rent for any such fractional month shall
accrue on a daily basis during such fractional month and shall total an amount
equal to the product of (i) a fraction, the numerator of which is the number of
days in such fractional month and the denominator of which is the actual number
of days occurring in such calendar month, and (ii) the then-applicable Monthly
Installment of Base Rent. All other payments or adjustments required to be made
under the terms of this Lease that require proration on a time basis shall be
prorated on the same basis.
ARTICLE 4
ADDITIONAL RENT
4.1    General Terms. In addition to paying the Base Rent specified in Article 3
of this Lease, Tenant shall pay "Tenant's Share" of the annual "Direct
Expenses," as those terms are defined in Section 6 of the Summary and Section
4.2.1, respectively, of this Lease. Landlord shall reasonably determine whether
an item, category or type of Direct Expense applies to the Building, Phase II or
the Project and shall charge the Tenant accordingly, with such applicable
“Tenant’s Share” being used (Tenant shall pay 100% of any reasonable costs
directly allocable to the Tenant’s Premises and/or the Building). If Landlord
acquires additional real property not shown as part of the Project and if
Landlord makes portions of such additional real property available as Common
Areas, then the total Direct Expenses shall also include all Direct Expenses
with respect to such additional real property, subject to an appropriate
adjustment of the applicable Tenant’s Share. Such payments by Tenant, together
with any and all other amounts payable by Tenant to Landlord pursuant to this
Lease, are hereinafter collectively referred to as the "Additional Rent," and
the Base Rent and the Additional Rent are herein collectively referred to as
"Rent." All amounts due under this Article 4 as Additional Rent shall be payable
for the same periods and in the same manner as the Base Rent. Without limitation
on other obligations of Tenant which survive the expiration of the Lease Term,
the obligations of Tenant

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to pay the Additional Rent provided for in this Article 4 shall survive the
expiration of the Lease Term.
4.2    Definitions of Key Terms Relating to Additional Rent. As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:
4.2.1    "Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."
4.2.2    "Expense Year" shall mean each calendar year in which any portion of
the Lease Term falls, through and including the calendar year in which the Lease
Term expires.
4.2.3    "Operating Expenses" shall mean all expenses, costs and amounts of
every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof, in accordance with sound real estate management and accounting
principles, consistently applied. Without limiting the generality of the
foregoing, Operating Expenses shall specifically include any and all of the
following: (i) the cost of supplying all utilities (but excluding (y) the cost
of electricity directly paid for by Tenant pursuant to the terms of Section 6.2
of this Lease, and (z) the cost of all electricity consumed in the other
buildings located within the Project, as opposed to exterior and Common Area
electrical consumption), the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of complying with laws as well as the cost
of licenses, certificates, permits and inspections and the cost of contesting
any governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with a governmentally mandated transportation system
management program or similar program; (iii) the cost of all insurance carried
by Landlord in connection with the Project; (iv) the cost of landscaping,
relamping, and all supplies, tools, equipment and materials used in the
operation, repair and maintenance of the Project, or any portion thereof; (v)
costs incurred in connection with the parking areas servicing the Project; (vi)
fees and other costs, including management fees, consulting fees, legal fees and
accounting fees, of all contractors and consultants in connection with the
management, operation, maintenance and repair of the Project; (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space; (viii) wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons (other than persons
generally considered to be higher in rank than the position of "Asset Manager")
engaged in the operation, maintenance and security of the Project; (ix) costs
under any instrument pertaining to the sharing of costs by the Project; (x)
operation, repair, maintenance and replacement of all systems and equipment and
components thereof of the Building; (xi) the cost of janitorial services to the
Building and Common Areas of the Project (but excluding (y) the cost of
janitorial services directly paid for by Tenant pursuant to the terms of Section
6.5 of this Lease, and (z) the cost of janitorial services provided to tenant
spaces in the other buildings located within the Project), alarm, security and
other services, replacement of wall and floor coverings, ceiling tiles and
fixtures in common areas, maintenance and replacement of curbs and walkways,
repair to roofs and re-roofing, and costs incurred in connection with the
maintenance and upkeep of the fitness room and its locker rooms; (xii)
amortization of the cost of acquiring or the rental expense of personal property
used in the maintenance, operation and repair of the Project, or any portion
thereof (which

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amortization calculation shall include interest at the "Amortization Rate," as
that term is defined below); (xiii) the cost of capital improvements or other
costs incurred in connection with the Project as reasonably amortized by
Landlord at the interest rate of eight percent (8%) per annum (the "Amortization
Rate") (A) which are intended to effect economies in the operation or
maintenance of the Project, or any portion thereof; provided, however, the same
shall only be includable to the extent such costs do not exceed the net
reduction of Operating Expenses, (B) that are required to comply with present or
anticipated conservation programs, (C) which are replacements or modifications
of nonstructural items located in the Common Areas required to keep the Common
Areas in good order or condition, or (D) that are required under any
governmental law or regulation by a federal, state or local governmental agency;
provided, however, that any capital expenditure shall be shall be amortized with
interest at the Interest Rate over its useful life as Landlord shall reasonably
determine in accordance generally accepted accounting principles; (xiv) costs,
fees, charges or assessments imposed by, or resulting from any mandate imposed
on Landlord by, any federal, state or local government for fire and police
protection, trash removal, community services, or other services which do not
constitute "Tax Expenses" as that term is defined in Section 4.2.4, below; (xv)
payments under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs by the
Project; and (xvi) costs and expenses relating to the installation, operation or
maintenance by Landlord of any specialty facility in the Project, which is
available for use by Tenant and its employees, such as a cafeteria, restaurant,
health club, fitness center, or theatre, however, any such costs and expenses
attributable to a particular specialty facility in a particular calendar year
shall be offset by any revenue derived from such specialty facility during such
calendar year (security, insurance, cleaning of lobbies, and other similar
“Common Area” costs that are attributable to the specialty facilities as part of
the general operation, ownership and maintenance of the Project are expressly
included within Operating Expenses and shall not be subject to any offset).
Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses
shall not, however, include:
4.2.3.1.1    costs, including marketing costs, legal fees, space planners' fees,
advertising and promotional expenses, and brokerage fees incurred in connection
with the original construction or development, or original or future leasing of
the Project, and costs, including permit, license and inspection costs, incurred
with respect to the installation of improvements made for new tenants initially
occupying space in the Project after the Lease Commencement Date or incurred in
renovating or otherwise improving, decorating, painting or redecorating vacant
space for tenants or other occupants of the Project including, tenant
allowances, leasehold improvements and other tenant concessions;
4.2.3.1.2    except as set forth in items (xii), (xiii), and (xiv) above,
amortization, depreciation, interest and principal payments on mortgages and
other debt costs, if any, points, fees, penalties, and interest;
4.2.3.1.3    costs associated with the acquisition, sale or financing of the
fee, ground lease, air rights or development rights with respect to the Project
or any portion thereof;

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4.2.3.1.4    costs for which Landlord is reimbursed by any tenant or occupant of
the Project or by insurance by its carrier or any tenant's carrier or by anyone
else (except to the extent of customary and commercially reasonable
deductibles), and the cost of all electricity consumed in the other buildings
located within the Project (as opposed to entryway and Common Area electrical
consumption);
4.2.3.1.5    cost of any repair made by Landlord because of the total or partial
destruction of the Project or the condemnation of a portion of the Project,
other than the cost of customary and commercially reasonable deductibles;
4.2.3.1.6    any bad debt loss, rent loss, or reserves for bad debts or rent
loss;
4.2.3.1.7    cost of overtime incurred due to Landlord in curing its defaults;
4.2.3.1.8    costs associated with the operation of the business of the
corporate entity which constitutes Landlord, as the same are distinguished from
the costs of operation of the Project (which shall specifically include, but not
be limited to, accounting costs associated with the operation of the Project).
Costs associated with the operation of the business of the entity which
constitutes Landlord include costs of corporate accounting and legal matters,
costs of defending any lawsuits with any mortgagee (except as the actions of
Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or
hypothecating any of Landlord's interest in the Project, and costs incurred in
connection with any disputes between Landlord and its employees, between
Landlord and Project management, or between Landlord and other tenants or
occupants, and Landlord's general corporate overhead and general and
administrative expenses;
4.2.3.1.9    the wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such wages
and benefits are prorated to reflect time spent on operating and managing the
Project vis-a-vis time spent on matters unrelated to operating and managing the
Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the
level of asset manager or to a partner, member or officer of Landlord;
4.2.3.1.10    except as set forth in items (xii), (xiii), and (xiv) above, the
cost of structural repairs or replacements, including roof and
subsurface/foundation work, alterations and additions which, under generally
accepted accounting principles, are considered capital improvements or
replacements;
4.2.3.1.11    amounts paid as ground rental for the Project by Landlord;
4.2.3.1.12    any increase in insurance premiums to the extent that such
increase is caused or attributable to the use, occupancy or act of another
tenant or Landlord;

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4.2.3.1.13    overhead and profit increment paid to Landlord or to subsidiaries
or affiliates of Landlord for services in the Project to the extent the same
exceeds the costs of such services rendered by qualified, first-class
unaffiliated third parties on a competitive basis;
4.2.3.1.14    any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord;
4.2.3.1.15    rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment which if purchased the cost
of which would be excluded from Operating Expenses as a capital cost, except
equipment not affixed to the Project which is used in providing janitorial or
similar services and, further excepting from this exclusion such equipment
rented or leased to remedy or ameliorate an emergency condition in the Project;
4.2.3.1.16    all items and services for which Tenant or any other tenant in the
Project reimburses Landlord or which Landlord provides selectively to one or
more tenants (other than Tenant) without reimbursement;
4.2.3.1.17    costs, other than those incurred in ordinary maintenance and
repair, for sculpture, paintings, fountains or other objects of art;
4.2.3.1.18    any costs expressly excluded from Operating Expenses elsewhere in
this Lease;
4.2.3.1.19    rent for any office space occupied by Project management personnel
to the extent the rental rate of such office space exceeds the fair market
rental value of office space occupied by management personnel of the Comparable
Buildings in the vicinity of the Building, with adjustment where appropriate for
the size of the applicable project;
4.2.3.1.20    rent for any office space occupied by Project management personnel
to the extent such management office space exceeds 2,000 rentable square feet of
space;
4.2.3.1.21    costs to the extent arising from the gross negligence or willful
misconduct of Landlord or its agents, employees, vendors, contractors, or
providers of materials or services;
4.2.3.1.22    [Intentionally omitted];
4.2.3.1.23    cost of special cleaning or other services not provided on a
regular basis to tenants of the Project;
4.2.3.1.24     Landlord’s costs of any services sold or provided tenants or
other occupants for which Landlord is entitled to be reimbursed by such tenants
or other occupants as an additional charge or rental over and above the basic
rent (and escalations thereof) payable under the lease with such tenant or other
occupant;

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4.2.3.1.25     any “above‑standard” cleaning, including, but not limited to
construction cleanup or special cleanings associated with parties/events and
specific tenant requirements in excess of service provided to Tenant, including
related trash collection, removal, hauling and dumping;
4.2.3.1.26     costs arising from Landlord’s charitable or political
contributions;
4.2.3.1.27     any flowers, gifts, balloons, etc. provided to any entity
whatsoever, to include, but not limited to, Tenant, other tenants, employees,
vendors, contractors, prospective tenants and agents;
4.2.3.1.28    advertising and promotional expenditures;
4.2.3.1.29    the cost of any “tenant relations” parties, events or promotions
not consented to by an authorized representative of Tenant in writing;
4.2.3.1.30    entertainment, dining or travel expenses for any purpose;
4.2.3.1.31    costs for which Landlord has been compensated by a management fee,
and any management fees in excess of four percent (4%) of the gross revenue from
the Project;
4.2.3.1.32     the cost of any training or incentive programs, other than for
tenant life safety information services;
4.2.3.1.33    the cost of any magazine, newspaper, trade or other subscriptions;
4.2.3.1.34     any “finders fees”, brokerage commissions, job placement costs or
job advertising cost;
4.2.3.1.35     the cost of correcting defects in the initial construction of the
Building, parking garage, or other part of the Premises, or in the Building
equipment;
4.2.3.1.36     costs incurred due to violation by Landlord or any tenant of the
terms and conditions of any lease
4.2.3.1.37    any expenses incurred in connection with any hazardous materials'
abatement, encapsulation, or removal, including, without limitation, asbestos,
except to the extent such hazardous materials exist on the Project as of the
date hereof; and
4.2.3.1.38    any other expenses which under generally accepted accounting
principles and practice would not be considered a normal maintenance or
operating expense.

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If the Project is not at least ninety-five percent (95%) occupied during all or
a portion of any Expense Year, Landlord shall make an appropriate adjustment to
the components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been
ninety-five percent (95%) occupied; and the amount so determined shall be deemed
to have been the amount of Operating Expenses for such year.
4.2.4    Taxes.
4.2.4.1    "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof.
4.2.4.2    Tax Expenses shall include, without limitation: (i) any tax on the
rent, right to rent or other income from the Project, or any portion thereof, or
as against the business of leasing the Project, or any portion thereof; (ii) any
assessment, tax, fee, levy or charge in addition to, or in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Tenant and Landlord that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants, and
Tax Expenses shall also include any mandatory governmental assessments towards a
governmental cost-sharing agreement; and (iii) any assessment, tax, fee, levy,
or charge allocable to or measured by the area of the Premises or the Rent
payable hereunder, including, without limitation, any business or gross income
tax or excise tax with respect to the receipt of such rent, or upon or with
respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any portion
thereof.
4.2.4.3    Any costs and expenses (including, without limitation, reasonable
attorneys' fees) incurred in attempting to protest, reduce or minimize Tax
Expenses shall be included in Tax Expenses in the Expense Year such expenses are
paid. Refunds of Tax Expenses shall be credited against Tax Expenses and
refunded to Tenant regardless of when received, based on the Expense Year to
which the refund is applicable, provided that in no event shall the amount to be
refunded to Tenant for any such Expense Year exceed the total amount paid as an
increase in the Tax Expenses by Tenant included as Additional Rent under this
Article 4 for such Expense Year. If Tax Expenses for any period during the Lease
Term or any extension thereof are increased after payment thereof for any
reason, including, without limitation, error or reassessment by applicable
governmental or municipal authorities, Tenant shall pay Landlord upon demand
Tenant's Share of any such increased Tax Expenses included by

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Landlord as Building Tax Expenses pursuant to the terms and conditions of this
Lease. Notwithstanding anything to the contrary contained in this Section 4.2.4
(except as set forth in Section 4.2.4.1, above), there shall be excluded from
Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes, federal and state
income taxes, payroll taxes, capital gains taxes, transfer or conveyance taxes,
excise taxes, and other taxes to the extent applicable to Landlord's general or
net income (as opposed to rents, receipts or income attributable to operations
at the Project), except to the extent such excluded taxes are imposed by a
governmental authority in replacement of or in lieu of taxes previously included
within Tax Expenses hereunder, (ii) any items included as Operating Expenses,
(iii) any late charges, interest or penalties resulting from Landlord’s failure
to pay any Taxes when due, (iv) any special assessments levied against another
tenant or occupant in the Project due to improvements made by such other tenant
or occupant, and (v) any items paid by Tenant under Section 4.5 of this Lease.
4.3    Allocation of Direct Expenses.    The parties acknowledge that the
Building is a part of a multi-building project and that Direct Expenses shall be
allocated between Tenant and the tenants of the other buildings in the Project
and any future buildings constructed in the Project, and the percentage of
Direct Expenses payable by Tenant shall be determined using the applicable
“Tenant’s Share”, all as provided in Section 4.1 of this Lease.
4.4    Calculation and Payment of Additional Rent. Tenant shall pay to Landlord,
in the manner set forth in Section 4.4.1, below, and as Additional Rent,
Tenant's Share of Direct Expenses for each Expense Year.
4.4.1    Statement of Actual Direct Expenses and Payment by Tenant. Landlord
shall give to Tenant following the end of each Expense Year, a statement (the
"Statement") which shall show the Direct Expenses incurred or accrued for such
preceding Expense Year, and which shall indicate the amount of Tenant's Share of
Direct Expenses. Landlord shall use commercially reasonable efforts to deliver
such Statement to Tenant on or before May 1 following the end of the Expense
Year to which such Statement relates. Upon receipt of the Statement for each
Expense Year commencing or ending during the Lease Term, Tenant shall pay,
within thirty (30) days after receipt of the Statement, the full amount of
Tenant's Share of Direct Expenses for such Expense Year, less the amounts, if
any, paid during such Expense Year as "Estimated Direct Expenses," as that term
is defined in Section 4.4.2, below, and if Tenant paid more as Estimated Direct
Expenses than the actual Tenant's Share of Direct Expenses (an "Excess"), Tenant
shall receive a credit in the amount of such Excess against Rent next due under
this Lease. The failure of Landlord to timely furnish the Statement for any
Expense Year shall not prejudice Landlord or Tenant from enforcing its rights
under this Article 4. Even though the Lease Term has expired and Tenant has
vacated the Premises, when the final determination is made of Tenant's Share of
Direct Expenses for the Expense Year in which this Lease terminates, if Tenant's
Share of Direct Expenses is greater than the amount of Estimated Direct Expenses
previously paid by Tenant to Landlord, Tenant shall, within thirty (30) days
after receipt of the Statement, pay to Landlord such amount, and if Tenant paid
more as Estimated Direct Expenses than the actual Tenant's Share of Direct
Expenses (again, an Excess), Landlord shall deliver a check payable to Tenant in
the amount of such Excess concurrently with its delivery of the Statement. The
provisions of this Section 4.4.1 shall survive the expiration or earlier
termination of the Lease Term. Notwithstanding the immediately

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preceding sentence, Tenant shall not be responsible for Tenant's Share of any
Direct Expenses attributable to any Expense Year which are first billed to
Tenant more than twelve (12) calendar months after the Lease Expiration Date,
provided that in any event Tenant shall be responsible for Tenant's Share of
Direct Expenses levied by any governmental authority or by any public utility
companies at any time following the Lease Expiration Date which are attributable
to any Expense Year.
4.4.2    Statement of Estimated Direct Expenses. In addition, Landlord shall
give Tenant a yearly expense estimate statement (the "Estimate Statement") which
shall set forth in general major categories Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated Tenant's Share of Direct Expenses (the
"Estimated Direct Expenses"). Landlord shall use commercially reasonable efforts
to deliver such Estimate Statement to Tenant on or before April 1 of the Expense
Year to which such Estimate Statement relates. The failure of Landlord to timely
furnish the Estimate Statement for any Expense Year shall not preclude Landlord
from enforcing its rights to collect any Estimated Direct Expenses under this
Article 4, nor shall Landlord be prohibited from revising any Estimate Statement
or Estimated Direct Expenses theretofore delivered to the extent necessary.
Thereafter, Tenant shall pay, within thirty (30) days after receipt of the
Estimate Statement, a fraction of the Estimated Direct Expenses for the
then-current Expense Year (reduced by any amounts paid pursuant to the second to
last sentence of this Section 4.4.2). Such fraction shall have as its numerator
the number of months which have elapsed in such current Expense Year, including
the month of such payment, and twelve (12) as its denominator. Until a new
Estimate Statement is furnished (which Landlord shall have the right to deliver
to Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent
installments, an amount equal to one-twelfth (1/12) of the total Estimated
Direct Expenses set forth in the previous Estimate Statement delivered by
Landlord to Tenant. Following Tenant’s receipt of the new Estimate Statement for
the Expense Year it shall, within thirty (30) days of its receipt of such
Estimate Statement, pay to Landlord the difference between the monthly estimated
payments made to date in such Expense Year, and the monthly estimated payments
that should have been made based on such new Estimate Statement. Throughout the
Lease Term Landlord shall maintain books and records with respect to Direct
Expenses in accordance with generally accepted real estate accounting and
management practices, consistently applied.
4.5    Taxes and Other Charges for Which Tenant Is Directly Responsible.
4.5.1    Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against Tenant's equipment, furniture, fixtures and
any other personal property located in or about the Premises. If any such taxes
on Tenant's equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord's property or if the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.

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4.5.2    If the improvements in the Premises, whether installed and/or paid for
by Landlord or Tenant and whether or not affixed to the real property so as to
become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which improvements conforming to
Landlord's "building standard" in other space in the Building are assessed, then
the Tax Expenses levied against Landlord or the property by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section 4.5.1,
above.
4.5.3    Notwithstanding any contrary provision herein, Tenant shall pay prior
to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value
added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.
4.6    Landlord's Books and Records. Upon Tenant's written request (the "Review
Request"), given not more than one hundred eighty (180) days after Tenant's
receipt of a Statement for a particular Expense Year, Tenant shall have the
right during Landlord’s regular business hours and on reasonable prior notice,
to inspect, at Landlord’s corporate offices, at Tenant’s sole cost, Landlord’s
records (the "Preliminary Review"). The Preliminary Review shall be conducted by
Tenant within thirty (30) days of Tenant's Review Request (but in any event
within the one hundred fifty (150) day period following Tenant's receipt of a
Statement for a particular Expense Year). The inspection of Landlord’s records
as part of the Preliminary Review may be conducted by Tenant's employees, an
audit review professional or a reputable certified public accountant. If after
such Preliminary Review any disputes cannot be promptly resolved by the parties,
Tenant shall have the right to audit Landlord's records with respect to the
Statement at Landlord's corporate offices (the "Audit"), and Landlord shall
furnish to Tenant's accountant or audit representative such reasonable
supporting documentation in connection with such Audit as Tenant may reasonably
request. Landlord shall provide said information to Tenant within thirty (30)
days after Tenant's written request therefor, and Tenant shall complete such
Audit within thirty (30) days of its receipt of such requested information from
Landlord. In connection with such Audit, Tenant and Tenant's agents must agree
in advance to follow Landlord's reasonable rules and procedures regarding an
audit of Landlord's records, and shall execute a commercially reasonable
confidentiality agreement regarding any Preliminary Review or Audit undertaken
pursuant to the terms of this Section 4.6. Any audit report prepared by Tenant's
auditors shall be delivered to both Landlord and Tenant. If, after the Audit,
Tenant continues to dispute the amount of such Additional Rent for the
particular year which is the subject of the Audit, Landlord and Tenant shall
meet and attempt in good faith to resolve the dispute. If the parties are unable
to resolve the dispute within thirty (30) days after completion of Tenant's
Audit and Tenant still disputes such Additional Rent, a further audit to
determine the proper amount shall be made by an independent certified public
accountant (the "Accountant") selected by Landlord and subject to Tenant's
reasonable approval (the "Final Audit"), and the findings of the Accountant
shall be binding on Landlord and Tenant. The actual out-of-pocket third-party
costs and expenses relating to the Preliminary Review, the Audit and the Final
Audit shall be paid by Tenant; provided that if such Final Audit by the
Accountant proves that Direct Expenses that are being disputed were overstated
by more than five percent (5%), then the actual

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out-of-pocket third-party costs and expenses relating to the Preliminary Review,
the Audit and the Final Audit shall be paid by Landlord; provided, however, in
no event shall Landlord be responsible for an amount in excess of Fifteen
Thousand and 00/100 Dollars ($15,000.00) in connection therewith. Tenant hereby
acknowledges that Tenant's sole right to review and audit Landlord's books and
records and to contest the amount of Direct Expenses payable by Tenant shall be
as set forth in this Section 4.6, and Tenant hereby waives any and all other
rights pursuant to applicable law to audit such books and records and/or to
contest the amount of Direct Expenses payable by Tenant. Following the Final
Audit (or otherwise following the agreement reached by Landlord and Tenant to
adjust the payments due pursuant to the particular Statement after the
Preliminary Review or Audit), the parties shall make such appropriate payments
or reimbursements, as the case may be, to each other as are determined to be
owing, provided that in any case such payments or reimbursements shall be made
to Landlord or Tenant (as the case may be) within thirty (30) days following the
Final Audit (or the agreement otherwise reached between the parties pursuant to
the terms of this Section 4.6); provided, however, if a reimbursement is due to
be paid by Landlord to Tenant pursuant to the foregoing during the Lease Term,
Landlord may effectuate such reimbursement via a credit equal to the amount
thereof against Tenant's next installment of Rent due to Landlord under this
Lease.
ARTICLE 5
USE OF PREMISES
5.1    Permitted Use. Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord.
5.2    Prohibited Uses. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for any uses which
are not allowed under applicable zoning, or are restricted under any applicable
recorded instrument. Tenant further covenants and agrees that Tenant shall not
use, or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of the Rules and
Regulations set forth in Exhibit D, attached hereto (the "Rules and
Regulations"), or in violation of the laws of the United States of America, the
State of Washington, or the ordinances, regulations or requirements of the local
municipal or county governing body or other lawful authorities having
jurisdiction over the Project) including, without limitation, any such laws,
ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect; provided, however, Landlord shall not enforce, change or modify the
Rules and Regulations in a discriminatory manner and Landlord agrees that the
Rules and Regulations shall not be unreasonably modified or enforced in a manner
which will unreasonably interfere with the normal and customary conduct of
Tenant's business.
5.3    CC&Rs. Tenant shall comply with all recorded covenants, conditions, and
restrictions currently affecting the Project. Additionally, Tenant acknowledges
that the Project may be subject to any future covenants, conditions, and
restrictions (the "CC&Rs") which Landlord, in Landlord's discretion, deems
reasonably necessary or desirable, and Tenant agrees

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that this Lease shall be subject and subordinate to such CC&Rs, provided that
such CC&Rs shall not materially diminish Tenant’s use of or operation within the
Premises under the Lease, or materially increase Tenant’s obligations under the
Lease. Landlord shall have the right to require Tenant to execute and
acknowledge, within fifteen (15) business days of a request by Landlord, a
"Recognition of Covenants, Conditions, and Restriction," in a form substantially
similar to that attached hereto as Exhibit F, agreeing to and acknowledging the
CC&Rs.
ARTICLE 6
SERVICES AND UTILITIES
6.1    Standard Tenant Services. Landlord shall provide the following services
on all days (unless otherwise stated below) during the Lease Term.
6.1.1    Subject to all governmental rules, regulations and guidelines
applicable thereto, Landlord shall provide heating and air conditioning ("HVAC")
when necessary for normal comfort for normal office use in the Premises from
7:00 A.M. to 7:00 P.M. Monday through Friday and 8:00 A.M. to 1:00 P.M. on
Saturday (collectively, the "Building Hours"), except for the date of
observation of New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day and any other legal holiday in the State of
Washington (collectively, the "Holidays").
6.1.2    Tenant shall continue to use the currently-existing electrical wiring
and facilities and power for normal general office use as determined by
Landlord. Tenant shall pay directly to the utility company pursuant to the
utility company's separate meters (or to Landlord in the event Landlord provides
submeters instead of the utility company's meters), the cost of all electricity
provided to and/or consumed in the Premises (including normal and excess
consumption and including the cost of electricity to operate the HVAC air
handlers), which electricity shall be separately metered (as described above or
otherwise equitably allocated and directly charged by Landlord to Tenant).
Tenant shall pay such cost within ten (10) days after demand and as Additional
Rent under this Lease (and not as part of the Operating Expenses). Landlord
shall designate the utility provider from time to time provided that any such
utility company provides reliable service and the utility costs do not generally
exceed market rates. Tenant's use of electricity shall never exceed the capacity
of the feeders to the Project or the risers or wiring installation.
6.1.3    Landlord shall replace lamps, starters and ballasts for Building
standard lighting fixtures within the Premises. Tenant shall bear the cost of
replacement of lamps, starters and ballasts for non-Building standard lighting
fixtures within the Premises. Landlord confirms that the current lighting
fixtures within the Premises are Building-standard.
6.1.4    Landlord shall provide city water from the regular Building outlets for
drinking, lavatory and toilet purposes in the Building.
6.1.5     Landlord shall provide janitorial services within the Premises
substantially in accordance with the "Janitorial Specifications" attached hereto
as Exhibit I and made a part hereof ("Janitorial Specifications"). Landlord
shall be entitled to adjust the Janitorial

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Specifications from time to time, but shall ensure that the Premises are
provided with janitorial services comparable to those provided by landlord of
Comparable Buildings.
6.2    Overstandard Tenant Use. Except for normal fractional horsepower office
machines (including, but not limited to, computers, copiers, printers, scanners,
facsimile machines, normal office break room equipment used in a break room
setting such as refrigerators, dishwashers, ovens, microwave ovens, toaster
ovens and coffee makers), Tenant shall not, without Landlord's prior written
consent, use machines or equipment which may substantially affect the
temperature otherwise maintained by the air conditioning system or substantially
increase the water normally furnished for the Premises by Landlord pursuant to
the terms of Section 6.1 of this Lease. If such consent is given, Landlord shall
have the right to install supplementary air conditioning units or other
facilities in the Premises, including supplementary or additional metering
devices, and the cost thereof, including the cost of installation, operation and
maintenance, and other similar charges, shall be paid by Tenant to Landlord upon
billing by Landlord. If Tenant uses water, electricity, heat or air conditioning
in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease,
Tenant shall pay to Landlord, upon billing, the cost of such excess consumption
(to the extent not separately metered and thereby directly paid for by Tenant),
the cost of the installation, operation, and maintenance of equipment which is
installed in order to supply such excess consumption, and Landlord may install
devices to separately meter any increased use and in such event Tenant shall pay
the increased cost directly to Landlord, on demand, at the rates charged by the
public utility company furnishing the same, including the cost of such
additional metering devices. Tenant's use of electricity shall never exceed the
capacity of the feeders to the Project or the risers or wiring installation. If
Tenant desires to use heat, ventilation or air conditioning during hours other
than those for which Landlord is obligated to supply such utilities pursuant to
the terms of Section 6.1 of this Lease, Tenant shall give Landlord such prior
notice, if any, as Landlord shall from time to time establish as appropriate, of
Tenant's desired use in order to supply such utilities, and Landlord shall
supply such utilities to Tenant at such hourly cost to Tenant (which shall be
treated as Additional Rent) as Landlord shall from time to time reasonably
establish for all tenants in the Project. Landlord acknowledges that the
Premises currently has a data room served by a supplementary air conditioning
system, that the Premises is submetered for electricity consumption, and that
the lighting used in the Premises constitutes Building standard lighting.
Concurrently with its review of Tenant’s plans and specifications for any
"Alterations" (as that term is defined in Section 8.1 below), Landlord shall
identify any lighting or other particular component of the Alterations which (y)
is expressly identified in such plans and specifications provided to Landlord,
and (z) would cause Landlord to exercise its right to install supplementary air
conditioning units or other equipment in the Premises contemplated by this
Section 6.2.
6.3    Interruption of Use. Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by breakage, repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause beyond

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Landlord's reasonable control; and such failures or delays or diminution shall
never be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying Rent or performing any
of its obligations under this Lease, except as otherwise provided in Section 6.4
or elsewhere in the Lease. Furthermore, Landlord shall not be liable under any
circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities as set forth in this Article
6.
6.4    Abatement Event. If (i) Landlord fails to perform the obligations
required of Landlord under this Lease or to otherwise perform an act required by
Landlord to avoid such interference, (ii) such failure is within Landlord’s
reasonable control and is reasonably capable of being cured by Landlord, (iii)
such failure causes all or a portion of the Premises to be untenantable and
unusable by Tenant, and (iv) such failure relates to (A) the nonfunctioning of
any Building System or utility service to the Premises, or (B) a failure to
provide access to the Premises, for a period, in either of (A) or (B), of three
(3) consecutive business days, then Tenant shall give Landlord notice (the
"Initial Notice"), specifying such failure to perform by Landlord (the
"Abatement Event"). If Landlord has not cured such Abatement Event within two
(2) business days after the receipt of the Initial Notice (the "Eligibility
Period"), Tenant may deliver an additional notice to Landlord (the "Additional
Notice"), specifying such Abatement Event. If Landlord does not cure such
Abatement Event within two (2) business days of receipt of the Additional
Notice, then Rent payable under this Lease shall be abated for that portion of
the Premises rendered untenantable and not used by Tenant, for the period
beginning on the third (3rd) business day after the date on which such portion
of the Premises first became untenantable and continuing to the earlier of the
date Landlord cures such Abatement Event or the date Tenant recommences the use
of such portion of the Premises. Such right to abate Rent shall be Tenant's sole
and exclusive remedy at law or in equity for an Abatement Event. Except as
provided in this Section 6.4, nothing contained herein shall be interpreted to
mean that Tenant is excused from paying Rent due hereunder. Notwithstanding
anything herein to the contrary, Landlord reserves the right to stop service of
the elevator, plumbing, ventilation, air-conditioning and electrical systems,
when necessary, by reason of accident or emergency, or for repairs, alterations
or improvements, which are in the reasonable judgment of Landlord desirable or
necessary, until said repairs, alterations or improvements shall have been
completed; provided, Landlord shall use commercially reasonable efforts to
minimize interruption to Tenant’s business operations, and shall provide Tenant
with advance notice of any scheduled repairs.
ARTICLE 7
REPAIRS
7.1    In General. Landlord shall maintain in operating order and keep in good
repair and condition the roof and structural portions of the Building, including
the foundation, floor/ceiling slabs, roof structure, roof membrane, curtain
wall, exterior glass and mullions, columns, beams, shafts (including elevator
shafts), stairs, stairwells, elevator cab, men's and women's washrooms, Building
mechanical, electrical and telephone closets, and all common and public areas
servicing the Building, including the parking areas, landscaping and exterior
Project signage (collectively, "Building Structure") and the "Base Building" (as
that term is defined in

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Section 8.2 below) mechanical, electrical, life safety, plumbing, sprinkler
systems and HVAC systems (collectively, the "Building Systems") and the Common
Areas. Tenant shall, at Tenant's own expense, and with contractors reasonably
approved by Landlord and using materials of equal or better quality as those
currently existing in the Building, keep the Premises, including all
improvements, fixtures, equipment, window coverings, and furnishings therein,
and the floor or floors of the Building on which the Premises are located, in
good order, repair and condition at all times during the Lease Term, but such
obligation shall not extend to the Building Structure and the Building Systems
(if any repairs or replacements to the Building Structure and/or the Building
Systems are necessitated because of an act of Tenant or any of Tenant’s
employees, agents or contractors, Landlord shall make such repairs at Tenant’s
sole cost and expense). If Tenant fails to make such repairs, Landlord may,
after written notice to Tenant and Tenant's failure to commence such repair
within ten (10) days thereafter and diligently prosecute such repairs to
completion, but need not, make such repairs and replacements, and Tenant shall
pay Landlord the cost thereof, including a percentage of the cost thereof (to be
uniformly established for the Project) sufficient to reimburse Landlord for all
overhead, general conditions, fees and other reasonable costs or expenses
arising from Landlord's involvement with such repairs and replacements forthwith
upon being billed for same. Landlord may, but shall not be required to, enter
the Premises at all reasonable times to make such repairs, alterations,
improvements or additions to the Premises or to the Project or to any equipment
located in the Project as Landlord shall desire or deem necessary or as Landlord
may be required to do by governmental or quasi-governmental authority or court
order or decree; provided, however, except for (i) emergencies, (ii) repairs,
alterations, improvements or additions required by governmental or
quasi-governmental authorities or court order or decree, or (iii) repairs which
are the obligation of Tenant hereunder which Tenant has failed to perform
following notice from Landlord, any such entry into the Premises by Landlord
shall be performed in a manner so as not to materially interfere with Tenant's
use of, or access to, the Premises and following not less than twenty-four (24)
hours prior written notice to Tenant; provided that, with respect to items (ii)
and (iii) above, Landlord shall use commercially reasonable efforts to not
materially interfere with Tenant's use of, or access to, the Premises.
7.2    Tenant's Self-Help Rights. Notwithstanding any provision to the contrary
set forth in this Article 7, if Tenant provides written notice to Landlord of
the need for repairs and/or maintenance which are Landlord's obligation to
perform under Section 7.1, above, and Landlord fails to undertake such repairs
and/or maintenance within a reasonable period of time, given the circumstances,
after receipt of such notice (but in no event earlier than two (2) business days
after receipt of such notice except in cases where there is a more immediate
threat of material and substantial property damage or a more immediate threat of
bodily injury, in which case such shorter period of time as is reasonable under
the circumstances), and such failure results in an Emergency (as defined below),
then Tenant may, at its option and without limiting all other available
remedies, proceed to undertake such repairs and/or maintenance upon delivery of
notice to Landlord that Tenant is taking such required action (which may, if the
circumstances reasonably require, be delivered to __________________ via
telephone at (___) ___-____ and electronic mail at ______________________ (or
such other phone numbers or e-mail addresses as Landlord may designate from time
to time)), which notice shall clearly indicate the steps to be taken by Tenant
that are necessary to remedy the event giving rise to the Emergency. If
Emergency repairs and/or maintenance were required under the terms of this Lease
to be performed by Landlord and are not performed by Landlord, and are performed
by Tenant as

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provided herein, then Tenant shall be entitled to reimbursement by Landlord of
Tenant's actual, reasonable, and documented costs and expenses in performing
such maintenance and/or repairs. Such reimbursement shall be made within thirty
(30) days after Landlord's receipt of Tenant's invoice of such costs and
expenses, and if Landlord fails to so reimburse Tenant within such thirty (30)
day period, then Tenant shall be entitled to offset against the Rent payable by
Tenant under this Lease the amount of such invoice together with interest
thereon at the Interest Rate, which shall have accrued on the amount of such
invoice during the period from and after Tenant's delivery of such invoice to
Landlord through and including the earlier of the date Landlord delivers the
payment to Tenant or the date Tenant offsets such amount against the Rent. In
the event Tenant undertakes such repairs and/or maintenance, and such work will
affect the Building Structure or Building Systems, any Common Areas or other
areas outside the Building and/or the exterior appearance of the Building or
Project (or any portion thereof), Tenant shall use only those unrelated third
party contractors used by Landlord in the Buildings for such work unless such
contractors are unwilling or unable to perform such work on a timely basis and
at competitive prices, in which event Tenant may utilize the services of any
other qualified contractor which normally and regularly performs similar work in
Comparable Buildings. Tenant shall comply with the other terms and conditions of
this Lease if Tenant takes the required action, except that Tenant is not
required to obtain Landlord's consent for such Emergency repairs. For purposes
of this Section 7.2, an "Emergency" shall mean (i) an event threatening
immediate and material danger to people located in the Building or immediate,
material damage to the Building, Building Systems, Building Structure or
Alterations, or creates a realistic possibility of an immediate and material
interference with, or immediate and material interruption of a material aspect
of Tenant's business operations, or (ii) a failure by Landlord to perform any
repairs to the extent (a) the same are Landlord's express responsibility to
perform under this Lease, and (b) the non-performance thereof has materially
affected the interior of the Premises, or creates a realistic possibility of
immediately and materially affecting the interior of the Premises.
Notwithstanding anything to the contrary herein, Tenant shall take only such
action as is reasonably necessary to correct the Emergency condition and Tenant
shall exercise good business judgment in connection with the exercising its
self-help right and incurring the costs related thereto; all work done in
accordance with this paragraph by any contractor that is not a Landlord approved
contractor must be performed at reasonable and competitive costs and expenses;
Tenant shall use commercially reasonable efforts to minimize interference with
the rights of other tenants to use their respective premises; and any work done
by Tenant under this paragraph shall be completed in a good and workmanlike
manner, in accordance with all applicable laws, and in a manner so as not to
materially impair any portion of the structural elements of the Building or
Building Systems.
ARTICLE 8
ADDITIONS AND ALTERATIONS
8.1    Landlord's Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or
HVAC facilities or systems pertaining to the Premises (collectively, the
"Alterations") without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
fifteen (15) business days prior to the commencement thereof, and which consent
shall not be unreasonably withheld, delayed or conditioned by Landlord,

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provided it shall be deemed reasonable for Landlord to withhold its consent to
any Alteration which adversely affects the structural portions or the systems or
equipment of the Building. Notwithstanding the foregoing, Tenant shall be
permitted to make Alterations following ten (10) business days' notice to
Landlord, but without the need to obtain Landlord's prior consent, to the extent
that such Alterations (a) consist solely of interior, cosmetic finish work, such
as paint, carpet, floor, wall and window coverings, (b) are collectively less
than Five Hundred Thousand Dollars ($500,000.00), and (c) are not classified as
“Prohibited Alterations” below (the "Cosmetic Alterations"). Tenant shall not
make Alterations which (i) adversely affect the structure or exterior of the
Building, (ii) adversely impact the Building’s mechanical, electrical or
heating, ventilation or air conditioning systems (iii) adversely affect the
value of the Building, (iv) are visible from the exterior of the Premises,
and/or (v) will result in the penetration or puncturing of the roof or a floor
of the Building (each being “Prohibited Alterations”), without, in each case,
first obtaining Landlord’s prior written consent or approval to such Prohibited
Alterations (which consent or approval shall be in Landlord’s sole and absolute
discretion).
8.2    Manner of Construction. If Landlord shall give its consent to any
Alterations, the consent shall be deemed conditioned upon Tenant acquiring a
permit to do the work from appropriate governmental agencies, the furnishing of
a copy of such permit to Landlord prior to the commencement of the work, and the
compliance by Tenant with all conditions of said permit in a prompt and
expeditious manner. If such Alterations will involve the use of or disturb
hazardous materials or substances existing in the Premises, Tenant shall comply
with Landlord's rules and regulations concerning such hazardous materials or
substances. Tenant shall construct such Alterations and perform such repairs in
a good and workmanlike manner, in conformance with any and all applicable
federal, state, county or municipal laws, rules and regulations and pursuant to
a valid building permit, issued by the City of Bellevue, all in conformance with
Landlord's commercially reasonable construction rules and regulations; provided,
however, that prior to commencing to construct any Alteration, Tenant shall meet
with Landlord to discuss Landlord's design parameters and code compliance
issues. In the event Tenant performs any Alterations in the Premises which
require or give rise to governmentally required changes to the "Base Building,"
as that term is defined below, then Landlord shall be entitled, at its sole
option, and at Tenant's expense, to make such changes to the Base Building. The
"Base Building" shall include the structural portions of the Building, and the
elevators, exit stairwells and the systems and equipment located in the internal
core of the Building. In performing the work of any such Alterations, Tenant
shall have the work performed in such manner so as not to obstruct access to the
Project or any portion thereof, by any other tenant of the Project, and so as
not to obstruct the business of Landlord or other tenants in the Project. In
addition to Tenant's obligations under Article 9 of this Lease, Tenant shall
deliver to the management office for the Project a reproducible copy of the "as
built" and CAD drawings of the Alterations, to the extent applicable, as well as
all permits, approvals and other documents issued by any governmental agency in
connection with the Alterations.
8.3    Payment for Improvements. If payment is made directly to contractors,
Tenant shall (i) comply with Landlord's requirements for final lien releases and
waivers in connection with Tenant's payment for work to contractors, and (ii)
sign Landlord's standard contractor's rules and regulations. If Tenant orders
any work directly from Landlord, Tenant shall pay to Landlord an amount equal to
three percent (3%) of the cost of such work to compensate Landlord for all
overhead, general conditions, fees and other costs and expenses arising from

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Landlord's involvement with such work. If Tenant does not order any work
directly from Landlord, Tenant shall reimburse Landlord for any of Landlord's
actual and reasonable out-of-pocket third-party costs reasonably incurred (based
upon the particular nature of the proposed Alterations) by Landlord as a result
of such proposed Alterations.
8.4    Construction Insurance. In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant, or its contractor carries "Builder's All Risk" insurance in an
amount reasonably approved by Landlord covering the construction of such
Alterations, and such other insurance as Landlord may reasonably require, it
being understood and agreed that all of such Alterations shall be insured by
Tenant pursuant to Article 10 of this Lease immediately upon completion thereof.
8.5    Landlord's Property. Landlord and Tenant hereby acknowledge and agree
that all Alterations, improvements, fixtures, equipment and/or appurtenances
which have been installed or may in the future be installed or placed in or
about the Premises (excluding Tenant's removable trade fixtures, furniture or
non-affixed office equipment), from time to time, shall be at the sole cost of
Tenant and shall be and become, at Landlord’s option, part of the Premises and
the property of Landlord. Furthermore, Landlord may, by written notice to Tenant
at the time Landlord approves any Alterations requiring Landlord’s consent,
require Tenant, at Tenant's expense, to remove any Alterations or improvements
located within the Premises (but excluding the improvements located in the
Premises on the Lease Commencement Date, which Landlord agrees Tenant shall not
be obligated to remove), which are Specialty Alterations (as defined below) and
to repair any damage to the Premises and/or the Building caused by such removal.
Notwithstanding anything herein or in the Lease to the contrary, prior to the
expiration or earlier termination of the Lease Term, Landlord, in Landlord’s
sole and absolute discretion, may require Tenant to remove, at Tenant’s sole
cost and expense, the two (2) presently existing internal staircases within the
Building. If Tenant fails to complete such removal and/or to repair any damage
caused by the removal of any Alterations or improvements in the Premises, then
Landlord may do so and may charge the cost thereof to Tenant. For purposes of
this Lease, “Specialty Alterations” shall mean internal staircases, raised
computer flooring, water features, locker rooms or theatres, or any other
Alterations that require extraordinary efforts to demolish. Tenant hereby
protects, defends, indemnifies and holds Landlord harmless from any liability,
cost, obligation, expense or claim of lien in any manner relating to the
installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises, which
obligations of Tenant shall survive the expiration or earlier termination of
this Lease.
ARTICLE 9
COVENANT AGAINST LIENS
Tenant shall keep the Project and Premises free from any liens or encumbrances
arising out of the work performed, materials furnished or obligations incurred
by or on behalf of Tenant, and shall protect, defend, indemnify and hold
Landlord harmless from and against any claims, liabilities, judgments or costs
(including, without limitation, reasonable attorneys' fees and costs) arising
out of same or in connection therewith. Except in the case of an Emergency (as
more

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particularly contemplated by Section 7.2 of this Lease), Tenant shall give
Landlord notice at least ten (10) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within twenty (20) days after notice by
Landlord, and if Tenant shall fail to do so, Landlord may pay the amount
necessary to remove such lien or encumbrance, without being responsible for
investigating the validity thereof. The amount so paid shall be deemed
Additional Rent under this Lease payable upon demand, without limitation as to
other remedies available to Landlord under this Lease. Nothing contained in this
Lease shall authorize Tenant to do any act which shall subject Landlord's title
to the Building or Premises to any liens or encumbrances whether claimed by
operation of law or express or implied contract. Any claim to a lien or
encumbrance upon the Building or Premises arising in connection with any such
work or respecting the Premises not performed by or at the request of Landlord
shall be null and void, or at Landlord's option shall attach only against
Tenant's interest in the Premises and shall in all respects be subordinate to
Landlord's title to the Project, Building and Premises.
ARTICLE 10
INSURANCE
10.1    Indemnification and Waiver. Except to the extent of the negligence or
willful misconduct of Landlord or the "Landlord Parties" (as that term is
defined below), Tenant hereby assumes all risk of damage to property or injury
to persons in, upon or about the Premises from any cause whatsoever and agrees
that Landlord, its partners, subpartners and their respective officers, agents,
servants, employees, and independent contractors (collectively, "Landlord
Parties") shall not be liable for, and are hereby released from any
responsibility for, any damage either to person or property or resulting from
the loss of use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant. Other than to the extent arising out of the negligence
or willful misconduct of Landlord or the Landlord Parties, Tenant shall
indemnify, defend, protect, and hold harmless the Landlord Parties from any and
all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys' fees) incurred in connection with or
arising from: (a) any causes in, on or about the Premises; (b) the use or
occupancy of the Premises by Tenant or any person claiming under Tenant; (c) any
activity, work, or thing done, or permitted or suffered by Tenant in or about
the Premises; (d) any acts, omission, or negligence of Tenant or any person
claiming under Tenant, or the contractors, agents, employees, invitees, or
visitors of Tenant or any such person (collectively, "Tenant Parties"); (e) any
breach, violation, or non-performance by Tenant or any person claiming under
Tenant or the employees, agents, contractors, invitees, or visitors of Tenant or
any such person of any term, covenant, or provision of this Lease or any law,
ordinance, or governmental requirement of any kind; (f) any injury or damage to
the person, property, or business of Tenant, its employees, agents, contractors,
invitees, visitors, or any other person entering upon the Premises under the
express or implied invitation of Tenant; or (g) the placement of any personal
property or other items within the Premises. Should Landlord be named as a
defendant in any suit brought against Tenant in connection with or arising out
of Tenant's occupancy of the Premises, Tenant shall defend Landlord in such suit
at Tenant's sole cost and expense (which costs and expenses to be incurred by
Tenant shall include attorneys' fees). Further, Tenant's agreement to indemnify
Landlord pursuant to this Section 10.1 is not intended and shall not

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relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease, to the extent such
policies cover the matters subject to Tenant's indemnification obligations; nor
shall they supersede any inconsistent agreement of the parties set forth in any
other provision of this Lease. Tenant hereby agrees that it shall not assert any
industrial insurance immunity rights pursuant to Title 51 RCW (as the same may
be amended, substituted or replaced) if such assertion would be inconsistent
with or otherwise impair Landlord's right to indemnification under this Section
10.1, and, accordingly, hereby waives all such industrial insurance immunity
rights. The foregoing waiver of industrial insurance immunity rights was
specifically negotiated by Landlord and Tenant and is solely for the benefit of
Landlord and Tenant, and their successors and assigns, under the Lease, and is
not intended as a waiver of Tenant's rights of immunity under such industrial
insurance for any other purposes. The provisions of this Section 10.1 shall
survive the expiration or sooner termination of this Lease with respect to any
claims or liability arising in connection with any event occurring prior to such
expiration or termination.
 
 
 
 
 
 
Landlord's Initials
 
Tenant's Initials
 

10.2    Tenant's Compliance With Landlord's Fire and Casualty Insurance. Tenant
shall, at Tenant's expense, comply with Landlord's insurance company's
reasonable requirements pertaining to the use of the Premises. If Tenant changes
its use of the Premises from the Permitted Use, and Tenant's alternate use of
the Premises causes any increase in the premium for such insurance policies then
Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
10.3    Tenant's Insurance. Throughout the Lease Term, Tenant shall maintain the
following coverages in the following amounts. The required evidence of coverage
must be delivered to Landlord on or before the date required under Section
10.4(I) sub-sections (x) and (y), or Section 10.4(II) below (as applicable).
Such policies shall be for a term of at least one (1) year, or the length of the
remaining term of this Lease, whichever is less.
10.3.1    Commercial General Liability Insurance, including Broad Form
contractual liability covering the insured against claims of bodily injury,
personal injury and property damage (including loss of use thereof) based upon
or arising out of Tenant's operations, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be written on an
“occurrence” basis. Landlord and any other party Landlord so specifies that has
a material financial interest in the Project, including Landlord’s managing
agent, ground lessor and/or lender, if any, shall be named as additional
insureds as their interests may appear using Insurance Service Organization's
form CG2011 or a comparable form approved by Landlord. Tenant shall provide an
endorsement or policy excerpt showing that Tenant’s coverage is primary and any
insurance carried by Landlord shall be excess and non-contributing. The coverage
shall also be extended to include damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations. This policy shall include coverage for
all liabilities assumed under this Lease as an insured contract for the
performance of all of Tenant’s indemnity obligations under this

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Lease. The limits of said insurance shall not, however, limit the liability of
Tenant nor relieve Tenant of any obligation hereunder. Limits of liability
insurance shall not be less than the following; provided, however, such limits
may be achieved through the use of an Umbrella/Excess Policy:
Bodily Injury and
Property Damage Liability
$5,000,000 each occurrence
Personal Injury and Advertising Liability
$5,000,000 each occurrence
Tenant Legal Liability/Damage to Rented
Premises Liability
$1,000,000.00

10.3.2    Property Insurance covering (i) all office furniture, personal
property, business and trade fixtures, office equipment, free-standing cabinet
work, movable partitions, merchandise and all other items of Tenant's business
personal property on the Premises installed by, for, or at the expense of
Tenant, and (ii) all Alterations performed in the Premises. Such insurance shall
be written on a Special Form basis, for the full replacement cost value (subject
to reasonable deductible amounts), without deduction for depreciation of the
covered items and in amounts that meet any co-insurance clauses of the policies
of insurance and shall include coverage for (a) all perils included in the CP 10
30 04 02 Coverage Special Form, (b) water damage from any cause whatsoever,
including, but not limited to, sprinkler leakage, bursting, leaking or stoppage
of any pipes, explosion, and backup or overflow from sewers or drains, and (c)
terrorism (to the extent such terrorism insurance is available as a result of
the Terrorism Risk Insurance Act of 2002 (Pub. L. 107-297, 116 Stat. 2322), the
Terrorism Risk Insurance Program Reauthorization Act of 2005 (Pub. l. 109‑144),
and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (Pub. L.
110‑160, 121 Stat. 183), any successor statute or regulation, or is otherwise
available at commercially reasonable rates).
10.3.2.1    Adjacent Premises. Tenant shall pay for any increase in the premiums
for the property insurance of the Project if said increase is caused by Tenant’s
acts, omissions, use or occupancy of the Premises in violation of the Permitted
Use.
10.3.2.2    Property Damage. Tenant shall use the proceeds from any such
insurance for the replacement of personal property, trade fixtures and
Alterations.
10.3.2.3    No Representation of Adequate Coverage. Landlord makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Tenant’s property, business operations or
obligations under this Lease.
10.3.2.4    Property Insurance Subrogation. Landlord and Tenant intend that
their respective property loss risks shall be borne by insurance carriers to the
extent above provided (and, in the case of Tenant, by an insurance carrier
satisfying the requirements of Section 10.4(i) below), and Landlord and Tenant
hereby agree to look solely to, and seek recovery only from, their respective
insurance carriers in the event of a property loss to the

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extent that such coverage is agreed to be provided hereunder. The parties each
hereby waive all rights and claims against each other for such losses, and waive
all rights of subrogation of their respective insurers. Landlord and Tenant
hereby represent and warrant that their respective "all risk" property insurance
policies include a waiver of (i) subrogation by the insurers, and (ii) all
rights based upon an assignment from its insured, against Landlord and/or any of
the Landlord Parties or Tenant and/or any of the Tenant Parties (as the case may
be) in connection with any property loss risk thereby insured against. Tenant
will cause all other occupants of the Premises claiming by, under, or through
Tenant to execute and deliver to Landlord a waiver of claims similar to the
waiver in this Section 10.3.3 and to obtain such waiver of subrogation rights
endorsements. If either party hereto fails to maintain the waivers set forth in
items (i) and (ii) above, the party not maintaining the requisite waivers shall
indemnify, defend, protect, and hold harmless the other party for, from and
against any and all claims, losses, costs, damages, expenses and liabilities
(including, without limitation, court costs and reasonable attorneys' fees)
arising out of, resulting from, or relating to, such failure.
10.3.3    Business Income Interruption for one year (1) plus Extra Expense
insurance in such amounts as will reimburse Tenant for actual direct or indirect
loss of earnings attributable to the risks outlined in Section 10.3.2 above.
10.3.4    Worker's Compensation or other similar insurance pursuant to all
applicable state and local statutes and regulations, and Employer's Liability
with minimum limits of not less than $1,000,000 each accident/employee/disease.
10.3.5    Commercial Automobile Liability Insurance covering all Owned (if any),
Hired, or Non-owned vehicles with limits not less than $1,000,000 combined
single limit for bodily injury and property damage.
10.4    Form of Policies. The minimum limits of policies of insurance required
of Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall (i) be issued by an insurance company having an
AM Best rating of not less than A‑X, or which is otherwise acceptable to
Landlord and licensed to do business in the State of Washington, (ii) be in form
and content reasonably acceptable to Landlord and complying with the
requirements of Section 10.3 (including, Sections 10.3.1 through 10.3.5), (iii)
Tenant shall not do or permit to be done anything which invalidates the required
insurance policies, and (iv) provide that said insurance shall not be canceled
or coverage changed unless thirty (30) days’ prior written notice shall have
been given to Landlord and any mortgagee of Landlord, the identity of whom has
been provided to Tenant in writing. Any insurance required of Tenant under this
Lease may be furnished by Tenant under a blanket policy so long as and provided
such policy: (a) strictly complies with all other terms and conditions contained
in this Lease; and (b) contains an endorsement with respect to commercial
general liability insurance which identifies with specificity the particular
address of the Premises as being covered under the blanket policy and provides a
minimum guaranteed coverage amount of Five Million Dollars ($5,000,000.00) per
occurrence for the Premises. Tenant shall deliver said policy or policies or
certificates thereof and applicable endorsements which meet the requirements of
this Article 10 to Landlord on or before (I) the earlier to occur of: (y) the
Lease Commencement Date, and (z) the date Tenant and/or its employees,
contractors and/or agents first enter the Premises for occupancy, construction
of improvements, alterations, or any other move-in activities, and (II)

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five (5) business days after the renewal of such policies. In the event Tenant
shall fail to procure such insurance, or to deliver such policies or
certificates and applicable endorsements, Landlord may, at its option, after
written notice to Tenant and Tenant's failure to obtain such insurance within
five (5) days thereafter, procure such policies for the account of Tenant and
the sole benefit of Landlord, and the cost thereof shall be paid to Landlord
after delivery to Tenant of bills therefor.
10.5    Additional Insurance Obligations. Tenant shall carry and maintain during
the entire Lease Term, at Tenant's sole cost and expense, increased amounts of
the insurance required to be carried by Tenant pursuant to this Article 10 and
such other reasonable types of insurance coverage and in such reasonable amounts
covering the Premises and Tenant's operations therein, as may be reasonably
requested by Landlord.
10.6    Third-Party Contractors. Tenant shall obtain and deliver to Landlord,
Third Party Contractor's certificates of insurance and applicable endorsements
at least five (5) business days prior to the commencement of work in or about
the Premises by any vendor or any other third-party contractor (collectively, a
"Third Party Contractor"). All such insurance shall (a) name Landlord as an
additional insured under such party's liability policies as required by Section
10.3.1 above and this Section 10.6, (b) provide a waiver of subrogation in favor
of Landlord under such Third Party Contractor's commercial general liability
insurance, (c) be primary and any insurance carried by Landlord shall be excess
and non-contributing, and (d) comply with Landlord's minimum insurance
requirements.
10.7    Landlord's Fire, Casualty, and Liability Insurance.
10.7.1    Landlord shall maintain Commercial General Liability Insurance with at
least Five Million Dollars ($5,000,000) in coverage, with respect to the Project
during the Lease Term covering claims for bodily injury, personal injury, and
property damage in the Common Areas and with respect to Landlord's activities in
the Premises.
10.7.2    Landlord shall insure the Project and Landlord's remaining interest in
the Improvements and Alterations with a policy of Physical Damage Insurance
including building ordinance coverage, written on a standard Causes of Loss –
Special Form basis (against loss or damage due to fire and other casualties
covered within the classification of fire and extended coverage, vandalism, and
malicious mischief, sprinkler leakage, water damage and special extended
coverage), covering the full replacement cost of the Base Building, Premises and
other improvements (including coverages for enforcement of Applicable Laws
requiring the upgrading, demolition, reconstruction and/or replacement of any
portion of the Building as a result of a covered loss) without a deduction for
depreciation.
10.7.3    Landlord shall maintain Boiler and Machinery/Equipment Breakdown
Insurance covering the Project against risks commonly insured against by a
Boiler and Machinery/Equipment Breakdown policy and such policy shall cover the
full replacement costs, without deduction for depreciation.

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10.7.4    The foregoing coverages shall contain commercially reasonable
deductible amounts from such companies, and on such other terms and conditions,
as Landlord may from time to time reasonably determine.
10.7.5    Additionally, at the option of Landlord, such insurance coverage may
include the risk of (i) earthquake, (ii) flood damage and additional hazards, or
(iii) a rental loss endorsement for a period of up to two (2) years.
10.7.6    Notwithstanding the foregoing provisions of this Section 10.7, the
coverage and amounts of insurance carried by Landlord in connection with the
Project (i) shall at a minimum be as set forth in Sections 10.7.1 through 10.7.5
of this Lease, (ii) shall be comparable to the coverage and amounts of insurance
which are carried by reasonably prudent landlords of Comparable Buildings to the
extent such coverage and amounts exceed those set forth in Sections 10.7.1
through 10.7.5 of this Lease, and (iii) may be fulfilled through a "blanket"
insurance policy. In addition, Landlord shall carry Worker's Compensation and
Employer's Liability coverage as required by applicable law.
ARTICLE 11
DAMAGE AND DESTRUCTION
11.1    Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Premises and such Common Areas. Such restoration
shall be to substantially the same condition of the Premises and the Common
Areas prior to the casualty, except for modifications required by zoning and
building codes and other laws, modifications mutually agreed to by Landlord and
Tenant, or any modifications to the Common Areas deemed desirable by Landlord,
which are consistent with the character of the Project, provided that Tenant’s
access to, and use of, the Premises shall not be materially impaired. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant's business resulting in any way from such damage
or the repair thereof; provided however, that if such fire or other casualty
shall have damaged the Premises or Common Areas necessary to Tenant's occupancy,
and the Premises are not occupied by Tenant as a result thereof, then during the
time and to the extent the Premises are unfit for occupancy, the Rent shall be
abated in proportion to the ratio that the amount of rentable square feet of the
Premises which is unfit for occupancy for the purposes permitted under this
Lease bears to the total rentable square feet of the Premises (or if the entire
Premises cannot be occupied by the Tenant as a result of the fire or other
casualty, and the entire Premises is not occupied by the Tenant, the Rent for
the entire Premises shall be abated).
11.2    Landlord's Option to Repair. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of
discovery of the damage, such notice to include a termination date

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giving Tenant not less than sixty (60) days to vacate the Premises, but Landlord
may so elect only if the Building or Project shall be damaged by fire or other
casualty or cause, whether or not the Premises are affected, and one or more of
the following conditions is present: (i) in Landlord's reasonable judgment,
repairs cannot reasonably be completed within one hundred eighty (180) days
after the date of discovery of the damage (when such repairs are made without
the payment of overtime or other premiums); (ii) the holder of any mortgage on
the Building or Project or ground lessor with respect to the Building or Project
shall require that the insurance proceeds or any portion thereof be used to
retire the mortgage debt, or shall terminate the ground lease, as the case may
be; (iii) the damage is not fully covered by Landlord's insurance policies; (iv)
Landlord decides to rebuild the Building or Common Areas so that they will be
substantially different structurally or architecturally; or (v) the damage
occurs during the last twelve (12) months of the Lease Term; provided, however,
that if Landlord does not elect to terminate this Lease pursuant to Landlord's
termination right as provided above, and the repairs cannot, in the reasonable
opinion of Landlord, be completed within one hundred eighty (180) days after
being commenced, Landlord shall provide notice to Tenant, and Tenant may elect,
no earlier than forty-five (45) days after the date of the damage and not later
than ninety (90) days after the date of such damage, to terminate this Lease by
written notice to Landlord effective as of the date specified in the notice,
which date shall not be less than thirty (30) days nor more than sixty (60) days
after the date such notice is given by Tenant. Furthermore, if neither Landlord
nor Tenant has terminated this Lease, and the repairs are not actually completed
within such one hundred eighty (180)-day period, Tenant shall have the right to
terminate this Lease during the first five (5) business days of each calendar
month following the end of such period until such time as the repairs are
complete, by notice to Landlord (the "Damage Termination Notice"), effective as
of a date set forth in the Damage Termination Notice (the "Damage Termination
Date"), which Damage Termination Date shall not be less than ten (10) business
days following the end of each such month. Notwithstanding the foregoing, if
Tenant delivers a Damage Termination Notice to Landlord, then Landlord shall
have the right to suspend the occurrence of the Damage Termination Date for a
period ending thirty (30) days after the Damage Termination Date set forth in
the Damage Termination Notice by delivering to Tenant, within five (5) business
days of Landlord's receipt of the Damage Termination Notice, a certificate of
Landlord's contractor responsible for the repair of the damage certifying that
it is such contractor's good faith judgment that the repairs shall be
substantially completed within thirty (30) days after the Damage Termination
Date (the "Extended Damage Termination Date"). If repairs shall be substantially
completed prior to the Extended Damage Termination Date, then the Damage
Termination Notice shall be of no force or effect, but if the repairs shall not
be substantially completed prior to the Extended Damage Termination Date, then
this Lease shall terminate on the Extended Damage Termination Date without the
requirement of any further notice from Tenant. At any time, from time to time,
after the date occurring sixty (60) days after the date of the damage, Tenant
may request that Landlord inform Tenant of Landlord's reasonable opinion of the
date of completion of the repairs and Landlord shall respond to such request
within five (5) business days. Furthermore, in the event that the Premises is
damaged or destroyed within the final six (6) months of the Lease Term and such
damage would require more than thirty (30) days to repair, then either Landlord
or Tenant may, at their option, terminate this Lease by written notice to other
within thirty (30) days following the date of such damage of destruction.
11.3    Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any

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and all damage to, or destruction of, all or any part of the Premises, the
Building or the Project, and any statute or regulation of the State of
Washington with respect to any rights or obligations concerning damage or
destruction in the absence of an express agreement between the parties, and any
other statute or regulation, now or hereafter in effect, shall have no
application to this Lease or any damage or destruction to all or any part of the
Premises, the Building or the Project.
ARTICLE 12
NONWAIVER
No provision of this Lease shall be deemed waived by either party hereto unless
expressly waived in a writing signed thereby. The waiver by either party hereto
of any breach of any term, covenant or condition herein contained shall not be
deemed to be a waiver of any subsequent breach of 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 this 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. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the full amount due. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
ARTICLE 13
CONDEMNATION
If the whole of the Project or the Building shall be taken by power of eminent
domain or condemned by any competent authority for any public or quasi-public
use or purpose, or if Landlord shall grant a deed or other instrument in lieu of
such taking by eminent domain or condemnation, this Lease shall automatically
terminate effective as of the date possession is required to be surrendered to
the authority. If more than twenty-five percent (25%) of the rentable square
feet of the Premises is taken, or if access to the Premises is substantially
impaired, in each case for a period in excess of one hundred twenty (120) days,
Tenant shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. Tenant shall not
because of such taking assert any claim against Landlord or the authority for
any compensation because of such taking and Landlord shall be entitled to the
entire award or payment in connection therewith, except that Tenant shall have
the right to file any separate claim available to Tenant for any taking of
Tenant's personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term

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pursuant to the terms of this Lease, and for moving expenses, so long as such
claims do not diminish the award available to Landlord, its ground lessor with
respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant. If Tenant does not elect to so terminate this Lease,
Tenant shall remain in that portion of the Premises which shall not have been
appropriated or taken as herein provided, and Landlord agrees, at Landlord’s
cost and expense, to, as soon as reasonably possible, restore the remaining
portion of the Premises to a complete unit of like quality and character as
existed prior to such appropriation or taking. If any part of the Premises shall
be taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to any statute or regulation of the State of Washington.
Notwithstanding anything to the contrary contained in this Article 13, in the
event of a temporary taking of all or any portion of the Premises for a period
of one hundred and twenty (120) days or less, then this Lease shall not
terminate but the Base Rent and the Additional Rent shall be abated for the
period of such taking in proportion to the ratio that the amount of rentable
square feet of the Premises taken bears to the total rentable square feet of the
Premises. Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1    Transfers. Except as set forth in Section 14.6 below, Tenant shall not,
without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment, or other transfer
of this Lease or any interest hereunder by operation of law, sublet the Premises
or any part thereof, or enter into any license or concession agreements or
otherwise permit the occupancy or use of the Premises or any part thereof by any
persons other than Tenant and its employees and contractors (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee"). If Tenant desires Landlord's consent
to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than twenty (20) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) the terms of the proposed Transfer and the consideration
therefor, including the name and address of the proposed Transferee, (iv)
current financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and (v) an executed estoppel certificate from Tenant
in the form attached hereto as Exhibit E. Any Transfer made without Landlord's
prior written consent shall, at Landlord's option, be null, void and of no
effect, and shall, at Landlord's option, constitute a default by Tenant under
this Lease. Tenant shall pay Landlord a reasonable fee of $1,000 for costs
incurred by Landlord in connection with any Transfer.
14.2    Landlord's Consent. Landlord shall not unreasonably withhold, delay or
condition its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in the Transfer Notice. If Landlord consents
to any Transfer pursuant to the terms of this Section 14.2, Tenant may within
six (6) months after Landlord's consent, but not

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later than the expiration of said six (6) month period, enter into such Transfer
of the Premises or portion thereof, upon substantially the same terms and
conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease.
14.3    Effect of Transfer. In the event of any Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) a consent to any Transfer, if required, shall not be deemed
consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant
shall deliver to Landlord, promptly after execution, an original executed copy
of all documentation pertaining to the Transfer, and (iv) no Transfer relating
to this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve the originally named Tenant hereunder,
any subsequent Tenant, or any guarantor of the Lease from any liability under
this Lease, including, without limitation, in connection with the Subject Space.
14.4    Additional Transfers. For purposes of this Lease, the term "Transfer"
shall also include (i) the dissolution, merger, consolidation or other
reorganization of Tenant or (ii) the sale or other transfer of an aggregate of
more than fifty percent (50%) or more of the voting shares of Tenant within a
twelve (12) month period.
14.5    Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to: (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. Upon any assignment, the assignee shall assume
in writing all obligations and covenants of Tenant thereafter to be performed or
observed under this Lease. No collection or acceptance of rent by Landlord from
any Transferee shall be deemed a waiver of any provision of this Article 14 or
the approval of any Transferee or a release of Tenant from any obligation under
this Lease, whether theretofore or thereafter accruing. In no event shall
Landlord's enforcement of any provision of this Lease against any Transferee be
deemed a waiver of Landlord's right to enforce any term of this Lease against
Tenant or any other person. If Tenant's obligations hereunder have been
guaranteed, Landlord's consent to any Transfer shall not be effective unless the
guarantor also consents to such Transfer.
14.6    Deemed Consent Transfers. Notwithstanding anything to the contrary
contained in this Lease, (A) an assignment or subletting of all or a portion of
the Premises to an affiliate of Tenant (an entity which is controlled by,
controls, or is under common control with, Tenant as of the date of this Lease),
(B) a sale of corporate shares of capital stock in Tenant in connection with an
initial public offering of Tenant's stock on a nationally-recognized stock
exchange, (C) an assignment of the Lease to an entity which acquires all or
substantially all of the stock or assets of Tenant, or (D) an assignment of the
Lease to an entity which is the resulting entity of a merger or consolidation of
Tenant during the Lease Term, shall not be deemed a Transfer requiring
Landlord's consent under this Article 14 (any such assignee or sublessee
described in items (A) through (D) of this Section 14.8 hereinafter referred to
as a "Permitted Transferee"), provided that (i) Tenant notifies Landlord at
least ten (10) days following the effective date of any such assignment or
sublease and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such transfer or Permitted Transferee
as set forth above, (ii) Tenant is not in default, beyond any applicable notice
and cure period, and

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such assignment or sublease is not a subterfuge by Tenant to avoid its
obligations under this Lease, (iii) such Permitted Transferee shall be of a
character and reputation consistent with the quality of the Building and the
proposed use of the Premises by such Permitted Transferee is a Permitted Use,
(iv) in the case of a Transfer pursuant to Section 14.6 (A), (C) or (D) above,
such Permitted Transferee shall have a tangible net worth (not including
goodwill as an asset) computed in accordance with generally accepted accounting
principles ("Net Worth") at least equal to the Net Worth of Original Tenant on
the date of this Lease, (v) no assignment or sublease relating to this Lease,
whether with or without Landlord's consent, shall relieve Tenant from any
liability under this Lease, and (vi) the liability such Permitted Transferee
under either an assignment or sublease shall be joint and several with Tenant
and such Permitted Transferee, prior to the effective date of such Transfer,
furnishes Landlord with a written instrument satisfactory to Landlord agreeing
to be bound by all of the conditions, obligations and agreements contained in
the Lease. An assignee of Tenant's entire interest in this Lease who qualifies
as a Permitted Transferee may also be referred to herein as a "Permitted
Transferee Assignee." "Control," as used in this Section 14.8, shall mean the
ownership, directly or indirectly, of more than fifty percent (50%) of the
voting securities of, or possession of the right to vote, in the ordinary
direction of its affairs, of more than fifty percent (50%) of the voting
interest in, any person or entity.
14.7    If, in connection with the assignment of this Lease, or the subletting
of all or a portion of the Premises (other than to a Permitted Transferee, in
which case this provision shall not apply), the Rent due and payable by a
sublessee or assignee (or a combination of the rental payable under such
sublease or assignment, plus any bonus or other consideration therefor or
incident thereto) (“Sublease Rent”) exceeds the Rent payable under this Lease,
after deducting from such Sublease Rent the reasonable costs for alterations to
the subleased or assigned premises, market levels of free rent and tenant
improvement allowances and reasonable architects’, attorneys’ and brokerage fees
payable in connection with such sublease or assignment, then Tenant shall be
bound and obligated to pay Landlord, as additional rent hereunder, fifty percent
(50%) of all such excess Rent and other excess consideration within ten (10)
days following receipt thereof by Tenant.
ARTICLE 15
SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
15.1    Surrender of Premises. No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.

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15.2    Removal of Tenant Property by Tenant. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted. Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, and such items of furniture, equipment, business and trade fixtures,
free-standing cabinet work, movable partitions and other articles of personal
property owned by Tenant or installed or placed by Tenant at its expense in the
Premises, and such similar articles of any other persons claiming under Tenant,
as Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal.
ARTICLE 16
HOLDING OVER
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent shall
be payable at a monthly rate equal to the product of (A) the monthly Base Rent
and the Estimated Direct Expenses installment applicable during the last full
calendar month of the Lease Term, and (B) a percentage equal to (i) one hundred
twenty five percent (125%) during the first two (2) months immediately following
the expiration or earlier termination of the Lease Term, (ii) one hundred fifty
percent (150%) during the next two (2) months, and (iii) two hundred percent
(200%) thereafter. Such month-to-month tenancy shall be subject to every other
applicable term, covenant and agreement contained herein. Nothing contained in
this Article 16 shall be construed as consent by Landlord to any holding over by
Tenant, and Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises to Landlord as provided in this Lease upon the
expiration or other termination of this Lease. The provisions of this Article 16
shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law. If Tenant fails to surrender the
Premises upon the termination or expiration of this Lease, in addition to any
other liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender and any lost profits to Landlord
resulting therefrom.
ARTICLE 17
ESTOPPEL CERTIFICATES
Within ten (10) business days following a request in writing by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an estoppel certificate
substantially in the form of Exhibit E, attached hereto (or such other form as
may be reasonably required by any prospective mortgagee or purchaser of the
Project, or any portion thereof), indicating therein any exceptions

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thereto that may exist at that time. Such requested estoppel certificates may
also request verification of such other factual information reasonably requested
by Landlord or Landlord's mortgagee or prospective mortgagee, but Tenant shall
not be obligated to sign any estoppels certificate which seeks to amend this
Lease. Any such certificate may be relied upon by any prospective mortgagee or
purchaser of all or any portion of the Project. Within ten (10) business days
following a request in writing by Tenant, Landlord shall execute, acknowledge
and deliver to Tenant an estoppel certificate confirming that this Lease is in
full force and effect, and such other factual information reasonably requested
by Tenant.
ARTICLE 18
SUBORDINATION
Tenant subordinates this Lease and all rights of Tenant under this Lease to any
mortgage, deed of trust, ground lease or vendor’s lien, or similar instrument
which may from time to time be placed upon the Premises (and all renewals,
modifications, replacements and extensions of such encumbrances), and each such
mortgage, deed of trust, ground lease or lien or other instrument shall be
superior to and prior to this Lease. Landlord shall obtain for the benefit of
Tenant, from any future mortgagee or ground lessor, a subordination,
non-disturbance and attornment agreement (“SNDA”) in the form of Exhibit G,
attached hereto (or such other form as may be reasonably required by any
prospective mortgagee or purchaser of the Project, or any portion thereof).
Notwithstanding the foregoing, the holder or beneficiary of such mortgage, deed
of trust, ground lease, vendor’s lien or similar instrument shall have the right
to subordinate or cause to be subordinated any such mortgage, deed of trust,
ground lease, vendor’s lien or similar instrument to this Lease. Tenant shall,
within twenty (20) days of request by Landlord, execute an SNDA in the form
described above to evidence or confirm the subordination or superiority of this
Lease to any such mortgages, trust deeds, ground leases or underlying leases,
provided such instrument does not amend this Lease in any materially adverse
way. Tenant waives the provisions of any current or future statute, rule or law
which may give or purport to give Tenant any right or election to terminate or
otherwise adversely affect this Lease and the obligations of the Tenant
hereunder in the event of any foreclosure proceeding or sale.
ARTICLE 19
DEFAULTS; REMEDIES
19.1    Events of Default. The occurrence of any of the following shall
constitute a default of this Lease by Tenant (a default which remains uncured
beyond the applicable grace or cure period being herein an “event of default”):
19.1.1    Any failure by Tenant to pay any Rent or any other charge required to
be paid under this Lease, or any part thereof, when due unless such failure is
cured within five (5) days after notice; provided, however, Landlord shall only
be obligated to provide such written notice to Tenant one (1) time within any
consecutive twelve (12) month period and in the event Tenant fails to timely pay
Rent or any other sums for a second (2nd) time during any consecutive twelve
(12) month period, then Tenant shall be in default for such late payment and
Landlord

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shall have no obligation or duty to provide notice of such non-payment to Tenant
prior to declaring an event of default under this Lease; or
19.1.2    Except where a specific time period is otherwise set forth for
Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a thirty (30) day period, Tenant shall
not be deemed to be in default if it shall commence such performance within such
thirty (30) day period and thereafter diligently pursue, with all commercially
reasonable efforts, to rectify and cure such default within a commercially
reasonable timeframe; or
19.1.3    To the extent permitted by law, (i) Tenant or any guarantor of this
Lease being placed into receivership or conservatorship, or becoming subject to
similar proceedings under Federal or State law, or (ii) a general assignment by
Tenant or any guarantor of this Lease for the benefit of creditors, or (iii) the
taking of any corporate action in furtherance of bankruptcy or dissolution
whether or not there exists any proceeding under an insolvency or bankruptcy
law, or (iv) the filing by or against Tenant or any guarantor of any proceeding
under an insolvency or bankruptcy law, unless in the case of such a proceeding
filed against Tenant or any guarantor the same is dismissed within sixty (60)
days, or (v) the appointment of a trustee or receiver to take possession of all
or substantially all of the assets of Tenant or any guarantor, unless possession
is restored to Tenant or such guarantor within thirty (30) days, or (vi) any
execution or other judicially authorized seizure of all or substantially all of
Tenant's assets located upon the Premises or of Tenant's interest in this Lease,
unless such seizure is discharged within thirty (30) days.
The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.
19.2    Remedies Upon Default. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever. Notwithstanding the foregoing, or any other provision of
this Lease to the contrary, Landlord shall not have the right to accelerate the
Rent due hereunder other than pursuant to the liquidated damages provision set
forth in Section 19.2.1 below, which once elected by Landlord shall be its sole
remedy; provided, however, if Landlord is unsuccessful in obtaining the full
amount of such remedy against Tenant as provided in Section 19.2.1 below, then
Landlord shall be entitled to pursue any other remedy available to Landlord in
this Lease, provided such other remedy does not include the acceleration of the
Rent due hereunder.
19.2.1    Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take

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possession of the Premises and expel or remove Tenant and any other person who
may be occupying the Premises or any part thereof, without being liable for
prosecution or any claim or damages therefor; and Landlord may recover from
Tenant the following:
19.2.1.1    The worth at the time of award of any unpaid rent which has been
earned at the time of such termination; plus
19.2.1.2    The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
19.2.1.3    The worth at the time of award of the amount by which the unpaid
rent for the balance of the Lease Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
19.2.1.4    Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to, (a) any improvement
allowance(s) granted to any new tenant(s) in connection with a lease of all or a
portion of the Premises, (b) any free rent concessions granted to any new
tenant(s) in connection with a lease of all or a portion of the Premises, (c)
any legal expenses incurred in connection with a lease of all or a portion of
the Premises, and (d) any brokerage commissions incurred by Landlord in leasing
all or any portion of the Premises to any such new tenant(s); provided, however,
(i) the foregoing items (a), (b), (c) and (d) shall only apply to the extent
Landlord enters into a replacement lease (or leases) which commences in advance
of the otherwise scheduled expiration date of the Lease Term, (ii) such
foregoing items (a), (b), and (c) shall be amortized over the initial term of
the particular replacement lease(s) on a level payment basis, and Tenant shall
only be responsible for the amortized amounts which fall within what would have
been the Lease Term had the Lease not terminated pursuant to the terms of this
Section 19.2.1 (i.e., any such amortized amounts which are to be paid by such
new tenant after what was the then-scheduled expiration date (e.g., the Lease
Expiration Date or otherwise) shall not be imposed upon the Tenant), and (iii)
the amounts under the foregoing item (d) shall be allocated such that in each
year of the relevant replacement lease the new tenant shall be deemed, in this
instance, to be reimbursing Landlord for the actual brokerage commissions
applicable to that particular year (or portion thereof), and Tenant shall only
be responsible for the amounts of the brokerage commissions which fall within
what would have been the then-applicable term of this Lease if the same had not
been terminated (for purposes of example only, if this Lease is terminated
pursuant to the terms of this Section 19.2.1 during the fourth (4th) full
calendar year and Landlord enters into a replacement lease with a term of ten
(10) years commencing on the date immediately following the last day of the
calendar month in which the fifty (5th) anniversary of the Lease Commencement
Date occurs and the brokerage commissions payable under such replacement lease
are equal to four percent (4%) of the rentals payable thereunder during years
one (1) through five (5) and two percent (2%) of the rentals payable thereafter,
Tenant shall be responsible for reimbursing Landlord for the brokerage
commissions applicable to the first five (5) years of the replacement lease term
(i.e., four percent (4%) per year)); and

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19.2.1.5    At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Sections 19.2.1.1 and
19.2.1.2, above, the "worth at the time of award" shall be computed by allowing
interest at the Interest Rate. As used in Section 19.2.1.1.3, above, the "worth
at the time of award" shall be computed by discounting such amount at the "Bank
Prime Rate" (as that term is defined in Article 25 of this Lease) at the time of
award plus one percent (1%).
19.2.2    If Landlord does not elect to terminate this Lease on account of any
default by Tenant, Landlord may continue the Lease in effect (whether or not
Tenant has abandoned or vacated the Premises) and, from time to time, without
terminating this Lease, enforce all of its rights and remedies under this Lease,
including the right to recover all rent as it becomes due.
19.2.3    Landlord may re-enter and attempt to relet the Premises without
terminating this Lease and remove all persons and property from the Premises
(which property may be removed and stored in a public warehouse or elsewhere at
the sole cost and risk of, and for the account of, Tenant), all without service
of notice or resort to legal process and without being deemed guilty of
trespass, or any liability of Landlord for any loss or damage which may be
occasioned thereby. If Landlord, without terminating this Lease, either (i)
elects to re-enter the Premises and attempts to relet the Premises, (ii) takes
possession of the Premises pursuant to legal proceedings, or (iii) takes
possession of the Premises pursuant to any notice provided by law, then Landlord
may, from time to time, make such alterations and repairs as may be necessary in
order to relet the Premises or any part thereof for such term or terms (which
may be for a term extending beyond the Lease Term) and at such rent and other
terms as Landlord in its reasonable discretion deems advisable. Upon such
reletting, all rent received by Landlord from such reletting shall be applied,
first to the payment of any indebtedness of Tenant to Landlord (other than for
any rent due hereunder); second, to the payment of any costs and expenses of
obtaining possession and any such reletting, including the expense of
alterations and repairs, brokerage fees and attorneys' fees; third, to the
payment of any rent due and unpaid hereunder. If such rents and any other
amounts received from such reletting during any month are less than that to be
paid during that month by Tenant, then Tenant shall immediately pay such
deficiency to Landlord. No such re-entry or taking of possession of the Premises
by Landlord shall be construed as an election by Landlord to terminate this
Lease unless a notice of such intention is given by Landlord to Tenant.
Notwithstanding any such reletting without termination, Landlord may at any time
thereafter elect to terminate this Lease for such previous default and pursue
the remedy set forth in Section 19.2.1 above.
19.2.4    Landlord shall at all times have the rights and remedies (which shall
be cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 19.2.1, 19.2.2 and 19.2.3, above, or any law
or other provision of this Lease), without prior demand or notice except as
required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.

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19.3    Subleases of Tenant. Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4    Efforts to Relet. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
19.5    Landlord Default. Notwithstanding anything to the contrary set forth in
this Lease, Landlord shall be in default in the performance of any obligation
required to be performed by Landlord pursuant to this Lease if Landlord fails to
perform such obligation within thirty (30) days after the receipt of notice from
Tenant specifying in detail Landlord's failure to perform; provided, however, if
the nature of Landlord's obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be in default under this
Lease if it shall commence such performance within such thirty (30) day period
and thereafter diligently pursues the same to completion. Except as expressly
otherwise set forth in this Lease, Tenant’s sole and exclusive remedies for a
default or breach of this Lease by Landlord shall be (i) an action for damages,
and/or (ii) an action for injunctive relief; Tenant hereby waiving and agreeing
that, except as expressly otherwise set forth herein, Tenant shall have no
offset rights or right to terminate this Lease on account of any breach or
default by Landlord under this Lease. Notwithstanding the foregoing, upon any
such default by Landlord under this Lease, any final, non-appealable judgment
from a court of competent jurisdiction in favor of Tenant requiring payment by
Landlord which is not paid by Landlord within the time period directed by such
award, may be offset by Tenant from Rent next due and payable under this Lease;
however, Tenant may not deduct the amount of the award against more than fifty
percent (50%) of Base Rent next due and owing (until such time as the entire
amount of such judgment is deducted). Under no circumstances whatsoever shall
Landlord ever be liable for punitive, consequential or special damages or loss
of profits under this Lease and Tenant waives any rights it may have to such
damages under this Lease in the event of a breach or default by Landlord under
this Lease.
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
Landlord covenants that Tenant, on paying the Rent, charges for services and
other payments herein reserved and on keeping, observing and performing all the
other terms and conditions, provisions and agreements herein contained on the
part of Tenant to be kept,

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observed and performed, shall, during the Lease Term, peaceably and quietly
have, hold and enjoy the Premises subject to the terms and conditions,
provisions and agreements hereof without interference by any persons lawfully
claiming by or through Landlord. The foregoing covenant is in lieu of any other
covenant express or implied.
ARTICLE 21
SECURITY DEPOSIT
Landlord and Tenant hereby acknowledge and agree that Tenant shall not be
required to post any security deposit in connection with its lease of the
Premises during the Lease Term.
ARTICLE 22
[INTENTIONALLY OMITTED]
ARTICLE 23
SIGNS
23.1    Existing Exterior Signage. Tenant shall be entitled to maintain all
presently existing exterior signage on the Building, including the existing
exterior monument signage (collectively, the “Exterior Signage”). Upon the
expiration or earlier termination of this Lease, Tenant shall, at its sole cost
and expense, remove the Exterior Signage and repair all damage to the Building
caused by such removal in order to return the Building exterior to a Building
standard condition, as reasonably determined by Landlord. If Landlord installs
additional monument signage in the Project (for the Building), Tenant shall be
entitled to a prominent position on such additional signage. Landlord shall not
be entitled to erect any signage on the Building without Tenant’s prior written
consent, which may be withheld by Tenant in its sole and absolute discretion.
23.2    Prohibited Signage and Other Items. Tenant may not install any
additional signs on the exterior or roof of the Building or in the Common Areas.
23.2.1    Cost and Maintenance. The costs of Exterior Signage and the
installation, design, construction and any and all other costs associated with
the Exterior Signage, including, without limitation, utility charges and hook-up
fees, permits, and maintenance and repairs, shall be the sole responsibility of
Tenant.
23.2.2    Interior Signage. Tenant shall be entitled to place any signage on the
interior of the Building (“Interior Signage”), provided: (i) such signage
complies with applicable laws; and (ii) such signage is not visible from the
exterior of the Building. Upon the expiration or earlier termination of this
Lease, Tenant shall, at its sole cost and expense, remove the Interior Signage
and repair all damage to the Building caused by such removal in order to return
the Building interior to a Building standard condition, as reasonably determined
by Landlord.

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ARTICLE 24
COMPLIANCE WITH LAW
Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, "Applicable Laws").
At its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant's use of the Premises for a use other
than the Permitted Use, (ii) any future Alterations in the Premises, or (iii)
the Base Building, but, as to the Base Building, only to the extent such
obligations are triggered by any future Alterations, or Tenant's use of the
Premises for a use other than the Permitted Use. Should any standard or
regulation now or hereafter be imposed on Landlord or Tenant by a state, federal
or local governmental body charged with the establishment, regulation and
enforcement of occupational, health or safety standards for employers,
employees, landlords or tenants, then Tenant agrees, at its sole cost and
expense, to comply promptly with such standards or regulations. The judgment of
any court of competent jurisdiction or the admission of Tenant in any judicial
action, regardless of whether Landlord is a party thereto, that Tenant has
violated any of said governmental measures, shall be conclusive of that fact as
between Landlord and Tenant. Landlord shall comply with all Applicable Laws
relating to the Base Building, provided that compliance with such Applicable
Laws is not the responsibility of Tenant under this Lease. Landlord shall be
permitted to include in Operating Expenses any costs or expenses incurred by
Landlord under this Article 24 unless expressly excluded from Operating Expenses
under Section 4.2.4, above.
ARTICLE 25
LATE CHARGES
If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee when due, then Tenant shall pay to
Landlord a late charge equal to five percent (5%) of the overdue amount plus any
attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent
and/or other charges when due hereunder; provided, however, with regard to the
first such failure in any twelve (12) month period, Landlord will waive such
late charge to the extent Tenant cures such failure within five (5) business
days following Tenant's receipt of written notice from Landlord that the same
was not received when due. The late charge shall be deemed Additional Rent and
the right to require it shall be in addition to all of Landlord's other rights
and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner. In addition to the
late charge described above, any Rent or other amounts owing hereunder which are
not paid within thirty (30) days after the date they are due shall bear interest
from the date when due until paid at the "Interest Rate." For purposes of this
Lease, the "Interest Rate" shall be an annual rate equal to the lesser of (i)
the annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical
Release Publication H.15(519), published weekly (or such other comparable index
as Landlord and Tenant shall reasonably agree upon if such rate ceases to be
published), plus four (4) percentage points, and (ii) the highest rate permitted
by applicable law.

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ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
26.1    Landlord's Cure. All covenants and agreements to be kept or performed by
Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2    Tenant's Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, not later than thirty (30)
days following delivery by Landlord to Tenant of statements therefor: (i) sums
equal to expenditures reasonably made and obligations incurred by Landlord in
connection with the remedying by Landlord of Tenant's defaults (beyond the
applicable notice and cure period) pursuant to the provisions of Section 26.1;
(ii) sums equal to all losses, costs, liabilities, damages and expenses which
Tenant is obligated to pay pursuant to the terms of Section 10.1 of this Lease;
and (iii) in connection with any default by Tenant under this Lease (beyond the
applicable notice and cure period), sums equal to all expenditures made and
obligations reasonably incurred by Landlord in collecting or attempting to
collect the Rent or in enforcing or attempting to enforce any rights of Landlord
under this Lease or pursuant to law, including, without limitation, all
reasonable legal fees and other amounts so expended. Tenant's obligations under
this Section 26.2 shall survive the expiration or sooner termination of the
Lease Term.
ARTICLE 27
ENTRY BY LANDLORD
Landlord reserves the right at all reasonable times and upon at least
twenty-four (24) hours prior notice to Tenant (except in the case of an
emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers, or to current or prospective mortgagees, ground or
underlying lessors or insurers, or during the last twelve (12) months of the
Lease Term, to prospective tenants; (iii) post notices of nonresponsibility; or
(iv) alter, improve or repair the Premises or the Building, or for structural
alterations, repairs or improvements to the Building or the Building's systems
and equipment. Notwithstanding anything to the contrary contained in this
Article 27, Landlord may enter the Premises at any time to (A) perform standard
services required of Landlord (including, without limitation, the repair and
maintenance services required to be performed by Landlord); (B) take possession
due to any breach of this Lease in the manner provided in this Lease (following
the expiration of the applicable notice and cure period); and (C) perform any
covenants of Tenant which Tenant fails to perform (following the expiration of
the applicable notice and cure period). Landlord may make any such entries
without the abatement of Rent, except as otherwise provided in this Lease, and
may take such reasonable steps as required to accomplish the stated purposes;
provided, however, except for (x) emergencies, (y) repairs, alterations,
improvements or additions required by governmental or

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quasi-governmental authorities or court order or decree, or (z) repairs which
are the obligation of Tenant hereunder, any such entry shall be performed in a
manner so as not to unreasonably interfere with Tenant's use of the Premises and
shall be performed after normal business hours if reasonably practical. With
respect to items (y) and (z) above, Landlord shall use commercially reasonable
efforts to not materially interfere with Tenant's use of, or access to, the
Premises. Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of the above purposes, Landlord shall at all times have a key
with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises by
Landlord in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.
ARTICLE 28
TENANT PARKING
Tenant shall rent from Landlord, commencing on the Lease Commencement Date, the
amount of parking passes set forth in Section 9 of the Summary, on a monthly
basis throughout the Lease Term, which parking passes shall pertain to the
Project parking facility. Tenant's continued right to use the parking passes is
conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
facility where the parking passes are located, including any sticker or other
identification system established by Landlord, Tenant's cooperation in seeing
that Tenant's employees and visitors also comply. Landlord shall provide Tenant
with notice of any change in the rules and regulations not less than ten (10)
days prior to the implementation of any new rules or regulations. Landlord may
delegate its responsibilities hereunder to a parking operator in which case such
parking operator shall have all the rights of control attributed hereby to
Landlord. The parking passes provided to Tenant pursuant to this Article 28 are
provided to Tenant solely for use by Tenant's own personnel and such passes may
not be transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval. Tenant may validate visitor parking by such method or
methods as Landlord may establish, at the validation rate from time to time
generally applicable to visitor parking. Landlord shall maintain and operate the
Project parking facility in a manner consistent with the parking facilities
servicing the Comparable Buildings.
ARTICLE 29
MISCELLANEOUS PROVISIONS
29.1    Terms; Captions. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. The necessary grammatical changes
required to make

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the provisions hereof apply either to corporations or partnerships or
individuals, men or women, as the case may require, shall in all cases be
assumed as though in each case fully expressed. The captions of Articles and
Sections are for convenience only and shall not be deemed to limit, construe,
affect or alter the meaning of such Articles and Sections.
29.2    Binding Effect. Subject to all other provisions of this Lease, each of
the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.3    No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.4    Modification of Lease. Should any mortgagee or ground lessor for the
Building or Project require a modification of this Lease, which modification
will not cause an increased cost or expense to Tenant or in any other way
materially and adversely change the rights and obligations of Tenant hereunder,
then and in such event, Tenant agrees that this Lease may be so modified and
agrees to execute whatever documents are reasonably required therefor and to
deliver the same to Landlord within ten (10) days following a request therefor,
provided that Landlord shall reimburse Tenant for any reasonable and actual
out-of-pocket attorneys' fees actually incurred by Tenant in connection with its
review of such documents. At the request of Landlord or any mortgagee or ground
lessor, Tenant agrees to execute a short form of Lease and deliver the same to
Landlord within ten (10) days following the request therefor.
29.5    Transfer of Landlord's Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, and Tenant shall attorn to such transferee.
Tenant further acknowledges that Landlord may assign its interest in this Lease
to a mortgage lender as additional security and agrees that such an assignment
shall not release Landlord from its obligations hereunder and that Tenant shall
continue to look to Landlord for the performance of its obligations hereunder.
29.6    Prohibition Against Recording or Publication. Neither this Lease, nor
any memorandum, affidavit or other writing with respect thereto, shall be
recorded or otherwise published by Tenant or by anyone acting through, under or
on behalf of Tenant.
29.7    Landlord's Title. Landlord's title is and always shall be paramount to
the title of Tenant. Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.

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29.8    Relationship of Parties. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.9    Application of Payments. Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant's designation
of such payments, to satisfy any obligations of Tenant hereunder, in such order
and amounts as Landlord, in its commercially reasonable discretion, may elect.
29.10    Time of Essence. Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.
29.11    Partial Invalidity. If any term, provision or condition contained in
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.12    No Warranty. In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
29.13    Landlord Exculpation. If Landlord or any successor in interest or
assignee shall be an individual, joint venture, tenancy in common, limited
liability company, firm or partnership, general or limited, it is specifically
understood and agreed that there shall be no personal liability for damages
against such individual or the members of the joint venture, tenancy in common,
limited liability company, firm or partnership, general or limited, in respect
to any breach of the terms, covenants or conditions of this Lease, and Tenant
shall look solely to the equity of Landlord in the Project for the recovery of
damages in the event of a breach by Landlord of any of the terms, covenants and
conditions of this Lease to be performed by Landlord or any successor in
interest as aforesaid. There shall be no such limitation of personal liability
on the part of any of the aforesaid individuals in the event of (i) a
misapplication or misappropriation of insurance proceeds and/or any award paid
in the event of a condemnation, (ii) a misapplication or misappropriation of any
amounts paid in escrow, in trust, or otherwise to Landlord to be used for a
specific purpose as set forth in this Lease, and/or (iii) any fraudulent
conduct.
29.14    Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms,

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covenants, conditions or provisions of this Lease can be modified, deleted or
added to except in writing signed by the parties hereto.
29.15    Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.16    Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to (i) the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease, (ii)Tenant's obligations under Articles 5 and 24 of this
Lease, and (iii) payments of any kind to be made by Landlord pursuant to this
Lease (collectively, a "Force Majeure"), notwithstanding anything to the
contrary contained in this Lease, shall excuse the performance of such party for
a period equal to any such prevention, delay or stoppage and, therefore, if this
Lease specifies a time period for performance of an obligation of either party,
that time period shall be extended by the period of any delay in such party's
performance caused by a Force Majeure.
29.17    Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, Tenant's right of occupancy of the Premises after any termination of this
Lease.
29.18    Notices. All notices, demands, statements or communications
(collectively, "Notices") given or required to be given by either party to the
other hereunder or by law shall be in writing, shall be (A) delivered by a
nationally recognized overnight courier, or (B) delivered personally. Any such
Notice shall be delivered (i) to Tenant at the appropriate address set forth in
Section 10 of the Summary, or to such other place as Tenant may from time to
time designate in a Notice to Landlord, or (ii) to Landlord at the appropriate
address set forth in Section 10 of the Summary, or to such other places as
Landlord may from time to time designate in a Notice to Tenant. Any Notice will
be deemed given on the date of receipted delivery, of refusal to accept
delivery, or when delivery is first attempted but cannot be made due to a change
of address for which no Notice was given. If Tenant is notified of the identity
and address of Landlord's mortgagee or ground or underlying lessor, Tenant shall
give to such mortgagee or ground or underlying lessor written notice of any
default by Landlord under the terms of this Lease by registered or certified
mail, and such mortgagee or ground or underlying lessor shall be given a
reasonable opportunity to cure such default prior to Tenant's exercising any
remedy available to Tenant. The party delivering Notice shall use commercially
reasonable efforts to provide a courtesy copy of each such Notice to the
receiving party via electronic mail.
29.19    Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.

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29.20    Authority. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the State of Washington and that Tenant has full right and authority
to execute and deliver this Lease and that each person signing on behalf of
Tenant is authorized to do so. In such event, Tenant shall, within ten (10) days
after execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in the State of Washington.
29.21    Attorneys' Fees. In the event that either Landlord or Tenant should
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
29.22    Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed
and enforced in accordance with the laws of the State of Washington. IN ANY
ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I)
THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF WASHINGTON, (II)
SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY WASHINGTON LAW, AND (III) IN THE
INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.23    Submission of Lease. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
29.24    No Brokers. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, and that they know of no real estate broker or agent
who is entitled to a commission in connection with this Lease. Each party agrees
to indemnify and defend the other party against and hold the other party
harmless from any and all claims, demands, losses, liabilities, lawsuits,
judgments, costs and expenses (including without limitation reasonable
attorneys' fees) with respect to any leasing commission or equivalent
compensation alleged to be owing on account of

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any dealings with any real estate broker or agent occurring by, through, or
under the indemnifying party.
29.25    Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
29.26    Project or Building Name and Signage. Landlord shall have the right at
any time, upon not less than thirty (30) days’ prior written notice to Tenant,
to change the name of the Project or Building. Landlord shall not place an
exterior signage on the Building without the prior written consent of Tenant,
which consent may be withheld by Tenant in its sole discretion.
29.27    Counterparts. This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.28    Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.
29.29    Hazardous Materials.
29.29.1 Definitions. For purposes of this Lease, "Hazardous Material(s)" shall
mean and include those elements or compounds which are contained in the list of
hazardous substances now or hereafter adopted by the United States Environmental
Protection Agency (the “EPA”), or the list of toxic pollutants designated by
EPA, or which are now or hereafter defined as hazardous, toxic, pollutant,
infectious or radioactive by any other Federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in
effect (the "Environmental Laws").
29.29.2 Compliance with Environmental Laws. Landlord covenants that during the
Lease Term, Landlord shall comply with all Environmental Laws in accordance
with, and as required by, the terms and conditions of this Lease. Tenant
represents and warrants that, except as herein set forth, it will not use, store
or dispose of any Hazardous Materials in or on the Premises. However,
notwithstanding the preceding sentence, Landlord agrees that Tenant may use,
store and properly dispose of commonly available chemicals to maintain the
Premises and Tenant’s routine office operations (such as, without limitation,
printer and copier toner or office cleaning supplies) (hereinafter the
“Permitted Chemicals”). Landlord and Tenant acknowledge that any or all of the
Permitted Chemicals described in this paragraph may constitute Hazardous
Materials. However, Tenant may use, store and dispose of the same, provided that
in doing so, Tenant fully complies with all Environmental Laws.

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29.29.3 Landlord’s Right of Environmental Audit. Landlord may, upon reasonable
notice to Tenant, be granted access to and enter the Premises no more than once
annually to perform or cause to have performed an environmental inspection, site
assessment or audit. Such environmental inspector or auditor may be chosen by
Landlord, in its sole discretion, and be performed at Landlord’s sole expense.
To the extent that the report prepared upon such inspection, assessment or
audit, indicates the presence of Hazardous Materials in violation of
Environmental Laws (which Hazardous Materials were not brought onto the Premises
by Landlord or any of the Landlord Parties), Tenant shall promptly, at Tenant’s
sole expense, perform such additional investigative or subsurface investigations
or remediation(s) as recommended by such inspector or auditor. Notwithstanding
the above, if at any time, Landlord has actual notice or reasonable cause to
believe that Tenant has violated, or permitted any violations of any
Environmental Law, then Landlord will be entitled to perform its environmental
inspection, assessment or audit at any time, notwithstanding the above mentioned
annual limitation, and Tenant must reimburse Landlord for the cost or fees
incurred for such inspection, assessment or audit as Additional Rent, but only
to the extent it is actually determined that Tenant is in violation of
Environmental Laws.
29.29.4 [Intentionally Omitted].
29.29.5 Landlord Notification. Tenant shall promptly provide Landlord with
complete copies of all documents, correspondence and other written materials
directed to or from, or relating to, Tenant concerning environmental issues at
the Premises or the Project, including, without limitation, documents relating
to the release, potential release, investigation, compliance, cleanup and
abatement of Hazardous Materials, and any claims, causes of action or other
legal documents related to same. As soon as reasonably possible following any
unauthorized release, spill, discharge, generation or discovery of generation of
any Hazardous Materials, in, on, or about the Premises or Project, Tenant shall
provide written notice to Landlord fully describing the event. Tenant shall also
provide Landlord with a copy of any document or correspondence submitted by or
on behalf of Tenant to any regulatory agency as a result of or in connection
with any unauthorized release, spill, discharge or generation of any Hazardous
Materials in the Premises or the Project. As soon as reasonably possible
following receipt by Tenant of any warning, notice of violation, permit
suspension or similar disciplinary measure relating to Tenant's actual or
alleged failure to comply with any Environmental Laws, Tenant shall provide
written notice to Landlord.
29.29.6    Remedial Work. In the event that any Hazardous Material is discovered
by Tenant within the Premises after the date of this Lease (other than Permitted
Chemicals), Tenant shall promptly notify Landlord, and shall consult with
Landlord concerning appropriate procedures to be followed. If any investigation
or monitoring of site conditions or any clean-up, containment, restoration,
removal or remediation of Hazardous Materials (collectively, "Remedial Work") is
required under any Environmental Laws as a result of the handling, use, storage,
treatment, transportation or disposal of any Hazardous Materials by Tenant, its
agents, employees, contractors or invitees, then Tenant shall perform or cause
to be performed the Remedial Work in compliance with Environmental Laws;
provided, however, prior to undertaking such Remedial Work, Tenant shall first
receive Landlord's approval with respect to the Remedial Work, the contractors
to be retained in connection with such Remedial Work and the consulting
engineers to be retained in connection with such Remedial Work (which foregoing

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approvals shall not be unreasonably withheld, delayed or conditioned). All costs
and expenses of such Remedial Work shall be paid by Tenant, including, without
limitation, the charges of such contractor(s), the consulting engineer and
Landlord's reasonable fees and costs incurred in connection with monitoring or
review of such Remedial Work. Tenant shall provide Landlord, within thirty (30)
days following the completion of the relevant Remedial Work, with complete
copies of all documentation related to such Remedial Work performed or
undertaken by, or at the request of, Tenant (including, but not limited to, all
correspondences (including, but not limited to, electronic mail
correspondences), test results, reports, contracts, permits, approvals etc.).
29.30    Development of the Project.
29.30.1 Subdivision. Landlord reserves the right to further subdivide all or a
portion of the Project. Tenant agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord, any additional documents needed
to conform this Lease to the circumstances resulting from such subdivision,
provided that Landlord shall reimburse Tenant for any reasonable and actual
out-of-pocket attorneys' fees actually incurred by Tenant in connection with its
review and negotiation of such documents.
29.30.2 The Other Improvements. If portions of the Project or property adjacent
to the Project (collectively, the "Other Improvements") are owned by an entity
other than Landlord, Landlord, at its option, may enter into an agreement with
the owner or owners of any or all of the Other Improvements to provide (i) for
reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (iv) for the use or improvement of the Other
Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project,
provided that Landlord shall not take any actions that would materially and
adversely diminish Tenant’s use of or operation within the Premises. Nothing
contained herein shall be deemed or construed to limit or otherwise affect
Landlord's right to convey all or any portion of the Project or any other of
Landlord's rights described in this Lease.
29.30.3 Construction of Project and Other Improvements. Tenant acknowledges that
portions of the Project and/or the Other Improvements may be under construction
following Tenant's occupancy of the Premises, and that such construction may
result in levels of noise, dust, obstruction of access, etc. which are in excess
of that present in a fully constructed project. Tenant hereby waives any and all
rent offsets or claims of constructive eviction which may arise in connection
with such construction. Landlord shall use commercially reasonable efforts to
have all such work performed on a continuous basis, and once started, to be
completed with reasonable expedition, with such work being organized and
conducted in a manner which will minimize any interference to Tenant's business
operations in, or access to, the Premises, the Project parking facilities and
the Common Areas.
29.31    No Discrimination. Tenant covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
Tenant, and this Lease is made and accepted upon and subject to the following
conditions: that there shall be no

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discrimination against or segregation of any person or group of persons, on
account of race, color, creed, sex, religion, marital status, ancestry or
national origin in the leasing, subleasing, transferring, use, or enjoyment of
the Premises, nor shall Tenant itself, or any person claiming under or through
Tenant, establish or permit such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy,
of tenants, lessees, sublessees, subtenants or vendees in the Premises.
29.32    Satellite Dishes. Landlord hereby covenants and agrees that Landlord
shall not unreasonably withhold, delay or condition its consent to a proposal by
Tenant to install, maintain and replace from time to time up to three (3)
satellite dishes or similar antennae devices, in a location designated by
Landlord, the height and width of such devices to be reasonably acceptable to
Landlord, but in any event not exceeding two (2) feet in diameter (hereinafter,
individually or collectively, the “Satellite Dish”) on the roof of the Building,
subject to the following: (a) applicable governmental laws; (b) the right of
Landlord to supervise any roof penetrations; (c) Landlord’s approval of the
plans and specifications for the Satellite Dish and all connecting cables from
the roof of the Building to the Premises; (d) compliance with the conditions of
any roof bond maintained by Landlord on the Premises; (e) the Satellite Dish not
being visible at street level, and (f) the Satellite Dish not interfering with
any then existing satellite dish or other antenna on the roof of the Building.
Tenant shall be responsible for the repair of any damage to any portion of the
Building caused by Tenant’s installation, use or removal of the Satellite Dish.
The Satellite Dish shall remain the exclusive property of Tenant, and Tenant
shall have the right to remove same at any time during the term of the Lease so
long as Tenant is not in default under the Lease. Tenant shall protect, defend,
indemnify and hold harmless Landlord from and against any and all claims,
damages, liabilities, costs or expenses of every kind and nature (including
without limitation reasonable attorney’s fees) imposed upon or incurred by or
asserted against Landlord arising out of Tenant’s installation, maintenance, use
or removal of the Satellite Dish.

[Remainder of this page intentionally left blank, signature pages follow]

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.
“LANDLORD”    

KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer
"TENANT":
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation

By:
 
Name:
 
Title:
 
 
 
 
 
 

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NOTARY PAGE
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, on oath stated that he was authorized to execute the
instrument and acknowledged it as the _______________________ of KBS SOR 156TH
AVENUE NORTHEAST, LLC, a Delaware limited liability company, to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated: ____________ __, 2012
____________________________________________
(Signature)
(Seal or stamp)
Title: ______________________________________
Notary Public in and for the State of __________________
My appointment expires: ________________

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NOTARY PAGE

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, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the _______________________ of UNIGARD
INSURANCE COMPANY, a Wisconsin corporation, to be the free and voluntary act of
such party for the uses and purposes mentioned in the instrument.
Dated: ____________ __, 2012
____________________________________________
(Signature)
(Seal or stamp)
Title: ______________________________________
Notary Public in and for the State of _________________
My appointment expires: ________________

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EXHIBIT A
LEGAL DESCRIPTION OF THE PROJECT
LOTS 1, 2, 3, 4, 5 AND 6, UNIGARD INSURANCE COMPANY – UNIGARD PARK BINDING SITE
PLAN, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 198 OF PLATS, PAGE(S) 28
THROUGH 35, INCLUSIVE, IN KING COUNTY, WASHINGTON.

 
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EXHIBIT A-1
OUTLINE OF PREMISES
(PAGE 1 OF 3)
THE BASEMENT
[kbssorexhibit101exmpg1.jpg]

 
 
EXHIBIT A-1
 
 
 
 
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(PAGE 2 OF 3)
[kbssorexhibit101exmpg2.jpg]

 
 
EXHIBIT A-1
 
 
 
 
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(PAGE 3 OF 3)

[kbssorexhibit101exmpg3.jpg]

 
 
EXHIBIT A-1
 
 
 
 
-3-
 
 

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EXHIBIT A-2
SITE PLAN FOR THE PROJECT SHOWING THE LOCATION OF THE PREMISES
[kbssorexhibit101exmpg4.jpg]

 
EXHIBIT A-2
 
 
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EXHIBIT B
INTENTIONALLY OMITTED

 
EXHIBIT B
 
 
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EXHIBIT C
NOTICE OF LEASE TERM DATE
To:
 
 
 
 
 
 
 

Re:    Office Lease dated as of __________ __, 2012 between KBS SOR 156TH AVENUE
NORTHEAST, LLC, a Delaware limited liability company ("Landlord"), and UNIGARD
INSURANCE COMPANY, a Wisconsin corporation ("Tenant") concerning the entire
office building commonly known as Building E located at 15805 NE 24th Street
aand 15800 Northup Way, Bellevue, Washington 98008.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you and/or
confirm as follows:
1.
The Lease Term commenced on __________ __, 2012 for a term of ten (10) years
ending on __________ __, 2022.

2.
Rent commenced to accrue on __________ __, 2012, in the amount of
________________.

3.
If the Lease Commencement Date is other than the first day of the month, the
first billing will contain a pro rata adjustment. Each billing thereafter, with
the exception of the final billing, shall be for the full amount of the monthly
installment as provided for in the Lease.

4.
Your rent checks should be made payable to __________________ at
___________________.

5.
The exact number of rentable square feet within the Premises is 67,378 square
feet.

 
EXHIBIT C
 
 
-1-
 

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6.
Tenant's Share based upon the exact number of rentable square feet within the
Premises and the exact number of rentable square feet within the Project is
20.63%.

LANDLORD:

KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer

Agreed to and Accepted
as of ____________ __, 2012.
TENANT:    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation

By:
 
Name:
 
Its:
 
 
 
 
 
 

 
EXHIBIT C
 
 
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EXHIBIT D
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1.Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord's prior
written consent, which consent will not be unreasonably withheld, delayed or
conditioned. Tenant shall bear the cost of any lock changes or repairs required
by Tenant. Any additional keys required by Tenant must be obtained from Landlord
at a reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall deliver to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
2.Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building during such hours as are customary for Comparable
Buildings. Subject to the remaining provisions of the Lease, Tenant shall have
the right of access to the Premises, the Building, and the Project parking
facility twenty-four (24) hours per day, seven (7) days per week during the
Lease Term. Tenant shall be responsible for all persons for whom Tenant requests
passes and shall be liable to Landlord for all acts of such persons. Landlord
and its agents shall in no case be liable for damages for any error with regard
to the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, Landlord reserves
the right to prevent access to the Building or the Project during the
continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
3.Safes and other heavy objects shall, if considered necessary by Landlord,
stand on supports of such thickness as is necessary to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any such safe
or property in any case. Any damage to any part of the Building, its contents,
occupants or visitors by moving or maintaining any such safe or other property
shall be the sole responsibility and expense of Tenant.
4.The requirements of Tenant will be attended to only upon application at the
management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
5.No sign, advertisement, notice or handbill shall be exhibited, distributed,
painted or affixed by Tenant on any part of the Premises or the Building without
the prior written

 
EXHIBIT D
 
 
-3-
 

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consent of Landlord. Tenant shall not disturb, solicit, peddle, or canvass any
occupant of the Project and shall cooperate with Landlord and its agents of
Landlord to prevent same.
6.The toilet rooms, 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 expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
7.Tenant shall not overload the floor of the Premises.
8.Tenant shall not use or keep in or on the Premises, the Building, or the
Project any kerosene, gasoline, explosive material, corrosive material, material
capable of emitting toxic fumes, or other inflammable or combustible fluid
chemical, substitute or material.
9.Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Project by reason of noise, odors, or vibrations, or interfere
with other tenants or those having business therein, whether by the use of any
musical instrument, radio, phonograph, or in any other way. Tenant shall not
throw anything out of doors, windows or skylights or down passageways.
10.No cooking shall be done or permitted on the Premises, nor shall the Premises
be used for the storage of merchandise, for lodging or for any improper,
objectionable or immoral purposes. Notwithstanding the foregoing, Underwriters'
laboratory-approved equipment and microwave ovens may be used in the Premises
for heating food and brewing coffee, tea, hot chocolate and similar beverages
for employees and visitors, provided that such use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations.
11.The Premises shall not be used for manufacturing or for the storage of
merchandise unless, and except to the extent, such manufacturing or storage may
be incidental to the use of the Premises provided for in the Summary.
12.Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
13.Tenant, its employees and agents shall not loiter in or on the entrances,
corridors, sidewalks, lobbies, courts, halls, stairways, elevators, vestibules
or any Common Areas, nor in any way obstruct such areas, and shall use them only
as a means of ingress and egress for the Premises.
14.Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in Bellevue,
Washington without violation of any law or ordinance governing such disposal.
All trash, garbage and refuse disposal shall be made only

 
EXHIBIT D
 
 
-4-
 

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through entry-ways and elevators provided for such purposes at such times as
Landlord shall designate. If the Premises is or becomes infested with vermin as
a result of the use or any misuse or neglect of the Premises by Tenant, its
agents, servants, employees, contractors, visitors or licensees, Tenant shall
forthwith, at Tenant's expense, cause the Premises to be exterminated from time
to time to the satisfaction of Landlord and shall employ such licensed
exterminators as shall be approved in writing in advance by Landlord.
15.Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
16.Tenant shall not bring into or keep within the Project, the Building or the
Premises any firearms, animals (other than guide dogs to the extent required by
the owners of such dogs), birds, or, except in areas designated by Landlord,
bicycles or other vehicles.
17.No awnings or other projection shall be attached to the outside walls of the
Building without the prior written consent of Landlord. Tenant shall be
responsible for any damage to the window film on the exterior windows of the
Premises and shall promptly repair any such damage at Tenant's sole cost and
expense.
18.The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or
other articles be placed on the windowsills.
19.Tenant must comply with requests by Landlord concerning the informing of
their employees of items of importance to Landlord.
20.Tenant must comply with applicable "NO-SMOKING" ordinances and all related,
similar or successor ordinances, rules, regulations or codes. If Tenant is
required under the ordinance to adopt a written smoking policy, a copy of said
policy shall be on file in the office of the Building. In addition, no smoking
of any substance shall be permitted within the Project except in specifically
designated outdoor areas. Furthermore, in no event shall Tenant, its employees
or agents smoke tobacco products or other substances within any interior areas
of the Project or within fifty feet (50') of any entrance into the Building or
into any other Project building.
21.Tenant hereby acknowledges that Landlord shall have no obligation to provide
guard service or other security measures for the benefit of the Premises, the
Building or the Project. Tenant hereby assumes all responsibility for the
protection of Tenant and its agents, employees, contractors, invitees and
guests, and the property thereof, from acts of third parties, including keeping
doors locked and other means of entry to the Premises closed, whether or not
Landlord, at its option, elects to provide security protection for the Project
or any portion thereof. Tenant further assumes the risk that any safety and
security devices, services and programs which Landlord elects, in its sole
discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to
its other insurance obligations under this Lease, obtain its own insurance
coverage to the extent Tenant

 
EXHIBIT D
 
 
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desires protection against losses related to such occurrences. Tenant shall
cooperate in any reasonable safety or security program developed by Landlord or
required by law.
22.No auction, liquidation, fire sale, going-out-of-business or bankruptcy sale
shall be conducted in the Premises without the prior written consent of
Landlord.
23.No tenant shall use or permit the use of any portion of the Premises for
living quarters, sleeping apartments or lodging rooms.
Landlord reserves the right at any time to change or rescind any one or more of
these Rules and Regulations, or to make such other and further reasonable Rules
and Regulations as in Landlord's judgment may from time to time be necessary for
the management, safety, care and cleanliness of the Premises, Building, the
Common Areas and the Project, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein. Landlord
shall provide Tenant with at least ten (10) days prior written notice of any
change to the Rules and Regulations. Landlord may waive any one or more of these
Rules and Regulations for the benefit of any particular tenants, but no such
waiver by Landlord shall be construed as a waiver of such Rules and Regulations
in favor of any other tenant, nor prevent Landlord from thereafter enforcing any
such Rules or Regulations against any or all tenants of the Project. Tenant
shall be deemed to have read these Rules and Regulations and to have agreed to
abide by them as a condition of its occupancy of the Premises.

 
EXHIBIT D
 
 
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EXHIBIT E
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease") made and
entered into as of ___________ __, 2012 by and between KBS SOR 156TH AVENUE
NORTHEAST, LLC, a Delaware limited liability company, and the undersigned as
Tenant, for Premises comprising the entire office building known as "Building E"
located at 15805 NE 24th Street and 15800 Northup Way, Bellevue, Washington
98008, certifies as follows:
1.Attached hereto as Exhibit A is a true and correct copy of the Lease and all
amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises.
2.The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on __________ __, 2012, and the Lease Term expires on
__________ __, 2022, and the undersigned has no option to terminate or cancel
the Lease or to purchase all or any part of the Premises, the Building and/or
the Project.
3.Base Rent became payable on __________ __, 2012.
4.The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit A.
5.Tenant has not transferred, assigned, or sublet any portion of the Premises
nor entered into any license or concession agreements with respect thereto.
6.Tenant shall not modify the documents contained in Exhibit A without the prior
written consent of Landlord's mortgagee.
7.All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
___________. The current monthly installment of Base Rent is
$_____________________.
8.All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.
9.No rental has been paid more than thirty (30) days in advance and no security
has been deposited with Landlord except as provided in the Lease.
10.As of the date hereof, there are no existing defenses or offsets, or, to the
undersigned's knowledge, claims or any basis for a claim, that the undersigned
has against Landlord, except as follows: _____________________________.

 
EXHIBIT E
 
 
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11.Tenant is a duly formed and validly existing entity qualified to do business
in the State of Washington; Tenant has full right and authority to execute and
deliver this Estoppel Certificate; and each person signing this Estoppel
Certificate on behalf of Tenant is authorized to do so.
12.There are no actions pending against Tenant under the bankruptcy or similar
laws of the United States or any state.
13.To the undersigned's knowledge, all improvement work to be performed by
Landlord under the Lease has been completed in accordance with the Lease and has
been accepted by the undersigned and all reimbursements and allowances due to
the undersigned under the Lease in connection with any improvement work have
been paid in full.
The undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord or to a prospective mortgagee or prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring the
property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at ______________ on the ____ day of ___________, 20 _.
"Tenant":
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
By:
 
Name:
 
Title:
 
 
 
 
 
 

 
EXHIBIT E
 
 
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EXHIBIT F
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
 
 
 
 
 
 
Attention:
 

 
 
 
 
 

RECOGNITION OF COVENANTS,
CONDITIONS, AND RESTRICTIONS
This Recognition of Covenants, Conditions, and Restrictions (this "Agreement")
is entered into as of the __ day of ________, 20__, by and between KBS SOR 156TH
AVENUE NORTHEAST, LLC, a Delaware limited liability company ("Landlord"), and
UNIGARD INSURANCE COMPANY, a Wisconsin corporation ("Tenant"), with reference to
the following facts:
A.Landlord and Tenant entered into that certain Office Lease Agreement dated as
of ______________ __, 2012 (the "Lease"). Pursuant to the Lease, Landlord leased
to Tenant and Tenant leased from Landlord space (the "Premises") located in an
office building on certain real property described in Exhibit A attached hereto
and incorporated herein by this reference (the "Property").
B.The Premises are located in an office building located on real property which
is part of an area owned by Landlord containing approximately 46.6 acres of real
property located in the City of Bellevue, Washington (the "Project"), as more
particularly described in Exhibit B attached hereto and incorporated herein by
this reference.
C.Landlord, as declarant, has previously recorded, or proposes to record
concurrently with the recordation of this Agreement, a Declaration of Covenants,
Conditions, and Restrictions (the "Declaration"), dated ________________, 20__,
in connection with the Project.
D.Tenant is agreeing to recognize and be bound by the terms of the Declaration,
and the parties hereto desire to set forth their agreements concerning the same.
NOW, THEREFORE, in consideration of (a) the foregoing recitals and the mutual
agreements hereinafter set forth, and (b) for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows,

 
EXHIBIT F
 
 
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1.Tenant's Recognition of Declaration. Notwithstanding that the Lease has been
executed prior to the recordation of the Declaration, Tenant agrees to recognize
and by bound by all of the terms and conditions of the Declaration.
2.Miscellaneous.
2.1    This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, estates, personal representatives,
successors, and assigns.
2.2    This Agreement is made in, and shall be governed, enforced and construed
under the laws of, the State of Washington.
2.3    This Agreement constitutes the entire understanding and agreements of the
parties with respect to the subject matter hereof, and shall supersede and
replace all prior understandings and agreements, whether verbal or in writing.
The parties confirm and acknowledge that there are no other promises, covenants,
understandings, agreements, representations, or warranties with respect to the
subject matter of this Agreement except as expressly set forth herein.
2.4    This Agreement is not to be modified, terminated, or amended in any
respect, except pursuant to any instrument in writing duly executed by both of
the parties hereto.
2.5    In the event that either party hereto shall bring any legal action or
other proceeding with respect to the breach, interpretation, or enforcement of
this Agreement, or with respect to any dispute relating to any transaction
covered by this Agreement, the losing party in such action or proceeding shall
reimburse the prevailing party therein for all reasonable costs of litigation,
including reasonable attorneys' fees, in such amount as may be determined by the
court or other tribunal having jurisdiction, including matters on appeal.
2.6    All captions and heading herein are for convenience and ease of reference
only, and shall not be used or referred to in any way in connection with the
interpretation or enforcement of this Agreement.
2.7    If any provision of this Agreement, as applied to any party or to any
circumstance, shall be adjudged by a court of competent jurisdictions to be void
or unenforceable for any reason, the same shall not affect any other provision
of this Agreement, the application of such provision under circumstances
different from those adjudged by the court, or the validity or enforceability of
this Agreement as a whole.
2.8    Time is of the essence of this Agreement.
2.9    The Parties agree to execute any further documents, and take any further
actions, as may be reasonable and appropriate in order to carry out the purpose
and intent of this Agreement.

 
EXHIBIT F
 
 
-2-
 

--------------------------------------------------------------------------------

2.10    As used herein, the masculine, feminine or neuter gender, and the
singular and plural numbers, shall each be deemed to include the others whenever
and whatever the context so indicates.
[Remainder of this page intentionally left blank – signature pages follow]

 
EXHIBIT F
 
 
-3-
 

--------------------------------------------------------------------------------

SIGNATURE PAGE OF RECOGNITION OF
COVENANTS, CONDITIONS AND RESTRICTIONS
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
"LANDLORD":
KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:
KBS SOR ACQUISITION XIII, LLC,

a Delaware limited liability company,
its sole member

By:
KBS SOR PROPERTIES, LLC,

a Delaware limited liability company,
its sole member

By:
KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,

a Delaware limited partnership,
its sole member

By:
KBS STRATEGIC OPPORTUNITY REIT, INC.,

a Maryland corporation,
its sole general partner

By:    ________________________________
Name: David E. Snyder,
Title: Chief Financial Officer

"TENANT":    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
By:
 
Name:
 
Its:
 
 
 
 
 
 

 
EXHIBIT F
 
 
-4-
 

--------------------------------------------------------------------------------

EXHIBIT G
FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
LEASE SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT

This Lease Subordination, Non-Disturbance and Attornment Agreement (this
“Agreement”), made as of the _______day of ________________, 20__by and between
UNIGARD INSURANCE COMPANY, a Wisconsin corporation (“Lessee”) and
____________________, a _________________________ (“Lender”).

RECITALS

A. Lender is the holder of a certain promissory note (the “Note”) issued by
_______________________ (“Lessor”) dated ________________ in the original
principal sum of $________________________ and of the mortgage or deed of trust
of even date therewith (the “Mortgage”) securing the Note, which Mortgage
encumbers the real property (the “Property”) described on Exhibit A, attached
hereto and made a part hereof.

B. Lessee and Lessor are parties to a lease agreement (the “Lease”) dated as of
__________ __, 2012 by which Lessee leased from Lessor certain premises commonly
known as 15800 Northup Way, Bellevue, Washington 98008 (the “Leased Premises”),
and constituting a portion of the Property.

C. Lessee desires to be able to obtain the advantages of the Lease and occupancy
thereunder in the event of foreclosure of the Mortgage and Lender wishes to have
Lessee confirm the priority of the Mortgage over the Lease.

NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, the parties hereto agree as follows:

1. Lessee hereby covenants and agrees that all its rights and interests
whatsoever under the Lease in the Leased Premises and the Property are and shall
remain subject and subordinate to the lien of the Mortgage, to all of the rights
and interests of Lender under the Mortgage, to all advances made or to be made
thereunder or under the Note, and to any increases, renewals, extensions,
modifications, substitutions, consolidations or replacements thereof or of the
Note.

2. Lessee shall not be enjoined as a party defendant in any action or proceeding
which may be instituted or taken by reason of or under any default by Lessor in
the performance of the terms, covenants, conditions and agreements set forth in
the Mortgage, unless required by applicable law or unless at such time Lessee is
in default under the Lease (beyond any applicable grace or cure periods). So
long as Lessee is not in default (beyond any period given Lessee in the Lease to
cure such default) in the payment of rent or additional charges or in the
performance of any of the other terms, covenants or conditions of the Lease on
Lessee’s part to be performed, Lessee shall not be disturbed by Lender in
Lender’s possession of the Leased Premises during

 
[ACKNOWLEDGEMENT OF LESSEE]
 

--------------------------------------------------------------------------------

the term of the Lease, or any extension or renewal thereof, or in the enjoyment
of Lessee’s rights under the Lease.

3. If the interest of the Lessor under the Lease shall be acquired by Lender or
any purchaser (“Purchaser”) by reason of exercise of the power of sale or the
foreclosure of the Mortgage or other proceedings brought to enforce the rights
of the holder thereof, by deed in lieu of foreclosure or by any other method,
and Lender or Purchaser succeeds to the interest of Lessor under the Lease,
Lessee shall attorn to Lender or Purchaser as its lessor, said attornment to be
effective and self-operative without the execution of any other instruments on
the part of either party hereto immediately upon Lender’s or Purchaser’s
succeeding to the interest of the Lessor under the Lease, and the Lease shall
continue in accordance with its terms between Lessee as lessee and Lender or
Purchaser as lessor; provided, however, that:

(a)    Lender or Purchaser shall not be personally liable under the Lease and
Lender’s or Purchaser’s liability under the Lease shall be limited to the
ownership interest of Lender or Purchaser in the Property;
    
(b)    Lender or Purchaser shall not be liable for any act or omission of any
prior lessor (including Lessor);

(c)    Lender or Purchaser shall not be subject to any offsets or defenses which
Lessee might have against any prior lessor (including Lessor);

(d)    Lender or Purchaser shall not be bound by any rent or additional rent
which Lessee might have paid for more than the current month to any prior
landlord (including Lessee) other than overpayments of additional rent, which
shall be reconciled with the terms of the Lease;

(e)    Lender or Purchaser shall not be bound by any agreement or modification
of the Lease made without Lender’s or Purchaser’s written consent consent (which
consent will not be unreasonably withheld, delayed or conditioned);

(f)    Lender or Purchaser shall not be bound to commence or complete any
construction or to make any contribution toward construction or installation of
any improvements upon the Leased Premises or the Property required under the
Lease or any expansion or rehabilitation of existing improvements thereon, or
for the payment of any tenant allowance or incentive, or for restoration of
improvements following any casualty not required to be insured under the Lease
or for the costs of any restorations in excess of any proceeds recovered under
any insurance required to be carried under the Lease other than obligations
which arise under the terms of the Lease following
the date on which Lender or any other party shall succeed to the interest of
Landlord under the Lease; and

(g)    Lender or Purchaser shall not be bound by any radius restriction or other
restriction on competition beyond the Property.

 
EXHIBIT G
 
 
-6-
 

--------------------------------------------------------------------------------

Lessee expressly acknowledges and agrees that a default by Lessee under the
Lease (beyond any period given Lessee in the Lease to cure such default), (i)
shall terminate Lender's or Purchaser’s nondisturbance obligation, and (ii)
shall not terminate Lessee's attornment obligation or any other agreements by
Lessee set forth herein; provided, however, at Lender’s or Purchaser's sole
option, Lender or Purchaser may elect to reject Lessee's attornment by written
notice to Lessee delivered within thirty (30) days following acquisition of the
interest of Lessor. If Lender or Purchaser accepts such attornment, Lender or
Purchaser shall be entitled to exercise any or all of Lender’s or Purchaser’s
rights and remedies under the Lease and/or at law or in equity by reason of
default by Lessee under the Lease (beyond any period given Lessee in the Lease
to cure such default).

5. Lessee agrees with Lender that from and after the date hereof, Lessee will
not enter into any agreements amending the Lease without Lender’s prior written
consent and that Lessee will not terminate or seek to terminate the Lease by
reason of any act or omission of the Lessor thereunder until Lessee shall have
given written notice, by certified mail, return receipt requested, of said act
or omission to Lender, which notice shall be addressed to Lender cat
____________________________________ Attention: ____________, with a copy to:
____________________________________ Attention: ____________, and until a
reasonable period of time shall have elapsed following the giving of such
notices, during which period Lender shall have the right, but shall not be
obligated, to remedy such act or omission.

6. Lessee covenants that Lessee will not subordinate the Lease to any other
mortgage or deed of trust without Lender’s prior written consent.

7. Lessor, by Lessor’s execution of this Agreement, does hereby authorize Lessee
to make all rent and additional rent payments due under the Lease to Lender,
should Lender notify Lessee in writing that Lender is invoking Lender’s right
under the Mortgage to receive all rent and additional rent payments due under
the Lease, and hereby releases and discharges Lessee of and from any liability
to Lessor on account of any such payments. Lessor further agrees that it shall
not ask Lessee to subordinate the Lease to any other mortgage or deed of trust
without Lender’s prior written consent.

8. This Agreement shall inure to the benefit of and shall be binding upon
Lessee, Lessor, and Lender, and their respective heirs, personal
representatives, successors and assigns, including any co-lenders or
participants of the Loan, or any purchaser at a foreclosure sale or a
deed-in-lieu of foreclosure or similar transaction. This Agreement may not be
altered, modified or amended except in writing signed by all of the parties
hereto. In the event any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, but this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. This Agreement shall be governed by and construed according to the laws
of the state where the Property is located.

9.    Should any action or proceeding be commenced to enforce any of the
provisions of this Subordination, Non-Disturbance and Attornment Agreement or in
connection with its

 
EXHIBIT G
 
 
-7-
 

--------------------------------------------------------------------------------

meaning, each party in such action shall pay its own costs and expenses,
including, but not limited to, court cost and attorneys’ fees.
[Remainder of this page intentionally left blank]

 
EXHIBIT G
 
 
-8-
 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
WITNESSES (2)
 
LESSEE: UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
 
 
 
 
 
 
 
 
 

By:
 
 
 
Name:
 
 
 
Its:
 
 
 
 
 
 
 
 
 
 
 
 
 
WITNESSES (2)
 
 
 
 
 
[Insert Applicable Signature Block for
 
 Lender]
 
 
 
 
 
 
 
 
 
 

Consented to:

WITNESSES (2)    

LESSOR:
KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company

By:    KBS SOR ACQUISITION XIII, LLC,
a Delaware limited liability company,
its sole member

By:    KBS SOR PROPERTIES, LLC,
a Delaware limited liability company,
        

 
[ACKNOWLEDGEMENT OF LESSEE]
 

--------------------------------------------------------------------------------

its sole member

By:    KBS STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP,
a Delaware limited partnership,
its sole member

By:    KBS STRATEGIC OPPORTUNITY REIT, INC.,
a Maryland corporation,
its sole general partner

                
__________________________            By: _____________________________
Name: David E. Snyder
Its: Chief Financial Officer
__________________________

 
EXHIBIT G
 
 
-10-
 

--------------------------------------------------------------------------------

ACKNOWLEDGEMENTS

STATE OF
 
)
 
 
)
ss.
COUNTY OF
 
)
 
 
 
 
 
 

On _______________________, 20__ before me, ____________________________________
personally appeared _____________________________________________________, who
proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s) or the entity
upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of ____________
that the foregoing paragraph is true and correct.

WITNESS my hand and seal.

 
 
Signature
 
 
 
Print Name:
 

(SEAL)

 
[ACKNOWLEDGEMENT OF LESSEE]
 

--------------------------------------------------------------------------------

STATE OF
 
)
 
 
)
ss.
COUNTY OF
 
)
 
 
 
 
 
 

On _______________________, 20__ before me, ____________________________________
personally appeared _____________________________________________________, who
proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s) or the entity
upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of
________________ that the foregoing paragraph is true and correct.

WITNESS my hand and seal.

 
 
Signature
 
 
 
Print Name:
 

(SEAL)

 
[ACKNOWLEDGEMENT OF LESSEE]
 

--------------------------------------------------------------------------------

STATE OF
 
)
 
 
)
ss.
COUNTY OF
 
)
 
 
 
 
 
 

On _______________________, 20__ before me, ____________________________________
personally appeared _____________________________________________________, who
proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s) or the entity
upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of
_________________ that the foregoing paragraph is true and correct.

WITNESS my hand and seal.

 
 
Signature
 
 
 
Print Name:
 

(SEAL)

 
EXHIBIT A-2
 
 
-1-
 

--------------------------------------------------------------------------------

EXHIBIT A

Legal Description of Property

 
EXHIBIT A-2
 
 
-2-
 

--------------------------------------------------------------------------------

EXHIBIT H

INTENTIONALLY OMITTED

 
EXHIBIT H
 
 
-1-
 

--------------------------------------------------------------------------------

EXHIBIT I
JANITORIAL SPECIFICATIONS
1.
Areas Located Inside the Building (Except Restrooms)

1.1
Nightly – Five Times per Week

1.1.1
Empty trash receptacles

1.1.2
Clean all waste receptacles and reline as necessary.

1.1.3
Clean drinking fountains.

1.1.4
Spot clean all mirrors and glass.

1.1.5
Spot clean doors and frames.

1.1.6
Spot clean light switches.

1.1.7
Vacuum carpets and rugs as necessary.

1.1.8
Spot mop resilient floors.

1.1.9
Dust mop resilient floors.

1.1.10
Vacuum elevator floor.

1.1.11
Wipe down exterior elevator painted doors.

1.1.12
Wipe down stainless elevator interior and exterior.

1.1.13
Wipe and wash down entranceways.

1.1.14
Clean glass doors in lobby and wipe trim on doors with soft damp cloth and dry.

1.1.15
Spot clean rugs and carpets as necessary.

1.1.16
Maintain janitorial closets in a clean and neat condition.

1.2
Weekly

1.2.1
Spot clean walls.

1.2.2
Perform low dusting.

1.2.3
Dust windowsills and ledges.

1.3
Monthly

1.3.1
Wash, wax, and buff resilient floors.

1.3.2
Perform high dusting.

1.3.3
Clean vents.

2.
Restrooms

2.1
Nightly – Five times a week

2.1.1
Clean and disinfect all commodes, urinals, sinks and faucets, removing all dirt
and stains.

2.1.2
Refill all soap dispensers.

2.1.3
Clean all chrome and metal fixtures.

2.1.4
Clean all mirrors.

 
EXHIBIT I
 
 
-1-
 

--------------------------------------------------------------------------------

2.1.5
Clean all trim ledges and doors.

2.1.6
Wash walls around wash basins.

2.1.7
Empty all waste containers.

2.1.8
Reline all waste containers as necessary.

2.1.9
Dispose of trash as per Landlord's direction.

2.1.10
Wet mop all floors with an effective disinfectant and deodorant.

2.1.11
Spot clean all tile and partitions.

2.1.12
Treat all floor drains to prevent sewer gasses as necessary.

2.1.13
Stock restrooms with towels, tissue, and seat covers provided by Landlord.

2.2
Weekly

2.2.1
Perform low dusting.

2.3    Monthly
2.3.1    Machine scrub restroom floors.
2.3.2     Perform high dusting.
2.3.3    Spot clean walls.

 
EXHIBIT I
 
 
-2-
 

--------------------------------------------------------------------------------

OFFICE LEASE
15800 NORTHUP WAY, BELLEVUE, WASHINGTON

KBS SOR 156TH AVENUE NORTHEAST, LLC,
a Delaware limited liability company,
as Landlord,
and
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation,
as Tenant.

--------------------------------------------------------------------------------

ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
5
ARTICLE 2
LEASE TERM; OPTION TERMS
7
ARTICLE 3
BASE RENT
11
ARTICLE 4
ADDITIONAL RENT
11
ARTICLE 5
USE OF PREMISES
21
ARTICLE 6
SERVICES AND UTILITIES
22
ARTICLE 7
REPAIRS
25
ARTICLE 8
ADDITIONS AND ALTERATIONS
27
ARTICLE 9
COVENANT AGAINST LIENS
29
ARTICLE 10
INSURANCE
30
ARTICLE 11
DAMAGE AND DESTRUCTION
35
ARTICLE 12
NONWAIVER
37
ARTICLE 13
CONDEMNATION
38
ARTICLE 14
ASSIGNMENT AND SUBLETTING
38
ARTICLE 15
SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
43
ARTICLE 16
HOLDING OVER
44
ARTICLE 17
ESTOPPEL CERTIFICATES
44
ARTICLE 18
SUBORDINATION
45
ARTICLE 19
DEFAULTS; REMEDIES
46
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
50
ARTICLE 21
SECURITY DEPOSIT
50
ARTICLE 22
[INTENTIONALLY OMITTED]
50
ARTICLE 23
SIGNS
50
ARTICLE 24
COMPLIANCE WITH LAW
53
ARTICLE 25
LATE CHARGES
53
ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
54

 
EXHIBIT M
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
-1-
 

--------------------------------------------------------------------------------

ARTICLE 27
ENTRY BY LANDLORD
54
ARTICLE 28
TENANT PARKING
55
ARTICLE 29
MISCELLANEOUS PROVISIONS
56

 
EXHIBIT M
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
-2-
 

--------------------------------------------------------------------------------

EXHIBIT N
SELLER DISCLOSURE STATEMENT
SELLER: UNIGARD INSURANCE COMPANY, a Wisconsin corporation
To be used in transfers of commercial real estate as defined in RCW 60.42.005.
See RCW Chapter 64.06 for further explanations.

INSTRUCTIONS TO THE SELLER
Please complete the following form. Do not leave any spaces blank. If the
question clearly does not apply to the property write “NA.” If the answer is
“yes” to any asterisked (*) item(s), please explain on attached sheets. Please
refer to the line number(s) of the question(s) when you provide your
explanation(s). For your protection you must date and initial each page of this
disclosure statement and each attachment. Delivery of the disclosure statement
must occur not later than five (5) business days, unless otherwise agreed, after
mutual acceptance of a written purchase and sale agreement between Buyer and
Seller.
NOTICE TO THE BUYER
THE FOLLOWING DISCLOSURES ARE MADE BY SELLER ABOUT THE CONDITION OF THE PROPERTY
LOCATED AT 2002-2018 156TH AVENUE NE, AND 15801-15805 NE 24TH STREET, CITY OF
BELLEVUE, COUNTY OF KING (“THE PROPERTY”) OR AS LEGALLY DESCRIBED ON THE
ATTACHED EXHIBIT A. SELLER MAKES THE FOLLOWING ENVIRONMENTAL DISCLOSURES OF
EXISTING MATERIAL FACTS OR MATERIAL DEFECTS TO BUYER BASED ON SELLER’S ACTUAL
KNOWLEDGE OF THE PROPERTY AT THE TIME SELLER COMPLETES THIS DISCLOSURE
STATEMENT. UNLESS YOU AND SELLER OTHERWISE AGREE IN WRITING, YOU HAVE THREE (3)
BUSINESS DAYS FROM THE DAY SELLER OR SELLER’S AGENT DELIVERS THIS DISCLOSURE
STATEMENT TO YOU TO RESCIND THE AGREEMENT BY DELIVERING A SEPARATELY SIGNED
WRITTEN STATEMENT OF RESCISSION TO SELLER OR SELLER’S AGENT. IF THE SELLER DOES
NOT GIVE YOU A COMPLETED DISCLOSURE STATEMENT, THEN YOU MAY WAIVE THE RIGHT TO
RESCIND PRIOR TO OR AFTER THE TIME YOU ENTER INTO A PURCHASE AND SALE AGREEMENT.
THE FOLLOWING ARE DISCLOSURES MADE BY SELLER AND ARE NOT THE REPRESENTATIONS OF
ANY REAL ESTATE LICENSEE OR OTHER PARTY. THIS INFORMATION IS FOR DISCLOSURE ONLY
AND IS NOT INTENDED TO BE A PART OF ANY WRITTEN AGREEMENT BETWEEN BUYER AND
SELLER.
FOR A MORE COMPREHENSIVE EXAMINATION OF THE SPECIFIC CONDITION OF THIS PROPERTY
YOU ARE ADVISED TO OBTAIN AND PAY FOR THE SERVICES OF QUALIFIED EXPERTS TO
INSPECT THE PROPERTY, WHICH MAY INCLUDE, WITHOUT LIMITATION, ARCHITECTS,
ENGINEERS, LAND SURVEYORS, PLUMBERS, ELECTRICIANS, ROOFERS, BUILDING INSPECTORS,
ON-SITE

 
 
EXHIBIT N
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

WASTEWATER TREATMENT INSPECTORS, OR STRUCTURAL PEST INSPECTORS. THE PROSPECTIVE
BUYER AND SELLER MAY WISH TO OBTAIN PROFESSIONAL ADVICE OR INSPECTIONS OF THE
PROPERTY OR TO PROVIDE APPROPRIATE PROVISIONS IN A CONTRACT BETWEEN THEM WITH
RESPECT TO ANY ADVICE, INSPECTION, DEFECTS OR WARRANTIES.
Seller q is/ q is not occupying the property.
 
 
 
 
 
6.
ENVIRONMENTAL
YES
NO
DON'T KNOW
 
*A. Have there been any flooding, standing water, or drainage problems on the
property that affect the property or access to the property?
q
q
q
 
*B. Is there any material damage to the property from fire, wind, floods, beach
movements, earthquake, expansive soils, or landslides?
q
q
q
 
*C. Are there any shorelines, wetlands, floodplains, or critical areas on
the property?
q
q
q
 
*D. Are there any substances, materials, or products in or on the property that
may be environmental concerns, such as asbestos, formaldehyde, radon gas,
lead-based paint, fuel or chemical storage tanks, or contaminated soil or water?
q
q
q
 
*E. Is there any soil or groundwater contamination?
q
q
q
 
*F. Has the property been used as a legal or illegal dumping site?
q
q
q
 
*G. Has the property been used as an illegal drug manufacturing site?
q
q
q

The foregoing answers and attached explanations (if any) are complete and
correct
to the best of Seller’s knowledge and Buyer has received a copy hereof.
Date:
 

    
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation,
By:
 
Name:
 
Title:
 
 
 
 
 
 

If the answer is “Yes” to any asterisked (*) items, please explain below (use
additional sheets if necessary). Please refer to the line number(s) of the
question(s).
 
 
 
 
 
 

 
 
EXHIBIT N
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

EXHIBIT O
TENANT NOTICE LETTER
[UNIGARD INSURANCE COMPANY LETTERHEAD]
VIA FEDERAL EXPRESS
_____________ ____, 2012

[Tenant Name]
 
 
Bellevue, Washington
 

Re:
Lease dated as of ________________________ ([as amended], the “Lease”),

with _______________________________ (“Tenant”), pursuant to which Tenant leases
___________ rentable square feet of space in that certain building located and
addressed at _______________________, Bellevue, Washington (the “Building”);
Payment Direction Letter for amounts due under the Lease.
To Whom It May Concern:
Unigard Insurance Company, a Wisconsin corporation (the “Prior Landlord”),
recently transferred all of its interest in the Building and the Lease to KBS
SOR 156TH AVENUE NORTHEAST, LLC, a Delaware limited liability company (which
foregoing entity shall be referred to as the “Landlord”).
Tenant is hereby directed to make all future payments of rent and other sums due
under the Lease directly to the Landlord. Accordingly, commencing immediately
rent, and all other sums due under the Lease should be paid by Tenant as
follows:
(A)    If paying by check, money order or other instrument, please mail such
items to the following address:
[[BUYER TO PROVIDE:
 
 
 
 
 
 
]]

or

 
 
EXHIBIT O
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

(B)    If paying by check, money order or other instrument by overnight
delivery, please arrange to have such items couriered to the following address:
[[BUYER TO PROVIDE:
 
 
 
 
 
 
]]

or
(C)    If paying by wire transfer or automated clearing house (ACH), such
amounts are to be transferred by wire or ACH to the following account:
[[BUYER TO PROVIDE:
 
 
 
 
 
 
]]

All payments under the Lease must be delivered to the above referenced account
no later than the day on which such amounts are due pursuant to the terms of the
Lease.
Effective as of the date of this letter, any tenant inquires and/or notices to
Landlord must be sent, transmitted, or delivered, as the case may be, to the
following addresses:
[[BUYER TO PROVIDE:
 
 
 
 
 
 
]]

with copies to:
[[BUYER TO PROVIDE:
 
 
 
 
 
 
]]

 
 
EXHIBIT O
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-2-
 
 

--------------------------------------------------------------------------------

If you have any questions concerning this letter, please contact [Buyer contact
name and telephone number]. We appreciate your cooperation in this matter.
PRIOR LANDLORD:
UNIGARD INSURANCE COMPANY,
a Wisconsin corporation
By:
 
Name:
 
Title:
 
 
 
 
 
 

 
 
EXHIBIT O
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-3-
 
 

--------------------------------------------------------------------------------

EXHIBIT P
SCHEDULE OF PERSONAL PROPERTY TO BE CONVEYED AND RETAINED
Personal property to be conveyed to Buyer:
1.
(1) Golf Cart
2.
A large inventory of tools, motors, and maintenance equipment
(Hand tools, ladders, power washers, saws, spare parts, etc.)
3.
(1) Linel card access security system (Hardware & Software)
4.
(1) Tracer Summit HVAC control system (Hardware & Software)
5.
(1) Power Logic electrical usage data monitoring system (Hardware & Software)
6.
Site trash compactor
7.
Diesel generator for Phase I Buildings (A, B, C, D)
8.
Diesel generator for Building B auxiliary AC unit
9.
Diesel generator for Building D-2
10.
Diesel back-up generator dedicated to Building E
11.
(2) John Deere 'Gator' utility vehicles
12.
Furnishings and artwork in lobby areas of Buildings D-2, G, and H.
13.
Exterior auxiliary cooling system dedicated to data center in Building E
14.
(3) Liebert auxiliary AC units in Building E
15.
Exercise equipment in Building D
16.
Aerobic exercise accessories in Building D
17.
Tenant Improvements as indicated on personal property tax listing for King
County
18.
Auxiliary split cooling system in Building A
19.
2000 Chevrolet cargo van
20.
Sound system and televisions in Building D workout areas
21.
Projectors and sound system in Building D-2 conference room
22.
Café equipment, café furniture and artwork located in Building C

Personal property to be retained by Seller: [THIS CONSTITUTES ALL OF THE
“EXCLUDED PROPERTY” AS DEFINED IN THE PSA]
1.
Yale fork lift
2.
Yale electric pallet jack
3.
(6) VAV HVAC boxes
4.
(35) Air filters for Liebert auxiliary AC units
5.
(129) overhead light fixtures
6.
(1) card access photo editor system, card printer, and client station
7.
All refrigerators and microwave ovens in Buildings D, D-2, and E.
8.
All plants and containers in Buildings C, D, D-2, and E
9.
All artwork in Buildings C, D, D-2, and E, except as noted above
10.
All furniture and electronic equipment (i.e. large screen TVs, LED panels, etc.)
in Buildings C, D, D-2, and E, except as noted above

 
 
EXHIBIT P
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

[kbssorexhibit101exqpg1.jpg]
 
COMMERCIAL SERVICES 
600 University St. Suite 1518
Seattle, WA 98101
Phone: 206-262-6291
Email: marc.wise@fnf.com
 
 
 

EXHIBIT Q
TITLE COMMITMENT
COMMITMENT FOR TITLE INSURANCE
Issued by
Commonwealth Land Title Insurance Company
Commonwealth Land Title Insurance Company (“Company”), for a valuable
consideration, commits to issue its policy or policies of title insurance, as
identified in Schedule A, in favor of the Proposed Insured named in Schedule A,
as owner or mortgagee of the estate or interest in the land described or
referred to in Schedule A, upon payment of the premiums and charges and
compliance with the Requirements; all subject to the provisions of Schedules A
and B and to the Conditions of this Commitment.
This Commitment shall be effective only when the identity of the Proposed
Insured and the amount of the policy or policies committed for have been
inserted in Schedule A by the Company.
All liability and obligation under this Commitment shall cease and terminate 6
months after the Effective Date or when the policy or policies committed for
shall issue, whichever first occurs, provided that the failure to issue the
policy or policies is not the fault of the Company.
The Company will provide a sample of the policy form upon request.
IN WITNESS WHEREOF, Commonwealth Land Title Insurance Company, has caused its
corporate name and seal to be affixed by its duly authorized officers on the
date shown in Schedule A.
Commonwealth Land Title Insurance Company

27C101 (6/06)
 
 
ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

By:
 
[SEAL]
By: /s/ Authorized signatory
 
 
President
/s/ Marc Wise
 
ATTEST: /s/ Authorized signatory
Marc Wise, Commercial Title Officer
 
 
Secretary
 
 
 
 
 
 
 
 
/s/ Kerry Wise
 
 
 
Kerry Wise, Chief Commercial Title Officer
 
 
 
 
 
 
 
 
 
Authorized Signature

27C101 (6/06)
 
 
ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Commonwealth Land Title Insurance Company
SCHEDULE A
Name and Address of Title Insurance Company:
Commonwealth Land Title Insurance Company
 
888 S. Figueroa St. St. 2100, Lose Angeles, CA 90017
 
 
 
Title Officer: Marc Wise
 
Escrow No.: 14606781-410-MP2

1.
Effective Date: June 13, 2012 at 8:00 A.M.

2.
Policy or Policies to be issued:

ALTA 2006 Extended Owner's Policy
 
 
Proposed Insured: KBS Capital Advisors LLC, and its successors and assigns
Amount:
$78,700,000
Premium:
 
TBD
Tax:
 
TBD
Total:
 
TBD

3.
The estate or interest in the land described or referred to in this Commitment
is:

A FEE
4.
Title to the FEE SIMPLE estate or interest in the land is at the Effective Date
vested in:

Unigard Insurance Company, a Washington corporation
5.
The land referred to in this Commitment is described as follows:

See Exhibit A attached hereto and made a part hereof.

27C101A (6/06)
1
ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

EXHIBIT A
LEGAL DESCRIPTION
LOTS 1 THROUGH 6, INCLUSIVE, UNIGARD INSURANCE COMPANY - UNIGARD PARK BINDING
SITE PLAN, ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 198 OF PLATS, PAGES
28 THROUGH 35, INCLUSIVE, IN KING COUNTY, WASHINGTON.
SITUATE IN THE CITY OF BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.

27C101A (6/06)
2
ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION I
REQUIREMENTS
1.
INSTRUMENTS NECESSARY TO CREATE THE ESTATE OR INTEREST MUST BE PROPERLY
EXECUTED, DELIVERED AND DULY FILED FOR THE RECORD.

2.
PAYMENT TO OR FOR THE ACCOUNT OF THE GRANTORS OR MORTGAGORS OF THE FULL
CONSIDERATION FOR THE ESTATE OR INTEREST TO BE INSURED.

SCHEDULE B OF THIS POLICY OR POLICIES TO BE ISSUED WILL CONTAIN EXCEPTIONS TO
THE FOLLOWING MATTERS UNLESS THE SAME ARE DISPOSED OF TO THE SATISFACTION OF THE
COMPANY.
GENERAL EXCEPTIONS
A.
RIGHTS OR CLAIMS OF PARTIES IN POSSESSION, OR CLAIMING POSSESSION, NOT SHOWN BY
THE PUBLIC RECORDS.

B.
ANY ENCROACHMENT, ENCUMBRANCE, VIOLATION, VARIATION, OR ADVERSE CIRCUMSTANCE
AFFECTING THE TITLE THAT WOULD BE DISCLOSED BY AN ACCURATE AND COMPLETE LAND
SURVEY OF THE LAND.

C.
EASEMENTS, PRESCRIPTIVE RIGHTS, RIGHTS-OF-WAY, LIENS OR ENCUMBRANCES, OR CLAIMS
THEREOF, NOT SHOWN BY THE PUBLIC RECORDS.

D.
ANY LIEN, OR RIGHT TO A LIEN, FOR CONTRIBUTIONS TO EMPLOYEE BENEFIT FUNDS, OR
FOR THE STATE WORKERS’ COMPENSATION, OR FOR SERVICES, LABOR, OR MATERIAL
HERETOFORE OR HEREAFTER FURNISHED, ALL AS IMPOSED BY LAW, AND NOT SHOWN BY THE
PUBLIC RECORDS.

E.
TAXES OR SPECIAL ASSESSMENTS WHICH ARE NOT YET PAYABLE OR WHICH ARE SHOWN AS
EXISTING LIENS BY THE PUBLIC RECORDS.

F.
ANY LIEN FOR SERVICE, INSTALLATION, CONNECTION, MAINTENANCE, TAP, CAPACITY, OR
CONSTRUCTION OR SIMILAR CHARGES FOR SEWER, WATER, ELECTRICITY, NATURAL GAS OR
OTHER UTILITIES, OR FOR GARBAGE COLLECTION AND DISPOSAL NOT SHOWN BY THE PUBLIC
RECORDS.

G.
UNPATENTED MINING CLAIMS, AND ALL RIGHTS RELATING THERETO.

H.
RESERVATIONS AND EXCEPTIONS IN UNITED STATES PATENTS OR IN ACTS AUTHORIZING THE
ISSUANCE THEREOF.

I.
INDIAN TRIBAL CODES OR REGULATION, INDIAN TREATY OR ABORIGINAL RIGHTS, INCLUDING
EASEMENT OR EQUITABLE SERVITUDES.

J.
WATER RIGHTS, CLAIMS OR TITLE TO WATER.

K.
DEFECTS, LIENS, ENCUMBRANCES, ADVERSE CLAIMS OR OTHER MATTERS, IF ANY, CREATED,
FIRST APPEARING IN THE PUBLIC RECORDS, OR ATTACHING SUBSEQUENT TO THE EFFECTIVE
DATE HEREOF BUT PRIOR TO THE DATE THE PROPOSED INSURED ACQUIRES OF RECORD FOR
VALUE THE ESTATE OR INTEREST OR MORTGAGE THEREON COVERED BY THIS COMMITMENT.

END OF SCHEDULE B – SECTION I

27C101BI (6/06)
3
ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
EXCEPTIONS
SCHEDULE B OF THE POLICY OR POLICIES TO BE ISSUED WILL CONTAIN EXCEPTIONS TO THE
FOLLOWING MATTERS UNLESS THE SAME ARE DISPOSED OF TO THE SATISFACTION OF THE
COMPANY:
1.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
LAKE HILLS SEWER DISTRICT OF KING COUNTY, A
MUNICIPAL CORPORATION
PURPOSE:
 
SEWER LINE
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
JANUARY 28, 1966
RECORDING NO.:
 
5982733

2.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF:

ESTABLISHED IN CAUSE NO.:
233307
PURPOSE:
SLOPES
AREA AFFECTED:
PORTION OF SAID PREMISES ADJOINING NORTHUP
WAY

3.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
WATER LINE(S)
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
DECEMBER 11, 1973
RECORDING NO.:
 
7312110290

27C101BII (6/06)
4

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
4.
UNDERGROUND UTILITY EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH
EASEMENT(S) IS/ARE DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS
PROJECT NO. 037899, LAST REVISED _________, 2012:

GRANTEE:
 
PUGET SOUND POWER & LIGHT COMPANY, A WASHINGTON
CORPORATION
PURPOSE:
 
UNDERGROUND ELECTRICAL TRANSMISSION AND/OR
DISTRIBUTION SYSTEM
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
FEBRUARY 1, 1974
RECORDING NO.:
 
7402010413

CONTAINS COVENANT PROHIBITING STRUCTURES OVER SAID EASEMENT OR OTHER ACTIVITY
WHICH MIGHT ENDANGER THE UNDERGROUND SYSTEM.
5.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
SEWER LINE(S)
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
MARCH 4, 1974
RECORDING NO.:
 
7403040364

6.
RESERVATION OF EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S)
IS/ARE DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO.
037899, LAST REVISED _________, 2012:

RESERVED BY:
 
CITY OF BELLEVUE
PURPOSE:
 
UTILITIES
AREA AFFECTED:
 
VACATED NORTHEAST 20TH STREET AND 158TH AVENUE
RECORDED:
 
JANUARY 30, 1975
RECORDING NO.:
 
7501300474

27C101BII (6/06)
5

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
7.
SLOPE EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
SLOPES, LANDSCAPING AND SIDEWALKS
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
SEPTEMBER 17, 1976
RECORDING NO.:
 
7609170741

8.
INTENTIONALLY DELETED

9.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
CONSTRUCTION AND MAINTENANCE OF SIDEWALKS
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
NOVEMBER 24, 1982
RECORDING NO.:
 
8211240192

10.
INTENTIONALLY DELETED

11.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF:

GRANTEE:
 
WASHINGTON NATURAL GAS COMPANY, A WASHINGTON
CORPORATION
PURPOSE:
 
GAS PIPELINE(S)
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
NOVEMBER 1, 1991
RECORDING NO.:
 
9111010266

27C101BII (6/06)
6

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
12.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
SIDEWALK AND UTILITIES
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
AUGUST 30, 1994
RECORDING NO.:
 
9408301562

SAID EASEMENT IS A RE-RECORDING OF THE EASEMENT RECORDED ON DECEMBER 2, 1993,
UNDER KING COUNTY RECORDING NO. 9312022314.
13.
SIDEWALK AND UTILITY EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH
EASEMENT(S) IS/ARE DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS
PROJECT NO. 037899, LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
SIDEWALK AND UTILITY AND FRANCHISE UTILITY LINES,MANHOLES AND APPURTENANCES
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
FEBRUARY 23, 2000
RECORDING NO.:
 
20000223001425

14.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
PUGET SOUND ENERGY, INC., A WASHINGTON
CORPORATION
PURPOSE:
 
TRANSMISSION, DISTRIBUTION AND SALE OF ELECTRICITY
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
OCTOBER 12, 2000
RECORDING NO.:
 
20001012001607

15.
TERMS AND CONDITIONS OF PLANNED UNIT DEVELOPMENT, KNOWN AS UNIGARD PARK, FILED
WITH THE CITY OF BELLEVUE UNDER FILE NO. PC-B71-7, AS AMENDED, AS DISCLOSED BY
THE DEED RECORDED UNDER RECORDING NUMBER 8512300754.

27C101BII (6/06)
7

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
16.
ORDINANCE NO. 4318 AND THE TERMS AND CONDITIONS THEREOF:

RECORDED:
 
JANUARY 17, 1992
RECORDING NO.:
 
9201170526
REGARDING:
 
APPLICATION FOR CONDITIONAL USE

17.
ALL COVENANTS, CONDITIONS, RESTRICTIONS, BUT OMITTING ANY COVENANTS OR
RESTRICTIONS, IF ANY, BASED UPON RACE, COLOR, RELIGION, SEX, SEXUAL ORIENTATION,
FAMILIAL STATUS, MARITAL STATUS, DISABILITY, HANDICAP, NATIONAL ORIGIN,
ANCESTRY, OR SOURCE OF INCOME, AS SET FORTH IN APPLICABLE STATE OR FEDERAL LAWS,
EXCEPT TO THE EXTENT THAT SAID COVENANT OR RESTRICTION IS PERMITTED BY
APPLICABLE LAW, RESERVATIONS, EASEMENTS OR OTHER SERVITUDES, IF ANY, DISCLOSED
BY THE BINDING SITE PLAN RECORDED UNDER RECORDING NO. 20010226001285.

18.
ALL COVENANTS, CONDITIONS, RESTRICTIONS, BUT OMITTING ANY COVENANTS OR
RESTRICTIONS, IF ANY, BASED UPON RACE, COLOR, RELIGION, SEX, SEXUAL ORIENTATION,
FAMILIAL STATUS, MARITAL STATUS, DISABILITY, HANDICAP, NATIONAL ORIGIN,
ANCESTRY, OR SOURCE OF INCOME, AS SET FORTH IN APPLICABLE STATE OR FEDERAL LAWS,
EXCEPT TO THE EXTENT THAT SAID COVENANT OR RESTRICTION IS PERMITTED BY
APPLICABLE LAW, RESERVATIONS, EASEMENTS OR OTHER SERVITUDES, IF ANY, DISCLOSED
BY INSTRUMENT RECORDED UNDER RECORDING NUMBER 20010313001629 AS SUCH EASEMENT(S)
IS/ARE DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO.
037899, LAST REVISED _________, 2012.

19.
CONCOMITANT AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:

RECORDED:
 
OCTOBER 31, 1979
RECORDING NO.:
 
7910311177
REGARDING:
 
MITIGATION OF ENVIRONMENTAL IMPACTS

20.
CONCOMITANT AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:

RECORDED:
 
FEBRUARY 24, 1981
RECORDING NO.:
 
8102240789
REGARDING:
 
MITIGATION OF ENVIRONMENTAL IMPACT

27C101BII (6/06)
8

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
21.
CONCOMITANT AGREEMENT AND THE TERMS AND CONDITIONS THEREOF:

RECORDED:
 
JANUARY 17, 1992
RECORDING NO.:
 
9201170525
REGARDING:
 
MITIGATION OF ENVIRONMENTAL IMPACT

22.
AGREEMENT REGARDING CONDITIONS TO BUILDING PERMIT AND THE TERMS AND CONDITIONS
THEREOF:

RECORDED:
 
FEBRUARY 23, 2000
RECORDING NO.:
 
20000223001426

23.
RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON THE LAND HEREIN DESCRIBED
AS GRANTED TO KING COUNTY BY DEED RECORDED UNDER RECORDING NO. 5171895.

24.
RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON THE LAND HEREIN DESCRIBED
AS GRANTED TO KING COUNTY BY DEED RECORDED UNDER RECORDING NO. 5171896.

25.
RIGHT TO MAKE NECESSARY SLOPES FOR CUTS OR FILLS UPON THE LAND HEREIN DESCRIBED
AS GRANTED TO KING COUNTY BY DEED RECORDED UNDER RECORDING NO. 5252998.

26.
INTENTIONALLY DELETED

27.
GENERAL PROPERTY TAXES AND SERVICE CHARGES, AS FOLLOWS, TOGETHER WITH INTEREST,
PENALTY AND STATUTORY FORECLOSURE COSTS, IF ANY, AFTER DELINQUENCY:(1ST HALF
DELINQUENT ON MAY 1; 2ND HALF DELINQUENT ON NOVEMBER 1)

TAX ACCOUNT NO.:
880300 0010
YEAR
BILLED
PAID
BALANCE
2012
$174,485.55
$87,242.78
$87,242.77

TOTAL AMOUNT DUE, NOT INCLUDING INTEREST AND PENALTY: $87,242.77.
LEVY CODE:
0330
ASSESSED VALUE LAND:
$18,854,000.00
ASSESSED VALUE IMPROVEMENTS:
$1,000.00

AFFECTS:
LOT 1

27C101BII (6/06)
9

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
28.
GENERAL PROPERTY TAXES AND SERVICE CHARGES, AS FOLLOWS, TOGETHER WITH INTEREST,
PENALTY AND STATUTORY FORECLOSURE COSTS, IF ANY, AFTER DELINQUENCY:
(1ST HALF DELINQUENT ON MAY 1; 2ND HALF DELINQUENT ON NOVEMBER 1)

TAX ACCOUNT NO.:
880300 0020
YEAR
BILLED
PAID
BALANCE
2012
$5,843.42
$2,921.71
$2,921.71

TOTAL AMOUNT DUE, NOT INCLUDING INTEREST AND PENALTY: $2,921.71.
LEVY CODE:
0330
ASSESSED VALUE LAND:
$314,000.00
ASSESSED VALUE IMPROVEMENTS:
$0.00

AFFECTS:
LOT 2

29.
GENERAL PROPERTY TAXES AND SERVICE CHARGES, AS FOLLOWS, TOGETHER WITH INTEREST,
PENALTY AND STATUTORY FORECLOSURE COSTS, IF ANY, AFTER DELINQUENCY:
(1ST HALF DELINQUENT ON MAY 1; 2ND HALF DELINQUENT ON NOVEMBER 1)

TAX ACCOUNT NO.:
880300 0030
YEAR
BILLED
PAID
BALANCE
2012
$276,834.24
$138,417.12
$138,417.12

TOTAL AMOUNT DUE, NOT INCLUDING INTEREST AND PENALTY: $138,417.12.
LEVY CODE:
0330
ASSESSED VALUE LAND:
$14,899,200.00
ASSESSED VALUE IMPROVEMENTS:
$15,017,200.00

AFFECTS:
LOT 3

27C101BII (6/06)
10

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
30.
GENERAL PROPERTY TAXES AND SERVICE CHARGES, AS FOLLOWS, TOGETHER WITH INTEREST,
PENALTY AND STATUTORY FORECLOSURE COSTS, IF ANY, AFTER DELINQUENCY:
(1ST HALF DELINQUENT ON MAY 1; 2ND HALF DELINQUENT ON NOVEMBER 1)

TAX ACCOUNT NO.:
880300 0040
YEAR
BILLED
PAID
BALANCE
2012
$90,529.99
$45,265.00
$45,264.99

TOTAL AMOUNT DUE, NOT INCLUDING INTEREST AND PENALTY: $45,264.99.
LEVY CODE:
0330
ASSESSED VALUE LAND:
$9,781,300.00
ASSESSED VALUE IMPROVEMENTS:
$1,000.00

AFFECTS:
LOT 4

31.
GENERAL PROPERTY TAXES AND SERVICE CHARGES, AS FOLLOWS, TOGETHER WITH INTEREST,
PENALTY AND STATUTORY FORECLOSURE COSTS, IF ANY, AFTER DELINQUENCY:
(1ST HALF DELINQUENT ON MAY 1; 2ND HALF DELINQUENT ON NOVEMBER 1)

TAX ACCOUNT NO.:
880300 0050
YEAR
BILLED
PAID
BALANCE
2012
$1,407.14
$1,407.14
$0.00

TOTAL AMOUNT DUE, NOT INCLUDING INTEREST AND PENALTY: $0.00.
LEVY CODE:
0330
ASSESSED VALUE LAND:
$150,700.00
ASSESSED VALUE IMPROVEMENTS:
$0.00

AFFECTS:
LOT 5

27C101BII (6/06)
11

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

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File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
32.
GENERAL PROPERTY TAXES AND SERVICE CHARGES, AS FOLLOWS, TOGETHER WITH INTEREST,
PENALTY AND STATUTORY FORECLOSURE COSTS, IF ANY, AFTER DELINQUENCY:
(1ST HALF DELINQUENT ON MAY 1; 2ND HALF DELINQUENT ON NOVEMBER 1)

TAX ACCOUNT NO.:
880300 0060
YEAR
BILLED
PAID
BALANCE
2012
$1,525.73
$1,525.73
$0.00

TOTAL AMOUNT DUE, NOT INCLUDING INTEREST AND PENALTY: $0.00.
LEVY CODE:
0330
ASSESSED VALUE LAND:
$163,500.00
ASSESSED VALUE IMPROVEMENTS:
$0.00

AFFECTS:
LOT 6

33.
TERMS AND CONDITIONS OF NOTICE OF CHARGES BY WATER, SEWER, AND/OR STORM AND
SURFACE WATER UTILITIES, RECORDED UNDER RECORDING NUMBER 9408091502.

34.
TERMS AND CONDITIONS OF NOTICE OF CHARGES BY WATER, SEWER, AND/OR STORM AND
SURFACE WATER UTILITIES, RECORDED UNDER RECORDING NUMBER 9612200938.

35.
THE RIGHTS OF PARTIES IN POSSESSION, AS TENANTS ONLY, UNDER UNRECORDED LEASES AS
SHOWN ON THE ATTACHED RENT ROLL, WHICH DO NOT INCLUDE ANY RIGHTS OF ALL OR ANY
PORTION OF THE INSURED LAND.

36.
INTENTIONALLY DELETED.

37.
INTENTIONALLY DELETED.

38.
INTENTIONALLY DELETED.

39.
INTENTIONALLY DELETED.

27C101BII (6/06)
12

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

SCHEDULE B – SECTION II
(Continued)
40.
INTENTIONALLY DELETED.

41.
INTENTIONALLY DELETED.

42.
EASEMENT AND THE TERMS AND CONDITIONS THEREOF AS SUCH EASEMENT(S) IS/ARE
DEPICTED ON THE ALTA/ASCSM SURVEY PREPARED BY WHPACIFIC AS PROJECT NO. 037899,
LAST REVISED _________, 2012:

GRANTEE:
 
CITY OF BELLEVUE, A MUNICIPAL CORPORATION
PURPOSE:
 
SIDEWALK AND UTILITIES AND FRANCHISE UTILITY LINES
AREA AFFECTED:
 
A PORTION OF SAID PREMISES
RECORDED:
 
MAY 21, 2012
RECORDING NO.:
 
20120521001293

END OF SCHEDULE B – SECTION II

27C101BII (6/06)
13

ALTA Commitment – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

NOTES
NOTE 1:
THE COMPANY HAS BEEN ASKED TO ISSUE AN OWNER’S POLICY WITHOUT DISCLOSURE OF THE
LIABILITY AMOUNT. THIS COMMITMENT SHALL BE EFFECTIVE ONLY WHEN THE AMOUNT OF THE
POLICY COMMITTED FOR HAS BEEN INSERTED IN SCHEDULE A HEREOF. THE FORTHCOMING
POLICY MUST BE ISSUED IN AN AMOUNT AT LEAST EQUAL TO THE FULL VALUE OF THE
ESTATE INSURED IN ACCORDANCE WITH OUR RATING SCHEDULE ON FILE IN THE OFFICE OF
THE WASHINGTON STATE INSURANCE COMMISSIONER.

THE COMPANY MAY HAVE FURTHER REQUIREMENTS IF THE UNDISCLOSED AMOUNT TO BE
INSURED EXCEEDS THE CURRENT ASSESSED VALUATION.
NOTE 2:
BASED ON INFORMATION PROVIDED TO THE COMPANY, ON THE DATE OF THIS COMMITMENT IT
APPEARS THAT THERE IS LOCATED ON THE LAND:

COMMERCIAL/INDUSTRIAL STRUCTURE(S) STRUCTURE(S)
KNOWN AS:
15805 24TH ST NE
BELLEVUE, WA 98008
NOTE 3:
IF YOU WOULD LIKE THE COMPANY TO ACT AS TRUSTEE IN THE PROPOSED DEED OF TRUST,
PLEASE NOTE THAT " FIDELITY NATIONAL TITLE OF WASHINGTON, INC." MAY ACT AS
TRUSTEE OF A DEED OF TRUST UNDER RCW 61.24.010(1).

NOTE 4:
THE FOLLOWING MAY BE USED AS AN ABBREVIATED LEGAL DESCRIPTION ON THE DOCUMENTS
TO BE RECORDED, PER AMENDED RCW 65.04. SAID ABBREVIATED LEGAL DESCRIPTION IS NOT
A SUBSTITUTE FOR A COMPLETE LEGAL DESCRIPTION WITHIN THE BODY OF THE DOCUMENT.

LOTS 1-6 UNIGARD INSURANCE COS BSP VOL 198 PGS 28-35
NOTE 5:
IN THE EVENT THAT THE COMMITMENT JACKET IS NOT ATTACHED HERETO, ALL OF THE
TERMS, CONDITIONS AND PROVISIONS CONTAINED IN SAID JACKET ARE INCORPORATED
HEREIN. THE COMMITMENT JACKET IS AVAILABLE FOR INSPECTION AT ANY COMPANY OFFICE.

27C101 Notes (6/06)
14
ALTA Commitments – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

File No.: 14606781-410-MP2

NOTES
(Continued)
NOTE 6:
THE POLICY(S) OF INSURANCE MAY CONTAIN A CLAUSE PERMITTING ARBITRATION OF CLAIMS
AT THE REQUEST OF EITHER THE INSURED OR THE COMPANY. UPON REQUEST, THE COMPANY
WILL PROVIDE A COPY OF THIS CLAUSE AND THE ACCOMPANYING ARBITRATION RULES PRIOR
TO THE CLOSING OF THE TRANSACTION.

NOTE 7:
PRIOR TO CLOSING PLEASE CONTACT YOUR TITLE OFFICER FOR CURRENT COURIER AND/OR
ACCOMMODATION FEES WHICH MAY BE CHARGED FOR RECORDING RUNS.

END OF NOTES

27C101 Notes (6/06)
15
ALTA Commitments – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

CONDITIONS
1.
The term mortgage, when used herein, shall include deed of trust, trust deed, or
other security instrument.

2.
If the proposed Insured has or acquired actual knowledge of any defect, lien,
encumbrance, adverse claim or other matter affecting the estate or interest or
mortgage thereon covered by this Commitment other than those shown in Schedule B
hereof, and shall fail to disclose such knowledge to the Company in writing, the
Company shall be relieved from liability for any loss or damage resulting from
any act of reliance hereon to the extent the Company is prejudiced by failure to
so disclose such knowledge. If the proposed Insured shall disclose such
knowledge to the Company, or if the Company otherwise acquires actual knowledge
of any such defect, lien, encumbrance, adverse claim or other matter, the
Company at its option may amend Schedule B of this Commitment accordingly, but
such amendment shall not relieve the Company from liability previously incurred
pursuant to paragraph 3 of these Conditions.

3.
Liability of the Company under this Commitment shall be only to the named
proposed Insured and such parties included under the definition of Insured in
the form of policy or policies committed for and only for actual loss incurred
in reliance hereon in undertaking in good faith (a) to comply with the
requirements hereof, or (b) to eliminate exceptions shown in Schedule B, or
(c) to acquire or create the estate or interest or mortgage thereon covered by
this Commitment. In no event shall such liability exceed the amount stated in
Schedule A for the policy or policies committed for and such liability is
subject to the insuring provisions and Conditions and the Exclusions from
Coverage of the form of policy or policies committed for in favor of the
proposed Insured which are hereby incorporated by reference and are made a part
of this Commitment except as expressly modified herein.

4.
This Commitment is a contract to issue one or more title insurance policies and
is not an abstract of title or a report of the condition of title. Any action or
actions or rights of action that the proposed Insured may have or may bring
against the Company arising out of the status of the title to the estate or
interest or the status of the mortgage thereon covered by this Commitment must
be based on and are subject to the provisions of this Commitment.

5.
The policy to be issued contains an arbitration clause. All arbitrable matters
when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the
option of either the Company or the Insured as the exclusive remedy of the
parties. You may review a copy of the arbitration rules at
<http://www.alta.org/>.

27C101 (6/06)
16
ALTA Commitments – 2006
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

Order No.: 14606781
Effective Date: 5/1/2008
Fidelity National Financial, Inc.
Privacy Statement
Fidelity National Financial, Inc. and its subsidiaries ("FNF") respect the
privacy and security of your non-public personal information ("Personal
Information") and protecting your Personal Information is one of our top
priorities. This Privacy Statement explains FNF’s privacy practices, including
how we use the Personal Information we receive from you and from other specified
sources, and to whom it may be disclosed. FNF follows the privacy practices
described in this Privacy Statement and, depending on the business performed,
FNF companies may share information as described herein.
Personal Information Collected
We may collect Personal Information about you from the following sources:
•
Information we receive from you on applications or other forms, such as your
name, address, social security number, tax identification number, asset
information, and income information;

•
Information we receive from you through our Internet websites, such as your
name, address, email address, Internet Protocol address, the website links you
used to get to our websites, and your activity while using or reviewing our
websites;

•
Information about your transactions with or services performed by us, our
affiliates, or others, such as information concerning your policy, premiums,
payment history, information about your home or other real property, information
from lenders and other third parties involved in such transaction, account
balances, and credit card information; and

•
Information we receive from consumer or other reporting agencies and publicly
recorded documents.

Disclosure of Personal Information
We may provide your Personal Information (excluding information we receive from
consumer or other credit reporting agencies) to various individuals and
companies, as permitted by law, without obtaining your prior authorization. Such
laws do not allow consumers to restrict these disclosures. Disclosures may
include, without limitation, the following:
•
To insurance agents, brokers, representatives, support organizations, or others
to provide you with services you have requested, and to enable us to detect or
prevent criminal activity, fraud, material misrepresentation, or nondisclosure
in connection with an insurance transaction;

•
To third-party contractors or service providers for the purpose of determining
your eligibility for an insurance benefit or payment and/or providing you with
services you have requested;

•
To an insurance regulatory authority, or a law enforcement or other governmental
authority, in a civil action, in connection with a subpoena or a governmental
investigation;

•
To companies that perform marketing services on our behalf or to other financial
institutions with which we have joint marketing agreements and/or

•
To lenders, lien holders, judgment creditors, or other parties claiming an
encumbrance or an interest in title whose claim or interest must be determined,
settled, paid or released prior to a title or escrow closing.

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

We may also disclose your Personal Information to others when we believe, in
good faith, that such disclosure is reasonably necessary to comply with the law
or to protect the safety of our customers, employees, or property and/or to
comply with a judicial proceeding, court order or legal process.
Fidelity National Financial Inc. – Privacy Statement – Page 1 of 2

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

Order No.: 14606781
Effective Date: 5/1/2008
Disclosure to Affiliated Companies – We are permitted by law to share your name,
address and facts about your transaction with other FNF companies, such as
insurance companies, agents, and other real estate service providers to provide
you with services you have requested, for marketing or product development
research, or to market products or services to you. We do not, however, disclose
information we collect from consumer or credit reporting agencies with our
affiliates or others without your consent, in conformity with applicable law,
unless such disclosure is otherwise permitted by law.
Disclosure to Nonaffiliated Third Parties – We do not disclose Personal
Information about our customers or former customers to nonaffiliated third
parties, except as outlined herein or as otherwise permitted by law.
Confidentiality and Security of Personal Information
We restrict access to Personal Information about you to those employees who need
to know that information to provide products or services to you. We maintain
physical, electronic, and procedural safeguards that comply with federal
regulations to guard Personal Information.
Access to Personal Information/
Requests for Correction, Amendment, or Deletion of Personal Information
As required by applicable law, we will afford you the right to access your
Personal Information, under certain circumstances to find out to whom your
Personal Information has been disclosed, and request correction or deletion of
your Personal Information. However, FNF’s current policy is to maintain
customers’ Personal Information for no less than your state’s required record
retention requirements for the purpose of handling future coverage claims.
For your protection, all requests made under this section must be in writing and
must include your notarized signature to establish your identity. Where
permitted by law, we may charge a reasonable fee to cover the costs incurred in
responding to such requests. Please send requests to:
Chief Privacy Officer
Fidelity National Financial, Inc.
601 Riverside Avenue
Jacksonville, FL 32204
Changes to this Privacy Statement
This Privacy Statement may be amended from time to time consistent with
applicable privacy laws. When we amend this Privacy Statement, we will post a
notice of such changes on our website. The effective date of this Privacy
Statement, as stated above, indicates the last time this Privacy Statement was
revised or materially changed.

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

Fidelity National Financial, Inc.. – Privacy Statement – Page 2 of 2

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued By
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured by reason
of:
1.
The existence, at Date of Policy, of any of the following unless expressly
excepted in Schedule B:

a.
Present violations on the Land of any enforceable covenants, conditions, or
restrictions, or any existing improvements on the Land that violate any building
setback lines shown on a plat of subdivision recorded or filed in the Public
Records.

b.
Any instrument referred to in Schedule B as containing covenants, conditions, or
restrictions on the Land that, in addition, (i) establishes an easement on the
Land; (ii) provides for an option to purchase, a right of first refusal, or the
prior approval of a future purchaser or occupant; or (iii) provides a right of
reentry, possibility of reverter, or right of forfeiture because of violations
on the Land of any enforceable covenants, conditions, or restrictions.

c.
Any encroachment of existing improvements located on the Land onto adjoining
land, or any encroachment onto the Land of existing improvements located on
adjoining land.

d.
Any encroachment of existing improvements located on the Land onto that portion
of the Land subject to any easement excepted in Schedule B.

e.
Any notices of violation of covenants, conditions, or restrictions relating to
environmental protection recorded or filed in the Public Records.

2.
Damage to existing buildings

a.
That are located on or encroach upon that portion of the Land subject to any
easement excepted in Schedule B, which damage results from the exercise of the
right to maintain the easement for the purpose for which it was granted or
reserved;

b.
Resulting from the future exercise of any right existing at Date of Policy to
use the surface of the Land for the extraction or development of minerals
excepted from the description of the Land or excepted in Schedule B.

3.
Any final court order or judgment requiring the removal from any land adjoining
the Land of any encroachment, other than fences, landscaping, or driveways,
excepted in Schedule B.

4.
Any final court order or judgment denying the right to maintain any existing
building on the Land because of any violation of covenants, conditions, or
restrictions, or building setback lines shown on a plat of subdivision recorded
or filed in the Public Records.

Wherever in this endorsement the words "covenants, conditions, or restrictions"
appear, they shall not be deemed to refer to or include the terms, covenants,
conditions, or limitations contained in an instrument creating a lease.
Page 1 of 2

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

As used in paragraphs 1.a. and 4, the words “covenants, conditions, or
restrictions” do not include any covenants, conditions, or restrictions
(a) relating to obligations of any type to perform maintenance, repair, or
remediation on the Land, or (b) pertaining to environmental protection of any
kind or nature, including hazardous or toxic matters, conditions, or substances,
except to the extent that a notice of a violation or alleged violation affecting
the Land has been recorded or filed in the Public Records at Date of Policy and
is not excepted in Schedule B.
This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

ALTA Endorsement Form 9.2-06 Restrictions, Encroachments, Minerals–Improved
Land; Owners (6/17/06)
27E105 (6/06)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6
Page 2 of 2

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued By
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured if, at Date
of Policy (i) the Land does not abut and have both actual vehicular and
pedestrian access to and from NE 24th Street, Northrop Way, and 156th Ave. NE
(the “Street”), (ii) the Street is not physically open and publicly maintained,
or (iii) the Insured has no right to use existing curb cuts or entries along
that portion of the Street abutting the Land.
This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements to it.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

ALTA Endorsement Form 17-06 Access and Entry (6/17/06)
27E125 (6/06)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued By
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured by reason of
the failure of (i) Office Buildings known as 15805 NE 24th St, Bellevue WA
98008, to be located on the Land at Date of Policy.
This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

ALTA Endorsement Form 22-06 Location (6/17/06)
27E147 (6/06)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued by
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured by reason of
the failure of the Land as described in Schedule A to be the same as that
identified on the survey made by WH Pacific dated _______, and last revised
_______, and designated Job No. 037899.
This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

27E495
ALTA Endorsement Form 25-06 Same As Survey (10-16-08)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued By
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured by reason
of:
1.
the failure of Lots 1 through 6 to be contiguous along the common boundary
lines; or

2.
the presence of any gaps, strips, or gores separating any of the contiguous
boundary lines described above.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
Dated:
Fidelity National Title Insurance Company
Authorized Signature
Authorized Signature

ALTA Endorsement Form 19-06 Contiguity – Multiple Parcels (6/17/06)
27E129 (6/06)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued By
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured by reason
of:
1.
those portions of the Land identified below not being assessed for real estate
taxes under the listed tax identification numbers or those tax identification
numbers including any additional land:

Parcel:
Tax Identification Numbers:
Lot 1
880300 0010
Lot 2
880300 0020
Lot 3
880300 0030
Lot 4
880300 0040
Lot 5
880300 0050
Lot 6
880300 0060

2.
the easements, if any, described in Schedule A being cut off or disturbed by the
nonpayment of real estate taxes, Assessments or other charges imposed on the
servient estate by a governmental authority.

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements to it.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

ALTA Endorsement Form 18.1-06
Multiple Tax Parcel (6/17/06)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued by
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured by reason of
the failure of the Land to constitute a lawfully created parcel according to the
subdivision statutes and local subdivision ordinances applicable to the Land.
This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

27E496
ALTA Endorsement Form 26-06 Subdivision (10-16-08)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued by
Commonwealth Land Title Insurance Company
1.
The Company insures against loss or damage sustained by the Insured in the event
that, at Date of Policy,

a.
according to applicable zoning ordinances and amendments, the Land is not
classified Zone O;

b.
the following use or uses are not allowed under that classification:

Office Buildings
c.
There shall be no liability under this paragraph 1.b. if the use or uses are not
allowed as the result of any lack of compliance with any conditions,
restrictions, or requirements contained in the zoning ordinances and amendments,
including but not limited to the failure to secure necessary consents or
authorizations as a prerequisite to the use or uses. This paragraph 1.c. does
not modify or limit the coverage provided in Covered Risk 5.

2.
The Company further insures against loss or damage sustained by the Insured by
reason of a final decree of a court of competent jurisdiction either prohibiting
the use of the Land, with any existing structure, as specified in
paragraph 1.b.; or requiring the removal or alteration of the structure,
because, at Date of Policy, the zoning ordinances and amendments have been
violated with respect to any of the following matters:

a.
Area, width, or depth of the Land as a building site for the structure

b.
Floor space area of the structure

c.
Setback of the structure from the property lines of the Land

d.
Height of the structure, or

e.
Number of parking spaces.

3.
There shall be no liability under this endorsement based on:

a.
the invalidity of the zoning ordinances and amendments until after a final
decree of a court of competent jurisdiction adjudicating the invalidity, the
effect of which is to prohibit the use or uses;

b.
the refusal of any person to purchase, lease or lend money on the Title covered
by this policy.

Page 1 of 2

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

Order No. 14606781-410-MP2
 
Policy No. WA-FBCM-IMP-27306-1-12-14606781

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy,
(ii) modify any prior endorsements, (iii) extend the Date of Policy, or
(iv) increase the Amount of Insurance. To the extent a provision of the policy
or a previous endorsement is inconsistent with an express provision of this
endorsement, this endorsement controls. Otherwise, this endorsement is subject
to all of the terms and provisions of the policy and of any prior endorsements.
Dated:
Commonwealth Land Title Insurance Company
Authorized Signature
Authorized Signature

27E604
ALTA 3.1-06 Zoning – Completed Structure (10-22-09)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6
Page 2 of 2

 
 
 
Copyright American Land Title Association. All rights reserved.  The use of this
Form is restricted to ALTA licensees and ALTA members in good standing as of the
date of use. All other uses are prohibited. Reprinted under license from the
American Land Title Association.
[kbssorexhibit101exqpg2.jpg]

--------------------------------------------------------------------------------

[kbssorexhibit101exqpg1.jpg]
 
 
 

ENDORSEMENT
Attached to Policy No. WA-FBCM-IMP-27306-1-12-14606781
Issued by
Commonwealth Land Title Insurance Company
The Company insures against loss or damage sustained by the Insured if the
exercise of the granted or reserved rights to use or maintain the easement(s)
referred to in Exception(s) 1, 3, 4, 5, 6, 7, 9, 11, 12, 13, 14, 17, 18, 23, 24,
25 and 42 of Schedule B results in:
(1)
damage to an existing building located on the Land, or

(2)
enforced removal or alteration of an existing building located on the Land,

This endorsement is issued as part of the policy. Except as it expressly states,
it does not (i) modify any of the terms and provisions of the policy, (ii)
modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase
the Amount of Insurance. To the extent a provision of the policy or a previous
endorsement is inconsistent with an express provision of this endorsement, this
endorsement controls. Otherwise, this endorsement is subject to all of the terms
and provisions of the policy and of any prior endorsements.
Dated:
Commonealth Land Title Insurance Company

Authorized Signature
Authorized Signature

27E608
ALTA 28-06 Easement – Damage or Enforced Removal (02-03-10)
14606781-B3DA95D1-B964-11E1-93BF-0019B9F5F5E6

 
 
 
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-
 
 

--------------------------------------------------------------------------------

SCHEDULE 1
DISCLOSURES
[None]

 
 
 
 
QBE Corporate Campus, Bellevue, WA
Agreement of Purchase and Sale
 
 
-1-