<PAGE>   1
                                                                  EXHIBIT 10.12

                               BASIC LEASE TERMS
<TABLE>

<S>                                         <C>
a.      DATE OF LEASE:                      November 4, 1999

b.      TENANT:                             ImageX.Com, Inc.
        Trade Name:                         ImageX.Com
        Address(Leased Premises):           10210 NE Points Drive, Kirkland, WA, 98033
        Address (For Notices):              Prior to Commencement Date:  10800 NE 8th Street
                                            Bellevue, WA  98004, Attn:  CEO
                                            After Commencement Date:  10210 NE Points
                                            Drive, Kirkland, WA, 98033, Attn:  CEO

c.      LANDLORD:                           The Plaza at Yarrow Bay, LLC
        Address (For Notices):              c/o JSH Properties, Inc.
                                            10220 NE Points Drive, Suite 203,
                                            Kirkland, WA, 98033
                                            ATTN: Property Manager
        Facsimile:                          (425) 889-0606

d.      TENANT'S USE OF PREMISES:           General office

c.      PREMISES AREA:                      A portion of Floors 2, 3, and 4 of Building III,
                                            consisting of 44,091 rentable square feet.
</TABLE>

f.      TERM OF LEASE: This Lease shall commence on January 1, 2000 for Suite
        410, May 1, 2000 for Suite 310, and May 16, 2000 for Suite 200, or such
        earlier or later date as is provided in Section II, and, regardless of
        the actual Commencement Date, this Lease shall terminate on December 31,
        2004 (the "Expiration Date").

<TABLE>
<S>                                         <C>
g.      BASE MONTHLY RENT:                  See Paragraph 3.1--Minimum Rent

h.      PREPAID RENT:                       First month's rent

i.      LETTER OF CREDIT:                   $1,600,000, decreasing to $1,200,000 in year 4 and
                                            to $800,000 in year 5

j.      BASE YEAR:                          N/A

k.      BROKERS:                            Kidder, Mathews & Segner, Inc.

l.      GUARANTORS:                         N/A

m.      EXHIBITS:                           A-1  Legal Description of Building III
                                            A-2  Legal Description of Park
                                            B - Floor Plan of Premises
                                            C - Building Rules & Regulations
                                            D - Work Letter
                                            D-1 _ Outline Specifications for Building Standard
                                            Improvements
</TABLE>


                                     - 1 -
<PAGE>   2

<TABLE>
<S>                                         <C>
                                            E - Letter of Credit Format
n.      PARKING:                            See Paragraph 9.2
</TABLE>

                                     - 2 -
<PAGE>   3
                                      LEASE

        THIS LEASE is made as of the 4th day of November, 1999, by and between
THE PLAZA AT YARROW BAY, LLC, a Washington limited liability company
("Landlord"), and IMAGEX.COM, INC., a Washington corporation ("Tenant").

        For and in consideration of the mutual promises, covenants and
conditions set forth in this Lease, Landlord and Tenant agree as follows:

                              SECTION I - PREMISES

        1.1 Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, those certain premises (the "Premises") having an agreed rentable
area of 44,091 square feet and an agreed usable area of 38,979 square feet. The
Premises are situated on the 2nd, 3rd, and 4th floors of a building, consisting
of Suites 200, 310, 410 respectively, located on the real property legally
described in Exhibit A-1 attached, and all improvements thereon, and all rights
appurtenant thereto (the "Building"). The Premises are more particularly shown
on the floor plan of the Building attached to this Lease as Exhibit B. The
Building is part of a multi-phase project located on the real property legally
described on Exhibit A-2 attached, and all improvements thereon, and all rights
appurtenant thereto, commonly known as The Plaza at Yarrow Bay (the "Park"). The
Building is commonly referred to as Building III of the Park.

        1.2 Reserved to Landlord. Landlord reserves all air rights over the
Premises, the use of the exterior walls, the roof, and the right to install,
maintain, use, repair and replace pipes, ducts, conduits and wires leading
through the Premises in locations which will not materially interfere with
Tenant's use thereof to serve other parts of the Building and/or the Park.

        1.3 Changes to Park. Landlord reserves the right at any time to make
alterations or additions to the Building and to build adjoining the same,
provided such alterations and additions do not have a material adverse effect on
Tenant's rights under this Lease or on Tenant's quiet enjoyment of the Premises.
Landlord also reserves the right from time to time to construct other buildings
or improvements in the Park, to make alterations thereof or additions thereto,
and to relocate the various buildings (other than the Building), parking and
other common areas comprising the Park.

                                SECTION II - TERM

        2.1 Lease Term. This Lease shall commence on the earlier of the
following two dates (the "Commencement Date"): (a) the date Tenant occupies any
of the three suites constituting the Premises for a primary use other than
performing tenant improvement work, or (b) three (3) days after Landlord
notifies Tenant that Landlord has substantially completed the tenant
improvements in the first suite constituting the Premises to be completed in
accordance with Landlord's obligations under Section 7.1 below. As used herein,
"substantial completion" or "substantially completed" shall mean that the tenant
improvements have been completed according to the mutually approved plans and
specifications (subject to minor defects, deviations and incomplete




                                     - 3 -
<PAGE>   4



items typically found on a punchlist and which will not interfere with Tenant's
ability to use the Premises for their intended purpose).

        The "Target Commencement Date" for Suite 410 is January 1, 2000; the
Target Commencement Date for Suite 310 is May 1, 2000, and the Target
Commencement Date for Suite 200 is May 16, 2000, which dates are only an
estimate of the dates the various suites constituting the Premises will be
available for Tenant's occupancy.

                Landlord shall have no liability to Tenant and this Lease shall
not be void or voidable if the Premises are not delivered to Tenant by the
Target Commencement Date. Notwithstanding the foregoing, if Landlord has not
substantially completed the tenant improvements in, and delivered possession of,
any of the three suites constituting a portion of the Premises to Tenant within
one hundred twenty (120) days from the Target Commencement Date for such suite,
then at Tenant's option, which must be exercised by written notice given to
Landlord within thirty (30) days after the expiration of said 120-day period,
this Lease shall terminate and the parties shall have the rights or liabilities
which arise at Lease termination as provided herein; provided, if Landlord is
unable to deliver possession of any of the three suites constituting a portion
of the Premises to Tenant within the 120-day period due to delays caused by
Tenant, or material shortages, labor strikes or other reasons beyond Landlord's
control, the 120-day period shall be extended by the number of days of delay
experienced by Landlord. This Lease shall terminate at 11:59 p.m. on December
31, 2004. Landlord shall confirm the Commencement Date for each of the three
suites constituting a portion of the Premises in writing to Tenant.

        2.2 Early Entry. If Tenant is permitted entry to the Premises prior to
Commencement Date for the purpose of installing tenant improvements or fixtures
or any other purpose permitted by Landlord, such early entry will be at Tenant's
sole risk and subject to all the terms and provisions of this Lease as though
the Commencement Date had occurred, except for the payment of rent and
additional rent, which will commence on the Commencement Date. Tenant, its
agents and employees will not interfere with or delay Landlord's completion of
construction of any improvements to be made by Landlord. All rights of Tenant
under this Section 2.2 will be subject to the requirements of all applicable
building codes and zoning requirements, and must not interfere with Landlord
obtaining a certificate of occupancy for the Premises. Landlord has the right to
impose such additional conditions on Tenant's early entry as Landlord deems
appropriate in its sole discretion, and will further have the right to require
that Tenant execute an early entry agreement containing such conditions prior to
Tenant's early entry.

        2.3 Acceptance of Premises. Landlord shall give Tenant written notice of
the completion of each phase of Landlord's obligations described in Sections 2.1
and 7.1 of this Lease. Within ten (10) business days after Landlord gives such
notice, Tenant shall inspect the work performed by Landlord pursuant to Section
7.1, and except as Tenant may otherwise notify Landlord in writing within such
period, Tenant shall be deemed to have accepted the Premises in their condition
at that time. If, as a result of such inspection, Tenant discovers minor
exceptions or variations from the plans and specifications for tenant
improvements of a nature commonly found on a "punch list" (as that term is used
in the construction industry), Tenant shall notify


                                     - 4 -
<PAGE>   5






Landlord of such exceptions within such ten (10) business day period. Landlord
shall correct or remedy the exceptions within a reasonable time. The existence
of such punch list items shall not postpone the Commencement Date or Tenant's
obligation to pay Rent or other charges.

        2.4 Term. The term of this Lease shall commence on the Commencement Date
and continue through December 31, 2004, unless sooner terminated or extended as
provided in this Lease.

        2.5 Option to Extend.

                a. So long as Tenant is not then in default under this Lease
beyond applicable cure periods, and so long as Tenant has not been ten (10) or
more days late in payment of rent after written notice thereof more than a total
of three (3) times during the term of this Lease, Tenant shall have the right to
extend the Lease term for one (1) additional five (5) period(s) (each an
"Additional Term") on the terms and conditions stated in this paragraph. To
exercise its right to extend this Lease for an Additional Term, Tenant must
deliver to Landlord a written notice exercising its rights under this paragraph
at least two hundred seventy (270) days, but not more than three hundred sixty
(360) days, prior to the date the Lease term will expire. All the terms and
conditions of this Lease shall apply during each Additional Term except (i) the
minimum rent shall be an amount mutually agreed to by Landlord and Tenant or
determined by arbitration as set forth below, but in no event shall it be less
than that due from Tenant immediately prior to the commencement of the
Additional Term; (ii) unless otherwise agreed by Landlord in writing, there
shall be no further extension options; and (iii) [except as set forth in Section
2.5(e) below,] Landlord shall have no tenant improvement or lease commission
obligations with respect to the Premises. When the rental rate for the
Additional Term is determined, either by agreement of the parties or pursuant to
arbitration as provided below, Landlord and Tenant shall enter into a lease
extension agreement setting forth the new minimum rent for the Premises and such
other terms as may be applicable. If at the time Tenant delivers to Landlord its
written notice electing to extend this Lease term, or at any time between such
date and the commencement date of the Additional Term, Tenant defaults under
this Lease and fails to cure the default within the applicable cure period, if
any, Landlord shall have the option to declare Tenant's notice of exercise null
and void by written notice to Tenant, in which case the Lease term shall expire
on the expiration of the then current Lease term.

                b. If Tenant exercises an extension right under this paragraph,
the minimum rent for the Additional Term shall be the then "fair market rent"
(defined below) for the Premises. For purposes of this Lease, the term "fair
market rent" shall mean the triple net rate per rentable square foot that
willing, non-equity, non-renewal tenants are paying for comparable space in the
building and in comparable buildings in the Kirkland-Bellevue areas for leases
having a five-(5) year term without including the value of any improvements paid
for by Tenant (but including any improvements made by Tenant at the commencement
of the initial Lease term). Landlord shall advise Tenant in writing of
Landlord's determination of fair market rent for the Premises not later than
thirty (30) days after Tenant exercises its extension right. Within thirty (30)
days after receiving Landlord's determination of fair market rent, Tenant shall
notify Landlord in writing whether or not Tenant accepts Landlord's
determination of fair market rent. If Tenant disagrees with Landlord's
determination of fair market rent, Tenant shall advise Landlord of Tenant's




                                     - 5 -
<PAGE>   6







determination of fair market rent in the notice required pursuant to the
preceding sentence. If Tenant fails to so notify Landlord prior to expiration of
its thirty (30) day period to respond to Landlord's notice, then Tenant shall be
deemed to have approved Landlord's determination, unless otherwise agreed in
writing by Landlord and Tenant. If Tenant does not accept Landlord's
determination of fair market rent, the parties shall promptly meet and attempt
to resolve their differences.

                If the parties have not agreed on the fair market rent within
sixty (60) days after Tenant has exercised its renewal right, then unless
otherwise agreed in writing by the parties, the parties shall submit the matter
to arbitration in accordance with the terms of paragraph (c) below. The last day
of such period shall be referred in this Lease as the "Arbitration Commencement
Date."

                c. The arbitration will be conducted by three MAI real estate
appraisers who have been active over the five (5) year period ending on the
Arbitration Commencement Date in the appraisal of office properties in the
Kirkland-Bellevue area. One appraiser will be selected by Tenant, one appraiser
will be selected by Landlord, and the third will be selected by the two
appraisers so chosen. If the two appraisers chosen by the parties cannot agree
on a third appraiser within ten (10) days after the date the second appraiser
has been appointed, the third appraiser will be appointed by the Seattle office
of the American Arbitration Association upon the application of either party.
Each party shall select its appraiser within ten (10) days after the Arbitration
Commencement Date. If either party fails to select its appraiser within such ten
(10) day period, and the other party duly selects its appraiser, then the
appraiser selected by the other party shall be the sole arbitrator for
determining fair market rent. With twenty (20) days after the selection of the
third appraiser (or if only one appraiser is to render the decision, within
twenty (20) days after the last day of the above-referenced ten (10) day
period), the appraiser(s) shall determine fair market rent. The decision of a
majority of the appraisers shall control. If a majority of the appraisers do not
agree within the stipulated time period, then each appraiser shall in writing
render his or her separate determination as to fair market rent within five (5)
days after the expiration of the twenty (20) day period. In such case, the three
determinations shall be averaged to determine the fair market rent; however, if
the lowest fair market rent or the highest fair market rent is ten percent (10%)
lower or higher, as applicable, than the middle fair market rent, then the low
fair market rent and/or the high fair market rent, as applicable, shall be
disregarded and the remaining fair market rent(s) will be averaged in order to
establish the fair market rent.

                d. Both parties may submit any information to the arbitrators
for their consideration, with copies to the other party. The arbitrators shall
have the right to consult experts and competent authorities for factual
information or evidence pertaining to the determination of fair market rent. The
arbitrators shall have no power to modify the provisions of this Lease. The
determination of the arbitrators will be final and binding upon Landlord and
Tenant. The cost of the arbitration will be paid by Landlord if the fair market
rent is ninety percent (90%) or less than the fair market rent specified in the
notice given by Landlord to Tenant; by Tenant if the fair market rent is one
hundred ten percent (110%) or more than the fair market rent specified in the
notice given by Tenant to Landlord; and otherwise shall be shared equally by
Landlord and Tenant.




                                     - 6 -
<PAGE>   7







                e. This option to extend is personal to Tenant and cannot be
transferred without Landlord's consent in accordance with this Lease, except
that a Transferee who satisfies the requirements of Sections 11.2 or 11.7 below
will also receive a transfer of this option to extend.

        2.6 Right of First Offer. Tenant is granted a right of first offer to
all (but not less than all) of Suite 222 (currently lease by Novell), Suite 300
(currently leased by Inteliant) and Suite 400 (currently leased by Pivotal) in
Building III of the Park if such space becomes available for lease during the
initial term of the Lease, provided that Tenant is not then in default under
this Lease beyond any applicable cure period, and provided that Tenant is not
then subleasing and has not then assigned any interest in its space in the Park
except as permitted in Section 11.7. The right of first offer is granted subject
to the existing rights of the tenants of Suites 400 and 222 to exercise current
rights to extend lease terms which may apply to such suites. Landlord shall
provide Tenant with written notice promptly upon learning that all of any of the
three foregoing suites in Building III will be available for lease, and propose
a fair market rent and other lease terms and conditions ("Landlord's Notice").
If Tenant fails to provide written notice within five (5) days after receipt of
Landlord's Notice that it wishes to negotiate for the lease of any such space,
the right of first offer shall expire with respect to the suite in question. If
Tenant provides Landlord with a written reply within five days of receiving
Landlord's Notice that Tenant wishes to negotiate for the lease of the suite
coming available, then Landlord and Tenant shall promptly commence negotiations
for Tenant's lease of that suite. If Landlord and Tenant do not execute a
mutually acceptable lease for the suite, under which Tenant will actually occupy
the premises, within fourteen (14) days after Landlord's Notice to Tenant under
this paragraph, then the right of first offer shall expire, and Landlord may
lease such suite to other tenants.

                               SECTION III - RENT

        3.1 Minimum Rent. Tenant shall pay to Landlord, c/o JSH Properties,
Inc., at 10220 N.E. Points Drive, Suite 203, Kirkland, Washington 98033, or to
such other entity or address as may be specified by Landlord from time to time,
without any set off or deduction whatsoever, as fixed minimum rent, in the
amounts specified below. Tenant shall commence paying rent on a particular suite
constituting a portion of the Premises on the earlier to occur of (a) the date
Tenant occupies the suite for a primary use other than performing tenant
improvement work, or (b) three (3) days after Landlord notifies Tenant that
Landlord substantially completed the tenant improvements in the suite. Fixed
minimum rent shall be payable in the triple net amounts specified below.

<TABLE>
<S>                                                       <C>
        Commencement  Date through  12/31/00 for          $24.00 nnn per  rentable  square  foot
        all    suites   for   which   the   rent          (rsf)
        obligation has commenced
        1/1/01 - 12/31/01                                 $25.00 nnn per rsf
        1/1/02 - 12/31/02                                 $26.00 nnn per rsf
        1/1/03 - 12/31/03                                 $27.00 nnn per rsf
        1/1/04 - 12/31/04                                 $28.00 nnn per rsf
</TABLE>

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<PAGE>   8

        Monthly installments of fixed minimum rent are due on or before the
first day of each month of the Lease term. Rent for partial months shall be
prorated. The minimum rent is referred to herein as "rent," and it does not
include the additional rent payable by Tenant pursuant to this Section III. Upon
execution of this Lease, Tenant shall deposit with Landlord first month's rent.

        Tenant shall receive a rent credit of $5,000 per month from the
Commencement Date until the earlier to occur of (a) the date which is four (4)
months after the Commencement Date, or (b) the date Tenant ceases business
operations in its space at 10800 NE 8th Street in Bellevue, Washington. The rent
credit is provided to reimburse Tenant for a portion of its additional cost in
continuing dual fiber optic service until it has vacated its current premises.

        3.2 Additional Rent. In addition to rent, all other sums to be paid or
reimbursed by Tenant to Landlord, whether or not so designated, are "additional
rent" for the purposes of this Lease. If Tenant defaults in the performance of
any of its obligations hereunder, Landlord may, but shall not be obligated to,
perform such obligations, and the cost thereof to Landlord shall also be
additional rent. Unless otherwise specifically provided in this Lease, Tenant
shall pay Landlord all additional rent within ten (10) days after Landlord's
demand.

        3.3 Tenant's Contributions.

                3.3.1 On or before the Commencement Date, and no more than
ninety (90) days after the commencement of each calendar year thereafter,
Landlord will notify Tenant in writing of Landlord's estimate of Tenant's Share
of estimated "Operating Costs" and "Real Property Taxes" (such terms are defined
in Section 3.3.2 below) for the then current calendar year (or part thereof),
which amount Tenant shall pay in advance in twelve (12) equal monthly
installments, due and payable without set-off or deduction, on the first (1st)
day of each calendar month. As used herein, the term "Tenant's Share" is
determined by multiplying the cost to be shared by a fraction, the numerator of
which is the rentable area of the Premises from time to time and the denominator
of which is the rentable area of the Building (82,013 rentable square feet) for
expenses related to the Building, and the rentable area of the Park (274,406
rentable square feet) for expenses related to the Park. Upon full occupancy of
the Premises, Tenant's share of the Building shall be 53.7% and Tenant's share
of the Park shall be 16.05%, based on current configurations of the Building and
of the Park. Tenant's share of the Building and of the Park shall be adjusted as
and when the rentable area of the Building or of the Park changes. Within ninety
(90) days after the end of each year, Landlord will compute Tenant's Share for
such year (or portion thereof) based on actual costs and provide to Tenant an
itemized statement (a "Statement") of Tenant's Share for such year. If Tenant's
Share of amounts due for such year is greater than the amounts already paid by
Tenant pursuant to this Section 3.3, Tenant shall pay Landlord any deficiency
within ten (10) business days of receipt of written notice.

                If the total amount paid for such year exceeds Tenant's Share,
then Landlord shall credit such excess to the payment of rent and additional
rent which may thereafter become due, provided, however, upon the expiration or
sooner termination of the Lease term, Landlord shall refund such excess to
Tenant, provided that Landlord may offset any sums owing to Tenant against sums
then owed by Tenant to Landlord. If at any time (but not more than once each


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<PAGE>   9

calendar year) Landlord obtains additional information regarding expenses,
Landlord may at its election adjust the amount of the monthly installments due
during the balance of the year to reflect such additional information, by giving
Tenant written notice thereof, which notice shall also state the amount of the
deficiency, if any, in the prior monthly payments for the calendar year. Tenant
shall pay any such deficiency within twenty (20) days of its receipt of the
notice and shall make the adjusted monthly payments for the remainder of the
calendar year. At any time within eighteen (18) months after a Statement for any
particular calendar year is provided to Tenant, upon twenty (20) days prior
written notice and during normal business hours at Landlord's office or at such
other place as Landlord shall reasonably designate, Tenant shall be entitled to
inspect and examine the books and records of Landlord related to the
determination of any sums payable by Tenant pursuant to this Section 3.3 which
are the subject of the applicable Statement.

                If, after inspection and examination of such books and records,
Tenant disputes the amounts paid by Tenant pursuant to this Section 3.3, Tenant
by written notice to Landlord, may request an independent audit of such books
and records. The independent audit of Landlord's books and records shall be
conducted by a certified public accountant designated by Tenant and reasonably
acceptable to Landlord. The audit shall be limited to the determination of the
amount of any or all items payable by Tenant pursuant to this Section 3.3 for
the subject calendar year. If the audit discloses any amounts billed to and paid
by Tenant which are incorrect, the appropriate party shall pay to the other
party the deficiency or overpayment, as applicable, within thirty (30) days
after the results of the audit have been disclosed to both parties, unless
Landlord disputes the results of the audit within sixty (60) days of receipt of
the results of the audit, in which case, Landlord and Tenant shall agree upon a
national accounting firm to review and verify the Operating Costs, and provide
the results to Landlord and Tenant (the "Reconciliation Audit"). The
determination as set forth in the Reconciliation Audit shall be binding upon
Landlord and Tenant. If the Reconciliation Audit is performed, Landlord and
Tenant shall each pay one-half of the cost of the Reconciliation Audit. The
exercise by Tenant of its audit rights hereunder shall not relieve Tenant of its
obligations to pay prior to the request for and inspection and examination of
Landlord's books and records or permit Tenant the right to audit any other sums.
Additionally, Tenant agrees and acknowledges that various tenants' lease
provisions in the Building related to Operating Costs vary, and that the audit
right is set forth herein in the review of books and records shall be
confidential. With the exception of Tenant's auditors, Tenant shall not disclose
or discuss the audit or the results of the audit to any third parties, including
but not limited to any other tenants in the Building or the Park. All costs and
expenses of the audit shall be paid by Tenant unless the audit shows that
Landlord overstated Tenant's Share of the subject calendar year by more than
five percent (5%) of the actual amount payable by Tenant, in which case Landlord
shall pay all costs and expenses of the audit.

                Notwithstanding any of the foregoing, Tenant shall not be
entitled to inspect or audit the books and records of Landlord more frequently
than once each calendar year.

                3.3.2 For purposes of this Section 3.3, the following
definitions apply:

                        (i) "Operating Costs" shall mean all expenses paid or
incurred by Landlord or charged to Landlord for maintaining, operating,
repairing, replacing and administering the Building, the Park or both (including
common areas and facilities), and the

                                     - 9 -
<PAGE>   10

personal property used in conjunction therewith, together with a sum equal to
five percent (5%) of the cost thereof (exclusive of Real Property Taxes and
professional management fees) as an administrative fee, including, without
limitation, the costs of refuse collection, water, sewer, electricity, heat, air
conditioning, fuel, light, fire protection, and other utilities; services;
supplies; janitorial and cleaning services; window washing; snow, garbage and
refuse removal; security services and systems; resurfacing, repair, maintenance,
painting, lighting, cleaning, striping and securing parking facilities; elevator
operation, repair and maintenance; landscape maintenance; services of
independent contractors; compensation (including employment taxes and fringe
benefits) of all persons who perform duties in connection with the operation,
maintenance, repair, replacement and administration of the Park, the Building or
both, their equipment and common areas and facilities; insurance premiums for
all insurance carried with respect to the Building or the Park; licenses,
permits and inspection fees (but not Landlord's general business license and
related fees); subsidies and other payments required by public bodies, including
those for traffic signals and controls and for fire protection; professional
management fees (in amounts competitive with those charged by third party
property managers in connection with the management of comparable first class
office properties); legal and accounting expenses; and all other expenses or
charges whether or not hereinabove described which, in accordance with generally
accepted accounting and management practices, would be considered an expense of
maintaining, operating, repairing, replacing and administering the Building or
the Park, but excluding: (a) costs of any special services rendered to
individual tenants (including Tenant) for which a special charge is made; (b)
Real Property Taxes; (c) depreciation or amortization of costs required to be
capitalized in accordance with generally accepted accounting practices (except
Operating Costs shall include amortization over their useful life, on a straight
line basis, of capital improvements made subsequent to the date the last party
executes this Lease which are either designed with a reasonable probability of
improving the operating efficiency of the Building or the Park, as applicable,
or are required to be made to operate the Building or the Park in accordance
with applicable federal, state and local laws, regulations, ordinances and codes
enacted after the date of this Lease; (d) executive salaries (i.e., salaries of
all persons above Building management level); (e) salaries of Building
management and service personnel to the extent such personnel perform services
not solely in connection with the management, operation, repair or maintenance
of the Building or the Park, unless such salaries are prorated to reflect time
spent on operating and managing the Building or the Park, vis a vis time spent
on matters unrelated to operating and managing the Building or the Park; (f)
interest, charges and fees incurred on debt, payments and mortgages owed on the
Building or the Park; (g) advertising or promotional expenses with respect to
leasing space in or selling the Building or the Park; (h) brokerage, legal and
professional fees expended by Landlord in connection with negotiating and
entering into any leases and any related instruments with any tenant or other
occupant of any portion of the Building or the Project, and the enforcement of
any such instruments; (i) interest, penalties or damages incurred by Landlord
for late payment of taxes or assessments or under any agreement to which
Landlord is a party by reason of the breach or default of Landlord; (j) expenses
incurred in connection with relocating tenants in the Building or the Park; and
(k) structural and foundation repairs and roof replacements.

                Operating Costs also shall not include any costs or expenses
incurred by Landlord in connection with the initial entitlement, construction or
development of the Building

                                     - 10 -
<PAGE>   11

pursuant to governmental agreements, rules, codes, rules or statutes, such as
the cost of child care facilities; traffic mitigation fees; water and sewage
connection, recycling, or housing replacement fees; infrastructure and
transportation fees; or art programs. Tenant acknowledges that Operating Costs
shall include Tenant's pro rata share of certain costs of maintaining,
operating, repairing, replacing and administering the common areas and
facilities in the Park.

                        (ii) "Real Property Taxes" shall mean all taxes on the
Building, and Landlord's share of any taxes applicable to the Park (including
common areas and facilities), and on personal property used in conjunction
therewith, including surcharges and all local governmental or quasi governmental
improvement and other assessments levied with respect to the Building or the
Park and all other property used directly in connection with the operation of
the Building or the Park; and any taxes levied or assessed in addition to or in
lieu of, in whole or in part, such real or personal property taxes, or any other
tax upon leasing of the Building or rents collected therefrom, other than any
federal or state income or franchise tax.

        3.4 Late Charge; Interest. If Tenant fails to pay any amount due
hereunder within five (5) days of the due date, a late charge equal to five
percent (5%) of the unpaid amount shall be assessed and be immediately due and
payable. In addition, interest shall accrue on any payment which is more than
five (5) days past due at the rate of five percentage points (5%) per annum in
excess of the prime business lending rate publicly quoted from time to time in
the money rates column of the Wall Street Journal, calculated from the date the
payment was due to the date of payment. If the Wall Street Journal ceases to
quote a prime rate or similar rate, interest calculated under this Section 3.4
shall be based on the prime rate or similar rate of a United States national
bank having an office in Seattle, Washington, selected by Landlord. If the
foregoing rate exceeds the maximum rate permitted by applicable law, interest
shall accrue at the maximum rate so permitted by law, from the date due until
paid on any amount not paid when due. Landlord shall have the right to accept
rent and all other payments, whether full or partial, and negotiate checks and
payments thereof, without any waiver of rights, irrespective of any conditions
to the contrary sought to be imposed by Tenant.

                        SECTION IV - CONDUCT OF BUSINESS

        4.1 Use of Premises. Tenant shall use the Premises only for general
office and related purposes, excluding medical or dental office, consistent with
the operation of a first class office building. Tenant shall not use or permit
the use of the Premises for any other business or purpose without Landlord's
prior written consent, which consent Landlord may grant or deny in its sole
discretion. Tenant shall promptly comply with the rules and regulations of the
Building and the Park, as set forth in Exhibit C attached, as the same may be
changed from time-to-time by Landlord in its reasonable business judgment upon
reasonable notice to Tenant. Tenant shall not permit any public or private
nuisance to occur on the Premises, or any other act or circumstance which
disturbs the quiet enjoyment of any occupant of the Building or the Park.

        4.2 Appearance of Premises. Tenant shall maintain the Premises in a
clean, orderly and neat fashion to conform with the high standards of the
Building and the Park, permitting no odors to be emitted from the Premises and
neither commit waste nor permit any waste to be committed thereon. Tenant shall
not burn any trash in or about the Premises or permit any



                                     - 11 -
<PAGE>   12

accumulation of trash. Tenant shall store all trash, refuse and waste material
so as not to constitute a health or fire hazard or nuisance, in adequately
covered containers which are located within the Premises which are not visible
to the general public or in areas designated by Landlord.

        4.3 Unlawful Use. Tenant shall not use or permit the Premises or any
part thereof to be used for any purpose in violation of any municipal, county,
state or federal law, ordinance or regulation, or for any purpose offensive to
the standards of the community of which the Building is a part, or in any manner
which is not in the best interests of the tenants of the Building or the Park.
Tenant shall promptly comply, at its sole cost and expense (except as otherwise
set forth in this Lease), with all laws, ordinances, and regulations now in
force or hereafter adopted and with the requirements of any board of fire
underwriters or similar body relating to or affecting the condition, use or
occupancy of the Premises.

                Tenant shall not do or permit anything to be done in or about
the Premises, nor bring or keep anything therein which will increase the
existing rate of or affect any fire or other insurance upon the Building or any
of its contents, or cause a cancellation of any insurance policy covering the
Building or any part thereof or any of its contents. Tenant shall promptly upon
demand reimburse Landlord for any additional premium charged for any such policy
by reason of Tenant's failure to comply with the provisions of this Section.

        4.4 Liens and Encumbrances. Tenant shall keep the Premises free and
clear of all liens and encumbrances arising or growing out of its use and
occupancy of the Premises. If any lien is filed against the Premises, the
Building or the Park as a result of the acts action or inaction of Tenant,
Tenant shall upon demand post a bond and cause such lien to be removed in
accordance with State law; provided that, at Tenant's option, or if required by
Landlord to expedite the necessary security, provide Landlord with cash or other
security acceptable to Landlord in an amount equal to one and one-half (1-1/2)
times the amount of the claimed lien as security for its prompt removal.
Landlord shall have the right to disburse such security to cause the removal of
the lien if a judgment is entered against Tenant in the lien proceeding, if such
lien causes difficulties for Landlord in connection with its financing of the
Building or if Tenant is otherwise in default under this Lease.

        4.5 Hazardous Substances. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of any biologically
or chemically active or other hazardous substances or materials within the
Premises, the Building or the Park. Tenant shall not allow the storage or use of
such substances or materials in any manner not sanctioned by law or by the
highest standards prevailing in the industry for the storage and use of such
substances or materials, nor allow to be brought into the Project any such
materials or substances except to use in the ordinary course of Tenant's
business, and then only after written notice is given to Landlord of the
identity of such substances or materials.

                Without limitation, hazardous substance and materials shall
include those described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq., any applicable state or local laws and the regulations adopted under these
acts, the Washington Model Toxics Control Act, RCW Chapter 70.105D,


                                     - 12 -
<PAGE>   13

and asbestos. If any lender or governmental agency should shall ever require
testing to ascertain whether or not there has been any release of hazardous
materials by Tenant or its employees, agents, contractors, invitees or licensees
anywhere in the Park, then the reasonable costs thereof shall be reimbursed by
Tenant to Landlord upon demand as additional rent if such requirement applies to
the Premises. In addition, Tenant shall execute affidavits, representations and
the like from time to time at Landlord's request concerning Tenant's best
knowledge and belief regarding the presence of hazardous substances or materials
on the Premises. In all events, Tenant shall indemnify Landlord in the manner
elsewhere provided in the Lease from any release of hazardous materials on the
Premises occurring while Tenant is in possession, or elsewhere if caused by
Tenant or persons acting under Tenant. The within covenants shall survive the
expiration or earlier termination of the Lease term. Tenant shall indemnify,
defend and hold harmless Landlord from any and all claims, damages, fines,
judgments, penalties, liabilities or losses (including, without limitation, a
decrease in the value of the Premises or Building, damages caused by loss or
restriction of rentable or usable space, or any damages caused by adverse impact
on marketing of the space and any and all sums paid for settlement of claims,
litigation expenses, attorneys' fees, consulting and expert fees) of whatever
kind or nature, known or unknown, contingent or otherwise, arising during or
after the Lease term and arising as a result of that contamination by Tenant.
This indemnification includes, without limitation, any and all costs incurred
because of any investigation of the site or any cleanup, removal or restoration
mandated by federal, state or local agency or political subdivision. Without
limiting the foregoing, if Tenant causes or permits the presence of any
hazardous substance on the Premises or the Building that results in
contamination, Tenant shall promptly, at its sole expense, take any and all
necessary actions to return the Premises or Building to the condition existing
prior to the presence of any such hazardous substance on the Premises or
Building. Tenant shall first obtain Landlord's approval for any such remedial
action.

                To the actual knowledge of Landlord no Hazardous Materials are
present on the Premises or the Park in any manner or quantity that would violate
any applicable law or regulation. Landlord has made available to Tenant all
reports and environmental assessments of the Premises or the Park conducted at
the request of or otherwise available to Landlord and Landlord has complied with
all environmental disclosure obligations imposed upon Landlord by applicable law
with respect to this transaction.

        4.6 Signs. Tenant shall not erect or place, or permit to be erected or
placed, or maintain any signs of any nature or kind whatsoever on the exterior
walls or windows of the Premises or elsewhere in the Park, except in compliance
with this paragraph. Tenant agrees to abide by all signing rules and
regulations, if any, promulgated by Landlord. Landlord agrees to provide Tenant
with the following signage identifying Tenant as an occupant of the Building in
size, color and style acceptable to Landlord:

                a. One (1) Building standard sign on the plaza level lobby
directory.

                b. One (1) Building standard sign at the main entry to the
Premises.

                c. One (1) building exterior sign, at Tenant's expense, subject
to Landlord's and Tenant's mutual agreement on the location, size, design and
appearance of the sign. All


                                     - 13 -
<PAGE>   14

Tenant's signage shall comply with all applicable governmental laws,
regulations, ordinances and codes.

                     SECTION V - UTILITIES AND OTHER CHARGES

        5.1 Utilities and Services.

                5.1.1 In accordance with Section 3.3 of this Lease, as
additional rent, Tenant shall pay Tenant's Share of all charges for heat, water,
light, gas, electricity, sewer, garbage, fire protection and any other utilities
and/or services used or consumed on or supplied to the Building and/or the Park,
including the Premises, and not separately metered or charged to Tenant or any
other tenant of the Building or the Park. Tenant shall be solely responsible for
and shall promptly pay when due all charges for telephone and all other charges
which are separately metered or charged to the Premises.

                5.1.2 Landlord shall cause the public and common areas of the
Building and the Park, such as lobbies, elevators, stairs, corridors and
restrooms, to be maintained in reasonably good order and condition, except for
damage occasioned by any act or omission of Tenant or Tenant's officers,
contractors, agents, invitees, licensees or employees, the repair of which
latter damage shall be paid for by Tenant. Twenty-four (24) hours per day, seven
(7) days per week, Tenant shall have access to the Premises (subject to such
Building and Park security systems and procedures as may be in place from time
to time), and Tenant shall have available to it water and electrical service for
lighting and operation of 110-volt office machines. From 7:00 a.m. to 6:00 p.m.
on weekdays (i.e., Monday through Friday) and 8:00 a.m. to 1:00 p.m. on
Saturdays, excluding legal holidays and holiday weekends (collectively "Normal
Business Hours"), Landlord shall furnish the Premises with heat and air
conditioning services. If requested by Tenant, Landlord shall furnish such
services at times other than Normal Business Hours, and Tenant shall pay for the
cost of such after-hours services at rates established by Landlord from time to
time. Landlord's current hourly rates for after hours heating and air
conditioning services is $50.00 per hour.

                Landlord will provide janitorial services customary for first
class buildings comparable to the Building in quality and location. If Tenant
requires excessive or specialized janitorial services, Tenant shall promptly pay
Landlord the additional costs and expenses incurred by Landlord in providing
such services.

                The Building standard mechanical system is designed to
accommodate heating loads generated by lights and equipment using up to 2.5
watts per square foot. Before installing lights and equipment in the Premises
which in the aggregate exceed such amount, Tenant shall obtain the written
permission of Landlord. Landlord may refuse to grant such permission unless
Tenant agrees to pay the cost of installing supplementary air conditioning units
or electrical systems as necessitated by such equipment or lights. In addition,
Tenant shall pay to Landlord in advance, on the first day of each month during
the Lease term, the amount estimated by Landlord as the cost of furnishing
electricity for the operation of such equipment or lights and the amount
estimated by Landlord as the costs of operation and maintenance of supplementary
air


                                     - 14 -
<PAGE>   15

conditioning units or electrical systems as necessitated by Tenant's use of such
equipment or lights. Landlord shall be entitled to install and operate at
Tenant's cost a monitoring/metering system in the Premises to measure the added
demands on electricity, heating, ventilation, and air conditioning systems
resulting from such equipment and lights and from Tenant's after-hours heating,
ventilation and air conditioning service requirements.

                Tenant shall comply with Landlord's instructions, rules and
regulations for the use of drapes, blinds and thermostats in the Building.

                Landlord shall not be liable for any loss, injury or damage to
person or property caused by or resulting from any variation, interruption, or
failure of such services due to any cause whatsoever, or from failure to make
any repairs or perform any maintenance unless such was caused by the gross
negligence or intentional misconduct of Landlord or Landlord's agents or
employees. No temporary interruption or failure of such services incident to the
making of repairs, alterations or improvements, or due to accident, strike or
conditions or other events beyond Landlord's reasonable control shall be deemed
an eviction of Tenant or to relieve Tenant from any of Tenant's obligations
hereunder or to give Tenant a right of action against Landlord for damages.

        5.2 Licenses and Taxes. Tenant shall be liable for, and shall pay
throughout the term of this Lease, all license and excise fees and occupation
taxes covering the business conducted on the Premises and all personal property
taxes levied with respect to all personal property located at the Premises. If
any governmental authority levies a tax or license fee on rents payable under
this Lease or rents accruing from use of the Premises or a tax or license fee in
any form against Landlord or Tenant because of or measured by or based upon
income derived from the leasing or rental thereof (other than a net income tax
on Landlord's income), or a transaction privilege tax, such tax or license fee
shall be paid by Tenant, either directly if required by law, or by reimbursing
Landlord for the amount thereof upon demand.

                          SECTION VI - LETTER OF CREDIT

        6.1 [Intentionally omitted.]

        6.2 Letter of Credit. Within ten (10) days after mutual execution of
this Lease, Tenant shall cause to be delivered to Landlord an irrevocable,
unconditional, transferable standby Letter of Credit in the initial sum of
$1,600,000.00 naming Landlord as beneficiary, issued by a lender acceptable to
Landlord and otherwise substantially in the form of attached Exhibit E (the
"Letter of Credit"). At least thirty (30) days prior to the expiration of the
Letter of Credit, Tenant shall be obligated to deliver to Landlord a renewal
Letter of Credit satisfying the terms of this Section 6.2. If no such renewal
Letter of Credit is provided, it shall be a material default of this Lease, and
no cure period shall apply to such default. Tenant shall be required to maintain
the Letter of Credit for a period of six (6) months after termination of this
Lease. The Letter of Credit shall be governed by the rules of the International
Standby Practices of 1998 or such later revision as may be published by the
Institute of International Banking Law and Practice.


                                     - 15 -
<PAGE>   16

                Provided that Tenant is not then in default under this Lease,
the Letter of Credit may be reduced to the sum of $1,200,000 beginning on or
after January 1, 2003, and it may be further reduced to $800,000 beginning on or
after January 1, 2004. The Letter of Credit shall remain in place through the
Lease term. If Tenant breaches any covenant or condition of this Lease,
including but not limited to the payment of rent or additional rent, and fails
to cure such breach within any cure period provided in this Lease, Landlord may
draw on the Letter of Credit and apply any sums so drawn to reimburse itself for
any damages suffered as a result of Tenant's breach, regardless of whether
Landlord has previously taken any other action against Tenant. After drawing any
sums under the letter of credit, Landlord shall deposit such sums in an
interest-bearing account until the sums are paid out or retained by Landlord.
Any payment to Landlord from the Letter of Credit shall not be construed as a
payment of liquidated damages for any default.

                    SECTION VII - COMPLETION AND ALTERATIONS

        7.1 Delivery of Premises. Landlord shall deliver the Premises to Tenant
in a condition in accordance with Exhibit D attached.

        7.2 Alterations by Tenant. Tenant shall not make any alterations,
additions or improvements in or to the Premises without first submitting to
Landlord professionally-prepared plans and specifications for such work and
obtaining Landlord's prior written approval thereof. Landlord shall not
unreasonably withhold its approval to alterations proposed by Tenant which are
nonstructural and which do not affect any Building systems. Tenant covenants
that it will cause all such alterations, additions and improvements to be
performed at Tenant's sole cost and expense by Landlord or a contractor approved
by Landlord in advance (in the exercise of Landlord's reasonable business
judgment) and in a manner which: (a) is consistent with the Landlord-approved
plans and specifications and any conditions imposed by Landlord in connection
therewith; (b) is in conformity with commercial standards; (c) includes
acceptable insurance coverage for Landlord's benefit; (d) does not affect the
structural integrity of the Building; (e) does not unreasonably disrupt the
business or operations of adjoining tenants; and (f) does not invalidate or
otherwise affect the construction and systems warranties then in effect with
respect to the Park. With respect to any alterations, additions and improvements
made by Landlord for Tenant, Tenant shall pay Landlord a supervision fee in an
amount equal to five percent (5%) of the cost of design, permitting and
construction of the alterations, additions and improvements. Tenant shall secure
all governmental permits and approvals, as well as comply with all other
applicable governmental requirements and restrictions.

                All alterations, additions and improvements (expressly including
all light fixtures, heating, ventilation and air conditioning units and floor
coverings), except trade fixtures and appliances and equipment not affixed to
the Premises, shall immediately become the property of Landlord without any
obligation on its part to pay therefor (other than the Allowance described in
Exhibit D). At the termination of the Lease, Tenant shall remove all cable and
conduit installed, unless otherwise directed by Landlord, but Tenant shall not
be required to remove any other improvements on the termination of this Lease
unless Landlord informs Tenant at the time of approving such improvements that
Tenant will be required to remove them at the termination of this Lease.


                                     - 16 -
<PAGE>   17

                     SECTION VIII - MAINTENANCE OF PREMISES

        8.1 Care of Premises. Tenant shall take good care of the Premises and
shall reimburse Landlord for all damage done to the Building, the Park or the
Premises not covered by insurance and occasioned by any act or omission of
Tenant or Tenant's officers, employees, contractors, agents, invitees, licensees
or employees, including, but not limited to, cracking or breaking of glass. If
Tenant fails to take good care of the Premises, subject to normal wear and tear,
Landlord, at its option after giving Tenant the notice required in this Lease
for nonmonetary defaults, may do so, and in such event upon receiving written
statements from Landlord, Tenant shall promptly pay the entire cost thereof as
additional rent. Landlord shall have the right to enter the Premises for such
purposes.

        8.2 Repairs by Landlord; Maintenance and Repair Charges. Except for
repairs which are Tenant's responsibility under Section 8.1 above, all normal
repairs necessary to maintain the Premises and the Building in a reasonable
condition as a first class office building, as determined by Landlord in the
reasonable exercise of its discretion, shall be performed by Landlord and the
costs incurred by Landlord in so doing shall be reimbursed to Landlord as an
Operating Cost in accordance with Section 3.3 above. Except as provided in
Section XII below, there shall be no abatement of rent or additional rent and no
liability to Landlord under any circumstances by reason of any loss of or any
injury to property, lost profits, or for injury to or interference with Tenant's
business arising from the making of or Landlord's failure to make any repairs,
alterations or improvements or reduction of rent arising by reason of Landlord's
making of repairs, alterations or improvements. Landlord shall seek to make
repairs, alterations and improvements after written notice from Tenant in a
manner that will minimize material injury to property, lost profit, or injury to
or interference with Tenant's business. Landlord shall be responsible for
structural and foundation repairs and roof replacement, the cost of which shall
not be reimbursed to Landlord as an Operating Cost.

        8.3 Surrender of Premises. At the expiration or sooner termination of
this Lease, Tenant shall return the Premises to Landlord in the same condition
in which received (or, if altered, then the Premises shall be returned in such
altered condition unless otherwise directed by Landlord under terms of Section
7.2), reasonable wear and tear excepted. Prior to such return, Tenant shall
remove its trade fixtures and appliances and equipment which have not been
attached to the Premises, and shall restore the Premises to the condition they
were in prior to the installation of said items. In no event shall Tenant remove
floor coverings; heating, ventilating and air conditioning equipment; lighting
equipment or fixtures; wall coverings; window coverings; or other operating
equipment. Tenant's obligation to perform this covenant shall survive the
expiration or termination of this Lease.

                            SECTION IX - COMMON AREAS

        9.1 Control of Common Areas by Landlord. During the term of this Lease,
Tenant and its employees, customers and invitees, shall have the non-exclusive
right to use all entrances, lobbies and other public areas of the Building and
the Park (the "Common Areas"), in common with Landlord, other Building and Park
tenants and their respective employees, customers and invitees. Landlord at all
times shall have the exclusive control and management of the Common


                                     - 17 -
<PAGE>   18

Areas and no diminution of the Common Areas shall be deemed a constructive or
actual eviction of Tenant or entitle Tenant to compensation or a reduction or
abatement of rent. Landlord shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations regarding the use of the
Common Areas and the right to change the area, level, location and arrangement
of the Common Areas.

        9.2 Parking. Ninety-seven (97) covered parking stalls in the Building
parking garage have been allocated to the Premises and forty (40) parking stalls
elsewhere in the Park have been allocated to the Premises. All of the stalls
allocated to the Premises are unreserved and available on a first come, first
served basis. Tenant shall cause its employees and invitees to comply with such
rules and regulations from time-to-time promulgated with respect to the parking
areas of the Building and the Park. Tenant shall pay for covered parking stalls
at the initial rate of forty dollars ($40) per stall per month. Thereafter,
Landlord may increase the cost of covered parking stalls to the fair market
rental value of such stalls. Landlord may charge the fair market rental value
for uncovered parking stalls, provided that (i) the initial charge for such
stalls shall not exceed twenty five dollars ($25) per stall, (ii) Landlord is
charging all tenants in the Park using uncovered parking stalls (unless Landlord
cannot under the terms of a lease existing as of the mutual execution of this
Lease), and (iii) any increase above the initial charge per parking shall be
limited to twenty five percent (25%) per year, cumulative, during the Lease
term. If Tenant exercises any option to renew this Lease, then the limitations
on parking charges which may be made by Landlord under this Lease shall not
apply during any renewal term, notwithstanding any language in Section 2.6 to
the contrary, and Tenant shall pay for covered and uncovered parking at the then
fair market rental rate during the renewal term.

                       SECTION X - INSURANCE AND INDEMNITY

        10.1 Indemnification. Landlord shall not be liable for any injury to any
person, or for any loss of or damage to any property (including property of
Tenant) occurring in or about the Premises from any cause whatsoever, other than
the negligence or intentional misconduct of Landlord or its employees or agents.
Tenant shall indemnify, defend and save Landlord, its officers, agents,
employees and contractors, and other tenants and occupants of the Park, harmless
from all losses, damages, fines, penalties, liabilities and expenses (including
Landlord's personnel and overhead costs and attorneys' fees and other costs
incurred in connection with such claims, regardless of whether claims involve
litigation) resulting from any actual or alleged injury to any person or from
any actual or alleged loss of or damage to any property alleged to be
attributable to Tenant's operation or occupation of the Premises or caused by or
resulting from any act or omission of Tenant or any licensee, assignee, or
concessionaire, or of any officer, agent, employee, guest or invitee of any such
person in or about the Premises, including, but not limited to, the deposit or
release of hazardous or toxic materials or substances or Tenant's breach of its
obligations hereunder. Tenant agrees that the foregoing indemnity specifically
covers actions brought by its own employees. Notwithstanding any of the
foregoing, if losses, liabilities, damages, liens, costs and expenses so arising
are caused by the concurrent negligence of both Landlord and Tenant, their
employees, agents, invitees and licensees, Tenant shall indemnify Landlord only
to the extent of Tenant's own negligence or that of its officers, agents,
employees, guests or invitees.


                                     - 18 -
<PAGE>   19

                As between Landlord and Tenant, the foregoing indemnity is
specifically and expressly intended to constitute a waiver of Tenant's immunity
under Washington's Industrial Insurance Act, RCW Title 51, for the sole purpose
of and only to the extent necessary to provide Landlord with a full and complete
indemnity from claims made against Landlord by Tenant's employees. The
indemnification provided for in this Section with respect to acts or omissions
during the term of this Lease shall survive termination or expiration of this
Lease. Tenant shall promptly notify Landlord of casualties or accidents
occurring in or about the Premises. LANDLORD AND TENANT ACKNOWLEDGE THAT THE
INDEMNIFICATION PROVISIONS OF THIS SECTION 10.1 WERE SPECIFICALLY NEGOTIATED AND
AGREED UPON BY THEM.

        10.2 Insurance. Tenant shall, at its own expense, maintain comprehensive
or commercial general liability insurance with broad form and stop gap
(employer's liability) endorsements in minimum limits of $2,000,000 per
occurrence for property damage or loss and minimum limits of $2,000,000 per
occurrence for personal injuries and death, to indemnify Landlord, Tenant and
any lender designated by Landlord ("Lender") against claims, demands, losses,
damages, liabilities and expenses. Landlord shall have the right to periodically
review the appropriateness of such limits in view of changing industry
conditions and court decisions and to require a reasonable increase in such
limits upon ninety (90) days prior written notice to Tenant. Landlord and Lender
shall be named as additional insureds and shall be furnished with a copy of such
policy or policies of insurance which shall bear an endorsement that the same
shall not be canceled nor materially reduced in coverage or limits without
thirty (30) days prior written notice to Landlord and Lender.

                During the Lease term, Tenant shall also maintain at its own
expense insurance covering its furniture, fixtures, equipment and inventory and
all improvements which it makes to the Premises in an amount equal to the full
insurable value thereof, against fire and such other perils as are covered by an
all risk policy with plate glass endorsement, including all glass on the
Premises. All insurance required under this Lease shall (a) be issued by
insurance companies authorized to do business in the State of Washington and
having a financial rating of at least A, Class X status, as rated in the most
recent edition of Best's Insurance Reports, or with companies otherwise
acceptable to Landlord; (b) be issued as a primary policy, or under the blanket
policy, not contributing with and not in excess of coverage which Landlord may
carry; (c) in the case of the liability policy, contain a contractual liability
coverage endorsement covering Tenant's indemnification duty; and (d) have
deductibles approved by Landlord in its reasonable discretion. If Tenant fails
to maintain such insurance, Landlord may do so, and Tenant shall reimburse
Landlord for the full expense thereof upon demand.

                During the term of this Lease, Landlord shall maintain special
extended coverage casualty insurance on the Building in the amount of the
replacement cost of the Building, and on such other terms as Landlord deems
appropriate. Landlord may also maintain other insurance coverage for the
Building or the Park, including commercial general liability insurance and loss
of rents insurance, in such amounts and on such terms as Landlord's lender may
require or as Landlord shall otherwise deem prudent in the exercise of its
business judgment.


                                     - 19 -
<PAGE>   20

        10.3 Increase in Insurance Premiums. Tenant shall not keep, use, sell or
offer for sale in or upon the Premises any article which is prohibited by
Landlord's insurance policy. Tenant shall pay immediately any increase in
Landlord's premiums for insurance during the term of this Lease which results
from Tenant's occupancy or use of the Premises. In determining whether increased
premiums are the result of Tenant's use of the Premises, a schedule, issued by
the organization establishing the insurance rate on the Premises showing the
various components of such rate, shall be conclusive evidence of the several
items and charges which make up the insurance rate on the Premises.

        10.4 Waiver of Subrogation. Neither Landlord nor Tenant shall be liable
to the other party or to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss or damage to any building,
structure or tangible personal property of the other occurring in or about the
Premises, even though such loss or damage might have been occasioned by the
negligence of such party, its agents or employees, if such loss or damage is
covered by insurance benefiting the party suffering such loss or damage or was
required to be covered by insurance under terms of this Lease. Each party shall
cause each insurance policy obtained by it to contain the waiver of subrogation
clause.

                     SECTION XI - ASSIGNMENT AND SUBLETTING

        11.1 Assignment or Sublease. Tenant shall not voluntarily, involuntarily
or by operation of law, assign, sell, pledge, transfer, mortgage or encumber
this Lease or any interest therein, or sublet the whole or any part of the
Premises (any of which events being a "Transfer" and any such assignee,
purchaser, mortgagee, pledgee or other transferee being a "Transferee" for
purposes of this Section XI) without first obtaining Landlord's written consent,
which shall not be unreasonably withheld if all of the following conditions
precedent are fully and completely satisfied, but which otherwise may be
withheld by Landlord in its sole discretion:

                (a) The proposed Transferee is at least as creditworthy as
Tenant when Tenant entered into this Lease, and satisfies Landlord's then
current credit standards for tenants of the Building and the Park, and in
Landlord's opinion has the financial strength and stability to perform all
obligations under this Lease to be performed by Tenant as and when they fall
due.

                (b) The proposed Transferee will use the Premises for a purpose
which in Landlord's reasonable opinion (i) is lawful, (ii) is consistent with
the permitted use of the Premises under this Lease, (iii) is consistent with the
general character of business carried on by tenants in similar office buildings,
(iv) does not conflict with any exclusive rights or covenants not to compete in
favor of any other tenant or proposed tenant in the Building and the Park, (v)
will not increase the likelihood of damage or destruction, (vi) will not
increase the rate of wear and tear to the Premises or common areas, (vii) will
not likely cause an increase in insurance premiums for insurance policies
applicable to the Building (unless the proposed Transferee agrees to pay such
additional cost), and (viii) will not require new tenant improvements
incompatible with then existing Building systems and components.


                                     - 20 -
<PAGE>   21

                (c) Tenant pays to Landlord all of Landlord's reasonable
attorneys' fees and costs incurred in connection with negotiation, review and
processing of the Transfer, plus a processing fee of $1,000.

                (d) At the time of the proposed Transfer, Tenant is not in
default under or in breach of any term, provision or covenant of this Lease.

                (e) In Landlord's business judgment: (i) the proposed Transferee
must have a business reputation and financial strength equal to or better than
the Tenant at the time of mutual execution of this Lease, and (ii) the proposed
transfer shall not create an undesirable mix of tenants at the Park.

                (f) At least seventy-five percent (75%) for the rentable area of
the Building and the Park is leased to paying tenants.

                (g) The Transfer will not otherwise have or cause a material
adverse impact on Landlord's interests in the Park, the Building or the
Premises.

Tenant shall demonstrate that each of the foregoing conditions is satisfied as a
condition to any permitted transfer. No Transfer shall relive Tenant of any
liability under this Lease. Consent to any Transfer shall not operate as a
waiver of the necessity of a consent to any subsequent Transfer, and the terms
of such consent shall be binding upon any Person holding by, under or through
Tenant.

        11.2 Entity Ownership. The cumulative transfer (i.e. in one or more
sales or transfers, by operation of law or otherwise) of an aggregate of fifty
percent (50%) or more of the voting stock issued and outstanding on the date of
this Lease is executed by Landlord, including by creation or issuance of new
stock of a corporation which is (i) owned by Tenant, (ii) the corporate assignee
of Tenant, or (iii) any corporation which is a general partner in a general or
limited partnership or member of a limited liability company which is the tenant
or an assignee of the tenant of this Lease; or the cumulative transfer of an
aggregate of fifty percent (50%) or more of the ownership interest in a general
or limited partnership, limited liability company or other entity which is the
tenant or an assignee of the tenant, by which an aggregate of fifty percent
(50%) or more of such ownership interest is vested in a person or persons who
are not general partners, members or other owners (except as the result of
transfer by gift or inheritance), shall be deemed a Transfer of this Lease and
shall be subject to the provisions of Section 11.1. For the purpose of Section
11.1, any entity which has undergone any of the changes described in this
Section shall be deemed to be a Transferee. The term "voting stock" means the
stock regularly entitled to vote for election of directors of the corporation;
and any stock, however denominated, which is convertible into such voting stock,
shall be treated for purposes of the foregoing as if it were in fact converted.
This Section 11.2, however, shall not be applicable to any Tenant corporation
the outstanding voting stock of which is listed on a national securities
exchange and actively traded "over the counter."

        11.3 Recapture by Landlord. If Tenant at any time desires to Transfer
this Lease, it shall give notice (a "Tenant Transfer Notice") to Landlord of its
desire to do so which notice shall


                                     - 21 -
<PAGE>   22

state the rent at which it proposes so to Transfer and shall contain full and
complete financial and business information on its intended Transferee. In
addition to Landlord's rights under Section 11.1, Landlord may elect by notice
to Tenant (a "Landlord's Repossession Notice"), within forty-five (45) days of
receipt of the Tenant Transfer Notice, to terminate this Lease as to that
portion of the Premises subject to the Tenant Transfer Notice.

                If Landlord exercises such right to terminate, Landlord shall be
entitled to recover possession of the portion of the Premises subject of the
Tenant Transfer Notice on the later of (i) the proposed date for possession by
such Transferee, as set out in the Tenant Transfer Notice, or (ii) forty-five
(45) days after the date of Landlord's Repossession Notice. All costs incurred
by Landlord in constructing improvements, such as doors or partitions,
separating the remaining Premises from the repossessed area of the Premises
shall be paid by Tenant within thirty (30) days of demand. If Landlord does not
exercise such right to terminate and otherwise approves the transfer, Tenant may
thereafter Transfer this Lease or a portion of the Premises subject thereof, but
at a rental not less than that offered to Landlord in the Tenant Transfer Notice
and not later than forty-five (45) days after delivery of the Tenant Transfer
Notice to Landlord, unless a further notice is given pursuant to this section,
provided (i) Landlord consents thereto pursuant to Section 11.1, (ii) Tenant
delivers to Landlord prior to the effective date of any such Transfer duplicate
originals of any instrument effecting such Transfer, in form and content
satisfactory to Landlord, and (iii) all amounts received by Tenant from the
Transferee in excess of the sum of (a) the Rent payable hereunder for the area
of the Premises so Transferred and (b) brokerage commissions, legal fees,
marketing costs and tenant improvement costs incurred by Tenant in connection
with the Transfer, shall belong to and shall immediately be paid to Landlord as
Additional Rent.

                No action or inaction by Landlord in connection with its rights
under this Section 11.3 shall constitute or be deemed to constitute an approval
of a proposed Transfer for purposes of Section 11.1 except as specifically set
forth in a notice from Landlord to Tenant.

        11.4 Assignee Obligation. Any Transferee other than a subtenant approved
by Landlord shall assume all obligations of Tenant and shall be jointly and
severally liable with Tenant for the payment of rent, additional rent and other
charges and performance of all of Tenant's obligations under this Lease. Tenant
shall provide Landlord with full and complete duplicate originals of all
instruments of assignment, sublease or assumption. It shall not be unreasonable
for Landlord to withhold consent to a proposed assignment or sublease because it
wishes to exercise its right to recapture all or part of the Premises under
Section 11.3 hereof, or because (a) the proposed transferee is any governmental
agency, federal, state, local or foreign government or incorporation, (b) the
transfer would cause the Landlord to violate another lease at the Park or
agreement to which Landlord is a party or would give a Building tenant the right
to cancel its lease, or (c) the proposed transferee occupies space in the
Building or the Park, is negotiating with Landlord to lease space in the
Building or the Park, or has negotiated with Landlord to lease space in the
Building or the Park during the six months immediately proceeding the
notification from Tenant.


                                     - 22 -
<PAGE>   23

        11.5 Additional Consideration. If Tenant assigns its interest under this
Lease, or sublets all or any portion of the Premises, Tenant shall pay to
Landlord (in addition to minimum rent and all other amounts payable by Tenant
under this Lease) as additional rent, within ten (10) days after receipt, all
rent, bonus rent, assignment fees and other consideration payable by the
assignee or subtenant in excess of (a) the rent otherwise payable by Tenant from
time to time under this Lease, and (b) legal fees and leasing commissions
incurred by Tenant due to the sublease or assignment, and out-of-pocket costs
incurred by Tenant to pay the costs of labor and materials paid to third parties
for renovations made to the premises to accommodate the assignee or subtenant.

        11.6 Assignment by Landlord. If Landlord sells or otherwise transfers
the Building, or if Landlord assigns its interest under this Lease (other than
for security purposes) Landlord shall transfer the Letter of Credit to the
purchaser and shall cause the purchaser to assume this Lease, whereupon such
purchaser, transferee or assignee thereof shall be deemed to have assumed
Landlord's obligations hereunder from and after the transfer date, and Landlord
shall thereupon be relieved of all liabilities hereunder, but this Lease shall
otherwise remain in full force and effect.

        11.7 Permitted Transfers. Anything contained herein to the contrary
notwithstanding, Landlord hereby consents to an assignment of this Lease, or a
subletting of all or part of the Premises, to (a) the parent of Tenant or to a
wholly-owned subsidiary of Tenant or of such parent, (b) any corporation or
other entity into which or with which Tenant may be merged or consolidated,
provided that the net worth of the resulting corporation or entity is at least
equal to the greater of (i) the net worth of Tenant on the date hereof, or (ii)
the net worth of Tenant immediately prior to such merger or consolidation, or
(c) any entity to which Tenant sells all or substantially all of its assets,
provided that such entity expressly assumes all of Tenant's obligations
hereunder and that the net worth of the purchaser is at least equal to the
greater of (i) the net worth of Tenant on the date hereof, or (ii) the net worth
of Tenant immediately prior to such purchase. Any assignee or subtenant
described in this Section is a "Permitted Transferee."

                      SECTION XII - DESTRUCTION OF PREMISES

        12.1 Partial Destruction. If the Premises are rendered partially
untenantable by fire or other insured casualty, and if the damage is repairable
within sixty (60) days from the date of the occurrence (with the repair work and
preparations therefore to be done during regular working hours on regular work
days), Landlord shall repair the Premises with due diligence, to the extent of
the insurance proceeds available, and the minimum rent and additional rent shall
be abated in the proportion that the untenantable portion of the Premises bears
to the whole thereof for the period from the date of the casualty to the
completion of the repairs, unless the casualty results from Tenant's negligence
or its breach of the terms hereof.

                If thirty percent (30%) or more of the rentable area of the
Building is destroyed or damaged, regardless of whether the Premises are
damaged, Landlord may terminate this Lease as of the date of such damage or
destruction by giving notice to Tenant within thirty (30) days thereafter of the
election so to do. If thirty percent (30%) or more of the rentable area of the
Premises is destroyed or damaged within the last twelve (12) months of the Lease
term, then



                                     - 23 -
<PAGE>   24

Tenant may terminate this Lease by giving Landlord written notice of its intent
to do so within thirty (30) days after the casualty event.

        12.2 Total Destruction. If the Premises are completely destroyed by fire
or other casualty, or if they are damaged by uninsured casualty, or by insured
casualty to such an extent that the damage cannot be repaired within sixty (60)
days of the occurrence, Landlord shall have the option to restore the Premises
or to terminate this Lease on sixty (60) days written notice, effective as of
any date not more than sixty (60) days after the occurrence. If this Section
becomes applicable, Landlord shall advise Tenant within thirty (30) days after
such casualty whether Landlord elects to restore the Premises or to terminate
this Lease. If Landlord elects to restore the Premises, it shall commence and
prosecute the restoration work with diligence. For the period from the date of
the casualty until completion of the repairs (or the date of termination of this
Lease, if Landlord elects not to restore the Premises), the minimum rent and
additional rent shall be abated in the same proportion that the untenantable
portion of the Premises bears to the whole thereof, unless the casualty results
from Tenant's negligence or its breach of the terms thereof. If the Premises are
totally damaged or destroyed, and the repairs to the Premises have not been
completed within nine (9) months after the damage or destruction (subject to
delays such as force majeure delays which are beyond Landlord's control), Tenant
shall have the right to terminate this Lease by written notice given to Landlord
within thirty (30) days after the end of the foregoing nine (9) month period,
provided Landlord does not complete the repairs prior to the date Tenant
delivers its termination notice to Landlord.

        12.3 Limitation. Except as otherwise provided in this Lease, Landlord
shall not be liable to Tenant for destruction or damage to any of Tenant's
property including fixtures, equipment or other improvements, or for damages or
compensation for inconvenience, loss of business or disruption arising from
repairs or restoration of any portion of the Building or the Premises.



                                     - 24 -

<PAGE>   25

                          SECTION XIII - EMINENT DOMAIN

        13.1 Total Taking. If all of the Premises are taken by eminent domain,
this Lease shall terminate as of the date Tenant is required to vacate the
Premises and all rentals shall be paid to that date. The term "eminent domain"
shall include the taking or damaging of property by, through or under any
governmental or statutory authority, and any purchase or acquisition in lieu
thereof, whether the damaging or taking is by government or any other person.

        13.2 Partial Taking. If a taking of any part of the Premises by eminent
domain renders the remainder thereof unusable for the business of Tenant, in the
reasonable judgment of Landlord, this Lease may, at the option of either party,
be terminated by written notice given to the other party not more than thirty
(30) days after Landlord receives notice (and provides Tenant written notice) of
the taking, and such termination shall be effective as of the date when Tenant
is required to vacate the portion of the Premises so taken. If this Lease is so
terminated, all rent shall be paid to the date of termination.

                Whenever any portion of the Premises is taken by eminent domain
and this Lease is not terminated, Landlord shall at its expense proceed with all
reasonable dispatch to restore, to the extent of available proceeds and to the
extent it is reasonably prudent to do so, the remainder of the Premises to the
condition it was in immediately prior to such taking, and Tenant shall at its
expense proceed with all reasonable dispatch to restore its fixtures, furniture,
furnishings, floor covering and equipment to the same condition they were in
immediately prior to such taking. The minimum rent and additional rent payable
hereunder shall be reduced from the date Tenant is required to partially vacate
the Premises in the same proportion that the area taken bears to the total area
of the Premises prior to taking.

        13.3 Damages. Landlord reserves all right to the entire damage award or
payment for any taking by eminent domain or a transfer in lieu thereof, and
Tenant waives all claim whatsoever against Landlord for damages for termination
of its leasehold interest in the Premises or for interference with its business
as a result of such taking. Tenant hereby grants and assigns to Landlord any
right Tenant may now have or hereafter acquire to such damages and agrees to
execute and deliver such further instruments of assignment as Landlord may from
time to time request; however, Tenant shall have the right to claim from the
condemning authority all compensation that may be recoverable by Tenant on
account of any loss incurred by Tenant in removing Tenant's furniture, trade
fixtures and equipment to the extent such damages are awarded separately in the
eminent domain proceeding and not as part of Landlord's damages.

                         SECTION XIV - DEFAULT OF TENANT

        14.1 Defaults.

        14.1.1 Time is of the essence of this Lease. Tenant shall be in default
under this Lease if: (i) Tenant violates or breaches or fails to keep or perform
any covenant, term or condition of this Lease; (ii) Tenant or any guarantor of
Tenant's obligations under this Lease (a "Guarantor") files or is the subject of
a petition in bankruptcy; (iii) a trustee or receiver is appointed for Tenant's
or any Guarantor's assets; (iv) Tenant or any Guarantor makes an



                                      -25-
<PAGE>   26

assignment for the benefit of creditors; or (v) Tenant abandons the Premises
(for this purpose, abandonment shall mean that no Tenant employee is regularly
present in the Premises, and Tenant has no intention to reoccupy the Premises).
If the default under (i) above is the nonpayment of rent, additional rent or any
other sum payable by Tenant under this Lease, Tenant shall have five (5) days
after written notice to cure the default. If the default under (i) above is
something other than nonpayment of rent, additional rent or any other sum
payable by Tenant under this Lease, Tenant shall have twenty (20) days following
receipt of written notice from Landlord within which to cure any such default;
provided, if the nature of the default is such that the same cannot reasonably
be cured within such twenty (20) day period, the cure period shall be extended
for so long as may be reasonably necessary to cure the default so long as Tenant
commences the cure within the initial twenty (20) day period, thereafter
diligently prosecutes the cure to completion in good faith, and furnishes
Landlord with such assurances and indemnities as Landlord may reasonably require
to insure completion thereof and fully and completely protect Landlord from any
loss or liability resulting from any such default or any delay by Tenant in
curing the default. The foregoing notices and cure periods shall include but not
be in addition to any notices and cure periods otherwise required by RCW 59.12,
as now or hereafter amended, or any legislation in substitution thereof.

                14.1.2 If a default is not cured within the applicable cure
period, if any, Landlord shall have the following rights and remedies, at its
option which shall not be exclusive, but shall be cumulative and in addition and
supplemental to any and all other rights and/or remedies that Landlord may have
at law or if equity: (1) to declare the term hereof ended and to reenter the
Premises and take possession thereof and remove all persons therefrom, and
Tenant shall have no further claim thereon or hereunder; (2) without declaring
this Lease terminated, to reenter the Premises and occupy the whole or any part
thereof for and on account of Tenant and to collect any unpaid rentals and other
charges, which have become payable, or which may thereafter become payable; or
(3) even though it may have reentered the Premises, to thereafter elect to
terminate this Lease and all of the rights of Tenant in or to the Premises. If
Landlord reenters the Premises under option (2) above, Landlord shall not be
deemed to have terminated this Lease or the liability of Tenant to pay any
rental or other charges thereafter accruing, or to have terminated Tenant's
liability for damages under any of the provisions hereof, by any such reentry or
by any action, in unlawful detainer or otherwise, to obtain possession of the
Premises, unless Landlord shall have notified Tenant in writing that it has so
elected to terminate this Lease, and Tenant further covenants that the service
by Landlord of any notice pursuant to the unlawful detainer statutes and the
surrender of possession pursuant to such notice shall not (unless Landlord
elects to the contrary at the time of or at any time subsequent to the serving
of such notices and such election is evidenced by written notice to Tenant) be
deemed to be a termination of this Lease. In the event of any entry or taking
possession of the Premises, Landlord shall have the right, but not the
obligation, to remove therefrom all or any part of the personal property located
therein and may place the same in storage at a public warehouse at the expense
and risk of Tenant.

                14.1.3 If Landlord elects to terminate this Lease pursuant to
the provisions of options (1) or (3) in Section 14.1.2 above, Landlord may
recover from Tenant as damages the following: (i) the worth at the time of award
of any unpaid rental which had been earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by which the



                                      -26-
<PAGE>   27

unpaid rental which would have been earned after termination until the time of
award exceeds the amount of such rental loss Tenant proves could have been
reasonably avoided; plus (iii) the worth at the time of award of the amount by
which the unpaid rental for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; plus (iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease, including, but not limited, any costs or expenses incurred by
Landlord in (1) retaking possession of the Premises, including reasonable
attorneys' fees therefor, (2) maintaining or preserving the Premises after such
default, (3) preparing the Premises for reletting to a new tenant, including
repairs or alterations to the Premises for such reletting, (4) leasing
commissions, and (5) any other costs necessary or appropriate to relet the
Premises; plus (v) 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 the laws of
the State of Washington; plus (vi) the total value at the time of the award of
all of the concessions granted to Tenant at the time of signing this Lease,
prorated based on the remainder of the initial term of the Lease. As used in
items (i) and (ii) above, the "worth at the time of award" is computed by
allowing interest at the interest rate specified in Section 3.4 hereof.

                As used in item (iii) above, the "worth at the time of award" is
computed by using a discount rate of six percent (6%).

                14.1.4 For all purposes of this Section 14.1 only, the term
"rental" shall be deemed to be the minimum rent and all additional rent and
other sums required to be paid by Tenant pursuant to the terms of this Lease.
All such sums, other than the minimum rent, shall, for the purpose of
calculating any amount due under the provisions of subparagraph (iii) above, be
computed on the basis of the average monthly amount thereof accruing during the
immediately preceding twelve (12) month period, except that if it becomes
necessary to compute such rental before such a twelve (12) month period has
occurred then such rental shall be computed on the basis of the average monthly
amount hereof accruing during such shorter period.

        14.2 Legal Expenses. If either party commences a legal proceeding to
enforce or obtain a declaration of its rights under this Lease, the prevailing
party shall be entitled to reimbursement from the non-prevailing party for the
prevailing party's reasonable costs and attorneys' fee, whether such costs and
attorneys' fees are incurred in such proceeding or on appeal.

        14.3 Remedies Cumulative; Waiver. Landlord's remedies hereunder are
cumulative, and Landlord's exercise of any right or remedy due to a default or
breach by Tenant shall not be deemed a waiver of, or alter, affect or prejudice
any other right or remedy which Landlord may have under this Lease or by law.
Neither the acceptance of rent nor any other acts or omissions of Landlord at
any time or times after the happening of any event authorizing the cancellation
or forfeiture of this Lease shall operate as a waiver of any past or future
violation, breach or failure to keep or perform any covenant, agreement, term or
condition hereof or to deprive Landlord of its right to cancel or forfeit this
Lease, upon the written notice provided for herein, at any time that cause for
cancellation or forfeiture may exist, or be construed so as at any future time
to estop Landlord from promptly exercising any other option, right or remedy
that it may have under any term or provision of this Lease.



                                      -27-
<PAGE>   28

              SECTION XV - ACCESS BY LANDLORD; DEFAULT OF LANDLORD

        15.1 Right of Entry. Landlord and its agents shall have the right to
enter the Premises at any time upon reasonable prior notice to Tenant, to
examine the same, to show them to prospective purchasers, lenders or tenants, to
make such alterations, repairs, improvements or additions as Landlord may deem
necessary or desirable; provided, in an emergency or perceived emergency or to
provide normal services (such as janitorial service) to the Premises, no advance
notice shall be required. If Tenant is not personally present to permit entry
and an entry is necessary in an emergency, Landlord may enter the same by master
key or may forcibly enter the same, without rendering Landlord liable therefor.
Nothing contained herein shall be construed to impose upon Landlord any duty of
repair except as specifically provided for herein. Tenant shall not change the
locks to the Premises without first advising Landlord thereof and providing
Landlord with evidence that the new lock is keyed to Landlord's master key
system for the Park.

        15.2 Excavation. If Landlord authorizes an excavation upon land adjacent
to the Premises, Tenant shall permit the person doing the excavation to enter
the Premises for the purpose of doing such work as Landlord deems necessary to
preserve the walls of the Building from injury or damage and to support the same
by proper foundations, without any claim for damage or indemnification against
Landlord or diminution or abatement of rent.

        15.3 Default of Landlord. If Landlord defaults in the performance of any
covenant required to be performed by Landlord, Tenant may serve upon Landlord a
written notice specifying the default. If Landlord does not remedy the default
within thirty (30) days following receipt thereof or, in the case of a default
which takes more than thirty (30) days to cure, if Landlord has not commenced to
remedy the same within thirty (30) days following receipt thereof, Tenant may,
after expiration of the notice period specified in Section 18.8 hereof, cure the
default on Landlord's behalf and the costs incurred by Tenant in so doing shall
be paid by Landlord to Tenant within thirty (30) days after Tenant's giving
Landlord written notice of the amounts so incurred, together with reasonable
supporting information or documentation.

                       SECTION XVI - SURRENDER OF PREMISES

        16.1 Surrender of Possession. Tenant shall promptly yield and deliver to
Landlord possession of the Premises upon the expiration or earlier termination
of this Lease in the condition they were required to be maintained hereunder
(subject to the removals required or permitted hereunder). Landlord may place
and maintain a "For Rent" sign in conspicuous places on the Premises for sixty
(60) days prior to the expiration or earlier termination of this Lease.

        16.2 Holding Over. Any holding over by Tenant after the expiration of
the term hereof with Landlord's consent shall be construed as a tenancy from
month to month on the terms and conditions set forth herein, except as otherwise
agreed by the parties, which tenancy may be terminated by either party upon
thirty (30) days written notice to the other party. Any holding over by Tenant
after the expiration of the term hereof without Landlord's consent shall be
deemed to be a tenancy at will, terminable at any time by Landlord at a rental
rate equal to two (2) times



                                      -28-
<PAGE>   29

the rental rate in effect on the date of such expiration of the Lease term,
prorated on a daily basis, and otherwise on the terms, covenants and conditions
of this Lease to the extent applicable.

                         SECTION XVII - QUIET ENJOYMENT

        17.1 Landlord's Covenant. Landlord represents and warrants to Tenant
that Landlord is the sole owner of the Building in fee simple, and that the only
deed of trust presently encumbering the Building is held by Teacher's Insurance
and Annuity Association of America ("Lender"). Tenant, upon fully complying with
and promptly performing all of the terms, covenants and conditions of this Lease
on its part to be performed, shall have and quietly enjoy the Premises for the
term set forth herein, if its performance of such terms, covenants and
conditions continues for such period, subject, however, to matters of record on
the date hereof and to those matters to which this Lease may be subsequently
subordinated.

                          SECTION XVIII - MISCELLANEOUS

        18.1 Notices. Any notices required in accordance with any of the
provisions herein shall be in writing and personally delivered or mailed by
registered or certified mail, return receipt requested, to the Landlord c/o JSH
Properties, Inc., 10220 N.E. Points Drive, Suite 203, Kirkland, Washington
98033, Attention: Property Manager; to Tenant at the address set forth on page
1; or to such other address as a party shall from time to time advise the other
party by a written notice given in accordance with this Section 18.1. If Tenant
is a partnership or joint enterprise, any notice required or permitted hereunder
may be given by or to any one partner thereof with the same force and effect as
if given by or to all thereof. A notice shall be deemed received on the date of
personal delivery, or if mailed, on the second (2nd) business day after the
postmark affixed on the envelope by the United States Post Office.

        18.2 Successors or Assigns. All of the terms, conditions, covenants and
agreements of this Lease shall extend to and be binding upon Landlord, Tenant
and, subject to the terms of Section XI hereof, their respective heirs,
administrators, executors, successors and permitted assigns, and upon any person
or persons coming into ownership or possession of any interest in the Premises
by operation of law or otherwise, and shall be construed as covenants running
with the land.

        18.3 [Intentionally omitted.]

        18.4 Tenant Defined. The word "Tenant" as used herein shall mean each
and every person, partnership or corporation who is mentioned as Tenant herein
or who executes this Lease as Tenant. If there shall be more than one Tenant,
they shall all be bound jointly and severally by the terms, covenants and
agreements herein.

        18.5 Brokers' Commissions. Landlord will pay commissions to Kidder,
Mathews & Segner, Inc. ("Brokers") in accordance with separate agreements
between Landlord and Brokers. Tenant agrees to indemnify and hold Landlord
harmless from all liabilities and claims for brokerage commissions or finder's
fees growing out of agreements which Tenant has made with persons or entities
other than Brokers.



                                      -29-
<PAGE>   30

        18.6 Partial Invalidity. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance is, to any
extent, invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.

        18.7 Recording. Neither Landlord or Tenant shall record this Lease or
any memorandum hereof.

        18.8 Subordination; Notice to Lender; Attornment.

                18.8.1 Unless otherwise designated by Landlord, this Lease shall
be subordinate to all existing or future mortgages and deeds of trust on the
Park, and to any extensions, renewals or replacements thereof; however, Tenant's
possession of the Premises pursuant to this Lease may not be disturbed by any
such mortgagee so long as Tenant is not in default under this Lease. Within five
(5) days after mutual execution of this Lease, and thereafter within twenty (20)
days of Landlord's request therefor, Tenant shall execute and deliver all
instruments or certificates which Landlord or Lender may deem necessary or
appropriate to reflect such subordination of this Lease, provided that Tenant
receives Lender's nondisturbance covenant. Landlord shall use reasonable
commercial efforts to negotiate and deliver to Tenant an executed subordination,
attornment and non-disturbance agreement acceptable to Lender, Landlord and
Tenant within thirty (30) days after mutual execution of the Lease. Within
twenty (20) days of Landlord's request therefor, Tenant shall promptly execute
and deliver to third parties designated by Landlord an estoppel certificate or
letter in the form requested by Landlord or its lender that correctly recites
the facts with respect to the existence, terms and status of this Lease. Tenant
agrees to attorn to Landlord's successor following any foreclosure sale or
transfer in lieu thereof.

                18.8.2 Tenant shall, within ten (10) days of demand, execute,
acknowledge and deliver to Landlord or its designee a written statement
certifying: (i) the date the Lease term commenced or will commence and the date
it expires; (ii) the date Tenant entered into occupancy of and commenced
business operations in the Premises; (iii) the amount of Base Rent and the date
to which Rent has been paid; (iv) that this Lease is in full force and effect
and has not been assigned, modified, supplemented or amended in any way (or
specifying the date and terms of each agreement so affecting this Lease) and
that no part of the Premises has been sublet (or to the extent such is not the
case, a copy of any sublease); (v) that, to the extent such is the case, this
Lease represents the entire agreement between the parties as to the Premises;
(vi) that Landlord is not in default under this Lease (or is such is not the
case, the extent and nature of such default); (vii) that all required advanced
by Landlord to Tenant on account of tenant improvements have been made (or the
extent that such is not the case); (viii) on the date of such certification
there are no existing defenses or claims which Tenant has against the
enforcement of this Lease by Landlord (or if such is not the case, the extent
and nature of such defenses or claims); (ix) the amount of the Security Deposit
paid to Landlord; and (x) any other fact or representation that a mortgagee or
purchaser may reasonably request. It is intended that any such statement
delivered pursuant to this Section 18.8.2 shall be fully and completely binding
upon Tenant for all purposes



                                      -30-
<PAGE>   31

of this Lease, may be relied upon by a prospective purchaser or mortgagee of
Landlord's interest, or any assignee of any mortgage upon Landlord's interest in
the Building or the Land. If Tenant shall fail to respond within ten (10) days
of receipt of a written request by Landlord therefor, Tenant shall be deemed to
have given a certificate as above provided without modification and shall be
conclusively deemed to have admitted the accuracy of any information supplied by
Landlord to a prospective purchaser or mortgagee, that this Lease is full force
and effect, that there are no uncured defaults in Landlord's performance, that
the Security Deposit is as stated in this Lease and that not more than one
month's Rent has been paid in advance.

                18.8.3 Notwithstanding anything to the contrary in this Lease,
Landlord shall not be in default under any provision of this Lease unless
written notice specifying such default is given to Landlord and to any lender
who has been identified to Tenant in writing as a party to whom notice must be
sent. Any lender of Landlord entitled to notice pursuant to the preceding
sentence shall have the right to cure any default on behalf of Landlord within
the later of (a) thirty (30) days after receipt of such notice, or (b) thirty
(30) days after the expiration of any cure period provided to Landlord pursuant
to this Lease; provided, if such default cannot reasonably be cured within such
thirty (30) day period, Landlord's lender shall be entitled to such additional
time as may be reasonably necessary to cure the default, if within the thirty
(30) day period the lender commences and thereafter diligently pursues the
actions necessary for the lender to cure such default by Landlord (including, if
possession of the Premises is necessary to cure the default, commencing such
judicial or non-judicial proceedings as may be necessary for lender or a
receiver to take possession of the Premises). So long as a lender is diligently
taking the actions reasonably necessary for it to cure Landlord's default,
Tenant shall not exercise its remedies for Landlord's default under this Lease.

        18.9 Financial Statements. Within ten (10) days after Landlord's request
therefor, Tenant shall deliver to Landlord such current financial statements
regarding Tenant as Landlord may reasonably request. Tenant shall certify the
accuracy of such statements. Landlord may make the financial statements
available to potential lenders or purchasers, but shall otherwise preserve their
confidentiality except in connection with legal proceedings between the parties
or as otherwise directed by court rule or order.

        18.10 [Intentionally omitted.]

        18.11 Liability of Landlord. Tenant shall look solely to Landlord's
interests in the Building (including without limitation the rents, issues and
profits from the Building) for the satisfaction of any judgment or decree
against Landlord based upon any default under this Lease, and no other property
or assets of the Landlord (or its partners) shall be subject to levy, execution
or other enforcement procedures for satisfaction of any such judgment or decree.

        18.12 Force Majeure. Neither Tenant nor Landlord shall be deemed in
default hereof nor liable for damages arising from its failure to perform its
duties or obligations hereunder if such is due to causes beyond its reasonable
control, including, but not limited to, acts of God, acts of civil or military
authorities, fires, floods, windstorms, earthquakes, strikes or other labor
disturbances, civil commotion or war.



                                      -31-
<PAGE>   32

        18.13 Transportation Management Program; Recycling. Tenant shall
cooperate with Landlord in meeting the objectives and complying with the terms
and conditions of any transportation management plan applicable to the Building
or the Park. Landlord will provide Tenant with a copy of any such transportation
management plan now or hereafter in effect. In addition, Tenant will cooperate
with and participate in any and all recycling programs now or hereafter in place
with respect to the Building or the Park.

        18.14 Cure Right of Landlord. All covenants and agreements to be kept or
performed under Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any abatement of rent.

                If Tenant shall fail to pay any sum of money, other than rent,
required to be paid by hereunder or shall fail to perform any other act on its
part to be performed hereunder, Landlord may, after giving any notice of default
required under this Lease, but shall not be obligated to, and without waiving
any default of Tenant or rights or remedies of Landlord or releasing Tenant from
any obligations of Tenant hereunder, make any such payment or perform any such
other act on Tenant's part to be made or performed as in this Lease provided.

                All sums so paid by Landlord and all necessary incidental costs,
together with the interest thereon at the default rate as provided in Section
3.4 from the date of such payment by Landlord, shall be paid to Landlord
forthwith on demand, and Landlord shall have (in addition to any other right or
remedy of Landlord) the same rights and remedies in the event of nonpayment
thereof by Tenant as in the case of default by Tenant and the nonpayment of
rent.

        18.15 Name of Building. Landlord may adapt or change the name or address
or identity of the Building or any part thereof or the Park (or any part
thereof) including roof signs, ground level and lobby signage and any other
Building or Park identification.

        18.16 Tax on Rent. The Rent herein is exclusive of any sales, business
and occupation, gross receipts or other tax based on Rents, or tax on Tenant's
property or tax upon or measured by the number of employees of Tenant, or any
similar tax or charge. If any such tax or charge be hereinafter enacted, and
imposed upon Landlord, Tenant shall pay Landlord the amount thereof concurrently
with each monthly Rent payment. If it shall not be lawful for Tenant so to
reimburse Landlord, the monthly Rent payable to Landlord under this Lease shall
be revised to net Landlord the same net rental after imposition of any such tax
or charge upon Landlord as would have been payable to Landlord prior to the
imposition of such tax or charge. Tenant shall not be liable to reimburse
Landlord for any federal income tax or other income tax of a general nature
applicable to Landlord's income.

        18.17 Light, Air and View. Landlord does not guarantee the continued
present status of light or air over any property adjoining or in the vicinity of
the Building or the Park. Any diminution or shutting off of light, air or view
by any structure which may be erected near or adjacent to the Building or the
Park shall in no way affect this Lease or impose any liability on Landlord.



                                      -32-
<PAGE>   33

                        SECTION XIX - EXECUTION OF LEASE

        19.1 Execution by Landlord and Tenant; Approval of Lender. Landlord
shall not be deemed to have made an offer to Tenant by furnishing Tenant with a
copy of this Lease with particulars inserted. No contractual or other rights
shall exist or be created between Landlord and Tenant until all parties hereto
have executed this Lease and until it has been approved in writing by Lender and
fully executed copies have been delivered to Landlord and Tenant. The Lease
shall be conclusively presumed to have Lender's written approval unless Landlord
gives Tenant written notice within 30 days after mutual execution of this Lease
of Lender's disapproval. Tenant agrees to make such changes herein as may be
requested by Lender so long as such do not increase amounts due from Tenant
hereunder or otherwise materially alter its rights hereunder.

                 SECTION XX - ENTIRE AGREEMENT - APPLICABLE LAW

        20.1 Entire Agreement - Applicable Law. This Lease and the Exhibits
attached hereto, and by this reference incorporated herein, set forth the entire
agreement of Landlord and Tenant concerning the Premises, and there are no other
agreements or understanding, oral or written, between Landlord and Tenant
concerning the Premises. Any subsequent modification or amendment of this Lease
shall be binding upon Landlord and Tenant only if reduced to writing and signed
by them. This Lease shall be governed by, and construed in accordance with the
laws of the State of Washington.

        DATED as of the day and year first written above.

                                            LANDLORD:

                                            THE PLAZA AT YARROW BAY, LLC,
                                            a Washington limited liability
                                            company

                                            By: HAL Realty III, Inc.,
                                                its manager

                                                By:
                                                   -----------------------------
                                                Its:
                                                     ---------------------------



                                      -33-
<PAGE>   34

                                            TENANT:

                                            ImageX.Com, Inc., a Washington
                                            corporation

                                            By: /s/ Richard P. Begert
                                               ---------------------------------
                                            Its: President and CEO
                                               ---------------------------------

STATE OF WASHINGTON   )
                      ) ss.
COUNTY OF KING        )

On this 9th day of November, 1999, before me, a Notary Public in and for the
State of Washington, duly commissioned and sworn, personally appeared
[Illegible], to me known to be the Vice President of HAL Realty III, Inc., the
manager of THE PLAZA AT YARROW BAY, LLC, the limited liability company named in
and which executed the foregoing instrument; and he acknowledged to me that he
signed the same as the free and voluntary act and deed of said partnership for
the uses and purposes therein mentioned.

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

WITNESS my hand and official seal the day and year in this certificate above
written.


                             /s/ Deidre Africa
                             ---------------------------------
                             Signature
                             /s/ Deidre Africa
                             ---------------------------------
                             Print Name

                             NOTARY PUBLIC in and for the State of
                             Washington, residing at Seattle.

                             My commission expires 1-19-2000.



                                      -34-
<PAGE>   35

STATE OF WASHINGTON   )
                      ) ss.
COUNTY OF KING        )

        On this 5th day of November, 1999, before me, a Notary Public in and for
the State of Washington, duly commissioned and sworn, personally appeared
Richard Begert, to me known to be the President & CEO of ImageX.Com, Inc., a
Washington corporation, the corporation named in and which executed the
foregoing instrument; and he/she acknowledged to me that he/she signed the same
as the free and voluntary act and deed of said partnership for the uses and
purposes therein mentioned.

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

WITNESS my hand and official seal the day and year in this certificate above
written.
                             /s/ G. Faye Moniz
                             ---------------------------------
                             Signature
                             /s/ G. Faye Moniz
                             ---------------------------------
                             Print Name

                             NOTARY PUBLIC in and for the State of
                             Washington, residing at Bothell, WA.

                             My commission expires 2-9-02.




                                      -35-
<PAGE>   36

                                      INDEX

<TABLE>
<S>                                                                                         <C>
SECTION I - PREMISES.........................................................................3
   1.1 Premises..............................................................................3
   1.2 Reserved to Landlord..................................................................3
   1.3 Changes to Park.......................................................................3

SECTION II - TERM............................................................................3
   2.1 Lease Term............................................................................3
   2.2 Early Entry...........................................................................4
   2.3 Acceptance of Premises................................................................4
   2.4 Term..................................................................................5
   2.5 Option to Extend......................................................................5
   2.6 Right of First Offer..................................................................7

SECTION III - RENT...........................................................................7
   3.1 Minimum Rent..........................................................................7
   3.2 Additional Rent.......................................................................8
   3.3 Tenant's Contributions................................................................8
   3.4 Late Charge; Interest................................................................11

SECTION IV - CONDUCT OF BUSINESS............................................................11
   4.1 Use of Premises......................................................................11
   4.2 Appearance of Premises...............................................................12
   4.3 Unlawful Use.........................................................................12
   4.4 Liens and Encumbrances...............................................................12
   4.5 Hazardous Substances.................................................................12
   4.6 Signs................................................................................14

SECTION V - UTILITIES AND OTHER CHARGES.....................................................14
   5.1 Utilities and Services...............................................................14
   5.2 Licenses and Taxes...................................................................15

SECTION VI - LETTER OF CREDIT...............................................................15
   6.1 [Intentionally omitted.].............................................................16
   6.2 Letter of Credit.....................................................................16

SECTION VII - COMPLETION AND ALTERATIONS....................................................16
   7.1 Delivery of Premises.................................................................16
   7.2 Alterations by Tenant................................................................16

SECTION VIII - MAINTENANCE OF PREMISES......................................................17
   8.1 Care of Premises.....................................................................17
   8.2 Repairs by Landlord; Maintenance and Repair Charges..................................17
   8.3 Surrender of Premises................................................................18

SECTION IX - COMMON AREAS...................................................................18
   9.1 Control of Common Areas by Landlord..................................................18
   9.2 Parking..............................................................................18

SECTION X - INSURANCE AND INDEMNITY.........................................................19
   10.1 Indemnification.....................................................................19
   10.2 Insurance...........................................................................19
   10.3 Increase in Insurance Premiums......................................................20
</TABLE>



                                      -36-
<PAGE>   37


<TABLE>
<S>                                                                                         <C>
   10.4 Waiver of Subrogation...............................................................20
SECTION XI - ASSIGNMENT AND SUBLETTING......................................................21

   11.1 Assignment or Sublease..............................................................21
   11.2 Entity Ownership....................................................................22
   11.3 Recapture by Landlord...............................................................22
   11.4 Assignee Obligation.................................................................23
   11.5 Additional Consideration............................................................23
   11.6 Assignment by Landlord..............................................................23
   11.7 Permitted Transfers.................................................................24

SECTION XII - DESTRUCTION OF PREMISES.......................................................24
   12.1 Partial Destruction.................................................................24
   12.2 Total Destruction...................................................................24
   12.3 Limitation..........................................................................25

SECTION XIII - EMINENT DOMAIN...............................................................26
   13.1 Total Taking........................................................................26
   13.2 Partial Taking......................................................................26
   13.3 Damages.............................................................................26

SECTION XIV - DEFAULT OF TENANT.............................................................26
   14.1 Defaults............................................................................26
   14.2 Legal Expenses......................................................................28
   14.3 Remedies Cumulative; Waiver.........................................................28

SECTION XV - ACCESS BY LANDLORD; DEFAULT OF LANDLORD........................................29
   15.1 Right of Entry......................................................................29
   15.2 Excavation..........................................................................29

15.3 Default of Landlord....................................................................29
SECTION XVI - SURRENDER OF PREMISES.........................................................29

   16.1 Surrender of Possession.............................................................30
   16.2 Holding Over........................................................................30

SECTION XVII - QUIET ENJOYMENT..............................................................30
   17.1 Landlord's Covenant.................................................................30

SECTION XVIII - MISCELLANEOUS...............................................................30
   18.1 Notices.............................................................................30
   18.2 Successors or Assigns...............................................................31
   18.3 [Intentionally omitted.]............................................................31
   18.4 Tenant Defined......................................................................31
   18.5 Brokers' Commissions................................................................31
   18.6 Partial Invalidity..................................................................31
   18.7 Recording...........................................................................31
   18.8 Subordination; Notice to Lender; Attornment.........................................31
   18.9 Financial Statements................................................................33
   18.10 [Intentionally omitted.]...........................................................33
   18.11 Liability of Landlord..............................................................33
   18.12 Force Majeure......................................................................33
   18.13 Transportation Management Program; Recycling.......................................33
   18.14 Cure Right of Landlord.............................................................33
</TABLE>



                                      -37-
<PAGE>   38


<TABLE>
<S>                                                                                         <C>
   18.15 Name of Building...................................................................34
   18.16 Tax on Rent........................................................................34
   18.17 Light, Air and View................................................................34

SECTION XIX - EXECUTION OF LEASE............................................................34
   19.1 Execution by Landlord and Tenant; Approval of Lender................................34

SECTION XX - ENTIRE AGREEMENT - APPLICABLE LAW..............................................34
   20.1 Entire Agreement - Applicable Law...................................................34
</TABLE>



                                      -38-