Lease Agreement (TRIDENT INVESTMENTS, INC.)

EXHIBIT 10.28









LEASE AGREEMENT



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



JULY 1, 1996



Lessor: Trident Investments, Inc.



Tenant: Amazon.com, Inc.



Property: Fourth Floor

Columbia Building

1516 Second Avenue

Seattle, WA 98101



------------------------------ TABLE OF CONTENTS SECTION 1 - LEASED PREMISES..........................................1



SECTION 2 - TERM.....................................................1



SECTION 3 - RENT.....................................................1



SECTION 4 - DEPOSITS.................................................2



SECTION 5 - USE......................................................2



SECTION 6 - COMMON AREAS.............................................3



SECTION 7 - INITIAL LEASEHOLD IMPROVEMENTS...........................3



SECTION 8 - IMPROVEMENTS BY TENANT...................................3



SECTION 9 - LIENS....................................................4



SECTION 10 - HOLD HARMLESS...........................................4



SECTION 11 - INSURANCE...............................................5



SECTION 12 - CASUALTY DAMAGE OR DESTRUCTION..........................5



SECTION 13 - CONDEMNATION............................................6



SECTION 14 - DAMAGE FROM OTHER.......................................6



SECTION 15 - ASSIGNMENT AND SUBLETTING...............................7



SECTION 16 - DEFAULT.................................................7



SECTION 17 - LESSOR'S REMEDIES.......................................7



SECTION 18 - ACCESS..................................................8



SECTION 19 - SURRENDER OF PREMISES AND HOLDING OVER..................8



SECTION 20 - COMPLIANCE WITH LAW.....................................9



SECTION 21 - RULES AND REGULATIONS...................................9



SECTION 22 - ESTOPPEL CERTIFICATES...................................9



SECTION 23 - SUBORDINATION...........................................10



SECTION 24 - TENANT'S PROPERTY.......................................10



SECTION 25 - REMOVAL OF PROPERTY.....................................10



SECTION 26 - NOTICES.................................................10



SECTION 27 - LESSOR MAINTENANCE......................................11



SECTION 28 - TENANT MAINTENANCE......................................11



SECTION 29 - OPERATING COSTS.........................................11



SECTION 30 - WAIVER OF SUBROGATION RIGHTS............................14



SECTION 31 - ATTORNEYS' FEES.........................................14



SECTION 32 - WAIVER..................................................15

SECTION 33 - OPTION TO EXPAND.........................................15



SECTION 34 - RIGHT OF FIRST REFUSAL...................................15



SECTION 35 - OPTION TO EXTEND.........................................15



SECTION 36 - PARKING..................................................16



SECTION 37 - OPTION TO TERMINATE......................................17



SECTION 38 - AMERICANS WITH DISABILITIES ACT..........................17



SECTION 39 - ENVIRONMENTAL PROVISIONS.................................17



SECTION 40 - LESSOR REPRESENTATION AND WARRANTIES.....................18



SECTION 41 - LESSOR DEFAULT...........................................18



SECTION 42 - MISCELLANEOUS PROVISIONS.................................18







-ii-





LEASE AGREEMENT





THIS LEASE AGREEMENT is made and executed as of this 1st day of July, 1996, between Trident Investments, Inc., a Washington corporation, ("Lessor") and Amazon.com, Inc., a Delaware corporation, ("Tenant").



SECTION 1 -- LEASED PREMISES



1.1 On and subject to the terms, and conditions set forth in this Lease, Lessor hereby leases to Tenant and Tenant hereby leases from Lessor those certain premises (the "Premises") in the building currently known as the Columbia Building (the "Building"), which Building is located at 1516 Second Avenue, Seattle, Washington, on the land, described in Exhibit 1 (the "Land"). The Premises are known as Suite 400 and consist of the entire fourth floor of the Building.



1.2 Lessor and Tenant tentatively agree that the rentable area of the Premises is 12,686 square feet. If during the first three (3) months of the Term Tenant gives notice to Lessor, Lessor and Tenant shall agree on a licensed architect to remeasure the Premises at Tenant's expense. If the architect determines that the rentable square footage of the Premises is other than 12,686 square feet, Base Rent shall be adjusted proportionately and Lessor shall refund, or Tenant shall pay, the difference as the case may be.



1.3 The term "Project" means all parts of the Building and the supporting facilities of the Building, including Common Areas, the Land and all equipment and other property of Lessor used in connection with the Building, the Common Areas and the Land.



SECTION 2 -- TERM



2.1 On and subject to the terms and conditions set forth herein or in any exhibit or addendum hereto, the term of this Lease ("Term") shall be for a period of three (3) years and shall begin on the 1st day of August, 1996, ("Commencement Date"), and shall and on the 31st day of July, 1999. ("Expiration Date").



2.2 If the Premises are not ready for occupancy by Tenant at the Commencement Date stated in Section 2.1, this Lease shall not be void or voidable nor shall Lessor be liable or responsible to Tenant or third parties for any claims, liabilities, loss or damage therefrom or by any reason thereof, except that rent shall abate as to that portion of the Premises which are not ready for occupancy by





September 15, 1996, until such time as the Premises are delivered to Tenant in the condition required by this Lease. Tenant shall be entitled to enter the Premises prior to the Commencement Date for the purpose of installing phone wire, computer cable and furniture provided Tenant shall not interfere with any existing tenancy at the Premises during such period.



2.3 If for any reason Lessor is unable to provide to Tenant possession of the Premises in the condition required by this Lease by September 15, 1996, then Tenant shall have the right to terminate this Lease upon notice to Lessor. Lessor shall return all sums previously paid by Tenant to Lessor within ten (10) days of such notice of termination.



SECTION 3 -- RENT



3.1 Base Rent. Tenant agrees to pay to Lessor as rent the following sums ("Base Rent"):



3.1.1 The sum of THIRTEEN THOUSAND SEVEN HUNDRED FORTY-THREE and 17/100 DOLLARS ($13,743.17) per month for the period of August 1, 1996, through July 31, 1997; and



3.1.2 The sum of FOURTEEN THOUSAND FIVE HUNDRED THIRTY-SIX and 04/100 DOLLARS ($14,536.04) per month for the period of August 1, 1997, through July 31, 1999.



3.2 Payment of Rent.



3.2.1 The rent described in paragraph 3.1 above shall be due and payable in advance on the first day of each calendar month during the Term of this Lease and any extension or renewals thereof commencing on the 1st day of August, 1996.



3.2.2 All other Rent will be payable when due pursuant to this Lease.



3.2.3 Tenant hereby agrees to so pay all Rent to Lessor without demand and without reduction, abatement, counterclaim or offset at such address as may be designated by Lessor from time to time.



3.3 Interest on Past Due Rent. Tenant hereby acknowledges that late payment by Tenant to Lessor of rent or other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, and the exact amount of such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by the terms of any mortgage or deed of trust









covering the Premises. Therefore, in the event Tenant shall fail to pay any installment of rent or other sum due hereunder within five (5) days after such amount is due Tenant shall pay to Lessor as additional rent a late charge equal to interest upon said sum at the rate of twelve percent (12%) per annum from the data such sum was due until paid. A $20.00 charge will be paid by the Tenant to the Lessor for each returned check. In the event Lessor pays any sum or expense on behalf of Tenant which Tenant is obligated to pay hereunder, or in the event Lessor expends any other sum or incurs any expense or Tenant fails to pay any sum due hereunder which is not rent or additional rent, Lessor shall be entitled to receive interest upon said sum at the rate of twelve percent (12%) per annum from the date such sum was due until paid. Tenant further agrees to pay any and all interest and/or penalties due by reason of Tenant's failure to make any payments to any entities other than Lessor which are required to be made by Tenant hereunder.



SECTION 4 -- DEPOSITS



Upon execution of this Lease, Tenant shall deposit with Lessor the sum of TWENTY-EIGHT THOUSAND TWO HUNDRED SEVENTY-NINE and 21/100 DOLLARS ($28,279.21) (the "Deposit") as prepaid Rent and a security deposit. The Deposit shall be allocated as follows:



4.1 Rent. THIRTEEN THOUSAND SEVEN HUNDRED FORTY-THREE and 17/100 DOLLARS ($13,743.17) of the Deposit shall be applied to the monthly installment of Base Rent due on August 1, 1996.



4.2 Security Deposit. FOURTEEN THOUSAND FIVE HUNDRED THIRTY-SIX and 04/100 DOLLARS ($14,536.04) of the Deposit shall constitute a security deposit for the performance by Tenant of the provisions of this Lease. If Tenant is in default, Lessor may, but shall not be obligated to, use the security deposit, or any portion of it, to cure Tenant's default; and Tenant shall, on demand, immediately pay to Lessor the sum necessary to replenish the security deposit to that initially deposited with Lessor. If Tenant is not in default of any material obligations, terms, covenants, conditions and agreements to be performed or observed by Tenant under this Lease, or if any default is curable by application of all or a portion of the Deposit, then Lessor shall return the security deposit, or balance thereof, to Tenant within sixty (60) days after the end of the Lease Term. Lessor's obligations with respect to the security deposit are those of a debtor and not a trustee. Lessor may maintain the security deposit or may commingle the security deposit with Lessor's general or other funds. Lessor shall not be required to pay Tenant interest on security deposit.







SECTION 5 -- USE



5.1 The Premises are to be used and occupied by Tenant solely for the purpose of operating thereon an office facility for its business. Tenant agrees that it has determined to its satisfaction that the Premises can be used for these purposes, and waives any right to terminate this Lease solely on the basis that the Premises cannot be used for such purposes during the Lease Term.



5.2 Tenant shall not do, bring, or keep anything in or about the Premises or the Project that will increase the existing rate of insurance on the Project or any part thereof, or any of its contents, or that will cause the cancellation of any insurance covering the Project, or any part thereof, or any of its contents. If the rate of any insurance carried by Lessor is increased as a result of Tenant's use, Tenant shall pay to Lessor within ten (10) days before the date Lessor is obligated to pay a premium on the insurance, or within ten (10) days after Lessor delivers to Tenant a statement from Lessor's insurance carrier stating that the rate increase was caused solely by an activity of Tenant on the Premises as permitted in this Lease, whichever date is later, a sum equal to the difference between the original premium and the increased premium.



5.3 Tenant shall not do or permit any of its agents, employees, invitees or visitors to do anything in or about the Premises or the Project which will in any way obstruct or interfere with the rights of other tenants or occupants of the Project or injure or annoy or disturb them; or use or allow the Premises or the Project to be used for any unlawful purpose.



5.4 Tenant shall not commit or suffer to be committed any waste in or upon the Premises or the Project.



5.5 Tenant shall not place upon or install in the windows or other openings or exterior sides of doors or walls of the Premises or any part of the Premises visible from the exterior of the Premises, or anywhere also on the Project, any signs, symbols, drapes or other materials without the prior written consent of Lessor, which consent will not be unreasonably withheld, provided in the event that Tenant leases two or more floors of the Building, and for so long as Tenant continues to lease two or more floors of the Building, Tenant shall be entitled to install and maintain, at Tenant's cost, reasonable signage on the exterior of the Building provided such signage does not damage the Building and does not interfere with other signage on the Building. Lessor shall place Tenant's name on the building standard signs in the ground floor lobby at the expense of Tenant and Tenant may install its own sign(s) in the elevator lobby(ies) of the floors that Tenant occupies.







SECTION 6 -- COMMON AREAS



6.1 The term "Common Areas" means areas and facilities outside the Premises that are provided and designated by Lessor from time to time for the general use and convenience of tenant and of other tenants of the Building and their respective authorized representatives, guests, and invitees. Common areas may include, without limitation, designated pedestrian walkways and patios, landscaped areas, public lobbies, elevators, sidewalks, loading areas, parking areas, service corridors, restrooms, stairways, arcades, and roads.



6.2 Lessor gives to Tenant and its authorized representatives the nonexclusive right to use the Common Areas, with others who are entitled to use the Common Areas, subject to Lessor's rights set forth in Section 6.3. Customers of Tenant may not use such common areas except to the extent necessary to enter the Premises from the street entrance.



6.3 Lessor shall have the right to:



6.3.1 Establish and enforce reasonable rules and regulations applicable to all tenants concerning the maintenance, management, use and operation of the Common Areas, so long as such rules and regulations do not create a monetary cost to Tenant. Any existing rules and regulations are attached to this Lease as Exhibit 3.



6.3.2 Close any of the Common Areas to the extent required in the opinion of Lessor's counsel to prevent a dedication of any of the Common Areas or the accrual of any rights of any person or of the public to the Common Areas.



6.3.3 Close temporarily any of the Common Areas for purposes of cleaning, maintenance, alterations, improvements or additions.



6.3.4 Designate other property to become part of the Common Areas.



6.3.5 Make changes to the Common Areas including, without limitation, changes in the location of driveways, entrances, exits, vehicular parking spaces and parking areas.



SECTION 7 -- INITIAL LEASEHOLD IMPROVEMENTS



7.1 Lessor shall make those improvements to the Premises which are shown on the attached Exhibit 2 and shall steam clean the carpets and touch up existing paint. Lessor shall under no condition be required to install or pay for any other





tenant improvements of any kind. Tenant shall not remove any tenant improvements installed by Lessor without Lessor's prior written approval.



SECTION 8 -- IMPROVEMENTS BY TENANT



8.1 On and subject to the terms and condition set forth in this Section and in Section 9, Tenant may make, at its expense, such alterations, additions improvements (collectively called "Tenant Improvements") to the interior of the Premises during the term of this Lease that Tenant requires in order to use the Premises for the uses permitted in Section 5.1, provided that the following requirements have first been satisfied;



8.1.1 Tenant shall submit to Lessor reasonably detailed final plans and specifications and working drawings of the proposed Tenant Improvements, the name of Tenant's proposed contractor who must provide Lessor with a Certificate of Insurance covering Contractor's Liability and Property Damage in an amount not less than Two Hundred Fifty Thousand and no/100 Dollars ($250.000.00), and naming Lessor as an additional insured. Said Certificate to be issued prior to commencement of the Tenant Improvement work.



8.1.2 Lessor shall have given Tenant written notice of Lessor's approval of said final plans, specifications, working drawings, the proposed contractor, and insurance carried by the proposed contractors, Lessor shall be deemed to have approved said plans, specifications, drawings, contractor and insurance if Lessor has not disapproved the same within ten (10) Business Days after Lessor received them. Lessor shall not unreasonably withhold or delay its approval; Lessor shall give Tenant written notice of the reasons for Lessor's disapproval.



8.1.3 The Tenant Improvements shall be approved by all appropriate government agencies, and all applicable permits and authorizations shall be obtained before commencement of any Tenant Improvements.



8.1.4 Prior to the commencement of construction of such improvements Tenant at its sole cost shall cause its selected contractor to furnish to Lessor a performance and completion bond issued by an insurance company qualified to do business in the State of Washington and approved by Lessor in a sum equal to the cost of such Improvements (as determined by the construction contract between Tenant and its contractor) guaranteeing the completion of such Improvements, free and clear of all liens and other charges, in accordance with the plans and specification approved by Lessor.









8.2 All Tenant Improvement shall be completed with due diligence in compliance with all applicable laws, with the plans and specifications and working drawings approved by Lessor, and by the contractor approved by Lessor.



8.3 All debris, trash, refuse and waste materials shall be stored only within the Premises and shall be regularly removed therefrom by Tenant at its cost.



8.4 Tenant Improvements shall be made in a manner that will not unreasonably disturb or interfere with other tenants in the Building.



8.5 All Tenant Improvements, other than trade fixtures and computer cabling, shall become the property of Lessor and shall remain on and be surrendered with the Premises on the expiration or earlier termination of the Lease, except that Lessor may elect, in writing at the time of approving Tenant Improvements, to require Tenant to remove any Tenant Improvements so approved. If Lessor so elects, Tenant at its cost shall remove the Tenant Improvements and repair any damage caused by such removal before the last day of the term or expiration of the Lease.



8.6 Tenant shall not make changes to locks on doors or add to, disturb or in any way change any plumbing or electrical wiring without the prior written consent of Lessor and in accordance with the requirements of this section. Tenant may install phone and computer cabling in the Premises and Lessor agrees to continually grant to Tenant access through the Building as shall be reasonably designated by Lessor for such cabling.



SECTION 9 -- LIENS



Tenant shall pay all costs for construction done by it or caused to be done by it on the Premises as permitted by this lease. Tenant shall keep the Premises and Project free and clear from any liens or lien claims arising out of work performed, material furnished or obligations incurred by or on behalf of Tenant, and Tenant shall indemnify and hold Lessor harmless from any liability for losses or damages resulting directly or indirectly from any such liens or lien claims. If Tenant shall desire to contest the correctness or the validity of any such lien, it shall furnish Lessor adequate security of the value or in the amount of the claim, plus estimated costs and interest, or a bond of a responsible corporate surety authorized to do business in the State of Washington and approved by Lessor, in such amount, conditioned on the discharge of the lien. If a final judgment establishing the validity or existence of a lien for any amount is entered, Tenant shall pay and satisfy the same immediately.











SECTION 10 -- HOLD HARMLESS



Lessor, its agents and employees shall not be liable to Tenant or its officers, contractors, licensees, agents, servants, employees, customers, guests, invitees or visitors, or to any third party for any damage to person or property caused or arising from or in connection with any act, omission or neglect of Tenant. Tenant agrees to indemnify Lessor and hold it harmless from and against any and all liability, claims, causes of action, damages, costs and expenses (including without limitation, attorneys' fees), arising from or in connection with any act, omission, or neglect of Tenant or its officers, contractors, licensees, agents, servants, employees, guests, invitees, customers, or visitors; any breach or default under this Lease by Tenant; or any accident, injury or damage, howsoever and by whomsoever caused, to any person or property, occurring in or about the Premises, which are caused by the act or negligence of Tenant, or its officers, agents, or employees. Tenant's obligations under this Section 10 arising by reason of any events occurring during the term of this Lease or any extension or renewals thereof shall survive the expiration or termination of this Lease. The foregoing provisions shall not be construed to make Tenant responsible for loss, damage, liability, claims, causes of action or expense resulting from injuries to third parties caused by the negligence of Lessor, or its officers, contractors, licensees, agents employees, or invitees.



SECTION 11 -- INSURANCE



11.1 Tenant at its cost shall obtain and maintain in full force and effect during the Term of this Lease and any extensions or renewals thereof policies of comprehensive public liability insurance with minimum limits of:



$50,000 per occurrence and

$1,000,000 appropriate bodily injury and

$250,000 property damages

$1,000,000 combined single limits



Such policies shall insure performance by Tenant of Tenant's obligations set forth in Section 11. Lessor shall be named as an additional insured and the policies shall contain cross liability endorsements.



11.2 Tenant at its cost shall maintain on all of Tenant's personal Property, and Tenant's Improvements a policy or policies of standard fire and extended coverage insurance with vandalism and malicious mischief endorsement to the extent of replacement value; however, at no time less than an amount as shall be equal to the value of Tenant's improvements and personal property. In addition, said policy shall









also provide for business interruption and loss of income at an amount necessary to ensure meeting all continuing financial obligations of Tenant, for a period of not less than four (4) months. The proceeds from any such policy shall be used by Tenant for the repair and replacement of Tenant's Personal Property and/or the restoration of Leasehold Improvements. "Tenant's Personal Property" includes Tenant's movable equipment, furniture, furnishings, merchandise, and other movable personal property including trade fixtures.



11.3 Each policy of insurance required under this Lease shall:



11.3.1 Be issued by an insurance company authorized to do business in the State of Washington and rated Bests "A" or better.



11.3.2 Contain an endorsement requiring thirty (30) days written notice from the insurance company to both parties and Lessor's lender (if any) before cancellation or change in the coverage, scope or amount of any such policy.



11.4 Each policy of insurance required under this Lease, or a certificate of such policy, together with evidence of payment of premiums, shall be deposited with the Lessor at the commencement of the Term; and on renewal of the policy, not less than five (5) days before expiration of the term of the policy.



SECTION 12 -- CASUALTY DAMAGE OR DESTRUCTION



12.1 In the event that fire or other casualty renders the Premises totally or partially untenantable, Tenant shall immediately give Lessor written notice thereof ("Tenant's First Notice"). If the casualty occurs during the last six (6) months of the Term (or the Extended Term) and such casualty was not caused by Tenant, Tenant may terminate this Lease on thirty (30) days written notice.



12.2 If the Premises or the Building are totally or partially damaged or destroyed by fire or other casualty so as to render the Premises totally or partially untenantable, Lessor may at its option, restore the Premises to the same condition as the Commencement Date. Within thirty (30) days from the date Lessor received Tenant's First Notice, Lessor shall give Tenant written notice (the "Lessor's Notice") stating:



12.2.1 Lessor elects to restore the Premises; or



12.2.2 Lessor elects not to restore the Premises and Lessor elects to terminate this Lease











12.3 If Lessor elects to restore the Premises, then Lessor shall restore the Premises within ninety (90) days from the date of the casualty and this Lease shall remain in full force and effect except that, during the period from damage or destruction until restoration, the Base Rent shall be abated in the same ratio as that portion of the Premises which Lessor determines is unfit for occupancy bears to the whole of the Premises, provided that there shall be no such abatement if the damage or destruction is due in whole or in part to the act, omission or neglect of Tenant, its agents, employees, contractors, invitees or visitors. If Lessor's Notice states that Lessor elects not to restore the Premises, then Tenant shall have the option to terminate this Lease by delivering written notice thereof ("Tenant's Second Notice") to Lessor within thirty (30) days from the date Tenant receives Lessor's Notice. If Tenant so ...