Exhibit 10.1

 

 

 

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Lease

 

REDMOND HILLTOP

 

 

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Between

 

MICROVISION, INC.,

(Tenant)

and

 

 

CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P.

(Landlord)

 

July 15, 2005

 

LEASE

 

THIS LEASE (the "Lease") is made as of June ____, 2005 between CarrAmerica
Realty Operating Partnership, L.P., a Delaware limited partnership (the
"Landlord") and the Tenant as named in the Schedule below. The term "Project"
means the buildings (the "Buildings") known as "Building B" located at 6222 -
185th Avenue NE, Redmond, WA 98052, and "Building C" located at 6244 - 185th
Avenue NE, Redmond, WA 98052, and the land (the "Land") located within the
Project known as Redmond Hilltop Corporate Center, Redmond, Washington.
"Premises" means that part of the Project leased to Tenant described in the
Schedule and outlined on Appendix A. The Land is legally described on Appendix F
hereto.

The following schedule (the "Schedule") is an integral part of this Lease. Terms
defined in this Schedule shall have the same meaning throughout the Lease.

SCHEDULE

1. Tenant: Microvision, Inc., a Delaware corporation

2. Premises: 43,046 rentable square feet in Building B, and 23,917 rentable
square feet located in Building C

3. Total Rentable Square Feet of the Premises: 66,963 (as measured by 1996 BOMA
Standard Units of Measurement).

4. Tenant's Proportionate Share: (a) 100%, based upon a total of 43,046 rentable
square feet in Building B, and 50%, based on a total of 47,834 rentable square
feet in Building C, as to all Operating Costs relating solely to the respective
Buildings, including, without limitation, HVAC maintenance and repairs, elevator
maintenance and repairs, building management fee, janitorial services and
supplies, window cleaning and property insurance; (b) 73.7% (based upon a total
of 90,880 rentable square feet in the Buildings) of all Operating Costs of the
Project, excluding all Operating Costs attributable to all or any part of any
Building in the Project, but including without limitation, landscape costs,
parking lot repair and maintenance, and Landlord's liability insurance costs;
(c) 100% of all Taxes applicable to Building B and the separately assessed tax
parcel on which it is located, and 50% of all Taxes applicable to Building C and
the separately assessed tax parcel upon which it is located; and (d) an amount
fairly and equitably apportioned by Landlord, based on the total rentable square
feet in the Premises and the total rentable square feet in the buildings in
Landlord's Pacific Northwest portfolio, of Landlord's administration and
overhead costs ("Landlord's Overhead"). Tenant's obligation for Landlord's
Overhead shall not increase by more than four percent (4%) per Fiscal Year on a
compounding and cumulative basis over the course of the Term.

5. Security Deposit: Letter of Credit, as set forth in Section 20, below

6. Tenant's Real Estate Broker for this Lease: Washington Partners, Inc.

7. Landlord's Real Estate Broker for this Lease: Broderick Group, Inc.

8. Tenant Improvements, if any: See the Tenant Improvement Agreement attached
hereto as Appendix C

9. Commencement Date: The later of (a) the date which is eight (8) months
following the date that Landlord shall have delivered exclusive possession of
the Premises to Tenant for purposes of construction of its Initial Improvements
(as defined in and pursuant to Appendix C hereto, Tenant Improvement Agreement)
or (b) February 1, 2006 (subject to Section 3B, below, and subject to any
Landlord Delay, as set forth in Appendix C hereto). Landlord and Tenant shall
execute a Commencement Date Confirmation substantially in the form of Appendix E
promptly following the Commencement Date.

10. Termination Date/Term: Ninety (90) months (7.5 years) after the Commencement
Date, or if the Commencement Date is not the first day of a month, then 90
months after the first day of the following month.

11. Guarantor: N/A

12. Base Rent:

Period

Months 1 - 7*

Months 8 - 24

Months 25 - 48

Months 49 - 60

Months 61 - 72

Months 73 - 84

Months 85 - 90

Annual Base
Rent per RSF

$12.00

$12.00

$12.50

$13.00

$13.50

$14.00

$14.50

Annual
Base Rent

$803,556.00

$803,556.00

$837,037.50

$870,519.00

$904,000.50

$937,482.00

$970,963.50

Monthly
Base Rent

$66,963.00

$66,963.00

$69,753.13

$72,543.25

$75,333.38

$78,123.50

$80,913.63

*

Base Rent for months 1 - 7 of the Lease term shall be abated.

1. LEASE AGREEMENT. On the terms stated in this Lease, Landlord leases the
Premises to Tenant, and Tenant leases the Premises from Landlord, for the Term
beginning on the Commencement Date and ending on the Termination Date unless
extended or sooner terminated pursuant to this Lease. Landlord also grants to
Tenant nonexclusive rights to the use of all common areas located from time to
time in the Building and areas adjacent thereto and the benefit of all other
easements, rights, and provisions of any covenants and restrictions pertaining
to the Building and the Project which are intended for the common use and
enjoyment of other occupants and tenants thereof.

2. RENT.

A. Types of Rent. Tenant shall pay the following Rent in the form of a check to
Landlord at the following address:

CarrAmerica Realty O.P, L.P.

t/a Redmond Hilltop

P.O. Box 642926

Pittsburgh, PA 15264-2926

or by wire transfer as follows:

PNC Bank

PNC Transit Number: 043000096

PNC Account Number: 1004339188

Reference: Customer t/a Redmond Hilltop

or in such other manner as Landlord may notify Tenant:

(1) Base Rent in monthly installments in advance, the first monthly installment
payable on the Commencement Date and thereafter on or before the first day of
each month of the Term in the amount set forth on the Schedule.

(2) Operating Cost Share Rent in an amount equal to the Tenant's Proportionate
Share of the Operating Costs for the applicable fiscal year of the Lease, paid
monthly in advance, the first monthly installment payable on the Commencement
Date and thereafter on or before the first day of each month of the Term, in an
estimated amount. Definitions of Operating Costs and Tenant's Proportionate
Share, and the method for billing and payment of Operating Cost Share Rent are
set forth in Sections 2B, 2C and 2D.

(3) Tax Share Rent in an amount equal to the Tenant's Proportionate Share of the
Taxes for the applicable fiscal year of this Lease, paid monthly in advance, the
first monthly installment payable on the Commencement Date and thereafter on or
before the first day of each month of the Term, in an estimated amount. A
definition of Taxes and the method for billing and payment of Tax Share Rent are
set forth in Sections 2B, 2C and 2D.

(4) Additional Rent in the amount of all costs, expenses, liabilities, and
amounts which Tenant is required to pay under this Lease, excluding Base Rent,
Operating Cost Share Rent, and Tax Share Rent, but including any interest for
late payment of any item of Rent.

(5) Rent as used in this Lease means Base Rent, Operating Cost Share Rent, Tax
Share Rent and Additional Rent. Tenant's agreement to pay Rent is an independent
covenant, with no right of setoff, deduction or counterclaim of any kind.

B. Payment of Operating Cost Share Rent and Tax Share Rent.

(1) Payment of Estimated Operating Cost Share Rent and Tax Share Rent. Landlord
shall estimate the Operating Costs and Taxes of the Project by April 1 of each
year, or as soon as reasonably possible thereafter. If Landlord receives more
accurate information with respect to the actual Operating Costs and Taxes (such
as the final real estate tax assessment or tax rate for the Project) Landlord
may revise these estimates to more accurately reflect the actual costs. Landlord
agrees that during the first year of the Lease, the aggregate of Tenant's
obligation for Operating Cost Share Rent (exclusive of charges for water,
electricity, trash hauling, gas, and janitorial services) and Tax Share Rent
shall not exceed $4.08 per rentable square foot of Premises area.

Within the later of (a) ten (10) days after receiving the original or revised
estimate from Landlord, or (b) the date that the next monthly Base Rent payment
is due, Tenant shall pay Landlord one-twelfth (1/12th) of Tenant's Proportionate
Share of this estimate, multiplied by the number of months that have elapsed in
the applicable fiscal year to the date of such payment including the current
month, minus payments previously made by Tenant for the months elapsed. On the
first day of each month thereafter, Tenant shall pay Landlord one-twelfth
(1/12th) of Tenant's Proportionate Share of this estimate, until a new estimate
becomes applicable.

(2) Correction of Operating Cost Share Rent. Landlord shall deliver to Tenant a
report for the previous Fiscal Year, as defined below (the "Operating Cost
Report") by May 15 of each year, or as soon as reasonably possible thereafter
(provided that the report will be provided no later than June 15 of each year),
setting forth (a) the actual Operating Costs incurred, (b) the amount of
Operating Cost Share Rent due from Tenant, and (c) the amount of Operating Cost
Share Rent paid by Tenant. Within the later of (i) twenty (20) days after such
delivery, or (ii) the date that the next monthly Base Rent payment is due,
Tenant shall pay to Landlord the amount due minus the amount paid. If the amount
paid exceeds the amount due, Landlord shall apply the excess to Tenant's
payments of Operating Cost Share Rent next coming due. Notwithstanding the
foregoing, Tenant's obligation for "Controllable Operating Costs," which shall
mean those costs payable pursuant to maintenance, repair or other service
contracts entered into between Landlord and third parties (as opposed to costs
incurred as a result of one-time or occasional third party services), shall not
increase by more than four percent (4%) per Fiscal Year on a compounding and
cumulative basis over the course of the Term. Attached as Appendix H is a
schedule of Operating Cost categories for the 2005 Fiscal Year, including the
Controllable Operating Cost categories.

(3) Correction of Tax Share Rent. Landlord shall deliver to Tenant a report for
the previous fiscal year (the "Tax Report") by May 15 of each year, or as soon
as reasonably possible thereafter (provided that the report will be provided no
later than June 15 of each year), setting forth (a) the actual Taxes, (b) the
amount of Tax Share Rent due from Tenant, and (c) the amount of Tax Share Rent
paid by Tenant. Within the later of (i) twenty (20) days after such delivery, or
(ii) the next monthly Base Rent payment, Tenant shall pay to Landlord the amount
due from Tenant minus the amount paid by Tenant. If the amount paid exceeds the
amount due, Landlord shall apply the excess to Tenant's payments of Tax Share
Rent next coming due.

(4) Information. In addition to any other rights Tenant has to audit the books
and records of Landlord, Tenant may request, and Landlord agrees promptly to
provide (within five (5) business days), such additional documentation and
assistance as may reasonably be required to allow Tenant to verify that the
amounts to be paid under this Section 2B are correct and appropriate as provided
under this Lease. At a minimum, such documentation will provide a statement in
substantially the form of Appendix H, showing the applicable expense item for
the applicable year and the prior year.

C. Definitions.

(1) Included Operating Costs. "Operating Costs" means any expenses, costs and
disbursements of any kind other than Taxes, paid or incurred by Landlord in
connection with the management, maintenance, operation, insurance, repair and
other related activities in connection with any part of the Project and of the
personal property, fixtures, machinery, equipment, systems and apparatus used in
connection therewith, including the cost of providing those services required to
be furnished by Landlord under this Lease. Operating Costs shall also include
the costs of any capital improvements which are intended to reduce Operating
Costs or improve safety, and those made to keep the Project in compliance with
governmental requirements applicable from time to time (collectively, "Included
Capital Items"); provided, that the costs of any Included Capital Item shall be
amortized by Landlord over the estimated useful life of such item and such
amortized costs are only included in Operating Costs for that portion of the
useful life of the Included Capital Item which falls within the Term.

If the Project is not fully occupied during any portion of any fiscal year, or
if Landlord does not furnish any particular service to a tenant (other than
Tenant), the cost of which would have constituted an Operating Cost, then
Landlord may adjust (an "Equitable Adjustment") Operating Costs to equal what
would have been incurred by Landlord had the Project been fully occupied or had
such service been furnished by Landlord to the tenant. This Equitable Adjustment
shall apply only to Operating Costs which are variable and therefore increase as
occupancy of the Project increases. Landlord may incorporate the Equitable
Adjustment in its estimates of Operating Costs.

(2) Excluded Operating Costs. Operating Costs shall not include:

(a) costs including permit, license and inspection costs, incurred with respect
to the installation of tenants' or other occupants' improvements in the
Buildings or incurred in renovating or otherwise improving, decorating, painting
or redecorating vacant space for tenants or other occupants of the Buildings;

(b) the cost of any repairs, alterations, additions, changes, tools, equipment
replacements and the like which under generally accepted accounting principles
and practices are properly classified as Capital Items other than Included
Capital Items;

(c) interest, principal, points and fee payments on mortgages or any other debt
costs, or rental payments on any ground lease of the Project;

(d) real estate brokers' leasing commissions;

(e) legal fees, space planner fees and advertising expenses incurred with regard
to leasing the Buildings or portions thereof;

(f) any cost or expenditure for which Landlord is reimbursed, by insurance
proceeds or otherwise, except by Operating Cost Share Rent;

(g) the cost of any service or other benefit furnished to any office tenant of
the Project which Landlord does not make available to Tenant;

(h) depreciation (except on any Included Capital Items);

(i) ground lease rental;

(j) costs of correcting defects in construction of the Buildings (as opposed to
the cost of normal repair, maintenance and replacement expected with the
construction materials and equipment installed in the Buildings in light of
their specifications);

(k) legal and auditing fees which are for the benefit of Landlord such as
collecting delinquent rents, preparing tax returns and other financial
statements, and audits other than those incurred in connection with the
preparation of reports required pursuant to Section 2B above;

(l) the wages of any employee for services not related directly to the
management, maintenance, operation and repair of the Buildings;

(m) fines, penalties and interest;

(n) the costs of painting, decorating or making alterations exclusively
benefiting the Premises or the premises of other tenants of the Buildings, or
the cost of any work furnished by Landlord without charge as an inducement for a
tenant to lease space (i.e., free rent, improvement allowances);

(o) the cost of constructing, installing, operating or maintaining any special
service or facility such as an observatory, broadcasting facility, luncheon
club, athletic or recreational club, cafeteria or dining facility;

(p) expenditures for repairs or maintenance which are covered by warranties,
guarantees or service contracts (but shall include the cost of any such service
contracts), to the extent that Landlord has received or will receive the benefit
of such warranties or guarantees. Landlord agrees to use commercially reasonable
efforts to enforce the terms of all such warranties and guarantees;

(q) bad debt loss, rent loss or reserves for bad debt or rent loss;

(r) Landlord's general corporate overhead and general and administrative
expenses, except as set forth in Item 4 of the Schedule;

(s) costs occasioned by the violation of law by Landlord, any other tenant, or
their respective agents, officers, employees or contractors;

(t) costs arising from Landlord's charitable or political contributions;

(u) costs of services to the extent they are materially and substantially in
excess of competitive market rates for such services;

(v) to the extent Tenant leases only the first floor in either Building, the
cost of repair and maintenance of the elevator; and

(w) costs for which Landlord has been compensated by a management fee.

(3) Taxes. "Taxes" means any and all taxes, assessments and charges of any kind,
general or special, ordinary or extraordinary, levied against the Project, which
Landlord shall pay or become obligated to pay in connection with the ownership,
leasing, renting, management, use, occupancy, control or operation of the
Project or of the personal property, fixtures, machinery, equipment, systems and
apparatus used in connection therewith. Taxes shall include real estate taxes,
personal property taxes, sewer rents, water rents, special or general
assessments, transit taxes, ad valorem taxes, and any tax levied on the rents
hereunder or the interest of Landlord under this Lease (the "Rent Tax"). Taxes
shall also include all fees and other costs and expenses paid by Landlord in
reviewing any tax and in seeking a refund or reduction of any Taxes, whether or
not the Landlord is ultimately successful.

For any year, the amount to be included in Taxes (a) from taxes or assessments
payable in installments, shall be the amount of the installments (with any
interest) due and payable during such year, and (b) from all other Taxes, shall
at Landlord's election be the amount accrued, assessed, or otherwise imposed for
such year or the amount due and payable in such year. Any refund or other
adjustment to any Taxes by the taxing authority, shall apply during the year in
which the adjustment is made. Taxes shall not include any (y) net income,
capital, stock, succession, transfer, franchise, gift, estate or inheritance
tax, excise taxes imposed upon Landlord based upon gross or net rentals (except
for Rent Tax, as defined above), or other income received by it or any Business
and Occupation Tax; (z) Taxes for any time prior to the Commencement Date hereof
of after the expiration or earlier termination hereof. If requested by Tenant,
Landlord shall take all reasonable action necessary to preserve the right to
contest any Taxes, including paying them under protest, and shall consult with
Tenant, and act in good faith in cooperation with Tenant to contest or seek
recovery of Taxes if and to the extent such action is reasonable, as determined
by Landlord in its business judgment exercised in good faith. Any payment of
Taxes by Tenant either directly or by way of reimbursement to Landlord pursuant
to any provision of this Lease shall be, whenever such Taxes have not been
directly assessed against Tenant, subject to appropriate substantiation by
Landlord upon the request of Tenant. All costs incurred by Landlord in any such
contest, including attorneys' fees and court costs, shall be considered Taxes
for purposes of this Lease. Tenant shall be entitled to its Proportionate Share
of any refund (net of Tenant's or Landlord's expenses in obtaining same)
obtained by reason of any such proceeding or otherwise whether obtained during
or after the expiration of the Term, except that if the refund shall relate to
the year in which the Term of this Lease commences or expires, the refund (after
deducting all costs of Landlord or Tenant in obtaining same) shall be
apportioned between Landlord and Tenant according to the number of days within
the Term.

(4) Lease Year. "Lease Year" means each consecutive twelve-month period
beginning with the Commencement Date, except that if the Commencement Date is
not the first day of a calendar month, then the first Lease Year shall be the
period from the Commencement Date through the final day of the twelve months
after the first day of the following month, and each subsequent Lease Year shall
be the twelve months following the prior Lease Year.

(5) Fiscal Year. "Fiscal Year" means the calendar year, except that the first
fiscal year and the last fiscal year of the Term may be a partial calendar year.

D. Computation of Base Rent and Rent Adjustments.

(1) Prorations. If this Lease begins on a day other than the first day of a
month, the Base Rent, Operating Cost Share Rent and Tax Share Rent shall be
prorated for such partial month based on the actual number of days in such
month. If this Lease begins on a day other than the first day, or ends on a day
other than the last day, of the Fiscal Year, Operating Cost Share Rent and Tax
Share Rent shall be prorated for the applicable Fiscal Year.

(2) Default Interest. Any sum due from Tenant to Landlord not paid within five
(5) days of its due date shall bear interest from the date due until paid at
twelve percent (12%) per annum.

(3) Rent Adjustments. The square footage of the Premises and the Buildings set
forth in the Schedule are conclusively deemed to be the actual square footage
thereof, without regard to any subsequent remeasurement of the Premises or the
Buildings. If any Operating Cost paid in one fiscal year relates to more than
one Fiscal Year, Landlord may proportionately allocate such Operating Cost among
the related fiscal years.

(4) Books and Records. Landlord shall maintain books and records reflecting the
Operating Costs and Taxes in accordance with generally accepted accounting
principles and management practices. Tenant and/or its selected auditor,
provided such auditor is required to be a certified public accountant
("Auditor"), shall have the right to audit Landlord's records, including
applicable backup materials, at Landlord's office upon at least seventy-two (72)
hours' prior notice during normal business hours during the three hundred
sixty-five (365) days following the respective delivery of the Operating Cost
Report or the Tax Report. The results of any such inspection shall be kept
strictly confidential by Tenant and its agents (except that such results may be
used in any proceedings to resolve disputes relating to charges that are the
subject of such audits), and Tenant and its Auditor must agree, in their
contract for such services, to such confidentiality restrictions and shall
specifically agree that the results shall not be made available to any other
tenant of the Buildings. Unless Tenant sends to Landlord any written exception
to either such report within said 365-day period, such report shall be deemed
final and accepted by Tenant. Tenant shall pay the amount shown on both reports
in the manner prescribed in this Lease, whether or not Tenant takes any such
written exception, without any prejudice to such exception. If Tenant makes a
timely exception, Landlord shall respond within thirty (30) days of receipt of
the exception notice, and if the parties are not able to resolve any dispute as
to the amounts due within forty-five (45) days thereafter, the matter will be
submitted for arbitration as provided in Section 2.E below. If it is determined
that Landlord's original determination of annual Operating Costs or Taxes
overstated the amounts thereof by more than three percent (3%), then in addition
to the reimbursement of the overpayment, together with interest at the rate of
12% per annum, Landlord will pay to Tenant the cost of the Auditor who performed
the audit.

(5) Miscellaneous. So long as Tenant is in default of any obligation under this
Lease, Tenant shall not be entitled to any refund of any amount from Landlord.
If this Lease is terminated for any reason prior to the annual determination of
Operating Cost Share Rent or Tax Share Rent, either party shall pay the full
amount due to the other within fifteen (15) days after Landlord's notice to
Tenant of the amount when it is determined. Landlord may commingle any payments
made with respect to Operating Cost Share Rent or Tax Share Rent, without
payment of interest.

E. Arbitration of Tenant Disputes re Operating Cost Share Rent or Tax Share
Rent.

In the event that the parties are unable to resolve any dispute between them
regarding Tenant's obligation for Operating Cost Share Rent or Tax Share Rent
within the last forty-five (45) day period set forth in Section 2D(4) above,
either party may, within an additional fifteen (15) day period thereafter,
demand binding arbitration pursuant to the provisions set forth below. In the
event neither party shall provide the other with notice of demand for
arbitration within such additional fifteen (15) day period, Tenant shall be
deemed to have waived any further right to contest the amounts that were the
subject of the process described in Section 2D(4), and Landlord's statements
thereof shall be final and binding on the parties.

(1) Notice of Demand. Either party may demand arbitration by notifying the other
party in writing in accordance with the notice provisions of this Lease. The
notice shall describe the reasons for such demand, the amount involved, if any,
and the particular remedy sought, and shall specifically reference the required
ten (10) day response time specified in Section 2E(2) below. The notice shall
also list the name of one arbitrator qualified in accordance with
subsection (3).

(2) Response. The party that has not demanded arbitration shall respond to the
notice of demand within ten (10) calendar days of receipt of such notice by
delivering a written response in accordance with the notice provisions of this
Lease. The response shall list the name of a second arbitrator qualified in
accordance with Section 2E(3), below. The response shall also describe the
amount involved, and the particular remedy sought. If a party fails to respond
timely to the notice of demand, the arbitrator selected by the party making such
demand under Section 2E(1), above, shall resolve the dispute, controversy or
claim within seven (7) calendar days of the deadline for response.

(3) Qualified Arbitrator. Any arbitrator selected in accordance with
Sections 2E(1) and 2E(2), above, shall be any natural person not employed by
either of the parties or any parent or affiliated partnership, corporation or
other enterprise thereof, who shall also be a property management professional,
commercial real estate broker, or real estate attorney with at least ten (10)
years' experience in the Seattle-Bellevue- Redmond area real state market.

(4) Appointment of Third Arbitrator. If a party responds timely to a notice of
demand for expedited arbitration under Section 2E(2), the two arbitrators shall
appoint a third arbitrator who shall be qualified in accordance with Section
2E(3), above. Such third arbitrator shall be appointed within seven (7) calendar
days of receipt by the party demanding arbitration of notice of response
provided for under Subsection 2E(3). If the two arbitrators fail to timely
appoint a third arbitrator, the third arbitrator shall be appointed by the
parties if they can agree within a period of five (5) calendar days. If the
parties cannot timely agree, then either party may request the appointment of
such third arbitrator by the Presiding Judge of the Superior Court of King
County, Washington, and neither party shall raise any question as to the court's
full power and jurisdiction to entertain such application and to make such
appointment.

(5) Arbitration Hearing; Discovery; Venue. The arbitration hearing shall
commence within ten (10) calendar days of appointment of the third arbitrator as
described in Section 2E(4). The hearing shall in no event last longer than two
(2) calendar days. There shall be no discovery or dispositive motion practice
(such as motions for summary judgment or to dismiss or the like) except as may
be permitted by the arbitrators; and any such discovery or dispositive motion
practice permitted by the arbitrators shall accommodate to the maximum extent
practical the time limits contained herein. The arbitrators shall not be bound
by any rules of civil procedure or evidence, but rather shall consider such
writings and oral presentations as reasonable business persons would use in the
conduct of their day to day affairs, and may require the parties to submit some
or all of their case by written declaration or such other manner of presentation
as the arbitrators may determine to be appropriate. It is the intention of the
parties to limit live testimony and cross examination to the extent absolutely
necessary to insure a fair hearing to the parties on significant and material
issues. Venue of any arbitration hearing conducted pursuant to this Section
shall be in Seattle, Washington.

(6) Decision. The arbitrators' decision shall be made in no event later than
seven (7) calendar days of the commencement of the arbitration hearing described
in Section 2E(5). If three (3) arbitrators are appointed, a majority decision
shall prevail. The award shall be final and binding upon the parties. The
arbitrators may award reasonable attorney's fees and costs to the substantially
prevailing party.

3. PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF PREMISES.

A. Condition of Premises. Except to the extent of any Initial Improvements item
on the Schedule, or any obligation with respect to Landlord's representations
and warranties expressly provided in this Lease, Landlord is leasing the
Premises to Tenant "as is", without any obligation to alter, remodel, improve,
repair or decorate any part of the Premises; provided that Tenant's acceptance
of the Premises does not relieve Landlord of any of its ongoing maintenance and
repair obligations set forth in this Lease.

B. Tenant's Possession. If Tenant takes possession of any part of the Premises
prior to the Commencement Date set forth in item 9 of the Schedule for purposes
of doing business (excluding testing of equipment and facilities), the
Commencement Date shall be deemed to have occurred on such date, and all terms
of this Lease shall apply thereafter, including commencement Base Rent in
accordance with item 12 of the Schedule, prorated for any partial month.

C. Maintenance. Throughout the Term, Tenant shall maintain the Premises in their
condition as of the date of completion of Tenant's Initial Improvements, loss or
damage caused by the elements, ordinary wear, and fire and other casualty
excepted, and at the termination of this Lease, or Tenant's right to possession,
Tenant shall return the Premises to Landlord in broom-clean condition. To the
extent Tenant fails to perform either obligation, Landlord may, but need not,
restore the Premises to such condition and Tenant shall pay the cost thereof.

D. Delay in Delivery. If Landlord fails to deliver the Premises in the condition
required under this Lease by August 1, 2005, Tenant may elect to terminate this
Lease by written notice given to Landlord at any time prior to delivery of the
Premises, in which event this Lease shall terminate on the date of Tenant's
termination notice, as if such date were originally set forth as the termination
date herein, and Landlord will immediately refund all amounts paid by Tenant to
Landlord relating to this Lease (if any), including amounts for prepayment of
rent, deposits or other expenses, as well as return and release the Letter of
Credit (defined in Section 20 of the Lease).

4. PROJECT SERVICES.

Landlord shall furnish services as follows:

A. Heating and Air Conditioning. During the normal business hours of 6:30 a.m.
to 6:30 p.m., Monday through Friday, and 7:00 a.m. to 1:00 p.m. on Saturday,
Landlord shall furnish heating and air conditioning to provide a comfortable
temperature, in Landlord's reasonable judgment, for normal business operations
in that portion of the Premises located in Building C, except to the extent
Tenant installs equipment which adversely affects the temperature maintained by
the air conditioning system. If Tenant installs such equipment, then at Tenant's
election, Tenant may install, at Tenant's sole cost, supplementary air
conditioning units in the Premises (subject to Landlord's prior approval of such
Work, pursuant to Section 5, below), or, such supplementary air conditioning
units may be installed by Landlord, and Tenant shall pay to Landlord upon demand
as Additional Rent the cost of installation, together with the cost of operation
and maintenance thereof. Tenant shall have full control over setting the
temperatures and hours of operation of the heating and air conditioning for that
portion of the Premises located in Building B. Accordingly, there shall be no
additional charge for after hours operation of heating and air conditioning for
that portion of the Premises located in Building B.

Landlord shall furnish heating and air conditioning after normal business hours
as to that portion of the Premises located in Building C if Tenant provides
Landlord reasonable prior notice, and pays Landlord all then current charges for
such additional heating or air conditioning. Landlord's current charge is $15.50
per hour of operation after normal business hours for additional heating or air
conditioning. Landlord's charges shall be based on the actual cost of providing
such additional heating or air conditioning, which will be determined primarily
by the utility charge to operate during the extended hours. Either party may
request a review, not more than two times per Lease Year, to determine whether a
change in the after-hours charge is necessary based on the after-hours cost or
usage. All changes in the after-hours charge will be made prospectively
beginning with the month following the month in which the review was completed.

B. Elevators. Except in cases of emergency, Landlord shall provide passenger
elevator service in common with Landlord and all other tenants or visitors (i)
to Building C during normal business hours of 8:00 a.m. to 6:00 p.m., Monday
through Friday, and 8:00 a.m. to 1:00 p.m. on Saturday (and limited passenger
service at other times), and (ii) to Building B during such days and hours as
Tenant shall request. Landlord shall use commercially reasonable efforts
promptly to restore passenger elevator service following any emergency.

C. Electricity. Landlord shall provide sufficient electricity to operate normal
office lighting and equipment. Tenant shall not install or operate in the
Building C portion of the Premises any electrically operated equipment or other
machinery, other than business machines and equipment normally employed for
general office use which do not require high electricity consumption for
operation, without obtaining the prior written consent of Landlord. Tenant may
also operate various electronics and other equipment in the Buildings provided
such operation is consistent with the permitted uses under this Lease. If any or
all of Tenant's equipment, including, without limitation, its electronics and
other equipment operated in accordance with Tenant's permitted use of the
Premises, requires electricity consumption in excess of that which is necessary
to operate normal office equipment in the Building C portion of the Premises,
such consumption (including consumption for computer or telephone rooms and
special HVAC equipment) shall be submetered by Landlord at Tenant's expense, and
Tenant shall reimburse Landlord as Additional Rent for the cost of its
submetered consumption based upon Landlord's actual cost of electricity. Such
Additional Rent shall be in addition to Tenant's obligations pursuant to
Section 2A(2) to pay its Proportionate Share of Operating Costs. Tenant shall
pay the cost of electrical service to Building B directly to the electrical
service provider.

D. Water. Landlord shall furnish hot and cold tap water for drinking and toilet
purposes. Tenant shall pay Landlord for water furnished for any other purpose as
Additional Rent at rates fixed by Landlord. Tenant shall use reasonable efforts
to avoid wasting water.

E. Janitorial Service. Tenant shall provide janitorial services to the Premises,
at is own cost, to a standard consistent with good commercial practices in
similar office buildings.

F. Interruption of Services. If any of the Building equipment or machinery
ceases to function properly for any cause Landlord shall use reasonable
diligence to repair the same promptly. Landlord's inability to furnish, to any
extent, the Project services set forth in this Section 4, or any cessation
thereof resulting from any causes, including any entry for repairs pursuant to
this Lease, and any renovation, redecoration or rehabilitation of any area of
the Buildings shall not render Landlord liable for damages to either person or
property or for interruption or loss to Tenant's business, nor be construed as
an eviction of Tenant, nor work an abatement of any portion of Rent, nor relieve
Tenant from fulfillment of any covenant or agreement hereof. However, in the
event that an interruption of the Project services set forth in this Section 4
causes the Premises to be untenantable for a period of at least seven (7)
consecutive business days, monthly Rent shall thereafter be abated
proportionately, to the extent the Premises are unusable for their normal
purposes. Nothing herein precludes Tenant from seeking recovery of any and all
damages suffered and losses incurred (including but not limited to loss of
business) due to an interruption of utilities for a period greater than five (5)
business days, if such interruption was caused by the negligence or willful
misconduct of Landlord, its agents, employees, or contractors. Subject to
closures due to Force Majeure, emergency or casualty, Tenant shall have full
access and use of the Premises twenty-four hours a day, seven days a week, 52
weeks a year.

G. Landlord's Maintenance Obligations. Landlord shall maintain, repair and
replace as necessary the structural and common area portions of the Buildings
and Project in good working order and condition, including without limitation
the roof, exterior surfaces of the Building, foundation, common area flooring,
heating and electrical systems, HVAC systems (provided that Tenant may elect to
take responsibility for maintaining any additional HVAC system installed as part
of the Initial Improvements), plumbing, elevators, lobbies, stairs, corridors,
restrooms, landscaping, parking areas, on-site utilities and improvements
necessary for the operation of the Building, and all other common areas of the
Building. Furthermore, Landlord warrants that the common areas of the Buildings,
including restrooms and lobbies are (or will be by or before the Commencement
Date) in compliance with the Americans with Disabilities Act of 1990 and all
other applicable building codes. Landlord shall remedy any violation of this
warranty (at its sole cost and expense) promptly following receipt of notice
from Tenant of any such violation.

5. ALTERATIONS AND REPAIRS.

A. Landlord's Consent and Conditions.

Tenant shall not make any improvements or alterations to the Premises (the
"Work") without in each instance submitting plans and specifications for the
Work to Landlord and obtaining Landlord's prior written consent which shall not
be unreasonably withheld, conditioned or delayed, provided that (a) such Work
does not impact the base structural components or systems of the Buildings, (b)
such Work will not impact any other tenant's premises, and (c) such Work is not
visible from outside the Premises. Landlord may withhold its consent in its sole
discretion for any Work which (a) impacts the base structural components or
systems of the Buildings, (b) impacts any other tenant's premises, or (c) is
visible from outside the Premises.

Subject to Landlord's review and approval of the plans and specifications for
the same and the remaining requirements of this Section 5, Landlord hereby
consents to the installation, periodic testing, and use in an emergency of
Tenant's backup generator in the location depicted on Appendix A-2 attached
hereto or in alternative locations reasonably approved by Landlord. Tenant
agrees to screen the generator in a manner reasonably approved by Landlord and
in compliance with any applicable requirements of the City of Redmond and/or any
other applicable governmental authorities.

Tenant shall pay for the cost of all Work. All Work shall become the property of
Landlord upon its installation, except for Tenant's trade fixtures and for items
which Tenant is required to remove at Tenant's cost at the termination of the
Lease pursuant to Section 5E.

The following requirements shall apply to all Work:

(1) Prior to commencement, Tenant shall furnish to Landlord building permits,
certificates of insurance satisfactory to Landlord, and, at Landlord's request,
security for payment of all costs (which, as to the Initial Improvements, are
not to be covered by the Landlord's allowances set forth in Appendix C hereto).

(2) Tenant shall perform all Work so as to maintain peace and harmony among
other contractors serving the Project and shall avoid interference with other
work to be performed or services to be rendered in the Project.

(3) The Work shall be performed in a good and workmanlike manner, meeting the
standard for construction and quality of materials in the Buildings, and shall
comply with all insurance requirements and all applicable governmental laws,
ordinances and regulations ("Governmental Requirements").

(4) Tenant shall perform all Work so as to minimize or prevent disruption to
other tenants, and Tenant shall comply with all reasonable requests of Landlord
in response to complaints from other tenants.

(5) Tenant shall perform all Work in compliance with Landlord's "Policies, Rules
and Procedures for Construction Projects" in effect at the time the Work is
performed.

(6) Tenant shall supervise all Work.

(7) Upon completion, Tenant shall furnish Landlord with contractor's affidavits
and full and final statutory waivers of liens, as-built plans and
specifications, and receipted bills covering all labor and materials, and all
other close-out documentation required in Landlord's "Policies, Rules and
Procedures for Construction Projects".

B. Damage to Systems. If any part of the mechanical, electrical or other systems
in the Premises shall be damaged, Tenant shall promptly notify Landlord, and
Landlord shall promptly commence, and diligently pursue the repair of such
damage until completed. Landlord may also at any reasonable time make any
repairs or alterations which Landlord deems necessary for the safety or
protection of the Project, or which Landlord is required to make by any court or
pursuant to any Governmental Requirement. Tenant shall at its expense make all
other repairs necessary to keep the Premises, and Tenant's fixtures and personal
property, in good order, condition and repair; to the extent Tenant fails to do
so, Landlord may make such repairs itself. The cost of any repairs made by
Landlord on account of Tenant's default, or on account of the mis-use or neglect
by Tenant or its contractors or agents anywhere in the Project, or its invitees
within the Premises, shall become Additional Rent payable by Tenant on demand.
Notwithstanding any provision set forth in this Lease to the contrary, if Tenant
provides written notice (or oral notice in the event of an emergency such as
damage or destruction to or of any portion of the Building and/or the Building
systems and/or anything that could cause material disruption to Tenant's
business) to Landlord of an event or circumstance which requires the action of
Landlord with respect to repair and/or maintenance, and Landlord fails to
provide such action within a reasonable period of time, given the circumstances,
after the receipt of such notice, but in any event not later than seven (7) days
after receipt of such notice, then Tenant may proceed to take the required
action upon delivery of an additional three (3) business days' notice to
Landlord specifying that Tenant is taking such required action (provided,
however, that neither of the notices shall be required in the event of an
emergency which threatens life or where there is imminent danger to property),
and if such action was required under the terms of the Lease to be taken by
Landlord and was not taken by Landlord within such ten (10) day period (unless
such notice was not required as provided above), then Tenant shall be entitled
to prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in
taking such action plus interest thereon at the default interest rate (described
in Section 2D(2)), plus any abatement of Rent otherwise available pursuant to
Section 4F. Subject to the reasonable security requirements of any other tenant
in the Buildings and the Project, Landlord agrees that Tenant shall have access
to the Buildings and Building systems and the Project, to the extent reasonably
necessary to perform the work contemplated by this provision.

C. No Liens. Tenant has no authority to cause or permit any lien or encumbrance
of any kind to affect Landlord's interest in the Project; any such lien or
encumbrance shall attach to Tenant's interest only. If any mechanic's lien shall
be filed or claim of lien made for work or materials furnished to Tenant, then
Tenant shall at its expense within ten (10) days thereafter either discharge or
contest the lien or claim. If Tenant contests the lien or claim, then Tenant
shall (i) within such ten (10) day period, provide Landlord adequate security
for the lien or claim, (ii) contest the lien or claim in good faith by
appropriate proceedings that operate to stay its enforcement, and (iii) pay
promptly any final adverse judgment entered in any such proceeding. If Tenant
does not comply with these requirements, Landlord may discharge the lien or
claim, and the amount paid, as well as attorney's fees and other expenses
incurred by Landlord, shall become Additional Rent payable by Tenant on demand.

D. Ownership of Improvements. Except as expressly provided otherwise in this
Lease, all Work as defined in this Section 5, affixed partitions, affixed
hardware, equipment affixed to become part of the Building systems, machinery
affixed to become part of the Building systems and all other improvements and
all affixed fixtures except trade fixtures, constructed in the Premises by
either Landlord or Tenant, (i) shall become Landlord's property upon
installation without compensation to Tenant, unless Landlord consents otherwise
in writing, and (ii) shall at Landlord's option either (a) be surrendered to
Landlord with the Premises at the termination of the Lease or of Tenant's right
to possession, or (b) be removed in accordance with Subsection 5E below.
Landlord shall notify Tenant at the time of its approval of the construction of
any such items whether Tenant shall be required to remove the same at the
expiration or sooner termination of this Lease. The parties agree that
notwithstanding any provision to the contrary in this Lease, unless specifically
stated otherwise as part of Landlord's consent to Work, Tenant shall retain
ownership of all trade fixtures and equipment used in its business operations,
whether or not affixed to the Premises or identified by Tenant at the time plans
are submitted for approval to Landlord, and Tenant shall have the right to
remove such items upon termination of this Lease. For avoidance of doubt, this
includes all laboratory and manufacturing equipment. Unless Landlord at the time
it gives its consent to the performance of such construction expressly requires
the removal of the constructed items, then Tenant shall not be obligated to
remove such items upon termination of the Lease.

E. Removal at Termination. Upon the termination of this Lease or Tenant's right
of possession Tenant shall remove from the Project its trade fixtures,
furniture, equipment and other personal property, interior and exterior signage,
any improvements which Tenant is required to remove pursuant to Section 5D, and
any improvements to any portion of the Project other than the Premises (Tenant
specifically agreeing to remove any emergency generator). Tenant shall repair
all damage caused by the installation or removal of any of the foregoing items.
If Tenant does not timely remove such property, and Tenant fails to remove it
within 20 days of receipt of written notice requesting such removal, Tenant
shall be conclusively presumed to have, at Landlord's election, (i) conveyed
such property to Landlord without compensation, or (ii) abandoned such property,
and Landlord may dispose of or store any part thereof in any manner at Tenant's
sole cost, without waiving Landlord's right to claim from Tenant all expenses
arising out of Tenant's failure to remove the property, and without liability to
Tenant or any other person. Landlord shall have no duty to be a bailee of any
such personal property. If Landlord elects abandonment, Tenant shall pay to
Landlord, upon demand, any expenses incurred for disposition.

F. Satellite Dish Equipment. During the Term, Tenant shall have the right at its
sole cost to install, maintain, and from time to time replace one or more
satellite dish, antenna or communication device on the roof of one or both
Buildings, together with necessary antenna(e) cabling and wiring connecting the
same to the Premises (such dish, antenna, communication equipment, cabling and
wiring being collectively referred to as the "Dish Equipment") for purposes of
facilitating communications of Tenant to and from the Premises, provided that
(a) Tenant shall obtain Landlord's prior written approval of the proposed size,
weight, location and aesthetic impact of the Dish Equipment and the method for
fastening the Dish Equipment to the Building, such approval not to be
unreasonably withheld, delayed or conditioned; (b) Tenant will at its sole cost
comply with (i) all Governmental Requirements, (ii) Landlord's reasonable
requirements from time to time, and (iii) the conditions of any bond or warranty
maintained by Landlord on the roof; and (c) the Dish Equipment shall not
interfere, electronically or otherwise, with the equipment, facilities, use or
operations of Landlord or of other licensees or tenants of Landlord in the
Project or on adjoining properties owned by Landlord or its affiliates as such
equipment, facilities, use or operations exist at the time that Tenant submits
its plans to Landlord for use of Dish Equipment. Landlord may supervise any roof
penetration. In no event shall Landlord's approval of plans for the Dish
Equipment or supervision of roof penetration be deemed a representation that the
Dish Equipment will not cause, or be subject to, interference or that such plans
will comply with Governmental Requirements, future requirements of Landlord, or
the conditions of any bond or warranty maintained by Landlord on the roof.
Tenant shall repair any damage to the Building caused by the installation,
maintenance, replacement, use or removal of the Dish Equipment. The Dish
Equipment shall remain the property of Tenant. Tenant may remove the Dish
Equipment at its sole cost during the Term, and Tenant shall remove the Dish
Equipment at its sole cost upon expiration or termination of the Lease, and
Tenant's failure to do so shall entitle Landlord to pursue the remedies set
forth in Section 5E, above. Landlord agrees that it shall not permit any third
party to locate any other rooftop communications equipment or similar facilities
on Building B without Tenant's prior written consent. Landlord may install
rooftop communications equipment or similar facilities on Building B, so long as
such equipment or facilities do not interfere with the operation of Tenant's
Dish Equipment, and Landlord agrees promptly following written notice from
Tenant to relocate any such equipment or facilities on Building B that cause
such interference. With respect to Dish Equipment placed on Building C, Landlord
shall have the right to require Tenant to relocate all or any part of the Dish
Equipment from time to time, provided that such relocation does not interfere
with the functionality of the Dish Equipment and that Landlord reimburses Tenant
for the cost of such relocation within thirty (30) days of completion. In the
event Landlord requires Tenant to relocate the Dish Equipment to comply with
Governmental Requirements, such relocation shall be performed at Tenant's sole
cost. In the event Landlord otherwise requires the Dish Equipment to be
relocated, such relocation shall be performed at Landlord's sole cost. Tenant
shall protect, defend, indemnify and hold harmless Landlord from and against
claims, damages, liabilities, costs and expenses of every kind and nature,
including reasonable attorneys' fees, incurred by or asserted against Landlord
arising out of the installation, maintenance, replacement, use or removal of the
Dish Equipment (including the reasonable costs and expenses of Landlord's review
of plans for the Dish Equipment), except to the extent caused by the negligence
or willful misconduct of Landlord or its employees, agents or contractors. Prior
to the installation of the Dish Equipment, Tenant shall provide Landlord with a
revised certificate of insurance showing that Tenant's liability coverage
includes the Dish Equipment installation and use thereof and shall secure from
any Dish Equipment installation contractors a certificate of insurance in the
same form and with the same requirements as Tenant's certificate of insurance.
Tenant shall have no obligation to pay Rent for the rights conferred under this
Section, but Tenant shall maintain any Dish Equipment in good repair.

6. USE OF PREMISES.

Tenant shall use the Premises primarily for general office, research and
development, and light manufacturing, and incidentally for other ancillary
purposes reasonably related to its primary use. Tenant shall not allow any use
of the Premises which will negatively affect the cost of coverage of Landlord's
insurance on the Project. Tenant shall not allow any use of the Premises which
would interfere with any other Tenant or with the operation of the Project by
Landlord; provided that Landlord confirms that Tenant's intended use of the
Premises as described above will not violate the restrictions of this Section 6.
Tenant shall not permit any nuisance or waste upon the Premises, or allow any
offensive noise or odor in or around the Premises.

If any governmental authority shall deem the Premises to be a "place of public
accommodation" under the Americans with Disabilities Act or any other comparable
law as a result of Tenant's use, Tenant shall either modify its use to cause
such authority to rescind its designation or be responsible for any alterations,
structural or otherwise, required to be made to the Buildings or the Premises
under such laws. Landlord shall be responsible, at its own cost without
reimbursement, for the compliance of the Project and the entries and access
points to the Buildings with the requirements of the Americans with Disabilities
Act existing as of the date of this Lease; any modifications required as a
result of changes to the Americans with Disabilities Act taking effect after the
date of this Lease and thereafter applicable from time to time shall be included
within Operating Costs (and Included Capital Items, to the extent applicable).

7. GOVERNMENTAL REQUIREMENTS AND BUILDING RULES.

Tenant shall comply with all Governmental Requirements applying to its use of
the Premises. Tenant shall also comply with Landlord's rules and regulations
contained in Appendix B hereto, and with all future reasonable rules reasonably
established for the Project from time to time by Landlord, provided that it is
understood and agreed that the provisions of this Lease, including Appendix C
hereto, take precedence and control in the event of any conflicting provisions
or obligations set forth in any such future rules. Failure by another tenant to
comply with the rules or failure by Landlord to enforce them shall not relieve
Tenant of its obligation to comply with the rules or make Landlord responsible
to Tenant in any way. Landlord shall use reasonable efforts to apply the rules
and regulations uniformly with respect to Tenant and tenants in the Buildings
under leases containing rules and regulations similar to this Lease. In the
event of alterations and repairs performed by Tenant, Tenant shall comply with
the provisions of Section 5 of this Lease and also Landlord's "Policies, Rules
and Regulations for Construction Projects".

8. WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE.

A. Indemnification. Tenant shall indemnify, defend and hold harmless Landlord
and its officers, directors, employees and agents against any claim by any third
party for injury to any person or damage to or loss of any property occurring in
the Project and arising from the use of the Premises or from any other act or
omission or negligence of Tenant or any of Tenant's officers, directors,
employees or agents; except to the extent any such claim is caused by the
negligence or willful misconduct of Landlord or its officers, directors,
employees or agents. Tenant's obligations under this section shall survive the
termination of this Lease.

Landlord shall indemnify, defend and hold harmless Tenant and its officers,
directors, employees and agents against any claim by any third party for injury
to any person or damage to or loss of any property occurring in the Project or
from any other act or omission or negligence of Landlord or any of Landlord's
officers, directors, employees or agents; except to the extent any such claim is
caused by the negligence or willful misconduct of Tenant or its officers,
directors, employees or agents. Landlord's obligations under this section shall
survive the termination of this Lease.

AS BETWEEN LANDLORD AND TENANT, AND NOT FOR THE BENEFIT OF ANY THIRD PARTY,
TENANT HEREBY WAIVES ITS IMMUNITY WITH RESPECT TO LANDLORD UNDER THE INDUSTRIAL
INSURANCE ACT (RCW TITLE 51) AND/OR ANY EQUIVALENT ACTS AND TENANT EXPRESSLY
AGREES TO ASSUME POTENTIAL LIABILITY FOR ACTIONS BROUGHT AGAINST LANDLORD BY
TENANT'S EMPLOYEES. THIS WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY THE PARTIES
TO THIS LEASE AND TENANT HAS HAD THE OPPORTUNITY TO, AND HAS BEEN ENCOURAGED, TO
CONSULT WITH INDEPENDENT COUNSEL REGARDING THIS WAIVER.

AS BETWEEN LANDLORD AND TENANT, AND NOT FOR THE BENEFIT OF ANY THIRD PARTY,
LANDLORD HEREBY WAIVES ITS IMMUNITY WITH RESPECT TO TENANT UNDER THE INDUSTRIAL
INSURANCE ACT (RCW TITLE 51) AND/OR ANY EQUIVALENT ACTS AND LANDLORD EXPRESSLY
AGREES TO ASSUME POTENTIAL LIABILITY FOR ACTIONS BROUGHT AGAINST TENANT BY
LANDLORD'S EMPLOYEES. THIS WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY THE
PARTIES TO THIS LEASE AND LANDLORD HAS HAD THE OPPORTUNITY TO, AND HAS BEEN
ENCOURAGED, TO CONSULT WITH INDEPENDENT COUNSEL REGARDING THIS WAIVER.

B. Tenant's Insurance. Tenant shall maintain insurance as follows, with such
other terms, coverages and insurers, as Landlord shall reasonably require from
time to time:

(1) Commercial General Liability Insurance, with (a) Contractual Liability
including the indemnification provisions contained in this Lease, (b) a
severability of interest endorsement, (c) limits of not less than One Million
Dollars ($1,000,000) combined single limit per occurrence and not less than Two
Million Dollars ($2,000,000) in the aggregate for bodily injury, sickness or
death, and property damage, and umbrella coverage of not less than Three Million
Dollars ($3,000,000).

(2) Property Insurance against "All Risks" of physical loss covering the
replacement cost of all improvements, fixtures and personal property.

(3) Workers' compensation or similar insurance in form and amounts required by
law, and Employer's Liability with not less than the following limits:

Each Occurrence $500,000

Aggregate--Policy Limit $500,000

Per Employee $500,000

Tenant's insurance shall be primary and not contributory to that carried by
Landlord, its agents, or mortgagee. Landlord, and if any, Landlord's building
manager or agent and ground lessor shall be named as additional insureds as
respects to insurance required of the Tenant in Section 8B(1). The company or
companies writing any insurance which Tenant is required to maintain under this
Lease, as well as the form of such insurance, shall at all times be subject to
Landlord's approval, and any such company shall be licensed to do business in
the state in which the Buildings are located. Such insurance companies shall
have a A.M. Best rating of A VI or better.

Tenant shall cause any contractor of Tenant performing work on the Premises to
maintain insurance as follows, with such other terms, coverages and insurers, as
Landlord shall reasonably require from time to time:

(1) Commercial General Liability Insurance, including contractor's liability
coverage, contractual liability coverage, completed operations coverage, broad
form property damage endorsement, and contractor's protective liability
coverage, to afford protection with limits, for each occurrence, of not less
than One Million Dollars ($1,000,000) with respect to personal injury, death or
property damage.

(2) Workers' compensation or similar insurance in form and amounts required by
law, and Employer's Liability with not less than the following limits:

Each Occurrence $500,000

Aggregate Policy Limit $500,000

Per Employee $500,000

Tenant's contractor's insurance shall be primary and not contributory to that
carried by Tenant, Landlord, their agents or mortgagees. Tenant and Landlord,
and if any, Landlord's building manager or agent, mortgagee or ground lessor
shall be named as additional insured on Tenant's contractor's insurance
policies.

C. Insurance Certificates. Tenant shall deliver to Landlord certificates
evidencing all required insurance no later than five (5) days prior to the
Commencement Date and each renewal date. Each certificate will provide for
thirty (30) days prior written notice of cancellation to Landlord and Tenant.

D. Landlord's Insurance. Landlord shall maintain "All-Risk" property insurance
at replacement cost, including loss of rents, on the Buildings, and Commercial
General Liability insurance policies covering the common areas of the Buildings,
each with such terms, coverages and conditions as are normally carried by
reasonably prudent owners of properties similar to the Project.

E. Waiver of Subrogation. Notwithstanding any other term or provision of this
Lease, Landlord and Tenant each waive any and all rights to recover against the
other, or against the officers, directors, shareholders, partners, joint
ventures, employees, agents, customers, invitees or business visitors of such
other party, for any loss or damage to such waiving party arising from any cause
covered by any property insurance required to be carried pursuant to this Lease
or any other property insurance actually carried by such party. Landlord and
Tenant, from time to time, will cause their respective insurers to issue
appropriate waiver of subrogation rights endorsements to all property insurance
policies carried in connection with the Building or the Premises or the contents
of either.

9. FIRE AND OTHER CASUALTY.

A. Termination. If a fire or other casualty causes substantial damage to the
Buildings or the Premises, Landlord shall engage a registered architect to
certify within one (1) month of the casualty to both Landlord and Tenant the
amount of time needed to restore the Buildings and the Premises to
tenantability, using standard working methods. If the time needed exceeds twelve
(12) months from the date of damage, or five (5) months therefrom if the damage
occurs during the last twenty-four (24) months of the Lease, then in the case of
the Premises, either Landlord or Tenant may terminate this Lease, and in the
case of substantial damage to portions of Building C other than the Premises,
Landlord may terminate this Lease, by notice to the other party within ten (10)
days after the notifying party's receipt of the architect's certificate.
Notwithstanding the foregoing, if flood, earthquake or other peril for which
Landlord does not carry insurance causes substantial damage to the Premises or
the Buildings, Landlord may also terminate this Lease by written notice given to
Tenant within thirty (30) days from the date of the casualty. The termination
under this paragraph shall be effective thirty (30) days from the date of the
notice and Rent shall be paid by Tenant to that date, with an abatement for any
portion of the Premises which has been untenantable after the casualty.

B. Restoration. If a casualty causes damage to the Buildings or the Premises but
this Lease is not terminated for any reason, then subject to the rights of any
mortgagees or ground lessors, Landlord shall obtain the applicable insurance
proceeds and diligently restore the Buildings and the Premises subject to
current Governmental Requirements. Tenant shall replace its damaged
improvements, personal property and fixtures as it deems appropriate. Rent shall
be abated on a per diem basis during the restoration for any portion of the
Premises which is untenantable.

10. EMINENT DOMAIN.

If a part of the Project is taken by eminent domain or deed in lieu thereof
which is so substantial that the Premises cannot reasonably be used by Tenant
for the operation of its business as contemplated (one location to combine
business operations), then either party may terminate this Lease effective as of
the date of the taking. If any substantial portion of the Project is taken
without affecting the Premises, then Landlord may terminate this Lease as of the
date of such taking. Rent shall abate from the date of the taking in proportion
to any part of the Premises taken. The entire award for a taking of any kind
shall be paid to Landlord, and Tenant shall have no right to share in the award;
provided that Tenant shall be permitted to pursue recovery of (a) any available
award for the unamortized cost of any permanent improvements made to the
Premises by Tenant at its sole cost (i.e., in excess of the Landlord's
Contribution and Additional Landlord's Contribution set forth in Appendix C
hereto), and (b) any separate award available for Tenant's relocation expenses.
All obligations accrued to the date of the taking shall be performed by the
party liable to perform said obligations, as set forth herein.

11. RIGHTS RESERVED TO LANDLORD.

Landlord may exercise at any time any of the following rights respecting the
operation of the Project without liability to the Tenant of any kind:

A. Name. To change the name of the Buildings (provided that Landlord reimburses
Tenant for all reasonable costs associated with changes to letterhead,
stationary, and other similar expenses attributable to the change), or if
mandated by applicable governmental authority, to change the street address of
the Buildings or suite number(s) of the Premises.

B. Signs. To install and maintain any signs on the exterior and in the interior
of the Buildings, and to approve at its sole discretion, prior to installation,
any of Tenant's signs in the Premises visible from the common areas or the
exterior of the Buildings.

Subject to Landlord's prior written approval of the size, design, materials and
location of the Tenant's sign, Tenant shall have the right to install, maintain,
and replace a sign for its commercial identification on the exterior façades of
each of the Buildings. The size of any Tenant sign to be located on Building C
shall not reduce the exterior signage area available to other tenants in
Building C, on a proportionate basis or as may otherwise be determined pursuant
to any applicable signage codes. Landlord's approval of Tenant's signage shall
not be unreasonably withheld, provided that the signs comply with all applicable
codes and ordinances, and are aesthetically compatible in Landlord's judgment
with the Buildings and the Project. The parties agree to work together in good
faith to determine the exact location for the signs. Tenant shall pay for all
costs of construction, installation, maintenance and repair of its signs, and
shall remove the signs upon the expiration or sooner termination of the Lease
and repair all damage resulting from such removal at Tenant's sole cost.

C. Window Treatments. To approve, at its discretion, prior to installation, any
shades, blinds, ventilators or window treatments of any kind, as well as any
lighting within the Premises that may be visible from the exterior of the
Buildings or any interior common area.

D. Keys. To retain and use at any time passkeys to enter the Premises or any
door within the Premises. Tenant shall not alter or add any lock or bolt.

E. Access. Upon not less than 24 hours' prior notice (except in the case of an
emergency or in response to a Tenant initiated service request), and subject to
Tenant's reasonable security requirements, including the requirement that
Landlord be accompanied by an authorized employee of Tenant, to have access to
inspect the Premises, and to perform its obligations, or make repairs,
alterations, additions or improvements, as permitted by this Lease. Landlord
agrees to use reasonable efforts to coordinate with Tenant any entry into the
Premises pursuant to this Section 11E when reasonably possible.

F. Preparation for Reoccupancy. To decorate, remodel, repair, alter or otherwise
prepare the Premises for reoccupancy at any time after Tenant abandons the
Premises, without relieving Tenant of any obligation to pay Rent.

G. Heavy Articles. To approve the weight, size, placement and time and manner of
movement within the Buildings of any safe, central filing system or other heavy
article of Tenant's property. Tenant shall move its property entirely at its own
risk.

H. Show Premises. To show the Premises to prospective purchasers, tenants,
brokers, lenders, investors, rating agencies or others at any reasonable time
(subject to restrictions on access as described in Section 11E above), provided
that Landlord gives prior notice to Tenant and does not materially interfere
with Tenant's use of the Premises.

I. Intentionally Omitted.

J. Use of Lockbox. To designate a lockbox collection agent for collections of
amounts due Landlord. In that case, the date of payment of Rent or other sums
shall be the date of the agent's receipt of such payment or the date of actual
collection if payment is made in the form of a negotiable instrument thereafter
dishonored upon presentment. However, Landlord may reject any payment for all
purposes as of the date of receipt or actual collection by mailing to Tenant
within 21 days after such receipt or collection a check equal to the amount sent
by Tenant.

K. Repairs and Alterations. To make repairs or alterations to the Project and in
doing so transport any required material through the Premises, to close
entrances, doors, corridors, elevators and other facilities in the Project, to
open any ceiling in the Premises, or to temporarily suspend services or use of
common areas in the Buildings. Landlord shall use reasonable efforts to ensure
that Landlord's entry onto the Premises and any alterations, repairs or
improvements do not unreasonably interfere with Tenant's use, parking, access,
of and to the Premises. Tenant may require any Work in the Premises to be done
after business hours if Tenant pays Landlord for overtime and any other expenses
incurred. Landlord may do or permit any work on any nearby building, land,
street, alley or way.

L. Landlord's Agents. If Tenant is in default under this Lease, possession of
Tenant's funds or negotiation of Tenant's negotiable instrument by any of
Landlord's agents shall not waive any breach by Tenant or any remedies of
Landlord under this Lease.

M. Building Services. To install, use and maintain through the Premises, pipes,
conduits, wires and ducts serving the Buildings, provided that such
installation, use and maintenance does not unreasonably interfere with Tenant's
use of the Premises.

N. Other Actions. To take any other action which Landlord deems reasonable in
connection with the operation, maintenance or preservation of the Buildings.

12. TENANT'S DEFAULT.

Any of the following shall constitute a default by Tenant:

A. Rent Default. Tenant fails to pay any Rent when due and such failure
continues for a period of five (5) business days after Tenant's receipt of
written notice of such failure;

B. Assignment/Sublease or Hazardous Substances Default. Tenant defaults in its
obligations under Section 17 Assignment and Sublease or Section 28 Hazardous
Substances;

C. Other Performance Default. Tenant fails to perform any other obligation to
Landlord under this Lease, and, in the case of only the first two (2) such
failures during the Term of this Lease, this failure continues for thirty (30)
days after receipt of written notice from Landlord, except that if Tenant begins
to cure its failure within the thirty (30) day period but cannot reasonably
complete its cure within such period, then, so long as Tenant continues to
diligently attempt to cure its failure, the thirty (30) day period shall be
extended to sixty (60) days, or such lesser period as is reasonably necessary to
complete the cure;

D. Credit Default. One of the following credit defaults occurs:

(1) Tenant commences any proceeding under any law relating to bankruptcy,
insolvency, reorganization or relief of debts, or seeks appointment of a
receiver, trustee, custodian or other similar official for the Tenant or for any
substantial part of its property, or any such proceeding is commenced against
Tenant and either remains undismissed for a period of thirty days or results in
the entry of an order for relief against Tenant which is not fully stayed within
seven days after entry;

(2) Tenant becomes insolvent or bankrupt, does not generally pay its debts as
they become due, or admits in writing its inability to pay its debts, or makes a
general assignment for the benefit of creditors;

(3) Any third party obtains a levy or attachment under process of law against
Tenant's leasehold interest.

E. Vacation or Abandonment Default. Tenant vacates or abandons the entire
Premises.

13. REMEDIES.

A. Termination of Lease or Possession. If Tenant defaults, Landlord may elect by
notice to Tenant either to terminate this Lease or to terminate Tenant's
possession of the Premises without terminating this Lease. In either case,
Tenant shall immediately vacate the Premises and deliver possession to Landlord,
and Landlord may repossess the Premises and may, at Tenant's sole cost, remove
any of Tenant's signs and any of its other property, without relinquishing its
right to receive Rent or any other right against Tenant.

B. Lease Termination Damages. If Landlord terminates the Lease pursuant to
Section 13A, Tenant shall pay to Landlord all Rent due on or before the date of
termination, plus Landlord's reasonable estimate of the aggregate Rent
(excluding Landlord's Additional Contribution, as defined in Appendix C hereto)
that would have been payable from the date of termination through the
Termination Date, reduced by the rental value of the Premises calculated as of
the date of termination for the same period, taking into account anticipated
vacancy prior to reletting, reletting expenses and market concessions, both
discounted to present value at the rate of five percent (5%) per annum, plus
100% of the then unpaid principal balance of the Additional Landlord's
Contribution. If Landlord shall relet any part of the Premises for any part of
such period before the present value amount described in the preceding sentence
shall have been paid by Tenant or finally determined by a court, then the amount
of Rent payable pursuant to such reletting (taking into account vacancy prior to
reletting and any reletting expenses or concessions) shall be deemed to be the
reasonable rental value for that portion of the Premises relet during the period
of the reletting.

C. Possession Termination Damages. If Landlord terminates Tenant's right to
possession without terminating the Lease and Landlord takes possession of the
Premises itself, Landlord may relet any part of the Premises for such Rent, for
such time, and upon such terms as Landlord in its sole discretion shall
determine, without any obligation to do so prior to renting other vacant areas
in the Buildings. Any proceeds from reletting the Premises shall first be
applied to the expenses of reletting, including redecoration, repair,
alteration, advertising, brokerage, legal, and other reasonably necessary
expenses. If the reletting proceeds after payment of expenses are insufficient
to pay the full amount of Rent under this Lease, Tenant shall pay such
deficiency to Landlord monthly upon demand as it becomes due. Any excess
proceeds shall be retained by Landlord.

D. Remedies Cumulative. All of Landlord's remedies under this Lease shall be in
addition to all other remedies Landlord may have at law or in equity. Waiver by
either party of any breach of any obligation by the other party shall be
effective only if it is in writing, and shall not be deemed a waiver of any
other breach, or any subsequent breach of the same obligation. Landlord's
acceptance of payment by Tenant shall not constitute a waiver of any breach by
Tenant, and if the acceptance occurs after Landlord's notice to Tenant, or
termination of the Lease or of Tenant's right to possession, the acceptance
shall not affect such notice or termination. Acceptance of payment by Landlord
after commencement of a legal proceeding or final judgment shall not affect such
proceeding or judgment. Landlord may advance such monies and take such other
actions for Tenant's account as reasonably may be required to cure or mitigate
any default by Tenant. Tenant shall immediately reimburse Landlord for any such
advance, and such sums shall bear interest at the default interest rate
described in Section 2D(2) until paid.

E. WAIVER OF TRIAL BY JURY. EACH PARTY WAIVES TRIAL BY JURY IN THE EVENT OF ANY
LEGAL PROCEEDING BROUGHT BY THE OTHER IN CONNECTION WITH THIS LEASE. EACH PARTY
SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS LEASE IN A
FEDERAL OR STATE COURT LOCATED IN WASHINGTON, CONSENTS TO THE JURISDICTION OF
SUCH COURTS, AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH
COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM.

F. Litigation Costs. If either party hereto fails to perform any of its
obligations under this Lease or if any dispute arises between the parties hereto
concerning the meaning or interpretation of any provision of this Lease, then
the defaulting party or the party not prevailing in such dispute, as the case
may be, shall pay any and all costs and expenses incurred by the other party on
account of such default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and reasonable attorneys'
fees and disbursements. Any such attorneys' fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Lease shall be
recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable from
the other provisions of this Lease and to survive and not be merged into any
such judgment.

Without limiting the generality of this Section, if Landlord utilizes the
services of an attorney for the purpose of collecting any unpaid Rent due or in
connection with any other breach of this Lease by Tenant, Tenant agrees to pay
Landlord actual attorneys' fees, regardless of the fact that no legal action may
be commenced or filed by Landlord.

G. Default by Landlord. Landlord shall be in default in the performance of any
obligation required to be performed by Landlord under the Lease if Landlord has
failed to perform such obligation within thirty (30) days after the receipt of
notice from Tenant specifying in detail Landlord's failure to perform; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) calendar days are reasonably required for its performance, Landlord
shall not be deemed in default if it shall commence such performance within
thirty (30) days and thereafter diligently pursues the same to completion.

14. SURRENDER.

Upon termination of this Lease or Tenant's right to possession, Tenant shall
return the Premises to Landlord in good order and condition, ordinary wear and
casualty damage excepted. If Tenant is required to remove any alterations under
the terms of this Lease, then Tenant shall remove the alterations in a good and
workmanlike manner and restore the Premises to its condition prior to their
installation.

15. HOLDOVER.

Tenant shall have no right to holdover possession of the Premises after the
expiration or termination of this Lease without Landlord's prior written
consent, which consent may be withheld in Landlord's sole and absolute
discretion. If Tenant retains possession of any part of the Premises after the
Term, Tenant shall become a month-to-month tenant for the entire Premises upon
all of the terms of this Lease as might be applicable to such month-to-month
tenancy, except that Tenant agrees to pay for each full or partial month that
Tenant remains in possession, and an amount equal to 125% of the Base Rent,
estimated Operating Cost Share Rent and estimated Tax Share Rent in effect
immediately prior to such holdover, computed on a monthly basis. Tenant shall
also pay Landlord all of Landlord's direct and consequential damages. No
acceptance of Rent or other payments by Landlord under these holdover provisions
shall operate as a waiver of Landlord's right to regain possession or any other
of Landlord's remedies.

16. SUBORDINATION TO GROUND LEASES AND MORTGAGES.

A. Subordination. This Lease shall be subordinate to any present or future
ground lease or mortgage respecting the Project, and any amendments to such
ground lease or mortgage, at the election of the ground lessor or mortgagee as
the case may be, effected by notice to Tenant in the manner provided in this
Lease. The subordination shall be effective upon such notice, but at the request
of Landlord or ground lessor or mortgagee, Tenant shall within ten (10) days of
the request, execute and deliver to the requesting party any reasonable
documents provided to evidence the subordination. Any mortgagee has the right,
at its option, to subordinate its mortgage to the terms of this Lease, without
notice to, nor the consent of, Tenant. Tenant's obligation to subordinate this
Lease or execute agreements effecting subordination is conditioned on Tenant's
receipt of a commercially reasonable agreement from such ground lessor,
mortgagee or trust deed beneficiary not to disturb Tenant's rights under the
Lease (including without limitation the right to possession of the Premises)
upon any termination of the ground lease or foreclosure, except as expressly
permitted by the terms of the Lease.

B. Termination of Ground Lease or Foreclosure of Mortgage. If any ground lease
is terminated or mortgage foreclosed or deed in lieu of foreclosure given and
the ground lessor, mortgagee, or purchaser at a foreclosure sale shall thereby
become the owner of the Project, Tenant shall attorn to such ground lessor or
mortgagee or purchaser without any deduction or setoff by Tenant, and this Lease
shall continue in effect as a direct lease between Tenant and such ground
lessor, mortgagee or purchaser. The ground lessor or mortgagee or purchaser
shall be liable as Landlord only during the time such ground lessor or mortgagee
or purchaser is the owner of the Project. At the request of Landlord, ground
lessor or mortgagee, Tenant shall execute and deliver within ten (10) days of
the request any reasonable document furnished by the requesting party to
evidence Tenant's agreement to attorn.

C. Security Deposit. Any ground lessor or mortgagee shall be responsible for the
return of any security deposit by Tenant only to the extent the security deposit
is received by such ground lessor or mortgagee.

D. Notice and Right to Cure. The Project is subject to any ground lease and
mortgage identified with name and address of ground lessor or mortgagee in
Appendix D to this Lease (as the same may be amended from time to time by
written notice to Tenant). Tenant agrees to send by registered or certified mail
to any ground lessor or mortgagee identified either in such Appendix or in any
later notice from Landlord to Tenant a copy of any notice of default sent by
Tenant to Landlord. If Landlord fails to cure such default within the required
time period under this Lease, but ground lessor or mortgagee begins to cure
within ten (10) days after such period and proceeds diligently to complete such
cure, then ground lessor or mortgagee shall have such additional time as is
necessary to complete such cure, including any time necessary to obtain
possession if possession is necessary to cure, and Tenant shall not begin to
enforce its remedies so long as the cure is being diligently pursued.

E. Definitions. As used in this Section 16, "mortgage" shall include "deed of
trust" and/or "trust deed" and "mortgagee" shall include "beneficiary" and/or
"trustee", "mortgagee" shall include the mortgagee of any ground lessee, and
"ground lessor", "mortgagee", and "purchaser at a foreclosure sale" shall
include, in each case, all of its successors and assigns, however remote.

17. ASSIGNMENT AND SUBLEASE.

A. In General. Tenant shall not, without the prior consent of Landlord in each
case, (i) make or allow any assignment or transfer, by operation of law or
otherwise, of any part of Tenant's interest in this Lease, (ii) grant or allow
any lien or encumbrance, by operation of law or otherwise, upon any part of
Tenant's interest in this Lease, (iii) sublet any part of the Premises, or (iv)
permit anyone other than Tenant and its employees to occupy any part of the
Premises. Tenant shall remain primarily liable for all of its obligations under
this Lease, notwithstanding any assignment or transfer. No consent granted by
Landlord shall be deemed to be a consent to any subsequent assignment or
transfer, lien or encumbrance, sublease or occupancy. Tenant shall pay all of
Landlord's reasonable attorneys' fees and other expenses incurred in connection
with any consent requested by Tenant or in reviewing any proposed assignment or
subletting, such amount not to exceed $1,000 for each instance of request. Any
assignment or transfer, grant of lien or encumbrance, or sublease or occupancy
without Landlord's prior written consent shall be void. If Tenant shall assign
this Lease or sublet the Premises in its entirety (other than to an affiliate)
any rights of Tenant to renew this Lease, extend the Term or to lease additional
space in the Project shall be extinguished thereby and will not be transferred
to the assignee or subtenant, all such rights being personal to the Tenant named
herein.

B. Landlord's Consent. Landlord will not unreasonably withhold, delay or
condition its consent to any proposed assignment or subletting. It shall be
reasonable for Landlord to withhold its consent to any assignment or sublease if
(i) Tenant is in default under this Lease, (ii) the proposed assignee or
sublessee is a tenant in the Project or an affiliate of such a tenant or a party
that Landlord has identified as a prospective tenant in the Project and Landlord
has space available elsewhere for such tenant or prospective tenant; (iii) the
financial responsibility, nature of business, and character of the proposed
assignee or subtenant are not all reasonably satisfactory to Landlord, (iv) in
the reasonable judgment of Landlord the purpose for which the assignee or
subtenant intends to use the Premises (or a portion thereof) is not in keeping
with Landlord's standards for the Buildings or are in violation of the terms any
other leases in the Project, or (v) the proposed assignment is for less than the
entire Premises or for less than the remaining Term of the Lease. The foregoing
shall not exclude any other reasonable bases for Landlord to withhold its
consent.

C. Procedure. Tenant shall notify Landlord of any proposed assignment or
sublease at least thirty (30) days prior to its proposed effective date. The
notice shall include the name and address of the proposed assignee or subtenant,
its corporate affiliates in the case of a corporation and its partners in a case
of a partnership, an execution copy of the proposed assignment or sublease, and
sufficient information to permit Landlord to determine the financial
responsibility and character of the proposed assignee or subtenant. As a
condition to any effective assignment of this Lease, the assignee shall execute
and deliver in form satisfactory to Landlord at least fifteen (15) days prior to
the effective date of the assignment, an assumption of all of the obligations of
Tenant under this Lease. As a condition to any effective sublease, subtenant
shall execute and deliver in form satisfactory to Landlord at least fifteen (15)
days prior to the effective date of the sublease, an agreement to comply with
all of Tenant's obligations under this Lease, and at Landlord's option, an
agreement to attorn to Landlord (except for the economic obligations which
subtenant will undertake directly to Tenant) under the terms of the sublease in
the event this Lease terminates before the sublease expires.

D. Tenant Affiliate or Successor by Merger. Notwithstanding anything in this
Section 17 to the contrary, Tenant may assign this Lease, or sublease all or any
part of the Premises, without Landlord's consent, to an affiliate (as defined in
Section 26C, below) of Tenant, or, so long as the net worth and financial
responsibility of any such successor entity is equal to or greater than that of
Tenant as of the date of this Lease, to any corporation or other entity
resulting from the reorganization, merger of or consolidation with Tenant. In
that case, the Tenant affiliate or successor entity shall assume in writing all
of Tenants obligations under this Lease. Tenant shall provide Landlord with a
final execution copy of the assignment or sublease as soon as practicable, but
in no event later than thirty (30) days after the effective date thereof. In
addition, no transfer, sale, or other disposition of the stock of Tenant
occurring in connection with or as result of a private or public offering or
placement of Tenant's stock, the principal purpose of which is to raise capital
for Tenant and not to effect a change in control of Tenant, shall be deemed an
assignment of this Lease or otherwise require Landlord's consent.

18. CONVEYANCE BY LANDLORD.

If Landlord shall at any time transfer its interest in the Project or this
Lease, Landlord shall be released of any obligations occurring after such
transfer, except the obligation to return to Tenant any security deposit not
delivered to its transferee, and Tenant shall look solely to Landlord's
successors for performance of such obligations. This Lease shall not be affected
by any such transfer.

19. ESTOPPEL CERTIFICATE.

Each party shall, within ten (10) days of receiving a request from the other
party, execute, acknowledge in recordable form, and deliver to the other party
or its designee a certificate stating, subject to a specific statement of any
applicable exceptions, that the Lease as amended to date is in full force and
effect, that the Tenant is paying Rent and other charges on a current basis, and
that to the best of the knowledge of the certifying party, the other party has
committed no uncured defaults and has no offsets or claims. The certifying party
may also be required to state the date of commencement of payment of Rent, the
Commencement Date, the Termination Date, the Base Rent, the current Operating
Cost Share Rent and Tax Share Rent estimates, the status of any improvements
required to be completed by Landlord, the amount of any security deposit, and
such other matters as may be reasonably requested. Failure to deliver such
statement within the time required shall be conclusive evidence against the
non-certifying party that this Lease, with any amendments identified by the
requesting party, is in full force and effect, that there are no uncured
defaults by the requesting party, that not more than one month's Rent has been
paid in advance, that the non-certifying party has not paid any security
deposit, and that the non-certifying party has no claims or offsets against the
requesting party.

20. SECURITY DEPOSIT.

Upon the later of (a) the date that Landlord delivers possession of the Premises
to Tenant pursuant to Appendix C, or (b) August 1, 2005, Tenant shall deposit
with Landlord security (the "Security Deposit") in the amount of One Million
Dollars ($1,000,000.00), which security shall be in the form of an unconditional
and irrevocable letter of credit (the "Letter of Credit") (i) in form and
substance reasonably satisfactory to Landlord, (ii) naming Landlord as
beneficiary, (iii) expressly allowing Landlord to draw upon it at any time from
time to time by delivering to the issuer notice that Landlord is entitled to
draw thereunder, (iv) drawable on an FDIC-insured financial institution
reasonably satisfactory to Landlord, and (v) redeemable in the state of
Landlord's choice. In addition, no later than fifteen (15) days following the
Commencement Date, Tenant shall deposit with Landlord an additional Security
Deposit in an amount equal to fifty percent (50%) of any portion of the
Additional Landlord's Contribution Tenant elects to receive pursuant to Section
4 of Appendix C hereto. Such additional Security Deposit shall also be in the
form of an unconditional and irrevocable Letter of Credit meeting the
requirements of items (i) through (v) of the first sentence of this Section 20.

If Tenant does not provide Landlord with a substitute or substitutes for such
Letter(s) of Credit complying with all of the requirements hereof at least
thirty (30) days before the stated expiration date of the current Letter(s) of
Credit then, upon five (5) business days' notice to Tenant, Landlord shall have
the right to draw upon the current Letter(s) of Credit and hold the funds drawn
as the Security Deposit.

On the last day of the calendar year during which the twelfth (12th) month of
the Lease term occurs, and on the last day of each of the four calendar years
thereafter, and provided that Tenant shall not be in default under the terms of
this Lease, Landlord agrees to reduce the amount of the Letter of Credit by One
Hundred Forty-two Thousand Eight Hundred Fifty-seven Dollars ($142,857.00), as
illustrated by the following table:

 

Example

Periods

Required Letter of Credit Balance

If Commencement Date occurs between 02/01/06 and 12/31/06

Required deposit date of Letter of Credit - 12/30/07

$ 1,000,000

 

12/31/07 - 12/30/08

$ 857,143

 

12/31/08 - 12/30/09

$ 714,286

12/31/09 - 12/30/10

$ 571,429

 

12/31/10 - 12/30/11

$ 428,572

 

12/31/11 - 12/30/12

$ 285,715

 

In addition, and provided that Tenant shall not be in default hereunder and
shall, at least thirty (30) days prior to the expiration of the 72nd month of
the Lease term, deliver cash to Landlord in the amount of One Hundred Sixty-one
Thousand Eight Hundred Twenty-seven and 26/100 Dollars ($161,827.26) as a
replacement Security Deposit Landlord agrees that the Letter of Credit shall be
released in its entirety at the expiration of the 72nd month of the Lease term.

If Tenant defaults under this Lease and such default is not cured within the
applicable cure period, Landlord may use any part of the Security Deposit to pay
or perform any obligation of Tenant under this Lease, or to compensate Landlord
for any loss or damage resulting from any default. To the extent any portion of
the deposit is used, Tenant shall within five (5) days after demand from
Landlord restore the deposit to its full amount. Landlord may keep the Security
Deposit in its general funds and shall not be required to pay interest to Tenant
on the deposit amount. If Tenant shall perform all of its obligations under this
Lease and return the Premises to Landlord at the end of the Term, Landlord shall
return all of the remaining Security Deposit to Tenant within thirty (30) days
after the end of the Term. The Security Deposit shall not serve as an advance
payment of Rent or a measure of Landlord's damages for any default under this
Lease.

If Landlord transfers its interest in the Project or this Lease, Landlord may
transfer the Security Deposit to its transferee. Upon such transfer, Landlord
shall have no further obligation to return the Security Deposit to Tenant, and
Tenant's right to the return of the Security Deposit shall apply solely against
Landlord's transferee.

21. FORCE MAJEURE.

Landlord shall not be in default under this Lease to the extent Landlord is
unable to perform any of its obligations on account of any strike or labor
problem, energy shortage, governmental pre-emption or prescription, national
emergency, or any other cause of any kind beyond the reasonable control of
Landlord ("Force Majeure").

22. TENANT'S PERSONAL PROPERTY AND FIXTURES.

Landlord hereby waives any statutory or common law landlord's lien or other lien
or any other interest whatsoever in any item personal property owned by Tenant,
or any portion thereof or interest therein, located in the Building, the
Premises or elsewhere.

23. NOTICES.

All notices, consents, approvals and similar communications to be given by one
party to the other under this Lease, shall be given in writing, mailed or
personally delivered as follows:

A. Landlord. To Landlord as follows:

CarrAmerica Realty Operating Partnership. L.P.

10735 Willows Road NE, Suite 100

Redmond, WA 98052

Attn: Market Managing Director

with a copy to:

CarrAmerica Realty Corporation

1850 K Street, NW

Suite 500

Washington, D.C. 20006

Attn: Legal Department

or to such other person at such other address as Landlord may designate by
notice to Tenant.

B. Tenant. To Tenant as follows:

Pre-Occupancy Address: A copy each to the attention of the CFO and the Director,
Facilities at the following addresses:

By Delivery

:

19910 North Creek Parkway

Bothell, Washington 98011

For Mail:

P.O. Box 3008

Bothell

98041-3008

With a copy to the attention of General Counsel at the same addresses.

 

 

Post-Occupancy Address: A copy each to the attention of the CFO and the
Director, Facilities at the following address:

Microvision, Inc.

6222 - 185th Avenue NE,

Redmond, WA 98052

With a copy to the attention of General Counsel at the same addresses.

or to such other person at such other address as Tenant may designate by notice
to Landlord.

Mailed notices shall be sent by United States certified or registered mail, or
by a reputable national overnight courier service, postage prepaid. Mailed
notices shall be deemed to have been given on the earlier of actual delivery or
three (3) business days after posting in the United States mail in the case of
registered or certified mail, and one business day in the case of overnight
courier.

24. QUIET POSSESSION.

So long as Tenant shall perform all of its obligations under this Lease, Tenant
shall enjoy peaceful and quiet possession of the Premises against any party
claiming through the Landlord.

25. REAL ESTATE BROKER.

Each party represents to the other party that it has not dealt with any real
estate broker with respect to this Lease except for any broker(s) listed in the
Schedule, and no other broker is in any way entitled to any broker's fee or
other payment in connection with this Lease. Landlord is solely responsible for
any commissions or other payments due to the real estate brokers listed in the
Schedule. Each party shall indemnify and defend the other party against any
claims by any other broker or third party for any payment of any kind for a
breach of the representations in this Section 25.

26. MISCELLANEOUS.

A. Successors and Assigns. Subject to the limits on Tenant's assignment
contained in Section 17, the provisions of this Lease shall be binding upon and
inure to the benefit of all successors and assigns of Landlord and Tenant.

B. Date Payments Are Due. Except for payments to be made by Tenant under this
Lease which are due upon demand, in advance (such as Base Rent), or on some
other stated due date in this lease, Tenant shall pay to Landlord any amount for
which Landlord renders a statement of account within the later of (i) twenty
(20) days after receipt of such statement, or (ii) the date that the next Base
Rent payment is due.

C. Meaning of "Landlord", "Re-Entry, "including" and "Affiliate". The term
"Landlord" means only the owner of the Project and the lessor's interest in this
Lease from time to time. The words "re-entry" and "re-enter" are not restricted
to their technical legal meaning. The words "including" and similar words shall
mean "without limitation." The word "affiliate" shall mean a person or entity
controlling, controlled by or under common control with the applicable entity.
"Control" shall mean the power directly or indirectly, by contract or otherwise,
to direct the management and policies of the applicable entity.

D. Time of the Essence. Time is of the essence of each provision of this Lease.

E. No Option. This document shall not be effective for any purpose until it has
been executed and delivered by both parties; execution and delivery by one party
shall not create any option or other right in the other party.

F. Severability. The unenforceability of any provision of this Lease shall not
affect any other provision.

G. Governing Law. This Lease shall be governed in all respects by the laws of
the state in which the Project is located, without regard to the principles of
conflicts of laws.

H. Intentionally Omitted.

I. No Oral Modification. No modification of this Lease shall be effective unless
it is a written modification signed by both parties.

J. Landlord's Right to Cure. Following the expiration of any applicable cure
period (except in an emergency), Landlord may cure any default by Tenant; any
expenses incurred shall become Additional Rent due from Tenant on demand by
Landlord.

K. Captions. The captions used in this Lease shall have no effect on the
construction of this Lease.

L. Authority. Landlord and Tenant each represents to the other that it has full
power and authority to execute and perform this Lease.

M. Landlord's Enforcement of Remedies. Landlord may enforce any of its remedies
under this Lease either in its own name or through an agent.

N. Entire Agreement. This Lease, together with all Appendices and Addendum 1
hereto, constitutes the entire agreement between the parties. No representations
or agreements of any kind have been made by either party which are not contained
in this Lease.

O. Landlord's Title. Landlord's title shall always be paramount to the interest
of the Tenant, and nothing in this Lease shall empower Tenant to do anything
which might in any way impair Landlord's title.

P. Light and Air Rights. Landlord does not grant in this Lease any rights to
light and air in connection with Project. Landlord reserves to itself, the Land,
the Buildings below the improved floor of each floor of the Premises, the
Buildings above the ceiling of each floor of the Premises, the exterior of the
Premises and the areas on the same floor outside the Premises, along with the
areas within the Premises required for the installation and repair of utility
lines and other items required to serve other tenants of the Buildings.

Q. Singular and Plural. Wherever appropriate in this Lease, a singular term
shall be construed to mean the plural where necessary, and a plural term the
singular. For example, if at any time two parties shall constitute Landlord or
Tenant, then the relevant term shall refer to both parties together.

R. No Recording by Tenant. Tenant shall not record in any public records any
memorandum or any portion of this Lease.

S. Exclusivity. Landlord does not grant to Tenant in this Lease any exclusive
right except the right to occupy its Premises.

T. No Construction Against Drafting Party. The rule of construction that
ambiguities are resolved against the drafting party shall not apply to this
Lease.

U. Survival. All obligations of Landlord and Tenant under this Lease that may
reasonably be interpreted as intending to survive shall survive the termination
of this Lease.

V. Rent Not Based on Income. No rent or other payment in respect of the Premises
shall be based in any way upon net income or profits from the Premises. Tenant
may not enter into or permit any sublease or license or other agreement in
connection with the Premises which provides for a rental or other payment based
on net income or profit.

W. Building Manager and Service Providers. Landlord may perform any of its
obligations under this Lease through its employees or third parties hired by the
Landlord.

X. Late Charge and Interest on Late Payments. Without limiting the provisions of
Section 12A, if Tenant fails to pay any installment of Rent or other charge to
be paid by Tenant pursuant to this Lease within five (5) business days after the
same becomes due and payable, then Tenant shall pay a late charge equal to the
greater of three percent (3%) of the amount of such payment or $250. In
addition, interest shall be paid by Tenant to Landlord on any payments of Rent
made after the expiration of 5 days following the date due until paid at the
rate provided in Section 2D(2). Such late charge and interest shall constitute
Additional Rent due and payable by Tenant to Landlord upon the date of payment
of the delinquent payment referenced above.

Y. Landlord's Representations and Warranties. Landlord represents and warrants
to Tenant to Tenant that as of the date of delivery of the Premises to Tenant,
the building systems serving the Premises shall be in good working order and
condition. Landlord further represents to Tenant, to the best of Landlord's
knowledge, that as of the date of delivery of the Premises to Tenant, the
Premises shall be in the condition and shall contain the equipment described in
Appendix G hereto.

Z. Parking. Landlord shall maintain a parking ratio of three (3) parking spaces
per 1,000 rentable square feet of Premises area in the parking area serving the
Premises, and Tenant's parking allowance shall consist of three (3) parking
spaces per 1000 rentable square feet of Premises area.

27. UNRELATED BUSINESS INCOME. If Landlord is advised by its counsel at any time
that any part of the payments by Tenant to Landlord under this Lease may be
characterized as unrelated business income under the United States Internal
Revenue Code and its regulations, then Tenant shall enter into any amendment
proposed by Landlord to avoid such income, so long as the amendment does not
require Tenant to make more payments or accept fewer services from Landlord,
than this Lease provides.

28. HAZARDOUS SUBSTANCES.

Tenant shall not cause or permit any Hazardous Substances to be brought upon,
produced, stored, used, discharged or disposed of in or near the Project, except
such Hazardous Substances that are typical in Tenant's business and that are at
all times used, kept and stored and disposed of in compliance with applicable
Governmental Requirements. "Hazardous Substances" include those hazardous
substances described in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et
seq., any other applicable federal, state or local law, and the regulations
adopted under these laws. "Hazardous substance" specifically includes but is not
restricted to asbestos, polychlorobiphenyls ("PCBs") and petroleum. Landlord
consents to Tenant's use and storage on the Premises of reasonable quantities of
substances and cleaning supplies normally found in office environments and
reasonable quantities of diesel fuel to be used in connection with or contained
in Tenant's emergency generator (if any), provided that all of the same shall be
used, stored and disposed of in compliance with all applicable Governmental
Requirements. If any lender or governmental agency believes that Tenant's use of
the Premises has caused contamination by Hazardous Substances and shall require
testing for Hazardous Substances in the Premises, Tenant shall pay for such
testing.

A. Landlord represents and warrants to Tenant, to the best of Landlord's
knowledge and belief, that the Premises, Buildings and Project are free of the
presence of Hazardous Substances in reportable quantities as of the date of this
Lease, except for those materials typically used, in compliance with applicable
laws and regulations, in the construction industry and for those substances and
cleaning supplies normally found in office environments. Landlord shall defend,
indemnify and hold Tenant and its officers, agents and employees harmless from
and against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs, or expenses (including without limitation reasonable attorney
and reasonable consultant fees, court costs and litigation expenses) of whatever
kind or nature, arising out of the presence, disposal, or release of any
Hazardous Substance arising out of or related to (a) Hazardous Substances
located in the Premises, the Buildings or the Project as of the date of this
Lease or released onto the Premises or the Project by Landlord or its agents or
employees hereafter; (b) Landlord's negligence or willful misconduct, or that of
its agents, employees, or contractors; and/or (c) any breach of Landlord's
representation and warranty regarding Hazardous Substances herein and any
violation by Landlord of any law applicable thereto.

B. Tenant shall defend, indemnify, and hold Landlord and its officers, agents,
employees, and property manager harmless from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs, or expenses
(including, without limitation, reasonable attorney fees and reasonable
consultant fees, court costs and litigation expenses) of whatever kind or
nature, arising out of or in any way related to the presence, disposal, release
or threatened release of any Hazardous Substances arising out of or related to
(a) all Hazardous Substances placed, disposed or released on the Premises or the
Project by Tenant, its agents, employees, contractors, or invitees; (b) Tenant's
negligence or willful misconduct, or that of its agents, employees, contractors,
or invitees; and/or (c) Tenant's violation of any law or breach of Tenant's
obligations under this Lease applicable to Hazardous Substances.

29. EXCULPATION.

Landlord shall have no personal liability under this Lease; its liability shall
be limited to its interest in the Project, and shall not extend to any other
property or assets of the Landlord. In no event shall any officer, director,
employee, agent, shareholder, partner, member or beneficiary of Landlord be
personally liable for any of Landlord's obligations hereunder.

30. RIGHT OF FIRST OFFER.

Subject to Subsection B below, and the right of Landlord to extend the Lease
and/or expand the Premises area of any current tenant in the Building, Landlord
hereby grants to Tenant for the term of the Lease a right of first offer for any
space that becomes available for lease in Building C (collectively, the "ROFO
Space"), to be exercised in accordance with Subsection A below.

A. If any ROFO Space becomes available for lease to anyone other than a Prior
Tenant, and provided that at least 24 months shall be remaining on the term of
Tenant's Lease at the time such ROFO space becomes available, Landlord shall so
notify Tenant ("Landlord's ROFO Notice") identifying the available ROFO Space
(the "Subject ROFO Space"). Landlord's ROFO Notice may be given up to twelve
(12) months in advance of such availability and shall contain the terms upon
which Landlord intends to offer the Subject ROFO Space for lease to the market.
Tenant shall notify Landlord within fifteen (15) business days of receipt of
Landlord's ROFO Notice whether it desires to lease the Subject ROFO Space on the
terms set forth in Landlord's ROFO Notice. If Tenant does not notify Landlord
within said 15 business-day period that it will lease the Subject ROFO Space,
Tenant shall be deemed to have refused the Subject ROFO Space. After any
refusal, Tenant shall have no further right of first offer for such Subject ROFO
Space and Landlord shall be free to lease such space to any party for any term
and upon any terms it desires; provided, however, that in the event that
Landlord shall have failed to enter into a letter of intent to lease the Subject
ROFO Space to a third party within ninety (90) days following any refusal by
Tenant, Landlord shall not lease the Subject ROFO Space to any third party
without again offering the Subject ROFO Space to Tenant, pursuant to the terms
hereof. In addition, Landlord shall not lease the Subject ROFO space on terms
which are materially more favorable to the third party than those set forth in
Landlord's ROFO Notice, without again offering the Subject ROFO Space to Tenant,
pursuant to the terms hereof. As used herein, "materially more favorable" shall
mean essential economic terms, including Base Rent, any rent concessions and any
tenant improvement allowance or obligation, which, taken as a whole, are more
favorable to the third party than those set forth in Landlord's ROFO Notice by
more than ten percent (10%). If Tenant exercises its right of first offer with
respect to the Subject ROFO Space, such space shall be added to the Premises for
all purposes of this lease for the remaining Term of the Lease on (a) the terms
specified in Landlord's ROFO Notice, and (b) the terms of this Lease to the
extent that they do not conflict with the terms specified in Landlord's ROFO
Notice, except that the terms of Landlord's ROFO Notice shall not apply during
any Renewal Term, and instead, the terms of the Lease applying to the remainder
of the Premises during the Renewal Term shall also apply to the Subject ROFO
Space.

B. Tenant's right of first offer is subject to the condition that: (i) on the
date that Tenant delivers its notice exercising its right of first offer, Tenant
is not in default under this Lease, and (ii) except for an assignment or
sublease to (a) a subsidiary, affiliate, parent or other entity which controls,
is controlled by, or is under common control with, Tenant; (b) a successor
entity related to Tenant by merger, consolidation, non-bankruptcy
reorganization, or government action; (c) a purchaser of substantially all of
Tenant's assets in the Premises; or (d) a joint venture in which Tenant is a
general partner, Tenant shall not have assigned the Lease or sublet all of the
Premises under a sublease which is in effect at any time during the period
commencing with Tenant's delivery of its notice and ending on the date the ROFO
Space is added to the Premises.

C. Promptly after Tenant's exercise of its right of first offer, Landlord shall
execute and deliver to Tenant an amendment to the Lease to reflect changes in
the Premises, Base Rent, Tenant's Proportionate Share and any other appropriate
terms changed by the addition of the ROFO Space. Within 20 days thereafter,
Tenant shall execute and return the amendment.

31. TENANT'S CONFIDENTIAL INFORMATION. Landlord recognizes that it is imperative
that Tenant's Confidential Information, as hereafter defined, remain
confidential, subject to the terms hereof. For purposes hereof, "Confidential
Information" means any non-public information observed or otherwise obtained by
any employee of Landlord while performing work in or inspecting the Premises, or
any non-public information otherwise provided by Tenant to Landlord that Tenant
designates as confidential or proprietary; provided, however, that Confidential
Information shall not include any information required to be provided by Tenant
to Landlord pursuant to the terms of this Lease. Confidential Information may be
communicated by any method and in any form, including but not limited to,
written, oral or visual.

A. Preservation of Confidentiality. Except as may be required by any applicable
Governmental Requirements, and except in the context of any litigation between
the parties or any other action reasonably taken by Landlord to enforce its
rights or Tenant's obligations under this Lease, Landlord agrees (a) not to
disclose, or otherwise reveal, without Tenant's prior written consent, any
portion of any Confidential Information or any notes, extracts, or summaries of
such Confidential Information obtained by Landlord, (b) not to use Confidential
Information for personal gain or to advance or support Landlord's business
operations or those of third parties, and (c) upon discovery of any unauthorized
disclosure, to use reasonable efforts to prevent further disclosure or use
thereof, and to notify Tenant immediately. Landlord's obligations under this
Section 31 shall survive the expiration or sooner termination of this Lease.

B. Equitable Remedies. Landlord acknowledges that Tenant's Confidential
Information is of a special and unique character and nature, and that a breach
of Landlord's obligations under this Section 31 could cause irreparable damage
and injury to Tenant. Accordingly, Landlord agrees that upon Landlord's breach
of the provisions of this Section 31, Tenant shall be entitled to injunctive
and/or other appropriate equitable relief, without the need for posting any bond
or comparable security. Landlord agrees not to assert the claim or defense in
any equitable action that Tenant has an adequate remedy at law or in damages,
all without affecting Tenant's right to make a claim against Landlord for any
damages it may suffer as a result of Landlord's breach of its obligations under
this Section 31.

IN WITNESS WHEREOF, the parties hereto have executed this Lease.

LANDLORD:

CarrAmerica Realty Operating Partnership, L.P.,

A Delaware limited partnership

By: CarrAmerica Realty Corporation,

a Maryland corporation, its general partner

 

By:

Print Name:

Print Title:

 

TENANT:

Microvision, Inc.,

a Delaware corporation

 

By: _______________________

Print Name: ______________________

Print Title: _______________________

STATE OF WASHINGTON )

)ss.

County of K I N G )

 

I certify that I know or have satisfactory evidence that is the person who
appeared before me, and said person acknowledged that ___ signed this
instrument, on oath stated that ___ was authorized to execute this instrument
and acknowledged it as the of CarrAmerica Realty Corporation, a Maryland
corporation, to be the free and voluntary act of such party for the uses and
purposes mentioned in the instrument.

Dated: ______________________

____________________

____________________

(Print name)

Notary public in and for the State of Washington,
residing at _______________________

My commission expires: ___________________________

 

STATE OF )

) ss.

COUNTY OF )

On this _______ day of _________________, 200__, before me, the undersigned, a
Notary Public in and for the State of ___________, duly commissioned and sworn
as such, personally appeared __________________________________, to me known to
be the _______________ of Microvision, Inc., the corporation that executed the
within and foregoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said corporation for the uses and purposes
therein mentioned, and on oath stated that he/she was authorized to execute said
instrument, and that the seal affixed is the corporate seal of said corporation.

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

___________________________

Printed Name: __________________________

NOTARY PUBLIC in and for the State of ________________,
residing at _______________________

My commission expires: ___________________________

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APPENDIX A

PLAN OF THE PREMISES

 

(attach floor plan depicting the Premises)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX A-2

EMERGENCY GENERATOR LOCATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX B

RULES AND REGULATIONS

 

1. Tenant shall not place anything, or allow anything to be placed near the
glass of any window, door, partition or wall which may, in Landlord's judgment,
appear unsightly from outside of the Project.

2. The Project directory shall be available to Tenant solely to display names
and their location in the Project, which display shall be as directed by
Landlord.

3. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by Tenant or used by Tenant for any purposes other than
for ingress to and egress from the Premises. Tenant shall lend its full
cooperation to keep such areas free from all obstruction and in a clean and
sightly condition and shall move all supplies, furniture and equipment as soon
as received directly to the Premises and move all such items and waste being
taken from the Premises (other than waste customarily removed by employees of
the Building) directly to the shipping platform at or about the time arranged
for removal therefrom. The halls, passages, exits, entrances, elevators,
stairways, balconies and roof are not for the use of the general public and
Landlord shall, in all cases, retain the right to control and prevent access
thereto by all persons whose presence in the judgment of Landlord, reasonably
exercised, shall be prejudicial to the safety, character, reputation and
interests of the Project. Neither Tenant nor any employee or invitee of Tenant
shall go upon the roof of the Project.

4. The toilet rooms, urinals, wash bowls and other apparatuses shall not be used
for any purposes other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein, and to the extent
caused by Tenant or its employees or invitees, the expense of any breakage or
damage resulting from the violation of this rule shall be borne by Tenant.

5. Tenant shall not cause any unnecessary janitorial labor or services by reason
of Tenant's carelessness or indifference in the preservation of good order and
cleanliness.

6. Except as provided in the Initial Improvements approved by Landlord, Tenant
shall not install or operate any refrigerating (other than refrigerators
designed for home use to be used for employee meals, snacks, etc., or otherwise
in connection with Tenant's permitted use of the Premises), heating or air
conditioning apparatus, or carry on any mechanical business without the prior
written consent of Landlord; or use the Premises for housing, lodging or
sleeping purposes.

7. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord or contemplated by the Initial Improvements.

8. Landlord shall have sole power to direct electricians as to where and how
telephone and other wires are to be introduced. No boring or cutting for wires
is to be allowed without the consent of Landlord. The location of telephones,
call boxes and other office equipment affixed to the Premises shall be subject
to the approval of Landlord.

9. No additional locks shall be placed upon any doors, windows or transoms in or
to the Premises except Tenant installed security systems as approved by
Landlord. Tenant shall not change existing locks or the mechanism thereof
without providing keys or key cards for use by Landlord for approved access.
Upon termination of the lease, Tenant shall deliver to Landlord all keys and
passes for offices, rooms, parking lot and toilet rooms which shall have been
furnished Tenant.

In the event of the loss of keys so furnished, Tenant shall pay Landlord
therefor. Tenant shall not make, or cause to be made, any such keys and shall
order all such keys solely from Landlord and shall pay Landlord for any keys in
addition to the two sets of keys originally furnished by Landlord for each lock.

10. Subject to approved Tenant Improvement plans, Tenant shall not install
linoleum, tile, carpet or other floor covering so that the same shall be affixed
to the floor of the Premises in any manner except as approved by Landlord.

11. In Buildings where Tenant is not the sole tenant, no furniture, packages,
supplies, equipment or merchandise will be received in the Project or carried up
or down in the freight elevator, except between such hours and in such freight
elevator as shall be designated by Landlord. Tenant shall not take or permit to
be taken in or out of other entrances of the Buildings, or take or permit on
other elevators, any item normally taken in or out through the trucking
concourse or service doors or in or on freight elevators.

12. Tenant shall cause all doors to the Premises to be closed and securely
locked before leaving the Project at the end of the day, and shall turn off all
unnecessary utilities, lights and machines before leaving the Project at the end
of the day, to the extent reasonably required to avoid undue waste of
electricity.

13. Without the prior written consent of Landlord, Tenant shall not use the name
of the Project or any picture of the Project in connection with, or in promoting
or advertising the business of, Tenant, except Tenant may use the address of the
Project as the address of its business.

14. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Premises' or the Project's heating and air conditioning, and
shall refrain from attempting to adjust any controls, other than controls for
its Premises. Tenant shall keep corridor doors closed.

15. Tenant assumes full responsibility for protecting the Premises from theft,
robbery, and pilferage, which may arise from a cause other than negligence,
which includes keeping doors locked and other means of entry to the Premises
closed and secured.

16. Peddlers, solicitors and beggars shall be reported to the office of the
Project or as Landlord otherwise requests.

17. Tenant shall not advertise the business, profession or activities of Tenant
conducted in the Project in any manner which violates the letter or spirit of
any code of ethics adopted by any recognized association or organization
pertaining to such business, profession or activities.

18. No vehicle (other than bicycles stored in locations approved in advance by
Landlord) and no animals or pets shall be allowed in the Premises, halls,
freight docks, or any other parts of the Buildings except that impaired persons
may be accompanied by assist animals. Tenant shall not make or permit any noise,
vibration or odor to emanate from the Premises, or do anything therein tending
to create, or maintain, a nuisance, or do any act tending to injure the
reputation of the Buildings.

19. Tenant acknowledges that Building security problems may occur which may
require the employment of extreme security measures in the day-to-day operation
of the Project.

Accordingly:

(a) Landlord may, at any time, or from time to time, or for regularly scheduled
time periods, as deemed advisable by Landlord and/or its agents, in their sole
discretion, require that persons entering or leaving the Project or the Property
identify themselves to watchmen or other employees designated by Landlord, by
registration, identification or otherwise.

(b) Tenant agrees that it and its employees will cooperate fully with Project
employees in the implementation of any and all security procedures.

(c) Such security measures shall be the sole responsibility of Landlord, and
Tenant shall have no liability for any action taken by Landlord in connection
therewith, it being understood that Landlord is not required to provide any
security procedures and shall have no liability for such security procedures or
the lack thereof.

20. Tenant shall not do or permit the manufacture, sale, purchase or use of any
fermented, intoxicating or alcoholic beverages without obtaining written consent
of Landlord.

21. Tenant shall not disturb the quiet enjoyment of any other tenant.

22. Tenant shall not provide any janitorial services or cleaning without
Landlord's written consent and then only subject to supervision of Landlord and
at Tenant's sole responsibility and by janitor or cleaning contractor or
employees at all times satisfactory to Landlord.

23. Intentionally Omitted.

24. No equipment, mechanical ventilators, awnings, special shades or other forms
of window covering shall be permitted either inside or outside the windows of
the Premises without the prior written consent of Landlord, and then only at the
expense and risk of Tenant, and they shall be of such shape, color, material,
quality, design and make as may be approved by Landlord.

25. Tenant shall not during the term of this Lease canvas or solicit other
tenants of the Buildings for any purpose.

26. Tenant shall not operate any electrical device from which emanates
electrical waves which interfere with or impair radio or television broadcasting
or reception from or in the Buildings or elsewhere, without in each instance the
prior written approval of Landlord. In the event of any such interference,
Tenant shall take reasonable steps to eliminate the interference. The use
thereof, if permitted, shall be subject to reasonable control by Landlord to the
end that others shall not be disturbed.

27. Tenant shall promptly remove all rubbish and waste from the Premises.

28. Tenant shall not exhibit, sell or offer for sale, Rent or exchange in the
Premises or at the Project any article, thing or service, except those
ordinarily embraced within the use of the Premises specified in Section 6 of
this Lease, without the prior written consent of Landlord.

29. Intentionally Omitted.

30. Tenant shall not overload any floors in the Premises or any public corridors
or elevators in the Buildings.

31. Tenant shall not do any painting or mark, paint, cut or drill into, drive
nails or screws into any portion of the Buildings outside of the Premises, or in
any way deface any part of the Premises or the Buildings, outside or inside,
without the prior written consent of Landlord.

32. Whenever Landlord's consent, approval or satisfaction is required under
these Rules, then unless otherwise stated, any such consent, approval or
satisfaction must be obtained in advance, such consent or approval may be
granted or withheld in Landlord's sole discretion, and Landlord's satisfaction
shall be determined in its sole judgment.

33. Tenant and its employees shall cooperate in all fire drills conducted by
Landlord in the Buildings.

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APPENDIX C

TENANT IMPROVEMENT AGREEMENT

Tenant shall improve the Premises in accordance with plans and specifications
approved by Landlord (the "Plans"), which approval shall not be unreasonably
withheld (such improvements are referred to herein as the "Initial
Improvements"). Tenant shall perform the Initial Improvements at its own cost,
subject to the Landlord's Contribution (hereinafter defined) and the Additional
Landlord's Contribution (hereinafter defined). Tenant shall cause the Plans to
be prepared, at Landlord's cost, by a registered professional architect, and
mechanical and electrical engineer(s). Such engineer(s) shall be approved in
advance by Landlord. Prior to the close of business on July 14, 2005, Tenant
shall deliver to Landlord for its approval, which approval will not be
unreasonably withheld, conditioned or delayed, Design Development Drawings
incorporating Tenant's initial plans for improvements to the Premises. Landlord
shall within seven (7) business days after receipt either provide comments to
such Plans or approve the same. Landlord shall be deemed to have approved such
Plans if it does not timely provide comments on such Plans. If Landlord provides
Tenant with comments to the initial draft of the Plans, Tenant shall provide
revised Plans to Landlord incorporating Landlord's comments within five (5)
business days after receipt of Landlord's comments. Landlord shall within five
(5) business days after receipt then either provide comments to such revised
Plans or approve such Plans. Landlord shall be deemed to have approved such
revised Plans if Landlord does not timely provide comments on such Plans. The
process described above shall be repeated, if necessary, until the Plans have
been finally approved by Landlord. The Initial Improvements shall be performed
by Unimark Construction, BN Builders, or any other contractor reasonably
acceptable to Landlord (the "Contractor"). Tenant hereby agrees that the Plans
for the Initial Improvements shall comply with all applicable Governmental
Requirements. Landlord's approval of any of the Plans (or any modifications or
changes thereto) shall not impose upon Landlord or its agents or representatives
any obligation with respect to the design of the Initial Improvements or the
compliance of such Initial Improvements or the Plans with applicable
Governmental Requirements.

As a condition of the Lease, Landlord has reviewed and approved the attached
Design Development Drawings June 7, 2005, as prepared by JPC Architects, subject
to review and approval of Mechanical and Electrical Drawings and engineering
specifications.

All Initial Improvements shall be insured under a construction property
insurance policy, insuring the replacement value from time to time of the
Initial Improvements. All Initial Improvements shall be constructed in a good
and workmanlike manner, and only good grades of material shall be used. All
Initial Improvements shall be performed in such a fashion and by such means as
necessary to maintain a professional work environment in the areas surrounding
the space to be improved. Tenant shall only use labor that will work in peace
and harmony with other contractors and workers serving the Building in
constructing the Initial Improvements. Tenant shall avoid actions which
interfere with or delay the activities of other contractors serving the Building
and other tenants. All Initial Improvements shall be performed in compliance
with Landlord's "Policies, Rules and Regulations for Construction Projects".
Tenant shall permit Landlord to observe and monitor all Initial Improvements.

2. CHANGE ORDERS. If Tenant shall require improvements ("Change Orders") to the
Premises in addition to or substitution for the Initial Improvements, Tenant
shall deliver to Landlord for its approval, which approval will not be
unreasonably withheld, conditioned or delayed, plans and specifications for such
Change Orders. Landlord shall within three (3) business days after receipt of
such initial draft of plans and specifications for the Change Orders (the
"Change Order Plans") either provide comments to such Change Order Plans or
approve the same, and Landlord's failure to respond within three (3) business
days after receipt of such initial draft shall be deemed approval. If Landlord
provides Tenant with comments to the initial draft of the Change Order Plans,
Tenant shall provide revised Change Order Plans to Landlord incorporating
Landlord's comments within three (3) business days after receipt of Landlord's
comments. Landlord shall then either provide comments to such revised Change
Order Plans or approve such Change Order Plans, and Landlord's failure to
respond within three (3) business days after receipt of such revised Change
Order Plans shall be deemed approval. The process described in the previous
sentence shall be repeated, if necessary, until the Change Order Plans have been
finally approved by Landlord. Tenant shall pay for all preparations and
revisions of the Change Order Plans and the construction of all Change Orders.

3. LANDLORD'S CONTRIBUTION. Landlord shall contribute an amount not to exceed
$26.50 per rentable square foot of Premises area, or $1,774,519.50 (the
"Landlord's Contribution") to be applied toward the following "Eligible
Expenses": (i) costs incurred by Tenant for construction of the Initial
Improvements and any Change Orders,(ii) project management / telecom /
relocation fees or expenses, (iii) data/telephone cabling and wireless systems,
(iv) security equipment (access control, alarm and close circuit TV) and
cabling, (v) Tenant's permitted interior or exterior signage and (vi) auxiliary
equipment such as supplemental HVAC. In addition, Landlord shall contribute
$1.50 per rentable square foot, or $100,444.50, toward the costs incurred by
Tenant for design development and construction drawings for the Initial
Improvements. In the event that the total cost of Tenant's design development
and construction drawing shall be less than $100,444.50, then the balance of
such amount may be applied by Tenant towards any Eligible Expense outlined in
this Paragraph 3 above. Landlord has no obligation to pay for costs of the
Initial Improvements or Change Orders in excess of Landlord's Contribution,
except as provided in Section 4, below.

Upon written request of Tenant (not more frequently than twice each month),
Landlord shall pay all or any portion of the Landlord's Contribution to Tenant,
as soon as practicable but in any event within thirty (30) days after receipt of
(a) invoices, (b) confirmation in writing (which may be by e-mail) from Tenant
that the invoices are correct and should be paid, (c) evidence reasonably
satisfactory to Landlord that the work covered by such invoices has been
completed in a satisfactory manner, (d) all necessary lien waivers and sworn
affidavits, (e) marked reproducible copies of the originally approved Plans
showing all substantial changes made in constructing the Initial Improvements
during such period from the Plans as originally approved, (f) all close-out
documentation set forth in Landlord's "Policies, Rules and Procedures for
Construction Projects" in effect at the execution of the Lease, and (g) such
other documentation as Landlord may reasonably require under the circumstances.
Tenant shall deliver reproducible as-built Plans to Landlord at the conclusion
of Initial Improvements.

4. ADDITIONAL LANDLORD'S CONTRIBUTION. In addition to the Landlord's
Contribution provided for in Section 3, above, Tenant may, by giving Landlord
written notice no later than the Commencement Date, elect to have Landlord pay
up to $8.00 per rentable square foot, or $535,704.00 (the "Additional Landlord's
Contribution") toward Tenant's costs incurred toward any Eligible Expense
outlined above and/or towards the cost of exterior painting or installation of a
covered walkway between the Buildings, as described in Section 7 below.

The Additional Landlord's Contribution will be separated into two (2) tiers of
expense categories, as outlined below:

 

Additional Landlord's Contribution - Tier 1

 

Up to $5.00 per RSF ($334,815), which may be used to fund any Eligible Expense
outlined above and/or to supplement the covered walkway allowance set forth in
Section 7, below.

 

Additional Landlord's Contribution - Tier 2

 

Up to $3.00 per RSF ($200,889), which may only be used to fund additional HVAC
capacity to support laboratory/manufacturing use.

In the event Tenant elects to receive all or a portion of the Additional
Landlord's Contribution as set forth herein, the Additional Landlord's
Contribution, together with interest at nine percent (9%) per annum, shall be
amortized over the primary Term of the Lease and paid by Tenant as additional
Base Rent; provided, however, that Tenant may pay to Landlord the entire
principal balance of the Additional Landlord's Contribution at any time without
penalty. In the event this Lease should be terminated for any reason prior to
its scheduled expiration date, the entire unpaid principal balance of the
Additional Landlord's Contribution, together with any unpaid interest, shall
immediately be due and payable on such earlier termination date. The Additional
Landlord's Contribution shall be paid by Landlord with, and in the manner
applicable to Landlord's Contribution, as provided in the second subparagraph of
Section 3, above.

5. ACCESS BY TENANT PRIOR TO COMMENCEMENT OF TERM. Landlord shall deliver
possession of the Premises to Tenant no later than three (3) days following the
date of mutual execution hereof, and Tenant and its agents and construction
contractor shall be permitted to enter the Premises from and after such date, at
no cost to Tenant (unless Tenant begins to operate its business from the
Premises prior to the Commencement Date in which event the terms of Section 3B
of the Lease shall apply), to perform the Initial Improvements and prepare the
Premises for Tenant's use and occupancy, including testing and installation of
Tenant's equipment. Any such permission shall constitute a license only,
conditioned upon Tenant's:

(a) working in harmony with Landlord and Landlord's agents, contractors,
workmen, mechanics and suppliers and with other tenants and occupants of the
Building;

(b) obtaining in advance Landlord's approval of the contractors proposed to be
used by Tenant and depositing with Landlord in advance of any work the
Contractor's affidavit for the proposed work and as necessary, from time to
time, waivers of lien from the Contractor and all subcontractors and suppliers
of material; and

(c) furnishing Landlord with the insurance required of Tenant and its
contractors pursuant to Section 8 of the Lease, and causing all other parties
entering the Project to perform the Initial Improvements to provide Landlord
with the same types, and amounts, of coverages required of Tenant and its
contractors in Section 8 of the Lease.

Landlord shall not be liable in any way for any injury, loss or damage which may
occur to any of Tenant's property or installations in the Premises prior to the
Commencement Date. Tenant shall protect, defend, indemnify and save harmless
Landlord from all liabilities, costs, damages, fees and expenses arising out of
the activities of Tenant or its agents, the Contractor, other contractors,
suppliers or workmen in the Premises or the Building. Any entry and occupation
permitted under this Appendix C shall be governed by Section 5 and all other
terms of the Lease.

6. MOVING ALLOWANCE. Landlord agrees to reimburse the actual, out-of-pocket
moving expenses incurred by Tenant, in an amount not to exceed $2.50 per
rentable square foot of Premises area, or $167,407.50 (the "Moving Allowance").
The Moving Allowance shall be eligible to cover the following costs: the
relocation, wiring and installation of telecommunications equipment and server
equipment; the relocation and installation of office furniture; installation of
data and telephone cabling; and the reasonable expenses associated with change
of address notification and new stationary (Tenant's "Moving Expenses"). All
invoices and documentation reasonably evidencing such Moving Expenses shall be
submitted to Landlord no later than sixty (60) days following the Commencement
Date, and Landlord shall reimburse such amounts from the Moving Allowance within
the later of thirty (30) days of receipt of such invoices and documentation or
the Commencement Date.

In the event that the total of Tenant's Moving Expenses shall be less than
$167,407.50, then the balance of the Moving Allowance may be applied by Tenant
towards any Eligible Expense outlined in Paragraph 3 above.

7. EXTERIOR IMPROVEMENTS. Subject to applicable City of Redmond and other
Governmental Requirements and the parties' mutual agreement as to the location,
and design, and plans and specifications therefor, Landlord shall construct a
covered walkway between the Buildings, and further shall repaint the covered
entrance awnings to the Buildings in a color mutually acceptable to Landlord and
Tenant (the "Exterior Improvements"). Landlord shall complete construction of
such Exterior Improvements no later than thirty (30) days prior to the
Commencement Date. Notwithstanding the foregoing, Landlord's total costs,
including architectural and permitting fees, for the Exterior Improvements shall
not exceed Twenty-five Thousand Dollars ($25,000.00), and in the event the
actual costs for such improvements exceed $25,000.00, the difference shall be
paid by Tenant to Landlord as Additional Rent no later than thirty (30) days
following the later of the Lease Commencement Date or Tenant's receipt of
Landlord's billing therefor.

8. DELAY OF COMMENCEMENT DATE. The Commencement Date shall be delayed by one (1)
day for each day of delay in substantial completion of the Initial Improvements
that is caused by a Landlord Delay. The term "Landlord Delay" shall mean any
delay in substantial completion of the Initial Improvements to the extent caused
by Landlord's negligence, willful misconduct, or breach of its obligations under
Section 9(c) of this Appendix C, or any other interruption in water or
electrical service to the Premises, provided that any such other interruption
was not scheduled or caused by Tenant, its agents, employees or contractors
during the course of construction.. Landlord shall further use commercially
reasonable efforts to avoid scheduling any non-emergency alterations or repairs
to the Building or Project that would materially interfere with Tenant's
construction activities. No Landlord Delay shall be deemed to have occurred
until and unless Tenant has provided written notice to Landlord specifying the
action or inaction that Tenant contends constitutes a Landlord Delay. If any
such action or inaction properly identified is not cured prior to the expiration
of the first business day following Landlord's receipt of such notice, then
notwithstanding the provisions of Section 13G and Section 21 of this Lease, a
Landlord Delay shall be deemed to have occurred commencing on the date such
notice is received and continuing for the number of days substantial completion
was in fact delayed as a result of such action or inaction so identified.

In addition, in the event that fire or other casualty causes delay in completion
of the Initial Improvements (including any delay associated with any restoration
of the Building(s) undertaken by Landlord pursuant to Section 9B of this Lease),
and provided that such fire or other casualty was not caused by the negligence
or willful misconduct of Tenant, its agents, employees, or contractors, then the
Commencement Date shall be delayed for the number of days that substantial
completion of the Initial Improvements was in fact delayed as a result of such
fire or other casualty; provided further, however, that no such delay due to
fire or other casualty shall be deemed to have commenced until the earlier of
the date that (a) Tenant has provided written notice to Landlord of the
occurrence and nature thereof, or (b) Landlord shall otherwise have received
actual notice of the occurrence of such fire or other casualty. Nothing
contained herein shall be deemed to affect either party's right to terminate
this Lease following fire or casualty if and to the extent permitted in Section
9A of this Lease.

9. MISCELLANEOUS.

(a) Terms used in this Appendix C shall have the meanings assigned to them in
the Lease. The terms of this Appendix C are subject to the terms of the Lease.

(b) Landlord shall receive no fee for supervision, profit, overhead or general
conditions in connection with the Initial Improvements.

(c) Neither Tenant nor the general contractor shall be charged for, and Landlord
shall provide, parking in areas reasonably designated by Landlord (to the extent
parking is available) for Tenant's architects, designers, contractors and
subcontractors (including those people working on the Tenant Improvements),
electricity, water, toilet facilities, HVAC, and elevators during the
construction and move in periods. All such equipment, areas, elevators and
utilities shall be made reasonably available to the Contractor and the
subcontractors during such time; provided, however, that Landlord shall not be
liable to Tenant or its contractor(s) for, nor shall any Landlord Delay result
from, any interruption in water service or any power outages scheduled or caused
by Tenant, its agents, employees or contractors during the course of
construction.

(d) Notwithstanding anything contained in the Lease to the contrary, Landlord
shall pay for all utilities to the Premises for the time period beginning on the
date Landlord delivers possession of the Premises to Tenant and ending on the
earlier of (i) the Commencement Date, or (ii) the date Tenant begins to do
business from the Premises.

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

APPENDIX D

MORTGAGES CURRENTLY AFFECTING THE PROJECT

[NONE]

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

APPENDIX E

COMMENCEMENT DATE CONFIRMATION

 

Landlord: CarrAmerica Realty Operating Partnership, L.P.,

a Delaware limited partnership

Tenant: Microvision, Inc., a Delaware corporation

This Commencement Date Confirmation is made by Landlord and Tenant pursuant to
that certain Lease dated as of _______________________, 2005 (the "Lease") for
certain premises located within Buildings B and C of Redmond Hilltop, Redmond,
Washington (the "Premises"). This Confirmation is made pursuant to Item 9 of the
Schedule to the Lease.

1. Lease Commencement Date, Termination Date. Landlord and Tenant hereby agree
that the Commencement Date of the Lease is _____________, 200___ and the
Termination Date of the Lease is _______________, _____.

2. Acceptance of Premises. Tenant has inspected the Premises and affirms that
the Premises is acceptable in all respects in its current "as is" condition
subject to the exceptions set forth in Section 3A of the Lease.

3. Incorporation. This Confirmation is incorporated into the Lease, and forms an
integral part thereof. This Confirmation shall be construed and interpreted in
accordance with the terms of the Lease for all purposes.

TENANT: LANDLORD:

MICROVISION, INC. CARRAMERICA REALTY OPERATING

a Delaware corporation PARTNERSHIP, L.P., a Delaware limited partnership

By:

Print Name: By: CARRAMERICA REALTY CORPORATION,

Title: a Maryland corporation, its general partner

 

By:

Print Name:

Print Title:

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

APPENDIX F

LEGAL DESCRIPTION

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

APPENDIX G

PREMISES CONDITION AND EQUIPMENT

 

Common Areas - Restrooms, exit stairs, lobby stairs, elevators and building
lobby are in a finished condition and in accordance with codes applicable at the
time of construction. Drinking fountains are located at the core of each
building. Electrical, telephone and janitorial closets exist in each building.
The main electrical service at Building B and Building C is rated at 1200 amps.
1.2 watts per square foot are available for lighting. 2.4 watts are available
for miscellaneous equipment load. The building mechanical system is designed
with one Variable Air Volume (VAV) zone per 938 rentable square feet. Building B
and Building C each contain the following exhaust fans:
 * (1) - 2,400 cfm restroom exhaust
 * (1) - 300 cfm elevator machine room exhaust
 * (1) - 200 cfm electrical room exhaust.

Building B contains one ten (10) ton supplemental air conditioning unit
available for Tenant's use. Building C contains three five (5) ton supplemental
air conditioning units and one seven (7) ton supplemental air conditioning unit
available for Tenant's use.
 * The building mechanical system is designed to deliver one ton of air
   conditioning per 438 rentable square feet.

 * The building mechanical system was designed under the following parameters:
    * Outdoor Winter: 17F, dry-bulb
    * Outdoor Summer: 85F, dry-bulb
    * Outdoor Summer: 67F, wet-bulb
    * Indoor Temperature: 70F-heating, 75F- cooling

 * Fire and life safety systems exist in accordance with building codes
   applicable at the time of construction.

 * Perimeter window blinds are provided in accordance with original building
   specifications.

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

APPENDIX H

OPERATING EXPENSE BUDGET

(See Attached)

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

NET RENT FORM

TABLE OF CONTENTS

Page

1. LEASE AGREEMENT *

2.

RENT *

A. Types of Rent *

(1) Base Rent *

(2) Operating Cost Share Rent *

(3) Tax Share Rent *

(4) Additional Rent *

(5) Rent *

B. Payment of Operating Cost Share Rent and Tax Share Rent *

(1) Payment of Estimated Operating Cost Share Rent and Tax Share Rent *

(2) Correction of Operating Cost Share Rent *

(3) Correction of Tax Share Rent *

(4) Information *

C. Definitions *

(1) Included Operating Costs *

(2) Excluded Operating Costs *

(3) Taxes *

(4) Lease Year *

(5) Fiscal Year *

D. Computation of Base Rent and Rent Adjustments *

(1) Prorations *

(2) Default Interest *

(3) Rent Adjustments *

(4) Books and Records *

(5) Miscellaneous *

E. Arbitration of Tenant Disputes re Operating Cost Share Rent or Tax Share Rent
*

(1) Notice of Demand *

(2) Response *

(3) Qualified Arbitrator *

(4) Appointment of Third Arbitrator *

(5) Arbitration Hearing, Discovery, Venue *

(6) Decision *

3.

PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF PREMISES *

A. Condition of Premises *

B. Tenant's Possession *

C. Maintenance *

D. Delay in Delivery *

4.

PROJECT SERVICES *

A. Heating and Air Conditioning *

B. Elevators *

C. Electricity *

D. Water *

E. Janitorial Service *

F. Interruption of Services *

5.

ALTERATIONS AND REPAIRS *

A. Landlord's Consent and Conditions *

B. Damage to Systems *

C. No Liens *

D. Ownership of Improvements *

E. Removal at Termination *

F. Satellite Dish Equipment *

6.

USE OF PREMISES *

7.

GOVERNMENTAL REQUIREMENTS AND BUILDING RULES *

8.

WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE *

A. Indemnification *

B. Tenant's Insurance *

C. Insurance Certificates *

D. Landlord's Insurance *

E. Waiver of Subrogation *

9.

FIRE AND OTHER CASUALTY *

A. Termination *

B. Restoration *

10.

EMINENT DOMAIN *

11.

RIGHTS RESERVED TO LANDLORD *

A. Name *

B. Signs *

C. Window Treatments *

D. Keys *

E. Access *

F. Preparation for Reoccupancy *

G. Heavy Articles *

H. Show Premises *

I. Intentionally Omitted *

J. Use of Lockbox *

K. Repairs and Alterations *

L. Landlord's Agents *

M. Building Services *

N. Other Actions *

12.

TENANT'S DEFAULT *

A. Rent Default *

B. Assignment/Sublease or Hazardous Substances Default *

C. Other Performance Default *

D. Credit Default *

E. Vacation or Abandonment Default *

13.

REMEDIES *

A. Termination of Lease or Possession *

B. Lease Termination Damages *

C. Possession Termination Damages *

D. Remedies Cumulative *

E.

WAIVER OF TRIAL BY JURY *

F. Litigation Costs *

G. Default by Landlord *

14.

SURRENDER *

15.

HOLDOVER *

16.

SUBORDINATION TO GROUND LEASES AND MORTGAGES *

A. Subordination *

B. Termination of Ground Lease or Foreclosure of Mortgage *

C. Security Deposit *

D. Notice and Right to Cure *

E. Definitions *

17.

ASSIGNMENT AND SUBLEASE *

A. In General *

B. Landlord's Consent *

C. Procedure *

. Tenant Affiliate or Successor by Merger *

18.

CONVEYANCE BY LANDLORD *

19.

ESTOPPEL CERTIFICATE *

20.

SECURITY DEPOSIT *

21.

FORCE MAJEURE *

22.

TENANT'S PERSONAL PROPERTY AND FIXTURES *

23.

NOTICES *

A. Landlord *

B. Tenant *

24.

QUIET POSSESSION *

25.

REAL ESTATE BROKER *

26.

MISCELLANEOUS *

A. Successors and Assigns *

B. Date Payments Are Due *

C. Meaning of "Landlord", "Re-Entry, "including" and "Affiliat *

D. Time of the Essence *

E. No Option *

F. Severability *

G. Governing Law *

H. Intentionally Omitted *

I. No Oral Modification *

J. Landlord's Right to Cure *

K. Captions *

L. Authority *

M. Landlord's Enforcement of Remedies *

N. Entire Agreement *

O. Landlord's Title *

P. Light and Air Rights *

Q. Singular and Plural *

R. No Recording by Tenant *

S. Exclusivity *

T. No Construction Against Drafting Party *

U. Survival *

V. Rent Not Based on Income *

W. Building Manager and Service Providers *

X. Late Charge and Interest on Late Payments *

Y. Landlord's Representations and Warranties *

Z. Parking *

27.

UNRELATED BUSINESS INCOME *

28.

HAZARDOUS SUBSTANCES *

29.

EXCULPATION *

30.

RIGHT OF FIRST OFFER *

31.

TENANT'S CONFIDENTIAL BUSINESS INFORMATION *

A. Preservation of Confidentiality *

B. Equitable Remedies *

 

 

APPENDIX A - PLAN OF THE PREMISES

APPENDIX A-2 - EMERGENCY GENERATOR LOCATION

APPENDIX B - RULES AND REGULATIONS

APPENDIX C - TENANT IMPROVEMENT AGREEMENT

APPENDIX D - MORTGAGES CURRENTLY AFFECTING THE PROJECT

APPENDIX E - COMMENCEMENT DATE CONFIRMATION

APPENDIX F - LEGAL DESCRIPTION

APPENDIX G - PREMISES CONDITION AND EQUIPMENT

APPENDIX H - OPERATING EXPENSE BUDGET

ADDENDUM 1 - EXTENSION OPTION

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

ADDENDUM 1

EXTENSION OPTION

Subject to Subsection B below, Tenant may at its option extend the Term of this
Lease for one period of five (5) years from the expiration of the Termination
Date. Such period is called a "Renewal Term." The Renewal Term shall be upon the
same terms contained in this Lease, except for the payment of Base Rent during
the Renewal Term; and any reference in the Lease to the "Term" of the Lease
shall be deemed to include the Renewal Term and apply thereto, unless it is
expressly provided otherwise. Tenant shall have no additional extension options.

A. The Base Rent during the Renewal Term shall be ninety-five percent (95%) the
Market Rate (defined hereinafter) for such space for a term commencing on the
first day of the Renewal Term. "Market Rate" shall mean the then prevailing
market rate for a comparable term commencing on the first day of the Renewal
Term for comparable space in the Buildings and comparable space in comparable
buildings in the Redmond area marketplace. In determining "Market Rate", the
parties shall take into consideration all essential economic terms, including
Base Rent, rent concessions and any allowances then being offered by landlords
and accepted by tenants (including, but not limited to, initial month rent
abatements, allowances for tenant improvements, relocation, or data cabling) for
comparable space in comparable buildings in the Redmond marketplace.

B. To exercise any option, Tenant must deliver a binding notice to Landlord not
less than nine (9) months prior to the expiration of the initial Term of this
Lease. Thereafter, the Market Rate for the Renewal Term shall be calculated
pursuant to Subsection C below and Landlord shall inform Tenant of the Market
Rate. Such calculations shall be final and shall not be recalculated at the
actual commencement of such Renewal Term. If Tenant fails to timely give its
notice of exercise, Tenant will be deemed to have waived its option to extend.

C. Market Rate shall be determined as follows:

(i) If Tenant provides Landlord with its notice of exercise pursuant to
Subsection B above, then at some point between ten (10) and eight (8) months
prior to the commencement of the Renewal Term, Landlord shall calculate and
inform Tenant of the Market Rate. If Tenant rejects the Market Rate as
calculated by Landlord, Tenant shall inform Landlord of its rejection within ten
(10) business days after Tenant's receipt of Landlord's calculation, and within
such notice, either (a) notify Landlord that it is terminating its exercise of
the Extension Option, or (b) notify Landlord of its desire to commence
negotiations to agree upon the Market Rate. If Tenant fails to timely reject
Landlord's calculation of the Market Rate it will be deemed to have accepted
such calculation. If Landlord and Tenant are unable to reach agreement within
twenty-one (21) days after Landlord's receipt of Tenant's notice of rejection,
then the Market Rate shall be determined in accordance with (ii) below.

(ii) If Landlord and Tenant are unable to reach agreement on the Market Rate
within said twenty-one (21) day period, then within seven (7) business days,
Landlord and Tenant shall each simultaneously submit to the other in a sealed
envelope its good faith estimate of the Market Rate. If the higher of such
estimates is not more than one hundred five percent (105%) of the lower, then
the Market Rate shall be the average of the two. Otherwise, the dispute shall be
resolved by arbitration in accordance with (iii) and (iv) below.

(iii) Within seven (7) business days after the exchange of estimates, the
parties shall select as an arbitrator an independent MAI appraiser with at least
five (5) years of experience in appraising office space in the metropolitan area
in which the Project is located (a "Qualified Appraiser"). If the parties cannot
agree on a Qualified Appraiser, then within a second period of seven (7)
business days, each shall select a Qualified Appraiser and within ten (10)
business days thereafter the two appointed Qualified Appraisers shall select a
third Qualified Appraiser and the third Qualified Appraiser shall be the sole
arbitrator. If one party shall fail to select a Qualified Appraiser within the
second seven (7) business day period, then the Qualified Appraiser chosen by the
other party shall be the sole arbitrator.

(iv) Within twenty-one (21) days after submission of the matter to the
arbitrator, the arbitrator shall determine the Market Rate by choosing whichever
of the estimates submitted by Landlord and Tenant the arbitrator judges to be
more accurate. The arbitrator shall notify Landlord and Tenant of its decision,
which shall be final and binding. If the arbitrator believes that expert advice
would materially assist him, the arbitrator may retain one or more qualified
persons to provide expert advice. The fees of the arbitrator and the expenses of
the arbitration proceeding, including the fees of any expert witnesses retained
by the arbitrator, shall be paid by the party whose estimate is not selected.
Each party shall pay the fees of its respective counsel and the fees of any
witness called by that party.

D. Tenant's option to extend this Lease is subject to the conditions that: (i)
on the date that Tenant delivers its notice exercising an option to extend,
Tenant is not in default under this Lease after the expiration of any applicable
notice and cure periods, and (ii) Tenant shall not have assigned the Lease, or
sublet more than fifty percent (50%) any portion of the Premises under a
sublease which is effective at any time during the final twelve (12) months of
the initial Term; provided that the assignment and sublease limitations do not
apply to the following assignees or sublessee: (a) a subsidiary, affiliate,
parent or other entity which controls, is controlled by, or is under common
control with, Tenant; (b) a successor entity related to Tenant by merger,
consolidation, non-bankruptcy reorganization, or government action; (c) a
purchaser of substantially all of Tenant's assets in the Premises; or (d) a
joint venture in which Tenant is a general partner.

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