**Exhibit 10.6**

 

**FIRSTAMENDMENT TO SUBLEASE**

 

THIS FIRST AMENDMENT TO SUBLEASE (this “Amendment”) isentered into as of October 27, 2004, by and between Adobe SystemsIncorporated, as sublandlord (“Sublandlord”), and Cutter & Buck, Inc.,a Washington corporation, as subtenant (“Subtenant”), with reference to thefollowing facts:

 

A.                                   Pursuantto that certain Quadrant Lake Union Center Lease dated October 31, 1996,as the same has been amended by the First Amendment to Lease dated February 10,1998, and the Partial Release of Rights (Option to Purchase Lake View Building)dated January      , 2001 (as amended, the “MasterLease”).  The Quadrant Corporation, aWashington corporation (“Quadrant”), as landlord, leased to Sublandlord, astenant, certain space (the “Master Lease Premises”) consisting of 254,328rentable square feet located in Buildings 1 and 2 of the Quadrant LakeUnion Center (‘‘Project”) in Seattle, Washington, as more particularlydescribed in the Master Lease.  BedfordProperty Investors, Inc. (“Landlord”) has succeeded to all right, titleand interest of Quadrant in and to the Project and the Master Lease.

 

B.                                     Pursuantto that certain Sublease dated as of April 30, 2002, by and betweenSublandlord and Subtenant (the “Original Sublease”), together with that certainConsent to Sublease dated as of May 6, 2002, by and among Sublandlord,Subtenant and Landlord (the “Consent”). Subtenant sublet from Sublandlord, and Sublandlord sublet to Subtenant,a portion of the Master Lease Premises containing approximately 44,670 rentablesquare feet consisting of the entire fourth (4th) floor and a portion ofthe second (2nd) floor of the Plaza Building (i.e., Building Number 2) (the “Building”),said space being more particularly identified and described in the OriginalSublease (the “Original Subleased Premises”). The Original Sublease and the Consent are sometimes collectivelyreferred to herein as the “Sublease.” All capitalized terms used but not defined herein shall have therespective meanings ascribed to them in the Sublease.

 

C.                                     Pursuantto the terms of the Original Sublease, commencing as of January 1, 2007,Subtenant agreed to sublease from Sublandlord, and Sublandlord agreed tosublease to Subtenant, approximately 4,697 rentable square feet on the second(2nd) floor of the Building, said space being more particularly identifiedand described in the Original Sublease (the “Additional Premises”).  The Original Subleased Premises and theAdditional Premises are collectively referred to in the Original Sublease asthe “Subleased Premises.”

 

D.                                    Sublandlordand Subtenant wish to amend the Sublease to provide for the early sublease bySubtenant of the Additional Premises and to modify the definition of theAdditional Premises to mean a portion of the Master Lease Premises containingapproximately 4,288 rentable square feet on the second (2nd) floor of theBuilding and commonly known as Suite 240, said space being moreparticularly identified and described on the floor plan attached hereto as Exhibit Aand incorporated herein by reference.

NOW, THEREFORE, in consideration of the foregoing, andfor other good and valuable consideration, the receipt and adequacy of whichare hereby acknowledged by the parties, Sublandlord and Subtenant hereby agreeas follows:

 

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1.                                       Additionof Additional Premises.  From andafter the date hereof, all references in the Sublease to the “AdditionalPremises” shall be deemed to mean and refer to the Additional Premises as shownon Exhibit A attached hereto. Subject to Section 2 of this Amendment, and notwithstandinganything to the contrary contained in the Sublease, as of the date upon whichSublandlord tenders possession of the Additional Premises to Subtenant (the “AdditionalPremises Commencement Date”), the Additional Premises shall be added to andbecome a part of the premises sublet by Subtenant under the Sublease, subjectto the provisions set forth in this Amendment, and references in the Subleaseto the “Subleased Premises” shall be deemed to mean and refer to the OriginalSubleased Premises and the Additional Premises unless the context clearlyrequires otherwise.  From and after thedate hereof, all references in the Sublease to the “Additional PremisesCommencement Date” shall be deemed to mean and refer to the Additional PremisesCommencement Date as defined in this Section 1.  Except as expressly provided otherwise inthis Amendment, Subtenant’s sublease of the Additional Premises shall be on andsubject to all of the terms and conditions of the Sublease.  Subject to Section 2 of this Amendment,the Additional Premises Commencement Date is anticipated to occur on or about November 1,2004 (the “Anticipated Delivery Date”). Notwithstanding the foregoing, if Sublandlord is unable to deliver theAdditional Premises as of the Anticipated Delivery Date.  Sublandlord shall have no liability therefor,except that Subtenant shall have no liability to pay any rent with respect tothe Additional Premises until possession of the Additional Premises is tenderedto Subtenant.  The terms and provisionsof Section 2.3 of the Sublease shall not apply to the Additional Premises.

 

2.                                       Consent.  Under the Master Lease, Sublandlord mustobtain the consent of Landlord to any subletting.  This Amendment shall be in full force andeffect upon execution of this Amendment by Sublandlord and Subtenant; provided,however, that the Additional Premises Commencement Date shall not occur unlessand until Landlord executes a written consent to this Amendment substantiallyin the form of the Consent or such other form as is reasonably acceptable toSublandlord and Subtenant (the “Sublease Amendment Consent”).  In the event that the Sublease AmendmentConsent executed by Landlord is not delivered to Subtenant within thirty(30) days after the date of this Amendment (which date, at Sublandlord’soption, shall be extended if Subtenant delays in providing any reasonableinformation that is required by Landlord in connection with providing itsconsent), Subtenant and Sublandlord shall each have the right to cancel thisAmendment by giving written notice of such cancellation (the “CancellationNotice”) to the other party at any time after such thirty (30) day period;provided, however, that if Subtenant gives Sublandlord a Cancellation Notice,this Amendment shall not be canceled and shall remain in full force and effectif Sublandlord obtains the Sublease Amendment Consent within two (2) daysafter Sublandlord receives Subtenant’s Cancellation Notice.  In no event shall any cancellation of thisAmendment pursuant to this Section 2 serve to cancel or terminate theSublease.

 

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3.                                       Rent.

 

3.1                                 BaseRent.

 

(a)                                  OriginalSubleased Premises.  From and afterthe Additional Premises Commencement Date and throughout the Term, Subtenantshall pay to Sublandlord as Base Rent for the Original Subleased Premises thefollowing:

 
| **Months**                                                      | ** ** | **Rent per Square  Foot per Year** | ** ** | **Monthly  Installment** | ** ** |
|-----------------------------------------------------------------|------------|------------------------------------|------------|--------------------------|------------|
|                                                            |       |                               |       |                     |       |
| Additional Premises Commencement Date - December 31,  2004 |       | $                                  | 24.00      |                     | $          | 89,340.00 |   |
| January 1, 2005 - December 31, 2005                   |       | $                                  | 24,50      |                     | $          | 91,201.25 |   |
| January 1, 2006 - December 31, 2006                   |       | $                                  | 25.00      |                     | $          | 93,062,50 |   |
| January 1, 2007 - December 31, 2007                   |       | $                                  | 25.50      |                     | $          | 94,923.75 |   |
| January 1, 2008 - December 31, 2008                   |       | $                                  | 26,00      |                     | $          | 96,785.00 |   |
| January 1, 2009 - December 31, 2009                   |       | $                                  | 26.50      |                     | $          | 98,646.25 |   |
| January 1, 2010 - July 15, 2010                       |       | $                                  | 27.00      |                     | $          | 100,507.50 |   |

 

(b)                                 AdditionalPremises.  From and after theAdditional Premises Commencement Date and throughout the Term, Subtenant shallpay to Sublandlord as Base Rent for the Additional Premises the following:

 
| **Months**                                                      | ** ** | **Rent per Square  Foot per Year** | ** ** | **Monthly  Installment** | ** ** |
|-----------------------------------------------------------------|------------|------------------------------------|------------|--------------------------|------------|
|                                                            |       |                               |       |                     |       |
| Additional Premises Commencement Date - December 31,  2005 |       | $                                  | 20.00      |                     | $          | 7,146.67 |   |
| January 1, 2006 - December 31, 2006                   |       | $                                  | 22.00      |                     | $          | 7,861.33 |   |
| January 1, 2007 - December 31, 2007                   |       | $                                  | 25.50      |                     | $          | 9,112.00 |   |
| January 1, 2008 - December 31, 2008                   |       | $                                  | 26.00      |                     | $          | 9,290.67 |   |
| January 1, 2009 - December 31, 2009                   |       | $                                  | 26.50      |                     | $          | 9,469.33 |   |
| January 1, 2010 - July 15, 2010                       |       | $                                  | 27.00      |                     | $          | 9,648.00 |   |

 

3.2                                 Subtenant’sPercentage Share of Property Taxes and Operating Expenses.  As of the Additional Premises CommencementDate, “Subtenant’s Percentage Share,” as defined in Section 3.2(e)(6) ofthe Original Sublease, shall be increased by 1.69% to reflect the addition ofthe Additional Premises.  Therefore, thefirst clause of Section 3.2(e)(6) of the Original Sublease is herebyamended to read as follows: “Subtenant’s Percentage Share” shall mean 17.56%prior to the Additional Premises Commencement Date, and 19.25% from and afterthe Additional Premises Commencement Date;”.

 

4.                                       SecurityDeposit.  Concurrently with Subtenant’sexecution of this Amendment, and in accordance with Section 4.2 of theOriginal Sublease, Subtenant shall deposit with Sublandlord cash or otherimmediately available funds in the sum of Nineteen Thousand Two HundredNinety-Six and 00/100 Dollars ($19,296.00), which amount shall be added to andshall become a part of the Deposit under the Sublease.

 

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5.                                       Conditionof Additional Premises. Notwithstanding anything to the contrary contained in the Sublease,Sublandlord shall deliver, and Subtenant shall accept, possession of theAdditional Premises in an “AS IS” condition. Sublandlord shall have no obligation to furnish, render or supply anywork, labor, services, materials, furniture, fixtures, equipment, decorationsor other items to make the Additional Premises ready or suitable for Subtenant’soccupancy.  In making and executing thisAmendment, Subtenant has relied solely on such investigations, examinations andinspections as Subtenant has chosen to make or has made and has not relied onany representation or warranty concerning the Additional Premises or theBuilding.  Subtenant acknowledges thatSublandlord has afforded Subtenant the opportunity for full and completeinvestigations, examinations and inspections of the Additional Premises.

 

6.                                       Parking.  Commencing as of the Additional PremisesCommencement Date, Section 14 of the Original Sublease shall be amended topermit Subtenant and its employees to use an additional ten (10) unreservedparking spaces (the “Additional Parking Spaces”) in an area or areas of theBuilding parking garage designated from time to time by Sublandlord.  Subtenant shall have the right to use theAdditional Parking Spaces at no cost to Subtenant, but subject to the terms ofthe Master Lease, the rules and regulations of the Building, anycovenants, conditions and restrictions recorded against the Building, and all lawsand regulations.  Upon written noticefrom Sublandlord to Subtenant, Sublandlord shall have the right from time totime, in Sublandlord’s sole discretion, to relocate some or all of theAdditional Parking Spaces to one or more other parking garages and/or surfaceparking lots at the Project.

 

7.                                       Deletions.  Section 15 of the Original Sublease (“Optionto Expand”) is hereby deleted in its entirety from the Sublease and, from andafter the date of this Amendment, such Section 15 shall be deemed null andvoid and of no further force or effect whatsoever.

 

8.                                       NoBrokers.  Each of the parties heretorepresents to the other that it has had no dealings with any broker or agent inconnection with this Amendment or the Additional Premises.  Sublandlord and Subtenant shall eachindemnify and hold the other party harmless from all claims of any brokers oragents claiming to have represented the indemnifying party in connection withthis Amendment or the Additional Premises. The terms and provisions of this Section 8 shall survive theexpiration or any earlier termination of the Sublease, as amended by thisAmendment.

 

9.                                       Interpretation.  In the event of any conflict with respect tothe Additional Premises between the terms of the Sublease and the terms of thisAmendment, the terms of this Amendment shall prevail.

 

10.                                 Counterparts.  This Amendment may be executed in separatecounterparts, each of which shall constitute an original and all of whichtogether shall constitute one and the same instrument.  This Amendment shall be fully executed wheneach party has signed and delivered to the other party at least onecounterpart, even though no single counterpart contains the signatures of allparties hereto.

 

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11.                                 Effectivenessand Ratification.  Except asexpressly modified herein, the terms, covenants and conditions of the Subleaseshall remain in full force and effect, and Sublandlord and Subtenant herebyratify and confirm each and every term of the Sublease, as amended by thisAmendment.

 

IN WITNESS WHEREOF, the parties hereto have executedthis Amendment as of the day and year first above written.

 
|   | SUBLANDLORD:                                 |
|--------|----------------------------------------------|
|   |                                         |
|   | ADOBE SYSTEMS  INCORPORATED                  |
|   |                                         |
|   | By:                                          | /s/ MURRAY J.  DEMO |   |
|   | Print Name:  Murray J. Demo                  |
|   | Title:                                       | Sr. Vice  President & |
|   |                                         | Chief Financial  Officer |
|   |                                         |
|   | SUBTENANT:                                   |
|   |                                         |
|   | CUTTER &  BUCK, INC.                |
|   |                                         |
|   |                                         |
|   | By:                                          | /s/ ERNEST R.  JOHNSON |   |
|   | Print Name:  Ernest R. Johnson               |
|   | Title: Senior  Vice President & CFO |
|        |                                              |  |  |  |  |  |

 

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