Exhibit








3101 WESTERN AVENUE
SEATTLE, WASHINGTON
SUBLEASE
by and between
CTI BIOPHARMA, CORP., 
a Washington corporation
as SUBLANDLORD
and
CASCADIAN THERAPEUTICS, INC., 
a Delaware corporation
as SUBTENANT













TABLE OF CONTENTS
                                                                                                                       Page



		
	1.  Sublease.
	2


		
	2.  Proposed Subtenant Improvements.
	3


		
	2.  Sublease Term.
	3


		
	3.  Use
	4


		
	4.  Rent and Additional Charges
	4


		
	6.  Master Lease Terms
	6


		
	7.  Maintenance and Repairs.
	6


		
	8.  Parking Privileges.
	8


		
	9.  Compliance With Laws and Permits.
	8


		
	10.  Tax on Subtenant’s Personal Property.
	8


		
	11.  Right of Entry.
	8


		
	12.  Indemnification and Limitation on Liability.
	9


		
	13.  Insurance; Waiver of Subrogation.
	9


		
	14.  Damage or Destruction.
	11


		
	15.  Assignment and Subletting.
	12


		
	16.  Transfer of Sublandlord’s Interest.
	12


		
	17.  Event of Default.
	12


		
	18.  Estoppel Certificate.
	13


		
	19.  Surrender of Sublease Premises and Removal of Subtenant’s Property.
	13


		
	20.  Brokers.
	14


		
	21.  Rules and Regulations.
	14


		
	22.  Signage.
	14


		
	23.  Furniture, Fixtures and Equipment.
	14


		
	24.  Expansion.
	14


		
	25.  General Provisions.
	16






i








SCHEDULE OF EXHIBITS


	
			
	Exhibit A
	MASTER LEASE
	A-1

	Exhibit B
	FLOOR PLANS FOR SUBLEASE PREMISES
	B-1

	Exhibit C
	WORK LETTER
	C-1

	Exhibit D
	LIST OF FF&E
	D-1

	Exhibit E
	LEGAL DESCRIPTION
	E-1

	Exhibit F
	CONSENT TO SUBLEASE AND RECOGNITION AGREEMENT
	F-1
















ii








BASIC SUBLEASE INFORMATION
	
			
	1.    
	Effective Date:
	December ____, 2017

	 
	 
	 

	2.    
	Sublandlord:
	CTI BioPharma, Corp., a Washington corporation

	 
	 
	 

	3.    
	Subtenant:
	Cascadian Therapeutics, Inc., a Delaware corporation

	 
	 
	 

	4.    
	Building:
	3101 Western Avenue, Seattle, Washington.

	 
	 
	 

	5.    
	Premises:
	The sixth (6th), seventh (7th) and eighth (8th) floors of the Building containing approximately 66,045 rentable square feet or as may be adjusted from time to time in accordance with the terms of the Master Lease.

	 
	 
	 

	6.    
	Sublease Premises:
	The sixth (6th) and seventh (7th) floors of the Building containing approximately 44,050 rentable square feet and more particularly described on Exhibit B attached hereto (“Sublease Premises”).   

	 
	 
	 

	7.    
	Sublease Term:
	Commencing on the Commencement Date and terminating on the Expiration Date.

	 
	 
	 

	8.    
	Commencement Date:
	January 1, 2018; but if Subtenant substantially commences business operations in the Sublease Premises prior to January 1, 2018, then the Commencement Date shall be such earlier date on which business operations substantially commence.

	 
	 
	 

	9.    
	Expiration Date:
	April 30, 2022

	 
	 
	 

	10.    
	Base Rent:
	“Monthly Base Rent” shall be $110,125.00 per month for the first twelve full months of the Sublease Term, and will be increased on each anniversary of the Commencement Date by an amount equal to $1.00 per rentable square foot per annum (i.e., an annual increase of $3,670.84 in Monthly Base Rent payable, beginning on the first anniversary of the Commencement Date).


Notwithstanding the foregoing, Monthly Base Rent shall be abated completely for the first five (5) full calendar months of the Sublease Term.

	 
	 
	 

	11.    
	Security Deposit:
	$374,425.08

	 
	 
	 

	12.    
	Base Year:
	2018

	 
	 
	 

	13.    
	Subtenant’s Proportionate Share:
	Sixty-six point seventy percent (66.70%), which is calculated by dividing the square footage of the Sublease Premises (as provided for herein) by the total square footage of the Premises.

	 
	 
	 






S-1







	
			
	14.    
	Subtenant Improvements:
	Described in the Work Letter.



	 
	 
	 

	15.    
	Sublandlord’s Broker:
	Flinn Ferguson

	 
	 
	 

	16.    
	Subtenant’s Broker:
	Flinn Ferguson

	 
	 
	 

	17.    
	Parking Privileges:
	Subtenant will have the right, but not the obligation to rent eighty-eight (88) standard parking passes of which up to four (4) may be reserved stalls in the parking garage. For the avoidance of doubt, Subtenant’s Parking Privileges shall not include any outside reserved parking stalls unless otherwise expressly agreed by Sublandlord in writing.










2







3101 WESTERN AVENUE 
SEATTLE, WASHINGTON
SUBLEASE
This SUBLEASE (this “Sublease”) is entered into as of the Effective Date, by and between CTI BIOPHARMA, CORP., a Washington corporation (“Sublandlord”), and CASCADIAN THERAPEUTICS, INC., a Delaware corporation (“Subtenant”), with reference to the following Recitals.
R E C I T A L S
A.    The defined terms and all other portions of the “Basic Sublease Information” are hereby incorporated into this Sublease.  All other capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Master Lease.
B.    Sublandlord, formerly known as Cell Therapeutics, Inc., is the Lessee under that certain Office Lease dated as of January 27, 2012, (as amended by that certain letter amendment, dated as of June 7, 2012; the “Master Lease”), pursuant to which Sublandlord leases the Premises from Selig Holdings LLC (“Master Landlord”).  A copy of the Master Lease is attached hereto as Exhibit A.
C.    Sublandlord desires to sublease to Subtenant and Subtenant desires to sublease from Sublandlord, the Sublease Premises pursuant to the terms and conditions of this Sublease.
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sublandlord and Subtenant agree as follows:
1.Sublease.  Subject to the terms and conditions of this Sublease and the Master Lease, Sublandlord hereby leases to Subtenant and Subtenant leases from Sublandlord the Sublease Premises together with all rights appurtenant thereto, including the non-exclusive right to use the Common Areas of the Building as provided for under the Master Lease.  Subtenant acknowledges and agrees that Subtenant shall have no right to, and shall not, use or occupy any portions of the Premises other than the Sublease Premises except as set forth herein.  Sublandlord and Subtenant each agree and acknowledge that (a) it is their intent that, except as may be specifically excluded under this Sublease, Subtenant shall keep and observe all of the obligations and covenants under the Master Lease applicable to Sublandlord as such obligations and covenants apply to the Sublease Premises during the Sublease Term, and (b) unless specifically set forth herein, Sublandlord shall have no obligation or liability to perform any of the obligations or liabilities of Master Landlord under the Master Lease as the lessor of the Sublease Premises and Master Landlord shall be solely responsible for providing all services and performing all duties and obligations of the Master Landlord under the Master Lease with respect to the Sublease Premises; provided that Sublandlord 


3







will use commercially reasonable efforts, at the sole cost and expense of Subtenant, to cooperate with Subtenant in enforcing the terms of the Master Lease.  
Sublandlord shall not voluntarily surrender or terminate the Master Lease with respect to the Sublease Premises (as the same exists from time to time), and will not terminate the Master Lease with respect to the Offer Space (as defined below) without first offering such space to Subtenant pursuant to Section 24 below.  Upon receipt of any notice from Master Landlord relating to the Sublease Premises, Sublandlord shall promptly deliver a copy of such notice to Subtenant in accordance with the terms and conditions of Section 25(a) below.
2.Proposed Subtenant Improvements.  The parties hereto hereby acknowledge that they have mutually agreed to allow the Subtenant Improvements pursuant to Exhibit A to the Work Letter attached hereto as Exhibit C.  The parties further acknowledge that, as of the date hereof, Sublandlord has capped off the interior communication stairwell between the seventh (7th) and eighth (8th) floors of the Building and located between the Sublease Premises and that portion of the Premises to be retained by Sublandlord. 
3.Sublease Term.
(a)    Term.  The Sublease Term shall commence on the Commencement Date and shall terminate at 11:59 p.m. PST on the Expiration Date unless the Master Lease terminates prior to the Expiration Date, in which event this Sublease shall immediately terminate upon such earlier termination of the Master Lease (subject to the terms of that certain Consent to Sublease and Recognition Agreement, by and between Master Landlord and Subtenant, and acknowledged by Sublandlord, to be entered into within thirty (30) days after the Effective Date pursuant to Section 25(p) (the “Master Landlord Consent”) and Sublandlord shall have no liability to Subtenant in connection with any such early termination of the Master Lease, except to the extent such early termination is attributable to a default by Sublandlord under this Sublease or the Master Lease that is not a consequence of a default by Subtenant under this Sublease or the Master Lease.
(b)    Delivery of Sublease Premises; Early Entry.  
(i)    Sublandlord shall use commercially reasonable efforts to deliver the Sublease Premises to Subtenant on the Effective Date (the date of delivery being the “Delivery Date”).  If Sublandlord fails to timely deliver the Sublease Premises, Sublandlord shall not be liable to Subtenant for any loss or damage resulting therefrom, and this Sublease shall not be void or voidable except as may be provided herein.  If Sublandlord does not deliver the Sublease Premises by the Commencement Date for any reason other than for reasons outside the reasonable control of Sublandlord, then (A) this Sublease may be terminated by Sublandlord or Subtenant at any time upon five (5) business days’ written notice to the other party, and if so terminated, neither Sublandlord nor Subtenant shall have any further rights, duties or obligations under this Sublease, except with respect to provisions that expressly survive termination of this Sublease, and (B) Rent shall be abated until the Delivery Date or the earlier termination of this Sublease pursuant to the foregoing clause (A).


4







(ii)    Subject to the terms and conditions of this Sublease, and provided Sublandlord has received the fully executed Sublease, the Security Deposit, and all evidence of insurance coverage required hereunder, as of the Delivery Date, Subtenant may, at Subtenant’s sole risk, have access to the Sublease Premises, for the purpose of installing the Subtenant Improvements, furniture, telephone and data cabling, fixtures and other equipment in the Sublease Premises.  Sublandlord may withdraw such permission to enter the Sublease Premises prior to the Commencement Date at any time that Sublandlord reasonably determines that such entry by Subtenant is causing a dangerous situation for Sublandlord, Subtenant, Subtenant’s vendors and contractors or other tenants in the Building.  Such early entry shall be subject to all the terms and provisions of this Sublease, except that, for the avoidance of doubt, Subtenant shall have no obligation to pay Monthly Base Rent or other charges until the Commencement Date.
(iii)    Subtenant acknowledges, represents and warrants that, notwithstanding anything to the contrary in this Sublease or in the Master Lease, taking possession of the Sublease Premises by Subtenant shall be conclusive evidence that Subtenant accepts the Sublease Premises, including, without limitation, the Subtenant Improvements, “AS IS,” and that the Sublease Premises and Subtenant Improvements are suited for Subtenant’s use and are in good and satisfactory condition as of the time possession is taken, subject to the window repair request of Subtenant described below.  Subtenant acknowledges that neither Master Landlord nor Sublandlord, nor their respective agents or representatives, has made any representations, warranties, or promises with respect to the Building or the Sublease Premises, except as may be expressly set forth in this Sublease.  Without limiting the foregoing, the parties acknowledge that Subtenant has requested that certain windows within the Sublease Premises be repaired by Master Landlord.  Sublandlord hereby agrees to request such window repairs pursuant to the Master Lease, and further request that such window repairs be made as soon as reasonably possible, provided however, Sublandlord shall have no responsibility and no liability for repairs which are the responsibility of Master Landlord or for Master Landlord’s refusal or failure to make such repairs.
4.Use.  The Sublease Premises are to be used by Subtenant for the purposes set forth in Article 5 of the Master Lease and for no other purpose, subject to the terms and conditions of this Sublease and of the Master Lease (unless expressly excluded herein). 
5.Rent and Additional Charges.
(a)    Monthly Base Rent.  Subtenant shall pay to Sublandlord Monthly Base Rent in advance on the Commencement Date and on the first day of every calendar month following the Commencement Date during the Sublease Term (prorated for partial months).  All Rent (as defined below) shall be paid to Sublandlord, without prior demand and without any deduction or offset, in lawful money of the United States of America, at the address of Sublandlord for Rent payments as set forth in Section 25(a) or to such other person or at such other place as Sublandlord may from time to time designate in writing.  


5







Notwithstanding the foregoing, Monthly Base Rent shall be abated during the first five (5) months of the Sublease Term.  Upon written notice from Master Landlord that Sublandlord is in default on the payment of any rent or additional amounts under the Master Lease and such default in payment is not cured by Sublandlord within five (5) days after such notice is delivered, Subtenant agrees to provide all Rent directly to Master Landlord at the address set forth in Section 25(a).  Sublandlord hereby agrees that Subtenant will have no liability or responsibility to Sublandlord as a result of Subtenant’s compliance with Master Landlord’s instructions pursuant to the foregoing sentence and any Rent paid by Subtenant to Master Landlord pursuant to the foregoing will be credited towards Subtenant’s obligations under this Sublease.
(b)    Additional Charges; Rent Adjustments.  In addition to Monthly Base Rent, Subtenant shall pay to Sublandlord Subtenant’s Proportionate Share of any increase in the Additional Charges (defined below) above the amount of Additional Charges in the Base Year (as defined in this Sublease) (“Subtenant Additional Charges”). “Additional Charges” means all “Operating Services”, “Controllable Expenses”, and “Real Estate Taxes,” each as defined in Section 19 of the Master Lease, payable by Sublandlord under the Master Lease.  Following receipt by Sublandlord of statements from Master Landlord showing the amount of Operating Services, Controllable Expenses and Real Estate Taxes due from Sublandlord under the Master Lease (“Master Lease Statements”), Sublandlord shall deliver to Subtenant statements (“Additional Charge Statements”) showing the amounts of Subtenant Additional Charges, which will include a copy of the Master Lease Statement (which statements will include the amounts of Additional Charges for the Base Year and copies of the Master Lease Statements for the Base Year).  Sublandlord shall prepare the Additional Charge Statements based solely on the information provided in the Master Lease Statements, and Sublandlord shall have no liability to Subtenant for any error or omission in the Master Lease Statements.  Subtenant further understands and agrees that, as a portion of the Operating Services, Controllable Expenses and Real Estate Taxes, the Additional Charges shall be computed in the manner provided in the Master Lease.  Subtenant shall pay to Sublandlord the Subtenant Additional Charges together with the next due installment of Monthly Base Rent (each such payment by Subtenant, a “Rent Adjustment”).  In the event Subtenant reasonably believes there is an error in the Master Lease Statement, upon written request by Subtenant, Sublandlord will exercise its audit right as set forth in Section 19 of the Master Lease at Subtenant’s cost (subject to reimbursement by Master Landlord as provided in Section 19 of the Master Lease).
(c)    Extraordinary Charges.  Subtenant shall pay to Sublandlord within ten (10) business days of receipt of a statement from Sublandlord, the amount Sublandlord is required to pay, other than with respect to the Additional Charges, with respect to any utilities, services, and other miscellaneous items provided at the request of Subtenant to the Sublease Premises.
(d)    Adjustments to Additional Charges; Reconciliation.  It is further expressly understood and agreed that, if and to the extent Master Landlord notifies Sublandlord of an adjustment in the amount of the Operating Services, Controllable Expenses and Real Estate Taxes payable by Sublandlord pursuant to the Master Lease, 


6







appropriate adjustments will be made to the amount of Additional Charges payable by Subtenant hereunder.  If Master Landlord delivers a statement in accordance with the Master Lease reflecting that any excess Additional Charges have been paid, then Subtenant shall receive an appropriate credit towards Monthly Base Rent next coming due under this Sublease in an amount equal to the amount of any overpayment by Subtenant.  If Master Landlord delivers a statement in accordance with the Master Lease reflecting that any Additional Charges with respect to the Sublease Premises have been underpaid, Subtenant shall pay any such additional amounts within thirty (30) days of delivery to Subtenant of a statement setting forth the calculation of the appropriate amount of Additional Charges payable by Subtenant hereunder.
(e)    Late Charge.  If an Event of Default occurs with respect to the payment of any installment of Rent or any other payment for which Subtenant is obligated under this Sublease, then, Subtenant shall pay to Sublandlord a late charge equal to five percent (5%) of the amount so payable.  Subtenant acknowledges that late payments will cause Sublandlord to incur costs not contemplated by this Sublease, the exact amount of which costs are extremely difficult and impracticable to calculate.  The parties agree that the late charge described above represents a fair and reasonable estimate of the extra costs incurred by Sublandlord as a result of such late payment.  Such late charge shall not be deemed a consent by Sublandlord to any late payment, nor a waiver of Sublandlord’s right to insist upon timely payments at any time, nor a waiver of any remedies to which Sublandlord is entitled hereunder.  In addition, all amounts payable by Subtenant to Sublandlord hereunder, exclusive of the late charge described above, if not paid when due, shall bear interest from the due date until paid at the lesser rate of (i) eight percent (8%), or (ii) three percent (3%) above the prime rate of interest charged from time to time by Bank of America, or its successor (but not to exceed the maximum rate permitted by all applicable laws and governmental requirements).
(f)    Rent.  As used herein “Rent” shall mean all Monthly Base Rent, Rent Adjustments, and any other sums or amounts payable by Subtenant under this Sublease.
(g)    Security Deposit.
(i)    If Subtenant breaches any provision of this Sublease, including but not limited to the payment of Rent, after the expiration of any applicable notice and cure period, Sublandlord may use all or any part of the Security Deposit for the payment of any Rent or any other sums in default, or to compensate Sublandlord for any other loss or damage which Sublandlord actually incurs by reason of Subtenant’s default.  If any portion of the Security Deposit is so used or applied, Subtenant shall, within five (5) business days after written demand therefor, deposit cash with Sublandlord in an amount sufficient to restore the Security Deposit to its original amount.  Subtenant agrees that Sublandlord shall not be required to keep the Security Deposit in trust, segregate it, or keep it separate from Sublandlord’s general funds, Sublandlord may commingle the Security Deposit with its general funds, and Subtenant shall not be entitled to interest on the Security Deposit.  Within thirty (30) days following the Expiration Date or any earlier termination of the 


7







Sublease (including by reason of a Recognition Event, as defined in the Master Landlord Consent), the Security Deposit or any balance thereof, if any (after application of any amount owed by reason of a default by Subtenant hereunder) shall be returned to Subtenant.
(ii)    Notwithstanding anything to the contrary herein, so long as Subtenant is not then in monetary or material non-monetary default under this Sublease, after any applicable notice and cure period, with respect to Subtenant’s final two (2) payments of Monthly Base Rent, in lieu of Subtenant making such payments pursuant to Section 5(a), the Security Deposit shall be applied to such payments, and upon each such payment, the amount of the Security Deposit required hereunder shall be correspondingly reduced.
6.Master Lease Terms.
(a)    Obligations of Sublandlord and Subtenant.  This Sublease is subject to all of the terms and conditions of the Master Lease, and all of the covenants, agreements, provisions and conditions thereof are made a part of and incorporated into this Sublease as if recited in full herein and with all references in the Master Lease to “Lessor” referring to Sublandlord and all references to “Lessee” referring to Subtenant; provided, however, that with respect to the payment of Monthly Base Rent, Operating Services, Controllable Expenses and Real Estate Taxes, Subtenant’s obligations shall be governed by the terms of this Sublease.  Subtenant hereby agrees to perform all obligations of Tenant (as defined in the Master Lease) as the tenant under the Master Lease with respect to the Sublease Premises to the extent this Sublease obligates Subtenant to perform such obligations and agrees to be bound by the terms of the Master Lease as to the Sublease Premises to the extent incorporated herein to the same extent as if Subtenant were the Tenant (as defined in the Master Lease) under the Master Lease. As between the parties to this Sublease only, if a conflict exists between the terms of the Master Lease and the terms of this Sublease, the terms of this Sublease will control.  Subject to the exclusions set forth in Section 6(b), Subtenant shall not commit, or permit to be committed, any act or omission that would violate any term or condition of the Master Lease or constitute cause for termination of the Master Lease by Master Landlord.  Sublandlord shall not commit, or permit to be committed, any act or omission that would constitute cause for termination of the Master Lease by Master Landlord or otherwise affect the rights of Subtenant under this Sublease.
(b)    Exclusions.  Any provision of the Master Lease granting Sublandlord rights regarding expansion of the Sublease Premises, first rights to lease, renewal options, rights of first refusal, or extension of the Master Lease Term are hereby expressly deemed excluded from the terms of this Sublease.  Unless expressly set forth in or modified under this Sublease, Subtenant shall have no rights or obligations under or with respect to the following provisions of the Master Lease:  Article 2, Article 3, Article 4, Article 21, Article 37, Article 38, Article 41, Article 42, Article 43, Article 44, Article 46, Article 49, Article 51, Article 52, Article 53, and all other provisions which by their nature would not apply to Subtenant.  Article 54 shall not be deemed a representation or warranty or an indemnification obligation of Sublandlord to Subtenant.


8







(c)    Master Landlord’s Consent.  Subtenant shall not commit any act that requires Master Landlord’s consent under the Master Lease without first obtaining the consent of Master Landlord and Sublandlord (which will not be unreasonably withheld, conditioned or delayed).  Notwithstanding any contrary provision of this Sublease or any other agreement between Sublandlord and Subtenant, Sublandlord shall cooperate with Subtenant to obtain Master Landlord’s consent, but shall not be liable for any failure of Master Landlord to grant its consent.
7.Maintenance and Repairs.
(a)    Subtenant’s Obligations.
(i)    Maintenance and Repair.  Subtenant shall, at Subtenant’s sole expense, keep the Sublease Premises and every part thereof in good condition, ordinary wear and tear, condemnation and insured casualty excepted, except for any obligations of Sublandlord under the Master Lease that are specifically set forth and assumed by Sublandlord in this Sublease (including any obligations relating to the Sublease Premises prior to the Commencement Date herein) and any obligations of Master Landlord under the Master Lease.  If (x) Sublandlord reasonably determines that any maintenance and/or repair of the Sublease Premises is required under the terms of the Master Lease, and, subject to such shorter time as may be required under the Master Lease and any maintenance and repair rights of Master Landlord thereunder, such maintenance and/or repair item has not been completed by Subtenant within ten (10) business days after notice from Sublandlord that such item is required (or, if such maintenance or repair is not reasonably capable of being completed within such ten (10) business day-period, commenced within such time period and thereafter diligently prosecuted to completion), or (y) any maintenance and/or repair to the Building is required by reason of the negligent act or omission or willful misconduct of Subtenant or its agents, employees, contractors, invitees, or licensees, and Sublandlord or Master Landlord performs the required maintenance or repair work, Subtenant shall pay to Sublandlord or Master Landlord (as applicable) the reasonable cost of such maintenance and repairs.  Subtenant hereby waives and releases any right to make repairs at Sublandlord’s expense under any applicable law now or hereafter in effect, except to the extent expressly set forth in Section 17 of this Sublease and Section 48 of the Master Lease.
(ii)    Alterations and Improvements. Unless specifically permitted by the terms of this Sublease, or the Master Lease, Subtenant shall not make any “Alterations” (as that term is defined in Section 8 of the Master Lease), including, without limitation, the installation of any rooftop satellite antennae and related cabling, without the consent of Master Landlord and Sublandlord.  Sublandlord shall reasonably cooperate and assist Subtenant in obtaining the consent of Master Landlord under the Master Lease, and Sublandlord shall not unreasonably withhold, condition, or delay its consent to any Alterations requested by Subtenant that are approved by Master Landlord.  Sublandlord will not charge any supervision or other fees in connection with any Alterations requested or performed by Subtenant.


9







(b)    Sublandlord’s Obligations.
(i)    Maintenance and Repair.  The Sublease Premises will be delivered to Subtenant in broom clean condition.  Master Landlord performs all repairs and maintenance on the building systems serving the Sublease Premises pursuant to the Master Lease and past practice. Subject to the foregoing, Sublandlord shall have no obligation to operate, maintain, or repair the Sublease Premises.  All maintenance and repairs of the Sublease Premises which are required of lessee under the Master Lease shall be the sole obligation of Subtenant and shall be performed at Subtenant’s sole cost and expense.  Without limiting the foregoing, Subtenant shall have the right, with prior notice to Sublandlord, to request that Master Landlord undertake maintenance and/or repairs that are the obligation of Master Landlord under the Master Lease.  Unless specifically provided in this Sublease (or in the Master Lease), there shall be no abatement of Rent with respect to, and Sublandlord shall not be liable for, any injury to or interference with Subtenant’s business arising from any repairs, maintenance, alteration, or improvement in or to any portion of the Building or the Premises, including the Sublease Premises, or in or to the fixtures, appurtenances, and equipment therein.  
(ii)    Alterations and Improvements.  Except as otherwise provided herein, Sublandlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Sublease Premises or any part thereof.    
8.Parking Privileges.  Subtenant is hereby granted the Parking Privileges.  Subtenant shall at all times comply with the terms of the Master Lease, or other rules and regulations established by Master Landlord, with respect to its use of such Parking Privileges.  Subtenant shall pay all costs, fees, and charges applicable to such Parking Privileges imposed or charged in accordance with the terms of the Master Lease or other rules and regulations established by Master Landlord, without markup or profit to Sublandlord.
9.Compliance With Laws and Permits.  Subtenant shall, at Subtenant’s sole cost and expense, comply throughout the Sublease Term with all applicable laws and governmental requirements now or hereafter in effect with respect to the Sublease Premises and Subtenant’s use and occupancy thereof.  If any governmental license, permit, or similar consent or authorization is required with respect to Subtenant’s use or occupancy of the Sublease Premises, including, without limitation, any improvements or alterations performed therein by or on behalf of Subtenant, Subtenant shall be responsible, at its sole cost and expense, for obtaining and maintaining such required licenses, permits, and authorizations, and shall at all times comply with the terms and conditions thereof.
10.Tax on Subtenant’s Personal Property.  Prior to delinquency, Subtenant shall pay all taxes levied or assessed upon Subtenant’s personal property in or about the Sublease Premises or other personal property from time to time located within the Sublease Premises for or on the account of Subtenant including (as applicable) any improvements existing as of the Commencement Date that are used by Subtenant and the FF&E (defined below) (collectively, “Subtenant’s Property”).  If the assessed value of Master Landlord’s or Sublandlord’s property is increased by the inclusion therein of a value placed upon Subtenant’s Property, then Subtenant shall pay 


10







Sublandlord, within ten (10) business days of Subtenant’s receipt of a written demand and evidence of said increased assessment and the basis therefor, the proportion of taxes so levied against Master Landlord or Sublandlord resulting from Subtenant’s Property.
11.Right of Entry.  Subject to the conditions of Article 55 of the Master Lease, Sublandlord, its employees, agents and representatives (“Sublandlord Parties”) shall have the right to enter the Sublease Premises for purposes of inspection, to post notices of non‐responsibility, to effect Sublandlord’s right to cure Subtenant defaults pursuant to Section 17, as required by law, or in cases of emergencies.  Sublandlord shall use commercially reasonable efforts to minimize interference with Subtenant’s use of the Sublease Premises during any such entry by any Sublandlord Parties.  No entry permitted hereunder shall be construed under any circumstances as a forcible or unlawful entry into, or a detainer of, the Sublease Premises, or an eviction of Subtenant.  Subtenant hereby waives any claim against any Sublandlord Parties for damages for interference with Subtenant’s business or quiet enjoyment of the Sublease Premises in connection with the right of entry set forth in this Section 11, except to the extent such claims or rent abatement are permitted by Article 55 of the Master Lease.
12.Indemnification and Limitation on Liability.
(a)    Indemnity.  Subtenant shall indemnify, protect, defend, and hold harmless Sublandlord and each of its affiliates, partners, members, directors, officers, employees, and agents, from and against any and all claims, suits, demands, liabilities, damages and expenses of every kind and description, including reasonable attorneys’ fees and costs, arising from or in connection with (i) Subtenant’s use of the Sublease Premises or the conduct of its business therein; (ii) any activity performed or permitted by Subtenant or any of its affiliates, partners, members, directors, officers, employees, agents, contractors or licensees in or around the Building; (iii) any Event of Default; or (iv) the willful misconduct or negligent acts or omissions of Subtenant or any of its affiliates, partners, members, directors, officers, employees, agents, contractors, or licensees.  Sublandlord shall indemnify, protect, defend, and hold harmless Subtenant and each of its affiliates, partners, members, directors, officers, employees, and agents, from and against any and all claims, suits, demands, liabilities, damages and expenses of every kind and description, including reasonable attorneys’ fees and costs, arising from or in connection with (i) Sublandlord’s breach of this Sublease or the Master Lease after the expiration of any applicable notice and cure period or (ii) the gross negligence or willful misconduct of any Sublandlord Party within the Sublease Premises.
(b)    Exclusions from Liability.  In no event shall Sublandlord be liable to Subtenant for any injury to any person in or about the Sublease Premises or damage to the Sublease Premises or for any loss, damage or injury to any property of Subtenant therein unless and to the extent such loss, damage or injury is caused by the gross negligence or willful misconduct of Sublandlord.  Without limiting the foregoing, in no event shall Sublandlord be liable to Subtenant for (i) injury to Subtenant’s business or loss of income relating to any damage or destruction of personal property (including without limitation, any loss of such records), or (ii) damages arising from any act, omission or neglect of any 


11







tenant in the Building or of any other third party (which third party is, for the avoidance of doubt, not a Sublandlord Party).
(c)    Sublandlord’s Obligations.  The obligations of Sublandlord under this Sublease do not constitute personal obligations of the individual directors, officers, employees, partners or shareholders of Sublandlord, and Subtenant shall not seek recourse against said individual directors, officers or shareholders of any of their personal assets for satisfaction of any liability with respect to this Sublease.
(d)    Limitation.  The indemnities set forth in Sections 12(a) shall not apply to the extent any liability or damage is covered by insurance maintained by Master Landlord and benefiting the Sublease Premises or Sublandlord and Subtenant, as applicable.  The indemnities pursuant to Section 12(a) are not intended to and shall not relieve any insurance carrier of its obligations under policies required to be or actually carried by either party pursuant to this Sublease.
13.Insurance; Waiver of Subrogation. 
(a)    Waiver of Subrogation.  Unless not available on commercially reasonable terms, Sublandlord and Subtenant shall have any and all fire, extended coverage (or cause of loss – special form or all risk) or any and all damage insurance that they may carry with respect to the Premises or the Building, or any portion thereof, endorsed with the following subrogation clause (or a clause materially identical thereto): “This insurance shall not be invalidated should the insured waive in writing prior to a loss any or all right of recovery against any party for loss occurring to the property described herein”; and Sublandlord and Subtenant hereby waive all claims for recovery from the other for any loss or damage to any of its property insured under valid and collectible insurance policies to the extent of any recovery collected under such insurance, subject to the limitation that this waiver shall apply only when it is permitted by the applicable policy of insurance.
(b)    Subtenant’s Insurance Coverage.  At all times during the Sublease Term, Subtenant, at its sole expense, shall obtain and keep in force with respect to each portion of the Sublease Premises and Subtenant’s operations in and about the Sublease Premises (i) commercial general liability insurance coverage (on an “occurrence basis”), including personal injury, bodily injury, death, broad form property damage, in limits not less than One Million Dollars ($1,000,000.00) per occurrence, not less than Two Million Dollars ($2,000,000.00) in the aggregate, and umbrella coverage of not less than Five Million Dollars ($5,000,000.00); (ii) insurance against loss or damage by fire and such other risks and hazards as are insurable under present standard forms of property insurance policies with respect to the personal property, furniture, furnishings and fixtures belonging to Subtenant located in the Sublease Premises for not less than 100% of the actual replacement value thereof; and (iii) loss of income and extra expense insurance in amounts as will reimburse Subtenant for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent tenants in the business of Subtenant or attributable to prevention of access to the Sublease Premises as a result of such perils, (iv) Worker’s Compensation and Employer’s Liability Insurance as required by all applicable laws and Governmental Requirements, with not less than the following limits:


12







Each Accident:        $500,000
Disease--Policy Limit:    $500,000
Disease--Each Employee:    $500,000


(c)    Policy Requirements.  All insurance policies required to be carried by Subtenant hereunder shall name Subtenant as named insured and shall include Sublandlord, Master Landlord, the Building manager, if any, the beneficiaries under any underlying deeds of trust, and the lessor(s) under any underlying leases as additional insureds, as specified in writing to Subtenant from time to time (it being agreed that Subtenant shall have a reasonable time following receipt of such written notice to add to its insurance policies those designated as additional insureds).  All insurance policies carried by Subtenant shall be issued by reputable insurers qualified to do business in Washington and have a Best rating at least equal to A-VII or the equivalent hereof.  Subtenant will deliver certificates of insurance to Sublandlord as soon as practicable after the placing of the insurance as required by the terms of this Sublease, but in no event more than five (5) business days following the Commencement Date and the date Subtenant receives all additional information requested by the insurance carrier, which certificates shall be in commercially reasonable form.  Subtenant shall notify Sublandlord in writing, by registered or certified U.S. Mail, return receipt requested, not less than thirty (30) days before any material change or reduction in coverage of insurance policy. 
(d)    Release.  To the extent permitted by law, Subtenant hereby releases the Sublandlord Parties from, and waives all claims for, damage to persons or property sustained by Subtenant, its agents or employees or any other occupant of the Building or the Sublease Premises (but in the case of agents, employees or other occupants, such waiver and release shall apply only to the extent Subtenant may legally waive and release claims by such third parties) resulting from (i) any accident in or about the Building or the Sublease Premises except to the extent resulting from the gross negligence or willful misconduct of the Sublandlord Parties, or (ii) resulting directly or indirectly from any act or neglect of any third party (which third party is, for the avoidance of doubt, not a Sublandlord Party).  Notwithstanding anything to the contrary herein, in no event shall Sublandlord or Subtenant be liable to the other party under this Sublease for any damage by reason of loss of profits, business interruption or other special or consequential damage; provided that such limitation shall not apply to any third-party claims. 
(e)    Sublandlord Insurance.  At all times during the Sublease Term, Sublandlord, at its sole expense, shall obtain and keep in force with respect to the Premises and Sublandlord’s operations (i) commercial general liability insurance coverage (on an “occurrence basis”), including personal injury, bodily injury, death, broad form property damage, in limits not less than One Million Dollars ($1,000,000.00) per occurrence, not less than Two Million Dollars ($2,000,000.00) in the aggregate, and umbrella coverage of not less than Five Million Dollars ($5,000,000.00); (ii) insurance against loss or damage by fire and such other risks and hazards as are insurable under present standard forms of property insurance policies with respect to the property, furniture, furnishings and fixtures belonging to Sublandlord located in the Premises for not less than 100% of the actual replacement 


13







value thereof; and (iii) Worker’s Compensation and Employer’s Liability Insurance as required by all applicable laws and Governmental Requirements.
14.Damage or Destruction.
(a)    Insurance Proceeds.  In the event the Sublease Premises or the Building shall be damaged or destroyed, Subtenant shall have no right to share in any proceeds from an insurance policy maintained by Master Landlord or Sublandlord (but Master Landlord may use such proceeds to rebuild the Sublease Premises to the extent required by the Master Lease (and shall rebuild if required to do so by the Master Lease)).  The continuation of the Sublease shall be subject to the rights of Sublandlord and Master Landlord under the Master Lease, and their respective exercise of such rights thereunder.  If the Sublease Premises shall be totally destroyed, this Sublease shall terminate at the written election of either Sublandlord or Subtenant.  If the Sublease Premises shall be damaged by fire, earthquake, or any other cause (other than the negligence or misconduct of Subtenant) so that the Sublease Premises cannot reasonably be made tenantable within one hundred twenty (120) days from the date of such damage, Sublandlord or Subtenant shall have the right to terminate this Sublease by written notice within 30 days from the date of such damage.  In any case where the Sublease Premises are rendered partially untenantable by fire, earthquake or any other cause (other than the negligence or misconduct of Subtenant), the monthly Rent shall be adjusted in the proportion that the rentable area of the untenantable portion of the Sublease Premises bears to the rentable area of the Sublease Premises (or totally abated if the usable portion is insufficient for the usual conduct of Subtenant’s business) until the untenantable portion of the Sublease Premises is restored and is tenantable by the Subtenant.  Except for any abatement of Rent expressly provided in this Sublease, Subtenant shall have no claim against Sublandlord for any damage suffered by reason of any such damage or destruction.
(b)    Inconsistent Statutes.  The provisions of this Sublease, including this Section 14, constitute an express agreement between Sublandlord and Subtenant with respect to any and all damages to, or destruction of, all or any part of the Sublease Premises and any statute or regulation of the State of Washington with respect to any rights or obligations concerning damage or destruction in any absence of an express agreement between the parties, and any similar statute or regulation now or hereafter in effect, shall have no application to this Sublease or to any damage to or destruction of all or any part of the Sublease Premises.
15.Assignment and Subletting.
(a)    Subtenant shall have no right to assign its interest in this Sublease or sub-sublet all or any portion of the Sublease Premises except with the prior written consent and approval of Sublandlord (which consent shall not be unreasonably withheld or delayed) and the prior written consent and approval of Master Landlord pursuant to the terms of Article 18 of the Master Lease.  Subtenant shall submit any request for consent to Sublandlord and Master Landlord for any proposed sub-sublease or assignment not less than thirty (30) days prior to such proposed sub-sublease or assignment.    Notwithstanding the foregoing, no consent of Sublandlord or Master Landlord will be required with respect to a transfer to 


14







a “Conveyee” as defined in the Master Lease, to the extent permitted under the Master Lease (a “Permitted Conveyee”).
(b)    Notwithstanding any assignment or sub-sublease, Subtenant shall at all times remain fully and primarily responsible and liable for the payment of Rent and for compliance with all of Subtenant’s other obligations under this Sublease.
(c)    If the total of all consideration owed by a sub-sublessee or assignee of Subtenant for such sub-sublease or assignment (including, without limitation, all amounts due and payable under the applicable sub-sublease or assignment agreement) exceeds the total Rent (excluding any amounts payable under this Section 15(c)) payable under this Sublease for the comparable period less the actual and reasonable brokerage fees, legal costs, and construction fees and any customary and market reasonable improvement allowance (“Excess Rent”), then Subtenant shall be bound and obligated to pay Sublandlord 50% of such Excess Rent, within ten (10) business days following receipt thereof by Subtenant. Notwithstanding anything to the contrary in this Sublease or any requirements in the Master Lease with respect to the collection of Excess Rent, Subtenant shall not be required to make any other payments of Excess Rent or other consideration in respect of its receipt of payments from a sub-sublessee except as set forth in this Section 15(c).  The foregoing will not apply to any transfer to a Permitted Conveyee.
(d)    If Subtenant shall sub-sublet the Sublease Premises or any part thereof (other than to a Permitted Conveyee), Subtenant hereby immediately and irrevocably assigns to Sublandlord, as security for Subtenant’s obligations under this Sublease, all rent from any such sub-subletting, and Sublandlord as assignee and as attorney-in-fact for Subtenant, or a receiver for Subtenant appointed on Sublandlord’s application, may collect such rent and apply it toward Subtenant’s obligations under this Sublease; except that, until the occurrence of an Event of Default, Subtenant shall have the right to collect such rent. Notwithstanding the foregoing, Subtenant shall remain ultimately responsible and liable for all amounts due and payable by any sub-subtenant.
16.Transfer of Sublandlord’s Interest.  Sublandlord shall have no right to transfer all or a part of its interest in the Sublease Premises or the Master Lease except, to the extent permitted by the Master Lease, with the prior written consent of Master Landlord.  In the event of any such transfer, Sublandlord shall be relieved of any and all obligations and liabilities hereunder accruing from and after the date such transferee assumes in full Sublandlord’s obligations hereunder.
17.Event of Default.  The occurrence of any of the following shall constitute an event of default by Subtenant under this Sublease (each, an “Event of Default”):
(a)    any failure of Subtenant to pay any amount of Rent or any other amounts to be paid by Subtenant under the terms of this Sublease within five (5) days after notice the same is due;
(b)    the failure of Subtenant to perform any non-monetary covenant, liability, or obligation of Subtenant under this Sublease, within thirty (30) days following written notice to Subtenant of such failure, provided, however, if such non-monetary default 


15







is not capable of cure within such thirty (30) day period, then no Event of Default shall be deemed to have occurred by reason of such failure so long as Subtenant (i) complies with the terms of the Master Lease, and (ii) promptly commences and diligently prosecutes such cure to completion, which cure must be completed within ninety (90) days of Sublandlord’s notice; and
(c)    the occurrence of any breach or default of the terms of the Master Lease caused by Subtenant, beyond applicable notice and cure periods, if any, available under the Master Lease with respect to such breach or default.
The occurrence of any Event of Default by Subtenant under this Sublease shall entitle Sublandlord to each and all of the rights and remedies afforded Master Landlord upon the occurrence of a default under the Master Lease, or otherwise available at law or in equity.
If Subtenant is in default under this Sublease beyond any applicable notice and cure period, without limiting any other remedies of Sublandlord provided hereunder, Sublandlord shall have the right, subject to the terms of Article 55 of the Master Lease as incorporated herein by reference, to cure such default on behalf of Subtenant, and Sublandlord shall have no liability to Subtenant by reason of such actions. Subtenant will reimburse Sublandlord for all out-of-pocket costs reasonably incurred by Sublandlord in curing any default pursuant to this paragraph.
If Sublandlord is in default under the Master Lease and Sublandlord fails to cure such default within thirty (30) days (or such shorter time as is reasonable in the event of circumstances creating an imminent risk of material damage to persons or property) of receiving written notice of such failure from Subtenant, Subtenant shall have the right, subject to the terms of the Master Lease, to cure such default on behalf of Sublandlord and neither Subtenant nor Master Landlord shall have any liability to Sublandlord by reason of such actions of Subtenant.  Sublandlord will reimburse Subtenant for all out-of-pocket costs reasonably incurred by Subtenant in curing any default pursuant to this paragraph.  
18.Estoppel Certificate.  Subtenant shall, at any time and from time to time upon not less than twenty (20) days’ prior notice by Sublandlord execute, acknowledge and deliver to Sublandlord a statement certifying that this Sublease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as so modified and stating the modifications), the dates to which Rent and other charges have been paid in advance, if any, stating to the actual knowledge of Subtenant, whether or not Sublandlord is in default in the performance of any covenant, agreement, or condition contained in this Sublease and, if so, specifying each such default of which Subtenant may have knowledge and containing any other information and certifications relating to this Sublease and the rights and obligations of the parties hereunder that reasonably may be requested by Sublandlord.  Any such statement delivered pursuant to this Section 18 may be relied upon by Sublandlord and any prospective purchaser of the Building or the land thereunder or any mortgagee, ground lessor or other like encumbrancer upon the Building or the Land, or Sublandlord’s leasehold interest therein.  Subtenant’s failure to deliver such statement within such time shall be deemed a statement that this Sublease is in full force and effect, without modification, except as may be represented by Sublandlord in such request, that there are no uncured Events of Default or events that with the giving of notice or passage of time would constitute Events 


16







of Default, that there are no material defaults in Sublandlord’s performance, and that not more than one month’s installment of Rent has been paid in advance.
19.Surrender of Sublease Premises and Removal of Subtenant’s Property.  Upon the expiration or earlier termination of this Sublease, Subtenant shall quit and surrender possession of the Sublease Premises to Sublandlord, broom clean, free and clear of all personal property of Subtenant and with all appurtenant systems, equipment and fixtures that are Subtenant’s obligation to maintain and repair in good order and repaired in serviceable condition, reasonable wear and tear, condemnation and insured casualty excepted, and shall, without expense to Sublandlord, remove or cause to be removed from the Sublease Premises all debris and rubbish, all Subtenant’s personal property, and Subtenant shall repair all damage to the Sublease Premises resulting from such removal.  Subtenant shall only be responsible for surrendering the Sublease Premises in the same or similar condition that it took possession of the Sublease Premises.  Subtenant will not be obligated to remove or restore any alterations or improvements existing in the Sublease Premises as of the Delivery Date (provided that Subtenant will not be required to remove any Subtenant Improvements unless the Master Landlord requires such removal).
20.Brokers.  Sublandlord and Subtenant each hereby warrants and represents that it has not had any contact or dealings with any person or broker, other than the brokers identified in the Basic Sublease Information section, that would permit such other person or broker to make a claim for the payment of any fee or brokerage commission in connection with the negotiation or consummation of this Sublease, and each shall indemnify and hold the other harmless from and against any liability with respect to any fee or brokerage commission arising out of any breach by such party of the foregoing warranties and representations.  Sublandlord will pay the brokers a commission pursuant to a separate agreement.
21.Rules and Regulations.  Master Landlord’s Rules and Regulations, as amended from time to time, for the Building are hereby incorporated herein and made a part of this Sublease.  Subtenant hereby acknowledges that, as of the date hereof, it has had an opportunity to review such Rules and Regulations.  Subtenant agrees to abide by and comply with each and every one of said Rules and Regulations and any amendments, modifications and/or additions thereto as may hereafter be adopted by Master Landlord or Sublandlord.
22.Signage.  Subtenant shall have the right to a listing in the Building lobby directory and signage on the floors on which the Sublease Premises are located as set forth in Section 11 of the Master Lease.  For the avoidance of doubt, nothing herein shall be construed as requiring Sublandlord to (i) remove its “eyebrow” and/or “monument” signage at the Premises, or (ii) transfer, convey or assign its rights, or any portion thereof, to have “eyebrow” and/or “monument” signage at the Premises.  
23.Furniture, Fixtures and Equipment.  The parties hereto hereby acknowledge that, as of the Commencement Date, certain items of Sublandlord’s personal property, including, without limitation, conference room, office and cubical furniture, electronics and seating, as more particularly described in Exhibit D attached hereto (collectively, the “FF&E”), are located within the Sublease Premises.  Notwithstanding anything to the contrary contained herein, as of the Commencement Date, Sublandlord does hereby give, grant, bargain, sell, transfer, assign, convey and deliver to Subtenant, at no cost to Subtenant, all of Sublandlord’s right, title and interest in and 


17







to the FF&E.  Subtenant agrees that it is accepting the FF&E on an “as is with all faults” basis, and except for Sublandlord’s warranty and representation that no third party has any lien, security or other interest in the FF&E, Subtenant is not relying on any warranties or representations of any kind whatsoever, express or implied, from Sublandlord, its officers, directors, partners, employees, agents, and contractors as to any matters concerning the FF&E.  Subtenant hereby waives, releases, acquits and forever discharges Sublandlord, Sublandlord’s officers, directors, employees, agents, partners, and any other persons acting on or in behalf of Sublandlord, and the successors and assigns of each of the foregoing, of and from any and all claims, liabilities, obligations, demands, actions, causes of action, demands, rights, damages, costs, expenses or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, that it now has, or which may arise in the future, on account of or in any way growing out of or connected with the FF&E.
24.Expansion.  
(a)    Subject and subordinate to any pre-existing rights of third parties previously granted by Master Landlord to occupy the Offer Space following expiration of the Master Lease (and Sublandlord hereby represents it has no knowledge of the existence of any such rights), and provided no Event of Default then exists, Sublandlord shall, prior to offering the same to any other party, first offer (the “Right of First Offer”) to sublease to Subtenant all, and not less than all, of any portion of the Premises located on the eighth (8th) floor of the Building (the “Offer Space”) from time to time when such Offer Space becomes available.  Such offer shall be in writing and shall specify the sublease terms for the Offer Space, including the rent to be paid for the Offer Space and the date on which the Offer Space shall be included as part of the Sublease Premises (the “Offer Notice”).  Within five (5) business days after Sublandlord delivers to Subtenant the Offer Notice, Subtenant shall notify Sublandlord in writing whether Subtenant elects to lease the entire Offer Space on the terms set forth in the Offer Notice.  If Subtenant timely elects to sublease the Offer Space, then Sublandlord and Subtenant shall execute an amendment to this Sublease, effective as of the date the Offer Space is to be included as part of the Sublease Premises, on the terms set forth in the Offer Notice and, to the extent not inconsistent with the Offer Notice terms, the terms of this Sublease (and Subtenant’s Proportionate Share, the Security Deposit, and the parking spaces to be rented pursuant to the Basic Sublease Information section, shall be equitably and proportionately increased in proportion to the increase in the rentable square footage of the Sublease Premises); however, the expansion of this Sublease to include the Offer Space as contemplated by this Section 24 shall be conditioned on Master Landlord’s prior written consent, and Subtenant shall accept the Offer Space in an “AS-IS” condition and Sublandlord shall not provide to Subtenant any allowances (e.g., moving allowance, construction allowance, and the like) or other subtenant inducements (including, without limitation, any rent credits or abatements) unless otherwise specifically provided in the Offer Notice.  
(b)    If Subtenant fails or is unable to timely exercise the Right of First Offer, then the Right of First Offer shall lapse, time being of the essence with respect to the exercise thereof, and Sublandlord may, in its sole discretion, terminate the portion of the Master Lease respecting the Offer Space or sublease all or a portion of the Offer Space to third parties on such terms as Sublandlord may elect; provided that in the event Sublandlord 


18







retains such Offer Space and subsequently elects to re-offer it for sublease, Sublandlord will again offer such space to Subtenant pursuant to this Section 24.  Subtenant may not exercise the Right of First Offer if an Event of Default exists or Subtenant is not then subleasing the entire Sublease Premises.  In no event shall Sublandlord be obligated to pay a commission with respect to any space subleased by Subtenant under this Section 24, and in the event Subtenant engages a broker to act on its behalf in connection with its lease of the Offer Space, Subtenant will be responsible for the payment of any commission owed to the broker so engaged by Subtenant.
(c)    Notwithstanding anything to the contrary contained in this Section 24, the Right of First Offer shall terminate and be of no further force or effect if (a) the Master Lease or Sublandlord’s right to possession of the Offer Space is terminated, (b) this Sublease or Subtenant’s right to possession of the Subleases Premises is terminated, or (c) there would, at the time of the execution of the amendment adding the Offer Space to this Sublease, be an Event of Default, or, at any time, there has been more than one (1) Event of Default.  The Right of First Offer shall be personal to Cascadian Therapeutics, Inc. or any Permitted Conveyee, and may not be exercised by any other assignee, subtenant or other transferee of or successor to any portion of the Subtenant’s interest in this Sublease or to the Sublease Premises.  Subtenant hereby acknowledges that Sublandlord’s obligations under this Section 24 are conditioned on Master Landlord’s prior written consent to any amendment adding the Offer Space to this Sublease.
(d)    In the event Subtenant leases the entire Offer Space, to the extent not prohibited under the Master Lease, the terms of Article 43 of the Master Lease (Roof Deck) will apply to and be incorporated into this Sublease and shall no longer be excluded pursuant to Section 6(b).
25.General Provisions.
(a)    Notices.
(i)    All notices to be given pursuant to this Sublease shall be either (i) personally delivered; or (ii) sent via overnight courier, signature required (such as Federal Express, DHL, etc.).  Receipt shall be deemed effective on the date of delivery or refusal, if personally delivered, or of delivery or refusal shown on the courier’s shipping receipt for such item, if sent via overnight courier.  All notices to be given pursuant to this Sublease shall be given to the parties at the following respective addresses:
		
	If to Sublandlord:
	CTI BioPharma, Corp. 
3101 Western Avenue, Suite 800  
Seattle, Washington 98121 
Attn:  Legal Affairs




19







with a copy to:    O’Melveny & Myers, LLP 
    400 South Hope Street 
    Los Angeles, California 90071 
    Attention: Brophy Christensen
		
	Address for rent payments:
	CTI BioPharma, Corp. 
3101 Western Avenue, Suite 800 
Seattle, Washington 98121 



		
	To Subtenant:
	Prior to the Commencement Date 
Cascadian Therapeutics, Inc. 
2601 Fourth Avenue, Suite 500 
Seattle, Washington  98121 
Attn: Legal Counsel




From and after the Commencement Date 
Cascadian Therapeutics, Inc. 
3101 Western Avenue, Suite 600  
Seattle, Washington 98121 
Attn:  Legal Counsel
In either case with a copy to:
Crosbie Gliner Schiffman Southard & Swanson LLP 
12750 High Bluff Drive, Suite 250 
San Diego, California 92130 
Attention: Dawn Saunders
		
	To Master Landlord:
	Selig Holdings Company LLC 
1000 Second Avenue, Suite 1800


Seattle, Washington 98104 
Attn:  John Greeley
(ii)    For the ninety (90)-day period following the Commencement Date, Subtenant shall use commercially reasonable efforts to forward promptly to Sublandlord any mail received by Subtenant at the Sublease Premises intended for Sublandlord.
(b)    Entire Agreement; No Oral Amendment.  All prior written and oral understandings, representations, warranties, and agreements between Sublandlord and Subtenant with respect to the Sublease Premises are superseded by and merged into this Sublease, which alone fully and completely sets forth the understanding of Sublandlord and Subtenant with respect to the Sublease Premises.  Subtenant acknowledges that neither Sublandlord nor Master Landlord (to the extent applicable to the Sublease Premises and expressly incorporated herein by reference), nor any agent of either such party has made 


20







any representation or warranty, except as may be expressly provided in this Sublease or the Master Lease, with respect to the Sublease Premises, the Building, or any other portion of the Land.  This Sublease may not be amended or modified in any respect whatsoever except by an instrument in writing signed by Sublandlord and Subtenant and, if required by the Master Lease, consented to in writing by Master Landlord.
(c)    No Waiver.  The waiver by Sublandlord or Subtenant of any breach or default of any term, provision, covenant, or condition contained in this Sublease, or the failure of such party to insist on the strict performance by the other party, shall not be deemed to be a waiver of such term, provision, covenant, or condition as to any subsequent breach or default thereof or of any other term, covenant, or condition contained in this Sublease.  The acceptance of Rent hereunder by Sublandlord or the payment of Rent hereunder by Subtenant shall not be deemed to be a waiver of any breach or default by Subtenant or Sublandlord, respectively, of any term, provision, covenant, or condition herein, other than the failure of Subtenant to pay the particular rent so accepted, regardless of Sublandlord’s or Subtenant’s respective knowledge of such breach or default at the time of acceptance or payment of rent.
(d)    Successors and Assigns.  This Sublease shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, representatives, and permitted successors and assigns of the parties hereto.
(e)    Severability.  If any term or provision of this Sublease, the deletion of which would not adversely affect the receipt of any material benefit by either party hereunder, shall be held invalid or unenforceable to any extent, the remaining terms, conditions, and covenants of this Sublease shall not be affected thereby and each of said terms, covenants, and conditions shall be valid and enforceable to the fullest extent permitted by all applicable laws and governmental requirements.
(f)    Attorneys’ Fees.  If either Sublandlord or Subtenant engages legal counsel to enforce its rights pursuant to this Sublease, the party receiving substantially the result it sought or defended (the “Prevailing Party”), whether by award, judgment, stipulation, settlement, workout, default, or otherwise and whether or not any legal action may have been instituted or instituted and then voluntarily dismissed, shall be entitled to recover from the adverse party all reasonable and actual attorneys’ fees and court costs incurred by the Prevailing Party.  This paragraph does not constitute a waiver of any rights under any Federal bankruptcy laws.
(g)    Relationship to Master Lease.  This Sublease is subject and subordinate to the Master Lease and to all matters to which the Master Lease is now or hereafter made subordinate (and protected by any SNDA provided to Sublandlord pursuant to Article 50 of the Master Lease to the extent such SNDA protects the Master Lease).  Subtenant’s interest in the Sublease Premises and rights under this Sublease are derivative of the Sublandlord’s rights under the Master Lease and Subtenant acknowledges and agrees that, notwithstanding anything to the contrary in this Sublease, Subtenant’s rights hereunder and with respect to the Sublease Premises shall be no greater than those of Sublandlord pursuant to the Master Lease. Without limiting any of Subtenant’s obligations under this 


21







Sublease, and without imposing any additional liability on Sublandlord to Subtenant, Sublandlord acknowledges that it shall remain liable to Master Landlord for all of its obligations under the Master Lease, and to the extent Subtenant is undertaking any of such obligations, such undertaking shall be joint and several with Sublandlord. As between Sublandlord and Master Landlord, in the event of any conflict between the provisions of the Master Lease and this Sublease, the provisions of the Master Lease shall govern.
(h)    Master Lease in Good Standing.  Sublandlord hereby represents and certifies that (i) the Master Lease is in full force and effect, (ii) Sublandlord has not received written notice of a pending default by Sublandlord under the Master Lease and is not aware of any default by Sublandlord under the Master Lease, (iii) to Sublandlord’s actual knowledge, Master Landlord is not in default under the Master Lease, and (iv) Sublandlord has the full right, power and authority to enter into this Sublease (subject to the consent of Master Landlord).
(i)    No Partnership or Joint Venture.  Nothing in this Sublease shall be construed as creating a partnership or joint venture between Sublandlord, Subtenant or any other party, or cause Subtenant or Sublandlord to be responsible for the debts of the other or of any third party.
(j)    Counterparts.  This Sublease may be executed in two or more counterparts, which may be delivered electronically, and, when so executed, will have the same force and effect as though all signatures appeared on a single document.  Any signature page of this Sublease may be detached from any counterpart without impairing the legal effect of any signatures thereon, and may be attached to another counterpart identical in form thereto by having attached to it one or more additional signature pages.  Each party may rely upon signatures delivered electronically or via facsimile as if such signatures were originals.  
(k)    No Recordation.  Neither this Sublease nor a memorandum thereof shall be filed by or on behalf of Subtenant in any public record.
(l)    Time.  Time is of the essence as to the performance of each party’s obligations under this Sublease.
(m)    No Third Party Benefits.  Except to the extent expressly provided otherwise in this Sublease, Sublandlord and Subtenant do not intend by any provision of this Sublease to confer any right, remedy, or benefit upon any third party, and no third party shall be entitled to enforce, or otherwise shall acquire any right, remedy, or benefit by reason of, any provision of this Sublease.
(n)    Quiet Enjoyment.  So long as Subtenant shall perform all of the covenants and agreements herein required to be performed by Subtenant, Subtenant shall, subject to the terms of this Sublease, at all times during the Sublease Term, have peaceful and quiet enjoyment of the Sublease Premises against any person claiming by, through or under Sublandlord.


22







(o)    SEC Filings.  Sublandlord and Subtenant will cooperate with one another in connection with any required filing of this Sublease with the Securities and Exchange Commission, including consulting with one another with respect to information which should be redacted from such filings (provided that neither party will be required to redact information which it reasonably believes is legally required to be included in any filing).
(p)    Master Landlord's Consent.  This Sublease is subject to and contingent upon Master Landlord's execution of the Master Landlord Consent in substantially the form attached hereto within thirty (30) days of the date hereof.  In the event Master Landlord does not so execute such Master Landlord Consent within such time, either party may terminate this Sublease upon written notice to the other party until such time as Master Landlord's consent is obtained.


[Signatures on following page]


23







IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the Effective Date.
		
	SUBLANDLORD:
	CTI BIOPHARMA, CORP.


a Washington corporation
	
		
	By:   
	                      /s/   Adam R. Craig




 Printed Name: Adam R. Craig 
 Title: Chief Executive Officer
		
	SUBTENANT:
	CASCADIAN THERAPEUTICS, INC. 
a Delaware corporation


	
		
	By:   
	                      /s/   Scott Myers




Printed Name: Scott Myers 
Title: Chief Executive Officer


24







For Sublandlord:
STATE OF     )
 
        ) ss:
 
COUNTY OF     )
I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the ________________________________________ of __________________________________________ to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:  ________________________
_______________________________________ 
Notary Public 
Print Name:_____________________________ 
My commission expires:  __________________
 
(Use this space for notarial stamp/seal)
Subtenant:
STATE OF     )
 
        ) ss:
 
COUNTY OF     )
I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the ________________________________________ of __________________________________________ to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:  ________________________
_______________________________________ 
Notary Public 
Print Name:_____________________________ 
My commission expires:  __________________


 
(Use this space for notarial stamp/seal)


25








EXHIBIT A
MASTER LEASE



A-1










B-2










B-3










B-4










B-5










B-6










B-7










B-8










B-9










B-10










B-11










B-12










B-13










B-14










B-15










B-16










B-17










B-18










B-19










B-20










B-21










B-22










B-23










B-24










B-25










B-26










B-27










B-28










B-29










B-30










B-31












B-32








EXHIBIT B
FLOOR PLANS FOR SUBLEASE PREMISES
6th Floor



B-1







7th Floor



B-2








EXHIBIT C
WORK LETTER
3101 WESTERN AVENUE
SEATTLE, WASHINGTON


All improvements to the Sublease Premises made to prepare the Sublease Premises for use and occupancy by Subtenant will be performed by Subtenant, and shall be referred to as “Subtenant Improvements”.  Subtenant shall install the “Subtenant Improvement Components”, attached as Exhibit A to this Work Letter; provided that the parties acknowledge that, as of the Effective Date, Sublandlord has capped off the interior communication stairwell between the seventh (7th) and eighth (8th) floors of the Building and located between the Sublease Premises and that portion of the Premises to be retained by Sublandlord.  Subtenant shall proceed with its work expeditiously, continuously and efficiently, and shall use its best efforts to complete the same within sixty (60) days after the date Sublandlord tenders access to the Sublease Premises to Subtenant pursuant to Section 3(b)(ii) of this Sublease.


If Subtenant desires to make any material change, addition, or alteration to the Subtenant Improvement Components, Subtenant shall prepare and submit to Sublandlord plans and specifications with respect to such proposed change, addition, or alteration.  Any such change, addition, or alteration shall be subject to Sublandlord’s approval, which shall not be unreasonably withheld.  Subtenant shall be responsible for any submission to and plan check and permit requirements of the City of Seattle or other governmental authorities.  Sublandlord reserves the right to require Subtenant to provide copies of any permits or approvals obtained by Subtenant in connection with the Subtenant Improvements.


Subtenant shall be solely responsible for all costs and expenses of the Subtenant Improvements.  Unless otherwise provided for in the Sublease, Sublandlord shall have no obligation to perform any work at the Sublease Premises or the Building or provide any money or materials in connection with Subtenant Improvements or Subtenant’s use or occupancy of the Sublease Premises. 


Without limiting the indemnification obligations of Subtenant set forth in the Sublease, Subtenant shall indemnify, protect, defend, and hold harmless Sublandlord and its affiliates, partners, members, directors, officers, employees and agents from and against any and all claims, suits, demands, liabilities, damages, and expenses of every kind and description, including reasonable attorneys’ fees and costs, that may arise out of or be connected in any way with Subtenant Improvements, except to the extent any liabilities arise out of the willful misconduct or negligence of Sublandlord or its respective affiliates, partners, members, directors, officers, employees, agents, contractors, or licensees.  


Any mechanic’s lien filed against the Building or the Sublease Premises for Subtenant’s Improvements or materials claimed to have been furnished to Subtenant shall be discharged of record (or covered by bond in accordance with all applicable laws and governmental requirements) by Subtenant at Subtenant’s sole cost within twenty (20) days after Subtenant receives notice of the 


C-1    







filing thereof but in all events prior to the initiation of foreclosure proceedings with respect to any such lien.


Subtenant shall notify Sublandlord upon completion of the Subtenant Improvements, and shall, at its expense, obtain and deliver to Sublandlord a certificate of occupancy from the appropriate governmental authority for the Subleases Premises, if applicable.  All construction to be performed by or on behalf of Subtenant shall be performed in a workmanlike manner, comply with applicable law and industry standards, be subject to any applicable requirements under the Master Lease, including, without limitation, any insurance requirements relating to Subtenant’s contractors and any notification or approval obligations.  To the extent such insurance requirements are not set forth in the Master Lease, Subtenant shall secure and maintain throughout construction of the improvements such insurance coverages and policies as a prudent tenant and its contractors would keep in force during construction.


    






































[Remainder of page intentionally left blank]


C-2    







EXHIBIT A TO WORK LETTER


SUBTENANT IMPROVEMENT COMPONENTS


		
	1)
	Remove cubicles and replace with new workstations, run new wiring to said workstations as necessary


		
	2)
	Provide updated cabling throughout as required


		
	3)
	Security system installation or upgrades 


		
	4)
	Paint and patch as necessary


		
	5)
	Installation of signage.












C-3    








EXHIBIT D
LIST OF FF&E


	
		
	Qty
	Description

	 
	 

	 
	IT/network closets

	2
	HVAC units and controls for IDF/network closets (6005, 7034). Units maintained by Holladay Parks

	1
	Structured Cat 5e cabling, patch panels, wire management, wall jacks, floor 6, approx. 344 runs

	1
	Structured Cat 5e cabling, patch panels, wire management, wall jacks, floor 7, approx. 394 runs

	14
	Wireless access point hanger boxes and Cat 5e cabling routed to IDF rooms (7 per floor)

	2
	APC UPS battery backup systems for IDF/network closets (6005, 7034)

	6
	APC server racks, three per IDF room (6005, 7034)

	2
	IT workbench, one large, one small w/ casters (7045)

	 
	 

	 
	Audio-visual

	2
	Audio-visual control systems, Crestron (6001, 6026-6027). With iPad control. A/V systems maintained by Avidex

	1
	Audio amplifiers, cordless microphones, rack and speakers

	1
	Projector, Christie LWU420, ceiling-mounted (6001)

	2
	Projector, Christie LWU420, ceiling-mounted (6026-6027)

	1
	Projector, NEC NP2000, ceiling-mounted (6003)

	1
	Projector, Infocus in15 (7055)

	3
	TV, Sharp 55" wall-mounted (6063, 7002, 7098)

	 
	 

	 
	Security system components

	10
	Access card key reader pads, door solenoids, w/ wiring routed to IDF rooms

	 
	 

	 
	Kitchen appliances

	1
	Set, built-in appliances: double refrigerator, freezer, dishwasher (6th floor assembly area 6030)

	2
	Refrigerator, full-size (6007, 7009)

	3
	Refrigerator, under counter (6006, 6064, 7092)

	4
	Microwave oven (7009, 7092)

	4
	Dishwasher, built-in (6006, 6064, 7009)

	1
	Dishwasher, spare, still in-box (6042)

	 
	 

	 
	Break areas

	1
	Set, break table and 8 designer bar stools (6th floor assembly area 6030)

	1
	Set, break table and 5 designer bar stools (7000)

	1
	Set, break table and 5 designer bar stools (7053)

	6
	Chairs, swivel, green designer (7001, 7054)

	1
	White round designer coffee table (7054)

	 
	 

	 
	Auditorium






D-1    







	
		
	11
	Tables, auditorium (6026-6027)

	170
	Chairs, stackable auditorium (100+ in auditorium 6026-6027, remainder distributed on floors 6 & 7)

	 
	 

	 
	Conference rooms

	23
	Chairs, conference room (6001)

	14
	Chairs, conference room (6003)

	10
	Chairs, conference room (6074)

	8
	Chairs, conference room (6063)

	5
	Chairs, conference room (7055)

	6
	Chairs, conference room (7103)

	6
	Chairs, conference room (7020)

	7
	Table, conference room (6001, 6003, 6063, 6074, 7020, 7103, 7055)

	4
	A/V carts (6003, 6074, 7055, 7103)

	 
	 

	 
	Office furniture

	19
	Set, incl desk, overhead bin, file cabinet, chair, dry erase board - 6th floor

	36
	Set, incl desk, overhead bin, file cabinet, chair, dry erase board - 7th floor

	 
	 

	 
	Cubicles

	14
	Set, incl desk surface, overhead bin, pedestal file cabinet, chair - 6th floor

	50
	Set, incl desk surface, overhead bin, pedestal file cabinet, chair - 7th floor

	 
	 

	 
	Executive office furniture

	2
	Set, executive office furniture, incl desk, conf table, four upholstered chairs, file cabinets, wardrobe (7002, 7098)

	 
	 

	 
	Reception area

	1
	Set, built-in reception desk, worksurface and under counter cabinets

	1
	Set, reception area furniture: designer couch, white round coffee table, two chairs (6000)

	1
	Set, phone room table and chair (6002)

	 
	 

	 
	Miscellaneous

	15
	Chairs, Herman Miller Aeron

	 
	Upholstered chairs, various

	 
	Office chairs, various

	 
	File cabinets, various

	 
	Whiteboards, chair mats, recycle bins, refuse bins, various










D-2    








EXHIBIT E
LEGAL DESCRIPTION



The Sublease Premises are commonly known as Suites 600 and 700 as depicted in Exhibit B above.






E-1    








EXHIBIT F
FORM OF LANDLORD CONSENT TO SUBLEASE AND RECOGNITION AGREEMENT
This Consent to Sublease and Recognition Agreement ("Consent Agreement") is dated as of the _____ day of December, 2017, by and between SELIG HOLDINGS COMPANY LLC, a Delaware limited liability company ("Master Landlord"), CASCADIAN THERAPEUTICS, INC., a Delaware corporation ("Subtenant"), and acknowledged by CTI BIOPHARMA, CORP., a Washington corporation ("Sublandlord").
RECITALS
A.    Master Landlord, as "Landlord," and Sublandlord, as "Tenant", entered into that certain Office Lease Agreement dated January 27, 2012 (the "Master Lease").  Pursuant to the assignment provisions of the Master Lease, Sublandlord is currently entering into that certain Sublease dated as of December ____, 2017, by and between Sublandlord and Subtenant (the “Sublease”).  In accordance with the Sublease, Subtenant will be subleasing from Sublandlord a portion of the Premises which is the subject of the Master Lease consisting of approximately 44,050 rentable square feet (the “Sublease Premises”).  Subtenant also has the option to expand the Sublease Premises to include the eighth (8th) floor of the Building (i.e., the entire leasehold estate described in the Master Lease) on the terms and conditions more particularly set forth in the Sublease.  
B.    In connection with Master Landlord's consent to the Sublease, the parties wish to provide for recognition of the interest of Subtenant in the Sublease Premises in the event of a default under the Master Lease by Sublandlord in accordance with the terms and conditions provided herein.
C.    Unless otherwise defined in this Consent Agreement, all capitalized terms used herein have the meanings ascribed to them in the Master Lease.
AGREEMENT
Master Landlord hereby consents to the Sublease and the parties further agree as follows:
		
	1.
	Consent.  Landlord consents to the Sublease without waiver of any restriction in the Master Lease concerning further assignment, subletting or transfer. Landlord represents that the Master Lease constitutes the entire agreement of Landlord and Tenant concerning the leasing of the Master Premises and has not been amended or modified.  Landlord further represents that, to Landlord's knowledge, Tenant is currently in full compliance with its obligations under the Master Lease.


		
	2.
	Acknowledgement of Terms.  Landlord specifically consents to the installation of the Subtenant Improvements set forth in Exhibit A to Exhibit C to the Sublease.  In addition, Master Landlord confirms that Subtenant’s employees will have access to the upper level fitness center to the same degree as Sublandlord’s employees pursuant to the Master Lease. Master Landlord consents to any expansion of the Sublease Premises pursuant to the expansion option set forth in Section 24 of the Sublease.


		
	3.
	Acceptance of Master Lease. From the commencement date of the Sublease, Subtenant specifically consents to be bound by all terms and conditions of the Master Lease as incorporated into the Sublease and to perform all obligations made Subtenant’s responsibility under the Sublease under the Master Lease with respect to the Sublease Premises during the Sublease Term. Notwithstanding anything to the contrary in the Sublease or this Consent Agreement, but without limiting any of Subtenant’s obligations under the Sublease, Sublandlord shall remain liable to Master Landlord for all of its obligations under the Master Lease, and to the extent Subtenant is undertaking any of such obligations, such undertaking shall be joint and several with Sublandlord.  




F-1











		
	4.
	Sublease Recognition.  To the extent all Rent and Additional Rent (each as defined in the Sublease) owed by Subtenant under the Sublease has been timely paid and Subtenant is not in default under any terms of the Sublease (after any applicable notice and cure period), Master Landlord shall not disturb Subtenant's possession and occupancy of the Sublease Premises (as the same exists from time to time) during the term of the Sublease.  If Master Landlord elects to terminate the Master Lease (a “Recognition Event”) due to the occurrence of an event of default or otherwise that is not caused by Subtenant, or if the Master Lease is rejected in the course of a bankruptcy proceeding, Master Landlord agrees to recognize the Sublease as a direct contract between Master Landlord and Subtenant on all of the terms of the Sublease, except for the payment of Base Rent and Additional Rent, which shall be as set forth in the Master Lease (the “Recognition Rent”).  Notwithstanding the foregoing, Section 24 (Expansion) of the Sublease will not be made a part of any direct contract between Master Landlord and Subtenant and, except to the extent such expansion right is exercised prior to a Recognition Event, Master Landlord will not recognize the expansion right in connection with this Section 3.  In addition, in the event of a Recognition Event, Subtenant will not be obligated to pay any Security Deposit to Master Landlord unless and until the Security Deposit held by Sublandlord pursuant to the Sublease is returned to Subtenant as required by the Sublease, and in no event will Section 5(g)(ii) of the Sublease apply to Master Landlord (whether or not it receives a Security Deposit in connection with a Recognition Event).  For purposes of such recognition, all references in the Sublease to “Sublandlord” shall refer to Master Landlord, subject to the terms of this Consent Agreement.  Such recognition shall be effective as of the date of the termination or rejection of the Master Lease, as applicable (the "Recognition Date"), provided that in no event will Master Landlord or Subtenant have any liability (or be responsible for) any obligations of Sublandlord under the Sublease or Master Lease accruing or occurring prior to the Recognition Date other than any obligations Subtenant has arising from Subtenant’s occupancy of the Sublease Premises or the terms of the Sublease that have not been fulfilled prior to the Recognition Date, whether monetary or otherwise.  At the request of either party, Master Landlord and Subtenant will execute any documents required or desired to effectuate the direct contractual relationship of Master Landlord and Subtenant pursuant to the foregoing recognition agreement; provided that no separate agreement will be required, and the foregoing recognition will be effective upon the Recognition Date with or without a separate written agreement.  Upon the Recognition Date, Subtenant will pay all Recognition rent directly to Master Landlord in the manner set forth in the Master Lease at such place as Master Landlord shall designate in writing to Subtenant.


		
	5.
	Premises.  Sublandlord and Subtenant have agreed upon the configuration of the Subleasehold estate.  A diagram is attached hereto and by this reference made a part hereof.


		
	6.
	Subtenant Covenants.  Subtenant agrees that as of the Recognition Date it shall:


		
	a)
	Attorn to and accept Master Landlord as its direct Sublandlord under the Sublease for the remainder of the term under the Sublease;


		
	b)
	Comply with the applicable terms and conditions of the Master Lease and perform all obligations of Sublandlord under the Master Lease with respect to the Sublease Premises as incorporated into the Sublease; and comply with all the terms and conditions of the Sublease, performing all of Subtenant's obligations thereunder; and


		
	c)
	Pay directly to Master Landlord the Recognition Rent and all other amounts payable under the Sublease, when due thereunder. 


Further, Subtenant agrees that Master Landlord, its successors, and assigns shall not be:


F-2











		
	a)
	Subject to any credits, offsets, defenses or claims that Subtenant might have against Sublandlord;


		
	b)
	Liable for any act or omission of Sublandlord prior to the Recognition Date and the succession of Master Landlord as Sublandlord; or


		
	c)
	Bound by any covenant to undertake, complete, or pay for any improvement to the Sublease Premises. 


Subtenant agrees that Landlord shall not be bound by any provision in the Sublease that:
		
	d)
	Creates any rights or remedies in the Subtenant that are greater than the rights of Sublandlord under the Master Lease; or


		
	e)
	Increases Master Landlord's obligations under the Master Lease. 


		
	7.
	Lender Provisions.  Master Landlord's lender, if any, has approved the Sublease, if such approval is necessary.  In the event the recognition right set forth herein becomes effective, Master Landlord agrees to use commercially reasonable efforts to obtain from its lender a commercially reasonable subordination, non-disturbance and attornment agreement in favor of Subtenant agreeing that Subtenant’s rights pursuant to this Consent Agreement (and the Sublease and Master Lease pursuant to the recognition right) will not be disturbed so long as Subtenant is not in default after the expiration of any applicable notice and cure periods.


		
	8.
	No Limit on Master Landlord Remedies.  Nothing in this Consent Agreement shall prevent Master Landlord from taking any action under applicable law against Sublandlord to recover possession of the Premises and seek monetary damages for any default of Sublandlord pursuant to the Master Lease, subject to the Master Lease (and subject to Subtenant's rights under the Sublease and this Consent Agreement as herein set forth).  As of the Recognition Date, Subtenant and Master Landlord agree that they will have direct contractual privity and therefore Master Landlord will communicate directly with Subtenant (and may proceed directly against Subtenant), with or without notice to, or consent or involvement of Sublandlord, to enforce all of the obligations of Subtenant, as the direct tenant of Master Landlord (and prior to such Recognition Date, nothing in this Consent Agreement will be construed to create direct contractual privity between Master Landlord and Subtenant).


		
	9.
	Sublandlord’s Obligations.  Sublandlord has executed this Consent Agreement solely to confirm that it has knowledge of the terms hereof and has no objection to such terms.  Master Landlord has relied on Sublandlord’s statement set forth in this paragraph 8 as a portion of the consideration for granting its consent.


		
	10.
	Consent to Amendments.  Master Landlord will retain the right to consent to any amendment to the Sublease in accordance with the terms of the Master Lease.


		
	11.
	Survival.  This Consent Agreement and the rights derived herefrom shall survive the expiration or earlier termination or rejection of the Master Lease.


		
	12.
	Counterparts.  This Consent Agreement may be may be executed in two or more counterparts, which may be delivered electronically, and, when so executed, will have the same force and effect as though all signatures appeared on a single document.  Any signature page of this Consent Agreement may be detached from any counterpart without impairing the legal effect of any signatures thereon, and may be attached to another counterpart identical in form thereto by having attached to it one or more additional signature pages.  Each party may rely upon signatures delivered electronically or via facsimile as if such signatures were originals.


[Signature Page Follows]


F-3











IN WITNESS WHEREOF, Master Landlord, Sublandlord and Subtenant have executed this Consent Agreement as of the day and year first above written.


	
		
	MASTER LANDLORD:


SELIG HOLDINGS COMPANY LLC,  
a Delaware limited liability company


By:                                                            
Print Name:                                              
Title:                                                         




By:                                                            
Print Name:                                              
Title:                                                         


	SUBTENANT:


CASCADIAN THERAPEUTICS, INC.,  
a Delaware corporation 


By:                                                               
Print Name:                                                 
Title:                                                            




By:                                                              
Print Name:                                                
Title:                                                           



	

Acknowledged by:


SUBLANDLORD:


CTI BIOPHARMA, CORP.,  
a Washington corporation 


By:                                                           
Print Name:                                             
Title:                                                        




By:                                                           
Print Name:                                             
Title:                                                        
	 






F-4











For Master Landlord:
STATE OF     )
 
        ) ss:
 
COUNTY OF     )
I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the ________________________________________ of __________________________________________ to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:  ________________________
_______________________________________ 
Notary Public 
Print Name:_____________________________ 
My commission expires:  __________________


 
(Use this space for notarial stamp/seal)


F-5











For Subtenant:
STATE OF     )
 
        ) ss:
 
COUNTY OF     )
I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the ________________________________________ of __________________________________________ to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:  ________________________
_______________________________________ 
Notary Public 
Print Name:_____________________________ 
My commission expires:  __________________


 
(Use this space for notarial stamp/seal)




 





F-6











For Sublandlord:
STATE OF     )
 
        ) ss:
 
COUNTY OF     )
I certify that I know or have satisfactory evidence that __________________________________ is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument and acknowledged it as the ________________________________________ of __________________________________________ to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:  ________________________
_______________________________________ 
Notary Public 
Print Name:_____________________________ 
My commission expires:  __________________


 
(Use this space for notarial stamp/seal)


F-7