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SUBLEASE AGREEMENT    
  

    This
Sublease Agreement ("Sublease"), dated December 8, 2000, is made between SUNHAWK.COM CORPORATION ("Sublessor") and DAILYSHOPPER.COM, INC. ("Sublessee"). 

 
 

R E C I T A L S    
  

    A.  Sublessor
and 223 TAYLOR CORP. (as "Master Lessor") entered into a written lease dated August 10, 1998, regarding Suite 200 of the building known as the 223
TAYLOR BUILDING (the "Building"). Said lease, together with all modifications thereto, is referred to herein as the "Master Lease", and the premises covered by the Master Lease is herein collectively
called "Master Premises". A copy of the Master Lease is attached hereto as Exhibit A.

 
 

A G R E E M E N T    
  

    NOW, THEREFORE, the parties hereto agree as follow: 

	1.
	Premises
and Equipment 

    a.  Premises

    Sublessor
hereby subleases to Sublessee on the terms and conditions set forth in this Sublease a portion of the Master Premises containing an agreed area of 5805 rentable square feet,
currently known as Suite(s) 201, as shown on Exhibit C ("Premises"). The Premises include those common areas shown on attached  Exhibit C including, without limitation, restrooms, hallways, kitchen area, and conference rooms. 

    b.  Equipment

    Sublessor
hereby subleases to Subleasee the furniture systems currently located at the Premises, which include cubicles, workstations, and the like (the "Equipment"). Sublessee shall
pay no additional rent for the lease of the Equipment. Sublessee shall return the Equipment to Sublessor at the end of the Term in the same condition as it was in when it was received by Sublessee,
ordinary wear and tear and damage by casualty excepted. Sublessee shall deposit an additional $5,000 as security to ensure that Sublessee returns the Equipment to Sublessor in the condition required
by this Section 1.b. 

	2.
	Term
and Possession 

    a.  Term

    Provided
Master Lessor has consented to this Sublease ("Consent"), the initial term of this Sublease ("Initial Term") shall commence on January 1, 2001 ("Commencement Date"),
and shall end on December 31, 2001. After December 31, 2001, this Sublease shall continue on a month-to-month basis on the same terms and conditions, except that
either party may terminate it after the Initial Term upon giving the other party written notice of termination at least 90 days in advance of the termination date ("Expiration Date"). The
period of time from the Commencement Date until the Expiration Date, or the date of any sooner termination of this Sublease, may be referred to herein as the "Term." Upon execution of this Sublease,
Sublessee, its agents and contractors shall be allowed access to the Premises (for example, to install its telephone system, and move in its personal property) with no obligation to pay rent. If
Sublessee occupies the space and conducts business prior to January 1, 2001, such date shall be considered the Commencement Date. 

    b.  Condition
of Premises 

    On
or before December 15, 2000, Sublessor shall remove all personal property from the Premises, and deliver the Premises to Sublessee in "broom Clean" condition. Otherwise,
Subleasee shall accept the Premises and the equipment in an "as-is, where-is" condition ("Possession"). If Sublessor is not able to deliver Possession to Sublessee on the
Commencement Date notwithstanding Sublessor's reasonable, good faith efforts, Base Rent, as defined in Section 3(a), shall abate until delivery of Possession. If Possession is not delivered
within fifteen (15) days of the Commencement Date, then 

 

Sublessee has the option to cancel this Sublease be delivering written notice of termination to Sublessor. 

	3.
	Base
Rent, Operating Expenses and Late Charge 

    a.  Base
Rent 

    Sublessee
shall pay to Sublessor, on or before the first day of each calendar month, Base Rent in the amount of (i) $8,923.39 from the Commencement Date through the eighth
month of the Initial Term, and (ii) $9,407.14 for each month thereafter until the end of the Term. The monthly installments of Base Rent shall be prorated at the rate of 1/30 of
the monthly Base Rent per day for any partial month during the Term. Payment shall be made to the following address: Sunhawk.com Corporation, 223 Taylor Avenue, Suite 200, Seattle, WA 98109,
Attention: Tricia Parks-Holbrook. 

    b.  Operating
Expenses 

    Sublessee
shall pay to Sublessor, as additional rent, 30.19 percent (30.19%) of the Operating Costs (as defined in the Master Lease) chargeable to the Master Premises. If the
Master Lease provides for the payment by Sublessor of Operating Costs on the basis of an estimate thereof, then as and when adjustments between estimated and actual Operating Costs are made under the
Master Lease, the obligations of Sublessor and Sublessee hereunder shall be adjusted in a like manner; and if any such adjustment shall occur after the expiration or earlier termination of the Term,
then the obligations of Sublessor and Sublessee under this Paragraph shall survive such expiration or termination. Such increase in operating costs shall be due within fifteen (15) days after
Sublessee's receipt from Sublessor of an itemized statement of such costs, accompanied by copies of appropriate invoices. Payments by Sublessee will be on the same basis as Sublessor's payments to
Landlord in the Master Lease. 

    c.  Late
Charge 

    Sublessee
acknowledges that paying Base Rent late will cause Sublessor to incur administrative, collection, processing and accounting costs and expenses not contemplated under this
Sublease, the exact amounts of which are extremely difficult or impracticable to fix. Sublessee therefore agrees that if rent or any other sum is due and payable pursuant to this Sublease, such
amounts shall be payable upon the same terms and conditions as the Master Lease and the same late charges shall apply. Sublessor and Sublessee agree that this late charge represents a reasonable
estimate of such costs and
expenses and is fair compensation to Sublessor for its loss caused by Sublessee's nonpayment. Should Sublessee pay the monthly rent late, but fail to pay said late charge, or pay said late charge, but
fail to pay contemporaneously therewith all unpaid amounts of Rent, Sublessor's acceptance of the late rent or said late charge shall not constitute a waiver of Sublessee's default with respect to
Sublessee's nonpayment, nor prevent Sublessor from exercising all other rights and remedies available to Sublessor under this Lease or under law. 

    d.  Security
Deposit 

    Within
ten (10) business days after the execution of this Sublease, Sublessee shall pay to Sublessor the first month's rent due and provide Sublessor with security in the sum
of Nine Thousand Four Hundred Seven and 14/100 Dollars ($9,407.14) ("Security Deposit"). The Security Deposit may, at Sublessee's option, either be in the form of a Letter of Credit or cash held in an
escrow account. The Letter of Credit shall be issued by a financial institution selected by Sublessee doing business in the state of Washington, and shall allow Sublessor to draw up to the amount of
the Security Deposit upon submitting to the financial institution a written notice copied to Sublessee stating that Sublessee is in default and stating the amount to be disbursed to cure the default.
Sublessee may likewise select the escrow agent, and the terms of the escrow shall allow Sublessor to receive a disbursement from the escrow agent up to the amount of the Security Deposit upon
submitting to the escrow agent a written notice copied to Sublessee stating that Sublessee is in default and stating the amount necessary to cure 

2

 

the default. If Sublessee fails to pay rent or other charges when due under this Sublease, or fails to perform any of its obligations hereunder, Sublessor may use or apply all or any portion of the
Security Deposit for the payment of any sum for which the Sublessor may become obligated by reason of Sublessee's default or breach, or for any loss or damage sustained by Sublessor as a result of
Sublessee's default or breach. If Sublessor so uses any portion of the Security Deposit, Sublessee shall, within ten (10) days after written demand by Sublessor, restore the Security Deposit to
the full amount originally deposited less any amounts applied to the first months' rent, and Sublessee's failure to do so shall constitute a default under this Sublease. If Sublessor assigns its
interest in this Sublease, Sublessor shall assign to its assignee Sublessor's interest in the Letter of Credit or escrow account, as the case may be. Within thirty (30) days after the Term has
expired, or Sublessee has vacated the Premises, whichever shall last occur, and provided Sublessee is not then in default of any of its obligations hereunder, the Security Deposit, or so much thereof
as had not therefore been applied by Sublessor, shall be returned to Sublessee or to the last assignee, if any, of Sublessee's interest. 

	4.
	Use
of Premises 

    The
Premises shall be used and occupied only for purposes allowed under the Master Lease. Additionally, until such time as the restroom facilities are remodeled and upgraded to
support additional use, and the Sublessor gives its written consent, the Subleasee shall not occupy the Premises with more than 50 people at any given time. 

	5.
	Parking

    Sublessee
shall be entitled to the use of twelve (12) of Sublessor's parking spaces, which are guaranteed in the Master Lease, upon the same terms and conditions as the Master
Lease. 

	6.
	Assignment
and Sublease 

    Neither
this Sublease nor any right hereunder nor the Premises may be assigned, transferred, encumbered or sublet in whole or in part by Sublessee without Sublessor's and Landlord's
prior written consent. 

	7.
	Incorporation
by Reference 

    a.  Subject
to Lease 

    This
Sublease is subject to all of the terms and conditions of the Master Lease by and between Sublessor and Master Lessor. 

    b.  Interpretation 

    All
terms and conditions of the Master Lease, are incorporated into and made a part of this Sublease as if Sublessor were the Master Lessor thereunder, Sublessee the Tenant
thereunder, and the Master Premises were the Premses, except for those provisions of the Master Lease which are directly contradicted by this Sublease, in which event the terms of this Sublease shall
control over the Master Lease and except for the following provisions of the Master Lease: First Amendment, Sections 1, 3.1, 3.3, 3.6, 4.1, 5, 8.4, Rider 1, and those portions of  Exhibit D titled
"Rent," "Improvements," "Early
Termination," "Telecommunitcations," "Commencement," "Right of First Refusal," "Security Alarm," and "Optical Cable." Sublessee assumes and agrees to perform the Sublessor's obligations under the
Master Lease during the Term to the extent that such obligations are applicable to the Premises, provided, however, Sublessor shall be responsible for
paying Rent, as provided in the Master Lease, to the Master Lessor. Therefore, for the purposes of this Sublease, wherever in the Master Lease the word "Lessor/Landlord" is used it shall be deemed to
mean Sublessor herein and wherever in the Master Lease the word "Lessee/Tenant" is used it shall be deemed to mean Sublessee herein. 

3

 
	8.
	Sublessor's
Representations and Warranties 

    Sublessor
represents and warrants to Sublessee the following: 

    a.  The
Master Lease is in full force and effect and has not been modified, supplemented or amended except as described in  Exhibit A.

    b.  Sublessor
has the right to full and complete possession of the Premises. 

    c.  Sublessor,
at the time of signing this Sublease, at the Commencement Date, and at the time of delivering Possession, has fulfilled all its duties under the Master
Lease and is not in default under the Master Lease. 

    d.  To
the best of Sublessor's knowledge, Master Lessor has fulfilled all its duties under the Master Lease and is not in default under the Master Lease. 

    e.  Sublessor
has not assigned, transferred or delegated any of its rights or duties under the Master Lease or pledged or encumbered any of its interest in, or rights
under the Master Lease. 

    f.   This
Sublease shall be of no force or effect unless consented to by Master Lessor by execution of the Consent attached hereto as  Exhibit B.

    g.  Sublessor
has all right, power and authority necessary to enter into and deliver this Sublease and to perform its obligations hereunder. Sublessor's entering into
this Sublease does not breach or contradict any other agreement or contract that Sublessor is a party to. 

    h.  Sublessors
has or will comply with all requirements, performed all duties, and take all actions necessary under Section 15 of the Master Lease to properly
sublet the Premises. 

	9.
	Covenants
Regarding Master Lease 

    a.  Sublessor
shall use best efforts not to commit or suffer any act or omission that will result in a violation of or default under any of the provisions of the Master
Lease. 

    b.  Sublessor
shall exercise commercially reasonable efforts in attempting to cause Master Lessor to perform its obligations and give any required consents under the
Master Lease for the benefit of Sublessee, including, without limitation, consent to this Sublease. 

    c.  With
respect to the Premises, unless the context requires otherwise, Sublessor shall perform all duties of Master Lessor and Sublessee shall perform all duties of
Tenant under the Master Lease. 

    d.  Sublessor
agrees to deliver to Sublessee a copy of any notice received from Master Lessor relating to the Premises within five (5) business days of its
receipt thereof. 

    e.  In
the event that Sublessor defaults under its obligations to be performed under the Master Lease, Sublessee shall have the right to cure the default, for the
Premises, before the date Sublessor's applicable cure period expires. If Sublessee cures such default, Sublessor shall reimburse Sublessee for such amounts within fifteen (15) days after
receipt of written notice and demand therefore from Sublessee. If Sublessor fails to reimburse Sublessee within such fifteen-day period, Sublessee may deduct such amounts from subsequent
installments of rent due to Sublessor under this Sublease. 

    f.   Sublessor
shall not voluntarily terminate the Master Lease without Sublessee's prior written consent which shall not be unreasonably withheld and will be delivered
to Sublessor within three business days
of Sublessor's notice to terminate. This sublease shall terminate no sooner than ninety days after such consent has been provided. 

    g.  Sublessor
shall not amend the Master Lease in any way that would affect the Premises or Sublessee's rights or obligations under this Sublease without Sublessee's
prior written consent. 

4

 
	10.
	Other
Provisions of Sublease 

    Sublessee
shall not commit or suffer any act or omission that will violate any of the provisions of the Master Lease. If the Master Lease terminates, this Sublease shall terminate and
the parties shall be relieved of any further liability or obligation under this Sublease, provided however, that if the Master Lease terminates as a
result of a default or breach by Sublessor or Sublessee under this Sublease, then the defaulting party shall be liable to the non-defaulting party for the damage suffered as a result of
such termination. Notwithstanding the foregoing, if the Master Lease gives Sublessor any right to terminate the Master Lease in the event of the partial or total damage, destruction, or condemnation
of the Premises or the Building of which the Premises are a part, the exercise of such right by Sublessor shall not constitute a default or a breach hereunder. 

	11.
	Indemnification

    a.  Sublessee's
Indemnification 

    Sublessee
shall indemnify, defend and hold harmless Sublessor from and against all losses, costs, damages, expenses and liabilities, including, without limitation, reasonable
attorneys' fees and disbursements, which Sublessor may incur or pay out (including, without limitation, Sublessor's payment to Master Lessor) by reason of (a) any accidents, damages or injuries
to persons or property occurring in, on or about the Premises (unless the same shall have been caused by the respective negligence of Sublessor or Master Lessor), (b) any breach or default
hereunder on Sublessee's part, (c) the successful enforcement of Sublessor's rights under this Section or any other Section of this Sublease, (d) any work done after the date hereof in
or to the Premises except if done by Sublessor or Master Lessor, or (e) any act, omission or negligence on the part of Sublessee or its officers, partners, employees, agents, customers and/or
invitees, or any person claiming through or under Sublessee. Nothing herein shall be construed as requiring Sublessee to indemnify, defend or hold harmless Sublessor against or for any
claim, loss, damage or expense to the extent it is caused by the respective negligence, will misconduct or breach of the Sublease or Master Lease by Sublessor or Master Lessor, and not by Sublessee. 

    b.  Sublessor's
Indemnification 

    Sublessor
shall indemnify, defend and hold harmless Sublessee from and against all losses, costs, damages, expenses and liabilities, including, without limitation, reasonable
attorneys' fees and disbursements, which Sublessee may incur or pay out (including, without limitation, to Master Lessor) by reason of (a) any breach or default hereunder on Sublessor's part,
(b) the successful enforcement of Sublessee's rights under this Section or any other Section of this Sublease, (c) any act, omission or negligence on the part of Sublessor and/or its
officers, partners, employees, agents, customers and/or invitees, or any person claiming through or under Sublessor. 

	12.
	Commission

    Upon
execution of this Sublease, and written consent thereto by Master Lessor, Sublessor shall pay Washington Partners, Inc., a real estate commission of $5,167.41. Broker is
made a third party beneficiary of this Sublease for the purpose of enforcing its right to said commission. Sublessee shall have no liability for any commissions for this Sublease. 

	13.
	Agency
Disclosure 

    At
the signing of this Sublease, Clay Nielsen of Washington Partners, Inc., represented both Sublessor and Sublessee. Both Sublessor and Sublessee confirm that they have
consented to Clay Neilson of Washington Partners, Inc., acting as dual agents. Sublessor and Sublessee confirm receipt of the pamphlet entitled "The Law of Real Estate Agency." 

5

 
	14.
	Notices

    All
notices and demands that may or are to be required or permitted to be given by either party on the other hereunder shall be in writing. All notices and demands by Sublessor to
Sublessee, or by Sublessee to Sublessor, shall be personally delivered or sent by a nationally recognized private carrier of overnight mail (e.g. FedEx) or by United States Certified Mail, return
receipt requested and postage prepaid, to the parties at the addresses listed below or at such other addresses as the parties may designate by notice from time to time. All notices will be deemed
given when received or refused. 

	To Sublessor:	 	Sunhawk.com Corporation

223 Taylor Avenue, Suite 200

Seattle, Washington 98109

Attention: Mr. Tricia Parks-Holbrook
	To Sublessee (after 1/1/01):	 	DailyShopper.com, Inc.

223 Taylor Avenue, Suite 201

Seattle, Washington 98109

Attention: Mr. Fred Paulsell
	To Sublessee (before 1/1/01):	 	DailyShopper.com, Inc.

2030 1st Avenue

Seattle, Washington 98121

Attention: Mr. Fred Paulsell

	15.
	Quiet
Enjoyment 

    Provided
that Sublessee is not in default of any term or provision of this Sublease, Sublessee shall have peaceful and quiet enjoyment of the Premises without interference from
Sublessor or any person or entity claiming by, through or under Sublessor. 

	16.
	Attorney's
Fees 

    If
Sublessor (or Master Lessor) or Sublessee shall commence an action against the other arising out of or in connection with this Sublease, the prevailing party shall be entitled to
recover its costs of suit and reasonable attorney's fees. 

	17.
	Entire
Agreement 

    This
Sublease, the Exhibits attached hereto and those provisions of the Master Lease, which are incorporated herein by reference, constitute the entire agreement between Sublessor and
Sublessee with respect to the Premises and may not be amended or altered except by written agreement executed by both parties. 

	18.
	Binding
on Successors 

    This
Sublease shall bind the parties' heirs, successors, representatives and permitted assigns. 

    IN
WITNESS WHEREOF, the parties hereto hereby execute this Sublease as of the day and year first above written. 

	SUBLESSOR: SUNHAWK.COM CORPORATION	 	SUBLESSEE: DAILYSHOPPER.COM, INC.
	

By	
 	

/s/ Tricia Parks-Holbrook
	
 	

By	
 	

/s/ Fred Paulsell

	

Title	
 	

CFO
	
 	

Title	
 	

VP Finance

6

 

	STATE OF WASHINGTON	 	)
	 	 	) ss.
	COUNTY OF KING	 	)

    On
this 13th day of Decmeber, 2000, before me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared Tricia
Parks-Holbrook, to me known to be the person who signed as CFO of Sunhawk.com Corporation the corporation that executed the within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was duly elected, qualified and acting as said officer of the corporation,
that he was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. 

    IN
WITNESS WHEREOF I have hereunto set my hand and official seal the day and year first above written. 

	 	 	/s/ Cherie A. Jones
/s/ Cherie A. Jones
 NOTARY PUBLIC in and for the State of Washington, residing at King Co.

My appointment expires: 09/27/03.

	STATE OF WASHINGTON	 	)
	 	 	) ss.
	COUNTY OF KING	 	)

    On
this 13 day of December, 2000, before me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared Fred
Paulsell, to me known to be the person who signed as VP Finance of DailyShopper.com, Inc., the corporation that executed the within
and foregoing instrument, and acknowledged said instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned, and on oath stated that he was
duly elected, qualified and acting as said officer of the corporation, that he was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. 

    IN
WITNESS WHEREOF I have hereunto set my hand and official seal the day and year first above written. 

	 	 	/s/ Patricia E. Baker
 NOTARY PUBLIC in and for the State of Washington, residing at Seattle

My appointment expires: 9/9/04.

7

 
 

EXHIBIT A
  
    FIRST AMENDMENT TO LEASE    
  

    This First Amendment to Lease (this "Amendment") to that certain Lease Agreement dated August 10, 1998 (the "Lease Agreement"), entered into by and
between 223 Taylor Corp., a Washington corporation, ("Landlord"), Sunhawk Corp., a Washington corporation ("Tenant"), and the Eller and McConney 1995 Family Living Trust ("Guarantor"). 

    WHEREAS,
Landlord and Tenant are parties to the Lease Agreement for the premises known as 223 Taylor Avenue N., Suite 200, Seattle, Washington (the "Premises"). 

    WHEREAS,
Guarantor guaranteed Tenant's obligations under the Lease pursuant to that certain Guaranty dated September 4, 1998. 

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord, Tenant and Guarantor hereby agree as follows: 

	1.
	Electrical Upgrade. Landlord and Tenant agree to an electrical upgrade to the Premises (the "Upgrade"). Landlord shall employ VECA
Electric (the "Contractor") to perform the Upgrade to begin on or about May 8, 2000 (the "Start Date") and to be completed on or about June 16, 2000 (the "Completion Date") at a cost of
$75,749.59 (the "Upgrade Cost"). Landlord agrees it shall pay all of the Upgrade Cost to Contractor and further agrees that any cost over runs due to any permit, license and/or any other compliance
required by the state, county and/or city shall be the sole responsibility and expense of Landlord. Tenant agrees to pay to Landlord, as it's proportional share of the Upgrade Cost the following:
(1) Tenant shall issue to Landlord One Thousand Four Hundred Eighty Five (1,485) shares of Sunhawk.com common stock (the "Stock") as further defined in Section 2 below; and (2) In
addition to Rent as defined in Exhibit D to the Lease Agreement, Tenant agrees to pay to Landlord, in equal monthly installments, on first day of the calendar month following the Completion
Date of the Upgrade, the amount of $25,249.86 amortized at ten percent (10%) interest for the remaining term of the Lease Agreement.

	2.
	Stock. The Stock will be free and clear of any security interests or other encumbrances and shall be issued in the name of Landlord
and delivered to Landlord concurrent with the Completion Date of the Upgrade. The Stock is unregistered, restricted Stock and subject to Rule 144 and any other applicable rules and/or
regulations with respect to its transferability.

	3.
	Cancellation Option. In consideration of this Amendment, Tenant and Landlord agree that the provision of the "Early Termination"
clause contained in Exhibit D to the Lease Agreement is hereby removed. All other provisions in Exhibit D to the Lease Agreement shall remain in full force and effect.

	4.
	No Other Amendments. Except as modified by this First Amendment, the Lease remains in full force and effect and has not been
otherwise modified or amended. 

Dated
this 12 day of May, 2000. 

	LANDLORD:	 	TENANT:
	223 Taylor Corp.,	 	Sunhawk Corp.,
	a Washington corporation	 	a Washington corporation
	

/s/ W. B. HASLUND   	
 	

/s/ MARLIN J. ELLER   
	
	 	

	Name: W. B. Haslund	 	Name: Marlin Eller
	Its: Pres.	 	Its: CEO
	

 	
 	
GUARANTOR:
	

 	
 	

ELLER AND MCCONNEY 1995 FAMILY LIVING TRUST
	

 	
 	

/S/ MARLIN J. ELLER   

	 	 	Name: Marlin Eller
	 	 	Its: Trustee

	STATE OF WASHINGTON	)	 
	 	)	ss.
	COUNTY OF KING	)	 

This
is to certify that on this 12th day of May 2000, before me the undersigned, a Notary Public in and for the State of Washington, duly commissioned and qualified, personally appeared W. B.
Haslund to me to be the individual (  ) described in and who executed the within and aforegoing instrument, and acknowledged to me that he signed and sealed the same as his free and
voluntary act and deed, for the uses and purposes therein mentioned. 

IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day, month and year above written. 

	 	 	/s/ PAULA A. JACKSON   
 Notary Public in and for the State of Washington, residing at Seattle

 
 

MASTER LEASE    
  

 
 

TABLE OF CONTENTS TO LEASE    
  

	 
	 	 
	 	PAGE

	SECTION 1.	 	FUNDAMENTAL LEASE PROVISIONS EXHIBITS, DEFINED TERMS	 	2
	SECTION 2.	 	PREMISES	 	3
	SECTION 3.	 	LEASE COMMENCEMENT AND EXPIRATION DATES	 	3
	SECTION 4.	 	RENT	 	4
	SECTION 5.	 	SECURITY DEPOSIT	 	5
	SECTION 6.	 	COST OF OPERATIONS AND REAL ESTATE TAXES	 	5
	SECTION 7.	 	USES; HAZARDOUS MATERIALS	 	7
	SECTION 8.	 	COVENANTS OF LANDLORD	 	8
	SECTION 9.	 	COVENANTS OF TENANT	 	8
	SECTION 10.	 	ALTERATIONS AND IMPROVEMENTS	 	10
	SECTION 11.	 	DAMAGE OR DESTRUCTION	 	11
	SECTION 12.	 	WAIVER OF SUBROGATION	 	11
	SECTION 13.	 	INDEMNIFICATION AND RELEASE	 	12
	SECTION 14.	 	EMINENT DOMAIN	 	12
	SECTION 15.	 	ASSIGNMENT AND SUBLETTING	 	13
	SECTION 16.	 	INSOLVENCY AND DEFAULT	 	15
	SECTION 17.	 	QUIET ENJOYMENT	 	18
	SECTION 18.	 	LANDLORD'S LIABILITY	 	18
	SECTION 19.	 	LANDLORD'S INTEREST IN PREMISES	 	19
	SECTION 20.	 	HOLDING OVER	 	20
	SECTION 21.	 	MISCELLANEOUS PROVISIONS	 	20
	EXHIBIT A	 	Floor Plan	 	 
	EXHIBIT B	 	Legal Description of Land	 	 
	EXHIBIT C	 	Rules and Regulations	 	 
	EXHIBIT D	 	Additional Lease Terms	 	 
	EXHIBIT E	 	Cleaning Specifications	 	 
	RIDER 1	 	Options To Renew	 	 

  

 
 

LEASE    
  

    This LEASE (this "Lease") is made and entered into this 10th day of August, 1998, by and between 223 Taylor Corp., a Washington corporation, ("Landlord") and
Sunhawk Corp., a Washington corporation, ("Tenant"). 

    In
consideration of the mutual promises and covenants contained in this lease, Landlord and Tenant do hereby agree: 

SECTION
1.  FUNDAMENTAL LEASE PROVISIONS, EXHIBITS, DEFINED TERMS 

    In
addition to definitions set forth elsewhere in this Lease and subject to other provisions of this Lease, the following terms shall have the following meanings: 

    (1) BUILDING:
223 Taylor Avenue North 

    (2) PREMISES:
Suite number 200, consisting of the entire second (2nd) floor(s) of the Building located as indicated on the floor plan(s) attached hereto as
Exhibit A, including the Tenant Improvements, if any. 

    (3) TENANT'S
PERCENTAGE: Fifty and 2/10 percent (50.2%) based upon the rentable area of the Premises (as defined in Section 3.6), which is
approximately 19,224 rentable square feet, compared to the applicable rentable area of the Building, which is assumed to be and shall remain 38,286 rentable square feet. If the rentable area of the
Premises or the rentable area of the Building is altered, Landlord shall adjust Tenant's percentage accordingly. 

    (4) COMMENCEMENT
DATE: The later of mutual execution of this lease or September 1, 1998 

    (5) TERM:
Sixty (60) full calendar months, plus any partial month following the Commencement Date, as provided in Section 3.5. 

    (6) RENT:
see exhibit D 

    (7) ADDITIONAL
RENT: All amounts payable by Tenant to Landlord under this Lease, pursuant to Sections 6, 8, 9.8, and 16. 

    (8) BASE
FISCAL YEAR: The one-year period ended December 31, 1999. 

    (9) SECURITY
DEPOSIT: Twenty seven thousand, two hundred thirty-four and 00/100 Dollars ($27,234.00). 

    (10) LANDLORD'S
ADDRESS: 

    C/o
Walter Hall Management, Inc. 

    1200
Westlake Avenue North 

    Seattle,
WA 98109 

    (11) TENANT'S
ADDRESS: 

	 	Prior to Commencement Date:	 	After Commencement Date:
	 	318 Terry Avenue North,	 	223 Taylor Avenue North,
	 	Suite 200	 	Suite 200
	 	Seattle, WA 98109	 	Seattle, WA 98109

    (12) GUARANTOR:
Marlin Eller, and any other Person who hereafter in whole or in part guarantees Tenant's performance under this Lease. 

    (13) PERSON:
Individuals, partnerships, firms, associations, corporations and/or any other form of business or legal entity. 

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    (14) LAND: The real property described in Exhibit B hereto. 

    (15) OCCUPANT:
Any Person, including Tenant, entitled to occupy or use a portion or portions of the Building under a lease or another arrangement with Landlord. 

    (16) PERMITTED
USES: General office use. 

    (17) PARKING:
Tenants shall be permitted, upon payment of the then prevailing monthly rate (as set by Landlord or Landlord's operator from
time-to-time) to park forty-five (45) cars on a nonexclusive basis in the area (as designated by Landlord) for parking. Tenant shall abide by any and all
parking regulations and rules established from time-to-time by Landlord or Landlord's parking operator. Landlord reserves the right to separately charge Tenant's guests and
visitors for parking. The monthly parking arrangements permit Tenant to select among three pricing options. Choice A—Monday—Friday 7 a.m. to 6 p.m.; Choice
B—Monday—Friday 7 a.m. to 6 p.m. and Saturday 8 a.m. to 12 p.m.; Choice C—24 hours per day, 7 days per week. Tenant may
change its choice on 30 days notice to Landlord. Tenant may select any combination of the choices totaling no more than forty five (45) spaces. 

    (18) BROKERS:

    Landlord's:
Curt Ghan and Rod Keefe, Kidder, Mathews & Segner, Inc. 

    Tenant's:
Richard Hesik, Yates, Wood & MacDonald, Inc. 

    (19) PREPAID
RENT: Tenant shall pay the first month's rent upon Lease execution. 

    Exhibits:
The following exhibits are attached to this Lease and incorporated herein by this reference as if fully set forth: 

    Exhibit A—Floor
Plan 

    Exhibit B—Legal
Description of Land 

    Exhibit C—Rules
and Regulations 

    Exhibit D—Additional
Lease Terms 

    Exhibit E—Janitorial
Specifications 

    Rider
1—Option to Renew 

SECTION
2.  PREMISES 

    Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord, the interior of the Premises, for the term and subject to and with the benefit of the covenants and conditions
set forth in this Lease. Tenant shall have, for itself, its employees, agents, and invitees access to the Premises and the
reasonable nonexclusive right of access to and use of the stairways, sidewalks, elevators (subject to Landlord's installation of the agreed locking mechanism), passageways, corridors, doors, doorways,
lobbies, and other entrances and common areas in or about the Building, as they may exist from time to time, subject to Landlord's exclusive control, management, and reasonable discretion. The
perimeter walls, floors, and ceilings of the Premises and any space in the Premises used for shafts, stacks, pipes, conduits, ducts, electrical or other utilities or Building facilities and the use
thereof, as well as access thereto throughout the Premises for the purposes of operation, maintenance, decoration, installation, inspection, repair, and replacement, are expressly reserved to Landlord
and are expressly excluded from the Premises leased hereby, provided that Tenant shall be permitted to run wiring above the ceiling grid. The Building is located on a portion of the Land. Tenant will
be allowed access to the boiler/electrical room with Landlord's prior consent and accompanied by Landlord's representative. 

SECTION
3.  LEASE COMMENCEMENT AND EXPIRATION DATES 

    3.1 LEASE
COMMENCEMENT DATE: Mutual execution of this lease. 

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    3.2 EARLY ENTRY: If Tenant is permitted entry to the Premises prior to Commencement Date for the purpose of installing fixtures or any other purpose permitted by
Landlord, such early entry will be a Tenant's sole risk and subject to all the terms and provisions of this Lease as though the Commencement Date had occurred, except for the payment of Rent and
Additional Rent which will commence on the Commencement Date. All rights of Tenant under this Section 3.2 will be subject to the requirements of all applicable building codes and zoning
requirements. Landlord has the right to impose such additional conditions on Tenant's early entry as Landlord, in its sole discretion, deems appropriate, and will further have the right to require
that tenant execute an early entry agreement containing such conditions prior to Tenant's early entry. 

    3.3 TERM:
The term of this Lease shall commence on the Commencement Date and continue for the number of full calendar months specified in Section (5) unless
sooner terminated or extended as provided in this Lease. 

    3.4 POSSESSION:
If Landlord is unable to deliver the Premises or any portion thereof on or before the projected Commencement Date, Landlord shall not be liable for any
damage caused thereby, nor shall this lease thereby become void and voidable, but in such event, (i) Tenant shall not be liable for payment of any Rent or Additional Rent until such time as
Landlord delivers possession, and (ii) the Term shall not commence until the Premises are so delivered. (iii) if the Premises are not delivered on
or before the Commencement Date, Tenant shall have the option to cancel the Lease and secure the return of all moneys paid to Landlord. 

    3.5 CONDITION
OF PREMISES: Tenant's taking possession of the Premises shall be deemed conclusive evidence that, as of the date of taking possession, the Premises are in
good order and satisfactory condition, subject to the "latent defects" provision in Exhibit D. No promise of Landlord to alter, remodel, repair or improve the Premises, or the Building, and no
representation, express or implied, respecting any matter or thing relating to the Premises, the Building, or this Lease (including, without limitation, the condition of the Premises or the Building)
have been made to Tenant by Landlord or its Broker or Sales Agent, other than as may be contained herein or in a separate exhibit or addendum signed by Landlord and Tenant. 

    3.6 Confirmation
of Rentable Area: The actual rentable area of the Premises may vary from the amounts set forth in Section 1 (3) (but not to exceed 20,649
square feet), depending on the final contract documents for the Premises agreed to between Landlord and Tenant in accordance with the Work Letter. Within thirty (30) days of the Commencement
Date, Landlord shall determine and notify Tenant in writing of the actual rentable area of the Premises. If the actual rentable area varies from that stated in Section 1 (3), and (ii) if
base rent is based upon rentable square feet, base rent shall be adjusted in accordance with the per square foot rental rate stated in Section 1 (6). "Rentable Area" shall have the same meaning
as set forth in the "Standard Method for Measuring Floor Area in Office Buildings" (American National Standard ANSI—Z65.1—1980) published by Building Owners and Managers
Association International. 

SECTION
4.  RENT 

    4.1 PAYMENT:
Commencing on the Commencement Date, Tenant shall pay Landlord at Landlord's address, or to such other person or place or account as Landlord may hereafter
from time to time designate in writing, the rent specified in Section 1 (at times referred to herein as "Rent"), and any other charges due under this Lease, without notice or demand except as
otherwise specifically provided in this Lease and without deduction or offset or abatement or counterclaim. Such payment shall be made in lawful money of the United States in advance on or before the
Commencement Date and on or before the first (1st) day of each succeeding month. Rent and any other payments for any partial month at the beginning or end of the term of this lease shall be prorated
based upon the actual number of days of such month. Upon execution of this Lease, Tenant shall deposit with Landlord the first month's Rent. 

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SECTION 5.  SECURITY DEPOSIT 

    As
security for the full and faithful performance of every covenant and condition of this Lease to be performed by Tenant, Tenant has paid the Security Deposit to Landlord, and
Landlord acknowledges receipt of the Security Deposit. If Tenant shall default with respect to any covenant or condition of this Lease, including but not limited to the payment of Rent or any other
amount or charge due hereunder, Landlord may apply all or any part of the Security Deposit to the payment of any sum in default, or any other sum, which Landlord may be required to spend or incur by
reason of Tenant's default, and any other sum, which Landlord may in its reasonable discretion deem necessary to spend or incur on Tenant's behalf or by reason of Tenant's default. In any such event,
Tenant shall within ten (10) days of demand, deposit with Landlord the amount so applied, expended or incurred. Only if Tenant shall have fully complied with all of the covenants and conditions
of this Lease at the time of termination, and shall have delivered the Premises to Landlord in the condition required by the terms of this Lease, but not otherwise, the amount of the Security Deposit
then held by Landlord shall be repaid to Tenant (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) within thirty (30) days after the expiration or sooner
termination of this Lease. Tenant shall not assign or encumber the Security Deposit and neither Landlord nor its successors or assigns shall be bound by any such assignment or encumbrance. Landlord
may comingle the Security Deposit with other funds and Tenant shall not be entitled to interest or other return thereon. 

SECTION
6.  COST OF OPERATIONS AND REAL ESTATE TAXES 

    6.1 DEFINITIONS:
The following terms shall have the following meanings: 

    OPERATING
COSTS: Any and all amounts incurred or expended by Landlord in connection with the management, maintenance, operation, or repair of the Premises or the Building or the Land
or all or any portion thereof, or any improvements, fixtures, or equipment situation thereon or therein including, but not by way of limitation, the cost of operating, maintaining and repairing
elevators; wages and salaries of all employees engaged in operation, maintenance or security of the Building, including all taxes, insurance and benefits relating to such employees; insurance costs of
every kind and nature; energy costs, including costs of heating, ventilating, air conditioning and electricity; water, sewer, gas and other utility costs; the total customary charges of any agent or
independent contractor employed in the repair, care, operation, management, maintenance, or security of the Building or the Land; Real Property Taxes, as defined below; and any other expenses or
charges whether or not herein above described, which in accordance with generally accepted accounting and management practices would be considered an expense of maintaining, managing, operating or
repairing the Building. Operating costs shall not include: (i) initial leasing costs including tenant improvements and leasing commissions for other tenants; (ii) costs of any special
services rendered to individual tenants (including Tenant) for which a special charge is collected; and (iii) depreciation or amortization of costs required to be capitalized in accordance with
generally accepted accounting principles and (iv) payments of principal or interest on mortgages, deeds of trust, ground leases, or other encumbrances upon the Land or Building
or Premises; and (v) repairs to the structure of the Building, and (vi) any bad debt, rent loss, or reserves for bad debt or rent loss; and (vii) any expense for which Landlord is
compensated through proceeds of insurance; (viii) cost of repair of the Building caused by fire or other casualty or due to exercise of eminent domain, (ix) cost of environmental
remediation, clean-up, and repair except as provided in Section 7.2, and (x) cost of any structural or foundation work. Operating Costs shall include amortization (including
interest at the rate incurred by Landlord in connection therewith) of items classified as capital expenditures under generally accepted accounting principles or which are required under any
governmental laws or regulations not applicable to the Building at the time it was constructed. 

    REAL
PROPERTY TAXES: Taxes, charges or any installments of, assessments (or any installment thereof due during the Fiscal Year) and other impositions, however denominated, levied from
time to time with respect to the Land, the Building, or any improvements, fixtures and equipment, and all 

5

 

other property of Landlord, real or personal, used directly in the operation of the Building and located in, on, or about the Building; any taxes levied or assessed (or any installment thereof due
during the Fiscal Year) in addition to or in lieu of, in whole or in part, such taxes; any other tax upon leasing of the Building or rents; any other tax or surcharge such as, for example, payments to
or on account of public transit or carpooling or environmental facilities; and all costs and expenses incurred by Landlord in connection with the attempt to reduce any of the foregoing, whether by
negotiation or contest. Real Property Taxes, however, shall not include any franchise or state income tax, inheritance tax, estate tax, business and occupation tax, or any other similar tax. Real
Property Tax assessments shall be spread over the longest permitted payment period. Tenant hereby waives any right it may have by statute or otherwise to protest the amount of any Real Property Taxes. 

    FISCAL
YEAR: The period from January 1 through December 31. 

    OPERATING
COSTS BASE AMOUNT: Tenant's Percentage of Operating Costs actually incurred or expended by Landlord for the Base Fiscal Year as specified in Section 1.8. Operating
Costs and real property assessments shall be spread over the longest permitted payment period. If this Lease sets forth an expense stop in Section 1 (24), then the Operating Costs base amount
shall be equal to the expense stop. 

    6.2 ADDITIONAL
RENT FOR OPERATING COSTS: If, in any year following calendar year 1999, Operating Costs multiplied by Tenant's Percentage is in excess of the Operating
Costs Base Amount, then, in addition to all other amounts due hereunder and as additional rent, Tenant shall pay Landlord the amount of such excess ("Tenant's Share of Operating Costs"), such payments
to be made in accordance with Section 6.3. 

    6.3 ESTIMATED
INCREASES: By January 31st of each fiscal year, Landlord shall give Tenant written notice of the estimated amount payable by Tenant under this
Section 6.3 for the following fiscal year. On or before the first (1st) day of each month thereafter, Tenant shall pay Landlord one-twelfth (1/12th) of such estimated
amounts, provided Landlord may, by written notice to Tenant, revise its estimate whereupon subsequent payments by Tenant for the remainder of the Fiscal Year shall be based upon such revised estimate.
Within ninety (90) days after the close of each fiscal year during the term of this Lease, or as soon thereafter as practicable, Landlord shall deliver to Tenant a certified statement setting
forth the total amount of Tenant's share of operating costs for such fiscal year, whereupon there shall be a final adjustment between Landlord and Tenant in connection with amounts due Landlord under
this Section 6.3 and Tenant shall pay Landlord any amount due Landlord within thirty (30) days of receipt of such certified statement, and any amount due Tenant shall be credited to the
next accruing amounts due Landlord pursuant to this Section 6.3 or if the Lease has terminated or expired, such amount shall be credited against any amounts still due Landlord and the balance
shall be refunded to Tenant. Alternatively, Landlord may elect to bill Tenant in arrears for actual increases rather than collecting estimated payments and adjusting to actual annually. 

    6.4 FURTHER
ADJUSTMENTS: 

   6.4.1 If
less than an average of ninety-five percent (95%) of the rentable area of the Building is occupied by occupants during all or any portion of a
fiscal year, Landlord shall make an appropriate adjustment ofoperating costs for such year, including for purposes of estimated payments under Section 6.3, employing sound accounting and
management principles, to determine the amount of operating costs that would have been expended or incurred had ninety-five percent (95%) of the rentable area of the Building been occupied
during the entire fiscal year. 

   6.4.2 During
periods that other tenants of the Building are not sharing services or utilities, the Operating Costs Base Amount and Tenant's Percentage shall be
appropriately adjusted. For example, during the period that GST occupies a portion of the Building and provided its own heating and cooling equipment and service, increases in the cost of operating,
maintaining and repairing the HVAC system used by Tenant shall be spread over the tenants served by that system based on their relative percentages of the remaining space. Similarly, GST will be
served by its 

6

 

own electrical power and therefore increases in the cost of the power to the rest of the Building shall be shared by those other tenants by that service. 

   6.4.3 For
the fiscal year in which the term of this Lease terminates or expires, Tenant shall pay only that proportion of the amount otherwise payable under this
Section 6 which the number of days of the term of the Lease falling within such year bears to three hundred sixty-five (365) days, based upon the estimated amounts due
pursuant to Section 6.3 for the fiscal year of termination or expiration. 

    6.5 PERSONAL
PROPERTY TAXES: Tenant shall pay, prior to delinquency, all personal property taxes payable with respect to all property of Tenant located on or about the
Premises or the Building and shall, promptly upon request of Landlord, provide written proof of such payment to Landlord. As used herein "Property of Tenant" shall include all improvements which are
paid for by Tenant and "Personal Property Taxes" shall include all property taxes assessed against the property of Tenant, whether assessed as real or personal property. If any portions of Tenant's
property are assessed against the property of Tenant, whether assessed as real or personal property. If any portions of Tenant's property are assessed and taxed with the Building, Tenant shall pay
Landlord its share of such taxes within ten (10) days after receipt of a written statement setting forth the amount of such taxes that Landlord has determined are applicable to
Tenant'sproperty. 

SECTION
7.  USES; HAZARDOUS MATERIALS 

    7.1 PERMITTED
USES; WASTE: Tenant shall use the Premises only for the permitted uses and for no other business or purpose without the prior written consent of Landlord.
Tenant shall not commit or allow to be committed any waste upon the Premises, or any public or private nuisance or other act or thing which disturbs the quiet enjoyment of any other occupant in the
Building, or is reasonably expected to injure the reputation of the Building, or is unlawful. 

    7.2 HAZARDOUS
MATERIALS: The term "Hazardous Substances", as used in this Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any other substances,
the removal of which is required or the use of which is restricted, prohibited or penalized by an "Environmental Law", which term shall mean any federal, state or local ordinance relating to pollution
or protection of the environment. Tenant hereby agrees that (i) no activity will be conducted on the Premises that will produce any Hazardous Substance, except for such activities (the
"Permitted Activities") provided said Permitted Activities are conducted in accordance with all Environmental Laws and have been approved in advance in writing by Landlord; (ii) the Premises
will not be used in any manner for the storage of any Hazardous Substances except for the temporary storage of such materials that are used in the ordinary course of Tenant's business (the "Permitted
Materials") provided such Permitted Materials are properly stored in a manner and location meeting all Environmental laws and approved in advance in writing by Landlord; (iii) no portion of the
Premises will be used as a landfill or a dump; (iv) Tenant will not install any underground tanks of any type; (v) Tenant will not allow any surface or subsurface conditions to exist to
come into existence that constitute or, with the passage of time, may constitute a public or private nuisance; (vi) Tenant will not permit any Hazardous Substances to be brought onto the
premises except for the Permitted Materials and if so brought or found located thereon, the same shall be immediately removed, with proper disposal, and all required cleanup procedures shall be
diligently
undertaken pursuant to all Environmental Laws. Tenant shall be solely responsible for and shall defend, indemnify and hold Landlord, its agents and employees harmless from and against all claims,
costs and liabilities, including attorneys' fees and costs, arising out of or in connection with Tenant's breach of its obligations contained in this Section 7.2. Tenant shall be solely
responsible for and shall defend, indemnify and hold Landlord, its agents and employees harmless from and against any and all claims, costs and liabilities, including attorneys' fees and costs,
arising out of or in connection with the removal, cleanup and restoration work and materials necessary to return the Premises, the Building, the Land and any other property, to their condition
existing prior to the appearance of Tenant's Hazardous Substances. Tenant's obligations under this Section 7.2 shall survive the expiration or other termination of this Lease. 

7

 
SECTION 8. COVENANTS OF LANDLORD 

    8.1 BASIC
SERVICES: Landlord shall: 

    8.1.1 Furnish
reasonable electricity, heating, ventilating, air conditioning, and other utilities to the Premises as provided in the Rules
andRegulations, and subject to any limitations imposed by applicable law. 

    8.1.2 Provide
elevator service in the Building as provided in the Rules and Regulations. 

    8.1.3 Provide
periodic exterior window washing at reasonable intervals. 

    8.1.4 Maintain
and repair structure, exterior walls, roof, mechanical, electrical, heating, ventilation and air conditioning and plumbing systems, as
well as the lighting systems in the Premises on the Commencement Date but excluding lamp replacement. 

    8.2 EXTRAORDINARY
SERVICES: Should Tenant require special services from time to time on days or hours other than those specified in Rules and Regulations attached as
Exhibit C, Landlord shall upon reasonable advance notice by Tenant, furnish such additional service and Tenant agrees to pay to Landlord, concurrently with payment of monthly Rent, as
Additional Rent, Landlord's cost of labor, materials supplied and utilities consumed in providing such additional service plus reasonable administrative costs. The amount of such payment and expenses
shall be excluded from the determination of operating costs. 

    8.3 LANDLORD
NOT LIABLE: Landlord does not warrant that any of the services referred to in this Lease, or any other services which Landlord may supply, will be free
from power surge, interruption, curtailment or suspension, Tenant acknowledging that any one or more of such events or services may be suspended by reason of accident or repairs, alterations or
improvements, or by reason of causes beyond the reasonable control of Landlord. No interruption, curtailment or suspension of service except as caused by Landlord's gross negligence or willful
misconduct shall be deemed an eviction or disturbance of Tenant's use and possession of the Premises or any part thereof, or render Landlord
liable to Tenant for damages, or relieve Tenant from the full and complete performance of all of Tenant's obligations under this Lease, nor shall there be any abatement of Rent or other charges.
Notwithstanding anything in this Lease to the contrary, Landlord shall be liable for any damage to Tenant's personal property resulting from a power outage or interruption which outage or interruption
is caused by the gross negligence or willful misconduct of Landlord but only to the extent Tenant is not compensated for such damage through insurance proceeds. Tenant shall have the right to install
a back-up generator on the property in a location to be determined by Landlord. 

    8.4 Tenant
shall have the right to install a generator in the parking lot outside the Building and hook the generator up to its Premises for emergency power subject to
the provisions of this section. Tenant must obtain Landlord's approval of the location of the generator. The generator will occupy at least one parking space in the parking lot. For each parking space
or part thereof used by Tenant, Tenant shall lease and allocate one of its 45 spaces described in Section 1(7). Tenant shall take any steps specified by Landlord to insure that no contamination
of the property occurs due to the use of placement of the generator. Tenant shall not allow any noise from the generator to unreasonably disrupt other tenants of the building. 

SECTION
9. COVENANTS OF TENANT 

    Tenant
agrees, for itself, its employees, agents and invitees, that it shall: 

    9.1 RULES
AND REGULATIONS: Comply with the Rules and Regulations, and such reasonable amendments and additions as from time to time may be adopted by Landlord to govern
the use, occupancy and operation of the Building (the existing rules and regulations, as so amended or supplemented from time to time, being the "Rules and Regulations"). Landlord shall not be 

8

 

responsible to Tenant for the noncompliance by any other Occupant with any of the Rules and Regulations, and any failure by Landlord to enforce any Rules and Regulations against either Tenant or any
other Occupant shall not constitute a waiver thereof. 

    9.2 LANDLORD'S
RIGHT OF ACCESS: Give Landlord, its agents, employees, lessors and mortagees and any other person or persons authorized by Landlord, access to the
Premises at all reasonable times, and at any time in the event of an emergency, to enable them to inspect, examine, show for lease or sale, and to make such repairs, additions and alterations to the
Premises or the Building, or to the fixtures, appurtenances or equipment therein, as Landlord may deem advisable; provided that Landlord shall use reasonable efforts to (i) minimize any
disruption of Tenant's business caused by such
access and (ii) provide Tenant reasonable advance notice when feasible. Landlord shall also be entitled to install and operate at Tenant's cost a monitoring/metering system in the Premises to
measure the added demands on electrical, heating, ventilating and air conditioning systems, resulting from Tenant's equipment and lights or from tenant's after hours heating, ventilating and air
conditioning service requirements. There shall be no allowance to Tenant or diminution of Rent and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business
arising from such right of access or the making of any repairs, alterations, additions or improvements in or to any portion of the Building or the Premises, or in or to the fixtures, appurtenances and
equipment thereof except to the extent such injury is a result of Landlord's gross negligence or willful misconduct. 

    9.3 REPAIR:
Keep the Premises and all portions thereof in good order and condition (excluding damage caused by Landlord, casualty, or condemnation), not damage or
deface the Premises or the Building, make all repairs to the Premises which are not Landlord's obligation pursuant to Section 8 or Section 11, including repairing damage to the Building
or its contents caused by the failure of Tenant to comply with its obligations under this Lease, and commit no waste in, about or to the Premises or the Building. In furtherance thereof, Tenant shall
fully and completely maintain the Premises, including the improvements and shall repair any damage to and, to the extent not repairable, shall replace the damaged item, including all broken interior
glass, whether of doors, windows, walls or partitions. Tenant shall also be responsible for repairing any damage to the Premises or the Building arising out of misuse or negligence of Tenant, its
employees, agents, invitees or visitors. 

    9.4 QUIT
AND REMOVE: Upon the termination of this Lease for any reason, quit and deliver up the Premises to Landlord peaceably and quietly in as good order and
condition as the Premises shall be on the Commencement Date or may thereafter be improved by Landlord or Tenant, reasonable use and wear and repairs which are Landlord's obligations and damage caused
by Landlord, casualty or condemnation excepted, and, if Tenant is not in default under the terms of this Lease, remove Tenant's goods and effects and those of any other persons claiming under Tenant.
Goods and effects not removed by Tenant at the termination of this Lease (or within 48 hours after a termination by reason of Tenant's default), shall be considered abandoned and Landlord may
dispose of the same as it deems expedient and for its own account. Tenant shall promptly upon demand reimburse Landlord for any expenses incurred by Landlord in disposing of such abandoned goods and
effects, and Landlord shall not be liable to Tenant for any net proceeds from such disposal. 

    9.5 ADVERTISING:
Not place in or on or about the Premises signs, lettering, displays, advertising or pictures which are visible from outside the Premises (including
public corridors) except an identifying sign next to the entrance to the Premises which shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld or
delayed. 

    9.6 LIENS:
At its expense, cause to be fully and completely discharged of record, within ten (10) days of Landlord's demand, any labor or materialman's lien
claim or other lien or claim filed against the
Premises or the Building for work claimed to have been done for, or materials claimed to have been furnished to, or on behalf of Tenant. 

9

 

    9.7 COMPLY WITH LAWS: At its expense, comply with all laws, orders, ordinances and regulations of federal, state, county and municipal authorities and with any
direction made pursuant to law of any public officer or officers, which shall, with respect to the use of the Premises or to any abatement of nuisance, impose any violation, order or duty upon
Landlord or Tenant arising from Tenant's use of the Premises or from conditions which have been created by or at the instance of Tenant or are required by reason of a breach of any of Tenant's
obligations hereunder. Landlord will be responsible at its expense for complying with the American's with Disabilities Act in the common areas of the Building and the exterior areas on the Land, such
as the parking lot and sidewalks. To Landlord's knowledge, the Premises is in compliance with ADA. 

    9.8 NOT
INVALIDATE INSURANCE: Not do or permit to be done any act or thing upon the Premises which will invalidate or be in conflict with the Certificate of Occupancy
or the terms of the property, boiler, sprinkler, water damage or other insurance policies covering the Building and the fixtures and property therein or do or permit anything to be done or upon the
Premises or bring or keep anything for insurance upon the Building or on any Property or equipment located therein. If Landlord's insurance premiums are increased because of Tenant's failure to comply
with its obligations under this Lease, then Tenant shall pay the cost of any such increase, as additional rent, immediately upon demand. 

    9.9 INSURANCE:
At its expense, obtain and carry at all times during the term of this Lease (i) comprehensive general liability insurance covering the Premises
with combined single limits of at least Two Million Dollars ($2,000,000) per person and per occurrence for personal injury (including bodily injury and death) and broad form property damage having
combined single limits of at least Five Hundred Thousand Dollars ($500,000) per person and per occurrence, or such higher amounts as Landlord may from time to time reasonably designate by not less
than thirty (30) days notice to Tenant, for injury to persons (including death) and property arising out of the ownership, maintenance, use or occupancy of the Premises, and which insurance
shall contain a contractual liability endorsement covering the matters set forth in Section 10 and Section 13 and shall not contain deductible amounts in excess of Five Thousand Dollars
($5,000) without Landlord's prior written consent; and (ii) fire and extended coverage insurance (with endorsements covering vandalism, malicious mischief, water damage and business
interruption) for Tenant's fixtures, trade fixtures and furniture, and all other property owned or leased by Tenant and located in the Premises or Building, to their full replacement value. Such
policies shall be written by insurers acceptable to Landlord and shall name both Landlord and its mortgagees as additional insureds, as their interest may appear, and all such insurers shall agree not
to cancel or amend (including as to scope or amount of coverage) such policies without at least thirty (30) days prior written notice to Landlord. Each such policy shall also provide that no
act or default of any person other than Landlord or its agent shall render the policy void as to Landlord or affect
Landlord's right to recover thereon and shall be written as a primary policy not contributing with and not in excess of coverage Landlord may carry. Tenant shall furnish Landlord with certificates of
insurance evidencing coverage at all times during the term of this Lease. 

    9.10 JANITORIAL
SERVICE. Tenant arrange and pay for its own janitorial service in the Premises. The level and frequency of janitorial service shall be subject to
approval by Landlord and shall comply with the specifications attached as Exhibit E. 

SECTION
10. ALTERATIONS AND IMPROVEMENTS 

    Tenant
shall not make or install any alteration, installation, addition, hardware, window treatment, floor covering, fixture or other improvement to the Premises, or add to, disturb
or in any way change any plumbing or wiring, without in each and every of such cases (individually and collectively "Improvements"), the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed provided that Tenant agrees to remove the alterations and repair any damage caused thereby at the end of the Lease Term at Landlord's request. Landlord's
approval of 

10

 

plans or specifications for Improvements shall not constitute an assumption of the responsibility for the accuracy or sufficiency of such plans and specifications, or their compliance with applicable
codes, regulations or statutes, which responsibility shall be solely Tenant's. All such Improvements shall be made at Tenant's sole cost and expense and any contractor or person selected by Tenant to
make Improvements must first be approved in writing by Landlord. All Improvements and all repairs required to be made by Tenant shall be made in a good workmanlike manner and in compliance with all
governmental requirements, codes and rating bureau recommendations, and shall be performed by competent workmen approved in advance by Landlord. Tenant shall hold Landlord harmless and indemnified
from all injury, loss, claims or damage to any person or property occasioned by, or in connection with the construction or installation of Improvements. Tenant shall obtain all necessary permits from
governmental authorities. Tenant shall repair any damage and perform any necessary clean-up to the Building or its contents resulting from any Improvements made by Tenant. All
Improvements, temporary or permanent, including wall paneling, built-in cabinets, sinks, doors, floor coverings, or other built-in units of any kind, however attached (except
trade fixtures, furniture and equipment belonging to Tenant which are removable without causing damage to the Building) or installed by Tenant in, on or about the Premises, shall, upon expiration or
sooner termination of this Lease, become Landlord's property, and remain upon the Premises, all without compensation, allowance or credit to Tenant provided, however, if prior to the expiration or
termination of this Lease or within ten (10) days thereafter Landlord so directs by notice, Tenant shall at the expiration or termination of this Lease or within three (3) days after
such notice remove any Improvements placed in the Premises by or on behalf of Tenant and so designated in the notice. If Tenant fails to remove such designated Improvements, they will be deemed to be
abandoned by Tenant and Landlord may remove the same at Tenant's sole cost and expense. 

SECTION
11. DAMAGE OR DESTRUCTION 

    In
case of damage to the Premises or the Building by fire, vandalism, malicious mischief or any other occurrence or casualty, Landlord shall (unless this Lease shall be terminated as
hereinafter provided) diligently proceed to repair or restore the basic Building structure and all alterations, installations, additions, hardware, nontrade fixtures and improvements, temporary or
permanent, made or installed by or with the written approval of Landlord and which are or shall become the property of Landlord (except Tenant and not Landlord shall fully and completely repair any
damage to and shall replace the contents of the Premises such as trade fixtures, furniture, equipment or other improvements belonging to Tenant), to the condition in which they existed immediately
prior to such destruction or damage, to the extent of the applicable insurance proceeds, subject to delays which may arise by reason of adjustment of loss under insurance policies and delays beyond
the reasonable control of Landlord, provided, however, that Tenant shall have the right to terminate this Lease by written notice to Landlord if Landlord has not, cannot, or will not within one
hundred fifty days (150) of the occurrence of the damage or casualty fully repair and restore the Building and Premises. To the extent that the Premises are rendered untenantable, the Rent and
other charges shall proportionately abate unless such damage resulted from or was contributed to by the act, fault or neglect of Tenant, Tenant's employees, invitees or agents in which event there
shall be no such abatement. If the damage to the Premises or the Building shall be so extensive that Landlord, in its sole discretion decides not to repair or rebuild, Landlord shall give Tenant
written notice of its intent not to repair or rebuild within ninety (90) days of the date of such damage. Rent and other charges shall be adjusted to the date of such damage and Tenant shall
thereupon promptly vacate the Premises and neither party shall have any liability to the other under this Lease for any obligations thereof that would thereafter otherwise occur. 

SECTION
12. WAIVER OF SUBROGATION 

    It
is the intention of the parties that each of them shall insure its real and personal property and interests therein, including economic interests, as and to the extent it sees fit.
Each of Landlord and Tenant on behalf of insurers and itself hereby fully and completely waives and releases and relieves the 

11

 

other, its agents, partners, officers, directors and employees, from responsibility for, and waives its entire claim of recovery against the other for, any loss of or damage hereafter occurring to
that party's real or personal property located anywhere in, on or about the Building or the Land, including the Building itself, and from any loss of rental income from the Building resulting
therefrom; except, in any of such cases, to the extent that loss or damage is caused by the deliberate and intentional wrongdoing of the other, its agents, partners, officers, directors or employees. 

SECTION
13. INDEMNIFICATION AND RELEASE 

    (a) TENANT'S
INDEMNITY: Tenant shall, at its expense, indemnify, defend (using legal counsel acceptable to Landlord) and hold harmless Landlord, its Mortgagees,
partners, officers, agents, and employees from and against any and all claims, damages, expenses (including attorneys' fees), or other liabilities, arising out of or in connection with the occupancy
or use of the Premises by Tenant, its agents, customers, or employees (including, without limitation, any work undertaken or contracted for by Tenant, its agents or employees, whether pursuant to
Section 10, any Exhibit to this lease, or otherwise). The indemnity and hold harmless provisions of this Section 13 shall survive expiration or termination of this Lease and shall
include, but not be limited to, all claims against Landlord by any employee or former employee of Tenant, and Tenant hereby waives all immunity and limitation on liability of any industrial insurance
act, including Title 51 of the Revised Code of Washington as now or hereafter amended, or other worker's compensation act, disability benefit act, or any other employee benefit act of any jurisdiction
which would otherwise be applicable in the case of such a claim, but such waiver is not intended and shall not be construed or interpreted as applying to or benefiting any Person except Landlord or
Tenant. LANDLORD AND TENANT HEREBY CERTIFY AND AGREE THAT THIS SECTION 13 HAS BEEN FREELY AND MUTUALLY NEGOTIATED. 

    (b) RELEASE
OF CERTAIN CLAIMS: Tenant hereby fully and completely waives and releases all claims against Landlord for any losses or other damages sustained by Tenant or
any Person claiming through Tenant resulting from any accident or occurrence in or upon the Premises, including but not limited to: any equipment or appurtenances becoming out of repair; any defect,
failure, surge in, or interruption of, electrical heating, ventilating, air conditioning, gas, water, or storm sewer or sanitary sewer facilities or service; any defect in or failure of the plumbing,
or failure of stairs, railings or walks; broken glass; water being upon or coming into the Premises or the Building; the falling of any fixture, plaster, tile or stucco; or any act of Persons or
occupants of the Building, or of an adjacent property. 

    (c) MODIFICATION
OF INDEMNITIES: In compliance with RCW 4.24.115 as in effect on the date of this Lease, all provisions of this Lease including Exhibit B
pursuant to which Landlord or Tenant (the "Indemnitor") agrees to indemnify the other (the "Indemnitee") against liability for damages arising out of bodily injury to Persons or damage to property
relative to the construction, alteration, repair, addition to, subtraction from, improvement to, or maintenance of, any building, road, or other structure, project development, or improvement attached
to real estate, including the Premises and the Building, (i) shall not apply to damages caused by or resulting from the sole negligence of the Indemnitee, its agents or employees, and
(ii) to the extent caused by or resulting from the concurrent negligence of (a) the Indemnitee or the Indemnitee's agents or employees, and (b) the Indemnitor or the Indemnitor's
agents or employees, shall apply only to the extent of the Indemnitor's negligence; PROVIDED, HOWEVER, the limitations of indemnity set forth in this Section shall automatically and without further
act by either Landlord or Tenant be deemed amended so as to remove any of the restrictions contained in this Section no longer required by then applicable law. 

SECTION
14. EMINENT DOMAIN 

    If
the whole or substantially the whole of the Building or of the Premises shall be condemned or taken in any manner for any public or quasi-public use or purpose, including any
purchase or other acquisition in lieu of condemnation, this Lease and the term and estate hereby granted shall cease and terminate as of the date of taking of possession for such use or purpose. If
less than the whole or 

12

 

substantially the whole of the Building or of the Premises shall be so condemned or taken, then Landlord (whether or not the Premises be affected) may, at its option, by notice to Tenant, terminate
this Lease and the term and estate hereby granted as of the date of the taking of possession for such use or purpose. If a taking of a part of the Premises materially interferes with Tenant's ability
to continue its business operations in substantially the same manner and space then Tenant may terminate this Lease on the earlier (a) the date when title vests; or (b) the date when
Tenant is dispossessed by condemning authority, by giving written notice to Landlord within 60 days after learning of the extent of the taking. If neither Landlord nor Tenant elects to
terminate this Lease, then as to that portion of the Premises not so taken or condemned, the Rent and the Operating Costs Base Amount shall be reduced prorata in accordance with the floor area of the
Premises which may be so condemned or taken, tenant's Percentage shall be equitably adjusted, and Landlord shall, at its expense, proceed with reasonable diligence to repair, alter and restore the
remaining part of the Premises to substantially their former condition to the extent that the same may be reasonably feasible. Landlord shall be entitled to receive the entire award in any
condemnation proceeding, including any award for the value of any unexpired term of this Lease, and Tenant shall have no claim against Landlord or against the proceeds of the condemnation (and Tenant
shall also execute and deliver to Landlord such documents, in recordable form, as Landlord may require to confirm the same) except that Tenant shall have the right to claim and recover from the
condemning authority compensation for Tenant's moving expenses, business interruption or taking of Tenant's personal property (not including Tenant's leasehold interest); provided that such damages
may be claimed only if they are separately awarded and not out of or as part of the damages recoverable by Landlord. 

SECTION
15. ASSIGNMENT AND SUBLETTING 

    15.1 ASSIGNMENT
OR SUBLEASE: Tenant shall not voluntarily, involuntarily or by operation of law, assign, sell, pledge, transfer, mortgage or encumber this Lease or any
interest therein, or sublet the whole or any part of the Premises (any of which events being a "Transfer" for purposes of this Section 15) without first obtaining Landlord's written consent,
which shall not be unreasonably withheld, conditioned or delayed if all of the following conditions precedent are fully and completely satisfied: 

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

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

    (c) Tenant
pays Landlord's reasonable attorneys' fees and costs incurred in connection with negotiation, review and processing of the Transfer, plus a processing fee
not to exceed Five Hundred Dollars ($500.00) for each such request. 

    (d) Landlord
is paid any increase in the Security Deposit required by Landlord and permitted by law. 

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

13

 

    (f)  The Transfer will not otherwise have or cause a material adverse impact on Landlord's interest in the Building or the Premises. 

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

    15.2 ENTITY
OWNERSHIP: Any changes in the ownership of Tenant resulting from a public offering of the stock of Tenant or any parent of Tenant shall not be deemed a
Transfer. Any transfer of stock or assets from Tenant to an affiliate or subsidiary corporation or other entity, or as a result of any merger, consolidation or other reorganization of Tenant to any
parent of Tenant shall not be deemed a Transfer for purposes of this Section 15 unless, (a) the combined net worth of the Guarantor and the Tenant entity is not less than
$2.5 million, or, (b) Tenant posts a Letter of Credit as set forth in Section 15.5 below. 

    15.3 RECOVERY
BY LANDLORD: If Tenant at any time desires to Transfer this Lease, it shall give notice (a "Tenant Transfer Notice") to Landlord of its desire to do so
which notice shall state the rent at which it proposes so to Transfer and shall contain full and complete financial and business information on its intended Transferee. Such information shall be
deemed confidential and shall be provided pursuant to the terms of a mutually acceptable non-disclosure agreement. In addition to Landlord's rights under Section 15.1, and if
Tenant's business does not remain operating in the Premises, Landlord may elect by notice to Tenant (a "Landlord's Repossession Notice"), within forty-five (45) days of receipt of
the Tenant Transfer Notice, to terminate this Lease as to that portion of the Premises subject of the Tenant Transfer Notice. If Landlord exercises such right to terminate, Landlord shall be entitled
to recover possession of the portion of the Premises subject to the Tenant Transfer Notice on the later of (i) the proposed date for possession by such Transferee, as set out in the Tenant
Transfer Notice, or (ii) forty-five (45) days after the date of Landlord's Repossession Notice. All costs incurred by Landlord in constructing improvements, such as doors or
partitions, separating the remaining Premises from the repossessed area of the Premises shall be paid by Tenant within thirty (30) days of demand. If Landlord does not exercise such right to
terminate, Tenant may thereafter Transfer this Lease or a portion of the premises subject thereof, but at a rental not less than that offered to Landlord in the Tenant Transfer Notice and not later
than forty-five (45) days after delivery of the Tenant Transfer Notice to Landlord, unless a further notice is given pursuant to this section, provided (i) Landlord consents
thereto pursuant to Section 15.1, (ii) Tenant delivers to Landlord prior to the effective date of any such Transfer duplicate originals of any instrument effecting such Transfer, in form
and content satisfactory to Landlord, and (iii) all amounts received by Tenant from the Transferee in excess of the Rent payable hereunder for the area of the Premises so Transferred shall
belong to and shall immediately be paid to Landlord as Additional Rent. No action or inaction by Landlord in connection with its rights under this Section 15.2 shall constitute or be deemed to
constitute an approval of a proposed Transfer for purposes of Section 15.1 except as specifically set forth in a notice from Landlord to Tenant. 

    15.4 ASSIGNEE
OBLIGATION: An assignee or purchaser approved by Landlord shall assume all obligations of Tenant and shall be jointly and severally liable with Tenant for
the payment of Rent, Additional Rent and other charges and performance of all of tenant's obligations under this Lease. Tenant shall provide Landlord with full and complete duplicate originals of all
instruments of assignment, sublease or assumption. If an assignee of Sunhawk Corporation defaults under this Lease, Landlord agrees to send a copy of the notice of default to Landlord's last known
address for Sunhawk Corporation and Landlord shall accept a cure of the default by Sunhawk Corporation if the cure is performed within the cure period available pursuant to Section 16.2, as
measured from the date notice is sent to the assignee. 

14

 
    15.5 LETTER OF CREDIT: If Tenant elects to post a letter of credit ("LOC") in order to not be required to obtain Landlord's consent to a Transfer, the letter of credit
shall comply with the provisions of this Section 15.5. The LOC shall be a standby, irrevocable letter of credit in the amount equal to the rent due under the Lease for the then remaining term
(base rent and estimated payments for increases in Operating Costs), issued by a bank or other financial institution reasonably acceptable to Landlord (the "Bank") as security for the performance by
Tenant of the provisions of this Lease. Tenant shall maintain the LOC in effect at all times during the remaining term of this Lease and any extensions. The LOC shall (i) provide that if
Landlord notifies the Bank that a default has occurred which was not cured within the applicable cure period and the amount owed by Tenant to Landlord as a result of such default (the "Delinquent
Amount"), the Bank shall pay to Landlord the Delinquent Amount, (iii) be issued for a minimum of one year. Tenant shall cause the existing LOC to be extended or renewed for an additional year
or a replacement LOC be issued to Landlord and delivered to Landlord at least 30 days prior to the expiration date of the then existing LOC. Simultaneously with delivery of the replacement
letter, Landlord shall deliver the existing LOC to Tenant. The replacement LOC shall be in a reduced amount equal to the remaining total rent due under this Lease from the date of the replacement LOC
forward. If a renewal or replacement LOC is not timely delivered to Landlord, Landlord shall be permitted to draw the full amount under the LOC (which shall be returned to Tenant upon Landlord's
receipt of a replacement LOC). The sole condition to payment by the Bank under the LOC's shall be receipt by the Bank of a written certification from Landlord either (a) that a default has
occurred under this Lease which has not been cured within any applicable grace period, or (b) that the existing LOC will expire within 30 days and has not been renewed or replaced by a
new LOC acceptable to Landlord. If Tenant posts an LOC and it is later established to Landlord's reasonable satisfaction that the combined net worth of the assignee and the Guarantor exceeds
$2.5 million, Landlord will return the LOC to Tenant. 

SECTION
16. INSOLVENCY AND DEFAULT 

    16.1  INSOLVENCY:  The continuing rights granted to Tenant under this Lease are expressly made
conditional upon the Tenant remaining solvent and capable of meeting the financial and other obligations imposed upon the Tenant under this Lease at all times during the Term. Failure of the Tenant to
satisfy this condition shall constitute a default entitling Landlord to cancel and terminate this Lease as hereinafter provided. Without limitation upon the right of the Landlord to demonstrate
noncompliance by the Tenant with the provisions of this Section 16.1, Tenant shall be deemed to be in default under this Section 16.1 upon the occurrence of one or more of the following
events: (i) any judicial determination of the insolvency of the Tenant or any guarantor of theTenant's obligations hereunder ("Tenant's Guarantor") including, without limitation, the entry of
an Order for Relief pursuant to the provisions of the Bankruptcy Code whether voluntary of involuntary; (ii) appointment of a receiver or a custodian or other similar officer for any portion of
the Tenant's property or the property of any Tenant's Guarantor; (iii) the assignment for the benefit of creditors of any portion of the Tenant's property or the property of any Tenant's
Guarantor; (iv) a determination, judicial or otherwise, that the Tenant or any Tenant's Guarantor is not generally paying its debts as such debts
become due; or (v) any fact, event or circumstance which is the reasonable opinion of the Landlord indicated that the Tenant or any Tenant's Guarantor is insolvent or otherwise incapable of
meeting the financial and other obligations imposed upon the Tenant under this Lease; [provided, however, that if any such action, case or petition has been commenced against Tenant or any
Tenant's Guarantor and the same is dismissed within a period of sixty (60) days, then the event of default shall be deemed cured for purpose hereof] whereupon Landlord may elect, by
notice to Tenant, to cancel and terminate this Lease, in which event neither Tenant nor any Person claiming through or under Tenant by virtue of any statute or of an order of any court shall be
entitled to possession or to remain in possession of the Premises but shall forthwith quit and surrender the same, and Landlord, in addition to the other rights and remedies Landlord has by virtue of
this Lease or any statute or rule of law, may retain as security for its damages any Rent, Security deposit or monies received by Landlord from Tenant or others on 

15

 

behalf of Tenant. This Lease is upon the further condition that if a petition for relief under any chapter of the Bankruptcy Code is filed by or against Tenant or any Tenant's Guarantor and the
trustee or debtor in possession has not cured all defaults hereunder and assigned or assumed this Lease under the Bankruptcy Code within sixty (60) days after the entry of the Order for Relief,
then this Lease shall automatically terminate without the necessity of further action by or notice from either party. In case of termination pursuant to any of the foregoing provisions of this
Section 16.1, Tenant shall indemnify Landlord against all costs and expenses and loss of Rent and Additional Rent, including, without limitation, amounts due under Section 16.3. 

    16.2  OTHER DEFAULTS:  Tenant shall be in default of this Lease if: 

     (i) Tenant
fails to pay any installment of Rent or Additional Rent or other charges hereunder when due; or 

    (ii) Tenant
fails to perform any other covenant, term, agreement or condition of this Lease when such performance becomes due; or 

    (iii) Tenant
abandons or ceases to do business in the Premises for reasons within Tenant's control. 

    If
Tenant fails to timely cure any such default, after notice as set forth in the last paragraph of this Section 16.2, Landlord may, immediately or at any time thereafter,
elect to terminate this Lease by notice, lawful entry or otherwise, whereupon Landlord shall be entitled to recover possession of the Premises from Tenant and those claiming through or under Tenant.
Such termination of this Lease and any repossession of the Premises shall be without prejudice to any remedies which Landlord might
otherwise have for arrears of Rent or for a prior breach of any of the provisions of this Lease. Landlord and Tenant agree that a notice by Landlord requesting cure of a pre-existing
default hereunder shall constitute a statutory notice to quit. 

    In
case of such termination, Tenant shall indemnify Landlord against all costs and expense including the amounts due under Section 16.3 and loss of Rent. This Lease is upon the
further condition that if Tenant shall neglect or fail to perform or observe any of Tenant's covenants which Tenant has neglected or failed to perform or observe at least twice previously in any
12 month period (although Tenant shall have cured any such previous breach or breaches after notice from Landlord, and within the notice period), then Landlord lawfully may, but shall not be
obligated to, immediately or at any time thereafter and without demand or further notice avail itself of and/or exercise any remedies and/or avail itself of any benefits permitted by this
Section 16 or by law, excluding the right to terminate this lease. 

    With
respect to a default occurring under clause (i) of the first sentence of this Section 16.2, Tenant shall have five (5) business days following receipt of
written notice to cure from the Landlord within which to cure any such default. With respect to a default arising under clause (ii) of the first sentence of this Section 16.2, Tenant
shall have ten (10) business days following the receipt of notice to cure from the Landlord within which to cure any such default; provided, however, that if the nature of such default is such
that the same cannot reasonably be cured within such 10 day period, Tenant shall be deemed to have cured the default if Tenant shall commence such cure within said 10 day period and
thereafter diligently prosecute the same to completion and shall furnish Landlord with such assurances and indemnities that Landlord may require to ensure completion thereof and fully and completely
protect Landlord from any loss or liability by reason of any delay. With respect to a default arising under clause (iii) of the first sentence of this Section 16.2, Landlord be required
to provide two (2) business days notice to cure prior to exercising Landlord's right to termination. 

    16.3  EXPENSE RECOVERY.  Items of expense for which Tenant shall indemnify Landlord shall include but not
be limited to all costs and expenses incurred in collecting amounts due from Tenant under this Lease (including attorneys' fees, litigation expenses and the like); the unamortized 

16

 

portion of (i) amounts in the nature of commissions paid by Landlord to leasing agents in connection with this Lease and (ii) all costs and expenses incurred by Landlord to improve the
Premises pursuant to this Lease and (iii) any additional amount furnished in the nature of an allowance (all of such amortization to be based upon the assumption that such costs and expenses
are amortized on a straight line bases over the initial Lease Term); and all Landlord's other reasonable expenditures proximately caused by the termination. All sums due in respect of the foregoing
shall be due and payable immediately upon notice from Landlord that a cost or expense has been incurred without regard to whether the cost or expense was incurred before or after the termination of
this Lease. In the event proceedings are brought under the Bankruptcy Code, including proceedings brought by Landlord,
which relate in any way to this Lease including, without limitation, proceedings for the termination, assumption or assignment thereof or proceedings to secure adequate protection for Landlord or
proceedings involving objections to the allowance of Landlord's claim (in any of such cases a "Proceedings"), then Landlord shall be paid in addition to any and all amounts due Landlord pursuant to
the terms of this Lease such further amount as shall be sufficient to cover all costs and expenses incurred by Landlord with respect to the Proceeding, which costs and expenses shall include the
reasonable compensation, costs, expenses, disbursements and advances of Landlord, its agents and attorneys. 

    16.4  DAMAGES:  Notwithstanding termination of this Lease and reentry by Landlord pursuant to
section 16.1 or Section 16.2, the liability of tenant for Rent and other charges provided for herein shall not be extinguished for the balance of the Term, and Landlord shall be entitled
to recover from Tenant: 

     (i) The
worth at the time of an award (including interest at the rate set forth in Section 16.8), of any unpaid Rent which had been earned by Landlord at the
time of termination; plus 

    (ii) The
worth at the time of an award (including interest at the rate set forth in Section 16.8), of the amount by which unpaid Rent which would have been
earned after termination until the time of an award exceeds the amount of loss of Rent that Tenant proves could have been reasonably avoided; plus 

    (iii) The
worth at the time of an award of the amount by which the unpaid Rent for the balance of the term of this Lease (as extended, if at all prior to termination)
exceeds the amount of such loss of Rent that Tenant proves could have been reasonably avoided (including interest at the rate set forth in Section 16.8 from the date of the award until paid).
Such worth at the time of award shall be computed at the discount rate of the Federal Reserve Bank of San Francisco, or successor Federal Reserve Bank, on the date of termination. For the purposes of
this calculation only, the last Lease Years' Rent shall be deemed to be constant for each Lease Year thereafter; plus 

    (iv) Any
other amount necessary to compensate Landlord for all the damage proximately caused by Tenant's failure to perform Tenant's obligations under this Lease,
including amounts due and payable pursuant to Section 16.3. 

    16.5  NONTERMINATION OF LEASE:  Landlord's reentry of the Premises pursuant to Section 16.1 or
Section 16.2 shall not constitute a termination of this Lease unless Landlord so notifies Tenant in writing. Without any previous notice or demand, separate actions may be maintained by
Landlord against Tenant for time to time to recover any damages which, at the commencement of any action,
have then or theretofore become due and payable to Landlord under this Section 16 without waiting until the end of the original Term of this Lease. 

    16.6  RELETTING:  In the event that this Lease shall be terminated as herein above provided or by summary
proceedings or otherwise, Landlord may at any time and from time to time relet the Premises in whole or in part either in its own name or as agent of Tenant for any period equal to or greater or less
than the remainder of the then-current Term of this Lease for any rental which it may 

17

 

deem reasonable to any tenant it may deem suitable and satisfactory and for any use and purpose which it may deem appropriate, consistent with the operation of the Building in a first-class manner.
Upon each reletting, all rentals received by Landlord from such reletting shall be applied first to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; second, to
the payment of any costs and expenses of such reletting and of such alterations and repairs; third, to the payment of Rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord
and applied in payment of future Rent as the same may become due and payable hereunder. Upon a reletting of the Premises, Landlord shall not in any event be required to pay Tenant any surplus of any
sums received by the Landlord in excess of the Rent payable in accordance with this Lease. 

    16.7  RIGHT OF LANDLORD TO CURE DEFAULTS:  If Tenant shall default in the observance or performance of
any term or covenant on its part to be performed under this Lease, or if tenant shall fail to pay any sum of money (other than Rent or other charges) required to be paid by Tenant hereunder, Landlord
may, but shall not be obligated to, and without waiving or releasing Tenant from any obligations to make any such payment or perform any such other act on Tenant's part to be made or performed as
provided in this Lease, remedy such default for the account and at the expense of Tenant, immediately and without notice in case of emergency, or in any other case only upon Tenant's failure to remedy
such default within ten (10) days after Landlord shall have notified Tenant in writing of such default. If Landlord makes any expenditures or incurs any obligations for the payment of money in
connection with Tenant's default including, but not limited to attorneys' fees, in instituting, prosecuting or defending any action or proceeding, Tenant shall pay to Landlord as Additional Rent such
sums paid or obligations incurred, with interest. Landlord shall have, in addition to any other right or remedy, the same rights and remedies in the event of the nonpayment of sums due under this
Section as in the case of default by Tenant in the payment of Rent. 

    16.8  UNPAID SUMS AND SERVICE CHARGE:  Any amounts owing from Tenant to Landlord under this Lease shall
bear interest at the higher of (i) eighteen percent (18%) per annum or (ii) four percent (4%) in excess of the rate of interest announced on the first (1st) day of each month by Seattle
First National Bank, its successors or assigns, as its prime rate for short term unsecured loans, calculated from the date due until the date of payment. In addition, if any payment of Rent,
Additional Rent, or other charges, is not paid within ten (10) days of its due date, Tenant shall pay a late charge equal to
five percent (5%) of the amount of such overdue payment per month or portion thereof as liquidated damages for Landlord's extra expense and handling of such past due account. 

    16.9  LANDLORDS' DEFAULT:  Landlord shall not be deemed in default of any obligation to be performed by
it until it has failed to perform such obligation within thirty (30) days after written notice by Tenant specifying Landlord's failure; provided that if Landlord's obligation is such that more
than thirty (30) days are required for its performance, Landlord shall not be deemed in default if it commences such performance within such thirty (30) day period and diligently
prosecutes the same to completion. 

SECTION
17. QUIET ENJOYMENT 

    Landlord
covenants that upon Tenant's paying Rent, Additional Rent, and all other amounts and charges due hereunder and observing and performing all the terms, covenants and
conditions of this Lease on its part to be observed and performed, Tenant may peaceably and quietly enjoy the Premises, subject, however, to the terms and conditions of this Lease. 

SECTION
18. LANDLORD'S LIABILITY 

    The
liability of Landlord to Tenant for any default by Landlord under this Lease shall be limited to the interest of Landlord in the Land and Building (and the proceeds thereof).
Tenant agrees to look solely to Landlord's interest in the Land and Building (and the proceeds thereof) for the recovery of any judgment against Landlord, and Landlord shall not be personally liable
for any such judgment or deficiency after execution thereon. Notwithstanding the foregoing, however, Landlord shall have personal liability for insured claims beyond Landlord's interest in the Land
and Building (and the 

18

 

proceeds thereof) but only to the extent of proceeds of Landlord's liability insurance coverage respecting such claims. 

SECTION
19. LANDLORD'S INTEREST IN PREMISES 

    19.1  PRIORITY:  This Lease shall be subordinate to any first mortgage or deed of trust or sale and
leaseback used for financing purposes, now existing or hereafter placed upon the Land, Building or the Premises, created by or at the Instance of Landlord, and to any and all advances to be made
thereunder and to interest thereon and all modifications, renewals, replacements or extensions thereof (a "Landlord's Mortgage"); this provision shall be self-operative and no further
instrument or subordination shall be required by any landlord's mortgagee. Notwithstanding the foregoing, so long as Tenant is not in default under this Lease Tenant's rights under this Lease shall
not be disturbed, and, Tenant shall have the continued enjoyment of the Premises free from any disturbance or interruption by any holder of Landlord's Mortgage or any purchaser at a foreclosure or
private sale of the Land, Building, or the Premises as a result of Landlord's default under a Landlord's Mortgage. Tenant shall execute subordination agreements required by Landlord's lender and
Landlord shall obtain non-disturbance agreements to evidence the foregoing agreement, provided that the subordination agreement shall not reduce Tenant's rights or increase Tenant's
obligations under this Lease. 

    19.2  ESTOPPEL CERTIFICATES:  Tenant shall, within ten (10) days of demand, execute, acknowledge
and deliver to Landlord or its designee a written statement certifying: (i) the date the Lease Term commenced (the "Commencement date") or will commence and the date it expires; (ii) the
date Tenant entered into occupancy of and commenced business operations in the Premises; (iii) the amount of Base Rent and the date to which Rent has been paid; (iv) that this Lease is
in full force and effect and has not been assigned, modified, supplemented or amended in any way (or specifying the date and terms of each agreement so affecting this Lease) and that no part of the
Premises has been sublet (or to the extent such is not the case, the extent and nature of such default); (vii) that all required advances by Landlord to Tenant on account of Tenant Improvements
have been made (or the extent that such is not the case); (viii) on the date of such certification there are no existing defenses or claims which Tenant has against the enforcement of this
Lease by Landlord (or if such is not the case, the extent and nature of such defenses or claims; (ix) the amount of the Security Deposit paid to Landlord and (x) any other fact or
representation that a mortgagee or purchaser may reasonably request. It is intended that any such statement delivered pursuant to this Section 19.2 shall be fully and completely binding upon
Tenant for all purposes of this Lease, may be relied upon by a prospective purchaser or mortgagee of Landlord's interest, or any assignee of any mortgage upon Landlord's interest in the Building or
the Land. If Tenant shall fail to respond within ten (10) days of receipt of a written request by Landlord therefor, Tenant shall be deemed to have given a certificate as above provided without
modification and shall be conclusively deemed to have admitted the accuracy of any information supplied by Landlord to a prospective purchaser or mortgagee, that this Lease is in full force and
effect, that there are no uncured defaults in Landlord's performance, that the Security Deposit is as stated in this Lease and that not more than one month's Rent has been paid in advance. 

    19.3  TRANSFER OF LANDLORD'S INTEREST:  In the event of any transfer, assignment, sale or foreclosure of
Landlord's interest in the Premises, the Building or the Land, other than a transfer for security purposes only, the transferor shall automatically be relieved of any and all obligations and
liabilities on the part of Landlord accruing from and after the date of such transfer and Tenant shall attorn to the transferee, assignee or purchaser, and will recognize such transferee, assignee or
purchaser as Tenant's landlord under this Lease. In the event suchtransferee, assignee or purchaser shall further transfer its interest as landlord under this Lease, Tenant covenants and agrees to
attorn to such transferee, assignee or purchaser and to recognize such transferee, assignee or purchaser as
Tenant's landlord under this Lease. Tenant agrees within ten (10) days of demand to execute and deliver, at any time and from time to time, upon the request of Landlord or any mortgagee, or
purchaser or other transferee of Landlord's interest to whom Tenant has previously attorned, any instrument which may be necessary or appropriate to evidence any such attornment. 

19

  

SECTION
20. HOLDING OVER 

    If
Tenant shall retain possession of the Premises after termination or expiration of this Lease, then (i) if such retention of the Premises is without the express or implied
consent of Landlord, for each day, or part thereof the Tenant so retains possession of the Premises, Tenant shall pay Landlord one and one-half times the amount of the daily rate of Rent
and Additional Rent and other charges payable by Tenant hereunder during the calendar month immediately preceding such termination or expiration together with any damages sustained by Landlord as a
result thereof, and (ii) if such retention of the Premises is with the express or implied consent of Landlord, (1) such tenancy shall be from month to month (and in no event from year to
year or any period longer than month to month), and (2) Landlord may terminate any such month to month tenancy upon twenty (20) days notice to Tenant, and (3) Tenant shall pay
landlord rental which shall be the greater of either the then quoted rates for similar space in the Building or the monthly Rent and Additional Rent and other charges payable by Tenant hereunder
during the calendar month immediately preceding such termination or expiration. 

SECTION
21. MISCELLANEOUS PROVISIONS 

    21.1  HEADINGS:  The titles to sections of this Lease and the table of contents are for convenience only
and shall not be considered in construing or interpreting the scope or intent of this Lease. 

    21.2  WORDS:  Words of any gender used in this Lease shall be deemed to include the other gender or the
neuter and words in the singular shall be deemed to include the plural and the plural to include the singular where the sense requires. The adverbs "herein", "hereof", "hereunder", "hereto", "hereby",
"hereinafter", and the like, wherever the same appear herein, mean and refer to this Lease in its entirety and not to any specific section. The term "person" includes a firm or partnership or
corporation. The term "Occupant" shall mean any person entitled to occupy a portion or portions of the Building under a lease or other arrangement with Landlord. 

    21.3  HEIRS AND ASSIGNS:  All of the covenants, agreements, terms and conditions contained in this Lease
shall inure to the benefit of and be binding upon Landlord and Tenant and their respective heirs, executors, administrators, successors and assigns. If more than one person or entity executes this
Lease as Tenant, the liability of each to pay Rent, and all other costs and charges and to perform all other obligations hereunder shall be deemed to be joint and several. 

    21.4  NONWAIVER:  Failure of Landlord to insist, in any one or more instances, upon strict performance of
any term, covenant or condition of this Lease, or to exercise any option herein contained, shall not be construed as a waiver, or a relinquishment for the future, of such term, covenant, condition or
option, but the same shall continue and remain in full force and effect. The receipt by Landlord of Rent with knowledge of a breach of any of the terms, covenants or conditions of this Lease to be
kept or performed by Tenant shall not be deemed a waiver of such breach, and Landlord shall not be deemed to have waived any provision of this Lease unless expressed in writing and signed by Landlord. 

    21.5  REAL ESTATE BROKERS:  Tenant represents and warrants to Landlord that it has not engaged any
broker, finder or other person entitled to any commission or fee in respect of the negotiation, execution or delivery of this Lease other than Kidder, Mathews & Segner, Inc. and Yates,
Wood & MacDonald, and Tenant shall indemnify and hold harmless Landlord against any loss, cost, liability or expenses incurred by Landlord as a result of any claim asserted by any other such
broker, finder or other person on the basis of any arrangements or agreements made or alleged to have been made by or on behalf of Tenant. 

    21.6  ENTIRE AGREEMENT:  This Lease contains the entire agreement of the parties with respect to the
subject matter hereof and no representations, promises or agreements, oral or otherwise, 

20

 

between the parties not embodied herein shall be of any force or effect. No provisions of this Lease may be changed, waived, discharged or terminated orally, tub only by instrument in writing executed
by Landlord and Tenant concurrently with or subsequent to the date of this Lease. 

    21.7  SEVERABILITY:  Any provision of this Lease which shall prove to be invalid, void or illegal shall
in no way affect, impair or invalidate an other provision hereof and the remaining provisions hereof shall remain in full force and effect. 

    21.8  FORCE MAJEURE:  Time periods for Landlord's or Tenant's performance under any provisions of this
Lease (except for the payment of money) shall be extended for periods of time during which the nonperforming party's performance is prevented due to circumstances beyond the party's control,
including, without limitation, strikes, embargoes, governmental regulations, inclement weather and other acts of God, war or other strife. 

    21.9  NO ACCORD OR SATISFACTION:  No payment by Tenant or receipt by Landlord of a lesser amount than the
Rent and other charges stipulated herein shall be deemed to be other than on
account of the earliest stipulated Rent or other charges, nor shall any endorsement or statement of any check or any letter accompanying any check or payment as Rent or other charges be deemed an
accord and satisfaction, and Landlord's acceptance of such check or payment shall be without prejudice to Landlord's right to recover the balance of such Rent and other charges or pursue any other
remedy to which it is entitled. 

    21.10  GOVERNING LAW:  This Lease shall be construed and governed by the laws of the State of Washington. 

    21.11  NOTICES:  All notices under this Lease shall be in writing and delivered in person or sent by
private courier or registered or certified mail return receipt requested to Landlord at Landlord's Address, and to Tenant at Tenant's Address as may hereafter be designated by either party in writing.
Notices shall be deemed given when hand delivered or, if mailed as aforesaid, shall be deemed given 3 days after mailing. 

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

    21.13  RIGHT TO CHANGE PUBLIC SPACES AND BUILDING DIRECTORY:  Landlord reserves the right at any time
after completion of the Building, without hereby creating an actual or constructive eviction or incurring any liability to Tenant, to change the arrangement or location of public areas of the Building
not contained within the Premises or any part thereof, including entrances, passageways, doors and doorways, corridors, stairs, toilets, and other public service portions of the Building.
Nevertheless, in no event shall Landlord diminish any service, change the arrangement or location of the elevator serving the Premises, or make any change which shall diminish the area of the
Premises. Landlord shall maintain in the lobby of the Building, a directory which shall include the name of Tenant and such other names reasonably requested by Tenant in proportion to the number of
listings given to comparable Occupants of the Building. 

    21.15  CORPORATE AUTHORITY:  If Tenant is a business entity, then each individual signing this Lease on
behalf of Tenant represents and warrants that he/she is duly authorized to execute and 

21

 

deliver this Lease on behalf of such business entity, and that this Lease is binding on Tenant in accordance with its terms. 

    21.16  MORTGAGEE REQUIREMENTS:  Tenant shall within ten (10) days of request by Landlord deliver
an executed and acknowledged instrument amending this Lease in such respect as may be required by any present or future mortgagee, provided that such amendment does not materially alter or impair
Tenant's right or remedies under this Lease or increase its rental burdens. 

    21.17  COSTS AND ATTORNEYS' FEES:  In the event of litigation between the parties hereto, declaratory or
otherwise, for the enforcement of any of the covenants, terms or conditions of this Lease, the nonprevailing party shall pay the costs thereof and attorneys' fees actually incurred by the prevailing
party, in such suit, at trial and on appeal, at those attorneys' normal hourly rates. In addition, if the prevailing party utilizes in-house counsel, the non-prevailing party
shall reimburse the prevailing party at the normal hourly rates for outside counsel. 

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

    21.19  NO RESERVATION:  The submission of this Lease for examination does not constitute a reservation or
option to Lease the Premises and this Lease becomes effective as a Lease only upon execution and delivery thereof by Landlord and Tenant. 

    21.20  RECORDING:  This Lease shall not be recorded by either party. Upon request of Landlord, Tenant
shall acknowledge and deliver a memorandum of this Lease for recording. 

    21.21  TIME:  Time is of the essence of each and every provision of this Lease. 

    21.22  RIDERS:  The provisions of the Riders are hereby incorporated by this reference as if fully here
set forth. Capitalized terms in any Rider or Exhibit have the same meaning as set forth in this Lease. Time is particularly of the essence with respect to the provision of every Rider. 

    IN
WITNESS WHEREOF this Lease has been executed as of the day and year set forth above. 

	

 	
 	

LANDLORD:
	

 	
 	

223 Taylor Corp.

a Washington Corporation
	

 	
 	

BY:	
 	

/s/ LANCE HASLUND   

	

 	
 	

ITS:	
 	

TREASURER

	

 	
 	

DATE:	
 	

9/8/98

	

 	
 	

BY:	
 	

	

 	
 	

ITS:	
 	

	

 	
 	

DATE:	
 	

 
	

	 	 	 	 

22

 

	

 	
 	

TENANT:
	

 	
 	

Sunhawk Corp.

a Washington Corporation
	

 	
 	

BY:	
 	

/s/ MARLIN J. ELLER   

	

 	
 	

ITS:	
 	

Chairman

	

 	
 	

DATE:	
 	

Sept. 4, 1998

	

 	
 	

BY:	
 	

	

 	
 	

ITS:	
 	

	

 	
 	

DATE:	
 	

TENANT'S ACKNOWLEDGEMENT 

	STATE OF WASHINGTON	 	)
	

 	
 	

) SS.
	

COUNTY OF KING	
 	

)

    I certify that I know or have satisfactory evidence that MARLIN ELLER and            are the persons who appeared before me, and said persons
acknowledged that they signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the CHAIRMAN and            , respectively, of
SUNHAWK
CORP. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

    Dated:
9/9/98 

	

[SEAL]	
 	

/s/ RICHARD J. HESIK   
 (Signature)
	

 	
 	

Title  NOTARY
	

 	
 	

My appointment expires 9/9/01

23

 
LANDLORD'S ACKNOWLEDGEMENT  

	CORPORATE:	 	 
	

STATE OF WASHINGTON	
 	

)
	

 	
 	

) SS.
	COUNTY OF KING	 	)

    I certify that I know or have satisfactory evidence that LANCE F. HASLUND and            are the persons who appeared before me, and said persons
acknowledged that they signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledge it as the TREASURER and            , respectively, of 225
Taylor Corp. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

    Dated:
Sept. 8, 1998 

	

[SEAL]	
 	

/s/ DINAH A. QUICK   
 (Signature)
	

 	
 	

Title Notary Public
	

 	
 	

My appointment expires 11/12/99

24

 
EXHIBIT A TO LEASE  

DIAGRAM OF FLOOR(S) WITH APPROXIMATE LOCATION OF PREMISES MARKED: 

EXHIBIT B TO LEASE  

DESCRIPTION OF LAND: 

223
Taylor Avenue North, a two story office building with an adjacent parking lot, legally described as Block, 60, Lots 1-6 Denny's DT Park Addition to North Seattle. 

Exhibit B
Page 1 

25

 
 
 

EXHIBIT C TO LEASE    
    
    RULES AND REGULATIONS    
  

    SECTION
1.  Landlord shall have the right to control and operate the public portions of the Building, the public facilities, and the facilities furnished for the common
use of the Occupants, including, but not limited to, entrances, corridors, elevators and facilities of the Building (individually and collectively, the "Common Areas") in such manner as is reasonable
for the benefit of the Occupants generally. Tenant shall not invite to its Premises, or permit the visit of persons in such numbers or under such conditions as to interfere with the use and enjoyment
of the Common Areas by other Occupants. No portion of the sidewalks, doorways, entrances, passages vestibules, halls, lobbies, elevators or stairways in or adjacent to the Building shall be obstructed
or used for any purpose other than the ingress and egress to and from the Premises. Except as otherwise provided in the Lease, tenant, its employees or invitees shall not go upon the roof of the
Building. Landlord reserves the right from time to time to reduce, increase, enclose or otherwise change the size, number, location, layout and nature of the Common Areas and facilities, to construct
additional stores, buildings and storage, and to create additional rentable areas through use or enclosure of Common Areas. When reasonably necessary, Landlord may either temporarily or permanently
change the location of, or close entrances, doors, corridors, elevators or other facilities without liability by Tenant by reason of such closure and without such action by Landlord being construed as
an eviction of Tenant or release of tenant from the duty of observing and performing any of the provisions of this Lease. 

    SECTION
2.  During such hours as Landlord may from time to time reasonably determine, Landlord may: (i) require all persons entering or leaving the Building to
identify themselves to a watchman by registration or otherwise and to establish their right to enter or leave the Premises or the Building; and (ii) limit entries into and departures from the
Building to such one or more entrances as Landlord shall from time to time designate. 

    Landlord
reserves the right to exclude or reject from the Building all solicitors, canvassers and peddlers, or any person who, in the judgment of Landlord's security officer or
employee in charge, is under the influence of intoxicants or drugs, or any person who shall in any manner do any illegal act or any act in violation of any of the Rules and Regulations. 

    In
no event shall Landlord be liable for damages for any error with regard to the admission to or exclusion from the common areas of the Building of any person, except for Landlord's
gross negligence or willful misconduct. 

    SECTION
3.  Subject to the terms and conditions of the Lease, Landlord shall provide heat and air conditioning as reasonably required for reasonable, comfortable
occupancy of the Building and the Premises under normal business operations. Wherever heat generating machines or equipment are used in the Premises which affect the temperature otherwise maintained
by the hearing and air conditioning systems, Landlord reserves the right, at its option, either to require Tenant to discontinue use of such heat generating machines or equipment or to install
supplementary air conditioning equipment in the Premises. If supplementary air conditioning equipment is installed, then Tenant shall, within ten (10) days of invoice, pay Landlord
(i) the cost of any such installation and (ii) the cost of operation and maintenance of such supplementary equipment at such rates as Landlord may reasonably determine. 

    Tenant
must obtain the written consent of Landlord prior to using any lights or equipment in the Premises which will exceed normal and customary electrical loads for the Premises.
Regardless of whether such consent has been obtained, Tenant shall, within ten (10) days of invoice, pay Landlord the costs of electrical systems or modifications necessitated by such
equipment, including installation. 

    Tenant
shall conserve energy, water, heat and air conditioning and shall cooperate fully with Landlord to assure the most efficient operation of the heating and air conditioning
systems in the 

26

 

Building. Tenant shall also comply with Landlord's instruction for the use of drapes and thermostats in the Building. 

    SECTION
4.  Landlord shall provide janitorial service to the common areas of the Building including the entry doors, lobby and elevators. 

    SECTION
5.  All deliveries of large or bulky articles shall be delivered to and removed from the Premises only in elevators which have been properly padded by Landlord.
All deliveries of the above-mentioned items must be scheduled with the Landlord to ensure the elevator used for delivery is properly padded. Objects of unusual or extraordinary size or weight shall
not be brought into or removed from the Building without the prior written consent of Landlord and, where such consent is obtained, shall be brought into or removed from the Building at the time and
place and in the manner and shall be placed and maintained in such location and position in the Premises as Landlord may designate. The firm employed to move Tenant's equipment, material, furniture or
other property in or
out of the Building must be a professional mover, reasonably acceptable to Landlord and insurance must be sufficient to cover all personal liability, theft or damage to the Building. All damage to the
Building (including any elevator) or the Premises by the delivery, installation, use or removal of freight, furniture, business equipment, merchandise, safes or other articles shall be paid for by
Tenant. Except to the extent of Landlord's gross negligence or willful misconduct, Landlord shall not be responsible for damage to any of Tenant's property delivered to or left in any receiving area
or elsewhere in the Building or to any property moved or handled anywhere in the Building by any agent, employee or representative of Landlord as an accommodation to Tenant, Landlord being under no
obligation to accept delivery of, or to move or handle, any property of Tenant. 

    SECTION
6.  Tenant shall not place a load upon any floor of the Premises which exceeds the carrying capacity of the Building. Landlord reserves the right to prescribe
the weight and position of all safes, files and heavy installations which Tenant wishes to place in the Premises in order to properly distribute the load. Business machines and mechanical equipment
belonging to Tenant which cause noise or vibration that may be transmitted to the structure of the Building or to any space therein as to be objectionable to Landlord or to any other Occupant in the
Building shall be placed and maintained by Tenant at Tenant's expense, on vibration eliminators or other devices sufficient to eliminate noise or vibration. 

    SECTION
7.  Tenant, Tenant's employees, agents or invitees shall not, without prior written consent of Landlord: 

    7.1  Install,
maintain or operate any vending machine or any other machines of any description whatsoever (other than customary office machines including computers and
computer peripherals, microwaves, electronic keyboards and similar small office machines and a refrigerator), either on the Premises or elsewhere in the Building. 

    7.2  Attach,
hang or use any curtain, blind, shade, awning or screen in connection with any window, door or entrance in the Premises or the Building, or attach or
install any aerials or other projections from the Premises or the Building. 

    7.3  Use
the name of the Building for any purpose other than that of Tenant's business address, or use any picture of the Building. 

    7.4  Alter
any lock or install a new or addition lock or any bolt on any door of the Premises. If Landlord shall give its consent thereto, Tenant shall in each case
furnish Landlord with a key for any such lock, and upon termination of its tenancy, Tenant shall deliver to Landlord all keys to the Premises and to
all other rooms or offices furnished to Tenant or which Tenant shall have had made. Landlord will provide Tenant with additional keys for any lock in the Premises upon payment therefor by Tenant. 

27

 

    7.5  Bring or keep in or about the Premises or the Building any animals, birds or other pets (except seeing-eye dogs) or other vehicles, except at such
areas as Landlord may designate, temporarily or otherwise. Tenant shall be permitted to bring bicycles up the stairs into the Premises. In addition, if Tenant wishes, it may use one or more of its
parking spaces leased in the parking lot to install and use a bicycle rack for its employees. 

    7.6  Make
or permit to emanate from the Premises or the Building any objectionable noise, odor, nor keep in the Premises or the Building any inflammable or combustible
fluid or material, or in any manner annoy, disturb or interfere with other Occupants or their employees and invitees. 

    7.7  Install
telegraphic or telephonic connections or other wire services, or bore or cut for such wires or instruments incident thereto, unless Landlord has approved
the location and method of installation, introduction and placement of such wires and instruments. Landlord will respond promptly to any request and shall act reasonably, subject to the requirements
in the GST lease floor penetrations. 

    7.8  Drive
spikes, hooks, screws or nails or other devices in the walls or woodwork (except for hanging small pictures or similar items) or drill holes in the floor of
the Premises. 

    7.9  Place
any boxes, cartons or other rubbish in the corridors or other public areas of the Building. 

    7.10  No
Tenant will use or keep in the Premises or the Building any kerosene, gasoline or inflammable or combustible or explosive fluid or material or chemical
substance other than limited quantities of such materials or substances reasonably necessary for the operation or maintenance of office equipment or limited quantities of cleaning fluids and solvents
required in Tenant's normal operations in the Premises. Without Landlord's prior written approval, no Tenant will use any method of heating or air conditioning other than that supplied by Landlord. 

    7.11  Not
paint, display, inscribe, maintain or affix any sign, placard, picture, advertisement, name, notice, lettering or direction on any part of the outside or
inside the Property, or on any part of the
inside of the Premises which can be seen from the outside of the Premises without the prior consent of Landlord, and then only such name or names or matter and in such color, size, style, character
and material as may be first approved by Landlord in writing. Landlord shall prescribe the suite number and identification sign for the Premises (which shall be prepared and installed by Landlord at
Tenant's expense). Landlord reserves the right to remove at Tenant's expense all matter not so installed or approved without notice to Tenant. 

    7.12  Not
place anything or allow to be placed in the Premises near the glass of any door, partition, wall or window which may be unsightly, in Landlord's discretion,
from outside the Premises, and Tenant shall not place or permit to be placed any article of any kind on any window ledge or on the exterior walls. Blinds, shades, awnings or other forms of inside or
outside window ventilators or similar devices, shall not be placed in or about the outside windows in the premises except to the extent, if any, that the character, shape, color, material and make
thereof is first approved by the Landlord. 

    SECTION
8.  Tenant shall be liable for any damage to the fixtures and systems located in the Building resulting from the abuse or misuse of any nature or character
whatever by Tenant, or Tenant's employees, agents or invitees. 

    SECTION
9.  Tenant will refer to all contractors, contractor's representatives and installation technicians rendering any service to Tenant, to Landlord's building
manager for approval before performance of any work. Notwithstanding such approval, Landlord shall not be liable in any manner for the work so performed by Tenant's contractors, contractor's
representatives and installation technicians. This Section shall apply to all work performed in the Building including installation of 

28

 

telephones, telegraph equipment, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, window, ceilings, equipment or any other part of the
Building. 

    SECTION
10.  Tenant shall give prompt written notice to Landlord of any accidents to or defects in Plumbing, electrical fixtures, heating or air conditioning systems or
improvements in the Premises or the Building, to enable Landlord to repair such damage or defects. 

    SECTION
11.  Landlord reserves the right from time to time to amend and to make such further reasonable Rules and Regulations as, in the reasonable judgment of the
Landlord, may be necessary or desirable for the safety, care or cleanliness of the Building or the preservation of good order therein, or the maintenance and promotion of the high class character and
reputation of the Building. Such further Rules and Regulations and such amendments shall be binding upon Tenant, effective upon Tenant's
receipt of a copy thereof. Waiver by Landlord of any breach of any Provision of the Rules and Regulations by any other Occupant shall not be deemed to be a waiver of such Rules and Regulations as to
Tenant or all Occupants. 

    SECTION
13.  In addition to definitions set forth in these Rules and Regulations, capitalized terms herein shall have the same meaning as set forth in the lease to
which this is an Exhibit. 

29

  

 
 

EXHIBIT D ADDITIONAL LEASE TERMS    
  

	

RENT:	
 	

$17.00 per rentable square foot (RSF) per year during the initial 36 months and $18.00 per RSF for the last 24 months.
	

IMPROVEMENTS:	
 	

Landlord shall provide a Tenant Improvement allowance of $5.00 per RSF for reimbursement of tenant improvements to be made by Tenant. The funds will be provided to Tenant upon completion of improvements and receipt of lien releases from all
contractors. Tenant will initially occupy the Premises in its AS-IS condition, except as set forth in the next paragraph, but broom clean. Landlord will be responsible for putting all systems in the Premises in good working order and will use good
faith efforts to accomplish that by the Commencement date. All improvements to be made by Tenant are subject to Section 10 of the Lease.
	

LATENT DEFECTS:	
 	

If any latent defects in the Building or Premises interfere with Tenant's use of the Premises for normal office uses, Landlord, at its expense (not included in Operating Costs) shall be responsible for correcting the defect. If, when Tenant alters
the Premises, it encounters unknown conditions or defects, and if the condition would not be required to be addressed but for Tenant's alterations, Tenant shall be responsible for dealing with those conditions or defects in connection with its
alterations at its expense. If the discovered defect would require repair irrespective of Tenant's work, Landlord will correct the defect at its expense.
	

UTILITIES AND SERVICES:	
 	

a.  UTILITIES, SERVICES:  Landlord shall furnish to the Premises HVAC and maintenance services customary in similar buildings and suitable for the intended use of the Premises, and all charges for such shall be included in
Operating Costs. Landlord's service shall not include replacement of lamps in the lighting fixtures.
	

 	
 	

b.  ELECTRICITY:  The Landlord will provide, at Landlord's expense, electricity for normal office purposes including fluorescent and incandescent lighting, task and ambient lighting systems, copy and facsimile machines, computers,
computer peripherals and computer network systems, terminals, printers, communications and audiovisual equipment, vending machines and kitchen equipment.
	

 	
 	

c.  HVAC:  The Landlord shall provide, as part of Operating Costs, HVAC for the Premises Monday through Friday from 7:00 a.m. to 7:00 p.m. and Saturday from 8:00 a.m. to 2:00 p.m. In the event Tenant requires
after hours HVAC, there will be an hourly charge for this service and Landlord may require the installation of the necessary equipment to meter the usage and Tenant shall reimburse Landlord for the cost of such meter, if required. The hourly charge
for the service shall be reflective of the cost to Landlord of providing the service.
	
	
 	

 

30

 

	

EARLY TERMINATION:	
 	

Tenant shall have the right to terminate the Lease effective at the end of any month after the 36th month by giving the Landlord nine (9) month's prior written notice accompanied by the Termination Payment. The "Termination Payment" shall be
equal to the sum of the unamortized Tenant Improvement Allowance, unamortized real estate commissions and a penalty equal to three (3) months Base Rent. For example, the earliest the Lease term would end would be the last day of the 36th month
of the Lease Term, and to terminate as of that date, Tenant would need to provide the termination notice and Termination Payment (based on the rental rate of $18.00 per rentable square foot per year) to Landlord by the end of the 27th month of
the Lease term. The $18.00 rental rate is applicable because the 3 month payment relates to the 3 month period after the effective date of the termination.
	

COMMENCEMENT:	
 	

September 1, 1998. Tenant shall have the right of early occupancy at no rent immediately on full Lease execution.
	

ACCESS:	
 	

Tenant shall have access to the Premises on a 24-hour basis subject to repairs, maintenance and emergencies.
	

RIGHT OF REFUSAL:	
 	

If, after the remaining space on the first floor of the Premises is leased out, that space becomes available, then before Landlord enters into a new lease with a third party, Landlord will notify GST Telecom and work with them to determine whether
they wish to lease the space. If Landlord and GST do not reach agreement on a lease for the available space, then Landlord will notify Tenant that the space is available and Tenant shall have 3 business days to notify Landlord whether or not it
is interested in leasing the space. If Tenant gives the notice within that period, Landlord agrees to negotiate in good faith with Tenant for 7 days to reach agreement on a lease for the space. If they do not reach agreement, Landlord shall be
free to lease the space to a new tenant. The space will not be considered "available" if a current tenant of that space wishes to extend their lease and they reach agreement with Landlord on an extension.
	

TELECOMMUNICATIONS:	
 	

Tenant will install its own telecommunications cabling subject to the restrictions under the "GST Lease" paragraph below. Tenant shall be permitted to install a two (2) microwave dish mast (the "Mast") on the roof of the Building subject to
compliance with the provisions of this section. The mast will not exceed a total height, including dishes, of five (5) feet from the roof surface. The Dishes on the mast shall not exceed forty (40) inches in diameter or 120 pounds in
weight. The mast shall be installed in a location reasonably selected by Landlord and shall not be visible from Taylor Avenue. All specifications for the installation shall be subject to Landlord's approval. Tenant shall be responsible for obtaining
any governmental approvals required. Tenant shall place roof pads around the mast and on the route from the roof access point to the mast to protect the roof membrane. Tenant or its agents or employees must stay on the
	
	
 	

 

31

 

	

 	
 	

 
	

 	
 	

pads when servicing, repairing or removing the mast and its dishes. If any roof leaks develop in the vicinity of the roof pads or mast, Tenant shall promptly reimburse Landlord for the cost of investigation and fixing those leaks. Tenant shall have a
key to the roof, but shall not allow any person to go on the roof except the Tenant's employees who are designated to have responsibility for the mast and its dishes and Tenant's contractors and their employees in connection with their work on the
mast and its dishes. Tenant shall adhere to industry standards for installation and workmanship for the installation of the Tenant Equipment, the installation and design of which shall be at Tenant's sole expense. Landlord will lock the roof access
and shall only provide keys to those who need access such as Tenant, Landlord's contractors, and other tenants with equipment on the roof. Tenant shall not penetrate the roof for installation of the mast unless it is necessary to do so. If it is
necessary, then the penetration shall be (a) performed by Landlord's roofing contractor if Landlord so requires, or if not, by a contractor approved by Landlord, and (b) installed in a manner which does not invalidate Landlord's current
roof warranty. Tenant shall remove the mast and its dishes prior to termination or expiration of the Lease and shall reseal any penetration to Landlord's satisfaction. If Tenant wishes to install a second two dish mast, it shall be subject to
Landlord's prior approval. Landlord may condition installation of the second mast on payment of an additional $200 per month rent per additional mast and all aspects of the second mast and its dishes shall be subject to Landlord's
approval.
	

GST LEASE:	
 	

Landlord lease to GST Telecom contains the following provisions:
	

 	
 	

(a)  other equipment installed on the roof may not block the reception by GST's antenna;
	

 	
 	

(b)  strict limitations on any core drilling in the floor of the Premises and installation of any new utility lines through GST's premises;
	

 	
 	

(c)  GST will have an emergency generator outside the Building to generate emergency power;
	

 	
 	

(d)  the right to bore under the land around the Building to bring in fiber optic cable;
	

 	
 	

(e)  installation of a new cooling system on the roof of the Building with ducting on the exterior of the Building; and
	

 	
 	

(f)  GST agrees to cooperate with other tenants of the Building with regard to its buildout.
	

 	
 	

(g)  GST agrees not to interfere with other tenants of the Building (by sound, vibration or electromagnetic fields or otherwise) and other tenants of the Building are required not to interfere with GST.
	
	
 	

 

32

 

	

 	
 	

 
	

 	
 	

Tenant acknowledges that its rights under this Lease are subject to the above conditions and restrictions. In addition, GST will be making significant changes to its premises. Tenant also acknowledges that it recognizes that some disruptions may
occur in connection with GST's construction and that Tenant will work cooperatively with GST to manage or minimize those disruptions. Tenant agrees not to interfere with other tenants of the Building by sound, vibration or electromagnetic fields or
otherwise.
	

BUILDING STANDARD:	
 	

Tenant agrees to conform the Premises to Landlord's Building Standard for lighting fixtures, lamps in those fixtures and window coverings.
	

OPTICAL CABLE:	
 	

If at a future date, Tenant requests the right to bring a separate fiber optical cable into its Premises, Landlord agrees to consider the request and apply commercially reasonable standards in replying to the request.
	

RECYCLE BINS:	
 	

Landlord will consider allowing Tenant to replace recycle bins outside the Building if (a) the number, size, location and upkeep and servicing of the bins is acceptable to Landlord, (b) the cost is borne by Tenant, and (c) they will
immediately be removed if any operations or management problems arise, including refuse outside bins or any odor or pests are found to occur.
	

SECURITY ALARM:	
 	

If Landlord trips Tenant's security alarm by entering the Premises without notice to Tenant, then unless the entry was due to an emergency, Landlord shall reimburse Tenant for the fee charged by Tenant's security monitoring company.

33

 
 
 

RIDER 1 TO LEASE    
  

OPTION TO RENEW  

    Provided Tenant is not in default on exercise of the option or on commencement of the option period, Tenant shall have an option to extend the lease term for a
period of 60 months (the "Option Term"), upon the same terms and conditions as are set forth in the Lease, except the Base Rent shall be increased to the then current fair market rent but in no
event shall the rent at the beginning of the Option Term be less than the Base Rent payable for the last month of the initial term, determined as described below. The option shall be exercised, if at
all, by written notice to Landlord at least 12 months prior to the expiration of the initial term. Exercise of the option shall be conditioned upon (a) none of the space in the Premises
being subleased at the time of exercise of the option or
commencement of the option term, and (b) the Lease not having been assigned by Tenant to any other person or entity. 

    If
Tenant exercises an option, Landlord shall give Tenant notice of Landlord's estimation of fair market rent schedule for the Option Term not later than 10 months before the
beginning of the Option Term. If Tenant disagrees with the rent schedule specified by Landlord, it shall advise Landlord in writing thereof within 20 days after receipt of Landlord's notice,
and the parties shall promptly meet to attempt to resolve their difference. If the difference is not resolved within 30 days after Landlord's notice of the New Rent, then the parties shall
submit the matter to arbitration. 

    Each
party shall notify the other in writing of the name and address of its arbitrator. The arbitrator(s) shall be qualified real estate brokers familiar with rental rates in the
Seattle area. If, within 10 days after receipt of a notice from the initialing party (the "Instigator") designating its arbitrator, the other party (the "Recipient") fails to give notice to
Instigator specifying the name and address of the person designated by Recipient to act as its arbitrator, then the arbitrator appointed by Instigator shall be the sole arbitrator and shall determine
the issue. The duty of the arbitrator(s) shall be to determine the fair market rent schedule based on rental rates for the comparable space in the Seattle area. The 2 arbitrators so chosen shall meet
within 10 days after the second arbitrator is appointed and, if within 10 days after such first meeting the two arbitrators are unable to agree promptly upon the fair market rent
schedule, the arbitrators shall appoint a third arbitrator, who shall be a competent and impartial person with qualifications similar to those required of the first two arbitrators. When the third
arbitrator has been appointed, the first two arbitrators shall each state in writing its determination of the fair market rent schedule supported by the reasons therefor with counterpart copies to
each party. The first two arbitrators shall arrange for a simultaneous exchange of such proposed resolutions. The role of the third arbitrator shall be to select which of the two proposed resolutions
most closely approximates the third arbitrator's determination of fair market rent. The third arbitrator shall have no right to propose a middle ground or any modification of either of the two
proposed resolutions. The resolution selected shall constitute the decision of the arbitrators and be final and binding upon the parties. If any arbitrator fails or refuses to act, a successor shall
be appointed by that arbitrator. The arbitrators shall attempt to decide the issue within 10 days after the appointment of the third arbitrator. The arbitrator(s)' decision shall be binding and
conclusive upon the parties. Each party shall pay the fee and expenses of its respective arbitrator and both shall share equally the fee and expenses of the third arbitrator. The arbitrators shall
have no power to modify the provisions of this Lease. 

    The
right to terminate on a 9 months' notice, set forth in Exhibit D shall not apply during the Option Term. 

34

 
 
 

GUARANTY    
  

    THIS GUARANTY is given by The Eller and McConney 1995 Family Living Trust ("Guarantor") whose address is c/o Marlin Eller, Manager at,
800 - 15th Avenue East, Seattle, WA 98112 to 223 Taylor Corporation ("Landlord"). 

    Guarantor
has a financial interest in Sunhawk Corp. ("Tenant") and Guarantor gives this guaranty to induce Landlord to enter into that certain Industrial Real Estate Lease with Tenant
dated concurrently herewith (the "Lease"). 

    1.  Guarantor
hereby unconditionally guarantees the full and prompt performance of such obligation of Tenant under the Lease. If Tenant defaults under the Lease,
Guarantor will immediately cure the default, including payment to Landlord of any amounts in default, and including all damages and expenses arising in connection with Tenant's default. 

    2.  Guarantor's
liability hereunder is independent of the liability of Tenant and a separate action may be brought against Guarantor whether or not Tenant is joined in
any such action and whether or not Landlord has first pursued any other remedies to which it may be entitled. 

    3.  This
Guaranty shall remain in effect as to any extension, modification, or amendment of the Lease and irrespective of any assignment of the Lease and Guarantor
waives notice of any and all such extensions, modifications, amendments or assignments. 

    4.  Guarantor's
obligations hereunder shall remain fully binding (a) although Landlord may have waived one or more defaults by Tenant, extended the time of
performance by Tenant, released, returned of misapplied other collateral given later as additional security (including other guaranties) or released Tenant from performance of particular obligations
under the Lease, and (b) notwithstanding the institution by or against Tenant of bankruptcy, reorganization, receivership or insolvency proceedings of any nature, or the disaffirmance of said
Lease in any such proceedings or otherwise. Guarantor hereby waives all suretyship defenses. 

    5.  Guarantor
agrees to promptly pay, fully and completely, in addition to any and all amounts otherwise due hereunder, all costs, expenses and charges, including
attorney's fees, actually incurred or expended, in collecting or enforcing this Guaranty, including in connection with litigation. 

    6.  This
Guaranty shall be governed by Washington law and jurisdiction and venue shall be in King County, Washington and Guarantor hereby expressly and irrevocably
submits to the jurisdiction of such courts in any suit, action or proceeding relating to this Guaranty. 

	 	 	/s/ MARLIN J. ELLER   
 Marlin Eller as Manager of the Eller and McConney 1995 Family Living Trust

Dated: September 4,
1998 

35

  

EXHIBIT
A 

[FLOOR
PLAN] 

[DEPENDABLE
BUILDING MAINTENANCE COMPANY LETTERHEAD] 

EXHIBIT
E 

CLEANING
SPECIFICATIONS 

	I.
	Entire
Second Floor 

    A.  Daily
Services (To be performed five days per week, Sunday through Thursday) 

     1. Empty
all waste receptacles replacing trash liners as needed to prevent odors, spills, or any offensive appearance. Trash to be removed to dumpster provided on site. 

     2. Dust
ledges and other horizontal surfaces within reach. 

     3. Dust
counters, spot wash where required. 

     4. Dust
horizontal surfaces of desks, chairs, tables, file cabinets, and other office furniture. If glass, use glass cleaner. 

     5. Vacuum
all carpeted traffic areas in offices, conference rooms, lobby, and corridors. 

     6. Spot
clean minor carpet stains. Report any large/major carpet stains to Client. 

     7. Remove
finger marks and smudges from doors, frames, light switches, relights, and partitions. 

     8. Remove
lint and physical dirt from fabric upholstered chairs and couches. 

     9. Brush
all conference room chairs and reposition under conference tables, being careful to not damage table/chair edges. 

    10. Return
all chairs and waste baskets to proper position for next day's use. 

    11. Lunchroom:

    a.  Vacuum
all carpeted areas. 

    b.  Sweep
all hard surface floors and damp mop. 

    c.  Wash
and wipe serving area counter tops and fronts. 

    d.  Collect
all trash and remove from the premises. Place in dumpster provided on site. 

    12. Do
not move items on desks or credenzas while cleaning. Do not unplug computers, typewriters, copy machines, or other electrical equipment. 

    13. If
recycle program is in effect, remove recycle materials to containers provided on site. 

    14. Do
not assist the entry of anyone other than authorized Dependable employees into occupant space. 

    15. Report
to Client any broken fixtures or other items needing building management attention. 

    16. Maintain
neat and orderly janitor supply closet or area to be provided by Client. All chemicals will have MSDS information in janitor closet. 

    17. Secure
all doors after service. Unlock only one office or area at a time to clean so as to preclude unauthorized entry. 

36

 

    B.
Monthly Services (To be performed a minimum of one time per month unless otherwise designated) 

     1. Dust
high surfaces (i.e. tops of picture frames, partition tops, mouldings, cabinets, wall hangings, and other wall accessories). 

     2. Dust
baseboards. 

    C.
Quarterly Services (To be performed a minimum of four times per year unless otherwise designated) 

     1. Vacuum
or dust air diffuser grills. 

     2. Damp
wipe all telephone with an approved germicidal cleaner. Do not spray solution directly on phone equipment. 

	III.
	Restroom—Second
Floor 

    A.  Daily
Services (To be performed five days per week, Sunday through Thursday) 

     1. Check
and refill towel, soap, toilet paper, seat cover, and sanitary napkin dispensers. Dependable may provide and bill separately if requested by Client. 

     2. Sweep
or dust mop floor surfaces. 

     3. Wet
mop floor surfaces with disinfectant solution. 

     4. Dust
horizontal surfaces within reach. 

     5. Empty
and clean all waste containers. Place trash for disposal in dumpster provided on site. 

     6. Empty
and clean all sanitary napkin disposal containers. 

     7. Clean
and polish all soap, towel, toilet paper, and seat cover dispensers. 

     8. Clean
and polish all mirrors, frames, and shelves. 

     9. Clean
and polish all wash basins. 

    10. Clean
and sanitize counters, toilets, toilet seats and urinals. 

    11. Clean
and polish chrome fixtures. 

    12. Spot
clean walls around sinks, towel dispensers, urinals, partitions, and door frames. 

    13. Remove
gum, tar, and other foreign substances from floor surfaces. 

    14. Report
any fixture not working properly to Client. 

    B.  Monthly
Services (To be performed a minimum of one time per month unless otherwise designated) 

     1. Dust
or vacuum air diffusers. 

     2. Wash
walls, partitions, and doors. 

     3. Dust
or vacuum light fixtures. 

	IV.
	Services
Provided on Request, Beyond Current Scope of Contract (Performed at Extra Cost) 

    A.  Strip
or machine scrub and refinish floor surfaces. 

    B.  Carpet
cleaning, steam/shampoo—$0.12 per square foot per service with a minimum charge of $66.00. 

37

 

    C.  Window cleaning—Quoted and service fee provided at Client's request. 

    D.  Fluorescent
light changing. 

	V.
	Other
Services Available—As Requested 

    A.  Upholstered
furniture cleaning. 

    B.  Applying
special carpet soiling retardant and anti-stat to carpeting. 

    C.  Wall
washing service. 

    D.  Oil
treatment for wood, desks, tables, paneling, etc. 

    E.  Levilor
blind cleaning, including removal, ultrasonic washing, drying, and rehanging. Minor repairs also available. 

38

 
 
 

EXHIBIT B
  CONSENT TO SUBLEASE    
  

    THIS CONSENT TO SUBLEASE (this "Consent") is executed as of            , 2000, by 223 Taylor Corp., a Washington corporation ("Landlord"),
Sunhawk.com Corporation, f/k/a Sunhawk Corp., a Washington corporation ("Tenant") and Dailyshopper.com, Inc. ("Subtenant"). 

    Landlord
and Tenant are parties to that certain Lease dated August 10, 1998 (the "Lease") and the premises subject of the Lease are referred to herein as the "Premises". 

    Tenant
has requested Landlord's consent to a sublease (the "Sublease") of approximately 5,805 square feet of the Premises to Subtenant on the terms set forth in the Sublease attached
as Exhibit A.

    Landlord
hereby consents to the Sublease, such consent being subject to and upon the following terms and conditions to which Tenant and Subtenant hereby agree: 

    1.  The
Sublease is and shall be at all times subject and subordinate to the Lease, and all of the covenants, agreements, terms, provisions and conditions contained in
the Lease, including any subordination, attornment and nondisturbance terms. 

    2.  Subtenant
does hereby expressly assume and agree to be bound by and to perform and comply with, for the benefit of Landlord, each and every obligation of Tenant
under the Lease with respect to Subtenant's portion of the Premises to the extent applicable to Subtenant's occupancy of its portion of the subleased Premises (expressly excluding those provisions of
the Master Lease referenced in Section 7.b of the Sublease). Notwithstanding the Sublease, or Landlord's consent to it, Tenant shall remain fully and primarily liable for the payment of rents
and for the performance of all other obligations of Tenant under the Lease. 

    3.  The
acceptance of rents by Landlord from Tenant, Subtenant or anyone else liable under the Lease shall not be deemed a waiver by Landlord of any provisions of the
Lease. 

    4.  This
Consent shall not constitute a consent to any subsequent subletting or assignment and shall not relieve Tenant or any person claiming under or through Tenant
of the obligation to obtain the consent of Landlord to any future assignment or sublease (including, without limitation, any future assignment or sublease of the Sublease). 

    5.  Any
act or omission of Subtenant or anyone claiming under or through Subtenant that violates any of the provisions of the Lease shall be deemed a violation of the
Lease by Tenant. 

    6.  The
subleased premises shall (subject to all of the covenants and agreements of the Lease) be used solely for general office uses. 

    7.  Nothing
contained herein shall be deemed or construed to modify, waive, impair or affect any of the covenants, agreements, terms, provisions or conditions contained
in the Lease or to waive any breach or default by Tenant in the keeping, performance or observance thereof. 

    8.  This
Consent is not an approval or acceptance by Landlord of any of the terms or obligations of the Sublease, nor shall Landlord by this Consent be deemed a party
to the Sublease. 

    9.  Following
any termination of the Lease, Landlord shall have the option to either treat the Sublease as terminated automatically by termination of the Lease, or
elect to not terminate the Sublease in which case Subtenant shall attorn to and perform all of its obligations under the Sublease for the benefit of Landlord. 

    10. This
consent is granted on the condition that Landlord receive payment of the $500 consent fee plus reimbursement of all attorneys fees incurred by Landlord in
connection with this Consent. 

39

 

    IN WITNESS WHEREOF, Landlord, Tenant and Subtenant have caused their duly authorized representatives to execute this Consent as of the date first above written. 

	 	 	LANDLORD:
	

 	
 	

223 TAYLOR CORP.
	

 	
 	

By:	
 	

 
	 	 	 	 	

	

 	
 	

Its:	
 	

 
	 	 	 	 	

	

 	
 	
TENANT:
	

 	
 	

SUNHAWK.COM CORP.
	

 	
 	

By:	
 	

 
	 	 	 	 	

	

 	
 	

Its:	
 	

 
	 	 	 	 	

	

 	
 	
SUBTENANT:
	

 	
 	

DAILYSHOPPER.COM, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	

	

 	
 	

Its:	
 	

 
	 	 	 	 	

40

 
 
 

EXHIBIT C
  OUTLINE OF THE PREMISES    
  

[PLEASE PROVIDE]

41

QuickLinks

SUBLEASE AGREEMENT

R E C I T A L S

A G R E E M E N T

EXHIBIT A FIRST AMENDMENT TO LEASE

MASTER LEASE

TABLE OF CONTENTS TO LEASE

LEASE

EXHIBIT C TO LEASE RULES AND REGULATIONS

EXHIBIT D ADDITIONAL LEASE TERMS

RIDER 1 TO LEASE

GUARANTY

EXHIBIT B CONSENT TO SUBLEASE

EXHIBIT C OUTLINE OF THE PREMISESExhibit 10.1

                          NEWBERRY FEDERAL SAVINGS BANK
                              EMPLOYMENT AGREEMENT

     This AGREEMENT  ("Agreement") is made effective as of June 29, 2000, by and
among Newberry  Federal Savings Bank (the "Bank"),  a federally  chartered stock
savings  bank,  with its  principal  administrative  office at 1735 Wilson Road,
Newberry,  South  Carolina  29108,  DutchFork  Bancshares,  Inc., a  corporation
organized  under the laws of the State of Delaware,  the holding company for the
Bank (the "Holding Company"), and J. Thomas Johnson ("Executive").

     WHEREAS,  the Bank wishes to assure itself of the services of Executive for
the period provided in this Agreement; and

     WHEREAS,  Executive  is  willing  to serve in the  employ  of the Bank on a
full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve as
Chairman of the Board and Chief Executive  Officer of the Bank.  Executive shall
render   administrative  and  management  services  to  the  Bank  such  as  are
customarily  performed  by persons  situated  in a similar  executive  capacity.
During said period,  Executive also agrees to serve,  if elected,  as an officer
and director of the Holding Company or any subsidiary of the Bank.

2.   TERM.

     (a) The period of  Executive's  employment  under this  Agreement  shall be
deemed to have  commenced as of the date first above written and shall  continue
for a period of thirty-six (36) full calendar months  thereafter.  Commencing on
the first anniversary date of this Agreement, and continuing on each anniversary
thereafter,  the  disinterested  members of the board of  directors  of the Bank
("Board") may extend the  Agreement an  additional  year such that the remaining
term of the Agreement  shall be thirty-six (36) months unless  Executive  elects
not to extend the term of this  Agreement by giving written notice in accordance
with  Section 8 of this  Agreement.  The Board  will  review the  Agreement  and
Executive's  performance  annually for purposes of determining whether to extend
the Agreement  and the  rationale  and results  thereof shall be included in the
minutes of the Board's meeting. The Board shall give notice to Executive as soon
as possible after such review as to whether the Agreement is to be extended.

     (b) During  the  period of  Executive's  employment  hereunder,  except for
periods of absence  occasioned  by illness,  reasonable  vacation  periods,  and
reasonable  leaves of absence,  Executive  shall  devote  substantially  all his
business time, attention,  skill, and efforts to the faithful performance of his
duties hereunder including  activities and services related to the organization,
operation and  management of the Bank and  participation  in community and civic
organizations; provided, however,

                                      - 1 -

<PAGE>

that,  with the approval of the Board,  as  evidenced  by a  resolution  of such
Board,  from time to time,  Executive  may serve,  or continue to serve,  on the
boards of directors of, and hold any other offices or positions in, companies or
organizations, which, in such Board's judgment, will not present any conflict of
interest with the Bank,  or materially  affect the  performance  of  Executive's
duties pursuant to this Agreement.

     (c) Notwithstanding anything in this Agreement to the contrary, Executive's
employment  with the Bank may be terminated by the Bank or Executive  during the
term of this Agreement, subject to the terms and conditions of this Agreement.

3.   COMPENSATION AND REIMBURSEMENT.

     (a) The Bank shall pay Executive as  compensation  a salary of $191,000 per
year ("Base  Salary").  Base Salary  shall  include any amounts of  compensation
deferred by Executive under any tax-qualified retirement or welfare benefit plan
or any other deferred compensation arrangement maintained by the Bank. Such Base
Salary shall be payable in accordance with the regular payroll  practices of the
Bank.  During the period of this  Agreement,  Executive's  Base Salary  shall be
reviewed at least annually in connection with Executive's performance evaluation
by the Board and the Board's  consideration  of any renewal or  extension of the
term of the Agreement. Executive's salary review shall be conducted by the Board
or by a Committee of the Board,  delegated such responsibility by the Board. Any
increase  in Base Salary  shall  become the "Base  Salary" for  purposes of this
Agreement.  In addition to the Base Salary provided in this Subsection 3(a), the
Bank shall also provide  Executive,  at no premium cost to  Executive,  with all
such other benefits as are provided uniformly to permanent  full-time  employees
of the Bank. In addition,  Executive shall be entitled to incentive compensation
and  bonuses  as  provided  in any  plan or  arrangement  of the  Bank in  which
Executive is eligible to participate.

     (b)  Executive  shall be entitled to  participate  in any employee  benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement,  and the Bank will not,  without
Executive's prior written consent, make any changes in such plans,  arrangements
or perquisites  which would materially  adversely affect  Executive's  rights or
benefits  thereunder;  except to the extent such changes are made  applicable to
all  Bank  employees  on a  non-  discriminatory  basis.  Without  limiting  the
generality of the foregoing  provisions of this Subsection 3(b), Executive shall
be entitled to  participate  in or receive  benefits under all plans relating to
stock  options,  restricted  stock awards,  stock  purchases,  pension,  thrift,
supplemental retirement,  profit-sharing,  employee stock ownership,  group life
insurance,  medical and other health and welfare  coverage,  education,  cash or
stock bonuses that are now or hereafter made available by the Bank to its senior
executives and key management  employees,  subject to and on a basis  consistent
with  the  terms,  conditions  and  overall  administration  of such  plans  and
arrangements.  Nothing paid to Executive under any such plan or arrangement will
be deemed to be in lieu of other  compensation  to which  Executive  is entitled
under this Agreement.

                                      - 2 -
<PAGE>

     (c) The Bank  shall  pay or  reimburse  Executive  for all  reasonable  and
documented  expenses which have been authorized by the Board and which Executive
incurred in the  performance of his obligations  under this Agreement.  Further,
the Bank may provide such additional  compensation in such form and such amounts
as the Board may from time to time determine.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the  occurrence  of an Event of  Termination  (as  defined in this
Agreement)  during  Executive's  term of employment  under this  Agreement,  the
provisions of this Section 4 shall apply. As used in this  Agreement,  an "Event
of  Termination"  shall mean and include any one or more of the  following:  (i)
termination by the Bank of Executive's  full-time  employment  hereunder for any
reason other than a termination  governed by Subsection  5(a) of this Agreement,
or  Termination  for Cause,  as defined  in  Section 7 of this  Agreement;  (ii)
Executive's  resignation  from the Bank's employ upon any (A) material change in
Executive's  function,  duties,  or  responsibilities,  which change would cause
Executive's  position  to become one of lesser  responsibility,  importance,  or
scope from the position and  attributes  thereof  described in Section 1 of this
Agreement,  unless  consented to by Executive,  (B)  relocation  of  Executive's
principal  place of  employment  by more than 25 miles from its  location at the
effective date of this Agreement, unless consented to by Executive, (C) material
reduction in the benefits and perquisites to Executive from those being provided
as of the effective date of this  Agreement,  unless  consented to by Executive,
(D) a liquidation or dissolution of the Bank or Holding  Company,  or (E) breach
of this  Agreement by the Bank.  Upon the  occurrence of any event  described in
clauses (A), (B), (C), (D), or (E) above, the Bank shall have the opportunity to
cure the breach within thirty (30) days after  receiving  notice from  Executive
that an Event of Termination  had occurred.  If the Bank does not cure the event
or  circumstance  constituting  an Event of  Termination  within the time period
prescribed in this Subsection  4(a),  Executive shall have the right to elect to
terminate his employment  under this Agreement by resignation upon not less than
sixty (60) days prior written notice thereafter.

     (b)  Upon  the  occurrence  of an  Event  of  Termination,  on the  Date of
Termination,  as  defined  in  Section 8 of this  Agreement,  the Bank  shall be
obligated  to pay  Executive,  or, in the  event of his  subsequent  death,  his
beneficiary or beneficiaries,  or his estate, as the case may be, a sum equal to
the sum of: (i) the Base Salary and bonuses in accordance  with  Subsection 3(a)
of this  Agreement that would have been paid to Executive for the remaining term
of this  Agreement  had the  Event of  Termination  not  occurred;  and (ii) all
benefits,  including health insurance in accordance with Subsection 3(b) of this
Agreement  that would have been provided to Executive for the remaining  term of
this Agreement had an Event of Termination not occurred; provided, however, that
any payments  pursuant to this  Subsection  4(b) and Subsection 4(c) below shall
not,  in the  aggregate,  exceed  three (3)  times  Executive's  average  annual
compensation  for the five (5) most recent taxable years that Executive has been
employed by the Bank or such lesser number of years in the event that  Executive
shall have been employed by the Bank for less than five (5) years.  In the event
the Bank is not in compliance with its minimum  capital  requirements or if such
payments  pursuant to this  Subsection 4(b) would cause the Bank's capital to be
reduced below its minimum regulatory capital  requirements,  such payments shall
be  deferred  until  such time as the Bank or  successor  thereto  is in capital
compliance. At the election of Executive, which election is to be made

                                      - 3 -
<PAGE>

prior to an Event of  Termination,  such payments shall be made in a lump sum as
of  Executive's  Date of  Termination.  In the event that no  election  is made,
payment to  Executive  will be made on a monthly  basis in  approximately  equal
installments during the remaining term of the Agreement. Such payments shall not
be reduced in the event Executive obtains other employment following termination
of employment.

     (c) Upon the occurrence of an Event of Termination,  the Bank will cause to
be  continued  life,  medical,  dental  and  disability  coverage  substantially
identical  to the  coverage  maintained  by the Bank or the Holding  Company for
Executive  prior to his  termination at no premium cost to Executive,  except to
the  extent  such  coverage  may be changed  in its  application  to all Bank or
Holding Company employees.  Such coverage shall cease upon the expiration of the
remaining term of this Agreement.

     (d) Executive shall not be entitled to receive  benefits under  Subsections
4(b) or 4(c) of this Agreement in the event Executive is employed by the Holding
Company or subsidiary of the Bank following his  termination of employment  from
the Bank as a result of an Event of Termination.

5.   CHANGE IN CONTROL.

     (a) For  purposes of this  Agreement,  a "Change in Control" of the Bank or
Holding Company shall mean an event of a nature that: (i) results in a Change in
Control  of the Bank or the  Holding  Company  within  the  meaning  of the Home
Owners' Loan Act of 1933, as amended and the Rules and  Regulations  promulgated
by the Office of Thrift Supervision  ("OTS") (or its predecessor  agency), as in
effect on the date hereof;  or (ii) without  limitation such a Change in Control
shall be deemed to have  occurred at such time as (A) any  "person" (as the term
is used in  Sections  13(d) and 14(d) of the  Exchange  Act) is or  becomes  the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or  indirectly,  of  voting  securities  of  the  Bank  or the  Holding  Company
representing  25% or more of the  Bank's or the  Holding  Company's  outstanding
voting  securities  or right to acquire  such  securities  except for any voting
securities  of the  Bank  purchased  by  the  Holding  Company  and  any  voting
securities  purchased by any employee benefit plan of the Holding Company or its
Subsidiaries,  or (B)  individuals  who  constitute the Board on the date hereof
(the  "Incumbent  Board") cease for any reason to constitute at least a majority
thereof,  provided  that any person  becoming a director  subsequent to the date
hereof whose election was approved by a vote of at least  three-quarters  of the
directors  comprising the Incumbent  Board, or whose  nomination for election by
the Holding Company's stockholders was approved by a Nominating Committee solely
composed of members which are Incumbent Board members, shall be, for purposes of
this clause (B),  considered as though he were a member of the Incumbent  Board,
or  (C) a  plan  of  reorganization,  merger,  consolidation,  sale  of  all  or
substantially  all the  assets of the Bank or the  Holding  Company  or  similar
transaction  is  consummated  in which the Bank or  Holding  Company  is not the
resulting entity.

     (b) If a Change in Control has occurred pursuant to Subsection 5(a) of this
Agreement  or the Board has  determined  that a Change in Control has  occurred,
Executive  shall be entitled to the benefits  provided in paragraphs (c) and (d)
of this Section 5 upon his subsequent termination of

                                      - 4 -
<PAGE>

employment at any time during the twelve (12) month period following the date of
the  Change in Control  due to: (1)  Executive's  dismissal  or (2)  Executive's
voluntary  resignation  following  any  demotion,   loss  of  title,  office  or
significant   authority  or   responsibility,   material   reduction  in  annual
compensation  or benefits or relocation of his principal  place of employment by
more than 25 miles from its location immediately prior to the Change in Control,
unless  such  termination  is because of his death,  disability,  retirement  or
Termination for Cause (as defined in Section 7 of this Agreement).

     (c) Upon Executive's entitlement to benefits pursuant to Subsection 5(b) of
this Agreement,  the Bank shall pay Executive, or in the event of his subsequent
death, his beneficiary or  beneficiaries,  or his estate,  as the case may be, a
sum equal to the greater of: (1) the Base Salary and bonuses in accordance  with
Subsection 3(a) of this Agreement that would have been paid to Executive for the
remaining  term of this  Agreement had the event  described in Subsection (b) of
this Section 5 not occurred and all benefits,  including  health  insurance,  in
accordance  with Subsection 3(b) of this Agreement that would have been provided
to Executive for the remaining term of this Agreement had the event described in
Subsection  (b)  of  this  Section  5 not  occurred;  or  (2)  three  (3)  times
Executive's  Average Annual  Compensation  (as defined  herein) for the five (5)
most recent  taxable years that  Executive has been employed by the Bank or such
lesser number of years in the event that  Executive  shall have been employed by
the Bank for less than five (5) years. Such "Average Annual  Compensation" shall
include all taxable income paid by the Bank,  including but not limited to, Base
Salary, commissions, and bonuses, as well as contributions on Executive's behalf
to any pension and/or profit  sharing plan,  retirement  payments,  directors or
committee  fees and fringe  benefits paid or to be paid to Executive in any such
year and payment of any expense items without accountability or business purpose
or that do not meet the Internal Revenue Service  requirements for deductibility
by the Bank;  provided,  however,  that any  payment  under this  provision  and
Subsection  5(d) below  shall not  exceed  three (3) times  Executive's  Average
Annual Compensation. In the event the Bank is not in compliance with its minimum
capital  requirements  or if such payments  would cause the Bank's capital to be
reduced below its minimum regulatory capital  requirements,  such payments shall
be  deferred  until  such time as the Bank or  successor  thereto  is in capital
compliance. At the election of Executive,  which election is to be made prior to
a Change in Control,  such payment shall be made in a lump sum as of Executive's
Date of Termination. In the event that no election is made, payment to Executive
will be made in  approximately  equal  installments  on a monthly  basis  over a
period  of  thirty-six  (36)  months  following  Executive's  termination.  Such
payments shall not be reduced in the event  Executive  obtains other  employment
following termination of employment.

     (d) Upon Executive's entitlement to benefits pursuant to Subsection 5(b) of
this Agreement,  the Bank will cause to be continued life,  medical,  dental and
disability  coverage  substantially  identical to the coverage maintained by the
Bank for  Executive  prior to his  severance  at no premium  cost to  Executive,
except to the extent that such  coverage may be changed in its  application  for
all Bank  employees on a  non-discriminatory  basis.  Such coverage and payments
shall cease upon the earlier of: (i) the  expiration of  thirty-six  (36) months
following  the Change in Control;  or (ii)  employment  by another  employer who
provides substantially similar life, medical, dental and disability coverage.

                                      - 5 -
<PAGE>

6.   CHANGE IN CONTROL RELATED PROVISIONS.

     Notwithstanding the provisions of Section 5 of this Agreement,  in no event
shall the  aggregate  payments or  benefits to be made or afforded to  Executive
under Section 5 (the  "Termination  Benefits")  constitute an "excess  parachute
payment" under Section 280G of the Internal Revenue Code of 1986, as amended, or
any successor thereto, and in order to avoid such a result, Termination Benefits
will be reduced, if necessary,  to an amount (the "Non-Triggering  Amount"), the
value of which is one  dollar  ($1.00)  less than an  amount  equal to three (3)
times  Executive's  "base amount," as determined in accordance with said Section
280G.  The  allocation of the reduction  required  hereby among the  Termination
Benefits  provided  by  Section  5 of this  Agreement  shall  be  determined  by
Executive.

7.   TERMINATION FOR CAUSE.

     The  term  "Termination  for  Cause"  shall  mean  termination  because  of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations  or similar  offenses)  or final  cease-and-desist  order or material
breach  of any  provision  of this  Agreement.  Notwithstanding  the  foregoing,
Executive shall not be deemed to have been Terminated for Cause unless and until
there  shall have been  delivered  to him a Notice of  Termination  which  shall
include a copy of a resolution duly adopted by the affirmative  vote of not less
than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after  reasonable  notice to Executive and an opportunity
for him, together with counsel,  to be heard before the Board),  finding that in
the good faith opinion of the Board,  Executive was guilty of conduct justifying
Termination  for  Cause  and  specifying  the  particulars  thereof  in  detail.
Executive shall not have the right to receive compensation or other benefits for
any period after the Date of Termination for Cause.  During the period beginning
on the date of the Notice of Termination for Cause pursuant to Section 8 of this
Agreement  through the Date of Termination  for Cause,  stock options granted to
Executive  under any stock  option plan shall not be  exercisable  nor shall any
unvested stock awards  granted to Executive  under any stock benefit plan of the
Bank, the Holding Company or any subsidiary or affiliate  thereof,  vest. At the
Date of Termination for Cause,  such stock options and any unvested stock awards
shall  become  null and void and shall not be  exercisable  by or  delivered  to
Executive at any time subsequent to such Termination for Cause.

8.   NOTICE.

     (a)  Any  purported  termination  by the  Bank  or by  Executive  shall  be
communicated by Notice of Termination to the other party hereto. For purposes of
this  Agreement,  a "Notice of  Termination"  shall mean a written  notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances  claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

                                      - 6 -
<PAGE>

     (b) "Date of  Termination"  shall mean the date  specified in the Notice of
Termination  (which,  in the case of a Termination for Cause,  shall not be less
than thirty days from the date such Notice of Termination is given).

     (c) If, within thirty (30) days after any Notice of  Termination  is given,
the party  receiving such Notice of Termination  notifies the other party that a
dispute exists concerning the termination,  the Date of Termination shall be the
date on which the  dispute  is  finally  determined,  either  by mutual  written
agreement  of  the  parties,  by a  binding  arbitration  award,  or by a  final
judgment,  order or decree of a court of  competent  jurisdiction  (the time for
appeal  therefrom  having  expired  and no appeal  having been  perfected)  and,
provided further,  that the Date of Termination shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice pursues the resolution of such dispute with reasonable diligence.  Except
as otherwise  provided by this  Agreement,  following  Executive's  receipt of a
Notice of Termination,  his employment with the Bank shall be terminated and his
rights to any and all benefits under this Agreement shall cease.

9.   POST-TERMINATION OBLIGATIONS.

     All  payments  and  benefits to  Executive  under this  Agreement  shall be
subject  to  Executive's  compliance  with this  Section 9 for one (1) full year
after  the  earlier  of the  expiration  of this  Agreement  or  termination  of
Executive's  employment with the Bank.  Executive shall, upon reasonable notice,
furnish  such  information  and  assistance  to the  Bank as may  reasonably  be
required by the Bank in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become, a party.

10.  NON-COMPETITION AND NON-DISCLOSURE OF BANK BUSINESS.

     (a) Upon any termination of Executive's  employment  hereunder  pursuant to
Section 4 of this Agreement, Executive agrees not to compete with the Bank for a
period of one (1) year following such termination in any city, town or county in
which  Executive's  normal business office is located and the Bank has an office
or has filed an  application  for  regulatory  approval to  establish an office,
determined as of the  effective  date of such  termination,  except as agreed to
pursuant to a resolution duly adopted by the Board. Executive agrees that during
such period and within said cities, towns and counties, Executive shall not work
for or advise,  consult or otherwise  serve with,  directly or  indirectly,  any
entity whose business materially competes with the depository,  lending or other
business   activities  of  the  Bank.  The  parties  hereto,   recognizing  that
irreparable  injury will result to the Bank,  its  business  and property in the
event of Executive's  breach of this Subsection 10(a) agree that in the event of
any such  breach by  Executive,  the Bank will be  entitled,  in addition to any
other remedies and damages available, to an injunction to restrain the violation
hereof by Executive,  Executive's partners, agents, servants,  employees and all
persons  acting for or under the direction of Executive.  Nothing herein will be
construed as prohibiting the Bank from pursuing any other remedies  available to
the Bank for such breach or threatened breach, including the recovery of damages
from Executive.

                                      - 7 -
<PAGE>

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
business activities and plans for business activities of the Bank and affiliates
thereof,  as it may exist from time to time,  is a valuable,  special and unique
asset of the business of the Bank.  Executive will not, during or after the term
of his  employment,  disclose  any  knowledge of the past,  present,  planned or
considered  business activities of the Bank or affiliates thereof to any person,
firm,  corporation,  or other  entity  for any  reason  or  purpose  whatsoever.
Notwithstanding the foregoing,  Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Bank. Further,
Executive may disclose information regarding the business activities of the Bank
to the OTS and the Federal Deposit Insurance  Corporation ("FDIC") pursuant to a
formal  regulatory  request.  In the event of a breach or  threatened  breach by
Executive of the  provisions of this Section 10, the Bank will be entitled to an
injunction  restraining  Executive  from  disclosing,  in whole or in part,  the
knowledge of the past, present, planned or considered business activities of the
Bank or affiliates thereof, or from rendering any services to any person,  firm,
corporation,  other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed.  Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies  available to the Bank for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11.  SOURCE OF PAYMENTS.

     (a) All payments provided in this Agreement shall be timely paid in cash or
check  from the  general  funds  of the  Bank.  The  Holding  Company,  however,
unconditionally guarantees payment and provision of all amounts and benefits due
hereunder to  Executive  and, if such amounts and benefits due from the Bank are
not timely paid or provided by the Bank, such amounts and benefits shall be paid
or provided by the Holding Company.

     (b)  Notwithstanding  any provision  herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received  by  Executive  under the  Employment  Agreement  dated June 29,  2000,
between  Executive  and the Holding  Company,  such  compensation  payments  and
benefits  paid by the Holding  Company will be  subtracted  from any amounts due
simultaneously to Executive under similar provisions of this Agreement. Payments
pursuant to this Agreement and the Holding Company  Agreement shall be allocated
in proportion to the services  rendered and time expended on such  activities by
Executive  as  determined  by the  Holding  Company  and the Bank on a quarterly
basis.

12.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

     This Agreement contains the entire understanding between the parties hereto
and  supersedes  any  prior  employment   agreement  between  the  Bank  or  any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation  inuring to Executive of
a kind elsewhere  provided.  No provision of this Agreement shall be interpreted
to mean that  Executive  is  subject  to  receiving  fewer  benefits  than those
available to him without reference to this Agreement.

                                      - 8 -
<PAGE>

13.  NO ATTACHMENT.

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of,
Executive and the Bank and their respective successors and assigns.

14.  MODIFICATION AND WAIVER.

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.  REQUIRED PROVISIONS.

     In the event any of the  foregoing  provisions  of this  Section  15 are in
conflict with the terms of this Agreement, this Section 15 shall prevail.

     (a) The Bank may  terminate  Executive's  employment  at any time,  but any
termination by the Bank, other than  Termination for Cause,  shall not prejudice
Executive's  right to  compensation  or other  benefits  under  this  Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 7 hereinabove.

     (b) If Executive is suspended  from office  and/or  temporarily  prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section  8(e)(3) or 8(g)(1) of the  Federal  Deposit  Insurance  Act,  12 U.S.C.
ss.1818(e)(3)  or (g)(1);  the Bank's  obligations  under this contract shall be
suspended as of the date of service,  unless stayed by appropriate  proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion:  (i)
pay  Executive all or part of the  compensation  withheld  while their  contract
obligations were suspended;  and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.

     (c)  If   Executive  is  removed   and/or   permanently   prohibited   from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section  8(e)(4) or 8(g)(1) of the  Federal  Deposit  Insurance  Act,  12 U.S.C.
ss.1818(e)(4) or (g)(1), all obligations of the Bank under this

                                      - 9 -
<PAGE>

contract  shall  terminate  as of the  effective  date of the order,  but vested
rights of the contracting parties shall not be affected.

     (d) If the Bank is in default as defined in Section  3(x)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. ss.1813(x)(1) all obligations of the Bank under
this  contract  shall  terminate as of the date of default,  but this  paragraph
shall not affect any vested rights of the contracting parties.

     (e) All  obligations  of the Bank under this contract  shall be terminated,
except to the extent  determined that  continuation of the contract is necessary
for the continued  operation of the institution:  (i) by the Director of the OTS
(or his designee), the FDIC or the Resolution Trust Corporation, at the time the
FDIC enters into an agreement to provide  assistance to or on behalf of the Bank
under the authority  contained in Section 13(c) of the Federal Deposit Insurance
Act, 12 U.S.C. ss.1823(c);  or (ii) by the Director of the OTS (or his designee)
at the time the  Director (or his  designee)  approves a  supervisory  merger to
resolve  problems  related  to the  operations  of the  Bank or when the Bank is
determined by the Director to be in an unsafe or unsound  condition.  Any rights
of the parties that have already vested,  however, shall not be affected by such
action.

     (f)  Any  payments  made  to  Executive  pursuant  to  this  Agreement,  or
otherwise,   are   subject  to  and   conditioned   upon   compliance   with  12
U.S.C.ss.1828(k)   and  12  C.F.R.ss.545.121   and  any  rules  and  regulations
promulgated thereunder.

     (g) Any payments  made under this  Agreement  shall not, in the  aggregate,
exceed three (3) times  Executive's  Average Annual  Compensation (as defined in
this  Agreement)  for the five (5) most recent  taxable years that Executive has
been  employed  by the Bank or such  lesser  number of years in the  event  that
Executive shall have been employed by the Bank for less than five (5) years.

16.  REINSTATEMENT OF BENEFITS UNDER SUBSECTION 15(b).

     In the event  Executive is suspended  and/or  temporarily  prohibited  from
participating  in the  conduct of the Bank's  affairs by a notice  described  in
Subsection  15(b)  of this  Agreement  (the  "Notice")  during  the term of this
Agreement  and a Change in Control,  as defined  herein,  occurs,  the Bank will
assume its  obligation to pay and  Executive  will be entitled to receive all of
the termination benefits provided for under Section 5 of this Agreement upon the
Bank's receipt of a dismissal of charges in the Notice.

17.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

                                     - 10 -
<PAGE>

18.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

19.  GOVERNING LAW.

     The validity, interpretation, performance and enforcement of this Agreement
shall be  governed  by the laws of the State of  Delaware,  without  regards  to
principles  of  conflicts  of law of this  state,  but  only to the  extent  not
superseded by federal law.

20.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the location of the Bank,  in  accordance  with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having  jurisdiction;  provided,  however,  that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

     In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of Executive,  whether by judgment,
arbitration  or  settlement,  Executive  shall be entitled to the payment of all
back-pay,  including  salary,  bonuses and any other cash  compensation,  fringe
benefits and any compensation and benefits due Executive under this Agreement.

21.  PAYMENT OF COSTS AND LEGAL FEES.

     All reasonable costs and legal fees paid or incurred by Executive  pursuant
to any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by the Bank if Executive is successful on the merits pursuant
to a legal judgment, arbitration or settlement.

22.  INDEMNIFICATION.

     (a) The Bank shall provide  Executive  (including his heirs,  executors and
administrators)   with  coverage  under  a  standard  directors'  and  officers'
liability insurance policy at its expense and shall indemnify Executive (and his
heirs,  executors and administrators) as permitted under federal law against all
expenses  and  liabilities  reasonably  incurred  by him in  connection  with or
arising out of any  action,  suit or  proceeding  in which he may be involved by
reason of his having been a director  or officer of the Bank  (whether or not he
continues to be a director or officer at the time of incurring  such expenses or
liabilities),  such expenses and liabilities to include,  but not be limited to,
judgments,   court  costs  and  attorneys'  fees  and  the  cost  of  reasonable
settlements.

                                     - 11 -
<PAGE>

     (b) Any payments made to Executive  pursuant to this Section are subject to
and conditioned upon compliance with 12 U.S.C.ss.1828(k) and 12 C.F.R.ss.545.121
and any rules or regulations promulgated thereunder.

23.  SUCCESSOR TO THE BANK.

     The Bank  shall  require  any  successor  or  assignee,  whether  direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially  all the  business or assets of the Bank or the  Holding  Company,
expressly  and  unconditionally  to  assume  and  agree to  perform  the  Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Bank would be required to perform if no such  succession or  assignment  had
taken place.

                                     - 12 -
<PAGE>

                                   SIGNATURES

     IN WITNESS WHEREOF, Newberry Federal Savings Bank and DutchFork Bancshares,
Inc.  have caused this  Agreement  to be executed  and their seals to be affixed
hereunto by their duly  authorized  officers and  directors,  and  Executive has
signed this Agreement, on the 5th day of July, 2000.

ATTEST:                                NEWBERRY FEDERAL SAVINGS BANK

 /s/ Brenda S. Smith                   By: /s/ Steve P. Sligh
-------------------------------           --------------------------------------
                                          For the Entire Board of Directors

         [SEAL]

ATTEST:                                DUTCHFORK BANCSHARES, INC.
                                                (Guarantor)

 /s/ Brenda S. Smith                   By:  /s/ Steve P. Sligh
-------------------------------           --------------------------------------
                                          For the Entire Board of Directors

         [SEAL]

WITNESS:                                        EXECUTIVE

 /s/ Brenda S. Smith                        /s/ J. Thomas Johnson
-------------------------------           --------------------------------------
                                          J. Thomas Johnson

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]