Document:

Exhibit 10.15

 

Exhibit 10.15

	 	 	 
	

	 	Royal Bank of Canada

Park Place-Suite 2100

666 Burrard Street

Vancouver, B.C. V6C 3B1

Fax: (604) 665-6465
	 
	 	 
	 

	 	Glen Barisoff

Vice President, Corporate Banking

Tel: (604) 257-7620

e-mail: glen.barisoff@rbccm.com

April 11,
2007

Private and Confidential

Lululemon Athletica, Inc.

1945 McLean Drive

Vancouver, British Columbia, V5N 3J7

Attention:       John Currie, Chief Financial Officer

Dear Sirs:

We are pleased to offer the credit facilities described below (the “Credit Facilities”),
subject to the following terms and conditions. This agreement supersedes and cancels our
letter agreement dated July 2004 as amended by a letter agreements dated September 21, 2004,
October 15, 2004, June 14, 2005 and November 29, 2005 (the “Cancelled Credit Facility”). In
addition, any amount owing by the Borrower to the Bank under the Cancelled Credit Facility
is deemed to be a Borrowing under Facility 1.

DEFINITIONS AND SCHEDULES

The attached schedules are incorporated into this agreement by reference. Schedule “A”
contains definitions of capitalized terms used and not otherwise defined in this agreement.
Unless otherwise provided, all dollar amounts are in Canadian currency and accounting terms
are to be interpreted in accordance with GAAP.

BORROWER

Lululemon Athletica, Inc. (the “Borrower”)

LENDER

Royal Bank of Canada (the “Bank”)

CREDIT FACILITIES

	 	 	 
	Facility (1):

	 	$20,000,000 uncommitted demand revolving facility, by way of:
	 
	(a) 

		RBP based loans (“RBP
Loans”);
	 
	 	 
	(b) 

		RBUSBR based loans in US currency
(“RBUSBR Loans”);
	 
	 	 
	(c) 

	 	Bankers’ Acceptances (“BAs”);
	 
	 	 
	(d) 

		Libor based loans in US currency
Eurocurrency (“Libor Loans”);
	 
	 	 
	(e) 

		Letters of Credit in Canadian currency or US currency (“LCs”);
	 
	 	 
	(f) 

		Letters of Guarantee in Canadian currency or US currency (“LGs”).

Each use of the Credit Facilities is a “Borrowing” and all such usages outstanding at any
time are “Borrowings”. Schedule “B” contains notice provisions applicable to Borrowings that
must be complied with. Schedule “C” contains terms and conditions applicable to Borrowings
made otherwise than by way of RBP Loans or RBUSBR Loans which must be complied with.

 

 

					
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FEF CONTRACTS

At the Borrower’s request the Bank may enter into Foreign Exchange Forward Contracts (“FEF
Contracts”) with the Borrower from time to time with maximum terms of one year. The Bank makes no
commitment to enter into any FEF Contract and may at any time in its sole discretion decline to
enter into any FEF Contract. FEF Contracts will be governed by the terms and conditions set forth
in the FEF Contracts Schedule attached as Schedule D hereto.

TERMS OF OTHER FACILITIES

The Credit Facilities are in addition to the following:

	(a)	 	a lease line of credit in an aggregate principal amount of $2,500,000, having a maximum
sixty (60) month term, which facility is governed by separate agreements between the Borrower
and the Bank; and
	 
	(b)	 	corporate VISA to a maximum amount of $250,000 which is governed by separate agreements
between the Borrower and the Bank.

PURPOSE

Facility (1)

General operating purposes, including the acquisition of franchisee operations.

AVAILABILITY

Facility (1)

The Borrower may borrow, convert, repay and reborrow up to the amount of this revolving
facility.

REPAYMENT

Facility (1)

Borrowings under this facility are expected to revolve with operating requirements.

Notwithstanding compliance with the covenants and all other terms and conditions of this
agreement, and regardless of the maturities of any outstanding instruments or contracts,
Borrowings under this facility are repayable on demand and the Bank may terminate this facility at
any time, without notice or demand.

Upon demand or termination, the Borrower shall pay to the Bank all Borrowings outstanding under
this facility including, without limitation, an amount equal to the aggregate of the face amounts
of all BAs, LCs and LGs which are unmatured or unexpired, which amount shall be held by the Bank
as security for the Borrower’s obligations to the Bank in respect of such instruments or
contracts. The Bank may enforce its rights to realize upon its security and retain an amount
sufficient to secure the Bank for the Borrower’s obligations to the Bank in respect of such
instruments or contracts.

 

 

					
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INTEREST RATES AND FEES

	 	 	 
	Facility (1)
	 	 
	 
	 	 
	RBP Loans:

	 	RBP plus ZERO % per annum.
	 
	 	 
	RBUSBR Loans:

	 	RBUSBR plus ZERO % per annum.
	 
	 	 
	BAs:

	 	BA’s plus Acceptance fee of 1.125% per annum
	 
	 	 
	Libor Loans:

	 	Libor plus 1.125% per annum.
	 
	 	 
	LCs:

	 	1.125% annual fee
	 
	 	 
	LGs:

	 	1.125% annual fee

subject to a minimum fee of $100 in the currency of
issue (where in Canadian currency or US currency) and
$100 in Canadian currency where issued in any other
approved currency.
	 
	 	 
	Annual Review Fee:

	 	0.10% if the average quarterly drawn balance is less
than 33%, 0.05% fee if the average quarterly drawn
balance = >33% and <50% (payable quarterly in
arrears).

Arrangement Fee

An arrangement fee of $30,000 is payable by the Borrower upon acceptance of this agreement. This
fee is non-refundable and is deemed to be earned by the Bank upon acceptance of this agreement, to
compensate for time, effort and expense incurred by the Bank in approving these facilities.

CALCULATION AND PAYMENT OF INTEREST AND FEES

RBP Loans and RBUSBR Loans

The Borrower shall pay interest on each RBP Loan and RBUSBR Loans monthly in arrears, on the 26th
day of each month. Such interest will be calculated monthly and will accrue daily on the basis of
the actual number of days elapsed and a year of 365 days. Interest on RBUSBR Loans shall be paid
in US currency.

LC Fees

The Borrower shall pay an LC fee on the date of any payment made by the Bank pursuant to a drawing
under any LC calculated on the amount drawn, based upon the number of days the LC was outstanding
and a year of 365 days. If the total amount available under any LC has not been drawn prior to the
expiry of such LC, the Borrower shall pay an LC fee calculated on the undrawn portion of such LC
on the expiry date thereof, based upon the number of days the LC was outstanding and a year of 365
days.

LG Fees

The Borrower shall pay an LG fee on the date of issuance of any LG calculated on the face
amount of the LG issued and based on the number of days in the term thereof and a year of 365
days.

 

 

					
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BAs

The Borrower shall pay an acceptance fee in advance on the date of issue of each BA at the
applicable rate provided for in this agreement. Acceptance fees shall be calculated on the face
amount of the BA issued and based upon the number of days in the term thereof and a year of 365
days.

Libor Loans

The Borrower shall pay interest on each Libor Loan, on each Libor Interest Date, calculated in
arrears. Such interest will accrue daily on the basis of the actual number of days elapsed and a
year of 360 days.

Limit on Interest

The Borrower shall not be obligated to pay any interest, fees or costs under or in connection with
this agreement in excess of what is permitted by law.

Overdue Payments

Any amount that is not paid when due hereunder shall, unless interest is otherwise payable in
respect thereof in accordance with the terms of this agreement or the instrument or contract
governing same, bear interest until paid at the rate of RBP plus 5% per annum or, in the case of
an amount in US currency, RBUSBR plus 5% per annum.

Equivalent Yearly Rates

The annual rates of interest or fees to which the rates calculated in accordance with this
agreement are equivalent, are the rates so calculated multiplied by the actual number of days in
the calendar year in which such calculation is made and divided by 365 or, in the case of Libor
Loans, divided by 360.

Time and Place of Payment

Amounts payable by the Borrower hereunder shall be paid at the Branch of Account in the applicable
currency. Amounts due on a day other than a Business Day shall be deemed to be due on the Business
Day next following such day. Interest and fees payable under this agreement are payable both
before and after any or all of default, maturity date, demand and judgement.

EXCHANGE RATE FLUCTUATIONS

If, for any reason, the amount of Borrowings outstanding under any facility, when converted to the
Equivalent Amount in Canadian currency, exceeds the amount available under such facility, the
Borrower shall immediately repay such excess or shall secure such excess to the satisfaction of
the Bank.

INCREASED COSTS

The Borrower shall reimburse the Bank for any additional cost or reduction in income arising as a
result of (i) the imposition of, or increase in, taxes on payments due to the Bank hereunder
(other than taxes on the overall net income of the Bank), (ii) the imposition of, or increase in,
any reserve or other similar requirement, (iii) the imposition of, or change in, any other
condition affecting the Credit Facilities imposed by any applicable law or the interpretation
thereof.

EVIDENCE OF INDEBTEDNESS

The Bank shall open and maintain at the Branch of Account accounts and records evidencing the
Borrowings made available to the Borrower by the Bank under this agreement. The Bank

 

 

					
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shall record the principal amount of each Borrowing, the payment of principal and interest and all
other amounts becoming due to the Bank under this agreement.

The Bank’s accounts and records constitute, in the absence of manifest error, conclusive evidence
of the indebtedness of the Borrower to the Bank pursuant to this agreement.

The Borrower authorizes and directs the Bank to automatically debit, by mechanical, electronic or
manual means, any bank account of the Borrower for all amounts payable by the Borrower to the Bank
pursuant to this agreement.

GENERAL ACCOUNTS

The Borrower shall establish current accounts with the Bank in each of Canadian currency and US
currency (each a “General Account”) for the conduct of the Borrower’s day to day banking business.
If the balance in a General Account:

	(a)	 	is a credit, the Bank may apply, at any time in its discretion, the amount of such credit or
part thereof, rounded to the nearest dollar in Canadian currency or US currency, as
applicable, as a repayment of Borrowings outstanding by way of RBP Loans or RBUSBR Loans, as
applicable, under Facility (1), or
	 
	(b)	 	is a debit, the Bank may, subject to availability, make available a Borrowing by way of an
RBP Loan or RBUSBR Loans, as applicable, under Facility (1) in an amount, rounded to the
nearest dollar in Canadian currency or US currency, as applicable, as is required to place
the General Account at not less than a zero balance.

CONDITIONS PRECEDENT

The availability of any Borrowing is conditional upon the receipt of:

	(a)	 	a duly executed copy of this agreement;
	 
	(b)	 	the security provided for herein, in form and substance satisfactory to the Bank, registered
as required to perfect and maintain the security created thereby and such certificates,
authorizations, resolutions, priority agreements and legal opinions as the Bank may
reasonably require (including opinions as to corporate matters with respect to this agreement
and the Security to which the Borrower is a party, to be provided by the Borrower’s solicitor
and an opinion as to corporate matters, this agreement and the Security to which the
Guarantors are party, and including enforceability with respect to the guarantees to be given
by the Guarantors);
	 
	(c)	 	receipt by the Bank of copies of documents evidencing corporate existence and authority of
the Borrower and corporate authorizations, resolutions and other documents; and
	 
	(d)	 	such financial and other information or documents relating to the Borrower and the Guarantor
as the Bank may reasonably require.

 

 

					
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SECURITY

Security for the Borrowings and all other obligations of the Borrower to the Bank shall include:

	(a)	 	General security agreement signed by the Borrower constituting a first ranking security
interest in all personal property of the Borrower, including without limitation an assignment
and security interest in all intellectual property, including trademarks, owned by the
Borrower;
	 
	(b)	 	Movable hypothec in the amount of $30,000,000 made by the Borrower in favour of the Bank
constituting a hypothec on all of the personal property of the Borrower, including without
limitation an assignment and security interest in all intellectual property, including
trademarks, owned by the Borrower;
	 
	(c)	 	Guarantee and postponement of claim in the amount of $20,000,000 signed by Lululemon
Athletica USA, Inc.;
	 
	(d)	 	Guarantee and postponement of claim in the amount of $20,000,000 signed by Lululemon FC USA,
Inc.

REPRESENTATIONS AND WARRANTIES

The Borrower and each of the Guarantors represent and warrant to the Bank that:

	(a)	 	all representations and warranties are made as of the date of execution of this agreement
and shall surviving all Borrowings and each of the representations and warranties are deemed
to be repeated by each of them as at the time of each Borrowing hereunder;
	 
	(b)	 	the Borrower is a corporation duly incorporated, validly existing and in good standing under
the laws of the Province of British Columbia and duly registered or qualified to carry on
business in each of the Provinces of Ontario and Quebec;
	 
	(c)	 	the Guarantor, Lululemon Athletica USA, Inc. is a corporation duly incorporated, validly
existing and in good standing in the State of Nevada;
	 
	(d)	 	the Guarantor, Lululemon FC USA, Inc., is a corporation duly incorporated, validly existing
and in good standing in the State of Nevada;
	 
	(e)	 	the execution, delivery and performance by it of this agreement have been duly authorized by
all necessary actions and do not violate its constating documents or any Applicable Laws or
agreements to which the Borrower or either of the Guarantors is a party or by which any of
them are bound;
	 
	(f)	 	its most recent consolidated financial statements provided to the Bank fairly present the
financial position of the Borrower and each of the Guarantors as of the date thereof and its
results of operations and cash flows for the fiscal period covered thereby, and since the
date of such financial statements, there has occurred no material adverse change in the
resepctive business or financial conditions of the Borrower or either of the Guarantors;
	 
	(g)	 	there is no claim, action, prosecution or other proceeding of any kind pending or threatened
against the Borrower or either of the Guaratnors or any of the respective

 

 

					
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	 	 	assets or properties of each of them before any court or administrative agency which
relates to any non-compliance with any Environmental Law or any Release from its lands of a
Contaminant into the natural environment or which, if adversely determined, might have a
material adverse effect upon the financial condition or operations of the Borrower or
either of the Guarantors, or their ability to perform their respective obligations under
this agreement or any of the Bank’s security, and there are no circumstances of which any
of them are aware which might give rise to any such proceeding which have not been fully
disclosed to the Bank;
	 
	(h)	 	the Borrower and each of the Guarantors has good and marketable title to all of its
properties and assets, free and clear of any encumbrances, other than as may be provided for
herein;
	 
	(i)	 	the Borrower and each of the Guarantors is in compliance in all material respects with all
Applicable Laws including, without limitation, all Environmental Laws;
	 
	(j)	 	the Borrower and each of the Guarantors possesses all licenses, patents, trade marks,
service marks and copyrights, free from material restrictions, that are necessary for the
ownership, maintenance and operation of their respective assets and businesses and neither
the Borrower nor either of the Guaratnors is in violation of any rights of others with
respect to any of the foregoing;
	 
	(k)	 	the Borrower and each of the Guarantors has filed all material tax returns which were
required to be filed by it, paid or made provision for payment of all taxes and Potential
Prior-Ranking Claims (including interest and penalties) which are due and payable, and
provided adequate reserves for payment of any tax, the payment of which is being contested;
	 
	(l)	 	no event has occurred which constitutes, or which, with notice, lapse of time, or both,
would constitute, an Event of Default a breach of any covenant or other term or condition of
this agreement or any security agreement given in connection therewith.

REPORTING COVENANTS

The Borrower covenants and agrees with the Bank, while this agreement is in effect, to provide the
Bank with:

	(a)	 	quarterly unaudited combined financial statements with respect to the Borrower and the
Guarantors within 45 days of each fiscal quarter end. Combined statements to include a
listing of all adjusting entries performed during combination;
	 
	(b)	 	annual audited combined financial statements for the Borrower and the Guarantors within 120
days of each fiscal year end. The combined financial statements to include a listing of all
adjusting entries performed during the fiscal period;
	 
	(c)	 	annual business plan, including a forecast, income statement, balance sheet and cash flow
statement and capex plan, to be prepared on a monthly basis for the next following fiscal
year for the Borrower and the Guarantors on a combined basis within 60 days of each fiscal
year end; and
	 
	(d)	 	such other financial and operating statements and reports as and when the Bank may
reasonably require.

 

 

					
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GENERAL COVENANTS

The Borrower and each the Guarantors covenants and agrees with the Bank, while this agreement is in
effect:

	(a)	 	to pay all sums of money when due by it under this agreement;
	 
	(b)	 	to provide the Bank with prompt written notice of any event which constitutes, or which, with
notice, lapse of time, or both, would constitute an Event of Default; a breach of any covenant
or other term or condition of this agreement or any security agreement given in connection
therewith;
	 
	(c)	 	to give the Bank 30 days prior written notice of any intended Change in Control of the
Borrower or either of the Guarantors and not to consent to or facilitate a Change in Control
of the Borrower or either of the Guarantors without the prior written consent of the Bank;
	 
	(d)	 	to keep the assets of the Borrower and each of the Guarantors fully insured against such
perils and in such manner as would be customarily insured by companies carrying on a similar
business or owning similar assets;
	 
	(e)	 	if the Borrower owns any commercial buildings located in Metropolitan Vancouver, Lower
Fraser Valley, Metropolitan Victoria or Saanich Peninsula, then, in addition to (d) above,
the Borrower shall insure and keep fully insured such commercial buildings against risk of
earthquake;
	 
	(f)	 	to file all material tax returns which are to be filed by it from time to time, to pay or
make provision for payment of all taxes (including interest and penalties) and Potential
Prior-Ranking Claims when due, and to provide adequate reserves for the payment of any tax,
the payment of which is being contested;
	 
	(g)	 	to comply in all material respects with all Applicable Laws including, without limitation,
all Environmental Laws;
	 
	(h)	 	not to, without the prior written consent of the Bank, grant, create, assume or suffer to
exist any mortgage, charge, lien, pledge, security interest or other encumbrance affecting
any of the properties, assets or other rights of the Borrower or either of the Guarantors;
	 
	(i)	 	not to, without the prior written consent of the Bank, sell, transfer, convey, lease or
otherwise dispose of any of the properties or assets of the Borrower or either of the
Guarantors, other than in the ordinary course of business and on commercially reasonable
terms;
	 
	(j)	 	not to, without the prior written consent of the Bank, guarantee or otherwise provide for,
on a direct, indirect or contingent basis, the payment of any monies or performance of any
obligations by any other Person, except as may be provided for herein;
	 
	(k)	 	not to, without the prior written consent of the Bank, merge, amalgamate, or otherwise enter
into any other form of business combination with any other Person;

 

 

					
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	(l)	 	to provide the Bank with prompt written notice of any non-compliance by the Borrower
with any Environmental Laws or any Release from the land of the Borrower of a Contaminant
into the natural environment and to indemnify and save harmless the Bank from all liability
of loss as a result of an Environmental Activity or any non-compliance with any
Environmental Law;
	 
	(m)	 	to permit the Bank or its representatives, from time to time, to visit and inspect the
Borrower’s premises, properties and assets and examine and obtain copies of the Borrower’s
records or other information and discuss the Borrower’s affairs with the auditors, counsel
and other professional advisers of the Borrower.

Nothing contained in the foregoing Covenants sections shall limit any right of the Bank under this
agreement to terminate or demand payment of, or cancel or restrict availability of any unutilized
portion of, any demand or other discretionary facility made available under this agreement.

SUCCESSORS AND ASSIGNS

This agreement shall be binding upon and enure to the benefit of the parties and their respective
successors and permitted assigns.

The Bank may assign all or part of its rights and obligations under this agreement to any Person.
The rights and obligations of the Borrower under this agreement may not be assigned without the
prior written consent of the Bank.

The Bank may disclose to potential or actual assignees confidential information regarding the
Borrower (including, any such information provided by the Borrower to the Bank) and shall not be
liable for any such disclosure.

GENERAL

Expenses

The Borrower agrees to pay all fees (including legal fees), costs and expenses incurred by the
Bank in connection with the preparation, negotiation and documentation of this agreement and the
security provided for herein and the operation or enforcement of this agreement and the security
provided for herein.

Review

The Bank may conduct periodic reviews of the affairs of the Borrower, as and when determined by
the Bank, for the purpose of evaluating the financial condition of the Borrower. The Borrower
shall make available to the Bank such financial statements and other information and documentation
as the Bank may reasonably require and shall do all things reasonably necessary to facilitate such
review by the Bank.

Potential Prior-Ranking Claims

The Borrower hereby grants its consent (such grant to remain in force as long as this agreement is
in effect or any Borrowings are outstanding) to any Person having information relating to any
Potential Prior-Ranking Claim arising by any law, statute, regulation or otherwise and including,
without limitation, claims by or on behalf of government to release such information to the Bank
at any time upon its written request for the purpose of assisting the Bank to evaluate the
financial condition of the Borrower.

 

 

					
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Set off

The Bank is authorized, but not obligated, at any time, to apply any credit balance, whether or not
then due, to which the Borrower is entitled on any account in any currency at any branch or office
of the Bank in or towards satisfaction of the obligations of the Borrower due to the Bank under
this agreement. The Bank is authorized to use any such credit balance to buy such other currencies
as may be necessary to effect such application.

Non-Merger

The
provisions of this agreement shall not merge with any security
provided to the Bank, but  shall continue in full force for the benefit of the parties hereto.

Amendments and Waivers

No amendment or waiver of any provision of this agreement will be effective unless it is in
writing signed by the Borrower and the Bank. No failure or delay, on the part of the Bank, in
exercising any right or power hereunder or under any security document shall operate as a waiver
thereof.

Severability

If any provision of this agreement is or becomes prohibited or unenforceable in any jurisdiction,
such prohibition or unenforceability shall not invalidate or render unenforceable the provision
concerned in any other jurisdiction nor invalidate, affect or impair any of the remaining
provisions of this agreement.

Life Insurance Options

The Borrower acknowledges that Borrowings are not insured under the Bank’s Business Loan
Insurance Program.

Judgement Currency

If for the purpose of obtaining judgement in any court in any jurisdiction with respect to this
agreement, it is necessary to convert into the currency of such jurisdiction (the “Judgement
Currency”) any amount due hereunder in any currency other than the Judgement Currency, then
conversion shall be made at the rate of exchange prevailing on the Business Day before the day on
which judgement is given. For this purpose “rate of exchange” means the rate at which the Bank
would, on the relevant date, be prepared to sell a similar amount of such currency in the Toronto
foreign exchange market, against the Judgement Currency, in accordance with normal banking
procedures.

In the event that there is a change in the rate of exchange prevailing between the Business Day
before the day on which judgement is given and the date of payment of the amount due, the Borrower
will, on the date of payment, pay such additional amounts as may be necessary to ensure that the
amount paid on such date is the amount in the Judgement Currency which, when converted at the rate
of exchange prevailing on the date of payment, is the amount then due under this agreement in such
other currency together with interest at RBP and expenses (including legal fees on a solicitor and
client basis). Any additional amount due from the Borrower under this section will be due as a
separate debt and shall not be affected by judgement being obtained for any other sums due under
or in respect of this agreement.

Governing Law

This
agreement shall be construed in accordance with and governed by the laws of the Province
of British Columbia and of Canada applicable therein.

 

 

					
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Whole Agreement

This agreement, the security and any other written agreement delivered pursuant to or referred to
in this agreement constitute the whole and entire agreement between the parties in respect of the
Credit Facilities. There are no verbal agreements, undertakings or representations in connection
with the Credit Facilities.

Joint and Several

Where more than one Person is liable as Borrower or Guarantor for any obligation under this
agreement, then the liability of each such Person for such obligation is joint and several with
each other such Person.

Time

Time shall be of the essence in all provisions of this agreement.

Acceptance

This offer is open for acceptance until April 30, 2007 after which date it will be null and void,
unless extended in writing by the Bank.

Please confirm your acceptance of this agreement by signing the attached copy of this letter in
the space provided below and returning it to the undersigned.

Yours truly,

Royal Bank of Canada

 

 

					
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	We acknowledge and accept the foregoing terms and conditions
as of April 23rd, 2007.
	 

	 	 	 	 
	LULULEMON ATHLETICA, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ John Currie	 	 
	 

	 	 	 	 
	Name:

	 	John Currie	 	 
	Title:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	I/We have authority to bind the corporation.	 	 

	 	 	 	 	 	 	 	 	 	 	 
	We acknowledge and confirm our agreement
with the foregoing terms and conditions, as
Guarantor, as of
April 23rd, 2007.	 	 	 	We acknowledge and confirm our agreement
with the foregoing terms and conditions, as
Guarantor, as of
April 23rd, 2007.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	LULULEMON ATHLETICA USA, INC.	 	 	 	LULULEMON FC USA, INC.	 	 
	a Nevada corporation	 	 	 	a Nevada corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John Currie
	 	 	 	By:
	 	/s/ Dennis Wilson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	John Currie
	 	 	 	Name:
	 	Dennis Wilson	 	 
	Title:

	 	Chief Financial Officer
	 	 	 	Title:
	 	Director	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	I/We have authority to bind the corporation.	 	 	 	I/We have authority to bind the corporation.	 	 

 

 

Schedule “A” to the agreement dated April 11, 2007, between Lululemon Athletica, Inc., as
Borrower, and Royal Bank of Canada, as the Bank.

Definitions

For the purpose of this agreement, the following terms and phrases shall have the following
meanings:

“Applicable Laws” means, with respect to any Person, property, transaction or event, all present or
future applicable Laws, statutes, regulations, rules, orders, codes, treaties, conventions,
judgments, awards, determinations and decrees of any governmental, regulatory, fiscal or monetary
body or court of competent jurisdiction in any applicable jurisdiction;

“Bankers’ Acceptance” or “BA” means a bill of exchange, including a depository bill issued in
accordance with the Depository Bills and Notes Act (Canada), drawn on the Bank by, and payable to
the order of, the Borrower which have been accepted by the Bank;

“Branch of Account” means the branch of the Bank at which the Borrower’s accounts are maintained.
As at the date of this agreement, the “Branch of Account” is the Bank’s branch at 1025 West Georgia
Street, Vancouver, B.C., V6E 3N9;

“Business Day” means a day, excluding Saturday, Sunday and any other day which shall be a legal
holiday or a day on which banking institutions are closed in the province of the Branch of Account
and, when used in connection with a Libor Loan, means, in addition to the foregoing, a day on which
dealings in US currency deposits by and between leading banks in the London Interbank Market may be
concluded;

“Change in Control” means the acquisition by any Person, or group of Persons acting jointly or in
concert, of beneficial ownership of 50% plus one share or more of the issued and outstanding shares
of the capital stock of the Borrower or either of the Guarantors having the right to vote for the
election of directors of under ordinary circumstances;

“Contaminant” includes, without limitation, any pollutant, dangerous substance, liquid waste,
industrial waste, hazardous material, hazardous substance or contaminant including any of the
foregoing as defined in any Environmental Law;

“Environmental Activity” means any activity, event or circumstance in respect of a Contaminant,
including, without limitation, its storage, use, holding, collection, purchase, accumulation,
assessment, generation, manufacture, construction, processing, treatment, stabilization,
disposition, handling or transportation, or its Release into the natural environment, including
movement through or in the air, soil, surface water or groundwater;

“Environmental Laws” means all Applicable Laws relating to the environment or occupational health
and safety, or any Environmental Activity;

“Equivalent Amount” means, with respect to an amount of any currency, the amount of any other
currency required to purchase that amount of the first mentioned currency through the Bank in
Toronto, in accordance with normal banking procedures;

 

 

					
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“Eurocurrency” means US Dollars, Sterling, Deutsche Marks, Swiss Francs, Japanese Yen or any other
currency which is freely convertible on the London Interbank Market;

“GAAP” means, generally accepted accounting principles in effect from time to time in Canada
applied in a consistent manner from period to period;

“Guarantors” means Lululemon Athletica USA, Inc. and Lululemon FC USA, Inc., each of which is a
Nevada corporation, and “Guarantor” means either of them;

“Interest Determination Date” means, with respect to a Libor Loan, the date which is 2 Business
Days before the first day of the Libor Interest Period applicable to such Libor Loan;

“Letter of Credit” or “LC” means a documentary credit issued by the Bank on behalf of the Borrower
for the purpose of paying suppliers of goods;

“Letter of Guarantee” or “LG” means a documentary credit issued by the Bank on behalf of the
Borrower for the purpose of providing security to a third party that the Borrower or a person
designated by the Borrower will perform a contractual obligation owed to such third party;

“Libor” means, with respect to each Libor Interest Period applicable to a Libor Loan, the annual
rate of interest (rounded upwards, if necessary, to the nearest whole multiple of one sixteenth of
one percent (1/16th%)), at which the Bank, in accordance with its normal practice, would be
prepared to offer deposits to leading banks in the London Interbank Market for delivery on the
first day of each of such Libor Interest Period, for a period equal to each such Libor Interest
Period, such deposits being in US currency (or other agreed upon Eurocurrency specified herein) of
comparable amounts to be outstanding during such Libor Interest Period, at or about 10:00 a.m.
(Toronto time) on the Interest Determination Date;

“Libor Interest Date” means with respect to any Libor Loan, the last day of each Libor Interest
Period and, if the Borrower selects a Libor Interest Period for a period longer than 3 months, the
Libor Interest Date shall be the date falling every 3 months after the beginning of such Libor
Interest Period as well as the last day of such Libor Interest Period;

“Libor Interest Period” means, with respect to any Libor Loan, the initial period (subject to
availability) of approximately 1 month (or longer whole multiples of 1 month to and including 6
months as selected by the Borrower and notified to the Bank by written notice) or such shorter or
longer period as the Bank in its sole discretion shall make available commencing on the date on
which such Libor Loan is made or another method of Borrowing is converted to a Libor Loan, as the
case may be, and thereafter, while such Libor Loan is outstanding, each successive period (subject
to availability) of 1 month (or longer whole multiples of 1 month to and including 6 months, as
selected by the Borrower and notified to the Bank by written notice) commencing on the last day of
the immediately preceding Libor Interest Period;

“Person” includes an individual, a partnership, a joint venture, a trust, an unincorporated
organization, a company, a corporation, an association, a government or any department or agency
thereof, and any other incorporated or unincorporated entity;

“Potential Prior-Ranking Claims” means all amounts owing or required to be paid, where the failure
to pay any such amount could give rise to a claim pursuant to any law, statute, regulation or
otherwise, which ranks or is capable of ranking in priority to the Bank’s security or otherwise in
priority to any claim by the Bank for repayment of any amounts owing under this agreement;

 

 

					
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“RBP” and “Royal Bank Prime” each means the annual rate of interest announced by the Bank from time
to time as being a reference rate then in effect for determining interest rates on commercial loans
made in Canadian currency in Canada;

“RBUSBR” and “Royal Bank US Base Rate” each means the annual rate of interest announced by the Bank
from time to time as a reference rate then in effect for determining interest rates on commercial
loans made in US currency in Canada;

“Release” includes discharge, spray, inject, inoculate, abandon, deposit, spill, leak, seep, pour,
emit, empty, throw, dump, place and exhaust, and when used as a noun has a similar meaning;

“Royal Bank Prime Acceptance Fee” or “RBPAF” means the annual rate announced by the Bank from time
to time as a reference rate then in effect for determining fees on BAs;

“US” means United States of America.

 

 

Schedule “B” to the agreement dated April 11, 2007, between Lululemon Athletica, Inc., as
Borrower, and Royal Bank of Canada, as the Bank.

Notice Requirements

Notice Requirements for other than Libor Loans:

	 	 	 
	Amount	 	Prior Notice
	Under $10,000,000, Canadian or US currency

	 	By 10:00 a.m. on the day of Borrowing
	 
	 	 
	$10,000,000 up to but not including
$20,000,000, Canadian 

or US currency

	 	By 10:00 a.m. 1 Business Day prior to
the day of Borrowing

Notice Requirements for Libor Loans:

	 	 	 
	Amount	 	Prior Notice
	Under $10,000,000 in US currency or
any Equivalent Amount in Eurocurrency
and up to 1 year rollovers

	 	by 10:00 a.m. on the Interest Determination Date
	 
	 	 
	$10,000,000 up to $20,000,000 in US
currency or any Equivalent Amount in
Eurocurrency and up to 1 year
rollovers

	 	by 10:00 a.m. 1 Business Day prior to the
Interest Determination Date

 

 

Schedule “C” to the agreement dated April 11, 2007, between Lululemon Athletica, Inc., as Borrower,
and Royal Bank of Canada, as the Bank.

Borrowing Conditions

Borrowings made otherwise than by way of RBP Loans or RBUSBR Loans will be subject to the following
terms and conditions:

    BAs:

	 	(a)	 	BAs shall be issued and mature on a Business Day and shall be issued in
minimum face amounts of $500,000 or such larger amount as is a whole multiple of
$100,000 for terms of not less than 30 and not more than 180 days;
	 
	 	(b)	 	the Bank may, in its sole discretion, refuse to accept the Borrower’s drafts or
limit the amount of any BA issue at any time;
	 
	 	(c)	 	notwithstanding any other provision of this agreement, the Borrower shall
indemnify the Bank against any loss, cost or expense incurred by the Bank if any BA is
repaid, prepaid, converted or cancelled other than on the maturity date of such BA;
	 
	 	(d)	 	any BA issued under a term facility must have a maturity on or before the
maturity date of the term facility, unless otherwise agreed by the Bank; and
	 
	 	(e)	 	prior to the issue of any BA the Borrower shall execute the Bank’s standard
form of undertaking and agreement in respect of BAs. If there is any inconsistency at
any time between the terms of this agreement and the terms of the Bank’s standard form
of undertaking and agreement, the terms of this agreement shall govern.

    LCs or LGs:

	 	(a)	 	each LC and LG shall expire on a Business Day and shall have a term of not
more than 365 days;
	 
	 	(b)	 	at least 2 Business Days prior to the issue of an LC or LG, the Borrower shall
execute a duly authorized application with respect to such LC or LG and each LC and LG
shall be governed by the terms and conditions of the relevant application for such
contract;
	 
	 	(c)	 	an LC or LG may not be revoked prior to its expiry date unless the consent of
the beneficiary of the LC or LG has been obtained; and
	 
	 	(d)	 	if there is any inconsistency at any time between the terms of this agreement
and the terms of the application for LC or LG, the terms of the application for LC or
LG shall govern.

    Libor Loans:

	 	(a)	 	Libor Loans shall be issued and mature on a Business Day and shall be made in
minimum amounts of $1,000,000 in US currency or the Equivalent Amount in Eurocurrency
as selected by the Borrower and approved by the Bank for terms of not less than 30
days and not more than 360 days;
	 
	 	(b)	 	if the Borrower fails to select and to notify the Bank of the Libor Interest
Period applicable to any Libor Loan, the Borrower shall be deemed to have selected a 3
month Libor Interest Period;

 

 

					
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	 	(c)	 	if the Bank so requests the Borrower shall enter into a Hedge Contract to hedge the
principal and interest of each Libor Loan against the risk of currency and exchange rate
fluctuations. “Hedge Contract” means any rate swap, rate cap, rate floor, rate collar,
currency exchange transaction, forward rate agreement or other exchange, hedging or rate
protection transaction, or any combination of such transactions or agreements or any option
with respect to any such transaction now existing or hereafter entered into between the
Borrower and the Bank;
	 
	 	(d)	 	the Borrower shall indemnify and hold the Bank harmless against any loss, cost or expense
(including without limitation, any loss incurred by the Bank in liquidating or redeploying
deposits acquired to fund or maintain any Libor Loan) incurred by the Bank as a result of:

	 	(i)	 	repayments, prepayments, conversions, rollovers or cancellations of a Libor
Loan other than on the last day of the Libor Interest Period applicable to such Libor
Loan, or
	 
	 	(ii)	 	failure to draw down a Libor Loan on the first day of the Libor Interest
Period selected by the Borrower; and

	 	(e)	 	if the Bank determines, which determination is final, conclusive and binding upon
the Borrower, that:

	 	(i)	 	adequate and fair means do not exist for ascertaining the rate of interest
on a Libor Loan,
	 
	 	(ii)	 	the making or the continuance of a Libor Loan has become impracticable by
reason of circumstances which materially and adversely affect the London Interbank
Market,
	 
	 	(iii)	 	deposits in US currency (or other Eurocurrency selected) are not available
to the Bank in the London Interbank Market in sufficient amounts in the ordinary
course of business for the applicable Libor Interest Period to make or maintain a
Libor Loan during such Libor Interest Period, or
	 
	 	(iv)	 	the cost to the Bank of making or maintaining a Libor Loan does not
accurately reflect the effective cost to the Bank thereof or the costs to the Bank
are increased or the income receivable by the Bank is reduced in respect of a Libor
Loan,

then the Bank shall promptly notify the Borrower of such determination and the Borrower shall,
prior to the next Interest Determination Date, notify the Bank as to the basis of Borrowing it has
selected in substitution for such Libor Loan. If the Borrower does not so notify the Bank, such
Libor Loan will automatically be converted into an RBUSBR Loan on the expiry of the then current
Libor Interest Period.

 

 

Schedule “D” to the agreement dated April 11, 2007, between Lululemon Athletica, Inc., as Borrower,
and Royal Bank of Canada, as the Bank.

FEF Contracts Schedule

FEF Contract Definitions

“Foreign Exchange Forward Contract” or “FEF Contract” means a currency exchange transaction or
agreement or any option with respect to any such transaction now existing or hereafter entered into
between the Borrower and the Bank;

Conditions Applicable to FEF Contracts

At the Borrower’s request, the Bank may agree to enter into FEF Contracts with the Borrower from
time to time. The Borrower acknowledges that the Bank makes no formal commitment herein to enter
into any FEF Contract and the Bank may, at any time and at all times, in its sole and absolute
discretion, accept or reject any request by the Borrower to enter into a FEF Contract. If the Bank
does enter into a FEF Contract with the Borrower, it will do so subject to the following:

	 	(a)	 	the Borrower shall promptly issue or countersign and return a confirmation or
acknowledgement of the terms of each such FEF Contract as required by the Bank;
	 
	 	(b)	 	the Borrower shall, if required by the Bank, promptly enter into a Foreign
Exchange and Options Master Agreement or such other agreement in form and substance
satisfactory to the Bank to govern the FEF Contract(s);
	 
	 	(c)	 	in the event of demand for payment under the agreement of which this schedule
forms a part, the Bank may terminate all or any FEF Contracts. If the agreement
governing any FEF Contract does not contain provisions governing termination, any such
termination shall be effected in accordance with customary market practice. The Bank’s
determination of amounts owing under any terminated FEF Contract shall be conclusive
in the absence of manifest error. The Bank shall apply any amount owing by the Bank to
the Borrower on termination of any FEF Contract against the Borrower’s obligations to
the Bank under the agreement and any amount owing to the Bank by the Borrower on such
termination shall be added to the Borrower’s obligations to the Bank under the
agreement and secured by the Bank’s security;
	 
	 	(d)	 	the Borrower shall pay all required fees in connection with any FEF Contracts
and indemnify and hold the Bank harmless against any loss, cost or expense incurred by
the Bank in relation to any FEF Contract;
	 
	 	(e)	 	any rights of the Bank herein in respect of any FEF Contract are in addition
to and not in limitation of or substitution for any rights of the Bank under any
agreement governing such FEF Contract. In the event that there is any inconsistency at
any time between the terms hereof and any agreement governing such FEF Contract, the
terms of such agreement shall prevail; and
	 
	 	(f)	 	in addition to any security which may be held at any time in respect of any
FEF Contract, upon request by the Bank from time to time, the Borrower will deliver to
the Bank such security as is acceptable to the Bank as continuing collateral security
for the Borrower’s obligations to the Bank in respect of FEF Contracts.

 

 

					
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FEF Contracts and Treasury Transactions Schedule

Definitions

“Foreign Exchange Future Contract” or “FEF Contract” means a currency exchange transaction or
agreement or any option with respect to any such transaction now existing or hereafter entered into
between the Borrower and the Bank.

“Treasury Transaction” means any interest rate swap transaction or commodity derivative, or any
derivative or option with respect thereto, or any combination or any of the foregoing, or any other
transaction related to financial risk now existing or hereafter developed.

Conditions Applicable to FEF Contracts or Treasury Transactions

At the Borrower’s request, the Bank may agree to enter into FEF Contracts and Treasury
Transactions with the Borrower from time to time. The Borrower acknowledges that the Bank makes no
formal commitment herein to enter into any FEF Contract and Treasury Transactions and the Bank
may, at any time and at all times, in its sole and absolute discretion, accept or reject any
request by the Borrower to enter into a FEF Contract or Treasury Transaction. If the Bank does
enter into a FEF Contract or Treasury Transaction with the Borrower, it will do so subject to the
following:

	 	(a)	 	the Borrower shall promptly issue or countersign and return a confirmation or
acknowledgement of the terms of each such FEF Contract or Treasury Transaction as
required by the Bank;
	 
	 	(b)	 	the Borrower shall promptly enter into a foreign exchange netting and close
out agreement or such other agreement in form and substance satisfactory to the Bank
to govern the FEF Contract(s);

the Borrower shall promptly enter into a master agreement or other agreement in form and
substance satisfactory to the Bank including, without limitation, any agreement used by the
International Swap Dealers Association, Inc. or any foreign exchange netting and close out
agreement;

	 	(a)	 	in the event of demand for payment under the agreement of which this schedule
forms a part, the Bank may terminate all or any FEF Contracts and all or any Treasury
Transactions. If the agreement governing any FEF Contract or Treasury Transaction does
not contain provisions governing termination, any such termination shall be effected
in accordance with customary market practice. The Bank’s determination of amounts
owing under any terminated FEF Contract or Treasury Transaction shall be conclusive in
the absence of manifest error. The Bank shall apply any amount owing by the Bank to
the Borrower on termination of any FEF Contract or Treasury Transaction against the
Borrower’s obligations to the Bank under the agreement and any amount owing to the
Bank by the Borrower on such termination shall be added to the Borrower’s obligations
to the Bank under the agreement and secured by the Bank’s security;
	 
	 	(b)	 	the Borrower shall pay all required fees in connection with any FEF Contracts
or Treasury Transactions and indemnify and hold the Bank harmless against any loss,
cost or expense incurred by the Bank in relation to any FEF Contract or Treasury
Transactions;
	 
	 	(c)	 	any rights of the Bank herein in respect of any FEF Contract or Treasury
Transactions are in addition to and not in limitation of or substitution for any
rights of the Bank under any agreement governing such FEF Contract or Treasury
Transaction. In the event that there is any inconsistency at any time between the

 

 

					
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	 	 	 	terms hereof and any agreement governing such FEF Contract, or Treasury Transaction
the terms of such agreement shall prevail; and

in addition to any security which may be held at any time in respect of any FEF Contract or
Treasury Transaction, upon request by the Bank from time to time, the Borrower will deliver to the
Bank such security as is acceptable to the Bank as continuing collateral security for the
Borrower’s obligations to the Bank in respect of FEF Contracts or Treasury Transactions.Exhibit 10.17

 

Exhibit 10.17

GENERAL LEASE — SINGLE TENANT

THIS LEASE is dated for reference the 25th day of January, 2006.

BETWEEN:

2285 CLARK INVESTMENTS LTD, a company incorporated under the laws
of the Province of British Columbia, and having a place of business at 1-2285
Clark Drive, Vancouver, British Columbia, V5N 3G9

(hereinafter called the “Landlord”)

OF THE FIRST PART

			
	AND:	 	LULULEMON ATHLETICA INC., a company incorporated under the laws
of the Province of British Columbia, and have a place of business at 1945
McLean Drive, Vancouver, B.C. V5N 3J7

	 
	 	 	(hereinafter called the “Tenant”)

OF THE SECOND PART

WHEREAS:

          A. The Landlord is the registered owner of lands in the City of Vancouver legally described
as: Lots 3-8, Block 94, District Lot 264A, Plan 442 1771, Ex. Plan 4094, N.W.L.D. (herein called
the “Lands”);

          B. There is a building on the Lands (herein called the “Building”);

          C. The Tenant has offered to lease from the Landlord the Building and the Lands civically
described as 2285 Clark Drive, Vancouver, British Columbia (herein together called the “Leased
Premises”).

          WITNESSETH that in consideration of the rents, covenants and agreements hereinafter reserved
and contained on the part of the Tenant, to be paid, observed and performed, the Landlord has
demised and leased and by these presents does demise and lease unto the Tenant the Leased Premises
on the terms, conditions and covenants as hereinafter set forth.

ARTICLE 1

DEFINITIONS

          1.1. Operating Costs

          “Operating Costs” shall mean without duplication or profit and subject to the exclusions
herein mentioned, the total of all actual costs, charges and expenses related to the Leased
Premises including, without limiting the generality of the foregoing:

 

 

               (a) gas, oil, power, electricity, water, sewer, communications, cleaning, janitorial and all
other utilities and services:

               (b) servicing, repairing, maintaining or replacing sewers and drains, lighting, heating,
ventilating, air conditioning and all other fixtures and equipment servicing the Leased Premises;

               (c) snow and garbage removal, servicing, maintaining, operating, improving, altering,
repairing, replacing in lieu of repairing, supervising and policing wages (including statutory or
usual fringe benefits) and fees to independent contractors relating thereto;

               (d) servicing and maintaining the Leased Premises including the costs of the Landlord in
performing the services and maintenance set out in this Article that are not the responsibility of
the Landlord including depreciation in accordance with generally accepted accounting principles on
items subject to periodic replacement;

               (e) periodic painting of the Building, parking lot lines and lamp standards;

               (f) all costs and charges to or by the Landlord for servicing and maintaining directory signs;

               (g) the property management fee being $950.00 per month

               (h) the premiums on all insurance policies placed by the Landlord;

               (i) all other actual costs, expenses and charges incurred by the Landlord with respect to
operating the Building from time to time;

               (j) the cost of all improvements intended primarily to reduce operating costs, equal to, but
not exceeding in any year, the reduction in such year, which cost shall be amortized by the
Landlord over a period in accordance with generally accepted accounting principles.

Notwithstanding anything contained herein the operating costs outlined in Article 1.1 shall not
include or there shall be deducted from, as the case may be:

               (k) any insurance proceeds or judgments or settlements made in relation thereto received by
the Landlord with respect to the Leased Premises;

               (l) legal costs or collection costs that do not involve the Tenant;

               (m) interest on debt or capital retirement of debt;

               (n) any taxes personal to the Landlord;

               (o) salaries or fringe benefits to officers and directors of the Landlord.

-2-

 

ARTICLE 2

TERM

          2.1. Term

          The Tenant to have and to hold the Leased Premises for and during the term of Three (3) years,
commencing on the 1st day of February, 2006 (herein called the “Commencement Date”) and
expiring on the 31st day of January, 2009 (herein called the “Term”) unless sooner terminated
pursuant to any provision hereof.

          2.2. Delay in Occupancy

          If the Leased Premises are not available for occupancy by the Tenant on the Commencement Date
of the Term, this Lease shall remain in full force and effect and subject to the terms and
conditions herein contained, and the Tenant shall take possession of the Leased Premises on the
Occupancy Date (as herein defined).

          2.3. Occupancy Date

          The Occupancy Date shall be the earlier of:

               (a) the first business day after the day upon which the Landlord has notified the Tenant in
writing that the Leased Premises (except for the performing of Landlord’s work, if any, which has
been delayed, hindered or prevented by the Tenant or by non-completion of the Tenant’s work) are
ready for occupancy by the Tenant and the Landlord’s determination that the Leased Premises are
ready for occupancy shall be final and binding upon the Tenant; or

               (b) the date upon which the Tenant commences business on the Leased Premises; or

               (c) the date upon which the Tenant receives keys to the Leased Premises.

          2.4. Liability of the Landlord

          The Landlord shall not be liable for any loss, injury, damage or inconvenience which the
Tenant may sustain by reason of the inability of the Landlord for any reason to deliver the Leased
Premises ready for occupancy on the Commencement Date.

          2.5. Entry Prior to Commencement Date

          In the event that the Tenant is allowed entry into the Leased Premises prior to the
Commencement Date, the Tenant agrees to be bound by the terms and conditions of this Lease, but
only shall be liable for additional rent and not minimum rent apportioned on a per diem basis from
such earlier occupancy date to the Commencement Date.

-3-

 

ARTICLE 3

RENT

          3.1. Rent

          Yielding and paying therefore unto the Landlord and its successors and assigns, without prior
demand during the Term in lawful money of Canada the following:

               (a) the annual rent of:

                    (i) Three Hundred and Seventy Two Thousand Dollars ($372,000.00) plus GST payable without
deduction, set-off or abatement except as expressly provided in this Lease by equal consecutive
monthly installments of Thirty One Thousand Dollars ($31,000.00) plus GST payable in advance on the
first day of each month during the first year of the Term, commencing on the first day of February,
2006, to and including the first day of January, 2007; and

                    (ii) Three Hundred and Eighty Four Thousand Dollars ($384,000.00) plus GST payable without
deduction, set-off or abatement except as expressly provided in this Lease by equal consecutive
monthly installments of Thirty Two Thousand Dollars ($32,000.00) plus GST payable in advance on the
first day of each month during the second year of the Term commencing on the first day of February,
2007 to and including the first day of January, 2008; and

                    (iii) Three Hundred and Ninety Six Thousand Dollars ($396,000.00) plus GST payable without
deduction, set-off or abatement except as expressly provided in this Lease by equal consecutive
monthly installments of Thirty Three Thousand Dollars ($33,000.00) plus GST payable in advance on
the first day of each month during the last year of the Term commencing on the first day of
February, 2008 to and including the first day of January, 2009; and

               (b) all such other amounts as shall become due and payable hereunder by the Tenant to the
Landlord (herein called “additional rent”) and all rights that the Landlord has in respect of rent,
the Landlord shall also have in respect of additional rent, whether or not such amounts be
specifically designated elsewhere in this Lease as “additional rent”.

          3.2. Interest on Overdue Rent

          Each and every payment of rent or additional rent payable under the provisions of this Lease
by the Tenant to the Landlord or the payment of any costs or expenses incurred by the Landlord in
enforcing the provisions of this Lease shall be due and payable as provided for under the terms of
this Lease and if not paid when due shall bear interest at the rate of five percent (5%) per annum
above the prime commercial lending rate of the Landlord’s designated bank from time to time in the
City of Vancouver from the date when same shall become payable under the terms of this Lease until
the same shall be paid, and such interest shall accrue and be payable without the necessity of any
demand therefore being made. Notwithstanding the provisions of this paragraph, nor the payment nor
acceptance of interest payable hereunder, the Landlord shall not hereby be deemed to have waived
any default or breach by the Tenant of the terms of this

-4-

 

Lease that may have occurred and the Landlord may exercise its rights hereunder arising from
such default or breach and concurrently recover the interest as herein provided.

          3.3. Deposit

          The Tenant hereby pays a deposit to the Landlord in the amount of $64,000.00 plus GST tax.
The deposit is to be firstly applied towards the first month’s rent due hereunder, and secondly,
the balance of the deposit is to be retained by the Landlord without interest to the Tenant, as a
security deposit, to be returned to the Tenant upon, the expiry of the Term or any renewal thereof,
or to be applied, at any time during the Term or thereafter, by the Landlord to rectifying any
damage to the Leased Premises caused by the Tenant, and if the security deposit is so used by the
Landlord during the Term, the Tenant covenants to replace the security deposit with the Landlord
promptly upon demand.

ARTICLE 4

USE OF LEASED PREMISES

          4.1. Use of Leased Premises

          The Tenant covenants to use and occupy the Leased Premises for the sole purpose of the design
and production of wearing apparel and ancillary office uses. The Tenant shall not use or permit or
suffer the use of the Leased Premises for any other purpose without the prior written consent of
the Landlord. The Tenant acknowledges that it is solely the Tenant’s responsibility to obtain all
necessary business and occupation licences and permits and the Landlord makes no warranty as to
bylaw or zoning compliance of the Leased Premises for the Tenant’s business all of which much be
determined by the Tenant.

ARTICLE 5

TENANTS COVENANTS

          The Tenant covenants with the Landlord as follows:

          5.1. Rent

          To pay when due, rent and additional rent.

          5.2. Business Tax

          To pay when due, all taxes, business taxes, permit fees, business license fees, rates, and
other charges, fees or costs payable, levied or assessed in respect of the use and occupancy of the
Leased Premises by the Tenant, the business or businesses carried on therein, or the improvements,
equipment, machinery or fixtures therein and to promptly furnish receipts evidencing such payment
upon the written request of the Landlord.

          5.3. Municipal and Property Tax 

     To pay on demand:

-5-

 

               (a) all taxes, rates and duties and assessments including school and local improvement taxes
payable by the Landlord in respect of the Building; and

               (b) all taxes, rates and duties and assessments in respect to the Lands, all of such taxes,
rates, duties and assessments described in this Article 5.3 hereinafter referred to as the “Taxes”.
Taxes shall only be payable for the period of the Term and shall be pro-rated for periods of less
than a calendar year falling within the Term.

          5.4. Tax Appeal

          The Tenant may, after first having given the Landlord written notice of its intention to do
so, appeal, at its expense, any assessment of Taxes or the amount thereof relating to the Leased
Premises. If the Landlord appeals any assessment of Taxes, provided the Tenant has not already
elected to do so, the Tenant will pay the Landlord the Landlord’s costs and expenses incurred in
making such appeal and if, in case of appeal, the Taxes are reduced, the Tenant will be repaid any
over payment of Taxes upon receipt of same from the taxing authority.

          5.5. Utility Charges

          To pay all charges for services and utilities including electricity, gas, air-conditioning,
heating, fuel, water, sewer and telephone, delivered or provided to or made available upon the
Leased Premises, and other costs which are metered, charged, levied or rated directly to the Tenant
in respect of the Leased Premises, and if, at any time, during the Term or any renewal or extension
thereof, the Landlord is required to pay any or all of the foregoing, then a sum equal to the
amount so paid shall forthwith become due and be collectible upon demand and the Landlord shall
have the same rights and remedies with respect to said sum as if the same were rent reserved
hereunder.

          5.6. Lighting Replacement and Maintenance

          From and after the Commencement Date to pay the total cost of replacement of any burned out
electric light bulbs, tubes and ballasts and the total cost of cleaning fixtures, tubes and
plastics in the Leased Premises.

          5.7. Recharge of Insurance Premiums

          To pay on demand during the Term, the premiums payable or paid by the Landlord in respect of
the insurance coverage referred to in Article 6.3 hereof, and, if only a part of a premium year is
included in the Term, to pay such insurance premiums as apportioned on a per diem basis.

          5.8. Voiding Insurance

          Not to do or omit or permit to be done upon the Leased Premises anything which shall cause the
rate of insurance premiums upon the Leased Premises, to be increased and if the insurance premium
increases as aforesaid, the Tenant shall pay to the Landlord ‘forthwith upon demand the amount by
which the Landlord’s insurance premiums so increased. If notice of cancellation is given
respecting any insurance policy upon the Leased Premises, or should any

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insurance company refuse to renew any insurance policy on the Leased Premises by reason of the
Tenant’s use or occupation of the Leased Premises, the Tenant shall forthwith remedy or rectify
such use or occupation upon being requested to do so in writing by the Landlord, and if the Tenant
shall fail to do so forthwith, the Landlord may at its option terminate this Lease immediately by
notice in writing of its intention so to do, and thereupon rent and any other payments ‘for which
the Tenant is liable under this Lease shall be apportioned upon a per diem basis and paid in full
to the date of such termination of the Lease, and the Tenant shall deliver up vacant possession of
the Leased Premises to the Landlord within twenty (20) days of receipt of such notice and the
Landlord may re-enter and take possession of them.

          5.9. Estimated Operating Costs and Property Taxes

          To permit the Landlord to estimate the Operating Costs and Taxes payable by the Tenant during
each year or portion thereof from time to time and to pay such estimated Operating Costs and Taxes
to the Landlord forthwith after receipt from the Landlord of such estimates, with any overpayment
to be rebated by the Landlord within thirty (30) days or any deficiency to be paid by the Tenant
within thirty (30) days of when the actual amount of such Operating Costs or Taxes are known and,
if only a part of a calendar year is included in the Term, to pay such Operating Costs and Taxes as
apportioned upon a per diem rate.

          5.10. Intent of Lease

          To pay all costs such that the Lease of the Leased Premises shall be a completely carefree net
lease for the Landlord except as shall be otherwise provided in the specific provisions contained
in this Lease, and that the Landlord shall not be responsible during the Term for any costs,
charges, expenses and outlays of any nature whatsoever arising from or relating to the Leased
Premises, and the Tenant, except as otherwise provided in the specific provisions contained in this
Lease, shall pay all charges, impositions and costs of every nature and kind relating to the Leased
Premises whether or not referred to herein and whether or not within the contemplation of the
Landlord or the Tenant, and without restricting the generality of the foregoing, the Tenant shall
pay all taxes, insurance payments and other costs, expenses and charges relating to the operation
of the Leased Premises including costs incurred by the Landlord pursuant to Articles 6.2 and 6.3
but not including the payment of any interest or principal required to be paid by the Landlord
under any mortgage relating to the Leased Premises and not to include any income taxes that are
payable by the Landlord.

          5.11. State of Repair

          Subject to Article 9, to promptly repair and maintain the Leased Premises in good condition
including, without limitation, the roof, the roof membrane and the structural elements (not
including structural replacement or repairs required due to inherent structural defects) of the
Building, the exterior, interior and floors of the Building, all wiring, sprinkler systems, fences,
paved areas and landscaped areas, all water, sewer and gas connections, pipes and mains, and all
other fixtures, machinery, facilities, equipment and appurtenances comprising the Leased Premises
or any part thereof, except for reasonable wear and tear and damage caused by a negligent or
deliberate act of the Landlord, its servants or agents and except the replacement of the roof
structure described in Article 6.2. The Tenant shall also maintain the roof, including

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regular inspections by knowledgeable people and preventative maintenance and repair, and keep
the roof and drains of the Building free and clear of snow and ice or other materials which might
impair or damage the roof or any other portion of the Building. The Tenant shall permit the
Landlord to enter and view the state of repair, to repair according to notice in writing given to
the Tenant by the Landlord and, except as aforesaid, to leave the Leased Premises is such state of
repair in which the Tenant is required to maintain the Leased Premises hereunder.

          5.12. Failure to Repair

          To repair in accordance with the provisions hereof; but if the Tenant should fail to repair in
accordance with the provisions hereof, or if there is a need for emergency repairs, to permit the
Landlord, its agents or employees, to enter the Leased Premises and make the required repairs and
for that purpose the Landlord may bring or leave upon the Leased Premises all necessary tools,
materials and equipment and the Landlord will not be liable to the Tenant for any inconvenience,
annoyance of loss or business or any injuries or damages suffered by the Tenant by reason of the
Landlord effecting or attempting to effect such repairs unless caused by the negligence of the
Landlord, its agents or employees, and the expense of such repairs shall be borne by the Tenant who
shall pay it to the Landlord forthwith upon demand, and if not so paid, shall be deemed to be
additional rent in arrears hereunder, provided that nothing herein shall require the Landlord to
effect or attempt to effect such repairs.

          5.13. Rules and Regulations

          To observe and be bound by, and cause its employees, licensees and invitees to observe, the
rules and regulations included as Article 23 in this Lease.

          5.14. Observance of Law

          To conduct its business in the Leased Premises and use the Leased Premises in such a manner as
to comply with any and all Statutes, Bylaws, Rules and Regulations of any Federal, Provincial,
Municipal or other competent authority for the time being in force relating to such business or the
use by the Tenant of the Leased Premises.

          5.15. Waste and Nuisance

          Not to do or suffer any waste or damage, disfiguration or injury to the Leased Premises or the
fixtures and equipment thereof or permit or suffer any overloading of the floors thereof, and not
to place therein any safe, heavy business machine or other heavy thing, without first obtaining the
consent in writing of the Landlord; and not to use or permit to be used any part of the Leased
Premises for any use which in the Landlord’s reasonable opinion, is dangerous, noxious or offensive
trade or business and not to cause or permit any nuisance on the Leased Premises.

          5.16. Entry by Landlord

          To permit the Landlord, its servants or agents to enter the Leased Premises at any time and
from time to time for the purpose of inspecting and of making repairs, alterations or improvements
to the Leased Premises, or for the purpose of showing the Leased Premises to

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prospective purchasers, mortgagees or other encumbrancers or tenants and the Tenant shall not
be entitled to compensation for any inconvenience, nuisance, loss of profits or business or
discomfort occasioned thereby. The Landlord, its servants or agents, may, at any time, enter upon
the Leased Premises to remove any article or remedy any condition which, in the opinion of the
Landlord acting reasonably would be likely to lead to cancellation of any policy of insurance upon
the Leased Premises or any part thereof, and such entry by the Landlord shall not be deemed to be
re-entry provided always that the Landlord shall, if making such repairs, alterations or
improvements, proceed expeditiously.

          5.17. Showing Leased Premises

          To permit the Landlord or its agents to show the Leased Premises to prospective tenants
between the hours of 9:00 a.m. and 5:00 p.m. of the last six (6) months of the Term, and to permit
the Landlord to place the usual type of notices to the effect that the Leased Premises are for
rent, which notices shall not be removed or obstructed by the Tenant.

          5.18. Indemnity

          Except as otherwise specifically provided herein, to indemnify and save harmless the Landlord
from and against any and all liability, loss, claims, demands, damages or expenses, including legal
expense (on a solicitor and own client basis), arising out of injury to any’ person (including
injury resulting in death), damage to, loss of or theft of any property of any person occurring
within, on or about the Leased Premises; and to indemnify and save harmless the Landlord. ‘from and
against any and all liability, loss, claims, demands, damages or expenses caused by or arising out
of the breach, default or default or non-observance by the Tenant of any provision of this Lease.
This provision shall survive and remain in full force and effect after the expiration or sooner
termination of this Lease.

          5.19. Alterations

          Not to make or erect in the Leased Premises any installations, alterations, additions or
partitions without submitting drawings and specifications to the Landlord and obtaining the
Landlord’s prior written consent in each instance, and further to obtain the Landlord’s prior
written consent to any change in such drawings and specifications submitted as aforesaid subject to
payment of the actual reasonable cost to the Landlord of having its architect approve such changes,
before proceeding with any work based on such drawings or specifications; such work may be
performed by contractors engaged by the Tenant and approved by the Landlord, but in each case only
under written contract approved in writing by the Landlord and subject to all reasonable and
appropriate conditions which the Landlord may impose.

          5.20. Interior Finishes

          To install in the Leased Premises only such window shades, drapes or floor coverings, and to apply
only such wall coverings and paints, as are first approved in writing by the Landlord, such consent
not to be unreasonably withheld, and to install or apply the same by competent workmen.

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          5.21.
Glass

          To restore or replace forthwith at its expense, any broken or damages glass on the Leased
Premises that occurs after occupancy of the Leased Premises by the Tenant.

          5.22. Signs.

          Not to paint, display, inscribe, place or affix any sign, picture, advertisement, notice,
lettering or direction on any part of the exterior of the Building or which is visible from the
outside thereof, without the prior written consent of the Landlord, such consent not to be
unreasonably withheld.

          5.23. Keep Tidy

          On each day to leave the Leased Premises in a reasonably tidy condition and to keep the Leased
Premises free of rubbish and debris at all times and to provide proper receptacles for waste and
rubbish.

          5.24. Certificates

          At any time upon not less than five (5) days prior written notice, to execute and deliver to
the Landlord a statement in writing certifying that the Lease is unmodified (or, if modified,
stating the modifications), that it is in full force and effect, the amount of the annual rent paid
hereunder, the dates to which such rents and other charges hereunder have been paid, by installment
or otherwise, and whether there is any existing default on the part of the Landlord of which the
Tenant has notice.

          5.25. Insurance

               (a) To maintain Public Liability Insurance naming as additional insured the Landlord or other
such persons or corporations as may from time to time be named or appointed by the Landlord or its
assignee or its successor under this Lease in the minimum amount of Three Million ($3,000,000)
Dollars per occurrence inclusive limits.

               (b) To place and maintain Tenant’s Legal Liability Insurance in the amount equal to the
replacement value of the Leased Premises.

          5.26. Encumbrances

               (a) Not to cause, permit or suffer any caveat, builder’s lien or other encumbrance to be
maintained against the Landlord’s title to the Leased Premises without the prior written consent of
the Landlord, except this Lease or a caveat based thereon, and if the Tenant shall fail to cause
any of the same to be discharged within fifteen (15) days after receipt of notice from the Landlord
so to do, the Landlord may, but shall not be obligated to, discharge the same by paying the amount
claimed to be due or by bonding or other proceedings deemed appropriate by the Landlord and any
amount paid or expense incurred, including legal ‘fees (on a solicitor and own client basis)
relating thereto shall be deemed to be additional rent for the Leased Premises and shall be due and
payable by the Tenant to the Landlord within thirty (30) days of written demand, provided that the
Tenant shall not be deemed to be in default hereunder while it contests any and all such caveats,
liens or encumbrances in good faith.

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               (b) Not to cause, permit or suffer any Caveat, Builder’s Lien, Conditional Sales Agreement,
Chattel Mortgage or other encumbrance to any improvements by the Tenant on the Leased Premises
without the prior written consent of the Landlord, except this Lease or a caveat based thereon.

          5.27. Payments on Behalf of Tenant

          At any time during the Term or any renewal thereof, the Landlord is required to pay or pays
any amount required to be paid by the Tenant under this Lease, to then pay the amount so paid
immediately on written demand to the Tenant as additional rent.

          5.28. Keep Occupied

          Not to vacate the Leased Premises.

          5.29.
Deliver Up Possession

          To peaceably surrender and deliver up the Leased Premises at the expiration or sooner
termination of the Lease in the condition in which the Tenant is required to maintain the Leased
Premises hereunder.

ARTICLE 6

THE LANDLORD COVENANTS

          The Landlord covenants with the Tenant as follows:

          6.1.
Quiet Enjoyment

          That provided the Tenant shall pay the rent hereby reserved when due and performs the terms,
conditions and covenants on its part herein contained, then the Tenant shall peaceably hold the
Leased Premises during the term of the Lease without interruption by the Landlord or any person
rightfully claiming through or in trust for the Landlord.

          6.2. Replacement

          To replace when required the roof structure (but not the roof membrane) of the Building
and for one year commencing February 1, 2006 complete replacement of the HVAC systems and
replacement of an entire packaged rooftop air conditioning unit.

          6.3. Insurance

          Subject to commercial availability, the Landlord will obtain and maintain insurance in
amounts, against risks, in a form and with insurers as is prudent having regard to the business
conducted on the Leased Premises, including without limitation:

               (a) all-risks property insurance on the Building;

               (b) if any boiler or pressure vessel is operated on the Leased Premises insurance against loss
or damage by explosion of such boiler or pressure vessel.

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The insurance required by this Article 6.3 will be effected and maintained to such amounts as will
reasonably protect the Tenant and the Landlord against such loss or damage and in any event to the
same extent as would be usual and prudent for persons carrying on a similar business and operating
and owning similar properties similarly located; provided, subject to commercial availability, that
the Landlord will at all times maintain an amount of insurance at least equal to the full
replacement cost for all of the Building and all such insurance shall be without co-insurance or in
a stated amount without co-insurance and will be effected and maintained with such insurers as may
be selected by the Landlord. The Landlord will deliver certificates of insurance evidencing the
required insurance to the Tenant at the Tenant’s request.

          6.4. Adjustment of Operating Costs and Taxes

          To furnish to the Tenant on or before the expiration of three (3) months after the Landlord’s
fiscal year end, a Statement of Operating Costs and Taxes during the immediate preceding fiscal
year or portion thereof, such statement to be certified correct by a responsible officer of the
Landlord. Within thirty (30) days after delivery of such a statement, the Landlord or the Tenant
(as the case may be) shall have appropriate adjusting payment in the amount of the difference
between the total Operating Costs and Taxes actually paid by the Tenant in respect of such fiscal
period or portion thereof and the Operating Costs and Taxes that should have been paid by the
Tenant in respect of the corresponding periods.

ARTICLE 7

INSTALLATIONS

          7.1. Tenant Installation

          All articles of personal property and all business and trade fixtures, machinery and equipment
and furniture, owned or installed by the Tenant at the expense of the Tenant in the Leased
Premises, shall remain the property of the Tenant and the Tenant, if not in default, may remove its
property at any time during the Term, provided that the Tenant, at its expense, shall repair any
damage to the Leased Premises caused by such removal or the original installation. The Landlord
may require the Tenant, at the Tenant’s expense, to remove all or any part of the afore-described
property at the expiration or sooner termination of this Lease and to repair any damage to the
Leased Premises caused by such removal and if the Tenant does not remove its property forthwith
after written demand by the Landlord then the Landlord may enter the Leased Premises and remove all
or any part of the afore-described property and repair any damage to the Leased Premises caused by
such removal all at the expense of the Tenant forthwith to the Landlord upon written demand and the
Landlord will not be responsible for any loss or damage to such property because of such removal
provided that the Landlord may elect not to remove such property in which event it shall be deemed
to be the Landlord’s property.

          7.2. Alterations and Additions

          All installations, alterations, additions, partitions and fixtures except those items
described in Article 7.1 above, in or upon the Leased Premises, whether placed there by the Tenant
or the Landlord, shall, immediately upon such placement become the Landlord’s property without
compensation therefor to the Tenant and, except as hereinafter mentioned shall not be

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removed from the Leased Premises by the Tenant at any time either during or after the term
provided that the Landlord shall be under no obligation to repair or maintain installations,
alterations, additions, partitions and fixtures or anything in the nature of a leasehold
improvement made or installed by the Tenant or the Landlord.

ARTICLE 8

PROPERTY LOSS, DAMAGE, REIMBURSEMENT

          8.1. Liability

          The Landlord, its servants or agents, shall not be liable for, and the Tenant will indemnify
and hold the Landlord harmless from and against any loss, injury (including injury resulting in
death) or damage howsoever caused to any persons using the Leased Premises, or to vehicles or their
contents or any other property thereon, or for any damage to property entrusted to the Landlord or
its employees or for the loss of any property by theft, burglary, vandalism or breaking and entry,
or from falling plaster, steam, water, rain, snow or dampness which may leak into, issue from, flow
into or be found upon the Leased Premises, or for any loss, damage or injury (including injury
resulting in death) to any person or property caused by or attributable to the condition, location
or arrangement of any electric, telephone, gas, plumbing, air-conditioning or heating wiring,
pipes, conduits or apparatus or other service supplied to, passing through or used on, within or in
connection with the Leased Premises, unless such loss, injury or damage is caused solely by the
negligence of the Landlord. This provision shall survive and remain in full force and effect after
the expiration or sooner termination of this Lease.

          8.2. Reimbursement

          The Tenant shall reimburse the Landlord for all actual expenses (including legal fees on a
solicitor and own client basis), costs, damages, loss or fines incurred or suffered by the Landlord
by reason of any breach, violation or non-performance by the Tenant of any covenant or provision of
this Lease or by reason of damage to persons or property caused by the Tenant, its servants or
agents.

          8.3. Notice

          The Tenant shall give the Landlord immediate notice in case of injury, damage, fire or
accident in the Leased Premises.

          8.4. Landlord’s Repair of Tenant’s Damage

          If the Landlord shall repair any damage caused by the Tenant then the cost or expense incurred
by the Landlord with respect to such repair shall be deemed to be additional rent for the Leased
Premises and shall be due and payable by the Tenant to the Landlord within thirty (30) days of
written demand.

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ARTICLE 9

DAMAGE TO OR DESTRUCTION OF THE LEASED PREMISES

          9.1. Damage or Destruction of Leased Premises

          In case the Leased Premises, or any part thereof, shall at any time during the Term or any
renewal thereof be damaged or destroyed by any cause whatsoever (except where it is the
responsibility of the Tenant to repair) such that, in the reasonable opinion of the Landlord, they
are rendered unfit in whole or in part for the purposes of the Tenant then the following shall
apply:

               (a) if, in the opinion of the Landlord, the Leased Premises shall be capable with reasonable
diligence of being repaired and rendered fit for occupation within one hundred eighty (180) days
from the happening of such damage, but the damage is such as to render the Leased Premises wholly
unfit for occupancy, then the rent and all additional rent hereby reserved shall be suspended after
such damage while the process for repair is going on, and the Landlord shall repair the same with
all reasonable speed and the rent and all additional rent shall recommence immediately after such
repairs have been completed and the Tenant notified in writing that the Leased Premises are ready
for occupancy;

               (b) if, in the opinion of the Landlord, the Leased Premises shall be capable with reasonable
diligence of being repaired and rendered fit for occupation within one hundred eighty (180) days as
aforesaid and if the damage is such that the Leased Premises are capable of being partially used
then, until such damage is repaired, the rent and all additional rent shall be suspended in the
proportion that the unoccupied part of the Leased Premises bear to the whole of the Leased Premises
for the duration of such repairs and the Landlord shall repair the same with all reasonable speed;

               (c) notwithstanding Article 9.1(b), if, in the opinion of the Landlord, the Building shall be
capable with reasonable diligence of being repaired and rendered fit for occupation within one
hundred eighty (180) days as aforesaid, and if the damage is such that the Leased Premises are
capable of being partially used but fifty percent or more of the floor area of the Leased Premises
is materially damaged and the Tenant, acting reasonably, determines that it is unable to carry on
its business substantially in the manner carried on prior to such damage within such period, then
the rent and all additional rent shall be suspended (provided only if the Tenant ceases its
operations in the Leased Premises until such damage is repaired) for the duration of such repairs
and the Landlord shall repair the same with all reasonable speed;

               (d) if, in the opinion of the Landlord, the Leased Premises cannot be rebuilt or made fit for
the purpose of the Tenant within one hundred eighty (180) days of such damage or destruction, the
Landlord, instead of rebuilding or making the Leased Premises fit for the Tenant, or the Tenant may
terminate this Lease by giving the other within thirty (30) days after the rendering of the
Landlord’s opinion, written notice of termination, and thereupon rent and additional rent for which
the Tenant is liable under this Lease shall be apportioned on a per diem basis and paid to the date
of such damage or destruction and the Tenant shall immediately deliver up possession of the Leased
Premises to the Landlord;

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               (e) in any case, the Landlord shall not be responsible for and the Tenant shall acquire no
rights arising from any delay in the repairs;

               (f) the Landlord shall act reasonably in forming any opinion pursuant to this Article 9.1.

          9.2. Impossibility of Performance

          Whenever and to the extent that the Landlord shall be unable to fulfill, or shall be delayed
or restricted in fulfilling any obligation hereunder in respect of the supply or provision of any
service or utility or the doing of any work or the making of any repairs by reason of being unable
to obtain the material, goods, equipment, service, utility or labor required to enable the Landlord
to fulfill such obligation or by reason of any statute, law or order-in-council or any regulation
or order or direction of any administrator, controller or board, or any government department or
officer or other authority, or by reason of not being able to obtain any permission or authority
required thereby, or by reason of any other cause beyond the control of the Landlord whether of the
foregoing character or not, the Landlord shall be entitled to extend the time for fulfillment of
such obligation by a time equal to the duration of such delay or restriction, and the Tenant shall
not be entitled to compensation and the rent shall not be suspended for any inconvenience,
nuisance, loss of business or profits, or discomfort thereby occasioned.

ARTICLE 10

ACCESS TO TILE LEASED PREMISES

          10.1. Right of Access

          The Landlord, its servants and agents shall have the right to enter the Leased Premises at
reasonable times during normal business hours to examine the same and make repairs, alterations,
improvements or additions as the Landlord may be required to make by law or in order to repair and
maintain the Leased Premises; and the Landlord shall be allowed to take all material, men, tools
and equipment into the Leased Premises that may be required therefor, without the same constituting
an eviction of the Tenant in whole or in part and the rent reserved and all other amounts due
hereunder shall in no way abate or be suspended while said repairs, alterations, improvements or
additions, are being made and the Landlord shall not be liable for any inconvenience to the Tenant
or damage to or interruption of the Tenant’s business.

ARTICLE 11

DEFAULT

          11.1. Default

          The Tenant covenants with the Landlord that if any payment of rent or additional rent or any
part thereof becomes due and non-payment continues for five (5) days after the due date or if the
Tenant shall violate or default under any covenant, agreement or stipulation herein contained on
its part to be kept, performed or observed and any such default on the part of the Tenant shall
continue for ten (10) days (or such longer period as may be reasonable in the circumstances) after
written notice thereof to the Tenant by the Landlord, or in case the Leased Premises shall be
vacated or become vacated or remain unoccupied for ten (10) days then, and in

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any such case, the Landlord, in addition to any other remedy now or hereinafter provided by
law, may terminate this Lease forthwith by written notice to the Tenant, and in addition to any
other remedy, and the Landlord may re-enter and may remove all persons and property therefrom and
such property may be removed and stored in a public warehouse or elsewhere at the cost and for the
account of the Tenant and the Landlord may use all legal remedies in making such removal as the
Landlord may deem advisable to recover at once full and exclusive possession of the Leased Premises
and such re-entry shall not operate as a waiver or satisfaction in whole or in part of any right,
claim or demand arising out of or connected with any breach or violation by the Tenant of any
covenant or agreement on its part to be performed. Such re-entry shall be without prejudice to the
Landlord’s rights to recover any outstanding rent or additional rent, to recover damages arising
from a breach, or otherwise to enforce its rights hereunder.

          11.2. Bankruptcy

          If, without the written consent of the Landlord, the Leased Premises shall be used by any
other person than the Tenant, or for any other purpose than that for which they were let, or if any
of the goods and chattels of the Tenant shall at any time be seized in execution or attachment by
any creditor of the Tenant, or if the Tenant shall make any assignment for the benefit of its
creditors, or if the Tenant shall become bankrupt or insolvent or take the benefit of any Act now
or hereafter in force for bankrupt or insolvent debtors, or if the Tenant has a receiver appointed
or, if the Tenant is a corporation and any order shall be made for the winding-up or the Tenant or
other termination of its corporate existence, then this Lease shall, at the option of the Landlord,
cease and determine and the Term shall immediately become forfeited and void and the then current
month’s installments of rent and additional rent shall immediately become due and be paid to the
Landlord as liquidated damages and not as a penalty and the Landlord may re-enter and take
possession of the Leased Premises as though the Tenant or other occupant or occupants of the Leased
Premises were holding over after the expiration of the Term without any right whatever.

          11.3. Recovery of Adjustments

          The Landlord shall have in addition to any other right or remedy the same rights or remedies
in the event of default by the Tenant in payment of any amount payable to the Landlord hereunder,
as the Landlord would have in the case of default in payment of rent.

ARTICLE 12

DISTRESS

          12.1. Distress

          Whensoever the Landlord shall be entitled to levy distress against the goods and chattels of
the Tenant, it may use all legal remedies necessary for that purpose and for gaining admission to
the Leased Premises without being liable to any action in respect thereof or for any loss or damage
occasioned thereby and the Tenant hereby expressly releases the Landlord from all actions,
proceedings, claims or demand whatsoever for or on account of or in
respect to any such forcible entry or any loss or damage sustained by the Tenant in connection therewith notwithstanding
anything contained in any statute now or hereafter enforce limiting or

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abrogating the right of distress, none of the goods, chattels or trade fixtures of the Tenant
on the Leased Premises at any time during the Term shall be exempt from levy by distress and the
Tenant hereby waives each and every benefit that could or might have accrued to the Tenant under
and by virtue of any statute.

          12.2. Right of Re-Entry

          Upon the Landlord’s entitlement to re-enter the Leased Premises under any provisions for
default contained in this Lease, the Landlord, in addition to all other rights hereunder, shall
have the right to enter the Leased Premises as the agent of the Tenant by all legal remedies,
without being liable therefor and to relet the Leased Premises as the agent of the Tenant and the
Landlord may, at the cost of Tenant, make such alterations and repairs as are necessary in order to
relet the Leased Premises, and to receive the rent therefor as the agent of the Tenant, and to take
possession of any furniture or other property on the Leased Premises and to sell such furniture or
other property at public or private sale without notice and to apply the proceeds upon account of
the rent under this Lease and the Tenant shall be liable to the Landlord for any deficiency.

          12.3. Right of Termination

          Upon the Landlord’s entitlement to re-enter the Leased Premises under any provisions for
default contained in this Lease, the Landlord, in addition to all other rights, shall have the
right to immediately terminate this Lease by providing written notice pursuant to Article 15.1,
notice in writing of the Landlord’s intention so to do, and thereupon rent shall be computed,
apportioned upon a per diem basis and paid in full to the date of such termination and any other
payments for which the Tenant is liable under this Lease shall be paid immediately and the Tenant
shall immediately deliver up peaceable possession of the Leased Premises to the Landlord, and the
Landlord may reenter and take possession thereof.

ARTICLE 13

NON-WAIVER

          13.1. Non-Waiver

          No condoning, excusing or overlooking by the Landlord of any default, breach or non-observance
by the Tenant at any time or times in respect to any covenant, proviso or condition herein
contained shall operate as a waiver of the Landlord’s rights hereunder In respect to any continuing
or subsequent default, breach or non-observance, or so as to defeat or affect in any way the rights
of the Landlord herein in respect to any such continuing or subsequent default or breach, and no
waiver shall be inferred from or implied by anything done or omitted by the Landlord save only
express waiver in writing. The Landlord’s consent to or approval of any act by the Tenant
requiring the Landlord’s consent or approval shall not be deemed to waive or render unnecessary the
Landlord’s consent or approval to any subsequent similar act by the Tenant.

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          13.2. Rights and Remedies

          All rights and remedies of the Landlord in this Lease contained shall be cumulative and not
alternative.

ARTICLE 14

HOLDING OVER

          14.1. Holding

          If the Tenant shall remain in possession of the Leased Premises after the expiration of this
Lease and no written agreement otherwise provides, the Tenant shall be deemed a Tenant from month
to month at a monthly rent, payable in advance, equal to one-ninth (1/9) of the annual rent payable
during the immediately preceding lease year and save as to rent, term renewal and Term shall be
subject to the provisions of this Lease insofar as the same are applicable.

ARTICLE 15

NOTICES

          15.1. Notices

          Any notice required or contemplated by any provision of the Lease or which the Landlord or
Tenant may desire to give to the other shall be sufficiently given by personal delivery, by
facsimile or by registered letter, postage prepaid and mailed and addressed to the party to whom
such notice is to be given at the address of such party as given in this Lease and any such notice
shall be effective as of the day of such personal delivery or facsimile or as of the third day
following the date of such posting, as the case may be, provided however, that Saturdays, Sundays,
Statutory Holidays and delays caused by strike or other delay in postal service shall extend the
period within which notice shall be deemed to have been received. Either party may at any time
give notice in writing to the other of any change of address of the party giving such and from and
after the giving of such notice, the address therein specified shall be deemed to be the address of
such party for the giving of notices hereunder. The word “notice” shall be deemed to include any
request, statement or other writing in this lease provided or permitted to be given by the Landlord
to the Tenant or by the Tenant to the Landlord.

ARTICLE 16

LANDLORD’S ASSIGNMENT OF LEASE

          16.1. Landlord’s Assignment of Lease

          It is understood and agreed between the Landlord and the Tenant that the Landlord may assign
this Lease and the rights and obligations hereunder, provided that such assignment by the Landlord
shall require that the Assignee accept and agree in writing with the Tenant as to each and every
responsibility of the Landlord as described in this Lease, and the Tenant hereby releases the
Landlord from its obligations hereunder and any and all claims and demands by and damages and
losses occurring to the Tenant and arising after the date of such assignment to the extent that
such obligations have been assumed by the Assignee.

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ARTICLE 17

APPLICABLE LAW

          17.1. Applicable Law

          The law of the Province of British Columbia shall apply to this Lease and the conditions and
covenants herein. The Tenant hereby submits to the jurisdiction of the courts of the Province of
British Columbia in any action or proceeding whatsoever by the Landlord to enforce its rights
hereunder.

ARTICLE 18

INTERPRETATION

          18.1. Provisions

          All of the provisions of this Lease are to be construed as covenants and agreements as though
the words importing such covenants and agreements were used in each separate paragraph hereof.
Should any provision of this Lease be illegal or unenforceable, it shall be considered separate and
severable from the Lease and the remaining provisions of this Lease shall remain in force and be
binding upon the parties hereto as though the said provisions had never been included.

          18.2. Headings

          The headings to the clauses in this Lease have been inserted as a matter of convenience and
for reference only and in no way define, space or enlarge the scope or meaning of this Lease or any
provision hereof.

          18.3. Additional Covenants

          This Lease and everything herein contained shall enure to the benefit of and be binding upon
the heirs, executors, administrators, successors, permitted assigns and other legal
representatives, as the case may be of each of the parties hereto, and every reference herein to
any party hereto shall include the heirs, executors, administrators, successors, assigns, and other
legal representatives of such party, and where there is more than one tenant, or there is a female
party or a corporation, the provisions hereof shall be read with all grammatical changes thereby
rendered necessary, and all covenants shall be deemed joint and several. Any reference in this
Lease to the Tenant shall include, where the context allows, the servants, employees, agents,
invitees and licensees of the Tenant and all others over whom the Tenant might reasonably be
expected to exercise control.

ARTICLE 19

ADDITIONAL COVENANTS

          The following covenants shall apply in addition to the general Articles of this Lease and, in
the event of conflict therewith, shall be considered as exceptions to such general articles.

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          19.1. Joint and Several Tenants

          If any party includes two or more persons or corporations, or combination of same, the
obligations of each person or corporation shall be joint and several.

          19.2. Subordination of Lease

          This Lease is subject to subordinate to all debt security instruments and all indentures
supplemental thereto which may now or hereafter affect this Lease and the Leased Premises, and to
all renewals, modifications, consolidations, replacements and extensions thereof. The Tenant
agrees to execute promptly any document in confirmation of such subordination as the Landlord may
request and hereby constitutes the Landlord, the agent or attorney of the Tenant for the purpose of
executing any such document and of making application at any time and from time to time to register
postponements of this Lease in favour of any such mortgage in order to give effect to the foregoing
provisions of this clause. The Tenant agrees to grant priority to any easements, rights-of-way or
statutory covenants requested by any municipal or provincial authority or utility companies.

          19.3. Subletting and Assigning

          The Tenant shall not assign, sell, transfer, mortgage, sublet or grant a licence as to its
interest herein or allow the use or occupation of the Leased Premises or any part thereof without
the prior written approval of the Landlord first had and obtained, which approval may not be
arbitrarily or unreasonably withheld. All costs incurred by the Landlord in granting its consent
including legal fees on a solicitor and own client basis shall be paid by the Tenant. As a
condition for granting its consent to an assignment, and in the case of the Tenant assigning or
subletting to an entity owned or controlled by the Tenant, the Landlord can require the Assignee to
covenant in writing that the Assignee agrees to be bound by the terms, conditions and covenants
contained within this Lease. Consent to an assignment or sub-letting shall not release the Tenant
from his obligations under this Lease and acceptance of rent from, or the performance of an
obligation by a person other than the Tenant shall not constitute consent to an assignment or
subletting.

          19.4. Tenant to Remain Liable

          If the Landlord does consent to an assignment or subletting by the Tenant of the Leased
Premises or any part thereof, the Tenant shall remain liable for the payment of all rent hereunder
and for the performance of all of the provisions of this Lease on its part to be performed.

          19.5. Signage

          The Tenant shall have the right to erect a sign on the outside of the Building at its own
expense provided that the sign is approved by the Landlord, such approval not to be unreasonably
withheld, and provided such sign shall be installed in a manner and at a location approved by the
Landlord, and further provided that such sign conforms in design, size, location and in all other
respects conforms with all municipal and governmental statutes.

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ARTICLE 20

LEASE ENTIRE RELATIONSHIP

          20.1. Lease Entire Relationship

          The Tenant acknowledges that there are no covenants, representations, warranties, agreements
or conditions expressed or implied, collateral or otherwise forming part of or in any way affecting
or relating to this Lease save as expressly set out in this Lease and that this Lease constitutes
the entire agreement between the Landlord and the Tenant and may not be modified except as herein
expressly provided or except by subsequent agreement in writing executed by the Landlord and the
Tenant.

ARTICLE 21

TIME IS OF THE ESSENCE

          21.1. Time is of the Essence

          Time shall be of the essence of this Lease.

ARTICLE 22

NON-REGISTRATION

          22.1. Registration

          The Landlord and Tenant covenant and agree that the Landlord shall not be obligated to deliver
to the Tenant this Lease in a form registerable under the Land Title Act.

ARTICLE 23

RULES AND REGULATIONS

          23.1. Rules and Regulations

          The Tenant shall not use the water closets and wash basins and other plumbing fixtures for any
purposes other than those for which they were constructed. All damages or servicing resulting from
any misuse of the fixtures shall be borne by the Tenant.

          23.2. Except in carrying out work to the Leased Premises which it is permitted to do in
accordance with this Lease, the Tenant shall not mark, paint, drill into, or in any way deface any
part of the Leased Premises and the Tenant shall not bore, cut or string wires except with the
prior written consent of the Landlord, and the Tenant shall not lay any floor covering, so that the
same shall be attached to the floor of the Leased Premises without the prior written consent of the
Landlord.

          23.3. The Tenant shall not make, or permit to be made, any unseemly or disturbing noises or
disturb or interfere in any way with occupants of neighbouring buildings.

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          23.4. The Tenant shall only keep upon or allow to be brought upon the Leased Premises any
inflammable, combustible or explosive fluid, chemical or other substance in accordance with
applicable environmental laws and regulations.

          23.5. The Tenant shall not install additional locks or bolts of any kind upon any of the doors
or windows of the Leased Premises, nor shall any changes be made in existing locks or the
mechanisms thereof without first providing the Landlord with copies of the keys for same. The
Tenant shall, upon the termination of the tenancy, return to the Landlord all keys to the Leased
Premises.

          23.6. The Tenant shall not install any equipment which will exceed or overload the capacity of
any floor, roof, wall, utility or service facility.

          23.7. The Tenant shall not bring any animals onto the Leased Premises.

ARTICLE 24

ENVIRONMENTAL MATTERS

          24.1. Definitions

          For the purposes of this article:

               (a) “Contaminants” means any pollutants, contaminants, deleterious substances, underground or
above-ground tanks, asbestos materials, hazardous, corrosive, or toxic substances, special waste or
waste of any kind, or any other substance which is now or hereafter prohibited, controlled, or
regulated under Environmental Laws; and

               (b) “Environmental Laws” means any statutes, laws, regulations, orders, bylaws, standards,
guidelines, permits and other lawful requirements of any governmental authority having jurisdiction
over the Leased Premises now or during the Term in force relating in any way to the environment,
health, occupational health and safety, or transportation of dangerous goods, including the
principles of common law and equity.

          24.2. Tenant’s Covenants and Indemnity

          The Tenant covenants and agrees as follows:

               (a) not to use or permit to be used all or any part of the Leased Premises for the sale,
storage, manufacture, disposal, use, or any other dealing with any Contaminants, without the prior
written consent of the Landlord, which may be unreasonably withheld;

               (b) to strictly comply, and cause any person for whom it is in law responsible to comply, with
all Environmental Laws regarding the Tenant’s use and occupancy of the Leased Premises;

               (c) to maintain all environmental site assessments, audits and reports relating to the Leased
Premises in strict confidence (including without limitation any

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governmental authority) except as required by law, or to the Tenant’s professional advisers
and lenders on a need-to-know basis, or with the prior written consent of the Landlord, which
consent may be unreasonably withheld;

               (d) to promptly notify the Landlord in writing of any release of a Contaminant or any other
occurrence or condition at the Leased Premises or any adjacent property which could contaminate the
Leased Premises or subject the Landlord or the Tenant to any fines, penalties, orders,
investigations or proceedings under Environmental Laws;

               (e) on the expiry or earlier termination of this Lease, or at any time if requested by the
Landlord or required by any governmental authority under Environmental Laws, to remove from the
Leased Premises all Contaminants, and to remediate any contamination of the Leased Premises or any
adjacent property resulting from Contaminants, in either case brought onto, used at, or released
from the Leased Premises by the Tenant or any person for whom it is in law responsible. The Tenant
shall perform these obligations promptly at its own cost and in accordance with Environmental Laws.
All such Contaminants caused by the Tenant shall remain the property of the Tenant,
notwithstanding any rule of law or other provision of this Lease to the contrary and
notwithstanding the degree of their affixation to the Leased Premises; and

               (f) to indemnify the Landlord and its directors, officers, employees, agents, successors, and
assigns from any and all liabilities, actions, damages, claims, losses, costs, fines, penalties,
and expenses whatsoever (including all legal and consultants’ fees and expenses and the cost of
remediation of the Leased Premises and any adjacent property) arising from or in connection with:

                    (i) any breach of or non-compliance with the provisions of this Article by the Tenant; or

                    (ii) any release or alleged release of any Contaminants at or from the Leased Premises related
to or as a result of the use and occupation of the Leased Premises by the Tenant or any act or
omission of the Tenant or any person for whom it is in law responsible.

The obligations of the Tenant under this Article shall survive the expiry or earlier termination of
this Lease.

ARTICLE 25

RIGHTS TO RENEW

          25.1. Renewal

          The Tenant shall, provided it is not in material default under any of the terms and
conditions of this Lease, have the right to renew the term of this Lease for a further period of
Two (2) years after the expiration of the term hereof. This option must be exercised in writing at
least six (6) months and no more than eight (8) months prior to the expiration of the Term. In the
event that this right to renew is exercised all the other terms and conditions of this Lease,
except

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this right to renew, free rent, the amount of rent and any provisions for improvement
allowances, shall be binding upon the parties hereto during such renewal period.

          25.2. The annual rent payable by the Tenant during such renewal period shall be at a rent
equal to the fair market rental value of the Leased Premises as improved at the commencement of the
specific renewal term and as compared with similar premises of a similar size and location as
mutually agreed between the parties, provided that if the parties cannot so agree on the fair
market rental value prior to the commencement of any renewal term then it shall be determined by
arbitration pursuant to the terms of the Commercial Arbitration Act of British Columbia and
any amendments thereto or replacements thereof provided that, in any event, the annual rent shall
not be less than the annual rent during the last year of the Term. All expenses of arbitration
pursuant to this Article shall be borne equally by the Landlord and the Tenant.

ARTICLE 26

PARKING

          26.1. The Tenant shall have the right during the Term to use all of the paved loading and
parking area, consisting of approximately 26 parking stalls, located on the Lands for parking
vehicles and/or trailers at no additional cost provided that the Tenant keeps such areas in a clean
and tidy state and immediately repairs any damage caused by its use of those areas. All such
parking areas shall be used at the sole risk of the Tenant and the Landlord shall not be obliged to
police usage thereof. The Tenant will indemnify and save harmless the Landlord from and against
all damage to vehicles, the Leased Premises, persons, property, and all personal injury or death by
reason of parking or operation of any vehicles, of the Tenant, its employees, agents, customers,
and invitees, on the Lands.

ARTICLE 27

FURNITURE AND TELEPHONE SYSTEM

          27.1. The parties hereto acknowledge and agree that the Tenant shall have the free use of, but
not ownership of, certain furniture and a telephone system located within the Leased Premises as of
the date hereof.

The parties agree to list and sign off on the condition of said furniture prior to the Commencement
Date. In the event that the parties hereto can not agree upon the condition of any individual
items of furniture the Landlord shall be entitled to remove said individual items of furniture from
the Leased Premises without notice to the Tenant. The Tenant hereby agrees to maintain said
furniture in the condition it is in as of the date hereof, reasonable wear and tear only excepted,
failing which the Tenant shall replace said items of furniture with new furniture of similar
quality as required but in any event prior to the expiry of the Term or any renewal thereof .

The parties hereto agree and acknowledge that said telephone system is in good condition and in
proper working order as of the date hereof. The Tenant further agrees to maintain, repair or
replace said telephone system or components thereof as required to return said telephone system to
the Landlord at the expiry of the Term or any renewal thereof in good condition and in proper
working order. The Tenant further acknowledges that said telephone system and internet service

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is operated under a contract between the Landlord and Group Telecom, and the Tenant hereby agrees
to assume said contract with Group Telecom, or if this is not possible, to promptly reimburse the
Landlord for any and all charges and costs from Group Telecom to the Landlord relating to the
Leased Premises upon demand throughout the Term and any renewal thereof.

THIS LEASE shall enure to the benefit of and be binding upon all parties hereto and their
respective heirs, executors, administrators, successors and assigns.

IN WITNESS WHEREOF the parties have respectively affixed their corporate seals in the presence of
their officers first duly authorized in that behalf or set their hands and seal (as applicable) as
of the day and year first above written.

LANDLORD:

2285 CLARK INVESTMENTS LTD.

	 	 	 	 	 
	Per:
	 	/s/ illegible
	 

	 	 	 	 
	 

	 	Authorized Signatory
	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 
	 
	 	 	 	 
	TENANT:	 	 
	 
	 	 	 	 
	LULULEMON ATHLETICA INC.	 	 
	 
	 	 	 	 
	Per:
	 	/s/ Brian Bacon
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 
	 
	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Authorized signatory	 	 

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