Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.22    
  

SUBLEASE AGREEMENT

BETWEEN

ADOBE SYSTEMS INCORPORATED,

AS SUBLANDLORD

AND

CUTTER & BUCK, INC.

AS SUBTENANT  

  
 

    SUBLEASE    
  

        THIS SUBLEASE ("Sublease") is entered into as of April    , 2002, by and between Adobe Systems Incorporated, as sublandlord ("Sublandlord"), and
Cutter & Buck, Inc., a Washington corporation, as subtenant ("Subtenant"), with reference to the following facts: 

        A.
Pursuant to that certain Quadrant Lake Union Center Lease dated October 31, 1996, as the same has been amended by the First Amendment to Lease dated February 10, 1998,
and the Partial Release
of Rights (Option to Purchase Lake View Building) dated January    , 2001 (as amended, the "Master Lease"), The Quadrant Corporation, a Washington corporation ("Landlord"), as Landlord,
leased to Sublandlord, as tenant, certain space (the "Master Lease Premises") consisting of 254,328 rentable square feet located in Buildings 1 and 2 of the Quadrant Lake Union Center ("Project") in
Seattle, Washington, as more particularly described in the Master Lease. 

        B.
Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes to sublease to Subtenant, a portion of the Master Lease Premises containing approximately 44,670 rentable square
feet consisting of the entire fourth (4th) floor and a portion of the second (2nd) floor of the Plaza Building (i.e. Building Number 2) (the "Building"), said space
being more particularly identified and described on the floor plan attached hereto as Exhibit A and incorporated herein by reference (the
"Original Subleased Premises"). The Building contains approximately 136,111 rentable square feet. 

        C.
In addition, commencing as of January 1, 2007, Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes to sublease to Subtenant, approximately 4,697 rentable
square feet on the second (2nd) floor of the Building, said space being more particularly identified and described on the floor plan attached hereto as  Exhibit B and incorporated herein
by reference (the "Additional Premises"). The Original Subleased Premises and the Additional Premises are
referred to herein collectively as the "Subleased Premises." 

        D.
Subtenant also wishes to obtain an option to sublease a portion of the Master Lease Premises containing approximately 6,452 rentable square feet located on the second
(2nd) floor of the Building, as shown on Exhibit C attached hereto (the "Expansion Space"), and Sublandlord has agreed to grant
Subtenant such an option, pursuant to the terms of this Sublease. 

        NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, Sublandlord
and Subtenant hereby agree as follows: 

        1.    Sublease.    Sublandlord hereby subleases to Subtenant and Subtenant hereby subleases from Sublandlord the
Subleased Premises, commencing on and for the term provided in Section 2 of this Sublease, and at the rental, and upon all of the conditions set forth herein. 

        2.    Term.    

        2.1    Term.    Subject to Section 2.2 of this Sublease, the term of this Sublease ("Term") with respect to the
Original Subleased Premises shall commence on September 1, 2002 (the "Commencement Date") and end on July 15, 2010 (the "Expiration Date"). Subject to Section 2.2 of this
Sublease, the Term with respect to the Additional Premises shall commence on January 1, 2007 (the "Additional Premises Commencement Date") and end on the Expiration Date. If Sublandlord is
unable to deliver the Additional Premises as of the date provided above, Sublandlord shall have no liability therefor, except
that Subtenant shall have no liability to pay any rent on the Additional Premises until it is delivered to Subtenant. Sublandlord agrees to use commercially reasonable efforts to deliver the
Additional Premises to Subtenant on January 1, 2007. 

        2.2    Consent.    Under the Master Lease, Sublandlord must obtain the consent of Landlord to any subletting. This
Sublease shall be in full force and effect upon execution of this Sublease by Sublandlord and Subtenant; provided that the Commencement Date and Additional Premises Commencement Date shall not occur
unless and until Landlord executes a written consent to this Sublease substantially in the form of Exhibit D attached hereto (the "Consent"). In
the event that 

 

the Consent executed by Landlord is not delivered to Subtenant within thirty (30) days after the date of this Sublease (which date, at Sublandlord's option, shall be extended if Subtenant
delays in providing any reasonable information that is required by Landlord in connection with providing its consent), Subtenant and Sublandlord shall each have the right to cancel this Sublease by
giving written notice of such cancellation (the "Cancellation Notice") to the other party at any time after such thirty day period; provided that if Subtenant gives Sublandlord a Cancellation Notice,
this Sublease shall not be cancelled and shall remain in full force and effect if Sublandlord obtains the Consent within two (2) days after Sublandlord receives Subtenant's Cancellation Notice. 

        2.3    Early Occupancy.    From and after the date that Landlord executes the Consent and until the Commencement Date
(the "Early Occupancy Period"), Subtenant shall be entitled to occupy the Subleased Premises for the sole purpose of preparing the Subleased Premises for occupancy, including the installation of
cable, fixtures and alterations (subject to the terms of this Sublease), and the moving in of furniture and equipment. During the Early Occupancy Period, all of the terms and conditions of this
Sublease shall apply to Subtenant, except that Subtenant shall not be liable for Base Rent or Additional Rent until the Commencement Date. 

        3.    Rent.    

        3.1    Rent Payments.    From and after the Commencement Date, Subtenant shall pay to Sublandlord as Base Rent for the
Subleased Premises during the Term the following: 

	Months
 
	 	Rent per

Square Foot per Year
	 	Monthly Installment

	September 1, 2002 - December 31, 2002	 	 	Free rent	 	 	0
	January 1, 2003 - December 31, 2003	 	$	23.50	 	$	87,478.75
	January 1, 2004 - December 31, 2004	 	$	24.00	 	$	89,340.00
	January 1, 2005 - December 31, 2005	 	$	24.50	 	$	91,201.25
	January 1, 2006 - December 31, 2006	 	$	25.00	 	$	93,062.50
	January 1, 2007 - December 31, 2007	 	$	25.50	 	$	104,904.88
	January 1, 2008 - December 31, 2008	 	$	26.00	 	$	106,961.83
	January 1, 2009 - December 31, 2009	 	$	26.50	 	$	109,018.79
	January 1, 2010 - July 15, 2010	 	$	27.00	 	$	111,075.75

Base
Rent shall be due on the first day of each month of the Term, provided that Subtenant shall pay to Sublandlord the Base Rent due for the month of January 2003 upon execution of this
Sublease by Subtenant. If the Term does not begin on the first day of the month or end on the last day of a month, the Base Rent and Additional Rent (hereinafter defined) for that partial month shall
be prorated by multiplying the monthly Base Rent and Additional Rent by a fraction, the numerator of which is the number of days of the partial month included in the Term and the denominator of which
is the total number of days in the full calendar month. All Rent (hereinafter defined) shall be payable in lawful money of the United States, by regular bank check of Subtenant, to Sublandlord at the
address stated herein or to such other persons or at such other places as Sublandlord may designate in writing. 

        3.2    Property Taxes and Operating Expenses.    

        (a)  In
addition to the Base Rent payable pursuant to Section 3.1 above, from and after the Base Year, for each calendar year of the Term, Subtenant, as Additional
Rent, shall pay to Sublandlord, Subtenant's Percentage Share (as defined below) of (1) the amount by which Property Taxes (as defined in Section 3 of the Master Lease) payable by
Sublandlord for the Master Lease Premises for the then current calendar year exceeds Base Property Taxes (as defined below), and (2) the amount by which Operating Expenses (as defined in
Section 3 of the Master Lease) payable by Sublandlord for the Master Lease Premises for the then current calendar year exceeds Base Operating Expenses (as defined below). Operating Expenses
shall not include any Ground 

2

 

Rent payable under the Master Lease, and Subtenant shall not be responsible for payment of any share of Ground Rent. 

        (b)  Sublandlord
shall give Subtenant written notice of Sublandlord's estimate of the amount of Additional Rent per month payable pursuant to this Subsection for each
calendar year of the Term following the Base Year, promptly following the Sublandlord's receipt of Landlord's estimate of the Property Taxes and Operating Expenses payable under the Master Lease for
the applicable calendar year. Such estimate may be adjusted by Sublandlord from time to time during the calendar year, by written notice to Subtenant. On or before the first day of each month during
each calendar year, Subtenant shall pay to Sublandlord as Additional Rent one-twelfth (1/12th) of such estimated amount together with the Base Rent. 

        (c)  Sublandlord
shall also give Subtenant written notice of the actual amount of Property Taxes and Operating Expenses payable for each calendar year, promptly following
Sublandlord's receipt of the annual statement of such amounts from Landlord, which notice shall include a copy of Landlord's annual statement. If on the basis of such statement Subtenant owes an
amount that is less than the estimated payments for the calendar year just ended, previously paid by Subtenant, Sublandlord shall credit such excess to the next payments of Rent coming due or, if the
term of this Sublease is about to expire, refund such excess to Subtenant within thirty (30) days after such expiration. If on the basis of such statement Subtenant owes an amount that is more
than the estimated payments for the calendar year just ended previously made by Subtenant, Subtenant shall pay the deficiency to Sublandlord within thirty (30) days after delivery of the
statement from Sublandlord to Subtenant. 

        (d)  For
partial calendar years during the term of this Sublease, the amount of Additional Rent payable pursuant to Subsection 3.2(a) that is applicable to that partial
calendar year shall be prorated based on the ratio of the number of days of such partial calendar year falling during the term of this Sublease to 365. The obligations of Sublandlord and Subtenant
pursuant to this Subsection 3.2 which arise during the term of this Sublease shall survive the expiration or earlier termination of this Sublease. 

        (e)  Definitions.    For purposes of this Sublease and in addition to the terms defined elsewhere in this Sublease,
the following terms shall have the meanings set forth below: 

        (1)  "Additional Rent"    shall mean the sums payable pursuant to subparagraph 3.2(a) of this Sublease. 

        (2)  "Base Operating Expenses"    shall mean Operating Expenses payable under the Master Lease during the Base Year. 

        (3)  "Base Property Taxes"    shall mean Property Taxes payable under the Master Lease during the Base Year. 

        (4)  "Base Year"    shall mean the calendar year 2003. 

        (5)  "Rent"    shall mean, collectively, Base Rent, Additional Rent, and all other sums payable by Subtenant to
Sublandlord under this Sublease, whether or not expressly designated as "rent," all of which are deemed and designated as rent pursuant to the terms of this Sublease. 

        (6)  "Subtenant's Percentage Share"    shall mean 17.56% prior to the Additional Premises Commencement Date, and
19.41% from and after the Additional Premises Commencement Date; provided that Sublandlord and Subtenant acknowledge that Subtenant's Percentage Share has been obtained by dividing the rentable square
footage of the Subleased Premises by the total rentable square footage of the Master Lease Premises and multiplying such quotient by 100. In the event Subtenant's Percentage Share is changed during a
calendar year by reason 

3

 

of a change in the rentable square footage of the Subleased Premises or the Master Lease Premises, Subtenant's Percentage Share shall thereupon be adjusted to equal the result obtained by dividing
the rentable square footage of the Subleased Premises by the rentable square footage of the Master Lease Premises and multiplying such quotient by 100, and Subtenant's Percentage Share shall be
determined on the basis of the number of days during such calendar year at each such percentage share. 

        4.    Security Deposit.    

        4.1  Concurrently
with Subtenant's execution of this Sublease, Subtenant shall deposit with Sublandlord the sum of Two Hundred Twenty-One Thousand One Hundred
Fifty and 00/100 Dollars ($221,150) (the "Deposit"). The Deposit shall be held by Sublandlord as security for the faithful performance by Subtenant of all the provisions of this Sublease to be
performed or observed by Subtenant. If Subtenant fails to pay rent or other sums due hereunder, or otherwise defaults with respect to any provisions of this Sublease, Sublandlord may use, apply or
retain all or any portion of the Deposit for the payment of any rent or other sum in default or for the payment of any other sum to which Sublandlord may become obligated by reason of Subtenant's
default, or to compensate Sublandlord for any loss or damage which Sublandlord may suffer thereby. If Sublandlord so uses or applies all or any portion of
the Deposit, Subtenant shall within ten (10) days after demand therefor deposit cash with Sublandlord in an amount sufficient to restore the Deposit to the full amount thereof and Subtenant's
failure to do so shall be a material breach of this Sublease. Sublandlord shall not be required to keep the Deposit separate from its general accounts. If Subtenant performs all of Subtenant's
obligations hereunder, the Deposit, or so much thereof as has not theretofore been applied by Sublandlord, shall be returned, without interest, to Subtenant (or, at Sublandlord's option, to the last
assignee, if any, of Subtenant's interest hereunder) promptly following the expiration of the Term, and after Subtenant has vacated the Subleased Premises. No trust relationship is created herein
between Sublandlord and Subtenant with respect to the Deposit. 

        4.2  In
the event that Subtenant exercises any right or option set forth in Sections 15 or 16 of this Sublease, or subleases any additional space from Sublandlord, the
Deposit shall be increased by Subtenant prior to the effective date of the sublease of the additional space by an amount equal to two month's rent for the additional space, computed using the annual
base rent of $27 per square foot. 

        4.3  In
the event that, as of December 31, 2004, (a) Subtenant is not in default hereunder, and no event exists which, with the giving of notice or the passage
of time or both, would constitute a default, and (b) Sublandlord is holding the full amount of the Deposit, then a portion of the Deposit equal to $91,201.25 shall be credited against Base Rent
due for the month of January 2005, and the remaining balance of the Deposit shall be held as a security deposit by Sublandlord. 

        5.    Use and Occupancy.    

        5.1    Use.    The Subleased Premises shall be used and occupied only for general office use and ancillary uses by
Subtenant and for no other use or purpose. Subtenant shall have access to the Subleased Premises and the parking area described in Section 14 of this Sublease 24 hours per day, seven
days per week, 52 weeks per year. 

        5.2    Shuttle.    Subtenant shall have the non-exclusive right to use the shuttle service at the Project.
The cost of the shuttle service is included in Operating Expenses. Sublandlord reserves the right to revise the shuttle service. 

        5.3    Meeting Rooms, Locker Rooms and Deck.    Subtenant shall be permitted to use the meeting rooms in the first
floor of the Building fifteen (15) events per year, free of charge, to the 

4

 

extent available, and subject to the terms of this Sublease. Subtenant shall give Sublandlord two (2) weeks prior written notice of Subtenant's desire to use such rooms, and the use shall be
subject to the Master Lease and this Sublease. Subtenant's use of the meeting rooms shall be subject to Sublandlord's right to use such rooms, and Subtenant acknowledges it can use the rooms on any
particular date only to the extent that they are available; provided that, once the rooms are reserved by Subtenant for a particular date, Sublandlord shall not have the right to use such rooms.
Subtenant's
employees shall also be permitted to use the showers and locker room facilities on the first floor of the Building, free of charge, at such times that those facilities are available to others;
provided that Sublandlord reserves the right to relocate the showers and locker rooms that are available to Subtenant; and further provided that the lockers shall be used for day use only. Subtenant
shall have the exclusive use of the deck on the fourth floor of the Building, free of charge, but subject to Sublandlord's and Landlord's right to enter such space for the same reasons that
Sublandlord or Landlord may enter the Subleased Premises. 

        5.4    Compliance with Master Lease.    

        (a)  Subtenant
agrees that it will use and occupy the Subleased Premises for general office use and ancillary uses only, and in accordance with the terms of the Master Lease,
and will not suffer to be done or omit to do any act which may result in a violation of or a default under any of the terms and conditions of the Master Lease, or render Sublandlord liable for any
damage, charge or expense thereunder. Subtenant further covenants and agrees to indemnify Sublandlord against and hold Sublandlord harmless from any claim, demand, action, proceeding, suit, liability,
loss, judgment, expense (including attorneys fees) and damages of any kind or nature whatsoever arising out of, by reason of, or resulting from, Subtenant's failure to perform or observe any of the
applicable terms and conditions of the Master Lease or this Sublease. Any other provision in this Sublease to the contrary notwithstanding, Subtenant shall pay to Sublandlord as Rent hereunder any and
all sums which Sublandlord may be required to pay the Landlord arising out of a request by Subtenant for additional Building services from Landlord (e.g. charges associated with after-hour
HVAC usage and overstandard electrical charges). 

        (b)  Subtenant
agrees that Sublandlord shall not be required to perform any of the covenants, agreements and/or obligations of Landlord under the Master Lease and, insofar as
any of the covenants, agreements and obligations of Sublandlord hereunder are required to be performed under the Master Lease by Landlord thereunder, Subtenant acknowledges and agrees that Sublandlord
shall be entitled to look to Landlord for such performance. Sublandlord agrees to use commercially reasonable efforts to cause Landlord to perform its obligations under the Master Lease. Sublandlord
shall not be responsible for any failure or interruption, for any reason whatsoever, of the services or facilities that may be appurtenant to or supplied at the Building by Landlord or otherwise,
including, without limitation, heat, air conditioning, ventilation, life-safety, water, electricity, elevator service and cleaning service, if any; and no failure to furnish, or
interruption of, any such services or facilities shall give rise to any (i) abatement, diminution or reduction of Subtenant's obligations under this Sublease, or (ii) liability on the
part of Sublandlord, except that, to the extent Sublandlord is entitled to any abatement, diminution or reduction of Sublandlord's obligation to pay rent under the Master Lease, Subtenant's rent under
this Sublease shall be proportionately abated, diminished or reduced, to the extent applicable to the Subleased Premises. 

        5.5    Signage.    Sublandlord shall reasonably cooperate with Subtenant and use commercially reasonable efforts (at
no cost to Sublandlord) to obtain signage rights for Subtenant and a listing for Subtenant in the Building's directory, provided that (a) such rights shall be subject to Landlord's consent,
(b) the location, style, color and size of such signage shall be subject to the approval of Landlord and Sublandlord, and Sublandlord agrees that its approval shall not be 

5

 

unreasonably withheld, (c) the signage shall comply with all applicable laws, regulations, and covenants, conditions and restrictions affecting the Project, and (d) notwithstanding any
of the foregoing, in no event shall any signage rights of Subtenant reduce, diminish, terminate or modify Sublandlord's signage rights with respect to any Building, the Master Lease Premises or
otherwise, and Subtenant expressly acknowledges that any rights conferred upon it to install signage shall be in addition to, and not in lieu of, Sublandlord's rights under the Master Lease. 

        5.6    Card Key System.    Sublandlord will supply Subtenant with the software to operate the existing card key system
in the Building, and with fifty (50) access cards. Subtenant shall be responsible for operating and maintaining the system throughout the Term of the Sublease, at Subtenant's cost. 

        6.    Master Lease and Sublease Terms.    

        6.1  Subtenant
acknowledges that Subtenant has reviewed and is familiar with all of the terms, agreements, covenants and conditions of the Master Lease. 

        6.2  This
Sublease is and shall be at all times subject and subordinate to the Master Lease. Additionally, Subtenant's rights under this Sublease shall be subject to the
terms of the Consent. 

        6.3  The
terms, conditions and respective obligations of Sublandlord and Subtenant to each other under this Sublease shall be the terms and conditions of the Master Lease
except for those provisions of the Master Lease which are directly contradicted by this Sublease in which event the terms of the Sublease document shall control over the Master Lease, provided,
however, that notwithstanding anything to the contrary contained in this Sublease, the following provisions of the Master Lease shall not be deemed to be incorporated herein: Sections 1, 2, 4, 5, 6,
7, 10.1, 10.2, 10.4, 10.7 (except that the statement that Landlord's costs of pursuing a reduction in Property Taxes are to be included in the definition of Property Taxes shall be incorporated
herein), 10.8, 11.2 (except to the extent provided below), 11.3, 12, 13, 16, 17, 21, 27 (except that the statement that Landlord's costs with respect to any Transportation Management Plan are to be
included in the definition of Operating Expenses shall be incorporated herein), 28, 30, 34, 36, 37, 38.11, 38.19, 38.22, 40, 41, 42, Exhibit B, Exhibit G and Exhibit I. Therefore,
for the purposes of this Sublease, wherever in the incorporated provisions of the Master Lease the word "Landlord" is used it shall be deemed to mean the Sublandlord herein and wherever in the
incorporated provisions of the Master Lease the word "Tenant" is used it shall be deemed to mean the Subtenant herein. The time limits contained in the Master Lease for the giving of notices, making
of demands or performing of any act, condition or covenant on the part of the tenant thereunder, or for the exercise by the tenant thereunder of any right, remedy or option, are changed for the
purposes of incorporation herein by reference by shortening the same in each instance by three days, so that in each instance Subtenant shall have three days less time to observe or perform hereunder
than Sublandlord has as the tenant under the Master Lease; provided that if any time limit in the Master Lease is three business days or fewer, then such time limit shall not be changed for purposes
of incorporation herein. Any non-liability, release, indemnity or hold harmless provision in the Master Lease for the benefit of Landlord that is incorporated herein by reference, shall be
deemed to inure to
the benefit of Sublandlord, Landlord, and any other person intended to be benefited by said provision, for the purpose of incorporation by reference in this Sublease. Any right of Landlord under the
Master Lease of access or inspection and any right of Landlord under the Master Lease to do work in the Master Lease premises or in the Building and any right of Landlord under the Master Lease in
respect of rules and regulations, which is incorporated herein by reference, shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other person intended to be benefited by said
provision, for the purpose of incorporation by reference in this Sublease. 

6

 

        6.4  For
the purposes of incorporation herein, the terms of the Master Lease are subject to the following additional modifications: 

        (a)  In
all provisions of the Master Lease (under the terms thereof and without regard to modifications thereof for purposes of incorporation into this Sublease) requiring
the approval or consent of Landlord, Subtenant shall be required to obtain the approval or consent of both Sublandlord and Landlord. 

        (b)  In
all provisions of the Master Lease requiring Tenant to submit, exhibit to, supply or provide Landlord with evidence, certificates, or any other matter or thing,
Subtenant shall be required to submit, exhibit to, supply or provide, as the case may be, the same to both Landlord and Sublandlord. In any such instance, Sublandlord shall determine if such evidence,
certificate or other matter or thing shall be satisfactory, in Sublandlord's reasonable discretion. 

        (c)  Sublandlord
shall have no obligation to restore or rebuild any portion of the Subleased Premises after any destruction or taking by eminent domain. Sublandlord agrees to
use commercially reasonable efforts to cause Landlord to comply with the terms of the Master Lease. 

        (d)  In
all provisions of the Master Lease requiring Tenant to designate Landlord as an additional or named insured on its insurance policy, Subtenant shall also be required
to so designate Landlord and Sublandlord as additional insureds on its insurance policy. The minimum liability limits of Subtenant's comprehensive public liability and property damage insurance (i.e.
commercial general liability insurance) shall be $5,000,000 per occurrence, or $5,000,000 combined single limit. 

        6.5  Notwithstanding
the terms of Section 6.3 above, Subtenant shall have no rights nor obligations under the following parts, Sections and Exhibits of the Master
Lease: any rights to purchase the Master Lease Premises or the Subleased Premises, any rights or options to expand, extend, renew or terminate the Master Lease or this Sublease, rights of first offer,
rights of first negotiation, rights to any tenant improvement allowance, obligations of the Landlord to install any tenant improvements, and rights to use the roof or install antennae or satellite
dishes. Subtenant shall have all other rights and obligations of Sublandlord as tenant under the Master Lease, but only to the extent that a subtenant is permitted
to obtain the benefit of such rights under the terms of the Master Lease, and to the extent they apply to the Subleased Premises. It is expressly acknowledged and agreed that Subtenant's obligations
to pay its share of operating expenses shall be as provided in Section 3.2 of this Sublease rather than as provided in the Master Lease (except to the extent Section 3.2 incorporates the
terms of the Master Lease). 

        6.6  During
the Term and for all periods subsequent thereto with respect to obligations which have arisen prior to the termination of this Sublease, Subtenant agrees to
perform and comply with, for the benefit of Sublandlord and Landlord, the obligations of Sublandlord under the Master Lease which pertains to the Subleased Premises and/or this Sublease, except for
those provisions of the Master Lease which are directly contradicted by this Sublease, in which event the terms of this Sublease document shall control over the Master Lease. 

        6.7  Sublandlord
agrees to maintain the Master Lease in full force and effect, as it pertains to the Subleased Premises, during the entire term of this Sublease, and to use
its reasonable efforts to cause Landlord to comply with or perform the obligations of Sublandlord under the Master Lease. Sublandlord agrees not to permit or take any action or inaction that would
result in any modification of the Master Lease or any partial or total termination of the Master Lease (except in connection with a casualty or condemnation) that would materially adversely affect
this Sublease or any rights of Subtenant therein, without the prior consent of Subtenant, which shall not be 

7

 

unreasonably withheld or delayed. Sublandlord agrees to provide Subtenant with a copy of any default notices from Landlord. 

        6.8    Notwithstanding the provisions of this Sublease, any obligation of Sublandlord to provide services or utilities to the Subleased
Premises or to Subtenant or to perform maintenance or repair obligations with respect to the Building or the Subleased Premises which is contained in this Sublease by the incorporation by reference of
the provisions of the Master Lease, shall be observed or performed by Sublandlord diligently using reasonable efforts to cause Landlord to observe and/or perform the same. If Sublandlord receives an
abatement of rent due to an event which is described in Section 11.2 of the Master Lease which occurs with respect to the Subleased Premises, Sublandlord shall abate the Base Rent payable under
the Subleased Premises to the extent the Affected Area covered all or a portion of the Subleased Premises. Subtenant shall have no right to abatement of rent to the extent Sublandlord receives such
abatement for a portion of the Master Lease Premises other than the Subleased Premises. 

        7.    Sub-Sublease or Assignment.    Subtenant's right to
sub-sublease the Subleased Premises or any portion thereof, or assign this Sublease, shall be subject to the consent of Sublandlord, which consent shall not be unreasonably withheld, and
to the consent of Landlord, and shall be subject to the terms of the Master Lease. In the event of a sub-sublease or assignment of this Sublease, Subtenant shall not be released and shall
remain fully and primarily liable under this Sublease. Any and all profits for such sub-subleasing or assignment, including rent paid in excess of the rent payable under this Sublease,
shall be shared equally by Sublandlord and Subtenant, but only after paying any amounts due Landlord in connection with its consent. In the event that Subtenant requests Sublandlord's consent to a
sub-sublease or assignment of this Sublease, Sublandlord shall have the right to terminate this Sublease by delivering written notice to Subtenant within thirty days after Sublandlord
receives such request and all information reasonably requested by Sublandlord, including without limitation, the name of the proposed sub-subtenant or assignee, and its business and
financial condition, unless Subtenant delivers
written notice to Sublandlord revoking the request for consent within five (5) days after Subtenant receives Sublandlord's notice. Such termination shall be effective as of the proposed
commencement date of such sub-sublease or assignment. 

        8.    Termination of Master Lease.    If for any reason the term of the Master Lease shall terminate prior to the
scheduled Expiration Date, this Sublease shall thereupon be terminated and Sublandlord shall not be liable to Subtenant by reason thereof unless (i) Subtenant shall not then be in default
hereunder beyond any applicable notice and cure period and (ii) such termination shall have been effected because of the breach or default of Sublandlord under the Master Lease or by reason of
the voluntary termination or surrender of the Master Lease by Sublandlord (except in the event of a casualty or condemnation). 

        9.    Indemnity.    Subtenant shall indemnify, defend and hold harmless Sublandlord from and against all losses,
costs, damages, expenses and liabilities, including, without limitation, reasonable attorneys' fees and disbursements, which Sublandlord may incur or pay out (including, without limitation, to the
Landlord) by reason of (i) the use or occupancy of the Subleased Premises, or any accidents, damages or injuries to persons or property occurring in, on or about the Subleased Premises (except
to the extent caused by Sublandlord's negligence or wrongful act or the negligence or wrongful act of Landlord, or their respective employees, agents or contractors), (ii) any breach or default
hereunder on Subtenant's part, (iii) any work done after the date hereof in or to the Subleased Premises except if done by Sublandlord or Landlord, (iv) the use, handling, storage or
disposal of toxic or hazardous materials or waste by Subtenant or its officers, partners, employees, agents, contractors, customers and/or invitees, or anyone else under Subtenant's control,
(v) the installation, operation, maintenance, use or removal of the Equipment, as defined in Section 17 hereof, or (vi) any negligent act or omission of Subtenant and/or its
officers, partners, employees, agents, contractors, customers and/or invitees, or any person claiming through or under Subtenant, occurring on or about the Subleased Premises, Master Lease Premises or
the Quadrant Lake Union Center. 

8

   
        10.    Limitation on Liability.    Sublandlord shall not be liable for personal injury or property damage to
Subtenant, its officers, agents, employees, invitees, guests, licensees or any other person in the Subleased Premises, regardless of how such injury or damage may be caused. Any property of Subtenant
kept or stored in the Subleased Premises shall be kept or stored at the sole risk of Subtenant. Subtenant shall hold Sublandlord harmless from any claims arising out of any personal injury or property
damage occurring in the Subleased Premises, including subrogation claims by Subtenant's insurance carrier(s), except to the extent caused by the negligence or willful misconduct of Sublandlord or its
officers, employees, agents or contractors. 

        11.    Consents.    In any instance when Sublandlord's consent or approval is required under this Sublease,
Sublandlord's refusal to consent to or approve any matter or thing shall be deemed reasonable if, among other matters, such consent or approval is required under the provisions of the Master Lease
incorporated herein by reference but has not been obtained from Landlord. 

        12.    Attorney's Fees.    If Sublandlord, Subtenant or Landlord brings an action to enforce the terms hereof or to
declare rights hereunder, the prevailing party who recovers substantially all of the damages, equitable relief or other remedy sought in any such action on trial and appeal shall be entitled to his
reasonable attorney's fees to be paid by the losing party as fixed by the Court. 

        13.    Condition of Sublease Premises.    

        13.1 Except
as provided in Sections 13.2 and 13.3 below, Sublandlord shall deliver, and Subtenant shall accept, possession of the Subleased Premises in their "AS IS"
condition as the Subleased Premises exists on the date hereof. Sublandlord shall have no obligation to furnish, render or supply any work, labor, services, materials, furniture, fixtures, equipment,
decorations or other items to make the Subleased Premises ready or suitable for Subtenant's occupancy, except as expressly provided herein. In making and executing this Sublease, Subtenant has relied
solely on such investigations, examinations and inspections as Subtenant has chosen to make or has made and has not relied on any representation or warranty concerning the Subleased Premises or the
Building, except as expressly set forth in this Sublease. Subtenant acknowledges that Sublandlord has afforded Subtenant the opportunity for full and complete investigations, examinations and
inspections of the Subleased Premises and the common areas of the Building. Subtenant acknowledges that it is not authorized to make or do any alterations or improvements in or to the Subleased
Premises except as permitted by the provisions of this Sublease and the Master Lease and that upon termination of this Sublease, Subtenant shall deliver the Subleased Premises to Sublandlord in the
condition required by the terms of the Master Lease and this Sublease. 

        13.2 Sublandlord
is in the process of separately demising the Subleased Premises, and Sublandlord agrees to finish installing the demising walls prior to the Commencement
Date, at Sublandlord's cost. Subtenant shall be solely responsible for the interior finishes of the walls, at Subtenant's cost. 

        13.3 Sublandlord
shall provide to Subtenant an allowance equal to Two Hundred Forty-Six Thousand Eight Hundred Thirty-Five and no/100 Dollars
($246,835) (i.e. five dollars ($5.00) per rentable square foot of the Subleased Premises) (the "Allowance") to cover moving costs and the cost of additional improvements, provided that the
installation of any improvements to the Subleased Premises shall be subject to the terms of this Sublease. The Allowance shall be paid (A) to the extent it is used as reimbursement for moving
expenses in connection with Subtenant's move to the Subleased Premises, within thirty (30) days after Sublandlord receives copies of invoices or receipts for such moving expenses, and/or
(B) to the extent it is used as reimbursement or payment for tenant improvement costs in the Subleased Premises, within thirty (30) days after Sublandlord receives invoices and
conditional lien releases for the tenant improvement work to the Subleased Premises (and final lien releases for any work that was paid with a previous advance), and any other item reasonably
requested by Sublandlord to ensure that the work complies with this 

9

 

Sublease. If Subtenant has not used the entire Allowance within twelve (12) months after the Commencement Date, provided that Subtenant is not in default and no condition exists, which with
the giving of notice or the passage of time or both, would constitute a default, the remaining balance of the Allowance shall be credited against the next installment or installments of Base Rent due
under this Sublease. Subtenant shall keep the Subleased Premises free from any liens arising out of any work performed, materials furnished or obligation incurred by Subtenant. 

        13.4 Notwithstanding
anything to the contrary in this Sublease, Subtenant shall have no right to construct or install any alterations in or to the Subleased Premises
("Alterations") without the prior written consent of Sublandlord, which shall not be unreasonably withheld or delayed, and the consent of Landlord (if required under the Master Lease). Subtenant shall
notify Sublandlord and Landlord not less than five (5) business days in advance of commencing construction of any Alterations so that Sublandlord and Landlord may post appropriate notices of
non-responsibility. The term "Alterations" includes any alterations, additions or improvements made by Subtenant to comply with any federal, state or local laws or regulations, including
the Americans With Disabilities Act. All Alterations will be made at Subtenant's sole cost (except as expressly provided herein) and diligently prosecuted to completion. Any contractor or other person
making any Alterations must first be approved in writing by Sublandlord and Landlord, and Sublandlord may require that all work be performed under Sublandlord's supervision. All Alterations must be
constructed (a) in a good and workman-like manner using materials of a quality comparable to those on the Subleased Premises, (b) in conformance with all relevant federal,
state and local codes, regulations and ordinances, (c) only after necessary permits, licenses and approvals have been obtained by Subtenant from appropriate governmental agencies, and
(d) in accordance with plans and specifications approved by Sublandlord and Landlord (if required by the Master Lease). Sublandlord shall have ten (10) business days to review and either
approve or disapprove plans and specifications submitted to Sublandlord by Subtenant. If, at any time prior to the Commencement Date, Sublandlord fails to respond to Subtenant within such ten business
day period, Subtenant shall have the right to send Sublandlord a second notice requesting Sublandlord to review and either approve or disapprove plans and specifications submitted to Sublandlord by
Subtenant (the "Second Notice"). The Second Notice shall include all of the documents, plans, specifications and information that was included in the first notice, shall be sent as provided in
Section 18 below, with an
additional copy to Shartsis, Friese & Ginsburg LLP, One Maritime Plaza, 18th Floor, San Francisco, CA 94111, Attention: Mary Kay Kennedy, by overnight delivery using a nationally
recognized carrier, and shall contain the following statement in full capital letters: "THIS IS THE SECOND NOTICE UNDER SECTION 13.4 OF THE SUBLEASE BETWEEN ADOBE SYSTEMS INCORPORATED AND
CUTTER & BUCK, INC. YOUR FAILURE TO RESPOND TO THIS NOTICE WITHIN TEN (10) BUSINESS DAYS SHALL RESULT IN THE TENANT IMPROVEMENTS DESCRIBED HEREIN BEING DEEMED APPROVED BY ADOBE
UNDER THE SUBLEASE." Provided that the first notice was sent in accordance with the terms of Section 18 hereof, and the Second Notice complies with the terms of this paragraph, Sublandlord
shall have ten (10) business days to respond to the Second Notice, and if Sublandlord fails to respond within such ten business day period, the tenant improvement work described in the Second
Notice shall be deemed approved by Sublandlord, subject to the following: (1) any proposed work to the structure of the Building or to the Building systems shall not be deemed approved by
Sublandlord, (2) to the extent required by the Master Lease, Landlord's approval shall be required, and (3) failure to respond to the Second Notice shall not be deemed to be a decision
by Sublandlord regarding whether or not the proposed improvements are to be removed by Subtenant at the end of the Term, and notwithstanding the other terms of this Sublease, Sublandlord reserves the
right to require their removal. The provisions of this paragraph concerning the Second Notice and the consequences of the failure of Sublandlord to respond to 

10

 

such notice are meant to apply to the initial tenant improvements and shall not apply to any request for approval of improvements after the Commencement Date. 

        13.5 Except
where precluded by terms of the Master Lease and Landlord's rights in and to any Alterations to any of the Subleased Premises, upon the expiration or sooner
termination of this Sublease, Subtenant shall, upon demand by either Sublandlord or Landlord (in accordance with its rights under the Master Lease), at Subtenant's sole cost and expense, forthwith and
with all due diligence, remove any Alterations installed by or on behalf of Subtenant (including the initial Alterations) and Subtenant shall forthwith and with all due diligence, at Subtenant's sole
cost and expense, repair and restore the Subleased Premises to their original condition, ordinary wear and tear excepted, and subject to the casualty and condemnation provisions in the Master Lease.
At Sublandlord's and/or Landlord's option, all work shall become the property of Sublandlord or Landlord. Notwithstanding the foregoing, at the written request of Subtenant, Sublandlord shall notify
Subtenant at the time of granting its consent to any Alteration whether or not Sublandlord will require removal of such Alteration at the end of the Term, but Subtenant's obligation to remove such
Alteration shall also be subject to the rights of Landlord (if any) under the Master Lease. 

        13.6 Subtenant
shall have the exclusive use of the voice/data wiring infrastructure currently in place on the fourth (4th) floor, on an as-is
basis. Subtenant shall be responsible for any required modifications to wiring in the Subleased Premises, which modifications shall be subject to the approval of Sublandlord and Landlord. 

        14.    Parking.    During the Term hereof, Subtenant and its employees shall be permitted to use all of the
on-site parking spaces in Level A of the Building parking garage, at no cost to Subtenant, but subject to the terms of the Master Lease. Sublandlord and its employees shall have no right
to park in Level A, and Sublandlord shall not grant to any third party a right to park there. Subject to Landlord's approval and any requirements of the City of Seattle, Subtenant shall have the right
to double park the stalls or
engage a valet to maximize the use of Level A for parking. In the event that Subtenant needs additional parking spaces during the Term, up to fifty (50) additional parking spaces (to the extent
Sublandlord determines they are available and not being used by Sublandlord) will be made available to Subtenant on a month-to-month basis, at the fair market rate, in a garage
at the Project. Subtenant acknowledges that the additional spaces are on a month-to-month basis and may be cancelled by either party upon thirty (30) days prior notice.
The use of the parking spaces by Subtenant and its employees and invitees shall be subject to the rules and regulations of the Building, any covenants, conditions and restrictions recorded against the
Building, and all laws and regulations. 

        15.    Option to Expand.    

        15.1 Sublandlord
hereby grants to Subtenant one option (the "Option to Expand") to expand the Subleased Premises to include the Expansion Space, but only in strict
accordance with the terms and conditions of this Section 15. The Option to Expand must be exercised by written notice to Sublandlord no later than July 1, 2004, and if not exercised as
of July 1, 2004, shall expire and terminate. 

        15.2 If
Subtenant timely exercises the Option to Expand, Subtenant shall sublease from Sublandlord, and Sublandlord shall sublease to Subtenant, commencing as of
January 1, 2005, the Expansion Space, and from and after January 1, 2005, any references in this Sublease to the Subleased Premises shall include the Expansion Space. Subtenant's
subleasing of the Expansion Space shall be on the same terms and conditions as set forth in this Sublease, except that (a) the Base Rent shall be increased to take into account the additional
rentable square feet in the Expansion Space, at the same rental rate per square foot which applies to the original Subleased Premises as set forth in Section 3.1 below, (b) the
Subtenant's Percentage Share shall for the Expansion Space shall be 2.55% in accordance with Section 3.2(e)(6) hereof, and (c) the Deposit 

11

 

shall be increased as provided in Section 4.2. Notwithstanding any other provision of this Sublease or the Master Lease, Sublandlord shall deliver, and Subtenant shall accept, the Expansion
Space as-is, as of the date that Sublandlord delivers the Expansion Space to Subtenant, and Sublandlord shall have no obligation to make any improvements to the Expansion Space. If
Sublandlord is unable to deliver the Expansion Space as of the date provided above, Sublandlord shall have no liability therefor, except that Subtenant shall have no liability to pay any rent on the
Expansion Space until it is delivered to Subtenant. Sublandlord agrees to use commercially reasonable efforts to deliver the Expansion Space to Subtenant on January 1, 2005. 

        15.3 If
Subtenant exercises the Option to Expand, Sublandlord shall prepare an amendment to this Sublease to reflect the addition of the Expansion Space, the increased in
Subtenant's Percentage Share, the increased rent, the increased Security Deposit, and any other matter reasonably required by the terms of this Sublease. 

        15.4 In
the event that Subtenant defaults hereunder (after the applicable notice and cure period), or if Subtenant fails to pay Base Rent or Additional Rent when due under
this Sublease more than twice during any calendar year of the Term (even if Subtenant timely cures such default), then the Option to
Expand shall automatically terminate, whereupon no exercise of the Option to Expand shall be of any force or effect, unless such termination is waived in writing by Sublandlord. 

        16.    Right to Sublease Additional Space.    In the event that (A) Sublandlord leases additional space under
the Master Lease pursuant to Spec Space Option No. 3 or Spec Space Option No. 4, as such terms are defined in the Master Lease, and Sublandlord elects to sublease all or any portion of
such space, and/or (B) in the event that Sublandlord elects to sublease any available space on the second floor of the Building (collectively, "New Sublease Space"), which election to lease
and/or sublease shall be at Sublandlord's sole discretion, then Sublandlord shall notify Subtenant, and Subtenant shall have seven (7) business days to notify Sublandlord that Subtenant is
interested in subleasing such space. If Subtenant so notifies Sublandlord, the parties shall have ten (10) business days to negotiate the business terms of subleasing such space. If the parties
are able to successfully negotiate such terms, the space shall be added to the Subleased Premises pursuant to an amendment to this Sublease; provided that the space shall be delivered
as-is, the sublease shall be subject to Landlord's consent, and the Deposit, Base Rent and Subtenant's Percentage Share shall all be increased to reflect the negotiated terms and
additional square footage. If Subtenant and Sublandlord are unable to agree upon such terms within such ten business day period, or if they fail to execute an amendment to this Sublease adding such
space within ten (10) business days thereafter, Sublandlord shall be free to sublease such space to any third party pursuant to any terms and conditions, and Subtenant's rights to such space
shall be forever terminated. 

        17.    Use of Roof.    

        17.1 Subtenant
desires to install an antenna or satellite dish on the roof of the Building, and acknowledges that the use of the roof by Subtenant is subject to Landlord's
prior consent and to the terms of this Section 17. During the Term hereof, and subject to the consent of Landlord, Subtenant shall have the nonexclusive right to install on the roof of the
Building one (1) antenna or satellite dish, in a location approved by Landlord and Sublandlord, and with a height and weight approved by Landlord and Sublandlord. The antenna or satellite dish
shall be enclosed by a screen, and the antenna or dish, screen and any connecting lines or cables thereto from the Premises (which shall all be subject to Landlord's and Sublandlord's consent) shall
be referred to herein collectively as the "Equipment." Subtenant shall not penetrate the roof in connection with any installation or reinstallation of the Equipment without Landlord's and
Sublandlord's prior written consent. The plans and specifications for all the Equipment shall be delivered by Subtenant to Sublandlord for its review and approval, and such plans shall include,
without limitation, the proposed location of the Equipment. Sublandlord shall also have the right to approve all 

12

 

contractors and subcontractors which shall perform such work. Subtenant shall be responsible for any damage to the roof, conduit systems or other portions of the Building or Building systems as a
result of Subtenant's installation, maintenance and/or removal of the Equipment. Subtenant shall not do anything to the roof that adversely affects in any way the roof or the roof warranty. Subtenant,
at its sole cost and expense, shall comply with all laws and regulations regarding the installation, construction, operation, maintenance and removal of the Equipment and shall be solely responsible
for obtaining and maintaining in force all permits, licenses and approvals necessary for such operations. Subtenant shall be responsible for and promptly shall pay all taxes, assessments, charges,
fees and other governmental impositions levied or assessed on the Equipment or based on the operation thereof.
Subtenant shall maintain the Equipment in good condition and repair, at Subtenant's sole cost and expense. Subtenant's rights hereunder are personal to Cutter & Buck, Inc. 

        17.2 Sublandlord
may require Subtenant, at Subtenant's sole cost and expense, to relocate the Equipment during the Term to a location approved by Subtenant, which approval
shall not be unreasonably withheld, conditioned or delayed. Subtenant shall not change the location of, or alter or install additional Equipment or paint any of the other Equipment without
Sublandlord's prior written consent. 

        17.3 Operation
of the Equipment shall not interfere in any manner with equipment systems or utility systems of other tenants of the Project, including without limitation,
telephones, dictation equipment, lighting, heat and air conditioning, computers, electrical systems and elevators. If operation of the Equipment causes such interference, as determined by Landlord or
Sublandlord, Subtenant immediately shall suspend operation of the Equipment until Subtenant eliminates such interference. 

        17.4 Subtenant
shall provide evidence satisfactory to Sublandlord that Subtenant's property and liability insurance policies required under this Sublease include coverage
for the Equipment and any claim, loss, damage, or liability relating to the Equipment. 

        17.5 Sublandlord
shall have no responsibility or liability whatsoever relating to (i) maintenance or repair of the Equipment, (ii) damage to the Equipment;
(iii) damage to persons or property relating to the Equipment or the operation thereof; or (iv) interference with use of the Equipment arising out of utility interruption or any other
cause. Subtenant shall use the Equipment solely for Subtenant's operations associated with the Subleased Premises. 

        17.6 Subtenant
shall, at Subtenant's sole cost and expense, remove such portions of the Equipment as Sublandlord may designate upon the expiration or earlier termination of
this Sublease, and restore the affected areas to their condition prior to installation of the Equipment. 

        18.    Notices:    Any notice by either party to the other required, permitted or provided for herein shall be valid
only if in writing and shall be deemed to be duly given only if (a) delivered personally, or (b) sent by means of Federal Express, UPS Next Day Air or another reputable express mail
delivery service guaranteeing next day delivery, or (c) sent by United States Certified or registered mail, return receipt requested, addressed (i) if to Sublandlord, at the following
addresses: 

	 	 	Adobe Systems Incorporated

345 Park Avenue

San Jose, CA 95110

Attn: Director of Corporate Real Estate
	 	 	 

13

 

	with a copy to:	 	Adobe Systems Incorporated

345 Park Avenue

San Jose, CA 95110

Attn: General Counsel
	 	 	 
	 	 	and to:
	 	 	 
	 	 	Adobe Systems Incorporated

801 North 34th Street

Seattle, WA 98103

Attention: Seattle Facilities Manager
	 	 	 
	and (ii) if the Subtenant, at the Subleased Premises and the following addresses:
	 	 	 
	 	 	Cutter & Buck Inc.

2701 First Avenue, Suite 500

Seattle, WA 98121

Attn: Jon Runkel
	 	 	 
	with a copy to:	 	Lane Powell Spears Lubersky

1420 Fifth Avenue, Suite 4100

Seattle, WA 98101

Attn: Michael E. Morgan

or
at such other address for either party as that party may designate by notice to the other. A notice shall be deemed given and effective, if delivered personally, upon hand delivery thereof (unless
such delivery takes place after hours or on a holiday or weekend, in which event the notice shall be deemed given on the next succeeding business day), if sent via overnight courier, or if mailed by
United States certified or registered mail, upon receipt, as indicated on the return receipt. 

        19.    Brokers.    Subtenant represents that it has dealt directly with and only with Insignia Kidder
Mathews, Inc. ("Subtenant's Broker"), as a broker in connection with this Sublease. Sublandlord represents that it has dealt directly with and only with Flinn Ferguson ("Sublandlord's Broker"),
as a
broker in connection with this Sublease. Sublandlord shall indemnify and hold Subtenant harmless from all claims of any brokers other than Subtenant's Broker and Sublandlord's Broker claiming to have
represented Sublandlord in connection with this Sublease. Subtenant shall indemnify and hold Sublandlord harmless from all claims of any brokers other than Subtenant's Broker and Sublandlord's Broker
claiming to have represented Subtenant in connection with this Sublease. Sublandlord shall be responsible for the payment of a brokerage commission to Sublandlord's Broker in connection with this
Sublease pursuant to a separate agreement, and Sublandlord's Broker shall be responsible for the payment of a brokerage commission to Subtenant's Broker in the amount of $5.00 per rentable square foot
of the Subleased Premises. 

        20.    Transfer by Sublandlord.    In the event of the assignment by Sublandlord of all of its interest as a tenant
under the Master Lease, Sublandlord shall be and is hereby entirely free and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Sublease
arising out of any act, occurrence, or omission occurring after the consummation of such assignment, provided that the assignee at such assignment shall have assumed and agreed to carry out any and
all of the covenants and obligations of the Sublandlord under this Sublease. Sublandlord agrees to transfer to any assignee of its interest as tenant under the Master Lease the unapplied balance of
the Security Deposit held by Sublandlord. 

14

 

        21.    Complete Agreement.    There are no representations, warranties, agreements, arrangements or understandings,
oral or written, between the parties or their representatives relating to the subject matter of this Sublease which are not fully expressed in this Sublease. This Sublease cannot be changed or
terminated nor may any of its provisions be waived orally or in any manner other than by a written agreement executed by both parties. 

        22.    Interpretation.    Irrespective of the place of execution or performance, this Sublease shall be governed by
and construed in accordance with the laws of the State of Washington. If any provision of this Sublease or the application thereof to any person or circumstance shall, for any reason and to any
extent, be invalid or unenforceable, the remainder of this Sublease and the application of that provision to other persons or circumstances shall not be affected but rather shall be enforced to the
extent permitted by law. The table of contents, captions, headings and titles, if any, in this Sublease are solely for convenience of reference and shall not affect its interpretation. This Sublease
shall be construed without regard to any presumption or other rule requiring construction against the party causing this Sublease or any part thereof to be drafted. If any words or phrases in this
Sublease shall have been stricken out or otherwise eliminated, whether or not any other words or phrases have been added, this Sublease shall be construed as if the words or phrases so stricken out or
otherwise eliminated were never included in this Sublease and no implication or inference shall be drawn from the fact that said words or phrases were so stricken out or otherwise eliminated. Each
covenant, agreement, obligation or other provision of this Sublease shall be deemed and construed as a separate and independent covenant of the party bound by, undertaking or making same, not
dependent on any other provision of this Sublease unless otherwise expressly provided. All terms and words used in this Sublease, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may require. The word "person" as used in this Sublease shall mean a
natural person or persons, a partnership, a corporation or any other form of business or legal association or entity. 

        23.    Counterparts.    This Sublease may be executed in separate counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same instrument. This Sublease shall be fully executed when each party whose signature is required has signed and delivered to each of
the parties at least one counterpart, even though no single counterpart contains the signatures of all parties hereto. 

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

	 	 	SUBLANDLORD:
	 	 	 	 
	 	 	ADOBE SYSTEMS INCORPORATED
	 	 	 	 
	 	 	By:	

	 	 	Print Name:	

	 	 	Title:	

	 	 	 	 
	 	 	 	 
	 	 	SUBTENANT:
	 	 	 	 
	 	 	CUTTER & BUCK, INC.
	 	 	 	 
	 	 	By:	

	 	 	Print Name:	

	 	 	Title:	

15

 
 

EXHIBIT A
  
  Original Subleased Premises    

 
 

EXHIBIT B
  
  Additional Premises    

 
 
 

EXHIBIT B
  
  Approximate Overview Of The Second Floor    

2

 
 

EXHIBIT C
  
  Expansion Space    

 
 
 

EXHIBIT C
  
  Approximate Overview Of The Second Floor    

2

 
 

EXHIBIT D
  
  Form of Consent to Sublease    

CONSENT TO SUBLEASE  

	RE:	 	Quadrant Lake Union Center
	 	 	Landlord:    BEDFORD PROPERTY INVESTORS, INC.
	 	 	Tenant:    Adobe Systems Incorporated
	 	 	Premises:    Plaza Building and the Adobe Building (Buildings 1 & 2)
	 	 	Sublet Premises: Floor 4 and a portion of Floor 2 of Building 2
	 	 	Date of Master Lease: October 31, 1996
	 	 	Proposed Subtenant: Cutter & Buck, Inc.

Dear
Tenant: 

        Pursuant
to the terms of your lease ("Master Lease") covering the above-captioned Premises, as said Master Lease may have been amended to
the date hereof, you have requested the Landlord's consent to a sublease (the "Sublease") to the above-captioned Master Lease, a true, correct and
complete copy of which Tenant and Subtenant warrant is attached hereto as Exhibit A. 

        Landlord
hereby grants its consent to the Sublease upon the following terms and conditions: 

        1.    The
Sublease is subject and subordinate to the Master Lease and to all of its terms, covenants, provisions and agreements, and to all of the terms and provisions of this
Consent to Sublease ("Consent"). Subtenant shall not do or permit anything to be done in or around the Sublet Premises that would violate any provisions
of the Master Lease or this Consent. Subtenant and Tenant agree that this Consent is given solely for the purpose of allowing Tenant to sublease the Sublet Premises and to specify the terms and
conditions under which Tenant may do so. 

        2.    The
Subtenant shall perform faithfully and be bound by all of the terms, covenants, conditions, provisions and agreements of the Master Lease, for the period covered by
the Sublease and to the extent of the Sublet Premises, except payment of Rent shall be paid as provided in the Sublease and, subject to Section 4 below, shall be paid directly to Tenant. In the
event that Subtenant shall fail to abide by the terms of the Master Lease, it shall be deemed a default by Tenant and Subtenant under the Master Lease entitling Landlord to exercise all of its rights
and remedies under the Master Lease as against Tenant and Subtenant. 

        3.    Neither
the Sublease nor this Consent shall: 

        a.    release
or discharge Tenant from any liability, whether past, present or future, under the Master Lease; or 

        b.    operate
to obligate Landlord to any of the terms, covenants or conditions of the Sublease as between Tenant and Subtenant and Landlord shall not be bound thereby; or 

        c.    be
construed as a consent to or approval or ratification of any particular provision of the Sublease, it being agreed that Landlord has not and will not review or pass
upon any of the provisions of the Sublease and that Landlord shall not be bound or estopped by any provision contained in the Sublease; 

        d.    operate
to extend the term of the Master Lease beyond its present expiration date, notwithstanding the fact that the Sublease may purport to be for a longer term; or 

        e.    be
construed to modify, waive or affect any of the terms, conditions, provisions or agreements of the Master Lease, or to waive any breach thereof, or any of Landlord's
rights thereunder, or to enlarge or increase Landlord's obligations thereunder, or to diminish or decrease Tenant's obligations thereunder; or 

 

        f.      allow
Subtenant to utilize the Sublet Premises for any purpose other than the use allowed under the Master Lease; or 

        g.    be
construed as a consent by us to any further subletting either by Tenant or by the Subtenant or to any assignment by Tenant of the Master Lease or assignment by the
Subtenant of the Sublease, whether or not the Sublease purports to permit the same and, without limiting the generality of the foregoing, both Tenant and the Subtenant agree that the Subtenant has no
right whatsoever to assign, mortgage or encumber the Sublease nor to sublet any portion of the Sublet Premises or permit any portion of the Sublet Premises to be used or occupied by any other party. 

        4.    In
the event of Tenant's default under the provisions of the Master Lease, the rent and any other charges due from the Subtenant under the Sublease (the
"Sublease Payments") shall be, at the option of Landlord, deemed assigned to Landlord and Landlord shall have the right, following such default, at any
time at Landlord's option, to give written notice of such assignment to the Subtenant. Upon Subtenant's receipt of such notice Subtenant shall make all Sublease Payments due thereafter directly to
Landlord, without liability to Tenant for making such payments to Landlord rather than to the Tenant. Landlord shall credit Tenant with any Sublease Payments received by Landlord under such assignment
but the acceptance of any Sublease Payments from the Subtenant as the result of any such default shall in no manner whatsoever be deemed an attornment by the Subtenant to Landlord in the absence of a
specific written agreement signed by Landlord and Subtenant to such an effect, or serve to release Tenant from any liability under the terms, covenants, conditions, provisions or agreements of the
Master Lease or this Consent. In the event that Landlord does not elect to have Subtenant attorn to it as specified above, Landlord shall have all rights and remedies as provided under the Master
Lease as against Subtenant in the event of any default under the Master Lease, including without limitation the right to regain possession of the Sublet Premises. 

        5.    Both
Tenant and Subtenant shall be liable for the payment of all bills rendered by Landlord for charges incurred by the Subtenant for special services and materials
supplied to the Subtenant. In the event of any default by Tenant or Subtenant in the full performance and observance of their respective obligations under this Consent, such default may, at Landlord's
option, be deemed a default under the terms of the Master Lease, entitling Landlord to exercise all rights and remedies contained in the Master Lease with respect to such default, as well as any other
rights or remedies available to Landlord under this Consent, at law or in equity, by statute or otherwise, with respect to such default. 

        6.    The
term of the Sublease shall expire and come to an end on its expiration date or any premature termination date thereof, but in any event no later than concurrently
with the expiration date of the Master Lease or any premature termination of the Master Lease (whether by consent or other right, now or hereafter agreed to by Landlord and Tenant, or by operation of
law at Landlord's option in the event of a default by Tenant). In the event of an early termination of the Lease, at Landlord's election in its sole and subjective discretion, the Sublease shall not
terminates and shall extend beyond the date of termination of the Lease. In such event, Subtenant shall sign an attornment agreement in a form and content acceptable to Landlord pursuant to which
Subtenant confirms that it is thereafter in privity of contract with Landlord and all obligations owed to Tenant under the Sublease shall become obligations owed to Landlord for the balance of the
Term of the Sublease. 

        7.    Tenant
hereby warrants that all of the terms and provisions of the Master Lease are in full force and effect and that there are no defaults (or matters that with the
passage of time or the giving of notice, or both, would constitute a default) by Landlord or Tenant under the Master Lease. In the event of a conflict between the provisions of the (i) Master
Lease and the Sublease, the provisions of the Master Lease shall prevail, and (ii) this Consent and the Master Lease or Sublease, the provisions of this Consent shall prevail. 

        8.    This
Consent is not assignable, nor shall this Consent be a consent to any amendment or modification of the Sublease, without Landlord's prior written consent. 

2

 

        9.    Tenant
and Subtenant covenant and agree that, under no circumstances shall Landlord be liable for any brokerage commission or other charge or expense in connection with
the Sublease and Tenant and Subtenant both agree to indemnify, defend and hold Landlord harmless from and against same and against any cost or expense (including, but not limited to, attorneys' fees)
incurred by Landlord in resisting any claim for any such brokerage commission. 

        10.  Tenant
and Subtenant understand and acknowledge that Landlord's consent hereto is not a consent to any improvement or alteration or work to be or being performed in the
Premises, that Landlord's consent must be separately sought if and to the extent provided in the Master Lease. 

        11.  Tenant
agrees to abide by the terms of the Master Lease as the same contemplates a sharing with Landlord of "bonus" or "key" rent received by Tenant in excess of the
minimum rent due Landlord under the Master Lease. 

        12.  Tenant
and Subtenant agree that the terms and provisions of the Sublease shall not, without the prior written consent of Landlord, be amended or modified. 

        13.  This
Consent constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and shall not be operative or binding unless and until
executed by all parties hereto. This Consent may not be modified, altered, amended or changed except by an agreement in writing signed by all parties hereto. This Consent for all purposes shall be
construed in accordance with the laws of the state in which the Premises are located. The terms and provisions of this Consent shall be binding upon and inure to the benefit of the parties hereto and
to the successors and assigns of Landlord and, to the extent approved in writing by Landlord, the successors and assigns of Tenant and Subtenant. 

        The
execution of a copy of this Consent by Tenant and the Subtenant shall indicate the joint and several confirmation by Tenant and Subtenant of the foregoing conditions and of Tenant's
and Subtenant's agreement to be bound thereby and shall constitute Subtenant's acknowledgment it has received a copy of the Master Lease from Tenant. 

	Very truly yours,	 	 	 
	 	 	 	 	 
	 BEDFORD PROPERTY INVESTORS, INC.,

a Maryland corporation	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
	 	 	 
	Its:	 	 	 	 
	 	
	 	 	 
	Date:	 	, 2001	 	 
	 	
	 	 	 
	 	 	 	 	 

	CONFIRMED AND AGREED:	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	"Tenant"	 	 	"Subtenant"	 
	 	 	 	 	 	 	 	 	 
	By:	 	 	 	 	By:	 	 	 
	 	 	
	 	 	 	

	Name:	 	 	 	 	Name:	 	 	 
	 	 	
	 	 	 	

	Title:	 	 	 	 	Title:	 	 	 
	 	 	
	 	 	 	

	Date:	 	 	, 2001	 	Date:	 	 	, 2001
	 	 	
	 	 	 	 	
	 

3

QuickLinks

Exhibit 10.22

SUBLEASE

EXHIBIT A Original Subleased Premises

EXHIBIT B Additional Premises

EXHIBIT B Approximate Overview Of The Second Floor

EXHIBIT C Expansion Space

EXHIBIT C Approximate Overview Of The Second Floor

EXHIBIT D Form of Consent to SubleaseQuickLinks
 -- Click here to rapidly navigate through this document

INDUSTRIAL LEASE  

[Single Tenant - Triple Net]  

 BETWEEN  

 ZELMAN RENTON, LLC,  

 LANDLORD  

 AND  

 CUTTER & BUCK, INC.,  

 TENANT  

 
  
 

    TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	1.	 	BASIC LEASE TERMS	 	1
	2.	 	PREMISES AND COMMON AREAS	 	2
	3.	 	TERM	 	3
	4.	 	POSSESSION	 	3
	5.	 	RENT	 	4
	6.	 	OPERATING EXPENSES	 	5
	7.	 	SECURITY DEPOSIT	 	7
	8.	 	USE	 	7
	9.	 	NOTICES	 	8
	10.	 	BROKERS	 	9
	11.	 	SURRENDER; HOLDING OVER	 	9
	12.	 	TAXES	 	9
	13.	 	ALTERATIONS	 	10
	14.	 	REPAIRS	 	12
	15.	 	LIENS	 	13
	16.	 	ENTRY BY LANDLORD	 	14
	17.	 	UTILITIES AND SERVICES	 	14
	18.	 	ASSUMPTION OF RISK AND INDEMNIFICATION	 	15
	19.	 	INSURANCE	 	16
	20.	 	DAMAGE OR DESTRUCTION	 	18
	21.	 	EMINENT DOMAIN	 	20
	22.	 	DEFAULTS AND REMEDIES	 	20
	23.	 	LANDLORD'S DEFAULT	 	23
	24.	 	ASSIGNMENT AND SUBLETTING	 	23
	25.	 	SUBORDINATION	 	26
	26.	 	ESTOPPEL CERTIFICATE	 	27
	27.	 	EASEMENTS	 	27
	28.	 	RULES AND REGULATIONS	 	27
	29.	 	MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS	 	27
	30.	 	DEFINITION OF LANDLORD	 	28
	31.	 	WAIVER	 	28
	32.	 	PARKING	 	28
	33.	 	FORCE MAJEURE	 	29
	34.	 	SIGNS	 	29
	35.	 	LIMITATION ON LIABILITY	 	29
	36.	 	FINANCIAL STATEMENTS	 	30
	37.	 	QUIET ENJOYMENT	 	30
	38.	 	AUCTIONS	 	30
	39.	 	MISCELLANEOUS	 	30
	40.	 	EXECUTION OF LEASE	 	31

	EXHIBITS:	 	 
	A-I	 	Site Plan Showing Premises	 	 
	A-II	 	Description of Plans for the Building	 	 
	B	 	Adjustments to Monthly Base Rent	 	 
	C	 	Work Letter Agreement	 	 
	D	 	Notice of Lease Term Dates and Tenant's Percentage	 	 
	E	 	Definition of Operating Expenses	 	 
	F	 	Estoppel Certificate	 	 
	G	 	Rules and Regulations	 	 
	H	 	Hazardous Materials Questionnaire	 	 

i

 
 

INDUSTRIAL LEASE
  [Single Tenant - Triple Net]    
  

        This INDUSTRIAL LEASE ("Lease") is entered into as of the 16th day of May, 2001, by and between ZELMAN RENTON, LLC, a Delaware limited liability
company ("Landlord"), and CUTTER & BUCK, INC., a Washington corporation ("Tenant"). 

        Landlord
and Tenant previously entered into that certain Industrial Lease [Single Tenant-Triple Net] dated May 27, 1999, amended by that certain First
Amendment to Lease (the "First Amendment") dated October 6, 1999, and that certain Second Amendment to Industrial Lease dated concurrently herewith (collectively, the "Existing Lease"),
pursuant to which Landlord currently leases to Tenant that certain building located at 4001 Oakesdale Avenue SW, containing approximately 170,500 square feet (the "Existing Building"), more
particularly described in the Existing Lease. Landlord and Tenant hereby acknowledge and agree that Tenant has exercised its Option to Extend and Expansion Option under Paragraphs 41 and 42 of
the Addendum attached to the Existing Lease, respectively. 

        Concurrently
with the execution of this Lease, Tenant has entered into an office lease (the "Office Lease") covering that certain office space (the "Office Space") more particularly
described in the Office Lease. 

1.    BASIC LEASE TERMS.    For purposes of this Lease, the following terms have the following definitions and meanings: 

        (a)    Landlord's Address    (For Notices): 

c/o
Zelman Development Co., 707 Wilshire Blvd., Suite 3036,

Los Angeles, CA 90017 Attention: Paul Casey 

or
such other place as Landlord may from time to time designate by notice to Tenant. 

        (b)    Tenant's Address    (For Notices): 

Cutter
& Buck, Inc., 2701 First Avenue, Suite 500, Seattle, Washington 98121

Attention: Vice President—Operations 

With a copy to: Cutter & Buck, Inc., 2701 First Avenue, Suite 500, Seattle, Washington 98121

Attention: Chief Financial Officer 

or
such other place as Tenant may from time to time designate by notice to Landlord. 

        (c)    Development:    The parcel(s) of real property commonly known as Oakesdale Business Campus and located in the
City of Renton (the "City"), County of King (the "County"), State of Washington ("State"), as shown on the site plan attached hereto as Exhibit "A-1". 

        (d)    Premises:    That certain building (the "Building") located at 4051 Oakesdale Avenue SW, which
Building will contain approximately 234,489 square feet. The Premises are more particularly depicted on the Site Plan shown on Exhibit "A-I" and
the base specifications and plans for the Building are more particularly described on Exhibit "A-II". 

        (e)    Tenant's Percentage:    The square footage of the Building as compared to the square footage of all buildings
in the Development. The square footage of the Building will be determined as described on Exhibit "B". 

        (f)    Term:    Approximately Ten (10) years and Two (2) months. 

        (g)    Estimated Commencement Date/Estimated Rent Commencement Date:    October 1, 2001. 

        (h)    Expiration Date:    November 30, 2011. 

        (i)    Commencement Date/Rent Commencement Date:    Commencement Date - The date on which the Term of this Lease will
commence as determined in accordance with the provisions of Exhibit "C", subject to the terms and conditions of Paragraph 24 below; Rent
Commencement Date— 

 

The date on which Monthly Base Rent (defined in Paragraph 5 below) will commence as determined in accordance with the terms and conditions of Paragraph 5(a) below. 

        (j)    Initial Monthly Base Rent:    $335 per square foot of the Building per month, plus an additional
$65 per square foot of office space within the Building per month, subject to adjustment as described on Exhibit "B" and as otherwise provided in
this Lease. By way of example, if the Building contains 234,489 square feet, of which 10,000 square feet comprise office space, the Initial Monthly Base Rent shall be equal to the sum of (A) $.335 X
234,489 (i.e., $78,553.82) plus (B) $.65 X 10,000 (i.e., $6,500.00), for a total Initial Monthly Base Rent of $85,053.82. 

        (k)    Security Deposit:    None 

        (l)    Tenant Improvements:    All tenant improvements installed or to be installed by Landlord or Tenant within the
Premises to prepare the Premises for occupancy pursuant to the terms of the Work Letter Agreement attached hereto as Exhibit "C". 

        (m)    Permitted Use:    Labeling, distribution, light manufacturing and warehousing of non-Hazardous Materials and
related office uses and no other use without the express written consent of Landlord, which consent Landlord may withhold in its reasonable discretion. 

        (n)    Broker(s):    Kidder, Mathews & Segner 

        (o)    Guarantor(s):    None 

        (p)    Interest Rate:    Ten percent (10%) per annum 

        (q)    Parking:    Not less than Two Hundred Twenty-Eight (228) unreserved, in-common spaces within 150 feet of the
Building as provided in Paragraph 32 hereof. 

        (r)    Exhibits:    A-I through H, inclusive, which Exhibits are attached to this Lease and incorporated herein by
this reference. 

        (s)    Addendum Paragraph:    41, which Addendum Paragraph is attached to this Lease and incorporated herein by this
reference. 

        This
Paragraph 1 represents a summary of the basic terms and definitions of this Lease. In the event of any inconsistency between the terms contained in this Paragraph 1 and any specific
provision of this Lease, the terms of the more specific provision shall prevail. 

2.    PREMISES AND COMMON AREAS    

        (a)    Premises.    Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises as improved
or to be improved with the Tenant Improvements described in the Work Letter Agreement, a copy of which is attached hereto as Exhibit "C". 

        (b)    Mutual Covenants.    Landlord and Tenant agree that the letting and hiring of the Premises is upon and subject
to the terms, covenants and conditions contained in this Lease and each party covenants as a material part of the consideration for this Lease to keep and perform their respective obligations under
this Lease. 

        (c)    Tenant's Use of Common Areas.    During the Term of this Lease, Tenant shall have the nonexclusive right to use
in common with Landlord and all persons, firms and corporations conducting business in the Development and their respective customers, guests, licensees, invitees, subtenants, employees and agents
(collectively, "Development Occupants"), subject to the terms of this Lease, the Rules and Regulations referenced in Paragraph 28 below and all covenants, conditions and restrictions now or hereafter
affecting the Development (provided Tenant's use of the Premises as contemplated herein is not materially and adversely impacted), the following common areas of the Development (collectively, the
"Common Areas"): the parking facilities of the Development which serve the 

2

 

Building, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways, landscaped areas, and similar areas and facilities situated within the Development and
appurtenant to the Building which are not reserved for the exclusive use of any Development Occupants. If Landlord hereafter grants reserved parking to any other Development Occupants, then Tenant may
demand that Landlord grant to Tenant substantially similar reserved parking rights for the Premises and any other space leased by Tenant pursuant to this Lease. 

        (d)    Landlord's Reservation of Rights.    Provided Tenant's use of and access to the Premises is not interfered with
in an unreasonable manner, Landlord reserves for itself and for all other owner(s) and operator(s) of the Common Areas and the balance of the Development, the right from time to time to: (i) make
changes to the design and layout of the Development, including, without limitation, changes to buildings, driveways, entrances, loading and unloading areas, direction of traffic, landscaped areas and
walkways, parking spaces and parking areas; and (ii) use or close temporarily the Common Areas, and/or other portions of the Development while engaged in making improvements, repairs or alterations to
the Building, the Development, or any portion thereof. 

3.    TERM.    The term of this Lease ("Term") will be for the approximate period designated in Subparagraph 1(f), commence on the
Commencement Date designated in Subparagraph 1(i), and end on the Expiration Date designated in Subparagraph 1(h) unless the Term of this Lease is extended pursuant to any provision of this Lease or
written agreement of the parties. Each consecutive twelve (12) month period of the Term of this Lease, commencing on the Commencement Date, will be referred to herein as a "Lease Year". Landlord's
Notice of Lease Term Dates ("Notice"), in the form of Exhibit "D" attached hereto, will confirm the Commencement Date and the date upon which the Term
of this Lease shall end, and will be delivered to Tenant after Landlord delivers possession of the C&B Premises (defined in Paragraph 4(a) below) to Tenant and a punch-list has been prepared. 

4.    POSSESSION    

        (a)    Delivery of Possession.    Landlord agrees to deliver possession of the "C&B Premises" and the "Subleased
Premises" (which together constitute the Premises under this Lease) to Tenant in accordance with the terms of the Work Letter Agreement attached hereto as Exhibit
"C". For purposes of this Lease, the "C&B Premises" shall be defined as all portions of the Building which are not the Subleased Premises and the "Subleased Premises" shall be
defined as all portions of the Building subject to any Early Sublease (defined in Paragraph 24(l) below). Notwithstanding the foregoing and except as provided in Subparagraph 4(c) below,
Landlord will not be obligated to make any portion of the Premises available to Tenant until Landlord has received from Tenant all of the following: (i) a copy of this Lease fully executed by
Tenant; (ii) the first installment of Monthly Base Rent on the portion of the Premises to be made available (as contemplated in Paragraph 5(a) below); (iii) executed copies of
policies of insurance or certificates thereof as required under Paragraph 19 of this Lease, (iv) copies of all governmental permits and authorizations, if any, required in connection
with Tenant's operation of its business within the Premises; and (v) if Tenant is a corporation or partnership, such evidence of due formation, valid existence and authority as Landlord may
reasonably require, which may include, without limitation, a certificate of good standing, certificate of secretary, articles of incorporation, statement of partnership, or other similar
documentation. 

        (b)    Condition of Premises.    Thirty (30) days following the Rent Commencement Date and in accordance with the Work
Letter Agreement attached hereto as Exhibit "C", Landlord and Tenant will jointly conduct a walk-through inspection of the C&B Premises and will jointly
prepare a punch-list ("Punch-List") of items required to be installed by Landlord under the Work Letter Agreement which require finishing or correction. The Punch-List will not include any items of
damage to the C&B Premises caused by Tenant's move-in or early entry, if permitted, which damage will be corrected or repaired by Landlord, at Tenant's expense or, at Landlord's election, by Tenant,
at Tenant's expense. Other than
latent defects of which Landlord is notified within one (1) year after the Rent Commencement Date, Landlord's obligations under Paragraph 14 of this Lease, and the items specified 

3

 

in the Punch-List, by taking possession of the C&B Premises, Tenant will be deemed to have accepted the C&B Premises in its condition on the date of delivery of possession, subject to all applicable
zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use and occupancy of the C&B Premises and to have acknowledged that the Tenant Improvements have been
installed as required by the Work Letter Agreement and that there are no additional items needing work or repair by Landlord. Landlord will cause all items in the Punch-List to be repaired or
corrected within thirty (30) days following the preparation of the Punch-List or as soon as practicable after the preparation of the Punch-List. Tenant acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty with respect to the Premises, the Development or any portions thereof or with respect to the suitability of same for the conduct of Tenant's
business. The foregoing inspection of the C&B Premises may hereinafter be referred to as the "Inspection Process." Landlord and Tenant acknowledge and agree that the Inspection Process shall be
applicable to each portion of the Subleased Premises as such portions are turned over to Tenant and the respective subtenants thereof in accordance with the terms of this Lease. 

        (c)    Early Entry.    Landlord hereby provides Tenant notice of the substantial completion of the Building shell.
Tenant may elect to enter upon the Premises forty-five (45) days prior to the Rent Commencement Date in order to install communications cable, fixtures and racking and the like, at Tenant's sole cost
and expense (collectively, "Tenant's Work"). Any such entry by Tenant for the purpose of Tenant's Work will be subject to the following conditions: (i) Tenant, together with its employees,
agents, independent contractors, suppliers and any other personnel under Tenant's control ("Tenant's Personnel") entering the Premises, will cooperate with Landlord and Landlord's general contractor;
(ii) Tenant agrees that any such early entry is subject to all of the terms and conditions of the Lease except for those relating to the payment of Rent and other monetary obligations, which
provisions will become applicable in accordance with the terms of this Lease; (iii) Prior to any entry upon the Premises by Tenant or Tenant's Personnel, Tenant agrees to pay for and provide to
Landlord certificates evidencing the existence and amounts of liability insurance carried by Tenant, which coverage must comply with the provisions of this Lease relating to insurance;
(iv) Tenant and Tenant's Personnel agree to comply with all applicable laws, regulations, permits and other approvals required to perform Tenant's Work or by the early entry on the Premises by
Tenant and Tenant's Personnel; (v) Tenant agrees to indemnify, protect, defend and save Landlord harmless from and against any and all liens, liabilities, losses, damages, costs, expenses,
demands, actions, causes of action and claims (including, without limitation, attorneys' fees and legal costs) arising out of the early entry, use, construction, or occupancy of the Premises by Tenant
or Tenant's Personnel; and (vi) Tenant shall have paid to Landlord the first full monthly installment of Monthly Base Rent on the portion of the Premises to which Tenant desires early entry.
If, in Landlord's reasonable judgment, Tenant's Personnel and/or the work that is being performed by Tenant's Personnel interferes with Landlord's construction of the Tenant Improvements, or
detrimentally affects Landlord's ability to comply with its commitments for completing its improvements on the Premises or cause labor difficulties, Landlord will have the right to order Tenant's
early entry to cease in the event Tenant has not taken action to remedy such interference within forty-eight (48) hours following Landlord's notice to Tenant of the existence of the same, and if
Landlord so requires in connection therewith because such items are interfering with Landlord's Work, Tenant agrees to cause Tenant's Personnel to remove all tools, equipment and materials from the
Premises. 

5.    RENT    

        (a)    Monthly Base Rent.    Tenant agrees to pay Landlord the Monthly Base Rent for the entire Premises (subject to
adjustment as hereinafter provided) in advance on the first day of each calendar month during the Term without prior notice or demand, except that Tenant agrees to pay to Landlord the Monthly Base
Rent on the respective portions of the Premises made available to Tenant for the first full month of the Term (that is, the first full month immediately following the Rent 

4

 

Commencement Date) on the earlier of being granted access thereto or the Rent Commencement Date. For purposes of this Lease, the "Rent Commencement Date" shall be deemed to be the earlier of
October 1, 2001 or the date Tenant commences the operation of its business within any portion of the C&B Premises. If the Term of this Lease commences or ends on a day other than the first day
of a calendar month, then the rent for such period will be prorated in the proportion that the number of days this Lease is in effect during such period bears to the number of days in such month. All
rent must be paid to Landlord, without any deduction or offset, in lawful money of the United States of America, at the address designated by Landlord or to such other person or at such other place as
Landlord may from time to time designate in writing. Monthly Base Rent will be adjusted during the Term of this Lease as provided in Exhibit "B". 

        (b)    Additional Rent.    All amounts and charges to be paid by Tenant hereunder, including, without limitation,
payments for Operating Expenses, real property taxes, insurance and repairs, will be considered additional rent for purposes of this Lease, and the word "rent" as used in this Lease will include all
such additional rent unless the context specifically or clearly implies that only Monthly Base Rent is intended. 

        (c)    Late Payments.    Late payments of Monthly Base Rent and/or any item of additional rent will be subject to
interest and a late charge as provided in Subparagraph 22(f) below. 

6.    OPERATING EXPENSES    

        (a)    Operating Expenses.    In addition to Monthly Base Rent, throughout the Term of this Lease, Tenant agrees to
pay Landlord as additional rent in accordance with the terms of this Paragraph 6, Tenant's Percentage of Operating Expenses for the Development as defined in Exhibit
"E" attached hereto. Notwithstanding the foregoing, Landlord agrees that prior to the Rent Commencement Date, Tenant's Percentage of Operating Expenses for the Development
shall be based upon that portion of the Building covered by any Early Sublease (as defined in Paragraph 24(1) below), and not the entire Premises. 

        (b)    Estimate Statement.    Prior to the Commencement Date and on or about April 1st of each subsequent calendar
year during the Term of this Lease, Landlord will endeavor to deliver to Tenant a statement
("Estimate Statement") wherein Landlord will estimate both the Operating Expenses and Tenant's Percentage of Operating Expenses for the then current calendar year. Tenant agrees to pay Landlord, as
additional rent, one-twelfth (1/12th) of the estimated Tenant's Percentage of Operating Expenses each month thereafter, beginning with the next installment of rent due, until such time as Landlord
issues a revised Estimate Statement or the Estimate Statement for the succeeding calendar year; except that, concurrently with the regular monthly rent payment next due following the receipt of each
such Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly installment of the estimated Tenant's Percentage of Operating Expenses (less any applicable Operating Expenses
already paid) multiplied by the number of months from January, in the current calendar year, to the month of such rent payment next due, all months inclusive. If at any time during the Term of this
Lease, but not more often than quarterly, Landlord reasonably determines that Tenant's Percentage of Operating Expenses for the current calendar year will be greater than the amount set forth in the
then current Estimate Statement, Landlord may issue a revised Estimate Statement and Tenant agrees to pay Landlord, within thirty (30) days of receipt of the revised Estimate Statement, the difference
between the amount owed by Tenant under such revised Estimate Statement and the amount owed by Tenant under the original Estimate Statement for the portion of the then current calendar year which has
expired. Thereafter Tenant agrees to pay Tenant's Percentage of Operating Expenses based on such revised Estimate Statement until Tenant receives the next calendar year's Estimate Statement or a new
revised Estimate Statement for the current calendar year. 

        (c)    Actual Statement.    By April 1st of each calendar year during the term of this Lease, Landlord will
also endeavor to deliver to Tenant a statement ("Actual Statement") which states the 

5

 

actual Operating Expenses for the preceding calendar year. If the Actual Statement reveals that Tenant's Percentage of the actual Operating Expenses is more than the total Additional Rent paid by
Tenant for Operating Expenses on account of the preceding calendar year, Tenant agrees to pay Landlord the difference in a lump sum within thirty (30) days of receipt of the Actual Statement. If the
Actual Statement reveals that Tenant's Percentage of the actual Operating Expenses is less than the Additional Rent paid by Tenant for Operating Expenses on account of the preceding calendar year,
Landlord will credit any overpayment toward the next monthly installment(s) of Monthly Base Rent and Tenant's Percentage of the Operating Expenses due under this Lease. 

        (d)    Miscellaneous.    Any delay or failure by Landlord in delivering any Estimate Statement or Actual Statement
pursuant to this Paragraph 6 will not constitute a waiver of its right to require an increase in additional rent nor will it relieve Tenant of its obligations pursuant to this
Paragraph 6, except that Tenant will not be obligated to make any payments based on such Estimate Statement or Actual Statement until thirty (30) days after receipt of such Estimate Statement
or Actual Statement. Even though the Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant's Percentage of the actual Operating Expenses for the year in
which this Lease terminates, Tenant agrees to promptly pay any increase due over the estimated expenses paid and, conversely, any overpayment made in the event said expenses decrease shall promptly be
rebated by Landlord to Tenant. Such obligation will be a continuing one which will survive the expiration or termination of this Lease. Prior to the expiration or sooner termination of the Lease Term
and Landlord's acceptance of Tenant's surrender of the Premises, Landlord will have the right to estimate the actual Operating Expenses for the then current calendar year and to collect from Tenant
prior to Tenant's surrender of the Premises, Tenant's Percentage of any excess of such actual Operating Expenses over the estimated Operating Expenses paid by Tenant in such calendar year. 

        (e)    Audit Right.    In the event of any dispute as to the amount of Tenant's Percentage of Operating Expenses,
Tenant or an accounting firm selected by Tenant and reasonably satisfactory to Landlord (billing hourly and not on a contingency fee basis) will have the right, by prior written notice ("Audit
Notice") given within eighteen (18) months ("Audit Period") following receipt of an Actual Statement and at reasonable times during normal business hours, to audit Landlord's accounting records with
respect to Operating Expenses relative to the year to which such Actual Statement relates at the offices of Landlord's property manager. In no event will Landlord or its property manager be required
to (i) photocopy any accounting records or other items or contracts, (ii) create any ledgers or schedules not already in existence, (iii) incur any costs or expenses relative to
such inspection, or (iv) perform any other tasks other than making available such accounting records as aforesaid. Tenant must pay its Percentage of Operating Expenses when due pursuant to the
terms of this Lease and may not withhold payment of Operating Expenses or any other rent pending results of the audit or during a dispute regarding Operating Expenses. The audit must be completed
within sixty (60) days of the date of Tenant's Audit Notice and the results of such audit shall be delivered to Landlord within ninety (90) days of the date of Tenant's Audit Notice. If Tenant does
not comply with any of the aforementioned time frames, then such Actual Statement will be conclusively binding on Tenant. If such audit or review correctly reveals that Landlord has overcharged Tenant
and Landlord agrees with the results of such audit, then within thirty (30) days after the results of such audit are made available to Landlord, Landlord agrees to reimburse Tenant the amount of such
overcharge. If the audit reveals that Tenant was undercharged, then within thirty (30) days after the results of the audit are made available to Tenant, Tenant agrees to reimburse Landlord the
amount of such undercharge. Tenant agrees to pay the cost of such audit, provided that if the audit reveals that Landlord's determination of Tenant's Percentage of Operating Expenses as set forth in
the relevant Actual Statement was in error in Landlord's favor by more than five percent (5%) of the amount charged by Landlord to Tenant pursuant to such Actual Statement, then Landlord agrees to pay
the reasonable, third-party cost of such audit incurred by Tenant. To the extent Landlord must pay the cost of such audit, such cost shall not exceed a reasonable hourly charge for a reasonable amount
of hours spent by such third-party in 

6

 

connection with the audit, and in no event will exceed the amount of the error. Tenant agrees to keep the results of the audit confidential and will cause its agents, employees and contractors to
keep such results confidential. To that end, Landlord may require Tenant and its auditor to execute a confidentiality agreement provided by Landlord. 

7.    SECURITY DEPOSIT.    N/A 

8.    USE    

        (a)    Tenant's Use of the Premises.    The Premises may be used for the use or uses set forth in
Subparagraph 1(m) only. 

        (b)    Compliance.    At Tenant's sole cost and expense, Tenant agrees to procure, maintain and hold available for
Landlord's inspection, all governmental licenses and permits required for the proper and
lawful conduct of Tenant's business from the Premises, if any. Tenant agrees not to use, alter or occupy the Premises or allow the Premises to be used, altered or occupied in violation of, and Tenant,
at its sole cost and expense, agrees to use and occupy the Premises and cause the Premises to be used and occupied in compliance with: (i) any and all laws, statutes, zoning restrictions,
ordinances, rules, regulations, orders and rulings now or hereafter in force and any requirements of any insurer, insurance authority or duly constituted public authority having jurisdiction over the
Premises now or hereafter in force, (ii) the requirements of the Board of Fire Underwriters and any other similar body, (iii) the Certificate of Occupancy issued for the Building, and
(iv) any recorded covenants, conditions and restrictions and similar regulatory agreements, if any, which affect the use, occupation or alteration of the Premises. Tenant agrees to comply with
the Rules and Regulations referenced in Paragraph 28 below. Tenant agrees not to do or permit anything to be done in or about the Premises which will in any manner obstruct or interfere with
the rights of other tenants or occupants of the Development, or injure or unreasonably annoy them, or use or allow the Premises to be used for any unlawful or unreasonably objectionable purpose.
Tenant agrees not to cause, maintain or permit any nuisance or waste in, on, under or about the Premises. Notwithstanding anything contained in this Lease to the contrary, all transferable development
rights related in any way to the Development are and will remain vested in Landlord, and Tenant hereby waives any rights thereto. 

        (c)    Hazardous Materials; Tenant.    Except for ordinary and general office supplies, such as copier toner, liquid
paper, glue, ink and common household cleaning materials and other supplies or materials (in customary amounts) necessary for the operation of Tenant's business (some or all of which may constitute
"Hazardous Materials" as defined in this Lease), Tenant agrees not to cause or knowingly permit any Hazardous Materials to be brought upon, stored, used, handled, generated, released or disposed of
on, in, under or about the Premises, the Building, the Development or any portion thereof by Tenant, its agents, employees, subtenants, assignees, licensees or contractors (collectively, "Tenant's
Parties"), without the prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. Concurrently with the execution of this Lease, Tenant agrees to
complete and deliver to Landlord an Environmental Questionnaire in the form of Exhibit "H" attached hereto. Upon the expiration or earlier
termination of this Lease, Tenant agrees to promptly remove from the Premises, at its sole cost and expense, any and all Hazardous Materials, including any equipment or systems containing Hazardous
Materials which are installed, brought upon, stored, used, generated or released upon, in, under or about the Premises, the Building, the Development or any portion thereof by Tenant or any of
Tenant's Parties. To the fullest extent permitted by law, Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord and Landlord's partners, officers, directors, employees,
agents, successors and assigns (collectively, "Landlord Indemnified Parties") from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs (including, without limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees and court
costs) which arise directly or result directly from the release of Hazardous 

7

 

Materials on, in, under or about the Premises, the Building or any other portion of the Development and which are caused or knowingly permitted by Tenant or any of Tenant's Parties. Tenant agrees to
promptly notify Landlord of any release of Hazardous Materials at the Premises, which Tenant becomes aware of during the Term of this Lease, whether caused by Tenant or any other persons or entities.
In the event of any release of Hazardous Materials caused or permitted by Tenant or any of Tenant's Parties, Landlord shall have the right, but not the obligation, to cause Tenant to immediately take
all steps Landlord deems necessary or appropriate to remediate such release and prevent any similar future release to the satisfaction of Landlord and Landlord's mortgagee(s). As used in this Lease,
the term "Hazardous Materials" shall mean and include any hazardous or toxic materials, substances or wastes as now or hereafter designated under any law, statute, ordinance, rule, regulation, order
or
ruling of any agency of the State, the United States Government or any local governmental authority, including, without limitation, asbestos, petroleum, petroleum hydrocarbons and petroleum based
products, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), and freon and other chlorofluorocarbons. The term "Environmental Law" means any federal, state or local law, statute,
ordinance, regulation or order pertaining to health, industrial hygiene, environmental conditions or Hazardous Materials. The provisions of this Subparagraph 8(c) will survive the expiration or
earlier termination of this Lease. 

        (d)    Hazardous Materials; Landlord.    Prospective Purchaser Consent Decree Re:    Sternco Property,
Renton, Washington (King County Cause No. 97-2-1-17988-2SEA) ("Consent Decree"), entered on July 22, 1997, pursuant to the Washington State Model Toxics Control Act (Chapter 70.105D
RCW), requires Landlord to complete the remediation of releases of certain Hazardous Materials at a site consisting of approximately 45 acres, and including the legal parcel on which the
Premises are located. Landlord did not cause or contribute to the release or threatened release of Hazardous Materials that required remediation under the terms of the Decree. Landlord has completed
all remediation activities required under the terms of the Decree at the legal parcel on which the Premises are located. Pursuant to the terms of the Decree, the Washington State Department of Ecology
has certified in writing that all clean-up activities required under the terms of Decree at the legal parcel on which the Premises are located have been completed and that no further action is
necessary under the terms of the Decree on such legal parcel, with the exception of continuing groundwater monitoring and maintenance of institutional controls, which Landlord shall undertake at
Landlord's sole expense. The interest conveyed hereby is subject to the effect of a Restrictive Covenant recorded in the public land records as Document No. 97-2-17988-2SEA, in favor of, and
enforceable by, the State of Washington. Landlord shall promptly protect, indemnify, defend and hold harmless Tenant and its directors, officers, employees, agents, parents, subsidiaries, successors
and assigns ("Tenant Indemnified Parties") from and against any and all claims, judgments, suits, causes of action, penalties, fines, loss, damage, cost, expense or liability (including without
limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of claims, consultant fees and expert fees, attorneys' fees and costs) arising directly out of, or resulting
directly from, the presence at the Premises of Hazardous Materials on, in, under or about the Building or the Development prior to the date of this Lease or caused by Landlord or its agents,
contractors or employees. Nothing in this indemnity shall require Landlord to protect, indemnify, defend or hold harmless Tenant or any Tenant Indemnified Parties from any loss, damage, cost, expense
or liability (including reasonable attorneys' fees and costs) arising out of Tenant's release (or release by any of Tenant's Parties) of Hazardous Materials and/or Tenant's violation (or the violation
by any of Tenant's Parties) of any Environmental Law. The provisions of this Subparagraph 8(d) shall survive expiration or earlier termination of this Lease. 

9.    NOTICES.    Any notice required or permitted to be given hereunder must be in writing and may be given by personal delivery
(including delivery by overnight courier or an express mailing service) or by mail, if sent by registered or certified mail. Notices to Tenant shall be sufficient if delivered to Tenant at the address
designated in Subparagraph 1(b) and notices to Landlord shall be sufficient if 

8

 

delivered to Landlord at the address designated in Subparagraph 1(a). Either party may specify a different address for notice purposes by written notice to the other, except that the Landlord
may in any event use the Premises as Tenant's address for notice purposes. 

10.    BROKERS.    Each party represents and warrants to the other, that, to its knowledge, no broker, agent or finder, other than
the broker stated in Subparagraph 1(n) above, whose commission, if any, shall be payable by Landlord in accordance with Landlord's separate agreement with said broker, (a) negotiated or
was instrumental in negotiating or consummating this Lease on its behalf, and (b) is or might be entitled to a commission or compensation in connection with this Lease. Landlord and Tenant each agree
to promptly indemnify, protect, defend and hold harmless the other from and against any and all claims, damages, judgments, suits, causes of action, losses, liabilities, penalties, fines, expenses and
costs (including attorneys' fees and court costs) resulting from any breach by the indemnifying party of the foregoing representation, including, without limitation, any claims that may be asserted by
any broker, agent or finder undisclosed by the indemnifying party. The foregoing mutual indemnity shall survive the expiration or earlier termination of this Lease. 

11.    SURRENDER; HOLDING OVER    

        (a)    Surrender.    The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall
not constitute a merger, and shall, at the option of Landlord, operate as an assignment to Landlord of any or all subleases or subtenancies. Upon the expiration or earlier termination of this Lease,
Tenant agrees to peaceably surrender the Premises to Landlord broom clean and in a state of good order, repair and condition, ordinary wear and tear and casualty damage (if this Lease is terminated as
a result thereof pursuant to Paragraph 20) excepted, together with all of Tenant's personal property and Alterations (as defined in Paragraph 13) removed from the Premises to the extent
required under Paragraph 13 and all damage caused by such removal repaired as required by Paragraph 13. The delivery of keys to any employee of Landlord or to Landlord's agent or any
employee thereof alone will not be sufficient to constitute a termination of this Lease or a surrender of the Premises. 

        (b)    Holding Over.    Tenant will not be permitted to hold over possession of the Premises after the expiration or
earlier termination of the Term. If Tenant holds over after the expiration or earlier termination of the Term, Landlord may, at its option, treat Tenant as a tenant at sufferance only, and such
continued occupancy by Tenant shall be subject to all of the terms, covenants and conditions of this Lease, so far as applicable, except that the Monthly Base Rent for any such holdover period shall
be equal to one hundred fifty percent (150%) of the Monthly Base Rent in effect under this Lease immediately prior to such holdover, prorated on a daily basis. Acceptance by Landlord of rent
after such expiration or earlier termination will not result in a renewal of this Lease. The foregoing provisions of this Paragraph 11 are in addition to and do not affect Landlord's right of
re-entry or any rights of Landlord under this Lease or as otherwise provided by law. If Tenant fails to surrender the Premises upon the expiration of this Lease in accordance with the terms of this
Paragraph 11 despite demand to do so by Landlord, Tenant agrees to promptly indemnify, protect, defend and hold Landlord harmless from all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs (including attorneys' fees and costs), including, without limitation, costs and expenses incurred by Landlord in returning the Premises to the
condition in which Tenant was to surrender it and claims made by any succeeding tenant founded on or resulting from Tenant's failure to surrender the Premises. The provisions of this
Subparagraph 11(b) will survive the expiration or earlier termination of this Lease. 

12.    TAXES    

        (a)    Payment of Taxes.    If the Premises are separately assessed, Tenant agrees to pay all real property taxes, as
defined in Paragraph 12(b) below, applicable to the Premises during the term of this Lease. All such payments shall be made at least ten (10) days prior to the due date of such payment. 

9

 

Tenant agrees to promptly furnish Landlord with satisfactory evidence that such real property taxes have been paid. If any such real property taxes paid by Tenant shall cover any period of time prior
to or after the expiration of the term thereof, Tenant's share of such real property taxes is to be equitably prorated to cover only the period of time within the tax fiscal year during which this
Lease shall be in effect, and Landlord will promptly reimburse Tenant to the extent required. If Tenant fails to pay any such real property taxes, Landlord will have the right to pay the same, in
which case Tenant will repay such amount to Landlord with Tenant's next rent installment together with interest at the rate at the Interest Rate. In the event real property taxes are billed to
Landlord, Tenant shall pay its pro rata share as determined in Paragraph 12(c) below of said taxes within thirty (30) days after billing by Landlord. 

        (b)    Definition of "Real Property Taxes".    As used herein, the term "real property taxes" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or
estate taxes) imposed on or with respect to the Premises by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Landlord in the Premises or in the real property of which the Premises are a part,
as against Landlord's right to rent or other income therefrom, and as against Landlord's business of leasing the Premises. Assessments and improvement bonds shall be amortized over the longest
allowable period and Tenant shall be responsible for only those portions coming due during the Term of this Lease. The term "real property taxes" shall also include any tax, fee, levy, assessment or
charge (i) in substitution of, partially or totally, any tax, fee, levy, assessment or charge herein above included within the definition of "real property tax"; (ii) the nature of which
was hereinabove included within the definition of "real property tax"; (iii) which is measured by or reasonably attributable to the cost or value of Tenant's equipment, fixtures or other
property located on the Premises or Tenant's leasehold improvements made in or to the Premises, regardless of whether title to such improvements shall be in Landlord or Tenant (except to the extent
covered by Subparagraph 12(d) below); (iv) upon or measured by the rent payable hereunder; and (v) upon or with respect to the possession, leasing, operation, maintenance,
management, repair, use or occupancy of the Premises or any portion thereof. 

        (c)    Joint Assessment.    If the Premises are not separately assessed, Tenant's liability shall be an equitable
proportion of the real property taxes for all of the land and improvement included within the tax parcel assessed, such proportion to be determined by Landlord from the respective valuations assigned
in the assessor's work sheets or such other information as may be reasonably available. 

        (d)    Personal Property Taxes.    Tenant agrees to pay prior to delinquency all taxes assessed against and levied
upon trade fixtures, furnishings, equipment and all other personal property of Tenant contained in the Premises or elsewhere. When possible, Tenant will cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately from the real property
of Landlord. If any of Tenant's personal property is assessed with Landlord's real property, Tenant shall pay Landlord the taxes attributable to Tenant within thirty (30) days after receipt of a
written statement setting forth the taxes applicable to Tenant's property. 

13.    ALTERATIONS.    After installation of the initial Tenant Improvements for the Premises pursuant to  Exhibit "C", Tenant may,
at its sole cost and expense, make alterations, additions, improvements, "Utility Installations" and decorations to the
Premises (collectively, "Alterations") subject to and only upon the following terms and conditions: 

        (a)    Prohibited Alterations.    Tenant may not make any Alterations which (i) affect any area outside the
Premises; (ii) affect the Building's structure, roof, equipment, services or systems, or the proper functioning thereof, or Landlord's access thereto; (iii) affect the outside appearance
or character of the Building or affect the appearance, character or use of the Common Areas; (iv) in the reasonable 

10

 

opinion of Landlord, lessen the value of the Building; or (v) will violate any occupancy certificate applicable to the Premises. As used in this Paragraph 13, the term "Utility
Installations" means carpeting, window coverings, air lines, power panels, electrical distribution systems, heating, ventilation and air conditioning systems, plumbing systems, fencing, landscaping,
or gas lines. 

        (b)    Landlord's Approval.    Before proceeding with any Alterations which are not prohibited in
Subparagraph 13(a) above, Tenant must first obtain Landlord's written approval of the plans, specifications and working drawings for such Alterations, which approval Landlord will not
unreasonably withhold or delay; provided, however, Landlord's prior approval will be required for any such Alterations which are not prohibited by Subparagraph 13(a) above and which cost less
than One Hundred Thousand Dollars ($100,000) per Lease Year as long as (i) Tenant delivers to Landlord notice and a copy of any final plans, specifications and working drawings for any such
Alterations at least ten (10) days prior to commencement of the work thereof, and (ii) the other conditions of this Paragraph 13 are satisfied, including, without limitation, conforming
to Landlord's rules, regulations and insurance requirements which govern contractors. Landlord's approval of plans, specifications and/or working drawings for Alterations will not create any
responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with applicable permits, laws, rules and regulations of governmental agencies or
authorities. 

        (c)    Contractors.    Alterations may be made or installed only by contractors and subcontractors which have been
approved by Landlord, which approval Landlord will not unreasonably withhold or delay. Before proceeding with any Alterations, Tenant agrees to provide Landlord with ten (10) days' prior written
notice and Tenant's contractors must obtain and maintain, on behalf of Tenant and at Tenant's sole cost and expense, all necessary governmental permits and approvals for the commencement and
completion of such Alterations. Throughout the performance of any Alterations, Tenant agrees to obtain, or cause its contractors to obtain, workers compensation insurance and general liability
insurance in compliance with the provisions of Paragraph 19 of this Lease. 

        (d)    Manner of Performance.    All Alterations must be performed: (i) in accordance with the approved plans,
specifications and working drawings; (ii) in a lien-free and first-class and workmanlike manner; (iii) in compliance with all applicable permits, laws, statutes, ordinances, rules,
regulations, orders and rulings now or hereafter in effect and imposed by any governmental agencies and authorities which assert jurisdiction; (iv) in such a manner so as not to interfere with
the occupancy of any other tenant of the Development, nor impose any additional expense upon Landlord; and (v) at such times, in such manner, and subject to such rules and regulations as
Landlord may from time to time reasonably designate. 

        (e)    Ownership.    The Tenant Improvements and all Alterations will become the property of Landlord and will remain
upon and be surrendered with the Premises at the end of the Term of this Lease; provided, however, Landlord may, by written notice delivered to Tenant concurrently with Landlord's approval of the
final working drawings for any Alterations, identify those Alterations which Landlord will require Tenant to remove at the expiration or earlier termination of this Lease. Landlord may also require
Tenant to remove Alterations which Landlord did not have the opportunity to approve as provided in this Paragraph 13. If Landlord requires Tenant to remove any Alterations, Tenant, at its sole
cost and expense, agrees to remove the identified Alterations on or before the expiration or earlier termination of this Lease and repair any damage to the Premises caused by such removal (or, at
Landlord's option, Tenant agrees to pay to Landlord all of Landlord's costs of such removal and repair). 

        (f)    Plan Review.    Tenant agrees to pay Landlord, as additional rent, the reasonable costs of professional
services and costs for general conditions of Landlord's third party consultants if utilized by Landlord (but not Landlord's "in-house" personnel) for review of all plans, specifications and working 

11

 

drawings for any Alterations, within thirty (30) days after Tenant's receipt of invoices either from Landlord or such consultants. 

        (g)    Personal Property.    All articles of personal property owned by Tenant or installed by Tenant at its expense
in the Premises (including Tenant's business and trade fixtures, furniture, movable partitions and equipment [such as telephones, copy machines, computer terminals, refrigerators and
facsimile machines]) will be and remain the property of Tenant, and must be removed by Tenant from the Premises, at Tenant's sole cost and expense, on or before the expiration or earlier
termination of this Lease. Tenant agrees to repair any damage caused by such removal at its cost on or before the expiration or earlier termination of this Lease. 

        (h)    Removal of Alterations.    If Tenant fails to remove by the expiration or earlier termination of this Lease all
of its personal property, or any Alterations identified by Landlord for removal, Landlord may, at its option, treat such failure as a hold-over pursuant to Subparagraph 11(b) above, and/or
Landlord may (without liability to Tenant for loss thereof) treat such personal property and/or Alterations as abandoned and, at Tenant's sole cost and expense, and in addition to Landlord's other
rights and remedies under this Lease, at law or in equity: (a) remove and store such items; and/or (b) upon ten (10) days' prior notice to Tenant, sell, discard or otherwise dispose of
all or any such items at private or public sale for such price as Landlord may obtain or by other commercially reasonable means. Tenant shall be liable for all costs of disposition of Tenant's
abandoned property and Landlord shall have no
liability to Tenant with respect to any such abandoned property. Landlord agrees to apply the proceeds of any sale of any such property to any amounts due to Landlord under this Lease from Tenant
(including Landlord's attorneys' fees and other costs incurred in the removal, storage and/or sale of such items), with any remainder to be paid to Tenant. 

14.    REPAIRS    

        (a)    Tenant's Obligations.    Subject to Landlord's obligations under Subparagraph 14(c) below, Tenant agrees
to keep in good order, condition and repair the Premises and every part thereof, including, without limiting the generality of the foregoing, all plumbing, heating, ventilation, air conditioning
(notwithstanding the foregoing, Landlord shall procure and maintain, at tenant's sole cost and expense, a heating ventilation and air conditioning system maintenance contract and Tenant shall pay
direct to Landlord's contractor the actual and reasonable costs incurred in connection therewith as additional rent under this Lease), electrical, lighting facilities and equipment within the
Premises, fixtures, walls (interior only), ceilings, floors, windows, doors, plate glass and skylights located within the Premises, dock levelers, dock bumpers, truck doors, interior pest control, and
signs located on the Premises. Tenant agrees to cause any mechanics' liens or other liens arising as a result of work performed by Tenant or at Tenant's direction to be eliminated as provided in
Paragraph 15 below. 

        (b)    Tenant's Failure to Repair.    If Tenant refuses or neglects to repair and maintain the Premises properly as
required hereunder to the reasonable satisfaction of Landlord, Landlord, at any time following thirty (30) days from the date on which Landlord makes a written demand on Tenant to effect such repair
and maintenance, may enter upon the Premises and make such repairs and/or maintenance, and upon completion thereof, Tenant agrees to pay to Landlord as additional rent, Landlord's costs for making
such repairs plus an amount not to exceed ten percent (10%) of such costs for overhead, within thirty (30) days of receipt from Landlord of a written itemized bill therefor. Any amounts not reimbursed
by Tenant within such thirty (30) day period will bear interest at the Interest Rate until paid by Tenant. 

        (c)    Landlord's Obligations.    At Landlord's sole cost, Landlord shall maintain and repair the structural roof,
foundation and the structural soundness of the exterior walls of the Building in good condition, ordinary wear and tear and damage by fire or casualty, excepted; provided, however, to the extent
repairs to such items are required as a result of the negligent or intentionally willful acts or omissions of Tenant or its employees, agents, contractors or subtenants, such repairs plus an 

12

 

administration fee of ten percent (10%) shall be made by Landlord at the sole cost of Tenant. As part of Operating Expenses, Landlord shall be responsible for the landscaping, parking lot and
driveway sweeping and repaving, exterior painting, and nonstructural roof. Except for the obligations of Landlord in this Paragraph 14 above, under Paragraph 20 relating to damage or
destruction of the Premises, or under Paragraph 21 relating to eminent domain, it is intended by the parties that Landlord have no obligation of any kind whatsoever, (i) to repair or
maintain the Premises or any portion thereof or any equipment therein, all of which obligations are intended to be Tenant's obligations, or (ii) to pay any other cost or expense whatsoever
directly or indirectly relating to the ownership, management, lease, operation or use of the Premises. Except as expressly provided in this Lease, Tenant waives the right to make repairs at Landlord's
expense under any law, statute, ordinance, rule, regulation, order or ruling. 

        (d)    Self-Help.    Notwithstanding anything to the contrary contained in Paragraph 14(a) of this Lease, and in
addition to any other available remedies, if Landlord fails to perform any obligation under this Lease which it is obligated to perform within the time periods set forth in Paragraph 23 of this Lease
following receipt of written notice from Tenant, and if Landlord does not in good faith dispute that it is supposed to be performing such obligation but fails to diligently attempt to do so, then
Tenant shall be permitted to perform such obligations on Landlord's behalf in the Premises, provided Tenant first delivers to Landlord an additional two (2) business days prior written notice that
Tenant will be performing such obligations, and provided Landlord fails to commence to perform such obligations within such additional two (2) business day period. If the obligations to be performed
by Tenant will affect the structure of the Building or the Building's life safety, electrical, plumbing, HVAC or sprinkler systems, then Tenant shall use only those contractors used by Landlord in the
Building for work thereon, provided Landlord notifies Tenant of the names of such contractors upon Tenant's request (unless such contractors are unwilling or unable to perform such work, in which
event Tenant may utilize the services of any other qualified contractor approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed). All other contractors shall be
subject to Landlord's reasonable approval, and Landlord agrees to approve or reject any contractor proposed to be used by Tenant within eight (8) business hours (i.e., between 8:00 a.m. and 6:00 p.m.,
Monday through Friday) of receipt of Tenant's second notice, provided that if a proposed contractor is licensed and bonded and all requisite permits have been obtained for the desired work, then
Landlord agrees not to withhold its approval of the proposed contractor. Any work performed by or on behalf of Tenant shall be performed in accordance with provisions of clauses (ii), (iii) and (iv)
of Paragraph 13(d) of this Lease. Landlord agrees to promptly reimburse Tenant following the receipt of a written statement of all reasonable and actual costs incurred by Tenant in performing such
obligations on behalf of Landlord ("Costs"). If Landlord disputes Tenant's entitlement to some or all of the Costs and fails or refuses to reimburse such Costs to Tenant within thirty (30) days after
Tenant's written demand therefor, then Tenant may deduct the Costs from rent due under this Lease after and only to the extent Tenant has been authorized to do so by the arbitrator pursuant to and in
accordance with the terms of Paragraph 43 of the Addendum hereof. 

15.    LIENS.    Tenant agrees not to permit any mechanic's, materialmen's or other liens to be filed against all or any part of the
Premises or the Development, nor against Tenant's leasehold interest in the Premises, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or
undertaken by Tenant or any other act or omission of Tenant or Tenant's agents, employees, contractors, licensees or invitees. At Landlord's request, Tenant agrees to provide Landlord with
enforceable, conditional and final lien releases (or other evidence reasonably requested by Landlord to demonstrate protection from liens) from all persons furnishing labor and/or materials at the
Premises. Landlord will have the right at all reasonable times to post on the Premises and record any notices of non-responsibility which it deems necessary for protection from such liens. If any such
liens are filed, Tenant will, at its sole cost, promptly cause such liens to be released of record or bonded so that it no longer affects title to the Premises or the Development. If Tenant fails to
cause any such liens to be so released or bonded within thirty (30) days after receiving notice of the filing 

13

 

thereof, such failure will be deemed a material breach by Tenant under this Lease without the benefit of any additional notice or cure period described in Paragraph 22 below, and Landlord may,
without waiving its rights and remedies based on such breach, and without releasing Tenant from any of its obligations, cause such liens to be released by any means it shall deem proper, including
payment in satisfaction of the claims giving rise to such liens. Tenant agrees to pay to Landlord within thirty (30)
days after receipt of invoice from Landlord, any sum paid by Landlord to remove such liens, together with interest at the Interest Rate from the date of such payment by Landlord. 

16.    ENTRY BY LANDLORD.    Landlord and its employees and agents will at all times (during normal business hours and after at
least 48 hours prior written notice to Tenant, except in the case of emergency, in which event no prior notice to Tenant shall be required) have the right to enter the Premises to inspect the same, to
show the Premises to prospective purchasers or, during the last 180 days of the Term, to tenants, to post notices of nonresponsibility, and/or to repair the Premises as permitted or required by this
Lease. In exercising such entry rights, Landlord will endeavor to minimize, as reasonably practicable, the interference with Tenant's business, and will provide Tenant with reasonable advance notice
of any such entry (except in emergency situations). Landlord may, in order to carry out such purposes, erect scaffolding and other necessary structures where reasonably required by the character of
the work to be performed. Landlord will at all times have and retain a key with which to unlock all doors in the Premises, excluding Tenant's vaults and safes. Landlord will have the right to use any
and all means which Landlord may reasonably deem proper to open said doors in an emergency in order to obtain entry to the Premises. Any entry to the Premises obtained by Landlord by any of said
means, or otherwise, will not be construed or deemed to be a forcible or unlawful entry into the Premises, or an eviction of Tenant from the Premises. 

17.    UTILITIES AND SERVICES.    Tenant agrees to contract directly for and to pay for all water, gas, heat, light, power,
telephone, waste/trash removal, sewer and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered to Tenant, Tenant
agrees to pay a reasonable proportion to be determined by Landlord of all charges jointly metered with other Premises. Landlord will not be liable to Tenant for any failure to furnish any of the
foregoing utilities and services if such failure is caused by all or any of the following: (i) accident, breakage or repairs; (ii) strikes, lockouts or other labor disturbance or labor dispute of any
character; (iii) governmental regulation, moratorium or other governmental action or inaction; (iv) inability despite the exercise of reasonable diligence to obtain electricity, water or fuel; or (v)
any other cause beyond Landlord's reasonable control. In addition, in the event of any stoppage or interruption of services or utilities, Tenant shall not be entitled to any abatement or reduction of
rent (except as expressly provided in Subparagraphs 20(f) or 21(b) if such failure results from a damage or taking described therein), no eviction of Tenant will result from such failure and Tenant
will not be relieved from the performance of any covenant or agreement in this Lease because of such failure. Notwithstanding anything in this Lease to the contrary, if, as a result of the negligent
acts or omissions of Landlord or its agents, contractors or employees, for more than three (3) consecutive business days following written notice to Landlord, there is no elevator service to the
Premises, or no HVAC or electricity to the Premises, or such an interruption of other essential utilities and building services, such as fire protection or water, so that any portion of the Premises
cannot be and is not used by Tenant, in Tenant's judgment reasonably exercised, then Tenant's rent shall thereafter be abated until the Premises are again usable by Tenant in proportion to the extent
to which Tenant's use of the Premises is interfered with; provided, however, that if Landlord is diligently pursuing the repair of such utilities or services and Landlord provides substitute services
reasonably suitable for Tenant's purposes, as for example, bringing in portable air-conditioning equipment, then there shall not be an abatement of rent. This paragraph shall not apply in case of
damage to, or destruction of, the Building, which shall be governed by a separate provision of this Lease. Notwithstanding the foregoing, Tenant may not abate rent if Landlord disputes Tenant's right
to abate or the amount thereof until and only to the extent the 

14

 

arbitrator provides that Tenant may do so in accordance with and pursuant to the terms of Paragraph 43 hereof. 

18.    ASSUMPTION OF RISK AND INDEMNIFICATION.    

        (a)    Assumption of Risk.    Tenant, as a material part of the consideration to Landlord, hereby agrees that neither
Landlord nor any Landlord Indemnified Parties (as defined in Subparagraph 8(c) above) will be liable to Tenant for, and Tenant expressly assumes the risk of and waives any and all claims it may have
against Landlord or any Landlord Indemnified Parties with respect to, (i) any and all damage to property or injury to persons in, upon or about the Premises (except that resulting from the negligent
or willful act or omission of Landlord or its employees, agents or contractors), (ii) any such damage caused by other tenants or persons in or about the Premises, or caused by quasi-public work, (iii)
any loss of or damage to property by theft or otherwise, or (iv) any injury or damage to persons or property resulting from any casualty, explosion, falling plaster or other masonry or glass, steam,
gas, electricity, water or rain, which may leak from any part of the Building or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place, or
resulting from dampness (except to the extent resulting from the negligent or willful act or omission of Landlord or its employees, agents or contractors). Notwithstanding anything to the contrary
contained in this Lease, neither Landlord nor any Landlord Indemnified Parties will be liable for consequential damages arising out of any loss of the use of the Premises or any equipment or
facilities therein by Tenant or any Tenant Parties. 

        (b)    Indemnification.    Tenant will be liable for, and agrees, to the maximum extent permissible under applicable
law, to promptly indemnify, protect, defend and hold harmless Landlord and Landlord Indemnified Parties, from and against, any and all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, fines, expenses and costs, including attorneys' fees and court costs (collectively, "Indemnified Claims"), arising or resulting from (i) any negligent act or omission of Tenant
or any Tenant Parties (as defined in Subparagraph 8(c) above); (ii) the use of the Premises and conduct of Tenant's business by Tenant or any Tenant Parties, or any other activity, work or thing done,
knowingly permitted or suffered by Tenant or any Tenant Parties, in or about the Premises; and/or (iii) any default by Tenant of any obligations on Tenant's part to be performed under the terms of
this Lease. In case any action or proceeding is brought against Landlord or any Landlord Indemnified Parties by reason of any such Indemnified Claims, Tenant, upon notice from Landlord, agrees to
promptly defend the same at Tenant's sole cost and expense by counsel approved in writing by Landlord, which approval Landlord will not unreasonably withhold. 

        (c)    Survival; No Release of Insurers.    Tenant's indemnification obligations under Subparagraph 18(b) will survive
the expiration or earlier termination of this Lease. Tenant's covenants, agreements and indemnification obligation in Subparagraphs 18(a) and 18(b) above, are not intended to and will not relieve any
insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Lease. 

        (d)    Indemnity by Landlord.    Notwithstanding anything to the contrary contained in Paragraph 18 of, or elsewhere
in, this Lease, Tenant shall not be required to indemnify and hold Landlord harmless from
any Indemnified Claims resulting from the negligence or willful misconduct of Landlord or Landlord's agents, employees or contractors (except for damage to Tenant's personal property, fixtures,
furniture and equipment in the Premises, to the extent Tenant is required to obtain insurance coverage therefor pursuant to the terms of this Lease), and, subject to the limitations contained in (i)
the second to the last sentence of Paragraph 18(a) of this Lease, and (ii) Paragraph 35 of this Lease, Landlord agrees to indemnify and hold Tenant harmless from and against any and all such
Indemnified Claims and all Indemnified Claims arising or resulting from (i) any negligent act or omission of Landlord or its employees, agents or contractors, and/or (ii) any default by Landlord of
any of its obligations under this Lease. Landlord's indemnification obligations under this paragraph will survive the expiration or earlier 

15

 

termination of this Lease and are not intended to and will not relieve any insurance carrier of its obligations under policies required to be carried by Landlord and/or by Tenant pursuant to the
provisions of this Lease. 

19.    INSURANCE    

        (a)    Tenant's Insurance.    On or before the date Tenant is permitted any access to the Premises pursuant to this
Lease (which may be prior to the Commencement Date), and continuing throughout the entire Term hereof and any other period of occupancy, Tenant agrees to keep in full force and effect, at its sole
cost and expense, the following insurance: 

        (i)    "All
Risks" property insurance including at least the following perils: fire and extended coverage, smoke damage, vandalism, malicious mischief, and sprinkler leakage.
This insurance policy must be upon all property owned by Tenant, for which Tenant is legally liable, or which is installed at Tenant's expense, and which is located in the Premises including, without
limitation, any Alterations and all furniture, fittings, installations, fixtures and any other personal property of Tenant, in an amount not less than the full replacement cost thereof. 

        (ii)  One
(1) year insurance coverage for business interruption and loss of income and extra expense insuring the same perils described in Subparagraph 19(a)(i) above,
in such amounts as will reimburse Tenant for any direct or indirect loss of earnings attributable to any such perils including prevention of access to the Premises, Tenant's parking areas or the
Building as a result of any such perils. 

        (iii)  Commercial
General Liability Insurance (on an occurrence form) insuring bodily injury, personal injury and property damage, including the following divisions and
extensions of coverage: Premises and Operations; Owners and Contractors protective; blanket contractual liability (including coverage for Tenant's indemnity obligations under this Lease); and products
and completed operations. Such insurance must have the following minimum limits of liability: bodily injury, personal injury and property damage—$5,000,000 each occurrence, provided that
if liability coverage is provided by a Commercial General Liability policy the general aggregate limit shall apply separately and in total to this location only (per location general aggregate). 

        (iv)  Comprehensive
Automobile Liability insuring bodily injury and property damage arising from all owned, non-owned and hired vehicles, if any, with minimum limits of
liability of $1,000,000 per accident. 

        (v)  Worker's
Compensation or similar insurance as required by the laws of the State. 

        (vi)  Any
other form or forms of insurance as Tenant or Landlord or any mortgagees of Landlord may reasonably require from time to time in form, in amounts, and for insurance
risks against which, a prudent tenant would protect itself, but only to the extent coverage for such risks and amounts are available in the insurance market at commercially acceptable rates. Landlord
makes no representation that the limits of liability required to be carried by Tenant under the terms of this Lease are adequate to protect Tenant's interests and Tenant should obtain such additional
insurance or increased liability limits as Tenant deems appropriate. 

        (b)    Supplemental Tenant Insurance Requirements.    All policies must be in a form reasonably satisfactory to
Landlord and issued by an insurer admitted to do business in the State. All policies must be issued by insurers with a minimum policyholder rating of "A-" and a financial rating of "VII" in the most
recent version of Best's Key Rating Guide. All policies must contain a requirement to notify Landlord (and Landlord's property manager and any mortgagees or ground lessors of Landlord who are named as
additional insureds, if any) in writing not less than thirty (30) days prior to any material change, reduction in coverage, cancellation or other termination thereof. Tenant agrees to deliver to
Landlord, as soon as practicable after placing the required insurance, but in any event within the time 

16

 

frame specified in Subparagraph 19(a) above, certificate(s) of insurance evidencing the existence of such insurance and Tenant's compliance with the provisions of Paragraph 19. Tenant
agrees to cause replacement certificates to be delivered to Landlord not less than thirty (30) days prior to the expiration of any such policy or policies. If any such initial or replacement
certificates are not furnished within the time(s) specified herein, Tenant will be deemed to be in material default under this Lease without the benefit of any additional notice or cure period
provided in Subparagraph 22(a)(iii) below, and Landlord will have the right, but not the obligation, to procure such insurance as Landlord deems necessary to protect Landlord's interests at
Tenant's expense. If Landlord obtains any insurance that is the responsibility of Tenant under this Paragraph 19, Landlord agrees to deliver to Tenant a written statement setting forth the cost
of any such insurance and showing in reasonable detail the manner in which it has been computed and Tenant agrees to promptly reimburse Landlord for such costs as additional rent. General Liability
and Automobile Liability policies under Subparagraphs 19(a)(iii) and (iv) must name Landlord and Landlord's property manager (and at Landlord's request, Landlord's mortgagees and ground lessors
of which Tenant has been informed in writing) as additional insureds and must also contain a provision that the insurance afforded by such policy is primary insurance and any insurance carried by
Landlord and Landlord's property manager or Landlord's mortgagees or ground lessors, if any, will be excess over and non-contributing with Tenant's insurance. 

        (c)    Building Insurance.    Landlord shall obtain, as an Operating Expense, a policy or policies of insurance
covering loss or damage to the Premises, in the amount of the full replacement value thereof, as the same may exist from time to time, but in no event less than the total amount required by lenders
having liens on the Premises, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, and special extended perils ("All Risk" as such term is
used in the insurance industry), including twelve (12) months rent loss insurance. Landlord may also elect to insure the perils of flood and/or earthquake. Said insurance shall provide for payment of
loss to Landlord, or to the holders of mortgages or the beneficiaries under deeds of trust on the Premises. If such insurance coverage has a deductible clause, the deductible amount shall not exceed
Ten Thousand ($10,000) per occurrence, and Tenant will be liable for such deductible and Tenant agrees to reimburse Landlord for the entire cost of such premiums within thirty (30) days after demand
therefor by Landlord. If the Premises are part of a group of buildings owned by Landlord which are adjacent to the Premises, then Tenant shall pay for any increase in the property insurance of such
other buildings if said increase is caused by Tenant's acts, omissions, use or occupancy of the Premises. 

        (d)    Tenant's Use.    Tenant will not keep, use, sell or offer for sale in or upon the Premises any article which
may be prohibited by any insurance policy periodically in force covering the Premises. If Tenant's occupancy or business in, or on, the Premises, whether or not Landlord has consented to the same,
results in any increase in premiums for the insurance periodically carried by Landlord with respect to the Building or results in the need for Landlord to maintain special or additional insurance,
Tenant agrees to pay Landlord the cost of any such increase in premiums or special or additional coverage as additional rent within thirty (30) days after being billed therefor by Landlord. In
determining whether increased premiums are a result of Tenant's use of the Premises, a schedule issued by the organization computing the insurance rate on the Building showing the various components
of such rate, will be conclusive evidence of the several items and charges which make up such rate. Tenant agrees to promptly comply with all reasonable requirements of the insurance authority or any
present or future insurer relating to the Premises. 

        (e)    Cancellation of Landlord's Policies.    If any of Landlord's insurance policies are canceled or cancellation is
threatened or the coverage reduced or threatened to be reduced in any way because of the use of the Premises or any part thereof by Tenant or any assignee or subtenant of Tenant or by anyone Tenant
permits on the Premises and, if Tenant fails to remedy the condition giving rise to such cancellation, threatened cancellation, reduction of coverage, threatened reduction of coverage, increase in
premiums, or threatened increase in premiums, within forty-eight (48) hours after notice thereof, 

17

 

Tenant will be deemed to be in material default of this Lease and Landlord may, at its option, either terminate this Lease or enter upon the Premises and attempt to remedy such condition, and Tenant
shall promptly pay Landlord the reasonable costs of such remedy as additional rent. If Landlord is unable, or elects not to remedy such condition, then Landlord will have all of the remedies provided
for in this Lease in the event of a default by Tenant. 

        (f)    Waiver of Claims.    Notwithstanding any provision of this Lease to the contrary, whenever (a) any loss,
cost, damage or expense (collectively, "damage") resulting from fire, explosion or any other casualty is incurred by either Landlord or by Tenant or by anyone claiming by, through or under Landlord or
Tenant in connection with the Premises, its contents, or the Development, and (b) such party is covered in whole or in part by insurance with respect to such damage or is required under this
Lease to be so
insured, then the party so insured (or so required) hereby waives (on its own behalf and on behalf of its insurer) any claims against and releases the other party from any liability said other party
may have on account of such damage. The foregoing is not intended to release Tenant from liability for damage in connection with any such casualty up to the amount of the insurance deductible as
described in Paragraph 19(c) above. 

        (g)    Waiver of Worker's Compensation Immunity.    The indemnification obligations contained in this Lease shall not
be limited by any worker's compensation, benefit or disability laws, and each indemnifying party hereby waives any immunity that said indemnifying party may have under the Industrial Insurance Act,
Title 51 RCW and similar worker's compensation, benefit or disability laws. 

        (h)    Provisions Specifically Negotiated.    LANDLORD AND TENANT ACKNOWLEDGE BY THEIR EXECUTION OF THIS LEASE THAT
EACH OF THE INDEMNIFICATION PROVISIONS OF THIS LEASE (SPECIFICALLY INCLUDING BUT NOT LIMITED TO THOSE RELATING TO WORKER'S COMPENSATION BENEFITS AND LAWS) WERE SPECIFICALLY NEGOTIATED AND AGREED TO BY
LANDLORD AND TENANT. 

20.    DAMAGE OR DESTRUCTION    

        (a)    Partial Destruction.    If the Premises are damaged by fire or other casualty to an extent not exceeding
thirty-five percent (35%) of the full replacement cost thereof, and Landlord's contractor reasonably estimates in a writing delivered to Landlord and Tenant that the damage thereto may be repaired,
reconstructed or restored to substantially its condition immediately prior to such damage within one hundred twenty (120) days from the date of such casualty, and Landlord will receive insurance
proceeds sufficient to cover the costs of such repairs, reconstruction and restoration (including proceeds from Tenant and/or Tenant's insurance which Tenant is required to deliver to Landlord
pursuant to Subparagraph 20(e) below to cover Tenant's obligation for the costs of repair, reconstruction and restoration of any portion of any Alterations for which Tenant is responsible under
this Lease), then Landlord agrees to commence and proceed diligently with the work of repair, reconstruction and restoration and this Lease will continue in full force and effect. 

        (b)    Substantial Destruction.    Any damage or destruction to the Premises or the Building which Landlord is not
obligated to repair pursuant to Subparagraph 20(a) above will be deemed a substantial destruction. In the event of a substantial destruction, Landlord may elect to either: (i) repair,
reconstruct and restore the portion of the Premises damaged by such casualty, in which case this Lease will continue in full force and effect, subject to Tenant's termination right contained in
Subparagraph 20(d) below; or (ii) terminate this Lease effective as of the date which is thirty (30) days after the Tenant's receipt of Landlord's election to so terminate. 

        (c)    Notice.    Under any of the conditions of Subparagraph 20(a) and (b) above, Landlord agrees to give
written notice to Tenant of its intention to repair or terminate, as permitted in such paragraphs, within the earlier of forty-five (45) days after the occurrence of such casualty, or fifteen (15)
days after
Landlord's receipt of the estimate from Landlord's contractor (the applicable time period to be referred to herein as the "Notice Period"). 

18

   
        (d)    Tenant's Termination Rights.    If Landlord elects to repair, reconstruct and restore pursuant to
Subparagraph 20(b)(i) hereinabove, and if Landlord's contractor estimates that as a result of such damage, Tenant cannot be given reasonable use of and access to the Premises within two hundred
ten (210) days after the date of such damage, then Tenant may terminate this Lease effective upon delivery of written notice to Landlord within ten (10) days after Landlord delivers notice to Tenant
of its election to so repair, reconstruct or restore. 

        (e)    Tenant's Costs and Insurance Proceeds.    In the event of any damage or destruction of all or any part of the
Premises, Tenant agrees to immediately (i) notify Landlord thereof, and (ii) deliver to Landlord all property insurance proceeds received by Tenant with respect to any Alterations, but excluding
proceeds for Tenant's furniture, fixtures, equipment and other personal property, whether or not this Lease is terminated as permitted in this Paragraph 20, and Tenant hereby assigns to Landlord all
rights to receive insurance proceeds. If, for any reason (including Tenant's failure to obtain insurance for the full replacement cost of any Alterations from any and all casualties), Tenant fails to
receive insurance proceeds covering the full replacement cost of any Alterations which are damaged, Tenant will be deemed to have self-insured the replacement cost of such items, and upon any damage
or destruction thereto, Tenant agrees to immediately pay to Landlord the full replacement cost of such items, less any insurance proceeds actually received by Landlord from Landlord's or Tenant's
insurance with respect to such items. 

        (f)    Abatement of Rent.    In the event of any damage, repair, reconstruction and/or restoration described in this
Paragraph 20, rent will be abated or reduced, as the case may be, in proportion to the degree to which Tenant's use of the Premises is impaired during such period of repair until such use is restored.
Except for abatement of rent as provided hereinabove, Tenant will not be entitled to any compensation or damages for loss of, or interference with, Tenant's business or use or access of all or any
part of the Premises or for lost profits or any other consequential damages of any kind or nature, which result from any such damage, repair, reconstruction or restoration. 

        (g)    Inability to Complete.    Notwithstanding anything to the contrary contained in this Paragraph 20, if Landlord
is obligated or elects to repair, reconstruct and/or restore the damaged portion of the Building or the Premises pursuant to Subparagraph 20(a) or 20(b)(i) above, but is delayed from completing such
repair, reconstruction and/or restoration beyond the date which is sixty (60) days after the date estimated by Landlord's contractor for completion thereof by reason of any causes (other than delays
caused by Tenant, its subtenants, employees, agents or contractors or delays which are beyond the reasonable control of Landlord as described in Paragraph 33), then either Landlord or Tenant may elect
to terminate this Lease upon ten (10) day's prior written notice given to the other after the expiration of such sixty (60) day period. 

        (h)    Damage Near End of Term.    Landlord and Tenant shall each have the right to terminate this Lease if any
material damage to the Building occurs during the last twelve (12) months of the Term of this Lease where Landlord's contractor estimates in a writing delivered to Landlord and Tenant that the repair,
reconstruction or restoration of such damage cannot be completed within sixty (60) days after the date of such casualty. If either party desires to terminate this Lease under this Subparagraph (h), it
shall provide written notice to the other party of such election within ten (10) days after receipt of Landlord's contractor's repair estimates. 

        (i)    Waiver of Termination Right.    Landlord and Tenant agree that the foregoing provisions of this Paragraph 20
are to govern their respective rights and obligations in the event of any damage or destruction and supersede and are in lieu of the provisions of any applicable law, statute, ordinance, rule,
regulation, order or ruling now or hereafter in force which provide remedies for damage or destruction of leased premises. 

        (j)    Termination.    Upon any termination of this Lease under any of the provisions of this Paragraph 20, the
parties will be released without further obligation to the other from the date 

19

 

possession of the Premises is surrendered to Landlord except for items which have accrued and are unpaid as of the date of termination and matters which are to survive any termination of this Lease
as provided in this Lease. 

21.    EMINENT DOMAIN    

        (a)    Substantial Taking.    If the whole of the Premises or a material portion thereof or of the parking areas for
the Premises is taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking,
either party will have the right to terminate this Lease effective as of the date possession is required to be surrendered to such authority. For purposes of the preceding sentence, a "material"
portion of the Premises or of the parking areas for the Premises is deemed to be any portion without which Tenant can no longer viably operate its business in the Premises. 

        (b)    Partial Taking; Abatement of Rent.    In the event of a taking of a portion of the Remedies which does not
constitute a material taking under Subparagraph 21(a) above, then, neither party will have the right to terminate this Lease and Landlord will thereafter proceed to make a functional unit of the
remaining portion of the Premises (but only to the extent Landlord receives proceeds therefor from the condemning authority), and rent will be abated in proportion to percentage of parking or the
floor area of the Premises which Tenant is deprived of on account of such taking: provided, however, there will be no abatement of rent if the only area taken is that which does not have a building or
parking area used by Tenant located thereon. 

        (c)    Condemnation Award.    In connection with any taking of all or any portion of the Premises, Landlord will
entitled to receive the entire amount of any award which may be made or given in such taking or condemnation, without deduction or apportionment for any estate or interest of Tenant, it being
expressly understood and agreed by Tenant that no portion of any such award will be allowed or paid to Tenant for any so-called bonus or excess value of this Lease, and such bonus or excess value will
be the sole property of Landlord. Tenant agrees not to assert any claim against Landlord or the taking authority for any compensation because of such taking (including any claim for bonus or excess
value of this Lease); provided, however, if any portion of the Premises is taken, Tenant will have the right to recover from the condemning authority (but not from Landlord) any compensation as may be
separately awarded or recoverable by Tenant for the taking of Tenant's furniture, fixtures, equipment and other personal property within the Premises, for Tenant's relocation expenses, and for any
other damage to Tenant's business by reason of such taking. 

        (d)    Temporary Taking.    In the event of taking of the Premises or any part thereof for temporary use, (i) this
Lease will remain unaffected thereby and rent will equitably abate for the duration of the taking, and (ii) Landlord will be entitled to receive such portion or portions of any award made for such use
with respect to the period of the taking, provided that if such taking remains in force at the expiration or earlier termination of this Lease, Tenant will then pay to Landlord a sum equal to the
reasonable cost of performing Tenant's obligations under Paragraph 11 with respect to surrender of the Premises and upon such payment Tenant will be excused from such obligations. For purpose of this
Subparagraph 21(d), a temporary taking shall be defined as a taking for a period of ninety (90) days or less. 

22.    DEFAULTS AND REMEDIES    

        (a)    Defaults.    The occurrence of any one or more of the following events will be deemed a default by Tenant: 

        (i)    The
abandonment of the Premises by Tenant. 

20

 

        (ii)  The
failure by Tenant to make any payment of rent or additional rent or any other payment required to be made by Tenant hereunder as and when due where such failure
continues for a period of ten (10) days after written notice thereof from Landlord to Tenant. 

        (iii)  The
failure by Tenant to observe or perform any of the express covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified in
Subparagraph 22(a)(i) or (ii)
above, where such failure continues for a period of thirty (30) days (or such shorter or longer period of time as may otherwise be specified in this Lease as to any particular provision hereof) after
written notice thereof from Landlord to Tenant. If the nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, then Tenant will not be deemed to be in
default if Tenant commences such cure within such thirty (30) day period and thereafter diligently prosecutes such cure to completion. 

        (iv)  (A) The
making by Tenant of any general assignment for the benefit of creditors; (B) the filing by or against Tenant of a petition to have Tenant adjudged
a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days);
(C) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored
to Tenant within thirty (30) days; or (D) the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease
where such seizure is not discharged within thirty (30) days. 

        (v)  any
event of default by Tenant under the Existing Lease. 

        (b)    Landlord's Remedies; Termination.    In the event of any default by Tenant, in addition to any other remedies
available to Landlord at law or in equity under applicable law, Landlord will have the immediate right and option to terminate this Lease and all rights of Tenant hereunder. If Landlord elect to
terminate this Lease then, to the extent permitted under applicable law, Landlord may recover from Tenant: (i) the worth at the time of award of any unpaid rent which had been earned at the time of
such termination; plus (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rent
loss that Tenant proves could have been reasonably avoided; plus (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds
the amount of such rent loss that Tenant proves could be reasonably avoided; plus (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which, in the ordinary course of things, results therefrom including, but not limited to: attorneys' fees and costs; brokers' commissions; the costs of
refurbishment, alterations, renovation and repair of the Premises, and removal (including the repair of any damage caused by such removal) and storage (or disposal) of Tenant's personal property,
equipment, fixtures, Alterations and any other items which Tenant is required under this Lease to remove but does not remove, as well as the unamortized value of any free or reduced rent or any tenant
improvement allowance or other costs or economic concessions provided, paid, granted or incurred by Landlord pursuant to this Lease. The unamortized value of such concessions shall be determined by
taking the total value of such concessions and multiplying such value by a fraction, the numerator of which is the number of months of the Lease Term not yet elapsed as of the date on which this Lease
is terminated, and the denominator of which is the total number of months of the Lease Term. 

        As
used in Subparagraph 22(b)(i) and (ii) above, the "worth at the time of award" is computed by allowing interest at the Interest Rate. As used in Subparagraph 22(b)(iii) above, the
"worth at the time of award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). 

21

 

        (c)    Landlord's Remedies; Re-Entry Rights.    In the event of any default by Tenant, in addition to any other
remedies available to Landlord under this Lease, at law or in equity, Landlord will also have the right, with or without terminating this Lease, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed and stored in a public warehouse or elsewhere and/or disposed of at the sole cost and expense of and for the account of Tenant in accordance
with the provisions of Subparagraph 13(h) of this Lease or any other procedures permitted by applicable law. No re-entry or taking possession of the Premises by Landlord pursuant to this Subparagraph
22(c) will be construed as an election to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. 

        (d)    Landlord's Remedies; Re-Letting.    In the event of the vacation or abandonment of the Premises by Tenant or in
the event that Landlord elects to re-enter the Premises or takes possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease, Landlord may from time to time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof on terms and conditions as
Landlord in its reasonable discretion may deem advisable with the right to make alterations and repairs to the Premises in connection with such reletting. If Landlord elects to relet the Premises,
then rents received by Landlord from such reletting will be applied: first, to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment of any cost
of such reletting; third, to the payment of the cost of any alterations and repairs to the Premises incurred in connection with such reletting; fourth, to the payment of rent due and unpaid hereunder
and the residue, if any, will be held by Landlord and applied to payment of future rent as the same may become due and payable hereunder. Should that portion of such rents received from such reletting
during any month, which is applied to the payment of rent hereunder, be less than the rent payable during that month by Tenant hereunder, then Tenant agrees to pay such deficiency to Landlord
immediately upon demand therefor by Landlord. Such deficiency will be calculated and paid monthly. 

        (e)    Landlord's Remedies; Performance for Tenant.    All covenants and agreements to be performed by Tenant under
any of the terms of this Lease are to be performed by Tenant at Tenant's sole cost and expense and without any abatement of rent. If Tenant fails to pay any sum of money owed to any party other than
Landlord, for which it is liable under this Lease, or if Tenant fails to perform any other act on its part to be performed hereunder, and such failure continues for thirty (30) days after written
notice thereof by Landlord, Landlord may, without waiving or releasing Tenant from its obligations, but shall not be obligated to, make any such payment or perform any such other act to be made or
performed by Tenant. Tenant agrees to reimburse Landlord upon demand for all sums so paid by Landlord and all necessary incidental costs, together with interest thereon at the Interest Rate, from the
date of such payment by Landlord until reimbursed by Tenant. This remedy shall be in addition to any other right or remedy of Landlord set forth in this Paragraph 22. 

        (f)    Late Payment.    If Tenant fails to pay any installments of rent within five (5) days of when due or if Tenant
fails to make any other payment for which Tenant is obligated under this Lease within five (5) days of when due, such late amount will accrue interest at the Interest Rate and Tenant agrees to pay
Landlord as additional rent such interest on such amount from the date such amount becomes due until such amount is paid. In addition, Tenant agrees to pay to Landlord concurrently with such late
payment amount, as additional rent, a late charge equal to five percent (5%) of the amount due to compensate Landlord for the extra costs Landlord will incur as a result of such late payment. The
parties agree that (i) it would be impractical and extremely difficult to fix the actual damage Landlord will suffer in the event of Tenant's late payment, (ii) such interest and late charge
represents a fair and reasonable estimate of the detriment that Landlord will suffer by reason of late payment by Tenant, and (iii) the payment of interest and late charges are distinct and separate
in that the payment of 

22

 

interest is to compensate Landlord for the use of Landlord's money by Tenant, while the payment of late charges is to compensate Landlord for Landlord's processing, administrative and other costs
incurred by Landlord as a result of Tenant's delinquent payments. Acceptance of any such interest and late charge will not constitute a waiver of the Tenant's default with respect to the overdue
amount, or prevent Landlord from exercising any of the other rights and remedies available to Landlord. If Tenant incurs a late charge more than three (3) times in any period of twelve (12) months
during the Lease Term, then, notwithstanding that Tenant cures the late payments for which such late charges are imposed, Landlord will have the right to require Tenant thereafter to pay all
installments of Monthly Base Rent quarterly in advance throughout the remainder of the Lease Term. Notwithstanding anything to the contrary in this subparagraph (f), with respect to the first
delinquent installment of Monthly Base Rent in each calendar year, no interest shall accrue and no late charge shall be payable provided that Tenant pays to Landlord such delinquent installment of
Monthly Base Rent within five (5) days after Landlord's delivery of written notice that such installment is past due. 

        (g)    Rights and Remedies Cumulative.    All rights, options and remedies of Landlord contained in this Lease will be
construed and held to be cumulative, and no one of them will be exclusive of the other, and Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which
may be provided by law or in equity, whether or not stated in this Lease. Nothing in this Paragraph 22 will be deemed to limit or otherwise affect Tenant's indemnification of Landlord pursuant to any
provision of this Lease. 

23.    LANDLORD'S DEFAULT.    Landlord will not be in default in the performance of any obligation required to be performed by
Landlord under this Lease unless Landlord fails to perform such obligation within thirty (30) days after the receipt of written notice from Tenant specifying in detail Landlord's failure to perform;
provided however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance, then Landlord will not be deemed in default if it commences such
performance within such thirty (30) day period and thereafter diligently pursues the same to completion. Upon any default by Landlord, Tenant may exercise any of its rights provided at law or in
equity, subject to the limitations on liability set forth in Paragraph 35 of this Lease. 

24.    ASSIGNMENT AND SUBLETTING.    

        (a)    Restriction on Transfer.    Except as expressly provided in this Paragraph 24, Tenant will not, either
voluntarily or by operation of law, assign or encumber this Lease or any interest herein or sublet the Premises or any part thereof, or permit the use or occupancy of the Premises by any other party
other than Tenant (any such assignment, encumbrance, sublease or the like will sometimes be referred to as a "Transfer"), without the prior written consent of Landlord, which consent Landlord will not
unreasonably withhold. Notwithstanding the foregoing, under no circumstances may Tenant sublease (whether in one or more transactions) more than fifty percent (50%) of the Premises in the aggregate. 

        (b)    Corporate and Partnership Transfers.    For purposes of this Paragraph 24, if Tenant is a corporation,
partnership or other entity, any transfer, assignment, encumbrance or hypothecation of fifty percent (50%) or more (individually or in the aggregate) of any stock or other ownership interest in such
entity, and/or any transfer, assignment, hypothecation or encumbrance of any controlling ownership or voting interest in such entity, will be deemed a Transfer and will be subject to all of the
restrictions and provisions contained in this Paragraph 24. Notwithstanding the foregoing, the immediately preceding sentence will not apply to any transfers of stock of Tenant if Tenant is a
publicly-held corporation and such stock is transferred publicly over a recognized security exchange or over-the-counter market. 

        (c)    Permitted Controlled Transfers.    Notwithstanding the provisions of this Paragraph 24 to the contrary, Tenant
may assign this Lease or sublet the Premises or any portion thereof ("Permitted Transfer"), without Landlord's consent, to any parent, subsidiary or affiliate entity which controls, is controlled by
or is under common control with Tenant, or to any entity resulting from a merger or 

23

 

consolidation with Tenant, or to any person or entity which acquires substantially all the assets of Tenant's business as a going concern, provided that: (i) at least ten (10) days prior to such
assignment or sublease, Tenant delivers to Landlord the financial statements and other financial and background information of the assignee or sublessee described in Subparagraph 24(d) below; (ii) if
an assignment, the assignee assumes, in full, the obligations of Tenant under this Lease (or if a sublease, the sublessee of a portion of the Premises or Term assumes, in full, the obligations of
Tenant with respect to such portion); (iii) the financial net worth of the assignee or sublessee immediately after the effective date of the proposed assignment or sublease is sufficient to fulfill
the obligations imposed by the Transfer and this Lease; (iv) Tenant remains fully liable under this Lease; and (v) the use of the Premises under Paragraph 8 remains unchanged. 

        (d)    Transfer Notice.    If Tenant desires to effect a Transfer, then at least fifteen (15) days prior to the date
when Tenant desires the Transfer to be effective (the "Transfer Date"), Tenant agrees to give Landlord a notice (the "Transfer Notice"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as "Transferee"), reasonable information (including references) concerning the character, ownership, and financial condition
of the proposed Transferee, the Transfer Date, any ownership or commercial relationship between Tenant and the proposed Transferee, and the consideration and all other material terms and conditions of
the proposed Transfer, all in such detail as Landlord may reasonably require. If Landlord reasonably requests additional detail, the Transfer Notice will not be deemed to have been received until
Landlord receives such additional detail, and Landlord may withhold consent to any Transfer until such information is provided to it. 

        (e)    Landlord's Options.    Within ten (10) days of Landlord's receipt of any Transfer Notice, and any additional
information requested by Landlord concerning the proposed Transferee's financial responsibility, Landlord will elect to do one of the following: (i) consent to the proposed Transfer; (ii) refuse such
consent, which refusal shall be on reasonable grounds including, without limitation, those set forth in Subparagraph 24(f) below; or (iii) terminate this Lease and recapture the Premises for reletting
by Landlord. 

        (f)    Reasonable Disapproval.    Landlord and Tenant hereby acknowledge that Landlord's disapproval of any proposed
Transfer pursuant to Subparagraph 24(e) will be deemed reasonably withheld if based upon any reasonable factor, including, without limitation, any or all of the following factors: (i) the proposed
Transferee is a governmental entity; (ii) the portion of the Premises to be sublet or assigned is irregular in shape with inadequate means of ingress and egress; (iii) the use of the Premises by the
Transferee (A) is not permitted by the use provisions in Paragraph 8 hereof, or (B) poses a risk of increased liability to Landlord; (iv) the Transferee does not have the financial capability to
fulfill the obligations imposed by the Transfer and this Lease, or (v) the Transferee poses a business or other economic risk which Landlord deems unacceptable. 

        (g)    Additional Conditions.    A condition to Landlord's consent to any Transfer of this Lease will be the delivery
to Landlord of a true copy of the fully executed instrument of assignment, sublease, transfer or hypothecation, and , in the case of an assignment, the delivery to Landlord of an agreement executed by
the Transferee in form and substance reasonably satisfactory to Landlord, whereby the Transferee assumes and agrees to by bound by all of the terms and provisions of this Lease and to perform all of
the obligations of Tenant hereunder. As a condition to Landlord's consent to any sublease, such sublease must provide that in the event of termination of this Lease for any reason, including without
limitation a voluntary surrender by Tenant, or in the event of any reentry or repossession of the Premises by Landlord, Landlord may, at its option, either (i) terminate the sublease, or (ii) take
over all of the right, title and interest of Tenant, as sublessor, under such sublease, in which case such sublessee will attorn to Landlord, but that nevertheless Landlord will not (1) be liable for
any previous act or omission of Tenant under such sublease, (2) be subject to any defense or offset previously accrued in favor of the sublessee against Tenant, or (3) be bound by any previous 

24

 

modification of any sublease made without Landlord's written consent, or by any previous prepayment by sublessee of more than one month's rent. 

        (h)    Excess Rent.    If Landlord consents to any assignment of this Lease, Tenant agrees to pay to Landlord, as
additional rent, fifty percent (50%) of all sums and other consideration payable to and for the benefit of Tenant by the assignee on account of the assignment, as and when such sums and other
consideration are due and payable by the assignee to or for the benefit of Tenant (or, if Landlord so requires, and without any release of Tenant's liability for the same, Tenant agrees to instruct
the assignee to pay such sums and other consideration directly to Landlord). If for any sublease, Tenant receives rent or other consideration, either initially or over the term of the sublease, in
excess of the rent fairly allocable to the portion of the Premises which is subleased based on square footage, Tenant agrees to pay to Landlord as additional rent fifty percent (50%) of the excess of
each such payment of rent or other consideration received by Tenant promptly after its receipt. In calculating excess rent or other consideration which may be payable to Landlord under this paragraph,
Tenant will be entitled to
deduct commercially reasonable third party brokerage commissions and attorneys' fees and other amounts reasonably and actually expended by Tenant in connection with such assignment or subletting if
acceptable written evidence of such expenditures is provided to Landlord. Tenant acknowledges and agrees that this Subparagraph 24(h) is not applicable to any Early Sublease Rents (defined in
Subparagraph 24(i) below) collected by Tenant prior to the Rent Commencement Date under this Lease. 

        (i)    Termination Rights.    If Tenant requests Landlord's consent to any assignment of this Lease, Landlord will
have the right, as provided in Subparagraph 24(e), to terminate this Lease effective as of the date Tenant proposes to assign. Landlord will exercise such termination right, if at all, by giving
written notice to Tenant within ten (10) days of receipt by Landlord of the financial responsibility information required by this Paragraph 24. Tenant understands and acknowledges that the option, as
provided in this Paragraph 24, to terminate this Lease rather than approve the assignment, is a material inducement for Landlord's agreeing to lease the Premises to Tenant upon the terms and
conditions herein set forth. 

        (j)    No Release.    No Transfer will release Tenant of Tenant's obligations under this Lease or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be performed by Tenant hereunder. Landlord may require that, while Tenant is in default under this Lease, any Transferee
remit directly to Landlord on a monthly basis, all monies due Tenant by said Transferee. However, the acceptance of rent by Landlord from any other person will not be deemed to be a waiver by Landlord
of any provision hereof. Consent by Landlord to one Transfer will not be deemed consent to any subsequent Transfer. In the event of default by any Transferee of Tenant or any successor of Tenant in
the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such Transferee or successor. Landlord may consent to
subsequent assignments of this Lease or sublettings or amendments or modifications to this Lease with assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining
its or their consent thereto and any such actions will not relieve Tenant of liability under this Lease. 

        (k)    Administrative and Attorneys' Fees.    If Tenant effects a Transfer or requests the consent of Landlord to any
Transfer (whether or not such Transfer is consummated), with the exception of any Early Sublease (defined in subparagraph (1) below), then, upon demand, Tenant agrees to pay Landlord a non-refundable
administrative fee of Two Hundred Fifty Dollars ($250.00), plus any reasonable attorneys' and paralegal fees (not to exceed $1,000 for each such Transfer) incurred by Landlord in connection with such
Transfer or request for consent (whether attributable to Landlord's in-house attorneys or paralegals or otherwise.) Acceptance of the Two Hundred Fifty Dollar ($250.00) administrative fee and/or
reimbursement of Landlord's attorneys' and paralegal fees will in no event obligate Landlord to consent to any proposed Transfer. 

25

 

        (l)    Subleases Entered into Prior to Estimated Commencement Date.    Notwithstanding anything to the contrary
contained within this Paragraph 24, Landlord and Tenant agree that Tenant may sublease up to
fifty percent (50%) of the Premises whereby a subtenant may be allowed to commence business operations in a portion of the Premises prior to the Estimate Rent Commencement Date (i.e.,
October 1, 2001) so long as Tenant receives Landlord's prior written consent as required under the terms of this Paragraph 24 and Tenant pays to Landlord the "Early Sublease Rents" (defined
herein) in accordance with this Subparagraph (1) (any such sublease shall be referred to herein as an "Early Sublease"). Tenant shall pay to Landlord as additional rent under the terms of this
Lease fifty percent (50%) of all effective rent accruing prior to the Rent Commencement Date under this Lease (the "Early Sublease Rents") as and when such rent would be due as contemplated in this
paragraph below. Landlord and Tenant acknowledge and agree that the Early Sublease Rents due Landlord under this Subparagraph 24(1) shall be calculated in accordance with the following:
(i) fifty percent (50%) of all rent and other consideration attributable to the period of time prior to the Rent Commencement Date under this Lease minus (ii) fifty percent (50%) of any
brokerage commissions paid by Tenant with respect to said subleases attributable to the same period of time. For example, if Tenant enters into a five (5) year sublease commencing August 1, 2001 at a
rental rate equal to $5,000.00 per month, with a four percent (4%) brokerage commission, and the Rent Commencement Date under this Lease is October 1, 2001, Landlord shall be entitled to fifty
percent of $10,000.00 (sublease rent for the months of August and September, 2001) minus fifty percent (50%) of the total brokerage commission (i.e., 4% of $300,000.00 = $12,000.00) applicable to the
months of August and September, 2001 (i.e., $12,000.00/60 = $200 per month), for a total of $4,800.000. Notwithstanding the foregoing, if Tenant enters into any Early Sublease whereby Tenant grants
free rent or any similar rental concession or early occupancy to any subtenant during any period of time prior to the Rent Commencement Date under this Lease, the Early Sublease Rents shall be
calculated on an effective basis using the monthly average of all rent and other consideration to be payable from such subtenant during the entire period of occupancy under the Early Sublease rather
than just that rent and other consideration payable prior to the Rent Commencement Date under this Lease in accordance with clause (i) above; provided, however, normal rent escalations not in excess
of four percent (4%) per annum shall not alone trigger the determination of Early Sublease Rents on an effective basis under this sentence. Tenant further acknowledges that, for all purposes of this
Lease, the Commencement Date shall be deemed to be that date any subtenant occupies any portion of the Premises (as applicable, the "Subleased Premises"), provided that Tenant shall not be liable for
any payments under this Lease (with the exception of Monthly Base Rent [under Paragraph 5(a) of this Lease] and Tenant's Percentage of Operating Expenses
[under Paragraph 6(a) of this Lease] and associated charges such as interest and/or late charges, if applicable) (unless Tenant occupies any portion of the Premises)
until the Rent Commencement Date under this Lease. 

25.    SUBORDINATION.    Without the necessity of any additional document being executed by Tenant for the purpose of effecting a
subordination, and at the election of Landlord or any mortgagee of beneficiary with a deed of trust encumbering the Premises, or any lessor of a ground or underlying lease with respect to the
Premises, this Lease will be subject and subordinate at all times to: (i) all ground leases or underlying leases which may not exist or hereafter be executed affecting the Premises; and
(ii) the lien of any mortgage or deed of trust which may now exist or hereafter be executed for which the Premises, or Landlord's interest and estate in any of said items, is specified as
security; provided that Tenant receives a commercially reasonable non-disturbance agreement from the respective lessor, mortgagee or beneficiary. Notwithstanding the foregoing, Landlord reserves the
right to subordinate any such ground lease or underlying leases or any such liens to this Lease. If any such ground lease or underlying lease terminates for any reason or any such mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any reason, at the election of Landlord's successor in interest, Tenant agrees to attorn to and become the tenant of such
successor in which event Tenant's right to possession of the Premises will not be disturbed as long as Tenant is not in 

26

 

default under this Lease. Tenant hereby waives its rights under any law which gives or purports to give Tenant any right to terminate or otherwise adversely affect this Lease and the obligations of
Tenant hereunder in the event of any such foreclosure proceeding or sale. Tenant covenants and agrees to execute and deliver, upon demand by Landlord and in the form reasonably required by Landlord,
any additional documents evidencing the priority or subordination of this Lease and Tenant's attornment agreement with respect to any such ground lease or underlying leases or the lien of any such
mortgage or deed of trust. If Tenant fails to sign and return any such documents within ten (10) days of receipt, Tenant will be in default hereunder. 

26.    ESTOPPEL CERTIFICATE.    Within fifteen (15) days following any written request which Landlord may make from time to time,
Tenant agrees to execute and deliver to Landlord a statement, in a form substantially similar to the form of Exhibit "F" attached hereto or as
may reasonably be required by Landlord's lender, certifying: (i) the date of commencement of this Lease; (ii) the fact that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that this Lease is in full force and effect, and stating the date and nature of such modifications); (iii) the date to which the rent and other sums payable under
this Lease have been paid; (iv) that, to the best of Tenant's knowledge, there are no current defaults under this Lease by either Landlord or Tenant except as specified in Tenant's statement;
and (v) such other matters reasonably requested by Landlord. Landlord and Tenant intend that any statement delivered pursuant to this Paragraph 26 may be relied upon by any mortgagee,
beneficiary, purchaser or prospective purchaser of the Premises or any interest therein. Tenant's failure to deliver such statement within such time will be conclusive upon Tenant (i) that this
Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord's performance, and (iii) that not
more than one (1) month's rent has been paid in advance. Without limiting the foregoing, if Tenant fails to deliver any such statement within such fifteen (15) day period, Landlord may deliver to
Tenant an additional request for such statement and Tenant's failure to delivery such statement to Landlord within five (5) days after delivery of such additional request will constitute a default
under this Lease. 

27.    EASEMENTS.    Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications that
Landlord deems necessary or desirable, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably or
materially interfere with the use of the Premises by Tenant. Tenant shall sign any of the aforementioned documents upon request of Landlord and failure to do so shall constitute a material breach of
this Lease. 

28.    RULES AND REGULATIONS.    Tenant agrees to faithfully observe and comply with the "Rules and Regulations," a copy of which is
attached hereto and incorporated herein by this reference as Exhibit "G", and all reasonable and nondiscriminatory modifications thereof and additions
thereto from time to time put into effect by Landlord. 

29.    MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.    If, in connection with Landlord's obtaining or entering
into any financing or ground lease affecting the Premises, the lender or ground lessor requests modifications to this Lease, Tenant, within twenty (20) days after request therefor, agrees to execute
an amendment to this Lease incorporating such modifications, provided such modifications are acceptable to Tenant in the exercise of its reasonable discretion. In no event will Tenant be required to
modify the Lease to increase the obligations of
Tenant under this Lease or adversely affect the leasehold estate created by this Lease. In the event of any such default on the part of Landlord, Tenant will give notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Premises or ground lessor of Landlord whose address has been furnished to Tenant, and Tenant agrees to offer such beneficiary,
mortgagee or ground lessor the same opportunity to cure the default as is provided to Landlord under this Lease. 

27

 

30.    DEFINITION OF LANDLORD.    The term "Landlord," as used in this Lease, so far as covenants or obligations on the part of
Landlord are concerned, means and includes only the owner or owners, at the time in question, of the fee title of the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other than a transfer for security purposes only), Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) will be automatically relieved from and after the date of such transfer, assignment or conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be performed, so long as the transferee assumes in writing all such covenants and obligations of Landlord arising after the
date of such transfer. Landlord and Landlord's transferees and assignees have the absolute right to transfer all or any portion of their respective title and interest in the Premises, the Building,
the Development and/or this Lease without the consent of Tenant, and such transfer or subsequent transfer will not be deemed a violation on Landlord's part of any of the terms and conditions of this
Lease. 

31.    WAIVER.    The waiver by either party of any breach of any term, covenant or condition herein contained will not be deemed to
be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained, nor will any custom or practice which may develop between the parties in the administration
of the terms hereof be deemed a waiver of or in any way affect the right of either party to insist upon performance in strict accordance with said terms. The subsequent acceptance of rent or any other
payment hereunder by Landlord will not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the
particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. No acceptance by Landlord of a lesser sum than the basic rent and
additional rent or other sum then due will be deemed to be other than on account of the earliest installment of such rent or other amount due, nor will any endorsement or statement on any check or any
letter accompanying any check be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such installment or
other amount or pursue any other remedy provided in this Lease. The consent or approval of Landlord to or of any act by Tenant requiring Landlord's consent or approval will not be deemed to waive or
render unnecessary Landlord's consent or approval to or of any subsequent similar acts by Tenant. 

32.    PARKING.    So long as this Lease is in effect and provided Tenant is not in default hereunder, Landlord grants to Tenant and
Tenant's customers, suppliers, employees and invitees ("Tenant's Authorized Users") a non-exclusive license to use up to the number of parking spaces designated in Paragraph 1(q) hereof in the
designated parking areas in the Common Areas. All visitor parking will be on a non-exclusive, in common basis with all other visitors and guests of the Development. Tenant will not use or allow any of
Tenant's Authorized Users to use any parking spaces which have been
specifically assigned by Landlord for other uses such as visitor parking or which have been designated by any governmental entity as being restricted to certain uses. Landlord may assign any
unreserved and unassigned parking spaces and/or make all or any portion of such spaces reserved, if Landlord reasonably determines that it is necessary for orderly and efficient parking or for any
other reasonable reason. Tenant and Tenant's Authorized Users shall comply with all rules and regulations regarding parking set forth in Exhibit "G"
attached hereto and Tenant agrees to cause its employees, subtenants, assignees, contractors, suppliers, customers and invitees to comply with such rules and regulations. Landlord reserves the right
from time to time to modify and/or adopt such other reasonable and non-discriminatory rules and regulations for the parking facilities as it deems reasonably necessary for the operation of the parking
facilities. Subject to Tenant's compliance with laws, Landlord agrees that Tenant may park in the loading bay areas for the Premises which are not being used as loading bays during the Lease Term. 

28

 

33.    FORCE MAJEURE.    If either Landlord or Tenant is delayed, hindered in or prevented from the performance of any act required
under this Lease by reason of strikes, lock-outs, labor troubles, inability to procure standard materials, failure of power, riots, civil unrest or insurrection, war, fire, earthquake, flood or other
natural disaster, unusual and unforeseeable delay which results from an interruption of any public utilities (e.g., electricity, gas, water, telephone) or other unusual and unforeseeable delay not
within the reasonable control of the party delayed in performing work or doing acts required under the provisions of this Lease (a "force majeure delay"), then performance of such act will be excused
for the period of the delay and the period for the performance of any such act will be extended for a period equivalent to the period of such delay. Except with regard to the initial build-out of the
Premises as contemplated in Exhibit "C", force majeure delays will also include restrictive governmental laws, regulations or orders or governmental
action or inaction (including failure, refusal or delay in issuing permits, approvals and/or authorizations which is not the result of the action or inaction of the party claiming such delay). The
provisions of this Paragraph 33 will not operate to excuse Tenant from prompt payment of rent or any other payments required under the provisions of this Lease. 

34.    SIGNS.    Subject to Tenant's compliance with the terms of this Paragraph 34, Tenant is hereby granted the right
(i) to install on the Northeast corner of the Building one Tenant identification sign and (ii) to install one monument sign on the Premises and (iii) such other identification signs as
Tenant may deem necessary for the operation of its business and which are approved by Landlord in advance in writing. Landlord and Tenant will mutually determine the exact locations on the Premises
for Tenant's signs. Tenant agrees to have Landlord install and maintain Tenant's signs in such designated locations in accordance with this Paragraph 34 at Tenant's sole cost and expense.
Tenant has no right to install Tenant identification signs in any other location in, on or about the Premises or the Development in any interior or exterior common areas. The size, design, color and
other physical aspects of any and all permitted sign(s) will be subject to (i) Landlord's written approval prior to installation, which approval may be withheld in Landlord's reasonable
discretion, (ii) any covenants, conditions or restrictions governing the Premises, and (iii) any applicable municipal or governmental permits and approvals. Tenant will be solely responsible
for all costs for installation, maintenance, repair and removal of any Tenant identification sign(s). If Tenant fails to remove Tenant's sign(s) upon termination of this Lease and repair any damage
caused by such removal, Landlord may do so at Tenant's sole cost and expense. Tenant agrees to reimburse Landlord for all costs incurred by Landlord to effect any installation, maintenance or removal
on Tenant's account, which amount will be deemed additional rent, and may
include, without limitation, all sums disbursed, incurred or deposited by Landlord including Landlord's costs, expenses and actual attorneys' fees with interest thereon at the Interest Rate from the
date of Landlord's demand until paid by Tenant. 

35.    LIMITATION ON LIABILITY.    In consideration of the benefits accruing hereunder, Tenant on behalf of itself and all
successors and assigns of Tenant covenants and agrees that, in the event of any actual or alleged failure, breach or default hereunder by Landlord: (a) tenant's recourse against Landlord for
monetary damages will be limited to Landlord's interest in the Premises including, subject to the prior rights of any Mortgagee, Landlord's interest in the rents of the Premises and any insurance
proceeds payable to Landlord; (b) except as may be necessary to secure jurisdiction of Landlord, no member or partner of Landlord shall be sued or named as a party in any suit or action and no
service of process shall be made against any member or partner of Landlord; (c) no member or partner of Landlord shall be required to answer or otherwise plead to any service of process;
(d) no judgment will be taken against any member or partner of Landlord and any judgment taken against any member or partner of Landlord may be vacated and set aside at any time after the fact;
(e) no writ of execution will be levied against the assets of any member or partner of Landlord; (f) the obligations under this Lease do not constitute personal obligations of the
individual members, partners, directors, officers or shareholders of Landlord, and Tenant shall not seek recourse against the individual members, partners, directors, officers or shareholders of
Landlord or any of their personal assets for satisfaction of any 

29

 

liability in respect to this Lease; and (g) these covenants and agreements are enforceable both by Landlord and also by any member or partner of Landlord. 

36.    FINANCIAL STATEMENTS.    Prior to the execution of this Lease by Landlord and at any time during the Term of this Lease upon
ten (10) days prior written notice from Landlord, Tenant agrees to provide Landlord with a current financial statement for Tenant and any guarantors of Tenant and financial statements for the two (2)
years prior to the current financial statement year for Tenant and any guarantors of Tenant. Such statements are to be prepared in accordance with generally accepted accounting principles and, if such
is the normal practice of Tenant, audited by an independent certified public accountant. 

37.    QUIET ENJOYMENT.    Landlord covenants and agrees with Tenant that upon Tenant paying the rent required under this Lease and
paying all other charges and performing all of the covenants and provisions on Tenant's part to be observed and performed under this Lease, Tenant may peaceably and quietly have, hold and enjoy the
Premises in accordance with this Lease without hindrance or molestation by Landlord or its agents. 

38.    AUCTIONS.    Tenant shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the
Premises without first having obtained Landlord's prior written consent. 

39.    MISCELLANEOUS    

        (a)    Conflict of Laws.    This Lease shall be governed by and construed solely pursuant to the laws of the State,
without giving effect to choice of law principles thereunder. 

        (b)    Successors and Assigns.    Except as otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. 

        (c)    Professional Fees and Costs.    If either Landlord or Tenant should bring suit against the other with respect
to this Lease, then all costs and expenses, including without limitation, actual professional fees and costs such as appraisers', accountants' and attorneys' fees and costs, incurred by the party
which prevails in such action, whether by final judgment or out of court settlement, shall be paid by the other party, which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment. As used herein, attorneys' fees and costs shall include, without
limitation, attorneys' fees, costs and expenses incurred in connection with any (i) postjudgment motions; (ii) contempt proceedings; (iii) garnishment, levy, and debtor and third
party examination; (iv) discovery; and (v) bankruptcy litigation. 

        (d)    Terms and Headings.    The words "Landlord" and "Tenant" as used herein shall include the plural as well as the
singular. Words used in any gender include other genders. The paragraph headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part
hereof. 

        (e)    Time.    Time is of the essence with respect to the performance of every provision of this Lease in which time
of performance is a factor. 

        (f)    Prior Agreement; Amendments.    This Lease constitutes and is intended by the parties to be a final, complete
and exclusive statement of their entire agreement with respect to the subject matter of this Lease. This Lease supersedes any and all prior and contemporaneous agreements and understandings of any
kind relating to the subject matter of this Lease. There are no other agreements, understandings, representations, warranties, or statements, either oral or in written form, concerning the subject
matter of this Lease. No alteration, modification, amendment or interpretation of this Lease shall be binding on the parties unless contained in a writing which is signed by both parties. 

30

 

        (g)    Separability.    The provisions of this Lease shall be considered separable such that if any provision or part
of this Lease is ever held to be invalid, void or illegal under any law or ruling, all remaining provisions of this Lease shall remain in full force and effect to the maximum extent permitted by law. 

        (h)    Recording.    Neither Landlord nor Tenant shall record this Lease nor a short form memorandum thereof without
the consent of the other. 

        (i)    Counterparts.    This Lease may be executed in one or more counterparts, each of which shall constitute an
original and all of which shall be one and the same agreement. 

        (j)    Nondisclosure of Lease Terms.    Tenant acknowledges and agrees that the terms of this Lease are confidential
and constitute proprietary information of Landlord. Disclosure of the terms could adversely affect the ability of Landlord to negotiate other leases and impair Landlord's relationship with other
tenants. Accordingly, Tenant agrees that it, and its partners, officers, directors, employees, agents and attorneys, shall not intentionally and voluntarily disclose the terms and conditions of this
Lease to any newspaper or other publication or any other tenant or apparent prospective tenant of the Building or other portion of the Development, or real estate agent, either directly or indirectly,
without the prior written consent of Landlord, provided, however, that Tenant may disclose the terms to prospective subtenants or assignees under this Lease. 

40.    EXECUTION OF LEASE    

        (a)    Joint and Several Obligations.    If more than one person executes this Lease as Tenant, their execution of
this Lease will constitute their covenant and agreement that (i) each of them is jointly and severally liable for the keeping, observing and performing of all of the terms, covenants,
conditions, provisions and agreements of this Lease to be kept, observed and performed by Tenant, and (ii) the term "Tenant" as used in this Lease means and includes each of them jointly and
severally. The act of or notice from, or notice or refund to, or the signature of any one or more of them, with respect to the tenancy of this Lease, including, but not limited to, any renewal,
extension, expiration, termination or modification of this Lease, will be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of
them had so acted or so given or received such notice or refund or so signed. 

        (b)    Tenant as Corporation or Partnership.    If Tenant executes this Lease as a corporation or partnership, then
Tenant and the persons executing this Lease on behalf of Tenant represent and warrant that such entity is duly qualified and in good standing to do business in California and that the individuals
executing this Lease on Tenant's behalf are duly authorized to execute and deliver this Lease on its behalf, and in the case of a corporation, in accordance with a duly adopted resolution of the board
of directors of Tenant, a copy of which is to be delivered to Landlord on execution hereof, if requested by Landlord, and in accordance with the by-laws of Tenant, and, in the case of a partnership,
in accordance with the partnership agreement and the most current amendments thereto, if any, copies of
which are to be delivered to Landlord on execution hereof, if requested by Landlord, and that this Lease is binding upon Tenant in accordance with its terms. 

        (c)    Examination of Lease.    Submission of this instrument by Landlord to Tenant for examination or signature by
Tenant does not constitute a reservation of or option for lease, and it is not effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant. 

31

 

        IN
WITNESS WHEREOF, the parties have caused this Lease to be duly executed by their duly authorized representatives as of the date first above written. 

	TENANT:	 	LANDLORD:
	

CUTTER & BUCK, INC.,

a Washington corporation	
 	

ZELMAN RENTON, LLC,

a Delaware limited liability company
	

By:	
 	

/s/  MARTIN MARKS      
	
 	

By:	
 	

ZIP Renton, LLC, a Delaware LLC
	 	 	Print Name:	Martin Marks
	 	 	 	Its:	 	Managing Member
	 	 	Title:	President
	 	 	 	By:	 	Zelman Industrial Partners, Inc.,

a California corporation,
	 	 	 	 	 	 	 	 	 	Its:	 	Managing Member
	

By:	
 	

/s/  S. LOWBER      
	
 	

 	
 	

 	
 	

By:	
 	

/s/  BEN REILING      

	 	 	Print Name:	S. Lowber	 	 	 	 	 	 	 	Ben Reiling
	 	 	 	
	 	 	 	 	 	 	 	Its:	 	President
	 	 	Title:	CFO
	 	 	 	 	 	 	 	 	 	 

32

  

	STATE OF WASHINGTON	 	)	 	 
	 	 	) ss.	 	 
	COUNTY OF KING	 	)	 	 

        I
certify that I now or have satisfactory evidence that Martin J. Marks is the person who appeared before me, and said person acknowledged that he/she was authorized to
execute the instrument and acknowledged it as the President of Cutter & Buck, Inc. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

	[NOTARY PUBLIC SEAL]

  

(Use this space for notarial stamp/seal)	 	Dated:	 	May 15, 2001

	 	 	 	 	/s/ SUSAN M. CANNON

	 	 	 	 	Notary Public	 
	 	 	 	 	Print Name:	Susan M. Cannon

	 	 	 	 	My commission expires 04/06/03

	STATE OF WASHINGTON	 	)	 	 
	 	 	) ss.	 	 
	COUNTY OF KING	 	)	 	 

        I
certify that I now or have satisfactory evidence that Steve Lowber (S. Lowber) is the person who appeared before me, and said person acknowledged that he/she was
authorized to execute the instrument and acknowledged it as the CFO of Cutter & Buck, Inc. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

	[NOTARY PUBLIC SEAL]

  

(Use this space for notarial stamp/seal)	 	Dated:	 	May 15, 2001

	 	 	 	 	/s/ SUSAN M. CANNON

	 	 	 	 	Notary Public	 
	 	 	 	 	Print Name:	Susan M. Cannon

	 	 	 	 	My commission expires 04/06/03

	STATE OF CALIFORNIA	 	)	 	 
	 	 	) ss.	 	 
	COUNTY OF LOS ANGELES	 	)	 	 

        I
certify that I now or have satisfactory evidence that Ben Reiling is the person who appeared before me, and said person acknowledged that he/she was authorized to
execute the instrument and acknowledged it as the President of Zelman Renton, LLC to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

	[NOTARY PUBLIC SEAL]

  

(Use this space for notarial stamp/seal)	 	Dated:	 	May 16, 2001

	 	 	 	 	/s/ SANDRA L. GARAY

	 	 	 	 	Notary Public	 
	 	 	 	 	Print Name:	Sandra L. Garay

	 	 	 	 	My commission expires 7-1-04

33

  

 
 

ADDENDUM TO INDUSTRIAL LEASE    
  

        THIS ADDENDUM TO INDUSTRIAL LEASE ("Addendum") is attached to and constitutes a part of that certain Industrial Lease [Single Tenant - Triple
Net] between ZELMAN RENTON, LLC, a Delaware limited liability company ("Landlord"), and CUTTER & BUCK, INC., a Washington corporation ("Tenant"). Landlord and Tenant agree that,
notwithstanding anything contained in the Lease to the contrary, the provisions set forth in this Addendum will be deemed to be a part of the Lease and will supersede any contrary provisions in the
Lease and shall prevail and control for all purposes. All references in the Lease and in this Addendum to the defined term "Lease" are to be construed to mean the Lease as amended and supplemented by
this Addendum. Capitalized terms which are not defined in this Addendum have the meanings given to them in the Lease. The paragraph below is numbered consecutively with those of the Lease. 

41.    OPTIONS TO EXTEND.    

        (a)    Extension Options.    Subject to the terms of this Paragraph 41 and Paragraph 42 below, Landlord
hereby grants to Tenant two (2) options (the "Extension Options") to extend the Term with respect to the entire Premises each for an additional period of five (5) years (each, an "Option Term"
and collectively, the "Option Terms"), on the same terms, covenants and conditions as provided for in this Lease during the initial Lease Term, except that (i) Tenant shall have no further
extension rights, and (ii) Monthly Base Rent shall be established based on the "fair market rental rate" for the Premises for the applicable Option Term as defined and determined in accordance
with the provisions of this Paragraph 41 below. 

        (b)    Exercise of Extension Option.    Each Extension Option must be exercised, if at all, by written notice
("Extension Notice") delivered by Tenant to Landlord no later than the date which is two hundred ten (210) days, and no earlier than the date which is one (1) year, prior to the expiration of the then
current Term of this Lease. 

        (c)    Fair Market Rental Rate.    The term "fair market rental rate" as used in this addendum shall mean the annual
amount per rentable square foot, projected during the relevant period, that a willing, comparable, non-equity, renewal tenant (excluding sublease and assignment transactions) would pay, and a willing
institutional landlord of a comparable quality industrial building located in the Renton, Tukwila and North Kent, Washington area North of 212th Street ("Comparison Area") would accept, at
arm's length (what Landlord is accepting in current transactions for other buildings within the Development may be considered), for space comparable in size and quality as the leased area at issue
taking into account the age, quality and layout of the existing improvements in the leased area at issue and taking into account items that professional real estate brokers customarily consider,
including, but not limited to, rental rates, industrial space availability, tenant size, tenant improvement allowances, parking, loading, power, ceiling height, sprinkler capacity, and any other
economic matters then being charged by Landlord or the lessors of such similar industrial buildings. In no event will Monthly Base Rent decrease from that payable in the last year of the immediately
preceding Lease Term as a result of the fair market rental rate determination provided for in this Paragraph 41. In no event will any consideration be given, in the fair market rental rate
determination, to any amounts to be paid by Tenant during the Option term as repayment of the Above Standard Allowance described in Paragraph 5(b) of the Work Letter Agreement. 

        (d)    Tenant's Review Period.    Landlord's determination of fair market rental rate shall be delivered to Tenant in
writing not later than thirty (30) days following Landlord's receipt of Tenant's Extension Notice. Tenant will have thirty (30) days ("Tenant's Review Period") after receipt of Landlord's notice of
the fair market rental rate within which to accept such fair market rental rate or to object thereto in writing. Tenant's failure to object to the fair market rental rate submitted by Landlord in
writing within Tenant's Review Period will conclusively be deemed Tenant's approval and acceptance thereof. If Tenant objects to the fair market rental rate submitted by Landlord within 

1

 

Tenant's Review Period, then Landlord and Tenant will attempt in good faith to agree upon such fair market rental rate using their best good faith efforts. If Landlord and Tenant fail to reach
agreement on such fair market rental rate within fifteen (15) days following the expiration of Tenant's Review Period (the "Outside Agreement Date"), then each party's determination will be submitted
to appraisal in accordance with the provisions below. 

        (e)    Appraisal    

        (i)    Landlord
and Tenant shall each appoint one independent, unaffiliated real estate broker (referred to herein as an "appraiser" even though only a broker) who has been
active over the five (5) year period ending on the date of such appointment in the leasing of industrial space in the Comparison Area. Each such appraiser will be appointed within thirty
(30) days after the Outside Agreement Date. 

        (ii)  The
two (2) appraisers so appointed will within fifteen (15) days of the date of the appointment of the last appointed appraiser agree upon and appoint a third
appraiser who shall be qualified under the same criteria set forth herein above for qualification of the initial two (2) appraisers. 

        (iii)  The
determination of the appraisers shall be limited solely to the issue of whether Landlord's or Tenant's last proposed (as of the Outside Agreement Date) new Monthly
Base Rent for the Premises is the closest to the actual new Monthly Base Rent for the Premises as determined by the appraisers, taking into account the requirements of Paragraph 41(c) and this
Paragraph 41(e) regarding same. 

        (iv)  The
three (3) appraisers shall within thirty (30) days of the appointment of the third appraiser reach a decision as to whether the parties shall use Landlord's or
Tenant's submitted new Monthly Base Rent, and shall notify Landlord and Tenant thereof. 

        (v)  The
decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or
undo the exercise of the Extension Option. The cost of each party's appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if
necessary) shall be shared equally by Landlord and Tenant. 

        (vi)  If
either Landlord or Tenant fails to appoint an appraiser within the time period in Paragraph (e)(i) herein above, the appraiser appointed by one of them shall reach a
decision, notify Landlord and Tenant thereof and such appraiser's decision shall be binding upon Landlord and Tenant and neither party will have the right to reject the determination or undo the
exercise of the Extension Option. 

        (vii) If
the two (2) appraisers fail to agree upon and appoint a third appraiser, both appraisers shall be dismissed and the matter to be decided shall be forthwith
submitted to binding arbitration under the provisions of the American Arbitration Association. 

        (viii)  In
the event that the new Monthly Base Rent is not established prior to end of the initial Term of the Lease, the Monthly Base Rent immediately payable
at the commencement of the Option Term shall be based on $0.46 per square foot of the Building footprint (which includes office and non-office portions of the Building) plus  $0.85 per square foot of
office space then in the Premises (which rates shall not be considered a factor in determining the new Monthly Base Rent). Notwithstanding the above,
once the fair market rental is determined in accordance with this section, the parties shall settle any under or overpayment on the next Monthly Base Rent payment date falling not less than thirty
(30) days after such determination. 

2

 

42.    OPTIONS.    

        (a)  As
used in this Paragraph 42, the word "Options" means the Extension Options pursuant to Paragraph 41 herein. 

        (b)  The
Options are personal to the original Tenant executing this Lease and may be exercised only by the original Tenant executing this Lease while occupying the entire
Premises and without the intent of thereafter assigning this Lease or subletting the Premises and may not be exercised or be assigned, voluntarily or involuntarily, by any person or entity other than
the original Tenant executing this Lease; provided, that the Options may be exercised by the assignee (but not sublessee) of this Lease pursuant to a Permitted Transfer in accordance with
Paragraph 24(c). The Options are not assignable separate and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by reservation or otherwise. 

        (c)  Tenant
shall have no right to exercise the Options, notwithstanding any provision of the grant of either Option to the contrary, and Tenant's exercise of any Option may
be nullified by Landlord and deemed of no further force or effect, if Tenant shall be in default of any monetary obligation or material non-monetary obligation under the terms of this Lease as of
Tenant's exercise of the applicable Option or at the commencement of any Option event. 

43.    ARBITRATION.    If any dispute referenced in the last sentence of either Paragraph 14 or Paragraph 17 of this
Lease arises ("Dispute"), and if no other specific procedure is included in this Lease to resolve such Dispute, then such Dispute, if timely demanded pursuant to Subparagraph (a) below, shall
be resolved and adjudicated by binding arbitration in accordance with this Paragraph 41. The arbitrator shall be a neutral, disinterested retired judge selected by the parties from a panel of
retired judges available through the Judicial Arbitration and Mediation Service ("JAMS") or, if JAMS or its successor does not then exist, by any other arbitrator or retired judge affiliated with a
private, disinterested association providing arbitration services. Should the parties fail to agree on the selection of a disinterested, neutral arbitrator within twenty (20) days of written demand
accompanied by written notice of the Dispute by either party, either party may petition a Washington court of competent jurisdiction and proper venue to appoint an arbitrator. The arbitration shall be
held within sixty (60) days after the selection of the arbitrator. The parties hereby agree to allow the taking of depositions for discovery purposes in the arbitration proceedings. Any hearings
required for purposes of the arbitration shall be in Seattle, Washington at the offices of the arbitrator or such other place designated by the arbitrator. The arbitration procedure shall be subject
to the following: 

        (a)  Any
demand for arbitration shall be in writing and must be made and served on the other party within a reasonable time after the Dispute has arisen and in no event shall
the demand for arbitration be made after the earlier of the date which is (i) thirty (30) days after service by either party of summons and complaint, the subject matter of which is essentially
identical with the subject matter of the demand for arbitration, or (ii) the date that institution of legal or equitable proceedings based on such Dispute would be barred by the applicable
statute of limitations. 

        (b)  The
provisions of this Paragraph 43 are not intended to require Landlord or Tenant to arbitrate any matters relating to any default under this Lease, which
matters shall be governed by the applicable provisions of this Lease and/or applicable law. 

        (c)  All
proceedings involving the parties shall be reported by a certified shorthand court reporter and written transcripts of the proceedings shall be prepared and made
available to the parties. 

        (d)  The
arbitrator shall prepare and deliver to the parties factual findings in writing which shall include the reasons on which the decision of the arbitrator is based. The
arbitrator shall be bound by the provisions of this Lease, and shall not add to, subtract from or otherwise modify such provisions. 

3

 

        (e)  Final
decision by the arbitrator must be provided to the parties within thirty (30) days from the date on which the matter is submitted to the arbitrator. 

        (f)    The
prevailing party (as defined below) shall be awarded interest on the amount awarded (at the Interest Rate), reasonable attorneys' fees, expert and nonexpert witness
costs and expenses (including without limitation the fees and costs of the court reporter described in Subparagraph (c) above), and other costs and expenses incurred in connection with the
arbitration, unless the arbitrator for good cause determines otherwise. 

        (g)  As
used herein, the term "prevailing party" shall mean the party, if any, that the arbitrator determines is "clearly the prevailing party." 

        (h)  Costs
and fees of the arbitrator shall be borne by the nonprevailing party, unless the arbitrator for good cause determines otherwise. If there is no prevailing party,
the parties shall bear their own fees and costs and split the fees and costs of the arbitrator and court reporter. 

        (i)    The
award or decision of the arbitrator, which may include equitable relief, shall be final and judgment may be entered on it in accordance with applicable law in any
court having jurisdiction over the matter. The provisions of this Paragraph 43 are not intended to alter the applicable provisions of law which provide the grounds on which a court may vacate
an arbitration award. 

	TENANT:	 	LANDLORD:
	

CUTTER & BUCK, INC.,

a Washington corporation	
 	

ZELMAN RENTON, LLC,

a Delaware limited liability company
	

By:	
 	

/s/  MARTIN MARKS      
	
 	

By:	
 	

ZIP Renton, LLC, a Delaware LLC
	 	 	Print Name:	Martin Marks
	 	 	 	Its:	 	Managing Member
	 	 	Title:	President
	 	 	 	By:	 	Zelman Industrial Partners, Inc.,

a California corporation,
	 	 	 	 	 	 	 	 	 	Its:	 	Managing Member
	

By:	
 	

/s/  S. LOWBER      
	
 	

 	
 	

 	
 	

By:	
 	

/s/  BEN REILING      

	 	 	Print Name:	S. Lowber	 	 	 	 	 	 	 	Ben Reiling
	 	 	 	
	 	 	 	 	 	 	 	Its:	 	President
	 	 	Title:	CFO
	 	 	 	 	 	 	 	 	 	 

4

  

	STATE OF WASHINGTON	 	)	 	 
	 	 	) ss.	 	 
	COUNTY OF KING	 	)	 	 

        I
certify that I now or have satisfactory evidence that Martin J. Marks is the person who appeared before me, and said person acknowledged that he/she was authorized to
execute the instrument and acknowledged it as the President of Cutter & Buck, Inc. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

	[NOTARY PUBLIC SEAL]

  

(Use this space for notarial stamp/seal)	 	Dated:	 	May 15, 2001

	 	 	 	 	/s/ SUSAN M. CANNON

	 	 	 	 	Notary Public	 
	 	 	 	 	Print Name:	Susan M. Cannon

	 	 	 	 	My commission expires 04/06/03

	STATE OF WASHINGTON	 	)	 	 
	 	 	) ss.	 	 
	COUNTY OF KING	 	)	 	 

        I
certify that I now or have satisfactory evidence that Steve Lowber (S. Lowber) is the person who appeared before me, and said person acknowledged that he/she was
authorized to execute the instrument and acknowledged it as the CFO of Cutter & Buck, Inc. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

	[NOTARY PUBLIC SEAL]

  

(Use this space for notarial stamp/seal)	 	Dated:	 	May 15, 2001

	 	 	 	 	/s/ SUSAN M. CANNON

	 	 	 	 	Notary Public	 
	 	 	 	 	Print Name:	Susan M. Cannon

	 	 	 	 	My commission expires 04/06/03

	STATE OF CALIFORNIA	 	)	 	 
	 	 	) ss.	 	 
	COUNTY OF LOS ANGELES	 	)	 	 

        I
certify that I now or have satisfactory evidence that Ben Reiling is the person who appeared before me, and said person acknowledged that he/she was authorized to
execute the instrument and acknowledged it as the President of Zelman Renton, LLC to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. 

	[NOTARY PUBLIC SEAL]

  

(Use this space for notarial stamp/seal)	 	Dated:	 	May 16, 2001

	 	 	 	 	/s/ SANDRA L. GARAY

	 	 	 	 	Notary Public	 
	 	 	 	 	Print Name:	Sandra L. Garay

	 	 	 	 	My commission expires 7-1-04

5

  

 
 

EXHIBIT "A-I"    
  

SITE PLAN SHOWING PREMISES  

[SITE
PLAN GRAPHIC] 

1

  

 
 

EXHIBIT "A-II"    
  

BASE SPECIFICATIONS AND DESCRIPTION OF PLANS

FOR THE BUILDING  

Base
Specifications: 

	•
	234,489
Square Foot Footprint

	•
	30'
Minimum Clear Height

	•
	50'
× 45' Column spacing (57.5' at doors, see attached floor plan)

	•
	ESFR
Sprinkler System (Whse designed to NFPA 13, Pump Plan per NFPA 20, static pressure 75 PSI, residual pressure 63 PSI, Flow=3879 GPM)

	•
	Gas
Heaters in the Warehouse Per Code @ 8BTU/Hr/Sq. Ft.

	•
	2000
Amp Electrical Service @ 277/480 V.3 phase 4 wire

	•
	Metal
Halide Warehouse Lighting @15 Pc

	•
	Asphalt
Paving and Landscaping of Entire Site (Asphalt 3" over 6" crushed rock in driveways and truck courts, 2" AC over
4" crushed rock in parking areas)

	•
	44
– 9' × 10' Dock-High (48") Truck Doors with 4 ft Metal Canopy

	•
	4
– 12' × 14' Truck Doors with Ramps into Building

	•
	Site
Lighting with Wall Pacs on Building

	•
	Attractive
Glass Entry (see brochure for rendering)

	•
	Concrete
Tilt-Up Exterior Walls (Painted)

	•
	Wood
Panelized Roof Structure with steel open web bar joists and girders

	•
	6"
Thick Reinforced Concrete Floor Slab (Flatness=1/8" in 10 ft, slab reinforced with #3 rebar @ 24" o.c.
each way, concrete=3000 PSI)

	•
	Single
Ply Roofing

	•
	R-11
Min. Rigid Insulation on Roof Deck

	•
	96
– 4' × 8' Smoke Vents/Skylights 

Description of Plans:  

	Sheet Nos.
	 	Prepared By
	 	Date

1

  

 
 

EXHIBIT "B"    
  

ADJUSTMENTS TO MONTHLY BASE RENT  

	Time
 
	 	Rate Per Square Foot

of the Building Per Month
	 	Additional Rate Per Square Foot

of Office Space Per Month

	10/1/01* through 3/31/04	 	$	.335	 	$	.650
	4/1/04 through 11/30/06	 	$	.360	 	$	.700
	12/1/06 through 5/31/09	 	$	.400	 	$	.750
	6/1/09 through 11/30/11	 	$	.431	 	$	.800

        Prior
to the Commencement Date, Landlord will cause its architect to measure and certify in writing to Landlord the square footage of the Premises and the office space within the
Premises, following which
time the Monthly Base Rent and other figures based upon the square feet contained in the Premises and the office space within the Premises shall be determined in accordance with the rental rates set
forth above. Except in the case of manifest error, the certification from Landlord's architect shall be binding upon Landlord and Tenant. 

	*
	Tenant's
obligation to pay Monthly Base Rent shall commence on the earlier of October 1, 2001 or that date in which Tenant commences the operation of its business within any
portion of the C&B Premises. 

1

  

]] 

 
 

EXHIBIT "C"    
  

WORK LETTER AGREEMENT

[ALLOWANCE]

[LANDLORD BUILD]  

        This WORK LETTER AGREEMENT ("Work Letter Agreement") is entered into as of the 16th day of May, 2001 by and between ZELMAN RENTON, LLC, a Delaware limited
liability company ("Landlord"), and CUTTER & BUCK, INC., a Washington corporation ("Tenant"). 

R E C I T A L S:  

        A.    Concurrently
with the execution of this Work Letter Agreement, Landlord and Tenant have entered into a lease (the "Lease") covering certain premises (the "Premises") more
particularly described in the Lease. All terms not defined herein have the same meaning as set forth in the Lease. To the extent applicable, the provisions of the Lease are incorporated herein by this
reference. 

        B.    In
order to induce Tenant to enter into the Lease and in consideration of the mutual covenants hereinafter contained, Landlord and Tenant agree as follows: 

1.    BUILDING SHELL; TENANT IMPROVEMENTS.    As used in this Work Letter Agreement, the term "Building Shell" shall mean the
industrial building to be constructed by Landlord at Landlord's sole expense in accordance with the plans and specifications described in Exhibit "A-II"
to the Lease (collectively, the "Building Plans"), which Building Plans have been approved by Landlord and Tenant. As used in the Lease and this Work Letter Agreement, the term "Tenant Improvements"
or "Tenant
Improvement Work" means collectively those items of tenant improvement construction relating to the office portion of the Premises ("Office Improvements") shown on the Tenant's Final Plans (described
in Paragraph 4 below) and the Above-Standard Improvements (described in Paragraph 5 below). 

2.    WORK SCHEDULE.    Within thirty (30) days after the execution of this Lease, Landlord will deliver to Tenant, for Tenant's
review and approval, a schedule ("Work Schedule") which will set forth the timetable for the planning and completion of the installation of the Tenant Improvements and the Commencement Date of the
Lease. The Work Schedule will set forth each of the various items of work to be done or approval to be given by Landlord and Tenant in connection with the completion of the Tenant Improvements. The
Work Schedule will be submitted to Tenant for its approval, which approval Tenant agrees not to unreasonably withhold, and, once approved by both Landlord and Tenant, the Work Schedule will become the
basis for completing the Tenant Improvements. All plans and drawings required by this Work Letter Agreement and all work performed pursuant thereto are to be prepared and performed in accordance with
the Work Schedule. If Tenant fails to approve the Work Schedule, as it may be modified after discussion between Landlord and Tenant within ten (10) business days after the date the Work Schedule is
first received by Tenant, the Work Schedule shall be deemed to be approved by Tenant as submitted. 

3.    CONSTRUCTION REPRESENTATIVES.    Landlord hereby appoints the following person(s) as Landlord's representative ("Landlord's
Representative") to act for Landlord in all matters covered by this Work Letter Agreement: Paul Casey. 

        Tenant
hereby appoints the following person(s) as Tenant's representative ("Tenant's Representative") to act for Tenant in all matters covered by this Work Letter Agreement: Dennis
Hilborn. 

        All
communications with respect to the matters covered by this Work Letter Agreement are to made to Landlord's Representative or Tenant's Representative, as the case may be, in writing
in 

1

 

compliance with the notice provisions of the Lease. Either party may change its representative under this Work Letter Agreement at any time by written notice to the other party in compliance with the
notice provisions of the Lease. 

4.    TENANT IMPROVEMENT PLANS    

        (a)    Preparation of Space Plans.    In accordance with the Work Schedule, Tenant agrees to meet with Landlord's
architect and/or space planner for the purpose of promptly preparing preliminary space plans for the interior layout of the Premises ("Space Plans"). The Space Plans are to be sufficient to convey the
architectural design of the interior of the Premises and layout of the interior of the Office Improvements therein and are to be submitted to Landlord in accordance with the Work Schedule for
Landlord's approval. If Landlord reasonably disapproves any aspect of the Space Plans, Landlord will
advise Tenant in writing of such disapproval and the reasons therefor in accordance with the Work Schedule. Tenant will then submit to Landlord for Landlord's approval, in accordance with the Work
Schedule, a redesign of the Space Plans incorporating the revisions reasonably required by Landlord. 

        (b)    Preparation of Tenant's Final Plans.    Based on the approved Space Plans, and in accordance with the Work
Schedule, Landlord's architect will prepare complete architectural plans, drawings and specifications and complete engineered mechanical, structural and electrical working drawings for all of the
Office Improvements for the Premises (collectively, the "Tenant's Final Plans"). The Tenant's Final Plans will show: (a) the subdivision (including partitions and walls), layout, lighting,
finish and decoration work (including carpeting and other floor coverings) for the office portion of the Premises; (b) all internal and external communications and utility facilities relating
to the office portion of the Premises which will require conduiting or other improvements from the base Building Shell work and/or within common areas; and (c) all other specifications for the
Office Improvements. The Tenant's Final Plans will be submitted to Tenant for signature to confirm that they are consistent with the Space Plans. If Tenant reasonably disapproves any aspect of the
Tenant's Final Plans based on any inconsistency with the Space Plans, Tenant agrees to advise Landlord in writing of such disapproval and the reasons therefor within the time frame set forth in the
Work Schedule (which shall be no less than five (5) business days after Tenant's receipt of Tenant's Final Plans). In accordance with the Work Schedule, Landlord will then cause Landlord's architect
to redesign the Tenant's Final Plans incorporating the revisions reasonably requested by Tenant so as to make the Tenant's Final Plans consistent with the Space Plans. 

        (c)    Requirements of Tenant's Final Plans.    Tenant's Final Plans will include locations and complete dimensions,
and the Office Improvements, as shown on the Tenant's Final Plans, will: (i) be compatible with the Building Shell and with the design, construction and equipment of the Building;
(ii) comply with all applicable laws, ordinances, rules and regulations of all governmental authorities having jurisdiction, and all applicable insurance regulations; (iii) not require
Building service beyond the level normally provided to other tenants in the Development and will not overload the Building floors; and (iv) be of a nature and quality consistent with the
overall objectives of Landlord for the Building, as determined by Landlord in its reasonable but subjective discretion. 

        (d)    Submittal of Tenant's Final Plans.    Once approved by Landlord and Tenant, Landlord's architect will submit
the Tenant's Final Plans to the appropriate governmental agencies for plan checking and the issuance of a building permit. Landlord's architect, with Tenant's cooperation, will make any changes to the
Tenant's Final Plans which are requested by the applicable governmental authorities to obtain the building permit. After approval of the Tenant's Final Plans no further changes may be made without the
prior written approval of both Landlord and Tenant, and then only after agreement by Tenant to pay any excess costs resulting from the design and/or construction of changes requested by Tenant. Tenant
hereby acknowledges that any such changes will be subject to the terms of Paragraph 9 below. 

2

 

        (e)    Changes to Shell of Building.    If the Tenant's Final Plans of any amendment thereof or supplement thereto
shall require changes in the Building Plans and/or the Building Shell, the increased cost thereof
will be paid for by Tenant or charged against the "Allowances" described in Paragraph 5 below. Any changes to the Building Plans shall require the prior written approval of Tenant and Landlord (not to
be unreasonably withheld or delayed), provided that Landlord shall not need the consent or approval of Tenant for changes to the Building Plans that do not affect the Tenant Improvements and/or the
Premises or materially alter the character or the Building. 

        (f)    Work Cost Estimate and Statement.    Prior to the commencement of construction of any of the Office
Improvements shown on the Tenant's Final Plans and/or the Above-Standard Improvements, Landlord will submit to Tenant a written estimate of the cost to complete the Tenant Improvement Work, which
written estimate will be based on the Tenant's Final Plans taking into account any modification which may be required to reflect changes in the Tenant's Final Plans required by the City or County in
which the Premises are located (the "Work Cost Estimate"). Tenant will either approve the Work Cost Estimate or disapprove specific items and submit to Landlord revisions to the Tenant's Final Plans
to reflect deletions of and/or substitutions for such disapproved items. Submission and approval of the Work Cost Estimate will proceed in accordance with the Work Schedule. Upon Tenant's approval of
the Work Cost Estimate (such approved Work Cost Estimate to be hereinafter known as the "Work Cost Statement"), Landlord will have the right to purchase materials and to commence the construction of
the items included in the Work Cost Statement pursuant to Paragraph 6 hereof. If the total costs reflective in the Work Cost Statement exceed the applicable Allowance described in Paragraph 5 below,
Tenant agrees to pay such excess, as additional rent, prior to the Commencement Date. 

5.    PAYMENT FOR THE TENANT IMPROVEMENTS    

        (a)    Office Allowance.    Landlord hereby grants to Tenant a tenant improvement allowance of Forty Dollars ($40.00)
per square foot of the various office portions of the Premises, not to exceed $400,000 (the "Office Allowance"). The Office Allowance is to be used only for: 

        (i)    Payment
of the cost of preparing the Space Plans and the Tenant's Final Plans, including mechanical, electrical, plumbing and structural, drawings and of all other
aspects necessary to complete the Tenant's Final Plans. The Office Allowance will not be used for the payment of extraordinary design work or for payments to any other consultants, designers or
architects other than Landlord's architect and/or Tenant's architect. 

        (ii)  The
payment of plan check, permit and license fees relating to construction of the Office Improvements. 

        (iii)  Construction
of the Office Improvements, including, without limitation, the following: 

        (aa) Installation
within the office portion of the Premises of all partitioning, doors, floor coverings, ceilings, wall coverings and painting, millwork and similar items; 

        (bb) All
electrical wiring, lighting fixtures, outlets and switches, and other electrical work necessary for the office portion of the Premises; 

        (cc) The
furnishing and installation of all duct work, terminal boxes, diffusers and accessories necessary for the heating, ventilation and air conditioning systems within
the office portion of the Premises, including the cost of meter and key control for after-hour air conditioning; 

        (dd) Any
additional improvements to the office portion of the Premises required by Tenant for Tenant's use of the Premises including, but not limited to, odor control,
special heating, ventilation and air conditioning, noise or vibration control or other special systems or improvements; 

3

 

        (ee) All
fire and life safety control systems such as fire walls, sprinklers, halon, fire alarms, including piping, wiring and accessories, necessary for the office portion
of the Premises; 

        (ff)  All
plumbing, fixtures, pipes and accessories necessary for the office portion of the Premises; 

        (gg) Testing
and inspection costs; and 

        (hh) Fees
for the contractor including, but not limited to, fees and costs attributable to general conditions; plus a $25,000.00 fee for Landlord's tenant improvement
coordinator. 

        (iv)  Other
Costs.    All other costs to be expended by Landlord in the construction of the Tenant Improvements, including those costs incurred by Landlord for
construction of elements of the Tenant Improvements in the Premises, which construction was performed by Landlord prior to the execution of the Lease by Landlord and Tenant and which construction is
for the benefit of tenants and is customarily performed prior the execution of leases for space in the Building for reasons of economics (examples of such construction would include, but not be
limited to, the extension of mechanical [including heating, ventilating and air conditioning systems] and electrical distribution systems outside of the core of the Building,
wall construction, column enclosures and painting outside of the core of the Building, ceiling hanger wires and window treatment). 

        (b)    Above Standard Allowance.    Landlord hereby grants to Tenant an additional allowance of One and 50/100 Dollars
per square foot of the Premises, i.e., $351,733.50 ("Above Standard Allowance") for the purchase, construction and installation of the above-standard improvements described on Schedule "1" to this  Exhibit "C" ("Above-Standard Improvements"). The Office Allowance and the Above-Standard Allowance are sometimes each individually referred to as an
"Allowance" and sometimes collectively referred to as the "Allowances." All costs disbursed or expended by Landlord as part of the Above Standard Allowance shall be fully amortized over the original
Term, plus interest at a rate of eleven percent (11%) per year, and the annual amortized amount shall be paid by Tenant monthly, as additional rent under the Lease, in equal installments throughout
the Term until such excess costs have been fully repaid. 

        (c)    Excess Costs.    The cost of each item referenced in Paragraphs 5(a) and 5(b) above shall be charged against
the respective Allowance. If the Work Cost for either the Office Improvements or the Above-Standard Improvements exceeds the respective Allowance, Tenant agrees to pay to Landlord such excess
including reasonable fees for the contractor prior to the commencement of construction (less any sums previously paid by Tenant for such excess pursuant to the Work Cost Estimate). In no event will
the Allowances be used to pay for Tenant's furniture, artifacts, equipment, telephone systems or any other item of personal property which is not affixed to the Premises. 

        (d)    Changes.    If, after the Tenant's Final Plans have been prepared and the Work Cost Statement has been
established, Tenant requires any changes or substitutions to the Tenant's Final Plans, any additional costs related thereto including reasonable fees for the contractor are to be paid by Tenant to
Landlord prior to the Commencement Date. Any changes to the Tenant's Final Plans will be approved by the Landlord and Tenant in the manner set forth in Paragraph 4 above and will, if necessary,
require the Work Cost Statement to be revised and agreed upon between Landlord and Tenant in the manner set forth in Subparagraph 4(f) above. Landlord will have the right to decline Tenant's request
for a change to the Tenant's Final Plans if such changes are inconsistent with the provisions of Paragraph 4 above, or if the change would unreasonably delay construction of the Tenant Improvements
and the Commencement Date of the Lease. 

        (e)    Unused Allowance Amounts.    Any unused portion of either Allowance upon completion of the Tenant Improvements
will not be refunded to Tenant or be available to Tenant as a credit against any obligations of Tenant under the Lease, provided, however, if Tenant constructs at least 10,000 

4

 

square feet of office space within the Premises and fails to use the entire Office Allowance and if Tenant is not in default under the Lease, then Tenant may, prior to December 31, 2001, apply
such unused amount as a credit against Monthly Base Rent due under the Lease and any remaining unused portion after such date will not be refunded to Tenant or be available to Tenant as a credit
against any obligations of Tenant under the Lease and will be forfeited by Tenant. 

        (f)    Amendment to Lease.    Within fifteen (15) business days following the Commencement Date (as defined in
Paragraph 8(a) below), Landlord and Tenant shall execute an amendment to the Lease
setting forth a new rent schedule which incorporates the amortization of any costs funded by Landlord with respect to the Above Standard Allowance. 

6.    CONSTRUCTION OF TENANT IMPROVEMENTS.    Until Tenant approves the Tenant's Final Plans and Work Cost Statement, Landlord will
be under no obligation to cause the construction of any of the Tenant Improvements. Following Tenant's approval of the Work Cost Statement described in Subparagraph 4(f) above, Landlord's contractor
will commence and diligently proceed with the construction of the Tenant Improvements, subject to Tenant Delays (as described in Paragraph 9 below) and Force Majeure Delays (as described in Paragraph
10 below). 

7.    CONSTRUCTION AND PAYMENT FOR THE BUILDING SHELL.    Landlord hereby agrees to use its commercially reasonable efforts to cause
the Building Shell to be constructed in accordance with the Building Plans. Except as provided in Paragraph 4(e) above, Landlord shall pay the cost of designing and constructing the Building
Shell in accordance with the Building Plans. 

8.    COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION    

        (a)    Commencement Date.    The Term of the Lease will commence on the date (the "Commencement Date") which is the
earlier of: (i) the date Tenant or any subtenant of Tenant moves into the Premises to commence operation of its business in all or any portion of the Premises; or (ii) the date the
Building Shell and the Tenant Improvements have been "substantially completed" (as defined below); provided, however, that if substantial completion of the Building Shell or the Tenant Improvements is
delayed as a result of any Tenant Delays described in Paragraph 9 below, then the Commencement Date as would otherwise have been established pursuant to this Subparagraph 8(a)(ii) will
be accelerated by the number of days of such Tenant Delays. Notwithstanding the foregoing, the Rent Commencement Date shall be determined in accordance with Paragraph 5(a) of the Lease. 

        (b)    Substantial Completion; Punch-List.    For purposes of Subparagraph 8(a)(ii) above, the Building Shell
and the Tenant Improvements within the C&B Premises and each portion of the Subleased Premises will be deemed to be "substantially completed" when Landlord's contractor certifies in writing to
Landlord and Tenant that Landlord: (a) is able to provide Tenant with reasonable access to the Premises; (b) has substantially performed all of the Tenant Improvement Work required to be
performed by Landlord under this Work Letter Agreement, other than decoration and minor "punch-list" type items and adjustments which do not materially interfere with Tenant's access to or use of the
applicable portion of the Premises; and (c) has obtained a temporary certificate of occupancy or other required equivalent approval from the local governmental authority permitting occupancy of
the applicable portion of the Premises. Within thirty (30) days after receipt of such certificate from Landlord's contractor, Tenant will conduct a walk-through inspection of the applicable portion of
the Premises with Landlord and provide to Landlord a written punch-list specifying those decoration and other punch-list items which require completion, which items Landlord will thereafter diligently
complete. 

        (c)    Delivery of Possession.    Landlord agrees to deliver possession of each portion of the Premises to Tenant when
the Building Shell and the Tenant Improvements have been substantially completed in accordance with Subparagraph (b) above. The parties estimate that Landlord will deliver possession of each
portion of the Premises to Tenant and the Term of this Lease will commence on or 

5

 

before the estimated commencement date set forth in the Work Schedule delivered to Tenant pursuant to Paragraph 2 above (the "Projected Commencement Date"). Landlord agrees to use its
commercially reasonable efforts to cause each portion of the Premises to be substantially completed on or before the Projected Commencement Date. In the event Landlord fails to substantially complete
construction of the Tenant Improvements within any office portion of the Premises within one hundred twenty (120) days after Tenant's Final Plans for such office portion of the Premises have been
approved by Landlord and Tenant, and such failure is solely attributable to the fault of Landlord, Tenant's sole remedy shall be the right to receive one (1) day's worth of Monthly Base Rent
credit applicable to such office portion of the Premises (Tenant still being liable for any Monthly Base Rent due to Landlord on the Building Shell in accordance with Exhibit
"B" attached to the Lease) for every day past said one hundred twenty (120) period that Landlord fails to substantially complete the construction of said Tenant Improvements.
Said one hundred twenty (120) day period shall be extended day-for-day for each day of Tenant Delays and/or Force Majeure Delays (as such terms are defined in Paragraphs 9 and 10 below)
incurred by Landlord during the construction of the Tenant Improvements. 

9.    TENANT DELAYS.    For purposes of this Work Letter Agreement, "Tenant Delays" means any delay in the completion of the
Building Shell or the Tenant Improvements resulting from any or all of the following: (a) Tenant's failure to timely perform any of its obligations pursuant to this Work Letter Agreement,
including any failure to complete, on or before the due date therefor, any action item which is Tenant's responsibility pursuant to the Work Schedule delivered by Landlord to Tenant pursuant to this
Work Letter Agreement; (b) Tenant's changes to Space Plans or Tenant's Final Plans after Landlord's approval thereof; (c) changes to the Building Plans resulting from changes to the
Tenant's Final Plans after Landlord's approval thereof; (d) Tenant's request for materials, finishes, or installations which are not readily available or which are incompatible with Landlord's
standard specifications for tenant improvements for the Development; (e) any delay of Tenant in making payment to Landlord for Tenant's share of the Work Cost; or (f) any other act or
failure to act by Tenant, Tenant's employees, agents, architects, independent contractors, consultants and/or any other person performing or required to perform services on behalf of Tenant. 

10.    FORCE MAJEURE DELAYS.    For purposes of this Work Letter, "Force Majeure Delays" means any actual delay in the construction
of the Tenant Improvements, which is beyond the reasonable control of Landlord or Tenant, as the case may be, as described in Paragraph 33 of the Lease. 

6

 

        IN
WITNESS WHEREOF, the undersigned Landlord and Tenant have caused this Work Letter Agreement to be duly executed by their duly authorized representatives as of the date of the Lease. 

	TENANT:	 	LANDLORD:
	

CUTTER & BUCK, INC.,

a Washington corporation	
 	

ZELMAN RENTON, LLC,

a Delaware limited liability company
	

By:	
 	

/s/  MARTIN MARKS      
	
 	

By:	
 	

ZIP Renton, LLC, a Delaware LLC
	 	 	Print Name:	Martin Marks
	 	 	 	Its:	 	Managing Member
	 	 	Title:	President
	 	 	 	By:	 	Zelman Industrial Partners, Inc.,

a California corporation,
	 	 	 	 	 	 	 	 	 	Its:	 	Managing Member
	

By:	
 	

/s/  S. LOWBER      
	
 	

 	
 	

 	
 	

By:	
 	

/s/  BEN REILING      

	 	 	Print Name:	S. Lowber	 	 	 	 	 	 	 	Ben Reiling
	 	 	 	
	 	 	 	 	 	 	 	Its:	 	President
	 	 	Title:	CFO
	 	 	 	 	 	 	 	 	 	 

7

 
 
 

ABOVE-STANDARD IMPROVEMENTS    
  

	Item
 
	 	Estimated Additional Cost

	R-21 Roof Insulation (for heating requirement)	 	$	 
	R-11 Wall Insulation (for heating requirement)	 	$	 
	Dock Equipment (10 - 30,000 lb. Levelers/Lights)	 	$	 
	Warehouse Heating	 	$	 
	Lighting Upgrade	 	$	 
	Power Upgrade	 	$	 
	Contractors General Conditions/Supervision/Insurance	 	$	 
	Washington State Sales Tax	 	$	 
	Architectural and Engineering Costs	 	$	 
	Permits	 	$	 
	 	 	

	 	Total	 	$	 
	 	 	

8

  

 
 

EXHIBIT "D"    
  

NOTICE OF LEASE TERM DATES

AND TENANT'S PERCENTAGE  

	 	 	To:	 	Date:
	

Re:	
 	

Lease dated                        , 2001 (the "Lease"), between        , Landlord,
and                                         
       , Tenant, concerning the building located
at                                         
       (the "Premises").

To Whom It May Concern: 

        In
accordance with the subject Lease, we wish to advise and/or confirm as follows: 

        1.    That
the Premises have been accepted by the Tenant as being substantially complete in accordance with the subject Lease and that there is no deficiency in construction
except for latent defects as may be indicated on the "Punch-List" prepared by Landlord and Tenant, a copy of which is attached hereto. 

        2.    That
the Tenant has possession of the subject Premises and acknowledges that under the provisions of the Lease the Commencement Date
is                        , and the Term of
the Lease will expire on                        . 

        3.    That
in accordance with the Lease, rent commenced to accrue on                        . 

        4.    If
the Commencement Date of the Lease is other than the first day of the month, the first billing will contain a pro rata adjustment. Each billing thereafter will be for
the full amount of the monthly installment as provided for in the Lease. 

        5.    Rent
is due and payable in advance on the first day of each and every month during the Term of the Lease. Your rent checks should be made payable
to                        
                        at                 
                                          
             .
 

        6.    The
number of square feet within the Premises is                        square feet as determined by Landlord's architect in
accordance with the terms of the Lease. 

        7.    Tenant's
Percentage, as adjusted based upon the number of square feet within the Premises, is    %. 

	 	 	LANDLORD:
	

 	
 	

ZELMAN RENTON, LLC,

a Delaware limited liability company
	

 	
 	

By:	
 	

ZIP Renton, LLC, a Delaware LLC
	 	 	 	 	Its:	 	Managing Member
	

 	
 	

 	
 	

By:	
 	

Zelman Industrial Partners, Inc.,

a California corporation,
	 	 	 	 	 	 	Its:	 	Managing Member
	

 	
 	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	 	 	
 Ben Reiling
	 	 	 	 	 	 	 	 	Its:	 	President

1

  

 
 

EXHIBIT "E"    
  

INDUSTRIAL LEASE

[Single Tenant - Triple Net]  

 
  DEFINITION OF OPERATING EXPENSES    
  

        1.    Items Included in Operating Expenses.    The term "Operating Expenses" as used in the Lease to which this  Exhibit "E" is
attached means: all costs and expenses of operation and maintenance all buildings (exterior maintenance costs) and Common Areas of the
Development (as such terms are defined in the Lease), as determined by generally accepted accounting practices, including the following costs by way of illustration but not limitation, but excluding
those items specifically set forth in Paragraph 2 below: (a) real property taxes (as defined in Paragraph 12 of the Lease); (b) any and all assessments imposed with respect
to the Building pursuant to any covenants, conditions and restrictions affecting the Development, the Common Areas or the Building amortized over the longest allowable period; (c) Common Area
water charges and other Common Area utilities; (d) utilities surcharges and any other costs, levies or assessments resulting from statutes or regulations promulgated by any government or
quasi-government authority in connection with the use, occupancy or alteration of the Building or the Premises or the parking facilities serving the Building or the Premises; (e) costs of
insurance (including reasonable deductibles) obtained by Landlord pursuant to Paragraph 19 of the Lease; (f) repair and maintenance of storm drainage facilities; (g) security (if
deemed necessary by Landlord); (h) labor; (i) costs incurred in the management of the Development, including, without limitation: (i) supplies, (ii) Development management
office rental, supplies, equipment and related operating expenses, and (iii) a management/administrative fee determined as a percentage of the annual gross revenues of the Development exclusive
of the proceeds of financing or a sale of the Development or any portion thereof, which management/administrative fee shall not exceed three percent (3%) of such annual gross revenues, and an
administrative fee for the management of the Common Area (not to exceed five percent (5%) of Common Area Operating Expenses); (j) supplies, materials, equipment and tools including rental of
personal property used for maintenance; (k) repair and maintenance of the buildings
(including, without limitation, the exterior roofs) within the Development; (l) maintenance, costs and upkeep of all parking and other Common Areas, including sidewalks, curbs and drives;
(m) depreciation on a straight line basis and rental of personal property used in maintenance; (n) amortization on a straight line basis over the useful life [together with
interest at the Interest Rate on the unamortized balance] of all capitalized expenditures which are: (i) reasonably intended to produce a reduction in operating charges or energy
consumption; or (ii) required under any governmental law or regulation that was not applicable to the Development at the time it was originally constructed; or (iii) for replacement of
any Development equipment needed to operate the Development at the same quality levels as prior to the replacement; (o) costs and expenses of gardening and landscaping; (p) maintenance
of signs (other than signs of tenants of the Development); (q) personal property taxes levied on or attributable to personal property used in connection with the Common Areas;
(r) reasonable accounting, audit, verification, legal and other consulting fees; (s) repair, maintenance and monitoring of fire protection systems; (t) exterior pest control;
(u) exterior window washing; and (v) costs and expenses of repairs, resurfacing, repairing, maintenance, painting, exterior lighting, cleaning, and similar items, including appropriate
reserves. 

        2.    Items Excluded From Operating Expenses.    Notwithstanding the provisions of Paragraph 1 above to the
contrary, "Operating Expenses" will not include: (a) Landlord's federal or state income, franchise, inheritance or estate taxes; (b) any ground lease rental; (c) costs incurred by
Landlord for the repair of damage to the extent that Landlord is reimbursed by insurance or condemnation proceeds or by tenants, warrantors or other third persons; (d) depreciation,
amortization and interest payments, except as specifically provided herein, and except on materials, tools, supplies and vendor-type equipment purchased by Landlord to enable Landlord to supply
services Landlord might otherwise contract for with a third party, where such depreciation, amortization and interest payments would 

1

 

otherwise have been included in the charge for such third party's services, all as determined in accordance with generally accepted accounting practices; (e) brokerage commissions, finders'
fees, attorneys' fees, space planning costs and other costs incurred by Landlord in leasing or attempting to lease space in the Development; (f) costs of a capital nature, including, without
limitation, capital improvements, capital replacements, capital repairs, capital equipment and capital tools, all as determined in accordance with generally accepted accounting practices; provided,
however, the capital expenditures set forth in Subparagraph 1(n) above will in any event be included in the definition of Operating Expenses; (g) interest, principal, points and fees on
debt or amortization on any mortgage, deed of trust or other debt encumbering the Building or the Development; (h) costs, including permit, license and inspection costs, incurred with respect
to the installation of tenant improvements for tenants in the Development (including the original Tenant Improvements for the Premises), or incurred in renovating or otherwise improving, decorating,
painting or redecorating space for tenants or other occupants of the Development, including space planning and interior design costs and fees; (i) attorneys' fees and other costs and expenses
incurred in connection with negotiations or disputes with present or prospective tenants or other occupants of the Development; provided, however, that Operating Expenses will include those attorneys'
fees and other costs and expenses incurred in connection with negotiations, disputes or claims relating to items of Operating Expenses, enforcement of rules and regulations of the Development, and
such other matters relating to the maintenance of standards required of Landlord under the Lease; (j) except for the administrative/management fees described in Subparagraph 1(i) above,
costs of Landlord's general corporate overhead; (k) all items and services for which Tenant or any other tenant in the Development reimburses Landlord (other than through operating expense
pass-through provisions); (l) electric power costs for which any tenant directly contracts with the local public service company; (m) costs arising from Landlord's charitable or
political contributions; and (n) any costs relating to the initial development and construction of the Development. 

2

  

 
 

EXHIBIT "F"    
  

ESTOPPEL CERTIFICATE  

        The
undersigned,
                                         
                               ("Tenant"), hereby certifies
to                                         
       , as follows:
 

        1.    Attached
hereto is a true, correct and complete copy of that certain lease dated                        , 200  ,
between                        ("Landlord") and Tenant (the
"Lease"), regarding the premises located
at                                         
       (the "Premises"). The Lease is now in full force and effect and has not been amended, modified or supplemented, except as
set forth in Paragraph 4 below. 

        2.    The
Term of the Lease commenced on                        , 200  . 

        3.    The
Term of the Lease shall expire on                        , 200  . 

        4.    The
Lease has: (Initial one) 

        (        )        not
been amended, modified, supplemented, extended, renewed or assigned. 

        (        )        been
amended, modified, supplemented, extended, renewed or assigned by the following described terms or agreements, copies of which are attached hereto: 

	

	

          5.      Tenant
has accepted and is now in possession of the Premises. 

          6.      Tenant
and Landlord acknowledge that Landlord's interest in the Lease will be assigned
to                                         
                   and that no modification, adjustment, revision
or cancellation of the Lease or amendments thereto shall be effective unless written consent
of                                         
                   is obtained, and that until further notice, payments under the Lease may
continue as heretofore. 

          7.      The
amount of Monthly Base Rent is $                              . 

          8.      The
amount of Security Deposit (if any) is $                              . 

No other security deposits have been made except as follows: 

	

          9.      Tenant
is paying the full lease rental which has been paid in full as of the date hereof. No rent or other charges under the Lease have been paid for more than thirty
(30) days in advance of its due date except as follows: 

	

          10.    All
work is required to be performed by Landlord under the Lease has been completed except as follows: 

	

          11.    To
the best of Tenant's knowledge, there are no defaults on the part of the Landlord or Tenant under the Lease except as follows: 

	

          12.    To
the best of Tenant's knowledge, tenant has no defense as to its obligations under the Lease and claims no set-off or counterclaim against the other party except as
follows: 

	

	

        13.    Tenant
has no right to any concession (rental or otherwise) or similar compensation in connection with renting the space it occupies other than as provided in the Lease
except as follows: 

	

	

All provisions of the Lease and the amendments thereto (if any) referred to above are hereby ratified. 

        The
foregoing certification is made with the knowledge
that                                         
       is about to fund a loan to Landlord
or                                         
       is about to purchase
the Building from Landlord and that                        is relying upon the representations herein made in funding such loan or
in purchasing the Building. 

1

 

        IN
WITNESS WHEREOF, this certificate has been duly executed and delivered by the authorized officers of the undersigned as
of                        , 200  . 

	

TENANT:	
 	

 
	

	
 	

,	
 	

 
	a	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	 
	

By:	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	
	 	 
	 	 	 	 	Print Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	
	 	 
	 	 	 	 	Title:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 

SAMPLE ONLY

[NOT FOR EXECUTION]  

2

  

 
 

EXHIBIT "G"    
  

RULES AND REGULATIONS  

A.    General Rules and Regulations.    The following rules and regulations govern the use of the Building and the Common Areas.
Tenant will be bound by such rules and regulations and agrees to cause Tenant's Authorized Users, its employees, subtenants, assignees, contractors and suppliers to observe the same. 

          1.  Except
as specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice may be installed
or displayed on any part of the outside or inside of the Building without the prior written consent of Landlord. Landlord will have the right to remove, at Tenant's expense and without notice, any
sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls are to be printed, painted, affixed or inscribed at the expense of Tenant and under the
direction of Landlord by a person or company designated or approved by Landlord. 

          2.  If
Landlord objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or
door of the Premises, or placed on any windowsill, which is visible from the exterior of the Premises, Tenant will immediately discontinue such use. Tenant agrees not to place anything against or near
glass partitions or doors or windows which may appear unsightly from outside the Premises. 

          3.  Tenant
will not obstruct any sidewalks, passages, exits or entrances of the Development. The sidewalks, passages, exits and entrances are not open to the general public,
but are open, subject to reasonable regulations, to Tenant's business invitees. Landlord will in all cases retain the right to control and prevent access thereto of all persons whose presence in the
reasonable judgment of
Landlord would be prejudicial to the safety, character, reputation and interest of the Development and its tenants, provided that nothing herein contained will be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are engaged in illegal or unlawful activities. No tenant and no employee or invitee of any
tenant will go upon the roof of the Building. 

          4.  Landlord
expressly reserves the right to absolutely prohibit solicitation, canvassing, sales and displays of products, goods and wares in all portions of the Development
except for such activities as may be expressly requested by a tenant and conducted solely within such requesting tenant's premises. Landlord reserves the right to restrict and regulate the use of the
Common Areas of the Development by invitees of tenants providing services to tenants on a periodic or daily basis including food and beverage vendors. Such restrictions may include limitations on
time, place, manner and duration of access to a tenant's premises for such purposes. 

          5.  Landlord
reserves the right to prevent access to the Development in case of invasion, mob, riot, public excitement or other commotion by closing the doors or by other
appropriate action. 

          6.  Tenant
shall not alter any lock or install any new additional lock or bolt on any door of the Premises. Tenant, upon the termination of its tenancy, will deliver to
Landlord the keys to all doors which have been furnished to Tenant, and in the event of loss of any keys so furnished, will pay Landlord therefor. 

          7.  If
Tenant requires telegraphic, telephonic, burglar alarm, satellite dishes, antennae or similar services, it will first obtain Landlord's approval, and comply with,
Landlord's reasonable rules and requirements applicable to such services. 

          8.  No
deliveries will be made which impede or interfere with other tenants or the operation of the Development. 

1

 

          9.  Tenant
will not permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building by reason of
noise, odors or vibrations, nor will Tenant bring into or keep in or about the Premises any birds or animals. 

        10.  The
toilet rooms, toilets, urinals, wash bowls and other apparatus will not be used for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from any violation of this rule will be borne by the tenant who, or whose employees
or invitees, break this rule. 

        11.  Tenant
will not sell, or permit the sale at retail of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or
on the Premises. Tenant will not make any building-to-building solicitation of business from other tenants in the Development. Tenant will not use the Premises for any business or activity other than
that specifically provided for in this Lease. Canvassing, soliciting and distribution of handbills or any other written material, and peddling in the Development are prohibited, and Tenant will
cooperate with Landlord to prevent such activities. 

        12.  Tenant
will not install any ratio or television antenna, loudspeaker, satellite dishes or other devices on the roof(s) or exterior walls of the Building or the
Development without signing Landlord's license agreement with respect thereto. Tenant will not interfere with radio or television broadcasting or reception from or in the Development or elsewhere. 

        13.  Tenant
will not affix any floor covering to the floor of the Premises in any manner except as approved by Landlord. Tenant shall repair any damage resulting from
noncompliance with this rule. 

        14.  Landlord
reserves the right to exclude or expel from the Development any person who, in Landlord's judgment, is in violation of any of the Rules and Regulations. 

        15.  Tenant
will store all its trash and garbage within its Premises or in other facilities provided by Landlord. Tenant will not place in any trash box or receptacle any
material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal is to be made in accordance with directions issued from time to
time by Landlord. 

        16.  The
Premises will not be used for lodging nor shall the Premises be used for any improper, immoral or objectionable purpose. 

        17.  Tenant
agrees to comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. 

        18.  Tenant
assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means to entry to
the Premises closed. 

        19.  Tenant
shall use at Tenant's cost such pest extermination and control contractor(s) as Landlord may direct and at such intervals as Landlord may reasonably require. 

        20.  To
the extent Landlord reasonably deems it necessary to exercise exclusive control over any portions of the Common Areas for the mutual benefit of the tenants in the
Development, Landlord may do so subject to reasonable, non-discriminatory additional rules and regulations (so long as the parking, access and visibility of the Premises are not affected). 

        21.  Tenant's
requirements will be attended to only upon appropriate application to Landlord's asset management office for the Development by an authorized individual of
Tenant. Employees of Landlord will not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee of Landlord will admit any
person (Tenant or otherwise) to any office without specific instructions from Landlord. 

2

 

        22.  These
Rules and Regulations are in addition to, and will not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and
conditions of the Lease. Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord will be construed as a waiver
of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the
Development. 

        23.  Landlord
reserves the right to make such other and reasonable and non-discriminatory Rules and Regulations as, in its judgment, may from time to time be needed for
safety and security, for care and cleanliness of the Development and for the preservation of good order therein. Tenant agrees to abide by all such Rules and Regulations herein above stated and any
additional reasonable and non-discriminatory rules and regulations which are adopted. Tenant is responsible for the observance of all of the foregoing rules by Tenant's employees, agents and
contractors. 

B.    Parking Rules and Regulations.    The following rules and regulations govern the use of the parking facilities which serve the
Building. Tenant will be bound by such rules and regulations and agrees to cause its employees, subtenants, assignees, contractors and suppliers to observe the same: 

          1.  Tenant
will not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant's employees, subtenants, customers or invitees to be loaded, unloaded
or parked in areas other than those designated by Landlord for such activities. No vehicles are to be left in the parking areas overnight and no vehicles are to be parked in the parking areas other
than normally sized passenger automobiles, motorcycles and pick-up trucks. Trucks may park in loading areas only during the time such trucks are being loaded or unloaded. No extended term storage of
vehicles is permitted. 

          2.  Vehicles
must be parked entirely within painted stall lines of a single parking stall. 

          3.  All
directional signs and arrows must be observed. 

          4.  The
speed limit within all parking areas shall be five (5) miles per hour. 

          5.  Parking
is prohibited: 

        (a)  in
areas not striped for parking; 

        (b)  in
aisles or on ramps; 

        (c)  where
"no parking" signs are posted; 

        (d)  in
cross-hatched areas; and 

        (e)  in
such other areas as may be designated from time to time by Landlord or Landlord's parking operator. 

          6.  Landlord
reserves the right, without cost or liability to Landlord, to tow any vehicle if such vehicle's audio theft alarm system remains engaged for an unreasonable
period of time. 

          7.  Washing,
waxing, cleaning or servicing of any vehicle in any area not specifically reserved for such purpose is prohibited. 

          8.  Landlord
may refuse to permit any person to park in the parking facilities who violates these rules with unreasonable frequency, and any violation of these rules shall
subject the violator's car to removal, at such car owner's expense. Tenant agrees to use its best efforts to acquaint its employees, subtenants, assignees, contractors, suppliers, customers with these
parking provisions, rules and regulations. 

          9.  Parking
stickers, access cards, or any other device or form of identification supplied by Landlord as a condition of use of the parking facilities shall remain the
property of Landlord. Parking identification devices, if utilized by Landlord, must be displayed as requested and may not be mutilated 

3

 

in any manner. The serial number of the parking identification device may not be obliterated. Parking identification devices, if any, are not transferable and any device in the possession of an
unauthorized holder will be void. Landlord reserves the right to refuse the sale of monthly stickers or other parking identification devices to Tenant or any of its agents, employees or
representatives who willfully refuse to comply with these rules and regulations and all unposted city, state or federal ordinances, laws or agreements. 

        10.  Loss
or theft of parking identification devices or access cards must be reported to the management office in the Development immediately, and a lost or stolen report
must be filed by the Tenant or user of such parking identification device or access card at the time. Landlord has the right to exclude any vehicle from the parking facilities that does not have a
parking identification device or valid access card. Any parking identification device or access card which is reported lost or stolen and which is subsequently found in the possession of an
unauthorized person will be confiscated and the illegal holder will be subject to prosecution. 

        11.  Landlord
is not responsible for damage by water or fire, or for the acts or omissions of others, or for articles left in vehicles. 

        12.  Landlord
reserves the right, without cost or liability to Landlord, to tow any vehicles which are used or parked in violation of these rules and regulations. 

        13.  Landlord
reserves the right from time to time to modify and/or adopt such other reasonable and non-discriminatory rules and regulations for the parking facilities as it
deems reasonably necessary for the operation of the parking facilities. 

4

  

 
 

EXHIBIT "H"    
  

OAKESDALE BUSINESS CAMPUS  

 TENANT ENVIRONMENTAL QUESTIONNAIRE  

        The purpose of this form is to obtain information regarding the use or proposed use of hazardous materials at the premises. Prospective tenants should answer the
questions in light of their proposed operations at the premises. Existing tenants should answer the questions as they relate to ongoing operations at the premises and should update any information
previously submitted. If additional space is needed to answer the questions, you may attach separate sheets of paper to this form. 

        Your
cooperation in this matter is appreciated 

	1.	 	GENERAL INFORMATION
	

 	
 	

Name of Responding Company:

	 	 	Check the Applicable Status: Prospective Tenant                 Existing Tenant     
	 	 	Mailing Address:

	

 	
 	

	 	 	Contact Person and Title:

	 	 	Telephone Number: (      )                     
	 	 	Address of Leased Premises:

	 	 	Length of Lease Term:

	 	 	Describe the proposed operations to take place on the premises, including principal products manufactured or services to be conducted. Existing tenants should describe any proposed changes to ongoing
operations.
	

 	
 	

	

 	
 	

	

2.	
 	
STORAGE OF HAZARDOUS MATERIALS
	

 	
 	

2.1	
 	

Will any hazardous materials be used or stored on-site?
	 	 	Wastes	 	 	 	Yes	 	 	 	No	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	 	
	 	 
	 	 	Chemical Products	 	 	 	Yes	 	 	 	No	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	 	
	 	 
	 	 	2.2	 	Attach a list of any hazardous materials to be used or stored, the quantities that will be on-site at any given time, and the location and method of storage (e.g., 55-gallon drums on concrete pad).
	

3.	
 	
STORAGE TANKS AND SUMPS
	

 	
 	

3.1	
 	

Is any above or below ground storage of gasoline, diesel or other hazardous substances in tanks or sumps proposed or currently conducted at the premises?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If yes, describe the materials to be stored, and the type, size and construction of the sump or tank. Attach copies of any permits obtained for the storage of such substances.
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	 	 	3.2	 	Have any of the tanks or sumps been inspected or tested for leakage?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, attach the results.

1

 

	 	 	3.3	 	Have any spills or leaks occurred from such tanks or sumps?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, describe.
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	 	 	3.4	 	Were any regulatory agencies notified of the spill or leak?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, attach copies of any spill reports filed, any clearance letters or other correspondence from regulatory agencies relating to the spill or leak.
	

 	
 	

3.5	
 	

Have any underground storage tanks or sumps been taken out of service or removed?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If yes, attach copies of any closure permits and clearance obtained from regulatory agencies relating to closure and removal of such tanks.
	

4.	
 	
SPILLS
	

 	
 	

4.1	
 	

During the past year, have any spills occurred at the premises?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	If yes, please describe the location of the spill.
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	 	 	4.2	 	Were any agencies notified in connection with such spills?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If yes, attach copies of any spill reports or other correspondence with regulatory agencies.
	

 	
 	

4.3	
 	

Were any clean-up actions undertaken in connection with the spills?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Attach copies of any clearance letters obtained from any regulatory agencies involved and the results of any final soil or groundwater sampling done upon completion of the clean-up work.
	

5.	
 	
WASTE MANAGEMENT
	

 	
 	

5.1	
 	

Has your company been issued an EPA Hazardous Waste Generator I.D. Number?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	5.2	 	Has your company filed a biennial report as a hazardous waste generator?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, attach a copy of the most recent report filed.
	

 	
 	

5.3	
 	

Attach a list of the hazardous wastes, if any, generated or to be generated at the premises, its hazard class and the quantity generated on a monthly basis.
	

 	
 	

5.4	
 	

Describe the method(s) of disposal for each waste. Indicate where and how often disposal will take place.
	 	 	 	 	 	 	On-site treatment or recovery	 	 
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Discharged to sewer	 	 
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Transported and Disposal of off-site	 	 
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	Incinerator	 	 
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

	 	 	5.5	 	Indicate the name of the person(s) responsible for maintaining copies of hazardous waste manifests completed for off-site shipments of hazardous waste.

2

 

	 	 	5.6	 	Is any treatment of processing of hazardous wastes currently conducted or proposed to be conducted at the premises:
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If yes, please describe any existing or proposed treatment methods.
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	 	 	5.7	 	Attach copies of any hazardous waste permits or licenses issued to your company with respect to its operations at the premises.
	

6.	
 	
WASTEWATER TREATMENT/DISCHARGE
	

 	
 	

6.1	
 	

Do you discharge wastewater to:
	 	 	 	 	 	 	storm drain?	 	 	 	sewer?	 	 
	 	 	 	 	
	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	surface water?	 	 	 	no industrial discharge
	 	 	 	 	
	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	 
	 	 	6.2	 	Is your wastewater treated before discharge?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If yes, describe the type of treatment conducted.
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	 	 	6.3	 	Attach copies of any wastewater discharge permits issued to your company with respect to its operations at the premises.
	

7.	
 	
AIR DISCHARGES
	

 	
 	

7.1	
 	

Do you have any filtration systems or stacks that discharge into the air?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	7.2	 	Do you operate any of the following types of equipment or any other equipment requiring an air emissions permit?
	 	 	 	 	 	 	Spray booth
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dip tank
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Drying oven
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Incinerator
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Other (please describe)	 	 
	 	 	 	 	
	 	 	 	 	 	 	 	

	 	 	 	 	 	 	No equipment requiring air permits
	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	7.3	 	Are air emissions from your operations monitored?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, indicate the frequency of monitoring and a description of the monitoring results.
	

 	
 	

 	
 	

	

 	
 	

 	
 	

	 	 	7.4	 	Attach copies of any air emissions permits pertaining to your operations at the premises.
	

8.	
 	
HAZARDOUS MATERIALS DISCLOSURES
	

 	
 	

8.1	
 	

Does your company handle hazardous materials in a quantity equal to or exceeding an aggregate of 500 pounds, 55 gallons, or 200 cubic feet per month?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	8.2	 	Has your company prepared a hazardous materials management plan pursuant to any applicable requirements of a local fire department or governmental agency?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, attach a copy of the business plan.

3

 

	 	 	8.3	 	Has your company adopted any voluntary environmental, health or safety program?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, attach a copy of the program.
	

9.	
 	
ENFORCEMENT ACTIONS, COMPLAINTS
	

 	
 	

9.1	
 	

Has your company ever been subject to any agency enforcement actions, administrative orders, or consent decrees?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, describe the actions and any continuing compliance obligations imposed as a result of these actions.
	

 	
 	

9.2	
 	

Has your company ever received requests for information, notice or demand letters, or any other inquiries regarding its operations?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	9.3	 	Have there ever been, or are there now pending, any lawsuits against the company regarding any environmental or health and safety concerns?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	9.4	 	Has an environmental audit ever been conducted at your company's current facility?
	 	 	 	 	Yes	 	 	 	No	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
	 	 	 	
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	If so, identify who conducted the audit and when it was conducted.

4

 

	CUTTER & BUCK, INC.
 Company	 	 
	

By:	
 	

/s/  MARTIN MARK      
	
 	

 
	 	 	Title:	 	President
	 	 
	 	 	Date:	 	5/15/01
	 	 

5

QuickLinks

TABLE OF CONTENTS

INDUSTRIAL LEASE [Single Tenant - Triple Net]

ADDENDUM TO INDUSTRIAL LEASE

EXHIBIT "A-I"

EXHIBIT "A-II"

EXHIBIT "B"

EXHIBIT "C"

ABOVE-STANDARD IMPROVEMENTS

EXHIBIT "D"

EXHIBIT "E"

DEFINITION OF OPERATING EXPENSES

EXHIBIT "F"

EXHIBIT "G"

EXHIBIT "H"

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]