Document:

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                                                                 EXHIBIT 10.9(b)

                           LINCOLN SQUARE OFFICE LEASE

                                     BETWEEN

                           LINCOLN SQUARE OFFICE, LLC,
                     A WASHINGTON LIMITED LIABILITY COMPANY
                                   (LANDLORD)

                                       AND

                               EDDIE BAUER, INC.,
                             A DELAWARE CORPORATION
                                    (TENANT)

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                                    CONTENTS

<TABLE>
<S>                                                                                                          <C>
1.       BASIC LEASE PROVISIONS AND IDENTIFICATION OF EXHIBITS..........................................      2

         1.1      Basic Lease Provisions................................................................      2
         1.2      Identification of Exhibits............................................................      8

2.       PREMISES.......................................................................................      9

         2.1      The Building and the Project..........................................................      9
         2.2      Leased Premises.......................................................................      9
         2.3      Reserved to Landlord..................................................................     10
         2.4      Declarations..........................................................................     11
         2.5      Office Condominium....................................................................     12

3.       TERM...........................................................................................     12

         3.1      Lease Term............................................................................     12
         3.2      Expiration............................................................................     12
         3.3      Holding Over..........................................................................     13
         3.4      Pre-Commencement License..............................................................     13
         3.5      Option to Extend......................................................................     13
         3.6      Right of First Offer..................................................................     16

4.       RENT...........................................................................................     17

         4.1      Base Rent.............................................................................     17
         4.2      Other Charges.........................................................................     18
         4.3      Security Deposit......................................................................     24
         4.4      Late Charges..........................................................................     25
         4.5      No Offsets or Deductions/Place of Payment.............................................     25

5.       USE............................................................................................     26

         5.1      Permitted Uses........................................................................     26
         5.2      Uses Prohibited.......................................................................     26
         5.3      Compliance with Laws, Rules and Regulations...........................................     27
         5.4      Hazardous Material....................................................................     27

6.       UTILITIES AND SERVICES.........................................................................     28

         6.1      Tenant's Responsibility...............................................................     28
         6.2      Interruption..........................................................................     29
         6.3      Telecommunications Services...........................................................     29
         6.4      Standard Services.....................................................................     30
         6.5      Additional Services...................................................................     31
         6.6      Tenant Access.........................................................................     31
         6.7      Back-Up Power Generators..............................................................     32
         6.8      Tenant's Supplemental HVAC System.....................................................     32

7.       PERSONAL PROPERTY TAXES........................................................................     33

8.       LICENSES, FEES AND TAXES.......................................................................     33
</TABLE>

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<TABLE>
<S>                                                                                                          <C>
9.       IMPROVEMENTS, ALTERATIONS AND ADDITIONS........................................................     33

         9.1      Premises Improvements.................................................................     33
         9.2      Alterations by Tenant.................................................................     34
         9.3      Disability Laws.......................................................................     35

10.      MAINTENANCE AND REPAIRS........................................................................     35

         10.1     Maintenance and Repair by Tenant......................................................     35
         10.2     Failure to Maintain or Repair.........................................................     36
         10.3     Repairs by Landlord...................................................................     36
         10.4     HVAC Maintenance and Repair by Landlord...............................................     37
         10.5     Non-compliance........................................................................     37

11.      LIENS AND ENCUMBRANCES.........................................................................     37

12.      ASSIGNMENT, SUBLEASING AND OTHER TRANSFERS.....................................................     38

         12.1     Transfers Generally...................................................................     38
         12.2     Assignee Obligations..................................................................     39
         12.3     Sublessee Obligations.................................................................     40
         12.4     Conditional Consents..................................................................     40
         12.5     Attorneys' Fees and Costs.............................................................     40
         12.6     No Damages............................................................................     40
         12.7     Excess Rent...........................................................................     40
         12.8     Tenant's Vendors......................................................................     41

13.      COMMON AREAS AND FACILITIES....................................................................     41

         13.1     Generally.............................................................................     41
         13.2     Control and Maintenance of Common Areas by Landlord...................................     41
         13.3     License...............................................................................     42
         13.4     Rules and Regulations.................................................................     42
         13.5     Tenant Personnel Parking..............................................................     42
         13.6     Rooftop Dishes........................................................................     43

14.      INDEMNITY AND INSURANCE........................................................................     44

         14.1     Indemnification.......................................................................     44
         14.2     Insurance.............................................................................     45
         14.3     Mutual Release and Waiver of Subrogation..............................................     47
         14.4     Acts of Others........................................................................     48
         14.5     Provisions Specifically Negotiated....................................................     48

15.      EMINENT DOMAIN.................................................................................     48

         15.1     Total Taking..........................................................................     48
         15.2     Partial Taking........................................................................     48
         15.3     Damages...............................................................................     49

16.      TENANT'S DEFAULT...............................................................................     49

         16.1     Default...............................................................................     49
         16.2     Remedies in Default...................................................................     50
</TABLE>

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<TABLE>
<S>                                                                                                          <C>
         16.3     Legal Expenses........................................................................     51
         16.4     Bankruptcy............................................................................     51
         16.5     Remedies Cumulative - Waiver..........................................................     52

17.      DEFAULT BY LANDLORD............................................................................     53

18.      RECONSTRUCTION.................................................................................     53

         18.1     Insured Loss..........................................................................     53
         18.2     Uninsured Loss........................................................................     53
         18.3     No Obligation.........................................................................     54
         18.4     Partial Destruction of Building.......................................................     54
         18.5     Business Interruption.................................................................     55

19.      SUBORDINATION AND ATTORNMENT; LEASE ESTOPPEL CERTIFICATE; FINANCIAL STATEMENTS.................     55

         19.1     Subordination - Notice to Mortgagee...................................................     55
         19.2     Lease Estoppel Certificate............................................................     55
         19.3     Financial Statements..................................................................     56

20.      ACCESS BY LANDLORD.............................................................................     56

21.      SURRENDER OF LEASED PREMISES...................................................................     57

         21.1     Surrender of Possession...............................................................     57
         21.2     Removal of Property...................................................................     57
         21.3     Voluntary Surrender...................................................................     58
         21.4     Survival..............................................................................     58

22.      QUIET ENJOYMENT................................................................................     58

23.      AUTHORITY OF PARTIES...........................................................................     58

24.      SIGNS/BUILDING NAME............................................................................     58

         24.1     Interior Signs........................................................................     58
         24.2     Exterior Signs........................................................................     59
         24.3     Building Name.........................................................................     59

25.      MERCHANDISE....................................................................................     59

26.      MISCELLANEOUS..................................................................................     60

         26.1     Successors or Assigns.................................................................     60
         26.2     Intentionally Omitted.................................................................     60
         26.3     Broker's Commission...................................................................     60
         26.4     Partial Invalidity....................................................................     60
         26.5     Intentionally Omitted.................................................................     60
         26.6     Recording.............................................................................     60
         26.7     Notices...............................................................................     61
         26.8     Waiver................................................................................     61
         26.9     Joint Obligation......................................................................     61
</TABLE>

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<TABLE>
<S>                                                                                                          <C>
         26.10    Landlord's Liability..................................................................     61
         26.11    Time.    .............................................................................     62
         26.12    Lease as Sublease.....................................................................     62
         26.13    Prior Agreements......................................................................     63
         26.14    Inability to Perform..................................................................     63
         26.15    Transfer of Landlord's Interest.......................................................     63
         26.16    Transportation Management Programs; Recycling.........................................     63
         26.17    No Light, Air or View Easement........................................................     64
         26.18    Captions..............................................................................     64
         26.19    Project Name..........................................................................     64
         26.20    Choice of Law-Venue...................................................................     64
         26.21    Intentionally Omitted.................................................................     64
         26.22    No Jury Trial.........................................................................     64
         26.23    OFAC Certification....................................................................     64
         26.24    Guaranty..............................................................................     65
         26.25    Affiliates............................................................................     65

27.      CONFIDENTIALITY................................................................................     65

28.      ADDITIONAL LEASE TERMINATION AND REMEDIAL RIGHTS...............................................     65

         28.1     Building and Base Building Improvements ..............................................     66
         28.2     Reimbursement Amount for Delay in Substantial Completion of Premises
                  Improvements..........................................................................     66
         28.3     Termination Right for Suspension or Delay of Substantial Completion of
                  Premises Improvements.................................................................     66
         28.4     Tenant Deliverables...................................................................     67
         28.5     Limitation of Liability for Landlord's Lender and New Owners..........................     67

29.      Approval by Landlord's Lenders and Members.....................................................     67

30.      Tenant's Leasehold Title Insurance.............................................................     68

31.      Storage Space in the Project...................................................................     68
</TABLE>

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<PAGE>

                           LINCOLN SQUARE OFFICE LEASE

      THIS LEASE is made and entered into as of December _____, 2005, between
LINCOLN SQUARE OFFICE, LLC, a Washington limited liability company ("Landlord"),
and EDDIE BAUER, INC., a Delaware corporation ("Tenant").

                                    RECITALS

      A. Affiliates of Landlord are currently constructing a mixed use project
in Bellevue, Washington, commonly known as "Lincoln Square" that includes
garage, retail, office, hotel, and residential uses in separate condominiums
created on real property owned or ground leased by LS Holdings, LLC, a
Washington limited liability company ("LS"), and located on the Northwest corner
of NE 8th Street and 104th Avenue NE in Bellevue, Washington (the "Project).

      B. Landlord owns the two (2) condominium units within the Lincoln Square
Office Condominium, A Condominium more fully described in Section 2.4 of this
Lease, the legal description for which is attached as Exhibit A to this Lease
and incorporated by this reference (the "Office Condominium"). The Office
Condominium is part of the Project and the Landlord has certain rights to
develop and construct a commercial office building within the Office
Condominium. The Office Condominium is above and contiguous to the condominiums
in the Project within which the garage and retail improvements have been
constructed. Subject to certain conditions described in this Lease, Landlord
will cause a high-rise office tower designed and permitted to consist of up to
25 floors of first-class office space, plus a mechanical floor for total of 26
floors (on top of a three (3) floor retail podium) (the "Building") to be
constructed on and within the Office Condominium. Under the current proposed
schedule, which schedule is subject to change, construction of the Building will
commence no later than January 31, 2006. The Building is expected to contain
approximately 539,665 square feet of Rentable Square Feet and may include a
restaurant on the top floor of the Building (the "Building Restaurant").

      C. A small portion of the real property within the boundaries of the
Office Condominium is owned by a third party and leased to LS under a ground
lease dated March 1, 1990, which in turn is subleased to Landlord under a
sublease dated March 10, 2005, between LS and Landlord, all as more fully
described in Section 26.12 of this Lease. The real property that is the subject
of the March 1, 1990, ground lease is more fully described on Exhibit A-1
attached hereto and incorporated herein by reference (the "Addable Property").

      D. Landlord desires to lease certain office space in the Building
described below in this Lease (the "Leased Premises") to Tenant, and Tenant
desires to take and lease such

<PAGE>

Leased Premises from Landlord. Landlord and Tenant have prepared this document
as evidence of their agreement regarding the composition of the Leased Premises
and the lease for the Leased Premises.

      NOW THEREFORE, for and in consideration of the rents reserved hereunder
and the terms and conditions hereof, Landlord and Tenant agree as follows.

1.    BASIC LEASE PROVISIONS AND IDENTIFICATION OF EXHIBITS.

      1.1   BASIC LEASE PROVISIONS

LANDLORD:

      Lincoln Square Office, LLC, a Washington limited liability company.

ADDRESS OF LANDLORD:

      Post Office Box 908
      Bellevue, Washington 98009.

TENANT:

      Eddie Bauer, Inc., a Delaware corporation.

ADDRESS OF TENANT

      Prior to the Commencement Date:

      Regular mail:                                     With copy to:
      Eddie Bauer, Inc.                                 Eddie Bauer, Inc.
      P.O. Box 97000                                    P.O. Box 97000
      Redmond, WA 98073-9700                            Redmond, WA 98073-9700
      Attn: Real Estate - Vice President                Attn: General Counsel
                                                        With copy to:
      Courier mail or hand deliveries:
      Eddie Bauer, Inc.                                 Eddie Bauer, Inc.
      15012 N.E. 36th  Street                           15012 N.E. 36th  Street
      Redmond, WA 98052                                 Redmond, WA 98052
      Attn: Real Estate - Vice President                Attn: General Counsel

      With additional copy of notices relating to payment to:
      Eddie Bauer, Inc.
      P.O. Box 97014
      Redmond, WA 98073-9700
      Attn: General Accounting EBN

<PAGE>

      After the Commencement Date, the Address of Tenant shall be the Building
      address and using Suite 700 as Tenant's address at the Leased Premises. A
      copy of any notice shall still be provided to Eddie Bauer's Real
      Estate-General Counsel at the Tenant's address at the Leased Premises.

LEASED PREMISES:

      The areas on Floors 4 through and including Floor 13 set forth in the
      following table and as shown on Exhibit C, and comprising approximately
      195,026 Usable Square Feet, and 220,379 Rentable Square Feet (as further
      defined in Section 2.2, below), all subject to adjustment to actual Usable
      Square Feet and Rentable Square Feet in the Leased Premises following
      Substantial Completion, as determined in accordance with Section 2.2 of
      this Lease and the terms of the Improvement Agreement attached as Exhibit
      D to this Lease.

<TABLE>
<CAPTION>
                                 TENANT          USABLE         LOAD          RENTABLE
 FLOOR           TENANT           TYPE            AREA         FACTOR           AREA
<S>            <C>               <C>           <C>             <C>            <C>
Level 4        Eddie Bauer       Single        14,181.7        13.00%         16,025.3
Level 5        Eddie Bauer       Single        31,075.5        13.00%         35,115.3
Level 6        Eddie Bauer       Single        18,675.5        13.00%         21,103.3
Level 7        Eddie Bauer       Single        18,688.7        13.00%         21,118.2
Level 8        Eddie Bauer       Single        18,701.8        13.00%         21,133.0
Level 9        Eddie Bauer       Single        18,714.9        13.00%         21,147.8
Level 10       Eddie Bauer       Single        18,728.0        13.00%         21,162.6
Level 11       Eddie Bauer       Single        18,741.1        13.00%         21,177.4
Level 12       Eddie Bauer       Single        18,754.2        13.00%         21,192.2
Level 13       Eddie Bauer       Single        18,764.5        13.00%         21,203.9
 TOTAL         EDDIE BAUER       SINGLE         195,026        13.00%          220,379
</TABLE>

      The Leased Premises shall also include the improvements to be constructed
      therein by Landlord under this Lease (the "Base Building Improvements")
      and any upgrades to the Base Building (the "Upgrades") and all
      improvements to be constructed in the Leased Premises by or on behalf of
      Tenant (the "Premises Improvements"), all as described in the Improvement
      Agreement, and all appurtenances, easements and other

<PAGE>

      rights pertaining to the Leased Premises, or available to Tenant as a
      "Major Tenant" of the Project as defined in the Master Declaration, the
      Declaration and the Project Documents (all as defined in Section 2.4
      below), or in law or equity; provided, however, that notwithstanding
      anything to the contrary contained herein or in the Master Declaration,
      the Declaration and the Project Documents, in the event of any
      inconsistencies between this Lease, the Improvement Agreement, the Master
      Declaration, the Declaration and the Project Documents, the terms and
      conditions of this Lease shall control.

LEASE TERM:

      One hundred and eighty (180) full calendar months following the
      Commencement Date, plus that portion, if necessary, of the calendar month
      in which the Commencement Date falls beginning with the Commencement Date
      and ending on the last day of that partial calendar month. Such partial
      calendar month shall be included in and be part of the first month of the
      Lease Term.

ESTIMATED ACCESS DATE:

      May 1, 2007.

ESTIMATED COMMENCEMENT DATE:

      June 1, 2007, or as otherwise set forth in Section 3.1.

ESTIMATED EXPIRATION DATE:

      May 31, 2022.

BASE RENT:

      FLOORS 4 THROUGH 12:

      From and including the Commencement Date through and including the
      thirty-sixth (36th) month, Base Rent shall be $20.00 per Rentable Square
      Foot (as defined in Section 2.2(b)) in the Leased Premises per annum.

      From and including the thirty-seventh (37th) month through and including
      the forty-eighth (48th) month, Base Rent shall be $21.00 per Rentable
      Square Foot in the Leased Premises per annum.

      From and including the forty-ninth (49th) month through and including the
      sixtieth (60th) month, Base Rent shall be $23.00 per Rentable Square Foot
      in the Leased Premises per annum.

<PAGE>

      From and including the sixty-first (61st) month through and including the
      seventy-second (72nd) month, Base Rent shall be $24.69 per Rentable Square
      Foot in the Leased Premises per annum.

      From and including the seventy-third (73rd) month through and including
      the eighty-fourth (84th) month, Base Rent shall be $25.40 per Rentable
      Square Foot in the Leased Premises per annum.

      From and including the eighty-fifth (85th) month through and including the
      ninety-sixth (96th) month, Base Rent shall be $26.13 per Rentable Square
      Foot in the Leased Premises per annum.

      From and including the ninety-seventh (97th) month through and including
      the one hundred and eighth (108th) month, Base Rent shall be $26.89 per
      Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and ninth (109th) month through and
      including the one hundred and twentieth (120th) month, Base Rent shall be
      $27.66 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and twenty-first (121st) month through
      and including the one hundred and thirty-second (132nd) month, Base Rent
      shall be $27.46 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and thirty-third (133rd) month through
      and including the one hundred and forty-fourth (144th) month, Base Rent
      shall be $28.29 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and forty-fifth (145th) month through
      and including the one hundred and fifty-sixth (156th) month, Base Rent
      shall be $29.14 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and fifty-seventh (157th) month through
      and including the one hundred and sixty-eighth (168th) month, Base Rent
      shall be $30.01 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and sixty-ninth (169th) month through
      and including the one hundred and eightieth (180th) month, Base Rent shall
      be $30.91 per Rentable Square Foot in the Leased Premises per annum (the
      "Final Base Rent").

      FLOOR 13:

      From and including the Commencement Date through and including the
      thirty-sixth (36th) month, Base Rent shall be $22.00 per Rentable Square
      Foot (as defined in Section 2.2(b)) in the Leased Premises per annum.

<PAGE>

      From and including the thirty-seventh (37th) month through and including
      the forty-eighth (48th) month, Base Rent shall be $23.00 per Rentable
      Square Foot in the Leased Premises per annum.

      From and including the forty-ninth (49th) month through and including the
      sixtieth (60th) month, Base Rent shall be $25.00 per Rentable Square Foot
      in the Leased Premises per annum.

      From and including the sixty-first (61st) month through and including the
      seventy-second (72nd) month, Base Rent shall be $26.69 per Rentable Square
      Foot in the Leased Premises per annum.

      From and including the seventy-third (73rd) month through and including
      the eighty-fourth (84th) month, Base Rent shall be $27.40 per Rentable
      Square Foot in the Leased Premises per annum.

      From and including the eighty-fifth (85th) month through and including the
      ninety-sixth (96th) month, Base Rent shall be $28.13 per Rentable Square
      Foot in the Leased Premises per annum.

      From and including the ninety-seventh (97th) month through and including
      the one hundred and eighth (108th) month, Base Rent shall be $28.89 per
      Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and ninth (109th) month through and
      including the one hundred and twentieth (120th) month, Base Rent shall be
      $29.66 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and twenty-first (121st) month through
      and including the one hundred and thirty-second (132nd) month, Base Rent
      shall be $29.46 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and thirty-third (133rd) month through
      and including the one hundred and forty-fourth (144th) month, Base Rent
      shall be $30.29 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and forty-fifth (145th) month through
      and including the one hundred and fifty-sixth (156th) month, Base Rent
      shall be $31.14 per Rentable Square Foot in the Leased Premises per annum.

      From and including the one hundred and fifty-seventh (157th) month through
      and including the one hundred and sixty-eighth (168th) month, Base Rent
      shall be $32.01 per Rentable Square Foot in the Leased Premises per annum.

<PAGE>

      From and including the one hundred and sixty-ninth (169th) month through
      and including the one hundred and eightieth (180th) month, Base Rent shall
      be $32.91 per Rentable Square Foot in the Leased Premises per annum (the
      "Final Base Rent").

PERMITTED USES:

      Tenant's use of the Leased Premises shall be limited to general office use
      and related computer, telecommunications, document production, storage and
      other legal uses consistent with the use of the Leased Premises as a
      corporate headquarters of a publicly traded company, and other legal uses
      expressly permitted in this Lease or permitted by the written consent of
      Landlord, which shall not be unreasonably withheld, conditioned or delayed
      so long as such use is consistent with a first-class office building. For
      Eddie Bauer, Inc. and its Affiliates (but not any unaffiliated assignee or
      sublessee) such general office use shall include without limitation
      Tenant's collateral use of the Leased Premises for (i) employee training,
      (ii) document and marketing materials production; (iii) conducting
      marketing meetings and focus group meetings related to Tenant's products
      and stores (iv) specialized product evaluation and quality assurance
      facilities related to Tenant's apparel business ("Tenant's QA Use") on
      Floor 4 or 5, the fabrication and evaluation of mock retail store
      improvements and layouts ("Tenant's Mock Store Use") on Floor 4 or 5, the
      sale of Tenant's sample clothing products to employees of Tenant working
      in the Building and a limited number of persons associated with Eddie
      Bauer Inc. (not to exceed 200) ("Private Employee Sales") and the sale of
      Eddie Bauer related merchandise to employees of Tenant working in the
      Building ("Tenant's Corporate Store"). A portion of the Leased Premises on
      Floor 4 or 5 may also be used for an exercise facility for employees of
      Eddie Bauer, Inc. employed at the Leased Premises and a portion of the
      Leased Premises may be used as a lunch room for employees of Eddie Bauer,
      Inc. employed at the Leased Premises (the "Lunch Room") provided no food
      is cooked (other than by microwave) or prepared or served (other than by
      vending machine or routinely prepared or served in the ordinary course of
      Tenant's business) in the Lunch Room, and the Lunch Room does not serve or
      otherwise function as or similar to a restaurant or cafeteria.
      Notwithstanding the foregoing, Tenant may occasionally conduct catered
      events in the Lunch Room or other suitable areas of the Leased Premises
      for company meetings, marketing events or holiday or other celebrations.
      The Leased Premises shall not be used for any other use or purpose.

SECURITY DEPOSIT:

      Three (3) months Base Rent and Other Charges totaling One Million Six
      Hundred Thirty-six Thousand Three Hundred Fourteen and 08/100 Dollars
      ($1,636,314.08), which may be satisfied by purchase of an unconditional
      irrevocable standby letter of credit in favor of Landlord issued in the
      customary form used by the institution issuing it, and from an institution
      reasonably acceptable to Landlord. The Bank of America is an acceptable
      institution.

<PAGE>

GUARANTOR:

      Eddie Bauer Holdings, Inc.

LANDLORD IMPROVEMENT ALLOWANCE:

      Provided Tenant is not in material default beyond any applicable cure
period under the Lease at the time of any request for payment of some or all of
Landlord's Improvement Allowance (as defined below), Landlord shall provide an
allowance of $41.00 per Usable Square Foot in the Leased Premises ("Landlord's
Improvement Allowance") for costs related to the design, permitting and
construction of Premises Improvements and Upgrades and related governmental,
permit and professional fees and costs, which are in addition to the Base
Building Improvements, all as more specifically defined and set forth in the
Improvement Agreement attached hereto as EXHIBIT D. If Tenant breaches or
defaults under any of the terms and provisions of the Lease during the Lease
Term beyond any applicable cure period without the cure having been accomplished
and the Lease is terminated as provided herein or rejected, then in addition to
all other remedies of Landlord set forth in the Lease, Landlord may recover the
unamortized portion of Landlord's Improvement Allowance and brokerage
commissions paid by Landlord. The period of amortization for such reimbursement
obligation shall be the Lease Term, with interest calculated at the rate of
eight percent (8%) per annum.

      Landlord and Tenant specifically intend the recovery of Landlord's
Improvement Allowance pursuant to the preceding sentence shall not be limited or
impaired by Section 502 or other provision of the Bankruptcy Code. The foregoing
shall be deemed to be a financial accommodation of the type referenced in 11 USC
Section 365(c)(2) and a material and substantial part of this lease transaction.

PROJECT ARCHITECT:

      Sclater Partners Architects, P.C.

      1.2 IDENTIFICATION OF EXHIBITS.

      The Exhibits identified in this Section and attached to this Lease are
incorporated by reference. Each party agrees to perform any obligations on its
part stated in any of such Exhibits:

            Exhibit A. Legal Description of the Office Condominium.

            Exhibit A-1. Legal Description of the Addable Property.

            Exhibit A-2. Building Plans.

            Exhibit B. Site Plan of the Project.

<PAGE>

            Exhibit C. Location of the Leased Premises.

            Exhibit D. Improvement Agreement with Schedules D-1 through D-3.

            Exhibit E. Form of Lease Estoppel Certificate.

            Exhibit F. Form of Subordination, Non-Disturbance and Attornment
                        Agreement.

            Exhibit G. Form of Confirmation of Lease Terms.

            Exhibit H. Rules and Regulations.

            Exhibit I. Form of Guarantee of Lease.

            Exhibit J. Location of Generator.

            Exhibit K. Memorandum of Lease.

            Exhibit L. Exterior Signage

2.    PREMISES.

      2.1   THE BUILDING AND THE PROJECT.

      When constructed, the Building will be located on and within the Office
Condominium, legally described in EXHIBIT A. For purposes of this Lease, the
Building includes all improvements constructed within the Office Condominium and
all rights and interests appurtenant to the Office Condominium. The depiction of
the Building in EXHIBIT A-2 and the Project in EXHIBIT B does not and shall not
constitute a representation, covenant or warranty of any kind by Landlord,
although Landlord agrees that the final design for the Building will be
substantially consistent with the drawings attached hereto as EXHIBIT A-2.
Tenant acknowledges that prior to entering into this Lease, Tenant has reviewed
the set of drawings for the Building attached hereto as EXHIBIT A-2, and has
inspected the Project in its current unfinished condition at the time of the
execution of this Lease.

      2.2   LEASED PREMISES.

            (a) Generally. Landlord hereby leases and demises to Tenant on the
Commencement Date, and Tenant hereby accepts from Landlord on the Commencement
Date, subject to and with the benefit of the terms and provisions of this Lease,
the Leased Premises described in Section 1.1 and depicted in EXHIBIT C. Except
as otherwise provided in this Lease, the Leased Premises does not include the
space above the suspended ceiling or below the surface of the floor slab.

            (b) Confirmation of Usable Square Feet and Rentable Square Feet.
Within thirty (30) days after the Premises Improvements are Substantially
Complete (as

<PAGE>

defined in the Improvement Agreement), the Project Architect shall verify the
Usable Area (referred to in this Lease as the "Usable Square Feet") and
resulting Rentable Square Feet of the Leased Premises and of the Building and
provide notice of its determination in writing with reasonable supporting
documents to both Landlord and Tenant. The measurement of Usable Area shall be
made in accordance with American National Standard (ANSI/BOMA Z65.1-1996)
Standard Method of Measuring Floor Area in Office Buildings, approved by the
American National Standards Institute, Inc., on June 7, 1996, and published by
the Building Owner's and Manager's Association (the "BOMA Standard"). For
purposes of this Lease, the term "Rentable Square Feet" as applied to the Leased
Premises and the Building shall mean the total number of square feet of Rentable
Square Feet, using a thirteen percent (13%) load factor for single-tenant floors
and a nineteen percent (19%) load factor for multi-tenant floors, applied to the
total number of square feet of Usable Area in the Leased Premises and the
Building, respectively, as determined under the BOMA Standard and this provision
(the "Rentable Square Feet"). The Project Architect's determination, made in
good faith, as to whether a floor that is not fully occupied is a single-tenant
floor or a multi-tenant floor shall be conclusive. If as a result of such
verification process the Usable Square Feet and the Rentable Square Feet in the
Leased Premises and the Building are revised, and if after receipt and review of
such verification the Tenant reasonably and in good faith disputes any of the
revised Usable Square Feet and Rentable Square Feet figures for the Leased
Premises or the Building, as determined by the Project Architect, then the
Tenant shall give written notice of its reasonable and good faith objection to
the Landlord ("Tenant's Objection Notice"). If Tenant does not give the Tenant's
Objection Notice within fifteen (15) days of the date that Tenant receives the
notice of determination from the Project Architect, then Tenant shall be deemed
to have waived and released any right to later object to the Usable Square Feet
and Rentable Square Feet determinations. Within fifteen (15) days of the date
that Landlord receives Tenant's Objection Notice pursuant to the immediately
preceding sentence, the Tenant and Landlord shall meet and use reasonable
efforts to agree on the Usable Square Feet and Rentable Square Feet of the
Leased Premises and the Building. If the Landlord and Tenant are unable to reach
agreement, then the Landlord and Tenant shall select an architect who shall be
mutually acceptable to both parties ("Third Party Architect") to determine the
Usable Square Feet and Rentable Square Feet of the Leased Premises and the
Building. The determination of the Third Party Architect shall be conclusive on
Landlord and Tenant and shall be provided by written notice with reasonable
supporting documents to both Landlord and Tenant. Upon determination of the
Usable Square Feet and Rentable Square Feet of the Leased Premises and the
Building, the parties shall execute a written certification setting forth such
Usable Square Feet and Rentable Square Feet of the Leased Premises and of the
Building, as revised, effective as of the Commencement Date. If the Usable
Square Feet and Rentable Square Feet of the Leased Premises are revised pursuant
to this Section or otherwise pursuant to this Lease during the Lease Term, the
Tenant's Share of Other Charges shall be adjusted to properly reflect such event
and the parties shall execute a written amendment to this Lease to reflect such
adjusted Usable Square Feet, Rentable Square Feet and Tenant's Share. The cost
and expense of the Project Architect and Third Party Architect for services
required under this Section shall be shared equally by Landlord and Tenant.

<PAGE>

      2.3   RESERVED TO LANDLORD.

      Landlord reserves the right from time to time to expand, reduce and
otherwise change the size and dimensions of the Project; locate, relocate,
substitute, alter and change the number and location of buildings and other
improvements within the Project; change any building dimension, and the number
of floors in any of the buildings, Common Areas and Facilities, parking areas,
identity and type of stores and tenancies, the Building name (except as
otherwise provided herein, including without limitation Section 24 below) and
the names and the common areas located from time to time in or on the Building
(except as otherwise provided herein)or in or on the Project. Notwithstanding
the foregoing, Landlord shall not make changes to the Building or Project, their
name, improvements, or Common Areas and Facilities that materially and adversely
interfere with the operation of Tenant's business in the Leased Premises
pursuant to the Permitted Uses, materially increase Tenant's Other Charges due
hereunder, or materially and adversely deny Tenant the principal benefits of
this Lease. Landlord further reserves the use of the exterior walls, the roof,
and the right to install, maintain, use, repair and replace pipes, ducts,
conduits and wires leading through the Leased Premises (including areas of the
Leased Premises in which there is an open ceiling) in locations which will not
materially interfere with Tenant's use thereof and which serve other parts of
the Building. Landlord shall use reasonable efforts to locate such items under
the floor, above the suspended ceiling, or within an interior wall or other
utility raceway or conduit, and otherwise adjacent to an interior wall.
Notwithstanding the forgoing, Landlord will not unreasonably withhold its
consent to Tenant's having an "open ceiling," and not a suspended ceiling, in up
to four (4) floors of the Leased Premises including areas of the Leased Premises
in which the merchandising department and Tenant's Mock Store Use are conducted
provided that the use of an open ceiling design will not in the professional and
disinterested opinion of the Project Architect impair or endanger any Building
systems or otherwise detract from first class character of the Building. Tenant
shall give Landlord assurances that are reasonably acceptable to Landlord and
Landlord's lenders that Tenant will, at the expiration or earlier termination of
the Lease, pay to Landlord an amount sufficient to cover the cost of installing
a building standard suspended ceiling of a type appropriate for the Building in
any areas of the Leased Premises that do not have such a building standard
suspended ceiling at the time the Lease is terminated. Landlord also reserves
the right to use the areas below and the spaces above the Building in any manner
and for any purpose which does not materially and adversely interfere with
Tenant's use of the Leased Premises, or materially increase Tenant's Other
Charges due hereunder, including without limitation any utility,
telecommunication, satellite or other related use permitted under this Lease, or
materially and adversely deny Tenant the principal benefits of this Lease.

      2.4   DECLARATIONS.

      The Project presently consists of five (5) separate condominiums, one each
for garage, retail, office, hotel and residential condominiums in the mixed use
Project (the "Condominiums"). There presently is no part of the Project that
does not exist in one of the five (5) Condominiums, all of which are contiguous
to one or more of the other Condominiums. The Project (including the Building)
is subject to a Declaration of

<PAGE>

Covenants, Conditions, Restrictions, Reservations and Easements for Lincoln
Square dated December 23, 2004, and recorded under King County Auditor's Number
20041228002242 (the "Master Declaration"). The Office Condominium and other
condominiums in the Project are each subject to their own separate condominium
declaration and survey map and plans. The Office Condominium was created by the
recording of a Survey Map and Plans for Lincoln Square Office, a Condominium
dated March 8, 2005, and recorded under King County Auditor's Number
20050316000596, and a related Declaration of Covenants, Conditions, Restrictions
and Easements for Lincoln Square Office, a Condominium dated March 8, 2005, and
recorded under King County Auditor's Number 20050316000597 (collectively, the
"Declaration"). Pursuant to the terms and conditions of the Master Declaration
and the Declaration, tenants and users in the Building have the benefits of and
are subject to the Master Declaration and the Declaration. Tenant's rights in
the Leased Premises and the Common Areas shall be subject and subordinate to the
provisions of the Master Declaration and the Declaration. Tenant's rights in the
Leased Premises and Common Areas shall include the nonexclusive right to use for
their intended purposes all common elements within the Project and all easements
within the Project that are appurtenant to the Office Condominium or intended
for the use of tenants in the Office Condominium (a) to the extent applicable to
Tenant's uses within the Project and (b) pursuant and subject to the covenants,
conditions, restrictions, reservations and easements in the condominium
declarations, survey maps and plans, bylaws and rules and regulations for any of
the Condominiums in the Project, as such are amended from time to time
(collectively the "Project Documents"). Tenant shall be considered a Major
Tenant of the Project as defined in the Master Declaration. In the event of any
inconsistencies between the terms and conditions of this Lease, the Master
Declaration, the Declaration and the Project Documents, the terms and conditions
of this Lease shall control. Landlord agrees not to amend the Declaration or
consent to the amendment of the Master Declaration that would have the effect of
materially interfering with Tenant's use or quiet enjoyment of the Leased
Premises, or materially increasing Base Rent or Other Charges or any other
material obligations of Tenant hereunder, beyond what is provided for under the
terms of this Lease, without Tenant's written consent, which shall not be
unreasonably withheld, conditioned or delayed; provided, however, if Landlord
and the condominium owners determine, in their reasonable good faith discretion,
that there is or has been an inequitable allocation of costs among the
Condominiums, Landlord and the other condominium owners shall have the right to
amend the Master Declaration or Declaration to address such inequitable
allocation.

      2.5   OFFICE CONDOMINIUM.

      Landlord warrants to Tenant that, other than with respect to Addable
Property, Landlord is the fee owner of both condominium units within the Office
Condominium; and that with respect to the Addable Property, Landlord is a
sublessee under that certain sublease dated March 10, 2005, between Landlord and
LS Holdings, LLC, a Washington limited liability company, under the Berg/Vinje
Lease described in Section 26.12 below. Landlord warrants to Tenant that it may
further sublease its sublessee interest in the Addable Property to Tenant under
this Lease.

<PAGE>

3.    TERM.

      3.1   LEASE TERM.

      The Commencement Date listed in Section 1.1 of this Lease is an estimate
of the Commencement Date. The actual Commencement Date shall be the first to
occur of the following events: (i) upon Substantial Completion of the Base
Building and Premises Improvements, as defined in the Improvement Agreement, or
(ii) the date on which Tenant takes possession of the Premises for purposes
other than installing Tenant's equipment, telephones and telecommunications
equipment and trade fixtures. If the Commencement Date is later than the
estimated Commencement Date specified in Section 1 above, this Lease shall not
be void or voidable. Landlord shall confirm the actual Commencement Date and
other related matters by delivery of the form of Confirmation of Lease Terms
attached hereto as EXHIBIT G by written notice to Tenant. Although the Lease
Term does not commence until the Commencement Date, all of the other provisions
hereof, other than the obligation to pay Rent, shall commence when Tenant or its
employees, agents or contractors are first present on the Leased Premises. A
"Lease Year" shall mean a calendar year commencing each January 1 and ending the
following December 31. If the Commencement Date is a date other than the first
day of January, the initial Lease Year shall be from the Commencement Date to
December 31 of that calendar year. If the Expiration Date is a date other than
December 31, the final Lease Year shall be from January 1 of the calendar year
of the Expiration Date to the Expiration Date.

      3.2   EXPIRATION.

      The Lease shall expire on midnight of the last day of the Lease Term,
unless sooner terminated hereunder or by operation of law, without the necessity
for any notice from either Landlord or Tenant to terminate the same. If Tenant
fails to surrender the Leased Premises at the end of the Lease Term, or any
renewal or extension thereof, Tenant shall be liable for, and will indemnify
Landlord against, all claims and demands made by any succeeding tenants against
Landlord to the extent arising out of or caused by Tenant's failure to surrender
the Leased Premises at the end of the Lease Term or any renewal or extension
thereof.

      3.3   HOLDING OVER.

      Any holding over by Tenant after the expiration of the Lease Term hereof
with Landlord's written consent shall be construed to be a tenancy from month to
month. During such tenancy, Tenant shall pay to Landlord a monthly rental of one
and one-half (1-1/2) times the amount of the Base Rent payable during the last
month of the Lease Term in addition to the Other Charges and additional rent as
set forth herein. Such tenancy shall be subject to the terms and provisions of
Articles 4 through 28 of this Lease to the extent not inconsistent with a month
to month tenancy.

<PAGE>

      3.4   PRE-COMMENCEMENT LICENSE.

      Thirty (30) days prior to the anticipated Commencement Date, Tenant and
Tenant's employees, agents and approved contractors and licensees may enter the
Leased Premises and Building pursuant to a license granted under this Section
3.4 (the "Pre-Commencement License") for the limited purpose of installing
Tenant's furniture, fixtures and equipment and otherwise preparing to conduct
business in the Leased Premises. The Pre-Commencement License shall be subject
to such reasonable restrictions and conditions as may be imposed by Landlord
from time to time. Tenant's right to enter onto the Leased Premises and Building
pursuant to the Pre-Commencement License shall not trigger the Commencement Date
under Section 3.1 above as long as Tenant complies with the reasonable
restrictions and conditions required by Landlord; provided, however, the terms
and provisions of Articles 1, 2, and 3, Sections 5.1, 5.2, 5.3 and 5.4, and
Articles 6 through 28 of this Lease, and the provisions and requirements of the
Improvement Agreement shall automatically become effective and apply to all
activities of Tenant and Tenant's employees, agents, contractors and licensees
in, about, or relating to the Leased Premises or Building. Notwithstanding
anything herein to the contrary and without limiting the generality of the
foregoing, Landlord may require Tenant and any of its agents, contractors or
licensees to sign a separate indemnification and hold harmless instrument and
provide appropriate evidence of insurance coverage as a condition to entering
onto the Leased Premises and the Building. Tenant shall coordinate all
activities on and about the Leased Premises relating to the Premises
Improvements with Landlord's Tenant Coordinator, and Tenant shall not interfere
with or hinder Landlord or Landlord's other tenants with respect to their work
or the use and enjoyment of other space within the Building.

      3.5   OPTION TO EXTEND.

      (a) Tenant shall have the right to extend the Term beyond the Expiration
Date (the "Extension Option") for one additional period of ten (10) years
commencing on the day following the Expiration Date and ending on the tenth
(10th) anniversary of the Expiration Date (the "Extended Term"), if: (i)
Landlord receives written notice of exercise ("Extension Notice") not less than
eighteen (18) full calendar months prior to the Expiration Date and not more
than twenty-four (24) full calendar months prior to the Expiration Date; (ii)
Tenant is not in default under the Lease beyond any applicable cure periods at
the time that Tenant delivers its Extension Notice; and (iii) the Lease has not
been assigned (other than to an Affiliate) prior to the date that Tenant
delivers its Extension Notice or prior to the date Tenant delivers its Binding
Notice.

      (b) The initial Base Rent rate per Rentable Square Foot in the Leased
Premises during the Extended Term shall equal the Prevailing Market (hereinafter
defined) rate per Rentable Square Foot in the Leased Premises, but in no event
shall the Based Rent during the Extended Term be less than the Final Base Rent.
Base Rent during the Renewal Term shall increase, if at all but not decrease
below the Final Base Rent, in accordance with the increases assumed in the
determination of Prevailing Market rate. Base Rent attributable to the Leased
Premises shall be payable in monthly installments in accordance with the terms

<PAGE>

and conditions of Section 4.1 of this Lease. Tenant shall pay Other Charges
during the Extended Term in accordance with Section 4.2 of this Lease.

      (c) Within thirty (30) days after receipt of Tenant's Extension Notice,
Landlord shall notify Tenant in writing of the applicable Base Rent rate for the
Leased Premises for the Extended Term ("Landlord's Notice"). Within fifteen (15)
days after the date on which Tenant receives Landlord's Notice, Tenant shall
notify Landlord in writing whether Tenant agrees or disagrees with Landlord's
determination and if Tenant disagrees provide Landlord with written notice of
Tenant's objection (an "Objection Notice"). If Tenant fails to provide Landlord
with an Objection Notice within such fifteen (15) day period, Tenant shall be
deemed to have accepted the Base Rent set forth in Landlord's Notice. If Tenant
agrees, or is deemed to have accepted, the Base Rent set forth in Landlord's
Notice, Landlord and Tenant shall enter into an Extension Amendment (as defined
below) upon the terms and conditions set forth herein. If Tenant provides
Landlord with an Objection Notice within such fifteen (15) days, Landlord and
Tenant shall work together in good faith to agree upon the Prevailing Market
rate for the Leased Premises during the Extension Term. Upon agreement, Landlord
and Tenant shall enter into an Extension Amendment in accordance with the terms
and conditions hereof. Notwithstanding the foregoing, if Landlord and Tenant are
unable to agree upon the Prevailing Market rate for the Premises within thirty
(30) days after the date on which Tenant provides Landlord with the Objection
Notice, either Landlord or Tenant, by written notice to the other (an
"Arbitration Notice") shall have the right to have the Prevailing Market rate
determined in accordance with the arbitration procedures described below.

      (d) If Landlord or Tenant gives the other an Arbitration Notice, Landlord
and Tenant, within five (5) days after the date of the Arbitration Notice, shall
each simultaneously submit to the other, in a sealed envelope, its good faith
estimate of the Prevailing Market rate for the Leased Premises during the
Extension Term (collectively referred to as the "Estimates"). If the higher of
such Estimates is not more than 105% of the lower of such Estimates, then
Prevailing Market rate shall be the average of the two Estimates. If the
Prevailing Market rate is not resolved by the exchange of Estimates, then,
within five (5) days after the exchange of Estimates, Landlord and Tenant shall
each select an appraiser to determine which of the two Estimates most closely
reflects the Prevailing Market rate for the Leased Premises during the Extension
Term. Each appraiser so selected shall be a licensed commercial real estate
broker or an MAI real estate appraiser and who shall be familiar with the
Building and have been active (over the five (5) year period ending on the date
of such appointment) in the brokering or appraisal of commercial properties in
the area within a three (3) mile radius of the Building with working knowledge
of current rental rates and practices. For purposes hereof, an "MAI" appraiser
means an individual who holds an MAI designation conferred by, and is an
independent member of, the American Institute of Real Estate Appraisers (or its
successor organization, or in the event there is no successor organization, the
organization and designation most similar). Upon selection, Landlord's and
Tenant's appraisers shall work together in good faith to agree upon which of the
two Estimates most closely reflects the Prevailing Market rate for the Leased
Premises. The Estimate chosen by such appraisers shall be binding on both
Landlord and Tenant as the Base Rent rate for the Premises during the Renewal
Term. If either Landlord or Tenant fails

<PAGE>

to appoint an appraiser within the five (5) day period referred to above, the
appraiser appointed by the other party shall be the sole appraiser for the
purposes hereof. If the two appraisers cannot agree upon which of the two
Estimates most closely reflects the Prevailing Market within 20 days after their
appointment, then, within ten (10) days after the expiration of such twenty (20)
day period, the two appraisers shall select a third appraiser meeting the
aforementioned criteria. Once the third appraiser (i.e., arbitrator) has been
selected as provided for above, then, as soon thereafter as practicable but in
any case within fourteen (14) days, the arbitrator shall make his determination
of which of the two Estimates most closely reflects the Prevailing Market rate,
and such Estimate shall be binding on both Landlord and Tenant as the Base Rent
rate for the Leased Premises. If the arbitrator believes that expert advice
would materially assist him, he may retain one or more qualified persons to
provide such expert advice. The parties shall share equally in the costs of the
arbitrator and of any experts retained by the arbitrator. Any fees of any
appraiser, counsel or experts engaged directly by Landlord or Tenant, however,
shall be borne by the party retaining such appraiser, counsel or expert. If the
Prevailing Market rate has not been determined by the commencement date of the
Extension Term, Tenant shall pay an amount equal to the Final Base Rent plus a
three dollar ($3.00) per Rentable Square Foot increase until such time as the
Prevailing Market rate has been determined. Upon such determination, the Base
Rent for the Leased Premises shall be retroactively adjusted to the commencement
of the Renewal Term for the Leased Premises. If such adjustment results in an
underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of
such underpayment within thirty (30) days after the determination thereof. If
such adjustment results in an overpayment of Base Rent by Tenant, Landlord shall
credit such overpayment against the next installment of Base Rent due under the
Lease and, to the extent necessary, any subsequent installments, until the
entire amount of such overpayment has been credited against Base Rent. If any
act called for in this Section 3.5 falls on a day other than a business day in
Washington, then the deadline for such act shall be the next following business
day.

      (e) If Tenant is entitled to and properly exercises its Extension Option,
Landlord shall prepare an amendment (the "Extension Amendment") to reflect
changes in the Base Rent, Lease Term, Expiration Date and other appropriate
terms. The Extension Amendment shall be sent to Tenant within a reasonable time
after the Prevailing Market rate for the Extension has been determined, and
Tenant shall execute and return the Extension Amendment to Landlord within
fifteen (15) days after Tenant's receipt of same, but an otherwise valid
exercise of the Extension Option shall be fully effective whether or not the
Extension Amendment is executed.

      (f) For purposes of this Extension Option, "Prevailing Market" shall mean
the arm's length fair market annual rental rate per Rentable Square Foot under
renewal leases and amendments for reasonably comparable lengths of time entered
into on or about the date on which the Prevailing Market is being determined
hereunder for space comparable to the Leased Premises in the Building, Bellevue
Place and other class A office buildings owned or controlled by Landlord or its
affiliates within a two-mile radius of the Building, with improvements
comparable to those existing in the Leased Premises on the date Tenant exercises
the Extension Option and that reflect what a willing, comparable tenant would
pay

<PAGE>

and a willing, comparable landlord would accept. The determination of Prevailing
Market shall take into account any material economic differences between the
terms of this Lease and any comparison lease or amendment, such as rent
abatements, construction costs and other concessions and the manner, if any, in
which the landlord under any such lease is reimbursed for operating expenses and
taxes. The determination of Prevailing Market shall also take into consideration
any reasonably anticipated changes in the Prevailing Market rate from the time
such Prevailing Market rate is being determined and the time such Prevailing
Market rate will become effective under this Lease.

      3.6   RIGHT OF FIRST OFFER.

      (a) Subject to the terms and conditions set forth herein, Tenant shall
have an on-going right of first offer (the "Right of First Offer") with respect
to any office space contiguous to the Leased Premises on any floor in the
Building on which the Leased Premises is located and on any office space
immediately adjacent to any floor on which the Tenant leases at least 2/3rd of
the floor's Usable Square Feet (any portion of such space or collectively, the
"Offering Space"). Tenant's Right of First Offer shall be exercised as follows:
at any time after Landlord has determined that an existing tenant in the
Offering Space will not extend or renew the term of its lease for the Offering
Space (but prior to leasing such Offering Space to a party other than the
existing tenant), Landlord shall advise Tenant (the "Advice") of the terms under
which Landlord is prepared to lease the Offering Space to Tenant, including
without limitation the term of any such lease, which terms shall reflect the
Prevailing Market rate for such Offering Space as reasonably determined by
Landlord. Tenant may lease such Offering Space in its entirety only, under such
terms, by delivering written notice of exercise to Landlord (the "Notice of
Exercise") within five (5) business days after the date of the Advice, except
that Tenant shall have no such Right of First Offer and Landlord need not
provide Tenant with an Advice, if: (i) Tenant is in default under the Lease
beyond any applicable cure periods at the time that Landlord would otherwise
deliver the Advice; or (ii) the Lease has been assigned (other than to an
Affiliate) prior to the date Landlord would otherwise deliver the Advice; or
(iii) Tenant is not occupying all of the Leased Premises on the date Landlord
would otherwise deliver the Advice; or (iv) the Offering Space is not intended
for the exclusive use of Tenant during the Lease Term; or (v) the existing
tenant in the Offering Space is interested in extending or renewing its lease
for the Offering Space or entering into a new lease for such Offering Space.
Tenant's Right of First Offer shall expire on the first day of the twenty-fourth
(24th) month prior to the date on which the Lease Term is to expire, as it may
be extended pursuant to Section 3.5 above.

      (b) The term for the Offering Space shall commence upon the commencement
date stated in the Advice and thereupon such Offering Space shall be considered
a part of the Leased Premises, provided that all of the terms stated in the
Advice shall govern Tenant's leasing of the Offering Space and only to the
extent that they do not conflict with the Advice, the terms and conditions of
this Lease shall apply to the Offering Space.

<PAGE>

      (c) Tenant shall pay Base Rent and other Rent for the Offering Space in
accordance with the terms and conditions of the Advice, which terms and
conditions shall reflect the Prevailing Market rate for the Offering Space as
determined in Landlord's reasonable judgment.

      (d) The Offering Space (including improvements and personal property, if
any) shall be accepted by Tenant in its condition and as-built configuration
existing on the earlier of the date Tenant takes possession of the Offering
Space or as of the date the term for such Offering Space commences, unless the
Advice specifies any work to be performed by Landlord in the Offering Space, in
which case Landlord shall perform such work in the Offering Space. If Landlord
is delayed delivering possession of the Offering Space due to the holdover or
unlawful possession of such space by any party, Landlord shall use reasonable
efforts to obtain possession of the space, and the commencement of the term for
the Offering Space shall be postponed until the date Landlord delivers
possession of the Offering Space to Tenant free from occupancy by any party.

      (e) The rights of Tenant hereunder with respect to the Offering Space
shall terminate on the earlier to occur of: (i) Tenant's failure to exercise its
Right of First Offer within the five (5) business day period provided above; and
(ii) the date Landlord would have provided Tenant an Advice if Tenant had not
been in violation of one or more of the conditions set forth above.

      (f) If Tenant exercises its Right of First Offer, Landlord shall prepare
an amendment (the "Offering Amendment") adding the Offering Space to the
Premises on the terms set forth in the Advice and reflecting the changes in the
Base Rent, Rentable Square Feet in the Premises, Tenant's Share and other
appropriate terms. A copy of the Offering Amendment shall be sent to Tenant
within a reasonable time after Landlord's receipt of the Notice of Exercise
executed by Tenant, and Tenant shall execute and return the Offering Amendment
to Landlord within fifteen (15) days thereafter, but an otherwise valid exercise
of the Right of First Offer shall be fully effective whether or not the Offering
Amendment is executed.

      (g) For purposes of this Right of First Offer provision, "Prevailing
Market" shall mean the annual rental rate per Rentable Square Foot for space
comparable to the Offering Space in the Building under leases and renewal and
expansion amendments being entered into at or about the time that Prevailing
Market is being determined, giving appropriate consideration to tenant
concessions, tenant improvement allowances, existing improvements in the space
in question, and the method of allocating operating expenses and taxes.
Notwithstanding the foregoing, space leased under any of the following
circumstances shall not be considered to be comparable for purposes hereof: (i)
the lease term is for less than the lease term of the Offering Space, (ii) the
space is encumbered by the option rights of another tenant, or (iii) the space
has a lack of windows and/or an awkward or unusual shape or configuration. The
foregoing is not intended to be an exclusive list of space that will not be
considered to be comparable. The Landlord's good faith determination of what
terms and rentals constitute Prevailing Market shall be deemed conclusive and
dispositive.

<PAGE>

4.    RENT.

      4.1   BASE RENT.

      Tenant shall pay to Landlord, without notice or demand and without any
setoff or deduction whatsoever, as Base Rent, the monthly sums set forth in
Section 1.1 above (the "Base Rent"), which shall be paid in advance on or before
the first day of each calendar month of the Lease Term. If the Lease Term
commences on a day other than the first day of a calendar month or expires on a
day other than the last day of a calendar month, the Base Rent for such month
shall be a prorated portion of the monthly Base Rent, based upon a thirty (30)
day month.

      4.2   OTHER CHARGES.

      In addition to the Base Rent, Tenant shall pay, without any variation,
setoff or deduction, all charges, costs and expenses of any kind and nature
relating to the Leased Premises, as well as Tenant's Share of the items set
forth in this Section 4.2 (herein called "Other Charges"):

      (a) Tenant's Share of Taxes. Tenant shall pay to Landlord, as additional
rent, in the manner provided in Section 4.2(d), Tenant's Share of the total Real
Estate Taxes. For purposes of this Section, the term "Real Estate Taxes" shall
include all real estate taxes, personal property taxes, surcharges and
assessments, including but not limited to local improvement district and water
improvement district assessments, if any, that are or may be levied upon,
assessed against or attributable to the Leased Premises, the Building and the
land underlying the Building in which the Leased Premises are located and all
improvements, fixtures and equipment of Landlord located thereon or used in
connection with the operation of the Building and that are payable during the
Lease Term. The term "Real Estate Taxes" shall also include the share of such
Project taxes, surcharges and assessments levied with respect to the Project
which are allocated to the Building under the Project Documents; any taxes
levied or assessed in lieu of, in whole or in part, such real or personal
property taxes; any taxes in addition to such real and personal property taxes,
including, but not limited to, taxes or license fees upon or measured by the
leasing of the Building or the rents or other income collected therefrom, other
than any federal or state net income or inheritance tax; and all costs and
expenses incurred by Landlord in efforts to reduce or minimize such taxes or
assessment levels. Tenant's Share of the Real Estate Taxes shall be an amount
equal to the total Real Estate Taxes during each Lease Year of the Lease Term,
multiplied by a fraction, the numerator of which is the Rentable Square Feet in
the Leased Premises and the denominator of which is the Rentable Square Feet in
the Building.

      (b) Tenant's Share of Operating Costs. Tenant shall pay to Landlord, as
additional rent, in the manner provided in Section 4.2(d), Tenant's Share of
"Building Operating Costs" which shall include the Building's share of "Project
Operating Costs" incurred by Landlord in any Lease Year. "Building Operating
Costs" means Operating Costs incurred by Landlord in connection with
maintaining, managing, operating, repairing and administering the Building, and
any Project Operating Costs which are allocated to Landlord with respect to the

<PAGE>

Building pursuant to the Project Documents, or otherwise allocated to the
Building based on such other information or agreement as Landlord in good faith
deems (i) reasonable and equitable, and (ii) consistent with first-class office
building management practices in other class A office buildings in the Bellevue
central business district. "Project Operating Costs" mean Operating Costs
incurred in maintaining, managing, operating, repairing and administering the
Project which are appropriately charged to Landlord with respect to the Building
pursuant to the Project Documents and this provision. Tenant's Share of Building
Operating Costs shall be equal to the total Building Operating Costs during each
Lease Year of the Lease Term, multiplied by a fraction, the numerator of which
is the Rentable Square Feet in the Leased Premises and the denominator of which
is the Rentable Square Feet in the Building. The Building Operating Costs
include the appropriate share of Project Operating Costs attributable to the
Building. Thus in paying Tenant's Share of Building Operating Costs, Tenant will
also be paying its share of Project Operating Costs generally in proportion to
and consistent with the benefits afforded to the Building from the services or
amenities generating such Project Operating Costs, as determined by the Landlord
in good faith.

      (c) Operating Costs. The term "Operating Costs" when used in conjunction
with either the Building or the Project, as the case may be, means all expenses
paid or incurred by Landlord or charged to Landlord for maintaining, managing,
operating, repairing, replacing and administering either the Building, the
Project, and/or the Common Areas and Facilities (the term "Common Areas and
Facilities" is defined in Section 13.1), and the personal property used in
conjunction therewith, including without limitation, water, sewer, electricity,
heat, air conditioning, fuel, light, fire protection, and other utilities and
services; supplies; janitorial and cleaning services; window washing; snow,
garbage and refuse removal; security and information technology services and
systems; landscape maintenance; parking maintenance and operations; compensation
(including employment taxes and fringe benefits provided such fringe benefits
are reasonable and customary for the area in which the Building is located) of
all persons who perform duties in connection with the operation, management,
maintenance, repair and administration of either the Building, the Project,
and/or the Common Areas and Facilities as the case may be; insurance premiums
for all insurance carried with respect to the Building, the Project, and/or the
Common Areas and Facilities (and all deductibles with respect thereto) as the
case may be; licenses, permits and inspection fees; subsidies, fees and other
payments required by public bodies (such as, but not limited to, bus rider and
other transit subsidies and the cost of implementing and administering such
subsidies); property management fees; reserves to cover the depreciation of
Building systems; costs of compliance with any applicable legal requirement,
including without limitation any transportation management plan; market-based
rent for any on-site property management office; easement and license fees; the
cost of any capital improvements necessary or appropriate to fulfill Landlord's
repair or maintenance obligations, or required by any applicable governmental
law or regulation not in effect at the time Tenant is required to take occupancy
of the Leased Premises, or items which, although capital in nature, are made to
reduce the normal operating costs of the Building (but such costs shall be
amortized over their useful life and shall be included if in compliance with
Section 4.2(l) below); reasonable legal and accounting expenses and all other
expenses or charges whether or not hereinabove described which, in accordance
with generally accepted accounting and management practices, would be considered
an expense of maintaining, managing,

<PAGE>

operating, repairing, replacing and administering the Building, the Project,
and/or the Common Areas and Facilities, as the case may be. The activities and
costs related to the Common Areas and Facilities are to be included in the
appropriate category of Building Operating Costs or Project Operating Costs
which are then allocated throughout the Project based on their location in or
relationship to the Building or Project, respectively.

      (d) Payment of Other Charges. Within ninety (90) days after the expiration
of each Lease Year of the Lease Term (or as soon thereafter as such information
becomes available), Landlord shall notify Tenant in writing of Landlord's
estimate of Tenant's Share of the Other Charges due for the next Lease Year.
Tenant shall pay the estimated Tenant's Share in advance in equal monthly
installments on the first day of each month of such Lease Year. During the
period of time following the expiration of a Lease Year and Tenant's receipt of
its estimated Tenant's Share, Tenant shall continue to pay Landlord the same
amounts that were estimated for the prior Lease Year. Within ninety (90) days
after the end of each Lease Year, or as soon thereafter as such information
becomes available, Landlord shall compute Tenant's Share for such Lease Year
based upon the actual amount of the Other Charges for that Lease Year, and if
the total amount paid by Tenant for such Lease Year is less than the actual
amount of Tenant's Share for such Lease Year, Tenant shall pay Landlord any
deficiency promptly upon receipt of a written notice of the amount thereof from
Landlord. If the total amount paid by Tenant for such Lease Year exceeds the
actual amount of Tenant's Share, Landlord shall credit such excess to the next
monthly payments of Tenant's Share of Other Charges which thereafter come due.
If this Lease commences at a time other than the beginning of a calendar year,
Tenant shall pay the estimated Tenant's Share for the remaining portion of the
initial Lease Year from and including the Commencement Date. If this Lease
expires at a time other than the last day of a calendar year, Tenant shall be
obligated to pay immediately any deficiencies which shall be computed at the
expiration of that Lease Year. If the estimated amount Tenant has paid for that
Lease Year exceeds the actual amount of Tenant's Share, and if Tenant has
otherwise complied with all of the terms and provisions of this Lease and has
paid all amounts that are or may otherwise become payable to Landlord, Landlord
shall credit such excess to the next payment or payments of Additional Rent due
hereunder, or refund such excess to Tenant if such excess occurs in the final
Lease Year of the Lease Term. If at any time during a Lease Year the amount of
the estimated Other Charges increases over the actual amount thereof for the
preceding Lease Year, or if the estimated Other Charges for a Lease Year are
revised and exceed the previously estimated Other Charges for such Lease Year,
then Landlord may, at its election, adjust the amount of monthly estimated
installments due during the balance of that Lease Year to compensate for such
increase. Any increased payments required to be made pursuant to this Section
shall be made within thirty (30) days after Landlord has notified Tenant
thereof. Tenant's obligations under this Section shall survive the expiration or
termination of this Lease.

      (e) Future Development. Tenant is aware that Landlord, by itself or in
combination with other persons, may, subject to Section 2.3 above, further
expand and develop the Building and Project. Such additional expansions and
developments may include, without limitation, the addition of a skybridge across
NE 8th Street. Except as

<PAGE>

otherwise provided in Section 4.2(h) below, in the event any such additional
developments are completed during the Lease Term, any additional operating or
repair costs or maintenance expenses and real estate taxes attributable to such
additions or other phases (but subject to Sections 4.2(h) and 4.2(l) below) may
be included in the Other Charges at Landlord's discretion, so long as any
additional rentable areas associated with such expansion or development are also
included in the base of those who share such additional costs and real estate
taxes pay their pro rata share of such items.

      (f) Disputes Relating To Other Charges. If Tenant desires to contest any
Other Charge calculation by Landlord or the amount of any Other Charge payable
by Tenant, Tenant must give Landlord a written notice (an "Objection Notice")
stating that Tenant disputes the calculation or amount. The Objection Notice
must be received by Landlord within ninety (90) days after the last day of the
Lease Year to which the disputed Other Charge pertains and must set forth with
particularity the reason why Tenant disputes Landlord's calculation or the
amount. If Tenant fails to give Landlord such an Objection Notice within such
time, Tenant shall be deemed to have waived and released any and all rights it
may have to contest the calculation and amount of such Other Charge. Promptly
after receiving any such Objection Notice from Tenant, Landlord shall meet with
Tenant and both Tenant and Landlord shall attempt in good faith to reconcile the
matters described in the Objection Notice; provided, however, if Tenant refuses
to meet with Landlord within thirty (30) days after the date Landlord received
the Objection Notice from Tenant, Tenant shall be deemed to have waived and
released any and all rights it may have to contest Landlord's calculation and
the amount of such Other Charge. If Landlord and Tenant are unable to resolve
the dispute within a reasonable time, Landlord shall cause its accounting firm
to undertake an investigation and analysis of the matter and prepare a written
report, a copy of which shall be provided to Tenant. The cost of the
investigation, analysis and report shall be paid for by Tenant unless the
investigation and analysis discloses a material (i.e., five percent (5%) or
more) error favoring Landlord, in which event Landlord shall bear the cost of
the investigation, analysis and report. If the report discloses that the amount
or calculation used by Landlord was incorrect, Landlord shall provide a credit
to Tenant for future Other Charges payable by Tenant equal to the amount of any
overpayment paid by Tenant during the Lease Year to which Tenant's Objection
Notice relates or Tenant shall pay Landlord the amount of any underpayment,
whichever may be applicable. Notwithstanding the pendency of any dispute
hereunder, Tenant shall continue to pay all Other Charge amounts based upon
Landlord's determination and calculation or until such calculation or amount has
been established hereunder to be incorrect. Except as otherwise provided in
Section 4.2(k) below, Tenant shall not have the right to examine or inspect, and
Landlord has no obligation to provide Tenant access to, any of the books,
records and accounts of Landlord or any Landlord Affiliate.

      (g) Intentionally Omitted.

      (h) Notwithstanding anything in this Lease to the contrary, Other Charges
shall not include:

<PAGE>

            (1) costs of any special services rendered to individual tenants
(including Tenant) for which a special charge is made;

            (2) ground lease rental payments and debt service on mortgages or
deeds of trust;

            (3) attorneys' and other fees and costs incurred in improving or
renovating vacant space in the Building to be leased to third parties or in
connection with disputes with tenants of the Building;

            (4) Landlord's general overhead expenses not related to the Building
and which are not properly chargeable as Other Charges

            (5) except as otherwise provided herein, capital improvements that,
pursuant to generally accepted accounting principles, are deemed to be a capital
expense;

            (6) depreciation of machinery, tools and equipment (although
Operating Costs may include reasonable reserves for the replacement of such
items);

            (7) governmental fines, penalties or interest imposed upon the
Landlord, except governmental interest imposed on assessments and except for any
such fines, penalties or interest imposed on the Landlord as a result of
Tenant's acts or omissions;

            (8) except as otherwise provided herein, depreciation of the
Building;

            (9) the cost of repairs of the Building to the extent Landlord
receives, and is permitted to use, insurance or condemnation proceeds therefore;

            (10) costs, fines or penalties incurred because the Landlord
violated any laws, regulations or rules of any governmental authority with
jurisdiction over the Building(s);

            (11) any item or expense that, but for this exclusion, would be
included twice, so that no duplication of expenses will occur;

            (12) wages, bonuses and other compensation and benefits of employees
above the grade of Building Manager;

            (13) costs of selling, syndicating, financing, mortgaging or
hypothecating any of Landlord's interest in the Building;

            (14) costs incurred in remediating Hazardous Materials now existing
or hereafter discovered below the ground surface of the Project;

            (15) costs incurred with owning and/or operating the parking lot(s)
serving the Building by independent parking operators, provided Landlord charges
tenants of the Building a fee to park therein;

<PAGE>

            (16) overhead and profit increment paid to subsidiaries or
affiliates of Landlord for services, including management services, on or to the
Building, to the extent that the costs of such services exceed reasonable costs
for such services were they not rendered by a subsidiary or affiliate;

            (17) costs of the initial construction of the Building and/or the
Project (including the costs of roads, hook ups, LIDs, interchanges, traffic
signals, access ways, drainage systems, street signs, street lights, and curbs
and gutters) and the acquisition and construction costs of expanding the
Building and/or the Project, including the proposed SkyBridge between Lincoln
Square and Bellevue Place (as opposed to the costs of operating and maintaining
the expanded portion of the Building and/or the Project, to the extent the same
may be included in Other Charges);

            (18) any bad debt, rent loss (excluding insurance premiums related
thereto), or reserves for bad debt or rent loss (excluding insurance premiums
related thereto);

            (19) costs of repairing items that are covered by warranties, to the
extent of such warranty coverage;

            (20) cost of correcting defects in the design, construction or
equipment of, or latent defects in the Leased Premises, Building or Project;

            (21) leasing commissions, advertising and promotional expenses, and
other such costs incurred in connection with seeking and obtaining new tenants
and retaining existing tenants;

            (22) costs of any item for which Landlord is or is entitled to be
paid or reimbursed by insurance;

            (23) lease payments for rental equipment (other than equipment for
which depreciation is properly charged as an Expense which would constitute a
major capital expenditure if the equipment were purchased);

            (24) costs arising from the gross negligence or willful misconduct
of Landlord; and

            (25) damages that Landlord pays to Tenant under this Lease or to
other Tenants in the Building under their respective leases.

      (i) Notwithstanding anything in this Section 4.2 of the Lease to the
contrary, Other Charges shall not include, and Tenant shall not be responsible
for, income, gift, estate, inheritance, succession, or transfer taxes imposed on
Landlord.

      (j) Notwithstanding anything in this Lease to the contrary, there shall be
no duplication of any particular cost, charge or expense in any of the Other
Charges set forth in this Section 4.2 of the Lease, provided Landlord reserves
the right to include both a

<PAGE>

reasonable and customary administrative fee and a reasonable and customary
management fee (based on administrative and management fees charged by landlords
in similar first class office buildings within the Bellevue central business
district) within Other Charges.

      (k) Notwithstanding anything in this Section 4.2 of the Lease to the
contrary, not more than once each Lease Year during the Lease Term, and within
sixty (60) days after Tenant's receipt of Landlord's written summary of Other
Charges for such Lease Year, Tenant may give Landlord written notice ("Review
Notice") that Tenant intends to review Landlord's records of the Other Charges
for that Lease Year. Within a reasonable time after receipt of the Review Notice
(not more than sixty (60) days), Landlord shall make all pertinent records
available for inspection that are reasonably necessary for Tenant to conduct its
review, which review must be conducted during Landlord's regular business hours.
If any records are maintained at a location other than in the Building, Tenant
may either inspect the records at such other location or pay for the reasonable
cost of copying and shipping the records. Tenant may, during Landlord's regular
business hours after ten (10) days' prior written notice, request that an
inspection be made or an audit be performed of the Other Charges. The entity or
agent performing the inspection or audit must be mutually acceptable to Landlord
and Tenant and under no circumstances may the fee charged by such entity or
agent be a contingency fee. Tenant shall be solely responsible for all costs,
expenses and fees incurred for the audit. Within sixty (60) days after the
records are made available to Tenant, Tenant shall have the right to give
Landlord written notice (an "Objection Notice") stating in reasonable detail any
objection to Landlord's statement of Other Charges for the Lease Year audited.
If Tenant fails to give Landlord an Objection Notice within the 60-day period or
fails to provide Landlord with a Review Notice within the 60-day period
described above, Tenant shall be deemed to have approved Landlord's statement of
other charges and shall be barred from raising any claims regarding the Other
Charges for that Lease Year. If Tenant provides Landlord with a timely Objection
Notice, Landlord and Tenant shall work together in good faith to resolve any
issues raised in Tenant's Objection Notice. If Landlord and Tenant determine
that Other Charges for the Lease Year are less than reported, Landlord shall
provide Tenant with a credit against the next installment of Rent in the amount
of the overpayment by Tenant. Likewise, if Landlord and Tenant determine that
Other Charges for the Lease Year are greater than reported, Tenant shall pay
Landlord the amount of any underpayment within 30 days of determining the
shortfall. The records obtained by Tenant shall be treated as confidential. In
no event shall Tenant be permitted to examine Landlord's records or to dispute
any statement of Other Charges unless Tenant has paid and continues to pay all
Rent when due.

      (l) With regard to single capital expenditure by Landlord related to the
Building that is in excess of $1,000,000.00 and that is or will be included in
Other Charges, Landlord shall review any such expenditure with Tenant and
explain the basis for Landlord's belief that such an expenditure is necessary or
appropriate to fulfill Landlord's repair or maintenance obligations, or required
by any applicable governmental law or regulation not in effect at the time
Tenant is required to take occupancy of the Leased Premises, or such
expenditure, although capital in nature, is made to reduce the normal operating
costs of the Building.

<PAGE>

      4.3   SECURITY DEPOSIT.

      If an amount is indicated for the Security Deposit in Section 1.1 above,
Tenant shall, upon the waiver or satisfaction of the contingency set forth in
Section 29 below, deposit with Landlord as a security deposit the amount shown
in Section 1.1 above. The security deposit shall be held by Landlord as security
for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant during the entire
Lease Term. If Tenant is in breach or default under any provision of this Lease,
Landlord may (but shall not be required to) use, apply or retain all or any part
of the security deposit for the payment of any rent or any other amount in
breach or default, or for the payment of any amount which Landlord may spend or
become obligated to spend by reason of Tenant's breach or default, or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's breach or default. In the event Landlord does so use, apply
or retain all or any part of the security deposit, Tenant shall, within ten (10)
days of Landlord's demand therefor, deliver to Landlord a cashier's check for
the amount so used, applied or retained. Landlord shall not be required to keep
the security deposit separate from its general funds and Tenant shall not be
entitled to interest on the deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it and no amounts are
or may become payable to Landlord by Tenant after the Lease Term, the security
deposit or any balance thereof after any deductions hereunder by Landlord shall
be returned to Tenant (or at Landlord's option, to the last assignee, if any, of
Tenant's interest hereunder) within thirty (30) days following the expiration of
the Lease Term or the date Tenant returns complete possession of the Leased
Premises to Landlord in the condition required by this Lease, whichever shall
last occur. No trust relationship is created hereby between Landlord and Tenant
with respect to the Security Deposit.

      4.4   LATE CHARGES.

      If Tenant fails to pay, when the same is due and payable, any Base Rent or
Other Charges described above, or any other amounts due pursuant to this Lease,
which amounts shall be and are referred to as "additional rent," then such
unpaid amounts shall bear interest at the rate of two percent (2%) per month
from the date due to the date of payment unless such amount would violate any
applicable usury or other law, in which event such unpaid amounts shall bear
interest at the highest rate then allowed by law. In addition to such interest,
Tenant acknowledges that the late payment by Tenant of any monthly installment
of Base Rent, Other Charge or additional rent will cause Landlord to incur
certain costs and expenses not contemplated under this Lease, the exact amount
of such costs being extremely difficult or impractical to fix. Such costs and
expenses include, without limitation, administrative and collection costs,
processing and accounting expenses, and interest and penalties imposed by the
terms of any contracts, mortgages or deeds of trust covering the Leased
Premises, the Building or the Real Property. Therefore, if any Base Rent, Other
Charge or additional rent payment is not received by Landlord from Tenant by the
fifth (5th) day after such payment is due, Tenant shall immediately pay to
Landlord a late charge equal to twelve percent (12%) of such payment. Landlord
and Tenant agree that this late charge represents a reasonable estimate of such
costs and expenses and is fair compensation to

<PAGE>

Landlord for its loss and expenses suffered by such nonpayment by Tenant.
Acceptance of this late charge shall not constitute a waiver of Tenant's breach
or default with respect to such nonpayment by Tenant nor prevent Landlord from
exercising any or all other rights and remedies available to Landlord under this
Lease. Notwithstanding the foregoing, provided Tenant in not otherwise in
default or breach of this Lease and pays in full any amount not paid when due
within ten (10) days of being advised by Landlord that a payment has not been
received when due, Landlord shall waive up to one (1) late charge in any
twenty-four (24) month period during the Lease Term; provided Tenant has paid
all sums due under this Lease on or before the first (1st) day of the calendar
month in the previous twenty-four (24) calendar months during the Lease Term.

      4.5   NO OFFSETS OR DEDUCTIONS/PLACE OF PAYMENT.

      All Base Rent, Other Charges, and additional rent shall be paid in lawful
money of the United States of America and shall be paid without offset or
deduction. Landlord shall have the right to designate, from time to time, the
place or places at which Tenant shall tender all Base Rent, Other Charges and
additional rent payments. Without limiting the generality of the foregoing,
Landlord shall have the right to require, at any time, that (a) Tenant not make
payment at or through the lock box currently available to tenants at the
Building, and (b) all such payments be made exclusively at Landlord's management
offices in the Building. Landlord may, in its sole discretion, apply payments
made by Tenant first to accrued charges, interest and rent in the following
order: (i) Late Charges, (ii) interest, (iii) additional rent, (iv) past-due
Base Rent, Other Charges and any balance remaining to current Base Rent, and
Other Charges and additional rent.

5.    USE.

      5.1   PERMITTED USES.

      Tenant shall not use, permit or suffer the use of the Leased Premises for
any business or purpose other than those specifically set forth in Section 1.1
above. Nothing contained herein shall be deemed to give Tenant any exclusive
right to such use in the Building or Project.

      5.2   USES PROHIBITED.

            (a) Except as otherwise provided in Section 1.1 (Permitted Uses),
Tenant shall not do, permit or suffer anything to be done in or about the Leased
Premises, the Building or the Project or bring or keep anything therein which
will in any way increase the existing rate of or affect any fire or other
insurance upon the Leased Premises, the Building or the Project (unless Tenant
agrees to pay for the additional cost of such insurance and such use is
otherwise a Permitted Use), or cause a cancellation of any insurance policy
covering the Leased Premises, the Building or the Project or any of their
contents. Tenant shall not do, permit or suffer anything to be done in or about
the Leased Premises, the Building or the Project that is unlawful or will in any
way obstruct or interfere with the rights of other tenants or occupants of the
Building or the Project or injure or annoy them, their customers

<PAGE>

or clients, nor shall Tenant use or allow the Leased Premises to be used for any
purpose which is incompatible with a first class office building in Landlord's
reasonable judgment, which is offensive to any other tenant in the Building
acting reasonably or which may be unlawful. Tenant is aware that Floors 4 and 5
are adjacent to a space being utilized by a movie theater and that Tenant's
activities in the Leased Premises shall not be conducted in a manner that
impairs such use or annoys the patrons of the theater. In no event shall Tenant
use the Leased Premises in any manner which violates any recorded restriction
applicable to the Leased Premises, the Building or the Project. No manufacturing
operations shall be conducted from the Leased Premises.

            (b) If Tenant permits or engages in any activity which, in
Landlord's reasonable judgment, is objectionable, offensive or otherwise
constitutes a nuisance to the customers or other tenants of the Building or the
Project or that may be unlawful, or in violation of this Lease, Tenant shall
immediately discontinue such activity or take immediate action to cause the
activity to be discontinued with all due diligence if it cannot be immediately
discontinued. Tenant's failure to comply shall constitute a material breach and
default of this Lease and entitle Landlord to pursue its remedies for such a
breach and default or, in the alternative, cause the performance of such work as
may be appropriate to discontinue such activity and recover, as additional rent,
the cost thereof, plus interest thereon at four percent (4%) over the prime rate
of interest charged or published by Bank of America (or its successor) on the
first day of each month, commencing on the date due through the date of payment.
Such additional rent shall become due and payable to Landlord ten (10) days
following delivery of an invoice for same to Tenant.

            (c) Tenant shall not place a load upon the floor of the Leased
Premises exceeding a 50 pound live load and 20 pound dead load per square foot
without Landlord's prior written consent which consent shall not be unreasonably
withheld, or delayed but which may be subject to reasonable conditions;
provided, however, a capacity of 100 pounds per square foot live load will be
provided within five (5) feet of the north and south ends of the core area of
the floors for storage, files and server rooms. Business machines, mechanical
equipment and materials belonging to Tenant that cause vibration, noise, cold,
heat or fumes that may be transmitted to the Building or to any other leased
space therein it such a degree as to be objectionable to Landlord or to any
other tenant in the Building shall be placed, maintained, isolated, stored
and/or vented by Tenant at its sole expense so as to absorb and prevent such
vibration, noise, cold, heat or fumes.

            (d) Except as expressly provided otherwise in this Lease, Tenant
shall not install or operate in the Premises any electrical or other equipment,
other than such equipment as is commonly used in modern offices, without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld, or delayed but which may be conditioned upon the payment
by Tenant of additional rent in compensation for excess consumption of water or
electricity, excess wiring and other similar requirements, and any changes,
replacements or additions to any Base Building system as may be occasioned by
the operation of said equipment or machinery. The Improvement Agreement
contains, or

<PAGE>

will contain, a description of the electrical system to be provided as part of
the Base Building Improvements.

      5.3   COMPLIANCE WITH LAWS, RULES AND REGULATIONS.

      Tenant shall, at its sole cost and expense, promptly comply with all
local, state or federal laws, statutes, ordinances and governmental and
quasi-governmental rules, and other governmental regulations or requirements now
in force or which may hereafter be in force with respect or related to Tenant's
use and occupancy of the Leased Premises and Tenant's business conducted
therein.

      5.4   HAZARDOUS MATERIAL.

      Tenant shall not cause or permit any Hazardous Material, as defined below,
to be brought upon, kept or used in or about the Leased Premises or the Building
by Tenant, its agents, employees, contractors or invitees. If Tenant breaches
the obligations stated in the preceding sentence, or if the presence of any
Hazardous Material caused or permitted by Tenant results in contamination of the
Leased Premises or any part of the Building or any other property, or if
contamination of the Leased Premises or any part of the Building or other
property by any Hazardous Material otherwise occurs for which Tenant may be
legally liable to Landlord for damage resulting therefrom, then Tenant shall
indemnify, defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses (including, without
limitation, diminution in value of the property, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the Building
or the Leased Premises, damages arising from any adverse impact on marketing of
space at the Building, damages to any other property and amounts paid in
settlement of claims, reasonable attorneys' fees, consultant fees and expert
fees) which arise during or after the Lease Term as a result of such
contamination. Without limiting the foregoing, this indemnification of Landlord
by Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Building or other property, if the presence of any
Hazardous Material caused or permitted by Tenant results in any contamination of
the Leased Premises or any part of the Building or other property. Tenant shall
promptly take all actions at its sole expense as are necessary to return the
Leased Premises and the Building or other property to the condition existing
prior to the introduction of any such Hazardous Material; provided that
Landlord's approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld so long as such actions would not potentially
have any material adverse long-term or short-term effect on the Leased Premises
or the Building or other property. As used herein, the term "Hazardous Material"
means any hazardous, dangerous, toxic or harmful substance, material or waste
which is or becomes regulated by any local governmental authority, the State of
Washington or the United States government. Notwithstanding the foregoing,
without limiting the indemnities set forth above, routine and ordinary cleaning
products, office supply products (such as toner for copiers), substances used in
connection with Tenant's QA Use,

<PAGE>

and ordinary substances that otherwise would be "Hazardous Materials," as
defined herein) may be brought within the Leased Premises without Landlord's
consent so long as such products are used in the reasonable and prudent conduct
of Tenant's business in the Leased Premises, and are used with due care, in
accordance with the instructions of the manufacturer of such products and in
compliance with all applicable laws and governmental rules, regulations and
orders. Tenant shall not be obligated to indemnify Landlord under this Section
5.4 with respect to any contamination of the Office Condominium by any Hazardous
Materials in the Condominium prior to the Commencement Date.

6.    UTILITIES AND SERVICES.

      6.1   TENANT'S RESPONSIBILITY.

      Tenant shall pay before delinquency, at its sole cost and expense, all
charges for water, gas, heat, electricity, power, telephone service, sewer
service and sewer rentals charged or attributable to the Leased Premises, and
all other services or utilities used in, upon or about the Leased Premises
during the Lease Term and the cost of installing meters or check meters therefor
but only if required by Landlord under this provision; provided, however, that
if any such services or utilities shall be billed to Landlord and are not
separately metered to the Leased Premises, the amount thereof shall be prorated
by Landlord, and Tenant shall pay to Landlord, upon demand, as additional rent
hereunder, Tenant's share of such combined costs, expenses and charges, which
shall be an amount equal to the total charges therefor multiplied by a fraction,
the numerator of which equals Tenant's estimated usage (as determined by
Landlord from time to time in good faith) and the denominator of which equals
the total usage of all tenants covered by such combined charges. Tenant shall
not at any time overburden or exceed the capacity of the mains, feeders, ducts,
conduits or other facilities by which such utilities are supplied to,
distributed in or serve the Leased Premises and Tenant shall comply with the
rules, regulations and requirements of all governmental and quasi-governmental
agencies with respect thereto. Notwithstanding anything in this Lease to the
contrary, if reasonably requested by Landlord based upon Tenant's electrical use
being greater that that of other office tenants in the Building as determined by
Landlord's electrical engineer, Tenant shall install, or cause to be installed,
as part of the Premises Improvements, separate meters for the affected portions
of the Leased Premises. Such meters shall be installed in accordance with the
building specifications. Tenant shall receive a credit against the cost of such
separately metered electrical use, as reasonably determined by Landlord, at the
cost charged to Tenant for the separately metered electricity used.

      6.2   INTERRUPTION.

      In no event shall Landlord be liable for an interruption or failure in the
supply of any such utilities to the Leased Premises, and the same shall not
constitute a termination of this Lease or eviction of Tenant.

      Notwithstanding anything in this Section 6.2 of the Lease to the contrary,
but subject to the requirements of any federal, state or local authorities, in
the event that any of the

<PAGE>

Standard Services are interrupted for five (5) consecutive days or more and
provided further that the remedy for such interruption is exclusively within
Landlord's direct control, then in such event, Tenant shall be entitled to an
equitable abatement of Rent from the date of the interruption until the Standard
Services are fully restored to the extent that the Leased Premises are unusable
by Tenant for their intended purposes.

      If, at any time during the Lease Term, Kemper Freeman Jr. or his immediate
family ("Freeman Family"), and their heirs or beneficiaries, or entities owned
or controlled by the Freeman Family, their heirs or beneficiaries, cease to
maintain a controlling interest in the Building or the management thereof, then
Tenant's right to abatement in the immediately preceding paragraph shall also be
triggered if the interruption is caused by Landlord's negligence or willful
misconduct, and Tenant may, following the expiration of the above referenced
five (5) day period in the paragraph above, and upon prior written notice to
Landlord, proceed to remedy the cause of the interruption and Landlord shall pay
Tenant all reasonable costs, expenses and disbursements incurred by Tenant in so
doing.

      6.3   TELECOMMUNICATIONS SERVICES.

      All telephone and telecommunications services desired by Tenant shall be
ordered and utilized by Tenant at its sole cost and expense. Tenant understands
and acknowledges the telecommunications switching facilities in the Project may
be owned and operated by a third party, and such third party may have the right
to charge other telecommunications providers for access to such facilities
subject to applicable laws, rules and regulations. Tenant shall separately
contract with such third party or another telecommunications provider (a
"Provider") to provide telephone and telecommunications services to the
Premises. If Tenant desires to utilize the services of a Provider whose
equipment is not then servicing the Building, such Provider must obtain the
written consent of Landlord (which consent will not be unreasonably withheld,
conditioned or delayed) before it will be permitted to install its lines or
other equipment within the Building or use existing conduit or riser space
within the Building or Project. Landlord's consent to the installation of lines
or equipment within the Building by any Provider shall be evidenced by a written
agreement between Landlord and the Provider, which contains terms and conditions
acceptable to Landlord in its reasonable discretion. Landlord's refusal for any
reason whatsoever to consent to any prospective Provider shall not be deemed a
default or breach by Landlord of its obligations under this Lease. Landlord
makes no warranty or representation to Tenant as to the suitability, capability
or financial strength of any Provider whose equipment is presently serving the
Building, and Landlord's consent to a Provider whose equipment is not presently
serving the Building shall not be deemed to constitute such a representation or
warranty. To the extent the service by a Provider is interrupted, curtailed or
discontinued for any reason whatsoever, Landlord shall have no obligation or
liability in connection therewith unless the interruption is caused by the
negligence or intentional misconduct of Landlord, and it shall be the sole
obligation of Tenant at its expense to obtain substitute service. The provisions
of this paragraph are solely for the benefit of Tenant and Landlord, are not for
the benefit of any third party. No telephone or telecommunications provider
shall be deemed a third party beneficiary hereof.

<PAGE>

      6.4   STANDARD SERVICES.

      As long as Tenant is not in default under any of the provisions of this
Lease, Landlord shall cause the Leased Premises (in accordance with Section 10.3
below) and the public and common areas of the Building, (and the Project Common
Areas), including the lobbies, elevators, stairs, corridors and rest rooms, to
be maintained in reasonably good order and condition consistent with the
operation and maintenance of the Building as a first-class office building in
downtown Bellevue, except for damage occasioned by any act or omission of Tenant
or Tenant's officers, contractors, agents, invitees, licensees or employees, the
repair of which shall be paid for by Tenant ,so long as damage occasioned by
other tenants and their officers, contractors, agents, invitees, licensees or
employees, is paid for by such other tenants. From 7:00 a.m. to 6:00 p.m. on
weekdays, excluding legal holidays, and from 8:00 a.m. to noon on Saturdays
("Regular Business Hours"), Landlord shall furnish the Leased Premises with
electricity for lighting and operation of low power usage office machines,
water, heat, air conditioning and elevator service as is customary and
anticipated by tenants in a first-class office building (the "Standard
Services"). During all other hours, Landlord shall furnish the Standard
Services, including elevator service as reasonably required to provide access to
the Leased Premises, except for heat and air conditioning and lighting. If
requested by Tenant, Landlord shall furnish heat and air conditioning and
lighting at times other than Regular Business Hours and the cost of such
services, as established by Landlord (which in no event shall exceed Landlords'
actual cost of such services), shall be paid by Tenant in the same manner as
provided in Section 4.1 above. Landlord also shall provide lamp replacement
service for Building Standard fluorescent light fixtures (but not for any
specialty lighting installed by Tenant), toilet room supplies, window washing at
reasonable intervals and customary building janitorial service in the Leased
Premises consistent with those services in other first-class office buildings as
part of the Standard Services, although no janitorial service shall be provided
for Saturdays, Sundays or legal holidays. The cost and expense of any janitorial
or other services provided or caused to be provided by Landlord to Tenant in
addition to the services ordinarily provided Building tenants or is excessive
relative to services provided to other tenants in the Building generally, Tenant
shall reimburse Landlord upon demand for the additional cost resulting from such
services, which shall be paid by Tenant in the same manner as provided for
payment in Section 4.1 above. Standard Services shall not include any security
services exclusively for Tenant within the Leased Premises. General security
services will be provided in a manner consistent with the nature of the Project,
and its cost will be allocated as a Building and/or Project Operating Cost.
Landlord has not and does not make any representations to Tenant and assumes no
responsibility to Tenant that the security services that are provided by
Landlord will be effective in preventing any harm, both physical and economic,
to Tenant or any of Tenant's employees or invitees. The HVAC system that
Landlord shall install in the Building is generally described in Schedule D-1
and, among other things, shall allow temperature adjustments to be made in the
Leased Premises on a zone by zone basis on each floor. Tenant shall pay any and
all costs required to implement the features of the system by which Tenant may
make temporary adjustments on a zone by zone basis on each floor . Any services
provided by Landlord under this Section 6.4 shall be applied consistently and in
a nondiscriminatory manner.

<PAGE>

      6.5   ADDITIONAL SERVICES.

      The Improvement Agreement describes the Base Building standard mechanical
and electrical systems. Tenant shall not install lights and equipment in the
Leased Premises which exceed the load limits set forth in Tenant's final plans
and specifications for Premises Improvements without Landlord's prior written
consent, which consent shall not be unreasonably withheld or delayed but which
may be subject to reasonable conditions. Landlord shall not arbitrarily withhold
consent to Tenant's installation of lights and equipment exceeding such loads
but may condition its consent on Tenant's payment of the costs incurred by
Landlord for the installation, operation, repair and maintenance of
supplementary air conditioning capacity or electrical systems as necessitated by
such equipment or lights. In addition, notwithstanding anything to the contrary,
Tenant shall pay to Landlord, in advance, on the first day of each month during
the Lease Term, such amount estimated by Landlord to be the cost of furnishing
electricity to Tenant for the operation of such equipment or lights and such
amount estimated by Landlord to be the cost of operating and maintaining the
supplementary air conditioning units as necessitated by Tenant's use of such
equipment or lights. Such costs shall be paid by Tenant in the same manner as
provided in Section 4 above. In the event of nonpayment of amounts due for any
of the above-described additional services, Landlord shall have the same rights
and remedies as it has with respect to the nonpayment of rent hereunder.
Landlord shall be entitled to install and operate, at Tenant's sole cost and
expense, monitoring or metering system in the Leased Premises to measure
Tenant's use of electricity, heating, ventilation, and air conditioning
services. Tenant shall comply with Landlord's instructions for the use of blinds
and thermostats in the Building.

      6.6   TENANT ACCESS.

      Subject to the terms and conditions of this Lease, during the Lease Term
Landlord shall not take any action to deny Tenant physical access to the Leased
Premises, the Building or the Project at any time, and shall at all times
provide elevator access to the Leased Premises as well as non-exclusive access
to the Building freight elevator and loading dock, provided Tenant's use of and
access to such freight elevator and loading dock shall be coordinated with
Landlord. To the greatest extent practical without disrupting general Building
operations and without cost or expense to Landlord, Landlord shall cause the
freight elevator to rest at either the 4th or 5th floors of the Building, Monday
through Friday, 9:00 am to 4:00 pm. Subject to the terms and conditions of this
Lease and reasonable security, life safety and other limitations appropriate for
a first class office building, Landlord shall not adopt or implement any rules,
regulations or policies that prevent Tenant from having continuous access to the
Leased Premises during the Lease Term.

      6.7   BACK-UP POWER GENERATORS.

      The Base Building Improvements will include provisions for the
installation and use of a back-up emergency power generator for life safety
systems in the Building. Landlord shall not and does not provide any
representations, warranties or other assurances regarding

<PAGE>

the performance or availability of any back-up power. Subject to Landlord's
prior written consent, not to be unreasonably withheld and all applicable
statutes, ordinances, governmental rules and regulations, Tenant may install an
additional 125 KVA emergency generator, together with any necessary improvements
on floor 29 of the Building or elsewhere as Landlord determines practicable, as
and where shown on EXHIBIT J, including a fuel supply lines, electrical cables
and/or conduits to the Leased Premises and related equipment required to enable
the additional generator to operate as designed for its intended purpose
(jointly referred to as the "Tenant Generator"). Tenant shall, at Tenant's cost,
be responsible for all repair, maintenance, and replacement of the Tenant
Generator and shall use contractors reasonably acceptable to Landlord for all
such repair, maintenance and replacement of the Tenant Generator, but no Other
Charge or fee shall be payable to Landlord for the installation or use of the
Tenant Generator. At Landlord's request, Tenant shall provide Landlord with
evidence of a reasonably acceptable maintenance contract or program for the
Tenant Generator. The Tenant Generator shall be and become the property of
Landlord upon installation and the Tenant Generator shall not be removed by
Tenant unless so required by Landlord at the expiration or sooner termination of
the Lease and Tenant agrees to remove the Tenant Generator and repair any damage
caused by the removal, if so requested by Landlord. Tenant shall provide
Landlord with evidence that the liability and property damage insurance
coverages required to be carried by Tenant under the terms of this Lease include
the Tenant Generator and Tenant's operation thereof. Tenant shall be entitled to
use and operate the Tenant Generator for emergency purposes only and shall
schedule all testing with Landlord in advance.

      6.8   TENANT'S SUPPLEMENTAL HVAC SYSTEM.

      Subject to Landlord's prior written consent, not to be unreasonably
withheld and all applicable statutes, ordinances, governmental rules and
regulations, Tenant may install a supplemental HVAC system, including the ducts
required to serve the Leased Premises and the related equipment (the "Tenant
HVAC System"). Tenant shall, at Tenant's cost, be responsible for the design,
acquisition and installation costs and all repair, maintenance, and replacement
costs for the Tenant HVAC System and shall use only contractors reasonably
acceptable to Landlord for all such installation, repair, maintenance and
replacement work on the Tenant HVAC System. At Landlord's request, Tenant shall
provide Landlord with evidence of a reasonably acceptable maintenance contract
or program for the Tenant HVAC System. The Tenant HVAC System shall be and
become the property of Landlord upon installation and the Tenant HVAC System
shall not be removed by Tenant unless so required by Landlord at the expiration
or sooner termination of the Lease and Tenant agrees to remove the Tenant HVAC
System, and repair any damage caused by the removal, if so requested by
Landlord. Tenant shall provide Landlord with evidence that the liability and
property damage insurance coverages required to be carried by Tenant under the
terms of this Lease include the Tenant HVAC System and Tenant's operation
thereof.

<PAGE>

7.    PERSONAL PROPERTY TAXES.

      Tenant shall pay, or cause to be paid, before delinquency, any and all
taxes levied or assessed during the Lease Term upon Tenant's equipment,
furniture, inventory, and any other personal property located in the Leased
Premises. If any or all of Tenant's equipment, furniture, inventory and other
personal property are assessed and taxed with the real property, Tenant shall
pay to Landlord its share of such taxes within ten (10) days after delivery to
Tenant by Landlord of a statement in writing setting forth the amount of such
taxes applicable to Tenant's property.

8.    LICENSES, FEES AND TAXES.

      Tenant shall be liable for, and shall pay throughout the Lease Term, all
license and excise fees and occupation taxes covering the business conducted on
the Leased Premises. If any governmental authority under any present or future
law effective at any time during the Lease Term hereof shall in any manner levy
a tax on rents payable under this Lease or rents accruing from use of the Leased
Premises or a tax in any form against Landlord because of or measured by income
derived from the leasing or rental of such property, such tax shall be paid by
Tenant, either directly or through Landlord, and upon any default by Tenant
hereunder, Landlord shall have the same remedies as for failure to pay rent. It
is understood and agreed, however, that Tenant shall not be liable to pay any
net income tax or inheritance tax imposed on Landlord.

9.    IMPROVEMENTS, ALTERATIONS AND ADDITIONS.

      9.1   PREMISES IMPROVEMENTS.

      Prior to the Commencement Date, the Leased Premises are to be improved by
Landlord (the "Premises Improvements") in accordance with the Improvement
Agreement attached hereto as EXHIBIT D (the "Improvement Agreement"). Prior to
delivering possession of the Leased Premises to Tenant, the Project Architect
shall certify that the Premises Improvements are substantially complete as
defined and provided for in the Improvement Agreement. Pursuant to the
Improvement Agreement and notwithstanding anything herein to the contrary,
Landlord reserves the right to modify the final design of the Building as may be
necessary to comply with any governmental rule, regulation or order or, subject
to the provisions of Section 2.1 above and Section 2.3 above, otherwise as may
be considered necessary or appropriate by Landlord, provided the modifications
do not materially and adversely change the size or configuration of the Building
or have a material adverse impact on Tenant's proposed use of the Leased
Premises. Also pursuant to the Improvement Agreement and notwithstanding
anything herein to the contrary, Landlord reserves the right to modify the final
design of the Leased Premises as may be necessary to comply with any
governmental rule, regulation or order or otherwise as may be considered
necessary or appropriate by Landlord, provided the modifications do not
materially and adversely change the location of the Leased Premises from that
shown on EXHIBIT C, or materially and adversely change the size or configuration
of the Leased Premises or have a material and adverse impact on Tenant's
proposed use of the Leased Premises. The existence of repairs or defects of a
nature commonly found on a

<PAGE>

"punchlist," as such term is used in the construction industry, after turnover
to Tenant, shall not postpone the Commencement Date or result in a delay or
abatement of Tenant's obligation to pay rent or give rise to a damage claim
against Landlord. Landlord represents that when completed the Premises
Improvements will be in good condition and repair; provided, however, Tenant's
occupancy of the Leased Premises shall be deemed an acknowledgement that the
Leased Premises are in good condition and repair and that Landlord has caused
the Building and all of the Premises Improvements to be constructed as required
by this Lease, subject to those items, if any, specified in any punch list to be
delivered to Tenant pursuant to the Improvement Agreement. All improvements and
fixtures made or installed in or to the Leased Premises, including all Premises
Improvements, are the property of Landlord. If any lender holding a security
interest in the Office Condominium should foreclose or receive a deed in lieu of
foreclosure prior to completion of the Premises Improvements, then
notwithstanding anything in this Lease or any other agreement to the contrary
the person acquiring the Office Condominium at the foreclosure sale or by deed
in lieu of foreclosure shall have no obligation to construct, install or pay for
any improvements whatsoever, including without limitation the Building and
Premises Improvements.

      9.2   ALTERATIONS BY TENANT.

      (a) Except as otherwise provided in Subsection (b) below, after completion
of the Premises Improvements, Tenant shall not make any subsequent alterations,
additions or improvements in, on or to the Leased Premises without the prior
written consent of Landlord, which consent shall not be unreasonably withheld or
delayed, but which may be subject to such reasonable conditions as Landlord may
deem appropriate in the exercise of its reasonable discretion. Tenant shall
submit complete sets of final plans and specifications for all such alterations,
additions or improvements to Landlord for approval. Any such alterations,
additions or improvements consented to by Landlord shall be made at Tenant's
sole cost and expense. Tenant shall notify Landlord prior to the commencement of
any such work of the contractors Tenant desires to perform the work. Landlord
shall have the right to approve or disapprove in advance all contractors to be
retained by Tenant for such work. Upon completion of such work, Landlord shall
promptly be provided with complete "as built" drawings and specifications for
all alterations and additions made by Tenant. Tenant shall secure any and all
governmental permits, approvals or authorizations required in connection with
any such work. All alterations, additions and improvements (expressly including
without limitation all light fixtures and floor coverings but expressly
excluding any inventory, furniture and other personal property which does not
become a part of the Leased Premises) unless disclaimed by Landlord shall
immediately become the property of Landlord without any obligation to pay
therefor. Upon the expiration or sooner termination of the term hereof, Tenant
shall, upon written demand by Landlord and, at Tenant's sole cost and expense,
forthwith remove any alterations, additions or improvements made by Tenant
designated by Landlord to be removed, and Tenant shall forthwith at its sole
cost and expense repair any damage to the Leased Premises caused by such
removal. Tenant's obligations hereunder shall survive the expiration or any
earlier termination of this Lease.

<PAGE>

      (b) As long as Tenant provides at least ten (10) days' prior notice
thereof, Landlord's consent shall not be required for the following alterations,
additions or improvements to the Leased Premises: (a) alterations, additions or
improvements that cost no more than $200,000 in any consecutive twelve (12)
month period, that do not involve or affect any of the structural elements or
building systems of the Leased Premises of Building, are not visible from the
exterior of the Leased Premises of any of the Common Areas, do not interfere
with the operation of the Building or the provision of services or utilities to
other tenants in the Building and are otherwise appropriate for a first class
office building and provided Tenant agrees to remove the alterations, additions
or improvements at the end of the Lease Term if so requested by Landlord and (b)
alterations, addition or improvements made as part of Floors 4, 5 and 6,
provided such alterations, additions or improvements do not involve or affect
any of the structural elements or building systems of the Leased Premises or
Building, are not visible from the exterior of the Leased Premises of any of the
Common Areas, do not interfere with the operation of the Building or the
provision of services or utilities to other tenants in the Building and provided
Tenant agrees to remove such alterations, additions or improvements at the end
of the Lease Term if so requested by Landlord.

      9.3   DISABILITY LAWS.

      Notwithstanding anything in this Lease to the contrary, if Tenant
constructs, makes or installs or causes to be constructed, made or installed any
improvement or alteration in or to the Leased Premises (including, but not
limited to, Tenant's work on the Premises Improvements), Tenant shall be solely
responsible for ensuring that such improvements and/or alterations do not
violate any provision in any local, state or federal law or regulation relating
to accessibility for handicapped persons or the removal of architectural or
communication barriers to accessibility ("Disability Law"), including but not
limited to RCW Chapter 70.92 and The Americans with Disabilities Act. Any
approval by Landlord of Tenant's plans or specifications for any such
improvements or alterations shall not be a representation or warranty, express
or implied, by Landlord that such plans will comply with any Disability Law. If
any claim is asserted against Landlord under any Disability Law which claim
relates directly or indirectly to any alterations or improvements installed,
made or constructed, directly or indirectly, by or for Tenant in or to the
Leased Premises or any trade fixture or personal property item used by Tenant in
the Leased Premises, Tenant shall defend, indemnify and hold Landlord harmless
from and against the claim and any and all charges, liabilities, obligations,
penalties, damages, judgments, costs and expenses (including reasonable
attorneys' fees) arising or incurred against or suffered, directly or
indirectly, by Landlord relating thereto. If it should be determined that any
improvement or alteration constructed, made or installed in or to the Leased
Premises, directly or indirectly, by or for Tenant or any trade fixture or
personal property item used by Tenant in the Leased Premises is an illegal
architectural or communication barrier under any Disability Law, Tenant shall
immediately, at its sole cost and expense, remove the barrier or, to the extent
allowed by the Disability Law, provide alternatives to the barrier so as to make
the Leased Premises accessible to handicapped persons. No alteration or
improvement in the Leased Premises will be approved by Landlord if it will
require that barriers outside the Leased Premises be

<PAGE>

removed under any Disability Law. Tenant shall not have any basis for objecting
to Landlord's judgment regarding the probable application of any Disability Law
provided Landlord does not act arbitrarily.

10.   MAINTENANCE AND REPAIRS.

      10.1  MAINTENANCE AND REPAIR BY TENANT.

      All repairs to the Leased Premises or to any of the improvements,
installations or facilities therein or otherwise related to the Leased Premises,
other than those repairs required to be made by Landlord pursuant to Section
10.3 below or Section 18 below, shall be made by Tenant at its sole cost and
expense. Tenant shall reimburse Landlord for the cost of repairing all damage
done to the Building, the Premises or the Common Areas occasioned by any act or
omission of Tenant or Tenant's officers, contractors, agents, invitees,
licensees or employees. Without limiting the generality of the foregoing, Tenant
shall at all times throughout the Lease Term, at its sole cost and expense, keep
the Leased Premises (including the exterior doors and entrances, all windows and
moldings and trim of all doors and windows), all partitions, door surfaces,
fixtures, equipment and appurtenances thereof (including lighting, heating and
plumbing fixtures and systems serving the Leased Premises) and any special
equipment installed in the Leased Premises specifically for Tenant, including
without limitation any telecommunication equipment, security equipment, computer
equipment, kitchen equipment in good order, condition and repair, damage by
unavoidable casualty excepted (but not excluding damage from burglary or
attempted burglary of the Leased Premises). Also without limiting the
generalities of the foregoing, Tenant shall: (i) keep the glass of all windows,
doors, and showcases clean and presentable; (ii) replace immediately all broken
glass in the Leased Premises; (iii) make any necessary repairs to, or
replacements of, all door closure apparatuses and mechanisms; (iv) keep all
plumbing within the walls of the Leased Premises or otherwise serving the Leased
Premises clean and in a good state of repair including pipes, drains, toilets,
and basins; and (v) keep all utilities within or otherwise exclusively serving
the Leased Premises in a good state of repair. Any and all damage to the Leased
Premises (including but not limited to the Premises Improvements), the Building
or Project caused by Tenant, or by any employee, agent, contractor, assignee,
subtenant or invitee of Tenant shall be promptly reported to Landlord.

      10.2  FAILURE TO MAINTAIN OR REPAIR.

      If, after fifteen (15) days' prior written notice (except in emergencies
or cases of urgent necessity (when such repairs shall be commenced immediately),
and such longer time as is reasonably required to adequately remedy the problem
provided the remedy has begun and Tenant is diligently prosecuting the same to
completion), Tenant fails to keep and preserve the Leased Premises as set forth
in Section 10.1 above, Landlord may, at its option, put or cause the same to be
put in the appropriate condition and state of repair, and in such case, upon
receipt of written statements from Landlord, Tenant shall promptly pay the
entire cost thereof as additional rent. Landlord shall have the right to enter
and inspect the Leased

<PAGE>

Premises and may enter for the purpose of making such repairs upon the failure
of Tenant to do so.

      10.3  REPAIRS BY LANDLORD.

      Landlord shall keep the roof, exterior walls, exterior building windows,
public corridors, equipment used in common with other tenants (such as
elevators, plumbing, heating, air-conditioning and similar equipment) and the
structural components of the Building in a good state of repair, and shall
accomplish such repairs as may be needed within fifteen (15) days after receipt
of written notice from Tenant (except in emergencies or cases of urgent
necessity (when such repairs shall be commenced immediately) and such longer
time as is reasonably required to adequately remedy the problem provided the
remedy has begun and Landlord is diligently prosecuting the same to completion).
Notwithstanding anything herein to the contrary, Landlord shall have no
obligation to repair any latent defects (i) capable of detection in the ordinary
course of Tenant's business and first detected more than one (1) year after the
Commencement Date or (ii) that have no material adverse effect on Tenant's
ability to conduct business in or gain access to the Premises. Nothing herein
shall diminish Tenant's obligation to maintain and repair any special equipment
installed in the Leased Premises or Building specifically for Tenant, including
without limitation any telecommunication equipment, security equipment, computer
equipment, kitchen equipment, any Tenant HVAC System or any Tenant Generator. If
repairs are required by reason of Tenant's acts or negligent failure to act,
Tenant shall promptly pay Landlord, as additional rent, for the cost thereof.
Except as otherwise specifically provided in Sections 15 or 18 below, there
shall be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business arising from the making of any
repairs, alterations or improvements in or to any portion of the Leased Premises
or building of which the Leased Premises are a part, or in or to fixtures,
appurtenances and equipment therein. In no event shall Landlord be liable to
Tenant for any damage to the Leased Premises or for any loss, damage or injury
to any property therein or thereon resulting from acts by other third parties or
occasioned by fire; explosion; falling plaster; the breaking, bursting, stoppage
or leaking of water, gas, sewer, electrical cables, wires or steam pipes; or
from water, rain, or other substances leaking or coming from the roof, street,
subsurface or from any other place or from dampness or from any similar risks or
causes. Landlord shall not be liable for any loss or damage to any person or
property sustained by Tenant or any other persons, which may be caused by theft,
or by any act or neglect of any tenant or occupant of the Project, or of any
other third parties.

      10.4  HVAC MAINTENANCE AND REPAIR BY LANDLORD.

      Landlord shall provide periodic maintenance, service, and repair for HVAC
systems serving the Leased Premises (excluding any Tenant HVAC System) and
Common Areas and Facilities of the Building. This shall include periodic filter
changes; refrigerant refills; routine inspections; replacement or repair of
belts, bearings, compressor and fan motors, dryer units, sight glasses, shives,
cooling systems, condenser and evaporator coils,

<PAGE>

thermostats, and relay connections. The cost of such maintenance, service and
repairs shall be included in the Other Charges described in Section 4.2 above.

      10.5  NON-COMPLIANCE.

      If any portion of the Leased Premises is in violation of any laws
pertaining to the construction of the Building or Leased Premises, and such
violation is not a result of Tenant's use , then to the extent such violation
materially and adversely interferes with Tenant's ability to conduct its
business in the Leased Premises or subjects Tenant to any fine or penalty under
any building code, Landlord shall, within thirty (30) days following written
notice thereof from Tenant (except in emergencies or cases of urgent necessity,
and such longer time as is reasonably required to adequately remedy the problem
provided the remedy has begun and Landlord is diligently prosecuting the same to
completion), correct such condition with reasonable diligence. To the extent
such violation existed prior to the Commencement Date, no portion of such cost
shall be charged back to Tenant as an Operating Cost. To the extent such
violation comes into being as a result of laws promulgated subsequent to the
Commencement Date, the cost of correcting the violation shall be deemed to be an
Operating Cost.

11.   LIENS AND ENCUMBRANCES.

      No work performed by, through, under or for Tenant pursuant to this Lease
shall be deemed to be for the immediate use or benefit of Landlord to the end
that no mechanic's or other liens shall be allowed against the estate of
Landlord by reason of any consent given by Landlord to Tenant to improve or
alter the Leased Premises. Tenant shall keep the Leased Premises, the Building
and the Real Property free and clear of all liens and encumbrances arising out
of any work performed for, materials furnished or obligations incurred by or on
behalf of Tenant, and Tenant shall indemnify and hold Landlord harmless from all
costs, liabilities and expenses (including reasonable attorneys' fees) arising
therefrom. Prior to commencing any work on the Leased Premises, Tenant shall
provide to Landlord, at Tenant's sole expense, separate payment and performance
bonds in an amount equal to either (i) the actual contract price or (ii) one and
one-half (1-1/2) times the estimated cost of any improvements, additions, or
alterations which Tenant desires to make within the Leased Premises. Such bonds
shall cover the faithful performance of the contract and payment of all
obligations arising therefrom and insure Landlord against any liability for
mechanics', materialmen's, or other construction liens and the completion of any
such work. If any lien is filed against the Leased Premises, the Building or the
Real Property by any person claiming by, through or under Tenant, Tenant, at
Tenant's sole cost and expense, shall immediately discharge the same or furnish
to Landlord a bond in form and amount and issued by a surety satisfactory to
Landlord, indemnifying Landlord against all liability, costs and expenses,
including but not limited to reasonable attorneys' fees, which Landlord may
incur, directly or indirectly, as a result thereof and Landlord's reasonable
administrative costs and expenses. If Tenant shall fail to cause such lien
forthwith to be discharged of record or bonded, then, in addition to any other
right or remedy of Landlord, Landlord may bond or discharge the same by paying
the amount claimed to be due, and the amount so paid by Landlord, including

<PAGE>

reasonable attorneys' fees incurred by Landlord in defending against such lien
or in procuring its discharge of record, shall be due and payable by Tenant as
additional rent.

12.   ASSIGNMENT, SUBLEASING AND OTHER TRANSFERS.

      12.1  TRANSFERS GENERALLY.

      Tenant shall not assign, transfer, mortgage, pledge, hypothecate, encumber
or otherwise transfer this Lease or any interest therein, nor sublease the whole
or any part of the Leased Premises, nor shall this Lease or any interest
hereunder be assignable or transferable by any process or proceeding of any
court, or otherwise (each of the foregoing being a "Transfer"), without in each
case first obtaining the prior written consent of Landlord, which consent shall
not be unreasonably withheld, delayed or conditioned. Any such Transfer or
transaction undertaken without Landlord's prior written consent shall be null
and void. In determining whether to grant consent to a proposed Transfer,
Landlord may reasonably consider any relevant factor, including but not limited
to the experience and business reputation of the proposed assignee, sublessee,
or transferee in operating its business; whether the use of the Leased Premises
following the Transfer is similar to that of Tenant, or otherwise reasonably
satisfactory to Landlord and appropriate for a first-class high rise office
building in the Bellevue Central Business District; whether the other party to
the proposed Transfer is a person with whom Landlord is presently negotiating
for a lease of space in the Building or in any other building owned by an
Affiliate of Landlord; whether the other party to the proposed Transfer is a
governmental agency or any party by whom any suit or action could be defended on
the ground of sovereign immunity; notwithstanding that Tenant and/or others
remain liable under the Lease, whether the proposed assignee, sublessee, or
transferee has a net worth, and financial strength and credit record,
satisfactory to Landlord (provided that if the financial condition of the
proposed assignee, sublessee, or transferee is at least equal to the net worth
of Tenant or Guarantor (whichever is greater) at the time of this Lease it shall
be satisfactory to Landlord); whether use of the Leased Premises by the proposed
assignee, sublessee, or transferee will not violate or create any potential
violation of any laws; whether the type and quality of the business to be
operated or likely to be operated by the proposed assignee, sublessee, or
transferee is consistent with the image of a first-class office building and
whether it would be considered inappropriate for such an office building
(provided that Tenant's use is deemed to be an appropriate use and business);
and whether Landlord's consent might result in a breach of any other lease or
agreement to which Landlord is a party. No Transfer shall relieve Tenant or
Guarantor of any liability under this Lease or Guarantee of Lease. A Transfer
includes, without limitation (and the following shall be deemed to be deemed a
"Transfer"): (i) a consolidation or merger of Tenant; (ii) a change in the
ownership or voting rights of more than twenty-five percent (25%) of the issued
and outstanding stock of any corporate tenant; (iii) any sublease, assignment or
transfer which would otherwise occur by operation of law, merger, consolidation,
reorganization, transfer or other significant change in corporate or proprietary
structure; (iv) the sale, assignment or transfer of all or substantially all of
the assets of Tenant, with or without the specific assignment of this Lease; and
(v) a change in control in any partnership tenant; provided, however, the
foregoing shall not be considered Transfers requiring

<PAGE>

Landlord's consent so long as Tenant or Guarantor is an entity whose outstanding
stock is listed on a recognized security exchange, or if at least 80% of the
voting stock of Tenant or Guarantor is owned by another entity, the voting stock
of which is so listed. The acceptance by Landlord of any amounts following any
transaction prohibited hereunder shall not be deemed to be a consent by Landlord
nor shall the same be deemed to be a waiver of any right or remedy of Landlord
hereunder. Consent to any such Transfer shall not operate as a waiver of the
necessity for consent to any subsequent Transfer. If Landlord's consent is
requested for a Transfer, Landlord shall have the right to terminate this Lease
with respect to that portion of the Leased Premises for which such consent is
requested, at the proposed effective date of such assignment, sublease or
transfer, and enter into the relationship of Landlord and Tenant with the
proposed assignee, subtenant, or transferee based on the rent (and/or other
compensation) and term agreed to by such assignee, subtenant or transferee and
otherwise upon the terms and conditions of this Lease. In connection with any
proposed Transfer, Tenant shall promptly provide Landlord with fully executed
copies of all documents and instruments related to the proposed Transfer.

      Notwithstanding the foregoing, Landlord's prior consent to a Transfer to
an Affiliate of Eddie Bauer, Inc. shall not be required provided: (i) the
Transfer shall only be effective as long as the Affiliate receiving the Transfer
is and at all times during the Lease Term remains an Affiliate of Eddie Bauer,
Inc.; (ii) neither Tenant nor Guarantor is released or relieved of any liability
or obligations under this Lease or the Guarantee of Lease, or both, and each
expressly reaffirms the foregoing to Landlord in writing; (iii) Tenant is not in
default under or in breach of this Lease; and (iv) Tenant notified Landlord in
writing of the Transfer to an Affiliate at least ten (10) days prior to the
Transfer.

      12.2  ASSIGNEE OBLIGATIONS.

      As a condition to Landlord's consent, any potential assignee or transferee
otherwise approved by Landlord shall expressly assume all existing and future
obligations of Tenant under this Lease and shall be jointly and severally liable
with Tenant for the payment of Base Rent, Other Charges, additional rent, and
the performance of all terms, covenants and conditions of this Lease.

      12.3  SUBLESSEE OBLIGATIONS.

      As a condition to Landlord's consent, any potential sublessee otherwise
approved by Landlord shall expressly assume all existing and future obligations
of Tenant under the Lease during the term of the sublease and shall be jointly
and severally liable with Tenant for the payment of Base Rent, Other Charges,
additional rent, and the performance of all terms, covenants, and conditions of
this Lease.

      12.4  CONDITIONAL CONSENTS.

      Any consent by Landlord to any Transfer may be subject to any terms or
conditions as Landlord shall determine appropriate (including but not limited to
requiring that any and all guarantors of the Lease agree to continue to
guarantee the Lease obligations after the

<PAGE>

assignment) and all such terms and conditions shall be binding upon any person
holding by, under or through Tenant.

      12.5  ATTORNEYS' FEES AND COSTS.

      Tenant and any assignee, sublessee or transferee shall reimburse Landlord
for Landlord's reasonable attorneys' fees and costs incurred in conjunction with
the processing and documentation of any such requested Transfer.

      12.6  NO DAMAGES.

      Tenant shall not be entitled to receive monetary damages based upon a
claim that Landlord unreasonably withheld its consent to a proposed Transfer,
and Tenant's sole remedy shall be an action to enforce any such provision
through specific performance or declaratory judgment. Any attempted Transfer in
violation of this Section 12 shall, at Landlord's option, be void. Consent by
Landlord to one or more Transfer(s) shall not operate as a waiver of Landlord's
rights to approve any subsequent Transfers. In no event shall any Transfer or
Permitted Transfer release or relieve Tenant from any obligation under this
Lease.

      12.7  EXCESS RENT.

      Tenant shall pay Landlord all rent and other consideration which Tenant
receives as a result of a Transfer that is in excess of the Rent payable to
Landlord for the portion of the Leased Premises and Term covered by the
Transfer. Tenant shall pay Landlord such amounts within 30 days after Tenant's
receipt of such excess consideration. Tenant may deduct from the excess all
reasonable and customary expenses directly incurred by Tenant attributable to
the Transfer (other than Landlord's attorneys' fee and costs), including
brokerage fees, legal fees and construction costs.

      12.8  TENANT'S VENDORS.

      Tenant may, from time to time, provide working areas within the Leased
Premises to vendors providing services exclusively to Tenant consistent with the
way in which such vendors currently provide such services to Tenant, without
Landlord's prior consent.

13.   COMMON AREAS AND FACILITIES.

      13.1  GENERALLY.

      The term "Common Areas and Facilities" refers to all on- and off-site
areas and related facilities which are made available or used from time to time
for the general use, convenience and benefit of Landlord and other persons
entitled to occupy space in the Building, including their employees, invitees,
licensees and guests, which areas shall include, but not be limited to, the
"Building Common Areas" and the "Project

<PAGE>

Common Areas." The term "Building Common Areas" refers to all entrances,
lobbies, elevators, stairs, corridors, restrooms and other public areas of the
Building designated by Landlord. The term "Project Common Areas" refers to those
areas of the Project made available for the general use, convenience and benefit
of Project tenants, occupants and residents, their respective licensees,
invitees, customers and employees, pursuant to the Project Documents and any
other persons authorized to use them. The Project Common Areas shall include,
without limitation, but subject to, and to the extent designated by the Project
Documents, exterior sidewalks, landscape and plaza areas, service entrances,
truck ramps, refuse collection and recycling areas, loading and delivery areas,
exterior pedestrian walkways, emergency exit corridors, exterior stairs, and
similar areas. The term "Common Areas and Facilities" also refers to all on- and
off-site areas and related facilities which may not be accessible to Tenant and
other persons entitled to occupy space in the Building, but which are used in
conjunction with the operation, management, repair or maintenance of the
Building including, but not limited to, janitorial closets, and on-site and
off-site management offices and maintenance areas.

      13.2  CONTROL AND MAINTENANCE OF COMMON AREAS BY LANDLORD.

      Landlord or its affiliates shall at all times have the exclusive control
and management of the Common Areas and Facilities. Landlord or its affiliates
shall keep or cause to be kept the Common Areas and Facilities in a neat, clean,
and orderly condition, properly lighted and landscaped, and shall repair any
damage thereto. With respect to the Common Areas and Facilities, Landlord shall
have the right from time to time to, without limitation, employ personnel;
establish, modify and enforce reasonable rules and regulations governing the use
thereof; construct, maintain and operate lighting facilities; police the Common
Areas and Facilities; change the number, area, level, location and arrangement
of parking structures and other areas and facilities; restrict parking by
Tenant, Tenant's officers, agents, licensees, and employees to employee parking
areas, if any; restrict parking by Tenant or Tenant's contractors,
subcontractors and suppliers; enforce parking charges (by operation of meters or
otherwise); close all or any portion of the Common Areas and Facilities to such
extent as may, in the opinion of Landlord's counsel, be appropriate to prevent a
dedication thereof or the accrual of any interest therein by any person or the
public; close temporarily all or any portion of the parking areas or facilities;
discourage non-customer parking; permit portions of the Common Areas and
Facilities to be used exclusively by specified occupants of the Building; place
or permit customer service and information booths, kiosks, stalls, push carts
and other merchandising facilities in the Common Areas and Facilities; and to do
and perform such other acts in and to the Common Areas and Facilities of the
Building as, in the use of reasonable business judgment, Landlord shall
determine to be advisable with a view to the improvement of the convenience and
use thereof by tenants of the Building, their employees, invitees and customers.

      13.3  LICENSE.

      Notwithstanding anything herein to the contrary, all Common Areas and
Facilities which Tenant may be permitted to use and occupy shall be used and
occupied under a revocable license. If the amount of such areas or facilities is
diminished, such diminution shall not be deemed a constructive or actual
eviction of Tenant and Landlord shall not be

<PAGE>

subject to any liability, nor shall Tenant be entitled to any compensation or
diminution or abatement of rent.

      13.4  RULES AND REGULATIONS.

      Tenant shall comply and cause Tenant's employees, agents, contractors and
licensees to comply with the reasonable and nondiscriminatory rules and
regulations that Landlord may from time to time promulgate and/or modify
regarding use and operation of the Common Areas and Facilities and the Leased
Premises. A copy of the rules and regulations in effect as of the date of this
Lease is attached hereto as EXHIBIT H. The parties recognize and acknowledge
that, as circumstances and conditions at the Building or the Project change over
time during the Lease Term, Landlord may determine, in its sole and complete
discretion, that it is necessary or appropriate to modify the rules and
regulations, provided such amendment does not materially interfere with Tenant's
Permitted Use of the Leased Premises. Accordingly, the rules and regulations may
be modified by Landlord from time to time hereafter and, when so modified, shall
become binding upon the parties hereto without further amendment of this Lease,
upon delivery of a copy thereof to Tenant. Landlord agrees not to adopt or amend
rules or regulations that are contrary to this Lease and do not also apply any
other tenants in the Building who may be similarly situated, if any. Landlord
shall not be responsible to Tenant for the nonperformance of such rules and
regulations by any other tenants or occupants of space in the Building or the
Project.

      13.5  TENANT PERSONNEL PARKING.

      Landlord shall offer, or cause its Affiliates to offer, to Tenant the
right to purchase at least four hundred (400) non-assignable permits ("Parking
Permits") that will permit Tenant's employees to park their personal vehicles in
unassigned spaces in either the parking garage included as part of the Project
(the "Lincoln Square Garage") or in the parking garage serving Bellevue Place
(the "Bellevue Place Garage"). The Parking Permits shall be allocated two to one
between the Lincoln Square Garage and the Bellevue Place Garage respectively.
For the first five (5) Lease Years of the Lease Term, the Parking Permits may be
purchased by Tenant for a monthly fee of One Hundred Twenty-five Dollars
($125.00), inclusive of all applicable taxes, for Parking Permits in the Lincoln
Square Garage and a monthly fee of One Hundred Dollars ($100.00), inclusive of
all applicable taxes, for Parking Permits in the Bellevue Place Garage. After
the fifth (5th) Lease Year, the cost of the Parking Permits will be the then
prevailing rate for such permits as charged by the garage operator(s) for the
Lincoln Square and Bellevue Place Garages. Landlord will have the right to make
reasonable allocations of Parking Permits as between the Lincoln Square Garage
and the Bellevue Place Garage. Landlord at all times shall have the right to
designate the particular parking areas in the Lincoln Square Garage and the
Bellevue Place Garage to be used by Tenant's employees, contractors,
subcontractors, suppliers, and agents of Tenant (collectively, "Tenant's
Personnel") and any such designation may be changed from time to time. Tenant's
Personnel shall park their cars only in those portions of the Lincoln Square
Garage and the Bellevue Place Garage designated for that purpose by Landlord. It
is understood and agreed that Landlord does not assume any responsibility
whatsoever for any damage or loss to any

<PAGE>

vehicles parked in either the Lincoln Square or Bellevue Place Garages or to an
personal property located therein, or for any injury sustained by any person in
or about the Lincoln Square and Bellevue Place Garages. Other than with respect
to the Parking Permits and the employees of Tenant holding Parking Permits,
Tenant acknowledges that Landlord shall not be required to provide parking areas
for Tenant's Personnel and further acknowledges that Tenant's Personnel may be
required to park off-site. Tenant shall furnish Landlord with its and its
employees' state vehicle license plate numbers within fifteen (15) days after
the Commencement Date, and Tenant shall thereafter notify Landlord of any
additions to or changes in such license numbers within five (5) days after such
addition or change occurs. All amounts due under the provisions of this Section
shall be payable by Tenant within ten (10) days after demand therefor. Tenant
shall notify all of Tenant's Personnel in writing of the provisions of this
Section.

      13.6  ROOFTOP DISHES.

      Tenant, at its sole cost and expense, shall have the non-exclusive right
(it being understood that Landlord may grant, extend or renew similar rights to
others) to install, maintain, and from time to time replace up to three (3)
satellite dishes of less than 1 meter in diameter (each, a "Dish") on the roof
of the Building, provided that prior to commencing any installation or
maintenance, Tenant shall obtain Landlord's prior approval of the proposed plans
and specifications for each Dish and any related cabling including, without
limitation, the size, weight and location of each Dish and method for fastening
the Dish to the roof, which approval may be withheld in Landlord's reasonable
discretion. Tenant's installation and/or replacement of each Dish shall comply
strictly with all governmental laws, rules and regulations and the conditions of
any bond or warranty maintained by Landlord on the roof. Tenant's use of the
Dishes shall be solely for its internal use, and Tenant shall not grant any
right to use of the Dish to any other party (including, without limitation, any
subtenant or assignee). Tenant, at Tenant's sole cost and expense, shall obtain
any necessary federal, state, and municipal permits, licenses and approvals, and
deliver copies thereof to Landlord. Landlord may supervise or perform any roof
penetration related to the installation of a Dish, and Landlord may charge the
cost thereof to Tenant. Tenant agrees that all installation, construction and
maintenance shall be performed in a neat, responsible, and workmanlike manner,
using generally acceptable construction standards, consistent with such
reasonable requirements as shall be imposed by Landlord. Tenant further agrees
to label each cable or wire placed by Tenant in the telecommunications pathways
of the Building, with identification information as required by Landlord. Tenant
shall repair any damage to the Building caused by Tenant's installation,
maintenance, replacement, use or removal of a Dish. Each Dish shall remain the
property of Tenant, and Tenant may remove all Dishes at its cost at any time
during the Lease Term. Tenant shall remove each Dish and any associated cabling
at Tenant's cost and expense upon the expiration or termination of this Lease
and restore the roof to the condition it was in prior to the installation.
Tenant agrees that the Dishes, and any wires, cables or connections relating
thereto, and the installation, maintenance and operation thereof shall in no way
interfere with the use and enjoyment of the Building, or the operation of
communications (including, without limitation, other satellite dishes) or
computer devices by Landlord or by other tenants or occupants of the

<PAGE>

Building or Project. If such interference shall occur, Landlord shall give
Tenant written notice thereof and Tenant shall correct the same within
twenty-four (24) hours of receipt of such notice. Landlord makes no warranty or
representation that the Building or any portions thereof are suitable for the
use of a Dish, it being assumed that Tenant has or will satisfied itself
thereof. Tenant's rights hereunder shall be exercised, if at all, during the
initial five year Lease Term. Tenant shall protect, defend, indemnify and hold
harmless Landlord from and against claims, damages, liabilities, costs and
expenses of every kind and nature, including reasonable attorneys' fees,
incurred by or asserted against Landlord arising out of Tenant's installation,
maintenance, replacement, use or removal of the Dishes.

14.   INDEMNITY AND INSURANCE.

      14.1  INDEMNIFICATION.

            (a) Generally. Landlord shall not be liable for the loss of or
damage to any property (including property of Tenant and others) occurring in or
about the Leased Premises from any cause whatsoever. Landlord shall not be
liable for injury to any person occurring in or about the Leased Premises, the
Building or the Project except and to the extent that such injury is caused by
Landlord's negligence. Except to the extent an injury to any person is caused by
Landlord's negligence, Tenant shall defend, indemnify and hold Landlord harmless
from and against any and all claims, charges, liabilities, obligations,
penalties, damages, costs and expenses (including reasonable attorneys' fees)
arising, claimed, charged or incurred against or suffered, directly or
indirectly, by Landlord from any matter or thing arising from Tenant's use of
the Leased Premises or the Common Areas and Facilities, the conduct of its
business or from any activity, work or other things done or permitted by Tenant
in or about the Leased Premises or the Common Areas and Facilities, and Tenant
shall further defend, indemnify and hold Landlord harmless from and against any
and all claims arising, directly or indirectly, from any breach or default in
the performance of any obligation of or to be performed by Tenant under the
terms of this Lease, or arising from any act or omission of Tenant, or any
officer, agent, employee, guest, or invitee of Tenant, and from all costs,
reasonable attorneys' fees, and liabilities incurred in or about the defense of
any such claim or any action or proceeding brought thereon. If any action or
proceeding is brought against Landlord by reason of such a claim, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by legal counsel
reasonably satisfactory to Landlord.

            (b) Concurrent Negligence of Landlord and Tenant Relating to
Construction, Repair and Maintenance Activities. Notwithstanding Section 14.1(a)
above, in the event of the concurrent negligence of Tenant, its agents,
employees, sublessees, invitees, licensees or contractors on the one hand, and
that of Landlord, its partners, agents, employees or contractors on the other
hand, which concurrent negligence results in injury or damage to persons or
property and relates to the construction, alteration, repair, addition to,
subtraction from, improvement to or maintenance of the Leased Premises , the
Building or the Project, Tenant's obligation to indemnify Landlord as set forth
in this Section 14.1 shall be limited to the extent of Tenant's negligence, and
that of its agents, employees, sublessees, invitees,

<PAGE>

licensees or contractors, including Tenant's proportional share of costs, and
reasonable attorneys' fees and expenses incurred in connection with any claim,
action or proceeding brought with respect to such injury or damage.

            (c) Waiver of Workers' Compensation Immunity. The indemnification
obligations contained in this Lease shall not be limited by any workers'
compensation, benefits or disability laws, and Tenant hereby waives any immunity
that Tenant may have under the Industrial Insurance Act, Title 51 RCW and
similar workers' compensation, benefit or disability laws.

      14.2  INSURANCE.

            (a) Liability Insurance. Tenant shall, at its own cost and expense,
keep and maintain in full force and effect during the Lease Term a policy of
commercial general liability insurance insuring Tenant's activities with respect
to the Leased Premises and the Building against loss, damage or liability for
personal injury or death or loss or damage to property with a limit of not less
than Two Million Dollars ($2,000,000) combined single limit for policies without
a general aggregate limit. For such policies with a general aggregate limit,
such aggregate limit shall be not less than Five Million Dollars ($5,000,000)
and include an endorsement providing that the foregoing limit shall apply per
location, including the Leased Premises, and have an occurrence limit not less
than Two Million Dollars ($2,000,000). In the event Tenant obtains a policy with
a general aggregate limit, Tenant shall immediately notify Landlord if claims
covered by such policy or policies at any time are made against Tenant, which
claims exceed fifty percent (50%) or more of the aggregate limit.
Notwithstanding the foregoing, if during the Lease Term, in Landlord's
reasonable judgment, the policy limits required hereunder are no longer adequate
to provide reasonable protection to Landlord, Landlord may notify Tenant of such
inadequacy and an appropriate level of coverage and Tenant, within thirty (30)
days of receiving such a notice, shall obtain such additional amounts of
insurance and provide Landlord with satisfactory evidence thereof. Reference may
be made to policy amounts required by other landlords for similar space and
operations in determining what is reasonable protection hereunder. The insurance
required under this Section shall be with companies rated A-VII or better in
Best's Insurance Guide. The insurance policy shall contain a provision that such
policy and the coverage evidenced thereby shall be primary and noncontributing
with respect to any policies carried by Landlord, and that any coverage carried
by Landlord shall be excess insurance. Landlord, and any other parties in
interest designated by Landlord, shall be named as an additional insured. The
insurance policy shall contain a provision that the insurer will not cancel,
materially change or fail to renew the coverage provided by such policy without
first giving Landlord forty-five (45) days' prior written notice. Tenant shall
deliver to Landlord upon the Commencement Date and from time to time thereafter
as requested by Landlord copies of all policies of such insurance or
certificates thereof showing Landlord as an additional insured and the
applicable policy limits thereof. In no event shall the limits of such policies
be considered as limiting the liability of Tenant under this Lease.

<PAGE>

            (b) Service of Alcoholic Beverages. If Tenant serves, distributes or
sells any alcoholic beverages, the insurance to be carried by Tenant pursuant to
Section 14.2(a) above shall not exclude liability for violation of any
governmental statute, ordinance, regulation or rule pertaining to the sale,
gift, distribution or use of any alcoholic beverages, or liability by reason of
the selling, serving or giving of any alcoholic beverage to a minor or to a
person under the influence of alcohol or any other person, or which causes or
contributes to the intoxication of any persons. Accordingly, the indemnification
obligations in Section 14.1 of this Lease shall extend, as well, to damages
occurring at locations other than the Leased Premises and resulting from risks
insurable by any of the following (i) so-called dram shop liability insurance;
(ii) host liquor liability insurance; (iii) liquor legal liability insurance; or
(iv) insurance otherwise related to the sale, gift, distribution or use of
alcoholic beverages.

            (c) Property Insurance. In addition to the insurance required by
Sections 14.2(a) and 14.2(b), Tenant shall, at its own cost and expense, keep
and maintain in full force and effect during the Lease Term property insurance
covering Tenant's supplies, inventory and other personal property as well as all
improvements, additions and modifications to or in the Leased Premises, in an
amount equal to one hundred percent (100%) of the replacement cost thereof. The
insurance policy shall bear an endorsement that the policy shall not be canceled
or the policy limits reduced below the coverage required by this Lease for any
reason other than non-payment of premiums, except upon forty-five (45) days'
prior written notice to Landlord and only after ten (10) days' prior written
notice to Landlord for non-payment of premiums. Tenant shall deliver to Landlord
upon the Commencement Date and from time to time thereafter as requested by
Landlord copies of all policies of such insurance or certificates thereof.

            (d) Failure to Maintain. If Tenant fails or refuses to maintain any
insurance required by this Section 14, Landlord, at its discretion, may obtain
and maintain insurance for such items and interests to protect Landlord in such
amounts as Landlord may determine to be appropriate and any and all premiums
paid or payable by Landlord therefor shall be deemed to be additional rent and
shall be due on the payment date of the next installment of Rent hereunder. The
failure to obtain or maintain any insurance required by this Section 14 shall
constitute a material breach of this Lease.

            (e) Increase in Insurance Premium. Notwithstanding anything in this
Lease to the contrary, Tenant shall not keep, use, sell or offer for sale in or
upon the Leased Premises any article, nor conduct any activities or operations,
which are or may be prohibited by Landlord's insurance carriers. Tenant shall
pay any increase in premiums for property or liability insurance maintained by
Landlord resulting from Tenant's use or occupancy of the Leased Premises,
whether or not Landlord has consented thereto if according to Landlord's
insurance carrier the increase in the premium is attributable to the Tenant's
conduct. In the event of such increased insurance premiums to Landlord, Tenant
may communicate directly with Landlord's insurance carrier or broker concerning
the increase and attempt to get it reduced, and also shall pay to Landlord an
amount equal to any additional premium on the insurance policy or policies that
Landlord may carry for its reasonable protection against loss resulting from any
insured event. In determining whether increased premiums are the result

<PAGE>

of Tenant's use or occupancy of the Leased Premises, the rates and premiums
determined by the organization setting the insurance premiums shall be
conclusive evidence of the several items and charges which make up the insurance
premiums. Landlord shall deliver bills for such additional amounts to Tenant at
such times as Landlord may elect, and Tenant shall immediately pay Landlord
therefor. The activities conducted by Tenant in its headquarters building in
Redmond, Washington, at the time this Lease is signed are not expected to cause
an increase in Landlord's insurance premiums for the Building ("Tenant's
Existing Activities"). Landlord's insurance broker has inspected Tenant's
operations at its Redmond headquarters building and reviewed such uses with the
insurance carriers and has had no indication that such use would result in a
higher than customary insurance premium for the Building. If Landlord receives
notice that Tenant's activities on the Leased Premises will substantially
increase Landlord's insurance premiums for the Building, Landlord shall notify
Tenant in writing of such impending increase and Tenant shall thereafter either
(i) cease such activities giving rise to such increase, or (ii) pay the
increased premiums resulting therefrom as additional rent. So long as Tenant
pays any increased premiums pursuant to the immediately preceding sentence,
Tenant may, at its sole cost and expense, inquire as to the reasons for the
increased premiums.

            (f) Project and Building Related Insurance. The Association, as
defined in the Master Declaration, is obligated under the Master Declaration to
obtain and maintain the insurance coverages described in Section 5 of the Master
Declaration. Upon Tenant's request at reasonable intervals, Landlord shall
direct the Association to make available to Tenant a schedule of the
Association's insurance, listing the policy numbers of the insurance obtained,
the names of the companies issuing such policies, the names of the Persons
insured, the amounts of coverage, the expiration date or dates of such policies
and the risks covered thereby.

      14.3  MUTUAL RELEASE AND WAIVER OF SUBROGATION.

      Landlord and Tenant hereby mutually release each other from liability, and
waive all right of recovery against each other, for any injury, loss or damage
to any building, structure, inventory or other tangible property and any
revenues, profit and rents to be generated therefrom, whether due to negligence
or any other insured cause, if such injury, loss or damage is caused by any of
the perils which are covered by a first-party insurance policy benefiting the
party suffering such injury, loss or damage, or if such injury, loss or damage
was required to be covered by insurance pursuant to this Lease; provided, that
this Section 14.3 shall be inapplicable if it would have the effect, but only to
the extent it would have the effect, of invalidating any insurance coverage of
Landlord or Tenant. Landlord and Tenant acknowledge that their current insurance
policies, as of the date of this Lease, will not be invalidated. In the future,
if avoiding any invalidation can be effected by the payment of money to such
insurer, the other party may elect to pay such amount to obtain such waiver of
subrogation for its benefit. Landlord and Tenant, respectively, shall promptly
notify the other if its insurance will be invalidated by the foregoing release
and waiver or if any payment is required to avoid such invalidation.
Notwithstanding anything to the contrary, this Section shall not apply to any
claim by Landlord for any Base Rent, Other Charges and

<PAGE>

additional rent payable under this Lease. Landlord and Tenant specifically
intend, however, that this Section shall apply to any potential claim that could
otherwise be made by Landlord for any rents to be paid by other occupants of the
Building or any claim that could potentially be made by Tenant for any lost
sales, profits or revenues that could have been generated from or operating
expenses related to the Leased Premises or elsewhere.

      14.4  ACTS OF OTHERS.

      Landlord shall not be responsible or liable to Tenant, or to those
claiming by, through or under Tenant, for any loss or damage which may be
occasioned by or through the acts or omissions of third parties or persons
occupying space adjoining the Leased Premises or any part of the Leased Premises
or any other part of the Building or the Project. In addition, Landlord shall
not be responsible or liable to Tenant for any loss or damage resulting to
Tenant, or those claiming by, through or under Tenant, or any of its property,
from fire; explosion; falling plaster; the breaking, bursting, stoppage or
leaking of water, gas, sewer, electrical cables, wires or steam pipes; or from
water, rain or other substances leaking or coming from the roof, street,
subsurface or from any other place or from dampness or from any similar risks or
causes. Landlord shall not be liable for any loss or damage to any person or
property sustained by Tenant or any other persons, which may be caused by theft,
or by any act or neglect of any tenant or occupant of the Building or the
Project, or of any other third parties.

      14.5  PROVISIONS SPECIFICALLY NEGOTIATED.

      LANDLORD AND TENANT ACKNOWLEDGE BY THEIR EXECUTION OF THIS LEASE THAT EACH
OF THE INDEMNIFICATION, RELEASE AND WAIVER PROVISIONS OF THIS SECTION 14
(SPECIFICALLY INCLUDING BUT NOT LIMITED TO THOSE RELATING TO WORKERS'
COMPENSATION BENEFITS AND LAWS) WAS SPECIFICALLY NEGOTIATED AND AGREED TO BY
LANDLORD AND TENANT.

15.   EMINENT DOMAIN.

      15.1  TOTAL TAKING.

      If all the Leased Premises are taken by eminent domain, this Lease shall
terminate as of the date Tenant is required to vacate the Leased Premises and
all Base Rent, additional rent and Other Charges due hereunder shall be paid to
that date. The term "eminent domain" shall include the taking or damaging of
property by, through or under any governmental or quasi-governmental authority,
and any purchase or acquisition in lieu thereof, whether or not the damaging or
taking is by the government or any other person authorized to exercise the power
of eminent domain.

<PAGE>

      15.2  PARTIAL TAKING.

      If more than fifteen percent (15%) of the Rentable Square Feet in the
Leased Premises is taken or appropriated by eminent domain, this Lease, at the
option of either party, may be terminated by written notice given to the other
party not more than thirty (30) days after Landlord and Tenant receive notice of
the taking or appropriation, and such termination shall be effective as of the
date Tenant is required to vacate the portion of the Leased Premises so taken.
If more than ten percent (10%) of the parking areas or other common areas of the
Building are taken or appropriated by eminent domain, then Landlord, at its
option, may terminate this Lease by written notice given to Tenant within sixty
(60) days of the date of such taking. If this Lease is so terminated, all Base
Rent, additional rent, and Other Charges due hereunder shall be paid to the date
of termination. Whenever any portion of the Leased Premises or common areas is
taken by eminent domain and this Lease is not terminated, Landlord, at its
expense, shall restore, to the extent reasonably prudent, the remainder of the
Leased Premises and common areas to their condition immediately prior to such
taking, and Tenant, at its sole expense, shall proceed with all reasonable
dispatch to restore its furniture, furnishings, floor covering, equipment and
alterations or improvements installed by Tenant to the same condition they were
in immediately prior to such taking. From the date Tenant is required to vacate
that portion of the Leased Premises taken, the Base Rent payable hereunder shall
be reduced in the same proportion that the Rentable Square Feet taken bears to
the total Rentable Square Feet in the Leased Premises prior to taking.

      15.3  DAMAGES.

      Landlord reserves all rights to the entire damage award or payment for any
taking by eminent domain, and Tenant shall make no claim whatsoever against
Landlord for damages for termination of its leasehold interest in the Leased
Premises or for interference with its business. Tenant hereby grants and assigns
to Landlord any right Tenant may now have or hereafter acquire to such damages
and agrees to execute and deliver such further instruments of assignment thereof
as Landlord may from time to time request. However, Tenant shall have the right
to claim from the condemning authority all compensation that may be recoverable
by Tenant on account of any loss incurred by Tenant in removing Tenant's
merchandise, furniture and equipment or for damage to Tenant's business;
provided, however, that Tenant may claim such damages only if they are awarded
separately in the eminent domain proceeding and not as part of Landlord's
damages.

16.   TENANT'S DEFAULT.

      16.1  DEFAULT.

      The occurrence of any one or more of the following shall constitute a
default and breach of this Lease by Tenant:

            (a) Failure to Pay Rent. Tenant's failure to make any payment of
Base Rent, Other Charges, or any other payment required to be made by Tenant
hereunder, as and

<PAGE>

when due. Tenant shall cure any default under this Section 16.1(b) within five
(5) days after written notice thereof by Landlord to Tenant.

            (b) Failure to Perform. Tenant's failure to observe or perform any
of the covenants, conditions or provisions of this Lease to be observed or
performed by Tenant (other than as described in Sections 16.1(a) and (b) above).
Tenant shall cure any default under this Section 16.1(c) within ten (10) days
(except as otherwise provided in this Lease) after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of Tenant's default is
such that more than ten (10) days are reasonably required for its cure, then
Tenant shall commence such cure as soon as reasonably possible, but in any event
within said ten (10) day period, and thereafter Tenant shall diligently
prosecute such cure to completion.

            (c) Creditor Assignment, Bankruptcy, Receivership. The making by
Tenant or a Guarantor, if any, of any general assignment or general arrangement
for the benefit of creditors; or the filing by or against Tenant or a Guarantor,
if any, of a petition to have Tenant or Guarantor adjudged a bankrupt, or a
petition or reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant or a Guarantor, the same
is dismissed within ninety (90) days of filing or later as required so long as
Tenant is performing all of its obligations under this Lease); or the
appointment of a trustee or a receiver to take possession of substantially all
of Tenant's assets located at the Leased Premises or of Tenant's interest in
this Lease or of substantially all of the assets of a Guarantor, where such
seizure is not discharged in sixty (60) days after appointment of such trustee
or receiver, or the filing of the petition for the appointment of the same,
whichever shall first occur.

            (d) Repeated Defaults. Tenant's failure to perform or observe any of
Tenant's obligations under the Lease after Tenant has been notified by Landlord
on at least (2) prior occasions within the last twenty-four (24) month period
that Tenant has failed to perform or observe any of Tenant's obligations under
the Lease at least twice previously (despite the fact Tenant may have cured any
such previous failures after notice from Landlord and within the notice period).

      16.2  REMEDIES IN DEFAULT.

      In the event of any such default or breach by Tenant, Landlord may at any
time after any applicable cure period, with or without notice or demand and
without limiting Landlord in the exercise of a right or remedy which Landlord
may have by reason of such default or breach:

            (a) Terminate the Lease. Terminate Tenant's right to possession of
the Leased Premises by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Leased
Premises to Landlord. In such event, Landlord shall be entitled to recover from
Tenant all past due Base Rent, additional rent and Other Charges; the expenses
of reletting the Leased Premises, including necessary repair, renovation and
alteration of the Leased Premises; reasonable attorneys' fees; the worth at the

<PAGE>

time of award by the court having jurisdiction thereof of the amount by which
the unpaid Base Rent, additional rent and Other Charges called for herein for
the balance of the Lease Term after the time of such award exceeds the amount of
such loss for the same period that Tenant proves could be reasonably avoided
(the "worth at the time of award" shall be determined by discounting such excess
amount by the discount rate of the Federal Reserve Bank of San Francisco plus
one percent (1%)); and that portion of any leasing commission paid by Landlord
and applicable to the unexpired Lease Term of this Lease; or,

            (b) Continue the Lease. Maintain Tenant's right to possession, in
which case this Lease shall continue in effect whether or not Tenant has vacated
or abandoned the Leased Premises. In such event Landlord shall be entitled to
enforce all Landlord's rights and remedies under this Lease, including the right
to recover the Base Rent, additional rent, Other Charges, damages from Tenant's
default or breach, and any other payments as they may become due hereunder, and
to specifically enforce Tenant's obligations hereunder and obtain injunctive
relief from further defaults and breaches; or,

            (c) Other Remedies. Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the State of
Washington.

      16.3  LEGAL EXPENSES.

      Tenant will pay on demand, as additional rent, the amount of all costs and
expenses (including without limitation reasonable attorneys' fees, expert fees
and other costs of review, prosecution or defense, and including the reasonable
allocated cost of any in-house counsel and other professionals) incurred by
Landlord in any investigation, prelitigation review, or proceeding relating in
any way to this Lease, including without limitation any such costs or expenses
incurred in connection with (a) collection of any amounts due under this Lease,
with or without commencement of a legal proceeding or action; (b) evaluation or
pursuit of claims of Landlord relating in any way to this Lease, with or without
commencement of a legal proceeding or action; (c) defense of any rights of
Landlord under or relating to this Lease, or challenges or claims of Tenant or
any other person to any of such rights, with or without commencement of a legal
proceeding or action; (d) Landlord's attempt to remove Tenant from the Premises,
with or without commencement of a legal proceeding or action; (e) any bankruptcy
case of Tenant or any other debtor (whether the general bankruptcy case or any
adversary proceeding or contested matter within such case) or other
nonbankruptcy legal action or proceeding in which Landlord's rights under this
Lease are in issue, directly or indirectly, whether specifically relating to
this Lease or as a general creditor therein; (f) any attempt to obtain relief
from stay or from other injunctive provisions in order to enforce Landlord's
rights under this Lease; (g) the actual or potential rejection or assumption of
the Lease in any bankruptcy case or other insolvency proceeding; (h) the actual
or potential assignment of the Lease to any other person, whether or not through
a bankruptcy case or other proceeding; (i) any appeals commenced by any party
from any of the foregoing proceedings, contested matters or adversary
proceedings; and (j) settlement, amendment, restructuring, renegotiation, or
comparable activities relating to the parties' rights and obligations under the
Lease.

<PAGE>

      16.4  BANKRUPTCY.

            (a) Assumption of Lease. If Tenant becomes a Debtor under Chapter 7
of the Bankruptcy Code ("Code") or a petition for reorganization or adjustment
of debts is filed concerning Tenant under Chapters 11 or 13 of the Code, or a
proceeding is filed under Chapter 7 of the Code and is transferred to Chapters
11 or 13 of the Code, the Trustee or Tenant, as Debtor and as
Debtor-In-Possession, may not elect to assume this Lease unless, at the time of
such assumption, the Trustee or Tenant has:

                  (1) Cured all defaults under the Lease and paid all sums due
and owing under the Lease or provided Landlord with "Adequate Assurance" (as
defined below) that (A) within ten (10) days from the date of such assumption,
the Trustee or Tenant will completely pay all sums due and owing under this
Lease and compensate Landlord for any actual pecuniary loss resulting from any
existing default or breach of this Lease, including without limitation,
Landlord's reasonable costs, expenses, accrued interest, and reasonable
attorneys' fees incurred as a result of the default or breach; (B) within twenty
(20) days from the date of such assumption, the Trustee or Tenant will cure all
non-monetary defaults and breaches under this Lease; and (C) the assumption will
be subject to all of the provisions of this Lease.

                  (2) For purposes of this Section, Landlord and Tenant
acknowledge that, in the context of a bankruptcy proceeding involving Tenant, at
a minimum, "Adequate Assurance" shall mean (A) the Trustee or Tenant has and
will continue to have sufficient unencumbered assets after the payment of all
secured obligations and administrative expenses to assure Landlord that the
Trustee or Tenant will have sufficient funds to fulfill the obligations of
Tenant under this Lease; (B) the Bankruptcy Court shall have entered an Order
segregating sufficient cash payable to Landlord and/or the Trustee or Tenant
shall have granted a valid and perfected first lien and security interest and/or
mortgage in property of Trustee or Tenant acceptable as to value and kind to
Landlord, to secure to Landlord the obligation of the Trustee or Tenant to cure
the monetary and/or non-monetary defaults and breaches under this Lease within
the time periods set forth above; and (C) the Trustee or Tenant, at the very
minimum, shall deposit a sum equal to two (2) months' Base Rent to be held by
Landlord (without any allowance for interest thereon) to secure Tenant's future
performance under the Lease.

            (b) Assignment of Lease. If the Trustee or Tenant has assumed the
Lease pursuant to the provisions of this Section for the purpose of assigning
Tenant's interest hereunder to any other person or entity, such interest may be
assigned only after the Trustee, Tenant or the proposed assignee have complied
with all of the terms, covenants and conditions of this Lease, including,
without limitation, those with respect to Base Rent and Other Charges, and the
use of the Leased Premises by the proposed assignee shall be only as permitted
in Section 1.1 above; Landlord and Tenant acknowledging that such terms,
covenants and conditions are commercially reasonable in the context of a
bankruptcy proceeding of Tenant. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Code shall be deemed without further
act or deed to have assumed all of the

<PAGE>

obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall upon request execute and deliver to Landlord an
instrument confirming such assignment.

            (c) Adequate Protection. Upon the filing of a petition by or against
Tenant under the Code, Tenant, as Debtor and as Debtor-In-Possession, and any
Trustee who may be appointed agree to adequately protect Landlord as follows:
(1) to perform each and every obligation of Tenant under this Lease until such
time as this Lease is either rejected or assumed by Order of the Bankruptcy
Court; (2) to pay all monetary obligations required under this Lease, including
without limitation, the payment of Base Rent, additional rent and Other Charges
payable hereunder, which is considered reasonable compensation for the use and
occupancy of the Leased Premises; (3) provide Landlord a minimum of thirty (30)
days' prior written notice, unless a shorter period is agreed to in writing by
the parties, of any proceeding relating to any assumption of this Lease or any
intent to abandon the Leased Premises, which abandonment shall be deemed a
rejection of this Lease; and (4) to perform to the benefit of Landlord otherwise
required under the Code. The failure of Tenant to comply with the above shall
result in an automatic rejection of this Lease.

      16.5  REMEDIES CUMULATIVE - WAIVER.

      Landlord's remedies hereunder are cumulative, and Landlord's exercise of
any right or remedy due to a default or breach by Tenant shall not be deemed a
waiver of, or to alter, affect or prejudice any right or remedy which Landlord
may have under this Lease or by law. Neither the acceptance of rent, nor any
other act or omission of Landlord at any time or times after the happening of
any event authorizing the termination or forfeiture of this Lease, shall operate
as a waiver of any past or future violation, breach or failure to keep or
perform any covenant, agreement, term or condition hereof or to deprive Landlord
of its right to terminate or forfeit this Lease, upon the written notice
provided for herein, at any time that cause for termination or forfeiture may
exist, or be construed so as at any time to stop Landlord from promptly
exercising any other option, right or remedy that it may have under any term or
provision of this Lease, at law or in equity.

17.   DEFAULT BY LANDLORD.

      Landlord shall not be in breach or default under this Lease unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event shall such time be less than thirty (30) days after
written notice by Tenant to Landlord and to the holder of any mortgage or deed
of trust covering the Leased Premises whose name and address shall have
theretofore been furnished to Tenant in writing. The notice shall specify
wherein Landlord has failed to perform such obligation. Notwithstanding the
foregoing, if the nature of Landlord's obligation is such that more than thirty
(30) days are required for performance, then Landlord shall not be in breach or
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion. Tenant further agrees
not to invoke any of its remedies under this Lease until said thirty (30) days
have elapsed, except as otherwise provided herein. In no event shall Tenant have
the

<PAGE>

right to terminate this Lease as a result of Landlord's breach or default, and
Tenant's remedies shall be limited to an award of monetary damages.

18.   RECONSTRUCTION.

      18.1  INSURED LOSS.

      Subject to Section 18.2 below, if the Leased Premises are damaged by
perils covered by Landlord's insurance coverage and the proceeds therefrom are
sufficient to cover the cost of repairs and are made available to Landlord for
the purpose of repairing such damage, Landlord agrees to forthwith repair the
same, and this Lease shall remain in full force and effect, except that Tenant
shall be entitled to a proportionate reduction of the Base Rent and Other
Charges from the date of damage and while such repairs are in progress, provided
said damage did not result from or was contributed to, directly or indirectly,
by the act, fault or neglect of Tenant. Such proportionate reduction shall be
based upon the extent to which the damage and making of such repairs materially
interfere, if at all, with the business carried on by Tenant in the Leased
Premises. If such damage resulted from or was contributed to, directly or
indirectly, by the act, fault or neglect of Tenant, the Base Rent and Other
Charges shall abate only to the extent Landlord receives proceeds from
Landlord's rental income insurance policy to compensate Landlord for the loss of
such rent and income.

      18.2  UNINSURED LOSS.

      If the Leased Premises are damaged as a result of a cause other than a
peril covered by Landlord's insurance coverage, or Landlord's insurance carrier
has not determined whether insurance proceeds from Landlord's insurance will be
made available to Landlord for the purpose of repairing the Leased Premises
within ninety (90) days after such damage, then Landlord shall have the option
to (i) repair or restore such damage forthwith, in which event this Lease shall
continue in full force and effect, but the Base Rent and Other Charges shall be
proportionately reduced as provided in Section 18.1 above; or (ii) at any time
within one hundred twenty (120) days after such damage give notice to Tenant of
the termination of this Lease as of the date specified in such notice, which
date shall be no less than thirty (30) days after the date of such notice. If
such notice is given, this Lease shall terminate and all interest of Tenant in
and to the Leased Premises shall end on the date so specified in such notice and
the Base Rent and Other Charges, reduced by a proportionate reduction, based
upon the extent, if any, to which such damage materially interfered with the
business carried on by Tenant in the Leased Premises, shall be paid up to date
of such termination. If Landlord does not terminate the Lease under this Section
18.2, then Landlord shall be deemed to have elected to repair or restore such
damage, which Landlord will undertake with all reasonable diligence.

      Notwithstanding anything in Sections 18.1 and 18.2 of this Lease to the
contrary, if Landlord is required or elects to repair or restore the Leased
Premises pursuant to Section 18.1 or 18.2 of this Lease, and if such repairs or
restoration are not substantially completed within one (1) year of the date of
the damage or destruction, then Tenant may elect to terminate this Lease by
giving ninety (90) days' written notice thereof to Landlord;

<PAGE>

provided, however, if Landlord notifies Tenant that such repairs will or are
likely to require more than one (1) year from the date of damage to
substantially complete, then Tenant shall make the election to terminate this
Lease within sixty (60) days of Landlord's notice. If Tenant does not elect to
terminate this Lease within sixty (60) days of Landlord's notice, then Tenant
shall be deemed to have waived and released its right to terminate this Lease
pursuant to this Section and this Lease shall continue in full force and effect,
subject to abatement of Rent as provided in Section 18.1 above and this Section
18.2.

      18.3  NO OBLIGATION.

      Notwithstanding anything to the contrary contained in this Article 18,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore any portion of the Leased Premises when the damage resulting from any
casualty, insured or uninsured, occurs during the last twenty-four (24) calendar
months of the Lease Term, including any extension of the Lease Term if Tenant
has exercised its Extension Option under Section 3.5 above. During any portion
of the Lease Term, Landlord shall not be required to repair any injury or damage
to or make any repairs or replacements of any leasehold improvements, fixtures,
or personal property of Tenant.

      18.4  PARTIAL DESTRUCTION OF BUILDING.

      If thirty percent (30%) or more of the leasable area of the Building is
damaged or destroyed, notwithstanding that the Leased Premises may be unaffected
by such fire or other cause, Landlord may terminate this Lease and the tenancy
hereby created by giving Tenant not less than thirty (30) days' prior written
notice of Landlord's election to terminate this Lease; provided, however, that
such notice shall be given, if at all, within the one hundred twenty (120) days
following the date of occurrence of such damage or destruction. Base Rent and
Other Charges shall be prorated as of the date of such termination.

      18.5  BUSINESS INTERRUPTION.

      No damages, compensation or claims shall be payable by Landlord for
inconvenience, loss of business, or annoyance arising from any repair or
restoration of any portion of the Leased Premises or of the Building.

19.   SUBORDINATION AND ATTORNMENT; LEASE ESTOPPEL CERTIFICATE; FINANCIAL
      STATEMENTS.

      19.1  SUBORDINATION - NOTICE TO MORTGAGEE.

      Provided the holder of any real estate security interest agrees to
recognize this Lease in the event of foreclosure if Tenant is not in default at
such time (a "Non-disturbance Assurance"), this Lease shall be automatically
subordinate to all of Landlord's mortgages, deeds of trust, or ground leases
which heretofore and hereafter affect the Leased Premises, the Building or the
Real Property, to any and all advances made or to be made thereunder, to the
interest on the obligations secured thereby, and to all renewals, modifications,
consolidations,

<PAGE>

replacements or extensions thereof. Upon receiving a Non-disturbance Assurance,
this subordination shall be self operative, and no further instrument of
subordination shall be necessary to effect such subordination; nevertheless, at
the request of Landlord, Tenant shall promptly execute and deliver all
instruments which may be reasonably required by Landlord or Landlord's lender to
subordinate this Lease to any existing or future mortgages or deeds of trust on
the Building or on the leasehold interest held by Landlord, and to any
extensions, renewals, or replacements thereof; provided, that the mortgagee or
beneficiary, as the case may be, shall agree, in exchange for the agreement of
Tenant to attorn to such mortgagee or beneficiary, to provide a Non-disturbance
Assurance. Notwithstanding anything to the contrary in this Lease, Landlord
shall not be in default under any provision of this Lease unless written notice
specifying such default is given to Landlord and to all persons who have an
interest in all or part of the Building as mortgagees and/or deed of trust
beneficiaries, and the provisions of Section 17 have been fully complied with.
Tenant further agrees that if Landlord shall have failed to cure or commence the
cure of such default within the time period allowed under Section 17 above, then
the mortgagees or deed of trust holder, as the case may be, shall have an
additional thirty (30) days within which to cure or commence the cure of such
breach or default and thereafter diligently pursue such cure to completion
including, if necessary to effectuate such cure, commencement of judicial or
nonjudicial foreclosure proceedings.

      19.2  LEASE ESTOPPEL CERTIFICATE.

      Tenant shall at any time and from time to time, within ten (10) days after
written notice from Landlord, execute, acknowledge and deliver to Landlord or
its designee a written statement, which may be substantially in the form of
EXHIBIT E certifying, to the extent true, that (i) this Lease is in full force
and effect and has not been assigned, modified, supplemented or amended in any
way (or specifying the date and terms of all agreements affecting this Lease);
(ii) all conditions under this Lease to be performed by the Landlord have been
satisfied, if any; (iii) all required contributions by Landlord to Tenant on
account of the Premises Improvements have been received; (iv) as of the date of
such certification there are no existing claims, defenses or offsets which the
Tenant has against the enforcement of this Lease by the Landlord; (v) no Base
Rent or other rent obligation has been paid more than one month in advance; (vi)
no security has been deposited with Landlord (or, if so, the amount thereof);
and (vii) setting forth any other information required by Landlord's lenders. It
is intended that all statements delivered pursuant to this paragraph may be
relied upon by prospective purchasers of Landlord's interest, Landlord's lenders
and other designees of Landlord and Landlord's lenders. If Tenant fails to
respond within ten (10) days of Tenant's receipt of a written request by
Landlord as herein provided, such failure shall be a material default under the
terms and conditions of this Lease. In addition, Tenant shall be deemed to have
given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee, that this Lease is in full force and
effect, that there are no uncured defaults in Landlord's performance, that the
security deposit is as stated in the Lease, and that no more than one month's
Base Rent has been paid in advance.

<PAGE>

      19.3  FINANCIAL STATEMENTS.

      Tenant covenants and agrees that, at any time, within thirty (30) days
after notice and demand by Landlord, Tenant shall furnish to Landlord, and cause
Guarantor to furnish to Landlord, (i) financial statements as of the end of
Guarantor's last fiscal year certified by Guarantor's chief financial officer
and audited by an independent certified public accountant, who shall issue an
accountant's audit report in conjunction with such audit, and (ii) unaudited
quarterly financial statements for months after the most recent year end audited
statements, and Tenant consents, and shall ask Guarantor to consent, to the
delivery of same by Landlord to lenders or prospective lenders or purchasers or
investors in or of all or party of the Building or Project or of any interest in
the deed of trust encumbering the Building or Project. Landlord agrees to
instruct any person or persons to whom Landlord delivers such financial
statements that such statements, if not publicly available, are to be kept
confidential. Notwithstanding the foregoing, Landlord agrees that as long at
Tenant is a wholly owned subsidiary of Guarantor and Guarantor's financial
statements reflect the financial standing of Tenant, Tenant and Guarantor need
only provide the financial statements (as described above) of Guarantor. So long
as Tenant is a publicly traded company, in no event shall Tenant or Guarantor be
required to disclose any of the financial information described in this Section
19.3 which is not required to be disclosed as a publicly traded company.

20.   ACCESS BY LANDLORD.

      Landlord or Landlord's employees, agents, and contractors shall have the
right to enter the Leased Premises at any time to examine the same, and, in the
last eighteen (18) months of the Lease Term, to show the Leased Premises (other
than floors 4, 5, 6 and 11) to prospective purchasers or tenants of the
Building, and to make such repairs, alterations, improvements or additions to
the Leased Premises and/or the Building as Landlord may deem necessary or
desirable. Notwithstanding any provision of this Lease, Tenant may deny access
to any part of the Leased Premises to any of its competitors at any time if
providing such access to such portion of the Leased Premises may, in Tenant's
reasonable judgment, compromise the confidential nature of Tenant's business
operation. Other than in emergency situations or situations perceived to be an
emergency, Landlord shall advise Tenant (which may be verbal) at least 24 hours
in advance if Landlord requires access to the Leased Premises. If Tenant is not
personally present to permit entry and entry is necessary, Landlord may forcibly
enter the same without rendering Landlord liable therefor. Landlord agrees not
enter areas of the Leased Premises marked on EXHIBIT C as, or that Landlord and
Tenant have agreed in writing are, "confidential areas" without Landlord being
accompanied by a representative of Tenant, which Tenant agrees to make
available, provided the requirement to be accompanied by a representative of
Tenant does not and shall not prevent or hinder Landlord in the performance of
its obligations under this Lease. Nothing contained herein shall be construed to
impose upon Landlord any duty of repair of the Leased Premises or building of
which the Leased Premises are a part except as otherwise specifically provided
in this Lease. This provision shall not have the effect of requiring notice
prior to Landlord's or Landlord's agent's entry for the performance of routine
and customary janitorial or maintenance services within the Leased Premises.

<PAGE>

21.   SURRENDER OF LEASED PREMISES.

      21.1  SURRENDER OF POSSESSION.

      Tenant shall promptly yield and deliver to Landlord possession of the
Leased Premises at the expiration or prior termination of this Lease.
Furnishings, trade fixtures and equipment, including but not limited to voice
and data cabling and other telecommunications equipment installed by Tenant,
shall be the property of Tenant. Upon termination of this Lease, Tenant shall
remove any such property. Tenant shall repair or reimburse Landlord for the cost
of repairing any damage to the Premises and/or Common Areas resulting from the
installation or removal of Tenant's property, and Tenant shall deliver the
Premises to Landlord in clean and good condition, except for reasonable wear and
tear.

      21.2  REMOVAL OF PROPERTY.

      At Landlord's request, Tenant shall remove all of its personal property
and (i) all improvements that are part of the Premises Improvements and are
identified in the Improvement Agreement as being removable fixtures or
improvements, (ii) all Exterior Signs, (iii) all improvements, fixtures and
equipment that comprise the Tenant Generator or Tenant HVAC System, and (iv) all
voice and data cabling and other telecommunications equipment installed by
Tenant at the termination of this Lease either by expiration of the term or
other cause, and shall pay Landlord for any damages or injury to the Leased
Premises or the Building resulting from such removal. If Tenant shall fail to
remove any property required to be removed by Tenant at the termination of this
Lease or when Landlord has the right of re-entry, Landlord may remove and store
such property without liability for loss thereof or damage thereto, such storage
to be for the account and at the expense of Tenant. If Tenant shall not pay the
cost of storing any such property after it has been stored for a period of
thirty (30) days or more, Landlord may, at its option, sell, or permit to be
sold, any or all such property at public or private sale, in such manner and at
such times and places as Landlord in its sole discretion may deem proper,
without notice to Tenant, unless notice is required under applicable statutes,
and shall apply the proceeds of such sale: first, to the cost and expense of
such sale, including reasonable attorneys' fees actually incurred; second, to
the payment of the costs or charges for storing any such property; third, to the
payment of any other sums of money which may then be or thereafter become due to
Landlord from Tenant under any of the terms hereof; and, fourth, the balance, if
any, to Tenant.

      21.3  VOLUNTARY SURRENDER.

      The voluntary or other surrender of this Lease by Tenant, or a mutual
termination thereof, shall not work a merger, but shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies, or operate as
an assignment to Landlord of any or all such subleases or subtenancies.

<PAGE>

      21.4  SURVIVAL.

      Tenant's obligations under this Section 21 shall survive the expiration or
termination of this Lease.

22.   QUIET ENJOYMENT.

      Commencing on the Commencement Date, and upon fully complying with and
promptly performing all of the terms, covenants and conditions of this Lease to
be performed on its part and upon the prompt and timely payment of all sums due
hereunder, Tenant shall have the right to quiet enjoyment and possession of the
Leased Premises for the Lease Term set forth herein, subject to the terms and
conditions of this Lease.

23.   AUTHORITY OF PARTIES.

      Landlord and Tenant represent and warrant that each is duly authorized to
execute and deliver this Lease, and that this Lease is binding upon it in
accordance with its terms.

24.   SIGNS/BUILDING NAME.

      24.1  INTERIOR SIGNS.

      Tenant shall not place or suffer to be placed on the exterior walls or
windows of the Leased Premises, or elsewhere in the Building, any sign without
obtaining Landlord's prior written consent, not to be unreasonably withheld,
conditioned or delayed. Tenant shall not place or suffer to be placed elsewhere
in the Project, or Common Areas and Facilities any sign without obtaining
Landlord's prior written consent, which consent may be withheld in Landlord's
sole discretion. The appearance of the Building, the Project and Common Areas
and Facilities and form and content of communication to customers and others at
the Building, the Project and Common Areas and Facilities being of concern both
to Landlord and other tenants as well as Tenant, Landlord hereby reserves the
right to require Tenant to modify or remove the content of any sign that may be
seen by the public that Tenant may place or cause or permit to be placed in or
about the Leased Premises, the Building, the Project and Common Areas and
Facilities. All signage in or about the Leased Premises is further subject to
rules and regulations Landlord may from time to time promulgate and/or modify
regarding use and operation of the Leased Premises, which rules and regulations
are more specifically referred to in Section 13.4 of this Lease. Notwithstanding
anything to the contrary in this Lease, as part of the right to name the
Building, Tenant may install or have installed interior signs in the elevator
lobbies, elevator cars of the Building, and any elevator entry areas to the
Building in proportion with other signage in the area, subject to Landlord's
prior written consent, which consent shall not be unreasonably withheld. In
addition, Tenant may install or have installed signs elsewhere in the Project,
or Common Areas and Facilities subject to Landlord's prior written consent,
which consent may be withheld in Landlord's sole discretion.

<PAGE>

      24.2  EXTERIOR SIGNS.

      Provided Tenant (and not an unaffiliated assignee or sublessee of Tenant)
occupies at least one hundred eighty thousand (180,000) Rentable Square Feet in
the Leased Premises, Tenant shall be entitled, at its sole cost and expense, to
install and maintain during the Lease Term, up to two exterior signs on top of
the Building and one (1) entry sign on the North side of the Building (the
"Exterior Signs"). The design, size, color and materials used for the Exterior
Signs and the location of the Exterior Signs shall be acceptable to Landlord, in
its reasonable discretion, and must comply with all requirements imposed by the
City of Bellevue and any and all other applicable governmental laws, rules and
regulations, including without limitation those contained in Bellevue City Code
Chapter 22B.10. The Exterior Signs shall contain only the words "Eddie Bauer" or
"Eddie Bauer Est. 1920." Tenant shall remove, at Tenant's cost and expense, the
Exterior Signs prior to the expiration or any earlier termination of the Lease
Term and immediately remove the Exterior Signs if Tenant no longer qualifies to
have and maintain such a sign under the City of Bellevue sign code and other
laws, rules and regulations and if Tenant fails or refused to do so, Landlord
may remove the Exterior Signs at Tenant's cost. Tenant also shall be responsible
for all maintenance and use costs associated with the Exterior Signs and the
cost of designing, constructing, installing and permitting the Exterior Signs
and any repair or restoration to the Building made necessary by the removal of
the Exterior Signs. Landlord accepts the use of the Tenant's logos, as depicted
on EXHIBIT L attached hereto, for the Exterior Signs.

      24.3  BUILDING NAME.

      During the Lease Term and as long as Tenant is not in default under this
Lease and is entitled to maintain the Exterior Signs on the Building, the
Building shall be identified to the public by Landlord as the "Eddie Bauer
Building at Lincoln Square." Nothing herein shall prevent Landlord from
continuing to use the name "Lincoln Square," and variations thereof, in
referring to the Project. Landlord shall not be obligated to require that any
tenant in the Building refer to the Building as the "Eddie Bauer Building at
Lincoln Square." Tenant grants to Landlord an irrevocable non-exclusive license
during the Lease Term to use "Eddie Bauer" solely in connection with the
Building and Tenant releases Landlord from any and all claims and causes of
action related to or arising out of Tenant's or Landlord's use of the name
"Eddie Bauer" in referring to the Building. Landlord grants to Tenant an
irrevocable non-exclusive license during the Lease Term to use "Lincoln Square"
solely in connection with the operation of its business in the Building and
Landlord releases Tenant from any and all claims and causes of action related to
or arising out of Tenant's or Landlord's use of the name "Lincoln Square" in
referring to the Building.

25.   MERCHANDISE.

Tenant shall not operate a retail store in the Leased Premises or, except as
specifically provided herein, sell merchandise in or from the Leased Premises.
Notwithstanding the forgoing Tenant may, (i) sell Eddie Bauer products to
employees of Eddie Bauer, Inc. in the Building at Tenant's Corporate Store and
(ii), no more frequently than six (6) times a Lease

<PAGE>

Year, use a portion of the Leased Premises on Floor 4 or 5 to conduct Private
Employee Sales. All Private Employee Sales shall be conducted during hours other
than during Regular Business Hours and in a manner that does not involve any
public promotion and is not contrary to the image of a first class office
building. The foregoing exception to the general prohibition on merchandise
sales in and from the Leased Premises is personal to Eddie Bauer, Inc. and not
assignable.

26.   MISCELLANEOUS.

      26.1  SUCCESSORS OR ASSIGNS.

      Subject to Section 12 hereof, all the terms, conditions, covenants and
agreements of this Lease shall extend to and be binding upon Landlord, Tenant,
their respective heirs, administrators, executors, successors and assigns, and
upon any person or persons coming into ownership or possession of any interest
in the Leased Premises by operation of law of otherwise, and shall be construed
as covenants running with the land.

      26.2  INTENTIONALLY OMITTED.

      26.3  BROKER'S COMMISSION.

      Tenant has been represented in the transaction involving this Lease by GVA
Kidder Mathews and Meredith & Grew ("Tenant's Brokers"). Other than with respect
to Tenant's Brokers, Tenant represents and warrants that it has incurred no
liabilities or claims for brokerage commissions or finder's fees in connection
with the execution of this Lease and that it has not dealt with or has any
knowledge of any real estate broker, agent or salesperson in connection with
this Lease. Landlord agrees to pay a commission to Tenant's Brokers pursuant to
a separate agreement. Other than with respect to Tenant's Brokers, Tenant agrees
to indemnify and hold Landlord harmless from all such liabilities or claims
(including, without limitation, attorneys' fees).

      26.4  PARTIAL INVALIDITY.

      If any term, covenant, or condition of this Lease or the application
thereof to any person or circumstance is, to any extent, invalid or
unenforceable, the remainder of this Lease, and the application of the terms,
covenants or conditions to persons or circumstances other than those which are
held invalid or unenforceable, shall not be affected thereby and each term,
covenant or condition of this Lease shall be valid and be enforced to the
fullest extent permitted by law.

      26.5  INTENTIONALLY OMITTED.

      26.6  RECORDING.

      Tenant shall not record this Lease. In addition, Tenant shall not record
any so-called "short form" memorandum of this Lease except on the form attached
hereto as EXHIBIT K. It

<PAGE>

is a condition to the recording of any memorandum of Lease that a true and
accurate Expiration Date be set forth thereon.

      26.7  NOTICES.

      Any notices required in accordance with any of the provisions herein if to
Landlord shall be delivered or mailed by registered or certified mail to the
address of Landlord as set forth in Section 1.1, or at such other place as
Landlord may in writing from time to time direct to Tenant, and if to Tenant,
shall be personally delivered, or mailed by registered or certified mail, or by
a nationally recognized overnight courier service (e.g., Federal Express), to
Tenant at the Leased Premises. If there is more than one Tenant, any notice
required or permitted hereunder may be given by or to any one thereof, and shall
have the same force and effect as if given by or to all thereof. Any notices
mailed to Tenant bearing the proper address and adequate postage for delivery
shall be deemed effective upon (i) deposit in the U.S. mail, or (ii) acceptance
or refusal of delivery, as the case may be.

      26.8  WAIVER.

      The waiver by Landlord of any term, covenant or condition herein contained
shall not be deemed to be a waiver of any subsequent breach of the same or any
other term, covenant or condition herein contained. The subsequent acceptance of
Base Rent, Other Charges or any other sum hereunder by Landlord shall not be
deemed to be a waiver of any preceding default by Tenant of any term, covenant
or condition of this Lease, other than the failure of the Tenant to pay the
particular sum so accepted, regardless of Landlord's knowledge of such preceding
default at the time of the acceptance of such sum. In addition, no endorsement
or statement on any check or any letter accompanying any payment shall be deemed
an accord and satisfaction, and Landlord's right to recover the balance of such
rent or pursue any other remedy provided herein or otherwise shall not be
affected by such endorsement or statement or by the acceptance of such payment.

      26.9  JOINT OBLIGATION.

      If there is more than one Tenant, the obligations hereunder imposed shall
be joint and several.

      26.10 LANDLORD'S LIABILITY.

      Anything in this Lease to the contrary notwithstanding, the covenants,
undertakings and agreements herein made on the part of Landlord are made and
intended not as personal covenants, undertakings and agreements for the purpose
of binding Landlord personally or the assets of Landlord, but are made and
intended for the purpose of binding only the Landlord's interest in the Leased
Premises and the Building as well as the future rents, issues and profits
thereof, as the same may from time to time be encumbered. No personal liability
or personal responsibility is assumed by, nor shall at any time be asserted or
enforceable against Landlord or any of its members or their respective heirs,
legal representatives, successors, and assigns on account of the Lease or on
account of any covenant, undertaking

<PAGE>

or agreement of Landlord in this Lease. Therefore, in consideration of the
benefits accruing hereunder, Tenant and all successors and assigns covenant and
agree that, in the event of any actual or alleged failure, breach or default
hereunder by Landlord:

            (a) The sole and exclusive remedy of Tenant shall be against the
Landlord's interest in the Leased Premises and the Building and the future
rents, issues and profits thereof;

            (b) No member of Landlord, or any director, officer, agent or
employee of Landlord shall be sued or named as a party in any suit or action,
and Landlord shall not assert therein the defense or lack of personal
jurisdiction arising out of Tenant's compliance with this Section 26.10;

            (c) No member of Landlord shall be required to answer or otherwise
plead to any service or process;

            (d) No judgment will be taken against any member of Landlord;

            (e) Any judgment taken against any member of Landlord may be vacated
and set aside at any time nunc pro tunc;

            (f) No writ of execution will ever be levied against the assets of
Landlord or any member of Landlord, other than Landlord's interest in the Leased
Premises or the Building;

            (g) These covenants and agreements are enforceable both by Landlord
and also by any member of Landlord.

      26.11 TIME.

      Time is of the essence of this Lease and each and all of its provisions in
which performance is a factor.

      26.12 LEASE AS SUBLEASE.

      It is understood and agreed that a portion of the real property on which
the Building will be constructed is currently ground leased, and so a part of
this Lease is actually a sublease. The portion of the real property on which the
Building will be constructed currently being ground leased is the Addable
Property (as defined in the Recitals of this Lease and described in EXHIBIT
A-1). During the Lease Term, Landlord may acquire fee ownership of the Addable
Property, in which event it, or a portion thereof, may be made a part of the
Office Condominium. The ground lease includes: that certain Ground Lease dated
March 1, 1990, by and between Ditty Properties, Inc., as lessee ("Ditty") and LS
Holdings, LLC, as lessor, successor in interest to Seattle First National Bank,
as trustee under the will of Walter M. Berg, deceased, Hildur Berg, as her
separate estate, and Fred T. Vinje and Marjorie E. Vinje, Trustees of the F.T.
and M.E. Vinje Revocable Trust established on March 17, 1988,

<PAGE>

all as their interests may appear, as amended and recorded April 12, 1990 in the
recorder's office of King County Washington as document number 9004120922 (the
"Berg/Vinje Lease"). Tenant shall attorn to such ground lessors if such lease is
terminated or to the holder of any mortgage or deed of trust on the leasehold
interest of Landlord in the event of foreclosure thereof. Tenant shall attorn to
such ground lessors if such lease is terminated or to the holder of any mortgage
or deed of trust on the leasehold interest of Landlord in the event of
foreclosure thereof.

      26.13 PRIOR AGREEMENTS.

      It is understood that there are no oral or written agreements or
representations between Landlord and Tenant affecting this Lease and that this
Lease supersedes and cancels any and all previous negotiations, arrangements,
representations, brochures, displays, projections, estimates, agreements and
understandings, if any, made by or between Landlord and Tenant with respect to
the subject matter thereof (including without limitation the "Proposal for Eddie
Bauer Holdings, Inc." dated on or about July 2005 and letter of intent dated
August 5, 2005), and none thereof shall be used to interpret, construe,
supplement or contradict this Lease. This Lease, and all mutually executed,
written amendments thereto, is and shall be considered to be the only agreement
between Landlord and Tenant and their representatives and agents. All
negotiations and oral agreements acceptable to Landlord and Tenant have been
merged into and are included in this Lease. There are no other representations,
covenants or warranties between Landlord and Tenant, and all reliance with
respect to representations is solely upon the express representations, covenants
and warranties contained in this Lease. Although the printed provisions of this
Lease were drawn by Landlord, Landlord and Tenant agree that this circumstance
shall not create any presumption, canon of construction, or implication favoring
the position of either Landlord or Tenant. Landlord and Tenant agree that the
interlineation, obliteration or deletion of language from this Lease prior to
its mutual execution by Landlord and Tenant shall not be construed to have any
particular meaning or to raise any presumption, canon of construction, or
implication, including, without limitation, any implication that Landlord or
Tenant intended thereby to state the converse, obverse or opposite of the
deleted language. This Lease shall be read as if the obliterated or deleted
language had never existed and the interlineated language had always existed.

      26.14 INABILITY TO PERFORM.

      The obligations of either Landlord or Tenant hereunder, except for the
obligations of Tenant to pay Base Rent, additional rent and Other Charges, shall
be excused for a period equal to the time by which such performance is prevented
or delayed due to strikes, labor disputes, acts of God, or any other causes
beyond the reasonable control of the party obligated to perform.

      26.15 TRANSFER OF LANDLORD'S INTEREST

      In the event of any transfer or transfers of Landlord's interest in the
Leased Premises or the Building, other than a transfer for security purposes
only, the transferor shall be

<PAGE>

automatically relieved of any and all obligations and liabilities on the part of
Landlord accruing from and after the date of such transfer, and Tenant agrees to
attorn to such transferee.

      26.16 TRANSPORTATION MANAGEMENT PROGRAMS; RECYCLING.

      Tenant shall cooperate with Landlord in meeting the objectives and
complying with the terms and conditions of any transportation management plan
(the "TMP") now or hereafter instituted by any governmental authority and
applicable to the Building. Landlord will provide Tenant with notice of any such
transportation plan now or hereafter in effect. In addition, Tenant will
cooperate with and participate in any and all recycling programs now or
hereafter in place with respect to the Building, whether or not governmentally
mandated, if all tenants of the Building are requested to participate.

      26.17 NO LIGHT, AIR OR VIEW EASEMENT.

      Any diminution or shutting off of light, air or view by any structure
which may be erected on or adjacent to the Building shall in no way affect this
Lease or the obligation of Tenant hereunder nor impose any liability on
Landlord, it being understood that affiliates of the Landlord have constructed a
hotel and residential condominium tower and other components of the Project
which may affect the Project's light, air, or view.

      26.18 CAPTIONS.

      Any section or paragraph titles or captions are for convenience only and
shall not be deemed to define, limit or otherwise modify the scope and intent of
this Lease or any provision thereof.

      26.19 PROJECT NAME.

      Landlord may change the name of the Project, and any of the components of
the Project, (subject to Tenant's rights with respect to the Building under
Section 24.3 above) at any time upon reasonable prior notice to Tenant. Any such
change shall not require amendment of this Lease or affect in any way Tenant's
obligations under this Lease, and except for the name change, all terms and
conditions of this Lease shall remain in full force and effect. Landlord shall
reimburse Tenant its reasonable, actual and verifiable out of pocket costs and
expenses incurred by Tenant as a result of Landlord's election to change the
name of the Project (e.g. cost of new signage, letterhead and business cards
reflecting the new name of the Project).

      26.20 CHOICE OF LAW-VENUE.

      This Lease shall be governed by the laws of the State of Washington. The
venue for any action to enforce the terms of this Lease or collect any amounts
owing by Tenant to Landlord shall be in the Superior Court for King County,
Washington.

<PAGE>

      26.21 INTENTIONALLY OMITTED.

      26.22 NO JURY TRIAL.

      Landlord and Tenant each hereby waives all rights to a trial by jury in
any claim, action or proceeding or counterclaim arising out of or in any way
connected with this Lease.

      26.23 OFAC CERTIFICATION.

            (a) Certification. Tenant certifies that:

                  (i) It is not acting, directly or indirectly, for or on behalf
of any person, group, entity, or nation named by any Executive Order or the
United States Treasury Department as a terrorist, "Specially Designated National
and Blocked Person," or other banned or blocked person, entity, nation, or
transaction pursuant to any law, order, rule, or regulation that is enforced or
administered by the Office of Foreign Assets Control; and

                  (ii) It is not engaged in this transaction, directly or
indirectly on behalf of, or instigating or facilitating this transaction,
directly or indirectly on behalf of, any such person, group, entity, or nation.

            (b) Indemnification. Tenant hereby agrees to defend, indemnify, and
hold harmless Landlord from and against any and all claims, damages, losses,
risks, liabilities, and expenses (including attorney's fees and costs) arising
from or related to any breach of the foregoing certification.

      26.24 GUARANTY.

      Landlord's obligations hereunder are made expressly contingent upon its
receipt of the duly executed Guaranty of Lease from Guarantor concurrently with
Tenant's delivery of this Lease when executed by it.

      26.25 AFFILIATES.

      As used in this Lease, the term "Affiliates" means any person that now or
hereafter, directly or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with another person. A Person shall
be deemed to control a corporation, partnership or limited liability company if
such person possesses, directly or indirectly, the power to direct or cause the
direction of the management of such corporation, partnership or limited
liability company, whether through the ownership of voting securities or
interests, by contract, or otherwise.

27.   CONFIDENTIALITY.

      Landlord and Tenant hereto agree to use reasonable efforts to keep
confidential all verbal or written correspondence pertaining to this Lease, and
all documents, materials and

<PAGE>

other information regarding the other party or this Lease marked confidential
which it shall have obtained during the course of the negotiations leading to
the consummation of this Lease (whether obtained before or after the date
hereof), the investigations provided for herein, or the preparation of this
Lease. The obligations of the parties under this Section 27 shall not apply to
any information which (a) such party can demonstrate was already in its
possession prior to the disclosure thereof by the other party, (b) is known to
the public or otherwise a matter of public record and did not become so known
through such party's violation of this Section, (c) is required to be disclosed
by any statute, ordinance or government regulation or by a rule or order of any
court of competent jurisdiction, or (d) is appropriate in the context of any
action or arbitration relating to defense of any alleged breach of this Lease.

28.   ADDITIONAL LEASE TERMINATION AND REMEDIAL RIGHTS.

      The parties hereto acknowledge that Tenant is currently occupying space,
as its corporate headquarters, pursuant to the terms of a lease which expires on
September 23, 2007. The parties desire, pursuant to the terms of this Section
28, to address matters of concern related to the construction and timely
completion of the Building, Base Building Improvements, Upgrades if any, and the
Premises Improvements.

      28.1  BUILDING AND BASE BUILDING IMPROVEMENTS .

      Landlord will commence mobilization and pre-construction work for
construction of the Building and Base Building Improvements (as defined in
Schedule D-1 )no later than January 31, 2006, with the pouring of concrete for
the core of the Building to have begun during the month of March 2006, so that
the Building ,Base Building Improvements and any Upgrades shall be substantially
completed by May 1, 2007 ("Base Building Completion Date"). Substantial
Completion of the Base Building Improvements by the Base Building Completion
Date may provide Tenant the opportunity to commence its installation of
furniture, fixtures and equipment in the Leased Premises in May 2007. Landlord
and Tenant shall use reasonable efforts to hold regular meetings (either at the
Project or telephonically) to provide Tenant the opportunity to assess the
progress of the Base Building Improvements. Subject to a Tenant Delay, if the
Base Building Improvements have not commenced on or before July 1, 2006, then
either Landlord or Tenant, in their sole discretion and as their sole and
exclusive remedy, shall have the one time option to terminate this Lease by
providing the other party a written notice of termination on or before July 15,
2006; provided, however, that, in the event Tenant terminates this Lease
pursuant to this paragraph, Landlord shall reimburse Tenant's actual and
verifiable out-of-pocket expenses related solely to Tenant's space planning for
the Leased Premises ("Space Planning Costs"), which amount shall not to exceed
Two Dollars ($2.00) per square foot of Usable Square Feet of the Leased Premises
and shall be set forth in reasonably detailed invoices that Tenant shall provide
to Landlord for review.

<PAGE>

      28.2  REIMBURSEMENT AMOUNT FOR DELAY IN SUBSTANTIAL COMPLETION OF PREMISES
            IMPROVEMENTS.

      If the Premises Improvements are not Substantially Completed (as defined
in EXHIBIT D) by September 1, 2007, through no fault or act of Tenant, its
agents, employees or contractors (e.g. Tenant requests for changes in the
Premises Improvements or due to a Tenant Delay (as defined in Exhibit D)), and
(a) subject to Tenant's timely completion of the Tenant Deliverables, and (b)
provided that GLY is Landlord's general contractor for the Premises Improvements
(a "Landlord Delay"), then Landlord shall, as its sole obligation to Tenant,
reimburse Tenant up to ninety percent (90%) of Tenant's actual and verifiable
out-of-pocket expenses directly and solely related to such Landlord Delay less
any Rent and Other Charges that Tenant would have been obligated to pay under
this Lease absent such Landlord Delay (collectively, the "Reimbursement
Amount"); provided, however, (i) in no event shall the Reimbursement Amount
exceed Three Million Five Hundred Thousand and 00/100 Dollars ($3,500,000.00),
and (ii) Landlord's obligation with regard to the Reimbursement Amount shall
cease if this Lease is terminated pursuant to Section 28.3 below. Tenant shall
use reasonable efforts to mitigate Tenant's actual out-of-pocket expenses
directly and solely related to such Landlord Delay.

      28.3  TERMINATION RIGHT FOR SUSPENSION OR DELAY OF SUBSTANTIAL COMPLETION
            OF PREMISES IMPROVEMENTS.

      If the Premises Improvements are not Substantially Completed (as defined
in EXHIBIT D) by March 1, 2008, through no fault or act of Tenant, its agents,
employees or contractors, and subject to Tenant's timely completion of the
Tenant Deliverables, then Tenant, in its sole discretion, shall have the one
time option to terminate this Lease by providing Landlord a written notice of
termination on or before March 15, 2008. In the event Tenant terminates this
Lease pursuant to this paragraph, Tenant's sole and exclusive remedy against
Landlord shall be (i) Landlord's reimbursement of Tenant's Space Planning Costs,
which amount shall not to exceed Two Dollars ($2.00) per square foot of Usable
Square Feet and which costs shall be set forth in reasonably detailed invoices
that Tenant shall provide to Landlord for review; plus (ii) the Reimbursement
Amount up to and including the date of termination pursuant to this Section
28.3.

      Subject to Landlord using commercially reasonable diligence to
substantially complete the Premises Improvements by March 1, 2008, if Premises
Improvements are not substantially completed by March 1, 2008, Landlord, in its
sole discretion, shall have the one time option to terminate this Lease by
providing Tenant a written notice of termination on or before March 15, 2008, in
which event Landlord's sole obligation to Tenant shall be payment of Tenant's
Space Planning Costs plus the Reimbursement Amount up to and including the date
of termination pursuant to this Section 28.3.

      28.4  TENANT DELIVERABLES.

      For the purpose of this Section, "Tenant Deliverables" shall mean the
following: (a) Tenant's receipt of Landlord's final approval of Tenant's Working
Drawings (as defined in

<PAGE>

EXHIBIT D) on or before July 1, 2006 (Landlord shall perform in accordance with
the responsive timelines set forth in Section 5 of EXHIBIT D), and (ii) Tenant's
receipt of construction permits from the City of Bellevue based on such Working
Drawings on or before August 15, 2006.

      28.5  LIMITATION OF LIABILITY FOR LANDLORD'S LENDER AND NEW OWNERS.

      Neither Landlord's Lenders, nor any new owner of the Project or any
portion thereof shall have any obligation or incur any liability with respect to
construction of the Project, the Building, or the Premises Improvements or any
tenant improvement work or any other improvements for Tenant's use and occupancy
by the Estimated Commencement Date. If any such obligation has not been fully
performed as of the date a new owner obtains title to the Project or any portion
thereof, the Lease shall terminate unless (a) the new owner delivers written
notice to Tenant expressly assuming such obligation within thirty (30) days
after the foreclosure sale or acceptance of the deed in lieu of foreclosure, or
(b) Tenant waives such obligation by delivery of written notice to Landlord's
lender within thirty (30) days after receiving notice from the Landlord's
Lenders of the foreclosure or deed in lieu of foreclosure.

29.   APPROVAL BY LANDLORD'S LENDERS AND MEMBERS.

      This Lease is conditioned upon Landlord receiving the approval of
Landlord's current and anticipated project lenders ("Landlord's Lenders") and
the approval, if required, of the members of Landlord, which Landlord shall
endeavor to obtain using all reasonable diligence immediately upon execution of
this Lease in the ordinary course of seeking acceptable financing for the
Building. Within ten (10) business days after Landlord's request therefor Tenant
shall provide Landlord and Landlord's Lenders with such other financial
information regarding Tenant and Guarantor as Landlord or Landlord's Lenders may
request. If Landlord's Lenders or Landlord's members disapprove of this Lease,
or Landlord determines that it cannot reasonably obtain the approval of
Landlord's Lenders and members, then Landlord shall have the right to terminate
this Lease upon written notice to Tenant. Landlord represents that it has
presented the essential terms of this Lease to Landlord's Lenders and has
obtained oral approval of both Tenant and this Lease from its members and
potential Landlord Lenders. If Landlord terminates this Lease, Landlord shall
have no further obligations whatsoever to Tenant under this Lease. Landlord
agrees to use reasonable efforts to obtain the approval of Landlord's Lenders
and members as soon as reasonably possible.

30.   TENANT'S LEASEHOLD TITLE INSURANCE.

      Tenant may obtaining a policy of ALTA leasehold title insurance insuring
the validity of the Lease with exceptions reasonably acceptable to Tenant.,.

<PAGE>

31.   STORAGE SPACE IN THE PROJECT.

      Tenant shall be provided approximately 1,750 square feet of storage space
within the Project pursuant to a separate Storage Agreement on commercially
reasonable terms for the amount of space provided.

      IN WITNESS WHEREOF, the parties hereto have executed this instrument the
day and year first above set forth.

LANDLORD                                     TENANT

LINCOLN SQUARE OFFICE, LLC,                  EDDIE BAUER, INC., a Delaware
a Washington limited liability company       corporation

By: Kemper Development Company, a
    Washington corporation, Its Manager

By __________________________________        By _______________________
   F. Kemper Freeman, Jr.                        Mark Borison, Vice President of
   Chairman/CEO                              Real Estate

By ________________________________
   Richard S. Sprague
   Senior Vice President/Secretary

<PAGE>

STATE OF WASHINGTON        )
                           )  ss:
COUNTY OF KING             )

      On this ______ day of ____________, 2005, before me, the undersigned, a
Notary Public in and for the State of Washington, duly commissioned and sworn,
personally appeared F. KEMPER FREEMAN, JR., and RICHARD S. SPRAGUE, to me known
to be the Chairman/CEO and Vice President/Secretary, respectively, of KEMPER
DEVELOPMENT COMPANY, a Washington corporation, the Manager of LINCOLN SQUARE
OFFICE, LLC, a Washington limited liability company, the limited liability
company that executed the foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said limited liability
company, for the uses and purposes therein mentioned, and on oath stated that
they were authorized to execute the said instrument.

      WITNESS my hand and official seal hereto affixed the day and year first
written above.

                              _______________________________________________
                              Print Name:_____________________________________
                              Notary Public in and for the State of Washington,
                              residing at ____________________________________
                              My commission expires:__________________________

STATE OF WASHINGTON   )
                      )  ss:
COUNTY OF KING        )

      On this ______ day of ______________, 2005, before me, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Mark Borison, to me known to be the Vice President of Real Estate of
EDDIE BAUER, INC., a Delaware corporation, the corporation named in and which
executed the foregoing instrument; and he acknowledged to me that he signed the
same as the free and voluntary act and deed of said corporation for the uses and
purposes therein mentioned, being authorized so to do.

      WITNESS my hand and official seal the day and year in this certificate
above written.

                              _______________________________________________
                              Print Name:_____________________________________
                              Notary Public in and for the State of Washington,
                              residing at ____________________________________
                              My commission expires:__________________________<PAGE>

                                                                 EXHIBIT 10.9(c)

                            SECOND AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO LEASE is made as of __________, 2001 between PLAZACORP
RETAIL PROPERTIES LTD. ("Landlord") and SPIEGEL GROUP TELESERVICES-CANADA, INC.
("Tenant").

                                   WITNESSETH

WHEREAS, by the Lease dated January 23, 2001, between the parties hereto (the
"Lease"), Landlord demised and leased to Tenant and Tenant leased and took from
Landlord for the Lease Term and upon the terms and conditions set forth therein
certain Premises containing approximately 37,815 square feet situated in
Lansdowne Place in Saint John, New Brunswick Canada, said Premises being more
particularly designated in the lease; and

WHEREAS, the Lease was amended by a First Amendment To Lease dated June 18,
2001; and

WHEREAS, Landlord and Tenant desire to amend Section 1.16 of the Lease "Special
Clauses"; and

NOW, THEREFORE, the parties hereto mutually agree as follows:

1.    All terms and words of art used herein, as indicated by the initial
      capitalization thereof, shall have the same respective meanings designated
      for such terms and words of art in the Lease.

2.    Under "Special Clauses" - Parking Clause shall be amended as follows:

      Upper level parking field to be for exclusive use of the Tenant. Tenant
      may, at its sole discretion, subject to providing access to the Landlord
      for purpose of fulfilling Landlord's responsibilities herein, control
      access to the upper level parking field. Landlord shall guarantee Tenant's
      use of a minimum of 350 parking spaces. Said spaces shall be located both
      in the rear of the building and along the south side of the building which
      is closest to Tenant's proposed entrance. Site lighting shall be a minimum
      of 2.50 foot candles average in the parking lot. Landlord and Tenant
      approved plan showing the proposed configuration of Tenant's spaces as
      specified in Schedule "A" outlined in Blue.

3.    Under "Special Clauses" - Antennae/Satellite Dish shall be amended as
      follows:

      Tenant shall have the right to install equipment or antenna for data and
      telecommunications on the roof at Tenant's expense. Tenant shall also have
      the right to install cameras, monitoring devices, and such other security
      equipment as it considers appropriate, both on the premises and outside
      the premises, as it considers appropriate, and as its expense.

4.    Under "Special Clauses" - Tenant Access shall be amended as follows:

<PAGE>

      Tenant shall have access to the building and its respective parking areas
      seven (7) days per week, twenty-four (24) hours per day. Subject to the
      Landlord's rights of entry and Landlord's rights for purposes of
      fulfilling Landlord's responsibilities herein, Tenant shall have exclusive
      rights of ingress and egress to and from the Premises and appurtenant
      areas, including, but not limited to, the right to control access to exits
      and entrances to the Premises and access to and use of sidewalks
      appurtenant to those exits and entrances and sidewalks appurtenant to the
      upper level parking field.

5.    This Second Amendment may not be changed orally, but only by an agreement
      in writing signed by the party whom enforcement of any waiver, change,
      modification or discharge is sought.

6.    This Second Amendment shall be binding upon, and inure to the benefit of
      the parties hereto, their legal representatives, successors and assigns.

7.    In the event of any conflict between the Lease and the terms of this
      Second Amendment, the terms of this Second Amendment to Lease shall
      prevail.

8.    Except as modified by this Second Amendment, the Lease and all the terms,
      covenants, conditions, provisions, and agreements thereof are hereby in
      all respects ratified, confirmed and approved.

9.    The Second Amendment contains the entire understanding between the parties
      with respect to the matter contained herein. No representations,
      warranties, covenants or agreements have been made concerning or affecting
      the subject matter of this Second Amendment except as are contained
      herein.

      IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
to Lease as of the day and year first written above.

LANDLORD:                                  TENANT:

PLAZACORP RETAIL PROPERTIES LTD.           SPIEGEL GROUP
                                           TELESERVICES-CANADA, INC.

By: ______________________________         By: _________________________________

Its:______________________________         Its: ________________________________

                              CONSENT BY GUARANTOR

      The undersigned as Guarantor under the Lease hereby consents to the
foregoing Second Amendment of Lease.

                                                                               2
<PAGE>

GUARANTOR:

SPIEGEL, INC.

By: __________________________

Its: _________________________

                                                                               3
<PAGE>

                            FIRST AMENDMENT TO LEASE

      THIS FIRST AMENDMENT TO LEASE is made as of __________, 2001 between
PLAZACORP RETAIL PROPERTIES LTD. ("Landlord") and SPIEGEL GROUP
TELESERVICES-CANADA, INC. ("Tenant").

                                   WITNESSETH

      WHEREAS, by Lease dated January 23, 2001, between the parties hereto (the
"Lease"), Landlord demised and leased to Tenant and Tenant leased and took from
Landlord for the Lease Term and upon the terms and conditions set forth therein
certain Premises containing approximately 37,815 square feet situated in
Lansdowne Place in Saint John, New Brunswick Canada, said Premises being more
particularly designated in the Lease; and

      WHEREAS, the parties hereto wish to confirm and memorialize the
commencement and expiration dates of the ten (10) year Lease Term and certain
other matters as set forth herein.

      NOW, THEREFORE, the parties hereto mutually agree as follows:

      1.    All terms and words of art used herein, as indicated by the initial
            capitalization thereof, shall have the same respective meanings
            designated for such terms and words of art in the Lease.

      2.    The Term of the Lease commenced upon the Rent Commencement Date
            which for all purposes under the Lease shall be deemed to be June
            15, 2001. The first Lease Year shall be June 15, 2001 through June
            30, 2002. The initial ten (10) year Lease Term shall expire at
            midnight on June 30, 2011, unless sooner terminated or extended as
            provided in the Lease.

      3.    Due to the Primary Delivery Date of March 13, 2001, Minimum Rent,
            Additional Rent and all other charges payable by Tenant under the
            Lease shall be abated for the period June 15, 2001 through June 26,
            2001.

      4.    Tenant's first Option to Renew shall, if exercised, commence on July
            1, 2011 and shall expire on June 30, 2016. Tenant shall give notice
            of Tenant's first Option to Renew no later than September 30, 2010.
            Minimum Rent payable during the first Option to Renew shall be at a
            Base Rental Rate of $13.50 p.s.f. per annum (payable in Canadian
            Funds). Tenant's second Option to Renew shall, if exercised commence
            on July 1, 2016 and shall expire on June 30, 2021. Tenant shall give
            notice of Tenant's second Option to Renew no later than September
            30, 2015. Minimum Rent payable during the second Option to Renew
            shall be at a Base Rental Rate of $14.50 p.s.f. per annum (payable
            in Canadian Funds).

      5.    In the event of any conflict between the Lease and the terms of this
            First Amendment, the terms of this First Amendment to Lease shall
            prevail.

                                                                               4
<PAGE>

      6.    Except as modified by this First Amendment, the Lease and all the
            terms, covenants, conditions, provisions, and agreements thereof are
            hereby in all respects ratified, confirmed and approved.

      7.    This First Amendment contains the entire understanding between the
            parties with respect to the matter contained herein. No
            representations, warranties, covenants or agreements have been made
            concerning or affecting the subject matter of this First Amendment
            except as are contained herein.

      8.    This First Amendment may not be changed orally, but only by an
            agreement in writing signed by the party whom enforcement of any
            waiver, change, modification or discharge is sought.

      9.    This First Amendment shall be binding upon, and inure to the benefit
            of the parties hereto, their legal representatives, successors and
            assigns.

      IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to Lease as of the day and year first above written.

LANDLORD:                                  TENANT:

PLAZACORP RETAIL PROPERTIES LTD.           SPIEGEL GROUP
                                           TELESERVICES-CANADA, INC.

By: ______________________________         By: _________________________________

Its:______________________________         Its: ________________________________

                              CONSENT BY GUARANTOR

      The undersigned as Guarantor under the Lease hereby consents to the
foregoing First Amendment to Lease.

GUARANTOR:

SPIEGEL, INC.

By: ______________________________

Its:______________________________

                                                                               5
<PAGE>

                                   COVER PAGE

1.01   LANDLORD

PLAZACORP RETAIL PROPERTIES LTD.
527 Queen Street
Suite 200
Fredericton, NB
E3B 1B8
Canada

1.02   TENANT

SPIELGEL GROUP TELESERVICES-CANADA, INC.
5000 City Line Road
Hampton, VA
23611
USA

1.02(a)  GUARANTOR

SPIEGEL, INC.
Attn:  Real Estate Dept.
3500 Lacey Road
Downers Grove, IL
60515-5432
USA

1.03   BUILDING

55 Lansdowne Avenue (Lansdowne Place)
Saint John, NB

1.04   PREMISES OR LEASED PREMISES

Unit 202

1.05   RENTABLE AREA

Approximately 37,815 square feet of rentable area

1.06   TERM

Ten (10) Years
In the event Landlord fails, for any reason, to deliver possession of the
Premises as required by this Lease on or before March 1st, 2001 (the "Primary
Delivery Date"), then Tenant shall receive, commencing on the Rent Commencement
Date, one (1) day's abatement of Minimum Rent,

                                                                               6
<PAGE>

Additional Rent and all other charges payable by Tenant under this Lease for
each day that such delivery is delayed beyond the Primary Delivery Date. In the
event Landlord fails, for any reasons, to deliver possession of the Premises as
required by this Lease on or before April 1st, 2001, then Tenant may elect, upon
notice to Landlord, given any time prior to the date of such delivery, to
terminate this Lease effective upon notice to Landlord, whereupon in addition to
the amounts payable by Landlord as provided above, Landlord shall reimburse
Tenant for all costs and expenses incurred by Tenant in connection with the
Premises and this Lease (not to exceed $30,000.00 Canadian) within ten (10) days
of Tenant's written demand therefor.

1.07  RENT COMMENCEMENT DATE

Rent shall commence on the earlier to occur (i) ninety (90) days after the date
Landlord delivers the Premises to Tenant with Landlord's Work substantially
complete or (ii) the date Tenant commences business from the Premises, but in no
event prior to April 1, 2001.

1.08  MINIMUM RENT

Year(s) 1-5
$11.50 per sq. ft. (Payable in Canadian Funds)
$434,872.50 per annum (Payable in Canadian  Funds)
$36,239.37 per month (Payable in Canadian Funds)

Year(s) 6-10
$12.50 per sq. ft. (Payable in Canadian Funds)
$472,687.50 per annum (Payable in Canadian Funds)
$39,390.62 per month (Payable in Canadian Funds)

1.09  TAXES

The Tenant shall pay to the Landlord proportionate share of the building's real
estate taxes estimated at $1.00 per square foot (Payable in Canadian Funds) for
current year with review annually.

1.10  CAM

Tenant's proportionate share of any and all common area maintenance charges for
the building and entire shopping center is included in the above referenced base
rental rate.

1.11  HARMONIZED SALES TAX

Except as otherwise provided herein, all costs quoted in this Agreement are
exclusive of sales tax. The Harmonized Sales Tax (HST) is applicable to
commercial rents and payment is the responsibility of the Tenant. Any future
revisions to the HST or any other municipal, provincial or federal sales taxes
that are applicable to commercial rents shall be paid by the Tenant.

1.12  PREPAID RENT

Intentionally Deleted

                                                                               7
<PAGE>

1.13  LANDLORD'S WORK

Details described in Schedule "C".

1.14  TENANT'S WORK

Details described in Schedule "D".

1.15  USE OF PREMISES

The Tenant will use the Premises for no other purpose than the operation of
"Call Center" including without limitation telemarketing, teleservice, customer
support, call processing, call distribution, credit collection and all other
uses normally associated with a "Call Center" and related general office uses
and for no other purpose without Landlord's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed, provided that
notwithstanding the foregoing, Tenant may at any time convert all or any part of
the Premises to any lawful retail use without seeking or obtaining the consent
of Landlord, provided that such retail use would not conflict with any
exclusivity rights granted to other tenants of the property.

1.16  SPECIAL CLAUSES

UTILITIES

Tenant shall be solely responsible for and promptly pay all charges for heat,
water, gas, electricity and any other utility used or consumed in the Leased
Premises.

If not already separately metered, Landlord shall separately meter the Premises
as a part of the Landlord's Work.

Landlord agrees to cause the necessary mains, conduits and other facilities to
be provided to make water, sewer, gas, phone and electricity available to the
Premises prior to the Commencement Date at Landlord's expense.

Landlord covenants and agrees to exercise all reasonable efforts not to
interfere with the conduct of Tenant's business in the Premises and to exercise
due diligence in repairing, replacing or restoring any interruption in service
or utilities. If any service or utility to the Premises should become
unavailable for a period in excess of twenty-four (24) consecutive hours and if
any such interruption or diminution of utilities or services is caused by
Landlord and Tenant, in its reasonable business judgment, elects to close the
Premises as a result thereof, all Minimum Rent and other charges shall abate
from the commencement of said unavailability of such service or utility until
such time as said service or utility is restored to the Premises and Tenant is
reasonably able to operate its business within the Premises.

Landlord agrees that it shall not discontinue supplying electrical energy to
Tenant until Tenant has had a reasonable opportunity (not less than ninety (90)
days) to connect to another supply source.

                                                                               8
<PAGE>

RIGHT OF FIRST OFFER

Should the remaining 6,000 square feet of space on the second level of the
building become vacant, the Landlord will provide the Tenant with a first right
of offer to lease such space thereof (space being referred to herein as the
"Offered Space"), on the following terms and conditions. Once the Landlord
notifies the Tenant in writing the Tenant has fifteen (15) days to exercise its
option.

The Offered Space shall be leased upon the same terms and conditions contained
in this Lease including rental rate for the remainder of the Lease Term,
determination of the Rent Commencement Date for the Offered Space and
construction of Landlord's Work therein, provided that the tenant allowance per
rentable square foot of the Offered Space to be provided by Landlord to Tenant
shall be prorated in proportion to the remainder of the Lease Term from and
after the Rent Commencement Date for the Offered Space and there is a minimum
five (5) years remaining until the termination of the Lease Term.

Should the space be required by the Tenant and there is less than five (5) years
remaining on the original lease and the Tenant requires the additional space the
Tenant would have to exercise their renewal option on the whole space.

TENANT IMPROVEMENT/DESIGN ALLOWANCE

Except for such work that can not be reasonably completed due to weather
conditions, Landlord, at Landlord's expense, shall complete the work outlined on
Exhibit A attached hereto "Landlord's Work" on or before March 1st, 2001.
Landlord shall also provide Tenant a $11.50 (Payable in Canadian Funds) per
rentable square foot allowance. The tenant allowance shall be paid to Tenant
within thirty (30) days after Tenant opens for business. In the event the
allowance has not been paid within that time, rent plus interest on the unpaid
amount from time to time outstanding at the Stipulated Rate shall abate to the
amount remaining unpaid. Landlord shall assume responsibility for ensuring that
all Landlord's Work is in compliance with all codes, legal requirements and
insurance requirements. Landlord shall be responsible and/or rectify any defects
in the core and shell of the building. Tenant shall have the right to hire its
own architectural/design firm for the interiors at Tenants expense. Tenant shall
also have the right to select the interior contractor to complete the interior
improvements. Landlord will not be entitled to a construction management fee.

ALTERATIONS

Tenant will have the right to repair, renovate, paint, decorate, re-carpet or do
construction with contractors of Tenant's choice as long as it does not
materially adversely affect the HVAC, structural or electrical systems of the
building without Landlord approval or payment of supervisory fees. As to all
other alterations, Landlord not to unreasonably withhold, condition or delay its
consent.

PRIOR OCCUPANCY

Tenant and its contractors, subcontractors, agents, etc. shall be permitted to
enter the Premises prior to the Lease Commencement Date with no obligation to
pay base rent for the purpose of

                                                                               9
<PAGE>

installing furniture, fixtures, equipment, and leasehold improvements including,
but not limited to, wall and floor coverings, computer equipment and telephones
provided such occupancy by Tenant does not interfere in Landlord's reasonable
judgment with the construction of Landlord's Work.

ENVIRONMENTAL CODE COMPLIANCE

Landlord will deliver the building with no asbestos, hazardous waste, PCB
transformers, or underground storage tanks on the property. Landlord will
deliver the building in compliance with all municipal and federal codes.

      A.    To the best of its knowledge the Landlord represents and warrants
            that all handling, transportation, storage, treatment and usage of
            asbestos, PCB transformers and any contaminant, pollutant, dangerous
            or potentially dangerous substance, noxious substance, toxic
            substance, hazardous waste or material, flammable or explosive
            substance, radioactive material, or any other waste, substance or
            material whatsoever, covered by or regulated under any statutes,
            laws, ordinances, codes, rules, regulations, orders, notices and
            directives now or hereafter in effect, made or issued by any
            municipal, provincial or federal government (collectively,
            "Hazardous Materials") that have occurred or will occur on the
            Shopping Center have been and shall throughout the Term be in
            compliance with all applicable federal, provincial and local laws,
            rules, regulations and ordinances. Landlord further represents and
            warrants that no leak, spill, discharge, emission or disposal of
            Hazardous Material has occurred or will occur during the Term on the
            Shopping Center, and all improvements located thereon, are and will
            continue during the Term to be free of Hazardous Materials. Landlord
            agrees to indemnify, defend and hold Tenant and its officers,
            partners, employees and agents harmless from any claims, judgments,
            damages, fines, penalties, costs, liabilities (including sums paid
            in settlement of claims) or loss including attorneys' fees through
            the trial, appellate and administrative levels, consultants' fees,
            and expert fees which arise during or after the Term in connection
            with the presence or suspected presence of Hazardous Materials in
            the soil, groundwater, or soil vapor on or under the Shopping
            Center, and/or in any improvements located thereon, unless such
            Hazardous Materials are present solely as the result of the
            negligence or willful misconduct of Tenant, its officers, partners,
            employees or agents. Without limiting the generality of the
            foregoing, this indemnification does specifically cover costs
            incurred in connection with any investigation of site conditions or
            any cleanup, remedial, removal or restoration work required by a
            federal, provincial or local governmental agency or political
            subdivision because of the presence or suspected presence of
            Hazardous Materials in the soil, groundwater or soil vapor on or
            under the Shopping Center, and any improvements located thereon,
            unless the Hazardous Materials are present solely as the result of
            the negligence or willful misconduct of Tenant, its officers,
            partners, agents or employees. Without limiting the generality of
            the foregoing, this indemnification shall also specifically cover
            costs in connection with:

                                                                              10
<PAGE>

      (1)   Hazardous Materials present or suspected to be present in the soil,
            ground water or soil vapor on or under the Shopping Center before
            the date hereof; or

      (2)   Hazardous Materials that migrate, flow, percolate, diffuse or in any
            way move onto or under the Shopping Center after the date hereof; or

      (3)   Hazardous Materials present on or under the Shopping Center as a
            result of any discharge, dumping or spilling (accidental or
            otherwise) onto the Shopping Center during or after the Term by any
            person or entity.

      (4)   Any violation of any federal, provincial or local law, ordinance or
            regulation now or hereafter enacted, related to environmental
            conditions on or under the Shopping Center, unless said violation is
            the result of the negligence or willful misconduct of Tenant, its
            officers, partners, agents or employees.

The foregoing representations, warranties and indemnifications shall survive any
assignment, transfer, expiration or termination of this Lease.

B.    Notwithstanding anything contained herein to the contrary, Landlord shall
      remove and remediate any Hazardous Materials in, on, under or about the
      Premises prior to the delivery date and the Rent Commencement Date shall
      be extended by one (1) day for each day of delay caused by Landlord which
      prevents Tenant from completing Tenant's Work or opening the Premises for
      business. In addition, in the event that any Hazardous Material is
      discovered by Tenant within the Premises after the date of this Lease,
      Tenant shall promptly notify Landlord, and shall consult with Landlord
      concerning appropriate procedures to be followed. If the Hazardous
      Material was not introduced into the Premises by Tenant or its employees,
      agents or contractors, then Landlord shall, to the extent required by law,
      at Landlord's sole cost and expense, perform any necessary remedial work.
      If the Hazardous Material was introduced into the Premises by Tenant or
      its employees, agents or contractors, then Tenant shall, to the extent
      required by law, at Tenant's sole cost and expense, perform any necessary
      remedial work. If the Hazardous Material was not introduced into the
      Premises by Tenant or its employees, agents or contractors, then during
      the period of the performance of such remedial work if Tenant is not, on a
      reasonable economic basis, able to, and does not, conduct its business at
      the Premises, then Tenant shall be allowed an abatement of all rent for
      the period commencing on the date that Tenant is not so able to, and does
      not so, conduct its business until Tenant's resumption of its business at
      the Premises.

C.    In the event Tenant should desire to make any alterations or improvements
      to the Premises and is forced to incur any identifiable charges or
      expenses arising as a result of hazardous Materials in or at the Premises,
      other than those Hazardous Materials brought onto the Premises by Tenant
      and which would not have otherwise been incurred with respect to such
      measures, Landlord shall be fully

                                                                              11
<PAGE>

      responsible for and shall reimburse Tenant for such expenses, and rent and
      all other charges payable by Tenant hereunder shall abate for a period
      equal to the period of the delay caused by the existence of said Hazardous
      Materials.

SECURITY

Tenant shall be responsible for installing separate security system as
determined by Tenant in its sole discretion to secure the Premises.

SIGNAGE

Tenant shall be entitled to exterior building signage, subject to review and
approval by the Landlord and governing authorities, Tenant shall pay for signage
and all construction permits, installation and maintenance of its signage.

NON-DISTURBANCE

Landlord shall, within thirty (30) days of execution of the Lease by both
parties, to provide Tenant with a Non-Disturbance Agreement in a form reasonably
acceptable to Tenant from any mortgage holders or lien holders of Landlord then
in existence. Landlord shall use its best efforts to provide Tenant with
Non-Disturbance Agreements in a form reasonably acceptable to Tenant from any
ground lessors, mortgage holders or lien holders of Landlord who come into
existence at any time after lease execution, during the initial term or the
renewal option periods, if exercised.

So long as Tenant is not in default hereunder beyond any applicable notice and
cure period provided herein, Landlord and Tenant agree that Tenant's covenant to
subordinate this Lease to any future mortgage or ground lease shall be
conditioned upon the mortgagee's or ground lessor's agreement to recognize
Tenant's rights and obligations under this Lease upon an attornment to such
mortgagee or ground lessor by Tenant.

PARKING

Upper level parking field to be for exclusive use of Tenant's employees.
Landlord shall guarantee Tenant's use of a minimum of 350 parking spaces. Said
spaces shall be located both in the rear of the building and along the south
side of the building which is closest to Tenant's proposed entrance. Site
lighting shall be a minimum of 2.50 foot candles average in the parking lot.
Landlord and Tenant approved plan showing the proposed configuration of Tenant's
spaces as specified in Schedule "A" outlined in Blue.

JANITORIAL

Tenant will be responsible for the interior cleaning of the Premises.

ANTENNAE/SATELLITE DISH

Tenant shall have the right to install equipment or antennae for data and
telecommunications on the roof at Tenant's expense.

                                                                              12
<PAGE>

TENANT ACCESS

Tenant shall have access to the building and its respective parking areas seven
(7) days per week, twenty-four (24) hours per day.

BROKER

The Tenant and Landlord each represent and warrant to the other that no broker
or leasing agent has been retained by representing party and the representing
party has no obligation to pay any brokerage or leasing fees. Landlord and
Tenant each indemnify and hold the other harmless from any cost, damage,
liability or claim for brokerage commission or finder's fee due or alleged to be
due as a result of such party's breach of the foregoing representation and
warranty.

ESTOPPEL CERTIFICATE

The Tenant and Landlord shall complete Estoppel Certificates as required by the
Landlord and Tenant or its Lenders, without charge and in a timely fashion.

LANDLORD RESPONSIBILITIES

Landlord will be responsible for the repair, maintenance and replacement of all
structural parts and common areas of the building, including underground
plumbing not exclusively serving the Premises, capital repairs to the parking
lot, exterior lighting, roof serving the Premises, and all HVAC system repairs
and replacements and pursuant to Section 11.09, maintenance thereof.

Tenant shall have the right of self-help to cure Landlord default or inability
to provide essential building services. Rent shall abate two (2) days after
written notice to the Landlord of any default if the use of the space has been
impaired until the problem is cured.

Landlord shall be responsible for the repair, replacement and maintenance of all
common areas.

Tenant shall maintain, at Tenant's expense the floor covering, interior
lighting, interior finish, plumbing fixtures, sprinkler systems and alarms
located within the Premises as well as electrical from the point of connection
to the Premises, storefront and plate glass, and other equipment or appliances
used for exclusive benefit of the Tenant (other than the HVAC system which shall
be the responsibility of Landlord as provided above).

DEFAULT BY LANDLORD

Each of the following events shall be a "Default by Landlord" under this Lease:

      A.    Landlord shall fail or refuse to pay any sum of money payable
            hereunder when due and the failure or refusal continues for ten (10)
            days after written notice thereof is given by Tenant to Landlord; or

      B.    Landlord shall fail or refuse to comply with any term, provision, or
            covenant of this Lease, other than provisions for the payment of
            money, and does not cure the failure or refusal within thirty (30)
            days after notice thereof is given by Tenant to

                                                                              13
<PAGE>

            Landlord (provided that if such default cannot reasonably be cured
            within thirty (30) days, then Landlord shall have an additional
            reasonable period of time within which to cure such default).

In the event of a Default by Landlord, in addition to all other rights and
remedies available to Tenant, Tenant may, at its option, cure the same on behalf
of Landlord, whereupon the cost of such curing shall be immediately due and
payable to Tenant from Landlord upon written demand therefor by Tenant. Failure
of Landlord to reimburse Tenant shall entitle Tenant to deduct the costs thereof
from the next subsequent installments of Rent and all other charges due
hereunder (plus interest thereon at the Stipulate Rate).

No reference to any specific right or remedy shall preclude Tenant from
exercising any other rights or from having any other remedy or from maintaining
any action to which it may otherwise be entitled at law or in equity. No failure
by Tenant to insist upon the strict performance of any agreement, term, covenant
or condition hereof, or to exercise any right or remedy consequent upon a breach
thereof, shall constitute a waiver of any such breach, agreement, terms covenant
or condition. No waiver by Tenant of any breach by Landlord under this Lease
shall affect this Lease in any way whatsoever.

Notwithstanding anything to the contrary contained herein, in the event the
Landlord's interest in the Shopping Center is insufficient to satisfy any
judgment that Tenant may have or obtain against Landlord, then in such event
Tenant shall have the right to abate payment of Rent and all other charges
payable by Tenant hereunder to the extent of such judgment.

ATTORNEY FEES

In the event the parties hereto become involved in any action or proceeding
arising out of or in connection with this Lease, the Premises or the Shopping
Center (including, without limitation, the enforcement or interpretation of this
Lease or either party's rights, duties or obligations hereunder), the prevailing
party shall, subject to the provisions of local law, be entitled to recover from
the non-prevailing party all reasonable expenses of attorney's fees, paralegal
fees and costs, expenses and disbursements incurred by the prevailing party in
such action or proceeding, without the necessity for a cross-action by the
prevailing party. Such reimbursement shall include all such expenses incurred
prior to and at any such trial or proceeding and at all levels of appeal and
post judgment proceedings.

LANDLORD WARRANTIES

Landlord agrees, at its sole cost and expense: (i) to comply with and execute
all present and future laws, ordinances, orders and regulations concerning
Landlord's construction, maintenance and operation of the Shopping Center; (ii)
to comply with and execute all present and future rules, regulations and
recommendations of the Board of Fire Underwriters concerning Landlord's
construction, maintenance and operation of the Shopping Center; and (iii) not to
commit any act or action which would prohibit Tenant from conducting its
business within the Premises under the Permitted Use. Landlord represents and
warrants to Tenant that Landlord is both the legal and beneficial owner of the
Shopping Center.

                                                                              14
<PAGE>

1.17  SCHEDULES

Schedules "A", "B", "C", "D" and "E" shall form part of this Lease.

1.18  CONFIDENTIALITY AGREEMENT

The Tenant and Landlord shall keep the terms and conditions of this Lease
Agreement confidential and will not disclose any of its contents without the
prior written consent of the Landlord or Tenant.

1.19  OPTION TO RENEW

The Tenant shall have the Option to Renew this Agreement for Two (2) five-year
options commencing upon the expiry of the initial Lease Term provided that the
Tenant is not in default of any terms of the Lease beyond any applicable notice
and cure period and that the Landlord has been served nine (9) months written
notice of the intent to renew by the Tenant. Rent for the Renewal Terms shall be
1st Renewal Option - Base Rental Rate of $13.50 p.s.f. (payable in Canadian
Funds), 2nd Renewal Option - Base Rental Rate of $14.50 p.s.f. (payable in
Canadian Funds). All other terms and conditions of the Lease shall apply save
rent, leasehold improvements, tenant allowance and options to renew.

1.20  RELOCATION CLAUSE

Intentionally Deleted.

      This Lease contains the covenants and conditions, which are set out in the
Standard Form of Lease as attached hereto.

      WITNESSETH that in consideration of the rents reserved, and the covenants
herein contained, the Landlord hereby agrees to lease to the Tenant, and the
Tenant hereby agrees to lease from the Landlord, the Premises identified on the
Cover Page of this Lease, according to the terms, conditions and covenants of
the Articles and Schedules hereinafter contained in Schedules "A", "B", "C", "D"
and "E".

EXECUTED at ______________, this _______ day of ______________, 2001.

SIGNED, SEALED AND DELIVERED                   PLAZACORP RETAIL PROPERTIES
in the presence of                             LTD.
                                               ("LANDLORD")

                                               ______________________________

                                               ______________________________

                                                                              15
<PAGE>

                                               SPIEGEL GROUP TELESERVICES-
                                               CANADA, INC.
                                               ("TENANT")

                                               ______________________________

                                               ______________________________

Executed solely for the purposes of Schedule "B", Section 21.14 hereinbelow:

                                               SPIEGEL, INC.
                                               ("GUARANTOR")

                                               ______________________________

                                               ______________________________

                                                                              16
<PAGE>

                                  SCHEDULE "B"

                             STANDARD FORM OF LEASE

2.    DEMISE AND TERM

2.01  DEMISE

      In consideration of the covenants and agreements hereinafter set out, the
      Landlord hereby leases the Leased Premises to the Tenant, to have and to
      hold during the Term upon the conditions contained in this Lease. The
      Tenants covenants to pay rent and to observe and perform all the covenants
      and provisions to be observed and performed by the Tenant pursuant to this
      Lease.

2.02  TERM

      The Tenant shall have and hold the Premises for the term of the Lease
      (herein called the "Term") from and including the period as shown on the
      Cover Page of this Lease.

2.03  COMMENCEMENT DATE

      The period commencing on the Commencement Date as shown on the Cover Page
      of this Lease.

3.    QUALITY AND USE OF THE PREMISES

3.01  POSSESSION AND USE OF PREMISES

      The Tenant will take possession of the Premises on or before the
      Commencement Date. The Tenant will not use or permit the Premises or any
      part thereof to be used for any purpose other than shown on the Cover Page
      of this Lease without the prior written consent of the Landlord not to be
      unreasonably withheld or delayed.

3.02  CONTINUED OCCUPANCY BY TENANT

      Intentionally Deleted.

3.03  EXAMINATION OF PREMISES

      The Tenant shall examine the Leased Premises before taking possession, and
      the opening for business by the Tenant shall be conclusive evidence
      against the Tenant that at that time the Leased Premises were in good
      order and satisfactory condition.

      Tenant's acceptance of the Premises shall be conditioned upon completion
      and correction of punch list items and latent defects. Landlord shall
      complete the items on the punch list with reasonable diligence, but in any
      event within thirty (30) days after the preparation of the punch list.
      Landlord agrees to repair any latent defects in the Premises of which it
      receives notice, so long as said notice is received within twelve (12)
      months of delivery

                                                                              17
<PAGE>

      of possession of the Premises to Tenant. All necessary utilities shall be
      stubbed to the Premises to the points of connection shown of the approved
      final drawings for Tenant's Work at Landlord's expense and on the date
      Landlord delivers possession of the Premises to Tenant, the Premises
      (including Landlord's Work therein) shall be free of Hazardous Materials
      (as hereinabove defined in Section 1.16 of the Cover Page). Tenant shall
      not be required to pay for any plan review charges, engineering review
      charges, engineering review charges, barricade fees, signage fees or other
      construction-related charges.

3.04  EARLY POSSESSION

      If the Tenant should take possession of the premises prior to the
      execution of this lease or prior to the Commencement Date then such
      possession or occupation shall be subject to the same covenants, terms and
      conditions as set out herein except that Tenant shall have no obligation
      to pay rent or other charges prior to the Rent Commencement date.

3.05  PROHIBITED USES

      (a)   Intentionally Deleted

      (b)   The Tenant will not, at any time during the Term, carry on or permit
            to be carried on, in the Premises or elsewhere in the Shopping
            Centre anything which is noxious and will not do or permit to be
            done anything whatsoever at any time during the Term upon the
            Premises or elsewhere in the Shopping Centre which would or cause or
            damage to the occupiers or owners of lands and premises adjoining or
            in the vicinity of the Premises. The Tenant will not permit any
            overloading of the floor of the Premises or elsewhere in the
            Shopping Centre. The Tenant will not cause any waste or damage to
            the Premises.

      (c)   Intentionally Deleted

3.06  SIGNS

      The Tenant shall comply with the Landlord as stipulated on the Cover Page
      of this Lease.

3.07  DELIVERIES AND LOADING

      The Tenant will permit deliveries to the Premises and loading and
      unloading to be done only through the designated loading facilities and
      only in accordance with such rules as the Landlord may from time to time
      reasonably prescribe.

3.08  NOT TO AFFECT LANDLORD'S INSURANCE

      The Tenant will not do or permit to be done, or omit to do, on the
      Premises or elsewhere in the Shopping Centre anything which will directly
      or indirectly cause the rate of insurance upon the Building or any part
      thereof or the Landlord's liability insurance to be increased. If any
      insurance rate is thereby increased the Tenant will pay to the Landlord
      the amount by which the insurance premiums are so increased. The Tenant
      will not store or permit to be stored upon the Premises, or elsewhere in
      the Shopping Centre, anything

                                                                              18
<PAGE>

      of a dangerous, inflammable or explosive nature or anything which would
      have the effect of increasing the Landlord's insurance costs or of leading
      to the cancellation of insurance. Landlord represents and warrants to
      Tenant that Tenant's use of the Premises as contemplated by this Lease
      will not cause an increase in the rate of Landlord's insurance or cause a
      cancellation thereof.

3.09  PREVENTING CANCELLATION

      Subject to Section 20.02 below, the Landlord, its employees or agents, may
      at any time enter upon the Premises to remove any article or remedy any
      condition, which in the opinion of the Landlord reasonably arrived at,
      would be likely to lead to cancellation of any policy of insurance Such
      entry by the Landlord will not be deemed to be a re-entry nor a trespass.

4.    RENT, TAXES AND OTHER CHARGES

4.01  NET LEASE

      The Tenant will punctually pay to the Landlord all Minimum Rent, and
      Additional Rent required to be paid by the Tenant pursuant to this Lease
      without any deduction, defalcation, abatement or set-off whatsoever except
      as otherwise provided herein, and the Tenant covenants with the Landlord
      accordingly.

4.02  PAYMENT

      The Tenant agrees and undertakes to pay to the Landlord: Minimum Rent, and
      Additional Rent as shown on the Cover Page of this Lease.

4.03  MINIMUM RENT

      As Minimum Rent, the Tenant will, throughout the Term of this Lease,
      commencing on the Commencement Date and thereafter, punctually pay to
      Landlord, in Canadian funds, without demand and without deduction,
      abatement, diminution, set-off or compensation except as otherwise
      provided herein an amount equal to that shown on the Cover Page of this
      Lease. Minimum Rent payable during a period which is less than twelve (12)
      months will be apportioned on a per diem basis. Minimum Rent shall be
      payable in equal consecutive monthly installments on the first day of each
      and every month in advance.

4.04  PREPAID RENT

      Intentionally Deleted.

4.05  PERCENTAGE RENT

      Intentionally Deleted.

                                                                              19
<PAGE>

4.06  REPORTS ON GROSS REVENUE

      Intentionally Deleted.

4.07  ADDITIONAL RENT

      (a)   Additional Rent

            The Tenant shall pay to the Landlord as Additional Rent, the
            Tenant's Share of Taxes determined under Section 4.09 of Schedule
            "B" to this Lease in addition to the Minimum Rent hereinbefore
            provided.

      (b)   Tax Costs Partial

            Intentionally Deleted.

4.08  RECOVERY OF ADDITIONAL RENT

      Additional Rent shall be recoverable by the Landlord from the Tenant in
      the same manner as Minimum Rent reserved and in arrears under the terms
      hereof.

4.09  TENANT'S TAXES AND OTHER CHARGES

      The Tenant will pay, as and when due to the authority to which same are
      owing:

      (i)   Tenant shall be responsible for its proportionate share of all real
            property taxes and general assessments (but not special assessments)
            (hereinafter, "Real Property Taxes") which may be levied or assessed
            against the Building by any lawful authority for each calendar year
            or portion thereof commencing on the Rent Commencement Date.
            Tenant's proportionate share shall be equal to the product obtained
            by multiplying such Real Property Taxes and Landlord's expenses in
            obtaining or attempting to obtain any refund or reduction thereof,
            by a fraction, the numerator of which shall be the number of square
            feet of leasable floor area in the Premises and the denominator of
            which shall be the number of square feet of leasable floor area in
            the Building including the Premises (whether leased or not) as of
            the day of assessment but in no event shall Tenant's proportionate
            share exceed 40%. Said Real Property Taxes are to be prorated for
            any partial year. Tenant's proportionate share of estimated Real
            Property Taxes for the first Lease Year is $1.00 per square foot per
            annum of the rentable area of the Premises.

            Tenant's proportionate share of all Real Property Taxes during the
            Term hereof shall be paid in equal monthly installments as
            reasonably estimated by Landlord (which estimate shall not exceed
            the previous year's actual Real Property Taxes plus any subsequently
            enacted taxes which will be assessed during the then current
            calendar year), together with the monthly installments of Minimum
            Rent payable by Tenant hereunder. Upon receipt of tax bill and
            assessment bill attributed to any calendar year during the Term
            hereof, Landlord shall furnish Tenant with a written statement of
            the actual amount of Tenant's proportionate

                                                                              20
<PAGE>

            share of the Real Property Taxes for such year or part thereof
            together with a copy of such tax bills, and Tenant shall pay to
            Landlord any shortfall between the estimated installments paid by
            Tenant with respect to Real Property Taxes for such calendar year
            and such actual amount within thirty (30) days of Tenant's receipt
            of such statement from Landlord. In the event Tenant's estimated
            payments with respect to Real Property Taxes for any calendar year
            exceeds the actual amount thereof, such excess shall be credited
            against future installments thereof due from Tenant (or if after the
            end of the Term, promptly refunded to Tenant). A copy of a tax bill
            or assessment bill submitted by Landlord to Tenant shall at all
            times be sufficient evidence of the amount of Real Property Taxes
            levied or assessed against the property to which such bill relates.

      (ii)  There shall be excluded from the tax bill to which Tenant
            contributes, for the purposes of computing Tenant's proportionate
            share of real estate taxes, any increase in real estate taxes caused
            by a "change of ownership," as defined in the law under which
            reassessment or tax increase results from a transfer of all of a
            portion of Landlord's interest in the Shopping Center. Additionally,
            nothing contained herein shall be construed to include as a tax or
            assessment which shall be the basis of real estate taxes, (i) any
            inheritance, estate, succession, transfer, gift, franchise,
            corporation, income or profit tax or capital levy that is or may be
            imposed upon Landlord, (ii) any "rollback taxes" or other
            retroactive taxes based on a change in use of the property of which
            the Premises is a part or (iii) any taxes or assessments which
            constitute interest and/or principal payments with respect to any
            bond or other or quasi-governmental agency, entity or authority to
            acquire, finance, refinance, construct, modify, improve and/or
            replace any land and/or improvements included within or primarily
            benefiting the Shopping Center. Taxes shall also not include
            interest and penalties for late payment, unless Tenant shall fail to
            remit on a timely basis its required tax payments and said interest
            and penalties result therefrom. Taxes shall be regarded in
            "substitution" of, or for, taxes due hereunder only if the
            substitution tax or such imposition is imposed solely on real estate
            owners as a class or solely on commercial real property owners as a
            class, and then, only to the extent to which the substitution tax
            would be payable if the Shopping Center were the Landlord's sole
            income.

            With respect to any assessments which may be levied as part of the
            Taxes, evidenced by bonds or paid in annual installments, or which
            may benefit the Shopping Center for a period of more than one (1)
            year when the assessment is paid in a shorter period than the period
            of benefit (in which case the total amount paid divided by the
            number of years of benefit shall be deemed the annual installment
            amount), only the amount of such installment (with per diem
            proration for any partial fiscal year), together with statutory
            interest thereon, shall be included in the computation of Taxes for
            the fiscal year in question.

      (iii) All charges, rates and assessments imposed, assessed or levied by
            any lawful authority during the Term in respect of electricity,
            light, heat, gas, power, water, sewer, garbage removal, telephone
            and utilities of whatsoever nature or kind

                                                                              21
<PAGE>

            (including works and services in connection therewith) used in or
            supplied to the Premises.

      Upon request by the Landlord, the Tenant will deliver promptly to the
      Landlord receipts for payment of all charges payable by the Tenant
      pursuant to this Article 4.09 which were due and payable up to one (1)
      month prior to such request and will furnish to the Landlord, upon
      request, evidence of payments before the 31st day of January in each year
      covering payments for the preceding year.

4.10  IRREGULAR PERIOD

      If, for any reason, it becomes necessary to calculate Minimum Rent, or
      Additional Rent for irregular periods an appropriate pro rata adjustment
      will be made on a daily basis in order to compute such rent for such
      irregular period.

4.11  DISPUTE AS TO COSTS

      In the event of any dispute as to the amount of any monies to be paid by
      the Tenant pursuant to this Lease, the certificate of an independent
      chartered accountant mutually appointed by the Landlord, and Tenant
      determining such amount, will be final and binding on the Landlord and
      Tenant.

4.12  INTEREST ON AMOUNTS IN ARREARS

      Whenever any Minimum Rent, or Additional Rent (including interest thereof,
      if any) payable hereunder by the Tenant to the Landlord is in arrears for
      ten (10) days after written notice, the same shall bear interest as of the
      due date to the date of complete payment at the Stipulated Rate of
      Interest and such interest shall be due and payable on demand as
      Additional Rent reserved hereunder.

4.13  POST-DATED CHEQUES

      Intentionally Deleted.

5.    PREMISES

      The Premises, the approximate boundaries of which are outlined on Schedule
      "A", bear the unit number as shown on the cover page of this Lease. The
      Premises comprise an area ("Area of the Premises") of approximately the
      square footage as shown on the Cover Page of this Lease.

      Notwithstanding the approximate measurements referred to above, the Area
      of the Premises shall be measured by Landlord according to the criteria
      stipulated hereinbelow. To determine the Area of the Premises, the
      Premises shall be measured from (a) the exterior face of all interior
      walls, doors and windows separating the Premises from any common services
      or facilities, including without limitation, malls, courts, corridors or
      storage areas, and (b) the center line of all interior walls separating
      the Premises from

                                                                              22
<PAGE>

      adjoining leasable premises. The Area shall include all interior space
      whether or not occupied by projections, structures or columns, structural
      or non-structural.

6.    ALTERATIONS, ADDITIONS AND CHANGES OF LOCATIONS

      Intentionally Deleted.

7.    INSURANCE

7.01  TENANT'S INSURANCE

      The Tenant will purchase and keep in force throughout the term:

      (a)   all risk insurance with extended coverage endorsement (including
            sprinkler leakage) covering all leasehold improvements made to or
            installed in the Premises by or on behalf of the Tenant in an amount
            equal to the full replacement value;

      (b)   all risk insurance with extended coverage endorsement (including
            sprinkler leakage) covering all the contents of the Premises whether
            owned by the Tenant or for which the Tenant is responsible in an
            amount at least equal to the actual cash value;

      (c)   comprehensive general liability insurance (including without
            limitation, Tenant's fire, legal liability and contractual liability
            to cover the responsibilities assumed under Article 10.02 hereof)
            with a cross-liability clause and otherwise in amounts (not to
            exceed $2,000,000) and on terms otherwise mutually acceptable to the
            Landlord and the Tenant;

      (d)   plate glass coverage with respect to the Premises in amounts
            acceptable to the Landlord.

      Tenant may maintain the required insurance in the form of a blanket or
      master policy covering other locations of Tenant and/or its affiliates in
      addition to the Premises; provided, however, that Tenant shall provide
      Landlord with a certificate of insurance specifically naming the location
      of the Premises and naming Landlord as required in this section, the
      limits of which coverage are to be in the amounts set forth in this
      section.

      Tenant may, in lieu of carrying the insurance coverage of the items
      contained in this section, self-insured said items (specifically including
      plate glass), so long as Tenant agrees not to hold Landlord liable for any
      losses resulting to such property.

7.02  POLICIES

      The Tenant's policies shall be upon terms and in amounts, satisfactory to
      the Landlord, acting reasonably. The Tenant will furnish to the Landlord
      copies of insurance certificates, and will provide written notice of the
      continuation of such policies not less than ten (10) days prior to their
      respective expiry dates. The Tenant will pay the premium for each policy.
      If the Tenant fails to purchase or keep in force such insurance

                                                                              23
<PAGE>

      the Landlord may but shall not be obligated to effect such insurance, the
      cost thereof being recoverable from the Tenant forthwith on demand as
      Additional Rent hereunder.

7.03  LANDLORD AS INSURED

      The Tenant shall cause each of its policies to contain an undertaking by
      the insurer(s) to notify the Landlord at least thirty (30) days prior to
      cancellation or any other change material to the Landlord's interest. The
      liability policy will include the Landlord as an additional named insured
      with a cross-liability clause.

7.04  SUBROGATION

      The Landlord and Tenant shall each cause any insurance policy obtained by
      it pursuant to this Lease to contain a waiver of subrogation clause in
      favour of the Landlord or Tenant, as the case may be.

7.05  LANDLORD TO INSURE

      The Landlord throughout the Term shall carry insurance against fire and
      other perils as prescribed in the definition of Common Costs for the full
      replacement cost of the Building and comprehensive general liability
      insurance in amount not less than $2,000,000.

8.    ASSIGNING, SUB-LETTING AND ENCUMBERING

8.01  LANDLORD'S CONSENT

      Tenant shall have the ability to assign its lease in its entirety, or
      sublease all or any part of the Premises without the consent of the
      Landlord to (i) any parent, subsidiary or affiliate of Tenant (ii) any
      entity resulting from a merger of consolidation with Tenant or (iii) any
      entity succeeding to a substantive portion of the business and assets of
      Tenant. For any other assignment or sublease, Tenant shall have the right,
      subject to Landlord's consent, which shall not be unreasonably withheld or
      delayed, to sublease or assign any portion of the Premises, and any
      portion of any space subsequently leased, at any time during the initial
      term and renewal option periods. Tenant shall retain one hundred percent
      (100%) of any profits received. Tenant is to remain primarily liable.

8.02  REQUEST FOR CONSENT

      If the Tenant requests the Landlord's consent to any assignment or
      subletting of the whole or any part of the Premises, such request shall be
      accompanied by the name and address for the proposed assignee or subtenant
      together with such information as to the nature of the business and
      financial responsibility and standing of such proposed assignee or
      subtenant as the Landlord may reasonably require in order to make a
      reasoned determination as to the acceptability of the assignee or
      subtenant. In addition, the Tenant shall provide the Landlord with a copy
      of the proposed assignment or sublease. Landlord shall, not later than
      twenty-one (21) days after receipt of Tenant's request, either consent

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<PAGE>

      to the proposed assignment or subletting or shall refuse such consent
      (such consent not to be unreasonably withheld).

8.03  ASSIGNMENT OR SUBLEASE FORM

      No assignment or subletting consented to shall be valid unless prior to
      the date of occupancy by the proposed assignee or subtenant a fully
      executed duplicate original of such assignment or sublease in form
      reasonably acceptable and satisfactory to the Landlord is delivered to the
      Landlord.

8.04  CHANGE IN OWNERSHIP OR CONTROL

      Intentionally Deleted.

8.05  TENANT NOT TO ENCUMBER INTEREST IN LEASE

      The Tenant shall not without the Landlord's consent in writing mortgage,
      hypothecate, pledge or otherwise encumber its interest in this Lease or in
      the Premises.

8.06  DISPOSITION OF LANDS AND PREMISES

      Any sale, lease, mortgage or other disposition of the lands and premises
      of which the Premises form a part made or given by the Landlord shall, to
      the extent that a purchaser, lessee or mortgagee assumes the obligations
      of the Landlord hereunder shall, without any further written agreement,
      relieve the Landlord from further liability thereafter arising under this
      Lease.

9.    LIABILITY AND INDEMNIFICATION

9.01  NON-LIABILITY OF LANDLORD

      Except for the negligence and wilful misconduct of the Landlord, its
      agents, employees or contractors, the Tenant agrees that the Landlord will
      not be liable or responsible in any way for any personal injury that may
      be sustained by the Tenant or any employee or customer of the Tenant, or
      of any other person who may be upon the Premises, or for any loss of or
      damage or injury to, property belonging to or in the possession of the
      Tenant or any employee or customer of the Tenant or any other person, and
      without limiting the generality of the foregoing, the Landlord will not be
      liable or responsible while in the premises in any way for any injury,
      loss or damage to person or property caused by smoke, steam, water, ice,
      rain, snow or fumes which may leak, issue or flow into, through or from
      the Premises or from the water sprinkler, drainage or smoke pipes or
      plumbing equipment therein or from any other place or quarter or caused by
      or attributable to the condition or arrangement of any electrical or other
      wiring or the air conditioning equipment, or for any matter or thing or
      whatsoever nature or kind arising from the Tenant's use and occupation of
      the Premises or otherwise except to the extent resulting from Landlord's
      breach of this Lease or the negligence or wilful misconduct of the
      Landlord, its agents, employees or contractors.

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<PAGE>

9.02  INDEMNIFICATION

      Except to the extent due to the negligence and wilful misconduct of the
      Landlord, its agents, employees or contractors, the Tenant does hereby
      indemnify and save harmless the Landlord from and against any and all
      liabilities, damages, costs, expenses, causes of actions, actions, claims,
      suits and judgments (but excluding consequential damages and/or lost
      profits) which the Landlord may incur or suffer by reason of or in
      connection with or arising from:

      (a)   any breach, violation or non-performance by the Tenant or any
            covenant, condition or agreement set forth in this Lease;

      (b)   any damage to property of the Tenant, any subtenant, licensee, and
            all persons claiming through or under the Tenant or any subtenant or
            license or any of them, or damage to any other property howsoever
            occasioned by the condition, use, occupation or maintenance of the
            Premises;

      (c)   any injury to any person, including death resulting at any time
            therefrom, occurring in or about the Premises;

      (d)   any wrongful act or neglect of the Tenant, in and about the
            Premises;

      Except to the extent due to the negligence and wilful misconduct of the
      Tenant, its agents, employees or contractors, the Landlord does hereby
      indemnify and save harmless the Tenant from and against any and all
      liabilities, damages, costs, expenses, causes of action, actions, claims,
      suits and judgments (but excluding consequential damages and/or lost
      profits) which the Tenant may incur or suffer by reason of or in
      connection with or arising from:

      (a)   any breach, violation or non-performance by the Landlord or any
            covenant, condition or agreement set forth in this Lease;

      (b)   any damage to property of the Landlord, any tenant, licensee, and
            all persons claiming through or under the Landlord or any of them,
            or damage to any other property howsoever occasioned by the
            condition, use, occupation or maintenance of the Common Areas;

      (c)   any injury to any person, including death resulting at any time
            therefrom, occurring in or about the Common Areas;

      (d)   any wrongful act or neglect of the Landlord, in and about the
            Premises or the Shopping Center.

9.03  SURVIVAL OF INDEMNIFICATION

      Such Indemnification shall survive any termination of this Lease, anything
      in this Lease to the contrary notwithstanding.

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<PAGE>

10.   PERFORMANCE OF TENANT'S COVENANTS, DEFAULT AND BANKRUPTCY

10.01 LANDLORD MAY PERFORM COVENANTS

      If the Tenant makes default in any of its covenants and agreements herein
      beyond applicable notice and cure period, then the Landlord, without
      limiting any other remedy which it may have, will have the right beyond
      applicable and cure period to remedy any such default and for such purpose
      may at any time enter upon the Premises. No entry for such purpose will be
      deemed to cause a forfeiture or termination of this Lease. In order to
      cure such default, the Landlord may do all things reasonably necessary to
      cure the default and such things as may be incidental thereto, including,
      without limitation, the right to make repairs and to expend monies. The
      Tenant will reimburse the Landlord forthwith upon demand as Additional
      Rent hereunder the aggregate of all reasonable costs, charges and expenses
      incurred by the Landlord to remedying any such default. The Landlord will
      be under no obligation to remedy any default of the Tenant, and will not
      incur any liability to the Tenant for any action or omission in the course
      of its remedying or attempting to remedy any such default unless such act
      amounts to intentional misconduct or negligence on the part of the
      Landlord.

10.02 RIGHTS OF TERMINATION

      If and whenever:

      (a)   the Tenant shall fail to pay when due the Minimum Rent, or
            Additional Rent, or any other sum required to be paid by the Tenant
            hereunder, if such failure shall continue for 10 consecutive days
            after notice to the Tenant of such failure;

      (b)   the Tenant shall fail to observe, perform and keep any one or more
            of the covenants, provisions or stipulations to be observed
            performed or kept by the Tenant hereunder, and if such failure shall
            continue for a period of thirty (30) consecutive days after notice
            to the Tenant of such failure plus such additional time as may be
            reasonably required to cure such failure;

      (c)   the Term hereby granted or any of the goods or chattels on the
            premises are at any time repossessed, seized, or taken in execution
            or attachment by any creditor of the Tenant;

      (d)   a Writ of Execution or a judgment has been issued against the goods
            or chattels of the Tenant;

      (e)   the Tenant makes an assignment for the benefit of creditors or
            becoming bankrupt or insolvent takes the benefit of, or becomes
            subject to any statutes that may be in force relating to bankrupt or
            insolvent debtors;

      (f)   any certificate or order is made or granted for the winding-up or
            dissolution of the Tenant, voluntarily or otherwise;

                                                                              27
<PAGE>

      (g)   if the Premises at any time during the Term become vacant or remain
            unoccupied for five (5) days or more in consequence of the removal
            of the Tenant by Legal process for non-payment of rent, breach of
            covenant or any other cause;

      (h)   Intentionally Deleted.

      (i)   Intentionally Deleted.

      (j)   Intentionally Deleted.

      (k)   then in any of the said cases, at the option of the Landlord the
            Term shall become forfeited and void and the Landlord may upon
            notice and with legal process forthwith re-enter the Premises or any
            part thereof in the name of the whole and repossess and enjoy the
            same as of its former estate, anything contained in any statute or
            law to the contrary notwithstanding. Such forfeiture shall be wholly
            without prejudice to the right of the Landlord to recover arrears of
            rent or damages for any antecedent breach of the Tenant's covenants,
            obligations or agreements under this Lease, and provided that
            notwithstanding any such forfeiture the Landlord may subsequently
            recover from the Tenant damages for loss of rent suffered by reason
            of this Lease having been rendered forfeited and void as aforesaid.
            No such re-entry or taking possession of the Premises by the
            Landlord shall be construed as an election on the part of the
            Landlord to terminate this Lease unless at the time of or subsequent
            to such re-entry or taking up possession written notice of such
            intention has been given to the Tenant or such termination is
            decreed by a court of competent jurisdiction.

10.03 WAIVER WITH RESPECT TO RE-ENTRY

      If the Landlord does not exercise its option under Section 10.02 to
      terminate this Lease it may in addition to any remedies available to the
      Landlord herein, or at law or in equity, from time to time to re-enter the
      Premises without terminating this Lease, make such alterations and repairs
      as may be necessary in order to relet the Premises as agent of the Tenant
      for such period or periods (which may extend beyond the Term) and at such
      rentals and upon such terms and conditions as the Landlord in its sole
      discretion may deem advisable. All reasonable expenses the Landlord may
      incur in reletting the Premises, including legal fees and disbursements
      and real estate fees and commissions and expenses of preparing the
      Premises for reletting shall be paid by the Tenant to the Landlord
      forthwith on demand. Upon such reletting, rent received by the Landlord
      shall be applied firstly to the payment of said reasonable expenses,
      secondly to the payment of any indebtedness (other than Gross Rent) due
      from the Tenant to the Landlord, and thirdly to the payment of Gross Rent.
      The residue, if any, shall be held by the Landlord and applied in payment
      of future rent as the same may become due and payable.

      Notwithstanding anything to the contrary set forth in the Lease or any
      default damages that may be permitted or authorized by applicable law, in
      no event shall damages recoverable from Tenant as a consequence of
      Tenant's default under this Lease include any of the following:

                                                                              28
<PAGE>

      (i)   consequential or punitive damages;

      (ii)  loss of business or profits by Landlord or any other tenant or
            occupant of the Shopping Center;

      (iii) diminution of the value of the Premises or the Shopping Center (or
            any portion thereof);

      (iv)  costs incurred or allowances granted by Landlord for the demolition,
            alteration, remodeling or build-out of the Premises to make them
            suitable for use by any subsequent tenant or occupant thereof; or

      (v)   leasing commissions and/or brokerage fees to the extent allocable to
            any period after the expiration date of the original Term of this
            Lease (as such Term may be extended by any renewals or extensions
            either exercised by Tenant or otherwise agreed to by Landlord and
            Tenant prior to occurrence of Tenant's default).

      If rentals received from such reletting during any month are less than
      that to be paid during that month by the Tenant hereunder, the Tenant
      shall forthwith pay any such deficiencies to the Landlord. No re-entry or
      taking possession of the premises by the Landlord shall be construed as an
      election on its part to terminate this Lease unless a written notice of
      such intention has been given to the Tenant or unless the termination
      thereof be decreed by a Court of competent jurisdiction. Notwithstanding
      any such re-letting without termination, the Landlord may at any time
      thereafter elect to terminate this Lease by reason of such previous event.
      Should the Landlord at any time terminate this Lease by reason of any such
      event, in addition to any other remedies it may have, it may recover from
      the Tenant all damages it may incur with respect thereto including the
      cost of recovering the Premises and the worth at the time of such
      termination of the excess, if any, of the amount of Gross Rent, for the
      remainder of the Term over the then reasonable rental value of the
      Premises for the remainder of the Term, all of which rent shall be
      immediately due and payable from the Tenant to the Landlord. In
      determining the rent which would be payable under this Lease by the Tenant
      subsequent to default the Rent for each year of the unexpired portion of
      the Term shall be equal to the average Rent paid by the Tenant from the
      commencement of the term to the event of default, or during the
      immediately preceding three (3) full Lease Years, whichever period is
      shorter.

      Landlord shall use reasonable efforts to relet the premises, it being
      understood that such efforts shall consist of the same efforts as Landlord
      makes with respect to other vacant space in the Shopping Center and that
      Landlord shall not be required to prefer the reletting of the Premises
      over any other vacant or empty space in the Shopping Center or to accept a
      tenant for any use or purpose other than a use or purpose acceptable to
      Landlord.

10.04 WAIVER OF BENEFIT OF LEGISLATION AND SEIZURE

      Intentionally Deleted.

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<PAGE>

10.05 REMEDIES OF LANDLORD AND CUMULATIVE

      The remedies of the Landlord under this Lease are cumulative and are in
      addition to any remedies of the Landlord at law or in equity. No remedy
      will be deemed to be exclusive and the Landlord may from time to time have
      recourse to one or more of all the available remedies specified herein or
      at law in equity.

10.06 BANKRUPTCY

      In the event of default pursuant to section 10.02(e) then and in any such
      event the then current month's Gross Rent and the next ensuring three (3)
      months' Gross Rent shall become due and be payable.

10.07 LANDLORD'S RIGHTS ON RE-ENTRY

      The Tenant agrees that in the event the Landlord shall be entitled to
      re-enter and re-take possession of the Premises it may use such force as
      it deems necessary for that purpose and for gaining admittance to the
      Premises without being liable in respect thereof for any loss or damage
      occasioned thereby. The Tenant hereby expressly releases the Landlord from
      all action, proceedings, claims and demands whatsoever for or in respect
      of any such forcible entry, or any loss or damage that may be sustained by
      the Tenant in respect thereto.

11.   REPAIRS, MAINTENANCE AND ALTERATIONS

11.01 REPAIR AND MAINTENANCE

      Subject to Landlord's repaid and maintenance obligations as set forth
      elsewhere in this Lease, the Tenant, throughout the Term, at its own
      expense, will repair, maintain and keep the Premises and all improvements,
      appurtenances and equipment therein and thereon (including, without
      limitation, all electrical, sprinkler and plumbing fixtures and equipment,
      and windows) in good repair and condition, as is fitting for a first class
      Shopping Centre development. Such repair and maintenance shall not include
      repairs of a structural nature save, and except for Tenant's fixtures and
      improvements, which require repairs, which could be considered of a
      structural nature. And such repairs and maintenance shall exclude such
      standard of repair and maintenance of damage by fire and other risks
      against which the Landlord is insured and reasonable wear and tear which
      is not inconsistent with maintenance in good order and condition of the
      Premises generally, and repairs for which the Landlord is responsible
      under this Lease.

11.02 INSPECTION AND EMERGENCIES

      Subject to Section 20.02, the Landlord's representatives may enter upon
      the Premises at all reasonable times and during any emergency to inspect
      the state of repair and maintenance.

                                                                              30
<PAGE>

11.03 TENANT'S REPAIRS BY DESIGNATED TRADESPEOPLE

      The Tenant, when necessary and whether upon receipt of notice from the
      Landlord or not, will effect and pay for such maintenance and repairs
      which it is responsible.

11.04 REPAIR ACCORDING TO NOTICE

      Without restricting the generality for Article 11.01 hereof, the Tenant,
      promptly upon notice by the Landlord, will make and do all repairs and
      maintenance for which it is responsible. If the Tenant fails to repair or
      maintain within what the Landlord considers to be a reasonable time, then
      the Landlord may cause such repairs and maintenance to be undertaken and
      may cause its employees and agents to enter on the Premises for such
      purpose. Should the Landlord undertake any repairs or maintenance, then
      the Tenant will pay to the Landlord the cost of such work or monies
      expended and shall until paid to the Landlord bear interest at the
      Stipulated Rate of Interest in Section 4.12 and be recoverable as
      Additional Rent reserved hereunder.

11.05 ALTERATIONS

      As shown on the Cover Page of this Lease under Special Clause
      "Alterations".

      Notwithstanding any other provision hereof, any such installation,
      alteration, addition or partition must be constructed in accordance with
      the National Building Code from time to time in effect. In effecting any
      alteration of addition hereunder, the provisions of Article 11.02 apply
      mutatis mutandis in regard to approval of contractors, subcontractors or
      tradespeople.

11.06 CONSTRUCTION OF ALTERATION

      As per shown on the Cover Page of this Lease under Special Clause
      "Alterations".

11.07 PAYMENT FOR WORK

      The Tenant will pay for expenses incurred for labor and services performed
      upon, and materials supplied to the Premises for which it is responsible
      as same are due.

11.08 LANDLORD'S REPAIRS

      As shown on the Cover Page of this Lease under Special Clause "Landlord
      Responsibilities".

11.09 MAINTENANCE CONTRACT

      The Landlord pledges to sign an annual maintenance contract, for the HVAC
      system serving the Premises, with a recognized company agreed upon by the
      Landlord and Tenant. The contract shall be an all inclusive maintenance
      contract for ten (10) years at a cost of $19,920.00 plus HST (Canadian
      Funds). The Tenant shall reimburse the Landlord $85.10 for years 1-5 and
      $105.80 for years 6-10 per month applicable taxes included

                                                                              31
<PAGE>

      (Payable in Canadian Funds), such monthly reimbursements payable together
      with the monthly installments of Minimum Rent payable by Tenant hereunder.

12.   COMPLIANCE WITH LAWS; LIENS AND PRIVILEGES

12.01 COMPLIANCE WITH LAWS

      The Tenant, during the Term and at its own expense, will promptly comply,
      and will cause its employees, agents, licensees, invitees and other
      persons within in the Premises, to comply with the requirements of every
      applicable law, rule, by-law, regulations, order, direction ordinance and
      standard of every competent federal, provincial, municipal, regional and
      other statutory authority in force during the Term and concerning or
      affecting the condition, maintenance, use and occupation of the Premises
      and all improvements, appurtenances, equipment, machinery and other
      facilities from time to time therein, thereon or used in connection
      therewith and the making of any repairs, replacements and alterations to
      the Premises and with every applicable regulation, order and requirement
      of the Canadian Fire Underwriters' Association or any successor body
      having similar functions and of any liability or fire insurance company by
      which the Landlord and Tenant or either of them may be insured at any time
      during the Term, and in so doing, the Tenant, subject to Article 7 hereof,
      will make any necessary alterations, repairs, additions or deletions in,
      on or to the Premises, improvements or appurtenances or any part or parts
      thereof, and any equipment, machinery or other facilities in, on, upon,
      used in connection with or appurtenant to the Premises or any part
      thereof. Notwithstanding the foregoing, Landlord shall comply with the
      foregoing and shall be obligated to make all necessary alterations,
      repairs, additions or deletions in, on or to the Common Areas and any
      portion of the Premises which Landlord is required to maintain
      improvements or appurtenances or any part or parts thereof, and any
      equipment, machinery or other facilities in, on, upon, used in connection
      with or appurtenant to the Common Areas and any portion of the Premises
      which Landlord is required to maintain or any part thereof.

12.02 LIENS OR PRIVILEGES

      The Tenant will not suffer or permit any lien or privilege to be
      registered against title to the Premises or Lands by reason of work,
      services or materials supplied or claimed to have been supplied to the
      Tenant or to anyone holding any interest through or under the Tenant
      during the Term. If any such lien or privilege is registered, the Tenant
      will do all things necessary to obtain and register a discharge, insure or
      bond over forthwith after the lien or privilege has come to the notice of
      the Tenant. If the Tenant desires to contest in good faith the amount or
      validity of any lien or privilege and has so notified the Landlord, and if
      the Tenant has paid into a court of competent jurisdiction to the credit
      of any action or adequately insured or bonded the claim, the amount
      claimed and costs, then the Tenant may contest the claim with due
      diligence. The Landlord may, but will not be obliged to, discharge any
      lien or privilege registered at any time if in the Landlord's judgment the
      Premises of the Tenant's interest therein becomes liable to any forfeiture
      of sale or is otherwise in jeopardy, and any amount paid by the Landlord
      in so doing, together with all reasonable costs and expenses of the
      Landlord, will be paid to the

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<PAGE>

      Landlord by the Tenant on demand and if not so paid, shall be recoverable
      as rent in arrears. Nothing herein contained will be deemed to authorize
      the Tenant, or imply any consent or agreement on the part of the Landlord,
      to subject the Landlord's estate and interest in the Premises to any lien
      or privilege.

13.   COMMON AREA AND PARKING

13.01 CUSTOMER PARKING

      The customers of the Tenant shall be entitled during normal business hours
      of the Shopping Centre only, to the use of the customer parking areas
      forming part of the Lands, in common with the customers of other tenants
      of the Shopping Centre.

13.02 TENANT'S USE OF PARKING AREAS

      (a)   As shown on the Cover Page of this Lease under Special Clause
            "Parking";

      (b)   Should the Tenant, its employees, suppliers and other persons, not
            customers, having business with the Tenant park vehicles in areas
            not allocated for that purpose, the Landlord shall have the right to
            remove the said trespassing vehicles and the Tenant hereby
            indemnifies and saves harmless the Landlord from any and all damages
            arising therefrom and the Tenant will pay the cost of such removal
            as Additional Rent hereunder.

13.03 NUISANCE

      The Tenant will not store anything in or do anything, which would be
      likely to injure the Common Area.

13.04 USE OF COMMON AREA AND RELOCATION

      Subject to this Lease and to such other reasonable rules and regulations
      as the Landlord may make pertaining to the use of the Common Area, the
      Tenant will have for itself and its licensees and invitees, the
      non-exclusive right to use the Common Area in common with other entitled
      thereto for their proper and intended purposes during normal business
      hours. The Tenant acknowledges that the Common Area is subject to the
      exclusive control and management of the Landlord and that the Landlord
      shall be entitled, from time to time, to alter the Common Area and to make
      changes and additions thereto; and in particular without restricting the
      generality of the foregoing may change the area, level, location,
      arrangement, and use of the Common Area, construct other buildings,
      structures or improvements upon the Common Area and/or make alterations or
      additions thereto, subtractions therefrom or rearrangements thereof and
      build additional stories or any building or buildings in the Shopping
      Centre and buildings adjoining the same, construct double deck or elevated
      or underground parking facilities or both, relocate or rearrange the
      various building or parking areas and all other Common Area.

      Landlord shall not cause or permit any change, alteration or use of the
      Shopping Center (including any parking areas) in any manner which would
      temporarily or permanently

                                                                              33
<PAGE>

      (i) alter the dimensions, location, exterior appearance or storefront of
      the Premises or adversely affect the use, operation or conduct of Tenant's
      business being conducted therein; (ii) adversely affect the accessibility
      or visibility of the Premises; or (iii) reduce the existing parking
      facilities of the Shopping Center or Tenant's designated parking area.

14.   SURRENDER OF PREMISES AND REMOVAL OF FIXTURES

14.01 SURRENDER

      Upon the expiration or earlier termination of this Lease and the Term and
      any period of overholding, the Tenant will surrender to the Landlord
      possession of the Premises and fixtures thereon, all of which will become
      the property of the Landlord without any claim by or compensation to the
      Tenant, all in good order, condition and repair in accordance with the
      Tenant's obligation to repair and maintain, subject to ordinary wear and
      tear and damage due to casualty of condemnation, and, free and clear of
      all encumbrances and all claims of the Tenant or of any person claiming by
      or through or under the Tenant, and all the rights of the Tenant under
      this Lease will terminate (but the Tenant, notwithstanding such
      termination, will remain and be liable to the Landlord for any loss,
      damage, expenses or costs suffered or incurred by the Landlord by reason
      of any default by the Tenant to the extent provided herein).

14.02 DOCUMENT OF SURRENDER

      If this Lease and the Term are terminated for any reason, the Tenant will
      execute and deliver to the Landlord any and all documents reasonably
      required to surrender this Lease and to withdraw notice of this Lease form
      the Landlord's title to the Lands.

14.03 CONDITION OF PREMISES

      Without restricting the generality of Article 14.01, the Tenant, upon the
      expiration or earlier termination of the Lease, shall leave the Premises
      in a clean condition subject to ordinary wear and tear and damage due to
      casualty or condemnation.

14.04 REMOVAL OF FIXTURES

      The Tenant may, at the expiration of the Term, remove from the Premises
      all trade or Tenant's fixtures on the condition the Tenant repairs any
      damage to the Premises caused thereby. In no event will the Tenant remove
      from the Premises any plumbing, heating, air conditioning, electrical or
      ventilating plan or equipment or other building services; and the Tenant
      may, at Tenant's sole option remove all or any portion of its
      installations, alterations, additions, partitions and fixtures and
      anything in the nature of improvements made or installed by the Tenant or
      by the Landlord on behalf of the Tenant to or in the Premises, or any of
      them, and to make good any damage caused to the Premises by such removal.

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<PAGE>

15.   DAMAGE OR DESTRUCTION AND EXPROPRIATION

15.01 DAMAGE TO OR DESTRUCTION OF PREMISES AND SHOPPING CENTRE

      (a)   If the Premises shall be damaged by fire or other casualty for which
            the Landlord is insured, but are not thereby rendered untenantable
            in whole or in part, the Landlord shall at its own expense cause
            such damage, excluding damage to Tenant's fixtures and improvements,
            to be repaired and the Minimum Rent shall not abate. If by reason of
            such occurrence the Premises shall be rendered untenantable only in
            part, the Landlord shall, at its own expense, cause the damage,
            excluding damage to Tenant's fixtures and improvements, to be
            repaired and the Minimum Rent and Additional Rent meanwhile abate
            proportionately until such time as the Premises and Tenant's
            fixtures and improvements are restored. If the Premises shall be
            rendered wholly untenantable by reason of such occurrence until such
            times as the Premises and Tenant's fixtures and improvements are
            restored the Landlord shall at its own expense cause such damage,
            excluding damage to Tenant's fixtures and improvements, to be
            repaired, and the Minimum Rent and Additional Rent shall abate until
            the Premises including Tenants fixtures and improvements have been
            restored and rendered tenantable; or the Landlord may, at its
            election, terminate this Lease and the Tenancy hereby created by
            giving to the Tenant within sixty (60) days following the date of
            said occurrence provided the Landlord also terminates the Leases of
            all other Tenants of the Building, written notice of the Landlord's
            election to do so and in the event of such termination rental shall
            be adjusted as of the date of said occurrence. In the event that
            Fifty (50%) percent or more of the Gross Leasable Area of the
            Shopping Centre shall be damaged or destroyed by fire or other
            casualty, notwithstanding that the Premises may be unaffected
            thereby, the Landlord may, at its election, terminate this Lease and
            the Tenancy thereby created by giving to the Tenant within sixty
            (60) days following the date of such occurrence, provided the
            Landlord also terminates the Leases or all other Tenants of the
            building five (5) days prior written notice of the Landlord's
            election to do so and in the event of such termination rental shall
            be adjusted as of the date of such termination.

            Notwithstanding anything contained herein to the contrary, if
            Landlord is unable or unwilling to commence to repair, restore or
            rebuild the Premises within three (3) months after the occurrence of
            any such casualty or to substantially complete repairs to the
            Premises within twelve (12) months after the occurrence of such
            casualty, Tenant may terminate this Lease upon thirty (30) days
            notice to Landlord after the expiration of the applicable time
            period and upon the expiration of said thirty (30) days notice
            period, neither party hereto shall have any further obligation to
            the other with respect to his Lease or the tenancy created hereby
            except for obligations occurring or accruing prior to such
            termination. Tenant shall have the right to terminate this Lease if,
            in Tenant's reasonable business judgment, the Premises are rendered
            untenantable during the last one (1) year of the Term by giving
            Landlord written notice of such termination within thirty (30) days
            after the occurrence of such casualty.

                                                                              35
<PAGE>

15.02 EXPROPRIATION

      Both the Landlord and Tenant shall cooperate each with the other in
      respect of any expropriation all or any part of the Premises or the
      Shopping Centre, so that each may receive the maximum award in the case of
      any expropriation to which they are respectively entitled in law. If the
      whole or any part of the Premises or of the Shopping Centre is
      expropriated; as between the parties hereto, their respective rights and
      obligations under the Lease shall continue until the day on which the
      expropriating authority takes possession thereof. If in the case of
      partial expropriation of the Premises this Lease is not frustrated by
      operation of governing law and such expropriation does not render the
      Premises wholly untenantable, the Tenant and the Landlord shall restore
      the part not so taken in accordance with their respective repair
      obligations under the provisions of sections 11.01 and 11.08, and the
      Minimum Rent shall be reduced as of the date of taking possession in
      proportion to the relationship between the area of the Premises so taken
      and the area remaining.

16.   QUIET ENJOYMENT

      If the Tenant punctually pays the sums due under this Lease and complies
      with its obligations under this Lease, the Tenant shall peaceably posses
      and enjoy the Premises during the Term without any interruption or
      disturbance from the Landlord or any person or persons claiming by,
      through or under the Landlord;

17.   IMPOSSIBILITY OF PERFORMANCE

      Whenever the Landlord or the Tenant is unable to fulfil any obligations
      hereunder by reason of being unable to obtain the materials, goods,
      equipment, service, utility or labour required to enable it to fulfil such
      obligation or by reason of any law or regulation or by reason of any other
      cause beyond its reasonable control, the Landlord or the Tenant, as the
      case may be, will be entitled to extend the time for fulfillment of such
      obligation by a time equal to the duration of the delay or restriction,
      provided that in no event shall the foregoing be applicable to Tenant's
      obligation to timely pay Rent hereunder.

18.   REGULATIONS

      The Tenant and its employees, agents, contractors, licensees and invitees
      will be bound by rules and regulations as the Landlord may from time to
      time make of which written notice is given to the Tenant. All such rules
      and regulations will be deemed to be incorporated into and form part of
      this Lease.

      Notwithstanding anything to the contrary contained herein, all rules and
      regulations, whether now existing or hereafter adopted by Landlord, shall
      be reasonable in nature, non-discriminatory and uniformly enforced, if at
      all, against all tenants of the Shopping Center and shall not adversely
      affect the conduct of Tenant's business within the Premises. Furthermore,
      no charge by Landlord in any rules or regulations with respect to the
      Shopping Center or the Premises shall increase Tenant's duties and
      obligations hereunder or reduce or restrict the estate, rights or benefits
      hereof. In the event of a

                                                                              36
<PAGE>

      conflict between the terms and provisions of this Lease and the rules and
      regulations, the terms and provisions of this Lease shall govern and
      prevail in each and every instance.

19.   OVERHOLDING

      If the Tenant remains in possession of the Premises after the expiration
      of this Lease and without the execution and delivery of a new Lease, the
      Landlord may re-enter and take possession of the Premises and remove the
      Tenant therefrom and the Landlord may use such force as it may deem
      necessary for that purpose without being liable in respect thereof or for
      any loss or damage occasioned thereby; PROVIDED THAT while the Tenant
      remains in possession after the expiration of this Lease, and the Landlord
      accepts rent, the Tenancy, in the absence of written agreement, will be
      from month to month only at a rent per month equal to 1.25 times the
      Minimum Rent payable in respect of the month immediately preceding
      expiration of this Lease in each case payable in advance on the 1st day of
      each month and shall be subject to all terms of this Lease, except that
      the tenancy will be from month to month and a tenancy from year to year
      will not be created by implication of law.

      Notwithstanding the foregoing, in the event that Tenant and Landlord are
      conducting negotiations in good faith for a renewal of this Lease, Tenant
      may remain in the Premises at the same Minimum Rent as during the last
      Lease Year of the Term; provided, however, upon reaching agreement with
      Landlord on new lease terms for the renewal, Tenant will pay,
      retroactively, the agreed-upon new Minimum Rent for the entire holdover
      period. In the event that (i) Landlord deems that Tenant is not in
      Landlord's reasonable judgement, bargaining in good faith; (ii) Landlord
      and Tenant cannot reach a mutually acceptable agreement; or (iii)
      Landlord, in its sole judgment, chooses to terminate negotiations, then,
      in any such event and upon thirty (30) days prior written notice to
      Tenant, Tenant's monthly rent shall equal 1.25 times the monthly amount
      payable as Minimum Rent during the last Lease Year of the Term, beginning
      upon the expiration of the thirty (30) day period.

20.   INSPECTION, SALE AND LEASE

20.01 SIGN

      The Landlord may from time to time place upon the Premises a notice of
      reasonable dimensions and reasonably placed so as not to interfere with
      the business of the Tenant stating that the Lands are for sale, and during
      the last twelve (12) months of the Term may similarly place a sing stating
      that the Premises are for let.

20.02 ACCESS

      Landlord shall have the right, at all reasonable times upon reasonable
      advance notice to Tenant (and without notice in cases of emergency), to
      enter into the Premises to inspect, maintain, repair and/or make
      replacements as required under this Lease, to show the Premises to
      prospective purchasers of the Shopping Center, and during the last ninety
      (90) days of the Term hereof (as same may be extended), to show the
      Premises to prospective tenants. Landlord agrees to use its best efforts
      not to disturb or

                                                                              37
<PAGE>

      inconvenience Tenant in the conduct of Tenant's business therein. Except
      as otherwise expressly provided in this Lease, Landlord shall refrain from
      entering the Premises or conducting any work therein without the prior
      written consent of Tenant.

      In the event that Landlord or any of its agents, employees, contractors or
      designees enters into the Premises under non-emergency situations in order
      to perform alterations, improvements and/or repairs thereto or to any
      other portion of the Shopping Center, and as a result thereof, Tenant
      cannot, in the exercise of its reasonable business judgement, operate its
      business, rent and all other charges payable to Landlord hereunder shall
      abate in proportion to the degree of interference from the date of such
      closure until such time as the condition giving rise to said closure has
      been corrected, at which time Tenant shall resume the payments required
      hereunder.

      Landlord's right to install additional pipes, ducts, conduits, wires and
      appurtenant fixtures, if in the reception and/or employee area of the
      Premises, shall be restricted to those areas above Tenant's finished
      ceiling or below the slab floor, and Landlord shall use all reasonable
      efforts to install such items adjacent to walls, if feasible, in other
      areas of the Premises. All such installations by Landlord shall be
      undertaken in such a manner so as to interfere as little as may be
      reasonably possible with Tenant's activities in the Premises. Access
      panels and grease and cleaning traps which do not exclusively serve the
      Premises shall be either located outside of the Premises or in a
      non-reception and/or employee portion of the Premises such that access to
      or through same shall not interfere with Tenant's use, enjoyment and
      occupancy of the Premises.

      Landlord shall be liable for any damage to the Premises of Tenant's
      property and shall indemnify and hold Tenant harmless for any liability
      incurred by Tenant as a result of any of the foregoing activities by
      Landlord or any of its agents, employees, contractors or designees.

21.   MISCELLANEOUS

21.01 WAIVER

      No waiver of any default will be binding unless acknowledged in writing by
      the Landlord and Tenant.

21.02 CONDONING

      Any condoning, excusing or overlooking by the Landlord or Tenant of any
      default will not operate as a waiver of the Landlord's or Tenant's rights
      hereunder in respect of any subsequent default.

21.03 SUBORDINATION

      Intentionally Deleted.

                                                                              38
<PAGE>

21.04 ACKNOWLEDGEMENT

      The Tenant or the Landlord will execute within thirty (30) days after
      written request by the other party, a certificate in favour of any
      prospective mortgagee or purchaser of the requesting party certifying to
      the certifying party's knowledge the status of the Lease, any
      modifications or breaches of this Lease, and the status of the rent
      account, all with the intent that any such acknowledgement or certificate
      may be relied upon by any party to whom it is directed.

21.05 SEVERABILITY

      If any provision of this Lease is illegal or invalid or unenforceable at
      law it will be deemed to be severed from this Lease and the remaining
      provisions will nevertheless continue to be in full force and effect.

21.06 HEADINGS

      All headings in this Lease are inserted for convenience of reference only
      and will not affect the construction and interpretation of this Lease.

21.07 REPRESENTATIONS AND ENTIRE AGREEMENTS

      The Tenant acknowledges and agrees that the Landlord has made no
      representations, covenants, warranties, guarantees, promises or agreements
      (verbal or otherwise) with the Tenant other than those contained in this
      Lease; that no agreement collateral hereto will be binding upon the
      Landlord unless made in writing and signed by the Landlord; and that this
      Lease constitutes the entire agreement between the Landlord and Tenant.

21.08 NOTICES

      Any notice, request or demand herein provided or permitted to be given
      hereunder, shall be sufficiently given if personally served or sent by a
      recognized overnight courier, or by certified or registered mail postage
      prepaid, return receipt requested, to the addresses stipulated in
      paragraph 1.01 as to notices to Landlord, and in paragraphs 1.02 and 1.03
      and to the said Premises as to notices to Tenant. Any notice sent as
      aforesaid shall for the purposes of this Lease be presumed to have been on
      the date of actual delivery or refusal of delivery as shown on the return
      receipt or other written evidence thereof obtained by the courier or
      deliverer thereof. Any party may at any time give notice in writing to the
      others of any change of address, and after the giving of such notice the
      address therein specified will be deemed to be the address of such party
      of the purpose of giving notices hereunder.

21.09 TIME OF ESSENCE

      Time will be of the essence of this Lease.

                                                                              39
<PAGE>

21.10 SIGNING OF LEASES

      The Landlord will not be deemed to have made an offer to the Tenant by
      furnishing to the Tenant a copy of this Lese with particulars inserted;
      and notwithstanding that installments of rent may be received by the
      Landlord when this Lease is received by it for signature no contractual or
      other rights will exist or be created between the Landlord and Tenant
      until such time as all parties to this Lease have executed the same.

21.11 RELATIONSHIP

      Nothing herein contained will at any time create or be construed as
      creating a joint venture, partnership or relationship between the parties
      other than that of Landlord and Tenant.

21.12 GOVERNING LAW

      This Lease will be construed and governed by the laws of the Province in
      which the Shopping Centre is located.

21.13 GENDER

      Words in the singular will include the plural and words in the masculine
      gender will include feminine and neuter genders where the context so
      requires.

21.14 GUARANTOR'S CLAUSE

      In consideration of the grant of this Lease by the Landlord, and as a
      condition thereof, the Guarantor hereby covenants with and guarantees to
      the Landlord the performance and observance of all of the covenants and
      agreements of the Tenant to be performed or observed by the Tenant
      hereunder, including the payment of Gross Rent on the days and at the
      times and in the manner specified in this Lease, and, that if any default
      be made by the Tenant beyond applicable notice and cure period, whether in
      payment of Gross Rent or in performance of its obligations hereunder, the
      Guarantor will forthwith indemnify the Landlord on demand for any such
      default.

      The Guarantor further covenants with the Landlord that the Guarantor is
      jointly and severally bound among themselves and with the Tenant for the
      fulfillment of all obligations of the Tenant under the Lease and the
      bankruptcy or other act of the Tenant which might or could operate as a
      release of the Tenant of all of its obligations hereunder shall not
      release or discharge the Guarantor from its covenants herein. In the
      enforcement of its rights hereunder the Landlord may proceed against the
      Guarantor as if the Guarantor was named Tenant hereunder. The Guarantor
      hereby waives any right to require the Landlord to proceed against the
      Tenant or to proceed against or exhaust any security held from the Tenant
      or to pursue any other remedy whatsoever which may be available to the
      Landlord proceeding against the Guarantor. No neglect or forbearance of
      the Landlord in endeavoring to enforce observance of this Lease or obtain
      indemnification as set forth herein, no extension of time which may be
      given by the Landlord from time to time to the Tenant and no other act or
      failure to act by the

                                                                              40
<PAGE>

      Landlord shall release, discharge or in any way reduce the obligation of
      the Guarantor under the covenants herein. Notwithstanding the foregoing,
      the obligations of Guarantor hereunder shall terminate upon termination of
      this Lease by Tenant pursuant to any right of termination granted to
      Tenant under this Lease (or pursuant to any applicable law) or in the
      event Landlord and Tenant agree to an early termination or surrender of
      this Lease.

21.15 JOINT AND SEVERAL LIABILITY

      If two (2) or more individuals, corporations, partnerships or other
      business associations, or any combination of two (2) or more thereof sign
      this Lease as Tenant, the liability of each such individual, corporation,
      partnership or other business association to pay rent and perform all
      other obligations under this Lease will be deemed to be joint and several.
      If the Tenant named in this Lease is a partnership or other business
      association, the liability of each such member shall be deemed to be joint
      and several.

21.16 MERCHANT'S ASSOCIATION

      Intentionally Deleted.

21.17 SIGNAGE

      As shown on the Cover Page of this Lease under Special Clause "Signage".

21.18 ENERGY EFFICIENCY

      The Tenant covenants and agrees that it shall at all times use the lease
      premises in such a manner that it does not subject the Landlord or the
      other tenants to any additional heating or air-conditioning costs. The
      Tenant further covenants and agrees that it shall at all times keep all
      doors or other openings to its leased premises closed except to the extent
      necessary for the ingress and egress of its agents, servants and invitees.

21.19 CREDIT VERIFICATION

      Intentionally Deleted.

21.20 CONDITION OF PREMISE

      That the Tenant does hereby accept this Lease of the Premises to be held
      by it as Tenant and subject to the Conditions, restrictions and covenants
      hereinbefore set forth.

21.21 ENURING EFFECT

      This Lease and everything herein contained will enure to the benefit of
      and be binding upon the parties hereto and each of their respective heirs,
      executors, administrators, successors and permitted assigns.

                                                                              41
<PAGE>

21.22 BINDING EFFECT

      It is further agreed between the parties hereto that the signing of this
      Lease by the Tenant does not constitute a binding agreement until such
      time as the Lease shall have been accepted by the Landlord, through
      execution by its proper officers.

                                                                              42
<PAGE>

                                   SCHEDULE A

                                      [MAP]

                                                                              43
<PAGE>

                                  SCHEDULE "C"

                                 LANDLORD'S WORK

Only those items enumerated below as Landlord's Work will be provided and
installed by Landlord in the Premises at its expense in accordance with
Landlord's choice of materials consistent with those used in the Shopping Center
and with Tenant's plan for Tenant's Work.

      I.    Site Improvements

            A.    Repair and completely restripe both the upper and lower
                  parking areas surrounding the building that will be used by
                  Tenant's employees.

            B.    Provide landscaping around the building per local zoning
                  requirements for office usage. If no requirements exist, a
                  minimum level of twenty percent of the parking area shall be
                  dedicated to landscaping and pedestrian access pathways.

            C.    Provide access pathway from lower side parking area to
                  Tenant's proposed entrance.

            D.    Install adequate site lighting for all parking areas and
                  pedestrian access pathways leading to the building. Parking
                  areas shall be illuminated at a minimum level of 2.50
                  foot-candles. Pedestrian access pathways shall be illuminated
                  at a minimum level of five-foot candles.

            E.    Provide all trenching required by electrical, communications
                  or plumbing service that is not provided by service provider.

            F.    Provide power to dedicated area for tenant to install site
                  monument sign.

            G.    Provide mutually agreed upon screening of existing trash
                  receptacles, HVAC equipment, electrical transformers etc.
                  surrounding the building.

      II.   Exterior of the Building

            A.    Install exterior wall system that shall reflect the character
                  of a newer office building. Said system shall be mutually
                  agreed upon by both Landlord and Tenant.

            B.    Install a new building facade consistent with the rendering of
                  the building that was submitted to Tenant along with
                  Landlord's proposal.

            C.    Provide additional perimeter windows. To be agreed upon by
                  both Landlord and Tenant.

            D.    Dedicate, design and build separate building entrance for
                  tenant's exclusive use which shall include exterior weather
                  protection, vestibule, and signage opportunity.

            E.    Install a covered smoking area adjacent to the building but
                  away from Tenant's entrance. Said smoking area shall be
                  visually screened from public access to the building.

            F.    Reroof with a new 10-year guaranteed roof.

                                                                              44
<PAGE>

      III.  Interior Building Core Areas To Be Exclusively Used by Tenant

            A.    Demolish existing improvements in building as mutually agreed
                  upon by Landlord and Tenant.

            B.    Construct men's and women's washrooms in compliance with all
                  applicable laws and codes based on actual headcount and
                  finished with (i) ceramic tile or better on the floors, base
                  and wet walls; (ii) ceiling and other wall completely
                  finished; (iii) vanities, fixtures, accessories, water closed
                  partitions, lighting furnished and installed; (iv) washroom
                  signage and (v) all mechanical and plumbing services complete.

            C.    Provide telephone room, mechanical room, electrical room and
                  janitors closet in building.

            D.    Provide necessary exit pathways and/or stairways required by
                  code or actual headcount, which ever is greater.

            E.    Provide all doors and hardware, including locking devices and
                  closures as well as exterior aluminum entrance systems.

            F.    Provide access in Premises to domestic water, drainage and
                  vent systems.

            G.    Install water heating system for hot water installed in
                  washrooms and janitor's closet.

            H.    Deliver from building main telephone service room to specified
                  location within Premises dedicated 4" conduits (minimum two).
                  Said conduit shall be delivered without offsets or within
                  acceptable industry standards.

            I.    Install new HVAC air handlers for heating and cooling designed
                  for call center office conditions and main HVAC loop
                  installed.

      IV.   Work Within Premises

            A.    Construct perimeter walls to be complete with framing,
                  insulation, window sills and gypsum wallboard (taped, finished
                  and ready for painting).

            B.    Provide tile ceiling system including suspended ceiling grid
                  at a minimum 9'-0" above finish floor throughout Premises or
                  equivalent allowance based on design.

            C.    Provide access to overhead mechanical, electrical and lighting
                  systems without damage to ceiling components within hard
                  ceiling areas.

            D.    Provide floor slab which is designed to support a minimum live
                  load of 80 lbs. p.s.f. at the building core and 50 lbs at the
                  perimeter with a partition load of 20 lbs p.s.f. One area to
                  be provided as determine by Tenant to support at a minimum
                  live load of 325 lbs. p.s.f. including structural bracing.

            E.    Provide general office lighting with parabolic type fixtures
                  (3 lamp) at a minimum standard or equivalent allowance based
                  on design.

            F.    Provide fire sprinkler system including sprinkler risers, main
                  loop, and sprinkler heads installed in the Premises as
                  required by applicable code or laws.

            G.    Provide infrastructure for fire horns and strobes required for
                  tenant improvement build-out. Landlord to provide emergency
                  and exit lighting

                                                                              45
<PAGE>

                  to meet code and will ensure that all exit signs and emergency
                  lights shall be backed up by an emergency generator or battery
                  pack.

                                                                              46
<PAGE>

                                  SCHEDULE "D"

                                  TENANT'S WORK

Tenant shall provide and carry out, at its cost and expense, all equipment and
work not included in Landlord's Work. The Tenant is responsible for all Trade
Fixtures, Furniture and Decorations.

                                                                              47
<PAGE>

                                  SCHEDULE "E"

                                   DEFINITIONS

      Definitions

      In this Lease the Landlord and Tenant agree that:

1.    "Additional Rent" means all amounts payable by a Tenant to the Landlord
      hereunder except Minimum Rent, whether or not specifically designated as
      Additional Rent elsewhere in this Lease.

2.    "Building" means collective the building or buildings, structures,
      facilities and other improvements erected or to be erected and all
      expansions, alterations, additions or relocations within, upon or under
      the Lands.

3.    "Common Area" means the areas of the Lands and the Building that are
      designated by the Landlord (which designation may be changed by the
      Landlord from time to time as permitted hereunder) as Common Areas set
      aside by the Landlord for the common use of the Tenant, its licensees and
      invitees, in the manner and for the purposes permitted by this Lease. The
      Common Area includes, without limitation, parking areas, roadways,
      sidewalks, loading areas and landscaped areas and improvements thereon,
      the exterior walls, roof and foundations of the Building and all other
      fixtures, fittings or structural members of the Building which are not
      included within the Premises or those premises in the building which are
      leased to other tenants.

4.    "Common Costs" - Intentionally Deleted.

5.    "Gross Leasable Area" means the aggregate of all floor areas of all
      premises intended by Landlord for leasing from time to time (other than
      storage areas or other areas not leased for retail purposes or for
      purposes of offering services to the public).

6.    "Gross Rent" means the aggregate of the Minimum Rent and Additional Rent.

7.    "Gross Revenue" - Intentionally Deleted.

8.    "Land" or "Lands" means the parcel or parcels of land on which the
      Shopping Centre was built.

9.    "Lease Year" means, in respect of the first Lease Year, a period of time
      commencing on the Commencement Date and expiring on the last day of the
      month stipulated in paragraph 1.13 of the Basic Provisions. For greater
      certainty, if the Commencement Date is within the month stipulated in
      paragraph 1.13 of the Basic Provisions, the first Lease Year shall consist
      of the portion of such month commencing on the Commencement Date and
      expiring on the last day of such month. Thereafter, Lease Year shall
      consist of consecutive periods of twelve (12) calendar months. However,
      the last Lease Year shall terminate upon the expiration of the Term or
      earlier termination of the Offer to Lease, as

                                                                              48
<PAGE>

      the case may be. Landlord may in its discretion change the Lease Year from
      time to time provided that such change will not increase Tenant's
      liability for any amounts payable pursuant to this Lease nor reduce or
      extend the Lease Term.

10.   "Premises" or "Leased Premises" means that portion of the Building more
      particularly shown and outlined in red on Schedule "A" hereto, and
      consisting of the area certified correct by the Property Manager.

11.   "Property Manager" means the Property Manager from time to time named by
      the Landlord.

12.   "Proportionate Share" means for the purposes of this Lease a fraction, the
      numerator of which is the Area of the Premises and the denominator of
      which is the Gross Leasable Area. Notwithstanding, if the Tax Costs do not
      apply to or benefit all of the Tenants of the Shopping Centre the
      Proportionate Share means a fraction, the numerator of which is the Area
      of the Premises and the denominator of which is the area of the Premises
      benefiting from the specific Tax Costs.

13.   "Shopping Centre Addition" means collectively all buildings, structures,
      facilities and other improvements not now erected on the Lands and all
      expansions, alterations, additions or relocations from time to time which
      may be made pursuant to this Lease upon the Lands.

14.   "Shopping Centre" means collectively the Lands, the Building and all
      buildings, structures, facilities and other improvements erected or to be
      erected thereon and all expansions, alterations, additions or relocations
      from time to time which may be made thereto pursuant to this Lease.

15.   "Stipulated Rate of Interest" means the rate equal to two percent (2%) per
      year above the current referential rate charged from time to time by the
      Royal Bank of Canada to its most creditworthy customers.

16.   "Tax Costs" means all immovable property taxes, rates, duties and
      assessments, whether municipal, school, local improvement, general or
      special, imposed from time to time by any duly constituted governmental
      authority, whether federal, provincial, municipal, school or other,
      legally empowered to impose any Taxes, in respect of the Shopping Centre
      or upon Landlord or the owner on account of its interest therein and
      including tax on paid-up capital (or portion thereof, reasonably
      attributable to the Shopping Centre), and all costs and fees incurred by
      Landlord in contesting any Taxes, although Landlord shall not be obliged
      to do so. If the system of real estate taxation is altered or varied from
      that in force on the Commencement Date and any new tax shall be levied or
      imposed on all or any portion of the Shopping Centre and/or the revenues
      therefrom and/or the Landlord in substitution for and/or in addition to
      Taxes levied or imposed on the Commencement Date, then any such new tax or
      levy shall be deemed to be and/or to be included in the Tax Costs.

                                                                              49

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