<PAGE>

                                                                   EXHIBIT 10.41
 
                                    SUBLEASE

      1. Parties.
      -----------
Cardiac Pacemakers, Inc. a Minnesota corporation ("Sublandlord"), and Cypress
Bioscience, Inc. ("Subtenant").

      2. Master Lease.
      ----------------
Sublandlord is the assignee under a lease dated August 19, 1991, wherein Carr
Redmond Corporation, a Washington corporation, successor-in-interest to Redmond
East Associates and Michael R. Mastros ("Master Landlord") leased to Sublandlord
certain premises located in the office complex known as Redmond East (the
"Building") in the office building situated at 6675 185th Avenue NE, Redmond, WA
98052 ("Master Premises"). The original lease as amended by Amendments 1 through
10 (collectively, the "Master Lease") described the subject Master Premises in
its entirety. The original lease is attached hereto as Attachment A.

      3. Premises.
      ------------
Sublandlord hereby subleases to Subtenant on the terms and conditions set forth
in this Sublease a portion of the Master Premises described herein which the
parties stipulate and agree contains approximately 21,000 rentable square feet
as more particularly shown on the floor plans included in Attachment A, (the
"Premises").

      4. Warranty by Sublandlord; Subtenant's Quiet Enjoyment.
      --------------------------------------------------------
Sublandlord warrants and represents to Subtenant that to the best of its
knowledge the Master Lease has not been amended or modified except as expressed
set forth herein; that Sublandlord has not previously assigned its interest
under the Master Lease and has not subleased any portion of the Premises to
others under subleases now in effect; that Sublandlord has received no notice of
any claim by Master Landlord that Sublandlord is in default or breach of any of
the provisions of the Master Lease; and that, to Sublandlord's best knowledge,
neither Sublandlord nor the Master Landlord is in default under the Master
Lease; that Sublandlord has full power and authority to execute, deliver and
perform its obligations under this Sublease and there are no consents or
approvals that are required for Sublandlord to execute, deliver and perform
hereunder which have not been obtained. Approval of the Sublease by Master
Landlord is evidenced by Attachment B.

Provided Subtenant performs all of the obligations of Subtenant hereunder,
Subtenant shall have the right of quiet enjoyment of the Premises without
interference by Master Landlord, Sublandlord or anyone claiming by, through or
under Master Landlord or Sublandlord subject to the provisions hereof and of the
Master Lease.

      5. Term.
      --------
The term ("Term") of this Sublease shall commence (the "Commencement Date") on
February 1, 1999 and end on May 31, 2005 (the "Termination Date"), unless
otherwise sooner terminated in accordance with the provisions of this Sublease.
In the event the Term commences on a date
<PAGE>
 
other the date set forth above, Sublandlord and Subtenant shall execute a
memorandum setting forth the actual date of commencement of the Term.
Notwithstanding the foregoing, if Sublandlord has not delivered the Premises to
Subtenant in the condition required under this Sublease on or before February 1,
1999, Subtenant shall have the right thereafter, until such possession is
delivered to Subtenant to terminate this Sublease, whereupon Sublandlord shall
promptly refund to Subtenant all monies and deposits made by Subtenant to
Sublandlord under this Sublease. Subtenant shall not be obligated to pay rent or
otherwise be liable to Sublandlord until possession of the Premises is tendered
to Subtenant in the condition required hereunder. Notwithstanding the foregoing,
both parties acknowledge that separation of the first floor premises from the
second floor premises subsequent to full execution of this document.

      6. Base Rent.
      -------------
Subtenant shall pay to Sublandlord as monthly base rent, without deduction,
setoff, notice, or demand (except as provided herein) at the address set forth
below, or at such other place as Sublandlord shall designate from time to time
by notice to Subtenant, the sum of $15,750 per month for months 1 - 6, the sum
of $29,750 per month for months 7-28, the sum of $31,500 per month for months 29
- 53, and the sum of $33,250 per month for months 54 - 76 in advance, on the
first day of each month of the Term. Subtenant shall begin paying rent on
February 1, 1999 and continue throughout the term of the sublease. The first
                                                                   ---------
month's rent shall be due and payable upon the execution of this document.
-------------------------------------------------------------------------
Notwithstanding the foregoing, if any rental period does not constitute a full
calendar month, then rent for that month shall be prorated on a daily basis
based upon the number of days in such calendar month. In the event of any
damage, casualty, or condemnation affecting the Premises, rent payable by
Subtenant shall be abated hereunder to the extent that rent under the Master
Lease is abated.

      7. Operating Costs.
      -------------------
The Master Lease requires Sublandlord to pay to Master Landlord all or a portion
of the expenses of operating the building of which the Premises is a part as
such term is defined in the Master Lease as "Additional Rent. Subtenant shall be
responsible for payment of its pro-rata share of Additional Rent as defined in
the Master Lease in addition to the payment of Base Rent in accordance with
Section 6 of this sublease, which pro-rata share of Additional Rent shall be
49.5% of the Additional Rent payable by Sublandlord for the portion of the
Master Premises located in Building 13 (based upon Subtenant's occupancy of
21,000 square feet of the 42,422 square feet of Building 13 leased by
Sublandlord.) To the extent that Sublandlord notifies Subtenant that any items
constituting Additional Rent are due and payable under the Master Lease on a
monthly basis, such Additional Rent shall be paid by Subtenant to Sublandlord as
and when base rent is paid. To the extent that such items consisting Additional
Rent are billed from time to time to Sublandlord by Master Landlord, such
Additional Rent shall be paid by Subtenant to Sublandlord upon receipt of
Sublandlord's invoice accompanied with a copy of such billing and any and all
additional supporting documentation of such amounts due as Additional Rent
forwarded by Master Landlord to Sublandlord, and Sublandlord shall thereupon
promptly remit such Additional Rent to Master Landlord.

                                       (2)
<PAGE>
 
      8. Security Deposit.
      --------------------
Upon the execution hereof, Subtenant agrees to pay Sublandlord an amount equal
to $33,250 which shall be deemed the Security Deposit hereunder. All such
amounts held as a Security Deposit shall bear no interest. Upon the occurrence
of any default hereunder by Subtenant, Sublandlord may use said Security Deposit
to the extent necessary to cure such default, whether rent or otherwise. Any
remaining balance of said Security Deposit shall to returned to Subtenant upon
compliance with the terms hereof and acceptance of the vacated Premises by
Sublandlord. Subtenant understands that its potential liability under this
Sublease Agreement is not limited to the amount of the Security Deposit. Use of
such Security Deposit by the Sublandlord shall not constitute a waiver, but is
in addition to other remedies available to Sublandlord under this Sublease
Agreement and under law. Upon the use of all or part of the Security Deposit to
cure any default of Subtenant, Subtenant shall forthwith deposit with
Sublandlord the amount of Security Deposit so used.

      9. Letter of Credit.
      --------------------
On the date of execution of this Sublease Agreement by Subtenant, Subtenant at
its sole cost and expense shall deliver to Sublandlord, from a financial
institution acceptable to Sublandlord, an irrevocable, unconditional standby
letter of credit in the amount of $220,000.00, in substantially the form as set
forth in the Exhibit A attached hereto and incorporated herein by reference,
with any revisions thereof to be approved, in advance, by Sublandlord (such
letter of credit, together with any other renewal or replacement letters of
credit delivered or to be delivered by Subtenant hereunder shall be referred
collectively as the "Letter of Credit"). The Letter of Credit shall be
maintained until the expiration of the Term. Subtenant may periodically renew
the Letter of Credit to assure that it is maintained throughout the entirety of
said period; provided, any such periodic Letter of Credit must be extended,
renewed and/or replaced with a new Letter of Credit at least sixty (60) days
prior to the maturity date of the preceding periodic Letter of Credit.

Within ten (10) days after the expiration of the Term, provided no draw is
pending or has been made with the issuer of said Letter of Credit by the
Sublandlord, and the Subtenant is not in default (nor are there any conditions
which, but for the passage of time where the giving of notice would constitute a
default), then Subtenant shall be entitled to a full release of the Letter of
Credit and Sublandlord shall return the Letter of Credit to Subtenant.

Notwithstanding any other provisions to the contrary contained within this
Sublease, upon the occurrence of a default by Subtenant in the payment of rent
(whether denoted as Base, Additional or otherwise) or of any other default by
Tenant pursuant to the terms of this Sublease Agreement beyond the expiration of
any applicable cure period, Sublandlord may, upon five (5) days prior written
notice to Subtenant, draw upon the Letter of Credit. The amount of such draw
shall be in the amount of the default plus reasonable attorneys fees incurred by
Landlord. In the event of a draw upon the Letter of Credit, Subtenant shall
restore or replace the Letter of Credit to the full amount as existed prior to
the draw (a "Replenishment Event"). Notwithstanding any provision contained
hereto to the contrary, in the event of either: (a) Subtenant does not extend,
renew and/or replace a maturing periodic Letter of Credit with a substitute
Letter of Credit at least sixty (60) days prior to the stated expiration date of
said Letter of Credit, or (b) if Subtenant shall fail to restore or replace the
Letter of Credit to the full amount as existed prior to the draw within the
earlier of: (a) 30 days of the Replenishment Event, or (b) Sublandlord's
issuance of a writ of

                                      (3)
<PAGE>
 
restitution for the premises due to Subtenant's default, then Sublandlord may
upon five (5) days prior written notice to Subtenant, and provided Subtenant
does not provide such a substitute Letter of Credit within said five (5) day
period, draw upon the entire amount of said Letter of Credit and such proceeds
of such Letter of Credit shall then deemed a Security Deposit and treated as set
forth in Section 8 above. No draw by Landlord under the Letter of Credit or the
use of the proceeds thereof, shall be deemed a waiver of any default by
Subtenant under any provisions of the Sublease, except to the extent Sublandlord
actually applies proceeds toward the cure of a default.

      10. Use of the Premises.
      ------------------------
The Premises shall be used and occupied only for laboratory, biotech
manufacturing, general office and related ancillary uses, and for no other use
or purpose. In no event shall the Premises be used in a manner that violate the
terms of the Master Lease.

      11. Assignment and Subletting.
      ------------------------------
Subtenant shall not hypothecate its interest in or assign this Sublease, or
further sublet all or any part of the Premises without (i) the prior written
consent of Sublandlord, which consent shall not be unreasonably withheld or
delayed, provided that Subtenant complies with the Master Lease and (ii) the
prior written consent of Master Landlord in accordance with the terms and
provisions of the Master Lease.

      12. Other Provisions of Sublease.
      ---------------------------------
Except as otherwise provided herein, all applicable terms and conditions of the
Master Lease are incorporated into and made a part of this Sublease as if
Sublandlord were the landlord thereunder, Subtenant the tenant thereunder, and
the Premises the Master Premises, but incorporating such provisions herein shall
not obligate Sublandlord or be construed as causing Sublandlord to assume or
agree to provide utilities, insurance, maintenance, repairs or other services in
connection with the operation of the Premises or perform any obligations assumed
by the Master Landlord or be responsible for any representations or warranties
of Master Landlord under the Master Lease. Sublandlord shall have no liability
to Subtenant for a Master Landlord breach of the Master Lease. Notwithstanding
the foregoing, the following provisions of the Master Lease are not incorporated
herein: Sections 1, 4, 5, 7, 8, 10, 27, 32, 38, 39 (o) and 39 (p) and Exhibit B;
First Addendum to Lease Sections 1, 2, 12 and 13; Second Amendment to Lease;
Third Amendment to Lease; Fourth Amendment to Lease; Fifth Amendment to Lease;
Sixth Amendment to Lease; Seventh Amendment to Lease; Eighth Amendment to Lease;
Ninth Amendment to Lease; Tenth Amendment to Lease.

Subtenant agrees to comply with each of the obligations and provisions of the
Master Lease during the term to the extent that such obligations and provisions
are applicable to the Premises, except that the obligation to pay rent to Master
Landlord under the Master Lease shall be considered performed by Subtenant to
the extent and in the amount rent is paid to Sublandlord in accordance with
Section 6 of this Sublease. Subtenant shall not commit or permit any act or
omission that will violate any of the provisions of the Master Lease. If the
Master Lease gives Sublandlord any right to terminate the Master Lease in the
event of partial or total damage, destruction, condemnation of the Master
Premises or the Building, or otherwise by reason of any breach or default by
Master Landlord under the Master Lease. Sublandlord shall not exercise

                                      (4)
<PAGE>
 
any such right without Subtenant's prior consent. Furthermore, Sublandlord shall
not enter into any amendment or modification of the Master Lease without the
prior written consent of Subtenant. Notwithstanding the foregoing, nothing
contained herein shall preclude Sublandlord from negotiating a release or
assignment of the Master Lease with the Landlord.

      13. Attorney's Fees.
      --------------------
If Sublandord or Subtenant shall commence an action against the other arising
out of or in connection with this Sublease, the prevailing party shall be
entitled to recover its costs of suit and reasonable attorney's fees.

      14. Notices.
      ------------
Any notice by either party to the other shall be valid only if in writing and
shall be deemed to be duly given only if delivered personally or sent by
certified mail addressed

      If to Sublandlord:

      Guidant Corporation/CPI
      Attn:  Mr. Dave Reimer
      4100 Hamline Avenue North
      St. Paul, MN 55112-5798

      If to Subtenant:

      Cypress Bioscience
      Attn: Mr. Duane Morris
            6675 185th Ave
            Redmond, WA 98052

or at such other address for either party as that party may designate by notice
to the other. No notices shall be deemed received until actually delivered to
(or deliberately refused by) the addressee.

      15. Time Periods for Performance.
      ---------------------------------
The time limits contained in the Master Lease for the giving of notices, making
of demands or performing of any act, condition or convenant on the part of
Tenant under the Master Lease, or for the exercise by the tenant thereunder of
any right, remedy or option incorporated herein are changed for the purpose of
incorporation herein by reference by shortening the same, in each instance, by
three (3) days, so that, in each instance, Subtenant shall have three (3) days
less time to observe or perform hereunder than Sublandlord has as Tenant under
the Master Lease. If the Master Lease, as incorporated herein, only allows three
(3) days or less for Subtenant to perform any act or to correct any failure
relating to the Premises or this Sublease, then, except in the event of an
emergency, Subtenant shall nevertheless be allowed two (2) business days to
perform any such act or correct any such failure. Time periods set forth in this
Sublease are subject to principals of force majeure.

                                      (5)
<PAGE>
 
      16. Performance by Sublandlord.
      -------------------------------
Sublandlord covenants and agrees that it will fully and punctually pay all rent
and other charges due and payable under the Master Lease as and when the same
shall become due and payable and shall timely and fully comply with all terms,
conditions and provisions of the Master Lease applicable to Sublandlord. In the
event of any default hereunder by Subtenant, a default under the Master Lease
caused by or arising from such default shall not constitute a default by
Sublandlord hereunder.

      17. Enforcement of Rights.
      --------------------------
If Master Landlord defaults in any of its obligations under the Master Lease,
Subtenant shall be entitled to participate with Sublandlord in any action
undertaken by Sublandlord in the enforcement of Sublandlord's rights against
Master Landlord. If Sublandlord elects not to take action, whether legal action
or otherwise, for the enforcement of Sublandlord's rights against Master
Landlord, Subtenant shall have the right to take such action in its own name
and, for that purpose and only to such extent, all the rights of Sublandlord
under the Master Lease with respect to the Premises shall be and are hereby
conferred upon and assigned to Subtenant, and Subtenant shall be subrogated to
such rights to the extent they apply to the premises. Subtenant shall defend
indemnify and hold Sublandlord harmless from all claims, costs and liabilities,
including attorneys' fees and costs, arising out of or in connection with any
such action by Subtenant.

      18. Delivery of Possession.
      ---------------------------
The Premises shall be delivered in its "as is" condition, broom clean, as of the
Commencement Date, together with keys to all locking doors and the furnishings
which Sublandlord has agreed to deliver with the premises. Subtenant
acknowledges that it has inspected the Premises and found them to be in
acceptable condition.

      19. Insurance.
      --------------
Subtenant shall comply with all of the insurance requirements and obligations of
Sublandlord, as tenant under the Master Lease, with respect to the Premises, and
shall, whether required by the Master Lease or not, name Master Landlord and
Sublandlord as additional insureds, as their interests may appear, on all
policies of insurance required to be carried by Subtenant hereunder or
thereunder. The parties mutually agree that (insofar as and to the extent that
such agreement may be effective without invalidating or making it possible to
secure insurance coverage from responsible insurance companies doing business in
the State of Washington), with respect to any property loss which is covered by
insurance then being carried by Sublandlord or Subtenant, respectively, the
party carrying such insurance and suffering such loss releases the other of and
from any and all claims with respect to such loss; and the parties further
mutually agree that their respective insurance companies shall have no right of
subrogation against the other on account thereof, even though extra premium may
result therefrom. If and to the extent such waiver can be obtained only upon
payment of an additional charge, the party benefiting from the waiver shall pay
such charge, upon demand, or shall be deemed to have agreed that the party
obtaining the insurance coverage in question shall be free of further
obligations under the provisions hereof relating to such waiver.

                                      (6)
<PAGE>
 
      20. Subtenant's Indemnity; Sublandlord's Indemnity.
      ---------------------------------------------------
Subtenant shall defend, indemnify and hold harmless Sublandlord, its partners,
employees, and agents, and Master Landlord, from and against any and all claims,
liabilities, suits, judgments, awards, damages, losses, fines, penalties, costs
and expenses, including reasonable attorney's fees, that Sublandlord, its
partners, employees and agents, and Master Landlord may suffer, incur or be
liable for by reason of or arising out of or related to the breach by Subtenant
of any of the duties, obligations, liabilities or covenants applicable to
Subtenant hereunder, any alterations, additions or modifications made to the
Premises by Subtenant without all required consents or Subtenant's negligence or
willful misconduct. Likewise, Sublandlord shall defend, indemnify and hold
harmless Subtenant, its partners, employees, and agents, from and against any
and all claims, liabilities, suits, judgments, awards, damages, losses, fines,
penalties, costs and expenses, including reasonable attorney's fees, that
Subtenant, its employees and agents, may suffer, incur or be liable for by
reason of or arising out of or related to the breach by Sublandlord of (1) any
of the duties, obligations, liabilities or covenants applicable to Sublandlord
under this Sublease, (2) any of Sublandlord's duties, obligations, liabilities
or covenants under the Master Lease, (3) Sublandlord's gross negligence of
willful misconduct, and (4) any liabilities or causes of action arising prior to
the Commencement Date provided that the breach is not a result of Subtenant's
failure to perform and/or satisfy its obligations under the Sublease. The
foregoing indemnification shall survive termination of this Sublease.

      21. Alterations.
      ----------------
Notwithstanding anything in the Master Lease as incorporated herein to the
contrary, before proceeding with any alteration, additions or improvement to the
Premises (collectively, "Alteration"), Subtenant shall obtain the prior written
consent of Sublandlord and Master Landlord and submit to Sublandlord and Master
Landlord plans and specifications for the work to be done prepared by a licensed
architect for Sublandlord's and Master Landlord's prior written consent.
Subtenant shall reimburse Sublandlord, on written demand, for all of
Sublandlord's reasonable costs incurred in connection with the review of
Subtenant's plans for any Alterations. Subtenant shall deliver to Sublandlord,
within five (5) days of request, a copy of Master Landlord's approval of
Subtenant's plans for any Alteration and, upon receipt of such approval,
Sublandlord shall not unreasonably withhold or delay consent to such Alteration.
Subtenant acknowledges and agrees that, notwithstanding anything herein to the
contrary, with respect to any of Subtenant's Alterations, Sublandlord shall have
no responsibility whatsoever for the installation of, cost of correcting or
removal upon Sublease termination of any of Subtenant's Alterations or any
compliance requirements of the Master Lease, and Subtenant shall bear the entire
responsibility and liability therefore.

      22. Limitations on Sublandlord.
      -------------------------------
(i)   Subtenant acknowledges that Sublandlord has made no representations or
      warranties with respect to the Building or the Premises except as
      expressly provided in this Sublease.
(ii)  If Sublandlord assigns its leasehold estate in the Master Premises to
      Master Landlord, Sublandlord shall have no obligation to Subtenant arising
      thereafter. Subtenant shall then recognize Sublandlord's assignee as
      sublessor under this Sublease, and such assignee shall assume in writing
      Sublandlord's obligations to Subtenant under this

                                      (7)
<PAGE>
 
      Sublease. Sublandlord agrees not to assign its rights or obligations
      herein to any third party other than the Master Landlord.
(iii) Sublandlord shall not be required to perform any of the covenants and
      obligations of Master Landlord under the Master Lease and, insofar as any
      of the obligations of the Sublandlord hereunder are required to be
      performed under the Master Lease by Master Landlord, Subtenant shall rely
      on and look solely to Master Landlord for the performance thereof.

      23. Subtenant's Obligations upon Termination of this Sublease.
      --------------------------------------------------------------
Subtenant shall keep the Premises in good order and condition, subject to
reasonable wear and tear, and at the expiration or sooner termination of this
Sublease, shall surrender and deliver upon the same, "broom clean" and in
substantially the condition in which the same are delivered to Subtenant,
ordinary wear and tear excepted. Subtenant shall repair any damage to the
Premises or the Building caused by Subtenant's move into the Premises, the
removal from the Premises of any property by or on behalf of Subtenant, and any
damage otherwise caused by Subtenant, Subtenant shall not be responsible to
remove any alterations or improvements to the Premises made by Sublandlord or
its predecessors under the Master Lease.

      24. Subordination to the Master Lease.
      --------------------------------------
This Sublease is expressly subject and subordinate to the Master Lease, and, if
the Master Lease terminates, this Sublease shall terminate. Subtenant
acknowledges that it has received a copy, and has reviewed the terms of the
Master Lease. In addition to Subtenant's obligations under this Sublease and to
the extent not consistent with this Sublease, Subtenant shall observe and
perform as obligations under this Sublease only all of the terms, covenants and
conditions of the Master Lease which Sublandlord, as tenant under the Master
Lease, is obligated to observe and perform with respect to the Premises, except
for the payment of rent thereunder, as such terms, covenants and conditions of
the Master Lease are incorporated herein pursuant to Section 12 of this
Sublease, but notwithstanding any other provision hereof, incorporating such
provisions herein shall not obligate Sublandlord or be construed as causing
Sublandlord to assume or agree to perform any obligations of Master Landlord
under the Master Lease. If the Master Lease is terminated by the Master Landlord
prior to its expiration date as a result of an event of default (uncured after
notice, if any, as may be provided in the Master Lease) of Subtenant and not as
a result of any action or omission of Sublandlord, subtenant shall, and hereby
does, indemnify and hold Sublandlord harmless from and against any and all
claims, suits, liabilities, costs and expenses, including reasonable attorneys'
fees and costs resulting therefrom. Similarly, if this Sublease is terminated by
the Master Landlord prior to its expiration date as a result of an event of
default (uncured after notice, if any, as may be provided in the Master Lease)
of Sublandlord and not as a result of any action or omission of Subtenant,
Sublandlord shall and hereby does, indemnify and hold Subtenant harmless from
and against any and all claims, suits, liabilities, costs and expenses,
including without limitation reasonable attorneys' fees and costs and any rental
costs in excess of those provided for in this Sublease, incurred by Subtenant in
a move to comparable space necessitated by any such termination of this Sublease
caused by Sublandlord's default. If any of the express provisions of this
Sublease shall conflict with any of the provisions incorporated by reference,
such conflict shall be resolved in favor of the express provisions of this
Sublease.

                                      (8)
<PAGE>
 
      25. Interest on Unpaid Rent.
      ----------------------------
All installments of monthly rent, and any other charges which are not paid by
Subtenant when due shall bear interest from the date due (after expiration of
the grace period granted by the Sublease) until paid, at a rate equal to the
applicable rate set forth in the Master Lease, in no Event to exceed the
maximum legal rate (the "Interest Rate").

      26. Consent or Approval of Master Landlord.
      -------------------------------------------
If the consent or approval of Master Landlord is required under the Master Lease
with respect to any matter relating to the Premises or this Sublease, it shall
also be required hereunder.

      27. Holdover.
      -------------
If Subtenant holds possession of the Premises after the expiration or sooner
termination of this Sublease, Subtenant shall become a tenant at sufferance on a
day-to-day basis upon the terms specified herein at two hundred percent (200%)
of the then existing monthly base rent and other charges payable hereunder. In
addition, Subtenant shall be responsible for any and all damages suffered by
Sublandlord, including, without limitation, holdover rent payable under the
Master Lease and direct damages or costs resulting from actions initiated by
third parties (including Master Landlord) as a result of such holding over. Such
tenancy shall not constitute a renewal of this Sublease.

      28. Liability.
      --------------
Notwithstanding any other provision contained herein to the contrary, Subtenant
and Sublandlord shall look only to the assets of the other for the satisfaction
of any liability under the Sublease, it being expressly understood and agreed
that any partner, officer, director, employee or agent of Sublandlord or
Subtenant, as the case may be, as an individual shall not be held personally
liable for such obligations and neither party shall pursue satisfaction of any
judgment against the assets of any individual partner, officer, director, or,
employee or agent of the other party.

      29. Right to Cure Defaults.
      ---------------------------
If Subtenant shall at any time fail to make any payment or perform any other
obligation of Subtenant hereunder prior to the expiration of any cure period
granted herein, then Sublandlord shall have the right, but not the obligation,
after the lesser of a five (5) business day notice to Subtenant or the time
within which Master Landlord may act on Sublandlord's behalf under the Master
Lease, or such notice, if any, as is reasonable in the case of any emergency,
and without waiving or releasing Subtenant from any obligations of Subtenant
hereunder, to make such payment or perform such other obligation of Subtenant in
such manner and to such extent as Sublandlord shall reasonably deem necessary
and in exercising any such right, to pay any incidental costs and expenses,
employ attorneys and other professionals and incur and pay attorneys' fees and
other costs reasonably required in connection therewith. Subtenant shall pay to
Sublandlord upon demand all sums so paid by Sublandlord and all incidental costs
and expenses of Sublandlord in connection therewith, together with interest
thereon at the Interest Rate.

If Sublandlord shall at any time fail to make payment or perform any other
obligation of Sublandlord under the Master Lease, then subtenant shall have the
right, but not the obligation, after the lesser of a five (5) business day
notice to Sublandlord or the time within which Master

                                      (9)
<PAGE>
 
Landlord may act on Sublandlord's behalf under the Master Lease, or with such
notice, if any, as is reasonable in case of any emergency, and without waiving
or releasing Sublandlord from any obligations of Sublandlord hereunder, to make
such payment or perform such other obligation of Sublandlord in such manner and
to such extent as Subtenant shall reasonably deem necessary, and in exercising
any such right, to pay any incidental costs and expenses, employ attorneys and
other professionals, and incur and pay attorneys' fees and other costs
reasonably required in connection therewith. Sublandlord shall pay to Subtenant
upon demand all sums so paid by Subtenant and all incidental costs and expenses
of Sublandlord in connection therewith, together with interest thereon at the
Interest Rate.

      30. Survival.
      -------------
Except as otherwise set forth in this Sublease, any obligations of Subtenant
(including, without elimination, rental and other monetary obligations, repair
obligations and obligations to indemnify Sublandlord), shall survive the
expiration or sooner termination of this Sublease and Subtenant shall
immediately reimburse Sublandlord for any expense incurred by Sublandlord in
curing Subtenant's failure to satisfy any such obligation (notwithstanding the
fact that such cure might be effected by Sublandlord following the expiration or
earlier termination of this Sublease). The rights granted in this Paragraph on
behalf of Sublandlord shall apply reciprocally on behalf of Subtenant to the
extent applicable. Except as otherwise set forth in this Sublease, any
obligations of Sublandlord shall survive the expiration or sooner termination of
this Sublease, and Sublandlord shall immediately reimburse Subtenant for any
expenses incurred by Subtenant incurring Sublandlord's failure to satisfy any
such obligation (notwithstanding the fact that such cure might be effected by
Subtenant following the expiration or earlier termination of this Sublease).

      31. Brokers.
      ------------
Sublandlord and Subtenant warrant and represent that they have had no dealings
with any real estate broker or agent in connection with the negotiation of this
Sublease, except for United Properties and Kidder Mathews & Segner on behalf of
Sublandlord, CB Richard Ellis, on behalf of Subtenant, and that neither knows of
any other real estate broker or agent who is or might be entitled to a
commission in connection with this Sublease. Sublandlord agrees that it shall be
responsible for any commission which may be owed to United Properties and Fults
in connection with this Sublease pursuant to a separate agreement. In addition,
Sublandlord agrees that it shall be responsible for any commission which may be
payable to CB Richard Ellis and subject to a separate agreement to be entered
into between Sublandlord and CB Richard Ellis, Sublandlord and Subtenant each
agree to indemnify, defend and hold the other party and Master Landlord harmless
from and against any and all liabilities or expenses, including attorneys' fees
and costs, arising out of or in connection with a breach by such indemnifying
party of the representations and covenants contained in this Section.

      32. Furniture and Equipment.
      ----------------------------
Sublandlord shall allow Subtenant the use of furniture identified on the
attached Exhibit B (collectively, the "Furniture") that is located in the
Premises leased by Subtenant. Upon full and complete fulfillment of the terms
and conditions of this agreement Sublandlord shall deliver, upon request of
Subtenant, a bill of sale for the Furniture and Subtenant shall become the fee

                                      (10)
<PAGE>
 
owner of, said Furniture and responsible for its relocation and/or disposal at
the termination of the Sublease Agreement.

      33. Direct Lease.
      -----------------
Subtenant shall undertake reasonable, affirmative good faith efforts to secure a
direct lease of the subject Premises with Master Landlord. Sublandlord desires
to terminate its obligations under the Master Lease and Subtenant is willing to
permit such termination if (but only if) Master Landlord enters into a direct
lease of the Master Premises with Subtenant on the same terms as this Sublease
and on such other terms as may be acceptable to Subtenant in its sole and
absolute discretion. Subtenant shall have no liability to Sublandlord in the
event it does not effect or execute a direct lease with the Master Landlord and
any such termination of the Master Lease shall be expressly conditioned on the
execution of a direct lease between Subtenant and Master Landlord.

      34. Consent by Master Landlord.
      -------------------------------
Notwithstanding the foregoing, and without intending to modify or alter the
terms of the Master Lease, unless this Sublease and Subtenant's alteration plans
are consented to in writing by Master Landlord and, if required under the terms
of the Master Lease, Master Landlord's lender, within ten (10) days after
execution hereof: (i) this Sublease shall be of no force or effect and the Term
shall not commence; (ii) Sublandlord shall have no obligation to deliver
possession of the Premises; and (iii) Subtenant shall have no right to access to
the Premises. In obtaining such consent from the Master Landlord, Sublandlord
agrees to use good faith efforts also to obtain an agreement under which the
Master Landlord agrees to provide Subtenant with written notice of any default
by Sublandlord or Subtenant under the Master Lease, such notice to be delivered
simultaneously with any such notice provided by the Master Landlord to the
Sublandlord. This Sublease has been executed on the day and year first written
above.

      35. Sublandlord Representations.
      --------------------------------
Sublandlord hereby represents and warrants to Subtenant that (i) the Master
Lease attached hereto as Attachment A has been executed and delivered by Master
Landlord and Sublandlord, is in full force and effect and has not been
terminated, and constitutes the entire agreement of the parties thereto relating
to the lease of the Premises (ii) no default or breach by Sublandlord or, to the
best of Sublandlord's knowledge, by Master Landlord, exists under the Master
Lease, (iii) no event has occurred that, with the passage of time, the giving of
notice, or both, would constitute a default or breach by Sublandlord or, to the
best of Sublandlord's knowledge, by Master Landlord under the Master Lease, and
(iv) subject to receipt of Master Landlord's written consent hereto, Sublandlord
has the right and power to execute and deliver this Sublease and to perform its
obligations hereunder.

SUBLANDLORD:                           SUBTENANT:

GUIDANT CORPORATION/CPI                CYPRESS BIOSCIENCE

By:                                    By:        Duane A. Morris
           ------------------------               -----------------------------
Signature: /s/[ILLEGIBLE]              Signature: /s/Duane A. Morris
           ------------------------               -----------------------------
Title:     VP Finance                  Title:     Vice President, Operations
           ------------------------               -----------------------------


                                      (11)
<PAGE>

<TABLE>
<CAPTION>
        Item                       Floor       Location                              Qty
----------------------             -----       --------                              ---
<S>                                <C>        <C>                                  <C>
Cages & Shelving Units               1        Shipping
Rolling Cages                        1        Shipping                                2
Heavy Duty Shelving                  1        Shipping
Lab Hood Serial #60                  1        ME Lab                                  1
Metal Lockers                        1        ME Lab                                  2
Biological Safety Hood               1        Microbiology Lab                        2
Rolling Cages                        1        Microbiology Lab                        1
Furniture                            1        TMR
Open Window Refrigerator             1        Cafeteria                               1
Blue Fume Hood                       1        Clean Room                              1
Rolling Cart/Garbage Cans            1        Clean Room
Conference Table                     1        LA Room
Oak Trim Benches                     1        Calibration Lab                         7
Heavy Duty Shelving                  1        Receiving/lnspection
Water Filtration System              1        Off of Clean Room                       1
Plastic Pallets                      1        Receiving Dock
Racking                              1        Receiving Dock
Pallet Jack                          1        Receiving Dock
</TABLE>


<TABLE>
<CAPTION>

  Item                             Floor         Name            Enclosure           Qty
-----------------------------      ------        ----          ------------          ---
<S>                                <C>           <C>           <C>                   <C>
2-drawer lateral file cabinet       First                      Freestanding           2
3-drawer lateral file               First                      Freestanding           2
3-shelf bookcase                    First                      Freestanding           1
4-drawer lateral file cabinet       First                      Freestanding          17
4-shelf bookcase                    First                      Freestanding           1
Cubicles & Workstations             First                      Freestanding          33
1 meeting table                     First                      Meeting                1
10 chairs                           First                      Meeting               10
13 chairs                           First                      Meeting               13
large triangular table              First                      Meeting                1
1 Workstation                       First                      Office                 1
2-drawer lateral file cabinet       First                      Office                 1

    Total First Floor
</TABLE>

Cardiac  Pacemakers  Inc.  makes no  representation  as to the  condition or the
current availability of the above items.

                                                                      [STAMP]
<PAGE>
 
                         CONSENT OF LANDLORD TO SUBLEASE
                         -------------------------------

     WHEREAS Carr Redmond Corporation, a Washington corporation ("Landlord"),
and Cardiac Pacemakers, Inc., a Minnesota corporation ("Tenant"), are parties to
a certain Lease Agreement dated August 19, 1991 (the "Lease") covering the
building known as InControl, located at 6675 185th Avenue NE, Redmond,
Washington (except as otherwise provided herein, all terms with initial capital
letters have the same meaning ascribed to them in the Lease);

     WHEREAS, Tenant desires to enter into a certain Sublease (the "Sublease")
with Cypress Bioscience, a Delaware corporation ("Subtenant"), whereby Subtenant
will sublease all of Tenant's space in InControl (the "Subleased Premises"); and

     WHEREAS, as required by the Lease, Tenant has requested that Landlord
consent to the Sublease.

     NOW THEREFORE, Landlord hereby consents to the Sublease subject to the
following terms and conditions:

     1.   The Sublease shall in no way release Tenant, or otherwise alter or
          amend the obligations and liabilities of Tenant under the Lease
          between Landlord and Tenant. Without limiting the generality of the
          immediately preceding sentence, Tenant remains fully and personally
          liable for the payment of all Rent and other sums due under the Lease
          (including all amounts in excess of the Rent if any, which are paid by
          Subtenant under Sublease).

     2.   Landlord's consent shall not constitute Subtenant as Tenant under the
          Lease. Landlord's consent shall not constitute Landlord as a party to
          the Sublease and Landlord shall not be bound by any terms of the
          Sublease.

     3.   Subtenant shall not be permitted to assign the Sublease, or sublease
          the Subleased Premises, without Landlord's prior written consent.

     4.   Landlord's consent to the Sublease shall not relieve Tenant of its
          obligation to obtain the prior written consent of Landlord to any
          subsequent assignment of the Lease or subletting of the Premises.

     5.   Landlord's consent to the Sublease shall not relieve Tenant of its
          obligation, pursuant to the Lease, to obtain Landlord's prior written
          consent to all alterations of the Premises to be performed by or on
          behalf of Tenant or Subtenant.

     6.   Landlord's consent to the Sublease shall not relieve Tenant from its
          obligation fully to observe and perform the terms, covenants and
          conditions of the Lease, nor shall Landlord's consent be deemed a
          consent to any terms in the Sublease which are inconsistent with the
          Lease.
<PAGE>
 
          Landlord's consent be deemed a consent to any terms in the Sublease
          which are inconsistent with the Lease.

     7.   A copy of the fully executed Sublease will be delivered to Landlord
          prior to Subtenant's occupancy of the Subleased Premises.

                                               LANDLORD
                                               --------
                                               Carr Redmond Corporation,
                                               a Washington corporation

Date: 2/5/99, 1999                             By: /s/ [ILLEGIBLE]
                                                  ------------------------------
                                               Printed Name: [ILLEGIBLE]
                                                            --------------------
                                               Title: [ILLEGIBLE]
                                                     ---------------------------

SUBLANDLORD                                    SUBTENANT
-----------                                    ---------
[INITIALED]
Cardiac Pacemakers, Inc.                       Cypress Bioscience, Inc.
a Minnesota corporation                        a Delaware corporation

By: /s/ [ILLEGIBLE]                            By: /s/ Duane A. Morris
   ------------------------------                 ------------------------------
Printed Name:                                  Printed Name: Duane A. Morris
             --------------------                           --------------------
Title: VP Finance                              Title: Vice President, Operations
      ---------------------------                    ---------------------------
<PAGE>

STATE OF WA            )
                       )
COUNTY OF King         )

     On this day personally appeared before me Duane Morris to me known to be
the VP Operations of Cypress Bioscience the corporation that executed the within
and foregoing instrument, and acknowledged the instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that he/she was duly authorized to execute said
instrument on behalf of the corporation.

     IN WITNESS  WHEREOF,  I have hereunto set my hand and seal this 27th day of
January, 1999.

     [SEAL]                          /s/ Steve Bordner
                                     -------------------------------------------
                                     NOTARY PUBLIC in and for the State of WA

                                     residing at Redmond
                                     -------------------------------------------
                                     My commission expires: 5/5/99
                                     -------------------------------------------




STATE OF Minnesota     )
                       )
COUNTY OF Ramsey       )


     On this day personally appeared before me Richard Vogel, to me known to be
the V.P. of Finance, the corporation that executed the within and
foregoing instrument, and acknowledged the instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that he/she was duly authorized to execute said
instrument on behalf of the corporation.

     IN WITNESS  WHEREOF,  I have hereunto set my hand and seal this 10 day of
February 1999.

                                 /s/ Brenda S. Venjohn
     [SEAL]                      -----------------------------------------------
                                 Notary Public in and for the State of Minnesota
                                                                       ---------
                                 Residing at St. Paul
                                            ------------------------------------
                                 My commission expires: 1-31-2000
                                                       -------------------------




District of Columbia   )
                       )
                       )


     On this day personally appeared before me Philip L. Hawkins to me known to
be the Chief Operating Officer of Carr America Realty Corp. the corporation that
executed the within and foregoing instrument and acknowledges the instrument to
be the free and voluntary act and deed of said corporation for the uses and
purposes therein mentioned, and on oath stated that he/she was duly authorized
to execute said instrument on behalf of the corporation.

     IN WITNESS  WHEREOF,  I have  hereunto set my hand and seal this 5th day of
February, 1999.


                     /s/ [ILLEGIBLE]
                     -----------------------------------------------------------
                     NOTARY PUBLIC In and for the District of Columbia
                                                              ------------------
                     residing at Washington, DC
                                ------------------------------------------------
                     My commission expires: My Commission Expires April 30, 2003
                                            ------------------------------------
<PAGE>
 
                            TENTH AMENDMENT TO LEASE
                     Addition and Deletion of Square Footage

     That certain Lease dated August 19, 1991, as amended by the First Addendum
                              ---------------
to Lease dated August 19, 1991, the Second Amendment to Lease dated June 1,
1992, the Third Amendment to Lease dated October 15, 1992, the Fourth Amendment
of Lease dated August 24, 1993, the Fifth Amendment to Lease dated September 9,
1994, the Sixth Amendment to Lease dated May 31, 1995, the Seventh Amendment to
Lease dated March 29, 1996, the Eight Amendment to Lease dated April 29, 1996
and the Ninth Amendment to the Lease dated January 31, 1997 (collectively the
"Lease"), by and between Carr Redmond Corporation a Washington corporation,
                         -------------------------------------------------
successor in interest to Redmond East, L.L.C. ("Lessor") and InControl, Inc., a
---------------------------------------------                ---------------
Delaware corporation ("Lessee"), for the Premises located at 6675 185th Avenue
                                                             -----------------
NE and 6645 185th Avenue NE, Redmond, Washington 98052 is amended this 1st day
------------------------------------------------------
of May, 1997 solely as hereinafter described.

     Effective the 1st day of May, 1997, Landlord and Tenant desire to amend the
                   ---        ---  ----
Lease to, among other things, provide for further expansion space on the second
floor of Building 14 and at the same time remove the warehouse portion of the
Premises from the leased area which was never occupied. The portions of the
Lease as numbered below are amended to read as follows:

1.   Paragraph 1. Premises.
     Building 13 - 42,422 rentable square footage has not changed (inadvertently
     --------------------------------------------
     identified as 42,444 square feet in Paragraph C of the Ninth Amendment to
     Lease).

     Building 14 - 26,521 rentable square feet calculated as follows: Current
     -----------------------------------------
     square footage of 22,206 rentable square feet (inadvertently identified as
     22,260 square feet in Paragraph C of the Ninth Amendment), plus the balance
     of the second floor office space of 4,315 rentable square feet added by
     this amendment. The total square footage in Building 14 is 35,091 rentable
     square feet.

     Building 14 - Future expansion area. The future expansion area identified
     -----------------------------------
     in Paragraph 3 of the Ninth Amendment as the Office Expansion Space of
     9,500 square feet has been changed. The Office Expansion Space which shall
     become part of the Premises no later than June 1, 1999 in accordance with
     the Ninth Amendment, is the remaining first floor office space of 4,270
     rentable square feet and warehouse space of 4,300 rentable square feet
     ("Warehouse Expansion Space").

2.   Paragraph 6. Additional Rental.
     Effective May 1, 1997, the Tenant share of expenses in Building 14 shall be
     amended to 75.58%; Building 13 is unchanged at 100%. When Tenant expands
     into the Office Expansion Space and Warehouse Expansion Space, the Tenant's
     share of expenses in Building 14 shall become 100%.

3.   Paragraph 10. Construction.
     Lessor agrees that it shall provide Lessee a $5.00 per square foot tenant
     allowance for the Office Expansion Space in accordance with the terms of
     Paragraph 3 of the Ninth Amendment to Lease. No tenant improvement
     allowance will be provided for the Warehouse Expansion Space, it will be
     delivered broom clean and in "AS IS" condition.
<PAGE>
 
4.   Paragraph 5. Rental.

<TABLE>
<CAPTION>

Building 14 - 6645 185th Avenue NE, Redmond, WA 98052

Effective                           Monthly                   Rent                      New Monthly
Date                                Base Rent                 Escalation                Base Rent
-------------------------------------------------------------------------------------------------------
<S>                                 <C>                       <C>                       <C>       
January 1, 1997                                                                         $16,562.50
(office space of 15,000 s.f. at $13.25 s.f.)

May 1, 1997                         $16,562.50                $4,764.48                 $21,326.98
(new office space of 4,315 s.f. at $13.25 s.f.)

June 1, 1997                        $21,326.98                $7,956.63                 $29,283.61
(end of free rent period for Sixth Expansion Premises of 7,206 s.f., (inadvertently identified as 7,260 s.f. in Paragraph 5 of the
Ninth Lease Amendment.))

June 1, 1999 (not later than)       $29,283.61                $8,310.42(1)              $37,594.03
June 1, 1999                        $37,594.03                $4,972.68(2)              $42,566.71
(1)(addition of Office Expansion Space of 4,270 s.f. at $15.50 s.f. and Warehouse Expansion Space of 4,300 s.f. at $7.80 s.f.)
(2)(rent increase to $15.50 s.f. for office area of 26,521 s.f.)

June 1, 2002                        $42,566.71                $5,521.02                 $48,085.54
(rent increase to $17.50 for office area of 30,791 s.f. and to $8.88 per s.f. for warehouse area of 4,300 s.f.

<CAPTION>
Building 13 - 6675 185th Avenue NE, Redmond, WA 98052

Effective                           Monthly                   Rent                      New Monthly
Date                                Base Rent                 Escalation                Base Rent
-------------------------------------------------------------------------------------------------------
<S>                                 <C>                       <C>                       <C>       
January 1, 1997                                                                         $49,492.33
June 1, 1999                        $49,492.33                $5,302.75                 $54,795.08
June 1,2002                         $54,795.08                $7,070.33                 $61,865.41
</TABLE>


All other terms and conditions of the above-described Lease shall remain in full
force and effect.

Lessor:  Carr Redmond Corporation                Lessee:  InControl, Inc.
         a Washington corporation                         a Delaware corporation

By:     /s/ [ILLEGIBLE]                          By:     /s/ [ILLEGIBLE]
        ----------------------------                     -----------------------
Its:    Managing Director                        Its:    VP Finance  
        ----------------------------                     -----------------------
Date:   5/1/99                                   Date:   29 April 1997
        ----------------------------                     -----------------------
<PAGE>
 
DISTRICT  OF  COLUMBIA     )  
                           )ss.
                           )

     On this 2nd day of May 1997, before me, the undersigned, a Notary Public in
and for the District of Columbia, duly commissioned and sworn as such,
personally appeared Philip L. Hawkins, to me known to be the Managing Director
of CARR REDMOND CORPORATION the corporation that executed the within and
foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument,
and that the seal affixed is the corporate seal of said corporation.

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

                                                         /s/ Olivia M. Kerr
                                           Printed Name: O1ivia M. Kerr
                                                         -----------------------
                                           NOTARY PUBLIC in and for the District
                                           of Columbia, residing at
                                           8915 Cullum Dr. ^^, Va. 22079
                                           -------------------------------------
                                           My commission expires: 11/30/01
                                                                 ---------------



STATE OF WASHINGTON        )
                           )ss.
COUNTY OF KING             )

     On this 29th day of April, 1997, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn as such,
personally appeared Donald F. Seaton III to me known to be the VP, Finance of
InControl, Inc., the corporation that executed the within and foregoing
instrument, and acknowledged the said instrument to be the free and voluntary
act and deed of said corporation for the uses and purposes therein mentioned,
and on oath stated that he/she was authorized to execute said instrument, and
that the seal affixed is the corporate seal of said corporation.

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

       [SEAL]                        Printed Name: /s/ K. Kay Hannah            
                                                  ------------------------------
                                                  K. Kay Hannah
                                     NOTARY PUBLIC in and for the State of      
                                     Washington, residing at                    
                                     Redmond, Wa                                
                                     -------------------------------------------
                                     My commission expires: 2/14/00             
                                                           ---------------------
<PAGE>
 

                               [FIRST FLOOR PLAN]
<PAGE>
 

                               [SECOND FLOOR PLAN]
<PAGE>
 
                            NINTH AMENDMENT TO LEASE


     THIS NINTH AMENDMENT TO LEASE (this "Amendment") is entered into this 31st
day of January, 1997 by and between CARR REDMOND CORPORATION, a Washington
corporation, successor in interest to Redmond East, L.L.C. ("Lessor") and
INCONTROL, INC., a Washington corporation ("Lessee"), with respect to the
following facts:

                                    RECITALS
                                    -------- 

     A. Lessor and Lessee are parties to that certain Redmond East Lease, dated
August 19,1991, as amended by the First Addendum to Lease dated August 19, 1991,
the Amendment to Lease dated March 5, 1991, the Second Amendment to Lease dated
June 1, 1992, the Third Amendment to Lease dated October 15, 1992, the Fourth
Amendment to Lease dated August 24, 1993, the Fifth Amendment to Lease dated
September 9, 1994, the Sixth Amendment to Lease dated May 31, 1995, the Seventh
Amendment to Lease dated March 29, 1996 and the Eighth Amendment to Lease dated
April 29, 1996 (collectively the "Lease"). Capitalized terms used herein if not
defined herein have the meaning given them in the Lease.

     B. Lessor and Lessee are also parties to that certain Agreement dated
August 19, 1991, as amended by the First Amended Agreement dated June 1, 1992,
the Second Amended Agreement dated October 15, 1992 and the Third Amended
Agreement dated August 24, 1993 (the "Agreement") and that certain Agreement
dated May 31, 1995 (the "1995 Agreement").

     C. Pursuant to the terms of the Lease, Lessee currently leases from Lessor
42,444 square feet in Building 13 and approximately 22,260 square feet of
Building 14, which area includes the Sixth Expansion Premises consisting of
approximately 7,206 square feet on the second floor all as more fully described
in the Lease and Sixth Amendment to Lease.

     D. Landlord and Tenant desire to amend, modify and supplement the Lease and
the 1995 Agreement to, among other things, provide for further expansion space
for Lessee, amend the term of the Lease, adjust the Basic Rental, and modify
the terms of payment by Lessor of certain tenant improvement allowances, all as
hereinafter set forth.

     NOW, THEREFORE, Lessor and Lessee hereby agree as follows:

                            AMENDMENTS AND AGREEMENTS
                            -------------------------

     1. Lessee hereby acknowledges and agrees that as of the date hereof, Lessee
has taken possession of the Sixth Expansion Premises



                                       1
<PAGE>
 
pursuant to the terms of the Lease and that the Sixth Expansion Premises
constitutes a part of the Building 14 Premises. Lessor acknowledges Lessee's
payment of the January 1997 Basic Rental and Additional Rental.

     2. From and after April 1, 1997, Section 1 of the Lease is amended to
include within the definition of Building 14 Premises the approximately 4,000
square feet of warehouse space ("Warehouse Space") and the approximately 9,500
square feet of office space on the first and second floor (the "Office Expansion
Space") of Building 14 identified on Exhibit A attached hereto. From and after
April 1, 1997, the term Premises is amended to include the Warehouse Space and
Lessee shall have been deemed to have taken possession of the Warehouse Space as
of April 1, 1997. Lessee hereby acknowledges and agrees that the Warehouse Space
has been delivered by Lessor and Lessee accepts the Warehouse Space in its
current "AS IS" condition.

     3. Effective not later than June 2, 1999, the Office Expansion Space shall
become part of the Premises and Lessor shall deliver and Lessee shall accept
possession of the Office Expansion Space. At the time Lessor delivers possession
of the Office Expansion Space to Lessee, the floor area of the Premises shall be
increased by 9,500 square feet in accordance with this section and the Basic
Rental shall be increased as set forth in paragraph 5 below. Lessor agrees that
it shall provide Lessee a $5.00 per square foot tenant allowance for the Office
Expansion Space payable upon invoice and verification of completion of tenant
improvements approved by Lessor and otherwise constructed in accordance with the
terms of the Lease and this Amendment. Except for the tenant allowance provided
for herein, Lessee shall accept the Office Expansion Space in its then "AS IS"
condition. Notwithstanding the foregoing, in the event that Lessor is unable to
deliver possession of the Office Expansion Space to Lessee for the construction
of tenant improvements on or before April 1, 1999, the effective date of
Lessee's lease of the Office Expansion Space shall be adjusted by mutual
agreement of the parties for any such delay.

     4. Lessor and Lessee hereby agree to amend Section 4 of the Lease to the
extent necessary to extend the term of the Lease eight years and five months,
from January 1, 1997 to May 31, 2005, on which date the Lease shall terminate.

     5. Lessor and Lessee hereby agree to amend the Lease as necessary to
provide that from and after January 1, 1997, the Basic Rental for the Premises
shall be as follows:


                                       2
<PAGE>
 
<TABLE>
<CAPTION>
<S>                           <C>        
Building 13 Premises
--------------------
1/1/97 - 5/31/99              $14.00 per sq. ft. annually ($1.16/mo.)
6/1/99 - 5/31/02              $15.50 per sq. ft. annually ($1.29/mo.)
6/1/02 - 5/31/05              $17.50 per sq. ft. annually ($1.45/mo.)

Building 14 Premises
--------------------
1/1/97 -5/31/99
     Office Space             $13.25 per sq. ft. annually ($1.10/mo.)
     Warehouse Space          $6.60 per sq. ft. annually ($0.55/mo.)

6/1/99 - 5/31/02
     Office Space             $15.50 per sq. ft. annually ($1.29/mo.)
     Warehouse Space          $7.80 per sq. ft. annually ($0.65/mo.)

6/1/02 - 5/31/05
     Office Space             $17.50 per sq. ft. annually ($1.45/mo.)
     Warehouse Space          $8.88 per sq. ft. annually ($0.74/mo.)
</TABLE>

Lessor hereby agrees that between and including January 1, 1997 and May 31,
1997, Lessee shall have a free rent period and not have to pay Basic Rental for
the area of the Premises in Building 14 referred to as the Sixth Expansion
Premises (7,260 sq. ft. on the second floor); provided, however, Lessee shall be
responsible for and pay any and all Additional Rent and other charges under the
Lease for the Sixth Expansion Premises. Lessor shall credit Lessee for January's
Basic Rental payment for the Sixth Expansion Premises referenced in Paragraph
1 above.

     6. Lessor and Lessee hereby agree to amend the Lease and the 1995 Agreement
as necessary to provide that Landlord shall provide Lessee with a tenant
improvement allowance (the "Tenant Allowance") in the total amount of $144,000
for the build out of the Sixth Expansion Premises. In addition, Lessor shall
provide the Sixth Expansion Premises the "shell HVAC" consisting of a roof top
unit and ducting to the Sixth Expansion Premises distribution box, and for the
purchase and installation of an elevator servicing the second floor space, at
Lessor's sole cost and expense. Lessor shall complete such work on or before
April 1, 1997. Lessor shall pay Lessee the Tenant Allowance upon satisfaction of
the following conditions by Lessee: (i) Lessor shall approve plans and
specifications, which approval shall not be unreasonably withheld; (ii)
presentment of invoice for the Tenant Allowance to Lessor; (iii) verification by
Lessor that the tenant improvements are completed in accordance with plans and
specifications approved by Lessor; (iv) lien releases or waivers satisfactory to
Lessor from any contractors and subcontractors; and (v) Lessee shall


                                       3
<PAGE>
 
not be in default under the Lease (subject to applicable cure periods).

     7. Lessor and Lessee hereby agree to amend the Lease to provide that Lessor
shall provide Lessee up to a maximum of 3 parking spaces per 1000 sq. ft. of
Premises (excluding Warehouse Space of 4,000 sq. ft.). Lessor shall make
available and designate such parking spaces in accordance with the terms of the
Lease.

     8. Provided that (i) the Lease is full force and effect, (ii) Lessee is in
possession of the Premises, and (iii) Lessee is not in Default under the Lease,
Lessee shall have One (1) five year option to extend the term of the Lease (the
"Extension Option"). At least one year prior to the expiration of the Lease,
Lessor shall request of Lessee a notification of whether or not Lessee intends
to exercise option to renew. Lessee shall give Lessor written notice of its
election to exercise the Extension Option at least nine (9) months (but not
earlier than One (1) year) prior to the expiration of the term of the Lease.
Time is of the essence with respect to Lessee's notice of exercise of the
Extension Option. Lessee's Extension Option shall be subject to the following
terms and conditions:

     a. All terms and conditions of the Lease shall remain in full force and
effect during the extension term, except for Basic Rental for the Premises which
shall be determined in accordance with the terms of this paragraph. Basic Rental
during the option term shall be the then fair market base rent for comparable
vacant space on the Property, taking into account the commencement date of the
option term, the terms and conditions of the lease form that Lessor is then
using in the Building, but in no event shall the Basic Rental be less than the
Basic Rental payable during the last month of the term preceding the option
term. The term fair market base rent shall mean the base rent for that space
which would be paid by a willing tenant to a willing landlord, neither of whom
is compelled to rent, for a term of five years, disregarding "tenant
concessions," if any, then being offered on comparable vacant space only to
prospective new tenants in the Building. The term "tenant concessions" shall
include, without limitation, such inducements as free rent, free parking, over
standard tenant improvements, or other similar inducements. The fair market base
rent shall not reflect the value of any improvements to the Premises made by
Lessee which Lessee has the right to remove at the end of the Lease.

     b. Lessor and Lessee shall conduct good faith negotiations to establish and
agree on the Basic Rental for the Premises during the option term within 120
days of the date of Lessee's notice of exercise of the Extension Option to
Lessor. In the event that the parties are



                                  4
<PAGE>
 
unable to agree on the Basic Rental for the option term, the parties hereby
agree to submit the issue to binding arbitration in accordance with the
following procedure. Upon the expiration of the negotiation period, each party
shall select one (1) qualified real estate appraiser or professional within 15
days. In the event that one party refuses to select an arbitrator, after notice
to the breaching party, the non-breaching parties arbitrator shall select the
breaching party's arbitrator. The arbitrators shall select a third arbitrator
within ten days. Each party shall submit to the arbitrators its opinion of Basic
Rental based on fair market base rent as defined above. The arbitrators shall be
required to select one or the other party's Basic Rental number, by at least two
of the three arbitrators. The non-prevailing party in the arbitration shall pay
all costs and expenses of the arbitration. The parties shall submit all written
material to the arbitrators within 30 days of the date the third arbitrator has
been selected and the arbitrators shall render a decision within 30 days of the
receipt of the parties written submissions. In the event either party defaults
or refuses to perform its obligations under this paragraph, such defaulting
party shall be deemed to have accepted the non-defaulting party's opinion of
Basic Rental.

     c. The Extension Option shall be personal to Lessee and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Lessee, nor shall the Extension Option be assignable separate
and apart from the Lease.

     d. The Extension Option shall be terminated during any period in which
Lessee is in default under any provisions of the Lease until said default has
been cured. Time is of the essence. If Lessee fails to exercise its Extension
Option prior to the expiration of the applicable time period for the exercise of
such right, Lessee's rights under the extension option shall thereafter be
terminated, deemed null and void and of no further force or effect. The period
of time within which the Extension option may be exercised shall not be extended
or enlarged by reason of Lessee's inability to exercise such rights because of
the foregoing provisions. All rights of Lessee under the Extension Option shall
terminate and be of no further force or effect even after Lessee's due and
timely exercise thereof, if, after the exercise, but prior to the commencement
date of the option term: (i) Lessee fails to pay to Lessor a monetary obligation
of Lessee's in accordance with the terms of the Lease; (ii) Lessee fails to cure
a material non-monetary default in accordance with the terms of the Lease; or
(iii) Lessor gives to Lessee three (3) or more notices of default, whether or
not such defaults are ultimately cured. Lessor's waiver of its right to
terminate the Lease due to Lessee's default in any instance shall not be deemed
a waiver of the foregoing conditions



                                       5
<PAGE>
 
precedent and conditions subsequent to the exercise of the Extension Option.

     9. Any and all conditions or terms under the Lease to be performed by the
Lessor have been satisfied (including without limitation, the terms of the
Agreement); all non-monetary conditions under the Lease to be performed by the
Lessor have been satisfied; there are no existing claims, defenses or offsets
which the Lessee has against Lessor or the enforcement of the Lease by Lessor.
Lessee hereby acknowledges that the foregoing representation and warranty by
Lessee is a material consideration to Lessor in entering into this Amendment and
that Lessor is specifically relying on the statements of Lessee contained
herein.

     10. Except as expressly amended by this Amendment, the terms and
conditions, of the Lease, as previously amended, remain in full force and effect
and are hereby ratified and affirmed.

     IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as of
the date first above written.

LESSOR:                                    CARR REDMOND CORPORATION
                                                
                                           By: /s/ Philip L. Hawkins
                                              ----------------------------------
                                           It's: Managing Director
                                                --------------------------------

LESSEE:                                    INCONTROL, INC.

                                           By: /s/ Donald F. Seaton
                                              ----------------------------------
                                           It's: VP Finance
                                                --------------------------------



                                       6
<PAGE>

 
DISTRICT OF COLUMBIA     )
                         )    ss.
                         )


     I certify that I know or have satisfactory evidence that Philip L. Hawkins
is the person who appeared before me, and said person acknowledged that he/she
signed this instrument, on oath stated that he/she was authorized to execute the
instrument and acknowledged it as the Managing Director of CARR REDMOND
CORPORATION to be the free and voluntary act of such party for the uses and
purposes mentioned in the instrument.

     DATED this 3rd day of March, 1997.

                                    /s/ Olivia M. Kerr
                                    ----------------------------------------
                                    Notary Public in and for the 
                                    District of Columbia, residing at 
                                    District of Columbia
                                    --------------------
                                    My Commission Expires: November 30, 2001
                                                           -----------------

                                              Olivia M. Kerr
                                    ----------------------------------------
                                               (print name)


STATE OF WASHINGTON      )
                         )   ss.
COUNTY OF KING           )

     I certify that I know or have satisfactory evidence that Donald F. Seaton
III is the person who appeared before me, and said person acknowledged that
he/she signed this instrument, on oath stated that he/she was authorized to
execute the instrument and acknowledged it as the Chief Financial Officer of
INCONTROL, INC. to be the free and voluntary act of such party for the uses and
purposes mentioned in the instrument.

     DATED this 31st day of January, 1997.

                                    /s/ K. Kay Hannah
                                    ----------------------------------------
                                    Notary Public in and for the State of 
                                    Washington, residing at Redmond, WA
                                                            ------------
                                    My Commission Expires:  2/14/00
                                                          ----------

                                                  K. Kay Hannah
                                    ----------------------------------------
                                                  (print name)

[SEAL]

                                       7
<PAGE>
 
                                 EXHIBIT "A-1"

                                  [FLOOR PLAN]

                                  FIRST FLOOR
<PAGE>
 
                                 EXHIBIT "A-2"

                                  [FLOOR PLAN]

                                  SECOND FLOOR
<PAGE>
 
                            EIGHTH AMENDMENT TO LEASE

     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee", as amended by that certain FIRST ADDENDUM
TO LEASE dated August 19, 1991, by that certain SECOND AMENDMENT TO LEASE dated
June 1, 1992, by that certain THIRD AMENDMENT TO LEASE dated October 15, 1992,
by that certain FOURTH AMENDMENT OF LEASE dated August 24, 1993, by that certain
FIFTH AMENDMENT OF LEASE dated September 9, 1994, by that certain SIXTH
AMENDMENT TO LEASE dated May 31, 1995 and by that certain SEVENTH AMENDMENT TO
LEASE dated March 29, 1996, is further amended as set out below. Lessor's
interest in the Lease has been assigned to Redmond East, L.L.C. Capitalized
terms used herein if not defined herein have the meaning given them in the
Lease, as previously amended.

     1. Lessee has had Freiheit & Ho prepare construction drawings dated March
27, 1996 for Project 96114 applicable to the Building 13 Premises. Lessor
approves said plans and the building modifications contemplated therein.

     2. Lessee agrees to pay the sum of $10,000.00 upon termination of the
Lease, if the Lease is terminated earlier than March 31, 2006.

     3. Lessee's obligation under Section 2 hereof shall be abated if, at the
date of termination of the Lease, the Building 13 Premises includes restrooms in
the portion of the building 13 Premises previously occupied by Cadman, Inc. Said
restrooms shall contain no less than the following: a male restroom containing
two sinks, two urinals and one disabled accessible commode and a female restroom
with two sinks, two commodes and one disabled accessible commode, all
constructed to building standards. The cost of said restrooms, if any, shall be
borne solely by Lessee.

     4. All conditions under this Lease to be performed by the Lessor have been
satisfied; all conditions under this Lease to be performed by the Lessor have
been satisfied; there are no existing claims, defenses or offsets which the
Lessee has against the enforcement of this Lease by Lessor.

     5. Except as expressly amended by this agreement, the terms and conditions
of the Lease remain in full force and effect and are hereby affirmed and
ratified.

     6. This amendment shall become effective on the date hereof.

///
///
///


                                       1
<PAGE>
 
DATED this 29 day of April, 1996.

                                    LESSOR:

                                    REDMOND EAST, L.L.C.
                                    By: Red Ace, Inc., its Managing Member

                                    By /s/ Michael R. Mastro
                                       -----------------------------------
                                    Name: Michael R. Mastro
                                          Title: President

                                    LESSEE:

                                    INCONTROL, INC.

                                    By /s/ Donald F. Seaton
                                       -----------------------------------
                                    Name: Donald F. Seaton
                                    Title: VP Finance




                                       2
<PAGE>
 
STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 14 day of May, 1996, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known, and said person acknowledged that he
signed this instrument as President of Red Ace, Inc., a Washington corporation,
which corporation is the managing member of Redmond East, L.L.C., a Washington
limited liability company, and on oath stated that he was authorized to execute
the instrument, and acknowledged it, as the President of Red Ace, Inc., and on
behalf of Red Ace, Inc., as managing member of Redmond East, L.L.C. for the uses
and purposes mentioned in the instrument.

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

                                    /s/ Donna J. Reid
                                    --------------------------------------
[SEAL]                              NOTARY PUBLIC in and for the State of 
                                    Washington, residing at Auburn
                                                            -------
                                    My commission expires 2/17/98
                                                          -------


STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 29 day of April, 1996 before me, the undersigned, a Notary Public
            ----      -------------
in and for the State of Washington, duly commissioned and sworn, personally
appeared Donald F. Seaton III, to me known to be the V.P. Finance of INCONTROL,
         --------------------                        ------------
INC., a Washington corporation, the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument
and that the seal affixed, if any, is the corporate seal of said corporation.

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


                                    /s/ K. Kay Hannah
                                    --------------------------------------
                                    Notary Public in and for the State of
                                    Washington, residing at Redmond, WA
                                                           -------------
                                    My Commission Expires:  2/14/00
                                                          ----------


                                       3
<PAGE>
 
                           SEVENTH AMENDMENT TO LEASE

     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee", as amended by that certain FIRST ADDENDUM
TO LEASE dated August 19, 1991, by that certain SECOND AMENDMENT TO LEASE dated
June 1, 1992, by that certain THIRD AMENDMENT TO LEASE dated October 15, 1992,
by that certain FOURTH AMENDMENT OF LEASE dated August 24, 1993, by that certain
FIFTH AMENDMENT OF LEASE dated September 9, 1994, by that certain SIXTH
AMENDMENT TO LEASE dated May 31, 1995, is further amended as set out below.
Lessor's interest in the Lease has been assigned to Redmond East, L.L.C.
Capitalized terms used herein if not defined herein have the meaning given them
in the Lease, as previously amended.

     1. Section 9 of the FIFTH AMENDMENT TO LEASE is hereby deleted, its terms
have been fulfilled by this amendment.

     2. From and after April 1, 1996, the portion of the Premises located at
6675 185th Avenue N.E., Redmond WA (the "Building 13 Premises") shall be
enlarged by 6,876 rentable square feet (the "Cadman Area") and shall thereafter
include the entirety of Building 13, a total area of 42,422 rentable square
feet. The entire Premises area shall thereafter comprise 57,422 rentable square
feet.

     In summary, on and after April 1, 1996, the Premises shall comprise a total
of 57,422 rentable square feet and shall include the Building 13 Premises,
comprised of a total of 42,422 rentable square feet and the Building 14
Premises, comprised of a total of 15,000 rentable square feet (the Building 14
Premises are located at 6645 185th Avenue N.E., Suite 100, Redmond WA and are a
portion of the property legally described in Exhibit A hereto.)

     Notwithstanding the foregoing, the provision of the Lease to further expand
the Building 14 Premises in accordance with Section 3 of the SIXTH AMENDMENT OF
LEASE is specifically reaffirmed.

     3. From and after June 1, 1996, the Basic Rental for the Premises shall
increase by the amount of $6,876.00 monthly for a total Basic Rental amount of
$64,557.33, not including the triple net charges imposed as Additional Rental in
Section 6 of the Lease.

     In summary, on and after June 1, 1996, Basic Rental for the Premises shall
total $64,557.33, not including the triple net charges imposed as Additional
Rental in Section 6 of the Lease, and shall include the Basic Rental for the
Building 13 Premises, $49,107.33 monthly, and the Basic Rental for the Building
14 Premises, $15,450.00 monthly.

     Notwithstanding the foregoing, increases in the Basic Rental prescribed in
Sections 3 and 4 of the SIXTH AMENDMENT TO LEASE are specifically reaffirmed. In
addition to such increases, the Basic Rental for the Premises and the Building
13 Premises shall increase by $343.80 from and after December 1, 1996 and by a
further $343.80 from and after December 1, 1998.

     4. The Cadman Area is accepted by Lessee in its "as is" condition. Lessor
shall not be obligated to pay for any improvements thereto.

     5. All conditions under this Lease to be performed by the Lessor have been
satisfied; all conditions under this Lease to be performed by the Lessor have
been satisfied; there are no existing claims, defenses or offsets which the
Lessee has against the enforcement of this Lease by Lessor.

     6. Except as expressly amended by this agreement, the terms and conditions
of the Lease remain in full force and effect and are hereby affirmed and
ratified.

     7. This amendment shall become effective on the date hereof.

     DATED this 29th day of March, 1996.
               ------

                                       1
<PAGE>
 
                                    LESSOR:

                                    REDMOND EAST, L.L.C.
                                    By: Red Ace, Inc., its Managing Member

                                    By /s/ Michael R. Mastro
                                       -----------------------------------
                                    Name: Michael R. Mastro
                                          Title: President

                                    LESSEE:

                                    INCONTROL, INC.

                                    By /s/ Donald F. Seaton
                                       -----------------------------------
                                    Name: Donald F. Seaton
                                    Title: V.P. Finance


                                       2
<PAGE>
 
STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 8 day of April, 1996, before me, the undersigned, a Notary Public
           ----      --------------
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known, and said person acknowledged that he
signed this instrument as President of Red Ace, Inc., a Washington corporation,
which corporation is the managing member of Redmond East, L.L.C., a Washington
limited liability company, and on oath stated that he was authorized to execute
the instrument, and acknowledged it, as the President of Red Ace, Inc., and on
behalf of Red Ace, Inc., as managing member of Redmond East, L.L.C., and as such
managing member, the free and voluntary act of Redmond East, L.L.C. for the uses
and purposes mentioned in the instrument.

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

                                    /s/ Donna J. Reid
                                    --------------------------------------
[SEAL]                              NOTARY PUBLIC in and for the State of 
                                    Washington, residing at Auburn
                                                           --------
                                    My commission expires 2/17/98
                                                         --------


STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 29th day of March, 1996 before me, the undersigned, a Notary Public
            ----        ------------
in and for the State of Washington, duly commissioned and sworn, personally
appeared Donald F. Seaton III, to me known to be the Vice President, Finance of
        ---------------------                       ------------------------
INCONTROL, INC., a Washington corporation, the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.

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


                                    /s/ K. Kay Hannah
                                    --------------------------------------
                                    Notary Public in and for the State of
                                    Washington, residing at Redmond, WA
                                                           ------------
                                    My Commission Expires:  2/14/00
                                                         --------------
           

                                                                      [SEAL]

                                       3
<PAGE>
 
                                   EXHIBIT A
                 LEGAL DESCRIPTION OF THE BUILDING 14 PREMISES

Lot 2, City of Redmond Lot Line Revision No. LLR 89-7, as filed under File No.
9207069007, Records of King County, Washington.





                                       4
<PAGE>
 
                            SIXTH AMENDMENT TO LEASE

     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee", as amended by that certain FIRST ADDENDUM
TO LEASE dated August 19, 1991, by that certain SECOND AMENDMENT TO LEASE dated
June 1, 1992, by that certain THIRD AMENDMENT TO LEASE dated October 15, 1992,
by that certain FOURTH AMENDMENT OF LEASE dated August 24, 1993, by that certain
FIFTH AMENDMENT OF LEASE dated September 9, 1994, amended as set out below.
Capitalized terms used herein if not defined herein have the meaning given them
in the Lease, as previously amended.

     1. As of May 31, 1995, the Building 2 Premises shall be excluded from the
Premises. Lessee, by virtue of an oral agreement, has previously tendered
possession of the Building 2 Premises to Lessor and hereby does so in writing.
Lessee shall remain responsible to pay all rental on the Building 2 Premises, as
though in actual possession, through May 31, 1995. As of June 1, 1995, Sections
2, 3 and 6 shall be deleted from the Fifth Amendment to Lease. As of June 1,
1995, the Basic Rental shall be reduced by the sum of $13,551.11 monthly and the
floor area of the Premises decreased by 14,503 square feet by virtue of this
Section.

     2. From and after June 1, 1995, Section 1 of the Lease is amended to define
the Building 14 Premises which are shall be the area delineated on Exhibit A
hereto. From and after June 1, 1995, the Premises shall include the first floor
area of the Building 14 Premises, an area of approximately 10,758 square feet,
and that portion of the second floor not included in the Sixth Expansion
Premises (defined in Section 3 hereof), an area of approximately 4,242 square
feet. From and after June 1, 1995, the Basic Rental shall be increased by the
sum of $15,450.00 monthly and the floor area of the Premises increased by 15,000
square feet by virtue of this Section.

     3. The second floor area of the Building 14 Premises consists of
approximately 11,448 square feet. Of that floor area, the Premises added
pursuant to Section 2 hereof comprises approximately 4,242 square feet. The
remaining 7,206 square feet shall comprise the Sixth Expansion Premises. Lessee
has not planned the tenant improvements for the second floor area. At the time
Lessee does so, and no later than the date Lessee first makes use of the new,
second floor tenant improvements, Lessee shall identify the portion of the
second floor which shall be the Sixth Expansion Premises and shall notify Lessor
of such designation. The Sixth Expansion Premises shall become part of the
Premises as of January 1, 1997, or sooner in accordance with the following
paragraph. As of January 1, 1997, or sooner in accordance with the following
paragraph, the Basic Rental shall be increased by the sum of $7,422.18 monthly
and the floor area of the Premises increased by 7,206 square feet by virtue of
this Section.

     If Lessee shall occupy any portion of the Sixth Expansion Premises prior to
January 1, 1997, the area so used (based upon a room by room basis) shall become
part of the Premises and rental at the same rate as charged on the portion of
the Building 14 Premises included in the Premises shall apply thereafter. A
"room by room basis" shall mean that if any part of a room is used, no matter
what portion, the entire room and circulation areas required for its use shall
be deemed for these purposes to be in use.

     Thirty days following occupancy of all or a portion of the Sixth Expansion
Premises or February 1, 1997, whichever is sooner, Lessor shall pay to Lessee
$20.00 per square foot of Sixth Expansion Premises so occupied, as a tenant
improvement allowance.

     4. In addition to all other changes to the Basic Rental, Basic Rental shall
increase by $1,110.30 monthly from and after January 1, 1997.

     5. The effect of Sections 1 - 4 above on the floor area of the Premises and
on the Basic Rental is summarized in Table A attached hereto and incorporated
herein.

                                       1
<PAGE>
 
     6. Lessee shall accept the Building 14 Premises "as is". Notwithstanding
the generality of the foregoing, Lessee does not accept any condition existing
as of the date hereof with respect to the improper use, storage or disposal of
any hazardous or toxic material by the prior occupant of the Building 14
Premises. Lessee's indemnity of Lessor set out in Section 3 of the Lease shall
not apply to conditions now present in the Building 14 Premises and arising
during such prior occupancy.

     7. The term of the Lease is hereby extended to May 31, 2000.

     8. All conditions under this Lease to be performed by the Lessor have been
satisfied; all non-monetary conditions under this Lease to be performed by the
Lessor have been satisfied; there are no existing claims, defenses or offsets
which the Lessee has against the enforcement of this Lease by Lessor.

     9. Except as expressly amended by this agreement, the terms and conditions
of the Lease, as previously amended, remain in full force and effect and are
hereby affirmed and ratified.

     10. The Effective Date of this amendment shall be the date hereof.

     DATED this 31st day of May, 1995.



                                    LESSOR:

                                    /s/ Michael R. Mastro
                                       ------------------------------
                                    Name: Michael R. Mastro

                                    REDMOND EAST ASSOCIATES

                                    By /s/ Michael R. Mastro
                                       ------------------------------
                                    Name: Michael R. Mastro
                                    Title: General Partner

                                    LESSEE:

                                    INCONTROL, INC.

                                    By /s/ Donald F. Seaton
                                       ------------------------------
                                    Name: Donald F. Seaton III
                                    Title: V.P. Finance


                                       2
<PAGE>
 
STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 20 day of June, 1995, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known, and acknowledged to me that he signed
and sealed the foregoing instrument as his free and voluntary act and deed, for
the uses and purposes therein mentioned.

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

                                    /s/ James Clark
                                    ---------------------------------------
[SEAL]                              NOTARY PUBLIC in and for the State of
                                    Washington, residing at Issaquah.
                                    My commission expires ________.


STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 20 day of June, 1995, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known to be a General Partner of REDMOND EAST
ASSOCIATES, and on behalf of such general partnership, acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed of said general partnership, for the uses and purposes therein mentioned.

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

                                    /s/ James Clark
                                    --------------------------------------
[SEAL]                              NOTARY PUBLIC in and for the State of
                                    Washington, residing at Issaquah.
                                    My commission expires ________.


                                       3
<PAGE>
 
STATE OF WASHINGTON       )
                          )   ss.
COUNTY OF KING            )

     On this 31 day of May, 1995 before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Donald F. Seaton III, to me known to be the V.P. Finance/CFO of
INCONTROL, INC., a Washington corporation, the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.

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


                                   /s/ K. Kay Hannah
                                    --------------------------------------
                                    NOTARY PUBLIC in and for the State of
                                    Washington, residing at Redmond, WA
                                    My Commission Expires:  2/14/96

                                                                      [SEAL]


                                       4
<PAGE>
 
                                     TABLE A
                           TO SIXTH AMENDMENT TO LEASE

<TABLE>
<CAPTION>
                                                                                      BASIC
               NATURE OF        AMENDMENT                FLOOR AREA      REVISED      RENTAL        REVISED
DATE            CHANGE           SECTION    BUILDING       CHANGE       FLOOR AREA    CHANGE     BASIC RENTAL
----            ------           -------    --------       ------       ----------    ------     ------------
<S>           <C>                    <C>       <C>        <C>             <C>      <C>             <C>
15-May-95     Vacate Bldg 2          1         2          (14,503)        35,546          0.00     55,785.44
              Premises

31-May-95     Delete Bldg 2          1         2                0         35,546    (13,554.11)    42,231.33
              Premises

01-Jun-95     Add Bldg 14            2         14          15,000         50,546     15,450.00     57,681.33
              Premises

01-Jan-97*    Add 6th                3         14           7,206         57,752      7,422.18     65,103.51
              Expansion Area

01-Jan-97     Rental rate            4         14               0         57,752      1,110.30     66,213.81
              Increase

*or earlier per Section 3                                                                          01-May-95
</TABLE>
<PAGE>
 
                                  BUILDING 14

                                  [FLOOR PLAN]

                                  FIRST FLOOR
<PAGE>
 
                                  BUILDING 14

                                  [FLOOR PLAN]

                                  SECOND FLOOR
<PAGE>
 
                            FIFTH AMENDMENT TO LEASE


     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee" as amended by That certain FIRST ADDENDUM
TO LEASE dated August 19, 1991, by that certain SECOND AMENDMENT TO LEASE dated
June 1, 1992, by that certain THIRD AMENDMENT TO LEASE dated October 15, 1992
and by that certain FOURTH AMENDMENT OF LEASE dated August 24, 1993 is amended
as set out below. Capitalized terms used herein if not defined herein have the
meaning given them in the Lease, as previously amended.

     1. As of August 15, 1994, Section 1 of the Lease is amended to provide that
certain newly constructed second floor premises in Building 13 comprising an
area of approximately 1,775 square feet is added to the Premises, bringing the
total rentable area of the Premises to 35,546 square feet.

     2. As of October 1, 1994, Section 1 of the Lease is amended to provide that
the premises now occupied by Cascade Controls, Inc. and Express Business
Systems, Inc., an area of approximately 14,503 square feet is added to the
Premises (the "Building 2 Premises"), bringing the total rentable area of the
Premises to 50,049 square feet. The Building 2 Premises is delineated on the
drawing attached hereto as Exhibit "A".

     3. Lessee shall accept the Building 2 Premises "as is"; Lessor shall not be
obligated to expend any sums for Tenant Improvements in connection with the
Building 2 Premises. Lessor consents to Lessee's construction of a second floor
area in the portion at the premises now occupied by Express Business Systems so
long as City of Redmond requirements are fully met by Lessee and the cost
thereof is borne by Lessee. Such area, if built, shall be referred to as the
"Fifth Expansion Premises".

     4. From and after August 15, 1994, the Basic Rental for the Premises, shall
increase by the amount of $692.25 for a total Basic Rental amount of $42,231.33.
>From and after October 1, 1994, the Basic Rental for the Premises, shall
increase by the further amount of $13,554.11 for a total Basic Rental amount of
$55,785.44.

     5. The term of the Lease is hereby extended to December 31, 1999.

     6. If the Fifth Expansion Premises is built, the area of that portion of
the Premises shall be added to the Lease by further amendment and Basic Rental
shall be charged thereon at the rate of $0.39 per square foot per month.

     7. All conditions under this Lease to be performed by the Lessor have been
satisfied; all non-monetary conditions under this Lease to be performed by the
Lessor have been satisfied; there are no existing claims, defenses or offsets
which the Lessee has against the enforcement of this Lease by Lessor.

     8. Except as expressly amended by this agreement, the terms and conditions
of the Lease, as previously amended, remain in full force and effect and are
hereby affirmed and ratified.

     9. Lessor grants Lessee a first right of refusal to lease the space in
Building 13 now occupied by Cadman Gravel on the following alternate terms:

          (a) Upon receipt of a bona fide offer to lease said premises, Lessor
     shall notify Lessee of such offer. For a period of five days thereafter,
     Lessee shall have the right to lease said premises from Lessor. If Lessee
     has not notified Lessor of its election to so lease said premises within
     the five day period, Lessee's rights to the Cadman premises shall expire.

          (b) If Lessor has not received notice of the receipt of a bona fide
     offer to lease per subsection 9a) above by November 25, 1996, Lessee shall
     have five days thereafter to exercise its right of first 


                                       1
<PAGE>
 
     refusal. If Lessee has not notified Lessor of its election to so lease said
     premises within the five day period, Lessee's rights to the Cadman premises
     shall expire.

     In either instance, if Lessee elects to lease said premises, the Lease
shall be amended adding said premises with the following terms:

          (a) The Basic Rental shall be upon the following schedule: $1.00
     PSFNNN for the period prior to December, 1996, $1.05 PSFNNN for the period
     of December, 1996 - November, 1998 and $1.10 PSFNNN thereafter. "PSFNNN"
     shall mean per rentable square foot of the Premises each month, not
     including the triple net charges imposed as Additional Rental in Section 6.
     Rental shall be abated for the first two months following Lease
     Commencement.

          (b) Lease Commencement shall be December 1, 1996 or such earlier date
     as Cadman shall vacate the premises.

          (c) Lessee shall accept the Cadman premises in its then `as is'
     condition.

     10. The Effective Date of this amendment shall be the date hereof.



                                       2
<PAGE>
 
     DATED this 9th day of September, 1994.


                                                  LESSOR:

                                                  /s/ Michael R. Mastro
                                                  ------------------------------
                                                  Michael R. Mastro


                                                  REDMOND EAST ASSOCIATES


                                                  By /s/ Michael R. Mastro
                                                    ----------------------------
                                                  Name: Michael R. Mastro
                                                  Title: General Partner


                                                  LESSEE:

                                                  INCONTROL, INC.

                                                  By /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                  Name: [ILLEGIBLE]
                                                       -------------------------
                                                  Title: VP Finance
                                                        ------------------------


                                       3
<PAGE>
 
STATE OF WASHINGTON           )
                              )ss.
COUNTY OF KING                )

     On this, 20 day of September, 1994 before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Michael R. Mastro, to me known, and acknowledged to me that
he signed and sealed the foregoing instrument as his free and voluntary act and
deed, for the uses and purposes therein mentioned.

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


       [SEAL]                  /s/ Donna J. Reid                                
   DONNA J. REID               -------------------------------------------------
 COMMISSION EXPIRES            NOTARY PUBLIC in and for the State of Washington,
       NOTARY                  residing at                                      
       PUBLIC                      AUBURN                                       
      2/17/98                  -------------------------------------
STATE OF WASHINGTON            My commission expires 2/17/98                    
                                                    ----------------




STATE OF WASHINGTON           )
                              )ss.
COUNTY OF KING                )

     On this day 20 day of September, 1994 before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Michael R. Mastro, to me known to be a General Partner of
REDMOND EAST ASSOCIATES, and on behalf of such general partnership, acknowledged
to me that he signed and sealed the foregoing instrument as the free and
voluntary act and deed of said general partnership, for the uses and purposes
therein mentioned.

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


       [SEAL]                  /s/ Donna J. Reid                                
   DONNA J. REID               -------------------------------------------------
 COMMISSION EXPIRES            NOTARY PUBLIC in and for the State of Washington,
       NOTARY                  residing at                                      
       PUBLIC                      AUBURN                                       
      2/17/98                  -------------------------------------------------
STATE OF WASHINGTON            My commission expires 2/17/98                    
                                                    ----------------------------



                                        4
<PAGE>
 
STATE OF WASHINGTON           )
                              )ss.
COUNTY OF KING                )

     On this 23 day of Sept, 1994 before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared DONALD SEATON, to me known to be the VP FINANCE of INCONTROL, INC., a
Washington corporation, the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and
on oath stated that he was authorized to execute said instrument and that the
seal affixed, if any, is the corporate seal of said corporation.

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


               [SEAL]
           NOTARY PUBLIC
        STATE OF WASHINGTON
            JAMES CLARK
My Appointment Expires on JUN 15, 1995

                               /s/ James Clark
                               -------------------------------------------------
                               NOTARY PUBLIC in and for the State of Washington,
                               residing at
                                    Issaquah
                               -------------------------------------------------
                               My commission expires 6-15-96
                                                     -------------------------


                                        5
<PAGE>
 
                            FOURTH AMENDMENT TO LEASE

     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee", as amended by that certain FIRST ADDENDUM
TO LEASE dated August 19, 1991 by that certain SECOND AMENDMENT TO LEASE dated
June 1, 1992 and by that certain THIRD AMENDMENT TO LEASE dated October 15,
1992, is amended as set out below. Capitalized terms used herein if not defined
herein have the meaning given them in the Lease, as previously amended.

     1. As of the Effective Date of this Amendment, Section 1 of the Lease is
amended to provide that a portion of the area previously occupied by Cook
Newhouse & Associates, Inc., an area of approximately 8,173 square feet and, on
the drawing attached hereto as Exhibit "A", described as "CNA", is added to the
Premises (the "Fourth Expansion Premises"), bringing the total rentable area of
the Premises to 33,771 square feet.

     2. Lessee shall accept the Fourth Expansion Premises "as is"; Lessor shall
not be obligated to expend any sums for Tenant improvements in connection with
the Fourth Expansion Premises.

     3. On the Effective Date, Lessee shall pay Lessor a one time payment as
consideration for this Amendment in the amount of $13,000.00.

     4. From and after the Effective Date of this Amendment, the Basic Rental
for the Premises, in its entirety, shall be $41,539.08 per month.

     5. Lessee shall also make a further cash security deposit in accordance
with Section 7 of the Lease in the total sum of $9,000 on the Effective Date of
this Amendment; thereupon the total security deposit held by Lessor shall be
$30,500.

     6. Lessor and Lessee agree that Section 12 of the Lease, as amended, shall
be interpreted so as to require Lessee to maintain the heating, ventilation and
air conditioning systems of the Premises.

     7. The HVAC equipment serving the Building lobby, a common area of the
Building, also serves First and Second Expansion Premises. Lessee agrees to
maintain such system and to pay utilities required therefor. Annually, Lessee
shall invoice Lessor for 33% of any out of pocket costs therefor and Lessor
shall pay such sum, subject to review of the accuracy of such invoice by Lessor.
Such expenses paid by Lessor shall nevertheless be Operating Expenses to be
shared by all Building tenants, including Lessee.

     8. All conditions under this Lease to be performed by the Lessor and Lessee
have been satisfied; there are no existing claims, defenses or offsets which the
Lessee has against the enforcement of this Lease by Lessor.

     9. Except as expressly amended by this agreement, the terms and conditions
of the Lease, as previously amended, remain in full force and effect and are
hereby affirmed and ratified.

     10. The Effective Date shall be the date identified as such in a written
notice to be delivered to Lessee by Cook Newhouse & Associates, Inc. If the
Effective Date has not occurred on or before December 31, 1993, this Amendment
shall be void. If this amendment has not been fully executed by September 3,
1993, it shall be void.

                                        1
<PAGE>
 
DATED this 24th day of August, 1993.


 
                                             LESSOR:

                                             /s/ Michael R. Mastro
                                             ----------------------
                                             Michael R. Mastro


                                             REDMOND EAST ASSOCIATES

                                             By  /s/ Michael R. Mastro
                                             -------------------------
                                             Name: Michael R. Mastro
                                             Title: General Partner


                                             LESSEE:

                                             INCONTROL, INC.

                                             By /s/ John Adams
                                             ----------------------
                                             Name: John Adams
                                             Title: Vice President



                                        2
<PAGE>
 
STATE OF WASHINGTON                )
                                   )ss.
COUNTY OF KING                     )


     On this 25 day of August, 1993, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known, and acknowledged to me that he signed
and sealed the foregoing instrument as his free and voluntary act and deed, for
the uses and purposes therein mentioned.

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


[SEAL]

                          /s/ Donna J. Reid
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Auburn
                          -----------------------------------------------------
                          My commission expires 2/17/94

NOTARY

STATE OF WASHINGTON                 )
                                    )ss.
COUNTY OF KING                      )

     On this 25 day of August, 1993, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known to be a General Partner of REDMOND EAST
ASSOCIATES, and on behalf of such general partnership, acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed of said general partnership, for the uses and purposes therein mentioned.

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



[SEAL]

                          /s/ Donna J. Reid
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Auburn
                          -----------------------------------------------------
                          My commission expires 2/17/94



                                        3
<PAGE>
 
STATE OF WASHINGTON               )
                                  )ss.
COUNTY OF KING                    )

     On this 24 day of Aug, 1993, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared John Adams, to me known to be the VP of INCONTROL, INC., a Washington
corporation, the corporation that executed the within and foregoing instrument,
and acknowledged said instrument to be the free and voluntary act and deed of
said corporation, for the uses and purposes therein mentioned, and on oath
stated that he was authorized to execute said instrument and that the seal
affixed, if any, is the corporate seal of said corporation.

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



                          /s/ James [ILLEGIBLE]
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          Residing at

                          Bellevue
                          -------------------------------------------------
                          My commission expires 6-15-96




                                        4
<PAGE>
 
                            THIRD AMENDMENT TO LEASE


     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee" as amended by that certain FIRST ADDENDUM
TO LEASE dated August 19, 1991 and by that certain SECOND AMENDMENT TO LEASE
dated June 1, 1992, is amended as set out below. Capitalized terms used herein
if not defined herein have the meaning given them in the Lease.

     1. As of November 23, 1992, Section 1 of the Lease is amended to provide
that a portion of the area previously occupied by Mike Fisher Enterprises d/b/a
Proshow USA, an area of approximately 6,500 square feet and, on the drawing
attached hereto as Exhibit "A" described as "Proshow", is added to the Premises
(the "First Expansion Premises"), bringing the total rentable area of the
Premises to 22,820 square feet. As of January 1, 1993, Section 1 of the Lease is
amended to provide that the remaining portion of the area previously occupied by
Mike Fisher Enterprises d/b/a Proshow USA, an area of approximately 458 square
feet and, on the drawing attached hereto as Exhibit "A", described as "Studio",
shall be added to the Premises (the "Second Expansion Premises"), bringing the
total rentable area of the Premises to 23,278 square feet.

     2. Section 12 of the First Addendum to Lease dated August 19, 1991 is
deleted.

     3. Lessee shall accept the First Expansion Premises and the Second
Expansion Premises "as is"; Lessor shall not be obligated to expend any sums for
Tenant Improvements for the First Expansion Premises or the Second Expansion
Premises.

     4. At its cost, Lessee shall be entitled to construct additional second
floor area to the Second Expansion Premises of approximately 1,280 square feet
(the "Third Expansion Premises"). The Third Expansion Premises shall become a
part of the Premises upon issuance of a certificate of Occupancy for that space
(the "Occupancy Date").

     5. The Basic Rental for the First Expansion Premises, Second Expansion
Premises and Third Expansion Premises shall be $1.13 per square foot per month
from and after the respective date on which each of said areas become a part of
the Premises.

     6. Lessor shall enter into an agreement concurrently with this Third
Amendment to Lease with Mike Fisher Enterprises which is attached hereto as
Exhibit B (the "Proshow Agreement"). If the Proshow Agreement does not become
effective by its terms, this Amendment shall not become effective. The date on
which the Proshow Agreement becomes effective shall be the Effective Date of
this Third Amendment to Lease.

     7. Lessee shall pay to Lessor the one-time sum of $18,611.28 as
consideration for this Amendment on the Effective Date of this Amendment.

     8. Lessee shall also make a further cash security deposit in accordance
with Section 7 of the Lease in the total sum of $6,500 on the Effective Date of
this Amendment.

     9. All conditions under this Lease to be performed by the Lessor and Lessee
have been satisfied; all required contributions by Lessor to Lessee on account
of Lessor's improvements have been received; there are no existing claims,
defenses or offsets which the Lessee has against the enforcement of this Lease
by Lessor.

     10. Except as expressly amended by this agreement, the terms and conditions
of the Lease remain in full force and effect and are hereby affirmed and
ratified.


                                        1
<PAGE>
 
DATED this 15 day of October, 1992.

                                             LESSOR:

                                             REDMOND EAST ASSOCIATES


                                             /s/ Michael R. Mastro
                                             ----------------------
                                             Name: Michael R. Mastro
                                             Title:  General Partner


                                             By  /s/ Stavros Anastasiou
                                             ---------------------------
                                             Name: Stavros Anastasiou
                                             Title: General Partner


                                             By  /s/ Perry Vyzis
                                             ---------------------------
                                             Name: Perry Vyzis
                                             Title: General Partner




                                             LESSEE:

                                             INCONTROL, INC.



                                             By /s/ Kurt C. Wheeler
                                             ---------------------------
                                             Name: Kurt C. Wheeler
                                             Title: CEO

                                       2
<PAGE>
 
STATE OF WASHINGTON               )
                                  )ss.
COUNTY OF KING                    )

     On this 15 day of Oct, 1992, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known to be a General Partner of REDMOND EAST
ASSOCIATES, and on behalf of such general partnership, acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed of said general partnership, for the uses and purposes therein mentioned.

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


                          /s/ James [ILLEGIBLE]
                          ------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Bellevue
                          ------------------------------------------------
                          My commission expires 6-15-96



STATE OF WASHINGTON               )
                                  )ss.
COUNTY OF KING                    )


     On this 15 day of Oct, 1992, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Stavros Anastasiou, to me known to be a General Partner of REDMOND EAST
ASSOCIATES, and on behalf of such general partnership, acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed of said general partnership, for the uses and purposes therein mentioned.

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


                          /s/ James [ILLEGIBLE]
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Bellevue
                          -------------------------------------------------
                          My commission expires 6-15-96



                                        3
<PAGE>
 
STATE OF WASHINGTON        )
                           )ss.
COUNTY OF KING             )

     On this 20th day of October, 1992, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Perry Vyzis, to me known to be a General Partner of REDMOND
EAST ASSOCIATES, and on behalf of such general partnership, acknowledged to me
that he signed and sealed the foregoing instrument as the free and voluntary act
and deed of said general partnership, for the uses and purposes therein
mentioned.

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


                          /s/ D.L. Moreau
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Lake Stevens 
                          -------------------------------------------------
                          My commission expires 6-15-96




STATE OF WASHINGTON        )
                           )ss.
COUNTY OF KING             )

     On this 15 day of Oct, 1992, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn, personally
appeared Kurt Wheeler, to me known to be the CEO of INCONTROL, INC., a
Washington corporation, the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and
on oath stated that he was authorized to execute said instrument and that the
seal affixed, if any, is the corporate seal of said corporation.

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


                          /s/ James [ILLEGIBLE]
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Bellevue
                          -----------------------------------------------------
                          My commission expires 6-15-96


                                        4
<PAGE>
 
                                                                       EXHIBIT B



                               AMENDMENT TO LEASE

     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated Match 5, 1991, between
REDMOND EAST ASSOCIATES, as "Lessor", and MIKE FISHER ENTERPRISES, INC. and MIKE
FISHER individually, as "Lessee", is amended as set out below. Capitalized terms
used herein if not defined herein have she meaning given them in the Lease.

     1. The term of the Lease as set out in Section 4 is amended to end October
31, 1991 as to the Primary Premises and December 31, 1992 as to the Studio. The
Primary Premises and Studio are identified on attached Exhibit A, attached
hereto and incorporated herein.

     2. Sections 41(c) and 41(f) of the Lease are hereby deleted.

     3. Lessee shall not be entitled to hold-over at the end of the respective
Lease terms.

     4. The Effective Date of this Amendment to Lease shall be October 9, 1992
but shall be extended at Lessee's option by notice to Lessor, day for day until
it has executed a new lease at other premises. If this Amendment to Lease has
not become effective by November 15, 1992, this Amendment to Ease shall not
become effective.

     5. Lessor shall pay to Lessee the one-time sum of $18,611.28 as
consideration for this Amendment on the Effective Date of this Amendment.

     6. Lessor shall return the security deposit pursuant to Section 7 of the
Lease on the effective date if the condition of Section 7 have otherwise been
met by Lessee. The standard of measuring Lessee's performance under Section 7
shall be acceptance of the Premises by Incontrol, Inc.

     7. Upon full termination of the Lease, Lessee shall remove its sign from
the Building in a manner so as to minimize any damage to the Building. Lessor
shall be responsible for touch up and restoration of the Building.

     8. All conditions under this Lease to be performed by the Lessor and Lessee
have been satisfied; all required contributions by Lessor to Lessee on account
of Lessor's improvements have been received; there are no existing claims,
defenses or offsets which the lessee has against the enforcement of this Lease
by Lessor.

     9. Except as expressly amended by this agreement, the terms and conditions
of the Lease remain in full force and effect and are hereby affirmed and
ratified. 


                                        1
<PAGE>
 
DATED this ____ day of October, 1992.

                                             LESSOR:

                                             REDMOND EAST ASSOCIATES


                                             By: 
                                             ---------------------------
                                             Name:  Michael R. Mastro
                                             Title:  General Partner


                                             By  
                                             ---------------------------
                                             Name: Stavros Anastasiou
                                             Title: General Partner


                                             By  
                                             ---------------------------
                                             Name: Perry Vyzis
                                             Title: General Partner




                                             LESSEE:



                                             MIKE FISHER ENTERPRISES, INC.

                                             By /s/ Michael Fisher              
                                             -----------------------------
                                             Name: Mike Fisher 
                                             Title: PRESIDENT 


                                             /s/ Mike Fisher 
                                             -----------------------------
                                             Mike Fisher, an individual


                                        2
<PAGE>
 
                                   [GRAPHIC]

                           Floor Plan - Second Floor
<PAGE>
 
STATE OF WASHINGTON               )
                                  )ss.
COUNTY OF KING                    )

     On this ___ day of _____ 19__, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known to be a General Partner of REDMOND EAST
ASSOCIATES, and on behalf of such general partnership, acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed of said general partnership, for the uses and purposes therein mentioned.

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



                          
                          -----------------------------------------------------
                          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 _______19__, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Michael R. Mastro, to me known to be a General Partner of REDMOND EAST
ASSOCIATES, and on behalf of such general partnership, acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed of said general partnership, for the uses and purposes therein mentioned.

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



                         
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          
                          -------------------------------------------------
                          My commission expires 
                                                ---------------------------
                          


                                       3
<PAGE>
 
STATE OF WASHINGTON               )
                                  )ss.
COUNTY OF KING                    )

     On this ___day of _________, 19__, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Perry Vyzis, to me known to be a General Partner of
REDMOND EAST ASSOCIATES, and on behalf of such general partnership, acknowledged
to me that he signed and sealed the foregoing instrument as the free and
voluntary act and deed of said general partnership, for the uses and purposes
therein mentioned.

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



                          
                          -------------------------------------------------
                          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 ___________, 19__, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Mike C. Fisher, to me known to be the president of MIKE
FISHER ENTERPRISES, a Washington corporation, the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.

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


[SEAL]

                          /s/ Cindy Nation
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Batrell, WA
                          -------------------------------------------------
                          My commission expires 3/25/96
                                                ---------------------------



                                       4
<PAGE>
 
STATE OF WASHINGTON               )
                                  )ss.
COUNTY OF KING                    )

     On this day 8 of October, 1992, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Mike Fisher, to me known, and acknowledged to me that he signed and
sealed the foregoing instrument as his free and voluntary act and deed, for the
uses and purposes therein mentioned.

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


[SEAL]

                          /s/ Cindy Nation
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Batrell, WA
                          -------------------------------------------------
                          My commission expires 3/25/96



                                       5
<PAGE>
 
                            SECOND AMENDMENT TO LEASE

     THAT CERTAIN REDMOND EAST LEASE ("Lease") dated August 19, 1991, between
MICHAEL R. MASTRO and REDMOND EAST ASSOCIATES, as "Lessor", and INCONTROL, INC.,
a Washington corporation, as "Lessee", as amended by that certain FIRST ADDENDUM
TO LEASE dated August 19, 1991, is amended as set out below. Capitalized terms
used herein if not defined herein have the meaning given them in the Lease.

     1. Section 1 of the Lease is amended to provide that the rentable area of
the Premises is 16,320 square feet.

     2. The Commencement Date of the Lease was December 11, 1991. The last day
of the initial Lease term is December 31, 1996.

     3. The final sentence of Section 10(a) of the Lease is deleted. The
following sentence is added as the final sentence in Section 10(a) of the Lease:
"After Lessor has spent $25.00 per rentable square foot of the Premises, for
each $1.00 per rentable square foot of Tenant Improvement Allowance spent by
Lessor thereafter, the Basic Rental shall be increased by $0.0222. per rentable
square foot per month."

     4. Notwithstanding anything in Section 2 of the First Addendum to Lease to
the contrary, Basic Rental and Additional Rental shall not thereafter be abated
for any portion of the Delayed Occupancy Space which has been occupied by Lessee
for the conduct of its business. As of the date hereof, the Delayed Occupancy
Space is comprised of 6,908 square feet.

     5. The parties agree that the unpaid design allowance provided for in
Section 10(c) of the Lease is $1,970.80. Neither Lessor nor Lessee shall have a
claim against the other for the payment of any other sum on account of the
design allowance.

     6. The cost of the tenant improvements chargeable against the Tenant
Improvement Allowance have been $349,317.00 to date. Lessor remains obligated to
provide a Tenant Improvement Allowance for the Delayed Occupancy Space of
$123,175, without any increase in the Basic Rental. Lessor remains obligated to
provide a further Tenant Improvement Allowance for the Delayed Occupancy Space
of up to but not exceeding $98,708, with an increase in the Basic Rental as set
out in Section 10(a) of the Lease.

     7. The effective date of these amendments to the Lease is the Commencement
Date.

     8. Except as expressly amended by this agreement, the terms and conditions
of the Lease remain in full force and effect and are hereby affirmed and
ratified.


                                        1
<PAGE>
 
DATED this ____ day of June, 1992.
                                             LESSOR:

                                             /s/ Michael R. Mastro
                                             ----------------------
                                             Michael R. Mastro


                                             REDMOND EAST ASSOCIATES

                                             By /s/ Michael R. Mastro
                                             ----------------------
                                             Name: Michael R. Mastro
                                             Title: General Partner


                                             By  /s/ Stavros Anastasiou
                                             ---------------------------
                                             Name: Stavros Anastasiou
                                             Title: General Partner


                                             By  /s/ Perry Vyzis
                                             ---------------------------
                                             Name: Perry Vyzis
                                             Title: General Partner



                                             LESSEE:

                                             INCONTROL, INC.



                                             By /s/ Kurt C. Wheeler
                                             ---------------------------
                                             Name: Kurt C. Wheeler
                                             Title: C.E.O.



                                        2
<PAGE>
 
STATE OF WASHINGTON       )
                          )ss.
COUNTY OF KING            )

     On this 16 day of September, 1992, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Michael R. Mastro, to me known, and acknowledged to me that
he signed and sealed the foregoing instrument as the free and voluntary act and
deed, for the uses and purposes therein mentioned.

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

[SEAL]

                          /s/ Donna J. Reid
                          -------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Auburn
                          -------------------------------------------------
                          My commission expires 2/17/94


STATE OF WASHINGTON       )
                          )ss.
COUNTY OF KING            )

     On this 16th day of September, 1992, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Michael R. Mastro, to me known to be a General Partner of
REDMOND EAST ASSOCIATES, and on behalf of such general partnership, acknowledged
to me that he signed and sealed the foregoing instrument as the free and
voluntary act and deed of said general partnership, for the uses and purposes
therein mentioned.

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

[SEAL]

                          /s/ Donna J. Reid
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at

                          Auburn
                          -----------------------------------------------------
                          My commission expires 2/17/94


                                        3
<PAGE>
 
STATE OF WASHINGTON      )
                         )ss.
COUNTY OF KING           )

     On this 18th day of September, 1992, before me, the undersigned, a Notary
           -------      ----------------
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Stavros Anastasiou, to me known to be a General Partner of
REDMOND EAST ASSOCIATES, and on behalf of such general partnership, acknowledged
to me that he signed and sealed the foregoing instrument as the free and
voluntary act and deed of said general partnership, for the uses and purposes
therein mentioned.

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


                          /s/ Deanna L. Moreau
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at
                          Lake Stevens
                          -----------------------------------------------------
                          My commission expires 6/16/96
                                               --------


STATE OF WASHINGTON      )
                         )ss.
COUNTY OF KING           )

     On this 18th day of September, 1992, before me, the undersigned, a Notary
            ------       ---------------
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Perry Vyzis, to me known to be a General Partner of REDMOND
EAST ASSOCIATES, and on behalf of such general partnership, acknowledged to me
that he signed and sealed the foregoing instrument as the free and voluntary act
and deed of said general partnership, for the uses and purposes therein
mentioned.

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

                          /s/ Deanna L. Moreau
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at
                          Lake Stevens
                          -----------------------------------------------------
                          My commission expires 6/16/96
                                               --------


                                        4
<PAGE>
 
STATE OF WASHINGTON      )
                         )ss.
COUNTY OF KING           )

     On this 15th day of Sept., 19__, before me, the undersigned, a Notary
            ------      ------
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Kurt Wheeler, to me known to be the CEO of INCONTROL, INC.,
                   -------------                       -----
a Washington corporation, the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and
on oath stated that he was authorized to execute said instrument and that the
seal affixed, if any, is the corporate seal of said corporation.

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

                          /s/ James [ILLEGIBLE]
                          -----------------------------------------------------
                          NOTARY PUBLIC in and for the State of Washington,
                          residing at
                          Bellevue
                          -----------------------------------------------------
                          My commission expires 6/15/96
                                               --------



                                        5
<PAGE>
 
                             FIRST ADDENDUM TO LEASE
                             -----------------------

     THIS FIRST ADDENDUM TO LEASE ("Addendum") is dated for reference purposes
as of Aug 19th, 1991, and is made between MICHAEL R. MASTRO AND REDMOND EAST
     ---------
ASSOCIATES (collectively called "Lessor") and INCONTROL, INC. (collectively
called "Lessee"), in the real property situated in City of Redmond, King County,
Washington, (the "Building") to be a part of that certain lease, of even date
herewith between Lessor and Lessee (herein the "Lease Form") concerning 15,582
rentable square feet (the "Premises") in the real property situated in the City
of Redmond, King County, Washington, (the Building"). Lessor and Lessee agree
that the Lease Form is hereby modified and supplemented as follows:

     1. Commencement Date: Notwithstanding anything to the contrary in the Lease
        -----------------
Form:

     A. The Lease shall commence (the "Commencement Date") on the later of (i)
September 1, 1991 or (ii) the date by which all of the following have occurred:
(a) Lessor has substantially completed the Lessee Improvements (defined below)
in accordance with the Lease, (b) Lessor has delivered possession of the
Premises to Lessee; and (c) Lessor has obtained all approvals and permits form
the appropriate governmental authorities required for the legal occupancy of the
Premises for Lessee's intended use.

     B. If the Commencement Date has not occurred for any reason whatsoever on
or before January 1, 1992, then in addition to Lessee's other rights or
remedies, (i) Lessee may terminate this Lease by written notice to Lessor,
whereupon any monies previously paid by Lessee to Lessor shall be reimbursed to
Lessee; or (ii) at Lessee's election, the date Lessee is otherwise obliged to
commence payment of rent shall be delayed by one day for each day that the
Commencement Date is delayed beyond January 2, 1992.

     2. Rent Abatement for Delayed Occupancy Space: Notwithstanding anything to
        ------------------------------------------
the contrary in the Lease Form:

     A. Basic Rental and Additional Rental shall not commence on the Delayed
Occupancy Space until the later to occur of (i) one year after the Commencement
Date or (ii) after all the conditions set forth in Paragraph 1a (ii) of this
Addendum have been satisfied as they relate to the Delayed Occupancy Space.

     B. The parties acknowledge that the square footage of 7,926 square feet for
the Delayed Occupancy Space is merely an estimate of the actual square footage
of such space. Exhibit B and the actual square footage of the Delayed Occupancy
               ---------
Space (and the resulting rental abatement) shall be determined by Lessee in its
sole discretion, and once determined, Exhibit B and the rental abatement shall
                                     ----------
be adjusted appropriately; provided, however, in no event shall the Delayed
Occupancy Space exceed 8,352 square feet.

     3. Expenses. Notwithstanding anything to the contrary in the Lease Form:
        --------
     A. In no event shall Lessee have any obligation to perform or to pay
directly, or to reimburse Lessor for, all or any portion of the following
repairs, maintenance, improvements, replacements, premiums, claims, losses,
fees, charges, costs and expenses (collectively, "Costs"), nor shall any portion
of the Lessee Improvement allowance be applied to such costs:

          (i) Losses Caused By Others: Costs occasioned by the act, omission or
              -----------------------
     violation of law by Lessor, any other occupant of the Building, or their
     respective agents, employees or contractors.

          (ii) Capital Improvements: Costs relating to repairs, alterations,
               --------------------
     improvements, except equipment and tools which would properly be
     capitalized under generally accepted accounting principles, expect to the
     extent that the Lessee's share of such Cost during any twelve-month period
     of the Lease is equitably determined based on Lessee's usage and amortized
     over the useful life of the capital item in question.


                                       1
<PAGE>
 
          (iii) Reimbursable Expenses: Costs for which Lessor has a right of
                ---------------------
     reimbursement from parties other that Lessee.

          (iv) Construction Defects: Costs to correct construction defect in the
               --------------------
     Premises or the Building or to comply with any CC&R's, underwriter's
     requirement or Law applicable to the Premises or the Building on the
     Commencement Date.

          (v) Utilities or Services: Costs (i) arising from the disproportionate
              ---------------------
     use of any utility or service supplied by Lessor to any other occupant of
     the Building, or (ii) associated with utilities and services of a type not
     provided to Lessee.

          (vi) Interior Improvements: The cost of any renovation, improvement,
               ---------------------
     painting or redecorating of any portion of the Building not made available
     for Lessee's use.

          (vii) Leasing Expenses: Fees, commissions, attorney's fees, Costs or
                ----------------
     other disbursement incurred in connection with marketing the Building or
     negotiations or disputes with any other occupant of the Building.

          (viii) Mortgages: Interest, charges and fees incurred on debt,
                 ---------
     payments on mortgages and rent under ground leases.

          (ix) Concessions and Parking: costs incurred in connection with the
               -----------------------
     operation of any parking or commercial concession within the Building.

          (x) Capital Leases: Lease payments and Costs for capital machinery and
              --------------
     equipment, such as air conditioners, elevators, and the like.

          (xi) Art: Costs of sculptures, fountains, paintings and other art
               ---
     objects.

          (xii) Insurance: Insurance Costs for coverage not customarily paid by
                ---------
     tenants of similar projects in the vicinity of the Premises, increases in
     insurance Costs caused by the activities of another occupant of the
     Building, insurance deductibles, and co-insurance payments.

          (xiii) Hazardous Materials: Costs incurred to investigate the presence
                 -------------------
     of any material which is now or hereinafter regulated by any governmental
     authority or which poses a hazard to the environment or human life
     ("Hazardous Material"), Costs to respond to any claim of Hazardous Material
     contamination or damage, Costs to remove Hazardous Material from the
     Building and any judgments or other Costs incurred in connection with any
     Hazardous Material exposure or releases, except to the extent caused by the
     storage, use or disposal of the Hazardous Material in question by Lessee.

          (xiv) Management: Any fee, profit or compensation retained by Lessor
                ----------
     or its affiliates for management and administration of the Building in
     excess of the management fee which would be charged by a professional
     management service for operation of comparable projects in the vicinity.

          (xv) Property Taxes: Any increase in property taxes occasioned by or
               --------------
     relating to a change of ownership of the real property of which the
     Premises is a part.

     B. Lessee's obligation to reimburse Lessor for Operating Expenses for all
items except for property taxes, janitorial and utilities (the "Controllable
Operating Expenses") shall not exceed Eleven Point Six Cents ($0.116) per square
foot per year. Notwithstanding the proceeding, the cap amount for the
Controllable Operating Expense shall increase each year according to increases
in the local CPI.

     4. Acceptance of Premises: Notwithstanding anything to the contrary in the
        ----------------------
Lease Form:

     Leesee's acceptance of the Premises shall not be deemed a waver of Lessee's
right to have defects in the Lessee Improvements or the Premises repaired at
Lessor's sole expense provided Lessee gives Lessor written notice of (i) any
patent


                                       2
<PAGE>
 
defect within thirty (30) days after Lessee takes occupancy or (ii) any latent
defect within one (1) year after Lessee takes occupancy. Lessee shall give
notice to Lessor whenever any such defect becomes reasonably apparent, and
Lessor shall repair such defect as soon as practicable. Lessor also hereby
assigns to Lessee all warranties with respect to the Premises which would reduce
Lessee's maintenance obligations hereunder and shall cooperate with Lessee to
enforce all such warranties.

     5. Repairs and Maintenance: Notwithstanding anything to the contrary in the
        -----------------------
Lease Form:

     Lessor shall perform and construct, and Lessee shall have no responsibility
to perform or construct, any repair, maintenance or improvement (i) necessitated
by the acts or omissions of Lessor or any other occupant of the Building, or
their respective agents, employees or contractors, (ii) occasioned by fire, acts
of God or other casualty or by the exercise of the power of eminent domain,
(iii) required as a consequence of any violation of law or construction defect
in the Premises or the Building as of the Commencement Date, (iv) for which
Lessor has a right of reimbursement from others, (v) which would be treated as a
"capital expenditure" under generally accepted accounting principles, (vi) to
the hearing, ventilating, air conditioning, electrical, water, sewer, and
plumbing systems serving the Premises or the Building, and (vii) to any portion
of the Building outside of the demising walls of the Premises. Lessee's
obligation, if any, to reimburse Lessor for the costs of such repairs,
maintenance and improvements shall be governed by the other provisions of this
Lease.

     6. Alterations, Additions and Improvements: Notwithstanding anything to
        ---------------------------------------
the contrary in the Lease Form:

     A. Nonstructural. Lessee may construct nonconstructural alterations,
        -------------
additions and improvements ("Alterations") in the Premises without Lessor's
prior approval, if the costs of such work does not exceed Five Thousand Dollars
($5,000).

     B. Removal. Upon request, Lessor shall advise Lessee in writing whether it
        -------
reserves the right to require Lessee to remove any Alterations from the Premises
upon termination of the Lease.

     C. Lessee's Property. All Alterations, trade fixtures and personal property
        -----------------
installed in the Premises at Lessee's expense ("Lessee's Property") shall at all
times remain Lessee's property and Lessee shall be entitled to all depreciation,
amortization and other tax benefits with respect thereto. Except for Alterations
which cannot be removed without structural injury to the Premises, at any time
Lessee may remove Lessee's Property from the Premises, provided Lessee repairs
all damage caused by such removal.

     D. Lien Waiver. Lessor shall have no lien or other interest whatsoever in
        -----------
any item of Lessee's Property, or any portion thereof or interest therein
located in the Premises or elsewhere, and Lessor hereby waives all such liens
and interests. Within ten (10) days following Lessee's request, Lessor shall
execute documents in form reasonably acceptable to Lessee to evidence Lessor's
waiver of any right, title, lien or interest in Lessee's Property located in the
Premises.

     7. Lessor's Entry of Premises: Notwithstanding anything to the contrary in
        --------------------------
the Lease Form:

     Lessor and Lessor's agents, except in the case of emergency, shall provide
Lessee with twenty-four (24) hours' notice prior to entry of the Premises. Such
entry by Lessor and Lessor's agents shall not impair Lessee's operations more
than reasonably necessary. During any such entry, Lessor, and Lessor's agents
shall at all times be accompanied by Lessee.

     8. Lessee's Right to Terminate after Casualty. Lessor shall notify Lessee
        ------------------------------------------
within fifteen (15) days following any damage to or destruction of the Premises
(or the Building if such damage or destruction interferes with Lessee's use of
the Premises) the length of time Lessor reasonably estimates to be necessary for
repair or restoration. Lessee shall have the right to terminate the Lease within
fifteen (15) days following receipt of such notice if restoration or repair of
the Premises will take more than one hundred (120) days.


                                       3
<PAGE>
 
     9. Default and Late Charge: Notwithstanding anything to the contrary in the
        -----------------------
Lease Form, (i) Lessee shall not be deemed to be in default, nor shall any late
charge or interest be imposed, on account of Lessee's failure to pay money to
the Lessor, unless Lessee's failure to pay money to the Lessor, unless Lessee's
failure to pay continues for five (5) days after Lessee's actual receipt of
written notice of the delinquency provided, however, that Lessor shall not be
required to give Lessee written notice of any monetary default or delinquency
more than once in any consecutive twelve (12) month period and in such case no
notice shall be required before Lessee shall be deemed to be in default or
subject to the imposition of interest and late charges, and (ii) Lessee shall
not be in default for failing to perform any covenant of this Lease (other than
a covenant to pay money to Lessor) unless Lessee's failure to perform such
covenant continues after Lessee's actual receipt of written notice for a period
of thirty (30) days or such longer time as may reasonably be required to cure
the default.

     10. Subordination: Notwithstanding anything to the contrary in the Lease
         -------------
Form:

     This Lease shall not be subject to or subordinate to any ground or
underlying lease or to any lien, mortgage, deed of trust, or security interest
(collectively referred to as "Security Instruments") now or hereafter affecting
the Premises, nor shall Lessee be required to execute any documents
subordinating this Lease, unless the ground lessor, lender, or other holder of a
Security Instrument to which this Lease shall be subordinated contemporaneously
executes a recognition and nondisturbance agreement in a form customarily used
by institutional first mortgage lenders which (i) provides that this Lease shall
not be terminated so long as lessee is not in default under this Lease and (ii)
recognizes Lessee's rights under this Lease except such Lender shall not be
subject to any amendment to the Lease not consented to by such Lender, any
rental paid for more than one (1) month in advance or any other defense or right
of offset which accrued prior to such lender acquiring ownership of or
possession of the Property. Lessor shall provide Lessee with a recognition and
nondisturbance agreement as set forth above from any existing holder of a
Security Instrument within thirty (30) days of the execution of this Lease.

     11. Surrender. Notwithstanding anything to the contrary in the Lease Form,
         ---------
Lessee obligations to surrender the Premises shall be fulfilled if Lessee
surrenders possession of the Premises in the condition existing at the
commencement of the Lease, ordinary wear and tear, acts of God, casualties,
condemnation, Hazardous Materials (other than those stored, used or disposed of
by Lessee in or about the Premises), and interior improvements which Lessor
states in writing may be surrendered at the termination of the Lease excepted.

     12. Expansion Right: Notwithstanding anything to the contrary in the Lease
         ---------------
Form:

     A. At any time prior to September 1, 1993, Lessee shall have the option, by
giving written notice to Lessor prior to the expiration of said period, to
expand the Premises by 5,000 square feet into space which shall be contiguous to
the original Premises (the "Expansion Premises").

     B. Upon Lessee's exercise of the option to expand, the Expansion Premises
shall be included within the Premises and leased to Lessee pursuant to the
provisions of the Lease and at the same rate per square foot of floor space as
the Basic Rental, Additional Rental, and Lessee Improvements (including an
allowance for the Expansion Premises at the same rate as the allowance for the
original Premises) as set forth in the Lease. Lessee shall have no obligation to
begin paying Basic Rental or Additional Rental until all of the conditions set
forth in Paragraph 1(A)(ii) of this Addendum are satisfied as they relate to the
Expansion Premises.

     C. Prior to commencement of the Lessee Improvements in the Expansion
Premises, Lessor and Lessee shall execute an amendment to this Lease stating the
addition of the Expansion Premises as a part of the Premises and the increased
rental therefor (the "Expansion Amendment").

     D. If Lessor has not completed construction of the Lessee Improvements for
the Expansion Premises within six (6) months after Lessee has exercised its
option, Lessee may terminate the Expansion Amendment.


                                       4
<PAGE>
 
     13. Option to Renew: Notwithstanding anything to the contrary in the Lease
         ---------------
Form:

     A. Rent for Option Term. Lessee and Lessor shall meet after Lessee
        --------------------
exercises its Option to Renew to attempt to agree upon the rent for the option
term. If the parties are unable to agree on the rent for the option term within
ten (10) days of Lessee's exercise, rent shall be set by appraisal as set forth
below (provided in no event shall effective rent exceed $1.14 per square foot
per month).

     B. Appraisal. If it becomes necessary to determine the fair market rental
        ---------
value ("Fair Market Rent") for the Premises by appraisal, real estate
appraiser(s), all of whom shall be members of the American Institute of Real
Estate Appraisers and who have at least five (5) years experience appraising
industrial space located in the vicinity of the Premises shall be appointed and
shall act in accordance with the following procedures:

          (i) If the parties are unable to agree on the Fair Market Rent within
     the allowed time, either party may demand an appraisal by giving written
     notice to the other party, which demand to be effective must state the
     name, address and qualifications of an appraiser selected by the party
     demanding an appraisal (the "Notifying Party"). Within ten (10) days
     following the Notifying Party's appraisal demand, the other party (the
     "Non-Notifying Party") shall either approve the appraiser selected by the
     notifying party or select a second properly qualified appraiser by giving
     written notice of the name, address and qualification of said appraiser to
     the Notifying Party. If the Non-Notifying Party fails to select an
     appraiser within the ten (10) day period, the appraiser selected by the
     Notifying Party shall be deemed selected by both parties and no other
     appraiser shall be selected. If two appraisers are selected, they shall
     select a third appropriately qualified appraiser. If the two appraisers
     fail to select a third qualified appraiser, the third appraiser shall be
     appointed by the then presiding judge of the county where the Premises are
     located upon application by either party.

          (ii) If only one appraiser is selected, that appraiser shall notify
     the parties in a simple letter form of its determination of the Fair Market
     Rent for the Premises within fifteen (15) days following his selection,
     which appraisal shall be conclusively determinative and binding on the
     parties as the appraised Fair Market Rent.

          (iii) If multiple appraisers are selected, the appraisers shall meet
     not later than ten (10) days following the selection of the last appraiser.
     At such meeting the appraisers shall attempt to determine the Fair Market
     Rent for the Premises as of the commencement date of the extended term by
     the agreement of at least two (2) of the appraisers.

          (iv) If two (2) ore more of the appraisers agree on the Fair Market
     Rent for the Premises at the initial meeting, such agreement shall be
     determinative and binding upon the parties hereto and the agreeing
     appraisers shall, in simple letter form executed by the agreeing
     appraisers, forthwith notifying both Lessor and Lessee of the amount set by
     such agreement. If multiple appraisers are selected and two (2) appraisers
     are unable to agree on the Fair Market Rent for the Premises, all
     appraisers shall submit to Lessor and Lessee an independent appraisal of
     the Fair Market Rent for the Premises in simple letter form within twenty
     (20) days following appointment of the final appraiser. The parties shall
     then determine the Fair Market Rent for the Premises by averaging the
     appraisals; provided that any high or low appraisal, differing from the
     middle appraisal by more than ten percent (10%) of the middle appraisal,
     shall be disregarded in calculating the average.

          (v) The appraisers' determination of Fair Market Rent shall be based
     on rental of space of the same age, construction, size, and location as the
     Premises with the improvements installed therein at Lessor's expense and
     shall take into account Lessee's obligations to pay additional rent under
     this Lease. In determining Fair Market Rent, the appraiser shall not
     consider any alterations installed in the Premises at Lessee's expense.

          (vi) If only one appraiser is selected, then each party shall pay
     one-half of the fees and expenses of that appraiser. If three appraisers
     are selected, each party shall bear the fees and expenses of the appraiser
     it selects and one-half of the fees and expenses of the third appraiser.


                                       5
<PAGE>
 
          (vii) Notwithstanding anything to the contrary, once Fair Market Rent
     is established, rent for the option term shall be ninety-five percent
     (95%) of such rent (provided that in no event shall effective rent exceed
     $1.14 per square foot per month).

     14. Approvals: Notwithstanding anything to the contrary in the Lease Form,
         ---------
whenever the Lease requires an approval, consent, designation, determination or
judgment by either Lessor or Lessee, such approval, consent, designation,
determination or judgment shall not be unreasonably withheld or delayed and in
exercising any right or remedy hereunder, each party shall at all times act
reasonably and in good faith.

     15. Reasonable Expenditures: Notwithstanding anything to the contrary in
         -----------------------
the Lease Form, any expenditure by a party permitted or required under the
Lease, for which such party is entitled to demand and does demand reimbursement
from the other party, shall be limited to the fair market value of the goods and
services involved, shall be reasonably incurred, and shall be substantiated by
documentary evidence available for inspection and review by the other party or
its representative during normal business hours.

     16. Lessor Indemnity: Lessor shall indemnify, defend with counsel
         ----------------
reasonably acceptable to Lessee, protect, and hold harmless Lessee, its
employees, agents, contractors, stockholders, officers, directors, successors,
subtenants, personal representatives, and assigns (collectively the "Lessee
Indemnitees") from and against all claims, actions, suits, proceedings,
judgments, losses, costs, personal injuries, damages, liabilities, deficiencies,
fines, penalties, damages, attorneys' fees, consultants' fee, investigations,
detoxifications, remediations, removals, and expenses of every type and nature
("Claims"), directly or indirectly arising out of or in connection with (i) any
act of Lessor, its agents, contractors, or employees which results in any
Hazardous Material being present at any time on or about the Premises, or the
soil, air, improvements, ground water or surface water thereof, or (ii) the
violation of any law relating to any such Hazardous Material, the Premises or
the use of the Premises by Lessor, its agents, contractors or employees.

     17. Tenant Improvements: Notwithstanding anything to the contrary in the
         --------------------
Lease Form, in no event shall any of the following costs be paid for by Lessee
or deducted from the Total Tenant Improvement Allowance: (i) costs incurred as a
consequence of a contractor's or subcontractor's default, the
negligent act of omission or the willful misconduct of Lessor or its
consultants, agents, employees, contractors or subcontractors or Lessor's breach
of this Lease, or any contract for construction of the Lessee Interior
Improvements; (ii) interest, principal and other charges with respect to any
construction or permanent loan for the project; (iii) costs for which Lessor may
obtain reimbursement from others; (iv) costs for which Lessor has actually
received reimbursement from others; (v) costs associated with investigation,
removal, monitoring or remediation of hazardous materials; (vi) premium time and
other costs of accelerating the work to meet the scheduled completion date
stated in the Lease, unless the acceleration amount is approved by Lessee in
writing; (vii) costs of management, design and all other services provided by
employees or affiliates of Lessor and the cost of any administration, profit and
overhead for Lessor or any of its employees and affiliates; (viii) all costs and
expenses incurred with respect to work not required by the Specifications, as
the same may be amended by change orders; (ix) the cost of bringing the Building
and surrounding property into compliance with applicable building codes,
Hazardous Materials laws, or other statutes, laws, rules or regulations; and (x)
all costs incurred in connection with casualties and Acts of God. All of the
above described costs shall be paid by Lessor at its sole costs and expense.

     18. Effect of Addendum: In the event of any inconsistency between this
         ------------------
First Addendum and the Lease Form, the terms of this First Addendum shall
prevail. As used herein, the term "Lease" shall mean the Lease Form, this
Addendum and all riders,


                                       6
<PAGE>
 
exhibits, rules, regulations, covenants, conditions and restrictions referred to
in the Lease Form or this Addendum.

        LESSOR:                            LESSEE:

        MICHAEL R. MASTRO AND              
        REDMOND EAST ASSOCIATES,            INCONTROL, INC.
        a                                   a Delaware corporation
         ----------------------              ----------------------


        By: /S/ MICHAEL R. MASTRO          By: /s/ KURT C. WHEELER  
            ---------------------              --------------------

        Printed                            Printed
        Name:                              Name:  KURT C. WHEELER 
              -----------------                  -------------------
        Title:                             Title: C.E.O.
              -----------------                  -------------------
        Date:                              Date:
              -----------------                  -------------------

                                       7
<PAGE>
 
REDMOND EAST BUSINESS CAMPUS



                                      LEASE


     THIS LEASE, dated as of the 19th day of August, 1991, is between MICHAEL R.
                                ------
MASTRO AND REDMOND EAST ASSOCIATES ("collectively called Lessor") and INCONTROL,
INC. (collectively called "Lessee").


                                   WITNESSETH:

     1. Premises. Lessor hereby leases to Lessee, upon the terms and conditions
herein set forth, a portion of the real property situated in the City of
Redmond, King County, Washington, legally described on Exhibit A attached hereto
(herein called the "Building"). The portion of the Building leased to Lessee
shall be as located and outlined on the sketch attached hereto as Exhibit B,
consisting of approximately 15,852 rentable square feet (herein called the
"Premises"). The term "Building" includes land, building, and improvements. As
of the initial commencement date, Lessee shall be provided twenty two (22)
non-exclusive parking stalls at the Building. Four (4) of those stall shall be
located at the northeast entrance to the Premises and shall be marked as being
reserved for visitors. On the first anniversary of the initial commencement
date, Lessee shall be provided twenty three (23) additional non-exclusive
parking stalls at the Building.

     2. Common Areas. Lessee shall have nonexclusive use of all areas of the
Building designated by Lessor as common areas for the use generally of tenants
of the Building.

     3. Use of Premises. The Premises shall be used for office, storage,
research and manufacturing facilities for the operation of a business engaged in
the manufacture of small electrical equipment and components and for no other
purpose without the prior consent of Lessor. Lessee shall not allow undue noise
or vibration. Lessee shall not allow use of the Premises in a manner which would
increase insurance premiums (unless Lessee pays for increased premiums), in a
manner which would interfere with any other tenant in the Building, or for any
illegal purpose. Lessee shall comply with all governmental rules, orders,
regulations, or requirements relating to Tenant's particular use and occupancy
of the Premises. Lessee shall not use, store or dispose of any hazardous or
toxic waste or materials on the Premises or the Building at any time except in
accordance with all the requirements of every applicable law, rule, regulation,
or ordinance. Lessee agrees to hold harmless, protect, indemnify, and defend
Lessor with respect to Lessee's use, storage, or disposal of any hazardous or
toxic waste or material in the Premises or the Building.

     4. Term. This Lease shall be for a term of five (5) years, commencing on
the Commencement Date (as defined in Section 1 of the attached Addendum). In the
event that the lease term commences on a day other than the first day of a
calendar month, then the lease term as specified in the preceding sentence shall
be deemed to have commenced as of the first day of the next calendar month, and
the Tenant shall be deemed to have been given early occupancy as of the date
specified in the preceding sentence, with all terms of the Lease, including
rent, and other amounts due to Lessor, applicable to the period of early
occupancy.

     See Addendum, Section 1.
     -----------------------

     5. Rental. Lessee agrees to pay Lessor, at Lessor's address set forth in
Section 27 hereof or at such other place as Lessor may designate in writing, a
monthly rent ("Basic Rental") of $1.13 per rentable square foot of the Premises
(as determined pursuant to Section 1) each month, not including the triple net
charges imposed as Additional Rental in Section 6. Monthly rental shall be paid
by Lessee in advance on the first day of each and every month during the term
hereof. The Basic Rental and Additional Rental shall be abated for a period of
one year after commencement of the Lease on the Delayed Occupancy Space
identified in Exhibit B, an area of 7,926 square feet.
<PAGE>
 
     See Addendum, Section 2.
     -----------------------

     Upon execution of this Lease, Lessee shall pay to Lessor the sum of
$8,956.38 in payment of the Basic Rental due for the first month of the Lease
term. This amount will be adjusted when the final rentable square footage of the
Premises is determined pursuant to Section 1. The obligation of Lessee to pay
Basic Rental and Additional Rental is absolute and unconditional, and shall not
at any time be subject to offset, discount, or reduction of any kind whatsoever.

     6. Additional Rental. This is a "triple-net" lease. In addition to the
Basic Rental provided in Section 5 above, Lessee agrees to pay Lessor
"Additional Rental" during each Lease Year based upon Lessee's percentage share
of the total dollar amount of Operating Expenses incurred by Lessor in each
Lease Year related to the Premises and the Property. Lessee's percentage share
of such Operating Expenses shall be the ratio that the rentable square footage
of the Premises bears to the total rentable square footage of the Building.

     The term "Operating Expenses" means all costs of ownership, management,
operation, and maintenance of the Building, including, without limitation, the
following: wages and salaries of employees; janitorial, cleaning, landscaping,
guard and other services; gas, electricity, water, sewer, waste disposal, and
other utilities; heating, ventilation and air-conditioning; window-washing;
materials and supplies; painting, repairs, and other maintenance; parking lot
resurfacing and restriping; maintenance, repair and service agreements of any
kind, including without limitation those for the; HVAC system, alarm systems,
elevator equipment, and other equipment; reserves for any common area
improvements; costs of independent contractors; management fees; insurance;
taxes; assessments; depreciation on personal property; and any other expense or
charge which in accordance with generally accepted accounting and management
principles would be considered a cost of ownership, management, operation, and
maintenance of the Building. The determination of Operation Expenses and their
allocation to the tenants shall be made by Lessor.

     Prior to commencement of each Lease Year, or as soon thereafter as
practicable, Lessor shall give Lessee notice of its estimate of amounts payable
under this section for the ensuing Lease Year. On the first day of each month
during the ensuing Lease Year, Lessee shall pay to Lessor 1/12th of such
estimated amounts, provided, that if such notice is not given prior to the
commencement of such ensuing Lease Year, Lessee shall continue to pay on the
basis of the prior Lease Year's estimate until the month after such notice is
given. If at any time or times it appears to Lessor that the amounts payable
under this section for the current Lease Year will vary from its estimate,
Lessor may, by notice to Lessee, revise its estimate for such Lease Year, and
subsequent payments by Lessee for such Lease Year shall be based upon such
revised estimate.

     Within ninety (90) days after the close of each Lease Year or as soon after
such 90-day period as practicable, Lessor shall deliver to Lessee a statement of
amounts payable under this section for such Lease Year and such statement shall
be final and binding upon Lessor and Lessee. If such statement shows an amount
owing by Lessee that is less than the estimated payments for such Lease Year
previously made by Lessee, it shall be accompanied by a refund of the excess. If
such statement shows an amount owing by Lessee that is more than the estimated
payments for such Lease Year previously made by Lessee, Lessee shall pay the
deficiency to Lessor within thirty (30) days after delivery of the statement.
Lessee shall be entitled at its expense to review at Lessor's offices the
records on which the statement of amounts payable is based.

     In determining the amount of Operating Expenses, for the purpose of this
Section 6: (a) if less than one hundred percent (100%) of the Building shall
have been occupied by tenants and fully used by them at any time, Operating
Expenses shall be increased to an amount equal to the like operating expenses
which would normally be expected to be incurred had such occupancy been one
hundred (100%) and had such full utilization by tenants been made during the
entire period; and (b) if the Lessor is not furnishing any particular work or
service (the cost of which if performed by the Lessor would constitute an
Operating Expense) to a tenant who has undertaken to perform such work in lieu
of the performance thereof by the Lessor, Operating Expenses shall be deemed
for the purposes of this Section 6 to be increased by an amount equal to the
additional Operating Expense which would reasonably have been incurred during
such period by the Lessor if it had at its own expense furnished such work or
service to such tenant.


                                       -2-
<PAGE>
 
     Lessee shall pay as rent monthly, in addition to the Basic Rental and
Additional Rental during the term of this Lease such "Special Building Operating
Expenses" as are required and incurred as a result of Lessee's occupancy and use
of the Premises, or any part thereof, and which are in addition to normal
business office expenses, which Special Building Operating Expenses shall
include but not be limited to unusual utility costs; unusual heat, air
conditioning or water requirements; increase in insurance premiums attributable
to the Lessee's business and/or use or occupancy of the Premises; and the like.

     "Lease Year" shall mean calendar year. If this Lease commences or
terminates on a day other than the first or last day of a calendar year, the
amount of additional rental payable by Lessee applicable to the Lease Year in
which such commencement or termination occurs shall be prorated on the basis of
a 365-day year.

     See Addendum, Section 3.
     -----------------------

     7. Security Deposit. Concurrently with Lessee's execution of this Lease,
Lessee shall deliver to Lessor the sum of $15,000.00 as security for the
performance by Lessee of Lessee's obligations hereunder. When the final rentable
square footage of the Premises is determined pursuant to Section 1, this amount
will be adjusted to be equal to one month's rent. This deposit shall not bear
interest, and shall not be held in trust or any special account for Lessee; the
deposit may be commingled with other funds of Lessor. If Lessee shall default in
performance of any of Lessee's obligations hereunder, Lessor may apply the whole
or any part of such security deposit to the performance of any such obligation.
Lessee shall, within 10 days after notice of any such application, restore the
amount on deposit to its original balance. Any balance of the security deposit
shall be returned to Lessee at the expiration or sooner termination of this
Lease, after satisfaction of any and all of Lessee's obligations under this
Lease, or may be applied against the last month's Basic Rental or Additional
Rental due but unpaid under this Lease.

     8. Delivery of Possession. If for any reason whatsoever Lessor does not
deliver possession of the Premises on or before September 1, 1991, rent shall
not commence until such date as possession of the Premises is tendered by
Lessor, and in all other respects this Lease shall remain in full force and
effect. In no event shall Lessor be liable for damages caused by any such delay
or failure to deliver possession of the Premises.

     See Addendum, Section 1.
     -----------------------

     9. Quiet Enjoyment. Lessor convenants and agrees that so long as Lessee is
not in default under this Lease, Lessee shall lawfully and quietly hold, occupy,
and enjoy the Premises during the term of this Lease, subject to the other terms
and provisions of this Lease and subject to all mortgages, underlying leases,
and other underlying matters of record to which this Lease is or may become
subject and subordinate.

     10. Construction; Acceptance of Premises.

     (a) Lessor will construct the Tenant Improvements in accordance with the
space plan attached as Exhibit B (the "Space Plan") and the specifications
prepared with respect to such Space Plan. Lessor will provide an allowance
("Tenant Improvement Allowance") of $35.00 per rentable square foot (including
WSST and permits) for the Tenant Improvements. After Lessor has spent $25.00 per
rentable square foot of the Premises, for each $1.00 per rentable square foot of
Tenant Improvement Allowance spent by Lessor thereafter, the Basic Rental shall
be increased by $0.0222 per rentable square foot per month; provided, however,
that until the date that Basic Rental begins for the Delayed Occupancy Space,
the increase to Basic Rental will apply only to the extent that the Tenant
Improvement Allowance used for the initial Premises exceeds $250,000.

     (b) Lessor will enter into a construction contract for construction of the
Tenant Improvements with a contractor or contractors who shall be from a list of
contractors approved by Lessee, which approval shall not be unreasonably
withheld, delayed or conditioned. If required by Lessee, the final plans and
specifications for the Tenant Improvements shall be submitted for bid to at
least three contractors from the approved list of contractors. Lessor shall
provide copies of the bids to Lessee and Lessee may discuss the bids with such
contractors so long as Lessee acts reasonably. Lessor will keep Lessee informed
as to the bidding and contracting process. Lessor will


                                       -3-
<PAGE>
 
award the construction contract for the Tenant Improvements to the lowest bidder
unless directed otherwise by Lessee. Each construction contract shall include a
guaranteed maximum price, subject to increases only for the matters recited in
the AIA form general construction contract and change orders initiated or
approved by Lessee. If the construction cost of the Tenant Improvements, as set
out in the construction contract, including any increases resulting from change
orders initiated or approved by Lessee, exceeds the Tenant Improvement
Allowance, Lessor shall pay the excess to the contractor as and when due and
Lessee, if for the initial Premises or at occupancy of the Delayed Occupancy
Space.

     (c) The Lessor will provide Lessee a design allowance for space planning
and interior design of $0.40 per rentable square foot of the Premises and the
Delayed Occupancy Space. This design allowance is in addition to, and not a part
of the Tenant Improvement Allowance. Any excess cost will be the responsibility
of Lessee, payable at the Commencement Date. Lessee may select the space
planning/design firm(s) from a selected list of space planners/designers
provided by Landlord.

     (d) Lessor shall not be obligated to complete the Tenant Improvements for
the Delayed Occupancy Space with the initial Premises. The Delayed Occupancy
Space Tenant Improvements shall be completed by Lessor so as to make them
available for occupancy one year following the Commencement Date.

     See Addendum, Section 17.
     ------------------------

     (e) The taking of possession of the Premises by Lessee shall constitute
acknowledgment by Lessee that the Lessor's Work has been fully performed as
agreed, that the Premises were then in good and tenantable condition and as
represented by Lessor, and that Lessor has fully complied with all of Lessor's
obligations regarding the condition of the Premises.

     See Addendum, Section 4.
     -----------------------

     11. Utilities and Other Services by Lessor, Lessor agrees that there will
be available at the Premises the following utilities and services:

     (a)  Electricity.

     (b)  Water for drinking, restroom and office cleaning purposes.

     (c)  Gas.

     All utilities and services shall be paid for by Lessee either by separate
metering or billing or as Additional Rental pursuant to section 6. Lessor does
not warrant the adequacy of such utilities for Lessee's needs or that any of the
foregoing utilities and services will be free from interruption. Interruption of
utilities or services shall not be deemed an eviction or excuse performance of
any of Lessee's obligations under this Lease or Lessor. Wherever possible,
Lessee's utilities will be separately metered, and Lessee agrees to pay for all
such utilities when due. Lessee shall, at Lessee's expense, provide all other
utilities and other services to the Premises required by Lessee, and shall pay
for the same when due.

     12. Maintenance by Lessor, Lessor shall maintain in good condition (normal
wear and tear excepted) the structural and exterior components of the Building.
The portions of such work which are structural in nature shall be at Lessor's
sole cost and expense, and non-structural work such as painting of exterior
walls and maintenance of the roof membrane shall be Operating Expenses covered
by Section 6. Lessor shall repair and replace, when necessary, light fixtures in
the common areas only (including replacement of light bulbs and fluorescent
tubes) and shall maintain in good condition and repair the plumbing and the
electrical system. However, Lessor shall not be obligated to repair or replace
any fixtures or equipment installed by Lessee and



                                       -4-
<PAGE>
 
Lessor shall not be obligated to make any repair or replacement occasioned by
any act or omission of Lessee, its employees, agents, invitees, or licensees.

     See Addendum, Section 5.
     -----------------------

     13. Alterations, Repairs, and Maintenance by Lessee. Lessee shall make no
changes, improvements or alterations to the Premises without the prior consent
of Lessor. All such changes, improvements, and alterations and repairs, if any,
made by Lessee shall remain on the Premises and shall become the property of
Lessor upon the expiration or sooner termination of this Lease.

     See Addendum, Section 6.
     -----------------------

     Lessee shall keep the Premises in a neat, clean, and sanitary condition,
and shall keep the Premises and all items therein installed by Lessee in good
condition, except only for reasonable wear and tear. Lessee shall provide, at
its sole expense, janitorial services for the Premises. All maintenance of the
Premises shall be conducted by Lessee, except as provided in Section 12.

     14. Taxes. Subject to Section 6, Lessor shall pay, before the same become
delinquent, all taxes and special assessments levied against the Building.
Lessee shall pay, before the same become delinquent, all taxes assessed against
Lessee's furniture, fixtures, equipment, and other property in the Premises.

     Lessee shall pay to Lessor as additional rental, within 10 days after
notice of the amount thereof, any tax upon rent payable under this Lease or any
tax or fee in any form payable to Lessor because of or measured by receipts or
income of Lessor derived from this Lease. The preceding sentence shall not apply
to general income tax or business and occupation tax of Lessor, except to the
extent a rental receipt tax is imposed as a business and occupation tax.

     15. Signs. Lessee will not cause or permit the display of any sign, notice,
or advertising matter in or about the Premises or the Building without Lessor's
prior written consent. Lessor shall allow Lessee building signage located on the
Premises facing 185th Avenue N.E. Said sign shall be subject to approval by
Lessor, Lessee and all applicable City of Redmond codes.

     16. Lessor's Access to Premises. Lessor may inspect the Premises at all
reasonable times and enter the same for the purpose of cleaning, repairing,
altering, improving, or exhibiting the same, but nothing herein shall be
construed as imposing any obligation on Lessor to perform any such work.

     See Addendum, Section 7.
     -----------------------

     17. Liability Insurance. Lessee shall, at Lessee's sole expense, maintain
comprehensive general liability insurance with the comprehensive general
liability broadening endorsement (or its equivalent) covering Lessee against any
and all liability in connection with the Premises and Lessee's operations
therein, insuring against any and all claims for injury to or death of persons
and loss of or damage to property occurring upon, in, or outside of the
Premises. Such insurance shall have liability limits of not less than $1,000,000
per occurrence and not less than $2,000,000 annual aggregate combined single
limits for bodily injury liability and property damage liability and $1,000,000
for personal injury liability. All such insurance shall be issued by carriers
acceptable to Lessor and shall contain provision whereby the carrier agrees not
to cancel or modify the insurance without thirty (30) days' prior written notice
to Lessor. Said insurance shall name Lessor as an additional insured and contain
severability provisions with respect to persons insured.

     On or before taking possession of the Premises pursuant to this Lease,
Lessee shall furnish Lessor with a certificate evidencing the aforesaid
insurance coverage, and renewal certificates shall be furnished to Lessor at
least 15 days prior to the expiration date of each policy for which a
certificate was theretofore furnished.

                                       -5-
<PAGE>
 
     18. Lessee's Property Insurance. Lessee shall, at Lessee's sole expense,
maintain on all of Lessee's personal property and leasehold improvements and
alterations on the Premises (other than the Tenant Improvements), a policy of
"all risk" property damage insurance in the full amount of their replacement
value. Such insurance shall name Lessor as an additional insured and all
proceeds of any such insurance shall be applied to the restoration of fixtures,
improvements, and alterations to the extent provided in Section 21; any proceeds
of such insurance remaining after such restoration shall belong to Lessee.

     19. Lessor's Insurance. Subject to Section 6, Lessor shall maintain "all
risk" hazard insurance coverage on the Building (including the Tenant
Improvements) in an amount of not less that one hundred percent (100%) of the
full replacement cost of the Building (including the Tenant Improvements) and
such liability insurance coverage and other property damage insurance coverage
as Lessor reasonably determines is necessary or as is required by any lender
holding a first mortgage lien against the Property. All proceeds of any hazard
insurance shall be payable to Lessor and shall be applied to the restoration of
the Building to the extent provided in Section 21; any proceeds of such
insurance remaining after such restoration shall belong to Lessor.

     20. Assignment and Subletting. Neither this Lease nor any right hereunder
may be assigned, transferred, encumbered, or sublet in whole or in part by
Lessee, by operation of law or otherwise, without Lessor's prior consent, which
shall not be unreasonably withheld, conditioned or delayed. Subleases to any
subsidiaries or affiliates with common ownership of 50% or more shall not
require Lessor's consent. No assignment or sublease shall relieve Lessee of its
liabilities hereunder and no consent to any assignment or sublease shall be
deemed a consent to any further assignment or sublease. If Lessee is a
corporation, any merger, consolidation, liquidation, or any change in ownership
of or the power to vote the majority of its outstanding voting stock, shall not
constitute an assignment, whether the result of a single transaction or a series
of transactions. Lessor may assign its interest in this Lease.

     21. Damage or Destruction. If the Premises are damaged or destroyed by fire
or any cause, Lessor shall restore the Premises and Tenant Improvements (except
for tenant improvements paid for by Lessee, trade fixtures, and personal
property which shall be restored by Lessee at Lessee's sole expense) as nearly
as practicable to their condition immediately prior to such damage or
destruction. The obligations to restore provided in this paragraph shall be
subject to Lessor's termination rights provided below. Any restoration shall be
promptly commenced and diligently prosecuted. Lessor shall not be liable for any
consequential damages by reason of any such damage or destruction.

     Notwithstanding any of the foregoing provisions of this section, in the
event the Premises shall be destroyed or damaged to such an extent that Lessor
deems that it is not economically feasible to restore the same, then Lessor may
terminate this Lease as of the date the damage or destruction by giving Lessee
notice to that effect.

     If Lessor undertakes to restore the Premises as provided above in this
section, then commencing with the date of the damage or destruction and
continuing through the period of restoration, the rent for the Premises shall be
abated for such period in the same proportion as the untenantable portion of the
Premises bears to the whole thereof, except that there shall be no abatement to
the extent that any such damage or destruction is caused by any act or omission
of Lessee, its employees, agents, invitees, or licensees.

     See Addendum, Section 8.
     -----------------------

     22. Liens. Lessee shall not suffer or permit any lien to be filed against
the Building or any part thereof or the Lessee's leasehold interest, by reason
of work, labor, services, or materials performed or supplied to Lessee or anyone
holding the Premises or any part thereof under Lessee. If any such lien is filed
against the Building or Lessee's leasehold interest, Lessee shall cause the same
to be discharged of record within 30 days after the date of filing the same.

     23. Indemnity by Lessee. Lessee agrees that Lessor shall not be liable for
any claims for death of or injury to persons or damages to or destruction of
property sustained by Lessee or by any other person in or 


                                       -6-
<PAGE>
 
outside of the Premises, including without limiting the generality of the
foregoing, any claims caused by or arising from the condition or maintenance of
any part of the Premises, unless such damage is caused by the sole negligence or
intentional misconduct of Lessor. Lessee hereby waives all claims therefor and
agrees to indemnify Lessor against any such loss, damage, or liability or any
expense (including attorney's fees) incurred by Lessor in connection therewith.

     24. Default; Remedies; Late Charges. The occurrence of any one or more of
the following events shall be deemed a breach of this Lease, namely: if Lessee
shall fail to perform any obligation or otherwise breaches any of its covenants
or agreements contained herein; or if Lessee shall make an assignment for the
benefit of creditors or shall file a voluntary petition under any bankruptcy act
or under any other law for the relief of debtors' or if any involuntary petition
is filed against Lessee under any such law and is not dismissed within 60 days
after filing; or if a receiver be appointed for the property of Lessee and is
not discharged or removed within 60 days; or if any department of any government
or any officer thereof shall take possession of the business or property of
Lessee; or if the Lessee is adjudicated a bankrupt. Upon any such occurrence
Lessor, at its option, may terminate this Lease by notice to Lessee and upon
such termination Lessee shall quit and surrender the Premises to Lessor, but
Lessee shall remain liable as hereinafter provided.

     See Addendum, Section 9.
     -----------------------

     If this Lease shall be terminated as herein provided, Lessor may
immediately or at any time thereafter re-enter the Premises and remove any and
all persons and property therefrom, by any suitable proceedings at law or
otherwise, without liability therefor, and re-enter the Premises, without such
re-entry diminishing Lessee's obligations to pay rental for the full term
hereof, and Lessee agrees to pay Lessor any deficiency arising from re-entry and
reletting of the Premises at a lesser rental than provided herein. Lessor shall
apply the proceeds of any reletting in the following order:

     (a) First, to the payment of such reasonable expenses as Lessor may have
incurred in recovering possession of the Premises, including without limitation,
removing persons and property therefrom, and in putting the same into good order
or condition;

     (b) Second, to all reasonable expenses incurred by Lessor for reletting the
Premises, including without limitation, preparing and/or altering the same for
reletting; and

     (c) Then to Lessee's obligation to pay rental. Any such reletting may be
for the remainder of the term of the Lease or for a longer or shorter period. In
any such case, and whether or not the Premises or any part thereof be relet,
Lessee shall pay to Lessor the rent and all other charges required to be paid by
Lessee up to the time of such termination of this Lease, and thereafter, Lessee
agrees to pay the equivalent of the amount of all rent reserved herein and all
other charges required to be paid by Lessee, less the net proceeds of reletting,
if any, and the same shall be due and payable by Lessee monthly as the amount
thereof is ascertained by Lessor, and Lessor may bring an action therefor as
such monthly deficiencies arise. In any of the circumstances herein above
mentioned, Lessor shall have the option, instead of holding Lessee liable for
the amount of all rent and all other charges required to be paid by Lessee less
the net proceeds of reletting, if any, forthwith to recover from Lessee an
aggregate sum representing, at the time of such termination of this Lease, the
then present worth of the excess, if any, of the aggregate of the rent and all
other charges payable by Lessee hereunder that would have accrued until the end
of the Lease term over the aggregate rental value of the Premises during such
time. Lessor shall use reasonable efforts to mitigate any damages.

     In the event Lessee fails to pay any Basic Rental, Additional Rental, or
other payment or reimbursement due to Lessor within five (5) days of the date
when due, the amount so delinquent shall bear interest at the rate of twelve
percent (12%) per annum from the due date until paid. In addition, Lessee shall
pay to Lessor a late charge equal to five percent (5%) of the amount so
delinquent, which late charge shall be liquidated damages (and not a penalty) to
compensate Lessor for the costs of handling such delinquency, the parties
agreeing that actual damages would be inconvenient, uncertain, and difficult to
ascertain. Such interest and late charges shall be deemed Additional Rental and
shall be due upon demand.


                                       -7-
<PAGE>
 
     See Addendum, Section 9.
     -----------------------

     25. Trade Fixtures. Lessee may install on the Premises such equipment as is
customarily used in the type of business conducted by Lessee on the Premises.
Upon the expiration or sooner termination of this Lease, Lessee shall, at
Lessee's expense, remove from the Premises all such equipment and all other
property of Lessee and repair any damage to the Premises occasioned by the
removal thereof. Any property left in the Premises after the expiration or
sooner termination of this Lease shall be deemed to have been abandoned by
Lessee and become the property of Lessor to dispose of as Lessor deems expedient
without accounting to Lessee therefor.

     26. Condemnation. If all of the Premises are taken by any public authority
under the power of eminent domain, this Lease shall terminate as of the date
possession is taken by said public authority pursuant to such condemnation.

     If any part of the Premises is so taken and, in the opinion of either
Lessor or Lessee, it is not economically feasible to continue this Lease in
effect, either party may terminate this Lease. If any substantial part of the
Building is so taken and, in the opinion of Lessor, it is not economically
feasible to continue this Lease in effect, Lessor may terminate this Lease. Such
termination by either party shall be made by notice to the other given not later
than 30 days after possession is so taken, the termination to be effective as of
the later of 30 days after said notice or the date possession is so taken.

     If part of the Premises or part of the Building is so taken, and neither
Lessor or Lessee elects to terminate this Lease, or until termination is
effective, as the case may be, the rental shall be abated in the same proportion
as the portion of the Premises so taken bears to the whole of the Premises, and
Lessor shall make such repairs or alterations, if any, as are required to render
the remainder of the Premises tenantable.

     All damages awarded for the taking or damaging of all or any part of the
Building or the Premises shall belong to and be the property of the Lessor, and
Lessee hereby assigns to Lessor any and all claims to such award, but nothing
herein contained shall be construed as precluding Lessee from asserting any
claim Lessee may have against such public authority for disruption or relocation
of Lessee's business on the Premises.

     27. Notices. All notices, demands, and requests to be given by either party
to the other shall be in writing. All notices, demands, and request by Lessor to
Lessee shall be sent by United States registered or certified mail, postage
prepaid, (or by private overnight courier) addressed to Lessee at the Premises.
All notices, demands, and requests by Lessee to the Lessor shall be sent by
United States registered or certified mail, postage prepaid, (or by private
overnight courier) addressed to Lessor at: 10800 N.E. Eighth Street, Suite 1080,
Bellevue, Washington 98004, or such other place as Lessor may from time to time
designate by notice to Lessee. Notices, demands, and requests served upon Lessor
or Lessee as provided in this section in the manner aforesaid shall be deemed
sufficiently served or given for all purposes hereunder at the time such
notices, demand, or request shall be so mailed or deposited with private
courier.

     28. Performance of Covenants. If Lessee shall fail to make any payment or
perform any of Lessee's obligations under this Lease, after notice and the
expiration of any applicable cure period, Lessor may, without notice to or
demand upon Lessee and without further waiving or releasing Lessee from any
obligations of Lessee under this Lease, make any such payment or perform any
such obligation on Lessee's behalf in such manner and to such extent as Lessor
deems desirable. All sums so paid by Lessor and all necessary costs and expenses
in connection with the performance of any such obligation by Lessor, together
with interest thereon at the rate of 12% per annum from the date of the making
of such expenditure by Lessor, shall be deemed Additional Rental hereunder and
shall be payable to Lessor on demand.

     29. For Rent Signs; Showing Premises. Lessor may place for rent or for sale
signs on the exterior of the Premises and may enter the Premises for the purpose
of showing the Premises or the Building to prospective tenants, 

                                       -8-
<PAGE>
 
purchasers, and lenders.

     See Addendum, Section 7.
     -----------------------

     30. Waiver of Subrogation. Lessor and Lessee shall each procure, if
obtainable without payment of an additional premium, an appropriate clause in,
or an endorsement on, any policy of fire or extended coverage insurance covering
the Premises and the Property, and the personal property, fixtures, and
equipment located in or on the Premises, pursuant to which the insurance
companies waive subrogation or consent to a waiver of right of recovery, and,
conditioned upon a party having obtained such clauses or endorsements or waiver
of subrogation or consent to a waiver or right of recovery, such party hereby
agrees that it shall not make any claim against or seek to recover from the
other for any loss or damage to its property, or the property of the other,
resulting from fire or other hazards covered by such insurance notwithstanding
other provisions of this Lease; provided, however, that the release, discharge,
exoneration, and covenant not to sue herein contained shall be limited by the
terms and provisions of the waiver of subrogation clauses or endorsement
consenting to a waiver of right of recovery, and shall be coextensive therewith.
If either Lessor or Lessee is unable to obtain such clause or endorsement, such
party shall promptly give the other party notice of such inability. If either
Lessor or Lessee is able to obtain such clause or endorsement only upon payment
of an additional premium, such party shall promptly give the other party notice
to that effect, in which event the other party shall have the right to pay such
additional premium, and upon such payment, the party whose insurer requires such
payment shall promptly procure such clause or endorsement.

     31. Subordination of Lessee's Interest. This lease is and shall be
subordinate to any encumbrance now of record or any encumbrance hereafter
recorded affecting the Building. Lessee shall attorn to any purchaser at any
foreclosure sale, or to any grantee or transferee designated in any deed in lieu
of foreclosure. Lessee shall execute any documents required by any such holder
to accomplish the purpose of this section, and failure to execute such documents
shall be a default under this Lease.

     See Addendum, Section 10.
     ------------------------

     32. Surrender of Premises. Lessee, at the expiration or sooner termination
of this lease, shall quit and surrender the Premises in good, neat, clean, and
sanitary condition, except for reasonable wear and tear.

     See Addendum, Section 11.
     ------------------------

     33. Rules and Regulation. Lessee shall use the Premises and the common
areas in the Building in accordance with such reasonable rules and regulations
not inconsistent with this lease as may from time to time be made by Lessor for
the general safety, comfort, and convenience of Lessor and tenants of the
Building, and shall cause Lessee's employees, agents, invitees, and licensees to
abide by such rules and regulations.

     34. Holdover. If Lessee holds over after the expiration of the term of this
Lease, such tenancy shall be a month-to-month tenancy. During such tenancy
Lessee agrees to pay Lessor 125% the rate of rental as provided herein for the
first 75 days of any holdover period and 200% of the rate of rental provided
herein for any holdover period exceeding 75 days, and to be bound by all of the
terms, covenants, and conditions herein specified.

     35. Memorandum of Lease. Unless approved by Lessor in writing, this Lease
shall not be placed of record. If Lessor so requests, Lessee agrees to execute
and place of record an instrument, in recordable form, evidencing the
commencement date and expiration date of this Lease. At the expiration or sooner
termination of this Lease, Lessee shall execute in recordable form and deliver
to Lessor a quit claim deed covering the Building.

     36. Force Majeure. Lessor shall have no liability whatsoever to Lessee on
account of the following acts of "force majeure," which shall include (a) the
inability of Lessor to fulfill, or delay in fulfilling, any of Lessor's
obligations under this Lease by reason of strike, lockout, other labor trouble,
dispute or disturbance; (b) governmental regulation, moratorium, action,
preemption or priorities or other controls; (c) shortages of fuel, 


                                       -9-
<PAGE>
 
supplies or labor; (d) any failure or defect in the supply, quantity or
character of electricity or water furnished to the Premises by reason of any
requirement, act or omission of the public utility or others furnishing the
Building with electricity or water; and (e) for any other reason, whether
similar or dissimilar to the above, or for Act of God, beyond Lessor's
reasonable control. If this Lease specifies a time period for performance of an
obligation of Lessor, that time period shall be extended by the period of any
delay in Lessor's performance caused by any of the events of force majeure
described within.

     37. Light, Air, and View. Lessor does not guarantee the continued present
status of light, air, or view over any Premises adjoining or in the vicinity of
the Building.

     38. Lessor's Liability. Anything in this Lease to the contrary
notwithstanding, covenants, undertakings and agreements herein made on the part
of Lessor are made and intended not as personal covenants, undertakings and
agreements for the purpose of binding Lessor personally or the assets of Lessor
except Lessor's interest in the Building, but are made and intended for the
purpose of binding only the Lessor's interest in the Building, as the same may
from time to time be encumbered. While Lessee may bring a legal action against
Lessor, judgments may be enforced only against Lessor's interest in the
Building. No personal liability or personal responsibility is assumed by, nor
shall at any time be asserted or enforceable against, Lessor or its partners or
agents or their respective heirs, legal representatives, successors, and assigns
on account of this Lease or on account of any covenant, undertaking or agreement
of Lessor in this Lease contained.

     39. Miscellaneous.

     (a) Nonwaiver. No failure of either party to insist upon the strict
         ---------
performance of any provision of this Lease shall be construed as depriving
either party of the right to insist on strict performance of such provision or
any other provision in the future. No waiver by either party of any provision of
this Lease shall be deemed to have been made unless expressed in writing and
signed by the party to be charged therewith. No acceptance of rent or of any
other payment by Lessor from Lessee after any default by Lessee shall constitute
a waiver of any such default or any other default. Consent by either party in
any one instance shall not dispense with necessity of consent by such part in
any other instance.

     (b) Attorneys' Fees. If an action be commenced to enforce any of the
         ---------------
provisions of this Lease, the prevailing party shall, in addition to its other
remedies, be entitled to recover its reasonable attorneys' fees. If Lessor
consults with an attorney as a result of a default by Lessee hereunder, Lessee
agrees to pay any such attorneys' fees incurred by Lessor, and such attorneys'
fees shall constitute additional sums due by Lessee hereunder.

     (c) Captions and Construction. The captions in this Lease are for the
         -------------------------
convenience of the reader and are not to be considered in the interpretation of
its terms.

     (d) Partial Invalidity. If any term or provision of this Lease or the
         ------------------
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of the Lease, or the application of such term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced as written to the fullest extent
permitted by law.

     (e) Governing Law. This Lease shall be governed by the State of Washington.
         -------------

     (f) Estoppel Certificates. Lessee shall, from time to time, upon written
         ---------------------
request of Lessor, execute, acknowledge and deliver to Lessor or its designee a
written statement stating: The date this Lease was executed and the date it
expires; the date the term commenced and the date Lessee accepted the Premises;
the amount of Basic Rental and Additional Rental and the date to which such
Basic and Additional Rental has been paid; and certifying: That this Lease is in
full force and effect and has not been assigned, modified, supplemented or
amended in any way (or specifying the date and terms of agreement so affecting
this Lease); that this Lease represents the entire agreement between the parties
as to this leasing; that all conditions under this Lease to be


                                      -10-
<PAGE>
 
performed by the Lessor have been satisfied; that all required contributions by
Lessor to Lessee on account of Lessor's improvements have been received; that
there are no existing claims, defenses or offsets which the Lessee has against
the enforcement of this Lease by the Lessor; that no Rental has been paid more
than one month in advance; and the amount of any security has been deposited
with Lessor. It is intended that any such statement delivered pursuant to this
section may be relied upon by a prospective purchaser or assignee of Lessor's
interest or by any lender. If Lessee shall fail to respond within ten (10) days
of receipt by Lessee of a written request by Lessor as herein provided, Lessee
shall be deemed to have given such certificate as above provided without
modification and shall be deemed to have admitted that this Lease is in full
force and effect, that there are no incurred defaults in Lessor's performance,
that the security deposit is as stated in this Lease, and that not more than one
month's Rental has been paid in advance. Lessee shall be entitled to receive an
estoppel certificate from Lessor on the same terms set forth in this Section
39(f).

     (g) Transfer of Lessor's Interest. In the event of any transfer or
         -----------------------------
transfers of Lessor's interest in the Premises, other than a transfer for
security purposes only, the transferor shall be automatically relieved of any
and all obligations and liabilities on the part of Lessor accruing from and
after the date of such transfer and Lessee agrees to attorn to the transferee.
Any such transfer shall be made expressly subject to this Lease, and the
transferee must assume Lessor's obligations hereunder

     (h) Interpretation. This Lease has been submitted to the scrutiny of all
         --------------
parties hereto and their counsel if desired, and shall be given a fair and
reasonable interpretation in accordance with the words hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.

     (i) Remedies Cumulative. The specified remedies to which Lessor may resort
         -------------------
under the times of this Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which Lessor may lawfully
be entitled in case of any breach or threatened breach by Lessee of any
provision of this injunction of the violation, or attempted or threatened
violation, of any of the covenants, conditions, provisions of this Lease.

     (j) Number; Gender; Permissive Versus Mandatory Usage. Where the context
         -------------------------------------------------
permits, references to the singular shall include the plural and vice versa, and
to the neuter gender shall include the feminine and masculine. Use of the word
"may" shall denote an option or privilege and shall impose no obligation upon
the party which may exercise such option or privilege; use of the word "shall"
shall denote a duty or an obligation.

     (k) Time. Time is of the essence to this Lease.
         ----

     (l) Binding Effect. Subject of the provisions of section 20 hereof, this
         --------------
Agreement shall be binding upon the parties hereto and upon their respective
executors, administrators, legal representatives, successors, and assigns.

     (m) Arbitration. If there is a dispute between the Lessor and Lessee
         -----------
concerning Lessee's percentage share of Operating Expenses under Section 6 of
this Lease, the determination of such dispute shall be submitted to binding
arbitration upon the written demand of either party delivered to the other
party. Such arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect;
provided there shall be only one (1) arbitrator who shall be selected by the
parties and if the parties cannot agree then who shall be appointed by the
Presiding Judge of the King County Superior Court upon motion made by either
party. Judgement upon the award may be entered in any court having jurisdiction.
The cost and expenses of the arbitration shall be divided equally between the
Lessor and Lessee.

     (n) Financial Information. Upon request from Lessor, Lessee agrees to
         ---------------------
provide such financial statements and other financial information concerning
Lessee as may be reasonably required by any financial institutional lender to
whom Lessor may be applying for financing on the Building.


                                      -11-
<PAGE>
 
     (o) Expansion. Lessee shall have the option to expand the Premises by 5,000
         ---------
square feet through September 1, 1993. The location of this expansion space
shall be contiguous to the original Premises.

     See Addendum, Section 12.
     ------------------------

     (p) Option to Renew. At the expiration of the initial term of the Lease,
         ---------------
Lessee shall have one (1) five (5) year option to renew at 95% of the market
rent for the Premises, however, the effective rent for the extended term shall
not exceed $1.14 per square foot per month, triple net.

     See Addendum, Sections 13, 14, 15, and 16.
     -----------------------------------------

     EXECUTED as of the date first above written.

                                               LESSOR:

                                               /s/ Michael R. Mastro
                                               --------------------------------
                                               Michael R. Mastro


                                               REDMOND EAST ASSOCIATES


                                               By /s/ Michael R. Mastro
                                               --------------------------------
                                               Name: Michael R. Mastro
                                               Title: General Partner


                                               By /s/ Stravos Anastasiou
                                               --------------------------------
                                               Name: Stravos Anastasiou
                                               Title: General Partner


                                               By /s/ Perry Vyzis
                                               --------------------------------
                                               Name: Perry Vyzis
                                               Title: General Partner


                                               LESSEE:

                                               INCONTOL, INC.

                                               By /s/ Kurt C. Wheeler
                                                 ------------------------------
                                               Name: Kurt C. Wheeler
                                               Title: C.E.O.

                                      -12-
<PAGE>
 
STATE OF WASHINGTON      )
                         )    ss.
COUNTY OF KING           )

     On this [ILLEGIBLE] day of August, 1991, before me, the undersigned, a
            -------------      -------------   
Notary Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Michael R. Mastro, to me known, and acknowledged to me that
he signed and sealed the foregoing instrument as his free and voluntary act and
deed, for the uses and purposes therein mentioned.

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



[SEAL]                                         /s/ Donna Reid
                                               --------------------------------
                                               NOTARY PUBLIC in and for the
                                               State of Washington, 
                                               residing at Auburn
                                                          ---------------------

                                               My commission expires  2/17/94.
                                                                      -------



STATE OF WASHINGTON   )
                      ) ss.
COUNTY OF KING        )

     On this [ILLEGIBLE] day of August, 1991, before me, the undersigned, a
            -------------      ------------- 
Notary Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Michael R. Mastro, to me known to be a General Partner of
REDMOND EAST ASSOCIATES, and on behalf of such general partnership, acknowledged
to me that he signed and sealed the foregoing instrument as the free and
voluntary act and deed of said general partnership, for the uses and purposes
therein mentioned.

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




[SEAL]                                         /s/ Donna Reid
                                               --------------------------------
                                               NOTARY PUBLIC in and for the
                                               State of Washington, 
                                               residing at Auburn
                                                           ---------------------

                                               My commission expires  2/17/94.
                                                                      -------


STATE OF WASHINGTON   )
                      ) ss.
COUNTY OF KING        )

     On this 19th day of August, 1991, before me, the undersigned, a Notary
             ----        ------------
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Stavros Anastasiou, to me known to be a General Partner of
REDMOND EAST ASSOCIATES, and on behalf of such general partnership, acknowledged
to me that he signed and sealed the foregoing instrument as the free and
voluntary act and deed of said general partnership, for the uses and purposes
therein mentioned.

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


[SEAL]                                         /s/ M. Neagle 
                                               ---------------------------------
                                               NOTARY PUBLIC in and for the
                                               State of Washington, 
                                               residing at Bellevue
                                                           ---------------------

                                               My commission expires 12/27/94.
                                                                     --------




                                      -13-
<PAGE>
 
STATE OF WASHINGTON    )
                       ) ss.
COUNTY OF KING         )


     On this 19TH day of August, 1991, before me, the undersigned, a Notary
            ------      ------------- 
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Perry Vyzis, to me known to be a General Partner of REDMOND
EAST ASSOCIATES, and on behalf of such general partnership, acknowledged to me
that he signed and sealed the foregoing instrument as the free and voluntary act
and deed of said general partnership, for the uses and purposes therein
mentioned.

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

[SEAL]                                         /s/ M. Neagle
                                               ---------------------------------
                                               NOTARY PUBLIC in and for the
                                               State of Washington, 
                                               residing at Bellevue
                                                           ---------------------

                                               My commission expires 12/27/94.
                                                                    ------------


STATE OF WASHINGTON   )
                      ) ss.
COUNTY OF KING        )
                      
     On this 13th day of August, 1991, before me, the undersigned, a Notary
             ----        ------------
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Kurt Wheeler, to me known to be the C.E.O. of INCONTROL,
                    ------------                        -----
INC. a Washington corporation, the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument
and that the seal affixed, if any, is the corporate seal of said corporation.

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

[SEAL]                                         /s/ M. Neagle
                                               ---------------------------------
                                               NOTARY PUBLIC in and for the
                                               State of Washington, 
                                               residing at Bellevue
                                                           ---------------------

                                               My commission expires 12/27/94.
                                                                    ---------




                                      -14-
<PAGE>
 
                                    EXHIBIT A

                                Legal Description
                                -----------------

     Lot 1, City of Redmond Lot Line Revision NO. LLR 89-7, as filed under File
No. 9002221025, Records of King County, Washington.



                                      -15-
<PAGE>
 
                                    EXHIBIT B

                                    Premises
                                    --------

     To be replaced by a copy of the finalized space plan. The space plan is to
show, as part of the Premises, one grade level door located on the south side of
the Premises.



                                      -16-