<PAGE>

                                                                    Exhibit 10.8

                                 OFFICE LEASE

     In consideration of the rents and covenants set forth below, this Lease is
made in duplicate as of the 8th day of May, 1998, between STRATTON PROPERTIES,
INC., a Washington corporation, hereinafter referred to as "Landlord", and GLENN
BALLMAN, individually, and MEGADEPOT, INC., a Washington corporation,
hereinafter referred to collectively as "Tenant".

                                   RECITALS

A.   Landlord is the owner of the real property known as the Marathon Building,
     having a street address of 209 1/2 First Avenue South, Seattle, Washington
     98104, and which is legally described as:

          The South 1/2 of Lot 7 in Block 2, Town of Seattle, as laid out by
          D.S. Maynard, commonly known as D.S. Maynard's Plat of Seattle, as
          .per plat recorded in Volume 1 of Plate, page 23, Records of King
          County, Washington, Except the east 9 feet condemned for street
          purposes; situate in the City of Seattle, County of King, State of
          Washington. SUBJECT TO Indemnity Agreement recorded January 25, 1921,
          under Auditor's File No. 1486936.

B.   Tenant desires to take possession of the leased premises hereunder
     described for office use and for no other business or purpose without the
     written consent of the Landlord.

                          LEASE TERMS AND CONDITIONS

                                      I.
                      Commencement of Lease and Occupancy
                      -----------------------------------

     The Landlord and Tenant agree that the premises shall be made ready for
occupancy, and the Tenant agrees to occupy the premises and to commence the
payment of rent as of the 1st day of June, 1998.

                                      II.
                                   Premises
                                   --------

     The Landlord hereby leases and demises unto the Tenant, and the Tenant
hereby leases and takes from the Landlord, for the term of the rental, and upon
the covenants and conditions hereinafter set forth, the office space referred to
herein as the "premises" and described as follows: the rear portion of the third
floor of the Marathon Building, namely Suite 302, which premises include the
shared use of the restrooms and entry vestibule immediately outside the entrance
doors to the office space.
<PAGE>

                                     III.
                                     Term
                                     ----

     The term of this Lease shall commence on the 1st day of June, 1998, and
shall continue for a period of thirty-six (36) months, terminating on the 31st
day of May, 2001.

                                      IV.
                                    Rental
                                    ------

     The Tenant covenants and agrees to pay to the Landlord during the term of
this Lease as rental for the premises the following amounts:

     a.   June, 1998 through August, 1998: No rent;

     b.   September, 1998 through May, 1999: Two Thousand One Hundred and Forty-
          five and 46/100 Dollars ($2,145.46) per month;

     c.   June, 1999 through May, 2000: Two Thousand Two Hundred Eleven and
          79/100 Dollars ($2,211.79) per month; and

     d.   June, 2000 through May, 2001: Two Thousand Two Hundred Seventy-eight
          and 79/100 Dollars ($2,278.79) per month.

     The rent shall be due and payable in advance on the first day of each
calendar month and any amount not received by the tenth (10th) day of the
calendar month shall be subject to an additional late payment fee of five
percent (5%) of the amount due and shall bear interest at the rate of twelve
percent (12%) per annum from such date until paid. Rent shall be paid by check
payable to the order of Stratton Properties, Inc. and shall be mailed to
Stratton Properties, Inc., Suite 1315, 1411 Fourth Avenue, Seattle, Washington
98101 or to such other office or place as Landlord may designate in writing.

     As partial consideration for the execution of this Lease, the Tenant has as
of this day paid the Landlord a deposit of Four Thousand Four Hundred Twenty-
four and 25/100 Dollars ($4,424.25), of which Two Thousand One Hundred Forty-
five and 46/100 Dollars ($2,145.46) shall be applied by Landlord to the rent due
and payable by Tenant for the month of September, 1998, and the balance of
which, being Two Thousand Two Hundred Seventy-eight and 79/100 Dollars
($2,278.79), will be held by Landlord as a security deposit for the term of this
Lease. Such pre-paid rent and security deposit shall be deposited by Landlord
with Landlord's other funds and shall not accrue interest for the credit of
Tenant. Such security deposit shall be refundable to Tenant thirty (30) days
after the expiration of the term of this Lease if the Tenant has complied with
all of the covenants, agreements, terms and conditions of this Lease. In the
event of the default by Tenant hereunder, such deposit shall be retained by
Landlord and applied towards any damages incurred by Landlord as a result of
such default.

                                      -2-
<PAGE>

                                      V.
                             Option to Extend Term
                             ---------------------

     Tenant shall have no options to extend the term of this Lease.

                                      VI.
                      Acceptance of Premises and Repairs
                      ----------------------------------

     Subject to completion by Landlord of certain improvements to the premises
described in more detail in Exhibit "A" attached hereto and made a part hereof,
the premises are accepted by Tenant in their "as-is" condition and Tenant agrees
that Landlord is not required to make any additional improvements to or
alterations of the premises in connection with Tenant's occupancy.

     All normal repairs necessary to maintain the premises in a tenantable
condition, normal wear and tear excepted, shall be done by or under the
direction of Landlord, at Landlord's expense, except those caused by negligence
or acts of Tenant, its agents or invitees, which repairs shall be made at the
sole cost of Tenant. Landlord shall be the sole judge of what repairs are
necessary.

     Tenant will at all times keep the premises neat, clean, and in a sanitary
condition. Except for reasonable wear and tear by unavoidable casualty, Tenant
will at all times preserve said premises in as good repair as they now are or
may hereafter be put to. Any alterations, additions, or improvements to the
premises which Tenant desires to undertake, at Tenant's expense, shall be
subject to the prior approval of Landlord, which approval may be conditioned on
Tenant's agreeing to remove such additions or otherwise restore the premises
upon the termination of this Lease.

     If the Tenant shall perform work with the consent of the Landlord, as
aforesaid, Tenant agrees to comply with the laws, ordinances, rules and
regulations of the City of Seattle, King County, or any other authorized public
authority. The Tenant further agrees to save the Landlord free and harmless from
damage, loss or expense arising out of the said work. Tenant agrees that at the
expiration or sooner termination of this Lease, Tenant will surrender the said
premises in a neat and clean condition, and will deliver up all keys belonging
to said premises to the Landlord or Landlord's agent.

                                     VII.
                                   Services
                                   --------

     The Landlord, so long as Tenant is not in default of any provisions of this
Lease, shall provide heating and air conditioning, water, and electrical
current, in reasonable amounts for office purposes. The Tenant shall provide
janitorial services for the premises. Tenant shall also be responsible. for
changing light bulbs in the premises on an as-needed basis; provided, however,
that Landlord shall periodically provide Tenant with a reasonable supply of

                                      -3-
<PAGE>

replacement light bulbs. The Landlord shall not be liable for any losses or
damages caused by or resulting from any interruption or failure of municipal
utility service due to causes beyond the control or responsibility of the
Landlord, and no such temporary interruption or temporary failure of such
services incident to restoring services to the building or due to accident or
strike or other conditions or events not under Landlord's control or
responsibility, and which do not substantially interfere with Tenant's enjoyment
of the leased premises, shall be deemed an eviction of the Tenant or relieve the
Tenant of any of the Tenant's obligations hereunder.

                                     VIII.
                                   Accidents
                                   ---------

     All personal property on said leased premises or on other temporary
premises provided for Tenant's use elsewhere in the building shall be at the
risk of Tenant. Tenant agrees to defend and hold Landlord and Landlord's agents
harmless from any and all claims arising out of Tenant's negligence for damages
suffered in or about the premises by any person, firm or corporation.

Except in the case of Landlord's gross negligence or of defects in the premises
known to Landlord, Landlord or Landlord's agents shall not be liable for theft,
or any damage, either to person or property, sustained by Tenant or others
Caused by any defects now in said premises, or the building in which the
premises are located, or any service facilities, or hereafter occurring therein,
or due to the building in which the leased premises are situated, or any part or
appurtenance thereof, becoming out of repair or caused by fire or by the
bursting or letting of water, gas, sewer or steam pipes, or from any act or
negligence of another occupant of said building, or any other persons, or due to
the happening of any accident from whatsoever cause in and about said building.

                                      IX.
                               Care of Premises
                               ----------------

     The Landlord shall not be called upon to make any improvements of any kind
upon said premises other than those described in Section VI of this Lease. The
premises shall at all times be kept and used in accordance with the laws of the
State of Washington and ordinances of City of Seattle, and in accordance with
all directions, rules and regulations of the health officer, fire marshal,
building inspector, or other proper officer of the City of Seattle, at the sole
cost and expense of Tenant, and Tenant will permit no waste, damage or injury to
the premises; nor will the Tenant maintain anything that might be dangerous to
life or limb or overload the floors, or permit any objectionable noise or odor
to escape from said premises, or permit anything to be done upon the leased
premises in any way that will tend to create a nuisance or to disturb any other
tenant of the building, or use or permit the use of the premises for any illegal
purpose.

                                      X.
                                      Use
                                      ---

                                      -4-
<PAGE>

     The Tenant shall conduct and carry on in said premises, the business for
which said premises are leased, and shall not use the premises for residential
purposes, or for any immoral or illegal purposes. The Tenant agrees that no
stock of goods will be carried, or anything done in or about the premises, which
will increase the present rate of insurance; provided, however, if the Tenant
shall engage in such business with the consent of the Landlord, which business
shall increase insurance rates, Tenant shall pay such increase. Tenant agrees
that it has determined to Tenant's satisfaction that the premises can be used
for the purpose for which they are leased and waives any right to terminate this
Lease in the event the premises for any reason may not be used for such purposes
during the term of this Lease.

                                      XI.
                             Liens and Insolvency
                             --------------------

     Tenant shall keep the leased premises and the property in which the leased
premises are situated, free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. In the event Tenant
becomes insolvent, voluntarily or involuntarily bankrupt, or if a receiver,
assignee or other liquidating officer is appointed for the business of the
Tenant, then the Landlord may cancel this Lease at Landlord's option.

                                     XII.
                                  Assignment
                                  ----------

     Tenant shall not let or sublet the premises or any part thereof, nor assign
this Lease or any part thereof without the written consent of the Landlord,
which consent shall not be unreasonably withheld. This Lease shall not be
assignable by operation of law. If consent is once given by the Landlord to the
assignment of this Lease, or any interest therein, Landlord shall not be barred
from afterwards refusing to consent to any further assignment. In the event that
Tenant sublets the premises or assigns this Lease for an amount which exceeds
the rent, or applicable portion thereof, otherwise required to be paid by Tenant
to Landlord hereunder, the amount of such excess shall be paid to Landlord and
shall not accrue to the benefit of Tenant.

                                     XIII.
                                    Access
                                    ------

     Tenant will allow Landlord or Landlord's agent free access at all
reasonable times to said premises for the purpose of inspection or of making
repairs, additions or alterations to the premises or any property owned by or
under the control of Landlord but this right shall not be construed as an
agreement on the part of the Landlord to make repairs, additions or alterations.
The Landlord shall have the right to show the premises to prospective tenants
during business hours only for sixty (60) days prior to the expiration of this
Lease and shall have the right to put "For Rent" signs in the front windows of
the premises during such period.


                                     XIV.

                                      -5-
<PAGE>

                             Damage or Destruction
                             ---------------------

     In the event that the premises are damaged to such an extent as to render
the same untenantable in whole or in a substantial part thereof or are destroyed
so as to render the premises untenantable for the stated purposes, it shall be
optional with the Landlord to terminate this Lease. After the happening of any
such contingency, the Tenant shall give Landlord or Landlord's agent immediate
written notice thereof. Landlord shall have not more than thirty (30) days after
the date of such notification to notify the Tenant in writing of Landlord's
intentions to repair or rebuild said premises, or the part so damaged as
aforesaid, and if Landlord elects to repair or rebuild said premises, Landlord
shall prosecute the work of such repairing or rebuilding without unnecessary
delay and during such period, the rent of said premises shall be abated in the
same ratio that that portion of the premises rendered for the time being unfit
for occupancy shall bear to the whole of the leased premises. If the Landlord
shall fail to give the notice aforesaid, Tenant shall have the right to declare
this Lease terminated by written notice served upon the Landlord or Landlord's
agent.

     In the event the building in which the premises hereby leased are located
shall be damaged (even though the premises hereby leased shall not be damaged
thereby) to such an extent that in the opinion of the Landlord it shall not be
practicable to repair or rebuild, or is destroyed, then it shall be optional
with the Landlord to terminate this Lease by written notice served within thirty
(30) days after such damage or destruction.

                                      XV.
                                    Notice
                                    ------

     Any notice required to be served in accordance with the terms of this
Lease, shall be sent by mail or personal delivery, the notice from the Tenant to
be sent to the Landlord at the address set forth in Section IV, and the notice
from the Landlord to be sent to Tenant at the leased premises. However, hand
delivery to a signatory to this Lease or their authorized agent shall meet any
notice requirements contained herein.

                                     XVI.
                                     Signs
                                     -----

     Any sign, notice, picture, placard or poster, or any advertising matter
whatsoever, anywhere in or about the leased premises or said building which
Tenant desires to install shall be subject to Landlord's prior consent, provided
that places not visible from anywhere without said premises are excepted. Tenant
shall be solely responsible for obtaining any and all governmental approvals
which may be required with respect to such signs.

                                     XVII.
                             Default and Re-Entry
                             --------------------

     If any rents above reserved, or any part thereof, shall be unpaid when the
same shall become due and shall remain unpaid ten (10) days after written notice
thereof from Landlord to

                                      -6-
<PAGE>

Tenant, or if Tenant shall violate or default in any of the other covenants and
agreements herein contained and such violations or defaults shall remain uncured
thirty (30) days after written notice thereof from Landlord to Tenant, then the
Landlord may cancel this Lease upon giving the notice required by law, and re-
enter said premises, using such force within the process of the law as may be
required. Notwithstanding such re-entry by the Landlord, the liability of the
Tenant for the rent provided for herein shall not be extinguished for the
balance of the term of this Lease, and Tenant covenants and agrees to make good
to the Landlord any deficiency arising from a re-entry and reletting of the
premises at a lesser rental than is herein agreed. The Tenant shall pay such
deficiency each month as the amount thereof is ascertained by the Landlord. In
the event Landlord incurs any Costs or expenses in connection with such
reletting, including leasing commissions or any changes, alterations or
additions to the premises, or such part thereof, in order to restore the
premises to their condition before Tenant's occupancy as may be required for the
purposes of reletting said premises or any part thereof, Tenant shall be
responsible for such cost.

                                    XVIII.
                           Costs and Attorney's Fees
                           -------------------------

     If either party commences litigation, costs and reasonable attorney fees
shall be included as an award in any judgment rendered in favor of the
prevailing party.

                                     XIX.
                             Non-Waiver of Breach
                             --------------------

     The failure of the Landlord or Tenant to insist upon strict performance of
any of the covenants and agreements of this Lease, or to exercise any option
herein conferred in any one or more instances, shall not be construed to be a
waiver of relinquishment of any such, or any other covenants or agreements, but
the same shall be and remain in full force and effect.

                                      XX.
                              Removal of Property
                              -------------------

     In the event of any entry in, or taking possession of, the leased premises,
the Landlord shall have the right, but not the obligation to remove from the
leased premises all personal property located therein, and may store the same in
any place selected by Landlord, including but not limited to a public warehouse,
at the expense and risk of the owners thereof, with the right to sell such
stored property, without notice to Tenant, after it has been stored for a period
of thirty (30) days or mere, the proceeds of such sale to be applied first to
the cost of such sale, second to the payment of the charges for storage, if any
and third to the payment of any other sums of money which may then be due from
Tenant to Landlord under any of the terms hereof, the balance, if any to be paid
to Tenant. Tenant hereby waives all claims for damages that may be caused by
Landlord's re-entry and taking possession of the premises in the Lease, and will
save Landlord harmless from all loss, costs, or damage occasioned thereby and no
such re-entry and taking possession shall be considered or construed to be a
forcible entry.

                                      -7-
<PAGE>

                                     XXI.
                             Heirs and Successors
                             --------------------

     Subject to the provisions hereof pertaining to assignment and subletting,
the covenants and agreements of this Lease shall be binding upon the heirs,
legal representatives, successors and assigns of any or all of the parties
hereto.

                                     XXII.
                            Conditions of Occupancy
                            -----------------------

     Tenant agrees to abide and be bound by the following rules and policies of
Landlord, which shall be considered as covenants of this Lease:

     a)   Light and Air.  This Lease does not grant or purport to grant any
          -------------
rights to access to light or air over property, and this Lease does not warrant
or protect against interferences with light or air in the leased premises by
construction upon adjacent, abutting or nearby property.

     b)   Locks.  No lock shall be put on any door without the prior consent of
          -----
Landlord.

     c)   Electrical Installations.  Tenant shall not without the prior consent
          ------------------------
of Landlord operate or install any specialized electrical equipment or machinery
(other than ordinary office equipment), or replace or move any electric light
fixtures.

     d)   Awnings.  Any existing awnings shall not be removed or altered without
          -------
the consent of Landlord and no additional awnings shall be attached to the
outside of any windows or the premises hereby leased.

     e)   Windows.  The Tenant shall not allow anything to be placed on the
          -------
outside window ledges of said premises; and nothing shall be thrown by the
Tenant or others out of the windows of said building.

     f)   Floor coverings.  The Tenant or other person shall not lay linoleum or
          ---------------
other similar floor covering with any paste materials save and excepting that
which may be easily removed with water. The use of cement or similar adhesive
material is expressly prohibited. The tacking or fastening of any flooring
material to the base board molding is expressly prohibited.

     g)   Furniture and Bulky Articles.  No safe or other article of over 1,000
          ----------------------------
pounds shall be moved into said premises without the consent of the Landlord;
the Landlord shall have the right to fix the position of any article of weight
in said premises.

     h)   Windows-Rain and snow.  Tenant shall lace great care not to leave
          ---------------------
windows open when it rains or snows. Damage resulting either to Landlord or to
other tenants from failure to observe this precaution shall be chargeable to the
Tenant on which premises the neglect occurred.

                                      -8-
<PAGE>

     i)   Plumbing.  Water closet and other water fixtures shall not be used for
          --------
any purposes other than those for which they are intended, and any damage
resulting from misuse on the part of the Tenant, its agents or employees, shall
be paid for by Tenant. No person shall waste water by interfering or tampering
with the faucets or otherwise.

     j)   Doors.  Tenant shall close and keep locked all entrance and exit doors
          -----
to the premises during non--business hours or as otherwise required by any
governmental authorities having jurisdiction over the building or by Landlord's
insurance company.

     k)   No Smoking.  Neither Tenant, nor any of Tenant's employees, invitees,
          ----------
licensees, agents, customers or guests, shall smoke any tobacco products in the
premises or anywhere else in the Marathon Building at any time.

     l)   Other Regulations.  Landlord reserves the right to make such other and
          -----------------
further reasonable regulations as in its judgment may from time to time be
needed or desirable for the safety, care and cleanliness of the premises or the
building and the preservation of good order therein.

                                    XXIII.
                                   Hold-Over
                                   ---------

     If the Tenant shall, with the written consent of Landlord, hold over after
the expiration of the term of this Lease, such tenancy shall be for an
indefinite period of time on a month-to-month tenancy, which tenancy may be
terminated as provided by the Laws of the State of Washington. During such
tenancy Tenant agrees to pay to the Landlord the same rate of rental as set
forth herein, unless a different rate is agreed upon, and to be bound by all of
the terms, covenants, and conditions as herein specified, so far as applicable.

                                     XXIV.
                                 Subordination
                                 -------------

     This Lease is subject and subordinate to all mortgages and/or deeds of
trust which may now or hereafter encumber or otherwise affect the premises and
to all renewals, modifications, consolidations, replacements and extensions
thereof. Tenant agrees to execute from time to time a written agreement to
evidence the subordination of this Lease to such mortgage or deed of trust.

                                     XXV.
                                   Insurance
                                   ---------

     Landlord, for the benefit of Landlord, shall maintain fire and extended
coverage insurance throughout the term of this Lease in an amount acceptable to
Landlord. Such insurance shall cover the premises and the building, but shall
not cover the contents of the premises or the building. Tenant agrees that
during the term of this Lease, and for any option periods thereafter, Tenant, at
its sole cost and expense, and for the mutual benefit of Landlord and Tenant,
shall

                                      -9-
<PAGE>

carry and maintain the following types of insurance for the premises leased in
the amounts specified:

     a)   Tenant agrees to maintain public liability insurance on the premises
in the minimum limit of $500,000 for property damage and in the minimum of
$1,000,000 for bodily injuries and death, and shall name Landlord as an
additional insured.

     b)   Fire and Extended Coverage Insurance, including vandalism and
malicious mischief coverage, in an amount equal to the full replacement value of
all fixtures, furniture and improvements installed by or at the expense of
Tenant.

     The aforementioned minimum limits of policies shall in no event limit the
liability of Tenant hereunder. The aforesaid insurance shall name Landlord as an
additional insured. Said insurance shall be with a company or companies
reasonably acceptable to Landlord. Tenant shall furnish from the insurance
companies or cause the insurance companies to furnish certificates of coverage.
No such policy shall be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice to Landlord by
the insurer. All such policies shall be written as primary policies, not
contributing with and not in excess of the coverage which Landlord may carry.
Tenant shall, at least twenty (20) days prior to the expiration of such
policies, furnish Landlord with renewals of binders. Tenant agrees that if
Tenant does not take out and maintain such insurance, Landlord may (but shall
not be required to) procure said insurance on Tenant's behalf and charge Tenant
the premiums together with a twenty-five percent (25%) handling charge, payable
upon demand. Tenant shall have the right to provide such insurance coverage
pursuant to blanket policies obtained by Tenant provided such blanket policies
expressly afford coverage to the premises and to Tenant as required by this
Lease.

                                     XXVI.
                                   Captions
                                   --------

     Paragraph headings are for convenience and ease of reference, and shall
neither be deemed part of the paragraph nor considered in the construction
thereof.

                                    XXVII.
                                 Incorporation
                                 -------------

     All Exhibits and the Addendum referred to in this Lease, and all terms
contained in such Exhibits and the Addendum, shall be incorporated in this Lease
by this reference.

                                    XXVIII.
                                Quiet Enjoyment
                                ---------------

     Landlord covenants and agrees that Tenant, upon paying the rent and all
other charges provided for in this Lease and upon observing and keeping all of
the Covenants, agreements and provisions of this Lease on Tenant's part to be
observed and kept, and subject to the provisions

                                      -10-
<PAGE>

of this Lease, Tenant shall be entitled to the peaceable and quiet enjoyment of
the premises and all rights and privileges granted to Tenant under this Lease.

                                     XXIX.
                                   Liability
                                   ---------

     Each individual or entity signing this Lease as Tenant shall be jointly and
severally liable for all obligations, covenants and liabilities of Tenant
hereunder.

                                     XXX.
                                    Brokers
                                    -------

     In connection with the negotiation and execution of this Lease, Landlord
was represented by Madison & Co., LLC and Tenant was not represented by a
broker.

     IN WITNESS WHEREOF, the Landlord and Tenant have signed, sealed and
executed this Lease as of the day and year first above written.

Landlord                                 Tenant
--------                                 ------

STRATTON PROPERTIES, INC.                GLENN BALLMAN, individually

By /s/: C. Jairus Stratton               /s/: Glenn Ballman
C. Jairus Stratton, III President        MEGADEPOT, INC.

                                         By: /s/: Glenn Ballman
                                         Glenn Ballman President



PROVIDENCE OF WASHINGTON )
                         ) ss:
COUNTY OF KING           )

     I certify that I know or have satisfactory evidence that C. JAIRUS STRATON,
III is the person who appeared before me, and said person acknowledged that he
signed this instrument, on oath stated that he was authorized to execute the
instrument and acknowledged it as the President of STRATTON PROPERTIES, INC. to
be the free and voluntary act of such party for the uses and purposes mentioned
in the instrument.

                                      -11-
<PAGE>

     GIVEN under my hand and official seal this 12th day of May, 1998

(Seal or Stamp)               /s/: Margery W. Howie
                              Notary Public in and for the State of Washington,
                              residing at Bainbridge Island
                              My commission expires 8/25/2001

                              OFFICIAL SEAL
                              MARGERY W. HOWIE
                              Notary Public - State of Washington
                              My Commission expires 8/25/01

                                      -12-
<PAGE>

PROVIDENCE OF BRITISH COLUMBIA )
                               ) ss:
COUNTY OF VANCOUVER            )

     I certify that I know or have satisfactory evidence that GLENN BALLMAN is
the person who appeared before me, and said person acknowledged that he signed
this instrument, on oath stated that he was authorized to execute the instrument
and acknowledged it as the President of MEGADEPOT, INC. to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.

     GIVEN under my hand and official seal this 8th day of May, 1998

(Seal or Stamp)               /s/: Brigitte A. Farkas
                              Notary Public in and for the Province of British
                              Columbia, residing at Vancouver
                              My commission expires Life Appointment

                              BRIGITTE A. FARKAS
                                    Notary Public
                              Honorary Vice-Consul of Hungary
                              #201, 1039 Richards Street
                              Vancouver, B.C., V6B 3E4
                              Tel: 681-5936 - Fax: 681-5930

                                      -13-
<PAGE>

PROVIDENCE OF BRITISH COLUMBIA )
                               ) ss:
COUNTY OF VANCOUVER            )

     I certify that I know or have satisfactory evidence that GLENN BALLMAN is
the person who appeared before me, and said person acknowledged that he signed
this instrument and acknowledged it to be his free and voluntary act of such
party for the uses and purposes mentioned in the instrument.

     GIVEN under my hand and official seal this 8th day of May, 1998

(Seal or Stamp)               /s/: Brigitte A. Farkas
                              Notary Public in and for the Province of British
                              Columbia, residing at Vancouver
                              My commission expires Life Appointment

                              BRIGITTE A. FARKAS
                                    Notary Public
                              Honorary Vice-Consul of Hungary
                              #201, 1039 Richards Street
                              Vancouver, B.C., V6B 3E4
                              Tel: 681-5936 - Fax: 681-5930

                                      -14-
<PAGE>

                                  EXHIBIT "A"
                                  -----------

                           IMPROVEMENTS TO PREMISES
                           ------------------------

     Prior to the commencement of the term of this Lease, Landlord shall
undertake the following improvements and cleaning of the premises.

     A.   Replace Carpet and Pad (to be #19406 JEWELED BLUE from Landlord's
                  --------------
          carpet book) paint walls and trim in building standard off-white;

     B.   Install a 36"x 36" fiberglass Shower Unit adjacent to the existing hot
                                        -----------
          water tank (as shown on sketch attached as Exhibit "A-1");

     C.   Privacy Wall:  New privacy wall to be built out 8 feet from existing
          ------------
          wall, with wall height to be not less than 8'6" with one 2/4 access
          door to the space (see plan for layout & access door location).
          Tenant will accept existing HW tank and exposed plumbing "as is" if
          the wall behind the tank is completed and painted.

     D.   Server Floor:   3/4" by 5 ft. x 8 ft. smooth faced finished grade
          ------------
          plywood (no knots) installed with finish nails and trimmed with 1x2
          wood trim.  Tenant will finish at their own expense.

     E.   Electrical:  Remove receptacle near shower location.  Install 220 V
          ----------
          service at SERVER LOCATION ONLY.  See plan layout.  Tenant will supply
          specification of the 220 V reception type.  Install new 110 receptacle
          42" off floor in locker room.  Replace all flickering lights and
          existing burned out tubes.

     F.   Ceiling tiles to be washed and replaced as necessary.  HVAC outlets to
          -------------
          be cleaned or painted.

     G.   Skylight and windows to be cleaned.
          --------------------

     H.   Deadbolt to be installed on entry door.  ReKey entry door.
          --------                                 -----

     I.   Walls and trim to be repainted building standard white.  Tenant shall
          --------------
          paint "corporate" yellow area (wall) at own expense and will pay to
          return wall to white upon lease termination.

                                      -15-
<PAGE>

                     [THIRD LEVEL FLOOR PLAN APPEARS HERE]

Third Level Floor Plan
-----------------------

209 1/2 1st avenue south
<PAGE>

MARATHON BUILDING--3rd floor west
REVISED TENANT IMPROVEMENTS dated 5/7/98
Stratton Interest Inc. - Megadepot

                                     -18-