EXHIBIT 10.4


                    STANDARD INDUSTRIAL LEASE - MULTI-TENANT
                            FERNDALE INDUSTRIAL PARK

1. Parties. This Lease, dated, for reference purposes only, January 26, 2001, is
made by and between JH KELLY LLC AND ITS ASSIGNS (herein called "Lessor") and
PROFILE TECHNOLOGIES INC. (herein called "Lessee").

2. Premises, Parking and Common Areas.

     2.1 Premises. Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein, a
portion of the real property situated in the County of Whatcom, State of
Washington commonly known as 2284 Grandview Road; 2257 Northgate Spur, Ferndale,
WA 98248 including approximately 1800 SF of office space and nonexclusive use of
certain covered storage and yard herein referred to as the "Premises," and
outlined as "Area B" on Exhibit A attached hereto, including rights to the
Common Areas as hereinafter specified but not including any rights to the roof
of the Premises or to any Building In the Industrial Center. The Premises are a
portion of a building herein referred to as the "Building." The Premises, the
Building, the Common Areas, the land upon which the same are located, along with
all other buildings and improvement, thereon. are herein collectively referred
to as the "Industrial Center."

     2.2 Vehicle Parking. Lessee shall be entitled to five (5) vehicle parking
spaces, unreserved and unassigned, on those portion of the Common Areas
designated by Lessor for parking. Lessee shall not use more parking spaces than
said number, Said parking spaces shall be used only for parking by vehicles no
larger than full-size passenger automobiles or pickup truck, herein called
"Permitted Size Vehicles," Vehicles other than Permitted Size Vehicles are
herein referred to u "Oversized Vehicles." Lessee shall not permit or allow any
vehicle, that belong to or are controlled by Lessee or Lessee's employee,
suppliers, shippers, customers, or invitees to be loaded, unloaded, or parking
in areas other thin those designated by Lessor for such activities. If Lessee
permits or allows any of the prohibited activities described in paragraph 2.2 of
this Lease, then Lessor shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Lessee, which cost shall be immediately
payable upon demand by Lessor.

     2.3 Common Areas - Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Industrial Center that are provided and designated by the Lessor from
tune to time for the general non-exclusive use of Lessor, Lessee, and other
lessees of the Industrial Center and their respective employees, suppliers,
shippers, customers and invitees, including parking areas, loading and unloading
areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and
landscaped areas.

     2.4 Common Areas - Lessee', Rights. Lessor hereby grants to Lessee, for the
benefit of Lessee and Its employees, suppliers, shippers, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulation or
restrictions governing the use of the Industrial Center. Under no circumstances
shall the right herein granted to use the Common Areas be deemed to include the
right to store any property, temporarily or permanently, in the Common Areas.
Any such storage shall be permitted only by the prior written consent of Lessor
or Lessee's designated agent which consent may be revoked at any time. In the
evens that any unauthorized storage shall occur, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

     2.5 Common Areas- Rules and Regulations. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend,
and enforce reasonable rules and regulations with respect thereto, Lessee agrees
to abide by and conform to all such rules and regulations, and to cause its
employees, suppliers, shippers, customers, and invitees to so abide and conform.
Lessor shall not be responsible to Lessee for the noncompliance with said rules
and regulations by other lessees of the Industrial Center.

     2.6 Common Areas - Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:

        (a) To make changes to the Common Areas, Including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas and walkways. (b) To close temporarily any of the
Common Areas for maintenance purposes so long as reasonable access to the
Premises remains available. (c) To designate other land outside the boundaries
of the Industrial Center to be a part of the Common Areas. (d) To add additional
building. and improvements to the Common Areas. (a) To use the Common Areas
while engaged in making additional improvements, repairs or alteration, to the
Industrial Center, or any portion thereof. (f) To do and perform such other acts
and make such other changes in, to, or with respect to the Common Areas and
Industrial Center as Lessor may, in the exercise of sound business Judgment,
deem to be appropriate.

3. Term.

     3.1 Term. The term of this lease shall be for two (2) years commencing on
February 1, 2001 and ending on January 31, 2003 unless sooner terminated
pursuant to any provision hereof.

     3.2 Delay in Possession. Notwithstanding said commencement date, if for any
reason Lessor cannot deliver possession of the Premises so Lessee on said date,
Lessor shall not be subject to any liability therefore, nor shall such failure
affect the validity of this Lease or the obligations of Lessee hereunder or
extend the term hereof, but in such case, Leases shall not be obligated to pay
rent or perform any other obligation of Lessee under the term, of this Lease,
except as may be otherwise provided in this Lease, until possession of the
Premises is tendered to Lessee, provided, however, that if Lessor shall not have
delivered possession of the Premises within sixty (60) days from said

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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commencement date, Lessee may, at Lessee's option, by notice in writing to
Lessor within ten (10) days thereafter, cancel this Lease, in which event the
parties shall be discharged from all obligations hereunder, provided further,
however, that if such written notice of Lessee is not received by Lessor within
said ten (10) day period, Lessee's right to cancel the Lease hereunder shall
terminate and be of no further force or effect.

     3.3 Early Possession. If Lessee occupies the Premises prior to said
commencement date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not advance the termination date, and Lessee shall
pay sent for such period at the initial monthly rates set forth below,

4. Rent.

     4.1 Base Rent. Lessee shall pay to Lessor, as Base Rent for the Premises,
without any offset or deduction, except as may be otherwise expressly provided
in this Lease, on the fifth (5th) day of each month of the tenet hereof, monthly
payments in advance of Fifteen Hundred and Fifty Dollars and No/100 ($1,550).
Rent for any period during the term hereof which is for less than one month
shall be a pro rate portion of the Base Rent. Rent shall be payable in lawful
money of the United States to Lessor at the address stated herein or to such
other persons or at such other places as Lessor may designate in writing. Base
Rent shall be subject to annual CPI (Bellingham/Everett) increases effective on
the anniversary data hereof; provided however, that such Base Rent increases
shall be subject to an annual ceiling of 5% and an annual floor of 2.5%. Initial
Base Rent for the period February 1, 2001--January 31, 2002, annual increases as
applicable thereafter.

     4.2 Operating Expense. Lessee shall pay to Lessor during the term hereof,
in addition to the Base Rent, and except is modified per Section 11 below,
Lessee's Share, as hereinafter defined, of all Operating Expenses, as
hereinafter defined, during each calendar year of the term of this Lease, in
accordance with the following provisions:

        (a) "Lessee's Share" is defined, for purposes of this Lease, twenty-five
percent (23%) percent.

        (b) "Operating Expenses" is defined, for purposes of this Lease, as all
costs incurred by Lessor, if any, for:

           (i) The operation, repair, and maintenance, in neat, clean, good
order and condition, of the following provisions:

          (aa) The Common Areas, including parking areas, loading and unloading
               areas, trash area,, roadways, sidewalks, walkways, parkways,
               driveways, landscaped areas, striping, bumpers, irrigation
               systems, Common Area lighting facilities and fences and gates.

          (bb) Management fee, but in no event shall such fee exceed three (3%)
               percent of gross income.

          (cc) Fire detection systems including sprinkler system maintenance and
               repair.

          (dd) Security services.

          (ee) Any other service to be provided by Lessor that is elsewhere in
               this Lease stated to be so "Operating Expense."

           (ii) Any deductible portion of an insured loss concerning any of the
items or matters described in this paragraph 4.2.

           (iii) The cost of the premiums for the liability and property
Insurance policies to be maintained by Lessor under paragraph 8 hereof.

           (iv) The amount of the real property tax to be paid by Lessor under
paragraph 10.1 hereof.

           (v) The cost of water, gas and electricity to service the Common
Area.

        (c) The inclusion of the improvements, facilities and services set forth
in paragraph 4.2(b)(i) of the definition of Operating Expanses shall not be
deemed to impose an obligation upon Lessor to either have said Improvements or
facilities or to provide those services unless the Industrial Center already has
the same, Lessor already provides the services, or Lessor has agreed elsewhere
in this Lease to provide the same or some of them.

        (d) Lessee's Share of Operating Expenses shall be payable by Lessee
within ten (10) day after a reasonably detailed statement of actual expenses is
presented to Lessee by Lessor. At Lessor's option, however, an amount maybe
estimated by Lessor front time to time of Lessee's Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each 12-month period of the Lease term, on the same day as the
Base Rent is due hereunder. In the event that Lessee pays Lessor an estimate of
Lessee's Share of Operating Expenses as aforesaid, Lessor shall deliver to
Lessee within 60 days after the expiration of each calendar year a reasonably
detailed statement showing Lessee's Share of the actual Operating Expenses
incurred during the preceding year. If Lessee's payments under this paragraph
4.2(d) during said preceding year exceed Lessee's Share as indicated on acid
statement, Lessee shall be entitled to credit the amount of such overpayment
against Leased a Share of Operating Expenses next falling due. If Lessee's
payments under ibis paragraph during said preceding year were less than Lessee's
Share as indicated on said statement, Lessee shall pay to Lessor the amount of
the deficiency within ten (10) days after delivery by Lessor to Lessee of said
statement.

     5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof
Fifteen Hundred Fifty ($1,550) as security for Lessee's faithful performance of
Lessee's obligations hereunder. If Lessee falls to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Lease,
Lessor may use, apply, or retain all or any portion of said deposit for the
payment of any rent or other charge in default or for the payment of any other
sum to which Lessor may become obligated by reason of Lessee's default, or to
compensate Lessor for any loss or damage which Lessor may suffer thereby. If
Lessor so uses or applies all or any portion of said deposit, Lessee shall
within ten (10) day after written demand therefor deposit cash with Lessor in an
amount sufficient to restore said deposit to the full amount then required of
Lessee. If the monthly rent shall, from time to time, increase during the term
of this Lease, Leases shall, at the time of such increase, deposit with Lessor
additional money as a security deposit so that the total amount of the security
deposit held by Lessor shall at all times bear the same proportion to the then
current Base Rent as the initial security deposit bears to the initial Due Rent
set forth in paragraph 4. Lessor shall not be required so keep said security
deposit separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, said deposit, or so much thereof as has not theretofore
been applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or, at Lessor's option, to the last assignee,
if any, of Lessee's interest hereunder) at the expiration of the trim hereof,
and after Lessee has vacated the Premises. No trust relationship is created
herein between Lessor and Lessee with respect to said Security.

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6. Use.

     6.1 Use. The Premises shall be used and occupied only for pipe testing and
related services or any other use which is reasonably comparable and for no
other purpose.

     6.2 Compliance with Law.

        (a) Lessor warrants to Lessee that the Premises, in the state existing
on the date that the Lease term commences, but without regard to the use for
which Lessee will occupy the Premises, does not violate any covenants or
restrictions of record, or any applicable building code, regulation or ordinance
In effect on such Lease term commencement date. In the event it is determined
that this warranty has been violated, then it shall be the obligation of the
Lessor, after written notice from Lessee, to promptly, at Lessor's sole cost sod
expense, rectify any such violation. In the event Lessee does not give to Lessor
written notice of the violation of this warranty within six (6) months from the
date that the Lease term commences, the correction of same shall be the
obligation of the Lessee at Lessee's sole cost. The warranty contained in this
paragraph 6.2(a) shall be of no force or effect if, prior to the date of the
Lease, Lessee was an owner or occupant of the Premises and, in such event,
Lessee shall correct any such violation at Lessee's sole cost.

        (b) Except as provided In paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come Into effect, whether or not they reflects change in policy from
the now existing, during the term or any part of the tens hereof, relating in
any manner to the Premises and the occupation and star by Lessee of the Premises
and of the Common Areas, Lessee shall not use nor permit the use of the Premises
or the Common Areas in any manner that will tend to create waste or a nuisance
or shall tend to disturb other occupants of the Industrial Center.

     6.3 Condition of Premises.

        (a) Lessor shall deliver the Premises to Lessee clean and free of debris
on the Lease commencement date (unless Lessee is already in possession) and
Lessor warrants to Lessee that the plumbing, lighting, air conditioning,
heating, and loading doors in the Premises shall be in good operating condition
on the Lease commencement date. In the event that it is determined that this
warranty has been violated, then it shall be the obligation of Lessor, after
receipt of written notice from Lessee putting forth with specificity the stature
of the violation, to promptly, at Lessor's sole cost, rectify such violation.
Lessee's failure to give such written notice to Lessor within 30 days after the
Lease commencement date shall cause the conclusive presumption that Lessor has
complied with all of Lessor's obligations hereunder. The warranty contained in
this paragraph 6.3(a) shall be of no force or effect if prior to the date of
this Lease, Lessee was en owner or occupant of the Premises.

        (b) Except as otherwise provided in this Lease, Lessee hereby accepts
the Premises in their condition existing as of the Lease commencement date or
the date that Lessee takes possession of the Premise., whichever is earlier,
subject to all applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use of the Premise., and any
covenants or restrictions of record, and accepts this Lease, subject thereto and
to all matters disclosed thereby and by any exhibits attached hereto. Lessee
acknowledges that neither Lessor nor Lessor's agent has made any representation
or warranty as to the present or future suis5bility of the Premises for the
conduct of Lessee's business.

7. Maintenance, Repairs, Alterations and Common Area Services.

     7.1 Lessor's Obligations. Subject to the provisions of paragraphs 4.2
(Operating Expenses), 6 (Use), 7.2 (Lessee's Obligations) and 9 (Damage or
Destruction), and except for damage caused by any negligent or intentional act
or omission of Lessee, Lessee's employees, suppliers, shippers, customers, or
invitees, in which event Lessee shall repair the damage, Lessor, at Lessor's
expense, subject to reimbursement pursuant to paragraph 4.2, shall keep in good
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, and roof of the Premises, as well as the parking lots,
walkways, driveways, landscaping, fences, signs and utility installations of the
Common Area, and all parts thereof as well as providing the services for which
there is an Operating Expense pursuant to paragraph 4.2. Lessor shall not,
however, be obligated to paint the exterior or interior surface of exterior
walls, nor shall Lessor be required to maintain, repair or replace windows,
doors or plate glass of the Premises. Lessor shall have no obligation to make
repair, under this paragraph 7.1 until a reasonable time after receipt of
written notice from the Lessee of the need for such repairs. Lessee expressly
waives the benefits of any statute now or hereafter in effect which would
otherwise afford Lessee the right to snake repairs at Lessor's expense or to
terminate this Lease because of Lessor's failure to keep the Premises in good
order, condition and repair. Lesser shall not be liable for damages or loss of
any kind or nature by reason of Lessor's failure to furnish any Common Area
Services when such failure is caused by accident, breakage, repairs, strikes,
lockout, or other labor disturbances or disputes of any character, or by any
other cause beyond the reasonable control of Lessor.

     7.2 Lessee's Obligations.

        (a) Subject to the provisions of paragraphs 6 (Use), 7.1 (Lessor's
Obligations), and 9 (Damage or Destruction), Lessee, at Lessee's expense, shall
keep in good order, condition arid repair the Premises and every part thereof
(whether or not the damaged portion of the Premises or the means of repairing
the same are reasonably or readily accessible to Lessee) including, without
limiting the generality of the foregoing, all plumbing, heating, ventilating and
air conditioning systems (Lessee shall procure and maintain, at Lessee's
expense, a ventilating and air conditioning system maintenance contract),
electrical and lighting facilities and equipment within the Premises, fixtures,
interior walls and Interior surfaces of exterior walls, ceilings, windows,
doors, plate glass, and skylight; located within the Premises. Lessor reserves
the right to procure and maintain the ventilating and air condition system
maintenance contract and if Lessor so elects, Lessee shall reimburse Lessor,
upon demand, for the cost thereof.

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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        (b) If Lessee fails to perform Lessee's obligations under this paragraph
7.2 or under any other paragraph of this Lease, Lessor may enter upon the
Premises after ten (10) days prior written notice to Lessee (except in the case
of emergency, in which no notice shall be required), perform such obligations on
Lessee's behalf and put the Premises In good order, condition and repair, and
the cost thereof together with interest thereon at the maximum rate then
allowable by law shall be due and payable as additional rent to Lessor together
with Lessee's next Base Rent installment.

        (c) On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear excepted, clean and free of debris. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices, Lessee shall
repair any damage to the Premises occasioned by the installation or removal of
Lessee's trade fixtures, alterations, furnishings and equipment. Notwithstanding
anything to the contrary otherwise stated in this Lease, Lessee shall leave the
air lines, power panels, electrical distribution systems, lighting fixtures,
apace heaters, air conditioning, plumbing and fencing on the Premises in good
operating condition.

     7.3 Alterations and Additions.

        (a) Lessee shall not, without Lessor's prior written consent make any
alterations, improvements, additions, or Utility Installations in, on, or about
the Premises, or the Industrial Center, except for nonstructural alterations to
the Premises not exceeding $2,500 in cumulative costs, during the term of this
Lease. In any event, whether or not in excess of $2,500 in cumulative cost,
Lessee shall make no change or alteration to the exterior of the Premises nor
the exterior of the Building nor the Industrial Center without Lessor's prior
written consent. As used in this paragraph 7.3 the term "Utility Installation"
shall mean carpeting, window coverings, air lines, power panels, electrical
distribution systems, lighting fixtures, space heaters, air conditioning,
plumbing, and fencing. Lessor may require that Lessee remove any or all of said
alterations, improvements, additions or Utility Installations at the expiration
of the term, and restore the Premises and the Industrial Center to their prior
condition, Lessor may require Lessee to provide Lessor, at Lessee's sole coat
and expense, a lien and completion bond in en amount equal to one and one-half
times the estimated coat of such improvements, to Insure Lessor against any
liability for mechanics and materialsmen's liens and to insure completion of the
work, should Lessee make any alterations, improvements, additions or Utility
Installations without the prior approval of Lessor, Lessor may, at any time
during the term of this Lease, require that Lessee remove any or all of the
same.

        (b) Any alterations, improvements, additions or Utility Installations in
or about the Premises or the Industrial Center that Lessee shall desire to make
and which requires the consent of the Lessor shall be presented to Lessor in
written form, with proposed detailed plans. If Lessor shall give its consent,
the consent shall be deemed conditioned upon Lessee acquiring a permit to do so
from appropriate governmental agencies, the furnishing of a copy thereof to
Lessor prior to the commencement of the work and the compliance by Lessee of all
conditions of said permit in a prompt and expeditious manner.

        (c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claim; are or may be secured by any mechanics or
materialmen's lien against the Premises, or the Industrial Center, or any
interest therein. Lessee shall give Lessor not less than 10 days' notice prior
to the commencement of any work in the Premises, and Lessor shall have the right
to post notices of nonresponsibility in or on the Premises or the Building as
provided by law. If Lessee shall, in good faith, contest the validity of any
such lien, claim or demand, then Lessee shall, at its sole expense defend itself
and Lessor against the same and shall pay and satisfy and such adverse Judgment
that may be rendered thereon before the enforcement thereof against the Lessor
or the Premises or the Industrial Center, upon the condition that if Lessor
shall require, Lessee shall furnish to Lessor a surety bond satisfactory to
Lessor in an amount equal to such contested lien claim or demand indemnifying
Lessor against liability for the same and holding the Premises and the
industrial Center free from the effect of such lien or claim. In addition,
Lessor may require Lessee to pay Lessor's attorneys fees and costs in
participating in such action if Lessor shall decide it is to Lessor's beet
interest to do so.

        (d) All alterations, improvement,, additions and Utility Installations
(whether or not such Utility Installations constitute trade fixtures of Lessee),
which may he made on the Premises, shall be the property of Lessor and shall
remain upon and be surrendered with the Premises at the expiration of the Lease
terms, unless Lessor requires their removal pursuant to paragraph 7.3(s).
Notwithstanding the provisions of this paragraph 7.3(d), Lessee's machinery and
equipment, other than that which is affixed to the Premises so that it cannot be
removed without materiel damage to the Premises, and other than Utility
installations, shall remain the property of Lessee and may be removed by Lessee
subject to the provisions of paragraph 7.2.

     7.4 Utility Additions. Lessor reserves the right to install new or
additional utility facilities throughout the Building and the Common Areas for
the benefit of Lessor or Lessee, or any other lessee of the industrial Center,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Lessee's use of the Premises.

8. Insurance; Indemnity.

     8.1 Liability Insurance - Lessee. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease a policy of Combined Single
Limit Bodily Injury and Property Damage insurance insuring Lessee and Lessor
against any liability arising out of the use, occupancy or maintenance of the
Premises and the Industrial Center. Such insurance shall be in an amount not
less than $1,000,000.00 per occurrence. The policy shall insure performance by
Lessee of the indemnity provisions of this paragraph K. The limits of said
insurance shall not, however, limit the liability of Lessee hereunder.

     8.2 Liability Insurance - Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Property Damage Insurance, insuring Lessor, but not Lessee, against any

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liability arising out of the ownership, use, occupancy or maintenance of the
Industrial Center in an amount not less than $1,000,000.00 per occurrence.

     8.3 Property Insurance. Lessor shall obtain and keep in force during the
bros of this Lease a policy or policies of insurance covering loss or damage to
the Industrial Center improvements, but not Lessee's personal property,
fixtures, equipment or tenant Improvements, in an amount not to exceed the full
replacement value thereof, as the same may exist from time to time, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, flood (in the event same is
required by a lender having a lien on the Premise,) special extended perils
("all risk," as such term is used in the insurance industry), plate glass
insurance and such other insurance as Lessor deems advisable. In addition,
Lessor shall obtain and keep in force, during the terms of this Lease, a policy
of rental value insurance covering a period of one year, with loss payable to
Lessor, which insurance shall also cover all Operating Expenses for said period.
In the event that the Premises shall suffer an insured loss u defined in
paragraph 9.1(g) hereof, the deductible amounts under the casualty insurance
policies relating to the Premises shall be paid by Lessee.

     8.4 Payment of Premium Increase.

        (a) After the term of this Lease has commenced, Lessee shall not be
responsible for paying Lessee's Share of any increase in the property insurance
premium for the Industrial Center specified by Lessor's insurance carrier as
being caused by the use, acts or omissions of any other lessee of the Industrial
Center, or by the nature of such other lessee's occupancy which create an
extraordinary or unusual risk.

        (b) Lessee, however, shall pay the entirety of any increase in the
property insurance premium for the Industrial Center over what It was
immediately prior to the commencement of the term of this Lease if the increase
is specified by Lessor's insurance carrier as being caused by the nature of
Lessee's occupancy or any act or omission of Lessee.

     8.5 Insurance Policies. Insurance required hereunder shall be in companies
holding a "General Policyholders Rating" of at least B plus, or such other
rating as may be required by a lender having a lien on the Premises, as set
forth in the most current issue of "Best's Insurance Guide." Lessee shall not do
or permit to be done anything which shall invalidate the insurance policies
carried by Lessor. Lessee shall deliver to Lessor copies of liability insurance
policies required under paragraph 8.1 or certificates evidencing the existence
and amounts of such insurance within seven (7) days after the commencement date
of this Lease. No such policy shall be cancelable or subject to reduction of
coverage or other modification except after 30 days prior written notice to
Lessor. Lessee shall, at least 30 days prior to the expiration of such policies,
furnish Lessor with renewals or "binders" thereof.

     8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and
relieve the other and waive their entire right of recovery against the other for
loss or damage arising out of or incident to the perils insured against which
perils occur in, on or about the Premises, whether due to the negligence of
Lessor or Lessee or their agents, employees, contractors and/or invitees. Lessee
and Lessor shall, upon obtaining the policies of insurance required give notice
to the Insurance carrier or camera that the foregoing mutual waiver of
subrogation is contained in this Lease.

     8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor from and
against any and all claims arising from Lessee's use of the Industrial Center,
or from the conduct of Lessee's business or from any activity, work or things
done, permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further indemnify and hold harmless Lessor from and against any and all
claims arising from any breach or default in the performance of any obligation
on Lessee part to be performed under the terms of this Lease, or arising from
any act or omission of Lessee, or any of Lessee's agents, contractors, or'
employees, and from and against all costs, attorney's fees, expenses and
liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon; and in case arty action or proceeding be brought
against Lessor by reason of any such claim, Lessee upon notice from Lessor,
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessee, as a
material pert of the consideration to Lessor, hereby assumes all risk of damage
to property of Lessee or injury to persons, in, upon or about the Industrial
Center arising from any cause and Lessee hereby waives all claims in respect
thereof against Lessor.

9. Damage or Destruction.

     9.1 Definitions.

        (a) "Premises Partial Damage" shall mean if the Premises are damaged or
destroyed to the extent that the cost of repair is less than fifty percent of
the then replacement cost of the Premises.

        (b) "Premises Total Destruction" shall mean if the Premises are damaged
or destroyed to the extant that the coat of repair is fifty percent or more of
the then replacement cost of the Premises.

        (c) "Premises Building Partial Damage" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent of the then replacement Cost of the
Building.

        (d) "Premises Building Total Destruction" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent or more of the then replacement cost of the
Building.

        (e) "Industrial Center Buildings" shall mean all of the buildings on the
Industrial Center site.

        (f) "Industrial Canter Buildings Total Destruction' shall mean if the
industrial Center Buildings are damaged or destroyed to the extent that the cost
of repair is fifty percent or more of the then replacement cost of the
Industrial Center Buildings.

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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        (g) "Insured Loss" shall mean damage or destruction which was caused by
an event required to be covered by the Insurance described in paragraph 8. The
fact that an Insured Loss has a deductible amount shall not make the loss an
uninsured loss.

        (h) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring excluding all improvements
made by lessees.

     9.2 Premises Partial Damage; Premises Building Partial Damage.

        (a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the teem of this Lease there is damage which is an Insured
Loss and which falls into the classification of either Premises Partial Damage
or Premises Building Partial Damage, then Lessor shall, at Lessor's expense,
repair such damage to the Premises, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect.

        (b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and 9.5.
if at any time during the term of this Lease there is damage which is not an
Insured Loss and which falls within the classification of Premises Partial
Damage or Premises Building Partial Damage, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repair at Lessee's
expense), which damage prevents Lessee from using the Premises, Lessor may at
Lessor's option either (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) give written notice to Lessee within 30 days after' the date of
the occurrence of such damage of Lessor's intention to cancel and terminate this
Lease as of the date of the occurrence of such damage. In the event Lessor
elects to give such notice of Lessor's intention to cancel and terminate this
Lease, Lessee shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's intention to repair
such damage at Lessee's expense, without reimbursement from Lessor, in which
event this Lessee shall continue in full force and effect, and Lessee shall
proceed to snake such repairs as soon as reasonably possible. If Lessee does not
give such notice within such 10-day period this Lease shall be canceled and
terminated as of she date of the occurrence of such damage.

     9.3 Premises Total Destruction; Premises Building Total Destruction;
Industrial Center Buildings Total Destruction.

        (a) Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease there is damage, whether or not it is an Insured
Loss, and which falls into the classifications of either (i) Premises Total
Destruction, or (ii) Premises Building Total Destruction, or (iii) Industrial
Center Buildings Total Destruction, then Lessor may at Lessee's option either
(i) repair such damage or destruction, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible at Lessor's expense, and
this Lease shill continue in full force and effect, or (ii) give written notice
to Lessee within 30 days after the date of occurrence of such damage of Lessor's
Intention to cancel and terminate this Lease, in which case this Lease shall be
canceled and terminated as of the date of the occurrence of such damage.

     9.4 Damage Near End of Term.

        (a) Subject to paragraph 9.4(b), if at anytime during the last six
months of the term of this Lease there is substantial damage, whether or not an
Insured Loss, which falls within the classification of Premises Partial Damage,
Lessor may as Lessor's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Lessee or Lessor's
election to do so within 30 days after the date of occurrence of such damage.

        (b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Lessee shall exorcise such option, if it is to
be exercised at all, no later than 20 days after the occurrence of an Insured
Loss falling within the classification of Premises Partial Damage during the
last six months of the term of this Lease. If Lessee duly exercises such option
during said 20 day period. Lessor shall, at Lessor's expense, repair such
damage, but not Lessee's fixtures, equipment or tenant improvements, as soon a.
reasonably possible and this Lease shall continue in full force and effect. If
Lessee fails to exercise such option during said 20-day period, then Lessor may
at Lessor's option terminate and cancel this Lease as of the expiration of said
20 day period by giving written notice to Lessee of Lessor's election to do so
within ten (10) days after the expiration of said 20 day period, notwithstanding
any term or provision in the grant of option to the contrary.

     9.5 Abatement of Rent; Lessee's Remedies.

        (a) In the event Lessor repairs or restores the Premises pursuant to the
provisions of this paragraph 9, the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated in proportion
to the degree to which Lessee's use of the Premises is impaired. Except for
abatement of rein, if any, Lessee shall have no claim against Lessor for any
damage suffered by reason of any such damage, destruction, repair or
restoration.

        (b) If Lessor shall be obligated to repair or restore the Premises under
she provisions of this paragraph 9 and shall not commence such repair or
restoration within 90 days after such obligation shall accrue, Lessee may at
Lessee's option cancel and terminate this Lease by giving Lessor written notice
of Lessee's election to do so at any time prior to the commencement of such
repair or restoration. In such event this Lease shall terminate as of the date
of this notice.

     9.6 Termination - Advance Payments. Upon termination of this Lease pursuant
to this paragraph 9, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.

     9.7 Waiver. Lessor and Lessee waive the provisions of arty statute which
relate so termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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10. Real Property Taxes.

     10.1 Payment of Taxes. Lessor shall pay the real property tax, as defined
In paragraph 10.3, applicable to the Industrial Center subject to reimbursement
by Lessee of Lessee's Share of such taxes in accordance with the provisions of
paragraph 4.2, except us otherwise provided Its paragraph 10.2.

     10.2 Additional Improvements. Lessee shall not be responsible for paying
Lessees Share of any increase in rail property tax specified in the tax
assessor's records and work sheets as being caused by additional improvements
placed upon the Industrial Center by other lessees or by Lessor for the
exclusive enjoyment of such other leases. Lessee shall, however, pay to Lessor
at the time that Operating Expenses are payable under paragraph 4.2(e) the
entirety of any increase in real property tax if assessed solely by reason of
additional improvements placed upon the Premises by Lessee or at Lessee's
request.

     10.3 Definition of "Real Property Tax." As used herein, the term "real
property tax' shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy tax (other than inheritance, personal income or
estate taxes) imposed on the Industrial Center or any portion thereof by any
authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Industrial Center or in any portion
thereof, as against Lessor's right to rent or other income therefrom, and as
against Lessor's business of leasing the Industrial Center. The term "real
property tax" shall also include any tax, fee, levy, assessment or charge (i) in
substitution of, partially or' totally, any tax, fee, levy, assessment or charge
hereinabove included within the definition of real property tax," or (ii) the
nature of which was hereinbefore included within the definition of real property
tax," or (iii) which is imposed for a service or right not charged prior to June
1, 1978, or, if previously charged, has been increased since June 1, 1978, or
(iv) which is Imposed as a result of, transfer, either partial or total, of
Lessor's interest in the Industrial Center of which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such transfer, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.

     10.4 Joint Assessment. If the Industrial Center is not separately assessed,
Lessee's Share of the real property tax liability shall be an equitable
proportion of the real property taxes for all of the land and improvements
including within the tax parcel assessed, such proportion to be determined by
Lessor from the respective valuations assigned in the assessor's work sheets or
such other information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.

     10.5 Personal Property Taxes.

        (a) Lessee shall pay prior to delinquency all taxes assessed against
arid levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.

        (b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall Pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.

11. Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to the
Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.

12. Assignment and Subletting.

     12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner and say attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitutes breach of
this Lease without the need for notice to Lessee under paragraph 13.1.

     12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Lessee Affiliate,"
provided the; before such assignment shall be effective said assignee shall
assume, in full, the obligations of Lessee under this Lease. Any such assignment
shall not, in any way, affect or limit the liability of Lessee under the terms
of this Lease even if after such assignment or subletting the terms of this
Lease are materially changed or altered without the consent of Lessee, the
consent of whom shall not be necessary.

     12.3 Terms and Conditions of Assignment. Regardless of Lessor's consent, no
assignment shill release Lessee of Lessee's obligations hereunder or alter the
primary liability of Lessee to pay the Base Rent and Leased, Share of Operating
Expenses, and to perform all other obligations to be performed by Lessee
hereunder. Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of rent shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the breach of
any of the terms or conditions of this paragraph 12 or this Lease. Consent to
one assignment shall not be deemed consent to any subsequent assignment. In the
event of default by any assignee of Lessee or any successor of Lessee, in the
performance of any of the terms hereof, Lessor may proceed directly against
Lessee without the necessity of exhausting remedies against said assignee.

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
Page 8

Lessor may consent to subsequent assignments of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.

     12.4 Terms and Conditions Applicable to Subletting. Regardless of Lessor'
consent, the following terms and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be included In sublease:

        (a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease; provided, however, that until
a default shall occur in the performance of Lessee's obligations under this
Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not, by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligation, to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and direct, any such sublessee,
upon receipt of written notice from Lessor stating that a default exists in the
performance of Lessee's obligations under this Lease, to pay to Lessor the rents
due and so become due under the sublease. Lessee agrees that such sublessees
shall have the right to rely upon any such statement and request from Lessor,
and that such sublessee shall pay such rents to Lessor without any obligation or
right to inquire as to whether such default exists and notwithstanding any
notice from or claim from Lessee to the contrary. Lessee shall have no right or
claim against such sublessee or Lessor for any such rents so paid by said
sublessee to Lessor.

        (b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any sublease,
Lessee shall use only such form of sublease as is satisfactory to Lessor, sad
once approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any sublessee shall, by reason of entering into
a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation herein
to be performed by Lessee, other then such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.

        (c) If Lessee's obligations under this Lease have been guaranteed by
third parties, then a sublease and Lessor's consent thereto, shall not be
effective unless said guarantors give their written consent to such sublease and
the terms thereof.

        (d) The consent by Lessor to any subletting shall not release Lessee
from its obligations or alter the primary liability of Lessee to pay the rent
and perform and comply with all of the obligations of Lessee to be performed
under this Lease,

        (e) The consent by Lessor to any subletting shall not constitute a
consent to any subsequent subletting by Lessee or to any assignment or
subletting by the sublessee. However, Lessor may consent to subsequent
sublettings and assignments of the sublease or any amendments or modifications
thereto without notifying Lessee or anyone else liable on the Lease or sublease
and without obtaining their consent and such action shall not relieve such
persons from liability.

        (f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantor, or any one else responsible for the
performance of this Lease, including the sublease, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.

        (g) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor, at its option arid without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.

        (h) Each and every consent required of Lessee under a sublease shall
also require the consent of Lessor.

        (i) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.

        (j) Lessor's written consent to any subletting of the Premises by Lessee
shall not constitute an acknowledgment that no default then exists under this
Lease of the obligations to be performed by Lessee nor shall such consent be
deemed a waiver of any then existing default, except as may be otherwise stated
by Lessor at the time.

        (k) With respect to any subletting to which Lessor has consented, Lessor
agrees to deliver a copy of any notice of default by Lessee to the sublessee.
Such sublessee shall have the right to cure a default of Lessee within 10 days
after service of said notice of default upon such sublessee, and the sublessee
shall have a right of reimbursement and offset from and against Lessee for any
such defaults cured by the sublessee.

     12.5 Attorney's Fees. In the event Lessee shall assign or sublet the
Premises or requests the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $350.00 for each such request.

13. Default; Remedies.

     13.1 Default. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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        (a) The vacating or abandonment of the Premises by Lessee.

        (b) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.

        (c) Except as otherwise provided in this Lease, the failure by Lessee to
observe or perform any of the covenants, conditions, or provisions of this Lease
to be observed or performed by Lessee, other than described in paragraph (b)
above, where such failure shall continue for a period of 30 days after written
notice thereof from Lessor to Lessee; provided, however, that if the nature of
Lessee's noncompliance is such that more than 30 days are reasonably required
for its cure, then Lessee shall not be deemed to be in default if Lessee
commenced such cure within said 30-day period and thereafter diligently
prosecutes such cure to completion. To the extent permitted by law, such 30-day
notice shall constitute the sole and exclusive notice required to be given so
Lessee under applicable Unlawful Detainee statutes.

        (d) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as
defined in 11 U.S.C. 101 or any successor statute thereto (unless, in the case
of a petition filed against Lessee, the same is dismissed within 60 days); (iii)
the appointment of a trustee or receiver to take possession of substantially all
of Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where possession is not restored to Lessee within 30 days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within 30 days. In the event that any provision of
this paragraph 13.1(d) is contrary to any applicable law, such provision shall
be of no three or effect.

        (e) The discovery by Lessor that any financial statement given to Lessor
by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in
interest of Lessee or any guarantor of Leased, obligation hereunder, was
materially false.

     13.2 Remedies. In the event of any such material default by Lessee, Lessor
may at any time thereafter, with or without notice or demand and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default:

        (a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease sad the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee all damages incurred by Lessor
by reason of Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorney's fees,
and any real estate commission actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.

        (b) Maintain Lessee's right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have vacated or abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.

        (c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premise, are located.
Unpaid installment of rent and other unpaid monetary obligations of Lessee under
the terms of this Lease shall bear interest from the date due at the maximum
rate then allowable by law.

     13.3 Default by Lessor. Lessor shall not be in default unless Lessor falls
to perform obligations required of Lessor within a reasonable time, but in no
event later than 30 days after written notice by Lessee to Lessor and to the
holder of any first mortgage or deed of trust covering the Premises whose name
and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligation; provided,
however, that if the nature of Lessor's obligation is such that more than 30
days are required for performance then Lessor shall not be in default if Lessor
commences performance within such 30 day period and thereafter diligently
prosecutes the same to completion.

     13.4 Late Charges. Leases hereby acknowledges that late payment by Lessee
to Lessor of Base Rent, Lessee's Share of Operating Expenses or other sums due
hereunder will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Property. Accordingly, if any installment of Base Rent,
Operating Expenses, or any other sum due from Lessee shall not be received by
Lessor or Lessor's designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
late charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Lessor will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute e waiver of Lessee's default
with respect to such overdue amount, nor prevent Lessor from exercising any of
the other rights and remedies granted hereunder. In the event that a late charge
is payable hereunder, whether or not collected, for three (3) consecutive
installments of any of the aforesaid monetary obligations of Lessee, then Base
Rent shall automatically become due and payable quarterly in advance, rather
than monthly, notwithstanding paragraph 4.1 or any other provision of this Lease
to the contrary.

14. Condemnation. If the Premises or any portion thereof or the Industrial
Center are taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than 10% of
the floor area of the Premises, or more than 25% of that portion of the Common

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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Areas designated parking for the Industrial Center is taken by condemnation,
Lessee may, at Lessee's option, to be exercised in writing only within ten (10)
days after Lessor shall have given Lessee written notice of such taking (or in
the absence of such notice, within ten (10) days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the premises remaining, except that the rent shall be
reduced in the proportion that the floor area of the Premises taken bears to the
total floor area of the Premises. No reduction of rent shall occur if the only
area taken is that which does not have the Premises located thereon. Any award
for the taking of all or any part of the Premises under the power of eminent
domain or any payment made under threat of the exercise of such power shall be
the property of Lessor, whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Lessee shall be entitled to any award
for loss or damage to Lessee's trade fixtures and removable personal property.
In the event that this Lease is not terminated by reason of such condemnation,
Lessor shall to the extent of severance damages received by Lessor in connection
with such condemnation, repair any damage to the Premises caused by such
condemnation except to the extent that Lessee has been reimbursed therefor by
the condemning authority. Lessee shall pay any amount in excess of such
severance damages required to complete such repair.

15. Estoppel Certificate.

        (a) Each party (as "responding party") shall at any time upon not less
than ten (10) days' prior written notice from the other party ("requesting
party") execute, acknowledge and deliver to the requesting party a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge, any
uncured defaults on the pert of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrance of the Premises or of the business
of the requesting party.

        (b) At the requesting party's option, the failure to deliver such
statement within such times shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance, and (iii)
if Lessor is the requesting party, not more than one month's rent has been paid
in advance.

        (c) If Lessor desires to finance, refinance, or sell the Property, or
any part thereof, Lessee hereby agrees to deliver to any lender or purchaser
designated by Lessor such financial statements of Lessee as may be reasonably
required by such lender or purchaser. Such statements shall include the past
three (3) years' financial statements of Lessee. All such financial statements
shall be received by Lessor and such lender or purchaser in confidence and shall
be used only for the purposes herein set forth.

16. Lessor's Liability. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Industrial Center, and except as expressly
provided in paragraph 15, in the event of any transfer of such title or
interest, Lessor herein named (and in case of any subsequent transfers then the
grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership.

17. Severability. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.

18. Interest on Past-Due Obligations. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the maximum rate
then allowable by law from the date due. Payment of such interest shall not
excuse or cure any default by Lessee under this Lease; provided, however, that
interest shall not be payable on late charges incurred by Lessee nor on any
amount upon which late charges are paid by Lessee.

19. Time of Essence. Time is of the essence with respect to the obligations to
be performed under this Lease.

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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20. Additional Rent. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expenses and insurance and tax expenses payable shall be deemed to be rent.

21. Incorporation of Prior Agreement; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding permitting to any such matter
shall be effective, This lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents or any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Property and Lessee acknowledges that Lessee
assumes all responsibility regarding the Occupational Safety Health Act, the
legal use and adaptability of the Premises and the compliance thereof with all
applicable laws and regulations in effect during the term of this Lease except
as otherwise specifically stated in this Lease.

22. Notices. Any notice required or permitted to be given hereunder shall be in
writing and may he given by personal delivery or by certified mail, and if given
personally or by mail, shall be deemed sufficiently given if addressed to Lessee
or to Lessor at the address noted below the signature of the respective parties,
as the case may be. Either party may by notice to the other specify a different
address for notice purposes except that upon Lessee's taking possession of the
Premises, the Premises shall constitute Lessee's address for notice purposes. A
copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.

23. Waivers. No waiver by Lessor or any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.

24. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes.

25. Holding Over. See Paragraph 48.

26. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

27. Covenants and Conditions. Each provision of this Lease performable by Lessee
shall be deemed both a covenant and a condition.

28. Binding Effect; Choice of Law. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State of
Washington and any litigation concerning this Lease between the parties hereto
shall be initiated in Clark County, Washington.

29. Subordination.

        (a) This Lease, and any Option granted hereby, at Lessor's option, shall
be subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation or security now or hereafter placed upon the Industrial Center and
to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee, or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.

        (b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be, Lessee's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Lessee hereunder without
further notice to Lessee or, at Lessor's option, Lessor shall execute such
documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact and
in Lessee's name, place and stead, to execute such documents in accordance with
this paragraph 30(b).

30. Attorney's Fees. If either party or the broker(s) named herein bring an
action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any such action, on trial or appeal, shall be entitled to his
reasonable attorney's fees to be paid by the losing party as fixed by the court.
The provisions of this paragraph shall inure to the benefit of the broker named
herein who seek, to enforce a right hereunder,

31. Lessor's Access. Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times for the purpose of inspecting the same, showing
the same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are part as Lessor may deem necessity or desirable.
Lessor may at any time place on or about the Premises or the Building any
ordinary "For Sale" signs and Lessor may at any time during the last 240 days of
the term hereof place on or about the Premises any ordinary "For Lease" signs.
All activities of Lessor pursuant to this paragraph shall be without abatement
of rent, nor shall Lessor have any liability to Lessee for the game.

32. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard or reasonableness in determining whether to grant such
consent.

33. Signs. Lessee shall not place any sign upon the Premises or the Industrial
Center without Lessor's prior written consent. Under no circumstances shall
Lessee place a sign on any roof of the Industrial Center.

34. Merger. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.

35. Consents. Except for paragraph 33 hereof, wherever in this Lease the consent
of one party is required to an act of the other party such consent shall not be
unreasonably withheld or delayed.

36. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligation, as Lessee under this Lease.

37. Quiet Possession. Upon Lessee paying the rent for the Premises and observing
and performing all of the covenants, conditions and provisions on Lessee's part
to be observed and performed hereunder, Lessee shall have quiet possession of
the Premises for the entire term hereof subject to all of the provisions of this
Lease. The individuals executing this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Property.

38. Options.

     38.1 Definition. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Industrial Center or other property of
Lessor; (3) the right or option to purchase the Premises or the Industrial
Center, or the right of first refusal to purchase the Premises or the Industrial
Center, or the right of first offer to purchase the Premises or the Industrial
Center, or the right or option to purchase other property of Lessor, or the
right of first refusal to purchase other property of Lessor or the right of
first offer to purchase other property of Lessor.

     38.2 Options Personal. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while occupying the Premises who does so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee, provided, however, that an Option may be
exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of
this Lease. The Options, if any, herein granted to Lessee are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise.

     38.3 Multiple Options. In the event that Lessee has any multiple options to
extend or renew this Lease a later option cannot be exercised unless the prior
option to extend or renew this Lease has been so exercised.

     38.4 Effect of Default on Options.

        (a) Lessee shill have no right to exercise an Option, notwithstanding
say provision in the grant of Option to the contrary, (i) during the time
commencing from the date Lessor gives to Lessee a notice of default pursuant to
paragraph 13.1(b) or 13.1(c) and continuing until the noncompliance alleged in
said notice of default is cured, or (ii) during the period of time commencing on
the date after a monetary obligation to Lessor is due from Lessee and unpaid
(without any necessity for notice thereof to Lessee) and continuing until the
obligation is paid, or (iii) at any time after an event of default described in
paragraphs 13.1(a), 13.1(d), or 13.1(e) (without any necessity of Lessor to give
notice of such default to Lessee), or (iv) in the event that Lessor has given to
Lessee three or more notices of default under paragraph 13.1(b), or paragraph
13,1(c), whether or not the defaults are cured, during the 12-month period of
time immediately prior to the time that Lessee attempts to exercise the Subject
Option.

        (b) The period of rime within which an Option may be exercised shall not
be extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of paragraph 39.4(a).

        (c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of 30 day; alter such obligation becomes due (without any necessity
of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to commence to
cure a default specified in paragraph 13.1(c) within 30 days after the date that
Lessor gives notice to Lessee of such default and/or Lessee fails thereafter to
diligently prosecute said cure to completion, or (iii) Lessee commits a default
described in paragraph 13.l(a), 13.1(d), or 13.1(e) (without any necessity of
Lessor to give notice of such default to Lessee), or (iv) Lessor gives to Lessee
three or more notices of default under paragraph 13.1(b), or paragraph 13.1(c),
whether or not the defaults are cured.

39. Security Measures. Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Industrial Center. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option,
from providing security protection for the Industrial Center or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b).

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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40. Easements. Lessor reserves to itself the right, from time to time, to grant
such easements, rights and dedications that Lessor deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Leases.

41. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as voluntary payment, and there shall survive the right on the part of
said party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said party to pay such sum or
any part thereof, said party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.

42. Authority. If Lessee is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity. If Lessee is a corporation, trust or
partnership, Lessee shall, within 30 days after execution of this Lease, deliver
to Lessor evidence of such authority satisfactory to Lessor.

43. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.

44. Offer. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease. This Lease shall become
binding upon Lessor and Lessee only when fully executed by Lessor arid lessee.

45. Hazardous Materials. The Lessee, at its so1e cost and expense, shall comply
with all laws, ordinances, regulations, and standards regulating or controlling
hazardous wastes or hazardous substances, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. 9601, et seq., the Hazardous Material Transportation Act,
49 U.S.C. 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
69O1, et seq.; the Carpenter-Presley-Tanner Hazardous Substance Account Act,
Health and Safety Code section 25300, et seq.; the Underground Storage of
Hazardous Substance Act, Health and Safety section 25280, et seq.; the Safe
Drinking Water and Toxic Enforcement Act of 1986 (Health and Safety Code section
25249 et seq.); and the Hazardous Waste Control Law, Health and Safety Code
section 25100, et seq. (the `Environmental Laws"). The Lessee hereby indemnities
and, at all times, shall indemnify and hold harmless the Lessor, the Lessor's
trustees, directors, officers, employees, Investment manager(s), attorney;,
agents and any successors to the Lessor's interest in the chain of title to the
Property, their trustees, directors, officers, employees, and agents from and
against any and all claims, suits, demands, response costs, contribution costs,
liabilities, losses, or damages, directly or indirectly arising out of the
existence, use, generation, migration, storage, transportation, release,
threatened release, or disposal of Hazardous Materials (defined below) in, on,
or under the Property or in the groundwater under the Property and the migration
or transportation of hazardous materials to or from the Property or the
groundwater underlying the Property. This indemnity extends to the costs
incurred by the Lessor or its successors to reasonably repair, clean up, dispose
of, or remove such Hazardous Materials in order to comply with the Environmental
Laws, provided the Lessor gives the Lessee not less than thirty (30) days
advance written notice of its intention to incur such costs. The Lessees
obligations pursuant to the foregoing Indemnification and hold harmless
agreement shall survive the termination of this lease. The subtenants,
contractors, agents, or invitees of the Lessee shall not use, generate,
manufacture, store, transport, release, threaten release, or dispose of
Hazardous Materials in, on, or about the Property unless the Lessee shall have
received the Lessor's prior written consent therefore, which the Lessor may
withhold or revoke at any time in its reasonable discretion, and shall not cause
or permit the release or disposal of Hazardous Materials from the Property
except in compliance with applicable Environmental Laws. The Lessee shall not
permit any person, including its subtenants, contractors, agents, or invitees to
use, generate, manufacture, store, transport, release, threaten release, or
dispose of Hazardous Material, in, on, or about the Property or transport
Hazardous Materials from the Property unless the Lessee shall have received the
Lessor's prior written consent therefore, which the Lessor may withhold or
revoke at any time in its reasonable discretion and shall not cause or permit
the release or disposal of Hazardous Materials. The Lessee shall promptly
deliver written notice to the Lessor if it obtains knowledge sufficient to infer
that Hazardous Materials are located on the Property that are not in compliance
with applicable Environmental Laws or if any third party, including, without
limitation, any governmental agency, claims a significant disposal of Hazardous
Materials occurred on the Property or is being or has been released from the
Property, or any such party gives notice of its intention to declare the
Property to be Border Zone Property (as defined in section 25117.4 of the
California Health and Safety Code). Upon reasonable written request of the
Lessor, the Lessee, through its professional engineers and at its cost, shall
thoroughly investigate suspected Hazardous Materials contamination of the
Property. The Lessee, using duly licensed and insured contractors, shall
promptly commence and diligently complete the removal, repair, clean-up, and
detoxification of any Hazardous Materials from the Property as may be required
by applicable Environmental Laws.

         Notwithstanding anything to the contrary in this Lease, nothing herein
shall prevent the Lessee from using materials other than Hazardous Materials on
the Premises as would be used in the ordinary course of the Lessee's business as
contemplated by this Lease. The Lesser does not in the course of the Lessee's
current business use Hazardous Materials. If during the term of this Lease, the
Lessee contemplates utilizing such materials (or subleases/assigns this Lease to
a subtenant or assignee who utilizes Hazardous Materials), the Lessee shall
obtain prior written approval from the Lessor which approval shall not be
unreasonably withheld. The Lessor, at its option, and at the Lessees expense,
may cause an engineer selected by the Lessor, to review (a) the Lessee's
operations including materials used, generated, stored, disposed, and
manufactured in the Lessee's business and (b) the Lessees compliance with terms
of this paragraph. The Lessee shall provide the engineer with such information
reasonably requested by the engineer to complete the review. The first such
review may occur prior to or shortly following commencement of the term or this

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Ferndale Industrial Park - Standard Industrial Lease - Multi Tenant
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Lease. Thereafter, such review shall not occur more frequently than once each
year unless cause exists for some other review schedule. One-half (1/2) of the
fees and costs of the engineer shall be paid promptly by the Lessee to the
Lessor upon receipt of written notice of such fees and costs.

        "Hazardous Materials" means any hazardous waste or hazardous substance
as defined in any federal, stale, county, municipal, or local statute,
ordinance, rule, or regulation applicable to the Property, including, without
limitation, the Environmental Laws. "Hazardous Materials" shall also include
asbestos or asbestos-containing materials, radon gas, petroleum or petroleum
fractions, urea formaldehyde foam insulation, transformers containing levels of
polychlorinated biphenyls greater than 50 parts per million, and chemicals known
to cause cancer or reproductive toxicity, whether or not defined as a hazardous
waste or hazardous substance in any such statute, ordinance, rule, or
regulation.

46. Zoning Disclaimer. This agreement will not allow use of the Property
described in this agreement in violation of applicable land use laws and
regulations. Before signing or accepting this agreement, the person acquiring
lease-hold to the Property should check with the appropriate City or County
planning department to verify approved uses.

47. Holding Over, Lessee will, at the termination of this Lease by lapse of time
or otherwise, yield up immediate possession to Lessor. If Lessor agrees in
writing that Lessee may hold over after the expiration or termination of this
Lease, unless the parties hereto otherwise agree in writing on the terms of such
holding over, the hold over tenancy shall be subject to termination by Lessor at
any time upon not less than five (5) days, advance written notice, or by Lessee
as any time upon not less than thirty (30) days advance written notice, and all
of the other terms and provisions of this Lease shall be applicable during that
period, except that Lessee shall pay Lessor from time to time upon demand, as
rental for the period of any hold over, an amount equal to one and one-half
(1-1/2) the Base Rent in effect on the termination date, plus all additional
rental as defined herein, computed on a daily basis for each day of the hold
over period. No holding over by, whether with or without consent of Lessor,
shall operate to extend this Lease except as otherwise expressly provided. The
preceding provisions of this paragraph 47 shall not be construed as Lessor's
consent for Lessee to hold over.

48. Construction Requirements. Any work performed at the Building or on the
Premises by Lessee or Lessee's contractor in connection with improvements shall
be subject to the following additional requirements: (a) Such work shall not
proceed until Lessor has approved (which approval shall not be unreasonably
withheld or delayed) in wilting: 1) Lessee's contractor, 2) the amount and
coverage of public liability and property damage insurance, with Lessor named as
an additional insured, carried by Lessee's contractor, 3) complete and detailed
plans and specifications for such work, and 4) a schedule for the work. (b) All
work shall be done in conformity with a valid permit when required, a copy of
which shall be furnished to Lessor before such work is commenced. In any case,
all such work shall be performed in accordance with all applicable laws.
Notwithstanding any failure by Lessor to object to any such work, Lessor shall
have no responsibility for Lessee's failure to comply with applicable laws.

49. Option to Extend Term. If Lessee is not in default of Lease terms, then
Lessee shall have a one time option to extend the terms hereof for an additional
period of three (3) years which said option shall be exercised by giving written
notice to Landlord not less than one hundred eighty (180) days prior to the
termination of the original terms hereof. Upon the exercise of said option by
Lessee, the term of this Lease shall be extended for the additional period of
three (3) years upon all of the terms, covenants and conditions herein
contained; provided, however, that the monthly rental due and payable hereunder
shall be at the then prevailing market rates.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES. THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR
APPROVAL. THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.

Executed at Vancouver                        Executed at
                                                         -----------------------

On January 29, 2001                          on
                    --------------------        --------------------------------

LESSOR:  JH KELLY LLC                        LESSEE:  PROFILE TECHNOLOGIES INC.

By:                                          By:
   -------------------------------------        --------------------------------

Name Printed:                                Name Printed:
              --------------------------                  ----------------------

Title:  Vice President                       Title:
                       -----------------           -----------------------------