<PAGE>


                        LEASE AGREEMENT
          (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
THIS HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR REVIEW AND 
                    APPROVAL PRIOR TO SIGNING
   NO REPRESENTATION IS MADE BY LICENSEE AS TO ITS LEGAL SUFFICIENCY 
                        OR TAX CONSEQUENCES
CBA TEXT DISCLAIMER: TEXT DELETED BY LICENSEE INDICATED BY STRIKE. NEW TEXT 
        INSERTED BY LICENSEE INDICATED BY SMALL CAPITAL LETTERS.

THIS LEASE AGREEMENT ("the Lease") is entered into this 23RD day of APRIL,    
1997, between TOM KANE AND ELSA KANE ("Landlord"), and PACIFIC BIOMETRICS, 
INC. ("Tenant"). Landlord and Tenant agree as follows:

1.  LEASE SUMMARY.
   
    a.  LEASED PREMISES. The leased premises (the "Premises") consist of the 
    real property legally described on attached Exhibit A, and all 
    improvements thereon.

    b.  LEASE COMMENCEMENT DATE. The Lease shall commence on AUGUST 1, 1997, 
    or such earlier or later date as provided in Section 3 (the "Commencement 
    Date").

    c.  LEASE TERMINATION DATE. The Lease shall terminate at midnight on 
    JULY 31, 2007, or such earlier or later date as provided in Section 3 
    (the "Termination Date").

    d.  BASE RENT. The base monthly rent shall be (check one): / / $_____, or 
    /X/ according to the Rent Rider attached hereto. Rent shall be payable at 
    Landlord's address shown in Section 1(h) below, or such other place 
    designated in writing by Landlord.

    e.  PREPAID RENT. Upon execution of this Lease, Tenant shall deliver to 
    Landlord the sum of $19,550.05 as prepaid rent, to be applied to the Rent 
    due for the SECOND month(s) of the Lease.

    f.  SECURITY DEPOSIT. The amount of the security deposit is $100,000.00.

    g.  PERMITTED USE. The Premises shall be used only for GENERAL OFFICE AND 
    TESTING LABORATORY and for no other purpose without the prior written 
    consent of Landlord.

    h.  NOTICE AND PAYMENT ADDRESSES:

    Landlord:  610 WEST HIGHLAND DRIVE, SEATTLE, WA 98119 Fax No.:_____

    Tenant:  220 WEST HARRISON, SEATTLE, WA 98119 Fax  No.:_____

    i.  LEASE COMMISSION. Landlord shall pay a commission to COLLIER'S 
    MACAULAY NICOLLS INTERNATIONAL ("Landlord's Broker") in the amount stated 
    in a separate listing agreement or, if there is no listing agreement, 
    then (check one)

    / / $_____/_____ % (complete only one) of the gross rent payable pursuant 
    to Section 1(d) or

   / / $_____ per square foot of the Premises. The commission shall be 
    earned upon occupancy of the Premises by Tenant, and paid one-half upon 
    execution of this Lease and one-half upon occupancy of the Premises by 
    Tenant. Landlord's Agent shall pay to _____ ("Tenant's Broker") the 
    amount stated in a separate agreement between them or, if there is no 
    agreement, $_____/_____ % (complete only one) of the commission paid to 
    Landlord's Agent, within five (5) days after receipt by Landlord's Agent.

2.  PREMISES. Landlord leases to Tenant, and Tenant leases from Landlord the 
    Premises upon the terms specified in this Lease.

3.  TERM.

    a.  COMMENCEMENT DATE. The Lease shall commence on the date specified in 
    Section 1(b), or on such earlier or later date as may be specified by 
    written notice delivered by Landlord to Tenant advising Tenant that the 
    Premises are ready for possession and specifying the Commencement Date, 
    which shall not be less than _____ (30 if not completed) days following 
    the date of such notice. If Tenant occupies the Premises before the 
    Commencement Date specified in Section 1(b), then the Commencement Date 
    shall be the date of occupancy. If Landlord acts diligently to make the 
    Premises available to Tenant, neither Landlord nor any agent or employee 
    of Landlord shall be liable for any damage or loss due to Landlord's 
    inability or failure to deliver possession of the Premises to Tenant as 
    provided in this Lease EXCEPT IF SUCH FAILURE RESULTS FROM LANDLORD'S 
    NEGLIGENCE. The Termination Date shall be modified upon any change in the 
    Commencement Date so that the length of the Lease term is not changed. If 
    Landlord does not deliver possession of the Premises to Tenant within THIRTY
    (30) days (60 if not completed) after the date specified in Section 1(b),
    Tenant may elect to cancel this Lease by giving written notice to Landlord
    within 30 days after such time period ends. If Tenant gives such notice, the
    Lease shall be canceled, all prepaid rent and security deposits shall be
    refunded to tenant, and neither Landlord nor Tenant shall have any further
    obligations to the other. The first "Lease Year" shall commence on the 
    Commencement Date and shall end on the date which is twelve (12) months 
    from the end of the month in which the Commencement Date occurs. Each 
    successive Lease Year during the initial term and any

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                               LEASE AGREEMENT
                (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                 (CONTINUED)


    extension terms shall be twelve (12) months, commencing on the first day 
    following the end of the preceding Lease Year, except that the last Lease 
    Year shall end on the Termination Date.

    b. TENANT OBLIGATIONS. To the extent Tenant's tenant improvements are not 
    completed in time for the Tenant to occupy or take possession of the 
    Premises on the Commencement Date due to the failure of Tenant to fulfill 
    any of its obligations under this Lease, the Lease shall nevertheless 
    commence on the Commencement Date.

    Except as specified elsewhere in this Lease, Landlord makes no 
    representations or warranties to Tenant regarding the Premises, including 
    the structural condition of the Premises and the condition of all 
    mechanical, electrical, and other systems on the Premises. Except for any 
    tenant improvements described on attached Exhibit B to be completed by 
    Landlord (defined therein as "Landlord's Work"), Tenant shall be 
    responsible for performing any work necessary to bring the Premises into 
    condition satisfactory to Tenant. By signing this Lease, Tenant 
    acknowledges that it has had adequate opportunity to investigate the 
    Premises, acknowledges responsiblity for making any corrections, 
    alterations and repairs to the Premises (other than the Landlord's Work), 
    and acknowledges that the time needed to complete any such items shall not 
    delay the Commencement Date.

    Attached Exhibit B sets forth all Landlord's Work, if any, and all tenant 
    improvements to be completed by Tenant ("Tenant's Work"), which is to be 
    performed on the Premises. Responsibilities for design, payment and 
    performance of all such work shall be as set forth on attached Exhibit B. 
    If Tenant fails to notify Landlord of any defects in the Landlord's Work 
    within THIRTY (30) days of delivery of possession to Tenant, Tenant shall 
    be deemed to have accepted the Premises in their then condition. If Tenant 
    discovers any major defects in the Landlord's Work during this 30 day 
    period that would prevent Tenant from using the Premises for its intended 
    purpose, Tenant shall so notify Landlord in writing and the Commencement 
    Date shall be delayed until after Landlord has corrected the major defects 
    and Tenant has had five (5) days to inspect and approve the Premises after 
    Landlord's correction of such defects. The Commencement Date shall not be 
    delayed if Tenant's inspection reveals minor defects in the Landlord's 
    Work that will not prevent Tenant from using the Premises for their 
    intended purpose. Tenant shall prepare a punch list of all minor defects 
    and provide the punch list to Landlord. Landlord shall promptly correct 
    all punch list items.
    
4.  RENT.  Tenant shall pay Landlord without demand, deduction or offset, in 
    lawful money of the United States, the monthly rental stated in 
    Section 1(d) in advance on or before the first day of each month during 
    the Lease Term, and any other additional payments due to Landlord 
    (collectively the "Rent") when required under this Lease. Payments for 
    any partial month at the beginning or end of the Lease term shall be 
    prorated.

    If any sums payable by Tenant to Landlord under this Lease are not 
    received by the TENTH (10TH) day of each month, Tenant shall pay Landlord 
    in addition to the amount due, for the cost of collecting and handling 
    such late payment, an amount equal to the greater of $100 or five percent 
    (5%) of the delinquent amount. In addition, all delinquent sums payable 
    by Tenant to Landlord and not paid within TEN (10) days of the due date 
    shall, at Landlord's option, bear interest at the rate of twelve percent 
    (12%) per annum, or the highest rate of interest allowable by law, 
    whichever is less. Interest on all delinquent amounts shall be calculated 
    from the original due date to the date of payment.

    Landlord's acceptance of less than the full amount of any payment due 
    from Tenant shall not be deemed an accord and satisfaction or compromise 
    of such payment unless Landlord specifically consents in writing to 
    payment of such lesser sum as an accord and satisfaction or compromise of 
    the amount which Landlord claims.

5.  SECURITY DEPOSIT.  UPON EXECUTION OF THE LEASE, TENANT SHALL DEPOSIT INTO 
    AN INTEREST BEARING SECURITY DEPOSIT ACCOUNT AS SPECIFIED IN SECTION 1(F) 
    ABOVE. If Tenant breaches any covenant or condition of this Lease, 
    including but not limited to the payment of Rent, Landlord may apply all 
    or any part of the PRINCIPAL OF THE security deposit to the payment of 
    any sum in default and any damage suffered by Landlord as a result of 
    Tenant's breach. In such event, Tenant shall, within five (5) days after 
    written demand therefor by Landlord, deposit with Landlord the amount so 
    applied. Any payment to Landlord from the security deposit shall not be 
    construed as a payment of liquidated damages for any default. If Tenant 
    complies with all of the covenants and conditions of this Lease 
    throughout the SEVENTH (7TH) YEAR OF THIS Lease term, the security 
    deposit shall be repaid to Tenant with interest within 30 days.

6.  USES.  The Premises shall be used only for the use(s) specified in 
    Section 1(g) above (the "Permitted Use"), and for no other business or 
    purpose without the prior written consent of Landlord. No act shall be 
    done on or around the Premises that is unlawful or that will increase the 
    existing rate of insurance on the Premises. Tenant shall not commit or 
    allow to be committed any waste upon the Premises, or any public or 
    private nuisance.

<PAGE>

                               LEASE AGREEMENT
                (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                 (CONTINUED)

7.  COMPLIANCE WITH LAWS.  Tenant shall not cause or permit the Premises to 
    be used in any way which violates any law, ordinance, or governmental 
    regulation or order. Landlord represents to Tenant that, to the best of 
    Landlord's knowledge, with the exception of any Tenant's Work, as of the 
    Commencement Date, the Premises comply with all applicable laws, rules, 
    regulations, or orders, including without limitation, the Americans With 
    Disabilities Act, if applicable, and Landlord shall be responsible to 
    promptly cure any noncompliance which existed on the Commencement Date. 
    Tenant shall be responsible for complying with all laws applicable to the 
    Premises as a result of Tenant's particular use, such as modifications 
    required by the Americans With Disabilities Act as a result of Tenant 
    opening the Premises to the public as a place of public accommodation. If 
    the enactment or enforcement of any law, ordinance, regulation or code 
    during the Lease term requires any changes to the Premises during the 
    Lease term, the Tenant shall perform all such changes at its expense if 
    the changes are required due to the nature of Tenant's activities at the 
    Premises, or to alterations that Tenant seeks to make to the Premises; 
    otherwise, Landlord shall perform all such changes at its expense.

8.  UTILITIES.  Landlord shall not be responsible for providing any utilities 
    to the Premises, but represents and warrants to Tenant that as of the 
    Commencement Date electricity, water, sewer, and telephone utilities are 
    available to the Premises. Tenant shall determine whether the
    available capacity of such utilities will meet Tenant's needs. Tenant shall
    install and connect, if necessary, and directly pay for all water, sewer, 
    gas, janitorial, electricity, garbage removal, heat, telephone, and other 
    utilities and services used by Tenant on the Premises during the Term, SO 
    LONG AS such services are billed directly to Tenant.

9.  TAXES.  Tenant shall pay all Taxes (defined below) applicable to the 
    Premises during the Lease term. All payments for Taxes shall be made at 
    least ten (10) days prior to their due date. Tenant shall promptly furnish
    Landlord with satisfactory evidence that Taxes have been paid. If any Taxes
    paid by Tenant cover any period of time before or after the expiration of 
    the Term, Tenant's share of those Taxes will be prorated to cover only the
    period of time within the tax fiscal year during which this Lease was in 
    effect, and Landlord shall promptly reimburse Tenant to the extent required.
    If Tenant fails to timely pay any Taxes, Landlord may pay them, and Tenant 
    shall repay such amount to Landlord with Tenant's next rent installment.

    The term "Taxes" shall mean: (i) any form of real estate tax or 
    assessment imposed on the Premises by any authority, including any city,
    state or federal government, or any improvement district, as against any 
    legal or equitable interest of Landlord or Tenant in the Premises or in the 
    real property of which the Premises are a part, or against rent paid for 
    leasing the Premises; and (ii) any form of personal property tax or 
    assessment imposed on any personal property, fixtures, furniture, tenant 
    improvements, equipment, inventory, or other items, and all replacements, 
    improvements, and additions to them, located on the Premises, whether owned
    by Landlord or Tenant. "Taxes" shall exclude any net income tax imposed on
    Landlord for income that Landlord receives under this Lease.

    Tenant may contest the amount or validity, in whole or in part, of any 
    Taxes at its sole expense, only after paying such Taxes or posting such 
    security as Landlord may reasonably require in order to protect the Premises
    against loss or forfeiture. Upon the termination of any such proceedings, 
    Tenant shall pay the amount of such Taxes or part of such Taxes as finally 
    determined, together with any costs, fees, interest penalties, or other 
    related liabilities. Landlord shall cooperate with Tenant in contesting any
    Taxes, provided Landlord incurs no expense or liability in doing so.

10. ALTERATIONS.  Tenant may make alterations, additions or improvements to 
    the Premises, including any Tenant's Work identified on attached Exhibit B
    ("Alterations"), with the prior written consent of Landlord WHICH CONSENT 
    WILL NOT BE UNREASONABLY WITHHELD OR DELAYED. The term "Alterations" shall
    not include the installation of shelves, movable partitions, Tenant's 
    equipment, and trade fixtures which may be performed without damaging 
    existing improvements or the structural integrity of the Premises, and 
    Landlord's consent shall not be required for Tenant's installation of those
    items. Tenant shall complete all Alterations at Tenant's expense in 
    compliance with all applicable laws and in accordance with plans and 
    specifications approved by Landlord, and using contractors approved by 
    Landlord. Landlord shall be deemed the owner of all Alterations except for
    those which Landlord requires to be removed at the end of the Lease term.
    Tenant shall remove all Alterations at the end of the Lease term unless 
    Landlord conditioned its consent upon Tenant leaving a specified 
    Alteration at the Premises, in which case Tenant shall not remove such
    Alteration. Tenant shall immediately repair any damage to the Premises
    caused by removal of Alterations.

<PAGE>

                              LEASE AGREEMENT
                (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                (CONTINUED)

11.  REPAIRS AND MAINTENANCE.  Tenant shall, at its sole expense, maintain the
     Premises in good condition and promptly make all NON-STRUCTURAL repairs
     and replacements, necessary to keep the Premises in safe operating 
     condition, but excluding the roof, foundation and exterior walls, which
     Landlord shall maintain in good condition and repair at Landlord's 
     expense. Tenant shall not damage any demising wall or disturb the 
     structural integrity of the Premises and shall promptly repair any damage
     or injury done to any such demising walls or structural elements caused
     by Tenant or its employees, agents, contractors, or invitees. 
     Notwithstanding anything in this Section to the contrary, Tenant shall 
     not be responsible for any repairs to the Premises made necessary by the
     acts of Landlord or its agents, employees, contractors or invitees 
     therein.

     Upon expiration of the Lease term, whether by lapse of time or otherwise,
     Tenant shall promptly and peacefully surrender the Premises, together 
     with all keys, to Landlord in as good condition as when received by 
     Tenant from Landlord or as thereafter improved, reasonable wear and tear
     and insured casualty excepted.

12.  ACCESS.  After reasonable notice from Landlord (except in cases of
     emergency, where no notice is required), Tenant shall permit Landlord and
     its agents and employees to enter the Premises at all reasonable times
     for the purposes of repair or inspection. This Section shall not impose
     any repair or other obligation upon Landlord not expressly stated
     elsewhere in this Lease. After reasonable notice to Tenant, Landlord
     shall have the right to enter the Premises for the purpose of showing
     the Premises to prospective purchasers or lenders at any time, and to
     prospective tenants within 180 days prior to the expiration or sooner
     termination of the Lease term.

     NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS LEASE; LANDLORD 
     RECOGNIZES THE WORK TO BE PERFORMED BY TENANT IS CONFIDENTIAL AND
     PROPRIETARY, AND LANDLORD WILL USE ITS BEST EFFORTS TO ENTER THE 
     PREMISES, OR ALLOW ITS AGENTS AND EMPLOYEES TO ENTER THE PREMISES,
     ONLY WHEN ACCOMPANIED BY AN ESCORT PROVIDED BY TENANT. LANDLORD WILL
     BE LIABLE TO TENANT FOR ANY DAMAGE RESULTING FROM LANDLORD'S
     VIOLATION OF THIS SECTION 12.

13.  SIGNAGE.  Tenant shall obtain Landlord's written consent before 
     installing any signs upon the Premises WHICH CONSENT WILL NOT BE
     UNREASONABLY WITHHELD OR DELAYED. Tenant shall install any approved
     signage at Tenant's sole expense and in compliance with all applicable
     laws. Tenant shall not damage or deface the Premises in installing or
     removing signage and shall repair any injury or damage to the Premises
     caused by such installation or removal.

14.  DESTRUCTION OR CONDEMNATION.

     a.  DAMAGE AND REPAIR. If the Premises are partially damaged but not
         rendered untenantable, by fire or other insured casualty, then
         Landlord shall diligently restore the Premises and this Lease shall
         not terminate. The Premises shall not be deemed untenantable if
         less than twenty-five percent (25%) of the Premises are damaged.
         If insurance proceeds are available to Landlord but are not
         sufficient to pay the entire cost of restoring the Premises, then
         Landlord may elect to terminate this Lease and keep the insurance
         proceeds, by notifying Tenant within sixty (60) days of the date of
         such casualty. LANDLORD WILL, HOWEVER, CARRY "FULL REPLACEMENT COST"
         INSURANCE.

     If the Premises are entirely destroyed, or partially damaged and rendered
     TOTALLY untenantable, by fire or other casualty, Landlord may, at its
     option: (a) terminate this Lease as provided herein, or (b) restore the
     Premises to their previous condition. If, within 60 days after receipt by
     Landlord from Tenant of written notice that Tenant REASONABLY deems the
     Premises untenantable, Landlord fails to notify Tenant of its election to
     restore the Premises, or if Landlord is unable to restore the Premises
     within six (6) months of the date of the casualty event, then Tenant may
     elect to terminate the Lease.

     If Landlord restores the Premises under this Section 14(a), Landlord 
     shall proceed with reasonable diligence to complete the work, and the 
     base monthly rent shall be abated in the same proportion as the 
     untenantable portion of the Premises bears to the whole Premises, 
     provided that there shall be a rent abatement only if the damage or 
     destruction of the Premises did not result from, the neglect of Tenant, 
     or Tenant's officers, contractors, licensees, agents, servants, 
     employees, guests, OR invitees. Provided, Landlord complies with its 
     obligations under this Section, no damages, compensation or claim shall 
     be payable by Landlord for inconvenience, loss of business or annoyance 
     directly, incidentally or consequentially arising from any repair or 
     restoration of any portion of the Premises. Landlord will not carry 
     insurance of any kind for the protection of Tenant or any improvements 
     paid for by Tenant or as provided in Exhibit B or on Tenant's furniture 
     or on any fixtures, equipment, improvements or appurtenances of Tenant 
     under this Lease, and Landlord shall not be obligated to repair any 
     damage thereto or replace the same unless the damage is caused by 
     Landlord's negligence.

<PAGE>

                              LEASE AGREEMENT
              (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                (CONTINUED)


     b.  If the Premises are made untenantable by eminent domain, or conveyed
     under a threat of condemnation, this Lease shall automatically terminate
     as of the earlier of the date title vests in the condemning authority or
     the condemning authority first has possession of the Premises and all 
     Rents and other payments shall be paid to that date. In case of taking of
     a part of the Premises that does not render the Premises untenantable, 
     then this Lease shall continue in full force and effect and the base 
     monthly rental shall be equitably reduced based on the proportion by 
     which the floor area of any structures is reduced, such reduction in Rent
     to be effective as of the earlier of the date the condemning authority
     first has possession of such portion or title vests in the condemning
     authority. Landlord shall be entitled to the entire award from the 
     condemning authority attributable to the value of the Premises and Tenant
     shall make no claim for the value of its leasehold. Tenant shall be
     permitted to make a separate claim against the condemning authority for
     moving expenses or damages resulting from interruption in its business,
     provided that in no event shall Tenant's claim reduce Landlord's award.

15.  INSURANCE.

     a.  LIABILITY INSURANCE. During the Lease term, Tenant shall pay for and
     maintain commercial general liability insurance with broad form property
     damage and contractual liability endorsements. This policy shall name
     Landlord as an additional insured, and shall insure Tenant's activities
     and those of Tenant's employees, officers, contractors, licenses, agents,
     servants, employees, guests, invitees or visitors with respect to the
     Premises against loss, damage or liability for personal injury or death
     or loss or damage to property with a combined single limit of not less
     than $1,000,000, and a deductible of not more than $5,000. The insurance
     will be noncontributory with any liability insurance carried by Landlord.

     b.  CASUALTY INSURANCE. During the Lease term, Tenant shall pay for and
     maintain all-risk coverage casualty insurance for the Premises, in an
     amount sufficient to prevent Landlord or Tenant from becoming a 
     co-insurer under the terms of the policy, and in an amount not less than
     the replacement cost of the Premises, with a deductible of not more than
     $5,000. The casualty insurance policy shall name Tenant as the insured 
     and Landlord and Landlord's lender(s) as additional insureds, with loss
     payable to Landlord, Landlord's lender(s), and Tenant as their interests
     may appear. In the event of a casualty loss on the Premises, Landlord may
     apply insurance proceeds under the casualty insurance policy in the
     manner described in Section 14(a).

     c.  MISCELLANEOUS. Insurance required under this Section shall be with
     companies rated A-XV or better in Best's Insurance Guide, and which are
     authorized to transact business in the State of Washington. No insurance
     policy shall be canceled or reduced in coverage and each such policy 
     shall provide that it is not subject to cancellation or a reduction in
     coverage except after thirty (30) days prior written notice to Landlord.
     Tenant shall deliver to Landlord upon commencement of the Lease and from
     time to time thereafter, copies or certificates of the insurance policies
     required by this Section. In no event shall the limit of such policies
     be considered as limiting the liability of Tenant under this Lease.

     d.  WAIVER OF SUBROGATION. Landlord and Tenant hereby release each other
     and any other tenant, their agents or employees, from responsibility for,
     and waive their entire claim of recovery for any loss or damage arising
     from any cause covered by insurance required to be carried by each of 
     them. Each party shall provide notice to the insurance carrier or
     carriers of this mutual waiver of subrogation, and shall cause its
     respective insurance carriers to waive all rights of subrogation against
     the other. This waiver shall not apply to the extent of the deductible
     amounts to any such policies or to the extent of liabilities exceeding
     the limits of such policies.

16.  INDEMNIFICATION.  Tenant shall defend, indemnify, and hold Landlord 
     harmless against all liabilities, damages, costs, and expenses, including
     attorneys' fees, arising from any negligent or wrongful act or omission
     of Tenant or Tenant's officers, contractors, licensees, agents, servants,
     employees, guests, OR invitees on or around the Premises as a result of 
     any act, omission or negligence of Tenant, or Tenant's officers, 
     contractors, licensees, agents, servants, employees, guests, invitees, or
     visitors, or arising from any breach of this Lease by Tenant. Tenant 
     shall use legal counsel acceptable to Landlord in defense of any action
     within Tenant's defense obligation. Landlord shall defend, indemnify and
     hold Tenant harmless against all liabilities, damages, costs, and 
     expenses, including attorneys' fees, arising from any negligent or
     wrongful act or omission of Landlord or Landlord's officers, contractors,
     licensees, agents, servants, employees, guests, invitees, or visitors on
     or around the Premises or arising from any breach of this Lease by
     Landlord. Landlord shall use legal counsel acceptable to Tenant in
     defense of any action within Landlord's defense obligation.

17.  ASSIGNMENT AND SUBLETTING.  Tenant shall not assign, sublet, mortgage,
     encumber or otherwise transfer any interest in this Lease (collectively
     referred to as a "Transfer") or any part of the Premises, without first
     obtaining Landlord's written consent which shall not be unreasonably
     withheld or delayed. No Transfer shall relieve Tenant of

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                             LEASE AGREEMENT
            (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                              (CONTINUED)

    any liability under this Lease notwithstanding Landlord's consent to 
    such transfer. Consent to any Transfer shall not operate as a waiver of 
    the necessity for Landlord's consent to any subsequent Transfer.

    If Tenant is a partnership, limited liability company, corporation, or 
    other entity, any transfer of this Lease by merger, consolidation, 
    redemption or liquidation, or any change(s) in the ownership of, or power 
    to vote, which singularly or collectively represents a majority of the 
    beneficial interest in Tenant, shall constitute a Transfer under this 
    Section.

    As a condition to Landlord's approval, if given, any potential assignee 
    or sublessee otherwise approved by Landlord shall assume all obligations 
    of Tenant under this Lease and shall be jointly and severally liable with 
    Tenant and any guarantor, if required, for the Payment of Rent and 
    performance of all terms of this Lease. In connection with any Transfer, 
    Tenant shall provide Landlord with copies of all assignments, subleases 
    and assumption instruments.

    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS LEASE; IF TENANT IS A 
    PUBLICLY OWNED COMPANY, TRANSFERS OF STOCK IN TENANT IN ANY AMOUNT WILL 
    BE PERMITTED WITHOUT LANDLORD'S CONSENT.

18. LIENS. Tenant shall keep the Premises free from any liens created by or 
    through Tenant. Tenant shall indemnify and hold Landlord harmless from 
    liability from any such liens including, without limitation, liens 
    arising from any Alterations. If a lien is filed against the Premises by 
    any person claiming by, through or under Tenant, Tenant shall, upon 
    request of Landlord, at Tenant's expense, immediately furnish to Landlord 
    a bond in form and amount and issued by a surety satisfactory to 
    Landlord, indemnifying Landlord and the Premises against all liabilities, 
    costs and expenses, including attorneys' fees, which Landlord could 
    reasonably incur as a result of such lien(s).

19. DEFAULT. The following occurrences shall each be deemed an Event of 
    Default by Tenant.

    a. FAILURE TO PAY. Tenant fails to pay any sum, including Rent, due under 
    this Lease following THREE (3) days written notice from Landlord of the 
    failure to pay.

    c. INSOLVENCY. Tenant becomes insolvent, voluntarily or involuntarily 
    bankrupt, or a receiver, assignee or other liquidating officer is 
    appointed for Tenant's business, provided that in the event of any 
    involuntary bankruptcy or other insolvency proceeding, the existence of 
    such proceeding such constitute an Event of Default only if such 
    proceeding is not dismissed or vacated within 60 days after its 
    institution or commencement.

    d. LEVY OR EXECUTION. Tenant's interest in this Lease or the Premises, or 
    any part thereof, is taken by execution or other process of law directed 
    against Tenant, or is taken upon or subjected to any attachment by any 
    creditor of Tenant, if such attachment is not discharged within 15 days 
    after being levied.

    e. OTHER NON-MONETARY DEFAULTS. Tenant breaches any agreement, term or 
    covenant of this Lease other than one requiring the payment of money and 
    not otherwise enumerated in this Section, and the breach continues for a 
    period of 10 days after the notice by Landlord to Tenant of the breach.

    G. NOTWITHSTANDING ANYTHING IN THE LEASE TO CONTRARY, IF ANY BREACH 
    OF THIS LEASE BY TENANT CANNOT REASONABLY BE CURED WITHIN THIRTY (30) 
    DAYS, SUCH BREACH WILL NOT BE AN EVENT OF DEFAULT UNDER THIS LEASE SO 
    LONG AS TENANT COMMENCES TO CURE THE BREACH WITHIN THE THIRTY (30) DAY 
    PERIOD AND DILIGENTLY PURSUES TO CURE THE BREACH WITHIN A REASONABLE 
    PERIOD OF TIME.

20. REMEDIES.

    Landlord shall have the following remedies upon an Event of Default. 
    Landlord's rights and remedies under this Lease shall be cumulative, and 
    none shall exclude any other right or remedy allowed by law.

    a. TERMINATION OF LEASE. Landlord may terminate Tenant's interest under 
    the Lease, but no act by Landlord other than written notice from Landlord 
    to Tenant of termination shall terminate this Lease. The Lease shall 
    terminate on the date specified in the notice of termination. Upon 
    termination of this Lease, Tenant will remain liable to Landlord for 
    damages in an amount equal to the rent and other sums that would have 
    been owing by Tenant under this Lease for the balance of the Lease term, 
    less the net proceeds, if any, of any reletting of the Premises by 
    Landlord subsequent to the termination, after deducting all Landlord's 
    Reletting Expenses (as defined below). Landlord shall be entitled to 
    either collect damages from Tenant monthly on the days on which rent or 
    other amounts would have been payable under the Lease, or alternatively, 
    Landlord may accelerate Tenant's obligations under the Lease and recover 
    from Tenant; (i) unpaid rent which had been earned at the time of 
    termination; (ii) the amount by which the unpaid rent which would

<PAGE>

                               LEASE AGREEMENT
                   (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                 (CONTINUED)


have been earned after termination until the time of award exceeds the amount 
of rent loss that Tenant proves could reasonably have been avoided; (iii) the 
amount by which the unpaid rent for the balance of the term of the Lease 
after the time of award exceeds the amount of rent loss that Tenant proves 
could reasonably be avoided (discounting such amount by the discount rate of 
the Federal Reserve Bank of San Francisco at the time of the award, plus 1%); 
and (iv) any other amount necessary to compensate Landlord for all the 
detriment proximately caused by Tenant's failure to perform its obligations 
under the Lease, or which in the ordinary course would be likely to result 
from the Event of Default, including without limitation Reletting Expenses 
described in Section 20b.

b.  RE-ENTRY AND RELETTING. Landlord may continue this Lease in full force 
and effect, and without demand or notice, re-enter and take possession of 
the Premises or any part thereof, expel the Tenant from the Premises and 
anyone claiming through or under the Tenant, and remove the personal property 
of either. Landlord may relet the Premises, or any part of them, in 
Landlord's or Tenant's name for the account of Tenant, for such period of 
time and at such other terms and conditions, as Landlord, in its discretion 
may determine. Landlord may collect and receive the rents for the Premises.  
Re-entry or taking possession of the Premises by Landlord under this Section 
shall not be construed as an election on Landlord's part to terminate this 
Lease, unless a written notice of termination is given to Tenant.  Landlord 
reserves the right following any re-entry or reletting, or both, under this 
Section to exercise its right to terminate the Lease.  During the Event of 
Default, Tenant will pay Landlord the rent and other sums which would be 
payable under this Lease if repossession had not occurred, LESS the net 
proceeds, if any, after reletting the Premises, after deducting Landlord's 
Reletting Expenses. "Reletting Expenses" is defined to include all expenses 
incurred by Landlord in connection with reletting the Premises, including 
without limitation, all repossession costs, brokerage commissions, attorneys' 
fees, remodeling and repair costs, costs for removing and storing Tenant's 
property and equipment, and rent concessions granted by Landlord to any new 
Tenant, prorated over the life of the new lease.

c.  WAIVER OF REDEMPTION RIGHTS. Tenant, for itself, and on behalf of any 
and all persons claiming through or under Tenant, including creditors of all 
kinds, hereby waives and surrenders all rights and privileges which they may 
have under any present or future law, to redeem the Premises or to have a 
continuance of this Lease for the Lease term, as it may have been extended.

d.  NONPAYMENT OF ADDITIONAL RENT. All costs which Tenant agrees to pay to 
Landlord pursuant to this Lease shall in the event of nonpayment be treated 
as if they were payments of Rent, and Landlord shall have all the rights 
herein provided for in case of nonpayment of Rent.

e.  FAILURE TO REMOVE PROPERTY.  If Tenant fails to remove any of its 
property from the Premises at Landlord's request following an uncured Event 
of Default, Landlord may, at its option, remove and store the property at 
Tenant's expense and risk.  If Tenant does not pay the storage cost within 
five (5) days of Landlord's request, Landlord may, at its option, have any or 
all of such property sold at public or private sale (and Landlord may become 
a purchaser at such sale), in such manner as Landlord deems proper, without 
notice to Tenant.  Landlord shall apply the proceeds of such sale: (i) to the 
expense of such sale, including reasonable attorneys' fees actually incurred; 
(ii) to the payment of the costs or charges for storing such property; 
(iii) to the payment of any other sums of money which may then be or 
thereafter become due Landlord from Tenant under any of the terms hereof; and 
(iv) the balance, if any, to Tenant.  Nothing in this Section shall limit 
Landlord's right to sell Tenant's personal property as permitted by law to 
foreclose Landlord's lien for unpaid rent.

F.  LANDLORD DEFAULT. LANDLORD WILL BE IN DEFAULT UNDER THIS LEASE IF 
LANDLORD FAILS TO PERFORM OR OBSERVE ANY OBLIGATION OF LANDLORD UNDER THIS 
LEASE IF THE FAILURE IS NOT CURED WITHIN THIRTY (30) DAYS AFTER WRITTEN 
NOTICE HAS BEEN GIVEN BY TENANT TO LANDLORD. IF THE DEFAULT CANNOT BE 
REASONABLY BE CURED WITHIN THIRTY (30) DAYS, LANDLORD WILL NOT BE IN DEFAULT 
IF LANDLORD COMMENCES TO CURE THE DEFAULT WITHIN THE THIRTY (30) DAY PERIOD 
AND DILIGENTLY PURSUES TO CURE THE DEFAULT WITHIN A REASONABLE PERIOD OF 
TIME. IF, HOWEVER, THE NATURE OF THE DEFAULT ADVERSELY IMPACTS TENANT'S 
ABILITY TO CONDUCT THEIR BUSINESS, THEN CURE PERIOD SHOULD BE NO MORE THAN 
FIVE (5) WORKING DAYS AFTER TENANT'S NOTICE. IF LANDLORD IS IN DEFAULT UNDER 
THIS LEASE, TENANT MAY (A) CURE LANDLORD'S DEFAULT AND OFFSET RENT PAYMENTS 
UNTIL TENANT HAS RECOVERED THE COST OF SUCH CURE OF (B) TERMINATE THIS LEASE, 
IN WHICH CASE THIS LEASE SHALL BE OF NO FURTHER FORCE OR EFFECT AND NEITHER 
PARTY SHALL HAVE ANY FURTHER OBLIGATION TO THE OTHER.

21.  MORTGAGE SUBORDINATION AND ATTORNMENT. This Lease shall automatically be 
subordinate to any mortgage or deed of trust created by Landlord which is 
now existing or hereafter placed upon the Premises including any advances, 
interest, modifications, renewals, replacements or extensions ("Landlord's 
Mortgage"), provided the holder of any Landlord's Mortgage or any person(s) 
acquiring the Premises at any sale or other proceeding under any such 
Landlord's Mortgage shall elect to continue this Lease in full force and 
effect. Tenant shall attorn to the holder of any Landlord's Mortgage or any 
person(s) acquiring the Premises at any sale or other proceeding under any 
Landlord's Mortgage provided such person(s) assume the obligations of 
Landlord under this Lease. Tenant shall promptly and in 

<PAGE>

                                LEASE AGREEMENT
                 (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                  (CONTINUED)

    no event later than fifteen (15) days execute, acknowledge and deliver 
    documents which the holder of any Landlord's Mortgage may reasonably 
    require as further evidence of this subordination and attornment. 
    Notwithstanding the foregoing, Tenant's obligations under this Section 
    are conditioned on the holder of each of Landlord's Mortgage and each 
    person acquiring the Premises at any sale or other proceeding under any 
    such Landlord's Mortgage not disturbing Tenant's occupancy and other 
    rights under this Lease, so long as no uncured Event of Default exists.

22. NON-WAIVER.  Landlord's waiver of any breach of any term contained in 
    this Lease shall not be deemed to be a waiver of the same term for 
    subsequent acts of Tenant. The acceptance by Landlord of Rent or other 
    amounts due by Tenant hereunder shall not be deemed to be a waiver of any 
    breach by Tenant preceding such acceptance.

23. HOLDOVER.  If Tenant shall, without the written consent of Landlord, 
    hold over after the expiration or termination of the Term, such tenancy 
    shall be deemed to be on a month-to-month basis and may be terminated 
    according to Washington law. During such tenancy, Tenant agrees to pay to 
    Landlord 125% the rate of rental last payable under this Lease, unless 
    a different rate is agreed upon by Landlord. All other terms of the Lease 
    shall remain in effect.

24. NOTICES.  All notices under this Lease shall be in writing and 
    effective (i) when delivered in person, (ii) three (3) days after being 
    sent by registered or certified mail to Landlord or Tenant, as the case 
    may be, at the Notice Addresses set forth in Section 1(h); or (iii) upon 
    confirmed transmission by facsimile to such persons at the facsimile 
    numbers set forth in Section 1(h) or such other addresses/facsimile 
    numbers as may from time to time be designated by such parties in writing.

25. COSTS AND ATTORNEYS' FEES.  If Tenant or Landlord engage the services 
    of an attorney to collect monies due or to bring any action for any 
    relief against the other, declaratory or otherwise, arising out of this 
    Lease, including any suit by Landlord for the recovery of Rent or other 
    payments, or possession of the Premises, the losing party shall pay the 
    prevailing party a reasonable sum for attorneys' fees in such suit, at 
    trial and on appeal.

26. ESTOPPEL CERTIFICATES.  Tenant shall, from time to time, upon written 
    request of Landlord, execute, acknowledge and deliver to Landlord or its 
    designee a written statement specifying  the following, subject to any 
    modifications OR ADDITIONS necessary to make such statements true and 
    complete: (i) the date the Lease term commenced and the date it expires; 
    (ii) the amount of minimum monthly Rent and the date to which such Rent 
    has been paid; (iii) that this Lease is in full force and effect and has 
    not been assigned, modified, supplemented or amended in any way; (iv) that 
    this Lease represents the entire agreement between the parties; (v) that 
    all conditions under this Lease to be performed by Landlord have been 
    satisfied; (vi) that there are no existing claims, defenses or offsets 
    which the Tenant has against the enforcement of this Lease by Landlord; 
    (vii) that no Rent has been paid more than one month in advance; and 
    (viii) that no security has been deposited with Landlord (or, if so, the 
    amount thereof). Any such statement delivered pursuant to this Section may 
    be relied upon by a prospective purchaser of Landlord's interest or 
    assignee of any mortgage or new mortgagee of Landlord's interest in the 
    Premises. If Tenant shall fail to respond within ten (10) days of receipt 
    by Tenant of a written request by Landlord as herein provided, Tenant 
    shall be deemed to have given such certificate as above provided without 
    modification and shall be deemed to have admitted the accuracy of any 
    information supplied by Landlord to a prospective purchaser or mortgagee.

27. TRANSFER OF LANDLORD'S INTEREST. This Lease shall be assignable by 
    Landlord without the consent of Tenant. In the event of any transfer or 
    transfers of Landlord's interest in the Premises, other than a transfer 
    for security purposes only, upon the assumption of this Lease by the 
    transferee, Landlord shall be automatically relieved of obligations and 
    liabilities accruing from and after the date of such transfer, except 
    for any retained security deposit or prepaid rent, and Tenant shall 
    attorn to the transferee.

28. RIGHT TO PERFORM.  If Tenant shall fail to timely pay any sum or 
    perform any other act on its part to be performed hereunder, Landlord may 
    make any such payment or perform any such other act on Tenant's part to 
    be made or performed as provided in this Lease. Tenant shall, on demand, 
    reimburse Landlord for its expenses incurred in making such payment or 
    performance. Landlord shall (in addition to any other right or remedy of 
    Landlord provided by law) have the same rights and remedies in the event 
    of the nonpayment of sums due under this Section as in the case of 
    default by Tenant in the payment of Rent.

29. HAZARDOUS MATERIAL.  Landlord represents and warrants to Tenant that 
    to the best of Landlord's knowledge, there is no "Hazardous Material" (as 
    defined below) on, in, or under the Premises as of the Commencement Date 
    except as otherwise disclosed to Tenant in writing before the execution 
    of this Lease. LANDLORD DISCLOSES THAT THERE ARE CERTAIN AREAS OF THE 
    BUILDING WHICH CONTAIN ASBESTOS. - If there is any Hazardous Material on, 
    in, or under the Premises as of the Commencement Date which has been or 
    thereafter becomes unlawfully released through no fault of Tenant, then 
    Landlord shall indemnify, defend and hold Tenant harmless from any and 
    all claims, judgments, damages,

<PAGE>

                                LEASE AGREEMENT
                 (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                  (CONTINUED)

    penalties, fines, costs, liabilities or losses including without 
    limitation sums paid in settlement of claims, attorneys' fees, consultant 
    fees and expert fees, incurred or suffered by Tenant either during or 
    after the Lease term as the result of such contamination.
    
    Tenant shall not cause or permit any Hazardous Material to be brought 
    upon, kept, or used in or about, or disposed of on the Premises by 
    Tenant, its agents, employees, contractors or invitees, except in strict 
    compliance with all applicable federal, state and local laws, 
    regulations, codes and ordinances. If Tenant breaches the obligations 
    stated in the preceding sentence, then Tenant shall indemnify, defend and 
    hold Landlord harmless from any and all claims, judgments, damages, 
    penalties, fines, costs, liabilities or losses including, without 
    limitation, diminution in the value of the Premises, damages for the loss 
    or restriction on use of rentable or usable space or of any amenity of 
    the Premises, or elsewhere, damages arising from any adverse impact on 
    marketing of space at the Premises, and sums paid in settlement of claims, 
    attorneys' fees, consultant fees and expert fees incurred or suffered by 
    Landlord either during or after the Lease term. These indemnifications by 
    Landlord and Tenant include, without limitation, costs incurred in 
    connection with any investigation of site conditions or any clean-up, 
    remedial, removal or restoration work, whether or not required by any 
    federal, state or local governmental agency or political subdivision, 
    because of Hazardous Material present in the Premises, or in soil or 
    ground water on or under the Premises. Tenant shall immediately notify 
    Landlord of any inquiry, investigation or notice that Tenant may receive 
    from any third party regarding the actual or suspected presence of 
    Hazardous Material on the Premises.

    Without limiting the foregoing, if the presence of any Hazardous Material 
    brought upon, kept or used in or about the Premises by Tenant, its 
    agents, employees, contractors or invitees, results in any unlawful 
    release of Hazardous Material on the Premises or any other property, 
    Tenant shall promptly take all actions, at its sole expense, as are 
    necessary to return the Premises or any other property, to the condition 
    existing prior to the release of any such Hazardous Material; provided 
    that Landlord's approval of such actions shall first be obtained, which 
    approval may be withheld at Landlord's sole discretion.
    
    As used herein, the term "Hazardous Material" means any hazardous, 
    dangerous, toxic or harmful substance, material or waste including 
    biomedical waste which is or becomes regulated by any local governmental 
    authority, the State of Washington or the United States Government due to 
    its potential harm to the health, safety or welfare of humans or the 
    environment.

30. RIGHT OF ENTRY. Landlord and its agents, employees and contractors 
    shall have the right to enter the Premises at reasonable times for 
    inspection, to make repairs, alterations, and improvements, to show the 
    Premises to prospective purchasers and, within six (6) months prior to 
    the expiration of the Lease term, to show the Premises to prospective 
    tenants.

    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS LEASE; LANDLORD 
    RECOGNIZES THE WORK TO BE PERFORMED ON THE PREMISES BY TENANT IS 
    CONFIDENTIAL AND PROPRIETARY, AND LANDLORD WILL USE ITS BEST EFFORTS TO 
    ENTER THE PREMISES, OR ALLOW ITS AGENTS AND EMPLOYEES TO ENTER THE 
    PREMISES, ONLY WHEN ACCOMPANIED BY AN ESCORT PROVIDED BY TENANT. LANDLORD 
    WILL BE LIABLE TO TENANT FOR ANY DAMAGE RESULTING FROM LANDLORD'S 
    VIOLATION OF THIS SECTION 30.

31. QUIET ENJOYMENT. So long as Tenant pays the Rent and performs all of 
    its obligations in this Lease, Tenant's possession of the Premises will 
    not be disturbed by Landlord or anyone claiming by, through or under 
    Landlord, or by the holders of any Landlord's Mortgage or any successor 
    thereto.

32. GENERAL.

    a.  HEIRS AND ASSIGNS.  This Lease shall apply to and be binding upon 
    Landlord and Tenant and their respective heirs, executors administrators, 
    successors and assigns.

b.  BROKERS' FEES.  Tenant represents and warrants to Landlord that it has not 
    engaged any broker, finder or other person who would be entitled to any 
    commission or fees for the negotiation, execution, or delivery of this 
    Lease other than as disclosed in Section 1(i) or elsewhere in this Lease. 
    Tenant shall indemnify and hold Landlord harmless against any loss, cost, 
    liability or expense incurred by Landlord as a result of any claim 
    asserted by any such broker, finder or other person on the basis of any 
    arrangements or agreements made or alleged to have been made by or on 
    behalf of Tenant. This subparagraph shall not apply to brokers with whom 
    Landlord has an express written brokerage agreement.

c.  ENTIRE AGREEMENT.  This Lease contains all of the covenants and 
    agreements between Landlord and Tenant relating to the Premises. No prior 
    agreements or understanding pertaining to the Lease shall be valid or of 
    any force or effect and the covenants and agreements of this Lease shall 
    not be altered, modified or added to except in writing signed by Landlord 
    and Tenant.

<PAGE>

                                LEASE AGREEMENT
                 (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                  (CONTINUED)



    d.  SEVERABILITY. Any provision of this Lease which shall prove to be 
    invalid, void or illegal shall in no way affect, impair or invalidate any 
    other provision of this Lease.

    e.  FORCE MAJEURE. Time periods for either party's performance under any 
    provisions of this Lease (excluding payment of Rent) shall be extended 
    for periods of time during which the party's performance is prevented due 
    to circumstances beyond such party's control, including without 
    limitation, fires, floods, earthquakes, lockouts, strikes, embargoes, 
    governmental regulations, acts of God, public enemy, war or other strife.

    f.  GOVERNING LAW. This Lease shall be governed by and construed in 
    accordance with the laws of the State of Washington.

    g.  MEMORANDUM OF LEASE. This Lease shall not be recorded. However, 
    Landlord and Tenant shall, at the other's request, execute and record a 
    memorandum of Lease in recordable form that identifies Landlord and 
    Tenant, the commencement and expiration dates of the Lease, and the legal 
    description of the Premises as set forth on attached Exhibit A.

    h.  SUBMISSION OF LEASE FORM NOT AN OFFER. One party's submission of this 
    Lease to the other for review shall not constitute an offer to lease the 
    Premises. This Lease shall not become effective and binding upon Landlord 
    and Tenant until it has been fully signed by both Landlord and Tenant.

    i.  AUTHORITY OF PARTIES. Any individual signing this Lease on behalf of 
    an entity represents and warrants to the other that such individual has 
    authority to do so and, upon such individual's execution, that this Lease 
    shall be binding upon and enforceable against the party on behalf of whom 
    such individual is signing.

33. EXHIBITS AND RIDERS. The following exhibits and riders are made a part of 
    this Lease:

    Exhibit A - Legal Description
    Exhibit B - Tenant Improvement Schedule

    (Check the box for any of the following that will apply. Any riders 
    checked shall be effective only upon being initialed by the parties and 
    attached to the Lease. Capitalized terms used in the Riders have the 
    meanings given to them in the Lease.)

    /X/  Rent Rider
    / /  Retail Use Rider
    / /  Arbitration Rider
    /X/  Limitation on Landlord's Liability Rider
    / /  Guaranty of Tenant's Lease Obligations Rider
    / /  Option to Extend Rider

34. AGENCY DISCLOSURE. At the signing of this Agreement,

    Landlord's Agent  RICH MERMELSTEIN & TIM FOSTER OF COLLIERS INTERNATIONAL
                     ----------------------------------------------------------
                    (insert names of Licensee and the Company name as licensed)

    represented  LANDLORD
                  -------------------------------------------------------------
                  (insert Landlord, Tenant, both Landlord and Tenant or 
                   neither Landlord nor Tenant)

    and Tenant's Broker (Licensee) PAUL SUZMAN OF BUSINESS SPACE RESOURCES
                                   ----------------------------------------
                                   (insert names of Licensee and the Company
                                    name as licensed)

    represented  TENANT
                 -------------------------------------------------------------
                   (insert Landlord, Tenant, both Landlord and Tenant or 
                    neither Landlord nor Tenant)

    If Tenant's Licensee and Landlord's Agent are different salespersons 
    affiliated with the same Broker, then both Buyer and Seller confirm their 
    consent to that Broker acting as a dual agent. If Tenant's Licensee and 
    Landlord's Agent are the same salesperson representing both parties, 
    then both Landlord and Tenant confirm their consent to that salesperson 
    and his/her Broker acting as dual agent. Landlord and Tenant confirm 
    receipt of the pamphlet entitled "The Law of Real Estate Agency."
 
35. BROKER PROVISIONS. Landlord shall pay to Landlord's Agent an additional 
    commission upon the exercise by Tenant of any option to extend the Term 
    according to any commission agreement or, in the absence of one, 
    according to Landlord's Agent's commission schedule in effect as of the 
    execution of this Lease. If Landlord's Agent is the procuring cause of 
    any other lease or sale entered into between Landlord and Tenant concerning
    the Premises, Landlord shall pay a commission in the amount set forth in 
    Landlord's Agent's commission schedule in effect as of the execution of 
    this Lease. Landlord's successor shall be obligated to pay any unpaid 
    commissions upon any transfer of this Lease and any such transfer shall not 
    release the transferor from liability to pay such commissions. If Landlord's
    Agent is required to employ an attorney to enforce or declare it rights 
    under this Section, the prevailing party in any such action shall be 
    entitled to recover its reasonable attorneys' fees, in an amount determined 
    by the court. Neither

<PAGE>

                                LEASE AGREEMENT
                (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                  (CONTINUED)

Landlord's Agent nor Tenant's Licensee are receiving compensation from more 
than one party to this transaction unless otherwise disclosed on an attached 
addendum, in which case Landlord and Tenant consent to such compensation.

LANDLORD'S AGENT AND TENANT'S LICENSEE HAVE MADE NO REPRESENTATIONS OR 
WARRANTIES CONCERNING THE PREMISES, THE MEANING OF THE TERMS AND CONDITIONS 
OF THIS LEASE, LANDLORD'S OR TENANT'S FINANCIAL STANDING, ZONING, COMPLIANCE 
OF THE PREMISES WITH APPLICABLE LAWS, SERVICE OR CAPACITY OF UTILITIES, 
OPERATING EXPENSES, OR HAZARDOUS MATERIALS. LANDLORD AND TENANT ARE EACH 
ADVISED TO SEEK INDEPENDENT LEGAL ADVICE ON THESE AND OTHER MATTERS ARISING 
UNDER THIS LEASE.

<PAGE>

                                LEASE AGREEMENT
                (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                                  (CONTINUED)

IN WITNESS WHEREOF this Lease has been executed the date and year first above 
written.


TOM KANE     /s/ Thomas Kane           PACIFIC BIOMETRICS, INC.
         ------------------------                              ----------------
                LANDLORD:                                      TENANT:

ELSA KANE    /s/ Elsa Kane                  /s/ Paul G. Kanan
         ------------------------      -----------------------------------------
                LANDLORD:                                      Tenant:

                                            /s/ Paul G. Kanan
---------------------------------      -----------------------------------------
                By:                                            By:

                                            President & CEO
---------------------------------      -----------------------------------------
                Its:                                           Its:





<PAGE>

                             LEASE AGREEMENT
              (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                               (CONTINUED)


STATE OF WASHINGTON          )
                             )ss.
COUNTY OF        KING        )
          -------------------

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

           DATED: 5-12, 1997.

(Seal or stamp)                          /s/ Holly Ferguson
                                         ----------------------------------
                                         Printed Name:    Holly Ferguson
                                                       --------------------
                                         NOTARY PUBLIC in and for the State
              [Seal]                     of Washington, residing at Seattle
                                                                    -------
                                         My Commission expires:   2-27-98
                                                               ------------


STATE OF WASHINGTON          )
                             )ss.
COUNTY OF       KING         )
          -------------------

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

           DATED: 5-12, 1997.

(Seal or stamp)                          /s/ Holly Ferguson
                                         ----------------------------------
                                         Printed Name:    Holly Ferguson
                                                       --------------------
                                         NOTARY PUBLIC in and for the State
              [Seal]                     of Washington, residing at Seattle
                                                                    -------
                                         My Commission expires:   2-27-98
                                                               ------------

<PAGE>

                             LEASE AGREEMENT
              (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)
                               (CONTINUED)


STATE OF WASHINGTON          )
                             )ss.
COUNTY OF        KING        )
          -------------------

I certify that I know or have satisfactory evidence that Paul Hanan is the 
person who appeared before me and said person acknowledged that Paul Kanan 
signed this instrument, on oath stated that Paul Kanan was authorized to 
execute the instrument and acknowledged it as the President & CEO of CEO 
Pacific Biometrics to be the free and voluntary act of such party for the 
uses and purposes mentioned in the instrument.

           DATED: May 14, 1997.

(Seal or stamp)                          /s/ Max Mayer
                                         -------------------------------------
                                         Printed Name:    Max Mayer
                                                       -----------------------
                                         NOTARY PUBLIC in and for the State
              [Seal]                     of Washington, residing at Seafirst
                                                                    ----------
                                         My Commission expires: Sept 27, 2000
                                                               ---------------


STATE OF WASHINGTON          )
                             )ss.
COUNTY OF                    )
          -------------------

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

           DATED: __________, 19___.

(Seal or stamp)                          
                                         -------------------------------------

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

                                         NOTARY PUBLIC in and for the State
                                         of Washington, residing at           
                                                                    ----------
                                         My Commission expires:
                                                               ---------------




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                               LEASE AGREEMENT
               (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)


                                  EXHIBIT A
                             [LEGAL DESCRIPTION]


Lot 7, 8 and South Half of Lot 9, Block 12, of D.T. Denny's North Seattle 
Addition to the City of Seattle as recorded in Volume 1 of Plats, Page 41, 
King County, Washington.

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                               LEASE AGREEMENT
               (SINGLE TENANT FOR ENTIRE PARCEL - TRIPLE NET)


                                  EXHIBIT B
                        [TENANT IMPROVEMENT SCHEDULE]

BASED ON THE EMICK, HOWARD & SEIBERT, INC. SPACE PLAN DATED 2-26-97 THE TOTAL 
IMPROVEMENT COST TO THE PROPERTY IS ESTIMATED AT $348,467.53.  THE LANDLORD 
SHALL BE RESPONSIBLE FOR $148,200.00 OF THIS COST AND THE TENANT SHALL BE 
RESPONSIBLE FOR THE BALANCE; $200,267.53.  TENANT'S PORTION IS TO BE 
AMORTIZED AT AN INTEREST RATE OF 10% OVER SEVEN (7) YEARS AND IS REFLECTED IN 
THE RENTAL RATE.  THESE DOLLAR AMOUNTS ARE SUBJECT TO CHANGE BASED ON 
CONSTRUCTION DRAWINGS WHICH EMICK, HOWARD & SEIBERT, INC. WILL BEGIN UPON 
LEASE EXECUTION.  TENANT SHALL BE RESPONSIBLE FOR ALL COSTS BEYOND 
$348,467.53.  PERMITTING AND CONSTRUCTION BASED ON THE FINAL CONSTRUCTION 
DRAWINGS IS TO BEGIN IMMEDIATELY TO ENABLE AN AUGUST 1, 1997 OCCUPANCY.


<PAGE>

                                 RENT RIDER

Landlord and Tenant should complete only those provisions below which apply.  
Any provision below which is not completed shall not apply to the Lease.

1.   BASE MONTHLY RENT SCHEDULE.  Tenant shall pay Landlord base monthly rent 
     during the Lease Term according to the following schedule:

     LEASE YEAR (STATED IN YEARS OR MONTHS)   Base Monthly Rent Amount

     Year 1                                   $19,550.05
     Year 2                                   $19,550.05
     Year 3                                   $19,858.80
     Year 4                                   $20,167.55
     Year 5                                   $20,476.30
     Year 6                                   $20,785.05
     Year 7                                   $21,093.80
     Year 8                                   $18,525.00
     Year 9                                   $19,019.00
     Year 10                                  $19,513.00




/s/    TAK                             /s/    PYK
------------------------               ------------------------
Landlord's Initials                    Tenant's Initials


/s/    EK
------------------------
Landlord's Initials


------------------------
Landlord's Initials


<PAGE>

                   LIMITATION ON LANDLORD'S LIABILITY RIDER


Landlord and Tenant agree that Tenant's recourse against Landlord for any 
obligations of Landlord under this Lease shall be limited to Tenant's 
execution against Landlord's right, title and interest from time to time in 
the Premises.  Neither Landlord nor any of its partners, shareholders, 
members, officers, directors, or other principals shall have any personal 
liability to Tenant as the result of any breach or default by Landlord under 
this Lease.


/s/    TAK                  /s/    PYK
------------------------    ------------------------
Landlord's Initials:        Tenant's Initials:


/s/    EK
------------------------    ------------------------ 
Landlord's Initials:        Tenant's Initials: