Document:

<PAGE>

                                                                    Exhibit 10.8

                                 OFFICE LEASE

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

                                   RECITALS

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

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

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

                          LEASE TERMS AND CONDITIONS

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

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

                                      II.
                                   Premises
                                   --------

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

                                     III.
                                     Term
                                     ----

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

                                      IV.
                                    Rental
                                    ------

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

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

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

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

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

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

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

                                      -2-
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                                      V.
                             Option to Extend Term
                             ---------------------

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

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

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

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

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

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

                                     VII.
                                   Services
                                   --------

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

                                      -3-
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replacement light bulbs. The Landlord shall not be liable for any losses or
damages caused by or resulting from any interruption or failure of municipal
utility service due to causes beyond the control or responsibility of the
Landlord, and no such temporary interruption or temporary failure of such
services incident to restoring services to the building or due to accident or
strike or other conditions or events not under Landlord's control or
responsibility, and which do not substantially interfere with Tenant's enjoyment
of the leased premises, shall be deemed an eviction of the Tenant or relieve the
Tenant of any of the Tenant's obligations hereunder.

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

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

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

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

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

                                      X.
                                      Use
                                      ---

                                      -4-
<PAGE>

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

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

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

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

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

                                     XIII.
                                    Access
                                    ------

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

                                     XIV.

                                      -5-
<PAGE>

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

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

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

                                      XV.
                                    Notice
                                    ------

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

                                     XVI.
                                     Signs
                                     -----

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

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

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

                                      -6-
<PAGE>

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

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

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

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

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

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

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

                                      -7-
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

                                      -8-
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                      -9-
<PAGE>

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

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

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

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

                                     XXVI.
                                   Captions
                                   --------

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

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

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

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

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

                                      -10-
<PAGE>

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

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

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

                                     XXX.
                                    Brokers
                                    -------

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

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

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

STRATTON PROPERTIES, INC.                GLENN BALLMAN, individually

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

                                         By: /s/: Glenn Ballman
                                         Glenn Ballman President

PROVIDENCE OF WASHINGTON )
                         ) ss:
COUNTY OF KING           )

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

                                      -11-
<PAGE>

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

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

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

                                      -12-
<PAGE>

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

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

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

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

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

                                      -13-
<PAGE>

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

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

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

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

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

                                      -14-
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

                                      -15-
<PAGE>

                     [THIRD LEVEL FLOOR PLAN APPEARS HERE]

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

209 1/2 1st avenue south
<PAGE>

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

                                     -18-<PAGE>

                                                                   EXHIBIT 10.10

                                ONVIA.COM, INC.

                  AMENDED AND RESTATED 1999 STOCK OPTION PLAN

     1.  Purposes of the Plan.  The purposes of this Onvia.com, Inc. Amended and
Restated 1999 Stock Option Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to Employees and Consultants of the Company and its Subsidiaries and
to promote the success of the Company's business.  Options granted under the
Plan may be incentive stock options (as defined under Section 422 of the Code)
or non-statutory stock options, as determined by the Administrator at the time
of grant of an option and subject to the applicable provisions of Section 422 of
the Code, as amended, and the regulations promulgated thereunder.

     2.  Definitions.  As used herein, the following definitions shall apply:

          (a) "Administrator" means the Board of Directors or any of its
Committees appointed pursuant to Section 4 below.

          (b) "Affiliate" means an entity other than a Subsidiary in which the
Company owns an equity interest or which, together with the Company, is under
common control of a third person or entity.

          (c) "Applicable Laws" means the legal requirements relating to the
administration of stock option plans under applicable U.S. state corporate laws,
U.S. federal and applicable state securities laws, the Code, any Stock Exchange
rules or regulations and the applicable laws of any other country or
jurisdiction where Options are granted under the Plan, as such laws, rules,
regulations and requirements shall be in place from time to time.

          (d) "Board" means the Board of Directors of the Company.

          (e) "Code" means the Internal Revenue Code of 1986, as amended.

          (f) "Committee" means one or more committees or subcommittees
appointed by the Board of Directors in accordance with Section 4(a) below.

          (g) "Common Stock" means the Common Stock of the Company.

          (h) "Company" means Onvia.com, Inc., a Delaware corporation.

          (i) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Parent, Subsidiary or Affiliate to render services
and is compensated for such services, and any director of the Company whether
compensated for such services or not.

          (j) "Continuous Status as an Employee or Consultant" means the absence
of any interruption or termination of service as an Employee or Consultant.
Continuous Status as an Employee or Consultant shall not be considered
interrupted in the case of:  (i) sick leave, (ii) military leave, (iii) any
other leave of absence approved by the Administrator; provided, however, that
such leave is for a period of not more than ninety (90) days, unless re-
employment
<PAGE>

upon the expiration of such leave is guaranteed by contract or statute, or
unless provided otherwise pursuant to Company policy adopted from time to time
or (iv) in the case of transfers between locations of the Company or between the
Company, its Subsidiaries, its Affiliates, or their respective successors. For
purposes of this Plan, a change in status from an Employee to a Consultant or
from a Consultant to an Employee will not constitute an interruption of
Continuous Status as an Employee or Consultant.

          (k) "Director" means a member of the Board of Directors.

          (l) "Employee" means any person, including officers and Directors,
employed by the Company or any Parent, Subsidiary or Affiliate of the Company,
with the status of employment determined based upon such minimum number of hours
or periods worked as shall be determined by the Administrator in its discretion,
subject to any requirements of the Code.  The payment of a director's fee by the
Company to a Director shall not be sufficient to constitute "employment" of such
director by the Company.

          (m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (n) "Fair Market Value" means, as of any date, the fair market value
of Common Stock determined as follows:

               (i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation System ("Nasdaq"), its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported), as quoted
on such system or exchange, or the exchange with the greatest volume of trading
in Common Stock for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

               (ii) If the Common Stock is quoted on the Nasdaq (but not on the
National Market thereof) or regularly quoted by a recognized securities dealer
but selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for the Common Stock for the last
market trading day prior to the time of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

          (o) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable written option agreement.

          (p) "Listed Security" means any security of the Company that is listed
or approved for listing on a national securities exchange or designated or
approved for designation as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.

                                      -2-
<PAGE>

          (q) "Named Executive" means any individual who, on the last day of the
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer).  Such officer status shall
be determined pursuant to the executive compensation disclosure rules under the
Exchange Act.

          (r) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option, as designated in the applicable written
option agreement.

          (s) "Option" means a stock option granted pursuant to the Plan.

          (t) "Optioned Stock" means the Common Stock subject to an Option.

          (u) "Optionee" means an Employee or Consultant who receives an Option.

          (v) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.

          (w) "Plan" means this Onvia.com, Inc. Amended and Restated 1999 Stock
Option Plan.

          (x) "Reporting Person" means an officer, Director, or greater than ten
percent (10%) shareholder of the Company within the meaning of Rule 16a-2 under
the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under
the Exchange Act.

          (y) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act,
as the same may be amended from time to time, or any successor provision.

          (z) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

          (aa) "Stock Exchange" means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.

          (bb) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code, or any successor
provision.

          (cc) "Ten Percent Holder" means a person who owns stock requesting
more than 10% of the voting power of all classes of stock of the Company or any
Parent or Subsidiary.

     3.  Stock Subject to the Plan.  Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of shares that may be optioned and sold
under the Plan is 18,000,000 shares of Common Stock (on a post-split basis),
plus an automatic annual increase on the first day of each of the Company's
fiscal years beginning in 2001 and ending in 2009 equal to the lesser of:  (i)
3,200,000 Shares (on a post-split basis); (ii) four percent (4%) of the Shares
outstanding on the last day of the immediately preceding fiscal year; or (iii)
such lesser number of shares as is determined by the Board of Directors.  The
shares may be authorized, but unissued, or reacquired Common Stock.  If an
Option should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares that were subject thereto shall,
unless the Plan shall have been terminated, become available for future grant
under the Plan.  In addition, any shares of Common Stock which are retained by
the Company upon exercise of an Option in order to satisfy the exercise price
for such Option or any withholding

                                      -3-
<PAGE>

taxes due with respect to such exercise shall be treated as not issued and shall
continue to be available under the Plan. Shares repurchased by the Company
pursuant to any repurchase right which the Company may have shall not be
available for future grant under the Plan.

     4.  Administration of the Plan

          (a) General.  The Plan shall be administered by the Board or a
Committee, or a combination thereof, as determined by the Board.  The Plan may
be administered by different administrative bodies with respect to different
classes of Optionees and, if permitted by the Applicable Laws, the Board may
authorize one or more Directors to grant Options under the Plan.

          (b) Administration with Respect to Reporting Persons.  With respect to
Options granted to Reporting Persons and Named Executives, the Plan may (but
need not) be administered so as to permit such Options to qualify for the
exemption set forth in Rule 16b-3 and to qualify as performance-based
compensation under Section 162(m) of the Code.

          (c) Committee Composition.  If a Committee has been appointed pursuant
to this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.  From time to time the Board may
increase the size of any Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies (however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a Committee administering the Plan pursuant
to Section 4(b) above, to the extent permitted or required by Rule 16b-3 and
Section 162(m) of the Code.

          (d) Powers of the Administrator.  Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any Stock Exchange, the Administrator
shall have the authority, in its discretion:

               (i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;

               (ii) to select the Consultants and Employees to whom Options may
from time to time be granted hereunder;

               (iii) to determine whether and to what extent Options are granted
hereunder;

               (iv) to determine the number of shares of Common Stock to be
covered by each such option granted hereunder;

               (v) to approve forms of agreement for use under the Plan;

               (vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any option granted hereunder;

                                      -4-
<PAGE>

               (vii) to determine whether and under what circumstances an Option
may be settled in cash under Section 10(g) instead of Common Stock;

               (viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;

               (ix) to construe and interpret the terms of the Plan and Options
granted under the Plan;

               (x) to permit the early exercise of any Option in exchange for
restricted stock subject to a right of repurchase; and

               (xi) in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options to participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs.

          (e) Effect of Administrator's Decision.  All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees.

     5.  Eligibility

          (a) Recipients of Grants.  Nonstatutory Stock Options may be granted
to Employees and Consultants.  Incentive Stock Options may be granted only to
Employees; provided however that Employees of Affiliates shall not be eligible
to receive Incentive Stock Options.  An Employee or Consultant who has been
granted an Option may, if he or she is otherwise eligible, be granted additional
Options.

          (b) Type of Option.  Each Option shall be designated in the written
option agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.  However, notwithstanding such designations, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Options
designated as Incentive Stock Options are exercisable for the first time by any
Optionee during any calendar year (under all plans of the Company or any Parent
or Subsidiary) exceeds One Hundred Thousand Dollars ($100,000), such excess
Options shall be treated as Nonstatutory Stock Options.  For purposes of Section
5(b), Incentive Stock Options shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an
Incentive Stock Option shall be determined as of the date of the grant of such
Option.

          (c) At-Will Employment Relationship.  The Plan shall not confer upon
any Optionee any right with respect to continuation of employment or consulting
relationship with the Company, nor shall it interfere in any way with such
Optionee's right or the Company's right to terminate his or her employment or
consulting relationship at any time, with or without cause.

     6.  Term of Plan.  The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the shareholders of the
Company as described in

                                      -5-
<PAGE>

Section 19 of the Plan. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 15 of the Plan.

     7.  Term of Option.  The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.  However, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.

     8.  Limitation on Grants to Employees.  Subject to adjustment as provided
in Section 12 below, the maximum number of Shares which may be subject to
Options granted to any one Employee under this Plan for any fiscal year of the
Company shall be 2,000,000 Shares.

     9.  Option Exercise Price and Consideration

          (a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:

               (i) In the case of an Incentive Stock Option that is:

                    (A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, is a Ten Percent Holder, the per Share exercise
price shall be no less than one hundred ten percent (110%) of the Fair Market
Value per Share on the date of grant.

                    (B) granted to any other Employee, the per Share exercise
price shall be no less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per share
Exercise Price shall be such price as determined by the Administrator; provided,
however, that if such eligible person is, at the time of the grant of such
Option, a Named Executive of the Company, the per share Exercise Price shall be
no less than 100% of the Fair Market Value on the date of grant if such Option
is intended to qualify as performance-based compensation under Section 162(m) of
the Code.

               (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.

          (b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist

                                      -6-
<PAGE>

entirely of (i) cash, (ii) check, (iii) at the discretion of the Board of
Directors, a promissory note, (iv) other Shares that (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six (6) months on the date of surrender or such other period as may be
required to avoid a charge to the Company's earnings, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (v) authorization for the
Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the Option is exercised, (vi) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price and
any applicable income or employment taxes, (vii) delivery of an irrevocable
subscription agreement for the Shares that irrevocably obligates the option
holder to take and pay for the Shares not more than twelve months after the date
of delivery of the subscription agreement, (viii) any combination of the
foregoing methods of payment or (ix) such other consideration and method of
payment for the issuance of Shares to the extent permitted under Applicable
Laws. In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

     10.  Exercise of Option

          (a) Procedure for Exercise; Rights as a Shareholder.  Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.

               An Option may not be exercised for a fraction of a Share.

               An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has
received full payment for the Shares with respect to which the Option is
exercised. Full payment may, as authorized by the Board of Directors, consist of
any consideration and method of payment allowable under Section 8(b) of the
Plan. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
not withstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 12 of the Plan.

               Exercise of an Option in any manner shall result in a decrease in
the number of Shares that thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

                                      -7-
<PAGE>

          (b) Termination of Employment or Consulting Relationship.  Subject to
Sections 10(c) and 10(d), in the event of termination of an Optionee's
Continuous Status as an Employee or Consultant with the Company, such Optionee
may, but only within three (3) months (or such other period of time not less
than thirty (30) days as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding three (3) months) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his or her Option to the
extent that the Optionee was entitled to exercise it at the date of such
termination.  To the extent that Optionee was not entitled to exercise the
Option at the date of such termination, or if Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.  No termination shall be deemed to occur and this Section 10(b)
shall not apply if (i) the Optionee is a Consultant who becomes an Employee; or
(ii) the Optionee is an Employee who becomes a Consultant.

          (c)  Disability of Optionee.

               (i) Notwithstanding the provisions of Section 10(b) above, in the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (within the
meaning of Section 22(e)(3) of the Code), Optionee may, but only within twelve
(12) months from the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination.  To the extent that Optionee was not entitled
to exercise the Option at the date of termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.

               (ii) In the event of termination of an Optionee's Continuous
Status as an Employee or Consultant as a result of a disability which does not
fall within the meaning of total and permanent disability (as set forth in
Section 22(e)(3) of the Code), Optionee may, but only within six (6) months from
the date of such termination (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), exercise the
Option to the extent otherwise entitled to exercise it at the date of such
termination. However, to the extent that such Optionee fails to exercise an
Option which is an Incentive Stock Option (within the meaning of Section 422 of
the Code) within three (3) months of the date of such termination, the Option
will not qualify for Incentive Stock Option treatment under the Code. To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within six months (6) from the date of termination, the Option shall
terminate.

          (d) Death of Optionee.  In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant, or within
thirty (30) days following the termination of the Optionee's Continuous Status
as an Employee or Consultant, the Option may be exercised, at any time within
six (6) months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was entitled to exercise the Option at the date of

                                      -8-
<PAGE>

death or, if earlier, the date of termination of the Continuous Status as an
Employee or Consultant. To the extent that Optionee was not entitled to exercise
the Option at the date of death or termination, as the case may be, or if
Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.

          (e) Extension of Exercise Period.  The Administrator shall have full
power and authority to extend the period of time for which an Option is to
remain exercisable following termination of an Optionee's Continuous Status as
an Employee or Consultant from the periods set forth in Sections 10(b), 10(c)
and 10(d) above or in the Option Agreement to such greater time as the Board
shall deem appropriate, provided, that in no event shall such Option be
exercisable later than the date of expiration of the term of such Option as set
forth in the Option Agreement.

          (f) Rule 16b-3.  Options granted to Reporting Persons shall comply
with Rule 16b-3 and shall contain such additional conditions or restrictions as
may be required thereunder to qualify for the maximum exemption for Plan
transactions.

          (g) Buyout Provisions.  The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     11.  Stock Withholding to Satisfy Withholding Tax Obligations.  At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph.  When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (a) by cash payment, (b) out of Optionee's current
compensation, (c) if permitted by the Administrator, in its discretion, by
surrendering to the Company Shares that (i) in the case of Shares previously
acquired from the Company, have been owned by the Optionee for more than six (6)
months on the date of surrender and (ii) have a fair market value on the date of
surrender equal to or less than the statutory minimum tax withholding applicable
to the ordinary income recognized by the Optionee or (d) if permitted by the
Administrator, by electing to have the Company withhold from the Shares to be
issued upon exercise of the Option, if any, that number of Shares having a fair
market value equal to the statutory minimum amount required to be withheld.  For
this purpose, the fair market value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date").

          Any surrender by a Reporting Person of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

                                      -9-
<PAGE>

          All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

          (a) the election must be made on or prior to the applicable Tax Date;

          (b) once made, the election shall be irrevocable as to the particular
Shares of the Option as to which the election is made;

          (c) all elections shall be subject to the consent or disapproval of
the Administrator; and

          (d) if the Optionee is a Reporting Person, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.

          In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.

     12.  Adjustments Upon Changes in Capitalization; Corporate Transactions

          (a) Changes in Capitalization.  Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, the number of Shares described in Sections 3(i) and 8 above, as
well as the price per share of Common Stock covered by each such outstanding
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination, recapitalization or reclassification
of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board of Directors, whose determination in
that respect shall be final, binding and conclusive.  Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.

          (b) Dissolution or Liquidation.  In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Administrator.  The Administrator may,

                                     -10-
<PAGE>

in the exercise of its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Administrator and give each
Optionee the right to exercise his or her Option as to all of the Optioned
Stock, including Shares as to which the Option would not otherwise be
exercisable.

          (c) Acquisition, Merger or Change in Control

               (i) In the event of a Change in Control, if and to the extent
such outstanding Option is not to be assumed by the successor corporation at the
consummation of the Change of Control, the vesting of such Option shall
automatically be accelerated so that twenty-five percent (25%) of the unvested
shares of Common Stock covered by such Option shall be fully vested upon the
consummation of the Change in Control.

               (ii) The vesting of each outstanding Option held by an Optionee
who is an executive officer shall be accelerated completely so that one hundred
percent (100%) of the shares of common stock covered by such Option are fully
vested and exercisable in the event that within twelve (12) months of the
consummation of such Change of Control, such Optionee's employment by the
Company is either terminated by the Company other than for Cause (as defined
below) or terminated by the Optionee for Good Reason (as defined below). For
purposes of this Plan, "executive officer" shall mean: President, Chief
Financial Officer, Executive Officer, Chairman of the Board, Vice President
Marketing, Vice President Sales, Vice President Engineering, Director of
Customer Experience, Vice President of Business Development, Chief Financial
Officer and Vice President of Products and Services.

               For purposes of this Section 11(c)(ii), "Cause" means fraud,
misappropriation or embezzlement on the part of the Optionee which results in
material loss, damage or injury to the Company, the Optionee's conviction of a
felony involving moral turpitude, or the Optionee's gross neglect of duties.

               For purposes of this Section 11(c)(ii), "Good Reason" means a
material reduction in compensation or a relocation of the Optionee's principal
worksite to a location more than fifty (50) miles from the Optionee's pre-Change
of Control worksite or a material reduction in the Optionee's compensation,
responsibilities or authority as in effect before the Change of Control.

          (iii)  The Administrator shall have the authority, in the
Administrator's sole discretion, to provide for the automatic acceleration of
any outstanding Option upon the occurrence of a Change in Control, but only to
the extent that such acceleration does not interfere with any "pooling of
interests" accounting treatment used in connection with the Change in Control.

          (d) Certain Distributions.  In the event of any distribution to the
Company's shareholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Administrator may, in its discretion,
appropriately adjust the price per share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.

                                     -11-
<PAGE>

          13.  Non-Transferability of Options.  Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution; provided however that,
after the date, if any, upon which the Common Stock becomes a Listed Security,
the Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to Option Agreements specifying (i) the manner in which such
Nonstatutory Stock Options are transferable and (ii) that any such transfer
shall be subject to the Applicable Laws.  The designation of a beneficiary by an
Optionee will not constitute a transfer.  An Option may be exercised, during the
lifetime of the holder of the Option, only by such holder or a transferee
permitted by this Section 13.

     14.  Time of Granting Options.  The date of grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board of
Directors.  Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.

     15.  Amendment and Termination of the Plan

          (a) Amendment and Termination.  The Board of Directors may at any time
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made that would impair the rights of any
Optionee under any grant theretofore made, without his or her consent.  In
addition, to the extent necessary and desirable to comply with the Applicable
Laws, the Company shall obtain shareholder approval of any Plan amendment in
such a manner and to such a degree as required.

          (b) Effect of Amendment or Termination.  No amendment or termination
of the Plan shall adversely affect Options already granted, unless mutually
agreed otherwise between the Optionee and the Board of Directors, which
agreement must be in writing and signed by the Optionee and the Company.

     16.  Conditions Upon Issuance of Shares.  Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with the
Applicable Laws, with such compliance determined by the Company in consultation
with its legal counsel.

          As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by law.

                                     -12-
<PAGE>

     17.  Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     18.  Agreements.  Options shall be evidenced by written agreements in such
form as the Administrator shall approve from time to time.

     19.  Shareholder Approval.  If required by the Applicable Laws, continuance
of the Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months before or after the date the Plan is adopted or
amended, as applicable.  Such shareholder approval shall be obtained in the
degree and manner required under the Applicable Laws.  All Options issued under
the Plan shall become void in the event such approval is not obtained.

     20.  Information to Optionees.  To the extent required by the Applicable
Laws, the Company shall provide financial statements at least annually to each
Optionee during the period such Optionee has one or more Options outstanding.
The Company shall not be required to provide such information if the issuance of
Options under the Plan is limited to key employees whose duties in connection
with the Company assure their access to equivalent information.  In addition, at
the time of issuance of any securities under the Plan, the Company shall provide
to the Optionee a copy of the Plan and a copy of any agreement(s) pursuant to
which securities granted under the Plan are issued.

                                     -13-

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