Document:

Exhibit 10.5

                            Property Lease Agreement

                                      LEASE

                         RAZORE LAND COMPANY, LANDLORD

                 PHAGE THERAPEUTICS INTERNATIONAL, INC., TENANT

                             DATED OCTOBER 27, 2000

<PAGE>

LEASE

TABLE OF CONTENTS

Page

1.       BASIC LEASE TERMS......................................................

2.       PREMISES...............................................................

3.       TERM...................................................................

         3.1      Commence......................................................

         3.2      Expire........................................................

4.       TENANT IMPROVEMENTS; EARLY POSSESSION; DELAYED DELIVERY OF POSSESSION..

         4.1      Tenant Improvements...........................................

         4.2      Early Occupancy...............................................

         4.3      Landlord Delay................................................

         4.4      Tenant Delay..................................................

5.       RENT...................................................................

         5.1      Rent..........................................................

         5.2      Manner of Payment.............................................

         5.3      Rent Commencement.............................................

6.       PREPAID RENT AND SECURITY DEPOSIT......................................

         6.1      Deposit.......................................................

         6.2      Use of Deposit to Cure........................................

         6.3      Return of Security Deposit....................................

         6.4      Treatment as Security Deposit.................................

         6.5      Landlord's Obligation Regarding Deposit.......................

7.       USE OF PREMISES........................................................

         7.1      Use...........................................................

         7.2      Prohibited Uses...............................................

         7.3      No Nuisance...................................................

         7.4      Telecommunications Providers..................................

8.       ADDITIONAL RENT FOR OPERATING EXPENSES.................................

<PAGE>

         8.1      Tenant Payment................................................

         8.2      Tenant's Share................................................

         8.3      Definitions...................................................

         8.4      Determination of Operating Expenses...........................

         8.5      Reconciliation................................................

         8.6      Upon Lease Termination........................................

         8.7      Landlord Rights...............................................

9.       MAINTENANCE AND REPAIR RESPONSIBILITY..................................

         9.1      Maintenance Obligations.......................................

         9.2      No Obligation For Alteration..................................

         9.3      Tenant Waiver.................................................

10.      COMMON AREAS...........................................................

         10.1     Use of Common Areas...........................................

         10.2     Definition of Common Areas....................................

11.      UTILITIES AND SERVICES.................................................

         11.1     Furnishing of Utilities and Services..........................

         11.2     Additional Services...........................................

         11.3     After Hours...................................................

         11.4     Separate Meters...............................................

         11.5     Failure.......................................................

12.      LIMITS ON LANDLORD'S LIABILITY.........................................

         12.1     Circumstances Beyond Control..................................

         12.2     Unreasonable Period of Failure................................

         12.3     Tenant Caused.................................................

         12.4     No Abatement of Rent..........................................

         12.5     No Interference...............................................

13.      ALTERATIONS AND ADDITIONS BY TENANT; LIENS AND INSOLVENCY..............

         13.1     Alterations and Additions by Tenant...........................

         13.2     Liens and Insolvency..........................................

14.      INSURANCE; INDEMNITY...................................................

<PAGE>

         14.1     Tenant Waiver.................................................

         14.2     Indemnity.....................................................

         14.3     Landlord's Responsibility.....................................

         14.4     Tenant's Insurance............................................

         14.5     Policies......................................................

         14.6     Landlord's Insurance..........................................

         14.7     Proceeds......................................................

         14.8     Waiver of Subrogation.........................................

         14.9     Notification of Accidents.....................................

15.      DESTRUCTION............................................................

         15.1     Election to Restore...........................................

         15.2     Rent Abatement................................................

         15.3     Repairs to Tenant Installations...............................

         15.4     No Compensation...............................................

16.      CONDEMNATION...........................................................

         16.1     Termination of Lease..........................................

         16.2     Election of Termination.......................................

         16.3     Reduction of Rent.............................................

         16.4     Award.........................................................

         16.5     Landlord Authority............................................

17.      ASSIGNMENT AND SUBLETTING..............................................

         17.1     Landlord Consent Required.....................................

         17.2     Deemed Assignment.............................................

         17.3     Recapture.....................................................

         17.4     Additional Requirements.......................................

         17.5     Assignment with Bankruptcy....................................

         17.6     Sale..........................................................

         17.7     Binding.......................................................

18.      DEFAULT................................................................

         18.1     Definition of Default.........................................

<PAGE>

         18.2     Tenant Notification...........................................

         18.3     Landlord Default..............................................

         18.4     Rental Concession.............................................

19.      REMEDIES IN DEFAULT....................................................

         19.1     Landlord Remedies.............................................

         19.2     Tenant Payment of Costs.......................................

         19.3     Termination...................................................

         19.4     No Termination................................................

         19.5     Landlord Election to Make Tenant Advances.....................

20.      ACCESS.................................................................

21.      SURRENDER OF PREMISES; HOLD-OVER TENANCY...............................

         21.1     Surrender of Premises.........................................

         21.2     Hold-Over Tenancy.............................................

22.      COMPLIANCE WITH LAW....................................................

23.      RULES AND REGULATIONS..................................................

24.      PARKING................................................................

25.      ESTOPPEL CERTIFICATES..................................................

26.      SUBORDINATION..........................................................

27.      REMOVAL OF PROPERTY....................................................

28.      PERSONAL PROPERTY TAXES................................................

29.      NOTICES................................................................

30.      CONDITION OF PREMISES..................................................

31.      HAZARDOUS SUBSTANCES...................................................

         31.1     Tenant Obligations............................................

         31.2     Tenant Indemnity..............................................

         31.3     Landlord Inspection...........................................

         31.4     Survival......................................................

32.      SIGNS..................................................................

33.      GENERAL PROVISIONS.....................................................

         33.1     Attorneys' Fees...............................................

<PAGE>

         33.2     Governing Law; Venue..........................................

         33.3     Cumulative Remedies...........................................

         33.4     Exhibits; Addenda.............................................

         33.5     Interpretation................................................

         33.6     Joint Obligation..............................................

         33.7     Keys..........................................................

         33.8     Late Charges; Interest........................................

         33.9     Light, Air, and View..........................................

         33.10    Measurements..................................................

         33.11    Name..........................................................

         33.12    Prior Agreements; Amendments..................................

         33.13    Recordation...................................................

         33.14    Liability.....................................................

         33.15    Severability..................................................

         33.16    Time..........................................................

         33.17    Waiver........................................................

         33.18    No Waste......................................................

         33.19    Force Majeure.................................................

         33.20    Quiet Enjoyment...............................................

         33.21    Building Planning.............................................

34.      AUTHORITY OF TENANT....................................................

         34.1     Tenant as Corporation.........................................

         34.2     Tenant as Partnership or LLC..................................

35.      FINANCIAL STATEMENTS...................................................

36.      COMMISSIONS............................................................

Exhibits to this Lease:

Exhibit A-1.......Premises

Exhibit A-2.......Legal Description of Property

<PAGE>

                                      LEASE

LEASE,  dated  OCTOBER 27,  2000,  between  RAZORE LAND  COMPANY,  a  Washington
corporation  ("Landlord"),  and  Phage  Therapeutics  International,  a  Florida
corporation, ("Tenant").

1. Basic Lease Terms. This Section sets forth certain basic terms of this Lease
for reference purposes. This Section is to be read in conjunction with the other
provisions of this Lease; provided,  however, to the extent of any inconsistency
between this Section and the other provisions of this Lease,  this Section shall
control.

<TABLE>
<CAPTION>

<S>                                                                    <C>
Leased Premises (See ss.2)                                             Operating Expenses (See ss.8)
Business Park    QUADRANT PARKSIDE CENTER                              Tenant's Share                5.08% of property
                                                                       Initial Additional Rent
Building Name    Building One                                                                       $1,926.21Month
Address          19017 - 120th Avenue NE                               Parking (See ss.24)
                 Suite 102                                                    2.8/1000 unreserved parking spaces
                 Bothell, WA  98011
                                                                       Brokers (See ss.36)
Rentable Sq. Ft.     approximately 5,148 rsf                           For Tenant     Colliers International
                                                                       For Landlord   Colliers International
Rent; Prepaid Rent; Security Deposit
                                                                       Addresses for Notices (See ss.29)
(See ss.5 and 6)
                                                                       Landlord:
Base Monthly Rent
Year 1: $15.50/sf/year ($6,649.50/month)
                                                                       Razore Land Company
Year 2: $16.12/sf/year ($6,915.48/month)                               C/o Quadrant/KMS Management Services
Year 3: $16.77/sf/year ($7,194.33/month)                               728 134th Street SW, Suite 209
Year 4: $17.44/sf/year ($7,481.76/month)                               Everett, WA 98204
Year 5: $18.13/sf/year ($7,777.77/month)                               Tel:        425-741-2828
                                                                       Fax:        425-741-3838
Prepaid Rent                  $8,575.71                                Attn:       Alicia A. Shaw
                    (first month rent & operating expenses)
Security Deposit     $75,000 CD                                        Tenant:
(see 1A2)

                                                                       Phage Therapeutics, Inc.
Term (See ss.3)                                                        19017 - 120th Avenue NE, Suite 102
                                                                       Bothell, WA 98011
Commencement Date             November 15, 2000                        Attn:       Richard Honour
Rent Commencement Date        November 15, 2000                        Tel:        _________________________
Expiration Date               November 30, 2005                        Fax:        _________________________
Length of Term                60 months, plus
                              Partial month
Permitted Use
General office use, laboratory areas and warehouse
Storage.

</TABLE>

<PAGE>

1A. Special Lease Terms.  The following  additional  Lease terms shall apply. To
the extent of any inconsistency between this Section 1A and the other provisions
of this Lease, this Section 1A shall control.

1A.1. Tenant Improvements.  Landlord shall professionally steam clean the carpet
and paint the entire space.  Landlord  shall also  professionally  clean the air
ducting  system  including  replacing  any in flow or out flow  HVAC  vents.  In
addition, Landlord shall make the grade level roll up door operational including
removing the concrete pillars, which are currently in front of the door. Finally
Landlord shall replace a broken window below the conference room.

1A.2. Security Deposit.  Tenant shall provide and maintain a cash certificate of
deposit (CD) with a credible financial institution  acceptable to Landlord.  The
amount  of the CD shall be  $75,000,  which  equals  6  months  rent,  operating
expenses and real estate fees.

1.A.3.  Option to Renew. Tenant shall have one (1) five (5) year option to renew
the lease.  Tenant shall give Landlord  nine (9) months prior written  notice of
its intent to renew.  In  addition,  the  rental  rate for the first year of the
renewal term shall not be less than the final year of the initial lease term.

2. Premises.  Landlord agrees to lease to Tenant and Tenant agrees to lease from
Landlord the Premises  described on Exhibit A-1 and consisting of  approximately
the  square  feet  designated  in  Section  1.  The  Premises  are a part of the
Building,  located on the real property  described on Exhibit A-2  ("Property").
The Premises,  Building,  and Property are part of a business park  described on
Exhibit A-3 ("Business Park").

3. Term.

3.1 Commence. The term of this Lease ("Term") shall commence on the Commencement
Date set forth in Section 1, subject to Section 4.

3.2 Expire. The Term shall expire on the Expiration Date set forth in Section 1,
unless sooner terminated or extended as provided in this Lease.

4. Tenant Improvements; Early Possession; Delayed Delivery of Possession.

4.1 Tenant  Improvements.  Landlord shall provide a new demising wall separating
the balance of the space. Please see Exhibit A-1 for a detailed space plan.

4.2 Early Occupancy.  If Landlord permits Tenant to occupy the Premises prior to
the  Commencement  Date set forth in Section 1, the  Commencement  Date and Rent
Commencement Date shall be such date of occupancy.  Tenant's  occupancy prior to
the  originally  scheduled  Commencement  Date  shall  be  subject  to  all  the
provisions of this Lease and shall not advance the Expiration Date.

4.3 Landlord Delay. If Landlord for any reason cannot deliver  possession of the
Premises to Tenant at the Commencement  Date, (i) the Commencement Date shall be
the date on which  possession of the Premises is delivered to Tenant,  (ii) this
Lease shall not be void or voidable,  nor shall Landlord be liable to Tenant for
any loss or damage resulting  therefrom,  (iii) the Rent Commencement Date shall
be delayed to the same extent as the delay in the Commencement  Date,  except as
provided in Section 4.4, and (iv) the Expiration  Date shall be adjusted so that
the length of the Lease Term  remains as  provided  in Section 1, which shall be
confirmed by  Landlord's  written  notice to Tenant  setting  forth the adjusted
Commencement Date and Expiration Date.

<PAGE>

4.4 Tenant Delay.  If Tenant  causes any delay in  Landlord's  completion of the
Premises,  thereby  delaying  Tenant's  occupancy  of the  Premises  beyond  the
Commencement  Date set forth in  Section  1,  then  Landlord  may at its  option
require  Tenant to commence  payment of Rent on the Rent  Commencement  Date set
forth in Section 1 notwithstanding such delay in delivery of possession.

5.       Rent.

5.1 Rent.  Tenant  shall pay to Landlord  the Base  Monthly  Rent  specified  in
Section 1 and the  Additional  Rent as set forth in Section 8 and  elsewhere  in
this Lease  (the Base  Monthly  Rent and the  Additional  Rent are  collectively
referred  to as "Rent").  Rent shall be paid in advance,  on or before the first
day of each calendar month of the Lease Term.

5.2 Manner of Payment. Rent shall be paid without prior notice, demand, set off,
counterclaim,  deduction or defense and, except as otherwise  expressly provided
in this  Lease,  without  abatement  or  suspension.  All Rent  shall be paid to
Landlord at the  address for notices set forth in Section 1, in lawful  money of
the United States of America,  or to such other person or at such other place as
Landlord may from time to time designate in writing.

5.3 Rent Commencement. Payment of Rent shall begin on the Rent Commencement Date
set forth in  Section 1,  subject  to Section 4. Rent for any period  during the
Lease  term that is for less than one month  shall be  prorated  for the  actual
number of days in such period.

6.       Prepaid Rent and Security Deposit.

6.1  Deposit.  Upon  execution  of this Lease,  Tenant shall pay to Landlord the
Prepaid Rent and  Security  Deposit set forth in Section 1 (the Prepaid Rent and
the Security Deposit collectively, "Deposit").

6.2 Use of Deposit to Cure.  Landlord shall have the right to all or any part of
the  Deposit  to cure any  Default by Tenant  under this Lease or to  compensate
Landlord  for any damage  sustained by it resulting  from such  Default.  In the
event  of any  such  application  of  the  Deposit,  Tenant  shall,  on  demand,
immediately pay to Landlord the amount necessary to replenish the Deposit to the
amount set forth in Section 1.

6.3 Return of Security Deposit. If Tenant is not in Default at the expiration or
termination of this Lease,  Landlord shall return the remaining Security Deposit
to Tenant,  less any amounts  necessary to return the Premises to their original
condition, reasonable wear and tear excepted.

6.4 Treatment as Security Deposit.  In the event this Lease is terminated before
the end of the Term for any reason,  any Rent paid for any period after the date
of such termination shall be treated as an addition to the Security Deposit.

6.5 Landlord's Obligation Regarding Deposit. Landlord's obligations with respect
to the  Security  Deposit are those of a debtor and not a trustee.  Landlord may
maintain the security  deposit  separate  from  Landlord's  general funds or may
commingle the Security  Deposit with other funds of Landlord.  No interest shall
accrue for Tenant on the Deposit.

<PAGE>

7.       Use of Premises.

7.1 Use. Tenant shall use the Premises only for the purpose set forth in Section
1. The Premises may not be used for any other purpose without Landlord's written
consent.  Landlord  represents to Tenant that the purpose set forth in Section 1
is permitted as of the date hereof under the applicable  laws,  regulations  and
codes governing zoning,  land use and similar matters affecting the Building and
the Property  (collectively,  the "Zoning Laws"). Any changes in the Zoning Laws
or any changes in Tenant's use of the Premises that are not permitted  under the
Zoning  Laws will not be a basis for  terminating  this  Lease,  for  abating or
offsetting Rent or for otherwise seeking damages.

7.2  Prohibited  Uses.  Tenant shall not do or permit  anything to be done in or
about the  Premises  or bring or keep  anything  therein  which  will in any way
increase the cost of or affect any fire or other  insurance upon the Building or
any part thereof or any of its contents,  or cause cancellation of any insurance
policy covering the Building or any part thereof or any of its contents.

7.3 No Nuisance.  Tenant shall not do or permit  anything to be done in or about
the Premises that will obstruct or interfere with the rights of other tenants or
occupants of the Building or Business Park or injure them or their property,  or
use or allow the  Premises  to be used for any  unlawful  purpose  or in any way
constituting a nuisance.  Tenant shall not, without the prior written consent of
Landlord, use any apparatus, machinery or device in or about the Premises, which
will cause any substantial noise or vibration. Tenant shall not place any boxes,
cartons or other  rubbish in the  corridors or other  Common  Areas  (defined in
Section 10),  Building,  Property or Business Park. Tenant shall use due care in
the use of the  Premises  and of the  Common  Areas  (defined  in  Section  10),
Building  Property  or  Business  Park,  and shall not  neglect or misuse  water
fixtures, electric lights and heating and air-conditioning apparatus.

7.4  Telecommunications  Providers.  Tenant  acknowledges  that any provision of
telecommunications,  data transmission and office automation services, equipment
and systems by a third party  provider,  its agents,  affiliates and successors,
that has a right,  whether  exclusive  or not, to provide  such  services to the
Premises, Building or Business Park (each a "Provider") is entirely separate and
distinct from this Lease and that Landlord has no duty of performance concerning
the provision of services by a Provider.  Tenant hereby agrees to look solely to
the  Provider  for any failure in the  provision  of  services  provided by such
Provider.

8.       Additional Rent for Operating Expenses.

8.1 Tenant Payment. Tenant shall pay, as Additional Rent, Tenant's Share, as set
forth in Section 1, of all Operating  Expenses.  Tenant's  payment of Additional
Rent shall be made in the same manner as Base Monthly Rent.

8.2 Tenant's  Share.  Tenant's  Share shall be the  percentage  of all Operating
Expenses  for the  Building  set forth in Section 1 as  determined  by Landlord,
based upon the percentage that the approximate rentable area of the Premises set
forth in Section 1 bears to the approximate rentable area of the Building.

<PAGE>

8.3      Definitions.

8.3.1 Definition of Operating Expenses.  "Operating Expenses" means all expenses
and  charges  incurred  by  Landlord in the  operation  and  maintenance  of the
Building, Property and Common Areas (as defined in Section 10), as a first-class
facility,   including   without   limitation  the  following  costs  by  way  of
illustration:  (i) all real  property  taxes,  assessments  and other general or
special  charges  levied  during  the  Term  by  any  public,   governmental  or
quasi-governmental  authority  against the real or personal property included in
the Building or the Property,  including without limitation  Landlord's personal
property  used in the  maintenance,  repair or  operation of the Building or the
Property,  or any other tax on the leasing of the  Building or on the rents from
the Building  (other than any federal,  state or local income or franchise tax);
(ii) any and all  assessments  Landlord  must pay for the  Building  or Property
pursuant to an applicable Declaration of Covenants, Conditions, Restrictions and
Easements   for  the   Business   Park   identified   in  Section  1  ("CC&Rs"),
transportation  or any other  improvement  monitoring or management plan, or any
other covenant,  condition or reciprocal easement agreements; (iii) electricity,
gas and  similar  energy  sources,  refuse  collection,  water,  sewer and other
utilities services for the Building and the Property;  provided, however, to the
extent that any such services are separately metered to Tenant, Tenant shall pay
the actual separately  incurred charges;  (iv) annual inspection fees,  property
management  fees paid to independent  or affiliated  contractors or to Landlord,
and legal, accounting and other professional expenses; (v) janitorial, cleaning,
window washing and refuse removal; (vi) all costs of improvements or alterations
to the Building,  Property and Common Areas required by Laws, to save labor,  or
reduce  Operating  Expenses;  (vii) all premiums and  deductibles for liability,
property damage, casualty, automobile, garage keeper's, rental loss compensation
or other insurance  maintained by Landlord for the Building or Property;  (viii)
the cost of any capital  improvements  made to the Property,  Building or Common
Areas by  Landlord  for the  replacement  of any  Building  equipment  needed to
operate the Building or the Common Areas at the same quality  levels as prior to
the  replacement;  (ix)  air  conditioning,   heating,  ventilating,   plumbing,
electrical  system,  elevator  maintenance  supplies,  materials,  equipment and
tools; (x) the repair of the air conditioning,  heating, ventilating,  plumbing,
electrical  systems and  elevators  of the  Building;  (xi)  maintenance  costs,
including payroll expenses,  rental of personal property used in maintenance and
all other upkeep of parking and Common Areas,  including cleaning,  snow and ice
removal,  landscaping  and  lighting;  (xii)  costs  and  expenses  of  repairs,
resurfacing, repainting, and similar items, (xiii) costs and expenses associated
with  security and  monitoring;  (xiv) costs  incurred in the  management of the
Building and Property (including supplies,  wages and salaries of employees used
in the  management,  operation  and  maintenance  thereof and payroll  taxes and
similar  governmental  charges with  respect  thereto,  and Building  management
office  rental,  if any;  (xiii) all  license  and  permit  fees (xiv) any other
expense  or charge  whether  or not  described  above  that in  accordance  with
generally accepted accounting and management practices is properly an expense of
maintaining,  operating or repairing  the  Building,  Property or Common  Areas.
Operating  Expenses shall not include  depreciation on the Building or equipment
therein,  Landlord's executive salaries,  real estate brokers' commissions,  and
costs or  expenses  for which  Landlord  is  reimbursed  or  indemnified,  by an
insurer,  condemnor,  tenant or otherwise.  Landlord shall not collect more than
100% of  Operating  Expenses  and shall not  recover  any item of cost more than
once. If, in Landlord's  reasonable  determination,  certain Operating  Expenses
vary in direct relationship to occupancy of the Building, Tenant's Share of such
Operating  Expenses shall be adjusted to reflect that portion of the whole which
the rentable square feet of the Premises bears to the rentable square footage of
the Building, as applicable, which is actually occupied by tenants.

8.3.2 Definition and Treatment of Capital Improvements.  As used herein, Capital
Improvement  shall mean the replacement of any major component or element of the
Building  or Common  Areas.  The cost of any  Capital  Improvement  included  in
Operating  Expenses  pursuant to this Lease shall be  amortized  over the useful
life of the  Capital  Improvement  with  interest  accruing  on the  unamortized
balance at the prime rate then in effect at the  Seattle  Head Office of Bank of
America or its successors, or such higher rate as may have been paid by Landlord
on funds  borrowed  for the  purpose  of paying  for such  Capital  Improvement.
Subject to Section  12.3,  Landlord  shall be  responsible  at its sole cost and
expense for Capital  Improvements  related to the repair or  replacement  of the
structural  portions of the Building,  which structural  portions consist of the
foundation,  bearing and exterior walls, subflooring, and roof structure and the
cost of such Capital Improvements shall not be included in Operating Expenses.

8.4  Determination of Operating  Expenses.  Prior to each January 1 of the Term,
Landlord  shall  furnish  Tenant a written  statement of the  estimated  monthly
Tenant's Share of Operating Expenses for the coming calendar year. The estimated
monthly  Tenant's  Share of Operating  Expenses for the period  before the first
January 1 after the  Commencement  Date is set forth in Section 1. Landlord may,
by written notice to Tenant,  revise its estimate of Tenant's Share of Operating
Expenses from time to time.

8.5  Reconciliation.  Within 90 days after each January 1 during the Term, or as
soon  thereafter  as  practicable,  Landlord  shall  deliver to Tenant a written
statement setting forth the actual Operating Expenses and Tenant's Share thereof
during the  preceding  calendar year (or portion of such calendar year after the
Commencement  Date).  To the  extent  Tenant's  Share of such  actual  Operating
Expenses  exceeded the estimated  Tenant's Share thereof paid by Tenant,  Tenant
shall pay  Additional  Rent to  Landlord  within 30 days  after  receipt of such
statement  by Tenant.  To the extent  Tenant's  Share of such  actual  Operating
Expenses  was less than the  estimated  Tenant's  Share  thereof paid by Tenant,
Tenant shall receive a credit against its next payable Rent or such amount shall
otherwise be refunded to Tenant as Landlord determines in its sole discretion.

8.6 Upon Lease  Termination.  If this Lease shall expire or otherwise  terminate
other than on a  December  31,  Landlord  may in its  discretion  make a special
determination  of Tenant's  Share of actual  Operating  Expenses for the partial
calendar year ending on the date of such expiration or other termination, or may
defer such  determination  until its usual  reconciliation of Operating Expenses
for the Building for the entire  calendar year. The excess actual Tenant's Share
for  such  partial  calendar  year  shall  be paid to  Landlord,  or the  excess
estimated  Tenant's  Share already paid by Tenant,  as the case may be, shall be
paid by Tenant to Landlord or Landlord to Tenant,  as the case may be, within 30
days of such determination.

<PAGE>

8.7  Landlord  Rights.  Landlord  shall  have the same  rights  with  respect to
Tenant's  nonpayment of Tenant's  Share of Operating  Expenses as required under
this  Lease as it has with  respect to any other  nonpayment  of Rent under this
Lease.

9.       Maintenance and Repair Responsibility.

9.1  Maintenance  Obligations.  Subject to Sections 7.3,  12.3 and 15,  Landlord
shall  maintain and keep in good  condition and repair  throughout  the Term the
entire Premises , the Building,  and the Common Areas in a manner and at a level
of  quality  that is  consistent  with  comparable  buildings  in the area  (the
"Maintenance  Obligations").  Except as  otherwise  expressly  provided  in this
Lease, all cost and expenses  incurred by Landlord in performing the Maintenance
Obligations shall be considered Operating Expenses.

9.2 No Obligation For Alteration.  Except as specifically  provided elsewhere in
this Lease,  Landlord  shall have no obligation  whatsoever  to alter,  remodel,
improve,  repair,  decorate,  or paint the Premises or any part thereof.  Tenant
affirms that Landlord has made no  representations to Tenant about the condition
of the Premises or the Building, except as specifically herein set forth.

9.3 Tenant Waiver. Tenant waives the right to make repairs at Landlord's expense
under any law, statute, or ordinance now or hereafter in effect.

10.      Common Areas.

10.1 Use of Common Areas.  Provided Tenant is not in Default under the Lease and
subject to the other terms and  conditions of this Lease,  Tenant shall have the
right to use the Common  Areas on a  non-exclusive  basis with  Landlord,  other
tenants in the  Building and the Business  Park and their  respective  officers,
employees,  guests,  invitees  and  agents.  Landlord  shall  have the  right to
establish and enforce reasonable rules and regulations applicable to all tenants
concerning the maintenance,  management, use, and operation of the Common Areas;
and to make changes to the Common Areas, including without limitation changes in
the location of lobbies, driveways,  entrances, exits, vehicular parking spaces,
parking areas,  pedestrian and bicycle trail areas, or the direction of the flow
of traffic.

10.2 Definition of Common Areas. In this Lease,  "Common Areas," means all parts
of the Building and related land areas and  facilities  outside the Premises and
the premises leased or available for lease to other tenants,  but constituting a
part of Business Park. Common Areas include, without limitation:

10.2.1 the Building's common entrances, lobbies, restrooms,  elevators, stairway
and accessways,  loading docks,  ramps, drives and platforms and any passageways
and serviceways thereto, and mechanical and electrical systems for the Building,
including  without  limitation,  plumbing,  sewage,  electrical  systems,  pipes
conduits,  and wires,  and  appurtenant  equipment of the  Building,  all to the
extent serving the Premises;

10.2.2 the open areas,  landscaped  areas,  sidewalks,  pedestrian  walkways and
patios,  roadways,  pedestrian  and bicycle  trails,  driveways,  parking areas,
utility systems and facilities,  service areas, refuse areas and all other areas
in the Business Park and  available  for use in common with all tenants,  guests
and invitees of the Business Park, located outside the Premises and the premises
leased or available for lease to other tenants in the Business Park.

<PAGE>

-
11.      Utilities and Services.

11.1  Furnishing  of  Utilities  and  Services.  Provided  that Tenant is not in
Default under this Lease,  Landlord  shall cause to be furnished to the Premises
the following  utilities  and services,  during  generally  recognized  business
hours:  (I) electricity for normal lighting and office  machines,  (ii) heat and
air  conditioning  required  for  the  comfortable  use  and  occupation  of the
Premises.

11.2 Additional  Services.  The provision and use of such utilities and services
shall be in accordance  with any  applicable  rules and  regulations  under this
Lease.  If Tenant  requires or utilizes more water or  electrical  power than is
considered reasonable or normal by Landlord,  Landlord may at its option require
Tenant to pay, as Additional  Rent, the cost, as fairly  determined by Landlord,
incurred in such extraordinary usage. In addition, Landlord may install separate
meters in accordance with Section 11.4.

11.3 After Hours.  At Tenant's  request,  Landlord  shall  furnish,  at Tenant's
expense,  heat and air  conditioning  outside of generally  recognized  business
hours, at rates to be established from time to time by Landlord,  and to be paid
by Tenant as billed by Landlord.

11.4 Separate Meters. To the extent that the Premises are separately  metered or
sub-metered for Tenant's use of any utilities or services,  Tenant shall pay for
such use in the same manner as Rent,  or shall pay the cost thereof  directly to
the  service  provider,  and in  either  event  such  charges  shall  constitute
Additional Rent hereunder.

11.5 Failure.  In the event of any failure or interruption of such utilities and
services,  Landlord shall diligently attempt to resume service promptly.  Tenant
shall not be entitled to any  abatement  or  reduction  of Rent by reason of any
failure or  interruption  of utilities or services,  no eviction of Tenant shall
result from any such failure or  interruption,  and Tenant shall not be relieved
from the  performance of any obligation in this Lease because of such failure or
interruption.

12.  Limits on  Landlord's  Liability.  Landlord's  liability  in respect of its
Maintenance  Obligations  and  Service  Obligation  is subject to the  following
limitations:

12.1 Circumstances Beyond Control.  Landlord shall not be liable for any failure
of Maintenance Obligations or Service Obligations when such failure is caused by
(i)  strikes,  lockouts  or other  labor  disturbance  or labor  dispute  of any
character,  (ii)  governmental  regulation,  moratorium  or  other  governmental
action,  (iii) inability despite the exercise of reasonable  diligence to obtain
electricity,  water or fuel from the providers thereof,  (iv) acts of God or (v)
any other cause beyond Landlord's reasonable control.

12.2 Unreasonable Period of Failure. Subject to Section 12.1, Landlord shall not
be liable for any failure of  Maintenance  Obligations  or Service  Obligations,
unless such failure shall persist for an unreasonable  time after written notice
of the need of such repairs or maintenance or of the interruption of services is
given to Landlord by Tenant.

12.3 Tenant  Caused.  If  maintenance  and repairs to the Premises,  Building or
Common  Areas are  caused  in part or in whole by the act,  neglect,  fault,  or
omission of any duty by Tenant, its agents,  servants,  employees,  or invitees,
Tenant shall pay to Landlord the costs of such maintenance and repairs.

12.4 No Abatement of Rent.  Except as  specifically  provided in Sections 15 and
16, there shall be no abatement of Rent in any circumstance under this Lease.

<PAGE>

12.5  No  Interference.  Landlord  shall  not be  liable  for any  injury  to or
interference  with  Tenant's  business  arising  from the making of any repairs,
alterations, or improvements in or to any portion of the Building, the Premises,
the Property, or the Common Areas, or to fixtures,  appurtenances, and equipment
therein,  or the  failure of  Maintenance  Obligations  or Service  Obligations.
Without  limiting the  generality of this Section 12, in no event shall Landlord
have any liability for consequential  damages resulting from any act or omission
of Landlord in respect of its  Maintenance  Obligations or Service  Obligations,
even if  Landlord  has been  advised of the  possibility  of such  consequential
damages.

13.      Alterations and Additions by Tenant; Liens and Insolvency.

13.1  Alterations  and Additions by Tenant.  With the prior  written  consent of
Landlord,  Tenant may make at its expense additional improvements or alterations
to the  Premises.  Any repairs or new  construction  by Tenant  shall be done in
conformity with plans and  specifications  approved by Landlord,  by contractors
approved by  Landlord,  (provided,  that  Landlord may require that such work be
performed by  Landlord's  employees or  contractor(s)  employed by Landlord) and
subject  to  Landlord's   reasonable   rules  and  regulations   regarding  such
construction. All work performed shall be done lien-free in a workmanlike manner
and shall  become the  property of  Landlord.  Landlord  may require that Tenant
provide to  Landlord,  at Tenant's  expense,  a lien and  completion  bond in an
amount equal to 150% of the estimated cost of any  improvements,  additions,  or
alterations  in the  Premises.  Landlord  shall not  unreasonably  withhold  its
consent to Tenant's  proposed  alterations or  improvements if the conditions of
this  Section  13 are  satisfied.  Landlord  may  require  Tenant to remove  any
improvements  or alterations at the expiration or termination of the Term,  such
removal to occur at Tenant's expense;  and Tenant shall repair all damage to the
Premises or Building occurring as a result of such removal.  In the event Tenant
fails to remove any  improvements  or  alterations  as  required  by Landlord or
repair any damage occurring  during such removal,  Landlord shall be entitled to
remove  any  improvements  or  alterations  or make such  repairs,  at  Tenant's
expense, and shall further be entitled to draw upon the Deposit.

13.2 Liens and Insolvency. Tenant shall keep the Premises, Building and Property
free from any liens  arising  out of any work  performed,  materials  ordered or
obligations incurred by Tenant.  Landlord shall have the right at all reasonable
times to post on the  Premises  any  notices  which it deems  necessary  for its
protection  from such  liens.  If such  liens are filed  unless  such  liens are
removed or bonded around to Landlord's satisfaction within fourteen (14) days of
Landlord's  notice to  Tenant,  Landlord  may,  without  waiving  its rights and
remedies based on such breach by Tenant and without releasing Tenant from any of
its obligations hereunder, cause such liens to be released by any means it shall
deem proper,  including payment in satisfaction of the claim giving rise to such
lien.  Tenant  shall pay to  Landlord  on  demand,  any  reasonable  sum paid by
Landlord to remove such liens,  together with interest at the rate  specified in
Section 33.8.

14.      Insurance; Indemnity.

14.1 Tenant Waiver.  Landlord  shall not be liable to Tenant,  and Tenant hereby
waives  all  claims  against  Landlord,  for  injury or damage to any  person or
property in or about the Premises, Building, Property or Common Areas by or from
any cause whatsoever,  including without limitation any acts or omissions of any
other tenants, licensees or invitees of the Building.

14.2  Indemnity.   Tenant  shall  indemnify  and  defend  (using  legal  counsel
acceptable to Landlord)  Landlord and hold Landlord  harmless,  from and against
any and all loss,  cost,  damage,  liability and expense  (including  reasonable
attorneys' fees) whatsoever that may arise out of or in connection with Tenant's
occupation, use or improvement of the Premises, or that of its employees, agents
or contractors,  or Tenant's breach of its obligations  under this Lease. To the
extent  necessary to fully indemnify  Landlord from claims made by Tenant or its
employees,  this indemnity  constitutes a waiver of Tenant's  immunity under the
Washington  Industrial Insurance Act, RCW Title 51. This indemnity shall survive
the expiration or termination of the Term.

14.3  Landlord's   Responsibility.   The  exculpation,   release  and  indemnity
provisions  of Sections  14.1 and 14.2 shall not apply to the extent the subject
claims  thereunder  were  caused  by  Landlord's  gross  negligence  or  willful
misconduct.  However,  in no event  shall  Landlord  be  liable  to  Tenant  for
consequential damages.

14.4 Tenant's  Insurance.  Tenant shall procure and maintain throughout the Term
at Tenant's expense, the following insurance:

<PAGE>

14.4.1 Comprehensive general public liability insurance, insuring Tenant against
liability arising out of the Lease and the use, occupancy, or maintenance of the
Premises  and all areas  appurtenant  thereto.  Such  insurance  shall be in the
amount of not less than $2,000,000  combined single limit for injury to or death
of one or more  persons in an  occurrence,  and for damage to tangible  property
(including  loss  of use)  in an  occurrence  (or in  such  amount  as  Landlord
determines  in  its  reasonable  discretion).   Such  policy  shall  insure  the
operations of independent  contractors and contractual  liability  (covering the
indemnity  in  Section  14.2) and  shall:  (i) name  Landlord  as an  additional
insured,  and (ii)  provide  that it is  primary  and  noncontributing  with any
insurance in force or on behalf of Landlord.

14.4.2  Standard form property  insurance  insuring  against the perils of fire,
extended  coverage,  vandalism,  malicious  mischief,  special extended coverage
("All-Risk")  and sprinkler  leakage.  This  insurance  policy shall be upon all
personal  property for which Tenant is legally  liable or that was  installed at
Tenant's  expense,  and that is located in the Building or  Premises,  including
without limitation all Tenant's furnishings,  fixtures, furniture, fittings, and
equipment and all improvements to the Premises installed by Tenant, in an amount
not less  than 90% of the  full  replacement  cost  thereof.  In the  event of a
dispute as to the amount of full  replacement  cost, the decision of Landlord or
any mortgagees of Landlord  shall be conclusive.  Such policy shall also include
business  interruption  coverage,  covering direct and indirect loss of Tenant's
earnings attributable to Tenant's inability to use fully or obtain access to the
Premises or  Building,  in an amount as will  properly  reimburse  Tenant.  Such
policy shall name Landlord and any mortgagees of Landlord as insured parties, as
their respective interests may appear.

14.4.3 Workman's Compensation and Employer's Liability Insurance (as required by
state law).

14.4.4  Any  other  form or forms of  insurance  as Tenant  or  Landlord  or any
mortgagees  of Landlord may  reasonably  require  from time to time in form,  in
amounts and for insurance  risks  against  which a prudent  tenant would protect
itself.

14.5  Policies.  All policies of  insurance  to be obtained by Tenant  hereunder
shall be in a form  satisfactory  to Landlord  and shall be issued by  insurance
companies holding a General Policyholder Rating of "A" and a Financial Rating of
"X" or better in the most current issue of Best's Insurance Guide.  Tenant shall
provide  Landlord with  certificates of such insurance.  No such policy shall be
cancelable or reducible in coverage  except after 30 days' prior written  notice
to  Landlord.  Tenant  shall,  within ten days prior to the  expiration  of such
policies,  furnish Landlord with renewals or "binders" thereof,  or Landlord may
order such insurance and charge the cost thereof to Tenant as Additional Rent.

14.6  Landlord's  Insurance.  Landlord  shall  maintain  liability  and casualty
insurance for the Building and Property adequate in Landlord's judgment to cover
(with deductibles deemed appropriate by Landlord) the risks customarily  insured
against by owners of properties similar to the Building.

14.7 Proceeds.  The proceeds of any insurance policies  maintained by or for the
benefit of Landlord  shall belong to and be paid over to Landlord.  Any interest
or right of Tenant in any such proceeds shall be subject to Landlord's  interest
and right in such proceeds.

14.8  Waiver  of   Subrogation.   Anything   in  this  Lease  to  the   contrary
notwithstanding,  Tenant and Landlord  each waives its entire right of recovery,
claims, actions, or causes of action against the other for loss or damage to the
Premises,  Building,  or Property or any personal property of such party therein
that is caused by or incident to the perils covered by normal extended  coverage
clauses of standard fire insurance  policies carried by the waiving party and in
force at the time of damage or loss.  Tenant and Landlord  each waives any right
of  subrogation  it may have  against  the other party to the extent of recovery
under any such insurance,  and shall cause each insurance  policy obtained by it
to provide  that the  insurance  company  waives all right to recovery by way of
subrogation  against the other party in connection with any such loss or damage.
If either  Landlord or Tenant is unable to obtain its  insurer's  permission  to
waive any claim against the other party,  such party shall  promptly  notify the
other party of such inability.

<PAGE>

14.9  Notification  of Accidents.  Tenant shall promptly  notify Landlord of any
casualty or accident occurring in or about the Premises.

15.      Destruction.

15.1 Election to Restore.  If the Premises or the Building is destroyed by fire,
earthquake,  or other casualty to the extent that they are untenantable in whole
or in part, then Landlord shall have the right but not the obligation to proceed
with reasonable diligence to rebuild and restore the Premises or the Building or
such part  thereof.  Landlord  shall  within 30 days after such  destruction  or
injury notify Tenant whether Landlord  intends to rebuild.  If Landlord fails to
notify Tenant within such period,  then this Lease shall terminate as of the end
of such period.

15.2 Rent  Abatement.  During  the  period  from  destruction  or  damage  until
restoration  (or  termination  of this Lease),  Rent shall be abated in the same
ratio as that portion of the Premises  which  Landlord  determines  is unfit for
occupancy  shall  bear to the whole  Premises.  If damage is due to the fault or
neglect of Tenant or its agents, employees,  invitees, or licensees, there shall
be no abatement of Rent.

15.3 Repairs to Tenant  Installations.  Landlord shall not be required to repair
any  injury  or  damage  by fire or  other  cause,  or to make  any  repairs  or
replacements  of any  panels,  decoration,  office  fixtures,  paintings,  floor
covering,  or any  other  improvements  to the  Premises  installed  by  Tenant.
Instead,  if Landlord  repairs or rebuilds the  Premises  under this Section 15,
Tenant  shall  repair or rebuild such  Tenant-installed  improvements  and other
items of property

15.4 No  Compensation.  Tenant  shall not be  entitled  to any  compensation  or
damages  from  Landlord  for  loss of the use of the  whole  or any  part of the
Premises,  the property of Tenant, or any inconvenience or annoyance  occasioned
by such damage, repair, reconstruction, or restoration.

16.      Condemnation.

16.1  Termination of Lease. If all or part of the Premises are taken under power
of eminent domain,  or sold under the threat of the exercise of said power, this
Lease  shall  terminate  as to the part so  taken as of the date the  condemning
authority takes possession.

16.2 Election of Termination.  If more than 25% of the floor area of Premises is
taken by  condemnation,  Landlord or Tenant may, by written  notice to the other
within  ten days after  notice of such  taking,  terminate  this Lease as to the
remainder  of the  Premises  as of  the  date  the  condemning  authority  takes
possession.

16.3 Reduction of Rent. If Landlord or Tenant does not so terminate,  this Lease
shall  remain in  effect as to such  remainder,  except  that the Rent  shall be
reduced in the  proportion  that the  rentable  floor  area  taken  bears to the
original  rentable total floor area.  However,  if circumstances  make abatement
based on floor area unreasonable, the Rent shall abate by a reasonable amount to
be determined by Landlord.  In the event that neither Landlord nor Tenant elects
to terminate this Lease,  Landlord's  responsibility to restore the remainder of
the Premises shall be limited to the amount of any condemnation  award allocable
to the Premises, as determined by Landlord.

16.4 Award.  Any award for the taking of all or part of the  Premises  under the
power of eminent domain,  including payment made under threat of the exercise of
such power, shall be the property of Landlord,  whether made as compensation for
diminution  in  value  of the  leasehold  or for  the  taking  of the  fee or as
severance damages.  Tenant shall only be entitled to such compensation as may be
separately  awarded or  recoverable by Tenant in Tenant's own right for the loss
of or damage to improvements to the Premises  installed by Tenant,  for Tenant's
trade fixtures and removable  personal  property and for Tenant's  relocation or
moving expenses.  Landlord shall not be liable to Tenant for the loss of the use
of all or any part of the Premises taken by condemnation.

<PAGE>

16.5 Landlord  Authority.  Landlord shall have the exclusive  authority to grant
possession and use to the  condemning  authority and to negotiate and settle all
issues  of just  compensation  or, in the  alternative,  to  conduct  litigation
concerning such issues;  provided,  however,  that Landlord shall not enter into
any  settlement of any separate award that may be made to Tenant as described in
Section 16.4 without Tenant's prior approval of such settlement,  which approval
shall not be unreasonably withheld.

17.      Assignment and Subletting.

17.1 Landlord  Consent  Required.  Tenant shall not assign this Lease, or sublet
the Premises or any part thereof,  either by operation of law or  otherwise,  or
permit any other party to occupy all or any part of the Premises,  without first
obtaining the written consent of Landlord.  Tenant shall propose such assignment
or sublease by written  notice to  Landlord,  and such notice  shall  specify an
effective date which shall be the first day of a calendar month and shall be not
less  than 60 days  after  the date of such  notice.  This  Lease  shall  not be
assignable by operation of law.  Tenant shall further  provide to Landlord other
information and  creditworthiness  materials concerning any proposed assignee or
sublessee  as  is  requested  by  Landlord.  Landlord's  consent  to a  proposed
assignment  or  sublease  may be  withheld  or  granted in  Landlord's  absolute
discretion.

17.2 Deemed Assignment.  If Tenant is a corporation,  any transfer of this Lease
from  Tenant by  merger,  consolidation,  or  liquidation,  or any change in the
ownership  of or power to vote 50% or more of the  outstanding  voting  stock of
Tenant  shall  constitute  an  assignment  under  this  Lease.  If  Tenant  is a
partnership or limited liability company, any change in the identity or majority
ownership of partners or members in Tenant serving as general partner or manager
or owning 50% or more of the outstanding economic interests in such entity shall
constitute an assignment  under this Lease.  The provisions of this Section 17.2
shall not apply if Tenant's stock is listed on a recognized security exchange or
if at least eighty  percent (80%) of its stock is owned by a  corporation  whose
stock is listed on a recognized security exchange.

17.3  Recapture.  In the  alternative to consenting to a proposed  assignment or
sublease, Landlord shall have the right to recapture the Premises, or applicable
portion thereof.  Landlord may exercise such right by notice to Tenant within 20
days after receipt of Tenant's notice. Such recapture shall terminate this Lease
as to the  applicable  portion of the Premises  effective on the effective  date
proposed in Tenant's notice.

17.4 Additional Requirements. If Landlord elects not to recapture and thereafter
elects to gives its consent to the proposed assignment or sublease, (i) Landlord
may  charge  Tenant  a  reasonable  sum to  reimburse  Landlord  for  legal  and
administrative costs incurred in connection with such consent; (ii) in the event
of a sublease,  Landlord  and Tenant  shall share  equally in any rent and other
proceeds paid to Tenant in excess of the Rent to be paid to Landlord  under this
Lease;  and (iii) in the event of an  assignment  or a  sublease,  Tenant  shall
remain  liable to Landlord for the  performance  of all of Tenant's  obligations
under this Lease.

17.5  Assignment  with  Bankruptcy.  If this Lease is  assigned  pursuant to the
provisions of the Revised Bankruptcy Act, 11 U.S.C. Section 101 et seq., any and
all  consideration  paid or payable in connection with such assignment  shall be
Landlord's  exclusive property and paid or delivered to Landlord,  and shall not
constitute the property of tenant or tenant's  estate in bankruptcy.  Any person
or entity to whom the Lease is assigned  pursuant to the Revised  Bankruptcy Act
shall be deemed  automatically to have assumed all of Tenant's obligations under
this Lease.

17.6  Sale.  In the  event  of any  sale of the  Building  or  Property,  or any
assignment  of this  Lease  by  Landlord,  Landlord  shall  be  relieved  of all
liability  under this Lease  arising  out of any act,  occurrence,  or  omission
occurring  after sale or assignment;  and the purchaser or assignee at such sale
or assignment or any subsequent  sale or assignment of Lease,  the Property,  or
Building,  shall be deemed without any further  agreement to have assumed all of
the obligations of the Landlord under this Lease accruing after the date of such
sale or assignment.

<PAGE>

17.7 Binding.  Subject to the provisions of this Section 17, this Lease shall be
binding  upon and inure to the benefit of the parties,  their heirs,  successors
and assigns.

18.      Default.

18.1  Definition of Default.  The occurrence of any one or more of the following
events  shall  constitute  a material  default and breach of the Lease by Tenant
("Default"):

18.1.1   vacation or abandonment of all or any portion of the Premises;

18.1.2  failure by Tenant to make any payment  required  as and when due,  where
such failure shall continue after three days' written notice from Landlord;

18.1.3 failure by Tenant to observe or perform any of the covenants, conditions,
or  provisions of this Lease,  other than the making of any payment,  where such
failure shall continue after 30 days' written notice from Landlord; or

(i) the making by Tenant of any general  assignment or general  arrangement  for
the benefit of creditors;  (ii) the filing by or against Tenant of a petition in
bankruptcy,  including  reorganization or arrangement,  unless, in the case of a
petition filed against Tenant,  the same is dismissed  within 30 days; (iii) the
appointment of a trustee or receiver to take possession of substantially  all of
Tenant's  assets located at the Premises or of Tenant's  interest in this Lease;
(iv) the seizure by any department of any  government or any officer  thereof of
the  business  or  property  of  Tenant;  and (v)  adjudication  that  Tenant is
bankrupt.

 Notwithstanding anything herein to the contrary, if Landlord serves Tenant with
three (3) default notices in any twelve-(12)  month period,  Landlord shall have
the right to terminate this Lease without providing Tenant with any cure period.

18.2 Tenant  Notification.  Tenant shall notify Landlord promptly of any Default
by Tenant (or event or occurrence which, with the passage of time, the giving of
notice,  or both,  would become a Default) that by its nature is not necessarily
known to Landlord.

18.3 Landlord  Default.  Landlord  shall be in default if it fails to observe or
perform any of the  covenants,  conditions,  or provisions of this Lease,  where
such failure shall continue after 30 days' written notice from Tenant; provided,
however,  that if the nature of Landlord's  obligation is such that more than 30
days are required for performance,  Landlord shall not be in default if Landlord
commences  performance  within 30 days  after  Tenant's  notice  and  thereafter
completes such performance diligently and within a reasonable time. Tenant shall
copy  Landlord's  lender  with any such  notice of  default,  if Tenant has been
provided  with the name and  address  of any such  lender.  In no event  shall a
default  by  Landlord  under  this  Lease  give  rise to any  right of Tenant to
terminate  this Lease or withhold or offset the payment of Base  Monthly Rent or
Additional  Rent.  The  obligations  of  Tenant  to pay  Base  Monthly  Rent and
Additional  Rent shall  continue  unaffected in all events  unless  suspended or
terminated pursuant to an express provision of this Lease.

18.4 Rental Concession.  If Tenant was not obligated to pay Base Monthly Rent or
Additional  Rent for any period of time  after the  Commencement  Date  ("Rental
Concession"),  any such  Rental  Concession  shall be  canceled  if Tenant is in
Default at any time during the Term. In the event of such  cancellation,  Tenant
shall be obligated to pay Base Monthly Rent and/or  Additional Rent, as the case
may be, as though there were no Rental Concession in the Lease, and Tenant shall
promptly  on demand  refund to  Landlord  the  amount of any  Rental  Concession
already taken, without regard to whether this Lease is terminated by Landlord as
a result of Tenant's Default.

<PAGE>

19.      Remedies in Default.

19.1 Landlord Remedies. In the event of any Default by Tenant,  Landlord may, at
any time without  waiving or limiting  any other right or remedy,  do any one or
more of the following:  (i) re-enter and take possession of the Premises without
terminating  this Lease,  or (ii)  terminate  this Lease,  and (iii)  pursue any
remedy allowed by law or equity.

19.2 Tenant  Payment of Costs.  Whether  Landlord has elected to terminate  this
Lease or not, Tenant agrees to pay Landlord the cost of recovering possession of
the Premises, the expenses of reletting,  and any other costs or damages arising
out of Tenant's  Default,  including  without  limitation  the costs of removing
persons and property from the  Premises,  the costs of preparing or altering the
Premises for reletting, broker's commissions, and attorneys' fees.

19.3 Termination. In the event Landlord elects to terminate this Lease, Landlord
shall be additionally  entitled to recover from Tenant: (i) the award by a court
having  jurisdiction  thereof of the  amount by which the unpaid  rent and other
charges and adjustments  called for herein for the balance of the term after the
time of such  award  exceeds  the amount of such loss for the same  period  that
Tenant proves could be  reasonably  avoided and (ii) that portion of any leasing
commission  and Tenant  Improvements  costs paid by Landlord  applicable  to the
unexpired term of the Lease.

19.4 No  Termination.  No  re-entry  or taking  possession  of the  Premises  by
Landlord  pursuant to this  Section  19, or  acceptance  of Tenant's  keys to or
surrender  of the Premises  shall be construed as an election to terminate  this
Lease  unless  a  written   notice  of  such   intention  is  given  to  Tenant.
Notwithstanding any reentry or termination, the liability of Tenant for the Rent
shall  continue  for the  balance  of the Term,  and  Tenant  shall make good to
Landlord any  deficiency  arising from  reletting  the Premises at a lesser rent
than the Rent provided for in this Lease.  Tenant shall pay such deficiency each
month as the amount thereof is ascertained by Landlord.

19.5 Landlord Election to Make Tenant Advances.  If Tenant shall fail to pay any
sum of money owed to any party other than  Landlord,  for which Tenant is liable
under this Lease,  or if Tenant  shall fail to perform any other act on its part
to be performed  hereunder,  and such failure continues for a period of ten days
after notice  thereof by Landlord,  Landlord may,  without  waiving or releasing
Tenant from its obligations or waiving or releasing any rights that Landlord may
have,  make any such payment or perform any other act to be made or performed by
Tenant.  All  sums so paid by  Landlord  and  all  necessary  incidental  costs,
together with interest thereon at the rate established in Section 33.8, from the
date of such payment by Landlord,  shall be deemed  Additional Rent and shall be
paid to Landlord on demand.

20. Access. Tenant shall permit Landlord to enter the Premises at all reasonable
times for the purpose of  inspecting,  altering,  and repairing the Premises and
the Building and  ascertaining  compliance  with the provisions of this Lease by
Tenant. The existence or exercise of such right of access shall not be construed
as imposing any obligation on Landlord to inspect, discover or correct or repair
any  condition  in the  Premises  or the  Building.  Landlord  may also show the
Premises to prospective purchasers or tenants at reasonable times, provided that
Landlord shall not materially interfere with Tenant's business operation.

21.      Surrender of Premises; Hold-Over Tenancy.

21.1 Surrender of Premises.  Upon the  expiration or sooner  termination of this
Lease, Tenant shall surrender the Premises and all the additions and alterations
thereto,  and leave the Premises broom clean and in good order and condition and
repair, excluding ordinary wear and tear.

<PAGE>

21.2 Hold-Over Tenancy. If without execution of a new Lease or written extension
Tenant shall hold over after the  expiration or  termination  of the Term,  with
Landlord's written consent,  Tenant shall be deemed to be occupying the Premises
as a Tenant from month to month,  which tenancy may be terminated as provided by
law,  unless the parties agree otherwise at the time of Landlord's  consent.  If
Tenant  shall hold over after  expiration  or  termination  of the Term  without
Landlord's  written consent,  the Base Monthly Rent payable shall be 200% of the
Base Monthly Rent payable in the last month prior to expiration  or  termination
of the Term, and Tenant shall continue to pay Additional  Rent.  During any such
tenancy, Tenant shall continue to be bound by all of the terms,  covenants,  and
conditions of this Lease, insofar as applicable.

22. Compliance with Law. Tenant shall not use the Premises or permit anything to
be done in or  about  the  Premises  which  will in any way  conflict  with  any
applicable law, statute,  ordinance, or governmental rule or regulation,  now or
hereafter in force ("Laws").  Tenant shall at its sole cost and expense promptly
comply  with  all  Laws,   including  without   limitation  the  Americans  with
Disabilities  Act,  and with the  requirements  of any  board of fire  insurance
underwriters or other similar bodies now or hereafter constituted,  relating to,
or affecting the use or occupancy of the Premises.  The judgment of any court of
competent  jurisdiction,  or the  admission  of  Tenant in any  action,  whether
Landlord be a party thereto or not, that Tenant has violated any Laws,  shall be
conclusive of the fact as between Landlord and Tenant.

23. Rules and Regulations.  Tenant shall faithfully  observe and comply with the
rules and regulations  that Landlord shall from time to time promulgate and with
the CC&Rs and any other restrictive covenants and obligations created by private
contracts  which affect the use and operation of the Premises,  Building  Common
Areas  or  Business  Park,  now or  hereafter  in  force.  All  such  rules  and
regulations  shall be  non-discriminatory  and reasonable and shall be uniformly
and  consistently  enforced  against all tenants in the Building.  Additions and
modifications to rules and regulations  shall be binding on Tenant upon delivery
of a copy of them to Tenant. Landlord shall not be responsible to Tenant for the
nonperformance  of any rules or regulations by any other tenants or occupants of
the Building.

24. Parking.  Tenant shall have the right to use, on a first-come,  first served
basis,  in common with other  tenants and occupants of the Building and Business
Park, up to the number of parking stalls  specified in Section 1, located within
the  Building or the Business  Park and which shall be available  for use by all
tenants of the  Business  Park,  their  guests and  invitees,  but which may, at
Landlord's  election,  be  designated  by Landlord,  (which  designated  parking
facilities  Landlord  may  change  at any time and from time to time in its sole
discretion),  subject to the rules and  regulations  and any charges that may be
established  or altered for such parking  facilities  from time to time.  Tenant
shall  comply  with  any and all  private  and  governmentally  imposed  parking
restrictions applicable to the Business Park, including without limitation,  the
requirements  of all  designations  placed on parking stalls within the Business
Park,  such as car pool,  visitor and designation for any tenant of the Business
Park.

25.  Estoppel  Certificates.  Tenant shall  execute,  within ten  business  days
following  Landlord's  request,  a certificate in such reasonable form as may be
required  by  Landlord  or a  prospective  purchaser,  mortgagee  or trust  deed
beneficiary,  or Landlord's  successor after a sale or foreclosure,  certifying:
(i) the Commencement  Date of this Lease,  (ii) that the Lease is unmodified and
in full force and effect, (or if there have been modifications hereto, that this
Lease is in full  force and  effect,  and  stating  the date and  nature of such
modifications);  (iii) that there have been no current defaults under this Lease
by either Landlord or Tenant except as specified in Tenant's statement, (iv) the
dates to which the Base Monthly  Rent,  Additional  Rent and other  charges have
been paid, and (v) any other information  reasonably requested by the requesting
party.  Such  certificate  may be relied  upon by  Landlord  and/or  such  other
requesting  party.  Tenant's  failure to deliver such statement within such time
shall be  conclusive  upon  Tenant  that this Lease is in full force and effect,
without  modification  except to the extent represented by Landlord,  that there
are no uncured defaults in Landlord's performance under this Lease, and that not
more than one month's Rent has been paid in advance. Tenant's failure to deliver
said statement within ten business days of request,  shall  constitute  Tenant's
Default.

26.  Subordination.  Tenant agrees that this Lease shall be  subordinate  to the
lien of any mortgage,  deeds of trust, or ground leases now or hereafter  placed
against  the  Property  or  Building,  and to all  renewals  and  modifications,
supplements,   consolidations,   and  extensions  thereof.  Notwithstanding  the
foregoing,  Landlord reserves the right,  however, to subordinate or cause to be
subordinated  any such  mortgage,  deed of trust or ground  lease to this Lease.
Upon a foreclosure or conveyance in lieu of  foreclosure  under such mortgage or
deed of trust, or a termination of such ground lease, and a demand by Landlord's
successor, Tenant shall attorn to and recognize such successor as Landlord under
this Lease;  provided,  however, that Landlord shall obtain for the Term of this
Lease what is commonly known as a  "nondisturbance"  agreement which is intended
to protect  Tenant's right to possession  under this Lease for so long as Tenant
complies  with the terms of this Lease and which shall be in such  standard form
and substance as the lender or ground lessor at that time typically  provides to
comparable   tenants.   Landlord   shall  use   reasonable   efforts  to  obtain
modifications  to  such  standard   nondisturbance   agreements  as  Tenant  may
reasonably request.  Tenant shall execute and deliver on request and in the form
requested by Landlord,  any instruments  reasonably  necessary or appropriate to
evidence, effect or confirm such subordination.

<PAGE>

27.  Removal of Property.  On  expiration  or other  termination  of this Lease,
Tenant  shall  remove  (i) all  personal  property  of Tenant  on the  Premises,
including  without  limitation all Tenant's  furnishings,  fixtures,  furniture,
fittings,  cabling, wiring and equipment;  (ii) all improvements to the Premises
installed  by or at the expense of Tenant other than such  improvements  as have
become the  property  of  Landlord  under  Section  13; and (iii) at  Landlord's
request,  all  non-standard  or specialty  improvements  made to the Premises by
Landlord or Tenant.  Tenant shall  repair or reimburse  Landlord for the cost of
repairing any damage to the Premises  resulting from the installation or removal
of such  property of Tenant.  All  property of Tenant  remaining on the Premises
after  reentry  or  termination  of this  Lease  shall  conclusively  be  deemed
abandoned  and may be removed by Landlord.  The cost of removal of such property
shall be  reimbursed  by Tenant to  Landlord  upon  demand,  including,  but not
limited to court  costs,  reasonable  attorneys'  fees and storage and  disposal
charges relating to such property. Landlord may store such property of Tenant in
any place selected by Landlord, including but not limited to a public warehouse,
at the expense and risk of the owner thereof, with the right to sell such stored
property  without  notice to Tenant.  The proceeds of such sale shall be applied
first to the cost of such sale, second to the payment of the cost of removal and
storage,  if any, and third to the payment of any other amounts that may then be
due from Tenant to Landlord  under this Lease,  and any balance shall be paid to
Tenant.

28. Personal Property Taxes.  Tenant shall pay prior to delinquency all personal
property  taxes  payable with  respect to all property of Tenant  located on the
Premises or the  Building and promptly  upon request of Landlord  shall  provide
satisfactory  evidence of such  payment.  "Personal  property  taxes" under this
Section 28 shall  include all property  taxes  assessed  against the property of
Tenant, whether assessed as real or personal property.

29. Notices. All notices under this Lease shall be in writing.  Notices shall be
effective (i) when mailed by certified mail,  return receipt requested (ii) when
personally delivered,  or (iii) when sent by fax, in each case to the address or
fax  number of the  receiving  party set forth in Section  1.  Either  party may
change its  address  and fax number for notices by notice to the other from time
to time.

30. Condition of Premises. By taking possession of the Premises,  Tenant accepts
the Premises as being in good, sanitary order, condition and repair, and further
accepts all aspects of the  Premises,  Building,  Property and Business  Park in
their  present  condition,   AS  IS,  including  latent  defects,   without  any
representations or warranties, express or implied, from Landlord.

31.      Hazardous Substances.

31.1 Tenant  Obligations.  Tenant shall not, without first obtaining  Landlord's
prior written approval, generate, release, store, deposit, transport, or dispose
of  (collectively   "Release")  any  hazardous  substances,   sewage,  petroleum
products, hazardous materials, toxic substances or any pollutants or substances,
defined as hazardous or toxic in  applicable  federal,  state and local laws and
regulations ("Hazardous Substances") in, on or about the Premises. In the event,
and only in the event, Landlord approves such Release of Hazardous Substances on
the  Premises,  such  Release  shall  occur  safely and in  compliance  with all
applicable federal, state, and local laws and regulations.

31.2 Tenant Indemnity.  Tenant shall indemnify and defend (with counsel approved
by Landlord) Landlord, and hold Landlord harmless,  from and against any and all
claims,  liabilities,  losses,  damages,  cleanup costs, and expenses (including
reasonable attorneys' fees) arising out of or in any way relating to the Release
by Tenant or any of its agents,  representatives,  employees or invitees, or the
presence of any Hazardous Substances in, on or about the Premises occurring as a
result of or in connection with Tenant's use or occupancy of the Premises at any
time after the Commencement Date.

31.3  Landlord  Inspection.  Landlord  shall have the right from time to time to
enter the Premises,  Building and Property and inspect the same for the presence
of Hazardous  Substances and  compliance  with the provisions of this Section 31
and inspect the Premises,  Building and Property. Landlord may cause tests to be
performed  for Hazardous  Substances  on the Premises from time to time.  Tenant
shall  bear the cost of the first such test in any  calendar  year and any other
such test that occurs upon a reasonable  suspicion by Landlord that there may be
Hazardous  Substances in the Premises in violation of Tenant's obligations under
this Lease.

31.4 Survival. The provisions of this Section 31 shall survive the expiration or
termination of this Lease with respect to any occurrences during the Term.

32. Signs.  Tenant shall not place upon or install in windows or other  openings
or exterior  sides of doors or walls of the  Premises any  symbols,  drapes,  or
other materials  without the written  consent of Landlord.  Tenant shall observe
and comply with the requirements of all Laws applicable to signage.

<PAGE>

33.      General Provisions.

31.1 Attorneys' Fees. In the event Landlord  reasonably requires the services of
any attorney in connection  with any Default or violation by Tenant of the terms
of this Lease or the  exercise by Landlord  of its  remedies  for any Default by
Tenant  under this lease,  or a request by Tenant for  Landlord's  waiver of any
terms of this Lease or  extension  of time to perform or pay any  obligation  of
Tenant under this Lease,  Tenant shall promptly on demand reimburse Landlord for
its reasonable  attorneys'  fees incurred in such instance.  In the event of any
litigation, arbitration or other proceeding (including proceedings in bankruptcy
and probate and on appeal) brought to enforce or interpret or other wise arising
under this Lease, the  substantially  prevailing party therein shall be entitled
to the award of its reasonable  attorneys'  fees,  witness fees, and court costs
incurred therein and in preparation therefor.

31.2  Governing  Law;  Venue.  This Lease shall be governed by and  construed in
accordance  with the laws of the State of Washington  and venue for all disputes
shall be in King County, Washington.

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

31.4 Exhibits;  Addenda. Exhibits and Addenda, if any, affixed to this Lease are
a part of and incorporated into this Lease.

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

31.6 Joint  Obligation.  If there is more than one Tenant under this Lease,  the
obligations hereunder imposed upon Tenants shall be joint and several.

31.7 Keys. Upon expiration or termination of this Lease,  Tenant shall surrender
all keys to the Premises to Landlord at the place then fixed for payment of Rent
and shall inform Landlord of all combination  locks,  safes, and vaults, if any,
in the Premises.

31.8 Late Charges; Interest. Late payment by Tenant to Landlord of Rent or other
sums due under this Lease will cause Landlord to incur costs not contemplated by
this Lease,  the exact amount of which would be  difficult  and  impractical  to
ascertain.  Such costs include  without  limitation  processing  and  accounting
charges  and late  charges  which may be imposed on Landlord by the terms of any
mortgage or trust deed covering the Premises.  Accordingly,  Tenant shall pay to
Landlord  as  Additional  Rent a late  charge  equal  to  five  percent  of such
installment  as liquidated  damages for such late  payment,  other than for time
value  damages.  A $50.00  charge  will be paid by Tenant to  Landlord  for each
returned  check.  In  addition,  any Rent or other  sums due under this Lease to
Landlord  that is not paid when due shall bear interest at the rate per annum of
two percent over the prime rate in effect at Bank of America d/b/a Seattle-First
National Bank,  Seattle Head Office,  on the day such Rent or other sum was due,
which interest shall constitute  Additional Rent under this Lease. The existence
or payment of charges and interest  under this  Section  shall not cure or limit
Landlord's remedies for any Default by Tenant under this Lease.

31.9 Light,  Air, and View.  Landlord does not  guarantee the continued  present
status of light, air, or view in, to or from the Premises.

<PAGE>

31.10 Measurements.  All measurements of the Premises stated in this Lease, even
if  approximations,  shall govern and control over any actual measurement of the
Premises and reflect the inclusion of a load factor for the  Building.  The Rent
provided  in this Lease and  Tenant's  Share shall not be modified or changed by
reason of any measurement or re-measurement of the Premises that may occur after
the date of this Lease,  and is agreed by Landlord and Tenant to constitute  the
negotiated  rent for the Premises.  The foregoing  shall not be deemed to modify
any obligation of Landlord to construct the Premises in accordance with the Work
Letter.

31.11 Name.  Tenant shall not use the name of the Building or Business  Park for
any purpose other than as an address of the business  conducted by the Tenant in
the  Premises.  The name of the  Building  or  Business  Park may at any time be
changed by Landlord.

31.12 Prior Agreements;  Amendments.  This Lease is the full, final and complete
expression of the  agreements of the parties with respect to any matter  covered
or mentioned in this Lease, and no prior agreements or understandings,  promises
or representations,  oral or otherwise,  pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an  agreement  in writing  signed by the  parties or their  respective
successors  in  interest.  This Lease shall not be  effective  or binding on any
party until fully executed by both parties hereto.

31.13 Recordation. Tenant shall not record this Lease or a short form memorandum
of this Lease without the prior written consent of Landlord.

31.14  Liability.  Tenant  agrees to look only to the equity of  Landlord in the
Building  and  Property  and not to  Landlord  personally  with  respect  to any
obligations or payments due or which may become due from Landlord hereunder, and
no other property or assets of Landlord or any partners, officers, directors, of
Landlord shall be personally liable in connection with this Lease..

31.15  Severability.  That any  provision  of this Lease is  invalid,  void,  or
illegal shall in no way affect,  impair,  or invalidate  any other  provision of
this Lease and such other provision shall remain in full force and effect.

31.16    Time.  Time is of the essence of this Lease and each of its provisions.

31.17 Waiver.  No provision of this Lease shall be deemed to have been waived by
Landlord  unless such waiver is in writing signed by Landlord's  duly authorized
representatives. The waiver by either party of any provision of this Lease shall
not be deemed to be a waiver of such  provision or any other  provision,  in any
subsequent  instance.  The acceptance of Rent by Landlord shall not be deemed to
be a waiver of any  preceding  Default  or breach by Tenant  under  this  Lease,
whether  known or unknown to  Landlord,  other than the failure of the Tenant to
pay the particular Rent so accepted.

31.18 No Waste.  Tenant  shall not commit or suffer to be  committed  any waste,
damage or nuisance in or upon the Premises.

31.19  Force  Majeure.  If either  party  shall be  prevented  or  delayed  from
punctually  performing  any  obligation or satisfying  any condition  under this
Lease,  other  than the  payment  of Rent or other  sums due  hereunder,  by any
strike,  lockout,  labor  dispute,  inability  to obtain  labor or  materials or
reasonable  substitutes  therefor,   acts  of  God,  governmental   restriction,
regulation or control,  enemy or hostile  governmental  action, civil commotion,
insurrection,  sabotage,  fire or other casualty,  or any other condition beyond
the reasonable  control of such party,  then the time to perform such obligation
or satisfy such  condition  shall be extended by the delay cause by, such event.
If either party shall,  as a result of any such event, be unable to exercise any
right or option within any time limit provided therefor in this Lease, such time
limit shall be deemed  extended  for a period equal to the duration of the delay
caused by such event.

<PAGE>

31.20 Quiet  Enjoyment.  Provided  Tenant  observes its  obligations  under this
Lease,  its quiet  enjoyment  of the Premises  throughout  the Term shall not be
disturbed.

31.21 Building Planning.  In the event Landlord requires the Premises for use in
conjunction  with  another  suite or for  other  reasonable  connected  with the
Building planning program, upon notifying Tenant in writing, Landlord shall have
the right to move  Tenant to other space in the  Building of which the  Premises
form a part, at Landlord's  sole cost and expense,  and the terms and conditions
of the original Lease shall remain in full force and effect,  save and excepting
that a revised  Exhibit A shall  become part of the Lease and shall  reflect the
location  of the new  space and  Section 1 of this  Lease  shall be  amended  to
include  and state all  correct  data as to the new space.  However,  if the new
space  does not meet with  Tenant's  approval,  Tenant  shall  have the right to
cancel this Lease upon giving  Landlord thirty (30) days' notice within ten (10)
days of  receipt  of  Landlord's  notification.  If Tenant  cancels  this  Lease
pursuant to this  Section,  Tenant  shall  vacate the  Building and the Premises
within  thirty  (30)  days  of  its  delivery  to  Landlord  of  the  notice  of
cancellation.

34.      Authority of Tenant.

34.1  Tenant  as  Corporation.  If  Tenant  is a  corporation,  each  individual
executing  this Lease on behalf of Tenant  represents and warrants that (s)he is
duly  authorized by all  necessary  action of the directors of Tenant to execute
and deliver this Lease on behalf of Tenant,  and that this Lease is binding upon
Tenant in accordance with its terms.

34.2  Tenant  as  Partnership  or LLC.  If Tenant is a  partnership  or  limited
liability  company,  each  individual  executing  this Lease on behalf of Tenant
represents  and  warrants  that  (s)he is duly  authorized  in  accordance  with
Tenant's  partnership  agreement or limited  liability  company agreement by all
necessary action of the partners or members or managers of Tenant to execute and
deliver this Lease on behalf of Tenant, and, and that this Lease is binding upon
Tenant in accordance with its terms.

35.  Financial  Statements.  Tenant shall furnish to Landlord from time to time,
within 30 days of request, Tenant's most recent financial statements,  including
at a minimum a balance  sheet,  income  statement  and  statement  of changes in
financial condition, or the equivalent,  dated as of and for a period ending not
more than one quarter prior to the date of delivery. Such statements shall be in
the form furnished to Tenant's principal lender and/or to Tenant's  shareholders
or  other  owners,  but  at a  minimum  shall  be  reviewed  or  compiled  by an
independent certified public accountant.  Tenant shall accompany such statements
with a certificate of its chief  financial  officer that the  statements  fairly
present the  financial  condition  and results of operations of Tenant as of and
for the period ending on the date of such statements. Landlord shall not request
financial statements under this Section more than once each calendar year.

36.  Commissions.  Any commissions  payable as a result of the execution of this
Lease  shall be paid  pursuant  to a separate  commission  contract.  Each party
represents  and warrants to the other that it has not had dealings with any real
estate  broker  other  than  the  Broker  identified  in  Section  1,  agent  or
salesperson  with respect to this Lease that would cause the other party to have
any liability for any commissions or other compensation to such broker, agent or
salesperson,  and that no such  broker,  agent or  salesperson  has asserted any
claim or right to any such commission or other  compensation.  Such representing
party  shall  defend  and  indemnify  the other  party and hold the other  party
harmless from and against any and all loss, cost, liability,  damage and expense
(including  reasonable  attorneys'  fees)  whatsoever  that may arise out of the
breach of such representation and warranty.

EXECUTED the day and year above written.

LANDLORD:
--------

RAZORE LAND COMPANY

By: /s/ Alicia A. Shaw /s/

Name: Alicia A Shaw
      -------------
Title:
      ---------------------

<PAGE>

TENANT:
-------

PHAGE THERAPEUTICS INTERNATIONAL, INC.,
A FLORIDA CORPORATION

By: /s/ Richard Honour /s/
Name: Richard Honour
      --------------------------
Title: VP Research & Development
      --------------------------

<PAGE>

                                   EXHIBIT A-1
                       [GENERAL DESCRIPTION OF PREMISES]

                          EXHIBIT A-2 LEGAL DESCRIPTION

A portion of the following described property:

    Lots 24 and 25 of Quadrant  Business Park - Bothell as recorded under Volume
    131,  Pages  87-91,  King County  Auditor.  Portion of Sections 4, 5, and 9,
    Township 26 North, Range 5 East, W.M., Recording Certificate No. 8508061034,
    and all areas of common use and benefit in Quadrant Business Park - Bothell.EXHIBIT 10.6
                              CONSULTING AGREEMENT

                              Consulting Agreement

THIS CONSULTING  AGREEMENT,  having an effective date of October 9, 2000 is made
between  Deirdre  (Dee)  E.  Sweeney,   doing  business  as  Sweeney  Regulatory
Consulting (herein referred to as "Consultant"),  18026 NE 133rd Street Redmond,
WA 98052  (SS####-##-####)  and Phage Therapeutics  International Inc., having a
mailing address as 19244-64th Place NE, Kenmore,  WA 98028-3380 (herein referred
to as "Client")

The parties agree as follows:

(1)      Term. The Term of this Agreement shall be from October 16, 2000 through
         October  16,  2001.   Either  party  may   terminated   this  agreement
         immediately with cause, or upon 30 days prior to written notice without
         cause.

(2)      Service to be Provided.  Consultant shall provide regulatory consulting
         services related to FDA requirements for submission of  Investigational
         New Drug  Applications  (INDs)  to  conduct  clinical  studies  used to
         support the development and marketing of Client's products.

(3)      Compensation.  During  the term of this  Agreement,  Client  shall  pay
         Consultant  a fee of $120 per  hour,  for  approximately  40 hours  per
         month,  the total amount payable monthly upon receipt of an invoice for
         services  to be sent to the  attention  of  Richard  Honour,  PhD.  The
         invoices  submitted by  Consultant  shall  provide the date and a brief
         description of services rendered,  and Client shall provide payment for
         approved  services within thirty (30 ) days of receipt of such invoice.
         Consultant  understands that she is an independent  contractor and will
         be  responsible  for her own  withholding  taxes  and  social  security
         deductions.

         In addition, Client shall reimburse Consultant for actual and necessary
         out-of-pocket  expenses incurred (when  pre-approved by Client),  where
         such expenses are related to services  rendered  under this  Agreement,
         such as overnight travel.

(4)      Confidential Information and Property.  Consultant agrees that she will
         not disclose or use any Confidential  Information related to Client, or
         any  property of Client,  except as Client shall direct as described in
         the  "Confidential   Disclosure   Agreement"  signed  by  both  parties
         (Attachment A).

(5)      Entire  Agreement.  This agreement (and its attachment A) expresses the
         entire understanding  between the parties on the subject matter hereof.
         The provisions of this  agreement may not be waived or modified  except
         by a writing signed by the party against whom enforcement is sought. No
         waiver of breach shall constitute a subsequent waiver of any subsequent
         breach,  and if any provisions of this agreement are held to be invalid
         or  unenforeceable,  the  remaining  provisions  shall remain valid and
         enforceable.

                                          Client:
                                          -------
  Sweeney Regulatory Consulting:          Phage Therapeutics International, Inc.

  By   /s/ Deirdre E. Sweeney /s/         By     /s/ Richard C. Honour /s/

  Deirdre E. Sweeney                      Richard C. Honour

  Its      Sole Proprietor                Its     Director

  Date Signed       10-09-00              Date Signed       10-16-00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]