Document:

Exhibit 10.7

                          CONFIDENTIAL LETTER OF INTENT

         The purpose of this Letter of Intent,  dated  effective as of April 18,
2000, is to set forth the main terms upon which TSET, Inc., a Nevada corporation
("TSET"),  may  acquire  100% of the shares of capital  stock of  EdgeAudio.com,
Inc., an Oregon  corporation  ("Edge").  Edge is in the business of, among other
things,  researching,  developing,  designing,  manufacturing,   marketing,  and
selling  via the  Internet  stereo  speakers  and  accessories,  and  owning  or
licensing all intellectual  property rights related thereto  (collectively,  the
"Speaker Business"). TSET and Edge intend to enter into negotiations and prepare
definitive agreements  (collectively,  the "Definitive  Agreements") relating to
such  acquisition as soon as practicable  after the date hereof,  based upon the
main terms summarized  herein,  which Definitive  Agreements are intended to set
forth the rights,  obligations,  undertakings,  and  liabilities  of the parties
thereto. The parties stated intent to proceed expeditiously to complete and sign
this Letter of Intent and the Definitive Agreements is believed in good faith to
be in their  mutual  and  respective  best  interests  and they look  forward to
working together to accomplish their goals.

         Based upon the  foregoing,  the main terms of the proposed  transaction
between TSET and Edge may be summarized as follows:

         A.       ACQUISITION OF EDGE. The parties intend that TSET acquire 100%
                  of the capital  stock of Edge,  with Edge to thereby  become a
                  wholly-owned  subsidiary  of TSET, in exchange for that number
                  of  "investment"  shares of  TSET's  common  stock,  par value
                  $0.001 per share  (the "TSET  Shares")  as are  determined  by
                  reference  to  an   agreed-in-principle   aggregate   earn-out
                  valuation  for  the  Speaker   Business  of  $6,750,000   (the
                  "Aggregate  Valuation"),  divided  by the close  price for the
                  TSET  Shares  as of the date of this  Letter  of  Intent  (the
                  "Share  Price");  provided,  however,  that in the  event  the
                  Definitive  Agreements  have not been  executed by the parties
                  within 10 days of the date of this Letter of Intent, the Share
                  Price shall be the close price for the TSET Shares on the date
                  the  Definitive  Agreements  are  signed  and  delivered  (the
                  "Closing Date").

         B.       INITIAL ALLOCATION OF SHARES AND EARN-OUT.  The parties intend
                  that,  as soon as  practicable  after the Closing  Date,  TSET
                  deliver to Edge's shareholders,  that number of TSET Shares as
                  are determined according to the formula set forth in paragraph
                  A above, for an initial  valuation for the Speaker Business of
                  $3,000,000.  The parties  intend that  additional  TSET Shares
                  relating  to  the   remaining   $3,750,000  of  the  Aggregate
                  Valuation  (the "Earn-out  Valuation")  may be earned in equal
                  annual  installments over the 5-year period next following the
                  Closing  Date  (i.e.,  at the  rate  of  20%  of the  Earn-out
                  Valuation  each year),  assuming Edge achieves its  forecasted
                  revenue  milestones  as  contained in the  financial  forecast
                  provided  to TSET at the  signing of this Letter of Intent for
                  the year in question (collectively,  the "Annual Milestones").
                  If Edge achieves the Annual Milestones  earlier than the lapse
                  of the  year to  which  each  Annual  Milestone  applies,  the

<PAGE>

                  additional  TSET Shares may be issued at that time. The number
                  of such additional  TSET Shares shall be calculated  according
                  to the close price for the TSET Shares on the date such Annual
                  Milestone is achieved. If Edge's board of directors approves a
                  change  of  plan  to  emphasize  business  growth  instead  of
                  maximization  of short-term  earnings,  the Annual  Milestones
                  mentioned in this paragraph B may be adjusted in conformity to
                  a new financial model approved by Edge's board.

         C.       MANAGEMENT.  The parties intend that Edge's existing executive
                  management  have  strategic   decision-making  and  day-to-day
                  management  responsibility  and  operational  control over the
                  Speaker Business and finances,  with such management to at all
                  times  seek  in  good  faith  to  advance  the  best  business
                  interests of Edge and the further  development  and widespread
                  exploitation of the Speaker Business.  The parties intend that
                  TSET  designate  at least  one  director  to  Edge's  board of
                  directors.  The parties intend that Edge's management dedicate
                  sufficient of their time, attention, and efforts to pursue the
                  Speaker  Business  prudently,  efficiently,  and diligently in
                  substantially  the same manner  heretofore  conducted by them,
                  and conduct themselves  according to principles of good faith,
                  sound business judgment, and other high standards of fiduciary
                  care.

         D.       WORKING CAPITAL. The parties intend that TSET provide up to an
                  aggregate of $400,000 in working capital to Edge, which may be
                  drawn  against by Edge from time to time from the Closing Date
                  until  December  31,  2000,  thus  constituting  the  complete
                  financial  obligation  of  TSET to Edge  (except  as TSET  may
                  otherwise  agree in the  future).  The parties  intend that if
                  working capital in excess of the foregoing  amount be required
                  in connection with any acceleration of Edge's business plan or
                  otherwise, members of Edge's management may, subject to TSET's
                  prior written consent,  participate in the provision  thereof,
                  subject to terms therefor to be agreed at that time.

         E.       OPTIONS. As inducement and incentive to Edge's management, the
                  parties intend that Edge adopt and implement  stock option and
                  other  management   incentive  programs   (collectively,   the
                  "Programs")  in the near  future,  with  terms and  conditions
                  relating to participation  therein to be established by Edge's
                  board of directors (such terms and conditions being subject to
                  TSET's  prior  written   approval   before  any  adoption  and
                  implementation  thereof). The parties intend that up to 20% of
                  Edge's  capital stock be reserved for use in  connection  with
                  the Programs.  As additional  inducement to Edge's management,
                  the  parties  intend  that Edge's  management  participate  in
                  Programs  proposed to be adopted and implemented in the future
                  by TSET, subject to terms and conditions of such participation
                  as established by TSET's board of directors.

         F.       MANUFACTURING  FACILITIES.   The  parties  intend  that,  upon
                  request  by Edge's  management,  TSET  exert  good  faith best
                  efforts  to  assist  in  ensuring,   whether  by  contract  or
                  otherwise,  that  manufacturing  facilities  necessary for the
                  conduct of the Speaker  Business will continue to be available
                  to Edge.

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<PAGE>

         G.       FUTURE  EVENTS.  The  parties  intend  that TSET and Edge give
                  consideration  to a  potential  spin-off  of Edge into its own
                  publicly-owned   entity  (through   reverse  merger  or  other
                  appropriate mechanism) or an initial public offering of Edge's
                  capital stock,  at a mutually  agreed time in the future.  The
                  parties  intend  that TSET and its  designees  will retain not
                  less than 30% ownership in Edge's publicly-owned successor, or
                  in Edge in the event of an  initial  public  offering,  as the
                  case may be.

         H.       PRESS  RELEASE.  The  parties  intend  to  collaborate  on the
                  content  of  an  appropriate   press  release   regarding  the
                  transactions contemplated herein, to be at such time as may be
                  determined by TSET in its sole and absolute discretion.

         I.       UNDERTAKING  OF GOOD FAITH.  Realizing that they are unable to
                  anticipate and provide for every  contingency  which may arise
                  during the course of  negotiations  regarding  the  Definitive
                  Agreements and their business relationship, the parties intend
                  that  principles of commercial good faith will govern and that
                  they will at all times seek to advance the best  interests  of
                  Edge, maximize the economic value of the Speaker Business, and
                  amicably resolve any disputes which may arise among them.

         J.       PURPOSE  OF THIS  LETTER OF INTENT.  This  Letter of Intent is
                  intended by the parties as a statement of their  interests and
                  mutual intent to complete the Definitive  Agreements in a form
                  reflective  of  the  business  and  financial  items  for  the
                  purposes  contemplated  herein,  and  shall  not of  itself be
                  deemed to grant or  constitute  any binding,  enforceable,  or
                  exclusive  rights or obligations of the parties hereto,  in or
                  to any  TSET  Shares,  or any  right,  obligation,  offer,  or
                  commitment of any of the parties to enter into the  Definitive
                  Agreements.  The parties intend that all rights,  obligations,
                  or commitments to proceed with any transaction or relationship
                  be contained  only in the Definitive  Agreements  executed and
                  delivered by them.  The parties do not intend that any of them
                  be bound to each other by this  Letter of Intent for  damages,
                  expenses,   failure  to  finally  agree  upon  the  terms  and
                  conditions of the Definitive Agreements,  or in any other way.
                  The parties  intend that the Definitive  Agreements  regarding
                  the transactions outlined in this Letter of Intent be prepared
                  and  signed  by them,  all  acting in good  faith,  as soon as
                  practicable after the date hereof. The parties intend that the
                  Definitive  Agreements  contain  customary terms,  conditions,
                  representations, and warranties including, among other things,
                  disclosures  by  Edge  regarding  the  status  of the  Speaker
                  Business,  ownership of or access to all intellectual property
                  rights  necessary  for the  continued  conduct of the  Speaker
                  Business, consents of third parties, and so forth. The parties
                  intend that each of them will bear their  respective costs and
                  expenses  associated with this Letter of Intent and completion
                  of the  Definitive  Agreements,  and that  any  taxes or other
                  levies   assessed   in   connection   with   any   transaction
                  contemplated  herein or in the Definitive  Agreements be borne
                  and paid solely by the party against which they are assessed.

Page 3                              CONFIDENTIAL
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         K.       DISTRIBUTION OF PROFITS.  The parties intend that, as the sole
                  stockholder of Edge, all profits resulting from the conduct of
                  the Speaker  Business shall belong to TSET and that TSET shall
                  be entitled  to  distribution  thereof  from Edge on a regular
                  basis.  The  parties  intend  that  those  persons  serving as
                  members  of Edge's  board of  directors  vote in favor of such
                  distributions  as may be requested  from time to time by TSET.
                  The parties  intend,  in connection  with any such request for
                  distribution,  that TSET ensure that  sufficient  cash remains
                  allocated to Edge to provide for three  months'  operating and
                  working capital needs, to be applied to the  continuation  and
                  advancement of the Speaker  Business,  funding of Programs and
                  other benefits plans in favor of Edge's  management  according
                  to  the  terms   thereof,   plus   reasonable   reserves   for
                  contingencies or extraordinary  items. The parties intend,  in
                  connection with any such request for  distribution,  that TSET
                  and Edge's  board of  directors  consult to  determine  Edge's
                  reasonable cash needs, as provided above.

         L.       FINDERS.  Neither  TSET nor Edge has  utilized the services of
                  any finder,  directly or  indirectly,  in connection  with any
                  introduction, negotiation, or other proceeding related to this
                  Letter of Intent or the transactions contemplated herein or in
                  the  Definitive  Agreements.  Any finder's or broker's fees or
                  other compensation payable by Edge to any person in connection
                  with  the   transactions   contemplated   herein  and  in  the
                  Definitive  Agreements shall be paid out of the TSET Shares to
                  be received by Edge, any such compensation  being for the sole
                  account of, and payable solely by, Edge.

         M.       PRIORITY  OF THIS LETTER OF INTENT.  The  parties  intend that
                  this   Letter   of   Intent   supersede   any  and  all  prior
                  communications,  understandings,  statements  of  intent,  and
                  agreements  between  them with  respect to the subject  matter
                  hereof.

The  parties'  execution  in the  space  provided  below  shall  evidence  their
acceptance of the terms of this Letter of Intent and that they intend to proceed
as outlined herein.

TSET, Inc.

By:     /s/ Jeffrey D. Wilson
        ---------------------------------------
        Jeffrey D. Wilson
        Chairman and Chief Executive Officer

EdgeAudio.com, Inc.

By:     /s/ Winthrop E. Jeanfreau
        ---------------------------------------
        Winthrop E. Jeanfreau
        Chief Executive Officer

Page 4

<PAGE>Exhibit 10.8

1.    BASIC LEASE TERMS

      a.    DATE OF LEASE:      MAY 3, 2000
                            ----------------------------------------------------

      b.    TENANT:             KRONOS AIR TECHNOLOGIES, A NEVADA CORPORATION
                    ------------------------------------------------------------

            Trade Name:         KRONOS AIR TECHNOLOGIES
                        --------------------------------------------------------

            Address (Leased Premises):  8551 154TH AVENUE NE, REDMOND, WA 98052
                                        ----------------------------------------

            Building/Unit:              B/8551
                            ----------------------------------------------------

            Address (For Notices):      8551 154TH AVENUE NE, REDMOND, WA 98052
                                    --------------------------------------------

      c.    LANDLORD:  TIAA REALTY,  INC., A DELAWARE  CORPORATION
            Address (For Notices): 8449 154TH AVENUE NE, REDMOND, WA 98052
            with a copy to CB Richard Ellis or to such other place as Landlord
            may from time to time designate by notice to Tenant.

      d.    TENANT'S USE OF PREMISES:   OFFICE USE FOR DEVELOPMENT & RESEARCH OF
                                        HVAC TECHNOLOGY
                                        ----------------------------------------

      e.    PREMISES AREA: An agreed     2,342          Rentable Square Feet
                                      -----------------

      f.    PROJECT AREA: An agreed      19,145         Rentable Square Feet
                                     ------------------

      g.    TERM OF LEASE:  This Lease shall commence on June 1, 2000 or such
            earlier  or  later  date  as  is   provided  in  Section  3  (the
            "Commencement  Date"), and shall terminate on the last day of the
            Thirty-sixth  (36th) full calendar  month after the  Commencement
            Date (the "Expiration Date").

      h.    BASE  MONTHLY RENT (months  refer to period  through the  applicable
            full calendar month):

      Commencement Date  -  Month 18                  $2,179.00
      Month 19  -  Month 19                           $0.00
      Month 20  -  Month 22                           $2,179.00
      Month 23  -  Month 23                           $0.00
      Month 24  -  Month 24                           $2,179.00
      Month 25  -  Month 26                           $2,395.00
      Month 27  -  Month 27                           $0.00
      Month 28  -  Month 29                           $2,395.00
      Month 30  -  Month 30                           $0.00
      Month 31  -  Month 31                           $2,395.00
      Month 32  -  Month 32                           $0.00
      Month 33  -  Month 34                           $2,395.00
      Month 35  -  Month 35                           $247.00
      Month 36   -  Month 36                          $2,395.00

      i.    LEASE CONSIDERATION: $13,691.00         ; see provision 30 of lease.
                                 -------------------

      j.    SECURITY DEPOSIT: $2,395.00   NON-REFUNDABLE CLEANING FEE:  $0.00
                              ----------                                ------

      k.    BROKER(S): Tenant's Broker   BILL SPENCER, REAL ESTATE ADVISORY
                                         SERVICES;
                                         ---------------------------------------

<PAGE>

            Landlord's Broker    MOLLY BRUNDAGE/LINDA BRANDT, CB RICHARD ELLIS.
                                 -----------------------------------------------

      1.    GUARANTOR(S):        NA
                            ----------------------------------------------------

      m.    EXHIBITS:
            Exhibit A -The Premises
            Exhibit B - The Project
            Exhibit C - Premises Condition
            Exhibit D - Rules and Regulations
            Exhibit E - Tenant Sign Criteria

                                       2
<PAGE>

2.      PREMISES/COMMON AREAS/PROJECT.

        a.     PREMISES.  Landlord  leases to Tenant the  premises  described in
               Section 1 and in  Exhibit  A (the  "Premises"),  located  in this
               project  described on Exhibit B (the "Project").  By entry on the
               Premises,  Tenant  acknowledges that it has examined the Premises
               and accepts the Premises in their present  condition,  subject to
               any Landlord's  Work required under this Lease.  Landlord's  Work
               shall consist of such work, if any, as is specifically identified
               as Landlord's  responsibility  under Exhibit C. Unless  otherwise
               identified in written notice from Tenant to Landlord prior to the
               dates specified  below,  Landlord's Work shall be deemed approved
               by Tenant in all  respects  on the earlier of (a) the date Tenant
               commences  construction  or installation of any Tenant's Work, or
               (b) the date Tenant begins to move its personal property into the
               Premises.  Tenant represents and warrants that it agrees with the
               square  footage  specified  for the  Premises  and the Project in
               Section 1 and will not hereafter challenge such determination and
               agreement.

        b.     COMMON AREAS.  As used in this Lease,  "Common  Areas" shall mean
               all  portions  of the  Project not leased or demised for lease to
               specific   tenants.   During  the  Lease  Term,  Tenant  and  its
               licensees,  invitees,  customers  and  employees  shall  have the
               non-exclusive  right to use the  public  portions  of the  Common
               Areas, including all parking areas,  landscaped areas, entrances,
               lobbies,  elevators,  stairs,  corridors, and public restrooms in
               common with Landlord,  other Project tenants and their respective
               licensees,  invitees, customers and employees.  Landlord shall at
               all times have  exclusive  control and  management  of the Common
               Areas and no diminution thereof shall be deemed a constructive or
               actual  eviction or entitle Tenant to compensation or a reduction
               or abatement of rent.  Landlord in its  discretion  may increase,
               decrease or change the number,  locations  and  dimensions of any
               Common Areas and other  improvements shown on Exhibit A which are
               not within the Premises.

        c.     PROJECT.  Landlord  reserves the right in its sole  discretion to
               modify or alter the  configuration  or number of buildings in the
               Project, provided only that upon such modification or alteration,
               the Project  Area as set forth in Section  1(f) shall be adjusted
               to reflect such modification or alteration.

3.      TERM. The Commencement Date listed in Section 1 of this Lease represents
        an estimate of the  Commencement  Date. This Lease shall commence on the
        estimated  Commencement  Date if tenant  improvement  work  required  of
        Landlord  pursuant to this Lease  ("Landlord's  Work") is  substantially
        completed  (as that term is used in the  construction  industry) by such
        date, but otherwise the Commencement Date shall be first to occur of the
        following  events (i) the date on which  Landlord  notifies  Tenant that
        Landlord's Work is substantially complete, (ii) the date on which Tenant
        takes possession or commences beneficial  occupancy of the Premises,  or
        (iii) if  substantial  completion of  Landlord's  Work is delayed due to
        Tenant's failure to perform its obligations  under this Lease,  then the
        date determined by Landlord as the date upon which Landlord's Work would
        have been substantially  completed, but for Tenant's failure to perform.
        If this Commencement Date is later than the Section 1 Commencement Date,
        this Lease shall not be void or voidable,  nor shall  Landlord be liable
        to Tenant for any loss or damage  resulting  therefrom.  Landlord  shall
        confirm the  Commencement  Date by written notice to Tenant.  This Lease
        shall be for a term ("Lease Term")  beginning on the  Commencement  Date
        and ending on the Expiration Date,  unless extended or sooner terminated
        in  accordance  with the terms of this  Lease.  All  provisions  of this
        Lease,  other than those  relating to payment of Base  Monthly  Rent and
        Additional  Rent,  shall become effective on the date that Tenant or its

                                       3
<PAGE>
        officers,  agents,  employees  or  contractors  is first  present on the
        Premises for inspection, construction or move in purposes.

4.      RENT

        a. BASE MONTHLY RENT. Tenant shall pay Landlord monthly base rent in the
        initial amount in Section 1 which shall be payable monthly in advance on
        the first day of each and every  calendar  month ("Base  Monthly  Rent")
        provided,  however,  the  first  month's  Base  Monthly  Rent is due and
        payable upon execution of this Lease. If the term of this Lease contains
        any  rental  abatement  period,  Tenant  hereby  agrees  that if  Tenant
        breaches the Lease and fails to cure such breach  within the  applicable
        cure period,  if any, and/or abandons the Premises before the end of the
        Lease term, or if Tenant's right to possession is terminated by Landlord
        because of Tenant's  breach of the Lease,  the rental  abatement  period
        shall be deemed  extinguished,  and there shall be immediately  due from
        Tenant to Landlord,  in addition to any damages  otherwise  due Landlord
        under the terms and conditions of the Lease,  Base Monthly Rent prorated
        for the  entirety of the rental  abatement  period at the  average  Base
        Monthly  Rent for the  Lease,  plus any and all other  charges  (such as
        Expenses) that were abated during such rental abatement period.

             For  purposes  of Section 467 of the  Internal  Revenue  Code,  the
        parties  to this  Lease  hereby  agree to  allocate  the  stated  Rents,
        provided  herein,  to the periods  which  correspond  to the actual Rent
        payments as provided under the terms and conditions of this agreement.

        b.  EXPENSES.  The purpose of this Section 4(b) is to ensure that Tenant
        bears  a  share  of  all  Expenses  related  to  the  use,  maintenance,
        ownership,  repair  or  replacement,   and  insurance  of  the  Project.
        Accordingly,  beginning  on the  date  Tenant  takes  possession  of the
        Premises,  Tenant shall each month pay to Landlord one-twelfth (1/12) of
        Tenant's  Share of  Expenses  related  to the  Project.  As used in this
        Lease,  "Tenant's  Share"  shall mean the Premises  Area,  as defined in
        Section  1(e),  divided by the Project Area, as defined in Section 1(f),
        and "Tenant's  Share of Expenses"  shall mean the total Expenses for the
        Project for the applicable  calendar year  multiplied by Tenant's Share.
        Landlord may specially  allocate  individual  expenses  where and in the
        manner necessary, in Landlord's discretion, to appropriately reflect the
        consumption  of the expense or service.  For example  where some but not
        all premises in the Project have HVAC,  Landlord may reallocate  Project
        Expenses for HVAC to all premises  utilizing HVAC to be apportioned on a
        per square foot basis, or could allocate to each premises utilizing HVAC
        the cost of maintaining  that space's  individual unit. In the event the
        average  occupancy level of the Project for any year is less than ninety
        five  percent  (95%),  the  actual  Expenses  for  such  year  shall  be
        proportionately adjusted to reflect those costs which Landlord estimates
        would have been incurred, had the Project been ninety five percent (95%)
        occupied during such year.

               1)     EXPENSES DEFINED. The term "Expenses" shall mean all costs
               and expenses of the ownership, operation,  maintenance, repair or
               replacement,  and  insurance  of the Project,  including  without
               limitation, the following costs:

                      (a)  All  supplies,   materials,   labor,  equipment,  and
                      utilities   used  in  or  related  to  the  operation  and
                      maintenance of the Project,

                      (b)  All  maintenance,   janitorial,   legal,  accounting,
                      insurance,  service  agreement and  management  (including
                      on-site management office) costs related to the Project;

                                       4
<PAGE>
                      (c) All maintenance, replacement and repair costs relating
                      to the  areas  within or around  the  Project,  including,
                      without limitation,  air conditioning systems,  sidewalks,
                      landscaping,   service  areas,  driveways,  parking  Areas
                      (including  resurfacing  and  restriping  parking  areas),
                      walkways,  building exteriors (including painting),  signs
                      and  directories,  repairing and replacing  roofs,  walls,
                      etc.  These costs may be included  either  based on actual
                      expenditures or the use of an accounting  reserve based on
                      past cost experience for the Project.

                      (d) Amortization (along with reasonable financing charges)
                      of capital  additions or improvements  made to the Project
                      which may be required by any government authority or which
                      will  improve  the  operating  efficiency  of the  Project
                      (provided,  however,  that the amount of such amortization
                      for  improvements  not  mandated by  government  authority
                      shall  not   exceed  in  any  year  the  amount  of  costs
                      reasonably  determined by Landlord in its sole  discretion
                      to have been saved by the  expenditure  either through the
                      reduction or  minimization  of increases  which would have
                      otherwise occurred).

                      (e) Real Property Taxes  including all taxes,  assessments
                      (general  and special)  and other  impositions  or charges
                      which may be taxed, charged,  levied,  assessed or imposed
                      upon all or any  portion of or in  relation to the Project
                      or  any  portion  thereof,  any  leasehold  estate  in the
                      Premises or measured by Rent from the Premises,  including
                      any increase  caused by the transfer,  sale or encumbrance
                      of the  Project or any  portion  thereof.  "Real  Property
                      Taxes"  shall also include any form of  assessment,  levy,
                      penalty,  charge or tax (other than  estate,  inheritance,
                      net income,  or franchise  taxes) imposed by any authority
                      having  a  direct  or  indirect  power  to tax or  charge,
                      including,  without  limitation,  any city, county,  state
                      federal or any improvement or other district, whether such
                      tax is (1)  determined  by the value of the Project or the
                      Rent or other sums payable  under this Lease;  (2) upon or
                      with  respect  to  any  legal  or  equitable  interest  of
                      Landlord in the Project or any part thereof; (3) upon this
                      transaction  or any  document  to which  Tenant is a party
                      creating a transfer in any interest in the Project, (4) in
                      lieu of or as a direct  substitute  in whole or in part of
                      or in addition to any real property  taxes on the Project,
                      (5)  based on any  parking  spaces or  parking  facilities
                      provided  in  the  Project,   (6)  in  consideration   for
                      services,  such as  police  protection,  fire  protection,
                      street,  sidewalk and roadway maintenance,  refuse removal
                      or other services that may be provided by any governmental
                      or quasi-governmental  agency from time to time which were
                      formerly  provided  without  charge or with less charge to
                      property  owners or occupants,  or (7) otherwise  based on
                      the operation of the Project (such as transit,  carpooling
                      or environmental facilities.

                      (f)  Landlord  agrees that  Expenses as defined in Section
                      4(b) shall not include  leasing  commissions;  payments of
                      principal and interest on any mortgages, deeds of trust or
                      other  encumbrances upon the Project;  depreciation of the
                      capital cost of capital  additions or improvements  except
                      as provided at 4(b)(1)(d);  Landlord's executive salaries,
                      management fees in excess of market rates; costs resulting
                      from  defective  design or  construction  of the  Project;
                      costs  incurred  in  connection  with  entering  into  new
                      leases;  or costs of disputes under existing leases. In no
                      event shall Expenses include any charge for which Landlord
                      receives  reimbursement  from  insurance  or from  another
                      Tenant, nor shall any item of Expense be counted more than

                                       5
<PAGE>

                      once,  nor shall  Landlord  collect  more than one hundred
                      percent (100%) of Expenses.

               2) ANNUAL ESTIMATE OF EXPENSES.  When Tenant takes  possession of
               the Premises,  Landlord shall estimate Tenant's Share of Expenses
               for the remainder of the calendar year,  and at the  commencement
               of each calendar year  thereafter,  Landlord shall provide Tenant
               with an estimate of  Tenant's  Share of Expenses  for the ensuing
               calendar year.

               3) MONTHLY  PAYMENT OF  EXPENSES.  Tenant  shall pay to Landlord,
               monthly in advance, as Additional Rent, one-twelfth (1/12) of the
               Annual  Estimate of Tenant's  Share of Expenses  beginning on the
               date  Tenant  takes  possession  of  the  Premises.  As  soon  as
               practical following each calendar year, Landlord shall prepare an
               accounting of actual Expenses  incurred during the prior calendar
               year  and  such  accounting   shall  reflect  Tenant's  Share  of
               Expenses.  If the  Additional  Rent  paid by  Tenant  under  this
               Section 4(b)(3) during the preceding  calendar year was less than
               the actual amount of Tenant's  Share of Expenses,  Landlord shall
               so notify  Tenant and Tenant  shall pay such  amount to  Landlord
               within 30 days of receipt of such  notice.  Such amount  shall be
               deemed to have accrued  during the prior  calendar year and shall
               be due and payable from Tenant even though the term of this Lease
               has expired or this Lease has been  terminated  prior to Tenant's
               receipt of this  notice.  Tenant shall have thirty (30) days from
               receipt of such notice to contest  the amount due,  failure to so
               notify Landlord shall represent final  determination  of Tenant's
               Share of  Expenses.  If Tenant's  payments  were greater than the
               actual  amount,  then  such  overpayment  shall  be  credited  by
               Landlord to Tenant's  Share of  Expenses  due under this  Section
               4(b)(3).

               4) RENT WITHOUT  OFFSET AND LATE CHARGE.  As used herein,  "Rent"
               shall mean all  monetary  sums due from Tenant to  Landlord.  All
               Base  Monthly  Rent shall be paid by Tenant to  Landlord  without
               prior  notice  or  demand  in  advance  on the first day of every
               calendar  month, at the address shown in Section 1, or such other
               place as landlord  may  designate  in writing  from time to time.
               Whether  or not so  designated,  all other  sums due from  Tenant
               under  this  Lease  shall  constitute  Additional  Rent,  payable
               without prior notice or demand when specified in this Lease,  but
               if not specified,  then within ten (10) days of demand.  All Rent
               shall be paid  without any  deduction or offset  whatsoever.  All
               Rent shall be paid in lawful  currency  of the  United  States of
               America.  Proration  of Rent due for any  partial  month shall be
               calculated  by dividing the number of days in the month for which
               Rent is due by the  actual  number  of days  in  that  month  and
               multiplying by the applicable  monthly rate. Tenant  acknowledges
               that late payment by Tenant to Landlord of any Rent or other sums
               due under  this  Lease will  cause  Landlord  to incur  costs not
               contemplated  by this Lease,  the exact amount of such cost being
               extremely  difficult and  impracticable to ascertain.  Such costs
               include,  without  limitation,  processing and accounting charges
               and late  charges that may be imposed on Landlord by the terms of
               any  encumbrance or note secured by the Premises.  Therefore,  if
               any Rent or other sum due from Tenant is not  received  when due,
               Tenant  shall pay to Landlord an  additional  sum equal to 10% of
               such overdue payment.  Landlord and Tenant hereby agree that such
               late  charge  represents  a fair and  reasonable  estimate of the
               costs that Landlord will incur by reason of any such late payment
               and that the late charge is in  addition to any and all  remedies
               available  to  the  Landlord  and  that  the  assessment   and/or
               collection of the late charge shall not be deemed a waiver of any
               other default.  Additionally,  all such  delinquent Rent or other
               sums,  plus this late charge,  shall bear interest at the rate of
               18 percent per annum.  If the  interest  rate  specified  in this
               Lease is higher than the rate permitted by law, the interest rate

                                       6
<PAGE>
               is hereby  decreased to the maximum legal interest rate permitted
               by law. Any payments of any kind returned for insufficient  funds
               will be subject to an additional  handling charge of $25.00,  and
               thereafter,  Landlord  may  require  Tenant  to  pay  all  future
               payments  of Rent or other sums due by money  order or  cashier's
               check.

5.      PREPAID  RENT.  Upon the  execution  of this  Lease,  Tenant  shall,  in
        addition  to the  payment  of the  first  month's  Rent as set  forth in
        Section  4(a),  pay to Landlord  the  prepaid  Rent set forth in Section
        1(i),  and if Tenant is not in default of any  provisions of this Lease,
        such  prepaid  Rent shall be applied  toward Base  Monthly  Rent for the
        months set forth in Section 1(i). Landlord's obligations with respect to
        the  prepaid  Rent  are  those  of a debtor  and not of a  trustee,  and
        Landlord can commingle the prepaid Rent with  Landlord's  general funds.
        Landlord  shall not be  required  to pay Tenant  interest on the prepaid
        Rent.  Landlord  shall  be  entitled  to  immediately  endorse  and cash
        Tenant's prepaid Rent;  however,  such endorsement and cashing shall not
        constitute  Landlord's  acceptance of this Lease.  In the event Landlord
        does not accept this Lease, Landlord shall return said prepaid Rent.

6.      DEPOSIT.  Upon execution of this Lease,  Tenant shall deposit a security
        deposit and a cleaning fee as set forth in Section  1(j) with  Landlord.
        If twice within any 12 month period,  late charges are assessed  against
        Tenant by Landlord,  Landlord may, by written notice to Tenant,  require
        Tenant to pay  Landlord an amount  equal to one month's  Base Rent as an
        increase in the Security  Deposit,  which additional amount shall be due
        within 5 days  after  Tenant's  receipt of the  notice.  If Tenant is in
        default,  Landlord can use the Security  Deposit or any portion of it to
        cure the default or to compensate  Landlord for any damages sustained by
        Landlord  resulting  from Tenant's  default.  Upon demand,  Tenant shall
        immediately  pay to Landlord a sum equal to the portion of the  Security
        Deposit  expended or applied by Landlord to restore the Security Deposit
        to its full amount.  In no event will Tenant have the right to apply any
        part of the  Security  Deposit  to any Rent or other sums due under this
        Lease.  If Landlord  transfers  its interest in the  Premises,  Landlord
        shall  transfer  the  Security  Deposit to its  successor  in  interest,
        whereupon  Landlord shall be  automatically  released from any liability
        for the  return  of the  Security  Deposit.  If, at the end of the Lease
        Term,  Tenant has fully complied with all obligations  under this Lease,
        then the  remaining  Security  Deposit shall be returned to Tenant after
        Landlord  has  verified  that  Tenant has fully  vacated  the  Premises,
        removed  all  of  its  property  and  surrendered  the  Premises  in the
        condition  required  under this Lease;  provided  that Landlord may hold
        back a portion of the  Security  Deposit  until final  determination  of
        Tenant's share of Common Expenses, whereupon a final adjustment shall be
        made and any remaining Security Deposit shall be returned to Tenant. The
        Non-Refundable  Cleaning Fee shall be retained by  Landlord.  Landlord's
        obligations  with respect to the Security  Deposit are those of a debtor
        and not of a trustee,  and Landlord can commingle  the Security  Deposit
        with  Landlord's  general  funds.  Landlord shall not be required to pay
        Tenant  interest  on the  deposit.  Each time the Base  Monthly  Rent is
        increased,  Tenant  shall  deposit  additional  funds with  Landlord sum
        sufficient to increase the Security Deposit to an amount which bears the
        same  relationship  to the  adjusted  Base  Monthly  Rent as the initial
        Security Deposit bore to the initial Base Monthly Rent.

7.      USE OF PREMISES  AND PROJECT  FACILITIES.  Tenant shall use the Premises
        solely for the purposes set forth in Section 1 and for no other  purpose
        whatsoever  without  obtaining  the prior  written  consent of Landlord.
        Tenant  acknowledges that neither Landlord nor any agent of Landlord has
        made any representation or warranty with respect to the Premises or with
        respect  to the  suitability  of the  Premises  or the  Project  for the
        conduct of Tenant's  business,  nor has Landlord agreed to undertake any
        modification,  alteration or improvement to the Premises or the Project,
        except as provided in writing in this Lease.  Tenant  acknowledges  that
        Landlord  may from time to time,  at its sole  discretion,  retake  such
        modifications,  alterations, deletions or improvements to the Project as

                                       7
<PAGE>

        Landlord may deem necessary or desirable, without compensation or notice
        to Tenant.  Tenant  shall  promptly  comply  with all laws,  ordinances,
        orders  and   regulations   affecting  the  Premises  and  the  Project,
        including, without limitation, the rules and regulations attached hereto
        as  Exhibit  D and any  reasonable  modifications  to  these  rules  and
        regulations as Landlord may adopt from time to time. Tenant acknowledges
        that, except for Landlord's  obligations  pursuant to Section 13, Tenant
        is solely responsible for ensuring that the Premises comply with any and
        all governmental  regulations applicable to Tenant's conduct of business
        on  the  Premises,  and  that  Tenant  is  solely  responsible  for  any
        alterations or  improvements  that may be required by such  regulations,
        now  existing  or  hereafter  adopted.  Tenant  shall  not do or  permit
        anything to be done in or about the  Premises or bring or keep  anything
        in the  Premises  that will in any way  increase  the  premiums  paid by
        Landlord  on its  insurance  related to the Project or which will in any
        way  increase the  premiums  for fire or casualty  insurance  carried by
        other  tenants in the Project.  Tenant will not perform any act or carry
        on any practices  that may injure the Premises or the Project;  that may
        be a nuisance or menace to other  tenants in the Project;  or that shall
        in any way  interfere  with the quiet  enjoyment of such other  tenants.
        Tenant shall not use the Premises for sleeping, washing clothes, cooking
        or the  preparation,  manufacture  or mixing of anything that might emit
        any  objectionable  odor,  noises,  vibrations or lights onto such other
        tenants.  If sound  insulation  is required to muffle noise  produced by
        Tenant  on the  Premises,  Tenant  at its own  cost  shall  provide  all
        necessary insulation. Tenant shall not do anything on the Premises which
        will  overload any  existing  parking or service to the  Premises.  Pets
        and/or animals of any type shall not be kept on the Premises.

8.      HAZARDOUS SUBSTANCES; DISRUPTIVE ACTIVITIES

        a.     HAZARDOUS SUBSTANCES.
               ---------------------

               (1)  PRESENCE AND USE OF  HAZARDOUS  SUBSTANCES.  As used in this
Lease,  "Hazardous  Substances"  shall  mean  anything  which may be  harmful to
persons or property,  including,  but not limited to, materials  designated as a
"Hazardous Substance" pursuant to Section 101 of the Comprehensive Environmental
Response,  Compensation and Liability Act of 1980, as now or hereafter  amended,
42  USC  9601,  et  seq.,  or  as a  Hazardous  Substance,  Hazardous  Household
Substance, Moderate Risk Waste or Hazardous Waste under RCW 70.105.010, or which
is  regulated  by any  federal,  state,  or local  law,  statute,  ordinance  or
regulation pertaining to health,  industrial hygiene or the environment.  Tenant
shall not,  without  Landlord's  prior  written  consent,  keep on or around the
Premises,  Common Areas or Building, for use, disposal,  treatment,  generation,
storage or sale, any Hazardous  Substances  except such Hazardous  Substances as
are commonly used in general  administrative office operations.  With respect to
any Hazardous Substance, Tenant shall:

                          (i) Comply promptly,  timely,  and completely with all
governmental requirements for reporting,  keeping, and submitting manifests, and
obtaining and keeping current identification numbers;

                          (ii) Submit to Landlord true and correct copies of all
reports,  manifests,  and  identification  numbers  at the same time as they are
required to be and/or are submitted to the appropriate governmental authorities;

                          (iii)  Within  five  (5) days of  Landlord's  request,
submit written reports to Landlord regarding  Tenant's use, storage,  treatment,
transportation, generation, disposal or sale of Hazardous Substances and provide
evidence  satisfactory  to Landlord of Tenant's  compliance  with the applicable
government regulations;

                                       8
<PAGE>

                          (iv)   Allow   Landlord   or   Landlord's   agent   or
representative to come on the premises at all times to check Tenant's compliance
with all applicable governmental regulations regarding Hazardous Substances;

                          (v) Comply with  minimum  levels,  standards  or other
performance  standards or requirements which may be set forth or established for
certain  Hazardous  Substances (if minimum standards or levels are applicable to
Hazardous Substances present on the Premises,  such levels or standards shall be
established by an on-site inspection by the appropriate governmental authorities
and shall be set forth in an addendum to this Lease); and

                          (vi) Comply with all  applicable  governmental  rules,
regulations  and  requirements  regarding  the  proper  and  lawful  use,  sale,
transportation, generation, treatment, and disposal of Hazardous Substances.

               (2) Any and all costs  incurred by Landlord and  associated  with
Landlord's  monitoring  of Tenant's  compliance  with this Section 8,  including
Landlord's  attorneys' fees and costs, shall be Additional Rent and shall be due
and payable to Landlord immediately upon demand by Landlord.

        b.     CLEANUP COSTS, DEFAULT AND INDEMNIFICATION.
               ------------------------------------------

               (1) Tenant shall be fully and  completely  liable to Landlord for
any and all cleanup costs, and any and all other charges, fees, penalties (civil
and criminal)  imposed by any  governmental  authority  with respect to Tenant's
use, disposal,  transportation,  generation and/or sale of Hazardous Substances,
in or about the Premises, Common Areas, or Building.

               (2)  Tenant  shall  indemnify,   defend  and  save  Landlord  and
Landlord's  lender,  if any,  harmless  from  any and  all of the  costs,  fees,
penalties  and charges  assessed  against or imposed  upon  Landlord (as well as
Landlord's and  Landlord's  lender's  attorneys'  fees and costs) as a result of
Tenant's  use,  disposal,  transportation,  generation  and/or sale of Hazardous
Substances.

               (3) Upon  Tenant's  default  under this Section 8, in addition to
the rights and remedies set forth  elsewhere  in this Lease,  Landlord  shall be
entitled to the following rights and remedies:

                          (i) At  Landlord's  option,  to  terminate  this Lease
immediately; and/or

                          (ii) To recover  any and all damages  associated  with
the default,  including, but not limited to cleanup costs and charges, civil and
criminal  penalties  and fees,  loss of business and sales by Landlord and other
tenants  of the  Building,  any and all  damages  and claims  asserted  by third
parties and Landlord's attorneys' fees and costs.

        c.     DISPOSAL OF WASTE

               (1) Refuse  Disposal.  Tenant shall not keep any trash,  garbage,
waste or other refuse on the Premises  except in sanitary  containers  and shall
regularly and  frequently  remove same from the Premises.  Tenant shall keep all
incinerators, containers or other equipment used for storage or disposal of such
materials in a clean and sanitary condition.

               (2)  Sewage  Disposal.  Tenant  shall  properly  dispose  of  all
sanitary  sewage  and  shall  not use the  sewage  disposal  system  (a) for the
disposal  of  anything  except  sanitary  sewage or (b) in excess of the  lesser
amount (i) reasonably  contemplated  by the uses  permitted  under this Lease or

                                       9
<PAGE>

(ii) permitted by any governmental entity. Tenant shall keep the sewage disposal
system free of all obstructions and in good operating condition.

               (3) Disposal of Other Waste. Tenant shall properly dispose of all
other waste or other matter  delivered to, stored upon,  located upon or within,
used on, or removed  from,  the  Premises in such a manner that it does not, and
will not,  adversely  affect  the (a)  health or  safety  of  persons,  wherever
located, whether on the Premises or elsewhere (b) condition, use or enjoyment of
the Premises or any other real or personal property,  wherever located,  whether
on the Premises or anywhere  else,  or (c)  Premises or any of the  improvements
thereto or thereon  including  buildings,  foundations,  pipes,  utility  lines,
landscaping or parking areas.

        d.     DISRUPTIVE ACTIVITIES. Tenant shall not:
               ---------------------

               (1) Produce,  or permit to be produced,  any intense glare, light
or heat except  within an enclosed or screened area and then only in such manner
that the glare,  light or heat shall not,  outside the  Premises,  be materially
different that the light or heat from other sources outside the Premises;

               (2) Create,  or permit to be created,  any sound  pressure  level
which will interfere with the quiet  enjoyment of any real property  outside the
Premises, or which will create a nuisance or violate any governmental law, rule,
regulation or requirement;

               (3) Create, or permit to be created, any ground vibration that is
materially discernible outside the Premises;

               (4) Transmit,  receive or permit to be  transmitted  or received,
any electromagnetic,  microwave or other radiation which is harmful or hazardous
to any person or property in, or about the project; or

               (5)  Create,  or permit to be created,  any noxious  odor that is
disruptive to the business operations of any other tenant in the Project.

9.      SIGNAGE.  All signing shall comply with rules and  regulations set forth
        by  Landlord  as may be modified  from time to time.  Current  rules and
        regulations  relating to signs are  described on Exhibit E. Tenant shall
        place no  window  covering  (e.g.,  shades,  blinds,  curtains,  drapes,
        screens, or tinting materials),  stickers, signs, lettering,  banners or
        advertising or display  material on or near exterior windows or doors if
        such  materials are visible from the exterior of the  Premises,  without
        Landlord's prior written consent.  Similarly, Tenant may not install any
        alarm boxes,  foil  protection  tape or other security  equipment on the
        Premises  without   Landlord's  prior  written  consent.   Any  material
        violating   this   provision  may  be  destroyed  by  Landlord   without
        compensation to Tenant.

10.     PERSONAL PROPERTY TAXES.  Tenant shall pay before delinquency all taxes,
        assessments, license fees and public charges levied, assessed or imposed
        upon  its  business  operations  as  well as upon  all  trade  fixtures,
        leasehold  improvements,  merchandise and other personal  property in or
        about the Premises.

11.     PARKING.  Landlord grants to Tenant and Tenant's  customers,  suppliers,
        employees and invitees,  a  non-exclusive  license to use the designated
        parking  areas in the Project for the use of motor  vehicles  during the
        term of this  Lease.  Landlord  reserves  the right at any time to grant
        similar  non-exclusive  use to other  tenants,  to promulgate  rules and
        regulations  relating  to  the  use of  such  parking  areas,  including
        reasonable   restrictions  on  parking  by  tenants  and  employees,  to

                                       10
<PAGE>

        designate  specific spaces for the use of any tenant, to make changes in
        the parking layout from time to time, and to establish  reasonable  time
        limits on  parking.  Overnight  parking is  prohibited  and any  vehicle
        violating  this or any other vehicle  regulation  adopted by Landlord is
        subject to removal at the owner's expense.

12.     UTILITIES;   SERVICES.   Landlord   shall   furnish  the  Premises  with
        electricity for office use,  including  lighting and low power usage for
        office  machines  and water for restroom  facilities.  From 7:00 a.m. to
        6:00 p.m. on weekdays and 9:00 a.m. to 1:00 p.m. on Saturday,  excluding
        legal holidays  ("Normal  Business  Hours"),  Landlord shall furnish the
        Premises  with  heat  and air  conditioning  services  as  required,  in
        Landlord's  judgment,  for  the  comfortable  use and  occupancy  of the
        Premises.  Landlord shall provide  further  services (such as janitorial
        services and trash disposal) if Landlord and Tenant  specifically  agree
        to such additional  services and identify such services with specificity
        on Exhibit F hereto. If requested by Tenant, Landlord shall furnish heat
        and air conditioning services at times other than Normal Business Hours,
        and supplements to Exhibit F special services,  and Tenant shall pay for
        such  additional  services as additional  rent at such rates as Landlord
        may establish from time to time.

        The mechanical system is designed to accommodate heating loads generated
        by the types and  quantities of lights and equipment  commonly  found in
        suburban office park general administrative  offices.  Before installing
        lights and equipment in the Premises which in the aggregate  exceed such
        amount (e.g. devoting the Premises to high density computer work station
        operations)  or  require a voltage  other than 120 volts  single  phase,
        Tenant shall  obtain the written  permission  of Landlord.  Landlord may
        refuse to grant such  permission  unless Tenant agrees to pay Landlord's
        costs of installing any  supplementary  air  conditioning  or electrical
        systems required by such equipment or lights. In addition,  Tenant shall
        pay Landlord in advance,  as  additional  rent, on the first day of each
        month during the Term,  the amount  estimated by Landlord as the cost of
        furnishing electricity for the operation of such equipment or lights and
        the  amount   estimated  by  Landlord  as  the  cost  of  operating  and
        maintaining   supplementary  air  conditioning   units  necessitated  by
        Tenant's use of such equipment or lights.  Landlord shall be entitled to
        install and operate, at Tenant's cost, a  monitoring/metering  system in
        the Premises to measure the added  demands on  electricity  and the HVAC
        systems resulting from such equipment and lights, and from Tenant's HVAC
        requirements  during  other than Normal  Business  Hours.  Tenant  shall
        comply with Landlord's  instruction for the use of drapes,  blinds,  and
        thermostats.  Tenant  acknowledges that Landlord shall have sole control
        over the determination of what utility providers serve the Project,  and
        Landlord  shall have no obligation to give access or easement  rights or
        otherwise  allow onto the  Project any utility  providers  except  those
        approved  by Landlord in its  discretion.  If, for any reason,  Landlord
        permits Tenant to purchase  utility  services from a provider other than
        Landlord's designated  compan(ies),  such provider shall be considered a
        contractor of Tenant and Tenant shall indemnify defend and hold Landlord
        harmless  from  such  provider's  acts and  omissions  while  in,  or in
        connection with their services to, the Building or Project in accordance
        with the terms and  conditions of Article 15. In addition,  Tenant shall
        allow Landlord to purchase such utility  service from Tenant's  provider
        at  Tenant's  rate or at such  lower  rate as can be  negotiated  by the
        aggregation of Landlord's tenants' requirements for such utility.

        Except  for the  costs of  above-building  standard  and/or  after-hours
        services,  which  shall be paid  directly  by  Tenant,  the costs of all
        utilities  and  services  provided  pursuant to this Section 12 shall be
        Expenses  allocated  to Tenant  as part of  Tenant's  Share of  Expenses
        pursuant to Section 4(b), above.  Tenant shall pay when due and directly
        to the  service  provider  any  telephone  or  other  services  metered,
        chargeable  or  provided  to the  Premises  and not  charged  as part of
        Tenant's Share of Expenses.

                                       11
<PAGE>

        Landlord  does not warrant that any  utilities or services  will be free
        from interruption including by reason of accident, repairs,  alterations
        or  improvements  and  including  by  reason  of  computer   programming
        weaknesses  known  generally  as the "Year  2000"  problem.  No  utility
        interruption  shall be deemed an eviction or disturbance  of Tenant,  or
        render Landlord liable to Tenant for damages, or relieve Tenant from the
        full and complete  performance of all of Tenant's obligations under this
        Lease.

        Landlord  shall  provide  such  security  for the  Project  as it  deems
        appropriate.  During  other than Normal  Business  Hours,  Landlord  may
        restrict access to the Project in accordance with the Project's security
        system. Landlord shall not be liable to Tenant for injury to its agents,
        employees,  customers  or  invitees,  or  for  losses  due to  theft  or
        burglary, or for damages done by unauthorized persons in the Project.

        Landlord  shall  provide  five keys for the corridor  door  entering the
        Premises, and additional keys at a charge by Landlord on an order signed
        by Tenant.  All such keys shall  remain the  property  of  Landlord.  No
        additional  locks shall be allowed on any door of the  Premises  without
        Landlord's written  permission,  and Tenant shall not make, or permit to
        be made, any duplicate keys,  except those  furnished by Landlord.  Upon
        termination of this Lease,  Tenant shall  surrender to Landlord all keys
        to the Premises.

13.     MAINTENANCE.  Landlord shall maintain, in good condition, the structural
        parts of the Premises, which shall include only the foundations, bearing
        and exterior walls  (excluding  glass),  subflooring and roof (excluding
        skylights),  the unexposed  electrical,  plumbing and sewerage  systems,
        including  those  portions of the systems  lying  outside the  Premises,
        gutters and downspouts on the Building and the heating,  ventilating and
        air conditioning system servicing the Premises;  provided,  however, the
        cost of all such maintenance shall be considered "Expenses" for purposes
        of Section 4(b).  Except as provided  above,  Tenant shall  maintain and
        repair the Premises in good condition,  including,  without  limitation,
        maintaining  and repairing  all walls,  storefronts,  floors,  ceilings,
        interior and exterior doors,  exterior and interior windows and fixtures
        and interior  plumbing as well as damage  caused by Tenant,  its agents,
        employees or invitees.  Upon  expiration or  termination  of this Lease,
        Tenant shall surrender the Premises to Landlord in the same condition as
        existed at the commencement of the term,  except for reasonable wear and
        tear or damage caused by fire or other  casualty for which  Landlord has
        received  all funds  necessary  for  restoration  of the  Premises  from
        insurance proceeds.

14.     ALTERATIONS.  Tenant shall not make any alterations to the Premises,  or
        to the  Project,  including  any  changes to the  existing  landscaping,
        without Landlord's prior written consent.  If Landlord gives its consent
        to alterations, Landlord may post notices in accordance with the laws of
        the state in which the premises are located.  Any alterations made shall
        remain  on and be  surrendered  with the  Premises  upon  expiration  or
        termination  of this Lease,  except that  Landlord  may,  within 30 days
        before or 30 days after  expiration of the term, elect to require Tenant
        to remove any alterations which Tenant may have made to the Premises. If
        Landlord so elects, at its own cost Tenant shall restore the Premises to
        the condition  designated  by Landlord in its election,  before the last
        day of the term or within 30 days after notice of its election is given,
        whichever is later.

        Should  Landlord  consent  in  writing  to  Tenant's  alteration  of the
        Premises,  Tenant shall contract with a contractor  approved by Landlord
        for the construction of such  alterations,  shall secure all appropriate
        governmental  approvals and permits, and shall complete such alterations
        with due diligence in compliance with plans and specifications  approved
        by Landlord.  All such construction shall be performed in a manner which
        will not  interfere  with the quiet  enjoyment  of other  tenants of the

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        Project. Tenant shall pay all costs for such construction and shall keep
        the  Premises  and the Project  free and clear of all  mechanics'  liens
        which may result from  construction by Tenant.  Tenant shall not use any
        portion of the common areas in connection with an alteration without the
        prior written consent of Landlord.

15.     RELEASE AND INDEMNITY.

        a.     INDEMNITY.  Tenant shall  indemnify,  defend (using legal counsel
               acceptable  to  Landlord)  and  save  Landlord  and its  property
               manager harmless from all claims, suits, losses,  damages, fines,
               penalties,   liabilities  and  expenses   (including   Landlord's
               personnel and overhead  costs and attorneys  fees and other costs
               incurred in  connection  with claims,  regardless of whether such
               claims involve  litigation)  resulting from any actual or alleged
               injury  (including  death) of any  person  or from any  actual or
               alleged loss of or damage to, any  property  arising out of or in
               connection  with (i) Tenant's  occupation,  use or improvement of
               the Premises,  or that of its employees,  agents or  contractors,
               (ii) Tenant's breach of its obligations  hereunder,  or (iii) any
               act or omission of Tenant or any subtenant, licensee, assignee or
               concessionaire  of Tenant,  or of any officer,  agent,  employee,
               guest or invitee of Tenant, or of any such entity in or about the
               Premises. Tenant agrees that the foregoing indemnity specifically
               covers actions brought by its own employees.  This indemnity with
               respect to acts or omissions  during the term of this Lease shall
               survive  termination  or expiration of this Lease.  The foregoing
               indemnity is specifically and expressly intended to, constitute a
               waiver  of  Tenant's  immunity  under   Washington's   Industrial
               Insurance  Act, RCW Title 51, to the extent  necessary to provide
               Landlord with a full and complete  indemnity  from claims made by
               Tenant and its employees,  to the extent provided herein.  Tenant
               shall  promptly   notify  Landlord  of  casualties  or  accidents
               occurring  in  or  about  the   Premises.   LANDLORD  AND  TENANT
               ACKNOWLEDGE THAT THE INDEMNIFICATION  PROVISIONS OF SECTION 8 AND
               THIS SECTION 15 WERE  SPECIFICALLY  NEGOTIATED AND AGREED UPON BY
               THEM.

        b.     RELEASE.  Tenant hereby fully and completely  waives and releases
               all  claims  against  Landlord  for any  losses or other  damages
               sustained  by  Tenant  or  any  person  claiming  through  Tenant
               resulting  from  any  accident  or  occurrence  in  or  upon  the
               Premises,  including but not limited to: any defect in or failure
               of Project  equipment;  any failure to make repairs;  any defect,
               failure,  surge in, or  interruption  of  Project  facilities  or
               services; any defect in or failure of Common Areas; broken glass;
               water  leakage;  the collapse of any Building  component;  or any
               act, omission or negligence of co-tenants, licensees or any other
               persons or  occupants  of the  Building,  provided  only that the
               release contained in this Section 15(b) shall not apply to claims
               for actual damage to persons or property (excluding consequential
               damages such as lost profits)  resulting directly from Landlord's
               gross negligence or willful misconduct,  or breach of its express
               obligations  under this Lease which Landlord has not cured within
               a reasonable  time after receipt of written notice of such breach
               from Tenant.  Notwithstanding  any other provision of this Lease,
               and to the fullest extent  permitted by law, Tenant hereby agrees
               that Landlord shall not be liable for injury to Tenant's business
               or any loss of  income  therefrom,  whether  such  injury or loss
               results from conditions arising upon the Premises or the Project,
               or from other sources or places  including,  without  limitation,
               any  interruption  of services and utilities or any casualty,  or
               from any cause whatsoever,  including, Landlord's negligence, and
               regardless  of  whether  the cause of such  injury or loss or the
               means  of  repairing  the same is  inaccessible  to  Landlord  or
               Tenant. Tenant may elect, at its sole cost and expense, to obtain

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               business  interruption  insurance  with respect to such potential
               injury or loss.

        c.     LIMITATION  ON INDEMNITY.  In compliance  with RCW 4.24.115 as in
               effect on the date of this Lease,  all  provisions  of this Lease
               pursuant to which Landlord or Tenant (the "Indemnitor") agrees to
               indemnify  the other (the  "Indemnitee")  against  liability  for
               damages  arising  out of bodily  injury to  Persons  or damage to
               property  relative  to  the  construction,   alteration,  repair,
               addition to, subtraction from, improvement to, or maintenance of,
               any building, road, or other structure,  project, development, or
               improvement attached to real estate,  including the Premises, (i)
               shall not apply to damages  caused by or resulting  from the sole
               negligence of the Indemnitee,  its agents or employees,  and (ii)
               to  the  extent  caused  by  or  resulting  from  the  concurrent
               negligence of (a) the  Indemnitee or the  Indemnitee's  agents or
               employees,  and (b) the Indemnitor or the Indemnitor's  agents or
               employees,  shall  apply only to the  extent of the  Indemnitor's
               negligence;  PROVIDED,  HOWEVER, the limitations on indemnity set
               forth in this Section shall automatically and without further act
               by either  Landlord  or Tenant be deemed  amended so as to remove
               any of the  restrictions  contained  in this  Section  no  longer
               required by then applicable law.

        d.     DEFINITIONS.  As used in any Section  establishing  indemnity  or
               release of  Landlord,  "Landlord"  shall  include  Landlord,  its
               partners,   officers,  agents,  employees  and  contractors,  and
               "Tenant" shall include  Tenant and any person or entity  claiming
               through Tenant.

16.     INSURANCE.  Tenant  shall,  throughout  the term of this  Lease  and any
        renewal hereof, at its own expense,  keep and maintain in full force and
        effect,  a policy of  commercial  general  liability  (occurrence  form)
        insurance,   including   contractual   liability   (including   Tenant's
        indemnification   obligations   under  this  Lease)  insuring   Tenant's
        activities upon, in or about the Premises or the Project, against claims
        of bodily  injury or death or  property  damage or loss with a  combined
        single  limit of not less  than One  Million  Dollars  ($1,000,000)  per
        occurrence and Two Million Dollars  ($2,000,000) in the aggregate,  with
        such  increases  in limits  as  Landlord  may from time to time  require
        consistent  with insurance  requirements of  institutional  landlords in
        similar  projects in the area.  If Tenant  manufactures  on the Premises
        consumer goods using any materials  supplied by Landlord  (including but
        not limited to water  supplied as part of  utilities  to the  Premises),
        Tenant's  insurance shall include  products  liability  insurance in the
        amounts specified for the commercial general liability insurance.

        Tenant shall further,  throughout the term of this Lease and any renewal
        thereof, at its own expense, keep and maintain in full force and effect,
        what is commonly  referred to as  "Special  Cause of Loss" or  "Special"
        coverage  insurance   (excluding   earthquake  and  flood)  on  tenant's
        leasehold  improvements in an amount equal to one hundred percent (100%)
        of the replacement value thereof with a coinsurance waiver. The proceeds
        from any such  policy  shall be used by Tenant  for the  restoration  of
        Tenant's improvements or alterations.  As used in this Lease,  "tenant's
        leasehold  improvements"  shall  mean  any  alterations,   additions  or
        improvements  installed in or about the  Premises by or with  Landlord's
        permission or otherwise permitted by this Lease, whether or not the cost
        thereof was paid for by Tenant.

        All  insurance  required to be provided by Tenant under this Lease:  (a)
        shall be issued by Insurance companies  authorized to do business in the
        state in which the premises  are located  with a financial  rating of at
        least  an A+X  status  as rated in the most  recent  edition  of  Best's
        Insurance Reports;  (b) shall be issued as a primary policy; shall be on
        an occurrence  basis; (c) name Landlord and Landlord's  property manager

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<PAGE>

        as additional insured; and (d) shall contain an endorsement requiring at
        least 30 days prior  written  notice of  cancellation  to  Landlord  and
        Landlord's lender,  before cancellation or change in coverage,  scope or
        amount of any policy. Tenant shall deliver a certificate or copy of such
        policy  together  with  evidence of payment of all  current  premiums to
        Landlord  within 30 days of  execution  of this Lease and at the time of
        all  renewals  thereof.  If  Tenant  fails at any time to  maintain  the
        insurance  required by this Lease, and fails to cure such default within
        five (5) business days of written notice from Landlord then, in addition
        to all other remedies  available  under this Lease and  applicable  law,
        Landlord may purchase such insurance on Tenant's  behalf and the cost of
        such  insurance  shall be  Additional  Rent due  within ten (10) days of
        written invoice from Landlord to Tenant.

        Tenant hereby releases Landlord, and waives its entire right of recovery
        for loss or damage to property  located within or constituting a part or
        all of the Building or the Project to the extent that the loss or damage
        is covered by (a) Tenant's  insurance,  or (b) the  insurance  Tenant is
        required to carry  under this  Article 16,  whichever  is greater.  This
        waiver  applies  whether or not the loss is due to the negligent acts or
        omissions  of  Landlord  or  Tenant,   or  their  respective   officers,
        directors,  employees,  agents,  contractors,  or invitees. Tenant shall
        have its insurers endorse the applicable  insurance  policies to reflect
        the foregoing waiver of claims,  provided however,  that the endorsement
        shall not be required if the applicable  policy of insurance permits the
        named  insured to waive rights of  subrogation  on a blanket  basis,  in
        which case the blanket waiver shall be acceptable

17.     DESTRUCTION.  If during the term,  the Premises or Project are more than
        10% destroyed from any cause, or rendered  inaccessible or unusable from
        any cause, Landlord may, in its sole discretion, terminate this Lease by
        delivery  of  notice  to Tenant  within  30 days of such  event  without
        compensation to Tenant. If in Landlord's estimation, the Premises cannot
        be restored  within 90 days  following  such  destruction,  the Landlord
        shall notify Tenant and Tenant may  terminate  this Lease by delivery of
        notice to Landlord  within 30 days of receipt of Landlord's  notice.  If
        neither  Landlord nor Tenant  terminates  this Lease as provided  above,
        then Landlord shall commence to restore the Premises in compliance  with
        then  existing  laws  and  shall  complete  such  restoration  with  due
        diligence.  In such  event,  this Lease  shall  remain in full force and
        effect,  but  there  shall  be an  abatement  of Base  Monthly  Rent and
        Tenant's Share of Expenses  between the date of destruction and the date
        of completion of restoration,  based on the extent to which  destruction
        interferes with Tenant's use of the Premises.

18.     CONDEMNATION.

        a.     TAKING. If all of the Premises are taken by Eminent Domain,  this
               Lease shall terminate as of the date Tenant is required to vacate
               the  Premises and all Base and  Additional  Rent shall be paid to
               that date. The term "Eminent  Domain" shall include the taking or
               damaging of property  by,  through or under any  governmental  or
               statutory  authority,  and any  purchase or  acquisition  in lieu
               thereof,  whether the damaging or taking is by  government or any
               other  person.  If, in the  reasonable  judgment of  Landlord,  a
               taking of any part of the Premises by Eminent  Domain renders the
               remainder  thereof  unusable  for the  business of Tenant (or the
               cost  of  restoration   of  the  Premises  is  not   commercially
               reasonable),  the Lease may,  at the option of either  party,  be
               terminated  by written  notice  given to the other party not more
               than thirty (30) days after  Landlord gives Tenant written notice
               of the taking,  and such termination shall be effective as of the
               date  when  Tenant  is  required  to vacate  the  portion  of the
               Premises so taken.  If this Lease is so terminated,  all Base and
               Additional  Rent  shall  be  paid  to the  date  of  termination.
               Whenever any portion of the  Premises is taken by Eminent  Domain
               and this Lease is not  terminated,  Landlord shall at its expense

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<PAGE>

               proceed with all reasonable dispatch to restore, to the extent of
               available  proceeds and to the extent it is reasonably prudent to
               do so, the remainder of the Premises to the  condition  they were
               in  immediately  prior to such  taking,  and Tenant  shall at its
               expense  proceed  with all  reasonable  dispatch  to restore  its
               personal property and all improvements made by it to the Premises
               to the same  condition  they  were in  immediately  prior to such
               taking.  The Base and Additional Rent payable  hereunder shall be
               reduced from the date Tenant is required to partially  vacate the
               Premises  in the same  proportion  that the  Rentable  Area taken
               bears to the total Rentable Area of the Premises prior to taking.

        b.     AWARD.  Landlord reserves all right to the entire damage award or
               payment for any taking by Eminent  Domain,  and Tenant waives all
               claim whatsoever  against Landlord for damages for termination of
               its leasehold  interest in the Premises or for interference  with
               its  business.  Tenant  hereby grants and assigns to Landlord any
               right  Tenant may now have or  hereafter  acquire to such damages
               and agrees to execute and deliver  such  further  instruments  of
               assignment  as  Landlord  may from time to time  request.  Tenant
               shall,  however,  have the  right to  claim  from the  condemning
               authority all  compensation  that may be recoverable by Tenant on
               account  of any  loss  incurred  by  Tenant  in  moving  Tenant's
               merchandise,  furniture, trade fixtures and equipment,  provided,
               however,  that  Tenant  may claim such  damages  only if they are
               awarded  separately in the eminent domain  proceeding and not out
               of or as part of Landlord's damages.

19.     ASSIGNMENT OR SUBLEASE. Tenant shall not assign or encumber its interest
        in  this  Lease  or the  Premises  or  sublease  all or any  part of the
        Premises or allow any other person or entity (except Tenant's authorized
        representatives, employees, invitees, or guests) to occupy or use all or
        any part of the Premises  without  first  obtaining  Landlord's  consent
        which shall not be unreasonably  withheld for tenants meeting Landlord's
        then-existing   Project  standards  for  creditworthiness  and  use.  No
        assignment  or sublease  shall  release  Tenant from the  obligation  to
        perform all obligations under this Lease. Any assignment, encumbrance or
        sublease  without  Landlord's  written  consent shall be voidable and at
        Landlord's  election,  shall  constitute  a  default.  If  Tenant  is  a
        partnership,  a  withdrawal  or  change,  voluntary,  involuntary  or by
        operation of law of any partner,  or the dissolution of the partnership,
        shall be deemed a voluntary assignment.  If Tenant consists of more than
        one person,  a purported  assignment,  voluntary  or  involuntary  or by
        operation  of law  from  one  person  to the  other  shall  be  deemed a
        voluntary  assignment.  If Tenant  is a  corporation,  any  dissolution,
        merger,  consolidation  or other  reorganization  of Tenant,  or sale or
        other  transfer of a  controlling  percentage  of the  capital  stock of
        Tenant, or the sale of at least 25% of the value of the assets of Tenant
        shall  be  deemed  a  voluntary  assignment.   The  phrase  "controlling
        percentage"  means  ownership of and right to vote stock  possessing  at
        least 25% of the total combined  voting power of all classes of Tenant's
        capital stock issued,  outstanding  and entitled to vote for election of
        directors.  This Section 19 shall not apply to corporations the stock of
        which is  traded  through  an  exchange  or over the  counter.  All rent
        received by Tenant from its  subtenants in excess of the Rent payable by
        Tenant to Landlord  under this Lease shall be paid to  Landlord,  or any
        sums  to be  paid by an  assignee  to  Tenant  in  consideration  of the
        assignment of this Lease shall be paid to Landlord.  If Tenant  requests
        Landlord to consent to a proposed assignment or subletting, Tenant shall
        pay to Landlord,  whether or not consent is  ultimately  given,  $100 or
        Landlord's  reasonable  attorney's fees incurred in connection with such
        request, whichever is greater.

        No interest of Tenant in this Lease shall be assignable  by  involuntary
        assignment  through operation of law (including  without  limitation the
        transfer of this Lease by testacy or  intestacy).  Each of the following
        acts shall be considered an involuntary assignment:  (a) if Tenant is or
        becomes  bankrupt or insolvent,  makes an assignment  for the benefit of
        creditors,  or institutes  proceedings under the Bankruptcy Act in which

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        Tenant is the  bankrupt;  or if Tenant is a  partnership  or consists of
        more than one person or entity,  if any  partner of the  partnership  or
        other person or entity is or becomes bankrupt or insolvent,  or makes an
        assignment for the benefit of creditors;  or (b) if a writ of attachment
        or execution  is levied on this Lease;  or (c) if in any  proceeding  or
        action  to which  Tenant  is a  party,  a  receiver  is  appointed  with
        authority to take possession of the Premises. An involuntary  assignment
        shall  constitute a default by Tenant and Landlord  shall have the right
        to elect to terminate this Lease,  in which case this Lease shall not be
        treated as an asset of Tenant.

20.     DEFAULT.  The  occurrence  of any of the  following  shall  constitute a
        default by Tenant:  (a) a failure to pay Rent or other  charge when due;
        (b)  abandonment  and  vacation of the  Premises  (failure to occupy and
        operate the  Premises  for ten  consecutive  days shall be  conclusively
        deemed an abandonment and vacation); or (c) failure to perform any other
        provision of this Lease.

21.     LANDLORD'S  REMEDIES.  Landlord  shall have the  following  remedies  if
        Tenant  is in  default.  (These  remedies  are not  exclusive;  they are
        cumulative and in addition to any remedies now or later allowed by law):
        Landlord may terminate  Tenant's  right to possession of the Premises at
        any time.  No act by Landlord  other than giving  notice to Tenant shall
        terminate  this  Lease.  Acts  of  maintenance,  efforts  to  relet  the
        Premises,  or the appointment of a receiver on Landlord's  initiative to
        protect  Landlord's  interest  under this Lease shall not  constitute  a
        termination  of  Tenant's  right  to  possession.  Upon  termination  of
        Tenant's  right to  possession,  Landlord  has the right to recover from
        Tenant:  (1) the worth of the  unpaid  Rent that had been  earned at the
        time of termination  of Tenant's  right to possession;  (2) the worth of
        the amount of the unpaid Rent that would have been earned after the date
        of  termination  of Tenant's  right to  possession  less the amount that
        Tenant proves  Landlord should be able to earn during such period net of
        all releasing costs; (3) any other amount, including but not limited to,
        expenses incurred to relet the Premises,  court, attorney and collection
        costs,  necessary to  compensate  Landlord for all  detriment  caused by
        Tenant's default. "The Worth," as used for Item (1) in this Paragraph 21
        is to be  computed  by  allowing  interest at the rate of 18 percent per
        annum.  If the interest rate  specified in this Lease is higher than the
        rate  permitted  by law, the  interest  rate is hereby  decreased to the
        maximum legal  interest  rate  permitted by law. "The Worth" as used for
        Item (2) in this  Paragraph  21 is to be  computed  by  discounting  the
        amount at the discount rate of the Federal Reserve Bank of San Francisco
        at the time of termination of Tenant's right of possession.

22.     ENTRY ON PREMISES.  Landlord and its  authorized  representatives  shall
        have the right to enter the Premises at all reasonable  times for any of
        the  following  purposes:  (a) to determine  whether the Premises are in
        good  condition  and whether  Tenant is complying  with its  obligations
        under this Lease;  (b) to do any necessary  maintenance  and to make any
        restoration  to the Premises or the Project that  Landlord has the right
        or  obligation  to  perform;  (c) to post "for  sale"  signs at any time
        during the term, to post "for rent" or "for lease" signs during the last
        90 days of the term,  or during any period  while  Tenant is in default;
        (d) to show the Premises to prospective brokers, agents, buyers, tenants
        or persons interested in leasing or purchasing the Premises, at any time
        during the term;  or (e) to repair,  maintain or improve the Project and
        to erect  scaffolding  and  protective  barricades  around and about the
        Premises  but not so as to prevent  entry to the  Premises and to do any
        other  act or thing  necessary  for the  safety or  preservation  of the
        Premises or the Project.  Landlord shall not be liable in any manner for
        any  inconvenience,  disturbance,  loss of  business,  nuisance or other
        damage arising out of Landlord's  entry onto the Premises as provided in
        this  Section  22.  Tenant  shall not be  entitled  to an  abatement  or
        reduction  of Rent if  Landlord  exercises  any rights  reserved in this
        Section 22.  Landlord  shall  conduct his  activities on the Premises as
        provided  herein  in a  commercially  reasonable  manner  so as to limit
        inconvenience,  annoyance or disturbance to Tenant to the maximum extent
        practicable.  For each of these  purposes,  Landlord  shall at all times
        have and retain a key with  which to unlock  all the doors in,  upon and

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        about the Premises,  excluding  Tenant's vaults and safes.  Tenant shall
        not alter any lock or  install a new or  additional  lock or bolt on any
        door of the Premises  without  prior  written  consent of  Landlord.  If
        Landlord gives its consent, Tenant shall furnish Landlord with a key for
        any such lock.

23.     SUBORDINATION; ESTOPPEL CERTIFICATE.

               a.     SUBORDINATION.  Without the  necessity  of any  additional
                      document  being  executed  by Tenant  for the  purpose  of
                      effecting a subordination, and at the election of Landlord
                      or any  mortgagee  or any  beneficiary  of a Deed of Trust
                      with a lien  on the  Project  or any  ground  lessor  with
                      respect to the  Project,  this Lease  shall be subject and
                      subordinate  at all  times  to (a) all  ground  leases  or
                      underlying  leases  which  may now exist or  hereafter  be
                      executed  affecting  the Project,  and (b) the lien of any
                      mortgage or deed of trust which may now exist or hereafter
                      be  executed in any amount for which the  Project,  ground
                      leases or underlying  leases,  or  Landlord's  interest or
                      estate in any of said items is specified  as security.  In
                      the  event  that  any  ground  lease or  underlying  lease
                      terminates for any reason or any mortgage or Deed of Trust
                      is foreclosed or a conveyance  in lieu of  foreclosure  is
                      made for any reason,  Tenant  shall,  notwithstanding  any
                      subordination,  attorn  to and  become  the  Tenant of the
                      successor in interest to  Landlord,  at the option of such
                      successor  in  interest.  Tenant  covenants  and agrees to
                      execute and  deliver,  upon demand by Landlord  and in the
                      form  requested  by  Landlord  any  additional   documents
                      evidencing  the  priority or  subordination  of this Lease
                      with respect to any such ground lease or underlying leases
                      or the lien of any such mortgage or Deed of Trust.  Tenant
                      hereby irrevocably  appoints Landlord as  attorney-in-fact
                      of Tenant to execute, deliver and record any such document
                      in the name and on behalf of Tenant.

               b.     ESTOPPEL  CERTIFICATE.  Tenant  shall,  within  10 days of
                      demand,   execute   and  deliver  to  Landlord  a  written
                      statement   certifying:   (i)  the  commencement  and  the
                      expiration  date of the Term; (ii) the amount of Base Rent
                      and the date to which it has been  paid;  (iii)  that this
                      Lease  is in full  force  and  effect  and  has  not  been
                      assigned or amended in any way (or specifying the date and
                      terms of each  agreement so affecting this Lease) and that
                      no part of the  Premises has been sublet (or to the extent
                      such is not the case, a copy of any  sublease);  (iv) that
                      Landlord is not in default under this Lease (or if such is
                      not the case, the extent and nature of such default);  (v)
                      on the date of such  certification,  there are no existing
                      defenses or claims which  Tenant has against  Landlord (or
                      if such is not the case,  the  extent  and  nature of such
                      defenses  or  claims);  (vi) the  amount  of the  Security
                      Deposit  held by  Landlord;  and (vii)  any other  fact or
                      representation   that  a  mortgagee   or   purchaser   may
                      reasonably request. It is intended that any such statement
                      shall be binding  upon  Tenant and may be relied upon by a
                      prospective  purchaser  or  mortgagee.  If Tenant fails to
                      respond within 10 days of receipt of a written  request by
                      Landlord  therefor,  (a)  Tenant  shall be  deemed to have
                      given   a   certificate   as   above   provided,   without
                      modification,  and  shall be  conclusively  deemed to have
                      admitted  the  accuracy  of any  information  supplied  by
                      Landlord to a prospective purchaser or mortgagee,  and (b)
                      Landlord  may impose a fee of $100 per day for each day of
                      delay in  providing  the  statement by Tenant after the 10
                      day period.

                                       18
<PAGE>

        24.    NOTICE. Any notice, demand or request required hereunder shall be
               given in writing to the party's  facsimile  number or address set
               forth in  Section 1 hereof  by any of the  following  means:  (a)
               personal service; (b) electronic communication, whether by telex,
               telegram or facsimile with electronic confirmation; (c) overnight
               courier; or (d) registered or certified, first class mail, return
               receipt requested. Such addresses may be changed by notice to the
               other  parties  given in the same manner as above  provided.  Any
               notice,  demand or request sent pursuant to either subsection (a)
               or (b) hereof shall be deemed received upon such personal service
               or upon dispatch by electronic means with electronic confirmation
               of  receipt.  Any  notice,  demand or request  sent  pursuant  to
               subsection  (c) hereof  shall be deemed  received on the business
               day immediately following deposit with the overnight courier and,
               if sent  pursuant to  subsection  (d),  shall be deemed  received
               forty-eight (48) hours following deposit in the U.S. mail. Tenant
               hereby  appoints  as its  agent to  receive  the  service  of all
               dispossessory or distraint proceedings and notices thereunder the
               person in charge of or occupying  the Premises at the time,  and,
               if no person shall be in charge of occupying the same,  then such
               service may be made by attaching the same on the main entrance of
               the Premises.

        25.    WAIVER.  No delay or  omission  in the  exercise  of any right or
               remedy  by  Landlord  shall  impair  such  right or  remedy or be
               construed as a waiver.  No act or conduct of Landlord,  including
               without limitation, acceptance of the keys to the Premises, shall
               constitute  an  acceptance  of the  surrender  of the Premises by
               Tenant  before the  expiration of the term.  Only written  notice
               from  Landlord  to  Tenant  shall  constitute  acceptance  of the
               surrender  of the  Premises  and  accomplish  termination  of the
               Lease.  Landlord's  consent to or  approval  of any act by Tenant
               requiring  Landlord's  consent or approval shall not be deemed to
               waive or render unnecessary  Landlord's consent to or approval of
               any  subsequent  act by  Tenant.  Any waiver by  Landlord  of any
               default must be in writing and shall not be a waiver of any other
               default  concerning the same or any other provision of the Lease.
               TENANT  SPECIFICALLY  ACKNOWLEDGES  AND AGREES THAT, WHERE TENANT
               HAS RECEIVED A NOTICE TO CURE DEFAULT (WHETHER RENT OR NON-RENT),
               NO  ACCEPTANCE  BY  LANDLORD  OF RENT SHALL BE DEEMED A WAIVER OF
               SUCH NOTICE, AND, INCLUDING BUT WITHOUT LIMITATION, NO ACCEPTANCE
               BY LANDLORD OF PARTIAL  RENT SHALL BE DEEMED TO WAIVE OR CURE ANY
               RENT DEFAULT.  LANDLORD MAY, IN ITS DISCRETION,  AFTER RECEIPT OF
               PARTIAL  PAYMENT OF RENT,  REFUND SAME AND  CONTINUE  ANY PENDING
               ACTION TO COLLECT  THE FULL  AMOUNT DUE, OR MAY MODIFY ITS DEMAND
               TO THE  UNPAID  PORTION.  IN EITHER  EVENT THE  DEFAULT  SHALL BE
               DEEMED UNCURED UNTIL THE FULL AMOUNT IS PAID IN GOOD FUNDS.

        26.    SURRENDER OF PREMISES; HOLDING OVER. Upon expiration of the term,
               Tenant  shall  surrender  to Landlord the Premises and all Tenant
               improvements  and  alterations  in  good  condition,  except  for
               ordinary wear and tear and alterations Tenant has the right or is
               obligated  to remove under the  provisions  of Section 14 herein.
               Tenant  shall  remove all personal  property  including,  without
               limitation,  all data and phone  wires,  wallpaper,  paneling and
               other  decorative  improvements or fixtures and shall perform all
               restoration  made necessary by the removal of any  alterations or
               Tenant's  personal  property  before the  expiration of the term,
               including  for  example,  restoring  all wall  surfaces  to their
               condition prior to the  commencement of this Lease.  Landlord can
               elect to retain or  dispose of in any  manner  Tenant's  personal
               property  not removed  from the  Premises by Tenant  prior to the
               expiration of the term. Tenant waives all claims against Landlord
               for any damage to Tenant  resulting from Landlord's  retention or
               disposition of Tenant's personal property. Tenant shall be liable

                                       19
<PAGE>

               to Landlord for Landlord's cost for storage,  removal or disposal
               of Tenant's personal property.

               If Tenant, with Landlord's consent,  remains in possession of the
               Premises  after  expiration or  termination of the term, or after
               the date in any notice  given by Landlord  to Tenant  terminating
               this Lease,  such  possession  by Tenant  shall be deemed to be a
               month-to-month  tenancy  terminable as provided under  Washington
               law, by either party. All provisions of this Lease,  except those
               pertaining  to term and Rent,  shall apply to the  month-to-month
               tenancy.  During any holdover term, Tenant shall pay Base Monthly
               Rent in an amount equal to 150% of Base Monthly Rent for the last
               full calendar month during the regular term plus 100% of Tenant's
               share of Expenses pursuant to Section 4(b)(3). If Tenant fails to
               surrender   possession  of  the  Premises  upon   termination  or
               expiration of this Lease and if Tenant does not obtain Landlord's
               written  consent to  Tenant's  continued  occupancy,  then Tenant
               shall be deemed a trespasser  and shall be liable to Landlord for
               all damages  sustained by Landlord as a result thereof,  together
               with Base Rate at a rate double the Latest Rate.

        27.    LIMITATION  OF  LANDLORD'S  LIABILITY.  In  consideration  of the
               benefits accruing hereunder,  Tenant agrees that, in the event of
               any actual or alleged failure, breach or default of this Lease by
               Landlord,  Landlord's liability under this Lease shall be limited
               to,  and  Tenant  shall  look only to  Landlord  interest  in the
               Project and the rents and proceeds thereof.

        28.    BUILDING  PLANNING.  If Landlord requires the Premises for use in
               conjunction  with another  suite or for other  reasons  connected
               with the  Project  planning  program,  upon  notifying  Tenant in
               writing,  Landlord  shall have the right to move  Tenant to other
               space  in the  Project  that is  substantially  the same in size,
               configuration  and  tenant  improvements,  such  move  (including
               out-of-pocket  ancillary  costs such as reprinting of stationary)
               to be at Landlord's  sole cost and expense.  Upon such move,  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 this 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.

        29.    MISCELLANEOUS PROVISIONS.

               a.     TIME OF ESSENCE.  Time is of the essence of each provision
                      of this Lease.

               b.     SUCCESSOR. This Lease shall be binding on and inure to the
                      benefit of the  parties  and their  successors,  except as
                      provided in Section 19 herein.

               c.     LANDLORD'S CONSENT. Any consent required by Landlord under
                      this Lease must be granted in writing  and may be withheld
                      or  conditioned  by  Landlord  in its  sole  and  absolute
                      discretion.

               d.     COMMISSIONS.  Each  party  represents  that it has not had
                      dealings  with any real  estate  broker,  finder  or other
                      person with  respect to this Lease in any  manner,  except
                      for the  broker(s)  identified  in Section 1, who shall be
                      compensated  by Landlord.  Landlord  and Tenant  recognize
                      that  it  is  possible  that  they  may   hereafter   make
                      additional   agreements  regarding  further  extension  or
                      renewal  of this Lease or a new lease or leases for all or

                                       20
<PAGE>

                      one or more parts of the  Premises  or other  space in the
                      Project  for  a  term  or  terms   commencing   after  the
                      Commencement  Date  of this  Lease.  Landlord  and  Tenant
                      recognize that it is also possible that they may hereafter
                      modify this Lease to add additional space or to substitute
                      space  as part of the  Premises.  If any  such  additional
                      agreements,  new leases or modifications to this Lease are
                      made,  Landlord  shall not have any  obligation to pay any
                      compensation  to any real  estate  broker  or to any other
                      third  person  engaged  by Tenant to  render  services  to
                      Tenant  in  connection  with   negotiating  such  matters,
                      regardless of whether under the circumstances  such person
                      is or is not regarded by the law as an agent of Landlord.

               e.     OTHER  CHARGES.  If either party  commences any litigation
                      against  the other  patty or files an appeal of a decision
                      arising  out  of or in  connection  with  the  Lease,  the
                      prevailing  party shall be  entitled  to recover  from the
                      other party reasonable  attorney's fees and costs of suit.
                      If  Landlord  employs  a  collection   agency  to  recover
                      delinquent  charges,  Tenant agrees to pay all  collection
                      agency and attorneys' fees charged to Landlord in addition
                      to Rent,  late  charges,  interest  and other sums payable
                      under  this  Lease.  Tenant  shall  pay a charge of $75 to
                      Landlord for preparation of a demand for delinquent Rent.

               f.     FORCE  MAJEURE.  Landlord  shall not be deemed in  default
                      hereof nor liable for damages  arising from its failure to
                      perform its duties or obligations hereunder if such is due
                      to causes beyond its reasonable  control,  including,  but
                      not  limited  to,  acts of God,  acts of civil or military
                      authorities,   fires,  floods,  windstorms,   earthquakes,
                      strikes or labor disturbances,  civil commotion, delays in
                      transportation, governmental delays or war.

               g.     RULES AND REGULATIONS. Tenant shall faithfully observe and
                      comply with the "Rules and  Regulations",  a copy of which
                      is   attached    hereto,    and   all    reasonable    and
                      nondiscriminatory   modifications  thereof  and  additions
                      thereto  from time to time put into  effect  by  Landlord.
                      Landlord  shall  not be  responsible  to  Tenant  for  the
                      violation  or  non-performance  by  any  other  tenant  or
                      occupant  of the  building  or Project  of said  tenant or
                      occupant's lease or of any of said Rules and Regulations.

               h.     LANDLORD'S   SUCCESSORS.   In  the  event  of  a  sale  or
                      conveyance  by  Landlord  of the  Project,  the same shall
                      operate to release  Landlord from any liability under this
                      Lease, and in such event Landlord's  successor in interest
                      shall  be  solely   responsible  for  all  obligations  of
                      Landlord under this Lease.

               i.     INTERPRETATION.   This  Lease  shall  be   construed   and
                      interpreted  in  accordance  with the laws of the state in
                      which the premises are located. This Lease constitutes the
                      entire  agreement  between the parties with respect to the
                      Premises and the Project,  except for such  guarantees  or
                      modifications as may be executed in writing by the parties
                      from time to time.  When  required  by the context of this
                      Lease,  the  singular  shall  include the plural,  and the
                      masculine   shall  include  the  feminine  and/or  neuter.
                      "Party"  shall mean  Landlord or Tenant.  If more than one
                      person or  entity  constitutes  Landlord  or  Tenant,  the
                      obligations  imposed  upon that  party  shall be joint and
                      several.  The enforceability,  invalidity or illegality of
                      any  provision  shall  not  render  the  other  provisions
                      unenforceable, invalid or illegal.

                                       21
<PAGE>

               j.     PRIOR  UNDERSTANDINGS.  Tenant  acknowledges  that neither
                      Landlord  nor  anyone   representing   Landlord  has  made
                      statements  of any kind  whatsoever  on which  Tenant  has
                      relied  in  entering  into  this  Lease.   Tenant  further
                      acknowledges   that  Tenant  has  relied   solely  on  its
                      independent investigation and its own business judgment in
                      entering into this Lease.  Landlord and Tenant agree that:
                      this  Lease  supersedes  all  prior  and   contemporaneous
                      understandings and agreement; the provisions of this Lease
                      are  intended  by them as the  final  expression  of their
                      agreement;   this  Lease   constitutes  the  complete  and
                      exclusive   statement  of  its  terms;  and  no  extrinsic
                      evidence  whatsoever  may be  introduced  in any  judicial
                      proceeding  involving  this Lease.  No  provision  of this
                      Lease may be  amended  except by an  agreement  in writing
                      signed  by  the   parties   hereto  or  their   respective
                      successors in interest,  whether or not such  amendment is
                      supported by new consideration.

               k.     AUTHORITY.  If Tenant is a  corporation,  each  individual
                      executing  this  Lease  on  behalf  of  said   corporation
                      represents and warrants that he/she is duly  authorized to
                      execute  and   deliver   this  Lease  on  behalf  of  said
                      corporation.  Concurrently  with  the  execution  of  this
                      Lease,  Tenant shall deliver to Landlord a certified  copy
                      of  a  resolution  of  the  Board  of  Directors  of  said
                      corporation  authorizing  the execution of this Lease.  If
                      Tenant is a partnership,  each  individual  executing this
                      Lease  on  behalf  of  said  partnership   represents  and
                      warrants  that  he/she is duly  authorized  to execute and
                      deliver this Lease on behalf of said  partnership and that
                      this Lease is binding upon said  partnership in accordance
                      with its terms,  and  concurrently  with execution of this
                      Lease,  Tenant shall  deliver to Landlord such evidence of
                      authorization  as  Landlord  may  require.  If Tenant is a
                      marital  community,  or a member of a  marital  community,
                      both members of the marital  community  shall execute this
                      Lease.  Where  Tenant is comprised of more than one person
                      or entity,  all covenants,  agreements and  obligations of
                      Tenant hereunder shall be the joint and several covenants,
                      agreements  and  obligations  of  each  person  or  entity
                      comprising

               l.     CLEAN AIR ACT. Tenant  acknowledges  that Landlord has not
                      made  any  portion  of  the   Premises  or  the   Building
                      accessible   for   smoking   in   compliance    with   WAC
                      296-62-12000.  If Tenant wishes to make any portion of the
                      Premises  accessible  for  smoking,  Tenant shall make all
                      improvements  necessary  to  comply  with  all  applicable
                      governmental  rules and regulations.  Tenant  acknowledges
                      that the  indemnity  contained  in Section 15 of the Lease
                      includes,  but is  not  limited  to  claims  based  on the
                      presence of tobacco smoke as a result of the activities of
                      Tenant, its employees, agents, or guests.

LEASE  CONSIDERATION:  In  consideration  of  Landlord's  entry into this lease,
Tenant shall pay $13,691.00  concurrent  with the execution of this Lease.  Such
consideration  shall be deemed fully earned by Landlord  with full  execution of
Lease and shall not be refundable.

LANDLORD:      TIAA REALTY, INC.
           ---------------------------------
               By:    Teachers Insurance & Annuity Association
                      of America, Inc., a New York corporation,
                      its authorized representative

               By:    /s/ James Garofalo
                      -----------------------------
                      James Garofalo

                                       22
<PAGE>

               Its    Assistant Secretary
                      -----------------------------

TENANT:               Kronos Air Technologies
               ------------------------------------

               By:    /s/ Robert Fuhriman II
                      ------------------------------------
                      Robert Fuhriman II

               Its    COO
                      -----------------------------

                                       23
<PAGE>

                                    EXHIBIT A
                                (the "Premises")

                              [Floor Plan Omitted]

(North) FIRST FLOOR PLAN                          Office Area:  1,010 sf
        ----------------                          Shell Area:  1,332 sf
                                                  Total Area:  2,342 sf

--------------------------------------------------------------------------------

Building B
8551 154th Avenue NE                              [SITE MAP OMITTED]
Redmond, WA 98052

                                       24
<PAGE>

                                    EXHIBIT B
                                 (the "Project")

                                  [MAP OMITTED]

LEGAL DESCRIPTION:  (Building B)

Lot B, WestPark, a Binding Site Plan, according to the Plat thereof, recorded in
Volume  137 of  Plats,  Pages 85  through  88,  inclusive,  and  recorded  under
Recording No. 8706220570, in King County, Washington.

                                       25
<PAGE>

                                    EXHIBIT C
                              (Premises Condition)

BLDG/UNIT: B/8551
           ------------------

                      QUANTITY AND/OR
                      SIZE HEIGHT, LENGTH, ETC.

ITEM:

____    STANDARD IMPROVEMENTS ONLY

____    STANDARD IMPROVEMENTS PLUS THOSE SHOWN BELOW

 XX     SPACE TAKEN "AS-IS"
-----

PARTITIONS:    NA

CEILINGS:      NA

DOORS:         NA

FLOOR COVERING: Landlord will provide building-standard carpet throughout office
portion of premises.

PLUMBING:      NA

LIGHTS:        NA

SWITCHES:      NA

WALL ELECTRICAL OUTLETS:     NA

TELEPHONE OUTLETS:    NA

AIR CONDITIONING OR VENT FAN:       NA

AIR CONDITIONING HOOK UP:    NA

WATER HEATER:         NA

PAINTING:  Landlord  will  repaint  office  portion of  premises  with  building
standard materials and building standard color.

OTHER:  Landlord shall provide $500.00 toward building standard signage.

                                       26
<PAGE>

                                    EXHIBIT D
                             (Rules and Regulations)

1.      Except as  specifically  provided  in the Lease to which these Rules and
        Regulations are attached, no sign, placard, picture, advertisement, name
        or notice  shall be installed or displayed on any part of the outside or
        inside of the building or Project  without the prior written  consent of
        Landlord.  Landlord shall have the right to remove,  at Tenant's expense
        and without notice, any sign installed or displayed in violation of this
        rule.  All  approved  signs or  lettering  on doors and  walls  shall be
        printed,  painted,  affixed or  inscribed  at the expense of Tenant by a
        person approved by Landlord.

2.      If Landlord objects in writing to any curtains,  blinds, shades, screens
        or  hanging  plants  or other  similar  objects  attached  to or used in
        connection  with any  window or door of the  Premises,  or placed on any
        windowsill,  which is visible from the exterior of the Premises,  Tenant
        shall immediately  discontinue such use. Tenant shall not place anything
        against or near glass  partitions  or doors or windows  which may appear
        unsightly from outside the Premises.

3.      Tenant  shall  not  obstruct  any  sidewalks,  halls,  passages,  exits,
        entrances, elevators, escalators or stairways of the Project. The halls,
        passages,  exits, entrances,  shopping malls, elevators,  escalators and
        stairways are not open to the general public,  but are open,  subject to
        reasonable regulations, to Tenant's business invitees. Landlord shall in
        all cases retain the right to control and prevent  access thereto of all
        persons whose  presence in the judgment of Landlord would be prejudicial
        to the safety, character, reputation and interest of the Project and its
        tenants;  provided that nothing herein  contained  shall be construed to
        prevent  such access to persons with whom any tenant  normally  deals in
        the ordinary course of its business,  unless such persons are engaged in
        illegal or unlawful activities.  No tenant and no employee or invitee of
        any tenant shall go upon the roof(s) of the Project.

4.      The  directory of the  building or Project will be provided  exclusively
        for the display of the name and  location of tenants  only and  Landlord
        reserves the right to exclude any other names therefrom.

5.      Landlord  will furnish  Tenant,  free of charge,  with five keys to each
        door lock in the Premises. Landlord may make a reasonable charge for any
        additional keys. Tenant shall not make or have made additional keys, and
        Tenant shall not alter any lock or install a new additional lock or bolt
        on any  door  of its  Premises.  Tenant,  upon  the  termination  of its
        tenancy, shall deliver to Landlord the keys of all doors which have been
        furnished to Tenant,  and in the event of loss of any keys so furnished,
        shall pay Landlord therefor.

6.      If Tenant  requires  telegraphic,  telephonic,  burglar alarm or similar
        services,   it  shall  first   obtain,   and  comply  with,   Landlord's
        instructions in their installation.

7.      Tenant  shall  not place a load  upon any  floor of the  Premises  which
        exceeds the load per square foot which such floor was  designed to carry
        and which is allowed by law.  Landlord shall have the right to prescribe
        the weight, size and position of all equipment,  materials, furniture or
        other  property  brought into the  building.  Heavy  objects  shall,  if
        considered necessary by Landlord,  stand on such platforms as determined
        by Landlord to be necessary  to properly  distribute  the weight,  which
        platforms shall be provided at Tenant's  expense.  Business machines and
        mechanical equipment belonging to Tenant, which cause noise or vibration
        that may be transmitted to the structure of the building or to any space
        therein to such a degree as to be  objectionable  to  Landlord or to any
        tenants in the building,  shall be placed and  maintained by Tenant,  at

                                       27
<PAGE>

        Tenant's expense,  on vibration  eliminators or other devices sufficient
        to  eliminate  noise or  vibration.  The  persons  employed to move such
        equipment  in or out of the  building  must be  acceptable  to Landlord.
        Landlord  will not be  responsible  for loss of, or damage  to, any such
        equipment or other  property from any cause,  and all damage done to the
        building by maintaining or moving such equipment or other property shall
        be repaired at the expense of Tenant.

8.      Tenant shall not use or keep in the Premises any  kerosene,  gasoline or
        inflammable  or  combustible  fluid or material other than those limited
        quantities   necessary  for  the  operation  or  maintenance  of  office
        equipment. Tenant shall not use or permit to be used in the Premises any
        foul or noxious gas or substance,  or permit or allow the Premises to be
        occupied or used in a manner  offensive or  objectionable to Landlord or
        other occupants of the building by reason of noise, odors or vibrations,
        nor shall  Tenant  bring into or keep in or about the Premises any birds
        or animals.

9.      Tenant  shall not use any method of heating  or air  conditioning  other
        than that supplied by Landlord.

10.     Tenant shall not waste electricity, water or air conditioning and agrees
        to cooperate fully with Landlord to assure the most effective  operation
        of the building's  heating and air  conditioning  and to comply with any
        governmental  energy-saving  rules,  laws or regulations of which Tenant
        has actual notice, and shall refrain from attempting to adjust controls.
        Tenant  shall  keep  corridor  doors  closed,  and  shall  close  window
        coverings at the end of each business day.

11.     Landlord  reserves  the right,  exercisable  without  notice and without
        liability  to  Tenant,  to change  the name and  street  address  of the
        building.

12.     Landlord  reserves the right to exclude  from the  building  between the
        hours of 6 p.m. and 7 a.m. the following day, or such other hours as may
        be established  from time to time by landlord,  and on Sundays and legal
        holidays,  any  person  unless  that  person  is known to the  person or
        employee  in  charge  of the  building  and  has a pass  or is  properly
        identified.  Tenant  shall be  responsible  for all  persons for whom it
        requests  passes  and shall be liable to  Landlord  for all acts of such
        persons.  Landlord  shall not be liable for  damages  for any error with
        regard to the admission to or exclusion from the building of any person.
        Landlord reserves the right to prevent access to the building in case of
        invasion, mob, riot, public excitement or other commotion by closing the
        doors or by other appropriate action.

13.     Tenant shall close and lock the doors of its Premises and entirely  shut
        off all water faucets or other water apparatus, and electricity,  gas or
        air outlets before tenant and its employees  leave the Premises.  Tenant
        shall be  responsible  for any  damage or  injuries  sustained  by other
        tenants or occupants  of the  building or by Landlord for  noncompliance
        with this rule.

14.     Overnight  parking is prohibited  and any vehicle  violating this or any
        other  vehicle  regulation  adopted by Landlord is subject to removal at
        the owner's expense.

15.     Tenant shall not obtain for use on the Premises  ices,  drinking  water,
        food,  beverage,  towel or other similar services or accept barbering or
        bootblacking  service upon the Premises,  except at such hours and under
        such regulations as may be fixed by Landlord.

16.     The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
        not be used  for any  purpose  other  than  that  for  which  they  were
        constructed  and no foreign  substance of any kind  whatsoever  shall be
        thrown therein. The expense of any breakage stoppage or damage resulting

                                       28
<PAGE>

        from the  violation  of this rule shall be borne by the tenant  who,  or
        whose employees or invitees, shall have caused it.

17.     Tenant  shall not  sell,  or  permit  the sale at retail of  newspapers,
        magazines,   periodicals,   theater   tickets  or  any  other  goods  or
        merchandise  to the general  public in or on the Premises.  Tenant shall
        not make any room-to-room solicitation of business from other tenants in
        the  Project.  Tenant  shall not use the  Premises  for any  business or
        activity other than that specifically provided for in Tenant's Lease.

18.     Tenant shall not install any radio or television antenna, loudspeaker or
        other  devices  on the  roof(s) or  exterior  walls of the  building  or
        Project.   Tenant  shall  not   interfere   with  radio  or   television
        broadcasting or reception from or in the Project or elsewhere.

19.     Tenant shall not mark, drive nails,  screw or drill into the partitions,
        woodwork  or  plaster  or in any way  deface  the  Premises  or any part
        thereof,   except  in  accordance  with  the  provisions  of  the  Lease
        pertaining  to  alterations.  Landlord  reserves  the  right  to  direct
        electricians as to where and how telephone and telegraph wires are to be
        introduced  to the  Premises.  Tenant  shall  not cut or bore  holes for
        wires.  Tenant  shall not affix any floor  covering  to the floor of the
        Premises  in any manner  except as approved by  Landlord.  Tenant  shall
        repair any damage resulting from noncompliance with this rule.

20.     Tenant  shall not  install,  maintain or operate  upon the  Premises any
        vending machines without the written consent of Landlord.

21.     Canvassing,  soliciting  and  distribution  of  handbills  or any  other
        written material, and peddling in the Project are prohibited, and Tenant
        shall cooperate to prevent such activities.

22.     Landlord  reserves  the right to exclude or expel from the  Project  any
        person  who,  in  Landlord's  judgment,  is  intoxicated  or  under  the
        influence  of liquor or drugs or who is in violation of any of the Rules
        and Regulations of the Building.

23.     Tenant  shall store all its trash and garbage  within its premises or in
        other  facilities  provided by  Landlord.  Tenant shall not place in any
        trash box or receptacle  any material which cannot be disposed of in the
        ordinary and customary manner of trash and garbage disposal. All garbage
        and refuse disposal shall be made in accordance  with directions  issued
        from time to time by Landlord.

24.     The Premises shall not be used for the storage of  merchandise  held for
        sale to the general public,  or for lodging or for  manufacturing of any
        kind,  nor shall  the  Premises  be used for any  improper,  immoral  or
        objectionable  purpose.  No cooking  shall be done or  permitted  on the
        Premises  without  landlord's  consent,  except  that use by  Tenant  of
        Underwriters' Laboratory approved equipment for brewing coffee, tea, hot
        chocolate and similar  beverages or use of microwave ovens for employees
        use  shall be  permitted,  provided  that such  equipment  and use is in
        accordance  with all  applicable,  federal,  state county and city laws,
        codes, ordinances, rules and regulations.

25.     Tenant  shall not use in any space or in the public halls of the Project
        any hand truck except those  equipped  with rubber tires and side guards
        or such other  material-handling  equipment  as  Landlord  may  approve.
        Tenant shall not bring any other  vehicles of any kind into the building
        or Project.

                                       29
<PAGE>

26.     Without the written  consent of Landlord,  Tenant shall not use the name
        of the  building  or  Project  in  connection  with or in  promoting  or
        advertising the business of Tenant except as Tenant's address.

27.     Tenant  shall comply with all safety,  fire  protection  and  evacuation
        procedures and regulations  established by Landlord or any  governmental
        agency.

28.     Tenant  assumes any and all  responsibility  for protecting its Premises
        from theft,  robbery and pilferage,  which includes keeping doors locked
        and other means of entry to the Premises closed.

29.     Tenant's   requirements  will  be  attended  to  only  upon  appropriate
        application   to  the  Project   management   office  by  an  authorized
        individual.  Employees  of  Landlord  shall not  perform  any work or do
        anything   outside  of  their   regular   duties  unless  under  special
        instructions  from Landlord,  and no employee of Landlord will admit any
        person (Tenant or otherwise) to any office without specific instructions
        from Landlord.

30.     Landlord  may waive any one or more of these Rules and  Regulations  for
        the  benefit  of  Tenant  or any  other  tenant,  but no such  waiver by
        Landlord shall be construed as a waiver of such Rules and Regulations in
        favor  of  Tenant  or  any  other  tenant,  nor  prevent  Landlord  from
        thereafter  enforcing any such Rules and Regulations  against any or all
        of the tenants of the Project.

31.     These  Rules  and  Regulations  are in  addition  to,  and  shall not be
        construed to in any way modify or amend, in whole or in part, the terms,
        covenants, agreements and conditions of the Lease.

32.     Landlord  reserves the right to make such other and reasonable Rules and
        Regulations  as, in its  judgment,  may from time to time be needed  for
        safety and security, for care and cleanliness of the Project and for the
        preservation  of good order therein.  Tenant agrees to abide by all such
        Rules and Regulations  hereinabove  stated and any additional  rules and
        regulations which are adopted.

33.     Tenant shall be  responsible  for the observance of all of the foregoing
        rules by Tenant's employees,  agents, clients,  customers,  invitees and
        guests.

                                       30
<PAGE>

                                    EXHIBIT E
                              TENANT SIGN CRITERIA

The following signage criteria have been established for the purpose of allowing
sufficient  business  identification  for businesses  locating within  WestPark,
Pacific  Business & Technical  Center and Center  Court.  The criteria have also
been  established  for the  purpose of  maintaining  the overall  appearance  by
providing   maximum   continuity  with  the  environment  and  an  architectural
integration with the project.  The signage guidelines are in accordance with the
Redmond Community Development Code, Section 20c.20.230.  No deviation from these
criteria  will be  permitted  without  Landlord's  and City of  Redmond's  prior
written  approval.  Conformity  will be strictly  enforced.  Any sign  installed
without approval of the Landlord will be brought into conformance at the expense
of the Tenant.

                                  REQUIREMENTS
                                  ------------

I.      EXTERIOR SIGNAGE, BUILDINGS 1 - 10, A - P, AND RCC NORTH & SOUTH
        ----------------------------------------------------------------

               1.     Landlord shall provide the following signage at no cost to
                      Tenant:

                      a)     Tenant's  name and  suite  number  on all  exterior
                             project directories and one (1) mailbox.
                      b)     Tenant's suite number on front entry transom glass.
                      c)     Tenant's  name and  suite  number  on rear  transom
                             glass where applicable.

               2.     Method of attachment, location, color and size shall be in
                      standard  conformance  as determined by Landlord and shall
                      be  approved  by  Landlord  and City of  Redmond  prior to
                      installation.

               3.     Tenant  shall  have  one  (1)  exterior  sign  per  leased
                      premises.  No additional exterior signage shall be allowed
                      on the face of the structure.

               4.     Tenant  shall  be   responsible   for   coordinating   the
                      construction, installation and payment of building-mounted
                      company signs through Landlord's approved vendor.

               5.     With the  submittal of each set of  construction  drawings
                      for tenant improvements, a request for approval to add the
                      tenant's name to the building shall be made.

               6.     If no  tenant  improvements  are  required,  tenant  shall
                      submit copy of  exterior  signage  layout to Landlord  for
                      final  approval  prior to  submitting  to City for  permit
                      process.

               7.     No signage is allowed except for Tenant's company name who
                      Leases premises.

        A.     PACIFIC BUSINESS & TECHNICAL CENTER, BUILDING 1-2
               -------------------------------------------------

               1.     The signage  shall be located on the facade as  designated
                      by the Landlord.  The designated facade will encompass the
                      Tenant's space per attached approved drawings.

               2.     The  letters  for  each  tenant   shall  be  12"  maximum,
                      dimensional  foam  letters.  All signs  shall be painted a
                      uniform  color,  either  black  or a color  to  match  the

                                       31
<PAGE>
                      building  trim  color.  The letters  will be mounted  with
                      adhesive  directly to the building  surface.  Maximum sign
                      coverage will not exceed 25 square feet.  Maximum  overall
                      length not to exceed 12.5 feet. Maximum overall height not
                      to exceed 24 inches.  Tenant  signage  may contain no more
                      than two rows of information  provided that the total sign
                      area of 25 square feet is not  exceeded  and the number of
                      rows of information  presents a  professional  appearance.
                      All signage must be  submitted to Landlord for  Landlord's
                      approval.

               3.     Logos  separate  from  lettering  may be allowed and if so
                      allowed  shall not  exceed 24 inches by 24  inches,  to be
                      included WITHIN the 25 square feet allowed in item Two (2)
                      of this  Section.  All logos must be submitted to Landlord
                      for Landlord's approval.

               5.     All wall signage to be installed between panel joints. All
                      signs  installed  at first  floor  level  shall be at same
                      height. All signs installed at second floor level shall be
                      at same height.

               6.     Compliance   with  above   criteria   shall  be  effective
                      immediately  for all new Tenants.  Current  Tenants  shall
                      comply no later than September 30, 1994.

        B.     PACIFIC BUSINESS & TECHNICAL CENTER, BUILDINGS 3 - 10
               -----------------------------------------------------

               1.     Building-mounted   company   signage   shall   consist  of
                      individual 9" high dimensional styrofoam letters in a type
                      style of Helvetica Medium upper and/or lower case, painted
                      to match building trim as may be changed from time to time
                      by Landlord. Maximum line length shall not exceed 10 feet.
                      Maximum of two (2) lines or 20 square  feet over  tenant's
                      entrance door.

        C.     WESTPARK, BUILDINGS A - P
               -------------------------

               In accordance  with the previously  established  and adopted sign
               program for WestPark,  the following  specifications outline more
               specifically the nature of the intended signage.

               1.     Tenants'  names will be limited to the upper facade of the
                      individual  tenant  space.  First-floor-only  tenants  may
                      locate  signage  over main entry doors where  possible and
                      with Landlord's  written  approval.  Tenants on the second
                      floor and  2-story  tenants  shall  locate  signage on the
                      panel designated by Landlord.

               2.     The  letters  for  each  tenant   shall  be  12"  maximum,
                      dimensional  foam letters  painted of a color  approved by
                      the  Landlord.  The letters will be mounted with  adhesive
                      directly to the building  surface.  Maximum sign  coverage
                      will not exceed 25 square feet. Maximum overall length not
                      to exceed 12.5 feet.  Maximum overall height not to exceed
                      24 inches.  Tenant  signage  may  contain no more than two
                      rows of  information  provided that the total sign area of
                      25 square feet is not  exceeded  and the number of rows of
                      information  presents  a  professional   appearance.   All
                      signage  must be  submitted  to  Landlord  for  Landlord's
                      approval.

               3.     Separate  logos may be  allowed  and  shall not  exceed 24
                      inches  by 24  inches.  Approved  logos  will be  included
                      WITHIN the 25 square feet  allowed in item Two (2) of this

                                       32
<PAGE>

                      Section.  All logos  must be  submitted  to  Landlord  for
                      Landlord's approval.

        D.     REDMOND CENTER COURT, NORTH & SOUTH
               -----------------------------------

               1.     Tenant's  names  will be  limited  to upper  facade of the
                      individual tenant space. Tenants shall locate signage over
                      main entry doors.

               2.     The letters for tenant  signs shall be  twenty-inch  (20")
                      maximum in height,  dimensional  foam letters painted of a
                      color  approved  by the  Landlord.  The  letters  will  be
                      mounted with  adhesive  directly to the building  surface.
                      Maximum sign coverage shall not exceed forty square, feet.
                      Tenant signage may contain logos and no more than two rows
                      of information  provided that the total sign area of forty
                      square feet is not exceeded. Logos cannot exceed 24" X 24"
                      in size.

               3.     All  signs  must  be  approved  in  writing  by  Landlord,
                      including both "inside" and "outside" signs.

II.     OTHER SPECIFICATIONS, BUILDINGS 1 - 10, A - P, AND RCC N&S
        ----------------------------------------------------------

        A.     DIRECTORY
               ---------

               1.     Each  Tenant  shall be  allowed  a space  on the  building
                      directory sign, if applicable.

               2.     Method of attachment, location, color and size shall be in
                      standard  conformance  and  shall  be  solely  up  to  the
                      Landlord's approval.

        B.     MEZZANINE TENANTS
               -----------------

               1.     Each  mezzanine  Tenant  shall be  allowed  a space on the
                      entry sign located at the building  lobby,  if applicable,
                      and signage on their individual entrance door.

        C.     WINDOW GRAPHICS
               ---------------

               1.     The Tenant sign order  attached  provides  the window sign
                      guidelines.  The  signs  will  be  located  on the  window
                      closest to the front door.  The copy color shall be white.
                      Logo style and color to be approved  by Landlord  and City
                      of Redmond.

               2.     The style, color and size of the individual company's name
                      shall be standard and in  conformance  with the Landlord's
                      approval.  Landlord  reserves  the right to modify  window
                      signage  design  based on  Tenant's  corporate  type style
                      and/or format. (See attached sign order).

               3.     No electrical  or audible  signs will be permitted  except
                      those  which  presently  exist in  project or which may be
                      required by the Americans With Disabilities Act.

               4.     Except  as  provided  herein,  no  advertising   placards,
                      banners,  pennants, names, insignia trademarks,  "sandwich
                      boards" or other descriptive  material shall be affixed or

                                       33
<PAGE>

                      maintained  upon the  glass,  exterior  walls,  landscaped
                      areas, street, or parking areas.

                      The  following  is an  example  of a  standard  layout for
                      window  identification  graphics  for WestPark and Pacific
                      Business  &  Technical  Center  and  WestPark.  NOTE:  the
                      example is a  flush-left  layout.  Your  layout may not be
                      flush left depending on the position of your window.

----------------------------------------- -------------------------

                                                                        LOGO
[Logo]
                                             [DIAGRAM OMITTED]      TENANT NAME
                                                                    SUB COMPANY
CB RICHARD ELLIS
LEASING OFFICE
                                            (ALL COPY IN WHITE)
            (ALL COPY IN WHITE)
----------------------------------------- -------------------------

(LOGO SYMBOL IN COLOR, ALL OTHER COPY MUST BE IN WHITE:)
(IF NO ARTWORK PROVIDED, HELVETICA MEDIUM TYPE WILL BE USED:)
REGARDING THE 11" X 36" TENANT I.D. ZONE:
IF THE TENANT'S NAME OR LOGOTYPE WILL FIT ON:
1 LINE, THEN MAXIMUM LETTER HEIGHT ALLOWED IS 8"
2 LINES, THEN MAXIMUM LETTER HEIGHT ALLOWED IS 5"
3 LINES, THEN MAXIMUM LETTER HEIGHT ALLOWED IS 3"

                                       34
<PAGE>

STATE OF                    NY                            )
          -------------------------------------------------
                                                          )ss.
COUNTY OF                   NY                            )
           -----------------------------------------------

               I certify that I know or have  satisfactory  evidence  that JAMES
GAROFALO is the person who appeared before me, and said person acknowledged that
they signed this instrument, on oath stated that they were authorized to execute
the  instrument  and  acknowledged  it as the  ASSISTANT  SECRETARY  of TEACHERS
INSURANCE & ANNUITY  ASSOCIATION OF AMERICA,  INC., to be the free and voluntary
act of such party for the uses and purposes mentioned in the instrument.

        Dated:  5/24/00

[STAMPED
MARIAN USELOFF                               /s/ Marian Useloff
NOTARY PUBLIC, State of New York             --------------------------
No. 01US4671828                                     (Signature)
Qualified in New York County                 Marian Useloff
Commission Expires March 30, 2002]           --------------------------
                                                     (Print Name)

                                             Notary Public, in and for the State
                                             of New York,  residing  at New York
                                             Co. My Commission Expires 3/30/02

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

               I certify that I know or have  satisfactory  evidence that ROBERT
FUHRIMAN II is the person who appeared  before me, and said person  acknowledged
that they signed this  instrument,  on oath stated that they were  authorized to
execute the instrument and acknowledged it as the COO of KRONOS AIR TECHNOLOGIES
to be the free  and  voluntary  act of such  party  for the  uses  and  purposes
mentioned in the instrument.

        Dated:  5/29/00

[STAMPED
FAYE A. HOLTZ                                     /s/ Faye A. Holtz
NOTARY PUBLIC, State of Washington                -----------------------
Commission Expires July 19, 2003]                         (Signature)

                                                  Faye A. Holtz
                                                  ------------------------
                                                          (Print Name)

                                             Notary Public, in and for the State
                                             of Washington, residing at Seattle.
                                             My Commission Expires 7/19/03

                                       35

<PAGE>

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