Document:

EXHIBIT 10.1
                                  ------------

                                      LEASE

                          RAZORE LAND COMPANY, LANDLORD

                 PHAGE THERAPEUTICS INTERNATIONAL, INC., TENANT

                             DATED OCTOBER 27, 2000

<PAGE>

                                      LEASE

                                TABLE OF CONTENTS
Page

           1...BASIC LEASE TERMS
           2............PREMISES
           3................TERM
                     3.1................................................Commence
                     3.2..................................................Expire
           4...TENANT IMPROVEMENTS; EARLY POSSESSION; DELAYED DELIVERY
                     OF POSSESSION
                     4.1.....................................Tenant Improvements
                     4.2.........................................Early Occupancy
                     4.3..........................................Landlord Delay
                     4.4............................................Tenant Delay
           5...RENT
                     5.1....................................................Rent
                     5.2.......................................Manner of Payment
                     5.3 ......................................Rent Commencement
           6...PREPAID RENT AND SECURITY DEPOSIT
                     6.1.................................................Deposit
                     6.2..................................Use of Deposit to Cure
                     6.3..............................Return of Security Deposit
                     6.4...........................Treatment as Security Deposit
                     6.5.................Landlord's Obligation Regarding Deposit
           7...USE OF PREMISES
                     7.1.....................................................Use
                     7.2.........................................Prohibited Uses
                     7.3.............................................No Nuisance
                     7.4............................Telecommunications Providers
           8...ADDITIONAL RENT FOR OPERATING EXPENSES
                     8.1..........................................Tenant Payment
                     8.2..........................................Tenant's Share
                     8.3.............................................Definitions
                     8.4.....................Determination of Operating Expenses
                     8.5...... ...................................Reconciliation
                     8.6..................................Upon Lease Termination
                     8.7.........................................Landlord Rights
           9...MAINTENANCE AND REPAIR RESPONSIBILITY
                     9.1.................................Maintenance Obligations
                     9.2............................No Obligation For Alteration
                     9.3...........................................Tenant Waiver
           10...COMMON AREAS
                     10.1....................................Use of Common Areas
                     10.2.............................Definition of Common Areas
           11...UTILITIES AND SERVICES
                     11.1...................Furnishing of Utilities and Services
                     11.2....................................Additional Services
                     11.3............................................After Hours
                     11.4........................................Separate Meters
                     11.5................................................Failure
           12...LIMITS ON LANDLORD'S LIABILITY
                     12.1...........................Circumstances Beyond Control
                     12.2.........................Unreasonable Period of Failure
                     12.3..........................................Tenant Caused
                     12.4...................................No Abatement of Rent
                     12.5........................................No Interference
           13...ALTERATIONS AND ADDITIONS BY TENANT; LIENS AND INSOLVENCY
                     13.1....................Alterations and Additions by Tenant
                     13.2...................................Liens and Insolvency
           14...INSURANCE; INDEMNITY
                     14.1..........................................Tenant Waiver

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                     14.2..............................................Indemnity
                     14.3..............................Landlord's Responsibility
                     14.4.....................................Tenant's Insurance
                     14.5...............................................Policies
                     14.6...................................Landlord's Insurance
                     14.7...............................................Proceeds
                     14.8..................................Waiver of Subrogation
                     14.9..............................Notification of Accidents
           15...DESTRUCTION
                     15.1....................................Election to Restore
                     15.2.........................................Rent Abatement
                     15.3........................Repairs to Tenant Installations
                     15.4........................................No Compensation
           16...CONDEMNATION
                     16.1...................................Termination of Lease
                     16.2................................Election of Termination
                     16.3......................................Reduction of Rent
                     16.4..................................................Award
                     16.5.....................................Landlord Authority
           17...ASSIGNMENT AND SUBLETTING
                     17.1..............................Landlord Consent Required
                     17.2......................................Deemed Assignment
                     17.3..............................................Recapture
                     17.4................................Additional Requirements
                     17.5.............................Assignment with Bankruptcy
                     17.6...................................................Sale
                     17.7................................................Binding
           18...DEFAULT
                     18.1..................................Definition of Default
                     18.2....................................Tenant Notification
                     18.3.......................................Landlord Default
                     18.4......................................Rental Concession
           19...REMEDIES IN DEFAULT
                     19.1......................................Landlord Remedies
                     19.2................................Tenant Payment of Costs
                     19.3............................................Termination
                     19.4.........................................No Termination
                     19.5..............Landlord Election to Make Tenant Advances
           20...ACCESS
           21...SURRENDER OF PREMISES; HOLD-OVER TENANCY
                     21.1..................................Surrender of Premises
                     21.2......................................Hold-Over Tenancy
           22...COMPLIANCE WITH LAW
           23...RULES AND REGULATIONS
           24...PARKING
           25...ESTOPPEL CERTIFICATES
           26...SUBORDINATION
           27...REMOVAL OF PROPERTY
           28...PERSONAL PROPERTY TAXES
           29...NOTICES
           30...CONDITION OF PREMISES
           31...HAZARDOUS SUBSTANCES
                     31.1.....................................Tenant Obligations
                     31.2.......................................Tenant Indemnity
                     31.3....................................Landlord Inspection
                     31.4...............................................Survival
           32...SIGNS
           33...GENERAL PROVISIONS
                     33.1........................................Attorneys' Fees
                     33.2...................................Governing Law; Venue
                     33.3....................................Cumulative Remedies
                     33.4......................................Exhibits; Addenda
                     33.5.........................................Interpretation

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                     33.6.......................................Joint Obligation
                     33.7...................................................Keys
                     33.8.................................Late Charges; Interest
                     33.9...................................Light, Air, and View
                     33.10..........................................Measurements
                     33.11..................................................Name
                     33.12..........................Prior Agreements; Amendments
                     33.13...........................................Recordation
                     33.14.............................................Liability
                     33.15..........................................Severability
                     33.16..................................................Time
                     33.17................................................Waiver
                     33.18..............................................No Waste
                     33.19.........................................Force Majeure
                     33.20.......................................Quiet Enjoyment
                     33.21.....................................Building Planning
           34...AUTHORITY OF TENANT
                     34.1..................................Tenant as Corporation
                     34.2...........................Tenant as Partnership or LLC
           35...FINANCIAL STATEMENTS
           36...COMMISSIONS

                     Exhibits to this Lease:

                     Exhibit A-1          Premises

                     Exhibit A-2          Legal Description of Property

<PAGE>

                                      LEASE

LEASE,  dated  OCTOBER 27,  2000,  between  RAZORE LAND  COMPANY,  a  Washington
corporation  ("Landlord"),  and  Phage  Therapeutics  International,  a  Florida
corporation,  ("Tenant").  1. Basic Lease Terms. This Section sets forth certain
basic terms of this Lease for reference purposes.  This Section is to be read in
conjunction with the other provisions of this Lease;  provided,  however, to the
extent of any  inconsistency  between this Section and the other  provisions  of
this Lease, this Section shall control.
<TABLE>
<CAPTION>

Leased Premises (Seess.2)                                               Operating Expenses (Seess.8)
<S>                                                                    <C>

Business Park             QUADRANT PARKSIDE CENTER                      Tenant's Share                            5.08% of property
                                                                        Initial Additional Rent
Building Name             Building One                                                                   $1,926.21Month

Address                   19017 - 120th Avenue NE                       Parking (Seess.24)
                          Suite 102                                                2.8/1000 unreserved parking spaces
                          Bothell, WA  98011
                                                                        Brokers (Seess.36)
Rentable Sq. Ft.               approximately 5,148 rsf                  For Tenant               Colliers International
                                                                        For Landlord             Colliers International
Rent; Prepaid Rent; Security Deposit
(Seess.5 and 6)                                                         Addresses for Notices (Seess.29)

Base Monthly Rent                                                       Landlord:
Year 1: $15.50/sf/year ($6,649.50/month)
Year 2: $16.12/sf/year ($6,915.48/month)                                Razore Land Company
Year 3: $16.77/sf/year ($7,194.33/month)                                C/o Quadrant/KMS Management Services
Year 4: $17.44/sf/year ($7,481.76/month)                                728 134th Street SW, Suite 209
Year 5: $18.13/sf/year ($7,777.77/month)                                Everett, WA 98204
                                                                        Tel:       425-741-2828
Prepaid Rent                   $8,575.71                                Fax:       425-741-3838
                    (first month rent & operating expenses)             Attn:      Alicia A. Shaw
Security Deposit               $75,000 CD
(see 1A2)                                                               Tenant:

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

<PAGE>

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

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

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

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

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

3.   Term.

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

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

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

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

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

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

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

5.   Rent.

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

<PAGE>

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

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

6.   Prepaid Rent and Security Deposit.

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

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

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

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

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

7.   Use of Premises.

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

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

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

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

<PAGE>

8.   Additional Rent for Operating Expenses.

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

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

8.3  Definitions.

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

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

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

<PAGE>

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

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

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

9.   Maintenance and Repair Responsibility.

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

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

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

10.  Common Areas.

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

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

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

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

<PAGE>

11.  Utilities and Services.

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

14.  Insurance; Indemnity.

14.1 Tenant Waiver.  Landlord  shall not be liable to Tenant,  and Tenant hereby
     waives all claims against  Landlord,  for injury or damage to any person or
     property in or about the Premises, Building, Property or Common Areas by or
     from  any  cause  whatsoever,  including  without  limitation  any  acts or
     omissions of any other tenants, licensees or invitees of the Building. 14.2
     Indemnity.   Tenant  shall   indemnify  and  defend  (using  legal  counsel
     acceptable  to Landlord)  Landlord  and hold  Landlord  harmless,  from and
     against any and all loss, cost,  damage,  liability and expense  (including
     reasonable  attorneys'  fees)  whatsoever  that  may  arise  out  of  or in
     connection with Tenant's occupation, use or improvement of the Premises, or
     that of its employees,  agents or  contractors,  or Tenant's  breach of its
     obligations  under this Lease.  To the extent  necessary to fully indemnify
     Landlord  from  claims  made by Tenant  or its  employees,  this  indemnity
     constitutes a waiver of Tenant's  immunity under the Washington  Industrial
     Insurance Act, RCW Title 51. This indemnity shall survive the expiration or
     termination of the Term.

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

15.  Destruction.

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

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

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

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

16.  Condemnation.

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

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

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

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

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

17.  Assignment and Subletting.

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

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

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

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

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

17.6 Sale.  In the  event  of any  sale  of the  Building  or  Property,  or any
     assignment  of this Lease by  Landlord,  Landlord  shall be relieved of all
     liability under this Lease arising out of any act, occurrence,  or omission
     occurring  after sale or assignment;  and the purchaser or assignee at such
     sale or assignment  or any  subsequent  sale or  assignment  of Lease,  the
     Property, or Building, shall be

<PAGE>

     deemed without any further agreement to have assumed all of the obligations
     of the Landlord  under this Lease  accruing  after the date of such sale or
     assignment.

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

18.  Default.

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

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

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

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

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

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

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

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

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

19.  Remedies in Default.

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

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

19.3 Termination. In the event Landlord elects to terminate this Lease, Landlord
     shall be additionally  entitled to recover from Tenant:  (i) the award by a
     court  having  jurisdiction  thereof of the amount by which the unpaid rent
     and other charges and adjustments

<PAGE>

     called for herein for the  balance of the term after the time of such award
     exceeds  the amount of such loss for the same  period  that  Tenant  proves
     could be reasonably avoided and (ii) that portion of any leasing commission
     and Tenant  Improvements costs paid by Landlord applicable to the unexpired
     term of the Lease.

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

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

20.  Access.  Tenant  shall  permit  Landlord  to  enter  the  Premises  at  all
     reasonable times for the purpose of inspecting, altering, and repairing the
     Premises and the Building and  ascertaining  compliance with the provisions
     of this Lease by Tenant.  The existence or exercise of such right of access
     shall not be construed as imposing any  obligation  on Landlord to inspect,
     discover  or  correct  or  repair  any  condition  in the  Premises  or the
     Building.  Landlord may also show the Premises to prospective purchasers or
     tenants at reasonable  times,  provided that Landlord  shall not materially
     interfere  with Tenant's  business  operation.  21.  Surrender of Premises;
     Hold-Over Tenancy.  ---------------------------------------- 21.1 Surrender
     of  Premises.  Upon the  expiration  or sooner  termination  of this Lease,
     Tenant shall  surrender the Premises and all the additions and  alterations
     thereto, and leave the Premises broom clean and in good order and condition
     and repair, excluding ordinary wear and tear.

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

22.  Compliance  with Law.  Tenant shall not use the Premises or permit anything
     to be done in or about the Premises which will in any way conflict with any
     applicable law, statute, ordinance, or governmental rule or regulation, now
     or hereafter in force  ("Laws").  Tenant shall at its sole cost and expense
     promptly comply with all Laws,  including without  limitation the Americans
     with  Disabilities  Act,  and with the  requirements  of any  board of fire
     insurance   underwriters   or  other   similar   bodies  now  or  hereafter
     constituted,  relating  to,  or  affecting  the  use  or  occupancy  of the
     Premises.  The  judgment  of any court of  competent  jurisdiction,  or the
     admission of Tenant in any action,  whether  Landlord be a party thereto or
     not, that Tenant has violated any Laws,  shall be conclusive of the fact as
     between  Landlord  and Tenant.  23.  Rules and  Regulations.  Tenant  shall
     faithfully  observe and comply with the rules and regulations that Landlord
     shall  from  time to time  promulgate  and with  the  CC&Rs  and any  other
     restrictive  covenants and obligations  created by private  contracts which
     affect the use and  operation  of the  Premises,  Building  Common Areas or
     Business  Park, now or hereafter in force.  All such rules and  regulations
     shall be  non-discriminatory  and  reasonable  and shall be  uniformly  and
     consistently  enforced  against all tenants in the Building.  Additions and
     modifications  to rules and  regulations  shall be binding  on Tenant  upon
     delivery of a copy of them to Tenant.  Landlord shall not be responsible to
     Tenant  for the  nonperformance  of any rules or  regulations  by any other
     tenants or occupants of the Building.  24.  Parking.  Tenant shall have the
     right to use, on a  first-come,  first served  basis,  in common with other
     tenants and occupants  ------- of the Building and Business Park, up to the
     number of  parking  stalls  specified  in  Section  1,  located  within the
     Building or the Business  Park and which shall be available  for use by all
     tenants of the Business Park, their guests and invitees,  but which may, at
     Landlord's election,  be designated by Landlord,  (which designated parking
     facilities  Landlord  may  change  at any time and from time to time in its
     sole discretion), subject to the rules and regulations and any charges that
     may be  established  or altered for such  parking  facilities  from time to
     time.  Tenant  shall  comply with any and all  private  and  governmentally
     imposed parking restrictions applicable to the Business

<PAGE>

     Park,  including without  limitation,  the requirements of all designations
     placed on  parking  stalls  within  the  Business  Park,  such as car pool,
     visitor and designation for any tenant of the Business Park.

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

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

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

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

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

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

<PAGE>

31.  Hazardous Substances.

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

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

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

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

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

33.  General Provisions.

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

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

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

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

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

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

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

31.8 Late Charges; Interest. Late payment by Tenant to Landlord of Rent or other
     sums  due  under  this  Lease  will  cause  Landlord  to  incur  costs  not
     contemplated  by this Lease,  the exact  amount of which would be difficult
     and  impractical  to  ascertain.  Such  costs  include  without  limitation
     processing and accounting  charges and late charges which may be imposed on
     Landlord by the terms of any mortgage or trust deed  covering the Premises.
     Accordingly,  Tenant shall pay to Landlord as Additional Rent a late charge
     equal to five

<PAGE>

     percent of such  installment  as liquidated  damages for such late payment,
     other than for time value  damages.  A $50.00 charge will be paid by Tenant
     to Landlord for each returned  check.  In addition,  any Rent or other sums
     due under  this  Lease to  Landlord  that is not paid  when due shall  bear
     interest at the rate per annum of two percent over the prime rate in effect
     at Bank of America d/b/a Seattle-First  National Bank, Seattle Head Office,
     on the day such Rent or other sum was due, which interest shall  constitute
     Additional  Rent under this Lease.  The existence or payment of charges and
     interest under this Section shall not cure or limit Landlord's remedies for
     any Default by Tenant under this Lease.

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

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

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

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

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

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

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

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

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

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

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

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

31.21Building  Planning.  In the event Landlord requires the Premises for use in
     conjunction with another suite or for other  reasonable  connected with the
     Building planning program, upon notifying Tenant in writing, Landlord shall
     have the right to move Tenant to other  space in the  Building of which the
     Premises form a part, at  Landlord's  sole cost and expense,  and the terms
     and conditions of the original Lease shall remain in full force and effect,
     save and excepting that a revised Exhibit A shall become part of

<PAGE>

     the Lease and shall  reflect the location of the new space and Section 1 of
     this Lease shall be amended to include and state all correct data as to the
     new space.  However, if the new space does not meet with Tenant's approval,
     Tenant  shall  have the right to cancel  this Lease  upon  giving  Landlord
     thirty  (30) days'  notice  within  ten (10) days of receipt of  Landlord's
     notification. If Tenant cancels this Lease pursuant to this Section, Tenant
     shall vacate the Building and the Premises  within  thirty (30) days of its
     delivery to Landlord of the notice of cancellation.

34.  Authority of Tenant.

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

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

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

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

EXECUTED the day and year above written.

LANDLORD:
--------

RAZORE LAND COMPANY

By: /s/ Alicia A. Shaw /s/
Name: Alicia A Shaw
Title:
       -------------------------------------------------------

TENANT:
-------
PHAGE THERAPEUTICS INTERNATIONAL, INC., A
FLORIDA CORPORATION

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

<PAGE>

                                   EXHIBIT A-1

                        [GENERAL DESCRIPTION OF PREMISES]

                                   EXHIBIT A-2

                                LEGAL DESCRIPTION

A portion of the following described property:

           Lots 24 and 25 of Quadrant  Business Park - Bothell as recorded under
           Volume 131, Pages 87-91, King County Auditor.  Portion of Sections 4,
           5,  and  9,  Township  26  North,  Range  5  East,  W.M.,   Recording
           Certificate No.  8508061034,  and all areas of common use and benefit
           in Quadrant Business Park - Bothell.EXHIBIT 10.2
                              MANAGEMENT AGREEMENT

THIS AGREEMENT made effective September 1, 1998.

BETWEEN:

          Phage  Therapeutics   International  Inc.,  a  body  corporate,   duly
          incorporated under the Laws of the state of Florida,  United States of
          America,  having its head  office  situated  at 22116 - 23rd Drive SE,
          Bothell, WA 98021

           (hereinafter called the " Corporation")

                                OF THE FIRST PART
AND:

          Stealth  Investments Corp., a body corporate,  duly incorporated under
          the laws of the Province of British  Columbia,  having its head office
          at 666 Burrard Street #1300,  Vancouver, BC V6C 3J8; (hereafter called
          the "Manager")

                               OF THE SECOND PART
WHEREAS:

(1)  The Corporation is engaged in the Bio-Technology  industry and requires the
     services of a manager to fulfill the day-to-day responsibilities imposed on
     the Corporation; and

(2)  The Manager has agreed to act as Manager of the Corporation;

NOW THEREFORE THIS AGREEMENT  WITNESSETH  that for and in  consideration  of the
premises,  the mutual  covenants  and  agreements  herein  contained the parties
hereto hereby agree as follows:

a)         The Corporation hereby agree to retain the services of the Manager.

b)         The  retention  of the Manager  shall be for a month to month  period
           commencing September 1, 1998, and continuing  thereafter from year to
           year unless and until terminated as hereinafter provided.

c)         The Manager shall serve the  Corporation  and any  subsidiaries  from
           time to time owned by the  Corporation in such capacity or capacities
           and shall  perform such duties and  exercise  such powers as may from
           time to time be determined by Resolution of the Board of Directors of
           Corporation.

d)         Subject to the control  vested in the Board of Directors with respect
           to the  activities  of the Manager,  the Manager  shall have from the
           date  of   commencement   of  this   Agreement,   the  authority  and
           responsibility  to  deal  with  the  following  subject  matters:

          1)   maintaining  the services of accounting  and legal  professionals
               for the purposes of reviewing  all  prospects  introduced  to the
               Corporation for investment or participation;
          2)   arranging for and securing  financing for the  Corporation as may
               be permitted by regulatory bodies;
          3)   arranging  for timely  disclosure  of all  material  facts in the
               affairs of the Corporation,  such as regulatory  filings,  timely
               financial disclosures and issuance of News Releases;
          4)   establishing and maintaining suitable banking relations;
          5)   ensuing  the  maintenance  of  proper   accounting   records  and
               compiling  monthly  statements of the source and  application  of
               funds;
          6)   arranging for payment of all payables of the  Corporation  and/or
               any subsidiaries;
          7)   perusing   and   replying   to  all   corporate   inquiries   and
               correspondence;
          8)   securing  and  obtaining  for  the  benefit  of  the  Corporation
               competent  tax advice,  legal advice and services and  accounting
               services; and
          9)   all such other  duties as may be imposed  upon the  Manager  from
               time to time due to the nature of the Corporation's business.

e)         The  remuneration of the Manager for his services  hereunder shall be
           at the rate of $10,000 US per month for a term of one year  (together
           with any such  increments  thereto as the Board of  Directors  of the
           Corporation  may from time to time a lot)  payable  in equal  monthly
           installments  in advance of the first  business day of each  calendar
           month,  the first such  installment to be payable on the first day of
           March, 1999.

<PAGE>

f)         The Manager shall be reimbursed  for all traveling and  out-of-pocket
           expenses  actually and properly incurred by it in connection with its
           duties hereunder.  In respect of expenses,  the Manager shall provide
           statements  and vouchers to the  Corporation  as and when required by
           it.

g)         The terms  "subsidiary"  and  "subsidiaries"  as used herein mean any
           corporation or Corporation of which more than 50% of the  outstanding
           shares  carrying  voting  rights at all times are for the time  being
           owned by or held for the benefit of the  Corporation  and include any
           corporation or company in like relation to a subsidiary.

h)         Any notice required or permitted to be given hereunder to the Manager
           or to the  Corporation  shall be given by  registered  mail,  postage
           prepaid,  addressed  to the  Manager  or  the  Corporation  at  their
           respective  registered  offices from time to time in  existence.  Any
           notice  mailed as aforesaid  shall be deemed to have been  received y
           the  Addressee  on the  second  business  day  following  the date of
           mailing.

i)         This Agreement may be terminated:
           1)  by  the  Manager  or  sixty  (60)  days  written  notice  to  the
           Corporation;  or 2) by the  Corporation  on sixty  (60) days  written
           notice to the Manager.

j)         The provisions of the Agreement shall be governed by and interpreted
           in accordance with the laws of the State of Washington.

k)         This  Agreement  may be  executed by  facsimile  and in any number of
           counterparts with the same effect as if all parties to this Agreement
           had signed the same document and all  counterparts  will be construed
           together and will  constitute  one and the same  instrument,  and any
           facsimile signature shall be taken as an original.

IN WITNESS WHEREOF, the parties hereto have hereunto caused these presents to be
executed, as of the day and year first above written.

PHAGE THERAPEUTICS
INTERNATIONAL, INC.                                   STEALTH INVESTMENTS CORP.
/s/ Richard Honour /s/                                /s/ Darren Pylot /s/
Per: Authorized Signatory                             Per: Authorized Signatory

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