Document:

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                                                                   Exhibit 10.10

                                                         Basic Lease Information

               Lease Date:              April 17, 2000

               Landlord:                RIGGS & COMPANY, a division of
                                        Riggs Bank N.A., as trustee of the
                                        Multi-Employer Property Trust, a
                                        trust organized under 12 C.F.R.
                                        Section 9.18

               Address of Landlord:     c/o Trammell Crow Company
                                        8625 SW Cascade Avenue, Suite 500
                                        Portland, Oregon  97008

               Tenant:                  HOMEGROCER.COM, INC., a
                                        Washington corporation

               Premises:                19801 SW 95th Place,
                                        Tualatin, Oregon  97062

Paragraph 1    "Premises" shall mean the approximately 21,447 square feet in
               Building E of approximately 65,775 square feet (computed from
               measurements to the exterior of outside walls of the building and
               to the center of interior walls), such Premises being shown and
               outlined on the plan attached hereto and incorporated herein by
               this reference as Exhibit A, and being part of the real property
               described in Exhibit B attached hereto and incorporated herein by
               this reference. The Tenant shall vacate approximately 8,034
               square feet of the Premises no later than, and the Premises shall
               be automatically deemed reduced to 13,443 square feet as of, June
               1, 2000 as more particularly described and outlined in red in
               Exhibit A-1 attached hereto and incorporated herein by this
               reference

Paragraph 1    Lease Term: Commencing on the "Commencement Date" as hereinafter
               defined and ending 5 months thereafter except that in the event
               the Commencement Date is a date other than the first day of a
               calendar month, such term shall extend for said number of months
               in addition to the remainder of the calendar month following the
               Commencement Date.

 Paragraph 1   Scheduled Term Commencement Date: May 1, 2000

 Paragraph 2   Monthly Base Rent:

               May 1, 2000 - May 31, 2000                             $13,188.00

               June 1, 2000 - September 30, 2000                      $ 8,970.00

Paragraph 2B   Security Deposit:                         $8,970.00

Paragraph 4A   Tenant's Initial Monthly Escrow
               Payment for Taxes, Assessments
               and Other Charges:

               May 1, 2000 - May 31, 2000                              $1,829.00

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               June 1, 2000 - September 30, 2000                       $1,147.00

Paragraph 7    Tenant's Initial Monthly Common Area Maintenance
               Charge:

               May 1, 2000 - May 31, 2000                              $1,036.00

               June 1, 2000 - September 30, 2000                         $649.00

Paragraph 13B  Tenant's Initial Monthly Insurance Escrow Payment:

               May 1, 2000 - May 31, 2000                                 $73.00

               June 1, 2000 - September 30, 2000                          $46.00

               Tenant's Initial Monthly Payment Total:                $16,126.00

               The foregoing Basic Lease Information is hereby incorporated into
               and made a part of this Lease. Each reference in this Lease to
               any of the Basic Lease Information shall mean the respective
               information herein above set forth and shall be construed to
               incorporate all of the terms provided under the particular Lease
               paragraph pertaining to such Basic Lease Information. In the
               event of any conflict between any Basic Lease Information and
               this Lease, the former shall control.

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                                LEASE AGREEMENT

THIS LEASE AGREEMENT, made and entered into by and between RIGGS & COMPANY, a
                                                           ------------------
division of RIGGS BANK N.A., as trustee of the Multi-Employer Property Trust, a
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trust organized under 12 C.F.R. Section 9.18 hereinafter referred to as
--------------------------------------------
"Landlord", and HOMEGROCER.COM, INC., a Washington Corporation, hereinafter
                ----------------------------------------------
referred to as "Tenant";

                                  WITNESSETH

1.   PREMISES AND TERM.

     A. In consideration of the obligation of Tenant to pay rent as herein
     provided, and in consideration of the other terms, provisions and covenants
     hereof, Landlord hereby demises and leases to Tenant, and Tenant hereby
     takes and leases from Landlord those certain Premises as outlined on
     Exhibit "A" attached hereto and incorporated herein by this reference
     (hereinafter referred to as the "Premises"), together with all rights,
     privileges, easements, appurtenances, and amenities belonging to or in any
     way appertaining to the Premises and together with the buildings,
     sidewalks, curbs, driveways, and other improvements situated or to be
     situated upon land described in Exhibit B attached hereto and incorporated
     herein by this reference (the "Project").

     B. TO HAVE AND TO HOLD the same for a term commencing on the "Commencement
     Date", as hereinafter defined, and ending thereafter as specified in the
     Basic Lease Information (the "Lease Term"); provided, however, that, in the
     event the "Commencement Date" is a date other than the first day of a
     calendar month, such term shall extend for the number of months in addition
     to the remainder of the calendar month following the "Commencement Date".

     C. The "Commencement Date" shall be the earlier of: (i) the Scheduled Term
     Commencement Date shown in the Basic Lease Information, or (ii) the date
     upon which the Premises shall have been substantially completed in
     accordance with the plans and specifications described in Exhibit "C"
     attached hereto and incorporated herein by this reference. If the Premises
     shall not have been substantially completed by the Scheduled Term
     Commencement Date and the delay in substantially completing the Premises is
     not caused in whole or in part by any act or omission of Tenant, or
     Tenant's agents, employees, contractors or subcontractors, Tenant's
     obligations to pay rent under this Lease shall commence on the date the
     Premises are substantially completed. In no event shall Landlord be liable
     to Tenant for any loss or damage resulting from any delay for any reason
     whatsoever in the substantial completion of the Premises. Landlord shall
     notify Tenant in writing as soon as Landlord deems the Premises to be
     substantially completed and ready for occupancy. If Tenant believes that
     the Premises have not in fact been substantially completed, Tenant shall
     notify Landlord in writing of Tenant's objections within three (3) days of
     Landlord's notice to Tenant that the Premises are substantially complete.
     Landlord shall have a reasonable time after delivery of such notice in
     which to take such corrective action as Landlord, in its sole discretion,
     seems appropriate, and shall notify Tenant in writing as soon as Landlord
     deems that such corrective action has been completed so that the Premises
     are substantially completed and ready for occupancy. In the event of any
     dispute as to the substantial completion of work required to be performed
     by Landlord, the certificate of Landlord's architect or general contractor
     shall be conclusive. The taking of possession by Tenant of any portion of
     the Premises for any reason shall be deemed conclusively to establish that
     the Premises have been substantially completed in accordance with the plans
     and specifications and that the Premises are in good and satisfactory
     condition as of when possession was so taken. Tenant acknowledges that no
     representations as to the condition or repair of the Premises have been
     made by Landlord, unless such are expressly set forth in this Lease. After
     the Commencement Date, Tenant shall, upon demand, execute and deliver to
     Landlord a letter of acceptance of delivery of the Premises, specifying the
     Commencement Date.

2.   BASE RENT AND SECURITY DEPOSIT:

     A. Tenant agrees to pay to Landlord Monthly Base Rent for the Premises, in
     advance, without demand, deduction, or set off, for the entire Lease Term
     at the rate specified in the Basic Lease Information, payable in monthly
     installments. The first monthly installment shall be due and payable on the
     date hereof and thereafter monthly installments of Monthly Base Rent shall
     be due and payable on the first day of each calendar month succeeding the
     Commencement Date during the Lease Term, except that the payment of Monthly
     Base Rent for any fractional calendar month at the commencement or end of
     this Lease shall be prorated on the basis of a 30-day month.

     B. In addition, Tenant agrees to deposit with Landlord on the date hereof a
     security deposit in the amount specified in the Basic Lease Information,
     which sum shall be held by Landlord, without obligation for interest, as
     security for the performance of Tenant's covenants and obligations under
     this Lease, it being expressly understood and agreed that such deposit is
     not an advance rental deposit, not the last month's rent and not a measure
     of Landlord's damages in the event of Tenant's default. Upon the occurrence
     of any default by Tenant under this Lease, Landlord may, from time to time,
     without prejudice to any other remedy provided herein or provided by law,
     use such deposit to the extent necessary to make good any arrears of rent
     or other payment due Landlord hereunder, and any other damage, injury,

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     expense or liability caused by such event of default; or to perform any
     obligation required of Tenant under this Lease; and Tenant shall pay to
     Landlord on demand the amount so applied in order to restore the security
     deposit to its original amount. Although the security deposit shall be
     deemed the property of Landlord, any remaining balance of such deposit
     shall be returned by Landlord to Tenant within thirty (30) days of the date
     following the termination of this Lease that all of Tenant's obligations
     under this Lease have been fulfilled. Tenant may not mortgage, assign,
     transfer or encumber the Security Deposit and any such act on the part of
     Tenant shall be without force or effect. In the event any bankruptcy,
     insolvency, reorganization or other creditor-debtor proceedings shall be
     instituted by or against Tenant, the Security Deposit shall be deemed to be
     applied first to the payment of Monthly Base Rent, Additional Rent and all
     other sums payable under this Lease to Landlord for all periods prior to
     the institution of such proceedings and the balance, if any, may be
     retained by Landlord and applied against Landlord's damages.

3.   USE. The Premises shall be used only for general office, storage and
     distribution of grocery and related products and for no other purpose
     whatsoever without Landlord's prior written consent. Outside storage,
     including, without limitation, trucks and other vehicles, is prohibited
     without Landlord's prior written consent. Tenant shall at its own cost and
     expense obtain and maintain any and all licenses, permits, and other
     approval necessary or appropriate for its use, occupation or operation of
     the Premises. Tenant's inability to obtain or maintain any such license,
     permit or approval necessary or appropriate for its use, occupation or
     operation of the Premises shall not relieve it of its obligations under
     this Lease, including the obligation to pay Base Rent and additional rent.
     Tenant shall comply with all governmental laws, ordinances, rules and
     regulations applicable to the use and condition of the Premises, and shall
     promptly comply with all governmental orders and directives including, but
     not limited to, those regarding the correction, prevention and abatement of
     nuisances in or upon, or connected with, the Premises, all at Tenant's sole
     expense. Without limiting the generality of the foregoing, Tenant shall
     comply with the requirements of the Americans with Disabilities Act and all
     other laws, regulations, orders, codes, ordinances and governmental laws
     pertaining to the Premises and Tenant's use thereof at Tenant's sole cost
     and expense. Tenant shall not commit or allow to be committed or exist: (a)
     any waste upon the Premises, (b) any public or private nuisance, (c) any
     objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to
     emanate from the Premises, or (d) any act or condition which disturbs the
     quiet enjoyment of any other tenant in the Building, violates any of
     Landlord's contracts affecting any or all of the land or Building, creates
     or contributes to any work stoppage, strike, picketing, labor disruption or
     dispute, interferes in any way with the business of Landlord or any other
     tenant in the Building or with the rights or privileges of any contractors,
     subcontractors, licensees, agents, concessionaires, subtenants, servants,
     employees, customers, guests, invitees or visitors or any other persons
     lawfully in and upon the land or Building, or causes any impairment or
     reduction of the good will or reputation of the land or Building. In
     addition to any other remedies Landlord may have for a breach by Tenant of
     the terms of this Paragraph 3, Landlord shall have the right to have Tenant
     evicted from the Premises. Without Landlord's prior written consent, Tenant
     shall not receive, store or otherwise handle any product, material or
     merchandise which is explosive, highly inflammable, hazardous or a
     pollutant. Tenant will not permit the Premises to be used for any purpose
     or in any manner (including, without limitation, any method of storage)
     which would render the insurance thereon void or the insurance risk more
     hazardous or cause the State Board of Insurance or other insurance
     authority to disallow any sprinkler credits. In the event Tenant's use of
     Premises shall result in an increase in insurance premiums, Tenant shall be
     solely responsible for such increase.

4.   TAXES AND OTHER CHARGES.

     A. Tenant agrees to pay its proportionate share of any and all real and
     personal property taxes, regular and special assessments (including, but
     not limited to, local improvement district assessments to finance the costs
     of streets, sewers, traffic lights and other utilities), license fees and
     other charges of any kind and nature whatsoever, payable as a result of any
     public or quasi-public authority, private party, or owner's association
     levy, assessment or imposition against, or arising out of Landlord's
     ownership of or interest in, the Project, together with the building and
     the grounds, parking areas, driveways, roads, and alleys around the
     building in which the Premises are located, or any part thereof
     (hereinafter collectively referred to as the "Charges"). During each month
     of the Lease Term, Tenant shall make a monthly escrow deposit with Landlord
     (the "Escrow Payment") equal to 1/12 of its proportionate share of the
     Charges which Landlord estimates will be due and payable for that
     particular calendar year. Tenant authorizes Landlord to use the funds
     deposited by Tenant with Landlord under this Paragraph 4 to pay the
     Charges. Each Escrow Payment shall be due and payable, as additional rent,
     at the same time and in the same manner as the payment of Monthly Base Rent
     as provided herein. The amount of the initial monthly Escrow Payment will
     be specified in the Basic Lease Information. The initial Escrow Payment is
     based upon Tenant's proportionate share of the estimated Charges for the
     year in question, and the monthly Escrow Payment is subject to increase or
     decrease as determined by Landlord to reflect an accurate escrow of
     Tenant's estimated proportionate share of the Charges. The Escrow Payment
     account of Tenant shall be reconciled annually. If the Tenant's total
     Escrow Payments are less than Tenant's actual proportionate share of the
     Charges, Tenant shall pay to Landlord upon demand the difference; if the
     Tenant's total Escrow Payments are more than Tenant's actual proportionate
     share of the Charges, Landlord shall retain such excess and credit it to
     Tenant's Escrow Payment account for the successive year's Charges. Tenant's
     proportionate share of the Charges shall be computed by multiplying the
     Charges by a fraction, the numerator of which shall be the number of gross
     leasable square feet of floor space in the Premises and the denominator of
     which shall be the total applicable gross leasable square footage or such
     other equitable apportionment as Landlord may adopt.

     B. If Tenant should fail to pay any Escrow Payments, taxes, assessments,
     licensee fees or other charges required to be paid by Tenant hereunder, in
     addition to any other remedies provided herein, Landlord may, if it so
     elects, pay such Escrow Payments or taxes, assessments, license fees and
     other charges. Any sums so paid by Landlord shall be deemed to be
     additional rental owing by Tenant to

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     Landlord and due and payable upon demand as additional rental together with
     interest at the rate of eighteen percent (18%) per annum from the date of
     payment by Landlord until repaid by Tenant.

     C.   (1) If at any time during the Lease Term, the present method of
     taxation shall be changed so that in lieu of the whole or any part of any
     taxes, assessments, fees or charges levied, assessed or imposed on real
     estate and the improvements thereon, there shall be levied, assessed or
     imposed on Landlord a capital levy or other tax directly on the rents
     received therefrom and/or a franchise tax, assessment, levy or charge
     measured by or based, in whole or in part, upon such rents or the present
     or any future building or buildings, then all such taxes, assessments, fees
     or charges, or the part thereof so measured or based, shall be deemed to be
     included within the term "Charges" for the purposes of this Lease.

          (2) Tenant may, at its sole cost and expense, in its own name, dispute
     and contest any Charges by appropriate proceedings diligently conducted in
     good faith, but only after Tenant in such contest has deposited with
     Landlord the amount so contested and unpaid, which shall be held by
     Landlord without obligation for interest until the termination of the
     proceedings, at which time the amount(s) deposited shall be applied by
     Landlord toward the payment of the items held valid (plus any court costs,
     interest, penalties and other liabilities associated with the proceedings),
     and Tenant's share of any excess shall be returned to Tenant. Tenant
     further agrees to pay to Landlord upon demand all court costs, interest,
     penalties and other liabilities relating to such proceedings. Tenant agrees
     to indemnity, protect, defend and hold harmless the Indemnified Parties (as
     defined below) from and against any claims, liabilities, costs, damages or
     expenses (including attorneys' fees) in connection with any such
     proceedings.

          (3) Any payment to be made pursuant to this Paragraph 4 with respect
     to the calendar year in which this Lease commences or terminates shall bear
     the same ratio to the payment which would be required to be made for the
     full calendar year as that part of such calendar year covered by the Lease
     Term bears to a full calendar year.

     D.   Tenant shall be liable for all taxes levied against personal property
     and trade fixtures placed by Tenant in the Premises. If any such taxes are
     levied against Landlord or Landlord's property and if Landlord elects to
     pay the same or if the assessed value of Landlord's property is increased
     by inclusion of personal property and trade fixtures placed by Tenant in
     the Premises and Landlord elects to pay the taxes based on such increase,
     Tenant shall pay to Landlord upon demand that part of such taxes for which
     Tenant is primarily liable hereunder.

5.   TENANT'S MAINTENANCE.

     A.   Tenant shall at its own cost and expense keep and maintain all parts
     of the Premises (except those for which Landlord is expressly responsible
     under the terms of this Lease) in good condition, promptly making all
     necessary or prudent repairs and replacements, including, but not limited
     to, windows, glass and plate glass, doors, any special office entry,
     interior walls and finish work, floor and floor covering, downspouts,
     gutters, heating and air conditioning systems, dock boards, truck doors,
     dock bumpers, paving, and plumbing work and fixtures. Tenant shall also
     perform termite and pest extermination, regularly remove trash and debris,
     keep the parking areas, driveways, alleys and the whole of the Premises in
     a clean and sanitary condition, replace light fixtures and bulbs and, in
     all other respects, maintain the Premises in good working order and
     condition. Tenant shall repair all wind damage to glass.

     B.   Tenant shall not damage any wall or disturb the integrity and support
     provided by any wall and shall, at its sole cost and expense, promptly
     repair any damage or injury to any wall caused by Tenant or its employees,
     agents, licensees or invitees.

     C.   Tenant and its employees, agents, licensees and invitees shall have
     the right to use the parking areas, if any, as may be designated by
     Landlord in writing, subject to such reasonable rules and regulations as
     Landlord may from time to time prescribe and subject to rights of ingress
     and egress of other tenants. Landlord shall not be responsible for
     enforcing any exclusive parking rights granted to against any third
     parties. If Tenant can be clearly identified as being responsible for
     obstructions or stoppage of a common sanitary sewage line, then Tenant
     shall pay the cost of repairing such sewage line, upon demand as additional
     rent.

     D.   Tenant shall, at its own cost and expense, enter into a regularly
     scheduled preventive maintenance/service contract with a maintenance
     contractor for servicing all heating and air conditioning systems and
     equipment within the Premises.

     E.   If Tenant fails to maintain or repair the Premises in accordance with
     this paragraph, then Landlord may, but shall not be required to, enter the
     Premises upon two (2) business days prior written notice to Tenant (or
     immediately without any notice in the case of an emergency) to perform such
     maintenance or repair at Tenant's sole cost and expense. Tenant shall pay
     to Landlord the cost of such maintenance or repair plus a fifteen percent
     (15%) administration fee within ten (10) business days of written demand
     from Landlord.

6.   LANDLORD'S REPAIRS. After written notice from Tenant, Landlord shall use
     commercially reasonable efforts to make such repairs to the roof, exterior
     walls and foundations as Landlord deems necessary, and Tenant shall pay its
     proportionate share of the costs of such repairs as provided in Paragraph
     7. Tenant shall repair and pay for any damage to such items to be
     maintained by Landlord caused by any act, omission or negligence of Tenant,
     or Tenant's employees, agents, licensees or invitees, or caused by Tenant's
     default hereunder. The term "walls" as used herein shall not include
     windows, glass or plate glass, doors, special store fronts or office
     entries. Tenant shall immediately give Landlord written notice

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     of any defect or any need for repairs, after which Landlord shall have a
     reasonable opportunity and time to repair same or cure such defect.
     Landlord's liability with respect to any defects, repairs or maintenance
     for which Landlord is responsible under any of the provisions of this Lease
     shall be limited solely to the cost of such repairs or maintenance or the
     curing of such defect. In no event will Landlord be responsible for paying
     incidental or consequential damages resulting from Landlord's failure to
     cure such defects.

7.   MONTHLY COMMON AREA MAINTENANCE CHARGE. Tenant agrees to pay, as an
     additional charge each month, its proportionate share of the cost of the
     operation, maintenance, improvement, repair and replacement of the "Common
     Area", which shall be defined from time to time by Landlord. The term
     Common Area may include any property not owned by Landlord which is located
     beyond the boundaries of the Project to the extent Landlord is obliged to
     pay certain costs of operation and maintenance or to contribute to the cost
     of operation and maintenance. Common Area costs which may be incurred by
     Landlord at its discretion, may include, but shall not be limited to those
     costs incurred for lighting, water, sewage, trash removal, exterior
     painting, exterior window cleaning, sweeping, management, accounting,
     policing, inspecting, sewer lines, plumbing, paving, landscape maintenance,
     plant material replacement and other like charges, and Landlord's fee for
     supervision and administration of the items set forth in this Paragraph,
     currently at 10%. The proportionate share to be paid by Tenant of the cost
     of operation, maintenance, improvement, repair and replacement of the
     Common Area shall be computed on the ratio that the gross leasable square
     footage of the Premises bears to the total applicable gross leasable square
     footage or such other equitable apportionment as Landlord may adopt.
     Landlord shall make monthly or other periodic charges based upon the
     estimated annual cost of operation and maintenance of the Common Area,
     payable in advance but subject to adjustment after the end of the year on
     the basis of the actual cost for such year. Any such periodic charges shall
     be due and payable upon delivery of notice thereof. The initial Common Area
     Maintenance Charge, subject to adjustment as provided herein, shall be due
     and payable, as additional rent, at the same time and in the same manner as
     the time and manner of the payment of Monthly Base Rent as provided herein.
     The amount of the initial monthly Common Area Maintenance Charge shall be
     as specified in the Basic Lease Information.

8.   ALTERATIONS. Tenant shall not make any alterations, additions or
     improvements to the Premises (including, but not limited to, roof and wall
     penetrations or alterations, additions or improvements affecting building,
     mechanical or electrical systems or equipment) without the prior written
     consent of Landlord, which consent may be withheld in its sole discretion
     or may be conditioned on, among other things, proof of insurance coverage,
     payment and performance bonds, in forms, amounts and by companies
     acceptable to Landlord, and Landlord's review of Tenant's plans and
     specifications, Tenant's contractor and Tenant's building permit. Tenant
     may, without the consent of Landlord, but at its own cost and expense and
     in a good workmanlike manner erect such shelves, bins, machinery and trade
     fixtures as it may deem advisable, without altering the basic character of
     the building or improvements and without overloading or damaging such
     building or improvements, and in each case complying with all applicable
     governmental laws, ordinances, regulations and other requirements. All
     alterations, additions, improvements and partitions erected by Tenant shall
     be and remain the property of Tenant during the Term of this Lease and
     Tenant shall, unless Landlord otherwise elects as hereinafter provided,
     remove all alterations, additions, improvements and partitions erected by
     Tenant and restore the Premises to their original condition by the date of
     termination of this Lease or upon earlier vacating of the Premises;
     provided, however, that if Landlord so elects prior to termination of this
     Lease or upon earlier vacating of the Premises, such alterations,
     additions, improvements and partitions shall become the property of
     Landlord as of the date of termination of this Lease or upon earlier
     vacating of the Premises and shall be delivered up to the Landlord with the
     Premises. All shelves, bins, machinery and trade fixtures installed by
     Tenant may be removed by Tenant prior to the termination of this Lease if
     Tenant so elects, and shall be removed by the date of termination of this
     Lease or upon earlier vacating of the Premises if required by Landlord;
     upon any such removal Tenant shall restore the Premises to their original
     condition. All such removals and restoration shall be accomplished in good
     workmanlike manner so as not to damage the buildings and other improvements
     situated on the Premises. Landlord shall have the right at any time and
     from time to time to make changes or alterations to any portion of the
     Project other than the Premises and Landlord shall not be subject to any
     liability with respect to such alterations.

9.   SIGNS. Tenant shall not install signs upon the Premises without Landlord's
     prior written approval, and any such signage shall be subject to any
     applicable governmental laws, ordinances, regulations and other
     requirements. Tenant shall remove all such signs by the expiration or
     sooner termination of this Lease. Such installations and removals shall be
     made in such a manner as to avoid injury or defacement of the building and
     other improvements, and Tenant shall repair any injury or defacement,
     including, without limitation, discoloration, caused by such installation
     and/or removal.

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10.  INSPECTION/SURRENDER OF POSSESSION.

     A. Landlord and Landlord's agents and representatives shall have the right
     to enter and inspect the Premises at any reasonable time during business
     hours, for the purpose of ascertaining the condition of the Premises or in
     order to make such repairs as may be required or permitted to be made by
     Landlord under the terms of this Lease or for any other lawful purpose.
     During the period that is six (6) months prior to the end of the Term
     hereof, Landlord and Landlord's agents and representatives shall have the
     right to enter the Premises at any reasonable time during business hours
     for the purpose of showing the Premises and shall have the right to erect
     on the Premises a suitable sign indicating the Premises are available.

     B. Tenant shall, at the expiration or earlier termination of this Lease,
     surrender and deliver the Premises to Landlord in as good condition as when
     received by Tenant from Landlord or as later improved, reasonable use and
     wear excepted.

     C. Tenant shall give written notice to Landlord at least thirty (30) days
     prior to vacating the Premises and shall arrange to meet with Landlord for
     a joint inspection of the Premises prior to vacating. In the event of
     Tenant's failure to give such notice or arrange such joint inspection,
     Landlord's inspection at or after Tenant's vacating the Premises shall be
     conclusively deemed correct for purposes of determining Tenant's
     responsibility for restoring the Premises to the condition required
     hereunder.

11.  UTILITIES. Landlord agrees to provide at its cost water, electricity and
     gas service connections into the Premises; but Tenant shall pay for all
     water, gas, heat, light, power, telephone, sewer, sprinkler charges and
     other utilities and services used on or from the Premises, together with
     any taxes, penalties, surcharges or the like pertaining thereto and any
     maintenance charges for utilities and shall furnish all electric light
     bulbs and tubes. If any such services are not separately metered to Tenant,
     Tenant shall pay a reasonable proportion as determined by Landlord of all
     charges jointly metered with other Premises. Landlord shall not be liable
     for any loss, injury, damage to property, or other consequences caused by
     or resulting from any variation, interruption, or failure of utilities ore
     services in the Building due to any cause whatsoever. However, in the event
     of such variation, interruption or failure, Landlord shall use reasonable
     diligence to restore such service to a normal operating condition. No
     temporary interruption, variance, or failure of such services incident to
     the making or repairs, strike ,extreme weather conditions, or the
     conditions or events beyond Landlord's reasonable control shall be deemed
     an eviction of Tenant or relieve Tenant from any of Tenant's obligations
     hereunder.

12.  ASSIGNMENT AND SUBLETTING.

     A. Tenant shall not have the right, voluntarily or involuntarily, to
     assign, convey, transfer, mortgage or sublet the whole or any part of the
     Premises under this Lease without the prior written consent of Landlord. If
     Tenant is a partnership, corporation or limited liability company, the
     transfer, assignment, sale or other change in ownership interest in excess
     of 33% (in the aggregate) shall be deemed an assignment within the meaning
     of this Paragraph. In the event Tenant applies to Landlord for consent to
     assign, convey, transfer or sublet the Premises, Landlord may condition
     such consent on, among other things, the right to receive one-half of the
     profit, if any, which Tenant may realize on account of such assignment,
     conveyance, transfer or sublease of the Premises or any other condition.
     For purposes of this paragraph, "profit" shall mean any sum which the
     assignee, sublessee or transferee is required to pay, or which is credited
     to Tenant as rent in excess of the rents required to be paid by Tenant to
     Landlord under this Lease. Landlord also reserves the right to recapture
     the Premises or applicable portion thereof in lieu of responding to
     Tenant's transfer request by notice of Landlord's exercise of its recapture
     right given to Tenant within twenty (20) days after receipt of Tenant's
     written request for assignment or subletting. Such recapture shall
     terminate this Lease as to the applicable space effective on the
     prospective date of assignment or subletting, which shall be the last day
     of a calendar month and not earlier than sixty (60) days after receipt of
     Tenant's request hereunder. Nothing contained in this Lease shall prohibit
     Landlord from entering into a new lease with Tenant's proposed assignee or
     sublessee. In the event that Landlord shall not elect to recapture the
     Premises or the applicable portion thereof, Tenant shall pay Landlord a
     reasonable fee, not to exceed $500.00, to reimburse Landlord for processing
     costs incurred in connection with considering whether to consent to
     Tenant's sublease or assignment request, and shall also reimburse Landlord
     for Landlord's reasonable attorneys' fees.

     B. Notwithstanding any permitted assignment or subletting, Tenant shall at
     all times remain directly, primarily and fully responsible and liable for
     the payment of the rent and all other charges under this Lease and for
     compliance with all of its other obligations under the terms, provisions
     and covenants of this Lease. Upon the occurrence of an "event of default"
     as hereinafter defined, if the Premises or any part thereof are then
     assigned or sublet, Landlord, in addition to any other remedies herein
     provided, or provided by law, may at its option collect directly from such
     assignee or subtenant all rents becoming due to Tenant under such
     assignment, transfer or sublease and apply such rent against any sums due
     to Landlord from Tenant hereunder, and no such collection shall be
     construed to constitute a novation or a release of Tenant from the further
     performance of Tenant's obligations here under.

                                       7
<PAGE>

13.  INSURANCE, FIRE AND CASUALTY DAMAGE.

     A. Landlord shall maintain casualty insurance covering the building of
     which the Premises are a part in an amount equal to the "replacement cost"
     thereof, insuring against the perils covered by the extended coverage
     policy and any other perils elected to be covered by the Landlord.
     Coverages and endorsements shall be as selected by the Landlord and such
     insurance shall be for the sole benefit of Landlord and all insurance
     proceeds shall remain under its sole control. Such insurance may be
     effectuated, in whole or in part, by a blanket policy covering the building
     in which the Premises are located and other buildings. In the event the
     insurance policy is subject to a deductible, Tenant shall be liable for and
     shall pay all or its proportionate share, as appropriate, of any deductible
     withheld from insurance proceeds or payables under the terms of the
     insurance policy procured by Landlord in the event of a claim or insured
     loss with respect to the building in which the Premises are located.
     Landlord may, in its discretion, require that Tenant, at its sole cost and
     expense, maintain on all of its personal property, tenant improvements and
     alterations in, or on about the Premises a policy of casualty insurance to
     the extent of the full replacement value without any deduction for
     depreciation.

     B. Tenant shall pay its proportionate share of Landlord's costs of
     procuring and maintaining: (i) the insurance coverage described in
     Subparagraph 13A, (ii) liability insurance with respect to the Project and
     the operations thereon, and (iii) any other insurance coverage procured by
     Landlord and pertaining or relating to the Premises in any way. In the
     event any insurance coverage is on a blanket basis, the premium shall be
     equitably apportioned to the buildings and improvements located within the
     Project before determining Tenant's proportionate share. During each month
     of the term of this Lease, Tenant shall make a monthly escrow deposit with
     Landlord (the "Insurance Escrow Payment") equal to one-twelfth of its
     proportionate share of Landlord's cost of procuring and maintaining the
     insurance described in Subparagraphs 13A and 13B which will be due and
     payable for that particular year. Tenant authorizes Landlord to use the
     funds deposited by Tenant with Landlord under this paragraph to pay the
     cost of such insurance. Each Insurance Escrow Payment shall be due and
     payable, as additional rent, at the same time and manner of the payment of
     the Monthly Base Rent as provided herein. The initial monthly Insurance
     Escrow Payment is subject to increase or decrease as determined by Landlord
     to reflect an accurate monthly escrow of Tenant's estimated proportionate
     share of this insurance. The Insurance Escrow Payment account of Tenant
     shall be reconciled annually. If the Tenant's total Insurance Escrow
     Payments are less than Tenant's actual proportionate responsibility for
     such insurance, Tenant shall pay to Landlord upon demand the difference; if
     the total Insurance Escrow Payments of Tenant are more than Tenant's actual
     proportionate responsibility for such insurance, Landlord shall retain such
     excess and credit it to the next monthly payment payable by Tenant or if
     this Lease has expired, refund such excess to Tenant. Tenant's cost of
     insurance shall be computed by multiplying the cost of Insurance by a
     fraction, the numerator of which shall be the number of gross leasable
     square feet of floor space in the Premises and the denominator of which
     shall be the total applicable gross leasable square footage. The amount of
     the initial monthly Insurance Escrow Payment will be as specified in the
     Basic Lease Information.

     C. Tenant shall, throughout the Lease Term, at its own expense, procure and
     maintain in full force and effect: (a) A policy of comprehensive general
     liability insurance, including a contractual liability endorsement covering
     Tenant's obligations under the paragraph captioned "Indemnification",
     insuring against claims of bodily injury and death or property damage or
     loss with a combined single limit at the Commencement Date of this Lease of
     not less than Three Million Dollars ($3,000,000.00), which limit shall be
     reasonably increased during the Lease Term at Landlord's request to reflect
     both increases in liability exposure arising from inflation as well as from
     changing use of the Premises or changing legal liability standards, which
     policy shall be payable on an "occurrence" rather than a "claims made"
     basis, and which policy names Landlord and manager and, at Landlord's
     request Landlord's mortgage lender(s) or investment advisors, as additional
     insureds; (b) A policy of extended property insurance (which is commonly
     called "all risk") covering Tenant Improvements, Tenant Alterations, and
     any and all furniture, fixtures, equipment, inventory, improvements and
     other property in or about the Premises which is not owned by Landlord, for
     one hundred percent (100%) of the then current replacement value of such
     property; and (c) Business interruption insurance in an amount sufficient
     to cover costs, damages, lost income, expenses, Base Rent, additional rent
     and all other sums payable under this Lease, should any or all of the
     Premises not be usable for a period of up to twelve (12) months. All
     insurance policies required under this paragraph shall be with companies
     reasonably approved by Landlord authorized to do business in the State of
     Oregon and each policy shall provide that it is not subject to cancellation
     or reduction in coverage except after thirty (30) days' written notice to
     Landlord. Tenant shall deliver to Landlord and, at Landlord's request
     Landlord's mortgage lender(s), prior to the Commencement Date and from time
     to time thereafter, certificates evidencing the existence and amounts of
     all such policies. If Tenant fails to acquire or maintain any insurance or
     provide any certificate required by this paragraph, Landlord may, but shall
     not be required to, obtain such insurance or certificates and the costs
     associated with obtaining such insurance or certificates shall be payable
     by Tenant to Landlord on demand. Such policies shall be primary insurance
     (and not "excess over" or contributory with any other valid, existing and
     applicable insurance in force for or on behalf of Landlord) and such
     policies shall not eliminate cross-liability and shall contain a
     severability of interest clause. Certified copies of such policies,
     together with receipt evidencing payment of premiums therefor, shall be
     delivered to Landlord prior to the commencement date of this Lease. Not
     less than fifteen (15) days prior to the expiration date of any such
     policies, certified copies of the renewals thereof (bearing notations
     evidencing the payment of renewal premiums) shall be delivered to Landlord.

     D. If the building of which the Premises are a part should be damaged or
     destroyed by fire, tornado or other casualty, Tenant shall give immediate
     written notice thereof to Landlord.

                                       8
<PAGE>

     E. If the building of which the Premises are a part should be totally
     destroyed by fire, tornado or other casualty, or if it should be so damaged
     thereby that rebuilding or repairs cannot in Landlord's estimation be
     completed within two hundred (200) days after the date upon which Landlord
     is notified by Tenant of such damage, this Lease shall, at the option of
     Landlord, terminate and the rent shall be abated during the unexpired
     portion of this Lease, effective upon the date of the occurrence of such
     damage. Landlord shall give notice to Tenant in writing of its
     determination to terminate this Lease within ninety (90) days following the
     date of the occurrence of such damage.

     F. If the building of which the Premises are a part should be damaged only
     to such extent that rebuilding or repairs can in Landlord's estimation be
     completed within two hundred (200) days after the date upon which Landlord
     is notified by tenant of such damage, this Lease shall not terminate, and
     Landlord shall at its sole cost and expense (but only to the extent of
     insurance proceeds received by Landlord) thereupon proceed with reasonable
     diligence to rebuild and repair such building to substantially the
     condition in which it existed prior to such damage, except that Landlord
     shall not be required to rebuild, repair or replace any part of the
     partition, fixtures, additions, and other improvements which may have been
     placed in, or about the Premises by Tenant. If the Premises are
     untenantable in whole or in part following such damage, the rent payable
     hereunder during the period in which they are untenantable shall be reduced
     to such extent the Premises are unusable.

     G. Notwithstanding anything herein to the contrary, in the event the holder
     of any indebtedness secured by a mortgage or deed of trust covering the
     Premises requires that the insurance proceeds be applied to such
     indebtedness, then Landlord shall have the right to terminate this Lease by
     delivering written notice of termination to Tenant within fifteen (15) days
     after such requirement is made by any such holder, whereupon all rights and
     obligations hereunder shall cease and terminate, except that Tenant shall
     remain liable to Landlord for the payment of any rents or other charges
     already accrued.

     H. Each of Landlord and Tenant hereby releases the other from any loss or
     damage to property caused by fire or any other perils insured through or
     under them by way of subrogation or otherwise for any loss or damage to
     property caused by fire or any other perils insured in policies of
     insurance covering such property, even if such loss or damage shall have
     been caused by the fault or negligence of the other party, or anyone for
     whom such party may be responsible; provided, however, that this release
     shall be applicable and in force and effect only with respect to loss or
     damage occurring during such times as the releasor's policies shall contain
     a clause or endorsement to the effect that any such release shall not
     adversely affect or impair said policies or prejudice the right of the
     releasor to recover there under and then only to the extent of the
     insurance proceeds payable under such policies. Each of the Landlord and
     Tenant agrees that it will request its insurance carriers to include in its
     policies such a clause or endorsement. If extra cost shall be charged
     therefor, each party shall advise the other thereof and of the amount of
     the extra cost, and the other party, at its election, may pay the same, but
     shall not be obligated to do so.

14.  LIABILITY. Landlord shall not be liable to Tenant or Tenant's employees,
     agents, servants, guests, invitees, licensees, or visitors, or to any other
     person whomsoever, for any injury to person or damage to property on or
     about the Premises, resulting from and/or caused in part or whole by the
     act, omission, negligence or misconduct of Tenant, its employees, agents,
     servants, guests, invitees, licensees, or visitors, or of any other person
     entering upon the Premises, or caused by the building and improvements
     located on the Premises becoming out of repair, or caused by leakage of
     gas, oil, water or steam or by electricity emanating from the Premises, or
     due to any cause whatsoever, and Tenant hereby covenants and agrees that it
     will at all times indemnify, protect, defend and hold safe and harmless the
     property, the Landlord (including, without limitation, the trustee and
     beneficiaries if Landlord is a trust), Landlord's employees, agents,
     servants, guests, invitees, licensees and visitors (collectively, the
     "Indemnified Parties") from any loss, liability, claims, suits, costs,
     expenses, including, without limitation, attorneys' fees, and damages, both
     real and alleged, arising out of: (a) the use or occupancy of the Premises,
     (b) any failure of Tenant to comply with the terms of this Lease, and (c)
     the acts or omissions of Tenant and its employees, agents, servants,
     guests, invitees, licensees and visitors; except injury to persons or
     damage to property the sole cause of which is the gross negligence of
     Landlord. In no event shall the Indemnified Parties be liable for
     consequential damages. If and to the extent that Tenant is obligated to
     indemnify, defend or hold harmless Landlord or Landlord's agents from any
     claims arising from its use of the Premises or any act or failure to act by
     Tenant or Tenant's Agents or otherwise, Tenant expressly waives, to and in
     favor of Landlord and Landlord's agents, its statutory workers compensation
     act employers immunity relative to any injury to an employee or employees
     of Tenant.

15.  CONDEMNATION.

     A. If the whole or any substantial part of the Premises should be taken for
     any public or quasi-public use under governmental law, ordinance or
     regulation, or by right of eminent domain, or by private purchase in lieu
     thereof and the taking would prevent or materially interfere with the use
     of the Premises for the purpose for which they are being used as determined
     by Landlord, this Lease shall terminate and the rent shall be abated during
     the unexpired portion of this Lease, effective when the physical taking of
     said Premises shall occur.

     B. If part of the Premises shall be taken for any public or quasi-public
     use under any governmental law, ordinance or regulation, or by right of
     eminent domain, or by private purchase in lieu thereof, and this Lease is
     not terminated as provided in Subparagraph 15(A), this Lease shall not
     terminate but the rent payable hereunder during the unexpired portion of
     this Lease shall be reduced to such extent as the Premises are not useable.

     C. In the event of any such taking or private purchase in lieu thereof,
     Landlord shall be entitled to receive the entire award, Tenant shall be
     entitled to make a claim for a separate award for Tenant's

                                       9
<PAGE>

     relocation expenses in any condemnation proceedings so long as Tenant's
     claim does not reduce the amount of Landlord's award.

16.  HOLDING OVER. Tenant will, at the termination of this Lease by lapse of
     time or otherwise, yield up immediate possession to Landlord. If Landlord
     agrees in writing that Tenant may hold over after the expiration or
     termination of this Lease, unless the parties hereto otherwise agree in
     writing on the terms of such holding over, the hold over tenancy shall be
     subject to termination by Landlord at any time upon not less than five (5)
     days advance written notice, or by Tenant at any time upon not less than
     thirty (30) days advance written notice, and all of the other terms and
     provisions of this Lease shall be applicable during that period, except
     that Tenant shall pay Landlord from time to time upon demand, as rental for
     the period of any hold over, an amount equal to one and one-half (1-1/2)
     the Monthly Base Rent in effect on the termination date, plus all
     additional rental as defined herein, computed on a daily basis for each day
     of the hold over period. No holding over by Tenant, whether with or without
     consent of Landlord, shall operate to extend this Lease except as otherwise
     expressly provided. The preceding provisions of this Paragraph 16 shall not
     be construed as Landlord's consent for Tenant to hold over.

17.  QUIET ENJOYMENT. In the event this Lease is a sublease, then Tenant agrees
     to take the Premises subject to the provisions of the prior leases.
     Landlord covenants that Tenant, upon paying the rental herein set forth and
     performing its other covenants and agreements herein set forth, shall
     peaceably and quietly have, hold and enjoy the Premises for the term hereof
     without hindrance from Landlord, subject to the terms and provisions of
     this Lease.

18.  EVENTS OF DEFAULT. The following events shall be deemed to be events of
     default by Tenant under this Lease:

     A.   Tenant shall fail to pay any installment of the rent herein reserved
     when due, or any payment with respect to taxes hereunder when due, or any
     other payment or reimbursement to Landlord required herein when due, and
     such failure shall continue for a period of five (5) days from the date
     such payment was due.

     B.   Insolvency of Tenant; an assignment by Tenant for the benefit of
     creditors; the filing by Tenant of a voluntary petition in bankruptcy; an
     adjudication that Tenant is bankrupt or the appointment of a receiver of
     the properties of Tenant; the filing of an involuntary petition of
     bankruptcy and failure of Tenant to secure a dismissal of the petition
     within thirty (30) days after filing; attachment of or the levying of
     execution on the leasehold interest and failure of Tenant to secure
     discharge of the attachment or release of the levy of execution within ten
     (10) days. If Tenant consists of two or more individuals or business
     entities, the events of default specified in this Paragraph 18 shall apply
     to each individual unless, within ten (10) days after the event of default
     occurs, the remaining individuals produce evidence satisfactory to Landlord
     that they have unconditionally acquired the interest of the one causing the
     default. If this Lease has been assigned, the events of default so
     specified shall apply only with respect to the one then exercising the
     rights of Tenant under this Lease.

     C.   Tenant shall vacate or abandon any substantial portion of the
     Premises. Failure of Tenant for ten (10) days or more to occupy the
     Premises for one or more of the purposes permitted under this Lease, unless
     such failure is excused under other provisions of this Lease, shall be an
     abandonment of the property.

     D.   If any information furnished by or on behalf of Tenant to Landlord in
     connection with the entry of this Lease is determined to have been
     materially false, misleading or incomplete when made.

     E.   Tenant shall fail to comply with any term, provision, condition or
     covenant of this Lease (other than the foregoing in this Paragraph 18), and
     shall not cure such failure within twenty (20) days after written notice
     thereof to Tenant. If the default is of such a nature that it cannot be
     completely remedied within the 20-day period, this provision shall be
     complied with if Tenant begins correction of the default within the 20-day
     period and thereafter proceeds with reasonable diligence and in good faith
     to effect the remedy as soon as practicable. Landlord shall not be required
     to give such written notice more than once during any single twelve (12)
     month period for the failure to perform the same covenant and upon the
     second failure, Landlord may, at its option, deem such failure as an
     automatic event of default, without notice to Tenant.

19.  REMEDIES. Upon the occurrence of any such events of default described in
     Paragraph 18 hereof, Landlord shall have the option to pursue any one or
     more of the following remedies without any notice or demand whatsoever.

     A.   Landlord may accelerate all rent payments due hereunder, the present
     value of which shall then become immediately due and payable.

     B.   Terminate this Lease, in which event Tenant shall immediately
     surrender the Premises to Landlord, and if Tenant fails so to do, Landlord
     may, without prejudice to any other remedy which it may have for possession
     or arrearages in rent, enter upon and take possession of the Premises and
     expel or remove Tenant and any other person who may be occupying such
     Premises or any part thereof, by force if necessary, without being liable
     for prosecution or any claim of damages therefor, and Tenant shall pay to
     Landlord on demand the amount of all loss and damage which Landlord may
     suffer by reason of such termination, whether through inability to relet
     the Premises on satisfactory terms or otherwise. Landlord's right to any
     and all damages shall survive termination of the lease.

     C.   Enter upon and take possession of the Premises and expel or remove
     Tenant and any other person who may be occupying such Premises or any part
     thereof, by force if necessary, without being liable for prosecution or any
     claim for damages therefor, and relet the Premises for such terms ending

                                       10
<PAGE>

     before, on or after the expiration date of the Lease Term, at such rentals
     and upon such other conditions (including concessions and prior occupancy
     periods) as Landlord in its sole discretion may determine, and receive the
     rent therefor; and Tenant agrees to pay to the Landlord on demand any
     deficiency that may arise by reason of such reletting together with all
     costs incurred by Landlord in connection with such reletting. Landlord
     shall have no obligation to relet the Premises or any part thereof in
     advance of any other available space controlled by Landlord and shall not
     be liable for refusal or failure to relet or in the event of reletting for
     refusal or failure to collect any rent due upon such reletting. In the
     event Landlord is successful in reletting the Premises at a rental in
     excess of that agreed to be paid by Tenant pursuant to the terms of this
     Lease, Landlord and Tenant each mutually agree that Tenant shall not be
     entitled, under any circumstances, to such excess rental, and Tenant does
     hereby specifically waive any claim to such excess rental.

     D.   Enter upon the Premises, by force if necessary, without being liable
     for prosecution or any claim for damages therefor, and do whatever Tenant
     is obligated to do under the terms of this Lease; and Tenant agrees to
     reimburse Landlord on demand for any expenses which Landlord may incur in
     thus effecting compliance with Tenant's obligations under this Lease, and
     Tenant further agrees that Landlord shall not be liable for any damages
     resulting to the Tenant from such action, whether caused by the negligence
     of Landlord or otherwise.

     E.   Whether or not Landlord retakes possession or relets the Premises,
     Landlord shall have the right to recover unpaid rent and all damages caused
     by Tenant's default, including attorney's fees. Damage shall include,
     without limitation: all rentals lost; all legal expenses and other related
     costs incurred by Landlord following Tenant's default; all costs incurred
     by Landlord in restoring the Premises to good order and condition, or in
     remodeling, renovating or otherwise preparing the Premises for reletting;
     all costs, including, without limitation, any brokerage commissions; and
     the value of Landlord's time; plus interest thereon at the rate of eighteen
     percent (18%) per annum from the date of expenditure until fully repaid.

     F.   In the event Tenant fails to pay any installment of rent, additional
     rent or other charges hereunder as and when such installment is due, to
     help defray the additional cost to Landlord for processing such late
     payments Tenant shall pay to Landlord on demand a late charge in an amount
     equal to five percent (5%) of such installment. The provision for such late
     charge shall be in addition to all of Landlord's other rights and remedies
     hereunder or at law and shall not be construed as liquidated damages or as
     limiting Landlord's remedies in any manner. The parties agree that such
     late charge is a reasonable amount to defray Landlord's costs arising out
     of Tenant's late payment.

     G.   Landlord may sue periodically to recover damages during the period
     corresponding to the remainder of the Lease Term, and no action for damages
     shall bar a later action for damages subsequently accruing.

     H.   Pursuit of any of the foregoing remedies shall not preclude pursuit of
     any of the other remedies herein provided or any other remedies provided by
     law, such remedies being cumulative and nonexclusive, nor shall pursuit of
     any remedy herein provided constitute a forfeiture or waiver of any rent
     due to Landlord hereunder or of any damages accruing to Landlord by reason
     of the violation of any of the terms, provisions, conditions, and covenants
     herein contained. No act or thing done by Landlord or its agents shall be
     deemed a termination of this Lease or an acceptance of the surrender of the
     Premises, and no agreement to terminate this Lease or accept a surrender of
     the Premises shall be valid unless in writing signed by Landlord. No waiver
     by Landlord of any violation or breach of any of the terms, provisions and
     covenants herein contained shall be deemed or construed to constitute a
     waiver of any other violation or breach of any of the terms, provisions,
     conditions, and covenants herein contained. Landlord's acceptance of the
     payment of rental or other payments hereunder after the occurrence of an
     event of default shall not be construed as a waiver of such default, unless
     Landlord so notifies Tenant in writing. Forbearance by Landlord to enforce
     one or more of the remedies herein provided upon an event of default shall
     not be deemed or construed to constitute a waiver of such default or of
     Landlord's right to enforce any such remedies with respect to such default
     or any subsequent default.

20.  ATTORNEY'S FEES. In the event it becomes necessary for either party to
     enforce any rights incident to this Lease, in a court of law or equity, the
     prevailing party shall be entitled to recover reasonable attorney's fees
     (including those on appeal) in addition to damages or other appropriate
     relief. If Landlord places any amounts owing under this Lease in the hands
     of an attorney or other party for collection or enforcement of the
     covenants contained herein, as a consequence of a default, as defined
     herein, the party in default agrees to pay reasonable fees and expenses so
     incurred, even though no suit or action is instituted.

21.  LANDLORD'S LIEN. In addition to any statutory lien for rent in Landlord's
     favor, Landlord shall have and Tenant hereby grants to Landlord a
     continuing security interest for all rentals and other sums of money
     becoming due hereunder from Tenant, upon all goods, wares, equipment,
     fixtures, furniture, inventory, accounts, contract rights, chattel paper
     and other personal property of Tenant situated on the Premises, and such
     property shall not be removed therefrom without the consent of Landlord
     until all arrearages in rent as well as any and all other sums of money
     then due to Landlord hereunder shall first have been paid and discharged.
     In the event of a default under this Lease, Landlord shall have, in
     addition to any other remedies provided herein or by law, all rights and
     remedies under the Uniform Commercial Code or other applicable law,
     including, without limitation, the right to sell the property described in
     this Paragraph 21 at public or private sale. Tenant hereby agrees to
     execute such financing statements and other instruments necessary or
     desirable in Landlord's discretion to perfect the security interest hereby
     created. Any statutory lien for rent is not hereby waived, the express
     contractual lien herein granted being in addition and supplementary
     thereto.

                                       11
<PAGE>

22.  MORTGAGES. Tenant accepts this Lease subject and subordinate to any
     mortgage(s) and/or deed(s) of trust now or at any time hereafter
     constituting a lien or charge upon the Premises or the improvements
     situated thereon; provided, however, that if the mortgagee, trustee, or
     holder of any such mortgage or deed of trust elects to have Tenant's
     interest in this Lease superior to any such instrument, then by notice to
     Tenant from such mortgagee, trustee or holder, this Lease shall be deemed
     superior to such lien, whether this Lease was executed before or after said
     mortgage or deed of trust. This provision shall be self operative, and no
     further instrument of subordination shall be necessary. In confirmation
     thereof, Tenant shall at any time hereafter on demand execute any
     instruments, releases or other documents which may be required by any
     mortgagee for the purpose of subjecting and subordinating this Lease to the
     lien of any such mortgage and confirming such other information as such
     mortgagee may reasonably require. Upon written request, Tenant shall
     provide Landlord with financial statements certified by Tenant as accurate
     and up to date, showing with reasonable detail Tenant's financial
     condition.

23.  BROKER'S COMMISSIONS. Except for      N/A       ("Tenant's Broker"), Tenant
                                      ---------------
     represents and warrants that it has not engaged any broker, agent or finder
     who would be entitled to any commission or fee in connection with the
     negotiation and execution of this Lease. Tenant shall indemnify, protect,
     defend and hold the Indemnified Parties harmless against any and all claims
     for any brokerage commissions and all costs, expenses and liabilities in
     connection therewith, including attorneys' fees and expenses arising out of
     any charge or claim for a commission or fee by any broker, agent or finder
     on the basis of any agreements made or alleged to have been made by or on
     behalf of Tenant except for Tenant's Broker and any brokers with whom
     Landlord has an express written brokerage agreement.

24.  CONSTRUCTION LIENS. Tenant shall have no authority, express or implied, to
     create or place any lien or encumbrance of any kind or nature whatsoever
     upon, or in any manner to bind, the Premises or to charge the rentals
     payable hereunder for any claim in favor of any person dealing with Tenant,
     including those who may furnish materials or perform labor for any
     construction or repairs. Tenant covenants and agrees that it will pay or
     cause to be paid all sums legally due and payable by it on account of any
     labor performed or materials furnished in connection with any work
     performed on the Premises on which any lien is or can be validly and
     legally asserted against its leasehold interest in the Premises or the
     improvements thereon and that it will indemnify, protect, defend and hold
     the Indemnified Parties harmless from any and all claims, liabilities,
     losses, costs or expenses (including attorneys' fees) based on or arising
     out of asserted claims or liens against the right, title and interest of
     the Landlord in the Premises or under the terms of this Lease.

25.  NOTICES. Each provision of this instrument or of any applicable
     governmental laws, ordinances, regulations and other requirements with
     reference to the sending, mailing or delivery of any notice or the making
     of any payment by Landlord to Tenant or with reference to the sending,
     mailing or delivery of any notice or the making of any payment by Tenant to
     Landlord shall be deemed to be complied with when and if the following
     steps are taken:

     A.   All rent and other payments required to be made by Tenant to Landlord
     hereunder shall be payable to Landlord at the address herein below set
     forth or at such other address as Landlord may specify from time to time by
     written notice delivered in accordance herewith. Tenant's obligation to pay
     rent and any other amounts to Landlord under the terms of this Lease shall
     not be deemed satisfied until such rent and other amounts have been
     actually received by Landlord.

     B.   All payments required to be made by Landlord to Tenant hereunder shall
     be payable to Tenant at the address herein below set forth, or at such
     other address within the continental United States as Tenant may specify
     from time to time by written notice delivered in accordance herewith.

                                       12
<PAGE>

     C.   Any notice or document required or permitted to be delivered hereunder
     shall be deemed to be delivered whether actually received or not when
     deposited in the United States Mail, postage prepaid, Certified or
     Registered Mail, addressed to the parties hereto at the respective
     addresses set out below, or at such other address as they have theretofore
     specified by written notice delivered in accordance herewith:

               LANDLORD:                                    TENANT:

          RIGGS & COMPANY, a division of        HOMEGROCER.COM, INC.,
          RIGGS BANK N.A., as trustee of the    a Washington corporation
          Multi-Employer Property Trust         10230 NE Points Drive
                                                Kirkland, Washington  98033-7879

     c/o  Trammell Crow Company
          8930 SW Gemini Drive
          Beaverton, Oregon  97008-7123

     If and when included within the term "Landlord", as used in this
     instrument, there are more than one person, firm or corporation, all shall
     jointly arrange among themselves for their joint execution of such a notice
     specifying some individual at a specific address for the receipt of notices
     and payments to Landlord. If and when included within the term "Tenant", as
     used in this instrument, there are more than one person, firm or
     corporation, all shall jointly arrange among themselves for their joint
     execution of such a notice specifying some individual at a specific address
     within the continental United States for the receipt of notices and
     payments to Tenant. All parties included within the terms "Landlord" and
     "Tenant", respectively, shall be bound by notices given in accordance with
     the provisions of this paragraph to the same effect as if each had received
     such notice.

26.  MISCELLANEOUS.

     A.   Words of any gender used in this Lease shall be held and construed to
     include any other gender, and words in the singular number shall be held to
     include the plural, unless the context otherwise requires.

     B.   The terms, provisions and covenants and conditions contained in this
     Lease shall apply to, inure to the benefit of, and be binding upon, the
     parties hereto and upon their respective heirs, legal representatives,
     successors and permitted assigns, except as otherwise herein expressly
     provided. Landlord shall have the right to assign any of its rights and
     obligations under this Lease.

     C.   Each party agrees to furnish to the other, promptly upon demand, a
     corporate resolution, proof of due authorization by partners, or other
     appropriate documentation evidencing the due authorization of such party to
     enter into this Lease. If Tenant is a partnership, company, corporation or
     other entity, each individual executing this Lease on behalf of Tenant
     represents and warrants to Landlord that he or she is duly authorized to so
     execute and deliver this Lease and that all partnership, company,
     corporation or other entity actions and consents required for execution of
     this Lease have been given, granted or obtained.

     D.   The captions inserted in this Lease are for convenience only and in no
     way define, limit or otherwise describe the scope or intent of this Lease,
     or any provision hereof, or in any way affect the interpretation of this
     Lease.

     E.   Tenant agrees from time to time within ten (10) days after request of
     Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
     certificate stating that this Lease is in full force and effect, the date
     to which rent has been paid, the unexpired term of this Lease and such
     other matters pertaining to this Lease as may be requested by Landlord,
     Landlord's lender, a prospective lender or a prospective purchaser. It is
     understood and agreed that Tenant's obligation to furnish such estoppel
     certificates in a timely fashion is a material inducement for Landlord's
     execution of this Lease. If Tenant fails to respond within ten (10)
     business days of its receipt of a written request by Landlord as provided
     in this paragraph, such shall be a breach of this Lease and Tenant shall be
     deemed to have admitted the accuracy of any information supplied by
     Landlord to a prospective purchaser, mortgagee or assignee. The estoppel
     certificate Tenant shall be required to execute may be in, but is not
     limited to, the form attached hereto and incorporated herein by this
     reference as Exhibit D.

     (a) the date this Lease was executed and the date it expires; (b) the date
     Tenant entered into occupancy of the Premises; (c) the amount of monthly
     Base Rent and Additional Rent and the date to which such Base Rent and
     Additional Rent have been paid; and (d) certifying that (1) this Lease is
     in full force and effect and has not been assigned, modified, supplemented
     or amended in any way (or specifying the date of the agreement so affecting
     this Lease); (2) Landlord is not in breach of this Lease (or, if so, a
     description of each such breach) and that no event, omission or condition
     has occurred which would result, with the giving of notice or the passage
     of time, in a breach of this Lease by Landlord; (3) this Lease represents
     the entire agreement between the parties with respect to the Premises; (4)
     all required contributions by Landlord to Tenant on account of Tenant
     Improvements have been received; (5) on the date of execution, there exist
     no defenses or offsets which the Tenant has against the enforcement of this
     Lease by the Landlord; (6) no Base Rent, Additional Rent or other sums
     payable under this Lease have been paid in advance except for Base Rent and
     Additional Rent for the then current month; (7) no security has been
     deposited with Landlord (or, if so, the amount of such security); (8) it is
     intended that any Tenant's statement may be relied upon by a prospective
     purchaser or mortgagee of Landlord's interest or an assignee of any such
     mortgagee; (9) the representations in the paragraph captioned

                                       13
<PAGE>

     "ERISA Representations" remain true and correct; and (10) such other
      ---------------------
     information as may be reasonably requested by Landlord.

     F.   This Lease may not be altered, changed, modified or amended except by
     an instrument in writing signed by both parties hereto. Notwithstanding
     anything contained in the Lease to the contrary, including without
     limitation, Landlord's agents, only officers of Riggs Bank N.A., are
     authorized to amend, renew or terminate this Lease, or to compromise any of
     Landlord's claims under this Lease or to bind Landlord in any manner.
     Without limiting the effect of the previous sentence, no property manager
     or broker shall be considered an authorized agent of Landlord to amend,
     renew or terminate this Lease or to compromise any of Landlord's claims
     under this Lease or to bind Landlord in any manner

     G.   All indemnity obligations and all other obligations of Tenant
     hereunder not fully performed as of the expiration or earlier termination
     of the term of this Lease shall survive the expiration or earlier
     termination of the Term hereof, including, without limitation, all payment
     obligations with respect to taxes and insurance and all obligations
     concerning the condition of the Premises. Upon the expiration or earlier
     termination of the Term hereof, and prior to Tenant vacating the Premises,
     Tenant shall pay to Landlord any amount reasonably estimated by Landlord as
     necessary to put the Premises, including, without limitation, all heating
     and air conditioning systems and equipment therein, in good condition and
     repair pursuant to Paragraph 10(B) hereof. Tenant shall also, prior to
     vacating the Premises, pay to Landlord the amount, as estimated by
     Landlord, of Tenant's obligation hereunder for real estate taxes and
     insurance premiums for the year in which the Lease expires or terminates.
     All such amounts shall be used and held by Landlord for payment of such
     obligations of Tenant hereunder, with Tenant being liable for any
     additional costs therefor upon demand by Landlord, or with any excess to be
     returned to Tenant after all such obligations have been determined and
     satisfied, as the case may be. Any security deposit held by Landlord shall
     be credited against the amount payable by Tenant under this Paragraph
     26(G).

     H.   If any clause or provision of this Lease is illegal, invalid or
     unenforceable under present or future laws effective during the Term of
     this Lease, then and in that event, it is the intention of the parties
     hereto that the remainder of this Lease shall not be affected thereby, and
     it is also the intention of the parties to this Lease that in lieu of each
     clause or provision of this Lease that is illegal, invalid or
     unenforceable, there be added as part of this Lease contract a clause or
     provision as similar in terms to such illegal, invalid or unenforceable
     clause or provision as may be possible and be legal, valid and enforceable.

     I.   Because the Premises are on the open market and are presently being
     shown, this Lease shall be treated as an offer with the Premises being
     subject to prior lease and such offer subject to withdrawal or
     non-acceptance by Landlord or to other use of the Premises without notice,
     and this Lease shall not be valid or binding unless and until accepted by
     Landlord in writing and a fully executed copy delivered to both parties
     hereto.

     J.   All references in this Lease to "the date hereof" or similar
     references shall be deemed to refer to the last date, in point of time, on
     which all parties hereto have executed this Lease.

     K.   Tenant represents to Landlord that with the exception of this Lease,
     neither the Tenant nor any affiliate of the Tenant is a tenant under a
     lease or any other tenancy arrangement (1) with (a) Riggs & Company, a
     division of Riggs Bank N.A., as trustee of the Multi-Employer Property
     Trust; (b) The Riggs Bank N.A., as trustee of the Multi-Employer Property
     Trust; (c) the Multi-Employer Property Trust; (d) the National Bank of
     Washington Multi-Employer Property Trust, the previous name of the
     Multi-Employer Property Trust; (e) The Riggs National Bank of Washington,
     D.C., as trustee of the Multi-Employer Property Trust; (f) Alameda
     Industrial Properties Joint Venture; (g) Harman International Business
     Campus Joint Venture; (h) Beaverton-Redmond Tech Properties; (i) Corporate
     Drive Corporation as trustee of the Corporate Drive Nominee Realty Trust;
     (j) Goldbelt Place Joint Venture; (k) BOCA 1515, a joint venture; (l)
     Arboretum Lakes-I, L.L.C., a Delaware limited liability company; (m)
     Village Green of Rochester Hills Associates, L.L.C.; (n) Pine Street
     Development, L.L.C.; or (o) MEPT Realty LLC; or (2) involving any property
     in which any one or more of the entities named in clauses (1) (a) through
     (d) are known by the Tenant to have an ownership interest.

     L.   Tenant shall not, and shall not cause or allow any other party to,
     construct, use, deposit, store, dispose, place, or locate on or about the
     Premises or the Project any hazardous substances (as later defined) without
     the prior written consent of Landlord, which shall not be unreasonably
     withheld as long as Tenant demonstrates to Landlord's reasonable
     satisfaction that: (a) the nature and quality of any hazardous material is
     necessary, useful, and appropriate to Tenant's business conducted at the
     Premises; (b) the hazardous material will be used, kept, and stored with
     the highest degree of care and in a manner that complies with all
     governmental laws, ordinances, regulations, orders, and policies regulating
     any such hazardous material so brought upon or used or kept in or about the
     Premises; (c) such hazardous substances are disposed of off the Premises
     and the Project, in a disposal site licensed or designated for such
     hazardous substances, with the utmost care and caution and in a manner
     consistent with applicable governmental laws, ordinances, regulations,
     orders and policies; (d) Tenant pays as additional rent any increase in the
     premiums charged Landlord for insurance coverage by reason of Tenant's
     storage, placement, location, or use of hazardous substances or any
     premiums for additional insurance coverages deemed appropriate by Landlord
     because of the presence of such hazardous substances; and (e) Tenant
     procures any insurance coverages demanded by Landlord and naming the
     Landlord and such other parties as Landlord requires as additional
     insureds.

     Tenant shall indemnify, defend, and hold the Indemnified Parties harmless
     from any and all claims, judgments, damages, penalties, fines, costs,
     liabilities, or losses (including, without limitation, diminution in value
     of the Premises, damages for the loss or restriction on use of rentable or
     usable space or of any

                                       14
<PAGE>

     amenity of the Premises, damages arising from any adverse impact on
     marketing of space, and sums paid in settlement of claims, attorneys' fees,
     consultant fees, and expert fees) which arise during or after the Lease
     Term as a result of contamination to the Premises by hazardous substances
     during the term of this Lease or to the Property as a result of an act or
     omission of Tenant, and Tenant's agents or employees. This indemnification
     of Landlord by Tenant includes, without limitation, costs incurred in
     connection with any investigation of site conditions or any cleanup,
     remedial, removal, or restoration work required by any federal, state, or
     local governmental agency or political subdivision because of hazardous
     substances present in the soil or ground water on or under the Premises.
     Without limiting the foregoing, if the presence of any hazardous substances
     on the Premises occurs during the term of this Lease, Tenant shall promptly
     take all actions at its sole expense as are necessary to return the
     Premises to the condition existing prior to the release of any such
     hazardous substances to the Premises, provided that Landlord's approval of
     such actions shall first be obtained, which approval shall not be
     unreasonably withheld so long as such actions would not potentially have
     any material adverse long-term or short-term effect on the Premises. The
     foregoing indemnity shall survive the expiration or earlier termination of
     this Lease.

     The term "hazardous substances" shall include (a) any chemical, material,
     element, compound, solution, mixture, substance, or other matter of any
     kind whatsoever which Is a hazardous substance as defined in, or related by
     the Federal Comprehensive Environmental Response Compensation and Liability
     Act, 42 USC ss.9601 et seq., as amended; the regulations promulgated from
     time to time thereunder; the wastes listed in the United States Department
     of Transportation Hazardous Materials Table (49 CFR 172.101); the United
     States Environmental Protection Agency Hazardous Substances (40 CFR Part
     302), and amendments thereto; environmental laws and regulations
     administered by the Environmental Protection Agency or its delegees;
     similar laws and regulations of the State of Oregon, City of Tualatin, or
     any state or local governmental organization or agency, or additional or
     substitute laws or regulations with respect to the same subject matter
     enacted or promulgated by the federal, state, local, or quasi-governmental
     organization or agency; and (b) asbestos or materials containing asbestos,
     petroleum products, or such other substances, materials, and wastes that
     are or become regulated under the applicable local, state, or federal laws,
     whether or not within clause (a).

     M.   This Lease shall be governed by and construed in accordance with the
     laws of the State of Oregon.

     N.   For any litigation, action or dispute arising out of or in connection
     with the agreement, the matter shall be tried and determined by a judge
     alone, WITHOUT A JURY. All parties shall submit to the jurisdiction of an
     appropriate court in the State of Oregon, with venue in the County of
     Washington. Tenant irrevocably consents to the service of process of any
     action or proceeding at the address of the Premises.

     O.   If Tenant fails to perform any obligation under this Lease, Landlord
     shall have the option to do so after thirty (30) days written notice to
     Tenant. All of Landlord's expenditures to correct the default shall be
     reimbursed by Tenant on demand with interest at a rate of one and one-half
     percent (1-1/2%) per month from the date of expenditure by Landlord.

     P.   If Tenant shall request Landlord's consent under this Lease and
     Landlord shall fail or refuse to give such consent, Tenant shall not be
     entitled to any damages for any withholding by Landlord of its consent.
     Tenant's sole remedy shall be an action for specific performance or
     injunction and that remedy shall be available only in those instances where
     Landlord has expressly agreed in writing not to unreasonably withhold
     Landlord's consent. Q. This Lease shall not be recorded without the consent
     in writing of Landlord. If Landlord consents, Landlord shall execute and
     acknowledge a memorandum of this Lease in a form suitable for recording,
     and Tenant may record the memorandum.

     R.   This Lease contains the entire agreement between the parties
     concerning the subject matter and supersedes any prior agreements or
     understandings related thereto. There are merged herein all prior and
     collateral representations, promises, and conditions in connection with the
     subject matter hereof. This Lease supersedes and is in lieu of all existing
     agreements or arrangements between the parties relating to the Premises
     identified herein.

     S.   No payment by Tenant or receipt by Landlord of an amount less than the
     Base Rent or additional rent or any other sum due and payable under this
     Lease shall be deemed to be other than a payment on account of the Base
     Rent, additional rent or other such sum, nor shall any endorsement or
     statement on any check or any letter accompanying any check or payment be
     deemed an accord and satisfaction, nor preclude Landlord's right to recover
     the balance of any amount payable or Landlord's right to pursue any other
     remedy provided in this Lease or at law.

     T.   The waiver by Landlord of any covenant or condition contained in this
     Lease shall not be deemed to be a waiver of any subsequent breach of such
     covenant or condition nor shall any custom or practice which may develop
     between the parties in the administration of this Lease be construed to
     waive or lessen the rights of Landlord to insist on the strict performance
     by Tenant of all of the covenants and conditions of this Lease. No act or
     thing done by Landlord or Landlord's Agents during the Lease Term shall be
     deemed an acceptance or a surrender of the Premises, and no agreement to
     accept a surrender of the Premises shall be valid unless made in writing
     and signed by Landlord. The mention in this Lease of any particular remedy
     shall not preclude Landlord from any other remedy it might have, either
     under this Lease or at law, nor shall the waiver of or redress for any
     violation of any covenant or condition in this Lease or in any of the rules
     or regulations attached to this Lease or later adopted by Landlord, prevent
     a

                                       15
<PAGE>

     subsequent act, which would have originally constituted a violation, from
     having all the force and effect of an original violation. The receipt by
     Landlord of Base Rent, additional rent or any other sum payable under this
     Lease with knowledge of a breach of any covenant or condition in this Lease
     shall not be deemed a waiver of such breach. The failure of Landlord to
     enforce any of the rules and regulations attached to this Lease or later
     adopted, against Tenant or any other tenant in the Building, shall not be
     deemed a waiver. Any waiver by Landlord must be in writing and signed by
     Landlord to be effective.

     U.   In the event that Landlord shall be delayed, hindered in or prevented
     from the performance of any act or obligation required under this Lease by
     reason of acts of God, strikes, lockouts, labor troubles or disputes,
     inability to procure or shortage of materials or labor, failure of power or
     utilities, delay in transportation, fire, vandalism, accident, flood,
     severe weather, other casualty, governmental requirements (including
     mandated changes in the Plans and Specifications or the Tenant Improvements
     resulting from changes in pertinent governmental requirements or
     interpretations thereof), riot, insurrection, civil commotion, sabotage,
     explosion, war, natural or local emergency, acts or omissions of others,
     including Tenant, or other reasons of a similar or dissimilar nature not
     solely the fault of, or under the exclusive control of, Landlord, then
     performance of such act or obligation shall be excused for the period of
     the delay and the period for the performance of any such act or obligation
     shall be extended for the period equivalent to the period of such delay.

     V.   Time is of the essence with respect to the performance of every
     covenant and condition of this Lease.

27.  LIABILITY OF LANDLORD. Landlord has executed this Lease by its trustee
     signing solely in a representative capacity. Notwithstanding anything
     contained in this Lease to the contrary, Tenant confirms that the covenants
     of Landlord are made and intended, not as personal covenants of the
     trustee, or for the purpose of binding the trustee personally, but solely
     in the exercise of the representative powers conferred upon the trustee by
     its principal. Liability with respect to the entry and performance of this
     Lease by or on behalf of Landlord, however it may arise, shall be asserted
     and enforced only against the Landlord's estate and interest in the
     Building and Landlord shall have no personal liability in the event of any
     claim against Landlord arising out of or in connection with this Lease, the
     relationship of Landlord and Tenant or Tenant's use of the Premises.
     Further, in no event whatsoever shall any Landlord's Agent have any
     liability or responsibility whatsoever arising out of or in connection with
     this Lease, the relationship of Landlord and Tenant or Tenant's use of the
     Premises. Any and all personal liability, if any, beyond that which may be
     asserted under this paragraph, is expressly waived and released by Tenant
     and by all persons claiming by, through or under Tenant.

28.  ACCESS LAWS.

     A.   As used in this Paragraph, the term "Access Laws" shall mean the
     Americans with Disabilities Act of 1990 (including the Americans with
     Disabilities Act Accessibility Guidelines for Buildings and Facilities),
     the Fair Housing Amendments Act of 1988, all state and local laws or
     ordinances related to handicapped access, or any statute, rule, regulation,
     ordinance, order of governmental bodies or regulatory agencies, or order or
     decree of any court adopted or enacted with respect to any of the
     foregoing. The term Access Laws shall include all Access Laws now in
     existence or hereafter enacted, adopted or applicable.

     B.   Landlord makes no representations regarding the compliance of the
     Premises or the Project with Access Laws; provided that, if any
     improvements or alterations constructed by Landlord do not comply with
     Access Laws, Landlord shall be responsible for correcting such defects if
     and to the extent required by law.

     C.   Tenant agrees to notify Landlord immediately if Tenant becomes aware
     of: (i) any condition or situation in or on the Premises which would
     constitute a violation of any Access Laws, or (ii) any threatened or actual
     lien, action or notice of the Premises not being in compliance with any
     Access Laws. Tenant shall inform Landlord of the nature of any such
     condition, situation, lien, action or notice and of the action Tenant
     proposes to take in response thereto.

     D.   Tenant shall not alter or permit any assignee or subtenant or any
     other person to alter the Premises in any manner which would violate any
     Access Laws or increase Landlord's responsibilities for compliance with
     Access Laws, without the prior approval of the Landlord. In connection with
     any such approval, Landlord may require a certificate of compliance with
     Access Laws from an architect, engineer or other person acceptable to
     Landlord. Tenant agrees to pay the reasonable fees incurred by such
     architect, engineer or other third party in connection with the issuance of
     such certificate of compliance. Landlord's consent to any proposed Tenant
     alteration shall (a) not relieve Tenant of its obligations or indemnities
     contained in this paragraph or this Lease or (b) be construed as a warranty
     that such proposed alternation complies with any Access Law.

     E.   Tenant shall be solely responsible for all costs and expenses relating
     to or incurred in connection with bringing the Premises, the building in
     which the Premises are located and the common areas of the Project into
     compliance with the Access Laws if and to the extent such costs and
     expenses arise out of or relate to Tenant's use of the Premises or Tenant's
     modifications, improvements or alterations to the Premises after the date
     of this Lease.

     F.   Tenant agrees to indemnify, defend, protect and hold the Indemnified
     Parties harmless from and against any and all claims, demands, damages,
     losses, liens, liabilities, penalties, fines, lawsuits, and other
     proceedings and costs and expenses (including attorneys' fees) arising
     directly or indirectly from or

                                       16
<PAGE>

     out of, or in any way connected with, any activity on or use of the
     Premises or the Project by Tenant, its agents, employees, contractors,
     invitees, or any subtenant or concessionaire put into possession of all or
     any part of the Premises by Tenant, which activity or use results in the
     Premises violating any applicable Access Laws.

     G.   The provisions in this Paragraph shall supersede any other provisions
     in this Lease regarding Access Laws to the extent inconsistent with the
     provisions of this Paragraph. The provisions in this Paragraph shall
     survive the expiration of the Term or the termination of this Lease for any
     other reason whatsoever.

29.  ADDITIONAL PROVISIONS. None.

     LANDLORD:

     RIGGS & COMPANY, a division of RIGGS BANK N.A.,
     as trustee of the Multi-Employer Property Trust, a trust organized under 12
     C.F.R. Section 9.18

     By:  /s/ Leanne Tobias
        ___________________________________________

     Name:  Leanne Tobias
          __________________________________________

     Title: Managing Director
           _________________________________________

     Date:  5/11/00
          __________________________________________

     TENANT:

     HOMEGROCER.COM, INC., a Washington D.C corporation

     By: /s/ Terry Drayton
        ____________________________________________

     Name:   Terry Drayton
          __________________________________________

     Title: President
           _________________________________________

     Date:  April 27, 2000
          __________________________________________

                                       17
<PAGE>

District of Columbia         )
            -----------------) ss.
             ________________)

     This instrument was acknowledged before me this 15 day of May, 2000 by
Leanne Tobias, who is the Managing Director of Riggs Bank N.A., as trustee of
the Multi-Employer Property Trust.

                                      /s/ William R. Scott
                                      ----------------------------------------
                                      Notary Public for District of Columbia
                                      My commission expires___________________

STATE OF WASHINGTON)
                   ) ss.
County of King     )

     This instrument was acknowledged before me this 27th day of April, 2000 by
J. Terrence Drayton, who is the President of HomeGrocer.com, Inc., a Washington
Corporation.

                                    /s/  Ursula M. Lazo
                                    ------------------------------------------
                                    Notary Public for Kirkland, WA
                                    My commission expires 8-4-2003

                                       18
<PAGE>

                                   EXHIBIT A
                                   ------- -

                          [Site map of the premises]
<PAGE>

                                   EXHIBIT B
                                   ---------

                               Legal Description

A tract of land situated in the S.W. 1/4 of Section 23, T2S, R1W, W.M., City of
Tualatin, Washington County, Oregon, being more particularly described as
follows:

Commencing at the south 1/4 corner of said Section 23; thence, along the east
line of the southeast quarter of the southwest quarter of said Section 23, North
0(degree)15'13" West, 32.89 feet to the true point of beginning; thence, along
the south line of that tract of land conveyed to Earl J. Itel, recorded July 16,
1969, in book 750, Page 279, South 89(degree)37'46" West, 1292.79 feet to the
southwest corner of said Itel tract; thence, along the west line of said Itel
tract, North 0(degree)01'38" East, 141.35 feet to a point on the southerly
right-of-way line of the Burlington Northern Railroad (formerly Spokane,
Portland, and Seattle Railroad); thence, along said southerly right-of-way,
being 25.00 feet from the centerline of the tracks, when measured at right
angles, North 56(degree)01'15" East, 483.57 feet; thence, continuing along said
right-of-way and along the arc of a 165.0 foot offset spiral curve to the right,
offset 25.0 southerly, having a centerline angle of 2(degree)28'30", (chord
bears North 57(degree)01'09" east, 163.90 feet) to a point of spiral to curve;
thence, continuing along said right-of-way and along the arc of a 1884.86 foot
radius curve to the right, through a central angle of 20(degree)33'00" (chord
bears North 68(degree)46'15" East, 672.42 feet) a distance of 676.03 feet to a
point of curve to spiral; thence, along the arc of a 165.0 foot offset spiral
curve to the right, offset 25.0 feet southerly, having a centerline spiral angle
of 2(degree)28'30" (chord bears North 80(degree)31'21" East, 163.90 feet), to a
point of spiral; thence, North 81(degree)31'15" East, 48.67 feet to a point on
the east line of that tract of land conveyed by deed to Earl J. Itel, recorded
in Book 750, Page 279, Washington county Deed Records; thence, along the east
line of said Itel tract, South 0(degree)07'32" West, 100.00 feet to the
southeast corner thereof; thence, along the south line of said Itel tract, North
89(degree)52'28" West, 85.12 feet to a point on the east line of the southeast
quarter of the southwest quarter of said Section 23; thence, along said east
line, South 0(degree)15'13" East, 593.31 feet; thence, South 44(degree)17'29"
East, 107.89 feet to a point that is 30.00 feet, when measured at right angles,
from the south line of said 1/4 of said Section 23; thence, parallel with the
south line of said N.E. 1/4, South 89(degree)29'45" West, 75.00 feet to a point
on the west line of said N.E. 1/4; thence, along said West line, North
0(degree)15'13" West, 2.89 feet to the true point of beginning.

Contains 677,845 square feet (15.56 acres).
<PAGE>

                                   EXHIBIT C
                                   ------- -

                  This Exhibit C is intentionally left blank.

<PAGE>

                                   EXHIBIT D
                                  TO TUALATIN
                           TUALATIN CORPORATE CENTER
                         TENANT'S ESTOPPEL CERTIFICATE

TO:       Riggs & Company, a division of Riggs Bank, N.A., as Trustee of the
          Multi-Employer Property Trust

               c/o  Kennedy Associates Real Estate Counsel, Inc.
                    2400 Financial Center Building
                    Seattle, Washington  98161

THIS IS TO CERTIFY:

     1.   That the undersigned is the Tenant under that certain Lease dated
___________, and, if applicable, amended on _______________, by and between
_____________, a ____, limited partnership ("Landlord") and the undersigned
("Tenant") covering those certain premises located as shown on the drawing made
part of the Lease (the "Premises").

     2.   That said Lease is in full force and effect and, except as noted in
Paragraph 1, above, has not been modified, changed, altered or amended in any
respect, and is the only lease or agreement (oral or written) between the Tenant
and Landlord affecting the Premises.

     3.   To the best of Tenant's knowledge, the information set forth below is
true and correct:

          (a) Square footage of the Premises:____________

          (b) Annual rent as of the commencement of Lease: $__________

          (c) Current annual rent (if different than at commencement): $________

          (d) Lease term commenced:___________________

          (e) Lease termination date:_________________

          (f) Rent is paid to and including:_________________

          (g) Security Deposit: $_________________

          (h) Prepaid rent for and in amount of: $_________________

          (i) Amount of current monthly Escrow Payment obligations with respect
              to taxes and other charges under Paragraph 4 of the Lease and with
              respect to insurance under Paragraph 13 of the Lease:

              Taxes:     $ ___________________

              Insurance: $ ___________________

          (j) Amount of current monthly payments due under Paragraph 7 of the
              Lease with respect to Common Area Maintenance charges: $ _________

          (k) Dates through which Tenant has paid monthly Escrow Payments and
              Common Area Maintenance charges:

              Escrow Payment for Taxes:______________________

              Escrow Payment for Insurance:__________________

              Common Area Maintenance:_______________________

     4.   The Tenant, unless otherwise stated in Exhibit A, now occupies the
Premises, accepts the Premises in their current condition subject only to those
punch list items shown on Exhibit A, if any, and is not aware of any defect in
the Premises except as shown on Exhibit A, if any. No rent has been collected in
the current month other than as disclosed in Paragraph 3. No free rent or other
concessions, benefits, or inducements other than as specified in the Lease have
been granted to Tenant or undertaken by the named Landlord. All required
contributions by Landlord to Tenant on account of tenant improvements have been
made or received as applicable.

     5.   The Tenant has not been granted any renewal, expansion or purchase
options and has not been granted any rights of first refusal except as disclosed
in writing in the Lease.
<PAGE>

     6.  Neither Tenant nor Landlord is in default under the Lease and there has
not occurred any event, which by notice or lapse of time or both or otherwise,
will result in any default. As of the date hereof and except as set forth in the
Lease, the undersigned is entitled to no credit, offset or deduction in the
rent. Tenant knows of no liabilities or obligations of Landlord which have
accrued but are unsatisfied under the Lease as of the date of this Certificate.

     7.  Tenant is required, under Paragraph 7 of the Lease, to pay a
proportionate share of certain costs associated with the "Common Area which
shall be defined from time to time by Landlord".

     8.  To the best of Tenant's knowledge, there are no actions, whether
  voluntary or otherwise, pending against the undersigned under the bankruptcy
  laws or other laws for the relief of debtors of the United States or any state
  thereof.

     9.  No party-in-interest relationship exists between one or more of the
pension plans identified in Section 26K of the Lease and the Tenant such that
the Lease will become a non-exempt, prohibited transaction under ERISA on
purchase of the Premises by the addressee.

     10. The term "party-in-interest" shall have the meaning assigned to it in
Section 3(14) of ERISA. ERISA shall mean the Employee Retirement Income Security
Act of 1974, as amended.

            DATED this ______________ day of _______________, 1999

                                                     TENANT:____________________<PAGE>

                                                                   Exhibit 10.11

                         Stafford Distribution Center

                             Industrial Net Lease

        ===============================================================

               LANDLORD:            Stafford Limited Partnership

               TENANT:              HomeGrocer.com, Inc.,
                                    a Washington corporation

               PREMISES ADDRESS:    Suite 310
                                    9445 S.W. Ridder Road
                                    Wilsonville, OR  97070

               PREMISES AREA:       83,462 Square Feet

        ===============================================================

                              City of Wilsonville

                               Washington County

                                    Oregon
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                         Page
-------                                                                                         ----
<S>                                                                                             <C>
1.     BASIC LEASE TERMS.....................................................................      1

2.     PREMISES..............................................................................      3

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

4.     RENT..................................................................................      4

       4.1  Base Rent........................................................................      4

       4.2  Rent Adjustment..................................................................      4

       4.3  Expenses.........................................................................      5

            (1)  Expenses Defined............................................................      6

            (2)  Exclusions..................................................................      7

            (3)  Tenant's Protest of Tax Assessments.........................................      8

            (4)  Annual Estimate of Expenses; Tenant's Share.................................      8

            (5)  Monthly Payment of Expenses; Annual Recap...................................      8

       4.4  Rent Without Offset..............................................................      9

       4.5  Late Charge......................................................................      9

5.     SECURITY DEPOSITS.....................................................................     10

       5.1  Prepaid Rent.....................................................................     10

       5.2  Letters of Credit................................................................     10

6.     CONDITION AND USE OF PREMISES AND PROJECT FACILITIES..................................     11

7.     SIGNS; ALARMS.........................................................................     12

8.     PERSONAL PROPERTY TAXES...............................................................     13

9.     PARKING...............................................................................     13

10.    UTILITIES.............................................................................     13

11.    MAINTENANCE...........................................................................     13

12.    ALTERATIONS...........................................................................     14

13.    RELEASE AND INDEMNITY.................................................................     15

14.    TENANT'S RIGHT TO AUDIT...............................................................     16

       14.1 Audit Threshold..................................................................     16

       14.2 Copy of Audit....................................................................     16

       14.3 Tenant Not in Default............................................................     16
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                          <C>
     14.4  Limits for Subtenants and Assignees...........................................    16

15.  INSURANCE AND WAIVER OF SUBROGATION.................................................    16

     15.1  Liability Insurance...........................................................    16

     15.2  Property Insurance............................................................    17

     15.3  Business Interruption Insurance...............................................    17

     15.4  Insurance Policies............................................................    17

     15.5  Waiver of Subrogation.........................................................    18

16.  DESTRUCTION.........................................................................    18

17.  CONDEMNATION........................................................................    18

     17.1  Definitions...................................................................    18

     17.2  Obligations to be Governed by Lease...........................................    19

     17.3  Total or Partial Taking.......................................................    19

     17.4  Award.........................................................................    19

18.  ASSIGNMENT OR SUBLEASE..............................................................    19

19.  DEFAULT.............................................................................    21

20.  LANDLORD'S REMEDIES.................................................................    22

     20.1  Remedies......................................................................    22

     20.2  Performance by Landlord of Tenant's Obligations...............................    22

21.  LANDLORD'S DEFAULT..................................................................    23

22.  ENTRY ON PREMISES...................................................................    23

23.  SUBORDINATION; ESTOPPEL CERTIFICATES................................................    24

     23.1  Subordination/Nondisturbance..................................................    24

     23.2  Estoppel Certificates.........................................................    24

     23.3  Remedy........................................................................    25

24.  NOTICE..............................................................................    25

25.  WAIVER..............................................................................    25

26.  SURRENDER OF PREMISES; HOLDING OVER.................................................    26

     26.1  Surrender.....................................................................    26

     26.2  Holding Over..................................................................    26

     26.3  Failure to Surrender..........................................................    27

27.  MORTGAGEE PROTECTION................................................................    27

28.  LIMITATION OF LIABILITY.............................................................    27

29.  HAZARDOUS SUBSTANCES................................................................    27
</TABLE>

                                      ii
<PAGE>

<TABLE>
<S>                                                                                               <C>
     29.1  Landlord's Warranty...............................................................     27

     29.2   Landlord's Indemnity.............................................................     28

     29.3   Tenant's Use of Hazardous Substances.............................................     28

     29.4   Tenant's Indemnity...............................................................     28

     29.5   Landlord's Compliance............................................................     29

30.  MISCELLANEOUS PROVISIONS................................................................     29

     30.1   Time of Essence..................................................................     29

     30.2   Successor........................................................................     29

     30.3   Landlord's Consent...............................................................     29

     30.4   Commissions......................................................................     29

     30.5   Reciprocal Covenant on Notification of ADA Violations............................     29

     30.6   Attorney Fees....................................................................     30

     30.7   Landlord's Successors............................................................     30

     30.8   Interpretation...................................................................     30

     30.9   Execution and Liability..........................................................     30

     30.10  Construction of Lease Provisions.................................................     30

     30.11  Force Majeure; Building Components...............................................     30
</TABLE>

EXHIBIT A      THE PREMISES
EXHIBIT B      THE PROJECT
EXHIBIT C      SIGN REGULATIONS
EXHIBIT D-1    INITIAL TENANT PARKING PLAN
EXHIBIT D-2    MODIFIED TENANT PARKING PLAN
EXHIBIT E      EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
EXHIBIT F      FORM OF LETTER OF CREDIT

                                      iii
<PAGE>

                                   NET LEASE

1.   BASIC LEASE TERMS.

     1.1  Date of Lease:                     April 18, 2000

     1.2  Tenant:                            HomeGrocer.com, Inc., a Washington
                                             corporation

          Address (Leased Premises):         9445 S.W. Ridder Road, Suite 310
                                             Wilsonville, OR 97070

          Telephone:                         (425) 201-7500
          Facsimile:                         (425) 201-7875

          Addresses (For Notices):           10230 N.E. Points Drive Kirkland,
                                             WA 98033
                                             Attention: Vice President
                                               Operations

                                             10230 N.E. Points Drive Kirkland,
                                             WA 98033
                                             Attention: Legal Department

     1.3  Landlord:                          Stafford Limited Partnership, an
                                             Oregon limited partnership

                                             in care of its managing agent,
                                             Specht Properties, Inc.
                                             15400 SW Millikan Way
                                             Beaverton, OR 97006

     1.4  Tenant's Use of Premises:          Warehouse, distribution, office and
                                             other legal uses

     1.5  Premises Area:                     83,462 Rentable Square Feet

     1.6  Project Area:                      247,984 Rentable Square Feet

     1.7  Premises Percent of Project:       33.66%

     1.8  Initial Term of Lease:             121 full calendar months, beginning
                                             with the Commencement Date

                                      -1-
<PAGE>

     1.9  Base Monthly Rent:                           $30,847.84
          Due Date of First Payment:                   Upon Execution of Lease
                                                       by Landlord and Tenant
                                                       (to be applied to the
                                                       rent due for the second
                                                       full calendar month of
                                                       this Lease)

          Default & Landlord Advance Interest Rate:    12% per annum

     1.10 Rent Adjustment (Initial One):

          (1)  Cost of Living:                         Intentionally Omitted

          (2)  Step Increase:                          The Base Rent increase
                                                       adjustment provisions of
                                                       Section 4.2(1) apply as
                                                       follows:

               Effective Date of Increase              New Base Monthly Rent
               April 1, 2003                           $33,251.55
               April 1, 2006                           $35,872.25
               April 1, 2009                           $38,726.65

          (3)  Prepaid toward Last Month's Rent:       $38,726.65 (payable upon
                                                       execution of Lease by
                                                       Landlord and Tenant)

          (4)  Non-refundable cleaning fee:            $0

          (5)  Broker(s):                              Colliers International;
                                                       Hadley Stevens &
                                                       Marandas; Macadam Forbes;
                                                       Specht Properties, Inc.

          (6)  Brokerage Commission Payable by:        Landlord

          (7)  Guarantors:                             None

                                      -2-
<PAGE>

2.   PREMISES.

     2.1  Landlord hereby leases to Tenant and Tenant leases from Landlord,
          those certain Premises described in Section 1 and in Exhibit A
          attached hereto (the "Premises"), located in the Project described on
          Exhibit B (the "Project"), upon all of the conditions set forth
          herein. Tenant's percentage of the Project ("Premises Percent of
          Project") as set forth in Section 1.7 shall be adjusted from time to
          time if the size of the Project or the Premises is changed by
          subsequent development of additional property or sale of a portion of
          the Project.

     2.2  Tenant shall have the right, during the 60-day period immediately
          following the Date of Lease and at its sole expense, to have
          recalculated the number of rentable square feet included in the
          Premises and/or the Project. If the recalculation demonstrates to
          Landlord's reasonable satisfaction that the actual rentable square
          feet included in the Premises and/or the Project are materially
          different from those set forth in Sections 1.5 and/or 1.6 above, as
          applicable, the Premises Percent of Project and all other amounts
          payable hereunder by Tenant shall be equitably adjusted. Any such
          recalculation by Tenant shall use the NAIOP Area Standard.

3.   TERM.

     3.1  Subject to the provisions of this Lease, the initial term of this
          Lease (the "Initial Term") shall be for the period set forth in
          Section 1.8 commencing on the date (the "Commencement Date") that is
          the later of April 1, 2000, or the date on which Landlord delivers
          exclusive possession of the Premises to Tenant. If the Commencement
          Date occurs after April 1, 2000, due to causes other than Landlord's
          negligence or willful misconduct, this Lease shall not be void or
          voidable; rather, all terms and conditions of this Lease shall remain
          in full force and effect; provided, however, that if Landlord has not
          delivered exclusive possession of the Premises to Tenant by August 1,
          2000, Tenant may act to terminate this Lease by providing Landlord
          with notice that if exclusive possession of the Premises has not been
          tendered to Tenant within 30 days from the date of such notice, the
          Lease will be terminated. If a delay in possession is caused solely by
          Tenant's failure to perform any obligation in accordance with this
          Lease, the Initial Term shall commence on the date on which the
          Commencement Date would have occurred but for such failure by Tenant,
          and Tenant shall have no right to terminate this Lease due to such
          delay.

     3.2  At the expiration of the Initial Term of this Lease, Tenant may extend
          this Lease for up to two (2) successive terms of five (5) years each
          (the "Extension Terms") by giving Landlord written notice of its
          intention to do so at least one year prior to the expiration of the
          Term of this Lease then in effect. The Extension Terms shall be upon
          all the terms and conditions of this Lease, except for the term and
          the amount of Base Monthly Rent. The Base Monthly Rent for the
          Extension Terms will be determined as set forth in Section 4.2(2)
          below. The word "Term" shall be

                                      -3-
<PAGE>

          used throughout this Lease to include both the Initial Term and
          Extension Terms. The time periods set forth herein for the exercise of
          the Extension Terms are of the essence, and the requirements for the
          exercise of the Extension Terms will be strictly construed.

4.   RENT.

     4.1  Base Rent. Tenant shall pay Landlord the Base Monthly Rent set forth
          in Section 1.9 monthly, in advance, on the first day of each and every
          calendar month ("Base Monthly Rent") during the Term of this Lease;
          provided, (a) Tenant shall pay no Base Monthly Rent for the first full
          calendar month of the Initial Term, and (b) the Base Monthly Rent due
          for the second full calendar month shall be due and payable upon
          execution of this Lease by Landlord and Tenant. If the Commencement
          Date occurs on a day other than the first day of a calendar month, the
          Base Monthly Rent for that partial calendar month shall be prorated on
          a daily basis and shall be due and payable on the Commencement Date.

     4.2  Rent Adjustment.

          (1)  The Base Monthly Rent for the Initial Term shall be increased to
               the amounts and at the times set forth in Section 1.10(2).

          (2)  If Tenant exercises its option to extend the Term pursuant to
               Section 3.2, the Base Monthly Rent for the Extension Term(s)
               shall be the greater of the Base Monthly Rent in effect during
               the final year of the then-expiring Term of this Lease or the
               Market Rent as of the end of the then-expiring Term of this
               Lease. The Market Rent shall be ninety-five percent (95%) of the
               monthly rent then payable under comparable leases for comparable
               space and comparable terms by tenants in buildings of comparable
               quality in the Wilsonville, Oregon, area. The Market Rent shall
               be determined as follows:

               (a)  At least one hundred eighty (180) days prior to the
                    commencement of the applicable Extension Term, Landlord
                    shall provide written notice to Tenant setting forth the
                    then Market Rent as determined by Landlord (the "Landlord
                    Market Rent"). If Tenant does not object in writing
                    delivered to Landlord within five (5) business days after
                    its receipt of Landlord's notice setting forth the Landlord
                    Market Rent, the Landlord Market Rent shall be the Base
                    Monthly Rent for the applicable Extension Term.

               (b)  If Tenant timely objects to the Landlord Market Rent, the
                    parties shall have thirty (30) days after Tenant's objection
                    notice in which to agree on the Market Rent.

                                      -4-
<PAGE>

               (c)  If the parties are unable to agree on the Market Rent within
                    that 30-day period, then within ten (10) days after the
                    expiration of that period, each party, at its cost and by
                    giving notice to the other party, shall appoint a real
                    estate appraiser, each with an MAI designation and at least
                    five (5) years of commercial appraisal experience in the
                    Portland metropolitan area, to appraise and set the Market
                    Rent. If a party does not appoint an appraiser within ten
                    (10) days after the other party has given notice of the name
                    of its appraiser, the single appraiser appointed shall be
                    the sole appraiser and shall set the Market Rent. If the two
                    appraisers are appointed by the parties as stated in this
                    Section, they shall meet promptly and attempt to set the
                    Market Rent. If they are unable to agree within thirty (30)
                    days after the second appraiser has been appointed, they
                    shall attempt to select a third appraiser meeting the
                    qualifications stated in this Section 4.2(2) within ten (10)
                    days after the last day the two appraisers are given to set
                    the Market Rent. If they are unable to agree on the third
                    appraiser, either of the parties to this Lease, by giving
                    ten (10) days' notice to the other party, can apply to the
                    presiding judge of the circuit court for the county where
                    the Premises are located for the selection of a third
                    appraiser who meets the qualifications stated in this
                    Section. Each of the parties shall bear one half of the cost
                    of appointing the third appraiser and of paying the third
                    appraiser's fee. The third appraiser, however selected,
                    shall be a person who has not previously acted in any
                    substantial capacity for either party.

               (d)  The third appraiser shall meet with the other two appraisers
                    appointed by the parties and a majority of them will
                    determine, not less than thirty (30) days prior to the last
                    day of the then-expiring Term of this Lease, the Market Rent
                    for the applicable Extension Term.

     4.3  Expenses. The purpose of this Section 4.3 is to ensure that Tenant
          bears a share of all Expenses related to the use, operation,
          maintenance, repair and insurance of the Project, except depreciation
          of the Project, loan repayment (except as in Section 4.3(1) (g)
          below), and real estate commissions. Accordingly, beginning with the
          Commencement Date, Tenant shall be responsible for and shall pay to
          Landlord Tenant's Share (as defined below) of Expenses related to the
          Project on or before the first day of each and every month.

                                      -5-
<PAGE>

          (1)  Expenses Defined. The term "Expenses" shall mean all reasonable
               and necessary costs and expenses of the use, operation,
               maintenance, repair and insurance of the Project, including,
               without limitation, the following costs:

               (a)  All supplies, materials, labor and equipment, used in or
                    related to the Project;

               (b)  All utilities, including without limitation, water,
                    electricity, gas, heating, lighting, sewer, waste disposal,
                    security, and all charges relating to the Project;

               (c)  All maintenance, management, janitorial and service
                    agreements related to the Project;

               (d)  All legal expenses and accounting costs (excluding legal
                    costs of negotiating, terminating or extending leases, or
                    legal costs incurred in proceedings against any tenant other
                    than Tenant) incurred by Landlord in relation to the
                    Project;

               (e)  All insurance premiums and costs, including but not limited
                    to the premiums and costs of fire, casualty and liability,
                    rental abatement, and earthquake insurance related to the
                    Project, and the cost of damage to the common areas of the
                    Project unless such damage is covered by Landlord's
                    insurance or would be covered by insurance that Landlord is
                    required to carry under this Lease;

               (f)  All maintenance and repair costs relating to the areas
                    within or around the Project, including without limitation,
                    sidewalks, landscaping, service areas, driveways, parking
                    areas, walkways, building exteriors (including painting),
                    signs and directories, including, for example, costs of
                    resurfacing and restriping parking areas, repairing (but not
                    replacing) roofs and walls, and including any assessments
                    charged or levied by a Tenant's Association, if any;

               (g)  Amortization (principal and interest) over their useful life
                    of the cost of capital improvements made to the Project
                    which may be required by any government authority or which
                    will improve the operating efficiency of the Project;

               (h)  All other costs of managing, maintaining, repairing,
                    operating and insuring the Project, including, for example,
                    clerical, supervisory and janitorial staff costs;

                                      -6-
<PAGE>

               (i)  The cost of capital improvements (principal and interest),
                    amortized over their useful life, designed to protect the
                    health and safety of the tenants in the Building or as
                    required by any government entity;

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

               (k)  The cost of Landlord's compliance with Environmental Laws
                    (as defined below) except to the extent that any such
                    expense resulted from the fault of Landlord, or was incurred
                    as the result of condition existing prior to the date of
                    this Lease or as the result of the act or omission of
                    another tenant of the Project.

          (2)  Exclusions. Notwithstanding anything in this Lease to the
               contrary, the term "Expenses" shall not include any of the
               following costs:

               (a)  Costs resulting from the willful misconduct of Landlord, its
                    employees or agents;

               (b)  Costs for which Landlord is reimbursed by any insurance
                    carried by Landlord;

                                      -7-
<PAGE>

               (c)  Any costs or expenses relating to any workletter to
                    construct tenant improvements;

               (d)  Allowances, concessions, permits, licenses, inspections or
                    other costs and expenses incurred in completing, fixturing,
                    renovating or otherwise improving, decorating or
                    redecorating space for tenants (including Tenant),
                    prospective tenants or other occupants or prospective
                    occupants of the Project, or vacant leasable space in the
                    Project, or constructing or finishing demising walls and
                    public corridors with respect to any such space whether such
                    work or alteration is performed for the initial occupancy by
                    such tenant or occupancy thereafter; and

               (e)  Costs for which Landlord is reimbursed by others.

          (3)  Tenant's Protest of Tax Assessments. In any year which Landlord
               does not protest the Real Property Tax assessment levied against
               the Project Tenant may choose to protest the assessment in
               Landlord's name. If Tenant chooses to protest the assessment,
               Landlord shall fully cooperate with Tenant's efforts provided
               that Tenant pays all costs and expenses necessary to conduct such
               protest. In the event either Landlord or Tenant protests such
               assessment and a reduction in the Real Property Taxes results,
               Tenant shall be entitled to the benefit of such reassessment,
               either as an Expense adjustment pursuant to Section 4.3(5) of
               this Lease or as a refund if this Lease has expired, if such
               reassessment results in an overpayment by Tenant to Landlord of
               Tenant's Share of Real Property Taxes.

          (4)  Annual Estimate of Expenses; Tenant's Share. Prior to the
               commencement of each calendar year of the Term of this Lease,
               Landlord shall prepare and deliver to Tenant a reasonable
               estimate of Expenses for the Project for the coming year.
               Tenant's share of all actual Expenses shall be determined by
               multiplying the total of all actual Expenses by the Premises
               Percent of Project set forth in Section 1.7 (herein "Tenant's
               Share"). The estimate of annual Expenses for any year during the
               Term of this Lease shall not exceed one hundred ten percent
               (110%) of the estimate of annual Expenses for the immediately
               preceding calendar year unless Landlord provides Tenant with
               reasonable documentation supporting such increase.

          (5)  Monthly Payment of Expenses; Annual Recap. Tenant shall pay to
               Landlord monthly in advance, as additional rent, one-twelfth of
               the product achieved by multiplying the then current estimate of
               annual Expenses by the Premises Percent of Project set forth in
               Section 1.7. Within ninety (90) days following the end of each
               calendar year (including the year during which this Lease expires
               or is terminated), Landlord shall

                                      -8-
<PAGE>

               prepare an accounting of actual Expenses incurred during the
               prior calendar year. If the amount of additional rent paid by
               Tenant as Tenant's Share during the preceding calendar year was
               less than the actual amount of Tenant's Share of Expenses,
               Landlord shall so notify Tenant and Tenant shall pay to Landlord
               the difference between said two amounts within thirty (30) days
               of receipt of such notice. Such amount shall be deemed to have
               accrued during the prior calendar year and shall be due and
               payable from Tenant even though the Term of this Lease may have
               expired or this Lease may have been terminated prior to Tenant's
               receipt of the notice. If the amount of additional rent paid by
               Tenant as Tenant's Share during the preceding calendar year was
               greater than the actual amount of Tenant's Share of Expenses,
               Landlord shall promptly so notify Tenant and such overpayment
               shall be paid to Tenant within one hundred twenty (120) days
               after the end of the calendar year. Such amount will be due and
               payable from Landlord, even though the Term of this Lease may
               have expired or this Lease may have been terminated prior to
               Tenant's receipt of the notice. In no event shall such credit be
               used to offset or in any way reduce the Base Monthly Rent payable
               by Tenant.

     4.4  Rent Without Offset. All Base Monthly Rent and additional rent
          (hereinafter collectively referred to as "rent") shall be paid by
          Tenant to Landlord monthly in advance on the first day of every
          calendar month, at the address shown in Section 1.3, or at such other
          place as Landlord may designate in writing from time to time. All rent
          shall be paid without prior demand or notice and without any deduction
          or offset whatsoever except as specifically set forth in this Lease.
          All rent shall be paid in lawful currency of the United States of
          America. All rent due for any partial month shall be prorated, when
          appropriate, at the rate of one-thirtieth (1/30) of the total monthly
          rent per day.

     4.5  Late Charge. Time is of the essence to the performance of this Lease.
          Tenant acknowledges that late payment by Tenant to Landlord of any
          rent or other sums due under this Lease will cause Landlord to incur
          costs and damages, including but not limited to processing and
          accounting charges and late charges that may be imposed on Landlord by
          the terms of any encumbrance secured by the Premises, as well as the
          loss of the use and time value of money. Landlord and Tenant
          specifically agree and acknowledge that the exact amount of such costs
          and damages would be difficult or impossible to prove. Tenant agrees
          that, if any rent or other sum due from Tenant is not received within
          five (5) days from when due, Tenant shall pay to Landlord an
          additional sum equal to five percent (5%) of the amount that is due;
          provided, however, that such late charges will not be assessed if
          Tenant, within five (5) days after notice from Landlord of such
          failure to make a timely payment, pays the entire unpaid amount to
          Landlord. Landlord will be required to provide Tenant with such notice
          of delinquency only once during each calendar year. Landlord and
          Tenant hereby agree that they have attempted to estimate the amount of
          costs and damages which would result from delay in

                                      -9-
<PAGE>

          payment, and that the agreed late charge represents a fair and
          reasonable estimate of the costs and damages that Landlord will incur
          by reason of any such late payment in light of the anticipated or
          actual harm which would be caused by such delay, the difficulties of
          proof of loss, and the inconvenience or non-feasibility of Landlord
          otherwise obtaining an adequate remedy. Additionally, all such
          delinquent rent or other sums, plus this late charge, shall bear
          interest from the date due at the rate per annum set forth in Section
          1.9 above; provided, however, that interest will not be assessed on
          delinquent rent and other sums if Tenant, within five (5) days after
          notice from Landlord of such delinquent rent or other sum, pays the
          entire unpaid amount to Landlord. Landlord will be required to provide
          Tenant with such notice of delinquency only once during each calendar
          year. Any payments of any kind returned for insufficient funds will be
          subject to an additional handling charge of $25.00. If Landlord
          employs a collection agency to recover delinquent charges, Tenant
          agrees to pay all collection agency fees charged to Landlord in
          addition to rent, late charges, interest and other sums payable under
          this Lease. Tenant shall pay a charge of $75 to Landlord for
          preparation of a demand for delinquent rent.

5.   SECURITY DEPOSITS.

     5.1  Prepaid Rent. Upon the execution of this Lease, Tenant shall pay to
          Landlord the prepaid rent set forth in Section 1.10(3) (herein the
          "Prepaid Rent"), and if Tenant is not in default under any provisions
          of this Lease, the Prepaid Rent shall be applied toward the Base
          Monthly Rent due for the last full month of the Term. The parties
          agree that Landlord's obligations with respect to the Prepaid Rent are
          not those of a trustee, and Landlord may commingle the Prepaid Rent
          with other funds. Landlord shall not be required to pay Tenant
          interest on the Prepaid Rent. If Landlord uses or applies all or any
          portion of said Prepaid Rent to cure or remedy a breach of or default
          by Tenant under this Lease, Landlord shall notify Tenant of such use
          or application, and Tenant, within five (5) days after written demand
          therefor, shall deposit cash with Landlord in an amount sufficient to
          restore the Prepaid Rent to the full extent of the amount set forth in
          Section 1.10(3). Tenant's failure to so restore the Prepaid Rent shall
          be a default under this Lease. In the event Landlord transfers its
          interest in this Lease, Landlord shall transfer the then remaining
          amount of the Prepaid Rent to Landlord's successor in interest, and
          thereafter Landlord shall have no further liability to Tenant with
          respect to such Prepaid Rent. Landlord shall be entitled to
          immediately endorse and cash any check tendered as Prepaid Rent;
          however, such endorsement and cashing shall not constitute Landlord's
          acceptance of this Lease.

     5.2  Letters of Credit. Upon the execution of this Lease, Tenant shall
          deliver to Landlord one or more letters of credit (the "Letters of
          Credit") in the aggregate amount of $409,000 to further secure the
          performance of Tenant's obligations under this Lease. The Letters of
          Credit will be irrevocable, issued by U.S. Bank National Association,
          and in a form substantially similar to the form attached to

                                     -10-
<PAGE>

          this Lease as Exhibit F. Upon a default by Tenant under this Lease,
          Landlord, in its sole discretion and upon notice to Tenant, may draw
          upon the full amount of the Letters of Credit and may retain, as
          liquidated damages, the entire amount paid under the Letters of
          Credit. The Letters of Credit will not expire before and may be drawn
          upon by Landlord until a date that is three years after the
          Commencement Date of this Lease. Landlord and Tenant agree that it
          would be impractical and extremely difficult to estimate the damages
          that Landlord may suffer if Tenant defaults on this Lease within the
          first three years of the Initial Term, and that Landlord's obtaining
          an adequate remedy in the event of such default would be inconvenient
          or nonfeasible. Landlord and Tenant agree that the aggregate amount of
          the Letters of Credit is a reasonable estimate of the minimum
          detriment and harm that Landlord would suffer in the event that Tenant
          defaults under this Lease during the first three years of the Initial
          Term.

6.   CONDITION AND USE OF PREMISES AND PROJECT FACILITIES.

     6.1  Tenant shall use the Premises solely for the purposes set forth in
          Section 1.4 and for no other purpose without obtaining the prior
          written consent of Landlord. Tenant has decided to lease the Premises
          based upon Tenant's independent investigations, inquiry, and business
          judgment.

     6.2  Tenant acknowledges that except as specifically set forth herein,
          neither Landlord nor any agent of Landlord has made any representation
          or warranty with respect to the Premises or the Project or with
          respect to the uses to which the Premises may be put or the
          suitability of the Premises or the Project for the conduct of Tenant's
          business, nor has Landlord agreed to undertake any modification,
          alteration or improvement to the Premises or to the Project, except as
          provided in writing in this Lease. Tenant has inspected the Premises
          and, except as specifically set forth herein, accepts the same "AS
          IS," provided, however, that Landlord hereby represents and warrants
          to Tenants as follows:

          (1)  All structural components of the Premises and the HVAC,
               electrical, plumbing, gas, and mechanical systems serving the
               Premises are in good condition and repair.

          (2)  Landlord covenants that Landlord has fee simple title to the
               Premises and has full right to make this Lease, and that Tenant
               shall have quiet and peaceful possession and enjoyment thereof as
               against any adverse claim of Landlord or any other party subject
               to the provisions of this Lease. This covenant shall be construed
               as a covenant running with the land, and is not, nor shall it be
               construed as, a personal covenant of Landlord, except to the
               extent of Landlord's interest in the Premises and only so long as
               such interest shall continue with respect to the Premises, and
               thereafter this covenant shall be binding only upon subsequent
               successors in interest of Landlord's interest in this Lease, to
               the extent of their respective

                                     -11-
<PAGE>

               interests, as and when they shall acquire the same, and so long
               as they shall retain such interest.

     6.3  Tenant acknowledges that Landlord may, from time to time, in its sole
          discretion, make such modifications, alterations, deletions or
          improvements to the Project as Landlord may deem necessary or
          desirable, which do not have a material adverse effect on Tenant's
          conduct of its business on the Premises, without compensation or
          notice to Tenant.

     6.4  Tenant shall promptly comply with all laws, ordinances, orders and
          regulations affecting the Premises and the Project, including without
          limitation any rules and regulations that may be attached to this
          Lease and to any reasonable and non-discriminatory modifications to
          those rules and regulations as Landlord may adopt from time to time.
          In the event of any conflict between the provisions of this Lease and
          the rules and regulations adopted by Landlord, the provisions of this
          Lease shall prevail.

     6.5  Tenant shall not do or permit anything to be done in or about the
          Premises or bring or keep anything in the Premises that will in any
          way increase the premiums paid by Landlord on its insurance related to
          the Project or which will in any way increase the premiums for fire or
          casualty insurance carried by other tenants in the Project. Tenant
          will not perform any act or carry on any practice that may injure the
          Premises or the Project, be a nuisance or menace to other tenants in
          the Project, or in any way interfere with the quiet enjoyment of such
          other tenants. Tenant shall not use the Premises for sleeping, washing
          clothes, cooking (other than the use by Tenant's employees of
          microwave ovens, vending machines, and beverage makers for their
          personal consumption) or the preparation, manufacture or mixing of
          anything that might emit any objectionable odor, noises, vibrations or
          lights onto such other tenants. If sound insulation is required to
          muffle noise produced by Tenant on the Premises, Tenant shall, at its
          own cost and using a contractor that is signatory to the applicable
          collective bargaining agreement, provide all necessary insulation.
          Tenant shall not overload any existing parking or service to the
          Premises. Pets and/or animals of any type shall not be kept on the
          Premises, unless assisting disabled persons.

7.   SIGNS; ALARMS. All signing shall comply with reasonable, non-discriminatory
     rules and regulations set forth by Landlord as may be modified from time to
     time. Current rules and regulations relating to signs are described on
     Exhibit C attached hereto. In the event of any conflict between the
     provisions of this Lease and Landlord's rules and regulations, the
     provisions of this Lease shall prevail. Tenant shall place no window
     covering (e.g., shades, blinds, curtains, drapes, screens, or tinting
     material), stickers, signs, lettering, banners or advertising or display
     material on or near exterior windows or doors if such materials are visible
     from the exterior of the Premises, without Landlord's prior written
     consent, which may be withheld, conditioned, or delayed in Landlord's sole
     discretion. If Landlord denies Tenant's request to place any such items on
     or near

                                     -12-
<PAGE>

     exterior windows or doors, Landlord will identify for Tenant the items, if
     any, that would be acceptable to be placed on or near exterior windows or
     doors. Similarly, Tenant may not install any alarm boxes, foil protection
     tape or other security equipment on the Premises without Landlord's prior
     written consent, which may be withheld, conditioned, or delayed in
     Landlord's reasonable discretion. Any material violating this provision may
     be removed by Landlord without compensation to Tenant.

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

9.   PARKING. Landlord hereby grants to Tenant and Tenant's customers,
     suppliers, employees and invitees, a non-exclusive privilege to use the
     non-exclusive parking areas in the Project for the use of motor vehicles
     during the term of this Lease. Landlord reserves the right at any time to
     grant similar non-exclusive privileges to other tenants, to promulgate
     reasonable and non-discriminatory rules and regulations relating to the use
     of such parking areas, including reasonable restrictions on parking by
     tenants and employees, to designate specific spaces for the use of any
     tenant, to make changes in the parking layout from time to time, and to
     establish reasonable time limits on parking. Tenant shall have the
     exclusive right to park in the areas identified for exclusive parking on
     Exhibits D-1 and D-2, provided that final approval from the City of
     Wilsonville for such parking is first obtained. Landlord shall have no
     obligation to monitor or control such exclusive parking areas. Other than
     in areas identified for overnight parking on Exhibits D-1 and D-2,
     overnight parking is prohibited and any vehicle violating this or any other
     vehicle regulation adopted by Landlord is subject to removal at the owner's
     expense. Landlord will reasonably cooperate with Tenant, at no expense to
     Landlord, in Tenant's efforts to obtain approval from the City of
     Wilsonville to reconfigure the parking areas as set forth on Exhibits D-1
     and/or D-2. Landlord agrees not to change the ingress or egress to or from
     the Project in a manner that will materially impact Tenant's operation
     unless required to do so by law.

10.  UTILITIES. Tenant shall pay for all water, gas, heat, light, power, sewer,
     electricity, telephone or other service metered, chargeable or provided to
     the Premises. Landlord reserves the right to install separate meters for
     any such utility and to charge Tenant for the cost of such installation.

11.  MAINTENANCE.

     11.1 Landlord shall maintain, in good condition, the structural parts of
          the Premises, which shall include only the foundations, bearing and
          exterior walls (excluding glass), sub-flooring and roof (excluding
          skylights and smoke hatches), the unexposed electrical, plumbing and
          sewerage systems, including without limitation, those portions of the
          systems lying outside the Premises, exterior doors (excluding glass),
          window frames, and gutters and downspouts on the Building. The cost of
          all such maintenance (with the exception of amounts incurred by

                                     -13-
<PAGE>

          Landlord to remedy latent structural defects in the Premises) shall be
          considered "Expenses" for purposes of Section 4.3. Except as provided
          above, Tenant shall repair and maintain the Premises in good
          condition, including without limitation, maintaining, repairing and,
          if necessary, replacing all walls, floors, ceilings, interior doors,
          exterior and interior windows and plumbing and electrical fixtures as
          well as damage caused by Tenant, its agents, employees or invitees.

     11.2 A heating, ventilating and air conditioning maintenance contract is
          required by Landlord, the cost of which shall be the responsibility of
          Tenant, as well as all maintenance, repair, and parts replacement.
          Evidence of such contract shall be provided to Landlord within 30 days
          after the Commencement Date.

     11.3 Upon expiration or termination of this Lease, Tenant shall surrender
          the Premises to Landlord broom-clean, free of debris, and in the same
          condition as they existed on the Commencement Date, except for
          reasonable wear and tear and casualty damage that Tenant is not
          required to repair under this Lease.

     11.4 In the event Tenant incurs any reasonable expenses because of
          Landlord's failure to fulfill its obligations set forth in this
          Section 11 (provided that in a non-emergency situation Landlord has
          first received oral or written notice of the item requiring
          maintenance or repair, and has received a subsequent written notice
          from Tenant of Landlord's failure to respond to the first notice and
          has failed to commence the necessary maintenance or repairs within
          fifteen (15) days from its receipt of the second notice), Landlord
          agrees to reimburse Tenant for such reasonable expenses upon demand by
          Tenant, provided that Tenant first furnishes Landlord with reasonable
          documentation evidencing such expenditures. In the event of the
          failure of Landlord to so reimburse Tenant within 15 days after
          receiving Tenant's demand therefor, Tenant may deduct up to $5,000 of
          such expense per item, together with interest at the rate set forth in
          Section 1.9, out of any rent then or thereafter becoming due to
          Landlord hereunder. In the event of an emergency situation, where it
          is not reasonable for Tenant to provide Landlord with notice of the
          item requiring repair or maintenance and such repair or maintenance is
          Landlord's responsibility under this Section 11, Tenant may make the
          required repairs and shall be reimbursed by Landlord for the
          reasonable cost of such repairs, provided that Tenant first furnishes
          Landlord with reasonable documentation evidencing such expenditures.
          If Landlord does not reimburse Tenant for the reasonable cost of such
          repairs within 15 days after Tenant's demand therefor, Tenant may
          deduct from rent the reasonable cost of such repair, provided that
          Tenant may not deduct from rent a sum in excess of $2,000 spent by
          Tenant for each item requiring repair, together with interest as
          specified above.

12.  ALTERATIONS.

     12.1 Tenant must give Landlord prior notice before making any alterations
          to the Premises or Project, including any changes to the existing
          landscaping. Tenant may make non-structural alterations to the
          Premises that cost less than $15,000

                                     -14-
<PAGE>

          without Landlord's consent. All other alterations must receive
          Landlord's prior written consent, which will not be unreasonably
          withheld, conditioned, or delayed. At the end of each calendar year,
          Tenant shall provide Landlord with construction drawings of all such
          alterations and changes made to the Premises during that calendar
          year. For any alterations made by Tenant pursuant to this Section 12,
          Landlord may post notice of non-responsibility in accordance with the
          laws of the state in which the Premises are located. All alterations
          made shall remain on and be surrendered with the Premises upon
          expiration or termination of this Lease, except that Landlord may, not
          less than 60 days before the expiration of the Term of this Lease,
          elect to require Tenant to remove any alterations which Tenant has
          made to the Premises. If Landlord so elects, Tenant shall, at its own
          cost, restore the Premises to the condition designated by Landlord in
          its election before the last day of the Term of this Lease. Tenant
          shall promptly repair any damage to the Premises caused by the removal
          of such alterations.

     12.2 Should Landlord consent in writing to Tenant's alteration of the
          Premises, Tenant shall contract with a contractor signatory to the
          applicable collective bargaining agreement and reasonably approved by
          Landlord for the construction of such alterations, shall secure all
          appropriate governmental approvals and permits, and shall complete
          such alterations with due diligence in compliance with plans and
          specifications reasonably approved by Landlord. All such construction
          shall be performed in a manner which will not interfere with the lease
          rights or quiet enjoyment of other tenants of the Project. Tenant
          shall discharge from the Premises and Project, within 20 days after
          having received notice thereof, all liens which may result from
          construction of alterations or other improvements by or at the request
          of Tenant.

13.  RELEASE AND INDEMNITY. As material consideration to Landlord, and except in
     the event of Landlord's negligence or intentional misconduct, Tenant agrees
     that Landlord and its employees, officers, partners and directors shall not
     be liable for any injury or damage to the person, property, or business of
     Tenant, its employees, invitees, permitees, customers, or any other person
     in or about the Premises from any cause, and Tenant waives all claims
     against such parties for damage to persons or property arising for any
     reason, except only for damage or injury resulting directly from Landlord's
     breach of its express obligations under this Lease which Landlord has not
     cured within a reasonable time after receipt of written notice of such
     breach from Tenant or to the extent such claims arise from Landlord's
     negligence or intentional misconduct. In no event shall Landlord have any
     liability for any act or omission of Tenant, its employees, invitees,
     permitees or customers, or of any other tenant of the Project or its
     employees, invitees, permitees or customers. Tenant shall indemnify and
     hold harmless Landlord (and its employees, officers, partners, and
     directors), the Premises and the Project, from and against all damages,
     injuries, liabilities, losses, claims, costs and expenses (including
     without limitation Landlord's reasonable attorney fees) related to acts,
     events or omissions occurring in, on or about the Premises, or arising out
     of or in any way related to Tenant's use or occupancy of the Premises,
     Tenant's breach of any term of this Lease,

                                     -15-
<PAGE>

     or any work, activity or thing done, permitted or suffered by Tenant in, on
     or about the Premises or the Project, unless caused by Landlord's
     intentional misconduct.

14.  TENANT'S RIGHT TO AUDIT.

     14.1 Audit Threshold. If, during the Term of this Lease, Tenant's Share of
          Expenses for a full calendar year increases by more than five percent
          (5%) from Tenant's Share of Expenses for the immediately preceding
          full calendar year, Tenant may audit Landlord's common area actual
          operating costs in order to verify the accuracy of the Expense charges
          provided that:

          (1)  Tenant specifically designates the calendar year(s) that Tenant
               intends to audit, which shall be a year within three (3) years of
               the date of the audit but must be within the Term of this Lease;
               and

          (2)  Such audit will be conducted only during regular business hours
               at the office where Landlord maintains operating expense records
               and only after Tenant gives Landlord fourteen (14) days' prior
               notice of its intention to conduct an audit.

     14.2 Copy of Audit. Tenant shall deliver to Landlord a copy of the results
          of such audit within fifteen (15) days of its receipt by Tenant. No
          such audit shall be conducted if any other tenant has conducted an
          audit for the time period Tenant intends to audit and Landlord
          furnishes to Tenant a copy of the results of such audit.

     14.3 Tenant Not in Default. No audit shall be conducted at any time that
          Tenant is in default of any of the terms of the Lease.

     14.4 Limits for Subtenants and Assignees. No subtenant shall have any right
          to conduct an audit and no assignee shall conduct an audit for any
          period during which such subtenant or assignee was not in possession
          of the Premises.

15.  INSURANCE AND WAIVER OF SUBROGATION.

     15.1 Liability Insurance. Tenant, at its cost, shall maintain public
          liability insurance with a single combined liability limit of
          $5,000,000 insuring against the hazards of Premises and operations,
          independent contractors, contractual liability (covering the indemnity
          clauses contained herein at Sections 13 and 29), products and
          completed operations arising out of or in connection with Tenant's
          use, occupancy or maintenance of the Premises. Such insurance policy
          shall (1) name as additional insureds Landlord and its managing agent,
          whose names and addresses have previously been provided to Tenant by
          Landlord, (2) contain a cross liability provision, and (3) contain an
          endorsement to the effect that "the insurance provided the Landlord
          hereunder shall be primary and non-contributing with any other
          insurance available to the Landlord." Landlord shall maintain

                                     -16-
<PAGE>

          public liability insurance with a single combined liability limit of
          $5,000,000 insuring against the hazards of the Project and operations,
          independent contractors, contractual liability, products, and
          completed operations arising out of or in connection with Landlord's
          ownership, maintenance, and operation of the Project.

     15.2 Property Insurance. At its cost, Tenant shall maintain a policy of
          standard fire and extended coverage insurance with vandalism and
          malicious mischief endorsements and "all risk" coverage on all of
          Tenant's personal property, improvements, fixtures and alterations in
          or about the Premises, equal to their full replacement value. The
          proceeds from any such policy shall be used by Tenant for the
          replacement of personal property and the restoration of Tenant's
          improvements, fixtures or alterations deemed advisable by Tenant in
          its sole discretion unless otherwise required under this Lease. Said
          insurance shall provide for payment of loss to, and shall name as
          additional insured(s), the Landlord and the holders of mortgages or
          deeds of trust on the Project. If such insurance has a deductible
          clause, the deductible amount shall not exceed $10,000 per occurrence
          and Tenant shall be liable for such deductible. Landlord shall keep
          the Premises insured against fire and other risks covered by a
          standard fire insurance policy with an endorsement for extended
          coverage.

     15.3 Business Interruption Insurance. Tenant shall, at its cost, obtain
          business interruption insurance of such type and amount sufficient to
          pay all rent and other sums due hereunder for a period of at least
          twelve (12) months in the event of any cessation or reduction of
          Tenant's business for any reason, including without limitation, damage
          or destruction. In no event shall Landlord be liable to Tenant for any
          loss of income from the operation of Tenant's business for any reason
          whatsoever, including without limitation, from an inability to occupy
          the Premises.

     15.4 Insurance Policies. All insurance required to be provided by Tenant
          under this Lease:

          (1)  shall be issued in a form reasonably satisfactory to Landlord and
               shall be issued by insurance companies which are authorized to do
               business in the state in which the Premises are located and which
               are reasonably satisfactory and acceptable to Landlord, provided
               that such companies shall each enjoy a financial rating of at
               least an A-VIII status as rated in the most recent edition of
               Best's Insurance Reports; and

          (2)  shall contain an endorsement requiring at least thirty (30) days
               prior written notice of cancellation to Landlord and Landlord's
               lender, if any, before cancellation or change in coverage, scope
               or amount of any policy. Tenant shall deliver a certificate or
               copy of each insurance policy together with evidence of payment
               of all current premiums to Landlord within thirty (30) days of
               execution of this Lease. Tenant's failure to provide

                                     -17-

<PAGE>

               evidence of such coverage to Landlord may, in Landlord's sole
               discretion, constitute a default under this Lease.

     15.5   Waiver of Subrogation. Neither party shall be liable to the other
            (or to the other's successors or assigns) for any loss or damage
            caused by fire or any of the risks enumerated in a standard fire
            insurance policy with an extended coverage endorsement and
            earthquake coverage, and in the event of insured loss, neither
            party's insurance company shall have a subrogated claim against the
            other. This waiver shall be valid only if the insurance policy in
            question expressly permits waiver of subrogation or if the insurance
            company agrees in writing that such a waiver will not affect
            coverage under the policies. Each party agrees to use best efforts
            to obtain such an agreement from its insurer if the policy does not
            expressly permit a waiver of subrogation.

16.  DESTRUCTION. If, during the Term, the Premises or Project are more than
     twenty-five percent (25%) destroyed from any cause, or rendered
     inaccessible or unusable from any cause, Landlord may, in its sole
     discretion and without compensation or liability to Tenant, terminate this
     Lease by delivery of notice of termination to Tenant within thirty (30)
     days of such event. If, in Landlord's reasonable estimation, the Premises
     cannot be restored within one hundred twenty (120) days following such
     destruction, then Landlord shall immediately notify Tenant and Tenant may
     terminate this Lease by delivery of notice to Landlord within thirty (30)
     days of receipt of Landlord's notice; otherwise this Lease shall remain in
     full force and effect. If Landlord does not terminate this Lease and if in
     Landlord's estimation the Premises can be restored within one hundred
     twenty (120) days, then Landlord shall commence to restore the Premises in
     compliance with then existing laws and shall complete such restoration with
     due diligence. In such event this Lease shall remain in full force and
     effect except that the then current rent shall be abated based on the
     extent to which the restoration being made by Landlord shall interfere with
     the business being carried on by Tenant in the Premises. If Landlord does
     not complete its repair and restoration work of the Premises within one
     hundred twenty (120) days after the occurrence of the damage or
     destruction, Tenant, at its option, may terminate this Lease by written
     notice to Landlord that the Lease will terminate if repairs or restoration
     are not completed within thirty (30) days after the date of the notice.
     Landlord will not be required to repair or restore any injury or damage to
     the property of Tenant or make any repairs or restoration to any
     alterations, additions, fixtures, or improvements installed in the Premises
     by or at the expense of Tenant; however, Landlord and Tenant will
     reasonably cooperate with each other to make such repairs or restoration.

17.  CONDEMNATION.

     17.1   Definitions. The following definitions shall apply: (1)
            "Condemnation" means (a) the exercise of any governmental power of
            eminent domain, whether by legal proceedings or otherwise by
            condemnor, and (b) the voluntary sale or transfer by Landlord to any
            condemnor either under threat of condemnation or while legal

                                     -18-
<PAGE>

            proceedings for condemnation are proceeding; (2) "Date of Taking"
            means the date the condemnor has the right to possession of the
            property being condemned; and (3) "Award" means all compensation,
            sums or anything of value awarded, paid or received in connection
            with a total or partial Condemnation.

     17.2   Obligations to be Governed by Lease. If, during the Term of this
            Lease, there is any Condemnation of all or any part of the Premises
            or the Project, the rights and obligations of the parties shall be
            determined pursuant to this Lease.

     17.3   Total or Partial Taking. If Premises are totally taken by
            Condemnation, this Lease shall terminate on the Date of Taking. If
            only a portion of the Premises or Common Area is Condemned, this
            Lease shall continue in effect, except that Tenant may elect to
            terminate this Lease if the remaining portion is rendered unsuitable
            for Tenant's continued use. If Tenant elects to terminate this
            Lease, Tenant must exercise its right to terminate by giving notice
            to Landlord within thirty (30) days after the nature and extent of
            the Condemnation have been finally determined. If Tenant elects to
            terminate this Lease, Tenant shall also notify Landlord of the date
            of termination, which date shall not be earlier than thirty (30)
            days after Tenant has notified Landlord of its election to
            terminate. If any portion of the Premises or common area is taken by
            Condemnation and this Lease remains in full force and effect, (i)
            Landlord at its sole cost and expense shall restore the remainder of
            the Premises and/or common area within one hundred twenty (120) days
            after the Date of Taking, and the rent payable hereunder shall abate
            equitably until the completion of such restoration; and (ii) after
            the completion of Landlord's restoration of the Premises and/or
            common area, the rent shall be equitably reduced based on the extent
            to which Tenant's use of the Premises for the normal conduct of its
            business has been permanently diminished.

     17.4   Award. Landlord reserves all rights to damages and awards paid
            because of any partial or entire taking of the Premises. Tenant
            assigns to Landlord any right Tenant may have to the damages or
            award. Further, Tenant shall not make claims against Landlord or the
            condemning authority for damages. However, Tenant may claim and
            recover from the condemning authority a separate award for Tenant's
            moving expenses, business dislocation damages, Tenant's personal
            property and fixtures, the unamortized costs of leasehold
            improvements paid for by Tenant, and any other award that would not
            substantially reduce the award payable to Landlord. Each party shall
            seek its own award, at its own expense, and neither shall have any
            right to the award made to the other.

18.  ASSIGNMENT OR SUBLEASE.

     18.1   Tenant shall not assign or encumber its interest in this Lease or
            the Premises, nor sublease all or any part of the Premises, nor
            allow any other person or entity (except Tenant's authorized
            representatives, employees, invitees, or guests) to occupy or use
            all or any part of the Premises, without first obtaining Landlord's
            written consent, which consent will not be unreasonably withheld,
            conditioned, or

                                     -19-
<PAGE>

            delayed. Any such assignment or sublease shall not relieve Tenant of
            any obligation hereunder and Tenant shall remain liable to pay the
            rent and to perform all other obligations to be performed by Tenant
            under this Lease. Any assignment, encumbrance or sublease without
            Landlord's written consent shall be voidable and, at Landlord's
            election, shall constitute a default. Landlord's consent shall not
            be considered unreasonably withheld if, among other things, (a) the
            proposed subtenant's or assignee's financial responsibility does not
            meet the same criteria Landlord uses to select comparable tenants
            for the Premises; (b) the proposed subtenant's or assignee's
            business is not the same as Tenant's business or is not suitable for
            the Premises considering the business of other tenants of the
            Project and/or the Project's prestige; or (c) the proposed use is
            inconsistent with the use permitted by Section 1.3. The foregoing is
            not an exclusive list of the reasons for which Landlord may
            reasonably withhold its consent to a proposed assignment or
            sublease.

     18.2   Not withstanding Section 18.1, Tenant may assign or sublease part or
            all of the Premises without Landlord's consent to:

            (1)  Any corporation or partnership that controls, is controlled by,
                 or is under common control with, Tenant; or

            (2)  Any corporation resulting from the merger or consolidation with
                 Tenant; or

            (3)  Any entity that acquires all of the assets of the business that
                 is being conducted by Tenant on the Premises;

            provided, however, that before any such assignment or sublease shall
            be effective, the assignee or sublessee shall assume, in full, the
            obligations of Tenant under this Lease, and Tenant shall demonstrate
            to Landlord's reasonable satisfaction that the assignee or sublessee
            has a net worth at the time of such assignment or sublease, as
            determined under generally accepted accounting principles, of not
            less than $100,000,000. Any such assignment or sublease shall not
            release Tenant of any obligations hereunder or alter the primary
            responsibility of Tenant to pay rent and to perform all other
            obligations to be performed by Tenant under this Lease.

     18.3   Fifty percent (50%) of all rent and other consideration received by
            Tenant from an assignee or subtenant in excess of the rent payable
            by Tenant to Landlord under this Lease, without any deduction for
            leasing commissions or any other out-of-pocket expenses incurred by
            Tenant, which amount is to be prorated where a part of the Premises
            is subleased or assigned, shall be paid to Landlord within ten (10)
            days after Tenant's receipt thereof. If Tenant requests Landlord to
            consent to a proposed assignment or subletting, Tenant shall pay to
            Landlord, whether or not consent is ultimately given, $100 or
            Landlord's reasonable attorneys' fees incurred in connection with
            such request, whichever is greater.

                                     -20-
<PAGE>

     18.4   No interest of Tenant in this Lease shall be assignable by
            involuntary assignment through operation of law (including without
            limitation the transfer of this Lease by testacy or intestacy). Each
            of the following acts shall be considered an involuntary assignment:
            (a) If Tenant is or becomes bankrupt or insolvent, makes an
            assignment for the benefit of creditors, or institutes proceedings
            under the Bankruptcy Act in which Tenant is the bankrupt party; or
            if Tenant is a partnership or consists of more than one person or
            entity, if any partner of the partnership or other entity is or
            becomes bankrupt or insolvent, or makes an assignment for the
            benefit of creditors; or (b) if a writ of attachment or execution is
            levied on this Lease; or (c) if in any proceeding or action to which
            Tenant is a party, a receiver is appointed with authority to take
            possession of the Premises. An involuntary assignment shall
            constitute a default by Tenant and Landlord shall have the right to
            elect to terminate this Lease, in which case this Lease shall not be
            treated as an asset of Tenant.

19.  DEFAULT. In addition to the acts, events, and omissions elsewhere specified
     in this Lease constituting defaults, the occurrence of any of the following
     shall constitute a default by Tenant:

     19.1   The failure by Tenant to make any payment of rent or any other
            payment required to be made by Tenant under this Lease, as and when
            due, where such failure shall continue for a period of ten (10) days
            after written notice thereof from Landlord to Tenant.
            Notwithstanding the foregoing, Landlord shall not be obligated to
            give Tenant notice of default for failure to pay rent or other
            payment due under this Lease if Landlord has previously given Tenant
            notice of default for failure to pay rent or other payment two (2)
            times during the same calendar year.

     19.2   Failure of Tenant to comply with any term or condition or fulfill
            any obligation of this Lease (other than the payment of rent or
            other charges) within twenty (20) days after written notice by
            Landlord specifying the nature of the default. If the default is of
            such a nature that it cannot be completely remedied within the 20-
            day period, this provision shall be complied with if Tenant begins
            correction of the default within the 20-day period and thereafter
            proceeds with reasonable diligence and in good faith to effect the
            remedy as soon as practicable. During any calendar year, Tenant
            shall be entitled to only one (1) notice for the same type of
            default pursuant to this Section 19.2.

     19.3   Insolvency of Tenant; an assignment by Tenant for the benefit of
            creditors; the filing by Tenant of a voluntary petition in
            bankruptcy; an adjudication that Tenant is bankrupt or the
            appointment of a receiver of the properties of Tenant; the filing of
            any involuntary petition of bankruptcy and failure of Tenant to
            secure a dismissal of the petition within thirty (30) days after
            filing; or attachment of or the levying of execution on the
            leasehold interest and failure of Tenant to secure discharge of the
            attachment or release of the levy of execution within ten (10) days
            shall constitute a default. If the Lease has been assigned, the
            events of

                                     -21-
<PAGE>

            default so specified shall apply only with respect to the one then
            exercising the rights of Tenant under the Lease.

20.  LANDLORD'S REMEDIES.

     20.1   Remedies. In the event of default, Landlord shall have the remedies
            set forth in this Section 20. These remedies are not exclusive; they
            are cumulative and in addition to any remedies now or later allowed
            by law. Landlord may terminate Tenant's right to possession of the
            Premises at any time. No act by Landlord other than giving notice to
            Tenant shall terminate this Lease. Acts of maintenance, efforts to
            relet the Premises or the appointment of a receiver on Landlord's
            initiative to protect Landlord's interest under this Lease shall not
            constitute a termination of this Lease. Upon termination of this
            Lease, Landlord shall have the right to recover from Tenant: (1) The
            worth of the unpaid rent that had been earned at the time of
            termination of this Lease; (2) the worth of the amount of the unpaid
            rent that would have been earned after the date of termination of
            this Lease throughout the remaining Term of this Lease; and (3) any
            other amount necessary to compensate Landlord for Tenant's default,
            including without limitation brokerage commissions (including the
            unamortized portion of the brokerage commissions paid by Landlord in
            connection with this Lease), costs of reentry and reletting
            (including without limitation the cost of any cleanup, refurbishing,
            and removal of Tenant's property and fixtures), court costs, and
            attorney and collection fees and costs. "The worth," as used in
            Section 20.1(1), is to be computed by allowing interest at the rate
            per annum set forth in Section 1.9 above. "The worth," as used in
            Section 20.1(2), is to be computed by discounting the amount at the
            discount rate of the Federal Reserve Bank of San Francisco in effect
            at the time of termination of Tenant's right of possession. Landlord
            will use reasonable efforts to relet the Premises after termination
            of this Lease or Tenant's right to possession in an effort to
            mitigate damages.

     20.2   Performance by Landlord of Tenant's Obligations. All covenants and
            agreements to be performed by Tenant under any of the terms of this
            Lease shall be performed by Tenant at Tenant's sole cost and expense
            and without any abatement of rent. If Tenant shall fail to pay any
            sum of money owed to any party, other than Landlord, for which it is
            liable hereunder, or if Tenant shall fail to perform any other act
            on its part to be performed hereunder or otherwise violate any term
            or provision of this Lease including, without limitation, its
            obligations pursuant to Sections 6, 11, and 12, Landlord may,
            without waiving any default or releasing Tenant from any obligation
            hereunder, but shall not be obligated to, make any such payment or
            perform any such other act to be made or performed by Tenant. All
            sums so paid by Landlord and all necessary incidental costs,
            together with interest thereon from the date of such payment by
            Landlord at the rate per annum set forth in Section 1.9 above, shall
            be payable to Landlord on demand. Tenant covenants to pay any such
            sums.

                                     -22-
<PAGE>

21.  LANDLORD'S DEFAULT. In the event of any breach or default by Landlord under
     this Lease, which breach or default renders a material portion of the
     Premises unusable for the conduct of Tenant's business and continues for a
     period of thirty (30) days after written notice thereof from Tenant (or
     with reasonable notice in case of an emergency), then in addition to all
     other rights and remedies of Tenant under this Lease and at law or equity,
     Tenant may, but shall not be obligated to, cure such breach on behalf of
     Landlord and upon demand by Tenant, Landlord shall promptly pay to Tenant
     the costs and expenses of such cure, together with interest accruing on
     such amounts paid by Tenant at the rate set forth in Section 1.9. If,
     however, other than in the case of an emergency, the nature of such breach
     is such that it cannot be cured within thirty (30) days, then Tenant's
     right to cure such breach shall be suspended for such additional period of
     time as may be necessary to cure the breach so long as Landlord commences
     cure within thirty (30) days and thereafter diligently and continuously
     prosecutes the curing of the breach, and so long as continuation of the
     breach does not create material risk to the Premises or to persons using
     the Premises. When Tenant makes demand for payment, Tenant shall furnish
     Landlord with an itemized statement of the costs and expenses incurred for
     cure. If Landlord fails to pay any sums due Tenant under this Lease within
     ten (10) days after demand, Tenant may deduct up to $5,000 of the amounts
     paid by Tenant from rent then or thereafter due from Tenant. In the case of
     an emergency, a situation threatening to the safety of Tenant's employees,
     agents, contractors, invitees and licensees or damage to Tenant's personal
     property, Tenant may take such immediate action, after notifying Landlord,
     as necessary to ensure safety and prevent damage. Nothing above prevents
     Tenant from pursuing other remedies.

22.  ENTRY ON PREMISES. Landlord and its authorized representatives shall have
     the right to enter the Premises at all reasonable times, upon 24 hours'
     prior oral or written notice to Tenant (and with no prior notice in the
     event of an emergency) for any of the following purposes: (a) to determine
     whether the Premises are in good condition and whether Tenant is complying
     with its obligations under this Lease; (b) to do any necessary maintenance
     and to make any restoration to the Premises or the Project that Landlord
     has the right or obligation to perform; (c) to post "for sale" signs at any
     time during the Term, and to post "for rent" or "for lease" signs during
     the last ninety (90) days of the Term of this Lease, or during any period
     while Tenant is in default; (d) to show the Premises to prospective
     brokers, agents, buyers, tenants or persons interested in a sale, an
     exchange, or other transfer at any time during the Term; (e) to repair,
     maintain or improve the Project and to erect scaffolding and protective
     barricades around and about the Premises (but not so as to prevent entry to
     the Premises), or (f) to do any other act or thing necessary for the safety
     or preservation of the Premises or the Project. Except in the event of
     Landlord's negligence or intentional misconduct, (i) Landlord shall not be
     liable in any manner for any inconvenience, disturbance, loss of business,
     nuisance or other damage arising out of Landlord's entry onto the Premises
     as provided in this Section 22, and (ii) Tenant shall not be entitled to an
     abatement or reduction of rent if Landlord exercises its rights of entry
     granted herein. Landlord shall conduct its activities on the Premises as
     provided herein in a manner that will cause the least inconvenience,
     annoyance or disturbance to Tenant's conduct of business on the Premises.

                                     -23-
<PAGE>

     For each of these purposes, Landlord shall at all times have and retain a
     key with which to unlock all the doors in, upon and about the Premises,
     excluding Tenant's vaults and safes. Tenant shall not alter any lock or
     install a new or additional lock or bolt on any door of the Premises
     without the prior written consent of Landlord, which consent will not be
     unreasonably withheld, conditioned or delayed. If Landlord shall give its
     consent, Tenant shall in each case furnish Landlord with a key for any such
     lock.

23.  SUBORDINATION; ESTOPPEL CERTIFICATES.

     23.1   Subordination/Nondisturbance. This Lease shall be subject and
            subordinate to any mortgage or trust deed ("Encumbrance") now
            existing against the Premises or Project, and to any renewals,
            replacements, extensions or consolidations thereof. This Lease shall
            also be subject and subordinate to any Encumbrance placed on the
            Premises after the date of this Lease given to secure a loan made by
            a lender to Landlord, and to any renewals, replacements, extensions
            or consolidations thereof, provided that the holder of the
            Encumbrance shall agree in writing that so long as Tenant is not in
            default under this Lease beyond any applicable cure period and
            agrees to attorn to the such holder, Tenant's rights under this
            Lease shall not be disturbed and shall remain in full force and
            effect for the Term of the Lease, unless the Lease is otherwise
            terminated pursuant to its terms. In the event the holder of the
            Encumbrance or the purchaser at a foreclosure sale ("Successor
            Landlord") succeeds to the interest of Landlord under the Lease,
            such Successor Landlord shall not be bound by (i) any payment of
            rent or other charges for more than one month in advance, except the
            Prepaid Rent and free rent, if any, specified in this Lease; (ii)
            any amendment, modification, or termination of the Lease without
            Successor Landlord's consent after the Successor Landlord's name is
            given to Tenant unless the amendment, modification, or termination
            is specifically authorized by the original Lease and does not
            require Landlord's prior agreement or consent, or (iii) any
            liability for any act or omission of Landlord or any other prior
            landlord (but such Successor Landlord will be liable for all
            obligations accruing under the Lease after the date of the
            transfer). Tenant covenants and agrees to execute and deliver, upon
            demand by Landlord and in a form requested by Landlord, any
            additional documents evidencing the priority or subordination of
            this Lease.

     23.2   Estoppel Certificates. Either party ("Answering Party") shall from
            time to time, within ten (10) business days after receiving written
            request by the other party ("Asking Party"), execute and deliver to
            the Asking Party a written statement. This written statement, which
            may be relied upon by the Asking Party and any third party with whom
            the Asking Party is dealing shall certify:

            (1)  the accuracy of this Lease document;

            (2)  the Term of this Lease;

                                     -24-
<PAGE>

            (3)  that this Lease is unmodified and in full effect or in full
                 effect as modified, stating the date and nature of the
                 modification;

            (4)  whether to the Answering Party's knowledge the Asking Party is
                 in default or whether the Answering Party has any claims or
                 demands against this Lease and, if so, specifying the default,
                 claim, or demand;

            (5)  the amount of the current monthly rent;

            (6)  the dates to which rent has been paid in advance;

            (7)  the amount of any Prepaid Rent; and

            (8)  to other correct and reasonably ascertainable facts that are
                 covered by this Lease.

     23.3   Remedy. The Answering Party's failure to comply with its obligations
            in Section 23.2 shall be a default under this Lease. Notwithstanding
            Sections 19 and 21, the cure period for this default shall be five
            (5) business days after the Answering Party receives notice of the
            default. Furthermore, the Answering Party's failure to provide the
            requested statement shall be conclusive proof that (i) this Lease is
            in full force and effect, without modification except as may be
            represented by the Asking Party, (ii) there are no uncured defaults
            in the Asking Party's performance, and (iii) if Landlord is the
            Asking Party, not more than one month's rent has been paid in
            advance.

24.  NOTICE. Any notice, demand, request, consent, approval or communication
     desired by either party or required to be given, shall be in writing and
     served either personally or sent by prepaid certified first class mail,
     addressed as set forth in Section 1. Either party may change its address by
     notification to the other party. Notice shall be deemed to be communicated
     forty-eight (48) hours from the time of mailing, if mailed, or at time of
     service, if personally served or delivered by a reputable courier service
     providing proof of delivery.

25.  WAIVER. No delay or omission in the exercise of any right or remedy by
     Landlord or Tenant shall impair such right or remedy or be construed as a
     waiver. No act or conduct of Landlord, including without limitation,
     acceptance of the keys to the Premises, shall constitute an acceptance of
     the surrender of the Premises by Tenant before the expiration of the Term.
     Only written notice from Landlord to Tenant shall constitute acceptance of
     the surrender of the Premises and accomplish termination of the Lease prior
     to the stated expiration date of the Term. Landlord's or Tenant's consent
     to or approval of any act by the other party requiring Landlord's or
     Tenant's consent for approval shall not be deemed to waive or render
     unnecessary Landlord's consent to or approval of any subsequent act by the
     other party. Any waiver by Landlord or Tenant of any default must be in
     writing and shall not be a waiver of any other default concerning the same
     or any other provision of the Lease.

                                     -25-
<PAGE>

26.  SURRENDER OF PREMISES; HOLDING OVER.

     26.1   Surrender. Upon expiration of the Term or earlier termination of
            this Lease, Tenant shall surrender to Landlord the Premises and all
            tenant improvements and alterations in the condition described in
            Section 11.3 above. Tenant shall remove all personal property owned
            by Tenant and shall perform all restoration made necessary by the
            removal of any alterations or Tenant's personal property before the
            expiration of the Term, including for example, restoring all wall
            surfaces to the condition they were in prior to the date Tenant took
            possession of the Premises, except for ordinary wear and tear,
            casualty damage that Tenant is not obligated under this Lease to
            repair, and improvements and alterations that Tenant is not required
            under this Lease to remove. Landlord shall have the right to elect
            to retain or dispose of in any manner Tenant's personal property not
            so removed. Tenant waives all claims against Landlord for any damage
            to Tenant or such personal property resulting from Landlord's
            retention or disposal of Tenant's personal property, except for
            those claims arising from Landlord's intentional misconduct. Tenant
            shall be liable to Landlord for Landlord's costs for storage,
            removal and disposal of Tenant's personal property not removed from
            the Premises in accordance with this Lease.

     26.2   Holding Over.

            (1)  If Tenant, with Landlord's express written consent, remains in
                 possession of the Premises after expiration or sooner
                 termination of this Lease, such possession by Tenant shall be
                 deemed to be a month-to-month tenancy terminable on thirty (30)
                 day notice at any time, by either party. All provisions of this
                 Lease, except those pertaining to term and rent, shall apply to
                 the month-to-month tenancy. Tenant shall pay monthly rent in an
                 amount equal to one hundred twenty-five percent (125%) of the
                 rent payable by Tenant for the last year prior to the date of
                 such expiration or termination of this Lease. Acceptance by
                 Landlord of rent after such expiration or earlier termination
                 shall not result in a renewal or extension of this Lease.

            (2)  If Tenant holds over after the expiration of the Term or the
                 earlier termination hereof without the express written consent
                 of Landlord, Tenant shall become a tenant at sufferance only,
                 and shall pay a monthly rental rate equal to One Hundred Fifty
                 percent (150%) of the rent payable by Tenant for the last year
                 prior to the date of such expiration or termination of this
                 Lease, prorated on a daily basis, and subject to the terms,
                 covenants and conditions herein specified, so far as
                 applicable, including Section 4.3. Acceptance by Landlord of
                 rent after such expiration or earlier termination shall not
                 result in a renewal or extension of this Lease.

                                     -26-
<PAGE>

     26.3   Failure to Surrender. The foregoing provisions of this Section 26
            are in addition to and do not affect Landlord's right of re-entry or
            any rights of Landlord hereunder or as otherwise provided by law. If
            Tenant fails to surrender the Premises upon the expiration of this
            Lease despite written demand to do so by Landlord, Tenant shall
            indemnify Landlord and hold it harmless against and from all loss or
            liability, including without limitation, any claim made by any
            succeeding tenant founded on or resulting from such failure to
            surrender, together with any attorneys' fees and costs incurred by
            Landlord.

27.  MORTGAGEE PROTECTION. In the event of any default by Landlord, Tenant will
     give notice by registered or certified mail to any beneficiary of a deed of
     trust or a mortgagee of a mortgage covering the Premises whose address
     shall have been previously furnished to Tenant, and shall offer such
     beneficiary or mortgagee the same opportunity to cure the default,
     including time to obtain possession of the Premises by power of sale or a
     judicial foreclosure, if such should prove necessary to effect a cure.

28.  LIMITATION OF LIABILITY. In consideration of the benefits accruing
     hereunder, Tenant agrees that, in the event of any actual or alleged
     failure, breach or default of this Lease by Landlord, if Landlord is a
     partnership: (a) the sole and exclusive remedy shall be against the
     partnership and its partnership assets; (b) no partner of Landlord shall be
     sued or named as a party in any suit or action (except as may be necessary
     to secure jurisdiction of the partnership); (c) no service of process shall
     be made against any partner of Landlord (except as may be necessary to
     secure jurisdiction of the partnership); (d) no partner of Landlord shall
     be required to answer or otherwise plead to any service of process; (e) no
     judgment may be taken against any partner of Landlord; (f) any judgment
     taken against any partner of Landlord may be vacated and set aside at any
     time without hearing; (g) no writ of execution will ever be levied against
     the assets of any partner of Landlord. These covenants and agreements are
     enforceable both by Landlord and also by any partner of Landlord. Tenant
     agrees to look solely to Landlord's interest in the Project, and any
     proceeds therefrom, and to no other assets of Landlord for satisfaction of
     any liability with respect to this Lease.

     Tenant agrees that each of the foregoing provisions shall be applicable to
     any covenant or agreement either expressly contained in this Lease or
     imposed by statute or at common law.

29.  HAZARDOUS SUBSTANCES.

     29.1   Landlord's Warranty. Landlord represents and warrants to Tenant that
            as of the date of execution of this Lease, Landlord (without any
            affirmative duty to investigate) has no actual knowledge of any
            Hazardous Substances on the Premises. Landlord has received no
            notice of any alleged violation of Environmental Laws with respect
            to the Premises. For purposes of this Lease, the term "Hazardous
            Substances" shall mean and include all hazardous and toxic
            substances, waste or materials, any pollutant or contaminant,
            including, without limitation, PCBs, asbestos, asbestos-containing
            material, and raw materials that

                                     -27-
<PAGE>

            are included under or regulated by any Environmental Laws. For
            purposes of this Lease, the term "Environmental Laws" shall mean and
            include all federal, state, and local statutes, ordinances,
            regulations, and rules presently in force or hereafter enacted
            relating to environmental quality, contamination, and clean-up of
            Hazardous Substances, including, without limitation, the
            Comprehensive Environmental Response, Compensation and Liability Act
            of 1980, 42 U.S.C. ss. 6091 et seq., as amended by the Superfund
                                        ------
            Amendments and Reauthorization Act of 1986, the Resource
            Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6091 et seq.,
                                                                      ------
            as amended by the Hazardous and Solid Waste Amendments of 1984, and
            state superlien and environmental clean-up statutes and all rules
            and regulations presently or hereafter promulgated under said
            statutes as amended.

     29.2   Landlord's Indemnity. Landlord agrees to indemnify Tenant and hold
            it harmless from and against any and all claims, damages, fines,
            judgments, penalties, costs, losses, liabilities, and expenses
            (including, without limitation, attorney fees, consultant and expert
            fees) sustained by Tenant during or after the Term of this Lease and
            attributable to (i) the presence in, on, under, or about the
            Premises, or any discharge or release in or from the Premises, of
            any Hazardous Substance prior to the date of this Lease, (ii)
            Landlord's failure to comply with any Environmental Law, or (iii)
            Landlord's breach of Section 29.1 of this Lease. The foregoing
            indemnity shall survive the expiration or earlier termination of
            this Lease.

     29.3   Tenant's Use of Hazardous Substances. Tenant, at its expense, shall
            comply with all Environmental Laws and with the requirements of
            attached Exhibit E throughout the Term of this Lease. Tenant shall
            not cause or permit any Hazardous Substances to be brought upon,
            kept, or used in or about the Premises by Tenant, its agents,
            employees, contractors, or invitees without the prior written
            consent of Landlord, which shall not be unreasonably withheld so
            long as Tenant demonstrates to Landlord's reasonable satisfaction
            that such Hazardous Substance is necessary or useful to Tenant's
            business and will be used, kept, and stored in a manner that
            complies with all Environmental Laws. Landlord consents to Tenant's
            use on the Premises of Hazardous Substances that consist of routine
            office, computer, and janitorial supplies or are contained in
            packaged products intended for resale to customers or are commonly
            used in the retail food industry for production of products intended
            for sale to customers (the "Permitted Hazardous Substances")
            provided that (i) such Permitted Hazardous Substances are used,
            kept, stored, and disposed of in accordance with all applicable
            Environmental Laws and (ii) prior to each annual anniversary of the
            Date of this Lease, Tenant provides Landlord with a detailed
            description of all Permitted Hazardous Substances that are then
            being used, kept, or stored on the Premises.

     29.4   Tenant's Indemnity. Tenant agrees to indemnify Landlord and hold it
            harmless from and against any and all claims, damages, fines,
            judgments, penalties, costs, losses (including, without limitation,
            loss in value of the Premises or the Project,

                                     -28-
<PAGE>

            damages due to loss or restriction of rentable or usable space, or
            any damages due to any adverse impact on marketing of the space and
            any and all sums paid for settlement of claims), liabilities and
            expenses (including, without limitation, attorney fees, consultant
            and expert fees) sustained by Landlord during or after the Term of
            this Lease and attributable to (i) any Hazardous Substances placed
            on, in, under, or about, or released or discharged from, the
            Premises or the Project by Tenant or Tenant's employees, agents,
            invitees, or contractors, (ii) Tenant's breach of any provision of
            Section 29.3 of this Lease, or (iii) Tenant's failure to comply with
            any Environmental Law. This indemnification includes, without
            limitation, any and all costs incurred in connection with any
            investigation of site conditions or any cleanup, remedial, removal,
            or restoration work required by any federal, state, or local
            governmental agency or political subdivision. Without limiting the
            foregoing, if the presence of any Hazardous Substance on the
            Premises or Project caused or permitted by Tenant or its employees,
            agents, invitees or contractors results in any contamination of the
            Premises, Tenant shall promptly take all actions at its sole expense
            as are necessary to return the Premises and Project to the condition
            existing prior to the release of any such Hazardous Substances,
            provided that Landlord's approval of such actions shall first be
            obtained, which approval shall not be unreasonably withheld so long
            as such actions would not potentially have any material adverse
            effect on the Premises or Project. The foregoing indemnity shall
            survive the expiration or earlier termination of this Lease.

     29.5   Landlord's Compliance. Landlord shall comply with all Environmental
            Laws relating to the Premises throughout the Term of this Lease.

30.  MISCELLANEOUS PROVISIONS.

     30.1   Time of Essence. Time is of the essence of each provision of this
            Lease.

     30.2   Successor. This Lease shall be binding on and inure to the benefit
            of the parties and their successors, subject to the limitations set
            forth in Section 18 of this Lease.

     30.3   Landlord's Consent. Any consent required by Landlord under this
            Lease must be granted in writing.

     30.4   Commissions. Each party represents that it has not had dealings with
            any real estate broker, finder or other person with respect to this
            Lease in any manner, except for the broker identified in Section
            1.10(5), who shall be compensated by the party identified in Section
            1.10(6).

     30.5   Reciprocal Covenant on Notification of ADA Violations. Within ten
            (10) days after receipt, Landlord and Tenant shall advise the other
            party in writing, and provide the other with copies of (as
            applicable), any notice alleging violation of the Americans with
            Disabilities Act of 1990 ("ADA") relating to any portion of

                                     -29-
<PAGE>

            the Property or of the Premises; any claims made or threatened in
            writing regarding noncompliance with the ADA and relating to any
            portion of the Property or of the Premises; or any governmental or
            regulatory actions or investigations instituted or threatened
            regarding noncompliance with the ADA and relating to any portion of
            the Property or the Premises.

     30.6   Attorney Fees. If either party commences an action against the other
            party arising out of or in connection with this Lease, the
            prevailing party shall be entitled to recover from the other party
            the prevailing party's reasonable attorney fees and costs of suit
            incurred at or prior to trial and on appeal, such fees to be set by
            the court or arbitrator before which the matter is heard.

     30.7   Landlord's Successors. In the event of a sale or conveyance by
            Landlord of the Project pursuant to which Landlord's entire interest
            in the Project is transferred, the same shall operate to release
            Landlord from any liability under this Lease accruing after the sale
            or conveyance, and in such event Landlord's successor in interest
            shall be solely responsible for all obligations of Landlord under
            this Lease.

     30.8   Interpretation. This Lease shall be construed and interpreted in
            accordance with the laws of the state in which the Premises are
            located. This Lease constitutes the entire agreement between the
            parties with respect to the Premises and the Project, except for
            such guarantees or modifications hereof as may be executed in
            writing by the parties from time to time. When required by the
            context of this Lease, the singular shall include the plural and
            vice versa, and any gender shall include the other and/or neuter.
            "Party" shall mean Landlord or Tenant. Each provision hereof is
            intended to be severable. The enforceability, invalidity or
            illegality of any provision shall not render the other provisions
            unenforceable, invalid or illegal, and the parties intend each
            provision to be enforced to the fullest extent permissible as
            determined by a court of competent jurisdiction if such court
            determines that any such provision is not fully enforceable as
            agreed herein.

     30.9   Execution and Liability. If more than one person or entity
            constitutes Tenant or Landlord, the obligations of Tenant or
            Landlord herein contained, subject to Section 28 of this Lease,
            shall be joint and several. Each person executing this Lease on
            behalf of Tenant or Landlord hereby represents and warrants his or
            her authority to do so.

     30.10  Construction of Lease Provisions. In the event of any ambiguity in
            any language in this Lease, or claim of ambiguity, the printed terms
            of this Agreement, including additions or addenda, shall not be
            construed against Landlord solely because Landlord authored or
            drafted such language.

     30.11  Force Majeure; Building Components. Landlord shall be excused for
            any delay, interruption or failure to provide the building
            components, systems, and services that are to be provided to Tenant
            under this Lease, to the extent that such

                                     -30-
<PAGE>

            delay, interruption or failure is due to matters that are beyond the
            Landlord's reasonable control, including without limitation,
            inclement weather, fire, catastrophe, strikes, civil commotion, acts
            of God or the public enemy, year 2000 compliance, acts or omissions
            of cities, counties or other governmental agencies, and the
            inability to obtain standard building materials. The term "building
            components, systems and services" shall include, without limitation,
            heating, ventilation and air conditioning; electrical; plumbing;
            lighting; sprinkler; elevator; security; automatic door and gate
            opening; closing and locking; card or keypad access or control; fire
            and smoke alarm, detection and reporting; telephone; computer
            automation; monitoring; and other building-related components,
            systems and services.

            IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as
of the date below.

LANDLORD:                                     TENANT:

STAFFORD LIMITED PARTNERSHIP                  HOMEGROCER.COM, INC., a Washington
an OREGON limited partnership                 corporation

     By:  THE SPECHT COMPANY
          Its General Partner

          By: /s/ Gregory L. Specht           By: /s/ Kristin H. Stred
             ---------------------------         -----------------------------
              Gregory L. Specht
              President                       Its: Jr. V.P. & General Counsel
                                                  ----------------------------
Date:         4/20/00                         Date: April 19, 2000
      ----------------------------------           ---------------------------

                                     -31-
<PAGE>

                                   EXHIBIT A

                                 The Premises

               Cross-hatched Area Represents The Leased Premises

                                     -A1-
<PAGE>

                                   EXHIBIT B

                                  The Project

                   Cross-hatched Area Represents The Project

                                     -B1-
<PAGE>

                                   EXHIBIT C

                               Sign Regulations

          These regulations have been established for the purpose of maintaining
the overall appearance of the Project. Compliance will be strictly enforced. Any
sign installed without the approval of the Landlord will be brought to
conformity at the expense of the Tenant.

1.   General Requirements.

     a.   Tenant shall submit a sketch of its proposed sign's logo and/or
          lettering to the Landlord for its approval, which approval shall not
          be unreasonably withheld, conditioned, or delayed.

     b.   The approved sketch will be delivered by the Landlord to the sign
          company designated by Tenant. The Tenant is responsible for the cost
          of the sign, and the Landlord will bill the Tenant to recover the
          cost.

     c.   Tenant shall be responsible for the fulfillment of all requirements of
          these regulations in accordance with the general specifications
          provided below.

2.   General Specifications.

     a.   Only raised foam letter signs will be allowed.

     b.   The sign dimensions are set forth below. These dimensions shall apply
          to all Tenant signs.

     c.   Tenants may select the style, size and color of the individual
          company's lettering and logo, subject to Landlord's reasonable
          approval as provided above.

     d.   Placement of the sign and method of attachment to the building will be
          reasonably directed by the Landlord.

     e.   Upon removal of any of Tenant's signs by Tenant, any damage to the
          building must be repaired and repainted at the Tenant's expense. All
          signs are the property of Tenant.

     f.   Except as provided herein, no advertising placards, banners, pennants,
          names, insignias, trademarks, or other descriptive material shall be
          affixed or maintained upon the glass planes or exterior walls of the
          building, landscaped areas, streets or parking areas.

                                    -C1-
<PAGE>

                                   EXHIBIT D

                          Tenant's Exclusive Parking

                                    -D1-
<PAGE>

                                   EXHIBIT E

                 Emissions, Storage, Use and Disposal of Waste

1.   Emissions.  Tenant shall not:

     a.   Permit any vehicle on the Premises owned by Tenant or any of its
          employees to emit exhaust which is in violation of any governmental
          law, rule, regulation or requirement;

     b.   Discharge, emit or permit to be discharged or emitted any liquid,
          solid or gaseous matter, or any combination thereof, into the
          atmosphere, the ground or any body of water, which matter, as
          reasonably determined by Landlord or any governmental entity, does, or
          may, pollute or contaminate the same, or is, or may become,
          radioactive or does, or may, adversely affect the (1) health or safety
          of persons, wherever located, whether on the Project or anywhere else;
          (2) condition, use or enjoyment of the Project or any other real or
          personal property, whether on the Project or anywhere else; or (3)
          Premises or any of the improvements thereto or thereon including
          buildings, foundations, pipes, utility lines, landscaping or parking
          areas;

     c.   Produce, or permit to be produced, any intense glare, light or heat
          except within an enclosed or screened area and then only in such
          manner that the glare, light or heat shall not be discernible from
          outside the Premises;

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

     e.   Create, or permit to be created, any ground vibration that is
          discernible outside the Premises;

     f.   Transmit, receive or permit to be transmitted or received, any
          electromagnetic, microwave or other radiation which is harmful or
          hazardous to any person or property in, on or about the Premises or
          anywhere else.

2.   Storage and Use.

     a.   Storage. Subject to the uses permitted and prohibited to Tenant under
          this Lease, Tenant shall store in appropriate leak proof containers
          all solid, liquid or gaseous matter, or any combination thereof, which
          matter, if discharged or emitted into the atmosphere, the ground or
          any body of water, does or may (1) pollute or contaminate the same in
          violation of applicable laws, or (2) adversely affect the (i) health
          or safety of persons, whether on the Premises or anywhere else;

                                     -E1-
<PAGE>

          (ii) condition, use or enjoyment of the Premises or any real or
          personal property, whether on the Premises or anywhere else; or (iii)
          Premises or any of the improvements thereto or thereon.

     b.   Use. In addition, without Landlord's prior written consent, Tenant
          shall not use, store or permit to remain on the Premises any solid,
          liquid or gaseous matter which is, or may become, radioactive. If
          Landlord does give its consent, Tenant shall store the materials in
          such a manner so as to comply with all applicable laws.

3.   Disposal of Waste.

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

     b.   Sewage Disposal. Tenant shall properly dispose of all sanitary sewage
          and shall not use the sewage disposal system (1) for the disposal of
          anything except sanitary sewage or (2) in excess of the lesser of the
          amount (a) reasonably contemplated by the uses permitted under this
          Lease or (b) permitted by any governmental entity. Tenant shall not
          commit any act that causes obstruction to the sewage disposal system.

     c.   Disposal of Other Waste. Tenant shall properly dispose of all other
          waste or other matter delivered to, stored upon, located upon or
          within, used on, or removed from, the Premises in such a manner that
          it does not, and will not, adversely affect the (1) health or safety
          of persons wherever located, whether on the Premises or elsewhere, (2)
          condition, use or enjoyment of the Premises or any other real or
          personal property, wherever located, whether on the Premises or
          anywhere else, or (3) Premises or any of the improvements thereto or
          thereon including buildings, foundations, pipes, utility lines,
          landscaping or parking areas.

4.   Compliance with Law. Notwithstanding any other provisions in this Lease to
     the contrary, Tenant shall comply with all laws, statutes, ordinances,
     regulations, rules and other governmental requirements in complying with
     its obligations under this Lease, and in particular, relating to the
     storage, use and disposal of hazardous or toxic matter.

                                     -E2-
<PAGE>

5.   Inspection and evidence of Compliance. Landlord and its authorized
     representatives shall have the right to enter the Premises, after not less
     than 24 hours' prior notice to Tenant (except that in the case of
     emergencies no prior notice is required), for purposes of inspection of
     Tenant's compliance with provisions of this Exhibit E, and Tenant shall
     fully cooperate with Landlord and shall allow Landlord and its authorized
     representatives to review Tenant's records relating to Tenant's storage,
     use and disposal of hazardous or toxic matter. Landlord's entries upon the
     Premises shall be done in such a manner so as to cause the least
     practicable interference with the conduct of Tenant's business on the
     Premises. Tenant shall, upon written request of Landlord, provide evidence
     of compliance with all state and federal rules and regulations regarding
     the emission, handling and storage of environmentally hazardous materials.

                                     -E3-
<PAGE>

                                   EXHIBIT F

                                                  U.S. BANK NATIONAL ASSOCIATION
                                                       INTERNATIONAL DEPARTMENT,
                                                    1420 FIFTH AVENUE, 5TH FLOOR
                                                         SEATTLE, WA 98101 U.S.A
                                                                SWIFTWEEKUS44EEA
                                                             TELEX: 6723211-5398
                                                             PHONE: 206-344-3398
                                                               FAX: 206-344-5374

                                    SAMPLE
                     ====================================
                     IRREVOCABLE STANDBY LETTER OF CREDIT
                     ====================================

AUGUST 18, 1999
________________________________________________________________________________
BENEFICIARY:                            APPLICANT:
                                        HOMEGROCER.COM, INC.
                                        10230 N.E. POINTS DRIVE
                                        KIRKLAND, WA 98033

________________________________________________________________________________
LETTER OF CREDIT NUMBER:     SLCSSEA00xxx
                             ------------
________________________________________________________________________________
EXPIRY DATE:
          AT: OUR COUNTERS PRESENTLY LOCATED AT 1420 FIFTH AVENUE, 5TH FLOOR,
          INTERNATIONAL DEPARTMENT, SEATTLE, WA, 98101 ON OR BEFORE 4:00 P.M.
________________________________________________________________________________
AMOUNT:

________________________________________________________________________________
WE HEREBY ISSUE THIS IRREVOCABLE STANDBY LETTER OF CREDIT AVAILABLE BY YOUR
DRAFT(S) DRAWN AT SIGHT ON U.S. BANK NATIONAL ASSOCIATION AND ACCOMPANIED BY THE
FOLLOWING DOCUMENTS:

1.   BENEFICIARY'S SIGNED STATEMENT THAT HOMEGROCER.COM, INC. HAS DEFAULTED
     UNDER THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT SIGNED BETWEEN
     HOMEGROCER.COM, INC.
2.   THE ORIGINAL OF THIS LETTER OF CREDIT INCLUDING ANY AMENDMENTS.

ADDITIONAL CONDITIONS:
1.   ALL BANKING CHARGES OTHER THAN THOSE OF THE ISSUING BANK ARE FOR ACCOUNT
     OF THE BENEFICIARY.
2.   PARTIAL DRAWINGS ALLOWED.
3.   IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE AUTOMATICALLY
     EXTENDED, WITHOUT AMENDMENT, FOR AN ADDITIONAL PERIOD OF ONE YEAR FROM THE
     PRESENT EXPIRATION DATE OR EACH FUTURE EXPIRATION DATE, UNLESS WE HAVE
     NOTIFIED YOU IN WRITING NOT LESS THAN THIRTY (30) DAYS BEFORE SUCH
     EXPIRATION DATE THAT WE ELECT NOT TO RENEW THIS LETTER OF CREDIT, BUT IN NO
     EVENT WILL THIS LETTER OF CREDIT BE EXTENDED BEYOND                  . ALL
     WRITTEN NOTIFICATION SHALL BE SENT VIA COURIER.
4.   THIS LETTER OF CREDIT IS TRANSFERABLE BY U.S. BANK NATIONAL ASSOCIATION
     ONLY, UPON RECEIPT OF YOUR WRITTEN INSTRUCTIONS SUBMITTED IN

THIS PAGE 1 FORMS AN INTEGRAL PART OF LETTER OF CREDIT NO.
<PAGE>

      ACCORDANCE WITH THE ATTACHED TRANSFER FORM AND THE ORIGINAL OF THIS
      LETTER OF CREDIT TRANSFER FEES ARE FOR ACCOUNT OF THE BENEFICIARY.
--------------------------------------------------------------------------------

DRAFTS DRAWN UNDER THIS CREDIT MUST BEAR THE CLAUSE DRAWN UNDER U.S. BANK
NATIONAL ASSOCIATION IRREVOCABLE STANDBY LETTER OF CREDIT NO. SLCSSEA00XXX.

PURSUANT TO U.S. LAW WE ARE PROHIBITED FROM ISSUING, TRANSFERRING ACCEPTING OR
PAYING LETTERS OF CREDIT TO ANY PARTY OR ENTITY IDENTIFIED BY THE OFFICE OF
FOREIGN ASSETS CONTROL, U.S. DEPT. OF TREASURY, OR SUBJECT TO THE DENIAL OF
EXPORT PRIVILEGES BY THE U.S. DEPT. OF COMMERCE.

THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTING
CREDITS (1999 REVISION) INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500.

WE HEREBY ENGAGE WITH YOU THAT DRAFT(S) DRAWN AND/OR DOCUMENTS PRESENTED UNDER
AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT
WILL BE DULY HONORED UPON PRESENTATION TO US.

A CHARGE OF USD50.00 WILL BE DEDUCTED FROM THE PROCEEDS OF ANY DRAWING PRESENTED
WITH DISCREPANCIES.

                        U.S. BANK NATIONAL ASSOCIATION
                        INTERNATIONAL BANKING DIVISION

                        ______________________________
                             AUTHORIZED SIGNATURE

THIS PAGE 2 FORMS AN INTEGRAL PART OF LETTER OF CREDIT NO.

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