Document:

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                                                                    Exhibit 10.7

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                                 LEASE AGREEMENT

                                 BY AND BETWEEN

                                ELLIOTT PARK LLC,

                     a Washington limited liability company

                                    Landlord

                                       and

                            CELL THERAPEUTICS, INC.,

                            a Washington corporation

                                     Tenant

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                                TABLE OF CONTENTS

                                                                            PAGE

1.       FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS...............    1
         1.1.     Broker...................................................    1
         1.2.     Building.................................................    1
         1.3.     Premises.................................................    1
                  1.3.1.   Tenant's Use of Landlord's Generator............    1
                  1.3.2.   Installation of Tenant Generator................    2
         1.4.     Property.................................................    2
         1.5.     Tenant's Share...........................................    2
         1.6.     Lease Year...............................................    2
         1.7.     Commencement Date........................................    2
         1.8.     Expiration Date..........................................    2
         1.9.     Term.....................................................    2
         1.10.    Base Rent................................................    2
                  1.10.1.  Garage Support Space Base Rent..................    3
                  1.10.2.  Generator Rent..................................    3
         1.11.    Early Occupancy..........................................    3
         1.12.    Additional Rent..........................................    3
         1.13.    Base Year................................................    3
         1.14.    Security Deposit.........................................    3
         1.15.    Parking..................................................    3
         1.16.    Landlord's Payment Address...............................    3
         1.17.    Notice Addresses.........................................    4
         1.18.    Permitted Uses...........................................    4
         1.19.    Landlord's Work..........................................    4
         1.20.    Tenant's Work............................................    4
         1.21.    Guarantor................................................    4
         1.22.    Exhibits.................................................    4

2.       PREMISES..........................................................    5
         2.1.     Acceptance of Premises...................................    5
         2.2.     Relocation or Termination................................    5
         2.3.     Tenant's Right of First Refusal..........................    5

3.       LEASE TERM........................................................    6
         3.1.     Duration of Lease Term...................................    6
         3.2.     Extension Option.........................................    6
         3.3.     Base Rent During Option Term.............................    6
         3.4.     Confirmation of Commencement Date........................    7
         3.5.     Surrender of Premises....................................    7
         3.6.     Holding Over With Consent................................    7
         3.7.     Holding Over Without Consent.............................    7

4.       RENT..............................................................    7
         4.1.     Payment..................................................    7
                  4.1.1.   Wire Payments...................................    8
         4.2.     Interest on Late Payments; Late Charge...................    8
         4.3.     Address for Payments.....................................    8

5.       SECURITY DEPOSIT..................................................    8

6.       USES; COMPLIANCE WITH LAWS........................................    8
         6.1.     Permitted Uses...........................................    8
         6.2.     Duties and Prohibited Conduct............................    8
         6.3.     Environmental, Health And Safety Laws....................    8

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7.       SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE...................   10
         7.1.     Services and Utilities; Landlord's Obligations...........   10
                  7.1.1.   Additional Services Or Utilities................   11
         7.2.     Services and Utilities; Tenant's Obligations.............   11
                  7.2.1.   Laboratory Systems and Services.................   12
                  7.2.2.   Boiler Room Expenses............................   12
         7.3.     Interruption.............................................   12
         7.4.     Landlord's Repair and Maintenance Obligations............   12
         7.5.     Tenant's Repair and Maintenance Obligations..............   12
         7.6.     Additional Security......................................   12
         7.7.     Tenant's Obligations.....................................   13

8.       ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE
         TAXES.............................................................   13
         8.1.     Definitions..............................................   13
                  8.1.1.   Taxes...........................................   13
                  8.1.2.   Operating Costs.................................   13
                  8.1.3.   Tenant's Share..................................   14
         8.2.     Payment of Additional Rent for Estimated Operating
                  Costs and Taxes..........................................   15
         8.3      Actual Operating Costs and Taxes.........................   15
         8.4.     Determinations...........................................   15
         8.5.     Tenant's Personal Property Taxes.........................   16
         8.6      Tenant's Utility Charges.................................   16

9.       IMPROVEMENTS AND ALTERATIONS BY TENANT............................   17

10.      ACCESS............................................................   17

11.      DAMAGE OR DESTRUCTION.............................................   18
         11.1.    Damage and Repair........................................   18
         11.2.    Destruction During Last Year of Term.....................   18
         11.3.    Business Interruption....................................   18
         11.4.    Tenant Improvements......................................   18
         11.5.    Express Agreement........................................   18

12.      WAIVER OF SUBROGATION.............................................   18

13.      INDEMNIFICATION...................................................   19

14.      INSURANCE.........................................................   19
         14.1.    Worker's Compensation....................................   19
         14.2.    Liability Insurance......................................   19
         14.3.    Property Insurance.......................................   20
         14.4.    Automobile Liability Insurance Requirements..............   20
         14.5.    Insurance Policy Requirements............................   20
         14.6.    Failure to Maintain Insurance............................   20
         14.7.    Increased Insurance Costs................................   20

15.      ASSIGNMENT AND SUBLETTING.........................................   21
         15.1.    Assignment or Sublease...................................   21
         15.2.    Documentation and Expenses...............................   21
         15.3.    Transferee Obligations...................................   21

16.      SIGNS.............................................................   22

17.      LIENS.............................................................   22

18.      BANKRUPTCY........................................................   23
         18.1     Assumption of Lease......................................   23

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                  18.1.1.  Definition of Adequate Assurances...............   23
         18.2.    Assignment of Lease......................................   23
         18.3.    Adequate Protection......................................   23

19.      DEFAULT...........................................................   24
         19.1.    Cumulative Remedies......................................   24
         19.2.    Tenant's Default; Right to Cure..........................   24
         19.3.    Landlord's Rights And Remedies...........................   24
                  19.3.1.  Termination of Lease............................   24
                  19.3.2.  Re-entry of the Premises........................   24
                  19.3.3.  Termination After Reentry.......................   24
         19.4.    Landlord's Damages.......................................   25
                  19.4.1.  Delinquent Rent.................................   25
                  19.4.2.  Rent After Termination Until Judgment...........   25
                  19.4.3.  Rent After Judgment.............................   25
                  19.4.4.  Other Compensation..............................   25
                  19.4.5.  Additional or Alternative Damages...............   25
                  19.4.6.  Calculation of Damages..........................   25
         19.5.    Tenant's Property........................................   25
         19.6.    No Waiver................................................   26
         19.7.    Waiver of Notice.........................................   26
         19.8.    Waiver of Redemption Rights..............................   26
         19.9.    Reasonable Efforts to Mitigate...........................   26
         19.10.   Default by Landlord......................................   26

20.      SUBORDINATION AND ATTORNMENT......................................   27

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

22.      CONDEMNATION......................................................   27
         22.1.    Entire Taking............................................   27
         22.2.    Constructive Taking of Entire Premises...................   28
         22.3.    Partial Taking...........................................   28
         22.4.    Awards and Damages.......................................   28

23.      NOTICES...........................................................   28

24.      COSTS AND ATTORNEYS' FEES.........................................   28

25.      LANDLORD'S LIABILITY..............................................   29

26.      LANDLORD'S CONSENT................................................   29

27.      ESTOPPEL CERTIFICATES.............................................   29

28.      RIGHT TO PERFORM..................................................   29

29.      PARKING...........................................................   29

30.      AUTHORITY.........................................................   30

31.      GENERAL...........................................................   30
         31.1.    Headings.................................................   30
         31.2.    Heirs and Assigns........................................   30
         31.3.    No Brokers...............................................   30
         31.4.    Tenant's Financial Statement.............................   30
         31.5.    Entire Agreement.........................................   30
         31.6.    Severability.............................................   30
         31.7.    Force Majeure............................................   30
         31.8.    Right to Change Public Spaces............................   31

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         31.9.    Governing Law............................................   31
         31.10.   Building Directory.......................................   31
         31.11.   Building Name............................................   31
         31.12.   Quiet Enjoyment..........................................   31
         31.13.   Survival.................................................   32
         31.14.   Time.....................................................   32
         31.15.   Interpretation...........................................   32
         31.16.   Execution................................................   32

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                                 LEASE AGREEMENT

THIS LEASE AGREEMENT ("Lease") is made this 20th day of August, 2002
("Effective Date"), between Elliott Park LLC, a Washington limited liability
company ("Landlord"), and Cell Therapeutics, Inc., a Washington corporation,
("Tenant"). The parties agree as follows:

1.   FUNDAMENTAL LEASE PROVISIONS; DEFINITIONS; EXHIBITS.

Capitalized terms used in this Lease shall have the meanings provided in this
Section 1, unless otherwise specifically modified by provisions of this Lease.

     1.1.      Broker. "Broker" shall mean Colliers International. A commission
shall be paid by Landlord to Broker pursuant to a separate agreement between
Landlord and Broker.

     1.2.      Building. "Building" shall mean the structure commonly known as
Elliott Park North. The Building is situated on a portion of the real property
legally described in Exhibit A and has a postal address of 201 Elliott Avenue
West, Seattle, Washington 98119.

     1.3.      Premises. The "Premises" shall mean the space consisting of
approximately 63,836 net rentable square feet located on the first (1/st/),
third (3/rd/), fourth (4/th/), and fifth (5/th/) floors of the Building, and
approximately 4,379 net rentable square feet of support space located in the
Building's garage ("Garage Support Space") as depicted on the floor plans
attached to this Lease as Exhibit B, subject to recalculation in accordance with
Section 2. The Premises shall include the Tenant Improvements, if any, described
in Exhibit C.

               1.3.1.    Tenant's Use of Landlord's Generator. In addition to
the Premises described above, as of the Commencement Date, Tenant shall also
lease from Landlord, the generator ("Generator") located next door to the
Building in the P2 level of the Seattle Post-Intelligencer Building, as further
illustrated on Exhibit B-6 attached hereto, Tenant's lease of the Generator
shall be on the following terms and conditions: Tenant's use of Landlord's
Generator shall be on a month-to-month basis, and is terminable at will by
either party upon twenty (20) days prior notice, and shall terminate in the
event of any default by Tenant under the Lease. Upon such termination, Landlord
may disconnect Tenant's use of Landlord's Generator without notice.

Landlord and Tenant each hereby acknowledge and agree that Tenant's use of
Landlord's Generator shall be limited to service of those existing electrical
panels that were previously serving the former tenant in a portion of Tenant's
Premises (The Biomembrane Institute) and no other load has been or may be
connected without Landlord's prior written approval. Tenant shall provide
Landlord, within ninety (90) days of the Effective Date of this Lease, a copy of
panel schedules indicating any and all loads, plus an estimate of full load amp
draw being provided by Landlord's Generator to Tenant's electrical panels. If
such information is not provided within such 90-day period, then Tenant's use of
Landlord's Generator shall terminate without further notice. Tenant further
acknowledges and agrees that its use of Landlord's Generator is subject to
existing load shedding capabilities, and Tenant understands and agrees that if
the actual electrical load being placed upon Landlord's Generator exceeds the
output capabilities, the load shedding equipment currently in place would then
proceed to reduce the load requirement by shutting down those power feeds
servicing the Premises. Landlord agrees that it will continue to maintain
Landlord's Generator consistent with past practices, and upon Tenant's request,
Landlord will provide copies of the service records.

Tenant further understands and agrees that Landlord does not warrant the
adequacy of Landlord's Generator for Tenant's needs or that the power available
from Landlord's Generator will be free from interruption. Except to the extent
caused by the gross negligence, or willful misconduct of Landlord or its agents,
contractors or invitees, interruption of service from Landlord's Generator or of
any power source shall not be

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deemed an eviction or excuse for performance of any of Tenant's obligations
under this Lease or render Landlord liable for damages. Tenant further
acknowledges and agrees to assume full responsibility for all and shall, at its
option, take any additional precautions it deems necessary to insure that its
equipment being serviced by Landlord's Generator is adequately protected.

Except to the extent of the gross negligence or willful misconduct of Landlord
or its agents, contractors or invitees, Tenant agrees to indemnify and hold
Landlord harmless from and against any liabilities, obligations, damages, costs,
and expenses (including attorneys' fees incurred prior to trial, at trial and
upon appeal) incurred in connection with its use of Landlord's Generator, any
failure of Landlord's Generator to provide power to Tenant, and/or any damages
resulting to any of Tenant's equipment resulting from a failure of Landlord's
Generator to provide power to Tenant. This indemnity shall survive termination
of this Lease.

               1.3.2.    Installation of Tenant Generator. Tenant shall have the
right, at no additional Rent to Tenant, to install its own generator (with fuel
tank) in a mutually agreeable location, along with the conduit reasonably
necessary to connect to the Premises, subject to Landlord's prior written
approval as to the plans and specifications therefor, which consent will not be
unreasonably withheld. Throughout the term of the Lease, Tenant shall have
reasonable access to the generator in order to operate and maintain Tenant's
generator. The installation and operation shall be in compliance with all laws,
rules and regulations, as well as all of the terms and conditions of this Lease.

     1.4.      Property. The Premises, Building, Land, and the improvements on
the Land other than the Building, are sometimes collectively referred to in this
Lease as the "Property".

     1.5.      Tenant's Share. "Tenant's Share" shall mean "Tenant's Share of
the Property" or "Tenant's Share of the Building". "Tenant's Share" shall mean
forty-seven and twenty-five one hundredths percent (47.25%), calculated by
dividing the net rentable area of the Premises by the net rentable area of the
Property (approximately 135,178 net rentable square feet). The load factor for
the first (1st) floor is eight and seventy-nine one hundredths percent (8.79%);
the load factor for the third (3rd) floor is sixteen and thirty-five one
hundredths percent (16.35%); the load factor for the fourth (4th) floor is
twenty-one and ten one hundredths percent (21.10%); and the load factor for the
fifth (5th) twenty and twenty- three one hundredths percent (20.23%).

     1.6.      Lease Year. "Lease Year" shall mean each twelve-month period
commencing January 1 and ending December 31.

     1.7.      Commencement Date. Subject to Section 3.1, "Commencement Date"
shall mean February 1, 2003, and this Lease relates to the period commencing on
February 1, 2003.

     1.8.      Expiration Date. "Expiration Date" shall mean January 31, 2008,
unless sooner terminated or extended in accordance with this Lease.

     1.9.      Term. "Term" shall mean a period of five (5) years, commencing on
the Commencement Date and terminating on the Expiration Date, unless sooner
terminated or extended in accordance with this Lease.

     1.10.     Base Rent "Base Rent" from the Commencement Date through the
twelfth (12th) month shall mean One Hundred Seventy-eight Thousand Two
Hundred-eight and 83/100 Dollars ($178,208.83) per month.

"Base Rent" from the thirteenth (13th) month through the twenty-fourth (24th)
month shall mean One Hundred Eighty-four Thousand Eight Hundred Fifty-eight and
42/100 Dollars ($184,858.42) per month.

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"Base Rent" from the twenty-fifth (25th) month through the thirty-sixth (36th)
month shall mean One Hundred Ninety-five Thousand Four Hundred Ninety-seven and
75/100 Dollars ($195,497.75) per month.

"Base Rent" from the thirty-seventh (37th) month through the forty-eighth month
shall mean Two Hundred-two Thousand One Hundred Forty-seven and 33/100 Dollars
($202,147.33) per month.

"Base Rent" from the forty-ninth (49th) month through the Expiration Date shall
mean Two Hundred Seven Thousand Four Hundred Sixty-seven and 00/100 Dollars
($207,467.00) per month. Base Rent shall be payable as provided in Section 4.

               1.10.1.   Garage Support Space Base Rent. "Rent" for the Garage
Support Space from the Commencement date through the twelfth (12th) month shall
be Three Thousand Six Hundred Forty-nine and 17/100 Dollars ($3,649.17) per
month.

"Rent for the Garage Support Space from the thirteenth (13th) month through the
twenty-fourth (24th) month shall be Three Thousand Seven Hundred Fifty-eight and
64/100 Dollars ($3,758.64) per month.

"Rent for the Garage Support Space from the twenty-fifth (25th) month through
the thirty-sixth (36th) month shall be Three Thousand Eight Hundred Seventy-one
and 40/100 Dollars ($3,871.40) per month.

"Rent for the Garage Support Space from the thirty-seventh (37th) month through
the forty-eighth (48th) month shall be Three Thousand Nine Hundred Eighty-seven
and 55/100 Dollars ($3,987.55) per month.

"Rent for the Garage Support Space from the forty-ninth (49th) month through the
Expiration Date shall be Four Thousand One Hundred-seven and 17/100 Dollars
($4,107.17) per month.

               1.10.2.   Generator Rent. "Rent" for Tenant's use of Landlord's
Generator shall be Sixty and 00/00 Dollars ($60.00) per month.

     1.11.     Early Occupancy. Intentionally Deleted.

     1.12.     Additional Rent "Additional Rent" shall mean the amounts
described in Section 8 as Taxes, Personal Property Taxes, Operating Costs, and
all other amounts except Base Rent which are payable by Tenant under this Lease.

     1.13.     Base Year. Intentionally Deleted.

     1.14.     Security Deposit. Intentionally Deleted.

     1.15.     Parking. Subject to Section 29.

     1.16.     Landlord's Payment Address. "Landlord's Payment Address" shall
mean: Elliott Park LLC, P.O. Box 34108, Seattle, Washington 98124-1108. Tenant
may also arrange for monthly wire transfer of Rent using the following
information:

Bank: The Commerce Bank of Washington, 601 Union St., Suite 3600, Seattle, WA
98101; ABA # 125008013; Bank Account # 1173731; Account Name: Sabey Corporation,
12201 Tukwila International Blvd., Fourth Floor, Seattle, WA 98168-5121

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     1.17.     Notice Addresses.

If to Landlord:     Elliott Park LLC c/o Sabey Corporation
                    12201 Tukwila International Blvd., Fourth Floor
                    Seattle, WA 98168-5121
                    Attn: Sr. VP Leasing/Development
                    Fax No. 206-282-9951

with a copy to:     Sabey Corporation
                    12201 Tukwila International Blvd.
                    Fourth Floor
                    Seattle, WA 98168-5121
                    Attn.: VP Property Operations
                    Fax No. 206-282-9951

If to Tenant:       Cell Therapeutics, Inc.
                    501 Elliott Avenue West
                    Suite 400
                    Seattle, WA 98119
                    Attn: Legal Affairs
                    Fax No. 206-272-4496

with a copy to:     Cell Therapeutics, Inc.
                    501 Elliott Avenue West
                    Suite 400
                    Attn: James Canfield, EVP, Chief Administrative Officer
                    Fax No. 206-272-4010

     1.18.     Permitted Uses. "Permitted Uses" shall mean Tenant's use of the
Premises for laboratory and general office, research and development purposes,
subject to the terms and conditions of this Lease.

     1.19.     Landlord's Work. "Landlord's Work" shall mean the improvements,
if any, to be made by Landlord in accordance with Exhibit C.

     1.20.     Tenant's Work. "Tenant's Work" or "Tenant Improvements" shall
mean the improvements, if any, elected to be made by Tenant (in its sole
discretion) in accordance with Exhibit C and in compliance with Exhibit F,
Tenant & Tenant Contractor Construction Criteria, attached hereto, as may be
updated and modified from time to time by Landlord.

     1.21.     Guarantor. Intentionally Deleted.

     1.22.     Exhibits. The following exhibits or riders are attached to this
Lease and are incorporated into this Lease by this reference:

(a)  Exhibit A   - Legal Description

(b)  Exhibit B   - Floor Plan of Premises

(c)  Exhibit C   - Tenant Improvements and Construction Contract

(d)  Exhibit C-l - Tenant's Removable Attached Equipment & Property

(d)  Exhibit D   - Rules and Regulations

(e)  Exhibit E   - Tenant & Tenant Contractor Construction Criteria

(f)  Exhibit F   - Letter Agreement Regarding Boiler Facilities

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2.   PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises described in Section 1.3 and 1.3.1, together with the
tenant improvements described on Exhibit C ("Tenant Improvements") and together
with rights of ingress and egress over and nonexclusive use of public and common
areas in the Building and on the land legally described on Exhibit A, including
all easements pertinent to the land ("Land"). Tenant's lease of the Premises
shall be subject to all of the terms and conditions of this Lease.

Landlord shall complete Landlord's Work, if any, in accordance with Exhibit C.
Notwithstanding anything to the contrary in this Lease, Tenant shall provide
Landlord and Landlord's contractor with such access to the Premises as may be
required by Landlord and Landlord's contractor to efficiently perform Landlord's
Work. Tenant acknowledges and agrees that Landlord shall have no obligation to
construct improvements in the Premises for Tenant's initial occupancy except as
may be expressly set forth on Exhibit C.

     2.1.      Acceptance of Premises. Intentionally Deleted.

     2.2.      Relocation or Termination. Intentionally Deleted

     2.3.      Tenant's Right of First Refusal. During the term of the Lease,
Tenant shall have a right of first refusal (each, a "Right of First Refusal") to
lease any rentable area in the Building as portions of it become available from
time to time (each such portion being referred to herein as an "Additional
Space"), on the same terms and conditions that Landlord is prepared to accept
from any third party. When Landlord receives an offer to lease the Additional
Space from a third party which Landlord desires to accept, Landlord shall
present the same, in writing, to Tenant, and Tenant shall thereafter have ten
(10) days in which to accept or reject that offer by written notice to Landlord.
The Right of First Refusal shall apply only with respect to the entire
Additional Space subject of the third-party offer, and may not be exercised
with respect to only a portion thereof or for only a partial term. If Tenant
rejects that offer or fails to accept the same in writing within that time, then
Landlord shall be free to lease the Additional Space to the third party on
substantially similar terms and conditions to those offered to Tenant in the
foregoing manner.

Each Right of First Refusal shall, at Landlord's election, be null and void if
Tenant is in default beyond applicable notice and cure periods under the Lease
at the date Landlord would otherwise notify Tenant of the offer concerning the
Additional Space or at any time thereafter prior to commencement of the Lease
for the Additional Space. After Tenant validly exercises a Right of First
Refusal provided in this Lease, the parties shall execute an amendment to the
Lease adding the Additional Space, or a new lease for the Additional Space, or
such other documentation as Landlord shall require, promptly after Landlord
shall prepare the same, confirm the leasing of such Additional Space to Tenant,
but an otherwise valid exercise of the Right of First Refusal contained in this
Lease shall be fully effective, whether or not such confirmatory documentation
is executed.

If Tenant exercises a Right of First Refusal granted in this Lease, Landlord
does not guarantee that the Additional Space will be available on the
anticipated commencement date for the lease thereof if the then-existing
occupants of the Additional Space shall hold over, or for any other reason
beyond Landlord's reasonable control. Landlord, however, shall use commercially
reasonable efforts to deliver such Additional Space to Tenant on the anticipated
commencement or in the event of a hold over, as soon after the anticipated
commencement date as reasonably possible. In that event, and provided Landlord
uses such commercially reasonable efforts, Tenant's only recourse shall be that
(i) the rent with respect to the Additional Space shall be abated until Landlord
legally delivers the same to Tenant and (ii) Tenant shall have the right to
terminate the lease for the Additional Space thereof if delivery does not occur
within sixty (60) days of such anticipated commencement date. Tenant's exercise
of that Right of First Refusal shall not operate to cure any default by Tenant
of any of the terms or provisions in the Lease, nor to extinguish or impair any
rights or remedies of Landlord arising by virtue of such default. Each and all
Rights of First

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Refusal are personal to Tenant and may not be exercised or enjoyed by any other
person or entity. If the Lease or Tenant's right to possession of the Premises
shall terminate in any manner whatsoever before Tenant shall exercise a Right of
First Refusal, or if Tenant shall have subleased or assigned its right to
possess more than fifty percent (50%) of the Premises, then immediately upon
such termination, sublease, or assignment, the Right of First Refusal shall
simultaneously terminate and become null and void. Under no circumstances
whatsoever shall a subtenant under a sublease of the Premises, or the assignee
under a full or a partial assignment of the Lease, have any right to exercise a
Right of First Refusal granted in this Lease.

3.   LEASE TERM.

     3.1.      Duration of Lease Term. Tenant's lease of the Premises shall
commence on the Commencement Date and terminate on the Expiration Date or such
earlier or later date as may be provided for under this Lease.

     3.2.      Extension Option. Provided that Tenant has not been in default of
this Lease beyond any applicable cure period during the last thirty-six (36)
months of the Lease Term, Tenant shall have the option ("Option") to extend the
Term of this Lease for one (1) additional period of five (5) years (the "Option
Term") on the same terms and conditions of this Lease as are provided for in the
initial Term, except as provided below in this Section 3.2 or in Section 3.3 and
without any free rent periods or Tenant Improvement allowances. The Option Term
shall commence upon the date of expiration of the initial Term of this Lease. To
exercise its Option, Tenant must give written notice to Landlord that Tenant is
exercising its Option at least twelve (12) months before the date of expiration
of the initial Term. Once such notice is delivered to Landlord, such notice
shall be irrevocable by Tenant. Tenant acknowledges and agrees that
notwithstanding anything to the contrary in this Lease, the right to exercise
the Option shall not extend to any assignee or subtenant of Tenant (other than a
Permitted Transferee), and any attempt to exercise the Option by any such
assignee or subtenant (other than a Permitted Transferee), or by Tenant in
connection with such assigned or subleased space if such assigned or subleased
space exceeds fifty percent (50%) of the Premises, shall be deemed null and
void, except to a Permitted Transferee as defined in Section 15.

     3.3.      Base Rent During Option Term. In the event that Tenant elects to
exercise its Option to extend the term of this Lease in accordance with the
terms of Section 3.2, the Base Rent for the Option Term shall be equal to the
then-market rent for similarly improved space in comparable buildings in the
lower Queen Anne/Seattle bio-tech/office market. In analyzing comparable
transactions, all reasonable factors affecting rent shall be taken into
consideration, including, but not limited to, the building age, size, style and
condition the fact that there will be no free rent period or tenant improvement
allowance.

     If Landlord and Tenant cannot agree on the then-market rate for the Option
Term prior to one hundred eighty (180) days before Lease termination, then both
parties agree to use the appraisal process, outlined as follows: Each party will
hire an MAI appraiser. Each appraiser must have a minimum of five (5) years
appraisal experience in the lower Queen Anne/downtown Seattle area. Each
appraiser shall complete his/her appraisal within thirty (30) days. If the
appraisers' opinion of the market rate differs by less than ten percent (10%) of
the amount of the higher appraisal; then the market rate shall be the average of
the two appraisals. If the appraisers' opinion of market rate differs by more
than ten percent (10%) of the higher appraisal then a third MAI appraiser
satisfying the same qualifications shall be mutually hired and paid for by both
parties. The third appraiser will evaluate the market using the same parameters
outlined in the preceding paragraph. The market rate estimate of the third
appraiser shall be averaged with the market rate estimate of the appraiser
closest to it. The Base Rent for the Option Term shall be the higher of the
resultant average rent utilizing this process or the Base Rent being paid at the
time of the renewal.

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     3.4.      Confirmation of Commencement Date. If the Commencement Date is
not the date indicated in Section 1.7, Landlord may confirm the Commencement
Date to Tenant in writing within a reasonable time after delivery of the
Premises in accordance with this Lease.

     3.5.      Surrender of Premises. Subject to Section 11, Tenant shall
promptly and peacefully surrender the Premises to Landlord upon the termination
of the Lease Term in as good a condition as when received by Tenant from
Landlord and/or as thereafter improved, if applicable, normal wear and tear and
damage from casualty or condemnation excepted. Unless Landlord expressly
provides otherwise in writing to Tenant, upon the expiration or termination of
this Lease, all improvements and alterations and equipment permanently affixed
to the Premises except those items set forth on Exhibit C-l shall be deemed
property of Landlord and shall not be removed by Tenant from the Premises.
Tenant shall be solely responsible for, and shall repair, all damage to the
Property arising out of its surrender of the Premises. In addition to all other
requirements under this Lease, Tenant shall remove any Hazardous Substances, as
such term is defined in Section 6.3, on the Premises which were placed on the
Premises by Tenant, its employees, agents, contractors and/or invitees, prior to
its surrender and vacation of the Premises.

     3.6.      Holding Over With Consent. If Tenant remains in possession of the
Premises after termination or expiration of the Lease Term with Landlord's
written permission, such tenancy shall be deemed a month-to-month tenancy, which
may be terminated by either party upon twenty (20) days' notice. During such
tenancy, Tenant shall be bound by all of the terms, covenants and conditions in
this Lease so far as applicable, except that the Base Rent shall be increased to
the greater of (i) the then-quoted rates for similar space in the Building or
(ii) one hundred twenty-five percent (125%) multiplied by the sum of the monthly
installment of Base Rent and additional Rent payable for the last month of the
Lease Term.

     3.7.      Holding Over Without Consent. If Tenant remains in possession of
the Premises after the termination or expiration of the Lease Term without
Landlord's prior written consent, Tenant shall become a tenant at sufferance
only, subject to all the provisions of this Lease so far as applicable, except
that Base Rent shall be increased to an amount equal to one hundred fifty
percent (150%) multiplied by the sum of the monthly installments of Base Rent
payable by Tenant during the last month of the Lease Term, prorated on a daily
basis. Acceptance by Landlord of Rent after the termination of the Lease Term
shall not result in a renewal or extension of this Lease. The provisions of
Section 3.6 and this Section 3.7 are in addition to, and shall not act as a
waiver of or otherwise affect, Landlord's right of re-entry or any other rights
of Landlord under this Lease or as provided by law or in equity. If Tenant fails
to surrender the Premises upon the termination of the Lease Term, despite
Landlord's demand to do so, Tenant shall indemnify, defend and hold Landlord
harmless from and against all loss and liability, including, without limitation,
any claim made by any succeeding tenant founded on, or resulting from, such
failure to surrender, including without limitation, any attorneys' fees or costs
associated therewith.

4.   RENT.

     4.1.      Payment. Tenant shall pay Landlord the monthly installments of
Base Rent provided in Section 1.10,1.10.1,1.10.2 and Additional Rent provided in
Section 1.12 in lawful money of the United States, in advance, on the
Commencement Date and thereafter on or before the first day of each month
throughout the Lease Term. Base Rent and Additional Rent shall be paid by Tenant
without notice or demand, deduction, abatement, or offset, except as expressly
provided herein. Base Rent and Additional Rent for any partial month at the
beginning or end of the Lease Term shall be prorated in proportion to the number
of days in such month. Base Rent and Additional Rent are collectively referred
to in this Lease as "Rent."

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               4.1.1.    Wire Payments. Any amounts payable to Landlord under
this Lease in excess of One Hundred Thousand and No/100 Dollars ($100,000.00)
per occurrence shall be made by wire transfer as follows:

Bank: The Commerce Bank of Washington, 601 Union St., Suite 3600, Seattle, WA
98101; ABA # 125008013; Bank Account # 1173731; Account Name: Sabey Corporation,
12201 Tukwila International Blvd., Fourth Floor, Seattle, WA 98168-5121.

     4.2.      Interest on Late Payments; Late Charge. If any Base Rent or
Additional Rent is not paid on the due date thereof: (i) such overdue amounts
shall bear interest at a rate equal to fifteen percent (15%) per annum; and (ii)
Tenant shall pay Landlord a late charge equal to three percent (3%) of such
overdue amount. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant, the exact amount of which would be difficult to ascertain.
Acceptance by Landlord of any partial amounts due under this Section 4 shall in
no event constitute a waiver of Tenant's default with respect to any overdue
amount, nor prevent Landlord from exercising any of its other rights and
remedies granted under this Lease or by law or in equity.

     4.3.      Address for Payments. Tenant shall pay all Rent to Landlord at
Landlord's Payment Address, or at such other place as may be designated by
Landlord from time to time by written notice to Tenant.

5.   SECURITY DEPOSIT. Intentionally Deleted.

6.   USES; COMPLIANCE WITH LAWS.

     6.1.      Permitted Uses. The Premises are to be used only for the
Permitted Uses, and for no other business or purpose without the prior written
consent of Landlord, which consent may be withheld if Landlord, in its
reasonable discretion, determines that any proposed use is inconsistent with or
detrimental to the maintenance and operation of the Building as a similar
bio-tech/office building or is inconsistent with any restriction on use of the
Property contained in any lease, mortgage or other agreement or instrument by
which the Landlord may be bound or to which any of the Property may be subject.

     6.2.      Duties and Prohibited Conduct. Notwithstanding anything to the
contrary in this Lease, Tenant shall not knowingly commit any act that will
increase the then-existing rate of insurance on the Building without Landlord's
prior written consent. Tenant shall promptly pay upon demand the amount of any
increase in insurance rates caused by the Permitted Uses or by any act or acts
of Tenant or its employees, agents or representatives. Tenant shall not commit
or allow to be committed any waste upon the Premises, or any public or private
nuisance or other act which disturbs the quiet enjoyment of any other tenant of
the Property or which is unlawful. Tenant shall not, without the written consent
of Landlord, use any apparatus, machinery or device in or about the Premises, or
act in any way, which will cause any substantial noise, or any vibration, fumes,
or releases of Hazardous Substances into the surrounding environment. If any of
Tenant's office machines, equipment or activities should disturb the quiet
enjoyment of any other tenant in the Building, cause any substantial noise, or
cause any vibration, fumes or releases of Hazardous Substances, then Tenant, at
Tenant's sole expense, shall provide adequate insulation or take such other
action as may be necessary to eliminate such disturbance, noise, vibration,
fumes or releases. Tenant, at Tenant's expense, shall comply with all laws,
rules, regulations, orders, ordinances and permits relating to the Premises, or
its use or occupancy of the Premises, and shall observe such reasonable rules
and regulations as may be adopted by Landlord and made available to Tenant from
time to time. This Lease shall be subject to all applicable zoning ordinances
and to all municipal, county, state and federal laws and regulations governing
or regulating the use of the Premises.

     6.3.      Environmental, Health And Safety Laws. Without limiting Tenant's
obligations under this Section 6, Tenant in the exercise of its rights and the
performance of

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its obligations under this Lease shall comply, at Tenant's expense, with all
local, state, or federal laws, rules, regulations, ordinances, orders and
permits now existing, or as hereafter enacted, amended, or issued concerning
environmental, health, or safety matters (collectively, the "Environmental
Laws") in connection with Tenant's use, generation, transportation, management,
handling, treatment, storage, manufacture, emission, release, disposal or
deposit of any radioactive material, hazardous or toxic wastes, hazardous or
toxic substances, any material containing hazardous wastes or hazardous
substances (except as they occur in normal office products or household cleaning
products), or any other pollutant, contaminant, human pathogen or infectious
agent as such terms may now or in the future be defined in any Environmental
Laws (collectively, "Hazardous Substances"), on the Property, adjacent surface
waters, soils, underground waters, or air. Tenant shall have the right to use
and store, in compliance with applicable Environmental Laws, Hazardous
Substances reasonably necessary for the operation of Tenant's business.

Landlord shall have the right at all reasonable times upon at least three (3)
business days prior written notice to Tenant to conduct environmental
investigations, including the taking of samples, for the purpose of detecting or
measuring the presence of Hazardous Substances on the Property. Tenant shall
keep Landlord continuously informed by written notice of all Hazardous
Substances, which Tenant, or Tenant's employees, agents, representatives,
invitees, licensees, or contractors, generates, stores or otherwise allows on
the Property. Tenant shall provide Landlord with copies of all documents
received or prepared by Tenant concerning any release of a Hazardous Substance
at the Property by Tenant, all documents Tenant receives or prepares in
connection with any violation, or alleged violation, of an Environmental Law by
Tenant, and at Landlord's request, all reports or other documents Tenant is
required to provide any governmental authority under any Environmental Law
concerning any Hazardous Substance. Upon request by Landlord, Tenant shall
provide Landlord with all other information in Tenant's possession, which
Landlord reasonably deems necessary or useful for the purpose of determining
whether Tenant is in compliance with all Environmental Laws and whether the
Property, or any part of the Property, is contaminated by any Hazardous
Substances. If Tenant or the Premises, as a result of Tenant's, its employees,
agents, contractors or visitors use of Hazardous Substances, is in violation of
any Environmental Law, or in the event Tenant, Tenant's employees, agents,
contractors or visitors releases Hazardous Substances into or on the Property or
adjacent surface waters, soils, underground waters, or air in violation of
Environmental Laws, Tenant shall (i) immediately notify Landlord in writing of
such occurrence and the action necessary to correct or mitigate such occurrence,
and (ii) take such action as is necessary to mitigate and correct such violation
or release. Provided, however, Landlord reserves the right, but not the
obligation, to enter the Premises, to act in place of the Tenant (and Tenant
hereby appoints Landlord as its agent for such purposes) and to take such action
as Landlord reasonably deems necessary to ensure such compliance or to mitigate
such violation, at Tenant's expense. In the event there is a violation of
Environmental Law in an adjacent premises in the Building, then Tenant shall use
commercially reasonable efforts to mitigate the migration of any Hazardous
Substances from such adjacent premises to the Premises; provided, however,
Tenant shall not be required to spend more than a nominal sum in so doing. If
Tenant is in violation of any Environmental Law, Landlord reserves the right to
enter the Premises with respect to such potential or actual release or violation
and take such corrective or mitigating action as Landlord reasonably deems
necessary to correct such violation by Tenant. All costs and expenses incurred
by Landlord in connection with any such actions shall become immediately due and
payable by Tenant upon presentation of an invoice therefore to the extent of
Tenant's violation of Environmental Law.

Other than testing in the ordinary course of Tenant's operations, Tenant shall
not conduct or permit others to conduct environmental testing on the Premises
without first obtaining Landlord's written consent, which shall not be
unreasonably withheld or delayed. If Landlord does not deliver such reasonable
consent within five (5) days from receipt of Tenant's request, such consent will
be deemed provided. Tenant shall promptly inform Landlord of the existence of
any environmental study, evaluation, investigation or results of any
environmental testing conducted on the Premises whenever the same becomes known

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to Tenant and Tenant shall provide copies to Landlord, upon request by Landlord
and at no cost to Landlord.

Tenant shall, at its sole cost and expense, indemnify, defend and hold harmless
Landlord and Landlord's subsidiaries and parent corporations, shareholders,
members, managers, directors, officers, employees, partners, affiliates, and
agents from, any claims, liabilities, costs or expenses incurred or suffered
arising in connection with any Hazardous Substances which are brought or allowed
on the Premises or the Property by Tenant, Tenant's employees, or its agents,
contractors or invitees, including remedial or enforcement actions of any kind
and administrative or judicial proceedings, orders or judgments, damages
(including consequential and punitive damages), and costs (including attorney,
consultant, and expert fees and expenses) resulting from such release or
violation by Tenant, Tenant's employees, or its agents, contractors or invitees.

To the best knowledge of Landlord, (a) no Hazardous Substance is present in the
Building or on the Property or the soil, surface water or groundwater thereof,
(b) no underground storage tanks are present on the Property, and (c) no action,
proceeding or claim is pending or threatened regarding the Building or the
Property concerning any Hazardous Substance or pursuant to any Environmental
Law. Notwithstanding the foregoing, in no event shall Tenant be responsible for
or liable to Landlord for any Hazardous Substances located in the Premises that
existed or were released upon the Premises prior to the Commencement Date of
this Lease, or that were not released by Tenant, Tenant's employees,
contractors, visitors, or invitees.

Landlord shall indemnify, defend, protect and hold harmless Tenant, its agents,
contractors, stockholders, directors, successors, representatives, and assigns
from and against, all losses, costs, claims, liabilities and damages (including
attorneys' and consultants' fees) of every type and nature, directly or
indirectly arising out of or in connection with any Hazardous Substance present
at any time on or about the Premises prior to the Commencement Date, the
Building or the Property, or the soil, air, improvements, groundwater or surface
water thereof, or the violation of any laws, orders or regulations, relating to
any such Hazardous Substance, except to the extent that any of the foregoing
actually results from the release or emission of Hazardous Substances by Tenant,
Tenant's employees, contractors visitors, or its agents in violation of
applicable Environmental Laws.

In particular, Landlord shall be responsible for keeping the Building in
compliance with Environmental Laws with respect to asbestos and asbestos
containing materials.

Notwithstanding any other provisions of this Lease, Tenant's and Landlord's
indemnity obligations with respect to Hazardous Substances pursuant to this
Paragraph 6.3 shall survive any expiration or any termination of this Lease.

This Section 6.3 constitutes the entire agreement of Landlord and Tenant
regarding Hazardous Materials and Environmental Laws. No other provision of the
Lease shall be deemed to apply thereto.

7.   SERVICES AND UTILITIES; REPAIRS AND MAINTENANCE.

     7.1.      Services and Utilities; Landlord's Obligations. Landlord warrants
that the Building's mechanical, electrical and plumbing systems are designed and
suitable for the delivery of heating, ventilation, air-conditioning ("HVAC"),
electrical and water (including sewer) services sufficient for standard office
use. Landlord shall supply the Premises with HVAC, electricity and, if
applicable, water sufficient for standard office use (including convenience
electricity for lighting and operation of low power usage office machines of
three (3) watts per usable square foot), the cost of which shall be paid by the
Tenant in accordance with Section 8.2. HVAC service will be limited to 7:00 a.m.
to 6:00 p.m. on weekdays (excluding holidays recognized by Landlord) ("Normal
Business Hours"), except for additional service as provided for in this Lease.
Such electricity and water services shall be provided by Landlord twenty-four
(24) hours per day, seven (7) days per week. Landlord

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shall supply Landlord's standard Building and Property security and fire
monitoring services and elevator service, Landlord's standard trash removal
services (excluding disposal of Hazardous Substances or medical or biological
waste) from the Building compactor, if any, bulb replacement services for
Building standard light fixtures, and Landlord's standard exterior window
washing services for Premises' windows. Landlord shall also provide standard
office janitorial services to the Premises if so requested by Tenant.

Any service or utility, which is separately metered to the Premises by the
utility provider shall be billed directly to Tenant and paid directly by Tenant
to the utility provider. The Base rental rate excludes the cost of janitorial
services to the Premises, and utilities to the Premises including the estimated
utilities to supply the Premises with building standard HVAC. All other services
or utilities which are required to be provided by Landlord under Section 7.1
which are not separately metered by the service or utility provider shall be
included within "Operating Costs" and shall be paid by Tenant each month as
provided in Section 8. The cost for any services or utilities, which are not
separately metered or sub-metered shall be based on Landlord's reasonable
estimate of Tenant's consumption of such utilities. If in the Landlord's
reasonable opinion the Tenant's consumption of any utility is extraordinary,
Landlord shall be entitled to install, maintain and operate, at Tenant's cost, a
monitoring/ metering system(s) in the Premises to measure Tenant's consumption
of water, electricity (including electricity to Tenant's signage, if any) HVAC
or other utilities or services, or to measure the added demands on the Premises
electrical or HVAC systems resulting from Tenant's equipment or lights,
including without limitation, Tenant's improvements pursuant to Exhibit C.

Landlord's obligation to provide the services and utilities described in this
Section 7.1 is subject to Section 11 (Damage And Destruction) and Section 22
(Condemnation).

               7.1.1.    Additional Services Or Utilities. The Building standard
mechanical system is designed to accommodate standard office use heating loads
generated by lights or equipment using up to three (3) watts per usable square
foot. Before installing fixtures, lights or equipment in the Premises, which in
the aggregate exceed such amount, or which otherwise consume or require services
or utilities exceeding standard office-type levels, Tenant shall obtain the
written permission of Landlord. Landlord may refuse to grant such permission
unless Tenant agrees to pay Landlord's costs, including Landlord's
administrative fee, for installation of supplementary air conditioning capacity
or electrical systems as necessitated by such equipment or lights. In addition,
Tenant shall pay Landlord as Additional Rent the amount estimated by Landlord
(including Landlord's administrative fee) as the cost of furnishing services or
utilities for the operation of such equipment or lights and the cost of
operation and maintenance of any supplementary air conditioning units
necessitated by Tenant's use of such equipment or lights.

Notwithstanding the foregoing, Tenant shall be entitled to the use of all
electrical and mechanical systems currently being used in the Premises
including, without limitation, the electricity necessary to power such systems.

During other than normal business hours (7:00 a.m. to 6:00 p.m., weekdays),
Landlord may restrict access to the Building in accordance with the Building's
security system, provided that Tenant shall have at all times during the Term of
this Lease (24 hours of all days) reasonable access to the Premises.

If after request by Tenant, Landlord furnishes HVAC or other services or
utilities in addition to the utilities or services required to be provided by
Landlord under this Lease, including without limitation, furnishing utilities or
services at times other than Normal Business Hours or in amounts exceeding
standard office use, then the cost of such non-standard or additional services
or utilities, as reasonably established by Landlord, shall be paid by Tenant as
Additional Rent.

     7.2.      Services and Utilities; Tenant's Obligations. Tenant shall be
solely responsible for providing, and shall pay directly, all charges for
janitorial services to the

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Premises and for any security services desired by Tenant in addition to
Landlord's standard Building and site security services. Tenant shall be solely
responsible for providing, at Tenant's cost, any backup electricity generator
desired by Tenant. It is understood that except as provided in Sections 7.1 or
7.4, Landlord shall not be required to provide any services or utilities to
Tenant, and Tenant shall make all necessary arrangements to have such services
and utilities billed directly to Tenant and paid directly by Tenant. Tenant
shall pay its share, as reasonably determined by Landlord, of any unique
services or equipment used by Tenant, which are shared by other tenants of the
Building, such as generators, dilution tanks and air compressors.

               7.2.1.    Laboratory Systems and Services. Throughout the Term of
this Lease, Tenant, at its sole cost and expense, shall maintain its separate
and exclusive exhausting, heating, ventilation, and air-conditioning system for
the Premises. The electricity used in the Premises for such system shall be
separately metered from an electrical panel and meter in the basement of the
Building and billed directly to Tenant by Seattle City Light. The cost of such
separate meter shall be paid by Tenant.

               7.2.2.    Boiler Room Expenses. Landlord's and Tenant's
respective responsibilities with regard to the boiler facilities in the are set
forth in that certain letter agreement dated November 6, 1992, attached hereto
as Exhibit F.

     7.3.      Interruption. Landlord shall not be liable for any loss, injury
or damage to persons or property caused by or resulting from any variation,
interruption, or failure of services or utilities to be provided by Landlord
under this Lease due to any cause whatsoever, except for loss, injury or damage
caused by the gross negligence, negligence or willful misconduct of Landlord or
its agents, contractors or invitees. No temporary variation, interruption or
failure of services or utilities to be provided by Landlord under this Lease
incident to the making of repairs, alterations or improvements, or due to
accident, strike or conditions or events beyond Landlord's reasonable control,
shall be deemed an eviction of Tenant or relieve Tenant from any of Tenant's
obligations under this Lease.

     7.4.      Landlord's Repair and Maintenance Obligations. Except as provided
in Sections 9 (Improvements and Alterations by Tenant), 11 (Damage or
Destruction) or 22 (Condemnation), Landlord shall cause to be maintained in
reasonably good order and condition the Building (other than the nonstructural
portions of any leased premises) including, without limitation, the Building's
mechanical and electrical systems, the roof, the foundations, the exterior walls
and the public and common areas of the Property, such as lobbies, elevators,
stairs, corridors and restrooms; provided, however, Tenant shall be responsible
for the cost of repair of damage occasioned by any negligent act or omission of
Tenant or Tenant's officers, contractors, agents, invitees, licensees or
employees, subject to Section 12, Waiver of Subrogation. Landlord shall maintain
and repair the Premises' water, if applicable, and elevator service at all times
during the term of the Lease.

     7.5.      Tenant's Repair and Maintenance Obligations. Except for
maintenance, replacements and repairs required to be made or provided by
Landlord under Sections 7.1 or 7.4, Tenant, at its sole cost and expense, shall
provide for the maintenance in accordance with the manufacturer's
recommendations, repair and replacement within the Premises and all built-in
appliances and equipment, including any private restrooms and associated
plumbing, which are in the Premises for Tenant's exclusive use and any security
systems or services desired by Tenant in addition to any such systems or
services as may be provided by Landlord under this Lease, reasonable wear and
tear and damage from casualty or condemnation excepted.

     7.6.      Additional Security. In the event that Tenant's use of the
Premises, or its presence in the Building, results in the need for additional
security for the Premises or the Building, as determined by Landlord, then any
additional security provided by Landlord for the Building or the Premises shall
be at Tenant's sole cost and expense, and shall be reimbursed by Tenant to
Landlord within five (5) days of written demand. This Section shall include,
without limitation, any additional security required as a result of labor

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disturbances, strikes, political protests, dangerous activities, and any other
disturbance or disruption of any kind.

     7.7.      Tenant's Obligations. When performing its obligations under this
Section 7, Tenant shall do so, at Tenant's expense in accordance with all
Environmental Laws and all other applicable laws, ordinances, codes, orders,
rules or regulations of any governmental authority. Tenant shall provide
Landlord upon request, a list of Tenant's maintenance and service providers with
respect to its obligations under this Section 7. Except as provided in Section 9
in connection with Alterations, before making or performing any work, repairs,
or replacement of any kind in the Premises, if such work shall affect the
Building's systems or costs of operation to Landlord then Tenant shall obtain
Landlord's prior written approval, which approval may be conditioned on Tenant
providing Landlord with plans and specifications therefore, if applicable, which
are reasonably acceptable to Landlord. All work, maintenance, repairs and
replacements by Tenant under this Lease shall be performed by licensed and
reputable contractors reasonably acceptable to Landlord in a good and
workmanlike manner. Before installing any heavy building mechanical equipment or
fixtures in the Premises, Tenant shall submit the plans and specifications
therefore to Landlord for Landlord's written approval, which approval shall not
be unreasonably withheld.

8.   ADDITIONAL RENT: OPERATING COSTS AND REAL ESTATE TAXES.

     8.1.      Definitions. In addition to the Base Rent, Tenant shall pay to
Landlord each month as Additional Rent Tenant's Share of Taxes and of Operating
Costs as provided in this Section 8, using the following definitions:

               8.1.1.    Taxes. "Taxes" shall mean taxes on real property and
personal property, charges and assessments (or any installments thereof due
during the Lease Year) levied with respect to the Property, any improvements,
fixtures and equipment on the Property, and all other property of Landlord, real
or personal, used directly in the operation of the Property, and any taxes
levied or assessed (or any installment thereof due during the Lease Year) in
addition to or lieu of, in whole or in part, such real property or personal
property taxes, or any other tax upon leasing of the Property and/or Building or
rents collected, but not including any federal or state income, estate, business
and occupation (except to the extent that a rental tax is imposed as a business
and occupation tax), inheritance or franchise tax.

               8.1.2.    Operating Costs. "Operating Costs" shall mean without
duplication all expenses other than Taxes paid or incurred by Landlord for
obtaining services and products for maintaining, operating, equipment
replacement, and repairing the Property, including without limitation, the
Property's public and common areas, and the personal property used in
conjunction therewith, and which shall include, without limitation, the costs of
Landlord performing its maintenance and repair obligations under this Lease,
amortization of capital improvements (on a straight line basis over the useful
life thereof) made subsequent to the initial development of the Property or
Building which are designed with a reasonable probability of enhancing the
health and/or safety of the Property or improving the operating efficiency of
the Property or Building ("Permitted Capital Improvements"), security services
for the Property, fire alarm system monitoring and testing, refuse collection,
maintaining water, sewer, storm drainage and other utility systems and services,
common area electricity, gas and other similar energy sources (excluding
electricity for the Premises which will be charged to the Tenant subject to
paragraph 8.6 below), supplies, Premises janitorial if provided, common area
janitorial and cleaning services, exterior window washing, landscape planting,
maintenance and irrigation, services of independent contractors (including any
market-rate management fees which may be or become payable to third parties),
compensation (including employment taxes and fringe benefits) of all persons who
perform duties in connection with the operation, maintenance and repair of the
Property and its equipment, the maintenance, resurfacing, repair and striping of
parking areas and curbs (including driveways, loading zones and access
easements), downspouts and gutters, lighting and outdoor facilities, premiums
for

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Landlord's insurance (including applicable interest charges), insurance
deductibles, licenses, permits and inspection fees, a management fee, reasonable
legal, administrative and accounting expenses, and any other expense or charge
whether or not hereinabove described, which in accordance with generally
accepted management practices would be considered an expense of maintaining,
operating, or repairing the Property, excluding or deducting, as appropriate
costs of any special services rendered to individual tenants (including Tenant)
for which a special charge is collected including, without limitation, any
specially metered charges. Notwithstanding the foregoing, Operating Costs shall
not include the following:

(1)  attorney's fees, accounting fees and other expenditures incurred in
connection with negotiations, disputes and claims of other tenants or occupants
of the Building, except as specifically otherwise provided in this Lease;

(2)  costs directly attributable to or for the sole benefit of a tenant,
including Tenant;

(3)  rental on ground leases or other underlying leases;

(4)  cost of any work or services to the extent performed for any facility other
than the Building (provided Landlord shall have the right to reasonably allocate
the cost of services provided to more than one facility);

(5)  costs due to Landlord's willful violation of any governmental rule or
authority;

(6)  charitable or political contributions;

(7)  any fees paid to related parties of Landlord which exceed the market rate
for similar services;

(8)  costs of electricity to other tenants' premises;

(9)  costs occasioned by casualty or by the exercise of the power of eminent
domain;

(10) costs to correct any construction defect in the Premises or the Property or
to comply with any CC&Rs or law applicable to the Premises or the Property on
the Commencement Date;

(11) insurance deductibles in an amount greater than Six Hundred Thousand
Dollars ($600,000) per occurrence;

(12) costs incurred in connection with the presence of any Hazardous Substance
in, on, under or about the Property except to the extent caused by the release
or emission of the Hazardous Substance in question by the Tenant, Tenant's
employees, contractors, visitors, and invitees;

(13) interest, charges and fees incurred on debt;

(14) costs which could properly be capitalized under generally accepted
accounting principles, except for Permitted Capital Improvements; and

(15) costs to repair and maintain the structural portions of the Building.

               8.1.3.    Tenant's Share. "Tenant's Share" in connection with
Operating Costs and Taxes shall mean Tenant's Share of the Property multiplied
by actual or estimated, as the case may be, Operating Costs or Taxes allocated
to the Property, respectively. Notwithstanding anything to the contrary in this
Section 8.1.3, in determining the amount of Operating Costs, for the purpose of
this Section 8.1.3: if less than ninety-five percent (95%) of the Building shall
have been occupied by tenants and fully used by them at any time, Operating
Costs which vary by level of occupancy shall be increased to an amount equal to
the like Operating Costs which would normally be expected to be incurred had

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such occupancy been ninety five percent (95%) and had such full utilization by
tenants been made during the entire period; and (b) if the Landlord is not
furnishing any particular work or service (the cost of which if performed by the
Landlord would constitute an Operating Cost) to a tenant other than Tenant, who
has undertaken to perform such work or service in lieu of the performance
thereof by the Landlord, Operating Costs shall be deemed for the purposes of
Section 8.1.2 to be increased by an amount equal to the additional Operating
Costs which would reasonably have been incurred during such period by the
Landlord if it had at its own cost furnished such work or service to such
tenant. Notwithstanding the foregoing, this Section 8.1.3 shall not be construed
to require that the Tenant incur an expense twice for the same service or incur
an expense for a service which is not provided to Tenant.

     8.2.      Payment of Additional Rent for Estimated Operating Costs and
Taxes. Within thirty (30) days of the Commencement Date or the close of each
Lease Year, as applicable, or as soon thereafter as is practicable, Landlord
shall provide Tenant with a written statement of Tenant's Share of estimated
Operating Costs and Taxes for such Lease Year. Tenant shall pay 1/12 of the
amount of any special or specific Tenant charges, and Tenant's Share of
Operating Costs and Taxes as Additional Rent as provided in Section 4 each month
during such Lease Year and until such time as Landlord provides Tenant with a
statement of estimated Operating Costs and Taxes for the subsequent Lease Year.
If at any time or times during such Lease Year, it appears to Landlord that
Tenant's Share of actual Operating Costs and/or actual Taxes will vary from the
estimated Operating Costs and/or Taxes by more than five percent (5%) on an
annual basis, Landlord may, by written notice to Tenant, revise its estimate for
such Lease Year and Additional Rent payable by Tenant under this Section 8.2 for
such Lease Year shall be increased based on Landlord's revised estimate.

     8.3.      Actual Operating Costs and Taxes. Landlord will make reasonable
efforts within ninety (90) days after the close of each Lease Year during the
Term hereof for which an estimated statement was delivered to Tenant pursuant to
Section 8.2, to deliver to Tenant a written statement ("Reconciliation
Statement") setting forth Tenant's Share of the actual Operating Costs and Taxes
paid or incurred by Landlord during the preceding Lease Year (or such prorated
portion of such Lease Year if this Lease commences or terminates on a day other
than the first or last day of a Lease Year, based on a 365-day Lease Year). If
the actual Operating Costs and/or Taxes shown on the Reconciliation Statement
for any Lease Year exceed estimated Operating Costs and/or Taxes paid by Tenant
to Landlord pursuant to Section 8.2, Tenant shall pay the excess to Landlord as
Additional Rent within thirty (30) days after the date of the Reconciliation
Statement. If the Reconciliation Statement shows that actual Operating Costs
and/or Taxes are less than the estimated Operating Costs and/or Taxes paid by
Tenant to Landlord pursuant to Section 8.2, then the amount of such overpayment
shall be credited by Landlord to the next Base Rent and Additional Rent payable
by Tenant (or refunded to Tenant in the event of the termination or expiration
of this Lease). Notwithstanding anything to the contrary in this Section 8.3,
Tenant's Share of Operating Costs and Taxes for any partial Lease Year at the
end of the Term shall be as shown on Landlord's statement of estimated Operating
Costs and Taxes furnished to Tenant pursuant to Section 8.2.

     8.4.      Determinations. The determination of actual and estimated
Operating Costs and Taxes shall be made by Landlord. Landlord or its agent shall
keep records in reasonable detail showing all expenditures made for the items
enumerated in this Section 8. Tenant shall have the right at its own cost and
expense to review and/or inspect Landlord's records once in any calendar year
with respect to any Operating Costs shown on Landlord's annual reconciliation
statement provided to Tenant. This review/inspection right is limited solely to
the prior calendar year based upon the date Tenant provides written notice to
Landlord. Tenant shall give Landlord written notice ("Tenant's Notice") of its
intention to conduct any such review or inspection on or before sixty (60) days
after the date of Tenant's receipt of Landlord's annual reconciliation
statement. Tenant's review/inspection shall be conducted by a certified public
accounting firm at Landlord's main business office, or at

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such other location as Landlord may keep its relevant business records, and on a
date mutually agreed upon by Landlord and Tenant, but in no event is Landlord
required to agree to a date which is earlier than sixty (60) days from the date
of Tenant's Notice to Landlord. Landlord agrees that it shall give Tenant said
access to review/inspect the business records no later than seventy-five (75)
days after Tenant's Notice to Landlord. Tenant must provide written notice to
Landlord within sixty (60) days after Tenant's review or inspection specifying
any and all claims it may have determined in good faith. Tenant agrees to
diligently pursue its review/inspection of Landlord's records in order to
determine if it concurs or disagrees with Landlord's statement.

Tenant shall be deemed to have waived its review and inspection right, and
therefore agree with Landlord's changes, with respect to the period of time
covered in Landlord's annual reconciliation statement if any of the following
occurs:

     (a) Tenant has not notified Landlord in writing on or before sixty (60)
         days after Tenant's receipt of Landlord's annual reconciliation
         statement of its intention to conduct its review/inspection,

     (b) Tenant has not commenced its review/inspection of Landlord's records at
         Landlord's office or designated location on or before ninety (90) days
         after Tenant's Notice to Landlord unless due to a delay by Landlord in
         providing Tenant with access to such records,

     (c) Tenant has not provided written notice to Landlord on or before sixty
         (60) days after Tenant's review/inspection specifying any and all
         claims it may have determined in good faith.

Tenant, and its employees, agents, attorneys, accountants and representatives
agree that any and all information concerning Operating Costs or any other
information disclosed by Landlord pursuant to any such review/inspection shall
not be disclosed to any other person or entity without the prior written consent
of Landlord, which consent shall be at Landlord's sole discretion. Prior to
providing such confidential information to any of Tenant's employees, agents,
attorneys, accountants or representatives, Tenant shall deliver to Landlord a
written acknowledgment of such parties' agreement to be bound by the terms of
this paragraph, in a form reasonably satisfactory to Landlord. Nothing in this
paragraph shall relieve Tenant of its obligation under Section 8 to pay
Additional Rent without notice, demand, offset or deduction.

Tenant shall bear the cost of such audit, unless such audit discloses that
Landlord has overstated the total costs by more than five percent (5%) of the
actual amount of such costs, in which event Landlord shall pay the actual and
reasonable costs of Tenant's audit. Landlord shall promptly refund any
overcharges to Tenant.

     8.5.      Tenant's Personal Property Taxes. Tenant shall pay prior to
delinquency all Personal Property Taxes payable with respect to all Property of
Tenant located on the Premises or the Property and, upon Landlord's request,
shall promptly provide Landlord with written proof of such payment. Solely for
purposes of this Section 8.5, "Property of Tenant" shall include Tenant
Improvements and all other improvements which are paid for by Tenant, and
"Personal Property Taxes" shall include all property taxes assessed against the
Property of Tenant, whether assessed as real or personal property.

     8.6.      Tenant's Utility Charges. Landlord and Tenant agree that
utilities to the Premises including the cost of utilities to provide Building
standard HVAC are not included in the Base Rent. Landlord will estimate, by
meter if possible, the cost of the Tenant's usage of electricity and natural gas
for its Premises, including the cost of utilities to heat and cool the Premises.
Tenant shall pay to the Landlord as Additional Rent each month the Landlord's
estimate of such charges. At the end of each calendar year the Landlord shall
compare the previous 12 months actual charges to its estimates. Any amounts
owing shall

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be paid by Tenant, and credit amounts shall be refunded to Tenant in accordance
with Section 8.3. Landlord shall adjust its estimates as provided for in Section
8.2.

9.   IMPROVEMENTS AND ALTERATIONS BY TENANT. Landlord grants Tenant the right to
modify existing office and laboratories including, but not limited to the
addition of chemistry capacity, in accordance with the terms below. Tenant shall
not make any changes, alterations, additions or improvements in or to the
Premises ("Alterations"), including, without limitation, changes to locks on
doors or to plumbing, without first obtaining the written consent of Landlord
(which consent shall not be unreasonably withheld) and, where reasonably
required by Landlord, such Alterations shall be made under the supervision of a
competent architect and/or a licensed structural engineer, and in accordance
with plans and specifications (where plans and specifications are required)
which meet current building standards for quality, design, and colors if visible
from the hallways or exterior, approved by Landlord, which approval shall not be
unreasonably withheld. Prior to commencing any Alterations, Tenant shall notify
Landlord of such work and Landlord shall perform a good faith asbestos
inspection in accordance with applicable laws and regulations. Tenant agrees
that Sabey Construction Inc. will have a right of refusal at the agreed upon
fee, to be the contractor for any and all Alterations for which Tenant chooses
to employ a general contractor, provided that Elliott Park LLC remains the
Landlord, in accordance with the terms and conditions contained in the
Construction Contract in Exhibit C attached hereto. All work with respect to any
Alterations shall be done in a good and workmanlike manner and shall be
diligently prosecuted to completion. In no event shall Tenant's Alterations
change or affect the strength, exterior appearance, roof, or the mechanical,
electrical, or plumbing services or systems, of the Building without Landlord's
reasonable consent. Tenant shall reimburse Landlord upon demand for any sums
reasonable expended by Landlord for examination and approval of plans and
specifications for any and all Alterations. Tenant shall also pay Landlord a sum
equal to the costs incurred by Landlord during any inspection or supervision of
any and all Alterations. All damages or injury to the Property caused by any
negligent act or omission of Tenant, or Tenant's officers, contractors, agents,
invitees, licensees or employees, or by any persons who may be in or upon the
Property with the express or implied consent of Tenant, in connection with such
Alterations; including but not limited to, damage from cracked or broken glass
in windows or doors, shall be paid by Tenant upon demand by Landlord. Tenant and
Tenant's contractor shall comply with the general conditions for construction as
referenced in Exhibit C.

10.  ACCESS. During other than Normal Business Hours, Landlord may restrict
access to the Building in accordance with a Landlord provided Building security
system. Tenant shall have at all times during the Lease Term (24 hours of all
days) reasonable access to the Premises. Landlord, at Tenant's cost, shall
provide Tenant with security access cards to the Building for the Building's
security system. Landlord acknowledges that Tenant has cards to date and will
not be charged for previous cards provided. Tenant shall permit Landlord and its
agents to enter the Premises at all reasonable times (except in cases of
emergency) for the purpose of inspecting or improving the Premises or the
Building or for performing any of its obligations under this Lease, upon at
least one (1) business days' prior notice to Tenant. Nothing contained in this
Section 10 shall be deemed to impose any obligation upon Landlord not expressly
stated elsewhere in this Lease. When reasonably necessary Landlord may
temporarily close entrances, doors, corridors, elevators or other facilities
without liability to Tenant by reason of such closure and without such action by
Landlord being construed as an eviction of Tenant or release of Tenant from the
duty of observing and performing any of the provisions of this Lease, so long as
such action does not materially and unreasonably interfere with Tenant's access
to the leased Premises. Landlord shall have the right to enter the Premises for
the purpose of showing the Premises to prospective tenants within the period of
one hundred eighty (180) days prior to the expiration or sooner termination of
the Lease Term. Landlord shall have the right at all times to enter the
Premises, with at lease one (1) business days' notice to Tenant, for the purpose
of showing the Premises to prospective purchasers or lenders. Any entry by
Landlord or its agents hereunder shall comply with Tenant's reasonable security
measures.

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11.  DAMAGE OR DESTRUCTION.

     11.1.     Damage and Repair. If the Building is damaged by fire or any
other cause to such extent that the cost of restoration, as estimated by
Landlord, will equal or exceed thirty percent (30%) of the replacement value of
the Building (exclusive of foundations) just prior to the occurrence of the
damage, or if insurance proceeds sufficient for restoration are for any reason
unavailable, then Landlord may no later than the ninetieth (90th) day following
the damage, give Tenant a notice of its election to terminate this Lease. In the
event of such election; (a) this Lease shall be deemed to terminate on the date
that is thirty (30) days from the date of Tenant's receipt of such notice
("Termination Date"); (b) Tenant shall surrender possession of the Premises on
the Termination Date; and (c) Rent and Additional Rent shall be apportioned as
of the date of Tenant's surrender and any Rent paid for any period beyond such
date shall be repaid to Tenant. If the cost of restoration as estimated by
Landlord shall amount to less than thirty percent (30%) of said replacement
value of the Building or Property and insurance proceeds sufficient for
restoration are available, or if Landlord does not elect to terminate this
Lease, Landlord shall restore the Building and the Premises (to the extent of
the improvements to the Premises originally provided by Landlord hereunder but
excluding any improvements paid for by Landlord with any tenant allowance or
credits) with reasonable promptness, subject to delays beyond Landlord's control
and delays in the making of insurance adjustments by Landlord, and Tenant shall
have no right to terminate this Lease except as provided in this Section 11. To
the extent that the Premises are rendered untenantable by such damage or by
Landlord's restoration work under this Section, the Base Rent (but not
Additional Rent) shall proportionately abate, provided, however, in the event
such damage resulted from or was contributed to, directly or indirectly, by the
act, fault or neglect of Tenant, Tenant's officers, contractors, agents,
employees, invitees or licensees, Base Rent shall abate only to the extent
Landlord receives proceeds from any rental income insurance policy received by
Landlord for loss of Rent under this Lease.

     11.2.     Destruction During Last Year of Term. Notwithstanding anything to
the contrary in this Lease, in case the Building shall be substantially
destroyed by fire or other cause at any time during the last Lease Year of this
Lease (as extended), either Landlord or Tenant may terminate this Lease upon
written notice to the other given within thirty (30) days of the date of such
destruction.

     11.3.     Business Interruption. No damages, compensation or claim shall be
payable by Landlord for inconvenience, loss of business or annoyance arising
from any damage or destruction, repair or restoration of any portion of the
Premises or the Building. Landlord shall use reasonable efforts to effect such
repairs promptly.

     11.4.     Tenant Improvements. Landlord will not carry insurance of any
kind on any improvements or alterations paid for by Tenant under this Lease or
paid for pursuant to any tenant allowance or credits from Landlord, or on
Tenant's furniture, furnishings, fixtures, equipment or appurtenances of Tenant
under this Lease and Landlord shall not be obligated to repair any damage
thereto or replace the same. Tenant shall insure its improvements in accordance
with Section 14.2 and proceeds of such insurance shall be used in any repair or
restoration of the Premises.

     11.5.     Express Agreement. The provisions of this Section 11 shall be
considered an express agreement governing any case of damage or destruction of
the Building or Premises by fire or other casualty.

12.  WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in the
Lease, whether loss or damage is due to the negligence of either Landlord or
Tenant, their agents or employees, or any other cause, Landlord and Tenant do
each hereby release and relieve the other, their agents or employees, from
responsibility for, and waive their entire claim of recovery for, (i) any loss
or damage to the real or personal property of either party located anywhere on
the Property, including the Building itself, arising out of or incident to the
occurrence of any of the perils which are covered, or are required to be covered
under

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this Lease, by their respective property and related insurance policies, and
(ii) any loss resulting from business interruption at the Premises or loss of
rental income from the Building, arising out of or incident to the occurrence of
any of the perils covered by any business interruption insurance policy, or by
any loss of rental income insurance policy, which may be held by Landlord or
Tenant. Each party shall cause its insurance carriers to consent to the
foregoing waiver of rights of subrogation against the other party.

13.  INDEMNIFICATION. Landlord shall not be liable for, and Tenant shall defend
(unless Landlord waives its right to such defense, and in any event with counsel
reasonably satisfactory to Landlord), indemnify, hold harmless and protect
Landlord and its employees and agents from any claim, demand, liability,
judgment, award, fine, mechanics' lien or other lien, loss, damage, expense,
penalty, charge or cost of any kind or character (including actual attorney fees
and court costs) which may be made, incurred or asserted by Tenant, Tenant's
agents or employees, contractors, or any third parties (including but not
limited to Landlord's agents, servants or employees), arising directly or
indirectly from: (a) the construction, repair, alteration, improvement, use,
occupancy or enjoyment of the Premises by Tenant its contractors, agents,
employees and/or customers, licensees, or invitees(a) injury to, or death of,
any person or persons or damage to, or destruction of, any property occurring
in, on or about the Premises, unless it is the result of Landlord's gross
negligence, negligence or willful misconduct or the gross negligence, negligence
or willful misconduct of its agents, contractors or invitees or (b) Tenant's
breach of this Lease or the negligent acts or omissions of Tenant or its
officers, directors, shareholders, employees, contractors, subcontractors, or
agents (the "Claims"). TENANT HEREBY WAIVES ITS IMMUNITY WITH RESPECT TO
LANDLORD UNDER THE INDUSTRIAL INSURANCE ACT (RCW TITLE 51) AND/OR THE
LONGSHOREMEN'S AND HARBOR WORKER ACT, AND/OR ANY EQUIVALENT ACTS AND TENANT
EXPRESSLY AGREES TO ASSUME POTENTIAL LIABILITY FOR ACTIONS BROUGHT AGAINST
LANDLORD BY TENANT'S EMPLOYEES. THIS WAIVER HAS BEEN SPECIFICALLY NEGOTIATED BY
THE PARTIES TO THIS LEASE AND TENANT HAS HAD THE OPPORTUNITY TO, AND HAS BEEN
ENCOURAGED TO, CONSULT WITH INDEPENDENT COUNSEL REGARDING THIS WAIVER.

Notwithstanding anything to the contrary in this Section 13, nothing in this
Section 13 shall relieve Landlord from responsibility for its proportionate
share of its fault attributable to its or its agents', contractors' or invitees'
negligence or willful misconduct in causing any such Claims.

Tenant shall not be liable for, and Landlord shall defend (unless Tenant waives
its rights to defense, and in any event with counsel reasonably satisfactory to
Tenant), indemnify, hold harmless and protect Tenant and its employees and
agents from any claim, demand, liability, judgment, award, fine, mechanics lien
or other lien, loss, damage, expense, penalty, charge or cost of any kind of
character (including reasonable attorneys' fees and court costs) which may be
made, incurred by or asserted against Tenant by third parties arising or
resulting from damage to property or injury to person to the extent caused by
the negligence or willful misconduct of Landlord, its employees, agents,
servants or representatives.

14.  INSURANCE.

     14.1.     Worker's Compensation. Commencing on the Commencement Date and
continuing throughout the Term of this Lease and any renewal hereof, Tenant
shall, at its own expense, keep and maintain in full force and effect, all
required worker's compensation coverages, including employer's liability at a
limit of not less than One Million Dollars ($1,000,000).

     14.2.     Liability Insurance. Commencing on the Commencement Date, Tenant
shall, throughout the Term of this Lease and any renewal hereof, at its own
expense, keep and maintain in full force and effect, a policy of commercial
general liability insurance on an occurrence form, including but not limited to
Premises and operations; blanket

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contractual; products/completed operations; owners' and contractors' protective;
employer's contingent liability (stop gap); personal injury; insuring Tenant's
activities upon, in or about the Premises or the Building against claims of
bodily injury or death or property damage or loss with a combined single limit
of not less than Two Million Dollars ($2,000,000) per occurrence and Two Million
Dollars ($2,000,000) in the aggregate. General aggregate shall apply on a per
location basis. Landlord and others as required by Landlord shall be an
additional insured.

     14.3.     Property Insurance. Tenant shall, throughout the Term of this
Lease and any renewal hereof, at its own expense, keep and maintain in full
force and effect special form perils coverage on Tenant's leasehold
improvements, including without limitation, any improvements made by Landlord on
behalf Tenant or pursuant to a tenant allowance or credit at one hundred percent
(100%) of the current replacement cost value.

Landlord is not required to carry insurance of any kind on Tenant's improvements
or on Tenant's furniture, furnishings, fixtures, equipment or appurtenances of
Tenant under this Lease and Landlord shall not be obligated to repair any damage
thereto or replace the same.

     14.4.     Automobile Liability Insurance Requirements. Tenant shall
maintain automobile coverage with a combined single limit of not less than One
Million Dollars ($ 1,000,000). Coverage shall apply to any owned, non-owned or
hired automobiles.

     14.5.     Insurance Policy Requirements. All policies of insurance required
under this Section 14 shall be with companies reasonably approved by Landlord.
No insurance policy required under this Section 14 shall be cancelled or
materially reduced in coverage except after thirty (30) days (ten (10) days for
non-payment of premium) prior written notice to Landlord. All insurers shall
have a Best's rating of AV or better and be licensed and admitted to do business
in the State of Washington. The property and liability policies required under
this Section 14 shall be written as primary policies and not contributing to nor
in excess of any coverage Landlord may choose to maintain.

Tenant shall deliver to Landlord prior to the Commencement Date, copies of
policies of such insurance or certificates with endorsement, evidencing the
existence of the minimum required insurance and evidencing Landlord, Landlord's
mortgagee, and any other persons or entities requested by Landlord to be
included as additional insureds hereunder. In no event shall the limits of any
insurance policy required under this Section 14 be required under this Section
14 be considered as limiting the liability of Tenant under this Lease.

In no event shall the limits or coverages required to be carried be considered
as necessarily adequate nor limiting the liability of Tenant under this Lease.

     14.6.     Failure to Maintain Insurance. If Tenant fails or refuses to
maintain any insurance required, Landlord may, at its option, procure insurance
for Landlord's benefit and/or interests and any and all premiums paid by
Landlord therefore shall be deemed Additional Rent and shall be due on demand.
Landlord will not be responsible to procure insurance for Tenant's interests
and/or benefit.

     14.7.     Increased Insurance Costs. Tenant shall not keep, use, sell or
offer for sale in or upon the Premises, nor conduct any operation, which may be
prohibited by Landlord's insurance carriers. Tenant shall pay any increase in
premiums for property and liability insurance that may be charged during the
Lease Term on the amount of such insurance which may be carried by Landlord on
the Premises or the Building or Buildings of which they are a part, resulting
from Tenant's particular activities on the Premises or from the type of
merchandise which Tenant stores or sells on the Premises, whether or not
Landlord has consented thereto. In the event of increased insurance costs to
Landlord, Tenant shall also pay an additional premium on the insurance policy or
policies that Landlord may carry for its protection against loss resulting from
any insured event. In determining whether increased premiums are the result of
Tenant's particular activities on the Premises, rates and/or premiums determined
by the organization and/or underwriter setting the insurance

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rates and/or charges on the Premises of Building or Buildings of which they are
a part shall be conclusive evidence of the several items and charges which make
up the insurance premium. Landlord shall deliver bills for such additional
premiums to Tenant at such times as Landlord may elect, and Tenant shall
immediately reimburse Landlord therefore.

15.  ASSIGNMENT AND SUBLETTING.

     15.1.     Assignment or Sublease. Tenant shall not assign, mortgage,
encumber or otherwise transfer this Lease or sublet the whole or any part of the
Premises without in each case first obtaining Landlord's prior written consent,
which consent may not be unreasonably conditioned, delayed or withheld. Tenant
also acknowledges that any right of first refusal, option to extend the Term of
this Lease, or any other options which Landlord has granted herein are
particular to Tenant and are not assignable or transferable to any assignee or
sublessee under this Lease, except to a Permitted Transferee.

In no event shall an assignment, subletting or other transfer of the Lease
relieve Tenant of any of its obligations under this Lease. Consent to any such
assignment, subletting or transfer shall not operate as a waiver of the
necessity for consent to any subsequent assignment, subletting or transfer.

If Tenant is a corporation, any transfer of this Lease by merger, consolidation
or liquidation, or any change in the ownership of a majority of its outstanding
voting stock, or power to vote a majority of its outstanding voting stock, shall
constitute an assignment for the purpose of this Section 15; provided, however,
for the purposes of this Section 15, a public offering of stock registered with
the SEC or a transfer of stock over a national exchange, shall not constitute a
transfer. If Tenant is a partnership, limited liability company, or other
entity, any transfer of this Lease by merger, consolidation, liquidation,
dissolution, or any change in the ownership of a majority of the ownership
and/or economic interests shall constitute an assignment for the purpose of this
Section 15.

Notwithstanding anything in this Lease to the contrary, Landlord's consent shall
not be required for any of the following transfers (each of which shall be an
"Affiliate Transfer"): (i) to any person(s) or entity who controls, is
controlled by or is under common control with Tenant, (ii) to any entity
resulting from the merger, consolidation or other reorganization with Tenant,
whether or not Tenant is the surviving entity, provided that the surviving
entity has a net worth equal to or greater than Tenant just prior to such
merger, consolidation or reorganization or (iii) to any person or legal entity
which acquires all or substantially all of the assets or stock of Tenant
provided that the person or legal entity has a net worth equal to or greater
than Tenant just prior to such acquisition (each of the foregoing is hereinafter
referred to as a Tenant Affiliate); provided that before such assignment shall
be effective, (x) said Tenant Affiliate shall assume, in full, the obligations
of Tenant under this Lease, (y) Landlord shall be given written notice of such
assignment and assumption and (z) the use of the Premises by the Tenant
Affiliate shall be a Permitted Use.

     15.2.     Documentation and Expenses. In connection with each request for
an assignment or subletting Tenant shall: (i) submit in writing to Landlord the
name and legal composition of the proposed subtenant or assignee, the nature of
the proposed subtenant's or assignee's business to be carried on in the
Premises, the terms and provisions of the proposed sublease or assignment and
such reasonable financial information as Landlord may request concerning the
proposed subtenant or assignee; and (ii) pay Landlord's reasonable costs of
processing such assignment or subletting, including reasonable attorneys' fees,
upon demand of Landlord. Tenant shall provide Landlord with copies of all
assignments, subleases and assumption instruments.

     15.3.     Transferee Obligations. As a condition to Landlord's approval of
an assignment, any potential assignee otherwise acceptable to Landlord shall
assume, in writing, all of Tenant's obligations under this Lease and Tenant and
such assignee shall agree, in writing, to be jointly and severally liable for
the performance of all of Tenant's obligations under this Lease. As a condition
to Landlord's approval any sublessee otherwise

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acceptable to Landlord such sublessee shall assume, in writing, all of Tenant's
obligations under this Lease as to the subleased portion of the Premises and
Tenant and such sublessee shall agree, in writing, to be jointly and severally
liable with Tenant for the lesser of the Rent under this Lease or the Rent under
the sublease paid directly to Landlord and performance of all of the terms,
covenants and conditions of "Tenant" under the Lease with respect to the
subleased portion of the Premises. If an assignment or sublease is consented to
by Landlord, then the Tenant shall pay all costs incurred in connection
therewith (including any lease commissions and lease concessions), and the
assignment or sublease shall state that all Rent payments from the assignee or
sublessee shall be paid directly to Landlord. In connection with a permitted
assignment or sublease:

(a)  So long as the Tenant is not in default under this Lease, Landlord shall
grant to Tenant a credit against the monthly rental due under this Lease in the
amount of the rental actually received by Landlord under the assignment or
sublease for that month, calculated on a per square foot basis, and based upon
the portion of the Premises covered by the assignment or sublease. Landlord
shall pay to Tenant the amount of such credit in excess of the Rent under the
Lease as to such portion of the Premises except that Landlord shall be entitled
to fifty percent (50%) of such excess after subtracting Tenant's broker
commissions, attorneys' fees and improvement costs, as such commissions, fees
and costs are amortized on a straight-line basis over the sublease term. If in
any month Tenant is entitled to a credit under this subsection (a), but the
credit arises after the Tenant has paid in full the rental due under this Lease
for that month, then Landlord shall pay the amount of the credit within five (5)
business days after the date that the payment is received by Landlord from the
assignee or sublessee.

16.  SIGNS. Tenant shall not inscribe any inscription, or post, place, or in any
manner display any sign, graphics, notice, picture, placard or poster, or any
advertising matter whatsoever, anywhere in or about the Property at places
visible (either directly or indirectly as an outline or shadow on a glass pane)
from anywhere outside the Premises without first obtaining Landlord's written
consent, such consent to be at Landlord's reasonable discretion. Any such
consent by Landlord shall be upon the understanding and condition that Tenant
shall remove the same at the expiration or sooner termination of this Lease and
Tenant, at its expense, shall repair any damage to the Property, or any portion
thereof, caused by such removal. Notwithstanding the foregoing, if Tenant is
permitted to place signage on the Building such signage must be pre-approved by
Landlord's architect (which approval shall not be unreasonably withheld) and
must comply with local laws. The cost of such signage, maintenance, repair and
operation shall be borne exclusively by Tenant. In addition to any signage of
Tenant existing prior to the Commencement Date, Tenant shall have the right to
install, at its sole cost and expense, Building exterior signage for increased
presence, subject to Landlord's reasonable approval of the design and
specifications thereof and compliance with city codes and standards.

17.  LIENS. Tenant has no authority to allow any liens to be placed against the
Property. Tenant shall keep its interest in this Lease, any property of Tenant
located on the Property, and the Property free from any liens arising out of any
work performed or materials ordered or obligations incurred by or on behalf of
Tenant and Tenant hereby agrees to indemnify, defend and hold Landlord harmless
from and against any liability from any such lien, including without limitation,
liens arising from Tenant's Work. In the event any lien is filed against the
Property, or any portion thereof, by any person claiming by, through or under
Tenant, Tenant shall, upon request of Landlord and at Tenant's expense,
immediately either cause such lien to be released of record or furnish to
Landlord a bond, in form and amount and issued by a surety, reasonably
satisfactory to Landlord, indemnifying Landlord and the Property against all
liability, costs and expenses, including attorneys' fees, which Landlord may
incur as a result thereof. Provided that such bond has been furnished to
Landlord, Tenant, at its sole cost and expense and after written notice to
Landlord, may contest, by appropriate proceedings conducted in good faith and
with due diligence, any lien, encumbrance or charge against the Property arising
from work done or materials provided to and for Tenant, if, and only if, such
proceedings suspend the collection thereof

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against Landlord, Tenant and the Property and neither the Property nor any part
thereof or interest therein is or will be, in Landlord's sole judgment, in any
danger of being sold, forfeited or lost.

18.  BANKRUPTCY.

     18.1.     Assumption of Lease. In the event Tenant becomes a Debtor under
Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization or
adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the
Code, or a proceeding is filed under Chapter 7 of the Code and is transferred to
Chapters 11 or 13 of the Code, the Trustee or Tenant, as Debtor and as
Debtor-In-Possession, may not elect to assume this Lease unless, at the time of
such assumption, the Trustee or Tenant has cured all defaults under the Lease
and paid all sums due and owing under the Lease or provided Landlord with
"Adequate Assurance" (as defined below) that: (i) within ten (10) days from the
date of such assumption, the Trustee or Tenant will completely pay all sums due
and owing under this Lease and compensate Landlord for any actual pecuniary loss
resulting from any existing default or breach of this Lease, including without
limitation, Landlord's reasonable costs, expenses, accrued interest, and
attorneys' fees incurred as a result of the default or breach; (ii) within
twenty (20) days from the date of such assumption, the Trustee or Tenant will
cure all non-monetary defaults and breaches under this Lease, or, if the nature
of such non-monetary defaults is such that more than twenty (20) days are
reasonably required for such cure, that the Trustee or Tenant will commence to
cure such non-monetary defaults within twenty (20) days and thereafter
diligently prosecute such cure to completion; and (iii) the assumption will be
subject to all of the provisions of this Lease.

               18.1.1.   Definition of Adequate Assurances. For purposes of this
Section 18, Landlord and Tenant acknowledge that in the context of a bankruptcy
proceeding involving Tenant, at a minimum, "Adequate Assurance" shall mean: (i)
the Trustee or Tenant has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that the Trustee or Tenant will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and (ii) the Bankruptcy
Court shall have entered an Order segregating sufficient cash payable to
Landlord and/or the Trustee or Tenant shall have granted a valid and perfected
first lien and security interest and/or mortgage in or on property of Trustee or
Tenant acceptable as to value and kind to Landlord, to secure to Landlord the
obligation of the Trustee or Tenant to cure the monetary and/or non-monetary
defaults and breaches under this Lease within the time periods set forth above;
and (iii) the Trustee or Tenant, at the very minimum, shall deposit a sum equal
to two (2) month's Base Rent to be held by Landlord (without any allowance for
interest thereon) to secure Tenant's future performance under the Lease.

     18.2.     Assignment of Lease. If the Trustee or Tenant has assumed the
Lease pursuant to the provisions of this Section 18 for the purpose of assigning
Tenant's interest hereunder to any other person or entity, such interest may be
assigned only after the Trustee, Tenant or the proposed assignee have complied
with all of the terms, covenants and conditions of this Lease, including,
without limitation, those with respect to Additional Rent. Landlord and Tenant
acknowledge that such terms, covenants and conditions are commercially
reasonable in the context of a bankruptcy proceeding of Tenant. Any person or
entity to which this Lease is assigned pursuant to the provisions of the Code
shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall upon request execute and deliver to Landlord an
instrument confirming such assignment.

     18.3.     Adequate Protection. Upon the filing of a petition by or against
Tenant under the Code, Tenant, as Debtor and as Debtor-In-Possession, and any
Trustee who may be appointed agree to adequately protect Landlord as follows:
(i) to perform each and every obligation of Tenant under this Lease until such
time as this Lease is either rejected or assumed by Order of the Bankruptcy
Court; (ii) to pay all monetary obligations required under this Lease, including
without limitation, payment of Rent and Additional Rent

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payable hereunder which is considered reasonable compensation for the use and
occupancy of the Premises; (iii) provide Landlord a minimum of thirty (30) days
prior written notice, unless a shorter period is agreed to in writing by the
parties, of any proceeding relating to any assumption of this Lease or any
intent to abandon the Premises, which abandonment shall be deemed a rejection of
this Lease; and (iv) to perform to the benefit of Landlord as otherwise required
under the Code. The failure of Tenant to comply with the above shall result in
an automatic rejection of this Lease.

19.  DEFAULT.

     19.1.     Cumulative Remedies. All rights of Landlord in this Lease shall
be cumulative, and none shall exclude any other right or remedy allowed by law
in force when the default occurs or in equity. In addition to the other remedies
provided in this Lease, Landlord shall be entitled to restrain by injunction
(without bond) the violation or attempted violation of any of the covenants,
agreements or conditions of Tenant under this Lease.

     19.2.     Tenant's Default; Right to Cure. The failure of Tenant to perform
any obligation of Tenant as provided in this Lease shall be a default under this
Lease. Tenant shall have a period of five (5) business days from the date of
Tenant's receipt of written notice from Landlord to Tenant within which to cure
any default in the payment of Rent. Tenant shall have a period of twenty (20)
business days from the date of written notice from Landlord to Tenant to cure
any other default under this Lease; provided, however, that with respect to any
such default which cannot be cured within such twenty (20) day period, the
default shall not be deemed to be uncured if Tenant commences to cure within
twenty (20) days and for so long as Tenant is diligently prosecuting the cure
thereof, but in no event longer than ninety (90) days. If the nature of the
default is one that can be cured immediately (e.g. turn off loud music, take
unauthorized sign off door, etc.), Tenant will use its best efforts to cure
immediately. Notwithstanding anything to the contrary in this Section 19.2,
Landlord shall not be required to provide notice to Tenant of a particular
nonpayment of Rent for a particular month more than once.

     19.3.     Landlord's Rights And Remedies. Upon the occurrence of an uncured
default by Tenant, Landlord, in addition to all other rights or remedies it may
have, at its option, may exercise any one or more of the following rights
without further notice or demand of any kind to Tenant or any other person,
except as required by applicable State law:

               19.3.1.   Termination of Lease. The right of Landlord to
terminate this Lease and Tenant's right to possess the Premises and to reenter
the Premises, take possession thereof and remove all persons from the Premises,
following which Tenant shall have no further claim thereon or hereunder;
provided, however, that Tenant shall remain obligated as provided in Section
19.4 below.

               19.3.2.   Re-entry of the Premises. The right of Landlord,
without terminating this Lease and Tenant's right to possess the Premises, to
reenter the Premises and occupy the whole or any part of the Premises for and on
account of Tenant and to collect any unpaid Rents which have become payable, or
which may thereafter become payable; provided, however, that Tenant shall remain
obligated as provided in Section 19.4 below.

               19.3.3.   Termination After Reentry. The right of Landlord, even
though it may have reentered the Premises in accordance with Section 19.3.2, to
elect thereafter to terminate this Lease and Tenant's right to possess the
Premises; provided, however, that Tenant shall remain obligated as provided in
Section 19.4 below.

Should Landlord reenter the Premises under Section 19.3.2, Landlord shall not be
deemed to have terminated this Lease or to have accepted a surrender thereof by
any such reentry, unless Landlord shall have notified Tenant in writing that it
has so elected to terminate this Lease and Tenant's right of possession. Tenant
further covenants that Landlord's service of

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any notice pursuant to the unlawful detainer statutes of the State of Washington
and Tenant's surrender of possession pursuant to such notice shall not (unless
Landlord elects in writing to the contrary at the time of, or at any time
subsequent to, the serving of such written notice and such election is evidenced
by a notice to Tenant) be deemed to be a termination of this Lease.

     19.4.     Landlord's Damages. If Landlord terminates this Lease and/or
Tenant's right to possession of the Premises pursuant to the terms of this
Section 19, Landlord may recover from Tenant as damages, all of the following:

               19.4.1.   Delinquent Rent The worth at the time of award of any
unpaid Rent earned at the time of such termination;

               19.4.2.   Rent After Termination Until Judgment The worth at the
time of award of the amount by which the unpaid Rent that would have been earned
after termination until the time of award exceeds such rent loss Tenant proves
could have been reasonably avoided;

               19.4.3.   Rent After Judgment The worth at the time of award of
the amount by which the unpaid Rent for the balance of the Lease Term after the
time of award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided;

               19.4.4.   Other Compensation. Any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result there from, including, without limitation, any
cost or expense incurred by Landlord in (i) retaking possession of the Premises,
including reasonable attorney fees therefore, (ii) maintaining or preserving the
Premises after such default, (iii) preparing the Premises for reletting to a new
tenant, including repairs necessary to the Premises for such reletting, (iv)
leasing commissions, limited to those years remaining in the initial term, and
(v) any other costs necessary or appropriate to relet the Premises; and

               19.4.5.   Additional or Alternative Damages. At Landlord's
election, such other amounts in addition to or in lieu of the foregoing in this
Section 19.4 as may be permitted from time to time by the laws of the State of
Washington; and

               19.4.6.   Calculation of Damages. As used in Sections 19.4.1 and
19.4.2, the "worth at the time of award" is to be computed by allowing interest
at the rate specified in Section 4.2. As used in Section 19.4.3, the "worth at
the time of award" is computed by discounting such amount at a discount rate
equal to six percent (6%) per annum. All Rent, other than Base Rent, shall, for
the purposes of calculating any amount due under the provisions of Section
19.4.3 be computed on the basis of the average monthly amount thereof accruing
during the immediately preceding sixty (60) month period, except that if it
becomes necessary to compute such rent before such a sixty (60) month period has
occurred, then such rent shall be computed on the basis of the average monthly
amount hereof accruing during such shorter period.

     19.5.     Tenant's Property. Without limiting any of Landlord's rights
under this Lease, in the event of a termination this Lease pursuant to Section
19, all of Tenant's property, trade fixtures, equipment not permanently attached
to the Premises, attached equipment specified on Exhibit C-l and other personal
property shall be removed by Tenant immediately upon demand by Landlord. If not
so removed by Tenant, Landlord may remove such property from the Premises and
place it in storage at a public warehouse at the expense and risk of Tenant,
after which it shall be subject to the sale provisions of Section 21. Trade
fixtures, furniture, unattached equipment and attached equipment specified on
Exhibit C-l and other personal property installed in the Premises by Tenant
shall at all times be and remain Tenant's property ('Tenant's Property"). Upon
request by Tenant's lenders and equipment lessors from time to time, Landlord
agrees to waive, in favor of current and future lenders and equipment lessors of
Tenant, any lien rights Landlord may

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have with respect to Tenant's Property pursuant to a lien release, the form of
which shall be reasonably acceptable to Landlord.

     19.6.     No Waiver. The waiver by either party of any breach of any term,
covenant or condition contained in this Lease shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach thereof, or of any
other term, covenant or condition contained in this Lease. Landlord's subsequent
acceptance of partial rent or performance by Tenant shall not be deemed to be an
accord and satisfaction or a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease or of any right of Landlord to a
forfeiture of the Lease by reason of such breach, regardless of Landlord's
knowledge of such preceding breach at the time of Landlord's acceptance. No
term, covenant or condition of this Lease shall be deemed to have been waived by
either party unless such waiver is in writing and signed by the waiving party.

     19.7.     Waiver of Notice. Notwithstanding anything to the contrary in
this Section 19, Tenant waives (to the fullest extent permitted under law) any
written notice, other than such notice as this Section 19 or any other provision
of this Lease specifically requires, which any statute or law now or hereafter
in force prescribes be given Tenant. Landlord agrees to provide Tenant with
written notice of any event or condition that could materially affect Tenant's
use of the Premises or enjoyment of the Lease.

     19.8.     Waiver of Redemption Rights. Tenant, for itself, and on behalf of
any and all persons claiming through or under it, including creditors of all
kinds, does hereby waive and surrender all right and privilege which they or any
of them might have under or by reason of any present or future law, to redeem
the Premises or to have a continuance of this Lease for the term hereof, as it
may have been extended, after having been dispossessed or ejected there from by
process of law or under the terms of this Lease or after the termination of this
Lease as herein provided.

     19.9.     Reasonable Efforts to Mitigate. Landlord shall use its
commercially reasonable efforts to mitigate any damages resulting from a default
by Tenant.

     19.10.    Default by Landlord. Landlord's failure to perform or observe any
of its obligations under this Lease or to correct a breach of any warranty or
representation made in this Lease within thirty (30) days after receipt of
written notice from Tenant setting forth in reasonable detail the nature and
extent of the failure referencing pertinent Lease provisions or if more than
thirty (30) days is required to cure the breach, Landlord's failure to begin
curing within the thirty (30) day period and diligently prosecute the cure to
completion within no more than ninety (90) days, shall constitute a default. If
Landlord commits a default that materially affects Tenant's use of the Premises,
and Tenant has provided simultaneous written notice thereof to Landlord's
mortgagee (if any and if Tenant has notice thereof) and Landlord (and/or
Landlord's mortgagee if any) has failed to commence to cure such default within
thirty (30) days (or such shorter time as is commercially reasonable in the case
of an emergency threatening imminent harm to persons or property), Tenant may,
without waiving any claim for damages for breach of agreement, thereafter cure
the default for the account of the Landlord, which cure shall be preceded by an
additional written notice given at least three (3) days prior to such cure to
Landlord and Landlord's mortgagee that Tenant plans to undertake the cure, and
the reasonable cost of such cure shall be deemed paid or incurred for the
account of Landlord, and Landlord shall reimburse Tenant for Tenant's
out-of-pocket expenditures paid to third parties to effectuate such cure, such
reimbursement to be within thirty (30) days after completion of the cure and
invoice to Landlord showing the costs of cure. Tenant's cure rights shall be hi
lieu of any right to terminate this Lease. If Landlord disputes either the
necessity of the cure or the cost thereof, the matter shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Rules for the Real Estate Industry before a single neutral arbitrator
of the American Arbitration Association sitting in Seattle, Washington. The
arbitrator shall be a person having at least ten (10) years' experience and
knowledge about commercial leasing and property management. The arbitration
shall be held within sixty (60) days of Landlord notifying Tenant it disputes
Tenant's cure. The costs of the arbitrator

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shall be shared equally by the parties. The prevailing party shall be entitled
to an award of reasonable attorneys fees. The arbitrator's award shall be final
and binding on the parties.

     20.       Subordination and Attornment. This Lease shall be subordinate to
any mortgage or deed of trust now existing or hereafter placed upon the Land,
the Building or the Premises, created by or at the instance of Landlord, and to
any and all advances to be made hereunder and to interest thereon and all
modifications, renewals and replacements or extensions thereof ("Landlord's
Mortgage"); provided, however, that the holder of any Landlord's Mortgage or any
person or persons purchasing or otherwise acquiring the Land, Building or
Premises at any sale or other proceeding under any Landlord's Mortgage may elect
to continue this Lease in full force and effect and, in such event, Tenant shall
attorn to such person or persons. Notwithstanding the foregoing, if a lender
requires that the Lease be subordinate to any mortgage recorded after the date
of the Lease affecting the Property, the Lease shall be subordinate to such
mortgage if Landlord first obtains from such lender a written statement
providing that so long as Tenant performs its obligations under the Lease, no
foreclosure of, deed given in lieu of foreclosure of, or sale under the
mortgage, and no steps or procedures, taken under the mortgage, shall affect
Tenant's rights under this Lease (a "Nondisturbance Agreement"); provided,
however, then the holder of Landlord's Mortgage, or any person or persons
purchasing or otherwise acquiring the Land, Building or Premises at any sale or
other proceeding under any Landlord's Mortgage, shall not be subject to any
option to purchase, or right of first refusal to purchase, granted to Tenant in
connection with this Lease. Prior to the Commencement Date, Landlord shall
obtain a Nondisturbance Agreement executed by all existing holders of any
mortgage, deed of trust or ground lease affecting the Land, the Building or the
Premises.

Tenant shall execute, acknowledge and deliver documents, which the Holder of any
Landlord's Mortgage may require to effectuate the provisions of this Section 20
within ten (10) business days of the date of Landlord's request therefore. In
the event of any transfer of Landlord's interest in the Premises or in the
Property, other than a transfer for security purposes only, the transferor shall
be automatically relieved of any and all obligations and liabilities on the part
of Landlord accruing from and after the date of such transfer and such
transferee shall have no obligation or liability with respect to any matter
occurring or arising prior to the date of such transfer. Tenant agrees to attorn
to such transferee, provided transferee assumes all of Landlord's
responsibilities.

     21.       Removal of Property. Upon the expiration of this Lease, Tenant
shall remove all of Tenant's personal property, furniture and equipment not
permanently affixed to the Premises or as specified on Exhibit C-l, and shall
pay Landlord any damages for injury to the Premises or Property resulting from
such removal. If Tenant fails to remove any such property from the Premises at
the expiration of this Lease, Landlord may remove and store said property
without liability for loss thereof or damage thereto. Such storage shall be for
the account and at the expense of Tenant. If Tenant fails to pay the cost of
storing any such property after it has been stored for a period of thirty (30)
days or more, or if Tenant has not removed the property from the Premises after
a thirty (30) day period, Landlord may, at its option, sell, or permit to be
sold, any or all such property at public or private sale, in such manner and at
such times and places as Landlord in its sole discretion may deem proper (so
long as the same is in compliance with laws), without notice to Tenant, unless
notice is required under applicable statutes, and shall apply the proceeds of
such sale first, to the cost and expense of such sale, including reasonable
attorneys' fees actually incurred; second, to the payment of the costs or
charges for storing any such property; third, to the cost of removal of such
property and the restoration of the Premises following such removal; fourth, to
the payment of any other sums of money which may then be or thereafter become
due Landlord from Tenant under any of the terms of this Lease; and, fifth, the
balance, if any, shall be paid to Tenant.

     22.       Condemnation.

               22.1.     Entire Taking. If all of the Premises, or such portion
of the Building as may be required for the reasonable use of the Premises, in
Landlord's reasonable

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determination, are taken by eminent domain, this Lease shall automatically
terminate as of the date title vests in the condemning authority and all Rent,
Additional Rent and other payments shall be paid to that date.

     22.2.     Constructive Taking of Entire Premises. In the event of a taking
by eminent domain of a material part of but less than all of the Building, if
Landlord determines that the remaining portions of the Building cannot be
economically and effectively used by it (whether on account of physical,
economic, aesthetic or other reasons) or if Landlord determines the Building
should be restored in such a way as to materially alter the Premises, then
Landlord shall forward a written notice to Tenant of such determination not more
than sixty (60) days after the date of taking. The Term of this Lease shall
expire upon the date specified by Landlord in such notice but not earlier than
sixty (60) days after the date of such notice.

     22.3.     Partial Taking. Subject to the provisions of the preceding
Section 22.2, in case of taking by eminent domain of a part of the Premises, or
a portion of the Building not required for the reasonable use of the Premises,
then this Lease shall continue in full force and effect and the Rent shall be
equitably reduced based on the proportion by which the floor area of the
Premises is reduced, such Rent reduction to be effective as of the date title to
such portion vests in the condemning authority. If more than twenty-five percent
(25%) of the Premises is taken and Landlord cannot replace such space with space
in the Building, which is mutually acceptable to Landlord and Tenant, then with
sixty (60) days written notice by either party, Landlord or Tenant shall have
the right to terminate this Lease.

     22.4.     Awards and Damages. Landlord reserves all rights to damages to
the Premises for any partial, constructive, or entire taking by eminent domain,
and Tenant hereby assigns to Landlord any right Tenant may have to such damages
or award, and Tenant shall make no claim against Landlord or the condemning
authority for damages for termination of the leasehold interest or interference
with Tenant's business. Tenant shall have the right, however, to claim and
recover from the condemning authority compensation for any loss to which Tenant
may be put for Tenant's moving expenses, business interruption or taking of
Tenant's personal property, furniture and equipment identified on Exhibit C-l
(not including Tenant's leasehold interest) and the unamortized cost of
improvements made to the Premises at Tenant's cost, provided that such damages
may be claimed only if they are awarded separately in the eminent domain
proceedings and not out of or as part of and/or will not reduce any damages
recoverable by Landlord.

     23.       Notices. All notices under this Lease shall be in writing and
delivered in person or sent by registered or certified mail, postage prepaid, or
by private overnight courier to Landlord and to Tenant at their respective
Notice Addresses set forth in Section 1.16 (provided that after the Commencement
Date any such notice shall be mailed, delivered by hand to Tenant at the
Premises) or such other addresses as may from time to time be designated by any
such party in writing. Notices mailed as provided in this Section shall be
deemed given and received on the date that is three (3) business days following
the date of post mark, in the case of mailing, or one (1) day after deposit with
a private overnight courier.

     24.       Costs and Attorneys' Fees. If Tenant or Landlord brings any
action for any relief against the other, declaratory or otherwise, arising out
of this Lease, each party shall, and hereby does to the extent permitted by law,
waive trial by jury and the losing party shall pay the substantially prevailing
party's attorneys' fees in connection with such suit, at trial and on appeal,
and such attorneys' fees shall be deemed to have accrued on the commencement of
such action. If Landlord consults with an attorney as a result of a default by
Tenant hereunder, Tenant agrees to pay any such attorneys' fees incurred by
Landlord, and such attorneys' fees shall constitute additional sums due by
Tenant hereunder. In addition, in the event of a default by Tenant under this
Lease, and any action is instituted by Landlord as a result of Tenant's default,
then Tenant shall pay to Landlord, in addition to other costs, expenses, and
attorneys' fees incurred by Landlord, and hourly fee of Fifty

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Dollars ($50.00) per hour for time spent by each employee or agent of Landlord
in connection with such default and at a minimum, One Hundred Dollars ($100.00).

     25.       Landlord's Liability. Notwithstanding anything in this Lease to
the contrary, covenants, undertakings and agreements herein made on the part of
Landlord in this Lease are made and intended not as personal covenants,
undertakings and agreements for the purpose of binding Landlord personally or
the assets of Landlord (except Landlord's interest in the Premises and
Building), but are made and intended for the purpose of binding only the
Landlord's interest in the Premises and Building, as the same may from time to
time be encumbered and the proceeds of the sale thereof and rental proceeds
thereof. No personal liability or personal responsibility is assumed by
Landlord, nor shall at any time be asserted or enforceable against Landlord or
its heirs, legal representatives, successors or assigns on account of the Lease
or on account of any covenant, undertaking or agreement of Landlord in this
Lease.

     26.       Landlord's Consent. Except as may be provided otherwise in this
Lease, whenever Landlord's consent or approval is required under this Lease,
such consent or approval shall not be unreasonably withheld, conditioned or
delayed, provided, however, Landlord's withholding of consent due to any
mortgagee's refusal to grant its consent where its consent would be required
shall not be deemed unreasonable.

     27.       Estoppel Certificates. Tenant shall, from time to time upon the
written request of Landlord, execute, acknowledge and deliver to Landlord or its
designee a written statement stating: the Effective Date, Commencement Date and
Expiration Date, the date the term commenced and the date Tenant accepted the
Premises; the amount of Base Rent and the date to which such Base Rent and
Additional Rent has been paid; and certifying such additional information as may
be reasonably requested by Landlord. It is intended that any such statement
delivered pursuant to this Section may be relied upon by Landlord and/or a
prospective purchaser or mortgagee who may acquire an interest in, or a lien
upon, Landlord's interest in the Building. If Tenant shall fail to respond
within ten (10) business days of receipt by Tenant of a written request by
Landlord as herein provided, Tenant shall be deemed to have given such
certificate as above provided without modification and shall be deemed to have
admitted the accuracy of any information supplied by Landlord to a prospective
purchaser or mortgagee and to have certified that this Lease is in full force
and effect, that this Lease represents the entire agreement between the parties
as to this leasing, that there are no existing claims, defenses or offsets which
Tenant has against enforcement of the Lease by Landlord, that there are no
uncured defaults in Landlord's performance, that the security deposit is as
stated in the Lease, and that not more than one month's Base Rent or Additional
Rent has been paid in advance.

     28.       Right to Perform. If Tenant fails to pay any sum of money
required to be paid by it under this Lease or fails to perform any other act on
its part to be performed under this Lease, and such failure continues for ten
(10) days after notice thereof by Landlord, Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligations
of Tenant, make such payment or perform any such other act on Tenant's part to
be made or performed as provided in this Lease. Landlord shall have (in addition
to any other right or remedy of Landlord) the same rights and remedies in the
event of the nonpayment of sums due under this Section 28 as in the case of
default by Tenant in the payment of Rent.

     29.       Parking. In the event that Landlord elects to regulate parking on
the Property pursuant to a parking pass system, then Tenant shall be entitled to
purchase eighty-four (84) parking passes for the Building's parking garage;
however, Landlord reserves the right to provide some of Tenant's parking stalls
in the adjacent building located at 101 Elliott Avenue West. Each parking pass
may be used by one person only, and may not be shared; no sharing or hoteling of
stalls shall be permitted. Use of the parking stalls shall be subject to such
prevailing market rate charges, and such rules and regulations, as Landlord
and/or Landlord's parking operator may adopt from time to time. Landlord retains
the right to adjust the charge for parking to prevailing market rate charges and
reasonably amend such

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<PAGE>

rules and regulations and to reasonably relocate or reconfigure the parking
area, with reasonable notice to Tenant. However, the cost for such parking shall
be $160.00 per month per stall through December 2003. Landlord shall at all
times continue to provide the designated number of passes to Tenant and Tenant
shall at all times be entitled to use eighty-four (84) parking spaces in the
Building's parking garage. Tenant shall pay, upon demand by Landlord, Landlord's
costs incurred to stencil any changes to reserved parking stalls provided to
Tenant under this Lease.

     30.       Authority. If Tenant is a corporation, Tenant represents and
warrants that each individual executing this Lease on behalf of Tenant is duly
authorized to execute and deliver this Lease on behalf of Tenant, in accordance
with a duly adopted resolution of the Board of Directors of Tenant and in
accordance with the bylaws of Tenant, and that this Lease is binding upon Tenant
in accordance with its terms.

     31.       General.

               31.1.     Headings. Titles to Sections of this Lease are not a
part of this Lease and shall have no effect upon the construction or
interpretation of this Lease.

               31.2.     Heirs and Assigns. All of the covenants, agreements,
terms and conditions contained in this Lease shall inure to and be binding upon
the Landlord and Tenant and their respective heirs, executors, administrators,
successors and assigns.

               31.3.     No Brokers. Except as provided in Section 1, Landlord
and Tenant represent and warrant to one another that they have not engaged any
broker, finder or other person who would be entitled to any commission or fees
in respect of the negotiation, execution or delivery of this Lease and Landlord
and Tenant shall indemnify and hold one another harmless from and against any
loss, cost, liability or expense incurred by the other party as a result of any
claim asserted by any such broker, finder or other person on the basis of any
arrangements or agreements made or alleged to have been made by or on behalf of
the indemnifying party. In no event will a brokerage fee be paid on any renewal
or Option to renew. Tenant agrees that any broker it may elect to assist in any
renewal discussions or options will be compensated directly by Tenant.

               31.4.     Tenant's Financial Statement. Within ten (10) business
days of receipt by Tenant of Landlord's written request from time to time but in
no event more than once per calendar year, Tenant shall deliver to Landlord a
copy of its most recent annual and quarterly audited financial statements
prepared in accordance with generally accepted accounting principles, including
a balance sheet, income statement, statement of changes in stockholder's or
owner's equity, statement of cash flow, accompanying footnotes, and reports of
independent accountants. Landlord shall hold Tenant's financial information in
confidence and agrees to execute a reasonable confidentiality agreement if so
requested by Tenant. Such financial information may be provided to a prospective
purchaser or mortgagee, subject to the same confidentiality requirements.

               31.5.     Entire Agreement. This Lease contains all covenants and
agreements between Landlord and Tenant relating in any manner to the leasing,
use and occupancy of the Premises, to Tenant's use of the Building and other
matters set forth in this Lease, to the extent all of the foregoing relate to
the time period following the Commencement Date. No prior agreements or
understanding pertaining to the same shall be valid or of any force or effect
and the covenants and agreements of this Lease shall not be altered, modified or
added to except in writing signed by Landlord and Tenant.

               31.6.     Severability. Any provision of this Lease which shall
prove to be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof and the remaining provisions hereof shall
nevertheless remain in full force and effect.

               31.7.     Force Majeure. (A) Landlord. Landlord shall have no
liability whatsoever to Tenant on account of Landlord's inability to timely
complete Landlord's

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Work, or the restoration of the Building and the Premises following damage or
destruction, as a result of "force majeure," which shall include (a) strike,
lockout, other labor trouble, dispute or disturbance; (b) governmental
regulation, moratorium, action, preemption or priorities or other controls; (c)
shortages of fuel, supplies or labor; (d) any failure or defect in the supply,
quantity or character of electricity or water furnished to the Premises by
reason of any requirement, act or omission of the public utility or others
furnishing the Building with electricity or water; and (e) for any other reason,
whether similar or dissimilar to the above, or for Act of God, beyond Landlord's
reasonable control. If this Lease specifies a time period for performance of an
obligation of Landlord to complete Landlord's Work, or the restoration of the
Building and the Premises following damage or destruction, that time period
shall be extended by the period of any delay in Landlord's performance caused by
any of the events of force majeure described herein.

(B)  Tenant. Tenant shall have no liability whatsoever to Landlord on account of
Tenant's inability to timely complete Tenant's Work, or the restoration of the
Tenant's Work following damage or destruction, as a result of "force majeure,"
which shall include (a) strike, lockout, other labor trouble, dispute or
disturbance; (b) governmental regulation, moratorium, action, preemption or
priorities or other controls; (c) shortages of fuel, supplies or labor; (d) any
failure or defect in the supply, quantity or character of electricity or water
furnished to the Premises by reason of any requirement, act or omission of the
public utility or others furnishing the Building with electricity or water; and
(e) for any other reason, whether similar or dissimilar to the above, or for Act
of God, beyond Tenant's reasonable control. If this Lease specifies a time
period for performance of an obligation of Tenant to complete Tenant's Work, or
the restoration of Tenant's Work following damage or destruction, that time
period shall be extended by the period of any delay in Tenant's performance
caused by any of the events of force majeure described herein. Nothing in this
section shall be construed as excusing or delaying the obligation of Tenant to
pay in a timely manner when due any Rent or other amounts due under this Lease.

               31.8.     Right to Change Public Spaces. Landlord shall have the
right at any time without thereby creating an actual or constructive eviction or
incurring any liability to Tenant therefore, to change the arrangement or
location of such of the following as are not contained within the Premises or
any part thereof: entrances, passageways, doors and doorways, corridors, stairs,
toilets and other public portions of the Property. In no event, however, shall
Landlord diminish any service provided by Landlord under this Lease, make any
change which reduces the area of the Premises, make any change which, on other
than a temporary basis, either changes the character of the Building from that
of an office building or materially interferes with Tenant's access to and use
of the Building.

               31.9.     Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the State of Washington.

               31.10.    Building Directory. Landlord shall maintain in the
lobby of the Building a directory of tenants and such directory shall include
the name of Tenant and any other names reasonably requested by Tenant in
proportion to the number of listings given to comparable tenants of the Building
at Landlord's sole cost Landlord shall also install, at Landlord's sole cost,
suite signage consistent with the Building standard or subject to Landlord's
architects' reasonable approval.

               31.11.    Building Name. The Building will be known as Elliott
Park North or by such name as Landlord may designate from time to time.

               31.12.    Quiet Enjoyment Landlord agrees that Tenant, upon
paying the Rent and performing all other terms, covenants and conditions of this
Lease to be performed by Tenant, may quietly have, hold and enjoy the Premises
from and after the Commencement Date until the Expiration Date, subject,
however, to the provisions of Section 11 (Damage Or Destruction), 22
(Condemnation.

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               31.13.    Survival. The representations, warranties and
indemnification obligations of the parties to this Lease shall survive the
termination or expiration of this Lease.

               31.14.    Time. Time is of the essence of each and every
provision of this Lease.

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

               31.16.    Execution. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on all
the parties hereto even though all the parties are not signatories to the
original or the same counterpart. Delivery of a facsimile or other copy of this
Agreement has the same effect as delivery of an original.

IN WITNESS WHEREOF this Lease has been executed the day and year first above set
forth.

                                               LANDLORD:

                                               ELLIOTT PARK LLC,

                                               by Sabey Corporation, Manager

Date:  08-20-02                                By: /s/ David Sabey
                                                  ------------------------------
                                               Its: President
                                                   -----------------------------

                                               TENANT:

                                               CELL THERAPEUTICS, INC.

Date:  08-16-02                                 By: /s/ James Blanc
                                                   -----------------------------
                                                Its: President - CEO
                                                    ----------------------------

                                                                    LEGAL REVIEW
                                                                   /s/ ILLEGIBLE
                                                                        08/15/02

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<PAGE>

STATE OF WASHINGTON          )
                             )ss.
COUNTY OF KING               )

On this 20th day of August, 2002 before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn as such,
personally appeared David A. Sabey to me known to be the PRESIDENT of SABEY
CORPORATION, Manager of ELLIOTT PARK LLC, the corporation that executed the
within and foregoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said corporation for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument.

WITNESS my hand and official seal the day and year in this certificate first
above written.

[SEAL OF MARY A. HALL]       /s/ MARY A HALL
                             ---------------------------------------------------
                             Printed Name: MARY A HALL
                             NOTARY PUBLIC in and for the State of Washington,
                             residing at Seattle
                             My commission expires: 12-19-05

STATE OF WASHINGTON          )
                             )ss.
COUNTY OF KING               )

On this 16th day of August, 2002, before me, the undersigned, a Notary Public in
and for the State of Washington, duly commissioned and sworn as such, personally
appeared JAMES BIANCO, to me known to be the President-CEO of CELL THERAPEUTICS,
INC., the corporation that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of
said corporation for the uses and purposes therein mentioned, and on oath stated
that he/she was authorized to execute said instrument.

WITNESS my hand and official seal the day and year in this certificate first
above written.

                             /s/ CAROL J. MERRELL
                             ---------------------------------------------------
                             Printed Name: CAROL J. MERRELL
                             NOTARY PUBLIC in and for the State of Washington,
                             residing at ILLEGIBLE
                             My commission expires: 03-29-04

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                                    EXHIBIT A

                               TO LEASE AGREEMENT

                                LEGAL DESCRIPTION

     201 Elliott Avenue West, Seattle, Washington

LOTS 1 THROUGH 7, BLOCK 163, AS SHOWN ON SUPPLEMENTAL SHEET NO.25 OF THE PLAT
OF SEATTLE TIDELANDS, AS REVISED AND CORRECTED BY AUTHORITY OF AN ACT OF THE
LEGISLATURE OF THE STATE OF WASHINGTON APPROVED MARCH 2, 1897, WHICH SAID
SUPPLEMENTAL SHEET OF SAID REVISED AND CORRECTED PLAT WAS DULY RECORDED IN THE
OFFICE OF THE COMMISSIONER OF PUBLIC LANDS OF THE STATE OF WASHINGTON AND IN THE
OFFICE OF THE AUDITOR RECORDS OF KIND COUNTY, WASHINGTON.

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<PAGE>

                                    EXHIBIT B

                               TO LEASE AGREEMENT

                             FLOOR PLANS OF PREMISES

                             [GRAPHIC APPEARS HERE]

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                                    EXHIBIT C

                               TO LEASE AGREEMENT

                        LANDLORD'S WORK AND TENANT'S WORK

I.   IMPROVEMENTS PROVIDED BY LANDLORD

     Landlord hereby leases to Tenant at no additional cost those items
     identified as "Trade Improvements" and the "Mechanical System" which Tenant
     inherited from the prior tenant, The Biomembrane Institute, in its As-Is,
     Where-Is condition without representation or warranty of any kind
     whatsoever. The "Trade Improvements" and the "Mechanical System" and the
     terms under which they are leased to Tenant are more particularly described
     in that portion of the Third Amendment to the Prior Lease, dated September
     10, 1996, in paragraph 47, subsections c and d, which is attached to this
     Exhibit C as Schedule 1. Schedule 1 also includes three exhibits, which
     illustrate the location of the "Expansion Spaces" which house the "Trade
     Improvements" and the quoted "OCL" space, which is served by the
     "Mechanical System". Landlord and Tenant hereby acknowledge that the "Trade
     Improvements" and "Mechanical System" shall remain the property of Landlord
     at the expiration or earlier termination of this Lease.

     Landlord shall deliver, and Tenant. shall accept the Premises in its
     "AS-IS" condition and configuration as provided in the Lease. Without
     limiting the foregoing, Landlord shall not be required to modify or improve
     the existing heating, exhaust, ventilation or air-conditioning equipment,
     to reinforce or level the flooring of the Premises or the existing
     electrical system, to accommodate Tenant.

II.  CONSTRUCTION OF TENANT IMPROVEMENTS

     A.   Improvements Constructed by Tenant If any work is to be performed in
     connection with Tenant Improvements on the Premises by Tenant or Tenant's
     contractor of a type requiring the participation of a general contractor:

               (1)  Such work shall proceed upon Landlord's written approval of
     (i) Tenant's contractor, (ii) public liability and property damage
     insurance satisfactory to Landlord carried by Tenant's contractor, and
     (iii) detailed plans and specifications for such work where detailed plans
     and specifications are appropriate. Landlord's approval of the foregoing
     shall not be unreasonably withheld or delayed and (iv) Landlord shall have
     the right to require Tenant's contractor to deposit a reasonable amount to
     secure the close out and clean up of Tenant's Work.

               (2)  All work shall be done in conformity with a valid building
     permit when required, a copy of which shall be furnished to Landlord before
     such work is commenced, and in any case, all such work shall be performed
     in accordance with all applicable governmental regulations. Notwithstanding
     any failure by Landlord to object to any such work, Landlord shall have no
     responsibility for Tenant's failure to meet all applicable regulations
     (except, where Sabey Construction is the contractor, to the extent of Sabey
     Construction's negligence or willful misconduct).

               (3)  All work by Tenant or Tenant's contractor shall be scheduled
     through Landlord.

               (4)  (i) Tenant or Tenant's contractor shall arrange for
     necessary utility, hoisting and elevator service with Landlord's
     contractor; (ii) Tenant shall reimburse Landlord upon demand for any sums
     expended by Landlord for examination and approval of plans and
     specifications for any and all Alterations by outside consultants (e.g.
     structural reviews) subject to the limits set forth in Section 9 of the
     Lease; and (ii) Tenant shall also reimburse Landlord for its actual costs
     to supervise the Alterations not to exceed five percent (5%) of the hard
     costs incurred by Tenant's contractor except that Tenant shall not

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<PAGE>

     be responsible for any such supervision costs if Sabey Construction is the
     contractor being used.

               (5)  Tenant shall promptly reimburse Landlord for costs incurred
     by Landlord due to faulty work done by Tenant or its contractors, or by
     reason of any delays caused by such work, or by reason of inadequate
     clean-up.

               (6)  Landlord shall have the right to post a notice or notices in
     conspicuous places in or about the Premises announcing its
     non-responsibility for the work being performed therein.

               (7)  Landlord shall retain the right to all equipment and
     materials to be salvaged or demolished from the Premises (other than
     Tenant's property identified in Exhibit C-l or equipment and materials that
     Tenant elects to reuse in the Premises).

     If Sabey Construction Inc. constructs the Tenant Improvements on behalf of
     Tenant, Landlord acknowledges satisfaction of Paragraphs (l)(i), (l)(ii),
     3,4(i), 4(iii), 5, and 6 of this Section II.A.

     B.   Tenant's Telephone. Tenant is responsible for Tenant's telephone
     service. Tenant shall select Tenant's telephone system.

III. RETENTION OF SABEY CONSTRUCTION INC. AS TENANT'S CONTRACTOR.

     Tenant shall retain Sabey Construction Inc. as Tenant's general contractor
     for any Tenant Improvements Tenant elects to construct for which Tenant
     chooses to employ the services of a general contractor on terms and
     conditions mutually acceptable to Tenant and Sabey Construction. The form
     of contract to be used in any such engagement shall be substantially in the
     same form as Exhibit C-2 attached hereto. The price for such the
     construction of such improvements would be the actual cost plus Sabey
     Construction Inc.'s fee as general contractor of four percent (4%) on the
     actual cost, including general conditions. Applicable state and local taxes
     will also be included.

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<PAGE>

                             SCHEDULE 1 TO EXHIBIT C

                        DESCRIPTION OF TRADE IMPROVEMENTS

                              AND MECHANICAL SYSTEM

4.   Additional Expansion Space. Section 47 of the Lease Agreement shall be
     amended in its entirety to read:

47.  ADDITIONAL EXPANSION SPACE.

     a.   Tenant Occupancy. Landlord shall deliver the Additional Expansion
          Space to Tenant on September 1, 1996; provided, however, Tenant may
          enter the Expansion Space prior to the delivery date for the purposes
          of architectural, design or engineering review. Landlord's delivery of
          the Additional Expansion Space shall be in it's "AS IS" condition as
          of the date of delivery and Landlord shall not be required to make
          alterations, additions, or improvements to the Additional Expansion
          Space; except that Landlord shall seal the stairwell presently located
          within the Additional Expansion Space, eliminating access between the
          second floor and the Additional Expansion Space.

     b.   Base Service Year. For the purposes of determining Additional Rent for
          the Additional Expansion Space, the Additional Expansion Space shall
          have a Base Service Year of 1992.

     c.   Trade Improvements. Landlord hereby agrees to lease to Tenant and
          Tenant hereby agrees to lease from Landlord, the Trade Improvements
          serving the Expansion Space all on the following terms and conditions:

          i.   Term. Tenant shall lease from Landlord the Trade Improvements
               commencing on September 1, 1996, and terminating on the
               Expiration Date, unless earlier terminated in accordance with the
               Lease. It is the intent of the parties that the term of the lease
               for the Trade Improvements be co-terminous with the lease of the
               Premises.

          ii.  Condition and Uses. Landlord shall deliver the Trade Improvements
               in their "AS IS, WHERE IS" condition, without representation or
               warranty of any kind whatsoever, whether express or implied,
               including without limitation, warranty for habitability,
               suitability or for particular use and Landlord shall not be
               required to make any allegations, repairs or improvements to the
               Trade Improvements. Notwithstanding the foregoing, Landlord
               represents to Tenant that to the best of their knowledge, the
               Trade Improvements have been adequately maintained and repaired
               by the prior tenant and owner, Oncomembrane, Inc. and is in
               reasonably good working order, normal wear and tear excepted.
               Tenant hereby agrees that with respect to its use of the Personal
               Property, it will comply with all of the terms of the Lease,
               including without limitation, Section 6 of the Lease.

          iii. Repair, Maintenance and Alterations. Tenant hereby agrees to
               maintain and repair, at Tenant's sole cost and expense, the Trade
               Improvements at all times during the term hereof. Tenant shall
               maintain the Trade Improvements at all times in good repair.
               Tenant shall make no alterations or modifications to the Trade
               Improvements without the prior written consent of the Landlord.
               In addition to the foregoing, Tenant agrees that all other terms
               and conditions of the Lease shall apply to the Trade Improvements
               and its repair or maintenance, unless directly contrary to the
               foregoing terms in this paragraph.

<PAGE>

          iv.  Taxes and Insurance. Tenant shall pay, before delinquency any and
               all Real Property Taxes (as defined in the Lease) on the Trade
               Improvements and provide Landlord with evidence of such payment.
               Tenant shall maintain Liability and property damage insurance on
               the Trade Improvements at all times during the term hereof in
               accordance with the requirements of Section 16 of the Lease.

          v.   Removal of Property and Surrender. Tenant shall not remove the
               Trade Improvements from the Premises without the prior written
               consent of the Landlord. Upon the termination of the Lease,
               Tenant shall surrender the Trade Improvements to the Landlord in
               good working condition and repair, normal wear and tear excepted.

     d.   Mechanical System. The Additional Expansion Space is serviced by
          mechanical and physical systems (collectively, "Mechanical System"),
          specifically air handling unit(s), boilers, chillers, natural gas,
          electricity and vacuum that also will continue to provide service to
          the first and second floors of the Building. Notwithstanding the terms
          of this paragraph, Tenant shall continue to be responsible for
          maintaining mechanical equipment (e.g., air handling unit and exhaust
          fans) located in the small mechanical room on the roof of the second
          floor of the Building which services the Organic Chemistry Lab of the
          Additional Expansion Space (labeled "OCL" on Exhibit A-4).

          Tenant agrees to an equitable allocation of the costs and expenses of
          maintaining, repairing and replacing the Mechanical System between
          Tenant and first and second floor tenants, on a pro-rata, square
          footage basis, so long as the Mechanical System serves the first and
          second floors and the Additional Expansion Space. Landlord and Tenant
          agree to cooperate in good faith to work with the first and second
          floor tenant with respect to the equitable allocation of costs and
          expenses and the use of the Mechanical System by the first and second
          floor tenant. Tenant acknowledges that the first or second floor
          tenant (currently Pathogenesis Inc.) shall maintain, repair and
          replace the Mechanical System for the benefit of Tenant and the first
          or second floor tenant. Tenant shall reimburse Pathogenesis Inc., the
          successor first or second floor tenant or Landlord (in the event
          Landlord has undertaken maintenance and repair responsibility) on a
          pro-rata square foot basis, for any and all maintenance, repair or
          replacement costs. Tenant shall pay Pathogenesis, Inc. (or the party
          maintaining the Mechanical System) such costs on a monthly basis based
          on estimates. All costs and expenses shall be reconciled on an annual
          basis.

          Tenant shall have the option of disconnecting certain of the
          Mechanical Systems servicing the Additional Expansion Space and
          instead servicing all or a portion of the Additional Expansion Space
          with Tenant's mechanical systems currently servicing other space in
          the Building leased by Tenant under the lease. In such event, tenants
          pro-rata square footage allocation of costs for maintaining and
          repairing the Mechanical Systems shall be reduced accordingly.

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                             [GRAPHIC APPEARS HERE]

<PAGE>

                                   EXHIBIT C-l

                               TO LEASE AGREEMENT

                TENANT'S REMOVABLE ATTACHED EQUIPMENT & PROPERTY

Subject to the terms and conditions of this Lease, the improvements and
equipment attached to the Premises which may be removed by Tenant from the
Premises at the expiration or earlier termination of this Lease are as set forth
below in this Exhibit C-l. Without Landlord's prior written consent, which
consent shall not be unreasonably withheld, no other improvements, alterations
or attached equipment shall be removed from the Premises at the expiration or
termination of this Lease except as may be provided otherwise in the Lease or as
may be agreed upon by Landlord and Tenant and added to this Exhibit C-l by
Landlord and Tenant from time to time.

1.   The list of equipment attached to this Exhibit C-l as Schedule 1.

Landlord has not done an extensive search of the items on this list. If there is
any inconsistency between the items listed on Schedule 1 to Exhibit C and the
items listed on Schedule 1 to Exhibit C-l, then the items listed on Schedule 1
to Exhibit C identified as "Trade Improvements" or the "Mechanical System" shall
remain the property of Landlord at the expiration or earlier termination of this
Lease.

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<PAGE>

                            SCHEDULE 1 TO EXHIBIT C-1

                    Nonexclusive List of Tenant's Personalty

The following list of combined Therapeutics, Inc. Equipment shall be removed by
CTI upon termination of lease:

 1.  Fume Hoods
 2.  Biological Safety Cabinets
 3.  Herman Miller Modular Laboratory Furnishings & Laboratory Fittings
 4.  Refrigerators, Refrigerator/Freezers, Freezers
 5.  Centrifuges
 6.  Column Racks
 7.  Compressed Gas Tanks & Manifolds
 8.  Computers & Associated Systems Equipment
 9.  Incubators
10.  Autoclave(s)
11.  Shakers
12.  Still(s)
13.  Ward Exhaust Hoods
14.  Delonized Water System(s)
15.  Hussmann Modular Cold Room & Compressor
16.  Film Developer & Film Processor
17.  Metro Shelving & Benches
18.  All Movable Benches, Tables, Carts, Cabinets, Lab Chairs & Stools
19.  Flake Ic? Makers
20.  Scintillation Counter
21.  Balances & Balance Tables
22.  All Bench Top Laboratory Equipment
23.  Freeze Dryer(s)
24.  Laboratory Ovens
25.  Microwave Oven(s)
26.  Emergency Generator
27.  Vacuum Pump(s) & Air Compressor(s)
28.  Modular Power Poles
29.  Telephones & Associated Equipment
30.  Fluorometer

     THIRD FLOOR

     Fume hoods and exhaust fans
     Biohazard safety cabinets
     Centrifuges
     Nitrogen Piping
     NMR/Air compressor
     Analytic Chemistry Equipment
     HPLC Equipment
     Computer system
     Drug Storage equipment
     Balances
     Refrigerators/Freezers
     Office Furniture
     Reception desk/Telephones/Computers
     Copy Machines
     Vacuum Pump
     RO/DI water system
     Herman Miller Lab benches

<PAGE>

                             CELL THERAPEUTICS, INC.
                       ASSETS ACQUIRED BETWEEN 12/00 - 2/01

<TABLE>
<CAPTION>
           DELIVERY
ASSET NO.    DATE                     DESCRIPTION                           SERIAL #          NET AMOUNT    TAXES   GROSS AMOUNT
---------------------------------------------------------------------------------------------------------------------------------
   <S>     <C>        <C>                                            <C>                        <C>         <C>         <C>
   5,735   12/04/00   Vectra VL400 DT P3-866                         SUS04606772                 1,490.07   128.14       1,618.21
   5,736   12/15/00   Polaview 350 lcd Projector                     2486                        5,483.72   471.61       5,955.33
   5,737   12/15/00   Polaview 350 lcd Projector                     2454                        5,483.72   471.60       5,955.32
   5,740   12/06/00   Netserver/HP/LH3000/P3-866                     SUS04021276                11,610.13   998.45      12,608.58
   5,744   12/03/00   IBM Thinkpad T20 PIII 700 MHZ                  78-PWA78                    4,678.79     0.00       4,678.79
   5,745   12/03/00   IBM Thinkpad T20 PIII 700 MHZ                  78-PWY95                    4,678.79     0.00       4,678.79
   5,746   12/03/00   IBM Thinkpad T20 PIII 700 MHZ                  78-PVV40                    4,678.79     0.00       4,678.79
   5,747   12/03/00   IBM Thinkpad T20 PIII 700 MHZ                  78-PXC40                    4,678.78     0.00       4,678.78
   5,748   12/15/00   IBM Thinkpad T21 PIII 750                      IS26472BU78MKFN4            4,118.42     0.00       4,118.42
   5,750   12/14/00   Incubator 815 BOD 115V                         600101460                   2,670.08     0.00       2,670.08
   5,751   12/03/00   Ultrasonic Cell Distrib Mod 450                BI00096778                  2,436.36     0.00       2,436.36
   5,752   12/20/00   Vectra VL400 DT P3-866                         US04471736                  2,153.42     0.00       2,153.42
   5,753   12/20/00   Vectra VL400 DT P3-866                         US04471491                  2,153.42     0.00       2,153.42
   5,754   12/20/00   Vectra VL400 DT P3-866                         US04471690                  2,153.41     0.00       2,153.41
   5,755   12/08/00   Upgrade CVP 5.03                                                           2,434.14   209.34       2,643.48
   5,756   01/01/01   IBM Thinkpad T20 PIII                          78-WXD63                    4,148.39   356.76       4,505.15
   5,757   01/01/01   IBM Thinkpad T20 PIII                          78-WXF38                    4,148.38   356.76       4,505.14
   5,758   01/01/01   Seagate 73.4 Ultra 160 SCSI H-Drive            SBAOE04003WL                1,226.55   105.48       1,332.03
   5,759   01/01/01   Fax Machine 33.6 KBPS                          8040                        2,487.00   213.88       2,700.88
   5,761   02/01/01   FAS Accounting Software                                                    4,492.45   386.36       4,878.81
   5,762   02/01/01   Vectra VL400 MT PS-933                         SUS04909184                 3,358.92   288.84       3,647.76
   5,763   02/01/01   IBM Thinkpad T20 PIII 750 MHZ                  1S264792U78T1650            5,272.73   453.45       5,726.18
   5,764   02/01/01   IBM Thinkpad X20 PIII                          FX14445                     4,417.31   395.80       4,813.11
   5,765   02/01/01   IBM Thinkpad X20 PIII                          FX28766                     4,417.31   379.89       4,797.20
   5,766   02/01/01   IBM Thinkpad X20 PIII                          FX28801                     4,417.30   379.89       4,797.19
   5,767   02/01/01   IBM Thinkpad T20 PIII 750 MHZ                  IS264786U78GYZL1            4,555.37   391.75       4,947.12
   5,768   02/01/01   Netserver/LC2000 P3-733 NO-HD                  US04020838                 11,213.00   577.75      11,790.75
   5,769   02/07/01   Vacuum Pump                                                                1,389.54     0.00       1,389.54
   5,773   02/07/01   INTEL PIII 933 133MHZ Comp Pkg SN 59197        59197                       3,183.80   273.81       3,457.61
   5,774   02/01/01   NEC 20.1 IN LCD 31MM 1280X1024                                             5,709.81   491.04       6,200.85
   5,775   02/01/01   Vectra VL400 MT PS-933                         US05204179                  3,363.94   289.28       3,653.22
   5,776   02/01/01   Latitude C600                                  TW-0791UH-12800-OC5-58      3,796.05   326.46       4,122.51
   5,777   02/01/01   Metaframe 1.8 Subscription Advantage Package   ACMFT18015-S                6,263.00   538.62       6,801.62
   5,783   02/01/01   Workstations220 866Mhz PIII                    5m53c01                     1,656.00   142.42       1,798.42
   5,784   02/01/01   Workstations220 866Mhz PIII                    9C53C01                     1,656.00   142.42       1,798.42
   5,785   02/01/01   Workstations220 866Mhz PIII                    H853C01                     1,656.00   142.42       1,798.42
   5,786   02/01/01   Workstations220 866Mhz PIII                    CC53C01                     1,656.00   142.42       1,798.42
   5,787   02/01/01   Workstations220 866Mhz PIII                    HK53C01                     1,656.00   142.42       1,798.42
   5,788   02/01/01   Workstations220 866Mhz PIII                    GK53C01                     1,656.00   142.42       1,798.42
   5,789   02/01/01   Workstations220 866Mhz PIII                    GC53C01                     1,656.00   142.42       1,798.42
   5,790   02/01/01   Workstations220 866Mhz PIII                    5L53C01                     1,656.00   142.42       1,798.42
   5,791   02/01/01   Workstations220 866Mhz PIII                    9N53CO                      1,656.00   142.42       1,798.42
   5,792   02/01/01   Workstations220 866Mhz PIII                    FN53C01                     1,656.00   142.42       1,798.42
   5,793   02/01/01   Workstations220 866Mhz PIII                    FL53C01                     1,656.00   142.42       1,798.42
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                       ASSETS ACQUIRED BETWEEN 12/00 - 2/01

<TABLE>
<CAPTION>
           DELIVERY
ASSET NO.    DATE                     DESCRIPTION                             SERIAL #        NET AMOUNT     TAXES    GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
   <S>     <C>        <C>                                              <C>                     <C>           <C>         <C>
   5,794   02/01/01   Workstations220 866Mhz PIII                      J853C01                  1,656.00       142.42     1,798.42
   5,795   02/01/01   Workstations220 866Mhz PIII                      3L53C01                  1,656.00       142.42     1,798.42
   5,796   02/01/01   Workstations220 866Mhz PIII                      JK53C01                  1,656.00       142.42     1,798.42
   5,797   02/01/01   Workstations220 866Mhz PIII                      4M53C01                  1,656.00       142.42     1,798.42
   5,798   02/01/01   Workstations220 866Mhz PIII                      2953C01                  1,656.00       142.42     1,798.42
   5,799   02/01/01   Workstations220 866Mhz PIII                      GM53C01                  1,656.00       142.42     1,798.42
   5,800   02/01/01   Workstations220 866Mhz PIII                      IM53C01                  1,656.00       142.42     1,798.42
   5,801   02/01/01   Workstations220 866Mhz PIII                      FC53C01                  1,656.00       142.42     1,798.42
   5,802   02/01/01   Workstations220 866Mhz PIII                      DC53C01                  1,656.00       142.42     1,798.42
   5,803   02/01/01   Workstations220 866Mhz PIII                      B853C01                  1,656.00       142.42     1,798.42
   5,804   02/01/01   Workstations220 866Mhz PIII                      P853C01                  1,655.92       142.42     1,798.34
   5,811   01/02/01   Dell Precision Workstation                       9K17801                  2,789.93       239.93     3,029.86
   5,816   02/15/01   Buchi Rotavr 114C                                408143060056             4,013.75         0.00     4,013.75
   5,840   01/01/01   Open Cabinet 80"x36"Wx16"D. 54 Pocket, Pebble
                       Gray                                                                     3,004.27       379.31     3,383.58
   5,847   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3963                  2,267.00       194.96     2,461.96
   5,848   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ6845                  2,267.00       194.96     2,461.96
   5,849   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3972                  2,267.00       194.96     2,461.96
   5,850   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3962                  2,267.00       194.96     2,461.96
   5,851   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ4267                  2,267.00       194.96     2,461.96
   5,852   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ4268                  2,267.00       194.96     2,461.96
   5,853   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3993                  2,267.00       194.96     2,461.96
   5,854   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ4246                  2,267.00       194.96     2,461.96
   5,855   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ5350                  2,267.00       194.96     2,461.96
   5,856   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ5065                  2,267.00       194.96     2,461.96
   5,857   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3940                  2,267.00       194.96     2,461.96
   5,858   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ055                   2,267.00       194.96     2,461.96
   5,859   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3969                  2,267.00       194.96     2,461.96
   5,860   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ4087                  2,267.00       194.96     2,461.96
   5,861   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3844                  2,267.00       194.96     2,461.96
   5,862   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ4265                  2,267.00       194.96     2,461.96
   5,863   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ4154                  2,267.00       194.96     2,461.96
   5,864   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3965                  2,267.00       194.96     2,461.96
   5,865   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3727                  2,267.00       194.96     2,461.96
   5,866   02/05/01   Latitude C600 750MHz Pentium III 14.1"TFT Engl   OBQ3980                  2,267.00       194.96     2,461.96
   5,867   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293870     2,501.00       215.09     2,716.09
   5,868   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293887     2,501.00       215.09     2,716.09
   5,869   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293873     2,501.00       215.09     2,716.09
   5,870   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293883     2,501.00       215.09     2,716.09
   5,871   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293817     2,501.00       215.09     2,716.09
   5,872   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293871     2,501.00       215.09     2,716.09
   5,873   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293868     2,501.00       215.09     2,716.09
   5,874   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293854     2,501.00       215.09     2,716.09
   5,875   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293823     2,501.00       215.09     2,716.09
   5,876   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293866     2,501.00       215.09     2,716.09
   5,877   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   [ILLEGIBLE]             [ILLEGIBLE]   [ILLEGIBLE] [ILLEGIBLE]
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                       ASSETS ACQUIRED BETWEEN 12/00 - 2/01

<TABLE>
<CAPTION>
           DELIVERY
ASSET NO.    DATE                     DESCRIPTION                             SERIAL #        NET AMOUNT     TAXES    GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
<S>        <C>        <C>                                              <C>                     <C>             <C>      <C>
   5,878   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293869     2,501.00       215.09     2,716.09
   5,879   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293828     2,501.00       215.09     2,716.09
   5,880   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293164     2,501.00       215.09     2,716.09
   5,881   02/27/01   Latitude C600 750MHz, Pentium III 14.1"TFT Eng   TWO791US128001293803     2,500.97       215.09     2,716.06
   5,901   12/19/00   CPU: Del Latitude C600/700MHz/PIII/14            JI49801                  2,717.16       233.67     2,950.83
   5,905   01/13/01   Sony CIVN CRUS 600                                                        2,299.97       197.80     2,497.77
   5,931   12/13/00   Caging System/Maxi Miser                                                 16,861.00         0.00    16,861.00

Grand
 Total:
                                                                                                                        309,530.32
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                        ASSETS ACQUIRED AFTER MARCH 2001

<TABLE>
<CAPTION>
ASSET NO.  DELIVERY DATE                DESCRIPTION                       SERIAL #             NET AMOUNT    TAXES    GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
   <S>     <C>             <C>                                       <C>                       <C>         <C>          <C>
   5,805   03/19/01        Intimus shredder                          67111800226W                1,991.17     171.24      2,162.41
   5,806   03/19/01        Intimus shredder                          67111800227W                1,991.17     171.24      2,162.41
   5,807   03/30/01        Business Objects Software                                            12,917.50   1,110.91     14,028.41
   5,808   03/30/01        SW Voyager Software                                                   3,250.00     279.50      3,529.5O
   5,809   03/30/01        Cedar eTime Software                                                 21,250.00   1.827.50     23,077.5O
   5,810   03/28/01        NetServer LC2000 P3-733                   US04331690                  5,046.96     434.03      5,480.99
   5,812   03/30/01        Vacuum Pump Tef Diaphragm                 11548071                    1,383.30       0.00      1,383.30
   5,813   03/22/01        Refrig/Frzr Flmble/Storage                020L-518295-DL              1,896.99       0.00      1,896.99
   5,814   03/06/01        ChemDraw Ultra WM 6.0 Site Licence                                    7,124.00     612.66      7,736.66
   5,815   03/30/01        FP50/Refrigerated& Heating Circulator                                 9,109.74       0.00      9,109.74
   5,817   03/22/01        18.2GB Ultra SCSI Disk Drive              69053?0?                    1,811.34     155.78      1,967.12
   5,818   03/30/01        BFX Producer 96 w/Stacker Carousel        13927                     129,069.29  11,100.00    140,169.29
   5,820   03/13/01        866MHz Workstation                        6Rly?0?                     3,010.00     258.88      3,268.88
   5,821   03/19/01        DGU-14A Degaser                                                       1,843.80     158.57      2,002.37
   5,822   03/19/01        DGU-14A Degaser                                                       1,843.80     158.57      2,002.37
   5,823   03/19/01        DGU-14A Degaser                                                       1,843.80     158.57      2,002.37
   5,824   03/19/01        CTO-10ACVP Column Oven                                                3,023.00     259.96      3,282.96
   5,825   03/28/01        Frezerworks 5.l WINNT Network Version                                 5,000.00     430.50      5,430.50
   5,826   03/30/01        ISIS/Chemistry Seal - Base/Lie/Sup                                   18,408.00   1,583.09     19,991.09
   5,827   03/08/01        Maxi-Miser Caging System                                             20,254.00       0.00     20,254.00
   5,828   03/30/01        HP Netserver LH3000R                      US04229535                 13,246.54   1,139.20     14,385.74
   5,829   03/30/01        HP Netserver LH3000R                      US04229538                 13,246.54   1,139.20     14,385.74
   5,830   04/27/01        Polaroid Polaview 350 LCD Pro             7410009826                  4,220.66     363.03      4,583.69
   5,831   04/27/01        Latitude C600 850 MHz, PIII               TWO079UH128001442231        3,014.00     265.23      3,279.23
   5,832   04/27/01        Latitude C600 850 MHz, PIII               TW0791UH128001442199        3,014.01     265.23      3,279.24
   5,833   04/27/01        Latitude C600 850 MHz, PIII               TWO791UH128001442226        3,014.01     265.23      3,279.24
   5,834   04/27/01        Latitude C600 850 MHz, PIII               TWO791UH128001442229        3,014.01     265.23      3,279.24
   5,835   04/27/01        Latitude C600 850 MHz, PIII               TWO791UH128001442830        3,014.01     265.23      3,279.24
   5,836   04/27/01        Latitude C600 850 MHz, PIII               TWO791UH28001442225         3,014.01     265.23      3,279.24
   5,837   04/27/01        Latitude C600 850 MHz, PIII               TWO791UH28001442239         3,014.01     265.23      3,279.24
   5,838   04/27/01        Latitude C600 850 MHz, PIII               TWO791UH28001442230         3,014.01     265.23      3,279.24
   5,839   04/24/01        IBM Thinkpad PIII 600                     IS266237UFX07752            4,118.11     354.53      4,472.64
   5,841   04/18/01        Dell Workstation 220 PIII 866MHz/256K     5018091967Q                 2,386.90     205.30      2,592.20
   5,882   03/15/01        InFocus LP 350V Projector                 5RW0410054                  5,359.73     460.93      5,820.66
   5,883   03/15/01        InFocus LP 350V Projector                 5RW041O1719                 5,359.73     460.93      5,820.66
   5,884   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1224674       2,740.00     235.64      2,975.64
   5,885   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1224675       2,740.00     235.64      2.975.64
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                        ASSETS ACQUIRED AFTER MARCH 2001

<TABLE>
<CAPTION>
ASSET NO.  DELIVERY DATE                DESCRIPTION                       SERIAL #             NET AMOUNT    TAXES    GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
   <S>     <C>             <C>                                       <C>                       <C>            <C>       <C>
   5,886   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1212560       2,740.00     235.64      2,975.64
   5,887   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1212329       2,740.00     235.64      2,975.64
   5,888   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1224676       2,740.00     235.64      2,975.64
   5,889   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1212600       2,740.00     235.64      2,975.64
   5,890   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1224080       2,740.00     235.64      2,975.64
   5,891   03/22/01        Latitude C600 750MHz Pentium III
                           14.1" TFT English                         TWO791UH12800-1212599       2,740.00     235.61      2,975.61
   5,892   04/24/01        Diskeeper 6.0 for NT/2000 Server 10 Pack                              1,572.43     138.37      1,710.80
   5,893   04/05/01        Clintrial Enter Software Module                                     173,857.46       0.00    173,857.46
   5,894   04/10/01        HP Netserver LH3000R P3-933 no HD         US10826471                  4,641.37     399.96      5,041.33
   5,895   04/19/01        FP-50HE 230v 60Hz Refrig/Heating
                           Circulator                                                            7,458.53       0.00      7,458.53
   5,896   04/10/01        CPU Latitude C600 850MHz PIII 14.1 TFT    TWO0791UH1280013C8133       2,582.00     222.08      2,804.08
   5,897   04/20/01        1.0 GHz (133 MHzFSB) PIII Precision 220   4YZHJ01                     1,951.90     171.81      2,123.71
   5,898   04/17/01        CPU Latitude C600 850MHz PIII 14.1 TFT    TWO791UH128001314207        2,790.00     245.55      3,035.55
   5,899   03/29/01        Benchtop Ph/mV Temp Meter, MdI 445                                    1,352.58       0.00      1,352.58
   5,900   04/20/01        Calibration Mgr for Windows                                           2,330.00       0.00      2,330.00
   5,902   04/25/01        CPU: Del Latitude C600/850MHz/PIII
                           /14.1 TFT                                 TWO791UH128001413386        2,818.00     248.00      3,066.00
   5,903   04/25/01        CPU: Del Latitude C600/850MHz/PIII
                           /14.1 TFT                                 TWO791UH128001391160        2,818.00     248.00      3,066.00
   5,904   05/02/01        Base 1.0B GHz, PIII Precision 22          CN02320V4778212N1123        1,519.00     133.65      1,652.65
   5,908   03/14/01        PIII/866MHz/Workstation 220 M/256K        6TQZF01                     1,570.00     135.02      1,705.02
   5,909   03/14/01        PIII/866MHz/Workstation 220 M/256K        9TQZF01                     1,570.00     135.02      1,705.02
   5,910   03/14/01        PIII/866MHz/Workstation 220 M/256K        7TQZF01                     1,570.00     135.02      1,705.02
   5,911   03/14/01        PIII/866MHz/Workstation 220 M/256K        8TQZF01                     1,570.00     135.02      1,705.02
   5,912   03/14/01        PIII/866MHz/Workstation 220 M/256K        BTQZF01                     1,570.00     135.02      1,705.02
   5,913   03/14/01        PIII/866MHz/Workstation 220 M/256K        5TQZF01                     1,570.00     135.04      1,705.04
   5,914   05/14/01        HP Kayak XU700 1.5GHz                     US61167668                  4,142.70     364.55      4,507.25
   5,915   05/02/01        CPU Latitude C600 850MHz/PIII/14.1 TFT    TWO1791UH12800-1313694      3,176.90     279.57      3,456.47
   5,916   05/02/01        CPU Latitude C600 850MHZ/PIII/I4.1 TFT    TWO1791UH12800-1313733      3,176.90     279.57      3,456.47
   5,917   05/02/01        CPU Latitude C600 850MHz/PIII/14.1 TFT    TWO1791UH12800-1390570      3,176.90     279.57      3,456.47
   5,918   05/02/01        CPU Latitude C600 850MHz/PIII/l4.1 TFT    TWO1791UH12800-1313360      3,176.90     279.57      3,456.47
   5,919   05/02/01        CPU Latitude C600 850MHz/PIII/14.1 TFT    TWO1791UH12800-1313485      3,176.90     279.57      3,456.47
   5,920   05/02/01        CPU Latitude C600 850MHz/PIII/l4.1 TFT    TWO1791UH12800-1390590      3,176.88     279.57      3,456.45
   5,921   05/01/01        Intel PIII 866 133MHz CPU Package         59444                       2,309.84     203.27      2,513.11
   5,922   03/28/01        Flask/30L/Cylindrical Jacketed 200mm                                  9,556.37       0.00      9,556.37
   5,923   03/30/01        Pump/Binary/HP 1100-0100                                             53,489.00       0.00     53,489.00
   5,924   04/20/01        Centrifuge/Algra-A6/60Hz/l20V/NFRG                                    7,209.00       0.00      7,209.00
   5,925   05/22/01        PATSSY 2000 Upgrade                                                   5,250.00     462.00      5,712.00
   5,926   05/31/01        CPU: Latitude C600 850MHz/PIII/14.1 TFT   TWO791UH1280014T8736        3,148.00     277.03      3,425.03
   5,927   05/31/01        CPU: Latitude C600 850MHz/PIII/14.1 TFT   TWO791UH1280014T8238        3,148.00     277.02      3,425.02
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                        ASSETS ACQUIRED AFTER MARCH 2001

<TABLE>
<CAPTION>
 ASSET
  NO.   DELIVERY DATE                DESCRIPTION                             SERIAL #          NET AMOUNT    TAXES    GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>            <C>                                           <C>                       <C>         <C>        <C>
5,928   06/19/01       Humidity Transmitter/HMP 233, no display,
                       low temp, 5 meter                             W2050003                    1,163.60       0.00      1,163.60
5,929   06/18/01       CPU: Latitude C600 850MHz/PIII/14.l TFT       TWO791UH-12800-15E-0884     2,331.50     205.66      2,537.16
5,930   03/21/01       Duo-Flowquadtec 2128FC/120                    484br1289                  34,763.36       0.00     34,763.36
5,932   04/04/01       AVR7-3 Sample Injection Valve                 482br1341                   3,054.20       0.00      3,054.20
5,933   04/02/01       Pump/Vacuum/KNF/17L/Two stage                                             1,073.00       0.00      1,073.00
5,934   04/02/O1       Pump/Vacuum/KNF/l7L/Two stage                                             1,073.00       0.00      1,073.00
5,935   04/02/01       Pump/Vacuum/KNF/l7L/Two stage                                             1,073.00       0.00      1,073.00
5,936   04/30/01       Evaporator/Rotory/R114C/W/Bath                409004140057                3,953.75       0.00      3,953.75
5,937   05/31/01       Base l.0GHz PIII Precision 22                 501-8095957-T               2,058.95       0.00      2,058.95
5,938   05/24/01       Luminometer/Microplate/Stratec w/Inj. Ut                                 17,500.00       0.00     17,500.00
5,939   06/14/01       Dual Action Orbital Shaker                    0301-019                    1,825.72       0.00      1,825.72
5,940   05/18/01       HP Netserver LH3000R 133 Mhz                  SUS11130488                11,411.29   1,004.19     12,415.48
5,941   06/25/01       Oracle 8i Standard Edition Release 2 (8.1.6)                             11,126.00     979.09     12,105.09
5,942   06/21/01       Pilot Plant Reactor System 10L                                            7,510.16       0.00      7,510.16
5,943   06/21/01       Pilot Plant Reactor System 10L                                            7,510.16       0.00      7,510.16
5,944   05/22/01       HPLC System                                                              49,891.00       0.00     49,891.00
5,945   07/26/01       Basic Metamorph System                                                   31,198.00       0.00     31,198.00
5,946   03/30/O1       Revco Ultima II Series Upright-75                                         9,895.47       0.00      9,895.47
5,947   03/30/01       Revco Ultima II Series Upright-80                                         9,834.03       0.00      9,834.03
5,948   07/13/01       IBM Thinkpad X20 PIII                                                     4,268.07       0.00      4,268.07
5,949   05/10/01       Screen/Phospho/35X43CM                                                    2,050.00       0.00      2,050.00
5,950   05/10/01       Screen/Phospho/35X43CM                                                    2,050.00       0.00      2,050.00
5,951   05/10/01       Screen/Phospho/35X43CM                                                    2,050.00       0.00      2,050.00
5,952   05/10/01       Screen/Phospho/35X43CM                                                    2,050.00       0.00      2,050.00
5,953   05/10/01       Satorius Master High Cap Balance                                          3,275.78       0.00      3,275.78
5,954   06/25/01       Genesys 8 UV-Visible Spectrophotometer                                    5,069.70       0.00      5,069.70
5,955   06/13/01       Image Analysis Workstation                                                2,700.00       0.00      2,700.00
5,956   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,957   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,958   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,959   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,960   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,961   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,962   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.98       0.00      3,543.98
5,963   07/09/01       Incubator Forma/MDL #3110/SC                                              3,543.94       0.00      3,543.94
5,964   07/25/01       Professional Balance 220Gx0.1 MG AX204                                    5,335.05       0.00      5,335.05
5,965   07/06/01       30L Pilot Plant Reactor System                                           34,313.05       0.00     34,313.05
        Grand Total:                                                                           968,223.33  35,068.85  1,003,292.18
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                     ASSETS ACQUIRED BETWEEN 12/00 - CURRENT

<TABLE>
<CAPTION>
 ASSET
  NO.   DELIVERY DATE                DESCRIPTION                             SERIAL #          NET AMOUNT    TAXES     GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>            <C>                                           <C>                         <C>          <C>         <C>
7315    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E3966       2,215.39     190.94      2,406.33
7316    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E1847       2,215.39     190.94      2,406.33
7317    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E4043       2,215.39     190.94      2,406.33
7318    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E3488       2,215.39     190.94      2,406.33
7319    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C748128OO-17E3931       2,215.39     190.94      2,406.33
7320    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E4048       2,215.39     190.94      2,406.33
7321    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E3956       2,215.39     190.94      2,406.33
7322    8/15/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C74812800-17E2778       2,215.39     190.92      2,406.31
9399    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      HYKYQ01                     1,305.25     114.87      1,420.12
9400    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      22KYQ01                     1,305.25     114.87      1,420.12
9403    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      FYKYQ01                     1,305.25     114.87      1,420.12
9404    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      GYKYQ01                     1,305.25     114.87      1,420.12
9405    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      1ZKYQ01                     1,305.25     114.87      1,420.12
9406    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      9ZKYQ01                     1,305.25     114.87      1,420.12
9409    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      CZKYQ01                     1,305.25     114.87      1,420.12
9410    7/20/2001      1.40 GHz (400MHzBus), P4, Dell Precision
                       330, Min                                      BZKYQ01                     1,305.25     114.83      1,420.08
8612    6/14/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      72LCN01                     1,599.00     140.72      1,739.72
8613    6/14/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      42LCN01                     1,599.00     140.72      1,739.72
8614    6/14/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      82LCN01                     1,599.00     140.72      1,739.72
8615    6/14/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      52LCN01                     1,599.00     140.71      1,739.71
8604    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2639        2,439.61     214.69      2,654.30
8605    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2938        2,439.61     214.69      2,654.30
8606    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2939        2,439.61     214.69      2,654.30
8607    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2787        2,439.61     214.69      2,654.30
8608    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2941        2,439.61     214.69      2,654.30
8609    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C748128001694344        2,439.61     214.69      2,654.30
8610    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2851        2,439.61     214.69      2,654.30
8611    6/26/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO9C7481280015J2997        2,439.62     214.65      2,654.27
9324    5/29/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      3DZ4MO1                     1,575.66     138.66      1,714.32
9325    5/29/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      4DZ4MO1                     1,575.66     138.66      1,714.32
9326    5/29/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      5DZ4MO1                     1,575.66     138.66      1,714.32
9327    5/29/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      9DZ4MO1                     1,575.66     138.66      1,714.32
9328    5/29/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      7DZ4MO1                     1,575.66     138.66      1,714.32
</TABLE>

<PAGE>

                             CELL THERAPEUTICS, INC.
                     ASSETS ACQUIRED BETWEEN 12/00 - CURRENT

<TABLE>
<CAPTION>
 ASSET
  NO.   DELIVERY DATE                DESCRIPTION                             SERIAL #          NET AMOUNT    TAXES    GROSS AMOUNT
----------------------------------------------------------------------------------------------------------------------------------
<S>     <C>            <C>                                           <C>                       <C>         <C>          <C>
9329    5/29/2001      1.30 GHz (400 MHzBus), P4, Dell Precision
                       330, Mir                                      6DZ4MO1                     1,575.70     138.64      1,714.34
9331     6/6/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO791UH1280015GC173        2,767.40     243.53      3,010.93
9333     6/6/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO791UH1280015GB076        2,767.40     243.53      3,010.93
9334     6/6/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO791UH1280015GC207        2,767.40     243.53      3,010.93
9335     6/6/2001      Latitude C600, 850 MHz, PIII 14.1in TFT,
                       English                                       TWO791UH1280015GB638        2,767.40     243.52      3,010.92
2966    6/25/2001      HP 36.4GB Ultra3 10K LVD Hot                  5FFRK666                    1,130.07      99.45      1,229.52
2971    6/25/2001      HP 36.4GB Ultra3 10K LVD Hot                  5FFRT903                    1,130.07      99.45      1,229.52
2972    6/25/2001      HP 36.4GB Ultra3 10K LVD Hot                  5FFRL980                    1,130.07      99.45      1,229.52
2973    6/25/2001      HP 36.4GB Ultra3 10K LVD Hot                  4FFMF912                    1,130.07      99.45      1,229.52
2974    6/25/2001      HP 36.4GB Ultra3 10K LVD Hot                  5FFRP152                    1,130.07      99.45      1,229.52
2975    6/25/2001      HP 36.4GB Ultra3 10K LVD Hot                  4FFKM101                    1,130.07      99.43      1,229.50
8597    5/30/2001      Optivity Campus NMS 9.1                                                   2,322.40     204.37      2,526.77
9330    6/13/2001      Latitude C600, 850MHz, PIII, 14.1in, TFT,
                       English                                       TW0791UH1280015E-3934       2,485.95     218.76      2,704.71
9336    6/13/2001      Latitude C600, 850MHz, PIII, 14.1in, TFT,
                       English                                       TW0791UH1280015E-3915       2,485.95     218.75      2,704.70
8263    2/28/2001      HP Netserver LH3000R P3-933 No HD             US05314967                  8,490.00     730.14      9,220.14
8264    2/28/2001      HP Netserver LH3000R P3-933 No HD             US05010645                  8,490.00     730.14      9,220.14
8265    2/28/2001      HP Netserver LH3000R P3-933 No HD             US05010945                  8,490.00     730.15      9,220.15
8266    2/28/2001      HP Netserver LC2000R P3866 No HD              US10216038                  6,788.54     583.81      7,372.35
8268    2/28/2001      HP Kayak XM600DT 3-866 9.1 GB HD              US04963738                  6,745.64     580.12      7,325.76
8340    2/12/2001      Surestore Rackmount Kit                       C7745NBUSDAP00110           9,923.62     853.43     10,777.05
9074     2/9/2001      Microsoft Exchange 2000 Server                                           10,799.86     928.79     11,728.65
9077    2/23/2001      Cisco 2621 Dual 10/100 Enet Router            JMX0504KIWT                 3,656.18     314.43      3,970.61
9078    2/23/2001      Cisco 2621 Dual 10/100 Enet Router            JMX0504KilWK                3,656.18     314.43      3,970.61
9079    2/23/2001      Cisco 2621 Dual 10/100 Enet Router            JMX0504KIN5                 3,656.18     314.43      3,970.61
9080    2/23/2001      Cisco 2621 Dual 10/100 Enet Router            JMX0504KIMV                 3,656.17     314.43      3,970.60
9081    2/23/2001      Cisco 2621 Dual 10/100 Enet Router            JMX0504HISJ                 1,182.42     101.69      1,284.11
 F5C    12/6/2000      Office Furniture                                                        249,929.98  21,493.98    271,423.96

Grand Total                                                                                    414,141.10  35,761.35    449,902.45
</TABLE>

<PAGE>

                              UPDATE TO EXHIBIT C-1
                     CELL THERAPEUTICS, INC. (201 BUILDING)
                       PROPERTY WITH PO DATE AFTER 8/15/01

Report Date:

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
00201      HP683279        HP LASER JET 4100N                           NUSBG10514                     25770
00202      1708100         GEL DOC 2000PC SYSTEM 100-115V               0137                           25769
00203      HP117175        HP 8550DN Color Laser Jet Printer            JPMB030101                     25779
00204      C4781A          2000 Sheet Paper Tray for #8150              JPHH176406                     25781
00219      2204472         LATITUDE C610 1.20GHZ PENTIUM III            DKXM611                        25801
00220      2204472         LATITUDE C610 1.20GHZ PENTIUM III            BLXM611                        25801
00222      2204472         LATITUDE C610 1.20GHZ PENTIUM III            HSXM611                        25801
00224      2204472         LATITUDE C610 1.20GHZ PENTIUM III            8TXM611                        25801
00225      2204472         LATITUDE C610 1.20GHZ PENTIUM III            2VXM611                        25801
00226      2204472         LATITUDE C610 1.20GHZ PENTIUM III            DVXM611                        25801
00227      2204472         LATITUDE C610 1.20GHZ PENTIUM III            7WXM611                        25801
00229      HP049863        HP LASERJET 2200DN 8MB 19PPM                 SJPGGC43413                    25800
00233      C8050AABA       LaserJet 4100N 25PPM 32MB Laser Printer      USJND05867                     25871
00234      HP138805        HP JetDirect 400N                            SQ1A102338                     25870
00235      HP138805        HP JetDirect 400N                            SQ1A102824                     25870
00236      HP138805        HP JetDirect 400N                            SQ1A102968                     25870
00237      HP138805        HP JetDirect 400N                            SQ1A10036B                     25870
00238      HP138805        HP JetDirect 400N                            SQ1A102609                     25870
00239      HP138805        HP JetDirect 400N                            SQ1A1026C8                     25870
00249      IF029120        InFocus LP130 XGA Projector                  1S6XW14700116                  25893
00254      AO509142        Adobe Acrobat 5.0 Windows CD                 KWW500R7451190-886             25898
00255      AO509142        Adobe Acrobat 5.0 Windows CD                 KWW500R7451209-567             25898
00257      LS743636HDW     SHELVING UNITS/7' X 36" X 36"/4SLVS          No s/n                         25904
00258      AD2EL           Advantage Freezer Dryer                      214304                         25973
00260-r    AERONCHAIR      AERON CHAIRS USED                            No S/N                         25890
00261      P2479BABA       NETSERVER LC2000R PIII 1GHZ                  US20740125                     25925
00262      P2479BABA       NETSERVER LC2000R PIII 1GHZ                  US20640837                     25925
00269      2204472         LATITUDE C610 1.20GHZ PENTIUM III            3XCJ811                        25924
00270      6037985         Multiscan G420s 19 CRT Display               0180141156                     25924
00276      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               6W8B811                        25966
00277      6037985         Multiscan G420s 19 CRT Display               S018013349E                    25966
00278      POCKETFILTER    Rosemund Pocket Filter                       0.002-1103-99                  25969
00279      DWW40D01        DREAMWEAVER 4 CD MANUAL                      HS45EE-5030480010              25980
00281      AO509142        Adobe Acrobat 5.0 Windows CD                 KWW500R7474710-795             25985
00282      3130740         8-8-8-24X DVD CD READ WRITE COMBO            8F947-A00                      25982
00283      FAP250B         Upgrade for Instrument # 6451E               6021OJB2BA057                  25983
00284      26404843        HEAT GUN, HEATER/DRYER, MASTER APPLIANCE     no-serial-number               26040
00287      57463           Sample Injector Rheodyne Model 37251-038     3201                           26056
00293      P4648AABA       HP SERVER TC2100 PIII 1.13GHZ                US20841515                     25987
00294      P4648AABA       HP SERVER TC2100 PIII 1.13GHZ                US20940712                     25987

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
-----------------------------------------------------------------
<S>        <C>                      <C>        <C>
00201                                1,519.99
00202                                5,000.00
00203                                4,365.00
00204      01/18/2002 12:00:00 AM      779.00
00219      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00220      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00222      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00224      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00225      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00226      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00227      01/24/2002 12:00:00 AM    2,443.00  Computer Equipment
00229                                1,099.99
00233      02/01/2002 12:00:00 AM    1,545.00
00234      02/01/2002 12:00:00 AM      369.99  Computer Equipment
00235      02/01/2002 12:00:00 AM      369.99  Computer Equipment
00236      02/01/2002 12:00:00 AM      369.99  Computer Equipment
00237      02/01/2002 12:00:00 AM      369.99  Computer Equipment
00238      02/01/2002 12:00:00 AM      369.99  Computer Equipment
00239      02/01/2002 12:00:00 AM      369.99  Computer Equipment
00249      02/04/2002 12:00:00 AM    3,235.10  Office Equipment
00254      02/04/2002 12:00:00 AM      216.99  Computer Software
00255      02/04/2002 12:00:00 AM      216.99  Computer Software
00257      02/06/2002 12:00:00 AM      121.00
00258                               14,945.00
00260-r                                  0.00
00261      02/11/2002 12:00:00 AM    3,140.00  Computer Equipment
00262      02/11/2002 12:00:00 AM    3,140.00  Computer Equipment
00269      02/14/2002 12:00:00 AM    2,972.00  Computer Equipment
00270      02/14/2002 12:00:00 AM      428.00  Computer Equipment
00276      02/15/2002 12:00:00 AM    1,123.00  Computer Hardware
00277      02/15/2002 12:00:00 AM      399.00  Computer Equipment
00278                                3,800.00
00279      02/20/2002 12:00:00 AM      279.00  Computer Software
00281      02/20/2002 12:00:00 AM      216.99  Computer Software
00282      02/20/2002 12:00:00 AM      309.00
00283      02/20/2002 12:00:00 AM    3,600.00
00284      02/27/2002 12:00:00 AM       86.55
00287      03/01/2002 12:00:00 AM    1,152.00
00293      02/21/2002 12:00:00 AM    1,295.00  Computer Equipment
00294      02/21/2002 12:00:00 AM    1,295.00  Computer Equipment
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
00298      SOFTWARE        OPERATING SOFTWARE                           No S/N                         25997
00321      2602T2          DEEP SHELF CART - BEIGE                      NO S/N                         24889
00322      8141T14         FIBERGLASS LADDER 6'                         NO S/N                         24889
00325      ZCBUNDLM3       3 LITER MICROBIAL BIOBUNDLE                  No S/N                         24921
00325A     Z590007120      BIOXPERT WINDOWS NT SOFTWARE                 No S/N                         24921
00326      ZCBUNDLM3       3 LITER MICROBIAL BIOBUNDLE                  No S/N                         24921
00329      AL2033005       BAYSTACK 450/350 1SX 1000BT FIBER PORT       SGLSAG077613                   24923
00330      AL2033005       BAYSTACK 450/350 1SX 1000BT FIBER PORT       SGLSAG074P90                   24923
00331      VBQT2           Mass Spectrometer and Data System            NO S/N                         24934
00556      P2479BABA       NETSERVER LC2000R PIII 1GHZ                  US15140822                     25759
00942      UN7263STP       PUMP/VACUUM/KNF/17L/TWO-STAGE                1/606871                       25768
02987      4611607         "Latitude C600, 850NHZ, PIII 14.1IN"         TWO9C748128001702451           24719
02988      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S018068708N                    24719
02991      U0465025        Variomag Multiposition Electro Stirrer       0106949                        24716
02992      U0113720        Plexiglass Tank 27.5 Liter                   No S/N                         24716
02995      2206468         DellPrecision 330 Mini-Tower 1.70GHz         BQFST01                        24752
02996      2206468         DellPrecision 330 Mini-Tower 1.70GHz         9QFST01                        24752
02997      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S0180703048                    24752
02998      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S0180703037                    24752
02999      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S018070433B                    24749
03000      GLOBALIPESTIM   Global IP Estimator Full Version             NO S/N                         24761
03001      DJ1404086       Passport/Accelar XLR1202SX-C 2Port           SFLEXBBZT                      24760
03001A     BF9350020       NBD Nortel Networks Passport Support         SFLEXHBBZT                     24760
03002      DJ1404086       Passport/Accelar XLR1202SX-C 2Port           SFLEXHBBZX                     24760
04219      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
04220      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
04224      22834216        LAMP/XENON                                   No s/n                         25217
04229      2206670         "Lattitude C600 1GHZ Pentium III 4.1,SXGA"   DXZRZ01                        25249
04231      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04232      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04233      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04234      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04235      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04236      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04237      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04238      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04239      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04240      ARC163316       CRYSTAL REPORTS 8.5 PRO LEV A                no-serial-number               25250
04244      ON47460         HAMMERDRILL MODEL # DW505                    42089                          25257
04246      1201D           DECISION TOOLS SUITE PROFESSIONAL VERSIO     78993                          25284
04250      P2483BABA       HP LH3000 1000MHZ                            US14241562                     25293
04891      EF250A32S       ICE-O-MATIC FLAKER                           I21006672                      25324
04902      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/021835                  25334
04903      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/021824                  25334
04908      G1512A          7673 CONTROLLER MODULE                       CN00004360                     25289
04922      33920230        Magnetic Stirrers, Low Profile 5x7 PC410     Demo                           25506
04924      7149            RECERTIFIED RTR SLA-3000 BLACK ROT           9952725                        25549
05404      4052A21         MILWAUKEE CIRCULAR SAW                       983B401341844                  25294

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
-----------------------------------------------------------------
<S>        <C>                     <C>         <C>
00298      02/22/2002 12:00:00 AM    5,345.00
00321      09/17/2001 12:00:00 AM      139.90
00322      09/17/2001 12:00:00 AM      118.40
00325      09/20/2001 12:00:00 AM   16,000.00
00325A     09/20/2001 12:00:00 AM    2,505.00
00326      09/20/2001 12:00:00 AM   16,000.00
00329      09/18/2001 12:00:00 AM      939.00  Computer Equipment
00330      09/18/2001 12:00:00 AM      939.00  Computer Equipment
00331      09/18/2001 12:00:00 AM  300,000.00
00556      01/17/2002 12:00:00 AM    3,140.00  Computer Equipment
00942                                1,560.00
02987      08/20/2001 12:00:00 AM    2,271.00  Computer Equipment
02988      08/20/2001 12:00:00 AM      457.95  Computer Equipment
02991      08/20/2001 12:00:00 AM    1,700.00
02992      08/20/2001 12:00:00 AM      195.00
02995      08/22/2001 12:00:00 AM    1,516.00  Computer Equipment
02996      08/22/2001 12:00:00 AM    1,516.00  Computer Equipment
02997      08/22/2001 12:00:00 AM      439.95  Computer Equipment
02998      08/22/2001 12:00:00 AM      439.95  Computer Equipment
02999      08/22/2001 12:00:00 AM      449.95  Computer Equipment
03000      08/23/2001 12:00:00 AM      699.00  Computer Software
03001                                5,285.00
03001A     08/23/2001 12:00:00 AM    3,995.00
03002      08/23/2001 12:00:00 AM    5,285.00
04219      10/23/2001 12:00:00 AM      136.24  Computer Software
04220      10/23/2001 12:00:00 AM      136.24  Computer Software
04224      10/25/2001 12:00:00 AM      730.00  Lab Equipment
04229      10/30/2001 12:00:00 AM    3,331.00
04231      10/30/2001 12:00:00 AM      233.35  Computer Software
04232      10/30/2001 12:00:00 AM      233.35  Computer Software
04233      10/30/2001 12:00:00 AM      233.35  Computer Software
04234      10/30/2001 12:00:00 AM      233.35  Computer Software
04235      10/30/2001 12:00:00 AM      233.35  Computer Software
04236      10/30/2001 12:00:00 AM      233.35  Computer Software
04237      10/30/2001 12:00:00 AM      233.35  Computer Software
04238      10/30/2001 12:00:00 AM      233.35  Computer Software
04239      10/30/2001 12:00:00 AM      233.35  Computer Software
04240      10/30/2001 12:00:00 AM      233.35  Computer Software
04244      11/01/2001 12:00:00 AM      193.35  Office Equipment
04246      11/05/2001 12:00:00 AM    1,295.00  Computer Software
04250                               19,067.00
04891      11/12/2001 12:00:00 AM    3,373.50
04902                                  469.00  Computer Equipment
04903                                  469.00  Computer Equipment
04908      11/06/2001 12:00:00 AM    2,645.00
04922      12/10/2001 12:00:00 AM      194.64  Lab Equipment
04924                                4,380.00  Lab Equipment
05404      11/06/2001 12:00:00 AM      138.90  Machinery
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
06797      MS522342        VISUAL C++ ENTERPRISE 6.0 OPEN BUSINESS      14161385                       24875
06799      2206468         DellPrecision 330 Mini-Tower 1.70GHz         2BNCW01                        24877
06802      2206468         DellPrecision 330 Mini-Tower 1.70GHz         6WNCW01                        24877
06805      2206468         DellPrecision 330 Mini-Tower 1.70GHz         5BNCW01                        24877
06817      BAY984094       Baystack 350-24T Ethernet Switch             SSGLKK14AR                     24879
06820      5766A           MINICLAVE DRIVE 200 ML GLASS REACTOR         No s/n                         25168
06830      A00939A0LB000   LPB BENT NT/W2K V8.6 REMOTE AGENT            No s/n                         25191
06831      A01255A0LB000   LPB BENT NT/W2K V8.6 SQL AGENT               No s/n                         25191
06832      A01134A0LB000   LPB BENT NT/W2K V8.6 EXCHG AGENT             No s/n                         25191
06833      A00840A0LB112   LPB BENT NT/W2K V8.6 OPEN FILE OPTION        No s/n                         25191
06834      A01172A0LB000   BACKUP EXEC NT/W2K VOL LIC LIBRARY           No s/n                         25191
06837      MS960160        SQL SVR 2000 STD EDTN OPEN BUSINESS LIC      No s/n                         25193
06838      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06839      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06840      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06841      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06842      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06843      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06844      MS960165        SQL SVR 2000 CAL OPEN BUSINESS LIC           No s/n                         25193
06845      2206468         DellPrecision 330 Mini-Tower 1.70GHz         9ZTDW01                        24912
06846      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S018069843O                    24912
06852      4611607         "Latitude C600, 850NHZ, PIII 14.1IN"         BFNMW01                        24911
06853      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S018069867U                    24911
06855      17152E          FLAMMABLE CHEMICAL STORAGE CABINET           NO S/N #                       24918
06863      Z406007         MATHESON MONE CORROSIVE GAS REGULATOR        71299                          24965
06867      1652977         MODEL 422 ELECTROELUTER MODULE W             No S/N                         25470
06869      1331A37         Deluxe Key Control Wall Cabinet              No S/N                         25371
06871      U0113720        Plexiglass Tank 27.5 Liter                   No S/N                         25456
06872      2206468         DellPrecision 330 Mini-Tower 1.70GHz         B2JGW01                        24945
06873      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S018069868V                    24945
06883      4617208         1.70GHZ 400MHZ BUS P4 DELL 300               06883                          25003
06884      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     S018069860N                    25003
06885      53512500        "PIPETTOR, REPEATER, EPPENDORF"              NO S/N #                       25005
06886      53515962        MODULE/12 CHANNEL/300UL                      M17027                         25005
06888      P5000           Pipet Pipetman Variable p-5000               NO S/N #                       25016
06893      VECTOR2         WINDOWS 2000 SERVER OLP NL                   EUL00041760xxxx624673          25259
06894      VECTOR1         LOAD BALENCE OPTION PAK                      EUCD0041057xxxx047435          25259
06895      VECTOR1         LOAD BALENCE OPTION PAK                      EUC00041057xxxx047457          25259
06896      VECTOR          METAFRAME V1.8 FOR NT4TSE W/SA 15 USER       EU200F49959xxxx029968          25259
06897      G1290B          7694 HEADSPACE SAMPLER W/O EPC               IT10510891                     25302
06898      1703940         TRANS BLOT SEMI DRY ELECTROPHORETIC CELL     221BR22871                     25322
06900      53515034        FINNPIPETTE 8 CHANNEL 0.5-10UL               11907735                       25361
06901      2204472         LATITUDE C610 1.20GHZ PENTIUM III            5BVVO11                        25362
06902      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     SO18068703I                    25362
06903      47729192        EPPENDORF TITERMATE PIPETTOR                 1077374                        25523
06921      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06922      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06923      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
-----------------------------------------------------------------
<S>        <C>                      <C>        <C>
06797      09/12/2001 12:00:00 AM      914.04
06799      09/12/2001 12:00:00 AM    1,204.00  Computer Equipment
06802      09/12/2001 12:00:00 AM    1,204.00  Computer Equipment
06805      09/12/2001 12:00:00 AM    1,204.00  Computer Equipment
06817      09/12/2001 12:00:00 AM    1,443.02  Computer Equipment
06820      10/22/2001 12:00:00 AM    6,966.00  Lab Equipment
06830      10/23/2001 12:00:00 AM      140.00  Computer Software
06831      10/23/2001 12:00:00 AM      485.00  Computer Software
06832      10/23/2001 12:00:00 AM      485.00  Computer Software
06833      10/23/2001 12:00:00 AM      425.00  Computer Software
06834      10/23/2001 12:00:00 AM      599.00  Computer Software
06837      10/23/2001 12:00:00 AM      612.85  Computer Software
06838      10/23/2001 12:00:00 AM      136.24  Computer Software
06839      10/23/2001 12:00:00 AM      136.24  Computer Software
06840      10/23/2001 12:00:00 AM      136.24  Computer Software
06841      10/23/2001 12:00:00 AM      136.24  Computer Software
06842      10/23/2001 12:00:00 AM      136.24  Computer Software
06843      10/23/2001 12:00:00 AM      136.24  Computer Software
06844      10/23/2001 12:00:00 AM      136.24  Computer Software
06845      09/17/2001 12:00:00 AM    1,204.00  Computer Equipment
06846      09/17/2001 12:00:00 AM      447.95  Computer Equipment
06852      09/17/2001 12:00:00 AM    2,341.00  Computer Equipment
06853      09/17/2001 12:00:00 AM      439.95  Computer Equipment
06855      09/17/2001 12:00:00 AM      512.66
06863      09/21/2001 12:00:00 AM    1,896.00
06867                                  360.00  Lab Equipment
06869                                  495.17  Office Furniture
06871                                  195.00
06872      09/20/2001 12:00:00 AM    1,452.00  Computer Equipment
06873      09/20/2001 12:00:00 AM      447.95  Computer Equipment
06883      09/28/2001 12:00:00 AM    1,184.00  Computer Equipment
06884      09/28/2001 12:00:00 AM      447.95  Computer Equipment
06885      09/28/2001 12:00:00 AM      357.00  Lab Equipment
06886      09/28/2001 12:00:00 AM      205.00
06888      09/28/2001 12:00:00 AM      279.50  Lab Equipment
06893      11/01/2001 12:00:00 AM      739.00  Computer Software
06894      11/01/2001 12:00:00 AM    1,195.00  Computer Equipment
06895      11/01/2001 12:00:00 AM    1,195.00  Computer Equipment
06896      11/01/2001 12:00:00 AM    4,095.00  Computer Software
06897      11/07/2001 12:00:00 AM   29,121.98
06898      11/08/2001 12:00:00 AM      760.00
06900      11/16/2001 12:00:00 AM      483.65  Lab Equipment
06901                                3,372.00  Computer Equipment
06902                                  447.95  Computer Equipment
06903                                  539.75  Lab Equipment
06921      11/21/2001 12:00:00 AM      189.45
06922      11/21/2001 12:00:00 AM      189.45
06923      11/21/2001 12:00:00 AM      189.45
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
06924      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06925      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06926      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06927      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06928      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06929      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06930      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06931      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06932      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06933      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06934      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06935      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06936      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06937      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06938      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06939      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
06940      217022TG        WORKRITE KEYBOARD TRAY PACKAGE               No S/N                         25347
07410      MO6075          56K UST #5686 V.90 Ext Modem                 24LGG4QB1DQ4                   24701
07411      MO6075          56K UST #5686 V.90 Ext Modem                 24LGG4SB1W7U                   24701
07412      MO6075          56K UST #5686 V.90 Ext Modem                 24LGG4SB1WBK                   24701
07413      MO6075          56K UST #5686 V.90 Ext Modem                 24LGG4SB1WDB                   24701
07414      MO6075          56K UST #5686 V.90 Ext Modem                 24LGG4SB1WF4                   24701
07415      MO6075          56K UST #5686 V.90 Ext Modem                 24LGG4SB1WIA                   24701
08662      CBEBU4000       "DEMIDRY BLOTTING SYSTEM, 20X20CM"           No serial number               25542
08663      CBEBU4000       "DEMIDRY BLOTTING SYSTEM, 20X20CM"           No serial number               25542
08664      53106220        PIPET-AID/FALCON EXSPRESS                    50303                          25562
09159      5520            Wescor Vapro Vapor Pressure Osmometer        55201891                       25736
09174      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/047682                  25743
09184      6037985         Multiscan G420s 19 CRT Display               8010709                        25746
09278      6037985         Multiscan G420s 19 CRT Display               SO180107327                    25746
09283      6037985         Multiscan G420s 19 CRT Display               SO18010708A                    25746
09385      4611607         "Latitude C600, 850NHZ, PIII 14.1IN"         TWO9C748128001700415           24933
09386      6023585         "CPD-G400 19"" FD Trinitron CRT Monitor"     8070731                        24933
09387      58816121        MIXER/VORTEX/60HZ/120V/GENIE 2               13047                          24702
09599      58939884        STIRRER/MAGNETIC                             NO S/N                         24903
09600      20903879        Orbital Shaker Platform                      NO S/N                         24903
09626      3407936         Zip Drive 250 Removable Media Storage        7JBM26MOCT                     24834
09669      C6749AABA       HP OFFICE JET K60XI ALL IN ONE               SSGOC9C519S                    24836
09670      C6749AABA       HP OFFICE JET K60XI ALL IN ONE               SSGOCAC50NN                    24836
09672      C6749AABA       HP OFFICE JET K60XI ALL IN ONE               SSGOC9C519K                    24836
09673      C6749AABA       HP OFFICE JET K60XI ALL IN ONE               SSGOC9C519V                    24836
09676      MS651661        Frontpage 2002 Open Business License         no-serial-number               24839
09679      MS651661        Frontpage 2002 Open Business License         No S/N                         25035
09679A     MS651661        Frontpage 2002 Open Business License                                        24839
09679B     MS261601        License/Business-Open Viso Pro 2002                                         24839
09692      HP463294        HP OFFICE JET G95 ALL IN ONE                 SSGG18EOHSGS                   25265
09695      D8700802        VISIO PRO 2002 W9X/NT LICENSE ONLY           No S/N                         25269
09710      AO061258        ADOBE PHOTOSHOP 6.0 FOR WINDOWS              23101335                       25112

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
---------------------------------------------------------------
<S>      <C>                       <C>       <C>
06924    11/21/2001 12:00:00 AM      189.45
06925    11/21/2001 12:00:00 AM      189.45
06926    11/21/2001 12:00:00 AM      189.45
06927    11/21/2001 12:00:00 AM      189.45
06928    11/21/2001 12:00:00 AM      189.45
06929    11/21/2001 12:00:00 AM      189.45
06930    11/21/2001 12:00:OO AM      189.45
06931    11/21/2001 12:00:00 AM      189.45
06932    11/21/2001 12:00:00 AM      189.45
06933    11/21/2001 12:00:OO AM      189.45
06934    11/21/2001 12:00:00 AM      189.45
06935    11/21/2001 12:00:00 AM      189.45
06936    11/21/2001 12:00:00 AM      189.45
06937    11/21/2001 12:00:00 AM      189.45
06938    11/21/2001 12:00:00 AM      189.45
06939    11/21/2001 12:00:00 AM      189.45
06940    11/21/2001 12:00:00 AM      189.45
07410    08/16/2001 12.00:00 AM      109.00
07411    08/16/2001 12:00:00 AM      109.00
07412    08/16/2001 12:00:00 AM      109.00
07413    08/16/2001 12:00:00 AM      109.00
07414    08/16/2001 12:00:00 AM      109.00
07415    08/16/2001 12:00:00 AM      109.00
08662    12/13/2001 12:00:00 AM      547.00
08663    12/13/2001 12:00:00 AM      547.00
08664                                294.52  Lab Equipment
09159    01/16/2002 12:00:00 AM    4,895.00
09174                                499.00  Computer Equipment
09184                                409.00  Computer Equipment
09278                                409.00  Computer Equipment
09283                                409.00  Computer Equipment
09385    09/18/2001 12:00:00 AM        0.00  Computer Equipment
09386    09/18/2001 12:00:00 AM      457.95  Computer Equipment
09387    08/17/2001 12:00:00 AM      230.55  Lab Equipment
09599    09/13/2001 12:00:00 AM      150.00
09600    09/13/2001 12:00:00 AM      133.00
09626    09/06/2001 12:00:00 AM      269.00  Computer Hardware
09669    09/06/2001 12:00:00 AM      292.46
09670    09/06/2001 12:00:00 AM      292.46
09672    09/06/2001 12:00:00 AM      292.46
09673    09/06/2001 12:00:00 AM      292.46
09676    09/07/2001 12:00:00 AM        0.00
09679    10/03/2001 12:00:00 AM        0.00
09679A   09/07/2001 12:00:00 AM        0.00
09679B   09/07/2001 12:00:00 AM        0.00
09692    11/01/2001 12:00:00 AM      768.80
09695                                376.46  Computer Software
09710    10/11/2001 12:00:00 AM      595.58
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
09711      AO509142        Adobe Acrobat 5.0 Windows CD                 22001438                       25112
09712      NC9842775       PROBE FOR TISSUE TEAROR 11.5CM X 7MM         NO S/N #                       25129
09869      3407936         Zip Drive 250 Removable Media Storage        18THT-A00                      24995
09871      21811820        AQUASONIC ULTRASONIC CLEANER                 37950                          24783
09875      81031931        8103 Particle Counting System                FO1111                         25737
09876      D8700662        VISIO PROFESSIONAL 2002                      X08-07397                      25756
09877      22001438        ADOBE ACROBAT 5.0 95/98/NT 4/WME/2           KWW500R7399605-263             25484
09882      NIL971147       ENDNOTE V5 LAB PACK 5-USER WKSTATIONS        523500312                      25057
09900      18102385        Superloop 150 ml                             No S/N                         25659
09901      A0509142        ADOBE ACROBAT 5.0 WINDOWS CD                 509142                         25071
09905      D9158A          Internal Drive Capacity Upgrade LH3000       SG11903087                     25079
09906      P1166A          HOT-SWAP/182GH/ULTRA3/LVD                    4EGQK600                       25079
09907      P1166A          HOT-SWAP/182GH/ULTRA3/LVD                    4EGQE357                       25079
09908      P1166A          HOT-SWAP/182GH/ULTRA3/LVD                    4EGQM375                       25079
09909      P1166A          HOT-SWAP/182GH/ULTRA3/LVD                    4EGQL458                       25079
09910      P1166A          HOT-SWAP/182GH/ULTRA3/LVD                    4EGQN717                       25079
09911      P1166A          HOT-SWAP/182GH/ULTRA3/LVD                    4EGQM889                       25079
09917      HP683279        HP LASER JET 4100N                           SUSBDJ03901                    25668
09931      AERONCHAIR      AERON CHAIRS USED                            No S/N                         25711
09932      FURNITURE       AERON CHAIRS USED                            No serial number               25711
09936      2204472         LATITUDE C610 1.20GHZ PENTIUM III            TW-06E929-12800                25723
09937      2204472         LATITUDE C610 1.20GHZ PENTIUM III            HLNH511                        25724
09938      2204472         LATITUDE C610 1.20GHZ PENTIUM III            9LNH511                        25724
09942      UN7263STP       PUMP/VACUUM/KNF/17L/TWO-STAGE                1/606871                       25768
09943      2208316         1.70GHZ/400MHZ FRONT SIDE BUS P4 DELL 34     J5Y3611                        25755
09944      2208316         1.70GHZ/400MHZ FRONT SIDE BUS P4 DELL 34     D6Y3611                        25755
09945      2208316         1.70GHZ/400MHZ FRONT SIDE BUS P4 DELL 34     G5Y3611                        25755
09946      2208316         1.70GHZ/400MHZ FRONT SIDE BUS P4 DELL 34     C6Y3611                        25755
09953      PRISM3          Prism 3 for Windows                          G3-A20664-264                  26125
09954      PRISM3          Prism 3 for Windows                          G3-A20669-319                  26125
09955      PRISM3          Prism 3 for Windows                          G3-A20670-540                  26125
09956      PRISM3          Prism 3 for Windows                          G3-A20667-997                  26125
09957      PRISM3          Prism 3 for Windows                          G3-A20668-108                  26125
09958      PRISM3          Prism 3 for Windows                          G3-A20665-575                  26125
09959      PRISM3          Prism 3 for Windows                          G3-A20666-786                  26125
09982      RIM957          RIM 957 WIRELESS HANDHELD                    3117016221                     25177
09984      RIM957          RIM 957 WIRELESS HANDHELD                    3117016205                     25177
09987      RIM957          RIM 957 WIRELESS HANDHELD                    3117016177                     25177
09993-r    9A2526          Semi-Pneumatic Hand Truck                    no-serial-number               25726
09994-l    9A2526          Semi-Pneumatic Hand Truck                    No S/N                         25726
09994-r    9A2526          Semi-Pneumatic Hand Truck                    no-serial-number               25726
10449      AE123AWCAJG1B   Herman Miller Aeron Chair Large              No S/N                         25240
10493      LP925           Infocus Projector                            no-serial-number               25179
10541      AE123AFB        Herman Miller Aeron Chair Black              No S/N                         25263
10596      TRHWM           ALLSTEEL HIGH BACK TASK CHAIRS               DXJJD4                         25529
10610      TRHWM           ALLSTEEL HIGH BACK TASK CHAIRS               DTJJD4                         25529
10612      TRHWM           ALLSTEEL HIGH BACK TASK CHAIRS               No S/N                         25529
10641      TRHWM           ALLSTEEL HIGH BACK TASK CHAIRS               No S/N                         25529

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
---------------------------------------------------------------
<S>        <C>                      <C>        <C>
09711      10/11/2001 12:00:00 AM      215.08  Computer Software
09712      10/15/2001 12:00:00 AM      415.00
09869      09/26/2001 12:00:00 AM      249.00  Computer Hardware
09871      08/28/2001 12:00:00 AM      269.10
09875      01/16/2002 12:00:00 AM   22,800.00
09876                                  445.00
09877                                  239.00  Computer Equipment
09882      10/05/2001 12:00:00 AM      663.99
09900                                  795.00
09901      10/08/2001 12:00:00 AM      219.99
09905      10/08/2001 12:00:00 AM      449.00
09906      10/08/2001 12:00:00 AM      459.00
09907      10/08/2001 12:00:00 AM      459.00
09908      10/08/2001 12:00:00 AM      459.00
09909      10/08/2001 12:00:00 AM      459.00
09910      10/08/2001 12:00:00 AM      459.00
09911      10/08/2001 12:00:00 AM      459.00
09917                                1,519.00
09931      01/10/2002 12:00:00 AM      400.00
09932      01/10/2002 12:00:00 AM      400.00
09936                                2,864.00  Computer Equipment
09937                                2,864.00  Computer Equipment
09938                                2,864.00  Computer Equipment
09942      01/22/2002 12:00:00 AM    1,560.00
09943                                1,088.00
09944                                1,088.00
09945                                1,088.00
09946                                1,088.00
09953      03/11/2002 12:00:00 AM      321.75
09954      03/11/2002 12:00:00 AM      321.75
09955      03/11/2002 12:00:00 AM      321.75
09956      03/11/2002 12:00:00 AM      321.75
09957      03/11/2002 12:00:00 AM      321.75
09958      03/11/2002 12:00:00 AM      321.75
09959      03/11/2002 12:00:00 AM      321.75
09982      10/22/2001 12:00:00 AM      469.00  Computer Equipment
09984      10/22/2001 12:00:00 AM      469.00  Computer Equipment
09987      10/22/2001 12:00:00 AM      469.00  Computer Equipment
09993-r                                107.00
09994-l                                107.00
09994-r                                107.00
10449                                  635.00
10493      10/19/2001 12:00:00 AM    6,112.05  Office Equipment
10541                                  689.23
10596                                  295.00
10610                                  295.00
10612                                  295.00
10641                                  295.00
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
10699      9A47439         Dewalt Drill                                 237300                         25820
10713      F-M17D          Delete Standard 17' Monitor Upgrade          1Y37088NF                      25983
10737      G1327A          1100 Thermostated Autosampler                DE13200766                     26226
10743      80064974        VACUUM PUMP KNF                              1/610399                       26269
11354      58816121        MIXER/VORTEX/60HZ/120V/GENIE 2               17958                          26708
11378      37000-700       VWR Galaxy Minicentrifuge                    C-1213                         26986
12673      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18307                          26006
12674      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18336                          26006
12675      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18308                          26006
12676      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18286                          26006
12677      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18260                          26006
12678      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18266                          26006
12679      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18276                          26006
12680      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18257                          26006
12681      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18274                          26006
12682      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18315                          26006
12683      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18275                          26006
12684      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18278                          26006
12685      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18268                          26006
12686      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18287                          26006
12687      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18285                          26006
12688      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18265                          26006
12689      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18277                          26006
12690      3110            INCUBATOR/FORMA/MDL# 3110/SC W/J/CO2         18264                          26006
12691      ELX808RIU       Ultra Microplate Reader                      159695                         26007
12700      26404843        HEAT GUN, HEATER/DRYER, MASTER APPLIANCE     no-serial-number               26040
12701      33994000        HOTPLATE/STIRRER/IKAMAG RCT BASIC            03.120694                      26066
12702      E46604BB90T     Task Chair Hon 6604                          DS1Z6S                         26049
12703      J4169AABA       Jet Direct 610N Print Server INT EIO         J4169-61002                    26043
12704      AO482015        Adobe Illustrator 10.0                       1034-1231-1930-2850-4665-3330  26052
12710      D8700662        VISIO PROFESSIONAL 2002                      No S/N                         26106
12740      AE123AWB        "Herman Miller Aeron Chair, Size B"          No S/N                         26237
12743      AE123AFC        Chair Aeron AJ Gl BB 3D 01 258               No S/N                         26237
12744      BK366802        CENTRIFUGE/ALGRA-A6/60HZ/120V/NFRG           ALS02C20                       26169
12745      BK366650        "GH-3.8A Horizontal Rotor, Bckmn Cltr"       02U35365                       26169
12757      PRS26WIN        RS ORACLE INTERFACE WIN 6.2                  No S/N                         26204
12758      PRS26WIN        RS ORACLE INTERFACE WIN 6.2                  No S/N                         26204
12759      PRS26WIN        RS ORACLE INTERFACE WIN 6.2                  No S/N                         26204
12760      PRS26WIN        RS ORACLE INTERFACE WIN 6.2                  No S/N                         26204
12766      PINGPONG TABLE  Quickplay 1 Table Tennis                     0417112                        26232
12767      PINGPONG TABLE  Quickplay 1 Table Tennis                     0417112                        26232
12770      G1322A          1100 Vacuum Degreaser                        JP05032104                     26226
12771      G1312A031       Agilent 110 Binary Pump with Option 031      14909765                       26226
12772      G2185AA         LICENSE/SOFTWARE/CHEMSTN/HPLD/3D/0700        BN31244D09                     26226
12773      G1316A055       Agilent 1100 Thermo Column Comp              DE11107694                     26226
12774      G1316A055       Agilent 1100 Thermo Column Comp              DE14924626                     26226
12775      G1314A018       Agilent 110 Variable Wavelength Detector     JP11615842                     26226
12776      G1321A          1100 Flourescence Detector                   DE14903725                     26226

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
---------------------------------------------------------------
<S>        <C>                      <C>        <C>
10699      01/28/2002 12:00:00 AM      250.00
10713                                  300.00
10737                               13,820.00
10743                                1,385.00  LAB EQUIPMENT
11354                                  256.60  Lab Equipment
11378                                  292.50
12673      03/01/2002 12:00:00 AM    3,408.00
12674      03/01/2002 12:00:00 AM    3,408.00
12675      03/01/2002 12:00:00 AM    3,408.00
12676      03/01/2002 12:00:00 AM    3,408.00
12677      03/01/2002 12:00:00 AM    3,408.00
12678      03/01/2002 12:00:00 AM    3,408.00
12679      03/01/2002 12:00:00 AM    3,408.00
12680      03/01/2002 12:00:00 AM    3,408.00
12681      03/01/2002 12:00:00 AM    3,408.00
12682      03/01/2002 12:00:00 AM    3,408.00
12683      03/01/2002 12:00:00 AM    3,408.00
12684      03/01/2002 12:00:00 AM    3,408.00
12685      03/01/2002 12:00:00 AM    3,408.00
12686      03/01/2002 12:00:00 AM    3,408.00
12687      03/01/2002 12:00:00 AM    3,408.00
12688      03/01/2002 12:00:00 AM    3,408.00
12689      03/01/2002 12:00:00 AM    3,408.00
12690      03/01/2002 12:00:00 AM    3,408.00
12691                                9,500.00  Lab Equipment
12700      02/27/2002 12:00:00 AM       86.55
12701                                  562.60
12702      02/27/2002 12:00:00 AM      242.03
12703      02/27/2002 12:00:00 AM      319.00
12704      02/27/2002 12:00:00 AM      141.99
12710                                  445.00
12740                                  635.38
12743                                  689.23
12744      03/19/2002 12:00:00 AM    4,800.00
12745      03/19/2002 12:00:00 AM    3,810.00
12757                                2,000.00  COMPUTER SOFTWARE
12758                                2,000.00  COMPUTER SOFTWARE
12759                                1,400.00  COMPUTER SOFTWARE
12760                                1,400.00  COMPUTER SOFTWARE
12766                                  349.00
12767                                  349.00
12770      03/28/2002 12:00:00 AM    2,614.00
12771      03/28/2002 12:00:00 AM   13,397.00
12772      03/28/2002 12:00:00 AM    1,312.00
12773      03/28/2002 12:00:00 AM   13,820.00
12774      03/28/2002 12:00:00 AM    4,449.00
12775      03/28/2002 12:00:00 AM    6,457.00
12776      03/28/2002 12:00:00 AM   10,190.00
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
12777      47728930        SAFETY VAP ROTARY EVAPORATORTS R 124         412733120001                   26263
12790      252050          MMD DREAMWEAVER 4 WIN                        HS45EE-5030480010              26327
12818      MS262008        Visio STD 2002 Open Business License         n/a                            26220
12859      ESS48ABCL       Metal Bookshelf - Putty                      DXVZ8D                         26296
12861      CG199020        RET Control Visc Hot Plate Stirrer           03.122395                      26372
12862      CG199020        RET Control Visc Hot Plate Stirrer           03.122399                      26372
12863      CG199020        RET Control Visc Hot Plate Stirrer           03.122403                      26372
12864      CG199020        RET Control Visc Hot Plate Stirrer           03.122397                      26372
12865      P20             Pipetman/variable volume/l-20ul              F144651                        26371
12867      P1000           Pipetman/Variable Volume/100-1000ul          F144654                        26371
12870      BK367160        MICOFUGE 18/BECKMAN/W-24PLACE ROTOR          MFA01J006                      26398
12871      MIA000001662    Pallet Jack                                  No S/N                         26370
12885      57621           Manual Sample Injector # 7725i               1102                           26430
12888      279808          Adobe Acrobat 5.0 Windows CD                 No S/N                         26353
12889      279808          Adobe Acrobat 5.0 Windows CD                 No S/N                         26353
12890      279808          Adobe Acrobat 5.0 Windows CD                 No S/N                         26353
12891      279808          Adobe Acrobat 5.0 Windows CD                 No S/N                         26353
12892      134586          HP 9100C Digital Sender Ethernet             JPZ6001275                     26353
12893      HP450671        HP DESKJET 990CXI                            SMY1CR1C081                    26363
12912      2204472         LATITUDE C610 1.20GHZ PENTIUM III            5LXRD11                        26336
12974      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               27XSD11                        26336
12976      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               31XSD11                        26336
12977      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               8BXSD11                        26336
12978      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               HBXSD11                        26336
12979      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               58XSD11                        26336
12981      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               H1XSD11                        26336
12992      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               7BXSD11                        26336
12993      2208315         1.80 GHZ/400MHZ FRONT SIDE BUS               71XSD11                        26336
13002      148289          Beckman 3 Meter Orca Bundle                  No S/N                         26429
13003      148289          Beckman 3 Meter Orca Bundle                  No S/N                         26429
13004      357376          Wizard Software                              No S/N                         26471
13019      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/083131                  26523
13028      HP747961        HP Business Inkjet 2280TN-6                  SMY22G3108N                    26551
13029      D8700662        VISIO PROFESSIONAL 2002                      X08-01811                      26552
13030      2032            8 Channel Electric Pipettor                  139113                         26549
13035      19758020        STAINLESS STEEL CART                         163-242                        26597
13038      33994070        Overhead Stirrer                             03.127521                      26597
13042      384501          Red Hat Linux V7.3 Pro                       No S/N                         26627
13043      384501          Red Hat Linux V7.3 Pro                       No S/N                         26627
13044      384501          Red Hat Linux V7.3 Pro                       No S/N                         26627
13045      340130          HP 36.4gb Ultra Wide Scsi III                No S/N                         26627
13046      340130          HP 36.4gb Ultra Wide Scsi III                No S/N                         26627
13047      316426          HP NETSERVER LP1000R                         US21841319                     26627
13048      206358          HP Netserver 256mb 133mz                     No S/N                         26627
13049      340130          HP 36.4gb Ultra Wide Scsi III                No S/N                         26627
13050      340130          HP 36.4gb Ultra Wide Scsi III                No S/N                         26627
13051      206359          512MB MEMUPG LP 2000                         No S/N                         26627
13052      206359          512MB MEMUPG LP 2000                         No S/N                         26627

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
----------------------------------------------------------------
<S>        <C>                      <C>        <C>
12777                                4,904.50  LAB EQUIPMENT
12790                                  259.96  COMPUTER SOFTWARE
12818      03/25/2002 12:00:00 AM      150.21
12859                                  156.00  Office Furniture
12861                                1,403.56
12862                                1,403.96
12863                                1,403.96
12864                                1,403.96
12865                                  244.50
12867                                  244.50
12870                                1,970.26
12871                                  399.00
12885                                  815.00  LAB EQUIPMENT
12888                                  213.00  Computer Software
12889                                  213.00  Computer Software
12890                                  213.00  Computer Software
12891                                  213.00  Computer Software
12892                                2,800.00  Computer Equipment
12893                                  285.37  Computer Equipment
12912                                2,343.00  Computer Equipment
12974                                1,088.00  Computer Hardware
12976                                1,088.00  Computer Hardware
12977                                1,088.00  Computer Hardware
12978                                1,088.00  Computer Hardware
12979                                1,088.00  Computer Hardware
12981                                1,088.00  Computer Hardware
12992                                1,088.00  Computer Hardware
12993                                1,088.00  Computer Hardware
13002                               57,700.00
13003                               57,700.00
13004                                3,386.00  COMPUTER SOFTWARE
13019                                  499.00  Computer Equipment
13028                                  946.08  COMPUTER EQUIPMENT
13029                                  439.00
13030                                1,795.00  LAB EQUIPMENT
13035                                  399.60  LAB EQUIPMENT
13038                                1,165.50
13042                                  165.00  COMPUTER EQUIPMENT
13043                                  165.00  COMPUTER EQUIPMENT
13044                                  165.00  COMPUTER EQUIPMENT
13045                                  980.00  COMPUTER EQUIPMENT
13046                                  980.00  COMPUTER EQUIPMENT
13047                                1,980.00  COMPUTER EQUIPMENT
13048                                  215.00  COMPUTER EQUIPMENT
13049                                  980.00  COMPUTER EQUIPMENT
13050                                  980.00  COMPUTER EQUIPMENT
13051                                  430.00  COMPUTER EQUIPMENT
13052                                  430.00  COMPUTER EQUIPMENT
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                       PO NUM
-------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
13053      206359          512MB MEMUPG LP 2000                         No S/N                         26627
13054      206359          512MB MEMUPG LP 2000                         No S/N                         26627
13055      365908          HP NS LP2000                                 No S/N                         26627
13056      365908          HP NS LP2000                                 No S/N                         26627
13057      365031          HP Netserver LP1000R 7/1400                  US21941097                     26627
13058      365031          HP Netserver LP1000R 7/1400                  US21941088                     26627
13059      VH3036WOPT      VH Microscopic Workstation 30x36             8156                           26633
13060      2284100192      SIL-HTc High Throughout Autosampler          L20023950007                   26645
13061      2284100192      SIL-HTc High Throughout Autosampler          L20023950005                   26645
13063      58810367        Varimix Platform Mixer                       1108020322967                  26654
13064      CG1950100       Benchtop Process Reactor Stand               No S/N                         26657
13080      PRISM3          Prism 3 for Windows                          No S/N                         26433
13081      PRISM3          Prism 3 for Windows                          No S/N                         26433
13082      PRISM3          Prism 3 for Windows                          No S/N                         26433
13083      PRISM3          Prism 3 for Windows                          No S/N                         26433
13084      PRISM3          Prism 3 for Windows                          No S/N                         26433
13085      PRISM3          Prism 3 for Windows                          No S/N                         26433
13086      PRISM3          Prism 3 for Windows                          No S/N                         26433
13087      PRISM3          Prism 3 for Windows                          No S/N                         26433
13088      PRISM3          Prism 3 for Windows                          No S/N                         26433
13089      PRISM3          Prism 3 for Windows                          No S/N                         26433
13090      PRISM3          Prism 3 for Windows                          No S/N                         26433
13095      R1M957          RIM 957 WIRELESS HANDHELD                    031/17/086300                  26665
13096      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/086322                  26665
13097      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/086292                  26665
13100      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/086314                  26665
13123      VBQOPT          Quan Optimize Software License               W2ENEW077M                     26723
13127      55702105        Freezer, Upright, 24cuft 115/60              UO8M-589700-UM                 26791
13128      55702105        Freezer, Upright, 24cuft 115/60              UO8M-589699-UM                 26791
13129      55703078        REFRIGERATOR/GEN/SOLDR VWR/1 15V-29CF        UO2M589203TM                   26791
13131      55702097        Freezer Upright/24 cu ft, -40 degree 115/60  NO S/N                         26751
13137      55703430        "FREEZER, UPRIGHT, 20.9CF"                   UO1M588958TM                   26791
13138      55703430        "FREEZER, UPRIGHT, 20.9CF"                   UO1M588956TM                   26791
13139      55703430        "FREEZER, UPRIGHT, 20.9CF"                   UO1M588957TM                   26791
13140      387162          HUMMINGBIRD EXCEED 7.1.1 5U                  No S/N                         26799
13161      680409271132    Scanjet 7450C FLTB 2400DPI 48BIT C           CN23NS0636                     26827
13162      207328          HP DeskJet 1220cxi                           SG243130WO                     26261
13167      RIM957          RIM 957 WIRELESS HANDHELD                    031/17/089653                  26873
13168      U7730020        Dispensing Drive 10-600RPM                   D02001401                      26892
13172      355866          Sony Multiscan CPD-G520P                     S01-8004615-A                  26903
13179      AB0950          ALPS 300 Plate Sealer                                                       26932
13192      246042          18.2GB U160 SCSI SCA HD HS LVD HH 150000     3CCOS1WR                       26959
13193      246042          18.2GB U160 SCSI SCA HD HS LVD HH 150000     3EVOH298                       26959
13194      246042          18.2GB U160 SCSI SCA HD HS LVD HH 150000     3CCON55S                       26959
13195      246042          18.2GB U160 SCSI SCA HD HS LVD HH 150000     3EVOE4AH                       26959
13198      37000-700       VWR Galaxy Minicentrifuge                    C-1213                         26986
13243      272034          HP OFFICEJET V40XI                           MY20DF5282                     27165
13269      U3266118        Air/Nitrogen Gas Mass/Flow Controller        72472-1                        27038

<CAPTION>
ASSET NO.  PO DATE                 UNIT COST   CLASS
-----------------------------------------------------------------
<S>        <C>                      <C>        <C>
13053                                  430.00  COMPUTER EQUIPMENT
13054                                  430.00  COMPUTER EQUIPMENT
13055                                1,100.00
13056                                1,100.00
13057                                2,550.00  COMPUTER EQUIPMENT
13058                                2,550.00  COMPUTER EQUIPMENT
13059                                3,055.00
13060                               39,174.50
13061                               39,174.50
13063                                  464.10  LAB EQUIPMENT
13064                                1,350.00
13080                                  297.00
13081                                  297.00
13082                                  297.00
13083                                  297.00
13084                                  297.00
13085                                  297.00
13086                                  297.00
13087                                  297.00
13088                                  297.00
13089                                  297.00
13090                                  297.00
13095                                  499.00  Computer Equipment
13096                                  499.00  Computer Equipment
13097                                  499.00  Computer Equipment
13100                                  499.00  Computer Equipment
13123                                1,900.00
13127                                8,718.75
13128                                8,718.75
13129                                2,693.33  Lab Equipment
13131                                7,463.85
13137                                1,121.33  Lab Equipment
13138                                1,121.33  Lab Equipment
13139                                1,121.33  Lab Equipment
13140                                1,575.00
13161                                  584.00
13162                                  357.00
13167                                  499.00  Computer Equipment
13168                                1,250.00
13172                                  705.00
13179                               24,000.00
13192                                  480.00  COMPUTER EQUIPMENT
13193                                  480.00  COMPUTER EQUIPMENT
13194                                  480.00  COMPUTER EQUIPMENT
13195                                  480.00  COMPUTER EQUIPMENT
13198                                  292.50
13243                                  195.00  COMPUTER EQUIPMENT
13269                                  940.00  Lab Equipment
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
ASSET NO.  ITEM#           DESCRIPTION                                  SERIAL #                      PO NUM
------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>                                          <C>                            <C>
13289      80064972        Vacuum Pump,Teflon Diagram                   1/57/1936                      26853

<CAPTION>
ASSET NO.  PO DATE         UNIT COST CLASS
------------------------------------------
<S>        <C>              <C>
13298                       1,350.68
</TABLE>

<PAGE>

                                   EXHIBIT C-2

                               TO LEASE AGREEMENT

                        1997 EDITION - ELECTRONIC FORMAT

                                               AIA DOCUMENT A111 - 1997

Standard Form of Agreement Between Owner and Contractor
where the basis for payment is the COST OF THE WORK PLUS A FEE with a negotiated
Guaranteed Maximum Price

AGREEMENT made as of the day of in the year
(In words, indicate day, month and year)

BETWEEN the Owner:
(Name, address and other information)

and the Contractor:
(Name, address and other information)

The Project is:
(Name and location)

The Architect is:
(Name, address and other information)

The Owner and Contractor agree as follows.

ARTICLE 1      THE CONTRACT DOCUMENTS
     The Contract Documents consist of this Agreement, Conditions of the
     Contract (General, Supplementary and other Conditions), Drawings,
     Specifications, Addenda issued prior to execution of this Agreement, other
     documents listed in this Agreement and Modifications issued after execution
     of this Agreement; these form the Contract, and are as fully a part of the
     Contract as if attached to this Agreement or repeated herein. The Contract
     represents the entire and integrated agreement between the parties hereto
     and supersedes prior negotiations, representations or agreements, either
     written or oral. An enumeration of the Contract Documents, other than
     Modifications, appears in Article 15. If anything in the other Contract
     Documents is inconsistent with this Agreement, this Agreement shall govern.

ARTICLE 2      THE WORK OF THIS CONTRACT
     The Contractor shall fully execute the Work described in the Contract
     Documents, except to the extent specifically indicated in the Contract
     Documents to be the responsibility of others.

ARTICLE 3      RELATIONSHIP OF THE PARTIES
     The Contractor accepts the relationship of trust and confidence established
     by this Agreement and covenants with the Owner to cooperate with the
     Architect and exercise the Contractor's skill and judgment in furthering
     the interests of the Owner; to furnish efficient business administration
     and supervision; to furnish at all times an adequate supply of workers and
     materials; and to perform the Work in an expeditious and economical manner
     consistent with the Owner's interests. The Owner agrees to furnish and
     approve, in a timely manner, information required by the Contractor and to
     make payments to the Contractor in accordance with the requirements of the
     Contract Documents.

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA[ILLEGIBLE]
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               1

<PAGE>

ARTICLE 4      DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

     4.1       The date of commencement of the Work shall be the date of this
     Agreement unless a different date is stated below or provision is made for
     the date to be fixed in a notice to proceed issued by the Owner.
     (Insert the date of commencement, if it differs from the date of this
     Agreement or, if applicable, state that the date will be fixed in a notice
     to proceed.)

     If, prior to commencement of the Work, the Owner requires time to file
     mortgages, mechanic's liens and other security interests, the Owner's time
     requirement shall be as follows:

     4.2       The Contract Time shall be measured from the date of
     commencement.

     4.3       The Contractor shall achieve Substantial Completion of the entire
     Work not later than days from the date of commencement, or as follows:
     (Insert number of calendar days. Alternatively, a calendar date may be used
     when coordinated with the date of commencement. Unless stated elsewhere in
     the Contract Documents, insert any requirements for earlier Substantial
     Completion of certain portions of the Work.)

     , subject to adjustments of this Contract Time as provided in the Contract
     Documents.
     (Insert provisions, if any, for liquidated damages relating to failure to
     complete on time, or for bonus payments for early completion of the Work.)

ARTICLE 5      BASIS FOR PAYMENT
     5.1       CONTRACT SUM
     5.1.1     The Owner shall pay the Contractor the Contract Sum in current
     funds for the Contractor's performance of The Contract. The Contract Sum is
     the Cost of the Work as defined in Article 7 plus the Contractor's Fee.

     5.1.2     The Contractor's Fee is: 4% of the Cost of the Work
     (State a lump sum, percentage of Cost of the Work or other provision for
     determining the Contractor's Fee, and describe the method of adjustment of
     the Contractor's Fee for changes in the Work.)

     5.2       GUARANTEED MAXIMUM PRICE
     5.2.1     The sum of the Cost of the Work and the Contractor's Fee is
     guaranteed by the Contractor not to exceed Dollars ($ ), subject
     to additions and deductions by Change Order as provided in the
     Contract Documents. Such maximum sum is referred to in the
     Contract Documents as the Guaranteed Maximum Price. Costs which
     would cause the Guaranteed Maximum Price to be exceeded shall be
     paid by the Contractor without reimbursement by the Owner.
     (Insert specific provisions if the Contractor is to participate in any
     savings.)

     5.2.2     The Guaranteed Maximum Price is based on the following
     alternates, if any, which are described in the Contract Documents
     and are hereby accepted by the Owner:
     (State the numbers or other identification of accepted alternates. If
     decisions on other alternates are to be made by the Owner subsequent to the
     execution of this Agreement, attach a schedule of such other alternates
     showing the amount for each and the date when the amount expires.)

     5.2.3     Unit prices, if any, are as follows:

     5.2.4     Allowances, if any, are as follows:
     (Identify and state the amounts of any allowances, and state whether they
     include labor, materials, or both.)

     5.2.5     Assumptions, if any, on which the Guaranteed Maximum Price is
     based are as follows:

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               2

<PAGE>

     5.2.6     To the extent that the Drawings and Specifications are
     anticipated to require further development by the Architect, the Contractor
     has provided in the Guaranteed Maximum Price for such further development
     consistent with the Contract Documents and reasonably inferable therefrom.
     Such further development does not include such things as changes in scope,
     systems, kinds and quality of materials, finishes or equipment, all of
     which, if required, shall be incorporated by Change Order.

ARTICLE 6      CHANGES IN THE WORK
     6.1       Adjustments to the Guaranteed Maximum Price on account of changes
     in the Work may be determined by any of the methods listed in AIA Document
     A201-1997 as amended.

     6.2       In calculating adjustments to subcontracts (except those awarded
     with the Owner's prior consent on the basis of cost plus a fee), the terms
     "cost" and "fee" as used in Clause 7.3.3.3 of AIA Document A201-1997 and
     the terms "costs" and "a reasonable allowance for overhead and profit" as
     used in Subparagraph 7.3.6 of AIA Document A201-1997 shall have the
     meanings assigned to them in AIA Document A201-1997 and shall not be
     modified by Articles 5,7 and 8 of this Agreement. Adjustments to
     subcontracts awarded with the Owner's prior consent on the basis of cost
     plus a fee shall be calculated in accordance with the terms of those
     subcontracts.

     6.3       In calculating adjustments to the Guaranteed Maximum Price, the
     terms "cost" and "costs" as used in the above-referenced provisions of AIA
     Document A201-1997 shall mean the Cost of the Work as defined in Article 7
     of this Agreement and the terms "fee" and "a reasonable allowance for
     overhead and profit" shall mean the Contractor's Fee as defined in
     Subparagraph 5.1.2 of this Agreement.

     6.4       If no specific provision is made in Paragraph 5.1 for adjustment
     of the Contractor's Fee in the case of changes in the Work, or if the
     extent of such changes is such, in the aggregate, that application of the
     adjustment provisions of Paragraph 5.1 will cause substantial inequity to
     the Owner or Contractor, the Contractor's Fee shall be equitably adjusted
     on the basis of the Fee established for the original Work, and the
     Guaranteed Maximum Price shall be adjusted accordingly.

ARTICLE 7      COSTS TO BE REIMBURSED
     7.1       COST OF THE WORK
     The term Cost of the Work shall mean costs necessarily incurred by the
     Contractor in the proper performance of the Work. Such costs shall be at
     rates not higher than the standard paid at the place of the Project except
     with prior consent of the Owner. The Cost of the Work shall include only
     the items set forth in this Article 7.

     7.2       LABOR COSTS
     7.2.1     Wages of construction workers directly employed by the Contractor
     to perform the construction of the Work at the site or, with the Owner's
     approval, at off-site workshops.

     7.2.2     Wages or salaries of the Contractor's supervisory and
     administrative personnel when stationed at the site with the Owner's
     approval.
     (If it is intended that the wages or salaries of certain personnel
     stationed at the Contractor's principal or other offices shall be included
     in the Cost of the Work, identify in Article 14 the personnel to be
     included and whether for all or only part of their time, and the rates at
     which their time will be charged to the Work.)

     7.2.3     Wages and salaries of the Contractor's supervisory or
     administrative personnel engaged, at factories, workshops or on the road,
     in expediting the production or transportation of materials or equipment
     required for the Work, but only for that portion of their time required for
     the Work of supervisory and administrative personnel, not to exceed __% of
     overall wages and salaries of supervisory and administrative personnel

     7.2.4     Costs paid or incurred by the Contractor for taxes, insurance,
     contributions, assessments and benefits required by law or collective
     bargaining agreements and, for personnel not covered by such agreements,
     customary benefits such as sick leave, medical and health

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               3

<PAGE>

     benefits, holidays, vacations and pensions, provided such costs are based
     on wages and salaries included in the Cost of the Work under Subparagraphs
     7.2.1 through 7.2.3.

     7.3       SUBCONTRACT COSTS
     7.3.1     Payments made by the Contractor to Subcontractors in accordance
     with the requirements of the subcontracts.

     7.4       COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED
     CONSTRUCTION
     7.4.1     Costs, including transportation and storage, of materials and
     equipment incorporated or to be incorporated in the completed
     construction.

     7.4.2     Costs of materials described in the preceding Subparagraph 7.4.1
     in excess of those actually installed to allow for reasonable waste and
     spoilage. Unused excess materials, if any, shall become the Owner's
     property at the completion of the Work or, at the Owner's option, shall be
     sold by the Contractor. Any amounts realized from such sales shall be
     credited to the Owner as a deduction from the Cost of the Work.

     7.5       COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND
     RELATED ITEMS
     7.5.1     Costs, including transportation and storage, installation,
     maintenance, dismantling and removal of materials, supplies, temporary
     facilities, machinery, equipment, and hand tools not customarily owned by
     construction workers, that are provided by the Contractor at the site and
     fully consumed in the performance of the Work; and cost (less salvage
     value) of such items if not fully consumed, whether sold to others or
     retained by the Contractor. Cost for items previously used by the
     Contractor shall mean fair market value.

     7.5.2     Rental charges for temporary facilities, machinery, equipment,
     and hand tools not customarily owned by construction workers that are
     provided by the Contractor at the site, whether rented from the Contractor
     or others, and costs of transportation, installation, minor repairs and
     replacements, dismantling and removal thereof. Rates and quantities of
     equipment rented shall be subject to the Owner's prior approval.

     7.5.3     Costs of removal of debris from the site.

     7.5.4     Costs of document reproductions, facsimile transmissions and
     long-distance telephone calls, postage and parcel delivery charges,
     telephone service at the site and reasonable petty cash expenses of the
     site office.

     7.5.5     That portion of the reasonable expenses of the Contractor's
     personnel incurred while traveling in discharge of duties connected with
     the Work.

     7.5.6     Costs of materials and equipment suitably stored off the site at
     a mutually acceptable location, if approved in advance by the Owner.

     7.6       MISCELLANEOUS COSTS
     7.6.1     That portion of insurance and bond premiums that can be directly
     attributed to this Contract:

     7.6.2     Sales, use or similar taxes imposed by a governmental authority
     that are related to the Work.

     7.6.3     Fees and assessments for the building permit and for other
     permits, licenses and inspections for which the Contractor is required by
     the Contract Documents to pay.

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               4

<PAGE>

     7.6.4     Fees of laboratories for tests required by the Contract
     Documents, except those related to defective or nonconforming Work for
     which reimbursement is excluded by Subparagraph 13.5.3 of AIA Document
     A201-1997 or other provisions of the Contract Documents, and which do not
     fall within the scope of Subparagraph 7.7.3.

     7.6.5     Royalties and license fees paid for the use of a particular
     design, process or product required by the Contract Documents; the cost of
     defending suits or claims for infringement of patent rights arising from
     such requirement of the Contract Documents; and payments made in accordance
     with legal judgments against the Contractor resulting from such suits or
     claims and payments of settlements made with the Owner's consent. However,
     such costs of legal defenses, judgments and settlements shall not be
     included in the calculation of the Contractor's Fee or subject to the
     Guaranteed Maximum Price. If such royalties, fees and costs are excluded by
     the last sentence of Subparagraph 3.17.1 of AIA Document A201-1997 or other
     provisions of the Contract Documents, then they shall not be included in
     the Cost of the Work.

     7.6.6     Data processing costs related to the Work.

     7.6.7     Deposits lost for causes other than the Contractor's negligence
     or failure to fulfill a specific responsibility to the Owner as set forth
     in the Contract Documents.

     7.6.8     Legal, mediation and arbitration costs, including attorneys'
     fees, other than those arising from disputes between the Owner and
     Contractor, reasonably incurred by the Contractor in the performance of the
     Work and with the Owner's prior written approval; which approval shall not
     be unreasonably withheld.

     7.6.9     Expenses incurred in accordance with the Contractor's standard
     personnel policy for relocation and temporary living allowances of
     personnel required for the Work, if approved by the Owner.

     7.7       OTHER COSTS AND EMERGENCIES
     7.7.1     Other costs incurred in the performance of the Work if and to the
     extent approved in advance in writing by the Owner.

     7.7.2     Costs due to emergencies incurred in taking action to prevent
     threatened damage, injury or loss in case of an emergency affecting the
     safety of persons and property, as provided in Paragraph 10.6 of AIA
     Document A201-1997.

     7.7.3     Costs of repairing or correcting damaged or nonconforming Work
     executed by the Contractor, Subcontractors or suppliers, provided that such
     damaged or nonconforming Work was not caused by negligence or failure to
     fulfill a specific responsibility of the Contractor and only to the extent
     that the cost of repair or correction is not recoverable by the Contractor
     from insurance, sureties, Subcontractors or suppliers.

ARTICLE 8 COSTS NOT TO BE REIMBURSED
     8.1       The Cost of the Work shall not include:

     8.1.1     Salaries and other compensation of the Contractor's personnel
     stationed at the Contractor's principal office or offices other than the
     site office, except as specifically provided in Subparagraphs 7.2.2 and
     7.2.3 or as may be provided in Article 14.

     8.1.2     Expenses of the Contractor's principal office and offices other
     than the site office.

     8.1.3     Overhead and general expenses, except as may be expressly
     included in Article 7.

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               5

<PAGE>

     8.1.4     The Contractor's capital expenses, including interest on the
     Contractor's capital employed for the Work.

     8.1.5     Rental costs of machinery and equipment, except as specifically
     provided in Subparagraph 7.5.2.

     8.1.6     Except as provided in Subparagraph 7.7.3 of this Agreement, costs
     due to the negligence or failure to fulfill a specific responsibility of
     the Contractor, Subcontractors and suppliers or anyone directly or
     indirectly employed by any of them or for whose acts any of them may be
     liable.

     8.1.7     Any cost not specifically and expressly described in Article 7.

     8.1.8     Costs, other than costs included in Change Orders approved by the
     Owner, that would cause the Guaranteed Maximum Price to be exceeded.

ARTICLE 9      DISCOUNTS, REBATES AND REFUNDS
     9.1       Trade discounts, rebates, refunds and amounts received from sales
     of surplus materials and equipment shall accrue to the Owner, and the
     Contractor shall make provisions so that they can be secured.

     9.2       Amounts that accrue to the Owner in accordance with the
     provisions of Paragraph 9.1 shall be credited to the Owner as a deduction
     from the Cost of the Work.

ARTICLE 10     SUBCONTRACTS AND OTHER AGREEMENTS
     10.1      Those portions of the Work that the Contractor does not
     customarily perform with the Contractor's own personnel shall be performed
     under subcontracts or by other appropriate agreements with the Contractor.
     The Owner may designate specific persons or entities from whom the
     Contractor shall obtain bids. The Contractor shall obtain bids from
     Subcontractors and from suppliers of materials or equipment fabricated
     especially for the Work and shall deliver such bids to the Owner. The Owner
     shall then determine, with the advice of the Contractor and the Architect,
     which bids will be accepted. The Contractor shall not be required to
     contract with anyone to whom the Contractor has reasonable objection.

     10.2      If a specific bidder among those whose bids are delivered by the
     Contractor to the Owner (1) is recommended to the Owner by the Contractor;
     (2) is qualified to perform that portion of the Work; and (3) has submitted
     a bid that conforms to the requirements of the Contract Documents without
     reservations or exceptions, but the Owner requires that another bid be
     accepted, then the Contractor may require that a Change Order be issued to
     adjust the Guaranteed Maximum Price by the difference between the bid of
     the person or entity recommended to the Owner by the Contractor and the
     amount of the subcontract or other agreement actually signed with the
     person or entity designated by the Owner.

     10.3      Subcontracts or other agreements shall conform to the applicable
     payment provisions of this Agreement, and shall not be awarded on the basis
     of cost plus a fee without the prior consent of the Owner.

ARTICLE 11     ACCOUNTING RECORDS
     The Contractor shall keep full and detailed accounts and exercise such
     controls as may be necessary for proper financial management under this
     Contract, and the accounting and control systems shall be satisfactory to
     the Owner. The Owner and the Owner's accountants shall be afforded access
     to, and shall be permitted to audit and copy, the Contractor's records,

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               6

<PAGE>

     books, correspondence, instructions, drawings, receipts, subcontracts,
     purchase orders, vouchers, memoranda and other data relating to this
     Contract, and the Contractor shall preserve these for a period of three
     years after final payment, or for such longer period as may be required by
     law.

ARTICLE 12     PAYMENTS
     12.1      PROGRESS PAYMENTS
     12.1.1    Based upon Applications for Payment submitted to and approved by
     the Owner, the Owner shall make progress payments on account of the
     Contract Sum to the Contractor as provided below and elsewhere in the
     Contract Documents.

     12.1.2    The period covered by each Application for Payment shall be one
     calendar month ending on the last day of the month, or as follows:

     12.1.3    Provided that an Application for Payment is received by the Owner
     (and Owner has approved payment therefor) not later than the 25th day of a
     month, the Owner shall make payment to the Contractor not later than the
     15th day of the next month. If an Application for Payment is received by
     the Owner (and Owner has approved payment therefor) after the application
     date fixed above, payment shall be made by the Owner not later than 20 days
     after the Owner receives the Application for Payment.

     12.1.4    With each Application for Payment, the Contractor shall submit
     payrolls, petty cash accounts, receipted invoices or invoices with check
     vouchers attached, and any other evidence required by the Owner or
     Architect to demonstrate that cash disbursements already made by the
     Contractor on account of the Cost of the Work equal or exceed (1) progress
     payments already received by the Contractor; less (2) that portion of those
     payments attributable to the Contractor's Fee; plus (3) payrolls for the
     period covered by the present Application for Payment.

     12.1.5    Each Application for Payment shall be based on the most recent
     approved schedule of values submitted by the Contractor in accordance with
     the Contract Documents. The schedule of values shall allocate the entire
     Guaranteed Maximum Price among the various portions of the Work, except
     that the Contractor's Fee shall be shown as a single separate item. The
     schedule of values shall be prepared in such form and supported by such
     data to substantiate its accuracy as the Owner may require. This schedule,
     unless objected to by the Owner, shall be used as a basis for reviewing the
     Contractor's Applications for Payment.

     12.1.6    Applications for Payment shall show the percentage of completion
     of each portion of the Work as of the end of the period covered by the
     Application for Payment. The percentage of completion shall be the lesser
     of (1) the percentage of that portion of the Work which has actually been
     completed; or (2) the percentage obtained by dividing (a) the expense that
     has actually been incurred by the Contractor on account of that portion of
     the Work for which the Contractor has made or intends to make actual
     payment prior to the next Application for Payment by (b) the share of the
     Guaranteed Maximum Price allocated to that portion of the Work in the
     schedule of values.

     12.1.7    Subject to other provisions of the Contract Documents, the amount
     of each progress payment shall be computed as follows:

             .1  Each Application for Payment (other than the final Application
                 for Payment) shall include a sum equal to ninety-five percent
                 (95%) of the Cost of Work in place which was performed during
                 the period covered by the Application for Payment.

             .2  Each Application for Payment (other than the final Application
                 for Payment) shall also include a sum equal to ninety-five
                 percent (95%) of the Contractor's Fee as determined in
                 accordance with the provisions of Clause 5.1.1 to which
                 Contractor is entitled for the period covered by the
                 Application for Payment.

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               7

<PAGE>

     12.1.8    Except with the Owner's prior approval, payments to
     Subcontractors shall be subject to retainage of not less than five percent
     (5%). The Owner and the Contractor shall agree upon a mutually acceptable
     procedure for review and approval of payments and retention for
     Subcontractors.

     12.2      FINAL PAYMENT
     12.2.1    Final payment, constituting the entire unpaid balance of the
     Contract Sum, shall be made by the Owner to the Contractor when:

             .1  the Contractor has fully performed the Contract except for the
                 Contractor's responsibility to correct Work as provided in
                 Subparagraph 12.2.2 of AIA Document A201-1997, and to satisfy
                 other requirements, if any, which extend beyond final payment;
                 and

             .2  a final Application for Payment has been approved by the Owner.

     12.2.2    The Owner's final payment to the Contractor shall be made no
     later than 30 days after the Owner has approved the final Application for
     Payment, or as follows:

     12.2.3    The Owner's accountants will review and report in writing on the
     Contractor's final accounting within 30 days after delivery of the final
     accounting to the Owner by the Contractor but such review by Owner's
     accountants shall not waive any of Owner's rights. Based upon such Cost of
     the Work as the Owner's accountants report to be substantiated by the
     Contractor's final accounting, and provided the other conditions of

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               8

<PAGE>

     Subparagraph 12.2.1 have been met, the Owner will, within 30 days after
     receipt of the written report of the Owner's accountants, either make final
     payment to the Contractor, or notify the Contractor in writing of the
     Owner's reasons for withholding such payment provided in Subparagraph
     9.5.1 of the AIA Document A201-1997. The time periods stated in this
     Subparagraph 12.2.3 supersede those stated in Subparagraph 9.4.1 of the AIA
     Document A201-1997.

     12.2.4    If the Owner's accountants report the Cost of the Work as
     substantiated by the Contractor's final accounting to be less than claimed
     by the Contractor the final payment shall be based upon such reduced
     amount, but, the Contractor shall be entitled to demand arbitration of the
     disputed amount without a further decision of the Architect. Such demand
     for arbitration shall be made by the Contractor within 45 days after the
     Owner's disapproval of all or a portion of an Application for Payment;
     failure to demand arbitration within this 45 day period shall result in the
     substantiated amount reported by the Owner's accountants becoming binding
     on the Contractor. Pending a final resolution by arbitration, the Owner
     shall pay the Contractor the amount approved by the Owner.

     12.2.5    If, subsequent to final payment and at the Owner's request, the
     Contractor incurs costs described in Article 7 and not excluded by Article
     8 to correct defective or nonconforming Work, the Owner shall reimburse the
     Contractor such costs and the Contractor's Fee applicable thereto on the
     same basis as if such costs had been incurred prior to final payment, but
     not in excess of the Guaranteed Maximum Price. If the Contractor has
     participated in savings as provided in Paragraph 5.2, the amount of such
     savings shall be recalculated and appropriate credit given to the Owner in
     determining the net amount to be paid by the Owner to the Contractor.

ARTICLE 13 TERMINATION OR SUSPENSION
     13.1      The Contract may be terminated by the Contractor, or by the Owner
     for convenience, as provided in Article 14 of AIA Document A201-1997 as
     amended.

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                               9

<PAGE>

ARTICLE 14     MISCELLANEOUS PROVISIONS
     14.1      Where reference is made in this Agreement to a provision AIA
     Document A201-1997 or another Contract Document, the reference refers to
     that provision as amended or supplemented by other provisions of the
     Contract Documents.

     14.2      Payments due and unpaid under the Contract shall bear interest
     from the date payment is due at the rate stated below, or in the absence
     thereof, at the legal rate prevailing from time to time at the place where
     the Project is located.
     (Insert rate of interest agreed upon, if any.)

     (Usury laws and requirements under the Federal Truth in Lending Act,
     similar state and local consumer credit laws and other regulations at the
     Owner's and Contractor's principal places of business, the location of the
     Project and elsewhere may affect the validity of this provision. Legal
     advice should be obtained with respect to deletions or modifications, and
     also regarding requirements such as written disclosures or waivers.)

     14.3      The Owner's representative is:
     (Name, address and other information.)

     14.4      The Contractor's representative is:
     (Name, address and other information.)

     14.5      Neither the Owner's nor the Contractor's  representative shall be
     changed without ten days' written notice to the other party.

     14.6      Other provisions:

ARTICLE 15     ENUMERATION OF CONTRACT DOCUMENTS
     15.1      The Contract Documents, except for Modifications issued after
     execution of this Agreement, are enumerated as follows:

     15.1.1    The Agreement is this executed 1997 edition of the Standard Form
     of Agreement Between Owner and Contractor, AIA Document A111-1997 as
     amended.

     15.1.2    The General Conditions are the 1997 edition of the General
     Conditions of the Contract for Construction, AIA Document A201-1997 as
     amended.

     15.1.3    The Supplementary and other Conditions of the Contract are those
     contained in the Project Manual dated, and are as follows:

     Document                         Title                    Pages

     15.1.4    The Specifications are those contained in the Project Manual
     dated as in Subparagraph 15.1.3, and are as follows:
     (Either list the Specifications here or refer to an exhibit attached to
     this Agreement.)

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.
WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C. 20006-5292

                                                                              10

<PAGE>

     Section                              Title                            Pages

     15.1.5    The Drawings are as follows, and are dated unless a different
     date is shown below:
     (Either list the Drawings here or refer to an exhibit attached to this
     Agreement.)

     Number                               Title                            Date

     15.1.6    The Addenda, if any, are as follows:

     Number                                Date                            Pages
       The Addendum to General Conditions

     Portions of Addenda relating to bidding requirements are not part of the
     Contract Documents unless the bidding requirements are also enumerated in
     this Article 15.

     15.1.7    Other Documents, if any, forming part of the Contract Documents
     are as follows:
     (List here any additional documents, such as a list of alternates that are
     intended to form part of the Contract Documents. AIA Document A201-1997
     provides that bidding requirements such as advertisement or invitation to
     bid, Instructions to Bidders, sample forms and the Contractor's bid are not
     part of the Contract Documents unless enumerated in this Agreement. They
     should be listed here only if intended to be part of the Contract
     Documents.)

ARTICLE 16     INSURANCE AND BONDS
     (List required limits of liability for insurance and bonds. AIA Document
     A201-1997 gives other specific requirements for insurance and bonds.)

This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies, of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.

--------------------------------          ------------------------------------
  OWNER (Signature)                         CONTRACTOR (Signature)

--------------------------------          ------------------------------------
  (Printed name and title)                  (Printed name and title)

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES. CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document is not intended for use in competitive bidding.

AIA Document A201-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference. Do not use with other general conditions
unless this document is modified.

This document has been approved and endorsed by The Associated General
Contractors of America.

[LOGO OF AIA]

(C)1997 AIA(R)
AIA DOCUMENT A111 - 1997
OWNER - CONTRACTOR AGREEMENT

(C) 1920, 1925, 1951, 1961, 1963, 1967, 1974, 1978, 1987, (C) 1997 by The
American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the AIA
violates the copyright laws of the United States and will subject he violate to
legal prosecution.

WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject
the violator to legal prosecution. This document was electronically produced
with permission of the AIA and can be reproduced in accordance with your license
without violation until the date of expiration as noted below. User Document:
97a111.aia -- 2/7/2002. AIA License Number 1110477, which expires on 1/31/2003.

The American Institute of Architects
1735 New York Avenue, N.W.
Washington, D.C.20006-5292

                                                                              11

<PAGE>

                                  ADDENDUM TO

                              GENERAL CONDITIONS OF

                          THE CONTRACT FOR CONSTRUCTION

                        (AIA Document A201-1997 Edition)

     THIS ADDENDUM TO GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION is
entered into between__________________ ("Owner") and__________________
("Contractor") as an amendment and supplement to those certain General
Conditions of the Contract for Construction (AIA Document A201 - 1997 Edition)
that contain modifications made by Contractor (hereinafter "General
Conditions"), which has been incorporated by reference into that certain
Standard Form of Agreement Between Owner and Contractor - Cost of the Work Plus
a Fee (AIA Document A111 - 1997 Edition) executed by Owner and Contractor
concurrently herewith (the "Agreement"). References in this Addendum to sections
of the General Conditions shall appear in this Addendum as "GC &___". Paragraphs
in this Addendum are numbered to correspond to the Articles in the General
Conditions to which such paragraphs in this Addendum generally relate. In the
event of any conflict between this Addendum and any other Contract Document,
this Addendum shall prevail; provided, however, that any typed or handwritten
additions to the printed form Agreement shall prevail over conflicting
provisions contained in this Addendum. This Addendum shall be deemed a part of
the Agreement.

1.A  DEFINITIONS. Unless otherwise provided in this Addendum, the capitalized
terms used in this Addendum shall have the meanings given to those terms in the
Contract Documents. In addition, the following terms shall have the following
meanings: (i) "Materials" shall mean materials, equipment, apparatus, articles,
or processes; (ii) "Laws" shall mean all laws, statutes, ordinances, rules,
regulations, building codes and orders; (iii) "Suppliers" shall mean all
materialmen or other persons providing Materials to Contractor or any
Subcontractor; (iv) "Claims" shall mean liabilities, judgments, claims, damages,
losses and expenses, of every type and nature, including but not limited to
attorneys' fees, experts' fees and court costs; and (v) "Lien" shall mean any
mechanics' or other lien, stop notice, charge, imposition, garnishment or
attachment.

1.B  CONTRACTOR AND ARCHITECT AS INDEPENDENT CONTRACTORS. GC &1.1.2. is modified
as follows: Contractor and Architect are independent contractors of Owner.
Neither Contractor nor Architect is the employee, agent, joint venturer, or
partner of Owner. The Contract Documents shall not be deemed to create any
relationship, express or implied, between Owner and any Subcontractor or
Supplier of Contractor. Contractor shall have the sole responsibility for
performance under any Subcontract or employment agreement entered into by
Contractor with respect to the Work.

1.C  DISCREPANCIES. The following is hereby added to GC & 1.2.1: Conflicts or
discrepancies among the Contract Documents shall be resolved in the following
order of priority:

..1 The Agreement;

..2 The General Conditions; and

..3 Drawings and specifications.

Amendments and revisions of later date take precedence over those of earlier
date. Drawings govern specifications for quantity and location and
specifications govern drawings for quality and performance. In the event of
ambiguity in quantity or quality, the greater quantity and the better quality
shall govern.

1.D  DRAWINGS. GC & 1.6.1 is modified as follows: Ownership of all drawings,
specifications and copies thereof furnished by Architect is determined by the
Architect's Agreement. They shall not be used on any other project without the
prior written consent of Owner.

<PAGE>

2.A  MODIFICATION OF OWNER'S  OBLIGATIONS.  GC &2.2.1 and GC &2.2.3 are deleted.
No action taken by Owner pursuant to the Contract Documents requires the
approval of Architect. However, Owner will not have control over or charge of,
and will not be responsible for, construction means, methods, techniques,
sequences or procedures, or for safety precautions and programs in connection
with the Work, since these are solely Contractor's responsibility as provided in
the Contract Documents. Owner will not be responsible for Contractor's failure
to carry out the Work in accordance with the Contract Documents. Owner will not
have control over or charge of, and will not be responsible for, negligent acts
or omissions of Contractor, Subcontractors, or their agents or employees, or of
any other persons performing portions of the Work.

2.B  OWNER'S RIGHT TO STOP THE WORK. GC &2.3.1 is deleted and replaced with the
following, which rights shall be in addition to, and not in restriction of,
other rights and remedies given to Owner:

     2.B.1 Suspension Due to Unforeseen Conditions. Notwithstanding any
provision in the Contract Documents to the contrary, if suspension of the Work
is warranted by reason of unforeseen conditions which may adversely affect the
quality of the Work, if the Work were continued, Owner (but not Architect) by
written notice to Contractor may do either or both of the following, to the
extent necessary to address such unforeseen conditions: (i) entirely suspend the
Work; or (ii) cause the Work, or portions thereof, to be partially suspended or
delayed, while other portions of the Work continue on the same or different
schedule re-determined by Owner and Contractor. In such event, the Contract Time
shall be extended by the amount of delay caused by the exercise by Owner of such
remedies. In addition, if Contractor has taken all reasonable steps to mitigate
the effects of such suspension, then Contractor shall be entitled to
reimbursement of its reasonable, direct, out-of-pocket, additional general
conditions costs resulting from such suspension. If Contractor reasonably
believes that a suspension of the Work is warranted by reason of unforeseen
circumstances which may adversely affect the quality of the Work, if the Work
were continued, Contractor shall immediately notify Owner and Architect of such
belief, but Contractor shall have no right to suspend the Work, except with the
written consent of Owner (which consent shall not be unreasonably withheld) or
except in the case of an emergency (in which event Contractor shall resume work
upon cessation of the emergency).

     2.B.2 Upon Contractor's Default. Notwithstanding any provision in the
Contract Documents to the contrary, if Contractor fails to correct defective
Work as required by GC PARA 12.2, fails to complete the Work on time as required
by the Agreement, or is in material default of its obligations hereunder, Owner
may order Contractor to stop the Work, or any portion thereof, until the cause
for such order has been eliminated pursuant to GC PARA 14.B.2, hereof.

3.A  REVIEW BY CONTRACTOR. GC PARA 3.2.2 (second sentence only) and GC PARA
3.2.3 (third sentence only) are deleted and the remainder of GC PARA 3.2 is
modified as follows: Contractor acknowledges that it is responsible for
inspecting all Site conditions, Contract Documents, and other matters which may
affect the prosecution, completion, and Cost of the Work (herein, the
"Conditions of the Work"). Contractor represents to Owner that: (i) Contractor
has inspected and tested to the extent necessary for its purposes, the
Conditions of the Work; (ii) Contractor's knowledge of the Conditions of the
Work as of the execution of the Agreement is sufficient to enable Contractor to
determine the Cost of the Work; and (iii) to the best of Contractor's knowledge,
the Work described in the Contract Documents can be performed in strict
compliance with all Laws. Contractor also shall review specified construction
and installation procedures and shall advise Architect prior to commencing
related activities, if any such procedures would result in finished Work not in
conformance with the Contract Documents or if such procedures would affect any
warranties, and Contractor shall propose alternative procedures which will
comply with the Contract Documents and which Contractor will warrant. The last
two sentences of GC PARA 3.3.1 are deleted.

3.B  LABOR AND MATERIALS. GC PARA 3.4  is supplemented as follows: Neither
Contractor nor any Subcontractor or Supplier shall incorporate into the Work any
Materials (i) to which its title is imperfect, (ii) against which there is any
claim by a manufacturer or other entity, or (iii) which is encumbered by any
security interest. Contractor shall be responsible for all Materials specified
by the Contract Documents which are delivered to the Site. Any Materials
delivered to the Site, which are not to be used in or

                                        2

<PAGE>

incorporated into the Work under the Contract Documents, shall be forthwith
removed from the Site and Contractor shall be solely responsible for all cost
incurred with respect to such Materials.

3.C  CONTRACTOR'S WARRANTY. The word "may" in the second sentence of GC PARA
3.5.1 is replaced with the word, "shall," and the remainder of GC PARA 3.5.1 is
modified and supplemented as follows: Contractor's warranty shall include all
specified procedures or accepted alternative procedures and all specified or
accepted substituted products. The Contractor shall also use all reasonable
efforts to secure from the Subcontractors, for the benefit of Owner, the maximum
warranties available with respect to such Subcontractor's Work; provided,
however, that any additional cost of such warranties shall be approved in
writing by Owner. During the one-year period following Substantial Completion of
the Work, the Contractor shall, upon request by Owner, use its best efforts to
obtain satisfaction of any Subcontractor's warranty. Neither (a) the lapse of
the lapse of an express warranty period under any Subcontract or under GC PARA
12.2.2, nor (b) Owner's failure to assert a warranty claim under any Subcontract
or GC PARA 12.2.2, shall waive any right or action (other than the particular
warranty claim so waived) which Owner may have against Contractor or any
Subcontractor for defective or incomplete Work under any other provision of a
Subcontract or the Contract Documents, or otherwise under applicable Law. All
guaranties and warranties of Materials used or incorporated into the Work shall
be assigned and delivered by Contractor to Owner upon demand, or without demand
upon completion of the Work. The warranties in Contract Documents or assigned to
Owner (i) shall not be deemed exclusive of any other warranty or guaranty,
whether express or implied, (ii) shall survive the completion of the Work and
the termination of the Contract Documents, and (iii) shall inure to the benefit
of Owner's successors and assigns.

3.D  PERMITS, FEES AND NOTICES. GC PARA 3.7.1 is supplemented as follows:
Contractor shall furnish to Owner copies of all permits obtained during the
course of the Work.

3.E  COMPLIANCE WITH LAW. GC PARA 3.7.3 and 3.7.4 are modified and supplemented
as follows: Contractor shall comply with all Laws applicable to the performance
of the Work and the employment of labor. Although Contractor is not responsible
for the preparation of Drawings and Specifications, Contractor shall
nevertheless (i) notify Owner and Architect of any deviation in the Drawings and
Specifications from the requirements of applicable Law of which Contractor is or
reasonably should be aware, and (ii) perform no Work which Contractor knows or
reasonably should know to be contrary to applicable Law. Owner acknowledges that
city or county building officials may refuse to approve components of the Work
even if Contractor has complied with applicable Law.

3.F  SUPERINTENDENT. GC PARA 3.9 is modified as follows: All of Contractor's
supervisory personnel at the Site shall be satisfactory to Owner, and Contractor
shall replace such personnel only with Owner's consent, which shall not be
unreasonably withheld.

3.G  PROGRESS SCHEDULE AND ON-SITE MEETINGS. Contractor shall strictly adhere to
the progress schedule approved by Owner and Architect and shall immediately
notify Owner and Architect of any material deviation by any party from said
schedule. If, in the judgment of Architect or Owner, any phase of the Work is or
may become behind schedule, Contractor shall take such steps as Owner deems
reasonably necessary to improve the progress of the Work and insure Substantial
Completion of the Work within the Contract Time. Upon request by Architect or
Owner, Contractor shall submit for their approvals a revised progress schedule
showing the manner in which any lost time will be regained. Contractor shall
hold weekly progress meetings at the Site, or at such other time, frequency, and
location as are reasonably acceptable to Owner. Progress of the Work shall be
reported in detail with reference to construction schedules prepared by and
approved by Owner and Architect. Upon request by Owner; Contractor shall cause
each interested Subcontractor to attend the meeting for the purposes of
reporting upon the progress of the Subcontractor's Work and receiving
information; provided, however, that nothing that may transpire at such meeting
shall modify or release any Subcontractor from its obligations to the Contractor
under a Subcontract.

3.H  SUBMITTALS. All changes made to the original preprinted form of the General
Conditions in GC PARA 3.l2.7, 3.12.8, 3.12.9 and 3.12.10 are deleted and the
original preprinted form language is reinstated.

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3.I  USE OF SITE. GC PARA 3.13 is supplemented as follows: In performing the
Work, Contractor shall not cause or allow rain water, dust, nauseous vapors,
excessive noise, or other intrusions to go beyond the boundaries of the Site in
any manner that would constitute a nuisance or a violation of Law.

3.J  CLEANING UP. GC PARA 3.15 is supplemented. Upon completion of the Work,
Contractor shall remove from the Site and sell to a third party or transfer to
itself at the fair market value all machinery, equipment, scaffolding, forms,
hand tools and other items which were purchased exclusively for use in the Work
and charged to Owner as a cost of the Project, which Owner does not elect to
retain. Proceeds from such sales, or the fair market value of the item in the
case of a transfer to Contractor, shall be deducted from the Contract Sum
payable to Contractor.

3.K  LABOR RELATIONS.

     3.K.1 Labor Agreements. Employment of labor by Contractor shall be effected
under conditions which are satisfactory to Owner. If Owner has entered into any
labor agreements covering work at the Site, Owner shall inform Contractor of the
terms of such labor agreements and Contractor shall comply with all of the terms
and conditions of those labor agreements, including (i) the trust fund payments
into the respective trust funds set forth in the respective labor agreements in
so far as Contractor may lawfully do so, and (ii) any provisions setting forth
the jurisdiction and the scope of work claimed by each of such crafts and the
procedure contained therein for resolution of jurisdictional disputes. In the
absence of any such procedure, or if such procedure fails to promptly resolve
any jurisdictional dispute, Contractor agrees, at its own cost, upon request of
Owner, to take any and all lawful steps to secure binding and final
determination of said jurisdictional dispute by the National Labor Relations
Board. Should there be picketing on the Site and if Owner establishes a reserved
gate for Contractor's purposes, Contractor shall continue the proper performance
of the Work, without interruption or delay, using such gate.

     3.K.2 Equal Opportunity. Contractor and the Subcontractors shall not
discriminate against any employee or applicant for employment because of
handicap, age, religion, color, sex, or national origin. Contractor shall take
affirmative action to insure that applicants are employed, and that employees
are treated during employment, without regard to their handicap, age, race,
religion, color, sex, or national origin. Such action shall include, but not be
limited to the following: employment, upgrading, demotion, transfer,
recruitment, advertising, layoff or termination, rates of pay or other forms of
compensation, and selection for training, including apprenticeship. Contractor
shall post in conspicuous places, available to employees and applicants for
employment, notices setting forth its policies of non-discrimination. Contractor
and each Subcontractor shall, in all solicitations or advertisements for
employees placed by them or on their behalf, state that all qualified applicants
will receive consideration for employment without regard to handicap, age, race,
religion, color, sex or national origin. Contractor will not discriminate in the
selection of Subcontractors or Suppliers because of age, sex, race, creed,
color, national origin, age, or handicap. Contractor will, in the selection of
Suppliers and in the award of Subcontracts, use its best efforts to identify
qualified minority business enterprises, and to assure that such enterprises
shall have the maximum practicable opportunity for selection by Contractor.
Contractor shall inform Owner in writing as to any such enterprises that have
been so identified.

3.L  ACCESS TO WORK; ROYALTIES, PATENTS AND COPYRIGHTS. All changes to the
original preprinted form language in GC PARA 3.17 and 3.18 are deleted and the
original preprinted form language in these sections is reinstated.

3.M  MECHANICS' LIENS. GC  PARA 3.18.1 is supplemented. Contractor shall pay
when due all sums payable to persons or firms who furnish labor, or Materials
for the Work or who are otherwise entitled to file a mechanic's Lien upon
Owner's property. Except to the extent attributable to Owner's wrongful
withholding of monies payable to Contractor under the Contract Documents, within
five (5) business days following Owner's written demand, Contractor shall take
such action as may be required to discharge any Lien against Owner or the
landlord of the premises ("Landlord") or Owner's or Landlord's real property in
connection with the Work and Contractor shall indemnify and hold harmless Owner,
Landlord and their real property from and against any and all Claims arising out
of the filing or service, or attempted filing or

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<PAGE>

service, of any Lien or out of Contractor's failure to remove or satisfy any
Lien in accordance with this Contract. Except to the extent caused solely by
Owner's wrongful withholding of the amounts due and payable to Contractor,
Contractor shall not (i) file or record, or suffer the filing or recording of,
any Lien upon Owner's or Landlord's real property, (ii) shall not impose, or
suffer the imposition of, any stop notice on funds held by Owner, or Landlord
and (iii) shall not garnish or attach, or suffer the garnishment or attachment
of, any funds held by Owner or Landlord.

3.N  INDEMNIFICATION. GC PARA 13.18.1 is modified to provide that to the fullest
extent permitted by Law, Contractor will indemnify, protect, defend and hold
harmless Owner and its consultants, agents and employees and Landlord from all
Claims to the extent the Claim arises out of (i) any negligent or willful act or
omission of Contractor, any Subcontractor, or any one directly or indirectly
employed by any of them or anyone for whose acts any of them may be liable,
regardless of whether or not the Claim also is caused in part by Owner or
Architect, and/or (ii) a breach of Contractor's obligations or representations
under the Contract Documents, except only to the extent that the Claims were
caused by the sole negligence or willful misconduct of the Owner. All of the
foregoing indemnifications in the Contract shall be in full force and effect and
apply at all times during the progress of the Work and, notwithstanding the
Substantial Completion of the Work, the filing of a Notice of Completion, or the
termination of the Contract Documents, at all times thereafter. Contractor
agrees, at its own cost, expense and risk to defend the Owner and its
consultants, agents and employees against any such Claim that may be brought by
a governmental authority, any employee of Contractor or any of Contractor's
Subcontractors or Material Suppliers, or any other third person with counsel
selected by the indemnified party subject to the consent of Contractor, which
consent shall not be unreasonably withheld. If Contractor fails to provide such
defense, then in addition to its other rights and remedies at law or in equity
or under the Contract Documents, the party(ies) to be indemnified may defend the
same and all attorneys' and experts' fees, court costs and other expenses of
every kind incurred by the indemnified party to provide such defense, together
with the amount paid or payable by the indemnified party on any judgement or
settlement of the Claim shall be paid by Contractor to the indemnified party
upon demand. Contractor acknowledges and agrees that the indemnity herein
provided shall not be limited in any way by a limitation on the amount or type
of damages, compensation or benefits payable by or for the Contractor under any
workers' compensation, disability or other employee benefit act.

3.O  SIGNAGE. Except as approved by Owner, neither Contractor nor any of its
agents, contractors or employees shall post any signs at the Project. All signs
shall comply with all applicable Laws.

4.A  ARCHITECT'S RESPONSIBILITIES. Notwithstanding anything to the contrary in
the Contract Documents, (including without limitation GC PARA l.1.2, 4.1, 4.2,
and 4.4) Architect may be replaced by Owner at any time, and from time to time,
by written notice to Contractor, and Owner shall (i) have the right to exercise
any right or power given to Architect by the Contract Documents, which Owner may
do either in conjunction with Architect or by itself without consultation with
or involvement of Architect, and (ii) receive or obtain any notices, plans, or
other documents Architect is entitled to receive or obtain pursuant to the
Contract Documents, and (iii) communicate directly with Contractor. Except as
Owner may hereafter notify Contractor in writing, Architect shall have no right
to act on behalf of Owner, to provide any approval for Owner, or to otherwise
bind Owner to any action or promise. Architect's approval, decision, or
determination as to any matter is advisory only and shall not be binding upon
Owner. If Architect requests additional inspection, testing, labor, materials or
other Work, Owner shall not be bound to pay the cost thereof, unless Owner has
agreed in writing to do so. Nothing in the Contract shall limit Architect's
duties under the Architect's Agreement.

4.B  CONSTRUCTION OBSERVATION. In GC PARA 4.2.2, the word "Work" means only the
product of construction and does not include Contractor's equipment, services,
construction means, methods, techniques, sequences, procedures, or safety
precautions or programs.

4.C  CLAIMS.

     4.C.1 Time Limits on Claims. GC PARA 4.3.1, PARA 4.3.2 and GC PARA 4.4.5
(second sentence) are deleted. Claims by Contractor must be made within 30 days
after occurrence of the event giving rise to such Claim or within

                                        5

<PAGE>

30 days after Contractor first recognizes the condition giving rise to the
Claim, whichever is later. Claims must be made by written notice. Failure to
deliver any such notice or request within the required period shall constitute
an irrevocable waiver of any such Claim. If a Claim has been implemented by
Change Order, no further consideration will be given to such Claim.

     4.C.2 Resolution of Claims. GC PARA 4.3 and 4.4 are modified and
supplemented as set forth herein. All references to "arbitration" are deleted.
In the event of any dispute between Owner and Contractor, which relates to the
Contract Documents or the Work, Contractor shall not interrupt the progress of
the Work during the pendency of any such dispute, unless ordered to do so by
Owner in writing. If either party becomes involved in litigation in connection
with the Contract Documents or the Work, the court or tribunal in such
litigation, or in a separate suit, may award reasonable costs and expenses of
litigation, including court costs, experts' fees and attorneys' fees, to be paid
by the losing party to the prevailing party. In the event either party becomes
the subject of any bankruptcy or insolvency proceeding, the other parties shall
be entitled to reimbursement of all costs and expenses, including attorneys'
fees and court costs, incurred by said other party to obtain adequate protection
of its rights under the Contract Documents or to obtain other requested relief
in such bankruptcy or insolvency proceeding.

4.D  MEDIATION. GC PARA 4.5 is modified and supplemented as follows: If a
dispute arises out of or relating to this Agreement or the breach thereof, and
if such dispute cannot be settled through direct discussions, the parties shall
submit the dispute to nonbinding mediation under the Construction Industry
Mediation Rules of the American Arbitration Association before having recourse
to a judicial forum. The mediation may be initiated by the written request of
either party and shall be commenced within fifteen (15) days of receipt of such
notice.

4.E  ARBITRATION. GC PARA 4.6 is deleted.

5.   SUBCONTRACTORS. GC PARA 5.2.3 is deleted. The fourth sentence of GC PARA
5.3.1 shall end with the words "...will be bound," and the remainder of said
sentence is deleted. GC PARA 5.1, 5.2, and 5.3 are supplemented. Owner, acting
reasonably and in good faith after consultation with Contractor, may require
Contractor to terminate a Subcontractor and replace the Subcontractor with
another Subcontractor acceptable to Owner. If at such time Contractor is not in
default hereunder, the Contract Sum shall be increased or decreased by the
difference in cost occasioned by such change and the Contract Time shall be
equitably adjusted. Work performed for Contractor by a Subcontractor shall be
performed only pursuant to a written subcontract between Contractor and
Subcontractor in a form reasonably acceptable to Owner. Each subcontract shall
provide that (i) Subcontractor waives all rights it may have against Owner for
damages caused by fire or other perils which would be covered by the property
insurance described in the Contract Documents or which is otherwise covered by
insurance; (ii) Subcontractor will furnish such additional lien waivers and
other documents as Owner and Contractor may reasonably request; and (iii)
require the Subcontractor to perform strictly in accordance with the Contract
Documents (including specifically, but without limiting the generality of the
foregoing the labor and employment relations provision thereof). In addition,
all Suppliers and Subcontractors shall warrant the Work and Materials supplied
and/or installed by them in the same manner and for the same period as is
required of Contractor under this Contract or in such broader manner and for
such longer period as may be required by the Specifications. Contractor and all
Subcontractors shall coordinate their Work with all adjacent work and all other
trades so as to facilitate the general progress of all work. Each Subcontractor
shall afford all other contractors every reasonable opportunity to install other
work and materials. All Subcontractors shall be required to place all debris in
a central location.

7.A  INITIAL AUTHORIZATION OF WORK. GC PARA 7.1 is modified to delete all
references to or any "major or minor change in the Work, other than a Change
Order or a Construction Change Directive."

7.B  SUBCONTRACTOR OVERHEAD AND PROFIT. The following is added as GC PARA 7.2.3:

"7.2.3 In no event shall the total Change Order markup, including all levels of
Subcontractors' overhead and profit and Contractor overhead and profit exceed
twelve percent (12%) cumulative."

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<PAGE>

7.C. CHANGE ORDER FOR NEW WORK. The following is hereby added as GC PARA 7.2.4:
From time to time during the term of this Contract, Owner may elect in its
discretion to submit to Contractor Drawings and Specifications for portions of
the Work. Upon receipt of such Drawings and Specifications, Contractor shall
immediately obtain bids for such Work. Based on bids approved by Owner,
Contractor shall deliver to Owner a proposed Change Order for the Work described
in the Drawings and Specifications so delivered to Contractor. If after
requesting bids, Owner and Contractor are unable to agree upon the terms of a
Change Order for the Work, Owner may rescind its request for Work and may obtain
performance of the Work by others. Contractor shall be authorized to undertake
only those portions of the Work authorized in writing by Owner in a written
Change Order complying with this section or otherwise as authorized by this
Contract. Each Change Order initially authorizing Work shall (i) describe the
Work to be performed and reference the Drawings, Specifications and any other
additional Contract Documents applicable to such Work, (ii) set forth the
adjustment to the Contract Sum proposed by Contractor and approved by Owner for
such Work, and (iii) specify any modification of the Substantial Completion Date
as a consequence of the Change Order.

7.D  SUBSEQUENT MODIFICATIONS. The following is hereby added as GC PARA 7.2.5:

     "7.2.5 Subsequent Modifications. Furthermore, notwithstanding anything to
the contrary in GC PARA 7.2, the Contract Sum may be adjusted and the Contract
Time may be extended or shortened only upon written approval of a Change Order
by Owner and Contractor. Notwithstanding anything to the contrary in GC PARA
7.1.2, Change Orders shall be ineffective unless executed by Owner. Each Change
Order for adjustments in previously authorized Work shall include (i) a cost
breakdown for the maximum increase or decrease in the Contract Sum as a
consequence of a Change, (ii) a description of all plans and specifications for
the Change, and (iii) the adjustment, if any, in the Contract Time as a
consequence of the Change."

7.E  RIGHT TO PAYMENT. The following is hereby added as GC PARA 7.2.6:

     "7.2.6 Right to Payment. Contractor shall not be entitled to include in any
Application for Payment, or to receive payment for, Work, unless the Work is
authorized by a valid Change Order executed by Owner. No course of conduct or
dealings between the parties, nor express or implied acceptance of alterations
or additions to the Work, and no claim that Owner has been unjustly enriched by
any alteration or addition to the Work, whether or not there is in fact any such
unjust enrichment, shall be the basis for a change in the Contract Time, an
increase in the Contract Sum or the Guaranteed Maximum Price, or a right to any
other payment by Owner to Contractor. Contractor shall complete all Work
specified in Change Orders executed by Owner and Contractor in accordance with
the Contract Documents on or before the scheduled Substantial Completion Date
specified in the Change Orders."

7.F  PRICING FOR CHANGE ORDERS. The change in the Contract Sum Sum or the
Guaranteed Maximum Price for the Work authorized by each Change Order, shall be
equal to: the sum of the total actual net increase or decrease in the Cost of
the Work based upon Subcontractor's bids and bid revisions approved by
Contractor and Owner for the Change in the Work, if such bids are available, or
in all other cases based upon Owner's and Contractor's estimate of the actual
labor and Materials added or saved by the Change Order.

8.A  DEFINITION OF SUBSTANTIAL COMPLETION. GC PARA 8.1.3 and 9.8 are amended
modified and supplemented as follows: "Substantial Completion" of any portion of
the Work is the date when (i) such Work is substantially complete as set forth
in a written certification executed by Architect and approved by Owner, which
approval shall not be unreasonably withheld, and (ii) Contractor has delivered
to Owner all permits and approvals from the appropriate governmental authorities
necessary for the occupancy of such Work for Owner's intended use, and (iii)
there remains no incomplete or defective item of such Work that would adversely
affect Owner's intended use of such Work. The last two sentences of GC PARA
9.8.5 are deleted.

8.B  PROGRESS AND NOTICE OF COMPLETION. GC PARA 8.2 is modified and supplemented
as follows: Not later than five (5) days following Substantial Completion of the
Work, Contractor shall submit a properly drafted Notice of Completion to Owner
for Owner's signature. If the Work is

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<PAGE>

Substantially Complete, Owner shall sign, acknowledge, and return the form to
Contractor within five (5) days following receipt of the notice. Contractor
shall cause the executed Notice of Completion to be properly recorded at the
County Recorder's Office of the county in which the Site is located on or before
the tenth (10th) day following Substantial Completion of the Work. Within five
(5) days following recording, Contractor shall deliver to Owner a copy of the
recorded Notice of Completion, certified by the County Recorder to be a copy of
the recorded original and indicating the date and time the Notice of Completion
was recorded.

8.C CLAIM OF DELAY. GC PARA 8.3.1 is deleted. If Contractor is delayed in the
performance of the Work beyond the scheduled Substantial Completion Date set
forth in the Agreement by any Excusable Delay (as defined below), then such
date(s) shall be extended by Change Order for such reasonable time as is
appropriate under the circumstances, as approved by Owner and Contractor, which
approvals shall not be unreasonably withheld. No event of Excusable Delay shall
be deemed to have occurred, unless Contractor delivers a written claim of
justifiable delay to Owner and Architect within twenty-one (21) days following
the commencement of the delay. Immediately upon commencement of a delay,
Contractor shall take all steps reasonably available to lessen the adverse
impact of such delay upon Owner.

As used herein, "Excusable Delay" means an actual delay in the performance of
the Work by Contractor caused by any of the following if such events are beyond
the reasonable control of Contractor despite having taken all reasonable
attempts to avoid such delay and to prevent and mitigate the effects thereof:

..1        Actions of Owner, or of any employee, agent, representative or
separate contractor of Owner, or Architect (other than by reason of the proper
exercise of their respective rights, duties and obligations under the Contract
Documents); or

..2        Fire, flood, war, embargo, sabotage, earthquake, or by injunction (not
the fault of Contractor) or other unavoidable damage to the Work not the fault
of Contractor.

..3        Unusually severe weather in accordance with GC PARA 4.3.7.2, as
modified by Paragraph 4.C of this Addendum; or

..4        General strike, regulatory delays (not caused by Contractor), strikes
and/or losses during transportation.

GC PARA 8.3.2 is modified as follows: Claims relating to time shall be made in
accordance with applicable provisions of Paragraph 4.3. Contractor shall have no
remedy for any delay other than an Excusable Delay. In addition to a time
extension, Contractor shall be entitled to reimbursement of its reasonable,
direct, out-of-pocket, additional general conditions costs resulting from any
Excusable Delay, provided, however, that in no event will Contractor be entitled
to recover any damages, additional profit or fee, or any other costs, other than
the forgoing additional general conditions costs.

9.A  PAYMENTS TO CONTRACTOR. GC PARA 9 is amended and supplemented as follows:
Copies of all Applications for Payment shall be submitted to Owner no later than
the last day of any calendar month for any period preceding such date.
Notwithstanding anything to the contrary in the Construction Documents, the
parties acknowledge that Architect will not review or issue Certificates for
Payment, and that Owner shall be entitled to review all Applications for Payment
without consulting with Architect. Owner shall be entitled to withhold amounts
included in an Application for Payment if Owner does not approve such amount as
set forth in this Section 9. Contractor shall submit to Owner the Application
for Payment and all notices and documents required in the Contract Documents to
be provided to Architect in connection with its review of the Application for
Payment or the issuance of a Certificate for Payment. If requested by Owner,
each Application for Payment (after the first) shall be accompanied by an
accounting of the disbursement of funds previously received by Contractor from
Owner, certified to be true and correct by Contractor. Upon the reasonable
request of Owner, such accounting also shall itemize all disbursements to
Subcontractors and Suppliers and Contractor shall deliver to Owner copies of all
vendors' invoices, payroll and other data substantiating actual expenditures by
Contractor for the Work, and upon reasonable request, shall allow Owner to
inspect the books and records of Contractor relating to such expenditures. In
each

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Application for Payment, Contractor shall certify that: (i) the requested
payment represents a just determination of the actual amount payable to
Contractor under the Contract Documents; (ii) the information set forth in the
Application for Payment is correct; (iii) the Contract, to the best of
Contractor's knowledge, is in full force and effect and free from default by any
party (or if Owner is in default, the nature of the default); (iv) any
contingency reserve under the Contract has or has not been utilized, and if
utilized, the amount that remains; (v) all Subcontractors and Suppliers have
been paid all sums that are due and payable to them in full (excluding payments
due which are included in the Application for Payment in question); (vi)
Contractor shall promptly pay all sums due and payable to Subcontractors,
unions, laborers, and Suppliers out of funds to be received pursuant to the
Application for Payment; (vii) no Lien currently affects the Work nor is there
any basis for the filing of a Lien with respect to Work, other than Liens caused
solely by Owner's wrongful withholding of amounts due Contractor under the
Contract or Liens for the Work included in the Application for Payment; (viii)
all amounts due and payable with respect to the Work either have been paid to
date or are included in the Application for Payment; and (ix) partial waivers of
mechanic's liens totaling the amounts previously paid by Owner to Contractor
have been obtained from all Subcontractors and Suppliers in such form as to
constitute an effective waiver, under applicable Law, of all Lien rights with
respect to the Work.

9.B  LIEN RELEASES. GC PARA 9.3 is supplemented as follows: Each Application for
Payment shall be accompanied by partial releases of mechanic's Liens in the form
required or authorized by applicable Washington law for Work costing not less
than the amount of the Contract Sum (less retention) previously paid by Owner to
Contractor and conditional releases of Liens in the form required or authorized
by applicable Washington law for the payments requested in the Application for
Payment. Notwithstanding the foregoing, in no event shall Owner have any
obligation to see to the proper disposition or application of monies paid by
Owner to Contractor.

9.C  MAXIMUM AMOUNT OF EACH APPLICATION FOR PAYMENT. The following is added as
GC PARA 9.3.1.3: Each Application for Payment (other than the final Application
for Payment) shall be in the sum not to exceed ninety-five percent (95%) of the
Cost of the Work performed during the preceding month. In no event shall the
total Contractor's Fee included in all Applications for Payment (other than the
final Application for Payment) exceed ninety-five percent (95%) of the total
Contractor's Fee payable pursuant to the Contract Documents and in no event
shall the total Cost of the Work payable pursuant to all Applications for
Payment (other than the final Application for Payment) exceed ninety-five
percent (95%) of the Guaranteed Maximum Price as of the date of the Application
for Payment.

9.D  PAYMENT FOR MATERIAL. GC PARA 9.3.2 is deleted and replaced with the
following: Payments will be made on account of Materials only when such
Materials have either been (i) incorporated in the Work, or (ii) suitably stored
in a bonded warehouse acceptable to Owner and warehouse receipts therefore have
been delivered to Owner.

9.E  OWNER'S OBLIGATION TO PAY CONTRACTOR. GC PARA 9.4 is deleted and GC PARA
9.5.1 and 9.5.2 are replaced as follows: All Materials, finishes and processes
shall be subject to rejection for just cause by Owner. Acceptance or rejection
of a Material, finish or process shall be expressed only in writing. Any
provision of the Contract Documents to the contrary notwithstanding, Owner also
shall have no obligation to pay Contractor amounts otherwise payable under this
Contract if (i) any of the following circumstances has occurred, (ii) the
occurrence of such circumstances is not solely caused by Owner's wrongful
withholding of amounts payable to Contractor under this Contract, and (iii) such
circumstances have not been remedied or eliminated to Owner's reasonable
satisfaction:

     A. Contractor has failed to make any payment due to Contractor's
     Subcontractors and Suppliers for the material and labor used in the Work;
     or

     B. A claim of Lien has been recorded against Owner's real property, a stop
     notice has been served on Owner, or funds of Owner have been garnished or
     attached in connection with the Work unless Contractor has supplied Owner
     with an acceptable bond; or

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<PAGE>

     C. Reasonable evidence indicates a probability (i) that a claim of Lien
     will be recorded, a stop notice will be served, or funds of Owner will be
     garnished or attached, or (ii) that Contractor has otherwise failed to make
     payments to Subcontractors and Suppliers, unless Contractor has supplied
     Owner with an acceptable bond; or

     D. Owner, in its reasonable good faith judgment, determines that the unpaid
     amount of the Contract Sum plus the cost of any necessary but pending
     Change Orders (after payment of the amount requested in the Application for
     Payment) will not be sufficient to complete the Work in accordance with the
     Drawings and Specifications, in which case Contractor shall perform so much
     of the Work at its sole cost as is necessary to insure that the unpaid
     amount of the Contract Sum plus the cost of any necessary but pending
     Change Orders will be sufficient to complete the Work before Owner shall be
     obligated to make any further payments to Contractor; or

     F. Contractor has failed to perform an obligation on its part to be
     performed under the Contract Documents or under any other contract between
     Contractor and Owner; or

     G. Neither Contractor nor its insurance carrier has reimbursed Owner for
     damage caused to Owner or any other contractor as a consequence of a
     default by Contractor or the acts or omissions of Contractor, or its
     agents, employees, Subcontractors or Suppliers; or

     H. Owner, in its reasonable good faith judgment, determines that the Work
     will not be completed within the Contract Time (as extended by Excusable
     Delays) through no fault of Owner or Architect; or

     I. Contractor persistently and unreasonably fails to carry out the Work in
     accordance with the Contract Documents.

Until all of the foregoing circumstances are remedied to Owner's satisfaction,
Owner may withhold the amount necessary in Owner's reasonable opinion to protect
Owner from the loss that may be occasioned thereby and, if applicable, may
demand reimbursement of amounts previously paid by Owner to Contractor as
necessary to avoid loss to Owner. When all of the foregoing circumstances are
satisfactorily remedied, payments previously withheld by Owner shall be paid to
Contractor.

9.F  METHOD OF PAYMENTS. GC PARA 9.6.1 is deleted. With reasonable cause, Owner
shall have the right to pay Contractor by joint check made payable to Contractor
and any Subcontractor or Supplier to whom all or a portion of such funds may be
due; provided, however, that (i) Contractor shall have no obligation to make
payments by joint check, and (ii) its election to do so in any case shall not
constitute an obligation by Owner to any Subcontractor or Supplier to do so in
the future nor create any contractual relationship whatsoever between Owner and
any Subcontractor or Supplier.

9.G  REVIEW OF APPLICATION FOR PAYMENT. GC PARA 9.7.1 is deleted and replaced by
the following: Owner may review each Application for Payment and may make such
exceptions, by written notice to Contractor, as Owner reasonably deems necessary
or appropriate under the circumstances then existing. Owner may withhold a
payment to Contractor to the extent that it relates to the correction of an
exception reasonably taken by Owner. If Contractor disputes any exception to the
Application for Payment taken by Owner, Contractor shall nevertheless continue
to diligently prosecute the Work and shall notify Owner of its dispute in
writing. If Contractor fails to deliver a written statement disputing an
exception to an Application for Payment taken by Owner within fourteen (14) days
following notice to Contractor of the exception, Contractor shall be
conclusively presumed to have accepted Owner's exception to the Application for
Payment. Owner shall not be deemed in breach of this Contract by reason of
withholding any payment pursuant to any provision of the Contract Documents,
provided (i) Owner has acted in good faith, (ii) Architect has approved Owner's
action, and/or (iii) the Work in question has been rejected by any governmental
authority.

9.H  OWNER'S RIGHT TO PAY SUBCONTRACTOR. If any Subcontractor disputes any
decision of Contractor with regard to any portion of the Work performed by such
Subcontractor, and Contractor has elected not to pay such Subcontractor as a
result of such dispute, in addition to its other rights, Owner shall

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<PAGE>

have the right, in Owner's sole discretion, and after consultation with
Contractor, to pay all or any portion of any amount so claimed by such
Subcontractor unless Contractor supplies Owner with a bond acceptable to Owner
to protect Owner from the dispute. If any Subcontractor, laborer or materialman
asserts any Claim against Contractor, whether or not related to the Work,
Contractor shall take all steps reasonably necessary to protect the Work from
such Claim, including obtaining all assurances otherwise required by the
Contract Documents; and any and all costs incurred by Contractor in connection
therewith shall not be deemed part of the Contract Sum and Owner shall have no
liability therefor, so long as the Claim is not caused by Owner's wrongful
failure to pay the sums payable to Contractor under the Contract Documents.

9.I  FINAL COMPLETION. GC PARA 9.10.4 is deleted. GC PARA 9.10 is supplemented
as follows:

     9.I.1 Punch List. Immediately prior to the Substantial Completion of the
Work, Contractor shall notify Architect and Owner that the Project is ready for
final inspection. Within ten (10) working days following Contractor's notice
that it believes that the Work is substantially complete, Architect and Owner
shall conduct an inspection of the Work and forward to Contractor a
"punch-list", indicating items of the Work requiring completion and items of
unsatisfactory Work. The omission of an item from the "punch-list" shall not
relieve Contractor of its obligation to meet the requirements of this Contract.
All items on the "punch-list" (except for minor, corrective items which do not
in any way interfere with Owner's use and occupancy of the Work) shall be
completed and/or corrected by Contractor to the satisfaction of Architect and
Owner prior to submission of the final Application for Payment.

     9.I.2 Final Payment. Owner shall have no obligation to pay the unpaid
balance of the Contract Sum until (i) the Work and all "punch-list" items have
been completed in accordance with this Contract; (ii) Owner has accepted the
Work and all "punch-list" items; (iii) Contractor has delivered to Owner a
waiver of Lien rights, complying with applicable Law, conditioned only upon
receipt of the funds requested in the final Application for Payment, and
executed by Contractor and by each person or entity entitled to record a claim
of Lien against Owner's real property (or, if any Subcontractor or Supplier
refuses to furnish such waiver, then a Lien bond in form, substance, and amount
satisfactory to Owner, protecting Owner from claims of Liens by such persons);
(iv) Contractor has delivered to Owner an affidavit in a form satisfactory to
Owner stating that the final payment is being requested and that the Lien
releases and/or bonds delivered to Owner include and cover all materials, labor,
and services for which a Lien could be filed against Owner's real property; and
(v) Contractor has delivered to Owner two (2) complete sets of "as-built"
drawings including separate "as-built" drawings for all electrical, plumbing and
mechanical systems included within the Work which drawings shall be executed by
Contractor and all responsible Subcontractors, all guaranties, warranties, shop
manuals, operating binders and maintenance binders applicable to the Work and/or
required by the Specifications. The final payment shall be subject to all
retention provisions of the Contract Documents. Provided all of the foregoing
conditions have been satisfied, except for the completion of minor, corrective
"punch-list" items which do not in any way interfere with Owner's use and
occupancy of the Work, as distinguished from incomplete items, Owner may
withhold from the final payment an amount equal to twice the cost of correction
of all such items until the last of the items has been corrected. If Contractor
fails to make such corrections within thirty (30) days after the final payment,
then Owner may make the corrections and deduct the costs from the amount
withheld therefor.

10.A HAZARDOUS MATERIALS. GC PARA l0.4 and 10.5 are deleted. GC PARA l0.3 is
supplemented as follows: Contractor and each Subcontractor (i) shall not cause
or permit any hazardous material to be brought upon the Site or used in the Work
without the prior written consent of Owner, and (ii) shall comply with all Laws
regarding the use, storage, transportation, exposure of employees to, and
disposal of hazardous materials. If the foregoing obligations are breached or if
the presence of a hazardous material on the Site caused or permitted by
Contractor or its Subcontractors or Suppliers results in contamination of the
Site, or if contamination of the Site by hazardous materials for which
Contractor is legally liable to Owner for damage resulting therefrom otherwise
occurs, then Contractor shall indemnify, defend and hold Owner harmless from any
and all Claims which arise as a result of the breach of such obligation or such
contamination. The foregoing indemnification of Owner by Contractor includes,
without limitation, costs incurred in connection with any investigation of the
Site or any clean-up, remedial, removal, or restoration work required by any
federal, state or local governmental agency, because of hazardous materials
present in

                                       11

<PAGE>

the soil or groundwater on or under the Site. If Owner knowingly fails to
disclose the presence of hazardous materials on the Site to Contractor or
Architect, then Owner shall indemnify and hold harmless Contractor and its
employees, agents, contractors from all Claims caused by Owner's concealment of
the presence of such hazardous materials, except to the extent that such Claim
is covered by insurance or other sources of reimbursement to the indemnified
party and except to the extent that the Claim results as a consequence of the
negligence or willful misconduct of Contractor or its employees, agents or
contractors. As used in this paragraph, the term "hazardous material" shall mean
any hazardous or toxic substance, material or radioactive material which is or
becomes regulated by any local, federal, governmental authority.

10.B PROTECTION OF PERSONS AND PROPERTY. GC PARA lO.2 is supplemented and
modified as follows: Contractor assumes all risk of loss of, or damage to, its
materials or equipment and the materials and equipment of its Subcontractors,
Suppliers, and employees due to theft or vandalism or malicious mischief and
shall furnish any watchman's services reasonably required to protect the Work.
Until incorporated into the Work, all materials ordered by Contractor or any of
its Subcontractors which are delivered to the Site shall be the responsibility
of Contractor, who shall provide for the care, protection, and security for such
materials, and shall bear the risk of loss with respect to such materials, until
they are incorporated into the Work.

11.A CONTRACTOR'S INSURANCE. GC PARA 11.1 and PARA 11.2 are deleted and replaced
by the following:

11.1 Contractor's Liability Insurance.

Contractor shall at his expense, procure and maintain insurance on all of his
operations, in insurance companies with a Best's Insurance Rating of A- (VII) or
better or otherwise acceptable to Owner, as follows:

(a) Workers' Compensation and Employers Liability Insurance. Workers'
    Compensation insurance shall be provided as required by any applicable law
    or regulation. Employers Liability insurance shall be provided in amounts
    not less than $1,000,000 each accident for bodily injury by accident,
    $1,000,000 policy limit for bodily injury by disease and $1,000,000 each
    employee for bodily injury by disease.

    If there is an exposure of injury to Contractor's employees under the U.S.
    Longshoremen's and Harbor Workers' Compensation Act, the Jones Act or under
    laws, regulations or statutes applicable to maritime employees, coverage
    shall be included for such injuries or claims.

(b) General Liability Insurance. Contractor shall carry Commercial General
    Liability insurance covering all operations by or on behalf of Contractor
    providing insurance for bodily injury liability and property damage
    liability for the limits of liability indicated below for:

       (1)  premises and operations;
       (2)  products and completed operations;
       (3)  contractual liability insuring the obligations assumed by
            Contractor in this Agreement;
       (4)  broad form property damage (including completed operations);
       (5)  explosion, collapse and underground hazards; and
       (6)  personal injury liability (with deletion of the exclusion for
            liability assumed under contract).

       The limits of liability shall not be less than:

         $1,000,000 each occurrence (combined single
            limit for bodily injury and property damage)
         $1,000,000 for personal injury liability $2,000,000 aggregate for
            products completed operations
         $2,000,000 general aggregate

                                       12

<PAGE>

    The "general aggregate" limit shall apply separately to Contractor's work
    under the Contract. Contractor shall not obtain a claims made policy
    without the express prior written consent of Owner.

    Owner, its officers, directors and employees and Landlord shall be named as
    additional insureds. The policy shall be endorsed to stipulate that the
    insurance afforded the additional insureds shall apply as primary insurance
    and that any other insurance maintained by Owner or Landlord shall be
    excess only and shall not be called upon to contribute with this insurance.

    Coverage for Owner, its officers, directors and employees and Landlord as
    additional insureds shall be provided by a policy provision or by an
    endorsement providing coverage at least as broad as Additional Insured
    (Form B) endorsement form CG 2010 as published by the Insurance Services
    Office (ISO).

    Contractor shall continue to maintain liability insurance for the
    products-completed operations hazard for three years following completion
    of and acceptance of the Work by Owner. Contractor shall furnish
    Certificates of Insurance annually to Owner at the beginning of each of
    these subsequent three years as evidence of this required insurance.

(c) Automobile Liability Insurance. (Bodily Injury and Property Damage
    Liability) including coverage for all owned, hired and non-owned
    automobiles. The limits of liability shall not be less than $1,000,000
    combined single limit for each accident.

(d) Umbrella Liability and/or Excess Liability Insurance. Contractor shall
    carry Umbrella Liability and/or Excess Liability Insurance for not less
    than the following limits in excess of the limits provided by Contractor's
    Commercial General Liability and Auto Liability policies:

    $5,000,000  each occurrence (combined single limit for bodily injury and
                property damage)
    $5,000,000  aggregate for products-completed operations
    $5,000,000  general aggregate

The "general aggregate" limit shall apply separately to Contractor's work under
this Contract.

Owner, its officers, directors, and employees shall be additional insureds under
Contractor's Umbrella Liability or Excess Liability policy and the policy shall
provide that the insurance afforded such additional insureds shall apply as
primary insurance and that any other insurance maintained by Owner will be
excess only and will not contribute with this insurance.

(e) The limits of liability required by this Section 11.1 may be satisfied by a
    combination of limits provided by the primary Commercial General Liability
    and Auto Liability policies plus limits provided by Umbrella or Excess
    Liability policies.

(f) Certificates of Insurance shall be furnished by Contractor to Owner before
    any Work is commenced hereunder by Contractor. The Certificate of Insurance
    shall provide that there will be no cancellation or non-renewal of coverage
    without thirty (30) days prior written notice to Owner.

    The Certificate or Insurance furnished as evidence of Commercial General
    Liability insurance carried by Contractor shall include a copy of the
    policy provision or the additional insured endorsement adding Owner as
    additional insured and providing that such insurance applies as primary
    insurance and will not call upon other insurance maintained by Owner for
    contribution.

(g) If Contractor does not comply with the insurance requirements of this
    paragraph 11.1, Owner may, at his option, provide insurance coverage to
    protect Owner and Contractor and charge Contractor for the cost of that
    insurance. The required insurance shall be subject to the approval of
    Owner, but any

                                       13

<PAGE>

    acceptance of insurance certificates by Owner shall not limit or relieve
    Contractor of the duties and responsibilities assumed by it under this
    Contract.

(h) Subcontractors Insurance. Contractor shall require that each of its
    subcontractors obtain and maintain at all times during the period
    Subcontractor is performing Work for Contractor the insurance described on
    the attached sample insurance certificate.

11.C.1 OWNER'S INSURANCE. GC PARA 11.4.1.2, 11.4.3, 11.4.4, 11.4.6, 11.4.9
(first two sentences only), and 11.4.10 (the words "unless one of..." and
following to end of paragraph only) are deleted. The words "as fiduciary" are
deleted wherever they appear in GC PARA 1.4 and the remainder of GC PARA 11.4 is
supplemented as follows: Owner's insurance (i) shall be placed promptly in the
names of the Owner and at the Owner's option, any other person(s) whom the Owner
deems to have an insurable interest in the Owner's real property and/or the
Work, or any part thereof, and (ii) shall be payable as the respective interests
of said named insureds may appear. The policy shall be retained and held by
Owner and shall not insure against loss, damage, or destruction of any tools,
supplies, equipment or temporary structures located in, on or about the Owner's
real property, which are the property of Contractor, or any Subcontractor,
Supplier, or person directly or indirectly employed by or under contract with
Contractor or its Subcontractors and Suppliers. A copy of any policy (or
certificate thereof) required of Owner by the Contract Documents shall be
delivered to Contractor upon demand.

11.C.2 ADJUSTMENTS UPON DAMAGE AND DESTRUCTION. If the Work is damaged or
destroyed prior to the recordation of a Notice of Completion, then, at its
election, Owner may either (a) terminate this Contract in accordance with
Section 2.B.3, or (b) issue a Change Order, complying with Section 7.A,
providing for restoration of the damaged Work, in which case the Guaranteed
Maximum Price and Contract Time shall be appropriately adjusted based on the
extent of such damage and the efforts that will be required to complete the
restoration.

12.A UNCOVERING WORK. GC PARA 12.1 is modified as follows: Contractor shall give
Architect and Owner at least twenty-four (24) hours advance notice if
uninspected Work will be covered by other Work. Contractor shall pay for the
cost of uncovering any Work for Architect's inspection if Contractor failed to
give such notice, regardless of whether or not the inspected Work conforms to
the Contract Documents.

12.A.1 After Substantial Completion. GC 12.2.2.1 (the third sentence only) is
deleted.

12.B CORRECTION OF WORK. GC PARA 12.2.4 is supplemented as follows: all Work not
conforming to the Contractor Documents, including without limitation
substitutions not properly approved and authorized shall be considered
defective. In addition to its other rights and remedies at law or in equity or
under the Contract Documents, Owner may correct any non-conforming Work (i)
which Contractor does not undertake to correct within five (5) days following
written notice from Owner or Architect to Contractor of the need for such
correction or which Contractor fails to continue to correct thereafter with due
diligence, or (ii) without notice, in the case of an emergency. Contractor shall
repair any consequential damage to Owner's property caused by any Work furnished
by Contractor, which does not conform to the Specifications or the Contract
Documents.

13.A GOVERNING LAW; INTERPRETATION. GC PARA 13.1.1 is supplemented as follows.
The invalidity of any provision of the Contract Documents (other than the amount
of the Contract Sum) shall not impair or affect in any manner whatsoever the
validity or enforceability of any other provision of the Contract Documents.

13.B SUCCESSORS AND ASSIGNS. GC PARA 13.2.1 (second and third sentences only)
are deleted. Without Contractor's consent, Owner and any permitted assignee or
successor to Owner hereunder shall have the right to assign the Contract
Documents, or any interest therein, to (i) any lender to Owner, (ii) the owner
of the fee interest in the Project or (iii) any corporation, partnership or
other person which is under common control with Owner or which is controlled by
Owner. At its discretion, but only with Contractor's consent (which consent
shall not be unreasonably withheld or delayed), Owner and any permitted assignee
or successor to Owner, shall have the right to assign the Contract Documents, or
any interest therein, to any

                                       14

<PAGE>

other successor owner of the Site. Contractor shall execute an acknowledgment of
any assignment by Owner in a form reasonably requested by Owner. Owner is
relying upon the professional standing and ability of Contractor in the
performance of the Work. Consequently, Contractor shall have no right to assign
the Contract Documents, sublet them as a whole, or assign any monies due or to
become due to Contractor under the Contract Documents, without the prior written
consent of Owner, which consent may be withheld in Owner's sole discretion.

13.C COMMENCEMENT OF STATUTORY LIMITATION PERIOD. GC 13.7.1 is deleted.

14.A TERMINATION BY CONTRACTOR. GC PARA l4.1.1, 14.1.2, and 14.1.3 are deleted.
Contractor may suspend the Work (i) if Owner fails to pay or to object to an
approved Application for Payment for a period of thirty (30) days after notice
of delinquency is received by Owner, (ii) pursuant to an order of any court or
other public authority having jurisdiction, or (iii) as a result of an act of
government, such as a declaration of a national emergency making Materials
unavailable. If the Work is properly suspended for a period of thirty (30) days
or more by Contractor, then Contractor shall also have the right to terminate
the Contract and recover from Owner payment for all Work completed and in place
as of the date of the termination, plus, if the suspension is caused by Owner's
failure to make payments when it was obligated to do so by the Contract
Documents, Contractor also may recover from Owner any amounts recoverable at Law
on account of Owner's breach, including reasonable profit and damages.

14.B DEFAULT BY CONTRACTOR. GC PARA 14.2 and 14.4 are deleted and the following
provision shall apply:

14.B.1 Events of Default. Any of the following events shall be deemed to be a
material default by Contractor under the Contract Documents: (i) failure by
Contractor to prosecute the Work diligently or properly without reasonable
cause; or (ii) failure by Contractor to make prompt payment of amounts due to
any Subcontractor or other Supplier of Material or labor to the Work; or (iii)
failure by Contractor to comply with any applicable Law; or (iv) failure by
Contractor to perform any other obligation or to comply with any term, provision
or condition of the Contract Documents for a period of ten (10) days following
receipt of written notice of such default from Owner; or (v) commencement and
continuation for at least thirty (30) days of any case, action, or proceeding
by, against, or concerning Contractor under any federal or state bankruptcy,
insolvency, or other debtor's relief law, or concerning a financial
reorganization and arrangement with any of Contractor's creditors; or (vi)
voluntary or involuntary appointment of a receiver, trustee, or other person,
which takes possession for more than thirty (30) days of substantially all of
Contractor's assets or of any asset used in connection with the Work, regardless
of whether such appointment is a result of insolvency or any other cause; or
(vii) execution by Contractor of an assignment for the benefit of its creditors
covering any asset used in connection with the Work or substantially all of
Contractor's assets available by law for the satisfaction of judgments; or
(viii) levy of a writ of attachment or execution on any of Contractor's
equipment, tools, machinery, or its interest in the Contract Documents, if such
writ continues for a period of ten (10) days; or (ix) a default by Contractor
under any other contract between Contractor and Owner; or (x) repeated failure
by Contractor to perform its obligations under the Contract Documents in a
timely or satisfactory fashion, which materially interferes with Owner's
schedule for completion of the Work.

14.B.2 Owner's Remedies on Account of Contractor's Default. Upon the occurrence
of an event of material default by Contractor, at Owner's sole election, Owner
shall have the right to pursue any and all remedies it may have at law or in
equity, including (i) the right to keep the Contract in effect and sue
Contractor for all damages caused by the default, (ii) the right to cure any
such default and recover the cost thereof from Contractor along with any damages
caused thereby, and/or (iii) the right to terminate this Contract, in whole or
in part. If Owner elects to terminate this Contract, it shall have the right to
pursue any or all of the following: (i) Owner may engage others to complete
Contractor's performance at Contractor's expense; (ii) Owner may recover from
Contractor upon demand payment of the difference between the unpaid balance of
the Contract Sum and the estimated reasonable value of the cost to complete
Contractor's performance; (iii) following completion of the Work, Owner may
recover from Contractor the difference between the unpaid balance of the
Contract Sum and all costs and expenses incurred by Owner to complete the Work
(including interest on Owner's expenditures from the date the costs and expenses

                                       15

<PAGE>

incurred by Owner exceed the unpaid balance of the Contract Sum until repayment
by Contractor, at the interest rate described in GC PARA 13.6.1; and (iv) Owner
may recover from Contractor all damages, costs, expenses, attorneys' fees,
experts' fees, court costs, and lost profits, of any kind and nature, directly
or indirectly related to the default. Notwithstanding the foregoing, if
Contractor fails to perform its obligations under the Contract Documents or if a
material event of default as defined above should otherwise create an emergency
effecting the safety of persons or property, then without the need for any
notice or the allowance of any cure period whatsoever, Owner may take such
action as it in good faith deems appropriate to eliminate the risk of harm, and
upon demand Contractor shall reimburse Owner for the costs and expenses so
incurred by Owner with interest thereon at the interest rate stipulated in the
Contract Documents for past due payments from the date of the expenditure until
repaid..

14.B.3 Owner's Election to Terminate. In addition to Owner's right to terminate
on account of Contractor's default, Owner may terminate the Contract and the
Work, in whole or in part, by written notice to Contractor at any time, for any
reason or no reason. If Owner so elects to terminate the Contract, and
Contractor is not then in default under the Contract, Owner shall pay to
Contractor the unpaid Cost of the Work, earned, due and payable to Contractor as
of the termination date with respect to the Work that has been completed and the
Contractor's Fee shall be equitably reduced to reflect the amount of Work that
will not be performed. Contractor hereby waives all claims for damages and loss
of anticipated profits on account of Owner's termination of the Contract (other
than Contractor's right to an adjusted Contractor's Fee as described above);
and, as the sole right or remedy of Contractor on account of such termination,
Contractor shall receive the amounts payable to Contractor under the Contract.

14.B.4 Contractor's Obligations Upon Any Termination. Upon receipt of any
termination notice under the Contract Documents (whether due to Contractor's
default or otherwise), unless the notice directs otherwise, Contractor shall (i)
immediately discontinue the Work and, to the extent specified in the notice,
place no further orders or subcontracts for Materials or labor (except as may be
necessary for completion of such portions of the Work as are not discontinued);
(ii) promptly make every reasonable effort to procure cancellation, upon terms
satisfactory to Owner, of all orders and subcontracts to the extent they relate
to the performance of the discontinued portion of the Work; and (iii) thereafter
do only such Work as may be necessary to preserve and protect Work already in
progress and to protect materials on the Site or in transit thereto. Upon
partial termination of the Work, the obligations of Contractor shall continue as
to the portions of the Work performed and the obligations assumed by Contractor
prior to the date of termination.

14.B.5 Contractor's Obligations Following Termination Based on Contractor's
Default. If Owner terminates this Contract on account of Contractor's default,
in addition to its obligations under Section 14.B.4 above, Contractor shall
promptly and peaceably vacate the Site and at Owner's election, Owner may, (i)
take possession of the Site and of all Materials, equipment, tools, construction
equipment and machinery thereon owned by Contractor and Owner may finish the
Work by whatever method it may deem expedient, or (ii) cease construction and
require Contractor to promptly remove from the Site at Contractor's expense all
Materials, equipment, tools, and construction equipment owned by Contractor.
Owner shall pay to Contractor fair compensation (at the election of Owner either
by purchase at fair market value or by rental at the prevailing rate of the
locale) for any equipment owned by Contractor and used by Owner during the
completion of the Work. Upon demand, (i) Contractor shall assign and deliver to
Owner all drawings, specifications, subcontracts, documents, tangible and
intangible property, and contractual rights as Owner may demand for the purpose
of completing the Work, and (ii) Contractor shall execute and deliver to Owner
such written documentation as Owner may request for the purpose of evidencing
the vesting in Owner of the rights and benefits of Contractor with respect to
the documents and rights so delivered and assigned.

14.B.6 Further Payments to Contractor. If Owner terminates the Contract as
provided in the Contract Documents on account of Contractor's default and elects
to complete the Work, Contractor shall not be entitled to receive any further
payments under this Contract until said Work is fully completed. Upon completion
of the Work, if the expenses reasonably incurred by Owner in completing the Work
(including, without limitation, payments made by Owner to any party supplying
labor, Materials, equipment, services and the like for the Work and cost
incurred by Owner for managerial, administrative, or supervisorial services)
plus the amounts previously paid by Owner to Contractor exceeds the Contract
Sum, Contractor

                                       16

<PAGE>

shall pay Owner upon demand the amount of such excess, plus interest thereon at
the rate specified in GC PARA 13.6.1. In all other cases of termination for
Contractor's default, Owner's liability to Contractor shall be limited to
reimbursement to Contractor of the unpaid Contract Sum earned, due and payable
to Contractor as of the date of the termination, less (i) any amounts owing to
Owner by Contractor under the terms of the Contract Documents, and (ii) all
costs, expenses, damages, attorneys' fees, experts' fees, court costs, and lost
profits incurred by Owner as a consequence of Contractor's default.

15.A MISCELLANEOUS PROVISIONS. GC PARA 15.1 and 15.2 are deleted.

     IN WITNESS WHEREOF, the parties hereto have executed this Addendum
intending to be bound thereby.

CONTRACTOR                                  OWNER

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

By:                                         By:
    ------------------------------------       ---------------------------------

Printed Name:                               Printed Name:
              --------------------------                  ----------------------

Title:                                      Title:
       ---------------------------------          ------------------------------

                                       17

<PAGE>

                                    EXHIBIT D

                               TO LEASE AGREEMENT

                              RULES AND REGULATIONS

1.   Any directory provided by Landlord for the Building will be for the display
     of the name and location of tenants and subtenants of the Building, and
     Landlord reserves the right to exclude any other names from inclusion in
     any such directory.

2.   Tenant shall not place any new or additional locks on any exterior doors of
     the Premises or re-key any existing locks on exterior doors without the
     prior written consent of Landlord, which consent shall not be unreasonably
     withheld.

3.   Landlord reserves the right to exclude or expel from the common areas any
     person who, in the sole judgment of Landlord, is intoxicated, under the
     influence of drugs or who shall in any manner violate any of these Rules
     and Regulations.

4.   Tenant shall not do or permit to be done within the Premises, the building
     or parking loading or other adjoining common areas, anything, which would
     unreasonably annoy or interfere with the rights of other tenants of the
     Building.

5.   Tenant shall not permit its employees or invitees to loiter in or about the
     common areas or obstruct any of the parking, truck maneuvering or other
     common areas, or to place, empty or throw away rubbish, litter, trash or
     material of any nature upon any common areas.

6.   No storage of materials, equipment or property of any kind is permitted
     outside the Premises unless otherwise approved in writing by Landlord and
     any such property may be removed by Landlord at Tenant's risk and expense.

7.   Tenant shall not make or permit any use of the Premises which in the
     reasonable judgment of Landlord, may be unreasonably dangerous to persons
     or property; permit any noise, odor or vibrations to emit from the Premises
     which are unreasonably objectionable to Landlord or other occupants of the
     Building; or to create, maintain or permit a nuisance or any violation of
     any regulation of any governmental agency thereon.

8.   Tenant shall not commit or permit to be committed any waste, damage or
     injury to the Premises, the Building or parking, loading and other common
     areas adjoining and shall promptly notify Landlord in writing of such
     waste, damage or injury by Tenant and repair the same at its expense.

9.   Tenant understands that any equipment required for maintenance of the
     Premises is Tenant's responsibility and that Landlord has no equipment
     available for Tenant's use therefore (e.g. ladders or lifts for re-lamping,
     etc.).

10.  Tenant shall use the Premises and shall operate its equipment on the
     Premises in a safe and prudent manner, and any damage or cracks occurring
     in the floor of the Premises caused by Tenant shall be promptly brought to
     the attention of Landlord by written notice and repaired by Tenant at its
     expense.

11.  Tenant shall not at any time display a "For Rent" sign upon the Premises.

12.  Tenant shall be responsible for keeping a copy of the Lease and Landlord's
     current rules and regulations upon the Premises.

13.  Tenant agrees to cause its employees to park only in such designated areas
     as may be designated by Landlord from time to time for employee parking and
     shall abide by any rules or regulations concerning parking promulgated by
     Landlord, or Landlord's agent, from time to time.

Office Lease Agreement-NNN

                                       D-l

<PAGE>

14.  Tenant shall not waste electricity or water and agrees to cooperate fully
     with Landlord to assure the most effective and economical use of utilities
     services as may be provided to the Building by Landlord.

15.  Tenant shall keep Landlord advised of current telephone numbers of Tenant's
     employees who may be contacted in an emergency, i.e., fire, break-in,
     vandalism, etc. If Landlord shall deem it necessary, in its sole judgment,
     to respond to such emergency in Tenant's behalf, Tenant shall pay all costs
     incurred for services ordered by Landlord to secure or otherwise protect
     the Premises and the contents thereof, including a reasonable premium
     charge for any time spent by Landlord's employees in responding to such
     emergency.

16.  Tenant shall not smoke, and shall cause its employees, contractors, agents
     and invitees to refrain from smoking, in the Building except in such areas
     as may be designated as smoking areas by Landlord, if any. In the event
     that Tenant desires to allow smoking in its Premises and such smoking is
     permitted under applicable laws, then Tenant, at Tenant's sole expense and
     subject to the requirements of Section 9 (Improvements And Alterations By
     Tenant), shall first take such action as may be necessary to have a smoke
     exhaust system installed in the Premises that is reasonably acceptable to
     Landlord.

17.  No pets or other animals are permitted on the Property, including the
     Premises, at any time except: (i) dogs which are present on the Property or
     Premises in their capacity of providing assistance to a disabled person;
     and (ii) laboratory animals of tenants leasing laboratory space and
     pursuant to terms agreed upon by Landlord in writing prior to such animals
     being brought onto the Property.

18.  Subject to the terms and conditions of this Lease, any cost incurred for
     direct services provided to Tenant beyond Normal Business Hours at Tenant's
     request, shall be reimbursable to Landlord or Landlord's Management Agent.
     Such direct costs to include after-hours labor charge for "on-call"
     assistance as may be requested by Tenant or Tenant's employees. A minimum
     three (3) hour charge shall be assessed per Tenant request.

19.  Landlord shall not unlock the Premises door for any person known or unknown
     as an employee of Tenant without a waiver in writing by Tenant indemnifying
     Landlord to do so and under what conditions. Tenant acknowledges that in
     the event Landlord or Building security responds to a request for someone
     to go to the Property to unlock a door, a minimum Two Hundred Fifty Dollars
     ($250.00) will be charged if Landlord's employees unlock the door, and
     Seventy-five Dollars ($75.00) if Building security responds to the request.

Office Lease Agreement-NNN

                                       D-2

<PAGE>

                                    EXHIBIT E
                                       TO
                                 LEASE AGREEMENT

                           [LOGO OF SABEY CORPORATION]

                           TENANT CONSTRUCTION MANUAL

                                       FOR

                               ELLIOTT PARK NORTH

<PAGE>

                                SABEY CORPORATION

                        TENANT CONSTRUCTION MANUAL (TCM)

                                    CONTENTS

I.        INTRODUCTION.........................................................3
          A. LANDLORD CONTACTS

II.       DESIGN CRITERIA......................................................4
          A. DRAWINGS
          B. SALVAGE
          C. SIGNAGE
          D. SCREEN WALLS
          E. LANDSCAPING MITIGATION
          F. DUCT PENETRATIONS
          G. CODE COMPLIANCE
          H. AIR QUALITY
          I. SYSTEM COMPATIBILITY
          J. TRENCHING
          K. EQUIPMENT-MECHANICAL, ELECTRICAL, ETC.
          L. ELECTRICAL/COMMUNICATION
          M. HVAC
          N. FIRE PROTECTION
          O. OCCUPANCY SIGNS
          P. EXIT SIGNS
          Q. DOORS
          R. INTERIOR FINISHES
          S. PHONE/DATA INSTALLATION AND RESPONSIBILITIES
          T. FUEL STORAGE TANKS DESIGN & MAINTENANCE
          U. MISCELLANEOUS PROVISIONS

III.      LANDLORD'S REVIEW....................................................7
          A. LANDLORD'S SUBMITTAL AND APPROVAL PROCESS

IV.       APPROVAL TO PROCEED..................................................9

V.        PRE-CONSTRUCTION REQUIREMENTS........................................9
          A. PRE-CONSTRUCTION MEETING
          B. EMERGENCY RESPONSE PLAN
          C. CONTRACTOR SITE LAYOUT PLAN
          D. CONTRACTOR LIST
          E. PRE-CONSTRUCTION INSPECTION
          F. SPACE ACCEPTANCE
          G. CONSTRUCTION UTILITIES CHARGE

 VI.      CONSTRUCTION........................................................10
          A. STOP WORK
          B. CONSTRUCTION OBSERVATION
          C. SUPERVISION
          D. ABNORMAL CONDITIONS/FUMES
          E. SYSTEM SHUTDOWNS
          F. FIRE PROTECTION
          G. CONSTRUCTION MEETINGS
          H. CONFLICTS
          I. MATERIALS

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                                SABEY CORPORATION

                        TENANT CONSTRUCTION MANUAL (TCM)

                                    CONTENTS

          J. WELDING/HOT WORK
          K. ON-SITE DRAWINGS
          L. LANDLORD'S REQUIRED CONTRACTORS
          M. ON-SITE PARKING
          N. INSURANCE
          O. MISCELANEOUS PROVISIONS

VII.      HOUSEKEEPING AND MATERIAL HANDLING..................................13
          A. CONSTRUCTION WASTE
          B. MOVEMENT OF MATERIALS
          C. FLOOR AND WALL PROTECTION
          D. DAILY CLEANING
          E. CONSTRUCTION PRE-FILTERS
          F. DUST BARRIERS
          G. HAZARDOUS MATERIALS
          H. EQUIPMENT UPKEEP
          I. SPOILS
          J. WASH OUT AREA

VIII.     TENANT'S CONSTRUCTION DRAWINGS/AS-BUILTS............................14

IX.       INSPECTIONS.........................................................15
          A. INSPECTION BY GOVERNING AGENCIES
          B. CERTIFICATE OF OCCUPANCY

X.        PUNCHLIST/OBSERVATIONS BY LANDLORD..................................15

XI.       LANDLORD'S FINAL ACCEPTANCE.........................................16

XII.      GOOD FAITH INSPECTION FOR ASBESTOS..................................16

XIII.     CHECKLISTS/FORMS....................................................17
          A. PRE-CONSTRUCTION MEETING CHECKLIST
          B. PRELIMINARY SUBMITTAL FORM
          C. FINAL SUBMITTAL FORM
          D. SWORN STATEMENT AND INDEMNITY FORM
          E. FINAL LIEN RELEASE FORM
          F. REQUIRED INSURANCE COVERAGE CHECKLIST

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I.      INTRODUCTION

To our Tenants at ELLIOTT PARK NORTH:

Welcome! This Tenant Construction Manual (TCM) provides the Tenant an outline
for establishing the general rules, guidelines and conditions of work within and
about the Premises. The Tenant must also provide a current copy of this manual
to their Contractors, Architect, Engineer(s) and Designers prior to any
improvements or alterations.

In the instance that this TCM is an exhibit to the Lease, the Lease will take
precedence if there are conflicts between these documents.

The general rules and conditions in this manual are to be used as a guideline
and may be subject to change at the discretion of the Landlord. Additional
copies of this TCM may be obtained from the Construction Coordination Manager at
a cost of $25.00 each. Prior to construction, it is the Tenant's responsibility
to ensure that this TCM is the most current TCM at the time of construction. An
updated copy of the TCM may be requested from the Landlord's Representative at
no charge.

The Construction Coordination Manager is the Landlord's Representative and
contact regarding Landlord's design requirements, submittals, and construction
issues.

The Tenant, at least fourteen (14) days prior to construction commencement, must
provide Landlord with Submittal Documents, per section III of this TCM, for
approval.

The following contacts are provided to assist with the construction phase:

OWNER
ELLIOTT PARK LLC
c/o John Sabey
Sabey Corporation
12201 Tukwila International Blvd.
Fourth Floor
Seattle, WA 98168-5121
P 206.281.8700
F 206.282.9951

LANDLORD REPRESENTATIVE
Sabey Corporation
Theresa Yee, AIC, CPC
Construction Coordination Manager
12201 Tukwila International Blvd.
Fourth Floor
Seattle, WA 98168-5121
P 206.281.8700
F 206.281.0920

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II.     DESIGN CRITERIA
        A.      DRAWINGS
                Prior to design, Tenant shall request the Landlord's most
                current CADD Master Background Compact Disk (CD) for the
                Premises. Tenant's design shall be incorporated into this Master
                Background. This Master Background shall also be used for
                as-builts of existing and constructed conditions, as required
                per Section VIII-Tenant's Construction Drawings/As-Builts. A
                copy of the as-builts in the CADD format (as originally received
                in the Landlord's Master Background) shall be returned to
                Landlord at project completion.

        B.      SALVAGE
                Landlord reserves the right to salvage removed equipment and
                materials not previously designated and approved for use in the
                new construction. Tenant's Contractor is to coordinate with
                Landlord for a 'Salvage Walk-Thru' to designate materials to be
                salvaged. Salvageable materials may include but are not limited
                to: casework, carpet, doors, relites, frames, power panels and
                switch gear, light fixtures and HVAC equipment, grilles and
                registers. These materials and/or equipment will be removed by
                Tenant's Contractor in such a manner as to avoid damage or loss
                of parts or components, and will be moved to a location as
                directed by Landlord's Representative. All material not salvaged
                or reused is to be removed and disposed of off-site in a lawful
                manner by Tenant's Contractor.

        C.      SIGNAGE
                Tenant/Tenant's Contractor must submit for Landlord's approval
                all sign posting plans prior to placement of signs in or about
                the property. Some posting examples include:
                    .  Contractors Company Name/Job Sign
                    .  Reserved Parking
                    .  Restricted Area
                    .  No Smoking

        D.      SCREEN WALLS
                Tenant/Tenant's Contractor must obtain Landlord's approval for
                all equipment yards, storage yards, and roof top equipment and
                like areas, that would service Tenant's Premises. The Landlord
                reserves the right to request screen fencing or walls that meet
                the Landlord's Building standards for such areas, at Tenant's
                expense.

        E.      LANDSCAPING MITIGATION
                Any Landscaping areas being removed by Tenant or Tenant's
                Contractor shall be replaced per Landlord's Standard Landscape
                Replacement Ratios. Tenant or Tenant's Contractor shall be
                responsible for providing and installing an approved irrigation
                system within Tenant's landscape area or a location approved by
                the Landlord.

        F.      DUCT PENETRATIONS
                Tenant's Contractor must ensure all ducts penetrating rated
                walls, ceilings or shafts have fire dampers with a rating equal
                to the wall or ceiling being penetrated. All penetrations,
                including previously abandoned penetrations, will be fire sealed
                and caulked. When required to be tied into the Building Fire
                Panel, the Landlord's Fire Control contractor shall be used for
                the tie-in. Fire rated integrity of all rated walls, shafts and
                plenums must be maintained and preserved.

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        G.      CODE COMPLIANCE
                Tenant's Contractor must comply with all federal, state, and
                local codes and ordinances. These include ADA (Americans with
                Disabilities Act) Standards, seismic stability, electrical,
                mechanical, fire protection, etc. codes and ordinances.

        H.      AIR QUALITY
                Tenant's Contractor must ensure air qualities are tested and
                monitored for hazardous conditions within confined spaces and
                under slab. Tenant's Contractor must adhere to all federal and
                state regulations pertaining to work performed within confined
                spaces. Contractor is responsible to ensure that the air quality
                is maintained in all areas adjacent to their work area or those
                areas served by the common HVAC system.

        I.      SYSTEMS COMPATIBILITY
                Tenant's Contractor must ensure all work, equipment, methods,
                controls, etc. are compatible with and integrated into the
                existing Building equipment, systems and controls. Any required
                modification to building systems will be done by Landlord's
                Required Contractor at Tenant's expense. Also see section VI
                -Construction, Subsection L, regarding Landlord's Required
                Contractors.

        J.      TRENCHING
                1.      Interior Trenching
                        All interior trenching shall be restored to equal or
                        exceed the original Building specifications and
                        finishes. All work shall be approved and inspected by
                        the Landlord's engineer(s) at Tenant's expense.

                2.      Exterior Trenching
                        All exterior trenching shall be cut based on the best
                        practices of the industry. Backfilling of trenching
                        shall be in accordance with the recommendations of the
                        Landlord's engineer(s) at Tenant's expense. At the
                        minimum, trenching shall be restored to equal or exceed
                        the original specifications and finishes.

                3.      Dewatering
                        In trenches where dewatering is required or soils exceed
                        the optimum moisture levels, the Landlord's engineer(s)
                        shall review these trenches. At Tenant's expense, the
                        engineer(s) will make recommendations and supervise the
                        backfilling activity.

                4.      No reclaimed materials shall be allowed as backfill
                        material.

        K.      EQUIPMENT -Mechanical, Electrical, Etc.
                1.      All installed electrical equipment, including concealed
                        equipment, within the building and Tenant's Premises,
                        must be labeled indicating the power source.
                2.      All roof top equipment must be labeled with Tenant's
                        name and power source. Also label the pipes, conduits,
                        wires, etc that feed the equipment.
                3.      Tenant's Contractor must label all mechanical and
                        electrical components (concealed above ceiling) with the
                        appropriate colored 3/4" dots on the ceiling grid. The
                        color coding system is as follows:

                        HVAC UNITS/EXHAUST................BLUE
                        HVAC CONTROLS.....................ORANGE

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                        WATER (SHUTOFF)...................GREEN
                        GAS...............................YELLOW
                        FIRE SYSTEM.......................RED

                4.      If Tenant use exceeds the system capacity (electrical
                        panel or fire system panel, for example) or its pro rata
                        share, Tenant shall pay for an upgrade to that system.

        L.      ELECTRICAL/COMMUNICATION
                1.      Tenant's Contractor must label all circuits at power
                        panels and on receptacle cover plates. Use 12 point or
                        1/8" black letters mechanically printed on clear tape.
                2.      All electrical wires, data cable, telephone cable,
                        conduits, etc. not in use/abandoned must be pulled
                        back to the electrical panel or power source.
                        Improvements or alterations to any Premises, which
                        contain abandoned wires, must have provisions to remove
                        the previously abandoned wire.
                3.      Electrical panel schedules must be updated any time
                        additional loads or additional breakers are added.

        M.      HVAC
                Tenant's Contractor is required to update all existing HVAC
                controls which are compatible to the Building. Also see section
                K-Equipment.

        N.      FIRE PROTECTION
                Tenant's Contractor must modify existing fire protection systems
                to suit Building, including installation of strobes and other
                ADA compliant devices. Testing of any audible devices must be
                scheduled in advance with the Landlord AND local fire
                department. Also see section K-Equipment.

                Sprinkler control valves must be locked in the open position.

                Drain for the fire sprinkler test drain valve shall be such that
                it is tied into the storm or sanitary drain system as required
                by local code. A provision shall be made for the area
                immediately surrounding the test drain valve outlet site.

                All Post Indicator Valves (PIV's) must be monitored and secured
                open with a padlock. During construction, the PIV's must be kept
                in the open position. If this system needs to be shut for
                repair, modification, and/or construction, the Landlord AND
                local fire department must be notified at least 48 hours in
                advance.

        O.      OCCUPANCY SIGNS
                Tenant's Contractor shall provide occupancy signs conforming to
                applicable codes and requirements.

        P.      EXIT SIGNS
                Tenant's Contractor shall install exit signs in the type, number
                and location as shown on the Construction Documents, or as
                otherwise required by the governing agencies.

        Q.      DOORS
                Tenant's Contractor shall ensure all new exit door hardware
                allows doors to be opened from the inside without key, any
                special knowledge, and meets ADA requirements. If the

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                Tenant's Premises contain building equipment which requires
                Landlord's 24 hours access, the keying must be coordinated with
                Landlord.

        R.      INTERIOR FINISHES
                All interior finishes shall comply with the most current edition
                of the "Uniformed Building Code."

        S.      PHONE/DATA INSTALLATION AND RESPONSIBILITIES
                Providing phone and data services to Tenant's Premises is
                Tenant's direct responsibility. The Landlord will assist Tenant
                in coordinating the process. Tenant shall provide the Landlord,
                for its approval, any and all plans that may have an effect on
                the site or any other areas outside of Tenant's Premises. In
                some cases the Landlord may have installed conduits during the
                site construction phase, in anticipation of future tenant use.
                These conduits may be made available for Tenant's use upon
                request or be used at Landlord's request. Use of Landlord's
                conduits shall be subject to a user fee and shall be assessed on
                an individual basis.

        T.      FUEL STORAGE TANKS DESIGN & MAINTENANCE
                All Underground Storage Tanks (UST) and Aboveground Storage
                Tanks (AST) shall meet or exceed Landlord, Federal, State and
                Local regulations and requirements. There may be a Landlord or
                jurisdictional limit on AST capacity for the site; check with
                Landlord's Representative prior to design.

        U.      MISCELLEANOUS PROVISIONS
                Also review section 'VI -Construction'. Construction
                requirements should be noted on the Construction Documents.

III.    LANDLORD'S REVIEW
        A.      LANDLORD'S SUBMITTAL AND APPROVAL PROCESS
                Together with this Tenant Construction Manual (TCM), and
                Landlord's electronic copy of the 'Premises'. This comprises the
                "Tenant Package". Tenant shall carefully review this package and
                Tenant's Premise location as indicated on these drawings against
                the Lease Documents before starting any design or layout
                drawings.

                It is Tenant's responsibility to bring any conflicts to the
                Landlord Representative's attention before beginning any design
                work. It is the Tenant's responsibility to verify that building
                systems are adequate to sustain their design. Approval by
                Landlord's Representative does not amend the Lease nor does it
                warrant that the design is sustainable by the building. All
                aspects of the improvements/work shall be submitted for Landlord
                approval.

                The Landlord's Representative must review and approve Final
                Construction Documents prepared by Tenant's architect and/or
                engineer(s). These Final Construction Documents must be
                submitted with the 'Final Submittal Form' (page 20).

                "A Preliminary Construction Document review by the Landlord is
                highly recommended." The Preliminary Construction Documents must
                be accompanied with the Preliminary Submittal Form (page 18).

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                The approval process is outlined below. All submittals shall be
                sent to the Landlord's Representative, Attention: Construction
                Coordination Manager. All reviews are at Tenant's expense. A
                complete review package will cut down on review time.

        1.      SUBMITTAL DOCUMENTS
                a.      Tenant shall submit two (2) sets of complete
                        Construction Drawing and Specification Documents for
                        Landlord's review and approval. The Specification
                        Documents shall include all data for installed
                        materials. These Drawings and Specifications comprise
                        the Submittal Documents.
                b.      The Construction Drawings must clearly indicate
                        quantity, sizes, and locations of all core drilling or
                        sawcutting to the existing surfaces.
                c.      The Submittal Documents must be submitted with the Final
                        Submittal Form (found on page 20) completed and signed:
                d.      Landlord shall review Tenant's submittals and return one
                        (1) set of prints with Landlord's stamp and comments,
                        indicating approval, or requesting additional
                        information.
                        1.      Landlord's review will include review for
                                coordination and building design and general
                                compliance with this TCM. Approval of submittal
                                shall not alleviate Tenant's responsibility to
                                comply fully with the requirements of this TCM.
                        2.      Approval of Tenant's drawings and Specifications
                                only acknowledges conformity of it to the
                                aesthetic design objectives and criteria of the
                                Landlord. This approval in no way signifies that
                                Tenant's plans comply with any ordinances,
                                codes, laws, rules or regulations applicable to
                                Tenant's permitted uses; nor does such approval
                                connote any professional assessment of the
                                quality, durability or safety of Tenant's design
                                or of the materials to be used in construction
                                of Tenant's leasehold improvements.
                        3.      Tenant shall coordinate all fire protection
                                requirements with Landlord.
                        4.      Allow a minimum of fourteen (14) days for
                                submittal review.
                e.      If required as a result of the Landlord's review, Tenant
                        shall resubmit their Submittal Documents with any
                        additional or corrected information required by Landlord
                        within twenty (20) days after Landlord's initial
                        response, for Landlord's re-review. Allow fourteen (14)
                        days for re-submittal review.
                f.      It is highly recommended, though not required, that
                        Preliminary Submittal Documents (30% & 60% Design, etc.)
                        be submitted for Landlord's review (refer to page 18).

                A complete Submittal Document package should include all
                drawings for all scopes of work and specification for all
                installed materials and equipment, etc. If the Submittal package
                is incomplete, it will NOT be reviewed. If the Submittal is NOT
                in compliance with the TCM or has inadequate information, it may
                be returned for "Revise and Resubmit." Returned Documents must
                be corrected and resubmitted to Landlord for approval.
                Submittals with minor deficiencies, but otherwise in compliance
                will be marked "Furnish As Corrected, Provide As Noted."
                Landlord, if exceptions are taken, will indicate approval to
                proceed on partial approved Documents in writing. All reviews
                are at Tenant's expense. Incomplete submittals require more
                review time. A complete review package will save time and money
                for everyone.

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        2.      LANDLORD'S APPROVAL
                All Documents submitted to Landlord will be stamped and a copy
                of the Documents will be returned to Tenant for appropriate
                action.

                Tenant's construction must be in accordance with the corrections
                and annotations on the approved Documents, if any. One (1)
                approved set of drawings and specifications must be kept in the
                construction area at all times during construction.

IV.     APPROVAL TO PROCEED
        Construction may commence ONLY when:
        A.      A complete set of construction Submittal Documents has been
                stamped and signed as approved by the Landlord Representative.
        B.      The required permits have been issued by the governing
                jurisdiction for all work requiring permit.
        C.      All conditions have been met as outlined on the PRE-CONSTRUCTION
                MEETING CHECKLIST (page 17). Also see section 'V -
                Pre-Construction Requirements'.
        D.      Tenant/Tenant's Contractor fully understands and agrees to abide
                by the content of this Tenant Construction Manual.
        E.      Tenant has received a letter from the Landlord's Representative
                indicating approval to proceed with construction. If applicable,
                the Landlord's Review Fee has been paid.
        F.      CHANGES TO APPROVED SCOPE: Any modifications, including change
                orders, substitutions, and all slab/wall saw cutting or core
                drilling not on approved plans, must receive Landlord's approval
                before proceeding. Such modifications shall be at Tenant's
                expense, and may include Inspection and Construction Costs,
                Design and/or Engineering, and Permits.

V.      PRE-CONSTRUCTION REQUIREMENTS
        A.      PRE-CONSTRUCTION MEETING
                At least ten (10) days prior to Tenant's commencement of
                construction, Tenant shall contact the Landlord's Representative
                to schedule a mandatory pre-construction meeting with Tenant's
                Representative and Tenant's Contractor(s). This meeting shall
                take place on-site. Please refer to the checklist located on
                page 17 of this manual, "PRE-CONSTRUCTION MEETING". This
                checklist must be filled out, or items provided as noted, in
                prior to the pre-construction meeting.

        B.      EMERGENCY RESPONSE PLAN
                Tenant's Contractor must submit for Landlord's approval, a
                site-specific safety plan. The site-specific safety plan is
                required prior to or at the pre-construction meeting and a copy
                must be kept on site during construction.

        C.      CONTRACTOR SITE LAYOUT PLAN
                Tenant/Tenant's Contractor shall submit to Landlord for
                approval, a plan indicating the proposed location and placement
                of construction support areas, i.e., job trailers, portable
                toilets, laydown zones, storage, etc., that encroach outside of
                Tenant's leased Premises. Any such areas granted shall be
                subject to rental fees, relocation and/or terminated at
                Landlord's request, at no expense to Landlord. Tenant/Tenant's
                Contractor shall maintain such areas in a clean, safe manner at
                all times and shall not allow activities to occur within said
                areas, other than agreed to activities. A preliminary plan for
                Landlord review is required prior to or at the pre-construction
                meeting.

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        D.      CONTRACTOR LIST
                Tenant's Contractor must provide Landlord with a subcontractor
                list with twenty-four (24)-hour emergency phone numbers and
                contact names prior to or at the pre-construction meeting.
                Landlord reserves the right to reasonably disapprove any or all
                subcontractors and suppliers.

        E.      PRE-CONSTRUCTION INSPECTION
                Tenant's Contractor must arrange a pre-construction inspection
                with Landlord to determine existing damage in common areas, and
                review options for material travel routes to and from Tenant's
                Premises. Landlord will document results and provide Tenant's
                Contractor with a pre-construction inspection report before
                construction starts.

        F.      SPACE ACCEPTANCE
                By occupying the designated space for construction, Tenant shall
                be deemed to have accepted the Premises "AS-IS", unless
                otherwise notified by Landlord in writing at the time of the
                pre-construction meeting. By occupying the Premises for
                construction, the Tenant acknowledges that Landlord has
                completed the work required of it pursuant to the Lease and has
                agreed that Landlord is not then in default in any of its
                obligations under the Lease.

        G.      CONSTRUCTION UTILITIES CHARGE
                It is agreed and understood that the utilities servicing the
                Premises may need to be separately metered as per the terms of
                the Lease. In the event the utilities are not separately metered
                and the cost of utilities, per the Lease, are to be a direct
                cost of Tenant's, an estimated per day charge will be assessed
                by the Landlord to Tenant during the build-out and construction
                phase or until such time as a permanent metering device is
                installed and transferred into Tenant's name. Furthermore, if
                Tenant has received Landlord's permission to occupy the Premises
                early to perform construction activity, an estimate for
                utilities may be assessed on a per day basis during this early
                occupancy period.

VI.     CONSTRUCTION
        A.      STOP WORK
                In the event Tenant's Contractor violates Landlord, city, state
                or federal standards or becomes involved in a labor dispute,
                Landlord, at its sole discretion, may order Contractor or
                sub-contractor to cease work immediately and to remove itself
                and its equipment from Landlord's properties within twenty-four
                (24) hours of its receipt of written notice from the Landlord.

        B.      CONSTRUCTION OBSERVATION
                Landlord reserves the right at any time to review Tenant's
                Contractor's construction status. Should Landlord observe a
                nonconformity to approved plans and specifications or provisions
                outlined in this Document, Landlord may request that
                construction be halt until the question of nonconformity has
                been resolved.

        C.      SUPERVISION
                Tenant's Contractor must provide a qualified on-site supervisor
                during all work activities.

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        D.      ABNORMAL CONDITIONS -FUMES
                Tenant's Contractor shall perform all work that creates
                excessive noise, vibration, noxious fumes (work involving
                adhesives-laminate, carpet, etc.), dust and odors, outside of
                normal Building operating hours (7am to 6pm weekdays). Such work
                shall be done in a manner which best eliminates interference
                with other tenants or Landlord. Landlord shall be given
                twenty-four (24) hours notice of such work and reserves the
                right to reschedule, decline or monitor, such work. Landlord may
                require that Building security sign-in/sign-out individuals
                working during this time. If additional security, fire watch, or
                Landlord supervision is required, it will be at
                Tenant's/Tenant's Contractor expense.

        E.      SYSTEM SHUTDOWNS
                Tenant/Tenant's Contractor shall arrange all required utilities
                and system shutdowns through the Landlord. A minimum twenty-four
                (24) hour advanced notice is required. Timing of these shutdowns
                shall be at Landlord's discretion and may require long-term
                planning. Shutdown set up and recharging costs shall be at
                Tenant's expense. Costs associated with life safety system
                shutdowns and recharging, at a cost per occurrence, shall also
                be at Tenant's expense.

        F.      FIRE PROTECTION
                The sprinkler system should be installed as soon as possible and
                be in service before introducing significant amounts of
                combustibles in the Premises. Tenant's Contractor shall use
                blanks or plugs as needed to keep at least part of the sprinkler
                system in service overnight.

                If fire protection is not in service, as soon as the hydrants
                are ready, provide hoses that can cover most of the area. If
                hoses cannot be provided, then adequate fire extinguishers shall
                be provided in the area. In addition, at any time and for any
                reason that the sprinklers are not in service, Tenant, at
                Tenant's expense, must provide a fire watch service during
                non-working hours.

        G.      CONSTRUCTION MEETINGS
                Landlord reserves the right to attend any or all Tenant/Tenant's
                Contractor construction meetings. Landlord may request copies of
                the Tenant Contractor's construction minutes pertaining to
                Landlord's properties.

        H.      CONFLICTS
                Where conflicts exist between building codes, utilities'
                requirements, statutes, ordinances, regulatory requirements, and
                Landlord's requirements, the more stringent shall govern.

        I.      MATERIALS
                1.      Tenant shall use only new, first-class materials in
                        completing its work. All work and equipment shall be
                        warranted for a minimum of one (1) year from date of
                        project/improvement completion. Such warranties shall
                        not relieve Tenant from its maintenance obligations as
                        provided for in the executed Lease Documents.
                2.      No asbestos containing materials (ACM) shall be used.

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<PAGE>

        J.      WELDING/HOT WORK

HOT WORK PERMIT

[ILLEGIBLE]

                1.      A fire extinguisher and fire watch is required in the
                        event of any acetylene cutting or
                        welding on Tenant's Premises. Tenant/Tenant's
                        Contractor, prior to commencement of such work, shall
                        obtain Landlord's written approval.
                2.      Request a Hot Work Permit kit from the Landlord if any
                        hot work will be preformed.
                3.      Familiarize yourself with the safeguards listed on the
                        Hot Work Permit and read the directions outlined on the
                        wall kit.
                4.      Hang the Hot Work Permit Systems kit in plain view of
                        the Tenant's Contractor fire safety supervisor, who will
                        take responsibility for issuing the permits.
                5.      All material within thirty-five (35) feet of the hot
                        work in all directions is a critical area that must be
                        kept clear of all combustible material.
                6.      Periodically check the area of work after the work is
                        done. Do not perform any hot work prior to one (1) hour
                        before the working shift ends.

        K.      ON-SITE DRAWINGS
                One set of plans bearing Landlord's appropriate review stamp,
                complete with Landlord's cover sheet and Owner's good faith
                inspection report attached, must be kept in Tenant's Premises at
                all times during construction. Tenant's Contractor must use this
                set of plans along with the approved building permit plans from
                the City as its master set(s) for building/improving Tenant's
                Premises.

        L.      LANDLORD'S REQUIRED CONTRACTORS
                1.      Notwithstanding any provisions of the Lease, Landlord's
                        Contractors or Subcontractors must perform certain
                        construction activities that affect The Life Safety
                        system, the Building warranties or integrity of
                        Landlord's property, at Tenant's expense. Use of any
                        other contractor will constitute Tenant's assumed
                        liability of the remainder of that Building system's
                        warranty for the remainder of the existing warranty
                        period. Tenant or Tenant's General Contractor must
                        contract directly with Landlord's Contractor or
                        Subcontractor. Names of these required contractors may
                        be obtained from the Landlord's Representative.

                        These activities may include, but are not limited to,
                        the following:
                        A.      Penetrations or modifications to exterior walls
                                or glazing.
                        B.      Roof penetrations, roof equipment installation,
                                roof modification or repair.
                        C.      Any core drilling or penetrations of reinforced
                                floor slabs.
                        D.      Modifications to the Mechanical System controls.

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<PAGE>

                        E.      Installation of and alterations to the Fire
                                Monitoring System & Fire Sprinkler System.
                        F.      Shutdown of Landlord-operated and maintained
                                systems to accommodate Tenant's work.
                        G.      Modification of utilities serving the Premises
                                or Building(s).
                        H.      Electrical interfaces with Landlord's smoke
                                detection system, which may include: smoke
                                detectors, dampered ceiling return air grill,
                                supply fan shutdown, hood fan annunciation, etc.
                        I.      Use of elevator to hoist oversized or heavy
                                materials.

        M.      ON-SITE PARKING
                On-site parking for Tenant's Contractors & Suppliers, if
                available, must be approved by Landlord's Representative.
                Parking may be subject to a rental fee.

        N.      INSURANCE
                All Contractors, Subcontractors, Material Suppliers, etc., who
                directly contracts with Tenant for work on-site must have an
                acceptable Certificate of Insurance on file with Landlord prior
                to being on-site. See Required Insurance Coverage checklist on
                page 22 of this manual.

        O.      MISCELLEANOUS PROVISIONS
                1.      Also review section 'II - Design Criteria'.
                2.      Also refer to section 'V - Pre-Construction
                        Requirements'.
                3.      Also refer to section 'VII - Housekeeping'. In addition,
                        the following should be observed:
                        A.      Where conflicts exist between building codes,
                                utilities' requirements, statutes, ordinances,
                                regulatory requirements, and Landlord's
                                requirements, the more stringent shall govern.
                        B.      Tenant's Contractor or Subcontractors shall not
                                post signs without Landlord's approval.
                        C.      Tenant's Contractor and Subcontractors shall
                                comply with all parking rules & regulations as
                                established by Landlord. Violation of parking
                                requirements may result in fines and/or towing.
                        D.      Laydown area and contractor parking on the
                                campus may be accessed a use fee. Consult with
                                Landlord Representative for details.
                        E.      Tenant shall use only new, first-class materials
                                in completing its work. All work and equipment
                                shall be warranted for a minimum of one (1) year
                                from installation. Such warranties shall not
                                relieve Tenant from its maintenance obligations
                                provided in the Lease.
                4.      There will be no smoking allowed on the Premises,
                        including parking garages. Exceptions are in designated
                        smoking areas only. Any Contractor setting off smoke
                        detectors for any reason will be charged a response fee.

VII.    HOUSEKEEPING AND MATERIAL HANDLING
        A.      CONSTRUCTION WASTE
                With Landlord's consent and approval, Tenant's Contractor may
                locate a construction dumpster on site for use on a temporary
                basis. Approval will be based on the length of time and the
                availability of an area for locating such dumpster. In some
                cases Tenant's Contractor may be able to obtain a street use
                permit to locate a dumpster on the street.

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<PAGE>

                Tenant's Contractor will be responsible for removing all
                construction-generated trash from common areas of the Building
                on a nightly basis. Tenant's Contractor acknowledges that
                storage of any construction and or building materials outside of
                Tenant's space is prohibited unless Landlord's written approval
                has been granted. Discharge of any material into Landlord's
                plumbing, storm sewer system or trash containers is also
                prohibited.

        B.      MOVEMENT OF MATERIALS
                The movement of construction materials may be tightly restricted
                during normal business hours (7am to 6pm weekdays). If
                available, a freight elevator may be designated upon request for
                construction use. Tenant/Tenant's Contractor will be responsible
                for protecting the elevator cab finishes as required by
                Landlord. Service keys and wall pads may be available upon
                request. Tenant's Contractor must request Landlord approval of
                expected large deliveries twenty-four (24) hours in advance. Use
                of all Landlord conveyances, such as elevators or stairwells for
                material or personal use must have prior approval. Landlord's
                entries, common area corridors, stairwells, service accesses,
                loading docks, and exit pathways must remain completely open and
                serviceable at all times.

        C.      FLOOR AND WALL PROTECTION
                Tenant's Contractor must provide floor and wall protection to
                insure finishes are protected during construction activities and
                to prevent material deliveries from adversely affecting the
                floor finish. Tenant's Contractor will be liable for resulting
                floor or wall damage.

        D.      DAILY CLEANING
                Once construction begins in Tenant's Premises, cleaning of the
                area becomes the responsibility of Tenant and its Contractor.
                Work areas and travel areas (inside and out) must be maintained
                in a clean condition at all times.
                1.      Tenant's Contractors must supply and install a large
                        carpeted walk-off mat inside the entrance of the work
                        Premises to eliminate the tracking of dust and debris
                        into the Building common area(s).
                2.      Trash must be placed in containers and removed by
                        Tenant's Contractor to Contractor's dumpster on a daily
                        basis. Reference VII - Section A.
                3.      Failure to comply will result in a deduction to the
                        construction damage deposit or to Tenant's Contractor
                        for Landlord's clean-up and administration fees.

        E.      CONSTRUCTION PRE-FILTERS
                Prior to commencement of any construction activity, Tenant's
                Contractor will install and maintain construction pre-filters in
                the Building's return air system servicing the construction area
                and/or floor. When construction is complete, the pre-filters
                shall be removed and disposed of properly off-site by Tenant's
                Contractor.

        F.      DUST BARRIERS
                If construction dust becomes excessive, temporary dust barriers
                at demising walls in plenum spaces may be required. If requested
                by Landlord, Tenant's Contractor must install dust barriers at
                Tenant's expense. Certain detection devices are highly sensitive
                to dust particles, which can cause them to go into alarm. If any
                such devices are in or adjacent to Tenant's Premises, please
                consult Landlord's Representative for procedures.

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<PAGE>

        G.      HAZARDOUS MATERIALS
                Tenant's Contractor(s) who utilize or possesses hazardous
                materials on the work site shall be required to develop a
                site-specific safety plan and a spill prevention and control
                plan in accordance with all applicable federal, state and local
                regulations. A copy of each plan must be submitted to the
                Landlord's Representative along with Hazardous Materials
                Information Sheets (HMIS) and/or Material Safety Data Sheets
                (MSDS) prior to bringing the hazardous materials onto the site.

        H.      EQUIPMENT UPKEEP
                Landlord reserves the right to shutdown or remove any of
                Tenant's Contractor equipment showing signs of disrepair or
                neglect if the equipment is deemed hazardous to either life
                safety or environment.

        I.      SPOILS
                Tenant's Contractor shall not store spoils on the site for more
                than seven (7) days. Spoils that require testing must be removed
                within twenty-four (24) hours of a positive contamination test
                result. Stored spoils must remain covered and adequately
                barricaded.

        J.      WASH OUT AREA
                Tenant's Contractor will not allow any disposal on the Premises
                of wastewater, concrete, mortar, gypcrete or similar products
                that may in any way violate City, State or Federal environmental
                laws. All disposals shall comply with current regulations.
                Tenant's Contractor, if intending to set up a wash out area,
                shall submit a detailed collection/detention plan for Landlord's
                authorization and approval.

VIII.   TENANT'S CONSTRUCTION DRAWINGS/AS-BUILTS
        At the completion of construction, Tenant shall provide one (1) complete
        set of reproducible as-built drawings and one (1) CD containing all
        as-builts to Landlord. The CD as-built drawings shall be in the form of
        AutoCAD R14, or AutoCAD 2000 saved on CD. As-built drawings shall
        include Architectural, Structural, Civil, Mechanical, Electrical, Fire
        Protection, Fiber, etc.

        Tenant's Contractor shall submit signed and stamped Fire Protection shop
        drawings to Landlord, as part of the Drawing Submittal, for approval of
        Landlord's Insurance Carrier.

IX.     INSPECTIONS
        A.      INSPECTIONS BY GOVERNING AGENCIES
                Tenant or Tenant's Contractor is responsible for obtaining all
                required inspections by governing agencies. Tenant's Contractor
                is responsible for correcting all deficiencies recorded by the
                inspectors.
        B.      CERTIFICATE OF OCCUPANCY
                Submit a copy of final inspections or a copy of the Certificate
                of Occupancy to Landlord's Representative.

X.      PUNCH LIST/OBSERVATION BY LANDLORD
        During construction of Tenant's space, Landlord's Representatives may
        observe periodically to determine whether construction conforms to the
        approved plans and specifications, and the provisions of these General
        Conditions for Construction. Should there be any discrepancy, Tenant's
        work may be halted until the problem is resolved.

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<PAGE>

        Tenant's Contractor shall notify Landlord's Representative in writing
        within five (5) days of when work is substantially complete, and request
        a final inspection from Landlord. Landlord shall provide Tenant's
        Contractor with a written punch list, which will describe any identified
        construction deficiencies pursuant to the Approved Plans. Any punch list
        items not completed within thirty (30) calendar days of the date the
        punchlist was presented to Tenant may, at Landlord's option, be
        completed at Tenant's expense.

XI.     LANDLORD'S FINAL ACCEPTANCE
        In order for Tenant to receive Landlord's Final Acceptance, Tenant must,
        within thirty (30) days of the date Tenant opens for business, obtain
        and present to Landlord the following items:
        A.      A copy of the Certificate of Occupancy (C of O) issued by the
                Building Department or documentation of when C of O will be
                issued. (Food Service Tenants must also include documented
                approvals from the local Health Department prior to opening.)
        B.      Copies of all Building Permits and other required permits,
                indicating inspections and approvals by the appropriate agency.
        C.      As-built drawings of Tenant's Work (per Section VIII) in hard
                copy and electronic CADD file.
        D.      HVAC Balance Reports by an independent air balance contractor.
        E.      The completed punchlist initialed by Landlord's Representative.
        F.      Tenant's Contractor shall repair all damage to the Building
                created by its own work.
        G.      O & M manuals and warranties for all Tenant Work including
                installed equipment and roof top penetrations.
        H.      Contractor Certification of Asbestos Free Product Installation.
        I.      Upon completion, general contractor shall supply Landlord with
                Final Lien Release (page 23) AND with the Sworn Statement and
                Indemnity (page 22) from all Contractors, Subtiers, Suppliers,
                Laborers, Material Suppliers, etc., who contracted directly with
                the Tenant.

XII.    GOOD FAITH INSPECTION FOR ASBESTOS
        Tenant and Tenant's Contractors must have Landlord's good faith
        Inspection report on the Premises prior to starting work. The Washington
        Industrial Safety Health Act 296-62-07707 states that before allowing or
        authorizing any construction, renovation, remodeling, maintenance,
        repair or demolition, Landlord shall perform a good faith inspection to
        determine whether materials to be worked on or removed contain asbestos.

        The possession of the Landlord's good faith Inspection report does not
        indicate the exact location of all asbestos containing materials (ACM's)
        in the building, especially in the case of older buildings, nor does the
        Landlord make representation that all ACM locations in the building are
        known. Tenant / Tenant's Contractor(s) should proceed with caution and
        use safe and prudent methods and abide by all laws concerning the use,
        handling, abatement, transportation, discharge and storage of hazardous
        materials.

        It is the responsibility of Tenant's Contractor to request and obtain a
        copy of this report and display it in the Premises in full view of all
        persons entering the work site. Tenant's Contractor is also responsible
        to disclose to Landlord's Representatives its discovery of any material
        that may contain asbestos or other hazardous materials not mentioned in
        the good faith inspection. If any ACM's are suspected, immediately stop
        work, and do not disturb or remove the suspect material until Landlord
        has performed tests and/or abatement.

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<PAGE>

PRE-CONSTRUCTION MEETING CHECKLIST:

<TABLE>
<S>     <C>
-------------------------------------------------------------------------------------------------------------------
        [ ILLEGIBLE ]
-------------------------------------------------------------------------------------------------------------------
        1) LANDLORD'S CONTACT: Theresa Yee, AIC, CPC, Construction Coordination Manager (206) 277-5209
-------------------------------------------------------------------------------------------------------------------
        2) WASHINGTON STATE CONTRACTOR'S LICENSE NO.:_____________________________________
-------------------------------------------------------------------------------------------------------------------
        3) CERTIFICATE OF INSURANCE FOR ALL CONTRACTORS DIRECTLY CONTRACTED W/TENANT
-------------------------------------------------------------------------------------------------------------------
        4) LIST OF ALL SUBCONTRACTORS, SUPPLIERS, AND CONSULTANTS
-------------------------------------------------------------------------------------------------------------------
        5) APPROVED TENANT PLANS ON-SITE
-------------------------------------------------------------------------------------------------------------------
        6) CONSTRUCTION UTILITIES CHARGE (see Section V)

        Electric/Day____________      Elevator_______________   Drain Sprinkler/Occurrence_______________

        Other__________________________________      Other_____________________________________
-------------------------------------------------------------------------------------------------------------------
        7) BUILDING PERMIT, OTHER PERMITS
-------------------------------------------------------------------------------------------------------------------
        8) CONSTRUCTION SCHEDULE Start Date:_________________________   Est. Completion Date:______________
-------------------------------------------------------------------------------------------------------------------
        9) PROVISIONS FOR PERMANENT ELECTRICAL POWER
-------------------------------------------------------------------------------------------------------------------
        10) GOOD FAITH INSPECTION REPORT
-------------------------------------------------------------------------------------------------------------------
        11) SUBCONTRACTORS (TO BE APPROVED BY LANDLORD):

        Fire Detection System: _______________________________________________

        Mechanical Controls: _________________________________________________

        Roof Modifications: __________________________________________________

        Certified Air Balance Contractor: ____________________________________

        Other: _______________________________________________________________
-------------------------------------------------------------------------------------------------------------------
        12) DESIGNATED HOURS OF CONSTRUCTION
-------------------------------------------------------------------------------------------------------------------
        13) MATERIAL DELIVERIES SHALL BE COORDINATED WITH LANDLORD
-------------------------------------------------------------------------------------------------------------------
        14) LOCATION OF TENANT CONTRACTOR'S TRASH RECEPTACLE
-------------------------------------------------------------------------------------------------------------------
        15) LOCATION FOR TENANT CONTRACTOR PARKING
-------------------------------------------------------------------------------------------------------------------
        16) LANDLORD'S FIRST RIGHT OF REFUSAL FOR SALVAGE
-------------------------------------------------------------------------------------------------------------------
        17) PRIOR APPROVALS REQURIED

        Modifications to Landlord's facilities: ________________________________________

        Incidental burning, acetylene cutting, or welding: _____________________________

        Incidental concrete saw-cutting or core drilling: ______________________________

        Noxious fumes: _______________________________________

        Other: _______________________________________________
-------------------------------------------------------------------------------------------------------------------
        18) CONSTRUCTION SAFETY-FALL PROTECTION PLAN, EMERGENCY RESPONSE PLAN, MSDS
-------------------------------------------------------------------------------------------------------------------
        19) SITE SET UP PLAN-PROPOSED LAYDOWN AREAS
-------------------------------------------------------------------------------------------------------------------
        20) FIRST AID KIT ON-SITE
-------------------------------------------------------------------------------------------------------------------
        21) FIRE EXTINGUISHER ON-SITE
-------------------------------------------------------------------------------------------------------------------
        22) OTHER:
-------------------------------------------------------------------------------------------------------------------
</TABLE>

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<PAGE>

                                                      PRELIMINARY SUBMITTAL FORM
         This form must be completed and attached to Tenant's Submittal package.
                                                                     PAGE 1 of 1

Date: __________________________________

Tenant Name: ___________________________________________________________________

Tenant Address: ________________________________________________________________

Tenant Contact/Company: ________________________________________________________
Tenant's Contact is (check one):
[ ]Arch [ ]Engineer __________  [ ]Consultant _____________ [ ]Other ___________
                    (specify)                   (specify)             (specify)

Tel.#. (__________)_____________________   Fax #: (________)____________________

E-mail: ________________________________________________________________________

     I have reviewed the PRELIMINARY SUBMITTAL DOCUMENTS package against the
     attached Checklist and find it to be complete. Any required information
     which does not pertain to this project is clearly indicated as such on the
     attached checklist.

     Signed: _____________________________    Dated: ___________________________

SUBMIT THE FOLLOWING AS A SINGLE SUBMITTAL PACKAGE TO THE TENANT CONSTRUCTION
COORDINATION MANAGER:

[ ]  THIS FORM - Executed copy of this form (1 page) completed and signed

     DRAWINGS - Two (2) prints each, stapled into sets. See attached for minimum
     content.
[ ]  1. Site Plan - At scale sufficient to indicate the site in relation to
     surrounding area.
[ ]  2. Floor Plan - at 1/8" = 1'-0" or larger scale, include structural
     grids, label all rooms
[ ]  3. Exterior Elevations at 1/8" = 1'-0", and Interior Elevations at 1/2" =
     1'-0"
[ ]  4. Civil, Structural, Mechanical, Electrical, & Plumbing Systems, etc.
     Provide as applicable to new work. Show existing Building systems. Indicate
     new work and existing systems.

           ALLOW FOURTEEN (14) DAYS FOR PRELIMINARY SUBMITTAL REVIEW.

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<PAGE>

                                                            FINAL SUBMITTAL FORM
                                                                     PAGE 1 of 3
     This form must be completed and attached to Tenant's Submittal package.

Date: __________________________________

Tenant Name: ___________________________________________________________________

Tenant Address: ________________________________________________________________

Tenant Contact/Company: ________________________________________________________

Tenant's Contact is (check one):

[ ]Arch [ ]Engineer __________  [ ]Consultant ______________ [ ]Other __________
                     (specify)                   (specify)             (specify)

Tel.#. (__________)_____________________    Fax #: (________)___________________

E-mail: ________________________________________________________________________

     I have reviewed the FINAL SUBMITTAL DOCUMENTS package against the attached
     Checklist and find it to be complete. Any required information which does
     not pertain to this project is clearly indicated as such on the attached
     checklist.

     Signed: _____________________________ Dated: ______________________________

SUBMIT THE FOLLOWING AS A SINGLE SUBMITTAL PACKAGE TO THE TENANT CONSTRUCTION
COORDINATION MANAGER:

[ ]  Two (2) - Prints of all DRAWINGS which show the entire scope of work,
     stapled into sets.
[ ]  One (1) - Executed copy of this form and checklist (3 pages), completed and
     signed

              ALLOW FOURTEEN (14) DAYS FOR FINAL SUBMITTAL REVIEW.

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<PAGE>

                                                            FINAL SUBMITTAL FORM
                                                                     PAGE 2 of 3

The following minimum documentation is required for the Final Submittal.
Incomplete submitals will be returned.

ALL of the following information is required to be included in the final
Construction Documents submitted. At a minimum, all work must be shown,
including but not limited to core drilling plan, bolt schedule, etc.

I.    ARCHITECTURAL DRAWINGS
      [ ]   A.   Does not Apply
            B.   The following must be included:
            [ ]  1. Site Plan - Appropriate Scale.
            [ ]  2. Code Compliance Plans & Calculations (where applicable):
                     Load Calcls, occupancy, egress, area of separation, etc.
            [ ]  3. Floor Plans at 1/8" = 1'-0" or larger scale, sufficient to
                    show design intent where floor plans may be confusing, etc.
            [ ]  4. Elevations at 1/8" = 1'-0" or larger scale.
            [ ]  5. Reflected Ceiling Plans at 1/8" = 1'-0" or larger scale.
            [ ]  6. Sections and Details sufficient for construction.
            [ ]  7. Specifications on all materials, equipment, etc. as required
                    for scope clarification.
            [ ]  8. Architect of Record has sealed and signed drawings.

II.   CIVIL DRAWINGS
      [ ]   A.   Does not Apply
            B.   The following must be included:
            [ ]  1. Grading and Drainage Plan at an appropriate scale showing
                    design intent.
            [ ]  2. Temporary Erosion Control Plan at appropriate scale showing
                    design intent.
            [ ]  3. Utilities Plan at appropriate scale showing design intent.
            [ ]  4. Engineer of Record has sealed and signed drawings.

III.  STRUCTURAL DRAWINGS
      [ ]   A.   Does not Apply
      [ ]   B.   The following must be included:
            [ ]  1. All design calculations.
            [ ]  2. Foundation Plan at 1/8" = 1'-0" or larger scale.
            [ ]  3. Specifications on all materials, equipment, etc. as required
                    for scope clarification.
            [ ]  4. Engineer of Record has sealed and signed drawings.

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                                                            FINAL SUBMITTAL FORM
                                                                     PAGE 3 of 3

IV.   MECHANICAL DRAWINGS
      [ ]   A.   Does not Apply
            B.   The following must be included:
            [ ]  1. ALL DESIGN CALCULATIONS including State of Washington
                    Energy Calculations.
            [ ]  2. HVAC Plan at 1/8" = 1'-0" or larger scale.
            [ ]  3. Specifications on all materials, equipment, etc. as required
                    for scope clarification, and Equipment schedules, including
                    controls on drawings.
            [ ]  4. Plumbing Plan at 1/8" = 1'-0" or larger scale. If any
                    Building system will be tapped into, indicated where and
                    how.
            [ ]  5. Details sufficient for construction.
            [ ]  6. Specifications on all materials, equipment, etc. as required
                    for scope clarification.
            [ ]  7. Engineer of Record has sealed and signed drawings.

V.    ELECTRICAL DRAWINGS
      [ ]   A.   Does not Apply
            B.   The following must be included:
            [ ]  1. One Line diagram, Load Calculations and schedules.
            [ ]  2. Electrical Floor Plan at 1/8" = 1'-0" or larger scale.
            [ ]  3. Reflected Ceiling Plan and Lighting Plan at 1/8" = 1'-0" or
                    larger scale.
            [ ]  4. Lighting Budget Calculations per appropriate State Energy
                    Code.
            [ ]  5. Specifications on all materials, equipment, etc. as required
                    for scope clarification.
            [ ]  6. Engineer of Record has sealed and signed drawings.

VI.  LANDSCAPE DRAWINGS
      [ ]   A.   Does not Apply
            B.   The following must be included:
            [ ]  1. Landscape Plan at appropriate scale to show intent.
            [ ]  2. Irrigation Plan at appropriate scale to show intent.
            [ ]  3. Specifications on all material, equipment, etc. as required
                    for scope clarification and Details sufficient for
                    construction.
            [ ]  4. Landscape Architect of Record has sealed and signed
                    drawings.

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<PAGE>

                          SWORN STATEMENT AND INDEMNITY

State of ___________ )
                     ) ss
County of __________ )

The undersigned, being first duly sworn, on behalf of _____________, a
Contractor to ______________________, the Tenant, with a contract dated
___________________ for the construction of the Tenant Improvements at
___________________, Seattle, Washington (the "Project"), does hereby depose and
state as follows:

        (i)     That, listed on a separately attached sheet labeled Schedule 1,
                are the names of all sub tier contractor and/or suppliers of
                materials entering into the construction of the Project,
                together with the names of all parties and entities having
                contracts or subcontracts for specific portions of the work on
                the Project, and the amounts due and/or to become due as to each
                of the parties/entities identified thereon;

        (ii)    That the items mentioned include all labor and material
                required to complete the Project, and that there are no other
                contracts outstanding; and

        (iii)   That there is nothing due or to become due to any other person
                or entity for material, labor or other work of any kind done in
                connection with the Project.

The undersigned Contractor specifically agrees to pay any unpaid bills and
charges for the cost of the construction of the Project, to obtain Satisfactions
of Mechanic's Liens to be filed of record releasing any mechanic's liens should
any be filed against the Project or the property on which the Project is
located; and to pay all bills, costs, expenses and legal fees relating thereto;
and further agrees to forever fully protect, defend, indemnify and hold harmless
Queen Anne Square LLC (Owner), Sabey Corporation, David and Sandra Sabey, and
_____________ (Tenant). (the "Indemnified Parties") from and against any and
all liabilities or claims of liability, losses, costs, charges, expenses and
damages of any kind or character whatsoever, including reasonable attorney fees,
which the Indemnified Parties may suffer, expend or incur by reason of or
arising out of the assertion, enforcement, or attempted enforcement of any
Mechanic's Lien or claim of a mechanic's lien or similar lien; and further
agrees to indemnify the Indemnified Parties against any loss sustained by any of
them should it become necessary for any of them to bring a legal action to
remove the lien(s) and/or make payment of the outstanding debt evidenced by a
mechanic's lien or claim of lien.

By:

------------------------------                    ------------------------------
Company Name                                      Print Name

                                                  ------------------------------
                                                  Signature

                                                  ------------------------------
                                                  Title

Subscribed and sworn to before me this ________ day of _______________, 2002.

______________________________________                    (Seal)

Notary Public, State of ______________

Commission Expires:___________________

TENANT CONSTRUCTION MANUAL(TCM)

                                                     [LOGO OF SABEY CORPORATION]

Page 22 of 24

<PAGE>

                                  UNCONDITIONAL
                        RELEASE AND WAIVER OF LIEN RIGHTS
                         FOR FINAL AND COMPLETE PAYMENTS

CONTRACTOR PERFORMING WORK: ____________________________________________________

PROJECT COMPLETED FOR: _________________________________________________________

PROJECT NAME: __________________________________________________________________

JOB ADDRESS: ___________________________________________________________________

The undersigned does hereby acknowledge payment in full for all labor, equipment
and material furnished to the above job and therefore waives and releases all
rights to make any claim on any labor and material bond covering the job, and
waives and releases all mechanics' liens, stop notices and equitable lien rights
which the undersigned may have on the job.

This Release and Waiver is for the benefit of, and may be relied upon by, all
persons holding any property interest in the jobsite, the construction lender,
and construction fund holder, the prime contractor, and the principal and
sureties on any labor bond.

The undersigned does hereby represent and warrant that the undersigned has been
fully paid for all labor and materials, any and all welfare, pension, vacation
or other contributions required to be made on account of the employment of such
laborers and mechanics so provided by the undersigned and does hereby agree to
indemnify and hold each of the foregoing, the project and real property free and
harmless from any and all claims or liens through the date indicated herein.

Our work is complete on the project at this time and there will be no further
billing to the above named subcontractor. We will send you a new Preliminary
Lien Notice if we are required to do any additional work on this project.

Company:          ______________________

Print Name:       ______________________

Signature:        ______________________

Title:            ______________________

Date:             ______________________

--------------------------------------------------------------------------------
SUBSCRIBED AND SWORN TO before me, in my presence, on this _______________ day
of _______________ 20________, A Notary Public in and for the County of
________________, State of _________________.

Notary Signature:                              Affix Seal:

My Commission expires

TENANT CONSTRUCTION MANUAL(TCM)

                                                     [LOGO OF SABEY CORPORATION]

Page 23 of 24

<PAGE>

REQUIRED INSURANCE COVERAGE
As a condition of work within ELLIOTT PARK NORTH LLC, evidence of insurance in
the minimum amounts shown below IS REQUIRED to be delivered to Sabey Corporation
PRIOR TO COMMENCEMENT OF ANY WORK. This letter contains information your
insurance agent will need in preparing the Certificate of Insurance and
Endorsement. Please instruct your insurance agent to fax a copy of the
certificate INCLUDING 2nd PAGE ENDORSEMENT to: Attn -Construction Coordination
Manager, RE: (name of tenant), at Fax (206) 281-0920, and mail a hard copy to:

     Sabey Corporation
     ATTN: Construction Coordination Manager, RE: (name of tenant)
     12201 Tukwila International Blvd, 4th Floor
     Seattle, WA 98168-5121

<TABLE>
<CAPTION>
TYPE OF CERTIFICATE                                                                 MINIMUM LIMIT
-------------------------------------------------------------------------------------------------
<S>                                                                           <C>
..    Commercial General Liability
     . General Aggregate                                                      $         2,000,000
     . Products/Completed Operations Aggregate                                $         2,000,000
     . Bodily Injury and Property Damage -- Each Occurrence                   $         1,000,000
     All aggregates apply on a per project basis

..    Automobile Liability - Per Occurrence                                    $         1,000,000
     Auto liability insurance on any auto, or all owned, non-owned, and
     hired vehicles.

..    Umbrella (Excess) Liability -- Per Occurrence                            $         1,000,000

..    Stop Gap (Washington Employer's Liability)                               $         1,000,000

..    Builder's Risk or Installations Coverage/All Risk                        Full Contract Price
                                                                              for Improvements

                           Also Required Information

..    Worker's Compensation - Washington State                                 STATUTORY
     Provide Premium status letter form Dept. of L.& I. OR provide
     L&I acct number

           Also Required for Over-Water & out of WA State Construction

..    Worker's Compensation - Projects outside Washington State                STATUTORY

..    USL & H Worker's Compensation Employer's Liability                       STATUTORY
     (US Longshoremen and Harbor Worker's coverage.)
</TABLE>

THE INSURANCE CERTIFICATE IS ALSO REQUIRED ADDRESS THE FOLLOWING:

1.      Show ELLIOTT PARK NORTH LLC, Sabey Corporation and David A. and Sandra
        Sabey as additional insured. Show Sabey Construction Inc. as additional
        insured if Sabey Construction Inc. is the general contractor.
2.      Show the current A.M. Best Rating for the insurance company listed.
3.      Show minimum prior cancellation notice of 45 days.
4.      Show all deductibles and designate "per claim" or "per occurrence".
5.      If using ACORD certificate, each appropriate box must be marked with an
        "X".
6.      Certificate of Liability and Umbrella must state if coverage provided is
        "claims made" or occurrence form.
7.      Insurance must state: Contractor's insurance to be primary to insurance
        carried by Sabey Corporation (and Sabey Construction Inc if applicable).
        Sabey insurance to be excess and non-contributory.

TENANT CONSTRUCTION MANUAL(TCM)

                                                     [LOGO OF SABEY CORPORATION]

Page 24 of 24

<PAGE>

                                    EXHIBIT F
                                       TO
                                 LEASE AGREEMENT

                   LETTER AGREEMENT REGARDING BOILER FACILITIES

[ILLEGIBLE]

                                                            James A. Bianco M.D.
                                           President and Chief Executive Officer

                                                                November 6, 1992

Mr. David Sabey
102 Elliott Avenue West, Suite 330
Seattle, Washington 98119

PROJECT: 9203 CELL THERAPEUTICS, INC. LABORATORY

SUBJECT: HEATING SYSTEM DESIGN AND OPERATION

Dear Mr. Sabey:

This letter summarizes the basis of design and operation for the heating system,
including responsibilities of both CTI and David Sabey ("Sabey", building
owner).

1.   Existing Boiler No. 2 (west) will be dedicated to the present and future
     CTI loads. Existing Boiler No. 1 (east) will be dedicated to Sabey loads.
     This is based upon the heating load calculations for CTI, and statements
     made by Sabey personnel that only one of the two existing boilers is
     necessary to handle the entire existing (non-CTI) heating load during the
     coldest weather.

2.   CTI Boiler No. 2 will serve the Elliott Park Building present and planned
     CTI heating loads (new 4th Floor laboratories and administrative offices,
     and planned partial 3rd Floor and total 5th Floor laboratories and
     administrative offices).

3.   Sabey Boiler No. 1 will serve the Elliott Park Building non-CTI heating
     loads and the PI Building heating loads.

4.   CTI will assume responsibility for Boiler No. 2 for CTI's exclusive use
     including maintenance and operation.

5.   Boiler No. 2 will operate independently from Boiler No. 1, and will serve
     CTI loads on a 24 hour per day, 7 day per week basis.

6.   Sabey will be responsible for Boiler No. 1 including maintenance and
     operation.

[GRAPHIC APPEARS HERE]

Office Lease Agreement-NNN

                                       F-1

<PAGE>

Mr. David Sabey
Page 2
November 6, 1992

7.   The two boilers will normally be isolated from each other. A
     normally-closed manual shutoff valve will be provided by CTI to allow both
     CTI and Sabey loads to be served by either boiler, to provide "partial"
     capacity backup if one of the boilers fails, or if gas service is
     interrupted due to the status of the building being on interruptible gas
     service. (Boiler No. 2 has a dual fuel burner and oil fuel backup
     capability).

8.   Boiler No. 2 will be connected by CTI to a new CTI steam-to-water heat
     exchanger (converter) and a hot water heating system.

9.   The natural gas supply is common to both boilers. A BTU meter will be
     installed by CTI in the hot water heating piping from the converter, with
     readout in the DDC control system. A conversion factor will be applied to
     the BTU meter readings to account for boiler efficiency and natural gas
     heat capacity, resulting in CTI natural gas usage for billing purposes. CTI
     will reimburse Sabey for CTI's gas energy usage. If required, CTI will
     establish a separate gas line to boiler #2 when the fifth floor expansion
     is accomplished.

10.  A complete boiler inspection of boiler #2 will be done and necessary
     repairs completed by CTI to minimize the possibility of an unscheduled
     shut-down and associated negative effect upon critical operations. All
     manhole, handhole, and door gaskets will be replaced in conjunction with
     the inspection.

11.  The original 150-to-15 psig pressure reducing valve (PRV) has been removed.
     A new PRV is not included in this project since the boilers are not planned
     to be operated at high pressure. The new CTI steam converter includes a new
     temperature control value sized to provide control at 15 psig inlet
     pressure. New piping components are rated for operation at 150 psig as a
     precaution. Caution regarding this issue needs to be taken, since operation
     at the 150 psig pressure rating of the boilers poses an extreme danger in
     the existing installation.

12.  The following maintenance items identified in a boiler inspection by
     Midriff Energy Products (commissioned by McKinstry) will be accomplished by
     CTI to minimize the possibility of unscheduled shut-downs:

     a.   On boiler #2, the 2nd gas valve operator has been leaking oil and will
          be replaced.

     b.   On boiler #2, the header valve needs to be replaced or removed and
          sent out for rebuild. It has been leaking.

13.  The high fire rate on each boiler has been decreased from approximately
     5,000,000 BTUH input to approximately 3,000,000 BTUH input. The sizes of
     the flue and chimney are adequate for 3,900,000 BTUH each boiler (7,800,000
     BTUH total both boilers). CTI's ultimate load will be approximately
     2,350,000 BTUH, which is below the current capacity of Boiler No. 2.

<PAGE>

Mr. David Sabey
Page 3
November 6, 1992

14.  The existing boilers and their controls will remain as is. New CTI controls
     will be provided for the converter and hot water heating system.

15.  The feed water and chemical treatment system will remain common to both
     boilers. Maintenance costs will be shared equally by CTI and Sabey.

16.  The new hot water heating pumps serving CTI heating loads will be connected
     to CTI's electrical service by CTI.

17.  The cost of maintenance and operation of the oil back up system for boiler
     #2 will be shared equally between CTI and Sabey as heat would be provided
     from boiler #2 to both CTI and Sabey in the event of interrupted gas
     service. It is agreed and understood that adjustments to heating loads will
     have to be made by both CTI and Sabey to accommodate heating needs of both
     buildings in the event of an emergency.

18.  CTI and Sabey will split equally the cost of maintaining the boiler room to
     the extent such costs are attributable to the Elliott Park Building except
     for costs which may be incurred to comply with city code requirements. The
     code related costs will be paid by Sabey unless work done by CTI creates
     the problem, in which case CTI will pay.

A copy of CTI Drawing M13. Heating System Modifications, dated 20 October 1992,
which delineates the work and contains the control sequence was presented to you
on 20 October 1992. Additional copies of the drawing will be available upon
request.

Sincerely,

CELL THERAPEUTICS, INC.

By: /s/ James A. Bianco                          By: /s/ David Sabey
    -------------------                              ---------------
President & CEO                                  David Sabey

Date: 6 Nov, 1992                                Date: 6 Nov, 1992<PAGE>

                                                                    Exhibit 10.9

                             CELL THERAPEUTICS, INC.

                        JAMES BIANCO EMPLOYMENT AGREEMENT

        This Employment Agreement is entered into as of December 31, 2002, (the
"Effective Date") by and between Cell Therapeutics, Inc. (the "Company"), and
James A. Bianco (the "Executive") (the "Agreement").

        1.      Duties and Scope of Employment.

                    (a) Positions and Duties. As of the Effective Date,
Executive will serve as President and Chief Executive Officer of the Company.
Executive will render such business and professional services in the performance
of his duties, consistent with Executive's position within the Company, as shall
reasonably be assigned to him by the Company's Board of Directors (the "Board").
The period of Executive's employment shall be from the Effective Date through
December 31, 2005 and is referred to herein as the "Employment Term."

                    (b) Obligations. During the Employment Term, Executive will
perform his duties faithfully and to the best of his ability and will devote his
full business efforts and time to the Company. For the duration of the
Employment Term, Executive agrees not to actively engage in any other
employment, occupation or consulting activity for any direct or indirect
remuneration without the prior written approval of the Board.

        2.      At-Will Employment. The parties agree that the Executive's
employment with the Company will be "at-will" employment and may be terminated
at any time with or without cause or notice. Executive understands and agrees
that neither his job performance nor promotions, commendations, bonuses or the
like from the Company give rise to or in any way serve as the basis for
modification, amendment, or extension, by implication or otherwise, of his
employment with the Company.

        3.      Compensation.

                    (a) Base Salary. During the Employment Term, the Company
will pay Executive as compensation for his services a base salary at the
annualized rate of Four Hundred Sixty Thousand Two Hundred Ninety Seven Dollars
($ 460,297) (the "Base Salary"). The Base Salary will be paid periodically in
accordance with the Company's normal payroll practices and be subject to the
usual, required withholding.

                    (b) Discretionary Bonus. Subject to Executive accomplishing
such performance objectives as Executive and the Company's compensation
committee (the "Compensation Committee") shall mutually agree upon, Executive
will receive that amount of bonus that the Compensation Committee, in its sole
discretion, determines is appropriate. Although the contemplated range of
Executive's bonus is targeted to be between 25%-100% of Executive's base

<PAGE>

salary, the Compensation Committee retains discretion to award any amount of
bonus or no bonus whatsoever; provided that such discretion is exercised in good
faith.

                    (c) Stock Option. Executive shall be eligible to receive
option grants at the discretion of the Board under and pursuant to the terms of
any stock option and stock incentive plans of the Company.

        4.      Executive Benefits.

                    (a) Health Benefits. During the Employment Term, Executive
will be entitled to participate in the employee benefit plans currently and
hereafter maintained by the Company of general applicability to other senior
executives of the Company, including, without limitation, the Company's group
medical (including MD2 retainer fees), dental, vision, and flexible-spending
account plans. To the extent the Company cancels or changes the benefit plans
and programs it offers to all other senior executives, the Company reserves the
right to cancel or change the benefit plans and programs it offers to Executive
on an equivalent basis.

                    (b) Life/Disability Insurance. The Company shall provide
universal (or other non-term) life insurance for the benefit of Executive and
his beneficiaries in an amount not less than Five Million Dollars ($5,000,000).
Furthermore, the Company shall provide, at Executive's expense, disability
insurance for the benefit of Executive. Executive's Base Salary shall be
increased by the amount of the annual premium for such disability coverage and
the Company's records shall reflect that the premiums for the disability policy
have been paid by the Executive. The above benefits are subject to availability
at reasonable cost and any limitations resulting from Executive's physical
condition. The policy shall accrue to the benefit of Executive and Executive
shall be entitled to the full ownership and benefit of the life insurance
policy, even after termination of his employment for any reason.

                    (c) Health Club Membership. The Company shall reimburse the
Executive the expense of maintaining his health club membership.

        5.      Vacation. Executive shall be entitled to paid vacation of four
(4) weeks per year in accordance with the Company's vacation policy, with the
timing and duration of specific vacations mutually and reasonably agreed to by
the parties hereto. Any accrued but unused vacation time shall be paid in a cash
lump sum payment promptly upon Executive's termination of employment, regardless
of the reason for such termination, or at such earlier time as required by
Company vacation policy to avoid forfeiture of such vacation time.

        6.      Expenses. The Company will reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder, in
accordance with the Company's expense reimbursement policy as in effect from
time to time.

                                                                             -2-

<PAGE>

        7.      Severance.

                    (a) Involuntary Termination. If Executive's employment with
the Company terminates other than voluntarily or for "Cause" (as defined
herein), and Executive signs and does not revoke a release of claims with the
Company (in the form provided by the Company), then, subject to Section 13,
Executive shall be entitled to receive: (i) continuing payments of severance pay
(less applicable withholding taxes) at a rate equal to his monthly Base Salary
rate, as then in effect, for a period of eighteen (18) months from the date of
such termination, payable periodically in accordance with the Company's normal
payroll policies; (ii) any unvested portion of any outstanding options and/or
any unvested shares of Company common stock that have been issued under any
stock option and stock incentive plans of the Company or otherwise shall
immediately vest and become exercisable (except with respect to any options
granted pursuant to a plan intended to qualify under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code")) subject to the terms of the
applicable award agreement; (iii) all equity in the life insurance policy
referenced in section 4(b) shall be paid; and (iv) all accrued but unused
vacation shall be paid.

                    (b) Voluntary Termination; Termination for Cause. If
Executive's employment with the Company terminates voluntarily, other than for
Good Reason (as defined in Section 7(c) hereof) by Executive or for Cause by the
Company, then (i) all vesting of unvested or restricted shares of Company common
stock or of any outstanding options under any stock option and stock incentive
plans of the Company or otherwise will terminate immediately; (ii) all payments
of compensation by the Company to Executive hereunder will terminate immediately
(except as to amounts already earned), and (iii) Executive will only be eligible
for severance benefits in accordance with the Company's established policies as
then in effect.

                    (c) Voluntary Termination for Good Reason. If Executive
terminates his employment for Good Reason, then Executive shall be entitled to
receive: (i) continuing payments of severance pay (less applicable withholding
taxes) at a rate equal to his monthly Base Salary rate, as then in effect, for a
period of twelve (12) months, from the date of such termination, payable in
accordance with the Company's established policies as then in effect; (ii) any
unvested portion of any outstanding options and/or any unvested shares of
Company common stock that have been issued under any stock option or stock
incentive plans of the Company or otherwise shall immediately vest and become
exercisable (except with respect to any options granted pursuant to a plan
intended to qualify under Section 423 of the Code) subject to the terms of the
applicable award agreement; (iii) all equity in the life insurance policy
referenced in Section 4(b) shall be paid; and (iv) all accrued but unused
vacation shall also be paid. Executive shall be entitled to resign for Good
Reason, as that term is used in this Section, for the following reasons: a
change of control as defined in Section 11(b); a material change in Executive's
terms and conditions of employment; any material reduction of Executive's duties
and/or responsibilities; any material reduction in Executive's benefits; or a
change in location of the Company in excess of 50 miles.

        8.      Spousal Travel. The Company shall pay for Executive's spouse to
travel with him, both domestically and internationally, for any trips where
Executive will be away from home for four or more consecutive days. This
includes all necessary travel and accommodations. Notwithstanding, the total
cost of such spousal travel is not to exceed Twenty-Five Thousand Dollars
($25,000) per annum unless otherwise determined by the Board.

                                                                             -3-

<PAGE>

        9.      Change of Control Benefits. In the event of a "Change of
Control" (as defined below) that occurs prior to the Executive's termination of
employment, any unvested portion of any outstanding options and/or any unvested
shares of Company common stock that have been issued under any stock option and
stock incentive plans of the Company or otherwise will have such vesting
accelerated so as to become 100% vested. Thereafter, any outstanding options
and/or shares of Company common stock that have been issued under any stock
option and stock incentive plans of the Company or otherwise will continue to be
subject to the terms, definitions and provisions of the applicable award
agreements.

        10.     Gross-Up. In the event that any compensation and other benefits
provided for in this Agreement or amounts otherwise payable to the Executive
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and will be subject to
the excise tax imposed by Section 4999 of the Code, then the Executive shall
receive (i) a payment from the Company sufficient to pay such excise tax, and
(ii) an additional payment from the Company sufficient to pay the excise tax and
federal and state income taxes arising from the payments made by the Company to
Executive pursuant to this sentence. Any determination required under this
Section shall be made in writing by the Company's independent public accountants
(the "Accountants"), whose determination shall be conclusive and binding upon
the Executive and the Company for all purposes. In the event that the excise tax
incurred by Executive is determined by the Internal Revenue Service to be
greater or lesser than the amount so determined by the Accountants, the Company
and Executive agree to promptly make such additional payment, including interest
and any tax penalties, to the other party as the Accountants reasonably
determine is appropriate to ensure that the net economic effect to Executive
under this Section, on an after-tax basis, is as if the Code Section 4999 excise
tax did not apply to Executive. For purposes of making the calculations required
by this Section, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on interpretations of
the Code for which there is a "substantial authority" tax reporting position.
The Company and the Executive shall furnish to the Accountants such information
and documents as the Accountants may reasonably request in order to make a
determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.

        11.     Definitions.

                    (a) Cause. For purposes of this Agreement, "Cause" is
defined as (i) an act of material dishonesty made by Executive in connection
with Executive's responsibilities as an employee, (ii) Executive's conviction
of, or plea of nolo contendere to, a felony, (iii) Executive's gross misconduct,
or (iv) Executive's continued substantial violations of his employment duties
after Executive has received a written demand for performance from the Company
which specifically sets forth the factual basis for the Company's belief that
Executive has not substantially performed his duties and provides Executive five
(5) business days to cure any such violation(s).

                    (b) Change of Control. For purposes of this Agreement,
"Change of Control" of the Company is defined as: (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing 50%
or more of the total voting power represented by the Company's then outstanding
voting securities; or (ii) a change in the composition of the Board occurring
within a two-year period, as a result of which

                                                                             -4-

<PAGE>

fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" will mean directors who either (A) are directors of the Company as of
the date hereof, or (B) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination (but will not include an individual
whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company); or (iii) the date
of the consummation of a merger or consolidation of the Company with any other
corporation that has been approved by the shareholders of the Company, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company; or (iv)
the date of the consummation of the sale or disposition by the Company of all or
substantially all the Company's assets.

        12.     Confidential Information. Executive agrees that the Company's
Confidential Information and Invention Assignment Agreement (the "Confidential
Information Agreement") that Executive has previously signed shall remain in
full force and effect throughout the term of this Agreement.

        13.     Conditional Nature of Severance Payments.

                    (a) Noncompete. Executive acknowledges that the nature of
the Company's business is such that if Executive were to become employed by, or
substantially involved in, the business of a competitor of the Company during
the severance payment period following the termination of Executive's employment
with the Company, it would be very difficult for the Executive not to rely on or
use the Company's trade secrets and confidential information. Thus, to avoid the
inevitable disclosure of the Company's trade secrets and confidential
information, Executive agrees and acknowledges that Executive's right to receive
the severance payments set forth in Section 7 (to the extent Executive is
otherwise entitled to such payments) shall be conditioned upon the Executive not
directly or indirectly engaging in (whether as an employee, consultant, agent,
proprietor, principal, partner, shareholder, corporate officer, director or
otherwise), nor having any ownership interest in or participating in the
financing, operation, management or control of, any person, firm, corporation or
business that competes with Company. Upon any breach of this section, all
severance payments pursuant to this Agreement shall immediately cease. For
purposes of this Agreement, "competition" with the Company is defined as any
business that develops and/or markets: (i) inhibitors of phospholipids with
applications for cancer prevention or treatment; (ii) use of polymers (PG or PA)
as novel cancer drug delivery technology; or (iii) products utilizing arsenic
trioxide as an anti-cancer agent.

                    (b) Non-Solicitation. Executive agrees and acknowledges that
Executive's right to receive the severance payments set forth in Section 7 (to
the extent Executive is otherwise entitled to such payments) shall be
conditioned upon Executive not either directly or indirectly soliciting,
inducing, attempting to hire, recruiting, encouraging, taking away, hiring any
employee of the Company or causing an employee to leave his or her employment
either for Executive or for any other entity or person.

                                                                             -5-

<PAGE>

                    (c) Understanding of Covenants. The Executive represents
that he (i) is familiar with the foregoing covenants not to compete and not to
solicit, and (ii) is fully aware of his obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.

        14.     Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, "successor" means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance or other
disposition of Executive's right to compensation or other benefits will be null
and void.

        15.     Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given (i) on the
date of delivery if delivered personally, (ii) one (1) day after being sent by a
well established commercial overnight service, or (iii) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:

                  If to the Company:

                  Cell Therapeutics, Inc.
                  501 Elliot Avenue West,
                  Suite 400
                  Seattle, Washington 98819
                  Attn: Chairman of the Board

                  If to Executive:

                  James A. Bianco, M.D.
                  10453 Maplewood Place, S.W.
                  Seattle, Washington 98146

                  or, in the event Executive changes residences, at the last
                  residential address known by the Company.

        16.     Severability. In the event that any provision hereof becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement will continue in full force and effect without said
provision.

                                                                             -6-

<PAGE>

        17.     Arbitration.

                    (a) Executive agrees that any dispute or controversy arising
out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by binding arbitration to be held in King County,
Washington in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator will be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.

                    (b) The arbitrator(s) will apply Washington law to the
merits of any dispute or claim, without reference to rules of conflicts of law.
The arbitration proceedings will be governed by federal arbitration law and by
the Rules, without reference to state arbitration law. The Executive hereby
consents to the personal jurisdiction of the state and federal courts located in
Washington for any action or proceeding arising from or relating to this
Agreement or relating to any arbitration in which the parties are participants.

                    (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH
DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, DISCRIMINATION
CLAIMS.

        18.     Integration. This Agreement, together with the Confidential
Information Agreement represents the entire agreement and understanding between
the parties as to the subject matter herein and supersedes all prior or
contemporaneous agreements whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Agreement will be binding unless
in writing and signed by duly authorized representatives of the parties hereto.

        19.     Tax Withholding. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.

        20.     Governing Law. This Agreement will be governed by the laws of
the State of Washington.

        21.     Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

        IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by their duly authorized officers, as of the day and
year first above written.

                                                                             -7-

<PAGE>

        Cell Therapeutics, Inc.

        By:  /s/ Jack Bowman                             Date: 03/15/03
             ----------------------------------

        Title: Chairman, Compensation Committee
               --------------------------------

        James A. Bianco, M.D.

        /s/ James A. Bianco                              Date:      3/15/03
        ----------------------------------------               -----------------
        James A. Bianco, M.D.

                                                                             -8-

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