Document:

<PAGE>
                                                                    Exhibit 10.7

                                     LEASE

                                    BETWEEN

                       AHP SUBSIDIARY HOLDING CORPORATION

                                   LANDLORD,

                                      AND

                          QUINTON INSTRUMENT COMPANY,

                                    TENANT.

                                  FOR PREMISES

                                       AT

                              BOTHELL, WASHINGTON

                            DATED AS OF JUNE 1, 1998

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>
SECTION                               TITLE                                      PAGE
-------                               -----                                      ----
<S>       <C>                                                                    <C>
    1.    DEMISE AND TERM OF DEMISE.............................................   3
    2.    RENT, TAXES, ASSESSMENTS AND OTHER CHARGES............................   5
    3.    USE OF PREMISES; COMPLIANCE WITH LAWS.................................  13
    4.    REPRESENTATIONS BY LANDLORD...........................................  14
    5.    INSURANCE.............................................................  15
    6.    DAMAGE OR DESTRUCTION.................................................  17
    7.    CONDEMNATION..........................................................  18
    8.    SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATE.......................  19
    9.    REPAIRS, MAINTENANCE, ALTERATIONS, ETC................................  21
    10.   INTENTIONALLY OMITTED.................................................  23
    11.   ASSIGNMENTS, SUBLETTING AND MORTGAGING................................  23
    12.   INDEMNITY.............................................................  27
    13.   DEFAULT PROVISIONS; LANDLORD'S REMEDIES...............................  30
    14.   BANKRUPTCY AND INSOLVENCY.............................................  34
    15.   ENTRY BY LANDLORD, ETC................................................  36
    16.   COVENANT OF QUIET ENJOYMENT...........................................  37
    17.   EFFECT OF CONVEYANCE; LIMITS OF
          LIABILITY OF LANDLORD; DEFINITION
          OF "LANDLORD".........................................................  37
    18.   SURRENDER; HOLDING OVER BY TENANT.....................................  38
    19.   CURING DEFAULTS; FEES AND EXPENSES....................................  39
    20.   MECHANICS' AND OTHER LIEN.............................................  39
    21.   SIGNS; ADDRESS........................................................  40
    22.   WAIVERS AND SURRENDERS TO BE IN
          WRITING; RIGHT TO TERMINATE...........................................  40
    23.   COVENANTS BINDING ON SUCCESSORS AND ASSIGNS...........................  41
    24.   RESOLUTION OF DISPUTES................................................  41
    25.   NOTICES ..............................................................  42
    26.   DEFINITIONS; HEADINGS; CONSTRUCTION OF LEASE..........................  43
    27.   FORCE MAJEURE.........................................................  44
    28.   BROKERAGE ............................................................  44
    29.   MISCELLANEOUS PROVISIONS..............................................  45
    30.   COMPLIANCE WITH ENVIRONMENTAL LAWS....................................  46
    31.   INTENTIONALLY OMITTED ................................................  49
    32.   INTENTIONALLY OMITTED ................................................  49
    33.   COST SHARING ARRANGEMENT .............................................  49
    34.   SECURITY .............................................................  51
    35    ACCESS RIGHTS/CAFETERIA...............................................  51
    36.   NET LEASE.............................................................  53
    37.   INCORPORATION OF SHERWOOD DEMISED PREMISES............................  53
    38.   RIGHT OF FIRST REFUSAL................................................  57
</TABLE>

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                                    EXHIBITS

EXHIBIT A   -    THE PROPERTY, BUILDINGS AND PARKING LOT

EXHIBIT B   -    ORIGINAL QUINTON DEMISED PREMISES, QUINTON'S DEMISED PREMISES,
                 SHERWOOD'S DEMISED PREMISES AND COMMON AREAS

EXHIBIT C   -    COST SHARING ARRANGEMENT

EXHIBIT D   -    RENTAL SCHEDULE

EXHIBIT E   -    JANITORIAL SPECIFICATIONS

EXHIBIT F   -    INTENTIONALLY DELETED

EXHIBIT G   -    SWD PREMISES TO BE INCORPORATED

EXHIBIT H   -    RIGHT OF FIRST REFUSAL SPACE

<PAGE>

                                      LEASE

        THIS (this "Lease") is entered into this as of June 1, 1998, between AHP
SUBSIDIARY HOLDING CORPORATION, a Delaware corporation (the "Landlord"), and
QUINTON INSTRUMENT COMPANY., a Washington corporation (the "Tenant").

                              W I T N E S S E T H:

        WHEREAS, Landlord, by deed to it from Quinton Instrument Company, dated
February 25, 1998 is the owner of that certain land located in Bothell,
Washington and the improvements and buildings thereon (the "Property"), more
particularly described in Exhibit A attached hereto and made a part hereof; and

        WHEREAS, the various buildings located on the land are known as the
Administrative Building consisting of approximately 91,250 square feet, the
Production Building consisting of approximately 171,816 square feet, the North
Barn consisting of approximately 11,560 square feet and the South Barn
consisting of approximately 7,241 square feet (the Administrative Building, the
Production Building, the North Barn and the South Barn are sometimes
collectively referred to as the "Buildings");

        WHEREAS, there is also located on the Property a paved and striped
parking area consisting of approximately 1,200 parking spaces (hereinafter
referred to as the "Parking Lot"); and

        WHEREAS, the Property, Buildings and the Parking Lot are depicted on
Exhibit A attached hereto.

        WHEREAS, prior to the date hereof, Tenant occupied certain portions of
the Buildings more particularly depicted on Exhibit B of the Original Lease
(hereafter defined) as Quinton's office space ("Quinton's Office Space"),
Quinton's manufacturing space ("Quinton's Manufacturing Space"), Quinton's
warehouse space ("Quinton's Warehouse Space") and Quinton's barn space
("Quinton's Barn Space") (Quinton's Office Space, Quinton's Manufacturing Space,
Quinton's Warehouse Space and Quinton's Barn Space are hereinafter referred to
as "Original Quinton's Demised Premises" or the "Original Quinton Demised
Premises") (such prior occupancy by Tenant and all rights of Tenant in
connection therewith, (the "Tenant Prior Occupancy"), which Tenant continues to
occupy on the date hereof pursuant to the Original Lease; and

        WHEREAS, prior to the date hereof, Sherwood Medical Company, a Delaware
corporation ("Sherwood"), formerly a wholly owned subsidiary of American Home
Products Corporation, which was acquired by Tyco International (US), Inc., a
Delaware corporation, the parent of SWD Holding, Inc., a Delaware Corporation
("SWD"), occupied certain portions of the Buildings more particularly depicted
on Exhibit B as SWD's office space ("SWD's Office Space"), SWD's manufacturing
space ("SWD's Manufacturing Space"), SWD's warehouse space ("SWD's Warehouse
Space") and SWD's Barn Space ("SWD's Barn Space") (SWD's Office Space, SWD's

                                       1
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Manufacturing Space, SWD's Warehouse Space and SWD's Barn Space are hereinafter
referred to as "SWD's Demised Premises") (such prior occupancy by Sherwood being
referred to as the "Sherwood Prior Occupancy"), which Sherwood continues to
occupy on the date hereof pursuant to the SWD Lease (hereafter defined); and

        WHEREAS, pursuant to the Tenant Prior Occupancy and the Sherwood Prior
Occupancy, Tenant and Sherwood, respectively, were granted certain non-exclusive
rights to use certain common areas of the Buildings, as depicted on Exhibit B,
and the non-exclusive right to use the Parking Lot and certain other site
improvements and Tenant and Sherwood also were granted certain cross access
rights and rights to use certain portions of each other's leased premises and
Tenant and Sherwood are presently using certain portions of the Buildings in
common.

        WHEREAS, Landlord and Tenant terminated the Tenant Prior Occupancy and
entered into a certain lease (the "Original Lease"), dated March 16, 1998 (the
"Original Execution Date"), which was a net, net, net lease (except as otherwise
expressly provided in the Original Lease); and

        WHEREAS, pursuant to the Original Lease Landlord and Tenant provided
that, since prior to the date of the Original Lease SWD had access to and used,
and SWD desired to continue to have access to and use, certain areas of the
Original Quinton's Demised Premises, Tenant would grant to SWD certain
non-exclusive rights of access onto, across and to and from the Original
Quinton's Demised Premises (such areas of access being depicted on Exhibit B of
the Original Lease and hereinafter being referred to as "Access Areas") and
non-exclusive rights to use the Access Areas and to use certain areas of the
Original Quinton Demised Premises; and

        WHEREAS, Landlord and Tenant have agreed that Tenant shall be
responsible to reimburse Landlord for Tenant's Proportionate Share, as
hereinafter defined, of Operating Expenses of the Property, as hereinafter
defined; and

        WHEREAS, prior hereto Landlord and SWD have entered into a lease for SWD
to lease from Landlord the SWD Demised Premises (the "SWD Lease") and SWD,
Landlord and Tenant have entered into a Cost Sharing and Cross Access Agreement
dated February 27, 1998 as amended as of the date hereof (as so amended, the
"Cost Sharing Arrangement") regarding the sharing of costs of certain expenses
of the Property, the providing of certain services, and the granting by Tenant
and SWD of certain cross access and use rights with respect to their respective
leased premises, a copy of which is attached hereto and made a part hereof as
Exhibit C; and

        WHEREAS, the capital stock of Tenant has as of this date been acquired
by QIC Holding Corp. pursuant to a certain Stock Purchase Agreement by and among
A. H. Robins Company, Incorporated and American Home Products Corporation, as
Seller, and QIC Holding Corp., as Buyer; and

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<PAGE>

        WHEREAS, Landlord and Tenant have entered into a Transition Services
Agreement dated as of the date hereof ("Bothell Transition Agreement"); and

        WHEREAS, it is the intention of the parties that, upon the Commencement
Date (hereafter defined), the Original Lease shall be terminated, and the terms
of this Lease shall govern and control their respective rights and obligations
with respect to the Original Quinton Demised Premises and the Property.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by each of the parties hereto, Landlord and
Tenant agree as follows:

        1. DEMISE AND TERM OF DEMISE

            1.1 (a) The Commencement Date shall be the date of this Lease.

                (b) This Lease shall be and become effective as of the
Commencement Date. As of the Commencement Date, the terms and provisions of this
Lease shall govern and control the respective rights and obligations of Landlord
and Tenant with respect to the Original Quinton Demised Premises, Quinton's
Demised Premises and the Original Surrender Space, as hereafter defined, and the
Property.

            1.2 (a) Landlord demises and leases unto Tenant, and Tenant hires
and takes from Landlord, in consideration of the rents to be paid and the
covenants, agreements and conditions to be performed, observed and fulfilled by
Tenant, (i) the Quinton Demised Premises described on Exhibit B attached hereto
and made a part hereof (as same may be modified from time to time in accordance
with this Lease), referred to herein as the Quinton Demised Premises (as same
may be modified from time to time in accordance with this Lease), and (ii) the
Original Surrender Space as hereinafter defined.

                (b) Tenant, not later than 5:00 p.m. on December 31, 1998 (WITH
TIME OF THE ESSENCE), shall, at Tenant's sole cost and expense, vacate and
surrender to Landlord such portions of the Original Quinton Demised Premises as
are not included in the Quinton Demised Premises as set forth in Section 1.2 of
this Lease (the "Original Surrender Space"), in the same condition and subject
to the same terms and conditions as required under Section 18 of this Lease upon
the expiration of the term hereof. All rent and additional rent on the Original
Surrender Space shall be apportioned between Landlord and Tenant as of the date
Tenant has fully surrendered and vacated the entirety of the Original Surrender
Space to Landlord in accordance with the provisions and requirements of this
Lease. Prior to the vacating and surrender by Tenant to Landlord of the Original
Surrender Space in accordance herewith, the Original Surrender Space shall be
subject to all of the terms, covenants and provisions of this Lease binding upon
Tenant, with the same force and effect as if same were included in the Quinton
Demised Premises, except that (i) Tenant shall not be required to pay any annual
basic rent, or Tenant's Proportionate Share of Operating Expenses and Taxes (as
such terms are hereafter defined) in respect of the Original Surrender Space
(only), but (i)

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Tenant shall remain obligated to pay for all utility service to the Original
Surrender Space and (ii) Tenant shall remain obligated to pay rent and
additional rent (including without limitation Tenant's Proportionate Share of
Operating Expenses and Taxes) and utilities as otherwise provided in this Lease,
and (iii) except as required to maintain the Original Surrender Space and vacate
and surrender the Original Surrender Space in the condition required hereby,
Tenant shall not make any alterations, improvements or changes to the Original
Surrender Space without Landlord's prior written consent.

                (c) Nothing in this Lease shall permit Tenant to fail to vacate
and surrender the Original Surrender Space to Landlord as required in this
Section 1.2 not later than December 31, 1998; and Tenant agrees that Tenant
shall so vacate and surrender to Landlord the Original Surrender Space not later
than December 31, 1998. In the event that Tenant shall fail to vacate and
surrender to Landlord the Original Surrender Space as required hereunder, Tenant
shall be considered a holdover tenant of such space and, during the first ninety
(90) days of any such holdover period, shall pay Landlord annual basic rent per
annum equal to $15.00 times 66,142 being the number of square feet in the
Original Surrender Space ("Original Surrender Space Rent"), and, if Tenant shall
holdover beyond the first ninety (90) days, it shall pay to Landlord as annual
basic rent per annum one and one-half (1 1/2) times the Original Surrender Space
Rent for such additional holdover period.

            1.3 The common area of the Property (the "Common Area") shall mean
those interior and exterior portions of the Property designated on Exhibit B,
including the improvements and facilities used for parking areas, access and
perimeter roads, landscaped areas, exterior walks, and washrooms and common
hallways and Access Areas located in the Administrative Building, the Production
Building, the North Barn, the South Barn and the Parking Lot as of the date
hereof as shown on Exhibit B. Tenant shall have the non-exclusive right, during
the term of this Lease, to use the Common Area, in a reasonable manner, for
itself, its employees, invitees, guests, contractors and licensees for parking,
ingress, egress and similar uses and Tenant acknowledges that SWD (and all other
tenants or occupants or all or any portion of the SWD Demised Premises), for
itself, its employees, invitees, guests, contractors, subtenants (if any) and
licensees shall also have similar rights to use the Common Area. Landlord shall
have the right, at any time and from time to time (a) to grant to any tenant or
tenants which hereafter leases or lease all or any of the Property the same
rights which inure to SWD as herein described, and/or (b) to (i) limit Tenant to
the use of Tenant's Proportionate Share (hereinafter defined) of the parking
spaces on the Property and to designate the location thereof provided that
throughout the Term, Tenant shall have the non-exclusive right to use 750 for
the period from the Commencement Date to December 31, 1998 and 510 parking
spaces thereafter during the Term in the parking areas as shown on Exhibit A
attached hereto and made a part hereof and (ii) alter, modify, increase or
reduce the Common Area, provided that access to and from the Quinton Demised
Premises shall not be materially or adversely affected thereby. As of the date
of this Lease, SWD shall be entitled to the use of 300 parking spaces as shown
on the map attached hereto as Exhibit A. All Common Areas shall be subject to
the exclusive control and management of Landlord, subject to the rights of
Tenant, SWD and any other tenant or tenants of the Property to use and have
access to the Common Area and subject to such rights as Landlord shall have
pursuant to this Lease, the SWD Lease, the Cost Sharing Arrangement, or
otherwise.

                                       4
<PAGE>

            1.4 The term of the Lease (the "Term") (i) shall commence on the
Commencement Date, (ii) shall be for a period equal to (A) the period between
the Commencement Date and the Term Commencement Date (hereafter defined) plus
(B) the five (5) year period commencing as of 12:01 a.m. on the date (the "Term
Commencement Date") which is the earlier to occur of (A) January 1, 1999 and (B)
the date Tenant first occupies the Quinton Demised Premises, and (iii) shall
terminate and expire midnight on the date immediately preceding the fifth annual
anniversary of the Term Commencement Date (the "Expiration Date"). Tenant shall,
within ten (10) days after request by Landlord, execute, acknowledge and deliver
to Landlord an instrument in form and substance reasonably acceptable to
Landlord confirming (i) the Term Commencement Date and the Expiration Date, but
no such instrument shall be required to make the provisions of this Section 1.4
effective.

            1.5 Tenant shall have the option to renew this Lease for two (2)
successive renewal terms of two (2) years each (herein referred to individually
as a "Renewal Term" and collectively "Renewal Terms") the first of which (the
"First Renewal Term") shall commence on the day following the expiration of the
initial five (5) year Term and end on the second anniversary of the commencement
date of the First Renewal Term and the second of which (the "Second Renewal
Term") shall commence on the day following the expiration of the First Renewal
Term and end on the second anniversary of the commencement date of the Second
Renewal Term, unless either of the Renewal Terms shall sooner terminate pursuant
to the terms of this Lease or otherwise. A Renewal Term shall commence only if
(i) Tenant shall have notified Landlord in writing at least nine (9) months
prior to the expiration of Term or the First Renewal Term, as the case may be,
of Tenant's exercise of such renewal option, and (ii) immediately prior to the
expiration of the initial five (5) year Term or the First Renewal Term, as the
case may be, this Lease shall be in full force and effect and no Event of
Default shall have occurred and be continuing. Time is of the essence with
respect to the giving of the notice of Tenant's exercise of a renewal option. A
Renewal Term shall be upon all of the agreements, terms, covenants and
conditions hereof binding upon Tenant and Landlord, except that (i) the basic
annual rent (as defined in Section 2.1) shall be as provided in Exhibit D, (ii)
there shall be no further renewal right after the expiration of the Second
Renewal Term, and (iii) Tenant shall have no right or option to take any
additional or expansion space. Upon the commencement of a Renewal Term, (x) such
Renewal Term shall be added to and become part of the Term (but shall not be
considered part of the initial five (5) year Term or the First Renewal Term, as
the case may be), (y) any reference to "this Lease", to the "Term", the "term of
this Lease" or any similar expression shall be deemed to include such Renewal
Term, and (z) the Expiration Date shall become the expiration of such Renewal
Term.

        2. RENT, TAXES, ASSESSMENTS AND OTHER CHARGES

            2.1 Commencing as of the Commencement Date, Tenant shall pay to
Landlord, at the address for payments provided in accordance with Section 25,
basic annual rent as shown on Exhibit D, which shall thereafter be adjusted from
time to time in accordance with the terms of this Lease.

                                       5
<PAGE>

            2.2 Such basic annual rent shall be paid by Tenant to Landlord in
equal monthly installments, in advance, on the first day of each calendar month
during the Term without notice, demand, abatement, deduction, counterclaim or
set off of any kind. Tenant shall pay the rent in lawful money of the United
States which shall be legal tender for all debts, public and private, at the
time of payment. Any obligation of Tenant for payment of rent which shall have
accrued with respect to any period during the Term shall survive the expiration
or termination of this Lease.

            2.3 The installments of basic annual rental payable under Section
2.1 for the partial calendar months at the beginning and end of each year of the
Term shall be pro-rated in the proportion of the number of days in the partial
calendar month to the number of days in the year, and shall be payable as of the
Commencement Date, and thereafter as of the first day of the last calendar month
in each year of the Term.

            2.4 Intentionally Omitted.

            2.5 Intentionally Omitted.

            2.6 Whenever under the terms of this Lease any sum of money is
required to be paid by Tenant in addition to the rental reserved, and said
additional amount so to be paid is not designated as "additional rent," then
said amount shall nevertheless, if not paid when due, be deemed "additional
rent" and collectible as such with any installment of rental thereafter falling
due hereunder, or, if no such installment thereunder shall fall due, on demand.

            2.7 "Tenant's Taxes" shall mean all taxes, assessments, license fees
and other governmental charges or impositions levied or assessed against or with
respect to Tenant's personal property, furnishings, equipment, movable
partitions, business machines and other trade fixtures installed, located or
attached to the Property. Tenant shall pay all Tenant's Taxes before delinquency
and, at Landlord's request, shall furnish Landlord satisfactory evidence
thereof. If any lien shall at any time be filed against the Property or any part
thereof with respect to Tenant's Taxes not paid by Tenant when due, or any
judgment, attachment or levy is filed or recorded against the Property or any
part thereof with respect thereto, Tenant, within thirty (30) days after the
attachment thereof, shall cause the same to be discharged of record by payment,
deposit, bond, order of a court of competent jurisdiction or otherwise. If
Tenant shall fail to cause such lien, judgment, attachment or levy to be
discharged within the period aforesaid, then, in addition to any other right or
remedy, Landlord may, but shall not be obligated to, discharge the same by
bonding proceedings, if permitted by law (and if not so permitted, by deposit in
court). Any amount so paid by Landlord, including all cost and expenses paid by
Landlord in connection therewith, together with interest thereon at the rate of
10% per annum (or, if lower, the maximum rate permitted by law) from the
respective dates of Landlord's so paying any such amount, cost or expenses,
shall constitute additional rent payable by Tenant under this Lease and shall be
paid by Tenant to Landlord on demand.

            2.8 For purposes of this Lease, the following terms shall have the
meanings ascribed to them in this Section 2.8:

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            (a) "Tenant's Proportionate Share" shall mean the ratio, expressed
as a percentage, of the number of leasable square feet comprising Quinton's
Demised Premises from time to time (127,695 as of the Commencement Date) (which
shall hereafter be adjusted upon any increase or reduction in the in accordance
with this Lease) to the total number of leasable square feet in the Buildings
(282,137), that is to say 45.26% as of the Commencement Date, subject to later
adjustment in accordance herewith.

            (b) "Fiscal Year" shall mean each fiscal year of Landlord or part
thereof during the Term, as such fiscal year may be changed at any time and from
time to time in the sole discretion of Landlord. The fiscal year of Landlord as
of the date hereof is January 1 through December 31.

            (c) "Lease Year" shall mean a period of one (1) year commencing on
the Commencement Date and thereafter commencing upon each anniversary thereof.

            (d) "Operating Expenses" shall mean and include all amounts,
expenses and costs of whatever nature that Landlord incurs because of or in
connection with the operation, repair, or management, or (to the extent provided
in clause (6) of this subsection (d)), replacement of the Property (the
"Operating Expenses"). Operating Expenses shall be determined on an accrual
basis in accordance with sound management accounting principles consistently
applied and shall include, but shall not be limited to, the following:

               (1) Costs and expenses of maintenance and repair of the Property,
        including Common Areas.

               (2) Costs of maintenance and replacement of landscaping.

               (3) Costs of providing utilities and services to the Common Area.

               (4) Premiums for property (including coverage for earthquake and
        flood if carried by Landlord), liability, rental income and other
        insurance and commercially reasonable deductible amounts under such
        insurance paid in connection with repair or restoration of the Property
        after any damage or destruction.

               (5) Fees and charges for licenses, permits and inspections
        reasonably necessary for the operation of the Property.

               (6) Costs of capital improvements required to meet changed
        governmental regulations or which are, reasonably and in good faith,
        intended to reduce Operating Expenses; such costs, together with
        interest on the unamortized balance at the rate paid by Landlord on
        funds borrowed for the purpose of constructing such capital improvements
        (or, if Landlord funds such costs itself in lieu of borrowing such
        amount, deemed interest equivalent to the interest at a

                                       7
<PAGE>

        commercially reasonable rate that would have been incurred had such
        amount been borrowed by Landlord), to be amortized over such reasonable
        periods as Landlord shall determine, consistent with generally accepted
        accounting principles.

               (7) Costs associated with the maintenance of any on-site Property
        management offices or related facilities.

               (8) Third-party property management fees.

               (9) Costs for accounting, legal and other professional services
        incurred in connection with the management and operation of the Property
        and the calculation of Operating Expenses and Taxes (as defined below).

               (10) A reasonable allowance for depreciation on machinery and
        equipment used to maintain the Property and on other personal property
        used by Landlord on the Property in connection with the management and
        operation of the Property consistent with generally accepted accounting
        principles.

               (11) The reasonable cost of contesting the validity or
        applicability of any governmental enactments that may affect the
        Property.

               (12) Wages, salaries, fees, related taxes, insurance costs,
        benefits (including amounts payable under medical, pension and welfare
        plans and any amounts payable under collective bargaining agreements)
        and reimbursement of expenses of and relating to all personnel
        principally engaged in operating, repairing, managing, replacing (to the
        extent provided in clause (6) of this subsection (d)) and maintaining
        the Property.

               (13) All supplies, tools, equipment and materials used in
        operating, repairing and maintaining the Property.

               (14) Cost of security and security personnel, devices and systems
        (including, without limitation, any security office on the Property).

Notwithstanding any contrary provision of this Lease, Operating Expenses shall
not include (i) capital improvements other than those specifically enumerated
above in clause (6) of the definition of Operating Expenses; (ii) costs of
special or additional services rendered to individual tenants (including Tenant)
for which a special charge is made; (iii) interest and principal payments on
loans or indebtedness secured by the Property or ground rent payments (if any);
(iv) costs of improvements for other tenants of the Property; (v) costs of
services or other benefits of a type which are not available to Tenant but which
are available to other tenants or occupants, and costs for which Landlord is
reimbursed by other tenants of the Property other than through payment of
tenants' shares of Operating Expenses and Taxes; (vi) leasing commissions,
attorneys' fees and other expenses

                                       8
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incurred in connection with negotiations or disputes with other tenants,
prospective tenants or occupants of the Property, or in connection with the
enforcement or violation by Landlord or such tenant or occupant of any lease;
(vii) depreciation or amortization, other than as specifically enumerated above
in the definition of Operating Expenses; (viii) costs, fines or penalties
incurred due to Landlord's violation of any law or governmental regulation; (ix)
the excess of the cost of supplies and services provided by subsidiaries and
affiliates of Landlord, or Landlord itself, over competitive costs by
independent suppliers and contractors of comparable buildings in the vicinity of
the Property; and (x) Taxes.

    If Landlord does not furnish during any Fiscal Year any particular work or
service (the cost of which, if performed by Landlord, would constitute an
Operating Expense) to a tenant which has undertaken to perform such work or
service in lieu of the performance thereof by Landlord, then Operating Expenses
shall be deemed to be increased by an amount equal to the additional expense
which would reasonably have been incurred during such Fiscal Year by Landlord if
it had, at its cost, furnished such work or service to such tenant; provided,
however, Landlord shall not be entitled to be reimbursed for an amount in excess
of the actual Operating Expenses. If during any Fiscal Year less than 95% of the
leasable square feet of the Property is leased and occupied by tenants, then the
Operating Expenses for such Lease Year shall be increased proportionately to
reflect the amount of the Operating Expenses which, in Landlord's reasonable
judgment, would have been incurred during such Lease Year if 95% of the leasable
square feet of the Property was leased and occupied by tenants.

            (e) "Taxes" shall mean and include all real property taxes and
general, special or district assessments or other governmental impositions, of
whatever kind, nature or origin imposed on or by reason of the ownership or use
of the Property; governmental charges, fees or assessments for transit
(including without limitation, area-wide traffic improvement assessments and
transportation system management fees), housing, police, fire or other
governmental service or purported benefits to the Property; personal property
taxes assessed on the personal property of Landlord used in the operation of the
Property; service payments in lieu of taxes and taxes and assessments of every
kind and nature whatsoever levied or assessed in addition to, in lieu of or in
substitution for existing or additional real or personal property taxes on the
Property or the personal property described above; taxes and assessments on the
gross or net rental receipts of Landlord derived from the Property (excluding,
however, state and federal personal or corporate income taxes measured by the
net income of Landlord from all sources and inheritance, franchise or estate
taxes); and the reasonable cost of contesting by appropriate proceedings the
amount or validity of any taxes, assessments or charges described above. Taxes
shall also include any personal property taxes imposed upon the furniture,
fixtures, machinery, equipment, apparatus, systems and appurtenances of Landlord
used in connection with the Property for the operation thereof. Taxes shall also
include the amount of all fees, costs and expenses (including, without
limitation, attorneys' fees and court costs), if any, paid or incurred by
Landlord each Fiscal Year in seeking or obtaining any refund or reduction of
Taxes or for contesting or protesting any imposition of Taxes, whether or not
successful and whether or not attributable to Taxes assessed, paid or incurred
in such Fiscal Year.

                                       9
<PAGE>

            2.9 (a) In addition to the basic annual rental, Tenant shall pay
with respect to each Fiscal Year Tenant's Proportionate Share of all Operating
Expenses and Taxes Tenant's Proportionate Share of Operating Expenses shall be
paid in monthly installments in advance on the first day of each calendar month
during such Fiscal Year in the Term in amounts sufficient to satisfy payment of
the Operating Expenses for such Fiscal Year as reasonably estimated by Landlord
from time to time prior to or during any Fiscal Year and communicated to Tenant
by written notice (the "Estimated Operating Expense Adjustment"). If Landlord
does not deliver such a notice (an "Estimate") prior to the commencement of any
Fiscal Year, Tenant shall continue to pay Estimated Operating Expense Adjustment
as provided in the most recently received Estimate (or Updated Estimate, as
defined below) until the Estimate for such Fiscal Year is delivered to Tenant.
If, from time to time during any Fiscal Year, Landlord reasonably determines
that Operating Expenses for such Fiscal Year have increased or will increase,
Landlord may deliver to Tenant an updated Estimate ("Undated Estimate") for such
Fiscal Year. Monthly payments of Estimated Operating Expense Adjustment paid
subsequent to Tenant's receipt of the Estimate or Updated Estimate for any
Fiscal Year shall be in the amounts provided in such Estimate or Updated
Estimate, as the case may be. In addition, Tenant shall pay to Landlord within
thirty (30) days after receipt of such Estimate or Updated Estimate, the amount,
if any, by which the aggregate of the Estimated Operating Expense Adjustment
provided in such Estimate or Updated Estimate, as the case may be, with respect
to prior months in such Fiscal Year exceeds the aggregate of the Estimated
Operating Expense Adjustment paid by Tenant with respect to such prior months.

     After the end of each Fiscal Year, Landlord shall send to Tenant a
statement (the "Final Operating Expense Adjustment Statement") showing (i) the
calculation of the Operating Expense Adjustment for such Fiscal Year, (ii) the
aggregate amount of the Estimated Operating Expense Adjustment previously paid
by Tenant for such Fiscal Year, and (iii) the amount, if any, by which the
aggregate amount of the installments of Estimated Operating Expense Adjustment
paid by Tenant with respect to such Fiscal Year exceeds or is less than the
Expense Adjustment for such Fiscal Year. Tenant shall pay the amount of any
deficiency to Landlord within thirty (30) days of the sending of such statement.
At Landlord's option, any excess shall either be credited against payments past
or next due hereunder or refunded by Landlord, provided Tenant is not then in
default hereunder.

     On reasonable advance written notice given by Tenant within thirty (30)
days following the receipt by Tenant of the Final Operating Expense Adjustment
Statement, Landlord shall make available to Tenant Landlord's books and records
maintained with respect to the Operating Expenses for such Fiscal Year. If
Tenant wishes to contest any item within any Final Operating Expense Adjustment
Statement, Tenant shall do so in a written notice (a "Contest Notice") received
by Landlord within thirty (30) days following Tenant's inspection of Landlord's
books and records, but in any event not later than sixty (60) days after
Landlord shall have made its books and records available to Tenant for
inspection, which Contest Notice shall specify in detail the item or items being
contested and the specific grounds therefor. However, the giving of such Contest
Notice shall not relieve Tenant from the obligation to pay any deficiency in
such statement or the Landlord from the obligation to pay (by refund or credit)
any excess in such statement in accordance with this Section. Notwithstanding
anything else in this Section to the contrary, if Tenant fails to give such
Contest

                                       10
<PAGE>

Notice within said thirty (30) day period or fails to pay any deficiency in such
statement in accordance with this Section, whether or not contested, Tenant
shall have no further right to contest any item or items in such statement and
Tenant shall be deemed to accept such statement.

     For a period of thirty (30) days after receipt of Tenant's Contest Notice,
Landlord and Tenant shall attempt to resolve such dispute, and if such dispute
shall not be resolved within such thirty (30) day period (the resolution to be
evidenced by a writing signed by Landlord and Tenant), the same shall be
resolved by arbitration as follows: The party desiring arbitration (the "First
Party") shall give notice to that effect to the other party, and shall in such
notice appoint a person as arbitrator on its behalf. Within fifteen (15) days
after its receipt of such notice, the other party by notice to the First Party
shall appoint an arbitrator on its behalf, if the second arbitrator shall not be
so appointed within such fifteen (15) days, the First Party may give a second
notice to the other party demanding that the other party appoint an arbitrator
within ten (10) days of its receipt of such second notice and if the other party
shall not do so within such ten (10) day period, then the arbitrator appointed
by the First Party shall appoint the second arbitrator. The two arbitrators
appointed pursuant to the above shall try to appoint the third arbitrator. If,
within twenty (20) days after the appointment of the second arbitrator, they
shall not have agreed upon the appointment of the third arbitrator, either of
the parties upon notice to the other party may request such appointment by the
Office of the American Arbitration Association (the "AAA") closest to the
Property, or in its absence, refusal, failure or inability to act, may apply to
the presiding judge of the court of the State of Washington with jurisdiction
over the matters covered by this Lease (the "Court") for the appointment of such
third arbitrator and the other party shall not raise any question as to the
Court's power and jurisdiction to entertain the application and make the
appointment. Each arbitrator shall be a qualified person who shall have at least
ten (10) years experience in a calling connected with the matter of the dispute.
The arbitration shall be conducted in accordance with the then prevailing rules
of the AAA, under the auspices of the office of the AAA closest to the Property.
The arbitrators shall render their decision and award in writing upon
concurrence of at least two (2) of their members, within thirty (30) days after
the appointment of the third arbitrator. Such decision and award shall be
binding and conclusive on the parties, shall constitute an "award" of the
arbitrators within the meaning of the AAA rules and applicable law, and
counterpart copies thereof shall be delivered to each of the parties. In
rendering such decision and award, the arbitrators shall not add to, subtract
from, or otherwise modify the provisions of this Lease and shall apply
applicable federal and/or state law. Judgment may be had under the decision and
award of the arbitrators so rendered in any court of competent jurisdiction.
Each party shall pay the fees and expenses of the arbitrator appointed by or for
it. The fees and expenses of the third arbitrator, and all other expenses of the
arbitration (other than the fees and disbursements of attorneys or witnesses for
each party), shall be borne by the parties equally.

                (b) Tenant's Proportionate Share of Taxes with respect to each
Fiscal Year shall be paid in monthly installments in advance on the first day of
each calendar month during such Fiscal Year in the Term in amounts sufficient to
satisfy payment of Tenant's Proportionate Share of Taxes for such Fiscal Year as
reasonably estimated by Landlord from time to time prior to or during any Fiscal
Year and communicated to Tenant by written notice (the "Estimated Tax Payment,"
and the actual, final amount due from Tenant on account of Taxes, the

                                       11
<PAGE>

"Tax Payment")). If Landlord does not deliver such a notice (an "Estimate")
prior to the commencement of any Fiscal Year, Tenant shall continue to pay
Estimated Tax Payment as provided in the most recently received Estimate (or
Updated Estimate, as defined below) until the Estimate for such Fiscal Year is
delivered to Tenant. If from time to time during any Fiscal Year, Landlord
reasonably determines that Taxes for such Fiscal Year have increased or will
increase, Landlord may deliver to Tenant an updated Estimate ("Updated
Estimate") for such Fiscal Year. Monthly payments of Estimated Tax Payment paid
subsequent to Tenant's receipt of the Estimate or Updated Estimate for any
Fiscal Year shall be in the amounts provided in such Estimate or Updated
Estimate, as the case may be. In addition, Tenant shall pay to Landlord within
thirty (30) days after receipt of such Estimate or Updated Estimate, the amount,
if any, by which the aggregate of the Estimated Tax Payment provided in such
Estimate or Updated Estimate, as the case may be, with respect to prior months
in such Fiscal Year exceeds the aggregate of the Estimated Tax Payment paid by
Tenant with respect to such prior months.

                (d) Within sixty (60) days after a final real estate tax bill
with respect to the Property is received by Landlord or any other determination
of Taxes with respect to a Fiscal Year occurs (whether due to the receipt of a
bill, the filing of a return, the settlement or adjudication of disputed Taxes,
or otherwise), or as soon thereafter as practicable, Landlord shall send to
Tenant a statement (the "Tax Adjustment Statement") showing (i) the calculation
(or recalculation) of the Tax Payment for such Fiscal Year, (ii) the aggregate
amount of the Estimated Tax Payment previously paid by Tenant for such Fiscal
Year, and (iii) the amount, if any, by which the aggregate amount of the
installments of Estimated Tax Payment paid by Tenant with respect to such Fiscal
Year exceeds or is less than the Tax Payment for such Fiscal Year. Tenant shall
pay the amount of any deficiency to Landlord within thirty (30) days after the
sending of such statement. At Landlord's option, any excess shall either be
credited against payments past or next due hereunder or refunded by Landlord,
provided Tenant is not then in default hereunder.

            2.10 Tenant shall (i) pay (at the rates therefor charged by the
utility providers to Landlord) 100% of all charges for electric current
(including, without limitation, for lighting the Quinton Demised Premises and
supplying HVAC to the Quinton Demised Premises), water, gas (if any), telephone,
and other utilities consumed relative to the Quinton Demised Premises, and (ii)
be responsible (at Tenant's expense) of providing, installing, repairing,
maintaining and operating all conduits, risers, cables, pipes and other
electrical, mechanical and other facilities and installations which are required
in connection with the delivery or supply or such utilities to the Quinton
Demised Premises and the consumption of such utilities at the Quinton Demised
Premises.

            2.11 Landlord shall provide the following services for the Property:
(i) city water from regular building outlets for drinking, lavatory and toilet
purposes, (ii) janitorial and maintenance service for Common Areas (it being
understood that Tenant at its expense shall provide janitorial service to the
Quinton Demised Premises using contractors reasonably acceptable to Landlord
which shall provide insurance coverage reasonably acceptable to Landlord), and
(iii) periodic inspections of the drain valves, hydrants and fire pumps on the
Property. The janitorial service described in clause (ii) shall be performed
substantially in accordance with the specifications

                                       12
<PAGE>

set forth on Exhibit E annexed hereto (as such specifications may be modified
from time to time by Landlord using its reasonable discretion, provided that no
material decrease in the standard of service shall occur). The cost of the other
services described in this Section 2.11 shall constitute Operating Expenses.

            2.12 If Tenant shall fail to pay, within ten (10) days of the date
when the same is due and payable, any rent or other charge pursuant to this
Lease (including, without limitation, basic annual rent, or additional rent),
Tenant shall upon demand pay Landlord a late charge of five (5%) percent of the
amount past due, or, if such late charge shall exceed the maximum late charge
permitted by law, the Tenant shall pay the maximum late charge permitted by law.

            2.13 If requested by Landlord, Tenant promptly, and at Tenant's
expense, shall install such electrical meters and other installations and
equipment as shall be required so that the electrical current consumed in the
Quinton Demised Premises may be separately metered and separately paid by
Tenant. In the event Landlord separately meters the Common Areas, the cost of
such current separately metered and consumed in connection with the Common Areas
shall be included in the Operating Expenses. In the event the Quinton Demised
Premises is separately metered, Tenant shall not be obligated to pay any portion
of the utilities consumed in any portion of the Buildings which is leased or
available for lease (other than the Quinton Demised Premises and the Common
Areas), but Tenant will in such event pay its proportionate share of utilities
consumed in connection with the Common Areas.

            2.14 Intentionally Omitted.

        3. USE OF PREMISES; COMPLIANCE WITH LAWS

            3.1 Subject to Section 3.2, Quinton's Demised Premises may be used
only for office, manufacturing, assembly and warehouse purposes, subject to and
in accordance with all Legal Requirements (hereafter defined) and for no other
purpose. Landlord shall not be deemed to have made any representation, warranty
or agreement that any such use by Tenant or all or any of the Property shall be
or remain lawful or otherwise permitted under any Legal Requirements.

            3.2 Tenant shall not use or occupy or permit anything to be done in
or on the Quinton Demised Premises or the Property, in whole or in part, in a
manner which would in any way violate any certificate of occupancy affecting the
Quinton Demised Premises or the Property, make void or voidable any insurance
then in force with respect thereto, or which may make it more costly or
impossible to obtain fire or other insurance thereon, cause or be apt to cause
structural or other material injury to the Buildings or any part thereof,
constitute a public or private nuisance, or which may violate any present or
future, ordinary or extraordinary, foreseen or unforeseen Legal Requirements or
Insurance Requirements, as hereinafter defined; provided, however, that
notwithstanding any contrary provision of this Lease but subject to Legal
Requirements, Tenant may conduct throughout the Term in the Quinton Demised
Premises substantially the business it conducted on the date hereof, in
substantially in the manner it conducted its business on the date

                                       13
<PAGE>

hereof. In addition, Tenant shall not allow any animals to be kept on the
Premises or use or allow the Quinton Demised Premises to be used for residential
or dwelling purposes.

            3.3 Tenant shall, at its expense, promptly comply or cause
compliance with, and not jeopardize or make more costly Landlord's compliance
with (but it being agreed that except as may otherwise be expressly set forth to
the contrary in this Lease, compliance with the following shall be the
obligation of Tenant at Tenant's expense):

                3.3.1 the requirements of every statute, law, ordinance,
regulation, rule, requirement, order or directive, including but not limited to
the Americans with Disabilities Act of 1990, now or hereafter made by any
federal, state, city or county government or any department, political
subdivision, bureau, agency, office or officer thereof, or of any other
governmental authority having jurisdiction with respect to and applicable to (i)
the Quinton Demised Premises, (ii) the condition, equipment, maintenance, use or
occupation of the Quinton Demised Premises, including, without limitation, such
of the foregoing applicable to the making of any alteration or addition in or to
any structure appurtenant thereto and to pollution and environmental control;
and (iii) subtenants of Tenant (all of the foregoing being herein referred to as
"Legal Requirements"); and

                3.3.2 the rules, regulations, orders and other requirements of
the National and any local Board of Fire Underwriters, or other body having the
same or similar functions and having jurisdiction of, and which are applicable
to, the Quinton Demised Premises and of any liability, fire or other insurance
policy which Tenant or Landlord is required hereunder to maintain (herein
referred to as "Insurance Requirements"); whether or not such compliance
involves changes in the use of the Quinton Demised Premises or any part thereof,
or be required on account of any particular use to which the Quinton Demised
Premises, or any part thereof may be put, and whether or not any such Legal
Requirements or Insurance Requirements be of a kind not now within the
contemplation of the parties hereto.

            4. REPRESENTATIONS BY TENANT AND LANDLORD

                4.1 Tenant covenants and agrees that it will accept the Quinton
Demised Premises and the Original Surrender Space (for such period as Tenant is
entitled hereunder to use and occupy same) in its existing "as is" state or
condition as of the date of delivery of possession and without any
representation or warranty, express or implied, in fact or by law, by Landlord
or its agents and without recourse to Landlord or its agents, as to the nature,
condition, or useability thereof, the title thereto, or the use or occupancy
which may be made thereof, except as may be otherwise specifically provided in
this Lease.

                4.2 Landlord represents and warrants to Tenant that as of the
date of this Lease Landlord has insurable title to the Property and there is no
outstanding tenancy, lease or right to possession of the Property other than any
in favor of Tenant and SWD. Nothing in this Lease shall limit or restrict the
right of the Landlord, from time to time, and in the Landlord's sole discretion,
to execute, enter into, amend, modify, terminate and/or cancel any leases or
occupancy agreements

                                       14
<PAGE>

respecting the Property (or any parts thereof), other than this Lease, nor shall
any such acts or actions by Landlord give rise to any right or remedy in favor
of Tenant, except as otherwise expressly provided in Section 37 hereof.

        5. INSURANCE

            5.1 During the Term, Tenant, at Tenant's sole cost and expense,
shall carry and maintain:

                5.1.1 Commercial general public liability insurance, including
property damage liability coverage, protecting and indemnifying Tenant, Landlord
(and naming Landlord, its managing agent and the holder of any mortgage
encumbering the Property as additional insured thereon) and any designee of
Landlord against any and all claims for damages to person or property, or for
loss of life or of property occurring in or about the Original Surrender Space
(for so long as Tenant occupies same) and the Quinton Demised Premises or
arising out of the ownership, maintenance, use or occupancy thereof or from any
of the matters indicated in Section 12.0 or elsewhere in this Lease against
which Tenant is required to indemnify Landlord. The coverage limits of the
policy shall be at least 5,000,000 Combined Single Limit.

                5.1.2 All policies of insurance carried by Tenant pursuant to
this Lease shall name as insureds Landlord, and if required, any fee mortgagee
or other designee of Landlord, as their respective interests may appear
provided, however, that rent insurance shall be carried solely in favor of
Landlord. To the extent Landlord receives and applies proceeds of rent insurance
Tenant shall receive a credit against fixed rental payable hereunder. Subject to
the rights of any fee mortgagee, all losses made under the policy or policies
shall be adjusted by Landlord and the proceeds thereof shall be payable to the
Landlord. The originals or duplicate originals of such policies or certificates
shall be delivered to Landlord except when such originals or duplicate originals
are required to be held by any fee mortgagee, in which case certificates of
insurance shall be delivered to Landlord. Policies or certificates with respect
to renewal policies shall be delivered to Landlord by Tenant (i) initially not
later than the Commencement Date and (ii) thereafter not less than 30 days prior
to the expiration of the original policies, or succeeding renewals, as the case
may be, in each case together with receipts or other evidence that the premiums
thereon have been paid for at least six months. In the event the Tenant is not
able to deliver the insurance policies or certificates prior to the renewal date
as aforesaid, the Tenant may deliver binders in lieu of such policies or
certificates to the Landlord provided, however, that the insurance policies or
certificates shall be delivered within sixty (60) days after the expiration of
the original policies or succeeding renewals but in no event later than fifteen
(15) days prior to the expiration date of the binder. Premiums on policies shall
not be financed in any manner whereby the lender, on default or otherwise, shall
have the right or privilege of surrendering or canceling the policies, provided,
however, that Tenant may pay premiums in quarter or semi-annual installments so
long as such method of payment does not constitute a default under any fee
Mortgage. Each policy of insurance required under this program shall have
attached thereto an endorsement that such policy shall not be canceled or
modified without at least thirty (30) days prior written notice to the Landlord,
and, if required, to any fee mortgagee. Each such policy

                                       15
<PAGE>

shall contain a provision that no act or omission of Tenant shall affect or
limit the obligation of the insurance company to pay the amount of any loss
sustained and a provision waiving any right of the insured against the Landlord.
All insurance required to be carried by Tenant under this Lease shall be
effected under valid and enforceable policies issued by insurers which are
licensed to do business in the State of Washington and have been approved in
writing by Landlord (which approval Landlord agrees not to unreasonably
withhold).

                5.1.3. Fire and extended coverage insurance and earthquake
insurance covering Tenant's personal property, improvements and alterations,
against loss or damage by fire and other risks now or hereafter embraced by "all
risk" coverage, and by earthquake, with vandalism and malicious mischief
endorsements, to the extent of at least 90% of then full replacement values. The
proceeds from any such policy shall be used by Tenant for the replacement of
personal property or the restoration of Tenant's improvements or alterations.

                5.1.4. Worker's compensation insurance as required by Legal
Requirements.

                5.1.5 Intentionally Omitted.

            5.2 Intentionally Omitted.

            5.3 Landlord and Tenant hereby release each other and each other's
officers, directors, shareholders, principals, employees and agents, from
liability or responsibility for any loss or damage to property covered by valid
and collectible fire insurance with standard extended coverage endorsement,
whether such insurance is carried by Tenant, SWD or any other tenant or occupant
of the Property, or any part thereof. This release shall apply not only to
liability and responsibility of the parties to each other, but shall also extend
to liability and responsibility for anyone claiming through or under the parties
by way of subrogation or otherwise. This release shall apply even if the fire or
other casualty shall have been caused by the fault or negligence of a party or
anyone for whom a party may be responsible. However, this release shall apply
only with respect to loss or damage actually recovered from an insurance
company. This release shall not apply to loss or damage of property of a party
unless the loss or damage or personal injury occurs during the times the fire or
extended coverage insurance policies of a party contain a clause or endorsement
to the effect that any release shall not adversely affect or impair the policies
or prejudice the right of the party to recover thereunder. Landlord and Tenant
each agree that any tie and extended coverage insurance policies covering the
Property or contents shall include this clause or endorsement as long as the
same shall be obtainable without extra cost, or if extra cost shall be charged
therefor, so long as the other party pays the extra cost. If extra cost shall be
chargeable, the party whose policy is subject to the extra cost shall advise the
other thereof, and of the amount of the extra cost. Tenant shall also obtain the
agreement of its worker's compensation insurance carrier to waive all right of
subrogation against Landlord.

            5.4 Intentionally Omitted

                                       16
<PAGE>

            5.5 No policy furnished by Tenant pursuant to Section 5.1 shall have
a deductible or self-insured retainage amount in excess of $10,000, except that
public liability insurance may have a deductible of up to $50,000.00, fire and
extended coverage may have a deductible of up to $50,000.00, and earthquake
coverage may a deductible of up to $100,000.00.

        6. DAMAGE OR DESTRUCTION

            6.1 In every case of fire, explosion, damage by the elements or
other casualty, Tenant shall immediately give notice to Landlord.

            6.2 If at any time during the Term, the Quinton Demised Premises
shall be damaged in whole or in material part, or wholly or partially destroyed,
by fire or other casualty (including any casualty for which insurance coverage
was not obtained) of any kind or nature, regardless of whether said damage or
destruction resulted from an act of God, the fault of the Tenant, the Landlord
or from any cause whatsoever, then, in that event neither party shall be
required to replace, repair or rebuild the damaged or destroyed improvements
(except that Tenant shall be required to turn over to Landlord the insurance
proceeds payable in connection with such damage or destruction); provided,
however, that if the damage or destruction results from the fault of Tenant and
is not fully covered by insurance or the insurance proceeds received by the
Landlord are insufficient therefor, the Tenant shall be required to replace,
repair or rebuild the damaged or destroyed improvements to substantially their
condition prior to the casualty event.

            6.3 The Landlord shall have the option, to be exercised by written
notice to Tenant within thirty (30) days of the casualty event, to (i) replace,
repair and rebuild any and all damaged or destroyed improvements, or (ii) to
terminate this Lease as of a specified date, in which latter event all rent
shall be apportioned as of the date of such damage or destruction, and this
Lease shall terminate as of the specified date (but all insurance proceeds shall
be paid to Landlord as aforesaid, and Tenant shall remain obligated under
Section 6.2 in the event the insurance proceeds are insufficient to fully
replace, repair or rebuild). In the event Landlord proceeds to replace, repair
and rebuild, this Lease shall not terminate, Landlord shall cause the Quinton
Demised Premises and the Common Areas to be repaired or restored to the extent
insurance proceeds are available to the Landlord (to the extent such proceeds
are allocable to the Quinton Demised Premises and the Common Areas) as speedily
as its good faith efforts will allow, and there shall be a proportional
abatement of the basic and additional rent reserved under this Lease during such
period as the Quinton Demised Premises remain untenantable, based on the extent
to which the Quinton Demised Premises are untenantable, but, in any event, only
to the extent that Landlord actually receives proceeds from the rent insurance
carried by Landlord which is allocable to the Quinton Demised Premises. Tenant
shall also have the option to terminate this Lease effective as of the date of
the damage or destruction in the event (1) a portion of the Quinton Demised
Premises which is material to Tenant's operations have been damaged or destroyed
and are untenantable, and Landlord shall not provide to Tenant within 120 days
after the date of damage or destruction substitute space of reasonably
equivalent size and functionality (either on a temporary or permanent basis),
and (2) (x) the damaged or destroyed portion of the Quinton Demised Premises
cannot reasonably be repaired

                                       17
<PAGE>

within 120 days of such date as set forth in an opinion to that effect of an
architect or engineer retained by Tenant (at its expense) and reasonably
acceptable to Landlord, (y) Landlord shall not give written notice of Landlords
election under clause (i) above within the specified thirty (30) day period, or
(z) Landlord, after having elected to repair, shall not restore the Quinton
Demised Premises substantially to its condition prior to the event causing the
damage or destruction. Tenant's options to terminate shall be exercised by
written notice to Landlord within 45 days of the casualty event, with respect to
clauses (x) and (y) and within 135 days after the date of such damage or
destruction with respect to clause (z).

            6.4 Tenant agrees that the foregoing provisions are in lieu of any
other rights or remedies that Tenant may have against Landlord pursuant to the
laws of the State of Washington in the event of any damage or destruction to all
or any part of the Quinton Demised Premises or any other portion of the
Property.

        7. CONDEMNATION

            7.1 If the whole of the Quinton Demised Premises shall be taken
under the power of eminent domain by any public or private authority or in the
event of sale to such authority in lieu of formal proceedings of eminent domain,
then this Lease shall cease and terminate as of the date of such taking or sale,
which date is defined, for all purposes of this Section 7, as the date the
public or private authority has the right to possession of the property being
taken or sold.

            7.2 In the event of any taking or sale of all or any part of the
Quinton Demised Premises, the entire proceeds of the award or sale shall be paid
to Landlord, and Tenant shall have no right to any part thereof; provided,
however, that nothing contained herein shall be construed to prevent Tenant from
recovering any allowance for its personal property or for moving expenses which
the law permits to be made to tenants, so long as such allowance does not
diminish the award paid to Landlord.

            7.3 If any public or private authority shall, under the power of
eminent domain, make a taking, or should a sale in lieu thereof occur of less
than the whole of the Quinton Demised Premises, then Landlord may, at its
election, terminate this Lease by giving Tenant written notice of the exercise
of its election within twenty (20) days after the nature and extent of the
taking or sale have been finally determined. In the event of termination by
Landlord under the provisions of this Section 7.3, this Lease shall cease and
terminate as of the date of such taking or sale. If Landlord does not so
terminate this Lease, subject to Section 7.5, this Lease shall continue in full
force and effect.

            7.4 In the event of a partial taking or sale not resulting in a
termination of this Lease pursuant to Section 7.3, Landlord shall, if Landlord's
fee mortgagee consents thereto, effectuate all such repairs and restoration as
are necessary to restore the Quinton Demised Premises for the operation of
Tenant's business, to the extent net proceeds of the award or sale are
available, but nothing contained herein shall be construed so as to require
Landlord to pay any cost of repair

                                       18
<PAGE>

in excess of the net proceeds of the award or sale price received from the
condemning authority and allocable to the Quinton Demised Premises. In such
case, as of the date of the taking, the basic and additional rent reserved
hereunder shall be reduced, but only until such time as Landlord completes its
repair or restoration in accordance herewith, by an amount that is in the same
ratio to the rental then in effect as the value of the portion of the Quinton
Demised Premises taken or sold bears to the total value of the Quinton Demised
Premises immediately before the date of taking or sale. If the net proceeds of
the award or sale are not sufficient to repair or restore the Quinton Demised
Premises, Tenant may, at its own expense, complete such repairs or restoration,
in accordance with the terms of this Lease.

            7.5 Tenant shall have the option, to be exercised by written notice
to Landlord within fifteen (15) days after such taking or sale, to terminate
this Lease in the event (i) more than 10% of the square footage of the Quinton
Demised Premises is taken in condemnation; or (ii) the Lease continues
notwithstanding a partial condemnation of more than 10% of the square footage of
the Quinton Demised Premises and within 120 days after the condemnation,
Landlord does not restore the Quinton Demised Premises substantially to their
condition prior to the condemnation.

            7.6 The taking of the Quinton Demised Premises or any part thereof
by military or other public authority shall constitute a taking of the Quinton
Demised Premises under the power of eminent domain only when the use and
occupancy by the taking authority has continued for longer than 90 consecutive
days. During the 90-day period all the provisions of this Lease shall remain in
full force and effect, except that rental reserved (but not the additional rent)
shall be abated during such period of taking based on the extent to which the
taking interferes with Tenant's use of the Quinton Demised Premises. Landlord
shall be entitled to whatever award may be paid for the use and occupation of
the Quinton Demised Premises for the period involved.

        8. SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATE

            8.1 This Lease is and shall be subject and subordinate in all
respects to all bona fide mortgages which may now or hereafter affect the
Property, to each and every advance made or hereafter to be made under such
mortgages, and to all renewals, modifications, consolidations, replacements, and
extensions of such mortgages irrespective of the date of the execution and/or
recording thereof (provided, however, that Landlord shall use its best efforts
to obtain from such mortgagee a non-disturbance agreement as described in the
last sentence of this Section 8.1). This Section 8.1 shall be self-operative and
no further instrument of subordination shall be required. In confirmation of
such subordination, Tenant agrees, without payment to Tenant of any
consideration therefor, to promptly (but in any event, within ten (10) days of
request) execute and deliver any instrument that Landlord or the holder of any
such mortgage or any of their respective successors in interest may request to
evidence such subordination, and Tenant hereby irrevocably appoints Landlord its
attorney in fact to execute such instrument on behalf of Tenant, should Tenant
refuse or fail to do so promptly after request. The mortgages to which this
Lease is, at the time referred to, subject and subordinate shall sometimes be
collectively called "superior mortgages." Landlord shall,

                                       19
<PAGE>

upon the request of Tenant, use its good faith efforts to obtain a
non-disturbance agreement to the effect that in the event of the foreclosure of
the superior mortgage Tenant's possession of the Quinton Demised Premises shall
not be disturbed provided that Tenant shall not be in default under this Lease,
in a form satisfactory to Tenant in its reasonable opinion, from the holder of
any superior mortgage; provided, however, (1) Landlord (i) shall not be required
to incur any costs or liabilities in connection therewith, and (ii) shall not
have any liability to Tenant if Landlord shall fail to procure such agreement;
and (2) this Lease and the obligations of Tenant shall not be affected should
Landlord fail to procure such agreement despite such good faith efforts.

            8.2 In the event of any act or omission of Landlord which would give
Tenant the right, immediately or after lapse of a period of time, to cancel or
terminate this Lease, or to claim a partial or total eviction, Tenant shall not
exercise such right: (i) until it has given written notice of such act or
omission to the holder of each superior mortgage whose name and address shall
previously have been furnished to Tenant in writing, and (ii) unless such act or
omission shall be one which is not capable of being remedied by Landlord or such
mortgage holder within thirty (30) days, until a thirty (30) day period for
remedying such act or omission shall have elapsed following the giving of such
notice, provided such holder shall with due diligence give Tenant written notice
of intention to, and commence and continue to, remedy such act or omission.

            8.3 If the holder of a superior mortgage shall succeed to the rights
of Landlord, then at the request of such party so succeeding to Landlord's
rights (herein sometimes called successor-landlord) and upon such
successor-landlord's written agreement to accept Tenant's attornment, Tenant
shall attorn to and recognize such successor-landlord as Tenant's landlord under
this Lease and shall promptly, without payment to Tenant of any consideration
therefor, execute and deliver any instrument that such successor-landlord may
request to evidence such attornment. Tenant hereby irrevocably appoints Landlord
or the successor-landlord the attorney-in-fact of Tenant to execute and deliver
such instrument on behalf of Tenant, should Tenant refuse or fail to do so
promptly after request. Upon such attornment, this Lease shall continue in full
force and effect as, or as if it were, a direct lease between the
successor-landlord and Tenant upon all of the terms, conditions, and covenants
as are set forth in this Lease and shall be applicable after such attornment,
except that the successor-landlord shall not: (i) be obligated to repair,
restore, replace, or rebuild the Property, in case of total or substantially
total damage or destruction, beyond such repair, restoration or rebuilding as
can reasonably be accomplished with the net proceeds of insurance actually
received by, or made available to, the successor-landlord; (ii) be liable for
any previous act or omission of Landlord; (iii) be subject to any prior defenses
or offsets; (iv) be bound by any modification of this Lease not expressly
provided for in this Lease or by any previous prepayment of more than one
month's rent, unless such modification or prepayment shall have been expressly
approved in writing by the holder of the superior mortgage through or by reason
of which the successor-landlord shall have succeeded to the rights of Landlord;
or (v) be liable for the performance of Landlord's covenants and agreements
contained in this Lease to any extent other than to the successor-landlord's
ownership in the Property, and no other property of such successor-landlord
shall be subject to levy, attachment, execution or other enforcement procedure
for the satisfaction of Tenant's remedies.

                                       20
<PAGE>

            8.4 In the event that a bona fide institutional lender shall request
reasonable modifications to this Lease, then Tenant shall not unreasonably
withhold, condition or delay its written consent to such modifications provided
that the same do not, in Tenant's reasonable judgment (and Tenant shall not
demand the payment to Tenant of any consideration for consent thereto), increase
the obligations of Tenant hereunder or materially adversely affect the leasehold
interest hereby created or Tenant's use and enjoyment of the Quinton Demised
Premises.

            8.5 Tenant agrees, at any time, and from time to time (and without
payment to Tenant of any consideration therefor), upon not less than ten (10)
days' prior notice by Landlord, to execute, acknowledge and deliver to Landlord,
a statement in writing addressed to Landlord (and/or Landlord's designee)
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), stating the dates to which the rent has
been paid, stating such other information concerning this Lease and Tenant's
tenancy as Landlord reasonably shall request, and stating whether or not there
exists any default in the performance by Landlord of any term, covenant or
condition contained in this Lease and, if so, specifying each such default, it
being intended that any such statement delivered pursuant to this Section 8.5
may be relied upon by Landlord and by any mortgagee or prospective mortgagee of
any mortgage affecting the Property or any purchaser or prospective purchaser of
the Property. When so requested by Landlord, such statement shall be submitted
in writing under oath by a person or persons having knowledge of the statements
made therein.

        9. REPAIRS, MAINTENANCE, ALTERATIONS, ETC.

                9.1.1 Except as otherwise expressly provided in this Lease,
Tenant at its cost shall maintain, in good condition, and shall repair if
damaged, and shall replace or improve as needed, all portions of the Quinton
Demised Premises and the Original Surrender Premises (while Tenant is occupying
same as permitted hereunder) and the Landlord shall not be required to furnish
any services or facilities or to maintain or make any repairs, replacements,
improvements or alterations in or to the Quinton Demised Premises or the
Original Surrender Space, except as otherwise specifically provided in this
Lease.

                9.1.2 Landlord shall (subject to reimbursement by Tenant of
Operating Expenses) be responsible for maintenance, repairs or replacement of
the roof, HVAC systems (except any HVAC equipment installed by or for Tenant),
and elevator systems, unless the same is occasioned by the acts or omissions of
Tenant, its agents, employees, guests, licensee, invitees, guests, subtenants
(if any), subtenants, assignees, successors or independent contractors, in which
event Tenant shall be responsible for such repairs, maintenance or replacement.

            9.2 Landlord shall not be liable for any failure of water supply,
gas or electric current or of any utility or for any injury or damage to person
or property caused by or resulting from gasoline, oil, steam, gas, electricity,
or hurricane, tornado, flood, wind or similar storms or disturbances, or water,
rain or snow which may leak or flow from the street, sewers, gas mains or any

                                       21
<PAGE>

sub-surface area or from any part of the Property, or leakage of gasoline or oil
from pipes, appliances, sewer or plumbing works therein, or from any other
place, or for interference with light or other incorporeal hereditaments by
anyone, or caused by operations by or of any public or quasi-public work.

            9.3 Tenant shall have the right to make, at its sole cost and
expense, additions, alterations and changes (collectively, "Alterations") in or
to the Quinton Demised Premises, provided Tenant shall not then be in default in
the performance of any of the covenants in this Lease, subject, however, in all
cases to the following conditions:

                9.3.1 No Alterations shall be commenced except after fifteen
(15) days' prior written notice to Landlord, which shall include reasonably
detailed final plans and specifications and working drawings of the proposed
Alterations and the name of the contractor.

                9.3.2 No Alterations costing in excess of $50,000 (and no
Alterations which, when aggregated with all other Alterations, proposed or
performed during the Term shall exceed $100,000) and no structural or Building
system or exterior Alterations, or Alterations affecting any Common Area,
regardless of cost, shall be made without the prior written consent of Landlord,
which shall not be unreasonably withheld as to interior, non-structural,
non-Building system Alterations.

                9.3.3 No Alterations shall be undertaken until Tenant shall have
procured and paid for, so far as the same may be required from time to time, all
permits and authorizations of all governmental authorities having jurisdiction,
and shall have provided to Landlord evidence substantiating to Landlord's
reasonable satisfaction that such permits and authorizations have issued.

                9.3.4 All Alterations shall be made promptly (unavoidable delays
excepted), in a good and workmanlike manner and in compliance with all
applicable permits, authorizations and all Legal Requirements and all Insurance
Requirements.

                9.3.5 Anything in this Lease to the contrary notwithstanding, no
Alterations shall be made by Tenant if they reduce the value or serviceability
of the Property, increase the risk of casualty or the cost of insurance or
increase the risk of environmental pollution.

                9.3.6 Before commencing the Alterations and at all times during
construction, Tenant's contractor shall maintain builder's risk insurance
coverage satisfactory to Landlord.

                9.3.7 If the estimated cost of the Alterations exceeds $250,000,
before the commencement of the Alterations Tenant at its cost shall furnish to
Landlord a performance and completion bond issued by an insurance company
qualified to do business in Washington and reasonably acceptable to Landlord, in
a sum equal to the cost of the Alterations (as

                                       22
<PAGE>

determined by the construction contract between Tenant and its contractor)
guaranteeing the completion of the Alterations free and clear of all liens and
other charges, and in accordance with the plans and specifications.

            9.4 All Alterations, whether temporary or permanent in character,
which may be made upon the Quinton Demised Premises or the Original Surrender
Space either by Landlord or Tenant, except furniture, trade fixtures or
equipment (other than HVAC equipment) installed at the expense of Tenant, shall
be the property of Landlord and shall remain upon and be surrendered with the
Quinton Demised Premises or the Original Surrender Space as a part thereof at
the expiration or any termination of this Lease or at the time of surrender of
the Original Surrender Space, without compensation to Tenant; provided, however,
Landlord may elect within thirty (30) days before the expiration of the Term, or
within five (5) days after termination of the Term, to require Tenant, at
Tenant's cost, to remove any Alterations that Tenant has made to the Quinton
Demised Premises or otherwise to the Original Surrender Space at any time before
or during the Term; provided, however, that in respect of Alterations made by
Tenant in the production building which are in the nature of standard
administrative office finishing, fixturing and/or improvements, Tenant shall not
be required to remove such Alterations at the expiration of the Term. If
Landlord so elects, Tenant at its cost shall restore the Quinton Demised
Premises and/or the other portions of the Original Surrender Space, as the case
may be, to the condition designated by Landlord in its election, and repair any
damage caused by the removal of Alterations, before the last day of the Term, or
within thirty (30) days after notice of election is given, whichever is later.
This Section shall survive the expiration or termination of this Lease.

            9.5 If Tenant is not then in default of any provisions of this
Lease, Tenant shall have the right to remove from the Quinton Demised Premises
immediately before the expiration of the Term, or within twenty (20) days after
the sooner termination of the Term, any trade equipment and other equipment (not
including any building equipment) and furniture, which has been affixed to the
Quinton Demised Premises by Tenant, as long as Tenant at its cost promptly
restores any damage caused by the removal, provided Tenant shall be responsible
and pay for the cost of repairing any damage caused by such removal.

        10. INTENTIONALLY OMITTED

        11. ASSIGNMENTS, SUBLETTING AND MORTGAGING

            11.1 Neither Tenant, nor Tenant's successors or assigns, shall
(unless expressly permitted to do so) assign, mortgage, pledge or encumber this
Lease, in whole or in part, or sublet the Quinton Demised Premises or the
Original Surrender Space, in whole or in part, or permit the same or any portion
thereof to be used or occupied by others, or enter into a management contract or
other arrangement whereby the Quinton Demised Premises or the Original Surrender
Space shall be managed and operated by anyone other than the then owner of
Tenant's leasehold estate, nor shall this Lease be assigned or transferred by
operation of law, without the prior consent in writing of Landlord in each
instance. If this Lease be so assigned or transferred, or if all or any part of
the

                                       23
<PAGE>

Quinton Demised Premises be sublet or occupied by anybody other than Tenant,
Landlord may, after such default by Tenant, collect rent from the assignee,
transferee, subtenant or occupant, and apply the net amount collected to the
rent reserved herein, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver of any agreement, term, covenant or
condition of this Lease, or the acceptance of the assignee, transferee,
subtenant or occupant as tenant, or a release of Tenant from the performance or
further performance by Tenant of the terms, covenants and conditions of this
Lease, and Tenant shall continue to be liable under this Lease. The consent by
Landlord to an assignment, mortgage, pledge, encumbrance, transfer, management
contract or subletting shall not be construed to relieve Tenant from obtaining
the express consent in writing of Landlord to any further assignment, mortgage,
pledge, encumbrance, transfer, management contract or subletting. Landlord shall
have the right to unreasonably withhold its consent to an assignment or
subletting (except as provided in Section 11.5), mortgage, pledge or other
encumbrance. Notwithstanding anything to the contrary herein contained, an
assignment of this Lease shall include, without limitation, the following: (a)
if Tenant shall be a corporation and fifty percent (50%) or more of its voting
stock or all or substantially all its assets shall be sold, mortgaged, assigned,
pledged, encumbered or otherwise transferred (other than as collateral security
for a bona fide loan to a bona fide lender) (and whether in one (1) single
transaction or in more than one (1) successive transaction); or (b) if Tenant
shall be a partnership, limited liability company, joint venture, syndicate or
other group and all or any portion of the interest of any partner, member or
other equity holder shall be sold or otherwise transferred (however this
provision shall not, as to a corporation or other entity whose stock or other
equity interests are publicly traded on a recognized stock exchange, be
applicable to sales of stock or other equity interests on such stock exchange).

            11.2 If Tenant shall desire to assign this Lease or sublet all or a
portion of the Premises, Tenant shall submit to Landlord a written request for
Landlord's consent to such assignment or subletting, which request shall contain
or be accompanied by the following information: (a) the name and address of the
proposed assignee or subtenant, (b) in the case of a proposed subletting, a
description identifying the space to be sublet and the term of such subletting,
(c) the nature and character of the business of the proposed assignee or
subtenant; (d) in the case of a proposed assignment, a current financial
statement of the proposed assignee, and (e) the proposed form of the instrument
of assignment or sublease. Tenant is hereby permitted to sublease to Stairmaster
a portion of space in the Quinton Demised Premises from the Commencement Date to
no later than November 30, 1998.

            11.3 Tenant, within twenty (20) days of its receipt of Landlord's
request therefor, shall reimburse Landlord for all reasonable out-of-pocket
costs incurred by Landlord in considering whether or not to consent, including
reasonable attorney's fees and disbursements and the reasonable costs of making
investigations regarding the proposed subtenant or assignee (not to exceed
$5,000.00 in each instance). After Landlord shall have granted its consent, but
before the subtenant or assignee shall take possession, Tenant shall deliver to
Landlord a fully-executed counterpart of the sublease or instrument of
assignment.

                                       24
<PAGE>

            11.4 If Tenant shall sublease any portion of the Premises or assign
this Lease, Tenant shall pay to Landlord fifty percent (50%) of any
consideration received by Tenant (net of reasonable costs incurred by Tenant to
effect any such assignment or sublet, such as advertising, brokerage, legal and
construction expenses) from the subtenant or assignee, as the case may be, to
the extent such consideration exceeds the basic annual rental and additional
rent payable hereunder.

            11.5 (a) Notwithstanding the provisions of Section 11.1 to the
contrary:

                (1) Tenant, without the prior consent of Landlord but subject to
the terms and provisions of this Lease (including, without limitation, the
permitted use of Quinton's Demised Premises under this Lease), may assign this
Lease to an Affiliate of Tenant, as hereafter defined, provided such assignee
remains an Affiliate of Tenant for the remainder of the term of this Lease, as
same may be renewed or extended. As used above, the term "Affiliate" shall mean
any corporation which controls, is controlled by, or is under common control
with Tenant (with "control" meaning ownership of more than fifty percent (50%)
of the stock or assets thereof.

                (2) Tenant, without the prior consent of Landlord but subject to
the terms and provisions of this Lease (including, without limitation, the
permitted use of Quinton's Demised Premises under this Lease), may assign this
Lease to a reputable third party (i) whose net worth as of the effective date of
the assignment shall be equal to or greater than the net worth of Tenant at such
time, as demonstrated by Tenant to the reasonable satisfaction of Landlord prior
to the effective date of such assignment, determined in accordance with
generally accepted accounting principles consistently applied and based upon
financial statements of Tenant and such assignee audited by an independent
public accounting firm at the expense of Tenant, and (ii) which does not, as of
the effective date of such assignment and during the remaining term of this
Lease (as same may be renewed or extended as provided in this Lease) compete
with Sherwood or any of its affiliates or successors or assigns in respect of
any service or item which is sold, marketed, distributed, designed (or under
design), or developed (or under development) by or for Sherwood or any of its
affiliates or successors or assigns as of the effective date of such assignment,
and which otherwise does not directly or indirectly compete with Sherwood or any
of its affiliates or successors or assigns in respect of any business in which
Sherwood or any of its affiliates or successors or assigns is otherwise engaged
as of the effective date of such assignment, as demonstrated by Tenant to the
reasonable satisfaction of Landlord prior to the effective date of such
assignment.

                (3) Any assignment pursuant to the provisions of this Section
11.5(a) automatically shall be subject to all of the terms and provisions of
this Lease (including, without limitation, the permitted use of Quinton's
Demised Premises under this Lease) and the Cost Sharing Arrangement, and shall
be conditioned upon, inter alia, (i) the delivery by Tenant to Landlord, not
later than twenty (20) days prior to the effective date of the assignment, of
(1) a notice to Landlord of such assignment, setting forth the name and address
of such assignee, and the facts which, pursuant to this Section 11.5(a), allow
Tenant to assign this Lease without the consent of Landlord, and (2) a fully
executed counterpart of such assignment, which shall provide, among other
things, that the assignee fully assumes all liabilities and obligations of
Tenant in respect of the Lease

                                       25
<PAGE>

and the Cost Sharing Arrangement from and after the effective date of such
assignment (without thereby releasing or relieving Tenant of or from any such
liabilities and obligations in any way), and which otherwise must be in form and
substance reasonably acceptable to Landlord, and (ii) the delivery by Tenant to
Landlord, not later than ten (10) days after request therefor by Landlord, and
in any event prior to the effective date of the assignment, of such other
documentation respecting the business and identity of the assignee as the
Landlord reasonably may request.

            (b) Notwithstanding the provisions of Section 11.1 to the contrary,
Landlord shall not unreasonably withhold its consent to a proposed subletting
all or a portion of the Quinton Demised Premises to a third party whose
reputation or character or whose business, in the reasonable opinion of
Landlord, does not make it unsuitable for occupancy on the Quinton Demised
Premises, and which does not, as of the effective date of such subletting and
during the term of such subletting, compete with Sherwood or any of its
successors or assigns in respect of any service or item which is sold, marketed,
distributed, designed (or under design), or developed (or under development) by
or for Sherwood or any of its affiliates or successors or assigns as of the
effective date of such sublease, and which otherwise does not directly or
indirectly compete with Sherwood or any of its affiliates or successors or
assigns in respect of any business in which Sherwood or any of its affiliates or
successors or assigns is otherwise engaged as of the effective date of such
sublease, as demonstrated by Tenant to the reasonable satisfaction of Landlord
prior to the effective date of such sublease.

                (1) Any subletting pursuant to the provisions of this Section
11.5(b) automatically shall be subject to all of the terms and provisions of
this Lease (including, without limitation, the permitted use of the Quinton
Demised Premises under this Lease) and the Cost Sharing Arrangement, and shall
be conditioned upon, inter alia, (i) the delivery by Tenant to Landlord, not
later than twenty (20) days prior to the effective date of the sublease, of a
notice to Landlord requesting consent to such sublease, setting forth the name
and address of the subtenant, and the nature of the business of the subtenant,
and (ii) the delivery by Tenant to Landlord, not later than ten (10) days after
request therefor by Landlord, and in any event prior to the effective date of
the sublease, of such other documentation respecting the business and identity
of the subtenant as the Landlord reasonably may request. No such subletting will
in any way release or relieve Tenant from any obligations or liabilities under
this Lease or the Cost Sharing Arrangement.

            11.6 Any assignment of this Lease shall automatically include an
assignment by Tenant and assumption by the assignee of all rights, agreements
and obligations of Tenant under the Cost Sharing Arrangement, from and after the
effective date of such assignment (without thereby releasing or relieving Tenant
of or from any such liabilities and obligations in any way), whether or not such
assignment and assumption is specified in the instrument assigning the Lease to
such assignee.

            11.7 Notwithstanding any assignment of this Lease or subletting of
all or any part of the Quinton Demised Premises, whether made with or without
Landlord's consent, the Tenant originally named herein, and each successor
Tenant, shall be and remain jointly and severally liable

                                       26
<PAGE>

for all obligations of Tenant hereunder, and for all obligations of Tenant under
the Cost Sharing Arrangement.

        12. INDEMNITY

                12.0 Notwithstanding that joint or concurrent liability may be
imposed upon Landlord by statute, ordinance, rule, regulation, order, or court
decision, Tenant shall, notwithstanding any insurance furnished pursuant hereto
or otherwise, indemnify, protect, defend and hold harmless Landlord from and
against any and all liability, fines, suits, claims, obligations, damages,
losses, penalties, demands, actions and judgments, and costs and reasonable
expenses of any kind or nature (including reasonable attorneys' fees), by anyone
whomsoever, arising after the effective time of the "Closing" (as defined in the
certain Stock Purchase Agreement by and among AH. Robins Company, Incorporated
and American Home Products Corporation, as seller, and QIC Holding Corp., as
buyer, dated May 28, 1998) or relating to or accruing during the period after
the effective time of the Closing, and due to or arising out of:

                12.0.1 any work or thing done in, on or about the Quinton
Demised Premises or the Common Area or the Original Surrender Space or any part
thereof by Tenant or anyone claiming through or under Tenant or the respective
employees, agents, licensees, contractors, servants or subtenants of Tenant or
any such person;

                12.0.2 any use, possession, occupation, operation, maintenance
or management of the Quinton Demised Premises or any part thereof, or the Common
Area or the Original Surrender Space or any part thereof by Tenant, including,
without limitation, any air, land, water or other pollution caused by Tenant;

                12.0.3 any negligence or wrongful act or omission on the part of
Tenant or any person claiming through or under Tenant or the respective
employees, agents, licensees, invitees, guests, subtenants (if any),
contractors, servants or subtenants of Tenant or any such person;

                12.0.4 any accident or injury to any person (including death) or
damage to property (including loss of property) occurring in or on the Quinton
Demised Premises or any part thereof or the Common Area or the Original
Surrender Space or any part thereof and arising from actions or omissions of
Tenant or the employees, agents, licensees, invitees, guests, subtenants (if
any) contractors, servants or subtenants of Tenant;

                12.05 any failure on the part of Tenant to perform or comply
with any of the covenants, agreements, terms, provisions, conditions or
limitations contained in this Lease on its part to be performed or complied
with; and

                12.0.6 any failure on the part of Tenant to perform or comply
with Legal Requirements or Insurance Requirements.

                                       27
<PAGE>

In case any claim, action or proceeding is raised or brought against Landlord
(and/or any of the other indemnified parties above described) by reason of any
of the foregoing, Landlord, promptly after receiving notice of such action or
proceeding, shall provide notice of such action or proceeding to Tenant (but no
delay by Landlord in giving such notice to Tenant shall in any way impair, waive
or affect the obligations of Tenant to indemnify, defend, and hold harmless
Landlord except to the extent of actual prejudice to Tenant arising solely and
directly from such delay). Tenant, at Tenant's expense, thereupon shall assume
and, through competent counsel, diligently conduct the defense of such claim,
action or proceeding, or any litigation resulting therefrom. Upon such
assumption by Tenant, Landlord, at the expense of Tenant, shall cooperate with
Tenant in all reasonable respects in the conduct of such defense. The duty of
Landlord to cooperate shall (to the extent reasonable) include, but not be
limited to, at the expense of Tenant, making available then-present employees of
it and/or its Affiliates to act as witnesses and consult with counsel, and
assist in the location and production of documents. Landlord shall, to the
extent reasonable, and subject to such reasonable confidentiality requirements
as Landlord may impose, and at the cost of Tenant (including without limitation
reproduction costs), make available to Tenant the books and records of Landlord
relevant to the proceedings. The obligations of Tenant shall include but not be
limited to, at the cost of Tenant, taking all steps necessary or appropriate to
the defense or settlement of such claim, action, proceeding or litigation.
Landlord may participate, through counsel of Landlord's choice (and, provided
that and for so long as Tenant has performed and is performing its obligations
pursuant to this Article 12, at Landlord's expense, otherwise at Tenant's
expense), in the defense of any such claim, action, proceeding or litigation,
but Tenant (provided that and for so long as Tenant has performed and is
performing its obligations pursuant to this Article 12) shall direct and control
the defense thereof. Tenant or its counsel shall keep Landlord apprised at all
times of the status of the action or proceeding. The establishment of limits of
coverage for the insurance required by Section 5 shall not serve in any way to
limit Tenant's obligations pursuant to this Section 12. Anything herein to the
contrary notwithstanding, (i) Tenant shall not enter into or consent or agree to
the settlement of any claim, litigation, action, or suit respecting which Tenant
is obligated to indemnify, defend or hold harmless Landlord pursuant hereto,
without the express prior written consent of Landlord, in Landlord's sole
discretion, unless, in each such case (as demonstrated to the reasonable
satisfaction of Landlord) (1) Tenant has and does fully and completely indemnify
and hold Landlord harmless from and against all liability, fines, suits, claims,
obligations, damages, losses, penalties, demands, actions and judgments, and
costs and reasonable expenses of any kind or nature (including reasonable
attorneys' fees), by anyone whomsoever, resulting from or arising out of such
settlement, and (2) Landlord is fully released from all liability, fines, suits,
claims, obligations, damages, losses, penalties, demands, actions and judgments,
and costs and reasonable expenses of any kind or nature respecting such claim,
litigation, action, or suit, and (3) such settlement shall not in any manner
adversely affect the Property, or the use, development, maintenance, repair or
occupancy thereof; and (ii) Tenant shall not issue, disseminate, distribute or
publish (or cause to be issued, disseminated, distributed or published), or
agree to, consent to, or approve, any statement or press release in connection
with such settlement, without the prior written consent of Landlord, which
Landlord agrees not to unreasonably withhold. The provisions of this Section
shall survive the expiration or termination of this Lease

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<PAGE>

                12.1 Landlord shall indemnify, defend and hold harmless Tenant
and Tenant's employees, officers, directors, shareholders, affiliates, partners,
agents, professionals and consultants against and from any and all liability,
fines, suits, claims, obligations, damages, losses, penalties, demands, actions
and judgments, and costs and reasonable expenses of any kind or nature
(including reasonable attorneys' fees), by anyone whomsoever, to the extent
solely and directly resulting from or arising out of the wilful misconduct of
Landlord or Landlord's agents or the gross negligence of Landlord or Landlord's
agents in connection with the Quinton Demised Premises and/or the Original
Surrender Space.

In case any claim, action or proceeding is raised or brought against Tenant
(and/or any of the other indemnified parties above described) by reason of the
wilful misconduct of Landlord or Landlord's agents or the gross negligence of
Landlord or Landlord's agents in connection with the Quinton Demised Premises
and/or the Original Surrender Space, Tenant, promptly after receiving notice of
such claim, action or proceeding, shall provide notice of such action or
proceeding to Landlord (but no delay by Tenant in giving such notice to Landlord
shall in any way impair, waive or affect the obligations of Landlord to
indemnify, defend, and hold harmless Tenant except to the extent of actual
prejudice to Landlord arising solely and directly From such delay). Landlord, at
Landlord's expense, thereupon shall assume and, through competent counsel,
diligently conduct the defense of such claim, action or proceeding, or any claim
or litigation resulting therefrom. Upon such assumption by Landlord, Tenant, at
the expense of Landlord, shall cooperate with Landlord in all reasonable
respects in the conduct of such defense. The duty of Tenant to cooperate shall,
to the extent reasonable, include but not be limited to, at the expense of
Landlord, making available then-present employees of it and/or its Affiliates to
act as witnesses and consult with counsel, and assist in the location and
production of documents. Tenant shall, to the extent reasonable, and subject to
such reasonable confidentiality requirements as Tenant may impose, and at the
cost of Landlord (including without limitation reproduction costs), make
available to Landlord the books and records of Tenant relevant to the
proceedings. The obligations of Landlord shall include but not be limited to, at
the cost of Landlord, taking all steps necessary or appropriate to the defense
or settlement of such action, proceeding, claim or litigation, and to hold
Tenant harmless from and against any and all losses, liabilities, claims,
damages, deficiencies, expenses, obligations, and costs (including without
limitation reasonable attorneys fees and expenses and costs of investigation and
defense) arising out of or in connection with any claim, matter, occurrence,
condition, action, proceeding, litigation, or event respecting which Landlord is
obligated to indemnify, defend and hold harmless Tenant as provided in this
Lease. Tenant may participate, through counsel of Tenant's choice (and, provided
that and for so long as Landlord has performed and is performing its obligations
pursuant to this Article 12, at Tenant's expense, otherwise at Landlord's
expense) in the defense of any such claim, action, proceeding or litigation, but
Landlord (provided that and for so long as Landlord has performed and is
performing its obligations pursuant to this Article 12) shall direct and control
the defense thereof. Landlord or its counsel shall keep Tenant apprised at all
times of the status of the action or proceeding. The establishment of limits of
coverage for the insurance required by Section 5 shall not serve in any way to
limit Landlord's obligations pursuant to this Section 12.

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<PAGE>

Anything herein to the contrary notwithstanding, (i) Landlord shall not enter
into or consent or agree to the settlement of any claim, litigation, action, or
suit respecting which Landlord is obligated to indemnify, defend or hold
harmless Tenant pursuant hereto, without the express prior written consent of
Tenant, in Tenant's sole discretion, unless, in each such case (as demonstrated
to the reasonable satisfaction of Tenant) (1) Landlord has and does fully and
completely indemnify and hold Tenant harmless from and against all liability,
fines, suits, claims, obligations, damages, losses, penalties, demands, actions
and judgments, and costs and reasonable expenses of any kind or nature
(including reasonable attorneys' fees), by anyone whomsoever, resulting from or
arising out of such settlement, and (2) Tenant is fully released from all
liability, fines, suits, claims, obligations, damages, losses, penalties,
demands, actions and judgments, and costs and reasonable expenses of any kind or
nature respecting such claim, litigation, action, or suit, and (3) such
settlement shall not in any manner affect Tenant's leasehold estate at the
Property, or the use or occupancy of the Quinton Demised Premises; and (ii)
Landlord shall not issue, disseminate, distribute or publish (or cause to be
issued, disseminated, distributed or published), or agree to, consent to, or
approve, any statement or press release in connection with such settlement,
without the prior written consent of Tenant, which Tenant agrees not to
unreasonably withhold. The provisions of this Section shall survive the
expiration or termination of this Lease.

        13. DEFAULT PROVISIONS; LANDLORD'S REMEDIES

            13.1 Any of the following events ("Events of Default") shall
constitute a default under this Lease:

                13.1.1 Tenant's default in the payment of any installment of
basic annual rental, or in the payment of any additional rent, on any day upon
which the same shall be due and payable and such default shall continue for five
(5) days after the date on which the same was due and payable; or

                13.1.2 Tenant's doing or permitting anything to be done, whether
by action or inaction, contrary to any of Tenant's obligations pursuant to this
Lease, or otherwise any breach of this Lease or failure by Tenant to perform any
of its obligations under this Lease (except as to the payment of rent additional
rent and the matters set forth in Sections 13.1.3, 13.1.4 and 14), and such
situation, breach or failure shall continue and shall not be remedied by Tenant
within thirty (30) days after Landlord shall have given to Tenant notice
specifying the same; or, in the case of a happening, breach, failure or default
which cannot with due diligence be cured within a period of thirty (30) days and
the continuance of which for the period required for cure will not subject
Landlord (or any of its directors, officers, shareholders, partners, agents or
employees) to the risk of criminal or civil liability or foreclosure of any
superior mortgage or any other lien on the Property, if Tenant shall not duly
institute within such thirty (30) day period and promptly and diligently
prosecute to completion all steps necessary to remedy the same; or

                                       30
<PAGE>

                13.1.3 The occurrence of any event or the arising of any
contingency whereby this Lease, any interest in it, the estate thereby granted
or, any portion thereof, or the unexpired balance of the Term would by operation
of law or otherwise devolve upon or pass to any person, firm or corporation
other than Tenant, except as expressly permitted by Section 11; or

                13.1.4 Tenant's abandoning or vacating the Quinton Demised
Premises.

                13.1.5 Tenant's breach of or failure to perform its obligations
under the Cost Sharing Arrangement (or any similar arrangement), and such breach
or failure shall continue and shall not be remedied by Tenant within fifteen
(15) days after Landlord shall have given to Tenant notice specifying the same.

            13.2 Upon the occurrence of any Event of Default, the Landlord may
exercise any one or more of the following remedies, in addition to all other
remedies provided in this Lease and by law or in equity:

                13.2.1 Landlord may recover from Tenant: (i) the worth at the
time of award (hereinafter defined) of the unpaid basic annual rental and
additional rent which had been earned at the time of termination; (ii) the worth
at the time of award of the amount by which the unpaid basic annual rental and
additional rent which would have been earned after termination until the time of
award exceeds the amount of such basic annual rental and additional rent loss
that Tenant proves could have been reasonably avoided; (iii) the worth at the
time of award of the amount by which the unpaid basic annual rental and
additional rent for the balance of the Term after the time of award exceeds the
amount of such basic annual rental and additional rent loss that Tenant proves
could be reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment 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 therefrom. The "worth at the time of award" of the amounts
referred to in clauses (i) and (ii) above shall be computed by allowing interest
at the Default Rate (hereinafter defined). The worth at the time of award of the
amount referred to in clause (iii) above shall be computed by discounting such
amount at a rate equal to the discount rate of the Federal Reserve at the time
of award plus one percentage point (1%).

            "Default Rate" means the annual rate equal to the lesser of (x) four
percent (4%) above the corporate base rate as announced by Citibank, N.A., from
time to time, or if the use of the corporate base rate is discontinued by
Citibank, N.A, such other rate as may thereafter be announced from time to time
by Citibank, N.A., or any major bank in Washington selected by Landlord as a
measure of the cost to its borrowers of short-term commercial loans, or (y) the
maximum amount permitted by law.

                For purposes of computing unpaid basic annual rental and
additional rent for the balance of the Term pursuant to clause (iii) above,
unpaid basic annual rental and additional rent shall consist of the sum of: (A)
the total basic annual rental for the balance of the Term; plus (B) Tenant's

                                       31
<PAGE>

obligation to pay the Operating Expenses and Taxes and such other items of
additional rent specified in this Lease to be paid in whole or in part by Tenant
for the balance of the Term. For purposes of computing Tenant's obligation to
pay the Operating Expenses and Taxes and such other items of additional rent for
the Lease Year of the Event of Default and each future Lease Year in the Term
such amounts shall be assumed to be equal to the amount of additional rent that
was payable by Tenant in respect of Operating Expenses and Taxes and such other
items of additional rent for the Lease Year prior to the Lease Year in which the
Event of Default occurs compounded at a rate equal to the mean average rate of
inflation for the three (3) Lease Years preceding the Lease Year of the Event of
Default, as determined by using the United States Department of Labor, Bureau of
Labor Statistics Consumer Price Index (All Urban Consumers, all items, 1982-84
equals 100) (the "CPI") for the metropolitan area or region of which the
Property is a part. If such index is discontinued or revised during the Term,
such other government index or computation with which it is replaced shall be
used in order to obtain substantially the same result as would be obtained if
the index had not been discontinued or revised. If no replacement index exists
then Landlord shall select as a replacement index that index which, in
Landlord's opinion, is generally recognized as the successor index.

                13.2.2 Landlord may sell at public or private sale all or any
part of the goods, chattels, fixtures and other personal property belonging to
Tenant which are or may be put into the Quinton Demised Premises or the Original
Surrender Space during the Term, whether exempt or not from sale under execution
or attachment (it being agreed that said property shall at all times be bound
with a lien in favor of Landlord and shall be chargeable for all rental and for
the fulfillment of the other covenants and agreements herein contained) and
apply the proceeds of such sale, first, to the payment of all costs and expenses
of conducting the sale or caring for or storing said property (including all
attorney's fees), second, toward the payment of any indebtedness, including
(without limitation) indebtedness for rental, which may be or may become due
from Tenant to Landlord, and third, to pay Tenant, on demand in writing, any
surplus remaining after all indebtedness of Tenant to Landlord has been fully
paid.

                13.2.3 Landlord may perform, on behalf and at the expense of
Tenant, any obligation of Tenant under this Lease which Tenant has failed to
perform and of which Landlord shall have given Tenant notice, the cost of which
performance by Landlord, together with interest thereon at the Default Rate from
the date of such expenditure, shall be deemed additional rent and shall be
payable by Tenant to Landlord upon demand.

                13.2.4 The Landlord may give the Tenant a notice (the
"Termination Notice") of its intention to terminate this Lease specifying a day
not less than ten (10) days thereafter, and, upon the day specified in the
Termination Notice, this Lease and the term and estate hereby granted shall
expire and terminate and all rights of the Tenant under this Lease shall expire
and terminate, but the Tenant shall remain liable for damages as hereinafter set
forth. Notwithstanding the foregoing, the Landlord may institute dispossess
proceedings for non-payment of rent, distraint or other proceedings to enforce
the payment of rent without giving the Termination Notice.

                                       32
<PAGE>

                13.2.5 The Landlord may exercise any and all other legal and/or
equitable rights or remedies which it may have.

            13.3 Upon any such termination or expiration of this Lease, or other
termination of Tenant's possession under this Lease, the Tenant shall peaceably
quit and surrender the Quinton Demised Premises and the Original Surrender Space
(if not previously vacated) to the Landlord, and the Landlord or Landlord's
agents and employees may without further notice immediately or at any time
thereafter enter upon or re-enter the Quinton Demised Premises and the Original
Surrender Space, or any part thereof, and possess or repossess itself or
themselves thereof either by summary dispossess proceedings, ejectment, any
suitable action or proceeding at law, agreement, force or otherwise (without
thereby creating any breach of the peace), and may dispossess and remove Tenant
and all other persons and property from the Quinton Demised Premises and the
Original Surrender Space without being liable to indictment, prosecution, or
damages therefor, and may repossess the same, and may remove any persons
therefrom, to the end that Landlord may have, hold and enjoy the Quinton Demised
Premises and the Original Surrender Space again. The words "enter" or "reenter,"
"possess" or "repossess" as used in this Lease are not restricted to their
technical legal meaning.

            13.4 In the event of any breach or threatened breach by Tenant of
any of the agreements, terms, covenants or conditions contained in this Lease,
Landlord shall be entitled to enjoin such breach or threatened breach and shall
have the right to invoke any right and remedy allowed at law or in equity or
provided in this Lease.

            13.5 Each right and remedy of the Landlord provided for in this
Lease shall be cumulative and shall be in addition to every other right or
remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise or beginning of the exercise
by the Landlord of any one or more of the rights or remedies provided for in
this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by Landlord of
any or all other rights or remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise.

            13.6 Suit or suits for the recovery of damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained in this Lease shall be deemed to require Landlord to postpone
suit until the date when the term of this Lease would have expired if it had not
been so terminated under the provisions of this Section 13 or under any
provision of law, or had Landlord not re-entered the Quinton Demised Premises or
the Original Surrender Space. Nothing contained in this Lease shall be construed
to limit or preclude recovery by Landlord against Tenant of any sums or damages
to which Landlord may lawfully be entitled by reason of any default under this
Lease or otherwise on the part of Tenant. Nothing contained in this Lease shall
be construed to limit or prejudice the right of Landlord to prove and obtain as
liquidated damages by reason of the termination of this Lease or reentry on the
Quinton Demised Premises or the Original Surrender Space for the default of
Tenant an amount equal to the maximum allowed by any statute or rule of law in
effect at the time when, and governing the proceeding in which, such damages are
to be proved.

                                       33
<PAGE>

            13.7 Upon the termination or expiration of this Lease, or other
termination of Tenant's possession under this Lease, the Tenant hereby
authorizes and empowers the Landlord, at the Landlord's option (without imposing
any duty upon the Landlord to do so), to re-enter the Quinton Demised Premises
and the Original Surrender Space as agent for the Tenant or any
successor-occupant of the Quinton Demised Premises under the Tenant, or for its
own account or otherwise, and to relet the same for any term expiring either
prior to the original expiration date hereof, or simultaneously therewith, or
beyond such date, and to receive rent and apply same to pay all fees and
expenses incurred by the Landlord as a result of such Event of Default,
including without limitation any legal fees and expenses arising therefrom, the
cost of re-entry and re-letting and to the payment of the rent and other charges
due hereunder, and, at the expense of Tenant, make such repairs or alterations
and shall necessary or appropriate, in the reasonable judgment of Landlord to
facilitate such reletting. No entry, re-entry or reletting by the Landlord,
whether by summary proceedings, termination or otherwise, shall discharge the
Tenant from its liability to the Landlord as set forth herein. If Landlord does
so relet the Quinton Demised Premises or the Original Surrender Space, Landlord
may relet the entirety thereof, or any part thereof, alone or together with
other premises, for such term(s) (which may be greater or less than the period
which otherwise would have constituted the balance of the Term) and on such
terms and conditions (which may include concessions or free rent and alterations
of the Quinton Demised Premises or the Original Surrender Space) as Landlord, in
its sole discretion, may determine, but Landlord shall not be liable for, nor
shall Tenant's obligations hereunder be diminished by reason of, any failure by
Landlord to relet the Quinton Demised Premises or the Original Surrender Space)
or any failure by Landlord to collect any rent due upon such reletting. Landlord
shall have no obligation to relet the Quinton Demised Premises or any part
thereof or the Original Surrender Space.

            13.8 The Tenant shall be liable for all costs, charges and expenses,
including reasonable attorney's fees and disbursements, incurred by the Landlord
by reason of the occurrence of any Event of Default or the exercise of the
Landlord's remedies with respect thereto.

            13.9 The Tenant, for the Tenant, and on behalf of any and all
persons claiming through or under the Tenant, including creditors of all kinds,
does hereby waive and surrender all rights and privileges which they or any of
them might have under or by reason of any present or future law, to redeem the
Quinton Demised Premises or the Original Surrender Space or to have a
continuance of this Lease for the Term after being dispossessed or ejected
therefrom by the valid order of a court of competent jurisdiction.

            13.10 The provisions of this Section 13 shall survive the expiration
or termination of this Lease.

        14. BANKRUPTCY AND INSOLVENCY

            14.1 Neither Tenant's interest in this Lease, nor any estate hereby
created in Tenant nor any interest herein or therein, shall pass to any trustee
or receiver or assignee for the

                                       34
<PAGE>

benefit of creditors or otherwise by operation of law except as may specifically
be provided pursuant to the United States Bankruptcy Code.

            14.2 In the event the interest or estate created in Tenant hereby
shall be taken in execution or by other process of law, or if Tenant is
adjudicated insolvent by a court of competent jurisdiction other than the United
States Bankruptcy Court, or if a receiver or trustee of the property of Tenant
shall be appointed by reason of the insolvency or inability of Tenant to pay its
debts, or if Tenant shall file a voluntary petition or proceeding under any
federal or state law dealing with bankruptcy, insolvency, reorganization or any
other adjustment of its debts, or if any assignment shall be made of the
property of Tenant for the benefit of creditors, then and in any such event,
this Lease and all rights of Tenant hereunder shall automatically cease and
terminate with the same force and effect as though the date of such event were
the date originally set forth herein and fixed for the expiration of the Term,
and Tenant shall vacate and surrender the Premises but shall remain liable as
herein provided.

            14.3 Tenant shall not cause or give cause for the appointment of a
trustee or receiver of the assets of Tenant and shall not make any assignment
for the benefit of creditors or become or be adjudicated insolvent, or file any
voluntary petition or commence any voluntary proceeding in respect thereto. The
allowance of any petition under any insolvency law except under the Bankruptcy
Code or the appointment of a trustee or receiver of Tenant or of its assets,
shall be conclusive evidence that Tenant caused, or gave cause therefor, unless
such allowance of the petition, or the appointment of a trustee or receiver, is
vacated within forty-five (45) days after such allowance or appointment. Any act
described in this Section 14.3 shall be deemed a material breach of Tenant's
obligations hereunder, and this Lease shall thereupon automatically terminate.
Landlord does, in addition, reserve any and all other remedies provided in this
Lease or by law or in equity.

            14.4 Upon the filing of a petition by or against Tenant under the
United States Bankruptcy Code:

                14.4.1 Tenant, as debtor and as debtor in possession, and any
trustee who may be appointed agree as follows: (a) 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 United States Bankruptcy Court; and (b) to
pay monthly in advance on the first day of each month as reasonable compensation
for use and occupancy on the Premises an amount equal to all rent, additional
rent and other charges otherwise due pursuant to this Lease; and (c) to reject
or assume this Lease within sixty (60) days of the filing of such petition under
Chapter 7 of the Bankruptcy Code or within 120 days (or such shorter term as
Landlord, in its sole discretion, may deem reasonable so long as notice of such
period is given) of the filing of a petition under any other Chapter; and (d) to
give Landlord at least forty-five (45) days' prior written notice of any
proceeding relating to any assumption of this Lease; and (e) to give Landlord at
least thirty (30) days' prior written notice of any abandonment of the Premises;
any such abandonment to be deemed a rejection of this Lease; and (f) to do all
other things of benefit to Landlord otherwise required under the Bankruptcy
Code; and (g) to be deemed to have rejected this Lease in the event of the
failure to comply with any of the above; and (h) to have

                                       35
<PAGE>

consented to the entry of an order by an appropriate United States Bankruptcy
Court providing all of the above, waiving notice and hearing of the entry of
same.

                14.4.2 No Event of Default or default of this Lease by Tenant,
either prior to or subsequent to the filing of such a petition, shall be deemed
to have been waived unless expressly done so in writing by Landlord.

                14.4.3 Included within and in addition to any other conditions
or obligations imposed upon Tenant or its successor in the event of assumption
and/or assignment are the following: (a) the cure of any monetary defaults and
the reimbursement of pecuniary loss within not more than thirty (30) days of
assumption and/or assignment; and (b) the deposit of an additional sum equal to
three months' rent to be held pursuant to the terms of Section 10 of this Lease;
and (c) the use of the Quinton Demised Premises as set forth in Section 3 of
this Lease; and (d) the prior written consent of any mortgagee to which this
Lease has been assigned as collateral security; and (e) the Quinton Demised
Premises, at all times, remains a single leasehold structure and no physical
changes of any kind may be made to the Quinton Demised Premises unless in
compliance with the applicable provisions of this Lease.

        15. ENTRY BY LANDLORD, ETC.

            15.1 Tenant shall permit Landlord and its authorized representatives
to enter the Quinton Demised Premises, or any part thereof, at all reasonable
times for the purpose of (a) performing work in the Quinton Demised Premises if
and to the extent required to be performed by Landlord (including, without
limitation, to perform such work as shall be required to be performed by Legal
Requirements (to the extent not the obligation of Tenant under this Lease) in
the event that portions of the Property (other than the Quinton Demised
Premises) shall be leased to persons other than Tenant), provided, however, that
(except in the event of an emergency) Landlord shall give Tenant reasonable
prior notice of such entry and shall conduct such work so as not to unreasonably
interfere with the normal conduct of Tenant's business in the Quinton Demised
Premises, or (b) curing defaults of Tenant in accordance with, and (except in
the event of an emergency) after such notice (if any) as may be required by, the
provisions of Section 13. In addition, Tenant, after reasonable prior notice,
shall permit Landlord and fee mortgagees and their respective authorized
representatives, to enter the Quinton Demised Premises, or any part thereof, at
all reasonable times during usual business hours for the purpose of inspecting
the same.

            15.2 Landlord shall also have the right, after reasonable prior
notice, to enter the Quinton Demised Premises, or any part thereof, at all
reasonable times during usual business hours for the purpose of showing the same
to appraisers, prospective lenders and prospective purchasers or fee mortgagees
thereof and, at any time within six months prior to the expiration of this
Lease, for the purpose of showing the same to prospective tenants.

            15.3 If, at any time during which Landlord or any fee mortgagee
shall have the right to enter the Quinton Demised Premises, admission to the
Quinton Demised Premises, for the

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<PAGE>

purposes aforesaid cannot be obtained, they, or their respective agents,
servants, employees, contractors and representatives, may (on such notice, if
any, as may be reasonable under the circumstances, which notice need not be in
writing if an emergency exists in respect of the protection of the Quinton
Demised Premises) enter the Quinton Demised Premises and accomplish such
purpose. Any entry on the Quinton Demised Premises by Landlord or a fee
mortgagee shall be at such times and by such methods (other than in the event of
such an emergency) as will cause as little inconvenience, annoyance,
disturbance, loss of business or other damage to Tenant as may be reasonably
practicable in the circumstances.

        16. COVENANT OF QUIET ENJOYMENT

            16.0 Landlord covenants that Tenant, on paying the rents and
performing and observing all the covenants and conditions contained in this
Lease, shall and may peaceably and quietly have, hold and enjoy the Quinton
Demised Premises during the Term and the Original Surrender Space until the
surrender thereof in accordance with the terms of this Lease, subject, however,
to the terms of this Lease and to the matters to which this Lease is subject,
including, without limitation, the rights of other parries to the Cost Sharing
Arrangement.

        17. EFFECT OF CONVEYANCE; LIMITS OF LIABILITY OF LANDLORD; DEFINITION OF
"LANDLORD"

            17.1 The term "Landlord" as used in this Lease shall mean and
include only the owner or owners (and any mortgagee in possession) at the time
in question of the fee estate in the Property, so that in the event of any
transfer or transfers (by operation of law or otherwise) of the title to such
fee estate, Landlord herein named (and in case of any subsequent transfers or
conveyances, the then transferor) shall be and hereby is automatically freed and
relieved, from and after the date of such transfer or conveyance, of all
liability in respect of the performance of any covenants or obligations on the
part of Landlord contained in this Lease thereafter to be performed, provided
that (a) any funds in which Tenant has an interest, in the hands of such
Landlord or the then transferor at the time of such transfer, shall then be
turned over to the transferee, and (b) any amount then due and payable to Tenant
by Landlord or the then transferor under any provision of this Lease shall then
be paid to Tenant and (c) the transferee shall be deemed to have assumed and
agreed to perform, subject to the limitations of this Section 17 (and without
further agreement between or among the parties or their successors in interest,
and/or the transferee) and only during and in respect of the transferee's period
of ownership, all of the terms, covenants and conditions in this Lease contained
on the part of Landlord thereafter to be performed, which terms, covenants and
conditions shall be deemed to "run with the land," it being intended hereby that
the terms, covenants and conditions contained in this Lease on the part of
Landlord shall, subject as aforesaid, be binding on Landlord, its successors and
assigns, only during and in respect of their respective successive periods of
ownership.

                                       37
<PAGE>

            17.2 It is specifically understood and agreed that in the event of a
breach by Landlord of any of the terms, covenants or conditions of this Lease to
be performed by Landlord, the monetary liability of Landlord in relation to any
such breach shall be limited to the equity of Landlord in the Property,
including Landlord's interest in this Lease, the Property, moneys held by any
trustee for the benefit of Landlord and any sums at the time due or to become
due under this Lease. Tenant shall look only to Landlord's equity in the
Property for the performance and observance of the terms, covenants and
conditions of this Lease to be performed or observed by Landlord and for the
satisfaction of Tenant's remedies for the collection of any award, judgment or
other judicial process requiring the payment of money by Landlord in the event
of a default in the full and prompt payment and performance of any of Landlord's
obligations hereunder. No property or assets of Landlord, other than Landlord's
equity in the Property, shall be subject to lien, levy, execution or other
enforcement procedure for the satisfaction of Tenant's remedies in any matter
whatsoever arising out of or in any way connected with this Lease or any of its
provisions, any negotiations in connection therewith, the relationship of
Landlord and Tenant hereunder or the use and occupancy of the Property; and in
confirmation of the foregoing, if any such lien, levy, execution or other
enforcement procedure so arising shall be on or in respect of any property or
assets of Landlord, other than Landlord's equity in the Property, Tenant shall
promptly release any property or assets of Landlord, other than Landlord's
equity in the Property, from such lien, levy, execution or other enforcement
procedure by executing and delivering, at Tenant's expense and without charge to
Landlord, any instrument or instruments, in recordable form, to that effect
prepared by Landlord (but any such instrument of release shall not release any
such lien, levy, execution or other endorsement procedure on or in respect of
Landlord's equity in the Property). Tenant hereby appoints Landlord its
attorney-in-fact for the purposes of executing such instrument or instruments of
release if Tenant fails or refuses to do so promptly after request.

        18. SURRENDER; HOLDING OVER BY TENANT

            18.0 On the expiration or termination of this Lease, Tenant shall
peaceably and quietly leave, surrender and deliver to Landlord the Quinton
Demised Premises, together with all Alterations which may have been made upon
the Quinton Demised Premises (except to the extent that Landlord may require
Tenant under Section 9.4 hereof to remove such Alterations and restore the
Quinton Demised Premises), all of the foregoing to be surrendered in good,
substantial and sufficient repair, order and condition, reasonable use, wear and
tear excepted and free of occupants. If as a result of or in the course of the
removal of Tenant's property any damage occurs to the Quinton Demised Premises,
Tenant shall pay to Landlord the reasonable cost of repairing such damage. If
Tenant fails to quit and surrender the Quinton Demised Premises upon the
expiration or termination of this Lease, it shall be liable to Landlord for the
damages caused to Landlord by reason of such holdover and it is agreed that such
damages shall be liquidated in an amount equal to double the rental rate
provided for in this Lease. The acceptance by Landlord of such damages or rental
after termination of this Lease shall not be construed as consent to continued
occupancy, nor shall such holding over constitute a renewal or extension of this
Lease. Landlord may, at its option, construe such holding over as a tenancy from
month to month, subject to all the terms, covenants and conditions of this
Lease, except as to duration thereof, and in that event the Tenant shall pay
rent and

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<PAGE>

additional rent in advance at the rate provided in this Lease as effective
during the last month thereof. Tenant's obligation to observe or perform this
covenant shall survive the expiration or termination of this Lease.
Notwithstanding the foregoing, upon the expiration of the Lease for any reason
whatsoever, Tenant shall have the right and obligation to remove all of its
fixtures, furniture, machinery, and equipment from the Quinton Demised Premises,
provided Tenant promptly shall repair any damage caused by such removal.

        19. CURING DEFAULTS; FEES AND EXPENSES

            19.1 If Tenant shall fail to pay any imposition or to make any other
payment required hereunder or shall otherwise default in the full and prompt
performance of any covenant contained herein and to be performed on Tenant's
part, Landlord, without being under any obligation to do so and without thereby
waiving such default, may, after fifteen (15) days' notice to Tenant, or such
notice (which may be oral) as may be reasonable in the circumstances if any
emergency exists in respect of the protection of the Quinton Demised Premises or
the Original Surrender Space, make such payment or perform such covenant for the
account and at the expense of Tenant and may enter upon the Quinton Demised
Premises and the Original Surrender Space for any such purpose and take all
action thereon as may be necessary therefor in the sole judgment of Landlord.

            19.2 All sums so paid by Landlord in connection with the payment or
performance by it of any of the obligations of Tenant hereunder and all actual
and reasonable costs, expenses and disbursements paid in connection therewith or
enforcing or endeavoring to enforce any right under or in connection with this
Lease, or pursuant to law, together with interest thereon at the rate of 10% per
annum (or, if lower, the maximum rate permitted by law) from the respective
dates of the making of each such payment shall constitute additional rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord
within fifteen (15) days after demand by Landlord. Landlord shall not be limit,
in the proof of any damages which Landlord may claim against Tenant arising out
of or by reason of Tenant's failure to provide and keep in force insurance as
required by Section 5 hereof, to the amount of the insurance premium or premiums
not paid or incurred by Tenant.

            19.3 The provisions of this Section 19 shall survive the expiration
or termination of this Lease.

        20. MECHANICS' AND OTHER LIENS

            20.1 If any mechanic's, laborer's or materialman's lien shall at any
time be filed against the Property or any part thereof with respect to any work
done, or labor or materials furnished, or caused to be furnished, by Tenant or
anyone claiming through or under Tenant, or any judgment, attachment or levy is
filed or recorded against the Property or any part thereof by anyone claiming
through or under Tenant, Tenant, within thirty (30) days after notice of the
filing thereof, shall cause the same to be discharged of record by payment,
deposit, bond, order of a court of competent jurisdiction or otherwise. If
Tenant shall fail to cause such lien, judgment, attachment or

                                       39
<PAGE>

levy to be discharged within the period aforesaid, then, in addition to any
other right or remedy, Landlord may, but shall not be obligated to, discharge
the same by bonding proceedings, if permitted by law (and if not so permitted,
by deposit in court). Any amount so paid by Landlord, including all costs and
expenses paid by Landlord in connection therewith, together with interest
thereon at the rate of 15% per annum (or, if lower, the maximum rate permitted
by law) from the respective dates of Landlord's so paying any such amount, cost
or expense, shall constitute additional rent payable by Tenant under this Lease
and shall be paid by Tenant to Landlord on demand.

            20.2 Nothing contained in this Lease shall be deemed or construed in
any way as constituting the consent or request of Landlord, express or implied,
by inference or otherwise, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any materials
for any specific improvement, alteration to or repair of the Quinton Demised
Premises, or any part thereof, or as giving Tenant any right, power or authority
to contract for or permit the rendering of any services or the furnishing of any
materials that would give rise to the filing of any mechanic's Liens against
Landlord's interest in the Quinton Demised Premises. Notice is hereby given that
Landlord shall not be liable for any labor or materials furnished or to be
furnished to Tenant upon credit, and that no mechanic's or other lien for any
such labor or materials shall attach to or affect the reversion or estate or
interest of Landlord in and to the Quinton Demised Premises.

        21. SIGNS; ADDRESS

            21.0 Landlord shall have the right to change the name or street
address of the Property, to install, maintain, move, remove and reinstall signs
on and off the Property identifying the Property and advertising any or all of
the Property, including the Quinton Demised Premises and the Original Surrender
Space, as for sale or for rent. Tenant shall not place any signs (i) on the
exterior of the Property, or (ii) in the Common Areas, or (iii) in the Quinton
Demised Premises or the Original Surrender Space which are visible from the
exterior of the Property. Tenant, at its sole expense and in compliance with all
Legal Requirements, may place signs containing Tenant's name and logo as may be
approved by Landlord, in advance, in writing. The size, design, construction and
placement of all such signs shall be subject to Landlord's prior written
consent, which shall not to be unreasonably withheld.

        22. WAIVERS AND SURRENDERS TO BE IN WRITING; RIGHT TO TERMINATE

        22.0 The receipt, acceptance and/or deposit (including the endorsement
of any check) of full or partial rent by Landlord with knowledge of any breach
of this Lease by Tenant or of any default on the part of Tenant in the
observance or performance of any of the provisions or covenants of this Lease
shall not be deemed to be a waiver of any such provision, covenant or breach of
this Lease. No waiver or modification by Landlord, unless in writing and signed
by Landlord, shall discharge or invalidate any provision or covenant or affect
the right of Landlord to enforce the same in the event of any subsequent breach
or default. The failure on the part of Landlord to insist in any one or more
instances upon the strict performance of any of the provisions or covenants of
this Lease,

                                       40
<PAGE>

or to enforce any covenant or provision herein contained consequent upon a
breach of any provision of this Lease shall not affect or alter this Lease or be
construed as a waiver or relinquishment for the future of such one or more
provisions or covenants or of the right to insist upon strict performance or to
exercise such right, remedy or election, but the same shall continue and remain
in full force and effect with respect to any then existing or subsequent breach,
act or omission whether of a similar nature or otherwise. The receipt,
acceptance and/or deposit (including the endorsement of any check) by Landlord
of any rent or any other sum of money or any other consideration hereunder paid
by Tenant after the termination, in any manner, of the Term, or after the giving
by Landlord of a termination notice, shall not reinstate, continue or extend the
Term, or destroy, or in any manner impair the efficacy of any such termination
notice as may have been given hereunder by Landlord to Tenant prior to the
receipt, acceptance and/or deposit (including the endorsement of any check) of
any such rent, or other sum of money or other consideration, unless so agreed to
in writing and signed by Landlord. Neither acceptance of the keys nor any other
act or thing done by Landlord or any agent or employee shall be deemed to be an
acceptance of a surrender of the Premises, or any part thereof, excepting only
an agreement in writing signed by Landlord. No payment by Tenant or receipt,
acceptance and/or deposit (including the endorsement of any check) by Landlord
of a lesser amount than the correct rent shall be deemed to be other than a
payment on account, nor shall any endorsement or statement on any check be
deemed to effect or evidence an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance or pursue any other remedy in this Lease provided.

        23. COVENANTS BINDING ON SUCCESSORS AND ASSIGNS

            23.0 All of the terms, covenants and conditions of this Lease shall
apply to and inure to the benefit of and be biding upon the respective heirs,
executors, administrators, successors and assigns of the parties, except as
expressly otherwise herein provided. If there shall be more than one Tenant,
they shall all be bound jointly and severally by the terms, covenants and
agreements herein contained. No rights, however, shall inure to the benefit of
any assignee or subtenant of Tenant unless the assignment or subletting, as the
case may be, has been made in accordance with the provisions set forth in
Section 11.

        24. RESOLUTION OF DISPUTES

            24.0 THE PARTIES HERETO WAIVE A TRIAL BY JURY (TO THE EXTENT
PERMITTED BY LAW) ON ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING
BETWEEN THEM OR THEIR SUCCESSORS UNDER OR IN ANY WAY CONNECTED WITH THIS LEASE
OR ANY OF ITS PROVISIONS, ANY NEGOTIATIONS IN CONNECTION THEREWITH, THE
RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT'S USE OR OCCUPATION OF THE
PREMISES, INCLUDING ANY CLAIM OF INJURY OR ANY EMERGENCY OR OTHER STATUTORY
REMEDY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE
EXPIRATION OR TERMINATION OF THIS LEASE.

                                       41
<PAGE>

        25. NOTICES

            25.0 Any statement, demand, election, request, notice, approval,
consent or other communication, (collectively, "notice") authorized or required
by this Lease must be in writing and shall be deemed given when delivered by (a)
hand, against receipt, (b) one (1) business day after sending by reputable
overnight courier which provides for acknowledgment of receipt, or (c) three (3)
business days after mailing by United States certified mail, return receipt
requested, addressed to the intended recipient at the following address as:

       If to Landlord: AHP Subsidiary Holding Corporation
                       Five Giralda Farms
                       Building 3A
                       Madison, New Jersey 07940

                       with copy to:

                       American Home Products Corporation
                       Five Giralda Farms
                       Madison, New Jersey 07940
                       Attention:  Senior Vice President
                                   and General Counsel

       If to Tenant:   Quinton Instrument Company
                       3303 Monte Via Parkway
                       Bothell, Washington 98021
                       Attention:  President

                       with copy to:

                       QIC Holding Corp.
                       c/o:  W. R. Hambrecht & Co., LLC
                       550 Fifteenth Street
                       San Francisco, California 94103

Payments due to Landlord under this Lease shall be made at the following
address:

                       AHP Subsidiary Holding Corporation
                       c/o American Home Products Corporation
                       Five Giralda Farms
                       Madison, New Jersey 07940
                       Attention:  Treasurer

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<PAGE>

Any notices by a party signed by counsel to such party shall be deemed a notice
signed by such party. Notice shall be deemed given on the date of delivery or
the date delivery is refused. Any party may change its address for notices, and
Landlord may change its address for payments, by providing to the other party
written notice in the manner required by this Section 25.

        26. DEFINITIONS; HEADINGS; CONSTRUCTION OF LEASE

            26.1 For the purposes of this Lease, unless the context otherwise
requires:

                26.1.1 The term "Landlord's agents" shall be deemed to include
agents, servants, employees and contractors of landlord.

                26.1.2 The term "person" shall be deemed to include individuals,
corporations, partnerships, firms, associations and any other legal or business
entities.

                26.1.3 The term "unavoidable delays" shall mean any and all
delays beyond the reasonable control of the party otherwise responsible,
including delays caused by the other party, governmental restrictions,
governmental preemption, strikes, labor disputes, lockouts, shortage of labor or
materials, acts of God, enemy action, civil commotion, riot or insurrection,
fire, holdover tenancies or other unavoidable casualty or any other cause beyond
the responsible party's control, but shall not include delays occasioned by lack
of money.

                26.1.4 The terms "include," "including" and "such as" shall be
construed as if followed by the phrase "without being limited to". The words
"herein," "hereof," "hereby," "hereunder" and words of similar import shall be
construed to refer to this Lease as a whole and not to any particular Section
hereof unless expressly so stated.

            26.2 The various terms which are defined in other Sections of this
Lease shall have the meanings specified in such other Sections for all purposes
of this Lease unless the context otherwise requires.

            26.3 The Section headings in this Lease and the Table of Contents
prefixed to this Lease are inserted only as a matter of convenience and
reference and are not to be given any effect whatsoever in construing this
Lease.

            26.4 All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the person or persons or entity or entities in question may require.

                                       43
<PAGE>

        27. FORCE MAJEURE

            27.0 Whenever the performance of any obligation of either party
hereunder shall be delayed, hindered or prevented due to unavoidable delays, the
time for performance of such obligation, unless other provision is expressly
made therefor in this Lease, shall be extended, subject to and limited by the
following conditions:

                27.0.1 The extension shall be for no longer a period than the
delay actually so occasioned;

                27.0.2 The party delayed shall promptly notify the other party
of the cessation of such unavoidable delay and of the extent of the delay which
the party delayed claims was occasioned thereby;

                27.0.3 No statement of fact contained in any such notice shall
be binding on the party receiving such notice; and

                27.0.4 In no event shall lack of funds be deemed a matter beyond
either party's control.

                27.0.5 Interruptions of any service to be provided by Landlord
under this Lease or under the Cost Sharing Arrangement, or of any utility or
other service to the Quinton Demised Premises or the Property, in whole or in
part caused by any unavoidable delay, inability of Landlord to obtain
electricity, fuel, water, other utilities or supplies, or by the act or default
of Tenant or any person other than Landlord, or otherwise by any other cause or
causes beyond the reasonable control of Landlord, shall not be deemed an
eviction or disturbance of Tenant's use and possession of the Quinton Demised
Premises, the Common Area, or any part thereof, or render Landlord liable for
damages, or give rise to any offset, set off, abatement, or reduction in any
rent, additional rent, or other amount payable by Tenant under this Lease, or
otherwise or relieve Tenant from performance of Tenant's obligations under this
Lease.

        28. BROKERAGE

            28.0 Landlord and Tenant each warrant and represent to the other
that no broker or like agent represented the warranting and representing party
in connection with the negotiation and execution of this Lease, and such party
is not aware of any broker or like agent that could or may be entitled to make a
claim for a commission in connection with the negotiation and execution of this
Lease. Each party (the "breaching party") hereto agrees to indemnify, defend and
hold the other party (the "non-breaching party") harmless with respect to any
judgments, damages, legal fees, court costs and any and all liabilities of any
nature whatsoever incurred by the non-breaching party arising from a breach of
the applicable warranty and representation by the breaching party. The
provisions of the foregoing representation and indemnity shall survive the
expiration or termination of this Lease.

                                       44
<PAGE>

        29. MISCELLANEOUS PROVISIONS

            29.1 This Lease sets forth all the covenants, promises, agreements,
conditions and understandings between Landlord and Tenant concerning the
Premises. There are no oral agreements or understandings between the parties
hereto affecting this Lease except for the Bothell Transition Agreement and the
Cost Sharing Arrangement, and this Lease supersedes and cancels any and all
previous negotiations, arrangements, agreements and understandings, if any,
between the parties hereto with respect to the subject matters hereof, except
for the Bothell Transition Agreement and the Cost Sharing Arrangement, and none
thereof shall be used to interpret or construe this Lease. Except as otherwise
herein expressly provided, no subsequent alteration, amendment, change, waiver
or addition to or of any provision of this Lease, nor any surrender of the Term,
shall be binding upon Landlord or Tenant unless reduced to writing and signed by
the party against whom the same is charged or such party's successors in
interest.

            29.2 This Lease shall not be recorded by either party without the
consent of the other.

            29.3 This Lease shall be governed in all respects by the laws of the
State of Washington.

            29.4 This Lease may be executed in several counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.

            29.5 All obligations of Tenant which shall not have been performed
prior to the end of the Term or which by their nature involve performance, in
any particular, after the end of the Term, or which cannot be ascertained to
have been fully performed until after the end of the Term, shall survive the
expiration or termination of the Term.

            29.6 If any term, covenant, condition, or provision of this Lease or
the application thereof to any person or circumstance shall, at any time or to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term, covenant, condition, and provision of this Lease shall
be valid and be enforced to the fullest extent permitted by law.

            29.7 Anything in this Lease to the contrary notwithstanding in the
event that (a) any act or omission of Tenant shall require the consent or
approval of Landlord pursuant to this Lease, and (b) this Lease provides that
Landlord shall not unreasonably withhold such consent or approval, and (c)
Tenant shall claim that Landlord has unreasonably withheld such consent or
approval, then the sole recourse of Tenant upon the inability of the parties to
agree shall be to being an appropriate action in a court of competent
jurisdiction against Landlord solely to issue a determination of whether the
withholding of such consent or approval by Landlord is "reasonable" or
"unreasonable", and Tenant shall not be entitled to any damages or other remedy
other than

                                       45
<PAGE>

specific performance for the issuance by Landlord of such consent or approval if
such court of competent jurisdiction shall determine that such withholding of
consent was unreasonable; provided, however, Tenant shall be entitled to pursue
all remedies at law or in equity if it shall be determined by a court of
competent jurisdiction (beyond all right of appeal) that in withholding its
consent Landlord acted maliciously and in bad faith (for which Tenant shall have
the burden of proof).

            29.8 To the maximum extent provided by law, Landlord shall have a
lien on all improvements, fixtures, materials and other personal property of
Tenant which at any time is located at or affixed to any part or portion of the
Property.

        30. COMPLIANCE WITH ENVIRONMENTAL LAWS

            30.1 Tenant shall, at its sole cost and expense, comply with the
requirements of every federal, state, county, municipal or other governmental
law, ordinance, rule, regulation, requirement and/or directive pertaining to the
environment (an "Environmental Law" or "Environmental Laws"), including, but not
limited to, the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 et seq.), and the Comprehensive Environmental Response Compensation
and Liability Act of 1980 (42 U.S. Section 9601 et seq.) affecting, binding
upon, or respecting the Quinton Demised Premises and/or the use and occupancy
thereof. In this regard, Tenant shall, at its sole cost and expense, make all
submissions to, provide all information to, and comply with all requirements of
any governmental authority respecting the Quinton Demised Premises, or the use
or occupancy thereof. Should any governmental authority determine that action is
necessary to cleanup, remove and/or eliminate any spill or discharges by Tenant
(or by any of Tenant's agents, servants, employees, invitees, guests, subtenants
(if any) licensees, or contractors) of Hazardous Substances (hereinafter
defined) in or about the Quinton Demised Premises or the Common Area (except to
the extent such discharge or spill in the Common Area is caused by the
particular act of any third party tenant of any other space at the Property), or
any other spill or discharges for which Tenant is responsible pursuant to this
Lease, and/or that a cleanup plan must be prepared and submitted, then, in that
event, Tenant shall, at its sole cost and expense, take any and all action
required and carry out any and all approved plans and complete, at Tenant's sole
cost and expense, all cleanup, removal and remediation required. As used herein,
"Hazardous Substances" means any substance that is toxic, ignitible, reactive,
or corrosive, or that is regulated by any local government, the State of
Washington or the United States Government, any and all material or substances
that are defined as "hazardous waste," "extremely hazardous waste," or a
"hazardous substance" pursuant to state, federal or local governmental law, any
asbestos, polychlorobiphinyls (PCBs) and petroleum products or by-products.
Tenant's obligations pursuant to this Section 30.1 shall arise whenever required
by any appropriate governmental agency. At the expiration or earlier termination
of this Lease Tenant, at Tenant's expense, immediately shall (i) remove or cause
to be removed all Hazardous Substances located at, in, on, under or about the
Quinton Demised Premises (and/or any other portions of the Property, except to
the extent that such Hazardous Substances have been discharged at, in, on, under
or about portions of the Property other than the Quinton Demised Premises by any
other tenant, and (ii) clean up and remediate all areas of the Quinton Demised
Premises (and/or any other portions of the Property, except to the extent that
such Hazardous Substances have been discharged at, in, on, under

                                       46
<PAGE>

or about portions of the Property other than the Quinton Demised Premises by any
other tenant, as required under all Environmental Laws, and (iii) remove,
remediate and clean up all Hazardous Substances at, in, on, under or about the
Quinton Demised Premises (and/or at, in, on, under or about any other portions
of the Property, except to the extent that such Hazardous Substances have been
discharged at, in, on, under or about portions of the Property other than the
Quinton Demised Premises by any other tenant.

            30.2 For purposes of this provision, the term "Environmental
Documents" shall mean all environmental documentation concerning the Quinton
Demised Premises, the Property or its environs in the possession or under the
control of Tenant, including, without limitation, all drafts and final versions
of all sampling plans, cleanup plans, preliminary assessment plans and reports,
site investigation plans and reports, remedial investigation plans and reports,
remedial action plans and reports or the equivalent, sampling results, sampling
reports, data, diagrams, charts, maps, analyses, conclusions, quality
assurance/quality control documentation, correspondence to or from the
Washington Department of Environmental Protection ("WDEP") or any other
municipal, county, state or federal governmental authority, submissions to the
WDEP or any municipal, county, state or federal governmental authority and
directives, orders, approvals and disapprovals issued by the WDEP or any other
municipal, county, state or federal governmental authority. During the term of
the Lease and subsequently promptly upon receipt by Tenant or Tenant's
representatives, Tenant shall deliver to Landlord all Environmental Documents
concerning the Property, or any portion thereof, including the Quinton Demised
Premises, or generated by or on behalf of Tenant with respect to the Property or
any portion thereof, whether currently or hereafter existing.

            30.3 Tenant shall notify Landlord in advance of all meetings
scheduled between Tenant or Tenant's representatives and the WDEP or any other
authority, and Landlord and Landlord's representatives shall have the right,
without the obligation, to attend and participate in all such meetings, at
Landlord's sole expense.

            30.4 Tenant shall at all times indemnify, defend (with counsel
selected by Tenant and reasonably satisfactory to Landlord) and hold harmless
Landlord and Landlord's employees, officers, directors, shareholders,
affiliates, partners, agents, professionals and consultants (collectively, the
"Indemnitees") against and from any and all claims, suits, liabilities, actions,
debts, damages, costs, losses, obligations, judgments, charges and expenses,
including sums paid in settlement of claims, of any nature whatsoever suffered
or incurred by any of the Indemnitees whether based on Tenant's operation of the
Quinton Demised Premises, Tenant's negligence, Tenant's wilful misconduct or on
other acts or omissions of Tenant after the effective time of the Closing, with
respect to:

                30.4.1 The actual or suspected presence or discharge by Tenant
(or by any of Tenant's agents, servants, employees, invitees, guests, subtenants
(if any) licensees, or contractors), on or after the Closing Date, of Hazardous
Substances or the threat, on or after the Closing Date, of a discharge by Tenant
(or by any of Tenant's agents, servants, employees, invitees, guests, subtenants
(if any) licensees, or contractors) of any Hazardous Substances in, on, under,

                                       47
<PAGE>

about, or affecting the Property, whether or not the same originates or emanates
from the Quinton Demised Premises;

                30.4.2 The cost of removal or remedial action incurred by any
governmental authority, any response cost incurred by any other person or
damages from injury to, destruction of, or loss of natural resources, including
reasonable cost of assessing such injury, destruction or loss, incurred pursuant
to Environmental Laws;

                30.4.3 Liability for personal injury or property damage arising
under any statutory or common law tort theory, including, without limitation,
damages assessed with the maintenance of a public or private nuisance or for the
carrying on of an abnormally dangerous activity; and/or

                30.4.4 Any other environmental matter, occurring on or after the
Closing Date, or otherwise relating to the period commencing with the Closing
Date, and affecting (i) the Quinton Demised Premises or (ii) otherwise affecting
the Property (to the extent such environmental matter affecting the Property
other than the Quinton Demised Premises arises by the act or wrongful omission
of Tenant, or any of Tenant's agents, servants, employees, invitees, guests,
subtenants (if any) licensees, or contractors) within the jurisdiction of any
other federal agency, or any state or local agency or political subdivision or
any court, administrative panel or tribunal.

Tenant's obligations under this Section 30 shall arise upon the discovery of, or
the threat or suspected presence of, any Hazardous Substance, whether or not any
other federal agency or state or local or agency or political subdivision or any
court, administrative panel or tribunal has taken or contemplates taking action
in connection with the presence of any Hazardous Substances.

            30.5 Tenant shall not, directly or indirectly, make any use of the
Quinton Demised Premises, or the Property which may be prohibited by any
Environmental Laws, which may be dangerous to person or property, or which may
constitute or create a nuisance, or which may fail or comply with or violate the
provisions or conditions of any permit held by Landlord or Tenant with respect
to the Quinton Demised Premises or the Property, including, without limitation,
any such permit governing the use, contamination, pollution or conservation of
air, water or land or the protection of the environment or of the use, storage,
treatment or disposal of toxic or hazardous substances ("Environmental
Permits"), or which may jeopardize the continuation or renewal of any such
Environmental Permit, or which may be deemed extra-hazardous in any respect, or
which may jeopardize any insurance coverage or require additional insurance
coverage for Landlord or any other tenant of the Property.

            30.6 Intentionally Omitted.

            30.7 Tenant shall regularly monitor its compliance with all
applicable Environmental Laws, Environmental Permits and Environmental Plans;
such monitoring shall be in accordance with all applicable Environmental Laws,
Environmental Permits and Environmental Plans

                                       48
<PAGE>

and with Tenant's established policies for such monitoring. Tenant shall, when
requested by Landlord at reasonable intervals, provide to Landlord copies of the
reports showing such monitoring and compliance and such other information and
documentation respecting such monitoring and compliance as Landlord reasonably
may request from time to time.

            30.8 Tenant shall promptly provide Landlord, as soon as received by
Tenant, with copies of all of Tenant's Environmental Permits and of any official
warnings, citations or charges that Tenant, the Quinton Demised Premises or the
Property has or may have failed to comply with or has or may have violated any
Environmental Law or any Environmental Permit. Tenant shall promptly supply
Landlord with any notices, correspondence and submissions made by Tenant to
WDEP, the United States Environmental Protection Agency, OSHA or any other
local, state or federal authority which requires submission of any information
concerning Environmental Laws or Environmental Permits, or Hazardous Substances
or other environmental matters. Tenant shall also promptly supply Landlord with
all documentation, notices and correspondence delivered to Tenant by any such
authority with respect to Environmental Laws, Environmental Permits,
environmental matters or Hazardous Substances or other environmental matters.

            30.9 This Section 30 shall survive the expiration or earlier
termination of this Lease. Tenant's failure to abide by the terms of this
Section 30 shall be restrainable by injunction, and shall constitute an Event of
Default under the Lease.

        31. INTENTIONALLY OMITTED

        32. INTENTIONALLY OMITTED

        33. COST SHARING ARRANGEMENT

            33.1 The Cost Sharing Arrangement, as amended in connection with the
execution of this Lease and as may be amended thereafter, shall remain in full
force and effect. However, from and after July 1, 1998 ("the Landlord Provided
Quinton Services Commencement Date"), Landlord shall undertake the
responsibility to provide and shall provide the Quinton Services, as defined in
the Cost Sharing Agreement, to the Property ("Landlord Provided Quinton
Services") in accordance with the Cost Sharing Arrangement and Landlord shall
also provide the Cafeteria Services provided in this Lease. The Landlord
Provided Quinton Services may be performed by Landlord (either directly, or
through one or more affiliates, contractors or licensees). During the period
from the Commencement Date to the Landlord Provided Quinton Services
Commencement Date ("Transition Period"), Tenant shall continue to provide the
Quinton Services to the Property as required under and in accordance with the
Cost Sharing Arrangement. Within thirty (30) days after the Landlord Provided
Quinton Services Commencement Date, Tenant shall submit to Landlord an invoice
setting forth in reasonable detail the nature of the Quinton Services provided
by Tenant to the Property and the costs and expenses therefore during the
Transition Period. Landlord shall make payment in full to Tenant of all
reasonable costs and expenses within thirty (30) days of receipt of such
invoice. Interest shall accrue (from the due date) at the rate of 1 1/2% per
month for any amount

                                       49
<PAGE>

not paid when due. During the Transition Period, Landlord and Tenant shall make
good faith efforts to study the Quinton Services and to confirm that all of the
line items that are a part of the Quinton Services are general expenses of the
Property, it being the intent of the parties that such services are to be
general property services and not specific services for the business of any
tenant.

            Tenant shall fully and freely cooperate with Landlord in the
providing of the Landlord-Provided Quinton Services, and Landlord (in addition
to all other rights under this Lease) shall have such rights of access to the
Quinton Demised Premises and the Original Surrender Space as are reasonably
necessary or convenient in connection with providing the Landlord-Provided
Quinton Services (and (i) failure by Tenant promptly to provide such cooperation
and/or access for two (2) days after notice by Landlord to Tenant of a failure
or (ii) more than three instances in any twelve (12) month period of failure by
Tenant promptly to provide such cooperation or access thereof shall be an Event
of Default). Landlord and Tenant agree that the costs of providing the Quinton
Services are general expenses of the Property and therefore are includable in
Operating Expenses, of which Tenant shall pay its proportionate share (but
nothing herein shall limit the right of Landlord to charge Tenant and its
employees for Cafeteria Services at such prices as Landlord shall determine, as
otherwise provided in this Lease) (but Landlord shall not have the right to
duplicate charges to Tenant for costs of providing the Landlord Provided Quinton
Services to the extent such charges are otherwise included in Operating
Expenses). Anything herein to the contrary notwithstanding, (i) upon any Event
of Default, Landlord, at its option, may cease to provide to Tenant any or all
of the Landlord-Provided Quinton Services, and (ii) Landlord, at its option,
shall have the right (from time to time) to collect directly from SWD all
amounts otherwise payable by SWD to Quinton under the Cost Sharing Arrangement,
or to collect for such services amounts due from Quinton under this Lease.

     The provisions of Section 17.1 of this Lease and the provisions of Section
27.01 and 27.05 of this Lease shall be applicable to the providing by Landlord
of the Landlord-Provided Quinton Services (together with the other provisions
hereto, notwithstanding that the parties may enter into a separate or side
agreement respecting the providing by Landlord of the Landlord-Provided Quinton
Services).

     Landlord shall indemnify, hold harmless and defend Tenant and its
directors, officers, employees, advisors, Affiliates, agents and shareholders
from and against any and all liabilities, damages, deficiencies, losses,
judgments, assessments, costs or expenses, including reasonable attorney's fees
and the costs of investigating and defending against lawsuits, complaints,
actions or other pending or threatened litigation (together, "Losses") arising
from Landlord's failure to perform the Landlord-Provided Quinton Services in
accordance with the Cost Sharing Arrangement, provided, however, that Landlord
shall not be liable for any incidental, consequential or special damages
incurred by Tenant except to the extent arising out of or resulting from
Landlord's gross negligence or willful misconduct in providing the services set
forth in the Cost Sharing Arrangement.

     Tenant shall indemnify, hold harmless and defend Landlord and its
directors, officers, employees, advisors, Affiliates, agents and shareholders
from and against any and all Losses arising

                                       50
<PAGE>

out of, based upon or resulting from Tenant's gross negligence or willful
misconduct relating to its providing the Quinton Services during the Transition
Period, except to the extent Landlord indemnifies Tenant hereunder.

     The procedures for indemnification under this provision shall be made
pursuant to the procedures for indemnification set forth in Section 11.2 of the
Purchase Agreement.

        34. SECURITY

            34.1 Tenant, at Tenant's cost and expense, shall be obligated to
provide adequate and proper security to the Quinton Demised Premises, and to
properly regulate access to same without thereby adversely affecting the use and
enjoyment of the Property by Landlord or by other tenants or occupants.

        35. ACCESS/CAFETERIA

            35.0 Tenant agrees that SWD and every other tenant or occupant of
the Buildings (as same may change from time to time), and their respective
employees, invitees, guests, contractors, subtenants (if any) and licensees, at
all times shall have reasonable, non-discriminatory access to and use of Common
Area, and in, upon, over, across and through the Common Area, in common with
Tenant, and to the same extent enjoyed by Tenant (except that use of parking
areas shall be proportionate to the aggregate number of square feet in the
Buildings leased by Tenant and such other tenants and occupants, respectively),
for ingress to and egress from the Buildings, and access to the premises demised
by such tenant or occupant and to the Common Area, and for use of the Common
Area.

            35.1 Tenant agrees that SWD and every other tenant or occupant of
the Buildings (from time to time), and their respective employees, invitees,
guests, contractors, subtenants (if any) and licensees, at ail times shall have
reasonable, non-discriminatory access in, upon, over, across and through the
Access Areas as shall be reasonably necessary and appropriate for use, access
to, ingress from, and enjoyment or occupancy of all portions of the SWD Demised
Premises and/or the Common Area, and that Tenant (i) shall not interfere with,
impair or obstruct (in any material manner) such access, and (ii) shall
cooperate in a reasonable manner to provide such access.

            35.2 Tenant agrees that Landlord, from time to time, may promulgate
and/or amend reasonable, nondiscriminatory rules and regulations for the use of
Common Areas, and/or for access as provided in Section 35.1, and that upon
receiving copies of such rules and regulations (from time to time) Tenant shall
abide by same and cause its employees, invitees, guests, contractors, subtenants
(if any) and licensees to abide by same.

            35.3 (a) Landlord and Tenant acknowledge that under the Cost Sharing
Arrangement Tenant was obligated to operate a Cafeteria in accordance with
certain terms and

                                       51
<PAGE>

provisions (the "Cafeteria Services," as defined in the Cost Sharing
Arrangement). Landlord and Tenant further acknowledge that commencing as of the
Commencement Date Tenant shall not be required nor permitted to operate the
Cafeteria.

                (b) Commencing as of the Commencement Date and during the Term,
Landlord shall operate a Cafeteria at the Property, on and subject to the
following terms and conditions. Tenant, without charge to Landlord, shall
cooperate with reasonable requests by Landlord to allow Landlord access to the
Cafeteria and Landlord shall not interfere with the Landlord's provision of such
services.

                    (i) Landlord shall provide the Cafeteria Services to SWD in
accordance with the requirements of the Cost Sharing Arrangement (or in
accordance with such other standards or requirements as Landlord and SWD shall
agree, provided that Tenant shall not incur any expense, liability or
obligations as a result of a the departure from the requirements of the Cost
Sharing Agreement).

                    (ii) Landlord shall have no obligation to Tenant to provide
Cafeteria Services to Tenant in accordance with the requirements of the Cost
Sharing Agreement, notwithstanding that Landlord may provide the Cafeteria
Services to SWD and/or other persons in accordance with the requirements of the
Cost Sharing Agreement (including prices set forth therein).

                    (iii) Landlord shall provide to Tenant cafeteria services
("Tenant's Cafe Services"), as follows:

                          (A) Landlord shall have the right, from time to time,
to contact or license the providing of Tenant's Cafe Services, with such
contractors and/or licensees, and on such terms and conditions, as shall be
satisfactory to Landlord.

                          (B) Landlord shall operate the Cafeteria on the
Property at such location, during such operating hours (but not including
holidays or Saturdays, Sundays or other non-business days), serving such menu,
and otherwise in accordance with such reasonable standards, as Landlord, from
time to time, shall elect.

                          (C) Landlord (and its contractors and licensees) shall
have the right to set and change prices for items served at the Cafeteria so
that, under both generally accepted accounting principals and cash accounting,
Landlord (and/or such contractor or licensee) shall not have to subsidize the
operations of the Tenant's Cafe Services. In no event shall Landlord be
obligated to provide Tenant's Cafe Services if so doing will or would result in
a subsidy by Landlord (under either generally accepted accounting principals or
cash accounting) for any period; and if Landlord reasonably anticipates that
providing Tenant's Cafe Services will result in such a subsidy by Landlord, on
notice to Tenant, may immediately cease to provide Tenant's Cafe Services or any
other cafeteria services to Tenant; and Landlord shall have no liability to
Tenant as a result

                                       52
<PAGE>

thereof, nor shall Tenant have any rights or remedies as against Landlord, this
Lease, or anyone else, as a result thereof.

        36. NET LEASE

            36.0 Landlord and Tenant agree that except as otherwise expressly
provided in this Lease, (i) this is a triple net Lease, (ii) Landlord shall not
be required to provide any services or take any action in connection with the
Quinton Demised Premises or the Property, and (iii) if, for any reason
whatsoever, Tenant's use or occupancy of enjoyment of the Quinton Demised
Premises shall be disturbed, prevented or interfered with for any reason
whatsoever (other than Landlord's wilful and intentional violation of the terms
and provisions of this Lease) Tenant shall continue to pay the rent and
additional rent without abatement, suspension or reduction.

        37. INCORPORATION OF SHERWOOD DEMISED PREMISES

            37.1 In the event that (for any reason whatsoever) the SWD Lease
shall expire, terminate or be terminated prior to the expiration or termination
of this Lease (in accordance with the provisions of this Lease), as the term
hereof may be extended or renewed, then from and after the later to occur of (i)
date that the SWD Lease shall have expired, terminated or been terminated and
(ii) the date thirty (30) days after Landlord shall give notice to Tenant (the
"SWD Notice") that the SWD Lease shall have expired, terminated or been
terminated, or shall expire, terminate or be terminated (the later of such
dates, the "SWD Incorporation Date"), and provided that this Lease is then
otherwise in force and effect, those portions of the SWD Demised Premises
located within the Production Building only, and as shown on Exhibit G attached
hereto and made a part hereof (the "SWD Incorporation Premises") automatically
shall be and become part of the Quinton Demised Premises, subject to all of the
terms and provisions of this Lease (including, without limitation, rent and
additional rent due and payable in respect of the SWD Incorporation Premises,
based on same being production or warehouse space), and for the term (as same
may be renewed or extended as provided in this Lease) of this Lease remaining as
of the SWD Incorporation Date. Effective as of the SWD Incorporation Date:

                (a) Landlord leases to Tenant, and Tenant rents from Landlord,
the SWD Incorporation Premises;

                (b) the basic annual rental otherwise payable by Tenant under
this Lease shall be increased by an amount equal to the sum of the (i) the
number of leaseable square feet of SWD Incorporation Premises (as shown on
Exhibit G) which is production space, multiplied by the net rent per square foot
of such type of space shown on Exhibit D (as same may change as provided in this
Lease) and/or the number of leaseable square feet of SWD Incorporation Premises
(as shown on Exhibit G) which is warehouse space, multiplied by the net rent per
square foot of such type of space shown on Exhibit D (as same may change as
provided in this Lease).

                (c) Tenant's Proportionate Share shall be increased by a
fraction (expressed as a percentage), the numerator of which shall be the number
of leaseable square feet of the

                                       53
<PAGE>

SWD Incorporation Premises, and the denominator of which shall be the total
number of leaseable square feet in the Buildings (as above specified);

                (d) provided that the SWD Incorporation Premises is in
reasonably good repair and SWD has performed all of its obligations with respect
to the return and surrender thereof, Tenant shall accept the SWD Incorporation
Premises in its "AS IS" condition as of SWD Incorporation Date, without
representation or warranty by Landlord; if the SWD Incorporation Premises (or a
portion thereof) is not in reasonably good repair, Landlord, at Landlord's
expense, shall put the SWD Incorporation Premises (or such portion thereof) into
reasonably good repair before same shall become part of the Quinton Demised
Premises, and the date the SWD Incorporation Premises (or the applicable portion
thereof) shall be incorporated into the Quinton Demised Premises shall be
delayed until five (5) days after the date that (i) Landlord has put same into
reasonably good repair, and (ii) given notice thereof to Tenant. Cosmetic
imperfections and/or the need for repainting shall not be a basis for Tenant to
claim that the SWD Incorporation Premises is not in reasonably good repair.

                (e) from and after the SWD Incorporation Date, all references in
this Lease to the Quinton Demised Premises shall be deemed to included the SWD
Incorporation Premises; and

                (f) except as may be otherwise expressly provided herein, all of
the terms, provisions and conditions of this Lease shall apply to the SWD
Incorporation Premises with the same force and effect as if it were initially
leased to Tenant as part of the Quinton Demised Premises.

            37.2 Now the foregoing provisions of this Article 37, if on the SWD
Incorporation Date Tenant is in default in the performance of any of its
obligations or agreements under this Lease or the Cost Sharing Arrangement, then
Landlord, at any time prior to the date fifteen (15) days after the SWD
Incorporation Date, may give notice to Tenant specifying that the SWD
Incorporation Premises shall not become part of the Quinton Demised Premises, in
which event the SWD Incorporation Premises shall not become part of the Quinton
Demised Premises, Tenant shall vacate same immediately (if Tenant has taken
occupancy thereof), and this Lease otherwise shall remain in effect in
accordance with its terms and provisions (including, without limitation, the
right of Landlord, at any time or times, to exercise all or any of its rights
and/or remedies in connection with such default by Tenant).

            37.3 Subject to the provisions of Section 37.5, if the SWD
Incorporation Premises shall become part of the Quinton Demised Premises as set
forth in this Article, then Tenant, within ten (10) days after request therefor
by Landlord, and without requiring payment of any consideration therefor, shall
execute, acknowledge and deliver to Landlord such instrument or instruments as
Landlord reasonably shall request, in form and substance reasonably satisfactory
to Landlord, confirming the incorporation of the SWD Incorporation Premises as
part of the Quinton Demised Premises, and the increase in the rent and
additional rent payable under this Lease by reason thereof, but failure or
omission by Tenant to so execute, acknowledge and deliver to Landlord such
instrument or instruments shall not limit the obligations of Tenant in respect
of the SWD Incorporation Premises otherwise provided herein.

                                       54
<PAGE>

            37.4 If Landlord shall be prevented from delivering possession of
the SWD Incorporation Premises to Tenant due to a holding over or retention of
possession by any tenant or occupant thereof, or any subtenant, successor or
assign or such tenant, or for any other reason not within the reasonable control
of Landlord, Landlord shall not be subject to any liability for failure to give
possession to Tenant, nor shall the validity of this Lease be impaired as a
result thereof, nor shall such failure give rise to any rights or remedies on
the part of Tenant, but Tenant shall take possession of such space when, as and
if Landlord can deliver such space to Tenant; and Tenant's obligation to pay
rent and additional rent in connection with such space shall commence when as
and if Landlord so delivers all or any portion of such space to Tenant.

            37.5 In the event that any SWD Incorporation Premises shall be
incorporated into the Quinton Demised Premises as provided in this Article, then
Tenant, by notice to Landlord given not later than fifteen (15) days after
Landlord has given to Tenant the SWD Notice respecting such SWD Incorporation
Premises (WITH TIME OF THE ESSENCE AS AGAINST TENANT), may elect to surrender to
Landlord, as of the SWD Incorporation Date, such portions of the Quinton Demised
Premises (the "Surrender Premises") as shall be no greater than one hundred
fifteen percent (115%) of the rentable square footage of the SWD Incorporation
Premises which are, pursuant to this Article, incorporated into the Quinton
Demised Premises, on the following terms and provisions:

                (a) the rentable square footage of production, warehouse and
barn space, respectively, of the Surrender Premises shall not exceed one hundred
fifteen percent (115%) of the rentable square footage of production, warehouse
and barn space, respectively, of the SWD Incorporation Premises incorporated
into the Quinton Demised Premises, unless Landlord, in its sole discretion,
otherwise shall expressly agree in writing;

                (b) the Surrender Premises shall be surrendered by Tenant, as of
the SWD Incorporation Date, vacant, broom clean, and otherwise in the same
condition and subject to the same terms and provisions as, pursuant to this
Lease, otherwise apply to the Quinton Demised Premises upon the expiration of
the term of this Lease;

                (c) Tenant shall have no further rights to use, occupy, or
possess any of the Surrender Premises;

                (d) each parcel of the Surrender Premises must be of such size,
location and configuration so that same may be lawfully and safely occupied and
utilized for the uses permitted under this Lease, and may reasonably be marketed
for lease to a third party;

                (e) the Surrender Premises must include only parcels of space in
the Buildings each of which is of such size, location, quality and configuration
as to be (without requiring any material work, alteration or improvements)
reasonably leasable for use and occupancy by a third party, independent of the
balance of the Quinton Demised Premises, for rents and on terms which are not
less favorable to Landlord than prevailing rents and terms for parcels of space
(of a size and configuration which is commercially reasonable) intended for
similar use in the respective Building in which each such

                                       55
<PAGE>

area of the Surrender Premises is located; and the location and configuration of
each parcel of the Surrender Premises must (without requiring any material work,
alteration or improvements) have separate and direct access to corridors which
are Common Area providing reasonable ingress to and egress from the Building in
which it is located and Landlord shall be responsible for and shall pay within
thirty (30) days after submission by Tenant to Landlord of invoices, all
reasonable costs and expenses incurred by Tenant (a) in performing any work,
alteration or improvements to the remaining Quinton Demised to construct
demising walls and installation in order to demise off the Premises and (b) for
moving expense to move furniture and equipment from the Surrender Premises to
the remaining Quinton Demised Premises.

                (f) as of the date of surrender by Tenant to Landlord of the
Surrender Premises in accordance herewith, the rent and additional rent
respecting such Surrender Premises shall be adjusted between Tenant and
Landlord, and the basic annual rental otherwise payable by Tenant under this
Lease shall be decreased by an amount equal to the sum of the number of leasable
square feet of Surrender Premises which is production space, multiplied by the
net rent per square foot of such type of space shown on Exhibit D (as same may
change as provided in this Lease), and the number of leasable square feet of
Surrender Premises which is warehouse space, multiplied by the net rent per
square foot of such type of space shown on Exhibit D (as same may change as
provided in this Lease), and the number of leasable square feet of Surrender
Premises which is barn space, multiplied by the net rent per square foot of such
type of space shown on Exhibit D (as same may change as provided in this Lease);
and

                (g) as of the date of surrender by Tenant to Landlord of the
Surrender Premises in accordance herewith Tenant's Proportionate Share shall be
decreased by a fraction (expressed as a percentage), the numerator of which
shall be the number of leasable square feet of the Surrender Premises so
surrendered by Tenant to Landlord, and the denominator of which shall be the
total number of leasable square feet in the Buildings (as above specified);

                (h) from and after the date of surrender by Tenant to Landlord
of the Surrender Premises in accordance herewith, all references in this Lease
to the Quinton Demised Premises shall be deemed to exclude the Surrender
Premises;

                (i) except as may be otherwise expressly provided herein, this
Lease shall remain unamended and in full force and effect;

                (j) Tenant, within ten (10) days after request therefor by
Landlord, and without requiring payment of any consideration therefor, shall
execute, acknowledge and deliver to Landlord such instrument or instruments as
Landlord reasonably shall request, in form and substance reasonably satisfactory
to Landlord, confirming the surrender of the Surrender Premises by Tenant to
Landlord, and the change in the rent and additional rent payable under this
Lease by reason thereof, but failure or omission by Tenant to shall execute,
acknowledge and deliver to Landlord such instrument or instruments shall not
limit the obligations and agreements of Tenant in respect thereof as otherwise
provided herein;

                                       56
<PAGE>

                (k) failure or omission by Tenant to elect to surrender Premises
to Landlord as and when provided herein irrevocably shall be deemed a waiver by
Tenant of its right to surrender Premises.

                (l) During the six months period prior to the expiration of the
term of the SWD Lease, Landlord and Tenant shall meet and determine in good
faith, the location and configuration of the Surrender Premises so that same
meet the standards set forth in 37.5(e) hereof.

        38. RIGHT OF FIRST REFUSAL

     Provided that no Event of Default hereunder shall have occurred, beginning
on the date hereof, if all or any portion of the RFR Premises (as hereinafter
defined) shall become available for leasing and if Landlord shall seek to lease
a portion of the RFR Premises to a Person (the "Offeror") other than Tenant and
is in receipt of a written offer (the "Offer") from the Offeror to lease such
portion of the RFR Premises to the Offeror, which Offer Landlord desires to
accept, Landlord, before accepting the Offer, shall send to Tenant written
notice (the "Offer Notice") of the terms of the Offer. Tenant, solely by notice
in writing to Landlord received by Landlord within twelve (12) calendar days
after receipt of the Offer Notice by Tenant, may agree to lease such portion of
the RFR Premises (the "Right of First Refusal"), and if Tenant makes such
agreement, Landlord shall lease and Tenant shall take such portion of the RFR
Premises (which portion of the RFR Premises shall be deemed a portion of the
Quinton Demised Premises) upon all the terms and conditions set forth in the
Offer Notice (including, without limitation, all terms and conditions set forth
in the Offer Notice with respect to the Rent, Landlord's Work and the duration
of the Lease Term with respect to such portion of the RFR Premises). If Tenant
for any reason fails to duly and timely exercise the Right of First Refusal,
Landlord shall be free to lease such portion of the RFR Premises to the Offeror
on terms no more favorable than those specified in the Offer Notice. If Landlord
shall not enter into a lease with the Offeror on terms no more favorable than
those specified in the Offer Notice, or upon the expiration or termination of
the lease with Offeror if Landlord shall so enter into a lease, Tenant's Right
of First Refusal with respect to such portion of the RFR Premises shall be
reinstated. Landlord further agrees that if Landlord shall enter into a lease
with Offeror as permitted hereunder, Tenant's Right of First Refusal shall be
null and void as to the space leased to such Offeror. For purposes of this
provision, "RFR Premises" shall mean any rentable space on the third floor of
the Administrative Building, as further described on Exhibit H.

THE REST OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK

                                       57
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Lease as of the
day and year first above written.

                                              LANDLORD

WITNESS:                                      AHP SUBSIDIARY HOLDING
                                              CORPORATION

                                              a Delaware corporation

         /s/ Bradford A. Lewin                By:      /s/ Gerald A. Jibilian
         --------------------------------              -------------------------
Name:    Bradford A. Lewin                    Name:    Gerald A. Jibilian
                                                       -------------------------
                                              Title:   Vice President
                                                       -------------------------

WITNESS:                                      TENANT

                                              QUINTON INSTRUMENT COMPANY,
                                              a Washington corporation

         /s/ Bradford A. Lewin                By:      /s/ Thomas M. Nee
         --------------------------------              -------------------------
Name:    Bradford A. Lewin                    Name:    Thomas M. Nee
                                                       -------------------------
                                              Title:   Vice President
                                                       -------------------------

                                              ATTEST:

         /s/ Garrett L. S.                    By:      /s/ Timothy T. Slater
         --------------------------------              -------------------------
Name:    Garrett L. S.                        Name:    Timothy T. Slater
                                                       -------------------------
                                              Title:   Assistant Secretary
                                                       -------------------------<PAGE>
                                                                    EXHIBIT 10.8

                            FIRST AMENDMENT TO LEASE

     This First Amendment to Lease ("First Amendment") made as of 31st day of
August 1998 between AHP SUBSIDIARY HOLDING CORPORATION, a Delaware corporation
("Landlord") and QUINTON INSTRUMENT COMPANY, a Washington corporation
("Tenant").

                                   WITNESSETH

     WHEREAS, Landlord and Tenant entered into a certain Lease ("Lease") made as
of June 1, 1998 pursuant to which Tenant leased from Landlord certain premises
designated in the Lease as the "Quinton Demised Premises" located in various
buildings on certain land in Bothell, Washington;

     WHEREAS, Tenant is desirous of leasing, effective as of January 1, 1999,
certain additional space on the first and second floors of the Administrative
Building on the land owned by Landlord, as shown on the floor plans of the first
and second floors of the Administrative Building labelled Exhibit B-1 and B-2
attached hereto as Schedule 1 ("Additional Space");

     WHEREAS, Landlord is willing to lease the Additional Space to Tenant
effective January 1, 1999 on the terms and conditions as set forth herein.

     NOW THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, Landlord and Tenant agree as follows:

     1.   Any capitalized terms used in this First Amendment shall have the
meanings ascribed thereto in the Lease unless otherwise defined or modified
herein.

     2.   This First Amendment shall be effective as of January 1, 1999 (the
"First Amendment Commencement Date").

     3.   Effective as of the First Amendment Commencement Date:

          (a)  In addition to the premises presently leased to Tenant as
described in Exhibit B to the Lease, Landlord shall lease to Tenant the
Additional Space on the terms and conditions as set forth in this First
Amendment and the Additional Space shall become a part of the Quinton Demised
Premises for all purposes;

          (b)  New pages 1 and 2 of Exhibit B, as set forth on Schedule 1
attached hereto, shall be substituted for pages 1 and 2 of Exhibit B of the
Lease;

          (c)  a new Exhibit D, attached hereto as Schedule 2, which sets forth
the basic annual rent to paid by Tenant to Landlord for the Quinton Demised
Premises (including the Additional Space), shall be substituted in place and
stead of Exhibit D to the Lease; and

<PAGE>

          (d)  Section 2.8 (a) of the Lease is amended to provide that, as of
the First Amendment Commencement Date, the Quinton Demised Premises consists of
159,324 leaseable square feet and that Tenant's Proportionate Share shall be
56.47%, subject to adjustment in accordance with the terms of the Lease.

     4. Tenant agrees to accept the Additional Space in its then "AS IS"
condition on January 1, 1999 and acknowledges that Landlord shall have no
obligation to perform any work, or make or undertake repairs, alterations,
replacements or improvements or any other work or item to the Additional Space
or to the Quinton Demised Premises or, prepare the Quinton Demised Premises or
the Additional Space for use and occupancy of Tenant or to incur any expenses
for any work or to grant any abatement of rent or other inducement to Tenant. If
Tenant desires to do any work with respect to the Additional Space such work
shall be undertaken by Tenant, at Tenant's sole cost and expense, in accordance
with the terms and conditions of the Lease.

     5. Tenant hereby warrants that it has not dealt with any real estate broker
in connection with this First Amendment and agrees to defend, hold harmless and
indemnifies Landlord from any and all claims, liabilities, cost and expense
(including attorneys fees and expenses) arising from any claims for compensation
by any real estate broker or any other intermediary acting on or purporting to
have acted on behalf of Tenant in connection with this First Amendment.

     6. Except as modified by this First Amendment, all terms and conditions of
the Lease are hereby ratified and shall remain in full force and effect.

     7. In any conflict between any provision of the Lease and any provision of
this First Amendment, the applicable provision of this First Amendment shall
prevail.

     IN WITNESS WHEREOF, the parties hereto, intending to be bound legally
hereby, have executed this First Amendment as of the day and year first above
written.

                                        LANDLORD

ATTEST:                                 AHP Subsidiary Holding Corporation

    /s/ Bradford A. Lewin               By: /s/ John R. Considine
-------------------------------------   ---------------------------------------
    Bradford A. Lewin                      John R. Considine
    Assistant Secretary                    Vice President

                                        TENANT

ATTEST:                                 Quinton Instrument Company

    /s/ Sue Smith                       By: /s/ Quinton Instrument Company
-------------------------------------       -----------------------------------
    Executive Assistant

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]