Document:

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                                                                   EXHIBIT 10.25

                                   TWO NEWPORT

                             OFFICE LEASE AGREEMENT

                                Landlord: BTC SEATTLE LLC

                                Tenant:   SCOLR, INC.

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                                TABLE OF CONTENTS

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                                                                                                                   PAGE
<S>                                                                                                                <C>
ARTICLE 1.          PREMISES..................................................................................       1
     SECTION 1.1    PREMISES DEFINED..........................................................................       1
     SECTION 1.2    ALTERATIONS...............................................................................       1
     SECTION 1.3    CONDITION OF PREMISES.....................................................................       2
     SECTION 1.4    COMMON AREAS..............................................................................       2
ARTICLE 2.          BUSINESS PURPOSE AND USE..................................................................       3
     SECTION 2.1    PERMITTED USES............................................................................       3
     SECTION 2.2    PROHIBITED USES...........................................................................       3
     SECTION 2.3    COMPLIANCE WITH LAWS......................................................................       3
ARTICLE 3.          TERM......................................................................................       3
     SECTION 3.1    TERM......................................................................................       3
     SECTION 3.2    POSSESSION BY TENANT......................................................................       4
ARTICLE 4.          RENT......................................................................................       6
     SECTION 4.1    BASIC RENT................................................................................       6
     SECTION 4.2    OPERATING EXPENSES........................................................................       6
     SECTION 4.3    RENT......................................................................................      10
     SECTION 4.4    PLACE OF PAYMENT..........................................................................      10
ARTICLE 5.          SECURITY DEPOSIT AND PREPAID RENT.........................................................      11
     SECTION 5.1    SECURITY DEPOSIT..........................................................................      11
     SECTION 5.2    PREPAID RENT..............................................................................      11
ARTICLE 6.          TAXES.....................................................................................      11
     SECTION 6.1    PERSONAL PROPERTY TAXES...................................................................      11
     SECTION 6.2    BUSINESS TAXES............................................................................      11
ARTICLE 7.          MAINTENANCE, REPAIRS AND ALTERATIONS......................................................      11
     SECTION 7.1    LANDLORD'S AND TENANT'S IMPROVEMENTS......................................................      11
     SECTION 7.2    SERVICES TO BE FURNISHED BY LANDLORD......................................................      11
     SECTION 7.3    TENANT'S MAINTENANCE AND REPAIRS..........................................................      13
     SECTION 7.4    TENANT'S ALTERATIONS......................................................................      13
     SECTION 7.5    LIENS.....................................................................................      14
ARTICLE 8.          INSURANCE.................................................................................      14
     SECTION 8.1    USE; RATE.................................................................................      14
     SECTION 8.2    LIABILITY INSURANCE.......................................................................      14
     SECTION 8.3    WORKER'S COMPENSATION INSURANCE...........................................................      14
     SECTION 8.4    CASUALTY INSURANCE........................................................................      14
     SECTION 8.5    COMPLIANCE WITH REGULATIONS...............................................................      14
     SECTION 8.6    WAIVER OF SUBROGATION.....................................................................      14
     SECTION 8.7    GENERAL REQUIREMENTS......................................................................      14
     SECTION 8.8    BLANKET INSURANCE.........................................................................      15
ARTICLE 9.          DESTRUCTION AND CONDEMNATION..............................................................      15
     SECTION 9.1    TOTAL OR PARTIAL DESTRUCTION..............................................................      15
     SECTION 9.2    CONDEMNATION..............................................................................      17
     SECTION 9.3    SALE UNDER THREAT OF CONDEMNATION.........................................................      17
ARTICLE 10.         INDEMNITY AND WAIVER......................................................................      17
     SECTION 10.1   INDEMNITY.................................................................................      17
     SECTION 10.2   WAIVER....................................................................................      18
</TABLE>

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<TABLE>
<S>                                                                                                                 <C>
ARTICLE 11.         DELAYS....................................................................................      18
     SECTION 11.1   DELAYS....................................................................................      18
ARTICLE 12.         ASSIGNMENT, SUBLEASE AND SUCCESSION.......................................................      18
     SECTION 12.1   CONSENT REQUIRED..........................................................................      18
     SECTION 12.2   GENERAL CONDITIONS........................................................................      19
     SECTION 12.3   SUCCESSION................................................................................      20
ARTICLE 13.         SURRENDER OF POSSESSION...................................................................      20
     SECTION 13.1   SURRENDER.................................................................................      20
     SECTION 13.2   CONDITION AT TIME OF SURRENDER............................................................      20
ARTICLE 14.         HOLDING OVER..............................................................................      20
     SECTION 14.1   HOLDING OVER..............................................................................      20
ARTICLE 15.         ENTRY BY LANDLORD.........................................................................      21
     SECTION 15.1   ENTRY BY LANDLORD.........................................................................      21
     SECTION 15.2   FAILURE TO SURRENDER......................................................................      21
ARTICLE 16.         SUBORDINATION.............................................................................      21
     SECTION 16.1   LEASE SUBORDINATE TO MORTGAGES............................................................      21
     SECTION 16.2   ESTOPPEL CERTIFICATES.....................................................................      22
ARTICLE 17.         DEFAULT AND REMEDY........................................................................      22
     SECTION 17.1   EVENTS OF TENANT'S DEFAULT................................................................      22
     SECTION 17.2   REMEDIES..................................................................................      22
     SECTION 17.3   RELETTING.................................................................................      23
     SECTION 17.4   DEFAULT OF LANDLORD.......................................................................      23
     SECTION 17.5   NON-WAIVER................................................................................      23
     SECTION 17.6   MORTGAGEE PROTECTION......................................................................      23
ARTICLE 18.         LIMITATION OF LIABILITY...................................................................      24
     SECTION 18.1   LIMITATION OF LANDLORD'S LIABILITY........................................................      24
ARTICLE 19.         NOTICES...................................................................................      24
     SECTION 19.1   NOTICES...................................................................................      24
ARTICLE 20.         HAZARDOUS SUBSTANCES......................................................................      24
     SECTION 20.1   PRESENCE AND USE OF HAZARDOUS SUBSTANCES..................................................      24
     SECTION 20.2   CLEANUP COSTS, DEFAULT AND INDEMNIFICATION................................................      24
ARTICLE 21.         MISCELLANEOUS.............................................................................      25
     SECTION 21.1   HEADINGS..................................................................................      25
     SECTION 21.2   AMENDMENTS................................................................................      25
     SECTION 21.3   TIME OF THE ESSENCE.......................................................................      25
     SECTION 21.4   ENTIRE AGREEMENT..........................................................................      25
     SECTION 21.5   LANGUAGE..................................................................................      25
     SECTION 21.6   INVALIDITY................................................................................      25
     SECTION 21.7   LATE CHARGES..............................................................................      25
     SECTION 21.8   RELOCATION................................................................................      25
     SECTION 21.9   COMPUTATION OF TIME.......................................................................      25
     SECTION 21.10  APPLICABLE LAW............................................................................      26
     SECTION 21.11  ATTORNEYS' FEES...........................................................................      26
     SECTION 21.12  TERMINATION...............................................................................      26
     SECTION 21.13  BROKER'S COMMISSION.......................................................................      26
     SECTION 21.14  SIGNS OR ADVERTISING......................................................................      26
     SECTION 21.15  TRANSFER OF LANDLORD'S INTEREST...........................................................      27
     SECTION 21.16  COUNTERPARTS..............................................................................      27
     SECTION 21.17  QUIET ENJOYMENT...........................................................................      27
     SECTION 21.18  AUTHORITY.................................................................................      27
     SECTION 21.19  NAME OF BUILDING..........................................................................      27
</TABLE>

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<TABLE>
<S>                                                                                                                 <C>
     SECTION 21.20  RULES AND REGULATIONS.....................................................................      27
     SECTION 21.21  AGENCY DISCLOSURE.........................................................................      27
     SECTION 21.22  LEASE SUMMARY, ADDENDUM AND EXHIBITS......................................................      27
     SECTION 21.23  SURVIVAL..................................................................................      27
     SECTION 21.24  PARKING...................................................................................      28
</TABLE>

Exhibits:
         A    -   Tenant Floor Plan
         B    -   Legal Description
         C    -   Tenant Improvements and Landlord's and Tenant's Work
         C-1  -   Building Standard Specifications
         D    -   Rules and Regulations
         E    -   Intentionally deleted
         F    -   Parking Agreement

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                                   TWO NEWPORT
                             OFFICE LEASE AGREEMENT

         THIS OFFICE LEASE AGREEMENT is made as of the 15th day of April, 2003,
by and between BTC SEATTLE LLC, A DELAWARE LIMITED LIABILITY COMPANY
(hereinafter referred to as "Landlord"), and SCOLR, INC., A DELAWARE CORPORATION
(hereinafter referred to as "Tenant").

                                  LEASE SUMMARY

         In the event of any conflict between the terms of this Lease Summary
and the terms of the Lease, the terms of the Lease shall prevail.

Section 1.1    The Building and Project

         (a)   Name of Building:                 Two Newport

         (b)   Address:                          3625 132nd Avenue S.E.
                                                 Bellevue, Washington 98006

         (c)   Total Rentable Area of Building:  Approximately 39,775 sq. ft.

         (d)   Total Rentable Area of Project:   Approximately 958,817 sq. ft.

         The Premises

         (a)   Total Rentable Area:              Approximately 10,510 sq. ft.

         (b)   Total Useable Area:               Approximately 9,554 sq. ft.

         (c)   Floor Location:                   Third Floor

         (d)   Suite Number:                     Suite 300

         (e)   Right of First Opportunity:       Continuing right on all of
                                                 second (2nd) floor (subject to
                                                 rights of existing tenants).

Section 2.1    Use of Premises and
               Tenant's Trade Name

         (a)   Tenant's Trade Name:               SCOLR, Inc.

         (b)   Use of Premises:                  Office, lab and related
                                                 purposes.

Section 3.1    Lease Term

         (a)   Five (5) years

         (b)   Target Lease Commencement Date:   September 1, 2003

         (c)   Renewal Options:                  Two (2) options of five (5)
                                                 years each at 100% of market
                                                 with at least 8 months
                                                 and no more than 11 months
                                                 prior written notice.

Section 4.1    Basic Rent (Triple Net)

                                                 Rent Per Rentable

<TABLE>
<CAPTION>
(a)   Month(s)     Monthly Rent Installment        Sq. Ft. Per Year
      --------     ------------------------        ----------------
<S>                <C>                             <C>
    1-17                  $0.00                       $0.00, NNN
</TABLE>

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<TABLE>
<S>                       <C>                         <C>
18-36                     $12,699.58                  $14.50, NNN
37-48                     $13,137.50                  $15.00, NNN
49-60                     $13,575.42                  $15.50, NNN
</TABLE>

         (b)   Late Charge: 5%

         (c)   Default Interest Rate: 12%

Section 4.2    Operating Expenses (Triple Net)

         (a)   Tenant's Proportionate Share of Building: Approximately 26.45%

         (b)   Tenant's Proportionate Share of Project: Approximately 1.10%

         (c)   Tenant's Audit Deadline: 90 days from receipt of Landlord's
               statement

Section 5.1    Security Deposit

         (a)   Security Deposit:             $17,954.59

Section 5.2    Prepaid Rent

         (a)   Prepaid Rent:                 $15,440.94

         (b)   Month(s) to which the
               Prepaid Rent is applied:      Eighteenth (18th) month of Term.

Section 7.2    Services

         (a)   Building Standard Hours:      6:00 a.m. to 6:00 p.m. Monday
                                             through Friday
                                             8:00 a.m. to 1:00 p.m. Saturday

         (b)   Cost for Additional Services: $7.00 per hour per zone for HVAC
                                             and, otherwise, Landlord's
                                             estimated actual cost plus an
                                             administrative fee

Section 7.4    Alterations

         (a)   Subject to Landlord's prior written approval, not to be
               unreasonably withheld or delayed.

         (b)   Alteration work may be performed by Landlord.

Section 8.2    Liability Insurance Limits

         (a)   $2,000,000 combined single limit and $3,000,000 aggregate.

Section 12:    Assignment and Sublease

         (a)   Subject to Landlord's prior written consent.

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         (b)   Landlord to receive 50% of sublease profits without deduction of
               costs.

         (c)   Landlord has right to recapture.

Section 14.1   Holdover Rent

         (a)   Greater of 125% of market or 150% of last rent due.

Section 16.2   Estoppel Certificates

         (a)   Tenant to provide within ten (10) days.

Section 19.1   Addresses for Notices

         (a)   Landlord:

               c/o Bentall Capital (U.S.), Inc.
               1420 Fifth Avenue, Suite 400
               Seattle, Washington 98101
               Attn: Lisa C. Rowe, Vice President/Leasing
               Fax No. (206) 315-3817

               With a copy to:

               c/o Bentall Capital (U.S.), Inc.
               1420 Fifth Avenue, Suite 400
               Seattle, Washington 98 101
               Attn: Gary Carpenter, Executive Vice President
               Fax No. (206) 315-3819

         (b)   Tenant:

               SCOLR, Inc.
               Attn: Steve Moger
               3625 132nd Avenue S.E., Suite 300
               Bellevue, Washington 98006

Section 21.13  Broker's Commission

         (a)   Landlord's Leasing
               Representative
               (Broker/Salesperson): Lisa Rowe, Bentall Capital (U.S.), Inc.
         (b)   Tenant's Leasing
               Representative
               (Broker/Salesperson): Dan Foster, Flinn Ferguson Corporate
                                     Real Estate

Section 21.14  Tenant's Signage Rights

         (a)   Building Standard directory signage and suite entry signage.

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         (b)   Building signage at Tenant's cost subject to prior approval of
               Landlord and the City of Bellevue (See Section 21.14).

Section 21.24  Parking

         (a)   Parking Pass Ratio: Four (4) unreserved parking passes for every
               1,000 useable square feet of Premises. Parking shall be rent free
               during the initial Term.

Exhibit C      Work Letter

         (a)   Tenant Improvement Allowance: Turnkey by Landlord per Final Space
               Plan (See Work Letter).

         (b)   Landlord's Construction Management Fee: 4%

         (c)   Tenant Improvements Constructed By: Landlord

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                                   TWO NEWPORT
                             OFFICE LEASE AGREEMENT

                               ARTICLE 1. PREMISES

         SECTION 1.1       PREMISES DEFINED. Landlord hereby leases to Tenant,
and Tenant hereby leases from Landlord, upon the terms and conditions
hereinafter set forth, those certain premises and improvements consisting of the
floor area and the location described in the Lease Summary and designated on the
plans attached hereto as Exhibit A (hereinafter referred to as the "Premises").
The Premises are located in the building known as Two Newport (the "Building")
which is part of that certain real estate development situated in the City of
Bellevue, County of King, State of Washington and located upon the real property
described in Exhibit B (the "Project").

         As used herein, the terms "Rentable Square Feet" and "Useable Square
Feet" shall be determined in accordance with the 1996 Building Owner's and
Manager's Association Standard Method for Measuring Floor Area in Office
Buildings, Publication ANSI/BOMA Z65.1-1996 ("1996 BOMA"). The exact number of
Rentable Square Feet and Useable Square Feet in the Premises, Building, and
Project shall be determined by the Landlord in accordance with the 1996 BOMA.
With respect to the Building and the Project, such determination shall be made
by Landlord following completion of construction of the Building and/or the
Project, as applicable. With respect to the Premises, such determination shall
be made by Landlord upon the completion of the build-out of the Tenant
Improvements in and to the Premises pursuant to the Work Letter Agreement
attached hereto. With respect to the Project, such determination shall be made
by Landlord upon the addition or removal of square footage in the Project
(including the addition of new buildings or the removal of existing buildings).
Until such determinations are made, the number of Rentable Square Feet and
Useable Square Feet of space shown in the Lease Summary shall control. Landlord
shall notify Tenant of any adjustment to the Rentable Square Feet and Useable
Square Feet in the Premises, Building and/or Project (the "Adjustment Notice")
upon Landlord's determination of the same. In the event such determination
results in a change in the numbers shown in the Lease Summary, then all matters
which are based on such numbers including, without limitation, the Rentable
Square Feet and Useable Square Feet of the Premises, Building or Project, the
Basic Rent payable hereunder, Tenant's Proportionate Share of the Building and
Project, and the Tenant Improvement Allowance described in the Work Letter (if
any, and if based on the number of Rentable Square Feet or Useable Square Feet
in the Premises) shall be adjusted based on Landlord's determination and such
adjustments shall be included in Landlord's Adjustment Notice. If Tenant objects
to any adjustment made by Landlord, Tenant shall notify Landlord in writing of
such objection within five (5) business days of Tenant's receipt of the
Adjustment Notice and failure by Tenant to provide such written objection shall
be deemed to be an acceptance by Tenant of Landlord's Adjustment Notice.

         SECTION 1.2       ALTERATIONS. Tenant acknowledges that Exhibit A sets
forth the floor plan for the floor(s) of the Building on which the Premises is
located and the location of the Premises therein. Landlord may in its sole
discretion increase, decrease, or change the number, locations and dimensions of
any hallways, lobby areas and other improvements shown on Exhibit A that are not
within the Premises; provided that Landlord shall not make any such changes that
would materially diminish Tenant's access to the Premises or that would
interfere with Tenant's use of the Premises. Landlord reserves the right from
time to time to install, use, maintain, repair, relocate and replace pipes,
ducts, conduits, wires, and appurtenant meters and equipment for service to the
Premises or to other parts of the Building which are above the ceiling surfaces,
below the floor surfaces, within the walls and in the central core areas of the
Building which are located within the Premises or located elsewhere in the
Building.

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         SECTION 1.3       CONDITION OF PREMISES. Except as otherwise provided
in this Lease, the Premises are leased by Landlord and accepted by Tenant in an
"as is" condition, subject to any improvements, alterations or modifications to
be made pursuant to Article 7 below, and the requirement of Landlord to complete
the improvements specified therein. Landlord represents that, to the best of its
knowledge, as of the Lease Commencement Date, the Premises and Building
(including Landlord's Work as defined in Exhibit C) will be in good condition
and repair. Except for matters which related to improvements or alterations made
by or at the request of Tenant or which relate to Tenant's particular use of the
Premises (such as for lab purposes), and except for matters which are caused by
the negligence or willful misconduct of Tenant, Landlord shall be solely
responsible, at its expense (but subject to reimbursement to the extent allowed
under Section 4 below), for repairing or remedying any non-working or defective
Building systems and any violations of applicable laws existing as of the
Commencement Date of this Lease. To the extent the Premises currently requires
any system improvements or requires improvements to comply with applicable laws,
such improvements will be made as part of the Tenant Improvements pursuant to
the Work Letter.

         SECTION 1.4       COMMON AREAS. So long as Tenant occupies the Premises
under the terms of this Lease, Tenant, its licensees, invitees, customers and
employees shall have the non-exclusive right to use all entrances, lobbies, and
other public areas of the Project (the "Common Areas") in common with Landlord,
other Project tenants, and their respective licensees, invitees, customers and
employees; provided, however, with respect to the Project's parking areas, which
include the Building parking garage (if any) as well as any other parking areas
within the Project (collectively, the "Parking Areas"), Tenant shall have only
the rights, if any, set forth in Section 21.24 of this Lease. The use of the
Common Areas shall be subject to the terms and conditions of this Lease. Subject
to the provisions of Section 1.2, Landlord has the right, in its sole
discretion, from time to time, to: (a) make changes to the Common Areas, the
Building and/or the Project, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas (including the use of off-site parking areas as Common Areas for
parking), ingress, egress, direction of driveways, entrances, hallways,
corridors, lobby areas and walkways; (b) close temporarily any of the Common
Areas for maintenance or construction purposes so long as reasonable access to
the Premises remains available; (c) designate areas located outside of the
Project for use as Common Areas, add additional buildings and improvements to
the Project or remove existing buildings or improvements therefrom; (d) use the
Common Areas while engaged in making additional improvements, repairs or
alterations to the Project or any portion thereof, and (e) do and perform any
other acts, alter or expand, or make any other changes in, to or with respect to
the Common Areas, the Building and/or the Project as Landlord may, in its sole
discretion, deem to be appropriate.

         SECTION 1.5 RIGHT OF FIRST OPPORTUNITY. Landlord hereby grants Tenant a
"Right of First Opportunity" to lease space on the second (2nd) floor of the
Building (the "Space") if and when any such space becomes available subject to
the following terms and conditions:

                  (i)      At such time as any Space becomes or will come
available for Lease, or at such time as Landlord intends to offer any Space for
lease, Landlord shall give Tenant written notice ("Landlord's Notice") which
shall include the fair market terms upon which Landlord is willing to lease the
Space (including, without limitation, rental rate, lease term, and any
concessions). Tenant shall have ten (10) days from receipt of Landlord's Notice
to respond in writing ("Tenant's Response") by either electing to take the Space
on the terms described in Landlord's Notice or by submitting a counter offer.
Tenant must deliver Tenant's Response to Landlord within this ten (10) day
period and failure to provide such notice shall be deemed to be an election by
Tenant not to lease the Space. Landlord and Tenant shall have ten (10) days from
the delivery of Tenant's Response within which to agree on the basic terms and
conditions of Tenant's lease of the Space. If Tenant fails to deliver Tenant's
Response or if Landlord and Tenant are unable to agree upon all terms and
conditions of Tenant's lease of the Space within the ten

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(10) day period set forth above, Landlord shall be free to lease the Space to
any third party, provided that if the Space has not been leased within nine (9)
months, or if it leased and such lease expires or is terminated, then this Right
of First Opportunity shall again become applicable. Notwithstanding the above to
the contrary, this Right of Fast Opportunity shall expire at the end of the
thirty-sixth month of the initial Lease Term. As a precondition to electing to
take the Space, (i) Tenant shall not have been in default under this Lease two
or more times (whether cured or not), and (ii) Tenant must not be in default
under this Lease at the time of Tenant's Response or at the time the Space is
added to this Lease. If the tenant who has possession of and/or rights to the
Space does not vacate the Space as of the end of the written lease term,
Landlord shall have no liability to Tenant for failure to deliver possession of
the Space to Tenant at such time and Landlord shall not be obligated to deliver
the Space until the prior tenant has actually vacated the Space.

                  (ii)     If Tenant elects to lease the Space covered by
Landlord's Notice, Tenant's lease of the Space shall commence on the date
Landlord tenders possession of the Space to Tenant (the "Space Commencement
Date") and shall be on the terms set forth in a lease amendment agreed upon by
Landlord and Tenant. The rights under this Section shall be personal to Tenant
and may not be exercised by any successor, assignee or subtenant of Tenant.

                       ARTICLE 2. BUSINESS PURPOSE AND USE

         SECTION 2.1       PERMITTED USES. Tenant shall use the Premises solely
for the purposes and under the trade name specified in the Lease Summary, and
for no other business or purpose without the prior written consent of the
Landlord, which shall not be unreasonably withheld or delayed.

         SECTION 2.2       PROHIBITED USES. Tenant shall not do or permit
anything to be done in or about the Premises, nor bring or keep anything
therein, which will (a) in any way increase the existing rate of or affect any
policy of fire or other insurance upon the Building or any of its contents, or
cause a cancellation of any insurance policy covering any part thereof or any of
its contents; (b) obstruct or interfere in any way with the rights of other
tenants or occupants of the Building or injure or unreasonably annoy any of
them; or (c) use or allow the Premises to be used for any improper or unlawful
purposes. Tenant shall not use the Premises as a child care facility. Tenant
shall not cause, maintain or permit any nuisance in, on or about the Premises,
nor shall Tenant commit or suffer to be committed any waste in, on or about the
Premises. Tenant shall not place upon or install in windows or other openings
any signs, symbols, drapes, or other material without written approval of
Landlord, which approval shall not be unreasonably withheld or delayed;
provided, however, if Landlord determines that such items are inappropriate for
the Building or Project, such approval may be withheld in Landlord's sole
discretion. Tenant shall not place any object or barrier within, or otherwise
obstruct, any of the Common Areas.

         SECTION 2.3       COMPLIANCE WITH LAWS. Tenant shall at all times
comply with all laws, ordinances and any regulations promulgated by any
governmental authority having jurisdiction over the Building and/or the
Premises.

                                 ARTICLE 3. TERM

         SECTION 3.1       TERM; CONTINGENCY. The term of this Lease shall
commence on the date upon which Landlord has notified Tenant that the Tenant
Improvements (as defined in Exhibit C) are substantially complete (the "Lease
Commencement Date"); provided, that if substantial completion falls on a day
other than the first day of a calendar month, Tenant's rent and other
obligations pursuant to this Lease for the first month of the Lease Term shall
be prorated based upon the number of days from and including the date of
substantial completion to the end of such first month. Notwithstanding anything
contained herein to the contrary, this Lease and the commencement of the Lease
Term are expressly

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contingent upon Landlord reaching an acceptable lease termination agreement with
Data Dimensions (which currently leases all or part of the Premises) on or
before June 1, 2003. If Landlord is unable to reach such an agreement by such
date, either party may terminate this Lease by written notice given prior to the
Commencement Date.

         The term of this Lease shall expire the number of months specified in
Section 3.1 of the Lease Summary after the last day of the month in which the
Commencement Date occurs, the expiration of which shall be the Termination Date
of this Lease, unless this Lease is sooner terminated as hereinafter provided.
By way of example, if the Lease term was 12 months and the Commencement Date was
July 15, then the Termination Date would be July 31 of the following year. The
period between the Lease Commencement Date and the Termination Date shall be
referred to as the "Lease Term" or "Term". The Landlord and Tenant acknowledge
that certain obligations under the provisions of this Lease may be binding upon
them prior to the Lease Commencement Date, such as, but not limited to, the
provisions of Exhibit C, and Landlord and Tenant shall be bound by such
provisions prior to the Lease Commencement Date.

         SECTION 3.2       POSSESSION BY TENANT.

                  3.2.1    Landlord shall deliver to Tenant, and Tenant shall
accept from Landlord, possession of the Premises, upon the Commencement Date.
Provided such early entry will not interfere with Landlord's completion of
Landlord's Work, Landlord shall permit Tenant to enter the Premises four (4)
weeks prior to the Commencement Date in order that Tenant may commence
installation of Tenant's furniture, equipment, fixtures, data cabling, and phone
system (Tenant's "Fit Up Work"). Any such entry into and occupation of the
Premises by Tenant shall be deemed to be under all of the terms, covenants,
conditions and provisions of the Lease except as to the covenant to pay Rent,
and Landlord shall not be liable in any way for any injury, loss or damage to
any Fit Up Work prior to the Commencement Date. Tenant shall be solely
responsible for obtaining all permits, if any, required for Tenant's Fit Up Work
and for complying will all applicable City codes and inspection requirements
related to the Fit Up Work.

                  3.2.2    If Landlord cannot deliver possession of the Premises
to Tenant by the Target Lease Commencement Date, as specified in the Lease
Summary, then this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, but in that event
all Rent shall be abated until the Landlord delivers possession of the
substantially completed Premises to Tenant (excepting to the extent any such
delay is caused by Tenant or anyone acting through or on behalf of Tenant).
Notwithstanding the foregoing, except for delays caused by force majuere, if
Landlord has not delivered possession of the Premises to Tenant by November 1,
2003, Tenant may, at its option, terminate this Lease by giving Landlord written
notice of termination by no later than five (5) days following such date.

         SECTION 3.3       OPTION TO RENEW.

         (i)      Landlord hereby grants Tenant the right to renew the initial
term of this Lease for two (2) consecutive periods of five (5) years each (each
a "Renewal Term") on the same general terms and conditions contained in the
Lease, except that

                  a)       All market terms and conditions of this Lease
(collectively, the "Market Terms"), including but not limited to Basic Rent,
parking charges and parking pass allocations, the security deposit amount (which
may be increased based on Landlord's review of Tenant's then current financial
condition), allowances, rental rate concessions (if any), insurance limits and
Operating Expense caps or limitations (if any) shall be adjusted to the then
current "fair market terms" as determined hereinbelow,

                                        4

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                  b)       Except as expressly provided in this Section 3.3,
Tenant shall not be entitled to any concessions or financial incentives with
respect to a Renewal Term including, without limitation, commissions or
allowances, or parking concessions (including rates and ratios); and

                  c)       No additional options to renew shall apply following
the expiration of the second Renewal Term. Written notice (the "Tenant's
Election") of Tenant's exercise of its option to renew ("Option to Renew") the
Term of this Lease for a Renewal Term must be given to Landlord no less than
eight (8) months nor more than eleven (11) months prior to the date the Term of
the Lease (or the Renewal Term, as the case may be) would otherwise expire. The
Tenant's Election shall be binding upon Tenant and shall set forth the name of
the Landlord and Tenant, the Lease date, and the Renewal Term dates.

         (ii)     Notwithstanding anything to the contrary set forth in this
Section 3.3, Tenant shall not have the right to exercise an option to renew:

                  a)       During the time commencing from the date Landlord
gives to Tenant a written notice that Tenant is in default under any provisions
of this Lease, and continuing until the default alleged in said notice is cured;
or

                  b)       In the event that Tenant has been in default under
this Lease two more times (whether or not such default is cured); or

                  d)       If Tenant does not, at the time a Renewal Term
commences, occupy the entire Premises or has sublet any portion of the Premises.

                  The period of time within which the option may be exercised
shall not be extended or enlarged by reason of Tenant's inability to exercise
the option because of the foregoing provisions and/or restrictions. All rights
of Tenant under the provisions of this option shall, at Landlord's election,
terminate and be of no further force or effect even after Tenant's due and
timely exercise of the option, if after such exercise, but prior to the
commencement date of the new term, Tenant defaults under this Lease.

         (iii)    In the event Tenant validly exercises its Option to Renew the
term of this Lease as herein provided, the Market Terms shall be determined as
of the commencement date of the Renewal Term as follows: Commencing within ten
(10) days after Landlord's receipt of Tenant's Election, Landlord and Tenant
shall attempt to agree upon the Market Terms for the Premises for the Renewal
Term. The parties shall negotiate such terms in good faith. If the parties are
unable to agree upon the new Market Terms within thirty (30) days of Tenant's
notice to exercise (the "Exercise Notice"), then each party shall appoint an
appraiser who is a member of the American Institute of Real Estate Appraisers
(an "Appraiser") and has at least five years comparable commercial experience
appraising rental properties in the Bellevue, Washington area. If the Appraisers
are unable to reach agreement about Market Terms within forty-five (45) days
after Tenant's Exercise Notice, then either party by notice to the other may
request appointment of a third appraiser (the "Neutral Appraiser") by the
American Arbitration Association ("AAA") in accordance with its then prevailing
real estate valuation arbitration rules as modified by this Section 3.3. Within
twenty days after selection of the Neutral Appraiser, the three appraisers shall
simultaneously exchange determinations of Market Terms. If the lowest appraisal
is not less than ninety percent (90%) of the highest appraisal, then the three
appraisals shall be averaged and the result shall be the Market Terms. If the
lowest appraisal is less than ninety percent (90%) of the highest appraisal,
then the Market Terms shall be deemed to be the Market Terms set forth in the
appraisal submitted by the appraiser appointed by a party that is closest to the
appraisal submitted by the Neutral Appraiser. Each party shall bear the expense
of retaining its Appraiser. The fees and expenses of the Neutral Appraiser and
other expenses of the arbitration shall be borne equally by the parties. The
determination of Market Terms under this

                                        5

<PAGE>

Section shall be final and binding on the parties.

         (iv)     The Option to Renew is granted for Tenant's personal benefit
and may not be assigned or transferred by Tenant, either voluntarily or by
operation of law, in any manner whatsoever except to an assignee approved by
Landlord. This Option to Renew may not be exercised by a subtenant.

         (v)      In the event Tenant timely and properly exercises an Option to
Renew, Landlord and Tenant shall within fifteen (15) days after the
determination of Market Terms for the Renewal Term, execute an amendment to this
Lease extending the Lease Term on the terms and conditions set forth in this
Section 3.3.

                                 ARTICLE 4. RENT

         SECTION 4.1        BASIC RENT. Tenant shall pay to Landlord as minimum
rental for the use and occupancy of the Premises the "Basic Rent" as specified
in the Lease Summary. Basic Rent shall be payable in Monthly Rent Installments
of the amount specified in the Lease Summary, on or before the first day of each
month of the Lease Term beginning on the Lease Commencement Date. If the Lease
Commencement Date is a date other than the first day of a calendar month, then
annual Basic Rent increases, if any, set forth in the Lease Summary shall take
effect on the anniversary of the Lease Commencement Date. Basic Rent for any
partial year shall be prorated based upon the actual number of months left in
such partial year. The Monthly Rent Installment for any partial month shall be
prorated based upon the actual number of days in that partial month.

         SECTION 4.2       OPERATING EXPENSES.

                           4.2.1    This is a net Lease. In addition to Basic
Rent, Tenant shall pay, in monthly installments and as "Additional Rent", an
amount equal to the "Tenant's Proportionate Share" (as hereinafter defined) of
actual "Total Operating Expenses" (as hereinafter defined) for the Building and
Project. Notwithstanding that Tenant is not obligated to pay Basic Rent for the
first three (3) months of the Term, Tenant shall be obligated to pay Additional
Rent commencing on the Commencement Date.

                           4.2.2    "Tenant's Proportionate Share" shall be
computed by dividing the Total Rentable Area of the Premises by the Total
Rentable Area of the Building and Total Rentable Area of the Project, as
applicable with respect to any particular Operating Expense. Tenant's
Proportionate Share upon the Lease Commencement Date for the Premises is as
specified in the Lease Summary and is subject to adjustment in accordance with
Section 1.1.

                           4.2.3    "Rentable Area of the Building," "Rentable
Area of the Project" and "Rentable Area of the Premises" are defined as those
areas obtained by measuring the Building, Project and Premises using the 1996
BOMA Standard and as may be adjusted from time to time in accordance with
Section 1.1. Tenant's Proportionate Share shall be calculated based upon the
Total Rentable Area of the Building with respect to Operating Expenses the
benefit of which are shared only with tenants of the Building and based upon the
Total Rentable Area of the Project with respect to Operating Expenses the
benefit of which are shared by the tenants of the Project.

                           4.2.4    Landlord shall provide Tenant with a written
estimate of Total Operating Expenses for the succeeding year or partial year
within thirty (30) days after the Commencement Date or the start of each
calendar year, as applicable, during the Lease Term. Tenant shall then pay to
Landlord, monthly in advance, one-twelfth (1/12) of Tenant's Proportionate Share
of the estimated Total Operating Expenses for the said calendar year. In the
event any item of actual Operating Expenses, including without limitation those
items identified in subparagraph 4.2.6 below, increases five percent (5%) or
more

                                        6

<PAGE>

in price or cost over any twelve (12) month period, Landlord shall have the
option to increase the estimated payments of Tenant's Proportionate Share of
Operating Expenses upon thirty (30) days' written notice from Landlord to
Tenant.

                           4.2.5    Within one hundred twenty (120) days after
the end of every calendar year during the Lease Term, Landlord shall provide the
Tenant with a written statement of the actual Total Operating Expenses for that
calendar year. If the actual Total Operating Expenses should exceed the
estimated amount with respect to such calendar year, then Tenant shall pay
Landlord the additional amount due to the Landlord within thirty (30) days and,
if actual Total Operating Expenses should be less than the estimated Total
Operating Expenses for that calendar year, then Landlord shall credit, against
future Additional Rent due under this Article, the amount of any overpayment by
Tenant.

                           4.2.6    "Operating Expenses" as used herein shall
mean all costs, expenses and other charges incurred by Landlord in connection
with the ownership, operation, repair and maintenance of the Project and the
Building (including the Premises) as a first class mixed use retail/office
building complex in downtown Bellevue, Washington, including but not limited to:

                                    4.2.6.1      Wages, salaries and fringe
benefits of all employees and contractors engaged in the management, operation
and maintenance of the Project and/or the Building; employer's Social Security
taxes, unemployment taxes or insurance, and any other taxes which may be levied
against Landlord on those wages and salaries; and the cost to Landlord of
disability and hospitalization insurance and pension or retirement benefits for
these employees;

                                    4.2.6.2      All supplies and materials used
in the operation and maintenance of the Project and/or the Building;

                                    4.2.6.3      Cost of water and power, and
cost of heating, lighting, air conditioning and ventilating the Building, the
Common Areas and the Premises (unless separately metered, in which case Tenant
shall pay the actual costs directly to Landlord upon invoice);

                                    4.2.6.4      The electrical costs incurred
in the operation of the mechanical equipment and systems for the Building;

                                    4.2.6.5      Cost of maintenance,
                                                 depreciation and replacement of
machinery, tools and equipment (if owned by Landlord) and for rental paid for
such machinery, tools and equipment (if rented) used in connection with the
operation or maintenance of the Building;

                                    4.2.6.6      All premiums and deductibles on
policies of compensation, public liability, property damage, automobile, garage
keepers, rental loss and any other policies of insurance maintained by Landlord
with respect to the Project, Building or any insurable interest therein. Cost of
casualty and liability insurance applicable to the Project and/or the Building,
the improvements therein, and Landlord's personal property used in connection
therewith;

                                    4.2.6.7      Cost of janitorial services,
repairs and general maintenance;

                                    4.2.6.8      Any capital improvements made
or installed (a) to be in compliance with any applicable government statutes,
ordinances, regulations or other requirements adopted after the Commencement
Date, and (b) to the extent of such savings, for purposes of saving labor or
otherwise reducing applicable operating costs amortized over the useful life of
such improvements, as determined by Landlord in accordance with generally
accepted accounting principles and practices in effect at the time of
acquisition of the capital item;

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<PAGE>

                                    4.2.6.9      Costs in connection with
maintaining and operating any parking areas (including parking garages) owned by
the Landlord for use by tenants of the Building and/or Project;

                                    4.2.6.10     All taxes and assessments and
governmental charges whether federal, state, county or municipal and any other
taxes and assessments attributable to the Project and/or the Building or its
operation, including without limitation real property taxes and assessments and
any tax or other levy, however denominated, on or measured by the rental
collected by the Landlord with respect to the Building, or on Landlord's
business of leasing the Building, but excluding federal and state taxes on
income;

                                    4.2.6.11     The cost of maintaining any
transportation management program, public transit system, vanpool, or other
public or semi-public transportation imposed upon Landlord's ownership and
operation of the Building;

                                    4.2.6.12     Cost of all accounting and
other professional fees incurred in connection with the operation of the Project
and/or the Building;

                                    4.2.6.13     A management fee, not to exceed
current market rates, which may be payable to the Landlord;

                                    4.2.6.14     Cost of replacing lamps, bulbs,
starters and ballasts used in the Building, other than specialty lighting or
non-building standard lighting, which cost may be billed directly to a tenant.

         Notwithstanding anything to the contrary contained in this Lease, the
following items shall be excluded (or, as applicable, deducted) from the
calculation of Tenant's Proportionate Share of the Total Operating Expenses: (A)
other than insurance deductibles, the cost of repairs or other work occasioned
by fire, windstorm or other casualty or loss in excess of the insurance proceeds
therefor (or, if Landlord has failed to maintain its insurance, the proceeds
that would have been available had Landlord maintained the insurance required to
be maintained by Landlord pursuant to this Lease), or by the exercise of eminent
domain; (B) rental concessions or lease buy-outs; (C) the costs of renovating or
otherwise improving or decorating, painting or redecorating space (exclusive of
the Common Areas) for any tenants of the Building or Project, including, without
limitation, Tenant; (D) the amounts by which the cost of any work or service
performed for any tenant or occupant (other than Tenant) which shall exceed the
cost of the standard amount or level of such work or service provided to tenants
or occupants of the Building or Project in general; (E) depreciation; (F)
overhead or profit paid to Landlord, subsidiaries or affiliates of Landlord, for
services on or to the Building, Project or Common Areas if and to the extent the
cost therefor exceeds competitive costs for such services in comparable
first-class office buildings located within five (5) miles of the Building were
they not so rendered by Landlord, or by a subsidiary or affiliate of Landlord;
(G) payments of principal, interest or other payments of any kind on any deeds
to secure debt, mortgages, ground or underlying leases, or other hypothecations
for security of all or any part of the Building, Project or Common Areas by
Landlord; (H) Landlord's general overhead and any other expense not directly
related to the maintenance, administration, operation, or management of the
Building, Project or Common Areas; (I) all items, services and/or goods for
which Tenant or any other tenant, occupant, person or other party reimburses
Landlord directly or pays directly to third parties so that Landlord does not
receive reimbursement for any item, service and/or good for which Landlord did
not pay; (J) advertising and promotional expenses with respect to leasing space
in or selling the Building or any portion of the Project; (K) brokerage, legal
and professional fees expended by Landlord in connection with negotiating and
entering into any tenant leases and any related instruments (including, without
limitation, guaranties, surrender agreements, leasing amendments and consents to
assignment or

                                        8

<PAGE>

subletting) with any tenant of any portion of the Building or Project, and the
enforcement of any such instruments; or which are expended or incurred by
Landlord in connection with the negotiation and entering of sale, ground lease,
financing, partnership or similar transactions pertaining to the Building,
Project, or any portion thereof (but excluding maintenance, operation,
administration and management transactions), and/or to Landlord or an interest
in Landlord, including without limitation, promissory notes, security deeds,
mortgages, ground or master leases, purchase and sale agreements, options, and
any and all similar and/or related documents, instruments and agreement; (L)
estate, inheritance, gift, franchise and income taxes of Landlord (except for
any such tax which is levied in lieu of or in substitution for any current tax
or future); (M) wages, salaries and other compensation paid to employees of the
Landlord at the Building who are at or above the level of regional manager; (N)
deleted; (O) all items that would be capitalized under generally accepted
accounting principles as of the date hereof except to the extent expressly
allowed above; (P) the cost of defending against claims in regard to the
existence or release of Hazardous Substances at the Building, Project or Common
Areas and costs of any clean-up of any such Hazardous Substances or future
designated hazardous materials; (Q) costs and expenses incurred in connection
with compliance with or the contesting or settlement of any claimed violation of
law or requirements of law if such law is in effect and applicable to the
Building, Project or the Common Areas as of the Lease Commencement Date and the
Building, Project or the Common Areas (or all) is (are) in violation of such law
as of the Lease Commencement Date; (R) interest, penalties or damages incurred
by Landlord under any agreement to which Landlord is a party by reason of the
default of Landlord (unless such default is due to a valid or commercially
reasonable business circumstance); (S) moving expenses incurred in connection
with relocating tenants in the Building or Project; (T) the cost of installing,
operating and maintaining any specialty service or special facility such as an
observatory, broadcasting facilities, cafeteria or dining facility or luncheon
club, other than those facilities generally made available to tenants of the
Building or Project without costs (specifically including the health club and
conference facilities even though there may be a nominal charge for the use of
such facilities); (U) deleted; and (V) all other items for which Tenant or any
other tenant, occupant or other party compensates Landlord, so that no
duplication of payments by Tenant or to Landlord shall occur. Landlord and
Tenant shall each from time to time upon request of the other sign a written
memorandum confirming the amount of the Additional Rent as adjusted from time to
time hereunder.

                           4.2.7    Tenant shall have the right, upon
fulfillment of the conditions set forth below, to conduct one (1) audit of the
Landlord's books and records covering the Operating Expenses for a particular
calendar year to verify the accuracy of the Landlord's determination of the
Tenant's Proportionate Share of such Operating Expenses. The conditions which
must be met before Tenant shall have the right to audit the books and records of
a particular calendar year are as follows:

                                    4.2.7.1      Tenant must provide Landlord
not less than thirty (30) days' prior written notice of the Tenant's election to
audit (the "Tenant's Notice of Audit"), together with the information concerning
the auditor as outlined in subsection 4.2.7.4 below, which Tenant's Notice of
Audit and information must be delivered to Landlord within sixty (60) days after
Tenant's receipt of the Landlord's statement of actual Operating Expenses for a
particular calendar year.

                                    4.2.7.2      Tenant's audit must be
undertaken and completed by Tenant or its agents at reasonable times during
Landlord's normal business hours at the place where the Landlord's records are
kept. Said audit must be completed within one hundred twenty (120) days of
Tenant's receipt of the Landlord's statement of Operating Expenses for a
particular calendar year.

                                    4.2.7.3      Tenant shall not be entitled to
conduct an audit if Tenant is in default under this Lease at the time Tenant
gives its Tenant's Notice of Audit or at the time the Tenant or its agent
undertakes the audit.

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<PAGE>

                                    4.2.7.4      At the time the Tenant delivers
its Tenant's Notice of Audit to Landlord, the Tenant shall also provide evidence
reasonably acceptable to the Landlord that the audit will be a "fair and true
audit." For the purposes hereof, the term "fair and true audit" shall mean that
the review of the subject books and records shall be undertaken and completed by
the Tenant, its officers or employees, or by an independent accounting firm
being paid on an hourly basis and that in no event will the party auditing the
books (or that party's employer or principal) directly or indirectly base the
compensation or fees for such audit work upon a percentage of the savings found
or the return due the Tenant by reason of that audit.

                                    4.2.7.5      The Tenant's rights to audit
the Landlord's books and records shall be strictly limited to the right set
forth above and the Tenant shall have no right to audit any of the Landlord's
books or records for any calendar year before or after the Lease Term or for any
calendar year other than the immediately preceding calendar year as set forth
above. All costs and expenses of the audit shall be borne solely by the Tenant.

                                    4.2.7.6      A true and correct copy of the
audit shall be delivered to the Landlord within fifteen (15) days of the
completion of such audit if Tenant requests a credit for overpayment. Any
overpayment shown by such audit shall be subject to the Landlord's prompt
verification and, upon such verification, shall be given to the Tenant as a
credit against Operating Expenses next falling due or, if after the expiration
of the Term, shall be paid directly to Tenant.

         SECTION 4.3       RENT. The terms "Rent" and "Rental" as used in this
Lease shall mean all amounts to be paid hereunder by Tenant whether those sums
are designated as Basic Rent or Additional Rent and as adjusted by the terms of
this Lease. Failure by Tenant to pay any sum of Rent due under this Article 4
shall entitle Landlord to pursue any or all remedies specified in this Lease as
well as remedies specified in RCW Chapter 59.12 or otherwise allowed by law.

         SECTION 4.4       PLACE OF PAYMENT. All Rent shall be paid to the
Landlord on or before the first day of each calendar month at the address to
which notices to Landlord are to be given. All Rental payments to be made
hereunder, whether Basic Rent, or Additional Rent or otherwise, are to be made,
except as otherwise set forth in this Lease, without deduction, setoff, prior
notice or demand by Landlord.

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<PAGE>

                  ARTICLE 5. SECURITY DEPOSIT AND PREPAID RENT

         SECTION 5.1       SECURITY DEPOSIT. Contemporaneously with Tenant's
execution of this Lease, Tenant shall pay to Landlord the sum set forth as the
Security Deposit in the Lease Summary as security for the full and faithful
performance of every provision of this Lease to be performed by Tenant. If
Tenant defaults with respect to any provision of this Lease, including but not
limited to the provisions relating to the payment of Rent, the repair of damage
to the Premises caused by Tenant and/or cleaning the Premises upon termination
of this Lease, Landlord may use, apply or retain all or any part of this
Security Deposit for the payment of any Rent or any other sum in default, the
repair of such damage to the Premises, the cost of cleaning or for the payment
of any other amount which Landlord may spend or become obligated to spend by
reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default to the full
extent permitted by law. If any portion of said Security Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount and Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep Tenant's Security
Deposit separate from its general funds, and Tenant shall not be entitled to
interest on the Security Deposit. If Tenant shall fully and faithfully perform
every provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest hereunder) within ten (10) days after the
expiration of the Lease Term.

         SECTION 5.2       PREPAID RENT. Contemporaneously with Tenant's
execution of this Lease, Tenant shall pay to Landlord the sum set forth as
Prepaid Rent in the Lease Summary to be applied to Basic Rent for the month
during the Term hereof as specified in the Lease Summary. In the event Tenant
defaults under the terms of this Lease prior to the application of the Prepaid
Rent, such sums shall be held as a Security Deposit to be disposed of in
accordance with Section 5.1 above.

                                ARTICLE 6. TAXES

         SECTION 6.1       PERSONAL PROPERTY TAXES. Tenant shall pay before
delinquency all license fees, public charges, property taxes and assessments on
the furniture, fixtures, equipment and other property of or being used by Tenant
at any time situated on or installed in the Premises.

         SECTION 6.2       BUSINESS TAXES. Tenant shall pay before delinquency
all taxes and assessments or license fees levied, assessed or imposed by law or
ordinance, by reason of the use of the Premises for the specific purposes set
forth in this Lease.

                 ARTICLE 7. MAINTENANCE, REPAIRS AND ALTERATIONS

         SECTION 7.1        LANDLORD'S AND TENANT'S IMPROVEMENTS. Landlord and
Tenant shall, each at its own expense, complete and install in a good and
workmanlike manner within the Premises those items specified as the "Landlord's
Work" and "Tenant's Work", respectively, on Exhibit C attached hereto.

         SECTION 7.2       SERVICES TO BE FURNISHED BY LANDLORD. Subject to
reimbursement pursuant to Section 4.2 above, Landlord shall provide the
following services during standard hours of operation of the Building. These
standard hours of operation are 6 a.m. to 6 p.m., Monday through Friday, and 8
a.m. to 1 p.m., on Saturdays.

                           7.2.1    Public utilities shall be caused to furnish
the Premises with electricity and water utilized in operating any and all
facilities serving the Premises 24 hours a day (except for temporary
interruptions for testing, repairs, etc., or reasons beyond the control of
Landlord);

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<PAGE>

                           7.2.2    Hot and cold water at those points of supply
provided for general use of other tenants in the Building, central heat and air
conditioning in season, at such times as Landlord normally furnishes these
services to other tenants in the Building and at temperatures and in amounts as
are considered by Landlord to be standard, but this service at times during the
weekdays at other than standard hours of operation for the Project, on Saturday
afternoons, Sundays and holidays shall be furnished only upon request of Tenant,
who shall bear the entire costs thereof. Except for temporary interruptions for
testing, repairs, etc., and except for interruptions which are beyond the
control of Landlord, HVAC service will be available 24 hours a day;

                           7.2.3    Routine maintenance, painting and electric
lighting service for all Common Areas and special service areas of the Building
in the manner and to the extent deemed by Landlord to be standard and consistent
with the operation and maintenance of the Building as a first-class office
building in downtown Bellevue;

                           7.2.4    Janitorial service on a five (5) day week
basis, excluding Fridays, Saturdays, and legal holidays;

                           7.2.5    Electrical facilities to provide sufficient
power for typewriters, personal computers and other small office machines of
similar low electrical consumption, but not including electricity required for
electronic data processing equipment, special lighting in excess of building
standard, and any other item of electrical equipment which (itself) consumes
more than .5 kilowatts per hour at rated capacity or requires a voltage other
than 120 volts single phase per square foot (24 hours per day except for
temporary interruptions for repairs or for other reasons beyond the control of
Landlord). If any electrical equipment installed in the Premises requires air
conditioning capacity above that provided by the building standard system, then
the additional air conditioning installation and corresponding operating costs
will be the separate obligation of the Tenant; and

                           7.2.6    Tenant acknowledges and agrees that, while
Landlord may in its sole and absolute discretion engage security personnel to
patrol the Building or the Project, Landlord is not providing any security
services with respect to the Premises and that Landlord shall not be liable to
Tenant for, and Tenant waives any claim against Landlord with respect to, any
loss by theft or any other damage suffered or incurred by Tenant in connection
with any unauthorized entry into the Premises or any other breach of security
with respect to the Premises, the Building or the Project. Tenant hereby agrees
to the exercise by Landlord, within its reasonable discretion, of such security
measures as, but not limited to, the evacuation of the Premises, the Building or
the Project for cause, suspected cause or for drill purposes, the denial of any
access to the Premises, the Building or the Project and other similarly related
actions that it deems necessary to prevent any threat of property damage or
bodily injury. The exercise of such security measures by Landlord, and the
resulting interruption of service and cessation of Tenant's business, if any,
shall not be deemed an eviction or disturbance of Tenant's use and possession of
the Premises, or any part thereof, or render Landlord liable to Tenant for any
resulting damages or relieve Tenant from Tenant's obligations under this Lease.

In the event Tenant desires any of the aforementioned services in amounts in
excess of those deemed by Landlord to be "standard", Tenant shall pay Landlord
as Additional Rent hereunder the cost of providing these additional services.
Failure by Landlord to any extent to furnish any of the above services, or any
cessation thereof, resulting from causes beyond the control of Landlord, shall
not render Landlord liable in any respect for damages to either person or
property, nor shall that event be construed as an eviction of Tenant, nor result
in an abatement of Rent, nor relieve Tenant from any of Tenant's obligations
hereunder (including, but not limited to, the payment of Rent). Should any of
the equipment or machinery utilized in supplying the services listed herein for
any cause cease to function properly, Landlord shall use reasonable diligence to
repair that equipment or machinery promptly, but Tenant shall have no right to

                                       12

<PAGE>

terminate this Lease, and shall have no claim for a reduction, abatement or
rebate of Rent or damages on account of any interruption in service occasioned
thereby or resulting therefrom.

         SECTION 7.3       TENANT'S MAINTENANCE AND REPAIRS. Tenant shall be
obligated to maintain and to make all repairs, replacements or additions of any
kind whatsoever to all personal property located within the Premises and to all
trade fixtures, furnishings and carpet located within the Premises. Tenant also
shall be responsible for maintaining and replacing all specialty lamps, bulbs,
starters and ballasts, and for all non-structural repairs, maintenance, and
replacements related to the decks attached to the Premises and which serve
exclusively the Premises. If a cooling system is installed which serves
exclusively the Premises or any portion thereof, such system shall be
maintained, repaired and replaced by Tenant at Tenant's expense and Tenant shall
contract with a contractor approved by Landlord for the annual maintenance of
such system and provide proof of such maintenance to Landlord upon Landlord's
request.

         SECTION 7.4       TENANT'S ALTERATIONS. Subject to Landlord's prior
written approval, which shall not be unreasonably withheld or delayed, Tenant
may make, at its expense, additional improvements or alterations to the Premises
which it may deem necessary or desirable ("Alterations"). Landlord's approval to
any Alterations may be withheld in Landlord's sole discretion if such
Alterations require any other alteration, addition, or improvement to be
performed or made to any structural portion of the Building, any of the Building
systems, or any portion of the Building other than the Premises, or if such
Alterations do not conform to Landlord's Building Standard Specifications
attached hereto as Exhibit C-1. Any Alterations by Tenant shall be done at
Tenant's sole cost and expense and in compliance with all applicable laws,
rules, and regulations (including, without limitation, the Americans with
Disabilities Act of 1990 (the "ADA") and Landlord's reasonable construction
rules and regulations) and in conformity with plans and specifications approved
by Landlord. Landlord shall have the right, in Landlord's sole discretion, to
contract directly with Landlord's contractor for the installation of the
Alterations. If Landlord contracts directly for the installation of the
Alterations, (1) Tenant shall reimburse Landlord for the costs of installation,
as Additional Rent, within ten (10) days of Tenant's receipt of an invoice for
such costs and/or, at Landlord's election, Tenant shall deposit with Landlord
prior to the commencement of installation of the Alterations up to 100% of the
estimated costs of installation, which Landlord shall apply toward such costs
upon completion of the Alterations, and (2) Tenant shall pay Landlord a
construction management fee equal to four percent (4%) of the total cost of
designing and installing the Alterations, inclusive of taxes, permit fees,
design fees, and construction fees. If Landlord does not elect to contract
directly for the installation of the Alterations, such Alterations shall be
performed by a licensed contractor approved by Landlord; provided, however,
Landlord's consent to any Alterations, or Landlord's approval of plans and
specifications for such Alterations shall create no responsibility or liability
on the part of Landlord for their completeness, design sufficiency, or
compliance with all laws, rules, and regulations (including, without limitation,
the ADA). If requested by Landlord, Tenant shall post a bond or other security
satisfactory to Landlord to protect Landlord against liens arising from work
performed for Tenant. All work performed shall be done in a workmanlike manner
and with materials of the quality and appearance as exist throughout the
Building. Tenant may, at the time of requesting Landlord's consent to
Alterations, further request in writing that Landlord elect, at the time of
granting consent, whether such Alterations must be removed upon termination of
the Lease. If Tenant so requests, Landlord shall make such election at the time
of granting consent to the Alterations. Failure of Landlord to respond to
Tenant's request shall be deemed an election that the Alterations need not be
removed on termination of this Lease. Except for the Alterations that Tenant is
entitled to leave as provided above, Landlord may require Tenant to remove and
restore any Alterations on the termination of this Lease in accordance with
Section 13.2 below. Within thirty (30) calendar days following the completion of
any Alterations, Tenant shall cause to be prepared and delivered to Landlord, at
Tenant's expense, updated "as-built" drawings showing the Premises with the new
Alterations.

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<PAGE>

         SECTION 7.5       LIENS. Tenant shall keep the Premises and the
Building free from any liens arising out of any work performed, material
furnished, or obligations incurred by Tenant. If Tenant disputes the correctness
or validity of any claim of lien, Tenant shall, within ten (10) days after
written request by Landlord, post or provide security in a form and amount
acceptable to Landlord to insure that title to the Project remains free from the
lien claimed.

                              ARTICLE 8. INSURANCE

         SECTION 8.1       USE; RATE. Tenant shall not do anything in or about
the Premises which will in any way tend to increase insurance rates paid by
Landlord on policies of liability or casualty insurance maintained with respect
to the Building and/or Project. In no event shall Tenant carry on any activities
which would invalidate any insurance coverage maintained by Landlord.

         SECTION 8.2       LIABILITY INSURANCE. Tenant shall during the Lease
Term, at its sole expense, maintain in full force a policy or policies of
commercial general liability insurance issued by one or more insurance carriers,
insuring against liability for injury to or death of persons and loss of or
damage to property occurring in or on the Premises and any portion of the Common
Area which is subject to Tenant's exclusive control. Said liability insurance
shall be in an amount not less than Two Million Dollars ($2,000,000.00) combined
single limit for bodily and personal injury and property damage per occurrence
and not less than Three Million Dollars ($3,000,000.00) in the aggregate.

         SECTION 8.3       WORKER'S COMPENSATION INSURANCE. Tenant shall at all
times maintain Worker's Compensation Insurance in compliance with Washington
law.

         SECTION 8.4       CASUALTY INSURANCE. Tenant shall pay for and shall
maintain in full force and effect during the Term of this Lease a standard form
policy or policies of property and all-risk coverage with an extended coverage
endorsement covering all interior glass, whether plate or otherwise, trade
fixtures, equipment, and other personal property located in the Premises and
used by Tenant in connection with its business.

         SECTION 8.5       COMPLIANCE WITH REGULATIONS. Tenant shall, at its own
expense, comply with all requirements, including installation of fire
extinguishers, or automatic dry chemical extinguishing systems, required by
insurance underwriters or any governmental authority having jurisdiction
thereover, necessary for the maintenance of reasonable fire and extended
insurance for the Premises and/or Building.

         SECTION 8.6       WAIVER OF SUBROGATION. Any property and all-risk
coverage insurance carried by Landlord or Tenant insuring, in whole or in part,
the Building and/or the Premises, including improvements, alterations and
changes in and to the Premises made by either of them, and Tenant's trade
fixtures therein shall be written in such a manner as to permit the waiver of
rights of subrogation prior to loss by either party against the other in
connection with loss or damage covered by the policies involved. So long as the
policy or policies can be so written and maintained in effect, neither Landlord
nor Tenant shall be liable to the other for any such loss or damage. Either
party shall, upon request by the other party, furnish such other party evidence
of its compliance with this Section 8.6.

         SECTION 8.7       GENERAL REQUIREMENTS.

                           8.7.1    All policies of insurance required to be
carried hereunder by Tenant shall be written by companies licensed to do
business in Washington and which have A.M. Best rating of not less than A:VIII
or better in the "Best's Key Rating Guide". Tenant shall, when requested by
Landlord, furnish Landlord with a certificate evidencing insurance required to
be maintained by Tenant pursuant to this Article 8 and shall satisfy Landlord
that each such policy is in full force and effect.

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<PAGE>

                           8.7.2    The commercial general liability insurance
required to be carried under Section 8.2 above shall be primary and
non-contributing with the insurance carried by Landlord.

                           8.7.3    Each policy required under Sections 8.2 and
8.4 shall expressly include, severally and not collectively, as named or
additionally named insured thereunder, the Landlord, Landlord's property
manager, and any person or firm designated by the Landlord and having an
insurable interest thereunder, hereinafter called "Additional Insured," as their
respective interests may appear.

                           8.7.4    All insurance policies maintained by Tenant
shall not be subject to cancellation in coverage except upon at least thirty
(30) days' prior written notice to Landlord. The policies of insurance or duly
executed Accord Form 27, Evidence of Property Insurance Forms evidencing such
policies, together with satisfactory evidence of the payment of premiums
thereon, shall be deposited with Landlord on the Lease Commencement Date and not
less than thirty (30) days prior to the expiration of the term of such coverage.

                           8.7.5    If the Tenant fails to procure and maintain
insurance as required by this Article 8, the Landlord may obtain such insurance
and keep it in effect, and the Tenant shall pay to Landlord the premium cost
thereof, upon demand and as Additional Rent, with interest as provided in
Section 21.7 below from the date of payment by the Landlord to the date of
repayment by the Tenant.

                           8.7.6    The limits of any insurance maintained by
Tenant pursuant to this Article 8 shall in no way limit the liability of Tenant
under this Lease.

         SECTION 8.8       BLANKET INSURANCE. The Tenant may fulfill its
insurance obligations hereunder by maintaining a so-called "blanket" policy or
policies of insurance in a form that provides by specific endorsement coverage
not less than that which is required hereunder for the particular property or
interest referred to herein; provided, however, that the coverage required by
this Article 8 will not be reduced or diminished by reason of use of such
blanket policy of insurance.

                     ARTICLE 9. DESTRUCTION AND CONDEMNATION

         SECTION 9.1       TOTAL OR PARTIAL DESTRUCTION.

                           9.1.1    In the event the Building and/or the
Premises is damaged by fire or other perils covered by Landlord's insurance,
Landlord shall:

                                    9.1.1.1      In the event of total
destruction, at Landlord's option, as soon as reasonably possible thereafter,
commence repair, reconstruction and restoration of the Building and/or the
Premises and prosecute the same diligently to completion, in which event this
Lease shall remain in full force and effect; or within sixty (60) days after the
discovery of such damage, elect not to so repair, reconstruct or restore the
Building and/or the Premises, in which event this Lease shall terminate. In
either event, Landlord shall give Tenant written notice of its intention within
said sixty (60) day period. In the event Landlord elects not to restore the
building, and/or the Premises, this Lease shall be deemed to have terminated as
of the date of the discovery of such total destruction.

                                    9.1.1.2      In the event of partial
destruction of the Building and/or the Premises, to an extent not exceeding
twenty-five percent (25%) of the full insurable value thereof, and if the damage
thereto is such that the Building and/or the Premises may be repaired,
reconstructed or restored within a period of ninety (90) days from the date of
the discovery of such casualty, and if Landlord will receive insurance proceeds
sufficient to cover the cost of such repairs, then Landlord shall commence and
proceed diligently with the work of repair, reconstruction and restoration and
this Lease

                                       15

<PAGE>

shall continue in full force and effect. If such work of repair, reconstruction
and restoration shall require a period longer than ninety (90) days or exceeds
twenty-five percent (25%) of the full insurable value thereof, or if said
insurance proceeds will not be sufficient to cover the cost of such repairs,
then Landlord either may elect to so repair, reconstruct or restore and the
Lease shall continue in full force and effect or Landlord may elect not to
repair, reconstruct or restore and the Lease shall then terminate. The foregoing
is subject to the following: Landlord shall, within thirty (30) days after any
casualty, provide Tenant with the reasonable estimate of the time to restore the
Premises. If that estimate is more than one-hundred-eighty (180) days of the
casualty event, or if Landlord actually takes more than one hundred eighty (180)
days after the casualty event to restore, then Tenant may terminate the Lease by
written notice to Landlord. In each case, such notice shall be given within ten
(10) days of receiving Landlord's estimate or, if applicable, within ten (10)
days following the expiration of the 180 day period. Under any of the conditions
of this Section 9.1.1.2, Landlord shall give written notice to Tenant of its
intention within sixty (60) days after Landlord's discovery of such partial
destruction. In the event Landlord elects not to restore the Building and/or the
Premises, this Lease shall be deemed to have terminated as of the date
possession of the Premises is surrendered to Landlord.

                           9.1.2    Upon any termination of this Lease under any
of the provisions of this Section 9.1, the parties shall be released without
further obligation to the other from the date possession of the Premises is
surrendered to Landlord except for items which have therefore accrued and are
then unpaid.

                           9.1.3    In the event of repair, reconstruction and
restoration by Landlord as herein provided, the Rent payable under this Lease
shall be abated proportionately with the degree to which Tenant's use of the
Premises is impaired during the period of such repair, reconstruction or
restoration; provided that there shall be no abatement of Rent if such damage is
the result of Tenant's intentional wrongdoing. Tenant shall not be entitled to
any compensation or damages for loss in the use of the whole or any part of the
Premises and/or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration. Tenant shall not be released from any of
its obligations under this Lease except to the extent and upon the conditions
expressly stated in this Section 9.1. Notwithstanding anything to the contrary
contained in this Section 9.1, if Landlord is delayed or prevented from
repairing or restoring the damaged Premises within one (1) year after the
discovery of such damage or destruction by reason of acts of God, war,
governmental restrictions, inability to procure the necessary labor or
materials, or other cause beyond the control of Landlord, Landlord, at its
option, may terminate this Lease, whereupon Landlord shall be relieved of its
obligation to make such repairs or restoration and Tenant shall be released from
its obligations under this Lease as of the end of said one year period.

                           9.1.4    If damage is due to any cause other than
fire or other peril covered by extended coverage insurance, Landlord may elect
to terminate this Lease.

                           9.1.5    If Landlord is obligated to or elects to
repair or restore as herein provided, Landlord shall be obligated to make repair
or restoration only of those portions of the Building and the Premises which
were originally provided at Landlord's expense, and the repair and restoration
of items not provided at Landlord's expense shall be the obligation of Tenant.

                           9.1.6    Notwithstanding anything to the contrary
contained in this Section 9.1, Landlord shall not have any obligation whatsoever
to repair, reconstruct or restore the Premises when the damage resulting from
any casualty covered under this Section 9.1 is discovered during the last twelve
(12) months of the Term of this Lease or any extension hereof.

                           9.1.7    Landlord and Tenant hereby waive the
provisions of any statutes or court

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<PAGE>

decisions which relate to the abatement or termination of leases when leased
property is damaged or destroyed and agree that such event shall be exclusively
governed by the terms of this Lease.

         SECTION 9.2       CONDEMNATION. If the whole of the Building or the
Premises, or such portion thereof as shall be required for its reasonable use,
shall be taken by virtue of any condemnation or eminent domain proceeding, this
Lease shall automatically terminate as of the date of the condemnation, or as of
the date possession is taken by the condemning authority, whichever is later.
Current Rent shall be apportioned as of the date of the termination. In case of
a taking of a part of the Premises or a part of the Building not required for
the reasonable use of the Premises, then this Lease shall continue in full force
and effect and the Rental shall be equitably reduced based upon the proportion
by which the Rentable Area of the Premises is reduced. This Rent reduction shall
be effective on the date of the partial taking. No award, settlement in lieu of
an award, or any partial or entire taking shall be apportioned, and Tenant
hereby assigns to Landlord any award or settlement in lieu of an award which may
be made in the taking or condemnation proceeding, together with any and all
rights of Tenant now or hereafter arising in or to the same or any part thereof;
provided that nothing herein shall prevent Tenant from making a separate claim
against the condemning authority for the taking of Tenant's personal property
and/or moving costs so long as such claim in no way affects the award to be
received by Landlord.

         SECTION 9.3      SALE UNDER THREAT OF CONDEMNATION. A sale by Landlord
to any authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed to
be a taking under the power of eminent domain for all purposes under this
Article 9.

                        ARTICLE 10. INDEMNITY AND WAIVER

         SECTION 10.1      INDEMNITY.

                           10.1.1   Tenant, as a material part of the
consideration to be rendered to Landlord, and subject to subsection 10.1.2
below, hereby agrees to defend, indemnify, and hold Landlord harmless against
any and all claims, costs, and liabilities, including reasonable attorneys' fees
and costs (including costs and fees associated with any lawsuit or appeal),
arising by reason of any injury or claim of injury to person or property, of any
nature and howsoever caused, arising out of the use, occupation and/or control
of the Premises, or from any breach of the terms of this Lease, or any violation
of any governmental or insurance requirements by Tenant, its sublessees,
assignees, invitees, agents, employees, contractors, or licensees, except and to
the extent as may arise out of the willful or negligent acts of Landlord or
Landlord's agents, employees or contractors. Landlord, as a material part of the
consideration to be rendered to Landlord, hereby agrees to defend, indemnify,
and hold Tenant harmless against any and all claims, costs, and liabilities,
including reasonable attorneys' fees and costs (including costs and fees
associated with any lawsuit or appeal), arising by reason of any injury or claim
of injury to person or property, of any nature and howsoever caused, arising out
of any breach of the terms of this Lease by Landlord, or any violation of any
governmental or insurance requirements by Landlord, its sublessees, assignees,
agents, employees, or contractors, except and to the extent as may arise out of
the willful or negligent acts of Tenant or Tenant's agents, employees or
contractors

                           10.1.2   In the event of concurrent negligence of
Tenant, its sublessees, assignees, invitees, agents, employees, contractors, or
licensees on the one hand, and that of Landlord, its agents, employees, or
contractors on the other hand, which concurrent negligence results in injury or
damage to persons or property of any nature and howsoever caused, and relates to
the construction, alteration, repair, addition to, subtraction from, improvement
to or maintenance of the Premises, Common Areas, or Building, Tenant's
obligation to indemnify Landlord as set forth in this Section 10.1 shall be
limited to the extent of Tenant's negligence, and that of Tenant's sublessees,
assignees, invitees, agents, employees,

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<PAGE>

contractors or licensees, including Tenant's proportional share of costs,
attorneys' fees and expenses incurred in connection with any claim, action or
proceeding brought with respect to such injury or damage. TENANT AGREES THAT IT
WILL NOT ASSERT ITS INDUSTRIAL INSURANCE IMMUNITY IF SUCH ASSERTION WOULD BE
INCONSISTENT WITH LANDLORD'S RIGHT TO INDEMNIFICATION FROM TENANT PURSUANT TO
THIS SECTION 10.1. THE PARTIES AGREE THAT THIS PROVISION WAS MUTUALLY
NEGOTIATED.

         SECTION 10.2      WAIVER. All property kept, stored or maintained on
the Premises shall be so kept, stored or maintained at the sole risk of Tenant.
Except in the case of Landlord's negligence or willful misconduct, Landlord
shall not be liable, and Tenant waives all claims against Landlord, for damages
to persons or property sustained by Tenant or by any other person or firm
resulting from the Building or by reason of the Premises or any equipment
located therein becoming out of repair, or through the acts or omissions of any
persons present in the Building (including the Common Areas) or renting or
occupying any part of the Building (including the Common Areas), or for loss or
damage resulting to Tenant or its property from burst, stopped or leaking
sewers, pipes, conduits, or plumbing fixtures, or for interruption of any
utility services, or from any failure of or defect in any electric line,
circuit, or facility, or any other type of improvement or service on or
furnished to the Premises or the Common Areas or resulting from any accident in,
on, or about the Premises or the Common Areas.

                               ARTICLE 11. DELAYS

         SECTION 11.1      DELAYS. If either party is delayed in the performance
of any covenant of this Lease because of any of the following causes (referred
to as "Force Majuere"): acts of the other party, action of the elements, war,
riot, acts of terrorism, labor disputes, inability to procure or general
shortage of labor or materials in the normal channels of trade, delay in
transportation, delay in inspections, government actions, or any other cause
beyond the reasonable control of the party so obligated, whether similar or
dissimilar to the foregoing, financial inability excepted, then that performance
shall be excused for the period of the delay but shall in no way affect Tenant's
obligation to pay Rent or the length of the Lease Term.

                 ARTICLE 12. ASSIGNMENT, SUBLEASE AND SUCCESSION

         SECTION 12.1      CONSENT REQUIRED. Tenant shall neither assign this
Lease or any interest herein, nor sublet, license, grant any concession, or
otherwise give permission to anyone other than Tenant to use or occupy all or
any part of the Premises without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, provided that (i) Tenant
is not then in default under this Lease nor is any event then occurring which
with the giving of notice or the passage of time, or both, would constitute a
default hereunder, and (ii) Tenant has not previously assigned or transferred
this Lease or any interest herein or subleased the Premises or any part thereof,
it being understood that subsubleasing or multiple assignments of this Lease
shall be prohibited.

         When Tenant requests Landlord's consent to such assignment or
subletting, it shall notify Landlord in writing of the name and address of the
proposed assignee or subtenant and the nature and character of the business of
the proposed assignee or subtenant and shall provide current and prior financial
statements for the proposed assignee or subtenant, which financial statements
shall be audited to the extent available and shall in any event be prepared in
accordance with generally accepted accounting principles. Tenant shall also
provide Landlord with a copy of the proposed sublease or assignment agreement,
including all material terms and conditions thereof. Landlord shall have the
option, to be exercised within thirty (30) days of receipt of the foregoing, to
(1) recapture the Premises in accordance with subsection 12.4 below, (2) consent
to the proposed assignment or sublease, or (3) refuse its consent to the
proposed assignment or sublease. In any event, Landlord may withhold its consent
to any

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<PAGE>

assignment or sublease, if (i) the actual use proposed to be conducted in the
Premises or portion thereof conflicts with the provisions of any other lease
which restricts the use to which any space in the Building or the Project may be
put, (ii) the portion of the Premises proposed to be sublet is irregular in
shape and/or does not permit safe or otherwise appropriate means of ingress and
egress, or does not comply with governmental safety and other codes, (iii) the
proposed sublessee or assignee is either a governmental agency or
instrumentality thereof; (iv) the proposed sublessee or assignee, or any person
or entity which directly or indirectly, controls, is controlled by, or is under
common control with, the proposed sublessee or assignee, either (x) occupies
space in the Project at the time of the request for consent, or (y) is
negotiating with Landlord or has negotiated with Landlord during the six (6)
month period immediately preceding the date Landlord receives Tenant's request
for consent, to lease space in the Project. Anything contained in this Article
12 to the contrary notwithstanding, Landlord's consent is not required, but
Tenant shall still provide advance written notice to Landlord with respect to,
an assignment of this Lease, or a subletting of all or part of the Premises, to
(a) the parent of Tenant or to a wholly-owned subsidiary of Tenant or of such
parent, (b) any corporation or other entity into which or with which Tenant may
be merged or consolidated (provided that the financial condition of Tenant is
not materially adversely affected by such merger or consolidation) or which may
acquire all of the stock or beneficial interests of Tenant, (c) any entity to
which Tenant sells all or substantially all of its assets, provided that such
entity expressly assumes all of Tenant's obligations hereunder, or (d) a
subletting to an entity with which Tenant is engaged in a joint venture or a
joint teaching program (all of the above being referred to as a "Permitted
Transfer"). Transfer of all or any portion of the ownership of stock in Tenant
shall not be deemed an assignment of this Lease (i) if such transfer is less
than fifty percent (50%) of the issued and outstanding stock of Tenant or (ii)
if such transfer is made (x) pursuant to or in connection with an initial public
offering or any subsequent offering of the stock of Tenant, or (y) once the
stock of Tenant is publicly traded on a recognized public stock exchange.

         SECTION 12.2      GENERAL CONDITIONS. If Landlord approves an
assignment or subletting as herein provided, Tenant shall pay to Landlord, as
Additional Rent, fifty percent (50%) of the excess, if any, of (1) the
consideration (including rent and any additional rent) payable by the assignee
or sublessee to Tenant, without deduction of any costs incurred in connection
with such assignment or subletting including, without limitation, leasing
commissions, tenant improvement costs, or attorneys fees, if any, incurred by
Tenant in connection with such assignment or sublease regardless of whether or
not Tenant ever occupied the Premises prior to such assignment or sublease;
minus (2) Base Rent plus Additional Rent allocable to that part of the Premises
affected by such assignment or sublease pursuant to the provisions of this
Lease. If such consideration is received by Tenant in one or more lump sums,
Landlord may elect to require Tenant to pay such consideration to Landlord in
equal monthly installments over the term of the sublease or assignment, as the
case may be. The assignment or sublease agreement, as the case may be, after
approval by Landlord, shall not be amended or terminated without Landlord's
prior written consent, which consent shall not be unreasonably withheld or
delayed. In the event of any assignment or sublease; Tenant shall remain
primarily liable on its covenants hereunder unless released in writing by
Landlord. In the event of any assignment or sublease, the assignee or sublessee
shall agree in writing to perform and be bound by all of the covenants of this
Lease required to be performed by Tenant. Within ten (10) days after Landlord's
request, Tenant shall pay Landlord a reasonable fee for each assignment or
sublease it is requested to approve based on Landlord's time spent reviewing the
proposed assignment or sublease or a termination or assignment thereof (whether
or not an assignment or sublease is actually consummated) together with third
party fees (including, without limitation, the fees of Landlord's counsel,
architect, and other consultants), incurred in connection with Landlord's review
and processing of documents regarding any proposed assignment or sublease.
Notwithstanding anything in this Lease to the contrary, in the event Landlord
consents to an assignment or subletting by Tenant in accordance with the terms
of this Section, Tenant's assignee or subtenant shall have no right to further
assign this Lease or any interest therein or thereunder or to further sublease
all or any portion of the Premises. In furtherance of the foregoing, Tenant
acknowledges and agrees on behalf of itself and any

                                       19

<PAGE>

assignee or subtenant claiming under it (and any such assignee or subtenant by
accepting such assignment or sublease shall be deemed to acknowledge and agree)
that no sub-subleases or further assignments of this Lease shall be permitted at
any time.

         SECTION 12.3      SUCCESSION. Subject to any limitations on assignment
and subletting set forth herein, all the terms and provisions of this Lease
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

         SECTION 12.4      RIGHT OF RECAPTURE. Notwithstanding any provisions of
this Article 12 to the contrary, after the Landlord receives a request from
Tenant to consent to either an assignment or sublease of all or more than
twenty-five percent (25%) of the Premises for a term exceeding six (6) months,
Landlord shall have the option, to be exercised by written notice within thirty
(30) days after the receipt of such request, to terminate this Lease and the
Term hereof with respect to the portion of the Premises being subleased or
assigned on a date specified in Landlord's termination notice provided, however,
such date, at Landlord's option, shall either be (i) not less than ninety (90)
days following Landlord's notice to the Tenant, or (ii) the proposed effective
date of the sublease or assignment. If the Landlord elects to terminate this
Lease as aforesaid, the Tenant shall have the right, to be exercised by written
notice to the Landlord within ten (10) days after receipt of such notice of
termination, to withdraw the request for consent to the proposed assignment or
sublease, in which case the Tenant shall not proceed with such assignment or
sublease, the notice of termination shall be null and void and this Lease shall
continue in full force and effect in accordance with its terms.

                       ARTICLE 13. SURRENDER OF POSSESSION

         SECTION 13.1      SURRENDER. At the expiration of the Lease created
hereunder, whether by lapse of time or otherwise, Tenant shall surrender the
Premises to Landlord.

         SECTION 13.2      CONDITION AT TIME OF SURRENDER. Furnishings, trade
fixtures and equipment including but not limited to voice and data cabling and
other telecommunications equipment installed by Tenant shall be the property of
Tenant. Upon termination of this Lease, Tenant shall remove any such property.
Tenant shall repair or reimburse Landlord for the cost of repairing any damage
to the Premises and/or Common Areas resulting from the installation or removal
of Tenant's property, and Tenant shall deliver the Premises to Landlord in clean
and good condition, except for reasonable wear and tear and damage by casualty.

                            ARTICLE 14. HOLDING OVER

         SECTION 14.1      HOLDING OVER. This Lease shall terminate without
further notice at the expiration of the Lease Term. Any holding over by Tenant
without the express written consent of Landlord shall not constitute the renewal
or extension of this Lease or give Tenant any rights in or to the Premises. In
the event of such a holding over by Tenant without the express written consent
of Landlord, the monthly Rent payments to be paid by Tenant shall be subject to
increase at the sole discretion of Landlord in an amount equal to the greater of
one hundred twenty-five percent (125%) of the fair market rental value for the
Premises as determined by Landlord or one hundred fifty percent (150%) of the
Basic Rent last due in this Lease, plus Additional Rent and parking charges at
Landlord's current market rates; provided, however, no payment of such increased
Rental by Tenant shall be deemed to extend or renew the Term of this Lease, and
such Rental payments shall be fixed by Landlord only to establish the amount of
liability for payment of Rent on the part of Tenant during such period of
holding over. In the event Landlord shall give its express written consent to
Tenant to occupy the Premises beyond the expiration of the Term, that occupancy
shall be construed to be a month-to-month tenancy upon all the same terms and
conditions as set forth herein unless modified by Landlord in such written
consent; provided that Rent

                                       20

<PAGE>

charged during any period of holding over shall be as stated above.

                          ARTICLE 15. ENTRY BY LANDLORD

         SECTION 15.1      ENTRY BY LANDLORD. Landlord reserves, and shall at
any and all times have, upon at least 24 hours prior notice (except for routine
maintenance and cleaning and except in the case of an emergency), the right to
enter the Premises during business hours to inspect the same, to show the
Premises to prospective purchasers or lessees, to post notices of
nonresponsibility, to repair the Premises and any portion of the Building that
Landlord may deem necessary or desirable, without abatement of Rent, and may for
that purpose erect scaffolding and other necessary structures where reasonably
required by the character of the work to be performed; provided, that the
entrance to the Premises shall not be blocked unreasonably thereby and,
provided, further that the business of the Tenant shall not be interfered with
unreasonably. Tenant hereby waives any claim for damages, injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned by Landlord's
exercise of its rights pursuant to this Section 15.1, except and to the extent
any such damage, injury or interference results from the negligence of Landlord.
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, upon and about the Premises, excluding Tenant's vaults, safes and
files, and Landlord shall have the right to use any and all means which Landlord
may deem proper to open the doors to or in the Premises in an emergency, in
order to obtain entry to the Premises without liability to Tenant. Any entry to
the Premises obtained by Landlord by any of these means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction of Tenant from the
Premises or any portion thereof.

         SECTION 15.2      FAILURE TO SURRENDER. If Tenant fails to surrender
the Premises upon the expiration or termination of this Lease, Tenant shall
indemnify and hold Landlord harmless from loss and liability resulting from that
failure, including, without limiting the generality of the foregoing, any claims
made by any succeeding tenant.

                            ARTICLE 16. SUBORDINATION

         SECTION 16.1      LEASE SUBORDINATE TO MORTGAGES. This Lease shall
automatically be subordinate to any existing mortgages or deeds of trust which
affect the Project, the Building and/or the Premises; to any first mortgages or
deeds of trust hereafter affecting the Project, the Building and/or the
Premises, and to all renewals, modifications, consolidations, replacements or
extensions thereof. This provision shall be self-operative and no further
instrument of subordination shall be required by any existing or first mortgagee
or beneficiary of a deed of trust; provided, that Tenant shall have the
continued enjoyment of the Premises free from any disturbance or interruption by
any existing or first mortgagee or beneficiary of a deed of trust, or any
purchaser at a foreclosure or private sale of the Project as a result of
Landlord's default under a mortgage or deed of trust, so long as Tenant is not
then in default under the terms and conditions of this Lease. In the event of
the foreclosure of a deed of trust or mortgage affecting the Project, judicially
or nonjudicially, or if title to the Project is conveyed by deed in lieu of
foreclosure, Tenant agrees to attorn to and accept the purchaser(s) at the
foreclosure sale(s) conducted pursuant to the deed of trust or mortgage or the
grantee(s) in such deed(s) in lieu of foreclosure and his or its (or their)
heirs, legal representatives, successors and assigns as Landlord under this
Lease for the balance then remaining of the term hereof, subject to all terms
and conditions of this Lease. Tenant shall, within ten (10) days of
presentation, acknowledge and deliver to Landlord a subordination or
non-disturbance agreement to carry out the provisions of this Article.

                                       21

<PAGE>

         SECTION 16.2      ESTOPPEL CERTIFICATES. Each party shall, from time to
time, upon written request of the other, execute, acknowledge and deliver to the
other or its designee a written statement specifying the following, subject to
any modifications necessary to make such statements true and complete: (i) the
date the Lease Term commenced and the date it expires; (ii) the amount of
minimum monthly Base Rent and additional Rent, and the date to which such Rent
has been paid; (iii) that this Lease is in full force and effect and has not
been assigned, modified, supplemented or amended in any way; (iv) that this
Lease represents the entire agreement between the parties; (v) that all
conditions under this Lease to be performed by Landlord or Tenant have been
satisfied; (vi) that there are no existing claims, defenses or offsets that the
Tenant has against the enforcement of this Lease by Landlord; (vii) that no Rent
has been paid more than one month in advance; and (viii) that no security has
been deposited with Landlord (or, if so, the amount thereof). Any such statement
delivered pursuant to this Section may be relied upon by a prospective purchaser
of Landlord's interest or assignee of any mortgage or new mortgagee of
Landlord's interest in the Premises-and any lender to or assignee or sublessee
of Tenant. If the party to whom a request is made shall fail to respond within
ten (10) days of receipt of a written request by the other as herein provided,
the party to whom the request is made shall be deemed to have given such
certificate as above provided without modification and shall be deemed to have
admitted the accuracy of any information set forth in the form provided by the
requesting party. If Tenant shall fail to provide such certificate within ten
(10) days of receipt by Tenant of a written request by Landlord as herein
provided, such failure shall, at Landlord's election, constitute a material
default under this Lease (without the requirement of any additional notice of
default).

                         ARTICLE 17. DEFAULT AND REMEDY

         SECTION 17.1      EVENTS OF TENANT'S DEFAULT. The occurrence of any one
or more of the following events shall constitute a material default in breach of
this Lease by Tenant:

                  17.1.1   Vacation or abandonment of the Premises;

                  17.1.2   Failure by Tenant to make any payment required as and
when due, where that failure shall continue for a period of five (5) calendar
days after Landlord gives written notice to Tenant of that failure;

                  17.1.3   Failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease, other than making any payment
when due, where that failure shall continue for a period of thirty (30) calendar
days after Landlord gives written notice to Tenant of that failure or if such
failure is not reasonably capable of being cured within such thirty (30) day
period, Tenant shall not be in default unless Tenant has failed to commence the
cure and diligently pursue the cure to completion; and

                  17.1.4   Making by Tenant of any general assignment or general
arrangement for the benefit of creditors; the filing by or against Tenant of a
petition in bankruptcy, including reorganization or arrangement, unless, in the
case of a petition filed against Tenant, the petition is dismissed within sixty
(60) calendar days; or the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises, or
of Tenant's interest in this Lease.

         SECTION 17.2      REMEDIES. In the event of any breach or default by
Tenant under the terms or provisions of this Lease, Landlord, in addition to any
other rights or remedies that it may have, shall have the immediate right of
reentry. Should Landlord elect to reenter or take possession of the Premises, it
may either terminate this Lease, or from time to time, without terminating this
Lease, relet the Premises or any part thereof for the account and in the name of
the Tenant or otherwise, for any term or terms and conditions as Landlord in its
sole discretion may deem advisable, with the right to complete construction of
or make alterations and repairs to the Premises and/or improvements installed by
Tenant. Tenant shall

                                       22

<PAGE>

pay to Landlord in the event of reletting, as soon as ascertained, the costs and
expenses incurred by Landlord in the reletting, completion of construction, or
in making any alterations and repairs. Rentals received by Landlord from any
reletting shall be applied: first, to the payment of any indebtedness, other
than Rent, due hereunder from Tenant to Landlord; second, to the payment of Rent
due and unpaid hereunder and to any other payments required to be made by the
Tenant hereunder; and the residue, if any, shall be held by Landlord as payment
of future Rent or damages in the event of termination as the same may become due
and payable hereunder; and the balance, if any, at the end of the Term of this
Lease shall be paid to Tenant. Should rental received from time to time from the
reletting during any month be a lesser Rental than herein agreed to by Tenant,
the Tenant shall pay the deficiency to Landlord. The Tenant shall pay the
deficiency each month as the amount thereof is ascertained by the Landlord.
Notwithstanding the foregoing, Landlord shall also have the right upon Tenant's
default to terminate this Lease, accelerate all Rental payments due under this
Lease for the remaining Term hereof, or if Tenant has been granted an option to
extend and that option has been exercised, for the remainder of the option term,
and shall be entitled to recover from Tenant the total amount of unpaid Rent
together with all past due Rent and any other payment due hereunder, less the
amount which is established to be the reasonable rental value of the Premises
for the remaining Term, after taking into consideration normal duration of
vacancy periods, tenant improvement costs and Landlord's reasonably anticipated
costs of reletting the Premises.

         SECTION 17.3      RELETTING. No reletting of the Premises by Landlord
permitted under Section 17.2 shall be construed as an election on Landlord's
part to terminate this Lease unless a notice of Landlord's intention to
terminate is given to Tenant, or unless the termination of the Lease, is decreed
by a court of competent jurisdiction. In the event of reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for a previous breach, provided it has not been cured. Should Landlord at any
time terminate this Lease for any breach, in addition to any other remedy it may
have, it may recover from Tenant all damages it may incur by reason of that
breach.

         SECTION 17.4      DEFAULT OF LANDLORD. Landlord shall not be in default
unless Landlord fails to perform its obligations under this Lease within thirty
(30) calendar days after written notice by Tenant, or if such failure is not
reasonably capable of being cured within such thirty (30) day period, Landlord
shall not be in default unless Landlord has failed to commence the cure and
diligently pursue the cure to completion.

         SECTION 17.5      NON-WAIVER. Failure by Landlord to take action or
declare a default as a result of any breach of any term, covenant or condition
herein contained shall not be deemed to be a waiver of that term, covenant, or
condition, or of any subsequent breach of any term, covenant or condition herein
contained. The subsequent acceptance of Rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
Rental so accepted, regardless of Landlord's knowledge of that preceding breach
at the time of acceptance of the Rent.

         SECTION 17.6      MORTGAGEE PROTECTION. In the event of any uncured
default on the part of Landlord, which default would entitle Tenant to terminate
this Lease, Tenant shall not terminate this Lease unless Tenant has notified any
mortgagee or beneficiary of deed of trust, whose address shall have been
furnished to Tenant, at least sixty (60) days in advance of the proposed
effective date of the termination. During the sixty (60) day period the
mortgagee or beneficiary shall be entitled to commence to cure the default. If
the default is not capable of being cured with due diligence within the sixty
(60) day period, the Lease shall not be terminated if the mortgagee or
beneficiary of a deed of trust shall have commenced to cure the default within
the sixty (60) day period and shall pursue the cure with due diligence
thereafter. If the default is one which is not capable of cure by the mortgagee
or beneficiary of a deed of trust within the sixty (60) day period because the
mortgagee or beneficiary of a deed of trust is

                                       23

<PAGE>

not in possession of the Building or Project, the sixty (60) day period shall be
extended to include the time needed to obtain possession of the Premises by the
mortgagee or beneficiary of a deed of trust by power of sale, judicial
foreclosure, or other legal action required to recover possession, provided that
these avenues are pursued with due diligence.

                       ARTICLE 18. LIMITATION OF LIABILITY

         SECTION 18.1      LIMITATION OF LANDLORD'S LIABILITY. Tenant agrees
that, in the event of any default or breach by Landlord under this Lease or
arising in connection herewith or with Landlord's operation, management,
leasing, repair, renovation, alteration or any other matter relating to the
Project or the Premises, Tenant's remedies shall be limited solely and
exclusively to an amount which is equal to the interest in the Building of the
then current Landlord and the rents and insurance proceeds thereof. For purposes
of this Lease, "Landlord Parties" shall mean, collectively Landlord, its
partners, shareholders, officers, directors, employees, investment advisors, or
any successor in interest of any of them. Except for intentional acts by
Landlord or Landlord Parties, neither Landlord, nor any of the Landlord Parties
shall have any personal liability therefor, and Tenant hereby expressly waives
and releases such personal liability on behalf of itself and all persons
claiming by, through or under Tenant. The limitations of liability contained in
this Paragraph 18 shall inure to the benefit of Landlord's and the Landlord
Parties' present and future partners, beneficiaries, officers, directors,
trustees, shareholders, agents and employees, and their respective partners,
heirs, successors and assigns. Except as expressly set forth above, neither
Landlord nor the Landlord Parties shall be liable under any circumstances for
injury or damage to, or interference with Tenant's business, including but not
limited to, loss or profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use, in each case, however occurring.
The provisions of this section shall apply only to the Landlord and the parties
herein described, and shall not be for the benefit of any insurer or any other
third party.

                               ARTICLE 19. NOTICES

         SECTION 19.1      NOTICES. All notices under this Lease shall be in
writing and effective (i) when delivered in person; or (ii) three (3) days after
being deposited in U.S. registered or certified mail, return receipt requested,
postage prepaid, properly addressed to Landlord or Tenant, as the case may be;
or (iii) one (1) day after being deposited with an overnight courier service of
recognized standing, properly addressed to Landlord or Tenant, as the case may
be; or (iv) upon confirmed transmission by facsimile to such persons. As of the
Lease Commencement Date, the addresses and facsimile numbers of the Landlord and
Tenant are as specified in the Lease Summary.

                        ARTICLE 20. HAZARDOUS SUBSTANCES

         SECTION 20.1      PRESENCE AND USE OF HAZARDOUS SUBSTANCES. Landlord
represents that, to the best of its knowledge, the Premises and the Building do
not contain any Hazardous Substances in violation of any applicable laws. Tenant
shall not, without Landlord's prior written consent, keep on or around the
Premises, Common Areas or Building, for use, disposal, transportation,
treatment, generation, storage or sale, any substances designated as, or
containing components designated as, hazardous, dangerous, toxic or harmful
(collectively referred to as "Hazardous Substances"), and/or are subject to
regulation by any federal, state or local law, regulation, statute or ordinance.

         SECTION 20.2      CLEANUP COSTS, DEFAULT AND INDEMNIFICATION. Tenant
shall be fully and completely liable to Landlord for any and all cleanup costs
and any and all other charges, fees, penalties (civil and criminal) imposed by
any governmental authority to the extent caused by Tenant's use, disposal,
transportation, treatment, generation, storage and/or sale of Hazardous
Substances, in or about the Premises, Common Areas, or Building, whether or not
consented to by Landlord. Tenant shall

                                       24

<PAGE>

indemnify, defend and hold Landlord harmless from any and all of the costs,
fees, penalties, liabilities and charges incurred by, assessed against or
imposed upon Landlord (as well as Landlord's attorneys' fees and costs) to the
extent caused by Tenant's use, disposal, transportation, treatment, generation,
storage and/or sale of Hazardous Substances.

                            ARTICLE 21. MISCELLANEOUS

         SECTION 21.1      HEADINGS. The headings used in this Lease are for
convenience only. They shall not be construed to limit or to extend the meaning
of any part of this Lease.

         SECTION 21.2      AMENDMENTS. Any amendments or additions to this Lease
shall be in writing by the parties hereto, and neither Tenant nor Landlord shall
be bound by any verbal or implied agreements.

         SECTION 21.3      TIME OF THE ESSENCE. Time is expressly declared to
be of the essence of this Lease.

         SECTION 21.4      ENTIRE AGREEMENT. This Lease contains the entire
agreement of the parties hereto with respect to the matters covered hereby, and
no other agreement, statement or promise made by any party hereto, or to any
employee, officer or agent of any party hereto, which is not contained herein,
shall be binding or valid.

         SECTION 21.5      LANGUAGE. The words "Landlord" and "Tenant", when
used herein, shall be applicable to one (1) or more persons, as the case may be,
and the singular shall include the plural and the neuter shall include the
masculine and feminine, and if there be more than one (1) the obligations hereof
shall be joint and several. The word "persons" whenever used shall include
individuals, firms, associations and corporations and any other legal entity, as
applicable. The language in all parts of this Lease shall in all cases be
construed as a whole and in accordance with its fair meaning, and shall not be
construed strictly for or against Landlord or Tenant.

         SECTION 21.6      INVALIDITY. If any provision of this Lease shall be
deemed to be invalid, void or illegal, it shall in no way affect, impair or
invalidate any other provision hereof.

         SECTION 21.7      LATE CHARGES. Tenant hereby acknowledges that late
payment by Tenant to Landlord of Rent or other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which is difficult to determine, but include, without limitation, processing and
accounting charges, and late charges which may be imposed upon Landlord by the
terms of any mortgage or deed of trust covering the Premises. Therefore, in the
event Tenant shall fail to pay any installment of Rent or other sum due
hereunder within three (3) calendar days of the due date, Tenant shall pay to
Landlord as Additional Rent and as a reasonable estimate of the costs to
Landlord, a late charge equal to five percent (5%) of each installment. A Fifty
Dollar ($50.00) charge will be paid by the Tenant to the Landlord for each
returned check. In the event Landlord pays any sum or expense on behalf of
Tenant which Tenant is obligated to pay hereunder, or in the event Landlord
expends any other sum or incurs any expense, or Tenant fails to pay any sum due
hereunder, Landlord shall be entitled to receive interest upon that sum at the
rate of twelve percent (12%) per annum until paid.

         SECTION 21.8      RELOCATION. Intentionally deleted.

         SECTION 21.9      COMPUTATION OF TIME. The word "day" means "calendar
day" herein, and the computation of time shall include all Saturdays, Sundays
and holidays for purposes of determining time periods specified herein.

                                       25

<PAGE>

         SECTION 21.10     APPLICABLE LAW. This Lease shall be interpreted and
construed under and pursuant to the laws of the State of Washington.

         SECTION 21.11     ATTORNEYS' FEES. In the event either party requires
the services of an attorney in connection with enforcing the terms of this Lease
or in the event suit is brought for the recovery of any Rent due under this
Lease for the breach of any covenant or condition of this Lease, or for the
restitution of the Premises to Landlord, and/or eviction of Tenant during the
Term of this Lease or after the expiration thereof, the prevailing party will be
entitled to a reasonable sum for attorneys' fees, witness fees, and other court
costs, both at trial and on appeal.

         SECTION 21.12     TERMINATION. Upon the termination of this Lease by
expiration of time or otherwise, the rights of Tenant and all persons claiming
under Tenant in and to the Premises shall cease.

         SECTION 21.13     BROKER'S COMMISSION. Tenant represents and warrants
that it has incurred no liabilities or claims for brokerage commissions or
finder's fees in connection with the negotiation and/or execution of this Lease
and that it has not dealt with or has any knowledge of any real estate
broker/agent or salesperson in connection with this Lease except for those
identified in the Lease Summary. Tenant agrees to indemnify, defend, and hold
Landlord harmless from and against, all of such liabilities and claims
(including, without limitation, attorneys' fees and costs) made by any other
broker/agent or salesperson claiming to represent Tenant in connection with this
Lease.

         SECTION 21.14     SIGNS OR ADVERTISING.

         (a)      GENERAL. The Tenant will not inscribe any inscription or post,
place, or in any manner display any sign, notice, picture or poster or any
advertising matter whatsoever, anywhere in or about the Premises or Building
that can be seen from outside the Premises, without first obtaining Landlord's
written approval thereof, which approval may be withheld in Landlord's sole
discretion, including, without limitation, approval of the size, color, and
electrical load (if any). Any approval so obtained from Landlord shall be with
the understanding and agreement that Tenant will (1) install any such item using
Landlord's approved contractor, (2) be solely responsible for the maintenance,
repair and replacement of such item, and (3) remove these items within ten (10)
days after the termination of the Lease Term and repair and restore any damage
or injury to the Premises or the Building caused either by the installation or
removal of the item. Landlord will install and maintain a directory of tenants
in the principal lobby entrances of the Building, and Landlord may, as it may
determine from time to time, publish or advertise the tenancy list of Landlord's
Building. Tenant shall not use photographs, drawings, or other renderings of the
Building, the Building logo or trade name, or any other proprietary name, mark
or symbol of Landlord without first obtaining Landlord's prior written consent,
which consent may be withheld in Landlord's sole discretion.

         (b)      EXTERIOR SIGN. Tenant may, at its sole cost and expense, affix
one (1) sign on the Building. All signage, including design, plans,
specifications (including, without limitation, size, color, and electrical
load), location and manner of attachment to the Building and/or placement on the
Real Property, shall be subject to Landlord's prior review and approval (which
approval shall not be unreasonably withheld or delayed) and shall comply with
all applicable codes and governmental requirements. All signage shall be
installed by a contractor approved in advance by Landlord. The exterior Building
sign will employ channel illuminated letters. Tenant shall be solely responsible
for all costs and expenses relating to the signs, including but not limited to
the installation, maintenance, repair, replacement, electrical consumption and
removal of Tenant's signage, whether during the term of the Lease or upon an
earlier termination of the Lease or Tenant's vacation of its Premises (for
whatever reason). The removal of all exterior Building signage shall be
performed by Landlord's contractor at Tenant's expense and Landlord shall have
the right to have such removal performed within seven (7) days

                                       26

<PAGE>

after the expiration or earlier termination of the Lease term. Tenant shall be
responsible for all costs of Building and grounds restoration with respect to
the signage as part of its obligation hereunder and all landscaping installed in
connection with a monument sign shall be installed and maintained by Landlord at
Tenant's expense. Tenant's signage rights hereunder are personal to Tenant and
may not be assigned, exercised, voluntarily or involuntarily, by or to any party
or entity other than Tenant; further, Tenant's signage rights may be terminated,
at Landlord's sole discretion, if Tenant subleases or assigns all or part of its
Premises.

         SECTION 21.15     TRANSFER OF LANDLORD'S INTEREST. In the event
Landlord transfers its reversionary interest in the Premises or its rights under
this Lease, other than a transfer for security purposes only, Landlord shall be
relieved of all obligations occurring hereunder after the effective date of such
transfer.

         SECTION 21.16     COUNTERPARTS. This Agreement may be executed by the
parties in counterparts, and each counterpart Agreement shall be deemed to be an
original hereof.

         SECTION 21.17     QUIET ENJOYMENT. Subject to the provisions of this
Lease and conditioned upon performance of all of the provisions to be performed
by Tenant hereunder, Landlord shall secure to Tenant during the Lease Term the
quiet and peaceful possession of the Premises and all rights and privileges
appertaining thereto.

         SECTION 21.18     AUTHORITY. Each party hereto warrants that it has the
authority to enter into this Agreement and that the signatories hereto have the
authority to bind Landlord and Tenant, respectively.

         SECTION 21.19     NAME OF BUILDING. In the event Landlord chooses to
change the name of the Building, Tenant agrees that such change shall not affect
in any way its obligations under this Lease, and that, except for the name
change, all terms and conditions of this Lease shall remain in full force and
effect. Tenant agrees further that such name change shall not require a formal
amendment to this Lease, but shall be effective upon Tenant's receipt of written
notification from Landlord of said change.

         SECTION 21.20     RULES AND REGULATIONS. Tenant agrees to abide by and
adhere to any reasonable and non-discriminatory rules and regulations for the
Building, and all amendments thereto, which may be promulgated from time to time
by Landlord which do not materially change the provisions of this Lease. The
rules and regulations currently in effect upon the date of execution of this
Lease are set forth as Exhibit D attached hereto. Landlord shall use
commercially reasonable efforts to enforce) the Rules and Regulations in a
non-discriminatory manner.

         SECTION 21.21     AGENCY DISCLOSURE. At the signing of this Lease, the
Leasing Representative(s) identified in the Lease Summary represented the party
noted therein. Each party signing this document confirms that prior oral and/or
written disclosure of agency was provided to him/her in this transaction (as
required by WAC 308-124D-040).

         SECTION 21.22     LEASE SUMMARY, ADDENDUM AND EXHIBITS. The Lease
Summary, set forth in the opening pages of the Lease, as well as any Addenda and
Exhibits to this Lease specifically referenced in this Lease are hereby
incorporated herein by reference.

         SECTION 21.23     SURVIVAL. Those provisions of this Lease which, in
order to be given full effect, require performance by either Landlord or Tenant
following the termination of this Lease shall survive the Termination Date.

                                       27

<PAGE>

         SECTION 21.24     PARKING. During the term of the Lease, Landlord shall
make available to Tenant four (4) vehicle parking pass(es) for every 1,000
square feet of useable area in the Premises. The parking passes shall entitled
Tenant and it's visitors to the use of an equal number of unreserved and
undesignated standard and compact sized parking spaces within the parking areas
utilized by Landlord for tenant and visitor parking. All unreserved parking
spaces shall be on a first-come, first-served basis in common with other tenants
of, and visitors to, the Project in parking spaces provided by Landlord from
time to time. Each automobile shall, at Landlord's option from time to time,
bear a permanently or temporarily affixed and visible identification sticker or
tag to be provided by Landlord and, if such sticker or tag is provided, Tenant
shall only be entitled to an amount equivalent to the number of parking passes
allocated to Tenant. Tenant shall pay Landlord (or Landlord's parking operator
if Landlord so requests) monthly rent for each vehicle parking pass provided
hereunder at the monthly parking rate established from time to time by Landlord
or Landlord's parking operator; provided, however, Tenant's parking shall be
rent free during the initial five (5) year Term. Tenant's parking rights shall
be subject to the terns and conditions of the Parking Agreement attached hereto
as Exhibit F. If a parking administration program is implemented by Landlord,
such program may include, without limitation, designating parking spaces for the
exclusive use by Tenant or other tenants, implementing a card key access system,
and/or requiring identification tags on all vehicles. Landlord may require all
visitors, clients and/or customers (collectively, the "Visitors") to park only
in areas designated by Landlord from time to time as being for the use of such
Visitors. Further, parking for Visitors is subject to the payment of parking
fees at rates set and to be set from time to time by Landlord in its reasonable
discretion, which will be posted in the parking areas. Tenant acknowledges that
Landlord is required to comply with the Transportation Management Program
imposed with respect to the Building and Project by the City of Bellevue
pursuant to Bellevue City Code ("BCC") Section 14.60.080. Tenant agrees to
comply with the provisions of the BCC which are applicable to Tenant and
Tenant's employees including, without limitation, providing financial incentives
under BCC Section 14.60.070.F.5 and satisfying the guaranteed ride home
requirements of BCC Section 14.60.070.F.6. In addition, Tenant shall cooperate
with Landlord in conducting the survey required under BCC Section 14.60.080.D
and in the preparation of the Evaluation Report required under BCC Section
14.60.080.E.

         IN WITNESS WHEREOF, this Lease Agreement is executed on the day and
year first written above.

                  TENANT:            SCOLR, INC., a
                                     Delaware corporation

                                     /s/
                                     --------------------------------------
                                     By Steve Moger
                                     Its CFO

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<PAGE>

                  LANDLORD:          BTC SEATTLE LLC, a
                                     Delaware limited liability company

                                     By: Bentall Capital (U.S.), Inc.,
                                         a California corporation, its
                                         Authorized Agent

                                              By: /s/ Gary J. Carpenter
                                                  ----------------------------
                                                     Gary J. Carpenter
                                                     Executive Vice President

                                              By: /s/ Lisa C. Rowe
                                                  ----------------------------
                                                      Lisa C. Rowe
                                                      Vice President/Leasing

                                       29<PAGE>
                                                                   EXHIBIT 10.27

                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT is made and entered into this 2nd day of July,
2003, by SCOLR, Inc., a Delaware corporation (the "Company"), and Stephen Turner
(the "Employee").

                                   BACKGROUND

The Company desires to retain the services of the Employee, and the Employee is
willing to be employed by the Company, on the terms and subject to the
conditions set forth in this Agreement. Accordingly, in consideration of the
mutual covenants contained herein, the parties agree as follows:

                                   AGREEMENT

      1.    POSITIONS AND DUTIES

            1.1 TITLE. Employee is employed as Director, Product Development.

            1.2 DUTIES. The Employee shall report to the Chief Executive Officer
and/or President of the Company or his/her designee(s) and perform those duties
which are customary with Employee's then current position, together with such
additional duties as may be established by his/her direct supervisor. Employee
agrees to (a) devote his entire professional time, attention, and energies to
his position, (b) use his best efforts to promote the interests of the Company;
(c) perform faithfully, honestly and efficiently his responsibilities and duties
to the satisfaction of the Company, and (d) refrain from any endeavour outside
of his employment which interferes with his ability to perform his obligations
hereunder. Employee may serve in various capacities for various non-profit
charitable organisations, from time to time. Any such non-profit charitable work
that has the potential to interfere to any degree with Employee's services to
the Company or where Employee will be taking a visible role in the organisation
must be disclosed to, and approved by, the Company prior to Employee performing
such services.

            Since the Company's needs are constantly evolving, the Company in
its sole discretion may alter the Employee's job title and/or duties. The
Employee understands that his hours of work will vary and may be irregular and
will be those hours required to meet the objectives of his employment. Employee
additionally agrees to abide by any general employment guidelines or policies
adopted by the Company such as those detailed in a Company's handbook or
communicated to the Company's employees, as such guidelines or policies may be
implemented and/or amended from time to time.

      2.    TERM OF EMPLOYMENT. Employee's employment with the Company has no
definite term. The parties agree that the employment relationship is "at-will"
and may be terminated with or without Cause. No one other than the Board of
Directors has the power to change the at-will character of the employment
relationship. However, as set forth in Section 4
<PAGE>
below, the various possible ways in which Employee's employment with the Company
may be terminated will impact the Company's obligations to Employee under this
Agreement. For example, the Company's obligations to Employee are less if he
quits without Good Reason than if the Company terminates his employment Without
Cause.

      3.    SALARY, BENEFITS AND OPTIONS.

            3.1 BASE SALARY. As payment for the services rendered by the
Employee during the Term of this Agreement, the Company shall pay to the
Employee an annualized base salary (the "Base Salary") of $85,000 (US) per year.
The Base Salary, as earned, shall be payable on the Company's normal payroll
schedule and is subject to normal or authorized withholdings. Six months after
this Agreement is executed by Employee, Employee's salary shall be increased to
$95,000 (US) per year. Other increases in the Base Salary shall be subject to
the Company's discretion, exercised from time to time based on performance and
other factors deemed relevant by the President and/or CEO, or the Board of
Directors.

            3.2 RETROACTIVE BASE SALARY PAYMENT. Within fifteen days of the
complete execution of this Agreement, Employee shall receive a lump sum payment,
in effect "catching him up" on salary at the difference between the Base Salary
that he has earned and $85,000 rate for the period of April 1, 2003 until the
date that his Base Salary was increased to $85,000.

            3.3 EMPLOYEE BENEFITS. The Employee shall be entitled to be enrolled
in all employee benefits that the Company may make generally available from time
to time for its comparably situated management employees, including those
available, if any, under any group health, dental, life or disability insurance
plans. The benefits will be provided in accordance with the formal plan
documents or policies and any issues with respect to entitlement or payment of
benefits under the insurance benefits package will be governed by the terms of
such documents or policies. Employee acknowledges that the Company retains the
right to unilaterally modify, amend, and terminate any benefits and benefit
plans.

            3.4 STOCK OPTIONS. Upon signing this Agreement, Employee shall be
granted 50,000 options under the Company's 1995 Stock Option Plan ("Stock Option
Plan"). Such options shall be priced on the day of the Board of Director's
approval of the key terms and conditions of this Agreement.

            (a) In addition, the Employee shall be eligible to receive options
      to purchase shares of the common stock of SCOLR, Inc., as may determined
      by the Board of Directors of SCOLR, Inc. from time to time.

            (b) The terms and conditions of any such stock options shall be
      governed by SCOLR's Stock Option Plan, which is incorporated herein by
      reference and which, together with any stock option agreements with the
      Employee (together, the "Stock Option Documents"), shall control such
      stock options in all respects. The Company may amend or terminate the
      Stock Option Plan from time to time as the Company in its sole discretion
      determines. If the Employee's employment is terminated for any reason, the
      Employee shall have the right to exercise the stock options pursuant to
      the termination of employment provisions in the Stock Option Documents.

                                       2
<PAGE>
            3.5 BONUS. If applicable, the Employee will be eligible for bonuses
and/or additional stock options in accordance with any applicable Incentive
Plans established from time to time by the Board of Directors in its discretion
or if otherwise granted by the CEO and/or President or by the Board's at its or
their sole discretion. In order to be eligible for any bonus grant, Employee
must be employed, and must not have been given, or must not have given to the
Company, notice of termination, at the time of the bonus grant.

            3.6 VACATION. The Employee shall be entitled to paid vacation which
shall accrue pro rata on a monthly basis. The Employee will accrue 3 weeks of
paid vacation per year for his first 5 years of service. In years 6-10, Employee
will accrue an additional day per year up to a maximum of 4 weeks per year.
Unused accrued vacation may be carried over to the following year in an amount
equal to the annual vacation accrual hereunder, or, if different, the maximum
amount allowable under the Company's standard carryover policy for its employees
in effect from time to time. Unused vacation in excess of the allowed carry over
shall be forfeited. The Employee shall also be entitled to such paid holidays as
the Company generally affords its comparably situated management employees.

            3.7 DEDUCTIONS. The Company shall be entitled to deduct and withhold
from all compensation payable to the Employee (a) all amounts it reasonably
determines are required to be deducted or withheld pursuant to any present or
future law, ordinance, regulation, order, writ, judgment, or decree requiring
such deduction and withholding and/or (b) any other withholding consented to by
the Employee.

            3.8 TRAVEL AND OTHER EXPENSES. The Company shall pay or promptly
reimburse the Employee for those travel, promotional, professional societies,
and similar expenditures incurred by Employee which the Company determines are
reasonably necessary for the proper discharge of the Employee's duties under
this Agreement and for which the Employee submits appropriate receipts and
indicates the amount, date, location and business character. Employee agrees to
comply with the terms of any generally applicable reimbursement or travel
expense policy as a precondition of reimbursement.

      4.    TERMINATION.

            4.1 TERMINATION FOR CAUSE. The Company may terminate this Agreement
at any time without prior notice for "Cause" (as defined below) with no
severance or other obligation to the Employee, other than payment of the amount
of unpaid earned Base Salary accrued pursuant to Section 3.1 to the date of such
termination. For purposes of this Agreement "Cause" shall mean a termination due
to objective evidence of any of the following:(1) (i) Employee's commission of a
felony, a crime involving fraud or a crime that would negatively effect the
Company's reputation if Employee remained in his position; (ii) dishonesty by
Employee; (iii) violation of a key Company policy by Employee (including, but
not limited to, acts of harassment or discrimination, or use of unlawful drugs
or drunkenness on Company property during normal work hours); (iv)
insubordination (i.e. conduct such as refusal to follow direct orders of the
CEO) or dereliction of duty by Employee (such as failure to perform

--------
(1) Sworn statements based on the personal knowledge of the signer shall satisfy
this requirement of objective evidence. With respect to commission of a felony
for purposes of clause (i), the statement shall set forth the elements thereof.

                                       3
<PAGE>
minimum duties after written warning); (v) Employee's competition with the
Company, diversion of any corporate opportunity, breach of fiduciary duty or a
serious conflict of interest or self-dealing inuring to the Employee's direct or
indirect benefit and the company's detriment; (vi) intentional or grossly
negligent conduct by Employee that is demonstrably injurious to the Company or
its affiliates; (vii) substantial damage to the facilities where the Company
conducts its business, to the extent that replacement is impracticable, or
(viii) breach of this Agreement or the Business Protection Agreement by
Employee. A resignation by the Employee at any time after the occurrence of an
event which would constitute Cause for termination by the Company shall be
considered a termination by the Company for Cause. In the event of the
termination of the Employee's employment under this or any other provision of
this Agreement, the Employee's rights with respect to any and all stock options
previously and hereafter granted by SCOLR, Inc. shall be governed in all
respects by the applicable Stock Option Plan under which such options were
granted.

            4.2 TERMINATION WITHOUT CAUSE. Subject to the provision of Section
4.6, the Company may terminate this Agreement, without cause, at any time for
any reason, or no reason, and with or without notice.

            4.3 TERMINATION DUE TO DISABILITY OR DEATH. Employee's employment
shall be terminable immediately upon Employee's death or disability.
"Disability" is defined for purposes of this subsection as a condition that
renders Employee unable to perform the essential functions of his employment
hereunder with or without reasonable accommodation. The parties agree that due
to the importance of Employee's position with the Company, either an indefinite
leave or a leave of absence in excess of 90 days within a twelve month period
would cause an undue hardship to the Company and would not constitute a
reasonable accommodation. Nothing in this Section is intended to violate any
federal or State law regarding medical leave.

            4.4 VOLUNTARY TERMINATION BY EMPLOYEE. Employee may terminate his
employment with the Company at any time by giving the Company written notice of
such termination, to be effective thirty (30) days following the provision of
such written notice. The Company, at its election, may or may not require
Employee to continue to perform his duties hereunder for all or some of such
thirty (30) day notice period.

            4.5 VOLUNTARY TERMINATION BY EMPLOYEE UPON GOOD REASON. This
Agreement may be terminated by the Employee, for Good Reason by giving the CEO
of the Company thirty (30) calendar days written notice of intent to terminate.
Such notice must set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such Good Reason termination.

            For the purposes of this Agreement, "Good Reason" shall mean,
without Employee's express written consent, the occurrence of any one or more of
the following: (a) a material substantial reduction in the authority or
responsibilities of the Employee, (b) one or more reductions, in the cumulative
annual amount of 15 percent or more, from the Base Salary of the Employee as set
forth in this Agreement, or (c) any move of Employee's principal place of work
by a distance of 30 miles or more. No event shall constitute "Good Reason"
unless the Employee shall have notified the Company as set forth above of the
conduct allegedly constituting Good Reason and the Company shall have failed to
correct such conduct within

                                       4
<PAGE>
thirty (30) days of the date of its receipt of such written notice from the
Employee. Moreover, unless Employee shall have notified the Company of the
conduct allegedly constituting Good Reason within six months of the first
occurrence of such conduct, then Employee shall have waived his right to claim
that such conduct constitutes "Good Reason" under this Agreement.

      4.6   SEVERANCE.

            (a) In the event the Employee's employment is terminated (i) by the
      Company without Cause, or (ii) by the Employee for Good Reason, then, in
      lieu of any further salary, benefits, or other payments, the Company shall
      continue to pay the Employee his then current Base Salary set forth in
      Section 3.1 for a period of six months from the date of termination
      ("Severance Period"). Severance shall be paid in such installments and
      subject to such deductions as the Employee's Base Salary has otherwise
      been paid during the Term of this Agreement.

            (b) During the Severance Period, the Employee agrees to provide the
      Company with any reasonable assistance requested by the Company without
      the necessity of any additional payment to Employee, provided, however,
      that any assistance beyond 10 hours a week will be paid by the Company at
      the Employee's Base Salary rate computed on an hourly basis. Since
      Employee may be requested to provide services to the Company during the
      Severance Period, so long as Employee is not in breach of his obligations
      under this Agreement or his Business Protection Agreement, his stock
      options shall continue to vest during such period.

            (c) Severance pay and/or vesting of stock options under this Section
      4.6 are expressly pre-conditioned, among other things, upon the Employee's
      execution and delivery of a release of all claims against the Company and
      Employee's continued compliance with his other obligations to the Company.
      Attached as EXHIBIT A is the form of Waiver and Release of Claims
      Agreement that must be executed as a pre-condition of Employee's receipt
      of severance. Employee understands that he will not be entitled to any
      severance pay under this Agreement until he executes and delivers this
      Waiver and Release of Claims Agreement and the seven (7) day revocation
      period set forth in the Waiver and Release of Claims Agreement has run.
      Violation of this Agreement or the Business Protection Agreement, a
      failure to provide requested assistance during the Severance Period,
      and/or failure to sign the Release and Waiver of Claims Agreement shall
      immediately relieve the Company from its payment obligation under this
      paragraph and entitle it to recover any Severance amounts paid.

            (d) The Employee agrees that severance as provided herein shall be
      the sole remedy to which he is entitled in the event of the termination of
      his employment without Cause or for Good Reason, and that severance will
      not be paid in the event of termination with Cause, his death or
      disability, or resignation without Good Reason.

                                       5
<PAGE>
      5.    RETURN OF COMPANY PROPERTY. At the time of termination of Employee's
employment, or as earlier requested by the Company, the Employee shall return to
the Company all products, books, records, forms, specifications, formulae, data,
data processes, designs, files, papers, writings and other materials relating to
the business of the Company, including without limitation, all Confidential
Information, including proprietary or licensed computer programs, customer lists
and customer data, work-in-progress and notes and/or copies or duplicates
thereof in the Employee's possession or under the Employee's control whether in
written, electronic or other form. The Employee shall not retain any copies or
duplicates of such property and all licenses granted to him by the Company to
use computer programs or software shall be revoked as of the date of such
termination. In addition, Employer shall certify to the Company as of the
effective date of termination that none of the assets or business records
belonging to the Company is in his possession, remain under his control, or have
been transferred to a third person.

      6.    CONFIDENTIALITY, INFORMATION AND NON-COMPETITION AGREEMENT.
Concurrently with the execution of this Agreement and as a condition precedent
to the Company's obligations hereunder, the Employee shall execute and deliver
to the Company the Business Protection Agreement attached hereto as EXHIBIT B.
The provisions of such Agreement shall remain in full force and effect after any
and all terminations. If the Employee leaves the employ of the Company, he
consents to the Company's notification to any new Company of his
responsibilities under this Agreement.

      7.    OTHER PROVISIONS.

            7.1 COMPLIANCE WITH OTHER AGREEMENTS. The Employee represents and
warrants to the Company that the execution, delivery and performance of this
Agreement and the Business Protection Agreement will not conflict with or result
in the violation or breach of any term or provision of any order, judgment,
injunction, contract, agreement, commitment or other arrangement to which the
Employee is a party or by which he is bound. The Employee acknowledges that the
Company is relying on his representation and warranty in entering into this
Agreement, and agrees to indemnify the Company from and against all claims,
demands, causes of action, damages, costs or expenses (including attorneys'
fees) arising from any breach thereof.

            7.2 NONDELEGABLE DUTIES. This is a contract for the Employee's
personal services. The duties of the Employee under this Agreement are personal
and may not be delegated or transferred by the Employee in any manner
whatsoever, and shall not be subject to involuntary alienation, assignment or
transfer by the Employee during his life.

            7.3 ENTIRE AGREEMENT. This Agreement and the Business Protection
Agreement are the only agreements and understandings between the parties
pertaining to the subject matter of said agreements, and supersede all prior
agreements, summaries of agreements, descriptions of compensation packages,
discussions, negotiations, understandings, representations or warranties,
whether verbal or written, between the parties pertaining to such subject
matter. Provided, nothing herein is intended to relieve the Employee of his
duties under any prior Employee Non-competition, Confidentiality or Inventions
Agreement with SCOLR, Inc. nor to relieve SCOLR, Inc. of any obligations under
any prior stock option agreements

                                        6
<PAGE>
between SCOLR, Inc. and the Employee, and any and all stock options granted
previously to the Employee by SCOLR, Inc. shall remain in effect pursuant to
their terms and the governing Stock Option Plan. This Agreement specifically
supersedes any employment agreements and understandings between the Employee and
SCOLR, Inc. which shall be deemed terminated by mutual agreement and of no
further force and effect.

            7.4 GOVERNING LAW, VENUE. This Agreement shall be governed by and
construed according to the laws of the State of Washington. Each of the parties
submits to the exclusive jurisdiction of any State or Federal court sitting in
Seattle, Washington in any action arising out of or related to this Agreement
and further agrees not to bring any action or proceeding arising out of or
related to this Agreement in any other court.

            7.5 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable to any extent in any context, it shall nevertheless be
enforced to the fullest extent allowed by law in that and other contexts, and
the validity and force of the remainder of this Agreement shall not be affected
thereby,

            7.6 AMENDMENT AND WAIVER. This Agreement may be amended or modified
only by a writing executed by each of the parties. Either party may in writing
waive any provision of this Agreement to the extent such provision is for the
benefit of the waiving party. No waiver by either party of a breach of any
provision of this Agreement shall he construed as a waiver of any subsequent or
different breach, and no forbearance by a party to seek a remedy for
non-compliance or breach by the other party shall be construed as a waiver of
any right or remedy with respect to such non-compliance or breach.

            7.7 BINDING EFFECT. The provisions of this Agreement shall bind and
inure to the benefit of the parties and their respective successors and
permitted assigns.

            7.8 NOTICE. All notices and other communications under this
Agreement shall be in writing and shall be given by personal or courier delivery
facsimile or first class mail, certified or registered with return receipt
requested, and shall be deemed to have been duly given upon receipt if
personally delivered or delivered by courier, on the date of transmission if
transmitted by facsimile, or three days after mailing if mailed, to the
addresses of the Company and the Employee contained in the records of the
Company at the time of such notice. Any party may change such party's address
for notices by notice duly given pursuant to this paragraph.

            7.9 HEADINGS, PRONOUNS. The Section and other headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any and all uses of masculine
or feminine pronouns herein are solely to aid in the ease of reading this
Agreement and any such pronoun usage shall have equal application to the members
of the opposite gender.

                                       7
<PAGE>
      8.    ACKNOWLEDGMENT. The Employee acknowledges that he has read this
Agreement, he understands that the Company has been represented by Garvey
Schubert Barer in this matter, he has been encouraged to consult with an
attorney representing him regarding the terms and conditions hereof, and that he
accepts and signs this Agreement as his own free act and in full understanding
of its present and future legal effect.

SO AGREED as of the date first entered above.

SCOLR, INC.                                       EMPLOYEE

/s/ David T. Howard                               /s/ Stephen Turner
-------------------------------------             ------------------------------
David T. Howard                                   Stephen Turner
President and Chief Employee Officer              Director, Product Development

                                       8

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