FIRST AMENDMENT TO QUADRANT BUSINESS PARK STANDARD FORM MULTI-TENANT LEASE

THIS FIRST AMENDMENT TO QUADRANT BUSINESS PARK STANDARD FORM MULTI-TENANT LEASE (this "Amendment") is dated for reference purposes the 27 ^th day of June, 2006, by and between STERLING REALTY ORGANIZATION CO ., a Washington corporation , successor in interest to F. H. Braillard, doing business as The Quadrant Business Park ("Landlord"), and D3 TECHNOLOGIES, INC., a California corporation ("Tenant").

A.           Landlord and Tenant entered into that certain Quadrant Business Park Standard Form Multi-Tenant Lease dated June 23, 2005 (the "Lease"), for the lease of certain premises consisting of approximately 9,230 square feet located at Building F, 8217 44th Avenue West, Suite D, Mukilteo, Washington 98275 (the "Initial Premises").

B.           Landlord and Tenant desire to amend the Lease on the terms and conditions set forth in this Amendment.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency cit which is hereby acknowledged, the parties agree as follows:

1.            Defined Terms . Unless otherwise defined in this Amendment, capitalized terms used herein shall have the same meaning as they are given in the Lease.

2.            Expansion of Premises . Commencing on September 1, 2006 (the "Expansion Space Commencement Date"), the Initial Premises shall be expanded by 8,824 square feet of space located in Suite A of Building F, 8217 44th Avenue West, Mukilteo, Washington 98275 (the "Expansion Space"). The floor plan showing the exact location of the Expansion Space is attached hereto as Exhibit A . All terms and conditions of the Lease, as amended by this Amendment, shall apply to Tenant's lease of the Expansion Space.

3.            Expansion Space Term . Tenant's lease of the Expansion Space shall commence on the Expansion Space Commencement Date and shall continue through December 31, 2011 (the "Expansion Space Term"). Tenant shall have the right to extend the Expansion Space Term on the same terms and conditions as those set forth in the last two sentences of Section 3 of the Lease.

4.            Expansion Space Base Rent . Monthly Base Rent for the Expansion Space for the Expansion Space Term shall be as follows:

5.            Improvements . Landlord shall, at Landlord's expense and on a turnkey basis, complete the tenant improvements to the Premises as depicted on the Floor Plan using the same finishes that were used in the Initial Premises provided, however, Tenant shall be responsible for paying for any specific Tenant upgrades (such as, without limitation, upgrades to finishes. structure and building systems). Tenant shall reimburse Landlord for the cost of any such upgrades within ten (10) days after receipt of an invoice from Landlord for such cost. Except for the improvements to be completed by Landlord, Tenant is leasing the Expansion Space in its “as is” condition.

6.            Ratification . Except as expressly set forth in this Amendment, the terms and conditions of the Lease shall remain in full force and effect and are hereby ratified by Landlord and Tenant.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

TENANT:

D3 TECHNOLOGIES, INC.

By:___________________________

Ed Knowles, CFO

LANDLORD:

STERLING REALTY ORGANIZATION CO.

By: ___________________________

David Schooler, President

QUADRANT BUSINESS PARK

STANDARD FORM-MULTI-TENANT LEASE

1.            PARTIES   This lease is made this 23 ^rd day of June, 2005 between F. H. Braillard, owner, d.b.a. THE QUADRANT BUSINESS PARK, “Landlord”, and D3 TECHNOLOGIES, “Tenant”

2.            PREMISES    Landlord agrees to lease to Tenant, “The Premises” described in Exhibit “A” and consisting of approximately 9,230 S. F. (exact square feet to be determined within 30 days of execution and adjustments to this lease as required), of office space.  The Premises are a part of “The Building”, which Building is located on the “Real Property” described in Exhibit “B”.

3.            TERM   The term of this lease shall be 65 months commencing on the 1 ^st day of August, 2005, and terminating on the 31 ^st day of December, 2010, unless sooner terminated as provided herein; or extended pursuant to Paragraph twenty-two (22) herein.  Tenant may extend this lease for four (4), one (1) one year periods, at terms to be agreed to.  Tenant must notify Landlord, in writing, on hundred and eighty (180) days prior to each Lease Extension.

4.            POSSESSION

5.            RENT    Without prior notice or demand, Tenant agrees to pay Landlord as monthly rent for the Premises the sum of: (SEE SCHEDULE BELOW) on or before the fifth (5 ^th ) day of the first full calendar month of the term hereof and a like sum on or before the fifth (5 ^th ) day of each and every successive calendar month thereafter during the term hereof.  Rent for any period during the term hereof which is for less than one (1) month shall be a prorated portion of the monthly installment herein, based upon a thirty (30) day month.  Rent shall be paid to Landlord at the address to which notices to Landlord are to be given without deduction or offset in lawful money of the United States of America, or to such other person or at such other place as Landlord may from time to time designate in writing.  In addition to base rent stated here, Tenant shall pay additional rent as their share of the Common Area Costs and Expenses, pursuant to Paragraph 8.

6.            PREPAID RENT   Upon execution of this Lease, Tenant shall deposit with Landlord $6,964.00 (the “deposit”) as prepaid rent and shall be allocated as follows:

a.           Prepaid Rent

$      0       of the Deposit shall be applied to monthly rent due for the first month of the Lease term.

b.            $    6,938.00   of the Deposit shall e applied to monthly rent due for the last month of the Lease term.

7.            USE    Tenant shall use the Premises for engineering and general business offices, and other lawful purposes as may be incidental thereto and hereby agrees that it has determined to its satisfaction that the Premises can be used for those purposes.  The Premises may not be used for any other purposes without Landlord’s written consent. Outside storage, including without limitation, trucks and other vehicles, is prohibited Landlord’s written consent.  Tenant shall at his own expense and cost obtain any and all licenses and permits necessary for its use of the Premises, and shall promptly comply with all governmental orders and directives including but not limited to those regarding the correction, prevention and abatement of nuisances in or upon, or connected with, the Premises, all at Tenant’s sole expense.  Tenant shall not permit any objectionable odors smoke, dust, gas, noise or vibrations to emanate from the premises, nor take any other action which would constitute a nuisance or would disturb or endanger any other tenants of the building or buildings on the Property, or unreasonably interfere with their use of their respective Premises.  In additional to any other remedies Landlord may have for a breach by Tenant of the terms of this Section 7, Landlord shall have the right ot have Tenant evicted from the Premises.  Without Landlord’s prior written consent, Tenant shall not receive, store or otherwise handle any product, material or merchandise which is explosive or highly inflammable.

With respect to any release of toxic or hazardous substances or wastes or other condition of the Premises occurring on or after the date of the Lease and caused by or resulting from the negligent acts or omissions or willful misconduct of Tenant, its employee’s, authorized agents or contractors, and which release or other condition violates the provisions of, or necessitates any removal, treatment, or other remedial action under, any past, present, or future federal, state or local statute or ordinance or any regulation, directive, or requirement of any governmental authority with jurisdiction relating to protection of the environment, Tenant agrees to defend, indemnify, and hold harmless Landlord, its partners, employees, agents, and contractors, from and against any and all losses, claims, liabilities, damages, fines, costs, and expenses (including reasonable attorney’s fees and legal expenses) arising out of or resulting there from.  The provisions of this paragraph shall survive the termination or expiration of this Lease and the surrender of the Premises by tenant, with respect to releases, or conditions occurring prior to such termination, expiration, or surrender.  With respect to any release of toxic or hazardous substances, or wastes or other condition of the Premises occurring prior to the date of this Lease and caused by or resulting from the negligent acts or omissions or willful misconduct of Landlord, it's agents, or contractors, and which release or condition violates the provisions of, or necessitates any removal, treatment, or other remedial action under, any past, present, or future federal, state, or local statute or ordinance or any regulation requirement or directive of any governmental authority with jurisdiction relating to protection of the environment, Landlord agrees to defend, indemnify, and hold harmless Tenant from and against any and all losses, liabilities, damages, demands, fines, costs and expenses (including reasonable attorney’s fees and legal expenses) arising out of or resulting there from.

Tenant shall remove any sumps and clarifiers and any related Hazardous Materials (“Hazardous Material” shall mean any petroleum and petroleum products, asbestos, and PCB’s and any “hazardous substances”, “hazardous materials” or “hazardous substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1908, as amended, the Hazardous Materials Transportation Act, as amended, or the Resource Conservation and Recovery Act, as amended, those substances, materials and wastes which are defined as “hazardous wastes” or as “hazardous substances” in the Washington health and safety codes or labor codes, and “hazardous” or “toxic” in the regulations adopted or publication promulgated pursuant to any of said laws in or about the Premises and associated with Tenant’s use and occupancy thereof upon the expiration or earlier termination of the lease.

Notwithstanding anything to the contrary contained herein, Landlord agrees that the Tenant shall not be responsible for, and Landlord shall hold Tenant harmless against any costs of cleanup or removal arising from or associated with any hazardous material existing in, on or throughout Premises, as of the date Tenant occupies the premises pursuant to the terms of this Lease.

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

Tenant shall not do or permit anything to be done in or about the Premises to be used for any improper, immoral, unlawful, or objectionable purpose.  Tenant shall not commit or suffer to be committed any waste in or upon the Premises.  Tenant shall not place upon or install in windows or other openings or exterior sides of doors or walls of the Premises any signs, symbols, drapes or other materials without written consent of the Landlord.

Landlord gives Tenant and its employees, authorized representatives, and business invites a nonexclusive right to reasonable use and enjoyment of the Common Areas, subject to Landlord’s rights set forth herein.

8.            TENANT’S SHARE OF COMMON COSTS AND EXPENSES   Tenant shall pay as additional rent their share of the common costs and expense of the operation and maintenance of the Property.  Tenant’s Share is estimated to be equal to $0.21 for each square foot of the Premises for the first accounting period of the Lease term, which is currently $1,938.00 per month.

An accounting period is a calendar year.  The first accounting period shall commence on the date the Lease term commences, and the last accounting period shall and on the date the Lease term expires.  The first accounting period of the Lease term shall be the first full calendar year of the Lease term.  Landlord may adjust the Estimated Common Costs and Expenses at the commencement of each new accounting period throughout the Lease term, whereupon Tenant’s share shall be adjusted accordingly.  If at any time during any accounting period, Landlord determines that he actual Common Costs and Expenses for the remainder of such accounting period will vary by more than five percent (5%) from the Landlord’s original estimate, Landlord may, by written notice to Tenant, adjust the Common Cots and Expenses for the remainder of such accounting period, and, accordingly, Tenant’s Share to be paid hereunder.  If the actual Tenant’s Share of the Common Area Costs and Expenses exceeds Tenant’s payments made, Tenant shall pay to Landlord the deficiency within thirty (30) days of Tenant’s receipt of such statement of deficiency.  If Tenant’s payments made during the accounting period exceed the actual Tenant’s Share, Landlord may, at Landlord’s sole discretion, pay excess to Tenant at the time Landlord furnishes said statement to credit the excess toward Tenant’s payments of the Tenant’s share of the next succeeding accounting period.

Common Costs and Expenses shall include the “Property Taxes” and “Operating Expenses”.  Property Taxes shall include, without limitation, all real and personal taxes, charges and assessments imposed on the Premises, Building, Property or Common Areas, and any other taxes, charges or assessments assessed against the Landlord, Premises, Building, or Common Area in connection with the use or occupancy of the Premises at any time during the term of this Lease.  “Operating Expenses” shall mean the annual Operating Expenses which include, without limitation, all operating costs incurred by Landlord or on behalf of the Premises in maintaining, operating, and providing services to and for the Building, Property, and Common Areas, including, without limitations, the costs of maintenance, utilities, supplies, insurance, service contracts, advertising, independent contractors, property management, a reserve account for the replacement of capital items, compensation of all persons who perform regular and recurring duties connected with the Building, Property, and Common Areas, its equipment, utilities, sprinkler systems, and operation thereof, and an allowance to Landlord or Landlord’s agent for supervision of such maintenance, operation, services and repairs of the Building, Property, and Common Areas and any and all assessments charges to Landlord or the property, in connection with the operation, repair and maintenance of the Common Areas.

9.            REPAIR RESPONSIBILITY

a.           By taking possession of the Premises, Tenant shall be deemed to have accepted the Premises as being in good, sanitary order, condition, and repair.  Tenant shall supply a punch list, within five (5) days of possession that will describe any exception items for Landlord to repair at Landlord’s expenses.  Tenant shall, when and if needed, at Tenant’s sole expense, make repairs to the Premises and every part thereof including electrical, plumbing, lighting, heating, and air conditioning.  Tenant shall surrender the Premises to Landlord in good condition upon the expiration or sooner termination of this Lease; provided however, that Tenant shall not be held responsible for damage to the Premises from causes beyond the reasonable control of Tenant, to the extent covered by Landlord’s fire and extended coverage insurance policy, or for ordinary wear and tear.  Except as specifically provided in an addendum, if any, to this Lease, Landlord shall have no obligation whatsoever, to alter, remodel, improve, repair, redecorate or paint the Premises or any part thereof and the parties hereto affirm that Landlord has made no representations to Tenant respecting the condition of the Premises or the Building except as specifically herein set forth.

b.           Landlord, at its option for the benefit of the Tenant and to assure proper maintenance of the heating and air conditioning, may engage a maintenance firm to maintain the heating, ventilation and air conditioning system (if any) servicing the Premises.  Tenant shall pay to Landlord, or, at Landlord’s election, directly to the maintenance firm, Tenant’s share of the cost of such maintenance.

c.           Except as provided herein, Tenant shall, at its expense clean, maintain and keep in good repair throughout the term of this Lease the entire Premises and appurtenances, including without limitation, signs, windows, doors, skylights, and trade fixtures including the cleaning of glass and woodwork on both sides of the interior wall separating their Premises from the Interior Common area do the Building.

d.           Notwithstanding the provisions of Article 9a. above, but subject to the provisions of Paragraph 15, Landlord shall repair and maintain the structural portions of the Building, including the basic plumbing, air conditioning, heating, and electrical systems, installed or furnished by Landlord only in so for as such heating, air conditioning and electrical system provide service to the entire Building, unless such maintenance and repairs are caused in part or in whole by the act, neglect, fault or omission of any duty by the Tenant, its agents, servants, employees or invitees, in which case Tenant shall pay to Landlord the reasonable costs of such maintenance and repairs.  Landlord shall not be liable for any failure to make any such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written of the need of such repairs or maintenance is given to Landlord by Tenant.  Except as provided in Articles 15 and 16 hereof, there shall be no abatement of rent and no liability by Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs or improvements in or to any portion of the Building or the Premises or to fixtures, appurtenances and equipment therein.  Tenant waives the right to make repairs at Landlord’s expense under any law, statute, or ordinance now or hereafter in effect.

10.            MAINTENANCE AND MANAGEMENT

a. &