OFFICE LEASE

Office Lease Agreement

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COST U LESS INC | SUN LIFE ASSURANCE COMPANY

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Title: OFFICE LEASE
Governing Law: Washington Date: 3/26/2004
Industry: Retail (Department and Discount) Sector: Services

OFFICE LEASE

SUN LIFE ASSURANCE COMPANY OF CANADA

"LANDLORD"

WITH

COST-U-LESS, INC.

"TENANT"

BUILDING: THE DELPHI BUILDING

SUITE 110

DATED: November 18, 2003

<PAGE>

OFFICE LEASE

THIS OFFICE LEASE ("Lease") is made and entered into as of the 18 day of

November, 2003, by and between Sun Life Assurance Company of Canada, a Canada

corporation ("Landlord"), and Cost-U-Less, Inc., a Washington corporation

("Tenant"). In consideration of this Lease, Landlord and Tenant covenant and

agree as follows:

SECTION 1: BASIC PROVISIONS

This Section contains the basic lease provisions between Landlord and

Tenant.

A. BUILDING: The Delphi Building, 3633 - 136th Place SE,

Bellevue, Washington (the "Building"), located on

the real property legally described on Exhibit A

attached hereto (the "Property").

B. PREMISES: Suite 110 in the Building as outlined or

crosshatched on Exhibit B.

C. COMMENCEMENT DATE: April 1, 2004, or later subject to Section 3.

D. EXPIRATION DATE: Sixty (60) months from the Commencement Date

subject to Section 3.

E. RENTABLE AREA: The rentable area of the Premises shall

conclusively be deemed 9,305 square feet, and the

rentable area of the Building shall conclusively

be deemed 69,489 square feet, for purposes of

this Lease, subject to Section 31(M).

F. TENANT'S SHARE: 13.39%, subject to Section 4 and Section 31(M).

G. BASE RENT: From the Commencement Date through the Expiration

Date, as further described in Sections 3 and 4,

as follows:

<TABLE>

MONTH(S) MONTHLY BASE RENT

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

<S> <C>

Months One (1), Two (2) $0.00 per month (Gratis)

and Three (3)

Month Four (4) through $14,732.92 per month

Month Twelve (12)

Month Thirteen (13) through $15,508.33 per month

Month Twenty Four (24)

Month Twenty Five (25) $16,283.75 per month

through Month Thirty Six

(36)

Months Thirty Seven (37) $0.00 per month (Gratis)

and Thirty Eight (38)

</TABLE>

<PAGE>

<TABLE>

MONTH(S) MONTHLY BASE RENT

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

<S> <C>

Month Thirty Nine (39) $17,059.17 per month

through Month

Forty Eight (48)

Month Thirty Nine (49) $17,834.58 per month

through Month Forty Eight

(60)

</TABLE>

H. ADDITIONAL RENT: Tenant shall pay Tenant's Share of Taxes and

Tenant's Share of Expenses in excess of such

amounts for the calendar year 2004 (the "Base

Year") as further described in Section 4.

I. PERMITTED USE: Offices, subject to Section 8.

J. DEPOSITS: Prepaid rent is $17,834.58 via check upon lease

execution to be applied towards the last month's

rent.

K. PARKING: Tenant shall be granted the right to use, in

common with other building tenants, free parking

for 33 spaces in the building's surface parking

lot. An additional 4 spaces shall be covered,

reserved and at no charge for the duration of the

initial term. Any additional reserved parking

required by tenant shall be on a first-come,

first serve basis and subject to then market

rates. All parking is subject to the Rules

(defined below).

L. BROKER (IF ANY): Broderick Group, who shall be paid by Landlord,

subject to Section 25.

M. GUARANTOR(S): None.

N. RIDERS/EXHIBITS: In addition to Exhibit A (Property), Exhibit B

(Premises), Exhibit C (Work Letter Agreement),

and Rider One (Rules), this Lease includes: Rider

Two (Option Addendum), Rider Three (Landlord's

Disclaimer & Waiver).

O. LANDLORD'S NOTICE ADDRESS (SUBJECT TO SECTION 24):

Sun Life Assurance Company of Canada

c/o UNICO Properties, Inc.

10900 NE 4th Street, Suite 800

Bellevue, WA 98004

<PAGE>

P. TENANT'S NOTICE ADDRESS (SUBJECT TO SECTION 24):

Until the Commencement Date:

Cost-U-less, Inc.

Preston, WA 98006

Attention: _______________________

On and After the Commencement Date:

Cost-U-Less, Inc.

3633 - 136th Place SE, Suite 110

Bellevue, WA 98004

Attention: Jeff Meder

Q. RENT PAYMENTS: Rent shall be paid to "Sun Life Assurance Company

of Canada c/o Unico Properties, Inc." at 10900 NE

4th Street, Suite 800, Bellevue, WA 98004 or such

other parties and addresses as to which Landlord

shall provide advance notice.

The foregoing provisions shall be interpreted and applied in accordance

with the other provisions of this Lease. The terms of this Section, and the

terms defined in Section 31 and other Sections, shall have the meanings

specified therefor when used as capitalized terms in other provisions of this

Lease or related documentation (except as expressly provided to the contrary

therein).

SECTION 2: PREMISES AND PREPARATION OF PREMISES

A. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases

from Landlord the Premises subject to the provisions herein contained. Tenant

has inspected the Premises (and portions of the Building providing access to or

serving the Premises) or has had an opportunity to do so, and agrees to accept

the same "as is" without any agreements, representations, understandings or

obligations on the part of Landlord to perform any alterations, repairs or

improvements unless expressly provided under this Lease and in the attached

Exhibit C. Tenant further acknowledges that Landlord has not made any

representation or warranty (express or implied) with respect to the condition or

suitability of the Premises, Building or Property for Tenant's purposes or any

particular purpose.

B. PREPARATION OF PREMISES. The obligations of Landlord and Tenant to

perform work and supply materials and labor to prepare the Premises for Tenant's

occupancy shall be as set forth in Exhibit C attached hereto and incorporated

herein. Landlord's obligation, if any, for completion of the Premises

("Landlord's Work") shall be defined and limited by said Exhibit C, and Landlord

shall not be required to furnish or install any item not indicated thereon;

provided, however, Landlord warrants to Tenant that all Landlord's Tenant

Improvement Work shall be performed in a workmanlike manner and conform to

applicable industry standards. Any

<PAGE>

additional alterations or improvements to the Premises beyond those set forth on

Exhibit C shall be at Tenant's sole cost and expense and subject to all

provisions of Section 10, including without limitation the prior approval of

Landlord. Taking possession of the Premises by Tenant shall be conclusive

evidence the Premises were, on that date, in good, clean and tenantable

condition and delivered in accordance with this Lease, unless set forth

otherwise in a mutually agreed upon written "punch list".

SECTION 3: TERM AND COMMENCE

A. TERM AND CONFIRMATION. The term ("Term") of this Lease shall commence

on the Commencement Date and end on the Expiration Date as specified in Section

1 above, unless sooner terminated as provided herein, subject to adjustment as

provided below and the other provisions hereof. Tenant shall execute a

confirmation of the Commencement Date, the Expiration Date and other matters in

such form as Landlord may reasonably request within twenty (20) days after

requested (but nothing herein shall require Landlord to so request); any failure

to respond within such time shall be deemed an acceptance of the matters as set

forth in Landlord's confirmation.

B. ADJUSTMENTS TO COMMENCEMENT AND EXPIRATION. It is acknowledged that

the Commencement Date specified in Section 1 is an estimated date. This Lease

shall commence on the Commencement Date specified in Section 1 if Landlord's

Tenant Improvement Work, if any, is "substantially completed" (as that term is

used in the construction industry) by such date but otherwise the Commencement

Date shall be adjusted to be the first to occur of the following events: (i) the

date Landlord provides Tenant notice that Landlord's Tenant Improvement Work is

substantially complete; (ii) the date on which Tenant takes possession or

commences beneficial occupancy of the Premises for the purpose of commencing

business operations; or (iii) if substantial completion of Landlord's Work is

delayed in whole or in part due to Tenant's unreasonable acts or omissions,

excluding force majeure, then the date determined by Landlord as the date upon

which Landlord's Tenant Improvement Work would have been substantially

completed, but for Tenant's acts or omissions. In no event shall Landlord have

any liability for loss or damage to Tenant resulting in any delay in the

Commencement Date, nor shall Tenant have any right to terminate this Lease, and

Tenant's sale recourse shall be the postponement of Rent and other obligations

until the Commencement Date is established as set forth above. The term of this

Lease is 60 months and if the Commencement Date is delayed pursuant to this

Section, the Expiration Date shall be the date which is the day prior to the

last day of the 60th month following the Commencement Date. Landlord shall use

commercially reasonable efforts to facilitate Tenant's Tenant Improvement Work

wherever possible.

C. EARLY ENTRY. On approximately March 1, 2004 following the existing

tenant's vacation of the Premise, Tenant shall be entitled to enter the Premises

for fixturing and move-in purposes provided (i) Tenant shall not interfere with

Landlord's completion of Landlord's Tenant Improvement Work, if any, and shall

coordinate its activities and comply with Landlord's directives, (ii) all

provisions of this Lease other than those relating to payment of Rent shall

apply to any such pre-commencement entry (including without limitation all

insurance, Indemnity and freedom from lien provisions), and (iii) if Tenant

beneficially occupies the Premises (or any part thereof) or commences business

operations from the Premises (or any part

<PAGE>

thereof) during such period, then the Commencement Date (and obligation to pay

Rent) shall be deemed advanced to the date Tenant so occupies the premises,

provided, the mere moving of furniture and equipment into the Premises shall not

be deemed commencement of business operations or other beneficial occupancy as

those terms are used in this Section 3(C).

D. EARLY TERMINATION. Notwithstanding anything in this Lease to the

contrary, and provided Tenant is not in material default of this Lease beyond

applicable cure periods at the time of its exercise and as of the date of the

early termination, Tenant shall have the right to terminate this Lease as of the

last day of the thirty-sixth (36th) month of the Lease Term by giving Landlord

irrevocable written notice of its intent to so terminate at least Twelve (12)

months prior to the early termination date. In the event Tenant exercises its

right to terminate the Lease early as set forth herein, Tenant shall pay to

Landlord, in addition to any other sums owing Landlord hereunder, the

unamortized portion of 1. improvements made to the Premises pursuant to Section

2(B) and Exhibit C, and 2. leasing commissions paid by Landlord on account of

this Lease. The cost of said improvements and leasing commissions shall be

equally amortized over sixty (60) months of the Lease on a straight-line basis

and said cost shall be provided to Tenant within a reasonable amount of time

following Commencement. Within ninety (90) days of Tenant's notice to Landlord

to terminate early, Landlord shall provide Tenant notice of the unamortized

amount that will be owing on account of the early termination. Tenant shall pay

such amount to Landlord, in full, on or before thirty (30) days prior to the

early termination date. Failure by Tenant to timely pay such amount, to timely

exercise its notice, or to timely satisfy all other conditions of this Section

3(D) shall invalidate Tenant's notice to terminate early and this Lease shall

continue in full force and effect for the entire Lease Term.

SECTION 4: BASE RENT AND ADDITIONAL RENT

A. BASE RENT. Subject to adjustment for expenses, taxes and required

capital expenditures as set forth in this Section 4, Tenant shall pay Landlord

the monthly Base Rent set forth in Section 1 in advance on or before the first

day of each calendar month during the Term; provided, Tenant shall pay Base Rent

for the first full calendar month for which Base Rent shall be due (and any

initial partial month) when Tenant executes this Lease.

B. TAXES AND EXPENSES. Tenant shall pay Landlord "Tenant's Share of

Taxes" and "Tenant's Share of Expenses" in the manner described below. All such

charges shall be deemed to constitute "Additional Rent" which shall be deemed to

accrue uniformly during the calendar year in which the payment is due.

(i) During each calendar year after the Base Year Identified in

Section 1(H) above, Tenant agrees to pay as "Additional Rent" for the Premises,

"Tenant's Share" (defined below) of all increases in Taxes and Expenses incurred

by Landlord in the operation of the Building and Property, over the amount of

the Property Taxes and Expenses Incurred by Landlord in the operation of the

Building and Property during the Base Year. For purposes of this Lease,

"Tenant's Share" shall mean the ratio between the rentable area of the Premises

and the rentable area of the Building. Tenant's Share, calculated based on the

initial square foot area of the Premises, is set forth in Section 1(F) above,

and is subject to adjustment as set forth in Section 31 (M).

<PAGE>

(ii) Prior to or promptly after the commencement of each calendar

year following the Base Year, Landlord shall give Tenant a written estimate of

the anticipated increases in Taxes and Expenses over the Base Year and Tenant's

Share of such increases. Tenant shall pay such estimated amount to Landlord in

equal monthly installments, in advance, without deduction or offset, on or

before the first day of each calendar month, with the monthly installment of

Base Rent payable Section 4(A) above. After the end of each calendar year,

Landlord shall furnish to Tenant a statement showing in reasonable detail the

actual increases over the Base Year in the Taxes and Expenses incurred by

Landlord during the applicable calendar year and Tenant's Share thereof. If the

statement shows Tenant's Share of the actual increases exceeds the amount of

Tenant's estimated payments, within thirty (30) days after receiving the

statement, Tenant shall pay the amount of the deficiency to Landlord. If the

statement shows Tenant has overpaid, the amount of the excess shall be credited

against installments next coming due under this Section 4; provided, however

upon the expiration or earlier termination of the Lease Term, if Tenant is not

then in default under this Lease, Landlord shall refund the excess to Tenant.

(iii) If at any time during any calendar year of the Lease Term (other

than the Base Year) the Taxes applicable to the Building and Property change

and/or any information used by Landlord to calculate the estimated Expenses

changes, Tenant's estimated share of such Taxes and/or Expenses, as applicable,

may be adjusted accordingly effective as of the month in which such changes

become effective, by written notice from Landlord to Tenant of the amount or

estimated amount of the change, the month in which effective, and Tenant's Share

thereof. Tenant shall pay such increase to Landlord as a part of Tenant's

monthly payments of estimated Taxes or Expenses as provided above, commencing

with the month following the month in which Tenant is notified of the

adjustment.

(iv) For purposes of this Lease, the term" Expenses" means all costs

of and expenses paid or incurred by Landlord for maintaining, operating,

repairing, replacing and administering the Building and Property, including all

common areas and facilities and Systems and Equipment, and shall include the

following costs by way of illustration but not limitation: water and sewer

charges; insurance premiums; license. permit, and inspection fees; heat; light;

power; steam; janitorial and security services; labor; salaries; air

conditioning; landscaping; maintenance and repair of driveways and surface

areas; supplies; materials; equipment; tools; the cost of capital replacements

(as opposed to capital improvements); the cost of any capital improvements or

modifications made to the Building by Landlord that are intended to reduce

Expenses, are required under any Laws not applicable to the Building or Property

or not in effect at the time the Building was constructed, or are made for the

general benefit and convenience of ail tenants of the Building; all property

management costs, including office rent for any property management office and

professional property management fees; legal and accounting expenses; and all

other expenses or charges which, in accordance with generally accepted

management practices would be considered an expense of maintaining, operating,

repairing, replacing or administering the Building or Property. Capital costs

included in Expenses shall be amortized over such reasonable period as Landlord

shall determine with a return on capital at the current market rate per annum on

the unamortized balance or at such higher rate as may have been paid by Landlord

on funds borrowed for the purpose of constructing such capital replacements or

improvements.

<PAGE>

(v) For purposes of this Lease, the term "Taxes" means all real

estate taxes or personal property taxes and other taxes, surcharges and

assessments, unforeseen as well as foreseen, which are levied with respect to

the Building and Property and any improvements, fixtures and equipment and other

property of Landlord, real or personal, located in the Building or on the

Property and used in connection with the operation of the Building or Property

and any tax, surcharge or assessment which shall be levied in addition to or in

lieu of real estate or personal property taxes, other than taxes covered in

Section 15. The term "Taxes" shall also include any rental, excise, sales,

transaction, privilege, or other tax or levy, however denominated, imposed upon

or measured by the rental reserved hereunder or on Landlord's business of

leasing the Premises, excepting only net income, inheritance, gift and franchise

taxes.

(vi) Notwithstanding anything to the contrary contained above, as to

each specific category of expense which one or more tenants of the Building, at

Landlord's sole discretion, either pays directly to third parties or

specifically reimburses to Landlord (e.g., separately metered utilities,

separately contracted janitorial service, property taxes directly reimbursed to

Landlord, etc.) such tenant(s) payments with respect thereto shall not be

included in Expenses for purposes of this Paragraph 3, but Tenant's Share of

each of such category of expense shall be adjusted by excluding from the

denominator thereof the rentable area of all such tenants paying such category

of expense directly to third parties or reimbursing the same directly to

Landlord. Tenant shall not enter into separate contracts to provide any specific

utility or service normally provided by the Building, without Landlord's prior

written consent in Landlord's sale discretion. Moreover, if Tenant pays or

directly reimburses Landlord for any such category of expense (which shall only

be Landlord's prior consent), such category of expense shall be excluded from

the determination of Expenses for Tenant to the extent such expense was incurred

with respect to space in the Building actually leased to or occupied by other

Tenants.

C. PRORATIONS. If the Term commences on a day other than the first day of

a calendar month or ends on a day other than the last day of a calendar month,

the Base Rent and any other amounts payable on a monthly basis shall be prorated

on a per diem basis for such partial calendar months. If the Base Rent is

scheduled to increase under Section 1 other than on the first day of a calendar

month, the amount for such month shall be prorated on a per diem basis to

reflect the number of days of such month at the then current and increased

rates, respectively. If the Term commences other than on January 1, or ends

other than on December 31, Tenant's obligations to pay amounts under this

Section 4 towards Taxes and Expenses for such first or final calendar years

shall be prorated on a per diem basis to reflect the portion of such years

Included in the Term.

D. PAYMENTS AFTER LEASE TERM ENDS. Tenant's obligations to pay its share

of Taxes and Expenses (or any other amounts) as provided in this Lease accruing

during, or relating to, the period prior to expiration or earlier termination of

this Lease, shall survive such expiration or termination. Landlord may

reasonably estimate all or any of such obligations within a reasonable time

before, or anytime after, such expiration or termination. Tenant shall pay the

full amount of such estimate, and any additional amount due after the actual

amounts are determined, in each case within ten (10) days after Landlord sends a

statement therefor. If the actual amount is less than the amount Tenant pays as

an estimate, Landlord shall refund the difference within thirty (30) days after

such determination is made.

<PAGE>

E. LANDLORD'S ACCOUNTING PRACTICES AND RECORDS. Unless Tenant takes

exception by notice to Landlord within thirty (30) days after Landlord provides

any statement to Tenant for any item of Additional Rent, such statement shall be

considered final and binding on Tenant (except as to additional Expenses or

Taxes not then known or omitted by error). If Tenant takes exception by notice

within such time, Landlord may seek confirmation from Landlord's independent

certified public accountant as to the proper amount of Taxes and Expenses

determined in accordance with generally accepted accounting principles. In such

case: (i) such confirmation shall be considered final and binding on both

parties (except as to additional expenses or taxes not then known or omitted by

error), and (ii) Tenant shall pay Landlord for the cost of such confirmation,

unless it shows that Taxes and Expenses were overstated by at least five percent

(5%). Pending resolution of any such exceptions, Tenant shall pay all amounts

shown on such Landlord's statement, subject to credit, refund or additional

payment after any such exceptions are resolved.

F. GENERAL PAYMENT MATTERS. Base Rent, Additional Rent which Includes

without limitation Tenant's Share of Taxes, Tenant's Share of Expenses and any

other amounts which Tenant is or becomes obligated to pay Landlord under this

Lease or other agreement entered in connection herewith, are sometimes herein

referred to collectively as "Rent," and all remedies applicable to the

non-payment of Rent shall be applicable thereto. Rent shall be paid in good

funds and legal tender of the United States of America without prior demand,

deduction, recoupment, set-off or counterclaim, and without relief from any

valuation or appraisement laws. Rent obligations hereunder are independent

covenants, in addition to all other Landlord remedies (i) any Rent not paid by

Tenant when due shall accrue interest from the due date at the Default Rate

until payment is received by Landlord and (ii) in addition to such interest.

Tenant shall pay Landlord a service charge of two hundred fifty dollars

($250.00) or five percent (5%) of the delinquent amount, whichever is less, if

any portion of Rent is not received within five (5) days after the due date

except Landlord shall allow Tenant up to two (2) delays of not more than 10 days

to occur within the first year of tenancy with no penalty. No delay by Landlord

in providing any Rent statement to Tenant shall be deemed a default by Landlord

or a waiver of Landlord's right to require payment of Tenant's obligations

hereunder including those for actual or estimated taxes, expenses or capital

expenditures. In no event shall a decrease in Taxes or Expenses ever decrease

the monthly Base Rent or give rise to a credit in favor of Tenant. Landlord may

apply payments received from Tenant to any obligations of Tenant then accrued,

without regard to such obligations as may be designated by Tenant.

SECTION 5: QUIET ENJOYMENT

Landlord agrees that if Tenant timely pays the Rent and performs the terms

and provisions hereunder, Tenant shall hold the Premises during the Term, free

of lawful claims by any party acting by or through Landlord, subject to all

other terms and provisions of this Lease.

SECTION 6: UTILITIES AND SERVICES

A. STANDARD LANDLORD UTILITIES AND SERVICES. Provided Tenant is not in

default of this Lease, Landlord shall provide Tenant the following utilities and

services:

<PAGE>

(i) Elevator service during normal business hours of the Building

and the service of at least one elevator during all other hours.

(ii) Heating and cooling to maintain a temperature condition which in

Landlord's judgment provides for comfortable occupancy of the Premises under

normal business operations from 6 a.m. to 6 p.m. daily, except for Saturdays,

Sundays and those legal holidays generally observed in the State of Washington,

provided Tenant complies with Landlord's instructions regarding use of drapes

and thermostats and Tenant does not utilize heat generating machines or

equipment which affect the temperature otherwise maintained by the air cooling

system. Upon request Landlord shall make available at Tenant's expense after

hours heat or air-cooling. The minimum use of after hours heat or air cooling

and the cost thereof shall be determined by Landlord and confirmed in writing to

Tenant, as the same may change from time to time. Landlord's current rate as of

the date of this Lease for such after hours heat or air-cooling is Fifteen and

no/100 Dollars ($15.00) per hour.

(iii) Water for drinking, lavatory, and toilet purposes.

(iv) Electricity for building standard lighting and operation of low

power usage office machines in quantities usually furnished by Landlord to

tenants in the Building for general office use. Low power usage machines are

typewriters, desktop calculators, desk top computer terminals and similar

equipment with similar power requirements which operate on 110-volt circuits.

(v) Janitorial service. Janitorial service as customary for

comparable buildings within the Bellevue I-90 corridor market which includes

daily vacuum cleaning of carpets and cleaning of Building standard vinyl

composition tile, but no other services with respect to carpets or non-standard

floor coverings.

(vi) Maintain the windows, doors, floors and walls (exclusive of

coverings), ceilings, plumbing and plumbing fixtures, and electrical

distribution system and lighting fixtures in good condition and repair, except

for damage caused by Tenant, its employees, agents, invitees or visitors, except

that such service will not be provided as to any of the foregoing items that are

not standard for the Building.

(vii) Replacement of burned out fluorescent tubes in light fixtures

which are standard for the Building. Burned out bulbs, tubes or other light

sources in fixtures which are not standard for the Building will be replaced by

Landlord at Tenant's expense.

B. INTERRUPTIONS. Landlord shall use reasonable diligence to remedy an

interruption in the furnishing of such services and utilities. If, however, any

governmental authority imposes regulations, controls or other restrictions upon

Landlord or the Building which would require a change in the services provided

by Landlord under this Lease, Landlord may comply with such regulations,

controls or other restrictions, including without limitation, curtailment,

rationing or restrictions on the use of electricity or any other form of energy

serving the Premises. Tenant will cooperate and do such things as are reasonably

necessary to enable Landlord to comply with such regulations, controls or other

restrictions.

<PAGE>

C. NON-STANDARD USAGE. Whenever heat generating machines or equipment or

lighting other than building standard lights are used in the Premises by Tenant

which affect the temperature otherwise maintained by the air cooling system,

Landlord shall have the right to install supplementary air cooling units in the

Premises, and the cost thereof, including the cost of installation and the cost

of operation and maintenance thereof, shall be paid by Tenant to Landlord upon

billing by Landlord. Landlord may impose a reasonable charge for utilities and

services, including without limitation, air cooling, electric current and water,

required to be provided the Premises by reason of, (a) any substantial recurrent

use of the Premises at any time other than the hours of 7:00 a.m. to 6:00 p.m.,

Monday through Friday, (b) any use beyond what Landlord agrees to furnish as

described above, (c) electricity used by equipment designated by Landlord as

high power usage equipment or (d) the installation, maintenance, repair,

replacement or operation of supplementary air cooling equipment, additional

electrical systems or other equipment required by reason of special electrical,

heating, cooling or ventilating requirements of equipment used by Tenant at the

Premises. High power usage equipment includes without limitation, data

processing machines, punch card machines, computers and machines which operate

on 220-volt circuits. Tenant shall not install or operate high power usage

equipment on the Premises without Landlord's prior written consent, which may be

refused unless (i) Tenant confirms in writing its obligation to pay the

additional charges necessitated by such equipment and such equipment does not

adversely affect operation of the Building, and (ii) the Building electrical

capacity to the floor(s) containing the Premises will not be exceeded. At

Landlord's option, separate meters for such utilities and services may be

installed for the Premises and Tenant upon demand therefor, shall immediately

pay Landlord for the installation, maintenance, repair and replacement of such

meters.

D. LIMITATION. Landlord does not warrant that any of the services and

utilities referred to above will be free from interruption. Interruption of

services and utilities 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 damages or loss of any kind, or relieve Tenant

from performance of Tenant's obligations under this Lease.

E. UTILITY PROVIDERS. Notwithstanding anything to the contrary in this

Lease, Landlord shall have the sole, exclusive and absolute right to determine,

select and contract with utility company or companies that will provide

electricity and other basic utility service to the Building, Property and

Premises. If permitted by law, during the Term of this Lease, Landlord shall

have the right at any time, and from time to time, to either contract for

services from a different company or companies providing electricity or other

basic utility service (each such company hereinafter an "Alternate Service

Provider") or continue to contract for service from the service provider(s) that

is providing such utility service to the Building, Property or Premises at the

Commencement Date (each the "Existing Service Provider"). Tenant shall cooperate

with Landlord, the Existing Service Provider and any Alternate Service Provider

at all times and, as reasonably necessary, shall allow Landlord, the Existing

Service Provider and any Alternate Service Provider access to the Building's

utility lines, plumbing, feeders, risers, wiring, and any other machinery or

utility access ways within the Premises.

<PAGE>

SECTION 7: DEPOSITS

A. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit a

security deposit (if any) in the amount set forth in Section 1 with Landlord. If

Tenant is in default, Landlord can use the security deposit or any portion of it

to cure the default or to compensate Landlord for any damages sustained by

Landlord resulting from Tenant's default. Upon demand, Tenant shall immediately

pay to Landlord the sum equal to the portion of the security deposit expended or

applied by Landlord to restore the security deposit to its full amount. In no

event will Tenant have the right to apply any part of the security deposit to

any Rent or other sums due under this Lease. If Tenant is not in default at the

expiration or termination of this lease, Landlord shall return the security

deposit to Tenant within fifteen days after such expiration or termination date.

Landlord's obligations with respect to the deposit are those of a debtor and not

of a trustee, and Landlord can commingle the security deposit with Landlord's

general funds. Landlord shall not be required to pay Tenant interest on the

deposit. Landlord shall be entitled to immediately endorse and cash Tenant's

prepaid deposit; however, such endorsement and cashing shall not constitute

Landlord's acceptance of this Lease. In the event Landlord does not accept this

Lease, Landlord shall return said prepaid deposit immediately.

SECTION 8: USE, COMPLIANCE WITH LAWS AND RULES

A. USE OF PREMISES AND COMPLIANCE WITH LAWS. Tenant shall use the

Premises solely for the purposes set forth in Section 1 and for no other purpose

without obtaining the prior written consent of Landlord, which shall not be

unreasonably withheld for uses consistent with Landlord's then existing use

criteria for the Building. Tenant acknowledges that neither Landlord nor any

agent of Landlord has made any representation or warranty with respect to the

Premises or with respect to the suitability of the Premises or the Building for

the conduct of Tenant's business, nor has Landlord agreed to undertake any

modification, alteration or improvement to the Premises or the Building, except

as provided in writing in this Lease. Tenant acknowledges that Landlord may from

time to time, at its sole discretion, make such modifications, alterations,

repairs, deletions or improvements to the Building or Property as Landlord may

deem necessary or desirable, without compensation or notice to Tenant, provided

that such alterations, repairs, deletions or improvements shall not materially

adversely affect Tenant's use of the Premises during normal daytime business

hours and in no event shall Landlord be liable for any consequential damages.

Tenant shall promptly comply with all Laws affecting the Premises and the

Building, as well as the Rules (defined below), and to any reasonable

modifications to the Rules as Landlord may adopt from time to time that do not

materially affect Tenant's originally intended use of the Premises. Tenant

acknowledges that, except for Landlord's obligations pursuant to Sections 9 and

3D, Tenant is solely responsible for ensuring that the Premises comply with any

and all Laws applicable to Tenant's use of and conduct of business on the

Premises, and that Tenant is solely responsible for any alterations or

improvements to the Premises that may be required by such Laws, now existing or

hereafter adopted. Tenant shall not do or permit anything to be done in or about

the Premises or bring or keep anything in the Premises that will in any way

increase the premiums paid by Landlord on its insurance related to the Building

or which will in any way increase the premiums for fire or casualty insurance

carried by other tenants in the Building. Tenant will not perform any act or

carry on any practices that may injure the Premises or the Building that may be

a nuisance or

<PAGE>

menace to other tenants in the Building or that shall in any way interfere with

the quiet enjoyment of such other tenants. Tenant shall not do anything on the

Premises which will overload any existing parking or service to the Premises.

B. RULES. Tenant shall comply with the Rules set forth in Rider One

attached hereto (the "Rules") in addition to all other terms of this Lease.

Landlord shall have the right, by notice to Tenant or by posting at the

Building, to reasonably amend such Rules and supplement the same with other

reasonable Rules relating to the Building or Property, or the promotion of

safety, care, efficiency, cleanliness or good order therein. Nothing herein

shall be construed to give Tenant or any other Person any claim, demand or cause

of action against Landlord arising out of the violation of such Rules by any

other tenant or visitor of the Building or Property, or out of the enforcement,

modification or waiver of the Rules by Landlord in any particular instance.

SECTION 9: MAINTENANCE AND REPAIRS

Unless expressly provided otherwise in this lease, and in addition to the

provisions of Section 6(A)(vi), Landlord shall maintain, in good condition, the

common areas of the Building, the structural parts of the Building which shall

include only the foundations, bearing and exterior walls, subflooring, gutters,

downspouts, and the roof of the Building and the Building Systems and Equipment;

provided, in the event any such replacements, repairs or maintenance are caused

by or result from Tenant's excessive or improper use or occupation thereof or

which are caused by or result from the negligence or improper conduct of Tenant,

its agents, employees or invitees, the cost of such repairs shall be paid solely

by Tenant and Tenant shall pay the cost thereof within ten (10) days of notice

from Landlord. Except as provided above, and subject to Section 10 of this Lease

and Landlord's obligation to provide utilities and services described herein,

Tenant shall maintain and repair the Premises in neat, clean, sanitary and good

condition, including, without limitation, maintaining and repairing all

storefronts, Interior surfaces of the premises, fixtures, Premises' specific

systems and equipment, and interior plumbing serving the Premises as well as any

damage to the Building, Property or Premises caused by Tenant, its agents,

employees or invitees. If Tenant shall fail to keep and preserve the Premises in

said condition and state or repair, Landlord may, at its option (but with no

obligation) put or cause the same to be put into the condition and state of

repair agreed upon, and in such case Tenant, on demand, shall pay the cost

thereof.

SECTION 10: ALTERATIONS AND LIENS

A. ALTERATIONS. Subsequent to the completion of any Landlord's Work

pursuant to Section 2, Tenant shall not attach any fixtures, equipment or other

items to the Premises, or paint or make any other additions, changes,

alterations, repairs or improvements (collectively hereinafter "alterations") to

the Premises, Building or Property without Landlord's prior written consent,

which with respect to alterations to the Premises will not be unreasonably

withheld so long as Tenant is not then, nor has been, in default of this Lease

(beyond any applicable cure period). If Landlord consents to any alteration,

Landlord may post notices of nonresponsibility in accordance with law. Any

alterations so made shall remain on and be surrendered with the Premises upon

expiration or earlier termination of this Lease, except that Landlord may,

within

<PAGE>

thirty (30) days before or thirty (30) days after expiration or earlier

termination hereof elect to require Tenant to remove any or all alterations at

Tenant's sole costs and expense. Tenant shall not have any obligation to remove

any of Landlord's Tenant Improvement Work. At the time Tenant submits plans for

requested alterations to Landlord for Landlord's approval, Tenant may request

Landlord to identify which alterations Landlord may require Tenant to remove at

the termination of or expiration of this Lease, and Landlord shall make such

Identification simultaneous with its approval (if any) of the alterations. If

Landlord elects to require removal of alterations as part of its approval, then

at its own and sole cost Tenant shall restore the Premises to the condition

designated by Landlord in its election, before the last day of the term or

within thirty (30) days after notice of its election is given, whichever is

later.

B. PERFORMANCE. In the event Landlord consents in writing to Tenant's

requested alteration of the Premises, Tenant shall only contract with a

contractor approved by Landlord for the construction of such alterations, which

approval shall not be unreasonably withheld, shall secure all appropriate

governmental approvals and permits and shall complete such alterations with due

diligence, in a neat, clean, good and workmanlike manner and in strict

compliance with the plans and specifications approved by Landlord. All such

construction shall be performed in a manner which shall not unreasonably

interfere with the occupancy of the other tenants of the Building. All cost,

expenses and fees related to or arising from construction of any alteration

shall be paid by Tenant prior to delinquency. There shall also be included

within the cost of any such alteration work (whether for initial tenant

improvements or for any subsequent alteration) a fee to Landlord for Tenant's

use of Landlord's personnel involved in the supervision, coordination,

inspection and the like pertaining to such work. Said fee shall be ten percent

(6%) of the total cost of the alteration work (including costs of plans and

permits), plus Landlord's out-of pocket costs (if any), which shall be paid by

Tenant within ten (10) days after presentment by Landlord of an invoice.

Landlord may impose additional reasonable conditions and rules respecting the

manner and times in which such alteration work may be performed.

C. LIENS. Tenant shall pay all costs for alterations that it authorizes

and for which it or Landlord contracts ("Tenant Work") when due. Tenant shall

keep the Property, Building, Premises and this Lease free from any mechanic's,

materialman's, architect's, engineer's or similar liens or encumbrances, and any

claims therefor, or stop or violation notices, in connection with any Tenant

Work. Tenant shall remove any such claim, lien or encumbrance, or stop or

violation notices of record due to Tenant Work, by bond or otherwise within ten

(10) days after notice by Landlord. If Tenant falls to do so, such failure shall

constitute a default by Tenant, and Landlord may, in addition to any other

remedy, pay the amount (or any portion thereof) or take such other action as

Landlord deems necessary to remove such claim, lien or encumbrance, or stop or

violation notices, without being responsible for investigating the validity

thereof. The amount so paid and costs incurred by Landlord shall be deemed

additional Rent under this Lease payable upon demand, without limitation as to

other remedies available to Landlord. Nothing contained in this Lease shall

authorize Tenant to do any act which shall subject Landlord's title to, or any

Lender's interest in, the Building, Property or Premises to any such claims,

liens or encumbrances, or stop or violation notices, whether claimed pursuant to

statute or other Law or express or implied contract.

<PAGE>

SECTION 11: INSURANCE AND WAIVER OF SUBROGATION

A. INSURANCE. During the term of this Lease, Tenant at its sole cost and

expense shall continuously maintain the following types of insurance coverages:

(i) Property Damage Insurance for the protection of Tenant and Landlord, as

their interests may appear, covering all of Tenant's improvements and

alterations to the premises, Tenant's personal property, business records,

fixtures and equipment, and other insurable risks in an amount not less than the

full insurance replacement cost of such property and the full insurable value of

such other interests of Tenant, with coverages that also include "Building and

Personal Property," and "Business Income Coverage" covering at least one year of

anticipated income; and (ii) Worker's Compensation Insurance (if applicable) in

the amounts required by statute together with Employer Liability Insurance with

bodily injury by each accident with limits of at least $1,000,000, bodily injury

by disease with limits of at least $1,0000,000, and an aggregate bodily injury

limit of at least $1,000,000; and (iii) "all risk" Commercial General Liability

Insurance with limits of $2,000,000 each occurrence, and in the aggregate, with

coverage for death and bodily injury, property damage or destruction (including

loss of use), product liability and completed operations, and personal or

advertising Injury. All insurance required to be carried by Tenant hereunder

shall name Landlord and Landlord's Lender (if any) as additional insureds. All

insurance required to be provided by Tenant under this Lease shall release

Landlord and its Lender (if any) from any claims for damage to business or to

any person or the Premises, the Building and the Property and to Tenant's

fixtures, personal property, improvements and alterations in or on the Premises,

caused by or resulting from risks insured against under any insurance policy

carried by Tenant in force at the time of such damage. Additionally, all

insurance required to be provided by Tenant under this Lease: shall be issued by

insurance companies authorized to do business in the State of Washington with a

financial rating of at least an "A-" status as rated in the most recent edition

of Best's Key Rating Guide; shall be issued as a primary policy; shall be on an

occurrence basis; and shall contain an endorsement requiring at least thirty

(30) days prior written notice of cancellation to Landlord and Landlord's Lender

(if any), before cancellation or change in coverage, scope or amount of any

policy. Tenant shall deliver a certificate or copy of such policy together with

evidence of payment of all current premiums to Landlord within thirty (30) days

of execution of this Lease. Any certificate of insurance shall designate Tenant

as the insured, specify the Premises location, list Landlord (and its Lender, if

any) as additional insureds, and list Landlord with Landlord's current address

as "Certificate Holder." Tenant shall take all necessary steps to renew all

Insurance at least thirty (30) days prior to such insurance expiration dates and

shall provide Landlord a copy of the renewed policy or a certificate thereof,

prior to said policy's expiration date. If Tenant fails at any time to maintain

the insurance required by this Lease, and fails to cure such default within five

(5) business days of written notice from Landlord then, in addition to all other

remedies available under this Lease and applicable law, Landlord may purchase

such insurance on Tenant's behalf and the cost of such insurance shall be

Additional Rent due within ten (10) days of written invoice from Landlord to

Tenant.

B. WAIVER OF SUBROGATION. Landlord and Tenant release and relieve the

other, and waive the entire right of recovery for loss or damage to property

located within or constituting a part or all of the Premises, the Building or

the Property to the extent that the loss or damage is actually covered (and

claim amount recovered) by insurance carried by either party and in force

<PAGE>

at the time of such loss or damage. This waiver applies whether or not the loss

is due to the negligent acts or omissions of Landlord or Tenant, or their

respective officers, directors, employees, agents, contractors, or invitees.

Each of Landlord and Tenant shall have their respective property insurers

endorse the applicable insurance policies to reflect the foregoing waiver of

claims, provided, however, that the endorsement shall not be required if the

applicable policy of insurance permits the named insured to waive rights of

subrogation on a blanket basis, in which case the blanket waiver shall be

acceptable.

SECTION 12: CASUALTY DAMAGE

In the event the Building or Premises shall be destroyed or rendered

untenantable, either wholly or in part, by fire or other casualty, Landlord may,

at its option, restore the Building or Premises to as near their previous

condition as is reasonably possible and in the meantime the Rent shall be abated

in the same proportion as the untenantable portion of the Premises bears to the

whole thereof, provided, such abatement (i) shall apply only to the extent the

Premises are untenantable for the purposes permitted under this Lease and not

used by Tenant as a result thereof, and (ii) shall not apply if Tenant or any

other occupant of the Premises or any of their agents, employees, invitees,

transferees or contractors caused the damage. Unless Landlord, within sixty (60)

days after the happening of any such casualty, shall notify Tenant of its

election to so restore, this Lease shall thereupon terminate and end, provided,

if in Landlord's estimation the Premises cannot be restored within one hundred

twenty (120) days following such destruction, Landlord shall notify Tenant and

Tenant may terminate this Lease (regardless of Landlord's intent to restore) by

delivery of notice to Landlord within thirty (30) days of Landlord's notice.

Such restoration by Landlord shall not include replacement of furniture,

equipment or other items that do not become part of the Building or any

improvements to the Premises in excess of those provided for in the allowance

for building standard Items. Tenant agrees that the abatement of Rent as

provided above shall be Tenant's sole and exclusive recourse in the event of

such damage, and Tenant waives any other rights Tenant may have under applicable

Law to perform repairs or. terminate the Lease by reason of damage to the

Building or Premises.

SECTION 13: CONDEMNATION

If at least fifty percent (50%) of the rentable area of the Premises shall

be taken by power of eminent domain or condemned by a competent authority or by

conveyance in lieu thereof for public or quasi-public use ("Condemnation"),

including any temporary taking for a period of one year or longer, this Lease

shall terminate on the date possession for such use is so taken. If: (i) less

than fifty percent (50%) of the Premises is taken, but the taking includes or

affects a material portion of the Building or Property, or the economical

operation thereof, (ii) less than fifty percent (50%) of the Premises are taken

and in the reasonable judgment of Landlord the remaining Premises are not usable

for the business of Tenant, or (iii) the taking is temporary but will be in

effect for more than thirty (30) days, then in either such event, Landlord may

elect to terminate this Lease upon at least thirty (30) days' prior notice to

Tenant. The parties further agree that: (a) if this Lease is terminated, all

Rent shall be apportioned as of the date of such termination or the date of such

taking, whichever shall first occur, (b) if the taking is temporary,

<PAGE>

Rent shall not be abated for the period of the taking, but Tenant may seek a

condemnation award therefor (and the Term shall not be extended thereby), and

taken, the Rent shall be proportionately abated based on the square footage of

the Premises so taken. Landlord shall be entitled to receive the entire award or

payment in connection with such Condemnation and Tenant hereby assigns to

Landlord any interest therein for the value of Tenant's unexpired leasehold

estate or any other claim and waives any right to participate therein, and

Tenant shall make no claim against Landlord for termination of the leasehold

interest or interference with Tenant's business. Tenant, however, shall have the

right to claim damages from the condemning authority for a temporary taking of

the leasehold as described above, for moving expenses and any taking of Tenant's

personal property and for the interruption to Tenant's business, but only if

such damages are awarded separately in the eminent domain proceeding and not as

part of the damages recovered by Landlord.

SECTION 14: ASSIGNMENT AND SUBLETTING

A. CONSENT REQUIRED. Tenant shall not, without the prior written consent

of Landlord, assign this Lease or any interest therein, or sublet the Premises

or any part thereof, or permit the use of the Premises by any party other than

Tenant or otherwise transfer this Lease (collectively "transfer"). Such consent

shall be entirely discretionary with Landlord, except as otherwise provided in

this Section 14. Consent to one such transfer shall not destroy or waive this

provision, and all subsequent transfers shall likewise be made only upon

obtaining prior written consent of Landlord. Subtenants or assignees shall

become directly liable to Landlord for all obligations of Tenant hereunder,

without relieving Tenant of any liability.

B. TRANSFERS. If Tenant is a corporation, then any transfer of this Lease

by merger, consolidation or liquidation, or any change in the ownership of, or

power to vote, the majority of its outstanding voting stock, shall constitute an

assignment for the purpose of this Section 14. If Tenant is a partnership, any

transfer of this Lease by merger, consolidation, liquidation or dissolution, or

any change in the ownership of a majority of the partnership interests, shall

constitute an assignment for the purposes of this Section 14. An assignment

forbidden within the meaning of this Section includes without limitation one or

more sales or transfers, by operation of law or otherwise, or creation of new

stock, by which an aggregate of more than fifty percent (50%) of Tenant's stock

shall be vested in a party or parties who are nonstockholders as of the date

hereof. This Section 14(B) shall not apply if Tenant's stock is listed on a

recognized security exchange or if at least eighty percent (80%) of its stock is

owned by a corporation whose stock is listed on a recognized security exchange.

C. RECAPTURE. If Tenant at any time desires to sublease this lease in its

entirety, it shall first notify Landlord in writing of its desire to do so, and

offer Landlord the right to recapture, at the per square foot rental for the

space then applicable pursuant to this Lease or the rental which Tenant proposed

to obtain whichever is lower, for all or any part of the Premises which Tenant

desires to sublet. Tenant's notice to Landlord shall specify (i) the name and

business of the proposed sublessee, (ii) the proposed effective date and

duration of the subletting, and (iii) the proposed rental to be paid to Tenant

by such sublessee. Landlord, upon receipt of such notice, shall have the option,

to be exercised within sixty (60) days from the date of the

<PAGE>

receipt of such notice, to require Tenant to execute a sublease to Landlord of

the Premises or such portion thereof as Tenant desires to sublet with the right

of Landlord to sublease to others, or anyone designated by Landlord. If Landlord

exercises such option and such sublease is at the rental specified in this

lease, Tenant shall be released of all further liability hereunder, from and

after the effective date of such sublease, with respect to that portion of the

Premises included therein. If Landlord does not exercise such option within such

time, Tenant may thereafter sublet the premises involved, provided Landlord

consents thereto, but at a rental not less than offered to Landlord in the

notice and not later than ninety (90) days after delivery of the aforesaid

notice unless a further notice is given. In the event Landlord does not exercise

its right to terminate this lease or to sublet a portion of the Premises from

Tenant and Landlord has granted its written consent, Tenant may sublet all of

the Premises in accordance with Landlord's consent. Any Rent accruing to Tenant

as a result of such assignment or sublease which is in excess or the Rent then

being paid by Tenant, or in excess of the pro rata share of Rent then being paid

by Tenant for the portion of the Premises being sublet, shall be paid by Tenant

to Landlord monthly as additional rent.

D. COSTS. Whether or not Landlord consents to a proposed transfer (or

exercises its right to recapture), Tenant shall reimburse Landlord on demand for

any and all actual and documented costs that are incurred by Landlord in

connection with any proposed transfer including, without limitation, the cost of

investigating the acceptability of the proposed transferee and Landlord's

reasonable attorneys' fees incurred in connection with each proposed transfer.

E. NOTICE. Any notice or request to Landlord with respect to a proposed

assignment or sublease shall contain the name of the proposed assignee or

subtenant (collectively "transferee"), the nature of the proposed transferee's

business to be conducted at the Premises, and the terms and provisions of the

proposed transfer. Tenant shall also provide Landlord with a copy of the

proposed transfer documents when available, and such financial and other

information with respect to the proposed transferee and transfer that Landlord

may reasonably require.

F. CONSENT. Notwithstanding the foregoing, in the event of a proposed

transfer, if Landlord does not exercise its option under Section 14(C), then

Landlord will not unreasonably withhold its consent thereto if (a) Tenant is not

then, nor has been, in default of this lease (beyond any applicable cure

period), (b) the proposed transferee will continuously occupy and use the

Premises for the term of the transfer, (c) the use by the proposed transferee

will be the same as Tenant's use of the Premises, (d) the proposed transferee is

reputable and of sound financial condition, (e) the transfer will not directly

or indirectly cause Landlord to be in breach of any contractual obligation, and

(f) the proposed transferee is not an existing tenant or subtenant of any other

premises located on the Property. In all other cases, Landlord may withhold

consent in it sole discretion.

G. TERMS. Any option(s) granted to Tenant in this lease or any option(s)

granted to Tenant in any amendments to this Lease, to the extent that said

option(s) have not been exercised, shall terminate and be voided in the event

this Lease is assigned, or any part of the Premises are sublet, or Tenant's

interest in the Premises are otherwise transferred, unless otherwise agreed to

by Landlord.

<PAGE>

SECTION 15: PERSONAL PROPERTY, RENT AND OTHER TAXES

Tenant shall pay prior to delinquency all taxes, charges or other

governmental impositions assessed against, levied upon or otherwise imposed upon

or with respect to all fixtures, furnishings, personal property, systems and

equipment located in or exclusively serving the Premises, and any improvements

made to the Premises under or pursuant to the provisions of this Lease. Whenever

possible, Tenant shall cause all such items to be assessed and billed separately

from the other property of Landlord. In the event any such items shall be

assessed and billed with the other property of Landlord, Tenant shall pay

Landlord its share of such taxes, charges or other governmental impositions

within ten (10) days after Landlord delivers a statement and a copy of the

assessment or other documentation showing the amount of impositions applicable

to Tenant's property. Tenant shall pay any rent tax, sales tax, service tax,

transfer tax, value added tax, or any other applicable tax on the Rent,

utilities or services herein, the privilege of renting, using or occupying the

Premises, or collecting Rent therefrom, or otherwise respecting this Lease or

any other document entered in connection herewith.

SECTION 16: LANDLORD'S REMEDIES

A. DEFAULT. The occurrence of anyone or more of the following events

shall constitute a "Default" by Tenant and shall give rise to Landlord's

remedies set forth in Section 16(B) below: (i) failure to make when due any

payment of Rent, unless such failure is cured within five (5) business days

after notice from Landlord; (ii) failure to observe or perform any term or

condition of this lease other than the payment of Rent (or the other matters

expressly described herein), unless such failure is cured within any period of

time following notice expressly provided with respect thereto in other Sections

hereof, or otherwise within a reasonable time, but in no event more than thirty

(30) days following notice from Landlord (provided, if the nature of Tenant's

failure is such that more time is reasonably required in order to cure, Tenant

shall not be in Default if Tenant commences to cure promptly within such period

and thereafter diligently pursues its completion); (iii) failure to cure

immediately upon notice thereof any condition of the Premises which is

hazardous, interferes with another tenant or the operation or leasing of the

Property, or may cause the imposition of a fine, penalty or other remedy on

Landlord or its agents or affiliates and such condition is Tenant's

responsibility under this Lease; (iv) abandonment and vacation of the Premises

(failure to occupy and operate the Premises for ten (10) consecutive days while

in monetary default under this Lease shall conclusively be deemed an abandonment

and vacation); or (v) Tenant, or any guarantor of this Lease ("Guarantor"),

filing by or for reorganization or arrangement under any Law relating to

bankruptcy or insolvency (unless, in the case of a petition filed against Tenant

or such Guarantor, the same is dismissed within thirty (30) days); (b) Tenant's

or any Guarantor's insolvency or failure, or admission of an inability, to pay

debts as they mature, or (c) a violation by Tenant or any affiliate of Tenant

under any other lease or agreement with Landlord or any affiliate thereof which

is not cured within the time permitted for cure thereunder. Additionally, if

Tenant violates the same term or condition of this lease on two (2) occasions

during any twelve (12) month period, Landlord shall have the right to exercise

all remedies for any violations of the same term or condition during the next

twelve (12) months without providing further notice or an opportunity to cure.

The notice and cure periods provided herein are intended to satisfy any and

<PAGE>

all notice requirements imposed by Law on Landlord and are in lieu of, and not

in addition to, any notice and cure periods provided by Law; provided, Landlord

may elect to comply with such notice and cure periods provided by Law.

B. REMEDIES. If a Default occurs, Landlord shall have the rights and

remedies hereinafter set forth to the extent permitted by Law, which shall be

distinct, separate and cumulative with and in addition to any other right or

remedy allowed under any Law or other provision of this Lease:

1. Landlord may terminate Tenant's right to possession without

termination of this lease, or Landlord may terminate this Lease and Tenant's

right to possession, at any time following a Default; provided, no act of

Landlord other than giving notice to Tenant with express statement of

termination shall terminate this Lease or Tenant's right to possession. Acts of

maintenance, efforts to relet the premises or the appointment of a receiver on

Landlord's initiative to protect Landlord's interest under this Lease shall not

constitute a termination of Tenant's right to possession. Upon termination of

Tenant's right to possession, Landlord shall have the right to reenter the

Premises and recover from Tenant in addition to any other monies provided herein

or at law; (a) the Worth of the unpaid Rent that had been earned by Landlord at

the time of termination of Tenant's right to possession; (b) the Worth of the

amount of the unpaid Rent that would have been earned after the date of

termination of Tenant's right to possession through the expiration of the Lease

Term; and (c) all other expenses incurred by Landlord on account of Tenant's

Default, including without limitation any Costs of Reletting (defined below) and

Landlord's attorney fees and collection costs. The "Worth" as used for item (a)

above is to be computed by allowing interest at the rate of eighteen percent

(18%) to accrue on all such unpaid Rent (or such lesser rate required by Law, if

any). The Worth as used for Item (b) above is to be computed by discounting the

amount of Rent at the discount rate of the Federal Reserve Bank of San Francisco

at the time of termination of Tenant's right of possession.

2. In the event Landlord has made improvements to the Premises for

the use and occupancy of Tenant, in addition to all other damages and rents to

which Landlord shall be entitled on account of Tenant's Default, Landlord shall

also be entitled to recover from Tenant a sum equal to: (a) the unamoritized

cost to Landlord of the basic building standard Tenant improvement costs, said

sum being computed by applying the percentage which the unexpired portion of the

Lease Term bears to the total scheduled Lease Term with interest at ten percent

(10%) per annum, plus (b) all costs to Landlord of non-building standard, custom

or special Tenant improvements (above basic building standard improvements) with

no adjustment for the unexpired portion of the scheduled Lease Term.

3. In the event of any such reentry by Landlord, Landlord may, at

Landlord's option, require Tenant to remove from the Premises any of Tenant's

property located thereon. If Tenant fails to do so, Landlord shall not be

responsible for the care or safekeeping thereof and may remove any of the same

from the Premises and place the same elsewhere in the Building or in storage in

a public warehouse at the cost, expense and risk of Tenant with authority to the

warehouseman to sell the same in the event that Tenant shall fail to pay the

cost of transportation and storage, all in accordance with the rules and

regulations applicable to the operation of a public warehouseman's business. In

any and all such cases of reentry Landlord may make any repairs In, to or upon

the Premises which may be necessary, desirable or convenient, and Tenant

<PAGE>

hereby waives any and all claims for damages which may be caused or occasioned

by such reentry or to any property in or about the Premises or any part thereof.

4. Landlord may bring suits for amounts owed by Tenant hereunder or

any portions thereof, as the same accrue or after the same have accrued, and no

suit or recovery of any portion due hereunder shall be deemed a waiver of

Landlord's right to collect all amounts to which Landlord is entitled hereunder,

nor shall the same serve as any defense to any subsequent suit brought for any

amount not therefor reduced to judgment. Landlord may pursue one or more

remedies against Tenant and need not make an election of remedies. All rent and

other consideration paid by any replacement tenants shall be applied at

Landlord's option: (i) first, to the Costs of Reletting (defined below), (ii)

second, to the payment of all costs and attorney fees of enforcing this lease

against Tenant or any Guarantor, (iii) third, to the payment of all interest and

service charges accruing hereunder, (iv) fourth, to the payment of Rent

theretofore accrued, and (v) with the residue, if any, to be held by Landlord

and applied to the payment of Rent and other obligations of Tenant as the same

become due (and with any remaining residue to be retained by Landlord). "Costs

of Reletting" shall include without limitation, all costs and expenses incurred

by Landlord for any repairs, improvements or other matters necessary to prepare

the Premises for another tenant, brokerage commissions, advertising costs,

attorneys' fees, any economic incentives given to enter leases with replacement

tenants. With respect to reletting the Premises, Landlord shall only be required

to use reasonable efforts that do not exceed such efforts Landlord generally

uses to lease other space in the Building, Landlord may continue to lease other

portions of the Building or other projects owned or managed by Landlord in the

same vicinity before reletting all or a portion of the Premises, and Landlord

shall not be required to relet at rental rates less than Landlord's

then-existing rates for new leases or terms less favorable to Landlord than

those contained herein. Reletting shall be done in accordance wit

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